EBay has agreed to appoint business executive and former AT&T CEO David Dorman as an independent director, ending its public dispute with investor Carl Icahn, who will withdraw his proposals to separate PayPal from eBay and to place two other people on eBay's board.

Icahn had suggested Dorman's appointment, which will increase the number of independent directors on eBay's 12-person board of directors to 10. The other two directors are eBay founder and chairman Pierre Omidyar and eBay president and CEO John Donahoe. In an earlier proposal, Icahn nominated Icahn Enterprises employees Jonathan Christodoro and Daniel Ninivaggi.

Dorman is a founding partner of Centerview Capital Technology, and is currently chairman of the board of CVS Caremark Corp. He was also a board member at Motorola, where he served as chairman from 2008 to 2012. Prior to Centerview, Dorman was chairman and CEO of AT&T.

"We are very pleased to have reached this agreement with Carl, settling proxy issues and enabling our board and management team to focus our full attention on a goal every shareholder agrees on—growing PayPal and eBay," Donahoe says in an April 10 press release.

EBay directors and certain company officers are permitted to discuss non-public information with Icahn, who has signed a confidentiality agreement.  "I am optimistic that this arrangement with eBay will enhance our ability to discuss large issues affecting the company with greater intelligence and will help to enhance shareholder value," Icahn says in the release.

Icahn this year began to pressure the online auction company to spin off PayPal. Donahoe pushed back, and the two spent the next few months trading barbs in the media. Analysts described eBay's ownership to PayPal as beneficial to both companies.

Icahn hasn't totally given up his view that the two companies should split.

"Over the last week I have had a number of conversations with [Donahoe]," Icahn says in the release. "We both strongly believe in the great potential of eBay and PayPal, and I have found a number of his ideas to be extremely compelling. However, I continue to believe that eBay would benefit from the separation of PayPal at some point in the near future and intend to continue to press my case through confidential discussions with the company."

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