In what may be a bid to keep their dirty laundry in house, Motorola (NYSE: MOT) has struck a deal with Carl Icahn in which his handpicked candidates—William R. Hambrecht founder, chairman and chief executive officer of WR Hambrecht + Co. and co-founder of Hambrecht & Quist, and Keith Meister, an MD of Icahn Investment Funds and principal executive officer of Icahn Enterprises—will be nominated for election to Motorola’s Board of Directors at the 2008 Annual Meeting of Shareholders and included in the Company’s 2008 proxy statement. Meister has been appointed to serve on the Board, starting immediately.

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In return, Icahn has agreed not to solicit proxies in connection with the 2008 Annual Meeting and to vote its shares in support of all of the Board’s director nominees. They have also agreed to drop all pending legal action against each other—including Icahn’s recent move to sue Motorola for documents he said proved the company’s directors had “failed in their duties.” Motorola, meanwhile, agreed to get Icahn’s input in “connection with significant matters” on the spinoff of its mobile devices division, including its search for a new CEO. Hambrect and Meister—subject to certain confidentiality restrictions—are also allowed to talk to Icahn about the Board’s activities. With the press reporting every blow-by-blow detail of the Icahn/Motorola fight, it was perhaps best for the troubled handset maker to find a way to shut Icahn up—at least publicly. Motorola and Icahn have been working out a deal for the last couple of weeks to get Icahn to drop his proxy battle in which he was seeking to get four of his chosen candidates nominated to the Board. Motorola had agreed to allow two of Icahn’s choices to the Board in return for the billionaire to drop the fight, but had balked at 34 year old Meister, whom they complained “was not qualified” because the board did not “know him.”  (release).