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                           AMENDED AND RESTATED BYLAWS

                                       OF

                             PAYLESS CASHWAYS, INC.,

                                   AS AMENDED



                                    ARTICLE I
                                     OFFICES

         Section 1. Registered  Office. The registered office of the corporation
in the State of Delaware shall be located at The Corporation Trust Center,  1209
Orange Street,  Wilmington,  New Castle County,  Delaware 19801. The name of the
corporation's  registered  agent at such address shall be The Corporation  Trust
Company. The registered office and/or registered agent of the corporation may be
changed from time to time by action of the board of directors.

         Section 2. Other Offices.  The corporation may have additional  offices
at such other  places,  both within and without  the State of  Delaware,  as the
board of  directors  may from  time to time  determine  or the  business  of the
corporation may require.

                                   ARTICLE II
                            MEETINGS OF STOCKHOLDERS

         Section 1. Annual  Meetings.  Annual meetings of  stockholders  for the
election  of  directors,  and for such  other  business  as may be stated in the
notice of the meeting, shall be held at such place, either within or without the
State of  Delaware,  and at such  time and date as the  board of  directors,  by
resolution,  shall  determine and as set forth in the notice of the meeting.  If
the  board of  directors  fails so to  determine  the  time,  date and  place of
meeting,  the annual  meeting  of  stockholders  shall be held at the  principal
executive  office of the  corporation on the first Tuesday in April. If the date
of the annual meeting shall fall upon a legal holiday, the meeting shall be held
on the next succeeding business day.

         Section 2.  Special  Meetings.  Except as  otherwise  required  by law,
special  meetings of the  stockholders for any purpose or purposes may be called
by the  Chairman  or Chief  Executive  Officer,  by  resolution  of the board of
directors  adopted by the affirmative  vote of a majority of the directors or by
the written  request of the holders of record  representing  at least 25% of the
voting  power of all of the shares of the  corporation  entitled  to vote on the
issue or issues to be presented to the meeting.

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         Section 3. Place of Meetings.  The board of directors may designate any
place,  either within or without the State of Delaware,  as the place of meeting
for any annual  meeting.  The person or persons  calling a special  meeting  may
designate  any place,  either  within or without the State of  Delaware,  as the
place of meeting for such special meeting.  If no designation is made, the place
of the  annual or  special  meeting  shall be in the State of the  corporation's
principal executive offices.

         Section 4. Notice.  Whenever  stockholders are required or permitted to
take action at a meeting,  written or printed notice stating the place, date and
time of such  meeting,  and,  in the case of a special  meeting,  the purpose or
purposes  for which the  meeting is called,  shall be given to each  stockholder
entitled  to vote at such  meeting  not less than ten nor more than  sixty  days
before the date of the meeting.  Such notices may be given, either personally or
by mail, by or at the direction of the board of directors,  the chief  executive
officer or the secretary.  Written notice may also be given by telegram,  telex,
cable or  facsimile  transmission  followed,  if required  by  Delaware  law, by
deposit in the United States mail, with postage prepaid.  If mailed, such notice
shall be deemed to be  delivered  when  deposited  in the  United  States  mail,
postage prepaid,  addressed to the stockholder at his, her or its address as the
same appears on the records of the corporation. Attendance of a stockholder at a
meeting  shall  constitute a waiver of notice of such  meeting,  except when the
stockholder attends for the express purpose of objecting at the beginning of the
meeting to the  transaction of any business  because the meeting is not lawfully
called or convened.

         Section 5.  Stockholders  List.  The officer having charge of the stock
ledger of the corporation  shall make, at least ten days before every meeting of
the stockholders,  a complete list of the stockholders  entitled to vote at such
meeting arranged in alphabetical order,  showing the address of each stockholder
and the number of shares registered in the name of each  stockholder.  Such list
shall be open to the examination of any stockholder,  for any purpose germane to
the meeting,  during ordinary  business hours, for a period of at least ten days
prior to the meeting,  either at a place within the city where the meeting is to
be held,  which place shall be specified in the notice of the meeting or, if not
so specified,  at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting  during the whole time
thereof and may be inspected by any stockholder who is present.

         Section 6. Quorum.  The holders of a majority of the outstanding shares
of capital stock of the  corporation,  present in person or represented by proxy
at a meeting of the stockholders and entitled to vote thereat,  shall constitute
a quorum at such  meeting,  except as  otherwise  provided  by statute or by the
certificate  of  incorporation.  If a quorum is not  present,  the  holders of a
majority of the shares  present in person or represented by proxy at the meeting
and  entitled to vote  thereat  may  adjourn the meeting to another  time and/or
place,  without further notice to the stockholders other than an announcement at
such  meeting  until  holders of the number of shares  required to  constitute a
quorum shall be present in person or by proxy.  When a quorum is once present to
commence  a  meeting  of  stockholders,  it is  not  broken  by  the  subsequent
withdrawal of any stockholders or their proxies.

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         Section 7. Adjourned  Meetings.  When a meeting is adjourned to another
time and/or place, notice need not be given of the adjourned meeting if the time
and place  thereof  are  announced  at the meeting at which the  adjournment  is
taken. The corporation may transact any business at the adjourned  meeting which
might have been  transacted at the original  meeting.  If the adjournment is for
more than thirty days or if after the adjournment a new record date is fixed for
the adjourned  meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.

         Section 8. Vote  Required.  When a quorum is present,  the  affirmative
vote of a majority  of votes cast by holders of shares  entitled  to vote on the
subject matter shall be the act of the stockholders,  unless the question is one
upon which,  by express  provisions of an  applicable  law, the  certificate  of
incorporation or these bylaws, a different vote is required,  in which case such
express provision shall govern and control the decision of such question.

         Section 9. Voting Rights.  Except as otherwise provided by the Delaware
General  Corporation Law or by the certificate of incorporation,  and subject to
Section 3 of Article VI hereof,  every stockholder shall at every meeting of the
stockholders  be  entitled  to one vote in person or by proxy for each  share of
capital stock having voting power held by such stockholder.

         Section 10. Proxies.  Each stockholder entitled to vote at a meeting of
stockholders  may authorize  another  person or persons to act for him or her by
proxy, but such proxy,  whether revocable or irrevocable,  shall comply with the
requirements  of Delaware law. A duly executed  proxy shall be irrevocable if it
states that it is irrevocable and if, and only as long as, it is coupled with an
interest  sufficient in law to support an irrevocable power. A proxy may be made
irrevocable  regardless  of whether the interest  with which it is coupled is an
interest in the stock itself or an interest in the  corporation  generally.  Any
proxy is suspended  when the person  executing the proxy is present at a meeting
of stockholders and elects to vote,  except that when such proxy is coupled with
an interest and the fact of the interest  appears on the face of the proxy,  the
agent named in the proxy shall have all voting and other  rights  referred to in
the proxy,  notwithstanding  the presence of the person  executing the proxy. At
each meeting of the stockholders,  and before any voting commences,  all proxies
filed at or  before  the  meeting  shall be  submitted  to and  examined  by the
secretary of the  corporation or a person  designated by the  secretary,  and no
shares  may be  represented  or voted  under a proxy  that has been  found to be
invalid or irregular.

         Section  11.  Proposed  Business  for  Annual  Meetings.  Except as may
otherwise be required by applicable law or regulation or be expressly authorized
by the  entire  board of  directors,  a  stockholder  may make a  nomination  or
nominations for director of the corporation at an annual meeting of stockholders
or  may  bring  up  any  other  matter  for  consideration  and  action  by  the
stockholders  at an annual  meeting of  stockholders,  only if the provisions of
subsections A, B, C and D hereto shall have been  satisfied.  If such provisions
shall  not  have  been  satisfied,  any  nomination  sought  to be made or other
business sought to be presented by a stockholder for consideration and action by
the  stockholders at such a meeting shall be deemed not properly

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brought before the meeting,  shall be ruled by the chairman of the meeting to be
out of order, and shall not be presented or acted upon at the meeting.

         A.       The stockholder  must be a stockholder of record on the record
                  date  for  such  annual   meeting,   must  continue  to  be  a
                  stockholder of record at the time of such meeting, and must be
                  entitled to vote thereat.

         B.       The  stockholder  must  deliver  or  cause  to  be delivered a
                  written notice to the secretary of the corporation.  Such     
                  notice must be received  by the  secretary  no less than sixty
                  days prior to the first anniversary  of  the  previous  year's
                  annual  meeting;  provided,  however,  that if the date of the
                  annual meeting has been changed by more than thirty  days from
                  the date of the previous  year's annual  meeting,  such notice
                  must be received by the  secretary not later  than  ten days  
                  following  the date on which public  announcement  of the date
                  of such meeting is first made. The notice  shall  specify (a) 
                  the name and address of the  stockholder as they appear on the
                  books of the corporation, (b) the  number  of  shares  of  the
                  corporation which are beneficially  owned by the  stockholder;
                  (c) any  material  interest of the stockholder in the proposed
                  business  described in the notice;  (d) if such business is a 
                  nomination  for director, each nomination sought to be made,  
                  together with the reasons for each nomination,a description of
                  the qualifications and business or professional experience  of
                  each proposed nominee and a statement signed by each nominee  
                  indicating  his or her  willingness  to serve if elected,  and
                  disclosing the  information  about him or her that is required
                  by the Securities  Exchange Act of 1934, as amended           
                  (the "1934 Act"),  and the rules and  regulations  promulgated
                  thereunder to be disclosed  in the proxy  materials  for the  
                  meeting  involved  if  he  or  she  were  a  nominee  of  the 
                  corporation for election as one of its directors; (e) if  such
                  business is other than a nomination  for director,  the nature
                  of the business, the reasons why it is sought to be raised and
                  submitted for a vote of the stockholders  and if and why it is
                  deemed by the stockholder to be beneficial to the corporation,
                  and (f) if  so  requested  by  the  corporation,  all  other  
                  information  that would be required to be filed with the      
                  Securities and Exchange Commission if,  with  respect to  the 
                  business proposed to be brought before the meeting, the person
                  proposing such business was a participant in a solicitation   
                  subject to Section 14 of the 1934 Act.

         C.       Notwithstanding satisfaction of the provisions of subsection A
                  and  subsection  B, the  proposed  business  described  in the
                  notice may be deemed  not to be  properly  brought  before the
                  meeting if, pursuant to state law or to any rule or regulation
                  of the Securities and Exchange Commission, it was offered as a
                  stockholder  proposal  and was omitted from the notice of, and
                  proxy  material for, the meeting (or any  supplement  thereto)
                  authorized by the board of directors.

         D.       In  the  event  such  notice  is  timely  given   pursuant  to
                  subsection  B  and  the  business  described  therein  is  not
                  disqualified  pursuant to  subsection  C, such business may

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                  be presented by, and only by, the  stockholder  who shall have
                  given the notice required by subsection B or a  representative
                  of such  stockholder  who is  qualified  under  the law of the
                  State of Delaware to present the proposal on the stockholder's
                  behalf at the meeting.

                                   ARTICLE III
                                    DIRECTORS

         Section 1. General Powers. The business and affairs of the  corporation
shall be managed by or under the direction of the board of directors.

         Section 2. Number, Election and Term of Office. Upon the effective date
of these bylaws,  the number of directors  which shall  constitute  the board of
directors  shall be nine.  Thereafter,  the  number  of  directors  which  shall
constitute the board of directors shall be established from time to time by, and
only  by,   resolution  duly  adopted  by  a  majority  of  the  directors  then
constituting the entire board of directors.  Except as otherwise provided in the
certificate  of  incorporation  or in Section 3 of this  Article III, a director
shall be elected at an annual meeting of the  stockholders by a plurality of the
votes of the shares present in person or represented by proxy at the meeting and
entitled to vote in the election of directors. A director's term of office shall
be  as  provided  in  the  certificate  of  incorporation  and,  to  the  extent
applicable,  the order of the United  States  Bankruptcy  Court for the  Western
District of Missouri  confirming  the First  Amended Plan of  Reorganization  of
Payless   Cashways,   Inc.,   an   Iowa   corporation,   as  a   debtor   and  a
debtor-in-possession  in a Chapter 11 proceeding in such Court. A director shall
hold office until the annual meeting for the year in which such  director's term
expires and until a successor shall be duly elected and qualified, or until such
director's   earlier  death,   resignation,   disqualification   or  removal  as
hereinafter provided. Directors need not be stockholders of the corporation.

         Section  3.  Vacancies.   Vacancies  and  newly  created  directorships
resulting from any increase in the authorized  number of directors may be filled
only by the board of directors and in the manner  provided in the certificate of
incorporation.  The term of office of a director so chosen  shall be as provided
in the certificate of  incorporation.  Each director so chosen shall hold office
until the annual meeting for the year in which such  director's term expires and
until a successor shall be duly elected and qualified,  or until such director's
earlier death, resignation, disqualification or removal as hereinafter provided.

         Section 4. Removal and Resignation. Any director or the entire board of
directors  may be removed  at such time and in such  manner as  provided  in the
certificate  of  incorporation.  Any  director  who is  also an  officer  of the
corporation who resigns his or her position as an officer of the corporation, or
is  terminated,  disqualified  or removed as an officer of the  corporation,  or
otherwise  ceases  to serve  in such  capacity,  shall  also be  deemed  to have
resigned as a director of the  corporation.  Any director may resign at any time
upon written notice to the corporation.

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         Section 5. Regular  Meetings.  The annual meeting of each newly elected
board  of  directors  shall  be  held  without  notice  other  than  this  bylaw
immediately after, and at the same place as, the annual meeting of stockholders.
Other regular  meetings of the board of directors may be held without  notice at
such time and at such place, either within or without the State of Delaware,  as
shall from time to time be determined by resolution of the board of directors.

         Section 6. Special Meetings. Special meetings of the board of directors
may be called by or at the request of the  Chairman,  Chief  Executive  Officer,
President  or a  majority  of the board of  directors.  The person or persons so
calling such special  meeting shall designate the time and place for the holding
of such meeting.  The place so designated may be any place in the United States,
either  within or without the State of Delaware.  Notice of any special  meeting
shall be given at least two days  prior to the date  fixed for such  meeting  by
written  notice  delivered  personally,  by mail, or by a nationally  recognized
overnight delivery service to each director at his business address, or by telex
or  telecopy.  If notice  is given by mail,  such  notice  shall be deemed to be
delivered  three days after such notice is deposited with the United States mail
properly  addressed,  postage prepaid.  If notice is given by overnight delivery
service,  such  notice  shall be deemed  delivered  one day after such notice is
delivered  during  business hours to such overnight  delivery  service  properly
addressed,  postage  prepaid.  If  notice  is  given  personally  or by telex or
telecopy, such notice shall be deemed to be delivered when received. Neither the
business to be transacted at nor the purpose of any special meeting of the board
of  directors  need be  specified  in the  notice  or  waiver  of notice of such
meeting.  Any member of the board of directors or any  committee  thereof who is
present at a meeting  shall be  conclusively  presumed to have waived  notice of
such  meeting  except  when such  member  attends  for the  express  purpose  of
objecting  at the  beginning of the meeting to the  transaction  of any business
because the meeting is not lawfully called or convened.

         Section 7. Quorum,  Required  Vote and  Adjournment.  A majority of the
total  number of  directors  then in office  shall  constitute  a quorum for the
transaction  of  business at any  meeting of the board of  directors.  Except as
otherwise  provided by the certificate of incorporation,  the vote of a majority
of directors  present at a meeting at which a quorum is present shall be the act
of the board of directors. A majority of the directors present, whether or not a
quorum is present,  may  adjourn any regular or special  meeting of the board of
directors to another time and place.  Notice need not be given of the  adjourned
meeting if the time and place to which the meeting is adjourned are announced at
the meeting at which  adjournment  is taken,  and at the  adjourned  meeting any
business  may be  transacted  that might have been  transacted  at the  original
meeting.

         Section 8.  Committees.  The board of directors  may, by  resolution or
resolutions  adopted  by a  majority  of the  whole  board,  designate  an audit
committee, a compensation  committee,  and a corporate governance and nominating
committee,  each such  committee  to  consist  of one or more  directors  of the
corporation.  The audit  committee  shall  monitor  and review the  adequacy  of
financial,  operating and system controls, financial reporting,  compliance with
legal, ethical and regulatory requirements,  and the performance of the external
and  internal  auditors,  serving as the conduit for  communication  between the
board of directors and external and internal auditors. The audit committee shall
recommend  to the board of  directors  the  independent  public

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accountants to conduct the annual examination of financial statements and shall 
also review the proposed  scope and fees of the  examination,  as well as its   
results, and any significant,  non-audit  services and fees.  The  compensation 
committee shall review  the  compensation  (wages,  salaries,   supplemental    
compensation  and benefits) of the executive  officers of the corporation,  
including approval of compensation and benefit policies,  approval of direct and
indirect executive officer compensation, administration  of stock programs,  and
oversight of the corporation's  executive development plan. The compensation 
committee shall make recommendations  to the board of directors  regarding  
compensation and benefits for directors. The corporate governance and nominating
committee shall review the size, composition and  effectiveness  of the board of
directors,  including retention, tenure and retirement policies, criteria for 
selection of nominees to the board of directors,  qualifications of candidates, 
membership and structure of board committees, and developments in corporate 
governance.

         In  addition  to the  committees  specifically  provided  for in  these
bylaws, the board of directors of the corporation,  by resolution or resolutions
adopted by a majority of the whole board of  directors,  may designate any other
committees,  each such  committee to consist of one or more of the  directors of
the corporation. To the extent provided in such resolution or resolutions,  each
such committee  shall have and may exercise all of the authority of the board of
directors in the management of the corporation.  Notwithstanding  the foregoing,
no  committee  established  hereunder  shall have the power or  authority to (a)
approve,  adopt or recommend to the  stockholders any action or matter expressly
required  by  the  Delaware  General  Corporation  Law  to be  submitted  to the
stockholders for approval,  (b) amend the certificate of incorporation or adopt,
amend or repeal any bylaw of the corporation,  (c) authorize  dividends or other
distributions,  (d) fill  vacancies  on the  board of  directors,  (e)  adopt an
agreement of merger or  consolidation  under  Section 251 or 252 of the Delaware
General  Corporation  Law or a certificate  of ownership and merger  pursuant to
Section 253 of the  Delaware  General  Corporation  Law;  (f)  recommend  to the
stockholders  the sale,  lease or  exchange of all or  substantially  all of the
corporation's property and assets or recommend to the stockholders a dissolution
of the  corporation  or a revocation of a dissolution  of the  corporation,  (g)
authorize or approve a reacquisition of shares, except according to a formula or
method  prescribed by the board of  directors,  and (h) authorize or approve the
issuance or sale or contract for sale of shares,  or determine  the  designation
and  relative  rights,  preferences,  and  limitations  of a class or  series of
shares, except that the board of directors may authorize a committee or a senior
executive  officer  of  the  corporation  to do so  within  limits  specifically
prescribed by the board of directors.

         The  designation of any such  committee and the  delegation  thereto of
authority  shall not  operate to relieve the board of  directors,  or any member
thereof, of any responsibility imposed upon the board or any director by law.

         The board of directors  shall elect the members of any such  committee,
which members  shall serve at the pleasure of the board.  The board of directors
may designate one or more directors as alternate  members of any committee,  who
may replace any absent or disqualified member at any meeting of such committee.

<PAGE>8


         Section 9.  Committee  Rules.  Each committee of the board of directors
may fix its own rules of  procedure  and shall hold its  meetings as provided by
such rules,  except as may otherwise be provided by a resolution of the board of
directors  designating  such  committee.  Unless  otherwise  provided  in such a
resolution,  a majority  of the  members of the  committee  shall  constitute  a
quorum.  In the event that a member and that member's  alternate,  if alternates
are  designated  by the board of  directors  as  provided  in  Section 8 of this
Article III, of such committee is or are absent or  disqualified,  the member or
members thereof present at any meeting and not disqualified from voting, whether
or not such  member or members  constitute  a quorum,  may  unanimously  appoint
another  member of the board of  directors to act at the meeting in place of any
such absent or disqualified member.

         Each committee  shall keep regular  minutes of its  proceedings,  which
minutes shall be recorded in the minute book of the  corporation.  The secretary
or an  assistant  secretary  of the  corporation  may act as  secretary  for any
committee if the committee so requests.

         Section  10.  Lead  Director;   Chairman.   In  an  effort  to  enhance
efficiency,  independence and informed  decision-making,  the board of directors
may  designate  a Lead  Director  when the  Chairman  of the Board and the Chief
Executive  Officer  are the same  person,  who shall  perform a number of tasks,
including: acting as Chairman of the Board when the Chairman/CEO is unable or it
is inadvisable for the  Chairman/CEO  to chair the Board;  acting as Chairman of
the Corporate  Governance and Nominating  Committee;  convening  meetings of the
independent   directors';   coordinating  and   communicating   CEO  performance
evaluations;  and  representing  independent  directors in  communications  with
stockholders,  as  appropriate.  When the  Chief  Executive  Officer  is not the
Chairman,  the  board of  directors  may  select  one of its  number to serve as
Chairman.   The  Chairman  of  the  Board  shall  preside  at  all  meetings  of
stockholders and of the board of directors and shall have and perform such other
duties as may be assigned by the board of directors

         Section  11.  Meetings  of  Independent   Directors.   The  independent
directors of the corporation shall meet at least annually to discuss significant
corporate governance matters,  executive review, management succession and other
items.

         Section 12. Communications Equipment. Members of the board of directors
or any committee thereof may participate in and act at any meeting of such board
or committee through the use of a conference  telephone or other  communications
equipment  by means of which all persons  participating  in the meeting can hear
each other,  and  participation  in the meeting  pursuant to this section  shall
constitute presence in person at the meeting.

         Section 13. Presumption of Assent. A director of the corporation who is
present at a meeting of the Board of Directors at which action on any  corporate
matter is taken shall be presumed to have  assented to such action unless his or
her  dissent  shall be entered  in the  minutes  of the  meeting or unless  such
director  shall file his or her  written  dissent to such action with the person
acting as the secretary of the meeting before the  adjournment  thereof or shall
forward such dissent by  registered  or certified  mail to the  secretary of the
corporation immediately after

<PAGE>9


the adjournment of the meeting.  Such right to dissent shall not apply to a 
director who voted in favor of such action.

         Section 14. Action by Written Consent.  Unless otherwise  restricted by
the certificate of  incorporation,  any action required or permitted to be taken
at any meeting of the board of directors,  or of any committee  thereof,  may be
taken  without a meeting if all members of the board or  committee,  as the case
may be, consent  thereto in writing.  Such written  consents shall be filed with
the minutes of proceedings of the board or committee.

         Section  15.  Compensation.  The  board  of  directors  shall  fix  the
compensation of directors.  The directors may be paid their expenses, if any, of
attendance at each meeting of the board of directors and may be paid a fixed sum
for  attendance  at each meeting of the board of directors or a stated salary as
director.  No  such  payment  shall  preclude  any  director  from  serving  the
corporation in any other capacity and receiving compensation  therefor.  Members
of special or standing committees may be allowed like compensation for attending
committee  meetings.  Any Lead Director and any director serving as the chairman
of a committee may receive additional compensation for serving as such.

                                   ARTICLE IV
                                    OFFICERS

         Section 1.  Number.  The officers of the  corporation  shall be a Chief
Executive Officer, a President,  one or more Vice Presidents,  a Treasurer and a
Secretary, all of whom shall be elected by the board of directors and shall hold
office until their successors are elected and qualified.  In addition, the board
of directors may elect such Assistant Secretaries and Assistant Treasurers as it
may deem  proper.  The board of directors  may appoint  such other  officers and
agents as it may deem advisable, who shall hold their offices for such terms and
shall  exercise such powers and perform such duties as shall be determined  from
time to time by the board of directors. Any number of offices may be held by the
same  person  except  that  neither  the  chairman  of the  board  nor the chief
executive  officer shall also hold the office of secretary.  In its  discretion,
the board of  directors  may  choose not to fill any office for any period as it
may deem  advisable,  except  that the  offices of chief  executive  officer and
secretary shall be filled as expeditiously as possible.

         Section 2. Election and Term of Office. The officers of the corporation
shall be elected  annually by the board of directors  at its first  meeting held
after  each  annual  meeting of  stockholders  or as soon  thereafter  as may be
practicable.  Vacancies  may be filled or new offices  created and filled at any
meeting  of the board of  directors.  Each  officer  shall hold  office  until a
successor is duly elected and qualified or until such  officer's  earlier death,
resignation, disqualification or removal as hereinafter provided.

         Section 3.  Removal.  Any officer or agent  elected by the board of    
directors may be removed by the board of directors  whenever in its judgment the
best interests of the corporation would be served thereby.

<PAGE>10


         Section 4.  Vacancies. Any vacancy occurring in any office  because  of
death, resignation, removal, disqualification or otherwise, may be filled by the
board of directors for the unexpired portion of the term.

         Section 5.  Compensation.  Compensation of all executive officers shall
be fixed by the board of  directors,  and no  officer  shall be  prevented  from
receiving such compensation by virtue of his or her also being a director of the
corporation.

         Section 6. The Chief Executive  Officer.  The Chief  Executive  Officer
shall  have  general   charge  and   management   of  the   business,   affairs,
administration and operations of the corporation, shall carry out such duties as
are  delegated  by the  board  of  directors,  shall  see that  all  orders  and
resolutions  of the board of  directors  are  carried  out,  shall have power to
execute all contracts and agreements authorized by the board of directors, shall
make reports to the board of directors and stockholders,  and shall perform such
other duties as are incident to the office or are properly required by the board
of directors. The Chief Executive Officer shall be responsible for the direction
and supervision of all personnel  within his or her appointive  powers and shall
also  have the  power to  discipline  or  discharge  such  personnel.  The Chief
Executive Officer shall sit with the board of directors in deliberation upon all
matters pertaining to the general business and policies of the corporation.

         Section 7.  President.  The President  shall have such powers and shall
perform such duties as shall be assigned to him or her by the board of directors
or the Chairman as appropriate. Except as the board of directors shall authorize
execution  thereof in some other  manner,  the President  shall  execute  bonds,
mortgages and other contracts on behalf of the corporation.

         Section 8. Vice Presidents.  Each Vice President shall have such powers
and shall perform such duties as shall be assigned to him or her by the board of
directors or Chief Executive Officer, as appropriate.

         Section 9.  Treasurer.  The Treasurer shall be the custodian of all the
corporate  funds and  securities  and shall  keep full and  accurate  account of
receipts and disbursements in books belonging to the corporation,  shall deposit
all moneys and other  valuables in the name and to the credit of the corporation
in such  depositaries  as may be  designated  by the board of  directors,  shall
disburse  the  funds  of the  corporation  as may be  ordered  by the  board  of
directors, or the Chairman, Chief Executive Officer or President,  taking proper
vouchers  for such  disbursement,  and shall render to the board of directors at
the regular meetings of the board of directors, or whenever they may request it,
an account of all  transactions  as Treasurer and of the financial  condition of
the  corporation.  The  Treasurer  shall at all  reasonable  times  exhibit  the
corporation's  books  and  accounts  to any  director  of the  corporation  upon
application at the principal  office of the  corporation  during business hours.
The  Treasurer  shall have such other powers and shall perform such other duties
as may from time to time be  assigned  to him or by her by the  Chief  Executive
Officer or the board of directors,  as appropriate.  If required by the board of
directors,  the  Treasurer  shall give the  corporation  a bond for the faithful
discharge of the  Treasurer's  duties in such amount and with such surety as the
board shall prescribe.

<PAGE>11


         Section 10. Secretary.  The Secretary shall give, or cause to be given,
notice of all  meetings of  stockholders  and  directors  and all other  notices
required  by law or by these  bylaws,  and in case of the  absence or refusal or
neglect so to do, any such notice may be given by any person thereunto  directed
by the Chairman,  Chief Executive  Officer,  or President,  or by the directors,
upon whose  request  the  meeting is called as  provided  in these  bylaws.  The
Secretary  shall be the  custodian  of,  and shall  make or cause to be made the
proper entries in, the minute book of the  corporation  and such other books and
records  as the  board of  directors  may  direct.  The  Secretary  shall be the
custodian of the corporate seal for the  corporation and shall affix or cause to
be affixed such seal to such  contracts  and other  instruments  as the board of
directors  may direct and shall  perform  such other  duties as may from time to
time be  assigned to him or her by the Chief  Executive  Officer or the board of
directors, as appropriate.

         Section 11. Assistant Treasurers and Assistant  Secretaries.  Assistant
Treasurers  and Assistant  Secretaries,  if any, shall be appointed by the Chief
Executive  Officer and shall have such powers and shall  perform  such duties as
shall be assigned to them,  respectively,  by the Chief Executive Officer or the
board of directors, as appropriate.

         Section 12. Other Officers,  Assistant  Officers and Agents.  Officers,
assistant  officers  and  agents,  if any,  other  than those  whose  duties are
provided for in these bylaws,  shall have such authority and perform such duties
as may from time to time be prescribed by resolution of the board of directors.

         Section  13.  Absence or  Disability  of  Officers.  In the case of the
absence or disability of any officer of the  corporation  and that of any person
hereby  authorized to act in such officer's place during such officer's  absence
or  disability  or for  any  other  reason  the  board  of  directors  may  deem
sufficient,  the board of directors  may by  resolution  delegate the powers and
duties of such officer to any other  officer,  to any director,  or to any other
person whom it may select.

                                    ARTICLE V
                INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS

         Section 1. Procedure for Indemnification of Directors and Officers. Any
indemnification  of a  director  or  officer  of the  corporation  or advance of
expenses under Article VIII of the  certificate of  incorporation  shall be made
promptly,  and in any event within thirty days,  upon the written request of the
director or officer.  If a determination by the corporation that the director or
officer is entitled to  indemnification  pursuant to this Article V is required,
and the corporation  fails to respond within sixty days to a written request for
indemnity,  the corporation shall be deemed to have approved the request. If the
corporation  denies a  written  request  for  indemnification  or  advancing  of
expenses, in whole or in part, or if payment in full pursuant to such request is
not made within thirty days, the right to indemnification or advances as granted
by this Article V shall be  enforceable  by the director or officer in any court
of  competent  jurisdiction.  Such  person's  costs  and  expenses  incurred  in
connection with successfully  establishing his or her right to  indemnification,
in  whole or in  part,  in any such  action  shall  also be  indemnified  by the
corporation. It shall be a defense  to any such  action  (other  than an action 

<PAGE>12


brought to enforce a claim for expenses  incurred in defending any proceeding in
advance of its final disposition  where the  required  undertaking, if any, has 
been tendered to the corporation) that the claimant has not met the standards of
conduct which make it permissible under the Delaware General Corporation Law for
the corporation to indemnify the claimant for the amount claimed, but the burden
of such defense shall be on the corporation. Neither the failure of the
corporation (including its board of directors,  independent legal counsel or its
stockholders)  to have made a  determination  prior to the  commencement of such
action  that  indemnification  of the  claimant  is proper in the  circumstances
because he or she has met the  applicable  standard  of conduct set forth in the
Delaware General Corporation Law, nor an actual determination by the corporation
(including   its  board  of   directors,   independent   legal  counsel  or  its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a  presumption  that the claimant has
not met the applicable standard of conduct.

         Section 2. Article Not Exclusive. The rights to indemnification and the
payment of expenses  incurred in defending a proceeding  in advance of its final
disposition  conferred  in this  Article V shall not be  exclusive  of any other
right  which  any  person  may have or  hereafter  acquire  under  any  statute,
provision  or the  certificate  of  incorporation,  bylaw,  agreement,  vote  of
stockholders or disinterested directors or otherwise.

         Section 3.  Employees  and  Agents.  Persons who are not covered by the
foregoing  provisions of this Article V and who are or were  employees or agents
of the corporation, or who are or were serving at the request of the corporation
as employees or agents of another corporation, partnership, joint venture, trust
or other enterprise,  may be indemnified to the extent authorized at any time or
from  time to time by the board of  directors.  Expenses  (including  attorneys'
fees)  incurred  by  employees  and  agents  may be paid  upon  such  terms  and
conditions, if any, as the board of directors deems appropriate;  provided, that
such expenses may only be paid by the  corporation  in advance of a proceeding's
final  disposition  upon  receipt  of an  undertaking  by or on  behalf  of such
employee or agent to repay such amount if it shall ultimately be determined that
he or she is not entitled to be indemnified by the corporation.

         Section 4. Contract  Rights.  The provisions of this Article V shall be
deemed to be a contract  right  between  the  corporation  and each  director or
officer who serves in any such capacity at any time while this Article V and the
relevant  provisions of the Delaware General Corporation Law or other applicable
law are in effect,  and any repeal or modification of this Article V or any such
law shall not affect any rights or obligations then existing with respect to any
state of facts or proceeding then existing.

         Section 5. Merger or  Consolidation.  For  purposes of this  Article V,
references  to "the  corporation"  shall  include,  in addition to the resulting
corporation,  any  constituent  corporation  (including  any  constituent  of  a
constituent)  absorbed  in a  consolidation  or merger  which,  if its  separate
existence  had  continued,  would have had power and  authority to indemnify its
directors,  officers,  and  employees  or  agents,  so that any  person who is a
director,  officer,  employee or agent of such constituent  corporation or is or
was  serving  at the  request of such  constituent  corporation  as a  director,
officer, employee or agent of another corporation,  partnership,  joint

<PAGE>13


venture, trust or other enterprise, shall stand in the same position under this 
Article V with respect to the resulting or surviving  corporation  as he or she 
would have with respect to such constituent corporation if its separate 
existence had continued.

                                   ARTICLE VI
                              CERTIFICATES OF STOCK

         Section  1. Form.  Every  holder of stock in the  corporation  shall be
entitled to have a certificate  signed by, or in the name of, the corporation by
the chief executive  officer or a  vice-president  of the corporation and by the
secretary or an assistant secretary of the corporation, certifying the number of
shares of the corporation owned by such holder.  The signature of any such chief
executive  officer,  vice-president,  secretary  or assistant  secretary  may be
facsimiles.  In case any officer or officers who have signed, or whose facsimile
signature or signatures have been used on, any such  certificate or certificates
shall cease to be such officer or officers of the  corporation,  whether because
of death, resignation or otherwise, before such certificate or certificates have
been  delivered  by  the  corporation,  such  certificate  or  certificates  may
nevertheless  be issued and delivered as though the person or persons who signed
such certificate or certificates or whose facsimile signature or signatures have
been  used  thereon  had  not  ceased  to be such  officer  or  officers  of the
corporation.  All  certificates  for shares shall be  consecutively  numbered or
otherwise  identified.  The name of the  person to whom the  shares  represented
thereby  are  issued,  with the  number  of shares  and date of issue,  shall be
entered  on the books of the  corporation.  Shares  of stock of the  corporation
shall be  transferred  on the  books of the  corporation  only by the  holder of
record  thereof or by such holder's  attorney duly  authorized in writing,  upon
surrender to the corporation of the certificate or certificates  for such shares
endorsed  by the  appropriate  person  or  persons,  with such  evidence  of the
authenticity of such endorsement,  transfer,  authorization and other matters as
the corporation may reasonably  require,  and accompanied by all necessary stock
transfer stamps. In that event, it shall be the duty of the corporation to issue
a new certificate or certificates  and record the transaction on its books.  The
board of directors may appoint a bank or trust company  organized under the laws
of the  United  States  or any state  thereof  to act as its  transfer  agent or
registrar,  or both, in  connection  with the transfer of any class or series of
securities of the corporation.

         Section 2. Lost  Certificates.  The board of directors may direct a new
certificate  or  certificates  to be  issued  in  place  of any  certificate  or
certificates  previously  issued by the  corporation  alleged to have been lost,
stolen or  destroyed,  upon the making of an affidavit of the fact by the person
claiming  the  certificate  of stock  to be  lost,  stolen  or  destroyed.  When
authorizing  such  issue of a new  certificate  or  certificates,  the  board of
directors may, in its  discretion  and as a condition  precedent to the issuance
thereof,  require the owner of such lost,  stolen or  destroyed  certificate  or
certificates, or his or her legal representative, to give the corporation a bond
sufficient  to  indemnify  the  corporation  against  any claim that may be made
against the corporation on account of the loss, theft or destruction of any such
certificate or the issuance of such new certificate.

<PAGE>14


         Section 3. Fixing a Record Date for Stockholder Meetings. In order that
the corporation may determine the stockholders  entitled to notice of or to vote
at any  meeting  of  stockholders  or any  adjournment  thereof,  the  board  of
directors  may fix a record  date,  which record date shall not precede the date
upon which the  resolution  fixing  the  record  date is adopted by the board of
directors,  and which record date shall not be more than sixty nor less than ten
days before the date of such meeting. If no record date is fixed by the board of
directors, the record date for determining stockholders entitled to notice of or
to vote at a meeting of the  stockholders  shall be the close of business on the
next day preceding the day on which notice is given, or if notice is waived,  at
the close of business on the day next  preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of or to vote
at a meeting of  stockholders  shall apply to any  adjournment  of the  meeting;
provided, however, that the board of directors may fix a new record date for the
adjourned meeting.

         Section 4. Fixing a Record Date for Other  Purposes.  In order that the
corporation  may determine the  stockholders  entitled to receive payment of any
dividend or other  distribution  or allotment or any rights or the  stockholders
entitled to exercise any rights in respect of any change, conversion or exchange
of stock, or for the purposes of any other lawful action, the board of directors
may fix a record  date,  which record date shall not precede the date upon which
the resolution fixing the record date is adopted, and which record date shall be
not more than sixty days prior to such action.  If no record date is fixed,  the
record date for  determining  stockholders  for any such purpose shall be at the
close  of  business  on the day on  which  the  board of  directors  adopts  the
resolution relating thereto.

         Section  5.  Registered  Stockholders.  Prior to the  surrender  to the
corporation of the  certificate or  certificates  for a share or shares of stock
with a request to record the transfer of such share or shares,  the  corporation
may treat the registered owner as the person entitled to receive  dividends,  to
vote,  to receive  notifications  and  otherwise  to exercise all the rights and
powers  of an  owner.  The  corporation  shall  not be  bound to  recognize  any
equitable  or other  claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other notice thereof.

                                   ARTICLE VII
                               GENERAL PROVISIONS

         Section  1.  Dividends.   Dividends  upon  the  capital  stock  of  the
corporation  may be declared by the board of directors at any regular or special
meeting,  subject  to and in the  manner  provided  by law  and  the  applicable
provisions of the certificate of incorporation, if any. Dividends may be paid in
cash,  in property,  or in shares of the capital  stock.  Before  payment of any
dividend,  there may be set aside out of any funds of the corporation  available
for dividends  such sum or sums as the board of directors  from time to time, in
its  absolute  discretion,  think  proper  as a  reserve  or  reserves  to  meet
contingencies,  to equalize dividends, to repair or maintain any property of the
corporation,  or to accomplish any other purpose, and the board of directors may
modify or abolish any such reserve in the manner in which it was created.


<PAGE>15


         Section 2. Checks, Drafts or Orders. All checks, drafts or other orders
for the  payment  of money by or to the  corporation  and all  notes  and  other
evidences of indebtedness  issued in the name of the corporation shall be signed
by such officer or  officers,  agent or agents of the  corporation,  and in such
manner,  as shall from time to time be  determined by resolution of the board of
directors or a duly authorized  committee thereof.  In the absence thereof,  the
signature of the Chief Executive Officer shall suffice.

         Section 3. Contracts.  The board of directors may authorize any officer
or  officers,  or any agent or  agents,  of the  corporation  to enter  into any
contract or to execute and deliver any  instrument  in the name of and on behalf
of the  corporation,  and such  authority may be general or confined to specific
instances.  In the absence thereof, the signature of the Chief Executive Officer
shall suffice.

         Section 4. Fiscal  Year.  The fiscal year of the  corporation  shall be
determined  by  resolution  of the  board  of  directors.  In the  absence  of a
resolution by the board of directors,  the fiscal year of the corporation  shall
end on the last Saturday in the month of November.

         Section 5.  Corporate  Seal.  The board of  directors  shall  provide a
corporate  seal which shall be in the form of a circle and shall have  inscribed
thereon the name of the corporation, the year of its incorporation and the words
"Corporate  Seal,  Delaware."  The seal may be used by causing it or a facsimile
thereof to be impressed, affixed or otherwise reproduced.

         Section 6. Voting Securities Owned by Corporation. Voting securities in
any  other  corporation  held by the  corporation  shall be  voted by the  chief
executive officer,  unless the board of directors specifically confers authority
to vote with  respect  thereto,  which  authority  may be general or confined to
specific instances,  upon some other person or officer. Any person authorized to
vote securities shall have the power to appoint  proxies,  with general power of
substitution.

         Section 7. Section  Headings.  Section headings in these bylaws are for
convenience of reference only and shall not be  given any substantive effect in 
limiting or otherwise construing any provision herein.

         Section 8. Inconsistent Provisions.  In the event that any provision of
these bylaws is or becomes inconsistent with any provision of the certificate of
incorporation, the Delaware General Corporation Law or any other applicable law,
the  provision  of these  bylaws  shall not be given any effect to the extent of
such inconsistency but shall otherwise be given full force and effect.

                                  ARTICLE VIII
                                   AMENDMENTS

         These  bylaws  may be  amended,  altered,  or  repealed  and new bylaws
adopted in the manner provided in the certificate of incorporation.


<PAGE>16


                            Certificate of Secretary

         The above and  foregoing  is a true and correct copy of the Amended and
Restated Bylaws of Payless Cashways, Inc., as Amended as of February 17, 1999.

                                     /s/ Gary D. Gilson
                                     ------------------
                                     Gary D. Gilson, Corporate Secretary