EX-10.2







EXHIBIT 10.2




SECOND AMENDMENT

TO

EMPLOYMENT CHANGE IN CONTROL AGREEMENT




     This Amendment made as of this 29th day of December, 2008 by and between WSI Industries, Inc.,
a Minnesota corporation (“WSI”) and Michael J. Pudil (“Pudil”).



RECITALS




     WHEREAS, WSI and Pudil are parties to an Employment Change in Control Agreement dated as of
January 11, 2001, amended as of November 1, 2002;



     WHEREAS, the parties desire to amend the Employment Change in Control Agreement to bring it
into compliance with the requirements of Internal Revenue Code (“Code”) §409A and final regulations
promulgated thereunder.



AGREEMENT




     NOW, THEREFORE, the Employment Change in Control Agreement be and hereby is amended as
follows:




	1.	 	Section 2(b) is hereby amended to add a new sentence at the end to read as follows:
	 
	 	 	For purposes of the amount payable pursuant to Section 4, the formal action
to approve (or the failure to approve) a transaction by a majority of
disinterested Directors shall constitute the objective determination of an
“Approved Change in Control” or “Unapproved Change in Control.”
	 
	2.	 	Section 3 is amended to add to the end of the first paragraph the following:
	 
	 	 	The phrases similar to “termination of employment,” “terminate employment”
and “Retirement” shall be interpreted to mean a “separation from service’”
as defined in Treas. Reg. §1.409A-1(h), except Executive’s service as a
member of the Board of Directors of WSI (and any entity that is part of a
controlled group of which WSI is a member) shall be disregarded in
determining whether a separation from service has occurred. The term
“Disability” shall have the meaning under Treas. Reg. §1.409A-3(i)(4).
	 
	3.	 	Section 3(g) is amended to add at the end thereof a new sentence to read as follows:
	 
	 	 	Such payments shall continue while Executive is either performing services
for WSI or is willing and able to provide services during the period of such
dispute, and no “separation from service” shall occur during such period.




 









 












	4.	 	Section 4(d) is amended to add new subsections (vii) and (viii) to read as follows:






	 	(vii)	 	Notwithstanding anything in this Section 4, if on the date of
Executive’s “separation from service” (within the meaning of Treas. Reg.
§1.409A-1(h)), Executive is a “specified employee” within the meaning of Treas.
Reg. §1.409-1(i), then payment of any amount under Section 4(d)(ii) and unless
otherwise exempt, premiums paid under Section 4(d)(iii) that constitutes
nonqualified deferred compensation shall be paid on the earlier of (i) the
first day of the seventh month following Executive’s separation from service
provided that WSI has received an executed release from Executive as provided
in Section 5 and such release has not been rescinded, or (ii) Executive’s
death.
	 
	 	(viii)	 	If on the date of Executive’s separation from service the Executive is not a
specified employee, then payment provided in Sections 4(d)(ii) and 4(d)(iii)
shall be made or begin 60 days following the earlier of (i) Executive’s
separation from service, provided that WSI has received an executed release
from Executive as provided in Section 5 and such release has not been
rescinded, or (ii) Executive’s death.






	5.	 	Section 6 is amended to add a new sentence at the end thereof to read as follows:
	 
	 	 	Notwithstanding the foregoing, in the event any such payment is delayed
pursuant to Section 4(d)(vii), WSI will deposit, no later than the effective
date of the Change in Control, an amount equal to the aggregate of all
delayed payments into the so-called “rabbi trust” to be paid in accordance
with the terms of this Agreement.
	 
	6.	 	Section 11 is amended to add a new subsection (c) to read as follows:
	 
	 	 	Subject to Section 4(d)(vii), the Company will make any payment or
reimbursement of expenses in accordance with Section 11(b) and the payment
or reimbursement of premiums in accordance with Section 4(d)(iii) no later
than 10 days from the later of the date the amount was incurred or the date
the invoice was submitted by the Executive. No payment or reimbursement in
any year shall affect the amount of payment or reimbursement in any other
year and the right to the payment or reimbursement cannot be liquidated or
exchanged for any other benefit.
	 
	7.	 	Except as amended in this Second Amendment, the terms and conditions of the Employment Change in
Control Agreement shall be and remain in full force and effect.





     IN WITNESS WHEREOF, the parties hereto have executed this Amendment to the Employment Change
in Control Agreement as of the date first written above.



	 	 	 	 	 	 	 	 	 
	WSI INDUSTRIES, INC.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By

	 	/s/ Paul D. Sheely
	 	 	 	/s/ Michael J. Pudil
	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Chief Financial Officer
	 	 	 	Michael J. Pudil