COVANTA HOLDING CORP (Form: 8-K, Received: 10/29/2020 16:24:51)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________

FORM 8-K

________________________________________________________

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): October 29, 2020

________________________________________________________

COVANTA HOLDING CORPORATION

(Exact name of Registrant as Specified in Its Charter)

________________________________________________________

Delaware

1-06732

95-6021257

(State or Other Jurisdiction of
Incorporation)

(Commission
File Number)

(I.R.S. Employer
Identification No.)

445 South Street

Morristown

New Jersey

7960

(Address of principal executive offices)

(Zip Code)

(862) 345-5000

(Registrant’s telephone number, including area code)

________________________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12(b))


☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.10 par value per share	CVA	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Item 5.02. Appointment of Certain Officers; Election of Directors; Departure of Directors or Certain Officers; Compensatory Arrangements of Certain Officers.

Departure of Stephen J. Jones as Chief Executive Officer; Appointment of Michael W. Ranger as President and Chief Executive Officer.

Stephen J. Jones has stepped down as the Chief Executive Officer of Covanta Holding Corporation (together with its subsidiaries, the “Company”) and resigned as a member of the Board of Directors of the Company, effective as of October 29, 2020.

On October 29, 2020, the Board of Directors of the Company appointed Michael Ranger, currently a member of the Board of Directors, to the position of President and Chief Executive Officer, effective as of October 29, 2020. Upon his appointment as President and Chief Executive Officer, Mr. Ranger stepped down from his position as Chair of the Company’s Audit Committee.

Mr. Ranger was appointed to the Board in September 2016 and has served as Chair of the Audit Committee and a member of the Finance Committee. From 2004 until 2020, Mr. Ranger served as co-founder and senior managing director of Diamond Castle Holdings, LLC, a private equity investment firm focusing on energy and power, healthcare, financial services and other diversified industries. Before founding Diamond Castle Holdings in 2004, he was co-chairman of DLJ Merchant Banking Global Energy Partners. Previously, he was an investment banker in the energy and power sector for 20 years, most recently as head of the Domestic Power Group at Credit-Suisse First Boston from 2000 to 2001 and prior to that as group head of Global Energy & Power at DLJ from 1990 to 2000. Before joining Donaldson, Lufkin & Jenrette, he was a senior vice president in the Energy & Utility Group at Drexel Burnham Lambert and was a member of the Utility Banking Group at Bankers Trust. Mr. Ranger is a former member of the board of directors of TXU Corp., American Ref-Fuel, Inc., Catamount Energy Corporation, Bonte Media Group, Beacon Behavioral Health and KDC Solar, LLC and is currently lead independent director on the board at Consolidated Edison, Inc.

Mr. Ranger's extensive experience in investment and finance, including board positions at both public and private companies in the waste-to-energy and broader energy sectors, bring valuable insight and perspective to the Board and management with respect to growth strategies, energy markets, and governance and makes him well-suited to serve as President and Chief Executive Officer.

Mr. Ranger does not have any family relationships with any of the Company’s directors or executive officers and is not a party to any transactions listed in Item 404(a) of Regulation S-K.

Appointment of Derek Veenhof as Executive Vice President and Chief Operating Officer.

On October 29, 2020, the Board of Directors of the Company appointed Derek Veenhof as Executive Vice President and Chief Operating Officer, effective immediately. Derek W. Veenhof has served as our Executive Vice President, Asset Management, since November 2013.

Compensation Arrangements and Adjustments to Compensation Arrangements for Certain Named Executive Officers; Stock Option Grants to Certain Named Executive Officers.

On October 29, 2020, in connection with his appointment as President and Chief Executive Officer, the Board approved an annual base salary for Mr. Ranger of $1.00, and awarded him 1,000,000 options to purchase shares of the Company’s common stock (“Stock Options”) under the 2014 Equity Award Plan for Employees and Officers (the “Plan”) at an exercise price equal to the closing price of our common stock on the grant date. In connection with Mr. Veenhof’s expanded responsibilities, Mr. Veenhof’s annual base compensation was increased to $500,000, his non-equity incentive compensation target for 2020 was increased from 70% to 80% of his base salary and he was awarded 250,000 Stock Options.

In addition, on October 29, 2020, the Board also granted Stock Options under the Plan to the following named executive officers of the Company:

Bradford J. Helgeson: 250,000

Timothy J. Simpson: 200,000

Such options will vest and become exercisable into shares of common stock on a pro rata basis over a period of three years with vesting on October 29, 2021, October 29, 2022 and October 29, 2023, based upon the continued employment of such individuals, except as otherwise expressly provided in applicable stock option agreements, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K.

Item 7.01. Regulation FD Disclosure.

On October 29, 2020, the Company issued a press release announcing, among other things, matters reference in Item 5.02 above. A copy of the press release is attached as Exhibit 99.1 and is incorporated herein by reference.


Item 9.01.			Financial Statements and Exhibits.

(d) Exhibits


Exhibit No.						Exhibit

10.1						Non-Qualified Stock Option Agreement

99.1						Press Release, dated October 29, 2020

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: October 29, 2020

COVANTA HOLDING CORPORATION

(Registrant)



By:						/s/ Timothy J. Simpson
Name:						Timothy J. Simpson
Title:						Executive Vice President, Chief Administrative Officer

COVANTA HOLDING CORPORATION

EXHIBIT INDEX


Exhibit No.						Exhibit

10.1						Non-Qualified Stock Option Agreement

99.1						Press Release, dated October 29, 2020

104						Cover Page Interactive Data File - (formatted as Inline XBRL and contained in Exhibit 101)

Exhibit 10.1

COVANTA HOLDING CORPORATION

NON-QUALIFIED STOCK OPTION AGREEMENT

FOR EMPLOYEES AND OFFICERS

THIS NON-QUALIFIED STOCK OPTION AGREEMENT (the “Agreement”), is made as of this day of October ___, 2020 (the “Grant Date”) between Covanta Holding Corporation, a Delaware corporation (the “Company”), and ___________________________ (the “Recipient”). Capitalized terms used herein that are not otherwise defined shall have the meaning ascribed to them in the Covanta Holding Corporation 2014 Equity Award Plan (the “Plan”).

WITNESSETH:

WHEREAS, the Company desires to provide the Recipient with the opportunity to purchase shares of its common stock, par value $0.10 per share (“Common Stock”), in accordance with the terms of the Plan; and

WHEREAS, the Recipient wishes to acquire the right to purchase shares of Common Stock granted hereby.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter contained, the parties hereto mutually covenant and agree as follows:

1.Grant of Non-Qualified Stock Option. The Company hereby grants to the Recipient a Non-Qualified Stock Option to purchase all or part of an aggregate of _________________ (___________) shares of Common Stock, on the terms and conditions set forth in the Plan, subject to the vesting, exercise and other requirements set forth in this Agreement, to the extent not inconsistent with the Plan (the “Option”). The Option is not intended to qualify as an incentive stock option, as defined in and subject to Section 422 of the Internal Revenue Code (“Code”).

2.Purchase Price. The per share purchase price of the shares of Common Stock issuable upon exercise of the Option shall be ___________________ ($__.__), which shall be not less than 100% of the Fair Market Value per share (as determined by the Committee in accordance with the Plan) on the Grant Date.

3.Term. The term of the Option shall expire as of the earliest of the following:

(a)With respect to any portion of the Option that vests in accordance with either Section 4(a) or Section 4(b) below, the date that is three (3) years from the date on which such portion vests;

(b)the date the Recipient’s relationship as a Service Provider to the Company, or any Subsidiary or Affiliate, is terminated for Cause; or

(c)the date that is twelve (12) months after the Recipient’s relationship as a Service Provider to the Company, or any Subsidiary or Affiliate, is terminated (including by reason of the Recipient’s death or Disability) other than for Cause;

provided, however, that in the case of the expiration of the Option pursuant to Section 3(c) above, if the exercise of the Option on the last business day prior to the expiration date is prevented by any requirement of federal, state or foreign law with respect to securities or any other applicable law, regulation or requirement of any stock exchange or market system upon which the shares of Common Stock are listed or traded, the Option shall remain exercisable until thirty (30) days after the date the Recipient is notified by the Company that the Option is exercisable, but in any event no later than the applicable expiration date set forth in Section 3(a).

In the event of the termination of the Recipient’s relationship as a Service Provider to the Company (or any Subsidiary or Affiliate) due to any reason other than Cause, the Recipient shall forfeit all rights hereunder with respect to any non-vested portion of the Option as of the date of such termination; provided, however, that in the event Recipient’s relationship as a Service Provider to the Company (or any Subsidiary or Affiliate) is terminated due to retirement at the age of 65 or older or with a sum of age (minimum age requirement is 55 years) and years of service with the Company on the date of retirement equal to at least 75, then the non-vested portion of the Option shall continue to vest in accordance with Section 4 hereof. In the event of termination of the Recipient’s relationship as a Service Provider to the Company (or any Subsidiary or Affiliate) for Cause, the Recipient shall forfeit all rights hereunder with respect to any vested or non-vested portions of the Option as of the date of such termination.

4.Vesting.

(a)Subject to any forfeiture provisions in this Agreement or in the Plan, and unless expressly provided to the contrary hereunder, the Recipient shall become vested in the Option, to the extent the Recipient is engaged as a Service Provider to the Company (or any Subsidiary or Affiliate), as of each applicable vesting date, as of the close of business on the applicable vesting date shown below:


Applicable Vesting Date			Portion of the Option Vesting on the Applicable Vesting Date
The first anniversary of the Grant Date			1/3 of the shares covered by the Option
The second anniversary of the Grant Date			1/3 of the shares covered by the Option
The third anniversary of the Grant Date			1/3 of the shares covered by the Option

(b)Notwithstanding anything to the contrary in this Section 4, (i) in the event of a Change in Control or (ii) in the event of a sale of fifty percent (50%) or more of the fair market value of assets of the Company, including for example, without limitation, the sale of the Company’s U.S. Waste-to-Energy business, in either case while the Recipient is engaged as a Service Provider to the Company (or any Subsidiary or Affiliate), the Option will fully vest.

5.Non-Transferability. The Option may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than (i) by will or the laws of descent and distribution or (ii) pursuant to a qualified domestic relations order (as defined in the

Code or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder). The Option may be exercised during the lifetime of the Recipient only by the Recipient, or by the guardian or legal representative of the Recipient, or by an alternate payee pursuant to a qualified domestic relations order. Any attempt to assign, pledge or otherwise transfer the Option, or any right or privilege conferred thereby, contrary to the Plan, or the sale or levy or similar process upon the rights and privileges conferred hereby shall be void.

6.Method of Exercising Option.

(a)Subject to the terms and conditions of this Agreement, the Option may be exercised, to the extent it is vested, by written notice delivered to the Company or its designated representative in the manner and at the address for notices set forth in Section 12(d) hereof. Such notice shall state that the Option is being exercised thereby and shall specify the number of shares of Common Stock involved.

(b)The Option shall be deemed exercised when the Company receives: a properly executed written notice of exercise signed by the person entitled to exercise the Option, and full payment of the purchase price for the shares of Common Stock with respect to which the Option is exercised. Acceptable forms of consideration for payment of the purchase price include:

a.cash (in the form of a certified or bank check or such other instrument as the Company may accept);

b.other shares of Common Stock owned on the date of exercise of the Option by the Recipient based on the Fair Market Value of the Common Stock on the date the Option is exercised;

c.any combination of (i) and (ii) above;

d.by delivery of a properly executed exercise notice together with such other documentation as the Committee and a qualified broker, if applicable, shall require to effect an exercise of the Option, and delivery to the Company of the proceeds required to pay the purchase price; or

e.by requesting that the Company withhold such number of shares of Common Stock then issuable upon exercise of the Option as will have a Fair Market Value equal to the purchase price of the Shares being acquired upon the exercise of the Option.

i.The Company shall issue and deliver, in the name of the person exercising the Option, a certificate representing such shares of Common Stock as soon as practicable after notice and payment are received and the exercise is approved.

ii.The Option may be exercised in accordance with the terms of the Plan and this Agreement with respect to any whole number of shares subject to the Option, but in no event

may an Option be exercised as to fewer than one hundred (100) shares at any one time, or the remaining shares covered by the Option if less than two hundred (200).

iii.The Recipient shall have no rights of a stockholder with respect to shares of Common Stock to be acquired by the exercise of the Option until the date of issuance of a certificate or certificates representing such shares. Except as otherwise expressly provided in the Plan, no adjustment shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued. All shares of Common Stock purchased upon the exercise of the Option as provided herein shall be fully paid and non-assessable.

iv.The Recipient agrees that no later than the date as of which an amount first becomes includible in Recipient’s gross income for federal income tax purposes with respect to the Option, the Recipient shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such amount. Withholding obligations may be settled with Common Stock, including Common Stock that is acquired upon exercise of the Option. 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 the Recipient.

7.Adjustment upon Changes in Capitalization. Subject to any required action by the stockholders of the Company and the terms of the Plan, if, during the terms of this Agreement, there shall be any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company (as defined in Section 12 of the Plan), the Committee may, in its sole discretion, make an appropriate and equitable adjustment in the aggregate number, kind and purchase price of shares subject to this Option; provided, however, that in no event shall the purchase price be adjusted below the par value of a share of Common Stock, nor shall any fraction of a share be issued upon the exercise of the Option.

8.Rights of Recipient. In no event shall the granting of the Option or the other provisions hereof or the acceptance of the Option by the Recipient interfere with or limit in any way the right of the Company, an Affiliate or Subsidiary to terminate the Recipient’s employment at any time, nor confer upon the Recipient any right to continue in the employ of the Company, an Affiliate or Subsidiary for any period of time or to continue the Recipient’s present or any other rate of compensation.

9.Incorporation of the Plan. Notwithstanding the terms and conditions contained herein, this Agreement shall be subject to and governed by all the terms and conditions of the Plan, which is hereby incorporated by reference. In the event of any discrepancy or inconsistency between the terms and conditions of this Agreement and of the Plan, the terms and conditions of the Plan shall control.

10.Interpretation. The interpretation and construction of any terms or conditions of the Plan, or of this Agreement or other matters related to the Plan by the Committee, shall be final and conclusive.

11.Construction.

v.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.

vi.Entire Agreement; Modification. This Agreement contains the entire understanding between the parties with respect to the matters referred to herein. Subject to Section 15(c) of the Plan, this Agreement may be amended by the Board or the Committee at any time.

vii.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.

viii.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(d). 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 the Recipient shall be addressed to the Recipient at the Recipient’s address shown on the signature page hereof.

ix.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.

x.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.

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its officer thereunto duly authorized, and the Recipient has executed this Agreement all as of the day and year first above written.

COVANTA HOLDING CORPORATION

By:

Its:

RECIPIENT:

RECIPIENT’S ADDRESS:

Exhibit 99.1

Covanta Holding Corporation Initiates Strategic Review to Unlock Shareholder Value, Announces Leadership Transition

Director Michael W. Ranger Appointed President and Chief Executive Officer,

Succeeding Stephen J. Jones

MORRISTOWN, N.J., October 29, 2020 – Covanta Holding Corporation (NYSE: CVA) (the “Company” or “Covanta”) today announced the launch of a comprehensive strategic review of the Company’s operations, growth priorities, and capital structure. The board of directors has appointed Michael Ranger as President and Chief Executive Officer to lead this review and its subsequent execution. Mr. Ranger succeeds Stephen Jones, who is stepping down from his roles at Covanta.

Covanta is a world leader in waste-to-energy, with unparalleled operational capabilities, a portfolio of irreplaceable assets that provide essential services to municipalities and commercial customers, and attractive growth opportunities. Even as the Company’s underlying business continues to perform well, particularly during the pandemic, the board believes that the value of the Company’s assets and potential are not fully reflected in the market today. Therefore, this strategic review is a well-timed opportunity to explore all options to enhance shareholder value, including assessing plans for each of our business lines and geographies. This review will be broad in scope and will be completed in due course.

Sam Zell, Chairman of the Board, said: “We believe that now is the right time to review and refocus our strategy to capitalize most effectively on Covanta’s strengths. Mike brings significant depth of experience in the power and waste-to-energy industries, with specific expertise in driving strategic and structural improvements in infrastructure businesses, and we are fortunate to have him lead this initiative for Covanta.”

Mr. Zell continued: “As our CEO for the past 6 years, Steve positioned the company for future success and on behalf of the board, I want to thank him for his leadership.”

Michael Ranger, newly-appointed Chief Executive Officer, said: “This is an opportunity to step into a company that has significant value creation potential, and I appreciate the board’s confidence. I look forward to working with Covanta’s talented team to unlock this value for our shareholders. The dedication of our employees is crucial to our shared success, and the strong long-term relationships with clients and host communities will continue to be one of the cornerstones of our business.”

Mr. Ranger continued: “We have already begun to re-align the management team in order to sharpen our focus on key priorities. Derek Veenhof will lead our core domestic waste-to-energy business as Chief Operating Officer, with responsibility for commercial activities, facility operations and asset management. Further, I am pleased that Owen Michaelson, a Covanta director since 2018, will be joining the team in January as President of Covanta Europe. Owen brings his three decades of experience in development and the waste industry in the UK to our growing business in the UK and Ireland.”

Conference Call Information

Covanta will host its previously scheduled conference call at 8:30 AM Eastern Daylight Time tomorrow (Friday October 30, 2020) where it will discuss third quarter 2020 results as well as this update. The conference call will be attended by Sam Zell, Chairman of the Board, Michael Ranger, President and CEO and Brad Helgeson, CFO.

The conference call will begin with prepared remarks, which will be followed by a question and answer session. To participate on the live call, please dial 1-888-317-6003 (US) or 1-412-317-6061 (international) approximately 15 minutes prior to the scheduled start of the call and enter the passcode 0066556. The conference call will also be webcast live from the Investor Relations section of the Company’s website. A presentation will be made available during the call and will be found in the Investor Relations section of the Covanta website at www.covanta.com.

An archived webcast will be available two hours after the end of the conference call and can be accessed through the Investor Relations section of the Covanta website at www.covanta.com.

About Covanta

Covanta is a world leader in providing sustainable waste and energy solutions. Annually, Covanta’s modern Waste-to-Energy facilities safely convert approximately 21 million tons of waste from municipalities and businesses into clean, renewable electricity to power one million homes and recycle over 500,000 tons of metal. Through a vast network of treatment and recycling facilities, Covanta also provides comprehensive industrial material management services to companies seeking solutions to some of today’s most complex environmental challenges. For more information, visit covanta.com.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this press release may constitute "forward-looking" statements as defined in Section 27A of the Securities Act of 1933 (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), the Private Securities Litigation Reform Act of 1995 (the "PSLRA") or in releases made by the Securities and Exchange Commission ("SEC"), all as may be amended from time to time. Forward-looking statements are those that address activities, events or developments that we or our management intends, expects, projects, believes or anticipates will or may occur in the future. They are based on management’s assumptions and assessments in light of past experience and trends, current economic and industry conditions, expected future developments and other relevant factors. They are not guarantees of future performance or actual results. Developments and business decisions may differ from those envisaged by our forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of Covanta Holding Corporation, its subsidiaries and joint ventures or industry results, to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. For additional information see the Cautionary Note Regarding Forward-Looking Statements in the Company's 2019 Annual Report on Form 10-K, as well as Part 1, Item 2 and Part II, Item 1A - Risk Factors in the Company’s most recent Quarterly Report on Form 10-Q.

Investor Contact

Dan Mannes

1.862.345.5456

IR@covanta.com

Media Contact

James Regan

1.862.345.5216