Weeks away from a looming Aug. 1 showdown, Yahoo and that latest thorn in its side, Carl Icahn, have reached an accord, opting to give the activist investor several seats on the company's board of directors.

The agreement comes days after Legg Mason Capital Management, an investment house that owns about 4.4 percent of Yahoo, backed Jerry Yang by calling for Icahn to "end this disruptive proxy contest."

Under the terms of the deal, Yahoo will expand its nine-member board to 11, giving Icahn one seat for himself and two additional seats for directors of his choosing.

"I am very pleased that this settlement will allow me to work in partnership with Yahoo's board and management team to help the company achieve its full potential," Icahn's statement said. "While I continue to believe that the sale of the whole company or the sale of its search business in the right transaction must be given full consideration, I share the view that Yahoo's valuable collection of assets positions it well to continue expanding its online leadership and enhancing returns to stockholders." 

While the move seems to have averted a major crisis at Yahoo, the company is by no means out of the woods. According to a CNET report, Yang and Icahn, who had traded personal attacks for months, will now find themselves in the difficult position of having to shape Yahoo's future together.