8-K

UNITED STATES
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

Date of Report
(Date of earliest event reported)
November 24, 2009

QUALITY SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

CALIFORNIA
(State or other
jurisdiction of incorporation) 001-12537
(Commission File Number) 95-2888568
(IRS Employer
Identification Number)

18111 Von Karman, Suite 600
Irvine, California 92612
(Address of Principal Executive Offices)

(949) 255-2600
(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):

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

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

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

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

Item 1.01 Entry into a Material Definitive Agreement.

     Employment Arrangement between the Company and Scott Decker.

     As described in Item 5.02 below, Scott Decker was appointed as the President of NextGen Healthcare Information Systems Software on November 24, 2009. In connection with Mr. Decker’s appointment, the Company and Mr. Decker have entered in to an unwritten at-will employment arrangement (“Decker Employment Arrangement”). Under the terms of the Decker Employment Arrangement, Mr. Decker will report to the Company’s Chief Operating Officer. Mr. Decker’s compensation will consist of the following components:

• A base salary at an annualized rate of $350,000, payable in accordance with the Company’s normal payroll practices, and subject to all legally-required deductions.

• A grant of options to purchase 25,000 shares of the Company’s common stock on November 30, 2009, pursuant to the terms and provisions of the Company’s Amended and Restated 2005 Stock Option Plan. The options will have an eight (8) year term, and will vest in equal, annual 20% installments over a five (5) year period beginning one (1) year following the date of grant. Such grant is in lieu of any other options for which Mr. Decker may have been eligible for the 2010 fiscal year.

• Bonus eligibility of up to 60% of his annual base salary.

• Group insurance coverage, together with other employment benefits available to employees of the Company on the same terms as for other executive employees of the Company.

     Further, under the terms of the Employment Arrangement, Mr. Decker is required to acquire prior to November 24, 2010 (to the extent possible subject to the Company’s insider trading policy and applicable securities laws) on the open market or through option exercises and hold throughout his tenure as an executive officer of the Company, a minimum of 2,000 shares of the Company’s common stock. In addition, to be eligible for the compensation set forth above, including, without limitation, the grant of options, Mr. Decker is required to execute the Company’s standard Confidentiality Agreement for its senior executives.

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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Resignation of President

     On November 24, 2009, Steven T. Plochocki resigned as President of the Company. Mr. Plochocki will continue to serve as the Chief Executive Officer.

Appointment of President and Chief Strategy Officer.

     On November 24, 2009, the Board of Directors of the Company created the new position of Chief Strategy Officer of the Company, reporting to the Chief Executive Officer of the Company. Upon the creation of such office and in order fill the vacancy created by Mr. Plochocki, the Board of Directors of the Company, upon recommendation of the Company’s Compensation Committee, appointed Patrick B. Cline as the President and Chief Strategy Officer of the Company, effective November 24, 2009. Mr. Cline will continue under his current compensation arrangement with the Company. Mr. Cline and the Company are party to an Indemnification Agreement, a form of which is filed with the Securities and Exchange Commission as Exhibit 10.6.1 to the Company’s Annual Report on Form 10-K for the year ended March 31, 2005.

     Patrick B. Cline, age 48, is currently a director of the Company. Prior to his appointment as President and Chief Strategy Officer of the Company, Mr. Cline was the President of our NextGen Healthcare Information Systems Division since 1996. He served as our interim Chief Executive Officer from April to July 2000. Mr. Cline was a co-founder of Clinitec; a company we acquired in 1996, and has served as its President from its inception in January 1994. Prior to co-founding Clinitec, Mr. Cline served from July 1987 to January 1994 as Vice President of Sales and Marketing with Script Systems, a subsidiary of InfoMed, a healthcare information systems company. From January 1994 to May 1994, after the founding of Clinitec, Mr. Cline continued to serve, on a part-time basis, as Script Systems’ Vice President of Sales and Marketing. Mr. Cline has held senior positions in the healthcare information systems industry since 1981. Mr. Cline has been a director of our company since 2005.

Appointment of President, NextGen Healthcare Information Systems Software.

     On November 24, 2009, the Board of Directors of the Company created the new position of President of NextGen Healthcare Information Systems Software, a division of NextGen Healthcare Information Systems, Inc., a wholly owned subsidiary of the Company, and, upon recommendation of the Company’s Compensation Committee, appointed Scott Decker to fill such position, effective November 24, 2009.

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     Scott Decker, age 44, has been the Senior Vice President, Marketing and Product Management of our NextGen Healthcare Information Systems Division since October 2007. Prior to that he was the Chief Executive Officer and President of Healthvision, Inc., a healthcare information technology company, from July 1999 to September 2007.

     The disclosure in Item 1.01 regarding the Decker Employment Arrangement between Mr. Decker and the Company are incorporated herein by reference.

     A copy of the news release announcing the appointment of Mr. Cline as President and Chief Strategy Officer and Mr. Decker as President of the Company’s NextGen Healthcare Information Systems Software is attached to this Form 8-K as Exhibit 99.1, which is incorporated herein by this reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit 99.1   Press release dated November 24, 2009 of Quality Systems, Inc.

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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.

Date: November 25, 2009	QUALITY SYSTEMS, INC.
	By:	/s/ Paul Holt
		Paul Holt
		Chief Financial Officer

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INDEX TO EXHIBITS

Exhibit
Number	Description
99.1	Press release dated November 24, 2009 of Quality Systems, Inc.

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EX-99.1

Exhibit 99.1

Press Release

FOR IMMEDIATE RELEASE
NOVEMBER 24, 2009 For further information, contact:
Susan J. Lewis, 303-804-0494
slewis@qsii.com

QUALITY SYSTEMS, INC. PROMOTES TWO SENIOR MANAGEMENT MEMBERS

IRVINE, Calif. ... November 24, 2009 ... Quality Systems, Inc. (NASDAQ: QSII) announced today that effective immediately, Patrick Cline, president of its NextGen Healthcare Information Systems subsidiary, has been promoted to president and chief strategy officer of Quality Systems. Steven T. Plochocki, who currently serves as president and chief executive officer, will remain chief executive officer.

Concurrently, Scott Decker, NextGen’s senior vice president, was named successor to Cline and will serve as president at NextGen.

In his new role, Cline, who will report to Plochocki, will be responsible for identifying and overseeing the continued growth of the company through the development and management of partnerships and strategic alliances that expand and strengthen the company’s market presence and capabilities. He will work closely with the Quality Systems’ executive management team to seek out diverse options that will lead to continued stability and future success of the organization.

Decker will oversee day-to-day operations at NextGen, guiding and growing all product lines within the division. He will manage the development and implementation of strategic and operational business plans to promote future growth of the subsidiary. Decker will report to Philip N. Kaplan, Quality Systems’ chief operating officer.

“Quality Systems has continued to strategically position itself to meet the upcoming changes presented by the Obama Administration’s stimulus plan released in February 2009. This once-subdued healthcare information technology (HIT) sector was truly kicked into gear after details of the bill were announced, and we believe that there will be many growth opportunities to pursue in the coming months and years. The promotion of these two seasoned members of our solid senior management team are reflective of our plans as we prepare to capitalize on the vast opportunities the HIT sector will reveal during the next three to five years,” stated Plochocki. “Pat will devote his time to identifying global opportunities for the company while Scott will parlay his years of NextGen experience and industry expertise into his new role. The strategic decision to reorganize our management team and structure by promoting both Pat and Scott will afford us the chance to further cement the solid market leadership position Quality Systems holds today. We look forward to the sea change the HIT sector and the healthcare landscape will witness as our nation works to transform its healthcare system. This is a transition we are very excited to be a part of,” Plochocki explained.

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Quality Systems, Inc.
Promotion of Management Members
Page 2

Cline, a 30-year healthcare industry veteran, founded Clinitec (which became NextGen) in 1994 and has since led the company’s dramatic growth as it has become the recognized leader in the industry.

Decker joined NextGen in 2007 as a senior vice president, initially developing the company’s Health Information Exchange (HIE) and hospital sector targeted business approach and strategy. In 2008, he assumed additional responsibility for corporate marketing and has been extremely involved in the re-building of NextGen’s marketing, branding and product management strategy. Previously, Decker founded and served as chairman of the board of directors and chief executive officer of Healthvision, Inc., a pioneer in the HIE market, where he built and deployed one of the first Software-as-a-Service (SaaS)-based infrastructures for the healthcare industry. Prior to joining Healthvision, Decker was vice president of development for VHA Inc.’s health information technologies business unit and focused on the development of one of the nation’s first Intranets: VHAseCURE.net. Decker began his career at IBM Corporation, where he held a variety of sales, marketing and business development positions within the global health industry business unit.

About Quality Systems, Inc.

Irvine, Calif.-based Quality Systems, Inc. and its NextGen Healthcare Information Systems subsidiary develop and market computer-based practice management, patient records and revenue cycle management applications as well as connectivity products and services for medical and dental group practices. Visit www.qsii.com and www.nextgen.com for additional information.

This news release may contain forward-looking statements within the meaning of the federal securities laws. Statements regarding future events, developments, the Company’s future performance, as well as management’s expectations, beliefs, intentions, plans, estimates or projections relating to the future (including, without limitation, statements concerning revenue and net income), are forward-looking statements within the meaning of these laws and involve a number of risks and uncertainties. Moreover, these forward-looking statements are subject to a number of risks and uncertainties, some of which are outlined below. As a result, actual results may vary materially from those anticipated by the forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: the volume and timing of systems sales and installations; length of sales cycles and the installation process; the possibility that products will not achieve or sustain market acceptance; seasonal patterns of sales and customer buying behavior; the timing,

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cost and success or failure of new product and service introductions, development and product upgrade releases; undetected errors or bugs in software; changing economic, political or regulatory influences in the health-care industry; changes in product-pricing policies; availability of third-party products and components; competitive pressures including product offerings, pricing and promotional activities; the Company’s ability or inability to attract and retain qualified personnel; possible regulation of the Company’s software by the U.S. Food and Drug Administration; uncertainties concerning threatened, pending and new litigation against the Company including related professional services fees; uncertainties concerning the amount and timing of professional fees incurred by the Company generally; changes of accounting estimates and assumptions used to prepare the prior periods’ financial statements; general economic conditions; and the risk factors detailed from time to time in Quality Systems’ periodic reports and registration statements filed with the Securities and Exchange Commission. A significant portion of the Company’s quarterly sales of software product licenses and computer hardware is concluded in the last month of the fiscal quarter, generally with a concentration of such revenues earned in the final ten business days of that month. Due to these and other factors, the Company’s revenues and operating results are very difficult to forecast. A major portion of the Company’s costs and expenses, such as personnel and facilities, are of a fixed nature and, accordingly, a shortfall or decline in quarterly and/or annual revenues typically results in lower profitability or losses. As a result, comparison of the Company’s period-to-period financial performance is not necessarily meaningful and should not be relied upon as an indicator of future performance. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

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