EXHIBIT
10.1


 





 


WSI
Industries, Inc.


213
Chelsea Road


Monticello,
MN 55362


 


May
19, 2017


 


Via
Email Only to: Mr. Michael J. Pudil


 


Dear
Mike,


 


On
behalf of the Board of Directors, we are pleased to offer you the position of President and Chief Executive Officer. Below are
the terms of this full time offer of employment. We would like you to begin serving in this role on May 19, 2017.


 


Your
base salary will be $150,000, paid in accordance with the Company’s current payroll practices, subject to regular withholdings,
for the one-year period beginning May 19, 2017. You will not participate in any cash incentive compensation plan for fiscal 2017.
Unless otherwise determined by the Compensation Committee in its discretion, your compensation as a director and as Chairman of
the Board will not change following your appointment as President and Chief Executive Officer. 


 


As
an executive officer of WSI Industries, WSI Industries is willing to enter into an agreement with you relating to severance and
change in control benefits (the “Letter Agreement”), a copy of which is attached to this offer letter. Neither this
offer letter nor the Letter Agreement is an agreement for a term of employment. Your employment is “at will” and may
be terminated by you or WSI Industries at any time with or without cause, subject to the benefits of the Letter Agreement. There
are no express or implied agreements to the contrary.


 


The
benefits package will be per the standard employee plan.


 


You
will be granted on your first day of employment two awards under the Company’s 2005 Stock Plan, as amended (the “Plan”).
These awards are summarized as follows: 


 


Stock
Option Award: A ten year non-qualified stock option (with tandem stock appreciation rights) for 50,000 shares of common stock
of WSI Industries. The stock option will vest and become exercisable in two equal installments of 25,000 shares on the grant date
and on the 6 month anniversary of the grant date subject to the condition that you have been providing continuous service to WSI
Industries as a director, employee or consultant on such vesting date and subject to accelerated vesting as provided in the Letter
Agreement. The exercise price of the option will be the fair market value of the Company’s common stock on the date of grant
determined in accordance with the Plan. The stock option will be governed by the Plan and a stock option agreement under the Plan
that will be provided to you following the grant date.


 




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Restricted
Stock Award: An award of 50,000 shares of restricted stock. The restrictions on the restricted stock will lapse in two equal
installments of 25,000 shares on the grant date and on the 6 month anniversary of the grant date subject to the condition that
you have been providing continuous service to WSI Industries as a director, employee or consultant on such date of lapse and subject
to accelerated lapse of restrictions as provided in the Letter Agreement. The restricted stock award will be governed by the Plan
and a restricted stock award agreement under the Plan that will be provided to you following the grant date.


 


An
attached Restrictive Covenant Agreement, signed by you, will be required as a condition of employment.


 


Mike,
we look forward to you re-joining WSI Industries and to your future contributions.


 


Sincerely,


 


	/s/
    Jack R. Veach	 
	Jack
    R. Veach	 
	Chair
                                         of the Compensation Committee of the 


Board
of Directors of WSI Industries, Inc.


	 


 


Accepted
and agreed to:


 


	/s/
    Michael J. Pudil	 
	Michael
    J. Pudil	 


 



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