UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
EMERITUS CORPORATION
- --------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, $.0001 par value
- --------------------------------------------------------------------------------
(Title of Class of Securities)
N/A
- --------------------------------------------------------------------------------
(CUSIP Number)
David W. Niemiec
- --------------------------------------------------------------------------------
Saratoga Management Company LLC
535 Madison Avenue
New York, New York 10022
(212) 906-7000
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
December 10, 1999
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of ss. 240.13d-1(e), 240.13d-1(f) or 240-13d-1(g), check the
following box | |.
Note: Schedules filed in paper format shall include a signed original and five
copies of the Schedule, including all exhibits. See ss. 240.132-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
CUSIP No. Page 2 of 18 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Saratoga Partners IV, L.P.
I.R.S. No. 13-4013670
- --------------------------------------------------------------------------------
2 CHECK THE APPROXIMATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
N/A
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF None
SHARES ______________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 5,540,166
REPORTING ______________________________________________
PERSON WITH 9 SOLE DISPOSITIVE POWER
None
----------------------------------------------
10 SHARED DISPOSITIVE POWER
5,540,166
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,540,166 - See Item 5
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
N/A
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.6% - See Item 5
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE,
RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF
THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 2 of 18 Pages
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
CUSIP No. Page 3 of 18 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Saratoga Associates IV LLC
I.R.S. No. 13-4013667
- --------------------------------------------------------------------------------
2 CHECK THE APPROXIMATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
N/A
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF None
SHARES ______________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 5,540,166
REPORTING ______________________________________________
PERSON WITH 9 SOLE DISPOSITIVE POWER
None
----------------------------------------------
10 SHARED DISPOSITIVE POWER
5,540,166
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,540,166 - See Item 5
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
N/A
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.6% - See Item 5
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 3 of 18 Pages
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
CUSIP No. Page 4 of 18 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Saratoga Management Company LLC
I.R.S. No. 13-4013664
- --------------------------------------------------------------------------------
2 CHECK THE APPROXIMATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
N/A
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF None
SHARES ______________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 5,540,166
REPORTING ______________________________________________
PERSON WITH 9 SOLE DISPOSITIVE POWER
None
----------------------------------------------
10 SHARED DISPOSITIVE POWER
5,540,166
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,540,166 - See Item 5
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
N/A
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.6% - See Item 5
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 4 of 18 Pages
<PAGE>
CUSIP No. Page 5 of 18 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
John P. Birkelund
- --------------------------------------------------------------------------------
2 CHECK THE APPROXIMATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
N/A
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF None
SHARES ______________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 5,540,166
REPORTING ______________________________________________
PERSON WITH 9 SOLE DISPOSITIVE POWER
None
----------------------------------------------
10 SHARED DISPOSITIVE POWER
5,540,166
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,540,166 - See Item 5
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
N/A
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.6% - See Item 5
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 5 of 18 Pages
<PAGE>
CUSIP No. Page 6 of 18 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Richard P. Campbell, Jr.
- --------------------------------------------------------------------------------
2 CHECK THE APPROXIMATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
N/A
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF None
SHARES ______________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 5,540,166
REPORTING ______________________________________________
PERSON WITH 9 SOLE DISPOSITIVE POWER
None
----------------------------------------------
10 SHARED DISPOSITIVE POWER
5,540,166
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,540,166 - See Item 5
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
N/A
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.6% - See Item 5
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 6 of 18 Pages
<PAGE>
CUSIP No. Page 7 of 18 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Charles P. Durkin, Jr.
- --------------------------------------------------------------------------------
2 CHECK THE APPROXIMATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
N/A
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF None
SHARES ______________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 5,540,166
REPORTING ______________________________________________
PERSON WITH 9 SOLE DISPOSITIVE POWER
None
----------------------------------------------
10 SHARED DISPOSITIVE POWER
5,540,166
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,540,166 - See Item 5
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
N/A
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.6% - See Item 5
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 7 of 18 Pages
<PAGE>
CUSIP No. Page 8 of 18 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
David W. Niemiec
- --------------------------------------------------------------------------------
2 CHECK THE APPROXIMATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
N/A
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF None
SHARES ______________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 5,540,166
REPORTING ______________________________________________
PERSON WITH 9 SOLE DISPOSITIVE POWER
None
----------------------------------------------
10 SHARED DISPOSITIVE POWER
5,540,166
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,540,166 - See Item 5
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
N/A
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.6% - See Item 5
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Pgae 8 of 18 Pages
<PAGE>
CUSIP No. Page 9 of 18 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Christian L. Oberbeck
- --------------------------------------------------------------------------------
2 CHECK THE APPROXIMATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
N/A
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF None
SHARES ______________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 5,540,166
REPORTING ______________________________________________
PERSON WITH 9 SOLE DISPOSITIVE POWER
None
----------------------------------------------
10 SHARED DISPOSITIVE POWER
5,540,166
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,540,166 - See Item 5
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
N/A
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.6% - See Item 5
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 9 of 18 Pages
<PAGE>
Item 1. Security and Issuer
This Schedule 13D relates to shares of Series B Convertible Preferred
Stock, $.0001 par value, with a stated value of $1,000 per share ("Series B
Preferred Stock") convertible into the common stock, $.0001 par value (the
"Common Stock") of Emeritus Corporation (the "Company") whose principal
executive offices are located at 3131 Elliot Avenue, Suite 500, Seattle,
Washington 98121.
Each share of Series B Convertible Preferred Stock is convertible into
shares of Common Stock of the Company at an initial conversion price of $7.22
per share of Common Stock, subject to antidilution protection.
Item 2. Identity and Background
This Schedule 13D is being filed jointly on behalf of the following persons
(collectively, the "Reporting Persons"): (1) Saratoga Partners IV, L.P., a
Delaware limited partnership ("Saratoga Partners"); (2) Saratoga Associates IV
LLC, a Delaware limited liability company ("Saratoga Associates"); (3) Saratoga
Management Company LLC, a Delaware limited liability company ("Saratoga
Management"); (4) John P. Birkelund; (5) Richard P. Campbell, Jr.; (6) Charles
P. Durkin, Jr.; (7) David W. Niemiec; and(8) Christian L. Oberbeck (the parties
named in clauses (4) through (8) are hereinafter referred to as the "Saratoga
Individuals").
Saratoga Partners is a Delaware limited partnership which makes investments
for long term appreciation. Saratoga Associates is the General Partner of
Saratoga Partners. Saratoga Associates has appointed Saratoga Management as
Manager of Saratoga Partners. Saratoga Management along with Saratoga Associates
makes all of the management and investment decisions on behalf of Saratoga
Partners.
Saratoga Associates is a Delaware limited liability company. As the General
Partner of Saratoga Partners, Saratoga Associates participates in management
decisions made on behalf of Saratoga Partners. Saratoga Associates is managed by
an Executive Committee, the membership of which is set forth in Schedule A.
Saratoga Management is a Delaware limited liability company. As the Manager
of Saratoga Partners, Saratoga Management is responsible for the day to day
management of Saratoga Partners and participates in investment decisions made on
behalf of Saratoga Partners. Saratoga Management is managed by an Executive
Committee, the membership of which is set forth in Schedule B.
The address of the principal business and office of each of the Reporting
Parties is 535 Madison Avenue, New York, New York 10022.
The name, business address, citizenship, present principal occupation or
employment and the name and business address of any corporation or organization
in which each such employment is conducted, of each of the Executive Committee
Members and Members of Saratoga Associates and Saratoga Management are set forth
on Schedules A and B, respectively, attached hereto.
During the past five (5) years, none of the Reporting Persons has been (i)
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to United States
federal or state securities laws or finding any violation with respect to such
laws.
Item 3. Source and Amount of Funds or Other Consideration
Pursuant to a Series B Preferred Stock Purchase Agreement dated as of
December 10, 1999 among the Company and Saratoga Partners (the "Purchase
Agreement", Saratoga Partners will purchase from the Company at an initial and
subsequent closing (the "Closing"), 40,000 shares of Series B Preferred Stock.
Saratoga Partners currently anticipates that the initial closing will take place
on December 29, 1999 and the second
Page 10 of 18 Pages
<PAGE>
closing will take place no later than April 30, 2000, or at such other time that
Saratoga Partners and the Company may mutually agree upon. Saratoga Partners
obligation to purchase the shares of Series B Preferred Stock is conditioned
upon the conditions named in the Purchase Agreement either being waived or
satisfied. In addition, as set forth in Item 4 below, Saratoga Partners may
assign its right to purchase with respect to up to 10,000 shares of the Series B
Preferred Stock. At the Closing, Saratoga Partners will provide consideration
for the purchase from its working capital.
Item 4. Purpose of Transaction.
Saratoga Partners is acquiring the Series B Preferred Stock in the ordinary
course of its investment activities and as contemplated by its organizational
documents.
Pursuant to a shareholders' agreement, by and among the Company, Daniel R.
Baty, B.F., Limited Partnership and Saratoga Partners (the "Shareholders'
Agreement") to be entered into upon the closing of the sale (the "Closing"),
Saratoga Partners is entitled to elect two members to the Company's Board of
Directors. Upon Saratoga Partners' request, Saratoga Partnership may elect
additional directors so as to maintain Saratoga Partnership's representation at
a percentage of the entire Board of Directors (rounded up to the nearest whole
number of directors) that is not less than the percentage of total voting power
of the Company's equity securities attributable to the Series B Preferred Stock.
Saratoga Partners' right to have one or more directors added to the Company's
Board of Directors will terminate if (i) (x) it has sold of record in excess of
50% of its initial investment in the capital stock and (y) the remaining shares
of capital stock held by Saratoga Partners represents less than 5% of the
outstanding Common Stock (on a fully diluted basis), or (ii) Saratoga Partners
is unable to exercise independent voting control over the shares of Capital
Stock owned by it. At the Closing, Charles P. Durkin, Jr. and David W. Niemiec,
both Members of Saratoga Associates and Saratoga Management will be appointed by
Saratoga Partners as members of the Company's Board of Directors.
Saratoga Partners has the right to assign all of its rights and obligations
under the Purchase Agreement, including the right to purchase, to certain
Saratoga Partners' co-investors with respect to up to 10,000 shares of Series B
Preferred Stock. Saratoga Partners is currently in discussions with potential
assignees with respect to up to 10,000 shares of Series B Preferred Stock,
however no assurance can be given that any such assignment will be made. If no
assignment is made, Saratoga Partners will purchase any unassigned shares.
Except as described in this Statement, as of the date hereof, the Reporting
Parties have not formulated any specific plans or proposals which relate to or
would result in: (a) the acquisition by any person of additional securities of
the Company or the disposition of securities of the Company; (b) an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation involving the Company; (c) a sale or transfer of a material amount
of assets of the Company; (d) any change in the present board of directors or
management of the Company, including any plans or proposals to change the number
or term of directors or to fill any existing vacancies on the board; (e) any
material change in the present capitalization or dividend policy of the Company;
(f) any other material change in the Company's business or corporate structure;
(g) changes in the Company's charter or bylaws or other actions which may impede
the acquisition of control of the Company by any person; (h) causing a class of
securities of the Company to be delisted from a national securities exchange or
to cease to be authorized to be quoted in an inter-dealer quotation (i) causing
a class of equity securities of the Company to become eligible for termination
of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of
1934, as amended (the "Act"); or (j) any action similar to any of those
enumerated above.
Item 5. Interests in Securities of the Issuer
(a) and (b) Saratoga Partners beneficially owns 40,000 shares of Series B
Preferred Stock, which upon conversion constitutes 5,540,166 or
Page 11 of 18 Pages
<PAGE>
34.6% of the fully diluted shares of Common Stock of the Company. 10,000 shares
of Series B Preferred Stock are subject to assignment by Saratoga Partners, if
Saratoga Partners exercises its right to assign the right to purchase to certain
Saratoga Partners' co-investors.
Each of Saratoga Associates, Saratoga Management and the Saratoga
Individuals may be deemed to beneficially own the Shares held by the Saratoga
Partners (collectively, the "Investors' Shares"). As the general partner of
Saratoga Partners, Saratoga Associates may be deemed, for purposes of Rule 13d-3
under the Act, to beneficially own indirectly the Investors' Shares that may be
deemed to be owned beneficially by Saratoga Partners. As the Manager of Saratoga
Partners, Saratoga Management may be deemed, for purposes of Rule 13d-3 under
the Act, to beneficially own indirectly the Investors' Shares that may be deemed
to be owned beneficially by Saratoga Partners. Because of the Saratoga
Individuals' ownership interest in Saratoga Associates and Saratoga Management,
the Saratoga Individuals may be deemed, for purposes of Rule 13d-3 under the
Act, to beneficially own indirectly the Investors' Shares that may be deemed to
be beneficially owned indirectly by Saratoga Associates and Saratoga Management.
Each of Saratoga Associates, Saratoga Management and the Saratoga Individuals
disclaims beneficial ownership of the Investors' Shares.
(c) None.
(d) To the best knowledge of the Reporting Parties, no person other than
those identified in this Schedule has the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of, the
securities reported on this Schedule.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understanding or Relationships with
Respect to Securities of the Issuer
Saratoga Management is entitled to receive an advisory fee of $750,000
payable by the Company at the Closing.
Item 7. Material to be Filed as Exhibits
Exhibit 1 - Joint Filing Agreement and Power of Attorney
Page 12 of 18 Pages
<PAGE>
SIGNATURES
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Date: December 20, 1999
Saratoga Partners IV, L.P.
By Saratoga Associates IV LLC,
as General Partner
By Saratoga Management Company LLC,
as Manager
By: /s/ Charles P. Durkin, Jr.
---------------------------------
Name: Charles P. Durkin, Jr.
Title: Executive Committee Member
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Date: December 20, 1999
Saratoga Associates IV LLC
By Saratoga Management Company LLC,
as Manager
By: /s/ Charles P. Durkin, Jr.
---------------------------------
Name: Charles P. Durkin, Jr.
Title: Executive Committee Member
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Date: December 20, 1999
Saratoga Management Company LLC
By: /s/ Charles P. Durkin, Jr.
---------------------------------
Name: Charles P. Durkin, Jr.
Title: Executive Committee Member
Page 13 of 18 Pages
<PAGE>
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Date: December 20, 1999
John P. Birkelund
/s/ John P. Birkelund
-------------------------------------
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Date: December 20, 1999
Richard P. Campbell, Jr.
/s/ Richard P. Campbell, Jr.
-------------------------------------
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Date: December 20, 1999
Charles P. Durkin, Jr.
/s/ Charles P. Durkin, Jr.
-------------------------------------
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Date: December 20, 1999
David W. Niemiec
/s/ David W. Niemiec
-------------------------------------
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Date: December 20, 1999
Christian L. Oberbeck
/s/ Christian L. Oberbeck
-------------------------------------
Page 14 of 18 Pages
<PAGE>
Schedule A
Certain Members and Executive Committee Members
of
Saratoga Associates IV LLC
The names of the Certain Members and Executive Committee Members of
Saratoga Associates IV LLC ("Saratoga Associates") and their business addresses
and principal occupations are set forth below. If no address is given, the
Members' or Executive Officer's business address is that of Saratoga Associates
at 535 Madison Avenue, New York, New York 10022. Unless otherwise indicated,
each occupation set forth opposite an individual's name refers to Saratoga
Associates and each individual is a United States citizen.
Name, Business Address Present Principal Occupation
---------------------- ----------------------------
John P. Birkelund Member, Executive Committee Member
Richard P. Campbell, Jr. Member, Executive Committee Member
Charles P. Durkin, Jr. Member, Executive Committee Member
Christian L. Oberbeck Member, Executive Committee Member
Page 15 of 18 Pages
<PAGE>
Schedule B
Members and Executive Committee Members
of
Saratoga Management Company LLC
The names of the Members and the Executive Committee Members of Saratoga
Management Company LLC ("Saratoga Management") and principal occupations are set
forth below. If no address is given, the Members' or Executive Officer's
business address is that of Saratoga Management at 535 Madison Avenue, New York,
New York 10022. Unless otherwise indicated, each occupation set forth opposite
an individual's name refers to Saratoga Management and each individual is a
United States citizen.
Name, Business Address Present Principal Occupation
---------------------- ----------------------------
John P. Birkelund Member, Executive Committee Member
Richard P. Campbell, Jr. Member, Executive Committee Member
Charles P. Durkin, Jr. Member, Executive Committee Member
David W. Niemiec Member
Christian L. Oberbeck Member, Executive Committee Member
Page 16 of 18 Pages
<PAGE>
EXHIBIT 1
Joint Filing Agreement and Power of Attorney
In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934,
as amended, each of the persons named below agrees to the joint filing of a
Statement on Schedule 13D (including amendments thereto) with respect to the
common stock, par value $0.0001, of Emeritus Corporation, a Delaware
corporation, and further agrees that this Joint Filing Agreement be included as
an exhibit to such filings provided that, as contemplated by Section
13d-1(k)(l)(ii), no person shall be responsible for the completeness or accuracy
of the information concerning the other persons making the filing, unless such
person knows or has reason to believe that such information is inaccurate. This
Joint Filing may be executed in any number of counterparts, all of which
together shall constitute one and the same instrument.
Each of Saratoga Partners IV, L.P., Saratoga Associates IV LLC, Saratoga
Management Company LLC, John P. Birkelund, Richard P. Campbell, Jr., Charles P.
Durkin, Jr., David W. Niemiec, and Christian L. Oberbeck (the "Named Parties")
hereby constitutes and appoints each of Charles P. Durkin, Jr., David W. Niemiec
and Christian L. Oberbeck, acting singly, as the true and lawful
attorneys-in-fact, with full power of substitution in any and all capacities, to
execute for and on behalf of the Named Parties, the Schedule 13D to which this
Joint Filing Agreement and Power of Attorney is an exhibit and all amendments
thereto, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, the issuer
and relevant stock exchanges. Each of the Named Parties hereby grants to such
attorneys-in-fact full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as the attorney-in-fact might or could, and hereby ratifies and
confirms all that said attorneys-in-fact or their substitute or substitutes may
lawfully do or cause to be done by virtue hereof.
The undersigned acknowledges that the foregoing attorneys-in-fact, in
serving in such capacity at the request of the undersigned, are not assuming any
of the undersigned's responsibilities to comply with Section 13(d) of the
Securities Exchange Act of 1934.
The powers hereby conferred upon the said attorneys-in-fact shall continue
in force until notice of the revocation of this Power of Attorney has been
received by the said attorneys-in-fact.
Date: December 20, 1999
Saratoga Partners IV, L.P.
By Saratoga Associates IV LLC,
as General Partner
By Saratoga Management Company LLC,
as Manager
By: /s/ Charles P. Durkin, Jr.
---------------------------------
Name: Charles P. Durkin, Jr.
Title: Executive Committee Member
Page 17 of 18 Pages
<PAGE>
Date: December 20, 1999
Saratoga Associates IV LLC
By Saratoga Management Company LLC,
as Manager
By: /s/ Charles P. Durkin, Jr.
---------------------------------
Name: Charles P. Durkin, Jr.
Title: Executive Committee Member
Date: December 20, 1999
Saratoga Management Company LLC
By: /s/ Charles P. Durkin, Jr.
---------------------------------
Name: Charles P. Durkin, Jr.
Title: Executive Committee Member
Date: December 20, 1999
John P. Birkelund
/s/ John P. Birkelund
-------------------------------------
Date: December 20, 1999
Richard P. Campbell, Jr.
/s/ Richard P. Campbell, Jr.
-------------------------------------
Date: December 20, 1999
Charles P. Durkin, Jr.
/s/ Charles P. Durkin, Jr.
-------------------------------------
Date: December 20, 1999
David W. Niemiec
/s/ David W. Niemiec
-------------------------------------
Date: December 20, 1999
Christian L. Oberbeck
/s/ Christian L. Oberbeck
-------------------------------------
Page 18 of 18 Pages
