In 2007, the average number of employees employed by BKK Salzgitter was 126 (annual average in 2006: 121).

Remuneration of the Executive Board

Upon the proposal of the Presiding Committee, the Supervisory Board regulary discussed and reviewed the structure of the remuneration system for the Executive Board. The remuneration of the Executive Board was fixed by the Presiding Committee, basing its decision on the size and global operations of the Company, its economic position and the level and structure of board remuneration in similar companies. In addition, the responsibilities and performance of each individual Board member were taken into account.

The remuneration of TUI AG’s Executive Board members comprised fixed and variable components. The variable remuneration components consist of a management bonus and a bonus under a long-term incentive programme. The management bonus was calculated on the basis of the respective earnings before interest, tax and amortisation of goodwill (EBITA). In addition, Executive Board members are entitled to a company cars and driver services as well as travel benefits.

As part of the long-term incentive programme, the Executive Board members received a bonus for the 2007 financial year, which was translated into phantom stocks in TUI AG on the basis of an average share price. Phantom stocks to be granted were calculated on the basis of earnings before tax and amortisation of goodwill (EBTA). The translation into phantom stocks was based on the average share price of the 20 trading days following the Supervisory Board meeting at which the annual financial statements were adopted. The number of phantom stocks granted for a financial year is thus not determined until the following year. Following a lock-up period of two years, the entitlement to cash payment from this bonus can be exercised individually by the Executive Board members within predetermined timeframes. The lock-up period does not apply to members resigning from the Executive Board. The level of the cash payment depends on the average price of TUI AG shares over a period of 20 trading days following the exercise date. There is no absolute or relative return or price targets. A cap is provided for extraordinary unexpected share price developments.

1) upon departure of Mr Peter Rothwell

On 31 December 2007, former Executive Board members held 6,486 phantom stocks (previous year: 0 stocks). Provisions totalling € 9,822 thousand (previous year: € 8,481 thousand) were formed for the entitlements under the long-term incentive programme, including the granting of phantom stocks for the 2007 financial year.

The valuation of the phantom stocks in TUI AG resulted in a profit of € 1,958.0 thousand (previous year: loss of € 1,107.1 thousand) for the Executive Board members including a former Executive Board member in the 2007 financial year.

1) upon their departure

As in 2006, the members of the Executive Board did not receive any loans or advances in the 2007 financial year.

Compensation in the event of a termination of position

a) Pension entitlements

Pensions were paid to former Executive Board members who reached the predefined age limit or were permanently incapacitated. The pension for Board members in Germany was calculated on the basis of pensionable pay, oriented to an Executive Board member’s fixed remuneration. The pension level was determined as a percentage of pensionable pay. This percentage was 50% for the first employment contract period. Depending on the number of employment contract periods, this percentage may rise to up to 80%. Pension rights are vested following the completion of the first period of office.

Under certain circumstances, widows of Executive Board members will receive a widow’s pension of 60% of the pension for their lifetime or until remarriage. Children of Executive Board members receive an orphan’s pension, maximally paid until they are 25 years of age. The orphan’s pension amounts to 20% of the pension for orphans having have lost one parent, and 25% for orphans having lost both parents.

Reversals of pension provisions arose in 2007 as the interest rate used for calculation was raised to 5.5% per annum in 2007 (previous year: 4.5% per annum). For a new Executive Board member, the required amount was added to the pension provision.

At the balance sheet date, pension obligations for active members of the Executive Board totalled € 19,929 thousand (previous year: € 20,663 thousand). Pension provisions for former members of the Executive Board and their dependents amounted to € 34,780 thousand (previous year: € 47,811 thousand) at the balance sheet date.

The pension obligations for German beneficiaries were funded via the conclusion of pledged reinsurance policies. As the reinsurance policy fully covered the pension obligations for former and active Executive Board members, the insurance was deducted as an asset from the pension obligation. In the 2007 financial year, pension provisions for active Board members fell by € 464 thousand (in the previous year, an amount of € 1,988 thousand was transferred to pension provisions).

In the 2007 financial year, the remuneration paid to former Executive Board members and their surviving dependents totalled € 7,011 thousand, including an one-off remuneration of € 777 thousand to a retired Board member (previous year: € 5,662 thousand). The provision to satisfy non-competition clauses and potential transition payment rights was increased by € 100 thousand (previous year: € 3,250 thousand).

b) Transition payments

Executive Board members retiring upon the expiry of their term of office either for lack of reappointment or renewal of their term of office or because the Company terminates their contract of employment are entitled to a transition payment until the date at which the pension payments fall due. The transition payments corres­pond to the pension rights. Any income received by the beneficiaries from self-employment or employment, pensions or transition payments by other companies or payments received from insurance companies is deducted from the entitlement to the transition payment.

c) Change of control agreement

In event of loss of Board membership through a change of control – if one or more shareholders acquire the majority of voting rights in TUI AG – or through executing the right granted to Board members, specifically accorded for this case, of resigning from their office and terminating the contract of employment as a Board member every Executive Board member is entitled to receive a remuneration for his financial entitlements for the remaining period of his contract of employment as Board member. The performance-related remuneration and the granting of phantom stocks for the remaining term of the employment contract are based on the average remuneration received in the last three financial years. The same provision applies to the remuneration for Super­visory Board mandates hitherto received from Group companies.

The employment contracts for Board members do not comprise an explicit severance payment entitlement upon a premature termination of the service agreement. However, a severance payment may be paid under an individual termination agreement.

Remuneration of the Supervisory Board

The remuneration of the Supervisory Board members comprised a fixed component and variable components. They were determined in accordance with section 18 of TUI AG’s Articles of Association, made permanently accessible to the public on the internet. The chairman of the Supervisory Board received three times the compen-sation of a regular member, the deputy chairperson and the other members of the Presiding Committee one and a half times the total remuneration of a regular member. A separate remuneration was paid for membership and chairmanship of committees.

The members of the Supervisory Board received a fixed remuneration of € 40,000, payable upon the completion of the financial year, besides reimbursement of their expenses.

In addition, the Supervisory Board received a remuneration oriented to the Company’s short-term performance of € 100 per € 0.01 of the earnings per share reported for the completed financial year.

The Supervisory Board also received a remuneration related to the Company’s long-term performance. The long-term variable remuneration consisted of a basic amount of € 20,000 annually. This basic amount is paid upon the completion of the third financial year following the granting of the remuneration and increases or decreases in line with the percentage increase or decrease in earnings per share during that period. A change in earnings per share of € 0.01 leads to an increase or decrease of € 100 on the basic amount. However, the amount payable must not under any circumstances exceed 250% of the basic amount.

In addition, travel expenses and other expenses totalling € 65 thousand (previous year: € 74 thousand) were reimbursed. Total remuneration of the Supervisory Board members thus totalled € 2,488.5 thousand (previous year: € 1,694 thousand).

Apart from the work performed by the employees’ representatives in the framework of their contracts of employment, the members of the Supervisory Board did not provide any personal services such as consultation or agency services for TUI AG or its subsidiaries in the 2007 financial year.

The entitlements of the Supervisory Board members under the long-term renume­ration arrangement were covered by a provision totalling € 1,565 thousand (previous year: € 430 thousand).

Shareholding structure

In 2007 and in prior years, TUI AG received notifications concerning changes in the voting capital held by third parties pursuant to section 21 sub-section 1 of the German Securities Trading Act and published them in the Federal Gazette, including the following notifications still effective as at 31 December 2007:

RIU Hotels S.A.

The voting capital in TUI AG held by RIU Hotels S.A. has totalled 5.10% since 30 March 2005.

Caja de Ahorros del Mediterráneo/Inversiones Cotizadas del Mediterráneo

According to a notification by Caja de Ahorros del Mediterráneo received in December 2005 pursuant to section 21 sub-section 1 of the German Securities Trading Act, the company indirectly holds 5.00% of the voting rights in TUI AG following the contribution of its participation in TUI AG to Inversiones Cotizadas del Mediterráneo. The direct holder of the 5.00% share in the voting capital of TUI AG has been Inversiones Cotizadas del Mediterráneo since 1 December 2005. These shares are attributable to Caja de Ahorros del Mediterráneo pursuant to section 22 sub-section 1 no 1 of the German Securities Trading Act.

Hamed El Chiaty

According to a notification by Mr Hamed El Chiaty received in May 2007 pursuant to section 21 sub-section 1 of the German Securities Trading Act, the share in the voting capital of TUI AG attributable to him amounted to 4.00% (10,040,600 voting shares) as at 30 April 2007. All voting rights were directly held by Brierly Gardens Investments Limited (managing director: Hamed El Chiaty). In May 2007, the direct and indirect shareholders of the voting shares notified us that their share in the voting capital had fallen below the level of 3% and that they held 0% of the voting shares, i.e. no voting shares, in TUI AG as at that date. Share ownership had fallen below the threshold mentioned above due to a securities lending transaction which, however, is to be terminated before every AGM.

Teck Capital Management/Fipar International

According to a notification by Teck Capital Management pursuant to section 21 sub-section 1 of the German Securities Trading Act, its share in the voting capital of TUI AG totalled 5.0000028% (12,551,000 voting shares) on 9 July 2007. These voting shares were attributable to Fipar International via its subsidiary Teck Capital Management pursuant to section 22 sub-section 1 no 1 of the German Securities Trading Act.

Neuberger Berman LLC

According to the latest notification by Neuberger Berman LLC of August 2007 pursuant to section 21 sub-section 1 of the German Securities Trading Act, its share in the voting capital of TUI AG totalled 5.70% (14,314,100 voting shares) on 27 July 2007. All voting rights were attributable to Neuberger Berman LLC pursuant to section 22 sub-section 1 no 1 of the German Securities Trading Act.

Greenwich Holdings Ltd./Geveran Trading Co. Ltd.

According to a notification by Greenwich Holdings Ltd. and Geveran Trading Co. Ltd. received in September 2007 pursuant to section 21 sub-section 1 of the German Securities Trading Act, their share in the voting capital of TUI AG, held by Geveran Trading Co. Ltd., totalled 5.12% (12,850,000 voting shares) on 7 September 2007. Pursuant to section 22 sub-section 1 no 1 of the German Securities Trading Act, all voting rights were attributable to Greenwich Holdings Ltd.

Alexey Mordashov/Sungrebe Investments Limited/Artcone Limited

According to a notification by Mr Alexey Mordashov received in November 2007 pursuant to section 21 sub-section 1 of the German Securities Trading Act, his share in the voting capital of TUI AG totalled 3.02% (7,585,000 voting shares) on 19 November 2007, attributable to him via Sungrebe Investments Limited and Artcone Limited.

UBS AG

According to a notification by UBS AG received in December 2007 pursuant to section 21 sub-section 1 of the German Securities Trading Act, its share in the voting capital of TUI AG totalled 3.39% (8,528,363 voting shares) on 20 November 2007. 0.12% of the voting rights (310,314 voting shares) were attributable to UBS AG pursuant to section 22 sub-section 1 no 1 of the German Securities Trading Act.

Further detailed information has been published at the Company’s website (www.tui-group.com).

German Corporate Governance Code

TUI AG has oriented its corporate governance consistently to the recommendations and suggestions of the German Corporate Governance Code. In 2007, the Executive Board and the Supervisory Board repeatedly dealt with corporate governance issues and jointly submitted the updated declaration of compliance in accordance with section 161 of the German Stock Corporation Act in November 2007. The declaration was made permanently accessible to the public on TUI AG’s website.