Document:

CONSULTING SERVICES CONTRACT

     This consulting services agreement ("Consulting Agreement") is made as of
this 27th day of August, 2001, by and between NICOLE LEIGH VAN COLLER ("NLVC"),
an individual, and ROANOKE TECHNOLOGY CORP. (the "Company"), a North Carolina
Corporation with, NLVC and the Company collectively sometimes herein referred to
as the "Parties". The Parties hereto, for ten (10) dollars and other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, hereby agree as follows:

     WHEREAS, the Company is a fully reporting company whose securities are
traded on the Over- the-Counter Bulletin Board under the ticker symbol "RNKE";
and

     WHEREAS, NLVC is in the business of consulting with private and public
companies regarding issues of business development, management reorganization,
financial forecasts and projections, and merger and acquisition strategies; and

     WHEREAS, the Company wishes to retain NLVC as a non-exclusive corporate
consultant; and

      IT IS, THEREFORE agreed that:

1. Services. The Company shall retain NLVC to provide general corporate
consulting services which may include, but not be limited to: assist with the
development and successful execution of the Company's strategic business plans,
corporate finance matters, merger and acquisition activity, and executive
compensation and employee benefit plans, assistance in the preparation and
organization of corporate and financial due diligence material, assistance in
the review and evaluation of potential merger candidates, assistance in
negotiating the terms of a merger or reorganization, assistance in evaluating
and analyzing the Company's specific industry and its competitors, assistance
with corresponding with the Company's accountants and auditors, and assistance
regarding financial forecasts and projections. NLVC shall agree to make
available qualified personnel for the foregoing purposes and devote such
business time and attention thereto as it shall determine is required.

     The Company understands that any and all suggestions, opinions or advice
given to the Company by NLVC are advisory only and the ultimate
responsibility, liability and decision regarding any action(s) taken or
decisions made lies solely with the Company and not with NLVC.

2. Term. The term of this Consulting Agreement shall be for a period of one year
from the date hereof (the "Term").

3. Compensation. As compensation for entering into this Consulting Agreement and
for services rendered over the Term, NLVC shall acquire a total of 1.2 million
shares of free trading common stock.

4. Arbitration. The parties hereby agree that any and all claims (except only
for requests for injunctive or other equitable relief) whether existing now, in
the past or in the future as to which the

<PAGE>

parties or any affiliates may be adverse parties, and whether arising out of
this Consulting Agreement or from any other cause, will be resolved by
arbitration before the American Arbitration Association within the State of
Florida. The parties hereby irrevocably consent to the jurisdiction of the
American Arbitration Association and the sites of the arbitration (and of any
action for injunctive or other equitable relief) within the State of Florida.
Any award in arbitration may be entered in any domestic or foreign court having
jurisdiction over the enforcement of such awards. The law applicable to the
arbitration and this Consulting Agreement shall be that of the State of Florida,
determined without regard to its provisions which would otherwise apply to a
question of conflict of laws.

5.  Miscellaneous.

     5.1  Assignment. This Agreement is not transferable or assignable.

     5.2  Execution and Delivery of Agreement. Each of the parties shall be
          entitled to rely on delivery by fax transmission of an executed copy
          of this agreement by the other party, and acceptance of such fax
          copies shall create a valid and binding agreement between the parties.

     5.3  Titles. The titles of the sections and subsections of this agreement
          are for the convenience of reference only and are not to be considered
          in construing this agreement.

     5.4  Severability. The invalidity or unenforceability of any particular
          provision of this agreement shall not affect or limit the validity or
          enforceability of the remaining provisions of this agreement.

     5.5  Entire Agreement. This agreement constitutes the entire agreement and
          understanding between the parties with respect to the subject matters
          herein and supersedes and replaces any prior agreements and
          understandings, whether oral or written, between them with respect to
          such matters.

     5.6  Counterparts. This Agreement may be executed in any number of
          counterparts, each of which shall be an original, but all of which
          together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first above written.

                                    ROANOKE TECHNOLOGY CORP.

                                    By: /s/ David Smith, Jr.
                                    --------------------------

AGREED AND ACCEPTED

By: /s/ Nicole Leigh Van Coller
------------------------------
        NICOLE LEIGH VAN COLLER<PAGE>   1

                                                                   EXHIBIT 10.50

                EMPLOYMENT AGREEMENT AND STOCK OPTION AGREEMENTS

                              EMPLOYMENT AGREEMENT

        THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated May 31, 2001, is
entered into between ARTISTdirect, Inc., a Delaware corporation ("Company") and
Frederick W. Field ("Employee"), and shall be effective upon the date that all
of the conditions set forth in that certain side letter agreement of even date
(the "Side Letter") among Company, ARTISTdirect Recordings, Inc. ("ADR"),
Employee, Radar Records Holdings, LLC, a Delaware limited liability company
("FieldCo"), and ARTISTdirect Records, L.L.C. (the "Label") shall have been
satisfied (the "Effective Date").

                                    RECITALS

        WHEREAS, Company desires to employ Employee to serve Company and its
subsidiaries, and Employee desires to be so employed by Company, on the terms
and subject to the conditions hereinafter set forth.

                                    AGREEMENT

        NOW, THEREFORE, the parties hereto have agreed, and do hereby mutually
agree, as follows:

1.      Employment and Duties. Subject to the other terms and conditions set
forth herein, Company hereby employs Employee, and Employee agrees to be
employed by Company, as Chairman and Chief Executive Officer. Employee shall be
Company's most senior executive. Employee shall report solely and directly to
Company's Board of Directors (the "Board"). During the Term, Employee shall
faithfully perform to the best of his ability all services and acts as both (a)
are consistent with his title and position and (b) may reasonably be assigned to
him by the Board.

2.      Devotion.

        (a) During the Term, Employee shall devote his business time, skill and
energies exclusively to the business of Company and its subsidiaries from time
to time (the "Subsidiaries"), which shall include Sno-Core, LLC, notwithstanding
that Company has less than a fifty percent (50%) interest therein.

        (b) It is hereby acknowledged that, concurrently with the execution of
this Agreement, Employee and the Label, which is a Subsidiary, are entering into
an employment agreement whereby, subject to the satisfaction of the conditions
set forth in the Side Letter, Employee shall become the Chief Executive Officer
of the Label (the "Label Employment Agreement") and that, subject to the Side
Letter, FieldCo, which is an affiliate of Employee, is being issued units of
membership interest in the Label. In light of the foregoing, it is specifically
acknowledged and agreed that the performance of Employee's services to the Label
pursuant to the Label Employment Agreement shall not be deemed to be a breach of
this Agreement so long as the performance by Employee of his duties hereunder
are not materially and adversely affected thereby. In addition, provided such
activities do not unreasonably interfere with the performance by Employee of his
duties hereunder, Employee shall be entitled to devote not more than twenty
percent (20%) of his total business time, measured upon a yearly basis, to the
motion picture and television activities of Radar Pictures, LLC and service on
the board of directors of each of the following companies: Huge Click,
Interland, Load Media, Omnipod, Strategic Data Corporation and E-Vox (such
activities and service, collectively, the "Permitted Outside Activities").
Employee shall

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be entitled to retain for his own account the proceeds earned by Employee from
the Permitted Outside Activities.

3.      Limitation on Authority. Employee shall not make or give on behalf of
Company and/or ADR, any approval, vote, consent, decision or determination
concerning the Label that the Operating Agreement of the Label explicitly
reserves to ADR, the Founding Members or a Majority in Interest, but rather,
Employee shall refer each such approval, vote, consent, decision or
determination to the Board, in order that the Board may make or give such
approval, vote, consent, decision or determination on behalf of Company and/or
ADR. Furthermore, Employee shall abstain from voting in any such decision or
determination of the Board; provided, however, that Employee need not abstain
from giving his consent as a director in any unanimous written consent of the
Board.

4.      Principal Place of Employment. During the Term, Employee's place of
employment shall be at the principal offices of Company in the Los Angeles area;
provided, however, it is agreed that Employee will be expected to travel from
time to time at Company's expense in accordance with the provisions of Section
7(c) below.

5.      Term. The term of Employee's employment shall commence on the Effective
Date and continue for five years (the "Term"), unless terminated sooner as
provided in Section 8 below.

6.      Compensation. For all services to be rendered by Employee hereunder
(other than to the Label), Employee shall be paid by Company the amounts set
forth in this Section 6. Except as specifically provided in the Label Employment
Agreement, Employee shall not be entitled to additional compensation for
performing any services consistent with his duties hereunder for any Subsidiary.

        (a) Base Salary. Company shall pay Employee a base salary at the annual
rate of Five Hundred Thousand Dollars ($500,000), payable in accordance with
Company's standard payment schedule for employees.

        (b) Participation in Executive Bonus Pool. Employee shall be entitled to
participate in Company's executive performance bonus pool, the details of which
participation and plan shall be determined by the Compensation Committee of the
Board.

        (c) Stock Options. Pursuant to Notices of Grant of Stock Option
substantially in the forms attached hereto as Exhibits 1, 2 and 3, Company shall
issue Employee three options to acquire shares of common stock in Company.

Amounts payable to Employee pursuant to this Section 6 shall be subject to
required withholdings and reviewed for any increases annually by the
Compensation Committee of the Board, provided that any increases shall be in the
sole discretion thereof.

7.      Employee Benefits; Reimbursement for Expenses.

        (a) Employee shall be entitled to participate in such Company
retirement, profit sharing and pension plans and life and other insurance
programs, as well as other benefit programs (other than employee bonus plans),
which are available to the other most senior executives of Company, subject to
Company's policies with respect to all of such benefits or insurance programs or
plans, and the terms thereof, which policies and terms may include limitations
on the eligibility of a Company employee to participate simultaneously in both

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Company benefit plans and Subsidiary benefit plans; provided, however, that
notwithstanding anything herein to the contrary, Company shall not be obligated
to institute or maintain any particular benefit or insurance program or plan or
aspect thereof.

        (b) Employee shall be entitled to not less than four (4) weeks' vacation
during each year of the Term hereof to be scheduled at mutually agreeable times
and accrued and taken in accordance with Company policy. For the avoidance of
doubt, any vacation to be taken by Employee pursuant to this Agreement shall be
taken simultaneously with any vacation to be taken by Employee pursuant to the
Label Employment Agreement.

        (c) Company agrees to reimburse Employee for such reasonable and
necessary out-of-pocket expenses incurred by Employee during the Term in the
performing of services for Company, including but not limited to for
business-related travel (first class), hotel, meals, telephone calls and
entertainment. If Employee shall travel in respect of both any Permitted Outside
Activity and Company business, Employee shall only seek and be entitled to those
expenses reasonably allocable to his pursuit of Company business. As a condition
to the reimbursement of such expenses by Company to Employee, Employee shall
provide Company with copies of invoices, receipts or other satisfactory
documentation in sufficient detail to allow Company to confirm the business
nature of the expenses and claim an income tax deduction for such paid items, if
such items are deductible. The obligations of Company to make the reimbursements
specified hereunder for approved expenses accrued prior to the effective date of
termination of this Agreement shall survive any termination of the Term.

8.      Termination.

        (a) Company may terminate Employee's employment hereunder after the
occurrence and during the continuance of any Disability of Employee, upon thirty
(30) days' prior written notice to Employee. For purposes of this Agreement,
"Disability" means Employee's incapacity to perform substantially all of his
then current duties as required hereunder for one hundred eighty (180) days or
more within any period of three hundred sixty-five (365) consecutive days
because of mental or physical condition, illness or injury, consistent with
applicable state and federal law. In the event of any dispute regarding the
existence of Employee's Disability, the matter will be resolved by the
determination of a physician qualified to practice medicine in the State of
California, selected by Employee and reasonably approved by Company, or, failing
such approval, by a majority of three physicians qualified to practice medicine
in the State of California, one to be selected by Company, one to be selected by
Employee and the third to be selected by the two designated physicians. For this
purpose, Employee will submit to appropriate medical examinations.

        (b) Company may terminate Employee's employment hereunder for Cause. For
the purposes of this Agreement, "Cause" shall mean Employee shall have (i) been
convicted of, or pleaded nolo contendere to, any felony or any lesser crime
involving fraud, embezzlement, or misappropriation of the property of Company or
any Subsidiary, (ii) engaged in gross negligence or willful misconduct in the
performance of Employee's duties hereunder, (iii) materially breached any of the
provisions of Sections 1, 2 or 3 above, or 9, 10, 11 or 17 below, (iv)
misappropriated for his own purpose and benefit any (A) material property of
Company or any Subsidiary or (B) any material opportunity of Company or any
Subsidiary, (v) had his employment with the Label terminated by the Label for
"Cause" (as defined in the Label Employment Agreement) or (vi) terminated his
employment with the Label without "Good Reason" (as defined in the Label
Employment Agreement). Notwithstanding anything to the contrary contained
herein, no event or circumstance described in any of the preceding clauses

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<PAGE>   4

(ii), (iii) or (iv)(B) above shall constitute "Cause" for purposes of this
Agreement unless Company gives Employee written notice delineating the claimed
event or circumstance and setting forth Company's intention to terminate
Employee's employment if such claimed event or circumstance is not duly remedied
within thirty (30) days) following such notice, if susceptible to remedy, and
Employee fails to remedy such event or circumstance within such thirty (30) day
period; provided, however, that if such failure susceptible to remedy cannot be
remedied within such thirty (30) day period, it shall not constitute Cause
hereunder if Employee shall commence such remedy within such thirty (30) day
period and thereafter diligently pursue such remedy and cause its completion
within a reasonable period thereafter. In addition, the first breach by Employee
of either the commitment contained in the second sentence of Section 2(b) above
(regarding Employee's performance of services to the Label under the Label
Employment Agreement) or the commitment contained in the third sentence of
Section 2(b) above (regarding the Permitted Outside Activities) shall not be
grounds for termination for Cause. For the avoidance of doubt, Employee's
resignation from the Board, and his consequential loss of the title of
"Chairman," shall not in and of themselves constitute breaches of this
Agreement.

        (c) The employment of Employee hereunder shall be automatically
terminated on the date of Employee's death.

        (d) Employee may terminate his employment hereunder forthwith at any
time for Good Reason upon written notice to Company. For purposes of this
Agreement, "Good Reason" shall mean the occurrence of any of the following: (i)
a material and substantial reduction in Employee's title, responsibilities,
duties or reporting (although Employee shall cease to hold the title of
"Chairman" if he ceases to be chairman of the Board); (ii) a reassignment of
Employee without Employee's consent to a geographic location in excess of
thirty-five (35) miles from Company's current principal offices; (iii) a
material breach by Company of any of its material obligations to Employee
hereunder; (iv) the failure of Employee to be re-elected to the Board following
the expiration of his initial service thereon, so long as Employee shall not
previously have resigned or been removed from the Board, or such failure is not
due to Employee's suffering from a disability that, if it continues, could
reasonably be expected to constitute a Disability hereunder; (v) Company's
materially altering the nature of its business; or (vi) Employee's termination
of his employment with the Label for "Good Reason" (as defined in the Label
Employment Agreement). Notwithstanding anything to the contrary contained
herein, none of the foregoing events or circumstances (other than clause (vi)
above) shall constitute "Good Reason" for purposes of this Agreement unless
Employee gives Company written notice delineating the claimed event or
circumstance and setting forth Employee's intention to terminate Employee's
employment if such claimed event or circumstance is not duly remedied within
thirty (30) days following such notice, if susceptible to remedy, and Company
fails to remedy such event or circumstance (or cause such remedy) within such
thirty (30) day period; provided, however, that if such failure susceptible to
remedy cannot be remedied within such thirty (30) day period and does not
involve a payment of compensation or a reimbursement of expenses, it shall not
constitute Good Reason hereunder if Company shall commence such remedy within
such thirty (30) day period and thereafter diligently pursue such remedy and
cause its completion within a reasonable period thereafter.

        (e) Employee may terminate his employment with Company at any time with
"Justification" upon written notice to Company. For purposes of this Agreement,
"Justification" shall mean: (i) Company shall have committed any act or omission
(over the objection of Employee, if Employee is afforded the opportunity to
participate in the decision whether to commit such act or omission) and Employee
reasonably believes such act or omission constitutes a material violation of any
law or governmental regulation, provided Employee first

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gives Company written notice delineating the claimed event or circumstance and
setting forth Employee's intention to terminate Employee's employment if such
claimed event or circumstance is not duly remedied within thirty (30) days
following such notice, if susceptible to remedy, and Company fails to remedy
such event or circumstance within such thirty (30) day period; ; provided,
however, that if such failure susceptible to remedy cannot be remedied within
such thirty (30) day period, it shall not constitute Justification hereunder if
Company shall commence such remedy within such thirty (30) day period and
thereafter diligently pursue such remedy and cause its completion within a
reasonable period thereafter; or (ii) the commencement of any legal proceeding
in which (A) the Label and/or ADR alleges that FieldCo materially breached the
Label Operating Agreement or (B) the Label and/or FieldCo alleges that ADR
materially breached the Label Operating Agreement; provided, however, that any
termination by Employee of his employment with Company arising from the
commencement of any arbitration proceeding pursuant to Section 7(h) of the Label
Employment Agreement shall be subject to Section 8(f) below.

        (f) Employee may terminate his employment with Company forthwith upon
written notice upon the commencement of any arbitration proceeding pursuant to
Section 7(h) of the Label Employment Agreement. Notwithstanding that Employee
terminates his employment with Company pursuant to this Section 8(f), the nature
of the termination of Employee's employment with the Label shall determine the
nature of the termination of Employee's employment with Company. If Employee
terminates his employment pursuant to this Section 8(f), and: (i) Employee's
employment with the Label is terminated by the Label for "Cause" (as defined in
the Label Employment Agreement), then Employee's employment with Company shall
be deemed to have been terminated by Company for Cause pursuant to Section
8(b)(v) above; (ii) Employee remains employed at the Label because the
arbitrator determines that the Label was not entitled to terminate Employee's
employment for "Cause" (as defined in the Label Employment Agreement), then
Employee's employment with Company shall be deemed to have been terminated by
Employee with Justification pursuant to Section 8(e) above; (iii) Employee's
employment with the Label is terminated for "Good Reason" (as defined in the
Label Employment Agreement), then Employee's employment with Company shall be
deemed to have been terminated by Employee for Good Reason pursuant to Section
8(d) above; or (iv) Employee's employment with the Label is terminated by
Employee without "Good Reason" (as defined in the Label Employment Agreement),
then Employee's employment with Company shall be deemed to have been terminated
by Employee other than pursuant to Sections 8(d) or 8(e) above.

        (g) If Employee's employment is terminated pursuant to this Section 8,
Employee shall be entitled to, and Company's obligation hereunder shall be
limited to, (i) the payment of any unpaid compensation accrued under Section
6(a) above through the effective date of such termination; (ii) any unreimbursed
expenses incurred, and other accrued employee benefits (as described above)
accrued, through the date of termination; and (iii) the additional compensation
provided in Section 8(h) below, if any.

        (h) If Employee's employment is terminated (or deemed terminated in
accordance with Section 8(f) above):

            (i) by Company pursuant to Section 8(a) above, Employee will receive
the benefit of any Company disability plans; or

            (ii) (A) by Company other than pursuant to Sections 8(a), 8(b) or
8(c) above, (B) by Employee pursuant to Section 8(d) above, or (C) deemed
terminated as set forth in

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clause (B) above in accordance with Section 8(f)(iii) above, Company shall pay
Employee a lump sum in an amount equal to the aggregate amount of Employee's
base salary payable at the annualized level being paid to Employee pursuant to
Section 6 above at the time of such termination, less required withholdings,
during the Payment Period specified below. As used herein, the "Payment Period"
shall mean (I) fifty percent (50%) of the remainder of the scheduled Term if
such termination occurs during the first three (3) years of the Term, (II)
twelve (12) consecutive months after the effective date of such termination if
such termination occurs during the fourth (4th) year of the Term, or (III) the
full remainder of the scheduled Term if such termination occurs during the fifth
(5th) year of the Term. Employee shall have no duty of mitigation and shall not
be subject to any right of offset with respect to any other compensation
received by Employee during the Payment Period. If, pursuant to Section 8(f)(ii)
above, Employee's employment shall be deemed to have been terminated by Employee
with Justification pursuant to Section 8(e) above, then the terms of this
Section 8(h)(ii) shall apply to such termination; provided, however, that the
Payment Period shall be reduced by fifty percent (50%). The parties hereto agree
that the payment set forth in this Section 8(h)(ii) constitutes fair
compensation and the sole remedy for damages for any termination addressed in
this Section 8(h)(ii).

        (i) Nothing in this Agreement shall be deemed a release or waiver of
right to any medical or other employee benefits available to Employee on or
after the effective date of termination of the executive's employment by Company
under any federal, state or local law that provides for the continuation of any
medical or other employee benefits after employment.

        (j) (i) In the event of a dispute between Employee and Company as to
whether any termination of Employee's employment constituted a termination by
Company for Cause, a termination by Employee for Good Reason, or a termination
by Employee with Justification, and, consequently, as to whether any payment is
due to Employee pursuant to Section 8(h)(ii) above and/or which provisions of
Section 10 below shall be applicable (an "Arbitrable Dispute"), then solely as
to such Arbitrable Dispute (and not as to any other disputes under this
Agreement, as such other disputes shall be settled in accordance with Section 14
below), the Arbitrable Dispute shall be settled exclusively by arbitration,
before a single arbitrator, in accordance with this Section 8(j) and the then
most applicable rules of the American Arbitration Association for employment
dispute resolution. Judgment upon any award rendered by the arbitrator may be
entered by any state or federal court having jurisdiction thereof. Such
arbitration shall be decided within ninety (90) days of the filing of a petition
to arbitration. Such arbitration shall be administered by the American
Arbitration Association and shall be the exclusive remedy for determining any
Arbitrable Dispute (as opposed to any other disputes between the parties
hereto). If a party desires to submit an Arbitrable Dispute to arbitration
pursuant to this Section 8(j) when the arbitration proceeding set forth in
Section 7(h) of the Label Employment Agreement already is in effect, such
Arbitrable Dispute shall be determined in the same arbitration proceeding as
that which is already so in effect.

            (ii) If the parties are unable to agree upon an arbitrator, the
parties shall select a single arbitrator from a list of fifteen arbitrators
drawn by the parties at random from the "Independent" (or "Gold Card") list of
retired judges or, at Employee's option, from a list of fifteen persons (which
shall be retired judges or litigation attorneys experienced in labor matters)
provided by the American Arbitration Association. If the parties are unable to
agree upon an arbitrator from the list so drawn, then the parties shall each
strike names alternately from the list, with the first to strike being
determined by lot. After each party has used seven strikes, the remaining name
on the list shall be the arbitrator. If such person is unable to serve for any
reason, the parties shall repeat this process until an arbitrator is selected.

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            (iii) In the event of an Arbitrable Dispute, the parties shall be
entitled to reasonable discovery subject to the discretion of the arbitrator.
The remedial authority of the arbitrator shall be the same as, but no greater
than, would be the remedial power of a court having jurisdiction over the
parties in respect of the specific Arbitrable Dispute, and shall be expressly
limited to such Arbitrable Dispute and shall not extend to any other matters or
disputes. The arbitrator shall, upon an appropriate motion, dismiss any claim
without an evidentiary hearing if the party bringing the motion establishes that
he or it would be entitled to summary judgment if the matter had been pursued in
court litigation. In the event of a conflict between the applicable rules of the
American Arbitration Association and these procedures, the provisions of these
procedures shall govern.

            (iv) Unless mutually agreed by the parties otherwise, any such
arbitration shall take place in the City of Los Angeles, California. Any filing
or administrative fees related to such arbitration initially shall be borne by
the party requesting arbitration, and the parties shall bear equally the cost of
the arbitrator's compensation; provided, however, that the arbitrator shall be
entitled to award the prevailing party in such arbitration all of such party's
filing or administrative fees related to such arbitration, as well as require
the nonprevailing party to bear the entire cost of the arbitrator's
compensation. Each party hereto shall be responsible all of its own attorneys'
fees and costs related to such dispute and arbitration proceedings.

9.      Rights to Works. In return for the consideration  described herein,
Employee agrees as follows:

        (a) All inventions, trade secrets, ideas, recordings, original works of
authorship or other work product of any kind that Employee conceives, develops,
discovers or makes in whole or in part pursuant to this Agreement or in the
scope of Employee's employment hereunder and Employee's contributions thereto
(hereinafter referred to as "Works") shall belong solely and exclusively to
Company. Company shall have the perpetual and exclusive right to use, exhibit,
distribute, or license throughout the universe, any Work or part thereof in
which Employee's services for Company are utilized by all forms of audio,
visual, textual, digital, electronic or other distribution that are now known or
may hereafter exist, and otherwise exploit such Works in such media, forums and
for such uses throughout the universe as it deems appropriate; provided,
however, that no likeness of Employee shall be used during or after the Term
without Employee's written consent and no quote of Employee shall be attributed
to Employee during or after the Term without Employee's written consent. All
revenues derived by Company from the use, exhibition, distribution, licensing,
or other exploitation of such Works shall be the sole and exclusive property of
Company.

        (b) To the extent that the Works are considered: (i) contributions to
collective works and/or (ii) as parts or components of audiovisual works, the
parties hereby expressly agree that the Works shall be considered "works made
for hire" under the United States Copyright Act of 1976, as amended (17 U.S.C.
Section 101 et seq.). In accordance therewith, the sole right of copyright in
and to the Works shall belong exclusively to Company in perpetuity. To the
extent that the Works are deemed works other than contributions to collective
works and/or parts or components of audiovisual works, Employee hereby
irrevocably assigns and transfers to Company to the maximum extent permitted by
law all right, title and interest in the Works, including but not limited to all
copyrights, patents, trade secret rights, and other proprietary rights in or
relating to the Works. At Company's reasonable written request and sole expense,
Employee shall execute, verify, acknowledge, deliver and file any and all formal
assignments, recordations and any and all other documents that Company may
prepare and reasonably call for to give effect to the provisions of this
Agreement. If Employee fails to execute any such

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document or instrument, or perform any such act, within ten (10) business days,
Employee shall be deemed to have irrevocably constituted and appointed Company,
with full power of substitution, to be Employee's true and lawful attorney, in
Employee's name, place, and stead, solely to execute, acknowledge, swear to, and
file all instruments, conveyances, certificates, agreements, and other
documents, and to take any action which may be necessary or appropriate to
effect the provisions of this Section 9. The powers of attorney granted herein
shall be deemed to be coupled with an interest and shall be irrevocable.

        (c) It is understood that the rights granted to Company in this Section
9 shall continue in effect after the termination or expiration of this Agreement
to the extent necessary for Company's full enjoyment of such rights.

        (d) All provisions of this Agreement relating to the assignment by
Employee of any invention or innovation are subject to the provisions of
California Labor Code Sections 2870, 2871 and 2872. In accordance with Section
2870 of the California Labor Code, the obligation to assign as provided in this
Agreement does not apply to an invention or innovation that Employee developed
entirely on his own time without using Company's equipment, supplies,
facilities, or trade secret information except for those inventions that either:
(i) relate to either (A) the business of Company or any of its Subsidiaries at
the time of conception or reduction to practice of the invention, or (B) actual
or demonstrably anticipated research or development of Company or any of its
Subsidiaries; or (ii) result from any work performed by Employee for Company or
any of its Subsidiaries. A copy of California Labor Code Sections 2870, 2871 and
2872 is attached to this Agreement as Exhibit 4.

        (e) Employee shall disclose all inventions and innovations to Company
that reasonably could be anticipated to be owned by or required to be assigned
to Company hereunder.

        (f) Notwithstanding the foregoing provisions of this Section 9, this
Section 9 shall not apply to Works relating to the Label's business and affairs,
as such Works are addressed in the Label Employment Agreement.

10.     Restrictions.  In recognition of the consideration  described herein,
Employee agrees that:

        (a) Without limiting the generality of Section 2(a) above, and except as
set forth in Section 2(b) above, Employee shall not engage or be financially
interested, directly or indirectly, at any time prior to the "Noncompetition
Expiration Date," in any activity directly competitive with any business then
carried on by, or anticipated to be carried on by, Company or any of its
Subsidiaries (excluding the Label, as a corresponding commitment appears in the
Label Employment Agreement). Notwithstanding the foregoing, Employee may acquire
or hold, solely for investment, publicly traded securities of any corporation,
so long as such securities, in the aggregate, constitute less than five percent
(5%) of any class or series of outstanding securities of such corporation. As
used in this Section 10, "Noncompetition Expiration Date" shall mean:

            (i) If Employee's employment is terminated by Company pursuant to
Section 8(a) or 8(c) above (or deemed so terminated in accordance with Section
8(f) above), then the actual date of termination of Employee's employment with
Company;

            (ii) If Employee's employment is terminated (A) by Company pursuant
to Section 8(b) above (B) by Employee other than pursuant to Sections 8(d) or
8(e) above, or (C) deemed terminated as set forth in clauses (A) or (B) above in
accordance with Section 8(f)

                                       8
<PAGE>   9

above, then the later of the actual date of such termination or the date upon
which the Term is scheduled to expire; or

            (iii) If Employee's employment is terminated (A) by Company other
than pursuant to Sections 8(a), 8(b) or 8(c) above, (B) by Employee pursuant to
Sections 8(d) or 8(e) above, or (C) deemed terminated as set forth in clauses
(A) or (B) above in accordance with Section 8(f) above, then the actual date of
such termination.

        (b) During the term of Employee's employment and at all times
thereafter, Employee shall hold in secrecy all trade secrets and confidential
information relating to Company's (and its Subsidiaries') business and affairs
that come to his knowledge while employed by Company (excluding information that
is or becomes publicly known or available for use through no fault of Employee),
including but not limited to: (i) matters of a business nature related to
Company or any Subsidiary, such as information about costs, profits, markets,
sales, lists of customers, lists of clients and other information of a similar
nature, (ii) plans or strategies for development of the business of Company or
any Subsidiary and (iii) matters of a technical nature related to Company or any
Subsidiary. Except as required in the performance of Employee's duties to
Company under this Agreement, Employee shall not use for his own benefit or
disclose to any person (except to his attorneys and financial advisors and as
required by law or legal process, provided Employee shall undertake to give
Company notice prior to such disclosure and shall comply with any applicable
protective order or equivalent), directly or indirectly, such matters unless
such use or disclosure has been specifically authorized in writing by Company in
advance. Employee shall advise his attorneys and financial advisors that such
trade secrets and confidential information are confidential and that by
receiving such trade secrets and confidential information such attorneys and
financial advisors are agreeing to be bound by this Section 10(b). Employee
agrees to be responsible for any breach of this Section 10(b) by his attorneys
or financial advisors. Notwithstanding the foregoing provisions of this Section
10(b), this Section 10(b) shall not apply to trade secrets and confidential
information relating to the Label's business and affairs, as such matters are
addressed in the Label Employment Agreement.

        (c) Employee shall not, directly or indirectly, hire, offer to hire,
entice away, or in any other manner persuade or attempt to persuade any officer,
employee (other than Employee's personal assistant(s)), agent, representative,
customer, client, performer or songwriter of Company or any Subsidiary, to
discontinue his or her relationship with Company or any Subsidiary, until the
"Nonsolicitation Expiration Date," which shall mean the date one (1) year
following the date upon which the Term is scheduled to expire, unless Employee's
employment is terminated (i) by Company other than pursuant to Sections 8(a),
8(b) or 8(c) above, (ii) by Employee pursuant to Sections 8(d) or 8(e) above, or
(iii) deemed terminated as set forth in clauses (i) or (ii) above in accordance
with Section 8(f) above, in each of which cases it shall mean the date one (1)
year following the actual date of such termination. Notwithstanding the
foregoing provisions of this Section 10(c), this Section 10(c) shall not apply
to hiring, offering to hire, enticing away, or in any other manner persuading or
attempting to persuade any officer, employee (other than Employee's personal
assistant(s)), agent, representative, customer, client, performer or songwriter
of the Label, to discontinue his or her relationship with the Label, as such
matters are addressed in the Label Employment Agreement.

11.     Employee's Representations. Employee hereby represents and warrants
that: (a) he has the right to enter into this Agreement and to grant the rights
granted by him herein, (b) the provisions of this Agreement do not violate any
other contracts or agreements to which he is a party and that would adversely
affect his ability to perform his obligations hereunder, (c) he will

                                       9
<PAGE>   10

comply in all material respects with all policies of Company of which he has
written notice, provided they are consistent with applicable laws and (d) this
Agreement is enforceable against Employee in accordance with its terms, except
(i) as such enforceability may be limited by or subject to any bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally, (ii) as such obligations are subject to general
principles of equity and (iii) as rights to indemnity may be limited by federal,
state or local securities laws or by public policy. Without limiting the
generality of the foregoing, Employee specifically represents and warrants that
no term or condition under any contract or agreement related to Employee's past
employment with Universal Music Group or the termination thereof shall in any
way reduce or restrict Employee's ability to execute and perform this Agreement.

12.     Assistance with Litigation. Employee agrees that for five years
following termination of his employment with Company, Employee shall make
himself reasonably available to Company to assist Company with litigation based
on fact or circumstance that arose during his employment. Employee further
agrees to cooperate reasonably with Company in any such litigation. Company
agrees to compensate Employee at a reasonable rate for his time, except time
spent in depositions or trial. Company further agrees to reimburse Employee such
reasonable and necessary out-of-pocket expenses incurred by Employee in
providing such assistance, in accordance with the principles set forth in
Section 7(c) above.

13.     Company's Representations. Company hereby represents and warrants that,
subject to the satisfaction of the conditions set forth in the Side Letter: (a)
it has the right, power and authority to enter into this Agreement and to incur
the obligations incurred by it herein, (b) this Agreement has been duly and
validly authorized by Company and is enforceable against Company in accordance
with its terms, except (i) as such enforceability may be limited by or subject
to any bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally, (ii) as such obligations are subject to
general principles of equity and (iii) as rights to indemnity may be limited by
federal, state or local securities laws or by public policy, and (c) the
provisions of this Agreement do not violate any other contracts or agreements to
which it is a party that would adversely affect its ability to perform its
obligations hereunder.

14.     Governing Law.

        (a) This Agreement shall be governed by and construed and enforced in
accordance with the internal substantive laws (and not the laws of choice of
laws) of the State of California.

        (b) Subject to Section 8(j) above, each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
exclusive jurisdiction of any California state court or federal court of the
United States of America sitting in the Central District of the State of
California, situated in Los Angeles County, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
California state court or, to the extent permitted by law, in such federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.

        (c) Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in

                                       10
<PAGE>   11

any California state court or federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

15.     Exhibits. All exhibits to this Agreement are incorporated herein in
their entirety.

16.     Entire  Agreement. This Agreement and the Side Letter  constitute the
whole agreement of the parties hereto in reference to any employment of Employee
by Company and in reference to the subject matter hereof, and all prior
agreements, promises, representations and understandings relative thereto are
merged herein.

17.     Assignability. The services to be performed by Employee hereunder are
personal in nature and, accordingly, Employee may not, without the prior express
written consent of Company in each instance, assign or transfer this Agreement
or any rights or obligations hereunder. Company may not assign or transfer this
Agreement or any rights or obligations hereunder. For purposes of this
Agreement, a "Change in Control," meaning a sale of all or substantially all of
the assets of Company, or any transaction or series of related transactions
(including without limitation, any merger, reorganization, consolidation or
purchase of outstanding equity interests) resulting in the transfer of 50% or
more of the outstanding voting securities of Company, shall not be considered an
assignment. For the avoidance of doubt, however, the provisions of Section 8(d)
above shall continue to apply following a Change in Control. Nothing expressed
or implied herein is intended or shall be construed to confer upon or give to
any person, other than the parties hereto, any right, remedy or claim under or
by reason of this Agreement or of any term, covenant or condition hereof.

18.     Remedies. Any material breach or violation by Employee of the terms of
Sections 3, 9, or 10 above, would result in immediate and irreparable injury and
harm to Company, and would cause damage to Company in amounts difficult to
ascertain and for which Company's remedies and defenses at law would be
inadequate. Accordingly, (a) in the event of any breach or threatened breach of
Section 10(a) above, Company shall be entitled to seek the remedy of injunction,
as well as all other remedies to which Company may be entitled, at law, in
equity or otherwise and (b) in the event of any such breach or threatened breach
of the aforementioned Sections other than Section 10(a) above, Company shall be
entitled to, and Employee hereby consents to, the remedy of injunction, as well
as all other remedies to which Company may be entitled, at law, in equity or
otherwise. The preceding sentence shall not be construed to prevent Employee
from disputing the factual basis of any remedies or defenses asserted by
Company.

19.     Covenants Reasonable as to Time and Territory. Employee and Company have
considered carefully the nature and extent of the restrictions set forth in this
Agreement and the rights and remedies conferred upon Company under this
Agreement, and hereby acknowledge and agree that: (i) such restrictions are
reasonable in time and territory; and (ii) the consideration provided and to be
provided to Employee is sufficient to compensate Employee for such restrictions.

20.     Amendments; Waivers. This Agreement may be amended, modified,
superseded, canceled, renewed or extended and the terms or covenants hereof may
be waived only by a written instrument executed by the parties hereto or, in the
case of a waiver, by the party waiving compliance. The failure of any party at
any time or times to require performance of any provision hereof shall in no
manner affect the right at a later time to enforce the same. No waiver by any
party of the breach of any term or provision contained in this Agreement,
whether by conduct or otherwise, in any one or more instances, shall be deemed
to be, or construed as,

                                       11
<PAGE>   12

a further or continuing waiver of any such breach, or a waiver of the breach of
any other term or covenant contained in this Agreement.

21. Notices. All notices, consents, requests and other communications hereunder
shall be in writing and, if given by personal delivery, shall be deemed to have
been validly served, given or delivered upon actual delivery and, if mailed or
delivered by overnight courier, shall be deemed to have been validly served,
given or delivered when deposited in the United States mail, as registered or
certified mail, with proper postage prepaid, or when deposited with the courier
service (provided the courier service obtains a signature acknowledging
receipt), and addressed to the party or parties to be notified, at the following
addresses (or such other addresses) as a party may designate for itself by like
notice:

        If to Employee:      Frederick W. Field
                             c/o Radar Pictures
                             10900 Wilshire Boulevard, Suite 1400
                             Los Angeles, CA 90024

        With a copy to:      Ziffren, Brittenham, Branca & Fischer
                             1801 Century Park West
                             Los Angeles, CA 90067-6406
                             Attention: Skip M. Brittenham, Esq. or
                                        Gary Stiffelman, Esq.

        If to Company:       ARTISTdirect, Inc.
                             5670 Wilshire Blvd, Suite 200
                             Los Angeles, CA 90036
                             Attention: Marc P. Geiger

        With copies to:      VP of Business and Legal Affairs

                             and

                             Lenard & Gonzalez LLP
                             1801 Century Park West
                             Sixth Floor
                             Los Angeles, CA 90067
                             Attention: Allen D. Lenard, Esq.

22.     Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability without invalidating
or affecting the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent that a
restrictive covenant contained herein may, at any time, be more restrictive than
permitted under the laws of any jurisdiction where this Agreement may be subject
to review and interpretation, the terms of such restrictive covenant shall be
those allowed by law and the covenant shall be deemed to have been revised
accordingly. Each and every term of this Agreement shall be enforced to the
fullest extent permitted by law.

23.     Section Headings. The Section headings herein are used solely for
convenience and shall not be used in the interpretation or construction of this
Agreement.

                                       12
<PAGE>   13

24.     No Drafting Presumption. In interpreting the provisions of this
Agreement, no presumption shall apply against any party that otherwise would
operate against such party by reason of such document having been drafted by
such party or at the direction of such party.

25.     Counterparts: Facsimile. This Agreement may be executed in two
counterparts and by facsimile, each of which shall be deemed an original and
both of which together shall be deemed one Agreement.

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

"EMPLOYEE"                                   "COMPANY"

/s/ FREDERICK W. FIELD                       ARTISTdirect, Inc.
----------------------------------
    Frederick W. Field                       By:  /s/ MARC GEIGER
                                                 ------------------------------
                                                      Marc Geiger

                                                 Its: Chief Executive Officer

                                       13
<PAGE>   14

                                    EXHIBIT 1

               Option to Acquire 3,023,700 Shares of Common Stock

<PAGE>   15

                               ARTISTDIRECT, INC.
                         NOTICE OF GRANT OF STOCK OPTION

               Notice is hereby given of the following option grant (the
"Option") to purchase shares of the Common Stock of ARTISTdirect, Inc. (the
"Corporation"):

               Optionee: Frederick W. Field

               Grant Date: May 31, 2001

               Vesting Commencement Date: The date Optionee commences Service as
                                          CEO of the Corporation.

               Exercise Price: $0.75 per share

               Number of Option Shares: 3,023,700 shares

               Expiration Date: May 30, 2008

               Type of Option:       Incentive Stock Option
                               -----
                                 X   Non-Statutory Stock Option
                               -----

               Date Exercisable: Immediately Exercisable

               Vesting Schedule: Although the Option is immediately exercisable,
the Option Shares shall initially be unvested and subject to repurchase by the
Corporation at the Exercise Price paid per share. Optionee shall acquire a
vested interest in, and the Corporation's repurchase right shall accordingly
lapse with respect to, the Option Shares in a series of sixty (60) successive
equal monthly installments upon Optionee's completion of each month of Service
over the sixty (60)-month period measured from the Vesting Commencement Date.
Notwithstanding the foregoing, the Option Shares are also subject to accelerated
vesting as specifically provided for in the attached Stock Option Agreement and
Stock Purchase Agreement. Except as set forth in Section 6(e) of the Stock
Option Agreement attached hereto as Exhibit A or in Section D.6(ii) of the Stock
Purchase Agreement attached hereto as Exhibit B, in no other event shall any
additional Option Shares vest after Optionee's cessation of Service.

               REPURCHASE RIGHTS. OPTIONEE HEREBY AGREES THAT ALL OPTION SHARES
ACQUIRED UPON THE EXERCISE OF THE OPTION SHALL BE SUBJECT TO CERTAIN REPURCHASE
RIGHTS EXERCISABLE BY THE CORPORATION AND ITS ASSIGNS. THE TERMS OF SUCH RIGHTS
ARE SPECIFIED IN THE ATTACHED STOCK PURCHASE AGREEMENT.

               Optionee hereby agrees to be bound by all the terms and
conditions of the Option as set forth in the Stock Option Agreement and Stock
Purchase Agreement attached hereto as Exhibits A and B respectively.

<PAGE>   16

               All capitalized terms in this Notice shall have the meaning
assigned to them in this Notice or in the attached Stock Option Agreement or
Stock Purchase Agreement.

DATED: MAY 31, 2001

                                       ARTISTDIRECT, INC.

                                       By: /s/ MARC GEIGER
                                           -------------------------------------

                                       Title: Chief Executive Officer
                                              ----------------------------------

                                       By:   /s/ FREDERICK W. FIELD
                                           -------------------------------------
                                       OPTIONEE: FREDERICK W. FIELD

                                       Address:  c/o Radar Pictures, Inc.
                                                 10900 Wilshire Blvd.,
                                                 Suite 1400
                                                 Los Angeles, CA 90024

ATTACHMENTS:
EXHIBIT A - STOCK OPTION AGREEMENT
EXHIBIT B - STOCK PURCHASE AGREEMENT
EXHIBIT C - PROSPECTUS FOR STOCK OPTION GRANT

<PAGE>   17

                                    EXHIBIT A

                             STOCK OPTION AGREEMENT

<PAGE>   18

                               ARTISTDIRECT, INC.

                      NON-QUALIFIED STOCK OPTION AGREEMENT

RECITALS

               A.     The Board and the shareholders have approved a stock
option grant to Optionee in order to attract and retain Optionee to serve the
Corporation in the capacity of Chairman and Chief Executive Officer.

               B.     The option evidenced by this Agreement is granted to
Optionee in consideration of the services Optionee is to render the Corporation
and not for any capital-raising purposes or in connection with any
capital-raising activities.

               C.     The granted option is intended to be a Non-Qualified
Option which does NOT satisfy the requirements of Section 422 of the Code.

               D.     All capitalized terms in this Agreement shall have the
meaning assigned to them in the attached Appendix.

               NOW, THEREFORE, it is hereby agreed as follows:

               1.     GRANT OF OPTION. The Corporation hereby grants to
Optionee, as of the Grant Date, an Option to purchase up to the number of Option
Shares specified in the Grant Notice attached hereto. The Option Shares shall be
purchasable from time to time during the Option term specified in Paragraph 2 at
the Exercise Price.

               2.     OPTION TERM. This Option shall have a term of seven (7)
years measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.

               3.     LIMITED TRANSFERABILITY. This Option shall be neither
transferable nor assignable by Optionee other than by will or by the laws of
descent and distribution following Optionee's death and may be exercised, during
Optionee's lifetime, only by Optionee or as otherwise provided herein. However,
this Option may, in connection with the Optionee's estate plan, be assigned in
whole or in part during Optionee's lifetime to one or more members of the
Optionee's immediate family or to a trust established for the exclusive benefit
of one or more such family members. The assigned portion shall be exercisable
only by the person or persons who acquire a proprietary interest in the Option
pursuant to such assignment or as set forth herein. The terms applicable to the
assigned portion shall be the same as those in effect for this Option
immediately prior to such assignment and shall be set forth in such documents
issued to the assignee as the Board may deem appropriate.

               4.     DATES OF EXERCISE. The Option shall become exercisable for
the Option Shares as specified in the Grant Notice.

                                       1
<PAGE>   19

               5.     CESSATION OF SERVICE. The Option term specified in
Paragraph 2 shall terminate (and this Option shall cease to be outstanding)
prior to the Expiration Date in accordance with the following provisions:

                      (i)    Should Optionee cease Service by reason of an
                             Involuntary Termination, then Optionee's right to
                             exercise this Option shall lapse, and this Option
                             shall cease to be outstanding, upon the later of
                             (a) the expiration of the twelve (12) month period
                             measured from the date of Optionee's cessation of
                             Service or (b) the expiration of Optionee's initial
                             five-year employment term as set forth in the
                             Employment Agreement. In no event shall this Option
                             be exercisable at any time after the Expiration
                             Date.

                      (ii)   Should Optionee cease Service by reason of
                             Justification, then Optionee's right to exercise
                             this Option shall lapse, and this Option shall
                             cease to be outstanding, upon the earlier of (a)
                             the expiration of the twelve (12) month period
                             measured from the date of Optionee's cessation of
                             Service or (b) the expiration of Optionee's initial
                             five-year employment term as set forth in the
                             Employment Agreement. In no event shall this Option
                             be exercisable at any time after the Expiration
                             Date.

                      (iii)  Should Optionee cease Service for any reason other
                             than (a) an Involuntary Termination, (b) a
                             termination for Cause, (c) Optionee's death or
                             Permanent Disability or (d) Justification, then
                             Optionee's right to exercise this Option shall
                             lapse and this Option cease to be outstanding, upon
                             the earlier of (x) the expiration of the ninety
                             (90) day period measured from the date of
                             Optionee's cessation of Service or (y) the
                             Expiration Date.

                      (iv)   Should Optionee's Service be terminated for Cause,
                             then this Option shall immediately terminate and
                             cease to be outstanding.

                      (v)    Should Optionee cease Service by reason of his
                             death, then the personal representative of
                             Optionee's estate or the person or persons to whom
                             the Option is transferred pursuant to Optionee's
                             will or in accordance with the laws of descent and
                             distribution or, if the Option has been transferred
                             to

                                       2
<PAGE>   20

                             a trust in accordance with the terms herein, the
                             trustee of such trust, shall have the right to
                             exercise this Option. Such right shall lapse, and
                             this Option shall cease to be outstanding, upon the
                             earlier of (a) the expiration of the twelve (12)
                             month period measured from the date of Optionee's
                             death or (b) the Expiration Date.

                      (vi)   Should Optionee cease Service by reason of
                             Permanent Disability while this Option is
                             outstanding, then Optionee's right to exercise this
                             Option shall lapse, and this Option shall cease to
                             be outstanding, upon the later of (a) the
                             expiration of the twelve (12) month period measured
                             from the date of Optionee's cessation of Service or
                             (b) the expiration of Optionee's initial five-year
                             employment term as set forth in the Employment
                             Agreement. In no event shall this Option be
                             exercisable at any time after the Expiration Date.
                             In the event that such Permanent Disability
                             prevents Optionee from personally exercising this
                             Option, this Option may be exercised by Optionee's
                             personal authorized representative to the same
                             extent that Optionee could otherwise exercise this
                             Option.

                      (vii)  During the applicable post-Service exercise period,
                             this Option may not be exercised in the aggregate
                             for more than the number of Option Shares in which
                             the Optionee has acquired a vested interest in at
                             the time of Optionee's cessation of Service. Upon
                             the expiration of such exercise period or (if
                             earlier) upon the Expiration Date, this Option
                             shall terminate and cease to be outstanding for any
                             exercisable Option Shares for which the Option has
                             not otherwise been exercised.

               6.     CORPORATE TRANSACTION AND ACCELERATED VESTING OF OPTION
SHARES.

                      (a)    In the event of any Corporate Transaction, the
Option Shares at the time subject to this Option but not otherwise vested shall
automatically vest in full so that this Option shall, immediately prior to the
effective date of the Corporate Transaction, become exercisable for all of the
Option Shares as fully-vested shares and may be exercised for any or all of
those Option Shares as vested shares. The Corporation shall provide Optionee
with a minimum of ten days prior written notice of any Corporate Transaction.

                                       3
<PAGE>   21

                      (b)    Immediately following the Corporate Transaction,
this Option shall terminate and cease to be outstanding, except to the extent
assumed by the successor corporation (or Parent thereof) in connection with the
Corporate Transaction.

                      (c)    If this Option is assumed in connection with a
Corporate Transaction, then this Option shall be appropriately adjusted,
immediately after such Corporate Transaction, to apply to the number and class
of securities which would have been issuable to Optionee in consummation of such
Corporate Transaction had the Option been exercised immediately prior to such
Corporate Transaction, and appropriate adjustments shall also be made to the
Exercise Price, provided the aggregate Exercise Price shall remain the same.

                      (d)    This Agreement shall not in any way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.

                      (e)    In the event Optionee ceases Service by reason of
an Involuntary Termination, the Option Shares at the time subject to this Option
but not otherwise vested shall automatically vest in full so that this Option
shall immediately upon Optionee's cessation of Service become exercisable for
all of the Option Shares as fully-vested shares and may be exercised for any or
all of those Option Shares as vested shares.

                      (f)    In the event Optionee ceases Service by reason of a
termination for deemed Justification pursuant to Section 8(f)(ii) of the
Employment Agreement, then the Option Shares at the time subject to this Option
but not otherwise vested shall automatically vest as to one-half of such
unvested Option Shares, so that this Option shall, immediately upon Optionee's
cessation of Service, become vested for one-half of such otherwise unvested
Option Shares.

               7.     ADJUSTMENT IN OPTION SHARES. Should any change be made to
the Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the number and/or
class of securities subject to this Option and (ii) the Exercise Price in order
to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.

               8.     STOCKHOLDER RIGHTS. The holder of this Option shall not
have any stockholder rights with respect to the Option Shares until such person
shall have exercised the Option, paid the Exercise Price and become a holder of
record of the purchased shares.

               9.     MANNER OF EXERCISING OPTION.

                      (a)    In order to exercise this Option with respect to
all or any part of the Option Shares for which this Option is at the time
exercisable, Optionee (or any other person or persons exercising the Option)
must take the following actions:

                             (i)    Execute and deliver to the Corporation a
        Stock Purchase Agreement for the number of Option Shares for which the
        Option is exercised.

                                       4
<PAGE>   22

                             (ii)   Pay the aggregate Exercise Price for the
        purchased shares in one or more of the following forms:

                                    (A)    cash or check made payable to the
               Corporation;

                                    (B)    shares of Common Stock held by
               Optionee (or any other person or persons exercising the Option)
               for the requisite period necessary to avoid a charge to the
               Corporation's earnings for financial reporting purposes and
               valued at Fair Market Value on the Exercise Date; or

                                    (C)    to the extent the Option is exercised
               for vested Option Shares, through a special sale and remittance
               procedure pursuant to which Optionee (or any other person or
               persons exercising the Option) shall concurrently provide
               irrevocable instructions (a) to a Corporation-designated
               brokerage firm to effect the immediate sale of the purchased
               shares and remit to the Corporation, out of the sale proceeds
               available on the settlement date, sufficient funds to cover the
               aggregate Exercise Price payable for the purchased shares plus
               all applicable federal, state and local income and employment
               taxes required to be withheld by the Corporation by reason of
               such exercise and (b) to the Corporation to deliver the
               certificates for the purchased shares directly to such brokerage
               firm in order to complete the sale.

                      Except to the extent the sale and remittance procedure is
               utilized in connection with the Option exercise, payment of the
               Exercise Price must accompany the Stock Purchase Agreement
               delivered to the Corporation in connection with the Option
               exercise.

                             (iii)  Furnish to the Corporation appropriate
        documentation that the person or persons exercising the Option (if other
        than Optionee) have the right to exercise this Option.

                             (iv)   Execute and deliver to the Corporation such
        written representations as may be requested by the Corporation in order
        for it to comply with the applicable requirements of federal and state
        securities laws.

                             (v)    Make appropriate arrangements with the
        Corporation (or Parent or Subsidiary employing or retaining Optionee)
        for the satisfaction of all federal, state and local income and
        employment tax withholding requirements applicable to the Option
        exercise.

                      (b)    As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this Option) a certificate for the purchased Option Shares.

                      (c)    In no event may this Option be exercised for any
fractional shares.

                                       5
<PAGE>   23

               10.    REPURCHASE RIGHTS. ALL OPTION SHARES ACQUIRED UPON THE
EXERCISE OF THIS OPTION SHALL BE SUBJECT TO CERTAIN RIGHTS OF THE CORPORATION
AND ITS ASSIGNS TO REPURCHASE THOSE SHARES IN ACCORDANCE WITH THE TERMS
SPECIFIED IN THE STOCK PURCHASE AGREEMENT.

               11.    LOCK-UP. Optionee agrees that prior to the one-year
anniversary of the commencement of his employment with the Corporation, he will
not sell, make any short sale of, hedge, loan, hypothecate, pledge, grant any
option for the purchase of, or otherwise dispose or transfer for value or
otherwise agree to engage in any of the foregoing transactions with respect to
the Option Shares without the written consent of the Corporation's Board of
Directors.

               12.    COMPLIANCE WITH LAWS AND REGULATIONS. The exercise of this
Option and the issuance of the Option Shares upon such exercise shall be subject
to compliance by the Corporation and Optionee with all applicable requirements
of law relating thereto and with all applicable regulations of any stock
exchange (or the Nasdaq National Market or other national market, if applicable)
on which the Common Stock may be listed for trading at the time of such exercise
and issuance.

               13.    SUCCESSORS AND ASSIGNS. Except to the extent otherwise
provided in Paragraphs 3 and 6, the provisions of this Agreement shall inure to
the benefit of, and be binding upon, the Corporation and its successors and
assigns and Optionee, Optionee's assigns and the legal representatives, heirs
and legatees of Optionee's estate.

               14.    GOVERNING LAW. The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
California without resort to that State's conflict-of-laws rules.

               15.    NOTICES. Any notice required to be given or delivered to
the Corporation under the terms of this Agreement shall be in writing and
addressed to the Corporation at its principal corporate office. Any notice
required to be given or delivered to Optionee shall be in writing and addressed
to Optionee at the address indicated below Optionee's signature line on the
Grant Notice. All notices shall be deemed effective upon personal delivery or
upon deposit in the U.S. mail, postage prepaid and properly addressed to the
party to be notified.

                                       6
<PAGE>   24

                                    APPENDIX

               The following definitions shall be in effect under the Agreement:

               A. AGREEMENT shall mean this Stock Option Agreement.

               B. BOARD shall mean the Corporation's Board of Directors.

               C. CAUSE shall have the meaning given such term in the Employment
Agreement.

               D. CODE shall mean the Internal Revenue Code of 1986, as amended.

               E. COMMON STOCK shall mean the Corporation's common stock.

               F. CORPORATE TRANSACTION shall mean any of the following
transactions effecting a change in control or ownership of the Corporation:

                      (i)    a stockholder-approved merger or consolidation in
        which securities possessing more than fifty percent (50%) of the total
        combined voting power of the Corporation's outstanding securities are
        transferred to a person or persons different from the persons holding
        those securities immediately prior to such transaction, or

                      (ii)   a stockholder-approved sale, transfer or other
        disposition of all or substantially all of the Corporation's assets, or

                      (iii)  the acquisition, directly or indirectly by any
        person or related group of persons (other than the Corporation or a
        person that directly or indirectly controls, is controlled by, or is
        under common control with, the Corporation), of beneficial ownership
        (within the meaning of Rule 13d-3 of the Securities Exchange Act of
        1934, as amended) of securities possessing more than fifty percent (50%)
        of the total combined voting power of the Corporation's outstanding
        securities pursuant to a tender or exchange offer made directly to the
        Corporation's stockholders.

               G. CORPORATION shall mean ARTISTdirect, Inc., a Delaware
corporation.

               H. EMPLOYEE shall mean the Optionee in his capacity as an
employee of the Corporation (or any Parent or Subsidiary), subject to the
control and direction of the employer entity as to both the work to be performed
and the manner and method of performance.

               I. EMPLOYMENT AGREEMENT shall mean that certain Employment
Agreement dated as of May 31, 2001, between Optionee and the Corporation.

               J. EXERCISE DATE shall mean the date on which the Option shall
have been exercised in accordance with Paragraph 9 of the Agreement.

                                       A-1
<PAGE>   25

               K. EXERCISE PRICE shall mean the exercise price per share as
specified in the Grant Notice.

               L. EXPIRATION DATE shall mean the date on which the Option
expires as specified in the Grant Notice.

               M. FAIR MARKET VALUE per share of Common Stock on any relevant
date, for purposes of Section 9 only, shall be determined in accordance with the
following provisions:

                      (i)    If the Common Stock is at the time traded on the
        Nasdaq National Market, then the Fair Market Value shall be the average
        of the high and low selling prices per share of Common Stock on the date
        in question, as such prices are reported by the National Association of
        Securities Dealers on the Nasdaq National Market (or, if not listed on
        such market, any other national market) and published in The Wall Street
        Journal. If there are no selling prices quoted for the Common Stock on
        the date in question, then the Fair Market Value shall be the average of
        the high and low selling prices on the last preceding date for which
        such quotations exist.

                      (ii)   If the Common Stock is at the time listed on any
        Stock Exchange, then the Fair Market Value shall be the average high and
        low selling prices per share of Common Stock on the date in question on
        the Stock Exchange determined by the Compensation Committee to be the
        primary market for the Common Stock, as such prices are officially
        quoted in the composite tape of transactions on such exchange and
        published in The Wall Street Journal. If there are no selling prices
        quoted for the Common Stock on the date in question, then the Fair
        Market Value shall be the average of the high and low selling prices on
        the last preceding date for which such quotations exist.

               N. GRANT DATE shall mean the date of grant of the Option as
specified in the Grant Notice.

               O. GRANT NOTICE shall mean the Notice of Grant of Stock Option
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the Option evidenced hereby.

               P. INVOLUNTARY TERMINATION shall mean the termination of
Optionee's Service by reason of:

                      (i)    Optionee's involuntary dismissal or discharge by
        the Corporation for reasons other than (X) for Cause or (Y) by reason of
        death or Permanent Disability, or

                      (ii)   Optionee's resignation for Good Reason, as defined
        in the Employment Agreement.

               Q. JUSTIFICATION shall have the meaning given such term in the
Employment Agreement.

                                       A-2
<PAGE>   26

               R. NON-QUALIFIED OPTION shall mean an option not intended to
satisfy the requirements of Code Section 422.

               S. OPTION SHARES shall mean the number of shares of Common Stock
subject to the Option as specified in the Grant Notice.

               T. OPTION TERM shall mean the actual period of time that this
Option remains outstanding pursuant to Paragraph 2 of this Agreement.

               U. OPTIONEE shall mean the person to whom the Option is granted
as specified in the Grant Notice.

               V. PARENT shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

               W. PERMANENT DISABILITY shall mean the inability of Optionee to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which is expected to result in death
or has lasted or can be expected to last for a continuous period of twelve (12)
months or more.

               X. SERVICE shall mean the Optionee's performance of services for
the Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or an independent consultant.

               Y. STOCK EXCHANGE shall mean the American Stock Exchange or the
New York Stock Exchange.

               Z. STOCK PURCHASE AGREEMENT shall mean the written notice of the
Option exercise on the form provided by the Corporation for such purpose.

               AA. SUBSIDIARY shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in the
unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.

                                      A-3

<PAGE>   27

                                    EXHIBIT B

                            STOCK PURCHASE AGREEMENT

<PAGE>   28

                               ARTISTDIRECT, INC.

                            STOCK PURCHASE AGREEMENT

               AGREEMENT made this _____ day of ___________________, _____ by
and between ARTISTdirect, Inc., a Delaware corporation, and Frederick W. Field,
Optionee.

               All capitalized terms in this Agreement shall have the meaning
assigned to them in this Agreement or in the attached Appendix.

        A.     EXERCISE OF OPTION

               1.     EXERCISE. Optionee hereby purchases _______ shares of
Common Stock (the "Purchased Shares") pursuant to that certain option (the
"Option") granted Optionee on May __, 2001 (the "Grant Date") to purchase up to
_______________ shares of Common Stock (the "Option Shares") at the exercise
price of $0.75 per share (the "Exercise Price").

               2.     PAYMENT. Concurrently with the delivery of this Agreement
to the Corporation, Optionee shall pay the Exercise Price for the Purchased
Shares in accordance with the provisions of the Option Agreement and shall
deliver whatever additional documents may be required by the Option Agreement as
a condition for exercise.

               3.     STOCKHOLDER RIGHTS. Until such time as the Corporation
exercises the Repurchase Right, Optionee (or any successor in interest) shall
have all the rights of a stockholder (including voting, dividend and liquidation
rights) with respect to the Purchased Shares, subject, however, to the transfer
restrictions of Articles B and C.

        B.     SECURITIES LAW COMPLIANCE

               1.     RESTRICTED SECURITIES. While the Purchased Shares have
been registered under the 1933 Act, Optionee hereby confirms that Optionee has
been informed that the Purchased Shares are control securities under the 1933
Act because Optionee is an affiliate of the Corporation and accordingly, the
Purchased Shares may not be resold or transferred except in compliance with the
federal securities laws.

               2.     RESTRICTIONS ON DISPOSITION OF PURCHASED SHARES. Optionee
shall make no disposition of the Purchased Shares (other than a Permitted
Transfer) unless and until Optionee shall have complied with all requirements of
this Agreement applicable to the disposition of the Purchased Shares.

               The Corporation shall not be required (i) to transfer on its
books any Purchased Shares which have been sold or transferred in violation of
the provisions of this Agreement or (ii) to treat as the owner of the Purchased
Shares, or otherwise to accord voting, dividend or liquidation rights to, any
transferee to whom the Purchased Shares have been transferred in contravention
of this Agreement.

                                       1
<PAGE>   29

               3.     RESTRICTIVE LEGENDS. The stock certificates for the
Purchased Shares shall be endorsed with one or more of the following restrictive
legends:

                      (a)    "The shares represented by this certificate are
                             "control" securities under the Securities Act of
                             1933 because the holder is an affiliate of the
                             Corporation. The shares may not be sold or offered
                             for sale in the absence of satisfactory assurances
                             to the Corporation that such sale or offer complies
                             with all applicable federal and state securities
                             laws."

                      (b)    "The shares represented by this certificate are
                             subject to certain repurchase rights and other
                             restrictions on transfer granted to the Corporation
                             and accordingly may not be sold, assigned,
                             transferred, encumbered, or in any manner disposed
                             of except in conformity with the terms of a written
                             agreement dated ____________, ______ between the
                             Corporation and the registered holder of the shares
                             (or the predecessor in interest to the shares). A
                             copy of such agreement is maintained at the
                             Corporation's principal corporate offices."

Upon request by Optionee, the Corporation agrees to remove the legends above, in
each case, when the applicable restrictions or repurchase rights have lapsed and
are no longer, and will not in the future become, applicable.

        C.     TRANSFER RESTRICTIONS

               1.     RESTRICTION ON TRANSFER. Except for any Permitted
Transfer, Optionee shall not transfer, assign, encumber or otherwise dispose of
any of the Purchased Shares which are subject to the Repurchase Right.

               2.     TRANSFEREE OBLIGATIONS. Each person (other than the
Corporation) to whom the Purchased Shares are transferred by means of a
Permitted Transfer must, as a condition precedent to the validity of such
transfer, acknowledge in writing to the Corporation that such person is bound by
the provisions of this Agreement and that the transferred shares are subject to
the Repurchase Right to the same extent such shares would be so subject if
retained by Optionee.

               3.     LOCK-UP. Optionee agrees that prior to the one-year
anniversary of the commencement of his employment with the Corporation, he will
not sell, make any short sale of, hedge, loan, hypothecate, pledge, grant any
option for the purchase of, or otherwise dispose or transfer for value or
otherwise agree to engage in any of the foregoing transactions with respect to
the Purchased Shares without the written consent of the Corporation's Board of
Directors.

                                       2
<PAGE>   30

        D.     REPURCHASE RIGHT

               1.     GRANT. The Corporation is hereby granted the right (the
"Repurchase Right"), exercisable at any time during the sixty (60)-day period
following the date Optionee ceases for any reason to remain in Service or (if
later) during the sixty (60)-day period following the execution date of this
Agreement, to repurchase at the Exercise Price any or all of the Purchased
Shares in which Optionee is not, at the time of his cessation of Service, vested
in accordance with the Vesting Schedule applicable to those shares or the
special vesting acceleration provisions of Paragraph D.6 of this Agreement (such
shares to be hereinafter referred to as the "Unvested Shares").

               2.     EXERCISE OF THE REPURCHASE RIGHT. The Repurchase Right
shall be exercisable by written notice delivered to each Owner of the Unvested
Shares prior to the expiration of the sixty (60)-day exercise period. The notice
shall indicate the number of Unvested Shares to be repurchased and the date on
which the repurchase is to be effected, such date to be not more than thirty
(30) days after the date of such notice. The certificates representing the
Unvested Shares to be repurchased shall be delivered to the Corporation on the
closing date specified for the repurchase. Concurrently with the receipt of such
stock certificates, the Corporation shall pay to Owner, in cash, an amount equal
to the Exercise Price previously paid for the Unvested Shares which are to be
repurchased from Owner. Notwithstanding the foregoing, in the event such stock
certificates are not delivered to the Corporation at the time the Exercise Price
is so paid, such Unvested Shares shall nonetheless be deemed cancelled as of the
time of such payment and the Corporation may take such action is as necessary,
including the imposition of stop transfer orders, with respect to such shares.
The Corporation's right to exercise the Repurchase Right shall be conditioned on
the Corporation having taken all corporate action required to be taken to exempt
such repurchase from the provisions of Section 16(b) of the Securities Exchange
Act of 1934, as amended, pursuant to Rule 16b-3(e), or successor rule,
thereunder, and providing the Owner with satisfactory written evidence thereof
with its notice of exercise.

               3.     TERMINATION OF THE REPURCHASE RIGHT. The Repurchase Right
shall terminate with respect to any Unvested Shares for which it is not timely
exercised under Paragraph D.2. In addition, the Repurchase Right shall terminate
and cease to be exercisable with respect to any and all Purchased Shares in
which Optionee vests in accordance with the Vesting Schedule. All Purchased
Shares as to which the Repurchase Right lapses shall, however, remain subject to
any Lock-up restrictions set forth in section C.3 hereof.

               4.     AGGREGATE VESTING LIMITATION. If the Option is exercised
in more than one increment so that Optionee is a party to one or more other
Stock Purchase Agreements (the "Prior Purchase Agreements") which are executed
prior to the date of this Agreement, then the total number of Purchased Shares
as to which Optionee shall be deemed to have a fully-vested interest under this
Agreement and all Prior Purchase Agreements shall not exceed in the aggregate
the number of Purchased Shares in which Optionee would otherwise at the time be
vested, in accordance with the Vesting Schedule, had all the Purchased Shares
(including those acquired under the Prior Purchase Agreements) been acquired
exclusively under this Agreement.

                                       3
<PAGE>   31

               5.     RECAPITALIZATION. Any new, substituted or additional
securities or other property (including cash paid other than as a regular cash
dividend) which is by reason of any Recapitalization distributed with respect to
the Purchased Shares shall be immediately subject to the Repurchase Right and
any escrow requirements hereunder, but only to the extent the Purchased Shares
are at the time covered by such right or escrow requirements. Appropriate
adjustments to reflect such distribution shall be made to the number and/or
class of Purchased Shares subject to this Agreement and to the price per share
to be paid upon the exercise of the Repurchase Right in order to reflect the
effect of any such Recapitalization upon the Corporation's capital structure;
provided, however, that the aggregate purchase price shall remain the same.

               6.     SPECIAL VESTING ACCELERATION.

                      (a)    The Repurchase Right shall automatically terminate
                             in its entirety, and all the Purchased Shares shall
                             vest in full, (i) immediately prior to the
                             consummation of any Corporate Transaction that
                             occurs prior to Optionee's cessation of Service or
                             (ii) upon the cessation of Optionee's Service as a
                             result of an Involuntary Termination.

                      (b)    The Repurchase Right shall automatically terminate
                             as to one-half of the then Unvested Shares
                             (calculated as of the time immediately prior to
                             application of this Section D.6(b)) upon any
                             termination of Optionee's employment with the
                             Corporation for deemed Justification (as defined in
                             the Employment Agreement) pursuant to Section
                             8(f)(ii) of the Employment Agreement.

        E.     SPECIAL TAX ELECTION

               The acquisition of the Purchased Shares may result in adverse tax
consequences which may be avoided or mitigated by filing an election under Code
Section 83(b). Such election must be filed within thirty (30) days after the
date of this Agreement. A description of the tax consequences applicable to the
acquisition of the Purchased Shares and the form for making the Code Section
83(b) election are set forth in Exhibit I. OPTIONEE SHOULD CONSULT WITH HIS TAX
ADVISOR TO DETERMINE THE TAX CONSEQUENCES OF ACQUIRING THE PURCHASED SHARES AND
THE ADVANTAGES AND DISADVANTAGES OF FILING THE CODE SECTION 83(b) ELECTION.
OPTIONEE ACKNOWLEDGES THAT IT IS OPTIONEE'S SOLE RESPONSIBILITY, AND NOT THE
CORPORATION'S, TO FILE A TIMELY ELECTION UNDER CODE SECTION 83(b), EVEN IF
OPTIONEE REQUESTS THE CORPORATION OR ITS REPRESENTATIVES TO MAKE THIS FILING ON
HIS BEHALF.

        F.     GENERAL PROVISIONS

               1.     ASSIGNMENT. The Corporation may assign the Repurchase
Right to any person or entity selected by the Board, including (without
limitation) one or more stockholders of the Corporation.

                                       4
<PAGE>   32

               2.     NOTICES. Any notice required to be given under this
Agreement shall be in writing and shall be deemed effective upon personal
delivery, one business day after being delivered to a reputable overnight
courier service, or upon deposit in the U.S. mail, registered or certified,
postage prepaid and properly addressed to the party entitled to such notice at
the address indicated below such party's signature line on this Agreement or at
such other address as such party may designate by ten (10) days advance written
notice under this paragraph to all other parties to this Agreement.

               3.     NO WAIVER. The failure of the Corporation in any instance
to exercise the Repurchase Right shall not constitute a waiver of any other
repurchase rights that may subsequently arise under the provisions of this
Agreement or any other agreement between the Corporation and Optionee. No waiver
of any breach or condition of this Agreement shall be deemed to be a waiver of
any other or subsequent breach or condition, whether of like or different
nature.

               4.     CANCELLATION OF SHARES. If the Corporation shall make
available, at the time and place and in the amount and form provided in this
Agreement, the consideration for the Purchased Shares to be repurchased in
accordance with the provisions of this Agreement, then from and after such time,
the person from whom such shares are to be repurchased shall no longer have any
rights as a holder of such shares (other than the right to receive payment of
such consideration in accordance with this Agreement). Such shares shall be
deemed purchased in accordance with the applicable provisions hereof, and the
Corporation shall be deemed the owner and holder of such shares, whether or not
the certificates therefor have been delivered as required by this Agreement.

        G.     MISCELLANEOUS PROVISIONS

               1.     OPTIONEE UNDERTAKING. Optionee hereby agrees to take
whatever additional action and execute whatever additional documents the
Corporation may deem necessary or advisable in order to carry out or effect one
or more of the obligations or restrictions imposed on either Optionee or the
Purchased Shares pursuant to the provisions of this Agreement.

               2.     AGREEMENT IS ENTIRE CONTRACT. This Agreement and the
Registration Side Letter constitute the entire contract between the parties
hereto with regard to the subject matter hereof.

               3.     GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California without resort
to that State's conflict-of-laws rules.

               4.     COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

                                       5
<PAGE>   33

               5.     SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall inure to the benefit of, and be binding upon, the Corporation and its
successors and assigns and upon Optionee, Optionee's permitted assigns and the
legal representatives, heirs and legatees of Optionee's estate, whether or not
any such person shall have become a party to this Agreement and have agreed in
writing to join herein and be bound by the terms hereof.

               IN WITNESS WHEREOF, the parties have executed this Agreement on
the day and year first indicated above.

                                       ARTISTDIRECT, INC.

                                       By:
                                                --------------------------------

                                       Title:
                                                --------------------------------

                                       Address:
                                                --------------------------------

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

                                       By:
                                                --------------------------------
                                                OPTIONEE: FREDERICK W. FIELD

                                       Address:
                                                --------------------------------

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

                                       6
<PAGE>   34

                             SPOUSAL ACKNOWLEDGMENT

               The undersigned spouse of Optionee has read and hereby approves
the foregoing Stock Purchase Agreement. In consideration of the Corporation's
granting Optionee the right to acquire the Purchased Shares in accordance with
the terms of such Agreement, the undersigned hereby agrees to be irrevocably
bound by all the terms of such Agreement, including (without limitation) the
right of the Corporation (or its assigns) to purchase any Purchased Shares in
which Optionee is not vested at time of his cessation of Service.

                                     By:
                                              ----------------------------------
                                              OPTIONEE'S SPOUSE

                                     Address:
                                              ----------------------------------

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

<PAGE>   35

                                    EXHIBIT I

                       FEDERAL INCOME TAX CONSEQUENCES AND
                           SECTION 83(b) TAX ELECTION

        I.     FEDERAL INCOME TAX CONSEQUENCES AND SECTION 83(B) ELECTION FOR
EXERCISE OF NON-STATUTORY OPTION. If the Purchased Shares are acquired pursuant
to the exercise of a Non-Statutory Option, as specified in the Grant Notice,
then under Code Section 83, the excess of the fair market value of the Purchased
Shares on the date any forfeiture restrictions applicable to such shares lapse
over the Exercise Price paid for those shares will be reportable as ordinary
income on the lapse date. For this purpose, the term "forfeiture restrictions"
includes the right of the Corporation to repurchase the Purchased Shares
pursuant to the Repurchase Right. However, Optionee may elect under Code Section
83(b) to be taxed at the time the Purchased Shares are acquired, rather than
when and as such Purchased Shares cease to be subject to such forfeiture
restrictions. Such election must be filed with the Internal Revenue Service
within thirty (30) days after the date of the Agreement. Even if the fair market
value of the Purchased Shares on the date of the Agreement equals the Exercise
Price paid (and thus no tax is payable), the election must be made to avoid
adverse tax consequences in the future. The form for making this election is
attached as part of this exhibit. FAILURE TO MAKE THIS FILING WITHIN THE
APPLICABLE THIRTY (30)-DAY PERIOD WILL RESULT IN THE RECOGNITION OF ORDINARY
INCOME BY OPTIONEE AS THE FORFEITURE RESTRICTIONS LAPSE.

        II.    FEDERAL INCOME TAX CONSEQUENCES AND CONDITIONAL SECTION 83(B)
ELECTION FOR EXERCISE OF INCENTIVE OPTION. If the Purchased Shares are acquired
pursuant to the exercise of an Incentive Option, as specified in the Grant
Notice, then the following tax principles shall be applicable to the Purchased
Shares:

                      (i)    For regular tax purposes, no taxable income will be
        recognized at the time the Option is exercised.

                                    The excess of (a) the fair market value of
        the Purchased Shares on the date the Option is exercised or (if later)
        on the date any forfeiture restrictions applicable to the Purchased
        Shares lapse over (b) the Exercise Price paid for the Purchased Shares
        will be includible in Optionee's taxable income for alternative minimum
        tax purposes.

                                    If Optionee makes a disqualifying
        disposition of the Purchased Shares, then Optionee will recognize
        ordinary income in the year of such disposition equal in amount to the
        excess of (a) the fair market value of the Purchased Shares on the date
        the Option is exercised or (if later) on the date any forfeiture
        restrictions applicable to the Purchased Shares lapse over (b) the
        Exercise Price paid for the Purchased Shares. Any additional gain
        recognized upon the disqualifying disposition will be either short-term
        or long-term capital gain depending upon the period for which the
        Purchased Shares are held prior to the disposition.

                                      II-1
<PAGE>   36

                                    For purposes of the foregoing, the term
                      "forfeiture restrictions" will include the right of the
                      Corporation to repurchase the Purchased Shares pursuant to
                      the Repurchase Right. The term "disqualifying disposition"
                      means any sale or other disposition(1) of the Purchased
                      Shares within two (2) years after the Grant Date or within
                      one (1) year after the exercise date of the Option.

                                    In the absence of final Treasury Regulations
                      relating to Incentive Options, it is not certain whether
                      Optionee may, in connection with the exercise of the
                      Option for any Purchased Shares at the time subject to
                      forfeiture restrictions, file a protective election under
                      Code Section 83(b) which would limit Optionee's ordinary
                      income upon a disqualifying disposition to the excess of
                      the fair market value of the Purchased Shares on the date
                      the Option is exercised over the Exercise Price paid for
                      the Purchased Shares. Accordingly, such election if
                      properly filed will only be allowed to the extent the
                      final Treasury Regulations permit such a protective
                      election.

                                    The Code Section 83(b) election will be
                      effective in limiting the Optionee's alternative minimum
                      taxable income to the excess of the fair market value of
                      the Purchased Shares at the time the Option is exercised
                      over the Exercise Price paid for those shares.

               Page 2 of the attached form for making the election should be
filed with any election made in connection with the exercise of an Incentive
Option.

--------
(1) Generally, a disposition of shares purchased under an Incentive Option
includes any transfer of legal title, including a transfer by sale, exchange or
gift, but does not include a transfer to the Optionee's spouse, a transfer into
joint ownership with right of survivorship if Optionee remains one of the joint
owners, a pledge, a transfer by bequest or inheritance or certain tax free
exchanges permitted under the Code.

                                      II-2
<PAGE>   37

                             SECTION 83(b) ELECTION

               This statement is being made under Section 83(b) of the Internal
Revenue Code, pursuant to Treas. Reg. Section 1.83-2.

    The taxpayer who performed the services is:

        Name:
        Address:
        Taxpayer Ident. No.:

    The property with respect to which the election is being made is
        _____________ shares of the common stock of ARTISTdirect, Inc.

    The property was issued on ______________, _____.

    The taxable year in which the election is being made is the calendar year
        _____.

    The property is subject to a repurchase right pursuant to which the issuer
        has the right to acquire the property at the original purchase price if
        for any reason taxpayer's service with the issuer terminates. The
        issuer's repurchase right will lapse in a series of annual and monthly
        installments over a four (4)-year period ending on ___________, 200__.

    The fair market value at the time of transfer (determined without regard to
        any restriction other than a restriction which by its terms will never
        lapse) is $__________per share.

    The amount paid for such property is $___________ per share.

    A copy of this statement was furnished to ARTISTdirect, Inc. for whom
        taxpayer rendered the services underlying the transfer of property.

    This statement is executed on _________________, ______.

______________________________          ______________________________
Spouse (if any)                         Taxpayer

This election must be filed with the Internal Revenue Service Center with which
taxpayer files his or her federal income tax returns and must be made within
thirty (30) days after the execution date of the Stock Purchase Agreement. This
filing should be made by registered or certified mail, return receipt requested.
Optionee must retain two (2) copies of the completed form for filing with his or
her federal and state tax returns for the current tax year and an additional
copy for his or her records.

<PAGE>   38

               The property described in the above Section 83(b) election is
comprised of shares of common stock acquired pursuant to the exercise of an
incentive stock option under Section 422 of the Internal Revenue Code (the
"Code"). Accordingly, it is the intent of the Taxpayer to utilize this election
to achieve the following tax results:

                      One purpose of this election is to have the alternative
minimum taxable income attributable to the purchased shares measured by the
amount by which the fair market value of such shares at the time of their
transfer to the Taxpayer exceeds the purchase price paid for the shares. In the
absence of this election, such alternative minimum taxable income would be
measured by the spread between the fair market value of the purchased shares and
the purchase price which exists on the various lapse dates in effect for the
forfeiture restrictions applicable to such shares.

                      Section 421(a)(1) of the Code expressly excludes from
income any excess of the fair market value of the purchased shares over the
amount paid for such shares. Accordingly, this election is also intended to be
effective in the event there is a "disqualifying disposition" of the shares,
within the meaning of Section 421(b) of the Code, which would otherwise render
the provisions of Section 83(a) of the Code applicable at that time.
Consequently, the Taxpayer hereby elects to have the amount of disqualifying
disposition income measured by the excess of the fair market value of the
purchased shares on the date of transfer to the Taxpayer over the amount paid
for such shares. Since Section 421(a) presently applies to the shares which are
the subject of this Section 83(b) election, no taxable income is actually
recognized for regular tax purposes at this time, and no income taxes are
payable, by the Taxpayer as a result of this election. The foregoing election is
to be effective to the full extent permitted under the Code.

THIS PAGE 2 IS TO BE ATTACHED TO ANY SECTION 83(b) ELECTION FILED IN CONNECTION
WITH THE EXERCISE OF AN INCENTIVE STOCK OPTION UNDER THE FEDERAL TAX LAWS.

                                       2
<PAGE>   39

                                    APPENDIX

               The following definitions shall be in effect under the Agreement:

        A. AGREEMENT shall mean this Stock Purchase Agreement.

        B. BOARD shall mean the Corporation's Board of Directors.

        C. CODE shall mean the Internal Revenue Code of 1986, as amended.

        D. COMMON STOCK shall mean the Corporation's common stock.

        E. CORPORATE TRANSACTION shall mean any of the following transactions
effecting a change in control or ownership of the Corporation:

                      (i)    a stockholder-approved merger or consolidation in
        which securities possessing more than fifty percent (50%) of the total
        combined voting power of the Corporation's outstanding securities are
        transferred to a person or persons different from the persons holding
        those securities immediately prior to such transaction, or

                      (ii)   a stockholder-approved sale, transfer or other
        disposition of all or substantially all of the Corporation's assets, or

                      (iii)  the acquisition, directly or indirectly by any
        person or related group of persons (other than the Corporation or a
        person that directly or indirectly controls, is controlled by, or is
        under common control with, the Corporation), of beneficial ownership
        (within the meaning of Rule 13d-3 of the Securities Exchange Act of
        1934, as amended) of securities possessing more than fifty percent (50%)
        of the total combined voting power of the Corporation's outstanding
        securities pursuant to a tender or exchange offer made directly to the
        Corporation's stockholders.

        F. CORPORATION shall mean ARTISTdirect, Inc., a Delaware corporation,
and any successor corporation to all or substantially all of the assets or
voting stock of ARTISTdirect, Inc.

        G. EMPLOYMENT AGREEMENT shall mean that certain Employment Agreement
dated as of May 31, 2001, by and between Optionee and the Corporation.

        H. EXERCISE PRICE shall have the meaning assigned to such term in
Paragraph A.1.

        I. GRANT DATE shall have the meaning assigned to such term in Paragraph
A.1.

        J. GRANT NOTICE shall mean the Notice of Grant of Stock Option pursuant
to which Optionee has been informed of the basic terms of the Option.

                                       A-1
<PAGE>   40

        K. INCENTIVE OPTION shall mean an option which satisfies the
requirements of Code Section 422.

        L. INVOLUNTARY TERMINATION shall mean the termination of Optionee's
Service by reason of:

                      (i)    Optionee's involuntary dismissal or discharge by
        the Corporation for reasons other than (X) for Cause, as defined in the
        Employment Agreement, or (Y) by reason of death or Permanent Disability,
        or

                      (ii)   Optionee's voluntary resignation for Good Reason,
        as defined in the Employment Agreement.

        M. 1933 ACT shall mean the Securities Act of 1933, as amended.

        N. NON-STATUTORY OPTION shall mean an option not intended to satisfy the
requirements of Code Section 422.

        O. OPTION shall have the meaning assigned to such term in Paragraph A.1.

        P. OPTION AGREEMENT shall mean all agreements and other documents
evidencing the Option.

        Q. OPTIONEE shall mean the person to whom the Option is granted.

        R. OWNER shall mean Optionee and all subsequent holders of the Purchased
Shares who derive their chain of ownership through a Permitted Transfer from
Optionee.

        S. PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

        T. PERMITTED TRANSFER shall mean (i) a gratuitous transfer of the
Purchased Shares, provided and only if Optionee obtains the Corporation's prior
written consent to such transfer, (ii) a transfer of title to the Purchased
Shares effected pursuant to Optionee's will or the laws of inheritance following
Optionee's death, (iii) a transfer to the Corporation in pledge as security for
any purchase-money indebtedness incurred by Optionee in connection with the
acquisition of the Purchased Shares, or (iv) a transfer of the Purchased Shares
to a trust for the sole benefit of Optionee or his immediately family.

        U. PRIOR PURCHASE AGREEMENT shall have the meaning assigned to such term
in Paragraph D.4.

        V. PURCHASED SHARES shall have the meaning assigned to such term in
Paragraph A.1.

                                       A-2
<PAGE>   41

        W. RECAPITALIZATION shall mean any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the Corporation's outstanding Common Stock as a class without the
Corporation's receipt of consideration.

        X. REPURCHASE RIGHT shall mean the right granted to the Corporation in
accordance with Article D.

        Y. REGISTRATION SIDE LETTER shall mean that certain side letter dated as
of May 31, 2001, by and between the Corporation and Optionee with respect to the
registration on Form S-8 of the Purchased Shares

        Z. SEC shall mean the Securities and Exchange Commission.

        AA. SERVICE shall mean the Optionee's performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an employee,
subject to the control and direction of the employer entity as to both the work
to be performed and the manner and method of performance, a non-employee member
of the board of directors or an independent consultant.

        BB. SUBSIDIARY shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.

        CC. VESTING SCHEDULE shall mean the vesting schedule specified in the
Grant Notice pursuant to which the Optionee is to vest in the Option Shares in a
series of installments over his or her period of Service; provided, the Option
Shares are subject to accelerated vesting pursuant to Section D.6 of the
Agreement.

        DD. UNVESTED SHARES shall have the meaning assigned to such term in
Paragraph D.1.

                                      A-3

<PAGE>   42

                                    EXHIBIT C

                        PROSPECTUS FOR STOCK OPTION GRANT

<PAGE>   43

                               ARTISTDIRECT, INC.

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

                                   PROSPECTUS

                                       FOR

                           SPECIAL STOCK OPTION GRANT

                             MR. FREDERICK W. FIELD

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

                                     The date of this Prospectus is May 31, 2001

<PAGE>   44

                                TABLE OF CONTENTS

                                                                     PAGE
                                                                     ----

INFORMATION ON STOCK OPTION GRANT.......................................1
         Introduction...................................................1
         Exercise Price.................................................1
         Changes in Capitalization......................................1
         Exercise of Option.............................................1
         Vesting of Option..............................................2
         Right of Repurchase of Common Stock............................3
         Early Termination of Option....................................3
         Special Acceleration Features..................................4
         Transferability of Unvested Shares of Common Stock.............5
         Transferability of Vested Shares of Common Stock...............5
         Limitations on Transactions Involving Common Stock.............5
         Stockholder Rights and Option Assignability....................5
         Amendment/Termination..........................................5
         Compliance with Applicable Laws................................5
         Miscellaneous..................................................6

RESTRICTIONS ON RESALE..................................................6
         Section 16.....................................................6
         Reporting Requirements.........................................7
         Rule 144.......................................................7

FEDERAL TAX CONSEQUENCES................................................7

CORPORATION INFORMATION AND ANNUAL INFORMATION.........................10

<PAGE>   45

THIS DOCUMENT CONSTITUTES PART OF THE OFFICIAL PROSPECTUS COVERING SECURITIES
THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.

                                   INFORMATION
                                       ON
                               STOCK OPTION GRANT

     ARTISTdirect, Inc., a corporation organized and existing under the laws of
the State of Delaware ("the Corporation"), is offering shares of its common
stock to Mr. Frederick W. Field pursuant to a special stock option grant (the
"Special Base Option") made to him on May 31, 2001 to induce him to serve as the
Corporation's Chief Executive Officer and Chairman of the Board.

INTRODUCTION

     The Special Base Option granted to Mr. Field was authorized by the
Corporation's Board of Directors (the "Board") and provides him with the right
to purchase up to 3,023,700 shares of the Corporation's common stock (the
"Common Stock"). The grant is intended to provide Mr. Field with a meaningful
incentive to serve as the Corporation's Chief Executive Officer and Chairman of
the Board.

     The Special Base Option is a nonstatutory stock option ("Nonstatutory
Option") not intended to satisfy the requirements of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). The federal income tax
consequences applicable to such a Nonstatutory Option are summarized in the
section below entitled "Federal Tax Consequences."

     Upon exercise of the Special Base Option, Mr. Field will receive shares of
Common Stock made available either from authorized but unissued shares of Common
Stock or from shares of Common Stock reacquired by the Corporation, including
shares repurchased on the open market.

     Unless the context indicates otherwise, all references to the Corporation
in this document include ARTISTdirect, Inc. and its parent and subsidiary
corporations, whether now existing or subsequently established.

EXERCISE PRICE

     The exercise price per share of Common Stock subject to the Special Base
Option is $0.75. The fair market value per share of Common Stock on the May 31,
2001 grant date was $0.64 per share, based on the last reported sale price on
The Nasdaq National Market.

CHANGES IN CAPITALIZATION

     Should any change be made to the outstanding Common Stock by reason of any
stock split, stock dividend, recapitalization, combination of shares, exchange
of shares or other change affecting the outstanding Common Stock as a class
without the Corporation's receipt of consideration, then appropriate adjustments
will be made to the number and/or class of securities and price per share in
effect under the Special Base Option in order to preclude the dilution or
enlargement of his rights and benefits thereunder.

EXERCISE OF OPTION

     The Special Base Option will be exercisable at any time before it
terminates. However, the shares purchased under the Special Base Option will be
subject to certain repurchase rights of the Corporation, exercisable upon the
termination of Mr. Field's employment.

     The Special Base Option may be exercised, for any or all shares for which
the option is at the time exercisable, upon delivery of a completed Stock
Purchase Agreement (which is attached to Mr. Field's Stock Option Agreement) to
the Corporation's Chief Financial Officer at the Corporation's principal
offices. The Stock Purchase

<PAGE>   46

Agreement must specify the number of shares to be purchased under the option and
must also be accompanied by payment of the applicable exercise price and
appropriate proof that the person exercising such option (if other than Mr.
Field) has the right to effect such exercise. The option will be deemed to be
exercised at the time of the Corporation's receipt of such notice and payment.

     The exercise price is payable immediately upon exercise of the option and
may be paid in cash or check payable to the Corporation or in shares of Common
Stock held for the requisite period necessary to avoid a charge to the
Corporation's reported earnings (generally a six (6)-month period) and valued at
Fair Market Value on the exercise date.

          For valuation purposes, the FAIR MARKET VALUE of the Common Stock will
     be determined as follows:

          (i) If the Common Stock is at the time traded on The Nasdaq National
     Market, then the Fair Market Value shall be the average of the high and low
     selling prices per share of Common Stock on the date in question, as such
     prices are reported by the National Association of Securities Dealers on
     The Nasdaq National Market (or, if not listed on such market, any other
     national market) and published in The Wall Street Journal. If there are no
     selling prices quoted for the Common Stock on the date in question, then
     the Fair Market Value shall be the average of the high and low selling
     prices on the last preceding date for which such quotations exist; or

          (ii) If the Common Stock is at the time listed on any stock exchange,
     then the Fair Market Value shall be the average high and low selling prices
     per share of Common Stock on the date in question on the Stock Exchange
     determined by the Corporation's Compensation Committee to be the primary
     market for the Common Stock, as such prices are officially quoted in the
     composite tape of transactions on such exchange and published in The Wall
     Street Journal. If there are no selling prices quoted for the Common Stock
     on the date in question, then the Fair Market Value shall be the average of
     the high and low selling prices on the last preceding date for which such
     quotations exist.

     To the extent the option is exercised for vested shares, cashless exercises
are also permitted. To use this procedure, Mr. Field must provide irrevocable
instructions to a Corporation-designated brokerage firm to effect the immediate
sale of the shares purchased under the option and to pay over to the
Corporation, out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate exercise price payable for the purchased
shares plus all applicable withholding taxes. Concurrently with such
instructions, Mr. Field must also direct the Corporation to deliver the
certificate for the purchased shares directly to the brokerage firm in order to
complete the sale transaction.

     The Special Base Option will have a maximum term of seven (7) years
measured from the May 31, 2001 grant date, subject to earlier termination upon
Mr. Field's cessation of service.

VESTING OF OPTION

     The shares of Common Stock purchasable under the Special Base Option are
subject to vesting provisions. This means Mr. Field must remain in the
Corporation's employ for a certain period of time before he fully owns the
shares purchased under the option. The Special Base Option will vest, and the
Corporation's repurchase right with respect to the shares subject to the option
shall lapse, in a series of sixty (60) successive equal monthly installments
upon Optionee's completion of each month of service over the sixty (60) month
period measured from the Vesting Commencement Date set forth in the Notice of
Grant pertaining to the Special Base Option. The Special Base Option is subject
to accelerated vesting under certain conditions as described below in the
"Special Acceleration Features" section below.

                                       2
<PAGE>   47

RIGHT OF REPURCHASE OF COMMON STOCK

     When Mr. Field leaves the Corporation's employ, the Corporation will have
the right to repurchase, at the original exercise price paid, any shares of
Common Stock held by Mr. Field at that time in which he has not vested. The
certificates representing the unvested shares purchased under his option will
bear a restrictive legend indicating the existence of the Corporation's
repurchase right with respect to those shares.

EARLY TERMINATION OF OPTION

     Upon his cessation of service for any reason other than death, Permanent
Disability, Cause, an Involuntary Termination or Justification, Mr. Field will
have a ninety (90) day period during which to exercise the Special Base Option
for any unexercised shares of Common Stock in which he is vested as of the date
his employment ends. In no event, however, may the Special Base Option be
exercised after the May 30, 2008 expiration date of the option term.

     The Special Base Option will immediately terminate if Mr. Field's
employment is terminated for Cause (as defined in the employment agreement dated
as of May 31, 2001 between the Corporation and Mr. Field (the "Employment
Agreement")).

     Should Mr. Field die while holding the Special Base Option, the personal
representative of his estate or the person or persons to whom the option is
transferred by the provisions of his will or the laws of inheritance following
his death may exercise the option for any or all unexercised shares of Common
Stock for which the option was vested at the time of his cessation of service
with the Corporation. The right to exercise the option will lapse upon the
earlier of (i) the May 30, 2008 expiration date of the option term or (ii) the
expiration of the twelve (12) month period measured from the date of Mr. Field's
death.

     If Mr. Field ceases service with the Corporation as a result of an
Involuntary Termination or a Permanent Disability, then he will have until the
later of (i) the expiration of the twelve (12) month period measured from his
termination date or (ii) the expiration of his initial five (5) year employment
term as set forth in his Employment Agreement, to exercise the Special Base
Option for any or all unexercised shares of Common Stock for which the option
was vested at the time of such cessation of service with the Corporation. In no
event, however, may the option be exercised after the May 30, 2008 expiration
date of the option term.

          For purposes of the Special Base Option, Mr. Field will be deemed to
     have a PERMANENT DISABILITY if he is unable to perform any substantial
     gainful activity by reason of any medically-determinable physical or mental
     impairment that is expected to result in death or has lasted or can be
     expected to last for a continuous period of twelve (12) months or more. If
     a Permanent Disability prevents Mr. Field from personally exercising the
     Special Base Option, it may be exercised by Mr. Field's personal authorized
     representative to the same extent that he could otherwise exercise the
     Special Base Option himself.

          For purposes of the Special Base Option, an INVOLUNTARY TERMINATION
     will be deemed to occur upon the termination of Mr. Field's employment with
     the Corporation by reason of:

          (i) his involuntary dismissal or discharge by the Corporation for
     reasons other than (x) for Cause (as defined in his Employment Agreement)
     or (y) by reason of death or having a Permanent Disability, or

          (ii) his resignation for Good Reason (as defined in his Employment
     Agreement).

     If Mr. Field ceases service with the Corporation by reason of JUSTIFICATION
(as defined in his Employment Agreement), then he will have until the earlier of
(i) the expiration of the twelve (12) month period measured from his termination
date or (ii) the expiration of his initial five (5) year employment term as set
forth in his Employment Agreement, to exercise the Special Base Option for any
or all unexercised shares of Common Stock

                                       3
<PAGE>   48

for which the option was vested at the time of such cessation of service with
the Corporation. In no event, however, may the option be exercised after the May
30, 2008 expiration date of the option term.

     For purposes of the Special Base Option, Mr. Field will be deemed to
continue in service for so long as he renders services to the Corporation,
whether as (i) an employee, subject to the control and direction of the employer
entity as to both the work to be performed and the manner and method of
performance, (ii) a non-employee Board member or (iii) independent consultant.

SPECIAL ACCELERATION FEATURES

Corporate Transaction

     In the event of a Corporate Transaction, any then unvested option shares
subject to the Special Base Option shall automatically vest in full so that the
Special Base Option will, immediately prior to the effective date of the
Corporate Transaction, become exercisable for all of the shares of Common Stock
subject to the option as fully-vested shares and may be exercised for all or any
portion of those shares as fully-vested shares. Thereafter, neither the
Corporation nor the acquiring entity will have the right to repurchase those
shares following Mr. Field's termination of service. The Corporation is required
to provide Mr. Field with a minimum of ten days prior written notice of any
Corporate Transaction.

     Upon the consummation of such Corporate Transaction, the Special Base
Option will terminate and cease to be outstanding, except to the extent assumed
by the successor corporation. If the Special Base Option is assumed in
connection with a Corporate Transaction, then the option will be appropriately
adjusted, immediately after such Corporate Transaction, to apply to the number
and class of securities which would have been issuable to Mr. Field in
consummation of such Corporate Transaction had the Special Base Option been
exercised immediately prior to such Corporate Transaction, and appropriate
adjustments shall also be made to the Exercise Price, provided the aggregate
Exercise Price is required to remain the same.

          For purposes of this special acceleration feature, a CORPORATE
     TRANSACTION will be deemed to occur upon:

          (i) a stockholder-approved merger or consolidation in which securities
     possessing more than fifty percent (50%) of the total combined voting power
     of the Corporation's outstanding securities are transferred to a person or
     persons different from the persons holding those securities immediately
     prior to such transaction, or

          (ii) a stockholder-approved sale, transfer or other disposition of all
     or substantially all of the Corporation's assets, or

          (iii) the acquisition, directly or indirectly by any person or related
     group of persons (other than the Corporation or a person that directly or
     indirectly controls, is controlled by, or is under common control with, the
     Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of
     the Exchange Act of 1934, as amended (the "1934 Act")) of securities
     possessing more than fifty percent (50%) of the total combined voting power
     of the Corporation's outstanding securities pursuant to a tender or
     exchange offer made directly to the Corporation's stockholders.

     The Special Base Option will not affect the right of the Corporation to
adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.

Involuntary Termination

     If Mr. Field's employment ceases as a result of an Involuntary Termination,
any then unvested option shares subject to the Special Base Option shall
automatically vest in full.

                                       4
<PAGE>   49

Termination by Justification

     If Mr. Field's employment ceases for a deemed Justification pursuant to
Section 8(f)(ii) of the Employment Agreement, one-half (1/2) of the then
unvested option shares subject to the Special Base Option shall automatically
vest so that the Special Base Option will immediately upon Mr. Field's cessation
of service become exercisable for one-half of such otherwise unvested option
shares as fully vested shares. Thereafter, the Corporation will not have the
right to repurchase those shares following Mr. Field's termination of service.

TRANSFERABILITY OF UNVESTED SHARES OF COMMON STOCK

     Because unvested shares are subject to repurchase by the Corporation, Mr.
Field may not transfer any unvested shares of Common Stock purchased under the
Special Base Option, except by the provisions of his will or the laws of
inheritance following his death (and a few other limited circumstances and then
only if done in compliance with the applicable securities laws).

TRANSFERABILITY OF VESTED SHARES OF COMMON STOCK

     The vested shares of Common Stock are considered restricted securities
under the securities laws and therefore are subject to certain transfer
restrictions. These restrictions are discussed in the section entitled
"Restrictions on Resale" at the end of this document. However, the Corporation
has agreed to use all reasonable efforts to register Mr. Field's option shares
on a Form S-8 with the Securities and Exchange Commission (the "SEC") (and under
any state securities laws as reasonably requested by Mr. Field), and to keep
such registration statement on Form S-8 effective until all of the options
granted to him have been exercised in full or have expired. Under an effective
registration statement, the vested shares of Common Stock may be freely
transferred by Mr. Field, subject only to the restriction discussed below in the
section entitled "Limitations on Transactions Involving Common Stock" and the
Rule 144 restrictions discussed in the section entitled "Restrictions on Resale"
at the end of this document.

LIMITATIONS ON TRANSACTIONS INVOLVING COMMON STOCK

     Prior to the one-year anniversary of the commencement of his employment
with the Corporation, Mr. Field may not sell, make any short sale of, hedge,
loan, hypothecate, pledge, grant any option for the purchase of, or otherwise
dispose or transfer for value or otherwise agree to engage in any of the
foregoing transactions with respect to any Common Stock purchased pursuant to
the Special Base Option, unless he first obtains the written consent of the
Corporation's Board.

STOCKHOLDER RIGHTS AND OPTION ASSIGNABILITY

     Mr. Field is not to have any stockholder rights with respect to the option
shares until he has exercised the Special Base Option, paid the exercise price
for the purchased shares, and become a holder of record of the purchased shares.
The Special Base Option may be assigned in whole or in part by Mr. Field during
his lifetime, but only to the extent such assignment is, in connection with his
estate plan, made to one or more members of his immediate family or to a trust
established exclusively for such family members. The assigned portion may only
be exercised by the person or persons who acquire a proprietary interest in the
option pursuant to the assignment.

AMENDMENT/TERMINATION

     No amendment or modification which affects Mr. Field's rights and
obligations under the Special Base Option may be made without his consent.

COMPLIANCE WITH APPLICABLE LAWS

     The issuance of the shares of Common Stock purchasable under the Special
Base Option is subject to the Corporation's procurement of all approvals and
permits required by regulatory authorities having jurisdiction

                                       5
<PAGE>   50

over those shares. It is possible that the Corporation could be prevented from
issuing shares of Common Stock under the Special Base Option in the event one or
more required approvals or permits were not obtained.

MISCELLANEOUS

     The Special Base Option will not adversely affect or otherwise impair the
right of the Corporation to terminate Mr. Field's employment with the
Corporation in accordance with the provisions of any applicable employment
agreement or law. In addition, the Special Base Option will not limit the
authority of the Corporation to grant additional options pursuant to any other
equity incentive arrangements of the Corporation, or to grant options to, or
assume the options of, any person in connection with the acquisition of the
business and assets of any firm, company or other business entity.

     A corporation will be treated as the parent corporation of ARTISTdirect,
Inc. if such corporation owns, directly or indirectly, stock possessing fifty
percent (50%) or more of the total combined voting power of ARTISTdirect's
outstanding securities.

     A corporation will be deemed to be a subsidiary of ARTISTdirect, Inc. if
ARTISTdirect owns, directly or indirectly, stock possessing fifty percent (50%)
or more of the total combined voting power of the outstanding securities of that
corporation.

     The Special Base Option is not subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA) or Section 401(a) of the Code.

                                 RESTRICTIONS ON RESALE

     Executive officers such as Mr. Field who receive option grants such as the
Special Base Option will be subject to certain restrictions under the federal
securities laws with respect to their option transactions. These restrictions
may be summarized as follows:

SECTION 16

     Section 16(b) of the 1934 Act requires the Corporation to recover any
profit realized by any officer, Board member or beneficial owner of more than
ten percent (10%) of the outstanding Common Stock (a "Section 16 Insider") from
any purchase and sale, or sale and purchase, of such Common Stock made within a
period of less than six (6) months.

     The SEC has issued a series of rules under Section 16(b) of the 1934 Act
which govern the short-swing liability treatment of certain transactions
effected by a Section 16 Insider with respect to equity incentives such as stock
options. The application of the rules to the Special Base Option may be
summarized as follows.

     Option Grant. The receipt of the Special Base Option will not be treated as
a "purchase" of the underlying option shares for short-swing liability purposes.

     Option Exercise. The exercise of the option will be an exempt transaction
and will not be treated as a "purchase" of the acquired shares for short-swing
liability purposes.

     Delivery of Shares. The delivery of shares of Common Stock in payment of
the exercise price will be an exempt transaction for short-swing liability
purposes.

     Stock Withholding. The withholding of a portion of the shares of Common
Stock otherwise issuable to Mr. Fields by the Corporation in satisfaction of the
withholding taxes incurred in connection with the exercise of the Special Base
Option or the vesting of any unvested stock issued to him will be an exempt
transaction for short-swing liability purposes if such withholding is approved
by the entire Board, either at the time of the option exercise or vesting of the
shares or at any earlier time. The delivery of shares of Common Stock out of Mr.
Field's

                                       6
<PAGE>   51

existing investment portfolio in satisfaction of the applicable tax withholding
liability will be an exempt transaction for short-swing liability purposes if
approved by the entire Board.

     Repurchase of Unvested Shares. The surrender of unvested shares to the
Corporation for cancellation without any cash payment or other consideration to
Mr. Field will not be deemed a "sale" of those shares for short-swing liability
purposes. The repurchase of unvested shares by the Corporation for consideration
equal to the original purchase price paid for those shares will normally not
result in a "sale" transaction for short-swing liability purposes.

     Sale of Shares. The sale of shares acquired under the Special Base Option
will be treated as a "sale" for short-swing liability purposes and will be
matched with any non-exempt purchases of Common Stock (e.g., open-market
purchases) made within six (6) months before or after the date of such sale.

REPORTING REQUIREMENTS

     The receipt of the Special Base Option must be reported by Mr. Field on the
annual Form 5 required to be filed by the such individual within forty-five (45)
days after the close of the Corporation's fiscal year in which such option is
granted but may be reported on any earlier-filed Form 4. However, the receipt of
an option grant must in all events be reported on or before the due date for the
Form 4 in which the exercise of that option must be reported.

     The exercise of the Special Base Option must be reported on a Form 4 filed
within ten (10) days after the close of the calendar month in which such
exercise occurs. If the exercise price is paid with shares of Common Stock, then
the disposition of those shares should also be reported on the same Form 4.

     The sale of Common Stock must be reported on a Form 4 filed within ten (10)
days after the close of the calendar month in which the sale is effected.

RULE 144

     In general, persons such as Mr. Field having power to manage and direct the
policies of the Corporation, or their relatives and trusts, estates,
corporations or other entities controlled by any of those persons may be deemed
to be affiliates of the Corporation. Affiliates of the Corporation are obligated
to resell their shares of Common Stock in compliance with SEC Rule 144. This
rule requires such sales to be effected in "brokers' transactions," as defined
in the rule, and a written notice of each sale must be filed with the SEC at the
time of such sale. In addition, the rule requires that the Corporation must have
filed all reports required to be filed under the periodic reporting requirements
of the 1934 Act during the 12 months preceding the sale. Lastly, the rule limits
the number of shares which may be sold in any three (3)-month period to the
greater of (i) one percent (1%) of the outstanding shares of Common Stock or
(ii) the average weekly reported volume of trading in such shares on all
securities exchanges during the four (4) calendar weeks preceding the filing of
the required notice of proposed sale. However, assuming that the shares of
Common Stock acquired by Mr. Field under the Special Base Option are registered
on a Form S-8 with the SEC, there will be no holding period requirements of Rule
144 applicable to any such shares.

                                FEDERAL TAX CONSEQUENCES

     The following is a general description of the federal income tax
consequences of the Nonstatutory Option granted to Mr. Field. However, Mr. Field
should consult with his own tax advisor with respect to the actual tax treatment
of the Special Base Option.

     Option Grant. No taxable income is recognized upon receipt of the Special
Base Option.

     Option Exercise. If Mr. Field exercises the Special Base Option for vested
shares, he will recognize ordinary income in the year in which he exercises in
an amount equal to the excess of (i) the fair market

                                       7
<PAGE>   52

value of the purchased shares on the exercise date over (ii) the exercise price
paid for those shares. This income will be reported by the Corporation on Mr.
Field's Form W-2 wage statement for the year of exercise, and the Corporation
will have to collect all the applicable withholding taxes with respect to such
income.

     If the shares purchased by Mr. Field under the Special Base Option are
unvested and subject to the Corporation's right to repurchase those shares at
the original exercise price upon the termination of his employment prior to
vesting in such shares, then he will not recognize any taxable income at the
time of exercise but will have to report as ordinary income, as and when the
Corporation's repurchase rights lapse, an amount equal to the excess of (i) the
fair market value of the shares on the date such shares vest over (ii) the
exercise price he paid for the shares.

     If Mr. Field purchases unvested shares subject to the Corporation's
repurchase right, he may elect under Code Section 83(b) to include as ordinary
income in the year of exercise an amount equal to the excess of (i) the fair
market value of those purchased shares on the exercise date over (ii) the
exercise price paid for the shares. If he makes the Section 83(b) election, Mr.
Field will not recognize any additional income when the Corporation's repurchase
right subsequently lapses and the shares vest. Mr. Field must file the Section
83(b) election with the Internal Revenue Service within thirty days following
the date the option is exercised, and the resulting ordinary income is subject
to applicable tax withholding requirements. If Mr. Field files a Section 83(b)
election and the Corporation later repurchases his unvested shares, Mr. Field
will not be entitled to take a deduction for the resulting loss.

     Sale or Other Disposition of Shares. Upon the sale or other taxable
disposition of the shares of Common Stock purchased under the Special Base
Option, Mr. Field will recognize capital gain equal to the excess of (i) the
amount realized upon such sale over (ii) the fair market value of the shares at
the time Mr. Field recognized the ordinary income with respect to their
acquisition. A capital loss will result if the amount realized upon the sale is
less than such fair market value.

     The gain or loss will be long-term if the shares are held for more than one
(1) year prior to such sale or disposition. If Mr. Field purchases vested
shares, his holding period will start at the time the Special Base Option is
exercised for those shares. If he purchases unvested shares subject to the
Corporation's repurchase right, the holding period will start either (i) at the
time when the shares vest, if no Section 83(b) election is made at the time of
exercise, or (ii) at the time the option is exercised, if he files the Section
83(b) election within thirty days after the option exercise date.

     Delivery of Shares. If Mr. Field pays the exercise price with shares of
Common Stock, then he will not recognize any taxable income to the extent that
the number of shares of Common Stock received upon the exercise of the option
equals the number of shares of Common Stock delivered in payment of the exercise
price. For federal income tax purposes, these newly-acquired shares will have
the same basis and holding period as the delivered shares. The additional shares
of Common Stock received upon the exercise of the option will have to be
reported as ordinary income for the year of exercise in an amount equal to their
fair market value on the exercise date. The shares will have a tax basis equal
to such fair market value, and their holding period will be measured from the
exercise date. However, if the shares purchased under the Special Base Option
are subject to the Corporation's repurchase right, then the recognition and
measurement of ordinary income and the commencement of the capital gain holding
period will be deferred until the time the repurchase right lapses, unless Mr.
Field makes a Section 83(b) election to be taxed at the time of exercise.

     Employer Deduction. Generally, the Corporation will be entitled to an
income tax deduction equal to the amount of ordinary income recognized by Mr.
Field in connection with the exercise of the Special Base Option. The deduction
will, in general, be allowed for the taxable year of the Corporation in which
the ordinary income is recognized by Mr. Field. However, if the deduction is
attributable to the Special Base Option exercised for unvested shares subject to
the Corporation's repurchase right, then in the absence of a Section 83(b)
election, the deduction will not be allowed until the year in which Mr. Field
recognizes the ordinary income with respect to the unvested shares acquired
under the Special Base Option. Due to the limitations imposed by Code Section
162(m), the Corporation will not be allowed to deduct compensation (including
the income that is recognized by reason of the exercise of the Special Base
Option) paid to Mr. Field in excess of $1,000,000 unless Mr. Field is not a
"covered employee" (as defined in Code Section 162(m)) at the end of the year in
which the exercise occurs.

                                       8
<PAGE>   53

     Change in Control. If there is a change in control of the Corporation
(e.g., as the result of a merger of the Corporation with another corporation),
and, as a result, the shares underlying the Special Base Option become vested,
this acceleration is generally treated as a "parachute payment" for federal
income tax purposes. If the present value of all of Mr. Field's parachute
payments equals three times his average compensation for each of the past five
years, he will be subject to a 20% excise tax on the amount of the parachute
payments he receives in excess of his average annual compensation ("Excess
Parachute Payment"). In addition, the Corporation cannot deduct that Excess
Parachute Payment.

     Federal Tax Rates. Effective for the 2001 calendar year, ordinary income in
excess of $297,300 ($148,650 for a married taxpayer filing a separate return)
will be subject to the maximum federal income tax rate of 39.1%. The applicable
$297,300 or $148,650 threshold is subject to cost-of-living adjustments in
taxable years beginning after December 31, 2001. Certain limitations are imposed
upon a taxpayer's itemized deductions, and the personal exemptions claimed by
the taxpayer are subject to phase-out. These limitations may result in the
taxation of ordinary income at an effective top marginal rate in excess of
39.1%.

     Short-term capital gains are subject to the same tax rates as ordinary
income. Long-term capital gain is subject to a maximum federal income tax rate
of 20%, provided the capital asset is held for more than one (1) year prior to
sale or other taxable disposition.

     Beginning with the 2001 calendar year, capital gain recognized on the sale
or disposition of capital assets held for more than five (5) years by
individuals whose tax rate on ordinary income for the year of such sale or
disposition is below 28% will be subject to tax at a rate of 8%.

     Beginning in 2006, capital gain recognized on the sale or disposition of
capital assets held for more than five (5) years by individuals whose tax rate
on ordinary income for the year of such sale or disposition is 28% or more will
be taxed at a rate of 18%, provided the holding period for such property begins
after December 31, 2000.

     For the tax year ending December 31, 2001, itemized deductions are reduced
by 3% of the amount by which the taxpayer's adjusted gross income for the year
exceeds $132,950 ($66,475 for a married taxpayer filing a separate return).
However, the reduction may not exceed 80% of the total itemized deductions
(excluding medical expenses, casualty and theft losses, and certain investment
interest expense) claimed by the taxpayer. The applicable $132,950 or $66,475
threshold is subject to cost-of-living adjustments in taxable years beginning
after December 31, 2001.

     In addition, the deduction for personal exemptions claimed by the taxpayer
is reduced by 2% for each $2,500 ($1,250 for a married taxpayer filing a
separate return) or fraction thereof by which the taxpayer's adjusted gross
income for the year exceeds a specified threshold amount. The applicable
thresholds for 2001 are $199,450 for married taxpayers filing joint returns (and
in certain instances, surviving spouses), $166,200 for heads of households,
$132,950 for single taxpayers and $99,725 for married taxpayers filing separate
returns. Accordingly, the deduction is completely eliminated for any taxpayer
whose adjusted gross income for the year exceeds the applicable threshold amount
by more than $122,500 (or $61,250 for a married taxpayer filing a separate
return). The threshold amounts will be subject to cost-of-living adjustments in
taxable years beginning after December 31, 2001.

                                       9
<PAGE>   54

     The Economic Growth and Tax Relief Reconciliation Act of 2001 has lowered
the Federal tax rates which were in effect for the 2000 taxable year as follows:

<TABLE>
<CAPTION>
                                                                THE CORRESPONDING PERCENTAGES SHALL BE
                                                               SUBSTITUTED FOR THE FOLLOWING PERCENTAGES:
 IN THE CASE OF TAXABLE YEARS                            -------------------------------------------------------
BEGINNING DURING CALENDAR YEAR:                          28.0%            31.0%            36.0%           39.6%
                                                         -----            -----            -----           -----
<S>                                                      <C>              <C>              <C>             <C>

2001...........................................          27.5%            30.5%            35.5%           39.1%

2002 and 2003..................................          27.0%            30.0%            35.0%           38.6%

2004 and 2005..................................          26.0%            29.0%            34.0%           37.6%

2006 and thereafter............................          25.0%            28.0%            33.0%           35.0%
</TABLE>

                 CORPORATION INFORMATION AND ANNUAL INFORMATION

     ARTISTdirect, Inc. is a Delaware corporation which maintains its principal
executive offices at 5670 Wilshire Blvd., Suite 200, Los Angeles, CA 90036. The
telephone number at the executive offices is (323) 634-4000. Further information
concerning the Special Base Option grant made to Mr. Field may be obtained from
the Corporation at this address or telephone number.

     A copy of the Corporation's Annual Report to Stockholders for the current
fiscal year will be furnished to Mr. Field, and additional copies will be
furnished, without charge, upon written or oral request to the Corporate
Secretary, ARTISTdirect, Inc., 5670 Wilshire Blvd., Suite 200, Los Angeles, CA
90036, or upon telephoning the Corporation at (323) 634-4000. In addition, Mr.
Field may obtain without charge, upon written or oral request to the
Corporation's Secretary, a copy of any of the documents listed below, which are
hereby incorporated by reference into this Prospectus, other than certain
exhibits to such documents:

     (a)  The Corporation's Annual Report on Form 10-K for the fiscal year ended
          December 31, 2000 filed with the SEC on April 2, 2001, and further
          amended on Form 10-K/A filed with the SEC on April 30, 2001;

     (b)  The Corporation's Quarterly Report on Form 10-Q for the fiscal quarter
          ended June 30, 2001 filed with the SEC on August 14, 2001;

     (c)  The Corporation's Definitive Proxy Statement filed with the SEC on
          June 11, 2001, pursuant to Section 14(a) of the 1934 Act;

     (d)  The Corporation's Quarterly Report on Form 10-Q for the fiscal quarter
          ended March 31, 2001 filed with the SEC on May 15, 2001; and

     (e)  The Corporation's Registration Statement No. 000-30063 on Form 8-A12G
          filed with the SEC on March 22, 2000, pursuant to Section 12(b) of the
          1934 Act, in which there is described the terms, rights and provisions
          applicable to the Corporation's outstanding Common Stock.

     The Corporation will also deliver to Mr. Field a copy of all reports, proxy
statements and other communications distributed to the Corporation's
stockholders.

                                       10

<PAGE>   55

                                    EXHIBIT 2

                Option to Acquire 755,880 Shares of Common Stock

<PAGE>   56

                               ARTISTDIRECT, INC.
                         NOTICE OF GRANT OF STOCK OPTION

               Notice is hereby given of the following option grant (the
"Option") to purchase shares of the Common Stock of ARTISTdirect, Inc. (the
"Corporation"):

               Optionee: Frederick W. Field

               Grant Date: May 31, 2001

               Vesting Commencement Date: The date Optionee commences Service
                                          as CEO of the Corporation.

               Exercise Price: $0.75 per share

               Number of Option Shares: 755,880 shares

               Expiration Date: May 30, 2008

               Type of Option: Non-Statutory Stock Option

               Exercise Schedule: The Option shall not be exercisable and the
Option Shares shall not be vested until a Triggering Event (as defined below)
has occurred. If no Triggering Event has occurred by the third anniversary of
the Vesting Commencement Date, then the Option Shares shall remain unvested and
unexercisable and the Option shall terminate. If a Triggering Event occurs by
the third anniversary of the Vesting Commencement Date, however, Optionee shall
acquire a vested interest in, and the Option shall become exercisable with
respect to, all of the Option Shares.

               For purposes of this Option, "Triggering Event" shall be deemed
to occur upon the first to occur of (w) the "Average Closing Price" (as defined
below) equals or exceeds $3.50 (subject to adjustment for stock splits and the
like), (x) the shares of the Corporation's Common Stock are re-listed on the
Nasdaq National Market following a de-listing, (y) a Corporate Transaction
occurs or (z) upon an Involuntary Termination (as defined in the Option
Agreement) of Optionee's Service. "Average Closing Price," for purposes of this
Option, shall mean (i) the average closing price reported by the National
Association of Securities Dealers on the Nasdaq National Market (or, if not
listed on such market, any other national market) for shares of the
Corporation's Common Stock for any thirty (30) consecutive trading days during
the first three years measured from the Vesting Commencement Date or (ii), if
the Corporation is acquired by another entity, the consideration per share of
Common Stock received by the Corporation's stockholders in such acquisition.

               Optionee hereby agrees to be bound by all the terms and
conditions of the Option as set forth in the Stock Option Agreement attached
hereto as Exhibit A.

               All capitalized terms in this Notice shall have the meaning
assigned to them in this Notice or in the attached Stock Option Agreement.

<PAGE>   57

DATED: MAY 31, 2001

                                       ARTISTDIRECT, INC.

                                       By: /s/ MARC GEIGER
                                           -------------------------------------

                                       Title: Chief Executive Officer
                                              ----------------------------------

                                       By:   /s/ FREDERICK W. FIELD
                                           -------------------------------------
                                       OPTIONEE: FREDERICK W. FIELD

                                       Address:  c/o Radar Pictures, Inc.
                                                 10900 Wilshire Blvd.,
                                                 Suite 1400
                                                 Los Angeles, CA 90024

ATTACHMENTS:
EXHIBIT A - STOCK OPTION AGREEMENT
EXHIBIT B - PROSPECTUS FOR STOCK OPTION GRANT

<PAGE>   58

                                    EXHIBIT A

                             STOCK OPTION AGREEMENT

<PAGE>   59

                               ARTISTDIRECT, INC.

                      NON-QUALIFIED STOCK OPTION AGREEMENT

RECITALS

               A.     The Board and the shareholders have approved a stock
        option grant to Optionee in order to attract and retain Optionee to
        serve the Corporation in the capacity of Chairman and Chief Executive
        Officer.

               B.     The option evidenced by this Agreement is granted to
        Optionee in consideration of the services Optionee is to render the
        Corporation and not for any capital-raising purposes or in connection
        with any capital-raising activities.

               C.     The granted option is intended to be a Non-Qualified
        Option which does NOT satisfy the requirements of Section 422 of the
        Code.

               D.     All capitalized terms in this Agreement shall have the
        meaning assigned to them in the attached Appendix.

               NOW, THEREFORE, it is hereby agreed as follows:

               1.     GRANT OF OPTION. The Corporation hereby grants to
Optionee, as of the Grant Date, an option to purchase up to the number of Option
Shares specified in the Grant Notice attached hereto. The Option Shares shall be
purchasable from time to time during the option term specified in Paragraph 2 at
the Exercise Price.

               2.     OPTION TERM. This Option shall have a term of seven (7)
years measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.

               3.     LIMITED TRANSFERABILITY. This Option shall be neither
transferable nor assignable by Optionee other than by will or by the laws of
descent and distribution following Optionee's death and may be exercised, during
Optionee's lifetime, only by Optionee or as otherwise set forth herein. However,
this Option may, in connection with the Optionee's estate plan, be assigned in
whole or in part during Optionee's lifetime to one or more members of the
Optionee's immediate family or to a trust established for the exclusive benefit
of one or more such family members. The assigned portion shall be exercisable
only by the person or persons who acquire a proprietary interest in the Option
pursuant to such assignment or as set forth herein. The terms applicable to the
assigned portion shall be the same as those in effect for this Option
immediately prior to such assignment and shall be set forth in such documents
issued to the assignee as the Board may deem appropriate.

               4.     DATES OF EXERCISE. The Option shall not be exercisable for
any Option Shares unless a Triggering Event has occurred by the third
anniversary of the Vesting

<PAGE>   60

Commencement Date. If a Triggering Event has occurred by the third anniversary
of the Vesting Commencement Date, the Option shall become exercisable for all of
the Option Shares.

               5.     CESSATION OF SERVICE. The Option term specified in
Paragraph 2 shall terminate (and this Option shall cease to be outstanding)
prior to the Expiration Date in accordance with the following provisions:

                      (i)    Notwithstanding anything herein to the contrary, if
                             a Triggering Event has not occurred by the third
                             anniversary of the Vesting Commencement Date, the
                             option shall immediately terminate and cease to be
                             outstanding.

                      (ii)   Should Optionee cease Service by reason of an
                             Involuntary Termination, then Optionee's right to
                             exercise this Option shall lapse, and this Option
                             shall cease to be outstanding, upon the later of
                             (a) the expiration of the twelve (12) month period
                             measured from the date of Optionee's cessation of
                             Service or (b) the expiration of Optionee's initial
                             five-year employment term as set forth in the
                             Employment Agreement. In no event shall this Option
                             be exercisable at any time after the Expiration
                             Date.

                      (iii)  Should Optionee cease Service by reason of
                             Justification, then to the extent this Option is
                             otherwise exercisable at the time of such cessation
                             of Service, Optionee's right to exercise this
                             Option shall lapse, and this Option shall cease to
                             be outstanding, upon the earlier of (a) the
                             expiration of the twelve (12) month period measured
                             from the date of Optionee's cessation of Service or
                             (b) the expiration of Optionee's initial five-year
                             employment term as set forth in the Employment
                             Agreement. In no event shall this Option be
                             exercisable at any time after the Expiration Date.

                      (iv)   Should Optionee cease Service for any reason other
                             than (a) an Involuntary Termination, (b) a
                             termination for Cause, (c) Optionee's death or
                             Permanent Disability, or (d) Justification, then to
                             the extent this Option is otherwise exercisable at
                             the time of such cessation of Service, Optionee's
                             right

                                       2
<PAGE>   61

                             to exercise this Option shall lapse and this Option
                             cease to be outstanding, upon the earlier of (x)
                             the expiration of the ninety (90) day period
                             measured from the date of Optionee's cessation of
                             Service or (y) the Expiration Date.

                      (v)    Should Optionee's Service be terminated for Cause,
                             then this Option shall immediately terminate and
                             cease to be outstanding.

                      (vi)   Should Optionee cease Service by reason of his
                             death, then the personal representative of
                             Optionee's estate or the person or persons to whom
                             the Option is transferred pursuant to Optionee's
                             will or in accordance with the laws of descent and
                             distribution or, if the Option has been transferred
                             to a trust in accordance with the terms herein, the
                             trustee of such trust, shall have the right to
                             exercise this Option to the extent this Option is
                             otherwise exercisable at the time of such death.
                             Such right shall lapse, and this Option shall cease
                             to be outstanding, upon the earlier of (a) the
                             expiration of the twelve (12) month period measured
                             from the date of Optionee's death or (b) the
                             Expiration Date.

                      (vii)  Should Optionee cease Service by reason of
                             Permanent Disability while this Option is
                             outstanding, then to the extent this Option is
                             otherwise exercisable at the time of such cessation
                             of Service, Optionee's right to exercise this
                             Option shall lapse, and this Option shall cease to
                             be outstanding, upon the later of (a) the
                             expiration of the twelve (12) month period measured
                             from the date of Optionee's cessation of Service or
                             (b) the expiration of Optionee's initial five-year
                             employment term as set forth in the Employment
                             Agreement. In no event shall this Option be
                             exercisable at any time after the Expiration Date.
                             In the event that such Permanent Disability
                             prevents Optionee from personally exercising this
                             Option, this Option may be exercised by Optionee's
                             personal authorized representative to the same
                             extent that Optionee could otherwise exercise this
                             Option.

                                       3
<PAGE>   62

                      (viii) Upon the expiration of the applicable exercise
                             period or (if earlier) upon the Expiration Date,
                             this Option shall terminate and cease to be
                             outstanding for any exercisable Option Shares for
                             which the Option has not otherwise been exercised.

               6.     CORPORATE TRANSACTION

                      (a)    Immediately following a Corporate Transaction, this
Option shall terminate and cease to be outstanding, except to the extent assumed
by the successor corporation (or Parent thereof) in connection with the
Corporate Transaction. The Corporation shall provide Optionee with a minimum of
ten days prior written notice of any Corporate Transaction.

                      (b)    If this Option is assumed in connection with a
Corporate Transaction, then this Option shall be appropriately adjusted,
immediately after such Corporate Transaction, to apply to the number and class
of securities which would have been issuable to Optionee in consummation of such
Corporate Transaction had the Option been exercised immediately prior to such
Corporate Transaction, and appropriate adjustments shall also be made to the
Exercise Price, provided the aggregate Exercise Price shall remain the same.

                      (c)    This Agreement shall not in any way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.

               7.     ADJUSTMENT IN OPTION SHARES. Should any change be made to
the Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the number and/or
class of securities subject to this Option and (ii) the Exercise Price in order
to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.

               8.     STOCKHOLDER RIGHTS. The holder of this Option shall not
have any stockholder rights with respect to the Option Shares until such person
shall have exercised the Option, paid the Exercise Price and become a holder of
record of the purchased shares.

               9.     MANNER OF EXERCISING OPTION.

                      (a)    In order to exercise this Option with respect to
all or any part of the Option Shares for which this Option is at the time
exercisable, Optionee (or any other person or persons exercising the Option)
must take the following actions:

                             (i)    Execute and deliver to the Corporation a
        Notice of Exercise for the number of Option Shares for which the Option
        is exercised.

                                       4
<PAGE>   63

                             (ii)   Pay the aggregate Exercise Price for the
        purchased shares in one or more of the following forms:

                                    (A)    cash or check made payable to the
               Corporation;

                                    (B)    shares of Common Stock held by
               Optionee (or any other person or persons exercising the Option)
               for the requisite period necessary to avoid a charge to the
               Corporation's earnings for financial reporting purposes and
               valued at Fair Market Value on the Exercise Date; or

                                    (C)    through a special sale and remittance
               procedure pursuant to which Optionee (or any other person or
               persons exercising the Option) shall concurrently provide
               irrevocable instructions (a) to a Corporation-designated
               brokerage firm to effect the immediate sale of the purchased
               shares and remit to the Corporation, out of the sale proceeds
               available on the settlement date, sufficient funds to cover the
               aggregate Exercise Price payable for the purchased shares plus
               all applicable federal, state and local income and employment
               taxes required to be withheld by the Corporation by reason of
               such exercise and (b) to the Corporation to deliver the
               certificates for the purchased shares directly to such brokerage
               firm in order to complete the sale.

                      Except to the extent the sale and remittance procedure is
               utilized in connection with the Option exercise, payment of the
               Exercise Price must accompany the Notice of Exercise.

                             (iii)  Furnish to the Corporation appropriate
        documentation that the person or persons exercising the Option (if other
        than Optionee) have the right to exercise this Option.

                             (iv)   Execute and deliver to the Corporation such
        written representations as may be requested by the Corporation in order
        for it to comply with the applicable requirements of federal and state
        securities laws.

                             (v)    Make appropriate arrangements with the
        Corporation (or Parent or Subsidiary employing or retaining Optionee)
        for the satisfaction of all federal, state and local income and
        employment tax withholding requirements applicable to the Option
        exercise.

                      (b)    As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option Shares.

                      (c)    In no event may this option be exercised for any
fractional shares.

                                       5
<PAGE>   64

               10.    LOCK-UP. Optionee agrees that prior to the one-year
anniversary of the commencement of his employment with the Corporation, he will
not sell, make any short sale of, hedge, loan, hypothecate, pledge, grant any
option for the purchase of, or otherwise dispose or transfer for value or
otherwise agree to engage in any of the foregoing transactions with respect to
the Option Shares without the written consent of the Corporation's Board of
Directors.

               11.    COMPLIANCE WITH LAWS AND REGULATIONS. The exercise of this
Option and the issuance of the Option Shares upon such exercise shall be subject
to compliance by the Corporation and Optionee with all applicable requirements
of law relating thereto and with all applicable regulations of any stock
exchange (or the Nasdaq National Market or other national market, if applicable)
on which the Common Stock may be listed for trading at the time of such exercise
and issuance.

               12.    SUCCESSORS AND ASSIGNS. Except to the extent otherwise
provided in Paragraphs 3 and 6, the provisions of this Agreement shall inure to
the benefit of, and be binding upon, the Corporation and its successors and
assigns and Optionee, Optionee's assigns and the legal representatives, heirs
and legatees of Optionee's estate.

               13.    GOVERNING LAW. The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
California without resort to that State's conflict-of-laws rules.

               14.    NOTICES. Any notice required to be given or delivered to
the Corporation under the terms of this Agreement shall be in writing and
addressed to the Corporation at its principal corporate offices. Any notice
required to be given or delivered to Optionee shall be in writing and addressed
to Optionee at the address indicated below Optionee's signature line on the
Grant Notice. All notices shall be deemed effective upon personal delivery or
upon deposit in the U.S. mail, postage prepaid and properly addressed to the
party to be notified.

                                       6
<PAGE>   65

                                    EXHIBIT I

                               NOTICE OF EXERCISE

               I hereby notify ARTISTdirect, Inc. (the "Corporation") that I
elect to purchase ______________ shares of the Corporation's Common Stock (the
"Purchased Shares") at the option exercise price of $ per share (the "Exercise
Price") pursuant to that certain option (the "Option") granted to me on _______,
_______.

               Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price.

____________________, _______
Date

                                             ___________________________________
                                             Optionee

                                             Address: __________________________

                                             ___________________________________

Print name in exact manner it is to
appear on the stock certificate:             ___________________________________

Address to which certificate is to
be sent, if different from address
above:                                       ___________________________________

                                             ___________________________________

Social Security Number:                      ___________________________________

<PAGE>   66

                                    APPENDIX

               The following definitions shall be in effect under the Agreement:

               A.     AGREEMENT shall mean this Stock Option Agreement.

               B.     BOARD shall mean the Corporation's Board of Directors.

               C.     CODE shall mean the Internal Revenue Code of 1986, as
amended.

               D.     COMMON STOCK shall mean the Corporation's common stock.

               E.     CORPORATE TRANSACTION shall mean any of the following
transactions effecting a change in control or ownership of the Corporation:

                      (i)    a stockholder-approved merger or consolidation in
        which securities possessing more than fifty percent (50%) of the total
        combined voting power of the Corporation's outstanding securities are
        transferred to a person or persons different from the persons holding
        those securities immediately prior to such transaction, or

                      (ii)   a stockholder-approved sale, transfer or other
        disposition of all or substantially all of the Corporation's assets, or

                      (iii)  the acquisition, directly or indirectly by any
        person or related group of persons (other than the Corporation or a
        person that directly or indirectly controls, is controlled by, or is
        under common control with, the Corporation), of beneficial ownership
        (within the meaning of Rule 13d-3 of the Securities Exchange Act of
        1934, as amended) of securities possessing more than fifty percent (50%)
        of the total combined voting power of the Corporation's outstanding
        securities pursuant to a tender or exchange offer made directly to the
        Corporation's stockholders.

               F.     CORPORATION shall mean ARTISTdirect, Inc., a Delaware
corporation.

               G.     EMPLOYEE shall mean the Optionee in his capacity as an
employee of the Corporation (or any Parent or Subsidiary), subject to the
control and direction of the employer entity as to both the work to be performed
and the manner and method of performance.

               H.     EMPLOYMENT AGREEMENT shall mean that certain Employment
Agreement dated as of May 31, 2001, between Optionee and the Corporation.

               I.     EXERCISE DATE shall mean the date on which the Option
shall have been exercised in accordance with Paragraph 9 of the Agreement.

               J.     EXERCISE PRICE shall mean the exercise price per share as
specified in the Grant Notice.

               K.     EXPIRATION DATE shall mean the date on which the Option
expires as specified in the Grant Notice.

<PAGE>   67

               L.     FAIR MARKET VALUE per share of Common Stock on any
relevant date, for purposes of Section 9 only, shall be determined in accordance
with the following provisions:

                      (i)    If the Common Stock is at the time traded on the
        Nasdaq National Market, then the Fair Market Value shall be the average
        of the high and low selling prices per share of Common Stock on the date
        in question, as such prices are reported by the National Association of
        Securities Dealers on the Nasdaq National Market (or, if not listed on
        such market, any other national market) and published in The Wall Street
        Journal. If there are no selling prices quoted for the Common Stock on
        the date in question, then the Fair Market Value shall be the average of
        the high and low selling prices on the last preceding date for which
        such quotations exist.

                      (ii)   If the Common Stock is at the time listed on any
        Stock Exchange, then the Fair Market Value shall be the average high and
        low selling prices per share of Common Stock on the date in question on
        the Stock Exchange determined by the Compensation Committee to be the
        primary market for the Common Stock, as such prices are officially
        quoted in the composite tape of transactions on such exchange and
        published in The Wall Street Journal. If there are no selling prices
        quoted for the Common Stock on the date in question, then the Fair
        Market Value shall be the average of the high and low selling prices on
        the last preceding date for which such quotations exist.

               N.     GRANT DATE shall mean the date of grant of the Option as
specified in the Grant Notice.

               O.     GRANT NOTICE shall mean the Notice of Grant of Stock
Option accompanying the Agreement, pursuant to which Optionee has been informed
of the basic terms of the Option evidenced hereby.

               P.     INVOLUNTARY TERMINATION shall mean the termination of
Optionee's Service by reason of:

                      (i)    Optionee's involuntary dismissal or discharge by
        the Corporation for reasons other than (X) for Cause, as defined in the
        Employment Agreement, or (Y) by reason of death or Permanent Disability,
        or

                      (ii)   Optionee's resignation for Good Reason, as defined
        in the Employment Agreement.

               Q.     JUSTIFICATION shall have the meaning given such term in
the Employment Agreement.

               R.     NON-QUALIFIED OPTION shall mean an option not intended to
satisfy the requirements of Code Section 422.

               S.     NOTICE OF EXERCISE shall mean the written notice of
exercise in the form attached hereto as Exhibit I.

<PAGE>   68

               T.     OPTION SHARES shall mean the number of shares of Common
Stock subject to the option as specified in the Grant Notice.

               U.     OPTIONEE shall mean the person to whom the Option is
granted as specified in the Grant Notice.

               V.     PARENT shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations ending with the Corporation,
provided each corporation in the unbroken chain (other than the Corporation)
owns, at the time of the determination, stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

               W.     PERMANENT DISABILITY shall mean the inability of Optionee
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which is expected to result in death
or has lasted or can be expected to last for a continuous period of twelve (12)
months or more.

               X.     SERVICE shall mean the Optionee's performance of services
for the Corporation (or any Parent or Subsidiary) in the capacity of an
Employee, a non-employee member of the board of directors or an independent
consultant.

               Y.     STOCK EXCHANGE shall mean the American Stock Exchange or
the New York Stock Exchange.

               Z.     SUBSIDIARY shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in the
unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.

               AA.    TRIGGERING EVENT shall have the meaning given such term in
the Grant Notice.

<PAGE>   69

                                    EXHIBIT B

                        PROSPECTUS FOR STOCK OPTION GRANT

<PAGE>   70

                               ARTISTDIRECT, INC.

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

                                   PROSPECTUS

                                       FOR

                           SPECIAL STOCK OPTION GRANT

                             MR. FREDERICK W. FIELD

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

                                     The date of this Prospectus is May 31, 2001

<PAGE>   71

                                TABLE OF CONTENTS

                                                                  PAGE
                                                                  ----

INFORMATION ON STOCK OPTION GRANT....................................1
         Introduction................................................1
         Exercise Price..............................................1
         Changes in Capitalization...................................1
         Exercise and Vesting of Option..............................1
         Early Termination of Option.................................3
         Corporate Transaction.......................................4
         Transferability of Common Stock.............................4
         Limitations on Transactions Involving Common Stock..........5
         Stockholder Rights and Option Assignability.................5
         Amendment/Termination.......................................5
         Compliance with Applicable Laws.............................5
         Miscellaneous...............................................5

RESTRICTIONS ON RESALE...............................................6
         Section 16..................................................6
         Reporting Requirements......................................6
         Rule 144....................................................7

FEDERAL TAX CONSEQUENCES.............................................7

CORPORATION INFORMATION AND ANNUAL INFORMATION.......................9

<PAGE>   72

THIS DOCUMENT CONSTITUTES PART OF THE OFFICIAL PROSPECTUS COVERING SECURITIES
THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.

                                   INFORMATION
                                       ON
                               STOCK OPTION GRANT

     ARTISTdirect, Inc., a corporation organized and existing under the laws of
the State of Delaware ("the Corporation"), is offering shares of its common
stock to Mr. Frederick W. Field pursuant to a special stock option grant (the
"Special Level One Option") made to him on May 31, 2001 to induce him to serve
as the Corporation's Chief Executive Officer and Chairman of the Board.

INTRODUCTION

     The Special Level One Option granted to Mr. Field was authorized by the
Corporation's Board of Directors (the "Board") and provides him with the right
to purchase up to 755,880 shares of the Corporation's common stock (the "Common
Stock"). The grant is intended to provide Mr. Field with a meaningful incentive
to serve as the Corporation's Chief Executive Officer and Chairman of the Board.

     The Special Level One Option is a nonstatutory stock option ("Nonstatutory
Option") not intended to satisfy the requirements of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). The federal income tax
consequences applicable to such a Nonstatutory Option are summarized in the
section below entitled "Federal Tax Consequences."

     Upon exercise of the Special Level One Option, Mr. Field will receive
shares of Common Stock made available either from authorized but unissued shares
of Common Stock or from shares of Common Stock reacquired by the Corporation,
including shares repurchased on the open market.

     Unless the context indicates otherwise, all references to the Corporation
in this document include ARTISTdirect, Inc. and its parent and subsidiary
corporations, whether now existing or subsequently established.

EXERCISE PRICE

     The exercise price per share of Common Stock subject to the Special Level
One Option is $0.75. The fair market value per share of Common Stock on the May
31, 2001 grant date was $0.64 per share, based on the last reported sale price
on The Nasdaq National Market.

CHANGES IN CAPITALIZATION

     Should any change be made to the outstanding Common Stock by reason of any
stock split, stock dividend, recapitalization, combination of shares, exchange
of shares or other change affecting the outstanding Common Stock as a class
without the Corporation's receipt of consideration, then appropriate adjustments
will be made to the number and/or class of securities and price per share in
effect under the Special Level One Option in order to preclude the dilution or
enlargement of his rights and benefits thereunder.

EXERCISE AND VESTING OF OPTION

     The Special Level One Option will not be exercisable unless one of the
following events occurs prior to the third anniversary of the Vesting
Commencement Date set forth in the Notice of Grant pertaining to the Special
Level One Option, in which event Mr. Field will acquire a vested interest in,
and the Special Level One Option will become fully exercisable with respect to,
all of the option shares: (i) the 30-day average closing sale price of the
Corporation's common stock or the consideration paid per share in an acquisition
of the Corporation reaches a minimum of $3.50 per share (subject to adjustment
for stock splits and the like); (ii) the Corporation's common stock is re-listed
on The Nasdaq National Market following a de-listing; (iii) a Corporate
Transaction

<PAGE>   73

occurs; or (iv) Mr. Field's service with the Corporation ceases pursuant to an
Involuntary Termination (each a "Level One Triggering Event"). If no Level One
Triggering Event has occurred by the third anniversary of the Vesting
Commencement Date, then the Special Level One Option will terminate and no
option shares will vest or become exercisable.

     The Special Level One Option may be exercised, for any or all shares for
which the option is at the time exercisable, upon delivery of a completed Notice
of Exercise (which is attached to Mr. Field's Stock Option Agreement) to the
Corporation's Chief Financial Officer at the Corporation's principal offices.
The Notice of Exercise must specify the number of shares to be purchased under
the option and must also be accompanied by payment of the applicable exercise
price and appropriate proof that the person exercising such option (if other
than Mr. Field) has the right to effect such exercise. The option will be deemed
to be exercised at the time of the Corporation's receipt of such notice and
payment.

     The exercise price is payable immediately upon exercise of the option and
may be paid in cash or check payable to the Corporation or in shares of Common
Stock held for the requisite period necessary to avoid a charge to the
Corporation's reported earnings (generally a six (6)-month period) and valued at
Fair Market Value on the exercise date.

          For valuation purposes, the FAIR MARKET VALUE of the Common Stock will
     be determined as follows:

          (i) If the Common Stock is at the time traded on The Nasdaq National
     Market, then the Fair Market Value shall be the average of the high and low
     selling prices per share of Common Stock on the date in question, as such
     prices are reported by the National Association of Securities Dealers on
     The Nasdaq National Market (or, if not listed on such market, any other
     national market) and published in The Wall Street Journal. If there are no
     selling prices quoted for the Common Stock on the date in question, then
     the Fair Market Value shall be the average of the high and low selling
     prices on the last preceding date for which such quotations exist; or

          (ii) If the Common Stock is at the time listed on any stock exchange,
     then the Fair Market Value shall be the average high and low selling prices
     per share of Common Stock on the date in question on the Stock Exchange
     determined by the Corporation's Compensation Committee to be the primary
     market for the Common Stock, as such prices are officially quoted in the
     composite tape of transactions on such exchange and published in The Wall
     Street Journal. If there are no selling prices quoted for the Common Stock
     on the date in question, then the Fair Market Value shall be the average of
     the high and low selling prices on the last preceding date for which such
     quotations exist.

     Cashless exercises are also permitted. To use this procedure, Mr. Field
must provide irrevocable instructions to a Corporation-designated brokerage firm
to effect the immediate sale of the shares purchased under the option and to pay
over to the Corporation, out of the sale proceeds available on the settlement
date, sufficient funds to cover the aggregate exercise price payable for the
purchased shares plus all applicable withholding taxes. Concurrently with such
instructions, Mr. Field must also direct the Corporation to deliver the
certificate for the purchased shares directly to the brokerage firm in order to
complete the sale transaction.

     The Special Level One Option will have a maximum term of seven (7) years
measured from the May 31, 2001 grant date, subject to earlier termination if no
Level One Triggering Event has occurred by the third anniversary of the Vesting
Commencement Date, or upon Mr. Field's cessation of service.

                                       2
<PAGE>   74

EARLY TERMINATION OF OPTION

     Upon his cessation of service for any reason other than death, Permanent
Disability, Cause, an Involuntary Termination or Justification, Mr. Field will
have a ninety (90) day period during which to exercise the Special Level One
Option, to the extent that the option is otherwise exercisable as of the date
his employment ends. In no event, however, may the Special Level One Option be
exercised after the May 30, 2008 expiration date of the option term.

     The Special Level One Option will immediately terminate if Mr. Field's
employment is terminated for Cause (as defined in the employment agreement dated
as of May 31, 2001 between the Corporation and Mr. Field (the "Employment
Agreement")), or if no Level One Triggering Event has occurred by the third
anniversary of the Vesting Commencement Date.

     Should Mr. Field die while holding the Special Level One Option, the
personal representative of his estate or the person or persons to whom the
option is transferred by the provisions of his will or the laws of inheritance
following his death may exercise the option, to the extent that the option is
otherwise exercisable at the time of his death. The right to exercise the option
will lapse upon the earlier of (i) the May 30, 2008 expiration date of the
option term or (ii) the expiration of the twelve (12) month period measured from
the date of Mr. Field's death.

     If Mr. Field ceases service with the Corporation as a result of an
Involuntary Termination or a Permanent Disability, then he will have until the
later of (i) the expiration of the twelve (12) month period measured from his
termination date or (ii) the expiration of his initial five (5) year employment
term as set forth in his Employment Agreement, to exercise the Special Level One
Option, to the extent that the option is otherwise exercisable as of the date of
such cessation of service with the Corporation. In no event, however, may the
option be exercised after the May 30, 2008 expiration date of the option term.

          For purposes of the Special Level One Option, Mr. Field will be deemed
     to have a PERMANENT DISABILITY if he is unable to perform any substantial
     gainful activity by reason of any medically-determinable physical or mental
     impairment that is expected to result in death or has lasted or can be
     expected to last for a continuous period of twelve (12) months or more. If
     a Permanent Disability prevents Mr. Field from personally exercising the
     Special Level One Option, it may be exercised by Mr. Field's personal
     authorized representative to the same extent that he could otherwise
     exercise the Special Level One Option himself.

          For purposes of the Special Level One Option, an INVOLUNTARY
     TERMINATION will be deemed to occur upon the termination of Mr. Field's
     employment with the Corporation by reason of:

          (i) his involuntary dismissal or discharge by the Corporation for
     reasons other than (x) for Cause (as defined in his Employment Agreement)
     or (y) by reason of death or having a Permanent Disability, or

          (ii) his resignation for Good Reason (as defined in his Employment
     Agreement).

     If Mr. Field ceases service with the Corporation by reason of JUSTIFICATION
(as defined in his Employment Agreement), then he will have until the earlier of
(i) the expiration of the twelve (12) month period measured from his termination
date or (ii) the expiration of his initial five (5) year employment term as set
forth in his Employment Agreement, to exercise the Special Level One Option, to
the extent that the option is otherwise exercisable as of the date of such
cessation of service with the Corporation. In no event, however, may the option
be exercised after the May 30, 2008 expiration date of the option term.

     For purposes of the Special Level One Option, Mr. Field will be deemed to
continue in service for so long as he renders services to the Corporation,
whether as (i) an employee, subject to the control and direction of the employer
entity as to both the work to be performed and the manner and method of
performance, (ii) a non-employee Board member or (iii) independent consultant.

                                       3
<PAGE>   75

CORPORATE TRANSACTION

     In the event of a Corporate Transaction prior to the third anniversary of
the Vesting Commencement Date, Mr. Field will acquire a vested interest in, and
the Special Level One Option will become fully exercisable with respect to, all
of the option shares immediately prior to the effective date of the Corporate
Transaction. The Corporation is required to provide Mr. Field with a minimum of
ten days prior written notice of any Corporate Transaction.

     Upon the consummation of such Corporate Transaction, the Special Level One
Option will terminate and cease to be outstanding, except to the extent assumed
by the successor corporation. If the Special Level One Option is assumed in
connection with a Corporate Transaction, then the option will be appropriately
adjusted, immediately after such Corporate Transaction, to apply to the number
and class of securities which would have been issuable to Mr. Field in
consummation of such Corporate Transaction had the Special Level One Option been
exercised immediately prior to such Corporate Transaction, and appropriate
adjustments shall also be made to the Exercise Price, provided the aggregate
Exercise Price is required to remain the same.

          For purposes of the Special Level One Option, a CORPORATE TRANSACTION
     will be deemed to occur upon:

          (i) a stockholder-approved merger or consolidation in which securities
     possessing more than fifty percent (50%) of the total combined voting power
     of the Corporation's outstanding securities are transferred to a person or
     persons different from the persons holding those securities immediately
     prior to such transaction, or

          (ii) a stockholder-approved sale, transfer or other disposition of all
     or substantially all of the Corporation's assets, or

          (iii) the acquisition, directly or indirectly by any person or related
     group of persons (other than the Corporation or a person that directly or
     indirectly controls, is controlled by, or is under common control with, the
     Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of
     the Exchange Act of 1934, as amended (the "1934 Act")) of securities
     possessing more than fifty percent (50%) of the total combined voting power
     of the Corporation's outstanding securities pursuant to a tender or
     exchange offer made directly to the Corporation's stockholders.

     The Special Level One Option will not affect the right of the Corporation
to adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.

TRANSFERABILITY OF COMMON STOCK

     The shares of Common Stock issuable upon exercise of the Special Level One
Option are considered restricted securities under the securities laws and
therefore are subject to certain transfer restrictions. These restrictions are
discussed in the section entitled "Restrictions on Resale" at the end of this
document. However, the Corporation has agreed to use all reasonable efforts to
register Mr. Field's option shares on a Form S-8 with the Securities and
Exchange Commission (the "SEC") (and under any state securities laws as
reasonably requested by Mr. Field), and to keep such registration statement on
Form S-8 effective until all of the options granted to him have been exercised
in full or have expired. Under an effective registration statement, the vested
shares of Common Stock may be freely transferred by Mr. Field, subject only to
the restriction discussed below in the section entitled "Limitations on
Transactions Involving Common Stock" and the Rule 144 restrictions discussed in
the section entitled "Restrictions on Resale" at the end of this document.

                                       4
<PAGE>   76

LIMITATIONS ON TRANSACTIONS INVOLVING COMMON STOCK

     Prior to the one-year anniversary of the commencement of his employment
with the Corporation, Mr. Field may not sell, make any short sale of, hedge,
loan, hypothecate, pledge, grant any option for the purchase of, or otherwise
dispose or transfer for value or otherwise agree to engage in any of the
foregoing transactions with respect to any Common Stock purchased pursuant to
the Special Level One Option, unless he first obtains the written consent of the
Corporation's Board.

STOCKHOLDER RIGHTS AND OPTION ASSIGNABILITY

     Mr. Field is not to have any stockholder rights with respect to the option
shares until he has exercised the Special Level One Option, paid the exercise
price for the purchased shares, and become a holder of record of the purchased
shares. The Special Level One Option may be assigned in whole or in part by Mr.
Field during his lifetime, but only to the extent such assignment is, in
connection with his estate plan, made to one or more members of his immediate
family or to a trust established exclusively for such family members. The
assigned portion may only be exercised by the person or persons who acquire a
proprietary interest in the option pursuant to the assignment.

AMENDMENT/TERMINATION

     No amendment or modification which affects Mr. Field's rights and
obligations under the Special Level One Option may be made without his consent.

COMPLIANCE WITH APPLICABLE LAWS

     The issuance of the shares of Common Stock purchasable under the Special
Level One Option is subject to the Corporation's procurement of all approvals
and permits required by regulatory authorities having jurisdiction over those
shares. It is possible that the Corporation could be prevented from issuing
shares of Common Stock under the Special Level One Option in the event one or
more required approvals or permits were not obtained.

MISCELLANEOUS

     The Special Level One Option will not adversely affect or otherwise impair
the right of the Corporation to terminate Mr. Field's employment with the
Corporation in accordance with the provisions of any applicable employment
agreement or law. In addition, the Special Level One Option will not limit the
authority of the Corporation to grant additional options pursuant to any other
equity incentive arrangements of the Corporation, or to grant options to, or
assume the options of, any person in connection with the acquisition of the
business and assets of any firm, company or other business entity.

     A corporation will be treated as the parent corporation of ARTISTdirect,
Inc. if such corporation owns, directly or indirectly, stock possessing fifty
percent (50%) or more of the total combined voting power of ARTISTdirect's
outstanding securities.

     A corporation will be deemed to be a subsidiary of ARTISTdirect, Inc. if
ARTISTdirect owns, directly or indirectly, stock possessing fifty percent (50%)
or more of the total combined voting power of the outstanding securities of that
corporation.

     The Special Level One Option is not subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA) or Section 401(a) of the
Code.

                                       5
<PAGE>   77

                             RESTRICTIONS ON RESALE

     Executive officers such as Mr. Field who receive option grants such as the
Special Level One Option will be subject to certain restrictions under the
federal securities laws with respect to their option transactions. These
restrictions may be summarized as follows:

SECTION 16

     Section 16(b) of the 1934 Act requires the Corporation to recover any
profit realized by any officer, Board member or beneficial owner of more than
ten percent (10%) of the outstanding Common Stock (a "Section 16 Insider") from
any purchase and sale, or sale and purchase, of such Common Stock made within a
period of less than six (6) months.

     The SEC has issued a series of rules under Section 16(b) of the 1934 Act
which govern the short-swing liability treatment of certain transactions
effected by a Section 16 Insider with respect to equity incentives such as stock
options. The application of the rules to the Special Level One Option may be
summarized as follows.

     Option Grant. The receipt of the Special Level One Option will not be
treated as a "purchase" of the underlying option shares for short-swing
liability purposes.

     Option Exercise. The exercise of the option will be an exempt transaction
and will not be treated as a "purchase" of the acquired shares for short-swing
liability purposes.

     Delivery of Shares. The delivery of shares of Common Stock in payment of
the exercise price will be an exempt transaction for short-swing liability
purposes.

     Stock Withholding. The withholding of a portion of the shares of Common
Stock otherwise issuable to Mr. Fields by the Corporation in satisfaction of the
withholding taxes incurred in connection with the exercise of the Special Level
One Option will be an exempt transaction for short-swing liability purposes if
such withholding is approved by the entire Board, either at the time of the
option exercise or at any earlier time. The delivery of shares of Common Stock
out of Mr. Field's existing investment portfolio in satisfaction of the
applicable tax withholding liability will be an exempt transaction for
short-swing liability purposes if approved by the entire Board.

     Sale of Shares. The sale of shares acquired under the Special Level One
Option will be treated as a "sale" for short-swing liability purposes and will
be matched with any non-exempt purchases of Common Stock (e.g., open-market
purchases) made within six (6) months before or after the date of such sale.

REPORTING REQUIREMENTS

     The receipt of the Special Level One Option must be reported by Mr. Field
on the annual Form 5 required to be filed by the such individual within
forty-five (45) days after the close of the Corporation's fiscal year in which
such option is granted but may be reported on any earlier-filed Form 4. However,
the receipt of an option grant must in all events be reported on or before the
due date for the Form 4 in which the exercise of that option must be reported.

     The exercise of the Special Level One Option must be reported on a Form 4
filed within ten (10) days after the close of the calendar month in which such
exercise occurs. If the exercise price is paid with shares of Common Stock, then
the disposition of those shares should also be reported on the same Form 4.

     The sale of Common Stock must be reported on a Form 4 filed within ten (10)
days after the close of the calendar month in which the sale is effected.

                                       6
<PAGE>   78

RULE 144

     In general, persons such as Mr. Field having power to manage and direct the
policies of the Corporation, or their relatives and trusts, estates,
corporations or other entities controlled by any of those persons may be deemed
to be affiliates of the Corporation. Affiliates of the Corporation are obligated
to resell their shares of Common Stock in compliance with SEC Rule 144. This
rule requires such sales to be effected in "brokers' transactions," as defined
in the rule, and a written notice of each sale must be filed with the SEC at the
time of such sale. In addition, the rule requires that the Corporation must have
filed all reports required to be filed under the periodic reporting requirements
of the 1934 Act during the 12 months preceding the sale. Lastly, the rule limits
the number of shares which may be sold in any three (3)-month period to the
greater of (i) one percent (1%) of the outstanding shares of Common Stock or
(ii) the average weekly reported volume of trading in such shares on all
securities exchanges during the four (4) calendar weeks preceding the filing of
the required notice of proposed sale. However, assuming that the shares of
Common Stock acquired by Mr. Field under the Special Level One Option are
registered on a Form S-8 with the SEC, there will be no holding period
requirements of Rule 144 applicable to any such shares.

                            FEDERAL TAX CONSEQUENCES

     The following is a general description of the federal income tax
consequences of the Nonstatutory Option granted to Mr. Field. However, Mr. Field
should consult with his own tax advisor with respect to the actual tax treatment
of the Special Level One Option.

     Option Grant. No taxable income is recognized upon receipt of the Special
Level One Option.

     Option Exercise. If Mr. Field exercises the Special Level One Option, he
will recognize ordinary income in the year in which he exercises in an amount
equal to the excess of (i) the fair market value of the purchased shares on the
exercise date over (ii) the exercise price paid for those shares. This income
will be reported by the Corporation on Mr. Field's Form W-2 wage statement for
the year of exercise, and the Corporation will have to collect all the
applicable withholding taxes with respect to such income.

     Sale or Other Disposition of Shares. Upon the sale or other taxable
disposition of the shares of Common Stock purchased under the Special Level One
Option, Mr. Field will recognize capital gain equal to the excess of (i) the
amount realized upon such sale over (ii) the fair market value of the shares at
the time Mr. Field recognized the ordinary income with respect to their
acquisition. A capital loss will result if the amount realized upon the sale is
less than such fair market value.

     The gain or loss will be long-term if the shares are held for more than one
(1) year prior to such sale or disposition. Mr. Field's holding period will
start at the time the Special Level One Option is exercised.

     Delivery of Shares. If Mr. Field pays the exercise price with shares of
Common Stock, then he will not recognize any taxable income to the extent that
the number of shares of Common Stock received upon the exercise of the option
equals the number of shares of Common Stock delivered in payment of the exercise
price. For federal income tax purposes, these newly-acquired shares will have
the same basis and holding period as the delivered shares. The additional shares
of Common Stock received upon the exercise of the option will have to be
reported as ordinary income for the year of exercise in an amount equal to their
fair market value on the exercise date. The shares will have a tax basis equal
to such fair market value, and their holding period will be measured from the
exercise date.

     Employer Deduction. Generally, the Corporation will be entitled to an
income tax deduction equal to the amount of ordinary income recognized by Mr.
Field in connection with the exercise of the Special Level One Option. The
deduction will, in general, be allowed for the taxable year of the Corporation
in which the ordinary income is recognized by Mr. Field. Due to the limitations
imposed by Code Section 162(m), the Corporation will not be allowed to deduct
compensation (including the income that is recognized by reason of the exercise
of the

                                       7
<PAGE>   79

Special Level One Option) paid to Mr. Field in excess of $1,000,000 unless Mr.
Field is not a "covered employee" (as defined in Code Section 162(m)) at the end
of the year in which the exercise occurs.

     Change in Control. If there is a change in control of the Corporation
(e.g., as the result of a merger of the Corporation with another corporation),
and, as a result, the Special Level One Option becomes exercisable, this
acceleration is generally treated as a "parachute payment" for federal income
tax purposes. If the present value of all of Mr. Field's parachute payments
equals three times his average compensation for each of the past five years, he
will be subject to a 20% excise tax on the amount of the parachute payments he
receives in excess of his average annual compensation ("Excess Parachute
Payment"). In addition, the Corporation cannot deduct that Excess Parachute
Payment.

     Federal Tax Rates. Effective for the 2001 calendar year, ordinary income in
excess of $297,300 ($148,650 for a married taxpayer filing a separate return)
will be subject to the maximum federal income tax rate of 39.1%. The applicable
$297,300 or $148,650 threshold is subject to cost-of-living adjustments in
taxable years beginning after December 31, 2001. Certain limitations are imposed
upon a taxpayer's itemized deductions, and the personal exemptions claimed by
the taxpayer are subject to phase-out. These limitations may result in the
taxation of ordinary income at an effective top marginal rate in excess of
39.1%.

     Short-term capital gains are subject to the same tax rates as ordinary
income. Long-term capital gain is subject to a maximum federal income tax rate
of 20%, provided the capital asset is held for more than one (1) year prior to
sale or other taxable disposition.

     Beginning with the 2001 calendar year, capital gain recognized on the sale
or disposition of capital assets held for more than five (5) years by
individuals whose tax rate on ordinary income for the year of such sale or
disposition is below 28% will be subject to tax at a rate of 8%.

     Beginning in 2006, capital gain recognized on the sale or disposition of
capital assets held for more than five (5) years by individuals whose tax rate
on ordinary income for the year of such sale or disposition is 28% or more will
be taxed at a rate of 18%, provided the holding period for such property begins
after December 31, 2000.

     For the tax year ending December 31, 2001, itemized deductions are reduced
by 3% of the amount by which the taxpayer's adjusted gross income for the year
exceeds $132,950 ($66,475 for a married taxpayer filing a separate return).
However, the reduction may not exceed 80% of the total itemized deductions
(excluding medical expenses, casualty and theft losses, and certain investment
interest expense) claimed by the taxpayer. The applicable $132,950 or $66,475
threshold is subject to cost-of-living adjustments in taxable years beginning
after December 31, 2001.

     In addition, the deduction for personal exemptions claimed by the taxpayer
is reduced by 2% for each $2,500 ($1,250 for a married taxpayer filing a
separate return) or fraction thereof by which the taxpayer's adjusted gross
income for the year exceeds a specified threshold amount. The applicable
thresholds for 2001 are $199,450 for married taxpayers filing joint returns (and
in certain instances, surviving spouses), $166,200 for heads of households,
$132,950 for single taxpayers and $99,725 for married taxpayers filing separate
returns. Accordingly, the deduction is completely eliminated for any taxpayer
whose adjusted gross income for the year exceeds the applicable threshold amount
by more than $122,500 (or $61,250 for a married taxpayer filing a separate
return). The threshold amounts will be subject to cost-of-living adjustments in
taxable years beginning after December 31, 2001.

                                       8
<PAGE>   80

     The Economic Growth and Tax Relief Reconciliation Act of 2001 has lowered
the Federal tax rates which were in effect for the 2000 taxable year as follows:

<TABLE>
<CAPTION>
                                                   THE CORRESPONDING PERCENTAGES SHALL BE
                                                 SUBSTITUTED FOR THE FOLLOWING PERCENTAGES:
 IN THE CASE OF TAXABLE YEARS               -----------------------------------------------------
BEGINNING DURING CALENDAR YEAR:             28.0%          31.0%            36.0%           39.6%
-------------------------------             -----          -----            -----           -----
<S>                                         <C>            <C>              <C>             <C>

2001.................................       27.5%          30.5%            35.5%           39.1%

2002 and 2003........................       27.0%          30.0%            35.0%           38.6%

2004 and 2005........................       26.0%          29.0%            34.0%           37.6%

2006 and thereafter..................       25.0%          28.0%            33.0%           35.0%
</TABLE>

                 CORPORATION INFORMATION AND ANNUAL INFORMATION

     ARTISTdirect, Inc. is a Delaware corporation which maintains its principal
executive offices at 5670 Wilshire Blvd., Suite 200, Los Angeles, CA 90036. The
telephone number at the executive offices is (323) 634-4000. Further information
concerning the Special Level One Option grant made to Mr. Field may be obtained
from the Corporation at this address or telephone number.

     A copy of the Corporation's Annual Report to Stockholders for the current
fiscal year will be furnished to Mr. Field, and additional copies will be
furnished, without charge, upon written or oral request to the Corporate
Secretary, ARTISTdirect, Inc., 5670 Wilshire Blvd., Suite 200, Los Angeles, CA
90036, or upon telephoning the Corporation at (323) 634-4000. In addition, Mr.
Field may obtain without charge, upon written or oral request to the
Corporation's Secretary, a copy of any of the documents listed below, which are
hereby incorporated by reference into this Prospectus, other than certain
exhibits to such documents:

     (a)  The Corporation's Annual Report on Form 10-K for the fiscal year ended
          December 31, 2000 filed with the SEC on April 2, 2001, and further
          amended on Form 10-K/A filed with the SEC on April 30, 2001;

     (b)  The Corporation's Quarterly Report on Form 10-Q for the fiscal quarter
          ended June 30, 2001 filed with the SEC on August 14, 2001;

     (c)  The Corporation's Definitive Proxy Statement filed with the SEC on
          June 11, 2001, pursuant to Section 14(a) of the 1934 Act;

     (d)  The Corporation's Quarterly Report on Form 10-Q for the fiscal quarter
          ended March 31, 2001 filed with the SEC on May 15, 2001; and

     (e)  The Corporation's Registration Statement No. 000-30063 on Form 8-A12G
          filed with the SEC on March 22, 2000, pursuant to Section 12(b) of the
          1934 Act, in which there is described the terms, rights and provisions
          applicable to the Corporation's outstanding Common Stock.

     The Corporation will also deliver to Mr. Field a copy of all reports, proxy
statements and other communications distributed to the Corporation's
stockholders.

                                       9

<PAGE>   81

                                    EXHIBIT 3

                Option to Acquire 665,220 Shares of Common Stock

<PAGE>   82

                               ARTISTDIRECT, INC.
                         NOTICE OF GRANT OF STOCK OPTION

               Notice is hereby given of the following option grant (the
"Option") to purchase shares of the Common Stock of ARTISTdirect, Inc. (the
"Corporation"):

               Optionee: Frederick W. Field

               Grant Date: May 31, 2001

               Vesting Commencement Date: The date Optionee commence Service as
                                          CEO of the Corporation

               Exercise Price: $0.75 per share

               Number of Option Shares: 665,220 shares

               Expiration Date: May 30, 2008

               Type of Option: Non-Statutory Stock Option

               Exercise Schedule: The Option shall not be exercisable and the
Option Shares shall not be vested until a Triggering Event (as defined below)
has occurred. If no Triggering Event has occurred by the third anniversary of
the Vesting Commencement Date, then the Option Shares shall remain unvested and
unexercisable and the Option shall terminate. If a Triggering Event occurs by
the third anniversary of the Vesting Commencement Date, however, Optionee shall
acquire a vested interest in, and the Option shall become exercisable with
respect to, all of the Option Shares.

               For purposes of this Option, "Triggering Event" shall be deemed
to occur upon the first to occur of (w) the "Average Closing Price" (as defined
below) equals or exceeds $7.00 (subject to adjustment for stock splits and the
like), (x) the shares of the Corporation's Common Stock are re-listed on the
Nasdaq National Market following a de-listing, (y) a Corporate Transaction
occurs, or (z) upon an Involuntary Termination (as defined in the Option
Agreement) of Optionee's Service. "Average Closing Price," for purposes of this
Option, shall mean (i) the average closing price reported by the National
Association of Securities Dealers on the Nasdaq National Market (or, if not
listed on such market, any other national market) for shares of the
Corporation's Common Stock for any thirty (30) consecutive trading days during
the first three years measured from the Vesting Commencement Date or (ii), if
the Corporation is acquired by another entity, the consideration per share of
Common Stock received by the Corporation's stockholders in such acquisition.

               Optionee hereby agrees to be bound by all the terms and
conditions of the Option as set forth in the Stock Option Agreement attached
hereto as Exhibit A.

               All capitalized terms in this Notice shall have the meaning
assigned to them in this Notice or in the attached Stock Option Agreement.

<PAGE>   83

DATED:  MAY 31, 2001

                                       ARTISTDIRECT, INC.

                                       By: /s/ MARC GEIGER
                                           -------------------------------------

                                       Title: Chief Executive Officer
                                              ----------------------------------

                                       By:   /s/ FREDERICK W. FIELD
                                           -------------------------------------
                                       OPTIONEE: FREDERICK W. FIELD

                                       Address:  c/o Radar Pictures, Inc.
                                                 10900 Wilshire Blvd.,
                                                 Suite 1400
                                                 Los Angeles, CA 90024

ATTACHMENTS:
EXHIBIT A - STOCK OPTION AGREEMENT
EXHIBIT B - PROSPECTUS FOR STOCK OPTION GRANT

<PAGE>   84

                                    EXHIBIT A

                             STOCK OPTION AGREEMENT

<PAGE>   85

                               ARTISTDIRECT, INC.

                      NON-QUALIFIED STOCK OPTION AGREEMENT

RECITALS

               A.     The Board and the shareholders have approved a stock
        option grant to Optionee in order to attract and retain Optionee to
        serve the Corporation in the capacity of Chairman and Chief Executive
        Officer.

               B.     The option evidenced by this Agreement is granted to
        Optionee in consideration of the services Optionee is to render the
        Corporation and not for any capital-raising purposes or in connection
        with any capital-raising activities.

               C.     The granted option is intended to be a Non-Qualified
        Option which does NOT satisfy the requirements of Section 422 of the
        Code.

               D.     All capitalized terms in this Agreement shall have the
        meaning assigned to them in the attached Appendix.

               NOW, THEREFORE, it is hereby agreed as follows:

               1.     GRANT OF OPTION. The Corporation hereby grants to
Optionee, as of the Grant Date, an option to purchase up to the number of Option
Shares specified in the Grant Notice attached hereto. The Option Shares shall be
purchasable from time to time during the option term specified in Paragraph 2 at
the Exercise Price.

               2.     OPTION TERM. This Option shall have a term of seven (7)
years measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.

               3.     LIMITED TRANSFERABILITY. This Option shall be neither
transferable nor assignable by Optionee other than by will or by the laws of
descent and distribution following Optionee's death and may be exercised, during
Optionee's lifetime, only by Optionee or as otherwise set forth herein. However,
this Option may, in connection with the Optionee's estate plan, be assigned in
whole or in part during Optionee's lifetime to one or more members of the
Optionee's immediate family or to a trust established for the exclusive benefit
of one or more such family members. The assigned portion shall be exercisable
only by the person or persons who acquire a proprietary interest in the Option
pursuant to such assignment or as set forth herein. The terms applicable to the
assigned portion shall be the same as those in effect for this Option
immediately prior to such assignment and shall be set forth in such documents
issued to the assignee as the Board may deem appropriate.

               4.     DATES OF EXERCISE. The Option shall not be exercisable for
any Option Shares unless a Triggering Event has occurred by the third
anniversary of the Vesting

<PAGE>   86

Commencement Date. If a Triggering Event has occurred by the third anniversary
of the Vesting Commencement Date, the Option shall become exercisable for all of
the Option Shares.

               5.     CESSATION OF SERVICE. The Option term specified in
Paragraph 2 shall terminate (and this Option shall cease to be outstanding)
prior to the Expiration Date in accordance with the following provisions:

                      (i)    Notwithstanding anything herein to the contrary, if
                             a Triggering Event has not occurred by the third
                             anniversary of the Vesting Commencement Date, the
                             option shall immediately terminate and cease to be
                             outstanding.

                      (ii)   Should Optionee cease Service by reason of an
                             Involuntary Termination, then Optionee's right to
                             exercise this Option shall lapse, and this Option
                             shall cease to be outstanding, upon the later of
                             (a) the expiration of the twelve (12) month period
                             measured from the date of Optionee's cessation of
                             Service or (b) the expiration of Optionee's initial
                             five-year employment term as set forth in the
                             Employment Agreement. In no event shall this Option
                             be exercisable at any time after the Expiration
                             Date.

                      (iii)  Should Optionee cease Service by reason of
                             Justification, then to the extent this Option is
                             otherwise exercisable at the time of such cessation
                             of Service, Optionee's right to exercise this
                             Option shall lapse, and this Option shall cease to
                             be outstanding, upon the earlier of (a) the
                             expiration of the twelve (12) month period measured
                             from the date of Optionee's cessation of Service or
                             (b) the expiration of Optionee's initial five-year
                             employment term as set forth in the Employment
                             Agreement. In no event shall this Option be
                             exercisable at any time after the Expiration Date.

                      (iv)   Should Optionee cease Service for any reason other
                             than (a) an Involuntary Termination, (b) a
                             termination for Cause, (c) Optionee's death or
                             Permanent Disability, or (d) Justification, then to
                             the extent this Option is otherwise exercisable at
                             the time of such cessation of Service, Optionee's
                             right

                                       2
<PAGE>   87

                             to exercise this Option shall lapse and this Option
                             cease to be outstanding, upon the earlier of (x)
                             the expiration of the ninety (90) day period
                             measured from the date of Optionee's cessation of
                             Service or (y) the Expiration Date.

                      (v)    Should Optionee's Service be terminated for Cause,
                             then this Option shall immediately terminate and
                             cease to be outstanding.

                      (vi)   Should Optionee cease Service by reason of his
                             death, then the personal representative of
                             Optionee's estate or the person or persons to whom
                             the Option is transferred pursuant to Optionee's
                             will or in accordance with the laws of descent and
                             distribution or, if the Option has been transferred
                             to a trust in accordance with the terms herein, the
                             trustee of such trust, shall have the right to
                             exercise this Option to the extent this Option is
                             otherwise exercisable at the time of such death.
                             Such right shall lapse, and this Option shall cease
                             to be outstanding, upon the earlier of (a) the
                             expiration of the twelve (12) month period measured
                             from the date of Optionee's death or (b) the
                             Expiration Date.

                      (vii)  Should Optionee cease Service by reason of
                             Permanent Disability while this Option is
                             outstanding, then to the extent this Option is
                             otherwise exercisable at the time of such cessation
                             of Service, Optionee's right to exercise this
                             Option shall lapse, and this Option shall cease to
                             be outstanding, upon the later of (a) the
                             expiration of the twelve (12) month period measured
                             from the date of Optionee's cessation of Service or
                             (b) the expiration of Optionee's initial five-year
                             employment term as set forth in the Employment
                             Agreement. In no event shall this Option be
                             exercisable at any time after the Expiration Date.
                             In the event that such Permanent Disability
                             prevents Optionee from personally exercising this
                             Option, this Option may be exercised by Optionee's
                             personal authorized representative to the same
                             extent that Optionee could otherwise exercise this
                             Option.

                                       3
<PAGE>   88

                      (viii) Upon the expiration of the applicable exercise
                             period or (if earlier) upon the Expiration Date,
                             this Option shall terminate and cease to be
                             outstanding for any exercisable Option Shares for
                             which the Option has not otherwise been exercised.

               6.     CORPORATE TRANSACTION

                      (a)    Immediately following a Corporate Transaction, this
Option shall terminate and cease to be outstanding, except to the extent assumed
by the successor corporation (or Parent thereof) in connection with the
Corporate Transaction. The Corporation shall provide Optionee with a minimum of
ten days prior written notice of any Corporate Transaction.

                      (b)    If this Option is assumed in connection with a
Corporate Transaction, then this Option shall be appropriately adjusted,
immediately after such Corporate Transaction, to apply to the number and class
of securities which would have been issuable to Optionee in consummation of such
Corporate Transaction had the Option been exercised immediately prior to such
Corporate Transaction, and appropriate adjustments shall also be made to the
Exercise Price, provided the aggregate Exercise Price shall remain the same.

                      (c)    This Agreement shall not in any way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.

               7.     ADJUSTMENT IN OPTION SHARES. Should any change be made to
the Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the number and/or
class of securities subject to this Option and (ii) the Exercise Price in order
to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.

               8.     STOCKHOLDER RIGHTS. The holder of this Option shall not
have any stockholder rights with respect to the Option Shares until such person
shall have exercised the Option, paid the Exercise Price and become a holder of
record of the purchased shares.

               9.     MANNER OF EXERCISING OPTION.

                      (a)    In order to exercise this Option with respect to
all or any part of the Option Shares for which this Option is at the time
exercisable, Optionee (or any other person or persons exercising the Option)
must take the following actions:

                             (i)    Execute and deliver to the Corporation a
        Notice of Exercise for the number of Option Shares for which the Option
        is exercised.

                                       4
<PAGE>   89

                             (ii)   Pay the aggregate Exercise Price for the
        purchased shares in one or more of the following forms:

                                    (A)    cash or check made payable to the
               Corporation;

                                    (B)    shares of Common Stock held by
               Optionee (or any other person or persons exercising the Option)
               for the requisite period necessary to avoid a charge to the
               Corporation's earnings for financial reporting purposes and
               valued at Fair Market Value on the Exercise Date; or

                                    (C)    through a special sale and remittance
               procedure pursuant to which Optionee (or any other person or
               persons exercising the Option) shall concurrently provide
               irrevocable instructions (a) to a Corporation-designated
               brokerage firm to effect the immediate sale of the purchased
               shares and remit to the Corporation, out of the sale proceeds
               available on the settlement date, sufficient funds to cover the
               aggregate Exercise Price payable for the purchased shares plus
               all applicable federal, state and local income and employment
               taxes required to be withheld by the Corporation by reason of
               such exercise and (b) to the Corporation to deliver the
               certificates for the purchased shares directly to such brokerage
               firm in order to complete the sale.

                      Except to the extent the sale and remittance procedure is
               utilized in connection with the Option exercise, payment of the
               Exercise Price must accompany the Notice of Exercise.

                             (iii)  Furnish to the Corporation appropriate
        documentation that the person or persons exercising the Option (if other
        than Optionee) have the right to exercise this Option.

                             (iv)   Execute and deliver to the Corporation such
        written representations as may be requested by the Corporation in order
        for it to comply with the applicable requirements of federal and state
        securities laws.

                             (v)    Make appropriate arrangements with the
        Corporation (or Parent or Subsidiary employing or retaining Optionee)
        for the satisfaction of all federal, state and local income and
        employment tax withholding requirements applicable to the Option
        exercise.

                      (b)    As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option Shares.

                      (c)    In no event may this option be exercised for any
fractional shares.

                                       5
<PAGE>   90

               10.    LOCK-UP. Optionee agrees that prior to the one-year
anniversary of the commencement of his employment with the Corporation, he will
not sell, make any short sale of, hedge, loan, hypothecate, pledge, grant any
option for the purchase of, or otherwise dispose or transfer for value or
otherwise agree to engage in any of the foregoing transactions with respect to
the Option Shares without the written consent of the Corporation's Board of
Directors.

               11.    COMPLIANCE WITH LAWS AND REGULATIONS. The exercise of this
Option and the issuance of the Option Shares upon such exercise shall be subject
to compliance by the Corporation and Optionee with all applicable requirements
of law relating thereto and with all applicable regulations of any stock
exchange (or the Nasdaq National Market or other national market, if applicable)
on which the Common Stock may be listed for trading at the time of such exercise
and issuance.

               12.    SUCCESSORS AND ASSIGNS. Except to the extent otherwise
provided in Paragraphs 3 and 6, the provisions of this Agreement shall inure to
the benefit of, and be binding upon, the Corporation and its successors and
assigns and Optionee, Optionee's assigns and the legal representatives, heirs
and legatees of Optionee's estate.

               13.    GOVERNING LAW. The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
California without resort to that State's conflict-of-laws rules.

               14.    NOTICES. Any notice required to be given or delivered to
the Corporation under the terms of this Agreement shall be in writing and
addressed to the Corporation at its principal corporate offices. Any notice
required to be given or delivered to Optionee shall be in writing and addressed
to Optionee at the address indicated below Optionee's signature line on the
Grant Notice. All notices shall be deemed effective upon personal delivery or
upon deposit in the U.S. mail, postage prepaid and properly addressed to the
party to be notified.

                                       6
<PAGE>   91

                                    EXHIBIT I

                               NOTICE OF EXERCISE

               I hereby notify ARTISTdirect, Inc. (the "Corporation") that I
elect to purchase ______________ shares of the Corporation's Common Stock (the
"Purchased Shares") at the option exercise price of $ per share (the "Exercise
Price") pursuant to that certain option (the "Option") granted to me on _______,
_______.

               Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price.

____________________, _______
Date

                                             ___________________________________
                                             Optionee

                                             Address: __________________________

                                             ___________________________________

Print name in exact manner it is to
appear on the stock certificate:             ___________________________________

Address to which certificate is to
be sent, if different from address
above:                                       ___________________________________

                                             ___________________________________

Social Security Number:                      ___________________________________

<PAGE>   92

                                    APPENDIX

               The following definitions shall be in effect under the Agreement:

               A.     AGREEMENT shall mean this Stock Option Agreement.

               B.     BOARD shall mean the Corporation's Board of Directors.

               C.     CODE shall mean the Internal Revenue Code of 1986, as
amended.

               D.     COMMON STOCK shall mean the Corporation's common stock.

               E.     CORPORATE TRANSACTION shall mean any of the following
transactions effecting a change in control or ownership of the Corporation:

                      (i)    a stockholder-approved merger or consolidation in
        which securities possessing more than fifty percent (50%) of the total
        combined voting power of the Corporation's outstanding securities are
        transferred to a person or persons different from the persons holding
        those securities immediately prior to such transaction, or

                      (ii)   a stockholder-approved sale, transfer or other
        disposition of all or substantially all of the Corporation's assets, or

                      (iii)  the acquisition, directly or indirectly by any
        person or related group of persons (other than the Corporation or a
        person that directly or indirectly controls, is controlled by, or is
        under common control with, the Corporation), of beneficial ownership
        (within the meaning of Rule 13d-3 of the Securities Exchange Act of
        1934, as amended) of securities possessing more than fifty percent (50%)
        of the total combined voting power of the Corporation's outstanding
        securities pursuant to a tender or exchange offer made directly to the
        Corporation's stockholders.

               F.     CORPORATION shall mean ARTISTdirect, Inc., a Delaware
corporation.

               G.     EMPLOYEE shall mean the Optionee in his capacity as an
employee of the Corporation (or any Parent or Subsidiary), subject to the
control and direction of the employer entity as to both the work to be performed
and the manner and method of performance.

               H.     EMPLOYMENT AGREEMENT shall mean that certain Employment
Agreement dated as of May 31, 2001, between Optionee and the Corporation.

               I.     EXERCISE DATE shall mean the date on which the Option
shall have been exercised in accordance with Paragraph 9 of the Agreement.

               J.     EXERCISE PRICE shall mean the exercise price per share as
specified in the Grant Notice.

               K.     EXPIRATION DATE shall mean the date on which the Option
expires as specified in the Grant Notice.

<PAGE>   93

               L.     FAIR MARKET VALUE per share of Common Stock on any
relevant date, for purposes of Section 9 only, shall be determined in accordance
with the following provisions:

                      (i)    If the Common Stock is at the time traded on the
        Nasdaq National Market, then the Fair Market Value shall be the average
        of the high and low selling prices per share of Common Stock on the date
        in question, as such prices are reported by the National Association of
        Securities Dealers on the Nasdaq National Market (or, if not listed on
        such market, any other national market) and published in The Wall Street
        Journal. If there are no selling prices quoted for the Common Stock on
        the date in question, then the Fair Market Value shall be the average of
        the high and low selling prices on the last preceding date for which
        such quotations exist.

                      (ii)   If the Common Stock is at the time listed on any
        Stock Exchange, then the Fair Market Value shall be the average high and
        low selling prices per share of Common Stock on the date in question on
        the Stock Exchange determined by the Compensation Committee to be the
        primary market for the Common Stock, as such prices are officially
        quoted in the composite tape of transactions on such exchange and
        published in The Wall Street Journal. If there are no selling prices
        quoted for the Common Stock on the date in question, then the Fair
        Market Value shall be the average of the high and low selling prices on
        the last preceding date for which such quotations exist.

               N.     GRANT DATE shall mean the date of grant of the Option as
specified in the Grant Notice.

               O.     GRANT NOTICE shall mean the Notice of Grant of Stock
Option accompanying the Agreement, pursuant to which Optionee has been informed
of the basic terms of the Option evidenced hereby.

               P.     INVOLUNTARY TERMINATION shall mean the termination of
Optionee's Service by reason of:

                      (i)    Optionee's involuntary dismissal or discharge by
        the Corporation for reasons other than (X) for Cause, as defined in the
        Employment Agreement, or (Y) by reason of death or Permanent Disability,
        or

                      (ii)   Optionee's resignation for Good Reason, as defined
        in the Employment Agreement.

               Q.     JUSTIFICATION shall have the meaning given such term in
the Employment Agreement.

               R.     NON-QUALIFIED OPTION shall mean an option not intended to
satisfy the requirements of Code Section 422.

               S.     NOTICE OF EXERCISE shall mean the written notice of
exercise in the form attached hereto as Exhibit I.

<PAGE>   94

               T.     OPTION SHARES shall mean the number of shares of Common
Stock subject to the option as specified in the Grant Notice.

               U.     OPTIONEE shall mean the person to whom the Option is
granted as specified in the Grant Notice.

               V.     PARENT shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations ending with the Corporation,
provided each corporation in the unbroken chain (other than the Corporation)
owns, at the time of the determination, stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

               W.     PERMANENT DISABILITY shall mean the inability of Optionee
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which is expected to result in death
or has lasted or can be expected to last for a continuous period of twelve (12)
months or more.

               X.     SERVICE shall mean the Optionee's performance of services
for the Corporation (or any Parent or Subsidiary) in the capacity of an
Employee, a non-employee member of the board of directors or an independent
consultant.

               Y.     STOCK EXCHANGE shall mean the American Stock Exchange or
the New York Stock Exchange.

               Z.     SUBSIDIARY shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in the
unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.

               AA.    TRIGGERING EVENT shall have the meaning given such term in
the Grant Notice.

<PAGE>   95

                                    EXHIBIT B

                        PROSPECTUS FOR STOCK OPTION GRANT

<PAGE>   96

                               ARTISTDIRECT, INC.

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

                                   PROSPECTUS

                                       FOR

                           SPECIAL STOCK OPTION GRANT

                             MR. FREDERICK W. FIELD

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

                                     The date of this Prospectus is May 31, 2001

<PAGE>   97

                                TABLE OF CONTENTS

                                                                         PAGE
                                                                         ----

INFORMATION ON STOCK OPTION GRANT...........................................1
         Introduction.......................................................1
         Exercise Price.....................................................1
         Changes in Capitalization..........................................1
         Exercise and Vesting of Option.....................................1
         Early Termination of Option........................................3
         Corporate Transaction..............................................4
         Transferability of Common Stock....................................4
         Limitations on Transactions Involving Common Stock.................5
         Stockholder Rights and Option Assignability........................5
         Amendment/Termination..............................................5
         Compliance with Applicable Laws....................................5
         Miscellaneous......................................................5

RESTRICTIONS ON RESALE......................................................6
         Section 16.........................................................6
         Reporting Requirements.............................................6
         Rule 144...........................................................7

FEDERAL TAX CONSEQUENCES....................................................7

CORPORATION INFORMATION AND ANNUAL INFORMATION..............................9

<PAGE>   98

THIS DOCUMENT CONSTITUTES PART OF THE OFFICIAL PROSPECTUS COVERING SECURITIES
THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.

                                  INFORMATION
                                       ON
                               STOCK OPTION GRANT

     ARTISTdirect, Inc., a corporation organized and existing under the laws of
the State of Delaware ("the Corporation"), is offering shares of its common
stock to Mr. Frederick W. Field pursuant to a special stock option grant (the
"Special Level Two Option") made to him on May 31, 2001 to induce him to serve
as the Corporation's Chief Executive Officer and Chairman of the Board.

INTRODUCTION

     The Special Level Two Option granted to Mr. Field was authorized by the
Corporation's Board of Directors (the "Board") and provides him with the right
to purchase up to 665,220 shares of the Corporation's common stock (the "Common
Stock"). The grant is intended to provide Mr. Field with a meaningful incentive
to serve as the Corporation's Chief Executive Officer and Chairman of the Board.

     The Special Level Two Option is a nonstatutory stock option ("Nonstatutory
Option") not intended to satisfy the requirements of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). The federal income tax
consequences applicable to such a Nonstatutory Option are summarized in the
section below entitled "Federal Tax Consequences."

     Upon exercise of the Special Level Two Option, Mr. Field will receive
shares of Common Stock made available either from authorized but unissued shares
of Common Stock or from shares of Common Stock reacquired by the Corporation,
including shares repurchased on the open market.

     Unless the context indicates otherwise, all references to the Corporation
in this document include ARTISTdirect, Inc. and its parent and subsidiary
corporations, whether now existing or subsequently established.

EXERCISE PRICE

     The exercise price per share of Common Stock subject to the Special Level
Two Option is $0.75. The fair market value per share of Common Stock on the May
31, 2001 grant date was $0.64 per share, based on the last reported sale price
on The Nasdaq National Market.

CHANGES IN CAPITALIZATION

     Should any change be made to the outstanding Common Stock by reason of any
stock split, stock dividend, recapitalization, combination of shares, exchange
of shares or other change affecting the outstanding Common Stock as a class
without the Corporation's receipt of consideration, then appropriate adjustments
will be made to the number and/or class of securities and price per share in
effect under the Special Level Two Option in order to preclude the dilution or
enlargement of his rights and benefits thereunder.

EXERCISE AND VESTING OF OPTION

     The Special Level Two Option will not be exercisable unless one of the
following events occurs prior to the third anniversary of the Vesting
Commencement Date set forth in the Notice of Grant pertaining to the Special
Level Two Option, in which event Mr. Field will acquire a vested interest in,
and the Special Level Two Option will become fully exercisable with respect to,
all of the option shares: (i) the 30-day average closing sale price of the
Corporation's common stock or the consideration paid per share in an acquisition
of the Corporation reaches a minimum of $7.00 per share (subject to adjustment
for stock splits and the like); (ii) the Corporation's common stock is re-listed
on The Nasdaq National Market following a de-listing; (iii) a Corporate
Transaction

<PAGE>   99

occurs; or (iv) Mr. Field's service with the Corporation ceases pursuant to an
Involuntary Termination (each a "Level Two Triggering Event"). If no Level Two
Triggering Event has occurred by the third anniversary of the Vesting
Commencement Date, then the Special Level Two Option will terminate and no
option shares will vest or become exercisable.

     The Special Level Two Option may be exercised, for any or all shares for
which the option is at the time exercisable, upon delivery of a completed Notice
of Exercise (which is attached to Mr. Field's Stock Option Agreement) to the
Corporation's Chief Financial Officer at the Corporation's principal offices.
The Notice of Exercise must specify the number of shares to be purchased under
the option and must also be accompanied by payment of the applicable exercise
price and appropriate proof that the person exercising such option (if other
than Mr. Field) has the right to effect such exercise. The option will be deemed
to be exercised at the time of the Corporation's receipt of such notice and
payment.

     The exercise price is payable immediately upon exercise of the option and
may be paid in cash or check payable to the Corporation or in shares of Common
Stock held for the requisite period necessary to avoid a charge to the
Corporation's reported earnings (generally a six (6)-month period) and valued at
Fair Market Value on the exercise date.

          For valuation purposes, the FAIR MARKET VALUE of the Common Stock will
     be determined as follows:

          (i) If the Common Stock is at the time traded on The Nasdaq National
     Market, then the Fair Market Value shall be the average of the high and low
     selling prices per share of Common Stock on the date in question, as such
     prices are reported by the National Association of Securities Dealers on
     The Nasdaq National Market (or, if not listed on such market, any other
     national market) and published in The Wall Street Journal. If there are no
     selling prices quoted for the Common Stock on the date in question, then
     the Fair Market Value shall be the average of the high and low selling
     prices on the last preceding date for which such quotations exist; or

          (ii) If the Common Stock is at the time listed on any stock exchange,
     then the Fair Market Value shall be the average high and low selling prices
     per share of Common Stock on the date in question on the Stock Exchange
     determined by the Corporation's Compensation Committee to be the primary
     market for the Common Stock, as such prices are officially quoted in the
     composite tape of transactions on such exchange and published in The Wall
     Street Journal. If there are no selling prices quoted for the Common Stock
     on the date in question, then the Fair Market Value shall be the average of
     the high and low selling prices on the last preceding date for which such
     quotations exist.

     Cashless exercises are also permitted. To use this procedure, Mr. Field
must provide irrevocable instructions to a Corporation-designated brokerage firm
to effect the immediate sale of the shares purchased under the option and to pay
over to the Corporation, out of the sale proceeds available on the settlement
date, sufficient funds to cover the aggregate exercise price payable for the
purchased shares plus all applicable withholding taxes. Concurrently with such
instructions, Mr. Field must also direct the Corporation to deliver the
certificate for the purchased shares directly to the brokerage firm in order to
complete the sale transaction.

     The Special Level Two Option will have a maximum term of seven (7) years
measured from the May 31, 2001 grant date, subject to earlier termination if no
Level Two Triggering Event has occurred by the third anniversary of the Vesting
Commencement Date, or upon Mr. Field's cessation of service.

                                       2
<PAGE>   100

EARLY TERMINATION OF OPTION

     Upon his cessation of service for any reason other than death, Permanent
Disability, Cause, an Involuntary Termination or Justification, Mr. Field will
have a ninety (90) day period during which to exercise the Special Level Two
Option, to the extent that the option is otherwise exercisable as of the date
his employment ends. In no event, however, may the Special Level Two Option be
exercised after the May 30, 2008 expiration date of the option term.

     The Special Level Two Option will immediately terminate if Mr. Field's
employment is terminated for Cause (as defined in the employment agreement dated
as of May 31, 2001 between the Corporation and Mr. Field (the "Employment
Agreement")), or if no Level Two Triggering Event has occurred by the third
anniversary of the Vesting Commencement Date.

     Should Mr. Field die while holding the Special Level Two Option, the
personal representative of his estate or the person or persons to whom the
option is transferred by the provisions of his will or the laws of inheritance
following his death may exercise the option, to the extent that the option is
otherwise exercisable at the time of his death. The right to exercise the option
will lapse upon the earlier of (i) the May 30, 2008 expiration date of the
option term or (ii) the expiration of the twelve (12) month period measured from
the date of Mr. Field's death.

     If Mr. Field ceases service with the Corporation as a result of an
Involuntary Termination or a Permanent Disability, then he will have until the
later of (i) the expiration of the twelve (12) month period measured from his
termination date or (ii) the expiration of his initial five (5) year employment
term as set forth in his Employment Agreement, to exercise the Special Level Two
Option, to the extent that the option is otherwise exercisable as of the date of
such cessation of service with the Corporation. In no event, however, may the
option be exercised after the May 30, 2008 expiration date of the option term.

          For purposes of the Special Level Two Option, Mr. Field will be deemed
     to have a PERMANENT DISABILITY if he is unable to perform any substantial
     gainful activity by reason of any medically-determinable physical or mental
     impairment that is expected to result in death or has lasted or can be
     expected to last for a continuous period of twelve (12) months or more. If
     a Permanent Disability prevents Mr. Field from personally exercising the
     Special Level Two Option, it may be exercised by Mr. Field's personal
     authorized representative to the same extent that he could otherwise
     exercise the Special Level Two Option himself.

          For purposes of the Special Level Two Option, an INVOLUNTARY
     TERMINATION will be deemed to occur upon the termination of Mr. Field's
     employment with the Corporation by reason of:

          (i) his involuntary dismissal or discharge by the Corporation for
     reasons other than (x) for Cause (as defined in his Employment Agreement)
     or (y) by reason of death or having a Permanent Disability, or

          (ii) his resignation for Good Reason (as defined in his Employment
     Agreement).

     If Mr. Field ceases service with the Corporation by reason of JUSTIFICATION
(as defined in his Employment Agreement), then he will have until the earlier of
(i) the expiration of the twelve (12) month period measured from his termination
date or (ii) the expiration of his initial five (5) year employment term as set
forth in his Employment Agreement, to exercise the Special Level Two Option, to
the extent that the option is otherwise exercisable as of the date of such
cessation of service with the Corporation. In no event, however, may the option
be exercised after the May 30, 2008 expiration date of the option term.

     For purposes of the Special Level Two Option, Mr. Field will be deemed to
continue in service for so long as he renders services to the Corporation,
whether as (i) an employee, subject to the control and direction of the employer
entity as to both the work to be performed and the manner and method of
performance, (ii) a non-employee Board member or (iii) independent consultant.

                                       3
<PAGE>   101

CORPORATE TRANSACTION

     In the event of a Corporate Transaction prior to the third anniversary of
the Vesting Commencement Date, Mr. Field will acquire a vested interest in, and
the Special Level Two Option will become fully exercisable with respect to, all
of the option shares immediately prior to the effective date of the Corporate
Transaction. The Corporation is required to provide Mr. Field with a minimum of
ten days prior written notice of any Corporate Transaction.

     Upon the consummation of such Corporate Transaction, the Special Level Two
Option will terminate and cease to be outstanding, except to the extent assumed
by the successor corporation. If the Special Level Two Option is assumed in
connection with a Corporate Transaction, then the option will be appropriately
adjusted, immediately after such Corporate Transaction, to apply to the number
and class of securities which would have been issuable to Mr. Field in
consummation of such Corporate Transaction had the Special Level Two Option been
exercised immediately prior to such Corporate Transaction, and appropriate
adjustments shall also be made to the Exercise Price, provided the aggregate
Exercise Price is required to remain the same.

          For purposes of the Special Level Two Option, a CORPORATE TRANSACTION
     will be deemed to occur upon:

          (i) a stockholder-approved merger or consolidation in which securities
     possessing more than fifty percent (50%) of the total combined voting power
     of the Corporation's outstanding securities are transferred to a person or
     persons different from the persons holding those securities immediately
     prior to such transaction, or

          (ii) a stockholder-approved sale, transfer or other disposition of all
     or substantially all of the Corporation's assets, or

          (iii) the acquisition, directly or indirectly by any person or related
     group of persons (other than the Corporation or a person that directly or
     indirectly controls, is controlled by, or is under common control with, the
     Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of
     the Exchange Act of 1934, as amended (the "1934 Act")) of securities
     possessing more than fifty percent (50%) of the total combined voting power
     of the Corporation's outstanding securities pursuant to a tender or
     exchange offer made directly to the Corporation's stockholders.

     The Special Level Two Option will not affect the right of the Corporation
to adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.

TRANSFERABILITY OF COMMON STOCK

     The shares of Common Stock issuable upon exercise of the Special Level Two
Option are considered restricted securities under the securities laws and
therefore are subject to certain transfer restrictions. These restrictions are
discussed in the section entitled "Restrictions on Resale" at the end of this
document. However, the Corporation has agreed to use all reasonable efforts to
register Mr. Field's option shares on a Form S-8 with the Securities and
Exchange Commission (the "SEC") (and under any state securities laws as
reasonably requested by Mr. Field), and to keep such registration statement on
Form S-8 effective until all of the options granted to him have been exercised
in full or have expired. Under an effective registration statement, the vested
shares of Common Stock may be freely transferred by Mr. Field, subject only to
the restriction discussed below in the section entitled "Limitations on
Transactions Involving Common Stock" and the Rule 144 restrictions discussed in
the section entitled "Restrictions on Resale" at the end of this document.

                                       4
<PAGE>   102

LIMITATIONS ON TRANSACTIONS INVOLVING COMMON STOCK

     Prior to the one-year anniversary of the commencement of his employment
with the Corporation, Mr. Field may not sell, make any short sale of, hedge,
loan, hypothecate, pledge, grant any option for the purchase of, or otherwise
dispose or transfer for value or otherwise agree to engage in any of the
foregoing transactions with respect to any Common Stock purchased pursuant to
the Special Level Two Option, unless he first obtains the written consent of the
Corporation's Board.

STOCKHOLDER RIGHTS AND OPTION ASSIGNABILITY

     Mr. Field is not to have any stockholder rights with respect to the option
shares until he has exercised the Special Level Two Option, paid the exercise
price for the purchased shares, and become a holder of record of the purchased
shares. The Special Level Two Option may be assigned in whole or in part by Mr.
Field during his lifetime, but only to the extent such assignment is, in
connection with his estate plan, made to one or more members of his immediate
family or to a trust established exclusively for such family members. The
assigned portion may only be exercised by the person or persons who acquire a
proprietary interest in the option pursuant to the assignment.

AMENDMENT/TERMINATION

     No amendment or modification which affects Mr. Field's rights and
obligations under the Special Level Two Option may be made without his consent.

COMPLIANCE WITH APPLICABLE LAWS

     The issuance of the shares of Common Stock purchasable under the Special
Level Two Option is subject to the Corporation's procurement of all approvals
and permits required by regulatory authorities having jurisdiction over those
shares. It is possible that the Corporation could be prevented from issuing
shares of Common Stock under the Special Level Two Option in the event one or
more required approvals or permits were not obtained.

MISCELLANEOUS

     The Special Level Two Option will not adversely affect or otherwise impair
the right of the Corporation to terminate Mr. Field's employment with the
Corporation in accordance with the provisions of any applicable employment
agreement or law. In addition, the Special Level Two Option will not limit the
authority of the Corporation to grant additional options pursuant to any other
equity incentive arrangements of the Corporation, or to grant options to, or
assume the options of, any person in connection with the acquisition of the
business and assets of any firm, company or other business entity.

     A corporation will be treated as the parent corporation of ARTISTdirect,
Inc. if such corporation owns, directly or indirectly, stock possessing fifty
percent (50%) or more of the total combined voting power of ARTISTdirect's
outstanding securities.

     A corporation will be deemed to be a subsidiary of ARTISTdirect, Inc. if
ARTISTdirect owns, directly or indirectly, stock possessing fifty percent (50%)
or more of the total combined voting power of the outstanding securities of that
corporation.

     The Special Level Two Option is not subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA) or Section 401(a) of the
Code.

                                       5
<PAGE>   103

                             RESTRICTIONS ON RESALE

     Executive officers such as Mr. Field who receive option grants such as the
Special Level Two Option will be subject to certain restrictions under the
federal securities laws with respect to their option transactions. These
restrictions may be summarized as follows:

SECTION 16

     Section 16(b) of the 1934 Act requires the Corporation to recover any
profit realized by any officer, Board member or beneficial owner of more than
ten percent (10%) of the outstanding Common Stock (a "Section 16 Insider") from
any purchase and sale, or sale and purchase, of such Common Stock made within a
period of less than six (6) months.

     The SEC has issued a series of rules under Section 16(b) of the 1934 Act
which govern the short-swing liability treatment of certain transactions
effected by a Section 16 Insider with respect to equity incentives such as stock
options. The application of the rules to the Special Level Two Option may be
summarized as follows.

     Option Grant. The receipt of the Special Level Two Option will not be
treated as a "purchase" of the underlying option shares for short-swing
liability purposes.

     Option Exercise. The exercise of the option will be an exempt transaction
and will not be treated as a "purchase" of the acquired shares for short-swing
liability purposes.

     Delivery of Shares. The delivery of shares of Common Stock in payment of
the exercise price will be an exempt transaction for short-swing liability
purposes.

     Stock Withholding. The withholding of a portion of the shares of Common
Stock otherwise issuable to Mr. Fields by the Corporation in satisfaction of the
withholding taxes incurred in connection with the exercise of the Special Level
Two Option will be an exempt transaction for short-swing liability purposes if
such withholding is approved by the entire Board, either at the time of the
option exercise or at any earlier time. The delivery of shares of Common Stock
out of Mr. Field's existing investment portfolio in satisfaction of the
applicable tax withholding liability will be an exempt transaction for
short-swing liability purposes if approved by the entire Board.

     Sale of Shares. The sale of shares acquired under the Special Level Two
Option will be treated as a "sale" for short-swing liability purposes and will
be matched with any non-exempt purchases of Common Stock (e.g., open-market
purchases) made within six (6) months before or after the date of such sale.

REPORTING REQUIREMENTS

     The receipt of the Special Level Two Option must be reported by Mr. Field
on the annual Form 5 required to be filed by the such individual within
forty-five (45) days after the close of the Corporation's fiscal year in which
such option is granted but may be reported on any earlier-filed Form 4. However,
the receipt of an option grant must in all events be reported on or before the
due date for the Form 4 in which the exercise of that option must be reported.

     The exercise of the Special Level Two Option must be reported on a Form 4
filed within ten (10) days after the close of the calendar month in which such
exercise occurs. If the exercise price is paid with shares of Common Stock, then
the disposition of those shares should also be reported on the same Form 4.

     The sale of Common Stock must be reported on a Form 4 filed within ten (10)
days after the close of the calendar month in which the sale is effected.

                                       6
<PAGE>   104

RULE 144

     In general, persons such as Mr. Field having power to manage and direct the
policies of the Corporation, or their relatives and trusts, estates,
corporations or other entities controlled by any of those persons may be deemed
to be affiliates of the Corporation. Affiliates of the Corporation are obligated
to resell their shares of Common Stock in compliance with SEC Rule 144. This
rule requires such sales to be effected in "brokers' transactions," as defined
in the rule, and a written notice of each sale must be filed with the SEC at the
time of such sale. In addition, the rule requires that the Corporation must have
filed all reports required to be filed under the periodic reporting requirements
of the 1934 Act during the 12 months preceding the sale. Lastly, the rule limits
the number of shares which may be sold in any three (3)-month period to the
greater of (i) one percent (1%) of the outstanding shares of Common Stock or
(ii) the average weekly reported volume of trading in such shares on all
securities exchanges during the four (4) calendar weeks preceding the filing of
the required notice of proposed sale. However, assuming that the shares of
Common Stock acquired by Mr. Field under the Special Level Two Option are
registered on a Form S-8 with the SEC, there will be no holding period
requirements of Rule 144 applicable to any such shares.

                            FEDERAL TAX CONSEQUENCES

     The following is a general description of the federal income tax
consequences of the Nonstatutory Option granted to Mr. Field. However, Mr. Field
should consult with his own tax advisor with respect to the actual tax treatment
of the Special Level Two Option.

     Option Grant. No taxable income is recognized upon receipt of the Special
Level Two Option.

     Option Exercise. If Mr. Field exercises the Special Level Two Option, he
will recognize ordinary income in the year in which he exercises in an amount
equal to the excess of (i) the fair market value of the purchased shares on the
exercise date over (ii) the exercise price paid for those shares. This income
will be reported by the Corporation on Mr. Field's Form W-2 wage statement for
the year of exercise, and the Corporation will have to collect all the
applicable withholding taxes with respect to such income.

     Sale or Other Disposition of Shares. Upon the sale or other taxable
disposition of the shares of Common Stock purchased under the Special Level Two
Option, Mr. Field will recognize capital gain equal to the excess of (i) the
amount realized upon such sale over (ii) the fair market value of the shares at
the time Mr. Field recognized the ordinary income with respect to their
acquisition. A capital loss will result if the amount realized upon the sale is
less than such fair market value.

     The gain or loss will be long-term if the shares are held for more than one
(1) year prior to such sale or disposition. Mr. Field's holding period will
start at the time the Special Level Two Option is exercised.

     Delivery of Shares. If Mr. Field pays the exercise price with shares of
Common Stock, then he will not recognize any taxable income to the extent that
the number of shares of Common Stock received upon the exercise of the option
equals the number of shares of Common Stock delivered in payment of the exercise
price. For federal income tax purposes, these newly-acquired shares will have
the same basis and holding period as the delivered shares. The additional shares
of Common Stock received upon the exercise of the option will have to be
reported as ordinary income for the year of exercise in an amount equal to their
fair market value on the exercise date. The shares will have a tax basis equal
to such fair market value, and their holding period will be measured from the
exercise date.

     Employer Deduction. Generally, the Corporation will be entitled to an
income tax deduction equal to the amount of ordinary income recognized by Mr.
Field in connection with the exercise of the Special Level Two Option. The
deduction will, in general, be allowed for the taxable year of the Corporation
in which the ordinary income is recognized by Mr. Field. Due to the limitations
imposed by Code Section 162(m), the Corporation will not be allowed to deduct
compensation (including the income that is recognized by reason of the exercise
of the

                                       7
<PAGE>   105

Special Level Two Option) paid to Mr. Field in excess of $1,000,000 unless Mr.
Field is not a "covered employee" (as defined in Code Section 162(m)) at the end
of the year in which the exercise occurs.

     Change in Control. If there is a change in control of the Corporation
(e.g., as the result of a merger of the Corporation with another corporation),
and, as a result, the Special Level Two Option becomes exercisable, this
acceleration is generally treated as a "parachute payment" for federal income
tax purposes. If the present value of all of Mr. Field's parachute payments
equals three times his average compensation for each of the past five years, he
will be subject to a 20% excise tax on the amount of the parachute payments he
receives in excess of his average annual compensation ("Excess Parachute
Payment"). In addition, the Corporation cannot deduct that Excess Parachute
Payment.

     Federal Tax Rates. Effective for the 2001 calendar year, ordinary income in
excess of $297,300 ($148,650 for a married taxpayer filing a separate return)
will be subject to the maximum federal income tax rate of 39.1%. The applicable
$297,300 or $148,650 threshold is subject to cost-of-living adjustments in
taxable years beginning after December 31, 2001. Certain limitations are imposed
upon a taxpayer's itemized deductions, and the personal exemptions claimed by
the taxpayer are subject to phase-out. These limitations may result in the
taxation of ordinary income at an effective top marginal rate in excess of
39.1%.

     Short-term capital gains are subject to the same tax rates as ordinary
income. Long-term capital gain is subject to a maximum federal income tax rate
of 20%, provided the capital asset is held for more than one (1) year prior to
sale or other taxable disposition.

     Beginning with the 2001 calendar year, capital gain recognized on the sale
or disposition of capital assets held for more than five (5) years by
individuals whose tax rate on ordinary income for the year of such sale or
disposition is below 28% will be subject to tax at a rate of 8%.

     Beginning in 2006, capital gain recognized on the sale or disposition of
capital assets held for more than five (5) years by individuals whose tax rate
on ordinary income for the year of such sale or disposition is 28% or more will
be taxed at a rate of 18%, provided the holding period for such property begins
after December 31, 2000.

     For the tax year ending December 31, 2001, itemized deductions are reduced
by 3% of the amount by which the taxpayer's adjusted gross income for the year
exceeds $132,950 ($66,475 for a married taxpayer filing a separate return).
However, the reduction may not exceed 80% of the total itemized deductions
(excluding medical expenses, casualty and theft losses, and certain investment
interest expense) claimed by the taxpayer. The applicable $132,950 or $66,475
threshold is subject to cost-of-living adjustments in taxable years beginning
after December 31, 2001.

     In addition, the deduction for personal exemptions claimed by the taxpayer
is reduced by 2% for each $2,500 ($1,250 for a married taxpayer filing a
separate return) or fraction thereof by which the taxpayer's adjusted gross
income for the year exceeds a specified threshold amount. The applicable
thresholds for 2001 are $199,450 for married taxpayers filing joint returns (and
in certain instances, surviving spouses), $166,200 for heads of households,
$132,950 for single taxpayers and $99,725 for married taxpayers filing separate
returns. Accordingly, the deduction is completely eliminated for any taxpayer
whose adjusted gross income for the year exceeds the applicable threshold amount
by more than $122,500 (or $61,250 for a married taxpayer filing a separate
return). The threshold amounts will be subject to cost-of-living adjustments in
taxable years beginning after December 31, 2001.

                                       8
<PAGE>   106

     The Economic Growth and Tax Relief Reconciliation Act of 2001 has lowered
the Federal tax rates which were in effect for the 2000 taxable year as follows:

<TABLE>
<CAPTION>
                                                 THE CORRESPONDING PERCENTAGES SHALL BE
                                                SUBSTITUTED FOR THE FOLLOWING PERCENTAGES:
 IN THE CASE OF TAXABLE YEARS            -------------------------------------------------------
BEGINNING DURING CALENDAR YEAR:          28.0%            31.0%            36.0%           39.6%
-------------------------------          -----            -----            -----           -----
<S>                                      <C>              <C>              <C>             <C>

2001..............................       27.5%            30.5%            35.5%           39.1%

2002 and 2003.....................       27.0%            30.0%            35.0%           38.6%

2004 and 2005.....................       26.0%            29.0%            34.0%           37.6%

2006 and thereafter...............       25.0%            28.0%            33.0%           35.0%
</TABLE>

                 CORPORATION INFORMATION AND ANNUAL INFORMATION

     ARTISTdirect, Inc. is a Delaware corporation which maintains its principal
executive offices at 5670 Wilshire Blvd., Suite 200, Los Angeles, CA 90036. The
telephone number at the executive offices is (323) 634-4000. Further information
concerning the Special Level Two Option grant made to Mr. Field may be obtained
from the Corporation at this address or telephone number.

     A copy of the Corporation's Annual Report to Stockholders for the current
fiscal year will be furnished to Mr. Field, and additional copies will be
furnished, without charge, upon written or oral request to the Corporate
Secretary, ARTISTdirect, Inc., 5670 Wilshire Blvd., Suite 200, Los Angeles, CA
90036, or upon telephoning the Corporation at (323) 634-4000. In addition, Mr.
Field may obtain without charge, upon written or oral request to the
Corporation's Secretary, a copy of any of the documents listed below, which are
hereby incorporated by reference into this Prospectus, other than certain
exhibits to such documents:

     (a)  The Corporation's Annual Report on Form 10-K for the fiscal year ended
          December 31, 2000 filed with the SEC on April 2, 2001, and further
          amended on Form 10-K/A filed with the SEC on April 30, 2001;

     (b)  The Corporation's Quarterly Report on Form 10-Q for the fiscal quarter
          ended June 30, 2001 filed with the SEC on August 14, 2001;

     (c)  The Corporation's Definitive Proxy Statement filed with the SEC on
          June 11, 2001, pursuant to Section 14(a) of the 1934 Act;

     (d)  The Corporation's Quarterly Report on Form 10-Q for the fiscal quarter
          ended March 31, 2001 filed with the SEC on May 15, 2001; and

     (e)  The Corporation's Registration Statement No. 000-30063 on Form 8-A12G
          filed with the SEC on March 22, 2000, pursuant to Section 12(b) of the
          1934 Act, in which there is described the terms, rights and provisions
          applicable to the Corporation's outstanding Common Stock.

     The Corporation will also deliver to Mr. Field a copy of all reports, proxy
statements and other communications distributed to the Corporation's
stockholders.

                                       9

<PAGE>   107

                                    EXHIBIT 4

               California Labor Code Sections 2870, 2871 and 2872

SECTION 2870

(a)     Any provision in an employment agreement which provides that an employee
shall assign, or offer to assign, any of his or her rights in an invention to
his or her employer shall not apply to an invention that the employee developed
entirely on his or her own time without using the employer's equipment,
supplies, facilities, or trade secret information except for those inventions
that either:

        (1)   Relate at the time of conception or reduction to practice of the
              invention to the employer's business, or actual or demonstrably
              anticipated research or development of the employer; or

        (2)   Result from any work performed by the employee for the employer.

(b)     To the extent a provision in an employment agreement purports to require
an employee to assign an invention otherwise excluded from being required to be
assigned under subdivision (a), the provision is against the public policy of
this state and is unenforceable.

SECTION 2871

No employer shall require a provision made void and unenforceable by Section
2870 as a condition of employment or continued employment. Nothing in this
article shall be construed to forbid or restrict the right of an employer to
provide in contracts of employment for disclosure, provided that any such
disclosures be received in confidence, of all of the employee's inventions made
solely or jointly with others during the term of his or her employment, a review
process by the employer to determine such issues as may arise, and for full
title to certain patents and inventions to be in the United States, as required
by contracts between the employer and the United States or any of its agencies.

SECTION 2872

If an employment agreement entered into after January 1, 1980, contains a
provision requiring the employee to assign or offer to assign any of his or her
rights in any invention to his or her employer, the employer must also, at the
time the agreement is made, provide a written notification to the employee that
the agreement does not apply to an invention which qualifies fully under the
provisions of Section 2870. In any suit or action arising thereunder, the burden
of proof shall be on the employee claiming the benefits of its provisions.

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