UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 4)*
EarthLink Network, Inc.
-------------------------------------
(Name of Issuer)
Common Stock, $0.01 Par Value
-------------------------------------
(Title of Class of Securities)
270322100
--------------
(CUSIP Number)
Stephen M. Vine, Esq.
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
590 Madison Avenue
New York, New York 10022
(212) 872-1000
-------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 5, 1998
-------------------------
(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 that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 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 Rule 13d-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 disclosure
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).
Continued on following page(s)
Page 1 of 17 Pages
Exhibit Index: Page 15
<PAGE>
SCHEDULE 13D
CUSIP No. 270322100 Page 2 of 17 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
QUANTUM INDUSTRIAL PARTNERS LDC
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [x]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
Cayman Islands
7 Sole Voting Power
Number of 1,281,666
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 1,281,666
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,281,666
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[x]
13 Percent of Class Represented By Amount in Row (11)
10.62%
14 Type of Reporting Person*
OO; IV
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 270322100 Page 3 of 17 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
QIH MANAGEMENT INVESTOR, L.P.
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [x]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 1,281,666
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 1,281,666
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,281,666
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[x]
13 Percent of Class Represented By Amount in Row (11)
10.62%
14 Type of Reporting Person*
PN; IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 270322100 Page 4 of 17 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
QIH MANAGEMENT, INC.
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [x]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 1,281,666
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 1,281,666
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,281,666
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[x]
13 Percent of Class Represented By Amount in Row (11)
10.62%
14 Type of Reporting Person*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 270322100 Page 5 of 17 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
SOROS FUND MANAGEMENT LLC
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [x]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 1,281,666
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 1,281,666
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,281,666
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[x]
13 Percent of Class Represented By Amount in Row (11)
10.62%
14 Type of Reporting Person*
OO; IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 270322100 Page 6 of 17 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
GEORGE SOROS (in the capacity described herein)
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [x]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
Number of 202,569
Shares
Beneficially 8 Shared Voting Power
Owned By 1,281,666
Each
Reporting 9 Sole Dispositive Power
Person 202,569
With
10 Shared Dispositive Power
1,281,666
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,484,235
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[_]
13 Percent of Class Represented By Amount in Row (11)
12.28%
14 Type of Reporting Person*
IA; IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 270322100 Page 7 of 17 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
STANLEY F. DRUCKENMILLER (in the capacity described herein)
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [x]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
Number of 0
Shares
Beneficially 8 Shared Voting Power
Owned By 1,281,666
Each
Reporting 9 Sole Dispositive Power
Person 0
With
10 Shared Dispositive Power
1,281,666
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,281,666
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[x]
13 Percent of Class Represented By Amount in Row (11)
10.62%
14 Type of Reporting Person*
IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Page 8 of 17
This Amendment No. 4 to Schedule 13D relates to shares of common
stock, $0.01 par value per share (the "Shares"), of EarthLink Network, Inc. (the
"Issuer"). This Amendment No. 4 supplementally amends the initial statement on
Schedule 13D dated February 3, 1997 and all amendments thereto (collectively,
the "Initial Statement"), filed by the Reporting Persons (as defined herein).
This Amendment No. 4 is being filed by the Reporting Persons to report that as a
result of the recent disposition of Shares of the Issuer, the number of Shares
of which certain of the Reporting Persons may be deemed the beneficial owners
has decreased by more than one percent of the total outstanding Shares.
Capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Initial Statement. The Initial Statement is supplementally
amended as follows.
Item 2. Identity and Background.
This Statement is being filed on behalf of each of the following
persons (collectively, the "Reporting Persons"):
i) Quantum Industrial Partners LDC ("QIP");
ii) QIH Management Investor, L.P. ("QIHMI");
iii) QIH Management, Inc. ("QIH Management");
iv) Soros Fund Management LLC ("SFM LLC");
v) Mr. George Soros ("Mr. Soros"); and
vi) Mr. Stanley F. Druckenmiller ("Mr. Druckenmiller").
This Statement relates to the Shares held for the accounts of QIP
and Mr. Soros.
Updated information concerning the Managing Directors of SFM LLC is set forth in
Annex A hereto and incorporated herein by reference.
Item 5. Interest in Securities of the Issuer.
(a) (i) Each of QIP, QIHMI, QIH Management, SFM LLC and Mr.
Druckenmiller may be deemed the beneficial owner of the 1,281,666 Shares
(approximately 10.62% of the total number of Shares which would be outstanding
assuming the exercise of all of the warrants held for the account of QIP). This
number includes 1,214,966 Shares and 66,700 Shares issuable upon the exercise of
66,700 currently exercisable warrants held for the account of QIP.
(ii) Mr. Soros may be deemed the beneficial owner of
1,484,235 Shares (approximately 12.28% of the total number of Shares which would
be outstanding assuming the exercise of all of the warrants held for his
personal account and the account of QIP). This number includes (A) 178,969
Shares and 23,600 Shares issuable upon the exercise of 23,600 currently
exercisable warrants held directly for his personal account and (B) 1,214,966
Shares and 66,700 Shares issuable upon the exercise of 66,700 currently
exercisable warrants held for the account of QIP.
<PAGE>
Page 9 of 17
(b) (i) Each of QIP, QIHMI, QIH Management and SFM LLC (by
virtue of the QIP contract) may be deemed to have the sole power to direct the
voting and disposition of the 1,281,666 Shares held for the account of QIP
(assuming the exercise of all of the warrants held for the account of QIP).
(ii) Each of Mr. Soros and Mr. Druckenmiller, as a result of
their positions with SFM LLC, may be deemed to have shared power to direct the
voting and disposition of the 1,281,666 Shares held for the account of QIP
(assuming the exercise of all of the warrants held for the account of QIP).
(iii)Mr. Soros has the sole power to vote and dispose of
the 202,569 Shares held for his personal account (assuming the exercise of all
of the warrants held for his personal account).
(c) Except for the disposition of 214,514 Shares and 35,576
Shares from the accounts of QIP and Mr. Soros respectively, in a tender offer by
Sprint Corporation at a price of $45.00 per Share on June 5, 1998, there have
been no transactions effected with respect to the Shares since April 13, 1998
(60 days prior to the date hereof) by any of the Reporting Persons.
(d) (i) The shareholders of QIP, including Quantum Industrial
Holdings, Ltd., a British Virgin Islands international business company, have
the right to participate in the receipt of dividends from, or proceeds from the
sale of, the Shares held for the account of QIP in accordance with their
ownership interests in QIP.
(ii) Mr. Soros has the sole right to participate in the
receipt of dividends from, or proceeds from the sale of, the Shares held for his
personal account.
(e) Not applicable.
Each of QIP, QIHMI, QIH Management, SFM LLC and Mr. Druckenmiller
expressly disclaims beneficial ownership of any Shares held directly for the
account of Mr. Soros.
Item 6. Contracts, Arrangements, Understandings in Relationship with
Respect to Securities of the Issuer.
In connection with an underwritten public offering of Shares of
the Issuer each of QIP and Mr. Soros (as well as Mr. Paul McNulty and the trusts
referenced in Annex A) entered into separate Lock-Up Agreements with Deutsche
Morgan Grenfell, Inc. (each a "Lock-Up Agreement"), a copy of the form of which
is attached hereto as Exhibit N and the terms thereof are incorporated herein by
reference in response to this Item 6. In accordance with the Lock-Up Agreement,
each of the signatories has agreed, among other things, with certain limited
exceptions, not to transfer, purchase or dispose of any securities of the Issuer
for a period beginning from the date of execution of the Underwriting Agreement
and continuing to and including the 90 days after the date of the Prospectus.
From time to time, each of the Reporting Persons may lend
portfolio securities to brokers, banks or other financial institutions. These
loans typically obligate the borrower to return the securities, or an equal
amount of securities of the same class, to the lender and typically provide that
the borrower is entitled to exercise voting rights and to retain dividends
during the term of the loan. From time to time to the extent permitted by
applicable laws, each of such persons or entities may borrow the Shares for the
purpose of effecting, and may effect, short sale transactions, and may purchase
securities for the purpose of closing out short positions in such securities.
<PAGE>
Page 10 of 17
Except as set forth herein, the Reporting Persons do not have any
contracts, arrangements, understandings or relationships with respect to any
securities of the Issuer.
Item 7. Material to be Filed as Exhibits.
N. Form of Issuer Lock-Up Agreement.
<PAGE>
Page 11 of 17
SIGNATURES
After reasonable inquiry and to the best of my knowledge and
belief, the undersigned certifies that the information set forth in this
Statement is true, complete and correct.
Date: June 12, 1998
QUANTUM INDUSTRIAL PARTNERS LDC
By: /S/ MICHAEL C. NEUS
----------------------------------
Michael C. Neus
Attorney-in-Fact
QIH MANAGEMENT INVESTOR, L.P.
By: QIH Management, Inc.,
its General Partner
By: /S/ MICHAEL C. NEUS
-----------------------------
Michael C. Neus
Vice President
QIH MANAGEMENT, INC.
By: /S/ MICHAEL C. NEUS
----------------------------------
Michael C. Neus
Vice President
SOROS FUND MANAGEMENT LLC
By: /S/ MICHAEL C. NEUS
----------------------------------
Michael C. Neus
Assistant General Counsel
GEORGE SOROS
By: /S/ MICHAEL C. NEUS
----------------------------------
Michael C. Neus
Attorney-in-Fact
<PAGE>
Page 12 of 17
STANLEY F. DRUCKENMILLER
By: /S/ MICHAEL C. NEUS
----------------------------------
Michael C. Neus
Attorney-in-Fact
<PAGE>
Page 13 of 17
ANNEX A
The following is a list of all of the persons (other than Stanley
Druckenmiller) who serve as Managing Directors of SFM LLC, as well as the number
of Shares, if any, held for the account of each:
Number of Shares
----------------
Scott K. H. Bessent
Walter Burlock
Brian J. Corvese
L. Kevin Dann
Jeffrey L. Feinberg
Arminio Fraga.......................................................... 0
Gary Gladstein......................................................... 0
Ron Hiram
Robert K. Jermain...................................................... 0
David N. Kowitz
Alexander C. McAree
Paul McNulty........................................................... 429/1/
Gabriel S. Nechamkin
Steven Okin
Dale Precoda
Lief D. Rosenblatt
Frank Sica
Mark D. Sonnino
Filiberto H. Verticelli
Sean C. Warren
Each of the above-listed persons is a United States citizen whose principal
occupation is serving as Managing Director of SFM LLC, and each has a business
address c/o Soros Fund Management LLC, 888 Seventh Avenue, 33rd Floor, New York,
New York 10106.
To the best of the Reporting Persons' knowledge:
(a) The consideration used for purchasing the Shares reported above
was the personal funds of each of the Managing Directors who purchased
such Shares.
(b) All of the Shares reported above were acquired for investment
purposes.
(c) Each of the Managing Directors (i) holds the Shares reported above
as being held for his or her own account, (ii) has the sole power to
vote or dispose of such Shares and has the right to receive the
dividends from, or proceeds from the sale of, the Shares, and (iii)
except for the transactions set forth below, all of which were
effected in the over-the-counter market in routine brokerage
transactions, has not effected any transactions in the Shares since
April 13, 1998 (60 days prior to the date hereof).
- --------
/1/ This number includes 379 Shares and 50 currently exercisable warrants.
<PAGE>
<TABLE>
<CAPTION>
Page 14 of 17
Date of Nature of Number Price
For the Account of Transaction Transaction of Shares Per Share
- ------------------ ----------- ----------- --------- ---------
<S> <C> <C> <C> <C>
Arminio Fraga 4/23/98 SELL 183 $71.75
Gary Gladstein 4/22/98 GIFT/2/ 548 N/A
Robert K. Jermain 4/15/98 SELL 185 $66.25
Paul McNulty 6/5/98 SELL/3/ 75 $45.00
</TABLE>
(d) Except as set forth in the Initial Statement and for the Subscription
Agreement, which is incorporated herein by reference, none of the Managing
Directors has any contracts, arrangements, understandings or relationships with
respect to the securities of the Issuer.
An aggregate of 37,920 Shares and 5,000 Warrants are held in five
separate irrevocable trusts for the children of Mr. Soros, one of the trustees
of which is Mr. Gary Gladstein. The Reporting Persons disclaim beneficial
ownership of any shares held in the aforementioned trusts for the benefit of the
children of Mr. Soros.
- --------
/2/ Donated to Gladstein Family Foundation.
/3/ Shares sold in a tender offer by Sprint Corporation.
<PAGE>
Page 15 of 17
EXHIBIT INDEX
Page No.
--------
N. Form of EarthLink Network, Inc. Lock-Up Agreement..................16
Page 16 of 17
EXHIBIT N
EARTHLINK NETWORK, INC.
LOCK-UP AGREEMENT
___________, 1998
DEUTSCHE MORGAN GRENFELL INC.
THE ROBINSON HUMPHREY COMPANY, INC.
INVEMED ASSOCIATES, INC.
as Representatives of the several Underwriters
c/o Deutsche Morgan Grenfell Inc.
1550 El Camino Real, Suite 100
Menlo Park, CA 94025
Re: Earthlink Network, Inc. (the "Company")
Proposed Offering of Common Stock
Ladies and Gentlemen:
This letter is being delivered to you in accordance with the proposed
Underwriting Agreement (the "Underwriting Agreement") between the Company and
the Representatives, as Representatives of the several Underwriters named in
Schedule 1 thereto (the "Underwriters"), relating to an underwritten public
offering of common stock of the Company (the "Common Stock"). The undersigned,
the beneficial owner of shares of the Company's Common Stock, understands that
the Company intends to sell shares of Common Stock of the Company and to grant
to the Underwriters an over-allotment option to purchase additional shares of
Common Stock (the "Offering"). All capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to such terms in the
Underwriting Agreement.
In order to induce the Company and the Underwriters to enter into the
Underwriting Agreement and to proceed with the Offering, and in recognition of
the benefit that such Offering will confer upon the undersigned as a stockholder
of the Company, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned irrevocably
agrees, with each Underwriter to be named in the Underwriting Agreement, for the
benefit of the Company, you and the other Underwriters, that, should the
Offering be effected, the undersigned will not publicly announce any intention
to, will not allow any affiliate or subsidiary, if applicable, to, and will not
itself, without the prior written consent of Deutsche Morgan Grenfell Inc. on
behalf of the Underwriters, (i) offer, pledge, sell, offer to sell, contract to
sell, sell any option or contract to purchase, purchase any option to sell,
grant any option right or warrant to purchase, or otherwise transfer or dispose
of, directly or indirectly, any of the shares of Common Stock or any securities
convertible into, or exercisable or exchangeable for, Common Stock, or (ii)
enter into any swap or other agreement that transfers, in whole or in part, any
of the economic consequences of ownership of the shares of Common Stock or any
securities convertible into, or exercisable or exchangeable for, shares of
Common Stock (whether any such transaction described in clause (i) or (ii) above
is to be settled by delivery of the shares of Common Stock or such other
securities, in cash or otherwise), in each case, beneficially owned (within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) or
<PAGE>
Page 17 of 17
otherwise controlled by the undersigned on the date hereof or hereafter
acquired, for a period beginning from the date of execution of the Underwriting
Agreement and continuing to and including the date 90 days after the date of the
Prospectus; provided, however, that the undersigned may, without the prior
written consent of Deutsche Morgan Grenfell Inc. on behalf of the Underwriters,
transfer shares of Common Stock to members of the undersigned's immediate family
or to trusts for the benefit of members of the undersigned's immediate family or
in connection with bona fide gifts, provided that any transferee agrees to the
transfer restrictions described above.
The undersigned, whether or not participating in the Offering,
confirms that he, she or it understands that the Underwriters and the Company
will rely upon the representations set forth in this agreement in proceeding
with the Offering. This agreement shall be binding on the undersigned and his,
her or its respective successors, heirs, personal representatives and assigns.
If for any reason the Underwriting Agreement shall be terminated prior to the
Closing Date, the agreement set forth above shall likewise be terminated.
The undersigned understands that the Company has not made any
public announcement relating to the Offering, and the Company is prohibited from
doing so by rules and regulations promulgated by the Securities and Exchange
Commission ("SEC") until the Company has filed its registration statement with
SEC. The undersigned agrees to keep confidential all information regarding the
Offering, including without limitation, the anticipated date of the Offering,
the terms of the Offering, and the identity of the underwriters.
Sincerely,
____________________________________________
Signature
____________________________________________
Name
____________________________________________
Title (if Applicable)
The foregoing is accepted and agreed to
as of the date first above written:
DEUTSCHE MORGAN GRENFELL INC.
ROBINSON HUMPHREY COMPANY
INVEMED ASSOCIATES, INC.
By: DEUTSCHE MORGAN GRENFELL INC.,
for itself and on behalf of the Representatives
Signature
Name
Title
