Employment Agreement ("Agreement") dated as of October __, 1996 between Pacific Biometrics, Inc., a
Delaware corporation (the "Company"), and Elizabeth Teng Leary, Ph.D. (the "Executive").
The Company hereby employs Executive, and Executive accepts employment with the Company, upon the
following terms and conditions:
1.1 Employment. The Company hereby employs Executive, and Executive agrees to serve, as Vice President and
Director of Laboratories of the Company during the term of this Agreement. Subject to the Board of Directors of
the Company, the Executive shall provide such services as delegated by the Board of Directors, provided that
such duties shall be reasonably consistent with those duties assigned to executive officers of organizations
comparable to the Company. The Executive agrees to devote her full business time and attention and best efforts
to the affairs of the Company during the Term of this Agreement.
1.2 Term. The employment of the Executive by the Company under the terms and conditions of this Agreement
will commence on the date hereof and continue until October , 1998
(the "Term") unless terminated sooner in accordance with the provisions of Article IV.
2.1 (a) Annual Salary. During the Term the Company shall pay to the Executive an annual salary of $85,000 (the
"Base Salary"), payable in equal installments every two weeks. Executive shall be entitled to an annual increase in
the Base Salary as determined by the Board of Directors or compensation committee thereof.
(b) Bonus. Executive shall be entitled to receive the following bonuses: (i) $3,750, payable quarterly for achieving
the laboratory quarterly contribution budget attached hereto as Schedule "A", provided that, in the event such
budget is exceeded, Executive's bonus shall be increased by the same percentage of such excess over budgeted
amounts; (ii) $5,000 upon the promotion and hire of a laboratory manager; and (iii) $10,000 upon su