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Form 8-K QUALITY SYSTEMS, INC For: Aug 16

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August 18, 2016 2:20 PM EDT



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 16, 2016
______________
QUALITY SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA
(State or other jurisdiction of
incorporation)
001-12537
(Commission File Number)
95-2888568
(IRS Employer
Identification Number)

18111 Von Karman, Suite 800
Irvine, California 92612
(Address of Principal Executive Offices)
(949) 255-2600
(Registrant’s Telephone Number, Including Area Code)
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
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))




Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Adoption of Director Compensation Program
On August 16, 2016, the Board of Directors (the “Board”) of Quality Systems, Inc. (the “Company”) approved the Company’s fiscal year 2017 Director Compensation Program, effective immediately. This program was approved upon the recommendation of the Company’s Compensation Committee. A description of the 2017 Director Compensation Program is filed as Exhibit 10.1 to this current report on Form 8-K and incorporated herein by reference.

Item 5.07    Submission of Matters to a Vote of Security Holders.
On August 16, 2016, the Company held its 2016 Annual Meeting of Shareholders (the “Annual Meeting”). The Company's shareholders were asked to consider and vote upon the following four proposals:
1.
To elect nine persons to serve as directors of the Company;
2.
To conduct an advisory vote to approve the compensation of our named executive officers (i.e., “Say-on-Pay”);
3.
To conduct an advisory vote to approve the frequency of an advisory vote to approve the compensation of our named executive officers (i.e., “Say-on-Frequency”); and
4.
To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending March 31, 2017.
The results of the shareholder votes are set forth below.

The Company’s shareholders elected the following nominees to serve as directors of the Company for one year terms expiring at the Company’s 2017 Annual Meeting of Shareholders: Craig A. Barbarosh, George H. Bristol, Rusty Frantz, James C. Malone, Jeffrey H. Margolis, Morris Panner, D. Russell Pflueger, Sheldon Razin and Lance E. Rosenzweig. The tabulation of voting results for the election of directors is indicated below:
Proposal No. 1
 
For
 
Withheld
Election of Directors
 
 
 
 
Craig A. Barbarosh
 
46,527,198
 
1,559,751
George H. Bristol
 
47,397,745
 
689,204
Rusty Frantz
 
47,327,256
 
759,693
James C. Malone
 
47,400,151
 
686,798
Jeffrey H. Margolis
 
47,393,421
 
693,528
Morris Panner
 
47,399,549
 
687,400
D. Russell Pflueger
 
47,233,665
 
853,284
Sheldon Razin
 
47,454,939
 
632,010
Lance E. Rosenzweig
 
47,298,273
 
788,676
There were 10,601,463 broker non-votes for Proposal No. 1.





The Company’s shareholders approved a resolution approving on a non-binding, advisory basis, the compensation of the Company’s named executive officers as disclosed in the proxy statement for the Annual Meeting by the votes indicated below (i.e., “Say-on-Pay”):
Proposal No. 2
 
For
 
Against
 
Abstain
 
Broker
Non-Votes
Advisory vote approving the compensation of our named executive officers
 
40,555,110
 
7,451,056
 
80,783
 
10,601,463

The Company’s shareholders approved a resolution approving on a non-binding, advisory basis, one year as the frequency of an advisory vote on the compensation of the Company’s named executive officers by the votes indicated below (i.e., “Say-on-Frequency”). In light of such vote, the Company has determined to include in its proxy materials a shareholder advisory vote on the compensation of executives every one year, until the next required vote on the frequency of shareholder votes on the compensation of executives:
Proposal No. 3
 
1 Year
 
2 Years
 
3 Years
 
Abstain
 
Broker Non-Votes
Advisory vote approving the frequency of an advisory vote on the compensation of our named executive officers
 
43,508,334
 
37,731
 
4,456,501
 
84,383
 
10,601,463

The Company’s shareholders ratified the appointment of PricewaterhouseCoopers LLP as the Company’s independent auditors for the fiscal year ending March 31, 2017 by the votes indicated below:
Proposal No. 4
 
For
 
Against
 
Abstain
 
 
Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent public accountants for the fiscal year ending March 31, 2017
 
58,607,065
 
58,186
 
23,161
 
 





Item 9.01
Financial Statements and Exhibits.
(d) Exhibits
Exhibit No.
 
Description
10.1
 
Description of 2017 Director Compensation Program
 







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 17, 2016
QUALITY SYSTEMS, INC.


By: /s/ James A. Arnold
        James A. Arnold
         Executive Vice President, Chief Financial Officer





EXHIBITS ATTACHED TO THIS
CURRENT REPORT ON FORM 8-K
Exhibit No.
 
Description
 
 
 
10.1
 
Description of 2017 Director Compensation Program
 
 
 
 
 
 
 
 
 





Quality Systems, Inc. 2017 Director Compensation Program

 
Tier 0

Employee Director
Tier 1

Non-Employee Director (Base)
Tier 2

Nominating & Governance Committee Chairperson (Additional)
Tier 3

Compensation Committee Chairperson (Additional)
Tier 4

Audit Committee Chairperson (Additional)
Tier 5

Board Vice Chairperson (Additional)
Tier 6

Board Chairperson and Chairperson Emeritus (Additional)
Annual Cash Retainer Compensation
$0
$90,000
$12,000
$15,000
$20,000
$35,000
$40,000
Value of Restricted Stock
$0
$145,000
--
--
--
$40,000
$40,000
FY 2017 Director Compensation Program Terms:
1.
Meeting attendance is expected to be at or near a 100% level.
2.
In addition to annual cash retainer compensation, each non-employee director is to be paid a $2,000 cash fee each Nominating & Governance Committee, Compensation Committee and Audit Committee meeting attended.
3.
Pay Tiers: Tier 0 is for directors who are full-time employees of the Company. Tier 1 is the base compensation for non-employee directors. Tier 2 is additional compensation for the Nominating and Governance Committee Chairperson. Tier 3 is additional compensation for the Compensation Committee Chairperson. Tier 4 is additional compensation for the Audit Committee Chairperson. Tier 5 is additional compensation for the Board Vice Chairperson. Tier 6 is additional compensation for the Board Chairperson and Chairman Emeritus.
4.
In addition to the Company’s standing committees (i.e., Nominating and Governance, Compensation, and Audit) that meet on a regularly scheduled basis, the Company has a Special Transaction Committee that meets only as needed. Special Transaction Committee members receive no additional annual cash retainer compensation. The Special Transaction Committee chairperson receives a $5,000 cash fee per meeting attended, and other members receive a $3,000 cash fee per meeting attended.
5.
Each director is to be awarded restricted shares of the Company’s common stock (“Restricted Stock”) upon the date of the director’s election or re-election to the Board and equivalent to the value amounts set forth in the table above. The shares of Restricted Stock will be valued at the price of the Company’s common stock at the close of trading on the date of the director’s election or re-election to the Board. The Restricted Stock will be issued according to the standard form of the Company’s approved Amended and Restated Stock Agreement and pursuant to the Company’s then-current Equity Incentive Plan and will carry a restriction requiring that the Restricted Stock vest on the date that is the earlier of (a) one year from the date of grant, or (b) the date of the Company’s next annual meeting of shareholders following the director’s election or re-election to the Board. Vesting of the Restricted Stock will be accelerated in the event of the director’s death or disability, or upon a change of control of the Company. The Restricted Stock will be granted on a pro-rata basis for directors appointed to serve less than a full year.
6.
Each director must own a minimum number of shares of the Company’s common stock (to include common stock purchased on the open market, unvested Restricted Stock, and deferred shares) valued in an amount equal to at least four times the value of the director’s annual cash retainer compensation. Current directors must satisfy this ownership requirement within five years of adoption of the Company’s fiscal year 2017 Director Compensation Plan. New directors must satisfy this ownership requirement within five years of their election to the Board.
7.
Base compensation shall be paid quarterly.


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