(e)

2009 Annual Incentive Cash Bonus Plan

On June 17, 2009, the Compensation Committee (the "Committee") of the Board of Directors (the "Board") of MCG Capital Corporation (the "Company") recommended that the Board approve, and on July 23, 2009, the Board approved, an annual incentive cash bonus plan (the "2009 Annual Incentive Cash Bonus Plan") for the fiscal year ending December 31, 2009. The 2009 Annual Incentive Cash Bonus Plan provides for the potential payment of cash bonuses, upon the attainment of certain strategic goals, to the following named executive officers of the Company (the "Named Executive Officers"): Steven F. Tunney, President and CEO; Stephen J. Bacica, Executive Vice President and CFO; B. Hagen Saville, Executive Vice President, Business Development; Samuel G. Rubenstein, Executive Vice President and General Counsel; and William B. Ford, Senior Vice President and Managing Director. The remaining executive officers of the Company and key, non-executive employees are also participating in the 2009 Annual Incentive Cash Bonus Plan generally on the same terms as the Named Executive Officers.

The 2009 Incentive Cash Bonus Plan will be administered by the Committee. The Committee will make all awards under the 2009 Incentive Cash Bonus Plan on a discretionary basis. The Committee shall have authority to adopt, amend and repeal such administrative rules, guidelines and practices relating to the 2009 Incentive Cash Bonus Plan as it deems advisable. The Committee shall have broad discretion to construe and interpret the terms of the 2009 Incentive Cash Bonus Plan, to make adjustments or amendments to the 2009 Incentive Cash Bonus Plan, to make determinations regarding the weighting or impact of any particular set of criteria or goals that have been satisfied, and to ultimately make determinations as to whether to award such bonus payments under the 2009 Incentive Cash Bonus Plan. The criteria and goals set forth in the 2009 Incentive Cash Bonus Plan are guidelines. The Company has no obligation to make any payments until such time as the Committee makes such determination, in its sole discretion, regardless of whether the criteria and goals discussed below have been satisfied.

The 2009 Annual Incentive Cash Bonus Plan is effective as of January 1, 2009. Each participant in the 2009 Annual Incentive Cash Bonus Plan is assigned a potential target cash bonus amount expressed as a percentage of his or her 2009 annual base salary. For the Named Executive Officers, the approved percentages for 2009 were as follows: President and CEO (50%); Executive Vice President and CFO (50%); Executive Vice President, Business Development (50%); Executive Vice President and General Counsel (50%); and Senior Vice President and Managing Director (40%). The approved percentages among the other participants in the 2009 Annual Incentive Cash Bonus Plan range between 30% and 70% of their 2009 annual base salaries.

The five strategic goals under the 2009 Annual Incentive Cash Bonus Plan are equally weighted and milestones within each specified strategic goal are scaled from 50% to 125%, such that achievement of the 100% level within each of the five strategic goals could result in full payment of the specified target bonus for each individual. Performance below the minimum threshold for a category may result a zero payment for that category and performance above the maximum threshold for a category may result in a score of 125% for such category. In all cases, the Committee has broad discretion to make determinations regarding the payment of any bonus. The following individual and strategic goals have been established for 2009: (1) equity portfolio monetizations; (2) BDC asset coverage ratio; (3) cash earnings from the portfolio; (4) earnings per share; and
(5) successful renegotiation of the Company's credit facilities.

Additionally, certain Named Executive Officers (i.e., Messrs. Tunney, Bacica, Saville and Rubenstein) will have the opportunity to earn the target bonuses specified in their respective employment agreements, or an additional 50% of their base salaries, upon the achievement of specified earnings per share and share price stretch goals. These milestones were designed to meet certain requirements set forth in these employment agreements. The Company does not anticipate any payment under this portion of the program.

2009 Long-Term Incentive Program

In addition, on June 17, 2009, the Committee recommended that the Board approve, and on July 23, 2009, the Board approved, a long-term incentive program (the "2009 Long-Term Incentive Program") for the three year period ending July 22, 2012 (the "Plan Period"). The participants in the 2009 Annual Incentive Cash Bonus Plan are all eligible for awards under the 2009 Long-Term Incentive Program, including the Named Executive Officers, the remaining executive officers and key, non-executive employees.

Each participant in the 2009 Long-Term Incentive Program may receive (i) an award of shares of restricted common stock, to be issued under the Company's Amended and Restated 2006 Employee Restricted Stock Plan, for which forfeiture restrictions lapse upon the achievement of specified Company share price thresholds (each, a "LTIP Restricted Stock Award") and (ii) a bonus payable in cash upon the achievement of specified Company share price thresholds (each, an "LTIP Cash Bonus"). Notwithstanding the foregoing, the Committee has sole discretion to make determinations regarding LTIP Restricted Stock Awards and LTIP Cash Bonuses.

The 2009 Long-Term Incentive Program will be administered by the Committee. The Committee will make all awards under the 2009 Long-Term Incentive Program on a discretionary basis. The Committee shall have authority to adopt, amend and repeal such administrative rules, guidelines and practices relating to the 2009 Long-Term Incentive Program as it deems advisable. The Committee shall have broad discretion to construe and interpret the terms of the 2009 Long-Term Incentive Program, to make adjustments or amendments to the 2009 Long-Term Incentive Program, to make determinations regarding the weighting or impact of any particular set of criteria or goals that have been satisfied, and to ultimately make determinations as to whether to award LTIP Restricted Stock Awards or LTIP Cash Bonuses under the 2009 Long-Term Incentive Program. The criteria and goals set forth in the 2009 Long-Term Incentive Program are guidelines. The Company has no obligation to make any payments until such time as the Committee makes such determination, in its sole discretion, regardless of whether the criteria and goals discussed below have been satisfied.

LTIP Restricted Stock Awards

The forfeiture restrictions applicable to the shares of restricted common stock
subject to each LTIP Restricted Stock Award shall lapse according to the
following schedule:



                    Percentage of Shares of Restricted Common Stock for which
    Share Price                   Forfeiture Restrictions Lapse
    $        3.00                                                          25 %
    $        4.00                                                          50 %
    $        5.00                                                          75 %
    $        6.00                                                          90 %
    $        7.00                                                         100 %

LTIP Cash Bonuses

In the event that the Company's share price reaches predetermined price thresholds, participants may be eligible to receive their respective pro-rata portion of the aggregate dollar amount reserved by the Company for LTIP Cash Bonuses. LTIP Cash Bonuses are not earned until such time as the Company's share price reaches $5.00, and the maximum payout is not earned until such time as the Company's share price reaches $8.00. The table below sets forth the aggregate LTIP Cash Bonus dollar amounts available for distribution to participants at various share price thresholds:

                                    Aggregate Dollar Amount for
                   Share Price       Each Share Price Achieved
                   $        3.00   $                           0
                   $        4.00   $                           0
                   $        5.00   $                   1,000,000
                   $        6.00   $                     996,000
                   $        7.00   $                   1,006,000
                   $        8.00   $                   2,209,000


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Effective Date and Payments

The 2009 Long-Term Incentive Program is effective as of July 23, 2009. Share price thresholds must be achieved within the Plan Period and each share price threshold must be maintained for twenty consecutive trading days. Two thirds of the shares of common stock subject to each LTIP Restricted Stock Award will become free from forfeiture, and two thirds of the amount of each LTIP Cash Bonus earned will be awarded, upon achievement of the applicable milestone, with the forfeiture restrictions applicable to the remaining one third of the shares of common stock subject to each LTIP Restricted Stock Award lapsing and the remaining one third of the amount of each LTIP Cash Bonus earned to be awarded, one year after the achievement of the applicable milestone, in each case subject to the participant's continued employment with the Company.

Awards Under 2009 Long-Term Incentive Program

On June 17, 2009, the Committee recommended and, on July 23, 2009, the Board approved, LTIP Restricted Stock Awards under the 2009 Long-Term Incentive Program to the Company's Named Executive Officers. The table below illustrates the potential cumulative number of shares of common stock for which forfeiture restrictions could lapse with respect to LTIP Restricted Stock Awards to the Company's Named Executive Officers upon the achievement of various share price guidelines:

                                                                                        Share Price Achieved
                                 $3.00                    $4.00                    $5.00                    $6.00                    $7.00                    $8.00
                           Cumulative Shares        Cumulative Shares        Cumulative Shares        Cumulative Shares        Cumulative Shares        Cumulative Shares
                               for which                for which                for which                for which                for which                for which
                               Forfeiture               Forfeiture               Forfeiture               Forfeiture               Forfeiture               Forfeiture
                           Restrictions could       Restrictions could       Restrictions could       Restrictions could       Restrictions could       Restrictions could
Name                             Lapse                    Lapse                    Lapse                    Lapse                    Lapse                    Lapse
Steven F. Tunney                       50,000                  100,000                  150,000                  180,000                  200,000                  200,000
Stephen J. Bacica                      18,750                   37,500                   56,250                   67,500                   75,000                   75,000
B. Hagen Saville                       43,750                   87,500                  131,250                  157,500                  175,000                  175,000
Samuel G. Rubenstein                   16,250                   32,500                   48,750                   58,500                   65,000                   65,000
William B. Ford                        10,000                   20,000                   30,000                   36,000                   40,000                   40,000

The table below illustrates the potential cumulative LTIP Cash Bonuses payable to the Company's Named Executive Officers upon the achievement of various share price guidelines:

                                                                 Share Price Achieved
                                $3.00           $4.00           $5.00           $6.00           $7.00           $8.00
                              Cumulative      Cumulative      Cumulative      Cumulative      Cumulative      Cumulative
Name                         Bonus Earned    Bonus Earned    Bonus Earned    Bonus Earned    Bonus Earned    Bonus Earned
Steven F. Tunney                       -               -          231,000         462,000         694,000       1,204,000
Stephen J. Bacica                      -               -           87,000         173,000         260,000         452,000
. . .

(d) Exhibits.

   Exhibit No.   Description
   10.1          MCG Capital Corporation 2009 Annual Incentive Cash Bonus Plan.

   10.2          MCG Capital Corporation 2009 Long-Term Incentive Program.