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                                                                Exhibit 10.47



                                                                RICHARD E. GADDY
                                                                   Optionee

                           BIO-KEY INTERNATIONAL, INC.

                      NON-QUALIFIED STOCK OPTION AGREEMENT
                                    UNDER THE
                           BIO-KEY INTERNATIONAL, INC.
                            2004 STOCK INCENTIVE PLAN

     This Agreement is made as of the date set forth on Schedule A hereto (the
"Grant Date") by and between Bio-key International, Inc., a Minnesota
corporation (the "Corporation"), and the person named on Schedule A hereto (the
"Optionee").

     WHEREAS, Optionee is a director of the Corporation and the Corporation
considers it desirable and in its best interest that Optionee be given an
inducement to acquire a proprietary interest in the Corporation and an incentive
to advance the interests of the Corporation by granting the Optionee an option
to purchase shares of common stock of the Corporation (the "Common Stock");

     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree that as of the Grant Date, the Corporation hereby grants Optionee an
option to purchase from it, upon the terms and conditions set forth in the
Corporation's 2004 Stock Incentive Plan, as amended from time to time (the
"Plan"), a copy of which is attached hereto, that number of shares of the
authorized and unissued Common Stock of the Corporation as is set forth on
Schedule A hereto.

     1. TERMS OF STOCK OPTION. The option to purchase Common Stock granted
hereby is subject to the terms, conditions, and covenants set forth in the Plan
as well as the following:

          (a)  This option shall constitute a Non-Qualified Stock Option which
               is not intended to qualify under Section 422 of the Internal
               Revenue Code of 1986, as amended;

          (b)  The per share exercise price for the shares subject to this
               option shall be the Fair Market Value (as defined in the Plan) of
               the Common Stock on the Grant Date, which exercise price is set
               forth on Schedule A hereto;

          (c)  This option shall vest in accordance with the vesting schedule
               set forth on Schedule A hereto; and

          (d)  No portion of this option may be exercised more than seven (7)
               years from the Grant Date.
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     2. PAYMENT OF EXERCISE PRICE. The option may be exercised, in part or in
whole, only by written request to the Corporation accompanied by payment of the
exercise price in full either: (i) in cash for the shares with respect to which
it is exercised; (ii) if the shares underlying the option are registered under
the Securities Act, by delivering to the Corporation a notice of exercise with
an irrevocable direction to a broker-dealer registered under the Securities
Exchange Act of 1934, as amended, to sell a sufficient portion of the shares and
deliver the sale proceeds directly to the Corporation to pay the exercise price;
or (iii) by delivering previously owned shares of Common Stock or a combination
of shares and cash having an aggregate Fair Market Value (as defined in the
Plan) equal to the exercise price of the shares being purchased; PROVIDED,
HOWEVER, that shares of Common Stock delivered by the Optionee may be accepted
as full or partial payment of the exercise price for any exercise of the option
hereunder only if the shares have been held by the Optionee for at least six (6)
months.

     3. MISCELLANEOUS.

          (a)  This Agreement is binding upon the parties hereto and their
               respective heirs, personal representatives, successors and
               assigns.

          (b)  This Agreement will be governed and interpreted in accordance
               with the laws of the State of Minnesota, and may be executed in
               more than one counterpart, each of which shall constitute an
               original document.

          (c)  No alterations, amendments, changes or additions to this
               agreement will be binding upon either the Corporation or Optionee
               unless reduced to writing and signed by both parties.


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     In witness whereof, the parties have executed this Agreement as of the
Grant Date.

                                     BIO KEY INTERNATIONAL, INC.


                                     By: _______________________________________


                                     Title: ____________________________________


                                     OPTIONEE

                                     ___________________________________________
                                     Richard E. Gaddy

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                                   SCHEDULE A



1.  Optionee: Richard E. Gaddy

2.  Grant Date: October 12, 2004

3.  Number of Shares of Common Stock covered by the Option: 50,000

4.  Exercise Price (Fair Market Value of Common Stock on the Grant Date): $1.03

5.  The Option shall vest in accordance with the following schedule:

         (i)   25,000 shares shall vest on October 12, 2005; and

         (ii)  25,000 shares shall vest on October 12, 2006.

6.  Expiration Date: October 11, 2011



                                        _________
                                        Initials of Authorized
                                        Officer of BIO KEY INTERNATIONAL, INC.



                                        _________
                                        Optionee's Initials


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