Document:

Exhibit 4.2 

BANDAG,
INCORPORATED
STOCK APPRECIATION RIGHTS AGREEMENT  

        THIS
AGREEMENT, by Bandag, Incorporated, a ___________ corporation (the
“Company”), and ____________________, an employee of the Company or an Affiliate
(the “Participant”), sets forth the terms and conditions of the stock
appreciation right (“SAR”) granted to the Participant under the Bandag,
Incorporated 2004 Stock Grant and Awards Plan (the “Plan”). 

1.    Grant
of SAR. The Management Continuity and Compensation Committee of the           Board
of Directors of the Company (the “Committee”) has awarded to you           an
SAR with respect to the Class A common stock of the Company, subject to the
          terms and conditions of this Agreement and subject to approval of the Plan by
          the Company’s shareholders.  

2.    General Terms of Your SAR.  

The number of Shares subject to this
SAR (the “SAR Shares”) is: ________________________  

The “Grant Price” of each
SAR Share is: $________________________ 

The “Grant Date” of this
SAR is: ________________________  

The “Expiration Date” of your
right to exercise a SAR Share is: 5:00 p.m. (EST) on the tenth (10th)
anniversary of the Grant Date. However, your right to exercise this SAR may terminate
before the Expiration Date as discussed in Section 4. 

3.    Conditions of Exercise. 

	 	a. 	Conditions
of Exercise. Subject to the provisions of the Plan and this                Agreement,
you may exercise the SAR only after  the SAR Shares are                vested, and
only before the Expiration Date or the termination date                described
in Section 4. 

	 	b. 	Vesting
of SAR. Your SAR Shares will vest as follows, provided you are an
               employee of the Company or an Affiliate on the applicable vesting date: 

	 	i. 	25%
of the SAR Shares will vest on the first anniversary of the Grant Date;  

	 	ii. 	an
additional 25% of the SAR Shares will vest on the second anniversary of the
               Grant Date;  

	 	iii. 	an
additional 25% of the SAR Shares will vest on the third anniversary of the
               Grant Date; and  

	 	iv. 	the
remaining 25% of the SAR Shares will vest on the fourth anniversary of the
               Grant Date.  

	 	
If,
however, you terminate employment from the Company or an Affiliate as a result of death,
Disability or Retirement prior to becoming fully vested, your SAR Shares will vest in
full as of the date of your termination.  

	 	
Except
for death, Disability or Retirement, those SAR Shares that are not vested as of the date
of your termination of employment from the Company or an Affiliate shall automatically
and without notice terminate and be cancelled effective as of the date of such
termination.  

4.    Termination of Employment. The
following paragraphs apply in the event of                your termination of employment
from the Company or an Affiliate prior to the                Expiration Date. In no
event, however, will the periods described in this                Section 4 extend the
term of the SAR beyond its Expiration Date or beyond the                date the SAR is
otherwise cancelled pursuant to the terms of the Plan.  

	 	a. 	Termination
Due to Death. If your employment with the Company or an                Affiliate is
terminated by reason of death, your estate or other person or                persons that
acquire your rights under the SAR by will or by the laws of descent                and
distribution, may exercise the SAR until the first (1st)
               anniversary of the date of your death. 

	 	b. 	Termination
Due to Disability. If you terminate employment from the                Company or an
Affiliate by reason of a Disability, you (or your legal                representative)
may exercise the SAR until the first (1st)                anniversary of the
date of such termination. 

	 	c. 	Termination
Due to Retirement. If you terminate employment from the                Company or an
Affiliate by reason of Retirement, you (or your legal                representative) may
exercise the SAR until the third (3rd)                anniversary of the date
of such termination. 

	 	d. 	Termination
for Any Other Reason. If you terminate employment from the                Company or
an Affiliate for any reason not described above, you may exercise the                SAR,
to the extent the SAR Shares are vested as of the date of such termination
               of employment, for a period of three (3) months after the date of such
               termination. 

5.    Exercise of SAR. You may
exercise the SAR, to the extent the SAR Shares                are vested, by delivering
written notice to the Secretary of the Company, on the                form attached
hereto, specifying the whole number of vested SAR Shares to which                the
notice relates.  

Upon delivery of the notice of
exercise, you will be entitled to a payment from the Company of an amount equal to the
number of SAR Shares specified in the notice multiplied by: (a) the Fair Market Value
of a share of Stock (determined as of the date the Company receives your notice of
exercise form), reduced by (b) the Grant Price for an SAR Share. 

2 

Payment will be made as soon as
practicable after the Company processes your exercise. Payment will be made in shares of
Stock having a Fair Market Value (determined as of the date the Company receives your
notice of exercise form) equal to the amount of the payment due. Any fractional shares
will be paid in cash. Your payment may be reduced by an amount the Company or an Affiliate
deems necessary to satisfy its liability to withhold Federal, state or local income taxes
or other taxes due by reason of the exercise. Alternatively, the Company or an Affiliate
may reduce compensation that is otherwise payable to you by the amount the Company or an
Affiliate deems necessary to satisfy its liability to withhold Federal, state or local
income taxes or other taxes due by reason of the exercise. 

6.    Change
of Control. Upon a Change of Control, the provisions of Section 17           of the
Plan shall apply.  

7.    Failure
to Enforce Not a Waiver. The failure of the Company to enforce at           any time
any provision of this SAR Agreement shall in no way be a waiver of such
          provision or of any other provision hereof.  

8.    Participant
Bound by Plan. You hereby acknowledge receipt of a copy of           the Plan and
agree to be bound by all the terms and provisions thereof. The           terms of the
Plan are expressly incorporated into this Agreement by reference           and in the
event of any conflict between this Agreement and the Plan, the Plan           shall
govern. Any capitalized terms not defined herein will have the meanings           given
in the Plan. This Agreement is subject to all of the terms, conditions and
          provisions of the Plan, including, without limitation, the Plan’s
amendment           provisions, and to such rules, regulations and interpretations
relating to the           Plan or this Agreement as are adopted by the Committee and in
effect from time           to time. By signing below, you agree and accept on behalf of
yourself, and your           heirs, legatees and legal representatives, that all
decisions or interpretations           of the Committee with respect to the Plan or this
Agreement are binding,           conclusive and final.  

IN WITNESS WHEREOF, the
parties have executed this Stock Appreciation Rights Agreement on the _____ day of
____________, 200___. 

		BANDAG, INCORPORATED:
	

 	By_____________________________
		Its:_____________________________
	

 	

PARTICIPANT:

_____________________________

3 

BANDAG,
INCORPORATED
NOTICE OF STOCK APPRECIATION RIGHT (SAR) EXERCISE  

You are encouraged to
consult your personal financial or tax advisor
prior to exercising your SAR.  

Please complete and sign
this Form and send it to: 

Or fax it to:  

An incomplete form may
cause a delay in processing your SAR exercise. 

PART 1:    PARTICIPANT
INFORMATION:    Please complete the following: 

Name:__________________________________________________

Street Address:__________________________________________________  

City: ___________________
 State:____________        Zip Code:____________  

Work Phone #: (_____) -
____- ________ Home Phone #: (_____) - ____- ________  

Social Security #: ______
– _____ – _______ 

PART 2:    DESCRIPTION OF SAR(s) SHARES
BEING EXERCISED Please complete the following for the SAR(s) Shares to which this
notice relates. 

			
	Date of Grant	Grant Price	Number of Vested SAR Shares
	
	
	

		$	
	
	
	

		$	
	
	
	

		$	
	
	
	

		$	
	
	
	

		$	
	
	
	

4 

PART 3:    ACKNOWLEDGEMENTS
AND SIGNATURE 

        I
hereby acknowledge that I have received and read a copy of the Bandag, Incorporated 2004
Stock Grant and Awards Plan and the prospectus for such plan, and understand the tax
consequences of an exercise. 

	Signature: _______________________________	Date: _________________________

****** 

To be completed by
_____________________________: 

Received by: __________________________________________________ 

Date received: __________________________________________________ 

5Exhibit 4.3 

BANDAG,
INCORPORATED
RESTRICTED STOCK UNIT AGREEMENT  

        THIS
AGREEMENT, by Bandag, Incorporated, a ___________ corporation (the
“Company”), and ____________________, an employee of the Company or an Affiliate
(the “Participant”), sets forth the terms and conditions of the restricted stock
units (“RSUs”) and related dividend equivalent units (“DEUs”) granted
to the Participant under the Bandag, Incorporated 2004 Stock Grant and Awards Plan (the
“Plan”). 

1.    Grant
of RSUs. The Management Continuity and Compensation Committee of           the Board
of Directors of the Company (the “Committee”) has awarded to           you RSUs
(each with a related DEU), subject to the terms and conditions of this
          Agreement and subject to approval of the Plan by the Company’s
          shareholders.  

2.    General Terms of Your RSUs.  

The number of RSUs subject to this
Agreement is:  . 

The value of each RSU is: the Fair Market
Value of one share of the Company’s Class A common stock. 

The value of each DEU is: the amount
of cash dividends, if any, paid with respect to a share of the Company’s Class A
common stock while this Agreement is outstanding. 

The "Grant Date" of this Award is:
_____________________________________________________________. 

	3. 	Vesting
of RSUs. The RSUs (and related DEUs) will vest in full on the           third
anniversary of the Grant Date, provided you are an employee of the Company           or
an Affiliate on such date. If, however, you terminate employment from the
          Company or an Affiliate as a result of death, Disability or Retirement prior to
          the vesting date, your RSUs (and their related DEUs) will vest in full as of
the           date of your termination. 

	 	
Except
in the case of death, Disability or Retirement, if you terminate employment from the
Company or an Affiliate prior to the third anniversary of the Grant Date, all of the RSUs
(and their related DEUs) shall automatically and without notice terminate and be cancelled
effective as of the date of such termination. 

	4. 	Payment
of RSUs and DEUs. The value of your vested RSUs (and their           related DEUs)
will be paid within 30 days after the date your RSUs (and their           related DEUs)
are vested as provided in Section 3. 

	 	
Payment
will be made in shares of Stock having a Fair Market Value (determined as of the vesting
date) equal to the amount of the payment due, provided that any fractional Shares will be
paid in cash. Your payment may be reduced by the amount the Company or an Affiliate deems
necessary to satisfy its liability to withhold Federal, state or local income taxes or
other taxes due by reason of the payment. Alternatively, the Company or an Affiliate may
reduce compensation that is otherwise payable to you by the amount the Company or an
Affiliate deems necessary to satisfy its liability to withhold Federal, state or local
income taxes or other taxes due by reason of the payment. 

	5. 	Change
of Control. Upon a Change of Control, the provisions of Section 17           of the
Plan shall apply. 

	6. 	Failure
to Enforce Not a Waiver. The failure of the Company to enforce at           any time
any provision of this Agreement shall in no way be a waiver of such           provision
or of any other provision hereof. 

	7. 	Participant
Bound by Plan. You hereby acknowledge receipt of a copy of           the Plan and
agree to be bound by all the terms and provisions thereof. The           terms of the
Plan are expressly incorporated into this Agreement by reference           and in the
event of any conflict between this Agreement and the Plan, the Plan           shall
govern. Any capitalized terms not defined herein will have the meanings           given
in the Plan. This Agreement is subject to all of the terms, conditions and
          provisions of the Plan, including, without limitation, the Plan’s
amendment           provisions, and to such rules, regulations and interpretations
relating to the           Plan or this Agreement as are adopted by the Committee and in
effect from time           to time. By signing below, you agree and accept on behalf of
yourself, and your           heirs, legatees and legal representatives, that all
decisions or interpretations           of the Committee with respect to the Plan or this
Agreement are binding,           conclusive and final. 

IN WITNESS WHEREOF, the
parties have executed this Restricted Stock Unit Agreement on the _____ day of
____________, 200___. 

		BANDAG, INCORPORATED:
	

 	By_____________________________
		Its:_____________________________
	

 	

PARTICIPANT:

_____________________________

2

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