8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

November 15, 2004
(Date of earliest event reported)

ACE CASH EXPRESS, INC.

(Exact name of registrant as specified in its charter)

Texas
(State or other jurisdiction of
incorporation) 0-20774
(Commission File Number) 75-2142963
(IRS Employer
Identification No.)

1231 Greenway Drive, Suite 600
Irving, Texas
(Address of principal executive offices) 75038
(Zip Code)

(972) 550-5000
(Registrant’s telephone number,
including area code)

Not Applicable
(Former Name or Former Address,
if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 1.01 Entry into a Material Definitive Agreement.
	Item 8.01 Other Events.
	Item 9.01. Financial Statements and Exhibits
[Signature Page Follows]
SIGNATURES
EXHIBIT INDEX
Articles of Amendment to the Restated Articles of Incorporation
Composite Restated Articles of Incorporation
Change-in-Control Executive Severance Agreement-Barry M. Barron
Change-in-Control Executive Severance Agreement-William S. McCalmont

Item 1.01 Entry into a Material Definitive Agreement.

On November 15, 2004, the Board of Directors of Ace Cash Express, Inc. authorized, and ACE entered into, an amended and restated Change-in-Control Executive Severance Agreement with each of Barry M. Barron, ACE’s Executive Vice President-Operations, and William S. McCalmont, ACE’s Executive Vice President and Chief Financial Officer. The new agreement with Mr. Barron amends and supersedes the Change-in-Control Executive Severance Agreement with him dated as of May 15, 2001, and the new agreement with Mr. McCalmont amends and supersedes the Change-in-Control Executive Severance Agreement with him dated as of August 5, 2003. Each new agreement amends the previous agreement only to remove the previous limitation on the amount or value of severance benefits that was intended to avoid any “excess parachute payment” under federal tax laws. In all other material respects, the terms of each new agreement are the same as those of the previous agreement with each of Mr. Barron and Mr. McCalmont, which are described in ACE’s proxy statement for its 2004 annual shareholders’ meeting. Also, all of the material terms of the two new agreements are the same.

ACE’s Board authorized the new agreements based upon the recommendation of its Compensation Committee, which determined that the tax-related limitation on the severance benefits would likely render the previous agreements ineffective in providing Mr. Barron and Mr. McCalmont an incentive to remain with ACE in the event of a possible Change in Control. Any severance benefits paid under the new agreements that constitute an “excess parachute payment” under federal tax laws will not be deductible (as compensation expense) by ACE or its successor after the Change in Control and will be subject to an excise tax payable by the recipient.

Item 8.01 Other Events.

At the annual shareholders’ meeting held on November 15, 2004, ACE’s shareholders approved the proposed amendment to ACE’s Restated Articles of Incorporation to increase the number of shares of Common Stock that ACE is authorized to issue from 20,000,000 to 50,000,000 shares. A copy of the Articles of Amendment to the Restated Articles of Incorporation, which was filed and effective on November 18, 2004, is Exhibit 3.1 to this report. A complete copy of the Restated Articles of Incorporation, as amended, is Exhibit 3.2 to this report.

At its meeting held on November 15, 2004, ACE’s Board named Robert P. Allyn and J. M. Haggar, III to its Compensation Committee. Each of Mr. Allyn and Mr. Haggar is an independent director first elected by ACE’s shareholders at the 2004 annual shareholders’ meeting. Mr. Allyn had previously been elected a director in August 2004, but had not been named to a Board committee. Mr. Allyn and Mr. Haggar will serve with Michael S. Rawlings, who will continue to be Chairman of the Compensation Committee. Marshall B. Payne will no longer be a member of the Compensation Committee, but will continue to serve with Edward W. Rose III (Chairman) and C. Daniel Yost on the Board’s Audit Committee.

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Forward-looking Statements

This Report contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are generally identified by the use of words such as “expect,” “anticipate,” “estimate,” “believe,” “intend,” “plan,” “target,” “goal,” “should,” “would,” and terms with similar meanings.

Although ACE believes that the current views and expectations reflected in these forward-looking statements are reasonable, these views and expectations, and the related statements, are inherently subject to risks, uncertainties, and other factors, many of which are not under ACE’s control and may not even be predictable. Any inaccuracy in the assumptions, as well as those risks, uncertainties and other factors, could cause the actual results to differ materially from these in the forward-looking statements. These risks, uncertainties, and factors include, but are not limited to, matters described in this Report and ACE’s other reports filed with the Securities and Exchange Commission, such as:

• ACE’s relationships with Republic Bank & Trust Company, with Travelers Express Company, Inc. and its affiliates, and with its lenders;

• ACE’s relationships with providers of services or products offered by ACE or property used in its operations;

• federal and state governmental regulation of check cashing, short-term consumer lending, and related financial services businesses;

• any litigation regarding ACE’s short-term consumer lending activities;

• theft and employee errors;

• the availability of adequate financing, suitable locations, acquisition opportunities and experienced management employees to implement ACE’s growth strategy;

• increases in interest rates, which would increase ACE’s borrowing costs;

• the fragmentation of the check-cashing industry and competition from various other sources, such as banks, savings and loans, short-term consumer lenders, and other similar financial services entities, as well as retail businesses that offer services offered by ACE;

• the terms and performance of third-party services offered at ACE’s stores; and

• customer demand and response to services offered at ACE’s stores.

ACE expressly disclaims any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in ACE’s views or expectations, or otherwise. ACE makes no prediction or statement about the performance of ACE’s Common Stock.

Item 9.01. Financial Statements and Exhibits

     (a) Not applicable.

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     (b)      Not applicable.

     (c)      Exhibits. The following exhibits are filed herewith in accordance with the provisions of Item 601 of Regulation S-K:

3.1	Articles of Amendment to the Restated Articles of Incorporation of Ace Cash Express, Inc. filed and effective November 18, 2004.
3.2	Composite Restated Articles of Incorporation of Ace Cash Express, Inc., as amended through November 18, 2004
10.1	Change-in-Control Executive Severance Agreement dated as of November 15, 2004, between Ace Cash Express, Inc. and Barry M. Barron.
10.2	Change-in-Control Executive Severance Agreement dated as of November 15, 2004, between Ace Cash Express, Inc. and William S. McCalmont.

[Signature Page Follows]

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ACE CASH EXPRESS, INC.
Dated: November 19, 2004	By:	/s/ WALTER E. EVANS Walter E. Evans Senior Vice President and General Counsel

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EXHIBIT INDEX

Exhibit No.	Description
3.1	Articles of Amendment to the Restated Articles of Incorporation of Ace Cash Express, Inc. filed and effective November 18, 2004.
3.2	Composite Restated Articles of Incorporation of Ace Cash Express, Inc., as amended through November 18, 2004.
10.1	Change-in-Control Executive Severance Agreement dated as of November 15, 2004, between Ace Cash Express, Inc. and Barry M. Barron.
10.2	Change-in-Control Executive Severance Agreement dated as of November 15, 2004, between Ace Cash Express, Inc. and William S. McCalmont.

EX-3.1

Exhibit 3.1

ARTICLES OF AMENDMENT
TO
THE RESTATED ARTICLES OF INCORPORATION
OF
ACE CASH EXPRESS, INC.

     Pursuant to the provisions of Article 4.04 of the Texas Business Corporation Act, as amended (the “Act”), Ace Cash Express, Inc., a Texas corporation (the “Corporation”), hereby adopts the following Articles of Amendment to its Restated Articles of Incorporation:

     ARTICLE ONE. The name of the Corporation is Ace Cash Express, Inc.

     ARTICLE TWO. Section A of Article V of the Restated Articles of Incorporation of the Corporation is hereby amended to read in its entirety as follows:

     “A. Capitalization. The aggregate number of shares which the Corporation is authorized to issue is 51,000,000 shares, consisting of:

(1)	50,000,000 shares of Common Stock have a par value of $0.01 per share; and
(2)	1,000,000 shares of Preferred Stock having a par value of $1.00 per share.

     The following is a statement of the relative rights, preferences and limitations with respect to the shares of each class of capital stock of the Corporation, insofar as the same are fixed in these Articles of Incorporation, and of the authority expressly vested in the Board of Directors of the Corporation to divide the Preferred Stock into series and to fix and determine the variations in the relative rights and preferences as between series:”

     ARTICLE THREE. The amendment to the Restated Articles of Incorporation set forth in these Articles of Amendment was duly adopted by the shareholders of the Corporation on November 15, 2004.

     ARTICLE FOUR. The amendment to the Restated Articles of Incorporation set forth in these Articles of Amendment has been approved in the manner required by the Act and by the constituent documents of the Corporation.

DATED as of the 15th day of November, 2004.

ACE CASH EXPRESS, INC.
By:
	Walter E. Evans, Senior Vice President,
	General Counsel and Secretary

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EX-3.2

Exhibit 3.2

COMPOSITE
RESTATED ARTICLES OF INCORPORATION
OF
ACE CASH EXPRESS, INC.
(THROUGH NOVEMBER 18, 2004)

ARTICLE I

     The name of the corporation is Ace Cash Express, Inc.

ARTICLE II

     The period of its duration is perpetual.

ARTICLE III

     The purpose for which the corporation is organized is to transact any and all lawful business for which corporations may be incorporated under the Texas Business Corporation Act.

ARTICLE IV

     The street address of the initial registered office of the corporation is 1231 Greenway Drive, Suite 800, Irving, Texas 75038, and the name of the initial registered agent of the corporation at such address is Donald H. Neustadt.

ARTICLE V

     A. Capitalization. The aggregate number of shares which the Corporation is authorized to issue is 51,000,000 shares, consisting of:

     (1) 50,000,000 shares of Common Stock have a par value of $0.01 per share; and

     (2) 1,000,000 shares of Preferred Stock having a par value of $1.00 per share.

     The following is a statement of the relative rights, references and limitations with respect to the shares of each class of capital stock of the Corporation, insofar as the same are fixed in these Articles of Incorporation, and of the authority expressly vested in the Board of Directors of the Corporation to divide the Preferred Stock into series and to fix and determine the variations in the relative rights and preferences as between series:

     B. Preferred Stock.

     1. The Preferred Stock may, from time to time, be divided into and issued in one or more series with each series to be so designated as to distinguish the shares thereof form the shares of all other series and classes. The shares of each series may have such designations, and relative rights, preferences and limitations as are

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stated and expressed herein and in a resolution or resolutions providing for the issue of such series, adopted by the Board of Directors as hereinafter provided.

     2. To the extent that these Articles of Incorporation shall not have fixed and determined the variations in the relative rights and preferences of the Preferred Stock, both in relation to the Common Stock and as between series of Preferred Stock, the Board of directors of the Corporation is expressly vested with the authority to divide the Preferred Stock into one or more series and, within the limitations set forth in these Articles of Incorporation, to fix and determine the relative rights and preferences of the shares of any series so established, and, with respect to each such series, to fix by resolution or resolutions providing for the issue of such series, the following:

         (a) The maximum number of shares to constitute such series and the distinctive designation thereof;

         (b) The annual dividend rate, if any, on the shares of such series and the date or dates from which dividends shall commence to accrue or accumulate as herein provided, and whether dividends shall be cumulative;

         (c) The price at and the terms and conditions on which the shares of such series may be redeemed, including, without limitation, the time during which shares of the series may be redeemed, the premium, if any, over and above the par value thereof an any accumulated dividends thereon which the holders of shares of such series shall be entitled to receive upon the redemption thereof, which premium may vary at different dates and may also be different with respect to shares redeemed through the operation of any retirement or sinking fund;

         (d) The liquidation preference, if any, over and above the par value thereof, and any accumulated dividends thereon, which the holders of shares of such series shall be entitled to receive upon the voluntary or involuntary liquidation, dissolution or winding up on the affairs of the Corporation;

         (e) Whether or not the shares of such series shall be subject to the operation of a retirement or sinking fund, and, if so, the extent and manner in which any such retirement or sinking fund shall be applied to the purchase or redemption of the shares of such series for retirement or for other corporate purposes, and the terms and provisions relative to the operations of such retirement or sinking fund;

         (f) The terms and conditions, if any, on which the shares of such series shall be convertible into, or exchangeable for, shares of capital stock of any other class or classes of the Corporation or any series of any other class or classes, or of any other series of the same class, including the price or prices or the rate or rates of conversion or exchange and the method, if any, of adjusting the same, provided that shares of such series may not be convertible into shares of a series or class which has prior or superior rights and preferences as to dividends or distribution of assets of the Corporation upon

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voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation;

         (g) The voting rights, if any, on the shares of such series; and

         (h) Any other preferences and relative, participating, optional or other special rights, or qualifications, limitations or restrictions thereof, as shall not be inconsistent with the law or with this Article V.

     3. All shares of any one series of Preferred Stock shall be identical with each other in all respects, except that shares of any one series issued at different times may differ as to the dates from which dividends thereon, if any, shall be cumulative; and all series shall rank equally and be identical in all respects, except as provided in Paragraph 1 of this Section A and except as permitted by the foregoing provisions of Paragraph 2.

     4. Except to the extent restricted or otherwise provided in the resolution or resolutions adopted by the Board of Directors providing for the issue of any series of Preferred Stock, no dividends (other than dividends payable in Common Stock) on any class or classes of capital stock of the Corporation ranking, with respect to dividends, junior to the Preferred Stock, or any series thereof, shall be declared, paid or set apart for payment, until and unless the holders of share of Preferred Stock of each senior series shall have been paid, or there shall have been set apart for payment, cash dividends, when and as declared by the Board of Directors out of funds of the corporation legally available therefor, at the annual rate, and no more, fixed in the resolution or resolutions adopted by the Board of Directors providing for the issue of such series.

     5. To the extent provided in the resolution or resolutions adopted by the Board of directors providing for the issue of any series of Preferred Stock, upon the voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation before any payment or distribution of the assets of the Corporation (whether capital or surplus) shall be made to or set apart for the holders of any class or classes of capital stock of the Corporation ranking junior, as to liquidation rights, to the Preferred Stock, or any series thereof, the holders of the shares of the Preferred Stock shall be entitled to receive payment at the rate fixed in the resolution or resolutions adopted by the Board of Directors providing for the issue of the respective series. For the purposes of this Paragraph 5 and Paragraph 2(d) of the Section A, neither the consolidation nor merger of the Corporation with one or more other corporations shall be deemed to be a liquidations, dissolution or winding up.

     6. The Corporation, at the option of the Board of Directors, may redeem, unless otherwise provided in the resolution establishing a series of Preferred Stock, at such time as is fixed (and if not so fixed at any time) in the resolution or resolutions adopted by the Board of directors providing for the issue of a series, the whole or, from time to time, any part of the Preferred Stock of any series then outstanding, at the par value thereof, plus in every case an amount

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equal to all accumulated dividends, if any (whether or not earned or declared), with respect to each share so redeemed and, in addition thereto, the amount of the premium, if any, payable upon such redemption fixed in the resolution or resolutions adopted by the Board of Directors providing for the issue of such series (the total sum so payable on any such redemption being referred to as the “redemption price”). Notice of every such redemption shall be mailed not less than twenty (20) nor more than (50) days in advance of the date designated for such redemption (the “redemption date”) to the holders of record of the shares of Preferred Stock to be redeemed at their respective addresses as the same shall appear on the books of the Corporation. In order to facilitate the redemption of any shares of Preferred Stock which may be chosen for redemption as provided in this Paragraph 6, the Board of Directors shall be authorized to cause the transfer books of the Corporation to be closed as to such shares at any time (not exceeding fifty (50) days) prior to the redemption date. In case of the redemption of only a portion of any series of Preferred Stock then outstanding, the shares of such series to be so redeemed shall be selected by lot or in such manner as the Board of directors may determine. The Board of Directors shall have full power and authority, subject to the limitations and provisions contained herein and in the Texas Business Corporation Act, to prescribe the terms and conditions upon which the Preferred Stock shall be redeemed from time to time.

     7. Shares of Preferred Stock which have been redeemed, purchased or otherwise acquired by the Corporation or which, if convertible or exchangeable, have been converted into or exchanged for shares of capital stock of any other class or classes or any series of any other class, shall be canceled and such shares may not under any circumstances thereafter be reissued as Preferred Stock, and the Corporation shall from time to time and at least once a year cause all such acquired preferred shares to be canceled in the manner provided by law.

     8. Nothing herein contained shall limit any legal right to the Corporation to purchase any shares of the Preferred Stock.

     C. Common Stock.

     1. Shares of Common Stock may be issued by the Corporation from time to time for such consideration as may lawfully be fixed by the Board of Directors.

     2. The Common Stock shall be entitled to one vote per share on all matters. Cumulative voting for voting for directors shall not be permitted and is hereby expressly denied.

     3. Subject to the prior rights and preferences of the Preferred Stock and subject to and subject to the provisions and conditions set forth in the foregoing Section A of this Article Five, or in any resolution or resolutions providing for the issue of a series of Preferred Stock, and to the extent permitted by the laws of the State of Texas, the holders of Common Stock shall be entitled to receive such cash dividends as may be declared and made payable by the Board of Directors.

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     4. After payment shall have been made in full to the holders of any series of Preferred Stock having preferred liquidation rights, upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, the remaining assets and funds of the Corporation shall be distributed among the holders of the Common Stock according to their respective shares.

     D. Cumulative Voting. Cumulative voting in the election of directors is expressly prohibited.

     E. Series A Preferred. The Corporation hereby establishes a series of Preferred Stock, which shall be given the distinctive designation of “Series A Preferred Stock, $1.00 par value” (the “Series A Preferred”). This Series is to consist of 78,600 shares, of which the rights and preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions of such rights and preferences shall be as follows:

     1. Dividends. The holders of Series A Preferred shall be entitled to receive, when and as declared by the Board of Directors out of the funds of the Corporation legally available therefore, and the Corporation shall be bound to pay thereon, in preference to the holders of any other class of capital stock, or series thereof, of the Corporation, including, without limitation, the Common Stock, cash dividends at the annual rate of $0.60 per share. Such dividends shall commence to accrue on the date any shares of the Series A Preferred are first issued and become outstanding. Dividends on the Series A Preferred shall be payable annually in arrears on the 15th day of January, commencing on January 31, 1988, to holders of record on the first day of such month.

     Such dividends shall be cumulative, so that if, at any time, dividends upon the outstanding Series A Preferred shall not have been paid or declared and a sum sufficient for the payment thereof set apart for such payment, the amount of the deficiency shall accrue and the aggregate deficiency shall be fully paid, or dividends in such amount declared a sum or sums shall be paid or set aside as dividends for any other class, or series thereof, of capital stock of the Corporation. If the dividend on the Series A Preferred for any dividend period shall not have been paid or set apart in full, no asset which is by law available for the payment of dividends shall be paid or set aside for the purchase or redemption of any class of capital stock, or any series thereof (except the Series A Preferred), of the Corporation. Notwithstanding the foregoing, nothing contained herein shall restrict the ability of the Corporation pursuant to that certain Shareholders’ Agreement, dated as of January 29, 1987, among the Corporation and its shareholders, as such agreement may now exist or hereafter be amended or restated.

     2. Voting Rights. The Series A Preferred shall not have any voting power, except as otherwise specifically required by law.

     3. Redemptions.

         (a) Subject to the provisions of this paragraph 3 and applicable law, the Corporation shall have the right, but not the obligation, to redeem the Series A Preferred, in whole or in part, at a

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redemption price of $10.00 per share, plus all accumulated but unpaid dividends thereon (the “Redemption Price”).

         (b) (i) Notice of every redemption of Series A Preferred shall be given by mailing such notice not less than twenty (20) nor more than fifty (50) days prior to the date fixed for such redemption to each holder of record of shares of Series A Preferred to be so redeemed, and shall be sufficiently given if the Corporation shall cause a copy thereof to be mailed to such holders of record at their respective addresses as the same shall appear on the books of the Corporation, by first class mail, postage prepaid; provided, however, that the failure to mail such notice to one or more of such holders shall not affect the validity of such redemption as to the holders to whom the notice was mailed. Such notice shall include among its other provisions a statement indicating the subparagraph of this paragraph 3 pursuant to which the redemption is being made. If less than all of the outstanding Series A Preferred is to be redeemed, the redemption may be made pro rata, by lot or in such other equitable manner as may be prescribed by resolution of the Board of Directors.

(ii) Subject to the foregoing and to the provisions contained in this paragraph 3, the Board of Directors shall have full power and authority to prescribe the terms and conditions upon which Series A Preferred shall be redeemed from time to time.

(iii) If any such notice of redemption shall have been duly given of if the Corporation shall have granted to a bank or trust company an irrevocable written authorization promptly to give or complete such notice and pay all amounts due to holders of shares (as evidenced by a list of holders of such shares certified by the president or a vice president and by the secretary or an assistant secretary of the Corporation) called for redemption and if, on or before the redemption date specified therein, all funds necessary for such redemption (including an amount equal to the accumulated and unpaid dividends thereon to the date fixed for redemption) shall have been deposited by the Corporation with such bank or trust company designated in such notice, in trust for the pro rata benefit of the holders of the shares so called for redemption, then, notwithstanding that any certificate for shares so called for redemption shall not have been surrendered for cancellation, form and after the time of such deposit (or form and after the redemption date if such notice shall fail to state that the holders of the shares called for redemption may receive their redemption price at any time after such deposit), all shares with respect to which such deposit shall have been made shall no longer be deemed to be outstanding and all rights with respect to such shares shall cease and terminate, except for the right of the holders of the certificates, upon surrender thereof, to receive the redemption price, plus any accumulated but unpaid dividends, out of the funds so deposited, without interest. Any interest accrued on such funds shall be paid to the Corporation from time to time.

(iv) If such notice of redemption shall have been duly given, and if on or before the redemption date specified therein all funds necessary for such redemption shall be set aside and continue to be available for payment on and after the redemption date upon surrender of the certificates for the shares so called for redemption, then, notwithstanding that any certificate for shares so called for

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redemption shall not have been surrendered for cancellation, the shares so called for redemption shall, on and after such redemption date, no longer deemed to be outstanding, and all rights with respect to such shares shall terminate on such redemption date, except for the right of the holders of the certificates, upon surrender thereof, to receive the amount payable on redemption thereof, without interest.

(v) Any funds so set aside or deposited, as the case may be, and unclaimed at the end of six years from such redemption date shall be released or repaid to the Corporation to be held for the benefit of such holder, after which the holders of the shares so called for redemption shall look only to the Corporation for the payment thereof.

(c) Any shares of Series A Preferred redeemed, purchased or otherwise acquired by the Corporation shall be deemed canceled and may not under any circumstances thereafter be reissued as Series A Preferred or any other series of Preferred Stock, $1.00 par value, or otherwise disposed of by the Corporation, and the Corporation shall from time to time and at least once each year cause all such shares to be canceled in the manner provided by law.

     4. Priority in Event of Dissolution and Liquidation or Sale of Assets.

(a) Subject to the remaining provisions of this paragraph 4, in the event of any sale of all or substantially all of the assets of the Corporation or any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or otherwise (a “Liquidating Event”), after payment or provision for payment of the debts and other liabilities of the Corporation, the holders of Series A Preferred shall be entitled to receive, out of the remaining net assets of the Corporation, an amount equal to $10.00, plus all accumulated but unpaid dividends (the “Liquidation Value”), in cash for each outstanding share of Series A preferred, before any distribution or payment shall be made to the holders of Common Stock of the Corporation. Upon the occurrence of any Liquidating Event, and after payment or provision for payment of the debts and other liabilities of the Corporation, if the assets of the Corporation available for distribution to shareholders shall be insufficient to permit the payment to the holders of Series A Preferred of an amount equal to the Liquidation value per share, then all the remaining assets of the Corporation shall be distributed ratably among the holders of Series A Preferred then outstanding according to the number of shares held by each. After payment in full to the holders of Series A Preferred of the amounts distributable to them as herein provided, the holders of any other junior capital stock shall be entitled, to the exclusion of the holders of Series A Preferred, to share ratably in the remaining assets of the Corporation in accordance with their respective rights.

(b) Neither the consolidation nor merger of the Corporation with or into any other corporation shall be deemed to be a sale of all or substantially all of the assets of the Corporation or a liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or otherwise, within the meaning of this paragraph 4.

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     (c) No provision of this paragraph 4 shall in any manner, prior to any sale of all or substantially all of the assets of the Corporation or any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or otherwise, create or be considered or deemed to create any restriction upon the surplus of the Corporation or prohibit the payment of dividends on the capital stock of the Corporation out of the funds of the Corporation legally available therefor, nor shall any such restriction or prohibition be in any manner implied from the provisions of this paragraph 4.

ARTICLE VI

     No shareholder of the corporation will by reason of his holding shares of capital stock of the corporation have any preemptive or preferential rights to purchase or subscribe to any shares of any class of capital stock of the corporation, or any notes, debentures, bonds, warrants, options or other securities of the corporation, now or hereafter to be authorized.

ARTICLE VII

     The corporation will not commence business until it has received for the issuance of its shares consideration of the value of at least One Thousand and No/100 Dollars ($1,000), consisting of money paid, labor done or property actually received, which property actually received shall have a value of not less than One Thousand and No/100 Dollars ($1,000).

     ARTICLE VIII

     The number of directors shall be fixed in the manner provided in the Bylaws of the corporation. The current Board of Directors consists of four directors, and the names and addresses of the persons who are serving as directors until their successors are elected and qualified are:

Name	Address
Donald H. Neustadt	1231 Greenway Tower Suite 800, Irving, Texas 75038
Wallace M. Swanson	1231 Greenway Tower Suite 800 Irving, Texas 75038
Edward W. Rose, III	2660 One Dallas Centre 350 North St. Paul Street Dallas, Texas 75201
Marshall B. Payne	2600 One Dallas Centre 350 North St. Paul Street Dallas, Texas 75201

ARTICLE IX

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     The corporation may purchase, directly or indirectly, its own shares of capital stock to the extent of the aggregate of unrestricted capital surplus and unrestricted reduction surplus without submitting such purchase to vote of the shareholders of the corporation.

ARTICLE X

     Notwithstanding any provisions of the Texas Business Corporation Act now or hereafter in force requiring for action to be authorized or taken on any matter the affirmative vote of two-thirds, or any other percentage, of the outstanding shares of capital stock, or of any class or series of capital stock, of the corporation entitled by law to vote on such matter, any action of the shareholders of the corporation may be authorized and taken by the affirmative vote of the shareholders of the majority of such outstanding shares of capital stock, or of any such class or series of capital stock of the corporation.

ARTICLE XI

     Special meetings of shareholders of the Corporation may be called only by the Chairman of the Board, Chief Executive Officer, President or the Board of Directors of the Corporation or by holders of at least twenty-five (25) percent of all shares entitled to vote at the proposed special meeting.

ARTICLE XII

     To the fullest extent permitted by Texas statutory or decisional law, as the same exists or may hereafter be amended or interpreted, a director of the Corporation shall not be liable to the Corporation or its shareholders for any act or omission in such director’s capacity as a director. Any repeal or amendment of this Article, or adoption of any other provision of these Articles of Incorporation inconsistent with this Article, by the shareholders of the Corporation shall be prospective only and shall not adversely affect any limitation on the liability to the Corporation or its shareholders of a director of the Corporation existing at the time of such repeal, amendment or adoption of an inconsistent provision.

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EX-10.1

Exhibit 10.1

CHANGE-IN-CONTROL EXECUTIVE SEVERANCE AGREEMENT

This Change-in-Control Executive Severance Agreement (this “Agreement”), dated and effective November 15, 2004, is between Ace Cash Express, Inc., a Texas corporation (the “Company”), and Barry M. Barron (the “Executive”).

Statement of Purpose

The Company desires, for its continued success, to have the benefit of services of experienced management personnel like the Executive. The Board of Directors of the Company therefore believes that it is in the best interest of the Company that, in the event of any prospective change in control of the Company, the Executive be reasonably secure in his employment and position with the Company, so that the Executive can exercise independent judgment as to the best interest of the Company and its shareholders, without distraction by any personal uncertainties or risks regarding the Executive’s continued employment with the Company created by the possibility of a change in control of the Company. Therefore, the Company and the Executive entered into a Change-in-Control Executive Severance Agreement dated May 15, 2001 (the “Previous Severance Agreement”), to assure severance benefits to the Executive in connection with certain terminations of employment upon or after a change in control of the Company, and they now wish to amend and supersede the Previous Severance Agreement with this Agreement to effect the same purpose.

Agreement

In consideration of the statements made in the Statement of Purpose and the mutual agreements set forth below, the Company and the Executive agree as follows:

1.	Definitions and Interpretation. Various terms used in this Agreement are defined in Exhibit A; each of the defined terms used in this Agreement begins with a capital letter. Various interpretative matters for this Agreement are also set forth in Exhibit A. Exhibit A is an integral part of this Agreement and is incorporated in this Agreement by reference.
2.	Term of Agreement. This Agreement will continue in effect until the earliest of the following:

(a) Any termination of the Executive’s employment with the Company before a Change in Control. (If the Executive is employed by any Subsidiary, whether or not he is also employed by the Company, any reference in this Agreement to the Executive’s employment by the Company shall be deemed to include his employment by a Subsidiary.)

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(b)	11:59 p.m. on June 30 following at least six months’ Notice of termination of this Agreement by either Party, if that June 30 occurs before a Change in Control.
(c)	The Company’s performance of all of its obligations, and the Executive’s receipt of all of the payments and benefits to which he is entitled, under this Agreement after a Severance Payment Event.

3. Severance Benefits. Upon a Severance Payment Event, in addition to any other severance or employment-termination compensation or benefits to which the Executive may be entitled from the Company or any Subsidiary under the terms of any Plan of which the Executive was a participant or a beneficiary immediately before the Severance Payment Event, the Company shall:

(a)	Pay the Executive in cash, within five Business Days after the Severance Payment Event, all of his Base Salary and all other earned but unpaid cash compensation or entitlements due to the Executive through (and including) the date of the Severance Payment Event, including unused earned and accrued vacation pay and unreimbursed reimbursable business expenses.
(b)	Make the Severance Payment in cash within five Business Days after the Severance Payment Event.
(c)	Provide or arrange to provide the Executive (whether or not under any Welfare Benefit Plan then maintained), at the Company’s sole expense and for the Benefit Continuation Period, Welfare Benefits that are substantially the same the Welfare Benefits provided to the Executive (and the Executive’s dependents and beneficiaries) immediately before the Severance Payment Event, except that the Welfare Benefits to which the Executive is entitled under this subsection (c) will be subject to the Executive’s compliance with Section 4 and will be reduced to the extent that comparable welfare benefits are received by the Executive from an employer other than the Company or any Subsidiary during the Benefit Continuation Period. (The fact that the cost of the participation by the Executive, or the Executive’s dependents or beneficiaries, in any Welfare Benefit Plan was paid indirectly by the Company, as a reimbursement or a credit to the Executive, before the Severance Payment Event does not mean that the corresponding Welfare Benefits were not “provided to the Executive” by the Company for the purpose of this subsection (c).)

In addition, each Stock Award outstanding immediately before the Severance Payment Event and not yet exercised or forfeited (as the case may be) will accelerate and become fully vested, exercisable, or nonforfeitable upon the Severance Payment Event, as though all requisite time had passed to vest the Stock Award or cause it to become exercisable or nonforfeitable.

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5. Nondisclosure and Noncompetition. As an inducement to the Company to enter into this Agreement, the Executive represents to and covenants with or in favor of the Company as follows:

(a)	The Executive has acquired and will acquire during his employment with the Company knowledge or awareness of various Trade Secrets. All of the Trade Secrets are valuable, special, and unique assets of the Company, and the disclosure of any of them, or their use in any manner, other than on behalf of the Company would cause substantial injury, loss of profits, and loss of goodwill to the Company.
(b)	During his employment with the Company and at all times thereafter, the Executive shall not, directly or indirectly, disclose or disseminate any Trade Secret to any other Person or lecture upon, publish articles concerning, or otherwise use or employ any Trade Secret, except (in any case) to the extent required in the course of his employment with the Company or by applicable law, rule, or regulation (including legal process). In addition, all Trade Secrets and materials containing Trade Secrets prepared or compiled by the Executive or furnished or made available to him during his employment with the Company are the sole and exclusive property of the Company, and none of those Trade Secrets or materials containing Trade Secrets may be retained by the Executive upon or following any termination of his employment with the Company.
(c)	If the Executive’s employment with the Company terminates (other than because of the Executive’s death or Disability) upon or before the termination of this Agreement, the Executive shall not, at any time during the first year after that termination of employment anywhere in the Restricted Territory, directly or indirectly engage in any activity which, or any activity for any enterprise or entity a material part of the business of which, is competitive with the business conducted, or proposed during his employment with the Company to be conducted, by the Company. The activity prohibited by the preceding sentence includes any kind of ownership (other than ownership of securities of a publicly held entity of which the Executive owns less than 1% of a class of outstanding securities) in or of, or acting as a director, officer, agent, employee, or consultant of or for, any enterprise or entity referred to in the preceding sentence.
(d)	The Executive acknowledges and agrees that the restrictions in this Section 4 are reasonable and not unduly burdensome to him under the circumstances. The Executive’s compliance with this Section 4 is a condition to the Company’s obligation to continue to provide Welfare Benefits to the Executive under subsection (c) of Section 3; the Company may refuse to continue providing those Welfare Benefits if there is any such noncompliance. The Company shall have the burden of proof regarding any question of the Executive’s compliance or noncompliance with this Section 4.

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6.	Executive’s Legal Expenses. The Company shall pay the Executive an amount equal to the reasonable legal fees and other expenses incurred in good faith by him in obtaining or retaining payments and benefits under this Agreement, including all such fees and expenses (if any) in enforcing, in good faith, any right or benefit provided by this Agreement or in connection with the contest or defense of any tax audit or proceeding by the Internal Revenue Service to the extent that Section 4999 of the Code is alleged or claimed to apply to any payment or benefit provided under this Agreement. The Company will be obligated under the preceding sentence even if the Executive is not successful in any enforcement claim or counterclaim by him, or in any such tax contest or defense, so long as he acted in good faith. The Company shall make any payment required by this Section 5 within five Business Days after Notice from the Executive requesting payment and providing such evidence of the incurrence of those fees and expenses as the Company may reasonably request.
7.	No Mitigation. If a Severance Payment Event occurs, the Executive need not seek other employment or attempt in any way to reduce the amount of any payments or benefits to the Executive by the Company under this Agreement. The amount of the Severance Payment and, except as stated in subsection (c) of Section 3 and in subsection (e) of Section 4, any other severance benefit provided or to be provided to the Executive by the Company under Section 3 shall not be reduced by any compensation earned by the Executive as the result of any other employment, consulting relationship, or other business activity.
8.	No Set-off. The Company’s obligations under this Agreement are absolute and unconditional, and not subject to any set-off, counterclaim, recoupment, defense, or other right that the Company or any Subsidiary may have against the Executive, except as stated in subsection (c) of Section 3 and in subsection (e) of Section 4.
9.	Tax Withholding. The Company shall withhold from any payments or benefits under this Agreement (whether or not otherwise acknowledged under this Agreement) all federal, state, local, or other taxes as may be legally required to be withheld.
10.	Employment Status. Nothing in this Agreement provides the Executive with any continued employment with the Company or any Subsidiary or shall interfere with the Company’s right to terminate the Executive’s employment at any time and for any (or no) reason.
11.	No Exclusivity. Nothing in this Agreement prevents or limits the Executive’s participation in any Plan for which the Executive may qualify or shall impair any rights that the Executive may have under any other contract or agreement with the Company or any Subsidiary.
12.	Governing Law; Jurisdiction. All matters or issues relating to the interpretation, construction, validity, and enforcement of this Agreement shall be governed by the laws of Texas, without giving effect to any choice-of-law principle that would cause the application of the laws of any jurisdiction other than Texas. Jurisdiction and venue of

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	any action or proceeding relating to this Agreement or any Dispute (to the extent arbitration is not required under Section 12) shall be exclusively in Dallas County, Texas.
13.	Arbitration. Except as provided in subsection (h) of this Section 12, any Dispute must be resolved by binding arbitration in accordance with the following:

(a)	A Party may begin arbitration by filing a demand for arbitration in accordance with the Arbitration Rules and concurrently Notifying the other Party of that demand. If the Parties are unable to agree upon a panel of three arbitrators within ten days after the demand for arbitration was filed (and do not agree to an extension of that ten-day period), either Party may request the Dallas office of the American Arbitration Association to appoint the arbitrator or arbitrators necessary to complete the panel in accordance with the Arbitration Rules. Each arbitrator so appointed shall be deemed accepted by the Parties as part of the panel.
(b)	The arbitration shall be conducted in the Dallas-Fort Worth, Texas metropolitan area at a place and time agreed upon by the Parties with the panel, or if the Parties cannot agree, as designated by the panel. The panel may, however, call and conduct hearings and meetings at such other places as the Parties may agree or as the panel may, on the motion of one Party, determine to be necessary to obtain significant testimony or evidence.
(c)	The panel may authorize any and all forms of discovery upon a Party’s showing of need that the requested discovery is likely to lead to material evidence needed to resolve the Dispute and is not excessive in scope, timing, or cost.
(d)	The arbitration shall be subject to the Federal Arbitration Act and conducted in accordance with the Arbitration Rules to the extent that they do not conflict with this Section 12. The Parties and the panel may, however, agree to vary to provisions of this Section 12 or the matters otherwise governed by the Arbitration Rules.
(e)	The arbitration hearing shall be held within 30 days after the appointment of the panel. The panel’s final decision or award shall be made within 30 days after the hearing. That final decision or award shall be made by unanimous or majority vote or consent of the arbitrators constituting the panel, and shall be deemed issued at the place of arbitration. The panel’s final decision or award shall be based on this Agreement and applicable law; the panel may not act according to equity and conscience or apply the law merchant.
(f)	The panel’s final decision or award may include injunctive relief in response to any actual or impending breach of this Agreement or any other actual or impending action or omission of a Party under or in connection with this Agreement.

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(g)

The panel’s final decision or award shall be final and binding upon the Parties, and judgment upon that decision or award may be entered in any court having jurisdiction. The Parties waive any right to apply or appeal to any court for relief from the preceding sentence or from any decision of the panel made before the final decision or award.

(h)

Nothing in this Section 12 limits the right of either Party to apply to a court having jurisdiction to (i) enforce the agreement to arbitrate in accordance with this Section 12, (ii) seek provisional or temporary injunctive relief, in response to an actual or impending breach of the Agreement or otherwise so as to avoid a irrevocable damage or maintain the status quo, until a final arbitration decision or award is rendered or the Dispute is otherwise resolved, or (iii) challenge or vacate any final arbitration decision or award that does not comply with this Section 12. In addition, nothing in this Section 12 prohibits the Parties from resolving any Dispute (in whole or in part) by agreement.

13.	Company’s Successor. In addition to any obligations imposed by law upon any successor to the Company, the Company shall require any successor to all or substantially all of the Company’s business or assets (whether direct or indirect and whether by purchase, reorganization, merger, share exchange, consolidation, or otherwise) to expressly assume and agree to perform the Company’s obligations under this Agreement to the same extent, and in the same manner, as the Company would be required to perform if no such succession had occurred. This Agreement shall be binding upon, and inure to the benefit of, any successor to the Company.
14.	Executive’s Successor. This Agreement shall inure to the benefit of, and be enforceable by, the Executive’s personal or legal representatives, administrators, successors, executors, heirs, distributees, devisees, and legatees. If the Executive should die after a Severance Payment Event, but before any payment or benefit to which the Executive is entitled under this Agreement has been received by the Executive, all payments or benefits to which the Executive would have been entitled had he continued to live (other than any such Welfare Benefits that, by their terms, terminate upon the Executive’s death) shall be made or provided in accordance with this Agreement to the representatives, executors, or administrators of the Executive’s estate.
15.	Restricted Assignment. Except as expressly provided in Sections 13 and 14, neither Party may assign, transfer, or delegate this Agreement or any of its or his rights or obligations under this Agreement without the prior written consent of the other Party. Any attempted assignment, transfer, or delegation in violation of the preceding sentence shall be void and of no effect.
16.	Waiver and Amendment. No term or condition of this Agreement shall be deemed waived other than by a writing signed by the Party against whom or which enforcement of the waiver is sought. Without limiting the generality of the preceding sentence, a Party’s failure to insist upon the other Party’s strict compliance with any provision of this Agreement or to assert any right that a Party may have under this Agreement shall not be

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	deemed a waiver of that provision or that right. Any written waiver shall operate only as to the specific term or condition waived under the specific circumstances and shall not constitute a waiver of that term or condition for the future or a waiver of any other term or condition. No amendment or modification of this Agreement shall be deemed effective unless stated in a writing signed by the Parties.
17.	Entire Agreement. This Agreement, including the Statement of Purpose, contains the Parties’ entire agreement regarding the subject matter of this Agreement and supersedes all prior agreements and understandings between them regarding that subject matter, including the Previous Severance Agreement. The Parties have made no agreements, representations, or warranties regarding the subject matter of this Agreement that are not set forth in this Agreement.
18.	Notice. Each notice or other communication required or permitted under this Agreement shall be in writing and transmitted, delivered, or sent by personal delivery, prepaid courier or messenger service (whether overnight or same-day), prepaid telecopy or facsimile, or prepaid certified United States mail (with return receipt requested), addressed (in any case) to the other Party at the address or number for that Party set forth below that Party’s signature on this Agreement, or at such other address or number as the recipient has designated by Notice to the other Party. Each notice or communication so transmitted, delivered, or sent:

(a)	in person, by courier or messenger service, or by certified United States mail shall be deemed given, received, and effective on the date delivered to or refused by the intended recipient (with the return receipt, or the equivalent record of the courier or messenger, being deemed conclusive evidence of delivery or refusal), or
(b)	by telecopy or facsimile shall be deemed given, received, and effective on the date of actual receipt (with the confirmation of transmission being deemed conclusive evidence of receipt, except where the intended recipient has promptly Notified the other Party that the transmission is illegible).

	Nevertheless, if the date of delivery or transmission is not a Business Day, or if the delivery or transmission is after 5:00 p.m. on a Business Day, the notice or other communication shall be deemed given, received, and effective on the next Business Day.
19.	Severability. If any provision of this Agreement is or becomes invalid or unenforceable, that provision (to the extent invalid or unenforceable) shall be deemed amended or reformed to the extent required to render it valid and enforceable, and the remainder of this Agreement shall be unaffected and shall continue in effect.
20.	Counterparts. This Agreement may be signed in counterparts, with the same effect as if both Parties had signed the same document. All counterparts shall be construed together to constitute one, and the same, document.

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The Parties have signed this Agreement to be effective as of the date set forth in the first paragraph.

Company:	Executive:
ACE CASH EXPRESS, INC.
Jay B. Shipowitz, CEO and President	Barry M. Barron
Address for Notice:	Address for Notice:
1231 Greenway Drive
Suite 600	, Texas
Irving, Texas 75038	Telecopy no. (      )      -
Telecopy no. (972) 550-5150
Attention: Chief Executive Officer

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Exhibit A

to

Change-in-Control Executive Severance Agreement

Defined Terms. In the Agreement, the following terms have the corresponding meanings:

“Acquiring Person” means any Person (other than an Excluded Person) who or which, alone or together with all Affiliates and Associates of that Person, is the Beneficial Owner of 25% or more of the Voting Securities of the Company then outstanding.

“Affiliate” and “Associate” have the respective meanings ascribed to them in Rule 12b-2 under the Exchange Act.

“Agreement” means the Change-in-Control Executive Severance Agreement between the Parties of which this Exhibit A is a part.

“Arbitration Rules” means the Rules for Commercial Arbitration of the American Arbitration Association in effect at the time of an arbitration of a Dispute.

“Base Salary” means the Executive’s annual salary, or base or fixed annual compensation, of record from the Company or a Subsidiary that is his primary employer, excluding any amount received or to be received under incentive compensation Plans, whether or not deferred.

“Beneficial Owner” means beneficial owner as defined in Rule 13d-3 under the Exchange Act. (“Beneficially Owns” has the correlative meaning.) Any calculation of the number of Voting Securities outstanding at any particular time, including for purposes of determining the particular percentage of such outstanding Voting Securities of which any Person is the Beneficial Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) under the Exchange Act.

“Benefit Continuation Period” means 30 consecutive months after a Severance Payment Event.

“Board” means the Board of Directors of the Company.

“Business Day” means any Monday through Friday, excluding any such day on which banks are authorized to be closed in Texas.

“Cause” means:

(i) the Executive’s willful failure to substantially perform his employment duties to the Company, as such duties may exist from time to time, or comply with the written policies of the Company (other than any such failure resulting from Disability or the Executive’s

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	termination for Good Reason) which continues for a reasonable time after a Notice to the Executive from the Board that (A) identifies the manner in which the Board believes that the Executive has not substantially performed the Executive’s duties or complied with written policies and (B) demands substantial performance or compliance within a specified reasonable time; or
(ii)	the Executive’s willful engaging in conduct (including any illegal conduct) that is demonstrably and materially injurious to the Company or any Subsidiary, monetarily or otherwise.

For purposes of this definition, no act, or failure to act, by the Executive shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s act, or failure to act, was in the best interest of the Company and its Subsidiaries. For the purpose of clause (i) of this definition, a “reasonable time” shall be a time period determined by the Board, acting in good faith, to be sufficient under normal circumstances to correct the deficient performance or compliance described in the Notice to the Executive.

“Change in Control” means the occurrence of any one or more of the following:

(i)	Any Person becomes an Acquiring Person, except as the result of (A) any acquisition of Voting Securities of the Company by the Company or (B) any acquisition of Voting Securities of the Company directly from the Company (as authorized by the Board).
(ii)	Individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Board; and for this purpose, any individual who becomes a member of the Board after the date of this Agreement whose election, or nomination for election by holders of the Company’s Voting Securities, was approved by the vote of at least a majority of the individuals then constituting the Incumbent Board shall be considered a member of the Incumbent Board (except that any such individual whose initial election as director occurs as the result of an actual or threatened election contest, within the meaning of Rule 14a-11 under the Exchange Act, or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not be so considered).
(iii)	The consummation of a reorganization, merger, share exchange, consolidation, or sale or disposition of all or substantially all of the assets of the Company unless, in any case, the Persons who or which Beneficially Own the Voting Securities of the Company immediately before that transaction Beneficially Own, directly or indirectly, immediately after the transaction, at least 75% of the Voting Securities of the Company or any other corporation or other entity resulting from or surviving the transaction (including a corporation or other entity which, as the result of the transaction, owns all or substantially all of Voting Securities of the Company or all or substantially all of the Company’s assets, either directly or indirectly through one or more subsidiaries) in substantially the same proportion as their respective ownership of the Voting Securities of the Company immediately before that transaction.

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(iv) The Company’s shareholders approve a complete liquidation or dissolution of the Company.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Company” means Ace Cash Express, Inc., a Texas corporation.

“Disability” means the Executive’s inability, because of any physical or mental illness or impairment, to substantially perform all of his employment duties to the Company, on a full-time basis, for a period of at least 90 consecutive days, as reasonably determined by the Board, based on advice from one or more competent medical doctors selected by the Company or any of its insurers and acceptable to the Executive or his legal representative.

“Dispute” means any dispute, disagreement, claim, or controversy arising in connection with or relating to the Agreement or the validity, interpretation, performance, breach, or termination of the Agreement.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

“Excluded Person” means:

(i)	the Executive or any group (within the meaning of Section 13(d)(3) of the Exchange Act) of which the Executive is a member;
(ii)	any Person that controls (as defined in Rule 12b-2 under the Exchange Act) the Company as of the date of the Agreement or any group of which any such Person is a member;
(iii)	any employee-benefit plan, or related trust, sponsored or maintained by the Company or any of its Subsidiaries, or any trustee or other fiduciary thereof; or
(iv)	any corporation or other entity owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of the Voting Securities of the Company.

“Executive” means William S. McCalmont.

“Good Reason” means:

(i) the assignment to the Executive of any duties inconsistent in any material respect with the Executive’s position (which, in this definition, includes status, office, title, and reporting requirements), duties, or responsibilities as an officer of the Company or any Subsidiary, or any other material diminution in the Executive’s position, authority, duties, or responsibilities from those in effect as of three months before a Change in Control, other than (in any case) an isolated and inadvertent action not taken in bad faith that is remedied by the Company promptly after Notice thereof to the Company by the Executive;

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(ii)	the Company’s requiring the Executive to be based at any office or location farther than 50 miles from the Executive’s office or principal job location immediately before a Change in Control, except for required business travel to an extent substantially consistent with the Executive’s travel obligations immediately before the Change in Control;
(iii)	any failure to comply with and satisfy Section 13, if the Company’s successor has received at least ten days’ prior written notice from the Company or the Executive of the requirements of Section 13;
(iv)	a material reduction in the Executive’s Base Salary from the highest amount in effect at any time within three months before a Change in Control;
(v)	the failure by the Company or any Subsidiary to continue in effect any compensation Plan in which the Executive participates immediately before the Change in Control that is material to the Executive’s total compensation, unless an equitable arrangement (embodied in an ongoing substitute or alternative Plan or arrangement) has been made with respect to that Plan, or the failure by the Company or any Subsidiary to continue the Executive’s participation in any such compensation Plan (or in such substitute or alternative Plan or arrangement) on a basis not materially less favorable to the Executive, both in terms of the amount of benefits provided and the level of the Executive’s participation relative to other participants, than existed at any time within three months before the Change in Control; or
(vi)	the failure by the Company or any Subsidiary to continue to provide the Executive with benefits similar in all material respects to those enjoyed by the Executive under any Plan in which the Executive was participating at any time within three months before the Change in Control, the taking of action by the Company or any Subsidiary which would directly or indirectly materially reduce any of such benefits or deprive the Executive of any material fringe benefit enjoyed by the Executive at any time three months before the Change in Control, or the failure by the Company or any Subsidiary to provide the Executive with the number of paid vacation days to which the Executive is entitled on the basis of years of service with the Company and its Subsidiary in accordance with the Company’s or a Subsidiary’s normal vacation policy in effect at any time within three months before the Change in Control.

“Incumbent Board” means the members of the Board on the effective date of the Agreement (subject, however, to clause (ii) of the definition of “Change in Control”).

“Notice” means a written communication complying with Section 18. (“Notify” has the correlative meaning.)

“Parties” means, collectively, the Company and the Executive. (“Party” means either the Company or the Executive.)

“Person” means any individual, firm, corporation, partnership, limited liability company, trust, or other entity, including any successor (by merger or otherwise) of such entity.

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“Plan” means any bonus, incentive compensation, savings, retirement, stock option, stock appreciation, stock ownership or purchase, pension, deferred compensation, or Welfare Benefits plan, policy, practice, program, or arrangement of (including any separate contract or agreement with) the Company or any Subsidiary for its employees.

“Restricted Territory” means, collectively, Dallas County, Texas; each county (or equivalent subdivision) of any state, district, or territory of the United States of America as to which the Executive had supervisory responsibility for the Company during his employment with the Company; and each county (or equivalent territory) adjacent to any of the preceding counties (or equivalent territories).

“Severance Payment” means an amount equal to two and one-half times the sum of:

(i)	the Executive’s highest Base Salary in effect at any time within three months before the Change in Control;
(ii)	the highest amount of the annual automobile allowance payable to the Executive within three months before the Change in Control; and
(iii)	an amount equal to the average of the annual bonuses or incentive cash compensation paid or payable to the Executive by the Company and any Subsidiary for the three fiscal years of the Company preceding the fiscal year in which the Change in Control occurs, but in any event no less than the Executive’s targeted bonus or amount of incentive cash compensation for the fiscal year in which the Change in Control occurs (or if not yet determined for that fiscal year before the Change in Control occurs, the Executive’s targeted bonus or amount of incentive compensation for the preceding fiscal year).

For clause (iii) of this definition: (a) if the Executive has not been employed by the Company and a participant in a bonus or incentive cash compensation Plan during the three completed fiscal years of the Company before the Change in Control, the average of the annual bonuses or incentive cash compensation shall be calculated over the completed fiscal years of the Company during which the Executive was so employed and a participant in a bonus or incentive cash compensation Plan; (b) the calculation of the average of the annual bonuses or incentive cash compensation of the Executive shall include a fiscal year during which the Executive was employed by the Company and a participant in a bonus or incentive cash compensation Plan even if the Executive did not earn any bonus or incentive cash compensation for that fiscal year; (c) the bonus or incentive cash compensation paid or payable to the Executive for only part of a fiscal year of the Company shall be annualized (on the same basis as the one on which the bonus or compensation was prorated) for that fiscal year to calculate the average; and (d) the “targeted” bonus or incentive cash compensation for the fiscal year of the Company in which the Change in Control occurs shall be the amount identified as a “target” by the Board (or its compensation committee that administers the bonus or incentive cash compensation Plan) for the Executive, or if no amount is identified as a “target,” the “targeted” amount shall be the amount of the bonus or incentive cash compensation that the Executive could earn for that fiscal year if the business plan for the Company or the Executive, or both, is satisfied (but not exceeded).

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“Severance Payment Event” means the occurrence of a Change in Control coincident with or followed, at any time before the end of the 24th month immediately following the month in which the Change in Control occurred, by the termination of the Executive’s employment with the Company for any reason other than (a) by the Executive without Good Reason, (b) by the Company because of Disability or for Cause, or (c) by the death of the Executive. Any transfer of the Executive’s employment from the Company to a Subsidiary, from a Subsidiary to the Company, or from one Subsidiary to another Subsidiary is not a termination of the Executive’s employment by the Company for purposes of the Agreement (though any such transfer might, depending on the circumstances, constitute or result in a termination of employment by the Executive for Good Reason).

“Stock Award” means a stock option, stock appreciation right, restricted stock grant, performance share plan, or any other agreement in which the Executive has, or will (by the passage of time only, not based on the Executive’s performance) have, (a) an interest in capital stock of the Company or a right to obtain capital stock or an interest in capital stock of the Company, or (b) an interest or right the economic value of which depends solely on the performance of the capital stock of the Company.

“Subsidiary” means a corporation or other entity, whether incorporated or unincorporated, of which at least a majority of the Voting Securities is owned, directly or indirectly, by the Company.

“Total Severance Benefits” means the Severance Payment and all other payments and benefits received or to be received by the Executive under the Agreement and all payments and benefits (if any) to which the Executive may be entitled under any Plan upon or as the result of a Change in Control or the termination of his employment with the Company, or both.

“Trade Secrets” means any and all information and materials (in any medium) that are proprietary to the Company or are treated as confidential by the Company as part of or relating to all or any portion of the Company’s business, including information and materials about the products and services offered, or the needs of customers served, by the Company; compilations of information, records and specifications, processes, programs, and systems of the Company; research of or for the Company; and methods of doing business of the Company.

“Voting Securities” means securities or other interests having by their terms ordinary voting power to elect members of the board of directors of a corporation or individuals serving similar functions for a noncorporate entity.

“Welfare Benefits” means medical, prescription, dental, disability, employee life, group life, accidental death, and travel accident insurance (whether funded by insurance policy or self-insured by the Company or any Subsidiary) provided or arranged by the Company or any Subsidiary to be provided to its employees.

“Welfare Benefit Plan” means any Plan that provides any Welfare Benefits.

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Interpretive Matters. In the interpretation of the Agreement, except where the context otherwise requires:

(a)	“including” or “include” does not denote or imply any limitation;
(b)	“or” has the inclusive meaning “and/or”;
(c)	the singular includes the plural, and visa a versa, and each gender includes each of the others;
(d)	captions or headings are only for reference and are not to be considered in interpreting the Agreement;
(e)	“Section” refers to a Section of the Agreement, unless otherwise stated in the Agreement;
(f)	“month” refers to a calendar month; and
(g)	a reference to any statute, rule, or regulation includes any amendment thereto or any statute, rule, or regulation enacted or promulgated in replacement thereof.

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EX-10.2

Exhibit 10.2

CHANGE-IN-CONTROL EXECUTIVE SEVERANCE AGREEMENT

This Change-in-Control Executive Severance Agreement (this “Agreement”), dated and effective November 15, 2004, is between Ace Cash Express, Inc., a Texas corporation (the “Company”), and William S. McCalmont (the “Executive”).

Statement of Purpose

The Company desires, for its continued success, to have the benefit of services of experienced management personnel like the Executive. The Board of Directors of the Company therefore believes that it is in the best interest of the Company that, in the event of any prospective change in control of the Company, the Executive be reasonably secure in his employment and position with the Company, so that the Executive can exercise independent judgment as to the best interest of the Company and its shareholders, without distraction by any personal uncertainties or risks regarding the Executive’s continued employment with the Company created by the possibility of a change in control of the Company. Therefore, the Company and the Executive entered into a Change-in-Control Executive Severance Agreement dated August 5, 2003 (the “Previous Severance Agreement”), to assure severance benefits to the Executive in connection with certain terminations of employment upon or after a change in control of the Company, and they now wish to amend and supersede the Previous Severance Agreement with this Agreement to effect the same purpose.

Agreement

In consideration of the statements made in the Statement of Purpose and the mutual agreements set forth below, the Company and the Executive agree as follows:

1.	Definitions and Interpretation. Various terms used in this Agreement are defined in Exhibit A; each of the defined terms used in this Agreement begins with a capital letter. Various interpretative matters for this Agreement are also set forth in Exhibit A. Exhibit A is an integral part of this Agreement and is incorporated in this Agreement by reference.
2.	Term of Agreement. This Agreement will continue in effect until the earliest of the following:

(a) Any termination of the Executive’s employment with the Company before a Change in Control. (If the Executive is employed by any Subsidiary, whether or not he is also employed by the Company, any reference in this Agreement to the Executive’s employment by the Company shall be deemed to include his employment by a Subsidiary.)

(b) 11:59 p.m. on June 30 following at least six months’ Notice of termination of this

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	Agreement by either Party, if that June 30 occurs before a Change in Control.
(c)	The Company’s performance of all of its obligations, and the Executive’s receipt of all of the payments and benefits to which he is entitled, under this Agreement after a Severance Payment Event.

3. Severance Benefits. Upon a Severance Payment Event, in addition to any other severance or employment-termination compensation or benefits to which the Executive may be entitled from the Company or any Subsidiary under the terms of any Plan of which the Executive was a participant or a beneficiary immediately before the Severance Payment Event, the Company shall:

(a)	Pay the Executive in cash, within five Business Days after the Severance Payment Event, all of his Base Salary and all other earned but unpaid cash compensation or entitlements due to the Executive through (and including) the date of the Severance Payment Event, including unused earned and accrued vacation pay and unreimbursed reimbursable business expenses.
(b)	Make the Severance Payment in cash within five Business Days after the Severance Payment Event.
(c)	Provide or arrange to provide the Executive (whether or not under any Welfare Benefit Plan then maintained), at the Company’s sole expense and for the Benefit Continuation Period, Welfare Benefits that are substantially the same the Welfare Benefits provided to the Executive (and the Executive’s dependents and beneficiaries) immediately before the Severance Payment Event, except that the Welfare Benefits to which the Executive is entitled under this subsection (c) will be subject to the Executive’s compliance with Section 4 and will be reduced to the extent that comparable welfare benefits are received by the Executive from an employer other than the Company or any Subsidiary during the Benefit Continuation Period. (The fact that the cost of the participation by the Executive, or the Executive’s dependents or beneficiaries, in any Welfare Benefit Plan was paid indirectly by the Company, as a reimbursement or a credit to the Executive, before the Severance Payment Event does not mean that the corresponding Welfare Benefits were not “provided to the Executive” by the Company for the purpose of this subsection (c).)

In addition, each Stock Award outstanding immediately before the Severance Payment Event and not yet exercised or forfeited (as the case may be) will accelerate and become fully vested, exercisable, or nonforfeitable upon the Severance Payment Event, as though all requisite time had passed to vest the Stock Award or cause it to become exercisable or nonforfeitable.

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4. Nondisclosure and Noncompetition. As an inducement to the Company to enter into this Agreement, the Executive represents to and covenants with or in favor of the Company as follows:

(a)	The Executive has acquired and will acquire during his employment with the Company knowledge or awareness of various Trade Secrets. All of the Trade Secrets are valuable, special, and unique assets of the Company, and the disclosure of any of them, or their use in any manner, other than on behalf of the Company would cause substantial injury, loss of profits, and loss of goodwill to the Company.
(b)	During his employment with the Company and at all times thereafter, the Executive shall not, directly or indirectly, disclose or disseminate any Trade Secret to any other Person or lecture upon, publish articles concerning, or otherwise use or employ any Trade Secret, except (in any case) to the extent required in the course of his employment with the Company or by applicable law, rule, or regulation (including legal process). In addition, all Trade Secrets and materials containing Trade Secrets prepared or compiled by the Executive or furnished or made available to him during his employment with the Company are the sole and exclusive property of the Company, and none of those Trade Secrets or materials containing Trade Secrets may be retained by the Executive upon or following any termination of his employment with the Company.
(c)	If the Executive’s employment with the Company terminates (other than because of the Executive’s death or Disability) upon or before the termination of this Agreement, the Executive shall not, at any time during the first year after that termination of employment anywhere in the Restricted Territory, directly or indirectly engage in any activity which, or any activity for any enterprise or entity a material part of the business of which, is competitive with the business conducted, or proposed during his employment with the Company to be conducted, by the Company. The activity prohibited by the preceding sentence includes any kind of ownership (other than ownership of securities of a publicly held entity of which the Executive owns less than 1% of a class of outstanding securities) in or of, or acting as a director, officer, agent, employee, or consultant of or for, any enterprise or entity referred to in the preceding sentence.
(d)	The Executive acknowledges and agrees that the restrictions in this Section 4 are reasonable and not unduly burdensome to him under the circumstances.
(e)	The Executive’s compliance with this Section 4 is a condition to the Company’s obligation to continue to provide Welfare Benefits to the Executive under subsection (c) of Section 3; the Company may refuse to continue providing those Welfare Benefits if there is any such noncompliance. The Company shall have the burden of proof regarding any question of the Executive’s compliance or noncompliance with this Section 4.

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5.	Executive’s Legal Expenses. The Company shall pay the Executive an amount equal to the reasonable legal fees and other expenses incurred in good faith by him in obtaining or retaining payments and benefits under this Agreement, including all such fees and expenses (if any) in enforcing, in good faith, any right or benefit provided by this Agreement or in connection with the contest or defense of any tax audit or proceeding by the Internal Revenue Service to the extent that Section 4999 of the Code is alleged or claimed to apply to any payment or benefit provided under this Agreement. The Company will be obligated under the preceding sentence even if the Executive is not successful in any enforcement claim or counterclaim by him, or in any such tax contest or defense, so long as he acted in good faith. The Company shall make any payment required by this Section 5 within five Business Days after Notice from the Executive requesting payment and providing such evidence of the incurrence of those fees and expenses as the Company may reasonably request.
6.	No Mitigation. If a Severance Payment Event occurs, the Executive need not seek other employment or attempt in any way to reduce the amount of any payments or benefits to the Executive by the Company under this Agreement. The amount of the Severance Payment and, except as stated in subsection (c) of Section 3 and in subsection (e) of Section 4, any other severance benefit provided or to be provided to the Executive by the Company under Section 3 shall not be reduced by any compensation earned by the Executive as the result of any other employment, consulting relationship, or other business activity.
7.	No Set-off. The Company’s obligations under this Agreement are absolute and unconditional, and not subject to any set-off, counterclaim, recoupment, defense, or other right that the Company or any Subsidiary may have against the Executive, except as stated in subsection (c) of Section 3 and in subsection (e) of Section 4.
8.	Tax Withholding. The Company shall withhold from any payments or benefits under this Agreement (whether or not otherwise acknowledged under this Agreement) all federal, state, local, or other taxes as may be legally required to be withheld.
9.	Employment Status. Nothing in this Agreement provides the Executive with any continued employment with the Company or any Subsidiary or shall interfere with the Company’s right to terminate the Executive’s employment at any time and for any (or no) reason.
10.	No Exclusivity. Nothing in this Agreement prevents or limits the Executive’s participation in any Plan for which the Executive may qualify or shall impair any rights that the Executive may have under any other contract or agreement with the Company or any Subsidiary.
11.	Governing Law; Jurisdiction. All matters or issues relating to the interpretation, construction, validity, and enforcement of this Agreement shall be governed by the laws of Texas, without giving effect to any choice-of-law principle that would cause the application of the laws of any jurisdiction other than Texas. Jurisdiction and venue of

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	any action or proceeding relating to this Agreement or any Dispute (to the extent arbitration is not required under Section 12) shall be exclusively in Dallas County, Texas.
12.	Arbitration. Except as provided in subsection (h) of this Section 12, any Dispute must be resolved by binding arbitration in accordance with the following:

(a)	A Party may begin arbitration by filing a demand for arbitration in accordance with the Arbitration Rules and concurrently Notifying the other Party of that demand. If the Parties are unable to agree upon a panel of three arbitrators within ten days after the demand for arbitration was filed (and do not agree to an extension of that ten-day period), either Party may request the Dallas office of the American Arbitration Association to appoint the arbitrator or arbitrators necessary to complete the panel in accordance with the Arbitration Rules. Each arbitrator so appointed shall be deemed accepted by the Parties as part of the panel.
(b)	The arbitration shall be conducted in the Dallas-Fort Worth, Texas metropolitan area at a place and time agreed upon by the Parties with the panel, or if the Parties cannot agree, as designated by the panel. The panel may, however, call and conduct hearings and meetings at such other places as the Parties may agree or as the panel may, on the motion of one Party, determine to be necessary to obtain significant testimony or evidence.
(c)	The panel may authorize any and all forms of discovery upon a Party’s showing of need that the requested discovery is likely to lead to material evidence needed to resolve the Dispute and is not excessive in scope, timing, or cost.
(d)	The arbitration shall be subject to the Federal Arbitration Act and conducted in accordance with the Arbitration Rules to the extent that they do not conflict with this Section 12. The Parties and the panel may, however, agree to vary to provisions of this Section 12 or the matters otherwise governed by the Arbitration Rules.
(e)	The arbitration hearing shall be held within 30 days after the appointment of the panel. The panel’s final decision or award shall be made within 30 days after the hearing. That final decision or award shall be made by unanimous or majority vote or consent of the arbitrators constituting the panel, and shall be deemed issued at the place of arbitration. The panel’s final decision or award shall be based on this Agreement and applicable law; the panel may not act according to equity and conscience or apply the law merchant.
(f)	The panel’s final decision or award may include injunctive relief in response to any actual or impending breach of this Agreement or any other actual or impending action or omission of a Party under or in connection with this Agreement.

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(g)

The panel’s final decision or award shall be final and binding upon the Parties, and judgment upon that decision or award may be entered in any court having jurisdiction. The Parties waive any right to apply or appeal to any court for relief from the preceding sentence or from any decision of the panel made before the final decision or award.

(h)

Nothing in this Section 12 limits the right of either Party to apply to a court having jurisdiction to (i) enforce the agreement to arbitrate in accordance with this Section 12, (ii) seek provisional or temporary injunctive relief, in response to an actual or impending breach of the Agreement or otherwise so as to avoid a irrevocable damage or maintain the status quo, until a final arbitration decision or award is rendered or the Dispute is otherwise resolved, or (iii) challenge or vacate any final arbitration decision or award that does not comply with this Section 12. In addition, nothing in this Section 12 prohibits the Parties from resolving any Dispute (in whole or in part) by agreement.

13.	Company’s Successor. In addition to any obligations imposed by law upon any successor to the Company, the Company shall require any successor to all or substantially all of the Company’s business or assets (whether direct or indirect and whether by purchase, reorganization, merger, share exchange, consolidation, or otherwise) to expressly assume and agree to perform the Company’s obligations under this Agreement to the same extent, and in the same manner, as the Company would be required to perform if no such succession had occurred. This Agreement shall be binding upon, and inure to the benefit of, any successor to the Company.
14.	Executive’s Successor. This Agreement shall inure to the benefit of, and be enforceable by, the Executive’s personal or legal representatives, administrators, successors, executors, heirs, distributees, devisees, and legatees. If the Executive should die after a Severance Payment Event, but before any payment or benefit to which the Executive is entitled under this Agreement has been received by the Executive, all payments or benefits to which the Executive would have been entitled had he continued to live (other than any such Welfare Benefits that, by their terms, terminate upon the Executive’s death) shall be made or provided in accordance with this Agreement to the representatives, executors, or administrators of the Executive’s estate.
15.	Restricted Assignment. Except as expressly provided in Sections 13 and 14, neither Party may assign, transfer, or delegate this Agreement or any of its or his rights or obligations under this Agreement without the prior written consent of the other Party. Any attempted assignment, transfer, or delegation in violation of the preceding sentence shall be void and of no effect.
16.	Waiver and Amendment. No term or condition of this Agreement shall be deemed waived other than by a writing signed by the Party against whom or which enforcement of the waiver is sought. Without limiting the generality of the preceding sentence, a Party’s failure to insist upon the other Party’s strict compliance with any provision of this Agreement or to assert any right that a Party may have under this Agreement shall not be

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deemed a waiver of that provision or that right. Any written waiver shall operate only as to the specific term or condition waived under the specific circumstances and shall not constitute a waiver of that term or condition for the future or a waiver of any other term or condition. No amendment or modification of this Agreement shall be deemed effective unless stated in a writing signed by the Parties.

17.

Entire Agreement. This Agreement, including the Statement of Purpose, contains the Parties’ entire agreement regarding the subject matter of this Agreement and supersedes all prior agreements and understandings between them regarding that subject matter, including the Previous Severance Agreement. The Parties have made no agreements, representations, or warranties regarding the subject matter of this Agreement that are not set forth in this Agreement.

18.

Notice. Each notice or other communication required or permitted under this Agreement shall be in writing and transmitted, delivered, or sent by personal delivery, prepaid courier or messenger service (whether overnight or same-day), prepaid telecopy or facsimile, or prepaid certified United States mail (with return receipt requested), addressed (in any case) to the other Party at the address or number for that Party set forth below that Party’s signature on this Agreement, or at such other address or number as the recipient has designated by Notice to the other Party. Each notice or communication so transmitted, delivered, or sent:

(a)	in person, by courier or messenger service, or by certified United States mail shall be deemed given, received, and effective on the date delivered to or refused by the intended recipient (with the return receipt, or the equivalent record of the courier or messenger, being deemed conclusive evidence of delivery or refusal), or
(b)	by telecopy or facsimile shall be deemed given, received, and effective on the date of actual receipt (with the confirmation of transmission being deemed conclusive evidence of receipt, except where the intended recipient has promptly Notified the other Party that the transmission is illegible).

	Nevertheless, if the date of delivery or transmission is not a Business Day, or if the delivery or transmission is after 5:00 p.m. on a Business Day, the notice or other communication shall be deemed given, received, and effective on the next Business Day.
19.	Severability. If any provision of this Agreement is or becomes invalid or unenforceable, that provision (to the extent invalid or unenforceable) shall be deemed amended or reformed to the extent required to render it valid and enforceable, and the remainder of this Agreement shall be unaffected and shall continue in effect.
20.	Counterparts. This Agreement may be signed in counterparts, with the same effect as if both Parties had signed the same document. All counterparts shall be construed together to constitute one, and the same, document.

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The Parties have signed this Agreement to be effective as of the date set forth in the first paragraph.

Company:	Executive:
ACE CASH EXPRESS, INC
Jay B. Shipowitz, CEO and President Address for Notice: 1231 Greenway Drive Suite 600 Irving, Texas 75038 Telecopy no. (972) 550-5150 Attention: Chief Executive Officer	William S. McCalmont Address for Notice: —————-, Texas —————- Telecopy no. (___) ___-___

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Exhibit A

to

Change-in-Control Executive Severance Agreement

Defined Terms. In the Agreement, the following terms have the corresponding meanings:

“Acquiring Person” means any Person (other than an Excluded Person) who or which, alone or together with all Affiliates and Associates of that Person, is the Beneficial Owner of 25% or more of the Voting Securities of the Company then outstanding.

“Affiliate” and “Associate” have the respective meanings ascribed to them in Rule 12b-2 under the Exchange Act.

“Agreement” means the Change-in-Control Executive Severance Agreement between the Parties of which this Exhibit A is a part.

“Arbitration Rules” means the Rules for Commercial Arbitration of the American Arbitration Association in effect at the time of an arbitration of a Dispute.

“Base Salary” means the Executive’s annual salary, or base or fixed annual compensation, of record from the Company or a Subsidiary that is his primary employer, excluding any amount received or to be received under incentive compensation Plans, whether or not deferred.

“Beneficial Owner” means beneficial owner as defined in Rule 13d-3 under the Exchange Act. (“Beneficially Owns” has the correlative meaning.) Any calculation of the number of Voting Securities outstanding at any particular time, including for purposes of determining the particular percentage of such outstanding Voting Securities of which any Person is the Beneficial Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) under the Exchange Act.

“Benefit Continuation Period” means 30 consecutive months after a Severance Payment Event.

“Board” means the Board of Directors of the Company.

“Business Day” means any Monday through Friday, excluding any such day on which banks are authorized to be closed in Texas.

“Cause” means:

(i) the Executive’s willful failure to substantially perform his employment duties to the Company, as such duties may exist from time to time, or comply with the written policies of the Company (other than any such failure resulting from Disability or the Executive’s

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	termination for Good Reason) which continues for a reasonable time after a Notice to the Executive from the Board that (A) identifies the manner in which the Board believes that the Executive has not substantially performed the Executive’s duties or complied with written policies and (B) demands substantial performance or compliance within a specified reasonable time; or
(ii)	the Executive’s willful engaging in conduct (including any illegal conduct) that is demonstrably and materially injurious to the Company or any Subsidiary, monetarily or otherwise.

For purposes of this definition, no act, or failure to act, by the Executive shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s act, or failure to act, was in the best interest of the Company and its Subsidiaries. For the purpose of clause (i) of this definition, a “reasonable time” shall be a time period determined by the Board, acting in good faith, to be sufficient under normal circumstances to correct the deficient performance or compliance described in the Notice to the Executive.

     “Change in Control” means the occurrence of any one or more of the following:

(i)	Any Person becomes an Acquiring Person, except as the result of (A) any acquisition of Voting Securities of the Company by the Company or (B) any acquisition of Voting Securities of the Company directly from the Company (as authorized by the Board).
(ii)	Individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Board; and for this purpose, any individual who becomes a member of the Board after the date of this Agreement whose election, or nomination for election by holders of the Company’s Voting Securities, was approved by the vote of at least a majority of the individuals then constituting the Incumbent Board shall be considered a member of the Incumbent Board (except that any such individual whose initial election as director occurs as the result of an actual or threatened election contest, within the meaning of Rule 14a-11 under the Exchange Act, or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not be so considered).
(iii)	The consummation of a reorganization, merger, share exchange, consolidation, or sale or disposition of all or substantially all of the assets of the Company unless, in any case, the Persons who or which Beneficially Own the Voting Securities of the Company immediately before that transaction Beneficially Own, directly or indirectly, immediately after the transaction, at least 75% of the Voting Securities of the Company or any other corporation or other entity resulting from or surviving the transaction (including a corporation or other entity which, as the result of the transaction, owns all or substantially all of Voting Securities of the Company or all or substantially all of the Company’s assets, either directly or indirectly through one or more subsidiaries) in substantially the same proportion as their respective ownership of the Voting Securities of the Company immediately before that transaction.

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(iv) The Company’s shareholders approve a complete liquidation or dissolution of the Company.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Company” means Ace Cash Express, Inc., a Texas corporation.

“Disability” means the Executive’s inability, because of any physical or mental illness or impairment, to substantially perform all of his employment duties to the Company, on a full-time basis, for a period of at least 90 consecutive days, as reasonably determined by the Board, based on advice from one or more competent medical doctors selected by the Company or any of its insurers and acceptable to the Executive or his legal representative.

“Dispute” means any dispute, disagreement, claim, or controversy arising in connection with or relating to the Agreement or the validity, interpretation, performance, breach, or termination of the Agreement.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

“Excluded Person” means:

(i)	the Executive or any group (within the meaning of Section 13(d)(3) of the Exchange Act) of which the Executive is a member;
(ii)	any Person that controls (as defined in Rule 12b-2 under the Exchange Act) the Company as of the date of the Agreement or any group of which any such Person is a member;
(iii)	any employee-benefit plan, or related trust, sponsored or maintained by the Company or any of its Subsidiaries, or any trustee or other fiduciary thereof; or
(iv)	any corporation or other entity owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of the Voting Securities of the Company.

“Executive” means William S. McCalmont.

“Good Reason” means:

(i) the assignment to the Executive of any duties inconsistent in any material respect with the Executive’s position (which, in this definition, includes status, office, title, and reporting requirements), duties, or responsibilities as an officer of the Company or any Subsidiary, or any other material diminution in the Executive’s position, authority, duties, or responsibilities from those in effect as of three months before a Change in Control, other than (in any case) an isolated and inadvertent action not taken in bad faith that is remedied by the Company promptly after Notice thereof to the Company by the Executive;

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(ii)	the Company’s requiring the Executive to be based at any office or location farther than 50 miles from the Executive’s office or principal job location immediately before a Change in Control, except for required business travel to an extent substantially consistent with the Executive’s travel obligations immediately before the Change in Control;
(iii)	any failure to comply with and satisfy Section 13, if the Company’s successor has received at least ten days’ prior written notice from the Company or the Executive of the requirements of Section 13;
(iv)	a material reduction in the Executive’s Base Salary from the highest amount in effect at any time within three months before a Change in Control;
(v)	the failure by the Company or any Subsidiary to continue in effect any compensation Plan in which the Executive participates immediately before the Change in Control that is material to the Executive’s total compensation, unless an equitable arrangement (embodied in an ongoing substitute or alternative Plan or arrangement) has been made with respect to that Plan, or the failure by the Company or any Subsidiary to continue the Executive’s participation in any such compensation Plan (or in such substitute or alternative Plan or arrangement) on a basis not materially less favorable to the Executive, both in terms of the amount of benefits provided and the level of the Executive’s participation relative to other participants, than existed at any time within three months before the Change in Control; or
(vi)	the failure by the Company or any Subsidiary to continue to provide the Executive with benefits similar in all material respects to those enjoyed by the Executive under any Plan in which the Executive was participating at any time within three months before the Change in Control, the taking of action by the Company or any Subsidiary which would directly or indirectly materially reduce any of such benefits or deprive the Executive of any material fringe benefit enjoyed by the Executive at any time three months before the Change in Control, or the failure by the Company or any Subsidiary to provide the Executive with the number of paid vacation days to which the Executive is entitled on the basis of years of service with the Company and its Subsidiary in accordance with the Company’s or a Subsidiary’s normal vacation policy in effect at any time within three months before the Change in Control.

“Incumbent Board” means the members of the Board on the effective date of the Agreement (subject, however, to clause (ii) of the definition of “Change in Control”).

“Notice” means a written communication complying with Section 18. (“Notify” has the correlative meaning.)

“Parties” means, collectively, the Company and the Executive. (“Party” means either the Company or the Executive.)

“Person” means any individual, firm, corporation, partnership, limited liability company, trust, or other entity, including any successor (by merger or otherwise) of such entity.

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“Plan” means any bonus, incentive compensation, savings, retirement, stock option, stock appreciation, stock ownership or purchase, pension, deferred compensation, or Welfare Benefits plan, policy, practice, program, or arrangement of (including any separate contract or agreement with) the Company or any Subsidiary for its employees.

“Restricted Territory” means, collectively, Dallas County, Texas; each county (or equivalent subdivision) of any state, district, or territory of the United States of America as to which the Executive had supervisory responsibility for the Company during his employment with the Company; and each county (or equivalent territory) adjacent to any of the preceding counties (or equivalent territories).

“Severance Payment” means an amount equal to two and one-half times the sum of:

(i)	the Executive’s highest Base Salary in effect at any time within three months before the Change in Control;
(ii)	the highest amount of the annual automobile allowance payable to the Executive within three months before the Change in Control; and
(iii)	an amount equal to the average of the annual bonuses or incentive cash compensation paid or payable to the Executive by the Company and any Subsidiary for the three fiscal years of the Company preceding the fiscal year in which the Change in Control occurs, but in any event no less than the Executive’s targeted bonus or amount of incentive cash compensation for the fiscal year in which the Change in Control occurs (or if not yet determined for that fiscal year before the Change in Control occurs, the Executive’s targeted bonus or amount of incentive compensation for the preceding fiscal year).

For clause (iii) of this definition: (a) if the Executive has not been employed by the Company and a participant in a bonus or incentive cash compensation Plan during the three completed fiscal years of the Company before the Change in Control, the average of the annual bonuses or incentive cash compensation shall be calculated over the completed fiscal years of the Company during which the Executive was so employed and a participant in a bonus or incentive cash compensation Plan; (b) the calculation of the average of the annual bonuses or incentive cash compensation of the Executive shall include a fiscal year during which the Executive was employed by the Company and a participant in a bonus or incentive cash compensation Plan even if the Executive did not earn any bonus or incentive cash compensation for that fiscal year; (c) the bonus or incentive cash compensation paid or payable to the Executive for only part of a fiscal year of the Company shall be annualized (on the same basis as the one on which the bonus or compensation was prorated) for that fiscal year to calculate the average; and (d) the “targeted” bonus or incentive cash compensation for the fiscal year of the Company in which the Change in Control occurs shall be the amount identified as a “target” by the Board (or its compensation committee that administers the bonus or incentive cash compensation Plan) for the Executive, or if no amount is identified as a “target,” the “targeted” amount shall be the amount of the bonus or incentive cash compensation that the Executive could earn for that fiscal year if the business plan for the Company or the Executive, or both, is satisfied (but not exceeded).

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“Severance Payment Event” means the occurrence of a Change in Control coincident with or followed, at any time before the end of the 24th month immediately following the month in which the Change in Control occurred, by the termination of the Executive’s employment with the Company for any reason other than (a) by the Executive without Good Reason, (b) by the Company because of Disability or for Cause, or (c) by the death of the Executive. Any transfer of the Executive’s employment from the Company to a Subsidiary, from a Subsidiary to the Company, or from one Subsidiary to another Subsidiary is not a termination of the Executive’s employment by the Company for purposes of the Agreement (though any such transfer might, depending on the circumstances, constitute or result in a termination of employment by the Executive for Good Reason).

“Stock Award” means a stock option, stock appreciation right, restricted stock grant, performance share plan, or any other agreement in which the Executive has, or will (by the passage of time only, not based on the Executive’s performance) have, (a) an interest in capital stock of the Company or a right to obtain capital stock or an interest in capital stock of the Company, or (b) an interest or right the economic value of which depends solely on the performance of the capital stock of the Company.

“Subsidiary” means a corporation or other entity, whether incorporated or unincorporated, of which at least a majority of the Voting Securities is owned, directly or indirectly, by the Company.

“Total Severance Benefits” means the Severance Payment and all other payments and benefits received or to be received by the Executive under the Agreement and all payments and benefits (if any) to which the Executive may be entitled under any Plan upon or as the result of a Change in Control or the termination of his employment with the Company, or both.

“Trade Secrets” means any and all information and materials (in any medium) that are proprietary to the Company or are treated as confidential by the Company as part of or relating to all or any portion of the Company’s business, including information and materials about the products and services offered, or the needs of customers served, by the Company; compilations of information, records and specifications, processes, programs, and systems of the Company; research of or for the Company; and methods of doing business of the Company.

“Voting Securities” means securities or other interests having by their terms ordinary voting power to elect members of the board of directors of a corporation or individuals serving similar functions for a noncorporate entity.

“Welfare Benefits” means medical, prescription, dental, disability, employee life, group life, accidental death, and travel accident insurance (whether funded by insurance policy or self-insured by the Company or any Subsidiary) provided or arranged by the Company or any Subsidiary to be provided to its employees.

“Welfare Benefit Plan” means any Plan that provides any Welfare Benefits.

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Interpretive Matters. In the interpretation of the Agreement, except where the context otherwise requires:

(a)	“including” or “include” does not denote or imply any limitation;
(b)	“or” has the inclusive meaning “and/or”;
(c)	the singular includes the plural, and visa a versa, and each gender includes each of the others;
(d)	captions or headings are only for reference and are not to be considered in interpreting the Agreement;
(e)	“Section” refers to a Section of the Agreement, unless otherwise stated in the Agreement;
(f)	“month” refers to a calendar month; and
(g)	a reference to any statute, rule, or regulation includes any amendment thereto or any statute, rule, or regulation enacted or promulgated in replacement thereof.

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