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                                                                   EXHIBIT 10.12

                              WSI INDUSTRIES, INC.

                          DIRECTORS RETIREMENT PROGRAM

                        ADOPTED BY THE BOARD OF DIRECTORS
                                  JUNE 25, 1982


RESOLVED, that there is hereby established a Retirement Benefit Program for
directors of this Corporation who have no vested interest in any other
retirement plan or program of this Corporation at the time of ceasing to serve
as a director subsequent to the adoption of this resolution, upon the following
terms and conditions:

1.   The annual amount of the benefit shall be equal to the amount of the
     retainer fees (as distinct from fees paid for attendance at meetings) paid
     to directors during the full fiscal year preceding the date the director
     ceases to hold that office if the director has served in that capacity
     fifteen years or more; the amount of the benefit shall be reduced by 5% for
     each year less than fifteen, but no benefit shall be paid unless the
     director has served in that capacity at least fie years. For purposes of
     calculating the retirement payment, a partial year of service as a director
     shall be considered a full year of service.

2.   Payment of the benefit shall commence at the time the director ceases to
     serve as a director if age 65 or older, or at age 65 if the director ceases
     to serve as a director prior thereto, or at the time the director ceases to
     serve as a director in the event the director has become so disabled as to
     make continued service as a director impractical.

3.   Benefits hereunder shall be payable during the lifetime of the former
     director, but not exceeding ten years. No payments shall be made in the
     event of the death of a director or former director prior to entitlement to
     payments hereunder.

4.   Payment may be made pursuant hereto monthly, quarterly or annually as
     determined from time to time in the sole discretion of the Corporation.

5.   Former directors who are being paid benefits hereunder shall agree to be
     available to the Corporation as reasonably requested for consultation and
     advice, including attendance at meeting of the Board of Directors or
     Committees thereof if requested, and shall be reimbursed in addition for
     out-of-pocket expenses in connection therewith. Such former directors shall
     also agree not to engage in any substantial activity competitive with the
     business of the Corporation, except that this restriction may be removed at
     the request of the director upon furnishing a written waiver of any further
     payments and benefits hereunder.



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6.   The Directors Retirement Program hereby established will not be terminated
     or modified adversely to the interest of a director or former director who
     is serving or has served as a director while this program is in effect, and
     the obligations of the Corporation hereunder shall be binding upon any
     successor entity or assignee of all or substantially all of the business
     and assets of the Corporation.

RESOLVED FURTHER, that any officers or employees of this Corporation are
authorized and directed to execute and deliver any instruments and documents,
and to take any action deemed necessary or appropriate in connection with these
resolutions.