Document:

Letter Agreement with Peter J. Tallian  October 17, 2006

 Exhibit 10.17 
 

 
 October 2, 2006 
 Peter J.
Tallian 
 31 Doe Hollow Drive 
 Trumbull, CT 06611 
 Dear Peter: 
 I am delighted to invite you to join our company as its Chief
Financial Officer. In this letter I would like to outline the terms of our offer: 
  

	1.	POSITION: Your position will be Chief Financial Officer of the Company reporting to me as CEO. In this position, you will be responsible for the corporate finance, accounting,
financial planning and analysis and IT functions. Your employment will begin on November 13, 2006. This position is currently based in Wallingford, CT, and will require frequent travel. 

  

	2.	COMPENSATION: Your bi-weekly salary will be $9,615.38 ($250,000 annually). Your first scheduled review will occur in January, 2008. Thereafter, your salary may be adjusted from time
to time in accordance with normal business practice and at the sole discretion of the Company. 

 You will be eligible to
participate in the Company’s annual year-end bonus plan starting with the fiscal year ending December 31, 2006. Bonuses are discretionary based on overall Company performance as well as on the CEO’s evaluation of individual
performance. Your target bonus will be 60% of base pay earned during the year. If any bonus is paid for 2006 performance, it will be pro-rated based on your base earnings during 2006. All bonuses are subject to approval by the Board of Directors of
the Company. 
  

	3.	STOCK OPTIONS AND OTHER LONG-TERM INCENTIVES: The Company will grant you non-statutory options to purchase 100,000 shares of Common Stock of the Company with an exercise price equal
to the fair market value of the Company’s public stock at the date of grant. These options will vest 25% per year from the date of grant. This award is governed by the Company’s 2003 Stock Incentive Plan. To paraphrase this Plan, in
the event of a merger or other acquisition, the board of directors must provide that all outstanding options or other stock based awards under the plan shall be assumed or substituted for by the acquirer. If any of these events constitutes a change
in control, and if within one year of the change in control, the optionee’s employment is terminated without cause or the optionee leaves for good reason, then the assumed or substituted options will be immediately exercisable in full.

 You will be eligible for additional long-term incentives subject to the approval of the Board of Directors of the Company and
based upon individual performance. The framework currently approved for 2007 includes target awards (with actual awards based on individual performance) of Performance Shares with a value of 50% of base pay with a 3 year step vesting, Restricted
Stock with a value of 25% of base with a 3 year cliff vesting and Non-Statutory Stock Options worth 25% of base with a 3 year step vesting. 
  

	4.	BENEFITS: You will be eligible to participate in the Company’s employee benefit programs. Health and Dental Insurance will begin on your first day of employment if you submit
your enrollment forms within your first 30 days of employment. You will be eligible for as much as 3 weeks of vacation per calendar year to be taken at such times as may be approved by the Company. The number of vacation days for which you are
eligible shall accrue at the rate of 0.576 days per bi-weekly pay period that you are employed during such calendar year. Additional detail regarding these and other benefit programs is available in the Company’s Employee Manual which will be
provided to you. 

  

 Distributed Energy Systems Corp. 
 10 Technology Drive, Wallingford, CT 06492  |  Phone:
203-678-2350  |  FAX: 203-678-2284  |  www.distributed-energy.com 

	5.	401(k): You are eligible to participate in our 401(k) Savings Plan immediately upon your joining the company. The Company will match 50% of the first 6% of your voluntary
contributions. 

  

	6.	AGREEMENTS AND EMPLOYMENT ELIGIBILITY: As a condition of employment, you will be required to execute an Assignment of Invention, Non-Disclosure, and Non-Compete Agreement in the
form attached as Exhibit A. Any option or stock issuances in accordance with this letter will be made pursuant to formal option and restricted stock agreements. You will also be required to provide the Company, within three days of your hire date,
with documentation of your eligibility to work in the United States, as required by the Immigration Reform and Control Act of 1986. 

 You represent that you are not bound by any employment contract, restrictive covenant or other restriction preventing you from entering into employment with or carrying out your responsibilities for the Company, or which is in any way
inconsistent with the terms of this letter. 
 You further represent that, to the best of your knowledge, the performance of all of the terms
of your employment with the Company does not and shall not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by you in confidence or in trust prior to your employment with the Company, and that you shall
not knowingly disclose to the Company or induce the Company to use any confidential or proprietary information or material belonging to any previous employer or others. 
  

	7.	EMPLOYMENT RELATIONSHIP: This letter shall not be construed as an agreement, either express or implied, to employ you for any stated term, and shall in no way alter the
Company’s policy of employment at will, under which both you and the Company remain free to terminate the employment relationship, with or without cause, at any time, with or without notice. Similarly, except as defined in Section 8 below,
nothing in this letter shall be construed as an agreement, either express or implied, to pay you any compensation or grant you any benefit beyond the end of your employment with the Company. All company policies are subject to modification, addition
and termination. 

  

	8.	CERTAIN PAYMENTS: If a Change in Control Event, as defined in the Company’s 2003 Stock Incentive Plan (a “Change in Control Event”), occurs and either your employment
is terminated within one year thereafter without Cause, as defined in such plan (“Cause”), or you terminate your employment for Good Reason, as defined in such plan (“Good Reason”), you will be paid six months of salary at your
then current rate of salary. Such amounts shall be paid on a pro-rata basis in accordance with customary payroll practices during the period commencing with your termination and ending on March 15 of the calendar year following termination.

 In consideration of and as a condition to receiving the benefits described in this Section 8, you shall be required to
execute and deliver to the Company a general release in a form satisfactory to the Company. 
  
 Distributed Energy Systems Corp. 
 10 Technology Drive, Wallingford, CT 06492  |  Phone:
203-678-2350  |  FAX: 203-678-2284  |  www.distributed-energy.com 
  

 -2- 

 We feel that this offer is exceptionally attractive and reflects the confidence we have in your ability to guide the
growth of DESC and to achieve a significant enhancement of stockholder value. We very much look forward to having you join us as our Chief Financial Officer. 
 Very truly yours, 
  

			
	DISTRIBUTED ENERGY SYSTEMS CORP.
		
	By:	 	/S/    AMBROSE L.
SCHWALLIE        
		 	 Ambrose L. Schwallie
 Chief Executive Officer

  

							
	Accepted:	 		 	
				
	/S/    PETER J.
TALLIAN        	 		 	 Date:
	 	10/17/06
	Peter J. Tallian	 		 		 	

  

 -3- 
  

 Distributed Energy Systems Corp. 
 10 Technology Drive, Wallingford, CT 06492  |  Phone: 203-678-2350  |  FAX: 203-678-2284  |  www.distributed-energy.comExhibit 10(n)

August 16, 2005
 

Mr. Thomas M. Schultz, Ph.D.
5 Golden Corner Way
Randolph, NJ 07869 

Dear Tom: 

I am pleased to offer you the position of Senior Vice President, Research & Development, reporting to me. The terms of the offer are as follows: 

Base Salary: You will be entitled to an annualized base salary of $225,000. 

Annual Cash Bonus: You will be eligible for an annual cash bonus based on Company performance as established by the Compensation Committee at a target of 65% of base salary. Your bonus for 2005 will be pro-rated based on the number of full months of plan participation, provided you are a participant in the plan for at least three months of the plan year.

Equity Awards: Upon hire, the Company will grant you options to purchase 100,000 shares of Company common stock pursuant to the Company’s 2003 Stock Option Plan and 30,000 shares of restricted stock. These are three-year awards. All future grants will be based on individual performance and subject to Compensation Committee approval. The terms of the option and restricted stock awards are described as follows and will be outlined in a non-qualified stock option agreement and a restricted stock award agreement which will be given to you upon hire. 

Stock Options: The options consist of a time vesting option to purchase 33,333 shares of stock, and a performance vesting option to purchase 66,667 shares of stock. The options will be granted on your hire date at “fair market value”.

The time option vests and becomes exercisable over three years in three equal installments on March 31, 2006, 2007 and 2008.

The performance option vests and becomes exercisable with respect to one-third of the shares covered by the performance option on March 31, 2006, 2007 and 2008, subject to the company’s attainment of 100% of the performance target for the prior fiscal year (this target will be identical to the target for such year under the company’s executive bonus plan), provided that, if the company attains or exceeds 90% of the performance target for a fiscal year, but less than 100% of such target, then 50% of the performance options will vest in respect of such fiscal year on the applicable vesting date. To the extent that any shares do not vest on the applicable vesting date, those shares are forfeited. 

Restricted Stock: One-third of the shares of the restricted stock vest on March 31, 2006, 2007 and 2008, subject to the Company’s attainment of 100% of the performance target for the prior fiscal year (this target will be identical to the target for such year under the Company’s executive bonus plan), provided that, if the Company attains or exceeds 90% of the performance target for a fiscal year, but less than 100% of such target, then 50% of the restricted stock vesting portion will vest in respect of such fiscal year on the applicable vesting date. To the extent that any shares do not vest on the applicable vesting date, those shares are forfeited. 

Benefit Programs and Coverages: At employment you will be eligible for medical, including an executive physical, dental, vision, life insurance, disability coverage, child and health care reimbursement accounts, travel accident insurance and tuition reimbursement under the Playtex Products, Inc. benefit program. Information is enclosed outlining the benefit options. 

Effective January 1, 2006, you will become eligible to participate in the profit sharing contribution component of the Playtex Profit-Sharing Retirement Plan, in which the Company provides a profit-sharing contribution equal to 10% of an employee’s eligible compensation at the end of each calendar year.

After the completion of 60 days of employment, you will become eligible for the second component of the Playtex Profit-Sharing Retirement Plan which enables you to contribute to our 401(k) Plan on a pre-tax basis. You will be automatically enrolled at a 3% contribution rate unless you elect otherwise within the first 60 days of employment. Playtex will match 50% of your pre-tax contribution, up to a maximum deferral rate of 4%. If you have already contributed on a pre-tax basis to another qualified retirement plan (401(k) plan), please contact Corporate Benefits with the year-to-date amount you have contributed, so that you will not exceed the annual pre-tax limit of $14,000 ($18,000 for those over age 50). 

Vehicle: You will be eligible for a vehicle per company policy. 

Vacation: You will be eligible for four weeks (20 days) of vacation. Vacation is accrued on the 1st of each month at a rate of 2.0 days per month up to a maximum of 20 days per year. 

As consideration for the payments and benefits described in this letter, you agree to the non-disclosure, non-competition, and non-solicitation covenants described as follows. During your employment and for one year thereafter, you are restricted on a worldwide basis from engaging in activities that are competitive with Company business, soliciting or hiring Company employees, soliciting Company customers, suppliers, licensees, or other business relations to cease doing business with the Company, and interfering in Company relationships with its customers, suppliers, licensees, or other business relations. Additionally, you are bound by standard obligations not to disclose Company confidential information.

Severance Payments and Benefits: If your employment is terminated by the Company without cause you will be entitled to receive severance equivalent to 6 months salary and one half of your bonus payment (as described below) in a lump sum upon termination, and severance equivalent to 6 months salary and the balance of your bonus payment on regularly scheduled pay periods (bi-weekly) beginning in the seventh month following your termination; continued medical and dental coverage for 12 months after termination or until you become eligible for benefits from any other source.

The "Average Bonus" shall mean: (i) with respect to a termination that occurs in Fiscal Year 2005, zero; (ii) with respect to a termination that occurs in Fiscal Year 2006, the Bonus that the Executive would have been entitled to receive with respect to Fiscal Year 2006 if the Executive had remained employed through the Bonus Payment Date, based on the Company attaining 100% of Target; (iii) with respect to a termination that occurs in Fiscal Year 2007, the Bonus actually paid to the Executive with respect to Fiscal Year 2006; and (iv) with respect to a termination during a Fiscal Year subsequent to Fiscal Year 2007, the average of the Bonuses actually paid to the Executive in the two Fiscal Years preceding the termination. 

You agree to contact the Company when you obtain new employment, at which time your severance based on base salary and bonus payments will be reduced by base salary received from your new employer. 

The severance payments and benefits described above are also conditioned upon your agreement to sign a general release and covenant not to sue to be provided by the Company upon such termination. 

Employment Eligibility (I-9) Documentation: The Immigration Reform and Control Act of 1986 requires employers to verify the employment eligibility and identity of all new hires. In order to facilitate the process, please review the attached I-9 Draft along with the list of acceptable documents and bring the documents with you on your first day of work. An original I-9 form will be provided for your completion on your first day of employment. (See the enclosed I-9 form). 

Drug Screening: This offer of employment is contingent upon a negative result from the drug screening urinalysis. You may refuse the drug test, however, this refusal will be considered withdrawal of your application of employment. 

You will be advised of the results of your drug screening evaluation so that you can provide notice of resignation to your current employer, if appropriate. 

Employment Verification: All information provided regarding prior employment, salary, education, etc. will be subject to verification as specified on the application for employment that you have been requested to complete. You acknowledge that by signing this letter, you will authorize Playtex to ask and request your current employer to answer all questions that may be asked and to give all information and release any records that may be sought in connection with your employment, once your notice of resignation has been given.

Tom, we look forward to you joining Playtex Products, Inc. Please indicate your acceptance of this offer by signing below and returning the letter to me. Please keep a copy of the offer letter for your records and feel free to contact me at 203-341-4002, if you have any questions regarding this letter or any other aspects of your pending employment with Playtex Products, Inc. 

Sincerely,
 
 
Neil P. DeFeo
President and Chief Executive Officer
 

I accept this offer with the terms and conditions as outlined in this letter:
 

	/s/ THOMAS M. SCHULTZ          	 	          	9/12/2005          	 
	Thomas M. Schultz		Start Date

 

	Enclosures:        	Bonus Policy  
	  	Benefits Information  
	  	Drug Screening Information  
	  	Background Consent  
	  	Voluntary Disability/Veteran’s Disclosure  
	  	Draft – I-9 Form

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