Exhibit 4.2
Composite Ace Cash Express, Inc. Non-Employee Directors Stock Option Plan
(as amended through August 17, 1998)
COMPOSITE
ACE CASH EXPRESS, INC.
NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
(AS AMENDED THROUGH AUGUST 17, 1998)
On March 27, 1995 (the "Effective Date"), the Board of Directors of Ace
Cash Express, Inc. (the "Company") adopted the following Non-Employee Directors
Stock Option Plan:
1. PURPOSE. The purpose of the Plan is to provide non-employee directors of
the Company with a proprietary interest in the Company through the granting of
options which will
(a) increase the interest of the non-employee directors in the
Company's welfare;
(b) furnish an incentive to the non-employee directors to continue
their services for the Company; and
(c) provide a means through which the Company may attract able
persons to serve on the Board.
2. ADMINISTRATION. The Plan will be administered by the Committee.
3. PARTICIPANTS. All non-employee directors of the Company are to be
granted options under the Plan, and upon such grant will become participants
in the Plan.
4. SHARES SUBJECT TO PLAN. Options may not be granted under the Plan for
more than 260,000 shares of Common Stock of the Company, but this number may
be adjusted to reflect, as deemed appropriate by the Committee, any stock
dividend, stock split, share combination, recapitalization or the like, of or
by the Company. Shares to be optioned and sold may be made available from
either authorized but unissued Common Stock or Common Stock held by the
Company in its treasury. Shares that by reason of the expiration of an option
or otherwise are no longer subject to purchase pursuant to an option granted
under the Plan may be reoffered under the Plan.
5. ALLOTMENT OF SHARES. Grants of options under the Plan shall be as
described in this Section 5.
(a) On the Effective Date, Howard W. Davis shall be granted an
option, effective as of that date, to purchase 5,000 shares of
Common Stock of the Company.
(b) On December 1, 1995, each then serving non-employee director of
the Company shall be granted an option, effective as of that
date, to purchase 3,000 shares of Common Stock of the Company.
On December 1, 1996, each then serving non-employee director of
the Company shall be granted an option, effective as of that
date, to purchase 4,500 shares of Common Stock of the Company.
On December 1, 1997, each then serving non-employee director of
the Company shall be granted an option, effective as of that
date, to purchase 6,750 shares of Common Stock of the Company.
On December 1 (the "Annual Grant Date") of each year
thereafter, commencing December 1, 1998, each then serving
non-employee director of the Company shall be granted an
option, effective as of that Annual Grant Date, to purchase
5,000 shares of Common Stock of the Company.
(c) Each non-employee who is elected to the Board who has not
previously served as a director of the Company shall be granted
an option, effective as of the date of his election to the
Board (the "Initial Grant Date"), to purchase 5,000 shares of
Common Stock of the Company until November 30, 1996, 7,500
shares of Common Stock of the Company until November 30, 1997,
and 11,250 shares of Common Stock on and after December 1,
1997.
(d) Any non-employee director may elect by written notice to the
Company not to receive one or more option grants hereunder, by
electing on the Initial Grant Date or at least six months in
advance of the Annual Grant Date, whichever is applicable, of
the option.
(e) The Plan shall be submitted to the Company's shareholders for
approval. The Committee may grant options under the Plan prior
to the time of shareholder approval, which options will be
effective when granted, but if for any reason the shareholders
of the Company do not approve the Plan prior to one year after
the date of adoption of the Plan by the Board, all options
granted under the Plan will be terminated and of no effect; no
option may be exercised in whole or in part prior to such
shareholder approval.
6. GRANT OF OPTIONS. All options under the Plan shall be automatically
granted as provided in Section 5. The grant of options shall be evidenced by
stock option agreements containing such terms and provisions as are approved
by the Committee, but not inconsistent with the Plan. The Company shall
execute stock option agreements upon instructions from the Committee.
7. OPTION PRICE. The option price shall be equal to the closing price of
Common Stock of the Company on (a) for the grant under Section 5(a), the
Effective Date and (b) for all subsequent grants, the Annual Grant Date or the
Initial Grant Date, whichever is applicable, on which such grants are made.
8. OPTION PERIOD. The Option Period will begin on the effective date of the
option grant and will terminate on the fifth anniversary of that date.
9. RIGHTS IN EVENT OF DEATH OR DISABILITY. If a participant dies or becomes
disabled prior to termination of his right to exercise an option in accordance
with the provisions of his stock option agreement without having totally
exercised the option, the option may be exercised, to the extent of the shares
with respect to which the option could have been exercised by the participant
on the date of his death or disability, by (i) the participant's estate or by
the person who acquired the right to exercise the option by bequest or
inheritance or by reason of the death of the participant, or (ii) the
participant or his personal representative in the event of the participant's
disability, provided the option is exercised prior to the date of its
expiration or not more than 180 days after the date of the participant's death
or disability, whichever first occurs. The date of disability of a participant
shall be determined by the Committee.
10. PAYMENT. Full payment for shares purchased upon exercising an option
shall be made in cash or by check at the time of exercise, or on such other
terms as are set forth in the applicable option agreement. No shares may be
issued until full payment of the purchase price therefor has been made, and a
participant will have none of the rights of a shareholder until shares are
issued to him.
11. VESTING.
(a) The option described in Section 5(a) will be fully vested on
the Effective Date. Each option described in Section 5(c) will
be fully vested on the Initial Grant Date of that option. Each
other option will become exercisable to the extent of one-third
of the total optioned shares on each successive anniversary of
the Annual Grant Date for such option.
(b) No fractional share will be issued; if an installment would
cover a fractional share, such installment will be rounded to
the next higher whole share (except in the case of the final
installment, which will be for the balance of the total
optioned shares).
(c) In no event may an option be exercised or shares be issued
pursuant to an option if any requisite action, approval or
consent of any governmental authority of any kind having
jurisdiction over the exercise of options shall not have been
taken or secured.
12. CAPITAL ADJUSTMENTS AND REORGANIZATIONS. The number of shares of Common
Stock covered by each outstanding option granted under the Plan and the option
price thereof, and the number of shares to be granted pursuant to Section 5(b)
and the option price thereof, may be adjusted to reflect, as deemed
appropriate by the Committee, any stock dividend, stock split, share
combination, exchange of shares, recapitalization, merger, consolidation,
separation, reorganization, liquidation or the like of or by the Company.
13. NON-ASSIGNABILITY. Options may not be transferred other than by will or
by the laws of descent and distribution. Except as otherwise provided in the
Plan, during a participant's lifetime, options granted to a participant may be
exercised only by the participant.
14. INTERPRETATION. The Committee shall interpret the Plan and shall
prescribe such rules and regulations in connection with the operation of the
Plan as it determines to be advisable for the administration of the Plan. The
Committee may rescind and amend its rules and regulations.
15. AMENDMENT OR DISCONTINUANCE. The Plan may be amended or discontinued by
the Board without the approval of the shareholders of the Company, except that
any amendment that would (a) materially increase the benefits accruing to
participants under the Plan, (b) materially increase the number of securities
that may be issued under the Plan, or (c) materially modify the requirements
of eligibility for participation in the Plan, must be approved by the
share-holders of the Company. In addition, the Plan shall not be amended more
than once every six months, other than to comport with changes in the Internal
Revenue Code of 1986, as amended, or the Employee Retirement Income Security
Act of 1974, as amended, or the rules thereunder.
16. EFFECT OF PLAN. Neither the adoption of the Plan nor any action of the
Board or the Committee shall be deemed to give any non-employee director any
rights other than as may be evidenced by the Plan and each stock option
agreement, or any amendment thereto, duly authorized by the Committee and
executed on behalf of the Company in accordance with the Plan, and then only
to the extent and on the terms and conditions expressly set forth herein and
therein.
17. TERM. Unless sooner terminated by action of the Board, the Plan will
terminate on March 26, 2005. No options will be granted under the Plan after
that date, but options granted before that date will continue to be effective
in accordance with their terms.
18. DEFINITIONS. For the purposes of the Plan, unless the context requires
otherwise, the following terms shall have the meanings indicated:
(a) "Board" means the Board of Directors of the Company.
(b) "Committee" means the Compensation Committee of the Board, or
in the absence of such a committee, shall mean the entire
Board.
(c) "Common Stock" means the Common Stock which the Company is
currently authorized to issue or may in the future be
authorized to issue (as long as the common stock varies from
that currently authorized, if at all, only in amount of par
value).
(d) "Option Period" means the period during which an option may be
exercised.
(e) "Plan" means this Non-Employee Directors Stock Option Plan, as
may be amended from time to time.