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NWDA/DWA MERGER PROCESS NEARING COMPLETION, WITH NWDA MEMBERSHIP VOTE SET FOR AUGUST 27; DWA ACTIVE MEMBERSHIP AND NWDA BOARD ACCEPT CONCEPTS IN PLAN

Executive Summary

A final vote on the proposed merger of the Natl. Whsle. Druggists Assn. (NWDA) and the Drug Whslrs. Assn. (DWA) will be cast by the full NWDA membership at a special meeting scheduled for August 27 at the group's Alexandria, Va. headquarters. The proposal as presented by DWA was accepted by the NWDA board at a meeting in New York City July 26-27. The board will now pass it on with a recommendation for approval to the active membership. The proposal was presented to NWDA after clearing the DWA board in late June ("The Pink Sheet" July 16, T&G-9). While the NWDA board agreed to the concepts of the merger contained in the proposal, some implementation issues such as reconciliation of the proposed changes with the NWDA charter remain to be worked out internally. For example, implementation of one key aspect of the proposal, converting the NWDA voting system from a one vote per distribution center to a one vote per corporate entity basis, will require a restructuring of the membership dues scale contained in the by-laws. However the issues involved with the merger proposal apparently will not need to be futher negotiated with DWA. NWDA anticipates that the proposal as presented to its membership will be sufficiently similar to that received from DWA in order for the NWDA vote to be considered final. NWDA members will receive a package containing information on the proposed merger and the by-law changes involved, and a proxy for those who cannot attend, prior to the Aug. 27 meeting. DWA Members Against Merger Base Opposition On Claim That Combined Assn. Cannot Fully Serve Independents DWA active members voted to approve the merger proposal at a special meeting in Denver on July 31. Twenty DWA members attended the meeting while the remaining members voted by proxy. DWA by-laws require a two-thirds majority in order for the merger proposal to pass. About 40 of DWA's approximately 60 active members already belong to NWDA. Within DWA, apponents of the merger plan contended that a merged assn. would not adequately replace DWA in serving the needs of independent whslrs. In remarks prepared for DWA's June 28-29 board meeting, and subsequently distributed to the membership, Valley Whsle. Drug's Louis Shoneff maintained that independents' interests would be subsumed within the merged assn. This would not necessarily happen, Shoneff said, "from benign neglect nor from lack of leadership but simply because their association cannot direct their total effort and single-mindedness of prupose toward one segment of the association. DWA within NWDA will be splintered, try as it may to be otherwise. Its leadership, as directed toward our common purpose, will be diluted. We will truly be absorbed." Shoneff, a past DWA president, was one of three board members who voted against the plan when the board considered the merger. The former DWA president maintained that in general, DWA's philosophy and objectives were not in concurrence with NWDA. "We are in the same business but with widely different approaches, philosophy and objectives," Shoneff said.

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