UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)*
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)
April 3, 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 15 Pages
<PAGE>
SCHEDULE 13D
CUSIP No. 270322100 Page 2 of 15 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 1,523,180
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 1,523,180
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,523,180
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[x]
13 Percent of Class Represented By Amount in Row (11)
13.23%
14 Type of Reporting Person*
OO; IV
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 270322100 Page 3 of 15 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 1,523,180
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 1,523,180
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,523,180
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[x]
13 Percent of Class Represented By Amount in Row (11)
13.23%
14 Type of Reporting Person*
PN; IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 270322100 Page 4 of 15 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 1,523,180
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 1,523,180
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,523,180
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[x]
13 Percent of Class Represented By Amount in Row (11)
13.23%
14 Type of Reporting Person*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 270322100 Page 5 of 15 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 1,523,180
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 1,523,180
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,523,180
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[x]
13 Percent of Class Represented By Amount in Row (11)
13.23%
14 Type of Reporting Person*
OO; IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 270322100 Page 6 of 15 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 238,145
Shares
Beneficially 8 Shared Voting Power
Owned By 1,523,180
Each
Reporting 9 Sole Dispositive Power
Person 238,145
With
10 Shared Dispositive Power
1,523,180
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,761,325
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[_]
13 Percent of Class Represented By Amount in Row (11)
15.27%
14 Type of Reporting Person*
IA; IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 270322100 Page 7 of 15 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 1,523,180
Each
Reporting 9 Sole Dispositive Power
Person 0
With
10 Shared Dispositive Power
1,523,180
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,523,180
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[x]
13 Percent of Class Represented By Amount in Row (11)
13.23%
14 Type of Reporting Person*
IA; IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 270322100 Page 8 of 15 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
DUQUESNE CAPITAL MANAGEMENT, L.L.C.
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
Pennsylvania
7 Sole Voting Power
Number of 0
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 0
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
0
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[x]
13 Percent of Class Represented By Amount in Row (11)
0%
14 Type of Reporting Person*
OO; IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Page 9 of 15
This Amendment No. 3 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. 3 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. 3 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. As a
result of such dispositions, Duquesne LLC (as defined herein) shall no longer be
considered a Reporting Person. 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");
vi) Mr. Stanley F. Druckenmiller ("Mr. Druckenmiller"); and
vii) Duquesne Capital Management, L.L.C. ("Duquesne LLC").
This Statement relates to the Shares held for the accounts of QIP
and Mr. Soros. Mr. Druckenmiller and the Duquesne LLC Clients have disposed of
the Shares held for their respective accounts.
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 1,523,180 Shares
(approximately 13.23% 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 1,456,480 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
1,761,325 Shares (approximately 15.27% 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) 214,545
Shares and 23,600 Shares issuable upon the exercise of 23,600 currently
<PAGE>
Page 10 of 15
exercisable warrants held directly for his personal account and (B) 1,456,480
Shares and 66,700 Shares issuable upon the exercise of 66,700 currently
exercisable warrants held for the account of QIP.
(iii) Duquesne LLC may be deemed the beneficial owner of 0
Shares held for the accounts of the Duquesne LLC Clients.
(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 1,523,180 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 1,523,180 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 238,145 Shares held for his personal account (assuming the exercise of all
of the warrants held for his personal account).
(c) Except for the gift of 25,227 Shares (this number
includes 22,727 Shares and 2,500 warrants currently exercisable into 2,500
Shares) by Mr. Druckenmiller on April 6, 1998 to Bowdoin College and for the
transactions disclosed in Annex B hereto, all of which were effected in the
over-the-counter market in routine brokerage transactions, there have been no
transactions effected with respect to the Shares since February 18, 1998 (the
date of filing of the last statement on Schedule 13D) by any of the Reporting
Persons or the accounts of the Duquesne LLC Clients.
(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.
<PAGE>
Page 11 of 15
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: April 14, 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 15
STANLEY F. DRUCKENMILLER
By: /S/ MICHAEL C. NEUS
----------------------------------
Michael C. Neus
Attorney-in-Fact
DUQUESNE CAPITAL MANAGEMENT, L.L.C.
By: /S/ GERALD KERNER
----------------------------------
Gerald Kerner
Managing Director
<PAGE>
Page 13 of 15
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................................................ 183/1/
Gary Gladstein............................................... 548/2/
Ron Hiram
Robert K. Jermain............................................ 185/3/
David N. Kowitz
Alexander C. McAree
Paul McNulty................................................. 504/4/
Gabriel S. Nechamkin
Steven Okin
Dale Precoda
Lief D. Rosenblatt
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.
- --------
1 This number includes 183 Shares following conversion of 250 warrants,
as well as the sales listed herein.
2 This number includes 548 Shares following conversion of 625 warrants,
as well as the sales listed herein.
3 This number includes 185 Shares following conversion of 250 warrants,
as well as the sales listed herein.
4 This number includes 454 Shares and 50 currently exercisable warrants.
<PAGE>
Page 14 of 15
(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
February 18, 1998 (the date of filing of the last statement on
Schedule 13D).
<TABLE>
<CAPTION>
Date of Nature of Number Price
For the Account of Transaction Transaction of Shares Per Share
- ------------------ ----------- ----------- --------- ---------
<S> <C> <C> <C> <C>
Arminio Fraga 3/27/98 SELL 2,273 $56.65
Gary Gladstein 4/6/98 SELL 5,818 $69.50
Robert K. Jermain 3/31/98 SELL 2,273 $55.91
Sean Warren 4/3/98 SELL 1,818 $66.12
4/9/98 SELL 146 $66.62
</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 45,455 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.
<PAGE>
<TABLE>
<CAPTION>
Page 15 of 15
ANNEX B
RECENT TRANSACTIONS IN THE COMMON STOCK
OF EARTHLINK NETWORK, INC.
----------------------------------------
Date of Nature of Number Price
For the Account of Transaction Transaction of Shares Per Share
- ------------------ ----------- ----------- --------- ---------
<S> <C> <C> <C> <C>
Duquesne LLC Clients 3/25/98 SELL 77,000 $55.2450
4/03/98 SELL 77,000 $66.5478
</TABLE>
