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. )
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:
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[STEEL PARTNERS II, L.P.]
November ___, 2005
Fellow Shareholders:
The attached proxy statement and the enclosed WHITE 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. 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.
In addition to the proposal in the Novoste proxy statement to liquidate
(proposal 3 in the Novoste proxy statement), the Novoste Board is soliciting
proxies from holders of shares of Novoste common stock to approve the following
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), and 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). Pursuant to the attached proxy
statement, we are also soliciting proxies from holders of shares of Novoste
common stock on these three proposals. We anticipate voting our shares in favor
of these three proposals, and do not object to these proposals.
The Special Meeting will be held on _____, _________, 2005 at 10:00 a.m.,
local time, at Novoste's headquarters at 4350 International Boulevard, Norcross,
Georgia 30093.
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 WHITE proxy card today. The attached proxy statement and
the enclosed WHITE proxy card are first being furnished to the shareholders on
or about ________ ___, 2005.
If you have already voted for management's proposals relating to the plan
of dissolution pursuant to which Novoste will be dissolved and liquidated, you
have every right to change your vote by signing, dating and returning a later
dated proxy card.
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.
Thank you for your support,
Warren G. Lichtenstein
Steel Partners II, L.P.
-1-
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IF YOU HAVE ANY QUESTIONS, REQUIRE ASSISTANCE IN VOTING YOUR WHITE PROXY CARD,
OR NEED ADDITIONAL COPIES OF STEEL PARTNERS' PROXY MATERIALS, PLEASE CALL
MACKENZIE PARTNERS AT THE PHONE NUMBERS LISTED BELOW.
[LOGO OF 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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-2-
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 WHITE 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 _____, _________, 2005 at 10:00 a.m., local time, at Novoste's headquarters
at 4350 International Boulevard, Norcross, Georgia 30093. 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.
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
WHITE proxy card are first being furnished to Novoste's shareholders on or about
________ ___, 2005.
Novoste has set the record date for determining shareholders entitled to
notice of and to vote at the Special Meeting as November 18, 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 4,083,721 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 ________ ___, 2005, 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 and FOR the other three
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
WHITE PROXY CARD WILL VOTE ON SUCH MATTERS IN THEIR DISCRETION.
STEEL PARTNERS URGES YOU TO SIGN, DATE AND RETURN THE WHITE PROXY CARD AGAINST
THE LIQUIDATION PROPOSAL.
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 BY SIGNING, DATING AND RETURNING THE ENCLOSED WHITE PROXY CARD. THE
-1-
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 TO STEEL PARTNERS, C/O MACKENZIE
PARTNERS, INC. WHICH IS ASSISTING IN THIS SOLICITATION, OR TO THE SECRETARY OF
NOVOSTE, OR BY VOTING IN PERSON AT THE SPECIAL MEETING.
-2-
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 WHITE PROXY
CARD TODAY TO VOTE AGAINST THE COMPANY'S LIQUIDATION 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 WHITE 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 WHITE 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:
[LOGO OF 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
-3-
PROPOSAL TO ADOPT PLAN OF DISSOLUTION AND
DISSOLVE AND LIQUIDATE THE CORPORATION
(PROPOSAL NO. 3 IN THE NOVOSTE PROXY STATEMENT)
You are being asked by Novoste to approve a proposal to adopt a plan of
dissolution pursuant to which Novoste will be dissolved and liquidated
("Liquidation"). 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
WHITE 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 WASTES THE COMPANY'S NET OPERATING LOSS CARRYFORWARDS.
Novoste has a significant amount of net operating loss carryforwards which will
all be lost in the event the Company proceeds with the Liquidation. We believe
that this potentially valuable asset should not be wasted and lost in a
Liquidation.
WE BELIEVE THAT 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. We believe that maintaining a
company's status as a public reporting company preserves maximum flexibility for
the Company in considering future opportunities.
WE BELIEVE THE NOVOSTE BOARD'S PLAN OF LIQUIDATION IS FLAWED. 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 Novoste Board's plan of
liquidation is flawed and does not maximize distributions to shareholders. 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 believe that alternative business
transactions should be pursued, and that it is premature for the Board to
conclude that there are no viable alternatives as a result of a failed search
process.
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WE BELIEVE THE LIQUIDATION PROPOSAL IS NOT IN THE BEST INTERESTS OF
NOVOSTE SHAREHOLDERS AS IT WASTES 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.
-4-
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 waste, 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 it is the directors' 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.
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 for over $60 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 wasting 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. The market routinely offers a premium
for public companies, even those with no operations, as Novoste will likely
have. As a public company with NOL carryforwards and some liquidity, we believe
the Company may very well have a great deal of options to increase value, most
likely in the form of the acquisition of another business. We believe that
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
terminate this potential benefit. This is another example of the Novoste Board
considering an alternative that is a waste of a corporate asset. 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 agree with a majority of Novoste's
shareholders that the attempted ONI Medical Systems merger was not in Novoste's
best interests. 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. Rather, it is incumbent upon the Novoste Board
to continue to seek to maximize shareholder value on behalf of all shareholders.
To do this, we think it is imperative that the Company continue as a public
company.
-5-
WE BELIEVE THE NOVOSTE BOARD'S PLAN OF LIQUIDATION IS FLAWED
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
Novoste Board's plan of liquidation is flawed and does not maximize
distributions to shareholders. 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 board of directors. 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
Novoste Board's procedure, where all of the Company's assets may be transferred
into a liquidating trust would be particularly wasteful.
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, and 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 significantly increased the risks
to the Company and its shareholders and that the ONI Medical Systems merger
transaction had significant costs.
In Novoste's proxy statement, the Novoste Board states that it believes
that 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 poor choice, and we communicated this belief to the Company early on in
the process. A failed search process does not indicate that there are no viable
business alternatives. We find it hard to believe that the Novoste Board is
suggesting that there are no reasonable business alternatives. 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 WHITE PROXY AGAINST THE LIQUIDATION PROPOSAL.
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PROPOSAL TO APPROVE ASSET SALE TRANSACTION PURSUANT TO
AMENDED AND RESTATED ASSET PURCHASE AGREEMENT
(PROPOSAL NO. 1 IN 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, 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 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 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 to the amended and restated articles of
incorporation 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.
-7-
CERTAIN INFORMATION REGARDING THE PROPOSED LIQUIDATION
Novoste's board of directors 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 board of directors, 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 Novoste's board of directors 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 board of directors 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 Novoste's board of directors. 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.
-8-
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 WHITE 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, FOR the Asset Sale Proposal, FOR the
Name Change Proposal, and FOR the Minimum Board Size 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," broker non-votes, if any, and Shares not represented at the Special
Meeting, will have the same effect as votes AGAINST these proposals.
Approval of the Name Change Proposal and the Minimum Board Size Proposal
(Proposals 2 and 4 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," and broker non-votes, if any, 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.
-9-
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. Steel Partners believes that
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 and the
Minimum Board Size Proposal, Proposals 2 and 4 in the Novoste proxy statement.
BROKER NON-VOTES
Shares held in street name that are present by proxy will be considered as
Votes Present for purposes of determining whether a quorum is present.
The term "broker non-vote" refers to shares held in street name that are
not voted with respect to a particular matter, generally because the beneficial
owner did not give any instructions to the broker as to how to vote such shares
on that matter and the broker is not permitted under applicable rules to vote
such shares in its discretion because of the subject matter of the proposal, but
whose shares are present on at least one matter. Such shares shall be counted as
Votes Present for the purpose of determining whether a quorum is present, if
voting instructions are given by the beneficial owner as to at least one of the
matters to be voted on. Broker non-votes will not be counted as votes cast with
respect to matters as to which the record holder has expressly not voted.
Accordingly, Steel Partners believes that broker non-votes 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 upon
the outcome of voting on the Name Change Proposal and the Minimum Board Size
Proposal, Proposals 2 and 4 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, PLEASE SIGN,
DATE AND RETURN PROMPTLY THE ENCLOSED WHITE 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,
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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.
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 Steel Partners, Ltd., 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. 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.
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.
-11-
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 WHITE 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. The Novoste proxy
statement also includes disclosure on deadlines and procedures for submitting
proposals at Novoste' next annual meeting of shareholders under Rule 14a-8 of
the Securities Exchange Act of 1934, as amended, and outside the processes of
Rule 14a-8. 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.
NOVEMBER ___, 2005
-12-
SCHEDULE I
THE FOLLOWING TABLE IS REPRINTED FROM THE NOVOSTE PROXY STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 15, 2005.
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.
SCHEDULE I (CONTD.)
THE FOLLOWING TABLE IS REPRINTED FROM THE NOVOSTE PROXY STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 15, 2005
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."
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 by taking three steps:
o SIGNING the enclosed WHITE proxy card,
o DATING the enclosed WHITE proxy card, and
o MAILING the enclosed WHITE 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 WHITE 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.
[LOGO OF 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
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 (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 _______, 2005 at 10:00 A.M. local time,
at 4350 International Boulevard, Norcross, Georgia 30093, 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 PROPOSAL 3 AND IN FAVOR OF PROPOSALS 1, 2 AND 4.
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
[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, among Novoste Corporation, Best
Vascular, Inc., a Delaware corporation, and Best Medical International,
Inc., a Virginia corporation, pursuant to which Novoste Corporation 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 the
company's amended and restated articles of incorporation to change the
name of Novoste Corporation 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 Corporation 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
the company's amended and restated articles of incorporation and fourth
amended and restated bylaws to reduce the minimum size of the company's
board of directors from six to three.
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.