-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O1urDojPVqyVG/jJ41wT2Lve0xbvPgziXRgq9igBNbYv/F2Kpt2Vlyn7T5HO7lYD ZNrC5REpX9LMIAjikTW9iA== 0001012870-01-000875.txt : 20010223 0001012870-01-000875.hdr.sgml : 20010223 ACCESSION NUMBER: 0001012870-01-000875 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20010209 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010215 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SANTA CRUZ OPERATION INC CENTRAL INDEX KEY: 0000851560 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 942549086 STATE OF INCORPORATION: CA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-21484 FILM NUMBER: 1548373 BUSINESS ADDRESS: STREET 1: 425 ENCINAL STREET STREET 2: PO BOX 1900 CITY: SANTA CRUZ STATE: CA ZIP: 95060 BUSINESS PHONE: 4084277172 8-K 1 0001.txt FORM 8-K =============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 February 9, 2001 ---------------- Date of Report (Date of earliest event reported) THE SANTA CRUZ OPERATION, INC. --------------------------------------------------------------- (Exact name of registrant as specified in its charter) California 0-21484 94-2549086 - ---------------------------- ------------------------ ------------------ (State or other jurisdiction (Commission File Number) (I.R.S. Employer of incorporation) Identification No.) 425 Encinal Street Santa Cruz, California 95061 (Address of principal executive offices) (831) 425-7222 ---------------------------------------------------- (Registrant's telephone number, including area code) Item 5. Other Events. On February 9, 2001, Caldera Systems, Inc. ("Caldera"), Caldera International, Inc. ("New Caldera"), and The Santa Cruz Operation, Inc. ("SCO") entered into a Third Amendment to the Agreement and Plan of Reorganization (the "Amendment"). The original Agreement and Plan of Reorganization was entered into on August 1, 2000 and was amended on September 13, 2000 and December 12, 2000 (together with the Amendment, the "Amended Reorganization Agreement"). The Amendment is the result of new negotiations between the parties and the total consideration to be paid by New Caldera has been changed as a consequence. Under the transactions proposed by the Amended Reorganization Agreement (the "Reorganization"), (i) a newly formed, wholly owned subsidiary of New Caldera will be merged with and into Caldera, with Caldera being the surviving corporation, and all outstanding Caldera securities will be converted, on a share for share basis, into New Caldera securities having identical rights, preferences and privileges, with New Caldera assuming any and all outstanding options and other rights to purchase shares of capital stock of Caldera (with all such New Caldera securities issued to former Caldera security holders initially representing approximately 74.1 % in New Caldera); (ii) SCO and certain of its subsidiaries will contribute to New Caldera certain assets, including the SCO Open Server intellectual property, in consideration for the issuance by New Caldera to SCO of 16 million shares of common stock of New Caldera, $0.001 par value ("New Caldera Common Stock"), which would have an approximate value of $53 million based on the closing price of Caldera's common stock on February 9, 2001, and which represents a fully diluted equity interest in New Caldera equal to approximately 25.3% of New Caldera, (the "Acquisition"); (iii) New Caldera will provide options to the existing SCO employees who become employees of New Caldera (other than David McCrabb, Jack Moyer and Jim Wilt); (iv) SCO will receive $23 million in cash (of which $7 million has been previously advanced to SCO) and will also receive a note for $8 million due in four quarterly installments beginning in the second year following the close of the transaction; and (v) Caldera and SCO have agreed to share revenue from SCO OpenServer products for a period of three years, if sales exceed pre-defined levels, and Caldera will also be assigned certain long-term accounts receivable. These receivables will vary depending on the timing of the transaction and product usage by customers, currently estimated to be $3-4 million. In conjunction with the Reorganization, The Canopy Group, Inc., a major stockholder of Caldera, has provided a line of credit of up to $18 million to SCO. Under the Amendment, the date by which either party can terminate the Amended Reorganization Agreement without giving rise to damages has been extended from February 28, 2001 to May 31, 2001. Voting Agreements previously entered into between certain stockholders of SCO and certain stockholders of Caldera to vote in favor of the Reorganization and against certain other matters (the "Voting Agreements") remain in force. The Reorganization is intended to constitute a reorganization under Section 351 of the Internal Revenue Code of 1986, as amended, and to be accounted for as a purchase transaction. Consummation of the Reorganization is subject to various conditions, including, among other things, receipt of the necessary approvals of the stockholders of Caldera, shareholders of SCO and certain regulatory bodies. -2- The foregoing description of the Amended Reorganization Agreement and the transactions contemplated thereby do not purport to be complete and are qualified in their entirety by reference to the Amendment, the form of which is filed herewith as Exhibit 99.1, and to the original Agreement and Plan of Reorganization between the parties which was filed as Exhibit 2.1 to SCO's report on Form 8-K dated August 11, 2000. It is expected that Caldera will file an amended Registration Statement on SEC Form S-4 and Caldera and SCO will file an amended Joint Proxy Statement/Prospectus with the SEC in connection with the Reorganization, and that Caldera and SCO will mail a Joint Proxy Statement/Prospectus to stockholders of Caldera and shareholders of SCO containing information about the Reorganization. Investors and security holders are urged to read the Registration Statement and the Joint Proxy Statement/Prospectus carefully when they are available. The Registration Statement and the Joint Proxy Statement/Prospectus will contain important information about Caldera, SCO, the Reorganization, the persons soliciting proxies relating to the Reorganization, their interests in the Reorganization, and related matters. Investors and security holders will be able to obtain free copies of these documents through the website maintained by the SEC at http://www.sec.gov. Free copies of the Joint Proxy Statement/Prospectus and these other documents may also be obtained from Caldera by directing a request through the Investors Relations portion of Caldera's Web site at http://www.caldera.com or by mail to Caldera Systems, Inc., 240 West Center Street, Orem, Utah 84057, attention: Investor Relations, telephone (801) 765-4999, or by directing a request through the Investors Relations portion of SCO's Web site at http://www.sco.com or by mail to The Santa Cruz Operation, Inc., 425 Encinal Street, Santa Cruz, California 95061, attention: Investor Relations, telephone (831) 427-7399. In addition to the Registration Statement and the Joint Proxy Statement/Prospectus, Caldera and SCO file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any reports, statements or other information filed by Caldera or SCO at the SEC public reference rooms at 450 Fifth Street, N.W., Washington, D.C. 20549 or at any of the SEC's other public reference rooms in New York, New York and Chicago, Illinois. Please call the SEC at 1-800- SEC-0330 for further information on the public reference rooms. -3- Item 7. Exhibits. (c) Exhibits. Exhibit 2.1 Third Amendment to Agreement and Plan of Reorganization by and among Caldera Systems, Inc., Caldera Holdings, Inc., and The Santa Cruz Operation, Inc. dated February 9, 2001. Exhibit 2.2 First Amendment to Agreement and Plan of Reorganization by and among Caldera Systems, Inc., Caldera Holdings, Inc., and The Santa Cruz Operation, Inc. dated September 13, 2000. Exhibit 2.3 Second Amendment to Agreement and Plan of Reorganization by and among Caldera Systems, Inc., Caldera Holding, Inc., and The Santa Cruz Operation, Inc. dated December 12, 2000. Exhibit 2.4 Agreement and Plan of Reorganization by and among Caldera Systems, Inc., Caldera Holdings, Inc., and The Santa Cruz Operation, Inc., dated August 1, 2000. (incorporated by reference to Exhibit 2.1 to SCO's report on Form 8-K dated August 11, 2000) Exhibit 9.1 Form of Voting Agreement by and among The Santa Cruz Operation, Inc., and certain stockholders of Caldera Systems, Inc., dated August 1, 2000. (incorporated by reference to Exhibit 9.1 to SCO's report on Form 8-K dated August 11, 2000) Exhibit 99.1 Form of Voting Agreement by and among The Santa Cruz Operation, Inc., and Caldera Systems, Inc. and Douglas Michels, dated August 1, 2000. (incorporated by reference to Exhibit 99.1 to SCO's report on Form 8-K dated August 11, 2000) -4- SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. THE SANTA CRUZ OPERATION, INC. Date: February 13, 2001 By: /s/ Steven M. Sabbath -------------------------------------- Steven M. Sabbath Senior Vice President, Law & Corporate Affairs -5- INDEX TO EXHIBITS FILED WITH THE CURRENT REPORT ON FORM 8-K DATED FEBRUARY 9, 2001 Exhibit Description ------- ----------- Exhibit 2.1 Third Amendment to Agreement and Plan of Reorganization by and among Caldera Systems, Inc., Caldera Holdings, Inc., and The Santa Cruz Operation, Inc. dated February 9, 2001. Exhibit 2.2 First Amendment to Agreement and Plan of Reorganization by and among Caldera Systems, Inc., Caldera Holdings, Inc., and The Santa Cruz Operation, Inc. dated September 13, 2000. Exhibit 2.3 Second Amendment to Agreement and Plan of Reorganization by and among Caldera Systems, Inc., Caldera Holding, Inc., and The Santa Cruz Operation, Inc. dated December 12, 2000. Exhibit 2.4 Agreement and Plan of Reorganization by and among Caldera Systems, Inc., Caldera Holdings, Inc., and The Santa Cruz Operation, Inc., dated August 1, 2000. (incorporated by reference to Exhibit 2.1 to SCO's report on Form 8-K dated August 11, 2000) Exhibit 9.1 Form of Voting Agreement by and among The Santa Cruz Operation, Inc., and certain stockholders of Caldera Systems, Inc., dated August 1, 2000. (incorporated by reference to Exhibit 9.1 to SCO's report on Form 8-K dated August 11, 2000) Exhibit 99.1 Form of Voting Agreement by and among The Santa Cruz Operation, Inc., and Caldera Systems, Inc. and Douglas Michels, dated August 1, 2000. (incorporated by reference to Exhibit 99.1 to SCO's report on Form 8-K dated August 11, 2000) EX-2.1 2 0002.txt THIRD AMENDMENT TO AGREEMENT AND PLAN Exhibit 2.1 THIRD AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION THIS THIRD AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION (this "Amendment") is entered into as of February 9, 2001, by and among Caldera Systems, Inc., a Delaware corporation including for all purposes Caldera Surviving Corporation, ("Caldera"), Caldera International, Inc., a Delaware corporation ("Newco") and The Santa Cruz Operation, Inc., a California corporation ("SCO"). RECITALS A. On August 1, 2000, Caldera, Newco and SCO entered into an Agreement and Plan of Reorganization, which was amended on September 13, 2000 and December 12, 2000 (as amended, the "Agreement") which all parties to the Agreement wish to further amend pursuant to the terms and conditions of this Amendment. B. All terms not otherwise defined herein shall have the meanings set forth in Section 13.15 of the Agreement. NOW, THEREFORE, the parties hereby agree to amend the Agreement as follows: 1. The introductory sentence of Section 1.3(a) of the Agreement is hereby replaced with the following text: (a) Issuance of Newco Common Stock. At the times set forth below, and subject to the terms and conditions of this Agreement, Newco will, in consideration for the contribution and transfer of the Contributed Stock and Contributed Assets to Newco as contemplated by this Agreement, perform the following: 2. Section 1.3(a)(i) of the Agreement is hereby replaced with the following text: (i) Consideration. (A) At the Effective Time, Newco shall (i) issue to SCO that number of issued, fully paid and nonassessable shares of Newco Common Stock equal to the sum of 16 million shares less the Escrow Shares issued to SCO and placed directly into escrow by Caldera pursuant to Section 1.3(b) below (but not less any shares issuable pursuant to options granted or assumed pursuant to 1.3(a)(iii)), with the number of shares to be appropriately adjusted in the event of any Caldera stock split, stock combination, reclassification or other similar capital change (the "First SCO Certificate"), (ii) pay SCO cash consideration equal to twenty-three million dollars ($23,000,000) (the "Cash Consideration"), by the combination of a wire transfer of immediately available funds and the cancellation of SCO's then outstanding indebtedness to Caldera and (iii) issue to SCO a non-interest bearing, secured promissory note (the "Secured Note") in the amount of $8 million (subject to certain rights of setoff as provided therein), secured by the assets of the OpenServer Business, and in the form attached as Exhibit 1.3(a)(1). (B) During the three year period (the "Earn-out Period") beginning with the first, full Caldera Fiscal Quarter following the Effective Time (provided that if the Effective Time falls within the first five days of any Caldera Fiscal Quarter, then the Earn-out Period shall begin with such Caldera Fiscal Quarter), SCO shall be entitled to receive from Newco on each Earn-out Payment Date 45% of the amount by which OpenServer Revenue for the prior four full Caldera Fiscal Quarters is higher than the cumulative Earn-out Thresholds for such periods (such amount, an "Earn-out Amount"). Notwithstanding the intention of this provision that the parties shall share in the future revenue of the OpenServer Business as operated by Newco, such operation of the OpenServer Business shall be in Newco's sole discretion, and Newco shall be under no obligation to provide any minimum level of support to the OpenServer Business. 3. Section 1.3(b) is hereby replaced in its entirety with the following text: (b) Escrow. As soon as practicable after the Effective Time, and subject to and in accordance with the provisions of Section 10 and the Escrow Agreement, a form of which is attached as Exhibit 1.3(b) (the "Escrow Agreement"), Caldera shall deliver to the Escrow Agent on behalf of SCO a certificate representing one million six hundred thousand (1,600,000) shares of Newco Common Stock (the "Escrow Shares"). The Escrow Shares distributed to the Escrow Agent shall be held in escrow and shall be available to transfer to Caldera for certain damages as provided in Section 10. To the extent not transferred to Caldera for such damages, the Escrow Shares shall be released to SCO, all as provided in Section 10 and the Escrow Agreement. 4. Section 1.4(b)(i)(B) is hereby amended by adding the following phrase to the end of such section: ", except for rights associated with the Commit Transaction Receivables" 5. Section 1.4(b)(i) is hereby amended by adding the following sentence to the end of such section: Notwithstanding Sections 1.4(b)(i)(A)-(C), Newco's continued use of certain Excluded Assets as part of UnixWare and OpenServer, and sale of certain unbundled and bundled products including certain Excluded Assets, is set forth in Exhibit 1.4(b)(i). 6. A new Section 1.4(c)(i)(D) is hereby added to the Reorganization Agreement: (D) all Liabilities relating to Commit Transaction Receivables. 7. Section 4.2 of the Agreement is hereby amended by adding to the end of such section the following: 2 "Without limiting the foregoing, SCO shall be required to budget at least (and shall not be required to budget more than) $21.4 million for the maintenance of the Group Business during the three month period ended March 31, 2001, of which amount, $1.9 million shall be applied specifically to SCO's professional services line of business. If the Effective Time has not occurred prior to March 31, 2001, then SCO shall be required to budget an amount for the three month period ended June 30, 2001 to be agreed by the parties at such time and which shall be commensurate with historical expenses to revenue ratios. 8. Sections 4.12, 4.24 and 5.14 are hereby deleted in their entirety. Exhibit 4.12 is also deleted in its entirety. 9. A new Section 5.20 shall be added as follows: 5.20 Reimbursement for Pre-paid Commissions and Royalties. During the period beginning on the Effective Time and ending on the one year anniversary of the Effective Time, Newco shall, on a quarterly basis, reimburse SCO for any sales commissions or royalties previously paid by SCO that relate to Commit Transaction Receivables that are actually collected by Newco during such period. 10. All references in Section 8.1 to "February 28, 2001" are hereby replaced with "May 31, 2001", and the reference to "March 31, 2001" in such section is hereby replaced with "June 30, 2001". 11. Section 8.4(a)(i) is hereby replaced in its entirety with the following text: (i) If this Agreement is terminated by Caldera pursuant to Section 8.1(i), then SCO shall promptly pay to Caldera (by wire transfer or cashier's check) a nonrefundable fee equal to five hundred sixty thousand (560,000) multiplied by the average closing price of the Caldera Common Stock for the ten (10) days following the public announcement of this Agreement (the "Termination Fee") within two (2) business days following delivery of the notice of termination by Caldera pursuant to Section 8.2; 12. Section 10.1 is hereby replaced in its entirety with the following text: Escrow Fund. In accordance with Section 1.3(b) hereof, Caldera shall deliver to the Escrow Agent one million six hundred thousand (1,600,000) shares of Newco Common Stock (the "Escrow Fund"). The Escrow Fund shall be held by the Escrow Agent for a period of one year from the Effective Time pursuant to the terms set forth in the Escrow Agreement. The Escrow Fund shall be available to compensate Caldera Surviving Corporation and Newco pursuant to the Indemnification obligations of SCO. 13. Section 10.4 is hereby replaced in its entirety with the following text: Limitations on Indemnification. SCO shall not have any liability under this Section 10 unless the aggregate amount of Loss attributable exceeds $1,000,000, and, in such event, SCO shall be required to pay the entire amount of such Loss from the first dollar thereof. SCO shall not have liability for any Loss in excess of the amount determined by multiplying (i) one million six hundred thousand (1,600,000) by (ii) the Caldera Closing Price, 3 except that as such Losses relate to the SCO IP Rights, SCO shall not have liability for any Loss in excess of the amount determined by multiplying (i) eight million (8,000,000) by (ii) the Caldera Closing Price. Notwithstanding the preceding sentence, there shall be no limitations on liability pursuant to this Section 10 relating to intentional fraud or misrepresentation by SCO. 14. Current Exhibit 1.4(b) of the Agreement is hereby amended and replaced in its entirety with Attachment A. 15. Current Exhibit 13.15A of the Agreement, the Contributed Assets, is hereby amended to have added to it the contents of Attachment B to this Amendment. 16. Current Exhibit 13.15B of the Agreement, the Contributed Contracts, is hereby amended to have added to it the contents of Attachment C to this Amendment. 17. Current Exhibit 13.15D of the Agreement, the Group Products, is hereby amended to have added to it the contents of Attachment D to this Amendment. 18. Current Exhibit 13.15E of the Agreement, the Permitted Encumbrances, is hereby amended to have added to it the contents of Attachment E to this Amendment. 19. The definition for "Contributed Assets" contained in Section 13.15 is hereby replaced in its entirety with the following text: "Contributed Assets" shall mean (i) those assets, including real property assets, that are owned, leased or licensed by the Contributing Companies that are (A) listed on Exhibit 13.15A attached hereto, (B) Intellectual Property Rights used in the production, development, support or marketing of the Group Products or (C) used in the Group Business, (ii) all Commit Transaction Receivables and (iii) all Contributed Contracts to which any of the Contributing Companies is a party, but in all cases excluding the Excluded Assets. 20. The following definitions are hereby added to Section 13.15: "Caldera Fiscal Quarter" shall mean any three-month period ending on any of the following days of the year: October 31, January 31, April 30 or July 31. "Commit Transaction Receivables" shall mean that portion of accounts receivable arising from transactions involving Group Products for which a contractual right to payment or true up is not yet due SCO at the Effective Time. By way of example, and to the parties current knowledge, Exhibit 13.15F reflects the Commit Transaction Receivables that would exist if the Effective Time were as of the date hereof. "Earn-out Amount" is defined in Section 1.3(a)(1)(B). "Earn-out Payment Date" means the 45th day following each of the fourth, the eighth and the twelfth full Caldera Fiscal Quarters following the Effective Time. "Earn-out Period" is defined in Section 1.3(a)(1)(B). 4 "Earn-out Threshold", with respect to any particular Caldera Fiscal Quarter, shall be as set forth on Exhibit 13.15G. "OpenServer Business" means the business of SCO and its direct and indirect subsidiaries with respect to the OpenServer Products, including without limitation the business of developing, manufacturing, marketing, licensing, distributing, using, operating, installing, servicing, supporting, maintaining, repairing or otherwise using or commercially exploiting the OpenServer Products; provided, however, that the OpenServer Business shall in no way include any other line of business of Newco, notwithstanding that such other line of business may incorporate OpenServer kernel or library code that implements less than 15% of the OpenServer Application Binary Interfaces. "OpenServer Products" means all software, development tools, compilers, libraries, driver kits, utilities, and the operating system software and other products in whole or in part based on or developed from or for the AT&T Unix System V version 3.2 kernel and any succssor to that kernel, including the kernel, the code base, the application program interfaces, the application binary interfaces, derivative works thereof, and those products offered under the names or marks "Appliance Server", SCO Admin, SCO OpenServer Enterprise System, SCO OpenServer Host System, SCO OpenServer Internet FastStart System, or SCO OpenServer Desktop System, SCO Virtual Disk Manager, SCO Doctor, SCO ARCserve/Open, SCO Merge, SCO OpenServer SMP(TM) Licenses, SCO PPP from Morning Star, SCO Internet Security Package, SCO Internet to NetWare Gateway, and Interscan VirusWall, and all successors, upgrades, enhancements, releases, new versions, and updates to any of the above that have been developed or acquired by the Contributing Companies as of the Effective Time. "OpenServer Revenue" shall mean all revenue relating to the OpenServer Business, less product returns and provisions for bad debt. "Secured Note" is defined in Section 1.3(a)(1)(A). 21. The definitions for "Caldera Percentage Interest" and "SCO Percentage Interest" found in Section 13.15 are deleted in their entirety. [SIGNATURE PAGE TO FOLLOW] 5 IN WITNESS WHEREOF, the parties hereto have executed this Amendment to Agreement and Plan of Reorganization as of the date first above written. THE SANTA CRUZ OPERATION, INC. a California corporation By: /s/ Douglas L. Michels ----------------------------------------- Douglas Michels President and Chief Executive Officer CALDERA SYSTEMS, INC. a Delaware corporation By: /s/ Ransom H. Love ----------------------------------------- Ransom Love Chief Executive Officer CALDERA INTERNATIONAL, INC. a Delaware corporation By: /s/ Ransom H. Love ----------------------------------------- Ransom Love Chief Executive Officer [SIGNATURE PAGE TO AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION] 6 EX-2.2 3 0003.txt FIRST AMENDMENT TO AGREEMENT AND PLAN Exhibit 2.2 AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION THIS AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION (this "Amendment") is entered into as of September 13, 2000, by and among Caldera Systems, Inc., a Delaware corporation including for all purposes Caldera Surviving Corporation, ("Caldera"), Caldera, Inc., a Delaware corporation ("Newco") and The Santa Cruz Operation, Inc., a California corporation ("SCO"). RECITALS A. On August 1, 2000, Caldera, Newco and SCO entered into an Agreement and Plan of Reorganization (the "Agreement") which all parties to the Agreement wish to amend pursuant to the terms and conditions of this Amendment. B. All terms not otherwise defined herein shall have the meanings set forth in Section 13.15 of the Agreement. NOW, THEREFORE, the parties hereby agree to amend the Agreement as follows: 1. Section 1.3(a)(i) and (iii) of the Agreement are amended in their entirety as follows: 1.3 SCO Transaction. (a) Issuance of Newco Common Stock. (i) Consideration. Issue to SCO that number of issued, fully paid and nonassessable shares of Newco Common Stock equal to The SCO Percentage Interest, less (a) the number of shares of Newco Common Stock issuable upon exercise of the Replacement Options pursuant to Section 1.3(a)(iii) below multiplied by .75, (b) the number of shares of Newco Common Stock issuable upon exercise of the SCO Options assumed by Newco pursuant to Section 1.3(a)(iii) below multiplied by .75 and (c) the Escrow Shares issued to SCO and placed directly into escrow by Caldera pursuant to Section 1.3(b) below, with such number of shares to be appropriately adjusted in the event of any Caldera stock split, stock combination, reclassification or other similar capital change (the "First SCO Certificate") and pay SCO cash consideration equal to seven million dollars ($7,000,000) (the "Cash Consideration"), by wire transfer of immediately available funds or upon the cancellation of SCO's outstanding indebtedness to Caldera. (iii) Assumption or Replacement of SCO Options. Prior to the Effective Time, each employee or consultant of SCO who is offered and accepts employment or a consulting position with New Caldera and who has then outstanding options to purchase shares of SCO Common Stock held by such Optionee (collectively, the "SCO Options")(consisting of all outstanding options granted under the stock option plans of SCO or the SCO Subsidiaries, and any individual non-plan options held by the Optionees) shall elect one of the following alternatives with respect to each grant of options held by such employee or consultant: (A) Each of the then outstanding SCO Options held by such employee or consultant may be cancelled and replaced with an option to purchase one share of Newco Common Stock for each two shares of SCO Common Stock ("Replacement Options") subject to an SCO Option at the Effective Time with an exercise price per share of Newco Common Stock equal to the fair market value of Newco Common Stock immediately after the Effective Time, rounded up to the nearest cent. The vesting schedule of employees and consultants electing this alternative shall be determined as follows: (i) the number of vested shares of common stock under the Replacement Option grant will equal the number of vested shares of common stock subject to the cancelled SCO option grant immediately prior to the Effective Time multiplied by 0.25 and (ii) the remaining unvested Replacement Options will vest over a period of months determined by the following equation: 48 months less the product of the number of months vested under the SCO option grant multiplied by 0.5; or (B) Each of the then outstanding SCO Options held by such employee or consultant may be assumed by Newco and converted into an option to purchase one share of Newco Common Stock for each two shares of SCO Common Stock subject to an SCO Option at the Effective Time (the "SCO Ratio") at an exercise price per share of Newco Common Stock equal to the exercise price per share of such assumed SCO Option immediately prior to the Effective Time divided by the SCO Ratio, rounded up to the nearest cent. Except as set forth in the preceding sentence, the term, exercisability, vesting schedule, and all other terms and conditions of the SCO Options will be unchanged and all references in any option agreement governing such option to SCO shall be deemed to refer to Newco, where appropriate; provided, however, that the outstanding SCO Options previously designated as "incentive stock options" under Section 422 of the Internal Revenue Code may, as a result of the foregoing adjustments, be converted into non-statutory stock options. Continuous service as an employee or consultant with SCO or any of the SCO Subsidiaries will be credited to the Optionee for purposes of determining the number of shares of Newco Common Stock vested and exercisable under the assumed SCO Option after the Closing. If the foregoing calculation results in a Newco Option, which is issued for an SCO Option, being exercisable for a fraction of a share of Newco Common Stock, then the number of shares of Newco Common Stock subject to such option will be rounded down to the nearest whole number of shares, with no cash being payable for such resulting fractional share. 2. Section 1.3(c) of the Agreement is hereby deleted in its entirety. 3. Section 13.15 of the Agreement is hereby amended as follows: (a) The following definition is hereby amended in its entirety: "Caldera Percentage Interest" means 72% of the fully diluted equity interest in Newco (taking into account all options, warrants and convertible debentures on an as- converted basis except for any Replacement Options issued or SCO Options assumed pursuant to Section 1.3(a)(iii)). 2 (b) The following definition is hereby added in its entirety: "Replacement Options" is defined in Section 1.3(a)(iii)(A). (c) The following definition is hereby amended in its entirety: "SCO Ratio" is defined in Section 1.3(a)(iii)(B). 4. All references to the form of Sales Representative and Support Agreement, attached as Exhibit 4.12 of the Agreement shall hereby be replaced by references to the form of Sales Representative and Support Agreement attached hereto as Exhibit 4.12A (the "Sales Representative Agreement") and the form of Open Server Research and Development Agreement attached hereto as Exhibit 4.12B (the "Open Server Agreement"). The Sales Representative Agreement and Open Server Agreement shall be executed at the Effective Time. [SIGNATURE PAGE TO FOLLOW] 3 IN WITNESS WHEREOF, the parties hereto have executed this Amendment to Agreement and Plan of Reorganization as of the date first above written. THE SANTA CRUZ OPERATION, INC. a California corporation By: /s/ Douglas L. Michels ----------------------------------------- Douglas Michels President and Chief Executive Officer CALDERA SYSTEMS, INC. a Delaware corporation By: /s/ Ransom H. Love ----------------------------------------- Ransom Love Chief Executive Officer CALDERA, INC. a Delaware corporation By: /s/ Ransom H. Love ----------------------------------------- Ransom Love Chief Executive Officer [SIGNATURE PAGE TO AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION] 4 EX-2.3 4 0004.txt SECOND AMENDMENT TO AGREEMENT AND PLAN EXHIBIT 2.3 SECOND AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION THIS SECOND AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION (this "Second Amendment") is entered into as of December 12, 2000, by and among Caldera Systems, Inc., a Delaware corporation including for all purposes Caldera Surviving Corporation, ("Caldera"), Caldera International, Inc., a Delaware corporation ("Newco") and The Santa Cruz Operation, Inc., a California corporation ("SCO"). RECITALS A. On August 1, 2000, Caldera, Newco and SCO entered into an Agreement and Plan of Reorganization (the "Agreement") which all parties to the Agreement wish to amend pursuant to the terms and conditions of this Amendment. B. All terms not otherwise defined herein shall have the meanings set forth in Section 13.15 of the Agreement. ------------- NOW, THEREFORE, the parties hereby agree to amend the Agreement as follows: 1. Section 1.3(a)(iii)(A) of the Agreement is amended in its entirety as follows: (A) Each of the then outstanding SCO Options held by such employee or consultant may be cancelled and replaced with an option to purchase one share of Newco Common Stock for each two shares of SCO Common Stock ("Replacement Options") subject to an SCO Option at the Effective Time with an exercise price per share of Newco Common Stock equal to the fair market value of Newco Common Stock immediately prior to the Effective Time, rounded up to the nearest cent. The vesting schedule of employees and consultants electing the Replacement Option alternative will remain the same. 2. Section 1.15 is hereby added to the Agreement as follows: 1.15 Transition Cost Sharing. Caldera and SCO agree to share transition ----------------------- costs relating to the SCO Transaction from the date of the Agreement to the Closing Date as set forth in the Transition Costs Memorandum attached hereto as Exhibit 1.15. - ------------ [SIGNATURE PAGE TO FOLLOW] IN WITNESS WHEREOF, the parties hereto have executed this Amendment to Agreement and Plan of Reorganization as of the date first above written. THE SANTA CRUZ OPERATION, INC. a California corporation By: /s/ Steven M. Sabbath --------------------------------------- Steven M. Sabbath Senior Vice President, Law & Corporate Affairs CALDERA SYSTEMS, INC. a Delaware corporation By: /s/ Ransom H. Love --------------------------------------- Ransom Love Chief Executive Officer CALDERA, INC. a Delaware corporation By: /s/ Ransom H. Love ---------------------------------------- Ransom Love Chief Executive Officer [SIGNATURE PAGE TO AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION] 2 Exhibit 1.15 ------------ Transition Costs Memorandum The purpose of this Memorandum is to memorialize the agreement of The Santa Cruz Operation ("SCO") and Caldera Systems, Inc. ("Caldera") with respect to the sharing of transition costs relating to the planned acquisition by Caldera of the SCO Server and Professional Services Divisions ("Acquisition"). 1. Background. The parties understand that, even if the Acquisition had not ----------- occurred, SCO would have undergone a reduction in its workforce. The parties further understand that, if SCO had restructured to remain a standalone company, it would have terminated 150 more employees than it did in anticipation of the Acquisition, at an estimated cost to SCO of approximately $3,200,000. The carrying costs for these additional 150 employees are approximately $4,200,000 per quarter. As SCO would have terminated them in August, they will have been on the SCO payroll an additional four months as of December 31, 2000, at a total cost to SCO of approximately $5,600,000. In addition, stay-on bonuses of $600,000 have been promised to transition employees, resulting in a total cost to SCO of $6,200,000. Therefore, the net incremental cost being borne by SCO as a result of the Acquisition is approximately $3 million ($6,200,000 that SCO bore minus the $3,200,000 that SCO saved by not terminating the 150 employees in August). 2. Agreement to Share Transition Costs. After some discussion, the parties ------------------------------------ have agreed to split the net incremental costs on a 50:50 basis. Caldera, therefore, agrees to pay SCO the sum of $1,500,000, which is intended to reimburse SCO for a 50 percent portion of the costs from August 2000 through December 2000. 3. One-Time-Only Basis. The parties agree that this cost sharing arrangement -------------------- is being done on a one-time-only basis and that Caldera is not agreeing to pay or share transition or termination costs that SCO may incur hereafter, regardless of how long it takes to obtain SEC and shareholder approval and to consummate the Acquisition. 3 -----END PRIVACY-ENHANCED MESSAGE-----