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As We Bid Mr. Bench a Fond Farewell, Let's Take Stock
Wednesday, April 21 2004 @ 12:20 PM EDT

Now that Robert Bench has announced his retirement in six months, it's a good time to review our history together. First, all the SEC filings for Mr. Bench from 2001 to the present, followed by a look back on some controversial topics where Mr. Bench played a role, insiders trades, stock plans, and missing risk factors, and then a list of all the teleconferences where he spoke. You will notice we have a new audio transcripts page, where all the audio transcripts of teleconferences and interviews are now permanently available, linked to on the left as Transcripts. Court transcripts are elsewhere, in the Legal Docs page.

First, the stock history for Mr. Bench:

15-Dec-03
7,000 ... transaction Code G... Price $0 ... 214,043 left after transaction.

9-Oct-03
6,800 sold at $16.60 . . . value= $112,880.00
214,243 shares still owned after transaction.
1. This sale was effected pursuant to a Rule 10b5-1 sales plan adopted by the reporting person.

11-Aug-03
7,000 sold at $10.90 . . . value= $76,300.00
221,043 shares still owned after transaction.
1. This sale was effected pursuant to a Rule 10b5-1 sales plan adopted by the reporting person.

9-Jul-03
3,700 sold at $11.10 . . . value=$41,070.00
300 sold at $11.12 . . . value= $3,336.00
550 sold at $11.05 . . . value=$6,077.50
2,450 sold at $10.91 . . .value= $26,729.50
228,043 shares still owned after transaction.
This sale was effected pursuant to a Rule 10b5-1 sales plan adopted by the reporting person.

9-Jun-03
1,900 sold at $9.3 . . . value=$17,670.00
400 sold at $9.2 . . . value=$3,680.00
500 sold at $9.201 . . .value= $4,600.50
200 sold at $9.19 . . . value=$1,838.00
4,000 sold at $9.16 . . . value=$36,640.00
235,043 shares still owned after transaction.
This sale was effected pursuant to a Rule 10b5-1 sales plan adopted by the reporting person.

9-May-03
5,000 . . . $0.000 . . . $0.00
Shares gifted in accordance with Insider's 10b5-1 trading plan filed with the Issuer. 240,860 shares owned after transaction.

9-Apr-03
4,100 sold at $2.9 . . .value= $11,890.00
241,094 shares owned after transaction.

28-Mar-03
100,000 acquired, nonqualified stock option, $2.07. . . $0.000 . . . $0.00
100,000 beneficially owned following the transaction

12-Mar-03
7,000 sold at $3.06 . . . value=$21,420.00
245,194 owned after transaction.

When I searched from 2001 to 2004, I found no filings other than the above for Robert K. Bench. This indicates to me that he didn't sell any stock in this company, despite being with the company for three years now, until March 10 of 2003, filed on the 12th. It was on March 6 SCO filed its lawsuit against IBM.

You may remember SCO's press release about its executive officers selling stock:

The SCO Group, Inc. (Nasdaq: SCOX) encourages its directors and executive officers to sell the stock held by them through plans designed to qualify for the protections provided by Rule 10b5-1 under the Securities Exchange Act of 1934.

The 10b5-1 plans provide for future sales of stock, at predetermined times and in amounts and under conditions specified in the plans, without subsequent instructions from the participants. These plans have been adopted by the following individuals: Robert Bench, CFO; Jeff Hunsaker, Sr. VP Marketing; Reg Broughton, Sr. VP International Sales; and Michael Olson, VP Finance/Controller. These plans have been implemented primarily for the purpose of providing liquidity to the participants to meet sizable personal tax liabilities resulting from the vesting of restricted stock awards.

During the three months ended July 31, 2003, individuals selling under approved 10b5-1 plans sold 88,000 shares of the Company's common stock. Two other executive officers sold 29,616 shares during the same three-month period in Company approved open trading windows. For the upcoming three-month period to end on October 31, 2003, the above-referenced executive officers may sell up to 141,000 shares of the Company's common stock under current 10b5-1 plans if the conditions of the various plans are met. No other directors or executive officers have implemented a 10b5-1 trading plan to sell shares of the Company's stock during the next three months.

Our directors and executive officers beneficially hold approximately 6,005,000 shares and options to acquire an additional 2,016,000 shares.

Likely you recall the Bloomberg News story, in which Darl McBride said that SCO's CFO, Robert Bench, submitted a sales plan in January "months before legal action was contemplated":
Chief Financial Officer Robert Bench began the selling by SCO insiders, four days after SCO filed the suit against IBM. Bench is selling to help pay a $150,000 tax bill, McBride said. Under the Sarbanes-Oxley law, companies are no longer able to loan executives money to pay taxes or other expenses.

Bench submitted a sale plan in January, months before any legal action against IBM was contemplated, McBride said. His agreement called for the sales to begin on March 8. He planned to sell 5,000 shares a month for the next 12 months, according to the plan.

I believe the above trades indicate he was able to meet that tax bill with some to spare. Now, I'm no stock expert, but as for SCO not "contemplating" any legal action in January, here are some news stories that I believe indicate that they were at least contemplating legal action by January:

Mr. Bench himself responded to questions about insider trading in an interview with Computer Business Review in August of 2003:

SCO's chief financial officer, Robert Bench, said that most of the shares had been sold under an SEC plan designed to prevent insider trading by ensuring that a specified number of shares are sold on pre-determined dates, regardless of whether or not the price is positive or negative.

Bench said that all SCO executives had taken substantial cuts in salary over the last year and had been awarded restricted stock to ensure that their earnings reflected the performance of the company and the success enjoyed by shareholders.

"These plans have been implemented primarily for the purpose of providing liquidity to the participants to meet sizable personal tax liabilities resulting from the vesting of restricted stock awards," said the company in a statement, referring to the 10b5-1 plans adopted by Bench, as well as VP of worldwide marketing Jeff Hunsaker, VP of finance Michael Olson and VP of international sales Reginald Charles Broughton.

"It certainly couldn't be considered unloading stock," said Bench, who pointed out that these executives have sold a small proportion of the more than eight million shares held by SCO directors and executives. "It's a very small portion of the holding SCO executives are holding, and for the most part it's taking care of liabilities that they have to pay."

And finally, as the sun sets over the Bench horizon, and we bid him a fond farewell, we remember his part in the teleconferences, February 2003 and May and August and October and November and December and the Q4 2003 earnings conference they forbad the world to transcribe under penalty of copyright infringement and March 2004.

Is the CFO responsible for missing risk factors in SEC filings? And for corrections and changes?

Mr. Bench is retiring at the ripe old age of 54, according to this Proxy Statement from February:

Robert K. Bench has served as the Company's Chief Financial Officer and Principal Financial and Accounting Officer since November 2000. From April 2000 to November 2002, Mr. Bench served as Vice President and director of Envirofoam Technologies, Inc., and from April 1999 to April 2000, was Vice President and Chief Financial Officer for WebMiles.com. From April 1996 to April 1999, he was Vice President, Chief Financial Officer and a director for Sento Corporation and from April 1991 through April 1996, he was Chief Financial Officer for CerProbe Corporation. Mr. Bench worked for KPMG Peat Marwick from 1973 to 1977. Mr. Bench holds a B.S. degree in Accounting from Utah State University.


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