Yahoo reached an agreement with Starboard

Yahoo has reached a settlement with activist investor Starboard, and will add four of Starboard's independent directors to its board.

Starboard CEO Jeff Smith will be among those joining Yahoo's board.

Two current board members, independent directors Lee Scott and Sue James, will opt not to stand for reelection, and will be leaving the board as part of the deal.

The 4 new board members are:

• Tor R. Braham, former managing director and global head of technology mergers and acquisitions for Deutsche Bank Securities
• Eddy W. Hartenstein, director of SanDisk, Sirius XM Holdings, Broadcom Ltd., and Rovi Corporation. Hartenstein was formerly CEO of the Tribune Company, chairman and CEO of DIRECTV, and publisher and CEO of the Los Angeles Times Media Group
• Richard S. Hill, Chairman of Tessera Technologies
• Jeffrey C. Smith, Managing Member, CEO, and Chief Investment Officer of Starboard

Activist investor Starboard has been running a proxy contest to replace the entire Yahoo board, including CEO Marissa Mayer. In an interview with CNBC last week, Smith explained the reasons behind the proxy contest, citing unfulfilled promises Yahoo's current management had made with shareholders in the past, its failure to monetize Yahoo Japan while spinning off its Alibaba holdings, and its failure to monetize its patent and real estate properties.

Smith has said that he's seeking "enough representation" on the board.

Here's the release.

Yahoo! Inc. today announced that it has reached an agreement with Starboard Value LP and its affiliates ("Starboard") under which four new independent directors, Tor R. Braham, Eddy W. Hartenstein, Richard S. Hill, and Jeffrey C. Smith, Starboard's CEO and Chief Investment Officer, will join the board, effective immediately.

Jeff Smith will also join the Strategic Review Committee. Additionally, Starboard has withdrawn its director nominees for Yahoo's board as part of the agreement.

At the Annual Meeting, two incumbent directors will not stand for re-election, so that following the Annual Meeting the board will have 11 members.

"We are pleased to welcome these four new highly respected, independent directors to our board," said Maynard Webb, chairman of Yahoo's board of directors. "The additional board members will bring valuable experience and perspectives to Yahoo during this important time for our company."

"This constructive resolution will allow management and the board to keep our focus on our extremely important objectives. Management is looking forward to working with the entire board, including the new directors, to maximize shareholder value," said Marissa Mayer, CEO of Yahoo.

Jeff Smith said, "I am pleased that we were able to reach a constructive agreement withYahoo to add new independent directors to the Yahoo Board. We look forward to getting started right away and working closely with management and our fellow board members with the common goal of maximizing value for all shareholders."