UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
MAY 8, 1996
(Date of Report -- Date of Earliest Event Reported)
Commission File Number 0-25812
PSINET INC.
(Exact name of Registrant as specified in its charter)
New York 16-1353600
(State or other jurisdiction of (I.R.S. Employer
incorporation) Identification No.)
510 Huntmar Park Drive, Herndon, VA 22070
(Address of principal executive offices) (Zip Code)
(703) 904-4100
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report date)
Exhibit Index Appears on Page 4
<PAGE>
ITEM 5. OTHER EVENTS.
On May 15, 1996, PSINet Inc. ("PSINet") announced it had
adopted a Shareholder Rights Plan pursuant to which preferred stock purchase
rights will be distributed to shareholders as a dividend on June 5, 1996, or
as soon as reasonably practicable thereafter, at the rate of one Right for
each share of Common Stock held of record as of the close of business on
June 5, 1996. The Plan was adopted to enable the Board of Directors to protect
PSINet against any takeover attempt that the Board considers abusive and not in
the best interests of shareholders.
Each Right, when exercisable, will entitle shareholders to buy
one one-thousandth of a share of a newly created Series A Junior Participating
Preferred Stock of PSINet at an exercise price of $75 per Right. Under certain
circumstances the Rights would entitle holders thereof to acquire securities of
PSINet or another person with a market value equal to twice the value of the
exercise price. Subject to certain exceptions, the Rights will be exercisable
ten days after a person or group (except for certain excluded persons) acquires
beneficial ownership of 20% or more of PSINet's outstanding Common Stock or
commences a tender or exchange offer upon consummation of which such person or
group would beneficially own 20% or more of PSINet's outstanding Common Stock.
The Rights will be redeemable by the Board at any time prior to the time a
person or group acquires 20% or more of PSINet's outstanding Common Stock and
under certain other circumstances at a redemption price of $.01 per Right.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
4.1 Rights Agreement, dated as of May 8, 1996, between PSINet Inc.
and First Chicago Trust Company of New York, as Rights Agent,
which includes as Exhibit A -- Certificate of Amendment;
Exhibit B -- Form of Rights Certificate; and Exhibit C --
Summary of Rights to Purchase Shares of Preferred Stock.
99.1 Press release dated May 15, 1996.
<PAGE>
PSINET INC.
FORM 8-K
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
PSINET INC.
Dated: June 3, 1996 By: /s/ David N. Kunkel
David N. Kunkel
Vice President, General Counsel
and Secretary
<PAGE>
EXHIBIT INDEX
Sequentially
Numbered
Exhibit No. Description Page
4.1 Rights Agreement, dated as of Incorporated by reference
May 8, 1996, between PSINet Inc. from Exhibit 1 to PSINet's
and First Chicago Trust Company Registration Statement on
of New York, as Rights Agent, Form 8-A dated June 3, 1996
which includes as Exhibit A --
Certificate of Amendment;
Exhibit B -- Form of Rights
Certificate; and Exhibit C --
Summary of Rights to Purchase
Shares of Preferred Stock.
99.1 Press Release dated May 15, Filed herewith
1996.
PRESS RELEASE
FOR IMMEDIATE RELEASE
CONTACT: Kelli Harrington Nemer, PSINet
703/904-4100, ext. 1245
[email protected]
PSINET RETAINS MERRILL LYNCH TO REVIEW STRATEGIC ALTERNATIVES
ALSO ADOPTS SHAREHOLDER RIGHTS PLAN
HERNDON, VA. MAY 15, 1996 -- PSINet Inc. (NASDAQ: PSIX) today
announced that its Board and management are continuing to pursue its business
plan to generate profitable growth for the balance of the 1990s and beyond.
In this regard, while the Company believes that substantial
shareholder value will be created through continued execution of its business
plan, it has retained the investment banking firm of Merrill Lynch & Co. to
assist it in reviewing all of its strategic alternatives. Such alternatives
may include domestic and international joint operating agreements; strategic
alliances; and sales of minority or controlling interests in the Company, among
others, according to William L. Schrader, PSINet chairman, president and CEO.
"Since PSINet and the Internet industry are relatively young, the
potential for growth in shareholder value may be as great going forward as has
been over the past five years," said Schrader. "However, the opportunities to
leverage our current strength with the skills and market power of larger
companies in strategic relationships must be assessed fully. We are
considering partnerships which may offer significant value to PSINet and its
shareholders alike."
"We selected Merrill Lynch & Co. as our advisor because of our long
standing relationship with the firm and the quality of the Merrill Lynch team,"
added Schrader.
PSINet announced also that it had sought Merrill Lynch's advice and
adopted a Shareholder Rights Plan and declared a dividend of one Preferred
Stock Purchase Right on each outstanding share of PSINet common stock to be
distributed on June 5, 1996 to shareholders of record on that date.
"The Rights Plan was not adopted in response to any specific effort
to acquire control of PSINet," added Schrader. "Rather, it was adopted to
deter abusive takeover tactics that can be used to deprive the Company's
shareholders of the full value of their investment."
Subject to certain exceptions, the Rights will be exercisable only if
a person or group acquires 20 percent or more of PSINet's common stock or
announces a tender or exchange offer the consummation of which would result in
ownership by a person or group of 20 percent or more of the common stock (other
than in the event of certain Board-approved offers).
Each Right will entitle its holder to buy one one-thousandth of a
share of Series A junior participating preferred stock at an exercise price of
$75. If a person or group acquires 20 percent or more of PSINet's common stock
(other than pursuant to certain Board-approved offers), each Right will entitle
its holder (other than such acquiring person or members of such group) to
purchase, at the exercise price, a number of one one-thousandths of a share of
the preferred stock having a market value of twice such price. If PSINet is
acquired (other than pursuant to certain Board-approved offers) in a merger or
other business combination after a person or group has acquired 20 percent or
more of PSINet's common stock, each Right will entitle its holder to purchase,
at the exercise price, a number of the acquiror's common shares having a market
value of twice such price.
The Company can redeem the Rights for $.01 per Right before the
acquisition by a person or group of 20 percent or more of the Company's common
stock and thereafter under certain circumstances.
Further details concerning the Rights Plan are contained in a letter
that will be mailed to all PSINet shareholders.
PSINet is a leading provider of Internet access, services and
products to both organizations and individuals throughout the U.S. and abroad.
The Company's PSINet network offers access to the Internet from more than 300
points-of-presence (POPs) worldwide. Internet access options range from high-
speed modem dial-up and ISDN for telecommuters and small office LANs to
dedicated high-speed circuits for corporate connectivity. Network Computing
Magazine recently named PSINet a winner of its Well-Connected Award as "Best
Internet Access Provider."
The company has its headquarters in Herndon, Va., with sales and
service offices across the U.S.; Cambridge, England; Toronto; and Tokyo.
Further product availability and pricing information can be obtained by calling
703/904-4100, through PSINet's Web site at http://www.psi.net or by sending an
e-mail request to [email protected].
