UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 18, 2005
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Capital Southwest Corporation
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(Exact Name of Registrant as Specified in Charter)
Texas
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(State or Other Jurisdiction of Incorporation)
811-1056 75-1072796
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(Commission File Number) (IRS Employer Identification No.)
12900 Preston Road, Suite 700, Dallas, Texas 75230
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(Address of Principal Executive Offices) (Zip Code)
(972) 233-8242
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement
On July 18, 2005, the board of directors of Capital Southwest Corporation
("CSC") approved and Capital Southwest Management Corporation (the "Company"), a
subsidiary of CSC, entered into a severance pay agreement with each of William
M. Ashbaugh, Patrick F. Hamner, Susan K. Hodgson and Jeffrey G. Peterson,
officers of the Company. The following summary is qualified in its entirety by
the full text of the severance pay agreements, which are attached hereto as
Exhibits 10.1, 10.2, 10.3 and 10.4, and are incorporated herein by reference.
Under these agreements, the Company will provide the covered individuals with
termination benefits if their employment is terminated during the two-year
period immediately following a Change of Control either (a) by the Company for
no reason or for any reason other than as the result of the employee's willful
misconduct or gross negligence in the performance of his or her duties, or for
any act of dishonesty of the employee; or (b) by the employee as the result of,
and within thirty days following, a significant reduction of his or her job
responsibilities or a reduction of his or her base salary as in effect
immediately prior to the Change in Control, or because of a move of his or her
job location by more than 50 miles.
The termination benefits under these agreements are as follows:
o A lump sum payment equal to the employee's annual base salary and
o if the employee has completed at least five years of service with the
Company (whether or not continuous) as of the Change in Control, an
additional amount equal to the employee's monthly base salary multiplied by
the number of whole 12-month periods of service in excess of five years
completed during his total period of service, whether or not continuous,
with the Company as of the Change in Control.
The amount payable under each agreement will not exceed the lesser of two times
the compensation received from the Company during the twelve-month period
immediately preceding the employee's termination of service or twenty-four
multiplied by the employee's monthly base salary.
A "Change in Control" is defined in the agreements as the first to occur of any
of the following:
(a) the effective date of any transaction or series of transactions (other
than a transaction to which only CSC and one or more of its
subsidiaries are parties) pursuant to which CSC becomes a subsidiary
of another corporation or is merged or consolidated with or into
another corporation, or substantially all of the assets of CSC are
sold to or acquired by another person, corporation or group of
associated persons acting in concert;
(b) the effective date of any transaction or series of transactions (other
than a transaction to which only CSC or the Company and one or more
subsidiaries of CSC or the Company are parties) pursuant to which the
Company or its parent company becomes a subsidiary of another
corporation or is merged or consolidated with or into another
corporation, or substantially all of the assets or more than 50% of
the outstanding voting stock of the Company or its parent company are
sold to or acquired by another person, corporation or group of
associated persons acting in concert;
(c) the date upon which any person, corporation or group of associated
persons acting in concert, excluding any persons who have then owned
more than 10% of the voting stock of CSC for a continuous period of at
least ten (10) years, becomes a direct or indirect beneficial owner of
shares of stock of CSC representing an aggregate of more than 25% of
the votes then entitled to be cast at an election of Directors of CSC;
or
(d) the date upon which the persons who were members of the Board of
Directors of CSC as of July 18, 2005 (the "Original Directors") cease
to constitute a majority of the Board of Directors; provided, however
that any new director whose nomination or selection has been approved
by the affirmative vote of at least three of the Original Directors
then in office shall also be deemed an Original Director.
Item 9.01 Financial Statements and Exhibits
Exhibit No. Title
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10.1 Severance Pay Agreement with William M. Ashbaugh, dated July
18, 2005.
10.2 Severance Pay Agreement with Patrick F. Hamner dated July
18, 2005.
10.3 Severance Pay Agreement with Susan K. Hodgson, dated July
18, 2005.
10.4 Severance Pay Agreement with Jeffrey G. Peterson, dated July
18, 2005.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: July 18, 2005
CAPITAL SOUTHWEST CORPORATION
By: /s/ William R. Thomas
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William R. Thomas
President and Chairman of the Board
INDEX TO EXHIBITS
Exhibit No. Title
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10.1 Severance Pay Agreement with William M. Ashbaugh, dated July
18, 2005.
10.2 Severance Pay Agreement with Patrick F. Hamner dated July
18, 2005.
10.3 Severance Pay Agreement with Susan K. Hodgson, dated July
18, 2005.
10.4 Severance Pay Agreement with Jeffrey G. Peterson, dated July
18, 2005.