BANDAG INC
DEF 14A, 1996-03-28
TIRES & INNER TUBES
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                            SCHEDULE 14A INFORMATION
                Proxy Statement Pursuant to Section 14(a) of the
                         Securities Exchange Act of 1934
                              (Amendment No. ____)

   Filed by the Registrant [X]
   Filed by a Party other than the Registrant [ ]

   Check the appropriate box:

   [ ]  Preliminary Proxy Statement             [ ]  Confidential, for Use of
                                                     the Commission Only (as
                                                     permitted by Rule 14a-
                                                     6(e)(2))
   [X]  Definitive Proxy Statement
   [ ]  Definitive Additional Materials
   [ ]  Soliciting Material Pursuant to Section 240.14a-11(c) or Section
        240.14a-12

                              BANDAG, INCORPORATED
                (Name of Registrant as Specified in its Charter)

                                                               
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

   Payment of Filing Fee (Check the appropriate box):

   [X]  $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
        or Item 22(a)(2) of Schedule 14A.

   [ ]  $500 per each party to the controversy pursuant to Exchange Act Rule
        14a-6(i)(3).

   [ ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-
        11.

        1)  Title of each class of securities to which transaction applies:

        2)  Aggregate number of securities to which transaction applies:

        3)  Per unit price or other underlying value of transaction computed
        pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
        filing fee is calculated and state how it was determined):

        4)  Proposed maximum aggregate value of transaction:

        5)  Total fee paid:

   [ ]  Fee paid previously with preliminary materials.

   [ ]  Check box if any part of the fee is offset as provided by Exchange
        Act Rule 0-11(a)(2) and identify the filing for which the offsetting
        fee was paid previously.  Identify the previous filing by
        registration statement number, or the Form or Schedule and the date
        of its filing.

        1)  Amount Previously Paid:

        2)  Form, Schedule or Registration Statement No.:

        3)  Filing Party:

        4)  Date Filed:

   <PAGE>
   BANDAG, INCORPORATED
   Bandag Headquarters
   2905 North Highway 61
   Muscatine, Iowa 52761-5886
   March 29, 1996


                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

                             To Be Held May 7, 1996



   To The Shareholders:

        The Annual Meeting of the Shareholders of Bandag, Incorporated, an
   Iowa corporation, will be held at the Holiday Inn, 2915 North Highway 61,
   Muscatine, Iowa, on May 7, 1996, commencing at ten o'clock a.m., Central
   Daylight Time, for the following purposes:

        (1)  To elect three directors for terms of three years.

        (2)  To ratify the selection of Ernst & Young LLP as independent
             auditors of the Corporation for the fiscal year ending December
             31, 1996.

        (3)  To transact such other business as may properly come before the
             meeting or any adjournment thereof.

        The Board of Directors has fixed March 22, 1996, as the record date
   for the determination of shareholders entitled to notice of and to vote at
   the meeting.

        You are invited to attend the meeting; however, if you do not expect
   to attend in person, you are urged to sign, date and return immediately
   the enclosed Proxy, which is solicited by the Board of Directors.  You may
   revoke your Proxy and vote in person should you attend the meeting.

                            By Order of the Board of Directors




                            WARREN W. HEIDBREDER, Secretary


   BANDAG, INCORPORATED
   Bandag Headquarters
   2905 North Highway 61
   Muscatine, Iowa 52761-5886
   March 29, 1996 


                         P R O X Y    S T A T E M E N T


   This Proxy Statement is furnished in connection with the solicitation of
   proxies by the Board of Directors of Bandag, Incorporated (the
   "Corporation") to be voted at the Annual Meeting of the Shareholders of
   the Corporation to be held on Tuesday, May 7, 1996, or at any adjournment
   thereof, for the purposes set forth in the foregoing Notice of Annual
   Meeting.  Any shareholder giving a proxy may revoke it at any time prior
   to its exercise.

        Shareholders of record at the close of business on March 22, 1996,
   will be entitled to vote at the meeting or any adjournment thereof.  At
   the close of business on March 22, 1996, there were 10,125,279 outstanding
   $1.00 par value shares of Common Stock and 2,355,152 outstanding $1.00 par
   value shares of Class B Common Stock.  Each share of Common Stock is
   entitled to one vote and each share of Class B Common Stock is entitled to
   ten votes at the meeting.

        The Corporation's Annual Report for the fiscal year ended December
   31, 1995, this Proxy Statement and the enclosed form of proxy are being
   mailed to shareholders on or about March 29, 1996.

        The following table sets forth information as to the Common, Class A
   Common and Class B Common shares of the Corporation beneficially owned by
   each director and director-nominee, each of the executive officers named
   in the Summary Compensation Table and by all directors and executive
   officers  as a group as of March 22, 1996:


                                                                 Percentage
                                                                of Aggregate
                                                                Voting Power
                                                  Percentage     of Common
                                                of Outstanding   Stock and
                                    Amount         Stock of       Class B
      Directors, Nominees and    Beneficially     Respective       Common
        Executive Officers        Owned [1]       Class [1]       Stock**

    Lucille A. Carver  [2]
         Common Stock           2,330,685            23%
         Class A Common Stock   3,745,431            32%
         Class B Common Stock   1,414,746            60%            49%

    Martin G. Carver  [3] [4]
         Common Stock             133,312             1%
         Class A Common Stock     599,155             5%
         Class B Common Stock     502,622            21%            15%
    Roy J. Carver, Jr.  [2]
         Common Stock              15,000             *
         Class A Common Stock     334,202             3%
         Class B Common Stock     400,702            17%            12%

    Robert K. Drummond [5]
         Common Stock               2,305             *
         Class A Common Stock       3,760             *
         Class B Common Stock       1,455             *              *

    James R. Everline
         Common Stock                 100             *
         Class A Common Stock         450             *
         Class B Common Stock         350             *              *

    Edgar D. Jannotta
         Common Stock               7,000             *
         Class A Common Stock       7,000             *
         Class B Common Stock         -0-            -0-             *

    Stephen A. Keller
         Common Stock              20,000             *
         Class A Common Stock      20,000             *
         Class B Common Stock         -0-            -0-             *

    R. Stephen Newman
         Common Stock               2,500             *
         Class A Common Stock       2,500             *
         Class B Common Stock         -0-            -0-             *

    Gary L. Carlson 
         Common Stock               2,257             *
         Class A Common Stock       1,869             *
         Class B Common Stock         -0-            -0-             *

    Donald F. Chester
         Common Stock               3,922             *
         Class A Common Stock       3,476             *
         Class B Common Stock         -0-            -0-             *

    Thomas E. Dvorchak [6]
         Common Stock               9,982             *
         Class A Common Stock       8,233             *              *
         Class B Common Stock         -0-            -0-

    Stuart C. Green
         Common Stock               1,456             *
         Class A Common Stock         645             *              *
         Class B Common Stock         -0-            -0-

    All Directors, Nominees
     and Executive Officers
     as a Group (16 Persons)
     [7]
         Common Stock           2,518,422            25%
         Class A Common Stock   4,715,971            40%
         Class B Common Stock   2,319,877            98%            76%


   *  Shares owned constitute less than 1% of shares outstanding and less
   than 1% of votes entitled to be cast.
   ** Shares of Class A Common Stock are non-voting.

   [1]  Beneficial owners exercise both sole voting and sole investment power
        unless otherwise stated. The Class B Common Stock is convertible on a
        share-for-share basis into Common Stock at the option of the
        shareholder. As a result, pursuant to Rule 13d-3(d)(1) of the
        Securities Exchange Act of 1934, a shareholder is deemed to have
        beneficial ownership of the shares of Common Stock which such
        shareholder may acquire upon conversion of the Class B Common Stock. 
        In order to avoid overstatement, the amount of Common Stock
        beneficially owned does not take into account such shares of Common
        Stock which may be acquired upon conversion (an amount which is equal
        to the number of shares of Class B Common Stock held by a
        shareholder). The percentage of outstanding Common Stock is based on
        the total number of shares of Common Stock outstanding as of March
        22, 1996 (10,125,279 shares), and does not take into account shares
        of Common Stock which may be issued upon conversion of the Class B
        Common Stock.

   [2]  Indicates one of seven trustees of the Roy J. Carver Charitable Trust
        which owns 15,000 shares of Common Stock, 15,000 shares of Class A
        Common Stock and no shares of Class B Common Stock.

   [3]  Mr. Carver disclaims beneficial ownership of 19,195 shares of Common
        Stock, 5,300 shares of Class A Common Stock and 525 shares of Class B
        Common Stock held by members of his family.

   [4]  Includes 100,000 shares of Common Stock and 100,000 shares of Class A
        Common Stock which Mr. Carver has the right to acquire upon exercise
        of stock options within 60 days after March 22, 1996.

   [5]  Mr. Drummond disclaims beneficial ownership of 130 shares of Common
        Stock, 260 shares of Class A Common Stock and 130 shares of Class B
        Common Stock held by members of his family.

   [6]  Mr. Dvorchak disclaims beneficial ownership of 5,000 shares of Class
        A Common Stock held by a member of his family.

   [7]  In determining the aggregate beneficial ownership of Common Stock,
        Class A Common Stock and Class B Common Stock for all directors and
        officers as a group, shares which are beneficially owned by more than
        one officer or director have been counted only once to avoid
        overstatement.

                        ---------------------------------

        Principal Shareholders.  The following tables provide information
   concerning persons known by the Corporation to beneficially own at least
   five percent of any class of the Corporation's voting securities as of
   March 22, 1996:

     COMMON SHARES AND CLASS B COMMON SHARES HELD BY OFFICERS AND DIRECTORS


                                                               Percentage
                                                 Percentage   of Aggregate
                                                     of       Voting Power
                                                 Outstanding   of Common
                                     Amount       Stock of     Stock and
                                  Beneficially   Respective     Class B
          Name and Address          Owned [2]     Class [2]   Common Stock

    Lucille A. Carver [1] [2] 
    c/o Bandag, Incorporated
    2905 North Highway 61
    Muscatine, Iowa 52761-5886
         Common Stock             2,330,685          23%
         Class B Common Stock     1,414,746          60%          49%

    Martin G. Carver [2]
    c/o Bandag, Incorporated
    2905 North Highway 61
    Muscatine, Iowa 52761-5886
         Common Stock               133,312          1%
         Class B Common Stock       502,622          21%          15%

    Roy J. Carver, Jr. [1][2]
    c/o Bandag, Incorporated
    2905 North Highway 61
    Muscatine, Iowa 52761-5886
         Common Stock                15,000           *
         Class B Common Stock       400,702          17%          12%


   *Shares owned constitute less than 1% of shares outstanding and less than
   1% of votes entitled to be cast.

                          __________________________

   [1]  Indicates one of seven trustees who exercises shared voting and
        investment power over 15,000 shares of Common Stock in the Roy J.
        Carver Charitable Trust.

   [2]  Beneficial owners exercise both sole voting and sole investment power
        unless otherwise stated.  The Class B Common Stock is convertible on
        a share-for-share basis into Common Stock at the option of the
        shareholder.  As a result, pursuant to Rule 13d-3(d)(1) of the
        Securities Exchange Act of 1934, a shareholder is deemed to have
        beneficial ownership of the shares of Common Stock which such
        shareholder may acquire upon conversion of the Class B Common Stock. 
        In order to avoid overstatement, the amount of Common Stock
        beneficially owned does not take into account such shares of Common
        Stock which may be acquired upon conversion (an amount which is equal
        to the number of shares of Class B Common Stock held by a
        shareholder).  The percentage of outstanding Common Stock is based on
        the total number of shares of Common Stock outstanding as of March
        22, 1996 (10,125,279 shares), and does not take into account shares
        of Common Stock which may be issued upon conversion of the Class B
        Common Stock.


                      Proposal No. 1-ELECTION OF DIRECTORS

        The Articles of Incorporation require election of directors to
   staggered terms of three years, providing that three of the directors are
   elected each year. Three nominees this year are to be elected for three-
   year terms.

        Proxies will be voted for the election of each of the nominees listed
   below, unless the shareholder giving the proxy votes against, or abstains
   from voting for, any nominee.  If, as a result of unforeseen
   circumstances, any such nominee shall be unable  to serve as director,
   proxies will be voted for the election of such person or persons as the
   Board may select. Information about the nominees is set forth below:

                   NOMINEES FOR ELECTION TO BOARD OF DIRECTORS

        LUCILLE A. CARVER,, age 78, has for more than five years served as
   Treasurer of the Corporation.  She is a member of the Contributions
   Committee and the Nominating Committee.  Mrs. Carver has been a Director
   since 1957.

        MARTIN G. CARVER, age 47, was elected Chairman of the Board effective
   June 23, 1981, Chief Executive Officer effective May 18, 1982, and
   President effective May 25, 1983.  Mr. Carver was also Vice Chairman of
   the Board from January 5, 1981 to June 23, 1981.  He is a member of the
   Executive Committee, Management Continuity and Compensation Committee,
   Nominating Committee and the Strategic Planning Committee.  Mr. Carver has
   been a Director since 1978.

        EDGAR D. JANNOTTA, age 64.  On  January 2, 1996,  William Blair &
   Company converted from a partnership to a limited liability company, at
   which time Mr. Jannotta became Senior Principal  of William Blair &
   Company, L.L.C.   Mr. Jannotta became Senior Partner of William Blair &
   Company on January 1, 1995, after having served as Managing Partner for
   more than five years.  He holds directorships in AAR Corp., Aon
   Corporation; Commonwealth Edison Company, Molex Incorporated, Oil-Dri
   Corporation of America and Safety-Kleen Corp.  William Blair & Company,
   L.L.C. provided investment banking services to the Corporation in 1995 and
   the Corporation anticipates that services may be provided to the
   Corporation in the current fiscal year.  He is a member of the Audit
   Committee, Management Continuity and Compensation Committee, Nominating
   Committee and the Stock Option Committee.  Mr. Jannotta has been a
   Director since 1973.

                         DIRECTORS CONTINUING IN OFFICE


        STEPHEN A. KELLER, age 78, retired.  He was President of Kodicor,
   Inc., a manufacturer of tanks, pottery and plumbing products, with
   headquarters in Minneapolis, Minnesota, until his retirement in January
   1978.  Mr. Keller was Chairman of the Board of Directors of J-TEC
   Associates, Inc. until his retirement on December 31, 1984.  Mr. Keller is
   a member of the Audit Committee, Management Continuity and Compensation
   Committee, Stock Option Committee and the Strategic Planning Committee. 
   Mr. Keller was a Director during the period 1966 to 1973 and has been a
   Director since 1978.  His term expires in 1997.  

        R. STEPHEN NEWMAN, age 52, since August 1990 has been President of
   Bacon's Information, Inc., a media information services company.  Bacon's
   Information, Inc. is a subsidiary of K-III, Inc.,  a communications
   corporation.  From 1982 to 1990, he was President of MGI Corporation, a
   computer services company.  Mr. Newman is a member of the Audit Committee,
   Management Continuity and Compensation Committee, Strategic Planning
   Committee and the Stock Option Committee.  Mr. Newman has been a Director
   since 1983 and his term expires in 1997.

        ROY J. CARVER, JR., age 52, is Chairman of the Board of Directors of
   Carver Pump Company, Muscatine, Iowa.  During 1988, Mr. Carver acquired a
   chain of hardware stores and is President of the Muscatine, Iowa based
   company, Carver Hardware.  Mr. Carver is President of Carver Aero, Inc.,
   which operates fixed base operations at airports in Muscatine, Iowa;
   Davenport, Iowa and Clinton, Iowa; President of Carver Hotel Enterprises,
   Inc., a Muscatine, Iowa based hotel and restaurant operation; and
   President of Harrington Signal, Inc., an electronic signal panel
   manufacturing company located in Moline, Illinois.  Mr. Carver holds
   directorships in Catalyst, Inc.,  Iowa First Bancshares Corp. and Met-Coil
   Systems Corporation.  He is a member of the Contributions Committee,
   Management Continuity and Compensation Committee, Nominating Committee,
   Stock Option Committee and the Strategic Planning Committee.  Mr. Carver
   has been a Director since 1982 and his term expires in 1998.

        ROBERT K. DRUMMOND, age 57, has been for more than five years a
   partner in the Milwaukee law firm of Foley & Lardner.  In 1995, the
   Corporation paid fees for legal services to Foley & Lardner, and the
   Corporation anticipates that similar services may be provided by Foley &
   Lardner in the current fiscal year.  Mr. Drummond's fees as a Director are
   paid to Foley & Lardner, which credits the sums to the Corporation's legal
   services account.  Mr. Drummond is a member of the Management Continuity
   and Compensation Committee, Stock Option Committee and Strategic Planning
   Committee.  Mr. Drummond has been a Director since 1982 and his term
   expires in 1998.

        JAMES R. EVERLINE, age 54, is President of Everline & Co., a mergers
   and acquisitions/management consulting company.  Previously, Mr. Everline
   was President, Investment Banking Division of Henry & Company (1990-
   December 1991).  Henry & Company is engaged in the venture capital and
   investment banking business.  Prior to Mr. Everline's employment by Henry
   & Company, he was a Partner of Founders Court Investors Inc. (1988-1989)
   and served as Vice President, Capital Markets Group, Bank of America
   (1981-1988). He is a member of the Audit Committee, Executive Committee,
   Management Continuity and Compensation Committee, Nominating Committee,
   Stock Option Committee and the Strategic Planning Committee.  Mr. Everline
   has been a Director since 1982 and his term expires in 1998.

        Directors are elected by a majority of the votes cast (assuming a
   quorum is present).  Consequently, any shares not voted at the Annual
   Meeting, whether due to abstentions, broker non-votes or otherwise, will
   have no impact on the election of directors.


                    THE BOARD OF DIRECTORS AND ITS COMMITTEES

        The Board of Directors met five times in 1995.

        The Audit Committee met three times in 1995; its functions are to
   review major accounting decisions with management and the independent
   auditors, to confer with such auditors with respect to the scope and
   results of the annual audit, to review the annual audit and evaluate the
   auditors' performance, to recommend to the Board of Directors annually the
   selection of outside auditors for the ensuing year, to recommend the scope
   and format of financial information to be submitted to the Board of
   Directors, to review the scope of financial information included in the
   Annual Report to Shareholders, to review the program of the internal audit
   department for the year, to review the financial data included in all
   required governmental reports, and to review the audits of all pension,
   profit sharing and other trust funds held for the benefit of employees of
   the Corporation. The Committee also reviews various insurance coverages of
   the Corporation and the Corporation's compliance with the Foreign Corrupt
   Practices Act.

        The Management Continuity and Compensation Committee met four times
   in 1995; its functions are to review, evaluate and determine executive
   level compensation and to recommend to the Board of Directors the election
   of corporate officers.

        The Nominating Committee met four times in 1995; its duties relate to
   the evaluation and recommendation to the Board of Directors of prospective
   candidates for election as directors of the Corporation. The Nominating
   Committee will consider recommended nominations for the position of
   director which are submitted in writing by the shareholders and addressed
   to the Committee in care of the Corporation at Muscatine, Iowa.

        The Stock Option Committee met twice in 1995; its function is to
   select key executives and to award options and restricted stock grants to
   those key executives whose judgment, initiative and efforts contribute
   materially to the successful performance of the Corporation.


                REMUNERATION OF EXECUTIVE OFFICERS AND DIRECTORS

   Summary Compensation Information

   The following table sets forth certain information concerning compensation
   paid for the last three fiscal years to the Corporation's Chief Executive
   Officer and each of its four other most highly compensated executive
   officers whose total cash compensation exceeded $100,000 in fiscal 1995. 
   The persons named in the table are sometimes referred to herein as the
   "named executive officers."

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                           Summary Compensation Table

   <TABLE>
   <CAPTION>
                                                                                 Long Term
                                                                                Compensation
                                                                Other Annual     Restricted      All Other
         Name and Principal                                     Compensation       Stock        Compensation
              Position             Year     Salary     Bonus        [1]         Award(s)[2]         [3]
 
    <S>                            <C>    <C>           <C>        <C>            <C>             <C> 
    Martin G. Carver               1995   $321,340      $0         $91,264        $111,417        $20,255
      Chairman of the Board,       1994    311,740       0          91,127         111,250         20,060
      Chief Executive Officer      1993    299,036       0          82,770         107,115         19,318
      and President

    Gary L. Carlson                1995   $281,941      $0        $161,206         $23,087       $220,009
      Senior V.P. and General      1994    273,808       0          28,224          23,363        170,778
       Manager of Eastern          1993    183,867       0           7,598          10,545         15,207
       Hemisphere Retreading                                                                             
       Division

    Donald F. Chester              1995   $251,372      $0         $11,874         $14,053        $20,255
      Senior V.P.,                 1994    233,517       0          12,161          14,463         19,359
       International               1993    244,140       0           9,931          12,210         18,382


    Thomas E. Dvorchak             1995   $309,127      $0         $24,813         $27,102        $26,203
      Senior V.P. and Chief        1994    304,913       0          25,391          27,813         20,060
      Financial Officer            1993    292,942       0          19,706          22,200         19,318

    Stuart C. Green                1995   $304,720      $0         $22,357         $26,098        $20,255
      Senior V.P.,                 1994    295,268       0          21,942          25,587         20,832
       Manufacturing               1993    283,690       0          18,120          22,200         21,101

   <FN>
   [1]  Amounts shown represent the tax reimbursement or "gross up" with
        respect to restricted stock awards and certain other fringe benefits
        and, in Mr. Carlson's case, includes tax "gross up" in connection
        with foreign service assignment.

   [2]  At December 31, 1995 the number of shares held and the aggregate
        market value of restricted stock held by the named executive officers
        are as follows:  Martin G. Carver, 10,670 shares Common Stock, value
        $577,514, and 6,810 shares Class A Common Stock, value $360,930; Gary
        L. Carlson, 1,320 shares Common Stock, value $71,445, and 940 shares
        Class A Common Stock, value $49,820;  Donald F. Chester, 1,460 shares
        Common Stock, value $79,023, and 1,020 shares Class A Common Stock,
        value $54,060; Thomas E. Dvorchak, 2,320 shares Common Stock, value
        $125,570, and 1,520 shares Class A Common Stock, value $80,560; and
        Stuart C. Green, 1,390 shares Common Stock, value $75,234, and 590
        shares Class A Common Stock, value $31,270.  Dividends are paid on
        the shares of restricted stock prior to vesting.

   [3]  Of the amounts shown in this column for 1995 for each of the named
        executive officers, $19,600 is the Corporation's contribution under
        its Salaried Profit Sharing, Retirement and Savings Plan for each of
        such individuals (of which, because of limitations under the Internal
        Revenue Code of 1986, as amended, $12,000 was paid into such Plan and
        the balance to be paid by the Corporation outside such Plan) and $655
        is the Corporation's contribution to its Bandag Security Program, a
        combination defined benefit and defined contribution plan.  The
        remainder of the amount shown for Mr. Carlson in 1995 is $199,754
        representing allowances for foreign service assignment.
   </TABLE>

   Stock Options

        The following table sets forth information regarding the fiscal year-
   end value of unexercised options held by the named executive officers.  No
   options were granted or exercised in 1995.

                       Aggregate Option Exercises in Last
                  Fiscal Year and Fiscal Year-End Option Values
                                                                  Value of
                                                   Number of    Unexercised
                                                  Unexercised   In-the-Money
                                                  Options at     Options at
                                                 Fiscal Year-   Fiscal Year-
                                                      End          End[2]

                          Shares
                         Acquired       Value
          Name         on Exercise    Realized    Exercisable   Exercisable
    Martin G. Carver       -0-           -0-      200,000[1]     $6,775,000

   [1]  Comprised of 100,000 shares of Common Stock and 100,000 shares of
        Class A Common Stock.  The options were granted in 1987 at an
        exercise price equal to the closing price of the Corporation's Common
        Stock on the New York Stock Exchange on the date of grant.

   [2]  The dollar values are calculated by determining the difference
        between the fair market value of the underlying Common Stock and
        Class A Common Stock, respectively, at fiscal year-end and the
        exercise price of the options.

        Pension Plan Benefits.  The following table sets forth annual normal
   retirement age pension benefits under the Bandag Salaried Pension Plan at
   the specified remuneration and years-of-service classifications.  The
   table assumes retirement in 1996.  To the extent benefits are not paid
   under the Salaried Pension Plan due to limitations under the Internal
   Revenue Code of 1986, as amended, they are paid by the Corporation.

   <TABLE>
   <CAPTION>
                                                        PENSION PLAN TABLE

                                               Annual Pension Per Years of Service

   Highest 5-Year Average
     Annual Compensation   5-Years   10-Years   15-Years    20-Years   25-Years    30-Years   35-Years

          <S>              <C>        <C>        <C>        <C>         <C>        <C>         <C>
          $ 50,000         $ 3,219    $ 6,438    $9,656     $12,300     $14,800    $16,300     $17,550
          $100,000         $ 7,281    $14,563    $21,844    $27,300     $32,300    $35,300     $37,800
          $200,000         $15,406    $30,813    $46,219    $57,300     $67,300    $73,300     $78,300
          $250,000         $18,607    $37,214    $55,822    $69,119     $81,089    $88,270     $94,255
          $300,000         $18,607    $37,214    $55,822    $69,119     $81,089    $88,270     $94,255
          $350,000         $18,607    $37,214    $55,822    $69,119     $81,089    $88,270     $94,255
          $400,000         $18,607    $37,214    $55,822    $69,119     $81,089    $88,270     $94,255
   </TABLE>


        Pension amounts are based upon an employee's base salary (exclusive
   of bonus) and credited years of service.  For the individuals named in the
   foregoing remuneration table, the base salary and credited service as of
   March 22, 1996, were as follows:   Martin G. Carver, $321,340 and 17
   years; Gary L. Carlson, $281,941 and 22 years;  Donald F. Chester,
   $251,372 and 12 years; Thomas E. Dvorchak, $309,127 and 25 years; and
   Stuart C. Green, $304,720 and 4 years.  Benefits shown in the table are
   computed as a straight line single life annuity assuming retirement at age
   65 and are not subject to offset for Social Security benefits.

        The named executive officers also participate in the Bandag Security
   Program which is a combined defined benefit and defined contribution plan
   (see footnote [3] on page 8).  The annual defined benefit payable at age
   62 for each of the named executive officers is fixed and is as follows: 
   Martin G. Carver, $700; Gary L. Carlson, $985, Donald F. Chester, $478;
   Thomas E. Dvorchak, $1,124; and Stuart C. Green, $74.

   Report of Management Continuity and Compensation Committee on Executive
   Compensation

        The seven member Management Continuity and Compensation Committee of
   the Board of Directors (the "Compensation Committee") makes all decisions
   regarding compensation of the Corporation's executive officers, except for
   the awarding of stock options and restricted stock, which are made by the
   Stock Option Committee.  Set forth below is a report submitted by the
   Compensation Committee addressing the Corporation's compensation policies
   for 1995 applicable to the Corporation's executive officers, including the
   executive officers named in the Summary Compensation Table.

        Consistent with the Corporation's commitment to adopt a world-class
   approach to improving total quality, in 1992 the Corporation adopted a new
   approach to the compensation of executive officers and other salaried
   employees.  As the Corporation learned more about total quality systems,
   their fairness to people and their necessity in achieving a corporation's
   long-term objectives, it became apparent that the then existing
   compensation system was not designed with these objectives in mind.  In
   that spirit, a  Midpoint Compensation System (the "System") was approved
   by the Compensation Committee in 1992.

        This System eliminated arbitrary incentives which the Compensation
   Committee believes are a major barrier to continuous improvement.  As a
   result of the adoption of the System, bonuses, country club memberships,
   automobile allowances, split dollar life insurance and tax preparation
   fees, which were perquisites of top executives and some other managers,
   were eliminated.  A portion of the dollar value of these perquisites was
   rolled into the executives' base salaries.  Salary survey information was
   used to ensure that the salaries were fair and competitive with those of
   other companies similar in size to the Corporation.  Under the System,
   bonuses and most traditional executive perquisites are no longer paid. 
   Rather, under the System, an executive officer, including the Chief
   Executive Officer,  receives an annual salary fixed by the Compensation
   Committee, restricted stock awards determined by the Stock Option
   Committee, tax "gross up" payments related to such awards and Corporation
   contributions to the Corporation's Salaried Profit Sharing, Retirement and
   Savings Plan and the Bandag Security Program as determined by the
   Compensation Committee.

        Under the System, a salary "midpoint" for each executive officer,
   including the Chief Executive Officer, is established through the use of
   executive compensation salary surveys, financial performance of the
   Corporation, national trends in compensation and the Corporation's
   competitive need to retain and to recruit the very best and most capable
   people.  Such salary surveys encompass general manufacturing companies
   with revenues from $500 million to $1 billion.  In reviewing the
   Corporation's financial performance, the Compensation Committee considered
   the Corporation's revenues, net income and net income per share in light
   of the competitive and economic conditions encountered by the Corporation
   during the fiscal year, as well as the effect on the Corporation's
   financial performance resulting from the Corporation's investment in
   marketing programs, research and development, plant, machinery and
   equipment and in personnel and related programs.

             The salary "midpoints" represent the salary level in the 75th
   percentile of the salary range for each executive officer position, based
   on executive compensation salary surveys, as adjusted by the Compensation
   Committee based on an evaluation of the importance of the particular
   executive position to the Corporation.  The salary "midpoints" are
   adjusted by the Compensation Committee each year based on a review of the
   factors outlined in the immediately preceding paragraph.  These salary
   "midpoints" are used to calculate the annual increase for each executive
   officer, except the Chief Executive Officer, by multiplying the salary
   "midpoint" (not the existing annual salary) by a percentage established by
   the Compensation Committee.  Multiplying the salary "midpoint" for a given
   position by the annual percentage determined by the Compensation Committee
   increases base salaries which are currently below the salary "midpoint" by
   a greater amount than if base salaries were multiplied by the annual
   percentage, while base salaries which are currently in excess of the
   salary "midpoint" for a given position will receive a smaller increase
   than would be the case if the base salaries were multiplied by such
   percentage.  For 1996, the percentage increase was fixed at 4.0% for all
   salaried Corporation employees, including all executive officers, except
   the Chief Executive Officer.  Such increase in base salary takes effect on
   January 1, 1996 and does not affect 1995 compensation.  In fixing the
   percentage increase for 1996 base salary, the Compensation Committee
   considered a variety of factors, including the inflation rate, the
   Corporation's financial performance and trends in salaried employee
   compensation increases, as disclosed by published salary forecasts.

        Mr. Martin G. Carver, Chief Executive Officer, again declined to
   receive a salary increase for 1996 based on a percentage of the salary
   "midpoint" for his position.  Instead, he again requested that his salary
   increase for 1996 be increased by a percentage of his 1995 base salary,
   which is substantially lower than his salary "midpoint."  The salary
   increase for Mr. Carver for 1996 was equal to 3.45% of his 1995 base
   salary (not his salary "midpoint").   

         Although the Compensation Committee considers the Corporation's
   financial performance in determining the total compensation for executive
   officers, including the Chief Executive Officer, there is no specific
   formula or target performance against which executive compensation is to
   be compared or judged.  Rather, the Corporation's performance is part of
   the total mix of information which the Compensation Committee considers in
   making its decisions on executive compensation.


                         Bandag, Incorporated Management
                      Continuity and Compensation Committee

                  Roy J. Carver, Jr.  Edgar D. Jannotta
                  Martin G. Carver    Stephen A. Keller 
                  Robert K. Drummond  R. Stephen Newman
                  James R. Everline

   Report of Stock Option Committee on Executive Compensation

     The Stock Option Committee of the Board of Directors (the "Stock Option
   Committee"), which is composed of six non-employee directors, makes all
   decisions regarding the granting of stock options and the grant of
   restricted stock awards.  No grants of stock options were made in 1995. 
   The purpose of the Corporation's Restricted Stock Grant Plan is to provide
   long-term incentive compensation which will attract and retain superior
   executive personnel.  Under the Plan, the Stock Option Committee awards
   stock to key executives each year.  The shares are held by a custodian
   until seven years have elapsed, when they are then transferred to the
   executive.  Dividends are paid to the recipient of the restricted stock
   while the shares are held by the custodian.  If an executive who has not
   attained age 60 leaves the Corporation before the end of the seven year
   restriction period, the shares are forfeited, except in the case of death
   or disability.  An executive who has attained age 60 and who leaves the
   Corporation prior to the end of the seven-year retention period does not
   forfeit  the shares.

     During 1995 awards of restricted stock were made utilizing the
   Corporation's System.  Restricted stock awards were granted based on a
   percentage of the salary "midpoint" established for each executive
   position.  The percentages were established taking into consideration
   total compensation, as well as each executive's level of responsibility. 
   The Chief Executive Officer's percentage of "midpoint" is greater than the
   other executive officers.  In fixing a greater percentage of the Chief
   Executive Officer's "midpoint," the Stock Option Committee took into
   account that the Chief Executive Officer's base salary is substantially
   below the salary "midpoint" for his position and that his increase in base
   salary for 1996 is substantially less than he would have received had his
   increase been based on his salary "midpoint."  The  number of restricted
   shares granted was computed by multiplying the salary "midpoint" for an
   executive officer, including the Chief Executive Officer, by the
   percentage fixed by the Stock Option Committee and then dividing such 
   amount by the per share market value of the Corporation's Common Stock on
   the date of grant.  In fixing the awards for all executives, including the
   Chief Executive Officer, the Stock Option Committee considered the
   Corporation's performance in the same manner as the Compensation Committee
   did in fixing other components of executive compensation.  See "Report of
   Management Continuity and Compensation Committee on Executive
   Compensation."  The total amount of previous awards made to individuals
   was not a factor in fixing the 1995 awards.    

                              Bandag, Incorporated
                             Stock Option Committee

                  Roy J. Carver, Jr.  Edgar D. Jannotta
                  Robert K. Drummond  Stephen A. Keller
                  James R. Everline   R. Stephen Newman


   Compensation Committee Interlocks and Insider Participation

     The Management Continuity and Compensation Committee (the "Compensation
   Committee") consists of Messrs. Roy J. Carver, Jr., Martin G. Carver,
   Robert K. Drummond, James R. Everline,  Edgar D. Jannotta, Stephen A.
   Keller and R. Stephen Newman.  The Stock Option Committee consists of
   Messrs. Roy J. Carver, Jr., Robert K. Drummond, James R. Everline, Edgar
   D. Jannotta, Stephen A. Keller and R. Stephen Newman.  Mr. Martin G.
   Carver is Chairman of the Board, Chief Executive Officer and President of
   the Corporation.  Mr. Roy J. Carver owns Carver Aero, Inc., which sold
   $131,660.13 of aviation fuel to the Corporation in 1995 (see "Transactions
   with Management/Principal Shareholders" herein).  Mr. Drummond is a
   partner of the law firm of Foley & Lardner, Milwaukee, Wisconsin, which
   has served as legal counsel to the Corporation for several years.  Mr.
   Jannotta is Senior Principal of William Blair & Company, L.L.C., which
   provided investment banking services to the Corporation in 1995.  Mr.
   Keller formerly served as President of the Corporation from April 1966
   through June 1973.

     Remuneration of Directors. Directors who are also full-time employees
   of the Corporation do not receive remuneration for acting as directors.
   Non-employee directors are compensated in accordance with the following
   schedule:

   Annual Fees - Chairman of Committee - $35,500. Other Directors - $33,500.

   Board Meeting Attendance - $1,250 per meeting.

   Committee Meeting Attendance - Chairman - $1,500 per meeting.
     Other Directors - $1,250 per meeting.

     Transactions with Management/Principal Shareholders.  Roy J. Carver,
   Jr., son of Lucille A. Carver and brother of Martin G. Carver, owns 100%
   of Carver Aero, Inc., which operates fixed base operations at airports in
   Muscatine, Iowa; Davenport, Iowa, and Clinton, Iowa.  During 1995, it sold
   $131,660.13 of aviation fuel to Bandag, Incorporated at competitive prices
   based on volume purchased.

                   SHAREHOLDER RETURN PERFORMANCE INFORMATION

     Set forth below is a line graph comparing the yearly percentage change
   during the last five years in the cumulative total shareholder return
   (assuming reinvestment of dividends) on the Corporation's Common Stock
   with the cumulative total return of the Standard & Poor's 500 Stock
   (Index) and the Dow Jones & Co., Inc. Automobile Parts & Equipment-All
   (Index).  Performance information set forth below for the Corporation's
   Common Stock includes the Corporation's Class A Common Stock issued as a
   stock dividend on June 10, 1992.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                              Bandag, Incorporated
                             Stock Performance Chart

                 COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN

              Among Bandag, Incorporated, S&P 500 Stock (Index) and
                    Automobile Parts & Equipment - All (Index)


                             [PERFORMANCE GRAPH]


                                            December 31

                            1990   1991    1992   1993    1994   1995

   Bandag, Incorporated    $100    $144   $139    $132   $142    $135
   S&P 500 Stock (Index)   $100    $130   $140    $155   $157    $216
   Automobile Parts &
    Equipment-All (Index)  $100    $148   $192    $238   $203    $252

   Assume $100 Invested on December 31, 1990 in
   Bandag, Incorporated Common Stock, the S&P 500
   Stock (Index) and the Automobile Parts &
   Equipment-All (Index)


        Proposal No. 2-RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS

     The Board of Directors, based upon the recommendation of the Audit
   Committee, which consists of James R. Everline, Edgar D. Jannotta, Stephen
   A. Keller, and R. Stephen Newman, directors of the Corporation, has
   appointed Ernst & Young LLP as the Corporation's independent auditors for
   the year ending December 31, 1996.  

     Ernst & Young LLP served as the Corporation's independent auditors for
   the year ended December 31, 1995. Representatives of Ernst & Young LLP
   will be present at the Annual Meeting and will be available to respond to
   any questions raised at the meeting and make any comments they deem
   appropriate.

     Although this appointment is not required by law to be submitted to a
   vote by shareholders, the Board believes it appropriate, as a matter of
   policy, to request that the shareholders ratify the appointment of Ernst &
   Young LLP as independent auditors for 1996. If the shareholders should not
   ratify, the Board will reconsider the appointment.

                          Proposal No. 3-OTHER MATTERS

     The management of the Corporation knows of no matters to be presented
   at the meeting other than those set forth in the Notice of Annual Meeting.
   However, if any other matters properly come before the meeting, it is
   intended that the persons named in the enclosed Proxy will vote on such
   matters in accordance with their best judgments.

                          1997 SHAREHOLDERS' PROPOSALS

     The date by which proposals of shareholders intended to be presented at
   the 1997 Annual Meeting of the Corporation must be received by the
   Corporation for inclusion in its proxy statement and form of proxy
   relating to that meeting is November 29, 1996.

                                  MISCELLANEOUS

     The expense of preparing, printing and mailing this proxy statement and
   the proxies solicited hereby will be borne by the Corporation.

     Some of the officers and regular employees of the Corporation may,
   without extra remuneration, solicit proxies personally or by telephone,
   telex or telefax. The Corporation will request brokerage houses, nominees,
   custodians and fiduciaries to forward proxy materials to the beneficial
   owners of shares held of record and will reimburse such persons for their
   expenses.

                       By Order of the Board of Directors



                       WARREN W. HEIDBREDER, Secretary

   <PAGE>
                              BANDAG, INCORPORATED
                                 Muscatine, Iowa
                     PROXY FOR ANNUAL MEETING - MAY 7, 1996


     Lucille A. Carver and Martin G. Carver, or either of them each with
   power of substitution, are authorized to vote all shares of Common Stock
   (COM) and Class B Common Stock (CLB) which the undersigned is entitled to
   vote at the Annual Meeting of Shareholders of Bandag, Incorporated to be
   held May 7, 1996 and at any adjournment thereof.

     This proxy is solicited on behalf of the Company's Board of Directors. 
   Every properly signed proxy will be voted as directed.  The Board of
   Directors recommends a vote FOR the nominees in Item (1) and FOR Item (2). 
   Unless otherwise directed, proxies will be voted in accordance with the
   foregoing sentence and in the discretion of the Board of Directors in
   connection with Item (3).

     You are encouraged to specify your choices by marking the appropriate
   boxes.  SEE REVERSE SIDE, but you need not mark any boxes if you wish to
   vote in accordance with the Board of Directors' recommendations.  The
   proxy holders cannot vote your shares unless you sign and return this
   card.

                                                           SEE REVERSE
         CONTINUED, AND TO BE SIGNED ON REVERSE SIDE           SIDE



    [X]  Please mark votes as in this example

   The signer hereby revokes all proxies heretofore given by the signer to
   vote at said meeting or any adjournment thereof.

                                                      FOR   AGAINST   ABSTAIN
   1.   Election of Directors

        Lucille A. Carver                            [__]     [__]      [__] 

        Martin G. Carver                             [__]     [__]      [__] 

        Edgar D. Jannotta                            [__]     [__]      [__] 


                                                      FOR   AGAINST   ABSTAIN

   2.   The selection of Ernst & Young LLP           [__]     [__]      [__] 
        as independent auditors for the
        fiscal year ending December 31, 1996.

   3.   In their discretion upon such
        other matters as may properly
        come before the meeting

      MARK HERE FOR               MARK HERE
     COMMENTS/CHANGE             IF YOU PLAN
      OF ADDRESS AND   [__]       TO ATTEND     [__]
       NOTE AT LEFT              THE MEETING

     Please sign exactly as name appears hereon.  Joint owners should each
     sign.  When signing as attorney, executor, administrator, trustee or
     guardian, please give full title as such.


     Signature    ___________________ Date __________

     Signature    ___________________ Date __________


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