Other Information
−Removed: On January 15, 2021, the Company entered into definitive documentation with the United States Department of the Treasury (“Treasury”) with respect to funding support pursuant to Subtitle A of Title IV of Division N of the Consolidated Appropriations Act, 2021 (the “PSP Extension Law”).
−Removed: On January 15, 2021, the Company entered into a payroll support program extension agreement (the "Payroll Support Program Extension"), pursuant to which the Company received payroll support funding (“PSP2 Payroll Support”) under the PSP Extension Law.
−Removed: As consideration for the PSP2 Payroll Support, the Company issued a promissory note (the “PSP2 Note”) in favor of Treasury and entered into a warrant agreement with Treasury (the “PSP2 Warrant Agreement” and, together with the Payroll Support Program Extension and the PSP2 Note, the “PSP2 Payroll Support Documents”), pursuant to which the Company agreed to issue warrants (each, a “PSP2 Warrant”) to purchase common stock of the Company to Treasury in connection with each disbursement of PSP2 Payroll Support.
−Removed: The Company received disbursements of PSP2 Payroll Support on each of January 15, 2021 and March 5, 2021.
−Removed: On April 23, 2021, the Company received additional PSP2 Payroll Support from Treasury in the amount of $259,105,560 (the “Additional PSP2 Support”), for which the Company provided Treasury consideration in the form of an increase of the PSP2 Note in an amount of $77,731,668 and a PSP2 Warrant to purchase up to 167,960 shares of the Company’s common stock under the PSP2 Warrant Agreement.
−Removed: After taking into account the Additional PSP2 Support, the Company has received $1,986,475,960 of PSP2 Payroll Support, for which the Company has provided Treasury with a PSP2 Note in the aggregate amount of $565,942,788 and PSP2 Warrants to purchase up to 1,222,867 shares of the Company’s common stock.
−Removed: A description of the PSP2 Payroll Support Documents can be found in the Company’s Current Report on Form 8-K filed with the U.S.
−Removed: Securities and Exchange Commission on January 15, 2021, and a copy of each PSP2 Payroll Support Document is attached as an exhibit thereto.
−Removed: See Note 2 to the unaudited Condensed Consolidated Financial Statements for further information.
−Removed: On April 23, 2021, the Company entered into definitive documentation with Treasury with respect to funding support pursuant to Section 7301 of the American Rescue Plan Act of 2021 (the “ARP”).
−Removed: Funds received under the ARP must be used to pay qualifying employee salaries, wages and benefits.
−Removed: The Company’s expected aggregate receipts under the program total $1,852,786,128, for which the Company expects to provide Treasury consideration in the form of (i) a promissory note in an amount equal to $525,835,838 and (ii) warrants to purchase up to an aggregate of 898,711 shares of the Company’s common stock, subject to adjustments by Treasury pursuant to the terms of the warrants in each case.
−Removed: Funds are expected to be disbursed to the Company in multiple installments.
−Removed: On April 23, 2021, the Company entered into a Payroll Support Program 3 Agreement (the “PSP3 Agreement”) with Treasury, pursuant to which the Company will receive payroll support funding (“PSP3 Payroll Support”) under the ARP.
−Removed: On April 23, 2021, the Company received $926,393,064, or 50 percent, of the total expected PSP3 Payroll Support (the “Initial PSP3 Payroll Support”) pursuant to the ARP.
−Removed: Pursuant to the PSP3 Agreement and the ARP, in connection with the receipt of PSP3 Payroll Support, the Company is subject to certain restrictions, including prohibitions against involuntary furloughs and reductions in employee pay rates and benefits from the date of the PSP3 Agreement through the later of September 30, 2021 and the date the Company has expended all of the PSP3 Payroll Support;
−Removed: the elimination of share repurchases and dividends through September 30, 2022;
−Removed: and limits on executive compensation until April 1, 2023.
−Removed: As consideration for the PSP3 Payroll Support, on April 23, 2021, the Company issued a promissory note (the “PSP3 Note”) in favor of Treasury and entered into a warrant agreement with Treasury (the “PSP3 Warrant Agreement” and together with the PSP3 Agreement and the PSP3 Note, the “PSP3 Payroll Support Documents”), pursuant to which the Company agreed to issue warrants (each, a “PSP3 Warrant”) to purchase common stock of the Company to Treasury.
−Removed: In connection with the disbursement of the Initial PSP3 Payroll Support on April 23, 2021, the PSP3 Note was issued in an initial amount of $247,917,919, and the Company issued a PSP3 Warrant to purchase up to 423,719 shares of common stock.
−Removed: Upon each subsequent disbursement of PSP3 Payroll Support to the Company under the PSP3 Agreement after April 23, 2021, (i) the principal amount of the PSP3 Note will automatically be increased in an amount equal to 30 percent of any such disbursement and (ii) the Company will issue an additional PSP3 Warrant to Treasury in an amount equal to 10 percent of the principal amount of the increase to the PSP3 Note in connection with such disbursement of PSP3 Payroll Support, divided by the strike price of $58.51 (which was the closing price of the Company’s common stock on March 10, 2021).
−Removed: The PSP3 Note matures in full on April 23, 2031, and is subject to mandatory prepayment requirements in connection with certain change of control triggering events that may occur prior to its maturity.
−Removed: The Company has an option to prepay the PSP3 Note at any time without premium or penalty.
−Removed: Amounts outstanding under the PSP3 Note bear interest at a rate of 1.00 percent before April 23, 2026 and, afterwards, at a rate equal to the Secured Overnight Financing Rate (SOFR) or other benchmark replacement rate consistent with customary market conventions plus a margin of 2.00 percent.
−Removed: The PSP3 Note contains customary representations and warranties and events of default.
−Removed: The PSP3 Warrant Agreement sets out the Company’s obligations to issue PSP3 Warrants in connection with disbursements of PSP3 Payroll Support and to file or designate a resale shelf registration statement for the PSP3 Warrants and the underlying shares of common stock.
−Removed: The Company has also granted Treasury certain demand underwritten offering and piggyback registration rights with respect to the PSP3 Warrants and the underlying common stock.
−Removed: Each PSP3 Warrant is exercisable at a strike price of $58.51 per share of common stock and will expire on the fifth anniversary of the issue date of such PSP3 Warrant.
−Removed: The PSP3 Warrants will be settled through net share settlement or net cash settlement, at the Company’s option.
−Removed: The PSP3 Warrants include adjustments for below market issuances, payment of dividends and other customary anti-dilution provisions.
−Removed: The PSP3 Warrants do not have voting rights.
−Removed: The description of the PSP3 Payroll Support Documents in this Item 5 is qualified in its entirety by reference to the full text of each of the PSP3 Payroll Support Documents, copies of which are filed as exhibits to this Quarterly Report on Form 10-Q.
−Removed: The PSP3 Payroll Support Documents are not intended to be a source of factual, business, or operational information about the Company or its subsidiaries.
−Removed: The representations and warranties and covenants contained in the PSP3 Payroll Support Documents were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements, and may be subject to limitations agreed upon by the parties, including being qualified by disclosures for the purpose of allocating contractual risk between the parties instead of establishing matters as facts;
−Removed: and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors or security holders.
−Removed: Accordingly, investors should not rely on the representations, warranties, and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company.
3.1 Restated Certificate of Formation of the Company, effective May 18, 2012 (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 (File No.
3 unchanged sentences
3729, dated December 13, 2011, between The Boeing Company and the Company.
−Removed: 10.2 Supplemental Letter Agreement No.
−Removed: 6-1162-CAF-0390R2, to Purchase Agreement No.
+Added: 10.2 Supplemental Agreement No.
+Added: 14 to Purchase Agreement No.
3729, dated December 13, 2011, between The Boeing Company and the Company.
−Removed: 10.3 Mortgage and Security Agreement Supplement No.
−Removed: 1, dated March 30, 2021, between Southwest Airlines Co.
−Removed: and JPMorgan Chase Bank, N.A., acting as an administrative agent, pursuant to the Revolving Credit Facility Agreement dated as of August 3, 2016, as amended.
−Removed: 10.4 Payroll Support Program 3 Agreement by and between Southwest Airlines Co.
−Removed: and the United States Department of the Treasury, dated April 23, 2021.
−Removed: 10.5 Warrant Agreement by and between Southwest Airlines Co.
−Removed: and the United States Department of the Treasury, dated April 23, 2021.
−Removed: 10.6 Promissory Note, from Southwest Airlines Co.
−Removed: to the United States Department of the Treasury, dated April 23, 2021.
+Added: 10.3 Supplemental Agreement No.
+Added: 15 to Purchase Agreement No.
+Added: 3729, dated December 13, 2011, between The Boeing Company and the Company.
31.1 Rule 13a-14(a) Certification of Chief Executive Officer.
8 unchanged sentences
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
−Removed: (1) Certain confidential information contained in this agreement has been omitted because it (i) is not material and (ii) would likely cause competitive harm to the Company if publicly disclosed.
+Added: (1) Certain confidential information contained in this agreement has been omitted because it is both not material and is of the type that the registrant treats as private or confidential.
(2) Furnished, not filed.
1 unchanged sentence
SOUTHWEST AIRLINES CO.
−Removed: April 27, 2021 By:
+Added: July 27, 2021 By:
/s/ Tammy Romo
4 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.