You gave me a couple of ideas.
[list][*]Ensure you provide a user and password for the EM Service in services.msc
[*]Ensure your EM service account has read and execute permissions on d:\pstools.[list]
to test the execution:
[list][*]Open a command prompt
[*]execute the same alert action
c:\windows\system32\cmd.exe /C d:\pstools\mybat
[list]