bid to thwart any hostile takeover bids.

The bank's board of directors is to ask shareholders at its annual general meeting on October 7 to vote to alter its rules to make it more difficult for an unwanted suitor to come in and buy up an amount of shares that would give control over the business.

The new plan, if approved, will mean that once anyone tries to acquire 15 percent of issued ordinary shares, it will trigger the poison pill, forcing the buyer to negotiate with the board of directors.

The plan makes it more expensive for someone to acquire a controlling stake as the shares are selling at a discount compared to the book value of the company.

The proposal will allow the bank the authority to increase share capital and capitalise amounts available for distribution and mean the directors will be able to negotiate a fair price for the stock.

Currently the bank's shares are selling at a market value of about $15.30, while the net book value per share, excluding shared purchased for the Stock Option Trust, was $12.86. As of June 30 this year, return on equity was 15.6 percent for the year with earning per share of $1.92.

The bank is seeking to introduce the measures because the so-called 60/40 rule in the Banks Act 1969 which requires at least 60 percent of the bank's stock to be owned by Bermudians, is to be repealed in the next few months by the Government.

The directors at the Bank of Butterfield say they want to protect the interests of their shareholders against any hostile takeover.

Chairman of the Board of Directors at the Bank of Butterfield Dr. James King told shareholders in a circular: "The bank's board, in recognition of its responsibilities to protect shareholders' interests, proposes the adoption of a Shareholders Rights Plan which will force a potential acquirer to negotiate fairly with the bank's board, failing which the acquirer will suffer a substantial dilution of his interest in the bank.'' Similar measures were proposed by the Bank of Bermuda in June and approved by shareholders which would block any hostile takeover bids. These included a two-thirds "Super Majority Vote'' which would make it difficult to remove a director or to sell or transfer the bank's assets.