GOUVERNEUR — A sweeping reorganization of Kinney Drugs is to be completed in the near future following a successful effort to buy back 2.84 million shares of stock held by non-employees.

"We are happy to report we have had a resounding 99 percent of our stock come back to the company," said Craig C. Painter, chief executive officer. "That means we are proceeding forward. We are becoming a 100 percent employee-owned company."

The restructuring calls for Kinney to buy back all stock not held by its Employee Stock Option Plan or 401(k) plan and to convert to what is known as an S corporation. The move is expected to allow the 2,700-employee drug chain to avoid $80 million in federal taxes over the next seven years.

The restructuring also is expected to allow Kinney to cope with competition from larger chains. That may have been a major factor in the acceptance of the purchase offer, Mr. Painter said.

"From our shareholders' standpoint, that tells us they were very concerned with Kinneys being able to remain a local, employee-owned company," Mr. Painter said.

Under the reorganization proposal, Kinney agreed to pay $90 per share for all shares not held by its Employee Stock Option or 401(k) retirement plan.

Shareholders who have not yet accepted the purchase offer are continuing to be offered the same exchange.

"A lot of those are people who could not be located. We are still tracking down some addresses," Mr. Painter said. "We expect to have everything completed within the next four to six weeks."

The restructuring should have no impact on customers, and the chain, which was founded in Gouverneur by the late Burt O. Kinney in 1903, is continuing to grow in Northern New York and Vermont, Mr. Painter said. It has 87 retail stores and three institutional facilities, in Gouverneur, Syracuse and Vermont, which serve nursing homes and long-term users, he said. It is in the process of relocating existing stores to new facilities in Fulton, Lake Placid and Burlington, Vt.