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Settlement leaves SCO board intact

Former employees challenged their ouster in court; settlement says they can stay on board of the SCO Group.

Lawsuits between two members of the SCO Group board and their former employer, The Canopy Group, have been settled, clearing some uncertainty from SCO's cloudy future.

The Canopy Group is also SCO's largest investor.

SCO Chairman Ralph Yarro had been Canopy's chief executive, and SCO board member Darcy Mott had been Canopy's chief financial officer. Yarro and Mott were ousted from Canopy in 2004 but retained their positions on SCO's board. The pair challenged their removal in a legal fight with Canopy, a Utah-based venture company initially established by former Novell CEO Ray Noorda.

The settlement of the suits was announced in a statement released Friday by SCO, a small company that rose to prominence with a bold but faltering legal case that contends the Linux operating system violates its Unix intellectual property.

Under the terms of the settlement, Yarro will receive all of Canopy's SCO shares, SCO said. In addition, Canopy paid Yarro, Mott and another former Canopy employee, Brent Christensen, an undisclosed amount of money. Yarro, Mott and Christensen have resigned from all roles at Canopy or companies Canopy invested in. Other terms weren't revealed.

SCO said it was happy with the settlement and the continued involvement of Yarro and Mott. "We believe that SCO will benefit from their long-term view of SCO's shareholder value," the company said in a statement.

SCO has many other issues to contend with, however. Its Unix software business is shrinking, a key judge has voiced skepticism about its legal claims and SCO is wrangling with Nasdaq over accounting errors that delayed its annual report.