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)
August 11, 2011
QUALITY SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
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CALIFORNIA
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001-12537
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95-2888568
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer
Identification Number)
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18111 Von Karman, Suite 700
Irvine, California 92612
(Address of Principal Executive Offices)
(949) 255-2600
(Registrant’s Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
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TABLE OF CONTENTS
Item 1.01 Entry into a Material Definitive Agreement
On August 11, 2011, the Board of Directors (the “Board”) of Quality Systems, Inc. (“QSI”)
approved a standard form of Restricted Stock Unit Agreement (“RSU Agreement”), which QSI will enter
into with each of its outside directors in accordance with the terms of QSI’s 2012 Director
Compensation Program (“2012 Program”). The RSU Agreement sets forth certain terms and conditions
in connection with the Board’s grant of restricted stock units under the 2012 Program, including:
(i) the number of restricted stock units granted to the grantee, (ii) vesting periods for the
restricted stock units, and (iii) a one-year restriction, beginning from the date a restricted
stock unit vests, on the grantee’s ability to sell, transfer, assign, pledge or otherwise encumber
or dispose of the vested restricted stock unit (or the underlying shares of the Company’s common
stock represented by the restricted stock unit). The RSU Agreement is attached to this report as
Exhibit 10.1, which exhibit is incorporated herein by reference.
Item 5.07 Submission of Matters to a Vote of Security Holders
On August 11, 2011, QSI held its 2011 Annual Shareholders’ Meeting. QSI shareholders were
asked to consider and vote upon the following five proposals:
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1.
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To elect nine director nominees to serve as directors of QSI;
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2.
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To approve the QSI Second Amended and Restated 2005 Stock Option and Incentive Plan;
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3.
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To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered
public accounting firm for the fiscal year ending March 31, 2012;
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4.
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To conduct an advisory vote on the compensation of our named executive officers; and
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5.
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To conduct an advisory vote on the frequency of an advisory vote on the compensation of
our named executive officers.
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The results of the shareholder votes were as follows:
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Proposal No. 1
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For
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Withheld
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Election of Directors
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Craig A. Barbarosh
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20,150,136
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42,898
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Murray F. Brennan, M.D.
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20,149,357
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43,677
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George H. Bristol
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20,151,073
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41,961
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Patrick B. Cline
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19,693,471
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499,563
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Ahmed D. Hussein
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14,921,091
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5,271,943
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D. Russell Pflueger
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20,150,666
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42,368
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Steven T. Plochocki
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20,007,160
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185,874
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Sheldon Razin
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19,672,158
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520,876
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Maureen A. Spivack
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20,156,860
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36,174
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Proposal No. 2
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For
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Against
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Abstain
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Approve Second Amended and Restated 2005
Stock Option and Incentive Plan
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19,393,795
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732,920
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66,319
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Proposal No. 3
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For
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Against
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Abstain
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Ratification of the appointment of
PricewaterhouseCoopers LLP as QSI’s
independent public accountants for
the fiscal year ending March 31, 2012
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27,154,017
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113,349
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12,106
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Proposal No. 4
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For
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Against
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Abstain
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Advisory vote on the compensation of
our named executive officers.
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20,047,183
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112,364
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33,487
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Proposal No. 5
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1 Year
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2 Year
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3 Year
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Abstain
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Advisory vote on the
frequency of an advisory
vote on the compensation
of our named executive
officers.
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19,247,240
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29,878
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898,181
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17,735
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As a result of the shareholder vote:
(i) with respect to Proposal No. 1, Craig Barbarosh, Murray Brennan, M.D., George Bristol,
Patrick Cline, Ahmed Hussein, Russell Pflueger, Steven Plochocki, Sheldon Razin and Maureen Spivack
were elected to serve as directors.
(ii) Proposal No. 2 was approved.
(iii) Proposal No. 3 was approved.
(iv) the advisory vote on Proposal No. 4, the compensation of our named executive officers,
represented the following voting percentages of votes cast:
For: 99.27%; Against: 0.55% ; and Abstain: 0.16% .
The QSI Compensation Committee will take this advisory vote into consideration as part of its
compensation review and analysis.
(v) the advisory vote on Proposal No. 5, the frequency of an advisory vote on the compensation
of our named executive officers, represented the following voting percentages of votes cast:
One Year: 95.31%; Two Years: 0.14%; Three Years: 4.44%; Abstain: 0.08%.
Based on the results of this advisory vote, and consistent with the Board’s recommendation, the
Board has determined to hold an advisory vote on executive compensation every year until the next
required advisory vote on the frequency of future advisory votes on executive compensation.
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Item 9.01
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Financial Statements and Exhibits
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Exhibit 10.1
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Form of Restricted Stock Unit Agreement
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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: August 15, 2011
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QUALITY SYSTEMS, INC.
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By:
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/s/ Paul Holt
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Paul Holt
Chief Financial Officer
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INDEX TO EXHIBITS
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Exhibit
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Number
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Description
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Exhibit 10.1
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Form of Restricted Stock Unit Agreement
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Exhibit 10.1
QUALITY SYSTEMS, INC.
OUTSIDE DIRECTOR’S
RESTRICTED STOCK UNIT AGREEMENT
GRANTED UNDER THE QUALITY SYSTEMS, INC.
SECOND AMENDED AND RESTATED 2005 STOCK OPTION AND INCENTIVE PLAN
THIS OUTSIDE DIRECTOR’S RESTRICTED STOCK UNIT AGREEMENT (this “
Agreement
”), dated and
effective as of August 11, 2011 (the “
Grant Date
”), by and between Quality Systems, Inc., a
California corporation (the “
Company
”), and
[__________]
(“
Grantee
”), is entered
into as follows:
WHEREAS, Grantee is an outside director of the Company; and
WHEREAS, the Company has established the Quality Systems, Inc. Second Amended and Restated
2005 Stock Option and Incentive Plan (the “
Plan
”), a copy of which has previously been
provided to Grantee; and
WHEREAS, the Compensation Committee (the “
Committee
”) of the Board of Directors of the
Company has established a compensation program (the “
Program
”) for the outside directors of
the Company that includes the grant of restricted stock units evidencing the right to receive an
equal number of shares in the Company’s common stock (“
Common Stock
”); and
WHEREAS, under the terms of the Program, Grantee shall be granted restricted stock units
pursuant to this Agreement and subject to the restrictions stated below.
NOW, THEREFORE, the parties hereby agree as follows:
1.
Grant of Restricted Stock Units
. Subject to the terms and conditions of this
Agreement and the Plan, the Company hereby grants to Grantee
[_________]
restricted stock units
(“
Restricted Stock Units
”) evidencing the equivalent number of shares of Common Stock. As
used herein, a “Restricted Stock Unit” is a non-voting unit of measurement which is deemed for
bookkeeping purposes to be equivalent in value to one outstanding share of Common Stock of the
Company. The Restricted Stock Units shall be used solely as a device for the determination of any
payment to eventually be made to the Grantee if and when such Restricted Stock Units vest and
become earned pursuant to
Section 2
below. The Restricted Stock Units create no fiduciary
duty to the Grantee and shall create only a contractual obligation on the part of the Company to
make payments, subject to vesting and the other terms and conditions hereof. The Restricted Stock
Units shall not be treated as property or as a trust fund of any kind. No assets have been secured
or set aside by the Company with respect to this grant and, if amounts become payable to the
Grantee pursuant to this Agreement, the Grantee’s rights with respect to such amounts shall be no
greater than the rights of any general unsecured creditor of the Company.
2.
Vesting Schedule
. The Restricted Stock Units shall vest in two equal annual
installments, each
on the next two annual meetings of shareholders
(and each referred to
herein as a “
Vesting Date
”) subject to earlier vesting as set forth in
Section 3
,
below. Payment of vested Restricted Stock Units shall be made as soon as administratively
practicable after vesting. Settlement will be made by payment in shares of Common Stock in
accordance with the Plan. Restricted Stock Units that are earned and vested pursuant to this
Agreement shall be paid in an equivalent number of whole shares of Common Stock (with any
fractional Restricted Stock Units credited in respect of the Restricted Stock Units that are paid
rounded down to the nearest whole number of shares of Common Stock).
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3.
Restrictions
. No portion of the Restricted Stock Units, the shares issued pursuant
to the Restricted Stock Units, or rights granted hereunder may be sold, transferred, assigned,
pledged or otherwise encumbered or disposed of by Grantee during the period beginning on the
Vesting Date of that portion of the Restricted Stock Units and ending the day prior to the one year
anniversary of the Vesting Date of that portion of the Restricted Stock Units. In the event of a
meeting of shareholders immediately following which a director that previously received Restricted
Stock Units under the Program is no longer a member of the Company’s Board, then any unvested
Restricted Stock Units, or shares issued pursuant to the Restricted Stock Units held by such
director, and restricted by this
Section 3,
shall immediately vest and become
transferrable.
4.
Shareholder Rights
. Until the Vesting Date, Grantee shall not have the rights of a
shareholder with respect to the Restricted Stock Units.
5.
Taxes
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(a) Grantee hereby acknowledges that he or she has reviewed with his or her own tax
advisors the tax consequences of receiving the Restricted Stock Units. Grantee represents
to the Company that he or she is relying solely on such advisors and not on any statements
or representations of (i) the Company, (ii) its officers, directors or employees, or (iii)
its or their respective agents or representatives.
(b) Grantee shall be liable for any and all taxes, including withholding taxes, arising
out of this grant of Restricted Stock Units. The Company shall not be required to deliver
any Restricted Stock Units or to recognize any purported transfer of the Restricted Stock
Units or its underlying shares until all applicable withholding obligations are satisfied.
Grantee is ultimately liable and responsible for all taxes owed by Grantee in connection
with the Restricted Stock Units, regardless of any action the Company takes with respect to
any tax withholding obligations that arise in connection with the Restricted Stock Units.
The Company makes no representation or undertaking regarding the treatment of any tax
withholding in connection with the grant, issuance or settlement of the Restricted Stock
Units (or its underlying shares) or the subsequent sale or transfer of any of the shares
underlying the Restricted Stock Units. The Company does not commit and is under no
obligation to structure the Restricted Stock Units award or program to reduce or eliminate
Grantee’s tax liability.
6.
Securities Law Compliance
. The Company will use its reasonable commercial efforts
to assure that the shares issued pursuant to the Restricted Stock Units are registered under
federal securities laws. However, no shares underlying the Restricted Stock Units will be issued
pursuant to Grantee’s award if such issuance would otherwise constitute a violation of any
applicable federal or state securities laws or regulations or the requirements of The NASDAQ Global
Select Market or any stock exchange or other market on which the Common Stock is then quoted or
listed for trading. The inability of the Company to obtain approval from any regulatory body
deemed necessary by the Company for the lawful issuance of any shares underlying the Restricted
Stock Units hereunder shall defer the Company’s obligation with respect to the issuance of such
shares until such approval has been obtained. Grantee understands Grantee’s responsibilities to
report the grant and future disposition of the Restricted Stock Units and its underlying shares
under the applicable provisions of the Securities Exchange Act of 1934, as amended.
7.
Miscellaneous
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(a) The grant of Restricted Stock Units or another award to Grantee under the Plan in
any one year, or at any time, does not obligate the Company to make a grant in any future
year or
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in any given amount and should not create an expectation that the Company might make a
grant in any future year or in any given amount.
(b) The Company shall not be required (i) to transfer on its books any shares issued
pursuant to the Restricted Stock Units that have been sold or transferred in violation of
any of the provisions set forth in this Agreement or in the Plan, or (ii) to treat as owner
of such shares or to accord the right to vote as such owner or to pay dividends to any
transferee to whom such shares shall have been so transferred.
(c) The parties agree to execute such further instruments and to take such action as
may reasonably be necessary to carry out the intent of this Agreement.
(d) Any notice required or permitted hereunder shall be given in writing and shall be
deemed effectively given upon delivery to Grantee at Grantee’s address then on file with the
Company.
(e) This Agreement shall not be construed so as to grant Grantee any right to remain as
a director of or consultant to the Company.
(f) The parties agree that neither the Company nor any of its affiliates shall have any
further obligation to Grantee relating to the grant of stock or other equity-based incentive
compensation except as stated herein and under the terms of the Program.
(g) This Agreement and the Plan constitute the entire agreement of the parties with
respect to the subject matter hereof. This Agreement may not be amended except (i) with the
consent of the Committee and the Board; and (ii) by a written instrument duly executed by
the Company and Grantee.
(h) This Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their permitted heirs, personal representatives, successors and assigns. The
terms of this Agreement shall in all respects be subject to the terms of the Plan and the
Program. In the event of a conflict between the terms of this Agreement and the Plan and/or
Program, the terms of the Plan and/or Program (as the case may be) shall control. In the
event of a conflict between the terms of the Plan and the Program, the terms of the Plan
shall control. In accordance with the Plan, Grantee hereby agrees to accept as binding,
conclusive and final all decisions and interpretations of the Committee or the Board of
Directors upon any questions arising under the Plan or this Agreement.
(i) The interpretation, performance and enforcement of this Agreement shall be governed
by the laws of the State of California without resort or reference to the conflicts-of-laws
rules of that or any other state.
(j) This Agreement shall not in any way affect the right of the Company to adjust,
reclassify, reorganize or otherwise make changes in its capital or business structure or to
merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business
or assets.
8.
Remaining Terms
. The remaining terms and conditions of Grantee’s award are
governed by the Plan, and Grantee’s award is also subject to all interpretations, amendments,
rules, regulations and decisions that may from time to time be adopted under the Plan.
[
signature page follows
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IN WITNESS WHEREOF, the undersigned have executed this Outside Director’s Restricted Stock
Units Agreement effective as of the date first set above.
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COMPANY:
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QUALITY SYSTEMS, INC.,
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a California corporation
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By:
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/s/ James J. Sullivan, Secretary
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James J. Sullivan, Secretary
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Address:
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18111 Von Karman Avenue, Suite 700
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Irvine, CA 92612
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Facsimile #: 949-255-2610
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Email: pholt@qsii.com (Corporate Secretary)
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I, the undersigned Grantee, hereby acknowledge and accept the foregoing terms and conditions
of the Restricted Stock award evidenced hereby. I also acknowledge and agree that the foregoing
sets forth the entire understanding between the Company and me regarding my entitlement to receive
the shares of Restricted Stock subject to such award and supersedes all prior oral and written
agreements on that subject.
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GRANTEE:
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(signature of Grantee)
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[NAME]
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