RESTATED CERTIFICATE OF INCORPORATION
                                       OF
                           PAMIDA HOLDINGS CORPORATION


     Pamida Holdings  Corporation (the "Corporation"),  a corporation  organized
and existing under the General Corporation Law of the State of Delaware,  hereby
certifies as follows:
     1. The present name of the Corporation is Pamida Holdings Corporation.  The
Corporation  was  originally  incorporated  under  such name,  and the  original
Certificate of  Incorporation of the Corporation was filed with the Secretary of
State of the State of Delaware on April 18, 1986.
     2. Pursuant to Section 245 of the General  Corporation  Law of the State of
Delaware,   this  Restated   Certificate  of  Incorporation  only  restates  and
integrates  and does not further  amend the  provisions  of the  Certificate  of
Incorporation  of the  Corporation as heretofore  amended or  supplemented,  and
there is no  discrepancy  between those  provisions  and the  provisions of this
Restated Certificate of Incorporation.
     3. The  Certificate  of  Incorporation  of the  Corporation  as  heretofore
amended or  supplemented  hereby is  restated  so as to read in its  entirety as
follows:

                                  ARTICLE FIRST

     The name of the corporation is Pamida Holdings Corporation.

                                 ARTICLE SECOND

     The address of the corporation's registered office in the State of Delaware
is 1209 Orange Street, in the City of Wilmington, County of New Castle. The name
of its registered agent at such address is The Corporation Trust Company.

                                  ARTICLE THIRD

     The nature of the  business or purposes to be  conducted  or promoted is to
engage in any lawful act or activity  for which  corporations  may be  organized
under the Delaware General Corporation Law.

                                 ARTICLE FOURTH

                                   4.1 GENERAL

     The total number of shares of stock which the  corporation has authority to
issue is 29,002,141 consisting of:

     (i)  514 shares of 16.25%  Senior  Cumulative   Preferred  Stock,
          par value $1.00 per share (the "Senior Preferred");

     (ii) 1,627 shares of 14.25% Junior  Cumulative  Preferred  Stock, par value
          $1.00 per share (the "Junior Preferred");

     (iii)25,000,000  shares of  Common  Stock,  par  value  $.01  per
          share  (the "Common Stock"); and

     (iv) 4,000,000  shares of Nonvoting  Common Stock, par value $.01 per share
          (the "Nonvoting Common Stock").


                     4.2 RECLASSIFICATION OF PREFERRED STOCK

     Upon the  effectiveness  of this  Certificate  of Amendment of the Restated
Certificate of  Incorporation of the corporation  (the "Effective  Date"),  each
outstanding  share of  Senior  Preferred  and each  outstanding  share of Junior
Preferred  shall be changed and  reclassified,  without any other  action  being
required  on the part of the  respective  holders  thereof,  into the  number of
shares of Common Stock of the corporation  calculated as follows:  The number of
shares  of  Common  Stock to be  issued  for the  outstanding  shares  of Senior
Preferred and Junior Preferred held by each holder thereof shall be equal to the
Liquidation  Value of such  holder's  shares  of  Senior  Preferred  and  Junior
Preferred  divided  by nine (9) and  rounded up to the next  whole  number.  The
"Liquidation  Value" of each share of Senior Preferred or Junior Preferred shall
mean the Liquidation Value as determined pursuant to the terms of Section 4.2 of
Article Fourth of the Restated  Certificate of  Incorporation of the corporation
as in effect  immediately  prior to the Effective Date plus any unpaid dividends
not included in the  Liquidation  Value  accrued  from the most recent  Dividend
Reference  Date  (as  such  term  is  defined  in the  Restated  Certificate  of
Incorporation of the corporation as in effect immediately prior to the Effective
Date) to the close of business on the Effective Date.

     At and after the Effective Date,  holders of shares of Senior Preferred and
Junior  Preferred,  upon  surrender of a certificate  or  certificates  for such
shares to the corporation, shall be entitled to receive in replacement thereof a
certificate representing the number of shares of Common Stock of the corporation
into  which  the  aggregate  number of  shares  of  Senior  Preferred  or Junior
Preferred  represented by the certificate or  certificates so surrendered  shall
have been changed and reclassified  pursuant to the preceding  paragraph of this
Section 4.2. From and after the Effective Date,  until  surrendered and replaced
in accordance with this paragraph,  each such certificate representing shares of
Senior Preferred or Junior Preferred shall be deemed for all corporate  purposes
to represent the number of shares of Common Stock of the corporation  into which
such shares of Senior  Preferred or Junior Preferred shall have been changed and
reclassified  pursuant to the preceding paragraph of this Section 4.2; provided,
however, that the rights of the holders of such certificates representing shares
of  Senior  Preferred  or  Junior  Preferred  (i) to vote  and  (ii) to  receive
dividends and  distributions,  if any, payable to holders of Common Stock of the
corporation  shall be governed by the following  provisions  of this  paragraph.
After the  Effective  Date,  no holder of shares of Senior  Preferred  or Junior
Preferred shall have the right to vote on any matter  submitted to a vote of the
holders of Common Stock of the corporation until the corporation,  in accordance
with the provisions of this  paragraph,  has issued to such holder a certificate
for the shares of Common  Stock of the  corporation  into  which such  shares of
Senior  Preferred or Junior  Preferred shall have been changed and  reclassified
pursuant to the  preceding  paragraph of this Section 4.2.  Unless and until the
certificate or certificates  representing  shares of Senior  Preferred or Junior
Preferred have been  surrendered  to the  corporation  as  contemplated  in this
paragraph,  no  dividends  or other  distributions  payable to holders of Common
Stock of the  corporation  as of a record  date at or after the  Effective  Date
shall be paid to any holder of such certificate or certificates.  Subject to the
effect of unclaimed  property,  escheat,  and other  applicable  laws, after the
surrender  of any such  certificate  for  shares of Senior  Preferred  or Junior
Preferred,  there  shall be paid to the  record  holder of the  shares of Common
Stock of the  corporation  issued in  replacement of such  certificate,  without
interest,  (i) the amount of dividends or other distributions with a record date
at or after the Effective Date but prior to such surrender theretofore paid with
respect  to such  shares  of  Common  Stock of the  corporation  and (ii) on the
appropriate  payment date, the amount of dividends or other distributions with a
record date at or after the  Effective  Date but prior to such  surrender  and a
payment date subsequent to such surrender payable with respect to such shares of
Common Stock of the  corporation.  From and after the Effective  Date, the stock
transfer books of the corporation  with respect to the Senior  Preferred and the
Junior  Preferred  shall  be  closed,  and no  transfer  of any of  such  shares
thereafter shall be made. If, after the Effective Date,  certificates for shares
of Senior  Preferred or Junior  Preferred are presented to the  corporation  for
transfer, then such certificates shall be cancelled and replaced by certificates
issued in the name of the  transferee  representing  the  appropriate  number of
shares of Common Stock of the corporation as provided in this paragraph.

                   4.3 COMMON STOCK AND NONVOTING COMMON STOCK

  Except  as otherwise  provided in  this  Section 4.3 or as  otherwise required
by applicable  law, all shares of Common Stock and Nonvoting  Common Stock shall
be identical in all respects and shall  entitle the holders  thereof to the same
rights and  privileges,  subject to the same  qualifications,  limitations,  and
restrictions.

     Part 1. VOTING RIGHTS.
     Except as otherwise  provided in this Section 4.3 or in ARTICLE ELEVENTH or
as otherwise  required by  applicable  law, the holders of Common Stock shall be
entitled  to  one  vote  per  share  on  all  matters  to be  voted  on  by  the
corporation's stockholders, and the holders of Nonvoting Common Stock shall have
no  right  to  vote  on  any  matters  to  be  voted  on  by  the  corporation's
stockholders;  provided,  that the holders of Nonvoting  Common Stock shall have
the right to vote as a  separate  class on any  merger or  consolidation  of the
corporation with or into another entity or entities,  or any recapitalization or
reorganization,  in which shares of Nonvoting  Common Stock would  receive or be
exchanged   for   consideration   different  on  a  per  share  basis  from  the
consideration received with respect to or in exchange for shares of Common Stock
or would otherwise be treated  differently  from shares of Common Stock,  except
that shares of Nonvoting  Common Stock may,  without such a separate class vote,
receive or be exchanged for non-voting  securities which are otherwise identical
on a per share basis in amount and form to the voting  securities  received with
respect to or in exchange  for the Common  Stock so long as (i) such  non-voting
securities are convertible into voting securities on the same terms as Nonvoting
Common Stock is  convertible  into Common Stock under Part 4 of this Section 4.3
and (ii) all other consideration is equal on a per share basis.

     Part 2. DIVIDENDS
     As and when  dividends  are  declared  or paid  thereon,  whether  in cash,
property, or securities of the corporation,  the holders of Common Stock and the
holders of  Nonvoting  Common  Stock shall be entitled  to  participate  in such
dividends  ratably on a per share basis;  provided,  that (i) if  dividends  are
declared which are payable in shares of Common Stock or Nonvoting  Common Stock,
then  dividends  shall be  declared  which are  payable at the same rate on both
classes  of stock,  the  dividends  payable in shares of Common  Stock  shall be
payable to  holders  of Common  Stock,  and the  dividends  payable in shares of
Nonvoting Common Stock shall be payable to holders of Nonvoting Common Stock and
(ii) if the dividends consist of other voting securities of the corporation, the
corporation  shall make available to each holder of Nonvoting  Common Stock,  at
such holder's  request,  dividends  consisting  of non-voting  securities of the
corporation  which are otherwise  identical to such voting  securities and which
are  convertible  into or  exchangeable  for such voting  securities on the same
terms as Nonvoting Common Stock is convertible into Common Stock under Part 4 of
this Section 4.3.

     Part 3. LIQUIDATION.
     Except  as  otherwise  provided  by  applicable  law  or  by  the  Restated
Certificate of  Incorporation of the corporation or any amendments  thereto,  in
the event of any  liquidation,  dissolution,  or winding up of the  corporation,
whether voluntary or involuntary, the holders of Common Stock and the holders of
Nonvoting  Common  Stock shall be entitled to share,  ratably  according  to the
number of shares of Common Stock and Nonvoting Common Stock held by them, in all
remaining   assets  of  the  corporation   available  for  distribution  to  its
stockholders.

     Part 4. CONVERSION.
     4A.CONVERSION OF NONVOTING COMMON STOCK.
     Each  holder of shares of  Nonvoting  Common  Stock  shall be  entitled  to
convert  into the same  number  of  shares  of  Common  Stock any or all of such
holder's shares of Nonvoting  Common Stock if (i) such conversion would not have
the effect of causing such holder (or a group acting in concert as a partnership
or other group of which such holder is a member) to become the beneficial  owner
(within the meaning of Rule 13d-3 under the Securities  Exchange Act of 1934, as
amended)  of  securities  of the  corporation  representing  30% or  more of the
combined  voting  power  of  the  outstanding   securities  of  the  corporation
ordinarily  (and apart from rights arising under special  circumstances)  having
the right to vote in the election of directors  (hereinafter,  a "30%  Holder");
provided, however, that, notwithstanding the foregoing provisions of this clause
(i), if immediately prior to a transfer of shares of Nonvoting Common Stock to a
transferee holder, the transferor of such shares would have been a 30% Holder if
its holdings of  Nonvoting  Common  Stock were deemed  converted  into shares of
Common  Stock,  then the  transferee  holder of such shares of Nonvoting  Common
Stock shall not have the right to convert such shares of Nonvoting  Common Stock
into  shares of Common  Stock  until the  sixty-first  day after the date of the
transfer,  or (ii) the 11 3/4%  Senior  Subordinated  Notes due 2003 of  Pamida,
Inc.,  a  Delaware   corporation  (the  "Senior  Subordinated  Notes")  are  not
outstanding  and  have not  been  replaced  with a debt  issue  with  comparable
provisions   requiring   redemption  or  otherwise   imposing   requirements  or
restrictions on the corporation or the issuer of such  replacement debt issue in
the event a person or group becomes a 30% Holder. For purposes of this Part 4, a
"person"  shall  include any natural  person and any  corporation,  partnership,
joint  venture,  trust,   unincorporated   organization,   or  other  entity  or
organization.

     4B. CONVERSION PROCEDURE.
     (i) Each  conversion  of shares of  Nonvoting  Common  Stock into shares of
Common Stock pursuant to Part 4A above shall be effected by the surrender of the
certificate  or  certificates  representing  the shares to be  converted  at the
principal  office of the  corporation at any time during normal  business hours,
together with a written notice by the holder of such shares of Nonvoting  Common
Stock stating that such holder desires to convert the shares, or a stated number
of the shares,  of Nonvoting  Common Stock  represented  by such  certificate or
certificates  into shares of Common Stock.  Each  conversion  shall be deemed to
have  been  effected  as of the  close of  business  on the  date on which  such
certificate  or  certificates  have been  surrendered  and such  notice has been
received,  and at such time the rights of the holder of the converted  shares of
Nonvoting  Common  Stock as such holder shall cease and the person or persons in
whose name or names the certificate or  certificates  for shares of Common Stock
are to be issued upon such conversion  shall be deemed to have become the holder
or holders of record of the shares of Common Stock represented thereby.

     (ii) Promptly after the surrender of such  certificates  and the receipt of
such written notice,  the corporation shall issue and deliver in accordance with
the surrendering  holder's  instructions (a) the certificate or certificates for
the shares of Common Stock  issuable upon such  conversion and (b) a certificate
representing  any shares of Nonvoting Common Stock which were represented by the
certificate or  certificates  surrendered to the  corporation in connection with
such conversion but which were not converted.

     (iii)  The  issuance  of  certificates  for  shares of  Common  Stock  upon
conversion  of shares of Nonvoting  Common Stock will be made without  charge to
the holders of such shares for any issuance tax in respect thereof or other cost
incurred by the  corporation in connection  with such conversion and the related
issuance of shares of Common Stock.

     (iv) The  corporation  at all times shall reserve and keep available out of
its  authorized but unissued  shares of Common Stock,  solely for the purpose of
issuance upon the conversion of shares of Nonvoting Common Stock, such number of
shares of Common Stock as may be issuable upon the conversion of all outstanding
shares of  Nonvoting  Common  Stock.  All  shares of Common  Stock  which are so
issuable  shall,  when  issued,  be duly  and  validly  issued,  fully  paid and
nonassessable,  and free from all taxes,  liens,  and charges.  The  corporation
shall take all such  actions as may be  necessary to assure that all such shares
of Common  Stock may be so issued  without  violation of any  applicable  law or
governmental  regulation or any requirements of any domestic securities exchange
upon which shares of Common Stock may be listed  (except for official  notice of
issuance  which  will  be  immediately   transmitted  by  the  corporation  upon
issuance).

     (v) The  corporation  shall not close its books  against  the  transfer  of
shares of  Nonvoting  Common  Stock or shares of Common Stock issued or issuable
upon  conversion  of shares of Nonvoting  Common Stock in any manner which would
interfere with the timely conversion of shares of Nonvoting Common Stock.

     (vi)  If  the  corporation  in  any  manner   subdivides  or  combines  the
outstanding  shares  of  Common  Stock  or  Nonvoting  Common  Stock,  then  the
outstanding   shares  of  the  other  of  such   classes   of  stock   shall  be
proportionately subdivided or combined in a similar manner.

     Part 5. AMENDMENT AND WAIVER.
     No  amendment  or  waiver of any  provision  of this  Section  4.3 shall be
effective  without  the prior  approval of the holders of a majority of the then
outstanding shares of Nonvoting Common Stock voting as a separate class.

                                  ARTICLE FIFTH

     The  corporation   shall  indemnify  all  officers  and  directors  of  the
corporation to the fullest extent permitted by the Delaware General  Corporation
Law,  as amended  from time to time.  To the  fullest  extent  permitted  by the
Delaware  General  Corporation Law as it now exists or may hereafter be amended,
no  director  of the  corporation  shall be  liable  to the  corporation  or its
stockholders  for monetary  damages arising from a breach of fiduciary duty owed
to the corporation.

                                  ARTICLE SIXTH

     The corporation is to have perpetual existence.

                                 ARTICLE SEVENTH

     In  furtherance  and not in limitation of the powers  conferred by statute,
the Board of Directors of the corporation is expressly authorized to make, alter
or repeal the by-laws of the corporation.

                                ARTICLE EIGHTH

     Meetings  of  stockholders  may be held  within  or  without  the  State of
Delaware,  as the  by-laws  of the  corporation  may  provide.  The books of the
corporation may be kept outside the State of Delaware at such place or places as
may be designated  from time to time by the Board of Directors or in the by-laws
of the corporation.

                                  ARTICLE NINTH

     The corporation  reserves the right to amend,  alter,  change or repeal any
provision contained in this Restated  Certificate of Incorporation in the manner
now or hereafter prescribed herein and by the laws of the State of Delaware, and
all  rights  conferred  upon  stockholders  herein are  granted  subject to this
reservation.

                                  ARTICLE TENTH

     This Restated  Certificate of Incorporation  supersedes and takes the place
of the heretofore existing  Certificate of Incorporation of this corporation and
any amendments and supplements thereto.

                                ARTICLE ELEVENTH

     The  provisions  of this ARTICLE  ELEVENTH  shall  become  operative on the
effective  date of the first  registration  statement  filed by the  corporation
under the Securities Act of 1933, as amended, relating to the public offering of
Common Stock of the corporation.

                         11.1 SECTION 203 NOT APPLICABLE

     The  corporation  shall not be governed by the provisions of Section 203 of
the General Corporation Law of the State of Delaware.

                  11.2 SPECIAL MEETINGS OF STOCKHOLDERS; VOTING

     Special  meetings of  stockholders  of the corporation may be called by the
Board of  Directors,  such  Person or  Persons  as may be  authorized  to call a
special meeting by the corporation's  by-laws,  or by the holders of 20% (twenty
percent) of the  corporation's  Voting Shares.  The holders of a majority of the
Voting Shares shall constitute a quorum at all meetings of stockholders.  When a
quorum  is  present  or  represented  by proxy at any  meeting,  the vote of the
holders of a majority of the Voting Shares  present in person or  represented by
proxy and voting shall decide any question brought before the meeting, except as
otherwise  provided by law or the  provisions of ARTICLE  FOURTH or this ARTICLE
ELEVENTH.  All  Voting  Shares  shall be  entitled  to one vote per share on any
matter submitted to a vote of stockholders,  except as otherwise provided by the
provisions  of  this  ARTICLE  ELEVENTH.  All  proxies,   ballots,   votes,  and
tabulations  that identify the particular vote of holders of Voting Shares shall
be confidential  and shall not be disclosed  except (i) to independent  election
inspectors appointed by the corporation,  who shall not be directors,  officers,
or  employees  of the  corporation,  (ii) as  required  by law,  or  (iii)  when
expressly requested by the voting stockholder.

                11.3 ACTION BY STOCKHOLDERS IN LIEU OF A MEETING

     Any action  required by  Delaware  law to be taken at any annual or special
meeting of stockholders of the corporation,  or any action which may be taken at
any  annual or  special  meeting of such  stockholders,  may be taken  without a
meeting,  without  prior notice and without a vote,  if a consent or consents in
writing,  setting  forth the action so taken,  shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary  to  authorize  or take such  action at a meeting  at which all shares
entitled to vote  thereon  were present and voting and shall be delivered to the
corporation by delivery to its registered office in Delaware,  the corporation's
principal place of business,  or an officer or agent of the  corporation  having
custody  of the  book in which  proceedings  of  meetings  of  stockholders  are
recorded.  Delivery made to the corporation's registered office shall be by hand
or by certified or registered mail, return receipt requested.

                       11.4 ELECTION OF BOARD OF DIRECTORS

     (a) Annual Election. Directors of the corporation shall not be divided into
classes,  and the term of each  director  shall expire at the annual  meeting of
stockholders.

     (b) Cumulative  Voting.  At all elections of directors of the  corporation,
each holder of Voting Shares or of any class or classes or of a series or series
thereof  shall be  entitled  to as many votes as shall equal the number of votes
which (except for this  provision as to cumulative  voting) he would be entitled
to cast  for the  election  of  directors  with  respect  to his  Voting  Shares
multiplied  by the number of directors to be elected by him, and he may cast all
of such votes for a single  director or may distribute  them among the number to
be voted for, or for any two or more of them, as he may see fit.

     (c) Vacancies.  Vacancies on the corporation's Board of Directors and newly
created  directorships  shall  not be  filled  by  the  corporation's  board  of
directors  for a period  of 90 days  commencing  on the  effective  date of such
vacancy or new  directorship,  and,  during such 90-day  period,  the holders of
Voting Shares may fill such vacancy or newly created directorship.

                              11.5 STOCK ISSUANCES

     (a) Vote Required for Certain Sales of  Securities.  Except as set forth in
subsection  (b) of this Section  11.5,  in addition to any  affirmative  vote of
stockholders  required by any  provision  of law, the  Restated  Certificate  of
Incorporation or by-laws of the corporation,  or any policy adopted by the Board
of Directors of the corporation, the corporation shall not, and shall not permit
any Subsidiary  to, on or after the date the  corporation's  stockholders  adopt
this Section 11.5,  issue or sell any equity  security of the corporation or any
Subsidiary  to any Person who would be, after giving  effect to such issuance or
sale,  an  Interested  Person,  without the  affirmative  vote of the holders of
Voting Shares which represent at least a majority of the aggregate  voting power
of all outstanding Voting Shares,  excluding Voting Shares beneficially owned by
such Person,  voting together as a single class.  Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that a lesser
percentage  may  be  specified,  by  law  or any  agreement  with  any  national
securities exchange or otherwise.

     (b) When a Vote is Not Required.  The  provisions of subsection (a) of this
Section 11.5 shall not be  applicable  with respect to any issuance of shares of
Nonvoting  Common  Stock and also shall not be  applicable  with  respect to any
issuance of any shares of stock (i)  pursuant to any stock  split-up or division
effected  by the  corporation  on a pro  rata  basis to all  stockholders,  (ii)
pursuant to any  dividend on shares of the  corporation's  stock that is paid by
the  corporation in shares of capital stock of the corporation or any Subsidiary
on a pro  rata  basis  to all  stockholders,  (iii)  pursuant  to  any  dividend
reinvestment  plan  adopted by the  corporation  in which all  stockholders  are
eligible  to  participate,  or (iv) upon the  exercise of rights or options of a
type referred to in subsection (b) of Section 11.7.

                          11.6 RESTRICTION OF GREENMAIL

     (a) Vote Required for Certain  Acquisitions  of  Securities.  Except as set
forth in subsection  (b) of this Section  11.6,  in addition to any  affirmative
vote of stockholders  required by any provision of law, the Restated Certificate
of  Incorporation  or by-laws of the  corporation,  or any policy adopted by the
Board of Directors of the corporation,  the corporation shall not, and shall not
permit any Subsidiary to,  knowingly  effect any direct or indirect  purchase or
other acquisition (including, without limitation,  redemptions and exchanges) of
any equity security of a class of securities  issued by the corporation which is
registered  pursuant to Section 12 of the  Exchange  Act, at a price which is in
excess  of the  Market  Price  of such  equity  security  on the  date  that the
understanding  to effect such  transaction  is entered  into by the  corporation
(whether or not such transaction is concluded or a written agreement relating to
such  transaction  is  executed  on such  date,  such  date  to be  conclusively
established by  determination  of the Board of  Directors),  from any Interested
Person,  without  the  affirmative  vote of the holders of Voting  Shares  which
represent at least a majority of the aggregate  voting power of all  outstanding
Voting Shares,  excluding  Voting Shares  beneficially  owned by such Interested
Person,  voting  together  as a single  class.  Such  affirmative  vote shall be
required notwithstanding the fact that no vote may be required, or that a lesser
percentage may be specified, by law or any agreement with any Person.

     (b) When a Vote is Not Required.  The  provisions of subsection (a) of this
Section 11.6 shall not be applicable with respect to:

          (i) any purchase,  acquisition,  redemption,  or exchange of Preferred
     Stock,  the  purchase,  acquisition,  redemption,  or  exchange of which is
     provided for in the provisions of the Restated Certificate of Incorporation
     of the corporation  establishing the designations,  rights, and preferences
     of such Preferred Stock;

          (ii) any purchase or other  acquisition of equity  securities  made as
     part  of a  tender  or  exchange  offer  by  the  corporation  to  purchase
     securities  of the same class made on the same terms to all holders of such
     securities and complying with the applicable  requirements  of the Exchange
     Act and the rules and regulations  thereunder (or any successor  provisions
     to such Act, rules, or regulations); or

          (iii) any acquisition by the corporation of shares of its Common Stock
     solely in exchange for the same number of shares of Nonvoting Common Stock.

                             11.7 RIGHTS AND OPTIONS

     (a) Vote Required for Rights and Option.  Except as set forth in subsection
(b) of this Section 11.7,  the  corporation  shall not, and shall not permit any
Subsidiary  to,  create or issue any rights or  options  entitling  the  holders
thereof to purchase from the  corporation  or any such  Subsidiary any shares of
its capital stock of any class or classes  without the  affirmative  vote of the
holders of Voting  Shares which  represent at least a majority of the  aggregate
voting power of all outstanding Voting Shares.

     (b) When a Vote is Not Required.  The  provisions of subsection (a) of this
Section  11.7  shall not be  applicable  with  respect  to any rights or options
issued to employees of the  corporation  or any  Subsidiary in  connection  with
normal  compensation  arrangements  entered  into  by  the  corporation  or  any
Subsidiary in the ordinary course of business.

                             11.8 GOLDEN PARACHUTES

     The  corporation   shall  not  enter  into  or  extend  any  agreements  or
arrangements  pursuant  to which  compensation  would  be paid to any  director,
officer,  or employee of the  corporation  which is contingent  upon a change of
control, merger, or acquisition of the corporation, without the affirmative vote
of the  holders of Voting  Shares  which  represent  at least a majority  of the
aggregate voting power of all outstanding Voting Shares, excluding Voting Shares
beneficially  owned  by  any  Person  that  is a  party  to  such  agreement  or
arrangement, voting together as a single class.

                              11.9 CLASSES OF STOCK

     The designations, powers, preferences, rights, qualifications, limitations,
and  restrictions  in respect of any class or classes of stock and any series of
any  class of  stock  of the  corporation  shall  be set  forth in the  Restated
Certificate of Incorporation  of the corporation;  and the Board of Directors of
the corporation shall not have the authority to fix by resolution or resolutions
any  of  such  designations,   powers,  preferences,   rights,   qualifications,
limitations, and restrictions.

                            11.10 CERTAIN DEFINITIONS

     For the purposes of this ARTICLE ELEVENTH:

     (i) "Affiliate" and "associate" shall have the respective meanings ascribed
to such  terms in Rule  12b-2 of the  General  Rules and  Regulations  under the
Exchange Act, as in effect on June 30, 1990.

     (ii) "Beneficial Owner" and "beneficial  ownership" shall have the meanings
ascribed  to such terms in Rule 13d-3 and Rule  13d-5 of the  General  Rules and
Regulations under the Exchange Act, as in effect on June 30, 1990.

     (iii)  "Exchange  Act" shall mean the  Securities  Exchange Act of 1934, as
amended.

     (iv) "Interested  Person" shall mean any person (other than the corporation
or any Subsidiary) that is the direct or indirect  Beneficial Owner of more than
5% (five  percent) of the  aggregate  voting power of the Voting  Shares and any
affiliate  or  associate  of any such  Person.  For the  purpose of  determining
whether a Person is an Interested  Person,  the outstanding  Voting Shares shall
include  unissued  shares  of  voting  stock of the  corporation  of  which  the
Interested Person is the Beneficial Owner but shall not include any other shares
of  voting  stock of the  corporation  which  may be  issuable  pursuant  to any
agreement,  arrangement,  or understanding,  upon exercise of conversion rights,
warrants,  or  options,  or  otherwise  to any Person who is not the  Interested
Person.

     (v)  "Market  Price"  of shares  of a class of an  equity  security  of the
corporation on any day shall mean the highest sale price (regular way) of shares
of such  class of such  equity  security  on such  day,  or if that day is not a
trading  day,  then on the trading day  immediately  preceding  such day, on the
largest principal national  securities  exchange on which such class of stock is
then listed or  admitted to trading,  or if such class of stock is not listed or
admitted  to trading  on any  national  securities  exchange,  then the  highest
reported sale price for such shares in the  over-the-counter  market as reported
on the  NASDAQ  National  Market  System,  or if such  sale  price  shall not be
reported on such system, then the highest bid price so reported,  or if such bid
price shall not be reported thereon, then as such bid price shall be reported by
the National Quotation Bureau Incorporated,  or if the price is not determinable
as set forth above,  then as  determined in good faith by the Board of Directors
of the corporation.

     (vi) "Person" shall mean any individual,  partnership,  firm,  corporation,
association, trust, unincorporated organization, or other entity, as well as any
syndicate  or group  deemed to be a person  pursuant to Section  13(d)(5) of the
Exchange Act, as in effect on June 30, 1990.

     (vii)  "Subsidiary"  shall mean any company of which the corporation  owns,
directly  or  indirectly,  (A) a majority  of the  outstanding  shares of equity
securities  or (B) shares having a majority of the voting power  represented  by
all of the outstanding  voting stock of such company  entitled to vote generally
in the election of directors.  For the purpose of determining  whether a company
is a Subsidiary,  the outstanding  voting stock and shares of equity  securities
thereof shall include unissued shares of which the corporation is the Beneficial
Owner  but,  except  for the  purpose  of  determining  whether a  company  is a
Subsidiary  for the purpose of  subsection  (iv)  hereof,  shall not include any
other shares which may be issuable  pursuant to any agreement,  arrangement,  or
understanding,  or upon the exercise of conversion rights, warrants, or options,
or otherwise to any Person who is not the corporation.

     (viii) "Voting Shares" shall mean the  outstanding  shares of capital stock
of the corporation entitled to vote generally in the election of directors.

                                 11.11 AMENDMENT

     Notwithstanding  any  provisions  to the  contrary of ARTICLE  NINTH of the
Restated Certificate of Incorporation of the corporation, the provisions of this
ARTICLE  ELEVENTH  shall not be  amended  without  the  affirmative  vote of the
holders of Voting  Shares which  represent at least  two-thirds of the aggregate
voting power of all outstanding Voting Shares.

     4. The foregoing  Restated  Certificate of Incorporation of Pamida Holdings
Corporation  has been duly adopted by the Board of Directors of the  Corporation
in accordance with the provisions of Section 245 of the General  Corporation Law
of the State of Delaware.

     IN WITNESS WHEREOF,  this Restated  Certificate of  Incorporation  has been
duly  executed by the Chairman of the Board and Chief  Executive  Officer of the
Corporation this 6th day of March, 1998.

                                        PAMIDA HOLDINGS CORPORATION, a
                                        Delaware corporation

                                     By:/s/Steven S. Fishman
                                        Steven  S. Fishman,  Chairman of the
                                        Board and Chief Executive Officer