Exhibit 10.37
 
LOGO [g88206g85t88.jpg]
     
1388 N. Tech Boulevard
Gilbert, AZ 85233
480.556.5555 Tel
480.315.3745 Fax
www.CatalyticaEnergy.com

 

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

 
Ricardo Levy
1207 Windimer Drive
Los Altos, CA 94024
 
June 12, 2002

 
Dear Ricardo,
 
We are delighted that you have agreed to serve as President and CEO of
Catalytica Energy Systems, Inc. effective June 1, 2002. This letter confirms the
details of your employment in this position as submitted to the Board of
Directors. Your compensation includes base salary, annual bonus and stock
options. Specifics are listed below.
 
Salary
Your salary will be $22,084 per month, which annualizes to $265,000. You will
receive semi-monthly paychecks consistent with our payroll cycle.
 
Bonus
You will be eligible for an annual bonus at a target of 35% of your salary. This
bonus is subject to Compensation Committee review and approval at the end of
your interim assignment.
 
Stock Options
As part of your employment agreement you will be granted stock options in the
amount of 30,000 shares of Catalytica Energy Systems, Inc. These options will be
granted after Board approval and will be priced on the date they are approved.
They will be subject to the standard 4-year vesting schedule.
 
Benefits
Effective upon your date of hire, you and your eligible dependents will be
eligible for coverage under the Catalytica Energy Systems, Inc. health (medical,
dental, and prescription drugs), long term disability, and life insurance plans.
On July 1, 2002 you will be able to participate in the Employee Stock Purchase
Plan at a discounted price.
 
On the first of the month following three months of employment, you will be
eligible to participate in the 401(k) retirement plan. The 401(k) plan includes
a 60% match (up to 6% of your eligible deferral compensation) and immediate
vesting of all company contributions.
 
I look forward to working with you as a key member of the Catalytica Energy
Systems Leadership Team. Please indicate your agreement to these employment
considerations by signing below and returning the original to me.
 
Sincerely yours,
/s/    ALESIA MARTIN

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

Alesia Martin
Vice President, Human Resources

 
I accept the compensation terms of employment described in this letter.
 
/s/    RICARDO B. LEVY

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

  
June 19, 2002

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

Ricardo B. Levy
  
Date