8-K

                                UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

                                   FORM 8-K

                                CURRENT REPORT

                      Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


                                December 20, 2010
               ------------------------------------------------
               Date of Report (date of earliest event reported)


                    BION ENVIRONMENTAL TECHNOLOGIES, INC.
             ----------------------------------------------------
             Exact name of Registrant as Specified in its Charter

         Colorado                 000-19333                84-1176672
- ---------------------------    ---------------   ---------------------------
State or Other Jurisdiction    Commission File   IRS Employer Identification
     of Incorporation              Number                  Number


           Box 566/1774 Summitview Way, Crestone, Colorado 81131
         ----------------------------------------------------------
         Address of Principal Executive Offices, Including Zip Code


                                (212) 758-6622
             --------------------------------------------------
             Registrant's Telephone Number, Including Area Code


                                 Not applicable
          -----------------------------------------------------------
          Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act
    (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
    (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
    Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
    Exchange Act (17 CFR 240.13e-4(c))

ITEM 5.02  DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN
OFFICERS.

     On December 22, 2010 the Company executed a final agreement with William
O'Neill pursuant to which he will become Bion's CEO on January 1, 2011. The
agreement runs through December 31, 2014.  Mr. O'Neill will also join the
Company's Board of Directors at that date.  Prior to joining the Company, Mr.
O'Neill served as Vice President-Business Development of Advanced Brands
until its sale during 2010.  The 'short-form' agreement (which is
incorporated into the final agreement) and Mr. O'Neill's resume are attached
as Exhibits 10.1 and 10.2 to our Form 8-K dated November 11, 2010. The final
agreement is attached as Exhibit 10.1 hereto (without exhibits).

     On December 21, 2010 the Company executed a final agreement with
Edward T. Schafer pursuant to which he will become Bion's Executive Vice
Chairman on January 1, 2011. The agreement runs through December 31, 2013.
Mr. Schafer will also join the Company's Board of Directors at that date.
Mr. O'Neill previously served as Governor of North Dakota and US Secretary of
Agriculture.  The 'short-form' agreement (which is incorporated into the
final agreement) is attached as Exhibits 10.1 to our Form 8-K dated July 27,
2010. The final agreement is attached as Exhibit 10.2 hereto (without
exhibits).  Mr. Schafer's resume is attached hereto as Exhibit 10.3.

ITEM 8.01 OTHER EVENTS.

     On December 20, 2010 the Company was informed that the Pennsylvania
Infrastructure Investment Authority ('Pennvest') had approved our initial
reimbursement/draw request of approximately $1.8 million (before retainage)
on the Company's previously announced loan from Pennvest for the initial
stage of the Kreider project.  Bion anticipates receipt of such funds
(subject to the terms and conditions of the loan) from Pennvest during the
first week of January 2011.  The Company will be making further
reimbursement/draw requests over the next months as construction proceeds and
is completed and operations commence on the initial Kreider system.

ITEM 9.01  FINANCIAL STATEMENTS AND EXHIBITS.

     (a)  Financial Statements of Businesses Acquired.

          Not Applicable.

     (b)  Pro Forma Financial Information

          Not Applicable.

     (c)  Shell Company Transactions

          Not Applicable.

     (d)  Exhibits

          Exhibit 10.1   O'Neill Employment Agreement (dated December 22,
                         2010).

          Exhibit 10.2   Schafer Employment Agreement (dated December 21,
                         2010).

          Exhibit 10.3   Biography of Edward T. Schafer.


                                  SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                   Bion Environmental Technologies, Inc.



Date:  December 28, 2010           By:/s/ Mark A. Smith
                                      Mark A. Smith, President

EX-10

EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT


     THIS AGREEMENT by, between and among Bion Environmental Technologies,
Inc. ('Bion') together with its wholly-owned subsidiaries, are sometimes
referred to as the ('Bion Companies'), and Bill O'Neill ('BON') is executed
to be effective January 1, 2011. The previously executed email agreement/term
sheet dated November 16, 2010 ('Initial Agreement') sets forth the material
terms of this Agreement and is incorporated herein by reference and attached
hereto as Exhibit A.

     WHEREAS the Bion Companies desire to receive the services of BON upon
the terms and conditions set forth in this Agreement;

     AND WHEREAS BON desires to provide to the Bion Companies with his
services upon the terms and conditions set forth in this Agreement;

     NOW THEREFORE, in consideration of the mutual covenants and conditions
hereinafter set forth, the Bion Companies do hereby agree to engage the
employee services of BON, and (with the express consent of BON as evidenced
by his signature below), upon the terms and conditions set forth in the
following paragraphs:

     1)   The Term of this Agreement shall run from January 1, 2011
('Commencement Date'), through a date four years after the Commencement Date
('Term'), during which Term BON shall provide to the Bion Companies his
'entrepreneurial' full-time services as set forth in the following
provisions:

          a)  BON shall provide his full-time employee services to the Bion
Companies as Chief Executive Officer ('CEO') of Bion, with duties per
discussions to date and as set by the Board of Directors from time-to-time;

          b)  BON shall, at the request of Bion's Board of Directors, also
serve as CEO (and/or in other senior management officer ('SMO') positions) of
Bion's subsidiaries ;

          c)  BON, as CEO and/or SMO, of Bion and/or its subsidiaries will be
part of a small senior management cadre which will divide among themselves
all of the necessary management duties of the Bion Companies; BON shall
report to the Board of Directors of Bion, which will also be responsible for
evaluation of his performance; and

          d)  Additionally, BON shall serve as a member of Bion's Board of
Directors.

          e)  BON and the Bion Companies shall work out a mutually acceptable
manner of handling office costs, business expenses, travel expenses, etc.
which is consistent with the current treatment by the Bion Companies in
relation to other senior management and senior technical employees; in
addition, BON shall be eligible for reimbursement for reasonable medical
insurance premiums for his family and shall have the right to participate in
existing or subsequently adopted 401(k) plans and/or other senior management
incentive and/or bonus plans;

          f)  BON shall initially have not less than 4 weeks of paid vacation
per year which vacation time shall be scheduled in coordination with the
senior management of the Bion Companies in a manner consistent with BON's
duties.

     2)   Compensation during the Term of this Agreement (all compensation
items herein and this entire Agreement presume that Bion is receiving and BON
is providing the services as set forth above):

          a)  Cash compensation from the Bion Companies to BON for services
provided by BON shall be initially $300,000 per year, which shall be payable
in twice monthly pre-tax installments of $12,500, commencing with the first
month of full-time service;

          b)  Pursuant to the Initial Agreement, Bion has granted to BON the
options as set forth therein, each of which Options may be exercised and
shall vest as set forth in the Initial Agreement; PROVIDED, HOWEVER, if BON
fails to provide the services to the Bion Companies for the entire Term
(except if this is the result of the Bion Companies terminating BON for other
than cause), all unvested Options on the date on which BON's termination
takes place shall be automatically cancelled on such termination date; for
the purposes of these provisions, termination for cause shall include,
without limitation, any of the events listed below:

              A)  BON's conviction of any felony criminal act including,
without limitation, misappropriation of funds or property of the Bion
Companies or any other felony criminal act;

              B)  BON's misfeasance or malfeasance in office, which shall
mean fraud, dishonesty, willful misconduct and/or substantial neglect of
duties; and

              C)  Breach by BON of any material provision of this Agreement;

FURTHER PROVIDED, if BON elects to terminate his employment by Bion (other
than as a result of material uncured breach by Bion of the terms of this
Agreement which remains uncured for 120 days after written notice from BON to
Bion), or if Bion terminates BON for cause, the Options which have vested
shall be cancelled on a pro-rata basis with BON keeping the percentage of the
vested Options equal to the percentage of the Term during which BON
appropriately provided his services to Bion pursuant to this Agreement.

          d)  In the event that the Bion Companies elect to terminate BON
without cause or BON passes away during the Term, the Bion Companies shall
pay BON his full salary and benefits (subject to reasonable mitigation by
BON) for the lesser of the balance of the Term or six (6) months, which
payout shall be paid to BON's wife/estate if BON has passed away during the
payout period.

          e)  Further, while the Bion Companies and BON have discussed the
Bion's 'goal' of being able to justify the declaration/payment of substantial
cash and/or stock bonuses  to senior management (and consultants performing
senior management functions) once initial major projects (initial Integrated
Projects and/or Central Processing Facilities with integrated ethanol plants
and/or 'end-users') have been financed/constructed/completed, BON understands
that the Bion Companies are making no commitments related to such bonuses to
BON (or any other officer, director, employee or consultant) other than that
BON will be treated/evaluated in the same manner as all other senior
management personnel (including consultants.  Any such bonuses will be
declared/paid only when and if the then existing Board of Directors of Bion
determines that such bonuses have been earned and are in the best interests
of the shareholders.

          f)  Additionally, to the extent that Bion develops policies
regarding vesting of Options and/or bonuses in the event of a 'change of
control' in the future, BON will be treated in the same manner as all other
SMO's, directors, key employees & consultants pursuant to such policies.


     3)   BON, through a date no earlier than 2 years after the expiration of
the Term (including any extensions thereof) will abide by the terms and
provisions of a Confidentiality/Proprietary Information Agreement (copy
attached hereto as an Exhibit B) and further agrees that, unless expressly
waived by the Bion Companies in writing, BON will require any and all persons
who have access to confidential information of the Bion Companies to execute
copies of agreements substantially similar to Exhibit B and that
notwithstanding any other terms herein, Exhibit B shall remain in full force
and effect; and BON expressly acknowledges and agrees that: a) at no time
during the Term or during a two (2) year period following the end of the Term
(including any extensions thereto) shall BON compete with the Bion Companies;
for the purposes of this provision, 'compete' shall be defined as (and be
limited to): i) engaging directly or as an employee or consultant in business
activities which include and/or are based on the remediation of agricultural
and food processing waste streams (including livestock) and/or the
integration of 'end-product' /'protein production' activities and/or
renewable energy/biofuel production activities with livestock CAFOs; ii)
PROVIDED, HOWEVER, that this provision shall not prevent BON from engaging in
activities in the 'animal protein products' business that neither involve any
of Bion's intellectual property and are consistent limitations set forth in
Exhibit B  and sub-paragraph i) immediately above; b) all work product,
inventions, etc. of BON made during BON's employment pursuant to this
Agreement shall be the sole property of the Bion Companies and BON, as
applicable, shall execute such assignments and /or other documents as may be
required to fully vest such ownership in the Bion Companies; and c) all
proprietary information and other information concerning the Bion Companies
(and each of its partners/joint venturers) acquired pursuant to the service
of BON to the Bion Companies shall at all times be and remain the sole
property of the Bion Companies regardless of how such proprietary information
is stored and upon termination of this Agreement (w/o retaining copies), BON
shall return all such proprietary information to the Bion Companies on
whatever medium it is evidenced (including w/o limitation paper files,
computer memory media, etc.)

     4)   a)  The Bion Companies shall reimburse BON for purchase of basic
equipment (computer/cell phone/etc) acquired during the Term which equipment
is necessary for BON's performance of his duties hereunder, which equipment
will be owned by the Bion Companies.

          b)  BON shall initially work from his home office in Tampa, Florida
which requirement shall not be changed except by mutual written agreement
between BON and Bion.

          c)  This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns and
any person acquiring, whether by merger, consolidation, liquidation, purchase
of assets or otherwise, all or substantially all of a party's equity or
assets and business.

          d)  It is the intention of the parties hereto that this Agreement
and the performance hereunder and all suits and special proceedings connected
herewith be construed in accordance with and pursuant to the laws of the
State of Colorado and that in any action, special proceeding or other
proceeding that may be brought arising out of, in connection with, or by
reason of this Agreement, the laws of the State of Colorado shall be
applicable and shall govern to the exclusion of the law of any other forum,
with regard to the jurisdiction in which any action or special proceeding may
be instituted.

          e)  Any claim or controversy, which arises out of or relates to
this Agreement, or breach of it, shall be settled by arbitration.

          f)  Should any party hereto waive breach of any provision of this
Agreement, that waiver shall not operate or be construed as a waiver of any
further breach of this Agreement.

          g)  In the event that any one or more of the provisions of this
Agreement or any portions there under is determined to be invalid, illegal,
or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected or
impaired thereby.

          h)  This Agreement shall constitute the entire agreement between
the parties hereto. Oral modifications of the Agreement shall have no effect.
This Agreement may be altered only by a written agreement signed by the party
against whom enforcement of any waiver, change, modification, extension or
discharge is sought.

                                     Bion Environmental Technologies, Inc.



                                     By: /s/ Mark A. Smith, President


                                     /s/ Bill E. O'Neill
                                     Bill O'Neill

EX-10

EXHIBIT 10.2

                                   AGREEMENT


     THIS AGREEMENT by, between and among Bion Environmental Technologies,
Inc. ('Bion') (Bion, together with its wholly-owned subsidiaries, are
sometimes referred to as the 'Bion Companies') and Edward T. Schafer ('ES')
is executed to be effective January 1, 2011. The previously executed email
agreement/term sheet dated August 12, 2010 ('Initial Agreement') sets forth
the material terms of this Agreement and is incorporated herein by reference
and is attached hereto as Exhibit A.

     WHEREAS the Bion Companies desire to receive the services of ES upon the
terms and conditions set forth in this Agreement;

     AND WHEREAS ES desires to provide to the Bion Companies with his
services upon the terms and conditions set forth in this Agreement;

     NOW THEREFORE, in consideration of the mutual covenants and conditions
hereinafter set forth, the Bion Companies do hereby agree to engage the
services of ES (with the express consent of ES as evidenced by his signature
below) upon the terms and conditions set forth in the following paragraphs:

     1)   The Term of this Agreement shall run from January 1, 2011
('Commencement Date'), through a date three years after the Commencement Date
('Term'), during which Term ES shall provide to the Bion Companies his
services as set forth in the following provisions:

          a)  ES shall provide his senior management services on an
approximately '75% full time basis' to the Bion Companies, initially as
Executive Vice Chairman ('VC') of Bion, with duties per discussions to date
and as set forth in the Initial Agreement and as determined by Bion's Board
of Directors from time-to-time;

          b)   ES shall, at the request of Bion's Board of Directors, also
serve in such senior management officer ('SMO') positions at Bion's
subsidiaries as determined by the Board of Directors from time-to-time;

          c)  ES, as VC and/or SMO of Bion and/or its subsidiaries, will be
part of a small senior management cadre which will divide among themselves
all of the necessary management duties of the Bion Companies; ES shall report
to the Board of Directors of Bion, which will also be responsible for
evaluation of his performance; and

          d)   Additionally, ES shall serve as a member of Bion's Board of
Directors.

          e)   ES and the Bion Companies shall work out a mutually acceptable
manner of handling office costs, business expenses, travel expenses, etc.
which is consistent with the current treatment by the Bion Companies in
relation to other senior management and senior technical employees; in
addition, ES shall be eligible for reimbursement for reasonable medical
insurance premiums for his family and shall have the right to participate in
existing or subsequently adopted 401(k) plans and/or other senior management
incentive and/or bonus plans;

          f)   ES shall schedule vacation time in coordination with the
senior management of the Bion Companies in a manner consistent with ES's
duties.

     2)   Compensation during the Term of this Agreement (all compensation
items herein and this entire Agreement presume that Bion is receiving and ES
is providing the services as set forth above):

          a)  Compensation from the Bion Companies to BON for services
provided by ES shall initially be at an annual rate of $250,000 per year,
which compensation shall consist of $150,000 cash compensation and $100,000
payable in Bion's common stock (issued pursuant to Bion's 2006 Consolidated
Incentive Plan and its effective S-8 Registration Statement on a monthly
basis at the closing bid price of the final three  trading days of the prior
calendar month); PROVIDED, HOWEVER, commencing on the month following the
first calendar month end during the Term  after the date on which Bion has
completed an equity financing in excess of $3 million (net of commissions and
other offering expenses) in cash, ES's  compensation shall thereafter be a an
annual rate of $225,000, all of which shall be payable in cash;
NOTWITHSTANDING such provision,  the transition to all cash compaensation
shall take place no later July 1, 2011;such cash compensation  shall be
payable in twice monthly equal  installments commencing unless agreed
otherwise in writing;

          b)  pursuant to the Initial Agreement, Bion has granted to ES on
the  options as set forth therein('Initial Options'), each of which Initial
Options may be exercised and shall vest as set forth in the Initial
Agreement; in addition, effective upon execution of this Agreement, Bion
shall, and hereby does, grant to ES an additional 200,000 options ('New
Options'), which New Options shall vest on the initial date of the Term and
shall be exercisable until January 15, 2018 at a price equal to $.10 above
the closing bid price on December 31, 2010, PROVIDED, HOWEVER, if ES fails to
provide the services to the Bion Companies for the entire Term (except if
this is the result of the Bion Companies terminating ES for other than
cause), all unvested Options on the date on which ES's termination takes
place shall be automatically cancelled on such termination date; for the
purposes of these provisions, termination for cause shall include, without
limitation, any of the events listed below:

               A)  ES's conviction of any criminal act including, without
limitation, misappropriation of funds or property of the Bion Companies or
any other felony criminal act;

               B)  ES's misfeasance or malfeasance in office, which shall
mean fraud, dishonesty, willful misconduct or substantial neglect of duties;
and

               C)  Breach by ES of any material provision of this Agreement;

FURTHER PROVIDED, if ES elects to terminate his employment by Bion (other
than as a result of material uncured breach by Bion of the terms of this
Agreement which remains uncured for 120 days after written notice from ES to
Bion) or if Bion terminates ES for cause, the Options which have vested shall
be cancelled on a pro-rata basis and ES shall keep the percentage of Options
which equals the percentage of the Term during which ES appropriately
provided his services to Bion pursuant to this Agreement.


          d)  In the event that the Bion Companies elect to terminate ES
without cause, the Bion Companies shall pay ES his full salary and benefits
(subject to reasonable mitigation by ES) for the lesser of the balance of the
Term or six (6) months.

          e)  Further, while the Bion Companies and ES have discussed the
Bion's 'goal' of being able to justify the declaration/payment of substantial
cash and/or stock bonuses  to senior management (and consultants performing
senior management functions) once initial major projects (initial Integrated
Projects and/or Central Processing Facilities with integrated ethanol plants
and 'end-users') have been financed/constructed/completed, ES understands
that the Bion Companies are making no commitments related to such bonuses to
ES (or any other officer, director, employee or consultant) other than that
ES will be treated/evaluated in the same manner as all other senior
management personnel (including consultants).  Any such bonuses will be
declared/paid only when and if the then existing Board of Directors of  Bion
determines that such bonuses have been earned and are in the best interests
of the shareholders.

          f)  Additionally, to the extent that Bion develops policies
regarding vesting of Options and/or bonuses in the event of a 'change of
control' in the future, ES will be treated in the similar manner as all other
SMO's, directors, key employees & consultants pursuant to such policies.

     3)   ES, through a date no earlier than 2 years after the expiration of
the Term (including any extension thereof) will abide by the terms and
provisions of a Confidentiality/Proprietary Information Agreement (copy
attached hereto as an Exhibit B) and further agrees that, unless expressly
waived by the Bion Companies in writing, ES will require any and all persons
who have access to confidential information of the Bion Companies to execute
copies of agreements substantially similar to Exhibit B and that
notwithstanding any other terms herein, Exhibit B shall remain in full force
and effect; and ES expressly acknowledges and agrees that: a) at no time
during the Term or during a two (2) year period following the end of the Term
(including any extensions thereto) shall ES compete with the Bion Companies;
b) all work product, inventions, etc. of ES made during ES's employment
pursuant to this Agreement shall be the sole property of the Bion Companies
and ES, as applicable, shall execute such assignments and /or other documents
as may be required to fully vest such ownership in the Bion Companies; and c)
all proprietary information and other information concerning the Bion
Companies (and each of its partners/joint venturers) acquired pursuant to the
service of ES to the Bion Companies shall at all times be and remain the sole
property of the Bion Companies regardless of how such proprietary information
is stored and upon termination of this Agreement (w/o retaining copies), ES
shall return all such proprietary information to the Bion Companies on
whatever medium it is evidenced (including w/o limitation paper files,
computer memory media, etc.)

     4)   a)  The Bion Companies shall reimburse ES for purchase of basic
equipment (computer/cell phone/etc.) acquired during the Term which is needed
for performance of ES's duties to the Bion Companies, which equipment will be
owned by the Bion Companies.

          b)  ES shall initially work from his home office in North Dakota
which requirement shall not be changed except by mutual written agreement
between ES and Bion.

          c)  This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns and
any person acquiring, whether by merger, consolidation, liquidation, purchase
of assets or otherwise, all or substantially all of a party's equity or
assets and business.

          d)  It is the intention of the parties hereto that this Agreement
and the performance hereunder and all suits and special proceedings connected
herewith be construed in accordance with and pursuant to the laws of the
State of Colorado and that in any action, special proceeding or other
proceeding that may be brought arising out of, in connection with, or by
reason of this Agreement, the laws of the State of Colorado shall be
applicable and shall govern to the exclusion of the law of any other forum,
with regard to the jurisdiction in which any action or special proceeding may
be instituted.

          e)  Any claim or controversy, which arises out of or relates to
this Agreement, or breach of it, shall be settled by arbitration.

          f)  Should any party hereto waive breach of any provision of this
Agreement, that waiver shall not operate or be construed as a waiver of any
further breach of this Agreement.

          g)  in the event that any one or more of the provisions of this
Agreement or any portions there under is determined to be invalid, illegal,
or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected or
impaired thereby.

          h)  This Agreement shall constitute the entire agreement between
the parties hereto Oral modifications of the Agreement shall have no effect.
This Agreement may be altered only by a written agreement signed by the party
against whom enforcement of any waiver, change, modification, extension or
discharge is sought.

                                     Bion Environmental Technologies, Inc.


                                     By: /s/ Mark A. Smith, President


                                     /s/ Edward T. Schafer
                                     Edward T. Schafer

EX-10

EXHIBIT 10.3

                       BIOGRAPHY OF EDWARD T. SCHAFER

     Edward Schafer has served as a consultant to Bion since July 2010 and
will join the Company's senior management team as Executive Vice Chairman and
a member of the Company's Board of Directors on January 1, 2010.  Mr. Schafer
has served as a trustee of the Investors Real Estate Trust ('IRET') since
September 2009; he also served as a trustee of the IRET from September 2006
through December 2007, when he resigned from the IRET's Board to serve as
Secretary of the U.S. Department of Agriculture under President George W.
Bush.  Mr. Schafer, a private investor, is a former Governor of North Dakota.
He served as Chief Executive Officer of Extend America, a telecommunications
company, from 2001 to 2006, and he has been a member of the Boards of RDO
Equipment Co., a privately-owned agricultural and construction equipment
company (August 2001 to July 2003), the Theodore Roosevelt-Medora Foundation
(September 2004 through December 2007), and the University of North Dakota
Foundation (June 2005 to December 2007).  Mr. Schafer brings the following
experience, qualifications, attributes and skills to the Company:  general
business management and strategic planning experience from his service as
Chief Executive Officer of Extend America and extensive government,
regulatory, strategic planning, administrative and public affairs experience
from his service as Governor of North Dakota and Secretary of the Department
of Agriculture.