Exhibit 10.14
 
Summary of the Covanta Holding Corporation Cash Bonus Program
 
Administration.  With respect to senior management of Covanta Holding
Corporation and its subsidiaries (collectively, the “Company”), the Cash Bonus
Program is administered by the Compensation Committee (the “Committee”) of the
Board of Directors of the Company.
 
Purpose.  The annual cash bonus is a non-equity incentive-based compensation
component designed such that a significant portion of a named executive
officer’s annual compensation will be at risk and will vary (up or down) in any
given year based upon the Company’s performance and the performance of each such
named executive officer. One half of the annual cash bonus is determined by the
Company’s actual financial performance compared to pre-determined financial
performance measures and the other half of the annual cash bonus is based on the
individual performance of the named executive officer compared to various
individual performance measures specific to such named executive officer.
 
Application of Company Performance Measures:  The Committee measures financial
performance results with a percentage that is calculated between the stretch
goal and the minimum goal. The Compensation Committee also sets a “target” bonus
level for each of the named executive officers which is a stated percentage of
such officer’s base salary. Based on the level of performance, bonuses are
payable as follows:
 

  •  if financial performance is at or below the “minimum” level, then no cash
awards would be paid;     •  if financial performance is at the “threshold”
level, then a cash award at 65% of the “target bonus” level would be paid;    
•  if financial performance is at the “target” level, then a cash award at 100%
of “target” level would be paid; and     •  if financial performance is at or
above the “stretch” level, then a cash award at 200% of the “target” level would
be paid.

 
Between the various levels, specific incentive cash award percentages are
calculated as follows:
 

  •  results between the “minimum” goal and an interim “threshold” goal are
prorated linearly with 0% paid at the minimum goal and 65% paid at the
“threshold” goal;     •  results between the “threshold” goal and “target” goal
are prorated linearly with 65% of “target” cash awards paid at the “threshold”
goal and 100% of the “target” cash awards paid at the “target” goal; and     • 
results above the “target” goal are prorated linearly with 100% paid at the
“target” goal and 200% paid at or above the “stretch” goal.

 
Financial results are capped at 200% of target levels for all named executive
officers.
 
In order to assure that the intents and purposes of the compensation plans,
including the annual bonuses, are effectuated, the Committee retains the
discretion to make adjustments to the results for any given year. Reasons for
adjustments could include removing the effects of unanticipated events, such as
unbudgeted accounting changes, project restructurings, balance sheet adjustments
and similar items which unless excluded would produce unintended consequences
that are inconsistent with the intent and purpose of aligning the interests of
named executive officers with those of our stockholders and to provide financial
incentives to named executive officers to effectively implement our business
plan and goals. In addition, the Committee retains the authority and discretion
to increase or decrease the size of any performance-based award or payout.
 
Individual Performance Measures.  The second component of the annual cash bonus
for executive officers is their personal satisfaction of various individual
performance measures (“Individual Performance Measures.”). These Individual
Performance Measures, which are tied to the specific job and responsibilities of
each named executive officer, are set on a prospective basis in February of each
year by the Committee as part of its annual compensation process and
communicated to each of the named executive officers. Although not directly tied
to the Covanta Performance Measures, if the Company did not meet the “minimum”
level of performance under the Covanta Performance Measures, then the bonus
award pool would not have been funded and no cash bonuses would be payable for
satisfaction of Individual Performance Measures.