Bank of Bermuda has announced that one of its senior management, Mr. Martin Lancaster, head of Global Operations, has implemented a long-term share trading plan under Rule 10b5-1 of the US Securities and Exchange Act of 1934.

Usually corporate insiders are subjected to insider-trading restrictions, which limit them to a few open-window trading periods. Rule 10b5-1 enables corporate insiders to trade outside these windows by binding such trades to a pre-written plan that outlines the amount, price and date on which they will trade securities.

In this way, settling a Rule 10b5-1 trading plan provides corporate insiders an affirmative defence to insider trading liabilities, provided they are not aware of inside information at the time of settling the plan.

In the past chief executive Henry Smith and other executives have also availed themselves of Rule 10b5-1.

Under his plan, over the course of one year Mr. Lancaster will sell up to 2,200 shares of Bank of Bermuda common stock and will exercise stock options up to a further 24,000 shares. The shares, and the shares related to the options, will be sold at gradually increasing market price floors of $33 or more. The plan expires in June 2004.

Upon completion of his plan, Mr. Lancaster will continue to retain a significant ongoing interest in Bank of Bermuda as well as additional stock options.

"Many of our senior people have Bank of Bermuda stock options and shares," said Edward Gomez, chief financial officer.

"The bank has long had an employee share plan to encourage ownership and, as in many publicly-traded companies, stock options are also a key component of Bank of Bermuda's performance benefits.

"By implementing a 10b5-1 Rule trading plan we can ensure that sales of Bank of Bermuda shares by senior management are planned to be made independent of company news and that the market effect of these sales is minimised."