Exhibit 10.21(c)
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 “Compensation Committee”) will
review and may increase (but not decrease) your Base Compensation. Such review
shall be in accordance with criteria to be determined in the sole discretion of
the Compensation

 

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Committee after consideration of the compensation levels of executives at other
similarly situated New York Stock Exchange-listed companies and appropriate
consultation with you. Your Base Compensation shall be paid in equal biweekly
installments, less deductions required by law.
3. You and the Company hereby delete in its entirety Section 5(b)(iii) of the
2008 Employment Agreement and substitute the following language in its place:
(iii) you cease to be the Chairman of the Board of Directors.
4. Change in Position. As of the Effective Date set forth above, you shall cease
to be the Company’s Chief Executive Officer.
5. Waiver and Release. The Employment Agreement, the First Amendment, the Second
Amendment and the Third Amendment shall be referred to collectively as the “2009
Employment Agreement.” You hereby forever waive and release any claim that the
changes made in this Third Amendment constitute “Good Reason” under Section 5(b)
of the 2008 Employment Agreement. You further hereby forever waive and release
any claim that the changes made in this Third Amendment constitute “Good Reason”
under Section 5(b) of the 2009 Employment Agreement.
6. Knowing and Voluntary. Each party has read and fully understands this Third
Amendment and has consulted with counsel of its own choosing before entering
into this Third Amendment. Each party has had a reasonable time to consider this
Third Amendment and is entering into it knowingly and voluntarily without any
duress or coercion.
7. Complete Agreement. This Third Amendment constitutes the entire agreement
between you and the Company regarding the amendment of Sections 1(a), 3(a), and
5(b)(iii) of the 2008 Employment Agreement and supersedes all prior agreements
and understandings between you and the Company regarding Sections 1(a), 3(a),
and 5(b)(iii) of the 2008 Employment Agreement. In making this Third Amendment,
the parties warrant that they did not rely on any representations or statements
other than those contained in this Third Amendment. This Third Amendment may not
be amended except by an instrument in writing signed by you and by the Chair of
Company’s Compensation Committee on behalf of the Company.
8. Conflict of Terms. In the event of a conflict or inconsistency between the
2008 Employment Agreement and this Third Amendment, this Third Amendment shall
control and govern the rights and obligations of the parties.
9. Construction. In the event an ambiguity or question of intent or
interpretation arises, this Third Amendment shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring either party by virtue of the authorship of any of the
provisions of this Third Amendment.

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10. Execution. This Third Amendment may be executed in two or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument. This Third Amendment may be executed by
facsimile signatures.
IN WITNESS WHEREOF, each of the parties has executed this Third Amendment, in
the case of the Company by its authorized officer, as of the day and year set
forth under their signatures below.

                  ALLIED CAPITAL CORPORATION    
 
           
/s/ William L. Walton
 
  BY:   /s/ Anthony T. Garcia
 
     William L. Walton   Anthony T. Garcia         Compensation Committee Chair
   

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