Exhibit
10.1





ENGAGEMENT
AGREEMENT





AGREEMENT
effective as of the 1st day of
November, 2008 between Capital Gold Corporation, a Delaware Corporation having
an office at 76 Beaver Street, 14th Floor,
New York, NY 10005 (hereinafter referred to as the “Company”), and Scott
Hazlitt, an individual residing at 9428 W. Highway 50, Salida, CO 81201
(hereinafter referred to as “Hazlitt”).





This
agreement (the “Agreement”) supersedes and replaces the executive employment
agreement by and between the Company and Hazlitt originally dated January 1,
2007 as subsequently amended August 29, 2007,  and July 17,
2008.





IN
CONSIDERATION OF the premises and mutual covenants and conditions herein
contained, the Company and Hazlitt hereby agree as follows:





1.           Engagement.  The
Company agrees to engage Hazlitt, and Hazlitt agrees to serve the Company as the
V.P. Mine Development for the Company upon the terms and conditions hereafter
set forth.  The duties of Hazlitt shall be consistent with his
position as V.P. Mine Development, and shall be those duties customarily
performed by an executive of his experience. Hazlitt shall report to the
President of the Company.  During the term of engagement, Hazlitt
shall not directly or indirectly pursue any other business activity without the
prior written consent of the President, with the exception of activity that does
not materially interfere with his duties hereunder and passive personal
investments not in breach of any other term or provision hereof. Hazlitt agrees
to travel to whatever extent is reasonably necessary in the conduct of the
Company’s business, at the Company’s expense and pursuant to the Company’s
standard policies and procedures.





2.           Term.  This
Agreement becomes effective as of November 1, 2008 and shall expire on August
31, 2009 (the Engagement Period”).  Subject to the provisions of
Section 7 herein, the Engagement Period shall automatically renew for successive
one-year periods unless either party provides the other party with written
notice of its intent not to renew at least thirty (30) days prior to the
expiration of the then current Engagement Period.





3.           Compensation And Other
Benefits.





(a)           Base Fee.  For his
services to the Company during the Engagement Period, the Company shall pay
Hazlitt a fee at the annual rate of not less than One Hundred Fifty Five
Thousand Two Hundred and Fifty ($155,250) Dollars (the “Annual Fee”) payable in
equal monthly installments.





(b)           Bonus.  Hazlitt
shall be eligible for any annual incentive bonus opportunity offered by the
Company to executive officers of the Company as Hazlitt’s level.  In
the event of any conflict between this Agreement and any incentive bonus plan
adopted by the Company for its officers and employees, this Agreement shall
control.  The amount of this bonus, as well as the criteria necessary
to earn a bonus, may be changed at any time by the Company and shall be within
the sole discretion of the Company.  All bonuses paid pursuant to this
Agreement will be subject to applicable withholdings and deductions, if
applicable, and will be paid no earlier than fifteen (15) days and no later than
ninety (90) days after the Company’s fiscal year end for which the bonus is
earned.  If Hazlitt’s engagement terminates, voluntarily or by the
Company for Cause, prior to the last day of the fiscal year for which the bonus
applies, Hazlitt acknowledges that he is not entitled to any bonus not yet paid
at the time of the termination because any such unpaid bonus will not be earned,
vested, due, or owing.  Hazlitt hereby expressly forfeits and waives
any such unpaid bonus.”)




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(c)           As
an independent contractor, Hazlitt will not participate in the Company’s Group
Medical program or 401K pension program.





4.           Independent
Contractor.  Nothing herein shall be construed to create an
employer-employee relationship between the Company and Hazlitt. Hazlitt is an
independent contractor and not an employee of the Company or any of its
subsidiaries or affiliates. The consideration set forth in Section 3 shall be
the sole consideration due Hazlitt for the services rendered hereunder. It is
understood that the Company will not withhold any amounts for payment of taxes
from the compensation of Hazlitt hereunder.





5.           Services.  Hazlitt
agrees to serve the Company faithfully and to the best of his ability, and to
devote substantially all of his business time, labor, skill, attention and best
ability to the performance of his duties hereunder in a manner which will
faithfully and diligently further the business and interests of the
Company.  All services required to be rendered by Hazlitt may be
rendered for the benefit of any of the Company’s affiliates or subsidiaries, but
no liability shall attach to such affiliate or subsidiary for the payment of any
compensation hereunder.





6.           Expenses.  During
the period of his engagement, Hazlitt will be reimbursed for his reasonable and
necessary documented expenses incurred by him pursuant to his engagement
hereunder, as they are incurred. ”)





7.           Termination.





(a)           Termination for
Cause.  The Company may discharge Hazlitt for: (i) failure or
refusal to perform the services required hereunder; (ii) a material breach by
Hazlitt of any of the terms of this Agreement; or (iii) Hazlitt’s conviction of
a crime that either results in imprisonment or involves embezzlement,
dishonesty, or activities injurious to the Company or its
reputation.  Whether Cause exists under this Agreement shall be
determined by the Company in its reasonable discretion.





(b)           Without
Cause.  This Agreement may be terminated by the Company without
Cause at any time, such termination to be effective thirty (30) days after
Hazlitt’s receipt of written notice from the Company.  .





(c)           Disability.  This
Agreement may be terminated by the Company upon at least thirty (30) days’
written notice if Executive is prevented by illness, accident or other
disability (mental or physical) from performing the essential functions of the
position for one or more periods cumulatively totaling three (3) months during
any consecutive twelve (12) month period.





(d)           Death.  This
Agreement shall be automatically terminated in the event of Executive’s death
during the term of employment.





(e)           Resignation.  Hazlitt
shall have the right to terminate this Agreement upon not less than sixty (60)
days prior written notice of termination.





(f)           Material
Breach.This Agreement may be terminated by Hazlitt for a
material breach by the Company of any of the terms of this Agreement, upon
thirty (30) days’ written notice specifying the breach, and failure of the
Company to either (i) cure or diligently commence to cure the breach within the
30-day notice period, or (ii) dispute in good faith the existence of the
material breach.




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(g)           Change of
Control.  The Agreement can be terminated Upon a Change of
Control as defined in the January 1, 2007 Agreement Regarding Change In Control
(“Change In Control Agreement”) entered into by and between the Company and
Hazlitt.  The Change In Control Agreement, is hereby amended as
follows and, as amended, remains in effect: Sections 2.1 and 6 thereof are
amended to exclude the Company’s termination of Hazlitt due to Hazlitt’s death
as a basis for Hazlitt’s entitlement to Change In Control
Benefits.  All references to Hazlitt’s salary are changed to Hazlitt’s
Annual Fee.





(h)           Section 409A.


(i) Anything in this Agreement to the
contrary notwithstanding, if on the date of termination of Hazlitt’s services
with the Company, as a result of such termination, Hazlitt would receive any
payment that, absent the application of this Section 7(g)(i), would be subject
to interest and additional tax imposed pursuant to Section 409A(a) of the Code
as a result of the application of Section 409A(2)(B)(i) of the Code, then such
payment shall be payable on the date that is the earliest of (A) six (6) months
after Hazlitt’s termination date, (B) Hazlitt’s death or (C) such other date as
will not result in such payment being subject to such interest and additional
tax.





(ii)  It is the intention
of the parties that payments or benefits payable under this Agreement not be
subject to the additional tax imposed pursuant to Section 409A of the
Code.  To the extent such potential payments or benefits could become
subject to such Section, the parties shall cooperate to amend this Agreement
with the goal of giving Hazlitt the economic benefits described herein in a
manner that does not result in such tax being imposed.





8.           Effect of
Termination.





(a)           In
the event that this Agreement is terminated for "cause" pursuant


to
subsection 7(a),  the Company shall pay Hazlitt, at the time of such
termination, only the fees and any reasonable and necessary business expenses
incurred by him in connection with his services (less any applicable
withholdings and deductions), all due and payable to him through the date of the
termination of this Agreement.





(b)           In
the event that this Agreement is terminated without cause pursuant


to
subsection 7(b), the Company shall pay Hazlitt a cash termination payment equal
to Hazlitt’s Annual Fee in effect upon the date of termination, payable in equal
monthly installments beginning in the month following Hazlitt’s termination.
Such termination payments shall cease immediately in the event that Hazlitt
violates any provision of Sections 9 and/or 10 herein.   In
addition, the Company shall pay Hazlitt any reasonable and necessary business
expenses incurred by Hazlitt in connection with his duties, all to the date of
termination and payable in a lump sum, less any applicable holdings and
deductions, as soon as administratively practicable following Hazlitt’s
termination.





(c)           In
the event that this Agreement is terminated due to disability pursuant to
subsection 7(c), the Company shall pay Hazlitt the same amount as provided for
in subsection 8(a) above, in the same manner as provided for
therein.  In addition, the Company shall pay Hazlitt a cash
termination payment equal to one (1) month of Hazlitt’s Annual Fee in effect
upon the date of termination, payable in a lump sum.





(d)           In
the event this Agreement is terminated at his election pursuant to subsection
7(d) or subsection 7(e), the Company shall pay to Hazlitt, the same amount as
provided for in subsection 8(a) above, in the same manner as provided for
therein.




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(d)           In
the event this Agreement is terminated for material breach by Hazlitt pursuant
to subsection 7(f), the Company shall pay to Hazlitt termination
payments in an amount equal to three (3) months’ of Hazlitt’s Annual Fee plus an
amount equal to one (1) month of the Annual Fee for each full year of Hazlitt’s
engagement after Hazlitt’s first year of providing services to the Company, less
applicable holdings and deductions, after the date such notice is
given.  Such termination payments shall be paid in equal monthly
installments to Hazlitt beginning in the month following Hazlitt’s
termination.  Such termination payments shall be paid so long as
Hazlitt is not in breach of any term of this Agreement, including, without
limitation, Sections 9 and 10 hereof.  In addition, the Company shall
pay to Hazlitt all accrued fees and any reasonable and necessary business
expenses incurred by Hazlitt in connection with his duties, all to the date of
termination and payable in a lump sum, less applicable holdings and deductions,
as soon as administratively practicable following Hazlitt’s
termination.




(e)           In
the event of a Termination Upon a Change of Control as defined in the Change In
Control Agreement, the Company’s obligation to Hazlitt shall be as set forth in
the Change In Control Agreement.





9.           Confidentiality.





(a)  The
term “Confidential Information” shall include, but not be limited to, the whole
or any portion or phase of (i) any confidential, or proprietary or trade secret,
technical, business, marketing or financial information, whether pertaining to
(1) the Company or its Affiliates, (2) its or their suppliers, or (3) any third
party which the Company or its Affiliates is under an obligation to keep
confidential including, but not limited to, methods, know-how, techniques,
systems, processes, software programs, works of authorship, supplier lists,
projects, plans, and proposals, and (ii) any software programs and programming
prepared for the Company’s benefit whether or not developed, in whole or in part
by Hazlitt.  For purposes of this Agreement, “Confidential
Information” shall include, but shall not be limited to, strategies, analysis,
concepts, ideas, or plans; operating techniques; demographic and trade area
information; prospective site locations know-how; improvements; discoveries,
developments; designs, techniques, procedures; methods; machinery, devices;
drawings; specifications; forecasts; new products; research data, reports, or
records; marketing or business development plans, strategies, analysis, concepts
or ideas; contracts; general financial information about or proprietary to the
Company, including, but not limited to, unpublished financial statements,
budgets, projections, licenses, and costs; pricing; personnel information; and
any and all other trade secrets, trade dress, or proprietary information, and
all concepts or ideas in or reasonably related to the Company’s
business.  All such Confidential Information is extremely valuable and
is intended to be kept secret to the Company; is the sole and exclusive property
of the Company or its Affiliates; and, is subject to the restrictive covenants
set forth herein. The term Confidential Information shall not include any
information generally available to the public or publicly disclosed by the
Company (other than by the act or omission of Hazlitt), information disclosed to
Hazlitt by a third party under no duty of confidentiality to the Company or its
Affiliates, or information required by law or court order to be disclosed by
Hazlitt.





(b)  Hazlitt
shall not, without the Company’s prior written approval, use, disclose, or
reveal to any person or entity any of the Company’s Confidential Information,
except as required in the ordinary course of performing duties
hereunder.  Hazlitt shall not use or attempt to use any Confidential
Information in any manner which has the possibility of injuring or causing loss,
whether directly or indirectly, to the Company or any of its
Affiliates.





(c)  In
the event that Hazlitt’s engagement with the Company is terminated for any
reason whatsoever, he shall return to the Company, promptly upon the Company’s
written request therefore, any documents, photographs, tapes, discs, memory
devices, and other property containing Confidential Information which were
received by him during his engagement, without retaining copies
thereof.




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10.           Non-Competition;Non-Solicitation; Anti-Raiding;Non-Disparagement.  Without the prior written approval of the
Chief Executive Officer or the President of the Company, Hazlitt shall not,
directly or indirectly, during his engagement and until the end of one hundred
eighty (180) days after termination of engagement (however such termination
occurs, including, without limitation, termination pursuant to Section 7(a),
7(b), 7(c), 7(d) or 7(e)):





(a)  Engage in a “Competing
Business’’ in the “Territory”, as those terms are defined below, whether as a
sole proprietor, partner, corporate officer, employee, director, shareholder,
consultant, agent, independent contractor, trustee, or in any other manner by
which Hazlitt holds any beneficial interest in a Competing Business, derives any
income from any interest in a Competing Business, or provides any service or
assistance to a Competing Business. “Competing Business” shall mean any business
that mines or produces minerals which is competitive with the business of the
Company or any of its Affiliates (defined below), as conducted or under
development at any time during the term of engagement.  “Affiliates”
shall mean any entity controlled by or under common control with the Company or
any joint venture, partnership or other similar entity to which the Company is a
party.  “Territory” shall mean anywhere in the state of Sonora,
Mexico.  The provisions of this Section 10 will not restrict
Hazlitt from owning less than five percent of the outstanding stock of a
publicly-traded corporation engaged in a Competing Business;





(b)  Acquire, lease or
otherwise obtain or control any beneficial, direct or indirect interest in
mineral rights, or other rights or lands necessary to develop, any mineral
property in which the Company or any of its Affiliates at the time of
termination as a beneficial interest or is actively seeking to acquire, or that
is within a distance of five (5) kilometers from any point on the outer
perimeter of any such property in which the Company or any of its affiliates has
a beneficial interest or that it is seeking to acquire;





(c)  Conduct
any exploration or production activities or otherwise work on or in respect of
any mineral property within a distance of five (5) kilometers from any point on
the outer perimeter of any mineral property in which the Company or any of its
affiliates then has a beneficial interest or is actively seeking to
acquire;





(d)  (i) Contact
or solicit, or direct or assist others to contact or solicit, for the purpose of
promoting any person’s or entity’s attempt to compete with the Company or any of
its Affiliates, in any business carried on by the Company or any of its
Affiliates during the period in which Hazlitt was a consultant of the Company,
any suppliers, independent contractors, vendors, or other business associates of
the Company or any of its Affiliates that were existing or identified
prospective suppliers, independent contractors, vendors, or business associates
during such period, or (ii) otherwise interfere in any way in the
relationships between the Company or any of its Affiliates and their suppliers,
independent contractors, vendors, and business associates;





(e)  (i) Solicit, offer
engagement to, otherwise attempt to hire, or assist in the hiring of any
employee or officer of the Company or any of its Affiliates;
(ii) encourage, induce, assist or assist others in inducing any such person
to terminate his or her engagement with the Company or any of its Affiliates; or
(iii) in any way interfere with the relationship between the Company or any
of its Affiliates and their employees; or




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(f)  Make any public
statement or perform or do any other act prejudicial or injurious to the
reputation or goodwill of the Company or any of its Affiliates or otherwise
interfere with the business of the Company or any of its
Affiliates.





11.           Acknowledgments.  Hazlitt
acknowledges that the covenants contained in Sections 9 and 10, including those
related to duration, geographic scope, and the scope of prohibited conduct, are
reasonable and necessary to protect the legitimate interests of the
Company.  Hazlitt acknowledges that the covenants contained in
Sections 9 and 10 are designed, intended, and necessary to protect, and are
reasonably related to the protection of, the Company’s trade secrets, to which
he will be exposed and with which he will be entrusted.  Specifically,
without limitation, Hazlitt is entrusted with trade secrets
regarding:  the strategic planning initiatives; business development
plans; budgets; financial information; management training; future business
plans; and operational strategies and procedures.  Hazlitt understands
that any breach of Sections 9 or 10 will also constitute a misappropriation
of the Company’s proprietary rights, and may constitute a theft of the Company’s
trade secrets under applicable local, state, and federal statutes, and will
result in a claim for injunctive relief, damages, and/or criminal sanctions and
penalties against Hazlitt by the Company, and possibly others.





12.           Forfeiture ofTerminationPayments.  If Hazlitt breaches Sections 9 or 10 of this
Agreement during the term that termination payments are made pursuant to
Sections 8(b) or 8(d) of this Agreement, Hazlitt shall pay back to the Company
all termination payments received to date.  Nothing contained in this
Section 12 shall be construed as prohibiting the Company from pursuing any other
remedies available to it in the event of the breach of Sections 9 or 10,
including the equitable remedies set forth in Section 14.





13.           Non-Exclusivity of
Rights.  Amounts that are vested benefits or that Hazlitt is
otherwise entitled to receive under any plan, policy or program of, or contract
or agreement with the Company at or subsequent to termination of engagement
(however such termination occurs, including, without limitation, termination
pursuant to Section 7(a), 7(b), 7(c), 7(d) or 7(e)) shall be payable in
accordance with such plan, policy or program of, or any contract or agreement
except as explicitly modified by this Agreement.





14.           Equitable
Remedies.  The services to be rendered by Hazlitt and the
Confidential Information entrusted to Hazlitt as a result of his engagement by
the Company are of a unique and special character, and any breach of Sections 9
or 10 will cause the Company immediate and irreparable injury and damage, for
which monetary relief would be inadequate or difficult to
quantify.  the Company will be entitled to, in addition to all other
remedies available to it, injunctive relief and specific performance to prevent
a breach and to secure the enforcement of Sections 9 or 10.  Hazlitt
acknowledges that injunctive relief may be granted immediately upon the
commencement of any such action without notice to Hazlitt and in addition may
recover monetary damages.  In the event a court requires posting of a
bond, the parties agree to a maximum $5,000 bond.  Hazlitt further
acknowledges that his duties under this Agreement shall survive termination of
his engagement, whether the termination is voluntary or involuntary, rightful or
wrongful, and shall continue until the Company consents in writing to the
release of Hazlitt’s obligations under this Agreement.  The parties
further agree that the provisions of Sections 9 and 10 are separate from and
independent of the remainder of this Agreement and that these provisions are
specifically enforceable by the Company notwithstanding any claim made by
Hazlitt against the Company.





15.           Attorney’s
Fees.  In the event Hazlitt breaches, or threatens to breach,
any provision of this Agreement, Hazlitt acknowledges that he shall be solely
and fully responsible for all fees and costs, including without limitation, all
attorney’s fees and costs, incurred by the Company in enforcing this Agreement
if the Company is the prevailing party in any litigation.




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16.           Entire Agreement;
Amendments. This Agreement (including all exhibits and the Change In
Control Agreement) constitute the entire understanding between the parties with
respect to the subject matter herein and therein, and they supersede any prior
or contemporaneous understandings or agreements.  This Agreement may
be amended, supplemented, or terminated only by a written instrument duly
executed by each of the parties.





17.           Headings. The
headings in this Agreement are for convenience of reference only and shall not
affect its interpretation. References to Sections are to Sections of this
Agreement.





18.           Gender;
Number.  Words of gender may be read as masculine, feminine, or
neuter, as required by context. Words of number may be read as singular or
plural, as required by context.





19.           Severability. The
covenants in this Agreement shall be construed as independent of one another,
and as obligations distinct from one another and any other contract between
Hazlitt and the Company. If any provision of this Agreement is held illegal,
invalid, or unenforceable, such illegality, invalidity, or unenforceability
shall not affect any other provisions hereof. It is the intention of the parties
that in the event any provision is held illegal, invalid, or unenforceable, that
such provision be limited and construed so as to effect the intent of the
parties to the fullest extent permitted by applicable law. Any claim by Hazlitt
against the Company shall not constitute a defense to enforcement by the Company
of this Agreement.





20.           Survival. The
provisions of Sections 7, 9, 10, 11, 12, 13, 14, 15, 16, 19, 20, 21, 22, 23, 24
and 25 shall survive the termination of this Agreement.





21.           Notices.  All
notices, demands, waivers, consents, approvals, or other communications required
hereunder shall be in writing and shall be deemed to have been given if
delivered personally, if sent by facsimile with confirmation of receipt, if sent
by certified or registered mail, postage prepaid, return receipt requested, or
if sent by same day or overnight courier service to the following
addresses:





(i)
            If
      to the Company, to:


Capital Gold Corporation


76 Beaver Street, 14th
Floor


New York, NY 10005


Tel. No.: (212) 344-5158


Fax No..: (212) 344-4537


Attention: President





(ii)
            If
      to Hazlitt, to:


Scott Hazlitt


9428 W. Highway 50


Salida, CO. 81201


Tel. No: 719-539-0515


Fax No.:
719-539-0510





Notice of
any change in any such address shall also be given in the manner set forth
above. Whenever the giving of notice is required, the giving of such notice may
be waived by the party entitled to receive such notice.





22.           Waiver. The failure
of any party to insist upon strict performance of any of the terms or conditions
of this Agreement shall not constitute a waiver of any of such party’s rights
hereunder.




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23.           Assignment. Other
than as provided below, neither party may assign any rights or delegate any of
obligations hereunder without the prior written consent of the other party, and
such purported assignment or delegation shall be void; provided that the Company
may assign the Agreement to any entity that purchases the stock or assets of, or
merges with, the Company or any Affiliate.  This Agreement binds,
inures to the benefit of, and is enforceable by the successors and permitted
assigns of the parties and does not confer any rights on any other persons or
entities.





24.           Governing Law. This
Agreement shall be construed and enforced in accordance with New York law except
for any New York conflict-of-law principle that might require the application of
the laws of another jurisdiction.





25.           Submission to Jurisdiction:
Service: Waivers.  With respect to any claim arising out of
this Agreement, each party hereto (a) irrevocably submits, for itself and its
property, to the jurisdiction of the state court located in the City and County
of New York, New York, the federal court located in New York, New York, and
appellate courts therefrom, (b) agrees that the venue for any suit, action or
proceeding arising out of or relating to this Agreement shall be exclusive to
and limited to such courts, and (c) irrevocably waives any objection it may have
at any time to the laying of venue of any suit, action or proceeding arising out
of or relating to this Agreement brought in any such court, irrevocably waives
any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum and further irrevocably waives the right
to object, with respect to such claim, suit, action or proceeding brought in any
such court that such court does not have jurisdiction over it. Each party
irrevocably consents to the service of process in any suit, action or proceeding
in any of the aforesaid courts by the mailing of copies of process to the other
party or parties hereto, by certified or registered mail at the address
specified in Section 21.





INWITNESS WHEREOF, this
Agreement has been signed by the parties hereto effective as of the date first
above written.





CAPITAL
GOLD CORPORATION





By:           s/Gifford
Dieterle


Gifford Dieterle,
President








s/Scott
Hazlitt


Scott
Hazlitt




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