sec document
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)
Filed by the Registrant |_|
Filed by a Party other than the Registrant |X|
Check the appropriate box:
|X| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Under Rule 14a-12
NOVOSTE CORPORATION
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(Name of Registrant as Specified in Its Charter)
STEEL PARTNERS II, L.P.
STEEL PARTNERS, L.L.C.
WARREN G. LICHTENSTEIN
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(Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant to
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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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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|_| Fee paid previously with preliminary materials:
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|_| Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
PRELIMINARY COPY SUBJECT TO COMPLETION
DATED JANUARY 10, 2006
STEEL PARTNERS II, L.P.
January ___, 2006
Fellow Shareholders:
The attached proxy statement and the enclosed GREEN proxy card are
being furnished to you, the shareholders of Novoste Corporation ("Novoste" or
the "Company"), in connection with the solicitation of proxies by Steel Partners
II, L.P. ("Steel Partners" or "we") for use at the special meeting of
shareholders of Novoste, and at any adjournments or postponements thereof (the
"Special Meeting"), in opposition to the proposed liquidation of Novoste.
Pursuant to the attached proxy statement, we are soliciting proxies from holders
of shares of Novoste common stock to vote AGAINST the proposal of the Novoste
Board to adopt a plan of dissolution pursuant to which Novoste will be dissolved
and liquidated and AGAINST the related proposal to adjourn the Special Meeting
to permit further solicitation of proxies with respect to the proposal to
approve and adopt the plan of dissolution and to approve the transactions
contemplated thereby.
In addition to the proposals in the Novoste proxy statement to
liquidate (proposal 3 in the Novoste proxy statement) and to adjourn the Special
Meeting to permit further solicitation of proxies with respect to the proposal
to liquidate (proposal 6 in the Novoste proxy statement), the Novoste Board is
soliciting proxies from holders of shares of Novoste common stock to approve the
following four proposals, FIRST, a proposal to approve the sale of substantially
all of the assets of the Company's vascular brachytherapy (VBT) business to Best
Vascular, Inc. pursuant to an amended and restated asset purchase agreement
(proposal 1 in the Novoste proxy statement), SECOND, a proposal to approve the
change of the Company's name from "Novoste Corporation" to "NOVT Corporation"
upon completion of the VBT asset sale transaction (or, if that name is not
available in Florida, to "NVTE Corporation") (proposal 2 in the Novoste proxy
statement), FOURTH, a proposal to approve the amendment of the Company's amended
and restated articles of incorporation and its fourth amended and restated
bylaws to reduce the minimum size of the Company's board of directors from six
to three persons (proposal 4 in the Novoste proxy statement), and FIFTH, a
proposal to adjourn the Special Meeting to permit further solicitation of
proxies with respect to the proposal to approve the asset sale transaction
(proposal 5 in the Novoste proxy statement). Pursuant to the attached proxy
statement, we are also soliciting proxies from holders of shares of Novoste
common stock on these four proposals. We do not object to these four proposals
and anticipate voting our shares in favor of these proposals.
The Special Meeting will be held on _____, _________, 2006 at 10:00
a.m., local time, at the Atlanta Marriott Gwinnett Place, 1775 Pleasant Hill
Road, Duluth, Georgia.
We urge you to carefully consider the information contained in the
attached proxy statement and then support our efforts by signing, dating and
returning the enclosed GREEN proxy card today. The attached proxy statement and
the enclosed GREEN proxy card are first being furnished to the shareholders on
or about ________ ___, 2006.
If you have already voted for management's proposals relating to the
plan of dissolution pursuant to which Novoste will be dissolved and liquidated
and the related proposal to adjourn the Special Meeting to permit further
solicitation of proxies with respect to the proposal to approve and adopt the
plan of dissolution, you have every right to change your vote by either voting
in person at the Special Meeting or by signing, dating and returning a later
dated proxy card either directly to Steel Partners in care of MacKenzie
Partners, Inc. at the address set forth on the back cover of the attached proxy
statement, or to Novoste with a photostatic copy to Steel Partners in care of
MacKenzie Partners, Inc. at the address set forth on the back cover of the
attached proxy statement.
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If you have any questions or require any assistance with your vote,
please contact MacKenzie Partners, Inc., which is assisting us, at their address
and toll-free numbers listed on the following page.
We have requested that Novoste call a second special meeting of
shareholders for the following purposes: (i) to remove all of the existing
directors serving on the Novoste Board of Directors at the time of such special
meeting, without cause and (ii) to elect Steel Partners' slate of director
nominees, Jack Howard, John Quicke, James Henderson, Joshua Schechter, Harvey
Bazaar and Leonard Toboroff. Steel Partners has also requested the Board of
Directors of Novoste to submit Steel Partners' proposals for business at the
Special Meeting in order to spare Novoste and its shareholders the time and
expense of holding two meetings. Novoste has not yet responded to these
requests.
Thank you for your support,
Warren G. Lichtenstein
Steel Partners II, L.P.
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IF YOU HAVE ANY QUESTIONS, REQUIRE ASSISTANCE IN VOTING YOUR GREEN PROXY CARD,
OR NEED ADDITIONAL COPIES OF STEEL PARTNERS' PROXY MATERIALS, PLEASE CALL
MACKENZIE PARTNERS AT THE PHONE NUMBERS LISTED BELOW.
MACKENZIE PARTNERS, INC.
105 Madison Avenue
New York, NY 10016
proxy@mackenziepartners.com
(212) 929-5500 (Call Collect)
or
TOLL-FREE (800) 322-2885
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SPECIAL MEETING OF SHAREHOLDERS
OF
NOVOSTE CORPORATION
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PROXY STATEMENT
OF
STEEL PARTNERS II, L.P.
-------------------------
PLEASE SIGN, DATE AND MAIL THE ENCLOSED GREEN PROXY CARD TODAY
Steel Partners II, L.P. ("Steel Partners" or "we") is the beneficial
owner of an aggregate of 608,301 shares of common stock of Novoste Corporation,
a Florida corporation ("Novoste" or the "Company"), representing approximately
14.9% of the outstanding common stock of the Company. Steel Partners is writing
to you in connection with the proposal to adopt a plan of dissolution pursuant
to which Novoste will be dissolved and liquidated (the "Liquidation"). The Board
of Directors of Novoste (the "Novoste Board") has scheduled a special meeting of
shareholders for the purpose of approving the Liquidation and other related
proposals (the "Special Meeting"). The Special Meeting is scheduled to be held
on _____, _________, 2006 at 10:00 a.m., local time, at the Atlanta Marriott
Gwinnett Place, 1775 Pleasant Hill Road, Duluth, Georgia. Steel Partners does
not believe the Liquidation is in the best interests of the shareholders and
should not be approved and is therefore soliciting proxies from the shareholders
of Novoste AGAINST the Liquidation proposal and AGAINST the related proposal to
adjourn the Special Meeting (the "Liquidation Vote Adjournment") to permit
further solicitation of proxies with respect to the proposal to approve and
adopt the plan of dissolution.
Steel Partners, Steel Partners, L.L.C., and Warren G. Lichtenstein are
members of a group (the "Group") and are deemed participants in this proxy
solicitation. See "Other Participant Information." This Proxy Statement and the
GREEN proxy card are first being furnished to Novoste's shareholders on or about
________ ___, 2006.
Novoste has set the record date for determining shareholders entitled
to notice of and to vote at the Special Meeting as December 15, 2005 (the
"Record Date"). The principal executive offices of Novoste are located at 4350
International Boulevard, Norcross, Georgia 30093. Shareholders of record at the
close of business on the Record Date will be entitled to vote at the Special
Meeting. As of the Record Date, there were _________ shares outstanding and
entitled to vote at the Special Meeting, which is the total number of shares of
common stock, $.01 par value per share (the "Shares"), reported to be
outstanding by the Company, after giving effect to the Company's reverse
one-for-four stock split on November 4, 2005. As of ________ ___, 2006, the
approximate date on which Steel Partners expects to mail this Proxy Statement to
the shareholders, Steel Partners, along with all of the participants in this
solicitation, are the beneficial owners of an aggregate of 608,301 Shares, which
represents approximately 14.9% of the Shares outstanding. All of the Shares
beneficially owned by Steel Partners may be voted by Steel Partners at the
Special Meeting. The participants in this solicitation intend to vote such
Shares AGAINST the Company's Liquidation proposal, AGAINST the Company's
Liquidation Vote Adjournment Proposal and FOR the other four proposals.
THIS SOLICITATION IS BEING MADE BY STEEL PARTNERS AND NOT ON BEHALF OF THE BOARD
OF DIRECTORS OR MANAGEMENT OF NOVOSTE. STEEL PARTNERS IS NOT AWARE OF ANY OTHER
MATTERS TO BE BROUGHT BEFORE THE SPECIAL MEETING. SHOULD OTHER MATTERS, WHICH
STEEL PARTNERS IS NOT AWARE OF A REASONABLE TIME BEFORE THIS SOLICITATION, BE
BROUGHT BEFORE THE SPECIAL MEETING, THE PERSONS NAMED AS PROXIES IN THE ENCLOSED
GREEN PROXY CARD WILL VOTE ON SUCH MATTERS IN THEIR DISCRETION.
STEEL PARTNERS URGES YOU TO SIGN, DATE AND RETURN THE GREEN PROXY CARD AGAINST
THE LIQUIDATION PROPOSAL AND AGAINST THE LIQUIDATION VOTE ADJOURNMENT PROPOSAL.
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IF YOU HAVE ALREADY SENT A PROXY CARD FURNISHED BY NOVOSTE MANAGEMENT TO THE
NOVOSTE BOARD, YOU MAY REVOKE THAT PROXY AND VOTE AGAINST THE LIQUIDATION
PROPOSAL AND AGAINST THE LIQUIDATION VOTE ADJOURNMENT PROPOSAL BY SIGNING,
DATING AND RETURNING THE ENCLOSED GREEN PROXY CARD. THE LATEST DATED PROXY IS
THE ONLY ONE THAT COUNTS. ANY PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE
SPECIAL MEETING BY DELIVERING A WRITTEN NOTICE OF REVOCATION OR A LATER DATED
PROXY FOR THE SPECIAL MEETING OR BY VOTING IN PERSON AT THE SPECIAL MEETING.
ALTHOUGH A REVOCATION IS EFFECTIVE IF DELIVERED TO NOVOSTE, STEEL PARTNERS
REQUESTS THAT EITHER THE ORIGINAL OR PHOTOSTATIC COPIES OF ALL REVOCATIONS BE
MAILED TO STEEL PARTNERS IN CARE OF MACKENZIE PARTNERS, INC. AT THE ADDRESS SET
FORTH ON THE BACK COVER OF THIS PROXY STATEMENT.
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IMPORTANT
YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY OR HOW FEW SHARES YOU OWN.
STEEL PARTNERS URGES YOU TO SIGN, DATE, AND RETURN THE ENCLOSED GREEN PROXY CARD
TODAY TO VOTE AGAINST THE COMPANY'S LIQUIDATION PROPOSAL AND AGAINST THE
COMPANY'S LIQUIDATION VOTE ADJOURNMENT PROPOSAL.
Steel Partners does not believe that the Liquidation is in the best
interest of the Company's shareholders. A vote AGAINST the Company's Liquidation
proposal will enable you - as the owners of Novoste - to send a message to the
Novoste Board that you are committed to maximizing the value of your Shares.
o If your Shares are registered in your own name, please sign and date
the enclosed GREEN proxy card and return it to Steel Partners, c/o
MacKenzie Partners, Inc., in the enclosed envelope today.
o If any of your Shares are held in the name of a brokerage firm, bank,
bank nominee or other institution on the Record Date, only it can vote
such Shares and only upon receipt of your specific instructions.
Accordingly, please contact the person responsible for your account and
instruct that person to execute on your behalf the GREEN proxy card.
Steel Partners urges you to confirm your instructions in writing to the
person responsible for your account and to provide a copy of such
instructions to Steel Partners, c/o MacKenzie Partners, Inc., who is
assisting in this solicitation, at the address and telephone numbers
set forth below, and on the back cover of this Proxy Statement, so that
we may be aware of all instructions and can attempt to ensure that such
instructions are followed.
If you have any questions regarding your proxy,
or need assistance in voting your Shares, please call:
MACKENZIE PARTNERS, INC.
105 Madison Avenue
New York, New York 10016
(212) 929-5500 (Call Collect)
proxy@mackenziepartners.com
or
CALL TOLL FREE (800) 322-2885
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PROPOSAL TO ADOPT PLAN OF DISSOLUTION AND
DISSOLVE AND LIQUIDATE THE COMPANY
(PROPOSAL NO. 3 IN THE NOVOSTE PROXY STATEMENT)
You are being asked by Novoste to approve a proposal ("Liquidation
Proposal") to adopt a plan of dissolution pursuant to which Novoste will be
dissolved and liquidated. The Liquidation cannot be consummated without
shareholder approval of the plan of dissolution. For the reasons discussed
below, we oppose the Liquidation Proposal. To that end, we are soliciting your
proxy to vote AGAINST the Liquidation Proposal.
REASONS TO VOTE AGAINST THE LIQUIDATION PROPOSAL
The following is a summary of what we believe to be the consequences of
the proposed Liquidation. They are the primary reasons why we believe
shareholders should vote AGAINST the Liquidation Proposal.
WE URGE YOU TO DEMONSTRATE YOUR OPPOSITION TO THE LIQUIDATION PROPOSAL
AND SEND A MESSAGE TO THE NOVOSTE BOARD THAT THE PROPOSED LIQUIDATION IS NOT IN
THE BEST INTEREST OF THE SHAREHOLDERS BY SIGNING, DATING AND RETURNING THE
ENCLOSED GREEN PROXY CARD AS SOON AS POSSIBLE.
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WE BELIEVE THE LIQUIDATION PROPOSAL IS NOT IN THE BEST INTERESTS OF NOVOSTE
SHAREHOLDERS AS IT WILL EXTINGUISH THE COMPANY'S NET OPERATING LOSS
CARRYFORWARDS. Novoste has a significant amount of net operating loss
carryforwards which will all be extinguished in the event the Company proceeds
with the Liquidation. We believe a public company with significant net operating
loss carryforwards, such as Novoste, may represent a valuable investment vehicle
to companies with taxable income that wish to reduce their tax liability. We
believe that this potentially valuable asset should not be extinguished as a
result of the Liquidation.
WE BELIEVE THERE IS SIGNIFICANT POTENTIAL VALUE TO SHAREHOLDERS IN NOVOSTE
REMAINING A PUBLIC COMPANY. We believe that shareholder value will be maximized
through maintaining Novoste as a public company. There are significant benefits
to remaining a public company as set forth in greater detail herein. We believe
that maintaining Novoste's status as a public reporting company will preserve
maximum flexibility for the Company in considering future opportunities.
WE BELIEVE MANAGEMENT'S METHOD OF LIQUIDATION MAY UNNECESSARILY DEPLETE COMPANY
ASSETS. While we clearly do not believe that the Liquidation is in the best
interests of shareholders, even if one were to proceed, we believe that the
method of liquidation proposed by the Novoste Board may unnecessarily deplete
Company assets and divert a greater amount of the proceeds of those assets from
shareholders to the liquidation trustee. We do not believe the Company's assets
should be put into a liquidating trust supervised by a corporate trustee.
WE BELIEVE THAT THERE ARE POTENTIALLY MORE FAVORABLE STRATEGIC OPPORTUNITIES FOR
NOVOSTE THAN THE PROPOSED LIQUIDATION. We do not agree with the Novoste Board's
assertion that there is no definitive or clear alternative that would provide
the opportunity for the shareholders to receive value for their Shares. On the
contrary, we believe that there are potentially more favorable strategic
opportunities, especially after the sale of the VBT business. If the sale is
consummated, the Company will have a significant NOL carryforward, publicly
traded securities and will likely have no operations, making it an attractive
merger candidate for a privately held operating company with taxable income that
wishes to reduce its tax liability and obtain public company status. We believe
that this and other business transactions should be actively investigated in
light of the potential sale of the Company's VBT business and it is therefore
premature for the Board to conclude that there are no other viable alternatives.
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WE BELIEVE THE LIQUIDATION PROPOSAL IS NOT IN THE BEST INTERESTS OF
NOVOSTE SHAREHOLDERS AS IT WILL EXTINGUISH THE COMPANY'S NET OPERATING LOSS
CARRYFORWARDS
Novoste has reported that as of December 31, 2004, it had approximately
$63,019,000 of net operating loss carryforwards ("NOL carryforwards") for U.S.
federal income tax purposes. Such losses expire in 2007 through 2024. In
addition, as of December 31, 2004, it had approximately $14,323,000 of foreign
net operating losses related to its European subsidiaries. Additionally, it has
approximately $3,142,000 in research and development (R&D) tax credits that
expire in 2008 through 2024 unless utilized earlier. Since December 31, 2004,
Novoste has incurred additional losses, and the NOL carryforwards have only
grown from the amounts reported by the Company as of December 31, 2004. The NOL
carryforwards will be extinguished in the event the Company proceeds with the
Liquidation.
The amount of NOL carryforwards had previously been significantly
larger, but the Company disclosed that it had discovered in 2003 that certain
events had occurred which limited the use of the greater amount of NOL
carryforwards. As a consequence of these events, approximately two-thirds of the
Company's original NOL carryforwards will expire unused. Regardless of this
mishap, over $63 million of usable NOL carryforwards remain.
The NOL carryforwards and R&D tax credits are available to offset
future income taxes payable, if any. It is widely recognized and acknowledged
that NOL carryforwards are of significant value to a company. While NOL
carryforwards are not the same as hard assets such as inventory or equipment,
they are a real and valuable company asset which we believe directors have a
fiduciary duty to protect and preserve. The ability to offset future income
taxes payable provides the Company with tremendous flexibility in examining
opportunities which may develop, and positioning the Company to take advantage
of opportunities which may arise. Generally speaking, the Company's NOL
carryforwards will be available to offset future taxable income of the Company
and will be advantageous in the case where the Company acquires an operating
business with positive taxable income. Certain limitations in the use of the NOL
carryforwards will apply in the case of an "ownership change", namely, a 50
percent change in ownership by "5-percent shareholders" over a moving three-year
period. The annual NOL carryforward limitation will ordinarily equal the product
of (a) the fair market value of the loss corporation, generally the fair market
value of its shares (reduced, in certain cases, by the fair market value of the
loss corporation's nonbusiness assets, if such assets are substantial), and (b)
the long-term tax-exempt rate (currently 4.4%). Further limitations apply where
the loss corporation discontinues its historical business within a two-year
period after an ownership change. Ideally, the acquisition by the Company of an
operating business, through a merger, purchase or otherwise, would be structured
in such a way as to minimize the application of these limitations. While we do
not have a specific transaction to suggest at this time, we believe it is
incumbent upon the management and the Novoste Board to search tirelessly for
available opportunities, and to preserve the NOL carryforwards until such an
opportunity is found.
While the use of the full NOL carryforwards may not be available, any
NOL carryforwards, particularly in the Company's case where the NOL
carryforwards are over $63 million, are a valuable and real asset which will be
destroyed in a liquidation. We believe that it is a violation of the Novoste
Board's fiduciary obligations not only to allow, but to actually support, the
destruction of this valuable corporate asset. We believe a proposal like the
Liquidation Proposal where the NOL carryforwards are destroyed with no benefit
is no different than destroying valuable inventory. Rather, protections must be
implemented to prevent any further deterioration of this valuable asset, and to
preserve it for the benefit of all shareholders.
WE BELIEVE THAT THERE IS SIGNIFICANT POTENTIAL VALUE TO SHAREHOLDERS IN
NOVOSTE REMAINING A PUBLIC COMPANY
We believe that shareholder interests will be maximized through
maintaining Novoste as a public company. There are significant benefits to
remaining a public company such as increased liquidity of company stock, greater
access to capital markets and the ability to acquire other companies through
stock transactions. Particularly in the case of Novoste where it has significant
NOL carryforwards, remaining a public company presents a great deal of options
to maximize shareholder value such as merging with a private company seeking to
reduce its tax liability and obtain public company status. We believe that
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Novoste will be a more attractive partner as a public company, and it would be
detrimental to shareholders for the Novoste Board to seek to voluntarily
surrender this potential benefit. This is another example of the Novoste Board
pursuing a course that fails to fully utilize and value a corporate asset.
WE BELIEVE MANAGEMENT'S METHOD OF LIQUIDATION MAY UNNECESSARILY
DEPLETE COMPANY ASSETS
While we clearly do not believe that the Liquidation is in the best
interests of shareholders, even if one were to proceed, we believe that the
method of liquidation proposed by the Novoste Board may unnecessarily deplete
Company assets and divert a greater part of the proceeds of those assets from
shareholders to the liquidation trustee. Novoste's proxy statement states that
if deemed advisable by the Novoste Board for any reason, the Company may,
following dissolution, transfer its assets to a trust established for the
benefit of shareholders, subject to the claims of creditors. Thereafter, these
assets will be sold or distributed on terms approved by the trustees of the
trust. The plan of dissolution will authorize the Novoste Board to appoint one
or more trustees of the liquidating trust and to cause Novoste to enter into a
liquidating trust agreement with the trustee(s) on such terms and conditions as
may be approved by the Novoste Board. The Novoste proxy statement states that
shareholder approval of the plan of dissolution will also constitute approval of
any such appointment and any liquidating trust agreement.
We believe that in many cases professional trustees do a poor job
protecting shareholders' interests and we are concerned that proceeds of the
Liquidation would not be efficiently distributed to shareholders under the
supervision of a trustee. We do not believe that it is advisable to give the
Novoste Board carte blanche to proceed in this manner. While we believe that the
Liquidation is inadvisable, if a liquidation were to occur, we believe that the
method chosen by the Novoste Board, where all of the Company's assets may be
transferred into a liquidating trust would be unnecessarily costly and
inefficient.
WE BELIEVE THAT THERE ARE POTENTIALLY MORE FAVORABLE STRATEGIC
OPPORTUNITIES FOR NOVOSTE THAN THE PROPOSED LIQUIDATION
Several months ago the Novoste Board proceeded forward with what we
believe was an ill-advised transaction to merge with ONI Medical Systems. Prior
to the shareholder meeting to approve that transaction, we informed the Novoste
Board that we believed that ONI Medical Systems was a poorly chosen merger
candidate. We held this view as ONI Medical Systems had incurred operating
losses since its inception, had an extremely limited operating history, and its
2004 audit report contained an explanatory paragraph expressing substantial
doubt about its ability to continue as a going concern. Accordingly, we informed
the Novoste Board that we intended to vote all of our shares, representing 14.9%
of the outstanding Shares, against the ONI Medical Systems merger transaction.
The Company's stock price also precipitously dropped as a result of this
announced transaction. We were against the ONI Medical Systems merger because we
believed, among other things, that the ONI Medical Systems merger provided no
benefits or upside to the Company's shareholders, that it would result in a
substantial and immediate dilution of existing voting power and equity interests
of the Company, that it would effectively cede control of the Company to the
entity which controls ONI Medical Systems, that it would significantly increase
the risks to the Company and its shareholders, and that the ONI Medical Systems
merger transaction had significant costs.
In Novoste's proxy statement management refers to the prior shareholder
lack of approval of the ONI Medical Systems merger as an example of how the
Novoste Board tried to obtain another business, but could not. We do not believe
that Novoste should now abandon the prospect of merging with another company. We
believe that a merger with the right company on terms favorable to the Company's
shareholders would maximize shareholder value. We together with a majority of
Novoste's shareholders voted down the ONI Medical Systems as ONI was not a good
merger candidate and the terms were not favorable to Novoste shareholders. We do
not believe, however, that the failure of the ill-advised attempted ONI Medical
Systems merger means that there is no other suitable business opportunity for
Novoste.
In Novoste's proxy statement management also states that it believes no
reasonable business alternatives to the Liquidation currently exist for Novoste.
We do not understand how the Novoste Board reached this conclusion. The Company
has disclosed that it went through a search process to select ONI Medical
Systems as a merger partner. As previously stated, we believe that this was a
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poor merger partner, and we communicated this belief to the Company early on in
the process. A failed search process carried out some time ago does not indicate
that there are no viable business alternatives. We find it hard to believe that
the Novoste Board is suggesting that there currently are no reasonable business
alternatives and we have seen no evidence that the Novoste Board has actively
considered the full range of options available to the Company upon the sale of
its VBT business. Following the sale of the Company's VBT business, the Company
will remain a public company with significant NOL carryforwards, publicly traded
securities and likely will have no operations, making it an attractive merger
candidate for a privately held operating company with taxable income that wishes
to reduce its tax liability and obtain public company status. Accordingly, we
believe that there are reasonable business alternatives to be pursued, although
the current Novoste Board may not be the right board to pursue the alternatives.
STEEL PARTNERS IS DETERMINED TO STOP THE PROPOSED LIQUIDATION. OUR OPPOSITION IS
BASED ON OUR FIRM COMMITMENT TO SHAREHOLDER VALUE AND OUR FIRM BELIEF THAT THE
PROPOSED LIQUIDATION IS NOT IN THE BEST INTERESTS OF NOVOSTE SHAREHOLDERS. WE
THEREFORE URGE YOU TO VOTE YOUR GREEN PROXY AGAINST THE LIQUIDATION PROPOSAL.
PROPOSAL TO ADJOURN THE SPECIAL MEETING TO PERMIT FURTHER SOLICITATION OF
PROXIES WITH RESPECT TO THE LIQUIDATION PROPOSAL
(PROPOSAL NO. 6 IN THE NOVOSTE PROXY STATEMENT)
You are being asked by Novoste to approve a proposal ("Liquidation Vote
Adjournment Proposal") to adjourn the Special Meeting to permit further
solicitation of proxies with respect to the Liquidation Proposal. For the
reasons discussed above, we oppose the Liquidation Proposal. To that end, we are
soliciting your proxy to vote AGAINST the Liquidation Vote Adjournment Proposal.
STEEL PARTNERS IS DETERMINED TO STOP THE LIQUIDATION VOTE ADJOURNMENT PROPOSAL.
OUR OPPOSITION IS BASED ON OUR FIRM COMMITMENT TO SHAREHOLDER VALUE AND OUR FIRM
BELIEF THAT THE LIQUIDATION VOTE ADJOURNMENT PROPOSAL IS NOT IN THE BEST
INTERESTS OF NOVOSTE SHAREHOLDERS. WE THEREFORE URGE YOU TO VOTE YOUR GREEN
PROXY AGAINST THE LIQUIDATION VOTE ADJOURNMENT PROPOSAL.
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PROPOSAL TO APPROVE ASSET SALE TRANSACTION PURSUANT TO
AMENDED AND RESTATED ASSET PURCHASE AGREEMENT
(PROPOSAL NO. 1 IN THE NOVOSTE PROXY STATEMENT)
You are being asked by the Novoste Board to approve a proposal to
approve the proposed asset sale transaction set forth in the amended and
restated asset purchase agreement, dated as of October 12, 2005, as amended
pursuant to amendment no. 1 to amended and restated asset purchase agreement,
dated as of November 30, 2005, among Novoste, Best Vascular, Inc., a Delaware
corporation, and Best Medical International, Inc., a Virginia corporation,
pursuant to which Novoste will sell substantially all of the assets related to
its vascular brachytherapy (VBT) business to Best Vascular in exchange for the
assumption of certain liabilities related to the VBT business by Best Vascular
("Asset Sale Proposal"). We support the proposed asset sale transaction. We
anticipate voting in favor of the Asset Sale Proposal.
STEEL PARTNERS DOES NOT OBJECT TO THE PROPOSAL TO APPROVE THE PROPOSED
ASSET SALE TRANSACTION.
PROPOSAL TO APPROVE AMENDMENT TO AMENDED AND RESTATED ARTICLES OF
INCORPORATION TO CHANGE NAME FROM "NOVOSTE CORPORATION" TO "NOVT
CORPORATION"
(PROPOSAL NO. 2 IN THE NOVOSTE PROXY STATEMENT)
You are being asked by the Novoste Board to approve a proposal to
approve an amendment to Novoste's amended and restated articles of incorporation
to change the name of the Company from "Novoste Corporation" to "NOVT
Corporation" (or, if that name is not available in Florida, to "NVTE
Corporation")("Name Change Proposal"). According to the Novoste proxy statement,
the amended and restated asset purchase agreement with Best Vascular and Best
Medical International contemplates that at the closing of the transaction, Best
Vascular will acquire substantially all of the assets of the Company's VBT
business, including the rights to use the name "Novoste". The full text of the
proposed amendment is set forth in the Novoste proxy statement. The Novoste
proxy statement states that although the Novoste Board is asking for shareholder
approval of this proposal, if for any reason the asset sale transaction is not
completed, this proposal will not be implemented. We support the proposed
amendment to the amended and restated articles of incorporation and related name
change. We anticipate voting in favor of the Name Change Proposal.
STEEL PARTNERS DOES NOT OBJECT TO THE PROPOSAL TO AMEND NOVOSTE'S
AMENDED AND RESTATED ARTICLES OF INCORPORATION TO CHANGE THE NAME OF THE COMPANY
FROM "NOVOSTE CORPORATION" TO "NOVT CORPORATION" (OR, IF THAT NAME IS NOT
AVAILABLE IN FLORIDA, TO "NVTE CORPORATION").
PROPOSAL TO APPROVE AMENDMENTS TO AMENDED AND RESTATED ARTICLES OF
INCORPORATION AND FOURTH AMENDED AND RESTATED BYLAWS TO
REDUCE MINIMUM SIZE OF BOARD OF DIRECTORS TO THREE PERSONS
(PROPOSAL NO. 4 IN THE NOVOSTE PROXY STATEMENT)
You are being asked by the Novoste Board to approve a proposal to
approve an amendment to Novoste's amended and restated articles of incorporation
and its fourth amended and restated bylaws to reduce the minimum size of
Novoste's board of directors from six to three persons ("Minimum Board Size
Proposal"). The full text of the proposed amendment is set forth in the Novoste
proxy statement. We support the proposed amendment and related reduction in the
minimum size of the board of directors to three persons. We anticipate voting in
favor of the Minimum Board Size Proposal.
STEEL PARTNERS DOES NOT OBJECT TO THE PROPOSAL TO AMEND NOVOSTE'S
AMENDED AND RESTATED ARTICLES OF INCORPORATION AND ITS FOURTH AMENDED AND
RESTATED BYLAWS TO REDUCE THE MINIMUM SIZE OF NOVOSTE'S BOARD OF DIRECTORS FROM
SIX TO THREE PERSONS.
-8-
PROPOSAL TO ADJOURN THE SPECIAL MEETING TO PERMIT FURTHER SOLICITATION OF
PROXIES WITH RESPECT TO ASSET SALE PROPOSAL
(PROPOSAL NO. 5 IN THE NOVOSTE PROXY STATEMENT)
You are being asked by the Novoste Board to approve a proposal ("Asset
Sale Vote Adjournment Proposal") to adjourn the Special Meeting to permit
further solicitation of proxies with respect to the proposal to approve the
Asset Sale Proposal. We support the proposed asset sale transaction and to that
end we support the Asset Sale Vote Adjournment Proposal. We anticipate voting in
favor of the Asset Sale Vote Adjournment Proposal.
STEEL PARTNERS DOES NOT OBJECT TO THE PROPOSAL TO ADJOURN THE SPECIAL
MEETING TO PERMIT FURTHER SOLICITATION OF PROXIES WITH RESPECT TO THE PROPOSAL
TO APPROVE THE ASSET SALE TRANSACTION.
-9-
CERTAIN INFORMATION REGARDING THE PROPOSED LIQUIDATION
The Novoste Board unanimously approved the proposed liquidation and
plan of dissolution on November 14, 2005, subject to the approval of
shareholders at the Special Meeting. The plan of dissolution provides that upon
its approval by the Company's shareholders, the Novoste Board, without further
action by the shareholders, may:
o dissolve the Company,
o liquidate its assets,
o pay, or provide for the payment of, any remaining, legally
enforceable obligations of the Company, and
o distribute any remaining assets to the shareholders.
The plan of dissolution and the dissolution and liquidation of Novoste
pursuant thereto would be implemented either after the asset sale transaction is
completed or after the completion of the wind down of the VBT business.
Uncertainties as to the precise net value of the Company's assets and
the ultimate amount of the Company's liabilities make it impossible to predict
the aggregate net amounts that will ultimately be available for distribution to
shareholders or the timing of any such distribution.
If deemed advisable by the Novoste Board for any reason, the Company
may, following dissolution, transfer any of its assets to a trust established
for the benefit of shareholders, subject to the claims of creditors. Thereafter,
these assets will be sold or distributed on terms approved by the trustees. The
Novoste Board is authorized to appoint one or more trustees of the liquidating
trust and to cause the Company to enter into a liquidating trust agreement with
the trustee(s) on such terms and conditions as may be approved by the Novoste
Board. Shareholder approval of the plan of dissolution will also constitute
approval of any such appointment and any liquidating trust agreement.
The foregoing description is not complete and is qualified in its
entirety by reference to the full text of the plan of dissolution which is
attached to the Novoste proxy statement as well as other information concerning
the Liquidation Proposal set forth in the Novoste proxy statement.
-10-
VOTING AND PROXY PROCEDURES
Only shareholders of record on the Record Date will be entitled to
notice of and to vote at the Special Meeting. Each Share is entitled to one
vote. Shareholders who sold Shares before the Record Date (or acquire them
without voting rights after the Record Date) may not vote such Shares.
Shareholders of record on the Record Date will retain their voting rights in
connection with the Special Meeting even if they sell such Shares after the
Record Date. Based on publicly available information, Steel Partners believes
that the only outstanding class of securities of Novoste entitled to vote at the
Special Meeting is the Shares.
Shares represented by properly executed GREEN proxy cards will be voted
at the Special Meeting as marked and, in the absence of specific instructions,
will be voted AGAINST the Liquidation Proposal, AGAINST the Liquidation Vote
Adjournment Proposal, FOR the Asset Sale Proposal, FOR the Name Change Proposal,
FOR the Minimum Board Size Proposal, and FOR the Asset Sale Vote Adjournment
Proposal, in the discretion of the persons named as proxies, on all other
matters as may properly come before the Special Meeting.
QUORUM
In order to conduct any business at the Special Meeting, a quorum must
be present in person or represented by valid proxies. A quorum consists of a
majority of the Shares. All Shares that are voted "FOR", "AGAINST" or "ABSTAIN"
on any matter will count for purposes of establishing a quorum and will be
treated as Shares entitled to vote at the Special Meeting (the "Votes Present").
VOTES REQUIRED FOR APPROVAL
Approval of the Liquidation Proposal, Proposal 3 in the Novoste proxy
statement, and approval of the Asset Sale Proposal, Proposal 1 in the Novoste
proxy statement, in each case requires the affirmative vote of a majority of the
Shares. As a result, Shares represented at the Special Meeting that are marked
"ABSTAIN" and Shares not represented at the Special Meeting, will have the same
effect as votes AGAINST these proposals.
Approval of each of the Name Change Proposal, the Minimum Board Size
Proposal, the Liquidation Vote Adjournment Proposal, and the Asset Sale Vote
Adjournment Proposal (Proposals 2, 4, 5 and 6 in the Novoste proxy statement)
requires that the number of votes cast by the shareholders at the Special
Meeting in favor of the applicable proposal exceeds the number of votes cast
against such proposal. As a result, only shares that are voted "FOR" or
"AGAINST" the proposal will be counted towards the vote requirement. Thus,
Shares represented at the Special Meeting that are marked "ABSTAIN" will not be
counted towards the vote requirement. Additionally, if you do not complete and
return a proxy card and do not vote in person, there will be no effect on the
outcome of the vote on either proposal.
Shareholders may cast their votes by marking the ballot at the Special
Meeting or by specific voting instructions sent with a signed proxy to either
Steel Partners in care of MacKenzie Partners, Inc. at the address set forth on
the back cover of this Proxy Statement or to Novoste at 4350 International
Boulevard, Norcross, Georgia 30093 or any other address provided by Novoste.
-11-
ABSTENTIONS
Abstentions will count as Votes Present for the purpose of determining
whether a quorum is present. Abstentions will not be counted as votes cast on
any proposal set forth in this Proxy Statement. Accordingly, abstentions will
have the effect of a vote against the Liquidation Proposal and the Asset Sale
Proposal, Proposals 3 and 1 in the Novoste proxy statement, and will have no
effect on the outcome of voting on the Name Change Proposal, the Minimum Board
Size Proposal, the Liquidation Vote Adjournment Proposal, and the Asset Sale
Vote Adjournment Proposal, Proposals 2, 4, 5 and 6 in the Novoste proxy
statement.
REVOCATION OF PROXIES
Shareholders of Novoste may revoke their proxies at any time prior to
exercise by attending the Special Meeting and voting in person (although
attendance at the Special Meeting will not in and of itself constitute
revocation of a proxy) or by delivering a written notice of revocation. The
delivery of a subsequently dated proxy which is properly completed will
constitute a revocation of any earlier proxy. The revocation may be delivered
either to Steel Partners in care of MacKenzie Partners, Inc. at the address set
forth on the back cover of this Proxy Statement or to Novoste at 4350
International Boulevard, Norcross, Georgia 30093 or any other address provided
by Novoste. Although a revocation is effective if delivered to Novoste, Steel
Partners requests that either the original or photostatic copies of all
revocations be mailed to Steel Partners in care of MacKenzie Partners, Inc. at
the address set forth on the back cover of this Proxy Statement so that Steel
Partners will be aware of all revocations and can more accurately determine if
and when proxies have been received from the holders of record on the Record
Date of a majority of the outstanding Shares. Additionally, MacKenzie Partners,
Inc. may use this information to contact shareholders who have revoked their
proxies in order to solicit later dated proxies against the Company's
Liquidation Proposal.
IF YOU WISH TO VOTE AGAINST THE COMPANY'S LIQUIDATION PROPOSAL AND THE COMPANY'S
LIQUIDATION VOTE ADJOURNMENT PROPOSAL, PLEASE SIGN, DATE AND RETURN PROMPTLY THE
ENCLOSED GREEN PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED.
SOLICITATION OF PROXIES
The solicitation of proxies pursuant to this Proxy Statement is being
made by Steel Partners. Proxies may be solicited by mail, facsimile, telephone,
telegraph, in person and by advertisements. Steel Partners will not solicit
proxies via the Internet.
Steel Partners has entered into an oral agreement with MacKenzie
Partners, Inc. for solicitation and advisory services in connection with this
solicitation, for which MacKenzie Partners, Inc. will receive a fee not to
exceed $_____.00, together with reimbursement for its reasonable out-of-pocket
expenses. MacKenzie Partners, Inc. will solicit proxies from individuals,
brokers, banks, bank nominees and other institutional holders. Steel Partners
has requested banks, brokerage houses and other custodians, nominees and
fiduciaries to forward all solicitation materials to the beneficial owners of
the Shares they hold of record. Steel Partners will reimburse these record
holders for their reasonable out-of-pocket expenses in so doing. It is
anticipated that MacKenzie Partners, Inc. will employ approximately 25 persons
to solicit Novoste' shareholders for the Special Meeting.
The entire expense of soliciting proxies is being borne by Steel
Partners. Costs of this solicitation of proxies are currently estimated to be
approximately $_____.00. Steel Partners estimates that through the date hereof,
its expenses in connection with this solicitation are approximately $_____.00.
Steel Partners intends to seek reimbursement from Novoste for all expenses it
incurs in connection with the Solicitation. Steel Partners does not intend to
submit the question of such reimbursement to a vote of security holders of the
Company.
-12-
OTHER PARTICIPANT INFORMATION
Each member of the Group is a participant in this solicitation. Warren
G. Lichtenstein is Chairman of the Board, Secretary and the Managing Member of
Steel Partners, L.L.C., a Delaware limited liability company, which in turn is
the general partner of Steel Partners II, L.P., a Delaware limited partnership.
The principal business of Steel Partners II, L.P. is investing in the securities
of small cap companies. The principal business of Steel Partners L.L.C. is
acting as the general partner of Steel Partners II, L.P. The principal
occupation of Mr. Lichtenstein is investing in the securities of small cap
companies. The principal business address of Mr. Lichtenstein, Steel Partners,
L.L.C. and Steel Partners II, L.P. is 590 Madison Avenue, 32nd Floor, New York,
New York 10022. As of the date hereof, Steel Partners is the beneficial owner of
608,301 Shares. By virtue of his positions with Steel Partners, L.L.C. and Steel
Partners II, L.P., Mr. Lichtenstein has the power to vote and dispose of the
Shares owned by Steel Partners II, L.P. Except as set forth in this Proxy
Statement, no participant in this solicitation has a substantial interest,
direct or indirect, by security holdings or otherwise, in any matter to be acted
on at the Special Meeting.
-13-
OTHER COMPANY BUSINESS
According to the Novoste proxy statement, the Novoste Board has no
other matter that may properly come before the Special Meeting.
According to the Novoste proxy statement, all shareholder proposals to
be considered for inclusion in the Company's annual meeting proxy statement next
year pursuant to the shareholder proposal rules of the SEC must be submitted in
writing to Corporate Secretary, Novoste Corporation, 4350 International
Boulevard, Norcross, Georgia 30093 by April 6, 2006. Any such proposal received
after that date will be considered untimely by the Company and may be excluded
from the Company's proxy materials.
According to the Novoste proxy statement, in the event that the 2006
annual meeting of Novoste's shareholders is changed by more than 30 days from
the date of this year's special meeting in lieu of an annual meeting, which was
convened on September 14, 2005, the deadline for providing the Company notice
under the SEC rules will be a reasonable time before the Company begins to print
and mail its proxy soliciting materials. According to the Novoste proxy
statement, Novoste currently expects that the 2006 annual meeting will be held
in the Spring of 2006.
According to the Novoste proxy statement, the Company's by-laws
establish an advance notice procedure with regard to proposals (including
director nominations) that shareholders otherwise desire to introduce at the
annual meeting without inclusion in the Company's proxy statement for that
meeting. According to the Novoste proxy statement, written notice of such
shareholder proposals for the Company's next annual meeting must be received by
the Company's Corporate Secretary at its principal executive offices not later
than June 16, 2006 and must not have been received earlier than May 17, 2006 in
order to be considered timely, and must contain specified information concerning
the matters proposed to be brought before such meeting and concerning the
shareholder proposing such matters. The matters proposed to be brought before
the meeting also must be proper matters for shareholder action. According to the
Novoste proxy statement, in the event that the 2006 annual meeting of Novoste's
shareholders is more than 30 days before or more than 60 days after September
14, 2006 (the first anniversary of the Company's 2005 special meeting in lieu of
an annual meeting), written notice of such shareholder proposals must be
received by Novoste's Corporate Secretary not later than the tenth day following
the earlier of (a) the day on which public announcement of the date of the
Company's 2006 annual meeting is first made by the Company or (b) the date
notice of the annual meeting was mailed to the Company's shareholders.
-14-
STEEL PARTNERS' REQUEST TO CALL A SPECIAL MEETING OF SHAREHOLDERS TO REMOVE
AND REPLACE THE EXISTING MEMBERS OF THE NOVOSTE BOARD
We have requested that Novoste call a second special meeting of
shareholders for the following purposes: (i) to remove all of the existing
directors serving on the Novoste Board at the time of such special meeting,
without cause and (ii) to elect Steel Partners' slate of director nominees, Jack
Howard, John Quicke, James Henderson, Joshua Schechter, Harvey Bazaar and
Leonard Toboroff. Steel Partners has also requested the Novoste Board to submit
Steel Partners' proposals for business at the Special Meeting in order to spare
Novoste and its shareholders the time and expense of holding two meetings.
Novoste has not yet responded to these requests.
OTHER MATTERS AND ADDITIONAL INFORMATION
Steel Partners is unaware of any other matters to be considered at the
Special Meeting. However, should other matters, which Steel Partners is not
aware of a reasonable time before this solicitation, be brought before the
Special Meeting, the persons named as proxies on the enclosed GREEN proxy card
will vote on such matters in their discretion.
Steel Partners has omitted from this Proxy Statement certain disclosure
required by applicable law that is already included in the Novoste proxy
statement. This disclosure includes, among other things, detailed information
relating to the background, reasons for, terms and consequences of the
Liquidation and the asset sale transaction, including risk factors, dissolution
and liquidation estimates and analysis, financial and pro forma information,
accounting treatment, and material federal tax consequences. Shareholders should
refer to the Novoste proxy statement in order to review this disclosure. See
Schedule I for information regarding persons who beneficially own more than 5%
of the Shares and the ownership of the Shares by the management of Novoste.
The information concerning Novoste contained in this Proxy Statement
and Schedule I attached hereto has been taken from, or is based upon, publicly
available information.
STEEL PARTNERS II, L.P.
JANUARY ___, 2006
-15-
SCHEDULE I
THE FOLLOWING TABLE IS REPRINTED FROM THE NOVOSTE PROXY STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 6, 2006.
PRINCIPAL HOLDERS OF NOVOSTE COMMON STOCK
The following table provides information as of the record date with
respect to the ownership of shares of our common stock by each person believed
by the Company's management to be the beneficial owner of more than five percent
of the outstanding common stock. The information is based on the most recent
Schedule 13D or 13G filed with the SEC on behalf of such persons or other
information made available to the Company, and has been adjusted to give effect
to the one-for-four reverse stock split that occurred on November 4, 2005.
Beneficial Ownership
--------------------
Name of Beneficial Owner Shares Percentage
------------------------ ------ ----------
Steel Partners II, L.P. and affiliated entities (1)
590 Madison Avenue, 32nd Floor
New York, New York 10022 608,302 14.9%
JANA Partners LLC (2)
536 Pacific Avenue
San Francisco, California 94133 331,925 8.1%
Trellus Management Company, LLC (3)
350 Madison Avenue 9th Floor
New York, New York 10017 209,608 5.1%
Lloyd I. Miller, III (4)
4550 Gordon Drive
Naples, Florida 34102 208,421 5.1%
---------------------
(1) Information obtained from Schedule 13D/A filed with the SEC by Steel
Partners II, L.P. and Steel Partners, L.L.C. on April 15, 2005. The
Schedule 13D/A discloses that Steel Partners has sole power to vote or
direct the vote of and to dispose of or to direct the disposition of all
these shares. As the sole executive officer and managing member of Steel
Partners L.L.C., Warren G. Lichtenstein may be deemed to beneficially own
all of these shares.
(2) Information obtained from Schedule 13G/A filed with the SEC by JANA
Partners LLC on October 27, 2004. The Schedule 13G discloses that JANA
Partners has sole power to vote or direct the vote of and to dispose of or
to direct the disposition of all these shares.
(3) Information obtained from Schedule 13G/A filed with the SEC by Trellus
Company, LLC and Adam Usdan on February 7, 2005. The Schedule 13G/A
discloses that Trellus and Mr. Usdan have shared power to vote or direct
the vote of and to dispose of or to direct the disposition of all these
shares.
(4) Information obtained from Schedule 13G filed with the SEC by Mr. Miller on
October 14, 2005. The Schedule 13G indicates that Mr. Miller has (i) sole
voting and dispositive power with respect to 144,608 shares as the manager
of a limited liability company that is the general partner of a certain
limited partnership and as an individual and (ii) shared voting and
dispositive power with respect to 63,813 shares as an investment advisor to
the trustee of certain family trusts.
-1-
SCHEDULE I (CONTD.)
THE FOLLOWING TABLE IS REPRINTED FROM THE NOVOSTE PROXY STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 6, 2006
SECURITY OWNERSHIP OF NOVOSTE MANAGEMENT
The following table provides information as of the record date with
respect to the beneficial ownership of the Company's common stock by (1) each
director, (2) each named executive officer as defined by the regulations of the
SEC, and (3) all executive officers and directors as a group. The information in
the table gives effect to the one-for-four reverse stock split that occurred on
November 4, 2005.
Total
Beneficial
Name Shares Options Ownership Percentage (1)
---- ------ ------- ---------- --------------
Thomas D. Weldon (2) [44,693] [34,750] [79,443] [1.9]%
Alfred J. Novak [--] [111,632] [111,632] [2.7]%
Charles E. Larsen [77,791] [8,750] [86,541] [2.1]%
William E. Whitmer [2,250] [10,000] [12,250] [*]
Stephen I. Shapiro [1,054] [8,750] [9,804] [*]
J. Stephen Holmes [--] [8,750] [8,750] [*]
Judy Lindstrom [--] [8,750] [8,750] [*]
Daniel G. Hall [750] [29,093] [29,843] [*]
Robert N. Wood, Jr. (3) [255] [--] [255] [*]
Andrew M. Green (3) [57] [--] [57] [*]
Adam G. Lowe (3) [--] [--] [--] [*]
All executive officers and directors as a group (9) persons [126,850] [220,475] [347,325] [8.3]%
---------------------
(*) Less than 1%
(1) Applicable percentage of ownership as of the record date is based upon
[4,083,721] shares of our common stock outstanding. A person is deemed to
be the beneficial owner of our common stock that can be acquired within 60
days of the record date upon the exercise of options, and that person's
options are assumed to have been exercised (and the underlying shares of
our common stock outstanding) in determining such person's percentage
ownership. Consequently, the denominator for calculating that percentage
may differ for each shareholder.
(2) Includes [625] shares held in trust for the benefit of Mr. Weldon's son,
[625] shares held by Mr. Weldon as custodian for his nephew, [9,917] shares
held by Mr. Weldon's spouse and [16,893] shares held by The Weldon
Foundation, Inc., a Florida not-for-profit corporation in which Mr. Weldon
is a director. Mr. Weldon disclaims beneficial ownership of all shares held
by The Weldon Foundation, Inc.
(3) This executive officer ceased employment with Novoste between January 1,
2005 and the record date and his beneficial ownership is not reflected in
the line entitled "All executive officers and directors as a group."
-1-
IMPORTANT
Tell your Board what you think! Your vote is important. No matter how
many Shares you own, please give Steel Partners your proxy AGAINST the Company's
Liquidation Proposal and AGAINST the Company's Liquidation Vote Adjournment
Proposal by taking three steps:
o SIGNING the enclosed GREEN proxy card,
o DATING the enclosed GREEN proxy card, and
o MAILING the enclosed GREEN proxy card TODAY in the envelope
provided (no postage is required if mailed in the United
States).
If any of your Shares are held in the name of a brokerage firm, bank,
bank nominee or other institution, only it can vote such Shares and only upon
receipt of your specific instructions. Accordingly, please contact the person
responsible for your account and instruct that person to execute the GREEN proxy
card representing your Shares. Steel Partners urges you to confirm in writing
your instructions to Steel Partners in care of MacKenzie Partners, Inc. at the
address provided below so that Steel Partners will be aware of all instructions
given and can attempt to ensure that such instructions are followed.
If you have any questions or require any additional information
concerning this Proxy Statement, please contact MacKenzie Partners, Inc. at the
address set forth below.
MACKENZIE PARTNERS, INC.
105 Madison Avenue
New York, New York 10016
(212) 929-5500 (Call Collect)
proxy@mackenziepartners.com
or
CALL TOLL FREE (800) 322-2885
PRELIMINARY COPY SUBJECT TO COMPLETION
DATED JANUARY 10, 2006
GREEN PROXY
NOVOSTE CORPORATION
SPECIAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF
STEEL PARTNERS II, L.P.
THE BOARD OF DIRECTORS OF NOVOSTE CORPORATION
IS NOT SOLICITING THIS PROXY
P R O X Y
The undersigned appoints Warren G. Lichtenstein and Jack Howard, and each of
them, attorneys and agents with full power of substitution to vote all shares of
common stock of Novoste Corporation ("Novoste" or the "Company") which the
undersigned would be entitled to vote if personally present at the Special
Meeting of Shareholders of the Company scheduled to be held on _______, 2006 at
10:00 A.M. local time, at the Atlanta Marriott Gwinnett Place, 1775 Pleasant
Hill Road, Duluth, Georgia, and including at any adjournments or postponements
thereof and at any meeting called in lieu thereof (the "Special Meeting").
The undersigned hereby revokes any other proxy or proxies heretofore given to
vote or act with respect to the shares of common stock of the Company held by
the undersigned, and hereby ratifies and confirms all action the herein named
attorneys and proxies, their substitutes, or any of them may lawfully take by
virtue hereof. If properly executed, this Proxy will be voted as directed on the
reverse and in their discretion with respect to any other matters as may
properly come before the Special Meeting that are unknown to Steel Partners II,
L.P. a reasonable time before this solicitation.
IF NO DIRECTION IS INDICATED WITH RESPECT TO THE PROPOSALS ON THE REVERSE, THIS
PROXY WILL BE VOTED AGAINST PROPOSALS 3 AND 6 AND IN FAVOR OF PROPOSALS 1, 2, 4
AND 5.
This Proxy will be valid until the sooner of one year from the date indicated on
the reverse side and the completion of the Special Meeting.
IMPORTANT: PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY!
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
GREEN PROXY
STEEL PARTNERS II, L.P. RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 4, AND 5 AND
A VOTE AGAINST PROPOSALS 3 AND 6.
[X] PLEASE MARK VOTE AS IN THIS EXAMPLE
1. ASSET SALE PROPOSAL. Novoste's proposal to approve the proposed asset
sale transaction set forth in the amended and restated asset purchase
agreement, dated as of October 12, 2005, as amended pursuant to
amendment no. 1 to amended and restated asset purchase agreement, dated
as of November 30, 2005, among Novoste, Best Vascular, Inc., a Delaware
corporation, and Best Medical International, Inc., a Virginia
corporation, pursuant to which Novoste will sell substantially all of
the assets related to its vascular brachytherapy (VBT) business to Best
Vascular in exchange for the assumption of certain liabilities related
to the VBT business by Best Vascular.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. NAME CHANGE PROPOSAL. Novoste's proposal to approve an amendment to
Novoste's amended and restated articles of incorporation to change the
name of the Company from "Novoste Corporation" to "NOVT Corporation"
(or, if that name is not available in Florida, to "NVTE Corporation").
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. LIQUIDATION PROPOSAL. Novoste's proposal to approve and adopt a plan of
dissolution and to approve the transactions contemplated thereby
pursuant to which Novoste will be dissolved and liquidated and its
remaining cash ultimately distributed to its shareholders.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. MINIMUM BOARD SIZE PROPOSAL. Novoste's proposal to approve an amendment
to Novoste's amended and restated articles of incorporation and fourth
amended and restated bylaws to reduce the minimum size of Novoste's
board of directors from six to three.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. ASSET SALE VOTE ADJOURNMENT PROPOSAL. Novoste's proposal to adjourn the
Special Meeting to permit further solicitation of proxies with respect
to the proposal to approve the asset sale transaction if such
adjournment proposal is presented by Novoste.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
6. LIQUIDATION VOTE ADJOURNMENT PROPOSAL. Novoste's proposal to adjourn
the Special Meeting to permit further solicitation of proxies with
respect to the proposal to approve and adopt the plan of dissolution
and to approve the transactions contemplated thereby if such
adjournment proposal is presented by Novoste.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
DATED: _____________________________
____________________________________
(Signature)
____________________________________
(Signature, if held jointly)
____________________________________
(Title)
WHEN SHARES ARE HELD JOINTLY, JOINT OWNERS SHOULD EACH SIGN. EXECUTORS,
ADMINISTRATORS, TRUSTEES, ETC., SHOULD INDICATE THE CAPACITY IN WHICH SIGNING.
PLEASE SIGN EXACTLY AS NAME APPEARS ON THIS PROXY.