Exhibit 10.1
COVANTA HOLDING CORPORATION
TSR AWARD AGREEMENT
THIS AGREEMENT is made and entered into as of this ___ day of __________, 201_
(the “Grant Date”) by and between Covanta Holding Corporation, a Delaware
corporation (the “Company”), and ______________________________ (“Employee”),
pursuant to the Covanta Holding Corporation Equity Award Plan for Employees and
Officers (the “Plan”). This Agreement and the award contained herein are subject
to the terms and conditions set forth in the Plan, which are incorporated by
reference herein, and the following terms and conditions:
WITNESSETH:
WHEREAS, Employee is an employee of the Company or its Affiliates or
Subsidiaries;
WHEREAS, the Company has adopted the Plan in order to promote the interests of
the Company and its stockholders by using equity interests in the Company to
attract, retain and motivate its management and other eligible persons and to
encourage and reward their contributions to the Company's and/or its Affiliates'
and Subsidiaries' performance and profitability;
WHEREAS, the Compensation Committee (the “Compensation Committee”) of the
Company's Board of Directors (the “Board”) authorized an
objectively-determinable performance-based award (the “TSR Award”) measuring the
Company's total shareholder return (defined and measured in accordance with
paragraph 2.1(b) below, the “TSR”) to Employee pursuant to Section 18(g) of the
Plan, which is intended to qualify as performance-based compensation under
Section 162(m) of the Internal Revenue Code of 1986;
WHEREAS, the Compensation Committee has determined that it is in the best
interests of the Company to grant TSR Performance Shares (as hereinafter
defined) under the Plan to Employee pursuant to the terms and conditions set
forth in this Agreement; and
WHEREAS, Employee is entrusted with knowledge of the confidential and
proprietary information and particular business methods of the Company, Covanta
Energy Corporation and their respective Subsidiaries and Affiliates (“Covanta
Group”) and the clients of the Covanta Group, and Employee is trained and
instructed in the Covanta Group's particular operations, all of which are
exceptionally valuable to the Covanta Group and vital to the success of the
Covanta Group's business.
NOW, THEREFORE, in consideration of the various covenants and agreements herein
contained, and intending to be legally bound hereby, the parties hereto agree as
follows:
1.TSR Award. In accordance with, and subject to, the terms and conditions of the
Plan, the Company hereby grants to Employee ___________ restricted stock units
(“TSR Target Share Amount”) payable in shares of the Company's common stock, par
value $0.10 per share (“Common Stock”) for the period commencing as of January
1, 2013 and ending December 31, 2015 (“Performance Period”). Issuance and
payment of the award in the form of shares of Common Stock of the Company (the
“TSR Performance Shares”) is conditioned and dependent upon Employee's continued
employment during the Performance Period and the achievement of performance
goals reflected in the Company's TSR relative to the TSR of the Peer Group
Companies (as hereinafter defined) more fully described in Section 2 hereof. If
the Company issues or otherwise delivers TSR

--------------------------------------------------------------------------------

Performance Shares to Employee, the Company shall also pay to Employee the
amount of cash determined under Section 3 (the “TSR Dividend Equivalent Cash
Award”).
2.TSR Award Performance Conditions. It is understood and agreed that this TSR
Award is subject to the following terms and conditions:
1.Determination of TSR Performance Shares.
(a)The number of the TSR Performance Shares, if any, earned for the Performance
Period shall be determined in accordance with the following formula:
TSR Performance Shares = TSR Payout Factor X TSR Target Share Amount
The “TSR Payout Factor” is based on the Company's TSR for the Performance Period
relative to the TSR for each of the Peer Group Companies (as hereinafter
weighted and defined), determined in accordance with the following table:
If Company's TSR Percentile Rank against the
Peer Group Companies is
TSR Payout Factor
(% of Target Award)
less than the 40th percentile
—%
at the 40th percentile
25%
at the 50th percentile
50%
at the 70th percentile
100%
at the 90th percentile or higher
200%

(b)TSR is equal to the sum of the cumulative percentage change in stock price
from the beginning to the end of the Performance Period, plus the assumed
reinvestment of all regular and extraordinary dividends over the Performance
Period. For purposes of this Agreement, the stock price at the beginning of the
Performance Period will be the average closing stock price over the trading days
in the two months immediately preceding the start of the Performance Period
(November and December 2012), and the stock price at the end of the Performance
Period will be the average closing stock price over the trading days in the last
two months of the Performance Period (November and December 2015).
(c)The “Peer Group Companies” shall mean the group composed of companies in the
following indices (or their successors as determined in the sole discretion of
the Compensation Committee if any of such indices are no longer maintained prior
to the end of the Performance Period) as of both the date of this Agreement and
as of the last date of the Performance Period: (i) Dow Jones U.S. Waste &
Disposal Services Index; (ii) Dow Jones U.S. Conventional Electricity Index; and
(iii) Standard & Poor's Mid-Cap 400 Index.
(d)The Company's “TSR Percentile Rank,” shall mean the percentile rank of the
Company based on its TSR compared to the TSRs of the Peer Group Companies, with
rankings based on their respective TSR's from lowest to highest as follows: (i)
Dow Jones U.S. Waste & Disposal Services Index; (ii) Dow Jones U.S. Conventional
Electricity Index; and (iii) Standard & Poor's Mid-Cap 400 Index.
(e)If the Company's TSR Percentile Rank for the Performance Period is between
any of the percentiles between the 40th percentile and the 90th percentile set
forth in first column of the table set forth in Section 2.1(a) above, then the
calculation of the TSR Payout Factor shall be linearly interpolated between the
respective TSR Percentile Ranks and TSR Payout Factors set forth in the table
set forth in Section 2.1(a) above. Interpolation calculations of TSR Percentile
Rank and TSR Payout Factor shall be carried out to the third decimal place.
(f)The Company's TSR Percentile Rank shall be measured with respect to each of
indices set forth in Section 2.1(d) above and TSR Payout Factor determined with
respect to the Company's TSR Percentile Rank for each index and then weighted as
follows for purposes of determining the number

--------------------------------------------------------------------------------

of TSR Performance Shares to be issued hereunder: (i) Dow Jones U.S. Waste &
Disposal Services Index - 25%; (ii) Dow Jones U.S. Conventional Electricity
Index - 25%; and (iii) Standard & Poor's Mid-Cap 400 Index - 50%.
2.Employment Condition. Except as set forth in Section 2.3 below, vesting of the
TSR Award is expressly conditioned upon Employee being continuously employed by
the Company or any of its Subsidiaries or Affiliates during the entire
Performance Period, including without limitation, the last day of the
Performance Period.
3.Effect of Termination of Employment. Except as otherwise provided below, if
Employee's employment with the Company or any of its Subsidiaries or Affiliates,
is terminated for any reason prior to the end of the Performance Period, the TSR
Award shall be immediately forfeited.
(a)Termination due to Death or Disability. If Employee's termination of
employment is due to death or Disability (as defined in the Plan), the TSR Award
shall vest and will be issuable at the time and in the form as provided in
Section 4.1 hereof based on the Company's TSR for the entire Performance Period
relative to the TSR for each of the Peer Group Companies (as weighted in
accordance with Section 2.1(d)) for the entire Performance Period.
(b)Termination due to Retirement or Termination by the Company for Other than
Cause. If Employee's termination of employment is due to Employee's retirement
at or after the age of 65 (unless such retirement results from a termination of
Employee's employment by the Company for Cause (as such term is defined in the
Plan)) or if Employee's employment is terminated by the Company (or a Subsidiary
or Affiliate of the Company, as the case may be) for reasons other than Cause
(as determined by the Compensation Committee), a prorated portion of the TSR
Award shall vest pursuant to Section 2.3(c) below, and will be payable at the
time and in the form as provided in Section 4.1 hereof. For purposes of this
Section 2.3(b), Employee shall be considered employed during any period in which
Employee is receiving severance pay, and the date of the termination of
Employee's employment shall be the last day of any such severance pay period.
(c)Prorated Vesting upon Retirement or Termination by the Company for Other than
Cause. The prorated portion of the TSR Award that vests due to termination of
Employee's employment due to retirement or termination by the Company for
reasons other than Cause shall be determined by multiplying (i) the TSR
Performance Shares that would have been vested based on the Company's TSR for
the entire Performance Period relative to the TSR for each of the Peer Group
Companies (as weighted in accordance with Section 2.1(d)) for the entire
Performance Period, by (ii) a fraction, the numerator of which is the number of
days that Employee was continually employed since the beginning of the
Performance Period and the denominator of which is 1,095. For this purposes,
full months of employment shall be based on monthly anniversaries of the
commencement of the Performance Period.
(d)Change in Control Event. Notwithstanding anything in the Plan to the
contrary, upon the occurrence of a Change in Control (as hereinafter defined)
during the Performance Period, (i) a prorated portion of the TSR Award shall
vest based on actual performance through the date of the Change in Control (such
prorated portion to be determined as provided below in this Section 2.3(d)) and
shall be paid within 30 days following the date of the Change in Control and
(ii) the remaining portion of the TSR Award (such remaining portion to be
determined as provided below in this Section 2.3(d)) shall vest and shall be
paid within 30 days following the date of the Change in Control. The prorated
portion of the TSR Award that vests pursuant to subpart (i) in the prior
sentence due to the Change in Control shall be determined by multiplying (A) the
TSR Performance Shares as calculated in accordance with Section 2.1(a) and
determined based on the Company's TSR relative to the TSR for each of the Peer
Group Companies and weighted in accordance with Section 2.1(d) based on TSR
performance for the period beginning January 1, 2013 and ending on the date
preceding the date on which the Change in Control occurs (the “Prorated
Period”), by (B) a fraction, the numerator of which is the number of calendar
days in the Prorated Period and the denominator of which is 1,095. The remaining
portion of the TSR Award that vests pursuant to subpart (ii) in the first
sentence of this Section 2.3(d) due to the Change in Control shall be determined
by multiplying

--------------------------------------------------------------------------------

(A) the TSR Target Share Amount by (B) a fraction, the numerator of which is the
number of calendar days remaining in the Performance Period as of the date of
the Change in Control (including day of the Change in Control) and the
denominator of which is 1,095. The Company also shall pay to Employee a TSR
Dividend Equivalent Cash Award based on such number of TSR Performance Shares
earned by Employee pursuant to this Section 2.3(d).
(e)Change in Control Definition. For purposes of this Agreement, a “Change in
Control” shall mean the occurrence of any of the following events, each of which
shall be determined independently of the others: (i) any “Person” (as
hereinafter defined), other than a holder of at least 10% of the outstanding
voting power of the Company as of the date of this Agreement, becomes a
“beneficial owner” (as such term is used in Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of a majority
of the stock of the Company entitled to vote in the election of directors of the
Company; (ii) individuals who are Continuing Directors of the Company (as
hereinafter defined) cease to constitute a majority of the members of the Board;
(iii) stockholders of the Company adopt and consummate a plan of complete or
substantial liquidation or an agreement providing for the distribution of all or
substantially all of the assets of the Company; (iv) the Company is a party to a
merger, consolidation, other form of business combination or a sale of all or
substantially all of its assets, with an unaffiliated third party, unless the
business of the Company following consummation of such merger, consolidation or
other business combination is continued following any such transaction by a
resulting entity (which may be, but need not be, the Company) and the
stockholders of the Company immediately prior to such transaction hold, directly
or indirectly, at least a majority of the voting power of the resulting entity;
provided, however, that a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) shall not constitute a
Change in Control; (v) there is a Change in Control of the Company of a nature
that is reported in response to item 5.01 of Current Report on Form 8-K or any
similar item, schedule or form under the Exchange Act, as in effect at the time
of the change, whether or not the Company is then subject to such reporting
requirements; provided, however, that for purposes of this Agreement a Change in
Control shall not be deemed to occur if the Person or Persons deemed to have
acquired control is a holder of at least 10% of the outstanding voting power of
the Company as of the date of this Agreement; or (vi) the Company consummates a
transaction which constitutes a “Rule 13e-3 transaction” (as such term is
defined in Rule 13e-3 of the Exchange Act) prior to the termination or
expiration of this Agreement.
(f)Covanta Energy Corporation. In the event that Employee is an employee of
Covanta Energy Corporation or any of its Subsidiaries or Affiliates, then the
references to the Company in Section 2.3(e)(i), (iii), (iv), (v) and (vi) above
shall also include, in the alternative, Covanta Energy Corporation.
(g)Continuing Director Definition. For purposes of Section 2.3(e), “Continuing
Directors” shall mean the members of the Board on the date of execution of this
Agreement, provided that any person becoming a member of the Board subsequent to
such date whose election or nomination for election was supported by at least a
majority of the directors who then comprised the Continuing Directors shall be
considered to be a Continuing Director; and the term “Person” is used as such
term is used in Sections 13(d) and 14(d) of the Exchange Act.
3.TSR Dividend Equivalent Cash Awards. The amount of the TSR Dividend Equivalent
Cash Award shall be determined by multiplying the number of TSR Performance
Shares earned by Employee as determined under Section 2 above by the total
amount of dividends paid per share of the Company's Common Stock for which the
ex-dividend date occurred after the beginning of the Performance Period and
before the Payment Date or Change in Control Payment Date (as those terms are
defined in Section 4.2), as applicable.
4.Confirmation and Payment.
1.Determination of TSR Performance Shares. Following the end of the Performance
Period, the Compensation Committee shall determine and confirm: (a) the TSR
attained by the Company and its relative ranking against the Peer Group
Companies, subject to the weighting set forth in Section 2.5; (b) the TSR Payout
Factor for TSR Performance Shares; (c) the number of TSR Performance Shares
earned

--------------------------------------------------------------------------------

which shall be issuable to Employee; and (d) the amount of the TSR Dividend
Equivalent Cash Award payable to Employee. Prior to such meeting, the Company
shall provide to the Compensation Committee, in reasonable detail, the
calculation of the Company's TSR, the TSR Payout Factor, the number of TSR
Performance Shares issuable to Employee and the amount of the TSR Dividend
Equivalent Cash Award payable to Employee, which information shall be available
to Employee upon request after the Payment Date (as hereinafter defined). The
number of TSR Performance Shares earned shall be rounded to the nearest whole
share.
2.Issuance of TSR Performance Shares and Payment of TSR Dividend Equivalent Cash
Awards. As soon as practicable in the calendar year following the close of the
Performance Period (but not later than March 15) (the “Payment Date”) and
subject to applicable tax withholding as provided in Section 5 hereof, the TSR
Dividend Equivalent Cash Award shall be paid to Employee, or in the event of
Employee's death, to Employee's beneficiary. Promptly after the Payment Date,
certificates representing the TSR Performance Shares determined in accordance
with Section 4.1 shall be delivered to Employee or to Employee's beneficiary, as
applicable. Notwithstanding the foregoing, in the event that Employee is
prohibited from trading in the Company's securities on the Payment Date pursuant
to applicable securities laws and/or the Company's policy on securities trading
and disclosure of confidential information, the Payment Date shall be, in the
determination of the Compensation Committee, the first date Employee is no
longer prohibited from such trading. Notwithstanding the terms of this Section
4.2, if a Change in Control occurs before the end of the Performance Period,
then, subject to applicable tax withholding, the TSR Dividend Equivalent Cash
Award shall be paid to Employee and the TSR Performance Shares shall be issued
to Employee in accordance with the timing set forth in Section 2.3(d) (the
“Change in Control Payment Date”).
5.Tax Withholding. As a condition precedent to the receipt of any TSR
Performance Shares as provided for in Section 4.2, Employee agrees to pay to the
Company, at such times as the Company shall determine, such amounts as the
Company shall deem necessary to satisfy any withholding taxes due on income that
Employee recognizes pursuant to the issuance to Employee of the TSR Performance
Shares. The obligations of the Company under this Agreement and the Plan shall
be conditional on such payment or arrangements, and the Company, its Affiliates
and Subsidiaries shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment otherwise due to Employee. In addition, Employee
may elect, unless otherwise determined by the Compensation Committee, to satisfy
the withholding requirement by having the Company withhold first TSR Dividend
Equivalent Cash Awards and, if such amount is insufficient to pay the full
amount of the withholding tax, TSR Performance Shares with a Fair Market Value
(as hereinafter defined), as of the date of such withholding, sufficient to
satisfy the withholding obligation. For purposes of this Section 5, the “Fair
Market Value” of a TSR Performance Share shall be equal to the closing market
price of the Common Stock on the last trading day immediately preceding the
Payment Date or the Change in Control Payment Date, as applicable.
6.Changes in Capital Structure.
1.If, during the term of this Agreement, there shall be any merger,
reorganization, consolidation, recapitalization, stock dividend, stock split,
rights offering or extraordinary distribution with respect to the Common Stock,
or other change in corporate structure affecting the Common Stock, the
Compensation Committee shall make or cause to be made an appropriate and
equitable substitution, adjustment or treatment with respect to the TSR
Performance Shares, including a substitution or adjustment in the aggregate
number or kind of shares subject to this Agreement. Any securities, awards or
rights issued pursuant to this Section 6.1 shall be subject to the same
restrictions, if any, as the underlying TSR Performance Shares to which they
relate.
2.If the outstanding Common Stock of the Company is hereafter converted into or
exchanged for all of the outstanding Common Stock of a corporation (the “Parent
Successor”) as part of a transaction (the “Transaction”) in which the Company
becomes a wholly-owned subsidiary of Parent Successor, then (a) the obligations
under this Agreement shall be assumed by Parent Successor and references

--------------------------------------------------------------------------------

in this Agreement to the Company shall thereafter generally be deemed to refer
to Parent Successor, (b) Common Stock of Parent Successor shall be issued in
lieu of Common Stock of the Company under this Agreement, (c) the performance
measured pursuant to Section 2.1 of this Agreement shall be the continuous
performance of the Company prior to the Transaction and Parent Successor after
the Transaction, (d) employment by the Company for purposes of this Agreement
shall include employment by either the Company or Parent Successor, and (e) the
TSR Dividend Equivalent Cash Awards under Section 4 of this Agreement shall be
based on dividends paid on the Common Stock of the Company prior to the
Transaction and Parent Successor after the Transaction.
7.Return and/or Forfeiture of Performance-Based Payments or Awards.
Notwithstanding any other provision in this Agreement, in the event that
pursuant to the terms or requirements of the Sarbanes-Oxley Act of 2002, the
Dodd-Frank Wall Street Reform and Consumer Protection Act, or of any applicable
laws, rules or regulations promulgated by the Securities and Exchange Commission
from time to time, and in the event any stock award or other payment is based
upon the satisfaction of financial performance metrics which are subsequently
reversed due to a restatement or reclassification of financial results of the
Company, then any payments made or awards granted shall be returned and
forfeited to the extent required and as provided by applicable laws, rules,
regulations or listing requirements. This Section 7 shall survive any expiration
or termination of this Agreement for any reason.
8.Registration. This grant is subject to the condition that if at any time the
Board or Compensation Committee shall determine, in its discretion, that the
listing of the TSR Performance Shares which may be issued hereunder on any
securities exchange, or the registration or qualification of such shares under
any federal or state law, or the consent or approval of any regulatory body,
shall be necessary or desirable as a condition of, or in connection with, the
grant, receipt or delivery of the TSR Performance Shares hereunder, such grant,
receipt or delivery will not be effected unless and until such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Board or Compensation
Committee. The Company agrees to make every reasonable effort to effect or
obtain any such listing, registration, qualification, consent or approval.
9.No Right to Employment. In no event shall the granting of the TSR Performance
Shares or the other provisions hereof or the acceptance of the TSR Performance
Shares by Employee interfere with or limit in any way the right of the Company,
an Affiliate or Subsidiary to terminate the Employee's employment at any time,
nor confer upon Employee any right to continue in the employ of the Company, an
Affiliate or Subsidiary for any period of time or to continue his or her present
or any other rate of compensation.
10.Noncompetition; Nonsolicitation; Confidential Information, etc. Employee
hereby acknowledges that, during and solely as a result of Employee's employment
by the Company or its Subsidiaries or Affiliates, Employee has received and will
continue to receive special training and education with respect to the
operations of such entity(ies) and access to confidential information and
business and professional contacts, all of which is exceptionally valuable to
the Covanta Group and vital to the success of the Covanta Group's business and
other related matters. In consideration of such special and unique opportunities
afforded to Employee as a result of Employee's employment and the grant of TSR
Performance Shares, Employee hereby agrees to be bound by and acknowledges the
reasonableness of the following covenants, which are specifically relied upon by
the Company and Covanta in entering into this Agreement and as a condition to
the grant of the TSR Performance Shares. Employee acknowledges and agrees that
each of the individual provisions of this Section 10 constitutes a separate and
distinct obligation of Employee to the Covanta Group, individually enforceable
against Employee.
1.Covenant Not to Compete. During the period Employee is employed by Company or
its Subsidiary and for a period following Employee's termination of employment
for any reason, equal to ___[INSERT PERIOD]________, Employee shall not, without
the consent of the Board, in any form or any manner, directly or indirectly, on
Employee's own behalf or in combination with others, become engaged in (as an
individual, partner, stockholder, director, officer, principal, agent,
independent contractor, employee, trustee, lender of money or in any other
relation or capacity whatsoever, except as a holder of securities of

--------------------------------------------------------------------------------

a corporation whose securities are publicly traded and which is subject to the
reporting requirements of the Exchange Act, and then only to the extent of
owning not more than two percent (2%) of the issued and outstanding securities
of such corporation or other entity) or provide services to any business which
renders services or sells products, or proposes to render services or sell
products, that compete with the Business of the Covanta Group within the United
States and any foreign country in which the Covanta Group conducts any aspect of
the Business during the term of this Agreement. For purposes of this Agreement,
the term “Business” shall mean the development, ownership and/or operation of
businesses engaged in waste-to-energy and other renewable energy facilities,
waste management and/or waste procurement. Notwithstanding the foregoing, after
termination of Employee's employment for any reason, Employee shall be permitted
to work for any business that owns and operates independent power generation
projects or that provides services to competitors or customers of the Covanta
Group, so long as such business, as determined in the good faith judgment of the
Board, does not compete with the Covanta Group.
2.Covenant Not to Solicit Employees. During the period Employee is employed by
the Company or its Subsidiary and for a period following Employee's termination
of employment for any reason, equal to [INSERT PERIOD] , Employee agrees and
covenants that he shall not, for any reason, directly or indirectly, employ,
solicit or endeavor to entice away from the Covanta Group (whether for
Employee's own benefit or on behalf of another person or entity), or facilitate
the solicitation, employment or enticement of, any employee of the Covanta Group
to work for Employee, any affiliate of Employee or any competitor of the Covanta
Group, nor shall Employee otherwise attempt to interfere (to the Covanta Group's
detriment) in the relationship between the Covanta Group and any such employees.
3.Covenant Not to Solicit Customers. During the period Employee is employed by
Company or its Subsidiary and for a period following Employee's termination of
employment for any reason, equal to [INSERT PERIOD] , Employee agrees and
covenants that he shall not, directly or indirectly, in any form or manner,
contact, solicit, or facilitate the contacting or solicitation of, any Customer
of the Covanta Group for the purpose of competing with the Business. For
purposes of this Agreement, the term “Customer” shall mean and refer to each
person, entity, municipality or other governmental entity that has a contract
with or is actively being solicited by the Covanta Group to deliver waste,
receive services or purchase energy during the period of Employee's employment
hereunder.
4.Covenant of Confidentiality. At any time during the term of Employee's
employment with the Company or its Subsidiary (pursuant to this Agreement or
otherwise), and for a period of five (5) years after the termination of
Employee's employment with the Company or its Subsidiary, as applicable, for any
reason, Employee shall not, except in furtherance of the Business of the Covanta
Group or otherwise with the prior authorization of the Company, in any form or
manner, directly or indirectly, divulge, disclose or communicate to any person,
entity, firm, corporation or any other third party (other than in the course of
Employee's employment), or utilize for Employee's personal benefit or for the
benefit of any competitor of the Covanta Group any Confidential Information. For
purposes of this Agreement, “Confidential Information” shall mean, but shall not
be limited to, any technical or non-technical data, formulae, patterns,
compilations, programs, devices, methods, techniques, drawings, designs,
processes, procedures, improvements, models or manuals of any member of the
Covanta Group or which are licensed by any member of the Covanta Group, any
financial data or lists of actual or potential customers or suppliers (including
contacts thereat) of the Covanta Group, and any information regarding the
contracts, marketing and sales plans, which is not generally known to the public
through legitimate origins of the Covanta Group. The parties hereto each
acknowledge and agree that such Confidential Information is extremely valuable
to the Covanta Group and shall be deemed to be a “trade secret.” In the event
that any part of the Confidential Information becomes generally known to the
public through legitimate origins (other than by the breach of this Agreement by
Employee or by misappropriation), or is required to be disclosed by legal,
administrative or judicial process (provided that Employee has provided to the
Company and Covanta reasonable prior notice of such request and the Company or
Covanta has had a reasonable opportunity, at its expense, to dispute, defend or
limit such request for the Confidential Information), that part of the
Confidential

--------------------------------------------------------------------------------

Information shall no longer be deemed Confidential Information for purposes of
this Agreement, but Employee shall continue to be bound by the terms of this
Agreement as to all other Confidential Information.
5.Return of Property. Upon termination of Employee's employment for any reason,
Employee shall promptly deliver to the Company or its Subsidiary all
correspondence, drawings, blueprints, manuals, letters, notes, notebooks,
reports, programs, plans, proposals, financial documents or any other documents,
including all copies in any form or media, concerning the Covanta Group's
Customers, marketing strategies, products or processes which contain any
Confidential Information.
6.Assignment of Inventions. Any and all writings, inventions, improvements,
processes, procedures and/or techniques now or hereafter acquired, made,
conceived, discovered or developed by Employee, either solely or jointly with
any other person or persons, whether or not during working hours and whether or
not at the request or upon the suggestion of the Company or its Subsidiaries or
Affiliates, which relate to or are useful in connection with any business now or
hereafter carried on or contemplated by the Covanta Group, including
developments or expansions of its present fields of operations, shall be the
sole and exclusive property of the Company or its Subsidiaries or Affiliates, as
applicable. Employee shall make full disclosure to the Company or its
Subsidiaries or Affiliates of all such writings, inventions, improvements,
processes, procedures, techniques, or any other material of a proprietary
nature, including, without limitation, any ideas, inventions, discoveries,
improvements, developments, designs, methods, systems, computer programs, trade
secrets or other intellectual property whether or not patentable or
copyrightable and specifically including, but not limited to, copyright and mask
works, formulae, compositions, products, processes, apparatus, and new uses of
existing materials or machines (collectively, “Inventions”), made, conceived or
first reduced to practice by Employee solely or jointly with others while
employed by the Company or its Subsidiaries or Affiliates and which relate to or
result from the actual or anticipated business, work, research or investigation
of the Covanta Group or which are suggested by or result from any task assigned
to or performed by Employee for the Covanta Group; and Employee shall do
everything necessary or desirable to vest the absolute title thereto in the
Company or its Subsidiaries or Affiliates, as applicable. Employee shall write
and prepare all descriptions, specifications and procedures regarding the
Inventions as may be required by the Company or its Subsidiaries or Affiliates
to protect the Company's or its Subsidiaries' or Affiliates' rights in and to
the Inventions, and otherwise aid and assist the Company or its Subsidiaries or
Affiliates so that the Company or its Subsidiaries or Affiliates can prepare and
present applications for copyright or letters patent therefor and can secure
such copyright or letters patent wherever possible, as well as reissues,
renewals, and extensions thereof, and can obtain the record title to such
copyright or patents so that the Company or its Subsidiaries or Affiliates shall
be the sole and absolute owner thereof in all countries in which it may desire
to have copyright or patent protection. Employee will, at the Company's or its
Subsidiaries or Affiliates request, execute any and all assignment, patent or
copyright forms and the like, deemed reasonably necessary by the Company or its
Subsidiaries or Affiliates. The Company's or its Subsidiaries' or Affiliates'
rights hereunder shall not be limited to this country but shall extend to any
country in the world and shall attach to each Invention notwithstanding that it
is perfected, improved, reduced to specific form or used after termination
Employee's employment. Employee agrees to lend such assistance as he or she may
be able, at the Company's or its Subsidiaries' or Affiliates' request in
connection with any proceedings relating to such letters of patent, trade
secrets, copyright or application thereof, as may be determined by the Company
or its Subsidiaries or Affiliates to be reasonably necessary. The Company, in
its sole discretion, may agree to pay Employee a reasonable fee to defray any
costs or time incurred by Employee in providing such assistance. Employee shall
not be entitled to any additional or special compensation or reimbursement
regarding any and all such writings, inventions, improvements, processes,
procedures and techniques.
7.Equitable Remedies. In the event that Employee breaches any of the terms or
conditions set forth in this Section 10 (collectively, the “Restrictive
Covenants”), Employee stipulates that such breach will result in immediate and
irreparable harm to the business and goodwill of the Company and/or its
Subsidiaries or Affiliates and that damages, if any, and remedies at law for
such breach would be

--------------------------------------------------------------------------------

inadequate. The Company and/or its Subsidiaries or Affiliates shall therefore be
entitled to seek for and receive from any court of competent jurisdiction a
temporary restraining order, preliminary and permanent injunctive relief and/or
an order for specific performance to protect its rights and interests and to
restrain any violation of this Agreement and such further relief as the court
may deem just and proper, each without the necessity of posting bond. Following
judgment or other final determination by such court, the non-prevailing party in
such proceeding shall pay the costs and expenses (including court costs and
reasonable attorneys' fees) of the prevailing party. The Company and/or its
Subsidiaries or Affiliates may elect to seek such remedies at its sole
discretion on a case by case basis. Failure to seek any or all remedies in one
case shall not restrict the Company and/or its Subsidiaries or Affiliates from
seeking any remedies in another situation. Such action by the Company and/or its
Subsidiaries or Affiliates shall not constitute a waiver of any of its rights.
8.Continuing Obligation. During Employee's employment and upon termination of
Employee's employment for any reason the obligations, duties and liabilities of
Employee pursuant to Sections 10.1, 10.2, 10.3, 10.4 and 10.5 of this Agreement
are continuing, and for the periods set forth in such provisions hereof are
absolute and unconditional, and shall survive and remain in full force and
effect as provided in each such Section. Notwithstanding anything else contained
in this Agreement to the contrary, the parties hereto agree that in the event,
and at the moment, Employee breaches any of the terms, duties or obligations
contained in Sections 10.1, 10.2, 10.3, and 10.4 of this Agreement, all of the
TSR Performance Shares which have not vested, will immediately be cancelled and
forfeited.
11.Construction.
1.No Rights of Stockholder. The TSR Award (including any associated TSR
Performance Shares) represents the Company's unfunded and unsecured promise to
issue shares of Common Stock, at a future date subject to the terms of this
Agreement. Employee has no rights with respect to the TSR Award other than
rights of a general creditor of the Company. Employee shall not have any of the
rights of a stockholder with respect to unvested TSR Performance Shares.
2.Successors. This Agreement and all the terms and provisions hereof shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective legal representatives, heirs and successors, except as expressly
herein otherwise provided.
3.Entire Agreement; Modification. This Agreement contains the entire
understanding between the parties with respect to the matters referred to
herein. Subject to Section 16(c) of the Plan, this Agreement may be amended by
the Board or Compensation Committee at any time.
4.Capitalized Terms; Headings; Pronouns; Governing Law. Capitalized terms used
and not otherwise defined herein are deemed to have the same meanings as in the
Plan. The descriptive headings of the respective sections and subsections of
this Agreement are inserted for convenience of reference only and shall not be
deemed to modify or construe the provisions which follow them. Any use of any
masculine pronoun shall include the feminine and vice-versa and any use of a
singular, the plural and vice-versa, as the context and facts may require. The
construction and interpretation of this Agreement shall be governed in all
respects by the laws of the State of Delaware.
5.Notices. Each notice relating to this Agreement shall be in writing and shall
be sufficiently given if delivered by registered or certified mail, or by a
nationally recognized overnight delivery service, with postage or charges
prepaid, to the address hereinafter provided in this Section 11.5. Any such
notice or communication given by first-class mail shall be deemed to have been
given two business days after the date so mailed, and such notice or
communication given by overnight delivery service shall be deemed to have been
given one business day after the date so sent, provided such notice or
communication arrives at its destination. Each notice to the Company shall be
addressed to it at its offices at 445 South Street, Morristown, New Jersey 07960
(attention: Chief Financial Officer), with a copy to the Secretary of the
Company or to such other designee of the Company. Each notice to Employee shall
be addressed to Employee at Employee's address shown below.

--------------------------------------------------------------------------------

6.Severability.    Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement or the application thereof to any party
or circumstance shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the minimal extent of such provision or the
remaining provisions of this Agreement or the application of such provision to
other parties or circumstances.
7.Counterpart Execution. This Agreement may be executed in counterparts, each of
which shall constitute an original and all of which, when taken together, shall
constitute the entire document.
 
COVANTA HOLDING CORPORATION
By:
Title
Accepted this day of
, 201_.
 
EMPLOYEE'S ADDRESS: