New Canopy Management Faces

By Steven Vaughan-Nichols  |  Posted 2004-12-23 Print this article Print

Rocky Road"> Laura DiDio, Yankee Group senior analyst for application infrastructure and software platforms, also doesnt see clearly what these management changes will mean for SCO. "Truthfully, no one knows what the coup at Canopy augurs," DiDio said. "What is clear to me, is that Ray Noordas hand-picked longtime associates Ralph Yarrow and Darcy Mott are out at Canopy and presumably off SCOs board—or at least neutralized in those positions—meaning that the old familial ties forged at Novell have been cut."

DiDio suggested that new Canopy CEO Mustard will have a tough road ahead. "[He] is not going to have the same loyalty or sentiment in his dealings with either Canopy or SCO as Yarrow and Mott. Smooth Engine … provides both interim and permanent executive replacements, [so] Mustard himself may be an interim CEO—we dont know," she said.

Like Quandt, DiDio also indicated that SCOs latest earnings report could serve as an impetus to settle outstanding lawsuits. "Given SCOs recent financials, which showed they only got $120,000 in licensing revenues, down from $10 million the year before, [and] a net loss in earnings and revenue that declined from over $25 million to $10 million, I think its safe to assume that the new executive management will move quickly to shake things up and do a midcourse correction. So there could be a settlement in the offing… if IBM is willing to deal," she said.

On December 10, SCOs officers entered into Change in Control Agreements. In this agreement, the officers, including CEO McBride, CFO Bert Young and Christopher Sontag, senior vice president and general manager, promised to "not voluntarily leave the employ of the Company" in the event of a change in ownership.

The agreement further states: "If the Officer is still employed by the Company when a Change in Control occurs, any stock, stock option or restricted stock granted to the Officer by the Company that would have become vested upon continued employment by the Officer shall immediately vest in full and become exercisable."

Stowell characterized this agreement as being "similar to the poison pill arrangement" in the event of a hostile takeover. The Canopy management change, however, would not trigger this agreement.

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Steven J. Vaughan-Nichols is editor at large for Ziff Davis Enterprise. Prior to becoming a technology journalist, Vaughan-Nichols worked at NASA and the Department of Defense on numerous major technological projects. Since then, he's focused on covering the technology and business issues that make a real difference to the people in the industry.

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