EXHIBIT 99.2

                    BION ENVIRONMENTAL TECHNOLOGIES, INC.
                      2006 CONSOLIDATED INCENTIVE PLAN
                    NON-QUALIFIED STOCK OPTION AGREEMENT


This OPTION AGREEMENT is made this 7th day of November, 2007 between Bion
Environmental Technologies, Inc., a Colorado corporation ("Company"), 641
Lexington Avenue 17th Floor, New York, New York 10022, and Mark A. Smith
("Optionee") PO Box 566, Crestone CO 81131.

In consideration of the mutual covenants hereinafter set forth and for other
good and valuable consideration, the parties hereto agree as follows:

1.   Grant of Option.  Pursuant to the provisions of the Company's 2006
Consolidated Incentive Plan ("Plan"), the Company hereby grants to the
Optionee, subject to the terms and conditions of the Plan (as it presently
exists and as it may hereafter be amended), and subject to the further terms
and conditions hereinafter set forth, the right and option to purchase from
the Company all or any part of an aggregate of 125,000 shares of the
Company's no par value common stock ("Common Stock") at the purchase price of
$2.20 per share ("Shares"), such option to be exercised only as hereinafter
provided.  The option ("Option") is not intended to be, and will not be
treated as, an Incentive Stock Option within the meaning of Section 422A of
the Internal Revenue Code of 1986, as amended.  The number of Shares with
respect to which the Option is exercisable, and the purchase price with
respect to each Share to be acquired pursuant to the exercise of the Option
herein granted, each are subject to adjustment under certain circumstances as
more fully set forth in the Plan.  The term "Common Stock" as used herein
shall include any other class of stock or other securities resulting from any
such adjustment.

2.   Exercise of Option.  125,000 options granted shall vest and be
exercisable commencing on January 1, 2008. To the extent that it has not
theretofore been exercised, each Option shall expire at 11:59 P.M. on
December 31, 2011.

3.   Option Exercise.  Subject to the terms and conditions of Section 2
above, the Option granted hereunder may be exercised in whole or in any part,
and may be exercised in part from time to time, all subject to the
limitations on exercise set forth herein and in the Plan, provided that no
partial exercise of the Option shall be for an aggregate exercise price of
less than $1,000 unless such partial exercise is for the last remaining
unexercised portion of the Option.  The partial exercise of the Option shall
not cause the expiration, termination or cancellation of the remaining
portion thereof.  The Option may be exercised by delivering written notice,
in the form attached hereto, to the principal office of the Company, to the
attention of its Secretary, no less than three business days in advance of
the effective date of the proposed exercise.  Such notice shall be
accompanied by this Option Agreement and shall specify the number of Shares
of Common Stock with respect to which the Option is being exercised and the
effective date of the proposed exercise, and shall be signed by the Optionee.


The Optionee may withdraw such notice at any time prior to the close of
business on the business day immediately preceding the effective date of the
proposed exercise, in which case this Option Agreement shall be returned to
the Optionee.

4.   Method of Exercise.

     a)   Payment for Shares of Common Stock to be purchased upon the
exercise of the Option shall be made on the effective date of such exercise
either (i) in cash, by certified check, bank cashier's check or wire
transfer, or (ii) subject to the approval of the Incentive Plan Committee, in
Shares of Common Stock owned by the Optionee and valued at their fair market
value on the effective date of such exercise (determined in accordance with
the method for establishing fair market value as set forth in the Plan), or
partly in Shares of Common Stock with the balance in cash, by certified
check, bank cashier's check or wire transfer.  Any payment in Shares of
Common Stock shall be effected by the delivery of such Shares to the
Secretary of the Company, duly endorsed in blank or accompanied by stock
powers duly executed in blank, together with any other documents and
evidences as the Secretary of the Company shall require from time to time; or

     b)   Cashless Exercise.  In lieu of exercising this Option via cash
payment or as otherwise set forth at paragraph 4.a) above, the Holder may
effect a cashless exercise and receive Common Stock equal to the value of
this Option (or the portion thereof being cancelled) by means of a net
issuance exercise, in which event the Company shall issue to the Holder a
number of Shares of Common Stock computed using the following formula:

     X = Y (A-B)
         -------
            A

Where   X = the number of Shares of Common Stock to be issued to the Holder.
        Y = the number of Shares purchasable under this option or, if only a
            portion of the Option is being exercised (at the date of such
            calculation), that portion.
        A =  the current market price of one Share of Common Stock (at the
             date of such calculation).
        B =  the exercise price (as adjusted to the date of calculation).

If the above calculation results in a negative number, then no Option Shares
of Common Stock shall be issued or issuable upon conversion of this Option
pursuant to this Provision, and the Option shall not be deemed to have been
exercised, notwithstanding the delivery of the notice of election.

     c)   The Option may be exercised by a broker-dealer acting on behalf of
the Optionee if (i) the broker-dealer has received from the Optionee or the
Company a fully-and-duly-endorsed agreement evidencing the Option and
instructions signed by the Optionee requesting that the Company deliver the
Shares of Common Stock subject to the Option to the broker-dealer on behalf

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of the Optionee and specifying the account into which such Shares should be
deposited, (ii) adequate provision has been made with respect to the payment
of any withholding taxes due upon such exercise and (iii) the broker-dealer
and the Optionee have otherwise complied with Section 220.3(e)(4) of
Regulation T, 12 CFR Part 220;

     d)   Certificates for Shares of Common Stock purchased upon the exercise
of the Option shall be issued in the name of the Optionee and delivered to
the Optionee as soon as practicable following the effective date on which the
Option is exercised.

5.   Effect of Termination of Employment.  This Option shall not be subject
to termination in accordance with the Plan in the event that the employment
of the Optionee with the Company shall terminate.

6.   Acceleration of Exercise Date Upon Change in Control.  Upon the
occurrence of a "change in control" (as defined in the Plan) the Option shall
become fully and immediately exercisable and shall remain exercisable until
its expiration, termination or cancellation pursuant to the terms of the Plan
and this Option Agreement.

7.   Investment Representations.  The Optionee hereby represents and warrants
that:

     (a)  Any Shares purchased upon exercise of the Option shall be acquired
for the Optionee's account for investment only, and not with a view to, or
for sale in connection with, any distribution of the Shares in violation of
the Securities Act of 1933, as amended ("Securities Act"), any rule or
regulation under the Securities Act, or any applicable state securities law.

     (b)  The Optionee has had such opportunity as the Optionee has deemed
adequate to obtain from representatives of the Company such information as is
necessary to permit the Optionee to evaluate the merits and risks of his
investment in the Company.

     (c)  The Optionee is able to bear the economic risk of holding any
Shares acquired pursuant to the exercise of the Option for an indefinite
period.

Upon exercise of the Option, the Optionee shall be deemed to have reaffirmed,
as of the date of exercise, the representations made in this Section 7.

8.   Securities Law Matters.  The Company shall be under no obligation to
affect the registration pursuant to the Securities Act of any Shares to be
issued pursuant the Option or to effect similar compliance under any state
securities laws.  Notwithstanding anything to the contrary, the Company shall
not be obligated to cause to be issued or delivered any certificates
evidencing the Shares pursuant to the Option unless and until the Company is
advised by its counsel that the issuance and delivery of such certificates is
in compliance with all applicable laws, regulations of governmental authority
and the requirements of any securities exchange on which the Shares of Common
Stock are traded.  The Company may, in its sole discretion, defer the


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effectiveness of any exercise of the Option in order to allow the issuance of
Shares of Common Stock pursuant to the Option to be made pursuant to
registration or an exemption from the registration or other methods for
compliance available under federal or state securities laws.  The Company
shall inform the Optionee in writing of its decision to defer the
effectiveness of the exercise of the Option.  During the period that the
effectiveness of the exercise of the Option has been deferred, the Optionee
may, by written notice, withdraw such exercise and obtain the refund of any
amount paid with respect thereto.

9.   Withholding Taxes.  The Company's obligation to deliver Shares upon
exercise of the Option shall be subject to the Optionee's satisfaction of all
applicable federal, state and local tax withholding requirements, in
accordance with the provisions of the Plan.

10.  Legend on Stock Certificate.  If appropriate, all stock certificates
representing Shares of Common Stock issued to the Optionee upon exercise of
the Option shall have affixed thereto a legend substantially in the following
form, in addition to any other legend required by applicable law, unless such
shares have been acquired by Optionee pursuant to an effective registration
statement under the Securities Act of 1933:

     "The shares of stock represented by this certificate have not been
     registered under the Securities Act of 1933, as amended, and may not
     be transferred, sold or otherwise disposed of in the absence of an
     effective registration statement with respect to the shares evidenced
     by this certificate, or an opinion of counsel satisfactory to the
     Company to the effect that registration under such Act is not required."

11.  Non-Transferability.  The Option shall not be assignable or transferable
otherwise than by will or by the laws of descent and distribution.  During
the lifetime of the Optionee, the Option shall be exercisable only by him.

12.  Rights of Stockholder.  The Optionee shall have no rights as a
stockholder with respect to any Shares subject to the Option until the date
of the issuance of a stock certificate with respect to such Shares.  Except
as otherwise expressly provided in the Plan, no adjustment to the Option
shall be made for dividends or other rights for which the record date occurs
prior to the date such stock certificate is issued.

13.  No Special Employment Rights Created.  Nothing contained in the Option
or the Plan shall confer upon the Optionee any right with respect to the
continuation of his employment, if any, by the Company or interfere in any
way with the right of the Company, subject to the terms of any separate
employment agreement to the contrary, at any time to terminate such
employment or to increase or decrease the compensation of the Optionee from
the rate in existence at the time of the grant of the Option.





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14.  Failure to Comply.  The failure by the Optionee to comply with any of
the terms and conditions of the Option or of the Plan, unless such failure is
remedied by the Optionee within ten days after having been notified of such
failure by the Incentive Plan Committee, shall be grounds for the
cancellation and forfeiture of the Option, in whole or in part, as the
Committee, in its absolute discretion, may determine.

15.  Binding Effect.  The Optionee hereby acknowledges receipt of a copy of
the Plan and agrees to be bound by all the terms and provisions thereof.  The
terms of the Plan as it presently exists, and as it may hereafter be amended,
are deemed incorporated herein by reference, and any conflict between the
terms of this Option Agreement and the provisions of the Plan shall be
resolved by the Committee, whose determination shall be final and binding on
all parties.

16.  Notices.  Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or by
registered or certified mail, or facsimile, addressed to a party at the
address set forth herein or at such other address as such party may designate
by notice in accordance with this paragraph.

IN WITNESS WHEREOF, the Company has caused this Option Agreement to be
executed by its duly authorized officer and the Optionee has executed this
Agreement as of the day and year first above written.

BION ENVIRONMENTAL TECHNOLOGIES, INC.


By:/s/ Mark A. Smith
   Mark A. Smith, President






















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                            OPTION EXERCISE FORM


TO:     BION ENVIRONMENTAL TECHNOLOGIES, INC.
        641 Lexington Avenue, 17th Floor
        New York, New York
        Attention:  Secretary

RE:     Notice of Intention to Exercise Option
        (_______ shares at $____ per share, exercise period _______,
        20___-____________)

I am the Optionee under the Non Qualified Stock Option Agreement
("Agreement") entered into with Bion Environmental Technologies, Inc.
("Company") on _____________________, 20__.  Pursuant to such Agreement, I
hereby provide you with official notice that I elect to exercise my Option to
purchase Shares of the Company's Common Stock as follows:

Number of Shares: ______________________

Effective Date of Exercise:________________

I understand that payment for the Shares of Common Stock to be purchased by
me pursuant to the exercise of the Option must be made on the effective date
of exercise in accordance with the Plan unless I elect to exercise the Option
pursuant to the "cashless exercise" provision in the Agreement.  I further
understand and agree that the Company shall have the right to require me to
remit to the Company in cash an amount sufficient to satisfy federal, state
and local withholding tax requirements, if any, attributable to my exercise
of the Option prior to the delivery of any certificate or certificates for
such Shares.

I understand that this election to exercise the Option is irrevocable once it
is effective in accordance with the terms and conditions of the Plan.

The certificate for the Shares should be delivered to me at the address
listed below:


NAME OF OPTIONEE:  _________________________________________________________

ADDRESS: ___________________________________________________________________

SOCIAL SECURITY NUMBER:_________________

DATED: ______________, 20___             ___________________________________
                                         Signature of Optionee