Published:
Ahmed Hussein Discloses His Nomination of Six Director Candidates for the Quality Systems Board
Proposes Slate of Highly Qualified and Experienced Nominees Dedicated to Improving Operating Performance and Enhancing Corporate Governance
Ahmed Hussein today announced that he intends
to solicit proxies relating to the 2008 annual meeting of stockholders of
Quality Systems, Inc. (NASDAQ: QSII) to elect six highly qualified and
experienced individuals, including himself, to the Quality Systems Board of
Directors. Dr. Hussein detailed his intention in a written notice that is
being delivered to Quality Systems today and which will be made publicly
available when it is filed with the Securities and Exchange Commission.
Dr. Hussein beneficially owns 4,654,100 shares of Quality Systems common
stock representing approximately 17% of Quality Systems' issued and
outstanding shares, based upon the amount of shares indicated as being
outstanding as of June 1, 2008 in Quality Systems' Annual Report on Form
10-K for its fiscal year ended March 31, 2008. Dr. Hussein is currently
one of the independent members of the Quality Systems Board of Directors
and has served on the Quality Systems Board since 1999. He has been a
stockholder of Quality Systems since 1982. Dr. Hussein believes that his
nominees will strengthen Quality Systems' Board by adding independent
directors with a stockholder orientation, a broad range of relevant
experiences, and a firm commitment to improving the operating performance
and corporate governance of Quality Systems.
"For over a quarter of a century, I have been involved with Quality Systems
and committed to its success. As a major long-term stockholder, my
interests are aligned with virtually all stockholders. I believe that a
more independent Board of Directors will enhance both investor confidence
in Quality Systems and the ability of the Board to conduct its business
free from any undue or inappropriate influences or the appearance that such
influences are being exerted. However, it has become apparent to me that
these urgently needed corporate governance reforms can only be successfully
adopted and implemented after significant changes are made to the current
membership and leadership of Quality Systems' Board of Directors,
particularly given that its leadership is wedded to, and has a vested stake
in, the preservation of the status quo," said Ahmed Hussein. "In recent
months, I have attempted on a number of occasions to engage the Board's
Chairman in a constructive dialogue concerning what I believe to be the
urgent need to have the Company upgrade its corporate governance practices
so that they are more in line with those advocated by leading corporate
governance groups like RiskMetrics ISS Governance Services. Not
surprisingly, my efforts have been blocked and frustrated at every turn,
making this proxy contest not only inevitable but necessary if the
interests of stockholders to be protected.
"As directors of a reconstituted Board, my nominees will take immediate
action to upgrade the Company's corporate governance practices and
implement a new strategy for growing worldwide revenues and increasing
returns for investors. My nominees are successful and experienced
professionals who will provide fresh thinking, fresh perspectives and fresh
ideas. My fellow Quality Systems stockholders should be entitled to the
opportunity to vote for an alternative slate of director nominees.
"I believe that just the presence of an alternative slate of director
nominees will benefit all stockholders and will increase the likelihood
that meaningful actions will be taken by the Company to benefit Quality
Systems and its stockholders."
Ahmed Hussein's six director nominees, including himself, form a highly
qualified, experienced and dedicated team that is committed to positioning
Quality Systems for long-term growth and profitability, delivering value
for stockholders and improving corporate governance. If elected, they will
be actively engaged in guiding Quality Systems' senior management, and
holding them accountable for adhering to the highest standard of corporate
governance and for delivering consistent revenue growth and profitability.
In addition to the election of his nominees, Ahmed Hussein is also
notifying Quality Systems that he will also be soliciting proxies in
support of a stockholder proposal to replace the definition of independent
director contained in the Quality Systems Bylaws with the definition of
independent outside director advocated by RiskMetrics ISS Governance
Services and a stockholder proposal intended to prevent the current Board
members from seeking to entrench themselves and frustrate the will of the
stockholders by, among other things, creating obstacles to providing
Quality Systems stockholders with the choice and opportunity to vote for
Dr. Hussein's nominees.
Ahmed Hussein also announced today that, in connection with his intended
solicitation of proxies to be used at the 2008 annual meeting of
stockholders, he has retained the law firm of Blank Rome LLP as his legal
advisor and The Altman Group, Inc. as his proxy solicitor.
Nominees Fully Committed to Driving Stockholder Value and Improving
Corporate Governance
Dr. Hussein has assembled the following slate of highly qualified and
experienced nominees who, if elected, will provide Quality Systems with the
strong leadership and strategic direction necessary to drive and enhance
stockholder value and improve corporate governance. They are fully
committed to serving in the best interests of all stockholders. The
nominees beneficially own, in the aggregate, 4,654,100 shares of Quality
Systems' common stock, representing approximately 17% of the issued and
outstanding shares, based upon the amount of shares reported to be issued
and outstanding in Quality Systems' Annual Report on Form 10-K for its
fiscal year ended March 31, 2008.
Nominees that are current directors of Quality Systems:
-- Ahmed Hussein - Dr. Hussein is, and has been since 1999, a director of
Quality Systems, and has been a stockholder of Quality Systems since 1982.
Dr. Hussein is the Chairman of the Board of Directors of National
Investment Company, Cairo, Egypt. Dr. Hussein founded National Investment
Company in 1996 and has served as a member of its Board of Directors since
its inception and as Chairman since 1999. Dr. Hussein served as a Senior
Vice President of Dean Witter from 1993 to 1996 and, earlier, served as an
investment banker with various firms, including L.F. Rothschild, Prudential
Bache Securities, Oppenheimer & Co., Smith Barney and Shearson Lehman
Hutton. Dr. Hussein is a director of the Six of October University, and the
Chairman of the Board of Directors of Nobria Agriculture, a publicly held
company. Dr. Hussein holds a Bachelors degree in Electrical Engineering
from Cairo University, a Masters of Science degree from the American
University of Cairo, a Postgraduate degree in Statistics from Cairo
University, a Masters of Science degree in Mathematics from the Polytechnic
Institute of New York, and a Doctorate degree in Electrical Engineering
from the Polytechnic Institute of New York. Over the years, Dr. Hussein has
made numerous contributions to professional journals and is the recipient
of numerous awards of recognition, including a Fulbright fellowship and a
gold medal from Cairo University.
-- Ibrahim Fawzy - Dr. Fawzy is, and has been since 2005, a director of
Quality Systems. Dr. Fawzy is an emeritus professor of Mechanical
Engineering at Cairo University in Egypt. He is also the President of Fawzy
Consultancy, which he founded in 1999 and which does work in the fields of
industry and investment in Egypt and the Arab world. Dr. Fawzy received his
Bachelors degree in Mechanical Engineering in 1962 from Cairo University
and his PhD in 1968 from University College London in England. Throughout
his academic career, Dr. Fawzy has taught many courses in Mechanical
Engineering at Cairo University as well as teaching for two years at the
University of London. Between 1979 and 1983 he served as Cultural Attaché
at the Egyptian Embassy in London. His research papers have been published
in leading specialized periodicals including the Proceedings and
Philosophical Transactions of the Royal Society in London. Dr. Fawzy also
served as the Cabinet Minister of Industry and Mineral Wealth in the
Egyptian Government from 1993-1996. In this post, he had the top
responsibility for all projects and plans of the Egyptian Government in
industry and Mineral Wealth. From 1996-1999 he was appointed as the
Chairman and CEO of the General Authority for Investment and Free Zones
where he oversaw all private sector companies in Egypt including Egyptian
and foreign companies. At present, in addition to serving as a director of
QSI, Dr. Fawzy is a director of Olympic Group for Financial Investments,
Egyptians Abroad Investment and Development Co. and Egyptians Abroad for
Portfolio Management, all publicly-held companies based in Egypt. Dr. Fawzy
also serves as the Chairman of Egyptians Co. for Housing, Development &
Reconstruction, a publicly-held company based in Egypt.
-- Edwin Hoffman - Dr. Hoffman is, and has been since 2006, a director of
Quality Systems. Dr. Hoffman is currently a self-employed engineering
consultant. In 1972, he co-founded Osborne-Hoffman, Inc., a security
industry company where he was President and Chief Executive Officer until
its acquisition in 2002 by the General Electric Company. The company's
principal products are central station receivers for monitoring alarm
systems. Osborne-Hoffman is now a General Electric brand. From 2002 to
2007, Dr. Hoffman was President of O-H Inc., an engineering consulting firm
and consultant to General Electric. Prior to joining Osborne-Hoffman, Dr.
Hoffman held engineering positions at Bell Laboratories and Litton
Industries and a financial position at the Hanover Bank. Dr. Hoffman holds
a Bachelors of Science Degree in Electrical Engineering from City College,
New York, a Masters of Science Degree in Electrical Engineering and a
Doctorate Degree in Electrical Engineering from the Polytechnic Institute
of Brooklyn. He is the author of 10 technical papers and is the named
inventor on two patents filed with the U.S. Patent and Trademark Office.
Non-incumbent nominees:
-- Murray Brennan, M.D. - Dr. Brennan is Emeritus Chairman of the
Memorial Sloan-Kettering Cancer Center's Department of Surgery and
previously served as Chairman from 1985 to 2007. Dr. Brennan has lectured
and been a visiting professor throughout the world and has authored more
than 800 scientific papers. He has served as director of the American Board
of Surgery, Chairman of the American College of Surgeons Commission on
Cancer, President of the Society of Surgical Oncology, President of the
American Surgical Association, the oldest and most prestigious surgical
association in the United States, and Vice President of the American
College of Surgeons. Dr. Brennan is currently a member of the National
Academy of Sciences. He is the recipient of numerous honors and medals for
his leadership of surgery and oncology worldwide. He serves on the Board of
Directors of Ziopharm Oncology, Inc., a publicly-held biopharmaceutical
company engaged in the development and commercialization of a diverse, risk-
sensitive portfolio of in-licensed cancer drugs to address unmet medical
needs. Dr. Brennan also serves on the Board of Directors of the de Beaumont
Foundation.
-- Thomas R. DiBenedetto - Mr. DiBenedetto is the president, founder of
principal stockholder of Boston International Group, Inc., an investment
management firm, since 1983; president, founder and principal stockholder
of Junction Investors Ltd., an investment management firm, since 1992. Mr.
DiBenedetto serves on the Board of Directors of Alexander's Inc., a New
York based Real Estate Investment Trust and several private companies. He
is also a limited partner of the Boston Red Sox Baseball Club. He was
formerly a director of NWH, Inc. whose principal subsidiary, Electronic
Network Systems, Inc. is a medical claims processing company. NWH was sold
to Ingenix in 2006. Mr. DiBenedetto was also a director of Voice Signal
Technologies, Inc., a voice recognition business which was sold to Nuance
Communications, Inc. in 2007. Mr. DiBenedetto also serves as Chairman of
Jefferson Waterman International, a Washington D.C. based business
intelligence and government relations firm; a director of ProSecure, a
Middle-East based security firm; and two Moscow based entities: Infotecs
International, an internet security firm; and Athena Holdings, LLC, a real
estate and mining company. Mr. DiBenedetto is a member of the Board of
Trustees of: Trinity College in Hartford Connecticut, Boston Biomedical
Research Institute, Canterbury School in Ft. Myers, Florida, Kents Hill
School in Kents Hill, Maine, the Nahant Preservation Trust in Nahant
Massachusetts and the Ted Williams Museum in Florida. In addition, he is an
incorporator of the Perkins School for the Blind, Massachusetts General
Hospital, and The Joslin Diabetes Center. He has also served on the
Leadership Council at the John F. Kennedy School of Government's Center for
Business and Government at Harvard University. Mr. DiBenedetto was
previously employed by Morgan, Stanley & Co., Salomon Brothers Inc. and
Allen & Company, all investment banking firms located in New York City. Mr.
DiBenedetto holds a Bachelor's degree in Economics, with honors, from
Trinity College and an M.B.A. from the University of Pennsylvania's Wharton
School of Business. He has also served as a research fellow at the
Massachusetts Institute of Technology.
-- Joseph D. Stilwell - Mr. Stilwell is a private investment manager, and
since 1993, has overseen the Stilwell Group of Funds, a series of private
limited partnerships organized to invest in securities. Mr. Stilwell is on
the board of directors of American Physicians Capital, Inc., a publicly-
held provider of medical professional liability insurance, and serves as
chairman of the compensation committee and member of the executive,
investment, and mergers and acquisition committees of such company. Mr.
Stilwell received a Bachelor of Science degree in Economics from The
Wharton School of the University of Pennsylvania.
IMPORTANT INFORMATION
Ahmed Hussein intends to make a preliminary filing with the Securities and
Exchange Commission of a proxy statement and an accompanying proxy card to
be used to solicit proxies in connection with Quality Systems' 2008 annual
meeting of stockholders. Stockholders are advised to read the proxy
statement and other documents related to the solicitation of proxies from
stockholders of Quality Systems for use at the 2008 annual meeting when
they become available because they will contain important information,
including information relating to the participants in such proxy
solicitation. When completed, a definitive proxy statement and a form of
proxy will be mailed to Quality Systems' stockholders and will be
available, along with other relevant documents, at no charge, at the
Securities and Exchange Commission's website at http://www.sec.gov.
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