Exhibit 4.2



 Exhibit 4.2 
 AMERICAN CAPITAL, LTD. 
 2008 STOCK OPTION PLAN 
 1. Definitions 
 In this Plan, except where the
context otherwise indicates, the following definitions apply: 
 1.1 “Affiliate” means a parent or subsidiary corporation of the
Company, as defined in Sections 424(e) and (f) of the Code (but substituting “the Company” for “employer corporation”), including any parent or subsidiary of the Company which becomes such after adoption of the Plan.

 1.2 “Agreement” means a written agreement granting an Option that is in such form as the Committee in its discretion shall
determine and is executed by the Company and the Optionee. 
 1.3 “Board” means the Board of Directors of the Company. 

1.4. “Cause” has the meaning set forth in Section 7.5. 
 1.5. “Code” means the Internal Revenue Code of 1986, as amended. 
 1.6. “Committee”
means the committee(s) of the Board appointed by the Board to administer the Plan. Unless otherwise determined by the Board, (a) the Executive Committee of the Board shall be the Committee with respect to participation by and Option grants to
Eligible Individuals who are Non-Employee Directors, and (b) the Compensation and Corporate Governance Committee of the Board shall be the Committee with respect to participation by and Option grants to all other Eligible Individuals.

 1.7. “Common Stock” means the common stock, par value $.01 per share, of the Company. 
 1.8. “Company” means American Capital, Ltd., a Delaware corporation. 
 1.9. “Date of Exercise” means the date on which the Company receives notice of the exercise of an Option in accordance with the terms of
Article 7. 
 1.10. “Date of Grant” means the date on which an Option is granted under the Plan. 
 1.11. “Director” means a member of the Board of Directors of the Company. 
 1.12. “Director Effective Date” means the date on which the Securities and Exchange Commission grants an order approving the Plan as it applies
to the participation of Non-Employee Directors. 
 1.13. “Director Option Shares” has the meaning set forth in Section 5.1.

 1.14. “Disability” means a permanent and total disability within the meaning of Section 22(e)(3) of the Code, as determined
by the Committee. 
 1.15. “Eligible Individual” means any Employee or any Director, including any Non-Employee Director.








 1.16. “Employee” means any person who the Committee determines to be an employee of the Company
or, if permitted by law, an Affiliate. 
 1.17. “Employee Option Shares” has the meaning set forth in Section 5.1. 

1.18. “Fair Market Value” means, as of any date, the value of the Common Stock determined as follows: (a) if the Common Stock is listed
on any established exchange or traded on The NASDAQ Global Select Market, the Fair Market Value of a share of Common Stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or
market (or the exchange or market with the greatest volume of trading in the Common Stock) on the Date of Grant, as reported in The Wall Street Journal or such other source as the Board deems reliable; or (b) in the absence of such
markets for the Common Stock, the Fair Market Value shall be determined in good faith by the Board, but in no event shall be less than the current net asset value of the Common Stock. 
 1.19. “Incentive Stock Option” means an Option granted under the Plan that qualifies as an incentive stock option under Section 422 of the
Code and that the Company designates as such in the Agreement granting the Option. 
 1.20. “Initial Eligible Director” means any
Non-Employee Director who is an Eligible Individual as of May 19, 2008. 
 1.21. “1940 Act” means the Investment Company Act
of 1940, as amended. 
 1.22. “Non-Employee Director” means any Director who is not also an Employee of the Company. 
 1.23. “Nonqualified Stock Option” means an Option granted under the Plan that is not an Incentive Stock Option. 
 1.24. “Option” means an option to purchase Shares granted under the Plan. 
 1.25. “Option Period” means the period during which an Option may be exercised. 
 1.26. “Option Price” means the price per Share at which an Option may be exercised, provided, however, that, except as the Option Price may be
adjusted to the extent provided in Article 9 hereof (subject to Section 6.4 hereof), the Option Price shall not be less than the Fair Market Value as of the Date of Grant. Notwithstanding the foregoing, in the case of an Incentive Stock
Option granted to a “Ten-Percent Stockholder”, the Option Price shall not be less than one hundred and ten percent (110%) of the Fair Market Value on the Date of Grant. 
 1.27. “Optionee” means an Eligible Individual to whom an Option has been granted. 
 1.28. “Plan” means the American Capital, Ltd. 2008 Stock Option Plan, as such may be amended from time to time. 
 1.29. “Required Majority” means a required majority of the Board, as defined in Section 57(o) of the 1940 Act. 
 1.30. “Share” means a share of Common Stock. 
  

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 1.31. “Ten-Percent Stockholder” means an Optionee who (applying the rules of
Section 424(d) of the Code) owns stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company or an Affiliate. 
 2. Purpose 
 The Plan is intended to assist the Company and its Affiliates in attracting and
retaining Eligible Individuals of outstanding ability and to promote the identification of their interests with those of the stockholders of the Company. 
 3. Administration 
 The Committee shall administer the Plan and shall have plenary authority, in its discretion, to
award Options to Eligible Individuals, subject to the provisions of the Plan and the ratification of such award by a Required Majority. The Committee shall have plenary authority and discretion, subject to the provisions of the Plan and the
ratification by a Required Majority, to determine the terms (which terms need not be identical) of all Options including, but not limited to, which Eligible Individuals shall be granted Options, the time or times at which Options are granted, the
Option Price, the number of Shares subject to an Option, whether an Option shall be an Incentive Stock Option or a Nonqualified Stock Option, any provisions relating to vesting, any circumstances in which Options terminate or Shares may be
repurchased by the Company, the period during which Options may be exercised and any other restrictions on Options. In making these determinations, the Committee may take into account the nature of the services rendered by the Optionees, their
present and potential contributions to the success of the Company and its Affiliates, and such other factors as the Committee in its discretion shall deem relevant. Subject to the provisions of the Plan, the Committee shall have plenary authority to
construe and interpret the Plan and the Agreements, to prescribe, amend and rescind rules and regulations relating to the Plan and to make all other determinations deemed necessary or advisable for the administration of the Plan or the Agreements,
including, but not limited to, any determination to accelerate the vesting of outstanding Options. The determinations of the Committee on the matters referred to in this Article 3 shall be binding and final, except to the extent that
ratification by a Required Majority shall be required hereunder or under the 1940 Act. The Committee may delegate its authority under this Article 3 and the terms of the Plan to the extent it deems desirable and is consistent with the
requirements of applicable law. 
 4. Eligibility 
 Options may be granted only to Eligible Individuals and only Employees shall be eligible to receive Incentive Stock Options. 
  

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 5. Stock Subject to the Plan 
 5.1. Subject to adjustment as provided in Article 9, the maximum number of Shares that may be issued under the Plan pursuant to Option grants to Eligible Individuals other than Non-Employee Directors is
15,000,000 Shares (the “Employee Option Shares”), and the maximum number of Shares that may be issued under the Plan pursuant to Option grants to Eligible Individuals who are Non-Employee Directors is 750,000 Shares (the “Director
Option Shares”). 
 5.2. If an Option expires or terminates for any reason without having been fully exercised, the unissued Shares
which had been subject to such Option shall become available for the grant of additional Options. 
 6. Options 
 6.1. Options granted under the Plan shall be either Incentive Stock Options or Nonqualified Stock Options, as designated by the Committee. Each Option
granted under the Plan shall be clearly identified either as an Incentive Stock Option or a Nonqualified Stock Option and shall be evidenced by an Agreement that specifies the terms and conditions of the grant. Options granted to Eligible
Individuals shall be subject to the terms and conditions set forth in this Article 6 and such other terms and conditions not inconsistent with this Plan as the Committee may specify. All Incentive Stock Options shall comply with the provisions
of the Code governing incentive stock options and with all other applicable rules and regulations. 
 6.2. The Option Period for Options
granted to Eligible Individuals other than Non-employee Directors shall be determined by the Committee and specifically set forth in the Agreement, provided, however, that an Option shall not be exercisable after ten years (five years in the case of
an Incentive Stock Option granted to an Employee who on the Date of Grant is a Ten-Percent Stockholder) from its Date of Grant. 
 6.3.
Subject to adjustment as provided in Article 9, the maximum number of Shares that may be covered by Options granted to any Eligible Individual who is not a Non-Employee Director during the term of this Plan shall not exceed 1,406,250 Shares, and the
maximum number of Shares that may be covered by Options granted to any other Eligible Individual during the term of this Plan shall not exceed 93,750 Shares. 
 6.4. Notwithstanding anything to the contrary in this Plan, without the approval of the stockholders of the Company, no Option shall be issued in exchange for or as a reissuance of any outstanding Option and the
Option Price for any outstanding Option shall not be changed, if the effect of such exchange or change would be to reduce the Option Price for any outstanding Option, except as necessary to reflect the effect of a stock split, stock dividend or
similar event. 
 6.5. Notwithstanding anything to the contrary in this Plan, all grants of Options to Eligible Individuals who are
Non-Employee Directors under this Plan shall be automatic and nondiscretionary and shall be made strictly in accordance with this Article 6. No person shall have any discretion to select which of such Eligible Individuals shall be granted Options or
to determine the number of Shares to be covered by Options. 
 6.6. Each Initial Eligible Director shall be automatically granted an Option
to purchase 93,750 Shares on and as of the Director Effective Date. Although such Options will be issued as of the Director Effective Date, such Options shall be deemed to vest over a three-year period commencing 

  

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on May 19, 2008, with one-third of the total number of Shares subject to each such Option vesting on each of the first three anniversaries following
May 19, 2008, provided, that if the Director Effective Date does not occur before any such anniversary, the Shares subject to such Options that would have otherwise vested on such anniversary shall instead vest on the Director Effective
Date. The Option Period for such Options shall expire on the later of May 19, 2018 and the three-year anniversary of the Director Effective Date. The Option Price for each Share granted under this Section 6.6 shall be the Fair Market Value
on the Director Effective Date. 
 6.7. Each Non-Employee Director who becomes an Eligible Individual after May 19, 2008, shall be
entitled to receive, to the extent that there are Director Option Shares that have not been issued or are not reserved for future issuance upon the exercise of other Options issued to Non-Employee Directors, an Option to purchase 93,750 Shares. Such
Option shall be issued on the later of the Director Effective Date and the date the person becomes a Non-Employee Director. Although such Options may be issued after the date the person becomes a Non-Employee Director, such Options shall be deemed
to vest over a three-year period commencing on the date such person becomes a Non-Employee Director, with one-third of the total number of Shares subject to each such Option vesting on each of the first three anniversaries following the date such
person becomes a Non-Employee Director, provided, that if the Director Effective Date does not occur before any such anniversary, the Shares subject to such Options that would have otherwise vested on such anniversary shall instead vest on
the Director Effective Date. The Option Period for such Options shall expire on the later of the tenth anniversary of the date such person becomes a Non-Employee Director and the three-year anniversary of the Director Effective Date. The Option
Price for each Share granted under this Section 6.6 shall be the Fair Market Value on the later of the Director Effective Date and the date the person becomes a Non-Employee Director. 
 7. Exercise of Options 
 7.1. An Option may,
subject to the terms of the applicable Agreement under which it is granted, be exercised in whole or in part by the delivery to the Company of written notice of the exercise, in such form as the Committee may prescribe, accompanied by full payment
of the Option Price for the Shares with respect to which the Option is exercised as provided in Section 7.2 hereof. 
 7.2. Payment of
the aggregate Option Price for the Shares with respect to which an Option is being exercised shall be made in cash; provided, however, that the Committee, in its sole discretion, may provide in an Agreement that part or all of such payment may be
made by the Optionee in one or more of the following manners: (a) by delivery (including constructive delivery) to the Company of Shares valued at Fair Market Value on Date of Exercise (provided that such Shares, if acquired pursuant to an
Option granted hereunder or pursuant to any other compensation plan maintained by the Company or any Affiliate, have been held by the participant for at least six months); (b) by delivery on a form prescribed by the Committee of a properly
executed exercise notice and irrevocable instructions to a registered securities broker approved by the Committee to sell Shares and promptly deliver cash to the Company; (c) for Options granted to Eligible Individuals other than Non-Employee
Directors, by delivery of a promissory note as provided in Section 7.3 hereof; or (d) by surrender to the Company of an Option (or a portion thereof) that has become exercisable and the receipt from the Company upon such surrender, without
any payment to the Company (other than required tax withholding amounts), of (x) that number of Shares (equal to the highest whole number of Shares) having an aggregate Fair Market Value as of the date of surrender equal to that number of
Shares subject to the Option (or portion thereof) being 

  

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surrendered multiplied by an amount equal to the excess of (i) the Fair Market Value on the date of surrender over (ii) the Option Price, plus
(y) an amount of cash equal to the Fair Market Value of any fractional Share to which the Optionee would be entitled but for the parenthetical in clause (x) above relating to whole number of Shares. Any such surrender shall be treated as
the exercise of the Option (or portion thereof). 
 7.3. To the extent provided in an Option Agreement and permitted by the 1940 Act and
other applicable law, including Section 402 under the Sarbanes-Oxley Act of 2002, the Committee may accept as payment of the Option Price a promissory note executed by the Optionee evidencing his or her obligation to make future cash payment
thereof. Promissory notes made pursuant to this Section 7.3 shall be payable upon such terms as may be determined by the Committee, shall be secured by a pledge of the Shares received upon exercise of the Option, shall bear interest at a rate
fixed by the Committee and shall otherwise comply with the provisions of Section 57(j)(2) of the 1940 Act. 
 7.4. Optionees are
required to notify the Company in writing within thirty (30) days after the date of any disposition of shares of Common Stock acquired upon exercise of an Incentive Stock Option within two years after the Date of Grant or within one year after
such shares were transferred to the Optionee, which notice shall state the number of shares sold or transferred, the date the shares were sold or transferred, and the sale price. 
 7.5. With respect to any Option granted to an Optionee who is a Non-Employee Director: 
 (a) In the event of death or Disability during the Optionee’s service as a Director, the unexercised portions of each of his or her
Options shall immediately become exercisable and may be exercised (by his or her personal representative in the event of such death) for a period of three years following the date of such death or one year following the date of such Disability, but
in no event after the respective expiration dates of such Options. 
 (b) In the event of the termination of such an
Optionee’s service as a Director for Cause, the unexercised portions of each of his or her Options shall immediately terminate upon such termination of service as a Director and may not be exercised thereafter, unless otherwise determined by
the Committee. The Committee in its sole discretion may determine that an Optionee’s service as a Director was terminated for “Cause,” if it finds that the Optionee willfully violated any of the Company’s policies on ethical
business conduct or engaged in any activity or conduct during his or her service as a director which was inimical to the best interests of the Company. 
 (c) In the event of such an Optionee’s service as a director is terminated for any reason other than by his or her death or Disability or by the Company for Cause, the unexercised portions of each of his or her
Options, to the extent then exercisable, may be exercised within one year immediately following the date of termination, but in no event after the respective expiration dates of such Options. 
 8. Restrictions on Transfer 
 Options shall not
be transferable other than by will or the laws of descent and distribution. An Option may be exercised during the Optionee’s lifetime only by the Optionee or, in the event of his or her legal disability, by his or her legal representative. The
Shares acquired pursuant to the Plan shall be subject to such restrictions and agreements regarding sale, assignment, encumbrances, or 

  

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other transfers or dispositions thereof (a) as are in effect among the stockholders of the Company at the time such Shares are acquired, (b) as the
Committee shall deem appropriate and (c) as are required by applicable law. 
 9. Capital Adjustments 
 In the event of any change in the outstanding Common Stock by reason of any stock dividend, split-up (or reverse stock split), recapitalization,
reclassification, reorganization, reincorporation, combination or exchange of shares, merger, consolidation, liquidation or similar change in corporate structure, the Committee may, in its discretion and to the extent necessary to compensate for the
effect thereof, provide for a substitution for or adjustment in (a) the number and class of Shares subject to outstanding Options, (b) the Option Price of outstanding Options, (c) the aggregate number and class of Shares that may be
issued under the Plan, and (d) for the maximum number of Shares with respect to which an Employee may be granted Options during the period specified in Section 6.3. 
 10. Termination or Amendment 
 The Board may amend, alter, suspend or terminate the Plan in any
respect at any time; provided, however, that after the Plan has been approved by the stockholders of the Company, no amendment, alteration, suspension or termination of the Plan shall be made by the Board without approval of (a) the
Company’s stockholders to the extent stockholder approval is required by applicable law or regulations or the requirements of the principal exchange or interdealer quotation system on which the Common Stock is listed, if any, and (b) each
affected Optionee if such amendment, alteration, suspension or termination would adversely affect his or her rights or obligations under any Option granted prior to the date of such amendment, alteration, suspension or termination. No Option may be
granted under the Plan during any suspension or after termination of the Plan. 
 11. Modification, Extension and Renewal of Options; Substituted
Options 
 11.1. Subject to the terms and conditions of the Plan and the ratification of any such action by a Required Majority, the
Committee may modify, extend or renew the terms of any outstanding Options (other than Options issued to a Non-employee Director), or accept the surrender of outstanding Options granted under the Plan or options under any other plan of the Company
(to the extent not theretofore exercised) and authorize the granting of new Options in substitution therefor (to the extent not theretofore exercised). Subject to Section 6.4, any such substituted Options may specify a longer term than the
surrendered options, or have any other provisions that are authorized by the Plan. Notwithstanding the foregoing, however, no modification of an Option shall, without the consent of the Optionee, alter or impair any of the Optionee’s rights or
obligations under such Option. 
 11.2. Anything contained herein to the contrary notwithstanding, Options may, at the discretion of the
Committee and with the ratification of a Required Majority, be granted under the Plan in substitution for stock appreciation rights and options to purchase shares of capital stock of another corporation that is merged into, consolidated with, or all
or a substantial portion of the property or stock of which is acquired by, the Company or one of its Affiliates and the holders of such options or stock appreciation rights as a result of such transaction become Eligible Individuals (other than
Non-employee Directors). The terms and conditions of the substitute Options so granted 

  

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may vary from the terms and conditions set forth in this Plan to such extent as the Committee (with the ratification of a Required Majority) may deem
appropriate in order to conform, in whole or part, to the provisions of the options and stock appreciation rights in substitution for which they are granted. 
 12. Effectiveness of the Plan 
 The Plan and any amendment thereto shall be effective on the date on which it is adopted
by the Board, provided that any such adoption requiring stockholder approval is subject to approval by vote of the stockholders of the Company within 12 months after such adoption by the Board. In addition, to the extent that the Plan pertains
to the issuance of Options to Non-Employee Directors and, if required by the 1940 Act, the Plan (or any amendment thereto) with regard to the issuance of Options to Non-Employee Directors shall not become effective until the Securities and Exchange
Commission or other governmental authority shall have granted the necessary exemptions or other consents pursuant thereto, but to the extent legally permissible, any such effectiveness shall be deemed to occur retroactive to the adoption thereof by
the Board. Options may be granted prior to stockholder approval of the Plan or the issuance of necessary governmental exemptions or consent, and the date on which any such Option is granted shall be the Date of Grant for all purposes provided that
(a) each such Option shall be subject to stockholder approval of the Plan and the issuance of such governmental exemptions or consents, (b) no Option may be exercised prior to such stockholder approval or issuance of such governmental
exemptions or consents, and (c) any such Option shall be void ab initio if such stockholder approval is not obtained or such governmental exemptions or consents are not issued. 
 13. Withholding 
 The Company’s obligation
to issue or deliver Shares or pay any amount pursuant to the terms of any Option shall be subject to the satisfaction of applicable federal, state and local tax withholding requirements. To the extent provided in the applicable Agreement and in
accordance with rules prescribed by the Committee, an Optionee may satisfy any such withholding tax obligation by any of the following means or by a combination of such means: (a) tendering a cash payment, (b) authorizing the Company to
withhold Shares otherwise issuable to the Optionee, or (c) delivering to the Company already owned and unencumbered Shares. 
 14. Term of the
Plan 
 Unless sooner terminated by the Board pursuant to Article 10, the Plan shall terminate on March 13, 2018, and no Options
may be granted after such date. The termination of the Plan shall not affect the validity of any Option outstanding on the date of termination. 
 15. Indemnification of Committee 
 In addition to such other rights of indemnification as they may have as Directors or
as members of the Committee, the members of the Committee shall be indemnified by the Company against the reasonable expenses, including attorneys’ fees, actually and reasonably incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan or any Option granted hereunder, and against all amounts
reasonably paid by them in settlement thereof or paid by them in satisfaction of a judgment in any such action, suit or proceeding, if such members acted in good faith and in a manner which they believed to be in, and not opposed to, the best
interests of the Company. 
  

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 16. General Provisions 
 16.1. The establishment of the Plan shall not confer upon any Eligible Individual any legal or equitable right against the Company, any Affiliate or the Committee, except as expressly provided in the Plan. 

16.2. The Plan does not constitute inducement or consideration for the employment or service of any Eligible Individual, nor is it a contract between
the Company or any Affiliate and any Eligible Individual. Participation in the Plan shall not give an Eligible Individual any right to be retained in the service of the Company or any Affiliate. 
 16.3. Neither the adoption of this Plan nor its submission to the stockholders, shall be taken to impose any limitations on the powers of the Company or
its Affiliates to issue, grant, or assume options, warrants, rights, or restricted stock, otherwise than under this Plan, or to adopt other stock option or restricted stock plans or to impose any requirement of stockholder approval upon the same.

 16.4. The interests of any Eligible Individual under the Plan are not subject to the claims of creditors and may not, in any way, be
assigned, alienated or encumbered except as provided in an Agreement. 
 16.5. The Plan shall be governed, construed and administered in
accordance with the laws of the State of Delaware and it is the intention of the Company that Incentive Stock Options granted under the Plan qualify as such under Section 422 of the Code. 
 16.6. The Committee may require each person acquiring Shares pursuant to Options hereunder to represent to and agree with the Company in writing that
such person is acquiring the Shares without a view to distribution thereof. The certificates for such Shares may include any legend which the Committee deems appropriate to reflect any restrictions on transfer. All certificates for Shares issued
pursuant to the Plan shall be subject to such stock transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange or
interdealer quotation system upon which the Common Stock is then listed or quoted, and any applicable federal or state securities laws. The Committee may place a legend or legends on any such certificates to make appropriate reference to such
restrictions. The certificates for Shares acquired pursuant to an Option may also include any legend which the Committee deems appropriate to reflect restrictions contained in this Plan or in the applicable Agreement or to comply with the Delaware
General Corporation Law. 
 16.7. The Company shall not be required to issue any certificate or certificates for Shares upon the exercise of
Options, or record any person as a holder of record of such Shares, without obtaining, to the complete satisfaction of the Committee, the approval of all regulatory bodies deemed necessary by the Committee, and without complying to the
Committee’s complete satisfaction, with all rules and regulations, under federal, state or local law deemed applicable by the Committee. 
  

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 16.8. To the extent this Plan provides for issuance of stock certificates to reflect the issuance of
Shares, the issuance may be effected on a noncertificated basis, to the extent not prohibited by applicable law or the rules of any stock exchange or automated dealer quotation system on which the Shares are traded. 
  

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