Exhibit 10.2
SEVERANCE CONTRACT
     THIS SEVERANCE CONTRACT (hereinafter referred to as this “Agreement”),
dated as of April 20, 2006, by and between JAMES C. WIMBERLY (hereinafter
referred to as the “Executive”), a resident of Dallas, Texas, and SOUTHWEST
AIRLINES CO. (hereinafter referred to as “Southwest”, which term shall include
its subsidiary companies where the context so admits), a Texas corporation,
W I T N E S S E T H:
     WHEREAS the Executive has served as an employee and an officer of Southwest
since November 18, 1985; and
     WHEREAS the Executive desires to resign his office but to continue his
employment with Southwest, and Southwest is agreeable, subject to the terms and
conditions of this Agreement, to continuing his employment and to paying him
severance compensation in consideration of the Executive’s agreements contained
herein;
     NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and promises contained herein, Southwest and the Executive agree as
follows:
I. RESIGNATION AND CONTINUED EMPLOYMENT
     RESIGNATION AND CONTINUED EMPLOYMENT. The Executive will resign as an
officer of Southwest effective as of January 1, 2006, and he irrevocably waives
any claim that he may have against Southwest, its directors or officers based on
or related to such resignation. Notwithstanding such resignation, the Executive
shall remain an employee of Southwest through February 15, 2008, and during the
period of such employment the Executive shall discharge the consulting
obligations set forth in Paragraph II-B of this Agreement. The Executive may
elect to terminate his employment at any time prior to February 16, 2008, upon
prior notice to Southwest; provided, however, that in such event Southwest shall
be relieved of any obligation to make further payments to the Executive under
Paragraphs III-B and III-C hereof and, if the Executive shall do work prior to
February 16, 2008 for any airline that then competes with Southwest, then
Southwest shall be entitled to recover all past payments that Southwest shall
have made pursuant to Paragraphs III-B and III-C hereof, all as more
particularly provided in Paragraph III-G hereof.
II. EXECUTIVE’S OBLIGATIONS
     A. NON-DEROGATION, ETC. The Executive agrees that he shall not do or say
anything, whether personally or through his attorney, agent or other
representative, to, directly or impliedly, derogate Southwest, its business
operations or prospects, its properties or any of its officers, directors or
employees, whether by way of media interviews, radio or television appearances,
letters to editors or others, articles published in the airline trade press or
in the general press, Internet chat rooms or otherwise. In addition, the
Executive shall provide no assistance or advice to, or discuss any of
Southwest’s business matters or affairs with, any current or prospective
employee of Southwest,

 

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whether for a fee or otherwise, unless specifically requested to do so by the
Chief Executive Officer or the Chairman of the Board of Directors of Southwest.
     B. CONSULTANCY. The Executive agrees that, from time to time during the
term of his employment under this Agreement, the Executive shall make himself
available at the offices of Southwest, when specifically requested to do so by
Southwest, in order to consult with either the Chief Executive Officer of
Southwest, or the Chairman of its Board of Directors, as to aircraft and airport
operations and as to the business, properties or operations of Southwest, in
each case for such reasonable periods of time as either such officer may
request; it being understood that Executive will take vacation from the period
January 1, 2006 through February 15, 2006. At all times during his employment
the Executive shall generally conform to all policies of Southwest as they may
apply to an employee of his level of duties and obligations.
     C. UNION WORK. The Executive agrees that, at all times prior to
February 16, 2008, he shall not personally, or through any representative,
intermediary or agent, directly or indirectly provide any advice, assistance or
counsel to any union or collective bargaining unit in connection with its
representation (or efforts to seek representation) of any group of Employees at
Southwest.
III. EXECUTIVE SEVERANCE COMPENSATION
     A. SEVERANCE COMPENSATION. In consideration of his agreements set forth in
Articles I and II hereof, Southwest shall pay to the Executive the severance
compensation set forth in this Article III. All such severance compensation
shall be subject to such payroll and withholding deductions as may be required
by law.
     B. SEMI-MONTHLY INSTALLMENTS. The Executive shall receive severance
compensation consisting of the following:
Beginning with payroll date January 5, 2006, and continuing through the payroll
date April 20, 2006, the sum of $11,260.04 on each regular semi-monthly payroll
date.
Beginning with the payroll date May 5, 2006, and continuing through the payroll
date December 20, 2006, the sum of $8,760.04 on each regular semi-monthly
payroll date.
On January 5, 2007, the sum of 9,696,69.
Beginning with the payroll date January 20, 2007, and continuing through the
payroll date December 20, 2007, the sum of $7,296.69 on each regular
semi-monthly payroll date.
Beginning with the payroll date January 5, 2008, and continuing through the
payroll date February 20, 2008, the sum of $5,630.02 on each regular
semi-monthly payroll date.
In the event that Southwest shall change its payroll practices while payments
are owing to the Executive pursuant to this Paragraph III-B, then Southwest
shall adjust the timing of its such payments to the Executive so as to insure
that he receives equal installment payments no less frequently than monthly.

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     C. LUMP-SUM PAYMENT. The Executive shall receive a lump-sum severance
payment payable on such dates in January 2006 and 2007 as Southwest shall pay
its officers their annual performance bonuses (or, in the absence of any such
bonus payments in January, on the last business day of January 2006 and 2007),
in an amount determined by the Compensation Committee of the Southwest Board of
Directors. The amount payable in January 2006 shall be not less than $190,000,
and the amount payable in January 2007 shall be not less than the amount paid in
January 2006. The Executive shall receive an additional lump sum severance
payments on such date in January 2008 as Southwest shall pay its officers their
annual performance bonuses (or, in the absence of any such bonus payments in
January 2008 on the last business day of January 2008), in an amount determined
by the Compensation Committee of the Southwest Board of Directors, not less than
one half of the lump sum payment made in January 2007.
     D. AIRLINE PASSES. The Executive and his wife, Margie, shall receive
lifetime, positive-space passes for travel on Southwest’s scheduled flights, and
the Executive shall be eligible for all pass privileges that other airlines make
available to Southwest’s retirees generally.
     E. MEDICAL AND DENTAL EXPENSES. During his term of employment with
Southwest, the Executive shall remain eligible to participate in any medical
benefit plan or program that Southwest makes available to its employees
generally. Upon termination of his employment with Southwest, the Executive may
elect to participate in any non-contract retiree medical benefit plan or program
that Southwest may then make available to its retirees generally and for which
Employee may then be eligible. Southwest shall reimburse the Executive for all
actuarial age-banded rate premiums that the Executive may incur for himself and
his spouse under any such Southwest plan or program from February 15, 2008 until
February 16, 2013; provided, however that the right to reimbursement provided in
this sentence shall terminate in the event Executive is employed by another
entity providing comparable medical benefits.
     F. PRIOR BENEFITS. Nothing contained in this Agreement is intended to
diminish or enlarge any compensation or other benefits that may have accrued to
the benefit of the Executive in his capacity as an employee or officer of
Southwest at any time prior to the date of this Agreement, it being understood
that the Executive shall have no claim on any further Base Salary or Performance
Bonus or stock options. The Executive shall be eligible to receive such benefits
as he may be entitled to under all profit-sharing, stock purchase, stock option,
group insurance and other benefit plans or programs in which he may have
participated while employed by Southwest, either prior to or after the date of
this Agreement, in each case to the extent of and in accordance with the rules
and agreements governing such plans or programs; provided however, that no stock
options granted to Executive by Southwest shall vest after December 31, 2005.
     G. PAYMENTS UNFUNDED; CONDITION PRECEDENT; CLAWBACK, ETC. The severance
compensation provided for in this Article III is provided on an unsecured,
unfunded basis and shall be payable solely from the general assets of Southwest.
All amounts payable by Southwest pursuant to this Article III shall be paid
without notice or demand, and irrespective of the Executive’s death or
disability; provided, however, that notwithstanding any other provision of this
Agreement it shall be a condition precedent to the obligation of Southwest to
make any payment under Paragraphs III-B and III-C hereof that each of the
following shall be true and accurate at the time of such payment: (i) the
Executive’s agreements contained in Paragraphs II-A and II-C of this Agreement
shall not have been declared to be unenforceable or non-binding on the
Executive, in

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whole or in part, by any court of competent jurisdiction; (ii) the Executive
shall not have engaged in any conduct in breach of his agreements contained in
Paragraphs II-A and II-C hereof, irrespective of the enforceability of any such
agreements at law or in equity; and (iii) at no time prior to February 16, 2008,
shall the Executive do work for any airline that then competes with Southwest,
whether as an employee or as a consultant, nor shall he provide advice to, nor
representation of, any person or entity whose interests are adverse to Southwest
in any legal or administrative proceeding. Upon the occurrence at any time of
either event described in the preceding clauses (i) and (ii) or, if prior to
February 16, 2008, (but not thereafter) the Executive shall do work for any
airline that then competes with Southwest, in addition to relieving Southwest of
any obligation to make any further payments owing under Paragraphs III-B and
III-C hereof, Southwest shall be entitled to recover the full amount of all past
payments that Southwest shall have made pursuant to Paragraph III-B hereof and
Paragraph III-C hereof, with interest thereon at a rate of six percent (6%) per
annum from the time Southwest shall have made any such payment to the Executive
until its recovery thereof. The Executive shall have no obligation to seek other
employment in mitigation of any amount payable to him under this Article III,
and he shall have the right, without incurring any penalty hereunder, to accept
any other employment that does not (i) violate the provisions of Paragraph II-C
hereof or (ii) involve doing work for any airline that then competes with
Southwest. After February 15, 2008, the Executive may accept employment that
involves doing work for an airline that then competes with Southwest.
IV. MISCELLANEOUS
     A. ASSIGNABILITY, ETC. The rights and obligations of Southwest hereunder
shall inure to the benefit of and shall be binding upon the successors and
assigns of Southwest; provided, however, Southwest’s obligations hereunder may
not be assigned without the prior approval of the Executive. This Agreement is
personal to the Executive and may not be assigned by him; provided, however, the
rights of the Executive to receive payments of severance compensation pursuant
to Paragraphs III-B and III-C hereof shall inure to the benefit of his heirs and
legal representatives.
     B. NO WAIVERS. Failure to insist upon strict compliance with any provision
hereof shall not be deemed a waiver of such provision or any other provision
hereof.
     C. AMENDMENTS. This Agreement may not be modified except by an agreement in
writing executed by the parties hereto.
     D. NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing in the English language and shall be deemed to
have been given to the person affected by such notice when personally delivered
or when deposited in the United States mail, certified mail, return receipt
requested and postage prepaid, and addressed to the party affected by such
notice at the address indicated on the signature page hereof.
     E. SEVERABILITY. The invalidity or unenforceability of any provision hereof
shall not affect the validity or enforceability of any other provision hereof.

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     F. COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original but all of which taken together shall
constitute a single instrument.
     G. ENTIRE AGREEMENT. This Agreement contains all of the terms and
conditions agreed upon by the parties hereto respecting the subject matter
hereof, and all other prior agreements, oral or otherwise, regarding the subject
matter of this Agreement shall be deemed to be superseded as of the date of this
Agreement and not to bind either of the parties hereto.
     H. GOVERNING LAW; FORUM SELECTION. This Agreement shall be subject to and
governed by the laws of the State of Texas. The parties hereto agree that any
action or proceeding arising out of this Agreement shall be subject to the
exclusive jurisdiction of the competent courts of the State of Texas sitting in
Dallas County, Texas, and of the United States District Court for the Northern
District of Texas, irrespective of whether or not at any time after the date
hereof the Executive shall relocate his residence to a jurisdiction outside the
State of Texas.

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     IN WITNESS WHEREOF, the Executive has set his hand hereto and Southwest has
caused this Agreement to be signed in its corporate name and behalf by one of
its officers thereunto duly authorized, all as of the day and year first above
written.

          SOUTHWEST AIRLINES CO.
 
        By:   /s/ Gary C. Kelly     Gary C. Kelly,     Chief Executive Officer
and Vice-Chairman of the Board of Directors
 
       
 
  Address:   P.O. Box 36611
 
      Dallas, Texas 75235-1611
 
        EXECUTIVE
 
        By:   /s/ James C. Wimberly     James C. Wimberly
 
       
 
  Address:   6118 Glendora Ave.
 
      Dallas, Texas 75230

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