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):

January 21, 2019

NEXTGEN HEALTHCARE, INC.

(Exact name of registrant as specified in its charter)

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

18111 Von Karman, Suite 800

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:

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

☐ 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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02 Results of Operations and Financial Condition.

On January 23, 2019, NextGen Healthcare, Inc. (the “Company”) issued a press release announcing its financial performance for the period ended December 31, 2018. A copy of the press release is attached to this Form 8-K as Exhibit 99.1, and is incorporated herein by reference.

The information in this Item 2.02 of this Form 8-K, as well as Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

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

CEO Executive Employment Agreement Addendum – Rusty Frantz

On January 21, 2019, the Compensation Committee of the Company’s Board of Directors approved an Executive Employment Agreement Addendum (the “Addendum”) with the Company’s President and Chief Executive Officer, John R. “Rusty” Frantz.  The Addendum supplements the Executive Employment Agreement between the Company and Mr. Frantz, effective as of July 1, 2015.  The Addendum was executed by Mr. Frantz and the Company effective January 22, 2019.  The purpose of the Addendum is to provide Mr. Frantz with certain severance benefits, under certain circumstances, in the event that his employment is terminated.  

Under the terms of the Addendum, if the Company terminates Mr. Frantz’s employment without cause or if Mr. Frantz resigns from employment for good reason, and in each case such termination does not occur during a change of control period, then subject to Mr. Frantz signing a release and various other conditions customary for an agreement of this type, he will receive the following:

• Accrued compensation, including all accrued but unpaid vacation, expense reimbursements, wages, earned but unpaid cash bonus for any completed performance period, and other benefits due under any Company-provided plans, policies and arrangements.

• Severance payment (less applicable withholding taxes) equal to 150% of Mr. Frantz’s annual base salary, plus target bonus, paid in a lump sum on the 60^th day following the termination date.

• Pro-rated bonus, paid in a lump sum within 30 days after the date on which Mr. Frantz’s bonus would otherwise have been payable, in an amount equal to the product of (a) the annual bonus, if any, that Mr. Frantz would have earned for the entire fiscal year in which the termination occurs, based on the level of achievement of the applicable performance goals for such year, as determined in good faith by the Compensation Committee (or, in the discretion of the Company, Mr. Frantz’s target annual bonus for the fiscal year in which the termination occurs), multiplied by (b) a fraction, the numerator of which is the number of days Mr. Frantz was employed by the Company during the fiscal year in which the termination occurs and the denominator of which is the number of days in such fiscal year.

• Vesting of the portion of unvested equity awards (but not of any awards subject to performance conditions) that would have vested within eighteen months of the termination date.

• Continuation benefits coverage pursuant to COBRA for Mr. Frantz and his eligible dependents for a period of up to eighteen months from the termination date.

The foregoing summary of the Addendum is qualified in its entirety by the text of the Addendum, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.

Former COO Separation Agreement – Scott Bostick

As previously reported on a Form 8-K filed on September 17, 2018, the Company’s former Executive Vice President and Chief Operating Officer, Scott E. Bostick, resigned from his position effective September 14, 2018.  Mr. Bostick continued as a Company employee for a period of time in a non-executive officer role.  Mr. Bostick’s last day of employment with the Company was January 4, 2019.  In connection with his departure, Mr. Bostick and the Company have executed a separation agreement (the “Separation Agreement”), effective January 21, 2019.  The Separation Agreement provides for Mr. Bostick to receive a payment of $425,000 (representing 12 months’ base

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salary), a pro-rata offboarding bonus of $223,128, and continuation benefits coverage pursuant to COBRA through July 31, 2020.  The Separation Agreement also includes a general release of claims by Mr. Bostick, as well as other terms customary for an agreement of this type.  The foregoing summary of the Separation Agreement is qualified in its entirety by the text of the Separation Agreement, which is attached hereto as Exhibit 10.2 and is incorporated by reference herein.

Item 9.01Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
10.1	Executive Employment Agreement Addendum, dated as of January 22, 2019, between NextGen Healthcare, Inc. and John R. Frantz
10.2	Separation Agreement, dated as of January 21, 2019, between NextGen Healthcare, Inc. and Scott Bostick
99.1	Press Release dated January 23, 2019

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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: January 23, 2019	NEXTGEN HEALTHCARE, INC.
	By:	/s/ James R. Arnold
		James R. Arnold
		Chief Financial Officer

EX-10.1

Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT ADDENDUM

This Executive Employment Agreement Addendum (“Agreement”) is made and entered into as of January 22, 2019 (the “Effective Date”) by and between NextGen Healthcare, Inc., a California corporation (“Company”), and John R. Frantz, an individual (“Executive”), (individually, a “Party” and collectively, the “Parties”).

RECITALS

A. The Company and Executive entered into an Executive Employment Agreement effective as of July 1, 2015.

B. The Compensation Committee (the “Committee”) of the Board of Directors of the Company (the “Board”) believes that it is in the best interests of the Company and its stockholders to provide Executive with certain severance benefits upon Executive’s termination of employment under certain circumstances.

NOW THEREFORE, for good and valuable consideration, the Parties agree as follows:

1. Severance Benefits.

a. If the Company terminates Executive’s employment with the Company without Cause (and not for death or Disability) or if Executive resigns from such employment for Good Reason (the effective date of such termination or such resignation hereinafter referred to as the “Termination Date”), and, in each case, such termination does not occur during a Change of Control Period, then subject to Section 2, Executive will receive the following:

i. Accrued Compensation.  The Company will pay Executive all accrued but unpaid vacation, expense reimbursements, wages, any earned (as determined in good faith by the Compensation Committee) but unpaid cash bonus for any completed performance period, and other benefits due to Executive under any Company-provided plans, policies, and arrangements.

ii. Severance Payment.  Executive will receive a payment (less applicable withholding taxes) equal to 150% of the sum of the Executive’s annual base salary plus the Executive’s target bonus, each at the level in effect

immediately prior to the Termination Date paid in a single lump sum payment on the sixtieth (60^th) day following the date of termination.

iii. Pro-rated Bonus Payment.  Executive will receive a lump-sum payment within thirty (30) days after the date on which Executive’s bonus would otherwise be payable had Executive remained an active employee in an amount equal to the product of (a) the annual bonus, if any, that Executive would have earned for the entire fiscal year in which Executive separates from service with the Company, based on the level of achievement of the applicable performance goals for such year, as determined in good faith by the Compensation Committee, (or, in the discretion of the Company, Executive’s target annual bonus for the fiscal year in which Executive separates from service with the Company), multiplied by (b) a fraction, the numerator of which is the number of days the Executive was employed by the Company during the fiscal year in which the Termination Date occurs and the denominator of which is the number of days in such fiscal year.  Any payment pursuant to this Section 1(a)(iii) shall be in lieu of any annual bonus payment that Executive would otherwise receive for the year of termination.

iv. Equity Vesting.  Notwithstanding any language to the contrary set forth in any award agreements issued to Executive under Company’s Amended and Restated 1998 Stock Option Plan, Company’s Second Amended and Restated 2005 Stock Option and Incentive Plan or Company’s 2015 Equity Incentive Plan or any subsequent Company stock plan, upon the thirtieth (30th) day following the Termination Date, for awards not subject to the satisfaction of a performance condition, the unvested portion of any such unvested stock option, restricted stock unit or other equity award granted to Executive shall vest, which portion shall be the number of shares that would have vested per the applicable award as of the eighteen-month anniversary of the Termination Date had Executive remained continuously employed by Company through such date.  For awards that are subject to the satisfaction of a performance condition, there shall be no accelerated vesting and Executive shall not be entitled to a pro-rata portion of any such award if the Termination Date is prior to the completion of the applicable performance measurement period.

v. Continuation Coverage.  If Executive elects continuation coverage pursuant to COBRA within the time period prescribed pursuant to COBRA for Executive and Executive’s eligible dependents, then the Company will reimburse Executive for the COBRA premiums for such coverage (at the coverage levels in effect immediately prior to Executive’s termination) until the earlier of (A) a period of 18 months from the date of

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termination or (B) the date upon which Executive becomes covered under similar plans of a subsequent employer.  The reimbursements will be made by the Company to Executive consistent with the Company’s normal expense reimbursement policy.  Notwithstanding the first sentence of this Section 1(a)(v), if the Company determines in its sole discretion that it cannot provide the foregoing benefit without potentially violating, or being subject to an excise tax under, applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company will in lieu thereof provide to Executive a taxable monthly payment, payable on the last day of a given month, in an amount equal to the monthly COBRA premium that Executive would be required to pay to continue Executive’s group health coverage in effect on the termination of employment date (which amount will be based on the premium for the first month of COBRA coverage), which payments will be made regardless of whether Executive elects COBRA continuation coverage and will commence on the month following Executive’s termination of employment and will end on the earlier of (x) the date upon which Executive obtains other employment or (y) the date the Company has paid an amount equal to 18 such payments.  For the avoidance of doubt, the taxable payments in lieu of COBRA reimbursements may be used for any purpose, including, but not limited to continuation coverage under COBRA, and will be subject to all applicable tax withholdings.

b. Voluntary Resignation; Termination for Cause; Termination in Connection with a Change of Control; Disability; Death.  If Executive’s employment with the Company terminates (i) voluntarily by Executive (other than for Good Reason), (ii) for Cause by the Company, (iii) in connection with a Change of Control or (iv) as a result of Executive’s Disability or death, then Executive will not be entitled to receive severance or other benefits except for those (if any) as may then be established under the Company’s then existing severance and benefits plans and practices or pursuant to other written agreements between Executive and the Company.

c. Exclusive Remedy.  In the event of a termination of Executive’s employment under the conditions set forth in Section 1(a) of this Agreement, the provisions of Section 1 are intended to be and are exclusive and in lieu of any other rights or remedies to which Executive otherwise may be entitled, whether at law, tort, contract or in equity, except for (i) the right to the payment of any accrued but unpaid wages, as required by law, (ii) the right to the payment of any unreimbursed reimbursable expenses and (iii) any additional rights applicable to Executive under the Company’s Amended and Restated 1998 Stock Option Plan, Company’s Second Amended and Restated 2005 Stock Option and Incentive Plan, the Company’s 2015 Equity Incentive Plan and all award agreements issued

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to Executive thereunder.  The Company, in its sole discretion, shall have the authority to reduce Executive’s benefits under Section 1 of this Agreement, in whole or in part, by any other termination benefits, pay in lieu of notice, or other similar benefits payable to Executive by the Company pursuant to any applicable legal requirement, including, without limitation, the Worker Adjustment and Retraining Notification Act or comparable state law.

2. Conditions to Receipt of Severance.

a. Release of Claims Agreement.  The receipt of any severance payments or benefits (other than the accrued benefits set forth in Section 1(a)(i)) pursuant to this Agreement is subject to Executive signing and not revoking a release of claims in substantially the form attached hereto as Exhibit A (“Release”), which must become effective and irrevocable no later than the thirtieth (30th) day following the Termination Date (such date being the “Release Deadline”).  For avoidance of doubt, the Company may modify the form of the required Release only as is reasonably required to comply with changes in applicable law. If the Release does not become effective and irrevocable by the Release Deadline, Executive will forfeit any right to severance payments or benefits under this Agreement.  In no event will severance payments or benefits be paid or provided until the Release actually becomes effective and irrevocable.

b. Confidential Information and Invention Assignment Agreements.  Executive’s receipt of any payments or benefits under Section 1 (other than the accrued benefits set forth in Section 1(a)(i)) will be subject to Executive continuing to comply with the terms of the Proprietary Information and Inventions Agreement, between the Company and Executive, as such agreement may be amended from time to time.

c. Section 409A.

i. Notwithstanding anything to the contrary in this Agreement, no severance pay or benefits to be paid or provided to Executive, if any, pursuant to this Agreement that, when considered together with any other severance payments or separation benefits, are considered deferred compensation subject to and not exempt from Section 409A of the Code, and the final regulations and any guidance promulgated thereunder (“Section 409A”) (together, the “Deferred Payments”) will be paid or otherwise provided until Executive has a “separation from service” within the meaning of Section 409A.  Similarly, no severance payable to Executive, if any, pursuant to this Agreement that otherwise would be exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(9) will be

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payable until Executive has a “separation from service” within the meaning of Section 409A.

ii. It is intended that none of the severance payments under this Agreement will constitute Deferred Payments but rather will be exempt from Section 409A as a payment that would fall within the “short-term deferral period” as described in Section 2(c)(iv) below or resulting from an involuntary separation from service as described in Section 2(c)(iv) below.  However, any severance payments or benefits under this Agreement that would be considered Deferred Payments will be paid on, or, in the case of installments, will not commence until, the Release Deadline, or, if later, such time as required by Section 2(c)(iii). Except as required by Section 2(c)(iii), any installment payments that would have been made to Executive during the period immediately following Executive’s separation from service but for the preceding sentence will be paid to Executive on the Release Deadline following Executive’s separation from service and the remaining payments will be made as provided in this Agreement.  In any case where Executive’s separation from service and the Release Deadline fall in two separate calendar years, any amount required to be paid to Executive that is conditioned on the effectiveness of the Release and is treated as a Deferred Payment shall be paid in the later calendar year.

iii. Notwithstanding anything to the contrary in this Agreement, if Executive is a “specified employee” within the meaning of Section 409A at the time of Executive’s termination (other than due to death), then the Deferred Payments, if any, that are payable within the first six (6) months following Executive’s separation from service, will become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of Executive’s separation from service. All subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit.  Notwithstanding anything herein to the contrary, if Executive dies following Executive’s separation from service, but before the six (6) month anniversary of the separation from service, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of Executive’s death and all other Deferred Payments will be payable in accordance with the payment schedule applicable to each payment or benefit.  Each payment and benefit payable under this Agreement is intended to constitute a separate payment under Section 1.409A-2(b)(2) of the Treasury Regulations.

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iv. Any amount paid under this Agreement that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute Deferred Payments for purposes of clause (i) above.  Any amount paid under this Agreement that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit (as defined below) will not constitute Deferred Payments for purposes of Section 2(c)(i) above.

v. The foregoing provisions are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. The Company and Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition before actual payment to Executive under Section 409A.

3. Limitation on Payments.  In the event that the severance and other benefits provided for in this Agreement or otherwise payable to Executive (i) constitute “parachute payments” within the meaning of Section 280G of the Code, and (ii) but for this Section 3, would be subject to the excise tax imposed by Section 4999 of the Code, then Executive’s benefit under Section 1 and under any such other agreement (including any employment agreement or equity award agreement under the Company’s Amended and Restated 1998 Stock Option Plan, Company’s Second Amended and Restated 2005 Stock Option and Incentive Plan or the Company’s 2015 Equity Incentive Plan) will be either:

a. delivered in full, or

b. delivered as to such lesser extent which would result in no portion of such benefits being subject to excise tax under Section 4999 of the Code as determined by the Firm

whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by Executive on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code.  If a reduction in severance and other benefits constituting “parachute payments” is necessary so that benefits are delivered to a lesser extent, reduction will occur in the following order: (i) reduction of cash payments; (ii) cancellation of accelerated vesting of equity awards; (iii) reduction of employee benefits.  In the event that acceleration of vesting of

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equity award compensation is to be reduced, such acceleration of vesting will be cancelled in the reverse order of the date of grant of Executive’s equity awards.

Unless the Company and Executive otherwise agree in writing, any determination required under this Section 3 will be made in writing by the Company’s independent public accountants immediately prior to the Termination Date or such other person or entity to which the Parties mutually agree (the “Firm”), whose determination will be conclusive and binding upon Executive and the Company.  For purposes of making the calculations required by this Section 3, the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  The Company and Executive will furnish to the Firm such information and documents as the Firm may reasonably request in order to make a determination under this Section.  The Company will bear all costs the Firm may incur in connection with any calculations contemplated by this Section 3.

4. Definition of Terms.  The following terms referred to in this Agreement will have the following meanings:

a. Cause. “Cause” means:

i. Executive’s failure to substantially perform his duties with the Company;

ii. Executive’s failure to substantially follow and comply with the specific and lawful directives of the Board;

iii. Executive’s commission of an act of fraud or dishonesty resulting in actual economic, financial or reputational injury to the Company;

iv. Executive’s engagement in illegal conduct, gross misconduct or an act of moral turpitude involving economic, financial or reputational injury to the Company;

v. Executive’s material violation of any material written policy, guideline, code, handbook or similar document governing the conduct of directors, officers or employees of the Company resulting in actual economic, financial or reputational injury to the Company or an Affiliate;

vi. Executive’s intentional, material violation of any contract or agreement between the Executive and the Company or of any statutory duty owed to the Company; or

vii. Executive’s unauthorized use or disclosure of the Company’s confidential information or trade secrets.

The determination as to whether Executive is being terminated for Cause will be made in good faith by a majority vote of the Board and will be final and binding on Executive.  The foregoing definition does not in any way limit the Company’s ability to terminate Executive’s employment relationship at any time, and the term

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“Company” will be interpreted to include any subsidiary, parent, affiliate or successor thereto, if applicable.

b. Change of Control.“Change of Control” and “Change of Control Period” shall have the meanings ascribed to them in the Change of Control Severance Agreement between Company and Executive effective as of December 30, 2016.

c. COBRA.  “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

d. Disability.  “Disability” means, with respect to Executive, the inability of such Executive to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than twelve (12) months, as provided in Sections 22(e)(3) and 409A(a)(2)(c)(i) of the Code, and will be determined by a majority vote of the Board on the basis of such medical evidence as the Board deems warranted under the circumstances.  In the event of a dispute between the Board and Executive as to whether Executive is disabled, the Company may refer Executive to a licensed practicing physician who is mutually acceptable to Executive and the Company, and Executive agrees to submit to such tests and examination as such physician shall deem appropriate to determine Executive’s capacity to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months.  In such event, Executive and the Company hereby agree that the decision of such physician as to his disability shall be final and binding on both parties.

e. Good Reason.  “Good Reason” means termination of employment following the occurrence of one or more of the following, without Executive’s express written consent:

i. a material reduction in Executive’s annual base salary (which Executive agrees is a reduction of at least 20% of base salary); provided, however that a reduction pursuant to a salary reduction program applicable generally to the Company’s similarly situated employees that does not adversely affect Executive to a greater extent than other similarly situated employees shall not constitute Good Reason;

ii. a material reduction in Executive’s title, authority, duties or responsibilities;

iii. any material breach or material violation of a material provision of this Agreement by the Company;

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iv. any material breach or material violation by the Company of a material provision of Executive’s written offer letter or employment agreement with the Company.

In order for an event to qualify as Good Reason, Executive must provide the Company with written notice of the acts or omissions constituting the grounds for “Good Reason” within forty-five (45) days following the initial existence of the grounds for “Good Reason”, must provide the Company with a reasonable cure period of not less than thirty (30) days following the end of such notice and must resign within forty-five (45) days following the expiration of the Company’s cure period.  For purposes of the “Good Reason” definition, the term “Company” will be interpreted to include any subsidiary, parent, affiliate or successor thereto, if applicable.

f. Section 409A Limit.  “Section 409A Limit” means two (2) times the lesser of: (i) Executive’s annualized compensation based upon the annual rate of pay paid to Executive during the Executive’s taxable year preceding the Executive’s taxable year of Executive’s termination of employment as determined under, and with such adjustments as are set forth in, Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Executive’s employment is terminated.

5. Term; Amendment.  This Agreement will remain in effect while Executive remains employed by, and is actively performing his duties on behalf of, the Company and its successor entities.  Notwithstanding the foregoing, if Executive becomes entitled to benefits under Section 1, the Agreement will not terminate until all of the obligations of the Parties with respect to this Agreement have been satisfied.  No waiver, alteration, or modification of any of the provisions of this Agreement will be binding unless made in writing approved by the Committee and executed by a duly authorized officer of the Company other than the Executive.

6. Successors.

a. The Company’s Successors.  Any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets will assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession.  For all purposes under this Agreement, the term “Company” will include any successor to the Company’s business and/or assets which executes and delivers

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the assumption agreement described in this Section 6(a) or which becomes bound by the terms of this Agreement by operation of law.

b. Executive’s Successors.  The terms of this Agreement and all rights of Executive hereunder will inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

7. Resignation.  Upon the termination of Executive’s employment for any reason, Executive will be deemed to have resigned from all officer and/or director positions held at the Company and its affiliates voluntarily, without any further required action by Executive, as of the end of Executive’s employment and Executive, at the Company’s request, will execute any documents reasonably necessary to reflect Executive’s resignation.

8. Arbitration.

a. Agreement to Arbitrate.  The Company and Executive hereby agree to resolve by final and binding arbitration any and all claims or controversies in any way arising out of, relating to or associated with Executive’s employment with the Company or any of its parents, affiliates, or subsidiaries, or the termination of such employment or any breach of this Agreement. This mutual agreement to arbitrate includes any claims that the Company may have against Executive, or that Executive may have against the Company or against any of its officers, directors, employees, agents, successors, or parent, subsidiary, or affiliated entities so long as such claim is related to Executive’s employment with the Company. The Company and Executive agree that arbitration, as provided for in this Agreement, shall be the exclusive forum for the resolution of any covered dispute between the Parties. The Company and Executive agree that their mutual agreement to arbitrate shall constitute sufficient consideration by each Party for the promises made in this Section 8.

b. Scope of Agreement. The claims covered by this Section 8 include, but are not limited to, claims for breach of any contract or covenant, express or implied; claims for breach of any fiduciary duty or other duty owed to Executive by Company or to Company by Executive; tort claims; claims for wages or other compensation due; claims for discrimination or harassment, including but not limited to discrimination or harassment based on race, sex, pregnancy, religion, national origin, ancestry, age, marital status, physical disability, mental disability, medical condition, or sexual orientation; and claims for violation of any federal, state or other governmental constitution, statute, ordinance or regulation (as originally enacted and as amended), including but not limited to claims under Title VII of the Civil Rights Act of 1964 (“Title VII”), the Fair Labor Standards Act (“FLSA”), the Employee Retirement Income Security Act (“ERISA”), the

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Consolidated Omnibus Budget Reconciliation Act (“COBRA”), and the Family and Medical Leave Act  (“FMLA”) (collectively, “Arbitrable Disputes”).

c. Procedure.  Executive’s request to arbitrate must be directed to the Board at the Company’s principal place of business. A request submitted by the Company shall be sent to the Executive at the Executive’s address as reflected on the Company’s personnel records. Any arbitration shall be conducted before a single arbitrator of JAMS under the Employment Arbitration Rules and Procedures (the “Rules”) of JAMS then in effect. You can obtain a copy of the Rules on the website of JAMS, which is www.jamsadr.com. JAMS has previously maintained the Rules at this URL: http://www.jamsadr.com/rules-employment-arbitration. The arbitration will be conducted in Orange County, California, and Executive and the Company consent to jurisdiction in California and venue in Orange County, California.  If Executive is making a claim, the Company will pay any arbitration filing fee in excess of the amount Executive would have been required to pay (if any) to file the claim in court, and the Company will pay all of the arbitrator’s fees and other arbitration expenses. If the Company is making a claim, the Company will pay all filing fees and all expenses of the arbitration, including the arbitrator’s fees. Each Party shall bear its, his, or her own costs of legal representation; provided, however, if any Party prevails on a claim entitling the prevailing Party to attorneys’ fees and/or costs, the arbitrator may award reasonable fees and/or costs to the prevailing Party in accordance with such claim. The arbitrator shall have the authority to order such discovery by way of deposition, interrogatory, document production, or otherwise, as the arbitrator considers necessary to a full and fair exploration of the issues in dispute, consistent with the expedited nature of arbitration. The arbitrator shall issue a written decision that reveals the essential findings and conclusions on which the decision is based, and the arbitrator’s decision shall be subject to such judicial review as is provided by law. The mutual agreement to arbitrate claims as set forth in this Section 8 is enforceable under and governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (the “FAA”), but if the FAA is held not to apply to this Agreement for any reason, this mutual agreement to arbitrate claims shall be enforced under the laws of the State of California.

d. Administrative Relief.  This Section 8 does not limit Executive’s right to file an administrative charge with the National Labor Relations Board (“NLRB”), the Equal Employment Opportunity Commission (“EEOC”), or any state agency charged with enforcement of fair employment practice laws, but Executive agrees to arbitrate under this Agreement all rights to any form of recovery or relief, including monetary or other damages. This agreement also does not apply to or cover claims for workers’ compensation benefits or compensation, claims for unemployment compensation benefits, or claims based upon an employee pension or benefit plan the terms of which contain an arbitration or other non-judicial

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dispute resolution procedure, in which case the provisions of such plan shall apply.

e. Voluntary Nature of Agreement.  Executive acknowledges and agrees that Executive is executing this Agreement voluntarily and without any duress or undue influence by the Company or anyone else.  Executive further acknowledges and agrees that Executive has carefully read this Agreement and that Executive has asked any questions needed for Executive to understand the terms, consequences and binding effect of Section 8 of this Agreement and fully understands it, including that EXECUTIVE EXPLICITLY WAIVES THE RIGHT TO TRIAL BY JURY.  Finally, Executive agrees that Executive has been provided an opportunity to seek the advice of an attorney of Executive’s choice before signing this Agreement.

9. Miscellaneous Provisions.

a. Waiver.  No provision of this Agreement will be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company (other than Executive).  No waiver by either Party of any breach of, or of compliance with, any condition or provision of this Agreement by the other Party will be considered a waiver of any other condition or provision or of the same condition or provision at another time.

b. Choice of Law.  The validity, interpretation, construction and performance of this Agreement will be governed by the laws of the State of California (with the exception of its conflict of laws provisions).  Any claims or legal actions by one Party against the other arising out of the relationship between the Parties contemplated herein (whether or not arising under this Agreement) will be commenced or maintained in any state or federal court located in the jurisdiction where Executive resides, and Executive and the Company hereby submit to the jurisdiction and venue of any such court.

c. Severability.  The invalidity or unenforceability of any provision or provisions of this Agreement will not affect the validity or enforceability of any other provision hereof, which will remain in full force and effect.

d. Withholding.  All payments made pursuant to this Agreement will be subject to withholding of applicable income, employment and other taxes.

e. Counterparts; Facsimile. This Amendment may be executed in one or more counterparts, all of which when fully executed and delivered by all Parties and taken together shall constitute a single agreement, binding against each of the

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Parties. To the maximum extent permitted by law or by any applicable governmental authority, any document may be signed and transmitted by facsimile, .pdf or other electronic format with the same validity as if it were an ink-signed document. Each signatory below represents and warrants by his or her signature that he or she is duly authorized to execute and deliver this instrument and any other document related to this transaction, thereby fully binding each such Party.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date set forth above.

NextGen Healthcare, Inc.

/s/ John R. Frantz____________________

John R. Frantz By: /s/ Craig A. Barbarosh___________

Name: Craig A. Barbarosh

Title: Vice Chairman

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EXHIBIT A

FORM OF RELEASE OF CLAIMS

This release of claims (this “Agreement”) is made by and between NextGen Healthcare, Inc. (the “Company”), and [●] (“Executive”). The Company and Executive are sometimes collectively referred to herein as the “Parties” and individually referred to as a “Party.”

RECITALS

WHEREAS, Executive signed a Proprietary Information and Inventions Agreement (the “Confidentiality Agreement”) with the Company on [●], 201_;

WHEREAS, Executive signed a Severance Agreement with the Company on [●], 201_ (the “Severance Agreement”), which, among other things, provides for certain severance benefits to be paid to Executive by the Company upon the termination of Executive’s employment without Cause (as defined in the Severance Agreement) or if Executive resigns from such employment for Good Reason (as defined in the Severance Agreement);

WHEREAS, Executive was employed by the Company until [●], 20__, when Executive’s employment was terminated (“Termination Date”);

WHEREAS, in accordance with Section 2 of the Severance Agreement, Executive has agreed to enter into and not revoke a standard release of claims in favor of the Company as a condition to receiving the severance benefits described in the Severance Agreement; and

WHEREAS, the Parties wish to resolve any and all disputes, claims, complaints, grievances, charges, actions, petitions and demands that Executive may have against the Company and any of the Releasees (as defined below), including, but not limited to, any and all claims arising out of or in any way related to Executive’s employment relationship with the Company and the termination of that relationship.

NOW THEREFORE, for good and valuable consideration, including the mutual promises and covenants made herein, the Company and Executive hereby agree as follows:

COVENANTS

1.             Termination. Executive’s employment with the Company terminated on the Termination Date.

2.             Payment of Salary and Receipt of All Benefits. Executive acknowledges and represents that, other than the consideration to be paid in accordance with the terms and conditions of the Severance Agreement, the Company has paid or provided all salary, wages, bonuses, accrued vacation/paid time off, premiums, leaves, housing allowances, relocation costs, interest, severance, outplacement costs, fees, reimbursable expenses, commissions, draws, stock, stock options or other equity awards (including restricted stock unit awards), vesting, and any and all other benefits and compensation due to Executive and that no other reimbursements or compensation are owed to Executive.

3.             Release of Claims. Executive agrees that the consideration to be paid in accordance with the terms and conditions of the Severance Agreement represents settlement in full of all outstanding obligations owed to Executive by the Company and its current and former officers, directors, employees, agents, investors, attorneys, stockholders, administrators, affiliates, benefit plans, plan administrators, insurers, trustees, divisions, and subsidiaries, and predecessor and successor corporations and assigns (collectively, the “Releasees”). Executive, on Executive’s own behalf and on behalf of Executive’s respective heirs, family members, executors, agents, and assigns, hereby and forever releases the Releasees from, and agrees not to sue concerning, or in any manner to institute, prosecute, or pursue, any claim, complaint, charge, duty, obligation, demand, or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Executive may possess against any of the Releasees arising from any omissions, acts, facts, or damages that have occurred up until and including the Effective Date of this Agreement, including, without limitation the following:

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(a)           any and all claims relating to or arising from Executive’s employment relationship with the Company and the termination of that relationship;

(b)           any and all claims relating to, or arising from, Executive’s right to purchase, or actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law;

(c)           any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination; harassment; retaliation; breach of contract, both express and implied; breach of covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; fraud; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; conversion; and disability benefits;

(d)           any and all claims for violation of any federal, state, or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the Rehabilitation Act of 1973; the Americans with Disabilities Act of 1990; the Equal Pay Act; the Fair Labor Standards Act; the Fair Credit Reporting Act; the Age Discrimination in Employment Act of 1967; the Older Workers Benefit Protection Act; the Employee Retirement Income Security Act of 1974; the Worker Adjustment and Retraining Notification Act; the Family and Medical Leave Act; the Sarbanes-Oxley Act of 2002; the [California Family Rights Act]; [the California Labor Code]; [the California Workers’ Compensation Act]; and [the California Fair Employment and Housing Act];

(e)           any and all claims for violation of the federal, or any state, constitution;

(f)            any and all claims arising out of any other laws and regulations relating to employment or employment discrimination;

(g)           any claim for any loss, cost, damage, or expense arising out of any dispute over the non-withholding or other tax treatment of any of the proceeds received by Executive as a result of this Agreement; and

(h)           any and all claims for attorneys’ fees and costs.

Executive agrees that the release set forth in this Section 3 (the “Release”) will be and remain in effect in all respects as a complete general release as to the matters released. The Release does not extend to any severance obligations due Executive under the Severance Agreement. The Release does not release claims that cannot be released as a matter of law. Executive represents that Executive has made no assignment or transfer of any right, claim, complaint, charge, duty, obligation, demand, cause of action, or other matter waived or released by this Section 3. Nothing in this Agreement waives (1) Executive’s rights to indemnification or any payments under any fiduciary insurance policy, if any, provided by any act or agreement of the Company, state or federal law or policy of insurance, or any other indemnification rights to which Executive may be entitled under the Company’s Articles of Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or under any power that the Company may have to indemnify Executive or hold Executive harmless;(2) any vested rights Executive may have under the employee benefit plans, programs, or policies of the Company and its affiliates; or (3) Executive’s right to enforce the terms of this Agreement.

4.             [Acknowledgment of Waiver of Claims under ADEA. Executive acknowledges that Executive is waiving and releasing any rights Executive may have under the Age Discrimination in Employment Act of 1967 (“ADEA”) and that this waiver and release is knowing and voluntary. Executive agrees that this waiver and release does not apply to any rights or claims that may arise under the ADEA after the Effective Date of this Agreement. Executive acknowledges that the consideration given for this waiver and release Agreement is in addition to anything of value to which Executive was already entitled. Executive further acknowledges that Executive has been advised by this writing that (a) Executive should consult with an attorney prior to executing this Agreement; (b)

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Executive has at least 21 days within which to consider this Agreement; (c) Executive has 7 days following the execution of this Agreement by the parties to revoke the Agreement; (d) this Agreement will not be effective until the revocation period has expired; and (e) nothing in this Agreement prevents or precludes Executive from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties or costs for doing so, unless specifically authorized by federal law. In the event Executive signs this Agreement and delivers it to the Company in less than the 21-day period identified above, Executive hereby acknowledges that Executive has freely and voluntarily chosen to waive the time period allotted for considering this Agreement. Executive acknowledges and understands that revocation must be accomplished by a written notification to the Chief Legal Officer of the Company that is received prior to the Effective Date.]

5.             [California Civil Code Section 1542. Executive acknowledges that Executive has been advised to consult with legal counsel and is familiar with the provisions of California Civil Code Section 1542, a statute that otherwise prohibits the release of unknown claims, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

Executive, being aware of California Civil Code Section 1542, agrees to expressly waive any rights Executive may have thereunder, as well as under any other statute or common law principles of similar effect.

OR

Unknown Claims. Executive acknowledges that Executive has been advised to consult with legal counsel and that Executive is familiar with the principle that a general release does not extend to claims that the releaser does not know or suspect to exist in his or her favor at the time of executing the release, which, if known by him or her, must have materially affected his or her settlement with the releasee. Executive, being aware of this principle, agrees to expressly waive any rights Executive may have to that effect, as well as under any other statute or common law principles of similar effect.]

6.             No Pending or Future Lawsuits. Executive represents that Executive has no lawsuits, claims, or actions pending in Executive’s name, or on behalf of any other person or entity, against the Company or any of the other Releasees. Executive also represents that Executive does not intend to bring any claims on Executive’s own behalf or on behalf of any other person or entity against the Company or any of the other Releasees. Executive confirms that Executive has no knowledge of any wrongdoing involving improper or false claims against a federal or state governmental agency, or any other wrongdoing that involves Executive or any other present or former Company employees, including violations of the federal and state securities laws.

7.             Sufficiency of Consideration. Executive hereby acknowledges and agrees that Executive has received good and sufficient consideration for every promise, duty, release, obligation, agreement and right contained in this Release.

8.             Confidential Information. Executive reaffirms and agrees to observe and abide by the terms of the Confidentiality Agreement, specifically including the provisions therein regarding nondisclosure of the Company’s trade secrets and confidential and proprietary information, which agreement will continue in force; provided, however, that as to any provisions regarding solicitation of employees contained in the Confidentiality Agreement that conflict with the provisions regarding solicitation of employees contained in this Agreement, the provisions of this Agreement will control.

9.             Return of Company Property; Passwords and Password-protected Documents. Executive confirms that Executive has returned to the Company in good working order all keys, files, records (and copies thereof), equipment (including, but not limited to, computer hardware, software and printers, wireless handheld devices, cellular phones and pagers), access or credit cards, Company identification, and any other Company-owned property in Executive’s possession or control, provided that Executive may retain his personal copies of (i) his compensation records, (ii) materials distributed to shareholders generally and (iii) any written agreement to which

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Executive is a party. Executive further confirms that Executive has cancelled all accounts for Executive’s benefit, if any, in the Company’s name, including, but not limited to, credit cards, telephone charge cards, cellular phone and/or pager accounts and computer accounts. Executive also confirms that Executive has delivered all passwords in use by Executive at the time of Executive’s termination, a list of any documents that Executive created or of which Executive is otherwise aware that are password-protected, along with the password(s) necessary to access such password-protected documents.

10.          No Cooperation. Subject to Section 12 of this Agreement, Executive agrees that Executive will not knowingly encourage, counsel, or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against any of the Releasees, unless under a subpoena or other court order to do so or as related directly to the ADEA waiver in this Agreement. Executive agrees both to immediately notify the Company upon receipt of any such subpoena or court order, and to furnish, within three (3) business days of its receipt, a copy of such subpoena or other court order. If approached by anyone for counsel or assistance in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints against any of the Releasees, Executive will state no more than that Executive cannot provide any such counsel or assistance.

11.Nondisparagement. Subject to Section 12 of this Agreement, Executive agrees that Executive will not in any way, directly or indirectly, do or say anything at any time which disparages the Company, its business interests or reputation, or that of any of the other Releasees, except as required by law.  

12.Protected Activities. Notwithstanding anything herein to the contrary, nothing in this Agreement or the Confidentiality Agreement shall (a) prohibit Executive from filing a charge with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other comparable federal agency, state agency or securities regulatory body (the “Government Agencies”); (b) prohibit Executive from reporting possible violations of law to an appropriate Government Agency in a confidential manner without notice to the Company as authorized in any whistleblower protection provisions of any federal or state law or regulation; or (c) limit Executive’s lawful opportunity to cooperate with or participate in any administrative proceeding or investigation that may be conducted by a Government Agency. With respect to any information disclosed pursuant to this protected activity exception that may constitute confidential or proprietary information, Executive agrees to take all reasonable precautions to prevent any unauthorized use or disclosure to any parties other than the relevant agency or authority. Except as prohibited by applicable law, rule, or regulation, the payments paid to pursuant to the Severance Agreement will be the sole monetary relief available to Executive, and Executive will not be entitled to recover, and agrees to waive, any additional personal monetary relief that may be sought from or awarded against the Company in the future without regard to who filed or brought such claim. However, this Agreement does not waive Executive’s right to receive an award for original information from any Government Agency, including but not limited to any such award pursuant to Section 21F of the Securities Exchange Act of 1934.

13.No Admission of Liability. Executive understands and acknowledges that this Agreement constitutes a compromise and settlement of any and all actual or potential disputed claims by Executive. No action taken by the Company hereto, either previously or in connection with this Agreement, will be deemed or construed to be (a) an admission of the truth or falsity of any actual or potential claims or (b) an acknowledgment or admission by the Company of any fault or liability whatsoever to Executive or to any third party.

14.Solicitation of Employees. Executive agrees that for a period of 12 months immediately following the Effective Date of this Agreement, Executive will not directly or indirectly (a) solicit, induce, recruit or encourage any of the Company’s employees to leave their employment at the Company or (b) attempt to solicit, induce, recruit or encourage either for Executive or for any other person or entity, any of the Company’s employees to leave their employment.

15.Costs. The Parties will each bear their own costs, attorneys’ fees and other fees incurred in connection with the preparation of this Agreement.

16.Arbitration. THE PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF THE TERMS OF THIS AGREEMENT, THEIR INTERPRETATION, AND ANY OF THE MATTERS HEREIN

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RELEASED, WILL BE SUBJECT TO ARBITRATION PURSUANT TO SECTION 8 OF THE SEVERANCE AGREEMENT.

17.Authority. The Company represents and warrants that the undersigned has the authority to act on behalf of the Company and to bind the Company and all who may claim through it to the terms and conditions of this Agreement. Executive represents and warrants that Executive has the capacity to act on Executive’s own behalf and on behalf of all who might claim through Executive to bind them to the terms and conditions of this Agreement. Each Party warrants and represents that there are no liens or claims of lien or assignments in law or equity or otherwise of or against any of the claims or causes of action released herein.

18.No Representations. Executive represents that Executive has had the opportunity to consult with an attorney, and has carefully read and understands the scope and effect of the provisions of this Agreement. Executive has relied upon any representations or statements made by the Company that are not specifically set forth in this Agreement.

19.Severability. In the event that any provision or any portion of any provision hereof or any surviving agreement made a part hereof becomes or is declared by a court of competent jurisdiction or arbitrator to be illegal, unenforceable, or void, this Agreement will continue in full force and effect without said provision or portion of provision.

20.Entire Agreement. This Agreement represents the entire agreement and understanding between the Company and Executive concerning the subject matter of this Agreement and Executive’s employment with and separation from the Company and the events leading thereto and associated therewith, and supersedes and replaces any and all prior agreements and understandings concerning the subject matter of this Agreement and Executive’s relationship with the Company, with the exception of the Severance Agreement, the Confidentiality Agreement and any of Executive’s written equity compensation agreements with the Company that are not superseded by the Severance Agreement.

21.No Oral Modification. This Agreement may only be amended in writing signed by Executive and the Chairman of the Committee.

22.Governing Law. This Agreement will be governed by the laws of the State of California, without regard for choice-of-law provisions. Executive consents to personal and exclusive jurisdiction and venue in the State of California.

23.Effective Date. [Executive understands that this Agreement will be null and void if not executed by Executive no later the end of the [21^s] calendar day after the Agreement is provided to Executive for consideration. Executive has seven days after that Party signs this Agreement to revoke it. This Agreement will become effective on the eighth (8th ) day after Executive signed this Agreement, so long as it has been signed by the Parties and has not been revoked by Executive before that date (the “Effective Date”).] OR [This Agreement will be effective after it has been signed by both Parties (the “Effective Date”)].

24.Counterparts. This Agreement may be executed in counterparts and by facsimile, and each counterpart and facsimile will have the same force and effect as an original and will constitute an effective, binding agreement on the part of each of the undersigned.

25.Voluntary Execution of Agreement. Executive understands and agrees that Executive executed this Agreement voluntarily, without any duress or undue influence on the part or behalf of the Company or any third party, with the full intent of releasing all of Executive’s claims against the Company and any of the other Releasees. Executive expressly acknowledges that:

(a)Executive has read this Agreement;

(b)Executive has been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of Executive’s own choice or has elected not to retain legal counsel;

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(c)Executive understands the terms and consequences of this Agreement and of the releases it contains; and

(d)Executive is fully aware of the legal and binding effect of this Agreement.

* * * * *

[Signature page to follow]

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below.

COMPANY	NEXTGEN HEALTHCARE, INC.
	By:
	Name:
	Title:
	Dated:
EXECUTIVE	[●], an individual
	(Signature)
	Dated:

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EX-10.2

Exhibit 10.2

CONFIDENTIAL SEPARATION AGREEMENT

AND GENERAL RELEASE OF ALL CLAIMS

This Confidential Separation Agreement and General Release of All Claims (“Separation Agreement”) is entered into by and between Scott E. Bostick (“Employee”) and NextGen Healthcare, Inc., (“Employer”).  The term “Party” or “Parties” as used herein shall refer to Employee, Employer or both, as may be appropriate.

1.Last Day of Employment.  Employee's last day of employment with Employer is January 4^th, 2019 (“Separation Date”).

2.Consideration.  In consideration for signing this Separation Agreement and complying with its terms, and provided Employee does not subsequently revoke this Separation Agreement within the allotted time, Employer agrees:

(a)to pay to Employee FOUR HUNDRED TWENTY_FIVE THOUSAND  DOLLARS ($425,000.00), representing 12 months of salary at Employee’s base rate of pay as of the Separation Date, less lawful deductions, within 14 business days after the expiration of the seven-day revocation period (described in Section 11(f) below);

(b)if Employee properly and timely elects to continue medical coverage under the NextGen Medical Plan – Anthem Blue Cross in accordance with the continuation requirements of the Consolidated Omnibus Budget Reconciliation Act (“COBRA,”) Employer shall pay Employee for the cost of the premium for such coverage beginning on the Separation Date and ending on July 31, 2020.  Thereafter, Employee shall be entitled to elect to continue such COBRA coverage for the remainder of the COBRA period, at Employee’s own expense; and

(c)A pro-rata offboarding bonus of TWO HUNDRED TWENTY THREE THOUSAND ONE HUNDRED TWENTY EIGHT DOLLARS ($223,128.00).

3.No Consideration Absent Execution of this Agreement.  Employee understands and agrees that Employee would not receive the consideration specified in Section 2 above, except for Employee’s execution of this Separation Agreement and the fulfillment of the promises contained herein.

4.General Release, Claims Not Released and Related Provisions.

(a)General Release of Claims.  Employee, individually and on behalf of Employee’s heirs, executors, administrators, representatives, attorneys, successors and assigns knowingly and voluntarily releases and forever discharges Employer, including its parent corporation, affiliates, subsidiaries, divisions, predecessors, insurers, successors and assigns, and their current and former employees, attorneys, officers, directors and agents thereof, both

1

individually and in their business capacities, and their employee benefit plans and programs and the trustees, administrators, fiduciaries and insurers of such plans and programs (collectively, the “Released Parties”), to the full extent permitted by law, of and from any and all claims, known and unknown, asserted and unasserted, which Employee has or may have against the Released Parties as of the date of execution of this Separation Agreement including, but not limited to, any alleged violation of:

• Title VII of the Civil Rights Act of 1964;

• The Civil Rights Act of 1991;

• Sections 1981 through 1988 of Title 42 of the United States Code, as amended;

• The Employee Retirement Income Security Act of 1974 (“ERISA”) (as modified below);

• The Immigration Reform and Control Act;

• The Americans with Disabilities Act of 1990;

• The Age Discrimination in Employment Act of 1967 (“ADEA”);

• The Workers Adjustment and Retraining Notification Act;

• The Occupational Safety and Health Act;

• The Sarbanes-Oxley Act of 2002;

• The Fair Credit Reporting Act;

• The Family and Medical Leave Act;

• The Equal Pay Act;

• The Genetic Information Nondiscrimination Act of 2008;

• California Family Rights Act – Cal. Gov’t Code § 12945.2;

• California Fair Employment and Housing Act – Cal. Gov’t Code § 12900 et seq.;

• California Unruh Civil Rights Act – Cal. Civ. Code § 51 et seq.;

• Statutory Provisions Regarding the Confidentiality of AIDS Information – Cal. Health & Safety Code § 120775 et seq.;

• California Confidentiality of Medical Information Act – Cal. Civ. Code § 56 et seq.;

• California Parental Leave Law – Cal. Lab. Code § 230.7 et seq.;

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• California Apprenticeship Program Bias Law – Cal. Lab. Code § 3070 et seq.;

• California Equal Pay Law – Cal. Lab. Code § 1197.5;

• California Whistleblower Protection Law – Cal. Lab. Code § 1102.5;

• California Military Personnel Bias Law – Cal. Mil. & Vet. Code § 394;

• Statutory Provision Regarding California Family and Medical Leave – Cal. Lab. Code § 233;

• Statutory Provisions Regarding California Electronic Monitoring of Employees – Cal. Lab. Code § 435;

• The California Occupational Safety and Health Act, as amended, California Labor Code § 6300 et seq., and any applicable regulations thereunder;

• California Obligations of Investigative Consumer Reporting Agencies Law – Cal. Civ. Code § 1786.10 et seq.;

• California Political Activities of Employees Law – Cal. Lab. Code § 1101 et seq.;

• California Domestic Violence Victim Employment Leave Law – Cal. Lab. Code § 230.1;

• California Court Leave Law – Cal. Lab. Code § 230;

• Those other provisions of the California Labor Code that lawfully may be released;

• Los Angeles AIDS-Based Discrimination Ordinance, Los Angeles Municipal Ordinance §45.80 et seq.;

• Any other federal, state or local civil or human rights law or any other federal, state or local law, regulation or ordinance;

• Any public policy, contract, tort or common law; or

• Any basis for recovering costs, fees or other expenses including attorneys’ fees incurred in these matters.

(b)Claims Not Released.  Employee is not waiving any rights Employee may have to:  (i) Employee’s own vested accrued employee benefits under the  NextGen Healthcare, Inc. health, welfare or retirement benefit plans as of the Separation Date; (ii) benefits or rights to seek benefits under applicable workers’ compensation (except as to claims under Labor Code sections 132a and 4553) or unemployment insurance or indemnification statutes; (iii) pursue claims which by law cannot be waived by signing this Separation Agreement; (iv) enforce this Separation Agreement; or (v) challenge the validity of this Separation Agreement.

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(c)Government Agencies.  Nothing in this Separation Agreement prohibits or prevents Employee from filing a charge with or participating, testifying or assisting in any investigation, hearing, whistleblower action or other proceeding before any federal, state or local government agency (e.g. EEOC, NLRB, SEC, etc.), nor does anything in this Separation Agreement preclude, prohibit or otherwise limit, in any way, Employee’s rights and abilities to contact, communicate with, report matters to or otherwise participate in any whistleblower program administered by any such agencies.  However, to the maximum extent permitted by law, Employee agrees that if such an administrative claim is made, Employee shall not be entitled to recover any individual monetary relief or other individual remedies.

(d)Collective/Class Action Waiver.  If any claim is not subject to release, to the extent permitted by law, Employee waives any right or ability to be a class or collective action representative or to otherwise participate in any putative or certified class, collective or multi-party actionor proceeding based on such a claim in which Employer or any of the other Released Parties identified in this Separation Agreement is a party.

5.Waiver of California Civil Code section 1542.  To effect a full and complete general release as described above, Employeeexpressly waives and relinquishes all rights and benefits of section 1542 of the Civil Code of the State of California, and does so understanding and acknowledging the significance and consequence of specifically waiving section 1542.  Section 1542 of the Civil Code of the State of California states as follows:

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

Thus, notwithstanding the provisions of section 1542, and to implement a full and complete release and discharge of the Released Parties, Employee expressly acknowledges this Separation Agreement is intended to include in its effect, without limitation, all claims Employee does not know or suspect to exist in Employee’s favor at the time of signing this Separation Agreement, and that this Separation Agreement contemplates the extinguishment of any such claims.  Employee warrants Employee has read this Separation Agreement, including this waiver of California Civil Code section 1542, and that Employee has consulted with or had the opportunity to consult with counsel of Employee’s choosing about this Separation Agreement and specifically about the waiver of section 1542, and that Employee understands this Separation Agreement and the section 1542 waiver, and so Employee freely and knowingly enters into this Separation Agreement.  Employee further acknowledges that Employee later may discover facts different from or in addition to those Employee now knows or believes to be true regarding the matters released or described in this Separation Agreement, and even so Employee agrees that the releases and agreements contained in this Separation Agreement shall remain effective in all respects notwithstanding any later discovery of any different or additional facts.  Employee expressly assumes any and all risk of any mistake in connection with the true facts involved in the matters, disputes or controversies released or described in this Separation Agreement or with regard to any facts now unknown to Employee relating thereto.

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6.Acknowledgements and Affirmations.

(a)Employee affirms that Employee has not filed or caused to be filed any claim, complaint or action against any of the Released Parties in any forum or form, and that Employee presently is not a party to any claim, complaint or action against any of the Released Parties in any forum or form.

(b)Employee further affirms that Employee hasbeen paid or has received all compensation, wages, bonuses, commissions and benefits which are due and payable as of the date of execution of this Separation Agreement.

(c)Employee also affirms that Employee has no known workplace injuries or occupational diseases and that Employee has been granted or has not been denied any leave to which Employee was entitled under the Family and Medical Leave Act, the California Family Rights Act or disability accommodation laws.

(d)Employee further affirms that Employee has not been retaliated against for reporting any allegations of wrongdoing by Employer or any of its officers, directors or employees including, but not limited to, allegations of corporate fraud.

(e)Employee affirms that all of Employer’s decisions regarding Employee’s pay and benefits through the date of Employee’s execution of this Separation Agreement were not discriminatory based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, mental and physical disability, medical condition, age, pregnancy, denial of medical and family care leave, pregnancy disability leave or any other classification protected by law.  

7.Limited Disclosure.

(a)Employee agrees that Employee will not publicize or disclose or cause or knowingly permit or authorize the publicizing or disclosure of the fact of this Separation Agreement, the contents of this Separation Agreement or of the negotiations leading up to it (hereafter collectively referred to as “Confidential Information”) to any person, firm, organization or entity of any and every type, public or private, for any reason, at any time, without the prior written consent of Employer unless otherwise compelled by operation of law.  The Parties acknowledge their intention that the provisions of this Section 78 create no liability for disclosures made: (i) prior to Employee’s execution of this Separation Agreement; (ii) by persons from public information released prior to Employee’s execution of this Separation Agreement; (iii) pursuant to Section 13(b) below to enforce the terms of this Separation Agreement; or (iv) as otherwise compelled by operation of law.

(b)The foregoing notwithstanding, Employee acknowledges the confidentiality provisions of this Section 7 constitute a material inducement to Employer to enter into this Separation Agreement and represents that Employee has not directly or indirectly disclosed any Confidential Information to any third party prior to Employee’s execution of this Separation Agreement.

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(c)Employee is permitted to disclose Confidential Information to Employee’s spouse, tax advisors or attorneys with whom Employee chooses to consult regarding Employee’s consideration of this Separation Agreement.  However, each such person to whom Employee discloses Confidential Information shall be bound to the confidentiality provisions hereof and any disclosure of Confidential Information by any such person so informed shall constitute a breach by Employee of Section 7(a) above.  Employee also is permitted to disclose Confidential Information to any federal, state or local government agency.

8.Return of Company Property/Information; Pre-Existing Agreements.

(a)Within seven calendar days of Employee’s execution of this Separation Agreement, Employee will return all of Employer’s documents and property currently in Employee’s possession including, but without limitation, any and all services work, notes, reports, files, memoranda, records, cardkey passes, door and file keys, safe combinations, laptop computer, computer access codes, disks and instructional or personnel manuals, and other physical or personal property that Employee received or prepared or helped to prepare in connection with Employee’s employment with Employer (“Company Property”).

(b)Employee acknowledges and agrees that in the course of Employee’s employment with Employer, Employee has acquired: (i) confidential information including without limitation information received by Employerfrom third parties, under confidential conditions; (ii) othertechnical, product, business, financial or development information from Employer, the use or disclosure of which reasonably might be construed to be contrary to the interest of Employer; or (iii) any other proprietary information or data, including but not limited to customer lists, which Employee may have acquired during Employee’s employment (hereafter collectively referred to as “Company Information”).  Employee understands and agrees that such Company Information was disclosed to Employee in confidence and for use only by Employer.  Employee understands and agrees that Employee: (i) will keep such Company Information confidential at all times, (ii) will not disclose or communicate Company Information to any third party, and (iii) will not make use of Company Information on Employee’s own behalf, or on behalf of any third party.  In view of the nature of Employee’s employment and the nature of Company Information Employee received during the course of Employee’s employment, Employee agrees that any unauthorized disclosure to third parties of Company Information or other violation, or threatened violation, of this Separation Agreement would cause irreparable damage to the confidential or trade secret status of Company Information and to Employer, and that, therefore, Employer, and each person constituting Employer hereunder, shall be entitled to an injunction prohibiting Employee from any such disclosure, attempted disclosure, violation or threatened violation.

(c)The Parties acknowledge and agree that the terms and conditions set forth in the Agreement for Protection of Company Information signed by Employee on March 4, 2016, shall in no way be altered, modified, enhanced, diminished or amended by this Separation Agreement, and that such agreement stands alone, operates individually, and shall be enforced separately without reference to or effect by the Separation Agreement.

6

(d)The undertakings set forth in this Section 8 shall survive the termination of this Separation Agreement or other arrangements contained in this Separation Agreement.

(e)Employee also affirms that Employee is in possession of all of Employee’s property that Employee had at Employer’s premises and that Employer is not in possession of any of Employee’s property.

9.Nonadmission of Wrongdoing.  The Parties agree that neither this Separation Agreement nor the furnishing of the consideration for this Separation Agreement shall be deemed or construed at any time for any purpose as an admission by the Released Parties of wrongdoing or evidence of any liability or unlawful conduct of any kind.

10.Job References.  Employee shall direct all individuals inquiring about Employee’s employment with Employer to Employer’s Human Resources Department, which will follow Employer’s policy by responding with only Employee’s last position and dates of employment,except that this provision shall not apply to any request from a prospective employer who provides a release signed by Employee pursuant to the Fair Credit Reporting Act or any state counterpart.

11.Consideration and Revocation Periods - Notice.

(a)Employee acknowledges that Employee already has attained the age of 40 and understands that this is a full release of all existing claims whether currently known or unknown including, but not limited to, claims for age discrimination under the Age Discrimination in Employment Act.

(b)Employee further acknowledges that Employee has been advised to consult with an attorney of Employee’s own choosing before signing this Separation Agreement, in which Employee waives important rights, including those under the Age Discrimination in Employment Act.

(c)By executing this Separation Agreement, Employee also acknowledges that Employee has been afforded at least 21 calendar days to consider the meaning and effect of this Separation Agreement and to discuss the contents and meaning of this Separation Agreement, as well as the alternatives to signing this Separation Agreement, with an attorney of Employee’s choosing, and has done so.  Employee agrees that the 21-day consideration period began on the date this Separation Agreement first was delivered to Employee and that if Employer changes any of the terms of the offer contained in this Separation Agreement (whether the changes are material or not), the 21-day consideration period shall not be restarted but shall continue without interruption.

(d)Employee understands that the releases contained in this Separation Agreement do not extend to any rights or claims that Employee has under the Age Discrimination in Employment Act that first arise after execution of this Separation Agreement.

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(e)If Employee signs this Separation Agreement before the 21-day consideration period expires, the seven-day revocation period (described in Section 11(f) below) immediately shall begin.  If Employee signs this Separation Agreement before the 21-day consideration period expires, Employee agrees that Employee knowingly and voluntarily has accepted the shortening of the 21-day consideration period and that Employer has not promised Employee anything or made any representations that are not contained in this Separation Agreement.  In addition, if Employee signs this Separation Agreement before the 21-day consideration period expires, Employee acknowledges and affirms that Employer has not threatened to withdraw or alter the offer contained in this Separation Agreement prior to the expiration of the 21-day consideration period.

(f)Employee may revoke this Separation Agreement for a period of seven calendar days following the date Employee executes this Separation Agreement.Any revocation during this period must be submitted in writing and state, “I hereby revoke my acceptance of our Separation Agreement and General Release of All Claims.”  The revocation must be personally delivered to Donna Greene, EVP of Human Resources or his/her designee, or mailed to Donna Greene, EVP of Human Resources, 18111 Von Karman Ave., Irvine, Ca. 92612 and postmarked within seven calendar days after Employee’s execution of this Separation Agreement.  The foregoing notwithstanding, this Separation Agreement shall not become effective and enforceable until the seven-day revocation period has expired.

12.Liens and Attorneys’ Fees/Indemnification.

(a)Employee acknowledges that Employee solely is responsible for any liens made in connection with any services performed on Employee’s behalf by any attorney or other third parties.

(b)Employee acknowledges and agrees that Employee will indemnify the Released Parties for any and all costs any of them incur as a result of any claims made by any attorneys or other third parties to recover monies from the amounts payable to Employee under this Separation Agreement.

13.Governing Law and Interpretation.

(a)This Separation Agreement shall be governed and conformed in accordance with the laws of the State of California provided, however, that parol evidence shall not be admissible to alter, vary or supplement the term of this Separation Agreement.  Should any provision of this Separation Agreement be declared illegal or unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, excluding the general release language, such provision immediately shall become null and void, leaving the remainder of this Separation Agreement in full force and effect.

(b)In the event of a breach of any provision of this Separation Agreement, any Party may institute an action specifically to enforce any term or terms of this Separation Agreement or seek damages for breach.  However, the Party instituting such an action must take steps to file this Separation Agreement or any documents setting forth the terms of this Separation Agreement with the court under seal.  In an action to enforce any term or terms of this

8

Separation Agreement or to seek damages for breach of this Separation Agreement, the prevailing party in that action shall be entitled to recover reasonable attorney’s fees.

14.Amendment.  This Separation Agreement may not be modified, altered or changed except in writing and signed by both Parties wherein specific reference is made to this Separation Agreement.

15.Miscellaneous.

(a)This Separation Agreement may be signed in counterparts, both of which shall be deemed an original, but both of which, taken together shall constitute the same instrument.  A signature made on a faxed or electronically mailed copy of the Separation Agreement or a signature transmitted by facsimile or electronic mail shall have the same effect as the original signature.

(b)The section headings used in this Separation Agreement are intended solely for convenience of reference and shall not in any manner amplify, limit, modify or otherwise be used in the interpretation of any of the provisions hereof.

(c)This Separation Agreement was the result of negotiations between the Parties.In the event of vagueness, ambiguity or uncertainty, this Separation Agreement shall not be construed against the Party preparing it, but shall be construed as if both Parties prepared it jointly.

(d)If Employee or Employer fails to enforce this Separation Agreement or to insist on performance of any term, that failure does not mean a waiver of that term or of the Separation Agreement.  The Separation Agreement remains in full force and effect anyway.

16.Entire Agreement.  This Separation Agreement sets forth the entire agreement between the Parties hereto, and fully supersedes any prior agreements or understandings between the Parties hereto [, except those specifically identified in Section 9(c), which are incorporated herein by reference].Employee acknowledges that Employee has not relied on any representations, promises or agreements of any kind made to Employee in connection with Employee’s decision to accept this Separation Agreement, except for those set forth in this Separation Agreement.

EMPLOYEE UNDERSTANDS AND ACKNOWLEDGES THAT EMPLOYEE HAS AT LEAST 21 CALENDAR DAYS TO REVIEW THIS SEPARATION AGREEMENT PRIOR TO EXECUTION OF THIS SEPARATION AGREEMENT.  EMPLOYEE FURTHER UNDERSTANDS AND ACKNOWLEDGES THAT ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS SEPARATION AGREEMENT DO NOT RESTART OR AFFECT IN ANY MANNER THE ORIGINAL 21 CALENDAR DAY CONSIDERATION PERIOD.

HAVING ELECTED TO EXECUTE THIS SEPARATION AGREEMENT, TO FULFILL THE PROMISES AND TO RECEIVE THE CONSIDERATION SET FORTH IN SECTION 2 ABOVE, EMPLOYEE FREELY AND KNOWINGLY, AND

9

AFTER DUE CONSIDERATION, ENTERS INTO THIS SEPARATION AGREEMENT INTENDING TO WAIVE, SETTLE AND RELEASE ALL CLAIMS EMPLOYEE HAS OR MIGHT HAVE AGAINSTTHE RELEASED PARTIES AS OF THE DATE OF EXECUTION OF THIS SEPARATION AGREEMENT.

IN WITNESS WHEREOF, the Parties hereto knowingly and voluntarily executed this Separation Agreement as of the date set forth below:

Executed on January 6, 2019_____ /s/ Scott E. Bostick__                     ______

SCOTT E. BOSTICK

NEXTGEN HEALTHCARE, INC.

Executed on January 21, 2019_____ By:/s/ Jeffrey D. Linton___________________

JEFFREY D. LINTON

EVP, General Counsel & Secretary

10

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

January 23, 2019

NextGen Healthcare, Inc. Reports Fiscal 2019 Third Quarter Results

IRVINE, Calif. – (BUSINESS WIRE) – NextGen Healthcare, Inc. (NASDAQ: NXGN) announced today its fiscal 2019 third quarter ended December 31, 2018 operating results.

"We are pleased with our year to date bookings growth of over 20%, our attrition rate ticking down sequentially in the quarter and the progress we have made in terms of new client wins. Our fully integrated solution continues to resonate with both existing and new clients, we continue to improve client satisfaction, and we are managing our expenses and investments effectively.  Based on our progress, we remain confident that we are on track to meet our multi-year growth targets,” commented Rusty Frantz, president and chief executive officer of NextGen Healthcare.

Fiscal 2019 Third Quarter Highlights

As a result of the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic 606 (“ASC 606”), the GAAP comparisons below compare fiscal 2019 third quarter results under ASC 606 to the fiscal 2018 third quarter results under the legacy revenue guidance (“ASC 605”). A reconciliation of fiscal 2019 third quarter results from ASC 606 to ASC 605 can be found in the tables at the end of the press release.

On a GAAP basis, revenue for the fiscal 2019 third quarter was $130.9 million compared to $131.7 million a year-ago. On a pro forma basis under ASC 605, revenue for the fiscal 2019 third quarter was $130.3 million. 

On a GAAP basis, net income for the fiscal 2019 third quarter was $4.8 million, compared with net income of $1.5 million in the fiscal 2018 third quarter. On a pro forma basis under ASC 605, net income for the fiscal 2019 third quarter was $3.8 million.

On a GAAP basis, fully diluted net income per share was $0.07 in the fiscal 2019 third quarter compared with earnings per share of $0.02 for the same period a year ago.  On a non-GAAP basis, fully diluted earnings per share for the fiscal 2019 third quarter was $0.20 versus $0.15 reported in the third quarter a year ago. On a pro forma non-GAAP basis, under ASC 605, fully diluted earnings per share for the fiscal 2019 third quarter was $0.18.

Fiscal 2019 Financial Outlook

The company’s updated outlook for fiscal 2019 is as follows:

• Revenue of between $525 million and $535 million, unchanged from the previous range, but with a bias towards the lower end.

• Non-GAAP EPS of between $0.72 and $0.76, from the previous range of $0.70 to $0.74.

Conference Call Information

NextGen Healthcare will host a conference call to discuss its fiscal 2019 third quarter results on Wednesday, January 23, 2019 at 5:00 PM ET (2:00 PM PT). Shareholders and interested participants may listen to a live broadcast of the conference call by dialing 866-750-8947 or 720-405-1352 for international callers, and referencing participant code 3208647 approximately 15 minutes prior to the call. A live webcast of the conference call will be available on the investor relations section of the company’s web site and an audio file of the call will also be archived for 90 days at investor.nextgen.com. After the conference call, a replay will be available until January 27, 2019 and can be accessed by dialing 800-585-8367 or 404-537-3406 for international callers, and referencing participant code 3208647.

About NextGen Healthcare, Inc

NextGen Healthcare is enabling the transformation of ambulatory care by providing a range of software, services, and analytics solutions to medical and dental group practices. The company's portfolio delivers foundational capabilities to empower physician success, enrich the patient care experience, and enable the transition to value-based healthcare. Visit www.nextgen.comfor additional information.

Media Contact:
NextGen Healthcare
Cynthia Ragland, (949) 255-2600 x75416
cragland@nextgen.com

or

Investor Contact:

Westwicke Partners

Bob East or Asher Dewhurst

Westwicke Partners

443-213-0500

SAFE HARBOR PROVISIONS FOR FORWARD-LOOKING STATEMENTS

This news release may contain forward-looking statements within the meaning of the federal securities laws, including but not limited to, statements regarding future events, developments in the healthcare sector and regulatory framework, 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, net income, and earnings per share). Risks and uncertainties exist that may cause the results to differ materially from those set forth in these forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements and additional risks and uncertainties are set forth in Part I, Item A of our most recent Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q, including but not limited to: 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; impact of incentive payments under The American Recovery and Reinvestment Act on sales and the ability of the Company to meet continued certification requirements; uncertainties related to the future impact of U.S. tax reform; the impact of governmental and regulatory agency investigations; 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; changes of accounting estimates and assumptions used to prepare the prior periods' financial statements; disruptions caused by acquisitions of companies, products, or technologies; and general economic conditions. A significant portion of the Company's quarterly sales of software product licenses and computer hardware is concluded in the last month of a 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. These forward-looking statements speak only as of the date hereof. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

USE OF NON-GAAP FINANCIAL MEASURES

This news release contains certain non-GAAP (Generally Accepted Accounting Principles) financial measures, which are provided only as supplemental information. Investors should consider these non-GAAP financial measures only in conjunction with the comparable GAAP financial measures. These non-GAAP measures are not in accordance with or a substitute for U.S. GAAP. Pursuant to the requirements of Regulation G, the Company has provided a reconciliation of non-GAAP financial measures to the most directly comparable financial measure in the accompanying financial tables. Other companies may calculate non-GAAP measures differently than NextGen Healthcare, Inc., which limits comparability between companies. The Company believes that its presentation of non-GAAP diluted earnings per share provides useful supplemental information to investors and management regarding the Company's financial condition and results. The presentation of non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. The Company calculates non-GAAP diluted earnings per share by excluding net acquisition costs, amortization of acquired intangible assets, amortization of deferred debt issuance costs, restructuring costs, net securities litigation defense costs and settlement, share-based compensation, and other non-run-rate expenses from GAAP income before provision for income taxes. The Company utilizes a normalized non-GAAP tax rate to provide better consistency across the interim reporting periods within a given fiscal year by eliminating the effects of non-recurring and period-specific items, which can vary in size and frequency, and which are not necessarily reflective of the Company’s longer-term operations.

The normalized non-GAAP tax rate applied to fiscal year 2019 was 22.0%, compared to 30.5% for fiscal year 2018, which was updated as a result of the enactment of the new tax reform legislation on December 22, 2017. The determination of this rate is based on the consideration of both historic and projected financial results. The Company may adjust its non-GAAP tax rate as additional information becomes available and in conjunction with any other significant events occur that may materially affect this rate, such as merger and acquisition activity, changes in business outlook, or other changes in expectations regarding tax regulations.

The Company’s future period guidance in this release includes adjustments for items not indicative of the Company’s core operations. Such adjustments are generally expected to be of a nature similar to those adjustments applied to the Company’s historic GAAP financial results in the determination of the Company’s non-GAAP diluted earnings per share. Such adjustments, however, may be affected by changes in ongoing assumptions and judgments as to the items that are excluded in the calculation of non-GAAP adjusted net income and adjusted diluted earnings per share, as described in this release. The exact amount and probable significance of these adjustments, including net acquisition costs, net securities litigation defense costs, and other non-run-rate expenses, are not currently determinable without unreasonable efforts, but may be significant. These items cannot

be reliably quantified or forecasted due to the combination of their historic and expected variability. It is therefore not practicable to reconcile this non-GAAP guidance to the most comparable GAAP measures.

NEXTGEN HEALTHCARE, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

	Three Months Ended December 31,						Nine Months Ended December 31,
	2018			2017			2018			2017
Revenues:
Recurring	$	117,446		$	118,997		$	353,770		$	357,616
Software, hardware, and other non-recurring		13,421			12,718			40,618			37,628
Total revenues		130,867			131,715			394,388			395,244
Cost of revenue:
Recurring		47,997			49,347			143,322			145,504
Software, hardware, and other non-recurring		6,576			6,323			20,752			18,310
Amortization of capitalized software costs and acquired intangible assets		7,098			5,964			20,566			15,744
Total cost of revenue		61,671			61,634			184,640			179,558
Gross profit		69,196			70,081			209,748			215,686
Operating expenses:
Selling, general and administrative		41,304			43,563			120,169			127,517
Research and development costs, net		20,682			20,645			61,181			60,161
Amortization of acquired intangible assets		1,027			1,956			3,316			6,015
Restructuring costs		—			130			—			130
Total operating expenses		63,013			66,294			184,666			193,823
Income from operations		6,183			3,787			25,082			21,863
Interest income		44			15			113			36
Interest expense		(720	)		(733	)		(2,219	)		(2,250	)
Other income (expense), net		(227	)		(41	)		384			(48	)
Income before provision for income taxes		5,280			3,028			23,360			19,601
Provision for income taxes		456			1,487			2,794			6,134
Net income	$	4,824		$	1,541		$	20,566		$	13,467
Net income per share:
Basic	$	0.07		$	0.02		$	0.32		$	0.21
Diluted	$	0.07		$	0.02		$	0.32		$	0.21
Weighted-average shares outstanding:
Basic		64,637			63,706			64,308			63,287
Diluted		64,776			63,708			64,499			63,296

NEXTGEN HEALTHCARE, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

(Unaudited)

	December 31, 2018			March 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	30,054		$	28,845
Restricted cash and cash equivalents		7,389			2,373
Accounts receivable, net		84,360			84,962
Contract assets		11,281			—
Inventory		129			180
Income taxes receivable		6,061			8,122
Prepaid expenses and other current assets		18,505			17,180
Total current assets		157,779			141,662
Equipment and improvements, net		23,169			26,795
Capitalized software costs, net		33,468			26,318
Deferred income taxes, net		6,417			9,219
Contract assets, net of current		3,608			—
Intangibles, net		57,911			74,091
Goodwill		218,771			218,875
Other assets		29,620			18,795
Total assets	$	530,743		$	515,755
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	3,611		$	4,213
Contract liabilities		50,449			54,079
Accrued compensation and related benefits		24,179			27,910
Income taxes payable		47			73
Other current liabilities		41,610			48,317
Total current liabilities		119,896			134,592
Contract liabilities, net of current		—			1,173
Deferred compensation		5,564			6,086
Line of credit		27,000			37,000
Other noncurrent liabilities		12,913			13,494
Total liabilities		165,373			192,345
Commitments and contingencies
Shareholders' equity:
Common stock
$0.01 par value; authorized 100,000 shares; issued and outstanding 64,704 and 63,995 shares at December 31, 2018 and March 31, 2018, respectively		647			640
Additional paid-in capital		258,311			244,462
Accumulated other comprehensive loss		(1,281	)		(400	)
Retained earnings (1)		107,693			78,708
Total shareholders' equity		365,370			323,410
Total liabilities and shareholders' equity	$	530,743		$	515,755

⁽¹⁾ Includes cumulative effect adjustment related to the adoption of ASC 606.

NEXTGEN HEALTHCARE, INC.

NON-GAAP FINANCIAL MEASURES

(In thousands, except per share data)

RECONCILIATION OF NON-GAAP DILUTED EARNINGS PER SHARE

	Three Months Ended December 31,					Nine Months Ended December 31,
	2018			2017		2018			2017
Income before provision for income taxes - GAAP	$	5,280		$	3,028	$	23,360		$	19,601
Non-GAAP adjustments:
Acquisition costs, net		109			387		2,058			1,569
Amortization of acquired intangible assets		5,315			6,083		16,180			17,351
Amortization of deferred debt issuance costs		177			269		532			807
Restructuring costs		—			130		—			130
Securities litigation defense costs and settlement, net of insurance		29			152		(5,407	)		716
Share-based compensation		4,698			3,453		11,949			8,585
Other non-run-rate expenses*		1,340			—		3,979			263
Total adjustments to GAAP income before provision for income taxes:		11,668			10,474		29,291			29,421
Income before provision for income taxes - Non-GAAP		16,948			13,502		52,651			49,022
Provision for income taxes		3,729			4,118		11,584			14,952
Net income - Non-GAAP	$	13,219		$	9,384	$	41,067		$	34,070
Diluted net income per share - Non-GAAP	$	0.20		$	0.15	$	0.64		$	0.54
Weighted-average shares outstanding (diluted):		64,776			63,708		64,499			63,296
RECONCILIATION OF NON-GAAP DILUTED EARNINGS PER SHARE UNDER ASC 605
Income before provision for income taxes - Non-GAAP		16,948					52,651
Adjustments due to adoption of ASC 606		(1,610	)				(5,699	)
Income before provision for income taxes - Non-GAAP under ASC 605		15,338					46,952
Provision for income taxes		3,374					10,329
Net income - Non-GAAP under ASC 605	$	11,964				$	36,623
Diluted net income per share - Non-GAAP under ASC 605	$	0.18				$	0.57
Weighted-average shares outstanding (diluted):		64,776					64,499
* Other non-run-rate expenses for the three and nine months ended December 31, 2018 consist primarily of severance and other employee-related costs not related to core operations. Other non-run-rate expenses for the nine months ended December 31, 2017 consist primarily of professional services costs not related to core operations.

We adopted Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic 606 (“ASC 606”) and all related amendments as of April 1, 2018 using the modified retrospective method for all contracts not completed as of the date of adoption. Results for reporting periods beginning after April 1, 2018 are presented under ASC 606, while prior period comparative information has not been adjusted and continue to be reported under the accounting standards in effect for those prior periods.

The impact of the adoption of ASC 606 on our consolidated statements of net income for the three and nine months ended December 31, 2018, assuming that the previous revenue recognition guidance had been in effect, is summarized as follows:

	Three Months Ended December 31, 2018
	As reported under			Adjustments due to			As disclosed under
	ASC 606			adoption of ASC 606			ASC 605
Revenues:
Subscription services	$	30,035		$	(1,557	)	$	28,478
Support and maintenance		39,714			(1,620	)		38,094
Managed services		24,251			2,646			26,897
Electronic data interchange and data services		23,446			(26	)		23,420
Total recurring revenues		117,446			(557	)		116,889
Software license and hardware		9,217			(325	)		8,892
Other non-recurring services		4,204			358			4,562
Total software, hardware, and other non-recurring revenues		13,421			33			13,454
Total revenue		130,867			(524	)		130,343
Total cost of revenue		61,671			36			61,707
Gross profit		69,196			(560	)		68,636
Operating expenses:
Selling, general and administrative		41,304			1,050			42,354
Research and development costs, net		20,682			—			20,682
Amortization of acquired intangibles		1,027			—			1,027
Total operating expenses		63,013			1,050			64,063
Income from operations		6,183			(1,610	)		4,573
Interest and other income, net		(903	)		—			(903	)
Income before provision for income taxes		5,280			(1,610	)		3,670
Provision for income taxes		456			(553	)		(97	)
Net income	$	4,824		$	(1,057	)	$	3,767

	Nine Months Ended December 31, 2018
	As reported under			Adjustments due to			As disclosed under
	ASC 606			adoption of ASC 606			ASC 605
Revenues:
Subscription services	$	87,618		$	(5,509	)	$	82,109
Support and maintenance		120,556			(3,789	)		116,767
Managed services		74,048			8,746			82,794
Electronic data interchange and data services		71,548			(111	)		71,437
Total recurring revenues		353,770			(663	)		353,107
Software license and hardware		26,013			(1,168	)		24,845
Other non-recurring services		14,605			464			15,069
Total software, hardware, and other non-recurring revenues		40,618			(704	)		39,914
Total revenue		394,388			(1,367	)		393,021
Total cost of revenue		184,640			130			184,770
Gross profit		209,748			(1,497	)		208,251
Operating expenses:
Selling, general and administrative		120,169			4,202			124,371
Research and development costs, net		61,181			—			61,181
Amortization of acquired intangibles		3,316			—			3,316
Total operating expenses		184,666			4,202			188,868
Income from operations		25,082			(5,699	)		19,383
Interest and other income, net		(1,722	)		—			(1,722	)
Income before provision for income taxes		23,360			(5,699	)		17,661
Provision for income taxes		2,794			(1,550	)		1,244
Net income	$	20,566		$	(4,149	)	$	16,417