<PAGE>

                                                                     Exhibit 4.1

                       CYBERSTORAGE SYSTEMS CORPORATION
                         (a Massachusetts corporation)

                            1999 STOCK OPTION PLAN

     1.  Statement of Purpose.  The purpose of this Stock Option Plan (the
         --------------------
"Plan") is to benefit Cyberstorage Systems Corporation (the "Company") through
the maintenance and development of its businesses by offering certain present
and future key individuals a favorable opportunity to become holders of stock in
the Company over a period of years, thereby giving them a permanent stake in the
growth and prosperity of the Company and encouraging the continuance of their
involvement with the Company.

     2.  Administration.  The Plan shall be administered by the Board of
         --------------
Directors of the Company, or by any committee of the Board of Directors
appointed by the Board of Directors (the "Committee").  The Committee shall have
full and plenary authority to interpret the terms and provisions of the Plan.

     3.  Eligibility.  Options shall be granted only to: employees of the
         -----------
Company; officers and directors of the Company (whether or not they are
employees); and consultants and advisors of the Company (where bona fide
services were rendered and such services were not in connection with the offer
and sale of securities in a capital raising transaction), selected initially and
from time to time thereafter by the Committee on the basis of their importance
to the business of the Company.

     4.  Granting of Options.  The Committee may grant options under which a
         -------------------
total of not in excess of 15,625 shares of the no par value Common Stock of the
Company ("Common Stock") may be purchased from the Company, subject to
adjustment as provided in Section 12 hereof.  The Committee may, in its
discretion grant under the Plan either non-statutory stock options ("NSO's") or
incentive stock options ("ISO's") as defined in Section 422 of the Internal
Revenue Code of 1986 (the "Code"), provided, however, that ISO's may only be
granted to employees of the Company.  The grants of NSO's shall be evidenced by
written Non-statutory Stock Option Agreements (which need not be identical),
executed by the Company and the holders of NSO's, stating the number of shares
of Common Stock subject to such NSO's evidenced thereby and containing such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan.  The grant of ISOs shall be evidenced by written Incentive Stock
Option Agreements (which need not be identical), executed by the Company and the
holders of ISOs, stating the number of shares of Common Stock subject to such
ISOs evidenced thereby and containing such other provisions as the Committee
deems advisable which are not inconsistent with the Plan.  In addition, the Non-
statutory Stock Option Agreements and Incentive Stock Option Agreements may
include restrictions applicable to shares of Common Stock issuable subject to
the restrictions set forth herein with respect to ISOs or to such other
termination and cancellation provisions as the Committee may determine,
including, but not limited to, a right to repurchase from
<PAGE>

the optionee all or any portion of the shares acquired upon the exercise of an
option granted under the Plan as the Committee may determine. In the event that
an option expires or is terminated or cancelled unexercised as to any shares,
such released shares may again be optioned (including a grant in substitution
for a cancelled option). Shares subject to options may be made available from
unissued or reacquired shares of Common Stock.

     Nothing contained in the Plan or in any option granted pursuant thereto
shall confer upon any optionee any right to be continued in the employment of
the Company, or interfere in any way with the right of the Company to terminate
an employee's employment at any time, or interfere in any way with the right of
the Company to terminate any consulting or other compensation arrangement
between the Company, and any consultant, or advisor of the Company.

     5.  Option Price.  The option price shall be determined by the Committee
         ------------
and, subject to the provisions of Section 12 hereof, shall be not less than the
fair market value, at the time the option is granted, of the shares of Common
Stock subject to the option.  If one or more ISO's are granted to an employee
who, at the time of grant, owns more than ten percent (10%) of the total voting
power of all classes of stock of the Company (a "10% Owner"), the option price
under such ISO shall be not less than 110% of said fair market value.  Such fair
market value shall be determined by the Committee in such manner as it may deem
appropriate.  In no event shall the fair market value of any share of Common
Stock be less than its par value.

     6.  Duration of Options, Increments, and Extensions.  Subject to the
         -----------------------------------------------
provisions of Section 8 hereof, each option shall be for a term of not more than
ten years, provided, however, that ISO's granted to employees who, at the time
of the grant, are 10% Owners shall be for a term of not more than five years.
Each option shall become exercisable with respect to 25% of the total number of
shares subject to the option twelve months after the date of its grant and, with
respect to each additional 25%, at the end of each twelve-month period
thereafter during the succeeding three years.  Notwithstanding the foregoing,
the Committee may, in its discretion (i) specifically provide at the date of
grant of another time or times of exercise; (ii) accelerate the exercisability
of such option subject to such terms as the Committee deems necessary and
appropriate to effectuate the purpose of the Plan; or (iii) at any time prior to
the expiration or termination of any NSO previously granted, extend the term of
any such option (including such NSO's held by officers or directors) for such
period as the Committee in its discretion shall determine.  In no event,
however, shall the aggregate option period with respect to any option, including
the original term of the option and any extensions thereof, exceed ten years.
Subject to the foregoing, all or any part of the shares to which the right to
purchase has accrued may be purchased at the time of such accrual or at any time
or times thereafter during the option period.

                                       2
<PAGE>

     7.  Exercise of Option.  An option may be exercised by giving written
         ------------------
notice to the Company, attention of the Clerk, specifying the number of shares
to be purchased, accompanied by the full purchase price for the shares to be
purchased either in cash or by check, or if approved by the Committee, by shares
of Common Stock of the Company, or by a combination of the foregoing.  Any
optionee holding two or more options that are partially or wholly exercisable at
the same time may exercise said options (to the extent they are then
exercisable) in any order the employee chooses, regardless of the order in which
said options were granted.

     At the time of exercise of any option, the Company may, if it shall
determine it necessary or desirable for any reason, require the optionee (or his
heirs, legatees, or legal representative, as the case may be) as a condition
upon the exercise thereof to deliver to the Company a written representation of
present intention to purchase the shares for investment and not for
distribution.  In the event such representation is required to be delivered, an
appropriate legend may be placed upon each certificate delivered to the optionee
upon his exercise of part or all of the option and a stop transfer order may be
placed with the transfer agent.  Each option shall also be subject to the
requirement that, if at any time the Company determines, in its discretion, that
the listing, registration or qualification of the shares subject to the option
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 issue or purchase of shares thereunder,
the option may not 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 Company.

     8.  Termination of Relationship - Exercise Thereafter.   Each option
         -------------------------------------------------
agreement shall set forth the extent to which the optionee shall have the right
to exercise the Option following termination of the optionee's employment,
service on the Board of Directors, or consulting arrangement with the Company.
Such provisions shall be determined in the sole discretion of the Committee,
shall be included in the option agreement entered into with each optionee, need
not be uniform among all options issued pursuant to the Plan, and may reflect
distinctions based on the reasons for termination of employment, director
relationship or consulting agreement, including, but not limited to, termination
of employment for cause or good reason, or reasons relating to the breach or
threatened breach of restrictive covenants.

     9.  Withholding Taxes.  Whenever the Company is required to issue or
         -----------------
transfer shares of Common Stock under the Plan, the Company shall have the right
to require the grantee to remit to the Company an amount sufficient to satisfy
any federal, state

                                       3
<PAGE>

and/or local withholding tax requirements prior to the delivery of any
certificate or certificates for such shares.

     10.  Non-Transferability of Options.  No ISO shall be transferable by the
          ------------------------------
optionee otherwise than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by Code, Title I of
the Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder, and each option shall be exercisable during an optionee's lifetime
only by the optionee. NSO's may be transferable to the extent set forth in the
Non-statutory Stock Option Agreement relating to such NSO.

     11.  Limitation on Amounts of Incentive Stock Options Granted.  The
          --------------------------------------------------------
aggregate fair market value (determined as of the date of grant) of stock for
which ISO's granted to an optionee under this Plan become first exercisable
shall not exceed One Hundred Thousand Dollars ($100,000) during any calendar
year.

     12.  Adjustment.  The number of shares subject to the Plan and to options
          ----------
granted under the Plan shall be adjusted as follows: (a) in the event that the
outstanding shares of Common Stock of the Company is changed by any stock
dividend, stock split or combination of shares, the number of shares subject to
the Plan and to options granted thereunder shall be proportionately adjusted;
(b) in the event of any merger, consolidation or reorganization of the Company
with any other corporation or corporations, there shall be substituted, on an
equitable basis as determined by the Committee, for each share of Common Stock
then subject to the Plan, whether or not at the time subject to outstanding
options, the number and kind of shares of Stock or other securities to which the
holders of shares of Common Stock of the Company will be entitled pursuant to
the transaction; and (c) in the event of any other relevant change in the
capitalization of the Company, the Committee shall provide for an equitable
adjustment in the number of shares of Common Stock then subject to the Plan,
whether or not then subject to outstanding options.  In the event of any such
adjustment, the purchase price per share shall be proportionately adjusted.

     13.  Termination and Amendment of Plan.  This Plan shall terminate on
          ---------------------------------
August 9, 2009, and an option shall not be granted under the Plan after that
date.  The Plan may at any time or from time to time be terminated, modified, or
further amended by the affirmative vote of a majority in interest of the voting
stock of the Company.  The Board of Directors may at any time and from time to
time modify or further amend the Plan in respects as it shall deem advisable to
conform to any change in the law, or in any other respect, provided that any
amendment by the Board of Directors which would (a) materially increase the
benefits accruing to optionees under the Plan, or (b) increase the number of
securities which may be issued under then plan (other than an increase pursuant
to Section 12 hereof), must be approved by a majority vote of the stockholders

                                       4
<PAGE>

within twelve months before or after the effective date of such increase or
change. In no event shall any amendment of the Plan (i) change or impair any
options previously granted without the consent of the optionee, or (ii) extend
the term of the plan.

     14.  Effective Date.  The Plan was adopted by the Board of Directors and
          --------------
stockholders of the Company and became effective on August 9, 1999.

                                       5