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EXHIBIT 4.4    
    

 
 

BETA OIL & GAS, INC.
  FORM OF
  WARRANT AGREEMENT    
    

        THIS WARRANT AGREEMENT (this "Agreement") is made and entered into as
of                         , 200    , between BETA
OIL & GAS, INC., a Nevada corporation (the "Company") and                        , an
individual ("Holder"). 

R E C I T A L S

        WHEREAS,
the Company proposes to issue to Holder                        warrants (the "Warrants"), each such Warrant entitling the holder
thereof to purchase one share of Common Stock, $0.001
par value, of the Company (the "Shares" or the "Common Stock"). 

        NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereto agree as follows: 

A G R E E M E N T

        1.     Warrant Certificates. The warrant certificates to be delivered pursuant to this Agreement (the "Warrant Certificates")
shall be in the form set forth in Exhibit A, attached hereto and made a part hereof, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted
by this Warrant Agreement. 

        2.     Vesting. The warrants shall vest as follows: (a)                         warrants shall be
immediately vested upon the
execution of this Agreement; (b)                         warrants shall vest upon the date which is
Holder's            year anniversary of employment with the Company; and
(c)     warrants shall vest upon the date which is Holder's                        year anniversary of
employment with the Company. If Holder shall cease her employment with the Company,
for any reason, Holder shall be entitled only to those warrants which vested as of the date of termination of employment. All nonvested warrants shall be forfeited. 

        3.     Right to Exercise Warrants. Subject to the provisions of paragraph 2 above, each Warrant may be exercised from the
date of this Agreement until                        
(                        time) on the date that is            years
after the date of this Agreement (the "Expiration Date"). Each Warrant not exercised on or
before the Expiration Date shall expire. 

        Each
Warrant shall entitle its holder to purchase from the Company one share of Common Stock at an exercise price of $            per share, subject to adjustment as set forth below
("Exercise Price"). 

        The
Company shall not be required to issue fractional shares of capital stock upon the exercise of this Warrant or to deliver Warrant Certificates which evidence fractional shares of
capital stock. In the event that a fraction of an Exercisable Share would, except for the provisions of this paragraph 2, be issuable upon the exercise of this Warrant, the Company shall pay to
the Holder exercising the Warrant an amount in cash equal to such fraction multiplied by the current market value of the Exercise Share. For purposes of this paragraph 2, the current market
value shall be determined as follows: 

        (a)   if
the Exercise Shares are traded in the over-the-counter market and not on any national securities exchange and not in the NASDAQ Reporting
System, the average of the mean between the last bid and asked prices per share, as reported by the National Quotation Bureau, Inc., or an equivalent generally accepted reporting service, for
the last business day prior to the date on which this Warrant is exercised, or, if not so reported, the average of the closing bid and asked prices for an Exercise Share as furnished to the Company by
any member of the National Association of Securities Dealers, Inc., selected by the Company for that purpose. 

        (b)   if
the Exercise Shares are listed or traded on a national securities exchange or in the NASDAQ Reporting System, the closing price on the principal national securities
exchange on 

which
they are so listed or traded or in the NASDAQ Reporting System, as the case may be, on the last business day prior to the date of the exercise of this Warrant. The closing price referred to in
this Clause (b) shall be the last reported sales price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case on the
national securities exchange on which the Exercise Shares are then listed on in the NASDAQ Reporting System; or 

        (c)   if
no such closing price or closing bid and asked prices are available, as determined in any reasonable manner as may be prescribed by the Board of Directors of the
Company. 

        4.     Mutilated or Missing Warrant Certificates. In case any of the Warrant Certificates shall be mutilated, lost, stolen or
destroyed prior to its expiration date, the Company shall issue and deliver, in exchange and substitution for and upon cancellation of the mutilated Warrant Certificate, or in lieu of and in
substitution for the Warrant Certificate lost, stolen or destroyed, a new Warrant Certificate of like tenor and representing an equivalent right or interest. 

        5.     Reservation of Shares. The Company will at all times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Shares or its authorized and issued Shares held in its treasury for the purpose of enabling it to satisfy its obligation to issue Shares upon exercise of
Warrants, the full number of Shares deliverable upon the exercise of all outstanding Warrants. 

        The
Company covenants that all Shares which may be issued upon exercise of Warrants will be validly issued, fully paid and nonassessable outstanding Shares of the Company. 

        6.     Rights of Holder. The Holder shall not, by virtue of anything contained in this Warrant Agreement or otherwise, prior to
exercise of this Warrant, be entitled to any right whatsoever, either in law or equity, of a stockholder of the Company, including without limitation, the right to receive dividends or to vote or to
consent or to receive notice as a shareholder in respect of the meetings of shareholders or the election of directors of the Company of any other matter. 

        7.     Investment Intent. Holder represents and warrants to the Company that Holder is acquiring the Warrants for investment and
with no present intention of distributing or reselling any of the Warrants. 

        8.     Certificates to Bear Language. The Warrants and the certificate or certificates therefor shall bear the following legend
by which each holder shall be bound: 

"THE
WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK (OR OTHER SECURITIES) ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS
AVAILABLE." 

        The
Shares and the certificate or certificates evidencing any such Shares shall bear the following legend: 

"THE
SHARES (OR OTHER SECURITIES) REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN OPINION OF COUNSEL THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE." 

        Certificates
for Warrants without such legend shall be issued if such warrants or shares are sold pursuant to an effective registration statement under the Securities Act of 1933 (the
"Act") or if the Company has received an opinion from counsel reasonably satisfactory to counsel for the Company, that such legend is no longer required under the Act. 

        9.     Registration Rights. The Company is obligated to register the shares of Common Stock underlying the Warrants in any
subsequent registration statement filed by the Company with the Securities and Exchange Commission, so that holders of such Common Stock shall be entitled to sell the same simultaneously with and upon
the terms and conditions as the securities sold for the account of the Company are being sold pursuant to any such registration statement, subject to such lock-up provisions as may be
proposed by the underwriter of said registration statement and agreed to by the investors (the "Piggyback Registration Right"). In such registration, the Company shall pay all its expenses and filing
fees and shall make a reasonable number of copies of the registration statement and any prospectus available to holders. The Company will not pay any selling commissions or similar expenses incurred
by Seller or of any counsel or other representative of a seller. 

        10.   Adjustment of Number of Shares and Class of Capital Stock Purchasable. The Number of Shares and Class of Capital Stock
purchasable under this Warrant Agreement are subject to adjustment from time to time as set forth in this Section. 

        (a)   Adjustment for Change in Capital Stock. If the Company: 

          (i)  pays
a dividend or makes a distribution on its Common Stock, in each case, in shares of its Common Stock; 

         (ii)  subdivides
its outstanding shares of Common Stock into a greater number of shares; 

        (iii)  combines
its outstanding shares of Common Stock into a smaller number of shares; 

        (iv)  makes
a distribution on its Common Stock in shares of its capital stock other than Common Stock; or 

         (v)  issues
by reclassification of its shares of Common Stock any shares of its capital stock; 

then
the number and classes of shares purchasable upon exercise of each Warrant in effect immediately prior to such action shall be adjusted so that the holder of any Warrant thereafter exercised may
receive the number and classes of shares of capital stock of the Company which such holder would have owned immediately following such action if such holder had exercised the Warrant immediately prior
to such action. 

        For
a dividend or distribution the adjustment shall become effective immediately after the record date for the dividend or distribution. For a subdivision, combination or
reclassification, the adjustment shall become effective immediately after the effective date of the subdivision, combination or reclassification. 

        If
after an adjustment the holder of a Warrant upon exercise of it may receive shares of two or more classes of capital stock of the Company, the Board of Directors of the Company shall
in good faith determine the allocation of the adjusted Exercise Price between or among the classes of capital stock. After such allocation, that portion of the Exercise Price applicable to each share
of each such class of capital stock shall thereafter be subject to adjustment on terms comparable to those applicable to Common Stock in this Agreement. Notwithstanding the allocation of the Exercise
Price between or among shares of capital stock as provided by this Section 9, a Warrant may only be exercised in full by payment of the entire Exercise Price currently in effect. 

        (b)   Consolidation, Merger or Sale of the Company. If the Company is a party to a consolidation, merger or transfer of assets
which reclassifies or changes its outstanding Common Stock, the successor corporation (or corporation controlling the successor corporation or the Company, as the case may be) shall by operation of
law assume the Company's obligations under this Warrant Agreement. Upon consummation of such transaction the Warrants shall automatically become exercisable for the kind and amount of securities, cash
or other assets which the holder of a Warrant would have owned immediately after the consolidation, merger or transfer if the holder had exercised the Warrant immediately before the effective date of
such transaction. As a condition to the consummation of such transaction, the Company shall arrange for the person or 

entity
obligated to issue securities or deliver cash or other assets upon exercise of the Warrant to, concurrently with the consummation of such transaction, assume the Company's obligations hereunder
by executing an instrument so providing and further providing for adjustments which shall be as nearly equivalent as may be practical to the adjustments provided for in this Section 9. 

        11.   Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or Holder shall bind
and inure to the benefit of their respective successor and assigns hereunder. 

        12.   Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all
proposes be deemed to be an original, and such counterparts shall together constitute by one and the same instrument. 

        13.   Notices. All notices or other communications under this Warrant shall be in writing and shall be deemed to have been
given if delivered by hand or mailed by certified mail, postage prepaid, return receipt requested, addressed as follows: if to the Company: Beta Oil & Gas, Inc.,
[Address], Attention: Chief Executive Officer, and to the Holder: at the address of the Holder appearing on the books of the Company or the Company's transfer agent, if any. 

        Either
the Company or the Holder may from time to time change the address to which notices to it are to be mailed hereunder by notice in accordance with the provisions of this
Paragraph 12. 

        14.   Supplements and Amendments. The Company may from time to time supplement or amend this Warrant Agreement without the
approval of any Holders of Warrants in order to cure any ambiguity or to be correct or supplement any provision contained herein which may be defective or inconsistent with any other provision, or to
make any other provisions in regard to matters or questions herein arising hereunder which the Company may deem necessary or desirable and which shall not materially adversely affect the interest of
the Holder. 

        15.   Severability. If for any reason any provision, paragraph or term of this Warrant Agreement is held to be invalid or
unenforceable, all other valid provisions herein shall remain in full force and effect and all terms, provisions and paragraphs of this Warrant shall be deemed to be severable. 

        16.   Governing Law and Venue. This Warrant shall be deemed to be a contract made under the laws of the State of Oklahoma and
for all purposes shall be governed and construed in accordance with the laws of said State. Any proceeding arising under this Warrant Agreement shall be instituted in            County,
State of
            . 

        17.   Headings. Paragraphs and subparagraph headings, used herein are included herein for convenience of reference only and
shall not affect the construction of this Warrant Agreement nor constitute a part of this Warrant Agreement for any other purpose. 

        IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, as of the date and year first above written. 

	"COMPANY"	 	"HOLDER"
	

BETA OIL & GAS, INC.	
 	

 	

 
	

BY:	

 	
 	

By:	

 
	 	
	 	 	

	ITS:	 	 	 	 
	 	
	 	 	 

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EXHIBIT 4.4

BETA OIL & GAS, INC. FORM OF WARRANT AGREEMENTQuickLinks
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EXHIBIT 4.5    
    

 
 

BETA OIL & GAS, INC.
  
    2004 NON-EMPLOYEE DIRECTOR INCENTIVE PLAN    
    

 
 

I. Definitions and Purposes    
    

(a)    Definitions.  

        Whenever capitalized in this document, the following terms shall be defined as set forth below: 

        "Board" means the board of directors of the Company. 

        "Code" means the Internal Revenue Code of 1986, as amended. 

        "Committee" means the committee of the Board which shall be two or more directors as the Board shall appoint to administer the Plan. 

        "Common Stock" means the common stock of the Company, $.001 par value per share, and any class of common stock into which such common
stock may hereafter be converted, reclassified or recapitalized. 

        "Company" means Beta Oil & Gas, Inc. 

        "Corporate Change" shall have the meaning set forth in Section VIII(c) below. 

        "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. 

        "Exchange Act" means the Securities Exchange Act of 1934, as amended. 

        "Fair Market Value" means for one Share on the date in question (i) the closing sale price for such Share as quoted on the Nasdaq
National Market or Nasdaq Small Cap Market, as applicable ("NASDAQ"), or (ii) if not so quoted, the closing sales price as reported on the consolidated reporting system for the securities
exchange(s) on which Shares are then listed or admitted to trading (as reported in the Wall Street Journal or other reputable source), or (iii) if not so reported, the average of the closing
bid and asked prices for a Share on the date of grant as quoted by the National Quotation Bureau's "Pink Sheets" or the National Association of Securities Dealers' OTC Bulletin Board System. If there
was no public trade of Common Stock on the date in question, Fair Market Value shall be determined by reference to the last preceding date on which such a trade was so reported. 

        If
the Company is not a Publicly Held Corporation at the time a determination of the Fair Market Vale of the Company Stock is required to be made hereunder, the determination of Fair
Market Value for purposes of the Plan shall be made by the Committee in its discretion exercised in good faith. In this respect, the Committee may rely on such financial data, valuations, experts, and
other sources, in its discretion, as it deems advisable under the circumstances. 

        "Grantee(s)" means those certain non-employee directors of the Company to whom the Company shall grant Restricted Stock or
Incentive Stock. 

        "Immediate Family" means with respect to a Grantee or an Optionee, the Grantee's or the Optionee's spouse, children or grandchildren
(including legally adopted, step children and step grandchildren). 

        "Incentive Stock" means Shares that may be granted to eligible persons under Section III (c) below. 

        "Incentive Stock Award" means an agreement between the Company and a Grantee whereby the Grantee receives Shares. 

        "Incentive Stock Agreement" means an agreement between the Company and a Grantee whereby the Grantee receives shares of Incentive Stock. 

        "Option Agreement" means an agreement between the Company and an Optionee whereby the Optionee receives Stock Options. 

        "Optionee(s)" means those certain non-employee directors of the Company to whom the Company shall grant Stock Options. 

        "Option Price" shall mean the amount an Optionee must pay the Company upon exercise of the Stock Option. 

        "Participants" shall mean Grantees and Optionees. 

        "Plan" means this Beta Oil & Gas, Inc. 2004 Non-Employee Director Incentive Plan. 

        "Publicly Held Corporation" means a corporation issuing any class of common equity securities required to be registered under
Section 12 of the Exchange Act. 

        "Restricted Stock" means Shares subject to specified restrictions that may be granted to eligible persons under Section III
(b) below. 

        "Restricted Stock Agreement" means an agreement between the Company and a Grantee whereby the Grantee receives shares of Restricted Stock. 

        "Restricted Stock Award" means an award of Restricted Stock granted to a Grantee. 

        "Restriction Period" means the period of time during which the Shares granted pursuant to a Restricted Stock Award remain subject to the
restrictions or vesting set forth in the applicable Restricted Stock Agreement. 

        "Share" or "Shares" means a share or shares of Common Stock. 

        "Stock Option" means a grant by the Company to an Optionee of the right to purchase Company Stock under terms set forth in an Option
Agreement. 

(b)    Purposes.  

        This Plan is intended to foster and promote the long-term financial success of the Company and its subsidiaries and to increase stockholder value by
encouraging ownership in the Company by directors of the Company who are not employees of the Company, strengthening the ability of the Company to attract and retain the services of experienced and
knowledgeable individuals as non-employee directors of the Company, and providing non-employee directors with a further incentive to work for the best interests of the Company
and its stockholders. 

        This
Plan provides for payment of various forms of incentive compensation and it is not intended to be a plan that is subject to ERISA. The Plan shall be interpreted, construed and
administered consistent with its status as a plan that is not subject to ERISA. 

 
 

II. Administration    
    

        The Plan shall be administered by the Committee. The Committee is authorized to interpret the Plan and may from time to time adopt such rules and regulations,
consistent with the provisions of the Plan, as it may deem advisable to carry out the Plan. All decisions and determinations made by the Committee in construing the provisions of the Plan shall be
final. 

 
 

III. Types of Grants Under the Plan    
    

	(a)
	Types of Grants. 

        Pursuant
to this Plan, the Company may grant shares of Restricted Stock, shares of Incentive Stock, and Stock Options. 

	(b)
	Grants of Restricted Stock.

        Subject
to the terms and conditions of the Plan, the Board is authorized to grant Restricted Stock to any non-employee directors. A certificate or certificates representing
the number of shares of Restricted Stock granted shall be registered in the name of the Grantee. Until the expiration of the Restriction Period or the lapse of restrictions in the manner provided in
the Grantee's Restricted Stock Agreement, the certificate or certificates shall be held in escrow by the Company for the account of the Grantee. The Grantee shall have beneficial ownership of the
shares of Restricted Stock, including the right to receive dividends and the right to vote the shares of Restricted Stock. Upon the lapse of all restrictions (as set forth in the Grantee's Restricted
Stock Agreement) on any or all of the Restricted Stock granted to the Grantee, the certificate or certificates representing the shares of Restricted Stock for which the restrictions have lapsed shall
be delivered to the Grantee. 

        Each
Restricted Stock Award shall be evidenced by a Restricted Stock Agreement which shall contain the Restriction Period, the number of shares of Restricted Stock and such other terms
and conditions as may be approved by the Board, including other restrictions as the Board may determine. The Board may impose such conditions or restrictions on any Restricted Stock as it may deem
advisable, in its sole discretion. 

        Unless
modified by the Board, the following grants shall be made; (i) within sixty (60) days after the approval of this Plan by the Stockholders, a grant of 7,500 shares of
Restricted Stock shall be granted
to each person who is a non-employee director at that time; (ii) thereafter, within sixty (60) days after a person becomes a non-employee director, a grant of
7,500 shares of Restricted Stock shall be granted to each such person; and (iii) each year on the anniversary date of the date on which a non-employee director became a director, an
additional 5,000 shares of Restricted Stock shall be granted to such person as long as he or she is serving as a non-employee director at that time. Unless modified by the Board, all
Restricted Stock shall be restricted for a period ending six (6) months from the date of grant with the restriction that the Grantee be an non-employee director of the Company for
the entire six (6) month period. 

	(c)
	Grant of Incentive Stock.

        Subject
to the terms and conditions of the Plan, the Board may grant Incentive Stock to any non-employee director in such amounts as the Board shall determine from time to
time. Each Incentive Stock Award shall be evidenced by an Incentive Stock Agreement which shall contain the number of Shares granted and such other terms and conditions as may be approved by the
Committee. 

	(d)
	Grant of Stock Options.

        Subject
to the terms and conditions of the Plan, the Board is authorized to grant Stock Options to any non-employee director. 

        Each
Stock Option shall be evidenced by an Option Agreement, which shall contain such terms and conditions as may be approved by the Committee. The Option Price upon exercise of any
Stock Option shall be payable to the Company in full either: (i) in cash or its equivalent, or (ii) subject to prior approval by the Committee in its discretion, by tendering previously
acquired Shares having an aggregate Fair Market Value at the time of exercise equal to the total Option Price (provided that the Shares which are tendered must have been held by the Optionee for at
least six (6) months prior to their tender to satisfy the option price), or (iii) subject to prior approval by the Committee in its discretion, by withholding Shares which otherwise
would be acquired on exercise having an aggregate Fair Market Value at the time of exercise equal to the total Option Price, or (iv) subject to prior approval by the Committee in its
discretion, by a combination of (i), (ii), and (iii) above. Any payment in Shares shall be effected by the surrender of such Shares to the Company in good form for transfer and shall be valued
at their Fair Market Value on the date when the Stock Option is exercised. Unless otherwise permitted by the Committee in its discretion, the Optionee shall not surrender, or attest to the ownership
of, Shares in payment of the Option Price if such action would cause the Company to recognize compensation (or additional compensation expense) with respect to the Stock Option for financial reporting
purposes expense. 

        The
Committee, in its discretion, also may allow the Option Price to be paid with such other consideration as shall constitute lawful consideration for the issuance of Shares (including,
without limitation, effecting a "cashless exercise" with a broker of the Stock Option), subject to applicable securities law restrictions and tax withholdings, or by any other means which the
Committee determines to be consistent with the Plan's purpose and applicable law. A "cashless exercise" of a Stock Option is a procedure by which a broker provides the funds to the Optionee to effect
a Stock Option exercise, to the extent consented to by the Committee in its discretion. At the direction of the Optionee, the broker will either (i) sell all of the Shares received when the
Stock Option is exercised and pay the Optionee the proceeds of the sale (minus the Option Price, withholding taxes and any fees due to the broker) or (ii) sell enough of the Shares received
upon exercise of the Stock Option to cover the Option Price, withholding taxes and any fees due the broker and deliver to the Optionee (either directly or through the Company) a stock certificate for
the remaining Shares. 

        In
no event will the Committee allow the Option Price to be paid with a form of consideration, including a loan or a "cashless exercise," if such form of consideration would violate the
Sarbanes-Oxley Act of 2002 as determined by the Committee, in its discretion. 

        As
soon as practicable after receipt of a written notification of exercise and full payment, the Company shall deliver, or cause to be delivered, to or on behalf of the Optionee, in the
name of the Optionee or other appropriate recipient, Share certificates for the number of Shares purchased under the Stock Option. Such delivery shall be effected for all purposes when the Company or
a stock transfer agent of the Company shall have deposited such certificates in the United States mail, addressed to Grantee or other appropriate recipient. 

 
 

IV. Eligibility of Participants, Term and Transferability    
    

        Restricted Stock, Incentive Stock and Stock Options may be granted only to individuals who are non-employee directors of the Company at the time the
Restricted Stock, Incentive Stock or Stock Option is granted. Restricted Stock, Incentive Stock and Stock Options may be granted to the same individual on more than one occasion. 

        Restricted
Stock and Stock Options granted under the Plan shall not be transferable or assignable other than: (a) by will or the laws of descent and distribution or
(b) pursuant to a qualified domestic relations order (as defined by Section 414(p) of the Code); provided, however, the Committee may, in its discretion, authorize all or a portion of
the Stock Options to be granted on terms which permit transfer by the Optionee to (i) the members of the Optionee's Immediate Family, (ii) a trust or trusts for the exclusive benefit of
such Immediate Family, or (iii) a partnership in which such members of such Immediate Family are the only partners, provided that (A) there may be no consideration for any such transfer,
(B) the Stock Option pursuant to which such Stock Options are granted must be approved by the Committee, and must expressly provide for transferability in a manner consistent with this Section
and (C) subsequent transfers of transferred Stock Options shall be prohibited except in accordance with clauses (A) and (B) above of this sentence. Following any permitted
transfer, any Stock Option shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer, provided that the term "Optionee" shall be deemed to refer to
the transferee. The Stock Option shall be exercisable by the transferee only to the extent, and for the periods, specified in the Option Agreement. 

        Except
as may otherwise be permitted under the Code, in the event of a permitted transfer of a Stock Option hereunder, the original Optionee shall remain subject to withholding taxes
upon exercise. In addition, the Company shall have no obligation to provide any notices to a transferee. 

        No
transfer by will, trust or by the laws of descent and distribution shall be effective to bind the Company unless the Committee has been furnished with a copy of the deceased Grantee's
enforceable will, trust or such other evidence as the Committee deems necessary to establish the validity of the transfer. Any attempted transfer in violation of this provision shall be void and
ineffective. All determinations under this Section shall be made by the Committee in its discretion. 

 
 

V. Shares Subject to Plan    
    

        The aggregate number of shares of Restricted Stock, shares of Incentive Stock and Shares which may be issued under Stock Options granted under the Plan shall not
exceed 200,000. Such shares may consist of authorized but unissued Shares, treasury shares of Common Stock, or previously issued Shares reacquired by the Company. Any of such Shares which remain
unissued and which are not subject to outstanding Stock Options at the termination of the Plan shall cease to be subject to the Plan, but, until termination of the Plan, the Company shall at all times
make available a sufficient number of Shares to meet the requirements of the Plan. Should any Stock Option hereunder expire or terminate prior to its exercise in full, the Shares theretofore subject
to such Stock Option may again be subject to a Stock Option granted under the Plan. Upon the forfeiture of any Restricted Stock, the forfeited shares of Restricted Stock shall thereafter be available
for award under the Plan. The aggregate number of Shares which may be issued under the Plan shall be subject to adjustment in the same manner as provided in Section VIII hereof with respect to
Shares subject to Stock Options then outstanding. Exercise of a Stock Option in any manner shall result in a decrease in the number of Shares which may thereafter be available, both for purposes of
the Plan and for grant to any one individual, by the number of Shares as to which the Stock Option is exercised. 

 
 

VI. Option Price    
    

        The Option Price of Shares issued under each Stock Option shall be equal to the Fair Market Value of Shares subject to the Stock Option on the date the Stock
Option is granted. 

 
 

VII. Term of Plan    
    

        This Plan shall become effective as of June 3, 2004, subject to the approval of the stockholders of the Company at the 2004 Annual Meeting of Stockholders.
Except with respect to Restricted Stock or Stock Options then outstanding, if not sooner terminated under the provisions of Section IX, the Plan shall terminate upon and no further Restricted
Stock, Incentive Stock or Stock Options shall be granted after June 2, 2014. 

 
 

VIII. Recapitalization or Reorganization    
    

        (a)   The
existence of the Plan and the Restricted Stock, Incentive Stock and Stock Options granted hereunder shall not affect in any way the right or power of the Board or
the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of
the Company, any issue of debt or equity securities, the dissolution or liquidation of the Company or any sale, lease, exchange or other disposition of all or any part of its assets or business or any
other corporate act or proceeding. 

        (b)   The
shares with respect to which Stock Options may be granted are shares of Stock as presently constituted, but if, and whenever, prior to the expiration of a Stock
Option theretofore granted, the Company shall effect a subdivision or consolidation of shares of Stock or the payment of a stock dividend on Stock without receipt of consideration by the Company, the
number of Shares with respect to which such Stock Option may thereafter be exercised (i) in the event of an increase in the number of outstanding Shares shall be proportionately increased, and
the Option Price per Share shall be proportionately reduced, and (ii) in the event of a reduction in the number of outstanding Shares shall be proportionately reduced, and the Option Price per
share shall be proportionately increased. 

        (c)   If
the Company recapitalizes, reclassifies its capital stock, or otherwise changes its capital structure (a "recapitalization"), the number and class of shares of Stock
covered by a Stock Option theretofore granted shall be adjusted so that such Stock Option shall thereafter cover the number and class of shares of stock and securities to which the Optionee would have
been entitled pursuant to the terms of the recapitalization if, immediately prior to the recapitalization, the Optionee had been the holder of record of the number of shares of Stock then covered by
such Stock Option. 

        If
(i) the Company shall not be the surviving entity in any merger, consolidation or other reorganization (or survives only as a subsidiary of an entity other than a previously
wholly-owned subsidiary of the Company), (ii) the Company sells, leases or exchanges substantially all of its assets to any other person or entity (other than a wholly-owned subsidiary of the
Company), (iii) the Company is to be dissolved and liquidated, (iv) any person or entity, including a "group" as contemplated by Section 13(d)(3) of the Exchange Act acquires or
gains ownership or control (including, without limitation, power to vote) of more than 50% of the outstanding shares of the Company's voting stock (based upon voting power), or (v) as a result
of or in connection with a contested election of directors, the persons who were directors of the Company before such election shall cease to constitute a majority of the Board (each such event is
referred to herein as a "Corporate Change"), no later than (a) ten (10) days after the approval by the stockholders of the Company of such
merger, consolidation, reorganization, sale, lease or exchange of assets or dissolution or such election of directors or (b) thirty (30) days after a change of control of the type
described in Clause (iv), the Committee, acting in its sole discretion without the consent or approval of any Optionee, shall act to effect one or more of the following alternatives, which may
vary among individual Optionees and which may vary among Stock Options held by any individual Optionee: (1) accelerate the time at which Stock Options then outstanding may be exercised so that
such Stock Options may be exercised in full for a limited period of time on or before a specified date (before or after such Corporate Change) fixed by the Committee, after which specified date all
unexercised Stock Options and all rights of Optionees thereunder shall terminate, (2) require the mandatory surrender to the Company by selected Optionees of some or all of the outstanding
Stock Options held by such Optionees (irrespective of whether such Stock Options are then exercisable under the provisions of the Plan) as of a date, before or after such Corporate Change, specified
by the Committee, in which event the Committee shall thereupon cancel such Stock Options and the Company shall pay to each Optionee an amount of cash per share to be determined by the Committee,
(3) make such adjustments to Stock Options then outstanding as the Committee deems appropriate to reflect such Corporate Change (provided, however, that the Committee may determine in its sole
discretion that no adjustment is necessary to Stock Options then outstanding) or (4) provide that the number and class of shares of Stock covered by a Stock Option theretofore granted shall be
adjusted so that such Stock Option shall thereafter cover the number and class of shares of stock or other securities or property (including, without limitation, cash) to which the Optionee would have
been entitled pursuant to the terms of the agreement of merger, consolidation or sale of assets and dissolution if, immediately prior to such merger, consolidation or sale of assets and dissolution
the Optionee had been the holder of record of the number of shares of Stock then covered by such Stock Option. In addition, no later than (a) ten (10) days after the approval by the
stockholders of the Company of such merger, consolidation, reorganization, sale, lease or exchange of assets or dissolution or such election of directors or (b) thirty (30) days after a
change of control of the type described in Clause (iv), the Committee, acting in its sole discretion without the consent or approval of any Grantee, shall act to effect one or more of the
following alternatives, which may vary among individual Grantees and which may vary among Restricted Stock held by any individual Grantee: (1) remove any and all restrictions to which the
Restricted Stock is subject including removing the Restriction Period, (2) require the mandatory surrender to the Company by selected Grantees of some or all of the outstanding Restricted Stock
held by such Grantees as of a date, before or after such Corporate Change, specified by the Committee and the Company shall pay to each Optionee an amount of cash per share to be determined by the
Committee, (3) make such adjustments to the Restricted Stock then outstanding as the Committee deems appropriate to reflect such Corporate Change (provided, however, that the Committee may
determine in its sole discretion that no adjustment is necessary to the Restricted Stock then outstanding) or (4) provide that the number and class of shares of Restricted Stock covered by a
Restricted Stock Agreement theretofore granted shall be adjusted so that such Restricted Stock shall thereafter cover the number and class of shares of stock or other securities or property
(including, without limitation, cash) to which the Grantee would have been entitled pursuant to the terms of the agreement of merger, consolidation or sale of assets and dissolution if, immediately
prior to such merger, consolidation or sale of assets and dissolution the Grantee had been the holder of record of the number of Shares which was not Restricted Stock. 

        (d)   Except
as hereinbefore expressly provided, the issuance by the Company of shares of stock of any class or securities convertible into shares of stock of any class, for
cash, property, labor or services, upon direct sale, upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such
shares or other securities, and in any case whether or not for fair value, shall not affect, and no adjustment by reason therefor shall be made with respect to, any Restricted Stock or the number of
shares of Stock subject to Stock Options theretofore granted or the Option Price. 

 
 

IX. Amendment or Termination of the Plan    
    

        The Board in its discretion may terminate the Plan at any time with respect to any shares for which Stock Options, Incentive Stock Awards or Restricted Stock
Awards have not theretofore been granted. The Board shall have the right to alter or amend the Plan or any part thereof from time to time; provided, that no change in any Restricted Stock Agreement,
Incentive Stock Agreement or Stock Option Agreement theretofore granted may be made which would impair the rights of the Participant without the consent of such Participant; and provided, further,
that the Board may not make any alteration or amendment which would materially increase the benefits accruing to Participants under the Plan, increase the aggregate number of shares which may be
issued pursuant to the provisions of the Plan, change the class of individuals eligible to receive Restricted Stock, Incentive Stock or Stock Options under the Plan or extend the term of the Plan,
without the approval of the stockholders of the Company. 

 
 

X. Securities Laws    
    

        The Company shall not be obligated to issue any Shares pursuant to any Restricted Stock Agreement, Incentive Stock Agreement or Stock Option granted under the
Plan at any time when the offering of the shares of Restricted Stock, Incentive Stock or shares covered by such Stock Option have not been registered under the Securities Act of 1933 and such other
state and federal laws, rules or regulations as the Company or the Committee deems applicable and, in the opinion of legal counsel for the Company, there is no exemption from the registration
requirements of such laws, rules or regulations available for the offering and sale of such shares. 

 
 

XI. General    
    

        (a)   Nothing
contained in this Plan, any Restricted Stock Agreement, any Incentive Stock Agreement or any Stock Option granted pursuant to this Plan shall confer upon any
non-employee director the right to continue as a director of the Company or its parent or subsidiary or any other corporation affiliated with the Company. 

        (b)   No
Optionee shall have any rights as a stockholder of the Company with respect to any Shares subject to a Stock Option hereunder until such Shares have been issued. 

        (c)   Nothing
contained in this Plan, a Restricted Stock Agreement, an Incentive Stock Agreement or in any Option Agreement issued hereunder shall impose any liability or
responsibility on the Company, the Board, the Committee or any member or any of the foregoing to pay, or reimburse any Participant for the payment of any tax arising out of, or on account of the
issuance of Restricted Stock, Incentive Stock or a Stock Option or Stock Options hereunder to any Participant, an Optionee's exercise of any Stock Option issued under the Plan or a Participant's sale,
transfer or other disposition of any Restricted Stock, Incentive Stock or Shares acquired pursuant to the exercise of any Stock Option issued hereunder. Any person receiving Restricted Stock,
Incentive Stock or a Stock Option hereunder shall expressly acknowledge and agree that such participation is voluntary and that the Participant shall be solely responsible for all taxes to which he or
she may or become subject as a consequence of such participation. 

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EXHIBIT 4.5

BETA OIL & GAS, INC. 2004 NON-EMPLOYEE DIRECTOR INCENTIVE PLAN

I. Definitions and Purposes

II. Administration

III. Types of Grants Under the Plan

IV. Eligibility of Participants, Term and Transferability

V. Shares Subject to Plan

VI. Option Price

VII. Term of Plan

VIII. Recapitalization or Reorganization

IX. Amendment or Termination of the Plan

X. Securities Laws

XI. General

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