Capital
12900 Preston Rd. Suite 700                                            Southwest
Dallas, TX  75230                                                    Corporation
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CAPITAL SOUTHWEST CORPORATION ELECTS NEW CHAIRMAN OF THE BOARD
FORMER CHAIRMAN BILL THOMAS TO REMAIN ACTIVE AS DIRECTOR

DALLAS - July 21, 2008 - Capital Southwest Corporation (NASDAQ:  CSWC) announced
today that its board of directors has elected current  President and CEO Gary L.
Martin  as  chairman  of  the  company's  board.   Martin,  who  joined  Capital
Southwest's board in July 1988,  replaces former Chairman William R. Thomas, who
has served in a non-executive capacity since his retirement in July 2007. Thomas
will continue to remain very involved in the company's strategic direction as an
active member of the board of directors.

"Capital  Southwest  is an  outstanding  company  with  an  incredibly  talented
management  team,  and I am proud to assume  the role of board  chairman,"  said
Martin. "I am following in the footsteps of a great leader,  and I would like to
sincerely thank and recognize Bill Thomas for the many  contributions he made as
chairman,  as well as his distinguished  service as the company's  president and
CEO. I know that Bill will continue to provide strong guidance and leadership as
a valued member of our board."

Martin joined Capital Southwest in 1972 as chief financial officer, subsequently
serving as vice  president  and  secretary-treasurer.  Prior to joining  Capital
Southwest,  he was president and CEO of The Whitmore  Manufacturing  Company,  a
portfolio company of Capital Southwest.  Martin earned a B.B.A.  degree from the
University of Oklahoma and is a Certified Public Accountant and is a graduate of
Harvard Business School's Advanced Management Program.

Additionally,  the Company  announced that its board of directors named Tracy L.
Morris Chief  Financial  Officer/Treasurer  and William R. Thomas III  Assistant
Vice President.

About Capital Southwest
Capital  Southwest is a Dallas-based  investment  company that provides  patient
equity capital to exceptional  businesses.  As a public company (NASDAQ:  CSWC),
Capital  Southwest has the flexibility to hold investments  indefinitely,  which
has  provided  its managers a stable  ownership  platform  since its founding in
1961.


Contact: Gary L. Martin or Tracy L. Morris
         972-233-8242


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                   PATIENT CAPITAL FOR EXCEPTIONAL BUSINESSES