EXHIBIT 10.1

                                   Appendix A

                        NATIONAL PRESTO INDUSTRIES, INC.

                             1988 STOCK OPTION PLAN

                                     PART I

                  PURPOSES; DEFINITIONS; SHAREHOLDER APPROVAL:
                RESERVATION OF SHARES; AND PARTICIPATION IN PLAN

                                    ARTICLE I

                                    Purposes

         1.1 Purposes of Plan. The purpose of this National Presto Industries
Inc. 1988 Stock Option Plan (the Plan") is to provide incentives to selected key
employees of the Company and/or its Subsidiaries who contribute and are expected
to contribute materially to the success of the Company and its Subsidiaries to
provide a means of rewarding outstanding performance, and to enhance the
interest of such key employees in the Company's continued success and progress
by providing them a proprietary interest in the Company. Further, this Plan is
designed to enhance the Company's ability to maintain a competitive position in
attracting and retaining qualified key personnel necessary for the continued
success and progress of the Company.

                                   ARTICLE II

                                   Definitions

         2.1 Certain terms used herein shall have the meaning below stated
subject to the provisions of Section 7.1.

         "Board or "Board of Directors means the Board of Directors of the
Company.

         "Code" means the Internal Revenue Code of 1986 as amended.

         "Committee" means the committee appointed by the Board to administer
this plan pursuant to Article VII or, if no Committee is appointed by the Board,
means the Board.

         "Common Stock" means, subject to the provisions of Section 9.3, the
presently authorized common stock of the Company, par value $1.00 per share.


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         "Company" means National Presto Industries Inc., a Wisconsin
corporation.


         "Disability" means (Subject to Section 6.2) a physical or mental
impairment of sufficient severity such that an Employee is permanently unable to
continue his employment with the Company as determined by the Committee.

         "Employee" means an employee (including an officer) of the Company or
of a Subsidiary of the Company.

         "Fair Market Value" means the closing price at which the Common Stock
of the Company shall have been sold regular way on the New York Stock Exchange
on the date as of which such value is being determined or, if no sales occurred
on such day, then on the next preceding day on which there were such sales or,
if at any time the Common Stock shall not be listed on the New York Stock
Exchange, the fair market value as determined by the Committee on the basis of
available prices for such Common Stock or in such manner as may be authorized by
applicable regulations under the Code.

         "Incentive Stock Option" means an option to purchase Common Stock,
granted by the Company to a Key Employee pursuant to Section 5.1, which is
intended to meet the requirements of Section 422A of the Code and which is
designated at the time of the award an Incentive Stock Option.

         "Key Employee" means an Employee selected to participate in this Plan
pursuant to the terms hereof.

         "Non-Statutory Option" means an option to purchase Common Stock,
granted by the Company to a Key Employee pursuant to Section 5 1, which is not
an Incentive Stock Option.

         "Option" means an Incentive Stock Option or a Non-Statutory Option

         "Plan" means the Company's 1988 Stock Option Plan, as set forth herein
and as from time to amended.

         "Subsidiary" means a subsidiary or parent corporation, as defined in
Section 425(e) and (f) of the Code, with respect to the Company.


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                                   ARTICLE III

                   Shareholder Approval; Reservation of Shares

         3.1 Shareholder Approval. This Plan shall be subject to approval by the
affirmative vote of the holders of a majority of the Company's Common Stock
present or represented and entitled to vote thereon at a meeting of
shareholders, which approval must be obtained no later than November 22, 1989.

         3.2 Shares Reserved Under Plan. Subject to adjustment under the
provisions of Section 9. 3 hereof, the maximum number of shares of Common Stock
which may be issued and sold under this Plan is 100,000 shares. Such shares may
either authorized and unissued shares or shares issued and thereafter acquired
by the Company Shares issued pursuant to this Plan shall be subject to all
applicable provisions of the Articles of Incorporation and Bylaws of the Company
in existence at the time of issuance of such shares and at all times thereafter.
If Options granted under this Plan shall terminate or cease to be exercisable by
reason of expiration, surrender for cancellation or otherwise without having
been wholly exercised, new Options may be granted under this Plan covering the
number of shares to which such termination or cessation relates. At no time may
the sum of the maximum number of shares issuable under outstanding Options
granted under this Plan and the number of shares previously issued under Options
granted under this Plan exceed the maximum number of shares that may be issued
and sold under this Plan, as above stated.

                                   ARTICLE IV

                              Participation in Plan

         4.1 Eligibility to Receive Options. Options under this Plan may be
granted only to officers and other Key Employees of the Company or a Subsidiary
on the date the Option is granted. A member of the Board of Directors who is not
also an Employee of the Company or of a Subsidiary shall not be eligible to
receive an Option.

         4.2 Participation Not Guarantee of Employment. Nothing in this Plan or
in the instrument evidencing the grant of an Option shall in any manner be
construed to limit in any way the right of the Company or a Subsidiary to
terminate a Key Employee's employment at any time without regard to the effect
of such termination on any rights such Key Employee would otherwise have under
this Plan, or give any right to such a Key Employee to remain employed by the
Company or a Subsidiary thereof in any particular position or at any particular
rate of compensation.


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                                     PART II
                  OPTIONS; TERMINATION OF EMPLOYMENT AND DEATH
                                    ARTICLE V

                                     Options

         5.1 Grants of Options.

         (a) Grant. Committee may grant Incentive Stock options and/or
Non-Statutory Options to Key Employees. All options under this Plan shall be
granted within ten years of November 23, 1988, the date on which this Plan was
adopted by the Board of Directors subject to approval of the Plan by
shareholders.

         (b) Option Price. The purchase price per share of Common Stock under
each Incentive Stock Option and Non-Statutory Option shall be determined by the
Committee but shall be not less than 100% of the Fair Market Value per share of
such Common Stock on the date the Option is granted The purchase price per share
may be subject to adjustment in accordance with the provisions of Section 9.3
hereof.

         (c) Option Agreements. Options shall be evidenced by option agreements
in such form and containing such terms and conditions as the Committee shall
approve, which terms and conditions need not be the same for all Option.

         (d) Options Nontransferable. An Option granted under this Plan shall by
its terms be nontransferable by the Key Employee otherwise than by will or the
laws of descent and distribution, and, during the lifetime of the Key Employee,
shall be exercisable only by such Employee. No transfer of an Option by a Key
Employee by will or by the laws of descent and distribution shall be effective
to bind the Company unless the Company shall have been furnished with written
notice thereof and a copy of the will and/or such other evidence as the
Committee may determine necessary to establish the validity of the transfer.

         (e) Substitution and Cancellation. The Committee, in its sole
discretion, may grant to an Employee who has been granted an Option under this
Plan, in exchange for the surrender and cancellation of such Option, a new
Option having a purchase price lower (or higher) than the purchase price
provided in the Option so surrendered and canceled and containing such other
terms as the Committee may de m appropriate, subject to Section 5. l (b) and
such other limitations or restrictions with respect to an Incentive Stock Option
as may be imposed by the Code.


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         5.2 Exercise of Options.

         (a) Term of Options; Vesting; and Exercise. The term of each Option
granted under this Plan shall not exceed ten (10) years from the date of grant.
An Option granted under this Plan shall become 100% vested at the earliest of
the following times if the Optionee is an Employee at such time: (i) the
Employee's normal retirement date pursuant to the retirement plan of the Company
or its Subsidiary applicable to the Optionee, (ii) the Employee's death or
Disability, or (iii) nine years from the date of grant. Each Option shall vest
and become exercisable in installments to the extent of 10% of the number of
shares originally covered thereby on the date of grant and each of the first
nine anniversaries of the date of the grant of the Option, if the Optionee is an
Employee on such anniversary. In its sole discretion, the Committee may
accelerate the exercisability and vesting of any Option at any time. Unless
otherwise determined by the Committee at the time of grant or thereafter, the
portion of each Option which becomes vested must be exercised within one (1)
year after the date on which such portion vests or such portion shall be
forfeited and the Option as to such shares so forfeited shall terminate

         (b) Payment on Exercise. No shares of Common Stock shall be issued on
the exercise of an Option unless paid for in full at the time of purchase as
provided in the next sentence. Payment for shares of Common Stock purchased upon
the exercise of an Option shall be made in cash or, with the consent of the
Committee, in whole or in part in shares of Common Stock valued at the then Fair
Market Value thereof Stock certificates for the shares of Common Stock so paid
for will be issued and delivered to the person entitled thereto only at the
Company's office in Eau Claire, Wisconsin. No Key Employee shall have any rights
as a shareholder with respect to any share of Common Stock covered by an Option
unless and until such Employee shall have become the holder of record of such
share and, except at otherwise permitted in Section 9 3 hereof, no adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property or distributions or other rights) in respect of
such share for which the record date is prior to the date on which such Employee
shall have become the holder of record thereof

         (c) Dissolution, Liquidation, Etc. If at any time after an Option has
become exercisable and prior to its exercise and expiration, a voluntary
dissolution, liquidation (other than a liquidation into another corporation
which agrees to continue this Plan) or winding up of the affairs of the Company
shall be proposed, the Company shall cause notice in writing to be mailed to
each person holding an Option under this Plan, which notice shall be mailed not
less than twenty days prior to the closing of the transfer books of the Company
or the record date for determination of the holders of Common Stock of the
Company entitled to participate in such dissolution, liquidation or winding up,
as the case may be, to the end that during such notice period the holder of any
Option, to the extent that the same is then exercisable by such holder, may,
subject to the terms of Article V hereof, purchase Common Stock in accordance
with the terms of the Option and be entitled, in respect of the number of shares
so purchased, to all the rights of the 


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other holders of Common Stock of the Company with respect to such proposed
dissolution, liquidation or winding up of the affairs of the Company. Each
Option at the time outstanding and all rights thereunder shall terminate at the
close of business on the twentieth day after mailing of such notice to the
holder of such Option or on the record date for determination of holders of
Common Stock entitled to participate in such dissolution, liquidation or winding
up, whichever date is later.

         5.3 Incentive Stock Options.

         (a) Annual Limitation. In no event shall any employee be granted an
Incentive Stock Option under this Plan or any other plan of the Company or any
Subsidiary if such option would, during the calendar year in which the option
first becomes exercisable when combined with other Incentive Stock options which
first become exercisable in such calendar year, entitle such optionee to
purchase shares of Common Stock or shares of any subsidiary having an aggregate
fair market value (determined as of the time such option or options were
granted) in excess of $100,000. The provisions of this Section 5.3(a) shall not
apply to any Incentive Stock Option granted under any other plan of the Company
prior to January 1, 1987 In the event an option granted hereunder is designated
an Incentive Stock Option and exceeds the limitations set forth in this Section
5.3 (a) whether at the time of grant or thereafter, such option shall be an
Incentive Stock option only to the extent permitted hereby and the balance
thereof shall be a non-statutory option for the purposes of this Plan.

         (b) Incentive Stock Option Granted to Ten Percent Shareholders. No
Incentive Stock Option shall be granted to any Key Employee who owns, directly
or indirectly pursuant to Section 425(d) of the Code, stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or any Subsidiary, unless at the time such Incentive Stock Option is
granted, the price of the Incentive Stock Option is at least 110% of the Fair
Market Value of the Common Stock subject to the Incentive Stock Option and such
Incentive Stock Option, by its terms, is not exercisable after the expiration of
five (5) years from the date such Incentive Stock Option is granted.

         (c) Notice. Each Key Employee shall give prompt notice to the Company
of any disposition of shares acquired upon exercise of an Incentive Stock option
if such disposition occurs within either two years after the date of grant or
one year after the date of transfer of such shares to the Key Employee upon the
of such Incentive Stock Option.

         (d) Consent. To the extent appropriate to avoid a "modification" or
other event described in Section 425(h) of the Code, a Key Employees right under
an Incentive Stock Option (including the rights to pay the exercise price in
Common Stock) shall be set forth in the option Agreement at the date of grant.


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                                   ARTICLE VI

                            Termination of Employment

         6.1 Termination of Employment. Unless earlier terminated in accordance
with its terms, an Option shall terminate 30 days after any termination of the
Key Employee's employment with the Company or a Subsidiary, or 60 days after the
death, disability or retirement at or after normal retirement age under the
Company's pension plan of the Key Employee.

         6.2 Employment. For all purposes of this Plan, and any Option granted
hereunder, "employment" shall be defined in accordance with the provisions of
Section 1. 421-7(h) of the Income Tax Regulations (or any successor regulations)



                                    PART III

                   ADMINISTRATION , AMENDMENT AND TERMINATION
                             OF PLAN; MISCELLANEOUS

                                   ARTICLE VII

                             Administration of Plan

         7.1 The Committee. This Plan shall be administered by a Committee
(which shall be the Board unless the Board appoints a committee pursuant hereto)
of three or more persons, all of whom shall be members of the Board and shall be
appointed by, and serve at the pleasure of, the Board. No person shall serve as
a member of the Committee if such person is eligible, or had been eligible at
any time within one year prior to appointment as a member, for selection as a
person to whom stock may be allocated or to whom Options may be granted under
this Plan or any other plan of the Company or any of its affiliates entitling
the participants therein to acquire stock or stock options of the issuer or any
of its affiliates. A majority of the Committee shall constitute a quorum thereof
and the actions of a majority of the Committee at the meeting at which quorum is
present, or actions unanimously approved in writing by all members of the
Committee shall be the actions of the Committee. Vacancies occurring on the
Committee shall be filled by the Board. The Committee shall have full and final
authority to interpret this Plan and the agreements evidencing Options granted
hereunder (which agreements need not be identical), to prescribe, amend and
rescind rules and regulations, if any, relating to this Plan and to make all
determinations necessary or advisable for the administration of this Plan. The
Committee's determination in all matters referred to herein shall be conclusive
and binding for all purposes and upon all persons including, but without
limitation, the Company, the shareholders of the Company, the Committee and each
of the members thereof, and Employees of the Company, and their respective
successors in interest.


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         7.2 Liability of Committee. No member of the Committee shall be
liable for anything done or omitted to be done by such member or by any other
member of the Committee in connection with this Plan, except for the willful
misconduct or gross negligence of such member. The Committee shall have power to
engage outside consultants, auditors or other professional help to assist in the
fulfillment of the Committee's duties under this Plan at the Company's expense.

         7.3 Determinations of the Committee. In making its determinations
concerning the Key Employees who shall receive Options, as well as the number of
shares to be covered thereby and time or times at which they shall be granted,
the Committee shall take into account the nature of the services rendered by the
respective Key Employees, their past, present, and potential contribution to the
Company's success and such other factors as the Committee may deem relevant The
Committee shall also determine the form of option agreements to be issued under
this Plan and the terms and conditions to be included therein, provided such
terms and conditions are not inconsistent with the terms of this Plan. The
Committee may, in its discretion or in accordance with a direction from the
Board, waive any provisions of any option agreement, provided such waiver is not
inconsistent with the terms of this Plan as then in effect.


                                  ARTICLE VIII

                        Amendment and Termination of Plan

                              8.1 Amendment of Plan

         (a) Generally. The Plan may be amended at any time and from time to
time by the Board of Directors of the Company but no amendment which (1)
increases the aggregate number of shares of Common Stock which may be issued and
sold under this Plan, (ii) decreases the minimum option price provided in this
Plan, (iii) extends the period during which Options may be granted under this
Plan, or (iv) changes the class of Key Employees eligible to receive Options,
shall be effective unless and until the same is approved by the affirmative
vote, in person or by proxy, of the holders of a majority of the holders of
Common Stock of the Company present and entitled to vote at a meeting held to
take such action at which a quorum is present. No termination or amendment of
this Plan, without the consent of the holder of any Option than existing, may
terminate such holder's Option or materially and adversely affect such holder's
rights thereunder.


<PAGE>


         (b) Amendments Relating to Incentive Stock Options. To the extent
applicable, this Plan is intended to permit the issuance of Incentive Stock
Options in accordance with the provisions of Section 422A of the Code. The Plan
may be modified or amended at any time, both prospectively and retroactively,
and in such manner as to affect Incentive Stock Options previously granted
(after taking into account Section 425(h) of the Code, relating to
"modifications," etc.), if such amendment or modification is necessary for this
Plan and the Incentive Stock Options granted hereunder to qualify under said
provisions of the Code.

         8.2 Termination. The Board of Directors of the Company may at any time
terminate this Plan as of any date specified in a resolution adopted by the
Board. If not earlier terminated, this Plan shall terminate on the tenth
anniversary of the effective date of the Plan. No Options may be granted after
this Plan has terminated. After this Plan shall terminate, the function of the
Committee will be limited to supervising the administration of Options
previously granted.


                                   ARTICLE IX

                            Miscellaneous Provisions

         9.1 Restrictions Upon Grant of Options. The listing upon the New York
Stock Exchange or the registration or qualification under any Federal or State
law of any shares of Common Stock to be granted pursuant to this Plan (whether
to permit the grant of Options or the resale or other disposition of any such
shares of Common Stock by or on behalf of the Employees receiving such shares)
may be necessary or desirable and, in any such event, delivery of the
certificates for such shares of Common Stock shall, if the Board of Directors,
in its sole discretion, shall determine, not be made until such listing,
registration or qualification shall have been completed. In such connection, the
Company agrees that it will use its best efforts to effect any listing on the
new York Stock Exchange of the shares of Common Stock subject to Options granted
under this Plan; provided, however, that the Company shall not be required to
use its best efforts to effect any registration or qualification of such shares
or the Options under the Securities Act of 1933 ("1933 Act") or any state
securities laws.

         9.2 Restrictions Upon Resale of Unregistered Stock. If the shares of
Common Stock that have been transferred to a Key Employee pursuant to the terms
of this Plan are not registered under the 1933 Act, pursuant to an effective
registration statement, such Key Employee, if the Committee shall deem it
advisable, may be required to represent and agree in writing (I) that any shares
of Common Stock acquired by such Key Employee pursuant to this Plan will not be
sold except pursuant to an effective registration statement under the 1933 Act
and (ii) that such Key Employee is acquiring such shares of Common Stock for
such Employee's own account and not with a view to the distribution thereof.


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         9.3 Adjustments. In the event of any change (through recapitalization,
merger, consolidation, stock dividend, split-up, combination or exchanges of
shares or otherwise) in the character or amount of the Company's capital stock
(or any other transaction described in Section 425(a) of the Code) after any
Option is granted hereunder and prior to the exercise thereof, the Option, to
the extent that it has not been exercised, shall entitle the holder to such
number and kind of securities as such holder would have been entitled to had
such holder actually owned the stock subject to the Option at the time of the
occurrence of such change. If any such event should occur, the number of shares
subject to Options which are authorized to be issued hereunder, but which have
not been issued, shall be similarly adjusted. If any other event shall occur,
prior to the exercise of an Option granted to a Key Employee hereunder, which
shall increase or decrease the amount of capital stock outstanding and which the
Committee, in its sole discretion, shall determine equitably requires an
adjustment in the number of shares which the holder should be permitted to
acquire, such adjustment as the Committee shall determine may be made, and when
so made shall be effective and binding for all purposes of this Plan.

         9.4 Withholding of Taxes. Each Key Employee who exercises an Option to
purchase Common Stock shall agree to pay to the Company, or make arrangements
(including withholding of shares of Common Stock purchased upon exercise of the
Option at the Fair Market Value thereof) satisfactory to the Committee regarding
payment of, any taxes of any kind required by law to be withheld with respect to
the transfer of such Employee of such shares of Common Stock.

         9.5 Use of Proceeds. The proceeds from the sale of Common Stock
pursuant to Options granted under this Plan shall constitute general funds of
the Company and may be used for such corporate purposes as the Company may
determine.

         9.6 Other Grants. Options may be granted under this Plan from time to
time in substitution for stock options held by employees of other corporations
who are or are about to become employees of the Company or a Subsidiary as the
result of a merger or consolidation of the employing corporation with the
Company or a Subsidiary, or the acquisition by the Company or a Subsidiary of
the assets of the employing corporation, or the acquisition by the Company or a
Subsidiary of stock of the employing corporation as the result of which it
becomes a Subsidiary of the Company. The terms and conditions of the substituted
Options so granted may vary from the terms and conditions set forth in Part II
to such extent as the Committee may deem appropriate to conform, in whole or in
part, to the provisions of the substituted stock incentives.

         9.7 Other Benefits. Nothing contained herein shall prevent the Company
from establishing other incentive plans in which Key Employees in the Plan may
also participate. No award under this Plan shall be considered as compensation
in calculating any insurance, pension or other benefit for which the recipient
is eligible unless any such insurance, pension or other benefit is granted under
a plan which expressly provides that compensation under this Plan (and
specifying the type of such compensation) shall be considered as compensation
under such plan.