BY-LAWS

                                       OF

                              BANDAG, INCORPORATED

                           As Amended August 24, 1999

                                    ARTICLE I
                                    ---------
                                     OFFICES
                                     -------

         The principal  office of the  Corporation in the State of Iowa shall be
located in the City of Muscatine,  County of Muscatine. The Corporation may have
such other offices,  either within or without the State of Iowa, as the Board of
Directors may designate or as the business of the  Corporation  may require from
time to time.

         The registered office of the Corporation  required by the Iowa Business
Corporation  Act to be  maintained in the State of Iowa may be, but need not be,
identical with the principal office in the State of Iowa, and the address of the
registered office may be changed from time to time by the Board of Directors.


                                   ARTICLE II
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                                  SHAREHOLDERS
                                  ------------

         Section 1. Annual Meeting.  An annual meeting of the shareholders shall
be held at such time during the month of May in each year as shall be designated
by the Board of  Directors  at least  sixty  (60) days  prior to the date of the
meeting,  or if no such date is designated by the Board of Directors  then at 10
o'clock  in the  forenoon  on the third  Wednesday  in May,  for the  purpose of
electing  directors and for the  transaction  of such other business as may come
before the meeting.  If the  election of directors  shall not be held on the day
designated as herein provided for any annual meeting of the shareholders,  or at
any adjournment  thereof,  the Board of Directors shall cause the election to be
held at a special meeting of the shareholders as soon thereafter as conveniently
may be.

         Section 2. Special Meetings. Special meetings of the shareholders,  for
any purpose or purposes,  unless otherwise  prescribed by statute, may be called
by the Chairman of the Board,  the Board of Directors or the holders of not less
than one-tenth of all the outstanding shares of the Corporation entitled to vote
at the meeting.

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         Section 3. Place of Meeting.  The Board of Directors  may designate any
place,  either  within or without the State of Iowa, as the place of meeting for
any annual meeting or for any special  meeting called by the Board of Directors.
A waiver of notice signed by all shareholders  entitled to vote at a meeting may
designate  any place,  either  within or without the State of Iowa, as the place
for the holding of such  meeting.  If no  designation  is made,  or if a special
meeting be otherwise called, the place of meeting shall be the registered office
of the Corporation in the State of Iowa.

         Section 4. Notice of  Meeting.  Written or printed  notice  stating the
place,  day and hour of the  meeting  and,  in case of a  special  meeting,  the
purpose or purposes for which the meeting is called, shall be delivered not less
than ten nor more  than  sixty  days  before  the  date of the  meeting,  either
personally  or by  mail,  by or at  the  direction  of  the  President,  or  the
Secretary, or the officer or persons calling the meeting, to each shareholder of
record entitled to vote at such meeting.  If mailed, such notice shall be deemed
to be  delivered  when  deposited in the United  States  mail,  addressed to the
shareholder  at his  address as it appears  on the stock  transfer  books of the
Corporation, with postage thereon prepaid.

         Section 5.  Voting  Lists.  The officer or agent  having  charge of the
stock transfer books for shares of the Corporation shall make, at least ten days
before  each  meeting  of  shareholders,  a  complete  list of the  shareholders
entitled  to vote at such  meeting,  or any  adjournment  thereof,  arranged  in
alphabetical  order,  with the address of and the number of shares held by each,
which  list,  for a period of ten days prior to such  meeting,  shall be kept on
file at the  registered  office  of the  Corporation  and  shall be  subject  to
inspection of any shareholder during the whole time of the meeting. The original
stock transfer book shall be prima facie evidence as to who are the shareholders
entitled to examine  such lists or  transfer  books or to vote at any meeting of
shareholders.

         Section  6.  Quorum.  A  majority  of the  votes  entitled  to be cast,
represented  in person or by proxy,  shall  constitute  a quorum at a meeting of
shareholders.  If less  than a  majority  of the votes  entitled  to be cast are
represented at a meeting, a majority of the votes so represented may adjourn the
meeting from time to time without further notice.  At such 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  notified.  The
shareholders  present at a duly  organized  meeting  may  continue  to  transact
business until adjournment,  notwithstanding  the withdrawal of sufficient votes
to leave less than a quorum.

         Section 7. Proxies. At all meetings of shareholders,  a shareholder may
vote by proxy executed in writing by the  shareholder or by his duly  authorized
attorney  in  fact.  Such  proxy  shall  be  filed  with  the  Secretary  of the
Corporation


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<PAGE>

before or at the time of the  meeting.  Proxies  shall apply only to the meeting
for which they are solicited.

         Section 8. Voting of Shares.  Each  outstanding  share of Common  Stock
shall be entitled to one (1) vote per share, and each outstanding share of Class
B Common  Stock shall be entitled to ten (10) votes per share,  upon each matter
submitted to a vote at a meeting of shareholders.

         Section 9. Closing of Transfer  Books or Fixing of Record Date. For the
purpose  of  determining  shareholders  entitled  to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or shareholders  entitled to
receive  payment  of any  dividend,  or in  order  to  make a  determination  of
shareholders  for any other proper purpose,  the Board of Directors shall fix in
advance a date as the record date for any such  determination  of  shareholders,
such date in any case to be not more than sixty  days and,  in case of a meeting
of  shareholders,  not  less  than ten  days  prior  to the  date of  which  the
particular action, requiring such determination of shareholders, is to be taken.
When a  determination  of  shareholders  entitled  to  vote  at any  meeting  of
shareholders has been made as provided in this section, such determination shall
apply to any adjournment thereof.


                                   ARTICLE III
                                   -----------
                               BOARD OF DIRECTORS
                               ------------------

         Section 1. General Powers.  The business and affairs of the Corporation
shall be managed by its Board of Directors.

         Section 2. Number,  Tenure and Qualifications.  The number of directors
of the Corporation shall be nine (9). Each director shall serve for the term for
which  elected and until a  successor  shall have been  elected  and  qualified,
except  in the  event  of  resignation,  removal,  death  or  other  incapacity.
Directors  need not be  residents  of the State of Iowa or  shareholders  of the
Corporation.

         Section  3.  Regular  Meetings.  A  regular  meeting  of the  Board  of
Directors shall be held without other notice than this By-Law immediately after,
and at the same  place as,  the annual  meeting  of  shareholders.  The Board of
Directors  may provide,  by  resolution,  the time and place,  either  within or
without  the State of Iowa,  for the  holding  of  additional  regular  meetings
without other notice than such resolution.

         Section 4. Special Meetings. Special meetings of the Board of Directors
may be  called  by or at the  request  of the  Chairman  of the Board or any two
directors.  The person or persons  authorized  to call  special  meetings of the
Board of  Directors  may fix any place,  either  within or without  the State of
Iowa,

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<PAGE>

as the place for holding any special meeting of the Board of Directors called by
them.

         Section 5.  Notice.  Notice of any  special  meeting  shall be given at
least two days  previously  thereto by written  notice  delivered  personally or
mailed to each director at his business address, or by telegram. If mailed, such
notice shall be deemed to be delivered  when deposited in the United States mail
so addressed, with postage thereon prepaid. If notice be given by telegram, such
notice  shall be deemed to be  delivered  when the  telegram is delivered to the
telegraph company.  Any director may waive notice of any meeting. The attendance
of a director at a meeting shall  constitute a waiver of notice of such meeting,
except where a director  attends a meeting for the express  purpose of objecting
to the transaction of any business because the meeting is not lawfully called or
convened.  Neither  the  business to be  transacted  at, nor the purpose of, any
regular or special  meeting of the Board of  Directors  need be specified in the
notice or waiver of notice of such meeting.

         Section 6.  Quorum.  A majority  of the  number of  directors  fixed by
Section 2 of this Article III shall  constitute a quorum for the  transaction of
business  at any  meeting  of the  Board of  Directors,  but if less  than  such
majority  is present  at a meeting,  a majority  of the  directors  present  may
adjourn the meeting from time to time without further notice.

         Section 7. Manner of Acting.  The act of the majority of the  directors
present at a meeting at which a quorum is present  shall be the act of the Board
of Directors.

         Section 8. Vacancies.  During the intervals  between annual meetings of
shareholders,  any  vacancy  occurring  in the  Board  of  Directors  caused  by
resignation,  removal, death or incapacity,  and any newly created directorships
resulting  from an  increase  in the number of  directors,  shall be filled by a
majority vote of the  directors  then in office,  whether or not a quorum.  Each
director chosen to fill a newly created  directorship or to fill a vacancy shall
hold office until the next annual meeting of the shareholders.

         Section 9. Compensation.  By resolution of the Board 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.

         Section 10. 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 the action  taken  unless


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<PAGE>

his  dissent  shall be entered in the  minutes of the meeting or unless he shall
file his 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  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 11.  Informal  Action by Directors.  Any action  required to be
taken at a meeting of the directors, or any other action which may be taken at a
meeting  of the  directors,  may be taken  without  a meeting  if a  consent  in
writing,  setting  forth  the  action  so  taken,  shall be signed by all of the
directors entitled to vote with respect to the subject matter thereof.

         Section 12. Indemnification

         (1) The Corporation  shall indemnify every person who is or was a party
or involved (as a witness or  otherwise)  or is threatened to be made a party or
involved (as a witness or otherwise) (hereafter "Indemnitee") in any threatened,
pending or completed  action,  suit, or  proceeding,  whether  civil,  criminal,
administrative,  or investigative (including a grand jury proceeding), formal or
informal,  and whether or not by or in the right of the Corporation or otherwise
(hereafter a  "Proceeding"),  by reason of the fact that he is or was a director
or  officer  of  the  Corporation,  or  while  a  director  or  officer  of  the
Corporation,  is or was serving at the request of the Corporation as a director,
officer,  partner,  trustee,  employee  or agent of another  foreign or domestic
corporation,  partnership, joint venture, trust, employee benefit plan, or other
enterprise,  or by reason of any action  alleged to have been taken or not taken
by him while acting in any such capacity, against reasonable expenses (including
counsel  fees  and  expenses  when  incurred)  (hereafter  "Expenses")  and  all
liability and loss, including judgments, fines, (including excise taxes assessed
with respect to an employee  benefit plan), and penalties and amounts paid or to
be paid in  settlement  (whether  with or  without  court  approval)  (hereafter
"Liabilities"),  actually incurred by him in connection with such Proceeding, to
the  fullest  extent  permitted  by law as the same exists or may  hereafter  be
amended  (but, in the case of any such  amendment,  only to the extent that such
amendment permits the Corporation to provide broader indemnification rights than
said  law  permitted  the  Corporation  to  provide  prior  to such  amendment).
Notwithstanding anything in this Section 12 to the contrary, except with respect
to a proceeding to enforce rights to  indemnification or advancement of Expenses
under this  Section  12,  the  Corporation  shall  provide  indemnification  and
advancement of Expenses under this Section 12 to persons seeking indemnification
in connection with a proceeding initiated by such person only if such proceeding
was authorized by the Board of Directors. In addition to the foregoing mandatory
modification provisions, the Corporation may indemnify an


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employee  of the  Corporation  to the same  extent as to an officer or  director
pursuant to the provisions of this Section 12.

         (2) The right to  indemnification  conferred  in this  Section 12 shall
include  the right to be paid or  reimbursed  by the  Corporation  the  Expenses
incurred in connection  with the Proceeding in advance of the final  disposition
thereof promptly after a written request therefor;  provided,  however,  that to
the extent required by law, the payment of such Expenses in advance of the final
disposition of a proceeding shall be made only upon the Corporation's receipt of
a written undertaking by or on behalf of such person to repay such amounts if it
shall  ultimately be determined that he is not entitled to be indemnified  under
this Section 12 or otherwise (this  undertaking  need not be secured and must be
accepted without reference to the ability to repay).

         (3) Any  indemnification,  under this  Section 12 (unless  ordered by a
court or as otherwise provided in Section 12(2) for the advancement of Expenses)
shall be made by the Corporation upon a determination  that the  indemnification
of the  Indemnitee  is  proper  in the  circumstances  because  he has  met  the
applicable  standard of conduct required by Section 490.851 of the Iowa Business
Corporation Act. Such determination  shall be made (a) by the Board of Directors
by majority vote of a quorum  consisting of directors not at the time parties to
the  Proceeding,  (b) if a quorum  cannot be obtained,  by a majority  vote of a
committee  duly  designated  by the  Board of  Directors,  in which  designation
directors  who are parties  may  participate,  consisting  solely of two or more
directors  not at the time  parties  to the  Proceeding,  (c) by  special  legal
counsel selected by the Board of Directors by vote as set forth in clause (a) or
(b) of this Section 12(3),  or, if a quorum of the Board of Directors  cannot be
obtained and a committee cannot be designated,  selected by majority vote of the
full Board of  Directors,  in which  selection  directors  who are  parties  may
participate, or (d) by the shareholders,  but shares owned by or voted under the
control of directors who are at the time parties to the Proceeding  shall not be
voted on the determination.

         (4) If a person is entitled under this Section 12 to indemnification by
the  Corporation  for some or a portion of  Liabilities  and  Expenses  but not,
however,   for  all  of  the  total  amounts  thereof,   the  Corporation  shall
nevertheless  indemnify  such  person  for the  portion  thereof  to which he is
entitled.

         (5)  Notwithstanding  anything in these  By-laws to the  contrary,  the
Corporation shall not be obligated to make any payment under this Section 12 for
indemnification  for  Liabilities  and Expenses in connection  with  Proceedings
settled without the consent of the Corporation,  which consent,  however,  shall
not be unreasonably withheld.


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<PAGE>

         (6) If a claim for  indemnification  or  advancement  of Expenses under
this  Section 12 is not paid in full by the  Corporation  within sixty (60) days
after a written claim has been received by the Corporation, the claimant may, at
anytime  thereafter,  bring suit against the  Corporation  to recover the unpaid
amount of the claim. The claimant shall also be entitled to be paid the expenses
of prosecuting  such claim to the extent he is successful in whole or in part on
the merits or otherwise in establishing his right to  indemnification  or to the
advancement of Expenses.  Neither (a) the failure of the Corporation  (including
its Board of Directors,  special legal counsel or the shareholders) to have made
a determination prior to the commencement of such action that indemnification of
the claimant is proper in the  circumstances  because he has met the  applicable
standard  of  conduct  set  forth  in  Section  490.851  of  the  Iowa  Business
Corporation Act, nor (b) the fact that there has been an actual determination by
the Corporation (including its Board of Directors,  special legal counsel or the
shareholders) that the claimant has not met such applicable standard of conduct,
shall create a presumption that the claimant has not met the applicable standard
of conduct.

         (7)  The  right  to   indemnification,   including  the  right  to  the
advancement of Expenses,  conferred in this Section 12 shall not be exclusive of
any other rights to which a person  seeking  indemnification  or  advancement of
Expenses hereunder may be entitled under any Articles of Incorporation, By-laws,
agreement,  vote  of  shareholders  or  directors,  or  otherwise.   Subject  to
applicable law, to the extent that any rights to  indemnification or advancement
of Expenses  of such person  under any such  Article of  Incorporation,  By-law,
agreement,  vote of shareholders or directors, or otherwise, are broader or more
favorable to such person,  the broader or more  favorable  rights shall control.
The Corporation  shall have the express  authority to enter into such agreements
as the  Board  of  Directors  deems  appropriate  for  the  indemnification  of,
including  the  advancement  of  Expenses  to,  present or future  directors  or
officers of the Corporation in connection with their service to, or status with,
the Corporation or any other corporation,  partnership,  joint venture, trust or
other  enterprise,  including any employee benefit plan, for whom such person is
serving at the request of the Corporation.

         (8)  The  Corporation  may  purchase  and  maintain  insurance,  at its
expense, to protect itself and any person who is or was a director or officer of
the  Corporation,  or is or was serving at the request of the  Corporation  as a
director,  officer,  partner, trustee, employee or agent of another corporation,
partnership,  joint venture,  trust, other enterprise,  or employee benefit plan
against any Liability  asserted  against such person and incurred by such person
in such capacity, or arising out of such person's status as such, whether or not
the  Corporation  would have the power to  indemnify  such person  against  such
Liability under the provisions of this Section 12, the Iowa Business Corporation
Act or  otherwise.  The  Corporation  may create a trust fund,  grant a security
interest  and/or use other  means  (including,  without  limitation,  letters of
credit,


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<PAGE>

surety  bonds  and/or  similar  arrangements),  as well as enter into  contracts
providing  for  indemnification  to the  maximum  extent  permitted  by law  and
including as part thereof any or all of the foregoing,  to ensure the payment of
such  sums  as  may  become  necessary  to  effect  full  indemnification.   The
Corporation's  obligation to make  indemnification  and pay Expenses pursuant to
this Section 12 shall be in excess of any insurance  purchased and maintained by
the  Corporation  and  such  insurance  shall be  primary.  To the  extent  that
indemnity  or Expenses of a person  entitled to  indemnification  and payment of
Expenses  pursuant to this Section 12 are paid on behalf of or to such person by
such  insurance  such  payments  shall be  deemed to be in  satisfaction  of the
Corporation's obligation to such person to make indemnification and pay Expenses
pursuant to this Section 12.

         (9) The right to indemnification, including the right to advancement of
Expenses  provided  herein,  shall be a contract  right,  shall continue as to a
person who has  ceased to be a  director  or officer or to serve in any other of
the  capacities  described in this Section 12, and shall inure to the benefit of
the  heirs,  personal  representatives,  executors  and  administrators  of such
person. Notwithstanding any amendment,  alteration, or repeal of this Section 12
or any of its provisions or the adoption of any provision inconsistent with this
Section  12  or  any  of  its  provisions,  any  person  shall  be  entitled  to
indemnification,  including  the  right  to  the  advancement  of  Expenses,  in
accordance  with the  provisions  hereof  with  respect to any  action  taken or
omitted  prior to such  amendment,  alteration,  or repeal or  adoption  of such
inconsistent provision, except to the extent such amendment, alteration, repeal,
or   inconsistent   provision   provides   broader   rights   with   respect  to
indemnification, including the advancement of Expenses, than the Corporation was
permitted to provide prior to the amendment, alteration, repeal, or the adoption
of such inconsistent provision or to the extent otherwise prescribed by law.

         (10) In the event of any payment under this Section 12, the Corporation
shall be  subrogated  to the  extent  of such  payment  to all of the  rights of
recovery  of  Indemnitee,  who shall  execute all papers  required  and take all
action necessary to secure such rights, including execution of such documents as
are necessary to enable the Corporation to bring suit to enforce such rights.

         (11)  Indemnitee  agrees  promptly to notify the Corporation in writing
upon being served with any summons, citation, subpoena,  complaint,  indictment,
information or other document  relating to any Proceeding or matter which may be
subject to  indemnification  or advancement of Expenses covered  hereunder,  but
Indemnitee's  omission  to so  notify  the  Corporation  shall not  relieve  the
Corporation  from  any  liability  which it may have to  Indemnitee  under  this
Section  12  unless  such  omission  materially  prejudices  the  rights  of the
Corporation  (including,   without  limitation,   the  Corporation  having  lost
significant  substantive or procedural rights with respect to the defense of any
Proceeding).  If such  omission  does  materially  prejudice  the  rights of the
Corporation, the


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<PAGE>

Corporation  shall be relieved from liability  under this Section 12 only to the
extent of such  prejudice;  but such omission  will not relieve the  Corporation
from any  liability  which it may have to Indemnitee  otherwise  than under this
Section 12.

         (12) The Corporation will be entitled to participate at its own expense
in any Proceeding of which it has notice. The Corporation jointly with any other
indemnifying  party  similarly  notified of any  Proceeding  will be entitled to
assume the defense of Indemnitee therein,  with counsel reasonably  satisfactory
to Indemnitee.  After notice from the  Corporation to Indemnitee of its election
to assume the defense of Indemnitee in any Proceeding,  the Corporation will not
be liable to  Indemnitee  under this  Section 12 for any  Expenses  subsequently
incurred  by  Indemnitee  in  connection  with the  defense  thereof,  except as
otherwise  provided  below.  Indemnitee  shall  have the right to employ its own
counsel  in any  such  Proceeding  but the  fees and  expenses  of such  counsel
incurred  after notice from the  Corporation  of its  assumption  of the defense
thereof  shall be at the expense of  Indemnitee  unless:  (i) the  employment of
counsel  by  Indemnitee  has been  authorized  by the  Corporation;  or (ii) the
Corporation  shall not in fact have employed  counsel to or cannot in good faith
without  conflict  assume the defense of Indemnitee  in such  Proceeding or such
counsel has not in fact assumed such defense; in each of which case the fees and
expenses of Indemnitee's counsel shall be advanced by the Corporation.

         (13) A  director  or officer is  considered  to be serving an  employee
benefit  plan at the  Corporation's  request  if  such  person's  duties  to the
Corporation  also  imposed  duties on, or otherwise  involves  services by, that
person to the plan or to the participants in or beneficiaries of the plan.

         (14)  Notwithstanding  anything to the contrary  herein  contained,  no
indemnification  shall be made  pursuant to this  Section 12 for (i) breach of a
person's duty of loyalty to the  Corporation or its  shareholders,  (ii) acts or
omissions not in good faith or which involve  intentional  misconduct or knowing
violation  of the  law,  (iii) a  transaction  from  which  the  person  seeking
indemnification  derives an improper  personal  benefit,  or (iv) for  liability
under Section 490.833 of the Iowa Business Corporation Law.

         Section 13. Committees.  The Board of Directors,  by resolution adopted
by a  majority  of the full Board of  Directors,  may  designate  from among its
members an executive  committee and one or more other  committees each of which,
to the extent provided in such resolution or in the articles of incorporation or
the By-Laws of the Corporation, shall have and may exercise all the authority of
the Board of Directors,  except that no such committee  shall have the authority
to:
         (1)  Authorize distributions;


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<PAGE>

         (2) Approve or propose to  shareholders  action required by Chapter 490
of the Iowa Business Corporation Act to be approved by shareholders;

         (3)  Fill vacancies on the Board of Directors or any of its committees;

         (4)  Amend the articles of incorporation of the Corporation;

         (5) Approve a plan of merger not requiring shareholder approval;

         (6) Adopt, amend or repeal the By-Laws of the Corporation;

         (7) Authorize or approve the reacquisition of shares,  except according
to a formula or method prescribed by the Board of Directors; or

         (8)  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;

however,  the Board of Directors,  having acted regarding general  authorization
for the issuance or sale of shares,  or any contract for issuance or sale,  and,
in the case of a series,  the  designation  of the  series,  may,  pursuant to a
general formula or method specified by the Board by resolution or by adoption of
a stock  option or other plan,  authorize  a  committee  to fix the terms of any
contract  for the sale of the shares and to fix the terms upon which such shares
may be issued or sold,  including,  without limitation,  the price, the dividend
rate,   provisions  for  redemption,   sinking  fund,   conversion,   voting  or
preferential  rights, and provisions for other features of a class of shares, or
a series of a class of shares,  with full power in such  committee  to adopt any
final  resolution  setting forth all the terms and to authorize the statement of
the terms of a series for filing with the Secretary of State.  Written notice of
all Executive Committee actions shall be mailed or delivered to all Directors of
the Corporation within three (3) days after such action is taken.

         Neither the designation of any such committee,  the delegation to it of
authority,  nor action by such committee  pursuant to such authority shall alone
constitute  compliance by any member of the Board of Directors,  not a member of
the committee in question,  with such director's  responsibility  to act in good
faith, in a manner such director reasonably believes to be in the best interests
of the Corporation, and with such care as an ordinarily prudent person in a like
position would use under similar circumstances.


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         Section 14. Meetings by Conference  Telephone.  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 committee by  conference  telephone or
similar communications  equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting pursuant to this
provision shall constitute presence in person at such meeting.

         Section 15. Removal of Directors. A director may be removed from office
at any  time  by the  affirmative  vote  of the  holders  of a  majority  of the
outstanding  shares  entitled to vote for the election of directors at a meeting
of the shareholders called for that purpose.

         Section  16.  Composition  of the  Board of  Directors.  So long as any
shares  of Class B Common  Stock,  $1.00  par  value,  remain  outstanding,  the
Nominating  Committee  shall  not  recommend  to  the  Board  of  Directors  any
individual or individuals for election or appointment to the Board of Directors,
and the  Board of  Directors  shall  not  nominate,  elect or  appoint  any such
individual or individuals if, after such election or appointment,  a majority of
the  members  of the  Board of  Directors  shall  not  consist  of  "independent
directors" (as defined below).

         For purposes of  determining  an  "independent  director"  eligible for
membership on the Board of Directors,  an  "independent  director" is a director
who,  at the time of  determination,  and at any time  within  the  three  years
preceding  such  time,  was  not  employed  by  the  Corporation  or  any of its
subsidiaries  in any  capacity  and who is not (i) a surviving  spouse of Roy J.
Carver,  (ii) a brother or sister of a surviving  spouse of Roy J. Carver,  or a
child (including an adopted child) of any such person, (iii) a lineal descendant
of Roy J. Carver,  (iv) a spouse of a lineal descendant of Roy J. Carver,  (v) a
brother-in-law  or  sister-in-law of a lineal  descendant of Roy J. Carver,  and
(vi) a brother  or sister of Roy J.  Carver  or a child  (including  an  adopted
child) of any such person.  For purposes of the foregoing  definition,  the term
"lineal descendant" includes an adopted child.

         No substantive amendment to this Section 16 may be made except with the
affirmative vote of the holders of a majority of the then outstanding  shares of
Common Stock and Class B Common Stock, each voting separately as a class.


                                   ARTICLE IV
                                   ----------
                                    OFFICERS
                                    --------

         Section 1.  Corporate  Officers.  The officers  designated as Corporate
Officers  shall be  elected  by the Board of  Directors  and shall  consist of a
Chairman of the Board, a President,  one or more Senior Vice Presidents,  one or


                                       11
<PAGE>

more  Vice  Presidents,   a  Treasurer,  a  Secretary,  one  or  more  Assistant
Treasurers,  and one or more Assistant Secretaries.  The Board of Directors from
time to time also may elect  one or more Vice  Chairmen  of the Board and one or
more Executive Vice  Presidents.  Any two or more of such offices may be held by
the same person.  Corporate officers shall have the power,  authority and duties
hereinafter set forth relative to their respective offices.

         Section 2.  Appointive  Officers.  Upon approval of the Chairman of the
Board, an appropriate  title may be given from time to time to certain employees
of the Corporation  who are managing one or several  groups,  divisions or other
operations of the Corporation, provided, however, that any employee who has been
given a title shall not be deemed to be a Corporate  Officer of the  Corporation
for any purpose solely by virtue of such title. Each person given any such title
shall hold such title at the will of the  Chairman  of the Board and shall cease
to use such title when directed by the Chairman of the Board. He shall have such
powers and  perform  such  duties  with  respect to a group,  division  or other
operation of the  Corporation as shall be assigned to him by the Chairman of the
Board.  Vacancies  in  appointive  offices may be filled by the  Chairman of the
Board.

         Section 3. Election and Term of Office. The Corporate Officers shall be
elected  annually by the Board of Directors at the first meeting of the Board of
Directors  held  after  each  Annual  Meeting  of the  Shareholders  or as  soon
thereafter  as  conveniently  may be. Each  Corporate  Officer shall hold office
until his  successor  is elected and shall have  qualified or until his death or
until he shall resign or have been removed from office in the manner hereinafter
provided.  Vacancies  may be filled and new  offices  created  and filled at any
meeting of the Board of Directors.

         Section  4.  Removal.  Any  Corporate  Officer  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,  but such removal
shall be without  prejudice  to the  contract  rights,  if any, of the person so
removed.

         Section 5.  Vacancies.  A vacancy in any  Corporate  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 6.  Chairman  of the Board.  The  Chairman  of the Board  shall
preside at all meetings of the shareholders and directors. He shall be the chief
executive  officer of the Corporation and shall have general  supervision of the
business, affairs and property of the Corporation and over its several officers,
subject,  however,  to the  control  of the Board of  Directors.  He shall be ex
officio a member of all standing committees,  other than the Audit Committee and
the  Stock  Option  Committee,  and  shall  see that all  orders of the Board of
Directors


                                       12
<PAGE>

and resolutions of the Board of Directors are carried into effect. He shall have
authority to execute bonds,  mortgages and other  contracts  requiring the seal,
under the seal of the Corporation, except where required and permitted by law to
be otherwise  signed and  executed,  and except where the signing and  execution
thereof  shall be  expressly  delegated  by the Board of Directors to some other
officer or agent of the Corporation.

         Section 6 (a).  Vice  Chairman of the Board.  Each Vice Chairman of the
Board  shall  perform  such  duties  as may be  assigned  to him by the Board of
Directors.

         Section 7. The  President.  The President  shall perform such duties as
may be assigned to him by the Board or  Directors.  In the absence or disability
of the Chairman of the Board,  the  President  shall  preside at meetings of the
shareholders  and of the Board of Directors.  He shall have authority to execute
bonds,  mortgages and other contracts  requiring the seal, under the seal of the
Corporation,  except where required and permitted by law to be otherwise  signed
and  executed,  and except  where the signing  and  execution  thereof  shall be
expressly  delegated by the Board of Directors to some other officer or agent of
the Corporation.

         Section 8.  Executive  Vice  Presidents.  Each Executive Vice President
shall perform such duties as may be assigned to him by the Board of Directors.

         Section 9. Senior Vice Presidents - Vice  Presidents.  Each Senior Vice
President and each Vice President  elected as a Corporate  Officer shall perform
such duties as from time to time may be  assigned to him by the  Chairman of the
Board or by the Board of Directors.

         Section 10. The Secretary. The Secretary shall: (a) keep the minutes of
the Shareholders' and Board of Directors' meetings in one or more books provided
for that purpose; (b) see that all notices are duly given in accordance with the
provisions  of these  By-Laws or as required  by law;  (c) be  custodian  of the
corporate  records and of the seal of the  Corporation  and see that the seal of
the  Corporation is affixed to all documents the execution of which on behalf of
the Corporation  under its seal is duly  authorized;  (d) keep a register of the
post  office  address  of each  shareholder  which  shall  be  furnished  to the
Secretary by such shareholders;  (e) sign with the Chairman of the Board, or the
President,  or an  Executive  Vice  President,  certificates  for  shares of the
corporation,  the issuance of which shall have been  authorized by resolution of
the Board of Directors;  (f) have general  charge of the stock transfer books of
the Corporation; and (g) in general perform all duties incident to the office of
the  Secretary and such other duties as from time to time may be assigned to him
by the Chairman of the Board or by the Board of Directors.


                                       13
<PAGE>

         Section 11. The Treasurer.  If required by the Board of Directors,  the
Treasurer shall give a bond for the faithful discharge of his duties in such sum
and with such surety or sureties as the Board of Directors shall  determine.  He
shall:  (a) have  charge  and  custody of and be  responsible  for all funds and
securities  of the  Corporation;  receive and give  receipts  for moneys due and
payable to the  Corporation  from any source  whatsoever,  and  deposit all such
moneys in the name of the  Corporation in such banks,  trust  companies or other
depositaries as shall be selected in accordance with the provisions of Article V
of these By-Laws;  and (b) in general  perform all of the duties incident to the
office of  Treasurer  and such other duties as from time to time may be assigned
to him by the Chairman of the Board or by the Board of Directors.

         Section  12.  Assistant  Secretary.   The  Assistant  Secretary,   when
authorized  by the  Board of  Directors,  may  sign  with  the  President  or an
Executive  Vice  President  certificates  for  shares  of the  Corporation,  the
issuance of which shall have been  authorized  by a  resolution  of the Board of
Directors.  The Assistant  Secretary,  in general,  shall perform such duties as
shall be assigned to him by the Chairman of the Board.

         Section 13. Salaries.  The salaries of the Corporate  Officers shall be
fixed from time to time by the Board of Directors. No officer shall be prevented
from  receiving  such salary by reason of the fact that he is also a director of
the Corporation.


                                    ARTICLE V
                                    ---------
                      CONTRACTS, LOANS, CHECKS AND DEPOSITS
                      -------------------------------------

         Section 1.  Contracts.  The Board of  Directors,  the  President or any
officer  designated  by the Chairman of the Board,  may authorize any officer or
officers, agent or agents, to enter into any contract or 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, subject to such limitations as
the Board may prescribe.

         Section  2.  Loans.  No loans  shall be  contracted  on  behalf  of the
Corporation and no evidence of  indebtedness  shall be issued in its name unless
authorized  by a  resolution  of the Board of  Directors,  or,  subject  to such
limitations  as the Board may  prescribe,  unless  authorized  in writing by the
Chairman of the Board or any officer  designated  by the  Chairman of the Board.
Any such authority may be general or confined to specific instances.

         Section 3. Checks,  Drafts, Etc. All checks, drafts or other orders for
the payment of money,  notes or other  evidences of  indebtedness  issued in the
name of the Corporation,  shall be signed by such officer or officers,  agent or
agents of


                                       14
<PAGE>

the  Corporation  and in such manner as shall from time to time be determined by
resolutions of the Board of Directors.

         Section  4.  Deposits.  All  funds  of the  Corporation  not  otherwise
employed shall be deposited  from time to time to the credit of the  Corporation
in such banks,  trust companies or other  depositaries as the Board of Directors
may select or may be selected by officers  pursuant to authority  granted by the
Board of Directors.


                                   ARTICLE VI
                                   ----------
                   CERTIFICATES FOR SHARES AND THEIR TRANSFER
                   ------------------------------------------

         Section 1. Certificates for Shares. Certificates representing shares of
the  Corporation  shall be in such form as shall be  determined  by the Board of
Directors.  Such certificates  shall be signed by the Chairman of the Board, the
President  or a Senior  Vice  President  and by the  Secretary  or an  Assistant
Secretary.  The  signatures  of the  Chairman of the Board,  the  President or a
Senior  Vice  President  and the  Secretary  or an  Assistant  Secretary  upon a
certificate may be facsimiles if the certificates is countersigned by a transfer
agent, or registered by a registrar,  other than the Corporation  itself,  or an
employee  of the  Corporation.  In case  any  officer  who has  signed  or whose
facsimile  signature  has been placed on such  certificate  for the  Corporation
shall have ceased to be such officer before such  certificate is issued,  it may
be issued by the Corporation  with the same effect as if he were such officer at
the time of its  issue.  All  certificates  for  shares  shall be  consecutively
numbered or otherwise identified. The name and address 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 stock  transfer  books of the  Corporation.  All
certificates  surrendered to the Corporation for transfer shall be cancelled and
no new  certificate  shall be issued  until the  former  certificate  for a like
number of shares shall have been surrendered and cancelled,  except that in case
of a lost,  destroyed or mutilated  certificate a new one may be issued therefor
upon such terms and indemnity to the  Corporation  as the Board of Directors may
prescribe.

         Section 2.  Transfer of Shares.  Transfer of shares of the  Corporation
shall be made only on the stock transfer books of the  Corporation by the holder
of record  thereof  or by his legal  representative,  who shall  furnish  proper
evidence of authority to transfer,  or by his attorney  thereunto  authorized by
power of attorney duly executed and filed with the Secretary of the Corporation,
and on surrender for cancellation of the certificate for such shares. The person
in whose name shares  stand on the books of the  Corporation  shall be deemed by
the Corporation to be the owner thereof for all purposes.


                                       15
<PAGE>

         Section 3.  Issuance  of  Fractional  Shares or Script.  No  fractional
shares of the  Corporation  shall be issued and no  transfer  of a fraction of a
share shall be permitted.  In lieu of issuing a fraction of a share the Board of
Directors  may  authorize  payment in cash of the fair value of  fractions  of a
share  as of the  time  when  those  entitled  to  receive  such  fractions  are
determined, or may authorize the issuance of script in registered or bearer form
which shall  entitle the holder to receive a  certificate  for a full share upon
the surrender of such script  aggregating  a full share.  The Board of Directors
may cause such script to be issued subject to the condition that it shall become
void if not  exchanged  for  certificates  representing  full  shares  before  a
specified date or subject to the condition that the shares for which such script
is  exchangeable  may be  sold  by the  Corporation  and  the  proceeds  thereof
distributed  to the  holders of such  script or subject to any other  conditions
which the Board of Directors may deem advisable.


                                   ARTICLE VII
                                   -----------
                                   FISCAL YEAR
                                   -----------

         The fiscal year of the Corporation shall end on the thirty-first day of
December in each year.


                                  ARTICLE VIII
                                  ------------
                                    DIVIDENDS
                                    ---------

         The  Board  of  Directors  may  from  time  to  time  declare,  and the
Corporation may pay,  dividends on its outstanding shares in the manner and upon
the terms and conditions provided by law and its articles of incorporation.


                                   ARTICLE IX
                                   ----------
                                      SEAL
                                      ----

         The Board of Directors  shall  provide a corporate  seal which shall be
circular in form and shall have  inscribed  thereon the name of the  Corporation
and the state of incorporation  and the words "Corporate  Seal." The Corporation
may use the seal by causing  it, or a  facsimile  thereof,  to be  impressed  or
affixed or in any other manner reproduced.


                                    ARTICLE X
                                    ---------
                                WAIVER OF NOTICE
                                ----------------


                                       16
<PAGE>

         Whenever  any  notice is  required  to be given to any  shareholder  or
director  of  the   Corporation   under  the   provisions  of  the  articles  of
incorporation  or under the provisions of the Iowa Business  Corporation  Act, a
waiver  thereof in  writing,  signed by the person or persons  entitled  to such
notice,  whether  before  or after  the time  stated  therein,  shall be  deemed
equivalent to the giving of such notice.


                                   ARTICLE XI
                                   ----------
                                   AMENDMENTS
                                   ----------

         These  By-Laws may be altered,  amended or repealed and new By-Laws may
be adopted by the Board of  Directors  at any regular or special  meeting of the
Board of Directors,  but only in a manner  consistent with the provisions of the
Restated  Articles of Incorporation of the Corporation,  as amended from time to
time.


                                       17