<PAGE>
PROSPECTUS SUPPLEMENT FILED PURSUANT TO RULE 424(b)(2)
(To Prospectus dated November 30, 1993) REGISTRATION NO. 33-51115
$75,000,000
K N ENERGY, INC.
8.75% DEBENTURES DUE OCTOBER 15, 2024
----------------
Interest is payable semiannually on April 15 and October 15 of each year,
commencing April 15, 1995. The Debentures are not redeemable prior to October
15, 2004, and are redeemable at any time thereafter upon prior notice and at
prices set forth herein at the option of K N Energy, Inc. ("K N" or the
"Company").
The Debentures will be issued and represented by one certificate and will be
registered in the name of the nominee of The Depository Trust Company or any
successor depository (the "Depository") and such nominee will be the sole
holder of the Debentures. An owner of an interest in the Debentures
("Beneficial Owner") will not be entitled to the delivery of a definitive
security except in limited circumstances. A Beneficial Owner's interest in the
Debentures will be recorded on the records of the Depository's participants, in
integral multiples of $1,000, and shall entitle the Beneficial Owner to certain
rights which may be exercised only through the Depository and the Depository's
book-entry system. See "Description of Debentures--Book-Entry Only System"
herein.
The Debentures are an issue of the Company's Securities described in the
accompanying Prospectus (the "Prospectus") to which this Prospectus Supplement
relates.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) THE COMPANY(1)(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Debenture....................... 99.25% .875% 98.375%
- --------------------------------------------------------------------------------
Total............................... $74,437,500 $656,250 $73,781,250
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from October 18, 1994.
(2) The Company has agreed to indemnify the Underwriter against certain
liabilities, including civil liabilities under the Securities Act of 1933.
See "Underwriting."
(3) Before deduction of expenses payable by the Company estimated at $100,000.
----------------
The Debentures are offered by the several Underwriters, subject to prior
sale, when, as and if issued to and accepted by the Underwriters, subject to
approval of certain legal matters by counsel for the Underwriters. The
Underwriters reserve the right to reject orders in whole or in part. It is
expected that delivery of the Debentures will be made through the book-entry
facilities of the Depository on or about October 18, 1994.
----------------
MERRILL LYNCH & CO. SALOMON BROTHERS INC
----------------
The date of this Prospectus Supplement is October 11, 1994.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE DEBENTURES
OFFERED HEREBY AND/OR OTHER DEBENTURES OF THE COMPANY AT LEVELS ABOVE THOSE
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE
EFFECTED IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
----------------
INCORPORATION OF ADDITIONAL DOCUMENTS BY REFERENCE
In addition to the documents referred to in the Prospectus under
"Incorporation of Certain Documents by Reference," the Company incorporates
herein by reference the following documents filed by it with the Securities and
Exchange Commission (File No. 1-6446) pursuant to the Securities Exchange Act
of 1934: (i) Annual Report on Form 10-K for the fiscal year ended December 31,
1993, as amended by Forms 10-K/A dated June 9, 1994 and October 7, 1994; (ii)
Quarterly Reports on Form 10-Q for the quarter ended March 31, 1994, as amended
by Form 10-Q/A dated June 9, 1994, and for the quarter ended June 30, 1994; and
(iii) Current Reports on Form 8-K dated February 3, March 25, July 13, July 28
and October 7, 1994. All but the first of such Current Reports on Form 8-K
relate to K N's acquisition of American Oil and Gas Corporation, a Delaware
corporation ("AOG"), by a merger effected on July 13, 1994 and accounted for as
a pooling of interests.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the
Debentures are estimated at $73.7 million after deduction of the underwriting
discount and expenses payable by the Company. Such net proceeds will be used to
reduce outstanding short-term indebtedness incurred (i) to retire on July 13,
1994, AOG's indebtedness in the principal amount of $57.0 million under its
revolving credit bank loan facility and (ii) to fund capital expenditures. As
of September 30, 1994, the Company had $129.6 million of short-term
indebtedness outstanding, with an approximate weighted average annual interest
rate of 5.03%.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's consolidated ratios of earnings
to fixed charges for the periods shown, as restated to reflect K N's
acquisition of AOG as if it had occurred at the beginning of such periods.
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEARS ENDED DECEMBER 31,
JUNE 30, ------------------------
1994 1993 1992 1991 1990 1989
---------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
2.38 2.41 2.61 2.70 2.09 1.37
</TABLE>
The ratios of earnings to fixed charges were computed by dividing earnings by
fixed charges. For this purpose, earnings consist of net income (from
continuing operations), income taxes and fixed charges of the Company and its
subsidiaries. Fixed charges consist of the Company's and its subsidiaries'
interest expense (including interest costs capitalized), amortization of debt
discount and expense, preferred stock dividend requirements of AOG and the
portion of rent expense representative of an interest factor. The allowance for
borrowed funds used during construction recognized for gas utility operations
has been added to fixed charges and is included in earnings.
S-2
<PAGE>
RECENT DEVELOPMENTS
On July 13, 1994, K N acquired AOG by merging a newly-formed, wholly-owned
subsidiary of K N into AOG. AOG survived the merger as a wholly-owned
subsidiary of K N. In the merger K N issued approximately 12.2 million shares
of its common stock in conversion of all outstanding shares of AOG common
stock.
AOG is a holding company that is engaged, through its subsidiaries, in the
business of gathering, processing, transporting, storing and marketing natural
gas and natural gas liquids. AOG owns the principal intrastate pipeline system
(Westar Transmission) in West Texas and the Texas Panhandle. AOG also owns gas
processing plants and gathering lines that are complementary to its Westar
pipeline system. In addition, AOG owns a natural gas storage facility, WesTex
Storage, in West Texas and a 75% interest in Red River Pipeline, located in
West Texas and the Texas Panhandle. AOG also owns interests in gathering and
transmission systems in South Texas and East Texas.
For additional information with respect to K N's acquisition of AOG, see K
N's Current Reports on Form 8-K dated July 13 and 28 and October 7, 1994, which
are incorporated by reference herein.
DESCRIPTION OF DEBENTURES
The following description of the particular terms of the Debentures (referred
to in the Prospectus as the "Offered Securities") supplements, and to the
extent inconsistent therewith replaces, the description of the general terms
and provisions of the Securities set forth in the Prospectus, to which
description reference is hereby made. Capitalized terms defined in the
Prospectus have the same meanings when used herein.
GENERAL
The maximum aggregate principal amount of Debentures which may be issued is
limited to $75,000,000. The Debentures will mature October 15, 2024. Interest
at the annual rate set forth on the cover page of this Prospectus Supplement is
to accrue from October 18, 1994, and is to be payable semiannually on April 15
and October 15, commencing April 15, 1995, to the Persons in whose names the
Debentures are registered at the close of business on the preceding April 1 or
October 1, respectively. All payments on the Debentures will be made in U.S.
dollars.
BOOK-ENTRY ONLY SYSTEM
The Debentures will be issuable only as Registered Securities and will be
represented by one certificate (the "Global Security") to be registered in the
name of the nominee of The Depository Trust Company ("DTC") or any successor
depository (the "Depository"). The Depository will maintain the Debentures in
denominations of $1,000 and integral multiples thereof through its book-entry
facilities. See "Description of Securities--Global Securities" in the
accompanying Prospectus for additional information concerning the Global
Security. In accordance with its normal procedures, the Depository will record
the interests of each Depository participating firm ("Participant") in the
Debentures, whether held for its own account or as a nominee for another
Person.
So long as the nominee of the Depository is the registered owner of the
Debentures, such nominee will be considered the sole owner or holder of the
Debentures for all purposes under the Indenture and any applicable laws. Except
as otherwise provided below, a Beneficial Owner, as hereinafter defined, of
interests in the Debentures will not be entitled to receive a physical
certificate representing such ownership interest and will not be considered an
owner or holder of the Debentures under the Indenture. A Beneficial Owner is
the Person who has the right to sell, transfer or otherwise dispose of an
interest in the Debentures and the right to receive the proceeds therefrom, as
well as interest, principal and premium (if any) payable in respect
S-3
<PAGE>
thereof. A Beneficial Owner's interest in the Debentures will be recorded, in
integral multiples of $1,000, on the records of the Participant that maintains
such Beneficial Owner's account for such purpose. In turn, the Participant's
interest in such Debentures will be recorded, in integral multiples of $1,000,
on the records of the Depository. Therefore, the Beneficial Owner must rely on
the foregoing arrangements to evidence its interest in the Debentures.
Beneficial ownership of the Debentures may be transferred only by compliance
with the procedures of a Beneficial Owner's Participant (e.g., brokerage firm)
and the Depository. The laws of some jurisdictions require that certain
purchasers of securities take physical delivery of such securities in
definitive form. Such laws may impair the foregoing ability to transfer
beneficial interests in the Global Security.
All rights of ownership must be exercised through the Depository and the
book-entry system and notices that are to be given to registered owners by the
Company or the Trustee will be given only to the Depository. It is expected
that the Depository will forward the notices to the Participants by its usual
procedures, so that such Participant may forward such notices to the Beneficial
Owners. Neither the Company nor the Trustee will have any responsibility or
obligation to assure that any notices are forwarded by the Depository to any
Participant or by any Participant to the Beneficial Owners.
DTC has advised the Company and the Underwriters as follows: DTC is a
limited-purpose trust company organized under the Banking Law of the State of
New York, a member of the Federal Reserve System, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC was created to hold securities of Participants and to
facilitate the clearance and settlement of securities transactions among
Participants in such securities transactions through electronic book-entry
changes in accounts of Participants, thereby eliminating the need for physical
movement of securities certificates. Participants include securities brokers
and dealers (including the Underwriters), banks, trust companies, clearing
corporations and certain other organizations, some of whom (and/or their
representatives) own DTC. Access to DTC's book-entry system is also available
to others, such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a Participant, either
directly or indirectly. Persons who are not Participants may beneficially own
securities held by DTC only through Participants.
REDEMPTION PROVISIONS
The Debentures will not be redeemable prior to October 15, 2004, and will be
redeemable at any time thereafter at the option of the Company on at least 30
and not more than 45 days' notice, as a whole or in part, at the following
redemption prices (expressed in percentages of principal amount), if redeemed
during the 12-month period beginning October 15,
<TABLE>
<CAPTION>
YEAR PERCENTAGE YEAR PERCENTAGE
- ---- ---------- ---- ----------
<S> <C> <S> <C>
2004.................... 104.000% 2009.................... 102.000%
2005.................... 103.600% 2010.................... 101.600%
2006.................... 103.200% 2011.................... 101.200%
2007.................... 102.800% 2012.................... 100.800%
2008.................... 102.400% 2013.................... 100.400%
</TABLE>
and thereafter at 100% of the principal amount thereof, in each case, together
with accrued interest to the date fixed for redemption.
The Debentures have no sinking fund provision.
S-4
<PAGE>
DEFEASANCE
The Debentures will be subject to defeasance and discharge and to covenant
defeasance as provided under "Description of Securities--Defeasance" in the
Prospectus.
TRUSTEE
Bank of America Illinois has succeeded to the corporate trust business of
Continental Bank, National Association and is, therefore, the successor Trustee
under the Indenture.
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement (the
"Purchase Agreement") between the Company and Merrill Lynch, Pierce, Fenner &
Smith Incorporated and Salomon Brothers Inc (the "Underwriters"), the Company
has agreed to sell to the Underwriters, and the Underwriters have severally
agreed to purchase, the respective principal amounts of the Debentures set
forth after their names below.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
OF
UNDERWRITER DEBENTURES
----------- -----------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated....................................... $37,500,000
Salomon Brothers Inc........................................ 37,500,000
-----------
Total.................................................. $75,000,000
===========
</TABLE>
In the Purchase Agreement, the Underwriters have severally agreed, subject to
the terms and conditions set forth therein, to purchase all the Debentures
offered hereby if any Debentures are purchased. The Company has been advised by
the Underwriters that the Underwriters propose initially to offer the
Debentures to the public at the public offering price set forth on the cover
page of this Prospectus Supplement, and to certain dealers at such price less a
concession not in excess of .5% of the principal amount. The Underwriters may
allow, and such dealers may reallow, a discount not in excess of .25% of the
principal amount to certain other dealers. After the initial public offering,
the public offering price, concession and discount may be changed.
The Debentures will not be listed on any securities exchange, and there can
be no assurance that there will be a secondary market for the Debentures. From
time to time the Underwriters may make a market in the Debentures. However, at
this time no determination has been made as to whether or not the Underwriters
will make a market in the Debentures.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act of 1933, or
to contribute to payments the Underwriters may be required to make in respect
of such liabilities.
VALIDITY OF SECURITIES
The validity of the Debentures will be passed upon for the Company by Vinson
& Elkins L.L.P., Houston, Texas, who may rely upon the opinion of the law
offices of Glaves, Irby and Rhoads, Wichita, Kansas, as to matters of Kansas
law, and will be passed upon for the Underwriters by Shearman & Sterling, New
York, New York.
S-5
<PAGE>
EXPERTS
The consolidated financial statements and schedules, included in K N's 1993
Annual Report on Form 10-K, as amended, which is incorporated by reference
herein, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are
incorporated herein in reliance upon the authority of said firm as experts in
giving said report. Reference is made to such report, which calls attention to
certain changes in accounting principles during the periods reported thereon.
S-6
<PAGE>
PROSPECTUS
K N ENERGY, INC.
$200,000,000
DEBT SECURITIES
----------------
K N Energy, Inc. ("K N" or the "Company") may offer from time to time its
unsecured debt securities consisting of notes, debentures or other evidences of
indebtedness (the "Securities") at an aggregate initial offering price of not
more than $200,000,000 or, if applicable, the equivalent thereof in any other
currency or currency unit. The Securities may be offered as separate series in
amounts, at prices and on terms to be determined in light of market conditions
at the time of sale and set forth in a Prospectus Supplement.
The terms of each series of Securities, including, where applicable, the
specific designation, aggregate principal amount, authorized denominations,
maturity, interest rate or rates (or method of determining the same) and time
or times of payment of any interest, any terms for optional or mandatory
redemption, which may include redemption at the option of holders upon the
occurrence of certain events, or payment of additional amounts or any sinking
fund provisions, any initial public offering price, the proceeds to the Company
and any other specific terms in connection with the offering and sale of such
series (the "Offered Securities") will be set forth in a Prospectus Supplement.
As used herein, Securities shall include securities denominated in United
States dollars or, at the option of the Company if so specified in an
applicable Prospectus Supplement, in any other currency or currency unit, or in
amounts determined by reference to an index.
The Securities may be sold directly by the Company to investors, through
agents designated from time to time or to or through underwriters or dealers.
See "Plan of Distribution". If any agents of the Company or any underwriters
are involved in the sale of any Securities in respect of which this Prospectus
is being delivered, the names of such agents or underwriters and any applicable
commissions or discounts will be set forth in a Prospectus Supplement. The net
proceeds to the Company from such sale also will be set forth in a Prospectus
Supplement.
The Securities may be issued in registered form or bearer form with or
without interest coupons attached, or both. In addition, all or a portion of
the Securities of a series may be issuable in temporary or permanent global
form. Securities in bearer form are offered only to non-United States persons
and to offices located outside the United States of certain United States
financial institutions.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURI-
TIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------------
This Prospectus may not be used to consummate sales of the Securities unless
accompanied by a Prospectus Supplement.
THE DATE OF THIS PROSPECTUS IS NOVEMBER 30, 1993.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 ("Exchange Act") and, in accordance therewith, files
reports and other information with the Securities and Exchange Commission
("Commission"). Such reports and other information can be inspected and copied
at the public reference facilities maintained by the Commission at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549; and at the following Regional
Offices of the Commission: Chicago Regional Office, Suite 1400, Citicorp
Center, 500 West Madison Street, Chicago, Illinois 60621; and New York Regional
Office, 13th Floor, Seven World Trade Center, New York, New York 10048. Copies
of such material may be obtained by mail from the Public Reference Branch of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Certain securities of the Company are listed on the New York Stock
Exchange. Reports and other information concerning the Company can be inspected
and copied at the office of such exchange at 20 Broad Street, New York, New
York 10005.
The Company has filed with the Commission a Registration Statement under the
Securities Act of 1933 (the "Securities Act") with respect to the Securities
offered hereby. This Prospectus does not contain all of the information set
forth in such Registration Statement. Reference is made to such Registration
Statement and to the exhibits thereto for further information with respect to
the Company and the Securities offered hereby. Statements contained herein
concerning the provisions of documents are necessarily summaries of such
documents, and each statement is qualified in its entirety by reference to the
copy of the applicable document filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company incorporates herein by reference the following documents filed by
it with the Commission (File No. 1-6446) pursuant to the Exchange Act: Annual
Report on Form 10-K for the fiscal year ended December 31, 1992; Quarterly
Reports on Form 10-Q for the quarters ended March 31, June 30 and September 30,
1993; and Current Reports on Form 8-K dated February 5, April 5 and September
8, 1993.
Each document filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act prior to the termination of the offering of the
Securities shall be deemed to be incorporated herein by reference and to be a
part hereof from the date of filing of such document. Any statement contained
herein or in a document all or a portion of which is incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein or in the Prospectus
Supplement modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, on the written or oral request of any such person, a copy of any and
all of the documents referred to above which have been or may be incorporated
in this Prospectus by reference, other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into such documents.
Requests for such copies should be directed to the office of the Treasurer, K N
Energy, Inc., P.O. Box 281304, Lakewood, Colorado 80228-8304, telephone number
(303) 989-1740.
2
<PAGE>
THE COMPANY
The Company and its subsidiaries constitute principally an integrated natural
gas enterprise with operations in the states of Colorado, Kansas, Montana,
Nebraska, Oklahoma, Texas and Wyoming. As an integrated organization, the
Company and its subsidiaries participate in all phases of the natural gas
business from reserve development and gas gathering to the gathering of field
supplies, transmission to markets and distribution to both industrial and
retail customers. In addition, certain of the Company's subsidiaries engage in
gas marketing and in the development and production of oil and gas for their
own account.
K N was incorporated under the laws of the State of Kansas in 1927. The
address of the Company's principal executive offices is 370 Van Gordon Street,
P.O. Box 281304, Lakewood, Colorado 80228-8304, and its telephone number is
(303) 989-1740.
USE OF PROCEEDS
Except as may otherwise be described in the Prospectus Supplement relating to
an offering of Securities, the net proceeds from the sale of the Securities
will be used for general corporate purposes. Any specific allocation of the net
proceeds of an offering of Securities to a specific purpose will be determined
at the time of such offering and will be described in the related Prospectus
Supplement.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's consolidated ratios of earnings
to fixed charges for the periods shown.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEARS ENDED DECEMBER 31,
SEPTEMBER 30, ------------------------------------------------------------
1993 1992 1991 1990 1989 1988
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
2.16 2.52 2.97 2.70 2.49 2.32
</TABLE>
The ratios of earnings to fixed charges were computed by dividing earnings by
fixed charges. For this purpose, earnings are the sum of net income (from
continuing operations), taxes and fixed charges. Fixed charges are interest,
amortization of debt discount and expense, and the estimated interest portion
of rental charges. The allowance for borrowed funds used during construction
recognized for gas utility operations has been added to fixed charges and is
included in earnings. A statement setting forth the computation of the ratios
of earnings to fixed charges is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part.
DESCRIPTION OF SECURITIES
The Securities will be issued under an indenture to be dated as of November
20, 1993 (the "Indenture") between the Company and Continental Bank, National
Association, as Trustee (the "Trustee"), a form of which Indenture is filed as
an exhibit to the Registration Statement of which this Prospectus is a part.
The statements under this caption are brief summaries of certain provisions of
the Indenture, do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all of the provisions of the
Indenture, including the definitions therein of certain terms. Wherever
particular Sections of the Indenture or terms not defined herein that are
defined in the Indenture are referred to herein or in a Prospectus Supplement,
it is intended that such Sections or defined terms shall be incorporated by
reference herein or therein, as the case may be.
3
<PAGE>
The Securities may be issued from time to time in one or more series. The
particular terms of each series of Securities offered by any Prospectus
Supplement or Prospectus Supplements will be described in such Prospectus
Supplement or Prospectus Supplements relating to such series.
GENERAL
The Indenture does not limit the amount of Securities, debentures, notes or
other evidences of indebtedness that may be issued by the Company or any of its
subsidiaries nor does it restrict transactions between the Company and its
affiliates or dividends and other distributions by the Company to its
stockholders. The rights of the Company's creditors, including holders of the
Securities, will be limited to the assets of the Company and will not be an
obligation of any of its subsidiaries. In addition, other than as set forth
under "Limitation on Liens", there are no provisions of the Indenture which
afford holders of the Securities protection in the event of either a change in
control of the Company or a highly leveraged transaction involving the Company.
Securities may be issued under the Indenture from time to time in separate
series up to the aggregate amount from time to time authorized by the Company
for such series. The Securities will be unsecured obligations of the Company
and will rank on a parity with all other unsecured and unsubordinated
indebtedness of the Company, unless the Company is required to secure the
Securities pursuant to the Indenture provisions described below under
"Limitations on Liens."
The applicable Prospectus Supplement or Prospectus Supplements will describe
the following terms of the Offered Securities: (1) the title of the Offered
Securities; (2) any limit on the aggregate principal amount of the Offered
Securities; (3) whether the Offered Securities are to be issuable as Registered
Securities or Bearer Securities or both, whether any of the Offered Securities
are to be issuable initially in temporary global form and whether any of the
Offered Securities are to be in permanent global form; (4) the price or prices
(expressed as a percentage of the aggregate principal amount thereof) at which
the Offered Securities will be issued; (5) the date or dates on which the
Offered Securities will mature; (6) the rate or rates per annum (or the method
by which such will be determined) at which the Offered Securities will bear
interest, if any, and the date from which any such interest will accrue; (7)
the Interest Payment Dates on which any such interest on the Offered Securities
will be payable, the Regular Record Date for any interest payable on any
Offered Securities which are Registered Securities on any Interest Payment Date
and the extent to which, or the manner in which, any interest payable on a
temporary global Offered Security on an Interest Payment Date will be paid; (8)
any mandatory or optional sinking fund or analogous provisions; (9) each office
or agency where, subject to the terms of the Indenture as described below under
"Payment and Paying Agents", the principal of and any premium and interest on
the Offered Securities will be payable and each office or agency where, subject
to the terms of the Indenture as described below under "Form, Exchange,
Registration and Transfer", the Offered Securities may be presented for
registration of transfer or exchange; (10) the right of the Company to redeem
the Offered Securities at its option and the period or periods, if any, within
which and the price or prices at which the Offered Securities may, pursuant to
any optional or mandatory redemption provisions, be redeemed, in whole or in
part, and the other detailed terms and provisions of any such optional or
mandatory redemption; (11) the denominations in which any Offered Securities
which are Registered Securities will be issuable, if other than denominations
of $1,000 and any integral multiple thereof, and the denomination or
denominations in which any Offered Securities which are Bearer Securities will
be issuable, if other than the denomination of $5,000; (12) the currency or
currencies (including composite currencies) in which payment of principal of
and any premium and interest on the Offered Securities is payable; (13) any
index used to determine the amount of payments of principal of and any premium
and interest on the Offered Securities; (14) information with respect to book-
entry procedures, if any; and (15) any other terms of the Offered Securities
not inconsistent with the provisions of the Indenture. (Section 301) Any such
Prospectus Supplement will also describe any special provisions for the payment
of additional amounts with respect to the Offered Securities.
4
<PAGE>
Securities may be issued as Original Issue Discount Securities. An Original
Issue Discount Security is a Security, including any Zero-Coupon Security,
which is issued at a price lower than the amount payable upon the Stated
Maturity thereof and which provides that upon redemption or acceleration of the
maturity thereof an amount less than the amount payable upon the Stated
Maturity thereof and determined in accordance with the terms of such Security
shall become due and payable. Special United States federal income tax
considerations applicable to Securities issued at an original issue discount,
including Original Issue Discount Securities, and special United States tax
considerations and other terms and restrictions applicable to any Securities
which are issued in bearer form, offered exclusively to United States Aliens or
denominated in other than United States dollars will be set forth in a
Prospectus Supplement relating thereto.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Securities of a series may be issuable in definitive form solely as
Registered Securities, solely as Bearer Securities or as both Registered
Securities and Bearer Securities. Unless otherwise indicated in an applicable
Prospectus Supplement, Bearer Securities will have interest coupons attached.
(Section 201) The Indenture also will provide that Securities of a series may
be issuable in temporary or permanent global form. (Section 201)
Registered Securities of any series will be exchangeable for other Registered
Securities of the same series of any authorized denominations and of a like
aggregate principal amount and tenor. In addition, if Securities of any series
are issuable as both Registered Securities and Bearer Securities, at the option
of the Holder, and subject to the terms of the Indenture, Bearer Securities
(with all unmatured coupons, except as provided below, and all matured coupons
in default) of such series will be exchangeable for Registered Securities of
the same series of any authorized denominations and of a like aggregate
principal amount and tenor. Bearer Securities surrendered in exchange for
Registered Securities between a Regular Record Date or a Special Record Date
and the relevant date for payment of interest shall be surrendered without the
coupon relating to such date for payment of interest and interest accrued as of
such date will not be payable in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the terms of the Indenture. Bearer
Securities will not be issued in exchange for Registered Securities. (Section
305)
Securities may be presented for exchange as provided above, and Registered
Securities may be presented for registration of transfer (with the form of
transfer endorsed thereon duly executed), at the office of the Security
Registrar or at the office of any transfer agent designated by the Company for
such purpose with respect to any series of Securities and referred to in an
applicable Prospectus Supplement, without service charge and upon payment of
any taxes and other governmental charges as described in the Indenture. Such
transfer or exchange will be effected upon the Security Registrar or such
transfer agent, as the case may be, being satisfied with the documents of title
and identity of the person making the request. The Company will serve initially
as Security Registrar. (Section 305) If a Prospectus Supplement refers to any
transfer agents (in addition to the Security Registrar) initially designated by
the Company with respect to any series of Securities, the Company may at any
time rescind the designation of any such transfer agent or approve a change in
the location through which any such transfer agent acts, except that, if
Securities of a series are issuable solely as Registered Securities, the
Company will be required to maintain a transfer agent in each Place of Payment
for such series and, if Securities of a series are also issuable as Bearer
Securities, the Company will be required to maintain (in addition to the
Security Registrar) a transfer agent in a Place of Payment for such series
located outside the United States. The Company may at any time designate
additional transfer agents with respect to any series of Securities. (Section
1002)
In the event of any redemption in part, the Company shall not be required to
(i) issue, register the transfer of or exchange Securities of any series during
a period beginning at the opening of business 15 days prior to the selection of
Securities of that series for redemption and ending on the close of business on
(A) if Securities of the series are issuable only as Registered Securities, the
day of mailing of the relevant notice of
5
<PAGE>
redemption and (B) if Securities of the series are issuable as Bearer
Securities, the day of the first publication of the relevant notice of
redemption or, if Securities of the series are also issuable as Registered
Securities and there is no publication, the mailing of the relevant notice of
redemption; (ii) register the transfer of or exchange any Registered Security,
or portion thereof, called for redemption, except the unredeemed portion of any
Registered Security being redeemed in part; or (iii) exchange any Bearer
Security called for redemption, except to exchange such Bearer Security for a
Registered Security of that series and like tenor which is immediately
surrendered for redemption. (Section 305)
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
principal of and any premium and interest on Bearer Securities will be payable,
subject to any applicable laws and regulations, at the offices of such Paying
Agents outside the United States as the Company may designate from time to
time, in the manner indicated in such Prospectus Supplement. (Section 1002)
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
interest on Bearer Securities on any Interest Payment Date will be made only
against surrender to the Paying Agent of the coupon relating to such Interest
Payment Date. (Section 1001) No payment with respect to any Bearer Security
will be made at any office or agency of the Company in the United States or by
check mailed to any address in the United States or by transfer to any account
maintained with a bank located in the United States. Notwithstanding the
foregoing, payments of principal of and any premium and interest on Bearer
Securities denominated and payable in U.S. dollars will be made at the office
of the Company's Paying Agent in the Borough of Manhattan, The City of New
York, if (but only if) payment of the full amount thereof in U.S. dollars at
all offices or agencies outside the United States is illegal or effectively
precluded by exchange controls or other similar restrictions. (Section 1002)
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
principal of and any premium and interest on Registered Securities will be made
at the office of such Paying Agent or Paying Agents as the Company may
designate from time to time, except that at the option of the Company payment
of any interest may be made by check mailed on or before the due date to the
address of the Person entitled thereto as such address shall appear in the
Security Register. (Sections 307, 1002) Unless otherwise indicated in an
applicable Prospectus Supplement, payment of any installment of interest on
Registered Securities will be made to the Person in whose name such Registered
Security is registered at the close of business on the Regular Record Date for
such interest. (Section 307)
Unless otherwise indicated in an applicable Prospectus Supplement, the
Company, at its principal executive offices in Lakewood, Colorado will act as
its own Paying Agent for payments with respect to Securities which are issuable
solely as Registered Securities and the Company will maintain a Paying Agent
outside the United States for payments with respect to Securities (subject to
limitations described above in the case of Bearer Securities) which are
issuable solely as Bearer Securities or as both Registered Securities and
Bearer Securities. Any Paying Agents outside the United States and any other
Paying Agents in the United States initially designated by the Company for the
Securities will be named in an applicable Prospectus Supplement. The Company
may at any time designate additional Paying Agents or rescind the designation
of any Paying Agent or approve a change in the office through which any Paying
Agent acts, except that, if Securities of a series are issuable solely as
Registered Securities, the Company will be required to maintain a Paying Agent
in each Place of Payment for such series and, if Securities of a series are
issuable as Bearer Securities, the Company will be required to maintain (i) a
Paying Agent in the Borough of Manhattan, The City of New York for principal
payments with respect to any Registered Securities of the series (and for
payments with respect to Bearer Securities of the series in the circumstances
described above, but not otherwise), and (ii) a Paying Agent in a Place of
Payment located outside the United States where Securities of such series and
any coupons appertaining thereto may be presented and surrendered for payment.
(Section 1002)
6
<PAGE>
All moneys paid by the Company to a Paying Agent for the payment of principal
of and any premium or interest on any Security which remain unclaimed at the
end of two years after such principal, premium or interest shall have become
due and payable will (subject to applicable escheat laws) be repaid to the
Company, and the Holder of such Security or any coupon will thereafter look
only to the Company for payment thereof. (Section 1003)
GLOBAL SECURITIES
Securities of a series may be issued in whole or in part in the form of one
or more global Securities that will be deposited with, or on behalf of, a
depository identified in the Prospectus Supplement relating to such series.
Global Securities may be issued in either registered or bearer form and in
either temporary or permanent form. (Section 203) Unless and until it is
exchanged in whole or in part for the individual Securities represented
thereby, a global Security may not be transferred except as a whole by the
depository for such global Security to a nominee of such depository or by a
nominee of such depository to such depository or another nominee of such
depository or by the depository or any nominee to a successor depository or any
nominee of such successor.
The specific terms of the depository arrangement with respect to a series of
Securities and certain limitations and restrictions relating to a series of
Bearer Securities in the form of one or more global Securities will be
described in the Prospectus Supplement relating to such series.
CERTAIN DEFINITIONS
"Net Tangible Assets" means the total amount of assets appearing on a
consolidated balance sheet of the Company and its Subsidiaries less, without
duplication: (a) total current liabilities (excluding current maturities of
long-term debt and preferred stock); (b) all reserves for depreciation and
other asset valuation reserves but excluding reserves for deferred federal and
state income taxes; (c) all intangible assets such as goodwill, trademarks,
trade names, patents and unamortized debt discount and expense carried as an
asset; and (d) all appropriate adjustments on account of minority interests of
other Persons holding common stock in any Subsidiary. (Section 101)
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Principal Property" means any natural gas pipeline, natural gas distribution
system, natural gas gathering system or natural gas storage facility located in
the United States, except any such property that in the opinion of the Board of
Directors is not of material importance to the business conducted by the
Company and its consolidated Subsidiaries taken as a whole. (Section 101)
"Principal Subsidiary" means any Subsidiary which owns a Principal Property.
(Section 101)
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock which
ordinarily has voting power for the election of directors, whether at all times
or only so long as no senior class of stock has such voting power by reason of
any contingency. (Section 101)
LIMITATION ON LIENS
The Company will covenant that it will not, nor will it permit any Subsidiary
to, issue, assume or guarantee any debt for money borrowed ("Debt") if such
Debt is secured by a mortgage, pledge, security interest or lien (a "mortgage"
or "mortgages") upon any Principal Property of the Company or any Principal
Subsidiary or upon any shares of stock or indebtedness of any Principal
Subsidiary (whether such Principal
7
<PAGE>
Property, shares or indebtedness is now owned or hereafter acquired) without in
any such case effectively providing that the Securities shall be secured
equally and ratably with (or prior to) such Debt, except that the foregoing
restrictions shall not apply to: (a) mortgages on any property acquired,
constructed or improved by the Company or any Principal Subsidiary after the
date of the Indenture which are created within 180 days after such acquisition
(or in the case of property constructed or improved, after the completion and
commencement of commercial operation of such property, whichever is later) to
secure or provide for the payment of the purchase price or cost thereof,
provided that in the case of such construction or improvement the mortgages
shall not apply to any property theretofore owned by the Company or any
Subsidiary other than theretofore unimproved real property; (b) existing
mortgages on property acquired (including mortgages on any property acquired
from a Person which is consolidated with or merged with or into the Company or
a Subsidiary) or mortgages outstanding at the time any corporation becomes a
Subsidiary; (c) mortgages in favor of domestic or foreign governmental bodies
to secure advances or other payments pursuant to any contract or statute or to
secure indebtedness incurred to finance the purchase price or cost of
constructing or improving the property subject to such mortgages, including
mortgages to secure Debt of the pollution control or industrial revenue bond
type; (d) mortgages in favor of the Company or any Principal Subsidiary; or (e)
any extension, renewal or replacement (or successive extensions, renewals or
replacements), in whole or in part, of any mortgage referred to in any of the
foregoing clauses (a)-(d). (Section 1006)
Notwithstanding the foregoing, the Company and any Subsidiary may, without
securing the Securities, issue, assume or guarantee secured Debt (which would
otherwise be subject to the foregoing restrictions) in an aggregate amount
which, together with all other such Debt, does not exceed 10% of the Net
Tangible Assets, as shown on a consolidated balance sheet as of a date not more
than 90 days prior to the proposed transaction prepared by the Company in
accordance with generally accepted accounting principles. (Section 1006)
EVENTS OF DEFAULT
Any one of the following events will constitute an Event of Default under the
Indenture with respect to Securities of any series: (a) failure to pay any
interest on any Security of that series when due, continued for 30 days; (b)
failure to pay principal of or any premium on any Security of that series when
due; (c) failure to deposit any sinking fund payment, when due, in respect of
any Security of that series; (d) failure to perform any other covenant of the
Company in the Indenture (other than a covenant included in the Indenture
solely for the benefit of series of Securities other than that series),
continued for 90 days after written notice as provided in the Indenture; (e)
certain events in bankruptcy, insolvency or reorganization involving the
Company; and (f) any other Event of Default provided with respect to Securities
of that series. (Section 501)
If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, either the Trustee or the Holders of at
least 25% in aggregate principal amount of the Outstanding Securities of that
series by notice as provided in the Indenture may declare the principal amount
(or, if the Securities of that series are Original Issue Discount Securities,
such portion of the principal amount as may be specified in the terms of that
series) of all the Securities of that series to be due and payable immediately.
At any time after a declaration of acceleration with respect to Securities of
any series has been made, but before a judgment or decree for payment of money
has been obtained by the Trustee, the Holders of a majority in aggregate
principal amount of the Outstanding Securities of that series may, under
certain circumstances, rescind and annul such acceleration. (Section 502)
The Indenture will provide that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable indemnity. (Sections 601, 603) Subject to
such provisions for the indemnification of the Trustee, the Holders of a
majority in aggregate principal amount of the Outstanding Securities of any
series will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred on the Trustee, with respect to
8
<PAGE>
the Securities of that series; provided, however, that the Trustee shall not be
obligated to take any action unduly prejudicial to Holders not joining in such
direction or involving the Trustee in personal liability. (Section 512)
The Company will be required to furnish to the Trustee annually a statement
as to the performance by the Company of its obligations under the Indenture and
as to any default in such performance. (Section 1007)
DEFEASANCE
If so specified with respect to any particular series of Securities, the
Company may discharge its indebtedness and its obligations or certain of its
obligations under the Indenture with respect to such series by depositing funds
or obligations issued or guaranteed by the United States of America with the
Trustee.
Defeasance and Discharge
The Indenture will provide that, if so specified with respect to the
Securities of any series, the Company will be discharged from any and all
obligations in respect of the Securities of such series (except for certain
obligations relating to temporary Securities and exchange of Securities,
registration of transfer or exchange of Securities of such series, replacement
of stolen, lost or mutilated Securities of such series, maintenance of paying
agencies to hold moneys for payment in trust and payment of additional amounts,
if any, required in consequence of United States withholding taxes imposed on
payments to non-United States persons) upon the deposit with the Trustee, in
trust, of money and/or U.S. Government Obligations which through the payment of
interest and principal in respect thereof in accordance with their terms will
provide money in an amount sufficient to pay the principal of (and premium, if
any), and each installment of interest on, the Securities of such series on the
Stated Maturity of such payments in accordance with the terms of the Indenture
and the Securities of such series. (Sections 1302, 1304) Such a trust may only
be established if, among other things, the Company has delivered to the Trustee
an Opinion of Counsel to the effect that (i) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling, or (ii)
since the date of the Indenture there has been a change in applicable federal
income tax law, in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders of Securities of such series
will not recognize income, gain or loss for federal income tax purposes as a
result of such deposit, defeasance and discharge, and will be subject to
federal income tax on the same amounts and in the same manner and at the same
times as would have been the case if such deposit, defeasance and discharge had
not occurred. (Section 1304) In the event of any such defeasance and discharge
of Securities of such series, Holders of Securities of such series would be
entitled to look only to such trust fund for payment of principal of and any
premium and any interest on their Securities until Maturity.
Defeasance of Certain Obligations
The Indenture will provide that, if so specified with respect to the
Securities of any series, the Company may omit to comply with certain
restrictive covenants, including the covenant described under "Limitation on
Liens" above, and any such omission shall not be an Event of Default with
respect to the Securities of such series, upon the deposit with the Trustee, in
trust, of money and/or U.S. Government Obligations which through the payment of
interest and principal in respect thereof in accordance with their terms will
provide money in an amount sufficient to pay the principal of (and premium, if
any), and each installment of interest on, the Securities of such series on the
Stated Maturity of such payments in accordance with the terms of the Indenture
and the Securities of such series. The obligations of the Company under the
Indenture and the Securities of such series other than with respect to such
covenants shall remain in full force and effect. (Section 1303) Such a trust
may be established only if, among other things, the Company has delivered to
the Trustee an Opinion of Counsel to the effect that the Holders of the
Securities of such series will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit and defeasance of certain
obligations and will be subject to federal income tax on the same amounts and
in the same manner and at the same time as would have been the case if such
deposit and defeasance had not occurred. (Section 1304)
9
<PAGE>
Although the amount of money and U.S. Government Obligations on deposit with
the Trustee would be intended to be sufficient to pay amounts due on the
Securities of such series at the time of their Stated Maturity, in the event
the Company exercises its option to omit compliance with the covenants defeased
with respect to the Securities of any series as described above and the
Securities of such series are declared due and payable because of the
occurrence of any Event of Default, such amount may not be sufficient to pay
amounts due on the Securities of such series at the time of the acceleration
resulting from such Event of Default. The Company shall in any event remain
liable for such payments as provided in the Indenture.
Federal Income Tax Consequences
Under current United States federal income tax law, defeasance and discharge
would likely be treated as a taxable exchange of Securities to be defeased for
an interest in the defeasance trust. As a consequence, a holder would recognize
gain or loss equal to the difference between the holder's cost or other tax
basis for such Securities and the value of the holder's interest in the
defeasance trust, and thereafter would be required to include in income a share
of the income, gain or loss of the defeasance trust. Under current United
States federal income tax law, covenant defeasance would ordinarily not be
treated as a taxable exchange of such Securities.
MEETINGS, MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of each series affected by such
modification or amendment; provided, however, that no such modification or
amendment may, without consent of the Holder of each Outstanding Security
affected thereby, (a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, (b) change the
Redemption Date with respect to any Security, (c) reduce the principal amount
of, or premium or interest on, any Security, (d) change any obligation of the
Company to pay additional amounts, (e) reduce the amount of principal of an
Original Issue Discount Security payable upon acceleration of the Maturity
thereof, (f) change the coin or currency in which any Security or any premium
or interest thereon is payable, (g) change the redemption right of any Holder,
(h) impair the right to institute suit for the enforcement of any payment on or
with respect to any Security, (i) reduce the percentage in principal amount of
Outstanding Securities of any series, the consent of whose Holders is required
for modification or amendment of the Indenture or for waiver of compliance with
certain provisions of the Indenture or for waiver of certain defaults, (j)
reduce the requirements contained in the Indenture for quorum or voting, (k)
change any obligation of the Company to maintain an office or agency in the
places and for the purposes required by the Indenture, or (l) modify any of the
above provisions. (Section 902)
The Holders of a majority in aggregate principal amount of the Outstanding
Securities of each series may, on behalf of the Holders of all Securities of
that series, waive, insofar as that series is concerned, compliance by the
Company with certain restrictive provisions of the Indenture. (Section 1008)
The Holders of a majority in aggregate principal amount of the Outstanding
Securities of each series may, on behalf of all Holders of Securities of that
series, waive any past default under the Indenture with respect to any
Securities of that series, except a default (a) in the payment of principal of,
or premium, if any, or any interest on any Security of such series or (b) in
respect of a covenant or provision of the Indenture which cannot be modified or
amended without the consent of the Holder of each Outstanding Security of such
series affected. (Section 513)
The Indenture will provide that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities have given any
request, demand, authorization, direction, notice, consent or waiver thereunder
or are present at a meeting of the Holders of Securities for quorum purposes,
(i) the principal amount of an Original Issue Discount Security that shall be
deemed to be Outstanding shall be the amount of the principal that would be due
and payable as of the date of such determination upon acceleration of the
Maturity thereof, and (ii) the principal amount of a Security denominated in a
foreign currency or currency
10
<PAGE>
units shall be the U.S. dollar equivalent, determined on the date of original
issuance of such Security, of the principal amount of such Security or, in the
case of an Original Issue Discount Security, the U.S. dollar equivalent,
determined on the date of original issuance of such Security, of the amount
determined as provided in (i) above. (Section 101)
The Indenture will contain provisions for convening meetings of the Holders
of Securities of a series if Securities of that series are issuable as Bearer
Securities. (Section 1401) A meeting may be called at any time by the Trustee,
and also, upon request, by the Company or the Holders of at least 10% in
aggregate principal amount of the Outstanding Securities of such series, in any
such case upon notice given in accordance with "Notices" below. (Section 1402)
Except for any consent which must be given by the Holder of each Outstanding
Security affected thereby, as described above, any resolution presented at a
meeting (or adjourned meeting at which a quorum is present) may be adopted by
the affirmative vote of the Holders of a majority in principal amount of the
Outstanding Securities of that series; provided, however, that any resolution
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which may be made, given or taken by the Holders of a
specified percentage, which is less than a majority, in aggregate principal
amount of the Outstanding Securities of a series may be adopted at a meeting
(or adjourned meeting duly reconvened at which a quorum is present) by the
affirmative vote of the Holders of such specified percentage in aggregate
principal amount of the Outstanding Securities of that series. Any resolution
passed or decision taken at any meeting of Holders of Securities of any series
duly held in accordance with the Indenture will be binding on all Holders of
Securities of that series and related coupons. The quorum at any meeting, and
at any reconvened meeting, will be Persons holding or representing a majority
in aggregate principal amount of the Outstanding Securities of a series.
(Section 1404)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of the Holders of any of the Outstanding
Securities under the Indenture, may consolidate with or merge into, or convey,
transfer or lease its assets substantially as an entirety to, any Person which
is a corporation, partnership or trust organized and validly existing under the
laws of any domestic jurisdiction, provided that any successor Person assumes
the Company's obligations on the Securities and under the Indenture, that after
giving effect to the transaction no Event of Default, and no event which, after
notice or lapse of time, would become an Event of Default, shall have occurred
and be continuing, and that certain other conditions are met. (Section 801)
NOTICES
Except as otherwise provided in the Indenture, notices to Holders of Bearer
Securities will be given by publication at least twice in a daily newspaper in
The City of New York and in such other city or cities as may be specified in
such Securities. Notices to Holders of Registered Securities will be given by
mail to the addresses of such Holders as they appear in the Security Register.
(Section 106)
TITLE
Title to any Bearer Securities (including Bearer Securities in permanent
global form) and any coupons appertaining thereto will pass by delivery. The
Company, the Trustee and any agent of the Company or the Trustee may treat the
bearer of any Bearer Security and the bearer of any coupon and the registered
owner of any Registered Security as the owner thereof (whether or not such
Security or coupon shall be overdue and notwithstanding any notice to the
contrary) for the purpose of making payment and for all other purposes.
(Section 308)
REPLACEMENT OF SECURITIES AND COUPONS
Any mutilated Security or a Security with a mutilated coupon appertaining
thereto will be replaced by the Company at the expense of the Holder upon
surrender of such Security to the Trustee. Securities or
11
<PAGE>
coupons that became destroyed, stolen or lost will be replaced by the Company
at the expense of the Holder upon delivery to the Trustee of the Security and
coupons or evidence of destruction, loss or theft thereof satisfactory to the
Company and the Trustee; in the case of any coupon which becomes destroyed,
stolen or lost, such coupon will be replaced by issuance of a new Security in
exchange for the Security to which such coupon appertains. In the case of a
destroyed, lost or stolen Security or coupon, an indemnity satisfactory to the
Trustee and the Company may be required at the expense of the Holder of such
Security or coupon before a replacement Security will be issued. (Section 306)
GOVERNING LAW
The Indenture, the Securities and coupons will be governed by, and construed
in accordance with, the laws of the State of New York. (Section 113)
REGARDING THE TRUSTEE
Continental Bank, National Association, the Trustee under the Indenture, is
also trustee under another indenture under which several issues of the
Company's debt securities are outstanding, and transacts other banking business
with the Company in the normal course of business.
The Indenture will contain certain limitations on the right of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize for its own account on certain property received
in respect of any such claim as security or otherwise. (Section 613) The
Trustee will be permitted to engage in certain other transactions; however, if
it acquires any conflicting interest (as described in the Indenture), it must
eliminate such conflict or resign. (Section 608)
PLAN OF DISTRIBUTION
GENERAL
The Company may sell Securities to or through underwriters or dealers, and
also may sell Securities directly to other purchasers or through agents.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Securities, underwriters may receive
compensation from the Company or from purchasers of Securities for whom they
may act as agents in the form of discounts, concessions or commissions.
Underwriters, dealers and agents that participate in the distribution of
Securities may be deemed to be underwriters, and any discounts or commissions
received by them from the Company and any profit on the resale of Securities by
them may be deemed to be underwriting discounts and commissions under the
Securities Act. Any such person who may be deemed to be an underwriter will be
identified, and any such compensation received from the Company will be
described, in the Prospectus Supplement.
The Securities, when first issued, will have no established trading market.
Any underwriters or agents to or through whom Securities are sold by the
Company for public offering and sale may make a market in such Securities, but
such underwriters or agents will not be obligated to do so and may discontinue
any market making at any time without notice. No assurance can be given as to
the liquidity of the trading market for any Securities.
Under agreements which may be entered into by the Company, underwriters,
dealers and agents who participate in the distribution of Securities may be
entitled to indemnification by the Company against or contribution toward
certain liabilities, including liabilities under the Securities Act.
12
<PAGE>
DELAYED DELIVERY ARRANGEMENTS
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other persons acting as the Company's agents to solicit offers
by certain institutions to purchase Securities from the Company pursuant to
contracts providing for payment and delivery on a future date. Institutions
with which such contracts may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and others, but in all cases will be subject to the
approval of the Company. The obligations of any purchaser under any such
contract will be subject to the condition that the purchase of the Securities
shall not at the time of delivery be prohibited under the laws of any
jurisdiction to which such purchaser is subject. The underwriters and such
agents will not have any responsibility in respect of the validity or
performance of such contracts.
VALIDITY OF SECURITIES
The validity of the Offered Securities will be passed upon for the Company by
Vinson & Elkins L.L.P., Houston, Texas, who may rely on the opinion of the law
offices of Glaves, Irby and Rhoads, Wichita, Kansas, as to matters of Kansas
law, and will be passed upon for any agents, dealers or underwriters by counsel
named in the applicable Prospectus Supplement.
EXPERTS
The consolidated financial statements and schedules, included or incorporated
by reference in the Company's Annual Report on Form 10-K for the year ended
December 31, 1992, which is incorporated by reference herein, have been audited
by Arthur Andersen & Co., independent public accountants, as indicated in their
reports with respect thereto, and are incorporated herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
reports. Reference is made to such reports, which call attention to certain
changes in accounting principles during the periods reported thereon.
13
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT
CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER
OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
-----------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Incorporation of Additional Documents by Reference......................... S-2
Use of Proceeds............................................................ S-2
Ratios of Earnings to Fixed Charges........................................ S-2
Recent Developments........................................................ S-3
Description of Debentures.................................................. S-3
Underwriting............................................................... S-5
Validity of Securities..................................................... S-5
Experts.................................................................... S-6
</TABLE>
PROSPECTUS
<TABLE>
<S> <C>
Available Information....................................................... 2
Incorporation of Certain Documents by Reference............................. 2
The Company................................................................. 3
Use of Proceeds............................................................. 3
Ratios of Earnings to Fixed Charges......................................... 3
Description of Securities................................................... 3
Plan of Distribution........................................................ 12
Validity of Securities...................................................... 13
Experts..................................................................... 13
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
$75,000,000
K N ENERGY, INC.
8.75% DEBENTURES DUE
OCTOBER 15, 2024
-----------------
PROSPECTUS SUPPLEMENT
-----------------
MERRILL LYNCH & CO.
SALOMON BROTHERS INC
OCTOBER 11, 1994
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
