exv10w1



 






EXHIBIT 10.1









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).



 









 





     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



 









 







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 	 



 









 






	 	 	 	 	 



Accepted and agreed to this




5th day of April, 2006.




/s/ Craig D. Abolt

Craig D. Abolt