Annual report 2008 - Advanced Inflight Alliance AG

9. Course of business and key events in 2008
The Supervisory Board member, Wolfgang Rück, resigned his office effective January 09, 2008. On January
14, 2008, Mr. Rudolf Seidl, auditor and president of ROTA Treuhand GmbH, Munich, Germany, was appointed
to the Supervisory Board by court order upon application of the Management Board and approval of the
Supervisory Board.
The acquisition of DTI took legal effect as of the contract signing date (January 11, 2008). AIA AG acquired
100% of the shares in DTI and paid the purchase price in cash. In addition to the purchase price, earn out
payments contingent on the acquired company‘s performance in the 2008 and 2009 financial years were
stipulated with DTI‘s management (the sellers of the shares); they will become due and payable in 2009 and
2010, following the adoption of the annual financial statements as of December 31, 2008, and December
31, 2009. According to the purchase agreement, earn out payments of up to CAD 3.7 million for the 2008
financial year will become due and payable in 2009.
In February 2008, AIA AG obtained an unsecured loan of EUR 10,000 thousand from HypoVereinsbank AG,
Munich, with a term of five years subject to regular loan payments, no prepayment penalties and variable
interest based on market rates. Existing funds were used to discharge the purchase price liability from the
acquisition of DTI. The company obtained the loan in anticipation of the ramifications of the global crisis in
the financial markets, thus securing freely disposable funds that may be repaid at any time. In the meantime,
two loan payments of EUR 1.0 million each fell due on June 30, 2008, and December 31, 2008; the
nominal amount of the loan outstanding as of January 01, 2009, thus was EUR 8.0 million, of which EUR 6.0
million are secured by means of a fixed interest agreement.
On February 28, 2008, the Munich Regional Court I ruled on two small shareholders‘ actions for annulment
of various shareholder resolutions adopted at the regular Annual General Meeting on July 2, 2007, permitting
all resolutions with the exception of agenda item 3 (formal approval of the Management Board‘s actions
during the financial year) to take legal effect. The company appealed the court‘s ruling on agenda item
3. The deadline for filing the appeal expired on April 04, 2008. The two small shareholders did not file an
appeal, whereupon the company withdrew its appeal regarding agenda item 3 such that the ruling took
effect immediately. As a result, with the exception of agenda item 3, the company has prevailed in all
actions for annulment of shareholder resolutions adopted at the regular Annual General Meeting on July 02,
2007. The plaintiffs must bear 92% of the costs of the proceedings before the Munich Regional Court I.
We succeeded in gaining American Airlines, a major carrier, as a new customer effective February 01, 2008.
The two-year contract runs until January 2010 and essentially covers American Airlines‘ total need for inflight
entertainment.
The Management Board was authorized by a shareholder resolution dated July 02, 2007, to issue up to
800,000 stock options overall. A total of 65,000 and 35,000 stock options were issued, respectively, to the
chief executive officer, Otto Dauer, and the chief financial officer, Peter Biewald, in the first half of 2008 with
the approval of the Supervisory Board. An additional 300,000 stock options were issued to nine managing
directors of subsidiaries during the same period.
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