Exhibit 10.1
ENGAGEMENT AGREEMENT
AGREEMENT made as of the 1st day of March 2006 between Capital Gold Corporation,
a Delaware Corporation having an office at 00 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, XX 00000 (hereinafter referred to as the "CORPORATION"), and Xxxxxxxxxxx
X. Xxxxxxx, an individual residing at 0000 Xxxxxxx Xxxx, Xxxxxxx, XX 00000
(hereinafter referred to as "XXXXXXX").
IN CONSIDERATION OF the premises and mutual covenants and conditions herein
contained, the CORPORATION and XXXXXXX hereby agree as follows:
1. Engagement. The CORPORATION agrees to engage XXXXXXX, and XXXXXXX agrees
to serve the CORPORATION as a Chief Financial Officer for the CORPORATION
upon the terms and conditions hereafter set forth. The duties of XXXXXXX
shall be consistent with his position as an executive, and shall be those
duties customarily performed by an executive of his experience.
2. Term. This Agreement becomes effective on March 1, 2006, and shall expire
on February 28, 2007, with an option for an additional 12 months, if
mutually agreed upon by both parties, subject to provisions of Article 6
herein provided.
3. Compensation And Other Benefits.
(a) For his services to the CORPORATION during the TERM, the CORPORATION
shall pay XXXXXXX a fee ("Fee") at the annual base rate of Ninety
Thousand ($90,000) Dollars payable at $7,500 per month.
(b) At the inception of this Agreement, the CORPORATION shall grant
50,000 stock options at an exercise price of $0.34 per share to
XXXXXXX at the same time and on the same terms and conditions as
those granted to other employees and/or executives. Such Options
shall vest at the rate of 10,000 stock options per month for every
month that this Agreement is not terminated pursuant to sections 6
below.
(c) As an independent contractor, XXXXXXX will not participate in the
CORPORATION'S Group Medical program or 401K pension program.
4. Services. XXXXXXX agrees to serve the CORPORATION faithfully and to the
best of his ability, and shall devote fifty percent (50%) of his business
time, attention and energies to the business of the CORPORATION during the
regular business hours and at any other time during the week as reasonably
requested by the CORPORATION and/or required by the demands of his
position. All services required to be rendered by XXXXXXX may be rendered
for the benefit of any of the CORPORATION'S affiliates or subsidiaries,
but no liability shall attach to such affiliate or subsidiary for the
payment of any compensation hereunder.
5. Expenses. During the period of his engagement, XXXXXXX will be reimbursed
for his reasonable and necessary expenses incurred by him pursuant to his
engagement hereunder, such expenses to include necessary travel and
related costs incurred on behalf of the CORPORATION and in commuting to
and from the CORPORATION's offices in New York as well as lodging expenses
while in New York, NY, if necessary, upon submission of appropriate
receipts or vouchers therefore.
6. Termination.
(a) The CORPORATION may discharge XXXXXXX for cause at any time as
provided herein. For purposes hereof, "cause" shall mean the willful
engaging by XXXXXXX in illegal conduct or gross misconduct which is
demonstrably and materially injurious to the CORPORATION. For
purposes of this Agreement, no act, or failure to act, on XXXXXXX'x
part shall be deemed "willful" unless done, or omitted to be done,
by XXXXXXX not in good faith and without reasonable belief that
XXXXXXX'x action or omission was in the best interest of the
CORPORATION. Notwithstanding the foregoing, XXXXXXX shall not be
deemed to have been terminated for Cause unless and until the
CORPORATION delivers to XXXXXXX 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 XXXXXXX and an
opportunity for XXXXXXX, together with counsel, to be heard before
the Board) finding that, in the good faith opinion of the Board,
XXXXXXX was guilty of conduct set forth above and specifying the
particulars thereof in detail.
(b) This Agreement shall terminate upon the death or disability of
XXXXXXX. For purposes of this subsection (b), "disability" shall
mean the inability of XXXXXXX effectively to substantially provide
the services hereunder by reason of any medically determinable
physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a
continuous period of not less than twelve (12) months.
(c) XXXXXXX shall have the right to terminate this Agreement upon not
less than thirty (30) days prior written notice of termination.
7. Effect of Termination.
(a) In the event that this Agreement is terminated for "cause" pursuant
to subsection 6(a), the CORPORATION shall pay XXXXXXX, at the time
of such termination, only the fees due and payable to him through
the date of the termination of this Agreement.
(b) In the event that this Agreement is terminated by the CORPORATION at
any time without "cause", as defined in subsection 6(a), the
CORPORATION shall pay to XXXXXXX, at the time of such termination,
the fees otherwise due and payable to him through the last day of
the then current term of this Agreement or six months from such
termination, which ever is shorter.
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(c) In the event this Agreement is terminated at his election pursuant
to subsection 6(c) or due to XXXXXXX'x death or disability pursuant
to 6(b), the CORPORATION shall pay to XXXXXXX, at the time of such
termination, the fees otherwise due and payable to him through the
last day of the month in which such termination occurs.
8. Trade Secrets And Non-Disclosure. XXXXXXX hereby acknowledges that certain
trade secrets of the CORPORATION are valuable, special and unique assets
of the CORPORATION'S business. Such trade secrets include but are not
limited to its customer lists and the sources of its materials and
products. XXXXXXX hereby covenants that he will not, during or after the
term of his employment, disclose any of the foregoing secrets or any part
thereof to any firm, person or corporation or any entity for any reason or
purpose whatsoever. In the event of a breach or threatened breach by
XXXXXXX of the provisions of this Paragraph, the CORPORATION shall be
entitled to proceed in any court for an injunction restraining XXXXXXX
from disclosing, in whole or in part, any of the aforesaid trade secrets,
or from rendering such service to any person, firm, corporation,
association or any entity to whom such trade secrets, in whole or in part,
have been disclosed, or are threatened to be disclosed. Nothing herein
contained shall be construed as prohibiting the CORPORATION from pursuing
any other remedies for such breach or threatened breach, including the
recovery of damages from XXXXXXX and/or from proceeding pursuant to the
arbitration provisions of this Agreement.
9. Non-Compete. Without the prior written approval of the CORPORATION'S Chief
Executive Officer or President, Xxxxxxx shall not, directly or indirectly,
during the term of this agreement and until the end of twelve (12) months
after termination:
(a) Engage in a "Competing Business" in the "Territory", as those terms
are defined below. "Competing Business" shall mean any business that
mines or produces minerals which is competitive with the
CORPORATION'S or any of its Affiliates, as conducted or under
development at any time during the term of this agreement
"Territory" shall mean anywhere in Mexico.
(b) Make any public statement or perform or do any other act prejudicial
or injurious to the reputation or goodwill of the CORPORATION or any
of its Affiliates or otherwise interfere with the CORPORATION'S
business or that of any of its Affiliates.
10. Notices. Any notice or other communication pursuant to this Agreement
shall be in writing and shall be sent by telecopy or by certified or
registered mail addressed to the respective parties as follows:
(i) If to the CORPORATION, to:
Capital Gold Corporation
00 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Tel. No.: (000) 000-0000
Fax No..: (000) 000-0000
Attention: VP of Corporate Development
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(ii) If to XXXXXXX, to:
Xxxxxxxxxxx X. Xxxxxxx
0000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Tel. No.: (000) 000-0000
Fax No.: _______________
or to such other address as the parties shall have designated by notice to the
other parties given in accordance with this section. Any notice or other
communication shall be deemed to have been duly given if personally delivered or
mailed via registered or certified mail, postage prepaid, return receipt
requested, or, if sent by telecopy, when confirmed.
11. Modification. No modification or waiver of this Agreement or any provision
hereof shall be binding upon the party against whom enforcement of such
modification or waiver is sought unless it is made in writing and signed
by or on behalf of both parties hereto.
12. Miscellaneous. (a) This Agreement shall be subject to and construed in
accordance with the laws of the State of New York.
(b) The waiver by either party of a breach of any provision of this
Agreement by the other party shall not operate and be construed as a
waiver or a continuing waiver by that party of the same or any
subsequent breach of any provision of this Agreement by the other
party.
(c) If any provisions of this Agreement or the application thereof to
any person or circumstance shall be determined by any court of
competent jurisdiction to be invalid or unenforceable to any extent,
the remainder hereof, or the application of such provision to
persons or circumstances other than those as to which it is so
determined to be invalid or unenforceable, shall not be affected
thereby, and each provision hereof shall be valid and shall be
enforced to the fullest extent permitted by law.
(d) This Agreement shall be binding on and inure to the benefit of the
parties hereto and their respective heirs, executors and
administrators, successors and assigns.
(e) This Agreement shall not be assignable in whole or in part by either
party, except that the CORPORATION may assign this Agreement to and
it shall be binding upon any subsidiary or affiliate of the
CORPORATION or any person, firm or corporation with which the
CORPORATION may be merged or consolidated or which may acquire all
or substantially all of the assets of the CORPORATION.
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IN WITNESS WHEREOF, this Agreement has been signed by the parties hereto
as of the date first above written.
CAPITAL GOLD CORPORATION
By: /s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx, VP of Corporate Development
/s/ Xxxxxxxxxxx X. Xxxxxxx
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Xxxxxxxxxxx X. Xxxxxxx, CPA
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