UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
(Rule
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed
by the Registrant
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[X]
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Filed
by a Party other than the Registrant
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[ ]
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Check
the appropriate box:
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[ ]
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Preliminary
Proxy Statement
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[ ]
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Confidential,
For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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[X]
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Definitive
Proxy Statement
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[ ]
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Definitive
Additional Materials
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[ ]
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Soliciting
Material Pursuant to Section
240.14a-12
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DCAP
GROUP, INC.
(Name
of
Registrant as Specified in its Charter)
(Name
of
Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
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[X]
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No
fee required
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[ ]
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11
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1)
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Title
of each class of securities to which transaction applies:
not
applicable
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2)
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Aggregate
number of securities to which transaction applies:
not
applicable
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3)
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Per
unit price or
other underlying value
of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
not
applicable
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4)
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Proposed
maximum aggregate value of transaction:
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5)
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Total
fee paid:
not
applicable
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[ ]
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Fee
paid previously with preliminary materials:
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[ ]
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Check
box if any part of the fee is offset as provided by Exchange Act
Rule
0-11(a)(2) and identify the filing for which
the offsetting fee was paid
previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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1)
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Amount
previously paid:
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2)
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Form,
Schedule or Registration Statement No.:
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3)
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Filing
Party:
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4)
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Date
Filed:
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DCAP
GROUP, INC.
1158
Broadway
Hewlett,
New York 11557
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON NOVEMBER 20, 2007
To
the
Stockholders of DCAP Group, Inc.:
NOTICE
IS HEREBY GIVEN that the Annual Meeting of Stockholders of DCAP Group,
Inc., a Delaware corporation, will be held on November 20, 2007 at 90 Merrick
Avenue, 9th Floor, East Meadow, New York, at 10:00 a.m., for the following
purposes:
1.
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To
elect five directors for the coming
year.
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2.
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To
transact such other business as may properly come before the
meeting.
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Only
stockholders of record at the close of business on October 11, 2007 are entitled
to notice of and to vote at the meeting or at any adjournment
thereof.
Morton
L.
Certilman
Secretary
Hewlett,
New York
October
17, 2007
WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE VOTE, DATE AND SIGN
THE
ENCLOSED PROXY, WHICH IS SOLICITED BY OUR BOARD OF DIRECTORS, AND
RETURN
IT IN THE PRE-ADDRESSED ENVELOPE PROVIDED FOR THAT PURPOSE. ANY
STOCKHOLDER MAY REVOKE HIS PROXY AT ANY TIME BEFORE THE MEETING
BY WRITTEN
NOTICE TO SUCH EFFECT, BY SUBMITTING A SUBSEQUENTLY DATED PROXY
OR BY
ATTENDING THE MEETING AND VOTING IN
PERSON.
|
DCAP
GROUP, INC.
1158
Broadway
Hewlett,
New York 11557
____________________________
PROXY
STATEMENT
____________________________
EXPLANATORY
NOTE
All
references in this proxy statement to numbers of common shares and per share
information give retroactive effect to the one-for-five reverse split of
our
common shares effected as of August 26, 2004.
SOLICITING,
VOTING AND REVOCABILITY OF PROXY
This
proxy statement is being mailed to all stockholders of record at the close
of
business on October 11, 2007 in connection with the solicitation by the Board
of
Directors of proxies to be voted at the Annual Meeting of Stockholders to
be
held on November 20, 2007 at 10:00 a.m., local time, or any adjournment
thereof. The proxy and this proxy statement were mailed to
stockholders on or about October 17, 2007.
All
shares represented by proxies duly executed and received will be voted on
the
matters presented at the meeting in accordance with the instructions specified
in such proxies. Proxies so received without specified instructions
will be voted FOR the nominees named in the proxy to our Board
of Directors.
Our
Board
does not know of any other matters that may be brought before the meeting
nor
does it foresee or have reason to believe that proxy holders will have to
vote
for substitute or alternate nominees to the Board. In the event that
any other matter should come before the meeting or any nominee is not available
for election, the person named in the enclosed proxy will have discretionary
authority to vote all proxies not marked to the contrary with respect to
such
matters in accordance with his best judgment.
The
total
number of common shares outstanding and entitled to vote as of October 11,
2007
was 2,973,524. The common shares are the only class of securities
entitled to vote on matters presented to our stockholders, each share being
entitled to one vote.
Our
Restated Certificate of Incorporation provides for cumulative voting of shares
for the election of directors. This means that each stockholder has
the right to cumulate his votes and give to one or more nominees as many
votes
as equals the number of directors to be elected (five) multiplied by the
number
of shares he is entitled to vote. A stockholder may therefore cast
his votes for one nominee or distribute them among two or more of the
nominees. A majority of the common shares outstanding and entitled to
vote as of October 11, 2007, or 1,486,762 common shares, must be present
at the
meeting in person or by proxy in order to constitute a quorum for the
transaction of business. Only stockholders of record as of the close
of business on October 11, 2007 will be entitled to vote. With regard
to the election of directors, votes may be cast in favor or
withheld. The directors shall be elected by a plurality of the votes
cast in favor. Accordingly, based upon there being five nominees,
each person who receives one or more votes will be elected as a
director. Votes withheld in connection with the election of one or
more of the nominees for director will not be counted as votes cast for such
individuals and may be voted for the other nominees.
Any
person giving a proxy in the form accompanying this proxy statement has the
power to revoke it at any time before its exercise. The proxy may be
revoked by filing with us written notice of revocation or a fully executed
proxy
bearing a later date. The proxy may also be revoked by affirmatively
electing to vote in person while in attendance at the
meeting. However, a stockholder who attends the meeting need not
revoke a proxy given and vote in person unless the stockholder wishes to
do
so. Written revocations or amended proxies should be sent to us at
1158 Broadway, Hewlett, New York 11557, Attention: Corporate
Secretary.
The
proxy
is being solicited by our Board of Directors. We will bear the cost
of the solicitation of proxies, including the charges and expenses of brokerage
firms and other custodians, nominees and fiduciaries for forwarding proxy
materials to beneficial owners of our shares. Solicitations will be
made primarily by mail, but certain of our directors, officers or employees
may
solicit proxies in person or by telephone, telecopier or email without special
compensation.
A
list of
stockholders entitled to vote at the meeting will be available for examination
by any stockholder for any purpose germane to the meeting, during ordinary
business hours, for ten days prior to the meeting, at our offices, 1158
Broadway, Hewlett, New York 11557, and also during the whole time of the
meeting
for inspection by any stockholder who is present. To contact us,
stockholders should call (516) 374-7600.
EXECUTIVE
COMPENSATION
SUMMARY
COMPENSATION TABLE
The
following table sets forth certain information concerning the compensation
for
the fiscal year ended December 31, 2006 for Barry B. Goldstein, our Chief
Executive Officer:
Name
and
Principal
Position
|
Year
|
Salary
|
All
Other
Compensation
|
Total
|
|
|
|
|
|
Barry
B. Goldstein
Chief
Executive Officer
|
2006
|
$350,000
|
$54,942(1)
|
$404,942
|
___________
(1)
|
Includes
payment on behalf of Mr. Goldstein of country club dues of
$28,532.
|
Employment
Contracts
Mr.
Goldstein is employed as our President, Chairman of the Board and Chief
Executive Officer pursuant to an employment agreement that expires on June
30,
2009. Mr. Goldstein is entitled to receive a salary of $350,000 per
annum (which base salary has been in effect since January 1, 2004) and
annual bonuses based on our net income.
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
The
following table sets forth certain
information concerning unexercised options held by Barry B. Goldstein, our
Chief
Executive Officer, as of December 31, 2006:
|
|
Name
|
Number
of Securities
Underlying
Unexercised
Options
|
Option
Exercise
Price
|
Option
Expiration
Date
|
|
Exercisable
|
|
|
|
|
|
|
Barry
B. Goldstein
|
66,000
(1)
|
$1.50
|
5/15/07
|
___________
(1)
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Such
options were exercisable since May 15, 2002 and were exercised
in full in
January and February 2007.
|
Termination
of Employment and Change-in-Control
Arrangements
Pursuant
to the employment agreement with Mr. Goldstein and as provided for in Mr.
Goldstein’s prior employment agreement which expired on April 1, 2007, he would
be entitled, under certain circumstances, to a payment equal to one and one-half
times his then annual salary in the event of the termination of his employment
following a change of control of DCAP. In addition, in the event Mr.
Goldstein’s employment is terminated by us without cause or he resigns with good
reason (each as defined in the employment agreement), Mr. Goldstein will
be
entitled to receive his base salary and bonuses for the remainder of the
term.
DIRECTOR
COMPENSATION
The
following table sets forth certain information concerning the compensation
of
our directors for the fiscal year ended December 31, 2006:
Name
|
Fees
Earned or
Paid
in Cash
|
Option
Awards
|
All
Other
Compensation
|
Total
|
|
|
|
|
|
Morton
L. Certilman
|
$19,500
|
-
|
$49,900
(1)
|
$69,400
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Jay
M. Haft
|
$23,625
|
-
(2)
|
-
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$23,625
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David
A. Lyons
|
$29,125
|
-
(3)
|
-
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$29,125
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Jack
D. Seibald
|
$24,125
|
-
|
-
|
$24,125
|
____________
(1)
|
Represents
consulting fees paid to Mr.
Certilman.
|
(2)
|
As
of December 31, 2006, Mr. Haft held options for the purchase of
25,000
common shares.
|
(3)
|
As
of December 31, 2006, Mr. Lyons held options for the purchase of
20,000
common shares.
|
Our
non-employee directors are entitled to receive compensation for their services
as directors as follows:
·
|
$15,000
per annum
|
·
|
additional
$5,000 per annum for committee chair
|
·
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$500
per Board meeting attended ($250 if telephonic)
|
·
|
$250
per committee meeting attended ($125 if
telephonic)
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS
AND MANAGEMENT
Security
Ownership
The
following table sets forth certain information as of October 11, 2007 regarding
the beneficial ownership of our common shares by (i) each person who we believe
to be the beneficial owner of more than 5% of our outstanding common shares,
(ii) each present director, (iii) each person listed in the Summary Compensation
Table under “Executive Compensation,” and (iv) all of our present executive
officers and directors as a group:
Name
and Address
of
Beneficial Owner
|
Number
of Shares
Beneficially
Owned
|
Approximate
Percent
of Class
|
|
|
|
Infinity
Capital Partners, L.P.
767
Third Avenue, 16th Floor
New
York, New York
|
415,649(1)(2)
|
14.0%
|
|
|
|
Barry
B. Goldstein
1158
Broadway
Hewlett,
New York
|
393,400(1)(3)
|
13.2%
|
|
|
|
AIA
Acquisition Corp
6787
Market Street
Upper
Darby, Pennsylvania
|
361,600(4)
|
10.9%
|
|
|
|
Eagle
Insurance Company
c/o
The Robert Plan
Corporation
999
Stewart Avenue
Bethpage,
New York
|
297,378(5)
|
10.0%
|
|
|
|
Jack
D. Seibald
1336
Boxwood Drive West
Hewlett
Harbor, New York
|
274,750(1)(6)
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9.1%
|
|
|
|
Morton
L. Certilman
90
Merrick Avenue
East
Meadow, New York
|
170,248(1)
|
5.7%
|
|
|
|
Jay
M. Haft
69
Beaver Dam Road
Salisbury,
Connecticut
|
157,278(1)(7)
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5.3%
|
|
|
|
David
A. Lyons
252
Brookdale Road
Stamford,
Connecticut
|
20,000(8)
|
*
|
|
|
|
All
executive officers
and
directors as a group
(6
persons)
|
1,030,557(1)(2)(5)
(7)(8)(9)
|
33.7%
|
_______________
* Less
than 1%
(1)
|
Based
upon Schedule 13D filed under the Securities Exchange Act of 1934,
as
amended, and other information that is publicly
available.
|
|
|
(2)
|
Each
of (i) Infinity Capital, LLC (“Capital”), as the general partner of
Infinity Capital Partners, L.P. (“Partners”), (ii) Infinity Management,
LLC (“Management”), as the Investment Manager of Partners, and (iii)
Michael Feinsod, as the Managing Member of Capital and Management,
the
General Partner and Investment Manager, respectively, of Partners,
may be
deemed to be the beneficial owners of the shares held by Partners.
Pursuant to the Schedule 13D filed under the Securities Exchange
Act of
1934, as amended, by Partners, Capital, Management and Mr. Feinsod,
each
has sole voting and dispositive power over the shares.
|
|
|
(3)
|
Includes
(i) 8,500 shares held by Mr. Goldstein’s children, and (ii) 11,900 shares
held in a retirement trust for the benefit of Mr. Goldstein. Mr.
Goldstein
disclaims beneficial ownership of the shares held by his children
and
retirement trust. Excludes shares owned by AIA Acquisition Corp.
of which
members of Mr. Goldstein’s family are principal
stockholders.
|
|
|
(4)
|
Based
upon Schedule 13G filed under the Securities Exchange Act of 1934,
as
amended, and other information that is publicly available. Includes
312,000 shares issuable upon the conversion of preferred shares
that are
currently convertible.
|
|
|
(5)
|
Eagle
is a wholly-owned subsidiary of The Robert Plan Corporation. We
have been
advised that, pursuant to an Order of Rehabilitation filed with
the
Superior Court of New Jersey, Mercer County on January 29, 2007,
the
Commissioner of the Department of Banking and Insurance of the
State of
New Jersey has been vested with title to the shares registered
in Eagle’s
name. We have been advised further that, on August 9, 2007, the
Court determined that Eagle was insolvent, and it terminated the
rehabilitation phase of the proceedings and issued an Order of
Liquidation. Such order has been stayed pending
appeal.
|
|
|
(6)
|
Represents
(i) 113,000 shares owned jointly by Mr. Seibald and his wife, Stephanie
Seibald; (ii) 100,000 shares owned by SDS Partners I, Ltd., a limited
partnership (“SDS”); (iii) 3,000 shares owned by Boxwood FLTD Partners, a
limited partnership (“Boxwood”); (iv) 33,000 shares owned by Stewart
Spector IRA (“S. Spector”); (v) 3,000 shares owned by Barbara Spector IRA
Rollover (“B. Spector”); (vi) 4,000 shares owned by Karen Dubrowsky IRA
(“Dubrowsky”); and (vii) 18,750 shares issuable upon the exercise of
currently exercisable warrants. Mr. Seibald has voting and dispositive
power over the shares owned by SDS, Boxwood, S. Spector, B. Spector
and
Dubrowsky. The amount reflected as owned by S. Spector includes
30,000
shares issuable upon the exercise of currently exercisable
warrants.
|
|
|
(7)
|
Includes
3,076 shares held in a retirement trust for the benefit of Mr.
Haft.
|
|
|
(8)
|
Represents
shares issuable upon the exercise of currently exercisable
options.
|
|
|
(9)
|
Includes
14,881 shares issuable upon the exercise of currently exercisable
options
held by an executive officer.
|
Securities
Authorized for Issuance Under Equity Compensation
Plans
The
following table sets forth information as of December 31, 2006 with respect
to
compensation plans (including individual compensation arrangements) under
which
our common shares are authorized for issuance, aggregated as
follows:
·
|
All
compensation plans previously approved by security holders;
and
|
·
|
All
compensation plans not previously approved by security
holders.
|
EQUITY
COMPENSATION PLAN INFORMATION
|
|
Number
of securities to be issued upon exercise of outstanding options,
warrants
and rights
|
|
|
Weighted
average exercise price of outstanding options, warrants and
rights
|
|
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
|
|
Equity
compensation plans approved by security holders
|
|
|
193,300
|
|
|
|
2.34
|
|
|
|
682,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
compensation plans not approved by security holders
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
193,300
|
|
|
|
$2.34
|
|
|
|
682,000
|
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Guaranty
In
July
2003, Barry Goldstein, our President and Chief Executive Officer, guaranteed
the
repayment of $2,500,000 of an $18,000,000 line of credit from Manufacturers
and
Traders Trust Company (“M&T”) utilized by our subsidiary, Payments Inc., to
finance its premium finance business. Mr. Goldstein also executed a wind-down
guaranty pursuant to which, among other things, he agreed with M&T that, in
the event M&T had the right to foreclose upon the collateral securing the
line, Mr. Goldstein would use his best efforts to assist M&T in the
foreclosure process. Pursuant to the wind-down guaranty, Mr. Goldstein is
also
responsible for any loss suffered by M&T by reason of any breach or
misrepresentation that involves, is connected with or arises out of any
dishonest or fraudulent act or omission either committed by Mr. Goldstein
or
known but not timely reported by him to M&T. Effective April 30, 2005,
pursuant to the terms of the financing agreement, Mr. Goldstein’s payment
guaranty was reduced to $1,250,000. Effective July 28, 2006, in connection
with
a restructuring and extension of the line of credit, Mr. Goldstein’s payment
guaranty terminated; however, the wind-down guaranty remains in effect. In
consideration of the payment guaranty, and for so long as the payment guaranty
remained in effect, we paid Mr. Goldstein $50,000 per annum and reimbursed
him
for all premiums paid by him on a $2,500,000 insurance policy on his life
required by M&T in connection with the financing. In consideration of the
wind-down guaranty, in July 2006, we paid Mr. Goldstein a one-time fee of
$50,000.
Subordinated
Debt Financing
Effective
July 10, 2003, in order to fund our premium finance operations, we obtained
$3,500,000 from a private placement of subordinated debt. The subordinated
debt
was initially repayable on January 10, 2006 and provides for interest at
the
rate of 12.625% per annum, payable semi-annually. Subject to M&T’s consent,
we have the right to prepay the subordinated debt. During 2005, we utilized
our
M&T line of credit to repay $2,000,000 of the subordinated
debt.
In
consideration of the debt financing, we issued to the lenders warrants for
the
purchase of an aggregate of 105,000 of our common shares at an exercise price
of
$6.25 per share. The warrants were initially scheduled to expire on January
10,
2006. Effective May 25, 2005, the holders of the remaining $1,500,000 of
subordinated debt agreed to extend the maturity date of the debt to September
30, 2007. The debt extension was given to satisfy a requirement of M&T that
arose in connection with the December 2004 increase in M&T’s revolving line
of credit to $25,000,000 and the extension of the line to June 30, 2007.
In
consideration for the extension of the due date for the subordinated debt,
we
extended the expiration date of warrants held by the debtholders for the
purchase of 97,500 common shares to September 30, 2007. Between March 2007
and
September 2007, the holders of the outstanding subordinated debt agreed to
a
further extension of the due date to September 30, 2008. In consideration
for
such further extension, we further extended the expiration date of the warrants
held by the debtholders to September 30, 2008.
One
of
the private placement lenders was a retirement trust established for the
benefit
of Jack Seibald which loaned us $625,000 and was issued a warrant for the
purchase of 18,750 of our common shares. Mr. Seibald is one of our principal
stockholders and, effective September 2004, became one of our directors.
Mr.
Seibald’s retirement trust currently holds approximately $288,000 of the
subordinated debt and he indirectly owns or controls 48,750 warrants, including
those issued at the time of the loan.
In
September 2007, a limited liability company of which Mr. Goldstein is a minority
member purchased from a debtholder a subordinated note in the approximate
principal amount of $115,000 and a warrant for the purchase of 7,500
shares. In connection with the purchase, the maturity date of the
debt and the expiration date of the warrant were extended as discussed
above.
Commercial
Mutual Insurance Company
On
January 31, 2006, we purchased from Eagle Insurance Company two surplus notes
in
the aggregate principal amount of $3,750,000 issued by Commercial Mutual
Insurance Company. The aggregate purchase price for the surplus notes was
$3,075,141, of which $1,303,434 was paid to Eagle by delivery of a six month
promissory note. The promissory note was paid in full in July 2006. Commercial
Mutual is a New York property and casualty insurer. Eagle is a New Jersey
property and casualty insurer that was being operated by the New Jersey
Department of Banking and Insurance pursuant to an Order of Rehabilitation
issued by the Superior Court of New Jersey. On August 9, 2007, the Court
determined that Eagle was insolvent, and it terminated the rehabilitation
phase
of the proceedings and issued an Order of Liquidation. Such order has
been stayed pending appeal. Eagle owns approximately 10% of our
outstanding common stock.
Robert
Wallach, one of our directors at the time of purchase, is Vice President
of
Eagle and Chief Executive Officer and Chairman of Eagle’s parent, The Robert
Plan Corporation. Additionally, until our purchase of the surplus notes,
Mr.
Wallach and a number of other Eagle employees were directors of Commercial
Mutual. Further, concurrently with the purchase, and following the resignations
of Mr. Wallach and four other directors of Commercial Mutual, Jack Seibald,
one
of our directors, and four other persons (including one of our employees)
were
elected by the remaining Commercial Mutual directors to the eleven person
Board
of Directors of Commercial Mutual. In addition, the new Commercial Mutual
Board
of Directors elected Barry Goldstein, our President and Chief Executive Officer,
as its Chairman. Mr. Goldstein had been elected as a director of Commercial
Mutual in December 2005.
Preferred
Stock Exchange
Effective
March 23, 2007, we issued 780 Series B preferred shares to AIA Acquisition
Corp.
in exchange for an equal number of our outstanding Series A preferred shares.
The terms of the Series B preferred shares are substantially identical to
those
of the Series A preferred shares, except that they are mandatorily redeemable
on
April 30, 2008 (as opposed to April 30, 2007 for the Series A preferred shares).
The current aggregate redemption amount for the Series B preferred shares
is
$780,000, plus accumulated and unpaid dividends. AIA Acquisition Corp., as
the
holder of the Series B preferred shares, is entitled to dividends at the
rate of
5% per annum. The Series B preferred shares are convertible into our common
shares at a price of $2.50 per share. Members of the family of Barry Goldstein,
our Chief Executive Officer, are principal stockholders of AIA Acquisition
Corp.
Relationship
Certilman
Balin Adler & Hyman, LLP, a law firm with which Mr. Certilman is affiliated,
serves as our counsel. It is presently anticipated that such firm
will continue to represent us and will receive fees for its services at rates
and in amounts not greater than would be paid to unrelated law firms performing
similar services.
PROPOSAL
1: ELECTION OF DIRECTORS
Five
directors are to be elected at the meeting to serve until the next annual
meeting of stockholders and until their respective successors shall have
been
elected and have qualified.
Our
Restated Certificate of Incorporation provides for cumulative voting of shares
for the election of directors. This means that each stockholder has
the right to cumulate his votes and give to one or more nominees as many
votes
as equals the number of directors to be elected (five) multiplied by the
number
of shares he is entitled to vote. A stockholder may therefore cast
his votes for one nominee or distribute them among two or more of the
nominees.
Nominees
for Directors
All
five
of the nominees are currently members of our Board. The following
table sets forth each nominee’s age as of October 11, 2007, the positions and
offices presently held by him with us, and the year in which he became a
director. The Board recommends a vote FOR all nominees. The
person named as proxy intends to vote cumulatively all shares represented
by
proxies equally among all nominees for election as directors, unless proxies
are
marked to the contrary.
Name
|
Age
|
Positions
and Offices Held
|
Director
Since
|
|
|
|
|
Barry
B. Goldstein
|
54
|
President,
Chairman of the Board, Chief Executive Officer, Chief Financial
Officer,
Treasurer and Director
|
2001
|
Morton
L. Certilman
|
75
|
Secretary
and Director
|
1989
|
Jay
M. Haft
|
71
|
Director
|
1989
|
David
A. Lyons
|
58
|
Director
|
2005
|
Jack
D. Seibald
|
46
|
Director
|
2004
|
Barry
B. Goldstein
Mr.
Goldstein was elected our President, Chief Executive Officer, Chief Financial
Officer, Chairman of the Board, and a director in March 2001 and our Treasurer
in May 2001. Since January 2006, Mr. Goldstein has served as Chairman of
the
Board of Commercial Mutual Insurance Company, a New York property and casualty
insurer, as well as Chairman of its Executive Committee. From April 1997
to
December 2004, he served as President of AIA Acquisition Corp., which operated
insurance agencies in Pennsylvania and which sold substantially all of its
assets to us in May 2003. Mr. Goldstein received his B.A. and M.B.A. from
State
University of New York at Buffalo, and has been a certified public accountant
since 1979.
Morton
L. Certilman
Mr.
Certilman served as our Chairman of the Board from February 1999 until March
2001. From October 1989 to February 1999, he served as our President. He
was
elected our Secretary in May 2001 and has served as one of our directors
since
1989. Mr. Certilman has been engaged in the practice of law since 1956 and
is
affiliated with the law firm of Certilman Balin Adler & Hyman, LLP. Mr.
Certilman is Chairman of the Long Island Museum of Science and Technology,
and
was formerly Chairman of the Long Island Regional Planning Board, the Nassau
County Coliseum Privatization Commission, and the Northrop/Grumman Master
Planning Council. He served as a director of the Long Island Association
and the
New Long Island Partnership for a period of ten years and currently serves
as a
director of the Long Island Sports Commission. Mr. Certilman has lectured
extensively before bar associations, builders’ institutes, title companies, real
estate institutes, banking and law school seminars, The Practicing Law
Institute, The Institute of Real Estate Management and at annual conventions
of
such organizations as the National Association of Home Builders, the Community
Associations Institute and the National Association of Corporate Real Estate
Executives. He was a member of the faculty of the American Law
Institute/American Bar Association, as well as the Institute on Condominium
and
Cluster Developments of the University of Miami Law Center. Mr. Certilman
has
written various articles in the condominium field, and is the author of the
New
York State Bar Association Condominium Cassette and the Condominium portion
of
the State Bar Association book on Real Property Titles. Mr. Certilman received
an LL.B. degree, cum laude, from Brooklyn Law
School.
Jay
M. Haft
Mr.
Haft
served as our Vice Chairman of the Board from February 1999 until March 2001.
From October 1989 to February 1999, he served as our Chairman of the Board.
He
has served as one of our directors since 1989. Mr. Haft has been engaged
in the
practice of law since 1959 and since 1994 has served as counsel to Parker
Duryee
Rosoff & Haft (and since December 2001, its successor, Reed Smith). From
1989 to 1994, he was a senior corporate partner of Parker Duryee. Mr. Haft
is a
strategic and financial consultant for growth stage companies. He is active
in
international corporate finance and mergers and acquisitions. Mr. Haft also
represents emerging growth companies. He has actively participated in strategic
planning and fund raising for many high-tech companies, leading edge medical
technology companies and marketing companies. Mr. Haft has been a partner
of
Columbus Nova, a private investment firm, since 2000. He is a director of
a
number of public and private corporations, including DUSA Pharmaceuticals,
Inc.,
whose securities are traded on Nasdaq, and also serves on the Board of the
United States-Russian Business Counsel. Mr. Haft is a past member of the
Florida
Commission for Government Accountability to the People, a past national trustee
and Treasurer of the Miami City Ballet, and a past Board member of the Concert
Association of Florida. He is also a past trustee of Florida International
University Foundation and previously served on the advisory board of the
Wolfsonian Museum and Florida International University Law School. Mr. Haft
received B.A. and LL.B. degrees from Yale University.
David
A. Lyons
Mr.
Lyons
has served since 2004 as a principal of Den Ventures, LLC, a consulting firm
focused on business, financing, and merger and acquisition strategies for
public
and private companies. From 2002 until 2004, Mr. Lyons served as a managing
partner of the Nacio Investment Group, and President of Nacio Systems, Inc.,
a
managed hosting company that provides outsourced infrastructure and
communication services for mid-size businesses. Prior to forming the Nacio
Investment Group, Mr. Lyons served as Vice President of Acquisitions for
Expanets, Inc., a national provider of converged communications solutions.
Previously, he was Chief Executive Officer of Amnex, Inc. and held various
executive management positions at Walker Telephone Systems, Inc. and Inter-tel,
Inc. Mr. Lyons serves on the Board of Directors of GoAmerica, Inc., whose
securities are traded on Nasdaq. He has served as one of our directors since
July 2005.
Jack
D. Seibald
Mr.
Seibald is a Managing Director of Concept Capital, a division of SMH Capital,
a
broker dealer. Mr. Seibald has been affiliated with SMH Capital and its
predecessor firms since 1995 and is a registered representative with extensive
experience in equity research and investment management dating back to 1983.
Since 1997, Mr. Seibald has also been a Managing Member of Whiteford Advisors,
LLC, an investment management firm. He began his career at Oppenheimer & Co.
and has also been affiliated with Salomon Brothers, Morgan Stanley & Co. and
Blackford Securities. Mr. Seibald is a member of the Board of Directors of
Commercial Mutual Insurance Company, a New York property and casualty insurer,
and serves as Chairman of its Investments Committee. He holds an M.B.A. from
Hofstra University and a B.A. from George Washington University. He has served
as one of our directors since 2004.
Executive
Officers
(other
than executive officers who are also directors)
Curt
M. Hapward
Mr.
Hapward, age 38, was elected President of DCAP Management Corp., our wholly
owned subsidiary, in August 2007. Mr. Hapward served as Vice
President of Franchise Sales Administration and Compliance of Jackson Hewitt
Tax
Service Inc. since June 2000. Prior to joining Jackson Hewitt in
2000, he practiced law at Riker, Danzig, Scherer, Hyland & Perretti, LLP in
Morristown, New Jersey. Mr. Hapward earned a Master of Laws from New
York University School of Law in 2000, a Juris Doctor magna cum laude
from Seton Hall University School of Law in 1997, an M.B.A from Seton Hall
University Stillman School of Business in 1997, and a B.A. from Muhlenberg
College in 1991. He is currently a licensed certified public
accountant in Pennsylvania.
Family
Relationships
There
are
no family relationships among any of our executive officers and
directors.
Term
of Office
Each
director will hold office until the next annual meeting of stockholders and
until his successor is elected and qualified or until his earlier resignation
or
removal. Each executive officer will hold office until the initial
meeting of the Board of Directors following the next annual meeting of
stockholders and until his successor is elected and qualified or until his
earlier resignation or removal.
Committees
Audit
Committee
The
Audit
Committee of the Board of Directors is responsible for overseeing our accounting
and financial reporting processes and the audits of our financial
statements. The responsibilities and duties of the Audit Committee
include the following:
· assist
the Board of Directors in fulfilling its responsibilities by
reviewing
·
|
the
financial reports provided by us to the Securities and Exchange
Commission, our stockholders or to the general public,
and
|
·
|
our
internal financial and accounting
controls,
|
·
|
oversee
the appointment, compensation, retention and oversight of the work
performed by any independent public accountants engaged by
us,
|
·
|
recommend,
establish and monitor procedures designed to improve the quality
and
reliability of the disclosure of our financial condition and results
of
operations,
|
·
|
recommend,
establish and monitor procedures designed to
facilitate
|
·
|
the
receipt, retention and treatment of complaints relating to accounting,
internal accounting controls or auditing matters
and
|
·
|
the
receipt of confidential, anonymous submissions by employees of
concerns
regarding questionable accounting or auditing
matters.
|
The
members of our Board’s Audit Committee currently are Messrs. Lyons, Haft and
Seibald. Our Board has adopted a written charter for the Audit
Committee.
Nominating
Committee
The
Nominating Committee of the Board of Directors is responsible for assisting
the
Board in identifying and recruiting qualified individuals to become Board
members and select director nominees to be presented for Board and/or
stockholder approval. The members of the Nominating Committee
currently are Messrs. Haft, Lyons and Seibald. Our Board has adopted
a written charter for the Nominating Committee. A copy of the charter
is available on our website, www.dcapgroup.com. The Nominating Committee
will consider qualified director candidates recommended by stockholders if
such
recommendations are provided in accordance with the procedures set forth
in the
section entitled “Stockholder Proposals - Stockholder Nominees”
below. At this time, the Nominating Committee has not adopted minimum
criteria for consideration of a proposed candidate for nomination.
Compensation
Committee
The
Compensation Committee of the Board of Directors is responsible for the
management of our business and affairs with respect to the compensation of
our
employees, including the determination of the compensation for our Chief
Executive Officer and our other executive officers, the approval of one or
more
stock option plans and other compensation plans covering our employees, and
the
grant of stock options and other awards pursuant to stock option plans and
other
compensation plans. The members of the Compensation Committee currently are
Messrs. Seibald, Haft and Lyons. The Compensation Committee does not
currently have a charter.
The
Compensation Committee may form and
delegate authority to subcommittees and may delegate authority to one or
more
designated members of the Compensation Committee. Our Chief Executive
Officer assists the Compensation Committee from time to time by advising
on a
variety of compensation matters, such as assisting the Compensation Committee
in
determining appropriate salaries and bonuses for our executive
officers. The Compensation Committee has the authority to consult
with management and to engage the services of outside advisors, experts and
others to assist it in its efforts. In March 2007, the Compensation
Committee retained James F. Reda & Associates, LLC as compensation
consultant to the Compensation Committee with respect to the compensation
payable to our Chief Executive Officer and our other employees. The
compensation consultant reports directly to the Compensation
Committee. All projects performed by the compensation consultant are
reviewed, discussed and approved by the Compensation Committee.
Report
of the Audit Committee
In
overseeing the preparation of DCAP=s
financial
statements as of December 31, 2006 and for the years ended December 31, 2006
and
2005, the Audit Committee met with management to review and discuss all
financial statements prior to their issuance and to discuss significant
accounting issues. Management advised the Committee that all
financial statements were prepared in accordance with generally accepted
accounting principles, and the Committee discussed the statements with
management. The Committee also discussed with Holtz Rubenstein
Reminick LLP, DCAP=s
outside
auditors, the matters required to be discussed by Statement on Auditing
Standards No. 61 (Communication with Audit Committees).
The
Committee received the written disclosures and letter from Holtz Rubenstein
Reminick LLP required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees) and the Committee discussed
the
independence of Holtz Rubenstein Reminick LLP with that firm.
On
the
basis of these reviews and discussions, the Committee recommended to the
Board
of Directors that the audited financial statements be included in DCAP=s
Annual
Report on Form10-KSB for the fiscal year ended December 31,
2006, for filing with the Securities and Exchange Commission.
Members
of the Audit Committee
David
A.
Lyons
Jay
M.
Haft
Jack
D.
Seibald
Meetings
Our
Board
of Directors held eleven meetings during the fiscal year ended December 31,
2006.
The
Audit
Committee of the Board of Directors held seven meetings during the fiscal
year
ended December 31, 2006.
The
Nominating Committee of the Board of Directors did not meet during the fiscal
year ended December 31, 2006.
The
Compensation Committee of the Board of Directors held two meetings during
the
fiscal year ended December 31, 2006.
No
director attended fewer than 75% of the aggregate of the total number of
meetings of the Board and the total number of meetings held by all committees
of
the Board on which he served during 2006.
We
do not
have a formal policy regarding director attendance at our annual meeting
of
stockholders. However, all directors are encouraged to attend. Three
of the five Board members were in attendance at last year’s annual meeting of
stockholders.
Communications
with Board of Directors
Any
security holder who wishes to communicate with our Board of Directors or
a
particular director should send the correspondence to the Board of Directors,
DCAP Group, Inc., 1158 Broadway, Hewlett, New York 11557, Attn: Corporate
Secretary. Any such communication so addressed will be forwarded by
the Corporate Secretary to the members or a particular member of the
Board.
Audit
Committee Financial Expert
Our
Board
of Directors has determined that Mr. Lyons is an “audit committee financial
expert,” as that is defined in Item 401(e)(2) of Regulation S-B. Mr.
Lyons is an “independent director” based on the definition of independence in
Rule 4200(a)(15) of the listing standards of The Nasdaq Stock
Market.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16 of the Exchange Act requires that reports of beneficial ownership of common
shares and changes in such ownership be filed with the Securities and Exchange
Commission by Section 16 “reporting persons,” including directors, certain
officers, holders of more than 10% of the outstanding common shares and certain
trusts of which reporting persons are trustees. We are required to disclose
in
this Annual Report each reporting person whom we know to have failed to file
any
required reports under Section 16 on a timely basis during the fiscal year
ended
December 31, 2006. To our knowledge, based solely on a review of copies of
Forms
4 filed with the Securities and Exchange Commission and written representations
that no other reports were required, during the fiscal year ended December
31,
2006, our officers, directors and 10% stockholders complied with all Section
16(a) filing requirements applicable to them.
Director
Independence
Board
of Directors
Our
Board
of Directors is currently comprised of Barry B. Goldstein, Morton L. Certilman,
Jay M. Haft, David A. Lyons and Jack D. Seibald. Each of Messrs.
Certilman, Haft, Lyons and Seibald is currently an “independent director” based
on the definition of independence in Rule 4200(a)(15) of the listing standards
of The Nasdaq Stock Market. During 2006, Robert Wallach also served
as one of our directors. Mr. Wallach was an “independent director”
based on the definition of independence in Rule 4200(a)(15) of the listing
standards of The Nasdaq Stock Market.
Audit
Committee
The
members of our Board’s Audit Committee currently are Messrs. Lyons, Haft and
Seibald, each of whom is an “independent director” based on the definition of
independence in Rule 4200(a)(15) of the listing standards of The Nasdaq Stock
Market and Rule 10A-3(b)(1) under the Securities Exchange Act of
1934.
Nominating
Committee
The
members of our Board’s Nominating Committee currently are Messrs. Haft, Lyons
and Seibald, each of whom is an “independent director” based on the definition
of independence in Rule 4200(a)(15) of the listing standards of The Nasdaq
Stock
Market.
Compensation
Committee
The
members of our Board’s Compensation Committee currently are Messrs. Seibald,
Haft and Lyons, each of whom is an “independent director” based on the
definition of independence in Rule 4200(a)(15) of the listing standards of
The
Nasdaq Stock Market.
INDEPENDENT
PUBLIC ACCOUNTANTS
Holtz
Rubenstein Reminick, LLP has served as our auditors since 1990 and was selected
as our independent public accountants with respect to the fiscal year ended
December 31, 2006. We have not yet selected our auditors for the
current fiscal year. Our Audit Committee will review Holtz Rubenstein
Reminick’s proposal with respect to the audit prior to making a determination
regarding the engagement.
It
is not
expected that a representative of Holtz Rubenstein Reminick will attend the
meeting.
The
following is a summary of the fees billed to us by Holtz Rubenstein Reminick
LLP, our independent auditors, for professional services rendered for the
fiscal
years ended December 31, 2006 and December 31, 2005:
Fee
Category
|
|
Fiscal
2006 Fees
|
|
|
Fiscal
2005 Fees
|
|
Audit
Fees(1)
|
|
$ |
87,425
|
|
|
$ |
90,200
|
|
Audit-Related
Fees(2)
|
|
|
-
|
|
|
|
-
|
|
Tax
Fees(3)
|
|
|
34,000
|
|
|
|
-
|
|
All
Other Fees(4)
|
|
|
15,485
|
|
|
|
13,335
|
|
Total
Fees
|
|
$ |
136,910
|
|
|
$ |
103,535
|
|
____________
(1)
|
Audit
Fees consist
of aggregate fees billed
for professional services rendered for the audit of
our annual financial statements and review of the interim financial
statements included in quarterly reports or services that
are normally provided by
the independent auditors
in connection with statutory and
regulatory filings or engagements for the fiscal years ended
December 31, 2006 and December 31, 2005, respectively.
|
|
|
(2)
|
Audit-Related
Fees consist of aggregate fees billed for assurance and related
services
that are reasonably related to the performance of the audit or
review of
our financial statements and are not reported under “Audit
Fees.”
|
|
|
(3)
|
Tax
Fees consist of aggregate fees billed for preparation of our federal
and
state income tax returns and other tax compliance
activities.
|
|
|
(4)
|
All
Other Fees consist of aggregate fees billed for products and services
provided by Holtz Rubenstein Reminick LLP, other than those disclosed
above. These fees related to the audits of our wholly-owned subsidiary,
DCAP Management Corp., and general accounting consulting
services.
|
The
Audit
Committee is responsible for the appointment, compensation and oversight
of the
work of the independent auditors and approves in advance any services to
be
performed by the independent auditors, whether audit-related or
not. The Audit Committee reviews each proposed engagement to
determine whether the provision of services is compatible with maintaining
the independence of the independent auditors. All of the fees shown
above were pre-approved by the Audit Committee.
STOCKHOLDER
PROPOSALS
Stockholder
proposals intended to be presented at our next annual meeting of stockholders
pursuant to the provisions of Rule 14a-8 of the Securities and Exchange
Commission, promulgated under the Securities Exchange Act of 1934, as amended,
must be received at our offices in Hewlett, New York by June 19, 2008 for
inclusion in our proxy statement and form of proxy relating to such
meeting.
The
following requirements with respect to stockholder proposals and stockholder
nominees to our Board of Directors are included in our By-Laws.
Stockholder
Proposals
In
order
for a stockholder to make a proposal at an annual meeting of stockholders,
under
our By-Laws, timely notice must be received by us in advance of the
meeting. To be timely, the proposal must be received by our Secretary
at our principal executive offices (as provided below) on a date which is
not
less than 60 days nor more than 90 days prior to the date which is one year
from
the date of the mailing of the proxy statement for the prior year=s
annual
meeting of stockholders. If during the prior year we did not hold an
annual meeting, or if the date of the meeting for which a stockholder intends
to
submit a proposal has changed more than 30 days from the date of the meeting
in
the prior year, then the notice must be received a reasonable time before
we
mail the proxy statement for the current year. A stockholder’s notice
must set forth as to each matter the stockholder proposes to bring before
the
annual meeting certain information regarding the proposal, including the
following:
·
|
a
brief description of the business desired to be brought before
the meeting
and the reasons for conducting such business at such
meeting;
|
·
|
the
name and address of the stockholder proposing such
business;
|
·
|
the
class and number of our shares which are beneficially owned by
such
stockholder; and
|
·
|
any
material interest of such stockholder in such
business.
|
Stockholder
Nominees
In
order
for a stockholder to nominate a candidate for director, under our By-Laws,
timely notice of the nomination must be received by us in advance of the
meeting. To be timely, the notice must be received at our principal
executive offices (as provided below) not less than 60 days nor more than
90
days prior to the meeting; however, if less than 70 days=
notice of
the date of the meeting is given to stockholders and public disclosure of
the
meeting date, pursuant to a press release, is either not made at all or is
made
less than 70 days prior to the meeting date, notice by a stockholder to be
timely made must be so received no later than the close of business on the
tenth
day following the earlier of the following:
·
|
the
day on which the notice of the date of the meeting was mailed to
stockholders, or
|
·
|
the
day on which such public disclosure of the meeting date was
made.
|
The
stockholder sending the notice of nomination must describe various matters,
including such information as:
·
|
the
name, age, business and residence addresses, occupation or employment
and
shares held by the nominee;
|
·
|
any
other information relating to such nominee required to be disclosed
in a
proxy statement; and
|
·
|
the
name, address and number of shares held by the
stockholder.
|
These
requirements are separate from and in addition to the requirements a stockholder
must meet to have a proposal included in our proxy statement.
Any
notice given pursuant to the foregoing requirements must be sent to our
Corporate Secretary at 1158 Broadway, Hewlett, New York
11557. The foregoing is only a summary of the provisions of
our By-Laws that relate to stockholder proposals and stockholder nominations
for
director. Any stockholder desiring a copy of our By-Laws will be
furnished one without charge upon receipt of a written request
therefor.
OTHER
BUSINESS
While
the
accompanying Notice of Annual Meeting of Stockholders provides for the
transaction of such other business as may properly come before the meeting,
we
have no knowledge of any matters to be presented at the meeting other than
that
listed as Proposal 1 in the notice. However, the enclosed proxy gives
discretionary authority in the event that any other matters should be
presented.
FORM
10-KSB
This
proxy statement is accompanied by a copy of our Annual Report on Form 10-KSB
for
the year ended December 31, 2006 (excluding exhibits). We may charge
a fee equal to our reasonable expenses in furnishing the exhibits.
Barry
B.
Goldstein
Chief
Executive Officer
Hewlett,
New York
October
17, 2007
DCAP
GROUP, INC.
This
Proxy is Solicited on Behalf of
the Board of Directors
The
undersigned hereby appoints Barry B. Goldstein as proxy, with the power to
appoint his substitute, and hereby authorizes him to represent and vote,
as
designated on the reverse side, all the common shares of DCAP Group, Inc.
(the
“Company”) held of record by the undersigned at the close of business on October
11, 2007 at the Annual Meeting of Stockholders to be held on November 20,
2007
or any adjournment thereof.
(Continued
and to be signed on the reverse side)
ANNUAL
MEETING OF STOCKHOLDERS OF
DCAP
GROUP, INC.
NOVEMBER
20, 2007
Please
date, sign and mail
your
proxy card in the
envelope
provided as soon
as
possible.
Please
detach along perforated line and mail in the envelope
provided.
PLEASE
SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK
YOUR VOTE IN BLUE OR BLACK INK AS SHOWN
HERE __X __
1. Election
of Directors:
□
FOR ALL NOMINEES
□
WITHHOLD AUTHORITY FOR ALL NOMINEES
□
FOR ALL EXCEPT
(See
instructions below)
NOMINEES:
□ Barry
B. Goldstein
________________
□
Morton
L.
Certilman ______________
□ Jay
M.
Haft ________________
□ David
A.
Lyons ________________
□ Jack
D.
Seibald ________________
The
Company’s Restated Certificate of Incorporation provides for cumulative voting
of shares for the election of directors, which means that each stockholder
has
the right to cumulate his votes and give to one or more nominees as many
votes
as equals the number of directors to be elected (five) multiplied by the
number
of shares he is entitled to vote. A stockholder may therefore cast
his votes for one nominee or distribute them among two or more of the
nominees. A vote FOR includes discretionary authority to cumulate
votes among nominees. To cumulate specifically votes for any nominee, set
forth
the number of votes after each nominee.
Instruction:
To withhold authority to vote for any individual nominee(s), mark “FOR ALL
EXCEPT” and fill in the circle next to each nominee you wish to
withhold.
2. In
his discretion, the proxy is authorized to vote upon such other business
as may
properly come before the meeting.
This
proxy, when properly executed, will be voted in the manner directed by the
undersigned stockholder. If no direction is made, this proxy
will be voted FOR the election of the named nominees as
directors.
To
change
the address on your account, please check the box at right and indicate your
new
address in the space above. Please note that changes to the
registered name(s) on the account may not be submitted via this method.
□
Signature
of Stockholder ________________________ Date:_________________
Signature
of Stockholder ________________________ Date:_________________
Note:
Please sign exactly as name appears above. When shares are held
jointly, each holder should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as
such. If a corporation, please sign in full corporate name by duly
authorized officer, giving full title as such. If a partnership or
limited liability company, please sign in partnership or limited liability
company name by authorized person.