Exhibit
10.3


 





GLOBAL ENERGY


 


November 26,
2004


 


Fred
W. Kelly


12
Bayview Drive SW


Calgary,
Alberta


Canada
T2V 3N6


 


Dear
Fred,


 


Surge
Global Energy, Inc. (the “Company”) is very pleased to confirm our offer
of employment. This offer is contingent upon satisfactory results of all
reference, education, and background checks (Release and Authorization
attached) and is based on the following terms and conditions:


 


	
  Title:

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  Start Date:

  	
   

  	
  We have an anticipated
  your start date as November 26, 2004.

  
	
   

  	
   

  	
   

  
	
  Office:

  	
   

  	
  New office to be
  established in Calgary, Alberta, Canada. The Company will pay the expenses of
  a Calgary office pursuant to an expense account in an amount agreed by you
  and the Board of Directors or the Compensation Committee thereof.

  
	
   

  	
   

  	
   

  
	
  Salary:

  	
   

  	
  Your starting salary as an
  exempt employee will be USD$100,000 annually.

  
	
   

  	
   

  	
   

  
	
  Signing Bonus:

  	
   

  	
  You will be entitled to
  receive a signing bonus of USD$25,000, which will be payable on the 90th
  day after your start date.

  
	
   

  	
   

  	
   

  
	
  Bonus:

  	
   

  	
  You will be eligible to
  participate in the Company’s Bonus Plan which the Board of Directors intends
  to establish with your input.

  
	
   

  	
   

  	
   

  
	
  Stock Options:

  	
   

  	
  You will be granted stock
  options to purchase 700,000 shares of common stock. The options will have an
  exercise price equal to $0.65 per share, and will be exercisable for ten
  years after grant, subject to earlier termination as set forth in the Option
  Agreement. The options will vest in equal monthly installments over three
  years. These options will be non-qualified stock options.

  
	
   

  	
   

  	
   

  
	
  Board of Directors:

  	
   

  	
  The Board of Directors has
  appointed you as a director contingent on your acceptance of this offer. You
  will serve until the next annual meeting of stockholders, or until your
  successor is duly elected and qualified. In

  



 





















 


	
   

  	
   

  	
  accordance with Delaware
  law and the rules of various stock exchanges and quotation systems, the
  Board of Directors or the Nominating Committee thereof will have discretion
  to determine the candidates to be nominated for election at the next annual
  meeting of stockholders.

  
	
   

  	
   

  	
   

  
	
  Performance Review:

  	
   

  	
  The Board of Directors of
  the Compensation Committee thereof will review your performance after 90
  days, and you will be eligible for increased salary, additional stock option
  grants and/or increased expense account allowance based on the results of
  that review.

  
	
   

  	
   

  	
   

  
	
  Health Benefits:

  	
   

  	
  You will be eligible to
  participate in any future benefits plans (such as medical, dental, vision,
  short-term disability, long-term disability and life insurance) available to
  the Company’s employees at the time such plans are established.

  
	
   

  	
   

  	
   

  
	
  Travel:

  	
   

  	
  You will be required to
  travel occasionally to the Company’s corporate offices in San Diego,
  California, and other destinations, including New York, Argentina and Texas
  on a periodic basis as requested by the Board. It is expected that visits to
  each of the Company’s oil & gas properties will occur at least
  semi-annually. You will be reimbursed for your reasonable travel expenses for
  required travel on behalf of the Company.

  
	
   

  	
   

  	
   

  
	
  Paid Time Off &
  Holidays:

  	
   

  	
  You will receive 20 days
  of accrued Paid Time Off (PTO) annually, in use for vacation or sick time.
  This provides for most of your paid time away from work. PTO hours are
  accrued per pay period. Any accrued hours in excess of 200 will be paid out
  in the first pay period of December.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Company will establish
  from time to time its paid holidays. You must be on active status the day
  before and the day after the holiday to receive holiday pay.

  
	
   

  	
   

  	
   

  
	
  Retirement:

  	
   

  	
  You will be eligible to
  participate in any 401k, profit sharing or other defined contribution plan
  the Company establishes for employees. (Note: Some IRS or Revenue Canada
  limitations may apply.)

  
	
   

  	
   

  	
   

  
	
  Arbitration:

  	
   

  	
  As a contingency of this
  offer, you will be required to sign the attached Mutual Agreement to
  Arbitrate.

  



 


Due to the enactment of the Immigration Reform and
Control Act of 1986, this offer is contingent on your ability to produce
acceptable documentation verifying your eligibility to work in the United
States.


 


Additionally, as a condition of this offer and of
your employment with the Company, you will be required to preserve the Company’s
proprietary and confidential information and you must comply with the Company’s
policies and procedures. Accordingly, you will be required to execute an
appropriate Non-Disclosure and Assignment of Inventions Agreement effective as
of your first date of employment.


 





















 


If accepted, your employment will be at-will with no
specified period or term of employment. This means that either you or the
Company may terminate employment at anytime, with or without reason. The
Company may also transfer, promote, demote or otherwise alter your position
and/or status at any time and for any reason. An employment agreement for a
specified period of time, which contradicts this at-will agreement, may only be
entered into in writing, signed with express authorization by the Board of
Directors or the Compensation Committee thereof.


 


We sincerely hope that you decide to join Surge Global
Energy, Inc. Please acknowledge your acceptance of our offer by signing
below and returning a copy of this letter to us not later than close of
business Friday, November 26, 2004. If we do not receive your response by
close of business on such date, this offer will be void.


 


If there are any questions, please do not hesitate
to call me.


 


Sincerely,


 





 


David Perez


Chief Operating Officer


 


I understand and agree to the terms and conditions set
forth in this letter. I further understand that any misrepresentations that I
have made on my employment application or resume can result in termination. I
acknowledge that no statement contradicting this letter, oral or written, has
been made to me, that I am not relying on any statement or term not contained
in this letter, and that no agreements exist which are contrary to the terms
and conditions set forth in this letter.


 


 


	
  Accepted by:

  	
  /s/ Fred W. Kelly

  	
   

  	
  Date:

  	
  November 26, 2004