CALDERA SYSTEMS INC
425, 2000-08-21
PREPACKAGED SOFTWARE
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                                                 Filed by Caldera Systems, Inc.
                          Pursuant to Rule 425 under the Securities Act of 1933
                                and deemed filed pursuant to Rule 14a-12 of the
                                                Securities Exchange Act of 1934

                                         Subject Company: Caldera Systems, Inc.
                                               Commission File No. 000-29911
                                                                  -------------


FOR IMMEDIATE DISTRIBUTION


PRESS CONTACTS:
Jodi Reinman                                 Nancy Pomeroy
Server Software Division, SCO                Caldera Systems, Inc
831-427-7047                                 801-765-4999
[email protected]                               [email protected]


                    CALDERA AND SCO UNVEIL FIRST STEPS ALONG
                      THE PATH TO A LINUX AND UNIX MARRIAGE

                  ENTERPRISE CUSTOMERS CAN NOW REAP BENEFITS OF
                      NEW TECHNOLOGY AND SERVICE OFFERINGS

FORUM2000, SANTA CRUZ, CA (AUGUST 21, 2000) - Caldera Systems, Inc., (Nasdaq:
CALD), a "Linux for Business" leader and the Server Software Division of SCO
(NASDAQ:SCOC) today announced a joint initiative to combine and offer Linux and
UNIX server solutions and services worldwide.

The new offerings, announced today at Forum2000, include the Linux Kernel
Personality for UnixWare 7 - the first technology developed to bring UnixWare 7
into the Linux business market. Also announced today is Enterprise Support
Services, SCO's worldwide support program designed to meet the business and
time-critical requirements of enterprise customers.

These offerings fall under the umbrella of the Open Internet Platform (OIP)
which combines Linux and UNIX server solutions and services. The OIP provides
commercial customers and developers with a single platform that can scale from
the thinnest of clients to the clustering needs of the largest data center. The
Open Internet Platform



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CALDERA AND SCO REVEAL FIRST FRUITS OF LINUX AND UNIX MARRIAGE            2-2-2

combines the robust scalability of the UNIX system with the low-cost,
developer-accepted Linux operating system.

                                    - more -

"With Caldera's pending acquisition of the SCO Server Software and Professional
Services divisions, we already see some progress in the integration of our
technologies," said Ransom Love, CEO, Caldera Systems, Inc. "We believe that the
combined strengths of Caldera and SCO are key in offering powerful Linux and
UNIX solutions to the enterprise."

"HP sees that Caldera with SCO will bring more value to the Linux and UNIX
markets. Each company has a proven record of providing the highest standard of
support for their respective markets," said Jim Bell, general manager of HP's
Open Source and Linux Operation (OSLO). "We look forward to working with the new
Caldera to see that our hardware is a well-supported platform for their future
business plans."

"SCO is very excited about the newly formed relationship with Caldera, said
David McCrabb, president, Software Server Division, SCO. "Joining forces will
escalate our ability to provide worldwide Internet solutions to a level that the
industry has not yet seen."

CALDERA AND OPEN SOURCE

Caldera Systems is a leader in -- and supporter of -- the Open Source movement.
Please visit www.openlinux.org to download Caldera Systems' technologies that
have been open-sourced-including but not limited to-LIZARD,

Caldera Open Administration System (COAS), Webmin, OpenSLP, the NetWare Kernel
File System (NKFS) and the OpenLinux 2.2 port for Sun's SPARC(tm) and
UltraSPARC(tm)-based platforms. Caldera Systems, Inc. Caldera Systems, Inc.
(Nasdaq: CALD) is a "Linux for Business" technology leader in developing and
marketing successful Linux-based business solutions, including its award-winning
OpenLinux, NetWare for Linux, Linux technical training, certification and
support-with free 30-day phone support and on-site consulting. Caldera
OpenLearning Providers offer exceptional distribution-neutral Linux training and
certification based on Linux Professional Institute (LPI) certification
standards. Caldera Systems supports the open



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CALDERA AND SCO REVEAL FIRST FRUITS OF LINUX AND UNIX MARRIAGE             3-3-3



source community and is a leader in, and advocate of Linux Standard Base (LSB)
and LPI.

                                    - more -

Caldera, Inc. was founded in 1994. Caldera Systems, Inc. was created in 1998 to
develop Linux-based business solutions. Based in Orem, UT, Caldera Systems has
offices and 800+ resellers worldwide. For more information, see
www.calderasystems.com or in the US call 888-GO-Linux (888-465-4689).

ABOUT THE SANTA CRUZ OPERATION, INC

With headquarters in Santa Cruz, CA, The Santa Cruz Operation, Inc. is comprised
of three independent divisions -Tarantella, Inc., the Server Software Division,
and the Professional Services Division. The Server Software Division is the
world's number one provider of UNIX server operating systems. Tarantella, Inc.
promotes a range of software technologies and products that web-enable any
application instantly, for access by users anywhere. The Professional Services
Division helps organizations create and deploy personalized IT strategies. The
three divisions sell and support their products and services through a worldwide
network of distributors, resellers, systems integrators, and OEMs. For more
information, visit SCO's home page at www.sco.com/scoinc/

                                       ###

SCO, The Santa Cruz Operation, the SCO logo, the Tarantella logo, Tarantella,
UnixWare, and SCO OpenServer are trademarks or registered trademarks of The
Santa Cruz Operation, Inc. in the USA and other countries. UNIX is a registered
trademark of The Open Group in the US and other countries. All other brand or
product names are or may be trademarks of, and are used to identify products or
services of, their respective owners. Caldera is a registered trademark of
Caldera Systems, Inc. All other products, services, companies, events and
publications are trademarks, registered trademarks or servicemarks of their
respective owners in the U.S. and/or other countries. LINUX is a registered
trademark of Linus Torvalds.

Cautionary Note Regarding Forward-Looking Statements under the Private
Securities Litigation Reform Act of 1995: Information in this release that
involves Caldera's, SCO's and, assuming the acquisition of the SCO Server
Software and Professional Services Divisions (the "Acquisition) is completed,
the combined companies' expectations, beliefs, hopes, plans, intentions or
strategies regarding the future are forward-looking statements that involve
risks and uncertainties. These statements include statements about Caldera's,
SCO's and the combined companies' strategies in the marketplace, their market
positions and their relationships with customers. All forward-looking statements
included in this release are based upon information available to Caldera and SCO
as of the date of the release, and neither Caldera, SCO nor the combined
companies assume any obligation to update any such forward-looking statement.
These statements are not guarantees of future performance and actual results
could differ materially from current expectations. Factors that could cause or
contribute to such differences include, but are not limited to 1) the potential
disruption of Caldera's and SCO's businesses that might result from employee or
customer uncertainty, and lack of focus following announcement of the
Acquisition in connection with integrating the operations of Caldera and SCO; 2)
product integration risk due to overlapping products and technologies; 3) the
possibility that the Acquisition might not be consummated; 4) the effects of the
public announcement of the Acquisition on Caldera's and SCO's stock prices,
their sales and operating results, their ability to attract and retain key
personnel and the progress of certain of their development projects; 5) the risk
that the announcement of the Acquisition could result in decisions by customers
to defer purchases of products of Caldera or SCO; 6) the risk that redundancy in
staffing and infrastructure could reduce efficiency and increase costs; 7) the
difficulties of managing geographically dispersed operations; and 8) the risk
that other benefits sought to be achieved by the Acquisition will not be
achieved. These and other factors are risks associated with Caldera's and SCO's



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CALDERA AND SCO REVEAL FIRST FRUITS OF LINUX AND UNIX MARRIAGE             4-4-4


businesses that may affect their operating results and are discussed in SCO's
Annual Report on Form 10-K for the fiscal year ended September 30, 1999 filed
with the Securities and Exchange Commission ("SEC") on December 28, 1999 and
Caldera's and SCO's quarterly reports on Form 10-Q filed with the SEC.Additional
Information and Where to Find It: It is expected that Caldera will file a
Registration Statement on SEC Form S-4 and Caldera and SCO will file a Joint
Proxy Statement/Prospectus with the SEC in connection with the Acquisition, and
that Caldera and SCO will mail a Joint Proxy Statement/Prospectus to
stockholders of Caldera and SCO containing information about the Acquisition.
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 Acquisition, the persons
soliciting proxies relating to the Acquisition, their interests in the
Acquisition, 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.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.



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