THIRD AMENDMENT TO EMPLOYMENT
AGREEMENT
THIS THIRD
AMENDMENT (the “Third Amendment”) is entered into by
and between William L. Walton (“you”) and Allied
Capital Corporation, a Maryland corporation (the
“Company”), on February 26, 2009. This Third
Amendment shall be effective for all purposes as of March 3,
2009 (the “Effective Date”).
WHEREAS, you and
the Company entered into an employment agreement effective as of
January 1, 2004 (“Employment
Agreement”);
WHEREAS, the
Employment Agreement was amended effective March 29, 2007 (the
“First Amendment”) to comply with Section 409A of
the Internal Revenue Code of 1986 and address other related tax
issues;
WHEREAS, the
Employment Agreement was amended a second time effective
December 15, 2008 (the “Second Amendment”)
primarily to address issues relating to Section 409A and other
related issues;
WHEREAS, the
Employment Agreement, the First Amendment and the Second Amendment
shall be referred to collectively as the “2008 Employment
Agreement;”
WHEREAS, the
parties are now amending the 2008 Employment Agreement at your
request to change your position under that agreement from the Chief
Executive Officer to Chairman of the Board of Directors;
NOW THEREFORE, for
good and valuable consideration the receipt and sufficiency of
which are hereby acknowledged, you and the Company, intending
legally and equitably to be bound, hereby amend the 2008 Employment
Agreement as follows:
1. You and the
Company hereby delete in its entirety Section 1(a) of the 2008
Employment Agreement and substitute the following language in its
place:
(a)
Position . The Company agrees to employ you as Chairman of
the Board of Directors of the Company throughout the Term (as
defined below). You shall report directly to the Board of Directors
of the Company (the “Board”).
2. You and the
Company hereby delete in its entirety Section 3(a) of the 2008
Employment Agreement and substitute the following language in its
place:
(a) Base
Compensation . You will be entitled to receive base
compensation (“Base Compensation”) during the Term. As
of March 3, 2009, your Base Compensation shall be at the
annual rate of One Million One Hundred Thousand Dollars
($1,100,000). During the Term, on or about February 1st of any year
after 2009, the Compensation Committee of the Board (the
“Com
