As filed with the Securities and Exchange Commission on September 29, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PSINET INC.
(exact name of registrant as specified in its charter)
NEW YORK 16-1353600
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
510 Huntmar Park Dive, Herndon Virginia 20170
(Address of Principal Executive Offices) (Zip Code)
PSINET INC. 1999 EMPLOYEE STOCK PURCHASE PLAN AND
PSINET INC. 1999 INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN
(Full title of the Plan(s))
David N. Kunkel, Esq.
Executive Vice President, and General Counsel
PSINet Inc.
510 Huntmar Park Drive
Herndon, Virginia 20170
(703) 904-4100
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Copy to:
Deborah McLean Quinn, Esq.
Nixon Peabody LLP
900 Clinton Square
Rochester, New York 14604
(716) 263-1000
- ---------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Maximum Maximum
Securities Offering Aggregate Amount of
to be Amount to be price per Offering Registration
Registered(1) Registered(1) share(2) Price(2) Fee
- ------------- ------------- ---------- ---------- ------------
Common Stock 1,620,000 sh. $38.91 $63,034,200 $17,523.51
$.01 par value
(1) This Registration Statement also covers any additional shares of the
Registrant's Common Stock which become issuable under the Registrant's 1999
Employee Stock Purchase Plan or 1999 International
<PAGE>
-2-
Employee Stock Purchase Plan with respect to the securities registered hereunder
by reason of any stock dividend, stock split, recapitalization or other similar
transaction effected which results in an increase in the number of the
Registrant's outstanding shares of Common Stock without the Registrant's receipt
of consideration.
(2)Inserted solely for the purpose of calculating the registration fee pursuant
to Rule 457(h) and based upon the average of the high ($41.3125) and low
($36.50)prices for the registrant's Common Stock on Nasdaq National Market
System reported as of September 27, 1999.
Approximate date of commencement of the proposed issuance of the securities to
the public: From time to time after the Registration Statement becomes
effective.
<PAGE>
Part II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
The following documents which have been filed by PSINet Inc. (the
"Company") with the Securities and Exchange Commission are incorporated herein
by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, filed pursuant to Section 13 of the Securities Exchange Act
of 1934.
(b) All other reports filed by the Company pursuant to Sections 13(a)
and 15(d) of the Securities Exchange Act of 1934 since December 31, 1998,
including specifically, but not limited to, the Company's Quarterly Reports on
Form 10-Q for the quarterly periods ending March 31, 1999 and June 30, 1999,
and the Company's Forms 8-Ks dated April 27, 1999, May 7, 1999, July 6, 1999,
July 16, 1999, August 22, 1999 and September 16, 1999.
(c) The description of the Company's Common Stock contained in the
Company's registration statement filed under Section 12 of the Securities and
Exchange Act, including all amendments or reports filed for the purpose of
updating such description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 subsequent to
the date of this Registration Statement and prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities remaining unsold shall be deemed
to be incorporated by reference herein and to be a part hereof from the date of
the filing of such documents.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
The New York Business Corporation Law (the "BCL") provides that if a
derivative action is brought against a director or officer of a corporation, the
corporation may indemnify him or her against amounts paid in settlement and
reasonable expenses, including attorneys' fees incurred by him or her, in
connection with the defense or settlement of such action, if such director or
officer acted in good faith for a purpose which he or she reasonably believed to
be in the best interests of the corporation, except that no indemnification
shall be made without court approval in respect of a threatened action, or a
pending action settled or otherwise disposed of, or in respect of any matter as
to which such director or officer has been found liable to the corporation. In a
nonderivative action or threatened action, the BCL provides that a corporation
may indemnify a director or officer against judgments, fines, amounts paid in
settlement and reasonable expenses, including attorneys' fees incurred by him or
her in defending such action if such director or officer acted in good faith for
a purpose which he or she reasonably believed to be in the best interests of the
corporation.
Under the BCL, a director or officer who is successful, either in a
derivative or nonderivative action, is entitled to indemnification as outlined
above. Under any other circumstances, such director or officer may be
indemnified only if certain conditions specified in the BCL are met. The
indemnification provisions of the BCL are not exclusive of any other rights to
which a director or officer seeking indemnification may be entitled pursuant to
the provisions of the certificate of incorporation or the bylaws of a
corporation or, when authorized by such certificate of incorporation or bylaws,
pursuant to a shareholders' resolution, a directors' resolution or an agreement
providing for such indemnification.
The above is a general summary of certain provisions of the BCL and is
subject, in all cases, to the specific and detailed provisions of Sections
721-725 of the BCL.
<PAGE>
Article V, Section 1 of the Company's By-Laws contains provisions
requiring indemnification by the Company of its directors and officers against
certain liabilities and expenses which they may incur as directors and officers
of the Company or of certain other entities in accordance with Sections 722-723
of the BCL.
Section 726 of the BCL also contains provisions authorizing a
corporation to obtain insurance on behalf of any director and officer against
liabilities, whether or not the corporation would have the power to indemnify
against such liabilities. Article V, Section 5 indicates that the Company may,
but need not, maintain insurance insuring the Corporation or persons entitled to
indemnification under Section 1 of Article V of the By-Laws for liabilities
against which they are entitled to indemnification under Article V of the
By-Laws or insuring such persons for liabilities against which they are not
entitled to indemnification under Article V of the By-Laws.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
See Exhibit Index.
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is
<PAGE>
asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-8, and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Herndon, Commonwealth of Virginia, on the 28th day of
September, 1999.
PSINET INC.
/s/ William L. Schrader
By: ------------------------------
William L. Schrader
Chairman of the Board of
Directors and Chief
Executive Officer
KNOWN ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below hereby severally constitutes and appoints William L. Schrader, Harold S.
Wills, David N. Kunkel and Edward D. Postal, and each of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that each said attorneys-in-fact
and agents or any of them or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
/s/ William L. Schrader Director and Chief September 28, 1999
- ----------------------------- Executive Officer
William L. Schrader (Principal Executive
Officer)
/s/ Harold S. Wills Director, President September 28, 1999
- ----------------------------- and Chief Operating
Harold S. Wills Officer
/s/ David N. Kunkel Director, Executive September 28, 1999
- ----------------------------- Vice President and
David N. Kunkel General Counsel
/s/ Edward D. Postal Senior Vice President September 28, 1999
- ----------------------------- and Chief Financial
Edward. D. Postal Officer (Principal
(Financial Officer)
/s/ Michael J. Malesardi Vice President and September 28, 1999
- ----------------------------- Controller (Principal
Michael J. Malesardi Accounting Officer)
/s/ William H. Baumer Director September 28, 1999
- -----------------------------
William H. Baumer
/s/ Ian P. Sharp Director September __, 1999
- -----------------------------
Ian P. Sharp
/s/ Ralph J. Swett Director September 28, 1999
- -----------------------------
Ralph J. Swett
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Location
- ----------- ----------- ----------------
4-1 PSINet Inc. 1999 Employee Filed Herewith
Stock Purchase Plan
4-1(a) PSINet Inc. 1999 Filed Herewith
International Employee
Stock Purchase Plan
5-1 Opinion of Nixon Peabody LLP Filed Herewith
as to legality of the Plan and the
Common Stock
23-1 Consent of Nixon Peabody LLP Contained in opinion
filed as Exhibit 5-1
to this Registration
Statement
23-2 Consent of PricewaterhouseCoopers LLP Filed Herewith
23-3 Consent of Arthur Andersen LLP, independent Filed Herewith
accountants
Exhibit 4-1
PSINET INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
PSINet Inc. (the "Company") hereby establishes its 1999 Employee Stock
Purchase Plan (the "Plan") as follows:
1. Purpose of the Plan. This Plan is adopted to provide eligible
employees who wish to become shareholders in the Company and/or to increase
their share ownership with a convenient method of doing so through accumulated
payroll deductions. The Company's management and Board of Directors believe that
employee participation in the ownership of the business is to the mutual benefit
of the employees and the Company. The Company intends that the rights to
purchase stock of the Company granted under the Plan be considered options
issued under an "employee stock purchase plan" as that term is defined in
Section 423(b) of the Code.
2. Certain Definitions.
2.1 "Accumulation Account" means the funds accumulated with
respect to an eligible Employee as a result of deductions from such Employee's
paycheck for the purpose of purchasing stock under this Plan.
2.2 "Board" means the Board of Directors of the Company.
2.3 "Code" means the Internal Revenue Code of 1986, as amended.
2.4 "Committee" means a Committee designated by the Board to
administer the Plan or, if at any time no Committee shall be in office, then the
functions of the Committee specified in the Plan shall be exercised by the Board
and any references herein to the Committee shall be construed as references to
the Board.
2.5 "Common Stock" means the Company's common stock, $0.01 par
value.
2.6 "Compensation" means regular base pay and variable
compensation for sales personnel and shall exclude other compensation, including
bonuses.
2.7 "Designated Subsidiary" means any Subsidiary which has been
designated by the Committee from time to time in its sole discretion as eligible
to have its employees participate in the Plan.
2.8 "ESPP Agent" means the financial services or brokerage firm
designated by the Company to act as administrative agent of the Plan.
2.9 "Effective Date" means the date of approval of the Plan by the
shareholders of the Company.
2.10 "Employee" shall mean any individual employed by the Company
or any Designated Subsidiary, including any individual on leave or other leave
of absence approved by the Company; provided that where the period of leave
exceeds 90 days and the individual's right to re-employment is not guaranteed
either by statute or by contract, the employment relationship will be deemed to
have terminated on the 91st day of such leave.
2.11 "Enrollment Date" means the first day of each Offering Period.
2.12 "Exercise Date" means the last day of each Offering Period.
2.13 "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows: (a) the last reported sale of the Common Stock of
the Company on the NASDAQ National Market System or, if no such reported sale
takes place on any such day, the average of the closing bid and asked prices, or
(b) if such Common Stock is listed on a national securities exchange, the last
reported sale price or, if no such reported sale takes place on any such day,
the average of the closing bid and asked prices on the principal national
securities exchange on which the Common Stock is listed or admitted to trading,
or (c) if such Common Stock is not quoted on such National Market System nor
listed or admitted to trading on a national securities exchange, then the
average of the closing bid and asked prices, as reported by The Wall Street
Journal for the over-the-counter market, or (d) if none of the foregoing is
applicable, then the fair market value of a share of Common Stock as determined
by the Committee in its discretion.
2.14 "Offering Period" or "Offering" means the period beginning
with the date an option is granted under the Plan and ending with the date
determined by the Committee. During the term of the Plan there will be a series
of separate consecutive six-month Offering Periods, with the first Offering
Period commencing on the first pay period of the fourth quarter of 1999, and
thereafter, Offering Periods will commence on the first pay period of the second
quarter and the fourth quarter of each subsequent calendar year, provided that
the final Offering Period will end prior to the termination of the Plan.
<PAGE>
2.15 "Purchase Price" shall mean an amount equal to 85% of the Fair
Market Value of a share of Common Stock on the Enrollment Date or on the
Exercise Date, whichever is lower.
2.16 "Stock Account" shall mean the account established to hold
Common Stock purchased by an Employee pursuant to Section 11.1.
2.17 "Subsidiary" shall mean any corporation, domestic or foreign,
whether or not such corporation now exists or is hereafter organized or acquired
by the Company or by a Subsidiary, in an unbroken chain of corporations
beginning with the Company if, at the time the option is granted, each of the
corporations other than the last corporation in an unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
3. Administration.
3.1 The Plan will be administered by the Committee. The Committee
will have the final power to determine all questions of policy and
administrative procedure that may arise in the administration of the Plan and
will administer, or will direct the ESPP Agent to administer, the Plan to
qualify as an "employee stock purchase plan" under Section 423 of the Code and
the regulations thereunder, as amended from time to time.
3.2 The Committee has the power, subject to the express provisions
of the Plan, to: (a) determine whether a grant of options to purchase Common
Stock will be made at the commencement of each Offering Period; (b) designate
from time to time which Subsidiaries of the Company will be eligible to have
their employees participate in the Plan; and (c) construe and interpret the Plan
and options granted under it, and to establish, amend and revoke rules and
regulations for its administration, including correcting any defect, omission or
inconsistency in the Plan, in a manner and to the extent it shall deem
appropriate to make the Plan fully effective; (d) amend the Plan, or recommend
to the Board any Plan amendments which require shareholder approval, as provided
in Section 17; (e) exercise such other powers and to perform such acts in
connection with the Plan as the Committee determines will promote the best
interests of the Company.
4. Shares Subject to the Plan.
4.1 The number of shares of Common Stock for which options may be
granted under the Plan is 1,057,500 shares. If any option granted under the Plan
terminates for any reason without having been exercised, the Common Stock not
purchased under such option will again become available for issuance under the
Plan.
4.2 The Common Stock subject to the Plan may be unissued shares or
reacquired shares, purchased on the market or otherwise. If the total number of
shares for which options are to be granted on any date exceeds the number of
shares then available under the Plan (after deduction of all shares for which
options have been exercised or are then outstanding), the Committee will make a
pro rata allocation of the shares remaining available in as nearly a uniform
manner as is practicable and equitable. In such event, the payroll deductions to
be made will be reduced accordingly.
5. Eligibility.
5.1 Any Employee who is employed by the Company or a Designated
Subsidiary on a given Enrollment Date will be eligible to participate in the
Plan for that Offering Period, except as otherwise provided in the Plan.
5.2 An Employee will not be granted an option under the Plan (a)
if, immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 424(d) of the Code)
would own stock and/or hold outstanding options to purchase stock possessing
five percent (5%) or more of the total combined voting power or value of all
classes of stock of the Company or of any Subsidiary of the Company, or (b) if
such option, together with any other options granted under any employee stock
purchase plan of the Company or its Subsidiaries results in such Employee having
the right to purchase in a calendar year stock whose Fair Market Value exceeds
$25,000 (determined based on the Fair Market Value of the shares at the time
such option is granted) as provided in Section 423(b)(8) of the Code.
5.3 Officers of the Company are eligible to participate in
Offerings under the Plan, provided, however, that the Committee may provide in
an Offering that certain employees who are highly compensated employees within
the meaning of Section 423(b)(4)(D) of the Code shall not be eligible to
participate.
5.4 For purposes of this Plan, an eligible Employee shall not
include any individual who performs services for the Company or a Designated
Subsidiary solely as an independent contractor, consultant or employee of a
third party employment or leasing agency.
6. Grant of Options. The Committee will determine, prior to the
Enrollment Date for any Offering Period, whether to grant options to purchase
Common Stock of the Company under the Plan to eligible Employees. Unless
otherwise determined by the
<PAGE>
Committee, the options will be granted on each Enrollment Date on the terms and
conditions and to the participating Employees as set forth in this Plan.
7. Participation.
7.1 An eligible Employee may become a participant in any Offering
Period under the Plan by completing an enrollment agreement authorizing payroll
deductions in form and substance satisfactory to the Committee and filing the
enrollment agreement with the Company or, if so designated by the Committee,
with the ESPP Agent, by the applicable Enrollment Date.
7.2 Payroll deductions for an Employee shall commence on the first
payday following the Enrollment Date and will continue through the Offering
Period unless terminated by the Employee as provided in Section 12 or unless the
Plan is terminated as provided in Section 17.
8. Payroll Deductions.
8.1 At the time an Employee files the enrollment agreement, the
Employee will elect to have payroll deductions made on each payday during the
Offering Period in an amount not exceeding a total of 15% (or such other
percentage as the Committee may determine) of the Compensation which the
Employee receives on each payday during the Offering Period.
8.2 All payroll deductions made for an Employee shall be credited
to his or her Accumulation Account under the Plan. An Employee may not make any
additional payments into the Accumulation Account. The funds allocated to an
Employee's Accumulation Account shall remain the property of the Employee at all
times but may be commingled with the general funds of the Company until used to
purchase Common Stock on an Exercise Date or returned to the Employee. No
interest will be paid or accrued on any money in the Accumulation Accounts of
participating Employees.
8.3 An Employee may discontinue such Employee's participation in
the Plan as provided in Section 12. An Employee's enrollment agreement shall be
effective for successive Offering Periods unless terminated as provided in
Section 12. To increase or decrease the rate of payroll deductions (within the
limitations of the Plan), with respect to the next Offering Period, an Employee
must complete and file with the Company prior to the Enrollment Date for such
Offering Period, a new enrollment agreement authorizing a change in payroll
deduction rate. Such change in rate of payroll deduction shall be effective at
the beginning of the next Offering Period following the Company's receipt of the
new enrollment agreement.
8.4 To the extent necessary to comply with Section 423(b)(8) of
the Code and Section 5.2 of this Plan, an Employee's payroll deductions will be
decreased by the Company at such time during any Offering Period which is
scheduled to end during the current calendar year (the "Current Offering
Period") if the aggregate of all such Employee's payroll deductions which were
previously used to purchase Common Stock under the Plan (and any other employee
stock purchase plans of the Company) in a prior Offering Period which ended
during the current calendar year plus all payroll deductions accumulated with
respect to the Current Offering Period exceeds the applicable limits of Code
Section 423(b)(8). Payroll deductions shall recommence at the rate provided in
such Employee's enrollment agreement at the beginning of the first Offering
Period which is scheduled to end in a subsequent calendar year, unless
terminated by the Employee as provided in Section 12 or termination of the Plan
as provided in Section 17.
8.5 On the Exercise Date, or at the time some or all of the
Company's Common Stock issued under the Plan is disposed of by the Employee, the
Employee must make adequate provision for the Company's federal, state, or other
tax withholding obligations, if any, which arise upon the exercise of the option
or the disposition of the Common Stock. At any time, the Company may, but will
not be obligated to, withhold from the Employee's compensation the amount
necessary for the Company to meet applicable withholding obligations, including
any withholding required to make available to the Company any tax deductions or
benefit attributable to sale or early disposition by the Employee of Common
Stock under the Plan.
9. Exercise of the Option on the Exercise Date. Each Employee who
continues to be an Employee in an Offering on the Exercise Date will be deemed
to have exercised his option on such date and to have purchased from the Company
the number of full shares of Common Stock reserved for the purpose of the Plan
as his accumulated payroll deductions on such date will pay for at the option
price, provided that the maximum number of shares that an Employee can purchase
in any single Offering Period cannot exceed 2,500 shares.
10. Employee's Rights as a Shareholder. No Employee will have any
right as a shareholder with respect to any shares until the shares have been
purchased in accordance with Section 11 above and the Common Stock has been
issued by the Company.
11. Evidence of Stock Ownership.
11.1 Promptly following each Exercise Date, the number of shares of
Common Stock purchased by each Employee shall be deposited into a Stock Account
established in the Employee's name at the ESPP Agent.
<PAGE>
11.2 The Employee may direct, by written notice to the Company at
the time of the Employee's enrollment in the Plan, that the Stock Account with
the ESPP Agent be established in the names of the Employee and one other person
designated by the Employee, as joint tenants with right of survivorship, tenants
in common, or community property, to the extent and in the manner permitted by
applicable law.
11.3 An Employee may undertake a disposition (as that term is
defined in Section 424(c) of the Code) of the shares in the a Stock Account
established with the ESPP Agent at any time, whether by sale, exchange, gift, or
other transfer of legal title, but in the absence of such a disposition of the
shares, the shares must remain in the Employee's Stock Account at the ESPP Agent
until the holding period set forth in Section 423(a) of the Code has been
satisfied. With respect to shares for which the Section 423(a) holding period
has been satisfied, the Employee may move those shares to another brokerage
account of Employee's choosing or request that a stock certificate be issued and
delivered to him.
12. Withdrawal.
12.1 An Employee may withdraw from an Offering in whole but not in
part, at any time prior to the beginning of the payroll period immediately
preceding the next Exercise Date by delivering a withdrawal notice to the
Company or, if so directed by the Company, with the ESPP Agent, in which event
the Company will refund the entire balance of his deductions as soon as
practicable thereafter.
12.2 To re-enter the Plan, an Employee who has previously withdrawn
must file a new enrollment agreement in accordance with Section 7.1. The
Employee's re-entry into the Plan will not become effective before the beginning
of the next Offering following his withdrawal.
13. Carryover of Enrollment. At the termination of each Offering,
the Employee will automatically be re-enrolled in the next Offering, and the
balance in the Employee's Accumulation Account shall be used for option
exercises in the new Offering, unless the Employee has withdrawn from the
Offering by providing proper notice to Company. Upon termination of the Plan,
the balance of each Employee's Accumulation Account shall be refunded to him.
14. No Employment Rights. Neither the Plan nor any option granted
hereunder will confer upon the Employee any right with respect to continuance of
employment by the Company or any Subsidiary nor shall the Plan or any option
granted under the Plan interfere in any way with the right of the Company or any
Subsidiary to terminate the employment of the Employee at any time, with or
without cause consistent with applicable law.
15. Rights Not Transferable. No Employee may sell, assign,
transfer, pledge, or otherwise dispose of or encumber either the payroll
deductions credited to such Employee's Accumulation Account or any rights with
regard to the exercise of an option or to receive shares under the Plan other
than by will or the laws of descent and distribution, and such right and
interest shall not be liable for, or subject to, the debts, contracts, or
liabilities of the Employee. If any such action is taken by the Employee, or any
claim is asserted by any other party in respect of such right and interest
whether by garnishment, levy, attachment or otherwise, such action or claim will
be treated as an election to withdraw funds in accordance with Section 12. An
option can only be exercised by the Employee to whom the option has been
granted.
16. Termination of Employment. Upon termination of employment for
any reason whatsoever, including but not limited to death or retirement, any
outstanding option shall terminate and the balance in the Accumulation Account
of Employee whose employment has terminated will be paid to the Employee or, in
the event of the Employee's death, to his estate.
17. Amendment or Discontinuance of the Plan. The Committee will
have the right to amend, modify, or terminate the Plan at any time without
notice, provided that no Employee's existing rights under any Offering already
made under Section 6 hereof may be adversely affected thereby, and provided that
any amendment will be subject to shareholder approval if shareholder approval is
required under the Code or other applicable law.
18. Changes in Capitalization. In the event of reorganization,
recapitalization, stock split, stock dividend, combination of shares, merger,
consolidation, offerings of rights, or any other change in the structure of the
common shares of the Company, the Board may make such adjustment, if any, as it
may deem appropriate in the number, kind, and the price of shares available for
purchase under the Plan, and in the number of shares which an Employee is
entitled to purchase.
19. Notices. All notices or other communications by an Employee to
the Company under or in connection with the Plan shall be deemed to have been
duly given when received by Shareholder Services of the Company or when received
in the form specified by the Company at the location, or by the person,
including the ESPP Agent, designated by the Company for the receipt thereof.
20. Change of Control.
20.1 Notwithstanding other provisions of the Plan, in the event of
a "Change in Control" of the Company (as defined in Section 20.3 below), all of
the options of a participating Employee shall become immediately exercisable,
unless directed otherwise by a
<PAGE>
resolution of the Board or an appropriate committee thereof adopted prior to and
specifically relating to the occurrence of such change in control.
20.2 In the event of a Change in Control, unless otherwise
determined by the Board as provided in Section 20.1 or by required law, each
participating Employee shall have the right at any time thereafter to and
including the original Exercise Date for such option to exercise the option in
full notwithstanding any limitation or restriction in any option agreement or in
the Plan
20.3 For purposes of this Section 20, "Change in Control" means:
(a) there shall be consummated
(i) any consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or pursuant to
which any shares of the Company's common stock are to be converted into
cash, securities or other property, provided that the consolidation or
merger is not with a corporation which was a wholly-owned subsidiary of
the Company immediately before the consolidation or merger, or
(ii) any sale, lease, exchange, or other transfer (in one
transaction or a series or related transactions) of all, or
substantially all, or the assets of the Company (other than to one or
more directly or indirectly wholly-owned subsidiaries of the Company);
or
(b) the shareholders of the Company approve any plan or proposal
for the liquidation or dissolution of the Company; or
(c) any person (as such term is used in Sections 13(c) and 14(d)
of the Exchange Act of 1934, as amended) shall become the beneficial
owner (within the meaning of Rule 13d-3 under the Exchange Act),
directly or indirectly, of 30% or more the Company's then outstanding
common stock, provided that such person shall not be a wholly-owned
subsidiary of the Company immediately before it become such 30%
beneficial owner; or
(d) individuals who constitute the Company's Board of Directors on
the date hereof (the "Incumbent Board") cease for any reason to
constitute at least a majority thereof, provided that any person
becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders, was approved by
a vote of at least three-quarters of the directors comprising the
Incumbent Broad (either by a specific vote or by approval of the proxy
statement of the Company in which such person is named as a nominee
for director, without objection to such nomination shall be, for
purposes of this clause (d), considered as though such person were a
member of the Incumbent Board.
21. Termination of the Plan. This Plan shall terminate at the
earliest of the following: (a) December 31, 2009; (b) the date the Committee
acts to terminate the Plan in accordance with Section 17 above; or (c) the date
when all shares reserved under the Plan have been purchased. Prior to the
occurrence of such events, on such date as the Committee may determine, the
Company may permit a participating Employee to exercise the option to purchase
shares of Common Stock for as many full shares as the balance of his
Accumulation Account will allow at the lower of Fair Market Value on the
Enrollment Date or the date on which the option is permitted to be exercised. If
the Employee elects to purchase shares, the remaining balance of his
Accumulation Account will be refunded to the Employee after such purchase;
22. Limitations on Sale of Common Stock Purchased Under the Plan.
The Plan is intended to provide Common Stock for investment and not for resale.
The Company does not, however, intend to restrict or influence any Employee in
the conduct of his own affairs. An Employee, therefore, may sell stock purchased
under the Plan at any time he chooses, subject to compliance with the terms of
the Plan, any applicable Federal or state securities laws and applicable
withholding taxes. THE EMPLOYEE ASSUMES THE RISK OF ANY MARKET FLUCTUATIONS IN
THE PRICE OF THE STOCK.
23. Governmental Regulation. The Company's obligation to sell and
deliver shares of the Common Stock under this Plan is subject to the approval of
any governmental authority required in connection with the authorization,
issuance, or sale of such shares of Common Stock.
Adopted by the Board of Directors: June __, 1999
Approved by Shareholders: September 28, 1999
Exhibit 4-1(a)
PSINET INC.
1999 INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN
PSINet Inc. (the "Company") hereby establishes its 1999 International
Employee Stock Purchase Plan (the "International Plan") as follows:
1. Purpose of the International Plan. This International Plan is
adopted to provide eligible employees who wish to become shareholders in the
Company and/or to increase their share ownership with a convenient method of
doing so. The Company's management and Board of Directors believe that employee
participation in the ownership of the business is to the mutual benefit of the
employees and the Company. The Company adopts this International Plan as a
companion and supplement with flexibility required under local law for non-U.S.
employees to its 1999 Employee Stock Purchase Plan.
2. Certain Definitions.
2.1 "Accumulation Account" means the funds accumulated with respect to
an eligible Employee as a result of deductions from such Employee's paycheck or
by check or wire transfer from the Employee to the individual's employer or the
Company, as the case may be, for the purpose of purchasing stock under this
International Plan.
2.2 "Board" means the Board of Directors of the Company.
2.3 "Committee" means a Committee of the Board or appropriate
officers or employees of the Company or a Designated Subsidiary designated by
the Board to administer the International Plan or, if at any time no Committee
shall be in office, then the functions of the Committee specified in the
International Plan shall be exercised by the Board and any references herein to
the Committee shall be construed as references to the Board.
2.4 "Common Stock" means the Company's common stock, $0.01 par
value.
2.5 "Compensation" means regular base pay and variable
compensation for sales personnel and shall exclude other compensation, including
bonuses.
2.6 "Designated Subsidiary" means any Subsidiary which has been
designated by the Committee from time to time in its sole discretion as eligible
to have its employees participate in the International Plan.
2.7 "ESPP Agent" means the financial services or brokerage firm
designated by the Company to act as administrative agent of the International
Plan.
2.8 "Effective Date" means the date, after approval of the
International Plan by the shareholders of the Company, approved by the Board or
the Committee for implementation of the International Plan in the country where
the Employee is employed by the Company or a Designated Subsidiary.
2.9 "Employee" shall mean any individual employed by the Company
or any Designated Subsidiary, including any individual on leave or other leave
of absence approved by the Company; provided that where the period of leave
exceeds 90 days and the individual's right to re-employment is not guaranteed
either by statute or by contract, the employment relationship will be deemed to
have terminated on the 91st day of such leave, subject to such variations as the
Board or the Committee may deem necessary or desirable under Local Law.
2.10 "Enrollment Date" means the first day of each Offering Period.
2.11 "Exercise Date" means the last day of each Offering Period.
2.12 "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows: (a) the last reported sale of the Common Stock of
the Company on the NASDAQ National Market System or, if no such reported sale
takes place on any such day, the average of the closing bid and asked prices, or
(b) if such Common Stock is listed on a national securities exchange, the last
reported sale price or, if no such reported sale takes place on any such day,
the average of the closing bid and asked prices on the principal national
securities exchange on which the Common Stock is listed or admitted to trading,
or (c) if such Common Stock is not quoted on such National Market System nor
listed or admitted to trading on a national securities exchange, then the
average of the closing bid and asked prices, as reported by The Wall Street
Journal for the over-the-counter market, or (d) if none of the foregoing is
applicable, then the fair market value of a share of Common Stock as determined
by the Committee in its discretion.
<PAGE>
2.13 "Local Law" means the laws and regulations of the country or
local jurisdiction in which the Employee is employed or resides, as applicable
to this International Plan.
2.14 "Offering Period" or "Offering" means the period beginning
with the date an option is granted under the International Plan and ending with
the date determined by the Committee. During the term of the International Plan
there will be a series of separate consecutive six-month Offering Periods, with
the first Offering Period commencing on the first pay period of the calendar
quarter after the Effective Date of the International Plan in the applicable
jurisdiction. The final Offering Period will end prior to the termination of the
International Plan.
2.15 "Purchase Price" shall mean an amount equal to 85% of the Fair
Market Value of a share of Common Stock on the Enrollment Date or on the
Exercise Date, whichever is lower.
2.16 "Stock Account" shall mean the account established to hold
Common Stock purchased by an Employee pursuant to Section 11.1.
2.17 "Subsidiary" shall mean any corporation, domestic or foreign,
whether or not such corporation now exists or is hereafter organized or acquired
by the Company or by a Subsidiary, in an unbroken chain of corporations
beginning with the Company if, at the time the option is granted, each of the
corporations other than the last corporation in an unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
3. Administration.
3.1 The International Plan will be administered by the Committee.
The Committee will have the final power to determine all questions of policy and
administrative procedure that may arise in the administration of the
International Plan and will administer, or will direct the ESPP Agent to
administer, the International Plan to comply with applicable Local Law,
including, without limitation, form of payment by the Employee, withholding for
applicable taxes, etc.
3.2 The Committee has the power, subject to the express provisions
of the International Plan, to: (a) determine whether a grant of options to
purchase Common Stock will be made at the commencement of each Offering Period;
(b) designate from time to time which Subsidiaries of the Company will be
eligible to have their employees participate in the International Plan; and (c)
construe and interpret the International Plan and options granted under it, and
to establish, amend and revoke rules and regulations for its administration,
including correcting any defect, omission or inconsistency in the International
Plan, in a manner and to the extent it shall deem appropriate to make the
International Plan fully effective; (d) amend the International Plan, or
recommend to the Board any International Plan amendments which require
shareholder approval, as provided in Section 17; (e) exercise such other powers
and to perform such acts in connection with the International Plan as the
Committee determines will promote the best interests of the Company.
4. Shares Subject to the International Plan.
4.1 The number of shares of Common Stock for which options may be
granted under the International Plan is 562,500 shares. If any option granted
under the International Plan terminates for any reason without having been
exercised, the Common Stock not purchased under such option will again become
available for issuance under the International Plan.
4.2 The Common Stock subject to the International Plan may be
unissued shares or reacquired shares, purchased on the market or otherwise. If
the total number of shares for which options are to be granted on any date
exceeds the number of shares then available under the International Plan (after
deduction of all shares for which options have been exercised or are then
outstanding), the Committee will make a pro rata allocation of the shares
remaining available in as nearly a uniform manner as is practicable and
equitable. In such event, the payroll deductions to be made will be reduced
accordingly.
5. Eligibility.
5.1 Any Employee who is employed by the Company or a Designated
Subsidiary on a given Enrollment Date occurring after the Effective Date of the
Plan in the jurisdiction where the Employee is employed,will be eligible to
participate in the International Plan for that Offering Period, except as
otherwise required by Local Law.
5.2 An Employee will not be granted an option under the
International Plan (a) if, immediately after the grant, such Employee would own
stock and/or hold outstanding options to purchase stock possessing five percent
(5%) or more of the total combined voting power or value of all classes of stock
of the Company or of any Subsidiary of the Company, or (b) if such option,
together with any other options granted under any employee stock purchase plan
of the Company or its Subsidiaries results in such Employee having the right to
purchase in a calendar year stock whose Fair Market Value exceeds $25,000
(determined based on the Fair Market Value of the shares at the time such option
is granted).
<PAGE>
5.3 Officers of the Company are eligible to participate in
Offerings under the International Plan, provided, however, that the Committee
may provide in an Offering that certain employees who are highly compensated
employees within the meaning of the U.S. Internal Revenue Code shall not be
eligible to participate.
5.4 For purposes of this International Plan, an eligible Employee
shall not include any individual who performs services for the Company or a
Designated Subsidiary solely as an independent contractor, consultant or
employee of a third party employment or leasing agency.
6. Grant of Options. The Committee will determine, prior to the
Enrollment Date for any Offering Period, whether to grant options to purchase
Common Stock of the Company under the International Plan to eligible Employees.
Unless otherwise determined by the Committee, the options will be granted on
each Enrollment Date on the terms and conditions and to the participating
Employees as set forth in this International Plan.
7. Participation.
7.1 An eligible Employee may become a participant in any Offering
Period under the International Plan by completing an enrollment agreement
complying with Local Law and in form and substance satisfactory to the Committee
and filing the enrollment agreement with the Company or, if so designated by the
Committee, with the ESPP Agent, by the applicable Enrollment Date.
7.2 Payroll deductions, if permitted under Local Law, for an
Employee shall commence on the first payday following the Enrollment Date and
will continue through the Offering Period unless terminated by the Employee as
provided in Section 12 or unless the International Plan is terminated as
provided in Section 17.
8. Payroll Deductions.
8.1 At the time an Employee files the enrollment agreement, if
permitted under Local Law, the Employee will elect to have payroll deductions
made on each payday during the Offering Period in an amount not exceeding a
total of 15% (or such other percentage as the Committee may determine) of the
Compensation which the Employee receives on each payday during the Offering
Period or the Employee may pay such amounts to such individual's employer or the
Company as determined by the Committee in compliance with Local Law.
8.2 Any payroll deductions made for, or payments made by, an
Employee shall be credited to his or her Accumulation Account under the
International Plan. An Employee may not make any additional payments into the
Accumulation Account. The funds allocated to an Employee's Accumulation Account
shall remain the property of the Employee at all times but may be commingled
with the general funds of the Company until used to purchase Common Stock on an
Exercise Date or returned to the Employee, unless otherwise required under Local
Law. No interest will be paid or accrued on any money in the Accumulation
Accounts of participating Employees unless otherwise required under Local Law.
8.3 An Employee may discontinue such Employee's participation in
the International Plan as provided in Section 12. An Employee's enrollment
agreement shall be effective for successive Offering Periods unless terminated
as provided in Section 12. To increase or decrease the rate of payroll
deductions or direct payments by the Employee, as applicable, (within the
limitations of the International Plan), with respect to the next Offering
Period, an Employee must complete and file with the Company prior to the
Enrollment Date for such Offering Period, a new enrollment agreement authorizing
a change in payroll deduction rate. Such change in rate of payroll deduction
shall be effective at the beginning of the next Offering Period following the
Company's receipt of the new enrollment agreement.
8.4 To the extent necessary to comply with Section 5.2 of this
International Plan, an Employee's payroll deductions or permitted payments will
be decreased by the Company at such time during any Offering Period which is
scheduled to end during the current calendar year (the "Current Offering
Period") if the aggregate of all such Employee's payroll deductions which were
previously used to purchase Common Stock under the International Plan (and any
other employee stock purchase plans of the Company) in a prior Offering Period
which ended during the current calendar year plus all payroll deductions
accumulated with respect to the Current Offering Period exceeds the applicable
limits of Code Section 423(b)(8). Payroll deductions shall, and permitted
payments may, recommence at the rate provided in such Employee's enrollment
agreement at the beginning of the first Offering Period which is scheduled to
end in a subsequent calendar year, unless terminated by the Employee as provided
in Section 12 or termination of the International Plan as provided in Section
17.
8.5 On the Exercise Date, or at the time some or all of the
Company's Common Stock issued under the International Plan is disposed of by the
Employee, the Employee must make adequate provision for the Company's tax or
other withholding obligations, if any, which arise upon the exercise of the
option or the disposition of the Common Stock. At any time, the Company may, to
the extent permitted under Local Law, but will not be obligated to, withhold
from the Employee's compensation the amount necessary for the Company to meet
applicable withholding obligations, including any withholding required to make
available to the Company any tax deductions or benefit attributable to sale or
early disposition by the Employee of Common Stock under the International Plan.
<PAGE>
9. Exercise of the Option on the Exercise Date. Each Employee who
continues to be an Employee in an Offering on the Exercise Date will be deemed
to have exercised his option on such date and to have purchased from the Company
the number of full shares of Common Stock reserved for the purpose of the
International Plan as his accumulated payroll deductions or payments on such
date will pay for at the option price, provided that the maximum number of
shares that an Employee can purchase in any single Offering Period cannot exceed
2,500.
10. Employee's Rights as a Shareholder. No Employee will have any
right as a shareholder with respect to any shares until the shares have been
purchased in accordance with Section 11 above and the Common Stock has been
issued by the Company.
11. Evidence of Stock Ownership.
11.1 Promptly following each Exercise Date, the number of shares of
Common Stock purchased by each Employee shall be deposited into a Stock Account
established in the Employee's name at the ESPP Agent.
11.2 The Employee may direct, by written notice to the Company at
the time of the Employee's enrollment in the International Plan, that the Stock
Account with the ESPP Agent be established in the names of the Employee and one
other person designated by the Employee, as joint tenants with right of
survivorship, tenants in common, or community property, to the extent and in the
manner permitted by applicable Local Law.
11.3 An Employee may undertake a disposition of the shares in the a
Stock Account established with the ESPP Agent at any time, whether by sale,
exchange, gift, or other transfer of legal title, but in the absence of such a
disposition of the shares, the shares must remain in the Employee's Stock
Account at the ESPP Agent until any applicable holding period set forth in Local
Law has been satisfied. With respect to shares for which the applicable holding
period, if any, has been satisfied, the Employee may move those shares to
another brokerage account of Employee's choosing or request that a stock
certificate be issued and delivered to him.
12. Withdrawal.
12.1 An Employee may withdraw from an Offering in whole but not in
part, at any time prior to the beginning of the payroll period immediately
preceding the next Exercise Date by delivering a withdrawal notice to the
Company or, if so directed by the Company, with the ESPP Agent, in which event
the Company will refund the entire balance of his deductions as soon as
practicable thereafter.
12.2 To re-enter the International Plan, an Employee who has
previously withdrawn must file a new enrollment agreement in accordance with
Section 7.1. The Employee's re-entry into the International Plan will not become
effective before the beginning of the next Offering following his withdrawal.
13. Carryover of Enrollment. At the termination of each Offering,
the Employee will automatically be re-enrolled in the next Offering, and the
balance in the Employee's Accumulation Account shall be used for option
exercises in the new Offering, unless the Employee has withdrawn from the
Offering by providing proper notice to Company. Upon termination of the
International Plan, the balance of each Employee's Accumulation Account shall be
refunded to him.
14. No Employment Rights. Neither the International Plan nor any
option granted hereunder will confer upon the Employee any right with respect to
continuance of employment by the Company or any Subsidiary nor shall the
International Plan or any option granted under the International Plan interfere
in any way with the right of the Company or any Subsidiary to terminate the
employment of the Employee at any time, with or without cause consistent with
applicable law.
15. Rights Not Transferable. No Employee may sell, assign,
transfer, pledge, or otherwise dispose of or encumber either the payroll
deductions credited to such Employee's Accumulation Account or any rights with
regard to the exercise of an option or to receive shares under the International
Plan other than by will or the laws of descent and distribution, and such right
and interest shall not be liable for, or subject to, the debts, contracts, or
liabilities of the Employee, except as otherwise required under Local Law. If
any such action is taken by the Employee, or any claim is asserted by any other
party in respect of such right and interest whether by garnishment, levy,
attachment or otherwise, such action or claim will be treated as an election to
withdraw funds in accordance with Section 12. An option can only be exercised by
the Employee to whom the option has been granted.
16. Termination of Employment. Upon termination of employment for
any reason whatsoever, including but not limited to death or retirement, any
outstanding option shall terminate and the balance in the Accumulation Account
of Employee whose employment has terminated will be paid to the Employee or, in
the event of the Employee's death, to his estate.
17. Amendment or Discontinuance of the International Plan. The
Committee will have the right to amend, modify, or terminate the International
Plan as to all Employees, or as to any Employees or all Employees of any
Subsidiary as required or permitted by Local Law, at any time without notice,
provided that no Employee's existing rights under any Offering already made
under Section 6
<PAGE>
hereof may be adversely affected thereby unless such otherwise required by Local
Law, and provided that any amendment will be subject to shareholder approval if
shareholder approval is required under applicable law.
18. Changes in Capitalization. In the event of reorganization,
recapitalization, stock split, stock dividend, combination of shares, merger,
consolidation, offerings of rights, or any other change in the structure of the
common shares of the Company, the Board may make such adjustment, if any, as it
may deem appropriate in the number, kind, and the price of shares available for
purchase under the International Plan, and in the number of shares which an
Employee is entitled to purchase.
19. Notices. All notices or other communications by an Employee to
the Company under or in connection with the International Plan shall be deemed
to have been duly given when received by Shareholder Services of the Company or
when received in the form specified by the Company at the location, or by the
person, including the ESPP Agent, designated by the Company for the receipt
thereof.
20. Change of Control.
20.1 Notwithstanding other provisions of the International Plan, in
the event of a "Change in Control" of the Company (as defined in Section 20.3
below), all of the options of a participating Employee shall become immediately
exercisable, unless directed otherwise by a resolution of the Board or an
appropriate committee thereof adopted prior to and specifically relating to the
occurrence of such change in control.
20.2 In the event of a Change in Control, unless otherwise
determined by the Board as provided in Section 20.1 or by required law, each
participating Employee shall have the right at any time thereafter to and
including the original Exercise Date for such option to exercise the option in
full notwithstanding any limitation or restriction in any option agreement or in
the International Plan
20.3 For purposes of this Section 20, "Change in Control" means:
(a) there shall be consummated
(i) any consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or pursuant to
which any shares of the Company's common stock are to be converted into
cash, securities or other property, provided that the consolidation or
merger is not with a corporation which was a wholly-owned subsidiary of
the Company immediately before the consolidation or merger, or
(ii) any sale, lease, exchange, or other transfer (in one
transaction or a series or related transactions) of all, or
substantially all, or the assets of the Company (other than to one or
more directly or indirectly wholly-owned subsidiaries of the Company);
or
(b) the shareholders of the Company approve any plan or proposal
for the liquidation or dissolution of the Company; or
(c) any person (as such term is used in Sections 13(c) and 14(d)
of the Exchange Act of 1934, as amended) shall become the beneficial
owner (within the meaning of Rule 13d-3 under the Exchange Act),
directly or indirectly, of 30% or more the Company's then outstanding
common stock, provided that such person shall not be a wholly-owned
subsidiary of the Company immediately before it become such 30%
beneficial owner; or
(d) individuals who constitute the Company's Board of Directors on
the date hereof (the "Incumbent Board") cease for any reason to
constitute at least a majority thereof, provided that any person
becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders, was approved by
a vote of at least three-quarters of the directors comprising the
Incumbent Broad (either by a specific vote or by approval of the proxy
statement of the Company in which such person is named as a nominee
for director, without objection to such nomination shall be, for
purposes of this clause (d), considered as though such person were a
member of the Incumbent Board.
21. Termination of the International Plan. This International Plan
shall terminate at the earliest of the following: (a) December 31, 2009; (b) the
date the Committee acts to terminate the International Plan in accordance with
Section 17 above; or (c) the date when all shares reserved under the
International Plan have been purchased. Prior to the occurrence of such events,
on such date as the Committee may determine, the Company may permit a
participating Employee to exercise the option to purchase shares of Common Stock
for as many full shares as the balance of his Accumulation Account will allow at
the lower of Fair Market Value on the Enrollment Date or the date on which the
option is permitted to be exercised. If the Employee elects to purchase shares,
the remaining balance of his Accumulation Account will be refunded to the
Employee after such purchase;
22. Limitations on Sale of Common Stock Purchased Under the
International Plan. The International Plan is intended to provide Common Stock
for investment and not for resale. The Company does not, however, intend to
restrict or influence any Employee in the conduct of his own affairs. An
Employee, therefore, may sell stock purchased under the International Plan at
any time he chooses,
<PAGE>
subject to compliance with the terms of the International Plan, any applicable
securities laws and applicable withholding taxes or other requirements of Local
Law. THE EMPLOYEE ASSUMES THE RISK OF ANY MARKET FLUCTUATIONS IN THE PRICE OF
THE STOCK.
23. Governmental Regulation. The Company's obligation to sell and
deliver shares of the Common Stock under this International Plan is subject to
the approval of any governmental authority required in connection with the
authorization, issuance, or sale of such shares of Common Stock.
Adopted by the Board of Directors: June __, 1999
Approved by Shareholders: September 28, 1999
Exhibit 5-1
Nixon Peabody LLP
Clinton Square
Post Office Box 1051
Rochester, New York 14603-1051
(716) 263-1000
Fax: (716) 263-1600
September 28, 1999
PSINet Inc.
510 Huntmar Park Drive
Herndon, Virginia 20170
Gentlemen:
We have acted as counsel to PSINet Inc. (the "Company") in
connection with the Registration Statement on Form S-8 filed today by the
Company with the Securities and Exchange Commission under the Securities Act of
1933, as amended, relating to the registration of 1,620,000 shares of common
stock, par value $0.01 per share (the "Common Stock"), which may be issued from
time to time and relating to the PSINet 1999 Employee Stock Purchase Plan and
the PSINet 1999 International Employee Stock Purchase Plan (collectively, the
"Plans").
We have examined the originals or copies, certified or
otherwise identified to our satisfaction, of such records of the Company and all
such agreements, certificates of public officials, certificates of officers or
other representatives of the Company, and such other documents, certificates and
corporate or other records as we have deemed necessary or appropriate as a basis
for the opinions set forth herein, including (i) the Certificate of
Incorporation of the Company, and all amendments thereto to the date hereof,
(ii) the Amended and Restated By-Laws of the Company, as amended to the date
hereof (the "By-Laws"), and (iii) certified copies of certain resolutions duly
adopted by the Board of Directors of the Company. As to factual matters material
to the opinions set forth below we have relied, without investigation, upon the
representations and statements of the Company in the Registration Statement and
in such certificates of government officials and officers of the Company as we
have deemed necessary for the purposed of the opinions expressed herein.
The opinions stated herein are limited to the federal laws of
the United States, and the laws of the State of New York.
Based upon and subject to the conditions and limitations set
forth herein, we are of the opinion that:
When the Registration Statement has become effective under the
Act and the shares of Common Stock have been issued in accordance with the
Plans, such shares of Common Stock issued will be duly authorized, validly
issued, fully paid and non-assessable by the Company; as except as provided in
Section 630 of the New York Business Corporation Law.
We hereby consent to the filing of this opinion as an exhibit
to the above-referenced Registration Statement.
Very truly yours,
/s/ Nixon Peabody LLP
Exhibit 23-2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated March 9, 1999, except as to Note 11,
which is as of March 25, 1999, 1999, relating to the consolidated financial
statements and financial statement schedule of PSINet Inc. appearing in
PSINet Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1998.
/s/ PricewaterhouseCoopers LLP
Washington, D.C.
September 27, 1999
Exhibit 23-3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independeant public accountants, we hereby consent to the incorporation by
reference in PSINet Inc.'s Registration Statement on Form S-8 of our reports
dated February 10, 1999, included in Transaction Network Services, Inc.'s
Form 10-K for the fiscal year ended December 31, 1998, which is incorporated
by reference in PSINet Inc.'s Current Report on Form 8-K dated August 22, 1999.
/s/ Arthur Andersen LLP
Vienna,Virginia
September 22, 1999
