Christoph Franz waives advance share entitlement

6 May 2005

The offer prospectus for the purchase offer currently being made to SWISS minority shareholders includes the information that President & Chief Executive Officer Christoph Franz would be immediately entitled to the 100 000 SWISS shares of his long-term incentive plan in the event of a change of control at SWISS, a development which is now expected to occur in 2006. This is a customary provision of results-based compensation models. The share options concerned, which could otherwise be exercised in 2008, are part of the compensation package agreed between Christoph Franz and the Board of Directors when he joined the company, and were publicly communicated in April 2004.

To avoid unnecessary public debate, however, and to eliminate any impression of deriving special benefit from the planned change of control, Christoph Franz has asked the Board of Directors to leave any issue of the shares concerned at the originally-envisaged issue date of 2008.

Christoph Franz has also taken this decision in view of the great efforts made last year by the SWISS Management Board to act and communicate its actions as openly and consistently as possible – a policy which was itself adopted not least to strengthen the sense of unity and community among SWISS employees. “This approach should not be jeopardised by a contractual technicality whose impact could not have been foreseen at the time it was agreed,” says Franz.

The Board of Directors thanks Christoph Franz for the sensitivity and consideration he has shown in taking this decision, and offers its sincere respect for the attitude it reflects.