UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K/A
 (Amendment No. 1)
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the fiscal year ended October 31, 2008
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from                      to                    .
 Commission file number: 0-29911
 THE SCO GROUP, INC.
  Delaware
    
    87-0662823(State of incorporation)
    
    (I.R.S. Employer Identification No.)355 South 520 WestLindon, Utah 84042
    
    (801) 765-4999(Address of principal executive
    
    (Registrants telephoneoffices, including zip code)
    
    number, including area code)
 None
 Common Stock, par value $0.001 per share
Preferred Stock Purchase Rights
 o þ
 o þ
 þ o
 o
  Large accelerated o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
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Explanatory Note
   TABLE OF CONTENTS
 PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    2Item 11. Executive Compensation
    
    
    6Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    14Item 13. Certain Relationships and Related Transactions and Director Independence
    
    
    15Item 14. Principal Accountant Fees and Services
    
    
    16PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    17SIGNATURES
    
    
    18EXHIBITS
    
    
    19
  
 PART III.
 
 Item 10. Directors, Executive Officers and Corporate Governance
 Directors and Executive Officers
  Name
    
    Position(s) With the Company
    
    Age
    
    Director SinceRalph J. Yarro III
    
    Chairman of the Board of
Directors
    
    
    44
    
    
    
    1998R. Duff Thompson
    
    Director
    
    
    57
    
    
    
    2001Darcy G. Mott
    
    Director
    
    
    56
    
    
    
    2002Darl C. McBride
    
    Chief Executive Officer, Director
    
    
    49
    
    
    
    2002Daniel W. Campbell
    
    Director
    
    
    54
    
    
    
    2003Omar T. Leeman
    
    Director
    
    
    57
    
    
    
    2005J. Kent Millington
    
    Director
    
    
    64
    
    
    
    2005
 2




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3




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Name
    
    Age
    
    PositionDarl C. McBride
    
    
    49
    
    
    Chief Executive Officer, DirectorKenneth R. Nielsen
    
    
    49
    
    
    Chief Financial OfficerJeff F. Hunsaker
    
    
    43
    
    
    President and Chief Operating Officer of SCO
Operations, Inc. (SCO Operations), a wholly
owned subsidiary of the Company.Ryan E. Tibbitts
    
    
    52
    
    
    General Counsel and Corporate Secretary
     4




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Section 16(a) Beneficial Ownership Reporting Compliance
  Code of Conduct and Ethics
   Audit Committee
  
    
    reviewing the Companys annual financial statements, the audit report and other
relevant financial reports,
    
    reviewing the internal financial reports prepared by management,
    
    recommending engagement of the Companys independent registered public
accounting firm,
    
    approving the services performed by the independent registered public accounting
firm,
    
    meeting with the independent registered public accounting firm and reviewing
with them the results of their audit and other services, and
    
    reviewing and evaluating the Companys systems of internal controls.
 5




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ITEM 11. EXECUTIVE COMPENSATION
 COMPENSATION DISCUSSION AND ANALYSIS
  Executive Compensation Objectives and Principles
  Executive Compensation Procedures
  Role of the Compensation Committee
  Compensation Consultant
 Elements of Compensation
  
    
    Base Salary
    
    Bonuses
    
    Stock-Based Compensation
    
    Other Benefits
  6




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Base Salary
 Bonuses
 Employee Incentive Bonus Program
   7




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OperatingRevenues
    
    
    (loss)/incomeQ1 - 2008
    
    $
    4,167
    
    
    $
    (2,434
    )Q2 - 2008
    
    
    4,076
    
    
    
    (1,492
    )Q3 - 2008
    
    
    3,990
    
    
    
    (610
    )Q4 - 2008
    
    
    4,276
    
    
    
    112Total
    
    $
    16,509
    
    
    $
    (4,424
    )
  Sales Compensation Plan
 Stock-Based Compensation
 Other Benefits
 8




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Deductibility of Executive Compensation
  COMPENSATION COMMITTEE REPORT
  Submitted by:J. Kent Millington (Chair)Omar T. LeemanR. Duff ThompsonMembers of the Compensation Committee
 9




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Summary Compensation Table
 Non-EquityIncentive Plan
    
    All OtherSalary
    
    Bonus
    
    Option
    
    Compensation(3)
    
    Compensation
    
    TotalName
    
    Year
    
    ($)
    
    ($)(1)
    
    Awards(2)
    
    ($)
    
    ($)
    
    ($)Darl C. McBride
    
    
    2008
    
    
    
    265,000
    
    
    
    
    
    
    
    157,493
    
    
    
    69,640
    
    
    
    
    
    
    
    492,133Chief Executive
Officer
    
    
    2007
    
    
    
    265,000
    
    
    
    46,375
    
    
    
    161,529
    
    
    
    98,316
    
    
    
    
    
    
    
    571,220Ryan E. Tibbitts
    
    
    2008
    
    
    
    210,000
    
    
    
    
    
    
    
    219,323
    
    
    
    33,652
    
    
    
    
    
    
    
    462,975General Counsel and
Corporate Secretary
    
    
    2007
    
    
    
    165,769
    
    
    
    100,408
    (4)
    
    
    253,789
    
    
    
    33,920
    
    
    
    
    
    
    
    553,886Jeff F. Hunsaker
    
    
    2008
    
    
    
    200,385
    
    
    
    
    
    
    
    57,472
    
    
    
    33,359
    
    
    
    
    
    
    
    291,216President and Chief
Operating Officer
of SCO Operations
    
    
    2007
    
    
    
    160,000
    
    
    
    13,440
    
    
    
    56,082
    
    
    
    27,590
    
    
    
    
    
    
    
    257,112
 
 (1)
    
    For the fourth quarter of fiscal 2007, the Compensation Committee adjusted the performance
goals necessary for certain participants in the Employee Incentive Bonus Program to receive
bonuses. As a result of these adjustments, for the fourth quarter, Mr. McBride received a
bonus of $46,375, Mr. Tibbitts received a bonus of $16,000, and Mr. Hunsaker received a bonus
of $13,440. These awards are all discussed in further detail under the heading Elements of
Compensation in the Compensation Discussion and Analysis section above.(2)
    
    The amounts reflect the dollar amount recognized for financial statement reporting purposes
for the fiscal year ended October 31, 2008, in accordance with SFAS 123(R) of stock option
awards issued pursuant to our equity incentive plans and include amounts from outstanding
stock option awards granted during and prior to fiscal 2007. Assumptions used in the
calculation of these amounts are included in the notes to our audited consolidated financial
statements for the fiscal year ended October 31, 2008 as included in our Annual Report on Form
10-K filed with the Securities and Exchange Commission on January 29, 2009. The amounts shown
disregard estimated forfeitures related to service-based vesting conditions.(3)
    
    This amount constitutes the cash bonuses earned by certain Named Executive Officers. For the
fiscal year ended October 31, 2008, Darl McBride, Ryan Tibbitts and Jeff Hunsaker participated
in the Employee Incentive Bonus Program.
For the fiscal year ended October 31, 2007 Darl McBride and Ryan Tibbitts participated in the
Employee Incentive Bonus Program; and Jeff Hunsaker participated in both the Employee Incentive
Bonus Program and the Sales Compensation Plan. Mr. Hunsaker received $24,710 pursuant to the
Sales Compensation Plan and $2,880 pursuant to the Employee Incentive Bonus Program. These
plans are discussed in further detail under the heading Elements of Compensation in the
Compensation Discussion and Analysis section above.(4)
    
    Of this amount, $16,000 represents a bonus awarded to Mr. Tibbitts as further described above
in Footnote 1 to this table and $84,408 represents a discretionary cash bonus awarded to Mr.
Tibbitts for services rendered during fiscal 2007. 10




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Grants of Plan-Based Awards2008
  Estimated FuturePayouts Under Non-
    
    All Other Option
    
    Exercise or
    
    Grant DateEquity Incentive Plan
    
    Awards: Number
    
    Base Price of
    
    Fair Value ofAwards
    
    of Securities
    
    Option
    
    Stock andTarget
    
    Maximum
    
    Underlying Options
    
    Awards
    
    OptionName
    
    Grant Date
    
    (#)(1)
    
    (#)
    
    (#)(2)
    
    ($/Sh)
    
    Awards($)Darl C. McBride
    
    
    8/26/08
    
    
    
    
    
    
    
    
    
    
    
    160,000
    
    
    
    0.24
    
    
    
    14,720Chief Executive
Officer
    
    
    
    
    
    
    185,000
    
    
    
    N/A
    
    
    
    
    
    
    
    
    
    
    
    Ryan Tibbitts
    
    
    8/26/08
    
    
    
    
    
    
    
    
    
    
    
    140,000
    
    
    
    0.24
    
    
    
    12,880General Counsel and
Corporate Secretary
    
    
    
    
    
    
    64,000
    
    
    
    N/A
    
    
    
    
    
    
    
    
    
    
    
    Jeff F. Hunsaker
    
    
    8/26/08
    
    
    
    
    
    
    
    
    
    
    
    140,000
    
    
    
    0.24
    
    
    
    12,880President and Chief
Operating Officer
of SCO Operations
    
    
    
    
    
    
    64,000
    
    
    
    N/A
    
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    Darl McBride, Ryan Tibbitts, and Jeff Hunsaker participated in our Employee Incentive Bonus
Program. The target bonus for each eligible employee is comprised of three components: (i) 40%
related to revenue, (ii) 40% related to operating performance, and (iii) 20% related to
personal objectives. This bonus program does not provide for threshold or maximum payout
amounts. The actual bonus amount earned by each of these participants is shown in the
Summary Compensation Table above.(2)
    
    All option grants were made pursuant to the 2004 Omnibus Stock Incentive Plan and are
nonqualified stock options. Options expire ten years from the date of grant. The exercise
price of each option granted is equal to the fair market value of our common stock (which is
the closing price of our common stock on the date of grant) as determined and approved by the
Board of Directors. Our equity incentive plans are discussed in further detail under the
heading, Elements of Compensation in the Compensation Discussion and Analysis section above. 11




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Outstanding Equity Awards at Fiscal Year-End2008
  Option AwardsNumber of Securities
    
    Number of SecuritiesUnderlying
    
    UnderlyingUnexercised Options
    
    Unexercised Options
    
    Option(#)
    
    (#)
    
    Exercise PriceName
    
    Exercisable(1)
    
    Unexercisable(1)
    
    ($)
    
    Option Expiration DateDarl C. McBride
    
    
    400,000
    
    
    
    
    
    
    $
    0.760
    
    
    
    06/26/2012Chief Executive Officer
    
    
    50,000
    
    
    
    
    
    
    $
    0.760
    
    
    
    06/27/2012150,000
    
    
    
    
    
    
    $
    0.760
    
    
    
    06/27/2012200,000
    
    
    
    
    
    
    $
    2.070
    
    
    
    03/17/201395,833
    
    
    
    4,167
    
    
    $
    4.850
    
    
    
    12/07/201455,000
    
    
    
    25,000
    
    
    $
    3.780
    
    
    
    01/22/201647,916
    
    
    
    52,084
    
    
    $
    2.300
    
    
    
    11/12/2016
    
    
    
    160,000
    
    
    $
    0.240
    
    
    
    08/25/2018Ryan E. Tibbitts
    
    
    30,000
    
    
    
    
    
    
    $
    8.710
    
    
    
    05/26/2013General Counsel and
    
    
    35,000
    
    
    
    
    
    
    $
    17.99
    
    
    
    09/10/2013Corporate Secretary
    
    
    10,000
    
    
    
    
    
    
    $
    5.050
    
    
    
    05/24/2014100,000
    
    
    
    
    
    
    $
    4.050
    
    
    
    07/26/2014143,750
    
    
    
    6,250
    
    
    $
    4.850
    
    
    
    12/07/201434,375
    
    
    
    15,625
    
    
    $
    3.780
    
    
    
    01/22/201645,520
    
    
    
    49,480
    
    
    $
    2.300
    
    
    
    11/12/2016
    
    
    
    140,000
    
    
    $
    0.240
    
    
    
    08/25/2018Jeff F. Hunsaker
    
    
    11,250
    
    
    
    
    
    
    $
    1.120
    
    
    
    11/01/2011President and Chief
    
    
    22,500
    
    
    
    
    
    
    $
    1.120
    
    
    
    11/01/2011Operating Officer of SCO
    
    
    100,000
    
    
    
    
    
    
    $
    2.070
    
    
    
    03/18/2013Operations
    
    
    23,958
    
    
    
    1,042
    
    
    $
    4.850
    
    
    
    12/07/201427,500
    
    
    
    12,500
    
    
    $
    3.780
    
    
    
    01/22/201619,166
    
    
    
    20,834
    
    
    $
    2.300
    
    
    
    11/12/2016
    
    
    
    140,000
    
    
    $
    0.240
    
    
    
    08/25/2018
 
 (1)
    
    All of these options were granted 10 years prior to the option expiration date. The unvested
options vest 25% after the completion of one year of service and then 1/36 per month for the
remaining three years and would be fully vested at the end of four years. In addition, the
options fully vest upon the occurrence of a change in control as described below under
Potential Payments Upon Termination or Change of Control. Potential Payments Upon Termination or Change in Control
    12




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Director Compensation
    Fees Earned or Paid in Cash
    
    Options AwardsName
    
    ($)
    
    ($)(1)
    
    Total ($)Ralph J. Yarro III
    
    
    
    
    
    
    10,367
    
    
    
    10,367R. Duff Thompson
    
    
    
    
    
    
    10,367
    
    
    
    10,367Darcy G. Mott
    
    
    
    
    
    
    10,367
    
    
    
    10,367Daniel W. Campbell
    
    
    
    
    
    
    10,367
    
    
    
    10,367Omar T. Leeman
    
    
    
    
    
    
    10,367
    
    
    
    10,367J. Kent Millington
    
    
    
    
    
    
    10,367
    
    
    
    10,367
 
 (1)
    
    The amounts reflect the dollar amount recognized for financial statement reporting purposes
for the fiscal year ended October 31, 2008, in accordance with SFAS 123(R), of stock option
awards issued pursuant to our equity incentive plans and include amounts from outstanding
stock option awards granted during and prior to fiscal 2007. Assumptions used in the
calculation of these amounts are included in the notes to our consolidated financial
statements for the fiscal year ended October 31, 2008 as included in our Annual Report on Form
10-K filed with the Securities and Exchange Commission on January 29, 2009. The amounts shown
disregard estimated forfeitures related to service-based vesting conditions. No stock options
were forfeited by any of our non-employee directors during the fiscal year. The grant date
fair value of the option granted on April 23, 2008 to each non-employee director re-elected on
that date was $1,473 per director. The grant date fair value of the option granted to each
non-employee director for quarterly compensation for the year ended October 31, 2008 was
$1,276 for the grant date of March 17, 2008; $1,473 for the grant date of June 16, 2008; and
$1,473 for the grant date of September 15, 2008. For information regarding the number of stock
options held by each non-employee director as of October 31, 2008, see the table below. These
amounts reflect our accounting expense for these awards, and do not correspond to the actual
value that may be recognized by the non-employee directors. 13




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Non-Employee Director
    
    Stock Options OutstandingRalph J. Yarro III
    
    
    222,500R. Duff Thompson
    
    
    185,000Darcy G. Mott
    
    
    185,000Daniel W. Campbell
    
    
    200,000Omar T. Leeman
    
    
    140,000J. Kent Millington
    
    
    140,000
 
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
   Number of SharesName and Address of Beneficial Owner
    
    Beneficially Owned
    
    Percent of ClassPrincipal Stockholders:Ralph J. Yarro III
    
    
    5,744,180
    (1)
    
    
    26.3
    %355 South 520 West Suite 100
Lindon, Utah 84042AmTrust Capital Management, Inc.
    
    
    1,328,731
    (2)
    
    
    6.2
    %10451 Mill Run Circle
Ownings Mills, MD 21117Named Executive Officers And Directors:Ralph J. Yarro III
    
    
    5,744,180
    (1)
    
    
    26.3
    %Darcy G. Mott
    
    
    269,819
    (3)
    
    
    1.2
    %R. Duff Thompson
    
    
    185,000
    (4)
    
    
    *Omar T. Leeman
    
    
    140,000
    (5)
    
    
    *Daniel W. Campbell
    
    
    200,000
    (6)
    
    
    *J. Kent Millington
    
    
    140,000
    (7)
    
    
    *Darl C. McBride
    
    
    1,054,662
    (8)
    
    
    4.7
    %Jeff F. Hunsaker
    
    
    231,253
    (9)
    
    
    1.1
    %Ryan E. Tibbitts
    
    
    422,707
    (10)
    
    
    1.9
    %All Named Executive Officers and Directors as a Group (10 Persons)
    
    
    8,387,621
    (11)
    
    
    34.5
    %
 
 *
    
    Does not exceed one percent.(1)
    
    Includes options to purchase 222,500 shares of common stock.(2)
    
    The information regarding the number of shares beneficially owned or deemed to be
beneficially owned by AmTrust Capital Management, Inc. was taken from a Schedule 13G filed
by that entity with the Securities 14




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and Exchange Commission dated February 14, 2007.(3)
    
    Includes options to purchase 185,000 shares of common stock.(4)
    
    Includes options to purchase 185,000 shares of common stock.(5)
    
    Includes options to purchase 140,000 shares of common stock.(6)
    
    Includes options to purchase 200,000 shares of common stock.(7)
    
    Includes options to purchase 140,000 shares of common stock.(8)
    
    Includes options to purchase 1,021,666 shares of common stock.(9)
    
    Includes options to purchase 213,749 shares of common stock.(10)
    
    Includes options to purchase 419,999 shares of common stock. (11)
    
    Includes options to purchase 2,727,914 shares of common stock. Included in this group
are our Named Executive Officers, directors and current executive officers.
 EQUITY COMPENSATION PLAN INFORMATION
   Number of securitiesremaining available forNumber of securities
    
    Weighted-average
    
    future issuance underto be issued upon
    
    exercise price of
    
    equity compensationexercise of outstanding
    
    outstanding
    
    plans (excludingoptions, warrants
    
    options, warrants
    
    securities reflected inPlan Category
    
    and rights
    
    and rights
    
    the first column)Equity compensation
plans approved by
security holders
    
    
    5,187,933
    
    
    $
    2.82
    
    
    
    1,910,057
    (1)Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    n/a
    
    
    
    Total
    
    
    5,187,933
    
    
    $
    2.82
    
    
    
    1,910,057
 
 (1)
    
    The 2004 Omnibus Incentive Plan (the 2004 Plan) incorporates an evergreen formula pursuant
to which on each November 1, the aggregate number of shares reserved for issuance under the
2004 Plan will increase by a number of shares equal to three percent of the outstanding shares
on the day preceding (October 31). 
 Item 13. Certain Relationships and Related Party Transactions
  
    
    in which the amount exceeds $111,460 (one percent of the average of our total
assets at year end for fiscal 2007 and fiscal 2008); and
    
    in which any director, executive officer, holder of more than five percent of our
Common Stock or any member of their immediate family had or will have a direct or
indirect material interest.
  15




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Affirmative Determinations Regarding Director Independence
   
 ITEM 14. Principal Accounting Fees and Services
 Principal Accountant Fees and Services
  2008
    
    
    2007Audit Fees(1)
    
    $
    345
    
    
    $
    280Audit-Related Fees(2)
    
    
    18
    
    
    
    30Tax Fees(3)
    
    
    48
    
    
    
    45All Other Fees
    
    
    
    
    
    
    Total
    
    $
    411
    
    
    $
    355
 
 (1)
    
    Audit Fees consist of fees billed for the annual audits and quarterly reviews.(2)
    
    Audit Related Fees consist of fees billed for various SEC filings and the audit of the
Companys employee benefit plan.(3)
    
    Tax Fees consist of fees billed for tax consultation and tax return preparation. Audit and Non-Audit Services Pre-Approval Policies
  16




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PART IV.
 
 Item 15 Exhibits and Financial Statement Schedules
     17




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THE SCO GROUP, INC.By:

/s/
Kenneth R. NielsenKenneth R. NielsenChief
Financial Officer/Chief Accounting Officer 18




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EXHIBITS
 ExhibitNumber
    
    Exhibit Description31.1
    
    Certification by Darl C. McBride, President and Chief
Executive Officer, pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification by Kenneth R. Nielsen, Chief Financial
Officer, pursuant to Rule 13a-14(a) of the Securities
Exchange Act of 1934, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.32.1
    
    Certification by Darl C. McBride, President and Chief
Executive Officer, pursuant to Section 1350, Chapter 63 of
Title 18, United States Code, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification by Kenneth R. Nielsen, Chief Financial
Officer, pursuant to Section 1350, Chapter 63 of Title 18,
United States Code, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
 19