<PAGE>

                                                                   EXHIBIT 10.23

                            BILL BARRETT CORPORATION
                                 SEVERANCE PLAN

Article I. PURPOSE AND DEFINITIONS

      Section 1.01 Purpose. The purpose of the Bill Barrett Corporation
Severance Plan (the "Plan") is to provide incentives to employees of Bill
Barrett Corporation ("Parent") and its affiliates (collectively, the "Company")
to remain in the employ of the Company or its Subsidiaries during periods when
the future of the Company is uncertain due to a potential or actual Change in
Control (as defined below). All full-time employees who meet the eligibility
criteria will participate in the Plan.

      Section 1.02 Definitions.

(a)   "Annual Base Salary" shall mean twelve (12) times the highest monthly base
      salary paid or payable, including any base salary which has been earned
      but deferred, to the Participant by the Company in respect of the twelve
      (12) month period immediately preceding the month in which the Effective
      Date occurs.

(b)   "Board" shall mean the Board of Directors of Parent.

(c)   "Cause" shall mean the Participant's

      (1)   neglect, refusal or failure (other than by reason of illness,
            accident or other physical or mental incapacity or disability) to
            properly or substantially attend to duties as assigned by the
            Company, including without limitation insubordination or excessive
            absence or tardiness;

      (2)   failure to substantially comply with any of terms of employment;

      (3)   failure to follow the established policies, standards, and
            regulations of the Company;

      (4)   willful engagement in gross misconduct injurious to the Company or
            to any of its subsidiaries or affiliates or any of its or their
            employees; or conviction in a court of law of, or pleading of guilty
            or nolo contendere to, any crime that constitutes a felony in the
            jurisdiction involved, or any crime including moral turpitude.

(d)   "Change in Control" of the Company means the occurrence of one of the
      following events:

      (1)   An acquisition (other than directly from the Company) of any voting
            securities of the Company (the "Voting Securities") by any "Person"
            (as

                                       1
<PAGE>

            the term person is used for purposes of Section 13(d) or 14(d) of
            the Securities Exchange Act of 1934, as amended (the "Exchange
            Act")) immediately after which such Person has "Beneficial
            Ownership" (within the meaning of Rule 13d-3 promulgated under the
            Exchange Act) of 30% or more of the combined voting power of the
            Company's then outstanding Voting Securities; provided, however,
            that in determining whether a Change in Control has occurred, Voting
            Securities which are acquired in a "Non-Control Acquisition" (as
            hereinafter defined) shall not constitute an acquisition which would
            cause a Change in Control. A "Non-Control Acquisition" shall mean an
            acquisition by (A) an employee benefit plan (or a trust forming a
            part thereof) maintained by (x) the Company or (y) any corporation
            or other Person of which a majority of its voting power or its
            equity securities or equity interest is owned directly or indirectly
            by the Company (a "Subsidiary"), (B) the Company or any Subsidiary,
            or (C) any Person in connection with a "Non-Control Transaction" as
            defined in paragraph (3) below;

      (2)   The individuals who are members of the Board (the "Incumbent Board")
            cease for any reason to constitute at least two-thirds of the Board;
            provided, however, that if the election, or nomination for election
            by the Company's stockholders, of any new director was approved by a
            vote of at least two-thirds of the then Incumbent Board, such new
            director shall, for purposes of this Plan, be considered as a member
            of the Incumbent Board; provided, further, however, that no
            individual shall be considered a member of the Incumbent Board if
            such individual initially assumed office as a result of either an
            actual or threatened "Election Contest" (defined as any solicitation
            subject to Rules 14a-1 to 14a-10 promulgated under the Exchange Act
            by any person or group of persons for the purpose of opposing a
            solicitation subject to Rules 14a-1 to 14a-10 by any other person or
            group of persons with respect to the election or removal of
            directors at any annual or special meeting of stockholders of the
            Company) or other actual or threatened solicitation of proxies or
            consents by or on behalf of a Person other than the Board (a "Proxy
            Contest") including by reason of any agreement intended to avoid or
            settle any Election Contest or Proxy Contest; or

      (3)   Consummation of:

            (i)   A merger, consolidation or reorganization involving the
                  Company, unless

                  (a)   the stockholders of the Company, immediately before such
                        merger, consolidation or reorganization, own, directly
                        or indirectly, immediately following such merger,
                        consolidation or reorganization, a majority of the
                        combined voting power of the outstanding Voting
                        Securities of the corporation resulting from such merger
                        or consolidation or reorganization (the

                                        2
<PAGE>

                        "Surviving Corporation") or a corporation beneficially
                        owning, directly or indirectly, a majority of the Voting
                        Securities of the Surviving Corporation (a "Parent
                        Corporation") in substantially the same proportion as
                        their ownership of the Voting Securities immediately
                        before such merger, consolidation or reorganization, and

                  (b)   the individuals who were members of the Incumbent Board
                        immediately prior to the execution of the agreement
                        providing for such merger, consolidation or
                        reorganization constitute a majority of the members of
                        the board of directors of either the Surviving
                        Corporation or a Parent Corporation, and

                  (c)   no Person (other than the Company, any Subsidiary, any
                        employee benefit plan (or any trust forming a part
                        thereof) maintained by the Company, the Surviving
                        Corporation or any Subsidiary, or any Person who,
                        immediately prior to such merger, consolidation or
                        reorganization had Beneficial Ownership of 30% or more
                        of the then outstanding Voting Securities) owns,
                        directly or indirectly, 30% or more of the combined
                        voting power of the Surviving Corporation's then
                        outstanding voting securities (unless there is a Parent
                        Corporation, in which event of the Parent Corporation's
                        then outstanding voting securities), and

                  (d)   a transaction described in the immediately preceding
                        clauses (a) through (c) shall herein be referred to as a
                        "Non-Control Transaction";

            (ii)  A complete liquidation or dissolution of the Company; or

            (iii) The sale or other disposition of all or substantially all of
                  the assets of the Company to any Person (other than a transfer
                  to a Subsidiary).

      (4)   Notwithstanding subclauses (1), (2) or (3) above, a Change in
            Control shall not be deemed to occur solely because any Person (the
            "Subject Person") acquired Beneficial Ownership of more than the
            permitted amount of the outstanding Voting Securities as a result of
            the acquisition of Voting Securities by the Company which, by
            reducing the number of Voting Securities outstanding, increases the
            proportionate number of shares Beneficially Owned by the Subject
            Person, provided that if a Change in Control would occur (but for
            the operation of this sentence) as a result of the acquisition of
            Voting Securities by the Company, and after such share acquisition
            by the Company, the Subject Person becomes the

                                       3
<PAGE>

            Beneficial Owner of any additional Voting Securities which increases
            the percentage of the then outstanding Voting Securities
            Beneficially Owned by the Subject Person, then a Change in Control
            shall occur.

      In all cases, if the Participant is an employee of the Company and the
      Participant's employment is terminated within 30 days prior to a Change in
      Control and the Participant reasonably demonstrates that such termination
      (A) was at the request of a third party who has indicated an intention or
      taken steps reasonably calculated to effect a Change in Control and who
      effectuates a Change in Control (a "Third Party"), or (B) otherwise
      occurred in connection with, or in anticipation of, a Change in Control
      which actually occurs, then the date of a Change in Control with respect
      to such Participant shall mean the date immediately prior to the date of
      such termination of such Participant's employment.

(e)   "Change in Control Agreement" shall mean a letter of intent or a binding
      agreement between Parent and another party providing for a Change in
      Control to occur.

(f)   The "Change in Control Date" shall mean the date on which a Change in
      Control occurs.

(g)   The "Change in Control Period" shall begin on the Effective Date and shall
      extend until six months after the Change in Control Date.

(h)   The "Effective Date" shall mean date of execution of a Change in Control
      Agreement or the date of the initiation of a tender offer or other
      solicitation directed at the stockholders of Parent intended to cause a
      Change in Control.

(i)   "Good Reason" shall mean the occurrence of any of the following events:

      (1)   assignment to the Participant of duties inconsistent with, or a
            substantial alteration in the nature of, the Participant's
            responsibilities in effect immediately prior to the Change in
            Control;

      (2)   a reduction by the Company or its successor in the Participant's
            Annual Base Salary or a reduction in any increased base salary which
            may be in effect after the Change in Control Date or a reduction in
            or modification of a Participant's entitlement to receive benefits
            pursuant to an approved plan of the Company existing at the
            Effective Date; or

      (3)   the Company's (or a successor's) requiring the Participant to be
            based anywhere other than within twenty five (25) miles of the
            Company's principal office location in the city of Participant's
            employment immediately prior to the Change in Control, except for
            reasonably required travel on the Company's or its successor's
            business to an extent substantially consistent with the
            Participant's business travel obligations immediately preceding the
            Change in Control Date.

                                       4
<PAGE>

(j)   "Participant" is an employee of the Company who is eligible to participate
      in the Plan under Section 3.1.

(k)   The "Plan Administrator" is Parent or an individual or a committee it may
      designate by action of its Board.

(l)   "Qualified Termination" shall mean a termination of the Participant's
      employment with the Company or its successor:

      (1)   by the Company or its successor for any reason other than for Cause;
            or

      (2)   by the Participant for Good Reason.

(m)   "Severance Benefit" is the payment to a Participant whose employment is
      terminated as a Qualified Termination during the Change in Control Period
      or the Severance Period, as described in paragraph 4(b).

(n)   "Severance Period" shall mean the period beginning on the date of the
      Change in Control and shall continue for a period of 12 months thereafter.

(o)   "Weekly Salary" shall mean the amount equal to the Annual Base Salary
      divided by 52.

(p)   "Years of Service" shall mean the quotient of the sum of the number of
      months that a Participant is and has been an employee of the Company or
      its predecessors prior to the Change in Control according to the payroll
      records of the Company divided by twelve (12).

Article II. ADMINISTRATION.

      The Plan shall be administered by the Plan Administrator. The Plan
Administrator shall be responsible for the management and control of the
operation and the administration of the Plan, including without limitation,
interpretation of the Plan, decisions pertaining to eligibility to participate
in the Plan, selection of participants in the Retention Program, computation of
Plan benefits. The Plan Administrator has absolute discretion in the exercise of
its powers and responsibilities. To the extent the Board has delegated its
responsibilities and powers as Plan Administrator, Parent shall, without
limiting any rights that the delegate may have under Parent's charter or bylaws,
applicable law or otherwise, indemnify and hold harmless each such delegate (and
any other individual acting on such delegate's behalf) against any and all
expenses and liabilities arising out of such person's administrative functions
or fiduciary responsibilities, excepting only expenses and liabilities arising
out of the person's own gross negligence or willful misconduct (but specifically
including such person's ordinary negligence); expenses against which such person
shall be indemnified hereunder include without limitation the amounts of any
settlement, judgment, attorneys' fees, costs of court, and any other related
charges reasonably incurred in connection with a claim, proceeding, settlement,
or other action under the Plan.

                                        5
<PAGE>

Article III. PARTICIPATION.

      Section 3.01 Eligibility Criteria; Severance Program. All full-time
Company employees who have been employed with the Company for at least six
months prior to the Change in Control Date shall participate in the Severance
Program pursuant to the Plan.

      Section 3.02 No Change in Participation Status. After the commencement of
the Change in Control Period, no change which would reduce the benefits to which
an employee is entitled and no termination of an employee's status as a
Participant, other than a termination for Cause, can be made at any time;
provided, however, that termination of the Change in Control Agreement prior to
the Change in Control, or termination of the tender offer or other solicitation
of Parent's stockholders for a Change in Control which initiated the Change in
Control Period, or the failure to consummate the Change in Control transactions
approved by the stockholders, shall terminate the right of Participants to
receive any benefits to which they would otherwise have been entitled if a
Change in Control had occurred and shall be deemed a termination of the Change
in Control Period and the Severance Protection Period.

      Section 3.03 Exclusion from Participation.

(a)   Employees classified by Parent as part-time or temporary employees and
      individuals who are classified by Parent as independent contractors are
      not eligible to be Participants under this Plan.

(b)   Notwithstanding any other provision of the Plan, no employee who is a
      party to an individual agreement covering Change in Control and severance
      benefits shall be eligible to be a Participant under this Plan.

Article IV. BENEFITS.

      Section 4.01 Severance Program. Subject to satisfaction of the conditions
set forth in Article VII, Participants whose employment is terminated in a
Qualified Termination during the Severance Period shall receive the following
Severance Benefit.

(a)   Form and Timing of Payment. A lump sum cash payment in the amount set
      forth below (the "Severance Benefit") will be made as soon as practicable
      after the date of a Qualified Termination.

(b)   Severance Benefit Formula: The Severance Benefit for a Participant shall
      be equal to the greater of three (3) times the Weekly Salary multiplied by
      a Participant's Years of Service, or three (3) times the Weekly Salary for
      each $10,000 of a Participant's Annual Base Salary; provided, however,
      that the minimum Severance Benefit will be 12 times a Participant's Weekly
      Salary, and the maximum Severance Benefit will be 26 times a Participant's
      Weekly Salary.

(c)   COBRA. Participants whose employment is terminated in a Qualified
      Termination during the Severance Period (and who elect to receive
      continuation coverage

                                        6
<PAGE>

      under the Consolidated Omnibus Budget Reconciliation Act ("COBRA
      coverage") will be reimbursed by the Company for the current COBRA premium
      for the period that begins on the first day after any such Participant is
      no longer covered by the Company's health benefit plan and will end upon
      the earlier of: six months after date of a Qualified Termination, or the
      day such Participant is no longer eligible for COBRA for any reason,
      including, but not limited to such Participant ceasing to make his or her
      COBRA premium payment. If the Participant remains eligible for COBRA after
      the end of such period, he or she may continue receiving COBRA benefits
      provided that he or she makes all premium payments in a timely fashion
      until such eligibility terminates. The COBRA premium is subject to change
      according to the terms of the Company's health benefit plan.

(d)   Ineligibility for Payment. No Severance Benefit will be paid to a
      Participant whose employment is by the Company for Cause during the
      Severance Period or who voluntarily terminates employment without Good
      Reason during the Severance Period. The Severance Benefit payment shall
      not be eligible to be deferred for purposes of the Company's 401(k) plan.

Article V. TERMINATION OF EMPLOYMENT.

      Section 5.01 Terminations that are not Qualified Terminations. Any
termination of employment other than a Qualified Termination will not entitle a
Participant to Severance Benefits hereunder including, without limitation,
termination due to death, disability, retirement, or termination by the
Participant for other than Good Reason.

      Section 5.02 Determination of Cause and Good Reason. The Plan
Administrator, in its sole discretion, shall determine whether a Participant has
been terminated for Cause. The effect of this definition of Cause shall be
limited to determining the consequences of a termination under this Plan and
shall not restrict or otherwise interfere with the Company's or its successor's
discretion with respect to the termination of any Participant's employment.

Article VI. LIMITATIONS OF PAYMENTS TO PARTICIPANTS

      Section 6.01 No Parachute Payments. Notwithstanding any other provision of
this Plan, in the event that any payment (or portion thereof) to be made
hereunder to a Participant would constitute a "parachute payment" for purposes
of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended, such
payment (or portion thereof) shall be reduced so that the remaining portion of
such payment (if any) does not constitute a parachute payment. In the event that
more than one payment (or portion thereof) would constitute a parachute payment,
the preceding sentence shall apply first to the payment (or portion thereof)
which is payable last in time, and then to the payment payable next to last in
time, and so forth until none of the remaining payments (or portions thereof)
constitute parachute payments.

      Section 6.02 Taxes. All payment of Severance Benefits under this Plan
shall be made net of all applicable withholding taxes.

                                        7
<PAGE>

Article VII. PARTICIPANT RELEASES.

      In the sole discretion of the Plan Administrator, no Participant shall be
entitled to receive a Severance Benefit unless such Participant shall have
executed a release, in a form acceptable to the Company and/or its successor, as
applicable, of all claims against the Company and/or its successor, as
applicable, provided that in no event shall the Participant be required to
release the Company or its successor from its obligations under the Plan. The
releases shall be executed and delivered in compliance with all applicable
requirements under employment-related laws, including without limitation, the
Age Discrimination in Employment Act, and any payment of any Severance Benefit
shall be deferred until the release is no longer revocable by the Participant.

Article VIII. AMENDMENT; TERMINATION.

      The Plan may not be amended or terminated to affect the rights of any
Participant after the Effective Date except as set forth in Section 3.2. Subject
to the foregoing, the Plan may be amended or terminated at any time by the
Board.

Article IX. BENEFIT OF PLAN.

      The Plan shall be binding upon and shall inure to the benefit of the
Participant, the Participant's heirs and legal representatives, and the Company
and its successors. The term "successor" shall mean any person, firm,
corporation or other business entity that, at any time whether by merger,
acquisition or otherwise, acquires all or substantially all of the stock, assets
or business of the Company.

Article X. EMPLOYMENT RELATIONSHIP.

      Nothing contained in this Plan or in any Participation Letter received by
a Participant shall restrict or otherwise interfere with the Company's
discretion with respect to the termination of any Participant's employment or in
the nature of a Participant's employment as an at-will employee.

Article XI. NON-ASSIGNABILITY.

      Each Participant's rights under this Plan shall be non-transferable except
by will or by the laws of descent and distribution and except insofar as
applicable law may otherwise require. Subject to the foregoing, no right,
benefit or interest hereunder shall be subject to anticipation, alienation,
sale, assignment, encumbrance, charge, pledge, hypothecation, or set-off in
respect of any claim, debt or obligation, or to execution, attachment, levy or
similar process, or assignment by operation of law, and any attempt, voluntary
or involuntary, to effect any such action shall, to the full extent permitted by
law, be null, void and of no effect

Article XII. OTHER BENEFITS.

      Except as otherwise specifically provided herein, nothing in the Plan
shall affect the level of benefits provided to or received by any Participant
(or the Participant's

                                        8
<PAGE>

estate or beneficiaries) as part of any employee benefit plan of the Company,
and the Plan shall not be construed to affect in any way a Participant's rights
and obligations under any other such plan, including, but not limited to,
accrued vacation and benefits payable under any bonus or other compensation
plans, stock option plans, disability plans, retirement plans, or similar
successor plans.

Article XIII. SEVERABILITY.

      In the event that any provision or portion of this Plan shall be
determined to be invalid or unenforceable for any reason, the remaining
provisions and portions of the Plan shall be unaffected thereby and shall remain
in full force and effect to the fullest extent permitted by law.

Article XIV. GOVERNING LAW.

      All questions pertaining to the construction, regulation, validity and
effect of the provisions of the Plan shall be determined in accordance with the
laws of the State of Colorado without regard to the conflict of law principles
thereof.

Article XV. EFFECT ON PRIOR PLANS.

      With respect to the Participants, the Plan supersedes all previous
retention and/or severance plans that may have been sponsored by the Company,
its predecessors or their affiliates.

IN WITNESS WHEREOF, this Retention and Severance Plan was adopted by Parent this
________ day of _______________________.

                                          Bill Barrett Corporation

                                          By:___________________________________

                                        9