BSD licenses are a group of permissive software licenses. What this means is that they are a class of free software licenses that contain very little requirements as to how the software is allowed to be distributed. The very first of these types of software license was used for the Berkeley Software Distribution, which is where it got its name. The Berkeley Software Distribution is a Unix type operating system.

Modified or New BSD License and Simplified or Free BSD License

There are type kinds of BSD license, namely the New BSD License (or Modified BSD License) and the Simplified BSD License or FreeBSD License. The Free Software Foundation has verified both types as GPL compatible software licenses, which means that they are compatible with the General Public License. They have also both been vetted by the Open Source Initiative as open source licenses. An open source license is simply a copyright license for software which allows its source code to be available for public use. With this type of license, the user can review and change the source code in order to perform their own customization and/or troubleshoot. Most open source licenses are free, meaning that the original owner requires no pay for the modification or redistribution of the software.

The 4 Clause or “Original” BSD License

In the very first BSD license, there was a clause which has not been added to the newer BSD licenses. This clause, known as the “advertising clause,” eventually became very controversial and was therefore removed. This is because it contained a requirement for all authors of their works which were derived from any BSD licensed software to add an acknowledgment of the first source in any and all advertising which was done for their product, as you can see in the third clause of the following text. Here is what the 4 Clause License looked like. (Wikipedia)

Copyright (c) <year>, <copyright holder>
All rights reserved.

Redistribution and use in source and binary forms, with or without
modification, are permitted provided that the following conditions are met:
1. Redistributions of source code must retain the above copyright
notice, this list of conditions and the following disclaimer.
2. Redistributions in binary form must reproduce the above copyright
notice, this list of conditions and the following disclaimer in the
documentation and/or other materials provided with the distribution.
3. All advertising materials mentioning features or use of this software
must display the following acknowledgement:
This product includes software developed by the <organization>.
4. Neither the name of the <organization> nor the
names of its contributors may be used to endorse or promote products
derived from this software without specific prior written permission.

THIS SOFTWARE IS PROVIDED BY <COPYRIGHT HOLDER> ''AS IS'' AND ANY
EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE
DISCLAIMED. IN NO EVENT SHALL <COPYRIGHT HOLDER> BE LIABLE FOR ANY
DIRECT, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES
(INCLUDING, BUT NOT LIMITED TO, PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES;
LOSS OF USE, DATA, OR PROFITS; OR BUSINESS INTERRUPTION) HOWEVER CAUSED AND
ON ANY THEORY OF LIABILITY, WHETHER IN CONTRACT, STRICT LIABILITY, OR TORT
(INCLUDING NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY OUT OF THE USE OF THIS
SOFTWARE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.

Many people objected to this clause because they felt that it lead to too many advertising requirements when several different software programs were combined together and redistributed. This is because each and every name or organization which had been involved in each and every bit of software had to be named in the ads. As an example, Richard Stallman stated that he had counted as many as 75 acknowledgments in the version of NetBSD which came out in 1997.

The 3 Clause, New or Modified BSD License

The most typical BSD License used today is the 3 Clause or Modified Bsd License. In July of 1999, the third clause of the original, 4 Clause BSD License was removed by the Director of the Office of Technology at UC Berkeley, William Hoskins. Although other Bsd distributions had removed the clause, they added another, similar one to take its place. Eventually, the original, 4 Clause BSD License became known as “BSD Old,” and the 3 Clause Bsd License came to be called “BSD New.” Unlimited redistribution is allowed with the new version, as can be seen below. The only requirements are that the copyright notices and the disclaimers of warrant by the original distributor be acknowledged. (Wikipedia)

Copyright (c) <year>, <copyright holder>
All rights reserved.

Redistribution and use in source and binary forms, with or without
modification, are permitted provided that the following conditions are met:
* Redistributions of source code must retain the above copyright
notice, this list of conditions and the following disclaimer.
* Redistributions in binary form must reproduce the above copyright
notice, this list of conditions and the following disclaimer in the
documentation and/or other materials provided with the distribution.
* Neither the name of the <organization> nor the
names of its contributors may be used to endorse or promote products
derived from this software without specific prior written permission.

THIS SOFTWARE IS PROVIDED BY THE COPYRIGHT HOLDERS AND CONTRIBUTORS "AS IS" AND
ANY EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE
DISCLAIMED. IN NO EVENT SHALL <COPYRIGHT HOLDER> BE LIABLE FOR ANY
DIRECT, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES
(INCLUDING, BUT NOT LIMITED TO, PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES;
LOSS OF USE, DATA, OR PROFITS; OR BUSINESS INTERRUPTION) HOWEVER CAUSED AND
ON ANY THEORY OF LIABILITY, WHETHER IN CONTRACT, STRICT LIABILITY, OR TORT
(INCLUDING NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY OUT OF THE USE OF THIS
SOFTWARE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.

The 2 Clause, Simplified or Free BSD License

There is also an even more recent modification in the original BSD License which is often called the Simplified or Free BSD License. It is a 2 Clause license which is primarily known for being used in FreeBSD. The main difference between the 2 Clause BSD License and the 3 Clause one is that the 2 Clause deleted the non-endorsement text. A new disclaimer was also added about the views and opinions of those distributing the software, as can be seen below. (Wikipedia)

Copyright (c) <YEAR>, <OWNER>
All rights reserved.

Redistribution and use in source and binary forms, with or without
modification, are permitted provided that the following conditions are met:

1. Redistributions of source code must retain the above copyright notice, this
list of conditions and the following disclaimer.
2. Redistributions in binary form must reproduce the above copyright notice,
this list of conditions and the following disclaimer in the documentation
and/or other materials provided with the distribution.

THIS SOFTWARE IS PROVIDED BY THE COPYRIGHT HOLDERS AND CONTRIBUTORS "AS IS" AND
ANY EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE
DISCLAIMED. IN NO EVENT SHALL THE COPYRIGHT OWNER OR CONTRIBUTORS BE LIABLE FOR
ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES
(INCLUDING, BUT NOT LIMITED TO, PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES;
LOSS OF USE, DATA, OR PROFITS; OR BUSINESS INTERRUPTION) HOWEVER CAUSED AND
ON ANY THEORY OF LIABILITY, WHETHER IN CONTRACT, STRICT LIABILITY, OR TORT
(INCLUDING NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY OUT OF THE USE OF THIS
SOFTWARE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.

The views and conclusions contained in the software and documentation are those
of the authors and should not be interpreted as representing official policies,
either expressed or implied, of the FreeBSD Project.