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                                                                 EXHIBIT 10.1(a)


                                  VITALCOM INC.
                             1993 STOCK OPTION PLAN
                       (AS AMENDED AND RESTATED JUNE 1999)

         1. Purposes of the Plan.

                  The purposes of this 1993 Stock Option Plan (the "Plan") of
VITALCOM INC., a Delaware corporation (the "Company"), are (a) to insure the
retention of the services of existing executive personnel, key employees and
directors of the Company and its subsidiaries or its affiliates; (b) to attract
and retain competent new executive personnel and key employees; and (c) to
provide incentive to all such personnel and employees to devote their utmost
effort and skill to the advancement and betterment of the Company, by permitting
them to participate in the ownership of the Company and thereby in the success
and increased value of the Company.

         1. Shares Subject to the Plan.

                  The shares of stock subject to the incentive options having
the terms and conditions set forth in Section 6 below (hereinafter "incentive
options") and/or nonqualified options having the terms and conditions set forth
in Section 7 below (hereinafter "nonqualified options") and other provisions of
the Plan shall be shares of the Company's authorized but unissued or reacquired
Common Stock (herein sometimes referred to as the "Common Stock"). The total
number of shares of the Common Stock of the Company which may be issued under
the Plan shall not exceed, in the aggregate, 2,339,885 shares. The limitations
established by the preceding sentence shall be subject to adjustment as provided
in Section 8 below. In the event that any outstanding incentive option or
nonqualified option granted under the Plan can no longer under any circumstances
be exercised, for any reason, the shares of Common Stock allocable to the
unexercised portion of such incentive option or nonqualified option may again be
subject to grant or issuance under the Plan.

         2. Eligibility.

                  a. Incentive Options. Officers and other key employees of the
Company or of any subsidiary corporation (including directors if they are also
employees of the Company or a subsidiary), as may be determined by the Board or
the Committee, who qualify for incentive stock options under the applicable
provisions of the Internal Revenue Code, will be eligible for selection to
receive incentive stock options under the Plan. An employee who has been granted
an incentive option may, if otherwise eligible, be granted a nonqualified option
or options or an additional incentive option or options if the Board or
Committee shall so determine.

                  b. Nonqualified Options. Officers, other key employees of the
Company or of any subsidiary corporation, directors and consultants to the
Company or any subsidiary corporation will be eligible to receive nonqualified
options under the Plan. An individual who has been granted a nonqualified option
may, if otherwise eligible, be granted an incentive option or options or an
additional nonqualified option or options if the Board or Committee shall so
determine.

                  c. Limitations. The following limitations shall apply to
grants of options to employees of the Company:

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                           i. No employee of the Company shall be granted, in
any fiscal year of the Company, options to purchase more than 400,000 shares of
Common Stock of the Company.

                           ii. In connection with his or her initial employment,
an employee of the Company may be granted options to purchase up to an
additional 400,000 shares of Common Stock of the Company which shall not count
against the limit set forth in subsection i. above.

                           iii. The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 8.

                           iv. If an option is canceled in the same fiscal year
of the Company in which it was granted (other than in connection with a
transaction described in Section 8), the canceled option will be counted against
the limits set forth in subsections i. and ii. above. For this purpose, if the
exercise price of an option is reduced, the transaction will be treated as a
cancellation of the option and the grant of a new option.

         3. Administration of the Plan.

                  a. This Plan shall be administered by a committee (the
"Committee") of "non-employee directors" within the meaning of Rule 16b-3 of the
Securities Exchange Act of 1934, as amended. Such Committee shall be appointed
by, and serve at the pleasure of, the Board of Directors.

                  b. The Committee shall have full and final authority to
determine the persons to whom, and the time or times at which, incentive options
or nonqualified options shall be granted, the number of shares to be represented
by each incentive option and nonqualified option and the consideration to be
received by the Company upon the exercise thereof; to interpret the Plan; to
establish, amend and rescind rules and regulations relating to the Plan; to
determine the form and content of the incentive options or nonqualified options
to be granted under the Plan; to determine the identity or capacity of any
persons who may be entitled to exercise a participant's rights under any
incentive option or nonqualified option under the Plan; to correct any defect or
supply any omission or reconcile any inconsistency in the Plan or in any
incentive option or nonqualified option in the manner and to the extent the
Board or Committee deems desirable to carry the Plan, incentive option or
nonqualified option into effect; to accelerate the exercise date of any
incentive option or nonqualified option; to provide for an option to the Company
to repurchase any shares issued upon exercise of an option upon termination of
employment; and to make all other determinations necessary or advisable for the
administration of the Plan, but only to the extent not contrary to the express
provisions of the Plan. Any action, decision, interpretation or determination by
the Committee with respect to the application or administration of the Plan
shall be final and binding on all participants and prospective participants.

         4. Option Price of Shares.

                  a. Incentive Options. The exercise price of the shares of
Common Stock covered by each incentive option granted under the Plan shall not
be less than the fair market value of such


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shares on the date the incentive option is granted; provided, however, that the
exercise price shall not be less than 110% of the fair market value if the
person to whom such options are granted owns 10% or more of the total combined
voting power of all classes of stock of the Company or of its parent or
subsidiary corporation.

                  b. Nonqualified Options. The exercise price of the shares of
Common Stock covered by each nonqualified option granted under the Plan shall
not be less than the fair market value of such shares on the date the
nonqualified option is granted.

                  c. Fair Market Value. For purposes of this Section 5, fair
market value shall, if the Common Stock is not listed or admitted to trading on
a stock exchange or The Nasdaq National Market on the over-the-counter market,
be the average of the closing bid price and asked price of the Common Stock in
the over-the-counter market on the date the incentive option or nonqualified
option is granted or, if the Common Stock is then listed or admitted to trading
on any stock exchange or The Nasdaq National Market, the closing sale price on
such day on the principal stock exchange on which the Common Stock is then
listed or admitted to trading or The Nasdaq National Market, as the case may be.
If no closing bid and asked prices are quoted on such day, or if no sale takes
place on such day on such principal exchange or on The Nasdaq National Market,
then the average of the closing bid and asked prices on the next preceding day
on which such prices were quoted, or closing sale price of the Common Stock on
such principal exchange or The Nasdaq National Market on the next preceding day
on which a sale occurred, as the case may be, shall be deemed to be the fair
market value of the Common Stock. During such times as there is not a market
price available, the fair market value of the Company's Common Stock shall be
determined by the Committee, which shall consider, among other facts which it
considers to be relevant, the book value of such stock and the earnings of the
Company. The exercise price shall be subject to adjustment as provided in
Section 8 below.

         5. Terms and Conditions of Incentive Options.

                  Each incentive option granted pursuant to this Plan shall be
evidenced by a written Option Agreement which shall specify that the options
subject thereto are incentive options within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended. The granting of an incentive option
shall take place at the time of Committee action granting the option. The Option
Agreement shall be in such form as the Committee shall, from time to time,
recommend, but shall comply with and be subject to the following terms and
conditions:

                  a. Medium and Time of Payment. The exercise price of an
incentive option shall be payable (i) in United States dollars payable in cash,
certified check, or bank draft; (ii) subject to any legal restrictions on the
acquisition or purchase of its shares by the Company, by the delivery of shares
of Common Stock which (x) in the case of shares acquired upon exercise of an
option have been owned by the optionee for more than six (6) months on the date
of surrender and (y) have an aggregate fair market value on the date of
surrender equal to the aggregate exercise price of the shares as to which the
option is being exercised; (iii) in the discretion of the Committee, by the
issuance of a promissory note in a form acceptable to the Committee; (iv)
delivery of a properly executed exercise notice together with such other
documentation as the Committee and broker, if


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applicable, shall require to effect an exercise of the option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price; or
(v) any combination of (i), (ii), (iii) or (iv) above.

                  b. Number of Shares. The incentive option shall state the
total number of shares to which it pertains.

                  c. Term of Incentive Option. Each incentive option granted
under the Plan shall expire within a period of not more than ten (10) years from
the date the incentive option is granted; provided, however, that the incentive
option shall expire within a period of not more than five (5) years if granted
to a person who owns more than 10% of the combined voting power of all classes
of stock of the Company or of its parent or subsidiary corporation.

                  d. Date of Exercise. Each incentive stock option granted
pursuant to this Plan shall become exercisable on each successive anniversary of
the grant date of such options in increments of twenty five percent (25%);
provided, however, that in the discretion of the Committee, individual Option
Agreements may contain different exercise schedules.

                  e. Termination of Association Except Upon Death or Disability.
In the event of an optionee's termination of association with the Company (as
hereinafter defined) for any reason other than his death or disability, (i) all
incentive options granted to any such optionee pursuant to this Plan which are
not exercisable at the date of such termination of association shall terminate
immediately and become void and of no effect, and (ii) all incentive options
granted to any such optionee pursuant to this Plan which are exercisable at the
date of such termination of association may be exercised (but only to the extent
such options were exercisable as of the date of such termination of association)
at any time within three (3) months of the date of such termination of
association, but in any event no later than the date of expiration of the
incentive option period, and if not so exercised within such time shall become
void and of no effect at the end of such time. For purposes of this Plan, the
term "termination of association" with the Company shall mean (i) for any person
who is an employee of the Company or a subsidiary of the Company but not also a
director of the Company, the cessation of such person's employment with the
Company or a subsidiary of the Company, or any corporation or a parent or
subsidiary of a corporation issuing and assuming an option in a transaction to
which Section 424(a) of the Internal Revenue Code applies (collectively, an
"Affiliate"), (ii) for any person who is both a director of the Company and an
employee of the Company or a subsidiary or Affiliate of the Company, the
cessation of both the employment and status as a director of such person, and
(iii) for any person who is a director of the Company but not also an employee
of the Company or a subsidiary of the Company, the cessation of such person's
status as a director of the Company.

                  f. Death or Disability of Optionee. In the event of an
optionee's termination of association with the Company by reason of his or her
death or disability, (i) all incentive options granted to such person pursuant
to this Plan which are not exercisable at the date of such termination of
association shall terminate immediately and become void and of no effect, and
(ii) all incentive options granted to such person pursuant to this Plan which
are exercisable at the date of such termination of association may be exercised
(but only to the extent they were exercisable as of the


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date of such termination of association) at any time within one (1) year after
the optionee's termination of association as a result of such death or
disability, but in any event no later than the date of expiration of the
incentive option period, by such optionee, or in the event of death, by the
executors or administrators of the optionee's estate or by any person or persons
who shall have acquired the incentive option directly from the optionee by
bequest or inheritance. At the end of such one (1) year period, all incentive
options held by such optionee, to the extent they remain unexercised, shall
terminate and become void and of no effect.

                  g. Rights as a Stockholder. An optionee or a transferee of an
incentive option shall have no rights as a stockholder with respect to any
shares of Common Stock covered by his or her incentive option until the date of
the issuance of a share certificate to him or her for such shares. No adjustment
shall be made for dividends or distributions or other rights for which the
record date is prior to the date such share certificate is issued.

                  h. Nonassignability of Rights. No incentive option shall be
assignable or transferable by the person receiving same except by will or the
laws of descent and distribution. During the life of such person, the incentive
option shall be exercisable only by him or her.

                  i. Limitation. Notwithstanding any other provisions of the
Plan, to the extent the aggregate fair market value (determined in accordance
with the provisions of Section 5 above as of the time the incentive option is
granted) of the shares of Common Stock with respect to which incentive stock
options are exercisable for the first time by the optionee during any calendar
year (under all such plans of the Company and any parent and subsidiary
corporations) exceeds $100,000, such excess shall be treated as nonqualified
options.

                  j. Notice of Disposition. Each Option Agreement which relates
to the grant of an incentive stock option shall provide that the optionee shall
give prompt written notice to the Company in the event the optionee sells or
otherwise disposes of any shares of Common Stock issued upon the exercise of
such incentive stock options.

                  k. Other Provisions. Any Option Agreement may contain such
other terms, provisions and conditions as may be determined by the Committee,
which are not inconsistent with the provisions of Section 422 of the Internal
Revenue Code of 1986, as amended, including the option of the Company to
repurchase any shares issued upon the exercise of an option upon termination of
employment. Incentive options granted to different persons, or to the same
person at different times, may be subject to terms, conditions and restrictions
which differ from each other.

         6. Terms and Conditions of Nonqualified Options.

                  Each nonqualified option granted pursuant to this Plan shall
be evidenced by a written Option Agreement which shall specify that the options
subject thereto are nonqualified options. The granting of a nonqualified option
shall take place at the time of Committee action granting such option. The
Option Agreement shall be in such form as the Committee shall, from time to
time, recommend, but shall comply with and be subject to the following terms and
conditions:


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                  a. Medium and Time of Payment. The nonqualified option price
shall be payable (i) in United States dollars payable in cash, certified check,
or bank draft; (ii) subject to any legal restrictions on the acquisition or
purchase of its shares by the Company, by the delivery of shares of Common Stock
which (x) in the case of shares acquired upon exercise of an option have been
owned by the optionee for more than six (6) months on the date of surrender and
(y) have an aggregate fair market value on the date of surrender equal to the
aggregate exercise price of the shares as to which the option is being
exercised; (iii) in the discretion of the Committee, by the issuance of
promissory note in a form acceptable to the Committee; (iv) delivery of a
properly executed exercise notice together with such other documentation as the
Committee and broker, if applicable, shall require to effect an exercise of the
option and delivery to the Company of the sale or loan proceeds required to pay
the exercise price; or (v) any combination of (i), (ii), (iii) or (iv) above.

                  b. Number of Shares. The nonqualified option shall state the
total number of shares to which it pertains.

                  c. Term of Nonqualified Option. Each nonqualified option
granted under the Plan shall expire within a period of not more than ten (10)
years from the date the nonqualified option is granted.

                  d. Date of Exercise. Each nonqualified option granted pursuant
to this Plan shall become exercisable on each successive anniversary of the
grant date of such options in increments of twenty five percent (25%); provided,
however, that in the Committee's absolute discretion, individual Option
Agreements may contain different exercise schedules.

                  e. Termination of Association Except Upon Death or Disability.
In the event of an optionee's termination of association with the Company or any
subsidiary or Affiliate of the Company, for any reason other than his or her
death or disability, (i) all nonqualified options granted to any such optionee
pursuant to this Plan which are not exercisable at the date of such termination
of association shall terminate immediately and become void and of no effect, and
(ii) all nonqualified options granted to any such optionee pursuant to this Plan
which are exercisable at the date of such termination of association may be
exercised (but only to the extent they were exercisable as of the date of the
termination of association) at any time within three (3) months of the date of
such termination of association, but in any event no later than the date of
expiration of the nonqualified option period, and if not so exercised within
such time shall become void and of no effect at the end of such time.

                  f. Death or Disability of Optionee. In the event of an
optionee's termination of association with the Company by reason of his or her
death or disability, (i) all nonqualified options granted to such optionee
pursuant to this Plan which are not exercisable at the date of such termination
of association shall terminate immediately and become void and of no effect, and
(ii) all nonqualified options granted to such optionee pursuant to this Plan
which are exercisable at the date of such termination of association may be
exercised (but only to the extent they were exercisable as of the date of the
termination of association) at any time within one (1) year after the optionee's
death or disability, but in any event no later than the date of expiration of
the nonqualified option


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period, by such optionee, or in the event of death, by the executors or
administrators of the optionee's estate or by any person or persons who shall
have acquired the nonqualified option directly from the optionee by bequest or
inheritance. At the end of such one (1) year period, all nonqualified options
held by such optionee, to the extent they remain unexercised, shall terminate
and become void and of no effect.

                  g. Rights as a Stockholder. An optionee or an offeree or a
transferee of a nonqualified option shall have no rights as a stockholder with
respect to any shares of Common Stock covered by his or her nonqualified option
until the date of the issuance of a share certificate to such optionee for such
shares. No adjustment shall be made for dividends or distributions or other
rights for which the record date is prior to the date such share certificate is
issued.

                  h. Nonassignability of Rights. Except as provided by the
Committee, no nonqualified option shall be assignable or transferable by the
person receiving same except by will or the laws of descent and distribution.
During the life of such person, the nonqualified option shall be exercisable
only by him or her.

                  i. Other Provisions. Any Option Agreement may contain such
other terms, provisions and conditions as may be determined by the Committee.
Nonqualified options granted to different persons, or to the same person at
different times, may be subject to terms, conditions and restrictions which
differ from each other.

         7. Changes in Capital Structure.

                  a. Changes in Capitalization. In the event that the
outstanding shares of Common Stock of the Company are hereafter increased or
decreased or changed into or exchanged for a different number or kind of shares
or other securities of the Company by reason of merger, consolidation or
reorganization in which the Company is the surviving corporation or of a
recapitalization, stock split, combination of shares, reclassification,
reincorporation, stock dividend (in excess of 2%), or other change in the
corporate structure of the Company, appropriate adjustments shall be made by the
Board of Directors in the aggregate number and kind of shares subject to this
Plan, and the number and kind of shares and the price per share subject to
outstanding incentive options and nonqualified options in order to preserve, but
not to increase, the benefits to persons then holding incentive options and/or
nonqualified options.

                  b. Merger or Asset Sale. In the event that the Company at any
time proposes to (i) merge into, consolidate with or to enter into any other
reorganization (including the sale of substantially all of its assets) in which
the Company is not the surviving corporation, or (ii) enter into a merger or
other reorganization as a result of which the outstanding shares of Common Stock
of the Company will be changed into or exchanged for shares of the capital stock
or other securities of another corporation or for cash or property, then the
Plan and all unexercised incentive options and nonqualified options granted
hereunder shall terminate, unless provision is made in writing in connection
with such transaction for the assumption of incentive options and nonqualified
options theretofore granted, or the substitution for such incentive options and
nonqualified options of new options covering shares of a successor corporation,
with appropriate adjustments as to number and


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kind of shares and prices, in which event the Plan and the incentive options and
nonqualified options theretofore granted, or the new incentive options and
nonqualified options substituted therefor, shall continue in the manner and
under the terms so provided. If such provision is not made in such transaction
for the continuance of the Plan and the assumption of incentive options and
nonqualified options theretofore granted or the substitution for such incentive
options and nonqualified options of new incentive options and nonqualified
options covering the shares of a successor corporation, then the Committee shall
cause written notice of the proposed transaction to be given to the persons
holding incentive options or nonqualified options not less than thirty (30) days
prior to the anticipated effective date of the proposed transaction, and all
incentive options and nonqualified options shall be accelerated and, concurrent
with the effective date of the proposed transaction, such person shall have the
right to exercise incentive options and nonqualified options in respect of any
or all shares then subject thereto.

                  c. Termination Following a Change of Control. If, at any time
within twelve (12) months after a Change of Control, an optionee's status as
employee is terminated as a result of an Involuntary Termination or if an
optionee's status as director terminates other than upon a voluntary resignation
by the optionee (which shall not deemed voluntary if requested by the acquiring
company), the vesting and exercisability of each outstanding incentive option
and nonqualified option shall be automatically accelerated in full. The
incentive option or nonqualified option shall remain exercisable in accordance
with Sections 6 and 7 and the Option Agreement.

         For purposes of this Section 8(c):

                           i. "Cause" means (i) any act of personal dishonesty
taken by the optionee in connection with his responsibilities as an employee
which is intended to result in substantial personal enrichment of the optionee,
(ii) the optionee's conviction of a felony, (iii) a willful act by the optionee
which constitutes misconduct, and (iv) continued willful violations by the
optionee of the optionee's obligations to the Company after there has been
delivered to the optionee a written demand for performance from the Company
which describes the basis for the Company's belief that the optionee has not
substantially performed his duties; and

                           ii. "Change of Control" means the occurrence of any
of the following events:

                                    (1) the approval by stockholders of the
Company of a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation;

                                    (2) any approval by the stockholders of the
Company of a plan of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all of the Company's
assets;


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<PAGE>   9

                                    (3) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended)
becoming the "beneficial owner" (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the total voting power represented by the Company's then
outstanding voting securities; or

                                    (4) a change in the composition of the
Board, as a result of which fewer than a majority of the directors are Incumbent
Directors. "Incumbent Directors" shall mean directors who either (A) are
directors of the Company as of the date hereof, or (B) are elected, or nominated
for election, to the Board with the affirmative votes of at least a majority of
those directors whose election or nomination was not in connection with any
transaction described in subsections (i), (ii) or (iii) or in connection with an
actual or threatened proxy contest relating to the election of directors of the
Company.

                           iii. "Involuntary Termination" means (1) without the
employee's express written consent, a significant reduction of the employee's
duties, position or responsibilities relative to the employee's duties, position
or responsibilities in effect immediately prior to such reduction, or the
removal of the employee from such position, duties and responsibilities, unless
the employee is provided with comparable duties, position and responsibilities;
provided, however, that a reduction in duties, position or responsibilities
solely by virtue of the Company being acquired and made part of a larger entity
(as, for example, when the title of the employee remains the same following a
Change of Control but is not promoted, transferred or is entitled to assume the
same title or position in the corporate structure of the acquiring corporation)
shall not constitute an "Involuntary Termination;" (ii) without the employee's
express written consent, a substantial reduction, without good business reasons,
of the facilities and perquisites (including office space and location)
available to the employee immediately prior to such reduction; (iii) a reduction
by the Company of the employee's base salary as in effect immediately prior to
such reduction; (iv) a material reduction by the Company in the kind or level of
employee benefits to which the employee is entitled immediately prior to such
reduction with the result that the employee's overall benefits package is
significantly reduced; (v) without the employee's express written consent, the
relocation of the employee to a facility or a location more than fifty (50)
miles from his current location; or (vi) any purported termination of the
employee by the Company which is not effected for Cause or for which the grounds
relied upon are not valid.

         8. Amendment and Termination of the Plan.

                  The Board of Directors of the Company may from time to time
alter, amend, suspend or terminate the Plan in such respects as the Board of
Directors may deem advisable; provided, however, that no such alteration,
amendment, suspension or termination shall be made which shall substantially
affect or impair the rights of any person under any incentive option or
nonqualified option theretofore granted to such person without his or her
consent; provided further, however, that the approval of the Company's
stockholders shall be obtained to the extent necessary and desirable to comply
with applicable law.

                  Unless the Plan shall theretofore have been terminated, the
Plan shall be effective on September 22, 1993, and shall terminate on September
21, 2003.


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<PAGE>   10

         9. Application of Funds.

                  The proceeds received by the Company from the sale of Common
Stock pursuant to incentive options and nonqualified options will be used for
general corporate purposes.

         10. No Obligation to Exercise Option.

                  The granting of an incentive option or nonqualified option
shall impose no obligation upon the optionee to exercise such incentive option
or nonqualified option.

         11. Continuance of Employment or Status as Director.

                  The Plan or the granting of any incentive option or
nonqualified option thereunder shall not impose any obligation on the Company or
its stockholders to continue the employment of any optionee who is an employee,
or to retain as a director any optionee who is a director.

         12. Tax Withholding.

                  Whenever shares are to be issued under the Plan, the Company
or any subsidiary of the Company employing the recipient shall have the right to
deduct from the recipient's compensation or require the recipient to remit to
the employer corporation, prior to the issuance of the shares, an amount
sufficient to satisfy federal, state and local withholding tax requirements. The
Committee shall have the discretion to allow an optionee to satisfy tax
withholding obligations by electing to have the Company withhold from the shares
to be issued upon exercise of an Option that number of shares having a fair
market value equal to the amount required to be withheld. The fair market value
of the shares to be withheld shall be determined on the date that the amount of
tax to be withheld is determined.

         13. Stockholder Approval.

                  This Plan must be approved by the Company's stockholders
within twelve (12) months following its approval by the Board of Directors of
the Company. Any stock option exercised before stockholder approval is obtained
must be rescinded if stockholder approval is not obtained within twelve (12)
months following approval of the Plan by the Board of Directors.

         14. General Provisions.

                  Notwithstanding any other provision of this Plan or agreements
made pursuant thereto, the Company shall not be required to issue or deliver any
certificate or certificates for shares of stock upon the exercise of options
granted under this Plan prior to fulfillment of all of the following conditions:

                  a. Any registration or other qualification of such shares
under any state or federal law or regulation, or the maintaining in effect of
any such registration or other qualification which the Committee shall, in its
absolute discretion, deem necessary or advisable;

                  b. The obtaining of any other consent, approval or permit from
any state or federal governmental agency which the Committee shall, in its
absolute discretion, determine to be necessary or advisable; and The execution
and delivery to the Company by the recipient of an investment representation
letter containing such assurances and/or representations as the Committee shall,
in its absolute discretion, determine to be necessary or advisable to satisfy
the requirements for exemptions from registration and qualification.

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<PAGE>   11

                                                      VitalCom Inc.
Notice of Grant of Stock Options                      ID: 33-0538926
and Option Agreement                                  Tustin, CA 92780

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[Name]
                                                      Option Number:
                                                                    ------------
-----------------------                               Plan:             93OP
-----------------------                               ID:
                                                                    ------------

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

Effective ________________, you have been granted a(n) [Incentive Stock Option]
[Nonqualified Stock Option] to buy _______________ shares of VitalCom Inc (the
Company) stock at $___________ per share.

The total option price of the shares granted is $________________.

Shares in each period will become fully vested on the date shown.


   Shares               Vest Type             Full Vest            Expiration





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By your signature and the Company's signature below, you and the Company agree
that these options are granted under and governed by the terms and conditions of
the Company's Stock Option Plan as amended and the Option Agreement, all of
which are attached and made a part of this document.

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


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VitalCom Inc                                       Date


------------------------------------               ----------------------------
[Name]                                             Date


                                      -11-
<PAGE>   12

Vesting Schedule:

This Option may be exercised, in whole or in part, in accordance with the
following schedule:

         (a) 25% of the Shares subject to the Option shall vest each year on the
             anniversary of the date of grant

         (b) 6.25% shall become exercisable on the last day of each calendar
             quarter thereafter, so that all of such options shall be
             exercisable from and after the fourth anniversary of the grant
             date.

Termination Period:

This Option may be exercised for three (3) months after termination of the
Optionee's employment or consulting relationship with the Company. Upon the
death or disability of the Optionee, this Option may be exercised for one (1)
year after termination of Optionee's employment or consulting relationship with
the Company. In the event of the Optionee's change in status from Employee to
Consultant or Consultant to Employee, this Option Agreement shall remain in
effect. In no event shall this Option be exercised later than the
Term/Expiration Date as provided above.

         15. AGREEMENT

                  a. Grant of Option. The Plan Administrator of the Company
hereby grants to the Optionee named in the Notice of Grant attached as Part I of
this Agreement (the "Optionee") an option (the "Option") to purchase the number
of Shares, as set forth in the Notice of Grant, at the exercise price per share
set forth in the Notice of Grant (the "Exercise Price"), subject to the terms
and conditions of the Plan, which is incorporated herein by reference. Subject
to Section 9 of the Plan, in the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Option Agreement,
the terms and conditions of the Plan shall prevail.

                  If designated in the Notice of Grant as an Incentive Stock
Option ("ISO"), this Option is intended to qualify as an Incentive Stock Option
under Section 422 of the Code. However, if this Option is intended to be an
Incentive Stock Option, to the extent that it exceeds the $100,000 rule of Code
Section 422(d) it shall be treated as a Nonstatutory Stock Option ("NSO").

                  b. Exercise of Option.

                           i. Right to Exercise. This Option is exercisable
during its term in accordance with the Vesting Schedule set out in the Notice of
Grant and the applicable provisions of the Plan and this Option Agreement. In
the event of Optionee's death, Disability or other termination of Optionee's
employment or consulting relationship, the exercisability of the Option is
governed by the applicable provisions of the Plan and this Option Agreement.

                           ii. Method of Exercise. This Option is exercisable by
delivery of an exercise notice, in the form attached as Exhibit A (the "Exercise
Notice"), which shall state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised (the "Exercised
Shares"), and such other representations and agreements as may be required by
the Company pursuant to the provisions of the Plan. The Exercise Notice shall be
signed by the Optionee and shall be delivered in person or by certified mail to
the Secretary of the Company. The Exercise Notice shall be accompanied by
payment of the aggregate Exercise Price as


                                      -12-
<PAGE>   13

to all Exercised Shares. This Option shall be deemed to be exercised upon
receipt by the Company of such fully executed Exercise Notice accompanied by
such aggregate Exercise Price.

                  No Shares shall be issued pursuant to the exercise of this
Option unless such issuance and exercise complies with all relevant provisions
of law and the requirements of any stock exchange or quotation service upon
which the Shares are then listed. Assuming such compliance, for income tax
purposes the Exercised Shares shall be considered transferred to the Optionee on
the date the Option is exercised with respect to such Exercised Shares.

                  c. Method of Payment. Payment of the aggregate Exercise Price
shall be by any of the following, or a combination thereof, at the election of
the Optionee:

                           i. cash; or

                           ii. check; or

                           iii. delivery of a properly executed exercise notice
together with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price; or

                           iv. surrender of other Shares which (i) in the case
of Shares acquired upon exercise of an option, have been owned by the Optionee
for more than six (6) months on the date of surrender, and (ii) have a Fair
Market Value on the date of surrender equal to the aggregate Exercise Price of
the Exercised Shares; or

                  d. Non-Transferability of Option. This Option may not be
transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Optionee only by the
Optionee. The terms of the Plan and this Option Agreement shall be binding upon
the executors, administrators, heirs, successors and assigns of the Optionee.

                  e. Term of Option. This Option may be exercised only within
the term set out in the Notice of Grant, and may be exercised during such term
only in accordance with the Plan and the terms of this Option Agreement.

                  f. Tax Consequences. Some of the federal and state tax
consequences relating to this Option, as of the date of this Option, are set
forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER
BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

                           i. Exercising the Option.

                                    (1) Nonstatutory Stock Option. The Optionee
may incur regular federal income tax and state income tax liability upon
exercise of a NSO. The Optionee will be treated as having received compensation
income (taxable at ordinary income tax rates) equal to the


                                      -13-
<PAGE>   14

excess, if any, of the Fair Market Value of the Exercised Shares on the date of
exercise over their aggregate Exercise Price. If the Optionee is an Employee or
a former Employee, the Company will be required to withhold from his or her
compensation or collect from Optionee and pay to the applicable taxing
authorities an amount in cash equal to a percentage of this compensation income
at the time of exercise, and may refuse to honor the exercise and refuse to
deliver Shares if such withholding amounts are not delivered at the time of
exercise.

                                    (2) Incentive Stock Option. If this Option
qualifies as an ISO, the Optionee will have no regular federal income tax or
state income tax liability upon its exercise, although the excess, if any, of
the Fair Market Value of the Exercised Shares on the date of exercise over their
aggregate Exercise Price will be treated as an adjustment to alternative minimum
taxable income for federal tax purposes and may subject the Optionee to
alternative minimum tax in the year of exercise. In the event that the Optionee
undergoes a change of status from Employee to Consultant, any Incentive Stock
Option of the Optionee that remains unexercised shall cease to qualify as an
Incentive Stock Option and will be treated for tax purposes as a Nonstatutory
Stock Option on the ninety-first (91st) day following such change of status.

                           ii. Disposition of Shares.

                                    (1) NSO. If the Optionee holds NSO Shares
for at least one year, any gain realized on disposition of the Shares will be
treated as long-term capital gain for federal income tax purposes.

                                    (2) ISO. If the Optionee holds ISO Shares
for at least one year after exercise and two years after the grant date, any
gain realized on disposition of the Shares will be treated as long-term capital
gain for federal income tax purposes. If the Optionee disposes of ISO Shares
within one year after exercise or two years after the grant date, any gain
realized on such disposition will be treated as compensation income (taxable at
ordinary income rates) to the extent of the excess, if any, of the lesser of (A)
the difference between the Fair Market Value of the Shares acquired on the date
of exercise and the aggregate Exercise Price, or (B) the difference between the
sale price of such Shares and the aggregate Exercise Price.

                           iii. Notice of Disqualifying Disposition of ISO
Shares. If the Optionee sells or otherwise disposes of any of the Shares
acquired pursuant to an ISO on or before the later of (i) two years after the
grant date, or (ii) one year after the exercise date, the Optionee shall
immediately notify the Company in writing of such disposition. The Optionee
agrees that he or she may be subject to income tax withholding by the Company on
the compensation income recognized from such early disposition of ISO Shares by
payment in cash or out of the current earnings paid to the Optionee.

                  g. Entire Agreement; Governing Law. The Plan is incorporated
herein by reference. The Plan and this Option Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede
in their entirety all prior undertakings and agreements of the Company and
Optionee with respect to the subject matter hereof, and may not be modified
adversely


                                      -14-
<PAGE>   15

to the Optionee's interest except by means of a writing signed by the Company
and Optionee. This agreement is governed by California law except for that body
of law pertaining to conflict of laws.

                  h. NO GUARANTEE OF EMPLOYMENT. OPTIONEE ACKNOWLEDGES AND
AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS
EARNED ONLY BY CONTINUING SERVICE AS AN EMPLOYEE OR CONSULTANT AT THE WILL OF
THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR
PURCHASING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS
AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET
FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
ENGAGEMENT AS AN EMPLOYEE OR CONSULTANT FOR THE VESTING PERIOD, FOR ANY PERIOD,
OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT
TO TERMINATE OPTIONEE'S EMPLOYMENT OR CONSULTING RELATIONSHIP AT ANY TIME, WITH
OR WITHOUT CAUSE.

By your signature and the signature of the Company's representative on the face
page, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement. Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and Option Agreement. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.


                                      -15-
<PAGE>   16

CONSENT OF SPOUSE

The undersigned spouse of Optionee has read and hereby approves the terms and
conditions of the Plan and this Option Agreement. In consideration of the
Company's granting his or her spouse the right to purchase Shares as set forth
in the Plan and this Option Agreement, the undersigned hereby agrees to be
irrevocably bound by the terms and conditions of the Plan and this Option
Agreement and further agrees that any community property interest shall be
similarly bound. The undersigned hereby appoints the undersigned's spouse as
attorney-in-fact for the undersigned with respect to any amendment or exercise
of rights under the Plan or this Option Agreement.


                                        ----------------------------------------
                                        Spouse of Optionee


                                      -16-
<PAGE>   17

                                    EXHIBIT A
                             1993 STOCK OPTION PLAN
                                 EXERCISE NOTICE

VitalCom Inc.
15222 Del Amo Avenue
Tustin, CA  92680
Attention:  Secretary

         2. Exercise of Option. Effective as of today, ________________, ____,
the undersigned ("Purchaser") hereby elects to purchase ______________ shares
(the "Shares") of the Common Stock of VitalCom Inc. (the "Company") under and
pursuant to the 1993 Stock Option Plan (the "Plan") and the Stock Option
Agreement dated, 19___ (the "Option Agreement"). The purchase price for the
Shares shall be $, as required by the Option Agreement.

         3. Delivery of Payment. Purchaser herewith delivers to the Company the
full purchase price for the Shares.

         4. Representations of Purchaser. Purchaser acknowledges that Purchaser
has received, read and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.

         5. Rights as Shareholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such Shares, no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
A share certificate for the number of Shares so acquired shall be issued to the
Optionee as soon as practicable after exercise of the Option. No adjustment will
be made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 8 of the
Plan.

         6. Tax Consultation. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.

         7. Entire Agreement; Governing Law. The Plan and Option Agreement are
incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except by
means of a writing signed by the Company and Purchaser. This agreement is
governed by California law except for that body of law pertaining to conflict of
laws.

Submitted by:                          Accepted by:

PURCHASER:                             VITALCOM INC.


                                       By:
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Signature

                                       Its:
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Print Name


Address:


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