UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934 (Amendment No.___)
| Filed by the Registrant |
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| Filed by a Party other than the
Registrant |
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Check
the
appropriate box:
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Preliminary
Proxy Statement
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Confidential,
For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to §240.14a-12
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QUALITY
SYSTEMS, INC.
(Name
of Registrant as Specified In Its Charter)
AHMED
HUSSEIN
IBRAHIM
FAWZY
EDWIN
HOFFMAN
MURRAY
BRENNAN, M.D.
THOMAS
R. DIBENEDETTO
JOSEPH
D. STILWELL
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment
of Filing Fee (Check the appropriate box):
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computed on table below per Exchange Act Rules 14a-6(i)(l) and
0-11.
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of each class of securities to which transaction
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(2) |
Aggregate
number of securities to which transaction
applies:
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Per
unit price or other underlying value of transaction computed pursuant
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Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is
calculated and state how it was
determined):
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transaction:
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0-11(a)(2) and identify the filing for which the offsetting fee was
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previously. Identify the previous filing by registration statement
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Previously Paid:
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No.:
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QSI's
Proxy Statement Is Filled with Inaccuracies
(Shareholder
Letter #1)
August
13, 2008
Dear
Fellow QSI Shareholder:
The
company filed its preliminary proxy with the SEC on July 16, 2008. On July
22,
2008, I provided written comments to the SEC staff regarding statements in
the
July 16 Materials that I believed to be inaccurate or incomplete. The Company
filed revised preliminary proxy materials on July 28, 2008, reflecting changes
in a number of the areas I had commented on. Then on August 4th, the Company
filed its final definitive proxy statement which it is mailing to all
shareholders.
Below
are
excerpts from Management’s definitive proxy statement with my
comments.
| 1. |
(Page
1) The company’s Rosy
Picture
states:
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"Over
the
five years ended March 31, 2008:
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·
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our
revenues grew by 241%, representing a compounded annual growth rate
of
27.8%;
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·
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our
net income increased by 470%, representing a compounded annual growth
rate
of 41.6%;
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·
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our
earnings per share increased by 414%, representing a compounded annual
growth rate of 38.7%; and
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·
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our
stock price dramatically outperformed both the NASDAQ Composite Index
and
the Nasdaq Computer and Data Processing Index, while we returned
$3.625
per share to investors in dividends
|
Over
the
year ended March 31, 2008, while many companies, including those in our
industry, encountered performance problems, our revenues, net income and
earnings per share grew by 19%, 21% and 19%, respectively, and we achieved
a net
profit margin of 21.4%, greater than most companies in our
industry.”
My
Comments:
The
Company would like you to focus on the last five years. A closer look at the
most recent financial performance of the Company demonstrates that things are
not as rosy as the Company would have you believe. In fiscal 2008, revenue
grew
year over year by 18.7% compared to the average year over year growth for the
previous three years of 30.4%. At the same time, income from operations grew
16.7 % in fiscal 2008 compared to the previous three-year average year over
year
growth of 44.7%.
The
growth in revenues and earnings since the time of my September 2005 proxy
contest has been driven mainly by maintenance and upgrades to existing clients.
Systems sales to new clients have only increased by 8.16% over the entire 3
year
period [this figure is not annualized]. I believe that this stagnant growth
in
systems sales to new clients may continue if not worsen due to the lack of
a
strategy and business plan and inadequate oversight of management under the
Company's Chairman and this Board. I fear this will have a negative effect
on
the Company’s future financial results.
Here
is a
table for the last 4 quarters of company revenues, earnings per share and new
systems sales:
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Revenue
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Earnings/share
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Systems
sales to new customers
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|
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Q1
09
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$55M*
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$.40
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$12.6M
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|
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Q4
08
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51M
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.41
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17.3M
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|
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Q3
08
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48M
|
.40
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13.2M
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|
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Q2
08
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45M
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.35
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14.5M
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*
Including 1.7M from HSI, recently acquired by the Company.
The
Company is forced to go back five years to show a decent picture of earnings,
revenues, and stock performance. The Company has stubbornly maintained a narrow
business focus. This has resulted in decelerating growth, as illustrated by
the
Company’s most recent performance.
Company
management has failed to produce a coherent strategy and business plan for
approval by the Board. I fail to understand the business justification or the
underlying concept for the budget approved by the Board. Failure to meet
performance targets is not addressed in a material way. Instead, the Board
is
willing to increase equity compensation for management in the face of
management’s failure to meet its own projections. This, among other things,
demonstrates the Board's inability to effectively govern the Company or oversee
management.
On
August
4, 2008, the Company’s Board of Directors, without a prior agenda item, decided
to increase its quarterly dividend rate from $0.25 to $0.30.
Given
the
recent flat performance of the Company’s earnings as demonstrated by the table
above, the timing and manner of the 20 percent increase in dividends can only
be
rationally viewed as intended to entrench Mr. Razin and his Board. The dividend
increase may also restrict cash availability for expansion or acquisitions.
I
view
dividend increases as positive for shareholders. Dividends support the share
price. I have told the Board that I strongly support a dividend increase,
provided that the increase is tied to a business strategy, a business plan,
and
a budget based on that business plan that would show the potential increase
in
revenues and earnings. But my efforts to cause management to develop such a
plan
and a strategy, and similar efforts of the directors I have nominated to the
Board, have not been successful. The Chairman, who was CEO for 26 years, managed
the Company without a strategy, business plan, or budget based on a business
plan. The Board, under the leadership of the Chairman, failed to hold management
accountable for failing to produce a strategy and a business plan, and the
Board
has been unable to make any changes in management except at the time and
according to the whims of the Chairman.
The
Board, on August 4, 2008, should have considered carefully a dividend increase.
Instead, the dividend increase was sprung on the directors without an agenda
item.
I
have
also strongly supported in the last two years raising capital through a
secondary offering or shelf registration in order to fund expansion of the
Company or future acquisitions.
The
Company's stock price, apart from the spike caused by the dividend increase,
has
stagnated compared to three years ago when I last engaged in a proxy contest.
On
August 4, 2008, just before the Company announced its dividend increase, the
closing price of the Company’s stock was $31.38. On September 21, 2005, when I
last engaged in a proxy contest and a new board was elected, the closing price
was $32.28.
| 2. |
(Page
9) Prior Attempt to Run Competing Slate: 2004 Annual
Meeting
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"At
the
2004 Annual Meeting, Mr. Hussein appeared in person with two director candidates
that had not been nominated by our Board and for whom the Company had not
received notice of candidacy pursuant to the terms of the Company’s Bylaws. Mr.
Hussein then attempted to nominate these individuals at the meeting and to
cast
votes for them in violation of the Company’s Bylaws. The inspector of election
at the meeting disqualified his attempt to vote for the two candidates and
neither candidate was elected to the Board."
My
Comments:
The
two
mysterious candidates the company referred to were Drs. El Bardai and Zikry,
who
at the time of the meeting were independent directors of the Company in good
standing and who had served the company for 5 years under the Memorandum of
Understanding I had entered into with the Company in 1999. These directors,
Drs.
El Bardai and Zikry, expressed a willingness to continue to serve the company.
Drs. El Bardai and Zikry were also members of the Board’s Nominating
Committee.
As
described in my enclosed Shareholder Letter #2, Mr. Razin, while deemed an
insider by the Company before his new nominees were elected, was able to prevent
half of the independent directors from participating equally in the nominating
process for the 2004 Annual Meeting. The events related to the 2004 Annual
Meeting were crucial for the Company, leading to today's dysfunctional Board.
Mr. Razin is now considered an independent director. Mr. Razin serves as both
the Chairman and as the Lead Director of the Company.
As
a
result of what was unfair treatment of Drs. El Bardai, Zikry and myself by
Mr.
Razin, I gave adequate notice to the corporation in July 2004 that I would
cumulate my votes in the upcoming election.
It
is
untrue for the Company to state “[t]he inspector of election at the meeting
disqualified his attempt to vote for the two candidates.” The fact is that the
inspector of election did not and could not under California law deny my right
to cumulate my votes on behalf of these two directors. At the meeting I actually
did cumulate my votes on behalf of Drs. El Bardai, Zikry and myself. Dr. Zikry
failed to be elected by a very small margin. The company counted 98% of all
outstanding shares as voting in the meeting. Apart from Mr. Razin and my shares,
virtually all shareholder votes counted by the Company were uninstructed votes.
Technically this was not considered a contested election. Mr. Razin, who owned
slightly more shares than me was able to elect 6 out of 7 directors. The Company
thus achieved a new board without the participation, let alone the support,
of
the majority of the independent directors of the Company at the time. This
is
business as usual at QSI. Mr. Razin decides and the Board votes with him with
no
substantive discussion.
Can
we as
shareholders vote for Mr. Razin and his Board?
| 3. |
(Page
9) Prior Proxy Contest: 2005 Annual
Meeting
|
"In
connection with the 2005 Annual Meeting Mr. Hussein announced his intention
to
nominate three candidates out of a total of eight Board positions, and he
actively solicited proxies in support of this slate and in opposition to the
slate nominated by the Board. At the 2005 Annual Meeting only two of his
candidates were elected based upon the determination of the independent
inspector of elections for the meeting. Mr. Hussein challenged the findings
of
the independent inspector of elections concerning the outcome of the vote.
The
independent inspector rejected his challenge. Mr. Hussein subsequently sued
the
Company challenging the election result. In March 2006 the Superior Court of
the
State of California in Orange County rejected this challenge and upheld the
original result. Mr. Hussein then filed a notice of appeal of this
judgment."
My
Comments:
In
the
election of 2005, the Company counted approximately 900,000 shares, equivalent
to about 1.8M shares adjusted for split. These shares included broker
uninstructed votes, which I believed was improper in a contested election.
If a
small fraction of these shares had not been counted by the Company, I would
have
won the 3 board seats I was seeking at the time. This would have meant that
the
majority of the independent directors would have been independent of Mr. Razin
and the insiders.
Lou
Silverman, the CEO of the Company, was the proxy holder in 2005. Mr. Silverman
had a fiduciary responsibility to all shareholders of the Company. Mr. Silverman
should have refrained from counting uninstructed votes in a contested election.
I filed a lawsuit in connection with the election, and lost in the trial court.
While my appeal was pending, the company approached me with a settlement
proposal. I agreed to a settlement with the company giving up my appeal in
exchange for good governance as described in my 13D filing of May 2008. I
entered into a Settlement Agreement with the company in August 2006 in good
faith. Mr. Razin’s interpretation of the agreement has been totally
unreasonable, and good governance never occurred. For further details, I urge
those who are interested to read my 13D filed May 28, 2008 and review the
Company’s non-material response. My 13D can be found at www.sec.gov.
| 4. |
(Page
9) Settlement Agreement
|
"Mr.
Hussein also acknowledged the Board’s determination that Mr. Razin is
independent and agreed not to assert or suggest otherwise."
My
Comments:
Again
the
Company is taking matters out of context. Here is the statement I made in the
Settlement Agreement: “In particular, Hussein acknowledges that on October 28,
2004 the Board of Directors resolved that Razin is an independent director
and
that Mr. Hussein voted against such resolution.”
Indeed,
I
always voted against Mr. Razin’s independence and I did not and could not agree
that Mr. Razin is independent. This would violate my fiduciary duty to the
corporation and its shareholders. Mr. Razin's executive and controlling actions
have increased especially after his unreasonable interpretation of the
Settlement Agreement of August 2006. I believe Mr. Razin’s actions to date are
totally inconsistent with his claim of being independent.
In
the
Board meeting of May 29, 2008, Mr. Razin asked the Board to vote on his
independence. As usual, without any material discussion the vote was 6-3 in
favor of Mr. Razin. Mr. Razin voted that he is indeed independent. The CEO
of
the company and the President of NextGen voted that Mr. Razin is independent
of
management, and Messrs. Love, Plochocki and Pflueger (three of Mr. Razin’s
nominees) voted that Mr. Razin is independent. Messrs. Fawzy, Hoffman and I
voted that Mr. Razin should not be considered independent. I am not surprised
that Mr. Razin acted to get rid of Messrs. Fawzy, Hoffman and me.
Can
we
afford to vote for Mr. Razin and his Board?
| 5. |
(Page
10) Hussein’s Actions as a Board
Member
|
"Mr.
Hussein's filing also violated Company policy by referring to confidential
Company information that he obtained in the course of his Board
service."
My
Comments:
Shouldn't
Mr. Razin and his board be required to explain to you, the shareholders, what
information I obtained during the course of my board service that I divulged?
Is
there any information in my May 28, 2008 13D filing that you as shareholders
are
not entitled to know?
| 6. |
(Page
10) Hussein’s Actions as a Board
Member
|
"Since
entering into the Settlement Agreement, Mr. Hussein has taken numerous actions
that we believe are inconsistent with the terms of the Settlement Agreement,
and
has required the Board to devote significant time to matters that were
specifically addressed in the Settlement Agreement. For example:
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·
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Mr.
Hussein has continued to contest Mr. Razin’s independence, including to
parties outside the Company, despite the fact that under the Settlement
Agreement he agreed to refrain from asserting that Mr. Razin is not
an
independent director;
|
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·
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Mr.
Hussein has repeatedly objected to the Company’s ongoing engagement of
Company counsel despite agreeing in the Settlement Agreement that
the
Company would be entitled to retain its previous counsel;
and
|
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·
|
on
occasions when committees of the Board have been unable to take certain
actions due to deadlocked votes or failed quorum due to committee
members
refusing to attend meetings, Mr. Hussein has objected to having the
matter
referred to the full Board or the independent directors, despite
the fact
that the Settlement Agreement provided for this dispute resolution
mechanism."
|
My
Comments:
I
entered
into the Settlement Agreement of August 2006 in good faith. Both when I entered
into the Settlement Agreement, and afterwards, the Company expressly
acknowledged that one of my principal intentions in entering into the Settlement
Agreement was to terminate the Company’s relationship with existing outside
legal counsel. In my proxy of September 2005 and my 13D filing of May 2008,
I
expressed my reasons for removal of this counsel.
Rather
than abide by the parties’ clear understanding, however, the Company chose
instead to argue that the words of the Settlement Agreement actually permitted
the Company to maintain its relationship with its existing outside legal
counsel. The Company’s complete change of position, knowing my intentions, is
unconscionable. Under well established principles of law, any ambiguity in
the
Company’s obligations was to be resolved in my favor, as the Company's counsel
drafted the Settlement Agreement.
My
counsel repeatedly explained this point to the Company in writing and also
offered to appear before the board to explain my position in person. I even
offered to submit the dispute between the Company and me to binding arbitration.
The Company, however, failed to respond in any meaningful way to me or my
counsel.
Mr.
Razin's interpretation of my position in the agreement on his independence
is
inconsistent with my known intentions and the letter of the agreement. I
expressed in the agreement that I voted against Mr. Razin’s independence. I
accepted in the agreement not to raise the issue of Mr. Razin’s independence,
apart from raising it to the Company or the regulators if appropriate in the
standstill period that expired in September 2007. The agreement called for
me to
not contest the 2006 and 2007 slates. I abided by the agreement.
Mr.
Razin's interpretation of the deadlock mechanism, which has permitted him to
bypass or change the composition of the independent directors' committees (such
as the Compensation and Nominating Committees), is in my view irrational. Mr.
Razin and the Company knew that this was not my intention. Mr. Razin’s
interpretation of the agreement would mean that I entered into the agreement
of
August 2006 for no consideration.
Mr.
Razin
personally chose the new Board counsel for the Company called for by the
agreement. (That counsel resigned in early 2007 without giving a reason.) Mr.
Razin used his deadlock mechanism and his control of the Board to retain the
counsel by a vote of 5 to 4 with the majority of independent directors voting
against hiring that counsel. Mr. Razin even signed the contract for the counsel,
as the Chairman of the Board, without that contract being reviewed by management
or the Board. The action by Mr. Razin in choosing the counsel is controlling
and
unjustified. The lawyer chosen should obviously be acceptable to both parties
to
the agreement. Mr. Razin has interpreted the agreement to give himself total
control of the nominating and compensation process of the Company.
Can
we
afford to elect Mr. Razin and his Board?
| 7. |
(Page
10) Hussein’s Actions as a Board
Member
|
"Recently,
on May 28, 2008, Mr. Hussein filed a Schedule 13D with the SEC in which he
made
numerous allegations with which we disagree and believe are false. For example,
Mr. Hussein repeatedly claims that the Board Chairman “controls” the independent
directors. Our independent Board members vehemently reject the notion that
their
Board decisions are dictated by the Chairman; the decisions of the independent
Board members reflect the exercise of good faith business judgment following
their review, analysis and discussion of the issues and relevant factors that
are brought to bear on each such issue. Mr. Hussein claims that he is not given
adequate time to speak at Board meetings. The majority of the Board is of the
view that a disproportionate amount of meeting time has been devoted to allowing
Mr. Hussein to air his grievances. All of our Board members other than Mr.
Hussein and his two nominees under the terms of the Settlement Agreement
(Messrs. Fawzy and Hoffman) believe that Board actions referenced and criticized
by Mr. Hussein were duly considered and voted upon in accordance with our
Board’s business judgment, our Bylaws and applicable law."
My
Comments:
Do
you
think that this is an adequate response by the company to my 13D filing of
May
2008? I very clearly expressed numerous concerns to the Company. Should we
allow
Mr. Razin and his Board to make self-serving statements and not respond in
a
material way to the issues I raised? Does Mr. Razin and his Board not owe us,
the shareholders, an explanation as to why they believe my statements to be
false?
Can
we
afford to elect Mr. Razin and his Board?
| 8. |
(Page
10) Our Board’s Response
|
"In
light
of his May 28 Schedule 13D filing, his continued assertions with respect to
supposed corporate governance violations (which we believe are without merit)
and his demonstrated willingness to institute legal proceedings against the
Company, on May 29, 2008, our Board reviewed and renewed the powers of its
Special Committee, which had originally been formed prior to the 2005 Annual
Meeting in response to the adverse position that Mr. Hussein had taken with
respect to the majority of the Board. Among other things, the Special Committee
has been delegated all powers of our Board in connection with the solicitation
and voting of proxies at the annual meeting. The Special Committee consists
of
Messrs. Pflueger, Love, and Razin. On May 29, 2008, our Board also established
a
Proxy Voting Committee, which has been delegated to provide instruction to
its
proxy holders to vote the proxies solicited hereby in such manner as to provide
for the election of the maximum number of our director nominees (for whom
authority is not otherwise specifically withheld) including, but not limited
to,
the prioritization of such nominees to whom such votes may be allocated. The
Proxy Voting Committee consists of Messrs. Pflueger, Plochocki and
Razin."
My
Comments:
Do
you
get the impression reading the statement by the Company that the Company
previously disbanded the Special Committee after the Settlement Agreement of
August 2006, and reinstated it in response to my 13D filing in May 2008? If
so,
you would be wrong. The Special Committee never disbanded. Mr. Razin chairs
the
Special Committee and chooses its members and prescribes its mandate through
pre-prepared resolutions by the Company’s outside counsel, which are summarily
passed by the Board. On numerous occasions Mr. Razin made Messrs. Fawzy,
Hoffman, and I and those Board members not on the Special Committee, wait to
commence an Independent Directors meeting until the Special Committee finished
its meetings. Mr. Razin’s Special Committee has operated with no transparency or
adequate reporting to the Board. Mr. Razin also formed special committees of
his
choice to handle a major transaction, in clear violation of the bylaws of the
company, as I described in my 13D filing of May 2008. In addition, Mr. Razin
formed another Special Committee consisting of himself and 2 other directors
that he has nominated to the Board to search for and recommend a new CEO for
the
Company. Company outside counsel was involved in the resolution to form the
Special Committee as well as several other special committees on behalf of
Mr.
Razin. I understand company outside counsel attended at least some Special
Committee meetings. The Board, usually without a prior agenda item in the Board
meeting, approved forming these committees without time to reflect on their
validity or wisdom.
I
and my
attorneys asked questions of outside counsel about his conflicting roles in
the
Company and raised questions about Mr. Razin’s executive actions which are
totally inconsistent with his claim of independence. We received no meaningful
response.
The
Special Committee incurs large expenses. Can we afford Mr. Razin using
shareholder assets to entrench himself and his Board?
Should
we
vote for Mr. Razin and his Board?
| 9. |
(Page
21) Fiscal Year 2009 Incentive Program
Terms
|
"On
June
23, 2008, our Independent Directors Compensation Committee and an executive
session of our Board, each comprised of all of our independent directors,
approved a compensation program for our named executive officers for the fiscal
year ending March 31, 2009."
My
Comments:
The
Company refers to a Special Compensation Committee and an executive session
of
the Board at which independent directors took action regarding compensation
for
executive officers. There was no executive session of the Board held on June
23,
2008. The vote of the independent directors was 4-3 in the presence of
management with Mr. Razin casting the deciding vote on the issue of executive
compensation. The Compensation Committee had failed to recommend a compensation
program to the Board due to the lack of a business plan. On May 29 2008 the
Board accepted the recommendation of the Compensation Committee to require
a
business plan before awarding incentive compensation. On June 23 Mr. Razin
used
his deadlock mechanism to ask the independent directors to vote for the
incentive compensation plan despite the fact that there was no business plan.
Mr. Razin cast the deciding vote on incentive compensation for executive
compensation while management was present. The directors voting with Mr. Razin
did not explain or discuss why they reversed their decision and no longer
required a business plan.
Can
we as
shareholders vote for Mr. Razin and his Board?
| 10. |
(Page
34) Independent Directors Compensation Committee
Report
|
"Our
Independent Directors Compensation Committee reviewed and discussed with
management the 'Compensation Discussion and Analysis' contained in this proxy
statement. Based on that review and discussion, a majority of our Independent
Directors Compensation Committee recommended to our Board of Directors that
the
'Compensation Discussion and Analysis' be included in this proxy
statement.
INDEPENDENT
DIRECTORS COMPENSATION COMMITTEE
Steven
Plochocki, Chairman
Edwin
Hoffman Vincent Love Sheldon Razin Russell Pflueger Ibrahim Fawzy Ahmed
Hussein"
My
Comments:
The
Company’s outside counsel prepared and distributed minutes of an alleged meeting
of the Independent Directors’ Compensation Committee, claiming that such a
meeting took place on June 23. However, no such meeting took place on June
23,
or at any other time.
Can
we as
shareholders accept a representation that an independent directors’ committee
met and reviewed information when no such meeting ever occurred? Do you wonder
anymore why I insisted on the removal of the lawyer who prepared and distributed
minutes of Board meetings, as a main consideration for accepting a settlement
with the Company in August 2006?
If
QSI
under Mr. Razin and his Board can be so inaccurate in a public filing when
they
are involved in a proxy contest, how much credibility do you give them for
their
other public filings? What is your expectation for the way they keep board
and
independent directors’ committee minutes?
Doesn’t
our company deserve a better Board?
I
am honored to join with a distinguished slate of individuals. I have nominated
Dr. Murray Brennan, Tom DiBenedetto, Joe Stilwell, Ibrahim Fawzy, Edwin
Hoffman and myself, and I am grateful they have agreed to serve as directors
of
our Company.
I
urge you to join in giving us your support.
PLEASE
VOTE THE ENCLOSED BLUE CARD TODAY.
If
you
have any questions or need any assistance voting your shares, please contact
my
proxy solicitation firm:
The
Altman Group, Inc.
Toll
free
at (866) 856-4969
Sincerely
yours,
Ahmed
Hussein
YOUR
VOTE
IS IMPORTANT,
NO
MATTER
HOW MANY OR HOW FEW SHARES YOU OWN.
| |
·
|
If
your shares are registered in your own name, please sign, date and
mail
the enclosed BLUE Proxy Card and return it in the postage paid envelope
provided today.
|
| |
·
|
If
your shares are held in the name of a brokerage firm, bank, nominee
or
other institution, only it can sign a BLUE Proxy Card with respect
to your
shares and only after receiving your specific instructions. Accordingly,
please sign, date and mail the enclosed BLUE Proxy Card in the
postage-paid envelope provided to ensure that your shares are
voted.
|
| |
·
|
Please
do not send back any white proxy card you receive, even to vote against
the management nominees. Doing so will cancel any prior vote you
cast on
the BLUE card. Please return only the BLUE proxy
card.
|
| |
·
|
Even
if you have already returned a white proxy card, you have every right
to
change your vote. You can still support our nominees by returning
the
enclosed BLUE proxy card. Only your latest dated proxy card will
count.
|
On August
13, 2008, Ahmed Hussein filed with the Securities and Exchange Commission
(the "Commission") a definitive proxy statement in connection with
the September 4, 2008 annual meeting
of shareholders of Quality Systems, Inc. Mr.
Hussein commenced mailing copies of the definitive proxy
statement to shareholders on August 14, 2008. The definitive proxy
statement includes information regarding the participants in the solicitation
and their direct or indirect interests and security holdings in Quality Systems,
Inc. Investors and security holders are urged to read Mr. Hussein's
definitive proxy statement and additional definitive soliciting material
because
they contain important information. Investors and security holders may obtain
a
free copy of the definitive proxy statement and other documents filed
by Mr. Hussein with the Commission at the Commission's website at
www.sec.gov. The definitive proxy statement and these other documents may
also
be obtained for free by writing to Mr. Ahmed Hussein c/o National
Investment Co., 630 Fifth Avenue, Suite 2258, New York, New York
10111-0100, or by contacting The Altman Group, Inc., toll free at
(866) 856-4969.