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Exhibit 10.73
Lifeline Systems, Inc.
2000 EMPLOYEE STOCK OPTION PLAN
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1. Purpose
The purpose of this 2000 Employee Stock Option Plan (the "Plan") of
Lifeline Systems, Inc., a Massachusetts corporation (the "Company"), is to
advance the interests of the Company's stockholders by enhancing the Company's
ability to attract, retain and motivate persons who make (or are expected to
make) important contributions to the Company by providing such persons with
equity ownership opportunities and performance-based incentives and thereby
better aligning the interests of such persons with those of the Company's
stockholders. Except where the context otherwise requires, the term "Company"
shall include any of the Company's present or future subsidiary corporations as
defined in Section 424(f) of the Internal Revenue Code of 1986, as amended, and
any regulations promulgated thereunder (the "Code").
2. Eligibility
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All of the Company's employees, officers, directors, consultants and
advisors (and any individuals who have accepted an offer for employment) are
eligible to be granted options (an "Award") under the Plan. Each person who has
been granted an Award under the Plan shall be deemed a "Participant."
Notwithstanding the foregoing, the number of options which may be granted to
officers and directors of the Company under the Plan may not exceed 25,000 in
the aggregate.
3. Administration, Delegation
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(a) Administration by Board of Directors. The Plan will be administered
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by the Board of Directors of the Company (the "Board"). The Board shall have
authority to grant Awards and to adopt, amend and repeal such administrative
rules, guidelines and practices relating to the Plan as it shall deem advisable.
The Board may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall
deem expedient to carry the Plan into effect and it shall be the sole and final
judge of such expediency. All decisions by the Board shall be made in the
Board's sole discretion and shall be final and binding on all persons having or
claiming any interest in the Plan or in any Award. No director or person acting
pursuant to the authority delegated by the Board shall be liable for any action
or determination relating to or under the Plan made in good faith.
(b) Delegation to Executive Officers. To the extent permitted by
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applicable law, the Board may delegate to one or more executive officers of the
Company the power to make Awards and exercise such other powers under the Plan
as the Board may determine, provided
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that the Board shall fix the maximum number of shares subject to Awards and the
maximum number of shares for any one Participant to be made by such executive
officers.
(c) Appointment of Committees. To the extent permitted by applicable
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law, the Board may delegate any or all of its powers under the Plan to one or
more committees or subcommittees of the Board (a "Committee"). All references
in the Plan to the "Board" shall mean the Board or a Committee of the Board or
the executive officer referred to in Section 3(b) to the extent that the Board's
powers or authority under the Plan have been delegated to such Committee or
executive officer.
4. Stock Available for Awards. Subject to adjustment under Section 6, Awards
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may be made under the Plan for up to 150,000 shares of common stock, $0.02 par
value per share, of the Company (the "Common Stock"). If any Award expires or
is terminated, surrendered or canceled without having been fully exercised or is
forfeited in whole or in part or results in any Common Stock not being issued,
the unused Common Stock covered by such Award shall again be available for the
grant of Awards under the Plan. Shares issued under the Plan may consist in
whole or in part of authorized but unissued shares or treasury shares.
5. Stock Options
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(a) General. The Board may grant options to purchase Common Stock
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(each, an "Option") and determine the number of shares of Common Stock to be
covered by each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable. All Options shall be deemed to be non-statutory options
and shall not qualify as incentive stock options under Section 422 of the
Internal Revenue Code.
(b) Exercise Price. The Board shall establish the exercise price at
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the time each Option is granted and specify it in the applicable option
agreement.
(c) Duration of Options. Each Option shall be exercisable at such
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times and subject to such terms and conditions as the Board may specify in the
applicable option agreement provided, however, that no Option will be granted
for a term in excess of 10 years.
(d) Exercise of Option. Options may be exercised by delivery to the
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Company of a written notice of exercise signed by the proper person or by any
other form of notice (including electronic notice) approved by the Board
together with payment in full as specified in Section 5(e) for the number of
shares for which the Option is exercised.
(e) Payment Upon Exercise. Common Stock purchased upon the exercise
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of an Option granted under the Plan shall be paid for as follows:
(1) in cash or by check, payable to the order of the Company;
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(2) except as the Board may, in its sole discretion, otherwise provide
in an option agreement, by (i) delivery of an irrevocable and unconditional
undertaking by a creditworthy broker to deliver promptly to the Company
sufficient funds to pay the exercise price or (ii) delivery by the Participant
to the Company of a copy of irrevocable and unconditional instructions to a
creditworthy broker to deliver promptly to the Company cash or a check
sufficient to pay the exercise price;
(3) provided that the Common Stock is registered under the Exchange
Act, by delivery of shares of Common Stock owned by the Participant valued at
their fair market value as determined by (or in a manner approved by) the Board
in good faith ("Fair Market Value"), provided (i) such method of payment is then
permitted under applicable law and (ii) such Common Stock was owned by the
Participant at least six months prior to such delivery;
(4) to the extent permitted by the Board, in its sole discretion by
(i) delivery of a promissory note of the Participant to the Company on terms
determined by the Board, provided that the Participant pays at least the par
value of the stock in cash or other property or by check or (ii) payment of such
other lawful consideration as the Board may determine; or
(5) by any combination of the above permitted forms of payment.
6. Adjustments for Changes in Common Stock and Certain Other Events
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(a) Changes in Capitalization. In the event of any stock split, reverse
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stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any distribution to holders of Common Stock other than a normal
cash dividend, (i) the number and class of securities available under this Plan,
(ii) the number and class of securities and exercise price per share subject to
each outstanding Option, and (iii) the terms of each other outstanding Award
shall be appropriately adjusted by the Company (or substituted Awards may be
made, if applicable) to the extent the Board shall determine, in good faith,
that such an adjustment (or substitution) is necessary and appropriate. If this
Section 6(a) applies and Section 6(c) also applies to any event, Section 6(c)
shall apply to such event, and this Section 6(a) shall not apply.
(b) Liquidation or Dissolution. In the event of a proposed liquidation or
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dissolution of the Company, the Board shall, upon written notice to the
Participants, provide that all then unexercised Options will (i) become
exercisable in full as of a specified time at least 10 business days prior to
the effective date of such liquidation or dissolution and (ii) terminate
effective upon such liquidation or dissolution, except to the extent exercised
before such effective date.
(c) Acquisition and Change in Control Events
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(1) Definitions
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(a) An "Acquisition Event" shall mean:
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(i) any merger or consolidation of the Company with or into
another entity as a result of which the Common Stock is
converted into or exchanged for the right to receive
cash, securities or other property; or
(ii) any exchange of shares of the Company for cash,
securities or other property pursuant to a statutory
share exchange transaction.
(b) A "Change in Control Event" shall mean:
(i) the acquisition by an individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial ownership
of any capital stock of the Company if, after such
acquisition, such Person beneficially owns (within the
meaning of Rule 13d-3 promulgated under the Exchange
Act) 30% or more of either (x) the then-outstanding
shares of common stock of the Company (the "Outstanding
Company Common Stock") or (y) the combined voting power
of the then-outstanding securities of the Company
entitled to vote generally in the election of directors
(the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection
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(i), the following acquisitions shall not constitute a
Change in Control Event: (A) any acquisition directly
from the Company (excluding an acquisition pursuant to
the exercise, conversion or exchange of any security
exercisable for, convertible into or exchangeable for
common stock or voting securities of the Company,
unless the Person exercising, converting or exchanging
such security acquired such security directly from the
Company or an underwriter or agent of the Company), (B)
any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company
or any corporation controlled by the Company, or (C)
any acquisition by any corporation pursuant to a
Business Combination (as defined below) which complies
with clauses (x) and (y) of subsection (iii) of this
definition; or
(ii) such time as the Continuing Directors (as defined
below) do not constitute a majority of the Board (or,
if applicable, the Board of Directors of a successor
corporation to the
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Company), where the term "Continuing Director" means
at any date a member of the Board (x) who was a member
of the Board on the date of the initial adoption of
this Plan by the Board or (y) who was nominated or
elected subsequent to such date by at least a majority
of the directors who were Continuing Directors at the
time of such nomination or election or whose election
to the Board was recommended or endorsed by at least a
majority of the directors who were Continuing
Directors at the time of such nomination or election;
provided, however, that there shall be excluded from
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this clause (y) any individual whose initial
assumption of office occurred as a result of an actual
or threatened election contest with respect to the
election or removal of directors or other actual or
threatened solicitation of proxies or consents, by or
on behalf of a person other than the Board; or
(iii) the consummation of a merger, consolidation,
reorganization, recapitalization or statutory share
exchange involving the Company or a sale or other
disposition of all or substantially all of the assets
of the Company (a "Business Combination"), unless,
immediately following such Business Combination, each
of the following two conditions is satisfied: (x) all
or substantially all of the individuals and entities
who were the beneficial owners of the Outstanding
Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business
Combination beneficially own, directly or indirectly,
more than 50% of the then-outstanding shares of common
stock and the combined voting power of the then-
outstanding securities entitled to vote generally in
the election of directors, respectively, of the
resulting or acquiring corporation in such Business
Combination (which shall include, without limitation,
a corporation which as a result of such transaction
owns the Company or substantially all of the Company's
assets either directly or through one or more
subsidiaries) (such resulting or acquiring corporation
is referred to herein as the "Acquiring Corporation")
in substantially the same proportions as their
ownership of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, respectively,
immediately prior to such Business Combination and (y)
no Person (excluding the Acquiring Corporation or any
employee benefit plan (or
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related trust) maintained or sponsored by the Company
or by the Acquiring Corporation) beneficially owns,
directly or indirectly, 30% or more of the then-
outstanding shares of common stock of the Acquiring
Corporation, or of the combined voting power of the
then-outstanding securities of such corporation
entitled to vote generally in the election of
directors (except to the extent that such ownership
existed prior to the Business Combination).
(2) Effect on Options
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(a) Acquisition Event. Upon the occurrence of an Acquisition
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Event (regardless of whether such event also constitutes a
Change in Control Event), or the execution by the Company of
any agreement with respect to an Acquisition Event
(regardless of whether such event will result in a Change in
Control Event), the Board shall provide that all outstanding
Options shall be assumed, or equivalent options shall be
substituted, by the acquiring or succeeding corporation (or
an affiliate thereof); provided that if such Acquisition
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Event also constitutes a Change in Control Event, except to
the extent specifically provided to the contrary in the
instrument evidencing any Option or any other agreement
between a Participant and the Company, such assumed or
substituted options shall be immediately exercisable in full
upon the occurrence of such Acquisition Event. For purposes
hereof, an Option shall be considered to be assumed if,
following consummation of the Acquisition Event, the Option
confers the right to purchase, for each share of Common
Stock subject to the Option immediately prior to the
consummation of the Acquisition Event, the consideration
(whether cash, securities or other property) received as a
result of the Acquisition Event by holders of Common Stock
for each share of Common Stock held immediately prior to the
consummation of the Acquisition Event (and if holders were
offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding
shares of Common Stock); provided, however, that if the
consideration received as a result of the Acquisition Event
is not solely common stock of the acquiring or succeeding
corporation (or an affiliate thereof), the Company may, with
the consent of the acquiring or succeeding corporation,
provide for the consideration to be received upon the
exercise of Options to consist solely of common stock of the
acquiring or succeeding corporation (or an affiliate
thereof) equivalent in fair market value
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to the per share consideration received by holders of
outstanding shares of Common Stock as a result of the
Acquisition Event.
Notwithstanding the foregoing, if the acquiring or
succeeding corporation (or an affiliate thereof) does not
agree to assume, or substitute for, such Options, then the
Board shall, upon written notice to the Participants,
provide that all then unexercised Options will become
exercisable in full as of a specified time prior to the
Acquisition Event and will terminate immediately prior to
the consummation of such Acquisition Event, except to the
extent exercised by the Participants before the consummation
of such Acquisition Event; provided, however, in the event
of an Acquisition Event under the terms of which holders of
Common Stock will receive upon consummation thereof a cash
payment for each share of Common Stock surrendered pursuant
to such Acquisition Event (the "Acquisition Price"), then
the Board may instead provide that all outstanding Options
shall terminate upon consummation of such Acquisition Event
and that each Participant shall receive, in exchange
therefor, a cash payment equal to the amount (if any) by
which (A) the Acquisition Price multiplied by the number of
shares of Common Stock subject to such outstanding Options
(whether or not then exercisable), exceeds (B) the aggregate
exercise price of such Options.
(b) Change in Control Event that is not an Acquisition Event.
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Upon the occurrence of a Change in Control Event that does
not also constitute an Acquisition Event, except to the
extent specifically provided to the contrary in the
instrument evidencing any Option or any other agreement
between a Participant and the Company, all Options then-
outstanding shall automatically become immediately
exercisable in full.
(5) Limitations. Notwithstanding the foregoing provisions of this
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Section 6(c), if the Change in Control Event is intended to be
accounted for as a "pooling of interests" for financial accounting
purposes, and if the acceleration to be effected by the foregoing
provisions of this Section 6(c) would preclude accounting for the
Change in Control Event as a "pooling of interests" for financial
accounting purposes, then no such acceleration shall occur upon
the Change in Control Event.
7. General Provisions Applicable to Awards
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(a) Transferability of Awards. Except as the Board may otherwise determine
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or provide in an Award, Awards shall not be sold, assigned, transferred, pledged
or otherwise encumbered by the person to whom they are granted, either
voluntarily or by operation of law, except by will or the laws of descent and
distribution, and, during the life of the Participant, shall be exercisable only
by the Participant. References to a Participant, to the extent relevant in the
context, shall include references to authorized transferees.
(b) Documentation. Each Award shall be evidenced by a written instrument
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in such form as the Board shall determine. Each Award may contain
terms and conditions in addition to those set forth in the Plan.
(c) Board Discretion. Except as otherwise provided by the Plan, each
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Award may be made alone or in addition or in relation to any other Award. The
terms of each Award need not be identical, and the Board need not treat
Participants uniformly.
(d) Termination of Status. The Board shall determine the effect on an
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Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, the Participant's legal
representative, conservator or guardian or the person designated to receive
amounts due to the Participant or to exercise the rights of the Participant in
the event of the Participant's death (or, in the absence of such a designation,
the Participant's estate) (the "Designated Beneficiary") may exercise rights
under the Award.
(e) Withholding. Each Participant shall pay to the Company, or make
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provision satisfactory to the Board for payment of, any taxes required by law to
be withheld in connection with Awards to such Participant no later than the date
of the event creating the tax liability. Except as the Board may otherwise
provide in an Award, Participants may, to the extent then permitted under
applicable law, satisfy such tax obligations in whole or in part by delivery of
shares of Common Stock, including shares retained from the Award creating the
tax obligation, valued at their Fair Market Value. The Company may, to the
extent permitted by law, deduct any such tax obligations from any payment of any
kind otherwise due to a Participant.
(f) Amendment of Award. The Board may amend, modify or terminate any
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outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, and changing the date of exercise or
realization, provided that the Participant's consent to such action shall be
required unless the Board determines that the action, taking into account any
related action, would not materially and adversely affect the Participant.
(g) Conditions on Delivery of Stock. The Company will not be obligated to
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deliver any shares of Common Stock pursuant to the Plan until (i) all conditions
of the Award have been met or removed to the satisfaction of the Company, (ii)
in the opinion of the Company's counsel, all other legal matters in connection
with the issuance and delivery of such shares have been satisfied, including any
applicable securities laws and any applicable stock exchange or stock market
rules and regulations, and (iii) the Participant has executed and delivered to
the Company
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such representations or agreements as the Company may consider appropriate to
satisfy the requirements of any applicable laws, rules or regulations.
(h) Acceleration. The Board may at any time provide that any Options
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shall become immediately exercisable in full or in part.
8. Miscellaneous
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(a) No Right To Employment or Other Status. No person shall have any
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claim or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan, except as expressly provided in the
applicable Award.
(b) No Rights As Stockholder. Subject to the provisions of the
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applicable Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any shares of Common Stock to be distributed
with respect to an Award until becoming the record holder of such shares.
Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the
number of shares subject to such Option are adjusted as of the date of the
distribution of the dividend (rather than as of the record date for such
dividend), then an optionee who exercises an Option between the record date and
the distribution date for such stock dividend shall be entitled to receive, on
the distribution date, the stock dividend with respect to the shares of Common
Stock acquired upon such Option exercise, notwithstanding the fact that such
shares were not outstanding as of the close of business on the record date for
such stock dividend.
(c) Effective Date and Term of Plan. The Plan shall become effective
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on the date on which it is adopted by the Board. No Awards shall be granted
under the Plan after the completion of ten years from the date on which the Plan
was adopted by the Board, but Awards previously granted may extend beyond that
date.
(d) Amendment of Plan. The Board may amend, suspend or terminate the
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Plan or any portion thereof at any time.
(e) Governing Law. The provisions of the Plan and all Awards made
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hereunder shall be governed by and interpreted in accordance with the laws of
the Commonwealth of Massachusetts, without regard to any applicable conflicts of
law.
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