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 - -------------------------------------------------------------------------------- (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.] 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- - -------------------------------------------------------------------------------- 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 - -------------------------------------------------------------------------------- -2- SPECIAL MEETING OF SHAREHOLDERS OF NOVOSTE CORPORATION ------------------- 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. - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- 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. -6- 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, -10- 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.
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PREC14A Filing
Steel Partners Ii Inactive PREC14APreliminary proxy with contested solicitation
Filed: 28 Nov 05, 12:00am