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: |_| Preliminary Proxy Statement |_| Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |X| Definitive Proxy Statement |_| Definitive Additional Materials |_| Soliciting Material Under Rule 14a-12 NOVOSTE CORPORATION - -------------------------------------------------------------------------------- (Name of Registrant as Specified in Its Charter) STEEL PARTNERS II, L.P. STEEL PARTNERS, L.L.C. WARREN G. LICHTENSTEIN - -------------------------------------------------------------------------------- (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: - -------------------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: - --------------------------------------------------------------------------------(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): - -------------------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: - -------------------------------------------------------------------------------- (5) Total fee paid: - -------------------------------------------------------------------------------- |_| Fee paid previously with preliminary materials: - -------------------------------------------------------------------------------- |_| 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: - -------------------------------------------------------------------------------- (2) Form, Schedule or Registration Statement No.: - -------------------------------------------------------------------------------- (3) Filing Party: - -------------------------------------------------------------------------------- (4) Date Filed: STEEL PARTNERS II, L.P. February 7, 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 Tuesday, March 7, 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 February 7, 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. -1- 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 below. 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 had 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. This request was denied and Novoste has announced that it has scheduled a special meeting of its shareholders for April 13, 2006 to consider these other proposals. Novoste has fixed February 2, 2006 as the record date for the determination of shareholders entitled to notice of and to vote at this other special meeting and at all postponements or adjournments thereof. Thank you for your support, Warren G. Lichtenstein Steel Partners II, L.P. - -------------------------------------------------------------------------------- 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 - -------------------------------------------------------------------------------- -2- SPECIAL MEETING OF SHAREHOLDERS OF NOVOSTE CORPORATION ------------------------- 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 639,914 shares of common stock of Novoste Corporation, a Florida corporation ("Novoste" or the "Company"), representing approximately 15.7% 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 Tuesday, March 7, 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 February 7, 2006. Novoste has set the record date for determining shareholders entitled to notice of and to vote at the Special Meeting as January 27, 2006 (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 the Record Date, Steel Partners, along with all of the participants in this solicitation, were 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 as of the Record Date 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. -3- 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. -4- 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 -5- 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. - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- -6- 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. This estimate was later updated by Novoste to $58,475,000. 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 $58 million of 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 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 $58 million, are a valuable and real asset which will be destroyed in a liquidation. We believe that the Novoste Board has failed to defend shareholder interests by not only allowing but actually supporting 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 -7- 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, then 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 -8- 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. -9- 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, and as further amended pursuant to amendment no. 2 to amended and restated asset purchase agreement, dated as of January 27, 2006, 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. -10- 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. -11- 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. -12- 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, FOR the Asset Sale Vote Adjournment Proposal, and 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. -13- 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 $100,000.00, 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 $175,000.00. Steel Partners estimates that through the date hereof, its expenses in connection with this solicitation are approximately $45,000.00. 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. -14- 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 639,914 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. -15- 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 2006 annual meeting proxy statement 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 the 2005 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. -16- 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 had 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. This request was denied and Novoste has announced that it has scheduled a special meeting of its shareholders for April 13, 2006 to consider these other proposals. Novoste has fixed February 2, 2006 as the record date for the determination of shareholders entitled to notice of and to vote at this other special meeting and at all postponements or adjournments thereof. 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. FEBRUARY 7, 2006 -17- SCHEDULE I THE FOLLOWING TABLE IS REPRINTED FROM THE NOVOSTE PROXY STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 3, 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 608,301 14.9% JANA Partners LLC (2) 536 Pacific Avenue San Francisco, California 94133 331,925 8.1% Wynnefield Capital Management, LLC, Wynnefield Capital, Inc. and affiliated entities (3) 450 Seventh Avenue, Suite 509 New York, New York 10123 217,723 5.3% Trellus Management Company, LLC (4) 350 Madison Avenue 9th Floor New York, New York 10017 209,608 5.1% Lloyd I. Miller, III (5) 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., Steel Partners, L.L.C. and affiliated persons on January 9, 2006. 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/A 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 13D filed with the SEC by Wynnefield Partners Small Cap Value, L.P. (WPSCV), Wynnefield Partners Small Cap Value, L.P. I (WPSCV-I), Wynnefield Small Cap Value Offshore Fund, Ltd. (WSCVOF), Wynnefield Capital Management, LLC (WCM) and Wynnefield Capital, Inc. (WCI) on January 6, 2006. The Schedule 13D disclosed that (i) WCM, as sole general partner of WPSCV and WPSCV-I, and Nelson Obus and Joshua Landes, as the co-managing members of WCM, have sole power to direct the voting and disposition of 67,623 shares beneficially owned directly by WPSCV and 83,675 shares beneficially owned directly by WPSCV-I and (ii) WCI, as sole investment manager of WSCVOF, and Nelson Obus and Joshua Landes, as the principal executive officers of WCI, have sole power to direct the voting and disposition of 66,425 shares beneficially owned directly by WSCVOF. (4) 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. -1- (5) 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. -2- SCHEDULE I (CONTD.) THE FOLLOWING TABLE IS REPRINTED FROM THE NOVOSTE PROXY STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 3, 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 28,500 73,193 1.8% Alfred J. Novak -- 154,132 154,132 3.6% Charles E. Larsen 77,791 9,250 87,041 2.1% William E. Whitmer 2,250 9,250 11,500 * Stephen I. Shapiro 1,054 9,250 10,304 * J. Stephen Holmes -- 9,250 9,250 * Judy Lindstrom -- 9,250 9,250 * Daniel G. Hall 750 35,225 35,975 * Subhash C. Sarda -- 19,608 19,608 * All executive officers and directors as a group (9) persons 126,850 283,715 410,253 9.4% - --------------------- (*) 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- 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 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 March 7, 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 the discretion of the herein named attorneys and proxies or their substitutes 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, and as further amended pursuant to amendment no. 2 to amended and restated purchase agreement, dated as of January 27, 2006, 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 tranactions 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.
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DEFC14A Filing
Novt (NVTP) Inactive DEFC14AProxy in contested solicitation
Filed: 7 Feb 06, 12:00am