UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

~~May~~July 2615, 2009

SUMTOTAL SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

DELAWARE

000-50640

42-1607228

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

1808 North Shoreline Boulevard

Mountain View, California 94043

(Address of principal executive offices, including zip code)

(650) 934-9500

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

x¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 18.01 ~~Entry~~Other ~~into a Material Definitive Agreement~~Events.

On ~~May~~ July 2615, 2009, SumTotal Systems, Inc., ~~a Delaware corporation~~ (the “Company”) orannounced ~~“SumTotal”),~~that it entered into ana ~~Agreement~~memorandum ~~and Plan~~ of ~~Merger~~understanding ~~(the~~with ~~“Merger~~respect ~~Agreement”)~~to bya ~~and~~settlement ~~among~~with the ~~Company,~~plaintiff ~~Amber~~in ~~Holding~~the ~~Inc.,~~lawsuit ~~a Delaware~~docketed ~~corporation~~as ~~(“Newco”),~~Irgens ~~and~~v. ~~Amber~~SumTotal ~~Acquisition~~Systems, Inc., aet ~~Delaware~~al., ~~corporation~~Case ~~and~~No. 109CV141073, afiled ~~wholly~~in ~~owned~~the Superior ~~subsidiary~~Court of ~~Newco~~Santa Clara County, California (~~“Merger~~the ~~Sub~~“Litigation”). Pursuant to the ~~terms~~memorandum of understanding, the ~~Merger~~parties ~~Agreement,~~will ~~Merger~~execute ~~Sub~~a stipulation of settlement, which will be ~~merged~~subject ~~with~~to ~~and~~court ~~into~~approval following notice to the Company,’s ~~and~~stockholders. asThere acan ~~result~~be no assurance that the ~~Company~~settlement will ~~continue~~be asfinalized or that the ~~surviving~~court ~~corporation~~will approve the settlement. The settlement terms, which require court approval, provide that the Litigation will be dismissed with prejudice against all defendants. The Company and athe ~~wholly~~other ~~owned~~named ~~subsidiary~~defendants ofdeny ~~Newco~~any (liability with respect to the ~~“Merger”)~~facts and claims alleged in the Litigation. ~~Newco~~Defendants isfurther ~~controlled~~deny bythat ~~Vista~~any ~~Equity~~supplemental ~~Partners~~disclosure ~~Fund~~was ~~III~~required under any applicable statute, ~~L.P.~~rule, ~~(“Vista”)~~regulation or law.

~~Pursuant~~Without toagreeing that any of the ~~Merger~~claims ~~Agreement,~~in atthe Litigation have any merit, the ~~effective~~Company ~~time~~has ofagreed, pursuant to the ~~Merger~~settlement terms, ~~each~~to ~~issued~~make ~~and~~the ~~outstanding~~following ~~share~~disclosures ofwhich ~~common~~supplement ~~stock~~the ofinformation provided in the Schedule 14A filed by the Company ~~(collectively~~on June 23, 2009 (the “~~Common~~Proxy ~~Stock~~Statement”), ~~other~~concerning ~~than~~the ~~shares~~merger ~~owned~~of by the Company with an affiliate of Vista Equity Partners Fund III, ~~Newco~~L.P. or(the “Merger”). ~~Sub,~~The settlement will not affect the amount of the merger consideration to be ~~canceled~~paid ~~and~~to ~~extinguished~~the ~~and~~Company’s ~~automatically~~stockholders ~~converted~~in ~~into~~the Merger. The following information supplements the ~~right~~Proxy Statement toand ~~receive~~should $4be read in conjunction with the Proxy Statement.85 Capitalized terms used but not otherwise defined herein have the meanings given to them in ~~cash,~~the ~~without~~Proxy ~~interest~~Statement.

~~The~~THE ~~Company~~MERGER is subject to a “no-shop” restriction on its ability to solicit alternative acquisition proposals, provide information and engage in discussions with third parties. The no-shop provision is subject to a “fiduciary-out” provision that allows the Company under certain circumstances to provide information and participate in discussions at any time with respect to unsolicited alternative acquisition proposals and prior to the time the Company receives approval of the Merger Agreement from its stockholders.

~~The~~Background ~~Merger~~of ~~Agreement contains certain termination rights for both~~ the ~~Company and Newco. The~~ Merger Agreement provides that, upon termination under specified circumstances, the Company would be required to pay Newco a termination fee of $6.67 million, depending on the circumstances of the termination and, under certain circumstances, to reimburse Newco for an amount not to exceed $1 million for transaction expenses incurred by Newco and its affiliates. The Company’s reimbursement of Newco’s expenses would reduce the amount of any required termination fee that becomes payable by the Company.

~~Newco has obtained equity financing commitments for the transactions contemplated by the Merger Agreement.~~ The ~~aggregate~~section ~~proceeds~~ of the ~~equity~~Proxy ~~commitment~~Statement ~~will~~entitled beBackground ~~sufficient to fully finance the Merger and the other transactions contemplated thereby. Consummation~~ of the Merger ~~is not subject to a financing condition~~, ~~but~~beginning ison ~~subject~~page to18 ~~customary conditions to closing, including the maintenance of a minimum cash and cash equivalents balance at the closing. The affirmative vote of a majority of the Company’s outstanding shares~~ is ~~required~~supplemented toas ~~adopt the Merger Agreement~~follows.

~~The~~Additional ~~foregoing~~Information ~~description~~Regarding ofParties ~~the~~Contacted Merger Agreement is only a summary, does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is attached as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference.

~~The~~Regarding ~~Board~~the selection of ~~Directors~~the parties to contact on April 2, 2009, discussed on page 22 of the ~~Company~~Proxy ~~(the~~Statement, ~~“Board~~our board of ~~Directors”)~~directors ~~approved~~instructed ~~the~~RBC ~~Merger~~to ~~Agreement~~hold dialogues with seven potential acquirers of the Company. ~~RBC~~The ~~Capital~~three ~~Markets~~potential ~~Corporation~~strategic partners ~~(“RBC”)~~were ~~serves~~chosen asby ~~the~~our ~~financial~~board ~~advisor~~of todirectors on the ~~Board~~basis of ~~Directors.~~the Onpotential ~~May 26,~~strategic ~~2009,~~merits ~~RBC~~of ~~delivered~~ a ~~written~~potential ~~opinion~~transaction and their ability to ~~the~~pay ~~Board~~all-cash ofand ~~Directors~~move ~~that~~quickly to pursue a transaction, asif ofinterested. ~~the~~The ~~date~~four ofpotential ~~the~~financial ~~opinion~~buyers, which included Vista and ~~subject~~AKKR, towere ~~the~~chosen ~~limitations~~by ~~contained~~our ~~therein,~~board ~~from~~of directors because they had previously expressed interest in a ~~financial~~ ~~point~~possible ofcombination ~~view,~~with us and the ~~consideration~~board toof bedirectors’ ~~offered~~desire to limit the ~~stockholders~~number of ~~the~~contacts ~~Company~~to ina ~~the~~limited ~~Merger~~number isof ~~fair~~parties most likely to ~~such~~be ~~stockholders~~in a position to indicate their interest (if any) in a short period of time.

OnRegarding the selection of the 39 additional parties ~~May 27,~~contacted ~~2009~~during the “go-shop” period, discussed on page 25 of the ~~Company~~Proxy ~~issued~~Statement, our board of directors approved a ~~press~~list ~~release~~of ~~announcing~~parties to contact that itwas ~~had~~compiled ~~entered~~with ~~into~~a ~~the~~view ~~Merger~~to ~~Agreement.~~making Aas ~~copy~~broad a canvass of potentially interested parties as practicable consistent with their anticipated levels of interest (in light of their prior acquisition history, known industry focus and other criteria) and with their expected capacity to respond and, if interested, complete due diligence and contract negotiation and provide the ~~press~~necessary ~~release~~financing, isall ~~attached~~within ~~hereto~~the asgo-shop ~~Exhibit~~period. 99Of the 39 parties contacted, 17 were potential strategic acquirers and 22 were private equity firms.1.

~~The~~Additional ~~Merger~~Information ~~Agreement~~Regarding ~~has been included to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about~~ the ~~Company.~~Mergers & ~~The~~Acquisitions ~~representations,~~Committee warranties and covenants contained in the Merger Agreement were made only for purposes of the Merger Agreement and as of specified dates, were solely for the benefit of the parties to the Merger Agreement, and may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures exchanged between the parties in connection with the execution of the Merger Agreement. The representations and warranties may have been made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under the Merger Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company, Newco or Merger Sub or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.

~~Additional~~As ~~Information~~discussed on page 20 of the Proxy Statement, on September 19, 2008, the board of directors, in order to reduce the administrative burden on the board of directors, formed an M&A Committee to consider strategic alternatives and ~~Where~~make ~~You~~recommendations ~~Can~~to ~~Find~~the Itboard of directors. Jack Acosta, Kevin Oakes and Sally Narodick comprised the M&A Committee and Don Fowler served as an observer. The members of the M&A Committee were selected based on, among other things, availability and experience with and knowledge of strategic transactions and the process involved therewith.

~~In connection~~Additional ~~with~~Information ~~the~~Regarding ~~proposed transaction, SumTotal will file a proxy statement and relevant documents concerning~~ the ~~proposed~~Exclusivity ~~transaction~~Agreement with ~~the~~AKKR SEC. Investors and security holders of SumTotal are urged to read the proxy statement and any other relevant documents filed with the SEC when they become available because they will contain important information about SumTotal and the proposed transaction. The proxy statement (when it becomes available) and any other documents filed by SumTotal with the SEC may be obtained free of charge at the SEC’s web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by SumTotal by contacting SumTotal Investor Relations at 650-934-9584. Investors and security holders are urged to read the proxy statement and the other relevant materials when they become available before making any voting or investment decision with respect to the proposed transaction.

~~SumTotal~~As ~~and~~discussed ~~its~~on ~~directors,~~page ~~executive~~24 ~~officers and certain other members~~ of ~~its~~the ~~management~~Proxy ~~and~~Statement, ~~employees~~on ~~may~~April 5, ~~under~~2009, ~~SEC~~the ~~rules,~~Company beentered ~~deemed~~into toan ~~be participants~~exclusivity inagreement ~~the~~with ~~solicitation~~AKKR. The board of ~~proxies~~directors ~~from~~authorized entering ~~SumTotal’s~~into ~~stockholders~~the inexclusivity ~~connection~~agreement with ~~the~~AKKR ~~transaction.~~because ~~Information~~at ~~regarding~~ the ~~interests~~time, AKKR’s offer of ~~such~~$3.75-4.00 per ~~directors~~share ~~and~~offered ~~executive~~the ~~officers~~highest ~~(which~~purchase ~~may~~price berange ~~different~~after ~~then~~the ~~those~~other ofparties ~~SumTotal’s stockholders~~were ~~generally)~~given isan ~~included~~opportunity into ~~SumTotal’s~~increase ~~proxy~~their ~~statements~~offers, and ~~Annual~~AKKR ~~Reports~~had at onthe ~~Form~~time ~~10-K,~~completed ~~previously~~more ~~filed~~diligence discussions with the ~~SEC,~~Company. ~~and~~In ~~information~~addition, ~~concerning~~AKKR ~~all~~included ofan ~~SumTotal’s~~indication ~~participants~~that in the ~~solicitation~~transaction ~~will~~would be ~~included~~fully infinanced and that the ~~proxy statement~~definitive ~~relating~~agreement tofor the ~~proposed~~ transaction ~~when~~would itcontain ~~becomes~~a ~~available.~~go-shop ~~Each~~provision ofwhich would ~~these~~allow ~~documents~~other ~~is,~~parties oran ~~will~~opportunity ~~be,~~to ~~available~~provide ~~free~~an ofoffer ~~charge~~in atexcess ~~the~~of ~~SEC~~AKKR’s ~~web~~per ~~site~~share atpurchase ~~http://www~~price.~~sec.gov~~ ~~and from SumTotal Investor Relations, at http://investor.sumtotalsystems.com.~~

~~Item~~Opinion ~~1.02~~of ~~Termination~~the ofFinancial aAdvisor ~~Material~~to ~~Definitive~~Our Board ~~Agreement.~~of Directors

~~On May 26,~~Additional ~~2009,~~Information ~~SumTotal~~Regarding ~~terminated~~Criteria ~~the~~for ~~Agreement~~Comparable ~~and~~Precedent ~~Plan~~Transaction ofAnalysis Merger dated April 23, 2009, as amended on May 18, 2009 (the “AKKR Merger Agreement”), by and among the Company, ST Software Holdings, LLC, a Delaware limited liability company and ST Mergersub, Inc., a Delaware corporation, in order to enter into the Merger Agreement, as described in Item 1.01 above. In connection with the termination of the AKKR Merger Agreement, the Company paid an affiliate of ST Software Holdings, LLC a termination fee of $6.67 million. A description of the material terms of the AKKR Merger Agreement, as amended, is contained in SumTotal’s current reports on 8-K filed with the SEC on April 24, 2009 and May 19, 2009 and are incorporated herein by reference.

~~Item~~Regarding ~~9.01~~the ~~Financial~~transactions ~~Statements~~that RBC selected for its Comparable Precedent Transaction Analysis, discussed on pages 36 to 37 of the Proxy Statement, RBC determined that this was an appropriate universe of transactions for purposes of this analysis, having regard to the nature of the Company’s business, the aggregate value of the consideration payable in the Merger and ~~Exhibits~~the announcement dates of the selected transactions.

~~(d)~~Regarding ~~Exhibits~~the multiples that RBC selected for its Comparable Precedent Transaction Analysis, RBC determined that Enterprise Value to LTM Revenue and Enterprise Value to LTM EBITDA were appropriate metrics for purposes of this analysis, having regard to the nature of the Company’s business and RBC’s approach to comparable precedent transaction analysis for mergers involving companies in that business.

Exhibit		Description
2.1		Agreement and Plan of Merger dated May 26, 2009 by and among the Company, Newco and Merger Sub
99.1		Press release dated May 27, 2009

Additional Information Regarding Criteria for Comparable Public Companies Analysis

Regarding the companies that RBC selected for its Comparable Companies Analysis, discussed on pages 37 to 39 of the Proxy Statement, RBC determined that this was an appropriate universe of companies for purposes of this analysis, having regard to the nature of the Company’s business, the level of the Company’s reported revenue and the Company’s forecasted revenue growth for the periods RBC determined relevant.

Regarding the multiples that RBC selected for its Comparable Companies Analysis, RBC determined that Enterprise Value to Revenue, Enterprise Value to EBITDA and Price to Non-GAAP EPS were appropriate metrics for purposes of this analysis, having regard to the nature of our business and RBC’s approach to comparable public company analysis for mergers involving companies in that business.

Additional Information Regarding Adjustment to Non-GAAP EPS

Regarding the adjustments made in calculating Non-GAAP EPS used in the Comparable Companies Analysis, discussed on page 38 of the Proxy Statement, Non-GAAP EPS excludes amortization of intangible assets, goodwill impairment, stock-based compensation, restructuring charges and other miscellaneous one-time gains and losses. RBC determined Non-GAAP EPS to be an appropriate metric for purposes of this analysis, having regard to the nature of the Company’s business and RBC’s approach to comparable public company analysis for mergers involving companies in that business.

Additional Information Regarding Criteria for Premiums Paid Analysis

Regarding the transactions that RBC selected for its Premiums Paid Analysis, discussed on page 39 of the Proxy Statement, RBC determined that this was the appropriate universe of transactions for purposes of this analysis, having regard to the aggregate value of the consideration payable in the Merger, the all-cash nature of the merger consideration, the announcement dates of the prior transactions and RBC’s approach to premiums paid analysis, which uses a broader universe of transactions than it uses in its Comparable Precedent Transaction Analysis.

Additional Information Regarding RBC Opinion Fee

Regarding the amount of fees that RBC has been paid or will be paid for the fairness opinion(s) it has rendered in connection with the Proposed Transaction, discussed on pages 41 to 42 of the Proxy Statement, RBC has become entitled to a total of $900,000 for opinions rendered to our board as to the fairness to our stockholders, from a financial point of view, of the per share price of $4.85

in cash without interest to be received by them, of which (i) the first $300,000 (for its opinion as to the fairness, from a financial point of view, of the consideration under the original AKKR Merger Agreement) is not creditable against its contingent transaction fee, and (ii) the second $300,000 (for its opinion as to the fairness, from a financial point of view, of the consideration under the amended AKKR Merger Agreement) and the third $300,000 (for its opinion as to the fairness, from a financial point of view, of the consideration under the merger agreement with an affiliate of Vista that is the subject of the Proxy Statement) are creditable against the contingent transaction fee payable if the merger is completed.

SIGNATURES

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.

	SumTotal Systems, Inc.
Date: May 27, 2009
Date: July 15, 2009
	By:	/s/ Neil J. Laird
		Neil Laird Chief Financial Officer
		Neil J. Laird
		Chief Financial Officer

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