GAME Group directors commit percentage of salary to buying shares through irrevocable trading agreements
Dealings by directors of companies admitted to the Official List in the shares of their own company are governed by the Model Code annexed to Listing Rule 9. Broadly, the Model Code requires that directors (and other persons discharging managerial responsibilities) must not deal in the company’s shares during “close periods” – which are periods of time preceding the announcement of company results, whether annual, half-yearly or quarterly. In addition, any dealing must be cleared with the chairman of the company.
It is possible (under paragraphs 23 to 26 of the Model Code) for a director to enter into a trading plan to allow regular dealing in the company’s shares. The essence of a trading plan is that the timing of the decision to buy or sell is removed from the director’s discretion and handed to an independent third party, who buys or sells according to a pre-determined dates and prices, or exercises the dealing discretion himself (or the decision is determined by a written formula or computer program). In that way, the suggestion that the director is dealing on the basis of inside or price-sensitive information is removed.
GAME Group and using a trading plan to demonstrate the directors’ confidence in the future
GAME Group plc announced on 27 September 2011 that the entire board of directors has entered into a trading plan by which each board member will use a stated proportion of their salary or director’s fees to make purchases of the company’s shares on the first trading day of each month for the next twelve months. GAME’s announcement can be accessed here.
GAME has a challenged share price and its business model is being interrupted by the Internet. The intention behind this united action by the board is to show confidence in the future of the company.
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