VITALCOM INC. OPTIONEE

   1
Exhibit 10.4
                                  VITALCOM INC.

                        STOCK OPTION AMENDMENT AGREEMENT


This Agreement is made this 20th day of February, 1997, by and between VitalCom
Inc. (the "Company") and Xxxxx X. Xxxxxxxxxxxxx (the "Optionee").

     WHEREAS: the Company granted the Optionee options on September 20, 1995 and
November 3, 1995 to purchase 242,958 and 59,052 shares, respectively, of the
common stock of the Company under the Company's 1993 Stock Option Plan ("the
Plan");

     WHEREAS: The Optionee ceased to be an employee of the Company as of January
1, 1997;

     WHEREAS: Optionee will remain a director of the Company and the Company
will nominate the Optionee to be a director of the Company at the next annual
meeting of the Company's shareholders; and

     WHEREAS: the Company and the Optionee desire to cancel the Option as to all
shares that were not vested as of January 1, 1997 (the "Unvested Shares") in the
amount of 169,900 shares;

     NOW THEREFORE: the Optionee and the Company agree that the Option is hereby
canceled, and shall be of no further force or effect, as to the Unvested Shares.

IN WITNESS WHEREOF, this Agreement has been entered into as of the date first
set forth above.

VITALCOM INC.                            OPTIONEE


By: /s/ Xxxxxx X. Xxxxxx               /s/ Xxxxx X. Xxxxxxxxxxxxx
    ----------------------             -------------------------- 
    Xxxxxx X. Xxxxxx                   Xxxxx X. Xxxxxxxxxxxxx
    President & CEO
    Chairman of the Board

                                       30