exhibit10-1.htm


    EMPLOYMENT
      AGREEMENT, dated October 16, 2007, by and between DCAP GROUP,
      INC., a Delaware corporation (the “Company”), and
BARRY B. GOLDSTEIN (the “Employee”).

     

    RECITALS

     

    WHEREAS,
      the Company and the Employee desire to enter into an employment agreement which
      will set forth the terms and conditions upon which the Employee shall be
      employed by the Company and upon which the Company shall compensate the
      Employee.

     

    NOW,
      THEREFORE, in consideration of the foregoing and the mutual covenants
      hereinafter set forth, the parties hereto have agreed, and do hereby agree,
      as
      follows:

     

    1.
       EMPLOYMENT;
      TERM

     

    1.1  The
      Company will employ the Employee in its business, and the Employee will work
      for
      the Company therein, as its President, Chairman of the Board and Chief Executive
      Officer for a term commencing as of the date hereof (the “Effective Date”) and
      terminating on June 30, 2009 (the “Expiration Date”), subject to earlier
      termination as hereinafter provided (the employment period, as earlier
      terminated or as extended as provided for herein, being referred to as the
      “Term”).

     

    1.2  This
      Agreement will automatically renew for a one-year term upon its initial
      expiration unless (a) the Employee has voluntarily terminated his employment,
      (b) the Employee's employment has been earlier terminated as provided in this
      Agreement, (c) the Company provides to the Employee, on or before July 1, 2008,
      written notice that this Agreement is not to be renewed or (d) the Employee
      provides to the Company, on or before July 1, 2008, written notice that this
      Agreement is not to be renewed.

     

    1.3  Upon
      the
      expiration of the Term or the termination of the Employee’s employment with the
      Company for any reason whatsoever, whether during or following the Term, he
      shall be deemed to have resigned all of his positions as an employee, officer
      and director of the Company and of each and every subsidiary
      thereof.

     

    
      	
              2. 
                  

            	
              DUTIES

            


    

     

    2.1  During
      the Term, the Employee shall serve as the Company’s President, Chairman of the
      Board and Chief Executive Officer and shall perform duties of an executive
      character consisting of administrative and managerial responsibilities on behalf
      of the Company of the type and nature heretofore assigned to the Employee and
      such further duties of an executive character as shall, from time to time,
      be
      delegated or assigned to him by the Board of Directors of the Company (the
      “Board”) consistent with the Employee’s position.

     

    
      	
              3.  
                 

            	
              DEVOTION
                OF TIME

            


    

     

    3.1  During
      the Term, the Employee shall expend all of his working time for the Company;
      shall devote his best efforts, energy and skill to the services of the Company
      and the promotion of its interests; and shall not take part in activities
      detrimental to the best interests of the Company. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3.2  The
      Employee shall be permitted to engage in the following activities: (a) charity,
      social or civic work, (b) tend to personal financial and legal affairs, and
      (c)
      subject to the prior written consent of the Company (following Board approval),
      serve on the Board of Directors of, or advisor to, other business organizations,
      and engage in any other business or business-related activity, in each case
      (i.e., (a) through (c) above), provided that such activities do not interfere
      with his full-time services to the Company.  

     

    
      	
              4.   
                

            	
              COMPENSATION

            


    

     

    4.1  For
      all
      services to be rendered by the Employee during the Term, and in consideration
      of
      the Employee’s representations and covenants set forth in this Agreement, the
      Employee shall be entitled to receive from the Company compensation as set
      forth
      in Paragraphs 4.2, 4.3 and 4.4 below.

     

    4.2  During
      the Term, the Employee shall be entitled to receive a salary at the rate of
      three hundred fifty thousand dollars ($350,000) per annum (the “Base
      Salary”).  The Employee shall be entitled to increases in the Base
      Salary and other potential additional compensation as may be determined from
      time to time by the Board in its sole discretion.  All amounts due
      hereunder shall be payable in accordance with the Company’s standard payroll
      practices.

     

    4.3  (a)           Subject
      to the terms hereof, the Employee shall also be entitled to receive from the
      Company for each fiscal year during the Term a bonus (the “Bonus”) equal to the
      following percentage of the Company’s Net Income (as hereinafter defined) for
      such fiscal year (the “Bonus Payments”):

     

    Net
      Income                                                                Percentage

     

    Less
      than
      $500,00                                                           -0-

     

    $500,000
      -
      $999,999                                                          3%

     

    $1,000,000
      -
      $1,499,999                                                    4.5%

     

    $1,500,000
      or
      more                                                           6%

     

    As
      an illustration of the foregoing,
      subject to the provisions hereof, in the event that the Company’s Net Income for
      a particular fiscal year is $1,200,000, the Bonus would be $54,000 (assuming
      that the Employee remained in the employ of the Company for the entire fiscal
      year).

     

    (b)           For
      purposes hereof, the term “Net Income” for any particular fiscal year shall mean
      the Company's consolidated net income for such year determined in accordance
      with generally accepted accounting principles consistently applied, as audited
      and reported upon by the independent auditors of the Company, adjusted as
      follows:  (i) the after-tax effect of any extraordinary, exceptional
      or nonrecurring gain or loss, or any gain or loss arising from the sale of
      capital assets, including from the sale of stores, or arising out of any
      transaction in capital stock of the Company or any of its subsidiaries shall
      be
      excluded; and (ii) the Bonus (and any other bonus) paid, or accrued with the
      regard, to the Employee, but only the Employee, shall be excluded.

    


    
      
        2

      

      
         

        
          

        

      

      
         

      

    

    (c)           For
      purposes hereof, with respect to the fiscal year ending December 31, 2007,
      the
      Company’s Net Income shall be determined for the entire fiscal year
      (notwithstanding that the Effective Date falls within the fiscal
      year).

    


    (d)           For
      purposes hereof, with respect to the fiscal year in which this Agreement shall
      expire or terminate (the “Termination Year”) and for which, pursuant to the
      terms of this Agreement, the Employee is entitled to receive a Bonus, and
      subject to the provisions of Paragraph 6 hereof, the Company’s Net Income shall
      be determined for the period from the first day of the Termination Year until
      such expiration or termination date (the “Termination Date”) by multiplying the
      Company’s Net Income for the period from the first day of the Termination Year
      until the end of the fiscal quarter in which the Termination Date falls (the
      “Termination Quarter”) by a fraction, the numerator of which shall be the number
      of days from the first day of the Termination Year until the Termination Date
      (the “Number of Termination Year Days”) and the denominator of which shall be
      the total number of days from the first day of the Termination Year until the
      end of the Termination Quarter.  In the event the Termination Quarter
      shall be other than the last fiscal quarter of the Termination Year,
      notwithstanding that the term “Net Income” shall have the meaning ascribed to it
      by paragraph (b) hereof (as adjusted by the provisions of this paragraph (d)),
      the application of such term to this paragraph (d) shall not be subject to
      any
      adjustment based upon an audit or report of the Company’s independent auditors
      with respect to the Termination Year.

    


    (e)           In
      determining the amount of the Bonus for the Termination Year, the threshold
      dollar amounts set forth in paragraph (a) hereof shall be multiplied by a
      fraction, the numerator of which shall be the Number of Termination Year Days
      and the denominator of which shall be three hundred sixty-five
      (365).

    


    (f)           The
      Bonus shall be payable on an annual basis within thirty (30) days following
      the receipt by the Company of the report of its independent auditors, with
      regard to the Company’s Net Income for the particular fiscal year, calculated in
      accordance with paragraph (b) hereof and otherwise consistent with the
      consolidated financial statements of the Company for the fiscal year as set
      forth on any Form 10-K or 10-KSB filed with the Securities and Exchange
      Commission (the “SEC”), except that, with respect to any Termination Year in
      which the Termination Quarter is other than the last fiscal quarter of the
      Termination Year, the Bonus shall be payable within thirty (30) days following
      the determination by the Company’s chief financial officer of the Company’s Net
      Income through the end of the Termination Quarter, if any, calculated in
      accordance with paragraph (b) hereof and otherwise consistent with the
      consolidated financial statements of the Company for the period ended with
      the
      end of the Termination Quarter as set forth in any Form 10-Q or 10-QSB filed
      with the SEC.

    


    4.4  In
      the
      event that the Board adopts an executive bonus plan (the “Bonus Plan”) that
      provides for the payment of a bonus to the Chief Executive Officer of the
      Company, the Company will send to the Employee a written notice to such effect
      (the “Bonus Plan Notice”) and will offer therein to replace prospectively the
      provisions of Paragraph 4.3 hereof with those set forth in the Bonus Plan
      effective with the date set forth in the Bonus Plan Notice (the “Bonus Plan
      Effective Date”).  In the event the Employee desires to accept such
      offer, he shall do so by giving written notice thereof to the Chairman of the
      Compensation Committee of the Board (the “Committee Chairman”) within ten (10)
      days following his receipt of the Bonus Plan Notice.  In the event
      that the Employee timely notifies the Committee Chairman in writing of his
      acceptance of the offer, the provisions of Paragraph 4.3 hereof shall thereupon
      terminate, the day immediately preceding the Bonus Plan Effective Date shall
      be
      deemed to be the Termination Date for purposes of Paragraph 4.3 hereof and
      the
      Employee shall be entitled to receive a Bonus, if any, for the period ended
      with
      the Termination Date in accordance with the provisions of Paragraph 4.3
      hereof.

     

    
      
        3

      

      
         

        
          

        

      

      
         

      

    

    
      	
              5.   
                

            	
              REIMBURSEMENT
                OF EXPENSES

            


    

     

    5.1  Subject
      to Paragraph 5.3 hereof, the Company shall pay directly, or reimburse the
      Employee for, all reasonable and necessary expenses and disbursements incurred
      by the Employee for and on behalf of the Company in the performance of his
      duties during the Term.  Without limiting the generality of the
      foregoing, the Company shall pay directly, or reimburse the Employee for, fees
      payable for continuing education classes that are related to the Company’s
      business; provided, however, that, without the prior written consent of the
      Company (following Board approval), the maximum amount for which the Company
      shall be responsible with respect to such classes shall be three thousand
      dollars ($3,000) per annum.

     

    5.2  The
      Employee shall submit to the Company, not less than once in each calendar month,
      reports of such expenses and disbursements in form normally used by the Company
      and receipts with respect thereto and the Company’s obligations under Paragraph
      5.1 hereof shall be subject to compliance therewith.

     

    5.3  During
      the Term, the Employee shall be entitled to receive a monthly automobile
      allowance of one thousand dollars ($1,000) for any and all expenses related
      to
      the Employee’s automobile (i.e., lease payments, insurance, gas, tolls, parking,
      etc.).  Except for reimbursement of directly related automobile
      expenses (i.e. parking and tolls) incurred by the Employee while fulfilling
      his
      duties and responsibilities to the Company, but which are outside of the
      Employee’s normal day to day usage of his automobile, the Employee will not be
      entitled to any additional or alternative reimbursement for any other automobile
      related expenses.

     

    
      	
              6.   
                

            	
              DISABILITY;
                INSURANCE

            


    

     

    6.1           If,
      during the Term, the Employee, in the opinion of a majority of all of the
      members of the Board (excluding the Employee if he is a member), as confirmed
      by
      competent medical evidence, shall become physically or mentally incapacitated
      to
      perform his duties for the Company hereunder (“Disabled”) for a continuous
      period, then for the first six (6) months of such period he shall receive his
      full salary (subject to the following sentence, the “Salary Continuation
      Period”).  In no event, however, shall the Employee be entitled to
      receive any payments under this Paragraph 6.1 beyond the expiration or
      termination date of this Agreement.  Effective with the date of his
      resumption of full employment, the Employee shall be re-entitled to receive
      his
      full salary.  If such illness or other incapacity shall endure for a
      continuous period of at least nine (9) months or for at least two hundred fifty
      (250) business days during any eighteen (18) month period, the Company shall
      have the right, by written notice, to terminate the Employee’s employment
      hereunder as of a date (not less than thirty (30) days after the date of the
      sending of such notice) to be specified in such notice.  The Employee
      agrees to submit himself for appropriate medical examination to a physician
      of
      the Company’s designation as necessary for purposes of this Paragraph
      6.1.

    


    
      
        4

      

      
         

        
          

        

      

      
         

      

    

    6.2           The
      obligations of the Company under this Paragraph 6 may be satisfied, in whole
      or
      in part, by payments to the Employee under a disability insurance policy
      provided by the Company.

    


    6.3           Notwithstanding
      the foregoing, in the event, at the time of any apparent incapacity, the Company
      has in effect a disability policy with respect to the Employee, the Employee
      shall be considered Disabled for purposes of Paragraph 6.1 only if he is
      considered disabled for purposes of the policy.

    


    6.4           The
      Company agrees to obtain a disability insurance policy on behalf of the Employee
      (subject to the Employee’s satisfying any requirements therefor) and maintain
      such policy in effect during the Term.  In no event shall the Company
      be liable for premiums in excess of $6,500 per annum with respect
      thereto.

    


    6.5           In
      the event of the termination of the Employee’s employment based upon him
      becoming Disabled, as liquidated damages, the Employee shall be entitled to
      receive the compensation to which he is entitled until the expiration of the
      Salary Continuation Period pursuant to Paragraph 4.3 hereof (i.e., the
      Termination Date shall be considered the last day of the Salary Continuation
      Period).  The
      amount to be paid to the Employee pursuant to this Paragraph 6.5 shall
      constitute the sole and exclusive remedy of the Employee, and the Employee
      shall
      not be entitled to any other or further compensation, rights or benefits
      hereunder or otherwise.

     

    
      	
              7.    
                

            	
              RESTRICTIVE
                COVENANTS

            


    

     

    7.1  (a)           The
      services of the Employee are unique and extraordinary and essential to the
      business of the Company, especially since the Employee shall have access to
      the
      Company’s customer lists, trade secrets and other privileged and confidential
      information essential to the Company’s business.  Therefore, the
      Employee agrees that, if the term of his employment hereunder shall expire
      or
      his employment shall at any time terminate for any reason whatsoever, with
      or
      without Cause (as hereinafter defined) and with or without Good Reason (as
      hereinafter defined), the Employee will not at any time during the eighteen
      (18)
      month period commencing with the date on which the Employee ceases to be
      employed by the Company (the “Cessation Date”) (the “Restrictive Covenant
      Period”), without the prior written consent of the Company, directly or
      indirectly, whether individually or as a principal, officer, employee, partner,
      shareholder, member, manager, director, agent of, or consultant or independent
      contractor to, any entity,

     

    (i)  (A)
      anywhere within five (5) miles of the location of any office of the Company
      or
      any franchisee thereof or (B) with respect to the Company’s premium finance
      business and any other business with respect to which the Company requires
      a
      license to operate, within any state in which the Company has a license to
      operate, in each case at the Cessation Date, engage or participate in a business
      which, as of the Cessation Date, is similar to or competitive with, directly
      or
      indirectly, that of the Company, and shall not make any investments in any
      such
      similar or competitive entity, except that the foregoing shall not restrict
      the
      Employee from acquiring up to one percent (1%) of the outstanding voting stock
      of any entity whose securities are listed on a stock exchange or
      Nasdaq;

     

    
      
        5

      

      
         

        
          

        

      

      
         

      

    

    (ii)  cause
      or
      seek to persuade any director, officer, employee, customer, client, account,
      agent or supplier of, or consultant or independent contractor to, the Company,
      or others with whom the Company has a business relationship (collectively
“Business Associates”), to discontinue or materially modify the status,
      employment or relationship of such person or entity with the Company, or to
      become employed in any activity similar to or competitive with the activities
      of
      the Company;

     

    (iii)  cause
      or
      seek to persuade any prospective customer, client, account or other Business
      Associate of the Company (which at or about the Cessation Date was then actively
      being solicited by the Company) to determine not to enter into a business
      relationship with the Company or to materially modify its contemplated business
      relationship;

     

    (iv)  hire,
      retain or associate in a business relationship with, directly or indirectly,
      any
      director, officer or employee of the Company; or

     

    (v)  solicit
      or cause or authorize to be solicited, or accept, for or on behalf of him or
      any
      third party, any business from, or the entering into of a business relationship
      with,  (A) others who are, or were within one (l) year prior to the
      Cessation Date, a customer, client, account or other Business Associate of
      the
      Company, or (B) any prospective customer, client, account or other Business
      Associate of the Company which at or about the Cessation Date was then actively
      being solicited by the Company.

     

    The
      foregoing restrictions set forth in this Paragraph 7.1(a) shall apply likewise
      during the Term.

     

    7.2  The
      Employee agrees to disclose promptly in writing to the Board all ideas,
      processes, methods, devices, business concepts, inventions, improvements,
      discoveries, know-how and other creative achievements (hereinafter referred
      to
      collectively as “discoveries”), whether or not the same or any part thereof is
      capable of being patented, trademarked, copyrighted, or otherwise protected,
      which the Employee, while employed by the Company, conceives, makes, develops,
      acquires or reduces to practice, whether acting alone or with others and whether
      during or after usual working hours, and which are related to the Company’s
      business or interests, or are used or usable by the Company, or arise out of
      or
      in connection with the duties performed by the Employee.  The Employee
      hereby transfers and assigns to the Company all right, title and interest in
      and
      to such discoveries (whether conceived, made, developed, acquired or reduced
      to
      practice on or prior to the Effective Date or during his employment with the
      Company), including any and all domestic and foreign copyrights and patent
      and
      trademark rights therein and any renewals thereof.  On request of the
      Company, the Employee will, without any additional compensation, from time
      to
      time during, and after the expiration or termination of, the Term, execute
      such
      further instruments (including, without limitation, applications for copyrights,
      patents, trademarks and assignments thereof) and do all such other acts and
      things as may be deemed necessary or desirable by the Company to protect and/or
      enforce its right in respect of such discoveries.  All expenses of
      filing or prosecuting any patent, trademark or copyright application shall
      be
      borne by the Company, but the Employee shall cooperate, at the Company’s
      expense, in filing and/or prosecuting any such application.

     

    
      
        6

      

      
         

        
          

        

      

      
         

      

    

    7.3  (a)           The
      Employee represents that he has been informed that it is the policy of the
      Company to maintain as secret all confidential information relating to the
      Company, including, without limitation, any and all knowledge or information
      with respect to secret or confidential methods, processes, plans, materials,
      customer lists or data, or with respect to any other confidential or secret
      aspect of the Company’s activities, and further acknowledges that such
      confidential information is of great value to the Company.  The
      Employee recognizes that, by reason of his employment with the Company, he
      has
      acquired and will acquire confidential information as aforesaid.  The
      Employee confirms that it is reasonably necessary to protect the Company’s
      goodwill, and, accordingly, hereby agrees that he will not, directly or
      indirectly (except where authorized by the Board of Directors of the Company),
      at any time during the Term or thereafter divulge to any person, firm or other
      entity, or use, or cause or authorize any person, firm or other entity to use,
      any such confidential information.

     

    (b)           The
      Employee agrees that he will not, at any time, remove from the Company’s
      premises any drawings, notebooks, software, data or other confidential
      information relating to the business and procedures heretofore or hereafter
      acquired, developed and/or used by the Company, except where necessary in the
      fulfillment of his duties hereunder.

     

    (c)           The
      Employee agrees that, upon the expiration or termination of this Agreement
      or
      the termination of his employment with the Company for any reason whatsoever,
      he
      shall promptly deliver to the Company any and all drawings, notebooks, software,
      data and other documents and material, including all copies thereof, in his
      possession or under his control relating to any confidential information or
      discoveries, or which is otherwise the property of the Company.

     

    (d)           For
      purposes hereof, the term “confidential information” shall mean all information
      given to the Employee, directly or indirectly, by the Company and all other
      information relating to the Company otherwise acquired by the Employee during
      the course of his employment with the Company (whether on or prior to the
      Effective Date or hereafter), other than information which (i) was in the public
      domain at the time furnished to, or acquired by, the Employee, or (ii)
      thereafter enters the public domain other than through disclosure, directly
      or
      indirectly, by the Employee or others in violation of an agreement of
      confidentiality or nondisclosure.

     

    7.4  For
      purposes of this Paragraph 7, the term “Company” shall mean and include the
      Company and any and all subsidiaries and affiliates entities of the Company
      in
      existence from time to time.

     

    7.5  In
      connection with his agreement to the restrictions set forth in this Paragraph
      7,
      the Employee acknowledges the benefits accorded to him pursuant to the
      provisions of this Agreement, including, without limitation, the agreement
      on
      the part of the Company to employ the Employee during the Term (subject to
      the
      terms and conditions hereof). The Employee also acknowledges and agrees that
      the
      covenants set forth in this Paragraph 7 are reasonable and necessary in order
      to
      protect and maintain the proprietary and other legitimate business interests
      of
      the Company and that the enforcement thereof would not prevent the Employee
      from
      earning a livelihood.

     

    
      
        7

      

      
         

        
          

        

      

      
         

      

    

    
      	
              8.    
                

            	
              VACATIONS;
                LEAVE

            


    

     

    8.1  The
      Employee shall be entitled to an aggregate of four (4) weeks vacation time
      for
      each twelve (12) month period during the Term commencing as of January 1, 2007
      (i.e., January 1 through December 31), the time and duration thereof to be
      determined by mutual agreement between the Employee and the Board of Directors
      of the Company.  The parties acknowledge and agree that, as of the
      date hereof, the Employee has taken seven (7) days vacation time during
      2007.  Any vacation time not used by the end of the Term shall be
      forfeited without compensation.  In addition, the Employee shall not
      be entitled to carry over or use any vacation time that is unused as of the
      end
      of any twelve (12) month period during the Term.  Further, the
      Employee shall be entitled to the number of sick, personal, family, etc. days
      off during each twelve (12) month period of the Term as set forth in the
      Company’s employee handbook.

     

    
      	
              9.    
                

            	
              PARTICIPATION
                IN EMPLOYEE BENEFIT PLANS; STOCK
                OPTIONS

            


    

     

    9.1  The
      Employee shall be accorded the right to participate in and receive benefits
      under and in accordance with the provisions of any pension, profit sharing,
      insurance, medical and dental insurance or reimbursement (with family coverage)
      or other plan or program of the Company either in existence as of the Effective
      Date or thereafter adopted for the benefit generally of its executive
      employees.

     

    9.2  On
      the
      Effective Date, pursuant to the Company’s 2005 Equity Participation Plan and a
      Stock Option Agreement in, or substantially in, the form attached hereto as
      Exhibit A, the Company will grant to the Employee the right and option to
      purchase up to one hundred thirty thousand (130,000) shares of common stock
      of
      the Company upon the terms set forth in the Stock Option Agreement.

     

    
      	
              10.    
                

            	
              SERVICE
                AS OFFICER AND
                DIRECTOR

            


    

     

    10.1  During
      the Term, the Employee shall, if elected or appointed, serve as (a) an officer
      of the Company and/or any subsidiaries of the Company in existence or hereafter
      created or acquired and (b) a director of the Company and/or any such
      subsidiaries of the Company in existence or hereafter created or acquired,
      in
      each case without any additional compensation for such services.  In
      the event the Company has in effect during the Term a director and officer
      liability insurance policy, the Company will include the Employee therein as
      a
      named insured.

     

    
      	
              11.    
                

            	
              EARLIER
                TERMINATION

            


    

     

    11.1  The
      Employee’s employment hereunder shall automatically terminate upon his death,
      may terminate at the option of the Company in the event of Cause, and may
      terminate at the option of the Employee for Good Reason.

     

    11.2  The
      Employee’s employment may be terminated by the Company at any time during the
      Term upon written notice for Cause.   As used in this Agreement,
“Cause” shall mean the Employee’s commission of any act in the performance of
      his duties constituting common law fraud, a felony or other gross malfeasance
      of
      duty, the Employee’ s commission of any act involving moral turpitude, any
      material misrepresentation by the Employee (including, without limitation,
      a
      breach of any representation set forth in Paragraph 13.1 hereof, any breach
      of
      any material covenant on the Employee’s part herein set forth (which breach, if
      curable, is not cured by the Employee within ten (10) days of the Employee’s
      receipt of written notice thereof from the Company), or the Employee’s
      engagement in misconduct which is materially injurious to the Company or any
      of
      subsidiaries.

     

    
      
        8

      

      
         

        
          

        

      

      
         

      

    

    11.3  The
      Employee’s employment may be terminated by the Employee at any time during the
      Term for Good Reason.  As used in this Agreement, “Good Reason” shall
      mean (a) any breach of any material covenant on the Company’s part (which
      breach, if curable, is not cured by the Company within ten (10) days of the
      Company’s receipt of written notice thereof from the Employee), or (b) a
      material dimunition in the Employee’s duties and responsibilities (other than
      following an event constituting Cause) in his capacity as President, Chairman
      of
      the Board and Chief Executive Officer of the Company.

     

    11.4  Upon
      termination of the Employee’s employment by the Company for Cause or by the
      Employee without Good Reason, the Company shall have no further obligations
      to
      the Employee, and the Employee shall be entitled to no further compensation
      from
      the Company, except for any pro-rata amounts due to the Employee at such date
      of
      termination, as provided for in Paragraph 4.2 hereof, and except, in the case
      of
      a termination of employment by the Employee without Good Reason, for any Bonus
      amount for the completed fiscal year immediately preceding the date of
      termination, as provided in Paragraph 4.3 hereof.  As an illustration
      of the foregoing, in the event of a termination of employment by the Employee
      without Good Reason on March 1, the Employee would be entitled to receive the
      amount payable to him pursuant to Paragraph 4.2 hereof to March 1 and the
      amount, if any, payable to him pursuant to Paragraph 4.3 hereof for the
      immediately preceding fiscal year ended December 31.  In the event of
      the termination of the Employee’s employment by the Company for Cause or by the
      Employee without Good Reason, the amount to be paid to the Employee pursuant
      to
      this Paragraph 11.4 shall constitute the sole and exclusive remedy of the
      Employee, and the Employee shall not be entitled to any other or further
      compensation, rights or benefits hereunder or otherwise.

     

    11.5  In
      the
      event of the termination of the Employee’s employment by the Company during the
      Term without Cause or by the Employee for Good Reason, as liquidated damages,
      the Employee shall be entitled to receive (a) the compensation to which he
      would
      have been entitled until the expiration of the Term pursuant to Paragraph 4.2
      hereof and (b) the compensation to which he is entitled to receive until the
      Termination Date pursuant to Paragraph 4.3 hereof.  The compensation
      payable pursuant to (a) above shall be payable to the Employee in accordance
      with the Company’s standard payroll practices as if his employment had
      continued.  The amount to be paid to the Employee pursuant to this
      Paragraph 11.5 shall constitute the sole and exclusive remedy of the Employee,
      and the Employee shall not be entitled to any other or further compensation,
      rights or benefits hereunder or otherwise.

     

    11.6  In
      order
      to protect the Employee against the possible consequences and uncertainties
      of a
      Change of Control of the Company (as hereinafter defined) and thereby induce
      the
      Employee to remain in the employ of the Company, the Company agrees
      that:

     

    
      
        9

      

      
         

        
          

        

      

      
         

      

    

    (a)           If,
      during the Term, the Employee’s employment is terminated by the Company within
      eighteen (18) months subsequent to a Change of Control other than for Cause,
      the
      Company shall pay to the Employee an amount in cash equal to one and one-half
      (1.5) times the Employee’s annual salary in effect at the time of the
      termination of employment (the “Change of Control Payment”).  The
      Change of Control Payment shall be payable in two (2) equal installments, with
      the initial payment being  due and payable on the tenth day following
      the date of termination of employment and the remaining payment being due and
      payable on the one year anniversary of the date of termination of
      employment.  In addition, in such event, the Company shall continue to
      pay for the Employee’s health insurance premiums for the remainder of the
      Term.  The Change of Control Payment shall be in lieu of the amount
      payable to the Employee pursuant to Paragraph 11.5 hereof; provided, however,
      that, in the event that the termination of employment occurs more than eighteen
      (18) months prior to the Expiration Date, the Employee may elect to receive
      the
      amount payable pursuant to Paragraph 11.5 hereof in lieu of the amount payable
      pursuant to this Paragraph 11.6.  The amount to be paid to the
      Employee pursuant to this Paragraph 11.6 shall constitute the sole and exclusive
      remedy of the Employee, and the Employee shall not be entitled to any other
      or
      further compensation, rights or benefits hereunder or otherwise.

    


    (b)           As
      used in this Paragraph 11.6, a “Change of Control” shall be deemed to have
      occurred if

    


    (i)           any
      “person” or “group of persons” (as such terms are used in Sections 13(d) and
      14(d) of the Securities  Exchange Act of 1934, as amended (the “1934
      Act”), becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated
      under the 1934 Act), directly or indirectly, of securities of the Company
      representing more than thirty-three and one-third percent (33-1/3%) of the
      Company’s then outstanding securities having the right to vote on the election
      of directors (“Voting Securities”), except that there shall be excluded any
      Voting Securities acquired from the Company with respect to which the Employee
      gave his approval as a member of the Board;

    


    (ii)           when
      individuals who, as of the date hereof, constitute the Board (the “Incumbent
      Board”) cease for any reason to constitute at least a majority of the Board;
      provided, however, that any individual becoming a director subsequent to the
      date hereof whose election, or nomination for election by the Company’s
      stockholders, was approved by a vote of at least a majority of the directors
      then comprising the Incumbent Board shall be considered as though such
      individual were a member of the Incumbent Board, but excluding, for this
      purpose, any such individual whose initial assumption of office occurs as a
      result of an actual or threatened election contest with respect to the election
      or removal of directors or other actual or threatened solicitation of proxies
      or
      consents by or on behalf of a person or entity other than the Board;
      or

    


    (iii)           the
      Company consummates (A) a reorganization, merger or consolidation of the
      Company, with respect to which in each case all or substantially all of the
      individuals and entities who were the beneficial owners of the Voting Securities
      of the Company immediately prior to such reorganization, merger or consolidation
      do not, following such reorganization, merger or consolidation, beneficially
      own, directly and indirectly, more than 50% of the then combined voting power
      of
      the then outstanding voting securities entitled to vote generally in the
      election of directors of the corporation or other entity resulting from such
      reorganization, merger of consolidation, or (B) the sale or other disposition
      of
      all or substantially all of the assets of the Company.

    


    
      
        10

      

      
         

        
          

        

      

      
         

      

    

    11.7  The
      termination or expiration of this Agreement shall not affect the continuing
      operation and effect of Paragraph 7 hereof, which shall continue in full force
      and effect according to its terms.  In addition, the termination or
      expiration of this Agreement will not result in a termination or waiver of
      any
      rights and remedies that the Company may have under this Agreement and
      applicable law.

     

    
      	
              12.    
                

            	
              INJUNCTIVE
                RELIEF; REMEDIES

            


    

     

    12.1  The
      Employee acknowledges and agrees that, in the event he shall violate or threaten
      to violate any of the restrictions of Paragraph 3 or 7 hereof, the Company
      will
      be without an adequate remedy at law and will therefore be entitled to enforce
      such restrictions by temporary or permanent injunctive or mandatory relief
      in
      any court of competent jurisdiction without the necessity of proving
      damages.

     

    12.2  The
      Employee agrees further that the Company shall have the following additional
      rights and remedies:

     

    (i)           The
      right and remedy to require the Employee to account for and pay over to the
      Company all monies and other consideration derived or received by him as the
      result of any transactions constituting a breach of any of the provisions of
      Paragraph 7.1, and the Employee hereby agrees to account for and pay over such
      monies and other consideration to the Company; and

     

    (ii)           The
      right to recover attorneys’ fees incurred in any action or proceeding in which
      it seeks to enforce its rights under Paragraph 7 hereof and is successful on
      any
      grounds.

     

    12.3  Each
      of
      the rights and remedies enumerated above shall be independent of the other,
      and
      shall be severally enforce­able, and all of such rights and remedies shall
      be in addition to, and not in lieu of, any other rights and remedies available
      to the Company under law or in equity.

     

    12.4  The
      parties hereto intend to and hereby confer jurisdiction to enforce the covenants
      contained in Paragraph 7.1 upon the courts of any jurisdiction within the
      geographical scope of such covenants (a “Jurisdiction”).  In the event
      that the courts of any one or more of such Jurisdictions shall hold such
      covenants unenforceable by reason of the breadth of their scope or otherwise,
      it
      is the intention of the parties hereto that such determination not bar or in
      any
      way affect the Company’s right to the relief provided above in the courts of any
      other Jurisdiction, as to breaches of such covenants in such other respective
      Jurisdictions, the above covenants as they relate to each Jurisdiction being,
      for this purpose, severable into diverse and independent covenants.

     

    
      	
              13.    
                

            	
              NO
                RESTRICTIONS

            


    

     

    13.1  The
      Employee hereby represents that neither the execution of this Agreement nor
      his
      performance hereunder will (a) violate, conflict with or result in a breach
      of
      any provision of, or constitute a default (or an event which, with notice or
      lapse of time or both, would constitute a default) under the terms, conditions
      or provisions of any contract, agreement or other instrument or obligation
      to
      which the Employee is a party, or by which he may be bound, or (b) violate
      any
      order, judgment, writ, injunction or decree applicable to the
      Employee.  In the event of a breach hereof, in addition to the
      Company’s right to terminate this Agreement, the Employee shall indemnify the
      Company and hold it harmless from and against any and all claims, losses,
      liabilities, costs and expenses (including reasonable attorneys’ fees) incurred
      or suffered in connection with or as a result of the Company’s entering into
      this Agreement or employing the Employee hereunder.

     

    
      
        11

      

      
         

        
          

        

      

      
         

      

    

    
      	
              14.     
                

            	
              ARBITRATION

            


    

     

    14.1           Except
      with regard to Paragraph 12.1 hereof and any other matters that are not a proper
      subject of arbitration, all disputes between the parties hereto concerning
      the
      performance, breach, construction or interpretation of this Agreement or any
      portion thereof, or in any manner arising out of this Agreement or the
      performance thereof, shall be submitted to binding arbitration, in accordance
      with the rules of the American Arbitration Association.  The
      arbitration proceeding shall take place at a mutually agreeable location in
      Nassau County, New York or such other location as agreed to by the
      parties.

    


    14.2           The
      award rendered by the arbitrator shall be final, binding and conclusive, shall
      be specifically enforceable, and judgment may be entered upon it in accordance
      with applicable law in the appropriate court in the State of New York, with
      no
      right of appeal therefrom.

    


    14.3  Each
      party shall pay its or his own expenses of arbitration, and the expenses of
      the
      arbitrator and the arbitration proceeding shall be equally shared; provided,
      however, that, if, in the opinion of the arbitrator (or a majority of the
      arbitrators if more than one), any claim or defense was unreasonable, the
      arbitrator(s) may assess, as part of their award, all or any part of the
      arbitration expenses of the other party (including reasonable attorneys’ fees)
      and of the arbitrator(s) and the arbitration proceeding against the party
      raising such unreasonable claim or defense; provided, further, that, if the
      arbitration proceeding relates to the issue of Cause for termination of
      employment, (a) if, in the opinion of a majority of the arbitrators, Cause
      existed, the arbitrator(s) shall assess, as part of their award, all of the
      arbitration expenses of the Company (including reasonable attorneys’ fees) and
      of the arbitrator(s) and the arbitration proceeding against the Employee or
      (b)
      if, in the opinion of a majority of the arbitrator(s), Cause did not exist,
      the
      arbitrator(s) shall assess, as part of their award, all of the arbitration
      expenses of the Employee (including reasonable attorneys’ fees) and of the
      arbitrator(s) and the arbitration proceeding against the Company.

    


    
      	
              15.    
                

            	
              ASSIGNMENT

            


    

     

    15.1  This
      Agreement, as it relates to the employment of the Employee, is a personal
      contract and the rights and interests of the Employee hereunder may not be
      sold,
      transferred, assigned, pledged or hypothecated.

     

    
      	
              16.    
                

            	
              NOTICES

            


    

     

    16.1  Any
      notice required or permitted to be given pursuant to this Agreement shall be
      deemed to have been duly given when delivered by hand or sent by certified
      or
      registered mail, return receipt requested and postage prepaid, overnight mail
      or
      courier or telecopier as follows:

     

    
      
        12

      

      
         

        
          

        

      

      
         

      

    

    If
      to the
      Employee:

     

    P.O.
      Box
      450

    Hewlett,
      New York  11557

    Telecopier
      Number: (516) 374-4484

    


    If
      to the
      Company:

     

    c/o
      Jack
      Seibald

    Chairman,
      Compensation Committee

    1010
      Franklin Avenue

    Suite
      303

    Garden
      City, New York 11530

    Telecopier
      Number:  (516) 248-4278

     

    with
      a
      copy to:

     

    Certilman
      Balin Adler & Hyman, LLP

    90
      Merrick Avenue

    East
      Meadow, New York 11554

    Attention:  Fred
      Skolnik, Esq.

    Telecopier
      Number:  (516) 296-7111

     

    or
      at
      such other address as any party shall designate by notice to the other party
      given in accordance with this Paragraph 16.1.

     

    
      	
              17.    
                

            	
              GOVERNING
                LAW

            


    

     

    17.1  This
      Agreement shall be governed by, and construed and enforced in accordance with,
      the laws of the State of New York applicable to agreements made and to be
      performed entirely in New York.

     

    
      	
              18.    
                

            	
              WAIVER
                OF BREACH; PARTIAL
                INVALIDITY

            


    

     

    18.1  The
      waiver by either party of a breach of any provision of this Agreement shall
      not
      operate or be construed as a waiver of any subsequent breach.  If any
      provision, or part thereof, of this Agreement shall be held to be invalid or
      unen­forceable, such invalidity or unenforceability shall attach only to
      such provision and not in any way affect or render invalid or unenforceable
      any
      other provisions of this Agreement, and this Agreement shall be carried out
      as
      if such invalid or unenforceable provision, or part thereof, had been reformed,
      and any court of competent jurisdiction or arbitrators, as the case may be,
      are
      authorized to so reform such invalid or unenforceable provision, or part
      thereof, so that it would be valid, legal and enforceable to the fullest extent
      permitted by applicable law.

     

    
      
        13

      

      
         

        
          

        

      

      
         

      

    

    
      	
              19.    
                

            	
              ENTIRE
                AGREEMENT

            


    

     

    19.1  This
      Agreement constitutes the entire agreement between the parties with respect
      to
      the subject matter hereof and there are no representations, warranties or
      commitments except as set forth herein.  This Agreement supersedes all
      prior agreements, understandings, negotiations and discussions, whether written
      or oral, of the parties hereto relating to the subject matter
      hereof.  This Agreement may be amended, and any provision hereof
      waived, only by a writing executed by the party sought to be
      charged.  No amendment or waiver on the part of the
      Company  shall be valid unless approved by its Board.

     

    
      	
              20.    
                

            	
              COUNTERPARTS

            


    

     

    20.1  This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original, and all of which taken together shall constitute one and
      the
      same instrument.

     

    
      	
              21.    
                

            	
              FACSIMILE
                SIGNATURES

            


    

     

    21.1  Signatures
      hereon which are transmitted via facsimile shall be deemed original
      signatures.

     

    
      	
              22.    
                

            	
              REPRESENTATION
                BY COUNSEL;
                INTERPRETATION

            


    

     

    22.1  The
      Employee acknowledges that he has been represented by counsel in connection
      with
      this Agreement. Accordingly, any rule or law or any legal decision that would
      require the interpretation of any claimed ambiguities in this Agreement against
      the party that drafted it has no application and is expressly waived by the
      Employee.  The provisions of this Agreement shall be interpreted in a
      reasonable manner to give effect to the intent of the parties
      hereto.

     

    
      	
              23.    
                

            	
              HEADINGS

            


    

     

    23.1  The
      headings and captions under sections and paragraphs of this Agreement are for
      convenience of reference only and do not in any way modify, interpret or
      construe the intent of the parties or affect any of the provisions of this
      Agreement.

     

    [Remainder
      of page intentionally left blank.  Signature page
      follows.]

     

     

    
      
        14

      

      
         

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF,
      the undersigned have executed this Agreement as of the day and year above
      written.

     

    
      	 	
              DCAP
                GROUP, INC.

            	 
	 	 	 	 
	
               

            	
              By:
                

            	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	  	 
	 	  Barry
              B. Goldstein