TUI AGKarl-Wiechert-Allee 430625 HanoverGermany

Invitation to the Annual General Meeting 2009TUI AG

Hannover Congress Centrum13 May 2009

10:30 a.m. (CEST)

2 Agenda

2 Abbreviated Version 3 Agenda

22 Participation

22 Registration 22 Advice on Voting by Proxy 23 Advice on Counter-Motions and Nominations for Elections pursuant to Section 126(1) AktG 23 Notification pursuant to Section 128(2) AktG

24 Extracts of the Annual Report 2008

24 TUI Group in Figures 25 2008 – the Year that was 26 Divisional Turnover and Earnings 30 Development of Group Earnings 31 Net Assets of the Group 32 Financial Position of the Group 34 Annual Financial Statements of the TUI AG (abbreviated version) 35 Report on Expected Developments 37 Report on Subsequent Events

38 Service

38 Directions to the Venue 40 Annual General Meeting online 41 AGM Online-Service 42 Map of Hannover Congress Centrum 43 Guidelines for the AGM

Table of Contents

Item 7-9 Agenda 1

Invitation We hereby invite our shareholders to the 2009 Annual General Meeting on Wednesday, 13 May 2009 at 10:30 a.m. at the Hannover Congress Centrum (Niedersachsenhalle/Eilen riedehalle/Glas-halle), Theodor-Heuss-Platz 1-3, 30175 Hanover.

TUI AGBerlin/HanoverKarl-Wiechert-Allee 430625 HanoverGermany

The company’s share capital is divided into 251,444,305 no-par value shares carrying the same number of votes.

Securities identification numbers:Voting and participating shares:ISIN Code WKNDE 000 TUA G000 TUA G00DE 000 TUA G6B9 TUA G6BDE 000 TUA G7B7 TUA G7B

Voting shares:ISIN Code WKNDE 000 TUA G7C5 TUA G7C

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2 Agenda Abbreviated version

1. Presentation of the approved annual financial statements as at 31 December 2008, the approved consolidated financial statements, the combined manage-ment and Group management report, the report of the Supervisory Board and the explanatory report on the information pursuant to sections 289(4) and 315(4) HGB

2. No resolution on the appropriation of a net profit available for distribution 3. Resolution on the ratification of the actions of the Executive Board

for the 2008 financial year

4. Resolution on the ratification of the actions of the Supervisory Board for the 2008 financial year

5. Resolution on changing the financial year pursuant to article 2(2) of the TUI AG Charter

6. Resolution of the granting of a new authorisation to issue convertible bonds, bonds with warrants, profit-sharing rights and/or income bonds (or combi-nations of these instruments) with the option to exclude subscription rights, inter alia pursuant to sections 221(4) and 186(3) sentence 4 AktG and creation of new conditional capital, cancelling the conditional capital as set out in article 4(6) of the TUI AG Charter (amendment to the Charter)

7. Resolution on the new authorisation to acquire and use own shares in accor-dance with section 71(1) no. 8 AktG, with potential exclusion of subscription rights and rights to tender shares and the possibility of redeeming own shares while reducing share capital

8. Resolution on the authorisation regarding the use of equity derivatives for the acquisition of own shares in accordance with section 71(1) no. 8 AktG under exclusion of tender rights

9. Resolution on the appointment of the auditor for the current financial year

10. Election to fill vacancies on the Supervisory Board

Agenda Abbreviated Version

3Item 1-6 Agenda

Agenda of TUI AG’s 2009 Annual General Meeting on 13 May 2009

1. Presentation of the approved annual financial statements as at 31 December 2008, the approved consolidated financial statements, the combined management and Group management report, the report of the Supervisory Board and the explanatory report on the information pursuant to sections 289(4) and 315(4) HGB

2. No resolution on the appropriation of a net profit available for distributionThe Executive Board and the Supervisory Board submit the following balanced net result for the year:

The net loss for the year is € 1,528,644,030.24. Using the profit carried forward of € 24,775,821.65, the sum of € 1,503,868,208.59 was withdrawn from capital reserves to offset the net loss. The Annual General Meeting is thus presented with a balanced net result for the year. No resolution is proposed.

3. Resolution on the ratification of the actions of the Executive Board for the 2008 financial yearThe Supervisory Board and the Executive Board recommend ratification.

4. Resolution on the ratification of the actions of the Supervisory Board for the 2008 financial yearThe Supervisory Board and the Executive Board recommend ratification.

5. Resolution on changing the financial year pursuant to article 2(2) of the TUI AG CharterThe Executive Board and the Supervisory Board propose to amend article 2(2) of the Charter as follows:‘The financial year begins on 1 October and ends on 30 September of the following year; the period from 1 January 2009 to 30 September 2009 will form a short financial year.’

6. Resolution of the granting of a new authorisation to issue convertible bonds, bonds with warrants, profit-sharing rights and/or income bonds (or combinations of these instruments) with the option to exclude sub-scription rights, inter alia pursuant to sections 221(4) and 186(3) sentence 4 AktG and creation of new con-ditional capital, cancelling the conditional capital as set out in article 4(6) of the TUI AG Charter (amend-ment to the Charter)

Under item 9 of the agenda for the Annual General Meeting of 7 May 2008, the Executive Board was authorised, with the consent of the Supervisory Board, to issue convertible bonds, bonds with warrants, profit-sharing rights and/or income bonds (or combinations of these instruments) (hereinafter referred to as ‘bonds’). This authorisation was granted in response to certain court rulings that required a fixed warrant exercise or conversion price to be determined directly by the Annual General Meeting. The company has not used this authorisation to date. In order to retain the necessary flexibility to use this important financing instrument in the current difficult market conditions, it is recommended that the Annual General Meeting pass a resolution on a further authorisation to issue bonds which will take effect in parallel to the existing

authorisation; these bonds will determine other warrant exercise and conversion prices but will in all other respects largely correspond to the existing authorisation. To service the conversion rights and warrants and conversion obligations in the event that the new authori sation exercised, a resolution is furthermore to be passed on the creation of new conditional capital, cancelling the existing conditional capital provided for in article 4(6) of the Charter.

This new authorisation should not dilute existing shareholdings more than was previously the case. For this reason, the company will issue bonds with a total par value of no more than € 1,000,000,000.00 under the two authorisations that would then exist. The new conditional capital, which is to be used to fulfil

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4 Agenda Item 6

conversion rights, warrants or conversion obligations, shall be € 100,000,000.00; in the event of an exclusion of subscription rights pursuant to section 186(3) sentence 4 AktG, however, the shares to be issued to service conversion rights or warrants or conversion obligations must not exceed 10% of the share capital either as per the date on which the following authori-sation takes effect or as per the date on which this authorisation is exercised, if this value is lower.

The Executive Board and the Supervisory Board recommend that the following resolution be passed:

a) Authorisation to issue convertible bonds, bonds with warrants, profit-sharing rights and/or income bonds (or combinations of these instruments)

aa) Par value, authorisation period, number of shares, term

The Executive Board is authorised, with the consent of the Supervisory Board, to issue bearer or registered convertible bonds, bonds with warrants, profit-sharing rights or income bonds (or combinations of these instruments) (hereinafter collectively referred to as ‘bonds’) until 12 May 2014 once or several times with a total par value of up to € 1,000,000,000.00 and to grant the holders or creditors (hereinafter collectively referred to as ‘holders’) of such bonds conversion rights or warrants on company shares representing a pro-rata amount of the share capital of no more than € 100,000,000.00 as described in more detail in the conditions of the convertible bonds or bonds with war-rants or the conditions of the bonds. Par values of bonds which were issued on the basis of the authorisation by the Annual General Meeting of 7 May 2008 (agenda item 9) must be taken into account when calculating this total par value of up to € 1,000,000,000.00, so that this total amount of up to € 1,000,000,000.00 can only be utilised once. Bonds, conversion rights, warrants and conversion obligations may be issued with or without a fixed term. The bonds may also be issued in return for non-cash contributions.

Besides euros, the bonds may also be issued in the legal tender of any OECD country – limited to the corresponding euro equivalent value. Further, issue may be made by subordinated Group companies; in this case the Executive Board is authorised, with the consent of the Supervisory Board, to assume for the company the guarantee for the bonds and to grant to the holders of such bonds conversion rights or warrants on shares of the company.

bb) Granting or excluding subscription rights

The shareholders are generally entitled to a subscription right on the bonds. The bonds may also be acquired by one or several credit institutions with the obligation to offer them to the shareholders for subscription. How-ever, the Executive Board is authorised, with the con-sent of the Supervisory Board, to exclude subscription rights for the bonds:

■ with regard to fractions;

■ insofar as it is necessary to grant subscription rights to holders of previously issued conversion rights or warrants on shares of the company or to holders of bonds with conversion obligations to the extent that they would be entitled to such subscription rights as shareholders after exercising these rights or fulfilling a conversion obligation;

■ to the extent that bonds with conversion rights, war-rants or conversion obligations are issued in return for cash payment and the issue price is not substantially lower than the theoretical market value of the bonds calculated using generally accepted financial calculation principles; however, this only applies insofar as the shares to be issued to service the conversion rights and/or warrants or the conversion obligations consti-tuted by such bonds do not exceed a total of 10% of the share capital existing at the time this authorisation takes effect or at the time this authorisation is exer-cised, whichever is lower. The sale of own shares must be taken into account when calculating this limit, provided that such sale takes place during the term of this authorisation up to the time of its being exercised under exclusion of subscription rights pursuant to section 186(3) sentence 4 AktG. Further, shares issued from authorised capital under exclusion of subscription rights pursuant to section 186(3) sentence 4 AktG and shares issued or to be issued pursuant to sections 221(4) and 186(3) sentence 4 AktG under bonds with conversion rights, warrants or conversion obligations issued during the term of this authorisation up to the time of its being exercised must also be taken into account when calculating this limit;

■ insofar as they are issued in return for non-cash contributions, provided that the value of such non-cash contributions is in reasonable proportion to the market value of the bonds to be determined as per the preceding bullet point.

5Item 6 Agenda

Where profit-sharing rights or income bonds without a conversion right, warrant or conversion obligation are issued, the Executive Board is authorised, with the consent of the Supervisory Board, to fully exclude the subscription rights of shareholders if these profit-sharing rights or income bonds have the characteristics of a debenture, i.e. they do not represent any member-ship rights in the company or grant a share in the liquidation proceeds and the interest payable is not calculated on the basis of the amount of net profit for the year, net profit available for distribution or the dividend. Further, in this case the interest structure and issue amount of the profit-sharing rights or income bonds must reflect the current market conditions for comparable financing instruments at the time of issue.

cc) Conversion right, conversion obligation

Where bonds with conversion rights are issued, holders may convert their bonds into company shares in accordance with the bond terms. The proportional amount of the share capital represented by the shares to be issued on conversion must not exceed the par value of the bond or the issue price, if lower. The con-version ratio is calculated by dividing the par value of a bond by the specified conversion price for a share of the company. The conversion ratio may also be calculated by dividing the issue price of a bond, if lower than the par value, by the specified conversion price for a new share of the company. An additional cash payment may also be specified. Further, it is possible to specify that fractions are grouped and/or compen-sated in cash.

The bond terms may also provide for a conversion obligation.

dd) Warrants

Where bonds with warrants are issued, one or more warrants are attached to each bond that entitle the holder to purchase company shares in accordance with the warrant terms to be specified by the Executive Board. Provision may be made for fractions to be grouped and/or compensated in cash. The proportional amount of the share capital represented by the shares to be subscribed per bond must not exceed the par value of the bond with warrants or the issue price, if lower than the par value. The same applies if warrants are attached to a profit-sharing right or an income bond.

ee) Conversion or warrant exercise price, anti-dilution protection

Where bonds are issued that grant a conversion right or warrant, the conversion or warrant exercise price is either – if subscription rights are excluded – 120% of the volume-weighted average price of the company shares in Xetra trading on the Frankfurt Stock Exchange (or a comparable successor system) in the period between the start of institutional placement (book building) and the determination of the issue amount of the bonds or – if subscription rights are granted – 120 % of the volume-weighted average price of the company shares in Xetra trading on the Frankfurt Stock Exchange (or a comparable successor system) in the period from the beginning of the subscription period to (and including) the day before announcement of the final terms in accordance with section 186(2) sentence 2 AktG. If subscription rights are excluded and there is no placement with institutional investors before the price is determined, the conversion or warrant exercise price will be 120% of the volume-weighted average price of the company shares in Xetra trading on the Frankfurt Stock Exchange (or a comparable successor system) on the five trading days before the day on which the price is determined. The volume-weighted average price of the shares during the relevant reference period is hereinafter referred to as the ‘reference price’.

Where bonds that provide for a conversion obligation are issued, the conversion price shall correspond to the following amount:

■ 100% of the reference price if the arithmetic mean of the closing prices of the company shares in Xetra trading on the Frankfurt Stock Exchange (or a com-parable successor system) during the twenty stock exchange trading days ending on the third trading day before the day of conversion is lower than or equal to the reference price;

■ 115% of the reference price if the arithmetic mean of the closing prices of the company shares in Xetra trading on the Frankfurt Stock Exchange (or a com-parable successor system) during the twenty stock exchange trading days ending on the third trading day before the day of conversion is greater than or equal to 115% of the reference price;

■ the arithmetic mean of the closing prices of the company shares in Xetra trading on the Frankfurt Stock Exchange (or a comparable successor system)

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during the twenty stock exchange trading days ending on the third trading day before the day of conversion if this value is greater than the reference price and lower than 115 % of the reference price;

■ the above provisions notwithstanding, 115 % of the reference price if the holders of the bonds exercise an existing conversion right before the conversion obliga-tion comes into effect;

■ the above provisions notwithstanding, 100 % of the reference price if the Executive Board, with the consent of the Supervisory Board and in compliance with the bond terms, effects early conversion in order to avert immediate severe damage to the company or to avoid the substantial downgrading of a public credit rating assigned to the company by a recognised rating agency.

If, during the term of bonds that grant or stipulate a conversion right, conversion obligation and/or warrant, the economic value of the existing conversion rights or warrants is diluted and no subscription rights are granted as compensation, the conversion rights or warrants shall be adjusted to preserve their value with out prejudice to section 9(1) AktG, insofar as the adjustment is not prescribed by law. In any case, the proportional amount of the share capital represented by the shares to be subscribed per bond must not exceed the par value per bond or its issue price, if lower.

ff) Further possible structures

The terms of bonds that grant or stipulate a conver-sion right, conversion obligation and/or warrant may specify that, if the conversion right or warrant is exer-cised, new shares from authorised capital, own shares of the company or existing shares of another listed company may also be granted. Such terms may also specify that the company will not grant shares to the party entitled to conversion rights or warrants but will instead pay the equivalent amount in cash.

gg) Authorisation to define further terms for the bonds

The Executive Board is authorised, with the consent of the Supervisory Board, to stipulate further details with regard to the issue and structure of the bonds, in particular the interest rate, interest payment structure, issue price, term, denomination and conversion or option period. Where bonds are issued by Group companies, the Executive Board must also come to

an agreement with the boards of the Group companies issuing the bonds.

b) Cancellation of the conditional capital pursuant to article 4(6) of the company’s Charter

The conditional capital increase resolved by the Annual General Meeting on 18 June 2003 (agenda item 7) and contained in article 4(6) of the company’s Charter is cancelled.

c) Creation of new conditional capital

The share capital is conditionally increased by up to € 100,000,000.00 (in words: one hundred million euros) by issuing up to 39,116,600 new registered shares carrying dividend rights from the beginning of the financial year of their issue. The conditional capital increase serves to allow shares to be granted to the holders or creditors of convertible bonds, bonds with warrants, profit-sharing rights and/or income bonds (or combinations of these instruments) with conver-sion rights, warrants or conversion obligations that are issued in accordance with the above authorisation, insofar as these were issued against cash.

The new shares will be issued at the conversion or warrant exercise price specified in the above authori-sation. The conditional increase of the share capital may only be implemented insofar as conversion rights or warrants from bonds issued for cash are exercised, or conversion obligations arising from such bonds are fulfilled, and provided that no other means are used for servicing the bonds.

The Executive Board is authorised, with the consent of the Supervisory Board, to define the further details concerning the implementation of the conditional capital increase.

d) Amendment to the Charter

Article 4(6) of the company’s Charter shall be reworded as follows: ‘The share capital is conditionally increased by up to € 100,000,000.00 (in words: one hundred million euros) by issuing up to 39,116,600 new registered shares carrying dividend rights from the beginning of the financial year of their issue (conditional capital 2009). The conditional capital increase shall be effected only to the extent that holders or creditors of con-vertible bonds, bonds with warrants, profit-sharing rights and/or income bonds (or combinations of these

7Item 6-7 Agenda

instruments) with conversion rights, warrants or con-version obligations issued by TUI AG or its Group companies before 12 May 2014 for cash on the basis of the authorisation resolution of the Annual General Meeting of 13 May 2009 exercise their conversion rights or warrants or insofar as conversion obligations

from such bonds are fulfilled, and provided that no other means are used for servicing such bonds. The Executive Board is authorised, with the consent of the Supervisory Board, to define the further details con-cerning the implementation of the conditional capital increase.’

7. Resolution on the new authorisation to acquire and use own shares in accordance with section 71(1) no. 8 AktG, with potential exclusion of subscription rights and rights to tender shares and the possibility of redeeming own shares while reducing share capital

In order to acquire own shares, the company requires a special authorisation from the Annual General Meeting, insofar as this is not expressly permitted by law. Since the authorisation granted by the Annual General Meeting on 7 May 2008 will lapse on 6 November 2009, it should be proposed to the Annual General Meeting that it once again grant the company an authorisation to acquire own shares and that the existing authorisation be cancelled early.

The Executive Board and the Supervisory Board thus recommend that the following decision be taken:

a) The Executive Board is authorised to acquire own shares representing up to a maximum of 10% of the share capital. Together with the other own shares held by the company or attributable to the company in accordance with sections 71 a ff. AktG, the acquired shares must at no time exceed 10% of the share capital. The authorisation must not be used for the purposes of trading in own shares.

b) The authorisation may be used in whole or in part, once or several times, and in pursuit of one or several goals. The acquisition may be effected by the company, by dependent companies or companies that are majority-owned by the company, or by third parties acting for their account or for the account of the company. The authorisation remains valid up to and including 12 November 2010. This authorisation replaces the authorisation to acquire own shares agreed upon by the Annual General Meeting of TUI AG on 7 May 2008, which will be cancelled once the new authorisation comes into effect.

c) The acquisition will be effected, depending on the preference of the Executive Board, either via the stock exchange or via a public offer to buy or a public solici-tation to shareholders to submit an offer to sell.

■ If the shares are acquired via the stock exchange, the equivalent value paid by the company per share

(not including incidental acquisition costs) must not exceed or fall below the market value determined on the respective stock exchange trading day during the opening auction in the Xetra trading system of Deutsche Börse AG (or a comparable successor system) by more than 5%.

■ If the acquisition is effected via a public offer to buy or a public solicitation to shareholders to submit an offer to sell, the purchase price offered or the upper and lower limits of the purchase price range per share (not including incidental acquisition costs) must not exceed or fall below the unweighted average closing price in the Xetra trading system of Deutsche Börse AG (or a comparable successor system) on the three stock exchange trading days prior to the day of the public announcement of the offer or the public solicitation to submit an offer to sell by more than 10%. If, follow-ing the announcement of a public offer to buy or a public solicitation to submit an offer to sell, there are significant variations in the relevant price, the offer or the solicitation to submit an offer to sell may be adjusted. In this case, the average price during the three stock exchange trading days prior to the public announcement of any such adjustment is used. The offer to buy or the solicitation to submit an offer to sell may contain further conditions. If the offer to buy is oversubscribed or if, in the case of a solicitation to submit an offer to sell, several equal offers are received not all of which can be accepted, acquisition must take place in accordance with the ratio of shares tendered on equal terms (tender ratio). Any further tender right of shareholders is excluded in this respect. Preference may be given to accepting small quantities of up to 100 tendered shares per shareholder, and rounding may be performed in line with common business practice in order to avoid fractions of shares. In this respect, too, any further tender rights of shareholders are excluded.

■ Insofar as own shares are acquired using equity derivatives in accordance with an authorisation

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resolved under item 8 of the agenda for the Annual General Meeting of 13 May 2009, shareholders have a right to tender their shares only insofar as the company, dependent companies or companies that are majority-owned by the company, or any third parties acting for their account or for the account of the company are obliged to purchase the shares under the relevant option transactions. In this respect, too, any further tender rights on the part of shareholders are excluded.

d) Company shares acquired on the basis of this authorisation may be sold via the stock exchange or by offering them to shareholders, provided that the principle of equal treatment is complied with. In addi-tion, the Executive Board is authorised to use company shares acquired on the basis of this authorisation for the following purposes:

■ With the consent of the Supervisory Board, the shares may be redeemed without such redemption or its execution requiring any further resolution of the Annual General Meeting. They may also be redeemed without capital reduction by adjusting the computed portion of the company's share capital represented by the remaining shares. The redemption may be restricted to a portion of the shares acquired. If redemption takes place without a capital reduction being effected, the Executive Board is authorised to adjust the number of shares stated in the Charter.

■ With the consent of the Supervisory Board, the shares may also be sold by means other than via the stock exchange or via an offer to shareholders, if the shares are sold for cash at a price that is not significantly lower than the market price for shares of the company issued on the same terms prevailing at the time of the sale. In this case, the number of shares that are to be sold, together with new shares issued or sold on the basis of authorisations to increase capital or sell own shares that are exercised during the term of this authorisation under exclusion of subscription rights in accordance with section 186(3) sentence 4 AktG or new shares issued or to be issued under bonds with conversion rights, warrants or conversion obligations

issued in accordance with section 221(4) and section 186(3) sentence 4 AktG during the term of this authori-sation up until the time of its exercise must not exceed the limit of 10% of the share capital existing at the time the resolution on this authorisation is passed by the Annual General Meeting or at the time this authorisation is exercised, whichever is lower.

■ With the consent of the Supervisory Board, the shares may also be sold for non-cash contributions in connection with the acquisition of companies, parts of companies, shareholdings or other assets, and in the context of mergers.

■ The shares may also be used to fulfil conversion rights, warrants or conversion obligations under convertible bonds, bonds with warrants, profit-sharing rights and/or income bonds (or combinations of these instruments) which were issued by the company or by Group com-panies and provide for conversion rights, warrants or conversion obligations.

e) The authorisation under d), bullet points 2 to 4 also applies to the use of company shares acquired on the basis of section 71d sentence 5 AktG.

f) The authorisations under d) may be exercised once or several times, in full or in part, and individually or together, while the authorisations under d), bullet points 2 to 4 may additionally be exercised by dependent companies or companies that are majority-owned by the company, or by third parties acting for their account or for the account of the company.

g) The subscription rights of shareholders relating to own shares are excluded insofar as these shares are used in accordance with the above-mentioned author-isations under d), bullet points 2 to 4. In the event that the own shares are sold by way of an offer to shareholders, the Executive Board is authorised, with the consent of the Supervisory Board, to exclude the shareholders' subscription rights with regard to fractional amounts.

9Item 8 Agenda

8. Resolution on the authorisation regarding the use of equity derivatives for the acquisition of own shares in accordance with section 71(1) no. 8 AktG under exclusion of tender rights

It may be advantageous for the company to repurchase own shares using equity derivatives. In addition to the authorisation to acquire own shares in accordance with section 71(1) no. 8 AktG as proposed under item 7 of the agenda, the Executive Board is to be expressly authorised to use equity derivatives in the form of put options, call options or a combination of both in the context of this acquisition. In this connection, the use of equity derivatives is to be limited to acquisitions of shares representing up to 5% of the share capital and subjected to additional requirements.

The Executive Board and the Supervisory Board thus recommend that the following decision be taken:

a) Own shares may also be acquired by the company, by dependent companies or companies that are majority-owned by the company, or by third parties acting for their account or for the account of the company on the basis of the authorisation resolved by the Annual General Meeting on 13 May 2009 (item 7 of the agenda) using equity derivatives in the form of put options or call options or a combination of put and call options on the company’s shares as specified in more detail in b) to e). However, the volume of shares that may be acquired in this manner is limited to 5% of the share capital. The use of equity derivatives to acquire own shares requires the consent of the Supervisory Board. Such consent may also be granted on a general basis or for a specific period of time or a specific volume.

b) Put options, call options or a combination of both must be concluded with a credit institution or other company meeting the requirements set out in section 186(5) sentence 1 AktG (hereinafter referred to collectively as ‘credit institution’) at near-market con-ditions and subject to the proviso that the relevant credit institution, when exercising the options, may only deliver shares previously acquired by it via the stock exchange at the price prevailing in the Xetra trading system of Deutsche Börse AG (or a comparable successor system) at the time of acquisition via the stock exchange. The acquisition price paid for options by the company, by dependent companies or companies that are majority-owned by the company, or by third parties acting for their account or for the account of the company (the option premium paid) may not be substantially higher,and the sales price for options received by the company, by dependent companies or

companies that are majority-owned by the company, or by third parties acting for their account or for the account of the company (the option premium received) must not be substantially lower, than the market value of the relevant options, calculated using generally accepted financial calculation principles; when calculat-ing this market value, the agreed exercise price is to be taken into account besides other factors.

c) The equivalent value per share (not including incidental acquisition costs) to be paid by the company when an option is exercised (exercise price) must not – either with or without taking into account the option premium paid or received – exceed or fall below the price of the share determined during the opening auc-tion in the Xetra trading system of Deutsche Börse AG (or a comparable successor system) on the day on which the transaction was concluded by more than 5%.

d) The term of the put options must not exceed one year, and the latest possible exercise date for such options must be selected such as to ensure that the shares will be delivered before 13 November 2010. Subject to a further authorisation by a subsequent Annual General Meeting, call options may only be exercised up to a date which ensures that the shares will be delivered before 13 November 2010.

e) If put options, call options or a combination of both are used to acquire own shares, shareholders will not be entitled to demand that the company, dependent companies or companies that are majority-owned by the company, or third parties acting for their account or for the account of the company conclude option transactions of this kind with them. Where the com-pany acquires own shares using options for this pur-pose, shareholders have a right to tender their shares only insofar as the company, dependent companies or companies that are majority-owned by the company, or third parties acting for their account or for the account of the company are obliged to purchase the shares under these option transactions. Any further rights to tender shares are excluded.

f) With regard to the use of own shares acquired using equity derivatives, the provisions set out in d) to g) of the authorisation granted under item 7 of the agenda for the Annual General Meeting of 13 May 2009 shall apply.

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9. Resolution on the appointment of the auditor for the current financial year The Supervisory Board recommends appointing Price-waterhouseCoopers Aktiengesellschaft Wirtschafts-prüfungsgesellschaft, Hanover, as the auditor for the

financial year starting on 1 January 2009, and also for the review of the financial report as at 30 June 2009.

10. Election to fill vacancies on the Supervisory BoardOf the Supervisory Board members elected by the Annual General Meeting on 10 May 2006, Mr Jean-Claude Baumgarten and Mr Sepp D. Heckmann have resigned their seats on the Supervisory Board with effect as of the end of this Annual General Meeting.

For the remaining term of office of the Supervisory Board, i.e. until the end of the fifth Annual General Meeting following the election in 2006, that is pre-sumably until 2011, the Annual General Meeting must hold a new election to replace the retiring shareholder representatives on the Supervisory Board.

In accordance with article 11(1) of the Charter as amended on 19 November 2008 and sections 96(1) and 101(1) AktG in conjunction with section 7(1) sentence 1 no. 3 MitbestG 1976, the Supervisory Board comprises ten shareholder representatives and ten employee representatives. In electing the shareholder representatives, the Annual General Meeting is not tied to election proposals.

The Supervisory Board proposes that the Annual General Meeting elect the following persons in an election to fill the vacancies on the Supervisory Board in accordance with article 11(3) of the Charter:

■ Mr Mustapha Bakkoury, Rabat, Morocco Managing Director of Caisse de Dépot et de Gestion (CDG), Rabat, Morocco

■ Dr Peter Barrenstein, Ottobrunn, Munich independent member of the Supervisory Board

At the time of joining the Supervisory Board, the gentlemen standing for election hold the following mandates (a) on Supervisory Boards to be formed by law or b) on comparable domestic and foreign supervisory committees of commercial enterprises) as defined in section 125(1) sentence 3 AktG:

■ Mr Mustapha Bakkoury a) – b) Club Méditerranée, Paris

■ Dr Peter Barrenstein a) WMF Württembergische Metallwarenfabrik

Aktiengesellschaft, Geislingen an der Steige b) –

11Re Item 6-8 Agenda

The authorisations proposed in items 6 and 7 of the agenda inter alia provide for the possibility of issuing bonds or selling acquired own shares, in each case under utilisation of the provisions of section 186(3) sentence 4 AktG, and in this context permit an exclusion of shareholders’ subscription rights, insofar as the applicable legal limit of 10% of the share capital – in total – is not exceeded. The authorisation proposed in item 8 of the agenda clarifies that, with regard to own shares that are acquired using equity derivatives, the usage options provided for in the authorisation pro-posed in agenda item 7 apply, i.e. that the sale of shares thus acquired may also be effected in the way described above.

The Executive Board will, with the consent of the Super-visory Board, only exercise any such authorisations to the extent that, overall, the limit of 10% of the share capital existing on the date of the resolution by the Annual General Meeting regarding the authorisations (i.e. on 13 May 2009), as specified in section 186(3) sentence 4 AktG, is adhered to throughout the term of the respective authorisation until such time as it is

exercised. If the share capital existing at the time the respective authorisation is exercised is less than on 13 May 2009, the lower share capital amount shall apply. Irrespective of whether the authorisations providing the possibility of excluding subscription rights are exercised individually or cumulatively, the limit of 10% of the share capital set with regard to the exclusion of subscription rights in accordance with the provisions of section 186(3) sentence 4 AktG should not be exceeded. The various proposed authorisations offer-ing the possibility of excluding subscription rights in accordance with section 186(3) sentence 4 AktG, or by applying this provision by analogy or mutandis, have the sole purpose of enabling the Executive Board to select the most suitable instrument in a specific situa-tion – taking into consideration the interests of the shareholders and the company – but not of excluding shareholders' subscription rights above the limit of 10% of the share capital specified in section 186(3) sentence 4 AktG by making multiple use of the various possibilities for excluding subscription rights under the proposed authorisations.

Report of the Executive Board to the Annual General Meeting on the exclusion of subscription and tender rights in accordance with sections 186(4) sentence 2, 203(2) sentence 2, 221(4) sentence 2 and section 71(1) no. 8 sentence 5 AktG, as provided for in items 6, 7 and 8 of the agenda

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The authorisation of the Executive Board of 7 May 2008 to issue convertible bonds, bonds with warrants, profit-sharing rights and/or income bonds (or a combination of these instruments) (hereinafter referred to as ‘bonds’) with the consent of the Supervisory Board, was granted in response to certain court rulings that required a fixed warrant exercise or conversion price to be determined directly by the Annual General Meeting. A definitive ruling on this legal question has not yet been provided by the Bundesgerichtshof (German Supreme Court). The narrow determination of the warrant exercise or conversion price directly by the Annual General Meeting limits the company’s ability to place bonds in a way that enables it to secure the best possible overall financing terms. In order to retain the necessary flexibility to use this important financing instrument in the current difficult market conditions, a resolution is therefore to be passed, granting a further authorisation relating to a total par value of up to € 1,000,000,000.00, which will take effect in parallel to the existing authorisation and which will determine other warrant exercise or conversion prices. By granting a further authorisation with other warrant exercise or conversion prices, the company will be in a position, at the time of issuing the bonds, to select the authorisation with the terms that are best suited to the market conditions prevailing at the time, and thereby to achieve better financing terms, which will benefit the company and its share-holders. In all other respects, this new authorisation largely corresponds to the authorisation granted in 2008. The amount of the new conditional capital to be created following the cancellation of the existing conditional capital provided for in article 4(6) of the Charter for the purpose of servicing conversion rights or warrants resulting from the authorisation is to be € 100,000,000.00. The new authorisation should not dilute existing shareholdings more than was previously the case. For this reason, the company will issue bonds with a total par value of no more than € 1,000,000,000.00 under the two authorisations that would then exist.

In addition to the traditional possibilities for raising debt and equity capital, the issue of bonds enables TUI AG to take advantage of attractive financing alter-natives on the equity market, depending on the respective market situation, and thereby to create favourable conditions for future business development. The granting of conversion rights or warrants opens

up the additional possibility for the company to retain part of the funds that it raises through the issue of bonds as equity.

The issue of bonds additionally allows debt capital to be raised on attractive terms, which, depending on the bond terms, can be categorised, both for rating purposes and for balance-sheet purposes, as equity or equity equivalent. The conversion or option premiums obtained and the categorisation as equity benefit the company’s equity base and thus allow the company to take advantage of favourable financing opportunities. Further opportunities, in addition to the granting of conversion rights and/or warrants, to create conversion obligations or to combine convertible bonds, bonds with warrants, profit-sharing rights and/or income bonds, extend the possibilities available in terms of structuring these financing instruments. In view of the fact that, in the field of so-called hybrid financing instruments, forms of financing with an unlimited term are now also common, the authorisation does not place a limit on the term for issuing bonds with conversion rights or warrants. The authorisation additionally gives the company the flexibility to place the bonds either itself or via direct or indirect investment companies. Besides euros, bonds may also be issued in the legal tender of any OECD country.

In order to allow the range of possible capital market instruments with conversion rights or warrants to be used accordingly, it appears appropriate to again set the permissible issue volume in the proposed new authorisation, which will exist in parallel with the reso-lution adopted in 2008 but determine different war-rant exercise and conversion prices, at an aggregate par amount of € 1,000,000,000.00, as in the authori-sation resolved in 2008, and to again set the conditional capital that serves to fulfil the conversion rights and warrants at € 100,000,000.00. This ensures that full use can be made of the scope of the authorisation. The number of shares necessary for fulfilment of con-version rights and warrants from a bond with a specific issue volume generally depends on the market price of the TUI share at the time the bond is issued. If conditional capital is available in sufficient quantity, the possibility of making full use of the scope of the authorisation for the issue of convertible bonds or bonds with warrants is assured.

Re Item 6 of the agenda(Granting of a new authorisation to issue convertible bonds, bonds with warrants, profit-sharing rights and/or income bonds (or combinations of these instruments))

13Re Item 6 Agenda

Shareholders must generally be granted subscription rights when convertible bonds and bonds with warrants, profit-sharing rights and income bonds are issued.

If convertible bonds and/or bonds with warrants (or profit-sharing rights or income bonds) with conversion rights, warrants or conversion obligations are to be issued, the Executive Board should be authorised to exclude the subscription rights with the consent of the Supervisory Board by applying section 186(3) sentence 4 AktG by analogy if the issue price of the bonds is not significantly lower than their market value. This can be advantageous in terms of reacting quickly to favourable stock market situations, and quickly and flexibly placing a bond on the market on attractive terms. The stock and money markets have recently become considerably more volatile. In order to achieve the best possible issue result, it is thus becoming ever more important to be in a position to react quickly to market developments. It is generally only possible to define favourable terms that are as close to the mar-ket as possible if the company is not tied to them for an excessively long offering period. In the case of rights issues, a significant haircut is generally necessary in order to ensure the attractiveness of the terms and thus the chances of success of the issue throughout the entire offering period. Section 186(2) AktG does permit publication of the subscription price (and thus, in the case of bonds with conversion rights or warrants, the terms of the bond) up to the third day before the end of the subscription period. However, the volatility of the stock and money markets means that a market risk nonetheless exists for a period of several days, resulting in haircuts when the bond terms are being defined, which in turn causes the terms to deviate considerably from the market. Furthermore, where subscription rights are granted, alternative placement with third parties is made more difficult and/or costly due to the uncertainty associated with the exercise of such rights (subscription behaviour). Ultimately, where subscription rights are granted, the company cannot react quickly to changes in the market conditions due to the length of the subscription period, which can lead to an unfavourable situation for the company in terms of raising capital.

The interests of shareholders are protected by the fact that the bonds are not issued significantly below their market value. The market value must be determined according to generally accepted financial calculation principles. In determining the price, the Executive Board will keep the discount from the market value as low as

possible, while taking into account the current situation on the capital market. Thus the computed value of a subscription right will be practically zero, which means that shareholders can suffer no significant financial disadvantage as a result of the exclusion of subscription rights. Insofar as the Executive Board deems necessary in view of the respective situation, the Executive Board will obtain specialist advice in this respect, and will also draw on expert support, which may be provided by the underwriters of the issue or an independent investment bank or auditing firm. All of this ensures that significant dilution of the value of the company’s shares as a result of the exclusion of subscription rights is prevented. Shareholders also have the possi-bility of maintaining their stake in the company's share capital on almost the same terms by means of purchase via the stock exchange. In this way, their financial interests are adequately protected.

The authorisation to exclude subscription rights in accordance with section 186(3) sentence 4 AktG applies only for bonds with rights to shares representing no more than 10% in total of the share capital existing at the time this authorisation comes into effect or at the time it is utilised, whichever is the lower. Any own shares sold must be taken into account when calculating this limit, provided that the sale takes place under exclusion of subscription rights in accordance with section 186(3) sentence 4 AktG during the term of the authorisation and up to the time it is exercised. Further, shares issued or to be issued out of authorised capital under exclusion of subscription rights pursuant to section 186(3) sentence 4 AktG during the term of the authori-sation and up to the time it is exercised and shares issued or to be issued in accordance with sections 221(4) and 186(3) sentence 4 AktG under bonds with conversion rights, warrants or conversion obligations issued during the term of this authorisation up to the time it is exercised must also be taken into account when calculating this limit. This inclusion is in the interests of shareholders, as it serves to minimise the dilution of their shareholdings.

Where profit-sharing rights or income bonds without conversion rights, warrants or conversion obligations are to be issued, the Executive Board is authorised, with the consent of the Supervisory Board, to fully exclude the subscription rights of shareholders if these profit-sharing rights or income bonds have the characteristics of a debenture, i.e. if they do not represent any membership rights in the company or grant a share in the liquidation proceeds and the

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interest payable is not calculated on the basis of the amount of net profit for the year, net profit available for distribution or the dividend. Furthermore, the interest structure and issue amount of the profit-sharing rights or income bonds must reflect the current market conditions for comparable financing instruments at the time of issue. If the specified conditions are met, the exclusion of subscription rights will not result in any disadvantage for shareholders because the profit-sharing rights or income bonds do not represent any membership rights or grant a share in the liquidation proceeds or in company profits. Although it may be specified that interest should be conditional upon the existence of net profit for the year, profit available for distribution or a dividend, it would not be permissible to provide for interest to increase with a higher net annual profit, a higher profit available for distribution or a higher dividend. Thus, the issue of profit-sharing rights or income bonds does not change or dilute the shareholders' voting rights or their share in the com-pany or its profit. Furthermore, the close-to-market issue terms that are mandatory for this kind of exclu-sion of subscription rights means that no material value is attributed to the subscription rights.

The above possibilities for excluding subscription rights give the company the flexibility to take advantage of favourable capital market situations quickly and put it in a position to respond flexibly and at short notice to secure a low level of interest and/or a favourable demand situation for an issue. Where bonds granting a conversion right or warrant are issued under exclusion of subscription rights, the conversion or warrant exer-cise price for a share will be 120% of the volume-weighted average price of TUI shares in Xetra trading on the Frankfurt Stock Exchange (or a comparable successor system) in the period between the start of institutional placement (book building) and the deter-mination of the issue amount of the bonds. If bonds are issued with subscription rights, the conversion or warrant exercise price for a share is calculated on the basis of the volume-weighted average price of the company shares in Xetra trading on the Frankfurt Stock Exchange (or a comparable successor system) during the period from the start of the subscription period to and including the day before announcement of the final terms in accordance with section 186(2) sentence 2 AktG. If subscription rights are excluded and there is no placement with institutional investors before the price is determined, the conversion or war-rant exercise price will be 120% of the volume-weighted average price of the company shares in Xetra trading

on the Frankfurt Stock Exchange (or a comparable successor system) on the five trading days before the day on which the price is determined. The volume-weighted average price of the shares during the relevant reference period is hereinafter referred to as the ‘reference price’. If a conversion obligation is applicable, the conversion price will be between 100% and 115% of the reference price, depending on the arithmetic mean of the closing prices of the shares during the twenty stock exchange trading days ending on the third trading day before the day of conversion, 115% of the reference price if the holders of the bonds exercise an existing conversion right before the con-version obligation comes into effect, and 100% of the reference price if the Executive Board, with the consent of the Supervisory Board and in compliance with the terms of the bonds, effects early conversion in order to avert immediate severe damage to the company or to avoid the substantial downgrading of a public credit rating assigned to the company by a recognised rating agency.

In contrast to an issue of bonds with subscription rights, there are significant advantages to be gained as a result of the absence of the lead-up time associated with the subscription rights both in terms of financing costs and in view of the placement risk. In the case of a placement without subscription rights, the haircut, the placement risk and the cost of financing can all be reduced, to the benefit of the company and its share-holders.

The Executive Board is further authorised, with the consent of the Supervisory Board, to exempt fractions from shareholders’ subscription rights. Fractions of this kind can arise as a result of the issue volume and in connection with the need for a practicable subscription ratio. In this case, the exclusion of subscription rights facilitates processing of the corporate action.

Furthermore, the Executive Board should be given the possibility to exclude shareholders' subscription rights, with the consent of the Supervisory Board, in order to grant subscription rights to the holders of conversion rights or warrants or of bonds with conversion obliga-tions to the extent that they would be entitled to such subscription rights after exercising their conversion rights or warrants or after fulfilling a conversion obligation. This allows for the possibility of granting subscription rights to holders of conversion rights or warrants existing at that time as protection against dilution, instead of offering a reduction in the conversion or

15Re Item 6 Agenda

warrant exercise price. It is standard market practice to equip bonds with anti-dilution protection.

Bonds can also be issued against non-cash contributions, insofar as this is in the interest of the company. In such cases, the Executive Board is authorised, with the consent of the Supervisory Board, to exclude shareholders’ subscription rights, insofar as the value of the non-cash contributions is in reasonable propor-tion to the theoretical market value of the bond, which should be determined according to generally accepted financial calculation principles. This opens up the pos-sibility of using bonds as acquisition currency in relevant situations, for example for the acquisition of companies, parts of companies, shareholdings or other assets (e.g. hotels, ships or aircraft). In negotiations, it is quite possible that the need will arise to provide consideration not in cash but in another form. The possibility of offer-ing bonds as consideration thus creates a competitive advantage for the company in terms of attractive potential acquisitions, and also creates the necessary scope for the company to take advantage of opportu-nities in terms of acquiring companies, parts of com-panies, shareholdings or other assets while protecting liquidity. This can also make sense from the point of view of ensuring an optimum financing structure. The Executive Board will in each case check carefully whether to make use of its authorisation to issue con-

vertible bonds and/or bonds with warrants (or profit-sharing rights or income bonds with conversion rights, warrants and/or conversion obligations) against non-cash contributions under exclusion of subscription rights. It will only do this if this is in the interests of the company and thus of its shareholders.

The proposed new conditional capital is to be used to service the conversion rights or warrants issued with the convertible bonds or bonds with warrants, profit-sharing rights or income bonds, or to meet conversion obligations on company shares, insofar as the bonds were issued for cash. Other alternative means can also be used to service the bonds.

Conversion rights or warrants under bonds that were issued for non-cash contributions can, however, not be serviced from conditional capital. For this purpose, the company must either use own shares or effect a capital increase through non-cash contributions. Authorised capital from 10 May 2006 is available to facilitate a capital increase through non-cash contri-butions. The non-cash contribution should be effected by presenting the claim under the bond, in which case the impairment test should include an assessment of whether the claim is valid and whether the value of the non-cash contribution effected in order to constitute this claim corresponded to the issue price.

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The proposal in agenda item 7 concerns an authorisation, restricted to a period of 18 months, to acquire own shares representing up to 10% of the share capital in accordance with section 71(1) no. 8 AktG.

In the Annual General Meeting of 7 May 2008, TUI AG passed an authorisation resolution for the acquisition of own shares, limited to a term ending on 6 November 2009. As this authorisation will lapse in the current financial year, this authorisation resolution should be cancelled once the new authorisation that is to be resolved at this Annual General Meeting comes into effect.

Under the new authorisation, the company should, in addition to the possibility of acquiring own shares via the stock exchange, also have the possibility of acquir-ing own shares by means of a public offer to buy addressed to the shareholders of the company or by means of a public solicitation to shareholders to submit an offer to sell shares. The principle of equal treatment, as specified in German stock corporation law, must be observed irrespective of the manner in which the acquisition is effected. In the case of a public solicitation to submit an offer, the recipients can decide how many shares they would like to offer to the company and – where a price range is specified – at what price. If a public offer to buy is oversubscribed or if, in the case of a solicitation to submit an offer to sell shares, several equal offers are received not all of which can be accepted, acquisition must take place in accordance with the ratio of shares tendered on equal terms (tender ratio). Only where an acquisition is gener-ally made on the basis of tender ratios rather than participation ratios can the acquisition procedure be handled effectively from a technical perspective. It should also be possible for preference to be given to small offers or small parts of offers up to a maximum of 100 shares. This possibility allows to avoid fractions and small, generally uneconomical, residual amounts which would otherwise result from the determination of quotas and thus facilitates technical processing at the same time. Rounding in line with common business practice should be permissible in all cases to avoid fractions of shares. This also simplifies technical hand-ling, as it will ensure that only whole shares have to be dealt with. In all these cases, any further tender rights of the shareholders should be excluded, as it would otherwise be impossible to realise the aforementioned technical benefits. The purchase price offered or the

upper and lower limits of the purchase price range offered per share (not including incidental acquisition costs) must not exceed or fall below the unweighted average closing price in the Xetra trading system of Deutsche Börse AG (or a comparable successor system) on the three stock exchange trading days prior to the day of the public announcement of the offer or the public solicitation to submit an offer to sell by more than 10%. If, following the announcement of a public offer to buy or a public solicitation to submit an offer to sell, there are significant variations in the relevant price, the public offer to buy or the public solicitation to submit an offer to sell may be adjusted and based on the average price during the three stock exchange trading days prior to the public announcement of the adjustment. The offer to buy or the solicitation to submit an offer to sell may contain further conditions.

It should be possible for the acquisition to be effected by the company, by dependent companies or companies that are majority-owned by the company, or by third parties acting for their account or for the account of the company.

Insofar as own shares are acquired using equity deriv-atives in accordance with the authorisation proposed to the Annual General Meeting under item 8 of the agenda, shareholders should only have a right to tender their shares insofar as the company, dependent com-panies or companies that are majority-owned by the company, or third parties acting for their account or for the account of the company are obliged to purchase the shares under the relevant option transactions. Any further tender right should be excluded. With a further tender right, it would not be possible to acquire own shares using equity derivatives. The authorisation to acquire own shares should continue to exist regardless of the possibility to use equity derivatives in connec-tion with this acquisition, which is merely intended to offer an alternative. The Executive Board and the Supervisory Board therefore propose a separate reso-lution under item 8 of the agenda regarding the use of equity derivatives when acquiring own shares. The Executive Board has provided a separate report (report on item 8 of the agenda) on the authorisation proposed under item 8 of the agenda, focusing in particular on the reasons for using equity derivatives in connection with a repurchase of shares and for excluding any tender rights. We hereby refer to this report.

Re Item 7 of the agenda(Authorisation to acquire and use own shares)

17Re Item 7 Agenda

The own shares acquired can be sold via the stock exchange. In this case, shareholders have no subscrip-tion rights. In accordance with section 71(1) no. 8 sentence 4 AktG, the sale of own shares via the stock exchange complies with the principle of equal treatment as defined in section 53 a AktG, as does an acquisition of own shares via the stock exchange. However, the acquired own shares can also be offered for sale to shareholders, provided that the principle of equal treat-ment is complied with. Furthermore, the Executive Board is authorised to sell the acquired own shares in any other way or to redeem them. In detail:

The proposed resolution includes an authorisation of the Executive Board to sell the acquired own shares, with the consent of the Supervisory Board, other than via the stock exchange or via an offer to shareholders for cash. For this to take place, the shares must be sold at a price that is not significantly lower than the market price for shares of the company that are issued on the same terms prevailing at the time of the sale. Through this authorisation, use is made of the possi-bility for simplified exclusion of subscription rights permitted under section 71(1) no. 8 sentence 5 AktG, applying section 186(3) sentence 4 AktG by analogy. Account is taken of the need to protect shareholders against dilution by the fact that the shares may only be sold at a price that is not significantly lower than the relevant market price. The final selling price for the own shares is determined shortly before the sale takes place. The Executive Board will set any discount from the market price as low as possible, taking into account the market conditions at the time of placement. The discount from the market price at the time of exercising the authorisation will in no case be more than 5% of the current market price. The authorisation is valid provided that the shares sold under exclusion of subscription rights in accordance with section 186(3) sentence 4 AktG do not in aggregate exceed 10% of the share capital either at the time the resolution on this authorisation is passed or at the time this authori-sation is exercised. If the share capital existing at the time the authorisation is exercised is less than on 13 May 2009, the lower share capital shall apply. This authorisation should only be exercised to the extent that the limit of 10% of the share capital defined in section 186(3) sentence 4 AktG is adhered to in aggregate – i.e. including any exercise of other author-isations to exclude subscription rights which is effected in accordance with section 186(3) sentence 4 AktG or by applying this provision by analogy or mutatis mutandis. Shareholders always have the possibility of maintain-

ing their stake through the purchase of TUI shares via the stock exchange. This authorisation is in the interests of the company because it provides greater flexibility. In particular, it allows shares to be issued in a targeted way to cooperation partners. The sale proceeds that may be realised by setting a near-market price generally lead to substantially higher cash inflow per share than in the case of a share placement with subscription rights, thus maximising the injection of equity. Furthermore, by foregoing the lengthy and expensive process of handling the subscription rights, equity requirements can be met quickly through market opportunities arising in the short term.

Own shares may also be sold, with the consent of the Supervisory Board, for non-cash contributions under exclusion of shareholders’ subscription rights. The proposed authorisation should put the company in a position to offer own shares directly or indirectly as consideration in connection with mergers or acquisitions of companies, parts of companies, shareholdings in companies or other assets (e.g. hotels, ships or aircraft). As the company faces national and global competition, it must be in a position to act quickly and flexibly on the national and international markets at all times. This also includes the possibility of improving its com-petitive position by merging with other companies or by acquiring companies, parts of companies, share-holdings in companies or other assets. In some cases this possibility can be best implemented by effecting the merger or acquisition in such a way that shares in the acquiring company are granted. Practical examples also indicate that, on both national and international markets, shares in the acquiring company are often demanded in return for attractive acquisition targets. The authorisation proposed here should create the scope for action that the company needs in order to take advantage of opportunities for mergers or acqui-sitions of companies, parts of companies, sharehold-ings in companies or other assets quickly and flexibly both locally and on international markets. For this to be possible, the proposed exclusion of subscription rights is essential. When defining the valuation ratios, the Executive Board will ensure that the interests of shareholders are suitably protected. When assessing the value of the shares granted as consideration, the Executive Board will base its decision-making on the market price of the TUI share. In this context, no schematic link to a market price is intended, in particular in order to prevent the results of negotiations from being put in question by variations in the market price.

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The authorisation furthermore allows the own shares to be used under exclusion of shareholders’ subscrip-tion rights for fulfilling the conversion or subscription rights of holders of convertible bonds, bonds with warrants, profit-sharing rights and/or income bonds (or combinations of these instruments) which were issued by the company or other Group companies and provide for conversion rights, warrants or conversion obligations. In order to fulfil conversion rights, it can make sense to use, either solely or partially, own shares instead of new shares from a capital increase, as this offers a suitable tool to counteract a dilution of the shareholder's capital holdings and voting rights, which may occur to a certain extent where these rights are fulfilled by way of newly created shares.

The above possibilities can be used not only in respect of shares that were acquired on the basis of this author-isation resolution. The authorisation also covers shares acquired in accordance with section 71 d sentence 5 AktG. Using these own shares in the same way as the shares acquired on the basis of the authorisation resolution is advantageous and creates additional flexibility. Furthermore, it should be possible for the aforementioned usage possibilities to be implemented not only directly by the company itself but also by dependent companies or companies that are majority-owned by the company, or by third parties acting for their account or for the account of the company.

According to the proposal, the own shares acquired on the basis of the authorisation resolution may also be redeemed by the company, with the consent of the Supervisory Board, without a new resolution of the

Annual General Meeting being required. In accordance with section 237(3) no. 3 AktG, the company’s Annual General Meeting may decide to redeem its fully paid no-par value shares without a reduction in the com-pany’s share capital being required. The proposed authorisation expressly includes this alternative, in addition to redemption with a capital reduction, although this, too, should no longer require a new resolution from the Annual General Meeting. If own shares are redeemed without a capital reduction, the computed portion of the company's share capital represented by the remaining no-par value shares automatically increases. The Executive Board should thus also be authorised to make the necessary change to the Charter to take account of the change in the number of no-par value shares resulting from a redemption.

In the event that the own shares are sold by way of an offer to shareholders, the Executive Board should finally be authorised to exclude the shareholders' subscription rights with regard to fractional amounts with the consent of the Supervisory Board. The option to exclude subscription rights with regard to fractional amounts allows the company to obtain a technically feasible subscription ratio. The shares that are excluded from shareholders’ subscription rights as unallotted fractions will be realised on the best possible terms for the company either through a sale via the stock exchange or in any other way. Since only fractional amounts will be handled in this manner, the possible dilutive effect will be small.

If this authorisation is exercised, the Executive Board will notify the next Annual General Meeting accordingly.

19Re Item 8 Agenda

Under item 7 of the agenda for the Annual General Meeting of 13 May 2009, the Executive Board and the Supervisory Board propose to authorise the Executive Board to acquire own shares representing up to 10% of the share capital in accordance with section 71(1) no. 8 AktG. In addition, the proposal made in item 8 of the agenda provides for an express authorisation of the Executive Board to also use equity derivatives in the form of put options, call options or a combination of both in the context of an acquisition of own shares on the basis of the authorisation proposed under item 7 of the agenda. This gives the company additional alternative courses of action and thus enables the company to find the best possible structure for a repurchase of shares. In connection with the acquisition of own shares, the use of put or call options or a combination of both is to provide an alternative to a conventional repurchase. However, this authorisation should be limited to an acquisition of shares represent-ing up to 5% of the share capital. This means that no more than half of the acquisition volume of up to 10% of the share capital permitted in accordance with the proposal under agenda item 7 may be acquired using equity derivatives. The use of equity derivatives to acquire own shares should furthermore require the consent of the Supervisory Board, which consent may also be granted on a general basis or for a specific period of time or for a specific volume.

Under the put option, the writer is obliged to purchase a predetermined number of shares at a predetermined price (exercise price). In return, the writer receives an option premium. Exercising the put option is economi-cally advantageous for the option holder if the price of the relevant share is lower than the exercise price, as this will enable the holder to sell the shares to the writer at the higher exercise price. When purchasing a call option, the purchaser, in return for payment of an option premium, acquires the right to purchase a predetermined number of shares from the writer at a predetermined price (exercise price). Exercising the call option is economically advantageous for the hold-er if the price of the relevant share is higher than the exercise price, as this will enable the holder to buy the shares from the writer at the lower exercise price.

The use of put and call options for repurchasing shares enables the company to take advantage of low share prices, thereby reducing the company's expenses. For example, put options can be sold if prices are low and

the company intends to buy own shares but is not sure when the share price will be at its lowest level. In this situation, it can be advantageous for the company, for example, to sell put options the exercise price of which is lower than the price of the share at the time the put option is sold. The company receives an option premium in return for the obligation to purchase a predetermined number of own shares at a predeter-mined price (exercise price). In addition to receiving an option premium, the use of put options offers the advantage that the purchase is effected at a lower price compared with an immediate repurchase and that the acquisition price must only be paid when the option is exercised, which means that liquidity can be retained until this later point in time. Although it is not certain, where put options are used in this way, whether they will actually be exercised and the shares acquired – which in turn entails the risk that the company, in the event that it requires its own shares, may have to acquire such shares by other means and possibly at a price that is higher than the price prevailing at the time the option transaction was concluded –, it may be advantageous in some cases to be able to use put options to complement the conventional repurchase of shares for the reasons outlined above. After all, the company will in this case in any event have received the option premium. However, the Executive Board should also be able to use call options in connection with the purchase of own shares. This may be advisable, for example, if the company wishes to use own shares in the future. In this case, the company can buy a sufficient volume of own shares when share prices are low. Alternatively, it can also acquire call options in return for payment of an option premium, thereby protecting itself against rising share prices. This may be expedient in particular if, in a situation where share prices are low, it is not foreseeable to what extent own shares will be required. This not only offers the advantage that the company retains its liquidity until such time as the call options are actually exercised, but also that the company only has to buy the number of shares that it actually needs. The resolution proposal also clearly states that the Executive Board should also have the option of combining put and call options as part of the share repurchase process, thus enabling it to combine the advantages of both instruments.

According to the proposal, it should be possible for the company to conclude an option transaction with a credit institution or other company meeting the requirements

Re Item 8 of the agenda(Authorisation regarding the use of equity derivatives for the acquisition of own shares)

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20 Agenda Re Item 8

set out in section 186(5) sentence 1 AktG (hereinafter referred to collectively as ‘credit institution’). The transaction in question may be a put option with the company acting as the writer. Alternatively, the company may acquire a call option from a credit institution acting as option writer. Both types of transactions may also be combined. In all these cases, the relevant credit institution may, when exercising the options, only deliver shares previously acquired by it via the stock exchange at the price prevailing in the Xetra trading system of Deutsche Börse AG (or a comparable successor system) at the time of acquisition via the stock exchange. Any put option transaction concluded with a credit institution must provide for a corresponding obligation. Where a call option agreement has been concluded, the company may only exercise the option if it has been ensured that this condition has been met when the shares are delivered. By stipulating that the relevant credit institution must only deliver shares that it previously acquired via the stock exchange at the share price prevailing in the Xetra trading system of Deutsche Börse AG (or a comparable successor system) at the time of acquisition via the stock exchange, the require-ment of equal treatment of all shareholders is to be complied with as far as possible in accordance with section 71(1) no. 8 sentence 4 AktG.

According to the proposal, the equivalent value per share (not including incidental acquisition costs) to be paid by the company when an option is exercised (exercise price) must not – either with or without taking into account the option premium paid or received – exceed or fall below the price of the share determined during the opening auction in the Xetra trading system of Deutsche Börse AG (or a comparable successor system) on the day on which the transaction was con-cluded by more than 5%. In this way, the company will, with regard to the permitted purchase price of the shares, initially be placed in the same position as if it were to acquire the shares directly via the stock exchange at the time the relevant option was concluded. This is because, in lit. c), the acquisition authorisation proposed to the Annual General Meeting on 13 May 2009 under item 7 stipulates the same lowest and highest equivalent values for the acquisition of own shares via the stock exchange. However, the proposed authorisation to use equity derivatives provides for another restriction in that the relevant limits must be adhered to in any event, i.e. with and without inclusion of the option premium.

The term of put options used in the acquisition of own shares should not exceed one year. The longer the term, the likelier is it that the price of the share will deviate in an unforeseen way from the share price at the time the option transaction was concluded. In order to prevent too pronounced deviations, a maximum possible term is to be specified. This is not necessary in the case of call options because the company, as the option holder, can decide whether or not to exer-cise the call options. The company will only exercise the call options if the share price exceeds the exercise price at the time the option is exercised, in which case it is in the company’s interest to exercise the option. The latest possible exercise date for the put options must be selected such as to ensure that the shares will be delivered before 13 November 2010, since the acquisition authorisation proposed under item 7 of the agenda for the Annual General Meeting of 13 May 2009 ends on 12 November 2010 which means that it will not possible to acquire own shares on the basis of this authorisation in accordance with section 71(1) no. 8 AktG after that date. For the same reason, it should be permitted to exercise call options for the purpose of acquiring own shares only up to a date which ensures that the shares will be delivered before 13 November 2010. In the case of a call option, however, it is in the discretion of the company as the option holder to exercise the option only if and to the extent that a valid repurchase authorisation granted by the Annual General Meeting is in place. It is therefore not necessary for the latest possible exercise and delivery date to occur before 13 November 2010. Rather, it is sufficient to state that call options must not be exer-cised, and the shares must not be delivered, after 12 November 2010 unless a corresponding new acquisi-tion authorisation is granted by a subsequent Annual General Meeting.

The same applies if the company does not wish to repurchase the shares directly but through dependent companies or companies that are majority-owned by the company, or third parties acting for their account or for the account of the company.

Shareholders should have no right to demand that the company, dependent companies or companies that are majority-owned by the company, or third parties acting for their account or for the account of the com-pany enter into put or call option transactions or a combination of both with them. The management

21Re Item 8 Agenda

should be in a position to conclude option transactions in a targeted manner with credit institutions, thereby securing the best possible option terms by agreeing on exercise prices and option premiums that are near-market. As this will enable action to be taken more quickly, it will be possible to take advantage of favour-able price developments at short notice, which will generally enable the company to agree better terms than if it were to make a public offer to all shareholders to conclude option agreements. The proposed author-isation expressly states that option transactions must be concluded at near-market conditions. In particular, the acquisition price paid by the company for options (the option premium paid) must not be substantially greater, and the sales price received by the company for options (the option premium received) must not be substantially lower, than the market value of the options calculated using generally accepted financial calculation principles; when calculating this market value, the agreed exercise price is to be taken into account besides other factors. This ensures that share-holders who are not involved in the option transactions suffer no – or at least no significant – loss in value.

This, together with the limited extent to which own shares may be acquired using equity derivatives, is in line with the basic principle of section 186(3) sentence 4 AktG governing the exclusion of subscription rights, which is applied to the shareholders' tender rights.

When repurchasing shares using put options, call options or a combination of both, shareholders should have a right to tender their shares only insofar as the company, dependent companies or companies that are majority-owned by the company, or third parties acting for their account or for the account of the com-pany are obliged to purchase the shares under these options. Otherwise the use of put options, call options or a combination of both to acquire own shares would not be possible, and the related advantages could not be realised by the company.

With regard to the use of own shares acquired using equity derivatives, the relevant provisions of the authorisations proposed under item 7 of the agenda shall apply. A suitable clarification is included at the end of the authorisation proposed under item 8.

Age

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Participation in the Annual General Meeting

Registration

According to article 21 of the Charter, the shareholders of the company who are entered in the share register of the company on the day of the Annual General Meeting and whose shareholdings have been registered with the company for the purpose of attending the Annual General Meeting by the end of the registration period (6 May 2009, midnight (CEST)) have the right to participate in the AnnualGeneral Meeting and to exercise their voting rights at the Annual General Meeting.Shareholders who are entered in the share register will receive a written invitation from us.

Shareholders can register:

by mail by fax or electronically

TUI AktionärsserviceHauptversammlung 200969975 Mannheim

+49 (0) 69 91 33 91 17 www.tui-group.com link ‘AGM 2009’

Shareholders of TUI AG will again have the option this year to register or to appoint a representative, to order entry tickets for the Annual General Meeting or to authorise and instruct the company proxies electronically through the internet. This service will be available from 14 April 2009 under www.tui-group.com, link ‘Annual General Meeting 2009’. The shareholder number and the individual access number required to access the personal internet service are indicated on the back of the above-mentioned personalised letter.

Shareholders whose registration is received by the company before midnight (CEST) on 6 May 2009 may authorise and instruct the company proxies, modify their instructions, if necessary, or revoke their authorisation by communication to the addresses indicated above until midnight (CEST) on 12 May 2009. This also applies to authorisations and instructions given to the company proxies before midnight (CEST) on 14 April 2009.

Entry tickets can be ordered exclusively until midnight (CEST) on 6 May 2009.

Advice on voting by proxy

Shareholders who are entered in the share register and have registered their shares in time have the option to have their voting rights exercised at the Annual General Meeting by a credit institution, a shareholders' association, the company proxies or any other person of their choice who has been authorised in writing to represent them.

Registration period

6 May 2009,

midnight (CEST)

Online Service

since 14 April 2009

Authorisation/instructions

until 12 May 2009,

midnight (CEST)

Participation

23

With regard to the authorisation of and exercise of voting rights by credit institu-tions, shareholders' associations and equivalent persons, the specific provisions set out in section 135 AktG apply. In connection with the authorisation of company proxies, the following special rules apply. In all other cases, the authorisation must be granted in writing.

The sharehold