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                                                                   EXHIBIT 10.21

                            BILL BARRETT CORPORATION
                            2004 STOCK INCENTIVE PLAN

         1. Purpose. The purpose of the Bill Barrett Corporation 2004 Stock
Incentive Plan (the "Plan") is to enhance the ability of Bill Barrett
Corporation (the "Company") and its Subsidiaries to attract and retain officers,
employees, directors and consultants of outstanding ability and to provide
selected officers, employees, directors and consultants with an interest in the
Company parallel to that of the Company's stockholders. The term "Company" as
used in this Plan with reference to employment or service shall include the
Company and its Subsidiaries, as appropriate.

         2. Definitions.

                  (a) "Award" shall mean an award determined in accordance with
the terms of the Plan.

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

                  (c) "Cause" shall mean (i) if a Participant is party to an
employment agreement or similar agreement with the Company and such agreement
includes a definition of Cause, the definition contained therein or (ii) if no
such employment or similar agreement exists, it shall mean (A) the Participant's
failure to perform the duties reasonably assigned to him or her by the Company,
(B) a good faith finding by the Company of the Participant's dishonesty, gross
negligence or misconduct, (C) a material breach by the Participant of any
written Company employment policies or rules or (D) the Participant's conviction
for, or his or her plea of guilty or nolo contendere to, a felony or for any
other crime which involves fraud, dishonesty or moral turpitude.

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

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

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(a "Subsidiary"), (2) the Company or any Subsidiary, or (3) any Person in
connection with a "Non-Control Transaction" as defined in paragraph (c) below;

                           (ii) 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

                           (iii) Consummation of:

                                    (1) 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 "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

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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 (i) through (iii) shall herein be referred to as a
"Non-Control Transaction";

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

                                    (3) 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).

                           (iv) Notwithstanding subclauses (i), (ii) or (iii)
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 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 (1)
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 (2) 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) "Code" shall mean the Internal Revenue Code of 1986, as
amended.

                  (f) "Committee" shall mean a committee of at least two members
of the Board appointed by the Board to administer the Plan and to perform the
functions set forth herein and who are "non-employee directors" within the
meaning of Rule 16b-3 as promulgated under Section 16 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and who are also "outside
directors" within the meaning of Section 162(m) of the Code.

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                  (g) "Common Stock" shall mean the common stock of the Company.

                  (h) "Continuous Service" means that the Participant's service
as an employee, director or consultant with the Company or a Subsidiary which is
not interrupted or terminated. The Participant's Continuous Service shall not be
deemed to have terminated merely because of a change in the capacity in which
the Participant renders service to the Company or a Subsidiary as an employee,
director or consultant or a change in the entity for which the Participant
renders such service; provided, that, there is no interruption or termination of
the Participant's Continuous Service other than an approved leave of absence.
The Committee, in its sole discretion, may determine whether Continuous Service
shall be considered interrupted.

                  (i) "Covered Employee" shall have the meaning set forth in
Section 162(m)(3) of the Code.

                  (j) "Disability" shall have the same meaning as provided in
any long-term disability plan maintained by the Company or any Subsidiary in
which a Participant then participates (the "LTD Plans"); provided, that, if no
such plan exists, it shall mean the failure of any Participant to perform his
duties due to physical or mental incapacity, as determined by the Committee.

                  (k) "Fair Market Value" shall mean, as of any date, the value
of the Common Stock determined as follows:

                           (i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the New
York Stock Exchange, its Fair Market Value will be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system for the last market trading day prior to the date of
determination, as reported in The Wall Street Journal or such other source as
the Committee deems reliable;

                           (ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value will be the mean of the closing bid and asked prices for the Common
Stock on the date prior to the date of determination as reported in The Wall
Street Journal or such other source as the Committee deems reliable;

                           (iii) If the Common Stock is not listed on any
established stock exchange or a national market system, the average of the high
and low bid quotations for the Common Stock on that date prior to the date of
determination as reported by the National Quotation Bureau Incorporated; or

                           (iv) In the absence of an established market for the
Common Stock, the Fair Market Value thereof will be determined in good faith by
the Committee.

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                  (l) "Immediate Family Member" shall mean, except as otherwise
determined by the Committee, a Participant's spouse, ancestors and descendants.

                  (m) "Incentive Stock Option" shall mean a stock option which
is intended to meet the requirements of Section 422 of the Code.

                  (n) "Nonqualified Stock Option" shall mean a stock option
which is not intended to be an Incentive Stock Option.

                  (o) "Option" shall mean either an Incentive Stock Option or a
Nonqualified Stock Option.

                  (p) "Participant" shall mean an officer, employee, director or
consultant of the Company or its Subsidiaries who is selected to participate in
the Plan in accordance with Section 5.

                  (q) "Performance Goals" shall mean or may be expressed in
terms of any of the following business criteria: revenue, earnings before
interest, taxes, depreciation and amortization ("EBITDA"), funds from
operations, funds from operations per share, operating income, pre or after tax
income, cash available for distribution, cash available for distribution per
share, net earnings, earnings per share, return on equity, return on assets,
share price performance, improvements in the Company's attainment of expense
levels, and implementing or completion of critical projects, or improvement in
cash-flow (before or after tax). A Performance Goal may be measured over a
Performance Period on a periodic, annual, cumulative or average basis and may be
established on a corporate-wide basis or established with respect to one or more
operating units, divisions, subsidiaries, acquired businesses, minority
investments, partnerships or joint ventures. Unless otherwise determined by the
Committee by no later than the earlier of the date that is 90 days after the
commencement of the Performance Period or the day prior to the date on which 25%
of the Performance Period has elapsed, the Performance Goals will be determined
by not accounting for a change in GAAP during a Performance Period.

                  (r) "Performance Objective" shall mean the level or levels of
performance required to be attained with respect to specified Performance Goals
in order that a Participant shall become entitled to specified rights in
connection with an Award of performance shares.

                  (s) "Performance Period" shall mean the calendar year, or such
other shorter or longer period designated by the Committee, during which
performance will be measured in order to determine a Participant's entitlement
to receive payment of an Award.

                  (t) "Subsidiary" shall mean any entity that controls, is
controlled by or is under common control with the Company as may be determined
by the Board; provided, that, with respect to Incentive Stock Options, it shall
mean any subsidiary of the Company that is a corporation and which at the time
qualifies as a "subsidiary corporation" within the meaning of Section 424(f) of
the Code.

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         3. Shares Subject to the Plan. Subject to adjustment in accordance with
Section 18, the total of the number of shares of Common Stock which shall be
available for the grant of Awards under the Plan shall not exceed 4,900,000
shares of Common Stock; provided, that, for purposes of this limitation, any
Common Stock subject to an Option which is canceled or expires without exercise
shall again become available for Award under the Plan. Upon forfeiture of Awards
in accordance with the provisions of the Plan and the terms and conditions of
the Award, such shares shall again be available for subsequent Awards under the
Plan. Subject to adjustment in accordance with Section 18, no employee shall be
granted, during any one (1) year period, Options to purchase more than 1,225,000
shares of Common Stock, and the number of shares of Common Stock subject to any
Awards other than Options or stock appreciation rights shall not exceed
1,225,000 shares of Common Stock. Common Stock available for issue or
distribution under the Plan shall be authorized and unissued shares or shares
reacquired by the Company in any manner.

         4. Administration.

                  (a) The Plan shall be administered by the Committee. All
references to the Committee hereinafter shall mean the Board if no such
Committee has been appointed. Notwithstanding the foregoing, the Board or
Committee may (i) delegate to a committee of one or more members of the Board
who are not "outside directors" within the meaning of Section 162(m) of the Code
the authority to grant Awards to eligible persons who are either (A) not then
Covered Employees and are not expected to be Covered Employees at the time of
recognition of income resulting from such Award or (B) not persons with respect
to whom the Company wishes to comply with Section 162(m) of the Code or (ii)
delegate to a committee of one or more members of the Board who are not
"non-employee directors" within the meaning of Rule 16b-3 the authority to grant
Awards to eligible persons who are not subject to Section 16 of the Exchange
Act.

                  (b) The Committee shall (i) approve the selection of
Participants, (ii) determine the type of Awards to be made to Participants,
(iii) determine the number of shares of Common Stock subject to Awards, (iv)
determine the terms and conditions of any Award granted hereunder (including,
but not limited to, any restriction and forfeiture conditions on such Award) and
(v) have the authority to interpret the Plan, to establish, amend and rescind
any rules and regulations relating to the Plan, to determine the terms and
provisions of any agreements entered into hereunder, and to make all other
determinations necessary or advisable for the administration of the Plan. The
Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or in any Award in the manner and to the extent it
shall deem desirable to carry it into effect.

                  (c) Any action of the Committee shall be final, conclusive and
binding on all persons, including the Company and its Subsidiaries and
stockholders, Participants and persons claiming rights from or through a
Participant.

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                  (d) The Committee may delegate to officers or employees of the
Company or any Subsidiary, and to service providers, the authority, subject to
such terms as the Committee shall determine, to perform administrative functions
with respect to the Plan and Award agreements.

                  (e) Members of the Committee and any officer or employee of
the Company or any Subsidiary acting at the direction of, or on behalf of, the
Committee shall not be personally liable for any action or determination taken
or made in good faith with respect to the Plan, and shall, to the extent
permitted by law, be fully indemnified by the Company with respect to any such
action or determination.

         5. Eligibility. Individuals eligible to receive Awards under the Plan
shall be the officers, employees, directors and consultants of the Company and
its Subsidiaries selected by the Committee; provided, that, only employees of
the Company and its Subsidiaries may be granted Incentive Stock Options.

         6. Awards. Awards under the Plan may consist of Options, restricted
Common Stock, restricted Common Stock units, performance shares, performance
share units, purchases, share awards, stock appreciation rights or other awards
based on the value of the Common Stock. Incentive Stock Options may only be
granted to employees of the Company and its Subsidiaries. Awards shall be
subject to the terms and conditions of the Plan and shall be evidenced by an
agreement containing such additional terms and conditions, not inconsistent with
the provisions of the Plan, as the Committee shall deem desirable.

         7. Options. Options may be granted under the Plan in such form as the
Committee may from time to time approve pursuant to terms set forth in an Option
agreement.

                  (a) Types of Options. Each Option agreement shall state
whether or not the Option will be treated as an Incentive Stock Option or
Nonqualified Stock Option. The aggregate Fair Market Value of the Common Stock
for which Incentive Stock Options granted to any one employee under this Plan or
any other incentive stock option plan of the Company or of any of its
Subsidiaries may by their terms first become exercisable during any calendar
year shall not exceed $100,000, determining Fair Market Value as of the date
each respective Option is granted. In the event such threshold is exceeded in
any calendar year, such excess Options shall be automatically deemed to be
Nonqualified Stock Options. To the extent that any Option granted under this
Plan which is intended to be an Incentive Stock Option fails for any reason to
qualify as such at any time, such Option shall be a Nonqualified Stock Option.

                  (b) Option Price. The purchase price per share of the Common
Stock purchasable under an Option shall be determined by the Committee;
provided, however, the exercise price for Incentive Stock Options will be not
less than 100% of the Fair Market Value of the Common Stock on the date of the
grant and in the case of Incentive Stock Options granted to an employee owning
stock possessing more than 10% of the total combined voting power of all classes
of shares of the Company and its

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Subsidiaries (a "10% Stockholder") the price per share specified in the
agreement relating to such Option shall not be less than 110% of the Fair Market
Value per share of the Common Stock on the date of grant. The Company
specifically reserves the right under this Plan to directly or indirectly
reprice Options granted hereunder by reducing the exercise price of any such
Option or awarding substitute Options with a lower exercise price under such
terms as it may determine to be appropriate.

                  (c) Option Period. The term of each Option shall be fixed by
the Committee, but no Option shall be exercisable after the expiration of ten
(10) years from the date the Option is granted; provided, that, in the case of
Incentive Stock Options granted to 10% Stockholders, the term of such Option
shall not exceed five (5) years from the date of grant.

                  (d) Exercisability. Each Option shall vest and become
exercisable at a rate determined by the Committee on the date of grant.

                  (e) Method of Exercise. Options may be exercised, in whole or
in part, by giving written notice of exercise to the Company in a form approved
by the Company specifying the number shares of Common Stock to be purchased.
Such notice shall be accompanied by the payment in full of the Option exercise
price. The exercise price of the Option may be paid by (i) cash or certified or
bank check, (ii) surrender of Common Stock held by the Optionee for at least six
(6) months prior to exercise (or such longer or shorter period as may be
required to avoid a charge to earnings for financial accounting purposes) or the
attestation of ownership of such shares, in either case, if so permitted by the
Company, where such Common Stock has a Fair Market Value equal to the aggregate
exercise price of the Option at the time of exercise, (iii) if established by
the Company, through a "same day sale" commitment from optionee and a
broker-dealer that is acceptable to the Company that is a member of the National
Association of Securities Dealers (an "NASD Dealer") whereby the optionee
irrevocably elects to exercise the Option and to sell a portion of the shares so
purchased sufficient to pay for the total exercise price and whereby the NASD
Dealer irrevocably commits upon receipt of such shares to forward the total
exercise price directly to the Company, (iv) through additional methods
prescribed by the Committee, all under such terms and conditions as deemed
appropriate by the Committee in its discretion, or (v) by any combination of the
foregoing, and, in all instances, to the extent permitted by applicable law. A
Participant's subsequent transfer or disposition of any Common Stock acquired
upon exercise of an Option shall be subject to any Federal and state laws then
applicable, specifically securities law, and the terms and conditions of this
Plan.

         8. Restricted Common Stock. The Committee may from time to time award
restricted Common Stock under the Plan to eligible Participants. Shares of
restricted Common Stock may not be sold, assigned, transferred or otherwise
disposed of, or pledged or hypothecated as collateral for a loan or as security
for the performance of any obligation or for any other purpose, for such period
(the "Restricted Period") as the Committee shall determine. The Committee may
define the Restricted Period in terms of the passage of time or in any other
manner it deems appropriate. The

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Committee may alter or waive at any time any term or condition of restricted
Common Stock that is not mandatory under the Plan. Unless otherwise determined
by the Committee, upon termination of a Participant's Continuous Service with
the Company for any reason prior to the end of the Restricted Period, the
restricted Common Stock shall be forfeited and the Participant shall have no
right with respect to the Award. Except as restricted under the terms of the
Plan and any Award agreement, any Participant awarded restricted Common Stock
shall have all the rights of a stockholder including, without limitation, the
right to vote restricted Common Stock. If a share certificate is issued in
respect of restricted Common Stock, the certificate shall be registered in the
name of the Participant, but shall be held by the Company for the account of the
Participant until the end of the Restricted Period. The Committee may also award
restricted Common Stock in the form of restricted Common Stock units having a
value equal to an identical number of shares of Common Stock. Payment of
restricted Common Stock units shall be made in Common Stock or in cash or in a
combination thereof (based upon the Fair Market Value of the Common Stock on the
day the Restricted Period expires), all as determined by the Committee in its
sole discretion.

         9. Performance Shares.

                  (a) Type of Awards. Performance shares may be granted in the
form of actual shares of Common Stock or Common Stock units having a value equal
to an identical number of shares of Common Stock. In the event that a share
certificate is issued in respect of performance shares, such certificate shall
be registered in the name of the Participant, but shall be held by the Company
until the time the performance shares are earned. The Performance Objectives and
the length of the Performance Period shall be determined by the Committee. The
Committee shall determine in its sole discretion whether performance shares
granted in the form of Common Stock units shall be paid in cash, Common Stock or
a combination of cash and Common Stock.

                  (b) Performance Objectives. The Committee shall establish the
Performance Objective for each Award of performance shares, consisting of one or
more business criteria permitted as Performance Goals hereunder, one or more
levels of performance with respect to each such criteria, and the amount or
amounts payable or other rights that the Participant will be entitled to upon
achievement of such levels of performance. The Performance Objective shall be
established by the Committee prior to, or reasonably promptly following the
inception of, a Performance Period but, to the extent required by Section 162(m)
of the Code, by no later than the earlier of the date that is ninety (90) days
after the commencement of the Performance Period or the day prior to the date on
which twenty-five percent (25%) of the Performance Period has elapsed. More than
one Performance Goal may be incorporated in a Performance Objective, in which
case achievement with respect to each Performance Goal may be assessed
individually or in combination with each other. The Committee may, in connection
with the establishment of Performance Objectives for a Performance Period,
establish a matrix setting forth the relationship between performance on two or
more Performance Goals and the amount of the Award of performance shares payable
for that Performance Period. The level or levels of performance specified with
respect to a

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Performance Goal may be established in absolute terms, as objectives relative to
performance in prior periods, as an objective compared to the performance of one
or more comparable companies or an index covering multiple companies, or
otherwise as the Committee may determine. Performance Objectives shall be
objective and shall otherwise meet the requirements of Section 162(m) of the
Code. Performance Objectives may differ for performance shares granted to any
one Participant or to different Participants. An Award of performance shares to
a Participant who is a Covered Employee shall (unless the Committee determines
otherwise) provide that in the event of the Participant's termination of
Continuous Service prior to the end of the Performance Period for any reason,
such Award will be payable only (i) if the applicable Performance Objectives are
achieved and (ii) to the extent, if any, as the Committee shall determine.

                  (c) Certification. Following the completion of each
Performance Period, the Committee shall certify in writing, in accordance with
the requirements of Section 162(m) of the Code, whether the Performance
Objectives and other material terms of an Award of performance shares have been
achieved or met. Unless the Committee determines otherwise, performance shares
shall not be settled until the Committee has made the certification specified
under this Section 9(c).

                  (d) Adjustment. The Committee may, in its discretion, reduce
or eliminate the amount of payment with respect to an Award of performance
shares to a Covered Employee, notwithstanding the achievement of a specified
Performance Objectives; provided, that, no such adjustment shall be made which
would adversely impact a Participant following a Change in Control.

                  (e) Maximum Amount Payable. Subject to Section 18, the maximum
number of performance shares subject to any Award to a Covered Employee is
1,225,000 for each 12 months during the Performance Period (or, to the extent
the Award is paid in cash, the maximum dollar amount of any such Award is the
equivalent cash value, based on the Fair Market Value of the Common Stock, of
such number of shares of Common Stock on the last day of the Performance
Period).

         10. Share Purchases. The Committee may authorize eligible individuals
to purchase Common Stock in the Company at a price equal to, below or above the
Fair Market Value of the Common Stock at the time of grant. Any such offer may
be subject to the conditions and terms the Committee may impose.

         11. Stock Appreciation Rights. The Committee may in its discretion,
either alone or in connection with the grant of another Award, grant stock
appreciation rights in accordance with the Plan, the terms and conditions of
which shall be set forth in an agreement. If granted in connection with an
Option, a stock appreciation right shall cover the same number of shares of
Common Stock covered by the Option (or such lesser number of shares as the
Committee may determine) and shall, except as provided in this Section 11, be
subject to the same terms and conditions as the related Option.

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                  (a) Time of Grant. A stock appreciation right may be granted
(i) at any time if unrelated to an Option, or (ii) if related to an Option,
either at the time of grant, or in the case of Nonqualified Stock Options, at
any time thereafter during the term of such Option.

                  (b) Stock Appreciation Right Related to an Option.

                           (i) A stock appreciation right granted in connection
with an Option shall be exercisable at such time or times and only to the extent
that the related Options are exercisable, and will not be transferable except to
the extent the related Option may be transferable. A stock appreciation right
granted in connection with an Incentive Stock Option shall be exercisable only
if the Fair Market Value of a share of Common Stock on the date of exercise
exceeds the purchase price specified in the related Incentive Stock Option
agreement.

                           (ii) Upon the exercise of a stock appreciation right
related to an Option, the Participant shall be entitled to receive an amount
determined by multiplying (A) the excess of the Fair Market Value of a share of
Common Stock on the date preceding the date of exercise of such stock
appreciation right over the per share purchase price under the related Option,
by (B) the number of shares of Common Stock as to which such stock appreciation
right is being exercised. Notwithstanding the foregoing, the Committee may limit
in any manner the amount payable with respect to any stock appreciation right by
including such a limit in the agreement evidencing the stock appreciation right
at the time it is granted.

                           (iii) Upon the exercise of a stock appreciation right
granted in connection with an Option, the Option shall be canceled to the extent
of the number of shares as to which the stock appreciation right is exercised,
and upon the exercise of an Option granted in connection with a stock
appreciation right, the stock appreciation right shall be canceled to the extent
of the number of shares of Common Stock as to which the Option is exercised or
surrendered.

                  (c) Stock Appreciation Right Unrelated to an Option. The
Committee may grant to a Participant stock appreciation rights unrelated to
Options. Stock appreciation rights unrelated to Options shall contain such terms
and conditions as to exercisability, vesting and duration as the Committee shall
determine, but in no event shall they have a term of greater than ten (10)
years. Upon exercise of a stock appreciation right unrelated to an Option, the
Participant shall be entitled to receive an amount determined by multiplying (i)
the excess of the Fair Market Value of a share on the date preceding the date of
exercise of such stock appreciation right over the per share exercise price of
the stock appreciation right, by (ii) number of shares of Common Stock as to
which the stock appreciation right is being exercised. Notwithstanding the
foregoing, the Committee may limit in any manner the amount payable with respect
to any stock appreciation right by including such a limit in the agreement
evidencing the stock appreciation right at the time it is granted.

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                  (d) Method of Exercise. Stock appreciation rights shall be
exercised by a Participant only by a written notice delivered in person or by
mail to the Company at the Company's principal executive office, specifying the
number of shares of Common Stock with respect to which the stock appreciation
right is being exercised. If requested by the Committee, the Participant shall
deliver the agreement evidencing the stock appreciation right being exercised
and the agreement evidencing any related Option to the Company who shall endorse
thereon a notation of such exercise and return such agreement to the
Participant.

                  (e) Form of Payment. Payment of the amount determined under
this Section 11 may be made in the discretion of the Committee solely in whole
shares of Common Stock in a number determined at their Fair Market Value on the
date preceding the date of exercise of the stock appreciation right, or solely
in cash, or in a combination of cash and shares. If the Committee decides to
make full payment in shares in Common Stock and the amount payable results in a
fractional share, payment for the fractional share will be made in cash.

         12. Share Awards. Subject to such performance and employment conditions
as the Committee may determine, awards of Common Stock or awards based on the
value of the Common Stock may be granted either alone or in addition to other
Awards granted under the Plan. Any Awards under this Section 12 and any Common
Stock covered by any such Award may be forfeited to the extent so provided in
the Award agreement, as determined by the Committee. Payment of Common Stock
awards made under this Section 12 which are based on the value of Common Stock
may be made in Common Stock or in cash or in a combination thereof (based upon
the Fair Market Value of the Common Stock on the date of payment), all as
determined by the Committee in its sole discretion.

         13. Special Provisions.

                  (a) Change in Control. Unless otherwise provided in an Award
agreement, upon the occurrence of a Change in Control, all Options and stock
appreciation rights shall automatically become vested and exercisable in full
and all restrictions or performance conditions, if any, on any Common Stock
awards, restricted Common Stock, restricted Common Stock units, performance
shares or performance share units granted hereunder shall automatically lapse.
The Committee may, in its discretion, include such further provisions and
limitations in any agreement documenting such Awards as it may deem equitable
and in the best interests of the Company.

                  (b) Forfeiture. Notwithstanding anything in the Plan to the
contrary and unless otherwise specifically provided in an Award agreement, in
the event of a serious breach of conduct by a Participant or former Participant
(including, without limitation, any conduct prejudicial to or in conflict with
the Company or its Subsidiary) the Committee may (i) cancel any outstanding
Award granted to such Participant or former Participant, in whole or in part,
whether or not vested, and/or (ii) if such conduct or activity occurs within one
year following the exercise or payment of an Award, require

                                       12
<PAGE>

such Participant or former Participant to repay to the Company any gain realized
or payment received upon the exercise or payment of such Award (with such gain
or payment valued as of the date of exercise or payment). Such cancellation or
repayment obligation shall be effective as of the date specified by the
Committee. Any repayment obligation shall be satisfied in cash or, if permitted
in the sole discretion of the Committee, it may be satisfied in shares of Common
Stock (based upon the Fair Market Value of the share of Common Stock on the date
of payment), and the Committee may provide for an offset to any future payments
owed by the Company or any Subsidiary to the Participant or former Participant
if necessary to satisfy the repayment obligation. The determination of whether a
Participant or former Participant has engaged in a serious breach of conduct or
any activity in competition with any of the businesses of the Company or any
Subsidiary shall be determined by the Committee in good faith and in its sole
discretion.

                  (c) Deferral. The Committee shall be authorized to establish
procedures pursuant to which the payment of any Award may be deferred. Subject
to the provisions of the Plan and any Award agreement, the recipient of an Award
(including, without limitation, any deferred Award) may, if so determined by the
Committee, be entitled to receive, currently or on a deferred basis, cash
dividends, or cash payments in amounts equivalent to cash dividends on shares
("dividend equivalents"), with respect to the number of shares of Common Stock
covered by the Award, as determined by the Committee, in its sole discretion,
and the Committee may provide that such amounts (if any) shall be deemed to have
been reinvested in additional shares or otherwise reinvested.

         14. Withholding. Upon (a) disposition of shares of Common Stock
acquired pursuant to the exercise of an Incentive Stock Option granted pursuant
to the Plan within two years of the grant of the Incentive Stock Option or
within one year after exercise of the Incentive Stock Option, or (b) exercise of
a Nonqualified Stock Option (or an Incentive Stock Option treated as a
Nonqualified Stock Option), exercise of a stock appreciation right or the
vesting or payment of any other Award under the Plan, or (c) under any other
circumstances determined by the Committee in its sole discretion, the Company
shall have the right to require any Participant, and such Participant by
accepting the Awards granted under the Plan agrees, to pay to the Company the
amount of any taxes which the Company shall be required to withhold with respect
thereto. In the event of clauses (a), (b) or (c), with the consent of the
Committee, at the Committee's sole discretion, such Participant may elect to pay
to the Company an amount equal to the amount of the taxes that the Company shall
be required to withhold by delivering to the Company shares of Common Stock
having a Fair Market Value equal to the amount of the withholding tax obligation
as determined by the Company; provided, however, that no shares of Common Stock
are withheld with a value exceeding the minimum amount of tax required to be
withheld by law. Such shares so delivered to satisfy the minimum withholding
obligation may be either shares withheld by the Company upon the exercise of the
Option or other shares. At the Committee's sole discretion, a Participant may
elect to have additional taxes withheld and satisfy such withholding with cash
or shares of Common Stock held for at least six (6) months

                                       13
<PAGE>

prior to exercise, if, in the opinion of the Company's outside accountants,
doing so would not result in a charge against earnings.

         15. Nontransferability, Beneficiaries. Unless otherwise determined by
the Committee with respect to the transferability of Nonqualified Stock Options
by a Participant to his Immediate Family Members (or to trusts or partnerships
or limited liability companies established for such family members), no Award
shall be assignable or transferable by the Participant, otherwise than by will
or the laws of descent and distribution or pursuant to a beneficiary
designation, and Options shall be exercisable, during the Participant's
lifetime, only by the Participant (or by the Participant's legal representatives
in the event of the Participant's incapacity). Each Participant may designate a
beneficiary to exercise any Option held by the Participant at the time of the
Participant's death or to be assigned any other Award outstanding at the time of
the Participant's death. If no beneficiary has been named by a deceased
Participant, any Award held by the Participant at the time of death shall be
transferred as provided in the Participant's will or by the laws of descent and
distribution. Except in the case of the holder's incapacity, an Option may only
be exercised by the holder thereof.

         16. No Right to Continuous Service. Nothing contained in the Plan or in
any Award under the Plan shall confer upon any Participant any right with
respect to the continuation of service with the Company or any of its
Subsidiaries, or interfere in any way with the right of the Company or its
Subsidiaries to terminate his or her Continuous Service at any time. Nothing
contained in the Plan shall confer upon any Participant or other person any
claim or right to any Award under the Plan.

         17. Governmental Compliance. Each Award under the Plan shall be subject
to the requirement that if at any time the Committee shall determine that the
listing, registration or qualification of any shares issuable or deliverable
thereunder upon any securities exchange or under any Federal or state law, or
the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition thereof, or in connection therewith, no such grant or
award may be exercised or shares issued or delivered unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Committee.

         18. Adjustments; Corporate Events.

                  (a) In the event of any dividend or other distribution
(whether in the form of cash, Common Stock, other securities, or other
property), recapitalization, reclassification, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of the assets of the Company, or
exchange of Common Stock or other securities of the Company, issuance of
warrants or other rights to purchase Common Stock or other securities of the
Company, or other similar corporate transaction or event (an "Event"), and in
the Committee's opinion, such event affects the Common Stock such that an
adjustment is determined by the Committee to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan or with respect to an

                                       14
<PAGE>

Award, then the Committee shall, in such manner as it may deem equitable,
including, without limitation, adjust any or all of the following: (i) the
number and kind of shares of Common Stock (or other securities or property) with
respect to which Awards may be granted or awarded; (ii) the number and kind of
shares of Common Stock (or other securities or property) subject to outstanding
Awards; and (iii) the grant or exercise price with respect to any Award. The
Committee determination under this Section 18(a) shall be final, binding and
conclusive. Any such adjustment made to an Incentive Stock Option shall be made
in accordance with Section 424(a) of the Code unless otherwise determined by the
Committee in its sole discretion. The Committee's determination under this
Section 18(a) shall be final, binding and conclusive.

                  (b) Upon the occurrence of an Event in which outstanding
Awards are not to be assumed or otherwise continued following such an Event, the
Committee may, in its discretion, terminate any outstanding Award without a
Participant's consent and (i) provide for either the purchase of any such Award
for an amount of cash equal to the amount that could have been attained upon the
exercise of such Award or realization of the Participant's rights had such Award
been currently exercisable or payable or fully vested or the replacement of such
Award with other rights or property selected by the Committee in its sole
discretion and/or (ii) provide that such Award shall be exercisable (whether or
not vested) as to all shares covered thereby for at least thirty (30) days prior
to such Event.

                  (c) The existence of the Plan, the Award agreement and the
Awards granted hereunder shall not affect or restrict in any way the right or
power of the Company 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 stock or of options, warrants or rights to purchase stock or of
bonds, debentures, preferred or prior preference stocks whose rights are
superior to or affect the Common Stock or the rights thereof or which are
convertible into or exchangeable for Common Stock, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.

         19. Award Agreement. Each Award under the Plan shall be evidenced by an
agreement setting forth the terms and conditions, as determined by the
Committee, which shall apply to such Award, in addition to the terms and
conditions specified in the Plan.

         20. Amendment. The Board may amend, suspend or terminate the Plan or
any portion thereof at any time, provided that (a) no amendment shall be made
without stockholder approval if such approval is necessary to comply with any
applicable law, regulation or stock exchange rule and (b) except as provided in
Section 18, no amendment shall be made that would adversely affect the rights of
a Participant under an Award theretofore granted, without such Participant's
written consent.

                                       15
<PAGE>

         21. General Provisions.

                  (a) The Committee may require each Participant purchasing or
acquiring shares pursuant to an Award under the Plan to represent to and agree
with the Company in writing that such Participant is acquiring the shares for
investment and without a view to distribution thereof.

                  (b) All certificates for Common Stock delivered under the Plan
pursuant to any Award shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations,
and other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Common Stock is then listed, and any applicable Federal
or state securities law, and the Committee may cause a legend or legends to be
put on any such certificates to make appropriate reference to such restrictions.
If the Committee determines that the issuance of Common Stock hereunder is not
in compliance with, or subject to an exemption from, any applicable Federal or
state securities laws, such shares shall not be issued until such time as the
Committee determines that the issuance is permissible.

                  (c) It is the intent of the Company that the Plan satisfy, and
be interpreted in a manner that satisfies, the applicable requirements of Rule
16b-3 as promulgated under Section 16 of the Exchange Act so that Participants
will be entitled to the benefit of Rule 16b-3, or any other rule promulgated
under Section 16 of the Exchange Act, and will not be subject to short-swing
liability under Section 16 of the Exchange Act. Accordingly, if the operation of
any provision of the Plan would conflict with the intent expressed in this
Section 21(c), such provision to the extent possible shall be interpreted and/or
deemed amended so as to avoid such conflict.

                  (d) Except as otherwise provided by the Committee in the
applicable grant or Award agreement, a Participant shall have no rights as a
stockholder with respect to any shares of Common Stocks subject to an Award
until a certificate or certificates evidencing shares of Common Stock shall have
been issued to the Participant and, subject to Section 18, no adjustment shall
be made for dividends or distributions or other rights in respect of any share
for which the record date is prior to the date on which Participant shall become
the holder of record thereof.

                  (e) The law of the State of Delaware shall apply to all Awards
and interpretations under the Plan regardless of the effect of such state's
conflict of laws principles.

                  (f) Where the context requires, words in any gender shall
include any other gender.

                  (g) Headings of Sections are inserted for convenience and
reference; they do not constitute any part of this Plan.

                                       16
<PAGE>

                  (h) The Committee shall have the power to accelerate the time
at which an Award shall be exercisable or vest notwithstanding the terms of any
Award agreement.

                  (i) No payment pursuant to the Plan shall be taken into
account in determining any benefits pursuant to any pension, retirement,
savings, profit sharing, group insurance, welfare or other benefit plan of the
Company or any Subsidiary except to the extent otherwise expressly provided in
writing in such other plan or an agreement thereunder.

                  (j) The expenses of administering the Plan shall be borne by
the Company and its Subsidiaries.

                  (k) No fractional shares of Common Stock shall be issued and
the Committee shall determine, in its discretion, whether cash shall be given in
lieu of fractional shares or whether such fractional shares shall be eliminated
by rounding up or down as appropriate.

                  (l) The Plan is intended to be an "unfunded" plan for
incentive compensation. With respect to any payments not yet made to a
Participant pursuant to an Award, nothing contained in the Plan or any Award
agreement shall give the Participant any rights that are greater than those of a
general creditor of the Company or any Subsidiary.

         22. Expiration of the Plan. Subject to earlier termination pursuant to
Section 20, no Award may be granted following the ten (10) year anniversary of
the Effective Date and except with respect to outstanding Awards, this Plan
shall terminate.

         23. Effective Date; Approval of Stockholders. The Plan is effective as
of the date it is approved by the affirmative vote of the holders of a majority
of the securities of the Company present, or represented, and entitled to vote
at a meeting of stockholders duly held in accordance with the applicable laws of
the State of Delaware (the "Effective Date"). Unless the Company determines to
submit Section 9 of the Plan and the definition of Performance Goal to the
Company's stockholders at the first stockholder meeting that occurs in the fifth
year following the year in which the Plan was last approved by stockholders (or
any earlier meeting designated by the Board), in accordance with the
requirements of Section 162(m) of the Code, and such stockholder approval is
obtained, then no further performance shares shall be made to Covered Employees
under Section 9 after the date of such annual meeting, but the remainder of the
Plan shall continue in effect.

                                       17<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

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