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                                                                   EXHIBIT 10.1


                              WSI INDUSTRIES, INC.
                                 2005 STOCK PLAN
                        RESTRICTED STOCK AWARD AGREEMENT


===============================================================================

RECIPIENT:                    ____________________________

AWARD DATE:                   ____________________________

RESTRICTED SHARES:            ____________________________

LAPSE OF RESTRICTIONS:        Restrictions on the Restricted Shares lapse in
                              equal installments over a three (3) year period as
                              follows:

                              ______ Shares on and after the first anniversary
                              of the Award Date

                              ______ Shares on and after the second anniversary
                              of the Award Date

                              _____ Shares on and after the third anniversary
                              of the Award Date

===============================================================================


         THIS RESTRICTED STOCK AWARD AGREEMENT is made as of the Award Date set
forth above, by and between WSI Industries, Inc., a Minnesota corporation (the
"Company") and the Recipient named above (the "Recipient") setting forth the
terms and conditions of an Award of Restricted Stock granted pursuant to WSI
Industries, Inc., 2005 Stock Plan (the "Plan"). Capitalized terms used herein
and not defined shall have the meaning given such terms in the Plan.

         1.       GRANT OF RESTRICTED SHARES. In accordance with the terms of
the Plan and subject to the further terms, conditions and restrictions contained
in this Agreement, the Company hereby grants to Recipient the number of
Restricted Shares set forth above. "Restricted Shares" means shares of the
Company's common stock, $0.10 par value (the "Shares") subject to the
Restrictions set forth in Section 3 of this Agreement.

         2.       CERTIFICATES FOR SHARES. Certificates evidencing Restricted
Shares shall be deposited with the Company to be held in escrow until such
Shares are released to the Recipient or forfeited in accordance with this
Agreement. The Recipient shall, simultaneously with the delivery of this
Agreement, deliver to the Company a stock power, in blank, executed by the
Recipient. If any Restricted Shares are forfeited, the Company shall direct the
transfer agent of the Shares to make the appropriate entries in its records
showing the cancellation of the certificate or certificates for such Restricted
Shares and the Shares represented thereby shall have the status as authorized
but unissued Shares.

         3.       RESTRICTIONS. During the period prior to the lapse of the
restrictions as set forth in Section 5 (the "Restricted Period") and subject to
earlier termination of the Restricted Period or forfeiture of the Restricted
Shares, the Restricted Shares and all rights with respect to the Restricted
Shares, may not be sold, assigned, transferred, exchanged, pledged, hypothecated
or otherwise encumbered or disposed of


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and shall be subject to the risk of forfeiture contained in Section 4 of this
Agreement (such limitations on transferability and risk of forfeiture being
herein referred to as "Restrictions"), but the Recipient shall have all other
rights of a stockholder, including, but not limited to, the right to vote and
receive cash dividends on Restricted Shares. Any cash dividend paid with respect
to the Restricted Shares that have not yet vested will be reinvested (to the
extent shares are available under the Plan) in additional Restricted Shares
("Reinvested Restricted Shares"), rounded down to the nearest whole Share,
subject to the same restrictions on transferability and the possibility of
forfeiture to the Company as the Restricted Shares to which the dividend
relates; provided, however, that all Restrictions on the Reinvested Restricted
Shares shall lapse on the first date after such Reinvested Restricted Shares are
issued that Restrictions on any Restricted Shares lapse. The Restricted Shares
received upon such reinvestment of cash dividends will be valued at the Fair
Market Value on the date such dividend is paid.

         4.       FORFEITURE OF RESTRICTED SHARES. If Recipient shall cease to
be an employee of the Company for any reason, all Shares that at that time are
Restricted Shares shall thereupon be forfeited by the Recipient to the Company
without payment of any consideration therefor, and neither the Recipient, nor
any successor, heir, assign or personal representative shall have any right or
interest in or to such Restricted Shares or the certificates evidencing the
Restricted Shares.

         5.       LAPSE OF RESTRICTIONS.

                  (a) Except as provided in Section 4 or in Section 5(b), the
         Restrictions on the Restricted Shares granted under this Agreement
         shall lapse as to the number of Restricted Shares and at the times
         stated above under "Lapse of Restrictions." Upon lapse of the
         Restrictions in accordance with this Section, the Company shall, as
         soon as practicable thereafter, deliver to the Recipient a certificate
         for the Shares with respect to which such Restrictions have lapsed.

                  (b) Notwithstanding any other provision of this Agreement, all
         Restrictions with respect to any Restricted Shares shall lapse on the
         date determined by the Committee (as defined in the Plan) prior to, but
         in no event more than sixty (60) days prior to, the occurrence of any
         of the following events: (i) dissolution or liquidation of the Company,
         other than in conjunction with a bankruptcy of the Company or any
         similar occurrence; (ii) any merger, consolidation, acquisition,
         separation, reorganization or similar occurrence where the Company will
         not be the surviving entity; or (iii) the transfer of substantially all
         of the assets of the Company, or 75% or more of the outstanding Stock
         of the Company.

         6.       NON-TRANSFERABILITY. Neither the Restricted Shares nor this
Restricted Stock Award Agreement nor any interest in the Shares or Award may be
anticipated, alienated, encumbered, sold, pledged, assigned, transferred or
subjected to any charge or legal process, other than by will or the laws of
descent and distribution, so long as the Restrictions have not lapsed as to any
Restricted Share and the Shares have not been delivered in accordance with the
Plan, and any sale, pledge, assignment or other attempted transfer shall be null
and void.

         7.       ADJUSTMENTS. In the event of a corporate transaction involving
the Company, the Common Stock or the Company's corporate or capital structure,
including but not limited to any stock dividend, stock split, extraordinary cash
dividend, recapitalization, reorganization, merger, consolidation
reclassification, split-up, spin-off combination or exchange of shares, or a
sale of the Company or of all or part of its assets or any distribution to
stockholders other than a normal cash dividend, the Committee shall make such
proportional adjustments as are necessary to preserve the benefits or potential
benefits of the Awards of Restricted Shares. Action by the Committee may include
all or any adjustment in (a) the maximum number and kind of securities subject
to the Plan as set forth in this section; (b) the maximum number and kind of
securities that may be made subject to an Award of Restricted Shares for any
individual; (c) the number and kind of securities subject to any outstanding
Award; and (d) any other adjustments that the Committee determines to be
equitable.


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         8.       SUCCESSORS AND HEIRS. This Agreement shall be binding upon and
inure to the benefit of the Company and its successors and assigns, and upon any
person acquiring, whether by merger, consolidation, purchase of assets or
otherwise, all or substantially all of the Company's assets and business.

         9.       GOVERNING LAW. This Restricted Stock Award Agreement and the
Restricted Shares will be construed, administered and governed in all respects
under and by the applicable laws of the State of Minnesota, excluding any
conflicts or choice of law rule or principle that might otherwise refer
construction or interpretation of this agreement, the Plan, the award or the
Restricted Shares to the substantive law of another jurisdiction.

         10.      TAX WITHHOLDING. The Company shall deduct from the number of
Shares deliverable upon lapse of the Restrictions under this Restricted Stock
Award Agreement such number of Shares as may be required to pay the amount of
any federal, state or local taxes of any kind required by law to be withheld
with respect to the grant, lapse of Restrictions, payment or settlement of an
Award under this Restricted Stock Award Agreement. Shares withheld or
surrendered to satisfy tax withholding will be valued at Fair Market Value as of
the date such Shares are withheld or surrendered.

         11.      MISCELLANEOUS. Notwithstanding anything in this Agreement to
the contrary, the terms of this Agreement shall be subject to the terms of the
Plan. In accordance with the Plan, all decisions of the Committee shall be final
and binding upon Recipient and the Company.

         IN WITNESS WHEREOF, the Company and the Recipient have each executed
and delivered this Agreement as of the date first above written.


                                         WSI INDUSTRIES, INC.



                                         By:
                                             ----------------------------------

                                             Its:
                                                  -----------------------------

RECIPIENT:



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