Southwest Airlines Co.
1.250% Convertible Senior Note due 2025
This Note is one of a duly authorized issue of Notes of the Company, designated as its 1.250% Convertible Senior Notes due 2025 (the Notes), issued initially in the aggregate principal amount of $2,300,000,000 under and pursuant to an Indenture, dated as of September 17, 2004 (the Base Indenture), as amended and supplemented by the First Supplemental Indenture, dated as of May 1, 2020 (herein called the Supplemental Indenture; the Base Indenture, as amended and supplemented by the Supplemental Indenture, and as it may be further amended or supplemented from time to time, the Indenture), between the Company and Wells Fargo Bank, National Association, a national banking association organized under the laws of the United States of America, as Trustee (the Trustee), to which the Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Securityholders. Additional Notes may be issued in an unlimited aggregate principal amount, subject to certain conditions specified in the Indenture. Capitalized terms used in this Note and not defined in this Note shall have the respective meanings set forth in the Indenture. In the event of any inconsistency between this Note and the Indenture, the terms of the Indenture shall govern.
In case certain Events of Default shall have occurred and be continuing, the principal of, and interest on, all Notes may be declared, by either the Trustee or Securityholders of at least 25% in aggregate principal amount of Notes then outstanding, and upon said declaration shall become, due and payable, in the manner, with the effect and subject to the conditions and certain exceptions set forth in the Indenture.
Subject to the terms and conditions of the Indenture, the Company will make all payments and deliveries in respect of the Fundamental Change Repurchase Price on the Fundamental Change Repurchase Date and the principal amount on the Maturity Date, as the case may be, to the Securityholder who surrenders a Note to a Paying Agent to collect such payments in respect of the Note. The Company will pay cash amounts in money of the United States that at the time of payment is legal tender for payment of public and private debts.
The Indenture contains provisions permitting the Company and the Trustee in certain circumstances, without the consent of the Securityholders, and in certain other circumstances, with the consent of the Securityholders of not less than a majority in aggregate principal amount of the Notes at the time outstanding, evidenced as in the Indenture provided, to execute supplemental indentures modifying the terms of the Indenture and the Notes as described therein. It is also provided in the Indenture that, subject to certain exceptions, the Securityholders of a majority in aggregate principal amount of the Notes at the time outstanding may on behalf of the Securityholders of all of the Notes waive any past Default or Event of Default under the Indenture and its consequences.
The Notes will initially be issued in the form of a Global Security. The Notes are issuable in registered form without coupons in minimum denominations of $1,000 principal amount and $1,000 integral multiples in excess thereof. At the office or agency of the Company referred to on the face hereof, and in the manner and subject to the limitations provided in the Indenture, Notes may be exchanged for a like aggregate principal amount of Notes of other authorized denominations, without payment of any service charge but, if required by the Company or Trustee, with payment of a sum sufficient to cover any transfer or similar tax that may be imposed in connection therewith as a result of the name of the Securityholder of the new Notes issued upon such exchange of Notes being different from the name of the Securityholder of the old Notes surrendered for such exchange.
The Notes are not subject to redemption through the operation of any sinking fund or otherwise.
Upon the occurrence of a Fundamental Change, the Company shall be required to offer to purchase for cash all of the Notes on the Fundamental Change Repurchase Date at a price equal to the Fundamental Change Repurchase Price.
Subject to the provisions of the Indenture, the Securityholder hereof has the right, at its option, during certain periods and upon the occurrence of certain conditions specified in the Indenture, prior to the close of business on the second Scheduled Trading Day immediately preceding the Maturity Date, to convert any Notes or portion thereof that are in minimum denominations of $1,000 principal amount or integral multiples of $1,000 in excess thereof, into cash, shares of Common Stock or a combination of cash and shares of Common Stock, at the Companys election, based on the Conversion Rate specified in the Indenture, as adjusted from time to time as provided in the Indenture.