sec document
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 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
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(Name of Registrant as Specified in Its Charter)
STEEL PARTNERS II, L.P.
STEEL PARTNERS, L.L.C.
WARREN G. LICHTENSTEIN
J.L. HOWARD, INC.
JACK HOWARD
JOHN QUICKE
JAMES HENDERSON
JOSHUA SCHECHTER
HARVEY BAZAAR
LEONARD TOBOROFF
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials:
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/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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
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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
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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.
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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
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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
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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.
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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
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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.
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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.
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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.
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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.
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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.
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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:
-----------------------------
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(Signature)
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(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.