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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):
Sky D. Dayton
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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:
4,889,723 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 14,194,459 Shares
outstanding as of July 13, 1998.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(f) The person filing this Amendment is Sky D. Dayton, whose
business address is 3100 New York Dr., Pasadena, Califoria 91107. Mr. Dayton
is the founder and Chairman of the Board of the Company. During the last five
years, Mr. Dayton 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. Dayton 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. Dayton, (the "Granting Stockholders"), entered
into an Agreement to Vote and Tender Stock dated February 10, 1998 (the
"Agreement to Vote and Tender 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 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 dispositve power is shared by
virtue of membership in the group described in Item 2. Such figure includes
1,384,786 Shares held by the reporting person and 12,500 Shares subject to
stock options exercisable within 60 days of July 13, 1998. The aggregate
maximum number of beneficially owned Shares reported for the reporting person
represents 34.5% of the issuer's Shares outstanding as of July 13, 1998.
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13D Page 5 of 6 Pages
(c) During the past 60 days, the reporting person effected the following
transactions in the Common Stock: (i) On June 1, 1998, the reporting person
exercised options to purchase 133,517 Shares at $1.81 per share; and (ii)
June 5, 1998, the reporting person sold 248,731 Shares to Sprint at a per
share price of $45 pursuant to the consummation of the Offer.
(d)-(c) Not Applicable.
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/ Sky D. Dayton
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Sky D. Dayton
