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<SEC-DOCUMENT>0001010549-05-000505.txt : 20050719
<SEC-HEADER>0001010549-05-000505.hdr.sgml : 20050719
<ACCEPTANCE-DATETIME>20050719144925
ACCESSION NUMBER:		0001010549-05-000505
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20050718
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20050719
DATE AS OF CHANGE:		20050719

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CAPITAL SOUTHWEST CORP
		CENTRAL INDEX KEY:			0000017313
		IRS NUMBER:				751072796
		STATE OF INCORPORATION:			TX
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	811-01056
		FILM NUMBER:		05961429

	BUSINESS ADDRESS:	
		STREET 1:		12900 PRESTON RD STE 700
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75230
		BUSINESS PHONE:		9722338242

	MAIL ADDRESS:	
		STREET 1:		12900 PRESTON RD
		STREET 2:		SUITE 700
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75230
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>capital8k071805.txt
<TEXT>

                                  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
                                                          ----------------------

                          Capital Southwest Corporation
- --------------------------------------------------------------------------------
               (Exact Name of Registrant as Specified in Charter)

                                      Texas
- --------------------------------------------------------------------------------
                 (State or Other Jurisdiction of Incorporation)

                 811-1056                                  75-1072796
- --------------------------------------------------------------------------------
         (Commission File Number)              (IRS Employer Identification No.)


12900 Preston Road, Suite 700, Dallas, Texas                  75230
- --------------------------------------------------------------------------------
  (Address of Principal Executive Offices)                  (Zip Code)


                                 (972) 233-8242
- --------------------------------------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)


- --------------------------------------------------------------------------------
          (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))




<PAGE>

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


<PAGE>

     (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
- -----------         -----
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.












<PAGE>

                                    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
                                             -----------------------------------
                                             William R. Thomas
                                             President and Chairman of the Board






















<PAGE>


                                INDEX TO EXHIBITS

Exhibit No.         Title
- -----------         -----
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.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>capital8kex101071805.txt
<DESCRIPTION>SEVERANCE PAY AGREEMENT DATE JULY 18, 2005
<TEXT>

                                                                    Exhibit 10.1


                             SEVERANCE PAY AGREEMENT


         THIS SEVERANCE PAY AGREEMENT ("Agreement") is executed and effective as
of the 18th day of July,  2005,  by and  between  Capital  Southwest  Management
Corporation,  a Nevada corporation (the "Company"), and William M. Ashbaugh (the
"Employee").

                                  WITNESSETH:

         WHEREAS,  the Employee is an officer of the Company and has made and is
expected to continue to make  contributions to the  profitability  and growth of
the Company; and

         WHEREAS,  the Company  desires to induce its  officers to remain in the
employment  of the  Company  and to assure  itself of both  present  and  future
continuity  of  management  in the event of any actual or  threatened  change in
control of the Company or of Capital Southwest Corporation ("CSC"); and

         WHEREAS,  the  Employee  desires  to  remain in the  employment  of the
Company;

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants herein contained, the parties hereto agree as follows:

                                    AGREEMENT

         Section 1: Operation of Agreement.  This  Agreement  shall be effective
immediately upon its execution, but its provisions shall not be operative unless
and until a Change in Control as defined in Section 2 hereof has  occurred.  The
provisions  of the  Agreement  shall not be operative and shall not apply to any
termination of employment for any reason prior to a Change in Control.

         Section 2: Change in Control. For purposes of this Agreement, Change in
Control means 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


<PAGE>

                  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 the date first above  written (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.

         Section 3: Severance Pay Upon  Termination by Company  Without Cause or
by Employee for Cause.  If, during the two-year period  immediately  following a
Change in Control,  the  Employee's  employment  with the Company is  terminated
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 duties, or for any act of
                  dishonesty  of the  Employee,  including,  but not limited to,
                  theft of or other  unauthorized  personal use of Company funds
                  or other property or the acceptance of unauthorized gratuities
                  or other  remuneration  from  Company  suppliers  or potential
                  suppliers; or

         (b)      by the  Employee  as the result of,  and  within  thirty  days
                  following,  a significant  reduction by the Company of his job
                  responsibilities  with  the  Company  or a  reduction  by  the
                  Company  of his base  salary  from the  Company  as in  effect
                  immediately  prior to the Change in  Control,  or because of a
                  move of his job location by more than 50 miles;

then,  subject to the limitation  contained in the next  sentences,  the Company
shall pay to the Employee,  within  thirty days after the effective  date of his
termination,  an amount  equal to the sum of (i) his annual base salary and (ii)
if the Employee  has  completed a period of service with the Company of at least
five  years  (whether  or  not  continuous)  as of the  Change  in  Control,  an
additional  amount equal to his 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 this Agreement  shall not exceed an
amount  equal to the  lesser  of (i) two  times the  compensation  the  Employee
received  from the Company (or any other entity for which  service is considered
in this Section 3) during the  twelve-month  period  immediately  preceding  his
termination  of service,  or (ii)  twenty-four  multiplied  by his monthly  base
salary.  For purposes of this Section 3, an Employee's  base salary shall be the
amount payable to the Employee during the month immediately preceding the Change
of Control  and the  Employee's  annual base  salary  shall be his monthly  base
salary  multiplied  by twelve.  Both annual base salary and monthly  base salary
shall include earned  commissions but shall be determined  without regard to any
overtime  pay or  bonuses.  If  applicable  to the  determination  of the amount
payable  hereunder,  an  Employee's  period of service with the Company shall be
deemed to include all service, whether or not continuous, with Capital Southwest
Corporation  and any  subsidiary  corporation of which it directly or indirectly
owns the  majority  interest.  The Company may  withhold  from such  payment any
federal, state, city, county or other taxes.

         Section  4:  No  Severance  Pay  Upon  Other   Termination.   Upon  any
termination  of  the  Employee's  employment  with  the  Company  other  than  a
termination specified in Section 3 hereof, the sole obligation of the Company to
the Employee  shall be to pay to him the amount of  compensation  he has accrued
through the effective date of the termination.



<PAGE>

         Section 5:  Entire  Obligation.  Payment to the  Employee  pursuant  to
Section 3 or 4 of this Agreement shall  constitute the entire  obligation of the
Company to the  Employee  and full  settlement  of any claim under law or equity
that the  Employee  might  otherwise  assert  against  the Company or any of its
employees, officers or directors on account of the Employee's termination.

         Section 6:  Non-competition  Agreement.  Notwithstanding  the facts and
circumstances which entitle the Employee to severance pay under Section 3 of the
Agreement, the Employee shall remain subject to and bound by any non-competition
agreement  he may have entered into with the Company that is in effect as of the
date of his termination of employment.

         Section 7: No Obligation to Continue Employment.  This Agreement is not
an  employment  contract and does not create any  obligation  on the part of the
Company to continue to employ the  Employee  following a Change in Control or in
the absence of a Change in Control.

         Section 8: Term of Agreement.  This  Agreement  shall  terminate and no
longer be  effective  on the  earlier of (i) July 18, 2025 or such later date as
may be  established  by the  Company  or (ii) the date upon  which the  Employee
ceases to be an  employee  of the  Company;  provided,  however,  if a Change in
Control  occurs  prior  to the  date  of  termination  of this  Agreement,  this
Agreement  shall continue to be effective until the date two years following the
Change in Control.

         Section 9: Assignment,  Successors in Interest.  This Agreement,  being
personal to the Employee,  may not be assigned by him. The terms and  conditions
of the  Agreement  shall  inure  to the  benefit  of and  be  binding  upon  the
successors  and assigns  (whether  direct or indirect,  by  purchase,  merger or
otherwise) to all or substantially all of the business or assets of the Company,
and the heirs, executors and personal representatives of the Employee.

         Section 10: Waiver.  Failure to insist upon strict  compliance with any
of the terms,  covenants or conditions of this  Agreement  shall not be deemed a
waiver  of  such  term,   covenant  or  condition,   nor  shall  any  waiver  or
relinquishment  of any  right or  power  hereunder  at any one or more  times be
deemed a waiver or  relinquishment  of such  right or power at any other time or
times.

         Section 11:  Attorney's  Fees. If the Employee is determined by a court
of  competent  jurisdiction  to be entitled  to  severance  pay under  Section 3
hereof,  he shall be  entitled  to  reasonable  attorney's  fees and court costs
associated with any legal action brought by him to enforce his rights under this
Agreement.

         IN WITNESS WHEREOF, this Agreement has been executed by the undersigned
as of the date first above written.


                                        CAPITAL SOUTHWEST MANAGEMENT CORPORATION

                                        By: /s/ William R. Thomas
                                           ----------------------
                                           William R. Thomas (Company)


                                            /s/ William M. Ashbaugh
                                           ------------------------
                                           William M. Ashbaugh (Employee)


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>capital8kex102071805.txt
<DESCRIPTION>SEVERANCE PAY AGREEMENT DATE JULY 18, 2005
<TEXT>

                                                                    Exhibit 10.2

                             SEVERANCE PAY AGREEMENT


         THIS SEVERANCE PAY AGREEMENT ("Agreement") is executed and effective as
of the 18th day of July,  2005,  by and  between  Capital  Southwest  Management
Corporation,  a Nevada  corporation (the "Company"),  and Patrick F. Hamner (the
"Employee").

                                   WITNESSETH:

         WHEREAS,  the Employee is an officer of the Company and has made and is
expected to continue to make  contributions to the  profitability  and growth of
the Company; and

         WHEREAS,  the Company  desires to induce its  officers to remain in the
employment  of the  Company  and to assure  itself of both  present  and  future
continuity  of  management  in the event of any actual or  threatened  change in
control of the Company or of Capital Southwest Corporation ("CSC"); and

         WHEREAS,  the  Employee  desires  to  remain in the  employment  of the
Company;

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants herein contained, the parties hereto agree as follows:

                                    AGREEMENT

         Section 1: Operation of Agreement.  This  Agreement  shall be effective
immediately upon its execution, but its provisions shall not be operative unless
and until a Change in Control as defined in Section 2 hereof has  occurred.  The
provisions  of the  Agreement  shall not be operative and shall not apply to any
termination of employment for any reason prior to a Change in Control.

         Section 2: Change in Control. For purposes of this Agreement, Change in
Control means 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

<PAGE>

                  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 the date first above  written (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.

         Section 3: Severance Pay Upon  Termination by Company  Without Cause or
by Employee for Cause.  If, during the two-year period  immediately  following a
Change in Control,  the  Employee's  employment  with the Company is  terminated
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 duties, or for any act of
                  dishonesty  of the  Employee,  including,  but not limited to,
                  theft of or other  unauthorized  personal use of Company funds
                  or other property or the acceptance of unauthorized gratuities
                  or other  remuneration  from  Company  suppliers  or potential
                  suppliers; or

         (b)      by the  Employee  as the result of,  and  within  thirty  days
                  following,  a significant  reduction by the Company of his job
                  responsibilities  with  the  Company  or a  reduction  by  the
                  Company  of his base  salary  from the  Company  as in  effect
                  immediately  prior to the Change in  Control,  or because of a
                  move of his job location by more than 50 miles;

then,  subject to the limitation  contained in the next  sentences,  the Company
shall pay to the Employee,  within  thirty days after the effective  date of his
termination,  an amount  equal to the sum of (i) his annual base salary and (ii)
if the Employee  has  completed a period of service with the Company of at least
five  years  (whether  or  not  continuous)  as of the  Change  in  Control,  an
additional  amount equal to his 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 this Agreement  shall not exceed an
amount  equal to the  lesser  of (i) two  times the  compensation  the  Employee
received  from the Company (or any other entity for which  service is considered
in this Section 3) during the  twelve-month  period  immediately  preceding  his
termination  of service,  or (ii)  twenty-four  multiplied  by his monthly  base
salary.  For purposes of this Section 3, an Employee's  base salary shall be the
amount payable to the Employee during the month immediately preceding the Change
of Control  and the  Employee's  annual base  salary  shall be his monthly  base
salary  multiplied  by twelve.  Both annual base salary and monthly  base salary
shall include earned  commissions but shall be determined  without regard to any
overtime  pay or  bonuses.  If  applicable  to the  determination  of the amount
payable  hereunder,  an  Employee's  period of service with the Company shall be
deemed to include all service, whether or not continuous, with Capital Southwest
Corporation  and any  subsidiary  corporation of which it directly or indirectly
owns the  majority  interest.  The Company may  withhold  from such  payment any
federal, state, city, county or other taxes.

         Section  4:  No  Severance  Pay  Upon  Other   Termination.   Upon  any
termination  of  the  Employee's  employment  with  the  Company  other  than  a
termination specified in Section 3 hereof, the sole obligation of the Company to
the Employee  shall be to pay to him the amount of  compensation  he has accrued
through the effective date of the termination.



<PAGE>

         Section 5:  Entire  Obligation.  Payment to the  Employee  pursuant  to
Section 3 or 4 of this Agreement shall  constitute the entire  obligation of the
Company to the  Employee  and full  settlement  of any claim under law or equity
that the  Employee  might  otherwise  assert  against  the Company or any of its
employees, officers or directors on account of the Employee's termination.

         Section 6:  Non-competition  Agreement.  Notwithstanding  the facts and
circumstances which entitle the Employee to severance pay under Section 3 of the
Agreement, the Employee shall remain subject to and bound by any non-competition
agreement  he may have entered into with the Company that is in effect as of the
date of his termination of employment.

         Section 7: No Obligation to Continue Employment.  This Agreement is not
an  employment  contract and does not create any  obligation  on the part of the
Company to continue to employ the  Employee  following a Change in Control or in
the absence of a Change in Control.

         Section 8: Term of Agreement.  This  Agreement  shall  terminate and no
longer be  effective  on the  earlier of (i) July 18, 2025 or such later date as
may be  established  by the  Company  or (ii) the date upon  which the  Employee
ceases to be an  employee  of the  Company;  provided,  however,  if a Change in
Control  occurs  prior  to the  date  of  termination  of this  Agreement,  this
Agreement  shall continue to be effective until the date two years following the
Change in Control.

         Section 9: Assignment,  Successors in Interest.  This Agreement,  being
personal to the Employee,  may not be assigned by him. The terms and  conditions
of the  Agreement  shall  inure  to the  benefit  of and  be  binding  upon  the
successors  and assigns  (whether  direct or indirect,  by  purchase,  merger or
otherwise) to all or substantially all of the business or assets of the Company,
and the heirs, executors and personal representatives of the Employee.

         Section 10: Waiver.  Failure to insist upon strict  compliance with any
of the terms,  covenants or conditions of this  Agreement  shall not be deemed a
waiver  of  such  term,   covenant  or  condition,   nor  shall  any  waiver  or
relinquishment  of any  right or  power  hereunder  at any one or more  times be
deemed a waiver or  relinquishment  of such  right or power at any other time or
times.

         Section 11:  Attorney's  Fees. If the Employee is determined by a court
of  competent  jurisdiction  to be entitled  to  severance  pay under  Section 3
hereof,  he shall be  entitled  to  reasonable  attorney's  fees and court costs
associated with any legal action brought by him to enforce his rights under this
Agreement.

         IN WITNESS WHEREOF, this Agreement has been executed by the undersigned
as of the date first above written.


                                        CAPITAL SOUTHWEST MANAGEMENT CORPORATION

                                        By: /s/ William R. Thomas
                                           ----------------------
                                           William R. Thomas (Company)


                                            /s/ Patrick F. Hamner
                                           ----------------------
                                           Patrick F. Hamner (Employee)



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>capital8kex103071805.txt
<DESCRIPTION>SEVERANCE PAY AGREEMENT DATE JULY 18, 2005
<TEXT>

                                                                    Exhibit 10.3

                             SEVERANCE PAY AGREEMENT


         THIS SEVERANCE PAY AGREEMENT ("Agreement") is executed and effective as
of the 18th day of July,  2005,  by and  between  Capital  Southwest  Management
Corporation,  a Nevada  corporation (the  "Company"),  and Susan K. Hodgson (the
"Employee").

                                   WITNESSETH:

         WHEREAS,  the Employee is an officer of the Company and has made and is
expected to continue to make  contributions to the  profitability  and growth of
the Company; and

         WHEREAS,  the Company  desires to induce its  officers to remain in the
employment  of the  Company  and to assure  itself of both  present  and  future
continuity  of  management  in the event of any actual or  threatened  change in
control of the Company or of Capital Southwest Corporation ("CSC"); and

         WHEREAS,  the  Employee  desires  to  remain in the  employment  of the
Company;

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants herein contained, the parties hereto agree as follows:

                                    AGREEMENT

         Section 1: Operation of Agreement.  This  Agreement  shall be effective
immediately upon its execution, but its provisions shall not be operative unless
and until a Change in Control as defined in Section 2 hereof has  occurred.  The
provisions  of the  Agreement  shall not be operative and shall not apply to any
termination of employment for any reason prior to a Change in Control.

         Section 2: Change in Control. For purposes of this Agreement, Change in
Control means 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


<PAGE>

                  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 the date first above  written (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.

         Section 3: Severance Pay Upon  Termination by Company  Without Cause or
by Employee for Cause.  If, during the two-year period  immediately  following a
Change in Control,  the  Employee's  employment  with the Company is  terminated
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 duties, or for any act of
                  dishonesty  of the  Employee,  including,  but not limited to,
                  theft of or other  unauthorized  personal use of Company funds
                  or other property or the acceptance of unauthorized gratuities
                  or other  remuneration  from  Company  suppliers  or potential
                  suppliers; or

         (b)      by the  Employee  as the result of,  and  within  thirty  days
                  following,  a significant  reduction by the Company of his job
                  responsibilities  with  the  Company  or a  reduction  by  the
                  Company  of his base  salary  from the  Company  as in  effect
                  immediately  prior to the Change in  Control,  or because of a
                  move of his job location by more than 50 miles;

then,  subject to the limitation  contained in the next  sentences,  the Company
shall pay to the Employee,  within  thirty days after the effective  date of his
termination,  an amount  equal to the sum of (i) his annual base salary and (ii)
if the Employee  has  completed a period of service with the Company of at least
five  years  (whether  or  not  continuous)  as of the  Change  in  Control,  an
additional  amount equal to his 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 this Agreement  shall not exceed an
amount  equal to the  lesser  of (i) two  times the  compensation  the  Employee
received  from the Company (or any other entity for which  service is considered
in this Section 3) during the  twelve-month  period  immediately  preceding  his
termination  of service,  or (ii)  twenty-four  multiplied  by his monthly  base
salary.  For purposes of this Section 3, an Employee's  base salary shall be the
amount payable to the Employee during the month immediately preceding the Change
of Control  and the  Employee's  annual base  salary  shall be his monthly  base
salary  multiplied  by twelve.  Both annual base salary and monthly  base salary
shall include earned  commissions but shall be determined  without regard to any
overtime  pay or  bonuses.  If  applicable  to the  determination  of the amount
payable  hereunder,  an  Employee's  period of service with the Company shall be
deemed to include all service, whether or not continuous, with Capital Southwest
Corporation  and any  subsidiary  corporation of which it directly or indirectly
owns the  majority  interest.  The Company may  withhold  from such  payment any
federal, state, city, county or other taxes.

         Section  4:  No  Severance  Pay  Upon  Other   Termination.   Upon  any
termination  of  the  Employee's  employment  with  the  Company  other  than  a
termination specified in Section 3 hereof, the sole obligation of the Company to
the Employee  shall be to pay to him the amount of  compensation  he has accrued
through the effective date of the termination.



<PAGE>

         Section 5:  Entire  Obligation.  Payment to the  Employee  pursuant  to
Section 3 or 4 of this Agreement shall  constitute the entire  obligation of the
Company to the  Employee  and full  settlement  of any claim under law or equity
that the  Employee  might  otherwise  assert  against  the Company or any of its
employees, officers or directors on account of the Employee's termination.

         Section 6:  Non-competition  Agreement.  Notwithstanding  the facts and
circumstances which entitle the Employee to severance pay under Section 3 of the
Agreement, the Employee shall remain subject to and bound by any non-competition
agreement  he may have entered into with the Company that is in effect as of the
date of his termination of employment.

         Section 7: No Obligation to Continue Employment.  This Agreement is not
an  employment  contract and does not create any  obligation  on the part of the
Company to continue to employ the  Employee  following a Change in Control or in
the absence of a Change in Control.

         Section 8: Term of Agreement.  This  Agreement  shall  terminate and no
longer be  effective  on the  earlier of (i) July 18, 2025 or such later date as
may be  established  by the  Company  or (ii) the date upon  which the  Employee
ceases to be an  employee  of the  Company;  provided,  however,  if a Change in
Control  occurs  prior  to the  date  of  termination  of this  Agreement,  this
Agreement  shall continue to be effective until the date two years following the
Change in Control.

         Section 9: Assignment,  Successors in Interest.  This Agreement,  being
personal to the Employee,  may not be assigned by him. The terms and  conditions
of the  Agreement  shall  inure  to the  benefit  of and  be  binding  upon  the
successors  and assigns  (whether  direct or indirect,  by  purchase,  merger or
otherwise) to all or substantially all of the business or assets of the Company,
and the heirs, executors and personal representatives of the Employee.

         Section 10: Waiver.  Failure to insist upon strict  compliance with any
of the terms,  covenants or conditions of this  Agreement  shall not be deemed a
waiver  of  such  term,   covenant  or  condition,   nor  shall  any  waiver  or
relinquishment  of any  right or  power  hereunder  at any one or more  times be
deemed a waiver or  relinquishment  of such  right or power at any other time or
times.

         Section 11:  Attorney's  Fees. If the Employee is determined by a court
of  competent  jurisdiction  to be entitled  to  severance  pay under  Section 3
hereof,  he shall be  entitled  to  reasonable  attorney's  fees and court costs
associated with any legal action brought by him to enforce his rights under this
Agreement.

         IN WITNESS WHEREOF, this Agreement has been executed by the undersigned
as of the date first above written.



                                        CAPITAL SOUTHWEST MANAGEMENT CORPORATION

                                        By: /s/ William R. Thomas
                                           ----------------------
                                           William R. Thomas (Company)


                                            /s/ Susan K. Hodgson
                                           ---------------------
                                           Susan K. Hodgson (Employee)




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>5
<FILENAME>capital8kex104071805.txt
<DESCRIPTION>SEVERANCE PAY AGREEMENT DATE JULY 18, 2005
<TEXT>

                                                                    Exhibit 10.4

                             SEVERANCE PAY AGREEMENT


         THIS SEVERANCE PAY AGREEMENT ("Agreement") is executed and effective as
of the 18th day of July,  2005,  by and  between  Capital  Southwest  Management
Corporation,  a Nevada corporation (the "Company"), and Jeffrey G. Peterson (the
"Employee").

                                   WITNESSETH:

         WHEREAS,  the Employee is an officer of the Company and has made and is
expected to continue to make  contributions to the  profitability  and growth of
the Company; and

         WHEREAS,  the Company  desires to induce its  officers to remain in the
employment  of the  Company  and to assure  itself of both  present  and  future
continuity  of  management  in the event of any actual or  threatened  change in
control of the Company or of Capital Southwest Corporation ("CSC"); and

         WHEREAS,  the  Employee  desires  to  remain in the  employment  of the
Company;

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants herein contained, the parties hereto agree as follows:

                                    AGREEMENT

         Section 1: Operation of Agreement.  This  Agreement  shall be effective
immediately upon its execution, but its provisions shall not be operative unless
and until a Change in Control as defined in Section 2 hereof has  occurred.  The
provisions  of the  Agreement  shall not be operative and shall not apply to any
termination of employment for any reason prior to a Change in Control.

         Section 2: Change in Control. For purposes of this Agreement, Change in
Control means 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


<PAGE>

                  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 the date first above  written (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.

         Section 3: Severance Pay Upon  Termination by Company  Without Cause or
by Employee for Cause.  If, during the two-year period  immediately  following a
Change in Control,  the  Employee's  employment  with the Company is  terminated
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 duties, or for any act of
                  dishonesty  of the  Employee,  including,  but not limited to,
                  theft of or other  unauthorized  personal use of Company funds
                  or other property or the acceptance of unauthorized gratuities
                  or other  remuneration  from  Company  suppliers  or potential
                  suppliers; or

         (b)      by the  Employee  as the result of,  and  within  thirty  days
                  following,  a significant  reduction by the Company of his job
                  responsibilities  with  the  Company  or a  reduction  by  the
                  Company  of his base  salary  from the  Company  as in  effect
                  immediately  prior to the Change in  Control,  or because of a
                  move of his job location by more than 50 miles;

then,  subject to the limitation  contained in the next  sentences,  the Company
shall pay to the Employee,  within  thirty days after the effective  date of his
termination,  an amount  equal to the sum of (i) his annual base salary and (ii)
if the Employee  has  completed a period of service with the Company of at least
five  years  (whether  or  not  continuous)  as of the  Change  in  Control,  an
additional  amount equal to his 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 this Agreement  shall not exceed an
amount  equal to the  lesser  of (i) two  times the  compensation  the  Employee
received  from the Company (or any other entity for which  service is considered
in this Section 3) during the  twelve-month  period  immediately  preceding  his
termination  of service,  or (ii)  twenty-four  multiplied  by his monthly  base
salary.  For purposes of this Section 3, an Employee's  base salary shall be the
amount payable to the Employee during the month immediately preceding the Change
of Control  and the  Employee's  annual base  salary  shall be his monthly  base
salary  multiplied  by twelve.  Both annual base salary and monthly  base salary
shall include earned  commissions but shall be determined  without regard to any
overtime  pay or  bonuses.  If  applicable  to the  determination  of the amount
payable  hereunder,  an  Employee's  period of service with the Company shall be
deemed to include all service, whether or not continuous, with Capital Southwest
Corporation  and any  subsidiary  corporation of which it directly or indirectly
owns the  majority  interest.  The Company may  withhold  from such  payment any
federal, state, city, county or other taxes.

         Section  4:  No  Severance  Pay  Upon  Other   Termination.   Upon  any
termination  of  the  Employee's  employment  with  the  Company  other  than  a
termination specified in Section 3 hereof, the sole obligation of the Company to
the Employee  shall be to pay to him the amount of  compensation  he has accrued
through the effective date of the termination.



<PAGE>

         Section 5:  Entire  Obligation.  Payment to the  Employee  pursuant  to
Section 3 or 4 of this Agreement shall  constitute the entire  obligation of the
Company to the  Employee  and full  settlement  of any claim under law or equity
that the  Employee  might  otherwise  assert  against  the Company or any of its
employees, officers or directors on account of the Employee's termination.

         Section 6:  Non-competition  Agreement.  Notwithstanding  the facts and
circumstances which entitle the Employee to severance pay under Section 3 of the
Agreement, the Employee shall remain subject to and bound by any non-competition
agreement  he may have entered into with the Company that is in effect as of the
date of his termination of employment.

         Section 7: No Obligation to Continue Employment.  This Agreement is not
an  employment  contract and does not create any  obligation  on the part of the
Company to continue to employ the  Employee  following a Change in Control or in
the absence of a Change in Control.

         Section 8: Term of Agreement.  This  Agreement  shall  terminate and no
longer be  effective  on the  earlier of (i) July 18, 2025 or such later date as
may be  established  by the  Company  or (ii) the date upon  which the  Employee
ceases to be an  employee  of the  Company;  provided,  however,  if a Change in
Control  occurs  prior  to the  date  of  termination  of this  Agreement,  this
Agreement  shall continue to be effective until the date two years following the
Change in Control.

         Section 9: Assignment,  Successors in Interest.  This Agreement,  being
personal to the Employee,  may not be assigned by him. The terms and  conditions
of the  Agreement  shall  inure  to the  benefit  of and  be  binding  upon  the
successors  and assigns  (whether  direct or indirect,  by  purchase,  merger or
otherwise) to all or substantially all of the business or assets of the Company,
and the heirs, executors and personal representatives of the Employee.

         Section 10: Waiver.  Failure to insist upon strict  compliance with any
of the terms,  covenants or conditions of this  Agreement  shall not be deemed a
waiver  of  such  term,   covenant  or  condition,   nor  shall  any  waiver  or
relinquishment  of any  right or  power  hereunder  at any one or more  times be
deemed a waiver or  relinquishment  of such  right or power at any other time or
times.

         Section 11:  Attorney's  Fees. If the Employee is determined by a court
of  competent  jurisdiction  to be entitled  to  severance  pay under  Section 3
hereof,  he shall be  entitled  to  reasonable  attorney's  fees and court costs
associated with any legal action brought by him to enforce his rights under this
Agreement.

         IN WITNESS WHEREOF, this Agreement has been executed by the undersigned
as of the date first above written.



                                        CAPITAL SOUTHWEST MANAGEMENT CORPORATION

                                        By: /s/ William R. Thomas
                                           ----------------------
                                           William R. Thomas (Company)


                                            /s/ Jeffrey G. Peterson
                                           -----------------------
                                           Jeffrey G. Peterson (Employee)



</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
