Document:

exv10w21wb

Exhibit 10.21(b)

SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

     THIS SECOND AMENDMENT (the “Second Amendment”) is entered into by and between William L.
Walton, (“you”) and Allied Capital Corporation, a Maryland corporation (the “Company”), on December
15, 2008. This Second Amendment shall be effective for all purposes as of December 15, 2008 (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 and the First Amendment, together, shall be referred to as
the “2007 Employment Agreement;”

     WHEREAS final regulations implementing Section 409A have been issued since the First
Amendment became effective; and

     WHEREAS, the parties are amending the 2007 Employment Agreement for their mutual benefit to
comply with Section 409A and its implementing regulations and address other related issues;

     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 2007 Employment Agreement as follows:

1. You and the Company hereby delete in its entirety Section 7(c) of the 2007 Employment Agreement
and substitute the following language in its place:

     (c) In the event that the Company terminates your employment without Cause, or you
terminate your employment for Good Reason or your employment terminates due to your death
or Disability, or the Term expires in accordance with this Agreement after the delivery of
a Non-renewal Notice by either party, you (or your personal or legal representatives)
shall receive a termination payment equal to the amount of $37,000 to be paid on the
later of (A) the first business day following the expiration of six months after your
Separation from Service, or (B) ten (10) days after you (or in the event of your death,
your personal or legal representative) deliver to the Company the Release, regardless of
whether the Company has signed the Release. Such amount shall be increased by ten percent
(10%) annually on the anniversary of the effective date of this Second Amendment. Such
payment shall be in lieu of certain post-termination health and welfare benefits.

 

 

2. You and the Company hereby delete in its entirety Section 8 of the 2007 Employment
Agreement and substitute the following language in its place:

8. Tax Equalization Payment. In addition to the amounts payable under Section 7
hereof, if it shall be determined that any event or any payment, vesting, distribution, or
transfer by the Company (or any successor, affiliate or by any other person) to you or for
your benefit under the terms of this Agreement or otherwise (including, without limitation,
the Stock Option Agreement(s), the Split Dollar Life Insurance Agreement or any employee
benefit plan) (collectively, a “Payment”) would be subject to or result in the imposition of
the excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended (the
“Code”) (and any regulations issued thereunder, any successor provision, and any similar
provision of state or local income tax law) (collectively, the “Excise Tax”), then the
Company shall pay to you a lump sum (“Tax Equalization Payment”) in an amount sufficient
that, after payment of the federal, state or local income, employment or other required
taxes (other than taxes that may be imposed by Section 409A of the Code) (“Regular Taxes”),
you shall receive an amount equal to the Excise Tax. Such payment shall be made within 15
days of the date which you remit such Excise Tax. In determining the amount of any Regular
Taxes, the maximum applicable marginal rate of tax for the year in which the Tax
Equalization Payment is payable shall be used. The amount of this Tax Equalization Payment
shall be determined by the Company’s independent accountants.

3. Knowing and Voluntary. Each party has read and fully understands this Second
Amendment and has consulted with counsel of its own choosing before entering into this Second
Amendment. Each party has had a reasonable time to consider this Second Amendment and is entering
into it knowingly and voluntarily without any duress or coercion.

4. Complete Agreement. This Second Amendment constitutes the entire agreement between you
and the Company regarding the amendment of Sections 7(c) and 8 of the 2007 Employment Agreement
and supersedes all prior agreements and understandings between you and the Company regarding
Sections 7(c) and 8 of the 2007 Employment Agreement. In making this Second Amendment, the parties
warrant that they did not rely on any representations or statements other than those contained in
this Second Amendment. This Second 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.

5. Conflict of Terms. In the event of a conflict or inconsistency between the 2007
Employment Agreement and this Second Amendment, this Second Amendment shall control and govern the
rights and obligations of the parties.

6. Construction. In the event an ambiguity or question of intent or interpretation arises,
this Second Amendment shall be construed as if drafted joined 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 Second Amendment.

7. Execution. This Second 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 Second Amendment may be executed by facsimile signatures.

 

 

IN WITNESS WHEREOF, each of the parties has executed this Second 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	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:

	 	December 15, 2008	 	 	 	Date:	 	December 15, 2008exv10w21wc

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

 

 

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.

2

 

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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