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                                                                   EXHIBIT 10.1B

                            PACIFIC BIOMETRICS, INC.

                         FORM OF STOCK OPTION AGREEMENT
                          (For Officers and Employees)
                                                                Option No._____

      This Stock Option Agreement ("Agreement") is made and entered into as of
the date of grant set forth below ("Date of Grant") by and between Pacific
Biometrics, Inc., a Delaware corporation ("Company"), and the participant named
below ("Participant"). Capitalized terms not defined herein shall have the
respective meanings ascribed to them in the Company's 1996 Stock Incentive Plan
("Plan"). A copy of the Plan has been provided to Participant.

      Participant's Name:                     __________________________
      Participant's Address:                  __________________________
                                              __________________________
      Total Number of Option Shares:          __________________________
      Exercise Price per Share:               __________________________
      Date of Grant:                          __________________________
      Vesting Commencement Date:
      Expiration Date:                        Ten Years from Date of Grant

      Type of Option:                         [_] Incentive Stock Option
                                              [_] Nonstatutory Stock Option

      1.    Grant of Option. The Company hereby grants to Participant an option
("Option") to purchase the total number of shares of Common Stock of the Company
set forth above ("Shares") at the exercise price per share set forth above
("Exercise Price"), subject to all of the terms and conditions of this Agreement
and the Plan. If designated as an Incentive Stock Option above, the Option is
intended to qualify as an "incentive stock option" ("ISO") within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended; if designated as a
Nonqualified Stock Option above, the Option is not intended to qualify as an
ISO.

      2.    Vesting of Option. Provided Participant continues to provide
services to the Company throughout the specified period, the Option will become
exercisable over a period of [___] years from the Vesting Commencement Date at
the following rate:

            - [                   ]
            - [                   ]

      3.    Expiration; Termination.

            (a)   Expiration. Unless earlier terminated, the Option shall expire
on the Expiration Date set forth above and must be exercised, if at all, on or
before the Expiration Date.

            (b)   Termination for any Reason except Death or Disability. If
Participant's services are terminated for any reason, except death or
disability, vesting on the Option shall immediately cease and the Option, solely
to the extent that it would have been exercisable by Participant on the date of
termination, may be exercised by Participant no later than three months after
the date of termination, but in any event no later than the Expiration Date.

            (c)   Termination Because of Death or Disability. If Participant's
services are terminated because of the death or disability of Participant,
vesting on the Option shall immediately cease and the Option, solely to the
extent that it is exercisable by Participant on the date of termination, may be
exercised by Participant (or Participant's legal representative) no later than
one year after the date of termination, but in any event no later than the
Expiration Date.

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            (d)   No Obligation to Employ. Nothing in the Plan or this Agreement
shall confer on Participant any right to continue in the employ of, or other
relationship (whether as an officer, director, consultant or otherwise) with,
the Company or any parent, subsidiary or affiliate of the Company, or limit in
any way the right of the Company (or any parent, subsidiary or affiliate of the
Company) to terminate Participant's employment or other relationship at any
time, with or without cause.

      4.    Manner of Exercise.

            (a)   Exercise Notice. To exercise this Option, Participant (or in
the case of exercise after Participant's death, Participant's executor,
administrator, heir or legatee, as the case may be) must deliver to the Company
an executed stock option exercise notice in the form attached hereto as Exhibit
A, or in such other form as may be approved by the Company from time to time
("Exercise Notice"), which shall set forth Participant's election to exercise
the Option, the number of Shares being purchased ("Exercised Shares"), any
restrictions imposed on the Shares and any representations, warranties and
agreements regarding Participant's investment intent and access to information
as may be required by the Company to comply with applicable securities laws. If
someone other than Participant exercises the Option, then such person must
submit documentation reasonably acceptable to the Company that such person has
the right to exercise the Option. The Exercise Notice shall be accompanied by
payment of the aggregate Exercise Price as to all Exercised Shares.

            (b)   Limitations on Exercise. 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 upon which
the Shares are then listed. Assuming such compliance, for income tax purposes
the Exercised Shares shall be considered transferred to the Participant on the
date the Option is exercised with respect to such Exercised Shares. The Option
may not be exercised as to fewer than 100 Shares unless it is exercised as to
all Shares as to which the Option is then exercisable. The Option may be
exercised only for whole 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 Participant:

                  (i)   cash; or

                  (ii)  certified or cashiers check or a personal check
      acceptable to the Company; or

                  (iii) delivery of a properly executed exercise notice together
      with such other documentation or form of payment as the Board or the
      Committee shall require to effect an exercise of the Option; or

                  (iv)  if deemed acceptable by the Company, pursuant to a
      cashless exercise of the Option whereby the Company shall deliver to the
      Participant (without the payment of the Exercise Price) that number of
      Shares of Common Stock of the Company equal to the quotient obtained by
      dividing (x) the value of the Option at the time of exercise (determined
      by subtracting the aggregate Exercise Price from the aggregate Market
      Price (the average closing sales price of the Common Stock of the Company
      during the twenty consecutive trading days ending on the second trading
      day prior to the date of exercise of the Option) for the Shares of Common
      Stock issuable upon exercise of the Option immediately prior to the
      exercise of the Option) by (y) the Market Price of one share of Common
      Stock of the Company immediately prior to the exercise of the Option; or

                  (v)   any combination of the foregoing.

            (d)   Tax Withholding. Prior to the issuance of the Shares upon
exercise of the Option, Participant must pay or provide for any applicable
federal or state withholding obligations of the Company. If the Company allows,
Participant may provide for payment of withholding taxes upon exercise of the
Option by requesting that the Company retain Shares with a Fair Market Value
equal to the minimum amount of taxes required to be withheld. In such case, the
Company shall issue the net number of Shares to the Participant by deducting the
Shares retained from the Shares issuable upon exercise.

            (e)   Issuance of Shares. The Option shall be deemed to be exercised
upon receipt by the Company of a fully executed Exercise Notice accompanied by
the aggregate Exercise Price for the Exercised Shares and provision for tax
withholding. Thereafter, the Company shall issue the Shares registered in the
name of

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Participant, Participant's authorized assignee, or Participant's legal
representative, and shall deliver certificates representing the Shares with the
appropriate legends affixed thereto.

      5.    Non-Transferability of Option. The Option may not be transferred in
any manner other than by will or by the laws of descent and distribution and may
be exercised during the lifetime of Participant only by Participant. The terms
of the Option shall be binding upon the executors, administrators, successors
and assigns of Participant.

      6.    Adjustment in Option. If, between the Date of Grant and the
complete exercise thereof, there shall be a change in the outstanding shares of
Common Stock of the Company by reason of one or more stock splits, stock
dividends payable in shares of common stock, combinations or exchanges of
shares, recapitalizations or similar capital adjustments, the number, kind or
Exercise Price, as the case may be, of the Shares remaining subject to this
Option shall be equitably adjusted in accordance with the terms of the Plan so
that the proportionate interest in the Company represented by the Shares then
subject to the Option shall be the same as before the occurrence of such event.

      7.    Acceleration upon Change of Control. In the event of a Change of
Control (as defined in the Plan), unless otherwise determined by the Board of
Committee at the time of grant or by amendment (with the Participant's consent)
all outstanding Shares under this Option shall become fully exercisable and
vested;

      8.    Tax Consequences.

            (a)   Tax Consequences. Participant acknowledges that there are or
may be federal, state and local income tax consequences to Participant as a
result of the exercise of the Option and the subsequent sale or disposition of
the Shares. If the Option is granted intending to qualify as an ISO under
federal income tax law, the Company does not represent or guarantee that the
Option qualifies as such. PARTICIPANTS ARE URGED TO CONSULT THEIR OWN TAX
ADVISERS BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES.

            (b)   Notice of Disqualifying Disposition of ISO Shares. If the
Option is intended to qualify as an ISO, and if Participant sells or otherwise
disposes of any of the Shares acquired pursuant to the Option on or before the
later of (a) the date two years after the Date of Grant, and (b) the date one
year after exercise of the Option, Participant shall immediately notify the
Company in writing of such disposition. Any such early disposition of the Shares
may result in adverse tax consequences to Participant. Participant acknowledges
that he or she may be subject to income tax withholding by the Company on the
compensation income recognized by Participant from the early disposition by
payment in cash or out of the current wages or other compensation payable to
Participant.

      9.    Privileges of Stock Ownership. Participant shall not have any of the
rights of a shareholder with respect to any Shares until Participant exercises
the Option and pays the Exercise Price.

      10.   Compliance with Securities Laws and Regulations. The exercise of
the Option and the issuance and transfer of Shares shall be subject to
compliance by the Company and Participant with all applicable requirements of
federal and state securities laws and with all applicable requirements of any
stock exchange on which the Company's Common Stock may be listed at the time of
such issuance or transfer. Participant understands that certificates evidencing
Shares issued upon exercise of this Option may be required to bear a legend
restricting the resale thereof without registration of such shares under the
Securities Act of 1933, as amended. Participant understands that the Company is
under no obligation to register or qualify the Shares with the Securities and
Exchange Commission, any state securities commission or any stock exchange to
effect such compliance.

      11.   Interpretation. Any dispute regarding the interpretation of this
Agreement shall be submitted by Participant or the Company to the Committee for
review. The resolution of such a dispute by the Committee shall be final and
binding on the Company and Participant.

      12.   Entire Agreement. The Plan is incorporated herein by reference. This
Agreement and the Plan constitute the entire agreement of the parties and
supersede all prior undertakings and agreements with respect to the subject
matter hereof.

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      13.   Notices. Any notice required to be given or delivered to the Company
under the terms of this Agreement shall be in writing and addressed to the
Corporate Secretary of the Company at its principal corporate offices. Any
notice required to be given or delivered to Participant shall be in writing and
addressed to Participant at the address indicated above or to such other address
as such party may designate in writing from time to time to the Company. All
notices shall be deemed to have been given or delivered upon: personal delivery;
three days after deposit in the United States mail by certified or registered
mail (return receipt requested); one business day after deposit with any return
receipt express courier (prepaid); or one business day after transmission by
facsimile (transmission confirmed).

      14.   Successors and Assigns. The Company may assign any of its rights
under this Agreement. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer set forth herein, this Agreement shall be binding upon
Participant and Participant's heirs, executors, administrators, legal
representatives, successors and assigns.

      15.   Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington, without regard to its
provisions regarding conflicts of laws.

      16.   Limitation on Rights; No Right to Future Grants; Extraordinary Item
of Compensation. By entering into this Agreement and accepting the grant of the
Option evidenced hereby, you acknowledge: (a) that the Plan is discretionary in
nature and may be suspended or terminated by the Company at any time; (b) that
the grant of the Option is a one-time benefit which does not create any
contractual or other right to receive future grants of options, or benefits in
lieu of options; (c) that all determinations with respect to any such future
grants, including, but not limited to, the times when options will be granted,
the number of shares subject to each option, the option price, and the time or
times when each option will be exercisable, will be at the sole discretion of
the Company; (d) that your participation in the Plan is voluntary; (e) that the
value of the Option is an extraordinary item of compensation which is outside
the scope of your employment contract, if any; (f) that the Option is not part
of normal or expected compensation for purposes of calculating any severance,
resignation, redundancy, end of service payments, bonuses, long-service awards,
pension or retirement benefits or similar payments; (g) that the vesting of the
Option ceases upon termination of employment or service relationship with the
Company for any reason except as may otherwise be explicitly provided in the
Plan or this Agreement; (h) that the future value of the underlying Shares is
unknown and cannot be predicted with certainty; and (i) that if the underlying
Shares do not increase in value, the Option will have no value.

      DATED as of the Date of Grant set forth above.

                                            PACIFIC BIOMETRICS, INC.

                                            By:  _____________________________
                                            Its: _____________________________
                                            Name:_____________________________

Acceptance by Participant:

Participant acknowledges receipt of a copy of the Plan. Participant has reviewed
the Plan and this Agreement in their entirety, has had an opportunity to obtain
the advice of counsel prior to executing this Agreement and fully understands
all provisions of the Plan and this Agreement. Participant acknowledges that
there may be adverse tax consequences upon exercise of the Option or disposition
of the Shares and that Participant should consult a tax adviser prior to any
such exercise or disposition. Participant accepts this Option subject to all of
the terms and provisions of the Plan and this Agreement.

                                            __________________________________
                                                       (Signature)
      Date signed:__________________________

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                                    EXHIBIT A

                       NOTICE OF EXERCISE OF STOCK OPTION

Pacific Biometrics, Inc.
220 West Harrison Street
Seattle, WA  98119
Attn: Secretary

      1.    Notice of Exercise. The undersigned ("Purchaser") hereby notifies
Pacific Biometrics, Inc., a Delaware corporation (the "Company"), of his / her
election to exercise his / her option to purchase _____________ shares of the
Company's common stock, $.01 par value (the "Common Stock"), pursuant to that
Stock Option Agreement (the "Agreement") between the undersigned and the Company
dated _______________, 200__ (Option No. ____).

      2.    Payment of Exercise Price. Accompanying this Notice is (a) a
certified or a cashier's check (or other check acceptable to the Company) in the
amount of $__________ payable to the Company, and/or (b) such any other form of
payment, together with appropriate documentation, which is acceptable to the
Company or as otherwise specified in Section 3 of the Agreement.

      3.    Payment of Withholdings Taxes. Purchaser acknowledges that he / she
is responsible for paying or providing for any applicable federal or state tax
withholdings as a result of this Option exercise.

            (a)   Accompanying this Notice is my check in the amount of
$__________, in payment of federal and state income withholding and employment
taxes applicable to this exercise. The amount of such payment is based on advice
received from appropriate officials of the Company responsible for the
administration of its payroll and employment tax obligations.

                  (b)   Alternatively, or in addition, to avoid earnings charges
or other adverse consequences to the Company under applicable accounting or tax
rules or regulations, in full or partial payment of such taxes: (i) I deliver
herewith an additional ___________ shares of the Common Stock presently owned by
me, having an aggregate fair market value as of the date hereof of $__________
[if such delivery is authorized and approved by the Company]; or (ii) I hereby
authorize the Company to withhold, from the shares of Common Stock otherwise
issuable to me pursuant to this exercise, __________ such shares having an
aggregate fair market value at the date hereof of $__________.

      4.    Title to Shares. The exact spelling of the name(s) under which
Purchaser desires to take title to the Shares is:______________________________.
________________________________________________________________.

Purchaser desires to take title to the Shares as follows:

            [ ]   Individual, as separate property
            [ ]   Husband and wife, as community property
            [ ]   Joint Tenants
            [ ]   Alone or with spouse as trustee(s) of the following trust
                  (including date):_____________________________________________
                  ______________________________________________________________
            [ ]   Other; please specify:________________________________________
                  ______________________________________________________________

      5.    Tax Consequences. PURCHASER UNDERSTANDS THAT THERE MAY BE ADVERSE
FEDERAL OR STATE TAX CONSEQUENCES AS A RESULT OF PURCHASER'S PURCHASE OR
DISPOSITION OF THE SHARES. PURCHASER ACKNOWLEDGES THAT SHE / HE HAS BEEN ADVISED
TO CONSULT WITH HER / HIS TAX ADVISER IN CONNECTION WITH THE PURCHASE OR

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DISPOSITION OF THE SHARES AND THAT PURCHASER HAS HAD AN OPPORTUNITY TO DO SO.
PURCHASER IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE.

      6.    Compliance with Laws and Regulations. Purchaser acknowledges that
the issuance and transfer of the Shares will be subject to and conditioned upon
compliance by the Company and Purchaser with all applicable state and federal
laws and regulations and with all applicable requirements of any stock exchange
or automated quotation system on which the Company's Common Stock may be listed
or quoted at the time of such issuance or transfer.

      7.    Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Washington, without regard to
conflicts of laws.

      EXECUTED as of the ____ day of _____________, 200___.

      PARTICIPANT

____________________________________   SSN:_____________________________________
           (Signature)

____________________________________   Address:_________________________________
           (Print name)                        _________________________________

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