NON-QUALIFIED STOCK OPTION AGREEMENT







	








EXHIBIT 10.2




NON-QUALIFIED STOCK OPTION AGREEMENT



     THIS AGREEMENT, made as of the day of 2000,
by and between AMERICAN INTERNATIONAL PETROLEUM CORPORATION, a Nevada corporation having
its principal executive offices at 2950 North Loop West, Suite 1000, Houston, Texas 77092
(the “Grantor”), and           , with an address at (the “Optionee”). 




W I T N E S S E T H: 




     WHEREAS, the Optionee is a member of the
Board of Directors, but not an employee, of the Grantor; and 



     WHEREAS, the Grantor desires that Optionee
exert his utmost efforts to improve the business of the Grantor. 



     NOW, THEREFORE, in consideration of the
Optionee’s service as a director of the Grantor, and for other good and valuable
consideration, the Grantor hereby grants the Optionee an option to purchase up to (    )
shares of common stock, $.08 par value per share (“Common Shares”), of the
Grantor on the following terms and conditions: 



     1.   Option. 



     The Grantor hereby grants to the Optionee,
subject to subpart (b) of Paragraph 3 hereof, a Non-Qualified Stock Option, (not
qualified as described in Section 422(b) of the Internal Revenue Code of 1986, as amended
(the “Code”)), to purchase, at any time prior to 5:00 p.m. New York time on ___________, up to _______ (    )
fully paid and non-assessable shares of the Common Stock of the Grantor, par value $.08
per share, subject to the terms and conditions of this Agreement, including the early
termination provisions set forth in Section 4 hereof (“Expiration Date”). 



     2.   Purchase Price. 



     The exercise price shall be $     per share
(“Option Price”). The Grantor shall pay all original issue or transfer taxes on the
exercise of this option and all other fees and expenses necessarily incurred by the
Grantor in connection therewith. 



     3.   Exercise of Option. 



     (a)   The Optionee shall notify the Grantor
by registered or certified mail, return receipt requested, addressed to its principal
office as to the number of shares which he desires to purchase under the Options herein
granted, which notice shall be accompanied by payment by (i) cash; (ii) certified check;
(iii) tendering to the Grantor a number of shares of the Grantor’s Common Stock equal to
the portion of the aggregate Option Price being paid by the tendering of such stock
divided by the NASDAQ closing price, or the closing price on the exchange or market then
traded, of the Grantor’s Common Stock on the date of exercise (“Fair Market Value”); (iv)
surrendering a number of the Options granted hereunder equal to the quotient obtained by
dividing (x) the value of the surrendered Options at such time (determined by subtracting
the then aggregate Option Price of the Options surrendered from the aggregate Fair Market
Value of the Option Shares to be received upon such exercise on the date of exercise by
(y) the Fair Market Value of one share of Company Common Stock on the date of exercise;
or (v) any combination of (i) through (v) above. As soon as practicable thereafter, the
Grantor shall cause to be delivered to the Optionee certificates issued in the Optionee’s
name evidencing the Shares purchased by the Optionee. 



     (b)  The Option granted hereunder
becomes vested upon the election of the Optionee to serve as a member of the Company’s
Board of Directors. 

















	








     4.  Option Conditioned on
Continued Service. 



     (a)  If Optionee shall be removed
as a director for cause, or if Optionee resigns voluntarily, the option granted to
Optionee hereunder shall expire immediately upon such termination. If Optionee shall be
removed as a director without cause, the option granted to Optionee hereunder shall
immediately vest in full, and such option shall be exercisable until the end of the term
hereof. 



     (b)  If Optionee dies (a) while
serving as a director for Grantor or (ii) within three (3) months thereafter (other than
voluntarily by Optionee during his term or for cause) such option may be exercised by a
legatee or legatees of such option under Optionee’s last will or by his personal
representatives or distributees at any time within one year after his death, subject to
the provisions of subparagraph (d) of this Paragraph 4. 



     (c)  If Optionee becomes disabled
within the definition of Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended (the “Code”), while serving as a director, such option may, subject to the
provisions of subparagraph (d) of this Paragraph 4, be exercised at any time within one
year after Optionee’s termination of service due to disability. 



     (d)  An option may not be
exercised pursuant to this Paragraph 4 except to the extent that Optionee was entitled to
exercise the option at the time of termination of service or death, and in any event may
not be exercised after the original expiration date of the option. 



     5.  Divisibility and
Non-Assignability of the Option. 



     (a)   The Optionee may exercise
the option herein granted from time to time subject to the provisions above with respect
to any whole number of Common Shares included therein, but in no event may an option be
exercised as to less than one hundred (100) Common Shares at any one time, or the
remaining Common Shares covered by the option if less than one hundred (100). 



     (b)  The Optionee, but not any
transferee other than a partner of the Optionee (“Permitted Transferee”), may give,
grant, sell, exchange, transfer legal title, pledge, assign or otherwise encumber or
dispose of the options herein granted or any interest therein. Any such transferee, other
than a Permitted Transferee, may not do one or more of the above, otherwise than by will
or the laws of descent and distribution. 



     6.  Stock as Investment. 



     (a)  By accepting this Option, to
the extent a registration statement referred to in subsection (b) below is not effective
at the time of disposition of the Common Shares, the Optionee agrees for himself, his
heirs and legatees that any and all Common Shares purchased hereunder shall be acquired
for investment purposes only and not for sale or distribution, and upon the issuance of
any or all of the Common Shares issuable under the Option granted hereunder, the
Optionee, or his heirs or legatees receiving such Common Shares, shall deliver to the
Grantor a representation in writing, that such Common Shares are being acquired in good
faith for investment purposes only and not for sale or distribution. Subject to (b)
below, Grantor may place a “stop transfer” order with respect to such Common Shares with
its transfer agent and place an appropriate restrictive legend on the stock
certificate(s) evidencing such Common Shares. 



     (b)  Unless a registration
statement is filed with the Securities and Exchange Commission covering the Common Shares
that may be acquired upon the exercise of the option, such Common Shares will be
restricted securities. Sales of such restricted securities may be made only in compliance
with an available exemption from such registration. 



     7.   Restriction on Issuance of
Shares. 



     The Grantor shall not be required to issue
or deliver any certificate for Common Shares purchased upon the exercise of any option
granted hereunder unless (a) the issuance of such Common Shares has been registered with
the Securities and Exchange Commission under the Securities Act of 1933, as amended, or
counsel to the Grantor shall have given an opinion that such registration is not
required; (b) approval, to the extent required, shall have been obtained from any state
regulatory body having jurisdiction thereof; and (c) permission for the listing of such
Common Shares, if required, shall have been given by any national securities exchange on
which the Common Shares of the Grantor are at the time of issuance listed. 

















	








     8.  Withholding of Tax 



     Optionee agrees to cooperate with the
Grantor to take all steps necessary or appropriate for any required withholding of taxes
by the Grantor under law or regulation in connection therewith. 



     9.  Adjustments Upon Changes in
Capitalization. 



     (a)   In the event of changes in
the outstanding Common Shares of the Grantor by reason of stock dividends, stock splits,
recapitalizations, or reorganizations, the number and class of Shares as to which the
option may be exercised shall be correspondingly increased to reflect an increase in the
outstanding Common Shares or decreased to reflect a decrease in the outstanding Common
Shares, and the exercise price shall be inversely adjusted by the Grantor so that the
aggregate option price for all Common Shares covered after the change in outstanding
Common Shares shall be the same as the aggregate exercise price for the Common Shares
remaining subject to such option immediately prior to the change in the outstanding
Common Shares. No adjustment shall be made with respect to stock dividends or splits
which do not exceed 5% in any fiscal year, cash dividends or the issuance to shareholders
of the Grantor of rights to subscribe for additional Common Shares or other securities.
Anything to the contrary contained herein notwithstanding, the Board of Directors of the
Grantor shall have the discretionary power to take any action necessary or appropriate to
prevent these options from being disqualified as “Incentive Stock Options” under the
United States Income Tax laws then in effect. 



     (b)  Any adjustment in the number
of Shares shall apply proportionately to only the unexercised portion of the option
granted hereunder. If fractions of a Share would result from any such adjustment, the
adjustment shall be revised to the next lower whole number of Shares. 



     (c)  Subject to (d) below, in the
event of any consolidation or merger of the Grantor into another company where the
Grantor is not the survivor or the proposed dissolution or liquidation of the Grantor,
all outstanding Options granted hereby will automatically terminate; provided, however,
if the Board of Directors of the Grantor have not elected (d) below, that the Options
granted hereunder shall be deemed vested, and Grantor will provide Optionee with notice
thereof within 15 days prior to the happening of such event. 



     (d)  An Option granted hereunder
may, at the discretion of the Board of Directors of the Grantor and said other
corporation, be exchanged for options to purchase shares of capital stock of another
corporation which the Grantor, and/or a subsidiary thereof is merged into, consolidated
with, or all or a substantial portion of the property or stock of which is acquired by
said other corporation or separated or reorganized into. The terms, provisions and
benefits to the optionee of such substitute option(s) shall in all respects be identical
to the terms, provisions and benefits of optionee under his Option(s) prior to said
substitution. 



     10.  Binding Effect. 



     Except as herein otherwise expressly
provided, this Agreement shall be binding upon and inure to the benefit of the parties
hereto, their successors, legal representatives and assigns. 



     11.  No Rights in Option Stock. 



     Optionee shall have no rights as a
shareholder in respect of Common Shares as to which the option granted hereunder shall
not have been exercised and payment made as herein provided. 




     12.  Miscellaneous. 



     This Agreement shall be construed under the
laws of the State of Nevada, without application to the principles of conflicts of law.
Headings have been included herein for convenience of reference only, and shall not be
deemed a part of this Agreement. References in this Agreement to the pronouns “him,” “he”
and “his” are not intended to convey the masculine gender alone and are employed in a
generic sense and apply equally to the feminine gender or to an entity. 















	









     IN WITNESS WHEREOF, the parties have
executed this Agreement as of the day and year first above written. 











	 	AMERICAN INTERNATIONAL
PETROLEUM
 CORPORATION






		
	 	By:






		
	 	
ACCEPTED AND AGREED TO:














	







EXERCISE OF OPTION
TO
PURCHASE SHARES




TO:   American International Petroleum Corporation



     The undersigned hereby exercises the within
Option for the purchase of ___________ shares according to the terms and conditions
thereof and herewith makes payment of the exercise price in full in accordance with the
terms of the Stock Option Agreement, dated as of ____________, between American International
Petroleum Corporation and the undersigned. The undersigned is purchasing such shares for
investment purposes only and not with a view to the sale or distribution thereof. Kindly
issue the certificate for such shares in accordance with the instructions given below. 










		
	 	 	Signature	 







	


Social Security or Taxpayer I.D. Number:  




Instructions for
issuance of stock: 




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