EXHIBIT 10.1
(COVANTA LOGO) [c04159c04159001.gif]
Covanta Holding Corporation
April 5, 2006
Via Personal Hand Delivery
Craig D. Abolt
1003 Dogwood Trail
Franklin Lakes, NJ 07417
     Re: Transition and Separation Agreement
Dear Craig:
     This transition and separation agreement (the “Agreement”) will confirm our
mutual understanding and agreements regarding your separation, individually and
collectively, from Covanta Holding Corporation (the “Parent Company”), Covanta
Energy Corporation (the “Operating Company”) and Covanta Projects, Inc. (the
“Employer”). For purposes of this Agreement, the Employer, the Operating
Company, and the Parent Company are referred to collectively as the “Companies.”
Unless otherwise defined herein, capitalized terms shall have the meaning
ascribed to them in that certain Employment Agreement dated October 5, 2004 by
and between you and the Companies (the “Employment Agreement”).
     In order to effectuate a smooth transition and separation of your
employment by the Companies, you and the Companies, for good and valuable
consideration, the sufficiency of which is hereby agreed to acknowledged, you
and the Companies hereby agree as follows:
Section 1.
Transition and Termination of Employment
     1.1 Pursuant to the mutual agreement of you and the Companies to provide
for a separation of employment and transition period, you and the Companies
agree that for purposes of severance benefits and other continuing obligations
under the Employment Agreement, your employment by the Companies shall be deemed
to be terminated pursuant to Section 6.2 of the Employment Agreement as of the
Termination Date (as hereinafter defined).

 

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     1.2 From the date hereof through and including the Termination Date, you
agree that you shall continue to perform the services required or reasonably
requested under Section 2.1 of the Employment Agreement and to assist in the
search for and transition of the Companies employment of a successor Chief
Financial Officer. Notwithstanding the foregoing or anything to the contrary in
Section 2 of the Employment Agreement, you and the Companies acknowledge and
agree that without constituting a breach of the Employment Agreement (a) you
shall be entitled to undertake a search for new employment and (b) the Companies
shall conduct a search for a successor Chief Financial Officer.
     1.3 The effective date of your separation from all positions and
employment, including without limitation all positions held as an officer or
director, with the Companies (and each of their respective affiliates and
subsidiaries) shall be the earlier of (i) the appointment of a successor Chief
Financial Officer by the Parent Company, or (ii) September 30, 2006 (the
“Termination Date”).
     1.4 You shall be entitled to the rights provided under Section 6.5 of the
Employment Agreement effective as of the date of this Agreement. All other
rights, benefits and obligations shall be as provided under the Employment
Agreement.’
     1.5 Pursuant to Section 6.3(a) of Employment Agreement, the Companies shall
pay to you 50% of the aggregate amount due to you on the Termination Date.
Notwithstanding the timing of payments under Section 6.3(b) of the Employment
Agreement, you and the Companies agree that the remaining 50% of the amounts due
to you thereunder shall be paid pro rata on a monthly basis over the duration of
the Post-Employment Period; provided, however, that in order to address
uncertainties with respect to certain deferred compensation arrangements under
the recently enacted section 409A of the Internal Revenue Code of 1986, as
amended, the Companies shall pay to you a lump sum amount of all amounts then
remaining due to you thereunder on March 15, 2007. For purposes of this
Agreement, “pro rata on a monthly basis” shall mean a pro rata amount calculated
on the basis of 24 months.
Section 2.
Release and Waiver
     2.1 Pursuant to Section 6.3 of the Employment Agreement, as a condition to
the payment by the Companies of any amounts or the continuation or provision of
any benefits, as of the Termination Date you shall execute and deliver to the
Companies a “Separation and General Release Agreement” substantially in the form
attached as Exhibit C to the Employment Agreement, to be modified as necessary
and consistent with the terms of this Agreement.
Section 3.
Miscellaneous
     3.1 This Agreement and the Employment Agreement contain the entire
understanding among the parties hereto with respect to the subject matter
hereof. This Agreement may be amended or canceled only by mutual agreement of
all parties hereto in writing. Except as permitted or provided under
Section 11.2 of the Employment Agreement, so long as you live, no

 

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person, other than the parties hereto, shall have any rights under or interest
in this Agreement or the subject matter hereof.
     3.2 Except to the extent they may have been supplemented or modified by way
of this Agreement, the terms of your Employment Agreement, including, without
limitation, the obligations and provisions set forth in Sections 7, 8, 9 and 10
thereof, and any other agreements incorporated by reference therein (or
otherwise agreed to in writing between you and the Companies) shall remain in
full force and effect and shall be governed by the current terms thereof,
respectively.
     3.3 This Agreement may be executed in any number of counterparts, each of
which shall constitute an original and all of which taken together shall
constitute one and the same instrument.
     3.4 This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New Jersey without regard to conflicts of laws
provisions thereof.

            Very truly yours,

PARENT COMPANY:

Covanta Holding Corporation
      By:   /s/ Anthony J. Orlando         Anthony J. Orlando, President and    
    Chief Executive Officer     

            OPERATING COMPANY:

Covanta Energy Corporation.
      By:   /s/ Anthony J. Orlando         Anthony J. Orlando, President and    
    Chief Executive Officer     

            EMPLOYER:

Covanta Projects, Inc.
      By:   /s/ Anthony J. Orlando         Anthony J. Orlando, President and    
    Chief Executive Officer   

 

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Accepted and agreed to this
5th day of April, 2006.
/s/ Craig D. Abolt
Craig D. Abolt