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 29, 2010

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

(c)

Appointment of New Executive Vice President, Secretary and General Counsel, and Employment Arrangement Between the Company and James Sullivan.

     On November 29, 2010, pursuant to authorization by the Board of Directors (the “Board”) of Quality Systems, Inc. (the “Company”), James J. Sullivan began service as Executive Vice President, General Counsel and Secretary of the Company. Mr. Sullivan is replacing Paul Holt as Secretary of the Company, with Mr. Holt continuing to serve the Company as Executive Vice President and Chief Financial Officer. Prior to his appointment, Mr. Sullivan, age 53, was Senior Vice President, General Counsel and Secretary of The TriZetto Group, Inc., a healthcare technology company. Prior to joining The TriZetto Group in July 2001, Mr. Sullivan ran his own legal and consulting practice focused on general corporate and securities matters for emerging growth companies from June 2000 to July 2001. From March 1997 to June 2000, Mr. Sullivan was Senior Vice President, General Counsel and Secretary of Long Beach Financial Corporation. Earlier in his career, Mr. Sullivan was a corporate and securities associate with Gibson, Dunn & Crutcher in its Newport Beach office. Mr. Sullivan brings more than 25 years of experience as a practicing corporate and securities law attorney, and he is also a certified public accountant (inactive status). Mr. Sullivan holds a J.D. from Loyola Law School in Los Angeles, California and a B.S. in Business Administration from the University of Southern California, Los Angeles, California.

     In connection with the appointment, the Company and Mr. Sullivan entered into an at-will employment arrangement (“Employment Arrangement”). The Employment Arrangement is attached to this report as Exhibit 10.1, which exhibit is incorporated herein by this reference. Under the terms of the Employment Arrangement, Mr. Sullivan will report to the Chief Executive Officer of the Company and his compensation will consist of the following components:

• A base salary at an annualized rate of $300,000.

• An annual cash bonus opportunity of up to $150,000, subject to the terms and provisions of the Company’s current 2011 Incentive Program and pro-rated for the number of months Mr. Sullivan is employed during the fiscal year 2011.

• An immediate grant of 10,000 options to purchase the Company’s common shares at an exercise price equal to the closing price of the Company’s shares on Mr. Sullivan’s first date of employment. The options will vest in equal, annual, 20% installments over a five-year period beginning one year following the grant date, and the options will have a term of eight years from the grant date. Mr. Sullivan will not be eligible to receive further options under the equity bonus portion of the Company’s 2011 Incentive Program.

• Three weeks of accrued vacation time per year which may be used in accordance with the Company’s current vacation policy.

• Group insurance coverage and other employment benefits on the same terms as other employees of the Company.

Mr. Sullivan is also required to acquire on the open market, and hold, a minimum of 1,000 shares of the Company’s stock in order to align his interests with the shareholders of the Company.

     A copy of the news release announcing the appointment of Mr. Sullivan as Executive Vice President, General Counsel and Secretary of the Company 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) Exhibit.

Exhibit 10.1	Employment Arrangement between Quality Systems, Inc. and James J. Sullivan.
Exhibit 99.1	Press release dated November 30, 2010 of Quality Systems, Inc.

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 30, 2010

QUALITY SYSTEMS, INC.
By:	/s/ Paul Holt
	Paul Holt
	Chief Financial Officer

EXHIBITS ATTACHED TO THIS REPORT ON FORM 8-K

Exhibit No.		Description
	10.1	Employment Arrangement between Quality Systems, Inc. and James J. Sullivan.
	99.1	Press release dated November 30, 2010 of Quality Systems, Inc.

EX-10.1

Exhibit 10.1

PERSONAL AND CONFIDENTIAL

November 1, 2010

James Sullivan
3 Oak Tree Drive
Newport Beach, CA 92660

Re: Employment Offer and Terms of Employment

Dear James:

On behalf of Quality Systems, Inc. (the “Company” or “QSI” or “Quality Systems”), I am exceedingly pleased to extend to you our offer of employment to join the Company as its Executive Vice President, Secretary and General Counsel. This letter will convey the proposed terms and conditions of your employment with the Company.

Following your acceptance of these terms, your employment start date will be November 29, 2010. Your title will be Executive Vice President, Secretary and General Counsel, and subject to necessary business travel requirements, you will perform your employment duties at the Company’s Irvine, California location. As Executive Vice President, Secretary and General Counsel, you will report to Steven Plochocki, and your duties and responsibilities will be commensurate with your title.

Your compensation will consist of the following components:

1.	A base salary at an annualized rate of $300,000, payable in accordance with the Company’s normal payroll practices, and subject to all legally-required deductions.
2.	An annual cash bonus opportunity of up to $150,000, subject to the terms and provisions of the Company’s current 2011 Incentive Program as described in the Company’s 2010 Proxy Statement. Any bonus payable for the Company’s fiscal year 2011 will be pro-rated for the number of months of your employment during the 2011 fiscal year.
3.	On your first day of employment, the immediate grant of an option to purchase 10,000 shares of the Company’s common stock, pursuant to the terms and provisions of the Company’s current Amended and Restated 2005 Stock Option Plan. The options pursuant to this grant will have an exercise price equal to the closing price of the Company’s shares on your first day of employment, 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. The specific terms and conditions of this options grant will be included in the Company’s standard option grant agreement between you and the Company. In light of the immediate grant of 10,000 options as set forth above, you shall not be eligible for further options under the equity bonus portion of the 2011 Incentive Program, but you will be eligible for options granted to executives under future incentive programs, subject to the terms of such programs.
4.	To align your interest with the shareholders of the Company in a similar manner to the requirement imposed upon the Directors of the Company, you will be required to acquire on the open market and hold, a minimum of 1,000 shares of the Company’s common stock. The acquisition of the 1,000 shares must occur prior to nine months after your start date. A balance of no less than 1,000 shares of the Company’s common stock acquired in connection with this purchase requirement must be maintained by

you at all times during your tenure as Executive Vice President, Secretary and General Counsel of the Company. If, prior to nine months after start date, there exists undisclosed information of which we are aware concerning a material nonpublic event with respect to the Company or the company is otherwise involved in a matter that would, under applicable law, prohibit you from acquiring the 1,000 shares referenced herein, the period ending on nine months after start date referenced above shall be extended for a period equal to that time during which you were prohibited from acquiring shares of the Company’s common stock (except for normally scheduled quarterly “blackout” periods in accordance with the Company’s Insider Trading Guidelines). It is the intention of you and the Company, however, that you make your acquisition of the 1,000 shares as expeditiously as possible, and in no event later than nine months after your start date.

5.	You are entitled to accrue three (3) weeks of vacation time per year which may be used in accordance with the Company’s current policy as described in the Employee Handbook.
6.	Group insurance coverage (with a participant eligibility date to be determined by the plan documents currently in effect), together with all other employment benefits will be available to you as an employee of Quality Systems, Inc. on the same terms as for other executive employees of the Company.
7.	By undertaking employment with Quality Systems, you also agree to abide by all current and future employment policies, rules and regulations of the Company. Additionally, by acceptance of this employment offer, you represent to Quality Systems that you have no agreements or covenants with any other entity that may conflict with, or preclude you from fulfilling to the best of your ability, your duties and responsibilities as Executive Vice President, Secretary and General Counsel of the Company. You further agree not to disclose to Quality Systems, or otherwise use on behalf of the Company, any proprietary or confidential information belonging to others which you acquired prior to your employment with Quality Systems, and which you are under obligation to keep secret. It is our policy not to request or expect information. In connection with this offer of employment, other than as expressly stated in this letter, Quality Systems makes no promises or representations concerning future promotions, compensation, or other terms and conditions of employment. By accepting employment, you agree that you have not relied upon or been induced to accept employment with Quality Systems on the basis of any such promises or representations. You will be required to execute the standard employee package of documents (including, among other things, a confidentiality agreement and inventions assignment agreement) which we require our employees to execute upon the commencement of employment.
8.	You and Quality Systems expressly understand and agree that your employment with the Company is in all respects “at will,” meaning that either you or Quality Systems can terminate the employment relationship at any time on notice to the other, with or without cause, for any reason or no reason. Quality Systems also can discipline, demote or alter the terms of employment of its employees at any time, with or without cause or advance notice. This letter and the employee documents referenced in the next paragraph will be our entire understanding concerning the subjects contained herein (including the at-will nature of your employment and the possible termination of the employment relationship), and the Company’s policy of at-will employment cannot be changed or modified in any way except that it may be superseded by one or more written agreements between you and Quality Systems, authorized in advance by specific resolution of Quality Systems’ Board of Directors and signed by both you and the Company’s Chief Executive Officer.
9.	As with all Quality Systems employees, on your first day of employment, you will be required to execute (i) an Acknowledgment and Certification of your receipt of, and agreement with, the Company’s Employee Handbook (the Handbook includes an at-will employment statement consistent with the foregoing), and (ii) a Employee Confidential Information and Employee Works Agreement (California version). As required by law, you also must establish your identity and authorization to work in the United States as required by the Immigration Reform and Control Act of 1986 (IRCA). Enclosed is a copy of the Employment Verification Form (I-9), with instructions required by IRCA. Please review this document and plan to bring the appropriate original documentation on your first day of work.

-2-

As we have discussed, you have agreed to maintain in confidence this employment offer and your acceptance of it until Quality Systems notifies you that it is ready to make a public announcement of your resignation from the board of directors of your current employer and acceptance of employment with Quality Systems, Inc. I am delighted you will be joining Quality Systems as Executive Vice President, Secretary and General Counsel, and I look forward to your making a tremendous contribution to the Company.

Regards,

/s/ Steven T. Plochocki

Quality Systems, Inc.

Steven T. Plochocki, Chief Executive Officer

AGREED TO AND ACCEPTED:

/s/ James Sullivan

James Sullivan

Dated: November 1, 2010

Exhibit A follows on next page

-3-

EXHIBIT A

It is agreed that the employment start date shall be: November 29, 2010.

/s/ Steven T. Plochocki

Quality Systems, Inc.

Steven T. Plochocki, Chief Executive Officer

EMPLOYMENT START DATE AGREED TO AND ACCEPTED:

/s/ James Sullivan

James Sullivan

Dated: November 1, 2010

-4-

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE	For further information, contact:
NOVEMBER 30, 2010	Susan J. Lewis, 303-804-0494
	slewis@qsii.com

QUALITY SYSTEMS, INC. NAMES JAMES J. SULLIVAN
EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY

     IRVINE, Calif. ... November 30, 2010 ... Quality Systems, Inc. (NASDAQ: QSII) announced today that it has named James J. Sullivan to the position of executive vice president, general counsel and secretary of the company, effective November 29, 2010.

     In this capacity, Sullivan will be responsible for overseeing all legal-related functions for the company. The general counsel role is a newly created position, and Sullivan is replacing Paul A. Holt as secretary of the company. Holt will continue to serve as executive vice president and chief financial officer.

     Sullivan brings more than 25 years of experience in corporate and securities law to the company. Before joining Quality Systems, Sullivan served as senior vice president, general counsel and secretary of The TriZetto Group, Inc., a healthcare technology company headquartered in Greenwood Village, Colo. Prior to joining The TriZetto Group in July 2001, Sullivan ran a legal and consulting practice focused on corporate, securities and intellectual property matters for technology and emerging-growth companies, from June 2000 to July 2001. Previously, he was senior vice president, general counsel and secretary of Long Beach Financial Corporation, a national mortgage lender headquartered in Orange, California. Earlier in his career, he was a corporate and securities associate with Gibson, Dunn & Crutcher in its Orange County, California office.

     “We are pleased to welcome Jim to our management team. He is a seasoned attorney with several years of experience in the healthcare information technology (HCIT) arena. His specific industry experience coupled with his corporate legal expertise will bode well for Quality Systems as we continue to focus on our strategic positioning and anticipated growth from the stimulus plan and beyond. We look forward to the contributions Jim will make in his new role,” said Steven T. Plochocki, chief executive officer at Quality Systems.

     Sullivan added: “Quality Systems has built a solid reputation in the HCIT sector, and there are many changes waiting to occur within our nation’s healthcare system. This is truly an exceptional time to be engaged in the sector, and I am excited to bring my decades of legal and healthcare knowledge to this growing entity.”

- more -

Quality Systems, Inc.
Appointment of James J. Sullivan
Page 2

     Sullivan, 53, resides in Newport Beach, Calif., with his wife, Leslie, and his two daughters. He holds a Bachelor of Science degree in Business Administration from the University of Southern California and a Juris Doctorate from Loyola Law School of Los Angeles. He received a Certified Public Accounting certification from the State of California in 1982.

About Quality Systems, Inc.

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

SAFE HARBOR PROVISIONS FOR FORWARD-LOOKING STATEMENTS

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. Management believes that these forward looking statements are reasonable and are based on reasonable assumptions and forecasts, however, undue reliance should not be placed on such statements that speak only as of the date hereof. 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 development by competitors of new or superior technologies; the timing, cost and success or failure of new product and service introductions, development and product upgrade releases; undetected errors or bugs in software; product liability; 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 the Company’s 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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