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                                                                    EXHIBIT 4.01

                                 APPS.COM, INC.

                           1999 EQUITY INCENTIVE PLAN

        This Plan (this "Plan") of Apps.com, Inc. (the "Company") provides that
awards ("Awards") of Options or Restricted Stock (both as hereinafter defined)
for up to 1,060,000 shares (the "Shares") of the Company's Common Stock, $0.01
par value per share (the "Stock"), may be granted to employees of the Company
and its subsidiaries, as defined below, and to others who are in a position to
make significant contributions to the success of the Company and its
subsidiaries ("Participants"). Options granted pursuant to this Plan may be
either incentive stock options ("Incentive Options") as defined in Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"), or options that
are not Incentive Options ("Nonqualified Options"), or both (collectively,
"Options"). "Restricted Stock" means Shares awarded to a Participant under
Section 9 of this Plan pursuant to an Award that entitles the Participant to
acquire Shares for a purchase price (which may be zero if permissible under
applicable law).

        1. PURPOSE. The purposes of this Plan are to attract, retain and
motivate employees and others who are in a position to contribute significantly
to the success of the Company, its parent and subsidiaries (if any), to reward
such contributions, and to encourage Participants to advance the long term
interests of the Company and its subsidiaries through ownership of the Company's
Stock.

        2. ADMINISTRATION.

                (a) Board of Directors. The Plan shall be administered by the
Board of Directors of the Company (the "Board"). The Board, subject to the
express provisions of this Plan, shall determine those persons to be granted
Awards, the times when Awards shall be granted, the number of Shares subject to
each Award, and the terms and conditions of each Award, including whether each
Award is an Incentive Option, a Nonqualified Option or Restricted Stock. The
terms and conditions of an Award shall be set forth in a written agreement (an
"Award Agreement") approved by the Board and delivered or made available to the
Participant as soon as practicable following the effective date of such Award as
specified by the Board and set forth in the Award Agreement (the "Grant Date").
An Option granted pursuant to this Plan shall be presumed to be a Nonqualified
Option unless expressly designated an Incentive Option in the applicable Award
Agreement. The Board shall establish the form of agreements or instruments
granting Awards and any other agreements or instruments under this Plan, and the
rules and regulations for the administration of this Plan, and may amend and
rescind such agreements, instruments, rules and regulations. Notwithstanding the
foregoing, the Board may accelerate (i) the vesting or payment of any Award
(including an Incentive Stock Option), (ii) the lapse of restrictions on any
Award (including an Award of Restricted Stock) and (iii) the date on which any
Option first becomes exercisable. The Board shall interpret this Plan and decide
any questions and settle all controversies and disputes that may arise in
connection with this Plan, and such determinations of the Board shall be
conclusive and shall bind all parties. Subject to Section 17, the Board may,
both generally and in particular instances, waive compliance by a Participant
with any obligation to be performed under an Award and waive any condition or
provision of an Award, except that in the case of an Incentive Option the Board
may not (other than in accordance with Section 5) grant any such waiver if such
waiver would cause the Incentive Option to no longer qualify as an Incentive
Option under Section 422 of the Code.

                (b) Committee. The Board may, in its discretion, delegate its
powers with respect to this Plan to a committee of the Board (the "Committee"),
in which event all references to the Board hereunder shall be deemed to refer to
the Committee. The Committee shall be appointed by the Board and shall be
composed solely of two or more directors. 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

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determination of the Committee under this Plan may be made without notice or
meeting of the Committee by a writing signed by all of the members of the
Committee.

                (c) Public Company Committee. From and after the date of the
first registration of an equity security of the Company under Section 12 of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"), if the
Board shall elect to delegate its powers with respect to this Plan to a
Committee pursuant to the provisions of Subsection (b) above, the Committee
shall be composed solely of two or more directors, each of whom shall be a
"Non-Employee Director", as such term is defined from time to time in Rule 16b-3
promulgated under the Exchange Act, and each of whom shall be an "outside
director" within the meaning of Section 162(m) of the Code.

        3. EFFECTIVE DATE AND TERM. This Plan shall become effective upon
adoption by the Board or approval by the stockholders by at least a majority
vote at a duly held meeting (or by written consent as provided by applicable
law), whichever is earlier, but shall not become effective unless stockholder
approval is obtained within twelve (12) months before or after the adoption of
this Plan by the Board. The Board may grant Awards under this Plan prior to such
approval, but any such Award shall become effective as of the date of grant only
upon such approval and, accordingly, no such Award may be exercisable prior to
such approval. This Plan shall terminate ten years after its effective date.

        4. SHARES SUBJECT TO THE PLAN. The Shares shall be reserved for issuance
upon the exercise of Options granted, or the issuance Shares of Restricted Stock
awarded, under this Plan. Shares subject to an Option which expires or is
terminated, and Shares of Restricted Stock forfeited by a Participant or
repurchased by the Company, may again be subjected to an Award under this Plan.
Shares delivered under this Plan may be authorized but unissued Stock or
treasury Stock. No fractional Shares shall be issued under this Plan. Any
fractional Shares which, but for this Section, would have been issued shall be
deemed to have been issued and immediately sold to the Company for their Fair
Market Value, and the Participant shall receive from the Company cash in lieu of
such fractional Shares.

        5. CHANGES IN CAPITAL STOCK. In the event of a stock dividend, stock
split or combination of shares, recapitalization or other change in the
Company's capital stock, the number and kind of shares of stock or securities of
the Company subject to Awards then outstanding or subsequently granted under
this Plan, the maximum number of shares or securities that may be delivered
under this Plan, the exercise price, and other relevant provisions shall be
adjusted appropriately in a manner determined by the Board to be equitable,
whose determination shall be binding. The Board may also adjust the number of
Shares subject to outstanding Awards, the exercise price of outstanding Awards
and the terms of outstanding Awards to take into consideration material changes
in accounting practices or principles, consolidations or mergers, acquisitions
or dispositions of stock or property or any other event if it is determined by
the Board that such adjustment is appropriate to avoid distortion in the
operation of this Plan, provided that no such adjustment shall be made in the
case of an Incentive Option if it would constitute a modification, extension or
renewal of the Option within the meaning of Section 424(h) of the Code, unless
the Participant consents. If any person owning Restricted Stock receives new or
additional or different securities in connection with a corporate transaction or
stock dividend described in this Section 5 as a result of owning such Restricted
Stock, such securities shall be subject to all of the conditions and
restrictions applicable to the Restricted Stock with respect to which such
securities were issued. Notwithstanding any provision to the contrary, no
adjustments shall be made pursuant to this Section 5 with respect to Incentive
Options unless the Board, after consulting with counsel for the Company,
determines that (i) such adjustments would not constitute a modification,
"extension" or "renewal" of such Incentive Options as such terms are defined in
Section 424 of the Code, and (ii) either that such adjustments would not cause
any adverse tax consequences for the holders of such Incentive Options or the
holders of such Incentive Options consent to the adjustment. No adjustments to
Incentive Options shall be made for dividends paid in cash or in property other
than securities of the Company.

        6. ELIGIBILITY. All employees of the Company and its subsidiaries, as
well as those other persons or entities who, in the opinion of the Board, are in
a position to contribute significantly to

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the success of the Company, its parent or subsidiaries (if any), including,
without limitation, nonemployee Directors, consultants, advisers, independent
contractors, and other service providers, shall be eligible to receive Awards
under this Plan. A "subsidiary" for purposes of this Plan shall be a subsidiary
corporation as defined in Section 424(f) of the Code. Incentive Options shall be
granted only to "employees" as defined in the applicable provisions of the Code
and regulations thereunder. Receipt of Awards under this Plan or of awards under
any other employee benefit plan of the Company or any of its subsidiaries shall
not preclude an employee from receiving Awards or additional Awards under this
Plan. In granting Awards the Board may include or exclude previous participants
in this Plan as the Board may determine.

        7. PROVISIONS APPLICABLE TO OPTION AWARDS.

                (a) Number of Shares. The aggregate fair market value
(determined as of the time of grant) of the Shares with respect to which
Incentive Options are exercisable for the first time by an employee during any
calendar year (under this Plan and all other stock option plans of the Company
or its subsidiaries or any parent corporation) shall not exceed $100,000.

                (b) Exercise Price. The exercise price of each Award shall be
determined by the Board but, in the case of an Incentive Option, shall not be
less than 100% (110% in the case of an Incentive Option granted to a ten-percent
stockholder) of the fair market value of the stock subject to the Option on the
date of grant; nor shall the exercise price of any Award be less, in the case of
an original issue of authorized stock, than par value. For this purpose, (i)
"fair market value" shall be determined by the Board in good faith on a basis
consistent with the provisions of Section 422 of the Code and the regulations
promulgated thereunder, and (ii) "ten percent stockholder" shall mean any
employee who at the time of grant owns directly, or is deemed to own by reason
of the attribution rules set forth in Section 424(d) of the Code, more than 10%
of the total combined voting power of all classes of stock of the Company or of
any of its parent or subsidiary corporations.

                (c) Duration, Vesting and Conditions of Exercise. Each Option
shall be exercisable during such period or periods as the Board may determine,
but in no case after the expiration of ten years (five years in the case of an
Incentive Option granted to a "ten percent stockholder" as defined in (b) above)
from the date of grant. In the discretion of the Board, options may be
exercisable (i) in full upon grant or (ii) over or after a period of time
conditioned on satisfaction of certain Company, division, group, office,
individual or other performance criteria, including the continued performance of
services to the Company or its subsidiaries. In the case of an Option not
immediately exercisable in full, the Board may at any time accelerate the time
at which all or any part of the Option may be exercised.

        8. EXERCISE OF OPTIONS. Any exercise of an Option shall be in writing
pursuant to a written instrument in the form prescribed by the Board, signed by
the proper person and delivered to the Company, accompanied by (a) such
documents as may be required by this Plan, by such written instrument, or by the
Board, and (b) payment as required by such written instrument for the number of
Shares for which the Option is exercised. In addition, each exercise of an
Option shall be subject to such additional conditions as may be required by the
Board, including without limitation those described in Section 10 of this Plan.
No exercise of an Option shall be effective, and the Company shall not be
obligated to deliver any Shares, until all requirements and conditions for
exercise have been met to the satisfaction of the Board.

        9. PROVISIONS APPLICABLE TO RESTRICTED STOCK AWARDS

                (a) Awards of Restricted Stock. The Board may award Shares of
Restricted Stock, subject to such conditions as the Board may determine to be
appropriate (including a Company right during a specified period or periods (the
"Restricted Period") to repurchase the Shares at their original purchase price
or to require forfeiture of the Shares if the purchase price was zero and if
permissible under applicable law), and in connection therewith may determine the
purchase price, if any, therefor, the length of any Restricted Period, the
conditions under which the Shares may be forfeited to or repurchased by the
Company, and any other terms and conditions

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of the Awards. The Board may modify or waive any restrictions, terms and
conditions with respect to any Restricted Stock. Shares of Restricted Stock may
be issued for whatever consideration is determined by the Board, subject to
applicable law.

                (b) Transferability. Shares of Restricted Stock may not be sold,
assigned, transferred, pledged or otherwise encumbered, except as permitted by
the Board, during the Restricted Period.

                (c) Evidence of Award. Shares of Restricted Stock shall be
evidenced in such manner as the Board may determine. Any certificates issued in
respect of Shares of Restricted Stock shall be registered in the name of the
Participant and, unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the Company. At
the expiration of the Restricted Period, the Company shall deliver the
certificates and stock power to the Participant.

                (d) Shareholder Rights. A Participant shall have all the rights
of a shareholder with respect to Restricted Stock awarded, including voting and
dividend rights, unless otherwise provided in the Award Agreement.

        10. CONDITIONS TO ISSUANCE OF SHARES. Except as waived by the Board in a
particular case, all the following conditions shall be complied with as a
condition to the issuance of Shares under this Plan:

                (a) Legal and Regulatory Matters. The delivery of Shares shall
be subject to (i) compliance with applicable federal and state laws and
regulations, (ii) if the outstanding Shares are listed at the time on any stock
exchange, compliance with the listing requirements of such exchange and (iii)
the Company's counsel's approval of all other legal matters in connection with
the issuance and delivery of the Shares. If the sale of the Shares has not been
registered under the Securities Act, the Company may require, as a condition to
delivery of the Shares, such representations or agreements as counsel for the
Company may consider appropriate to avoid violation of such Act and may require
that the certificates evidencing the Shares bear an appropriate legend
restricting transfer.

                (b) Listing and Registration of Shares. If at any time the Board
shall determine that the listing, registration or qualification of the Shares
covered by any 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 Award or the issuance or purchase of Shares thereunder, such Award may not
be exercised in whole or in part unless and until such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board.

                (c) Tax Undertakings. In the case of an Award that is not an
Incentive Option, the Board may require the Participant to remit to the Company
an amount sufficient to satisfy any federal, state or local withholding tax
requirements (or make other arrangements satisfactory to the Company with regard
to such taxes, including withholding from regular cash compensation, providing
other security to the Company, or remitting or foregoing the receipt of
property, including Stock, having a fair market value (as determined by the
Board in good faith in its discretion) on the date of exercise sufficient to
meet such potential liability) prior to the delivery of any Shares in respect of
such Award. In the case of an Incentive Option, if at the time the Option is
exercised the Board determines that under applicable law and regulations the
Company could be liable for the withholding of any federal or state tax with
respect to a disposition of the Shares received upon exercise, the Board may
require the Participant to agree (i) to inform the Company promptly of any
disposition (within the meaning of Section 424(c) of the Code and the
regulations thereunder) of Shares received upon exercise, and (ii) to give such
security as the Board deems adequate to meet the potential liability of the
Company for the withholding of tax, and to augment such security from time to
time in any amount reasonably deemed necessary by the Board to preserve the
adequacy of such security.

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                (d) Evidence of Authority. If an Option is exercised by the
legal representative of a deceased Participant or by a person to whom the Option
has been transferred by the Participant's will or by applicable laws of descent
and distribution, the Company shall not be obligated to deliver Shares until
satisfied as to the authority of the person exercising the Option.

                (e) Restrictions on Transfer of Stock. If the sale of Shares has
not been registered under the Securities Act of 1933, as amended, or under
applicable state securities laws, the Company may require, as a condition to
issuance of Shares, such representations or agreements from the Participant as
counsel for the Company may consider appropriate to avoid violation of such Act
or such state securities laws and may require that the certificates evidencing
such Shares bear an appropriate legend restricting transfer. In addition, the
Board may require as conditions to the issuance of any Shares that the
Participant agree in writing to (i) restrictions on the transfer of Shares, (ii)
a right of first refusal of the Company to repurchase Shares in the event the
holder desires to sell such Shares, and (iii) a right of the Company to
repurchase Shares in the event of termination of employment or death or
disability. Such restrictions and rights on the part of the Company shall be
identified in the Award Agreement.

        11. PAYMENT FOR SHARES.

                (a) Exercise Price. The price for Shares issued in respect of an
Award shall be paid prior to delivery of evidence thereof, and may be paid as
follows: (i) in cash or by certified check, bank draft or money order payable to
the order of the Company; (ii) if permitted by the terms of the Award Agreement,
by the delivery of shares of Stock having a fair market value (as determined by
the Board in good faith in its reasonable discretion) on the date of exercise
equal to the exercise price; or (iii) by a combination of cash and Stock;
provided, however, that payment of the exercise price by delivery of shares of
Common Stock of the Company owned by such Participant may be made only if such
payment does not result in a charge to earnings for financial accounting
purposes as determined by the Board, unless the Board otherwise permits such
payment by delivery of shares of Common Stock.

                (b) Promissory Note. To the extent permitted by any applicable
margin regulations of the Board of Governors of the Federal Reserve System and
other provisions of applicable law, an Award Agreement may permit the price for
Shares to be paid by payment of at least the par value by a combination of cash
and Stock as provided above, and delivery to the Company of the Participant's
promissory note for the balance of the price. Unless otherwise specified by the
Board in the Award Agreement, such note (i) shall bear interest at least equal
to the Applicable Federal Rate, as determined under Section 1274(d) of the Code
and published by the Internal Revenue Service on a monthly basis, in effect for
the month of purchase, (ii) shall be a full recourse note, (iii) shall be
secured by a pledge of the Shares so purchased, and (iv) shall be payable in
equal annual installments of principal and interest over a period of not more
than five years after the date of purchase (except that any such note shall be
payable on demand in the event of termination of employment). Any such
promissory note shall be in a form satisfactory to the Company.

        12. NO RIGHTS AS STOCKHOLDER. Participants shall not have the rights of
stockholders with regard to Options granted under this Plan, except as to Shares
actually purchased pursuant to such Options.

        13. NONTRANSFERABILITY OF OPTIONS. Each Option granted under this Plan
shall be transferable only by will or the laws of descent and distribution and
shall be exercisable during the lifetime of the person to whom the Option is
granted only by such person. Except as permitted by the preceding sentence, no
Option granted under this Plan or any of the rights and privileges thereby
conferred shall be transferred, assigned, pledged, hypothecated or otherwise
disposed of in any way (by operation of law or otherwise), and no such Option,
right or privilege shall be subject to execution, attachment or similar process.
Upon any attempt to so transfer, assign, pledge, hypothecate or otherwise
dispose of any such Option, right or privilege contrary to the provisions
hereof, or upon the levy of any attachment or similar process upon such Option,
right or privilege, the Option and such rights and

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privileges shall immediately become null and void. Notwithstanding the above
provisions of this Section 13, any Option granted under this Plan may be pledged
or hypothecated to secure an obligation to the Company.

        14. TERMINATION OF EMPLOYMENT; DEATH OR DISABILITY.

                (a) Termination In General. Upon termination of the employment
of a Participant, any unexercised Options shall terminate immediately, except as
provided in Subsections (b), (c) and (d) below. For purposes of this Section 14,
employment shall not be considered terminated (i) in the case of sick leave or
other bona fide leave of absence approved for purposes of this Plan by the
Board, so long as the employee's right to re-employment is guaranteed either by
statute or by contract, or (ii) in the case of a transfer of employment among
the Company and its parent or subsidiaries (if any), or to the employment of a
corporation (or a parent or subsidiary corporation of such corporation) issuing
or assuming an Option, which in the case of an Incentive Option is a transaction
to which Section 424(a) of the Code applies. For all purposes of this Section
14, the term "employment" shall include the continuing relationships of
Participants to the Company as Directors, consultants, advisers, independent
contractors and other service providers; provided, however, that notwithstanding
the foregoing, in the discretion of the Board, the Award Agreement granting
Options to any of the foregoing persons may provide that the Option may remain
in force and effect notwithstanding the termination of the relationship between
any such person and the Company.

                (b) Termination Not For Cause. If such termination was not "for
cause" (as hereinafter defined), the Participant may exercise any Option which
was otherwise exercisable on the date of termination for a period ending on the
earlier of (i) the expiration of three months after the date of such
termination, (ii) the expiration date of such Option as fixed pursuant to the
first sentence of Section 7(c), and (iii) the termination of such Option
pursuant to the provisions of Section 15. For purposes hereof, the term "for
cause" shall mean only (i) the willful or reckless failure by the Participant to
perform his duties under, or willful or reckless violation of, any written
employment or consulting agreement (other than a failure resulting from the
Participant's death or disability), which failure or violation shall not have
been cured within the cure period, if any, provided in such agreement; (ii) the
commission by the Participant of an act of fraud or theft against the Company or
any of its subsidiaries; or (iii) the conviction of the Participant of (or the
plea by the Participant of nolo contendere to) any felony.

                (c) Death. If termination of employment results from the
Participant's death, any Option which was otherwise exercisable by such
Participant as of the time immediately before his or her death shall be
exercisable by the Participant's estate or by any person who acquired the Option
by bequest or inheritance for a period ending on the earlier of (i) one year
after the death of the Participant, (ii) the expiration date of such Option as
fixed pursuant to the first sentence of Section 7(c), and (iii) the termination
of such Option pursuant to the provisions of Section 15. The Board may permit
any Option to be exercised for up to the total number of Shares subject to the
Option, or grant an Option which by its terms is exercisable for up to the total
number of Shares subject to the Option, at any time within one year after the
death of the Participant, consistent with the above provisions.

                (d) Disability. If the termination of employment results from
the Participant's disability, any Option which was otherwise exercisable by such
Participant immediately prior to the termination of his employment shall be
exercisable by him or her (or his or her legal representative) for a period
ending on the earlier of (i) one year after such termination, (ii) the
expiration date of such Option as fixed pursuant to the first sentence of
Section 7(c), and (iii) the termination of such Option pursuant to the
provisions of Section 15. The Board may permit any Option to be exercised for up
to the total number of Shares subject to the Option, or grant an Option which by
its terms is exercisable for up to the total number of Shares subject to the
Option, at any time within one year after termination of employment, consistent
with the above provisions. The term "disability" shall for this purpose be
defined as such term is defined in Section 22(e)(3) of the Code.

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        15. REORGANIZATIONS; DISSOLUTION.

                (a) Substitute Options. If by reason of a corporate merger,
consolidation, acquisition of property or stock, separation, reorganization, or
liquidation the Board shall authorize the issuance or assumption of a stock
option in a transaction to which Section 424(a) of the Code applies, then,
notwithstanding any other provision of this Plan, the Board may grant an option
upon such terms and conditions as it may deem appropriate for the purpose of
assumption of the old option, or substitution of a new option for the old
option, in conformity with the provisions of said Section 424(a) of the Code and
the Regulations thereunder, and any such option shall not reduce the number of
shares otherwise available for issuance under this Plan.

                (b) Termination of Options. In the event of a Change in Control
of the Company (as defined in subsection (c), below), and in anticipation
thereof if required by the circumstances, the Board, in its sole discretion, may
(i) accelerate the exercisability, prior to the effective date of such Change in
Control, of all outstanding Options granted under this Plan (and redesignate as
Nonqualified Options any Options or portions thereof that were originally
designated as Incentive Options but that no longer so qualify under Section 422
of the Code), (ii) arrange, if there is a surviving or acquiring corporation,
subject to the consummation of a Change of Control, to have that corporation or
an affiliate of that corporation grant to employees and other Participants
replacement options with substantially similar or, if not adverse to the
Participants, different provisions with respect to exercisability (upon which
grant the Options granted under this Plan shall immediately terminate and be of
no further force or effect) which, however, in the case of Incentive Options,
satisfy, in the determination of the Board, the requirements of Section 424(a)
of the Code, (iii) cancel all outstanding Options in exchange for consideration
in cash or in kind in an amount equal to the value of the Shares, as determined
by the Board in good faith, the Participant would have received had the Option
been exercised (to the extent then exercisable or to a greater extent, including
in full, as the Board may determine) less the Option price therefor (upon which
cancellation such Options shall immediately terminate and be of no further force
or effect), (iv) permit the purchaser of the Company's stock or assets to
deliver to the Participants the same kind of consideration that is delivered to
the stockholders of the Company in cancellation of such Options in an amount
equal to the value of the Shares, as determined by the Board in good faith, the
Participant would have received had the Option been exercised (to the extent
then exercisable or to a greater extent, including in full, as the Board may
determine), less the Option price therefor, or (v) take any combination (or
none) of the foregoing actions.

                (c) Definition of "Change of Control". For purposes of this
Plan, a "Change in Control" shall mean and include any of the following:

                        (i) a merger or consolidation of the Company with or
into any other corporation or other business entity in which the Company is the
surviving corporation (except one in which the holders of capital stock of the
Company immediately prior to such merger or consolidation continue to hold at
least a majority of the outstanding securities having the right to vote in an
election of the Board of Directors ("Voting Stock") of the Company); or any such
merger or consolidation in which the Company is not the surviving corporation;

                        (ii) a sale, lease, exchange or other transfer (in one
transaction or a related series of transactions) of all or substantially all of
the Company's assets;

                        (iii) the acquisition by any person or any group of
persons (other than the Company, any of its direct or indirect subsidiaries, or
any trustee, fiduciary or other person or entity holding securities under any
employee benefit plan or trust of the Company or any of its direct or indirect
subsidiaries) acting together in any transaction or related series of
transactions, of such number of shares of the Company's Voting Stock as causes
such person, or group of persons, to own beneficially, directly or indirectly,
as of the time immediately after such transaction or series of transactions, 50%
or more of the combined voting power of the Voting Stock of the Company other
than as a result of an acquisition of

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securities directly from the Company, or solely as a result of an acquisition of
securities by the Company which by reducing the number of shares of the Voting
Stock outstanding increases the proportionate voting power represented by the
Voting Stock owned by any such person to 50% or more of the combined voting
power of such Voting Stock; and

                        (iv) a change in the composition of the Company's Board
of Directors following a tender offer or proxy contest, as a result of which
persons who, immediately prior to a tender offer or proxy contest, constituted
the Company's Board of Directors shall cease to constitute at least a majority
of the members of the Board of Directors.

                (d) Dissolution or Liquidation. Upon the dissolution or
liquidation of the Company, all outstanding Options granted under this Plan
shall terminate, but each Participant shall have the right, immediately prior to
such dissolution or liquidation, to exercise his or her Options to the extent
then exercisable.

        16. EMPLOYMENT RIGHTS AND OTHER BENEFITS. Neither the adoption of this
Plan nor the grant of Awards shall confer upon any employee any right to
continued employment with the Company or any parent or subsidiary or affect in
any way the right of the Company or such parent or subsidiary to terminate the
employment of an employee at any time. Except as specifically provided by the
Board in any particular case, the loss of existing or potential profit in Awards
granted under this Plan shall not constitute an element of damages in the event
of termination of the employment of an employee even if the termination is in
violation of an obligation of the Company to the employee by contract or
otherwise. Nothing in this Plan shall restrict the authority of the Board to
grant stock options or to award bonuses or other benefits to employees or others
otherwise than pursuant to this Plan. For purposes of this Section 16, the term
"employee" shall include those persons granted Awards pursuant to this Plan who
are not employees of the Company, and the term "employment" shall include the
arrangement or relationship between the Company and any such person.

        17. DISCONTINUANCE, CANCELLATION, AMENDMENT AND TERMINATION. The Board
may at any time abandon this Plan or discontinue granting Awards under this
Plan. With the consent of the Participant, the Board may at any time modify or
cancel an existing Option in whole or in part and grant another Option for such
number of shares as the Board specifies. The Board may at any time amend this
Plan for the purpose of satisfying the requirements of Section 422 of the Code
or of any changes in applicable laws or regulations or for any other purpose
which may at the time be permitted by law, or may at any time terminate this
Plan as to any further grants of Awards, provided that (except to the extent
expressly required or permitted herein above) no such amendment shall, without
the approval of the stockholders of the Company by at least a majority vote at a
duly held meeting (or by written consent as provided by applicable law), (a)
increase the maximum number of shares for which Awards may be granted under this
Plan, (b) change the group of employees eligible to receive Awards under this
Plan, (c) reduce the price at which Incentive Options may be granted, (d) extend
the time within which Awards may be granted, (e) alter this Plan in such a way
that Incentive Options already granted hereunder would not be considered
Incentive Options under Section 422 of the Code, (f) amend the provisions of
this Section 17, or (g) make any other change in this Plan which requires
stockholder approval under applicable law or regulations, including any approval
requirement which is a prerequisite for exemptive relief under Section 16 of the
Exchange Act. The termination or any modification or amendment of this Plan
shall not adversely affect the rights of any Participant under any Award
previously granted without his or her consent.

        18. COMPLIANCE WITH RULE 16b-3. It is intended that the provisions of
this Plan and any Option granted hereunder to a person subject to the reporting
requirements of Section 16(a) of the Exchange Act shall comply in all respects
with the terms and conditions of Rule 16b-3 promulgated under the Exchange Act
or any successor provisions thereto. Any Award Agreement granting Options shall
contain such provisions as are necessary or appropriate to assure such
compliance. To the extent that any provision hereof is found not to be in
compliance with such Rule, such provision shall be deemed to be

                                       17
<PAGE>   9

modified so as to be in compliance with such Rule or, if such modification is
not possible, shall be deemed to be null and void, as it relates to a recipient
subject to Section 16(a) of the Exchange Act.

        ADOPTED by the Board of Directors of Apps.com, Inc. as of the 17th day
of November, 1999.

        APPROVED by the stockholders of Apps.com, Inc. as of the 17th day of
November, 1999.

                                       18<PAGE>   1

                                                                    EXHIBIT 4.02

                                 Apps.com, Inc.

                Incentive Stock Option Grant Agreement under the

                           1999 Equity Incentive Plan

Number of Shares:     ______________________
Date of Grant:        ______________________

        Apps.com, Inc., a Delaware corporation (the "Corporation"), hereby
grants to __________________ (the "Participant"), as of the date stated above,
an option (the "Option") to purchase the number of shares stated above (the
"Shares") of the Corporation's Common Stock no par value (the "Common Stock"),
pursuant to the Corporation's 1999 Equity Incentive Plan (the "Plan"), a copy of
which is attached hereto and is incorporated herein in its entirety by this
reference.

        The Participant hereby accepts the Option, subject to the terms and
conditions set forth in the Plan as fully as if they were set forth herein, and
to the following additional terms and conditions:

        1. Type of Option. It is intended that the Option be an "incentive stock
option" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").

        2. Exercise Price. The price at which Shares may be purchased pursuant
to the Option is $ per share.

        3. Option Period. The Option expires ten years from the date of grant,
as set forth above. The Participant should take special note that the Option may
be terminated early by certain events including termination of employment,
disability or death, as provided in the Plan.

        4. Vesting of Right to Exercise. During the period commencing on the
date of grant and continuing until the date that is one year from the date of
grant (the "Anniversary Date"), the Option shall not be exercisable to any
extent. Commencing on the first day following the Anniversary Date and during
the ensuing month, the Option may be exercised for not more than one-quarter
(1/4) of the Shares. Thereafter, on the last day of such ensuing month and on
the last day of each of the thirty-six (36) months thereafter, the Option may be
exercised (to the extent not already exercised) for not more than an additional
one-forty-eighth (1/48) of the Shares. Thereafter, and for the duration of the
Option, the Option may be exercised in full. [In the event that there is a
"Change of Control" of the Company (as such term is defined in the Plan), then,
immediately prior to the consummation of such Change of Control, the Option
shall become exercisable for such additional number of Shares as shall be equal
to the number of Shares which would have vested over the next twelve (12) months
but for the occurrence of the Change of Control. Such number of Shares for which
the Option shall become exercisable by reason of a Change in Control shall be in
addition to the number of Shares for which the Option is then exercisable as
calculated pursuant to the first sentence of this Section 4.]

                                       19
<PAGE>   2

        5. Exercise. (a) The Option may be exercised from time to time with
respect to all or any part of the Shares as to which it is exercisable at the
time; provided, however, that it may not be exercised as to less than ten
percent of the Shares at any one time, except with respect to the remaining
Shares then purchasable under the Option, if less than ten percent of the
Shares. No fractional Shares may be purchased except in combination with a
fraction or fractions under another presently exercisable option or options
granted under the Plan, and then only to the extent that such combination equals
a full Share.

        (b) To exercise the Option, the Participant (or other person exercising
the Option) must deliver to the Corporation the following:

        1. a completed and signed notice of exercise, in the form of Attachment
        A hereto, stating the number of Shares to be purchased. If the Option is
        being exercised by a person other than the Participant, the notice of
        exercise must be accompanied by proof of the right of such person to
        exercise the Option and such other pertinent information as the
        Corporation deems necessary;

        2. two (2) signed Stock Restriction Agreements (the "Stock Restriction
        Agreement"), in the form attached hereto as Attachment B, and such other
        agreements, instruments or documents as the Company may reasonably
        require to comply with the requirements of the Securities Act of 1933,
        as amended, or any applicable state securities laws. The shares
        purchased pursuant to exercise of the Option shall be subject to the
        restrictions and limitations set forth in such agreements; and

        3. payment in full of the exercise price for the Shares being purchased
        (i) in cash or by certified check, bank draft or money order made
        payable to the order of the Company, (ii) by delivery of shares of
        Common Stock having a fair market value (as determined by the Board in
        good faith in its reasonable discretion) on the date of exercise equal
        to the exercise price, (iii) by a combination of cash and Common Stock,
        or (iv) if previously approved by the Board, by a combination of cash,
        Common Stock and a promissory note in accordance with the terms of the
        Plan; provided, however, that payment of the exercise price by delivery
        of shares of Common Stock of the Company already owned by the
        Participant may be made only if such payment does not result in a charge
        to earnings for financial accounting purposes as determined by the Board
        (unless otherwise permitted by the Board).

In addition, the exercise of an Option shall be subject to satisfaction of all
conditions the Board may impose on the exercise of such Option pursuant to this
Agreement or the Plan, and any such exercise shall be effective only after all
such conditions have been satisfied.

        6. No Rights as Stockholder. The Participant (or any other person
entitled to exercise the Option) shall not be entitled to any rights as a
stockholder of the Corporation with respect to any Shares covered by the Option
until such Shares shall have been registered on the stock transfer books of the
Corporation in the name of the Participant (or such other person).

        7. Notice of Premature Disposition. If, within two years from the date
of grant or within one year after the transfer of Shares to the Participant upon
exercise of the Option, the Participant makes a disposition (as defined in
Section 424(c) of the Code) of any Shares, the Participant shall notify the
Clerk of the Corporation within 10 days after such disposition.

        8. Compliance with Laws, Regulations and Rules. The Plan, this
Agreement, the Option and the obligation of the Corporation to sell and deliver
the Shares upon exercise of the Option are and shall be subject to (a) all
applicable laws, government regulations and rules and (b) all applicable
regulations and rules adopted by the Board in accordance with the Plan. If at
any time the Board determines in its discretion that the listing, registration
or qualification, on any securities exchange or under any federal or state law,
of the Shares deliverable upon exercise of the Option, or the consent or
approval of any regulatory body, or compliance with any law, rule or regulation,
is necessary or desirable as a condition of, or in connection with, the delivery
or purchase of Shares, then exercise of the Option shall not be effective

                                       20
<PAGE>   3

unless such listing, registration, qualification, consent, approval or
compliance shall have been effected or obtained free of any conditions not
acceptable to the Board.

        9. Legend on Certificates. Each certificate representing the Shares
shall bear restrictive legends referring to the restrictions on transfer and
repurchase rights of the Company contained in the Stock Restriction Agreement
and the restrictions on transfer imposed by the Securities Act of 1933, as
amended, and any applicable exemption therefrom pursuant to which the Shares may
be issued.

        10. No Employment Rights. Nothing in the Plan, the Option or this Option
Agreement confers upon the Participant any right to continued employment or
interferes with the right of the Corporation to terminate the Participant's
employment.

        11. Taxes. As a condition of issuance of Shares under this Option, the
Participant agrees that, if at the time the Option is exercised the Board
determines that under applicable law and regulations the Corporation could be
liable for the withholding of any federal or state tax with respect to a
disposition of the Shares received upon exercise, the Board may require the
Participant to give, or to agree to give, such security as the Board deems
adequate to meet the potential liability of the Corporation for the withholding
of tax, and to augment such security from time to time in any amount reasonably
deemed necessary by the Board to preserve the adequacy of such security.

        12. Definition. As used in this Agreement, the term "Corporation" shall
include any subsidiary or parent of the Corporation as defined in Sections
424(e) and (f) of the Code.

        13. Amendments. The Board may at any time or times amend the Plan or the
Option for the purpose of satisfying the requirements of any changes in
applicable laws or regulations or for any other purpose which at the time may be
permitted by law. No termination or amendment of the Plan or amendment of the
Option shall, without the Participant's consent, adversely affect the
Participant's rights under the Option.

        14. Consistency with Plan. If there is any inconsistency between the
provisions of this Agreement and the provisions of the Plan, the latter shall
control.

                                            Apps.com, Inc.

                                            By
                                               ---------------------------------
                                            Name: Justin Fielding
                                            Title: President and CEO

                                            ------------------------------------
                                            Participant

                                       21
<PAGE>   4

                                  Attachment A
                        Form of Exercise of Stock Option
             (To be completed and signed only on exercise of Option)

I hereby exercise the stock option (the "Option") granted by Apps.com, Inc. (the
"Corporation") to me on ___________________, ______, subject to all the terms
and provisions thereof as contained in the Incentive Stock Option Grant
Agreement of the same date signed by me concerning such Option and in the
Apps.com Inc. 1999 Equity Incentive Plan referred to therein, and notify you of
my desire to purchase _______ Shares pursuant to the Option.

Enclosed is my check in the sum of $ __________ in full payment for such Shares
and applicable withholding taxes.

I also enclose completed and signed duplicate Stock Restriction Agreements in
the required form.

DATED: ________________, _______.

                                            Signature:

                                            ------------------------------------

                                            Name: ______________________________

<PAGE>   5

                                  ATTACHMENT B

                                 Apps.com, Inc.

                           Stock Restriction Agreement

        AGREEMENT (this "Agreement"), dated as of ______________, by and between
Apps.com, Inc., a Delaware corporation (the "Company"), and _____________ (the
"Stockholder"), who is purchasing ________ shares of the Company's Common Stock
pursuant to an award of Restricted Stock or pursuant to exercise of an option
(the "Option") under the Company's 1999 Equity Incentive Plan (the "Plan") (such
shares of Common Stock presently owned and any additional shares which the
Stockholder may acquire upon exercise of the Option or otherwise being
hereinafter collectively called the "Shares").

        WHEREAS, at or prior to the date this Agreement, the Stockholder has
purchased all or a portion of the Shares; and

        WHEREAS, the Company and the Stockholder believe it is in the best
interests of the Company and of the Stockholder that certain restrictions be
placed upon all of the Shares;

        NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

        1. Restrictions on Transfer.

                (a) No Transfer. The Stockholder shall not sell, assign,
transfer, pledge, hypothecate or otherwise dispose of, by operation of law or
otherwise (collectively "transfer"), any of the Shares, or any interest therein,
unless such transfer shall be made in compliance with the provisions of Section
2 of this Agreement.

                (b) Investment Representation. The Stockholder hereby
represents, warrants and agrees with the Company that he or she is acquiring the
Shares for his or her own account, for investment and not with a view to or in
connection with any distribution thereof. The Stockholder shall not transfer any
Shares unless either (i) a registration statement under the Securities Act of
1933, as amended (the "Act"), with respect to the Shares shall have become, and
continue to be, effective, or (ii) the Company receives an opinion of counsel
that registration of such Shares is not required under the Act.

        2. Right of First Refusal on Dispositions.

                (a) Receipt of Third-Party Offer. If at any time the Stockholder
desires to sell for cash, cash equivalents or any other form of consideration
(including a promissory note) all or any part of his Shares pursuant to an offer
or proposed offer from a third party (the "Proposed Transferee"), the
Stockholder shall submit a written offer (the "Offer") to sell such Shares (the
"Offered Shares") to the Company on terms and conditions, including price, not
less favorable to the Company than those on which the Stockholder proposes to
sell such Offered Shares to the Proposed Transferee. The Offer shall disclose
the identity of the Proposed Transferee, the number of Offered Shares proposed
to be sold, the total number of Shares owned by the Stockholder, the terms and
conditions, including price, of the proposed sale, and any other material facts
relating to the proposed sale. The Offer shall further state that the Company
may acquire, in accordance with the provisions of this Agreement, all or any
portion of the Offered Shares for the price and upon the other terms and
conditions, including deferred payment (if applicable), set forth therein.

<PAGE>   6

                (b) Company Notice of Intent to Purchase. If the Company desires
to purchase all or any portion of the Offered Shares, the Company shall give to
the Stockholder written notice of the number of Offered Shares to be purchased
by it, which notice shall be delivered in person or mailed to the Stockholder
within twenty (20) days of the date of the Offer. Such communication shall, when
taken in conjunction with the Offer, be deemed to constitute a valid, legally
binding and enforceable agreement for the sale and purchase of such Offered
Shares. Sale of the Offered Shares to be sold to the Company pursuant to this
Section 2 shall be made at the offices of the Company on the forty-fifth (45th)
day following the date of the Offer (or, if such day is not a business day, then
on the next succeeding business day). Such sale shall be effected by the
Stockholder's delivery to the Company of a certificate or certificates
evidencing the Offered Shares to be purchased by the Company, duly endorsed for
transfer to the Company, against payment to the Stockholder of the purchase
price therefor by the Company by a certified or cashier's check.

                (c) Sale to Third Party. If, within twenty (20) days of its
receipt of the Offer, the Company fails to deliver written notice to the
Stockholder of its intention to purchase all of the Offered Shares (the Offered
Shares which the Company does not elect to purchase being referred to as the
"Refused Shares"), the Refused Shares not so purchased may be sold by the
Stockholder at any time within ninety (90) days after the date the Offer was
made to the Proposed Transferee, at not less than the price and upon other terms
and conditions, if any, not more favorable to the Proposed Transferee than those
specified in the Offer. If the Refused Shares are not sold within the ninety
(90) day period, they shall continue to be subject to the requirements of a
prior offer pursuant to this Section 2. If the Refused Shares are sold pursuant
to this Section 2 to any purchaser who is not a party to this Agreement, the
Company, may at its option, require the purchaser to execute and deliver a new
Stock Restriction Agreement in substantially the form of this Agreement
containing substantially the same terms as those set forth herein.

                (d) Permitted Transfers. The Stockholder shall have the right to
make Permitted Transfers of the Stockholder's Shares and the provisions of
subsections (a), (b) and (c) above shall not apply to any such Permitted
Transfer by the Stockholder. For purposes of this Agreement, "Permitted
Transfer" shall mean any transfer by the Stockholder during his lifetime of all
or any portion of his Shares (i) to the Company, (ii) to another holder of
issued and outstanding shares of capital stock of the Company, (iii) to or for
the benefit of any spouse, child or grandchild of the Stockholder, or to a trust
for the benefit of any of the foregoing, including transfers by will or the laws
of descent and distribution; provided, however, that, it shall be a condition of
each such transfer, that (x) the transferee agrees to be bound by the terms of
this Agreement as though no such transfer had taken place, and that (y) the
Stockholder has complied with all applicable law in connection with such
transfer.

        3. Effect of Prohibited Transfer. The Company shall not be required (a)
to transfer on its books any of the Shares which shall have been sold or
transferred in violation of any of the provisions set forth in this Agreement,
or (b) to treat as owner of such Shares or to pay dividends to any transferee to
whom any such Shares shall have been so sold or transferred.

        4. Restrictive Legend. All certificates representing Shares shall have
affixed thereto a legend in substantially the following form, in addition to any
other legends that may be required under federal or state securities laws:

        The shares of stock represented by this certificate are subject to
        restrictions upon transfer set forth in a certain Stock Restriction
        Agreement between the corporation and the registered owner of this
        certificate. The Corporation will furnish a copy of such Agreement to
        the holder of this certificate upon written request and without charge.

        5. Adjustments for Stock Splits, Stock Dividends, Etc. If from time to
time while this Agreement shall remain in force and effect there is any stock
split-up, stock dividend, stock distribution or other reclassification of the
Common Stock of the Company, any and all new, substituted or additional
securities to which the Stockholder is entitled by reason of his ownership of
Shares shall be immediately subject to the restrictions on transfer and other
provisions of this Agreement in the same manner and to the same extent as such
Shares.

        6. Miscellaneous.

                (a) Termination of Restrictions on Transfer. This Agreement, and
the obligations of the Stockholder and the Company hereunder, shall terminate
upon the earliest to occur of: (i) the closing of the first underwritten public

<PAGE>   7

offering by the Company under the Securities Act of 1933 of any of its equity
securities for its own account for cash; (ii) the sale of all or substantially
all of the shares of capital stock, the assets or business of the Company, by
merger, sale of assets or otherwise; or (iii) the expiration of ten (10) years
from the date of this Agreement. The sale of the Shares pursuant to any of the
transactions described in clauses (i) and (ii) of the preceding sentence shall
not be subject to the provisions of said Section 1(a) and Section 2.

                (b) Severability; Governing Law. If any provisions of this
Agreement shall be determined to be illegal or unenforceable by any court of
law, the remaining provisions shall be severable and enforceable in accordance
with their terms. This Agreement shall be governed by, and construed in
accordance with, the laws of Massachusetts.

                (c) Injunctive Relief. It is acknowledged that it will be
impossible to measure the damages that would be suffered by the Company if the
Stockholder fails to comply with the provisions of this Agreement and that, in
the event of any such failure, the Company will not have an adequate remedy at
law. The Company shall, therefore, be entitled to obtain specific performance of
each of the Stockholder's obligations hereunder and to obtain immediate
injunctive relief. The Stockholder shall not urge, as a defense to any
proceeding for such specific performance or injunctive relief, that the Company
has an adequate remedy at law.

                (d) Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors and permitted assigns.

                (e) Modification or Amendment. Neither this Agreement nor any
provision hereof can be modified, amended, changed, discharged or terminated
except by an instrument in writing, signed by the Stockholder and the Company.

                (f) Notices. All notices required or permitted hereunder shall
be in writing and deemed effectively given upon personal delivery, upon deposit
with the United States Post Office, by registered, certified mail, postage
prepaid, or upon deposit with a recognized express overnight courier service,
addressed, if to the Company, to Apps.com, Inc., 29 Smith Place; Cambridge, MA
02138. Attention: Treasurer, and if to the Stockholder, to the address shown
beneath his or her respective signature to this Agreement, or at such other
address or addresses as either party shall designate to the other in accordance
with this subsection (f).

                (g) Merger Provision. This Agreement constitutes the entire
agreement between the parties hereto pertaining to the subject matter hereof and
supersedes all prior and contemporaneous agreements and understandings, whether
oral or written, of the parties hereto concerning the subject matter hereof.

                (h) Waivers. Any provision contained in this Agreement may be
waived, either generally or in any particular instance, by the Board of
Directors of the Company.

                (i) Amendment. This Agreement may be amended or modified only by
a written instrument executed by both the Company and the Stockholder.

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                            Apps.com, Inc.

                                            By:
                                               ---------------------------------
                                               its

<PAGE>   8

                                            ACCEPTED:

                                            ------------------------------------
                                            (Signature of Stockholder)

                                            ------------------------------------
                                            (Printed Name of Stockholder)

                                            ------------------------------------
                                            (Residence Street Address)

                                            ------------------------------------
                                            (City)      (State)       (Zip Code)

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