EXHIBIT 10.11
AMENDMENT NO. 1 TO THE
SOUTHWEST AIRLINES CO. PROFIT SHARING PLAN
Pursuant to the authority of the Board of Directors of Southwest
Airlines Co., and the provisions of Article XVII thereof, the Southwest Airlines
Co. Profit Sharing Plan is hereby amended effective as of November 15, 2001 in
the following respects only:
1. Article II, Subsection 2.1(c), is hereby amended to read as
follows:
"(c) Annual Compensation: The total amounts paid by the Company or any
Eligible Affiliate to an Employee as remuneration for personal services rendered
during each Plan Year, including expense allowances (to the extent includible in
the gross income of the Employee) and any amounts not includible in the gross
income of the Employee pursuant to Sections 125 or 402(g)(1) of the Code, but
excluding director's fees, expense reimbursements and nontaxable expense
allowances, prizes and awards, items of imputed income, contributions made by
the Company under this Plan or any other employee benefit plan or program it
maintains, such as group insurance, hospitalization or like benefits, amounts
realized or recognized from qualified or nonqualified stock options or when
restricted stock or property held by the Employee either becomes freely
transferable or is no longer subject to a substantial risk of forfeiture, and
amounts, if any, paid to an Employee in lieu of a Company Contribution to this
Plan in the event that such Company Contribution would constitute an annual
addition, as defined in Section 415(c)(2) of the Code, in excess of the
limitations under Section 415(c) of the Code. Annual Compensation shall include
amounts otherwise includible, as provided above, which are paid by the Company
or an Eligible Affiliate to the Employee through another person, pursuant to the
common paymaster provisions of Sections 3121(s) and 3306(p) of the Code.
Notwithstanding the foregoing, for purposes of determining Annual Compensation
for the 2001 Plan Year, Annual Compensation shall include the value of the
number of hours (or, in the case of flight attendants and pilots, the value of
the number of trips) donated by an Employee to the Company pursuant to the
"Pledge to LUV" program, provided that inclusion of such additional amounts will
not cause the Plan to fail to meet the requirements of Section 401(a)(4) of the
Code.
"The Annual Compensation of each Member or former Member taken into
account under the Plan for any Plan Year shall not exceed $150,000, as adjusted
by the Secretary of the Treasury for increases in the cost of living at the time
and in the manner set forth in Section 401(a)(17)(B) of the Code. Furthermore,
for purposes of an allocation under the Plan based on Annual Compensation,
Annual Compensation shall only include amounts attributable to the period an
Employee is a Member of the Plan."
2. Article IV, Section 4.1, the second paragraph, is hereby amended to
read as follows:
"For purposes of the foregoing, ANP is the operating profit of the
Company for such Plan Year. As used herein, the term 'operating profit' of the
Company for any Plan Year shall mean its income for such Plan Year before income
taxes, derived in accordance with generally accepted accounting principles, and
as set forth in the
Company's audited statement of income included in the annual report to
shareholders, before provision for any contribution to this Plan, excluding (1)
nonoperating or non-recurring gains or losses not arising from the Company's
usual business operations, including gains or losses from the sale or exchange
of capital assets, as set forth in the Company's audited statement of income or
disclosed in the notes thereto, and (2) profits or losses incurred by TranStar
or any separately definable division of the Company; provided, however that
notwithstanding the foregoing, profits and losses incurred by Morris Air
Corporation shall be taken into account for Plan Years beginning after December
31, 1993. Notwithstanding the foregoing, 'operating profit' shall be adjusted to
take into account any special pre-tax gains resulting from cash grants under the
Air Transportation Safety and System Stabilization Act of 2001, net of special
charges arising from the events of September 11, 2001, including, but not
limited to, charges resulting from refunds, write-downs of various assets due to
impairment, and the deferral of aircraft firm orders and options."
IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the
foregoing instrument comprising Amendment No. 1 to the Southwest Airlines Co.
Profit Sharing Plan, the Company has caused these presents to be duly executed
in its name and behalf by its proper officers thereunto duly authorized the 15th
day of November, 2001.
SOUTHWEST AIRLINES CO.
ATTEST:
/s/ DEBORAH ACKERMAN By: /s/ JAMES F. PARKER
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Deborah Ackerman James F. Parker
Assistant Secretary Chief Executive Officer
STATE OF TEXAS )
)
COUNTY OF DALLAS )
BEFORE ME, the undersigned, a Notary Public in and for said County and
State, on this 28th day of December, 2001, personally appeared James. F. Parker,
to me known to be the individual person who subscribed the name of SOUTHWEST
AIRLINES CO., as its Chief Executive Officer, to the foregoing instrument and
acknowledged to me that he executed the same as his free and voluntary act and
deed and the free and voluntary act and deed of such corporation, for the uses
and purposes therein set forth.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, the day and year last above
written.
/s/ MICHELLE LUSK
-----------------------------------
Notary Public in and for the State
of Texas
My Commission Expires:
7/5/02
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