Document:

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                                                                   EXHIBIT 4(c)

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                                K N ENERGY, INC.

                                      AND

                     CONTINENTAL BANK, NATIONAL ASSOCIATION

                                                   TRUSTEE.
                                   ----------

                         SECOND SUPPLEMENTAL INDENTURE

                                   ----------

                         Dated as of December 15, 1992

                          Supplementing the Indenture
                                  dated as of
                               September 1, 1988

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         THIS SECOND SUPPLEMENTAL INDENTURE, dated as of December 15, 1992,
between K N Energy, Inc., a Kansas corporation (the "Company"), and Continental
Bank, National Association, a national banking association (the "Trustee"), as
Trustee under the Original Indenture referred to below,

                              W I T N E S S E T H:

         WHEREAS, the Company has duly authorized the issuance from time to
time of its unsecured debentures, notes or other evidences of indebtedness (the
"Securities"), which are to be issued in one or more series; and the Company has
heretofore made, executed and delivered to the Trustee its Indenture dated as
of September 1, 1988 (such Indenture, as amended by the Trust Indenture Reform
Act of 1990 and the First Supplemental Indenture dated as of January 15, 1992,
being sometimes referred to herein as the "Original Indenture") pursuant to
which the Securities are issuable;

         WHEREAS, Sections 2.01, 9.01(7) and 11.01 of the Original Indenture
provide that the form or terms of any series of Securities may be established
in an indenture supplemental thereto, and the Company desires to establish in
this Second Supplemental Indenture both the form and terms of a series of
Securities designated as its 7.27% Senior Notes due December 15, 2002 (the
"Notes");

         WHEREAS, Section 9.01 of Article Nine of the Original Indenture
further provides that under certain conditions the Company and Trustee, may,
without the consent of any Holders, from time to time and at any time, enter
into an indenture or indentures supplemental thereto, for the purposes, inter
alia, of adding to the covenants of the Company for the benefit of the Holders
of all or any series of Securities, and adding any additional Events of
Default, and the Company desires by means of this Second Supplemental Indenture
to add to its covenants for the sole benefit of the Holders of the Notes and to
add certain additional Events of Default, also solely for the benefit of such
Holders;

         WHEREAS, all things necessary to authorize the execution and delivery
of this Second Supplemental Indenture, to establish the Notes as provided for
in this Second Supplemental Indenture, and to make the Original Indenture, as
supplemented by this Second Supplemental Indenture (the Original Indenture, as
so supplemented by this Second Supplemental Indenture, being sometimes referred
to herein as the "Indenture"), a valid agreement of the Company, in accordance
with its terms, have been done;

         NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH that for
and in consideration of the premises and the purchase of the Notes by the
Holders, the Company and the Trustee mutually covenant and agree, solely

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for the equal and proportionate benefit of the respective Holders from time to
time of the Notes, as follows:

                                  ARTICLE 1

                      SUPPLEMENT OF THE ORIGINAL INDENTURE

         Section 1.1 SUPPLEMENT TO ARTICLE ONE OF THE ORIGINAL INDENTURE.
Section 1.01 of the Original Indenture is supplemented by inserting therein, in
alphabetical order, the following definitional paragraphs:

         "Assets" means any property of the Company or a Subsidiary used in
businesses in which the Company and its Subsidiaries are engaged as of December
15, 1992.

         "Called Principal" means, with respect to any Note, the principal of
such Note that is to be redeemed at the option of the Company or is declared to
be immediately due and payable pursuant to the acceleration provisions of the
Indenture, as the context requires.

         "Capitalization" means, with respect to any Material Subsidiary, the
sum of (A) the total of the amounts set forth on the consolidated balance sheet
of such Material Subsidiary and its Subsidiaries, prepared in accordance with
generally accepted accounting principles as of the date of the most recent
regularly prepared consolidated financial statements prior to the taking of any
action for the purpose of which the determination is being made, as (a) the par
or stated value of all outstanding capital stock of such Material Subsidiary,
(b) capital in excess of par value, (c) retained earnings and (d) deferred
income taxes and (B) the principal amount of Funded Indebtedness of such
Material Subsidiary and its Subsidiaries computed on a consolidated basis as of
the time of such determination.

         "Consolidated Assets" means the total amount of assets appearing on
the consolidated balance sheet of the Company and its Subsidiaries, prepared in
accordance with generally accepted accounting principles as of the date of the
most recent regularly prepared consolidated financial statements prior to the
taking of any action for the purposes of which the determination is being made.

         "Consolidated Capitalization" means the sum of (A) the total of the
amounts set forth on the consolidated balance sheet of the Company and its
Subsidiaries, prepared in accordance with generally accepted accounting
principles as of the date of the most recent regularly prepared consolidated
financial statements prior to the taking of any action for the purpose of which
the determination is being made, as (a) the par or stated value of all
outstanding capital stock of the Company, (b) capital in excess of par value,

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(c) retained earnings and (d) deferred income taxes and (B) the principal
amount of Funded Indebtedness of the Company and its Subsidiaries computed on a
consolidated basis as of the time of such determination.

         "Discounted Value" means, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining Scheduled Payments with
respect to such Called Principal from their respective Stated Maturities to the
Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Notes is payable) equal to the
Reinvestment Yield with respect to such Called Principal.

         "Executive Officer" means the Chairman, any Vice Chairman, the
President, the Chief Financial Officer and the General Counsel of the Company,
and, to the extent not included in the foregoing, the chief executive officer,
the chief operating officer and the chief accounting officer of the Company.

         "Material Subsidiary" means (i) any Subsidiary the assets of which
constitute 15% or more of Consolidated Assets; (ii) Northern Gas Company, a
Wyoming corporation; and (iii) Rocky Mountain Natural Gas Company, a Colorado
corporation.

         "Notes" means the series of the Securities denominated as the 7.27%
Senior Notes due December 15, 1992.

         "Note Agreement" means the Note Agreement dated as of December 15,
1992 among the Company, The Prudential Insurance Company of America and
Prudential Reinsurance Company, as the same may be amended or supplemented from
time to time.

         "Reinvestment Yield" means, with respect to the Called Principal of
any Note, the yield to maturity implied by (i) the yields reported, as of
10:00 a.m. (New York City time) on the Business Day next preceding the
Settlement Date with respect to such Called Principal, on the display designated
as "Page 678" on the Telerate Service (or such other display as may replace Page
678 on the Telerate Service) for actively traded U.S. Treasury securities having
a maturity equal to the Remaining Average life of such Called Principal as of
such Settlement Date, or if such yields shall not be reported as of such time or
the yields reported as of such time shall not be ascertainable, (ii) the
Treasury Constant Maturity Series yields reported, for the latest day for which
such yields shall have been so reported as of the Business Day next preceding
the Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date. Such
implied yield shall be determined, if necessary, by (a) converting

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U.S. Treasury bill quotations to bond-equivalent yields in accordance with
accepted financial practice and (b) interpolating linearly between yields
reported for various maturities.

         "Remaining Average Life" means, with respect to the Called Principal
of any Note, the number of years (calculated to the nearest one-twelfth year)
obtained by dividing (i) such Called Principal into (ii) the sum of the
products obtained by multiplying (a) each Remaining Scheduled Payment of such
Called Principal (but not of interest thereon) by (b) the number of years
(calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the Stated Maturity
of such Remaining Scheduled Payment.

         "Remaining Scheduled Payments" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
Stated Maturity.

         "Settlement Date" means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be redeemed at the option
of the Company or is declared to be immediately due and payable pursuant to the
acceleration provisions of the Indenture, as the context requires.

         "Stock" means any capital stock of any corporation or any partnership
interest of any partnership (limited or general), any joint venture interest in
any joint venture, and any similar interests.

         "Tangible Net Worth" means the total assets of the Company and its
Subsidiaries appearing on a consolidated balance sheet prepared in accordance
with generally accepted accounting principles (exclusive of goodwill, patents,
trademarks, trade names, organization expense, treasury stock, unamortized debt
discount and premium, deferred charges and other like intangibles) less all
liabilities (including deferred income taxes and subordinated liabilities).

         "Yield-Maintenance Amount" means, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Called Principal of
such Note over the sum of (i) such Called Principal plus (ii) interest accrued
thereon as of (including interest due on) the Settlement Date with respect to
such Called Principal. The Yield Maintenance Amount shall in no event be less
than zero.

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         Section 1.2 SUPPLEMENT TO ARTICLE FOUR OF THE ORIGINAL INDENTURE.
Article Four of the Original Indenture is supplemented by inserting the
following Sections at the end thereof:

         Section 4.13.  Maintain Business.

         The Company will, and will cause each of its Subsidiaries to, carry on
and conduct its respective business in substantially the same manner and in
substantially the same general lines of business as it is presently conducted,
including without limitation the transmission and retail distribution of
natural gas.

         Section 4.14. Maintain Insurance.

         The Company will maintain or cause to be maintained with, in the good
faith judgment of the Company, financially sound and reputable insurers, or
through self-insurance, insurance with respect to its properties and business
and the properties and businesses of its Subsidiaries against loss or damage of
the kinds customarily insured against by corporations of established reputation
engaged in the same or similar business and similarly situated, of such types
and in such amounts as are customarily carried under similar circumstances by
such other corporations. Such insurance may include self-insurance or be
subject to co-insurance, deductibility or similar clauses which, in effect,
result in self-insurance of certain losses, provided that such self-insurance
is in accord with the approved practices of corporations similarly situated and
adequate insurance reserves are maintained in connection with such
self-insurance, and, notwithstanding the foregoing provisions of this Section
4.14 the Company or any Subsidiary may effect workers' compensation or similar
insurance in respect of operations in any state or other jurisdiction either
through an insurance fund operated by such state or other jurisdiction or by
causing to be maintained a system or systems of self-insurance in accord with
applicable laws.

         Section 4.15. Funded Indebtedness.

         The Company will not incur, and will not permit any Subsidiary to
incur, any Funded Indebtedness unless the aggregate amount of Funded
Indebtedness of the Company and its Subsidiaries computed on a consolidated
basis immediately thereafter (after giving effect to the substantially
concurrent use of proceeds of such Funded Indebtedness) will not exceed an
amount equal to 65% of Consolidated Capitalization.

         Section 4.16. Subsidiary Debt.

         The Company will not permit any of its Material Subsidiaries to incur
any Funded Indebtedness unless the aggregate amount of Funded Indebtedness of
such Material Subsidiary and its Subsidiaries immediately thereafter (after
giving effect to the

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substantially concurrent use of proceeds of such Funded Indebtedness) will not
exceed an amount equal to 65% of such Material Subsidiary's Capitalization.
Further, the Company will not permit any of its Subsidiaries to incur any
Funded Indebtedness unless the aggregate amount of Funded Indebtedness of all
of the Company's Subsidiaries immediately thereafter (after giving effect to
the substantially concurrent use of proceeds of such Funded Indebtedness) will
not exceed an amount equal to 51% of the aggregate amount of Funded
Indebtedness of the Company and its Subsidiaries. For purposes of this Section
4.16, the term "Funded Indebtedness" excludes any Funded Indebtedness of the
Company to its Subsidiaries or any Funded Indebtedness of a Subsidiary to the
Company or another Subsidiary.

         Section 4.17. Net Worth.

         If at any time the rating of any of the long term senior debt of the
Company is reduced by either Moody's Investors Service or Standard & Poor's
Corporation to a rating below Baa2 or BBB+, as applicable (or in the absence of
such a rating by either Standard & Poor's Corporation or Moody's Investors
Service, a rating comparable to Baa2 by another nationally recognized
statistical rating organization) (any such event, a "Downgrade"), then the
Company will not permit its Tangible Net Worth to be less than the greater of
(i) $150,000,000 or (ii) an amount equal to 90% of the Company's Tangible Net
Worth as of the fiscal year end next preceding the date of the Downgrade.

         Section 4.18. Sale of Assets.

         The Company will not, and will not permit any Subsidiary to, sell,
transfer or otherwise dispose of, in a transaction or a series of substantially
related transactions, Stock of a Subsidiary, property or other assets
(including without limitation a disposition of the Stock of a Subsidiary,
property or other assets pursuant to an order, judgment or decree of a court or
governmental authority) with a fair market value of 20% or more of Consolidated
Assets (other than any such disposition by a Subsidiary to the Company or by
the Company or a Subsidiary to another Subsidiary), unless (i) said Stock,
property or other assets are sold, transferred or otherwise disposed of for a
consideration at least equal to the fair value thereof (as determined by the
Board of Directors of the Company) and (ii) the proceeds of such asset
disposition are applied to the defeasance or the payment of Funded Indebtedness
of the Company or any Subsidiary, or used within twelve months of such asset
disposition to purchase or invest in Assets.

         Section 4.19. Sale of Subsidiary Stock.

         Issuance of Stock by Subsidiaries. The Company will not, and will not
permit any Subsidiary to, issue, sell or otherwise dispose of any Stock (either
directly, or indirectly by

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the issuance of rights or options for, or securities convertible into, such
Stock) of any Material Subsidiary (other than directors' qualifying shares),
except to the Company or another Material Subsidiary, if, as a result of such
issuance, sale or disposition (giving full effect to the exercise of any such
rights, options or conversion rights) such Material Subsidiary would no longer
qualify as a Subsidiary.

         Section 4.20. Waiver of Certain Covenants.

         The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 4.13 through 4.19,
inclusive, with respect to the Notes if before the time for such compliance the
holders of at least 66 2/3% in aggregate principal amount of the Outstanding
Notes shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision or condition,
but no such waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.

         Section 4.21. Premium on Certain Defaults.

         The Company will pay a premium on each of the Outstanding Notes equal
to the Yield-Maintenance Amount, if any, in the event the Notes are declared to
be due and payable immediately pursuant to Article Six as a result of any of
the Events of Default referred to either in clauses (1)-(5) of Section 6.01 or
in subclauses (a)-(e) of clause (8) thereof.

         Section 1.3 SUPPLEMENT TO ARTICLE SIX OF THE ORIGINAL INDENTURE.
Section 6.01 of the Original Indenture is supplemented by inserting, as part of
clause (8) thereof, the following subclauses:

                  (a) default in the payment of any interest on any Note for
         more than 10 days after the date due; or

                  (b) the Company or any Subsidiary defaults (whether as
         primary obligor or as guarantor or other surety) in any payment of
         principal of or interest on any Indebtedness (other than the Notes)
         beyond any period of grace provided with respect thereto, or the
         Company or any Subsidiary fails to perform or observe any other
         agreement, term or condition contained in any agreement under which
         any such Indebtedness is created (or if any other event thereunder or
         under any such agreement shall occur and be continuing) and the effect
         of such failure or other event is to cause, or to permit the holder or
         holders of such Indebtedness (or a trustee on behalf of such holder or
         holders) to cause, such Indebtedness to become

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         due (or to be repurchased by the Company or any Subsidiary) prior to
         any Stated Maturity, provided that the aggregate amount of all
         Indebtedness as to which such a payment default shall occur and be
         continuing or such a failure or other event causing or permitting
         acceleration (or resale to the Company or any Subsidiary) shall occur
         and be continuing exceeds $10,000,000; provided, however, if any such
         payment default, failure or other event is cured by the Company or
         such Subsidiary or is waived by the specified percentage of holders of
         such Indebtedness entitled to so waive, then this Event of Default
         under this Indenture by reason of such default, failure or other event
         shall be deemed to have been cured; or

                  (c) any representation or warranty made by the Company in or
         pursuant to the Note Agreement shall be false in any material respect
         on the date as of which made; or

                  (d) the Company fails to perform or observe (i) any covenant
         contained in Section 4.15 through Section 4.19 or (ii) its covenant
         contained in paragraph 5 of the Note Agreement to obtain the prior
         approval of certain holders of the Notes to any instrument equally and
         ratably securing the Notes and any other indebtedness of the Company
         under the circumstances described in the initial paragraph of Section
         4.07, but if any such failure under the Note Agreement is cured by the
         Company or is waived by the specified percentage of Holders of the
         Notes entitled to so waive thereunder, then this Event of Default
         under this Indenture by reason of such failure shall be deemed to have
         been cured; or

                  (e) the Company fails to perform or observe any other
         covenant or agreement contained in Section 4.13 or 4.14 or in the Note
         Agreement and such failure shall not be remedied within 30 days after
         any Executive Officer obtains actual knowledge thereof, but if any
         such failure under the Note Agreement is cured by the Company or is
         waived by the specified percentage of Holders of the Notes entitled to
         so waive thereunder, then this Event of Default under this Indenture
         by reason of such failure shall be deemed to have been cured; or

                  (f) the entry by a court having jurisdiction in the premises
         of (A) a decree or order for relief in respect of any Material
         Subsidiary in an involuntary case or proceeding under any applicable
         Federal or State bankruptcy, insolvency, reorganization or other
         similar law or (B) a decree or order adjudging any Material Subsidiary
         bankrupt or insolvent, or approving as properly filed a petition
         seeking reorganization, arrangement, adjustment or composition of or
         in respect of any Material Subsidiary under any applicable Federal or
         State law, or appointing a custodian, receiver, liquidator, assignee,
         trustee, sequestrator or other similar official of any Material
         Subsidiary or of any substantial part of its property, or ordering the

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         winding up or liquidation of its affairs, and the continuance of any
         such decree or order for relief or any such other decree or order
         unstayed and in effect for a period of 90 consecutive days; or

                  (g) the commencement by any Material Subsidiary of a
         voluntary case or proceeding under any applicable Federal or State
         bankruptcy, insolvency, reorganization or other similar law or of any
         other case or proceeding to be adjudicated bankrupt or insolvent, or
         the consent by it to the entry of a decree or order for relief in
         respect of any Material Subsidiary in an involuntary case or
         proceeding under any applicable Federal or State bankruptcy,
         insolvency, reorganization or other similar law or to the commencement
         of any bankruptcy or insolvency case or proceeding against it, or the
         filing by it of a petition or answer or consent seeking reorganization
         or relief under any applicable Federal or State law, or the consent by
         it to the filing of such petition or to the appointment of or taking
         possession by a custodian, receiver, liquidator, assignee, trustee,
         sequestrator or similar official of any Material Subsidiary or of any
         substantial part of its property, or the making by it of an assignment
         for the benefit of creditors, or the admission by it in writing of its
         inability to pay its debts generally as they become due, or the taking
         of corporate action by any Material Subsidiary in furtherance of any
         such action; or

                  (h) a final judgment in an amount in excess of $50,000,000 is
         rendered against the Company or any Material Subsidiary and, within 30
         days after entry thereof, such judgment is not discharged or execution
         thereof stayed pending appeal, or within 30 days after the expiration
         of any such stay, such judgment is not discharged.

                                   ARTICLE 2

                                   THE NOTES

         Section 2.1 FORM AND TERMS. In lieu of any form set forth in Sections
11.02 and 11.03 of the Original Indenture, the Notes shall be in the form of
Exhibit A hereto. The terms of the Notes set forth in Exhibit A shall be part
of the terms and provisions of this Second Supplemental Indenture as fully as
if set forth herein.

         Section 2.2 DENOMINATIONS. The Notes shall be issuable in registered
form without coupons in denominations of $100,000 and any integral multiple
thereof, except as such amounts may be adjusted following a partial redemption
and related selections of the Notes pursuant to Section 2.3 of this Second
Supplemental Indenture.

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         Section 2.3 SELECTION OF SECURITIES FOR PARTIAL REDEMPTION. If less
than all the Notes are to be redeemed pursuant to either Article Three or
Twelve of the Indenture, then, in lieu of the selection procedures described in
the initial paragraph of Section 3.03 of the Indenture, the Trustee shall
select for redemption not more than 45 days prior to the Redemption Date an
equal proportion of the respective principal amounts of each of the Outstanding
Notes (including, for purposes of this provision only, any Notes owned by the
Company or any other obligor upon the Notes or any Affiliate of the Company or
of such other obligor that have been purchased or otherwise acquired by it
other than by redemption pursuant to such Article Three or Twelve).

                                   ARTICLE 3

                         REPRESENTATIONS OF THE COMPANY

         Section 3.1 AUTHORITY OF THE COMPANY. The Company is duly authorized
to execute and deliver this Second Supplemental Indenture, and all corporate
action on its part required for the execution and delivery of this Second
Supplemental Indenture has been duly and effectively taken.

         Section 3.2 TRUTH OF RECITALS AND STATEMENTS. The Company warrants
that the recitals of fact and statements contained in this Second Supplemental
Indenture are true and correct, and that the recitals of fact and statements
contained in all certificates and other documents furnished thereunder will be
true and correct.

                                   ARTICLE 4

                             CONCERNING THE TRUSTEE

         Section 4.1 ACCEPTANCE OF TRUSTS. The Trustee accepts the trusts
hereunder and agrees to perform the same, but only upon the terms and
conditions set forth in the Original Indenture and in this Second Supplemental
Indenture, to all of which the Company and the respective Holders of the Notes
at any time hereafter outstanding agree by their acceptance thereof.

         Section 4.2 NO RESPONSIBILITY OF TRUSTEE FOR RECITALS, ETC. The
recitals and statements contained in this Second Supplemental Indenture shall
be taken as the recitals and statements of the Company, and the Trustee assumes
no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Second Supplemental
Indenture, except that the Trustee is duly authorized to execute and deliver
this Second Supplemental Indenture.

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                                   ARTICLE 5

                            MISCELLANEOUS PROVISIONS

         Section 5.1 RELATION TO THE INDENTURE. The provisions of this Second
Supplemental Indenture shall become effective immediately upon the execution
and delivery hereof. This Second Supplemental Indenture and all the terms and
provisions herein contained shall form a part of the Indenture as fully and
with the same effect as if all such terms and provisions had been set forth in
the Original Indenture; provided, however, such terms and provisions shall be
so included in the Indenture solely for the benefit of the Holders of the
Notes. The Original Indenture is hereby ratified and confirmed and shall remain
and continue in full force and effect in accordance with the terms and
provisions thereof, as supplemented by this Second Supplemental Indenture, and
the Original Indenture and this Second Supplemental Indenture shall be read,
taken and construed together as one instrument.

         Section 5.2 MEANING OF TERMS. Any term used in this Second
Supplemental Indenture which is defined in the Original Indenture shall have
the meaning specified in the Original Indenture, unless the context shall
otherwise require.

         Section 5.3 COUNTERPARTS OF SECOND SUPPLEMENTAL INDENTURE. This Second
Supplemental Indenture may be executed in several counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
instruments.

         Section 5.4 GOVERNING LAW. This Second Supplemental Indenture and the
Notes shall be governed by and construed in accordance with the laws of the
State of New York.

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         IN WITNESS WHEREOF, K N Energy, Inc. has caused this Second
Supplemental Indenture to be executed in its corporate name by one of its Vice
Presidents and Continental Bank, National Association, has caused this Second
Supplemental Indenture to be executed in its corporate name by one of its Vice
Presidents or Trust Officers, all as of the date first above written.

                                 K N ENERGY, INC.

                                 By:  /s/  E. Wayne Lundhagen
                                      -----------------------------------------
                                      E. Wayne Lundhagen
                                      Vice President -- Finance & Accounting

                                 CONTINENTAL BANK, NATIONAL
                                    ASSOCIATION, Trustee

                                 By:   /s/ A. H. Lenters
                                       ----------------------------------------
                                       A. H. Lenters
                                       Vice President

                                     -13-<PAGE>   1

                                                                 EXHIBIT 10(d)

                                K N ENERGY, INC.

                     NONQUALIFIED DEFERRED COMPENSATION PLAN

<PAGE>   2

                                K N ENERGY, INC.
                     NONQUALIFIED DEFERRED COMPENSATION PLAN

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

     Article        Section                                                                           Page
     -------        -------                                                                           ----
<S>                 <C>           <C>                                                                  <C>
          I                       Purpose and Effective Date  . . . . . . . . . . . . . . . . . . . . .  1
                     1.01         Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1
                     1.02         Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1
                     1.03         Effective Date  . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

         II                       Definitions and Construction of the Plan Document . . . . . . . . . .  1
                     2.01         Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1
                     2.02         Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1
                     2.03         Bookkeeping Account . . . . . . . . . . . . . . . . . . . . . . . . .  1
                     2.04         Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1
                     2.05         Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1
                     2.06         Deferral Agreement  . . . . . . . . . . . . . . . . . . . . . . . . .  1
                     2.07         Deferred Compensation . . . . . . . . . . . . . . . . . . . . . . . .  1
                     2.08         Election Date . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1
                     2.09         Executive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2
                     2.10         Named Fiduciary . . . . . . . . . . . . . . . . . . . . . . . . . . .  2
                     2.11         Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2
                     2.12         Plan  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2
                     2.13         Plan Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2
                     2.14         Termination of Service  . . . . . . . . . . . . . . . . . . . . . . .  2
                     2.15         Valuation Date  . . . . . . . . . . . . . . . . . . . . . . . . . . .  2
                     2.16         Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . .  2
                     2.17         Titles  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2

        III                       Eligibility and Participation . . . . . . . . . . . . . . . . . . . .  2
                     3.01         Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2
                     3.02         Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2

         IV                       Deferral of Compensation  . . . . . . . . . . . . . . . . . . . . . .  3
                     4.01         Salary Deferral . . . . . . . . . . . . . . . . . . . . . . . . . . .  3
                     4.02         Incentive Compensation Deferral . . . . . . . . . . . . . . . . . . .  3
                     4.03         Deferral Agreement  . . . . . . . . . . . . . . . . . . . . . . . . .  3
                     4.04         No Deferral Without Agreement . . . . . . . . . . . . . . . . . . . .  3
                     4.05         Duration of Deferral Agreement  . . . . . . . . . . . . . . . . . . .  3

          V                       Deferral Account and Crediting  . . . . . . . . . . . . . . . . . . .  3
                     5.01         Bookkeeping Account . . . . . . . . . . . . . . . . . . . . . . . . .  3
                     5.02         Account Valuation . . . . . . . . . . . . . . . . . . . . . . . . . .  3
                     5.03         Transfer Among Funds  . . . . . . . . . . . . . . . . . . . . . . . .  4
                     5.04         Statement of Account  . . . . . . . . . . . . . . . . . . . . . . . .  4
</TABLE>

<PAGE>   3

                               TABLE OF CONTENTS
                                  (CONTINUED)

<TABLE>
<CAPTION>

<S>                  <C>           <C>                                                                 <C>
         VI                       Distribution  . . . . . . . . . . . . . . . . . . . . . . . . . . . .  4
                     6.01         Distribution of Account Balance . . . . . . . . . . . . . . . . . . .  4
                     6.02         Death Before Distribution of Account  . . . . . . . . . . . . . . . .  5
                     6.03         Form of Distribution  . . . . . . . . . . . . . . . . . . . . . . . .  5

        VII                       Hardship Distributions  . . . . . . . . . . . . . . . . . . . . . . .  5
                     7.01         Hardship  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5

       VIII                       Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5
                     8.01         Beneficiary Designation . . . . . . . . . . . . . . . . . . . . . . .  5
                     8.02         Proper Beneficiary  . . . . . . . . . . . . . . . . . . . . . . . . .  5
                     8.03         Minor or Incompetent Beneficiary  . . . . . . . . . . . . . . . . . .  5

         IX                       Administration of the Plan  . . . . . . . . . . . . . . . . . . . . .  6
                     9.01         Majority Vote . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6
                     9.02         Finality of Determination . . . . . . . . . . . . . . . . . . . . . .  6
                     9.03         Certificates and Reports  . . . . . . . . . . . . . . . . . . . . . .  6
                     9.04         Indemnification and Exculpation . . . . . . . . . . . . . . . . . . .  6
                     9.05         Expenses  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6

          X                       Claims Procedure  . . . . . . . . . . . . . . . . . . . . . . . . . .  6
                     10.01        Written Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6
                     10.02        Denied Claim  . . . . . . . . . . . . . . . . . . . . . . . . . . . .  7
                     10.03        Review Procedure  . . . . . . . . . . . . . . . . . . . . . . . . . .  7
                     10.04        Committee Review  . . . . . . . . . . . . . . . . . . . . . . . . . .  7

         XI                       Nature of Company's Obligation  . . . . . . . . . . . . . . . . . . .  7
                     11.01        Company's Obligation  . . . . . . . . . . . . . . . . . . . . . . . .  7
                     11.02        Creditor Status . . . . . . . . . . . . . . . . . . . . . . . . . . .  7

        XII                       Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . .  7
                     12.01        Written Notice  . . . . . . . . . . . . . . . . . . . . . . . . . . .  7
                     12.02        Change of Address . . . . . . . . . . . . . . . . . . . . . . . . . .  8
                     12.03        Merger, Consolidation or Acquisition  . . . . . . . . . . . . . . . .  8
                     12.04        Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . .  8
                     12.05        Amendment and Termination . . . . . . . . . . . . . . . . . . . . . .  8
                     12.06        Employment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8
                     12.07        Nontransferability  . . . . . . . . . . . . . . . . . . . . . . . . .  8
                     12.08        Legal Fees  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8
                     12.09        Tax Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . .  8
                     12.10        Acceleration of Payment . . . . . . . . . . . . . . . . . . . . . . .  8
                     12.11        Applicable Law  . . . . . . . . . . . . . . . . . . . . . . . . . . .  9
</TABLE>

<PAGE>   4

                                    ARTICLE I

                           PURPOSE AND EFFECTIVE DATE

1.01 Title This Plan shall be known as the K N Energy, Inc. Nonqualified
Deferred Compensation Plan (hereinafter referred to as the "Plan").

1.02 Purpose The purpose of the Plan is to permit certain members of management
and highly compensated employees to defer current salary and incentive
compensation.

1.03 Effective Date The Effective Date of this Plan shall be January 1, 1995.

                                   ARTICLE II

                DEFINITIONS AND CONSTRUCTION OF THE PLAN DOCUMENT

2.01 Beneficiary "Beneficiary" shall mean the person or persons or the estate of
a Participant entitled to receive any benefits under this Plan in the event of
the Participant's death prior to distribution of his account value.

2.02 Board "Board" shall mean the Board of Directors of K N Energy, Inc.

2.03 Bookkeeping Account A "Bookkeeping Account" will be established only as a
bookkeeping record for each Participant who elects to defer compensation under
this Plan and may, at the discretion of the Committee, include one (1) or more
subaccounts to reflect amounts credited to a Participant under the various terms
of this Plan.

2.04 Committee "Committee" means the Compensation Committee of the Company who
will manage and administer the Plan.

2.05  Company  "Company" shall mean K N Energy, Inc., a Delaware corporation.
2.06 Deferral Agreement "Deferral Agreement" means the written form which is
submitted to the Named Fiduciary before the relevant Election Date which
indicates whether the Executive wishes to defer a portion of his compensation
and indicates the portion of salary and/or incentive pay to be deferred. No
Deferral Agreement shall be effective until acknowledged, in writing, by the
Company.

2.07 Deferred Compensation "Deferred Compensation" means the portion of a
Participant's salary for any calendar year and the portion of a Participant's
incentive compensation for any calendar year that has been deferred pursuant to
the Plan.

2.08 Election Date The "Election Date" is the date established by this Plan as
the date before which an Executive must submit a valid Deferral Agreement to the
Committee. The applicable Election Dates are as follows: (a) thirty (30) days
after a newly eligible employee is notified of his right to participate in the
Plan; or (b) December 31 of any calendar year if (a) above does not apply.

<PAGE>   5

2.09 EXECUTIVE "Executive" shall mean any executive who participates in the K N
Energy, Inc. Executive Incentive Plan or any other member of management or any
highly compensated employee who has been recommended for participation in the
Plan by the Chief Executive Officer of the Company and approved by the
Committee.

2.10 NAMED FIDUCIARY "Named Fiduciary," for purposes of the claims procedure of
this Plan, shall mean the Chairman of the Committee.

2.11 PARTICIPANT "Participant" means an Executive who has deferred a portion of
salary or a portion of incentive compensation pursuant to the terms of this Plan
and whose account balance has not yet been distributed.

2.12 PLAN "Plan" means the K N Energy, Inc. Nonqualified Deferred Compensation
Plan as described in this instrument and as amended from time to time.

2.13  PLAN YEAR  The "Plan Year" is the same as the calendar year.

2.14 TERMINATION OF SERVICE "Termination of Service" or similar expression means
the termination of the Participant's employment as a regular employee of the
Company and any division, subsidiary or affiliate thereof.

2.15 VALUATION DATE "Valuation Date" shall mean the last day of each calendar
quarter. By appropriate action, the Committee may provide for Valuation Dates at
such other times as it deems necessary or expedient.

2.16 GENDER AND NUMBER Wherever the context so requires, masculine pronouns
include the feminine and singular words shall include the plural.

2.17 TITLES Titles of the Articles of this Plan are included for ease of
reference only and are not to be used for the purpose of construing any portion
or provision of this Plan document.

                                   ARTICLE III

                          ELIGIBILITY AND PARTICIPATION

3.01 ELIGIBILITY Any Executive who participates in the K N Energy, Inc.
Executive Incentive Plan shall be eligible to participate in this Plan.
Additional eligibility for participation in this Plan shall be determined on an
individual basis by recommendation from the Chief Executive Officer and approval
by the Committee, but no Executive shall be selected for participation in this
Plan unless he qualifies as a member of a select group of management or as a
highly compensated employee of the Company.

3.02 PARTICIPATION An Executive, after having been selected for participation by
the Committee, shall, as a condition to participation, annually complete and
return to the Committee a duly executed Deferral Agreement.

                                      -2-
<PAGE>   6

                                   ARTICLE IV

                            DEFERRAL OF COMPENSATION

4.01 SALARY DEFERRAL Each Participant in the Plan may elect to have either a
percentage or dollar amount of his salary deferred in accordance with the terms
and conditions of this Plan. Any election to defer salary must be for a minimum
of $5,000 but no more than 20% (twenty percent) of base salary.

4.02 INCENTIVE COMPENSATION DEFERRAL Each Participant in the Plan may elect to
have either a percentage or dollar amount of his incentive compensation earned,
if any, during the Plan Year deferred in accordance with the terms and
conditions of this Plan. Any election to defer incentive compensation must be
for a minimum of $5,000 but no more than 85% of the incentive compensation
earned for such Plan Year.

4.03 DEFERRAL AGREEMENT An eligible Executive electing to participate in the
Plan must submit his written Deferral Agreement to the Named Fiduciary on or
before the applicable Election Date. Valid Deferral Agreements filed by the
applicable Election Date as provided in Section 2.08(a) shall cause compensation
to be deferred in the Plan Year for which such Deferral Agreement is made.
Deferral Agreements entered into under the conditions of Section 2.08(b) shall
cause elected compensation to be deferred beginning January 1 of the next
calendar year and elected incentive compensation to be deferred as of the time
it otherwise would have been paid under the terms of the Incentive Plan.

4.04 NO DEFERRAL WITHOUT AGREEMENT A Participant who has not submitted a valid
Deferral Agreement to the Named Fiduciary before the relevant Election Date may
not defer any compensation under this Plan for the applicable Plan Year.

4.05 DURATION OF DEFERRAL AGREEMENT Deferral Agreements remain in effect for the
Plan Year for which they apply. A Participant must file a new Deferral Agreement
for any subsequent Plan Year. The terms of any Deferral Agreement may, but need
not be, similar to the terms of any prior Deferral Agreement.

                                    ARTICLE V

                         DEFERRAL ACCOUNT AND CREDITING

5.01 BOOKKEEPING ACCOUNT Salary and incentive compensation deferred by a
Participant under a written Deferral Agreement shall be credited in a dollar
amount to a separate Bookkeeping Account for each Participant. Salary deferred
under subsequent written election agreements by a Participant shall be added to
his Bookkeeping Account. The Company shall create as many subaccounts as it
deems necessary to administer the terms of this Plan.

5.02 ACCOUNT VALUATION The value of the Bookkeeping Account and any subaccounts
shall be based upon the performance of selected funds in which deferrals have
been directed at the election of the Participant. The funds into which the
Participant may elect that his deferrals will be credited will be based upon the
funds and investment options available to employees

                                      -3-
<PAGE>   7

participating in the K N Energy, Inc. 401(k) Retirement Savings Plan, as amended
from time to time. Notwithstanding, the Company reserves the right to amend and
to determine, in its sole discretion, the funds into which deferrals will be
credited. Deferred amounts will be credited into subaccount funds in multiples
of the total amounts deferred as elected by the Participants. All dividends and
earnings paid with respect to an elected fund will be deemed to have been
immediately reinvested in such fund.

5.03 TRANSFER AMONG FUNDS Amounts deferred into this Plan and credited to a fund
within the Participant's Bookkeeping Account or subaccounts may be transferred
between eligible funds pursuant to an election which may be made once per
calendar quarter. Such election shall be effective, and the transfer shall be
based on the value of the Participant's Bookkeeping Account or subaccount with
respect to that fund as of the Valuation Date immediately following the date the
election is received by the Company, provided, that the election is received no
later than the Valuation Date.

5.04 STATEMENT OF ACCOUNT The Company shall provide periodically to each
Participant (but not less frequently than once each calendar year) a statement
setting forth the balances and funds to the Participant's credit.

                                   ARTICLE VI

                                  DISTRIBUTION

6.01 DISTRIBUTION OF ACCOUNT BALANCE Distribution of the value of a
Participant's Bookkeeping Account balance shall be made according to the
election of the Participant set forth in the Deferral Agreement and the terms of
this Plan, as described in (a), (b) or (c) below.

          (a)  If the Participant remains employed until a specified deferral
               year, all amounts relating to that Plan Year's deferral will be
               paid in a lump sum, less applicable withholding taxes, in the
               January of the deferral year elected. Any deferral to a year
               certain must be at least five years following the year of
               deferral.

          (b)  In the event of Termination of Services for any reason before
               completion of the elected deferral period, payment shall be made
               in a lump sum, less applicable withholding taxes, as soon as
               practicable after the end of the quarter in which the Termination
               of Services occurred.

          (c)  In the event of Retirement, payment shall be made either (i) in a
               lump sum, less applicable withholding taxes, as soon as
               practicable after the quarter in which the retirement occurs, or
               (ii) in annual cash installments in the five (5) or ten (10)
               successive calendar years (as selected by the Participant)
               beginning as soon as practicable after Retirement. Each
               installment shall be made as of the first working day of the
               applicable year. The amount of each installment shall equal the
               Participant's Bookkeeping Account divided by the number of
               remaining installments (including the installment being
               determined).

                                      -4-
<PAGE>   8

6.02 DEATH BEFORE DISTRIBUTION OF ACCOUNT In the event of the Participant's
death prior to the complete distribution of his Bookkeeping Account, payment of
any remaining balance shall be made to the Participant's Beneficiary as soon as
practicable after notification of the Participant's death.

6.03 FORM OF DISTRIBUTION All distributions of a Participant's Bookkeeping
Account shall be made in cash only.

                                   ARTICLE VII

                             HARDSHIP DISTRIBUTIONS

7.01 HARDSHIP At the request of a Participant before or after the Participant's
retirement or Termination of Service, or at the request of any of the
Participant's Beneficiaries after the Participant's death, the Committee may, in
its sole discretion, accelerate and pay all or part of the value of a
Participant's Bookkeeping Account due under this Plan. Accelerated distributions
at the request of the Participant or the Participant's Beneficiaries may be
allowed only due to an immediate and heavy financial need of the Participant (or
Beneficiary). An accelerated distribution must be limited to only that amount
necessary to relieve the financial need.

                                  ARTICLE VIII

                                   BENEFICIARY

8.01 BENEFICIARY DESIGNATION A Participant shall designate his Beneficiary to
receive benefits under the Plan by completing the Beneficiary Designation
accompanying the Deferral Agreement. If more than one (1) Beneficiary is named,
the shares and/or percentage of each Beneficiary is named, the shares and/or
percentage of each Beneficiary shall be indicated. A Participant shall have the
right to change the Beneficiary by submitting to the Committee a Change of
Beneficiary Form. However, no change of Beneficiary shall be effective until
acknowledged, in writing, by the Committee.

8.02 PROPER BENEFICIARY If the Company has any doubt as to the proper
Beneficiary to receive payments hereunder, the Company shall have the right to
withhold such payments until the matter is finally adjudicated. However, any
payment made by the Company, in good faith and in accordance with this Plan,
shall fully discharge the Company from all further obligations with respect to
that payment.

8.03 MINOR OR INCOMPETENT BENEFICIARY In making any payments to or for the
benefit of any minor or an incompetent Beneficiary, the Committee, in its sole
and absolute discretion, may make a distribution to a legal or natural guardian
or other relative of a minor or court appointed committee of such incompetent.
Or, it may make a payment to any adult with whom the minor or incompetent
temporarily or permanently resides. The receipt by a guardian, committee,
relative or other person shall be a complete discharge to the Company. Neither
the Committee nor the Company shall have any responsibility to see to the proper
application of any payments so made.

                                      -5-
<PAGE>   9

                                   ARTICLE IX

                           ADMINISTRATION OF THE PLAN

9.01 MAJORITY VOTE All resolutions or other actions taken by the Committee shall
be by vote of a majority of those present at a meeting at which a majority of
the members are present, or in writing by all the members, at the time in
office, if they act without a meeting.

9.02 FINALITY OF DETERMINATION Subject to the Plan, the Committee shall, from
time to time, establish rules, forms and procedures for the administration of
the Plan. Except as herein otherwise expressly provided, the Committee shall
have the sole and absolute discretion to (a) construe and interpret the Plan,
(b) decide all questions of eligibility to participate in the Plan, and (c)
determine the amount, manner and time of payment of any benefits to any
Participant or Beneficiary. The decisions, actions and records of the Committee
shall be conclusive and binding upon the Company and all persons having or
claiming to have any right or interest in or under the Plan.

9.03 CERTIFICATES AND REPORTS The members of the Committee and the officers and
directors of the Company shall be entitled to rely on all certificates and
reports made by any duly appointed accountants, and on all opinions given by any
duly appointed legal counsel, which legal counsel may be counsel for the
Company.

9.04 INDEMNIFICATION AND EXCULPATION The Company shall indemnify and hold
harmless each member of the Committee against any and all expenses and
liabilities arising out of his membership on the Committee. Expenses against
which a member of the Committee shall be indemnified hereunder shall include,
without limitation, the amount of any settlement or judgment, costs, counsel
fees, and related charges reasonably incurred in connection with a claim
asserted, or a proceeding brought or settlement thereof. The foregoing rights of
indemnification shall be in addition to any other rights to which the any such
member of the committee may be entitled as a matter of law.

9.05 EXPENSES The expenses of administering the Plan shall be borne by the
Company.

                                    ARTICLE X

                                CLAIMS PROCEDURE

10.01 WRITTEN CLAIM Benefits shall be paid in accordance with the provisions of
this Plan. The Participant, or a designated recipient or any other person
claiming through the Participant, shall make a written request for benefits
under this Plan. This written claim shall be mailed or delivered to the Named
Fiduciary. Such claim shall be reviewed by the Named Fiduciary or his delegate.

                                      -6-
<PAGE>   10

10.02 DENIED CLAIM If the claim is denied, in full or in part, the Named
Fiduciary shall provide a written notice within ninety (90) days setting forth
the specific reasons for denial and any additional material or information
necessary to perfect the claim and an explanation of why such material or
information is necessary and appropriate information and explanation of the
steps to be taken if a review of the denial is desired.

10.03 REVIEW PROCEDURE If the claim is denied and a review is desired, the
Participant (or Beneficiary) shall notify the Named Fiduciary, in writing,
within sixty (60) days (a claim shall be deemed denied if the Named Fiduciary
does not take any action within the aforesaid ninety (90) day period) after
receipt of the written notice of denial. In requesting a review, the Participant
or his Beneficiary may request a review of the Plan document or other pertinent
documents with regard to the employee benefit plan created under this agreement,
may submit any written issues and comments, may request an extension of time for
such written submission of issues and comments and may request that a hearing be
held, but the decision to hold a hearing shall be within the sole discretion of
the Committee.

10.04 COMMITTEE REVIEW The decision on the review of the denied claim shall be
rendered by the Committee within sixty (60) days after the receipt of the
request for review (if no hearing is held) or within sixty (60) days after the
hearing if one is held. The decision shall be written and shall state the
specific reasons for the decision including reference to the specific provisions
of this Plan on which the decision is based.

                                   ARTICLE XI

                         NATURE OF COMPANY'S OBLIGATION

11.01 COMPANY'S OBLIGATION The Company's obligations under this Plan shall be an
unfunded and unsecured promise to pay. The Company shall not be obligated under
any circumstances to fund its financial obligations under this Plan. However,
the Company may choose to establish an irrevocable trust to settle its
obligations under this Plan. The assets of such trust, if any, shall be subject
to the claims of the Company's creditors as set forth in Section 11.02 below.

11.02 CREDITOR STATUS Any assets which the Company may acquire or set aside to
help cover its financial liabilities are, and must, remain general assets of the
Company subject to the claims of its creditors. Neither the Company nor this
Plan gives the Participant any beneficial ownership interest in any asset of the
Company. All rights of ownership in any such assets are, and remain, in the
Company.

                                   ARTICLE XII

                                  MISCELLANEOUS

12.01 WRITTEN NOTICE Any notice which shall or may be given under this Plan or a
Deferral Agreement shall be in writing and shall be mailed by United States
mail, postage prepaid. If notice is to be given to the Company, such notice
shall be addressed to the

                                      -7-
<PAGE>   11

Company at 12055 West Second Place, Lakewood, Colorado 80228-9304 or, if notice
is to an Executive, addressed to the address shown on such Executive's Deferral
Agreement.

12.02 CHANGE OF ADDRESS Any party may, from time to time, change the address to
which notices shall be mailed by giving written notice of such new address.

12.03 MERGER, CONSOLIDATION OR ACQUISITION The Plan shall be binding upon the
Company, its assigns, and any successor company which shall succeed to
substantially all of its assets and business through merger, acquisition or
consolidation, and upon an Executive, his Beneficiary, assigns, heirs, executors
and administrators.

12.04 CHANGE IN CONTROL In the event of a "change in control" of the Company, as
defined in the K N Energy, Inc. Long- Term Executive Incentive Plan, all amounts
credited to the Participant's Bookkeeping Account, as of the effective date of
the change in control, will be distributed in a lump sum within 30 days of such
change in control, less applicable withholding taxes.

12.05 AMENDMENT AND TERMINATION The Company retains the sole and unilateral
right to terminate, amend, modify or supplement this Plan, in whole or in part,
at any time. This right includes the right to make retroactive amendments.
However, no Company action under this right shall reduce the Bookkeeping Account
of any Participant or his Beneficiary as of the date of amendment or
termination.

12.06 EMPLOYMENT This Plan does not provide a contract of employment between the
Company and the Participant, and the Company reserves the right to terminate the
Participant's employment, for any reason, at any time, notwithstanding the
existence of this Plan.

12.07 NONTRANSFERABILITY Except insofar as prohibited by applicable law, no
sale, transfer, alienation, assignment, pledge, collateralization or attachment
of any benefits under this Plan shall be valid or recognized by the Company.
Neither the Participant, his spouse, or designated Beneficiary, shall have any
power to hypothecate, mortgage, commute, modify or otherwise encumber in advance
of any of the benefits payable hereunder, nor shall any of said benefits be
subject to seizure for the payment of any debts, judgments, alimony maintenance,
owed by the Participant or his Beneficiary, or be transferable by operation of
law in the event of bankruptcy, insolvency or otherwise.

12.08 LEGAL FEES All reasonable legal fees incurred by any Participant (or
former Participant) to successfully enforce his valid rights under this Plan
shall be paid by the Company in addition to sums due under this Plan.

12.09 TAX WITHHOLDING The Company may withhold from a payment any federal, state
or local taxes required by law to be withheld with respect to such payment and
such sum as the Company may reasonably estimate as necessary to cover any taxes
for which the Company may be liable and which may be assessed with regard to
such payment. The Company may either withhold from current salary and/or
incentive compensation that has not been deferred or make other necessary
arrangements with a Participant with respect to any FICA and Medicare taxes
required.

12.10 ACCELERATION OF PAYMENT The Company reserves the right to accelerate the
payment of any benefits payable under this Plan at any time without the consent
of the Participant, his estate, his Beneficiary or any other person claiming
through the Participant.

                                      -8-
<PAGE>   12

12.11 APPLICABLE LAW This Plan shall be governed by the laws of the state of
Colorado.

IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its
duly authorized officer on this _____ day of __________________, 1994.

                                       K N ENERGY, INC.

                                       By
                                         --------------------------------------
                                                 Chief Executive Officer

ATTEST:

By:
  -----------------------

[SEAL]

                                      -9-

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