BY-LAWS
                                    OF
                       MONTGOMERY WARD HOLDING CORP.
                     (formerly BFB ACQUISITION CORP.)

             (as amended and restated as of December 29, 1994)





<PAGE>
                             TABLE OF CONTENTS

                                                                       Page

ARTICLE I      Offices . . . . . . . . . . . . . . . . . . . . . . . . .  1
     Section 1.     Registered Office. . . . . . . . . . . . . . . . . .  1
     Section 2.     Other Offices. . . . . . . . . . . . . . . . . . . .  1

ARTICLE II          Meetings of Stockholders . . . . . . . . . . . . . .  1
     Section 1.     Place of Meetings. . . . . . . . . . . . . . . . . .  1
     Section 2.     Annual Meeting . . . . . . . . . . . . . . . . . . .  1
     Section 3.     Notice of Annual Meeting . . . . . . . . . . . . . .  1
     Section 4.     List of Stockholders . . . . . . . . . . . . . . . .  1
     Section 5.     Special Meetings of Stockholders . . . . . . . . . .  2
     Section 6.     Procedure at Stockholders' Meetings. . . . . . . . .  2
     Section 7.     Quorum . . . . . . . . . . . . . . . . . . . . . . .  2
     Section 8.     Majority Vote. . . . . . . . . . . . . . . . . . . .  2
     Section 9.     Proxies and Voting of Shares . . . . . . . . . . . .  2
     Section 10.    Consents to Corporate Action . . . . . . . . . . . .  3

ARTICLE III         Directors. . . . . . . . . . . . . . . . . . . . . .  3
     Section 1.     Number, Tenure, Qualifications and Vacancies . . . .  3
     Section 2.     Resignations . . . . . . . . . . . . . . . . . . . .  5
     Section 3.     Removal of Directors . . . . . . . . . . . . . . . .  5
     Section 4.     General Powers . . . . . . . . . . . . . . . . . . .  5
     Section 5.     Place of Meetings. . . . . . . . . . . . . . . . . .  5
     Section 6.     First Meeting of New Board . . . . . . . . . . . . .  5
     Section 7.     Regular Meetings . . . . . . . . . . . . . . . . . .  5
     Section 8.     Special Meetings . . . . . . . . . . . . . . . . . .  5
     Section 9.     Quorum . . . . . . . . . . . . . . . . . . . . . . .  5
     Section 10.    Certain Supermajority Requirements . . . . . . . . .  6
     Section 11.    Informal Action by Directors . . . . . . . . . . . .  9
     Section 12.    Telephone Meetings . . . . . . . . . . . . . . . . .  9
     Section 13.    Designation of Committees of Directors . . . . . . . 10
     Section 14.    Absence of a Committee Member. . . . . . . . . . . . 10
     Section 15.    Powers of Committees . . . . . . . . . . . . . . . . 10
     Section 16.    Record of Proceedings. . . . . . . . . . . . . . . . 10
     Section 17.    In General . . . . . . . . . . . . . . . . . . . . . 10

ARTICLE IV          Notices to Stockholders and Directors. . . . . . . . 10
     Section 1.     Notice . . . . . . . . . . . . . . . . . . . . . . . 10
     Section 2.     Waiver of Notice . . . . . . . . . . . . . . . . . . 11

ARTICLE V      Officers. . . . . . . . . . . . . . . . . . . . . . . . . 11
     Section 1.     Number and Title . . . . . . . . . . . . . . . . . . 11
     Section 2.     Election and Qualification . . . . . . . . . . . . . 11
     Section 3.     Appointment of Additional Officers . . . . . . . . . 11
     Section 4.     Compensation . . . . . . . . . . . . . . . . . . . . 11
     Section 5.     Term of Office, Removal and Vacancies. . . . . . . . 11
     Section 6.     Resignations . . . . . . . . . . . . . . . . . . . . 11
     Section 7.     The Chairman of the Board. . . . . . . . . . . . . . 12
     Section 8.     The Vice Chairman of the Board . . . . . . . . . . . 12
     Section 9.     President. . . . . . . . . . . . . . . . . . . . . . 12
     Section 10.    The Vice Presidents. . . . . . . . . . . . . . . . . 12
     Section 11.    The Secretary. . . . . . . . . . . . . . . . . . . . 12
     Section 12.    Assistant Secretaries. . . . . . . . . . . . . . . . 13
     Section 13.    The Treasurer. . . . . . . . . . . . . . . . . . . . 13
     Section 14.    Bond . . . . . . . . . . . . . . . . . . . . . . . . 13
     Section 15.    Assistant Treasurers . . . . . . . . . . . . . . . . 13

ARTICLE VI          Stock and Stockholders . . . . . . . . . . . . . . . 13
     Section 1.     Certificate of Stock . . . . . . . . . . . . . . . . 13
     Section 2.     Classes and Series . . . . . . . . . . . . . . . . . 13
     Section 3.     Signatures . . . . . . . . . . . . . . . . . . . . . 14
     Section 4.     Lost Certificates. . . . . . . . . . . . . . . . . . 14
     Section 5.     Transfers of Stock . . . . . . . . . . . . . . . . . 14
     Section 6.     Fixing Record Date . . . . . . . . . . . . . . . . . 14
     Section 7.     Registered Stockholders. . . . . . . . . . . . . . . 15

ARTICLE VII    Indemnification . . . . . . . . . . . . . . . . . . . . . 15

ARTICLE VIII   General Provisions. . . . . . . . . . . . . . . . . . . . 15
     Section 1.     Dividends. . . . . . . . . . . . . . . . . . . . . . 15
     Section 2.     Checks . . . . . . . . . . . . . . . . . . . . . . . 15
     Section 3.     Fiscal Year. . . . . . . . . . . . . . . . . . . . . 15
     Section 4.     Seal . . . . . . . . . . . . . . . . . . . . . . . . 15
     Section 5.     Certain Definitions. . . . . . . . . . . . . . . . . 15

ARTICLE IX          Amendments . . . . . . . . . . . . . . . . . . . . . 21
<PAGE>
                                 ARTICLE I

                                  Offices

          Section 1.    Registered Office. The registered office shall be in the
City of Dover, County of Kent, State of Delaware.

          Section 2.    Other Offices.  The corporation may also have 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.    Place of Meetings.  All meetings of the stockholders for
the election of directors shall be held at such place as may be fixed from time
to time by the board of directors; at least ten (10) days' notice shall be given
to the stockholders of the place so fixed or, in the event of the failure of the
board of directors to fix such place, at the principal executive office of the
corporation.  Meetings of stockholders for any purpose may be held at such time
and place, within or without the State of Delaware, as may be fixed from time to
time by the board of directors or as shall be stated in the notice of the 
meeting or in a duly executed waiver of notice thereof.

          Section 2.   Annual Meeting.  The annual meeting of stockholders shall
be held on the third Thursday in May if not a legal holiday, and if a legal
holiday, then on the next secular day following, at 2:00 P.M., or at such other
date and time as shall be designated from time to time by the board of directors
and stated in the notice of the meeting or in a duly executed waiver of notice
thereof, at which the stockholders shall elect by a plurality vote, subject to
the provisions of Section 1 of Article III, persons to the board of directors,
and transact such other business as may properly be brought before the meeting. 
The meeting may be adjourned from time to time and place to place until its
business is completed. If the election of directors shall not be held on the day
designated herein for any annual meeting, or at any adjournment thereof, the
board of directors shall cause the election to be held at a special meeting of
the stockholders as soon thereafter as may be convenient.

          Section 3.     Notice of Annual Meeting.  Written notice of the annual
meeting stating the place, date and hour of the meeting shall be given to each
stockholder entitled to vote at such meeting not less than ten (10) nor more 
than sixty (60) days before the date of meeting.

          Section 4.     List of Stockholders. The officer who has charge of the
stock ledger of the Corporation shall prepare and make, at least ten (10) days
before every meeting of stockholders, a complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order, and 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 (10) days prior to the meeting, either at a place within
the Chicago metropolitan area, 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 5.     Special Meetings of Stockholders.  Except as otherwise
provided in the certificate of incorporation with respect to holders of 
Preferred Stock (as defined in Article VIII) and except as otherwise provided in
Section 1 of Article III of these by-laws, special meetings of stockholders of 
the corporation for any purpose or purposes, may be called only by the chairman 
of the board, the vice chairman of the board, the president, the board of 
directors pursuant to a resolution approved by a majority of the board of 
directors, or at the written request of the holders of not less than a majority 
of the stock entitled to vote thereat.

          Section 6.     Procedure at Stockholders' Meetings.  The order of
business and all other matters of procedure at every meeting of the stockholders
may be determined by the presiding officer.  The board of directors may appoint
two or more inspectors of election to serve at every meeting of the stockholders
at which directors are to be elected.  In the absence of such appointment by the
board of directors, the presiding officer may appoint one or more inspectors of
election to serve at any such meeting.

          Section 7.     Quorum.  The holders of a majority of the stock issued
and outstanding and entitled to vote thereat, present in person or represented
by proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by these by-laws,by statute
or by the certificate of incorporation.  If, however, such quorum shall not be
present or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy shall have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented.  At
any meeting held for the purpose of electing directors at which the holders of
a class of stock shall have the right, voting as a class, to elect one or more
directors, the presence, in person or by proxy, of the holders of a majority of
such class of stock then outstanding shall be required to constitute a quorum of
such stock for such election.  At any such meeting or adjournment thereof, the
absence of the quorum of such class of stock shall not prevent the election of
directors other than the director or directors which the holders of such stock
are entitled to elect,and the absence of a quorum for the election of such other
directors shall not prevent the election of the directors which the holders of
such class of stock are entitled to elect, and in the absence of either or both
such quorums, a majority of the holders present in person or by proxy of the
stock which lacks a quorum shall have the power to adjourn the meeting for the
election of directors which they are entitled to elect from time to time without
notice other than announcement to the meeting until a quorum shall be present. 
At any adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally noticed.  If the adjournment is for more than (30) 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.    Majority Vote.  When a quorum is present at any meeting,
the vote of the holders of a majority of the stock having voting power, present
in person or represented by proxy, shall decide any question brought before such
meeting, unless the question is one upon which by express provision of statute,
these by-laws or of the certificate of incorporation, a different vote is
required, in which case such express provision shall govern and control the
decision of such question.

          Section 9.     Proxies and Voting of Shares.  At any meeting of the
stockholders every stockholder having the right to vote shall be entitled to 
vote in person, or by proxy appointed by an instrument in writing subscribed by 
such stockholder and bearing a date not more than three (3) years prior to said
meeting, unless said instrument provides for a longer period.  Unless a date
shall have been fixed as a record date for the determination of its stockholders
entitled to vote, no share of stock shall be voted on at any election for
directors which shall have been transferred on the books of the corporation
within twenty (20) days next preceding such election of directors.

          Section 10.    Consents to Corporate Action.  Any action which is
required to be or may be taken at any annual or special meeting of stockholders
of the corporation may be taken without a meeting, without prior notice and
without a vote, if consents in writing, setting forth the action so taken, shall
have been signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or to take such
action at a meeting at which all shares entitled to vote thereon were present 
and voted; provided, however, that prompt notice of the taking of the corporate
action without a meeting and by less than unanimous written consent shall be
given to those stockholders who have not consented in writing.


                                ARTICLE III

                                 Directors

          Section 1.     Number, Tenure, Qualifications and Vacancies.  Subject
to the provisions of the certificate of incorporation, the number of directors
which shall constitute the total number of directors shall be as specified in
this Section 1 and shall change in accordance with the procedures specified in
this Section 1.  Whenever in these by-laws the vote, consent or waiver of two-
thirds (2/3) of the members of the board of directors is required, the number of
directors required shall be determined without regard to any vacancies on the
board of directors.

          (a)  Number of Directors.  Except as otherwise provided in the
     other paragraphs of this Section 1, the total number of directors which
     shall be elected by the stockholders shall be eleven (11), of which six
     (6) shall be designated by the Designator (as defined in Article VIII) and
     five (5) shall be designated by GE Capital (as defined in Article VIII).

          (b)  Change in Control Upon 50% GE Capital Common Stock Ownership
     Change.  At such time, if any, as GE Capital and GE Capital Affiliates (as
     defined in Article VIII) shall cease to own, in the aggregate, more than
     fifty percent (50%) of the Shares (as defined in Article VIII) which GE
     Capital and GE Capital Affiliates have purchased on or about the date as
     of which the Stockholders' Agreement (as defined in Article VIII) was
     executed and delivered, the number of directors which the Designator shall
     have the right to designate shall be increased by one (1) and the number
     of directors which GE Capital shall have the right to designate shall be
     reduced by one (1).  The Designator shall designate the director to be
     elected, and GE shall designate the director to be removed and shall
     effect such removal.

          (c)  Election of Directors After Substantial Reduction of GE
     Capital Class B Common Stock Ownership.  Upon the happening of the events
     provided for in Section B.2(b) of ARTICLE FOURTH of the certificate of
     incorporation, the total number of directors shall be automatically
     changed to nine (9) (not including the Preferred Stock Director (as
     defined in paragraph (e) of this Section 1), if any, referred to in
     paragraph (e) of this Section 1) and the holders of the Class A Common
     Stock (as defined in Article VIII) then outstanding, voting as a class,
     shall be entitled to elect seven (7) of such directors, and the holders of
     the Class B Common Stock (as defined in Article VIII) then outstanding,
     voting as a class, shall be entitled to elect two (2) of such directors;
     provided, however, that so long as the conditions specified in such
     Section B.2(b) with respect to the Account Purchase Agreement (as defined
     in Section 10(t) of Article III) and the ownership of Class B Common Stock
     by GE Capital or any GE Capital Affiliate remain in effect, GE Capital
     shall have the right to elect one (1) of the two (2) directors which the
     holders of the Class B Common Stock shall be entitled to elect and all
     holders of Class B Common Stock then outstanding in the aggregate shall be
     entitled to elect the other one (1) of the two (2) directors which the
     holders of Class B Common Stock shall be entitled to elect.

          (d)  Meetings of Stockholders.  Upon the happening of any of the
     events described in paragraphs (b) or (c) of this Section 1, in the event
     the board of directors shall fail to fill any vacancies resulting from the
     application of said paragraphs, or in the event a party shall fail to
     remove a director who that party was obligated to remove under the
     provisions of the applicable paragraph, the corporation shall call a
     special meeting of the stockholders at the expense of the corporation, for
     the propose of electing a new slate of directors, in accordance with the
     appropriate designations and class voting rights, as the case may be, and
     the term of office of the existing directors shall terminate upon the
     election of their successors.  If the corporation fails to so call such a
     special meeting, any party who is then entitled to designate directors
     shall have the right to call such a meeting at the expense of the
     corporation.

          (e)  Preferred Stock Director.  Anything elsewhere in these by-laws
     to the contrary notwithstanding, upon the happening, and during the
     continuation of the events described in Section A.6(b) of Article FOURTH
     of the certificate of incorporation, the holders of the Senior Preferred
     Stock (as defined in Article VIII), voting as a class, shall have the
     right to elect one (1) director (the "Preferred Stock Director") whereupon
     the total number of directors shall be automatically increased in order to
     provide one (1) vacancy to be filled by electing the Preferred Stock
     Director at a special meeting of stockholders called for that purpose. 
     Upon the happening of the events described in such Section A.6(b) which
     cause the termination of the term of office of any then Preferred Stock
     Director, as provided in such Section A.6(b), the total number of
     directors shall be automatically decreased by one (1) so as to eliminate
     the vacancy created by the termination of the term of the Preferred Stock
     Director, whereupon the total number of directors shall be and remain as
     provided by the other provisions of this Section 1 without regard to this
     paragraph (e), subject to the revesting of voting rights in the shares of
     Senior Preferred Stock in the event of the recurrence of the events
     described in such Section A.6(b).

          (f)  Designation of Replacements.  At any time in which a party has
     the right to designate a director pursuant to this Article III, if a
     director who has been so designated shall cease to serve as such (other
     than by reason of his removal as provided in this Article III), the party
     who designated that director shall have the right to designate his
     replacement.  At any time in which no party has the right to designate
     directors pursuant to this Article III, vacancies shall be filled in the
     manner provided in the Delaware GCL (as defined in Article VIII).

          Section 2.     Resignations.  Any director may resign at any time by
giving written notice to the board of directors, the chairman of the board, the
vice chairman of the board, the president or the secretary of the corporation. 
Such resignation shall take effect at the time specified therein; and, unless
tendered to take effect upon acceptance thereof, the acceptance of such
resignation shall not be necessary to make it effective.

          Section 3.   Removal of Directors.  At all times when any party or the
holders of any class of stock have the right to designate any director(s) or to
elect, as a class,any director(s), only such party or class, as the case may be,
who had the right to designate director(s) or to elect director(s) shall have 
the right to remove such director(s), which removals may be effected with or 
without cause at any special or annual meeting of stockholders or by written 
consent in lieu of a meeting.  At all other times, the right of the stockholders
to remove any director shall be as provided in the applicable provisions of the 
Delaware GCL.

          Section 4.     General Powers.  The business and affairs of the
corporation shall be managed by or under the direction of the board of directors
which may exercise all such powers of the corporation and do all such lawful 
acts as are not by statute or by the certificate of incorporation or by these 
by-laws directed or required to be exercised or done by the stockholders.

                    Meetings of the Board of Directors

          Section 5.     Place of Meetings.  The board of directors of the
corporation may hold meetings, both regular and special, either within or with-
out the State to Delaware.

          Section 6.     First Meeting of New Board.  The first meeting of the
board of directors after each election of new directors thereto shall be held at
such time and place as shall be specified in a notice given as provided in these
by-laws for special meetings of the board of directors, or as shall be specified
in a written waiver of notice signed by all of the directors.

          Section 7.     Regular Meetings.  Regular meetings of the board of
directors may be held without notice at such time and at such place as shall 
from time to time be determined by the board.

          Section 8.     Special Meetings.  Special meetings of the board of
directors may be called by the president. Upon the request in writing of two (2)
or more directors, the president or any other officer of the corporation shall
call a special meeting of the board of directors, notice of which shall be given
to each director at his usual place of business, or at such other address as
shall have been furnished by him for such purpose.  Such notice shall be given
at least forty-eight (48) hours before the meeting by telephone or by being
personally delivered, mailed or telegraphed, provided, that, if mailed, notice
shall be deemed effective upon receipt. Such notice need not include a statement
of the business to be transacted at, or the purpose of, any such meeting.

          Section 9.     Quorum.  At all meetings of the board of directors, a
majority of the board of directors shall constitute a quorum for the transaction
of business and the act of a majority of the directors present at any meeting at
which there is a quorum shall be the act of the board of directors, except as 
may be otherwise specifically provided by statute or by the certificate of
incorporation.  If a quorum shall not be present at any meeting of the board of
directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum 
shall be present.

          Section 10.  Certain Supermajority Requirements.  The affirmative vote
of not less than two-thirds (2/3) of the members of the board of directors of 
the corporation (but, in the case of paragraph (t) of this Section 10, instead 
of the aforesaid two-thirds (2/3) requirement, the affirmative vote of a 
majority of the directors designated by the Designator or, at any time in which 
class voting is in effect as provided in the certificate of incorporation, by a 
majority of the directors elected by the holders of Shares of Class A Common 
Stock) shall be required in order for the corporation to take, or permit any 
member of the Ward Group (as defined in Article VIII) to take, any of the 
following actions:

     (a)  a merger, consolidation or other business combination (other than
among members of the Ward Group and other than as part of an acquisition of
assets permitted pursuant to paragraph (m) of this Section (10));

     (b)  any of the following sales (other than intercompany sales within the
Ward Group, sales solely of inventory in the ordinary course of business, and
sale and leaseback transactions in the ordinary course of business or, to the
extent out of the ordinary course of business,consistent with the past practices
of the Ward Group):

          (i)  any sale of assets of the Ward Group (including assets
     consisting of shares of stock of a subsidiary of the corporation) where
     the gross proceeds of sale (exclusive of assumption of liabilities) are in
     an amount equal to the greater of (A) fifty million dollars ($50,000,000)
     or (B) twenty percent (20%) of the consolidated common stockholders'
     equity of the corporation as of the time of the sale; or 

          (ii) any sale of assets of the Ward Group (including assets
     consisting of shares of stock of a subsidiary of the corporation) to the
     extent the gross proceeds of sale (exclusive of assumption of
     liabilities), when added to the gross proceeds of all other sales of
     assets of the Ward Group (exclusive of assumption of liabilities)
     occurring during that fiscal year, exceed an amount equal to the greater
     of (A) one hundred million dollars ($100,000,000) or (B) thirty percent
     (30%) of the consolidated common stockholders' equity of the corporation
     as of the time of the sale; provided, however, that notwithstanding the
     foregoing limitation, any single sale of assets for gross proceeds not
     exceeding one million dollars ($1,000,000) (exclusive of assumption of
     liabilities) shall be excluded from the foregoing computation;

     (c)  amendments to the certificate of incorporation or by-laws of the
corporation (other than amendments to the by-laws permitted pursuant to Section
8.2 of the Stockholders' Agreement);

     (d)  payment of dividends on Shares (other than intercompany dividends
among members of the Ward Group);

     (e)  redemptions of Shares, other than pursuant to the provisions of the
Stockholders' Agreement or the Employee Stock Option Plan (as defined in Article
VIII);

     (f)  public or private offerings of debt or equity securities of any
member of the Ward Group, other than (i) to other members of the Ward Group,(ii)
pursuant to the Employee Stock Option Plan, or (iii) pursuant to Section 3.14 of
the Stockholders' Agreement, Section 6.1 of the Stockholders' Agreement with
respect to the offering of Shares in Demand Registrations (as defined in the
Stockholders' Agreement) on behalf of those Persons (as defined in Article VIII)
exercising their demand registration rights thereunder or Section 6.2 of the
Stockholders' Agreement with respect to the offering of Shares in Piggyback
Registrations (as defined in the Stockholders' Agreement) on behalf of those
Persons exercising their piggyback registration rights thereunder;

     (g)  guarantees of any indebtedness in excess of five million dollars
($5,000,000) for borrowed money of any Person other than a member of the Ward
Group;

     (h)  setting of annual financial goals and targets;

     (i)  the making of, or the entry into a binding commitment to make, any
capital expenditures which would cause the amount expended (or committed to be
expended) by the Ward Group for capital expenditures during a fiscal year to
exceed the capital expenditure budget to be contained in the annual financial
goals and targets of the Ward Group for such year by more than ten percent (10%)
of the budgeted amount;

     (j)  borrowings by any member of the Ward Group which would cause the
aggregate consolidated indebtedness of the corporation for money borrowed to
exceed an amount equal to twenty-five million dollars ($25,000,000), plus five
percent (5%) of the amount of the consolidated common stockholders' equity of 
the corporation measured at the time of such borrowings, but in determining both
the amount of such borrowings and the necessity for approval of two-thirds (2/3)
of the members of the board of directors, the following borrowings shall be
excluded:

          (i)  borrowings made in connection with the acquisition, pursuant
     to the Purchase Agreement (as defined in Article VIII) of Ward, and under
     the term loan, revolving credit, tax standby letter of credit, "Tax Loan"
     and commercial letter of credit facilities established in connection with
     such acquisition, borrowings pursuant to the Subordinated Loan Agreement
     dated June 23, 1988, between Ward and GE Capital, borrowings of any member
     of the Ward Group existing at the time of such acquisition, and borrowings
     made under any whole or partial refunding or replacement thereof without
     increasing the principal amount thereof, other than increases for closing
     costs (including, without limitation, prepayment penalties) incurred in
     connection with such refunding or replacement;

          (ii) purchase money financing incurred in accordance with the
     annual financial goals and targets of the Ward Group, and purchase money
     financing in connection with the issuance of notes pursuant to Sections
     3.8 and 3.9 of the Stockholders' Agreement or Sections 3.6 and 3.7 of the
     Terms and Conditions (as defined in Article VIII); it being understood
     that purchase money financing shall include financing, refinancing or
     funding of the acquisition price of real property (or any interest
     therein) or other fixed assets acquired hereafter by a member of the Ward
     Group, regardless of whether said financing, refinancing or funding is
     done at the time of, or subsequent to, the acquisition of any such real
     property (or interest therein) or other fixed assets;

          (iii)     intentionally omitted;

          (iv) borrowings made for the purpose of redeeming any of the
     Preferred Stock; or

          (v)  borrowings made pursuant to Section 4.4 of the Stockholders'
     Agreement;

     (k)  increases in compensation and/or fringe, welfare or pension benefits
for any member of the executive committee of the Ward Group, other than in
accordance with the practices and guidelines of the Ward Group in effect from
time to time (it being understood that any material change from the current
practices and guidelines shall require the affirmative vote of two-thirds (2/3)
of the members of the board of directors), but in no event beyond the increases
being given for comparable executives in comparable retail businesses,determined
from published survey data and guidelines;

     (l)  adoption of a plan of liquidation of the corporation;

     (m)  acquisition of assets (other than purchases of inventory and capital
expenditures) which would cause the amount expended (or committed to be ex-
pended) by the Ward Group for the acquisition of such assets during a fiscal 
year to exceed the budget for acquisitions of such assets to be contained in the
annual financial goals and targets of the Ward Group for such year by more than 
ten percent (10%) of the budgeted amount;

     (n)  entry into any transaction (exclusive of compensation and fringe,
welfare and pension benefit arrangements with affiliates who are officers,
directors or employees of the Ward Group for services rendered by them to the
Ward Group) with an affiliate, as that term is defined in the Securities Act of
1933, as amended from time to time, other than affiliates constituting members
of the Ward Group;

     (o)  seeking of a consent or waiver from a lender to a member of the Ward
Group whose loan to the member of the Ward Group has a then outstanding princi-
pal balance in excess of thirty million dollars ($30,000,000), in any case in 
which consent or waiver is required for the entry into a transaction by the Ward
Group and which, in the absence of such consent or waiver, would constitute a 
default or an event of default under the documents evidencing or pertaining to 
the loan made by the lender, other than any consent or waiver required in 
connection with:

          (i)  the making of any borrowing permitted pursuant to paragraph
     (j)(ii), (iii), (iv) or (v);

          (ii) any mandatory prepayment obligation arising from the sale or
     financing of any real property (or interests therein) or other fixed
     assets;

          (iii)    any prepayment occurring by reason of a Change of Control (as
     defined in one or more of the loan documents evidencing the loans referred
     to in paragraph (j)(i) made in connection with the acquisition of Ward by
     the corporation); or

          (iv) the incurring of any liens (other than for money borrowed);

provided, however, that approval of two-thirds (2/3) of the members of the board
of directors for the seeking of such consent or waiver shall not be required if
the transaction for which such consent or waiver is being sought (x) is
specifically permitted pursuant to any of the other paragraphs of this Section
10 without the approval of two-thirds (2/3) of the members of the board of
directors, or (y) has been authorized by two-thirds (2/3) of the members of the
board of directors pursuant to any of said other paragraphs;

     (p)  authorizing a Transfer (as defined in Article VIII) of Shares
pursuant to Section 2.2(a) of the Stockholders' Agreement in a case where the
transferee is not a Management Shareholder (as defined in Article VIII), a
Permitted Transferee (as defined in Article VIII), or a present or prospective
employee of the Ward Group;

     (q)  a waiver of the prohibitions on Transfers of Shares contained in
Sections 2.3(a) and (c) of the Stockholders' Agreement, as applied to Brennan 
(as defined in Article VIII); provided, however, that by action of a simple 
majority of the members of the board of directors, the references in those para-
graphs of the third anniversary may be amended to constitute references to the 
second anniversary;

     (r)  a waiver of the prohibitions on Transfers of Shares contained in
Section 2.3(e) of the Stockholders' Agreement;

     (s)  any determination, pursuant to Section 4.3 of the Stockholders'
Agreement, of a Cash Payments Limitation (as therein defined) other than that
expressly set forth in that section;

     (t)  without limiting the generality of any other provision of this
Section 10, any of the following actions with respect to that certain Account
Purchase Agreement (the "Account Purchase Agreement") referred to in the
Stockholders' Agreement:

          (i)  termination thereof by agreement of the parties thereto;

          (ii) the exercise of a unilateral right of termination and the
     exercise of all other rights, options and elections granted thereunder to
     Ward;

          (iii)     the giving of waivers and consents with respect thereto;
     and/or

          (iv) any amendment thereto; or

     (u)  the termination for Cause (as defined in the Stockholders' Agreement)
of Brennan's employment with any member of the Ward Group.

          Section 11.    Informal Action by Directors.  Unless otherwise
restricted by the certificate of incorporation or these by-laws, 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, and the writing or
writings are filed with the minutes of proceedings of the board or committee.

          Section 12.    Telephone Meetings.  Unless otherwise restricted by the
certificate of incorporation or these by-laws,members of the board of directors,
or any committee designated by the board of directors, may participate in a
meeting of the board of directors, or any committee, by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and such participation in a
meeting shall constitute presence in person at the meeting.


                          Committees of Directors

          Section 13.    Designation of Committees of Directors.  The board of
directors may, by resolution passed by a majority of the board of directors,
designate one or more committees,each committee to consist of two or more of the
directors of the corporation. The board may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee.

          Section 14.    Absence of a Committee Member.  In the absence or
disqualification of any member of a committee or committees or in the event that
any such member is unable or refuses to act, 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 the place of any such member.

           Section 15.   Powers of Committees.  Any such committee, to the
extent provided in the resolution of the board of directors, shall have and may
exercise all the powers and authority of the board of directors in the manage-
ment of the business and affairs of the corporation and may authorize the seal 
of the corporation to be affixed to all papers which may require it; provided, 
however, that no such committee shall (i) take any of the actions specified in 
Section 10 of this Article III which require the affirmative vote of not less 
than two-thirds (2/3) of the total number of directors of the board of directors
of the corporation, or (ii) take any action or do anything in the exercise of 
any power or authority in excess of that permitted to be taken by a committee of
directors under any applicable provisions of the Delaware GCL.  Such committee
or committees shall have such name or names as may be determined from time to
time by resolution adopted by the board of directors.

          Section 16.    Record of Proceedings.  Each committee shall keep 
regular minutes of its proceedings and report the same to the board of directors
when required.


                         Compensation of Directors

          Section 17.    In General.  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.


                                ARTICLE IV

                   Notices to Stockholders and Directors

          Section 1.     Notice.  Whenever, under the provisions of the statutes
or of the certificate of incorporation or of these by-laws, notice is required
to be given to any director or stockholder, it shall not be construed to mean
personal notice, but such notice may be given in writing, by mail, telegraph or
confirmed facsimile, addressed to such director or stockholder, at such address
as appears on the records of the corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail, telegraphed or received through a telecopy
or telex machine, as the case may be.  Notice to directors may also be given as
provided in Section 8 of Article III.

          Section 2.    Waiver of Notice.  Whenever any notice is required to be
given under the provisions of the statutes or of the certificate of incorpora-
tion or of these by-laws, a waiver thereof in writing, signed by the person or 
persons entitled to said notice, whether before or after the time stated 
therein, shall be deemed equivalent thereto.


                                 ARTICLE V

                                 Officers

          Section 1.    Number and Title.  The officers of the corporation shall
be chosen by the board of directors and shall be a chairman of the board, a vice
chairman of the board, a president, a vice president, a secretary and a
treasurer. The board of directors may also choose additional vice presidents and
one or more assistant secretaries and assistant treasurers.  Any number of
offices may be held by the same person, except that where the offices of
president and secretary are held by the same person, such person shall not hold
any other office.

          Section 2.     Election and Qualification.  The board of directors at
its first meeting after each annual meeting of stockholders shall choose a
chairman of the board, a president, one or more vice presidents, a secretary and
a treasurer.  No officer need be a member of the board of directors.  If the
election of officers is not held at such meeting, such election shall be held as
soon thereafter as may be convenient. Vacancies may be filled or new offices
created and filled at any meeting of the board of directors.

          Section 3.     Appointment of Additional Officers.  The board of
directors may appoint such other officers and agents as it shall deem necessary
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.

          Section 4.   Compensation.  The salaries and other compensation of all
officers and agents of the corporation shall be fixed by the board of directors.

          Section 5.     Term of Office, Removal and Vacancies.  The officers of
the corporation shall hold office until their successors are chosen and qualify
or until their deaths, resignations or removal. Any officer elected or appointed
by the board of directors may be removed at any time by the affirmative vote of
a majority of the members of the board of directors.  Any vacancy occurring in
any office of the corporation may be filled by the board of directors.

          Section 6.     Resignations.  Any officer may resign at any time by
giving written notice to the board of directors, the chairman of the board, the
vice chairman of the board, the president, or the secretary of the corporation. 
Such resignation shall take effect at the time specified in the written notice;
and, unless the resignation is tendered only to take effect upon acceptance
thereof, the acceptance of such resignation shall not be necessary to make the
resignation effective.

          Section 7.     The Chairman of the Board.  The chairman of the board
shall be the chief executive officer of the corporation and shall have the
general direction of the affairs of the corporation, except as otherwise
prescribed by the board of directors; shall preside at all meetings of the
shareholders, of the board of directors and of the executive committee, if any,
and shall designate the acting secretary for such meetings to take the minutes
thereof for delivery to the secretary; may sign, with the secretary, assistant
secretary, treasurer or assistant treasurer, certificates for shares of the
corporation; may execute contracts in the name of the corporation; appoint and
discharge agents and employees of the corporation, and shall be ex-officio a
member of all committees.

          Section 8.   The Vice Chairman of the Board.  The vice chairman of the
board shall assume such duties as the board of directors or the chairman of the
board may assign from time to time.  The vice chairman of the board shall report
to the chairman of the board. In the event that the chairman of the board is one
of the following: absent or has allowed the office of chairman to be vacated, or
is unable or refuses to act, the vice chairman of the board shall perform all
duties and functions of the chairman of the board.  He may sign, with the
secretary or any other proper officer thereunto duly authorized, certificates 
for shares of the corporation; may execute contracts in the name of the corpora-
tion; appoint and discharge agents and employees of the corporation; and shall 
be ex-officio a member of all committees.

          Section 9.     President.  The president shall be the chief operating
officer of the corporation, and as such shall direct the operations of the
corporation, subject to the control and direction of the board of directors and
the chairman of the board.  The president shall assume such other duties as the
chairman of the board, the vice chairman of the board or the board of directors
may assign from time to time.  The president shall report to the chairman of the
board or the vice chairman of the board.  In the event that each of the chairman
of the board and the vice chairman of the board is one of the following: absent
or has allowed his office to be vacated, or is unable or refuses to act, the
president shall perform all duties and functions of the chairman of the board 
and the vice chairman of the board.  He may sign, with the secretary or any 
other proper officer thereunto duly authorized, certificates for shares of the
corporation; may execute contracts in the name of the corporation; appoint and
discharge agents and employees of the corporation; and in general shall perform
all duties incident to the office of president.

          Section 10.    The Vice Presidents.  The vice presidents in the order
of their seniority, unless otherwise determined by the board of directors, shall
in the event that the president is absent,or has allowed the office of president
to be vacated, or is unable or refuses to act, perform the duties of the
president.  The vice presidents shall perform such other duties and have such
other powers as the board of directors may from time to time prescribe.

          Section 11.    The Secretary.  The secretary shall attend all meetings
of the board of directors and all meetings of the stockholders and record all 
the proceedings of the meetings of the corporation and of the board of directors
in a book to be kept for that purpose and shall perform like duties for the 
standing committees when required; shall give, or cause to be given, notice of 
all meetings of the stockholders and special meetings of the board of directors;
shall perform such other duties as may be prescribed by the board of directors,
the chairman of the board or the president,under whose supervision the secretary
shall be; and shall keep in safe custody the corporate seal of the corporation
and when authorized by the board of directors, shall affix the same to any
instrument requiring it and when so affixed, it shall be attested by the
signature of the secretary or by the signature of any assistant secretary.

          Section 12.   Assistant Secretaries.  The assistant secretaries in the
order of their seniority shall,in the event that the secretary is absent, or has
allowed the office of secretary to be vacated, or is unable or unwilling to act,
perform the duties and exercise the powers of the secretary. They shall perform
such other duties and have such other powers as the board of directors may from
time to time prescribe.

           Section 13.   The Treasurer.  The treasurer shall have the
custody of the corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the corporation and
shall deposit all moneys and other valuable effects in the name and to the 
credit of the corporation in such depositories as may be designated by the 
board of directors.  The treasurer shall disburse the funds of the corporation 
as may be ordered by the board of directors, taking proper vouchers for such 
disbursements.

          Section 14.    Bond.  If required by the board of directors, the
treasurer shall give the corporation a bond (which shall be renewed as required
from time to time) in such sum and with such surety or sureties as shall be
satisfactory to the board of directors for the faithful performance of the 
duties of the office and for the restoration to the corporation, in case of the 
death, resignation, retirement or removal from office of the treasurer, of all 
books, papers, vouchers, money and other property of whatever kind in the 
possession or under the control of the treasurer belonging to the corporation.

          Section 15.    Assistant Treasurers.  The assistant treasurers, in the
order of their seniority, unless otherwise determined by the board of directors
shall in the event the treasurer is absent, or has allowed the office of
treasurer to be vacated, or is unable or refuses to act, perform the duties and
exercise the powers of the treasurer.  They shall perform such other duties and
have such other powers as the board of directors may from time to time 
prescribe.


                                ARTICLE VI

                          Stock and Stockholders

          Section 1.     Certificate of Stock.  Every record holder of stock in
the corporation shall be entitled to have a certificate signed by, or in the 
name of, the corporation by the chairman of the board, or the vice chairman of 
the board,or the president or a vice president and the treasurer or an assistant
treasurer, or the secretary or an assistant secretary of the corporation, and
registered in such stockholder's name, certifying the number of shares owned by
such holder in the corporation.

          Section 2.     Classes and Series.  If the corporation shall be
authorized to issue more than one class of stock or more than one series of any
class, the powers, assignations, designations, preferences and relative,
participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences
and/or rights shall be set forth in full or summarized on the face or back of 
the certificate which the corporation shall issue to represent such class or 
series of stock, provided that, in lieu of the foregoing requirements, there may
be set forth on the face or back of the certificate which the corporation shall 
issue to represent such class or series of stock, a statement that the corpora-
tion will furnish, without charge to each stockholder who so requests, the 
powers, designations, preferences and relative participating, optional or other 
special rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.

          Section 3.    Signatures.  Where a certificate is countersigned (i) by
a transfer agent other than the corporation or its employee, or (ii) by a
registrar other than the corporation or its employee, any of or all the
signatures on the certificate of the officers of the corporation may be a
facsimile.  In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be an officer, transfer agent or registrar before such certificate is issued,
it may be issued by the corporation with the same effect as if such person were
such officer, transfer agent or registrar at the date of issue.

          Section 4.     Lost Certificates.  The board of directors may direct a
new certificate or certificates to be issued in place of any certificate or
certificates theretofore 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 such owner's legal representative, to advertise the same in 
such manner as it shall require and/or to give the corporation a bond in such 
sum as it may direct as indemnity (or otherwise require the indemnification) 
against any claim that may be made against the corporation with respect to the 
certificate alleged to have been lost, stolen or destroyed.

          Section 5.     Transfers of Stock.  Upon surrender to the corporation
or the transfer agent of the corporation of a certificate for shares duly
endorsed or accompanied by proper evidence of succession, assignation or
authority to transfer, it shall be the duty of the corporation to issue a new
certificate to the person entitled thereto,cancel the old certificate and record
the transaction upon its books.

          Section 6.     Fixing Record Date. Except as otherwise provided in the
Delaware GCL or the certificate of incorporation, the board of directors may fix
in advance a date, not exceeding sixty (60) days preceding the date of any
meeting of stockholders, or the date for the payment of any dividend, or other
distribution or the date for the allotment of rights,or the date when any change
or conversion or exchange of capital stock shall go into effect, or a date in
connection with obtaining the consent of stockholders for any purpose, as a
record date for the determination of the stockholders entitled to notice of, and
to vote at, any such meeting, and any adjournment thereof,or entitled to receive
payment of any such dividend, or other distribution or to any such allotment of
rights, or to exercise the rights in respect of any such change, conversion or
exchange of capital stock, or to give such consent, and in such case such stock-
holders and only such stockholders as shall be stockholders of record on the
date so fixed shall be entitled to such notice of, and to vote at, such meeting
and any adjournment thereof, or to receive payment of such dividend, or other
distribution, or to receive such allotment of rights or to exercise such rights,
or to give such consent, as the case may be, notwithstanding any transfer of any
stock on the books of the corporation after any such record date fixed as
aforesaid.

          Section 7.     Registered Stockholders.  The corporation shall be
entitled to recognize the exclusive right of a person registered on its books as
the owner of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments, a person registered on its books as the owner
of shares, and 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, except as otherwise provided
by the laws of Delaware.


                                ARTICLE VII

                              Indemnification

           The directors, officers, employees and agents of the corporation and
certain of their respective heirs, successors and personal representatives shall
be indemnified as provided in the certificate of incorporation.


                               ARTICLE VIII

                            General Provisions

          Section 1.     Dividends.  Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of incorporation and
to Section 10 of Article III, if any, may be declared by the board of directors
at any regular or special meeting, pursuant to law.  Dividends may be paid in
cash, in property, or in shares of the capital stock, subject to the provisions
of the certificate of incorporation.

          Section 2.   Checks.  All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the board of directors may from time to time designate.

          Section 3.     Fiscal Year.  The fiscal year of the corporation shall
end on the Saturday closest to December 31st in each year.

          Section 4.     Seal.  The corporate seal shall have inscribed thereon
the name of the corporation and the words "Corporate Seal, Delaware."  The seal
may be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.

          Section 5.     Certain Definitions.  As used in these by-laws, the
following terms shall have the following meanings:

     (a)  "Brennan" means Bernard F. Brennan.

     (b)  "Common  Stock," "Class A Common Stock," and "Class B Common Stock"
     shall all have the meanings specified in the certificate of incorporation.

     (c)  "Delaware GCL" means the General Corporation Law of the State of
     Delaware, as the same shall be amended and in effect from time to time.

     (d)  "Designated Management Optionees" means those Management
     Shareholders, or any member or members of their respective Families (as
     herein defined), who are designated in writing by the Designator (as
     herein defined), with concurrent notice to the corporation, as having the
     right to exercise a specifically designated option to purchase a
     specifically designated number of Shares pursuant to Article II or III of
     the Stockholders' Agreement.  The options so designated may not, in the
     aggregate, exceed the number of Shares which, at the time of the
     designation, are subject to purchase pursuant to Article II or Article III
     of the Stockholders' Agreement, but in making such designation, the
     Designator may designate alternate Designated Management Optionees who
     shall have options to purchase Shares if the Persons designated as primary
     Designated Management Optionees do not exercise the designated options. 
     The Designator may designate a member of the Committee (as herein
     defined), or a member of the Family of a member of the Committee, as a
     Designated Management Optionee only as provided elsewhere in the
     Stockholders' Agreement.  Each designation of a Designated Management
     Optionee shall be made in writing and delivered by the Designator to the
     Designated Management Optionee and the corporation.  By written notice
     delivered to a Designated Management Optionee, with concurrent notice to
     the Company, the Designator may change or revoke the designation of any
     Management Shareholder (or member of his Family, as the case may be) as a
     Designated Management Optionee and/or the designation of the number of
     Shares to be purchased, at any time prior to exercise of the designated
     option for any reason or for no reason.  In the event one or more
     Designated Management Optionees are granted an option to purchase Shares
     pursuant to Article III of the Stockholders' Agreement, and the Shares as
     to which such option is exercisable are not Vested Shares (as defined in
     the Stockholders' Agreement) in the hands of the Management Shareholder
     (or his Permitted Transferees) whose Shares are subject to purchase or
     sale under Article III of the Stockholders' Agreement, the Designator may,
     as part of the designation of the identity of the Designated Management
     Optionee(s), designate that all or any portion of such Shares shall be
     Vested Shares in the hands of the Designated Management Optionee(s)

     (e)  "Designator" means the person or the committee of three Management
     Shareholders, as set forth below and as the case may be, which has, among
     other powers, the power to designate the Designated Management Optionees. 
     Prior to the occurrence of an Event (as defined below) for all purposes
     other than designating (and in connection with the designation of)
     Designated Management Optionees, the Designator shall be Brennan.  At all
     times for purposes of designating (and in connection with the designation
     of) Designated Management Optionees, and from and after the occurrence of
     an Event for all purposes (including, without limitation, designating (and
     in connection with the designation of) Designated Management Optionees),
     the Designator shall be such committee of three Management Shareholders
     (the "Committee").

          The Committee shall, except as provided below, be comprised of
     Brennan, Edwin G. Pohlmann ("Pohlmann") and Myron Lieberman ("Lieberman"). 
     Prior to the occurrence of an Event, if any member of the Committee shall
     resign from the Committee or cease to be a Qualified Management
     Shareholder (as defined below), then such person shall cease to be a
     member of the Committee and the remaining members of the Committee shall
     as soon as practicable appoint a Qualified Management Shareholder as a
     member of the Committee and thereby fill the vacancy on the Committee so
     created.  From and after the occurrence of an Event, the Committee shall
     be comprised of Pohlmann, Spencer H. Heine ("Heine") and Lieberman (each
     of Pohlmann, Heine and Lieberman being a "Continuing Member" and
     collectively being the "Continuing Members") so long as each is a
     Qualified Management Shareholder; provided, however, that at any time from
     and after the occurrence of an Event (i) if one, but only one, Continuing
     Member has resigned from the Committee or ceased to be a Qualified
     Management Shareholder, then the Committee shall be comprised of the two
     remaining Continuing Members who have not resigned from the Committee and
     are Qualified Management Shareholders and the Largest Management
     Shareholder (as defined below) (but the Second Largest Management
     Shareholder (as defined below) if the Largest Management Shareholder is
     one of such remaining Continuing Members, but the Third Largest Management
     Shareholder (as defined below) if both the Largest Management Shareholder
     and the Second Largest Management Shareholder are such remaining
     Continuing Members), (ii) if each of two, but only two, of the Continuing
     Members has either resigned from the Committee or ceased to be a Qualified
     Management Shareholder, then the Committee shall be comprised of the
     remaining Continuing Member who has not resigned from the Committee and is
     a Qualified Management Shareholder, the Largest Management Shareholder and
     the Second Largest Management Shareholder (but the Second Largest
     Management Shareholder and the Third Largest Management Shareholder if the
     Largest Management Shareholder is such Continuing Member, but the Largest
     Management Shareholder and the Third Largest Management Shareholder if the
     Second Largest Management Shareholder is such Continuing Member), and
     (iii) if each of the Continuing Members has either resigned from the
     Committee or ceased to be a Qualified Management Shareholder, then the
     Committee shall be comprised of the Largest Management Shareholder, the
     Second Largest Management Shareholder and the Third Largest Management
     Shareholder. 

          In all cases, the Committee shall act by the vote of a majority of
     its members; provided, however, that neither a member of the Committee nor
     a member of his Family may be designated as a Designated Management
     Optionee except upon the affirmative vote of all other members of the
     Committee. 

          A "Qualified Management Shareholder" is each of Brennan and
     Lieberman and any other person who is a Management Shareholder and
     employed by a member of the Ward Group.  A person (including each of
     Brennan and Lieberman) shall cease to be a Qualified Management
     Shareholder if (i) he ceases to be a Management Shareholder, (ii) he dies,
     (iii) he is adjudicated incompetent, (iv) in the case of Lieberman, he
     ceases to be a director of the corporation or (v) in the case of any
     Management Shareholder other than Brennan and Lieberman, no member of the
     Ward Group employs such Management Shareholder.

          An "Event" means that Brennan has resigned from the Committee or
     ceased to be a Qualified Management Shareholder. 

          The "Largest Management Shareholder" shall be the Management
     Shareholder (other than Brennan and any Management Shareholder who is not
     willing or able to serve on the Committee) who, from time to time, is
     employed by a member of the Ward Group and is the owner of the largest
     number of Shares (including Plan Shares (as herein defined) subject to the
     Terms and Conditions (as herein defined)) as compared to each other
     Management Shareholder (other than Brennan and any Management Shareholder
     who is not willing or able to serve on the Committee) and who is willing
     and able to serve as a member of the Committee. 

          The "Second Largest Management Shareholder" shall be the Management
     Shareholder (other than Brennan, the Largest Management Shareholder and
     any Management Shareholder who is not willing or able to serve on the
     Committee) who, from time to time, is employed by a member of the Ward
     Group and is the owner of the largest number of Shares (including Plan
     Shares subject to the Terms and Conditions) as compared to each other
     Management Shareholder (other than Brennan, the Largest Management
     Shareholder and any Management Shareholder who is not willing or able to
     serve on the Committee) and who is willing and able to serve on the
     Committee. 

          The "Third Largest Management Shareholder" shall be the Management
     Shareholder (other than Brennan, the Largest Management Shareholder, the
     Second Largest Management Shareholder and any Management Shareholder who
     is not willing or able to serve on the Committee) who, from time to time,
     is employed by a member of the Ward Group and is the owner of the largest
     number of Shares (including Plan Shares subject to the Terms and
     Conditions) as compared to each other Management Shareholder (other than
     Brennan, the Largest Management Shareholder, the Second Largest Management
     Shareholder and any Management Shareholder who is not willing or able to
     serve on the Committee) and who is willing and able to serve on the
     Committee. 

          For the purposes of the foregoing provisions of this paragraph (e),
     a Management Shareholder shall be deemed to own all Shares (including Plan
     Shares subject to the Terms and Conditions) owned by his Permitted
     Transferees.  In the event that two or more persons own the same number of
     Shares so that each, in the absence of the other (or others, as the case
     may be) would be the Largest Management Shareholder, the Second Largest
     Management Shareholder or the Third Largest Management Shareholder (as the
     case may be), then the remaining member (or members, as the case may be)
     of the Committee from time to time shall determine which of such person or
     persons shall be deemed to be the Largest Management Shareholder, the
     Second Largest Management Shareholder or the Third Largest Management
     Shareholder, as the case may be, and, in the event that there are no
     members of the Committee remaining to make such determination or the
     remaining members of the Committee are unable to make such determination
     in accordance with the Committee's majority voting requirements as set
     forth above, then such determination shall be made on the basis of
     seniority of service with the Ward Group. 

     (f)  "Employee Stock Option Plan" means a stock option plan for the
     benefit of the employees, advisors and consultants of the Ward Group and
     directors of the corporation adopted by the board of directors of the
     corporation pursuant to which such employees, advisors, consultants and
     directors may be granted options to purchase Shares of Class A Common
     Stock.

     (g)  "Family" means a spouse or descendent or ancestor of a Management
     Shareholder, or a spouse of a descendent or ancestor of a Management
     Shareholder, or a trustee of a trust or a custodian of a custodianship
     primarily for the benefit of one or more of the foregoing and/or a
     Management Shareholder.

     (h)  "GE Capital" means General Electric Capital Corporation, a New York
     Corporation.

     (i)  "GE Capital Affiliate" means any entity which, at the time of the
     applicable determination, GE Capital controls, which controls GE Capital,
     or which is under common control with GE Capital, but does not include the
     Ward Group or any member thereof.  For the purposes of the preceding
     sentence, "control" means the power, direct or indirect, to direct or
     cause the direction of the management and policies of a Person through
     voting securities, contract or otherwise.  Without limiting the generality
     of the foregoing, as of the date on which the Stockholders' Agreement was
     executed and delivered, Kidder, Peabody Group, Inc. was a GE Capital
     Affiliate.

     (j)  "Management Shareholders" or "Management Shareholder" means a Type
     1 Management Shareholder (as herein defined) or a Type 2 Management
     Shareholder (as herein defined), without distinction.

     (k)  "Permitted Transferee" shall mean: 

               (i)  a Person, other than a Management Shareholder, to whom
          Shares are Transferred pursuant to and in compliance with the
          provisions of Section 2.2(b) of the Stockholders' Agreement; and 
               (ii) a member of the Family of a Management Shareholder who
          has either (x) acquired Shares by virtue of having been designated
          a Designated Management Optionee by the Designator or (y) acquired
          Shares on or about the date of the Stockholders' Agreement and
          joined in the Stockholders' Agreement as a Permitted Transferee of
          said Management Shareholder. 

     Each reference herein to a Permitted Transferee of a particular Management
     Shareholder shall mean (x) a Permitted Transferee owning Shares which that
     Management Shareholder was the last Management Shareholder to own, and (y)
     a member of the Family of that Management Shareholder who has acquired
     Shares in a manner set forth in (ii) above; 

     (l)  "Person" means any individual, sole proprietorship, partnership,
     joint venture, unincorporated organization, association, corporation,
     trust, institution, public benefit corporation, entity or government.

     (m)  "Plan Shares" means (i) Shares received by the holder thereof
     pursuant to the Employee Stock Option Plan; and (ii) Shares held by a
     Permitted Transferee of a Management Shareholder, if such Shares would be
     Plan Shares pursuant to clause (i) above if held by such Management
     Shareholder; 

     (n)  "Preferred Stock" and "Senior Preferred Stock" shall have the
     meanings specified in the certificate of incorporation.

     (o)  "Purchase Agreement" means that certain Stock Purchase Agreement
     dated as of March 6, 1988, as amended, among the corporation, Mobil
     Corporation and Marcor Inc.

     (p)  "Shares," except as otherwise specifically provided herein, means
     the shares of Common Stock of the corporation without distinction as to
     class or series, and shall include certificates of beneficial interest
     issued by the Voting Trustee (as herein defined), pursuant to a Voting
     Trust Agreement (as herein defined); provided, however, that (and without
     implication that a contrary result was intended, but by way of
     clarification):

          (i)  for the purpose of determining the number of Shares eligible
     to vote or receive distributions, there shall be no duplication as between
     Shares held by the Voting Trustee, on the one hand, and certificates of
     beneficial interest issued by the Voting Trustee, on the other hand; and

          (ii) where the right to vote Shares or execute consents is granted
     or required pursuant to the provisions of the Stockholders' Agreement,
     except as expressly provided in Section 8.17 of the Stockholders'
     Agreement, the term "Shares" shall not include certificates of beneficial
     interest issued by the Voting Trustee under a Voting Trust Agreement;

     and these by-laws shall be interpreted in accordance with the foregoing
     proviso to the extent the context so requires.  
     (q)  "Stockholders' Agreement" means that certain Stockholders' Agreement
     dated as of June 17, 1988 among the corporation, Brennan, GE Capital and
     the other Persons who are parties thereto, as amended and restated from
     time to time.

     (r)  "Terms and Conditions" mean those certain Montgomery Ward & Co.,
     Incorporated Stock Ownership Plan Terms and Conditions agreed to by and
     between the corporation and participants in the Employee Stock Option
     Plan, as amended and restated from time to time.

     (s)  "Transfer" means any transfer, sale, assignment, pledge, encumbrance
     or other disposition of Shares, or, in the case of the corporation, any
     issuance or sale of Shares, irrespective of whether any of the foregoing
     are effected voluntarily or involuntarily, by operation of law or
     otherwise, or whether inter vivos or upon death.

     (t)  "Type 1 Management Shareholder" means Brennan, Silas S. Cathcart
     ("Cathcart"), Lieberman and any other Person who is designated by the
     Designator as a Type 1 Management Shareholder and who concurrently with
     the execution and delivery of the Stockholders' Agreement or at any time
     thereafter, in contemplation of that Person's acquisition of Shares,
     executes a counterpart of or joins in and agrees to be bound by, the
     Stockholders' Agreement as a Type 1 Management Shareholder.  Other than
     Brennan, Cathcart and Lieberman, as long as GE Capital and GE Capital
     Affiliates own, in the aggregate, at least twenty percent (20%) of the
     Shares which they acquired in June, 1988, no Person shall be designated as
     a Type 1 Management Shareholder without the prior consent of GE Capital,
     which consent shall not unreasonably be withheld.

     (u)  "Type 2 Management Shareholder" means any person who concurrently
     with the execution and delivery of the Stockholders' Agreement or at any
     time thereafter, in contemplation of that Person's acquisition of Shares,
     executes a counterpart of, or joins in and agrees to be bound by, the
     Stockholders' Agreement as a Type 2 Management Shareholder.  Unless that
     Person has been designated by the Designator as, or is already, a Type 1
     Management Shareholder, Type 2 Management Shareholders shall include all
     Persons who acquire Options (as defined in the Stockholders' Agreement) or
     Purchase Rights (as defined in the Stockholders' Agreement) or Shares of
     Class A Common Stock pursuant to Awards (as defined in the Stockholders'
     Agreement) or the exercise of Options or Purchase Rights and who join in
     the Stockholders' Agreement or are required to hold such Shares of Class
     A Common Stock subject to the terms of the Stockholders' Agreement.

     (v)  "Voting Trust Agreement" means each of that certain Voting Trust
     Agreement, dated as of June 21, 1988, among Brennan and the other
     individuals who are parties thereto (the "1988 Voting Trust Agreement"),
     that certain Voting Trust Agreement, dated as of October 21, 1994, among
     Brennan, the corporation and the individuals who are parties thereto (the
     "1994 Voting Trust Agreement") as well as all agreements adopted hereafter
     which have substantially similar provisions (without giving effect to time
     periods) as the 1988 Voting Trust Agreement and as the 1994 Voting Trust
     Agreement and to which any shares of common stock of the corporation are
     subject.

     (w)  "Voting Trustee" means the Person serving as voting trustee under
     the applicable Voting Trust Agreement.

     (x)  "Ward" means Montgomery Ward & Co., Incorporated, an Illinois
     corporation.

     (y)  "Ward Group" means the corporation and its direct and indirect
     subsidiaries.


                                ARTICLE IX

                                Amendments

     The board of directors may, by vote of not less than two-thirds (2/3) of
the members of the board of directors of the corporation, alter, amend or repeal
these by-laws, or enact such other by-laws as in their judgment may be advisable
for the regulation of the conduct of the affairs of the corporation; provided,
however, that from and after the date on which the number of members of the 
board of directors which GE Capital has the right to designate pursuant to 
Section 1 of Article III of these by-laws has been reduced pursuant to the 
terms and conditions of said Section 1 of Article III, then Section 10 of 
Article III of these by-laws may be amended or terminated in whole or in part 
from time to time upon the affirmative vote or consent of both (x) a majority of
the members of the board of directors, and (y) the holders of a majority of the 
then outstanding shares of Class A Common Stock.



WET04074.DOC