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. 1) 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 J.L. HOWARD, INC. JACK HOWARD JOHN QUICKE JAMES HENDERSON JOSHUA SCHECHTER HARVEY BAZAAR LEONARD TOBOROFF - -------------------------------------------------------------------------------- (Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant) Payment of Filing Fee (Check the appropriate box): / / 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:PRELIMINARY COPY SUBJECT TO COMPLETION DATED FEBRUARY 28, 2006 THE NOVOSTE FULL VALUE COMMITTEE March __, 2006 Fellow Shareholders: The members of The Novoste Full Value Committee (the "Committee") are collectively the largest shareholders of Novoste Corporation, a Florida corporation ("Novoste" or the "Company"). The Committee does not believe that the current Board of Directors of the Company is acting in your best interests, as discussed in further detail in the section entitled "Reasons for Removing Existing Directors" in the attached Proxy Statement. The Committee is therefore seeking your support at the special meeting of shareholders (the "Special Meeting"), called by the Company at the request of the Committee, scheduled to be held at ____________________ located at ________________________________, __________ on April 13, 2006, at _______ A.M. (local time) for the purpose of removing all of the directors serving on the Board of Directors of the Company at the time of the Special Meeting, without cause, and electing the Committee's slate of director nominees, Jack Howard, John Quicke, Joshua Schechter, James Henderson, Harvey Bazaar and Leonard Toboroff. The Committee urges you to carefully consider the information contained in the attached Proxy Statement and then support its efforts by signing, dating and returning the enclosed GOLD proxy card today. The attached Proxy Statement and the enclosed GOLD proxy card are first being furnished to the shareholders on or about March __, 2006. If you have already voted against the proposals described in the Proxy Statement, 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 the Committee 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 the Committee in care of MacKenzie Partners, Inc. at the address set forth on the back cover of the attached Proxy Statement. 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 Lichtenstein The Novoste Full Value Committee - -------------------------------------------------------------------------------- IF YOU HAVE ANY QUESTIONS, REQUIRE ASSISTANCE IN VOTING YOUR GOLD PROXY CARD, OR NEED ADDITIONAL COPIES OF THE COMMITTEE'S 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 - -------------------------------------------------------------------------------- SPECIAL MEETING OF SHAREHOLDERS OF NOVOSTE CORPORATION ------------------------- PROXY STATEMENT OF THE NOVOSTE FULL VALUE COMMITTEE ------------------------- PLEASE SIGN, DATE AND MAIL THE ENCLOSED GOLD PROXY CARD TODAY The members of The Novoste Full Value Committee (the "Committee") are collectively the largest shareholders of Novoste Corporation ("Novoste" or the "Company"). The Committee does not believe that the current Board of Directors of Novoste (the "Novoste Board") is acting in the best interests of the shareholders, as discussed in further detail in the section entitled "Reasons for Removing Existing Directors." The Committee is therefore seeking your support at the special meeting of shareholders (the "Special Meeting"), called by the Company at the request of the Committee, scheduled to be held at ______________________________ located at ______________________________, _________, __________ on April 13, 2006, at ___ A.M. (local time) to take the following actions: 1. To remove all of the directors serving on the Board of Directors of the Company at the time of the Special Meeting without cause; and 2. To elect the Committee's slate of director nominees, Jack Howard, John Quicke, Joshua Schechter, James Henderson, Harvey Bazaar and Leonard Toboroff (the "Nominees"). THE EFFECTIVENESS OF PROPOSAL NO. 2 IS CONDITIONED UPON THE EFFECTIVENESS OF PROPOSAL NO. 1. As of March __, 2006, the approximate date on which this Proxy Statement is being mailed to shareholders, the members of the Committee were the beneficial owners of an aggregate of 800,000 shares (the "Shares") of common stock, $0.01 par value (the "Common Stock"), which currently represent approximately 19.6% of the issued and outstanding Common Stock, all of which are entitled to be voted at the Special Meeting. The Committee is composed of Steel Partners II, L.P., a Delaware limited partnership ("Steel Partners"), Steel Partners, L.L.C., a Delaware limited liability company ("Partners LLC"), J.L. Howard, Inc., a New York corporation ("J.L. Howard"), Warren G. Lichtenstein and each of the Nominees. Each of these individuals and entities are members of a group formed in connection with this proxy solicitation and are deemed participants in this proxy solicitation. See "Other Participant Information." This Proxy Statement and the GOLD proxy card are first being furnished to Novoste's shareholders on or about March __, 2006. Novoste has set the record date for determining shareholders entitled to notice of and to vote at the Special Meeting as February 22, 2006 (the "Record Date"). The principal executive offices of Novoste are located at 4350 International Boulevard, Norcross, GA 30093. Shareholders of record at the close of business on the Record Date will be entitled to vote at the Special Meeting. As of the Record Date, there were ______ shares of Common Stock outstanding and entitled to vote at the Special Meeting. The participants in this solicitation intend to vote all of their Shares FOR each of the proposals described herein. THE COMMITTEE URGES YOU TO SIGN, DATE AND RETURN THE GOLD PROXY CARD IN FAVOR OF THE REMOVAL AND REPLACEMENT OF ALL THE DIRECTORS SERVING ON THE NOVOSTE BOARD AT THE TIME OF THE SPECIAL MEETING. IF YOU HAVE ALREADY SENT A PROXY CARD FURNISHED BY NOVOSTE'S MANAGEMENT TO THE NOVOSTE BOARD, YOU MAY REVOKE THAT PROXY AND VOTE FOR EACH OF THE PROPOSALS DESCRIBED IN THIS PROXY STATEMENT BY SIGNING, DATING AND RETURNING THE ENCLOSED GOLD 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. -2- IMPORTANT YOUR VOTE IS IMPORTANT, NO MATTER HOW FEW SHARES OF COMMON STOCK YOU OWN. THE COMMITTEE URGES YOU TO SIGN, DATE, AND RETURN THE ENCLOSED GOLD PROXY CARD TODAY TO VOTE FOR THE REMOVAL AND REPLACEMENT OF THE DIRECTORS SERVING ON THE NOVOSTE BOARD AT THE TIME OF THE SPECIAL MEETING. o If your shares are registered in your own name, please sign and date the enclosed GOLD proxy card and return it to the Committee, 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 GOLD proxy card. The Committee urges you to confirm your instructions in writing to the person responsible for your account and to provide a copy of such instructions to the Committee, 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 -3- BACKGROUND TO SOLICITATION The members of the Committee beneficially own an aggregate of 800,000 shares of Common Stock, representing approximately 19.6% of the issued and outstanding Common Stock. As the largest shareholder of Novoste, we have one goal - to maximize the value of the shares for all shareholders. Our recent efforts to maximize shareholder value is summarized in the following chronology of events leading up to this proxy solicitation: PREVIOUS COMMUNICATIONS WITH NOVOSTE APRIL 4, 2005 LETTER On April 4, 2005, Steel Partners delivered a letter to the Novoste Board (the "April 4 Letter") expressing its disapproval of Novoste's proposed plan to liquidate its vascular brachytherapy products business, its only remaining line of business. Steel Partners stated in the letter that in the event a liquidation proposal is put to a vote of shareholders, Steel Partners would vote all its shares against such proposal. Steel Partners stated in the letter that it believed Novoste should liquidate its operating assets, retain its cash and net operating loss carryforwards and continue as a going concern. Steel Partners also recommended that Novoste should appoint a new and smaller board of directors (to be selected with significant input from the shareholders) who would seek to redeploy Novoste's capital. SEPTEMBER 7, 2005 LETTER On September 7, 2005, Steel Partners again delivered a letter to the Novoste Board (the "September 7 Letter") informing it that Steel Partners had voted all of its shares against the proposals relating to the proposed merger with ONI Medical Systems, Inc. (the "ONI Merger") at Novoste's special meeting of shareholders held on September 14, 2005. Steel Partners stated that it believed ONI Medical Systems, Inc. was a poorly chosen merger candidate and that the ONI Merger provided no benefits or upside to the shareholders, significantly increased the risks to Novoste and its shareholders and had significant costs. Steel Partners also expressed its disapproval of Novoste's formation of rabbi trusts with shareholders' cash. Novoste subsequently terminated its merger agreement with ONI Medical Systems, Inc. after Novoste's shareholders voted down the issuance of shares of Common Stock necessary to complete the merger. NOVEMBER 21, 2005 LETTER On November 15, 2005, the Novoste Board filed a preliminary proxy statement (the "Liquidation Proxy Statement") with the Securities and Exchange Commission ("SEC") requesting its shareholders to attend a special meeting (the "Liquidation Special Meeting") to approve and adopt a plan of dissolution and to approve the transactions contemplated thereby pursuant to which the Company will be dissolved and liquidated (the "Proposed Liquidation") and the Company's remaining cash ultimately would be distributed to its shareholders. The Company stated in the Liquidation Proxy Statement that such a plan of dissolution would provide for the voluntary liquidation, winding up and dissolution of the Company and its current intention is that the dissolution would take place following the completion of the asset sale transaction or the completion of the winding down of its vascular brachytherapy (VBT) products business. If the plan of -4- dissolution is approved by the shareholders of the Company and implemented by it, the Company stated that it will liquidate its remaining assets, satisfy or make reasonable provisions for the satisfaction of its remaining obligations, and make distributions to shareholders of any available liquidation proceeds, as well as remaining cash. If the Novoste Board determines that dissolution and liquidation are not in the best interests of the Company's shareholders, the Novoste Board may direct that the plan of dissolution be abandoned, either before or after shareholder approval, or may amend or modify the plan of dissolution to the extent permitted by Florida law, without the necessity of further shareholder approval. On November 21, 2005, Steel Partners delivered a letter to the Novoste Board (the "November 21 Letter" and together with the April 4 Letter and September 21 Letter, the "Steel Partners Letters") expressing its disappointment with the Novoste Board's decision to file the Liquidation Proxy Statement to approve, among other things, the Proposed Liquidation, which Steel Partners does not believe is in the best interest of Novoste's shareholders. In the letter, Steel Partners also expressed its view that the Novoste Board's authorization to fund over $4 million into rabbi trusts in order to make payments to executives and other employees upon a change in control constituted a blatant disregard by the Novoste Board of the interests of its shareholders. Steel Partners also expressed several concerns as to whether the Novoste Board may have further breached its fiduciary duty with respect to its letter agreement with certain senior executives which would result in payments aggregating over $1.7 million and that one of the rabbi trusts is over-funded by over a $1 million. Steel Partners stated in the letter its intention to vote all of its shares against the Proposed Liquidation, as well as to file proxy material with the SEC and actively solicit proxies in opposition to the Proposed Liquidation. Steel Partners further reiterated its demands that Novoste immediately redeem its shareholder rights plan and that the Novoste Board be reconstituted to include Steel Partners' representatives. On November 28, 2005, Steel Partners filed a preliminary proxy statement soliciting proxies to oppose the approval of the Proposed Liquidation (the "Liquidation Opposition Proxy Statement"). Since then, both Novoste and Steel Partners have filed definitive proxy statements with the SEC. The Liquidation Special Meeting is scheduled to be held on March 7, 2006. FORMATION OF THE COMMITTEE On January 6, 2006, Steel Partners, Partners LLC, J.L. Howard, Warren G. Lichtenstein and the Nominees formed the Committee for the purpose of soliciting proxies in favor of the removal of all the directors serving on the Novoste Board at the time of the Special Meeting without cause and the election of the Nominees. THE COMMITTEE'S REQUEST TO THE COMPANY FOR SPECIAL MEETING On January 6, 2006, Steel Partners caused Cede & Co., the record holder of a majority of the shares beneficially owned by Steel Partners, to deliver a letter to Novoste requesting that the Company call a special meeting of shareholders for the purpose of removing all the existing directors serving on the Novoste Board and replacing them with the Nominees. Steel Partners separately requested the Novoste Board to submit Steel Partners' special meeting proposals for business at the Liquidation Special Meeting in order to spare Novoste and its shareholders the time and expense of holding two meetings. Novoste denied this request. -5- PROPOSAL NO. 1 REMOVAL OF DIRECTORS SERVING ON NOVOSTE BOARD According to the Fourth Amended and Restated By-Laws (the "Bylaws") of Novoste, the shareholders may remove any director with or without cause, at any time, by the affirmative vote of a majority of the issued and outstanding shares entitled to vote for the election of directors at a special meeting of shareholders called for that purpose. We are seeking to remove all of the existing directors serving on the Novoste Board at the time of the Special Meeting without cause. The Novoste Board is currently composed of seven directors, as set forth below: Name Current Position - ---------------------------- ----------------------------------------------- Thomas D. Weldon Chairman of the Board, Director Alfred J. Novak President and Chief Executive Officer, Director J. Stephen Holmes Director Stephen I. Shapiro Director William E. Whitmer Director Charles E. Larsen Director Judy Lindstrom Director REASONS FOR REMOVING EXISTING DIRECTORS The Committee does not believe the current directors serving on the Novoste Board are acting in the best interests of the shareholders for several reasons. First, for the past five years, the Novoste Board has been seeking strategic alternatives to enhance shareholder value without any success. Steel Partners, the largest shareholder of the Company, has consistently offered its advice regarding the Company's strategic alternatives but the Novoste Board has not responded positively to such offers. Second, we believe the Proposed Liquidation recommended by the Novoste Board for approval at the Liquidation Special Meeting is not in the best interests of the shareholders. Third, we believe that the creation of rabbi trusts using the funds of the Company to ensure the payment of certain termination payments of the Company's three highest paid employees in the event of a change of control despite the continued losses of the Company is not the best use of the Company's assets. Accordingly, it is the present intention of the Committee to proceed with the Special Meeting for the purpose of removing the existing directors and replacing them with the Nominees. INEFFECTIVE SEARCH FOR STRATEGIC ALTERNATIVES The Company stated in the Liquidation Proxy Statement that the Novoste Board has been considering various strategic alternatives for several years in anticipation of the potential negative impact of the market release of drug-eluting stents. In the latter part of 2000, the Novoste Board considered various opportunities to sell Novoste to strategic buyers, merge with potential partners or acquire technologies and considered transactions with more than 70 companies throughout 2001 and 2002. The Company also stated in the Liquidation Proxy Statement that in April 2003, the Company engaged a financial advisor to -6- assist it in its review of strategic alternatives but the Novoste Board was also unsuccessful in its efforts and allowed its contract with the financial advisor to expire. In the Liquidation Proxy Statement, the Company also stated that in April 2004, the Company engaged Asante' Partners ("Asante'") as its investment banking and strategic financial advisor. Between April 2004 to May 2005, Asante' identified 75 businesses as potential candidates for a business combination transaction and the Novoste Board was still not successful in identifying a strategic transaction until it entered into the merger agreement with ONI Medical Systems, Inc. which was ultimately turned down by the shareholders. These ineffective attempts to find a strategic alternative had led the Novoste Board to the last resort, the Proposed Liquidation. Since the earlier part of 2005, Steel Partners has made numerous efforts to communicate to the Novoste Board recommendations on how it could maximize shareholder value. In the April 4 Letter, Steel Partners requested the Novoste Board to inform the public and give shareholders an opportunity to state their views before the Company entered into a merger agreement or binding obligations that would utilize the Company's assets. Despite the April 4 Letter, the Novoste Board held the special meeting to consider the ONI Merger and ignored Steel Partners' concerns. Ultimately, the ONI Merger was not approved by the Company's shareholders after much expense to the Company which we believe could have been avoided. The Committee believes that it is time to change the composition of the Novoste Board to a board that is more responsive to the views and concerns of the Company's shareholders. Since the Company is divesting its VBT business, we believe there is no need for the Novoste Board to be comprised of directors with extensive experience in the manufacture and distribution of medical devices. The Committee believes that what the Company needs now is a board of directors with experience in financial restructuring and implementing strategic alternatives for distressed companies. The Committee believes that the Nominees possess this kind of experience. PROPOSED LIQUIDATION We do not believe the Novoste Board is acting in the shareholders' best interests by recommending the Proposed Liquidation. The following is a summary of the reasons why Steel Partners believes the shareholders should vote against the Proposed Liquidation. You should refer to the Liquidation Opposition Proxy Statement for a more detailed discussion on Steel Partners' views on the Proposed Liquidation. The Committee shares the views expressed by Steel Partners in the Liquidation Opposition Proxy Statement. - -------------------------------------------------------------------------------- WE BELIEVE THE PROPOSED LIQUIDATION 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. - -------------------------------------------------------------------------------- -7- - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- -8- ESTABLISHMENT OF RABBI TRUSTS / AMENDING TERMINATION AGREEMENTS On May 20, 2005, the same day that Novoste entered into the merger agreement with ONI Medical Systems, Inc., Novoste established the Novoste Corporation Executive Rabbi Trust (the "Executive Trust") and the Novoste Corporation Employee Rabbi Trust (the "Employee Trust," and collectively with the Executive Trust, the "Trusts") pursuant to revocable trust agreements with AST Trust Company, as trustee. The Trusts were established to secure salary related payments to named Novoste executives and employees in the event of a change of control or potential change of control of the Company. On July 15, 2005, the Novoste Board determined that a potential change of control of Novoste had occurred as a result of Novoste entering into the merger agreement with ONI Medical Systems, Inc. As a result, by their terms, the Trusts became irrevocable until the date on which all liabilities have been satisfied or July 15, 2006 if no change of control of Novoste has occurred by such date. On July 15, 2005, Novoste deposited $3,409,082 to fund the Executive Trust and $641,035 to fund the Employee Trust. According to Company filings, payments of $89,000 had already been made during the quarter ended September 30, 2005. Company management saw fit to set aside $500,000 of the Executive Trust fund to fund beneficiaries' legal costs associated with the enforcement of the Executive Trust. Company management did not provide a similar fund for the Employee Trust. On November 11, 2005, Novoste entered into letter agreements (the "letter agreements") with each of Alfred J. Novak, its President and Chief Executive Officer and a member of the Novoste Board, Daniel G. Hall, its Vice President, General Counsel and Secretary, and Subhash C. Sarda, its Vice President and Chief Financial Officer. The letter agreements superceded the preexisting termination agreements and employment agreements with the Company pursuant to which each such executive was entitled to receive severance payments upon a termination of his employment with Novoste without cause or for good reason. The letter agreements accelerated the timing of payment of the severance amounts to the three executives and provided for the immediate payment of substantial sums to the executives. According to public filings, the aggregate payments to be made by the Company pursuant to the letter agreements and certain settlement and release agreements also entered into by the Company with six former officers of the Company, total over $1.7 million (not including ongoing base salary and benefits through the termination of employment with respect to Messrs. Novak, Hall and Sarda). Novoste also announced that it estimated that the Executive Trust was over-funded in an aggregate amount equal to approximately $1,000,000 (not including the additional $500,000 allocated for legal costs of beneficiaries). We believe that the Novoste Board did not act in its shareholders' best interests in establishing the Trusts. Establishment of the Trusts deprived the Company of critically needed working capital. In addition, we believe that management's decision to set up a legal costs reserve fund of $500,000 to protect against the possibility of a challenge to the legality of the Executive Trust is outrageous. The Committee has not brought a breach of fiduciary duty claim in response to the Novoste Board's decision to create the Trusts at this time. -9- PROPOSAL NO. 2 PROPOSAL TO ELECT THE NOMINEES The Novoste Board is currently composed of seven directors. The Committee has nominated six Nominees. If Proposal 1 is approved resulting in the removal of all the current directors serving on the Novoste Board, the Nominees, if elected, will constitute the entire board of directors. If elected, the Nominees will serve in the class specified next to his name below. We believe the Nominees, who have no current affiliation with the current members of the Novoste Board and management, will increase the quality of oversight by the Company's board of directors and will effectively exercise their fiduciary duties to the shareholders. If elected, the Nominees intend to cause Novoste to seek alternatives to maximize shareholder value including, but not limited to, engaging an investment banking firm to assist in the review of available strategic alternatives, selling the entire company by means of a merger, tender offer or otherwise and taking any other action that will maximize the use of the Company's net operating loss carryforwards. THE NOMINEES The following information sets forth the name, age, business address, present principal occupation, and employment and material occupations, positions, offices, or employments for the past five years of each of the Nominees. Each of the Nominees is a citizen of the United States of America. JACK HOWARD (AGE 44) - Class III Director Nominee - Mr. Howard has been a registered principal of Mutual Securities, Inc., a registered broker-dealer, since 1989. He has served as the Vice President and Vice Chairman of Steel Partners, Ltd. ("SPL"), a management and advisory company that provides management services to Steel Partners II, L.P. and its affiliates, since December 2003. Mr. Howard has served as Chairman of the Board of WebFinancial Corporation ("WebFinancial"), a consumer and commercial lender, since June 2005, as a director of WebFinancial since 1996 and as its Vice President since December 1997. From December 1997 to May 2000, he also served as Secretary, Treasurer and Chief Financial Officer of WebFinancial. He has served as Chairman of the Board and Chief Executive Officer of Gateway Industries, Inc. ("Gateway"), a provider of database development and web site design and development services, since February 2004, as Vice President of Gateway since December 2001 and as a director of Gateway since May 1994. He is also a director of BNS Co. ("BNS"), a real estate management company, WHX Corporation ("WHX"), a holding company, and CoSine Communications, Inc., a global telecommunications equipment supplier. The principal business address of Mr. Howard is c/o Steel Partners II, L.P., 590 Madison Avenue, 32nd Floor, New York, New York 10022. Mr. Howard is deemed to beneficially own 663 shares of Common Stock of the Company owned by J.L. Howard, a corporation controlled by Mr. Howard. For information regarding purchases and sales during the past two years by J.L. Howard of securities of the Company that are deemed to be beneficially owned by Mr. Howard, see Schedule I. -10- JOHN QUICKE (Age 56) - Class III Director Nominee - Mr. Quicke has served as a Vice President of SPL since September 2005. Mr. Quicke has served as a director of WHX since July 2005 and as a Vice President since October 2005. He served as a director, President and Chief Operating Officer of Sequa Corporation, a diversified industrial company, from 1993 to March 2004, and Vice Chairman and Executive Officer of Sequa from March 2004 to March 2005. As Vice Chairman and Executive Officer of Sequa, Mr. Quicke was responsible for the Automotive, Metal Coating, Specialty Chemicals, Industrial Machinery and Other Product operating segments of the company. From March 2005 to August 2005, Mr. Quicke occasionally served as a consultant to Steel Partners and explored other business opportunities. The principal business address of Mr. Quicke is c/o Steel Partners II, L.P., 590 Madison Avenue, 32nd Floor, New York, New York 10022. Mr. Quicke does not beneficially own, and has not purchased or sold during the past two years, any securities of the Company. JAMES HENDERSON (AGE 48) - Class II Director Nominee - Mr. Henderson has served as a Vice President of SPL and its predecessor since August 1999. He has served as a director and Chief Executive Officer of WebFinancial since June 2005, as President and Chief Operating Officer of WebFinancial since November 2003, and was the Vice President of Operations from September 2000 through December 2003. He has served as a director of WebBank, a wholly-owned subsidiary of WebFinancial, since March 2002 and was the acting Chief Executive Officer from November 2004 to May 2005. He has served as a director of BNS since June 2004 and as a director and Chairman of Del Global Technologies Corp., a designer and manufacturer of medical imaging and diagnostic systems, since November 2003 and May 2005, respectively. He served as a director of ECC International Corp., a manufacturer and marketer of computer-controlled simulators for training personnel to perform maintenance and operator procedures on military weapons, from December 1999 to September 2003 and as acting Chief Executive Officer from July 2002 to March 2003. He has served as a director of SL Industries, Inc., a designer and producer of proprietary advanced systems and equipment for the power and data quality industry, since January 2002. Mr. Henderson has served as President of Gateway since December 2001. From January 2001 to August 2001, he served as President of MDM Technologies, Inc., a direct mail and marketing company. The principal business address of Mr. Henderson is c/o Steel Partners II, L.P., 590 Madison Avenue, 32nd Floor, New York, New York 10022. Mr. Henderson does not beneficially own, and has not purchased or sold during the past two years, any securities of the Company. JOSHUA SCHECHTER (AGE 32) - Class II Director Nominee - Mr. Schechter has served as a Vice President of SPL since July 2001. Mr. Schechter was an Associate in the corporate finance group of Imperial Capital LLC, a provider of mergers and acquisitions advisory services, from March 1998 to June 2001. He was a Senior Analyst at Leifer Capital, an investment bank, from August 1997 to February 1998. He was a Tax Consultant at Ernst & Young, LLP from January 1996 to July 1997. He currently serves as a director of WHX and as a director of Jackson Products, Inc., a provider of industrial safety products. The principal business address of Mr. Schechter is c/o Steel Partners II, L.P., 590 Madison Avenue, 32nd Floor, New York, New York 10022. Mr. Schechter does not beneficially own, and has not purchased or sold during the past two years, any securities of the Company. HARVEY J. BAZAAR (AGE 65) - Class I Director Nominee - Mr. Bazaar spent 38 years as an accountant with Coopers & Lybrand and PriceWaterhouseCoopers and retired as a Senior Partner in June 2000. During his time with Coopers & Lybrand, he served as a member of the Executive Committee and was the Managing Partner of the New York office. From September 2001 to December 2002, he briefly came out of retirement to serve as Chief Operating Officer of DML Global Services, a provider of back office services for private equity funds, during which time the company was acquired by BISYS Group, Inc. Mr. Bazaar is currently -11- a director of BKF Capital Group, Inc., a public holding company of an investment management firm. The principal business address of Mr. Bazaar is 13 Skyline Drive, North Caldwell, New Jersey 07006. Mr. Bazaar does not beneficially own, and has not purchased or sold during the past two years, any securities of the Company. LEONARD TOBOROFF (AGE 73) - Class I Director Nominee - Mr. Toboroff has served as a Vice Chairman of the Board of Allis-Chalmers Energy Inc., a provider of products and services to the oil and gas industry, since May 1988 and served as Executive Vice President from May 1989 until February 2002. He served as a director and Vice President of Varsity Brands, Inc. (formerly Riddell Sports Inc.), a provider of goods and services to the school spirit industry, from April 1998 until it was sold in September 2003. Mr. Toboroff has been an Executive Director of Corinthian Capital Group, LLC, a private equity fund, since October 2005. He is also a director of Engex Corp., a closed-end mutual fund. The principal business address of Mr. Toboroff is 39 N. Moore, New York, New York 10013. Mr. Toboroff does not beneficially own, and has not purchased or sold during the past two years, any securities of the Company. Assuming the Novoste Board is still fixed at seven directors at the time of the Special Meeting, if all the current directors serving on the Novoste Board are removed and all the Nominees are elected at the Special Meeting, there will be one vacancy on the Novoste Board. If elected, and to the extent such vacancy in fact exists, it is currently anticipated that the Nominees will fix the number of board members at six. The shareholders of Novoste will not be given an opportunity to fill this vacancy. If the Novoste Board consists of six directors, the potential for a voting deadlock will exist, which could make it difficult for the directors to come to a consensus regarding matters that are important to the Company. The Nominees intend to take the actions described above, subject to their fiduciary duties. However, we cannot guarantee what actions the Nominees will take if elected. There can be no assurance that the actions described above, including maximization of the use of Novoste's net operating loss carryforwards, will be implemented by the Nominees if they are elected or that the election of the Nominees will enhance shareholder value. Your vote to elect the Nominees does not constitute a vote in favor of our value enhancing plans for Novoste. Your vote to elect the Nominees will have the legal effect of replacing the directors serving on the Novoste Board at the time of the Special Meeting with the Nominees. The Nominees will not receive any compensation from the Committee for their services as directors of Novoste. Other than as stated herein, there are no arrangements or understandings between the Committee and any of the Nominees or any other person or persons pursuant to which the nomination described herein is to be made, other than the consent by each of the Nominees to be named in this Proxy Statement and to serve as a director of Novoste if elected as such at the Special Meeting. The Nominees are not beneficiaries of an indemnification agreement in connection with their activities relating to the solicitation. Except as otherwise set forth herein, none of the Nominees is a party adverse to Novoste or any of its subsidiaries or has a material interest adverse to Novoste or any of its subsidiaries in any material pending legal proceedings. The Committee does not expect that the Nominees will be unable to stand for election, but, in the event that such persons are unable to serve or for good cause will not serve, the shares represented by the enclosed GOLD proxy card will be voted for substitute nominees, to the extent this is not prohibited under the Bylaws and applicable law. In addition, the Committee reserves the right to nominate substitute persons, to the extent this is not prohibited under the Bylaws and applicable law, if Novoste makes or announces any changes to its Bylaws or takes or announces any other action that has, or if consummated would have, the effect of disqualifying the Nominees. In any such case, shares represented by the enclosed GOLD proxy card will be voted for such substitute nominees. The Committee reserves the right to nominate additional persons, to the extent this is not prohibited under the Bylaws and applicable law, if Novoste increases the size of the Novoste Board above its existing size. THE COMMITTEE URGES YOU TO VOTE FOR THE ELECTION OF THE NOMINEES ON THE ENCLOSED GOLD PROXY CARD. -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 of Common Stock is entitled to one vote. Shareholders who sell shares of Common Stock 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, the Committee believes that the only outstanding class of securities of Novoste entitled to vote at the Special Meeting is the shares of Common Stock. Shares represented by properly executed GOLD proxy cards will be voted at the Special Meeting as marked and, in the absence of specific instructions, will be voted FOR the proposal to remove the directors serving on the Novoste Board at the time of the Special Meeting, and FOR the proposal to elect the Nominees to the Novoste Board 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 of Common Stock issued and outstanding on the Record Date. All shares that are voted "FOR", "AGAINST" or "ABSTAIN" (or "WITHHOLD" in the case of election of directors) 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 VOTES REQUIRED FOR PROPOSAL 1. Approval of the proposal to remove all the directors serving on the Novoste Board at the time of the Special Meeting requires the affirmative vote of a majority of the issued and outstanding shares entitled to vote for the election of directors. VOTES REQUIRED FOR PROPOSAL 2. A plurality of the total Votes Cast is required for the election of the Nominees (assuming a quorum is present). A vote to "WITHHOLD" for any nominee for director will be counted for purposes of determining the Votes Present, but will have no other effect on the outcome of the vote on the election of directors. Shareholders may cast their votes by marking the ballot at the meeting or by specific voting instructions sent with a signed proxy to either the Committee 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. 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 proposal to remove all the directors -13- serving at the time of the Special Meeting and no effect upon the outcome of voting on the proposal to elect the Nominees. DISCRETIONARY VOTING Shares of Common Stock held in "street name" and held of record by banks, brokers or nominees may not be voted by such banks, brokers or nominees unless the beneficial owners of such shares provide them with instructions on how to vote. 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 the Committee 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, the Committee requests that either the original or photostatic copies of all revocations be mailed to the Committee in care of MacKenzie Partners, Inc. at the address set forth on the back cover of this Proxy Statement so that the Committee 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 of Common Stock. Additionally, MacKenzie Partners, Inc. may use this information to contact shareholders who have revoked their proxies in order to solicit later dated proxies for the proposals described herein. IF YOU WISH TO VOTE FOR THE PROPOSAL TO REMOVE THE DIRECTORS SERVING ON THE NOVOSTE BOARD AT THE TIME OF THE SPECIAL MEETING, AND FOR THE PROPOSAL TO ELECT THE NOMINEES TO THE NOVOSTE BOARD, PLEASE SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED GOLD PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED. SOLICITATION OF PROXIES The solicitation of proxies pursuant to this Proxy Statement is being made by the Committee. Proxies may be solicited by mail, facsimile, telephone, telegraph, in person and by advertisements. The Committee 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 $__________, 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 -14- anticipated that MacKenzie Partners, Inc. will employ approximately 25 persons to solicit Novoste's shareholders for the Special Meeting. The entire expense of soliciting proxies is being borne by Steel Partners pursuant to the terms of the Joint Filing and Solicitation Agreement (as described below). Costs of this solicitation of proxies are currently estimated to be approximately $________. Steel Partners estimates that through the date hereof, its expenses in connection with this solicitation are approximately $_________. Steel Partners intends to seek reimbursement from Novoste for all expenses it incurs in connection with this solicitation. Steel Partners does not intend to submit the question of such reimbursement to a vote of security holders of the Company. -15- OTHER PARTICIPANT INFORMATION Each member of the Committee is a participant in this solicitation. Warren G. Lichtenstein is Chairman of the Board, Secretary and the Managing Member of Partners LLC, a Delaware limited liability company, which in turn is the general partner of Steel Partners, a Delaware limited partnership. The principal business of Steel Partners is investing in the securities of small cap companies. The principal business of Partners LLC is acting as the general partner of Steel Partners. The principal occupation of Mr. Lichtenstein is investing in the securities of small cap companies. J.L. Howard is a family-owned investment company controlled by Jack Howard. Mr. Howard is the sole director and Chairman of the Board, President and Chief Financial Officer of J.L. Howard. The principal business address of Mr. Lichtenstein, Partners LLC, Steel Partners and J.L. Howard is 590 Madison Avenue, 32nd Floor, New York, New York 10022. As of the date hereof, Steel Partners is the beneficial owner of 799,337 shares of Common Stock. By virtue of his positions with Partners LLC and Steel Partners, Mr. Lichtenstein has the power to vote and dispose of the shares owned by Steel Partners. As of the date hereof, J.L. Howard is the beneficial owner of 663 shares of Common Stock. By virtue of his positions with J.L. Howard, Mr. Howard has the power to vote and dispose of the shares owned by J.L. Howard. 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. On January 6, 2006, Steel Partners, Partners LLC, Warren G. Lichtenstein, Jack Howard, James Henderson, John Quicke, Joshua Schechter, Harvey Bazaar and Leonard Toboroff entered into a Joint Filing and Solicitation Agreement in which, among other things, (i) the parties agreed to the joint filing on behalf of each of them of statements on Schedule 13D with respect to the securities of the Company, (ii) the parties agreed to solicit proxies or written consents in favor of the removal of all the directors serving on the Novoste Board at the time of the Special Meeting without cause and the election of the Nominees, or any other person(s) nominated by Steel Partners, to the Novoste Board at the Special Meeting, and (iii) Steel Partners agreed to bear all expenses incurred in connection with the Committee's activities, including approved expenses incurred by any of the parties in connection with the solicitation, subject to certain limitations. Except as set forth herein (including the Schedules hereto), (i) during the past 10 years, no participant in this solicitation has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors); (ii) no participant in this solicitation directly or indirectly beneficially owns any securities of the Company (iii) no participant in this solicitation owns any securities of the Company which are owned of record but not beneficially; (iv) no participant in this solicitation has purchased or sold any securities of the Company during the past two years; (v) no part of the purchase price or market value of the securities of the Company owned by any participant in this solicitation is represented by funds borrowed or otherwise obtained for the purpose of acquiring or holding such securities; (vi) no participant in this solicitation is, or within the past year was, a party to any contract, arrangements or understandings with any person with respect to any securities of the Company, including, but not limited to, joint ventures, loan or option arrangements, puts or calls, guarantees against loss or guarantees of profit, division of losses or profits, or the giving or withholding of proxies; (vii) no -16- associate of any participant in this solicitation owns beneficially, directly or indirectly, any securities of the Company; (viii) no participant in this solicitation owns beneficially, directly or indirectly, any securities of any parent or subsidiary of the Company; (ix) no participant in this solicitation or any of his associates was a party to any transaction, or series of similar transactions, since the beginning of the Company's last fiscal year, or is a party to any currently proposed transaction, or series of similar transactions, to which the Company or any of its subsidiaries was or is to be a party, in which the amount involved exceeds $60,000; and (x) no participant in this solicitation or any of his associates has any arrangement or understanding with any person with respect to any future employment by the Company or its affiliates, or with respect to any future transactions to which the Company or any of its affiliates will or may be a party. OTHER MATTERS AND ADDITIONAL INFORMATION According to the Liquidation 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 Liquidation 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 Liquidation Proxy Statement, Novoste currently expects that the 2006 annual meeting will be held in the Spring of 2006. According to the Liquidation Proxy Statement, the 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 Liquidation 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 Liquidation 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. We anticipate that the members of the Novoste Board will solicit proxies against the Committee's proposals at the Special Meeting and are expected to furnish a proxy statement in connection with their solicitation. THE -17- COMMITTEE HAS OMITTED FROM THIS PROXY STATEMENT CERTAIN DISCLOSURE REQUIRED BY APPLICABLE LAW THAT IS EXPECTED TO BE INCLUDED IN MANAGEMENT'S PROXY STATEMENT RELATING TO THE SPECIAL MEETING. THIS DISCLOSURE IS EXPECTED TO INCLUDE, AMONG OTHER THINGS, CURRENT BIOGRAPHICAL INFORMATION ON NOVOSTE'S CURRENT DIRECTORS, INFORMATION CONCERNING EXECUTIVE COMPENSATION, AND AN ANALYSIS OF CUMULATIVE TOTAL RETURNS ON AN INVESTMENT IN THE COMMON STOCK DURING THE PAST FIVE YEARS. Although we do not have any knowledge indicating that any statement made by the Committee herein is untrue, we do not take any responsibility for the accuracy or completeness of statements taken from public documents and records that were not prepared by or on our behalf, or for any failure by Novoste to disclose events that may affect the significance or accuracy of such information. See Schedule II for information regarding persons who beneficially own more than 5% of the shares of Common Stock and the ownership of the shares by the directors and management of Novoste. The information concerning Novoste contained in this Proxy Statement and the Schedules attached hereto has been taken from, or is based upon, publicly available information. THE NOVOSTE FULL VALUE COMMITTEE March __, 2006 -18- SCHEDULE I TRANSACTIONS IN SECURITIES OF NOVOSTE DURING THE PAST TWO YEARS ALL TRANSACTIONS HAVE BEEN ADJUSTED TO GIVE EFFECT TO THE ONE-FOR-FOUR REVERSE STOCK SPLIT THAT OCCURRED ON NOVEMBER 4, 2005. CLASS QUANTITY PRICE PER DATE OF OF SECURITY PURCHASED UNIT ($) PURCHASE - -------------------------------------------------------------------------------- STEEL PARTNERS II, L.P. - -------------------------------------------------------------------------------- Common Stock 208,500 5.8000 10/19/04 Common Stock 1,600 2.2844 01/31/06 Common Stock 2,000 2.3500 02/01/06 Common Stock 18,313 2.4333 02/02/06 Common Stock 9,700 2.4995 02/06/06 Common Stock 159,423 2.5400 02/15/06 J.L. HOWARD, INC. - -------------------------------------------------------------------------------- Common Stock 1,250 10.9600 04/08/04 Common Stock 905 10.2400 06/29/04 Common Stock 1,325 11.6000 07/07/04 Common Stock 1,250 7.9200 07/30/04 Common Stock (4,749) 5.8000 10/19/04 Common Stock 13 4.2000 02/22/05 Common Stock 150 4.2000 02/22/05 Common Stock 500 3.4400 06/14/05 STEEL PARTNERS, L.L.C. - -------------------------------------------------------------------------------- NONE WARREN G. LICHTENSTEIN - -------------------------------------------------------------------------------- NONE JACK L. HOWARD - -------------------------------------------------------------------------------- NONE JOHN QUICKE - -------------------------------------------------------------------------------- NONE -19- JAMES HENDERSON - -------------------------------------------------------------------------------- NONE JOSHUA SCHECHTER - -------------------------------------------------------------------------------- NONE HARVEY J. BAZAAR - -------------------------------------------------------------------------------- NONE LEONARD TOBOROFF - -------------------------------------------------------------------------------- NONE -20- SCHEDULE II THE FOLLOWING TABLE IS REPRINTED FROM NOVOSTE'S DEFINITIVE 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 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. -21- (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. (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. -22- SCHEDULE II (CONTD.) THE FOLLOWING TABLE IS REPRINTED FROM NOVOSTE'S DEFINITIVE 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. -23- IMPORTANT Tell your Board what you think! Your vote is important. No matter how many shares you own, please give the Committee your proxy FOR the proposal to remove the directors serving on the Novoste Board at the time of the Special Meeting and FOR the proposal to elect the Nominees by taking three steps: o SIGNING the enclosed GOLD proxy card, o DATING the enclosed GOLD proxy card, and o MAILING the enclosed GOLD 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 GOLD proxy card representing your shares. The Committee urges you to confirm in writing your instructions to the Committee in care of MacKenzie Partners, Inc. at the address provided below so that the Committee will be aware of all instructions given and can attempt to ensure that such instructions are followed. If you have any questions or require any additional information concerning this Proxy Statement, please contact MacKenzie Partners, Inc. at the address set forth below. MACKENZIE PARTNERS, INC. 105 Madison Avenue New York, New York 10016 (212) 929-5500 (Call Collect) proxy@mackenziepartners.com or CALL TOLL FREE (800) 322-2885 PRELIMINARY COPY SUBJECT TO COMPLETION DATED FEBRUARY 28, 2006 GOLD 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 Jack Howard and Joshua Schechter, 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 April 13, 2006 at ______ A.M. local time, at the _________________________, 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 IN FAVOR OF PROPOSALS 1 AND 2. 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 GOLD PROXY STEEL PARTNERS II, L.P. RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2. [X] PLEASE MARK VOTE AS IN THIS EXAMPLE 1. THE COMMITTEE'S PROPOSAL TO REMOVE ALL THE DIRECTORS SERVING ON THE COMPANY'S BOARD OF DIRECTORS WITHOUT CAUSE. FOR AGAINST ABSTAIN [ ] [ ] [ ] 2. THE COMMITTEE'S PROPOSAL TO ELECT ITS SLATE OF DIRECTOR NOMINEES TO THE COMPANY'S BOARD OF DIRECTORS. FOR ALL WITHHOLD EXCEPT AUTHORITY TO NOMINEE(S) FOR ALL VOTE FOR ALL WRITTEN NOMINEES NOMINEES BELOW Nominees: Jack Howard [ ] [ ] [ ] John Quicke James Henderson ________________ Joshua Schechter Harvey Bazaar Leonard Toboroff THE EFFECTIVENESS OF PROPOSAL NO. 2 IS CONDITIONED UPON THE EFFECTIVENESS OF PROPOSAL NO. 1. 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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PRRN14A Filing
Steel Partners Ii Inactive PRRN14ARevised preliminary proxy statement filed by non-management
Filed: 28 Feb 06, 12:00am