AMENDED AND RESTATED ENGAGEMENT AGREEMENT

EXHIBIT 10.3

AMENDED AND RESTATED

ENGAGEMENT AGREEMENT

AGREEMENT effective as of the 1 ^st day of January, 2009 between Capital Gold Corporation, a Delaware Corporation having an office at 76 Beaver Street, 14 ^th 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.

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.

(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 .

(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

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.

(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 as 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

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;

(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 of Termination Payments .  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.

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