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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
AMENDMENT NO. 1
EARTHLINK NETWORK, INC.
(NAME OF ISSUER)
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COMMON STOCK, $.01 PAR VALUE PER SHARE
(TITLE OF CLASS OF SECURITIES)
270322100
(CUSIP NUMBER OF CLASS OF SECURITIES)
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GRAYSON L. HOBERG
EARTHLINK NETWORK, INC.
3100 NEW YORK DRIVE
PASADENA, CALIFORNIA 91107
(626) 296-2400
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS)
COPIES TO:
DANIEL O. KENNEDY, ESQ.
HUNTON & WILLIAMS
NATIONSBANK PLAZA, SUITE 4100
600 PEACHTREE ST., N.E.
ATLANTA, GEORGIA 30308
(404) 888-4000
If the filing person has previously filed a statement on Schedule 13G, and is
filing this schedule to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4),
check the following box. [_]
(Continued on following pages)
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(Page 1 of 6 Pages)
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CUSIP No. 270322100
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13D/A
Page 2 of 6 Pages
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1 NAME OF REPORTING PERSON:
IRS IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY):
Kevin M. O'Donnell
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(A)/X/
(B)/ /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS:
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E):
/ /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION:
UNITED STATES OF AMERICA
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7 SOLE VOTING POWER:
NUMBER OF 0 Shares
SHARES -----------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER:
OWNED BY 4,889,723 Shares*
EACH -----------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER:
PERSON WITH 0 Shares
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10 SHARED DISPOSITIVE POWER:
4,889,723 Shares*
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
4,754,361 Shares*
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/ /
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13 PERCENT OF CLASS REPRESENTED TO AMOUNT IN ROW (11):
34.5%
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14 TYPE OF REPORTING PERSON*:
IN
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* Reflects highest number of shares as to which voting power or dispositive
power is shared by virtue of membership in the group described in Item 2.
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13D/A Page 3 of 6 Pages
ITEM 1. SECURITY AND ISSUER.
The name of the issuer is EarthLink Network, Inc., a Delaware corporation (the
"Company"), and the address of its principal executive offices is 3100 New York
Drive, Pasadena, CA 91107.
This Amendment No. 1 to Schedule 13D relates to a Schedule 13D that was filed
in connection with the offer by Sprint Corporation, a Kansas Corporation
("Sprint"), to purchase 1,250,000 shares of common stock of the Company, par
value $.01 per share (the "Shares" or "Common Stock"), at a price of $45 per
Share, net to each seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated February 18, 1998 (the
"Offer to Purchase"), and in the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute
the "Offer"). A copy of the Offer to Purchase was attached to the original
Schedule 13D as Exhibit (2)(a). There were 14,194,456 Shares outstanding as
of July 13, 1998.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(f) The person filing this Amendment is Kevin M. O'Donnell, whose
business address is 3100 New York Dr., Pasadena, California 91107. Mr.
O'Donnell is a director of the Company and is the President of O'Donnell &
Associates, a venture capital firm. During the last five years, Mr. O'Donnell
has not been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors) and was not a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction as a result of
which he was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation of such law. Mr.
O'Donnell is a U.S. citizen.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The information set forth in Section 10 ("Source and Amount of Funds") of the
Offer to Purchase is incorporated herein by reference.
ITEM 4. PURPOSE OF TRANSACTION.
(a)-(g); (j) In order to induce Sprint and Sprint Communications Company L.P.
("Sprint L.P.") to enter into the Investment Agreement dated February 10,
1998 among Sprint, Sprint L.P., the Company, Dolphin, Inc. ("Newco") and
Dolphin Sub, Inc. (the "Investment Agreement") and to perform the
transactions contemplated thereby (as described under the caption
"Introduction" and in Section 12 ("Purpose of the Offer; The Investment
Agreement; Ancillary Agreements") of the Offer to Purchase, which is
incorporated herein by reference), certain stockholders of the Company,
including Mr. O'Donnell, (the "Granting Stockholders"), entered into an
Agreement to Vote and Tender Stock dated February 10, 1998 (the "Agreement to
Vote Stock"), all as described in the original Schedule 13D.
Also, simultaneous with the execution of the Investment Agreement, Sprint and
the following stockholders of the Company (the "SA Stockholders") entered
into a Stockholders Agreement (the "Stockholders Agreement"), which became
effective upon the Closing of the transactions contemplated by the Investment
Agreement, and covers all of the Shares or other equity securities of Newco
they own of record or beneficially and those that they received in the Merger
(as defined under the caption "Introduction" in the Offer to Purchase), or
are convertible into Newco Common Stock or are receivable in respect thereof
("Covered Shares"): Sky Dayton, Chairman of the Board of the Company; Quantum
Industrial Partners LDC; Kevin M. O'Donnell, a director of the Company; Reed
Slatkin, a director of the Company (through Reed Slatkin & Associates);
George Soros; and Sidney Azeez, a director of the Company. The Stockholders
Agreement obligates the SA Stockholders to (i) vote all of the Covered Shares
in favor of a Sprint Offer or Qualified Offer (as the terms "Sprint Offer"
and "Qualified Offer" are defined in Section 12 of the Offer to Purchase
under the subcaptions "Purchases of Additional Equity Securities"; "Business
Combinations" and "Third Party Offers", respectively) involving a business
combination or related matter, and (ii) to tender all of the Covered Shares
into a tender offer initiated by Sprint to effect a Sprint Offer or a
Qualified Offer.
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13D/A Page 4 of 6 Pages
The reporting person may be deemed to have been a member of a group with
Sprint, Sprint L.P. and the other Granting Stockholders with respect to the
Shares subject to the Agreement to Vote and Tender Stock, and thus may have
been viewed as sharing voting and dispositive power with respect to such
Shares. The Agreement to Vote and Tender Stock was terminated on June 5,
1998, and thus such voting group was dissolved on such date.
The reporting person may also be deemed to be a member of a group with
Sprint, Sprint L.P. and the other SA Stockholders with respect to the Covered
Shares subject to the Stockholders Agreement, and thus may be viewed as
sharing voting and dispositive power with respect to the Covered Shares.
The reporting person is making a separate filing to report the termination of
the Agreement to Vote Stock and his remaining shared beneficial ownership of
the Covered Shares resulting from his membership in the group described in
the immediately preceding paragraph. The reporting person does not have
knowledge of the information called for by Instruction C to Schedule 13D with
respect to the other members of such groups and therefore is not required to
report such information in this Schedule 13D pursuant to Rule 13d-1(f)(2),
except for the information set forth under the caption "Beneficial Ownership
of Common Stock" in the Company's Proxy Statement dated January 23, 1998.
The information set forth under the caption "Introduction" and in Section 12
("Purpose of the Offer, The Investment Agreement; Ancillary Agreements") of
the Offer to Purchase is also incorporated herein by reference.
(h) None.
(i) None.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a)-(b); As a result of the termination of the Agreement to Vote and Tender
Stock and the reporting person being a party to the Stockholders' Agreement,
the aggregate maximum number of beneficially owned Shares reported for the
reporting person equals 4,889,723 Shares, which reflects the highest number
of Shares as to which voting power or dispositive power is shared by virtue
of membership in the group described in Item 2. Such figure includes 787,928
Shares held by the reporting person, 7,538 Shares held by the reporting
person's son, and 182,500 Shares subject to warrants exercisable within 60
days of July 13, 1998. The aggregate maximum number of Shares reported for
the reported person represents 34.5% of the Shares outstanding as of July 13,
1998.
The reporting person disclaims beneficial ownership of the Shares held by his
son and the Shares issuable upon the exercise of options held by his son.
(c) During the past 60 days, the reporting person effected the following
transaction in the Company's Common Stock: On June 5, 1998, the reporting
person sold 156,636 Shares to Sprint at a per share price of $45 pursuant to
the consummation of the Offer.
(d)-(e) Not Applicable.
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13D/A Page 5 of 6 Pages
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SECURITIES OF THE ISSUER.
The information set forth under the caption "Introduction" and in Section 12
("Purpose of the Offer; The Investment Agreement; Ancillary Agreements--
Stockholders' Agreement") of the Offer to Purchase is incorporated herein by
reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
(1) Not applicable.
(2)(a) Offer to Purchase, dated February 18, 1998.*
(2)(b) Investment Agreement, dated February 10, 1998, between Sprint
Corporation, Sprint Communications Company L.P., EarthLink Network,
Inc., Dolphin, Inc. and Dolphin Sub, Inc.*
(3)(a) Stockholders' Agreement, dated February 10, 1998, between Sprint
Corporation, Sprint Communications Company L.P., the Company, Dolphin,
Inc. and certain stockholders of EarthLink Network, Inc.*
(3)(b) Agreement to Vote and Tender Stock, dated February 10, 1998, between
Sprint Corporation, Sprint Communications Company L.P. and certain
stockholders of EarthLink Network, Inc.*
(3)(c) Agreement to Vote Stock, dated February 10, 1998, between Sprint
Corporation, Sprint Communications Company L.P. and certain stockholders
of EarthLink Network, Inc.*
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*Incorporated by reference to the Schedule 13D filed by the reporting person
on February 20, 1998.
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13D/A Page 6 of 6 Pages
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that the
information set forth in this statement is true, complete and correct.
Dated: July __, 1998
/s/ Kevin M. O'Donnell
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Kevin M. O'Donnell
