Exhibit 10.5

                               AMENDMENT NO. ONE

                                       TO

                                THE BEARD COMPANY

                     2003-2 DEFERRED STOCK COMPENSATION PLAN



                           Adopted: September 30, 2003

                           Amended: February 13, 2004

<PAGE>
                                AMENDMENT NO. ONE
                                       TO
                                THE BEARD COMPANY
                     2003-2 DEFERRED STOCK COMPENSATION PLAN
                                                                            Page
                                                                            ----

ARTICLE I       Purpose and Effective Date................................... 1

ARTICLE II      Definitions.................................................. 1

ARTICLE III     Shares Available Under the Plan.............................. 3

ARTICLE IV      Administration............................................... 3

ARTICLE V       Eligibility.................................................. 3

ARTICLE VI      Deferral Elections In Lieu of Cash Payments.................. 3

ARTICLE VII     Settlement of Stock Units.................................... 4

ARTICLE VIII    Unfunded Status.............................................. 5

ARTICLE IX      Designation of Beneficiary................................... 5

ARTICLE X       Adjustment Provisions........................................ 5

ARTICLE XI      Compliance with Rule 16b-3................................... 6

ARTICLE XII     General Provisions........................................... 6

<PAGE>
                                AMENDMENT NO. ONE
                                       TO
                                THE BEARD COMPANY
                     2003-2 DEFERRED STOCK COMPENSATION PLAN


                                    ARTICLE I

                           PURPOSE AND EFFECTIVE DATE

     1.1 Purpose. The Beard Company 2003-2 Deferred Stock Compensation Plan (the
"Plan") is intended to advance the interests of the Company and its shareholders
by providing a means to attract and retain highly-qualified  persons to serve as
Officers and Directors  and to promote  ownership by Officers and Directors of a
greater  proprietary  interest in the Company,  thereby  aligning such interests
more closely with the interests of shareholders of the Company.

     1.2 Effective Date. This Plan, as amended, shall become effective September
30,  2003  subject  to  approval  of  the  shareholders  of the  Company  by the
affirmative vote of a majority of shares of the Company present, or represented,
and  entitled  to vote on the  subject  matter,  at the 2004  Annual  Meeting of
Shareholders of the Company at which a quorum is present or by a written consent
of the holders of a majority of the Company's then outstanding shares.

                                   ARTICLE II

                                   DEFINITIONS

     The following terms shall be defined as set forth below:

     2.1 "Board" means the Board of Directors of the Company.

     2.2 "Compensation" means all or part of the cash remuneration payable to an
Officer in his or her capacity as an Officer.

     2.3 "Committee" means the Compensation Committee of the Board.

     2.4 "Company"  means The Beard  Company,  an Oklahoma  corporation,  or any
successor thereto.

     2.5 "Deferral  Date" means the date Fees or  Compensation  would  otherwise
have been paid to the Participant.

     2.6 "Director" means any individual who is a member of the Board.

     2.7 "Exchange Act" means the  Securities  Exchange Act of 1934, as amended.
References  to any provision of the Exchange Act include  rules  thereunder  and
successor provisions and rules thereto.

     2.8  "Fair  Market  Value"  means the  "Market  Price"  as  defined  in the
Certificate of Designations for the Company's  outstanding  Series A Convertible
Preferred Stock (the "Certificate");  provided,  however, that in the event that
Fair  Market  Value is less  than  the  "Conversion  Price"  as  defined  in the
Certificate,  then the Fair  Market  Value  shall be the average of (i) the last
sale of such  security on any day there are sales of such  securities on the OTC
Bulletin  Board(R),  or (ii) if there  have  been no  sales on the OTC  Bulletin
Board(R)  on any day,  the best asked price at the end of such day, in each such
case averaged over a period of 21 days consisting of the day as of which "Market
Price" is being  determined and the 20  consecutive  business days prior to such
day.

     2.9  "Fees"  means all or part of any  retainer  and/or  fees  payable to a
Director in his or her capacity as a Director.

     2.10 "Officer" means any person so designated by the Board.

     2.11  "Participant"  means  a  Director  or  Officer  who  defers  Fees  or
Compensation under Article VI of this Plan.

     2.12 "Reconciliation Events" means certain events which cause the amount of
Fees or Compensation  actually paid during a period to differ from the amount of
Fees  credited  pursuant  to Section  6.4,  including,  but not  limited to, the
following:  an  increase or decrease  in Fees paid,  additional  meetings  held,
missed attendance at certain meetings,  newly elected directors and Terminations
of Service.

     2.13 "Secretary" means the Corporate  Secretary or any Assistant  Corporate
Secretary of The Beard Company.

     2.14 "Shares"  means shares of the common stock of The Beard  Company,  par
value $.001333 per share, or of any successor  corporation or other legal entity
adopting this Plan.

     2.15 "Stock Units" means the credits to a Participant's  Stock Unit Account
under Article VI of this Plan, each of which represents the right to receive one
Share upon settlement of the Stock Unit Account.

     2.16 "Stock Unit Account" means the bookkeeping  account established by the
Company pursuant to Section 6.4.

     2.17  "Termination  Date"  means the date the Plan  terminates  pursuant to
Section 12.8.

     2.18 "Termination of Service" means termination of service as a Director or
Officer in any of the following circumstances:

          (a) Where the Participant voluntarily resigns or retires;

          (b) Where a Director is not  re-elected  (or elected in the case of an
     appointed Director) to the Board by the shareholders,  or an Officer is not
     re-elected as an Officer by the Board; or

          (c) Where the Participant dies.

                                   ARTICLE III

                         SHARES AVAILABLE UNDER THE PLAN

     Subject to  adjustment  as  provided  in Article X, the  maximum  number of
Shares that may be  distributed  in settlement of Stock Unit Accounts under this
Plan shall not exceed 400,000.  Such Shares may include  authorized but unissued
Shares or treasury Shares.

                                   ARTICLE IV

                                 ADMINISTRATION

     4.1 This Plan shall be administered by the Board's Compensation  Committee,
or such  other  committee  or  individual  as may be  designated  by the  Board.
Notwithstanding the foregoing,  no Director who is a Participant under this Plan
shall  participate in any  determination  relating solely or primarily to his or
her own Shares, Stock Units or Stock Unit Account.

     4.2 It  shall be the  duty of the  Committee  to  administer  this  Plan in
accordance with its provisions and to make such recommendations of amendments or
otherwise as it deems necessary or appropriate.

     4.3 The Committee  shall have the authority to make all  determinations  it
deems  necessary  or  advisable  for  administering  this  Plan,  subject to the
limitations in Section 4.1 and other explicit provisions of this Plan.

                                    ARTICLE V

                                   ELIGIBILITY

     Each  Director  and Officer of the Company  shall be eligible to defer Fees
and Compensation under Article VI of this Plan.

                                   ARTICLE VI

                   DEFERRAL ELECTIONS IN LIEU OF CASH PAYMENTS

     6.1 General Rule.  Each Director or Officer may, in lieu of receipt of Fees
or Compensation, defer such Fees or Compensation in accordance with this Article
VI.

     6.2 Timing of  Election.  Each  eligible  Director or Officer who wishes to
defer  Fees or  Compensation  under this Plan must make an  irrevocable  written
election at least six (6) months prior to the beginning of the date on which the
Fees or  Compensation  would  otherwise be paid;  provided,  however,  that with
respect to any election made by a newly-elected or appointed Director or Officer
("New  Participant  Elections"),  the Company  shall hold such  deferred Fees or
Compensation (without interest) and credit them pursuant to Section 6.4 on or as
of the date which follows by six months such deferral election. An election by a
Director or an Officer  previously in effect  September 30, 2003 shall be deemed
to be continuing and therefore  applicable to Fees or Compensation to be paid in
periods  unless the  Director  or Officer  revokes or changes  such  election by
filing a new  election  form thirty (30) days prior to the next payment date for
Fees or Compensation.

     6.3 Form of Election. An election shall be made in a manner satisfactory to
the Secretary. Generally, an election shall be made by completing and filing the
specified  election  form with the  Secretary  of the Company  within the period
described  in Section  6.2. At minimum,  the form shall  require the Director or
Officer to specify the following:

          (a) a percentage  (for Directors in 25%  increments,  and for Officers
     not less  than  10% and in 5%  increments  thereafter),  not to  exceed  an
     aggregate  of 100% of the Fees or  Compensation  to be deferred  under this
     Plan; and

          (b) the manner of settlement in accordance with Section 7.2.

     6.4 Establishment of Stock Unit Account. The Company will establish a Stock
Unit Account for each Participant. All Fees or Compensation deferred pursuant to
this Article VI shall be credited to the Participant's  Stock Unit Account as of
the Deferral Date and  converted to Stock Units as follows:  The number of Stock
Units shall equal the deferred Fees or  Compensation  divided by the Fair Market
Value of a Share on the Deferral Date, with fractional units calculated to three
(3) decimal places.

     6.5 Credit of Dividend  Equivalents.  As of each dividend payment date with
respect to Shares, each Participant shall have credited to his or her Stock Unit
Account  an  additional  number of Stock  Units  equal to:  the  per-share  cash
dividend  payable  with  respect  to a  Share  on  such  dividend  payment  date
multiplied by the number of Stock Units held in the Stock Unit Account as of the
close of  business  on the  record  date for such  dividend  divided by the Fair
Market Value of a Share on such dividend  payment date. If dividends are paid on
Shares in a form  other  than  cash,  then such  dividends  shall be  notionally
converted  to cash,  if their value is readily  determinable,  and credited in a
manner  consistent  with  the  foregoing  and,  if their  value  is not  readily
determinable,  shall be  credited  "in  kind" to the  Participant's  Stock  Unit
Account.

     6.6  Reconciliations.  The Company shall record all  Reconciliation  Events
and, as soon as reasonably practicable after the end of each calendar quarter or
after  a  Termination  of  Service,   make   appropriate   adjustments  to  each
Participant's  Stock  Unit  Account  to  reflect  such  Reconciliation   Events;
provided,  however,  the Fair Market  Value used to determine  such  adjustments
shall be the same Fair Market Value used to determine  the number of Stock Units
credited to such Participant's Stock Unit Account.

                                   ARTICLE VII

                            SETTLEMENT OF STOCK UNITS

     7.1 Settlement of Account.  The Company will settle a  Participant's  Stock
Unit Account in the manner described in Section 7.2 as soon as  administratively
feasible  following  the  earlier  of (i)  notification  of  such  Participant's
Termination of Service or (ii) the Termination Date.

     7.2 Payment  Options.  An election  filed  under  Article VI shall  specify
whether the  Participant's  Stock Unit Account is to be settled by delivering to
the  Participant (or his or her  beneficiary)  the number of Shares equal to the
number of whole  Stock  Units  then  credited  to the  Participant's  Stock Unit
Accounts, in (a) a lump sum, or (b) substantially equal annual installments over
a period not to exceed ten (10) years.  If, upon lump sum  distribution or final
distribution of an installment,  less than one whole Stock Unit is credited to a
Participant's Stock Unit Account, cash will be paid in lieu of fractional shares
on the date of such distribution.

     7.3  Continuation  of  Dividend  Equivalents.  If payment of Stock Units is
deferred and paid in installments,  the  Participant's  Stock Unit Account shall
continue to be credited with dividend equivalents as provided in Section 6.5.

     7.4 In Kind  Dividends.  If any "in kind"  dividends  were  credited to the
Participant's  Stock Unit Account  under Section 6.5,  such  dividends  shall be
payable  to the  Participant  in full on the date of the first  distribution  of
Shares under Section 7.2.

                                  ARTICLE VIII

                                 UNFUNDED STATUS

     The interest of each Participant in any Fees or Compensation deferred under
this Plan (and any Stock Units or Stock Unit Account relating  thereto) shall be
that of a general creditor of the Company.  Stock Unit Accounts, and Stock Units
(and,  if any,  "in kind"  dividends)  credited  thereto,  shall at all times be
maintained  by the  Company  as  bookkeeping  entries  evidencing  unfunded  and
unsecured general obligations of the Company.

                                   ARTICLE IX

                           DESIGNATION OF BENEFICIARY

     Each Participant may designate, on a form provided by the Committee, one or
more  beneficiaries  to receive the Shares described in Section 7.2 in the event
of  such  Participant's  death.  The  Company  may  rely  upon  the  beneficiary
designation last filed with the Committee,  provided that such form was executed
by the  Participant  or his or her  legal  representative  and  filed  with  the
Committee prior to the Participant's death.

                                    ARTICLE X

                              ADJUSTMENT PROVISIONS

     In the event any recapitalization,  reorganization,  merger, consolidation,
spin-off, combination, repurchase, exchange of shares or other securities of the
Company, stock split or reverse split, or similar corporate transaction or event
affects  Shares such that an  adjustment is determined by the Board or Committee
to be appropriate to prevent  dilution or  enlargement of  Participants'  rights
under  this  Plan,  then  the  Board or  Committee  will,  in a  manner  that is
proportionate to the change to the Shares and is otherwise equitable, adjust the
number or kind of Shares to be delivered upon  settlement of Stock Unit Accounts
under Article VII.

                                   ARTICLE XI

                           COMPLIANCE WITH RULE 16b-3

     Subject to Section  6.2,  it is the  intent of the  Company  that this Plan
comply in all  respects  with  applicable  provisions  of Rule  16b-3  under the
Exchange Act in connection with the deferral of Fees and Compensation.

                                   ARTICLE XII

                               GENERAL PROVISIONS

     12.1 No Right to Continue as an Officer or Director.  Nothing  contained in
this Plan will confer upon any  Participant any right to continue to serve as an
Officer or Director.

     12.2 No Shareholder  Rights Conferred.  Nothing contained in this Plan will
confer upon any  Participant  any rights of a shareholder  of the Company unless
and until  Shares  are in fact  issued or  transferred  to such  Participant  in
accordance with Article VII.

     12.3 Change to the Plan. The Board may amend, alter, suspend,  discontinue,
extend,   or  terminate  the  Plan  without  the  consent  of   shareholders  or
Participants, except that any such action will be subject to the approval of the
Company's  shareholders  at the next  annual  meeting of  shareholders  having a
record date after the date such action was taken if such stockholder approval is
required  by any  federal or state law or  regulation  or the rules of any stock
exchange or automated quotation system on which the Shares may then be listed or
quoted,  or if the Board  determines in its discretion to seek such  shareholder
approval;   provided,   however,  that,  without  the  consent  of  an  affected
Participant, no such action may materially impair the rights of such Participant
with respect to any Stock Units credited to his or her Stock Unit Account.

     12.4  Consideration;  Agreements.  The  consideration  for Shares issued or
delivered in lieu of payment of Fees or Compensation  will be the service of the
Officer or Director during the period to which the Fees or Compensation  paid in
the form of Shares related.

     12.5  Compliance  with  Laws  and  Obligations.  The  Company  will  not be
obligated  to  issue  or  deliver  Shares  in  connection  with  this  Plan in a
transaction  subject to the  registration  requirements of the Securities Act of
1933, as amended,  or any other federal or state securities law, any requirement
under any listing  agreement  between the  Company and any  national  securities
exchange  or  automated  quotation  system or any other  laws,  regulations,  or
contractual obligations of the Company, until the Company is satisfied that such
laws, regulations,  and other obligations of the Company have been complied with
in full.  Certificates  representing  Shares  delivered  under  the Plan will be
subject to such stop-transfer orders and other restrictions as may be applicable
under such laws,  regulations,  and other obligations of the Company,  including
any requirement that a legend or legends be placed thereon.

     12.6 Limitations on Transferability.  Stock Units and any other right under
the Plan that may  constitute a  "derivative  security" as generally  defined in
Rule 16a-1(c) under the Exchange Act will not be  transferable  by a Participant
except  by will or the laws of  descent  and  distribution  (or to a  designated
beneficiary in the event of a Participant's death); provided, however, that such
rights may be  transferred to one or more trusts or other  beneficiaries  during
the lifetime of the  Participant  in connection  with the  Participant's  estate
planning,  but only if and to the  extent  then  permitted  under Rule 16b-3 and
consistent with the  registration of the offer and sale of Shares on Form S-8 or
a successor  registration form of the Securities and Exchange Commission.  Stock
Units  and  other  rights  under  the  Plan  may  not  be  pledged,   mortgaged,
hypothecated, or otherwise encumbered, and shall not be subject to the claims of
creditors.

     12.7 Governing Law. The validity,  construction, and effect of the Plan and
any agreement  hereunder  will be determined in accordance  with the laws of the
State of Oklahoma, without giving effect to principles of conflicts of laws, and
applicable federal law.

     12.8 Plan Termination.  Unless earlier terminated by action of the Board or
Executive  Committee  of the  Board,  the Plan will  remain in effect  until the
earlier of (i) such time as no Shares remain  available  for delivery  under the
Plan and the Company has no further rights or obligations under the Plan or (ii)
September 30, 2013.