LUVSouthwest Airlines

Certain Relationships and Related Transactions, and Director Independence

“In determining her independence, the Board considered Ms. Atherton’s service as President & CEO of Bell, a TXT company, and her service as a member of TXT’s Corporate Leadership Team. In particular, the Board considered the Company’s ordinary course commercial transactions over the past three years with Textron Ground Support Equipment, a sister company of Bell. None of the cumulative business transactions in any of the prior three years involved an amount that exceeded 2% of the other company’s consolidated gross revenues. The Board determined that such transactions are not material to either TXT or to the”

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Corporate Governance

“Company and that Ms. Atherton does not have a direct or indirect material interest in the Company’s transactions with Textron Ground Support Equipment. The Board has concluded that these transactions and arrangements will not impair Ms. Atherton’s exercise of independent judgment in carrying out her responsibilities as Director. Therefore, the Board has determined that Lisa M. Atherton has no material relationship with the Company (either directly or as a partner, shareholder, or officer of an organization that has a relationship with the Company) and is independent under applicable NYSE standards.”

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Corporate Governance

“Transactions with Related Persons since January 1, 2024. Pursuant to the requirements of the NYSE, the Audit Committee reviews all related party transactions and prohibits such a transaction if the Audit Committee determines it to be inconsistent with the interests of the Company and its Shareholders. The following are reportable transactions with related persons for 2024, which were approved by the Audit Committee.”

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Corporate Governance

“Ms. Watson’s husband, Paul Watson, is employed as a pilot by the Company, and during 2024, Mr. Watson’s compensation was $474,373.”

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Corporate Governance

“Mr. Fornaro was party to an Advisory Agreement, effective as of January 1, 2023, by and between Mr. Fornaro and the Company (the “Advisory Agreement”), whereby the Company paid Mr. Fornaro a monthly fee of $23,000 plus reasonable expenses incurred for services. Mr. Fornaro was also party to a Consultant Retention Letter, effective as of July 5, 2024, by and among Mr. Fornaro, the Company, and Kirkland & Ellis LLP (the “Consultant Letter”), governed by the terms of the Advisory Agreement and whereby the Company did not pay Mr. Fornaro an additional fee. The Advisory Agreement and the Consultant Letter were terminated on September 26, 2024, prior to Mr. Fornaro’s appointment to the Board. Additionally, Mr. Fornaro’s son-in-law, Eric Hall, is a Director level Employee of the Company. For 2024, Mr. Hall’s total compensation was $331,062, which included base salary for 2024, bonus related to his employment in 2024, and grant date fair value of equity compensation awards granted to Mr. Hall in 2024 for financial statement purposes. Mr. Hall also participated in benefit plans generally available to the Company’s Employees. Mr. Fornaro disclaims any interest in Mr. Hall’s compensation.”

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Corporate Governance

“The Cooperation Agreement. On October 23, 2024, the Company entered into the Cooperation Agreement with the Elliott Parties, and on February 19, 2025, the Company and the Elliott Parties amended the Cooperation Agreement. The Elliott Parties are the beneficial owners of more than 5% of the Company’s common stock.”

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Corporate Governance

“Pursuant to the Cooperation Agreement, as amended, the Company agreed to, among other things, (i) appoint Mses. Feinberg and Watson and Messrs. Cush, Grissen, and Saretsky (collectively, the “Cooperation Agreement Directors”) to the Board, effective November 1, 2024, each with an initial term expiring at the Annual Meeting; (ii) announce that two incumbent Directors will not stand for re-election to the Board at the Annual Meeting; and (iii) include the Cooperation Agreement Directors, together with the other persons recommended by the Board, in the Company’s slate of nominees for election as a Director at the Annual Meeting. The Cooperation Agreement further provides that in the event that any Cooperation Agreement Director is unable or unwilling to serve as a Director, resigns as a Director, is removed as a Director, or ceases to be a Director of the Company for any other reason prior to the expiration of the Cooperation Period (as defined below), the Company and Elliott Parties shall cooperate in good faith to select a mutually agreeable replacement Director; provided, that at such time the Elliott Parties beneficially own a “net-long position” of, or have aggregate net-long economic exposure to, at least 3% of the Company’s then-outstanding common stock.”

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Corporate Governance

“The Company also agreed that the Board would (i) reconstitute each of the committees of the Board, other than the Safety and Operations Committee, such that the Cooperation Agreement Directors constitute at least one-third of the total members of each committee and (ii) appoint Messrs. Saretsky and Cush and three other directors to be selected by the Board to the Finance Committee, with Mr. Saretsky appointed as chair of the committee. The Company also agreed to amend the charter of the Finance Committee.”

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Corporate Governance

“The Cooperation Agreement includes certain voting commitments, customary standstill restrictions, and mutual non-disparagement provisions that remain in place until the earlier of (x) the date that is 30 days prior to the notice deadline under the Company’s bylaws for the nomination of non-proxy access Director candidates for election to the Board at the Company’s 2026 Annual Meeting of Shareholders and (y) February 14, 2026 (such period, the “Cooperation Period”); provided, however, that certain standstill restrictions will end on the earlier of (a) the day after the record date for the 2026 Annual Meeting of Shareholders and (b) April 1, 2026.”

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Corporate Governance

“Ongoing Reporting Obligations with Respect to Related Person Transactions. In order to provide an ongoing mechanism for monitoring related person transactions and Board member independence, each Board member and executive officer of the Company is required to sign an acknowledgement that he or she will promptly inform the Company of any new information that should be considered by the Board subsequent to the Director’s or executive officer’s completion of his or her annual questionnaire.”

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Certain Relationships and Related Transactions, and Director Independence

“Review, Approval, or Ratification of Transactions with Related Persons; Director Independence Determinations. The Company does not have a formal written policy with respect to the review, approval, or ratification of transactions with related persons, but has established procedures to identify these transactions, if any, and bring them to the attention of the Board and the Audit Committee for consideration. These procedures include formal written questionnaires to Directors and executive officers and written procedures followed by the Company’s Internal Audit Department to identify related person transactions.”

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Certain Relationships and Related Transactions, and Director Independence

“The Company requires all of its Directors and executive officers to complete an annual questionnaire that requires them to identify and describe any transactions that they or their respective related parties may have with the Company, whether or not material. Separately, the Company’s Internal Audit Department analyzes accounts payable records to search for payments involving (i) the Company’s Directors and executive officers, (ii) known relatives of the Company’s Directors and executive officers, (iii) companies and organizations with which the Directors and executive officers are associated, and (iv) security holders known to the Company to be the beneficial owner of more than five percent of the Company’s common stock. The questionnaire for non-Employee Directors is also designed to elicit information that should be considered to determine that the Company satisfies the NYSE’s requirement that a majority of its Board members be independent within the meaning of the NYSE’s rules. Relevant information regarding Directors is then provided to the Nominating and Corporate Governance Committee, which is responsible for evaluating the qualifications of Board nominees, including independence, and for making recommendations to the Board regarding (i) nominations for Board membership and (ii) individual qualifications for committee membership, taking into account various additional regulatory requirements, including independence requirements, that specifically apply to the different Board committees. In making its recommendations to the Board, the Nominating and Corporate Governance Committee considers the following regulatory guidance: (i) Item 404(a) of Regulation S-K of the Securities Act of 1933, as amended (Transactions with Related Persons); (ii) Accounting Standards Codification Topic 850 (Related Party Disclosures); (iii) Public Company Accounting Oversight Board Auditing Standard No. 18 (Related Parties); and (iv) the NYSE’s governance standards related to independence determinations. Based on the foregoing, the Board has determined that the following Board members are independent under applicable NYSE standards: Lisa M. Atherton, Pierre R. Breber, Douglas H. Brooks, Sarah E. Feinberg, Rakesh Gangwal, David J. Grissen, David P. Hess, Christopher P. Reynolds, and Patricia A. Watson.”

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