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                                                                    EXHIBIT 10.4

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

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

         PSINet Inc. (the "Company") hereby establishes the PSINet Inc.
Strategic Stock Incentive Plan (the "Plan").  The purpose of this Plan is to
enable the Company and its subsidiaries, in connection with acquisitions,
mergers, strategic alliances, joint ventures and other business combinations and
transactions, to attract and retain employees and consultants and provide them
with an incentive to maintain and enhance the Company's and its subsidiaries'
long-term performance record.  It is intended that this purpose will best be
achieved by granting eligible employees and, subject to the terms of this Plan,
consultants incentive stock options ("ISOs"), non-qualified stock options
("NQSOs"), stock appreciation rights ("SARs") 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").  It is intended that ISOs, SARs, NQSOs and restricted
stock grants will be awarded under this Plan in connection with acquisitions,
mergers, strategic alliances and other business combinations and transactions
effected or to be effected by the Company and/or one or more of its
subsidiaries.

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 or consultants of the Company or a subsidiary to whom, and the time or
times at which, ISOs and/or NQSOs (ISOs and NQSOs 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

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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 or any or more of its
subsidiaries.  Employees may be awarded any type of award offered under the
Plan.  Consultants may be awarded any type of award except ISOs.

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 shall not
exceed eight million (8,000,000) shares.  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 ISOS
         ----------------------------

         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 (10%) 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 (110%) 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 the case of

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    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 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

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    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.

6.  TERMS AND CONDITIONS FOR NQSOS
    ------------------------------

         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

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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.

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

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           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 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.

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     (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 an 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

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representative any time prior to the earlier of 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.

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     (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.

          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.

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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.

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 or
as provided in Section 17 hereof, 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.

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          (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

          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

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          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 June 5, 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.  In the event
that such approval is not given within such 12-month period, all ISOs granted
under this Plan shall be deemed to be NQSOs and this Plan and all awards made
hereunder shall otherwise continue to be in full force and effect.

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.

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

                                       12<PAGE>

                                                                   Exhibit 10.21

                             THE MOTOROLA OMNIBUS

                            INCENTIVE PLAN OF 2000
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                               TABLE OF CONTENTS

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                                                                  Page
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1.   Purpose...................................................... 1

2.   Administration............................................... 1

3.   Participants................................................. 1

4.   Shares Available under the Plan.............................. 1

5.   Types of Benefits............................................ 2

6.   Stock Options................................................ 2

7.   Stock Appreciation Rights.................................... 2

8.   Restricted Stock............................................. 3

9.   Performance Stock............................................ 3

10.  Performance Units............................................ 3

11.  Annual Management Incentive Awards........................... 4

12.  Other Stock or Cash Awards................................... 4

13.  Performance Goals............................................ 4

14.  Change in Control............................................ 4

15.  Adjustment Provisions........................................ 5

16.  Nontransferability........................................... 6

17.  Taxes........................................................ 6

18.  Duration, Amendment and Termination.......................... 6

19.  Fair Market Value............................................ 7

20.  Other Provisions............................................. 7

21.  Governing Law................................................ 7

22.  Stockholder Approval......................................... 7
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                                                                   Exhibit 10.21

                             THE MOTOROLA OMNIBUS

                            INCENTIVE PLAN OF 2000

     1.  Purpose.  The purposes of the Motorola Omnibus Incentive Plan of 2000
         -------
(the "Plan") are (i) to encourage outstanding individuals to accept or continue
employment with Motorola, Inc. ("Motorola") and its subsidiaries or to serve as
directors of Motorola, and (ii) to furnish maximum incentive to those persons to
improve operations and increase profits and to strengthen the mutuality of
interest between those persons and Motorola's stockholders by providing them
stock options and other stock and cash incentives.

     2.  Administration.  The Plan will be administered by a Committee (the
         --------------
"Committee") of the Motorola Board of Directors consisting of two or more
directors as the Board may designate from time to time, each of whom shall
qualify as a "Non-Employee Director" within the meaning set forth in Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act") or any successor legislation.  The Committee shall have the authority to
construe and interpret the Plan and any benefits granted thereunder, to
establish and amend rules for Plan administration, to change the terms and
conditions of options and other benefits at or after grant, and to make all
other determinations which it deems necessary or advisable for the
administration of the Plan.  The determinations of the Committee shall be made
in accordance with their judgment as to the best interests of Motorola and its
stockholders and in accordance with the purposes of the Plan.  A majority of the
members of the Committee shall constitute a quorum, and all determinations of
the Committee shall be made by a majority of its members.  Any determination of
the Committee under the Plan may be made without notice or meeting of the
Committee, in writing signed by all the Committee members.  The Committee may
delegate the administration of the Plan, in whole or in part, on such terms and
conditions as it may impose, to such other person or persons as it may determine
in its discretion, except with respect to benefits to officers subject to
Section 16 of the Exchange Act or officers who are or may be "covered employees"
within the meaning of Section 162(m) of the Internal Revenue Code ("Covered
Employees").

     3.  Participants.  Participants may consist of all employees of Motorola
         ------------
and its subsidiaries and all Non-Employee Directors of Motorola.  Any
corporation or other entity in which a 50% or greater interest is at the time
directly or indirectly owned by Motorola shall be a subsidiary for purposes of
the Plan.  Designation of a participant in any year shall not require the
Committee to designate that person to receive a benefit in any other year or to
receive the same type or amount of benefit as granted to the participant in any
other year or as granted to any other participant in any year.  The Committee
shall consider all factors which it deems relevant in selecting participants and
in determining the type and amount of their respective benefits.

     4.  Shares Available under the Plan.  There is hereby reserved for issuance
         -------------------------------
under the Plan an aggregate of 35,700,000 shares of Motorola common stock.  If
there is a lapse, expiration, termination or cancellation of any stock option
issued under the Plan prior to the issuance of shares thereunder or if shares of
common stock are issued under the Plan and thereafter are reacquired by
Motorola, the shares subject to those options and the reacquired

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shares shall be added to the shares available for benefits under the Plan. In
addition, any shares of common stock exchanged by an optionee as full or partial
payment to Motorola of the exercise price under any stock option exercised under
the Plan, any shares retained by Motorola pursuant to a participant's tax
withholding election, and any shares covered by a benefit which is settled in
cash shall be added to the shares available for benefits under the Plan. All
shares issued under the Plan may be either authorized and unissued shares or
issued shares reacquired by Motorola. Under the Plan, no participant may receive
in any calendar year (i) Stock Options relating to more than 1,000,000 shares,
(ii) Restricted Stock that is subject to the attainment of Performance Goals of
Section 13 hereof relating to more than 100,000 shares, (iii) Stock Appreciation
Rights relating to more than 1,000,000 shares, or (iv) Performance Shares
relating to more than 100,000 shares. The shares reserved for issuance and the
limitations set forth above shall be subject to adjustment in accordance with
Section 15 hereof. All of the available shares may, but need not, be issued
pursuant to the exercise of incentive stock options. Notwithstanding anything
else contained in this Section 4 the number of shares which may be issued under
the Plan for benefits other than stock options shall not exceed a total of
3,000,000 shares (subject to adjustment in accordance with Section 15 hereof).

     5.  Types of Benefits.  Benefits under the Plan shall consist of Stock
         -----------------
Options, Stock Appreciation Rights, Restricted Stock, Performance Stock,
Performance Units, Annual Management Incentive Awards and Other Stock or Cash
Awards, all as described below.

     6.  Stock Options.  Subject to the terms of the Plan, Stock Options may be
         -------------
granted to participants, at any time as determined by the Committee.  The
Committee shall determine the number of shares subject to each option and
whether the option is an Incentive Stock Option.  The option price for each
option shall be determined by the Committee but shall not be less than 100% of
the fair market value of Motorola's common stock on the date the option is
granted.  Each option shall expire at such time as the Committee shall determine
at the time of grant.  Options shall be exercisable at such time and subject to
such terms and conditions as the Committee shall determine; provided, however,
that no option shall be exercisable later than the tenth anniversary of its
grant.  The option price, upon exercise of any option, shall be payable to
Motorola in full by (a) cash payment or its equivalent, (b) tendering previously
acquired shares (held for at least six months) having a fair market value at the
time of exercise equal to the option price, (c) certification of ownership of
such previously-acquired shares, (d) delivery of a properly executed exercise
notice, together with irrevocable instructions to a broker to promptly deliver
to Motorola the amount of sale proceeds from the option shares or loan proceeds
to pay the exercise price and any withholding taxes due to Motorola, and (e)
such other methods of payment as the Committee, at its discretion, deems
appropriate.  In no event shall the Committee cancel any outstanding Stock
Option for the purpose of reissuing the option to the participant at a lower
exercise price or reduce the option price of an outstanding option.

     7.  Stock Appreciation Rights.  Subject to the terms of the Plan, Stock
         -------------------------
Appreciation Rights ("SARs") may be granted to participants at any time as
determined by the Committee.  An SAR may be granted in tandem with a Stock
Option granted under this Plan or on a free-standing basis.  The grant price of
a tandem SAR shall be equal to the option price of the related option.  The
grant price of a free-standing SAR shall be equal to the fair market value of
Motorola's common stock on the date of its grant.  An SAR may be exercised upon
such terms and conditions and for the term as the Committee in its sole
discretion determines; provided, however, that the term shall not exceed the
option term in the case of a tandem SAR or ten years

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in the case of a free standing SAR. Upon exercise of an SAR, the participant
shall be entitled to receive payment from Motorola in cash or stock, at the
discretion of the Committee, in an amount determined by multiplying the excess
of the fair market value of a share of common stock on the date of exercise over
the grant price of the SAR by the number of shares with respect to which the SAR
is exercised.

     8.   Restricted Stock.  Subject to the terms of the Plan, Restricted Stock
          ----------------
may be awarded or sold to participants under such terms and conditions as shall
be established by the Committee.  Restricted Stock shall be subject to such
restrictions as the Committee determines, including, without limitation, any of
the following:

          (a) a prohibition against sale, assignment, transfer, pledge,
          hypothecation or other encumbrance of the shares of Restricted Stock
          for a specified period; or

          (b) a requirement that the holder of Restricted Stock forfeit (or in
          the case of shares sold to the participant resell to Motorola at cost)
          such shares in the event of termination of employment during the
          period of restriction.

All restrictions shall expire at such times as the Committee shall specify.

     9.   Performance Stock.  Subject to the terms of the Plan, the Committee
          -----------------
shall designate the participants to whom long-term performance stock
("Performance Stock") is to be awarded and determine the number of shares, the
length of the performance period and the other terms and conditions of each such
award.  Each award of Performance Stock shall entitle the participant to a
payment in the form of shares of common stock upon the attainment of performance
goals and other terms and conditions specified by the Committee.

          Notwithstanding satisfaction of any performance goals, the number of
shares issued under a Performance Stock award may be adjusted by the Committee
on the basis of such further consideration as the Committee in its sole
discretion shall determine.  However, the Committee may not, in any event,
increase the number of shares earned upon satisfaction of any performance goal
by any participant who is a Covered Employee.  The Committee may, in its
discretion, make a cash payment equal to the fair market value of shares of
common stock otherwise required to be issued to a participant pursuant to a
Performance Stock award.

     10.  Performance Units.   Subject to the terms of the Plan, the Committee
          -----------------
shall designate the participants to whom long-term performance units
("Performance Units") are to be awarded and determine the number of units and
the terms and conditions of each such award.  Each Performance Unit award shall
entitle the participant to a payment in cash upon the attainment of performance
goals and other terms and conditions specified by the Committee.

          Notwithstanding the satisfaction of any performance goals, the amount
to be paid under a Performance Unit award may be adjusted by the Committee on
the basis of such further consideration as the Committee in its sole discretion
shall determine.  However, the Committee may not, in any event, increase the
amount earned under Performance Unit awards upon satisfaction of any performance
goal by any participant who is a Covered Employee and the maximum amount earned
by a Covered Employee in any calendar year may not exceed $5,000,000.  The
Committee may, in its discretion, substitute actual shares of common stock for
the cash payment otherwise required to be made to a participant pursuant to a
Performance Unit award.

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     11.  Annual Management Incentive Awards.  The Committee may designate
          ----------------------------------
Motorola executive officers who are eligible to receive a monetary payment in
any calendar year based on a percentage of an incentive pool equal to 5% of
Motorola's consolidated operating earnings for the calendar year.  The Committee
shall allocate an incentive pool percentage to each designated participant for
each calendar year.  In no event may the incentive pool percentage for any one
participant exceed 30% of the total pool.  Consolidated operating earnings shall
mean the consolidated earnings before income taxes of the Company, computed in
accordance with generally accepted accounting principles, but shall exclude the
effects of Extraordinary Items.  Extraordinary Items shall mean (i)
extraordinary, unusual and/or non-recurring items of gain or loss (ii) gains or
losses on the disposition of a business, (iii) changes in tax or accounting
regulations or laws, or (iv) the effect of a merger or acquisition, all of which
must be identified in the audited financial statements, including footnotes, or
the Management Discussion and Analysis section of the Company's annual report.

          As soon as possible after the determination of the incentive pool for
a Plan year, the Committee shall calculate the participant's allocated portion
of the incentive pool based upon the percentage established at the beginning of
the calendar year.  The participant's incentive award then shall be determined
by the Committee based on the participant's allocated portion of the incentive
pool subject to adjustment in the sole discretion of the Committee.  In no event
may the portion of the incentive pool allocated to a participant who is a
Covered Employee be increased in any way, including as a result of the reduction
of any other participant's allocated portion.

     12.  Other Stock or Cash Awards.  In addition to the incentives described
          --------------------------
in sections 6 through 11 above, and subject to the terms of the Plan, the
Committee may grant other incentives payable in cash or in common stock under
the Plan as it determines to be in the best interests of Motorola and subject to
such other terms and conditions as it deems appropriate.

     13.  Performance Goals.  Awards of Restricted Stock, Performance Stock,
          -----------------
Performance Units and other incentives under the Plan may be made subject to the
attainment of performance goals relating to one or more business criteria within
the meaning of Section 162(m) of the Internal Revenue Code, including, but not
limited to, cash flow; cost; ratio of debt to debt plus equity; profit before
tax; earnings before interest and taxes; earnings before interest, taxes,
depreciation and amortization; earnings per share; operating earnings; economic
value added; ratio of operating earnings to capital spending; free cash flow;
net profit; net sales; price of Company Stock; return on net assets, equity or
stockholders' equity; market share; or total return to shareholders
("Performance Criteria").  Any Performance Criteria may be used to measure the
performance of the Company as a whole or any business unit of the Company.  Any
Performance Criteria may include or exclude Extraordinary Items.  Performance
Criteria shall be calculated in accordance with the Company's financial
statements, generally accepted accounting principles, or under a methodology
established by the Committee prior to the issuance of an award which is
consistently applied and identified in the audited financial statements,
including footnotes, or the Management Discussion and Analysis section of the
Company's annual report.  However, the Committee may not in any event increase
the amount of compensation payable to a Covered Employee upon the attainment of
a performance goal.

     14.  Change in Control.  Except as otherwise determined by the Committee at
          -----------------
the time of grant of an award, upon a Change in Control of Motorola, all
outstanding Stock Options and SARs shall become vested and exercisable; all
restrictions on Restricted Stock shall lapse; all

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performance goals shall be deemed achieved at target levels and all other terms
and conditions met; all Performance Stock shall be delivered; all Performance
Units shall be paid out as promptly as practicable; all Annual Management
Incentive Awards shall be paid out based on the consolidated operating earnings
of the immediately preceding year or such other method of payment as may be
determined by the Committee at the time of award or thereafter but prior to the
Change in Control; and all Other Stock or Cash Awards shall be delivered or
paid. A "Change in Control" shall mean:

               A Change in Control of a nature that would be required to be
          reported in response to Item 6(e) of Schedule 14A of Regulation 14A
          promulgated under the Exchange Act whether or not Motorola is then
          subject to such reporting requirement; provided that, without
          limitation, such a Change in Control shall be deemed to have occurred
          if (a) any "person" or "group" (as such terms are used in Section
          13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
          owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
          indirectly, of securities of Motorola representing 20% or more of the
          combined voting power of Motorola's then outstanding securities (other
          than Motorola or any employee benefit plan of Motorola; and, for
          purposes of the Plan, no Change in Control shall be deemed to have
          occurred as a result of the "beneficial ownership," or changes
          therein, of Motorola's securities by either of the foregoing), (b)
          there shall be consummated (i) any consolidation or merger of Motorola
          in which Motorola is not the surviving or continuing corporation or
          pursuant to which shares of common stock would be converted into or
          exchanged for cash, securities or other property, other than a merger
          of Motorola in which the holders of common stock immediately prior to
          the merger have, directly or indirectly, at least a 65% ownership
          interest in the outstanding common stock of the surviving corporation
          immediately after the 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 Motorola
          other than any such transaction with entities in which the holders of
          Motorola Common Stock, directly or indirectly, have at least a 65%
          ownership interest, (c) the stockholders of Motorola approve any plan
          or proposal for the liquidation or dissolution of Motorola, or (d) as
          the result of, or in connection with, any cash tender offer, exchange
          offer, merger or other business combination, sale of assets, proxy or
          consent solicitation (other than by the Board), contested election or
          substantial stock accumulation (a "Control Transaction"), the members
          of the Board immediately prior to the first public announcement
          relating to such Control Transaction shall thereafter cease to
          constitute a majority of the Board

     15.  Adjustment Provisions.
          ---------------------

          (a)  If Motorola shall at any time change the number of issued shares
          of common stock by stock dividend or stock split, the total number of
          shares reserved for issuance under the Plan, the maximum number of
          shares which may be made subject to an award in any calendar year, and
          the number of shares covered by each outstanding award and the price
          therefor, if any, shall be equitably adjusted by the Committee, in its
          sole discretion.

                                       5
<PAGE>

          (b) Subject to the provisions of Section 14, without affecting the
          number of shares reserved or available hereunder the Board of
          Directors or the Committee may authorize the issuance or assumption of
          benefits under this Plan in connection with any merger, consolidation,
          acquisition of property or stock, or reorganization upon such terms
          and conditions as it may deem appropriate.

          (c) In the event of any merger, consolidation or reorganization of
          Motorola with or into another corporation, other than a merger,
          consolidation or reorganization in which Motorola is the continuing
          corporation and which does not result in the outstanding common stock
          being converted into or exchanged for different securities, cash or
          other property, or any combination thereof, there shall be
          substituted, on an equitable basis as determined by the Committee in
          its discretion, for each share of common stock then subject to a
          benefit granted under the Plan, the number and kind of shares of
          stock, other securities, cash or other property to which holders of
          common stock of Motorola will be entitled pursuant to the transaction.

     16.  Nontransferability.  Each benefit granted under the Plan shall not be
          ------------------
transferable otherwise than by will or the laws of descent and distribution and
each Stock Option and SAR shall be exercisable during the participant's lifetime
only by the participant or, in the event of disability, by the participant's
personal representative.  In the event of the death of a participant, exercise
of any benefit or payment with respect to any benefit shall be made only by or
to the executor or administrator of the estate of the deceased participant or
the person or persons to whom the deceased participant's rights under the
benefit shall pass by will or the laws of descent and distribution.
Notwithstanding the foregoing, at its discretion, the Committee may permit the
transfer of a Stock Option by the participant, subject to such terms and
conditions as may be established by the Committee.

     17.  Taxes.  Motorola shall be entitled to withhold the amount of any tax
          -----
attributable to any amounts payable or shares deliverable under the Plan, after
giving the person entitled to receive such payment or delivery notice and
Motorola may defer making payment or delivery as to any award, if any such tax
is payable until indemnified to its satisfaction.  The Committee may, in its
discretion, subject to such rules as it may adopt, permit a participant to pay
all or a portion of any required withholding taxes arising in connection with
the exercise of a Stock Option or SAR or the receipt or vesting of shares
hereunder by electing to have Motorola withhold shares of common stock, having a
fair market value equal to the amount to be withheld.

     18.  Duration, Amendment and Termination.  No Incentive Stock Option shall
          -----------------------------------
be granted more than ten years after the date of adoption of this Plan by the
Board of Directors; provided, however, that the terms and conditions applicable
to any benefit granted on or before such date may thereafter be amended or
modified by mutual agreement between Motorola and the participant, or such other
person as may then have an interest therein.  The Board of Directors or the
Committee may amend the Plan from time to time or terminate the Plan at any
time.  However, no such action shall reduce the amount of any existing award or
change the terms and conditions thereof without the participant's consent.  No
amendment of the Plan shall be made without stockholder approval if stockholder
approval is required by law, regulation, or stock exchange rule.

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<PAGE>

     19.  Fair Market Value.  The fair market value of Motorola's common stock
          -----------------
at any time shall be determined in such manner as the Committee may deem
equitable, or as required by applicable law or regulation.

     20.  Other Provisions.
          ----------------

          (a) The award of any benefit under the Plan may also be subject to
other provisions (whether or not applicable to the benefit awarded to any other
participant) as the Committee determines appropriate, including provisions
intended to comply with federal or state securities laws and stock exchange
requirements, understandings or conditions as to the participant's employment,
requirements or inducements for continued ownership of common stock after
exercise or vesting of benefits, forfeiture of awards in the event of
termination of employment shortly after exercise or vesting, or breach of
noncompetition or confidentiality agreements following termination of
employment, or provisions permitting the deferral of the receipt of a benefit
for such period and upon such terms as the Committee shall determine.

          (b) In the event any benefit under this Plan is granted to an employee
who is employed or providing services outside the United States and who is not
compensated from a payroll maintained in the United States, the Committee may,
in its sole discretion, modify the provisions of the Plan as they pertain to
such individuals to comply with applicable law, regulation or accounting rules.

     21.  Governing Law.  The Plan and any actions taken in connection herewith
          -------------
shall be governed by and construed in accordance with the laws of the state of
Delaware (without regard to applicable Delaware principles of conflict of laws).

     22.  Stockholder Approval.  The Plan was adopted by the Board of Directors
          --------------------
on February 29, 2000, subject to stockholder approval.  The Plan and any
benefits granted thereunder shall be null and void if stockholder approval is
not obtained at the next annual meeting of stockholders.

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