Motorola Inc. (NYSE: MOT) may have agreed to Carl Icahn's proposed spin-off, but they are not out of the woods yet. The billionaire activist investor sent another letter to the board (via a Schedule 13D/A filing) earlier this week bringing up several concerns about the speed and manner in which a new management team is selected for the mobile devices division. He also questioned why the transaction will take so long and why it took the threat of a proxy fight to take action. Icahn believes that many of these problems could be solved if the board were to install one of his candidates.

Carl Icahn has faced some criticism for not dropping his proxy fight against the company despite the spin-off agreement. The board said in a conference call that they proposed two new board nominees to him, but he declined to accept them and pressed on with the campaign. However, Icahn insists that this is only half true:

"It is true that Sandy Warner, head of the Nominating Committee called me and offered seats to two of my Nominees if I would drop the proxy fight. However, you failed to mention in your conference call that I told Mr. Warner that I would gladly accept this offer if the Board would also accept Keith Meister. Mr. Warner replied summarily to this offer that Meister did not “qualify.” I asked Mr. Warner what does one have to do to qualify — lose $37 billion dollars? Mr. Warner then replied that the Board did not “know” Meister. My answer was that Meister would fly anywhere at any time to meet the Board so they could “know” him (I did mention that the situation at Motorola is too serious for the Board to remain a country club). My offer to Motorola stills stands ... having a highly intelligent, energetic individual like Keith, who has 145 million reasons to spend his time working toward the spin-off being accomplished, may well make [the promise of a spin-off] come true in a timely fashion."

Carl Ican also argued that his request for more information about what steps the board actually took to correct the problem was well justified:

"You have stated to the press that our request for information about what steps the Board actually took to correct the problem at Motorola is an unnecessary distraction. We disagree. In a political election when constituents believe their representatives’ performance was inadequate, they are certainly not denied information as to whether their representative acted in a grossly negligent fashion. Why should it be different in Corporate America?"

In the end, a proxy fight is something that nobody needs as it is costly and time consuming. All Icahn wants is Keith Meister to be installed on the board and he would be willing to drop the proxy contest. This move is necessary to help ensure that a successful spin-off takes place that it will successfully unlock value for shareholders.

Related Companies
Nortel Networks Corporation (NT)
Nokia Corporation (NOK)
Research In Motion (RIMM)
Cisco Systems, Inc. (CSCO)
Arris Group, Inc. (ARRS)