SEC FORM 4

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

SHULMAN JOHN D

(Last)

(First)

(Middle)

1919 PENNSYLVANIA AVENUE, NW

3RD FLOOR

(Street)

WASHINGTON

20006

(City)

(State)

(Zip)

2. Issuer Name and Ticker or Trading Symbol
ALLIED CAPITAL CORP [ ALD ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

	Director	10% Owner
X	Officer (give title below)	Other (specify below)
	Managing Director

3. Date of Earliest Transaction (Month/Day/Year)
07/18/2007

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock	07/18/2007		A		101,660	A	$31.75	106,459	D

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	8. Price of Derivative Security (Instr. 5)		10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
Non-Qualified Stock Option (right to buy)	$21.52	07/18/2007		D			284,974	⁽¹⁾	12/13/2012	Common Stock	284,974	⁽²⁾	0	D
Non-Qualified Stock Option (right to buy)	$21.59	07/18/2007		D			22,053	⁽³⁾	09/20/2011	Common Stock	22,053	⁽²⁾	0	D
Non-Qualified Stock Option (right to buy)	$21.875	07/18/2007		D			286,287	⁽⁴⁾	04/05/2011	Common Stock	286,287	⁽²⁾	0	D
Non-Qualified Stock Option (right to buy)	$27.51	07/18/2007		D			50,000	⁽⁵⁾	08/03/2015	Common Stock	50,000	⁽²⁾	96,365	D
Non-Qualified Stock Option (right to buy)	$28.98	07/18/2007		D			100,000	⁽⁶⁾	03/11/2014	Common Stock	100,000	⁽²⁾	293,100	D

Explanation of Responses:

1. The canceled options, granted on December 13, 2002, provided for vesting in three equal installments commencing on June 30, 2003.

2. On July 18, 2007, the issuer canceled, pursuant to the issuer's tender offer, options previously granted to the reporting person. In exchange for the options, the reporting person received an option cancellation payment ("OCP") which was paid one-half in cash and one-half in unregistered shares of the issuer's common stock. The value of the OCP was equal to the difference between the weighted average market price of $31.75, less the exercise price of the option, multiplied by the number options canceled.

3. The canceled options, granted on September 20, 2001, provided for vesting in three equal annual installments commencing one year from grant date.

4. The canceled options, granted on April 5, 2001, provided for vesting in three equal annual installments commencing one year from grant date.

5. The canceled options, granted on August 3, 2005, provided for vesting in three equal installments on June 30, 2006, June 30, 2007 and June 30, 2008.

6. The canceled options, granted on March 11, 004, provided for vesting in four equal installments on June 30, 2004, June 30, 2005, June 30, 2006 and June 30, 2007

	s/ John D. Shulman	07/19/2007
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
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