Bank of N.T. Butterfield and Son Ltd. have decided to take up the offer president and chief executive officer John Tugwell said yesterday.

Mr. Tugwell also said he would be leaving the bank at the end of this month.

He had announced he was leaving in August after only 15 weeks on the job but would stay on until a successor was found. So far no successor has been named.

Last month the bank offered all employees aged 55 and over a chance to take the package as part of its efforts to cut costs and reorganise operations. Mr.

Tugwell says the offer also allows younger employees to move up more quickly through the ranks.

The rest of the eligible employees have until the end of October to decide whether they want to leave.

Mr. Tugwell said the reorganisation involved "flattening the structure'' of the bank. So far about 20 people have been cut from management positions locally.

With the 40 set to leave the bank will have about 800 staff remaining in Bermuda by the end of the year, a drop of 15 percent since 1995 when the bank had 945 employees locally. The bank had 874 employees as of June 30 this year, and now has about 850, he said.

"There is no target for the cuts,'' Mr. Tugwell said about the early retirement package. "We want to achieve a permanent cost reduction.'' Since becoming head of the bank Mr. Tugwell has closed the bank's 23-staff Singapore office and announced a cut of 50 people from the bank's London office.

In other developments, a spokesperson said the bank was going to begin opening the Reid St. branch and the Rosebank drive-in on Saturdays between 10 a.m. and 3 p.m. No date had been set yet for when Saturday openings will begin. The board of directors is also going to bring a proposal before shareholders at the annual general meeting on October 29 to allow the bank to begin a share buyback programme. A spokesman said there was no plan to buyback any shares yet, but including such a clause in the memorandum of association would give the board that option if necessary.

Companies usually begin buying their shares if it is believed the stock is undervalued.

LEAVING -- Bank of Butterfield president and chief executive officer John Tugwell.