EXHIBIT
10.3
 AMENDED
AND RESTATED
 ENGAGEMENT
AGREEMENT
 
 AGREEMENT
effective as of the 1st day of
January, 2009 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
(hereinafter referred to as “Hazlitt”).
 
 This
agreement (the “Agreement”) amends and restates the engagement agreement by and
between the Company and Hazlitt originally effective on November 1,
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 January 1, 2009 and shall expire on December
31, 2011 (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
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  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 (but in no event later
than the March 15 of the calendar year after the calendar year in 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.  In the event that Hazlitt’s engagement
terminates without cause pursuant to Section 7(b) or by Hazlitt for breach
pursuant to Section 7(f) prior to the last day of the fiscal year for which the
bonus applies, Hazlitt will be entitled to a bonus pro rated for the period from
the beginning of that fiscal year to the date of termination and payable no
later than 60 days following Hazlitt’s termination.
 
 (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.
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 (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.
 
 (g)           Change of
Control.  The Agreement can be terminated Upon a Change of
Control as defined in the Agreement Regarding Change In Control (“Change In
Control Agreement”) entered into by and between the Company and Hazlitt
effective as of January 1, 2009 and attached hereto as Exhibit A.  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 engagement with Company,
 
 (A)           Hazlitt
would not have a separation from service within the meaning of Section
409A(a)(2)(A)(i) (“Separation From Service”) of the Internal Revenue Code of
1986, as amended (the “Code”), and as a result of such termination of engagement
would receive any payment that, absent the application of this
Section 7(g)(i)(A), would be subject to additional tax imposed pursuant to
Section 409A(a) of the Code, then such payment shall instead be payable on the
date that is the earliest of (1) Hazlitt’s Separation From Service, (2) the date
Hazlitt becomes disabled (within the meaning of Section 409A(a)(2)(C) of the
Code), (3) Hazlitt’s death, or (4) such other date as will not result
in such payment being subject to such additional tax; and if
 
 (B)           Hazlitt
is a specified employee within the meaning of Section 409A(a)(2)(B)(i) of the
Code and would receive any payment sooner than six months after Hazlitt’s
Separation From Service that, absent the application of this Section 7(g)(i)(B),
would
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  be
subject to additional tax imposed pursuant to Section 409A(a) of the Code as a
result of such status as a specified employee, then such payment shall instead
be payable on the date that is the earliest of (1) six months after
Hazlitt’s Separation From Service, (2) Hazlitt’s death, or (3) such
other date as will not result in such payment being subject to such 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.
 
 (iii)           In
the event that a payment or benefit payable under this Agreement is subject to
the additional tax imposed by Section 409A of the Code, and Hazlitt has not been
uncooperative in any attempts of the Company to amend this Agreement to avoid
such additional tax, Company shall (at Hazlitt’s option) pay directly, or
reimburse Hazlitt for such additional tax and any interest and penalty related
thereto (the “409A Amounts”) within 10 days of Hazlitt’s submission to Company
of the taxing authority’s determination of amounts due (which determination must
be submitted by Hazlitt to Company within 30 days of receipt by Hazlitt), and in
the case of Hazlitt’s payment, evidence of such payment.  At the same
time as Company’s payment or reimbursement, Company shall pay Hazlitt a gross-up
amount to cover income, excise, and other applicable taxes on the 409A Amounts
and on the gross-up amount (before this further gross-up).  For
purposes of calculating the gross-up amounts for taxes, Hazlitt shall be deemed
to be taxed at the highest marginal rate under all applicable local, state,
federal, and foreign tax laws for which the payment is made.
 
 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), subject to Section 7(g)(i) of the Agreement, the Company shall
pay Hazlitt a cash termination payment equal to the greater of Hazlitt’s Annual
Fee in effect upon the date of termination or the balance of Annual Fees
remaining in the then current term of the Agreement, 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 (but in no event later than
60 days) following Hazlitt’s termination.
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  (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 sumas soon as
administratively practical (but in no event later than 60 days) following
Hazlitt’s termination.
 
 (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.
 
 (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 cash termination payments calculated pursuant to
Section 8(b).  Subject to  Section 7(h)(i) of the Agreement,
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 (but in no event later than 60 days) 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
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  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.
 
 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;
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 (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
 
 (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 15.
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  13. Forfeiture of Profits
Related to Option Exercises.  If Hazlitt breaches Section 9 or
10 of this Agreement, the Company shall have the right to repurchase any or all
shares of common stock of the Company purchased by Hazlitt upon the exercise of
options within the twelve (12)-month period immediately preceding the breach at
the exercise price of the option (the “Repurchase Amount”), or if Hazlitt no
longer holds such shares of common stock purchased on exercise of options,
Hazlitt shall pay to the Company an amount  (the “Profit Amount”)
equal to the gross profits that Hazlitt received or to be received on the sale
of such shares calculated as the aggregate sale price of such shares of common
stock less the exercise price.  The Company may exercise this right
within 90 days of its discovery of a breach, by a written notice (“Forfeiture
Notice”) to Executive and, as the case may be: (i) if Executive has the shares,
Executive shall immediately deliver them to the Company and, thereafter, the
Company shall pay the Repurchase Amount to Executive within thirty (30) days by
certified or bank check or by wired funds; and (ii) If Executive no longer has
the shares, Executive shall pay the Profit Amount to the Company within thirty
(30) days of the date of the Forfeiture Notice.  If the Executive has
transferred such shares in a transaction which is not a sale (including, for
example, a gift to a family member or entity), the Profit Amount payable by
Executive to the Company shall be an amount equal to the difference between the
value of such shares on the date of the Forfeiture Notice and the exercise
price. Nothing contained in this Section 13 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 15.
 
 14. 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.
 
 15. 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.
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  16. 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.
 
 17. 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.
 
 18. 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.
 
 19. 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.
 
 20. 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.
 
 21. Survival. The
provisions of Sections 7, 9, 10, 11, 12, 13, 14, 15, 16, 17, 20, 21, 22, 23, 24,
25 and 26 shall survive the termination of this Agreement.
 
 22. 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
 
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  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.
 
 23. 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.
 
 24. 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.
 
 25. 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.
 
 26. 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 22.
   [SIGNATURE
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  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 A. Dieterle
 Gifford
Dieterle, President
   /s/ Scott
Hazlett
 
 Scott
Hazlitt
   - 11
-
  EXHIBIT
A
 
 AGREEMENT
REGARDING
 CHANGE
IN CONTROL
 
 THIS
AGREEMENT (“Agreement”), is made and entered into as of the 1st  day
of January, 2009 (the “Effective Date”) by and between Capital Gold Corporation
(the “Company”) and Scott Hazlitt (the “Executive”).
 
 WITNESSETH
THAT:
 
 WHEREAS, the Company considers it
essential to the best interests of its stockholders to foster the continuous
engagement of key management personnel, and the Board of Directors of the
Company (the “Board”) recognizes that, as is the case with many publicly held
corporations, a change in control might occur and that such possibility, and the
uncertainty and questions which it may raise among management, may result in the
departure or distraction of management personnel to the detriment of the Company
and its stockholders; and
 
 WHEREAS, the Board has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Company’s management, including the
Executive, to their engagement without distraction in the face of potentially
disturbing circumstances arising from the possibility of a change in control of
the Company;
 
 NOW, THEREFORE, to induce the Executive
to remain engaged by the Company and in consideration of the premises and mutual
covenants set forth herein, IT IS HEREBY AGREED by and between the parties as
follows:
 
 1.           AGREEMENT
TERM.  The initial “Agreement Term” shall begin on the Effective Date
and shall continue through December 31, 2011.  As of December 31,
2011, and as of each December 31 thereafter, the Agreement Term shall extend
automatically for a one year period unless the Company gives notice to the
Executive prior to the date of such extension that the Agreement Term will not
be extended.  Notwithstanding the foregoing, if a Change in Control
(as defined in Section 7 below), occurs during the Agreement Term, the Agreement
Term shall continue through and terminate on the first anniversary of the date
on which the Change in Control occurs.
 
 2.           ENTITLEMENT
TO CHANGE IN CONTROL BENEFITS.  The Executive shall be entitled to the
Change in Control Benefits described in Section 3 hereof if the Executive’s
engagement by the Company is terminated during the Agreement Term but after a
Change in Control (i) by the Company for any reason other than Permanent
Disability or Cause, (ii) by the Executive for Good Reason or (iii) by the
Executive for any reason during the 30-day period commencing on the first date
which is six months after the date of the Change in Control.  For
purposes of this Agreement:
  
  (a)           A
termination of the Executive’s engagement shall be treated as a termination by
reason of “Permanent Disability” only if, due to a mental or physical
disability, the Executive is absent from the performance of services for the
Company for a period of at least twelve consecutive months and fails to return
to the performance of services within 30 days after receipt of a written demand
by the Company to do so.
  (b)           The
term “Cause” shall mean the willful engaging by the Executive in illegal conduct
or gross misconduct which is demonstrably and materially injurious to the
Company.  For purposes of this Agreement, no act, or failure to act,
on the Executive’s part shall be deemed “willful” unless done, or omitted to be
done, by the Executive not in good faith and without reasonable belief that the
Executive’s action or omission was in the best interest of the
Company.  Notwithstanding the foregoing, the Executive shall not be
deemed to have been terminated for Cause unless and until the Company delivers
to the Executive a copy of a resolution duly adopted by the affirmative vote of
not less than three-quarters of the entire membership of the Board at a meeting
of the Board called and held for such purpose (after reasonable notice to the
Executive and an opportunity for the Executive, together with counsel, to be
heard before the Board) finding that, in the good faith opinion of the Board,
the Executive was guilty of conduct set forth above and specifying the
particulars thereof in detail.
 
 (c)           The
term “Good Reason” shall mean the occurrence of any of the following
circumstances without the Executive’s express written consent:
 
 (i) a significant adverse change in the
nature, scope or status of the Executive’s position, authorities or services
from those in effect immediately prior to the Change in Control, including,
without limitation, if the Executive was, immediately prior to the Change in
Control, an executive officer of a public company, the Executive ceasing to be
an executive officer of a public company;
 
 (ii) the failure by the Company to pay
the Executive any portion of the Executive’s current compensation, or to pay the
Executive any portion of any installment of deferred compensation under any
deferred compensation program of the Company, within seven days of the date such
compensation is due;
 
 (iii) a reduction in the Executive’s
annual base compensation (or a material change in the frequency of payment) as
in effect immediately prior to the Change in Control as the same may be
increased from time to time;
 
 (iv)           the
failure by the Company to award the Executive an annual bonus in any year which
is at least equal to the annual bonus awarded to the Executive for the year
immediately preceding the year of the Change in Control;
 
 (v)           the
failure by the Company to award the Executive equity-based incentive
compensation (such as stock options, shares of restricted stock, or other
equity-based compensation) on a periodic basis consistent with the Company’s
practices with respect to timing, value and terms prior to the Change in
Control;
  A-2
  
 (vi)           the
failure of the Company to award the Executive incentive compensation of any
nature based on attained milestones when such milestones are
attained.
 
 (vii)           the
failure of the Company to obtain a satisfactory agreement from any successor to
the Company to assume and agree to perform this Agreement as contemplated by
Section 14.
 
 For
purposes of any determination regarding the existence of Good Reason, any good
faith determination by the Executive that Good Reason exists shall be
conclusive.
 
 3.           
CHANGE IN CONTROL BENEFITS.  In the event of a termination of
engagement entitling the Executive to benefits in accordance with Section 2, the
Executive shall receive the following:
 
 (a)           The
Executive shall be entitled to a lump sum payment in cash no later than twenty
(20) business days after the Executive’s date of termination equal to the sum
of:
 
 (i)           an
amount equal to three times the Executive’s base salary in effect on the date of
the Change in Control or, or if greater, as in effect immediately prior to the
date of termination; plus
 
 (ii)           an
amount equal to three times the Executive’s bonus award for the year immediately
preceding the year of the Change in Control.
 
 The amount payable under this paragraph
(d) shall be inclusive of the amounts, if any, to which the Executive would
otherwise be entitled or by law and shall be in addition to (and not inclusive
of) any amount payable under any written agreement(s) directly between the
Executive and the Company or any of its subsidiaries.
 
 (b)           All
unvested Company options shall immediately become vested, and any exercise must
occur no later than March 15 of the calendar year after the date of
termination.
 
 (c)           The
Company shall provide the Executive with and, at the Executive’s option,
directly pay for or reimburse the Executive for outplacement services and tax
and financial counseling suitable to the Executive’s position, from providers
selected by the Executive for services through the end of the second taxable
year of Executive after the taxable year of Executive’s separation from service
(within the meaning of Section 409A(a)(2)(A)(i) of the Code) with the Company,
or, if earlier, the date on which the Executive becomes employed by another
employer.  In the event the Executive has paid for any such services,
the Company shall reimburse the Executive for such payments within 10 days of
submission to the Company of a copy of the provider’s invoice for services and
evidence of payment.  Any request for reimbursement for such expenses
shall be submitted no later than 30 days before the end of the third taxable
year of the Executive following the taxable year of the Executive in which the
separation from service occurred.
  A-3
  4.           MITIGATION.  The
Executive shall not be required to mitigate the amount of any payment provided
for in this Agreement by seeking other engagement or otherwise.  The
Company shall not be entitled to set off against the amounts payable to the
Executive under this Agreement any amounts owed to the Company by the Executive,
any amounts earned by the Executive in other engagement after the Executive’s
termination of engagement with the Company, or any amounts which might have been
earned by the Executive in other engagement had the Executive sought such other
engagement.
 
 5.           MAKE-WHOLE
PAYMENTS.  If any payment or benefit to which the Executive (or any
person on account of the Executive) is entitled, whether under this Agreement or
otherwise, in connection with a Change in Control or the Executive’s termination
of engagement (a “Payment”) constitutes a “parachute payment” within the meaning
of section 280G of the Code, and as a result thereof the Executive is subject to
a tax under section 4999 of the Code, or any successor thereto, (an “Excise
Tax”), the Company shall pay to the Executive an additional amount (the
“Make-Whole Amount”) which is intended to make the Executive whole for such
Excise Tax.  The Make-Whole Amount shall be equal to (i) the amount of
the Excise Tax, plus (ii) the aggregate amount of any interest, penalties, fines
or additions to any tax which are imposed in connection with the imposition of
such Excise Tax, plus (iii) all income, excise and other applicable taxes
imposed on the Executive under the laws of any Federal, state or local
government or taxing authority by reason of the payments required under clauses
(i) and (ii) and this clause (iii).
 
 (a)           For
purposes of determining the Make-Whole Amount, the Executive shall be deemed to
be taxed at the highest marginal rate under all applicable local, state, federal
and foreign income tax laws for the year in which the Make-Whole Amount is
paid.  The Make-Whole Amount payable with respect to an Excise Tax
shall be paid by the Company coincident with the Payment with respect to which
such Excise Tax relates.
 
 (b)           All
calculations under this Section 5 shall be made initially by the Company and the
Company shall provide prompt written notice thereof to the Executive to enable
the Executive to timely file all applicable tax returns.  Upon request
of the Executive, the Company shall provide the Executive with sufficient tax
and compensation data to enable the Executive or the Executive’s tax advisor to
independently make the calculations described in subparagraph (a) above and the
Company shall, at the Executive’s option, pay the Executive’s advisor directly
or reimburse the Executive for reasonable fees and expenses incurred for any
such verification.  Any payment or reimbursement shall be made within
10 days of submission of the service provider’s invoice to the Company, and in
the case of reimbursement, evidence of payment.  Executive shall be
submit a copy of the service provider’s invoice for such services to the Company
within 60 days of its receipt by the Executive.
 
 (c)           If
the Executive gives written notice to the Company of any objection to the
results of the Company’s calculations within 60 days of the Executive’s receipt
of written notice thereof, the dispute shall be referred for determination to
independent tax counsel selected by the Company and reasonably acceptable to the
Executive (“Tax Counsel”).  The Company shall pay all fees and
expenses of such Tax Counsel.  Pending such determination by Tax
Counsel, the Company shall pay the Executive the Make-Whole Amount as determined
by it in good faith.
  A-4
  The
Company shall pay the Executive any additional amount determined by Tax Counsel
to be due under this Section 5 (together with interest thereon at a rate equal
to 120% of the Federal short-term rate determined under section 1274(d) of the
Code) within 10 days after such determination.
 
 (d)           The
determination by Tax Counsel shall be conclusive and binding upon all parties
unless the Internal Revenue Service, a court of competent jurisdiction, or such
other duly empowered governmental body or agency (a “Tax Authority”) determines
that the Executive owes a greater or lesser amount of Excise Tax with respect to
any Payment than the amount determined by Tax Counsel.
 
 (e)           If
a Taxing Authority makes a claim against the Executive which, if successful,
would require the Company to make a payment under this Section 5, the Executive
agrees to contest the claim with counsel reasonably satisfactory to the Company,
on request of the Company subject to the following conditions:
 
 (i) The Executive shall notify the
Company of any such claim within 10 days of becoming aware
thereof.  In the event that the Company desires the claim to be
contested, it shall promptly (but in no event more than 30 days after the notice
from the Executive or such shorter time as the Taxing Authority may specify for
responding to such claim) request the Executive to contest the
claim.  The Executive shall not make any payment of any tax which is
the subject of the claim before the Executive has given the notice or during the
30-day period thereafter unless the Executive receives written instructions from
the Company to make such payment together with an advance of funds sufficient to
make the requested payment plus any amounts payable under this Section 5
determined as if such advance were an Excise Tax, in which case the Executive
will act promptly in accordance with such instructions.
 
 (ii) If the Company so requests, the
Executive will contest the claim by either paying the tax claimed and suing for
a refund in the appropriate court or contesting the claim in the United States
Tax Court or other appropriate court, as directed by the Company; PROVIDED,
HOWEVER, that any request by the Company for the Executive to pay the tax shall
be accompanied by an advance from the Company to the Executive of funds
sufficient to make the requested payment plus any amounts payable under this
Section 5 determined as if such advance were an Excise Tax.  If
directed by the Company in writing the Executive will take all action necessary
to compromise or settle the claim, but in no event will the Executive compromise
or settle the claim or cease to contest the claim without the written consent of
the Company; PROVIDED, HOWEVER, that the Executive may take any such action if
the Executive waives in writing the Executive’s right to a payment under this
Section 5 for any amounts payable in connection with such claim.  The
Executive agrees to cooperate in good faith with the Company in contesting the
claim and to comply with any reasonable request from the Company concerning the
contest of the claim, including the pursuit of administrative remedies, the
appropriate forum for any judicial proceedings, and the legal basis for
contesting the claim.  Upon request of the Company, the Executive
shall take appropriate appeals of any judgment or decision that would require
the Company make a payment under this Section 5.  Provided that
Executive is in compliance with the provisions this section, the Company shall
be liable for and indemnify the Executive against any loss in connection with,
and all costs and expenses,
  A-5
  including
attorneys’ fees, which may be incurred as a result of, contesting the claim, and
shall provide to the Executive within 30 days after each written request
therefor by the Executive cash advances or reimbursement for all such costs and
expenses actually incurred or reasonably expected to be incurred by the
Executive as a result of contesting the claim.
 
 (f)           Should
a Tax Authority finally determine that an additional Excise Tax is owed, then
the Company shall pay an additional Make-Whole Amount to the Executive in a
manner consistent with this Section 5 with respect to any additional Excise Tax
and any assessed interest, fines, or penalties.  If any Excise Tax as
calculated by the Company or Tax Counsel, as the case may be, is finally
determined by a Tax Authority to exceed the amount required to be paid under
applicable law, then the Executive shall repay such excess to the Company within
30 days of such determination; provided that such repayment shall be reduced by
the amount of any taxes paid by the Executive on such excess which is not offset
by the tax benefit attributable to the repayment.
 
 6.           TERMINATION
DURING POTENTIAL CHANGE IN CONTROL.  If a Potential Change in Control
(as defined in Section 8) occurs during the Agreement Term, and the Company
terminates the Executive’s engagement for reasons other than Permanent
Disability or Cause during such Potential Change in Control, the Executive shall
be entitled to receive the benefits that the Executive would have received under
Section 3, such benefits to be calculated based upon the Executive’s
compensation prior to the actual termination of engagement but paid within 20
business days of the date of such termination.
 
 7.           CHANGE
IN CONTROL.  For purposes of this Agreement, a “Change in Control”
shall be deemed to have occurred on the earliest of the following
dates:
 
 (a)           the
date any Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing 30% or more of the combined voting power
of the Company’s then outstanding securities, excluding any Person who becomes
such a Beneficial Owner in connection with a transaction described in clause (i)
of paragraph (c) below; or
 
 (b)           the
date on which the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on the date
hereof, constitute the Board and any new director (other than a director whose
initial assumption of office is in connection with an actual or threatened
election contest, including but not limited to a consent solicitation, relating
to the election of directors of the Company) whose appointment or election by
the Board or nomination for election by the Company’s stockholders was approved
or recommended by a vote of at least two-thirds (2/3) of the directors then
still in office who either were directors on the date hereof or whose
appointment, election or nomination for election was previously so approved or
recommended; or
 
 (c)           the
date on which there is consummated a merger or consolidation of the Company or
any direct or indirect subsidiary of the Company with any other corporation or
other entity, other than (i) a merger or consolidation (A) immediately following
which the individuals who comprise the Board immediately prior thereto
constitute at least a majority of the board of directors of the Company, the
entity surviving such merger or consolidation or, if the
Company
  A-6
  or the
entity surviving such merger or consolidation is then a subsidiary, the ultimate
parent thereof and (B) which results in the voting securities of the Company
outstanding immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof), in combination with
the ownership of any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any subsidiary of the Company, at least
50% of the combined voting power of the securities of the Company or such
surviving entity or any parent thereof outstanding immediately after such merger
or consolidation, or (ii) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no Person is
or becomes the Beneficial Owner, directly or indirectly, of securities of the
Company representing 30% or more of the combined voting power of the Company’s
then outstanding securities; or
 
 (d)           the
date on which the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated an agreement
for the sale or disposition by the Company of all or substantially all of the
Company’s assets, other than a sale or disposition by the Company of all or
substantially all of the Company’s assets to an entity, at least 50% of the
combined voting power of the voting securities of which are owned by
stockholders of the Company, in combination with the ownership of any trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or any subsidiary of the Company, in substantially the same proportions as their
ownership of the Company immediately prior to such sale.
 
 Notwithstanding
the foregoing, a “Change in Control” shall not be deemed to have occurred by
virtue of the consummation of any transaction or series of integrated
transactions immediately following which the record holders of the common stock
of the Company immediately prior to such transaction or series of transactions
continue to have substantially the same proportionate ownership in an entity
which owns all or substantially all of the assets of the Company immediately
following such transaction or series of transactions.
 
 For
purposes of this Agreement: “Affiliate” shall have the meaning set forth in Rule
12b-2 promulgated under Section 12 of the Exchange Act; “Beneficial Owner” shall
have the meaning set forth in Rule 13d-3 under the Exchange Act; “Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended from time to time;
and “Person” shall have the meaning given in Section 3(a)(9) of the Exchange
Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such
term shall not include (i) the Company or any of its subsidiaries, (ii) a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any of its Affiliates, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (iv) a corporation
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the
Company.
 
 8.           POTENTIAL
CHANGE IN CONTROL.  A “Potential Change in Control” shall exist during
any period in which the circumstances described in paragraphs (a), (b), (c) or
(d), below, exist (provided, however, that a Potential Change in Control shall
cease to exist not later than the occurrence of a Change in
Control):
  A-7
  (a)           The
Company enters into an agreement, the consummation of which would result in the
occurrence of a Change in Control, provided that a Potential Change in Control
described in this paragraph (a) shall cease to exist upon the expiration or
other termination of all such agreements;
 
 (b)           Any
Person (without regard to the exclusions set forth in subsections (i) through
(iv) of such definition) publicly announces an intention to take or to consider
taking actions the consummation of which would constitute a Change in Control;
provided that a Potential Change in Control described in this paragraph (b)
shall cease to exist upon the withdrawal of such intention, or upon a
determination by the Board that there is no reasonable chance that such actions
would be consummated;
 
 (c)           Any
Person becomes the Beneficial Owner, directly or indirectly, of securities of
the Company representing 20% or more of either the then outstanding shares of
common stock of the Company or the combined voting power of the Company’s then
outstanding securities; or
 
 (d)           The
Board adopts a resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control exists; provided that a Potential Change in Control
described in this paragraph (d) shall cease to exist upon a determination by the
Board that the reasons that gave rise to the resolution providing for the
existence of a Potential Change in Control have expired or no longer
exist.
 
 9.           NONALIENATION.  The
interests of the Executive under this Agreement are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors of the Executive or the Executive’s
beneficiary.
 
 10.           AMENDMENT.  This
Agreement may be amended or canceled only by mutual agreement of the parties in
writing without the consent of any other person.  So long as the
Executive lives, no person, other than the parties hereto, shall have any rights
under or interest in this Agreement or the subject matter hereof.
 
 11.           APPLICABLE
LAW.  The provisions of this Agreement shall be construed in
accordance with the laws of the State of New York, without regard to the
conflict of law provisions of any state.
 
 12.           SEVERABILITY.  The
invalidity or unenforceability of any provision of this Agreement will not
affect the validity or enforceability of any other provision of this Agreement,
and this Agreement will be construed as if such invalid or unenforceable
provision were omitted (but only to the extent that such provision cannot be
appropriately reformed or modified).
 
 13.           WAIVER
OF BREACH.  No waiver by any party hereto of a breach of any provision
of this Agreement by any other party, or of compliance with any condition or
provision of this Agreement to be performed by such other party, will operate or
be construed as a waiver of any subsequent breach by such other party of any
similar or dissimilar provisions and conditions at the same or any prior or
subsequent time.  The failure of any party hereto to
take
  A-8
  any
action by reason of such breach will not deprive such party of the right to take
action at any time while such breach continues.
 
 14.           SUCCESSORS,
ASSUMPTION OF CONTRACT.  This Agreement shall be binding upon and
inure to the benefit of the Company and any successor of the
Company.  The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no succession had
taken place.  This Agreement is personal to the Executive and may not
be assigned by the Executive without the written consent of the
Company.  However, to the extent that rights or benefits under this
Agreement otherwise survive the Executive’s death, the Executive’s heirs and
estate shall succeed to such rights and benefits pursuant to the Executive’s
will or the laws of descent and distribution; provided that the Executive shall
have the right at any time and from time to time, by notice delivered to the
Company, to designate or to change the beneficiary or beneficiaries with respect
to such benefits.
 
 15.           NOTICES.  Notices
and all other communications provided for in this Agreement shall be in writing
and shall be delivered personally or sent by registered or certified mail,
return receipt requested, postage prepaid (provided that international mail
shall be sent via overnight or two-day delivery), or sent by facsimile or
prepaid overnight courier to the parties at the addresses set forth
below.  Such notices, demands, claims and other communications shall
be deemed given:
 
 (a)           in
the case of delivery by overnight service with guaranteed next day delivery, the
next day or the day designated for delivery;
 
 (b)           in
the case of certified or registered U.S.  mail, five days after
deposit in the U.S.  mail; or
 
 (c)           in
the case of facsimile, the date upon which the transmitting party received
confirmation of receipt by facsimile, telephone or otherwise;
 
 provided,
however, that in no event shall any such communications be deemed to be given
later than the date they are actually received.  Communications that
are to be delivered by the U.S.  mail or by overnight service or
two-day delivery service are to be delivered to the addresses set forth
below:
 
 to the
Company:
 
 Capital Gold Corporation
 76 Beaver Street
 14th Floor
 New York, NY 10005
 
  A-9
  with a
copy (which shall not constitute notice) to:
  Chief
Financial Officer
 Capital
Gold Corporation
 76 Beaver
Street
 14th
Floor
 New York,
NY 10005
 
 or to the
Executive:
 
 Scott Hazlitt
  Each
party, by written notice furnished to the other party, may modify the applicable
delivery address, except that notice of change of address shall be effective
only upon receipt.
 
 16.           LEGAL
AND ENFORCEMENT COSTS.  The provisions of this Section 16 shall apply
if it becomes necessary or desirable for the Executive to retain legal counsel
or incur other costs and expenses in connection with enforcing any and all
rights under this Agreement or any other compensation plan maintained by the
Company:
 
 (a)           The
Executive shall be entitled to recover from the Company reasonable attorneys’
fees, costs and expenses incurred in connection with such enforcement or
defense.
 
 (b)           Payments
required under this Section 16 shall be made by the Company to the Executive (or
directly to the Executive’s attorney) promptly following submission to the
Company of appropriate documentation evidencing the incurrence of such
attorneys’ fees, costs, and expenses.
 
 (c)           The
Executive shall be entitled to select legal counsel; provided, however, that
such right of selection shall not affect the requirement that any costs and
expenses reimbursable under this Section 16 be reasonable.
 
 (d)           The
Executive’s rights to payments under this Section 16 shall not be affected by
the final outcome of any dispute with the Company.
 
 17.           SURVIVAL
OF AGREEMENT.  Except as otherwise expressly provided in this
Agreement, the rights and obligations of the parties to this Agreement shall
survive the termination of the Executive’s engagement with the
Company.
 
 18.           ENTIRE
AGREEMENT.  Except as otherwise provided herein, this Agreement
constitutes the entire agreement between the parties concerning the subject
matter hereof and supersedes all prior or contemporaneous agreements, between
the parties relating to the subject matter hereof; provided, however, that
nothing in this Agreement shall be construed to limit any policy or agreement
that is otherwise applicable relating to confidentiality, rights to
inventions,
  A-10
  copyrightable
material, business and/or technical information, trade secrets, solicitation of
employees, interference with relationships with other businesses, competition,
and other similar policies or agreement for the protection of the business and
operations of the Company and the subsidiaries.
 
 19.           COUNTERPARTS.  This
Agreement may be executed in two or more counterparts, any one of which shall be
deemed the original without reference to the others.
 
 IN
WITNESS THEREOF, the Executive has hereunto set his hand, and the Company has
caused these presents to be executed in its name and on its behalf, and its
corporate seal to be hereunto affixed on this 21st day of
January, 2009, all as of the Effective Date.
   /s/ Scott Hazlitt
 Scott
Hazlitt
  CAPITAL
GOLD CORPORATION
 
 By: /s/ Gifford A. Dieterle Gifford
A.  Dieterle, President
   ATTEST:
  /s/ Christopher M. Chipman
 Christopher
Chipman, CFO
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