EXHIBIT 3.1
                           AMENDED AND RESTATED BYLAWS

                                       OF

                             PAYLESS CASHWAYS, INC.



                                    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.

     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,  

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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.  All such notices  shall be delivered,  either  personally or by
mail,  by or at the  direction of the board of  directors,  the chief  executive
officer or the secretary. 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.

     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 

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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 no such proxy shall be voted or acted upon after three years from its
date, unless the proxy provides for a longer period. 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  

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and action by the  stockholders  at such a meeting  shall be deemed not properly
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
          

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          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 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.


<PAGE>6


     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.

     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 

<PAGE>7

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  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 

<PAGE>8

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.

     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  

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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 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.


<PAGE>10

                                   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.

     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 

<PAGE>11

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.

     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.


<PAGE>12

     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
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 

<PAGE>13

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 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.

<PAGE>14

                                   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.

     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 

<PAGE>15

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>16


     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.

<PAGE>17

                                  ARTICLE VIII
                                   AMENDMENTS

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

                            Certificate of Secretary

     The above and  foregoing  is a true and  correct  copy of the  Amended  and
Restated Bylaws of Payless Cashways, Inc. as of August 11, 1998.

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