UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/x/ Soliciting Material Pursuant to Section 240.14a-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. ("Steel"), together with the other participants
named herein, is filing materials contained in this Schedule 14A with the
Securities and Exchange Commission in connection with a possible preliminary
filing with the SEC of a proxy statement and accompanying proxy card to be used
to solicit votes against a proposal by Novoste Corporation (the "Company") to
adopt a plan of dissolution pursuant to which the Company will be dissolved and
liquidated. This liquidation proposal is scheduled to be submitted to a vote of
the shareholders of the Company at a special meeting of shareholders scheduled
to be held on a date to be specified by the Company (the "Special Meeting").
Item 1: On November 21, 2005, Steel sent the following letter to the
Board of Directors of the Company.
STEEL PARTNERS II, L.P.
590 MADISON AVENUE
32ND FLOOR
NEW YORK, NEW YORK 10022
November 21, 2005
FOR DISSEMINATION TO NOVOSTE BOARD OF DIRECTORS
Novoste Corporation
4350 International Blvd.
Norcross, GA 30093
Attn: Corporate Secretary
Gentlemen:
Steel Partners II, L.P. ("Steel"), the largest stockholder of Novoste
Corporation ("Novoste"), is extremely disappointed with the Board's decision to
file its preliminary proxy statement to approve a plan of liquidation without
addressing the serious concerns we have raised. As we have clearly expressed to
you in letters and conversations, Steel does not believe a liquidation is in the
best interest of the shareholders. As a result of a liquidation, Novoste would
lose its ability to utilize its substantial net operating loss carryforwards, a
significant non-balance sheet asset. We continue to believe that there is also
additional intrinsic value in remaining a public company. We also strongly
oppose the Board's ability under the proposed plan to transfer all the proceeds,
at its sole discretion, into a liquidating trust. In our experience,
professional trustees do a poor job of 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.
As the Board should be well aware, Steel believes that it was a blatant
disregard for the interests of the shareholders that the Board authorized the
funding of over $4 million into rabbi trusts in order to make payments to
executives and other employees upon a change in control. We also have several
concerns as to whether the Board may have further breached its fiduciary duty
with respect to its "severance settlement" agreement with certain senior
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executives which Novoste announced on November 11, 2005 which will result in
payments aggregating over $1.7 million. To add insult to injury, we recently
learned from public filings that one of the rabbi trusts is over-funded by over
a $1 million.
We implore the Board to learn from its past mistakes, do not follow the
same pattern as with the failed ONI Medical Systems merger where the Board
ignored shareholder concerns and proceeded with a failed and costly solicitation
prior to terminating the merger agreement for lack of shareholder support. The
Board should not continue supporting yet another proposal that will again waste
shareholder assets.
We state for the record that Steel intends to vote all of its 608,301
shares of Novoste (14.9% of the outstanding shares) against the liquidation
proposal, as well as to file proxy material with the SEC and actively solicit
proxies in opposition to the liquidation. Steel has no objection to the
proposals to sell the vascular brachytherapy business and to reduce the minimum
size of the board. Given Steel's substantial ownership position, it should be
obvious to the Board that it should promptly withdraw the liquidation proposal
and stop wasting any more time and resources with respect to this matter. We
would interpret the Board's failure to immediately withdraw the liquidation
proposal as a clear indication that the Board has no intention to maximize
shareholder value. Steel also reiterates its demands that Novoste immediately
redeem its shareholder rights plan and that the Board of Directors be
immediately reconstituted to include Steel representatives.
Steel has evaluated all of its options with respect to its investment
in Novoste and intends to act accordingly in the event we do not receive a
favorable response to this letter.
Very truly yours,
STEEL PARTNERS II, L.P.
By: Steel Partners, L.L.C.
General Partner
By: /s/ Warren G. Lichtenstein
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Warren G. Lichtenstein
Managing Member
CERTAIN INFORMATION CONCERNING PARTICIPANTS
Steel Partners II, L.P. ("Steel"), together with the other participants
named herein, may make a preliminary filing with the Securities and Exchange
Commission ("SEC") of a proxy statement and an accompanying proxy card to be
used to solicit votes against a proposal by Novoste Corporation (the "Company")
to adopt a plan of dissolution pursuant to which the Company will be dissolved
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and liquidated. This liquidation proposal is scheduled to be submitted to a vote
of the shareholders of the Company at a special meeting of shareholders (the
"Special Meeting"), which has not yet been scheduled.
IN THE EVENT THAT A DETERMINATION IS MADE TO FILE A PROXY STATEMENT
WITH THE SEC, STEEL STRONGLY ADVISES ALL SHAREHOLDERS OF THE COMPANY TO READ THE
PROXY STATEMENT WHEN IT IS AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT
INFORMATION. SUCH PROXY STATEMENT, IF FILED, WILL BE AVAILABLE AT NO CHARGE ON
THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN ANY
SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT, IF FILED, WITHOUT
CHARGE UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS'
PROXY SOLICITOR, MACKENZIE PARTNERS, INC., AT ITS TOLL-FREE NUMBER: (800)
322-2885 OR EMAIL: PROXY@MACKENZIEPARTNERS.COM.
The participants in the proxy solicitation are Steel Partners II, L.P.,
Steel Partners, L.L.C. and Warren G. Lichtenstein (together, the
"Participants").
Information regarding the Participants and their direct or indirect
interests is available in their Schedule 13D, jointly filed with the SEC on
September 29, 2003, as subsequently amended.
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