Phillip Butterfield is set to become the next CEO of the Bank of Bermuda, replacing current boss Henry Smith who will step down next year.

Mr. Butterfield was recommended for the top job by the bank?s board of directors, who yesterday made their succession plan public.

Mr. Butterfield, 57 ? currently the bank?s chief operations officer ? was tapped to replace Mr. Smith, 54, after he said he would quit the bank within a year of the bank?s sale to multinational banking giant HSBC.

Word on who might succeed Mr. Smith followed the announcement on October 28 that the bank was set to be sold to HSBC for a $1.3 billion price tag. The deal still needs the approval of the Bermuda Monetary Authority and shareholders, before it can go ahead.

Mr. Butterfield?s appointment has also been agreed by HSBC with a bank spokesperson yesterday saying that HSBC was ?aware and supportive? of the bank?s proposal to put Mr. Butterfield in the CEO post, and that they had been part of the discussion on who should succeed Mr. Smith.

Mr. Smith, a 30-year veteran of the Bank of Bermuda, told in an interview earlier this month that HSBC had ?made it clear to me that they will not need my services after a period of time.

?That would be the time it would take to bed the transaction, make sure everybody is settled. I am committed to them for one year.?

Once the sale goes through, the bank said Mr. Butterfield would become CEO designate.

The bank also reiterated that the current board of directors would be retained, but that one, possibly two, HSBC representatives would also be named to the board.

In an address to the Hamilton Rotary Club earlier this week, Mr. Smith said the HSBC board member would not take up top positions of chairman or deputy chairman.

In addition to an HSBC appointee to the board, the bank also said in recent weeks that HSBC was appointing its own CFO, as well as a second executive in a senior operations management role.

Yesterday, bank chairman Joseph Johnson said: ?The board has a clear succession plan for the bank?s most senior executive positions.

?Succession planning and the desire of the bank and HSBC to retain Bermudian expertise at the most senior level were key elements in the discussions about the proposed acquisition.?

Speaking to Mr. Butterfield?s future appointment as CEO, Mr. Johnson said: ?In Philip Butterfield, with his wide international experience in banking, we will have a highly capable successor to Henry.

?Subject to shareholder approval of the acquisition, we are confident that Phil will steer the bank through the exciting next phase in its history, as a member of the HSBC Group, with all the opportunities for Bermuda, shareholders, customers and staff this new beginning will bring.?

A shareholder special general meeting (SGM) has been called by the bank for February 16, 2004, giving investors a chance to vote in favour of or against the sale to HSBC.

In order for the transaction to go through, there must be a 30 percent quorum of issued shares represented either by proxy (mail in) vote or in person at the meeting. Of all the votes cast, 75 percent or more of the votes must be cast in favour of the acquisition.

In round numbers, the sale will only be allowed to go through if shareholders holding approximately 6.5 million or more of the bank?s 29.9 million in outstanding shares ? the bank currently trades on both the Nasdaq and Bermuda Stock Exchange ? vote in favour.