<PAGE>

                                                                    EXHIBIT 10.2

                                  PSINET INC.
                        EXECUTIVE STOCK INCENTIVE PLAN
                      (As Amended on September 28, 1999)

     1.   BACKGROUND AND PURPOSE
          ----------------------

          PSINet Inc. (the "Company") hereby establishes the PSINet Inc.
Executive Stock Incentive Plan (the "Plan").  The purpose of this Plan is to
enable the Company to attract and retain employees and consultants and provide
them with an incentive to maintain and enhance the Company's long-term
performance record.  It is intended that this purpose will best be achieved by
granting eligible employees incentive stock options ("ISO's"), non-qualified
stock options ("NQSO's"), stock appreciation rights ("SAR's") and restricted
stock grants, individually or in combination, under this Plan pursuant to the
rules set forth in Sections 83, 162(m), 421 and 422 of the Internal Revenue Code
of 1986, as amended (the "Code").

     2.   ADMINISTRATION
          --------------

          The Plan shall be administered by a Committee of the Company's Board
of Directors (the "Committee").  This Committee shall consist of at least three
members of the Company's Board of Directors each of whom shall, unless the Board
determines otherwise, be "outside directors" as this term is defined in Code
Section 162(m) and regulations thereunder and none of whom during the one-year
period prior to commencement of service on the Committee, or during such
service, has been granted or awarded any equity security or derivative security
of the Company pursuant to the Plan or, except as permitted by Rule 16b-3
(c)(2)(i), or any successor provision, promulgated pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), any other plan of the
Company or any of its affiliates. Subject to the provisions of the Plan, the
Committee shall possess the authority, in its discretion, (a) to determine the
employees of the Company to whom, and the time or times at which, ISO's and/or
NQSO's (ISO's and NQSO's are collectively referred to as "options"), SARs and
restricted stock grants (all four types of grants are collectively referred to
as "awards") shall be granted; (b) to determine at the time of grant whether an
award will be an ISO, a NQSO, a restricted stock grant or a combination of these
awards and the number of shares to be subject to each award; (c) if options are
granted to a participant, whether SARs related to such options shall be granted
to such participant; (d) to prescribe the form of the award agreements and any
appropriate terms and conditions applicable to the awards and to make any
amendments to such agreements or awards; (e) to interpret the Plan; (f) to make
and amend rules and regulations relating to the Plan; and (g) to make all other
determinations necessary or advisable for the administration of the Plan.  The
Committee's determinations shall be conclusive and binding.  No member of the
Committee shall be liable for any action taken or decision made in good faith
relating to the Plan or any award granted hereunder.

     3.   ELIGIBLE EMPLOYEES
          ------------------

          Awards may be granted under the Plan only to employees and consultants
of the Company and its subsidiaries (which shall include all corporations of
which at least fifty percent of the voting stock is owned by the Company
directly or through one or more corporations at least fifty percent of the
voting stock of which is so owned) who have the capability of making a
substantial contribution to the success of the Company. Employees may be awarded
any type of award offered under the Plan.  Consultants may be awarded any type
of award except ISOs.
<PAGE>

     4.   SHARES AVAILABLE
          ----------------

          The total number of shares of the Company's Common Stock (par value of
$0.01 per share) available in the aggregate for awards under this Plan is
15,800,000.  Shares to be granted may be authorized and unissued shares or may
be treasury shares.

          The total number of shares with respect to which restricted stock
awards may be granted to any one participant shall not exceed 10,000 per
calendar year (subject to substitution or adjustment as provided in Section 11).

          If an award expires, terminates or is cancelled without being
exercised or becoming vested, new awards may thereafter be granted under the
Plan covering such shares unless Rule 16b-3 provides otherwise.  No award may be
granted more than 10 years after the effective date of the Plan.

     5.   TERMS AND CONDITIONS OF ISO'S
          -----------------------------

          Each ISO granted under the Plan shall be evidenced by an ISO option
agreement in such form as the Committee shall approve from time to time, which
agreement shall conform with this Plan and contain the following terms and
conditions:

          (a)  Exercise Price. The exercise price under each option shall equal
               --------------
     the fair market value of the Common Stock at the time such option is
     granted. If an option is granted to an officer or employee who at the time
     of grant owns stock possessing more than ten percent of the total combined
     voting power of all classes of stock of the Company (a "10-percent
     Shareholder"), the purchase price shall be at least 110 percent of the fair
     market value of the stock subject to the option.

          (b)  Duration of Option.  Each option by its terms shall not be
               ------------------
     exercisable after the expiration of ten years from the date such option is
     granted. In case of an option granted to a 10-percent Shareholder, the
     option by its terms shall not be exercisable after the expiration of five
     years from the date such option is granted.

          (c)  Options Nontransferable.  Each option by its terms shall not be
               -----------------------
     transferable by the participant otherwise than (i) by will or the laws of
     descent and distribution, (ii) pursuant to a qualified domestic relations
     order, or (iii) to the extent permitted under the option agreement or
     interpretation of the Committee and under Rule 16b-3 promulgated under the
     Exchange Act, by gift to family members or entities beneficially owned by
     family members or other permitted transferees under Rule 16b-3 promulgated
     under the Exchange Act, and shall be exercisable, during the participant's
     lifetime, only by the participant, the participant's guardian or the
     participant's legal representative, the participant's transferee under a
     qualified domestic relations order or other permitted transferee under this
     section.  To the extent required for the option grant and/or exercise to be
     exempt under Rule 16b-3, options (or the shares of Common Stock underlying
     the options) must be held by the participant for at least six months
     following the date of grant.

          (d)  Exercise Terms.  Each option granted under the Plan shall become
               --------------
     exercisable on a schedule to be determined by the Committee at the time of
     grant, which schedule may vary from one grant to another.  Options may be
     partially exercised from

                                      -2-
<PAGE>

     time to time during the period extending from the time they first become
     exercisable until the tenth anniversary (fifth anniversary for a 10-percent
     Shareholder) of the date of grant.

          No outstanding option may be exercised by any person if the employee
     to whom the option is granted is, or at any time after the date of grant
     has been, in competition with the Company.  The Committee has the sole
     discretion to determine whether an employee's actions constitute
     competition with the Company or an affiliated company.  The Committee may
     impose such other terms and conditions on the exercise of options as it
     deems appropriate to serve the purposes for which this Plan has been
     established.

          (e)  Maximum Value of ISO Shares.  No ISO shall be granted to an
               ---------------------------
     employee under this Plan or any other ISO plan of the Company or its
     subsidiaries to purchase shares as to which the aggregate fair market value
     (determined as of the date of grant) of the Common Stock which first become
     exercisable by the employee in any calendar year exceeds $100,000.

          (f)  Payment of Exercise Price.  An option shall be exercised upon
               -------------------------
     written notice to the Company accompanied by payment in full for the shares
     being acquired. The payment shall be made in cash, by check or, if the
     option agreement so permits, by delivery of shares of Common Stock of the
     Company beneficially owned by the participant, duly assigned to the Company
     with the assignment guaranteed by a bank, trust company or member firm of
     the New York Stock Exchange, or by a combination of the foregoing. Any such
     shares so delivered shall be deemed to have a value per share equal to the
     fair market value of the shares on such date. For this purpose, fair market
     value shall equal the closing price of the Company's Common Stock on the
     Nasdaq National Market System on the date the option is exercised, or, if
     there was no trading in such stock on the date of such exercise, the
     closing price on the last preceding day on which there was such trading.

          Subject to the approval of the Board of Directors upon recommendation
     by the Committee, in respect of the exercise of options, the Company may
     loan to the employee a sum equal to an amount which is not in excess of
     100% of the purchase price of the shares so purchased upon exercise, such
     loan to be evidenced by the execution and delivery of a promissory note.
     Interest shall be paid on the unpaid balance of the promissory note at such
     times and at such rate as shall be determined by the Board of Directors.
     Such promissory note shall be secured by the pledge to the Company of
     shares having an aggregate purchase price on the date of exercise equal to
     or greater than the principal amount of such note. An optionee shall have,
     as to such pledged shares, all rights of ownership, including the right to
     vote such shares and to receive dividends paid on such shares, subject to
     the security interest of the Company.  Such shares shall not be released by
     the Company from the pledge unless the proportionate amount of the note
     secured thereby has been repaid to the Company.  All notes executed
     hereunder shall be payable at such times and in such amounts and shall
     contain such other terms as shall be specified by the Board of Directors,
     provided, however, that such terms shall conform to requirements contained
     in any applicable regulations which are issued by any governmental
     authority.

                                      -3-
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     6.   TERMS AND CONDITIONS FOR NQSO'S
          -------------------------------

          Each NQSO granted under the Plan shall be evidenced by a NQSO option
agreement in such form as the Committee shall approve from time to time, which
agreement shall conform to this Plan and contain the same terms and conditions
as the ISO option agreement except that the 10-percent Shareholder restrictions
in Sections 5(a) and 5(b) and the maximum value of share rules of Section 5(e)
shall not apply to NQSO grants.  To the extent an option initially designated as
an ISO exceeds the value limit of Section 5(e), it shall be deemed a NQSO and
shall otherwise remain in full force and effect.

     7.   TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS
          -------------------------------------------------

          To the extent permitted under Rule 16b-3 promulgated under the
Exchange Act, the Committee may, in its discretion, award stock appreciation
rights to any eligible employee of the Company who is subject to Section 16(b)
of the Exchange Act in conjunction with incentive stock options or nonqualified
stock options then being granted to him, or to be attached to one or more such
options theretofore granted and at the time held unexercised by such employee
which shall entitle the employee to receive payment from the Company in
accordance with the following provisions and such other terms and conditions as
the Committee shall determine from time to time:

          (a)  An SAR granted hereunder may be made part of an option at the
               time of grant of the option or at any time thereafter up to six
               months prior to the expiration of the option.

          (b)  Such SAR will entitle the holder to elect to receive, in lieu of
               exercising the option to which it relates, an amount (in cash or
               in Common Stock, or a combination thereof, all in the sole
               discretion of the Committee) equal to 100% of the excess of:

               (1)  the fair market value per share of the Company's Common
                    Stock on the date of exercise of such right, multiplied by
                    the number of shares with respect to which the right is
                    being exercised, over

               (2)  the aggregate option exercise price for such number of
                    shares.

          (c)  Such SAR will be exercisable only to the extent that it has a
               positive value and the option to which it relates is exercisable,
               except that no SAR shall be exercisable during the first six (6)
               months after the date of its grant.

          (d)  Upon exercise of an SAR, the option (or portion thereof) with
               respect to which such right is exercised shall be surrendered and
               shall not thereafter be exercisable.

          (e)  The exercise of an SAR will reduce the number of shares
               purchasable pursuant to the related option and available under
               the Plan to the extent of the number of shares with respect to
               which the right is exercised.

                                      -4-
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     8.   TERMS AND CONDITIONS OF RESTRICTED STOCK GRANTS
          -----------------------------------------------

          The Committee may, evidenced by such written agreement as the
Committee shall from time to time prescribe, grant to an eligible employee a
specified number of shares of the Company's Common Stock which shall vest only
after the attainment of the relevant restrictions described below ("restricted
stock").  Such restricted stock shall have an appropriate restrictive legend
affixed thereto.  A restricted stock grant shall be neither an option nor a
sale, but shall be subject to the following conditions and restrictions:

          (a)  Restricted stock may not be sold or otherwise transferred by the
               participant until ownership vests, provided however, to the
               extent required for the restricted stock grant to be exempt under
               Rule 16b-3, the restricted stock must be held by the participant
               for at least six months following the date of vesting.

          (b)  Ownership shall vest only following satisfaction of one or more
               of the following criteria as the Committee may prescribe:

               (1)  the passage of three years, or such longer period of time as
                    the Committee in its discretion may provide, from the date
                    of grant.

               (2)  the attainment of performance-based goals established by the
                    Committee as of the date of grant.  If the participant's
                    compensation is subject to the $1 million cap of Code
                    Section 162(m), the Committee may establish such performance
                    goals based on one or more of the following targets:

                    .    total shareholder return

                    .    earnings per share growth

                    .    cash flow growth

                    .    return on equity and/or

                    If the participant's compensation is not subject to the $1
                    million cap of Code Section 162(m), the Committee may
                    establish the performance goal on the basis of the preceding
                    four targets or any other target it may from time to time
                    deem appropriate in its discretion.

               (3)  any other conditions the Committee may prescribe, including
                    a non-compete requirement.

          (c)  Unless the Committee shall determine otherwise with respect to
               participants whose compensation is not governed by Code Section
               162(m), the Committee shall grant and administer all performance-
               based awards under (b)(2) above with the intent of meeting the
               criteria of Code Section 162(m) for performance-based
               compensation.  To this end, the outcome of all targeted goals
               shall be substantially uncertain on the date of grant; the goals
               shall be established no later than 90 days following the
               commencement of service to which the goals relate; the minimum
               period

                                      -5-
<PAGE>

               for attaining each performance goal shall be one year; and the
               Committee shall certify at the conclusion of the performance
               period whether the performance-based goals have been attained.
               Such certification may be made by noting the attainment of the
               goals in the minutes of the Committee's meetings.

          (d)  Except as otherwise determined by the Committee, all rights and
               title to restricted stock granted to a participant under the Plan
               shall terminate and be forfeited to the Company upon failure to
               fulfill all conditions and restrictions applicable to such
               restricted stock.

          (e)  Except for the restrictions set forth in this Plan and those
               specified by the Committee in any restricted stock agreement, a
               holder of restricted stock shall possess all the rights of a
               holder of the Company's Common Stock (including voting and
               dividend rights); provided, however, that prior to vesting the
               certificates representing such shares of restricted stock (and
               the amount of any dividends issued with respect thereto) shall be
               held by the Company for the benefit of the participant and the
               participant shall deliver to the Company a stock power executed
               in blank covering such shares.  As the shares vest, certificates
               representing such shares shall be released to the participant.

          (f)  All other provisions of the Plan not inconsistent with this
               section shall apply to restricted stock or the holder thereof, as
               appropriate, unless otherwise determined by the Committee.

     9.   GENERAL RESTRICTION ON ISSUANCE OF STOCK CERTIFICATES
          -----------------------------------------------------

          The Company shall not be required to deliver any certificate upon the
grant, vesting or exercise of any award or option until it has been furnished
with such opinion, representation or other document as it may reasonably deem
necessary to ensure compliance with any law or regulation of the Securities and
Exchange Commission or any other governmental authority having jurisdiction
under this Plan.  Certificates delivered upon such grant, vesting or exercise
may bear a legend restricting transfer absent such compliance.  Each award shall
be subject to the requirement that, if at any time the Committee shall
determine, in its discretion, that the listing, registration or qualification of
the shares subject to such award upon any securities exchange or under any state
or federal law, or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition of, or in connection with, the granting
of such awards or the issue or purchase of shares thereunder, such awards may
not vest or be exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee in the exercise of its reasonable
judgment.

     10.  IMPACT OF TERMINATION OF EMPLOYMENT
          -----------------------------------

          (a)  Options
               -------

          If the employment of a participant terminates by reason of death or
disability (as determined by the Committee), any option may be exercised by the
participant or, in the event of the participant's death, by the participant's
personal representative any time prior to the earlier of

                                      -6-
<PAGE>

the expiration date of the option or the expiration of one year after the date
of termination, but only if, and to the extent that, the participant was
entitled to exercise the option at the date of such termination. Upon
termination of the participant's employment for any reason other than death or
disability, any vested option that was exercisable immediately preceding
termination may be exercised at any time prior to the earlier of the expiration
date of the option or the expiration of three months after the date of such
termination. In the event of retirement, the three month period specified in the
preceding sentence shall be extended to one year in the case of NQSOs.
Notwithstanding the foregoing, an option may not be exercised after termination
of employment if the Committee reasonably determines that the termination of
employment of such participant resulted from willful acts or failure to act by
the participant detrimental to the Company or any of its subsidiaries.

          (b)  Restricted Stock Grants

          (i)  Passage of Time Vesting.  If a participant has been awarded
               -----------------------
restricted stock whose vesting is conditioned solely on the passage of time, any
termination of employment for any reason, shall result in the forfeiture of all
restricted stock awards that were not vested prior to the termination of
employment except as otherwise provided by the Committee.

          (ii) Performance-Based Vesting.  If a participant has been awarded
               -------------------------
restricted stock whose vesting is based solely on the attainment of performance-
based goals or partly on the attainment of performance-based goals and partly on
the passage of time, any termination of employment except death, disability or
retirement shall result in the forfeiture of all restricted stock awards that
were not vested prior to the termination of employment. A participant who
terminates employment on account of death, disability or retirement may, if the
performance-based criteria are eventually attained, be awarded (or, in the event
of death, the participant's designated beneficiary or personal representative if
there is no designated beneficiary shall be awarded) up to a pro rata portion of
the restricted shares based on the participant's length of service as of his or
her termination of employment over the length of the award period ending on the
date the performance-based criteria are satisfied (or the passage of time would
have been satisfied, if later, for an award based in part on performance goals
and in part on the passage of time). The Committee shall have the discretion
whether to grant a full pro rata portion of the restricted shares, a lesser
portion or no shares at all under this subsection (b)(ii).

          (c)  SARs
               ----

          If a participant terminates employment while holding an unexercised
SAR, the participant, or his designated beneficiary (or legal representative if
there is no designated beneficiary) in the event of his death, may exercise the
SAR to the same extent as the option to which it is related may be exercised
following termination of employment.

          (d)  Miscellaneous Termination Provisions
               ------------------------------------

          Unless otherwise determined by the Committee, an authorized leave of
absence shall not constitute a termination of employment for purposes of this
Plan.

          For purposes of this section, retirement means that a participant
terminates employment at or after the date on which the participant reaches any
normal retirement age specified in any policy adopted by the Board or, in the
absence of such policy, age 65.

                                      -7-
<PAGE>

          If the employment of a participant terminates for any reason other
than disability, retirement or death, any unpaid balance on any promissory note
used in the purchase of stock shall become due and payable upon not less than
three months' notice from the Company, which notice may be given at any time
after such termination; provided, however, that such unpaid balance on such
promissory note shall become due and payable five years from the date of such
termination, unless the note has an earlier due date.  In the case of
termination due to death, any unpaid balance remaining on such note on the date
of death shall become due and payable one year from such date.

     11.  ADJUSTMENT OF SHARES
          --------------------

          In the event of any change in the Common Stock of the Company by
reason of any stock dividend, stock split, recapitalization, reorganization,
merger, consolidation, split-up, combination, or exchange of shares, or of any
similar change affecting the Common Stock, the number and kind of shares
authorized under Section 4, the number and kind of shares which thereafter are
subject to an award under the Plan and the number and kind of unexercised
options and unvested shares set forth in awards under outstanding agreements and
the price per share shall be adjusted automatically consistent with such change
to prevent substantial dilution or enlargement of the rights granted to, or
available for, participants in the Plan.

     12.  WITHHOLDING TAXES
          -----------------

          All cash payable to a participant under the terms of this Plan shall
be subject to such federal, state and local income and employment tax
withholdings as payments of this type are normally subject.  Whenever the
Company proposes or is required to issue or transfer shares of Common Stock
under the Plan, or whenever restricted stock vests, the Company shall have the
right to require the recipient to remit to the Company an amount sufficient to
satisfy any federal, state and/or local income and employment withholding tax
requirements prior to the delivery of any certificate or certificates for such
shares or to take any other appropriate action to satisfy such withholding
requirements.  Notwithstanding the foregoing, subject to such rules as the
Committee may promulgate and compliance with any requirements under Rule 16b-3,
the recipient may satisfy such obligation in whole or in part by electing to
have the Company withhold shares of Common Stock from the shares to which the
recipient is otherwise entitled.

     13.  NO EMPLOYMENT RIGHTS
          --------------------

          The Plan and any awards granted under the Plan shall not confer upon
any participant any right with respect to continuance as an employee of the
Company or any subsidiary, nor shall they interfere in any way with the right of
the Company or any subsidiary to terminate the participant's position as an
employee at any time.

     14.  RIGHTS AS A SHAREHOLDER
          -----------------------

          The recipient of any option under the Plan shall have no rights as a
shareholder with respect thereto unless and until certificates for the
underlying shares of Common Stock are issued to the recipient.  The recipient of
a restricted stock grant shall have all rights of a shareholder except as
otherwise limited by the terms of this Plan.

                                      -8-
<PAGE>

     15.  AMENDMENT AND DISCONTINUANCE
          ----------------------------

          This Plan may be amended, modified or terminated by the Committee or
by the shareholders of the Company, except that the Committee may not, without
approval of a majority of the shareholders present in person or by proxy,
materially increase the benefits accruing to participants under the Plan,
materially increase the maximum number of shares as to which awards may be
granted under the Plan, increase the number of restricted stock grants per year
per participant or change the basis for making performance-based awards for
participants whose compensation is subject to Code Section 162(m), change the
minimum exercise price of options or SARs, change the class of eligible persons,
extend the period for which awards may be granted or exercised, or withdraw the
authority to administer the Plan from the Committee or a committee of the
Committee consisting solely of outside directors unless the Board determines
that inside directors may serve on the Committee.  Notwithstanding the
foregoing, to the extent permitted by law, the Committee may amend the Plan
without the approval of shareholders, to the extent it deems necessary to cause
the Plan to comply with Securities and Exchange Commission Rule 16b-3 or any
successor rule, as it may be amended from time to time or as otherwise permitted
under Rule 16b-3 promulgated under the Exchange Act and the Code.  Except as
required by law, no amendment, modification, or termination of the Plan may,
without the written consent of a participant to whom any award shall theretofore
have been granted, adversely affect the rights of such participant under such
award.

     16.  CHANGE IN CONTROL
          -----------------

          (a)  Notwithstanding other provisions of the Plan, in the event of a
     change in control of the Company (as defined in subsection (c) below), all
     of a participant's restricted stock awards shall become immediately vested
     to the same extent as if all restrictions had been satisfied and all
     options and SARs shall become immediately vested and exercisable, unless
     directed otherwise by a resolution of the Committee adopted prior to and
     specifically relating to the occurrence of such change in control.

          (b)  In the event of a change in control each participant holding an
     exercisable option (i) shall have the right at any time thereafter during
     the term of such option to exercise the option in full notwithstanding any
     limitation or restriction in any option agreement or in the Plan, and (ii)
     if no related SAR has been granted with respect to an option, may, subject
     to Committee approval and after written notice to the Company within 60
     days after the change in control, or, if the participant is an officer
     subject to Section 16 of the Exchange Act and to the extent required to
     exempt the transaction under Rule 16b-3, during the period beginning on the
     third business day and ending on the twelfth business day following the
     first release for publication by the Company after such change of control
     of a quarterly or annual summary statement of earnings, which release
     occurs at least six months following grant of the option, whichever period
     is longer, receive, in exchange for the surrender of the option or any
     portion thereof to the extent the option is then exercisable in accordance
     with clause (i), an amount of cash equal to the difference between the fair
     market value (as determined by the Committee) on the date of surrender of
     the Common Stock covered by the option or portion thereof which is so
     surrendered and the option price of such Common Stock under the option.

          (c)  For purposes of this section, "change in control" means:

          (1)  there shall be consummated

                                      -9-
<PAGE>

               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 of related transactions) of all, or
                    substantially all, of the assets of the Company (other than
                    to one or more directly or indirectly wholly-owned
                    subsidiaries of the Company); or

          (2)  the shareholders of the Company approve any plan or proposal for
               the liquidation or dissolution of the Company; or

          (3)  any person (as such term is used in Sections 13(d) and 14(d) of
               the Exchange Act) shall become the beneficial owner (within the
               meaning of Rule 13d-3 under the Exchange Act), directly or
               indirectly, of 30% or more of the Company's then outstanding
               common stock, provided that such person shall not be a wholly-
               owned subsidiary of the Company immediately before it becomes
               such 30% beneficial owner; or

          (4)  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 Board (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.

     17.  EFFECTIVE DATE
          --------------

          The effective date of the Plan is March 1, 1995 provided that within
12 months of this date the Plan is approved by the affirmative vote of the
owners of a majority of the Company's outstanding shares of Common Stock.

     18.  DEFINITIONS
          -----------

          Any terms or provisions used herein which are defined in Sections 83,
162(m), 421, or 422 of the Internal Revenue Code as amended, or the regulations
thereunder or corresponding provisions of subsequent laws and regulations in
effect at the time awards are made hereunder, shall have the meanings as therein
defined.

                                      -10-
<PAGE>

     19.  GOVERNING LAW
          -------------

          To the extent not inconsistent with the provisions of the Internal
Revenue Code that relate to awards, this Plan and any award agreement adopted
pursuant to it shall be construed under the laws of the State of New York.



Amended as of September 28, 1999      PSINET INC.


                                      By: /s/ William L. Schrader
                                         ------------------------
                                           William L. Schrader
                                           Chairman and Chief Executive Officer


Date of Shareholder Approval:  September 28, 1999

                                      -11-