The shareholders in the Plan have their dividends automatically reinvested in new shares. As a result of re-evaluating the methodology by which the Bank establishes the amount of new shares that are purchased when a cash dividend coincides with a stock dividend, it is amending the rules of the Plan to produce what it believes will be a more appropriate result for Plan participants.
In a letter to participants, Chief Financial Officer Edward Gomez writes, "For the past two years, shareholders have benefited from the issuance of stock dividends, in addition to regular cash dividends. In August of this year, when the distribution of a one-for-seven stock dividend was concluded, it came to our attention that the computation methodology as defined in the Plan rules does not accurately adjust the price for the impact of a stock dividend. The rules are entirely appropriate for the conversion of regular cash dividends but are not as precise as they should be in the case of a stock dividend."
Mr. Gomez commented that "The rules of the Plan were followed at the time of the dividends. Nonetheless, the participants in the Plan by definition are very committed shareholders of this organisation. We therefore felt it appropriate to not only adjust the Rules for future dividends but to make those changes retroactive to cover the two stock dividends of 1999 and 2000."
- ends -
For more information please contact:
Anna Lowry
Bank of Bermuda
Telephone: (+441) 299 6157
Fax: (+441) 299 6559
E-mail: lowryal@bankofbermuda.com