UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) : December 29, 2008
WSI Industries, Inc.
 
(Exact name of Registrant as Specified in its Charter)
Minnesota
 
(State Or Other Jurisdiction Of Incorporation)
     
000-00619   41-0691607
     
(Commission File Number)   (I.R.S. Employer Identification No.)
     
213 Chelsea Road
Monticello, MN 		  55362
     
(Address Of Principal Executive Offices)   (Zip Code)
(763) 295-9202
 
Registrant’s Telephone Number, Including Area Code
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
o      Written communications pursuant to Rule 425 under the Securities Act
o      Soliciting material pursuant to Rule 14a-12 under the Exchange Act
o      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
o      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
 
 

 

 

Items under Sections 1 through 4 and 6 through 8 are not applicable and therefore omitted.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On December 29, 2008, WSI Industries, Inc. (the “Company”) entered into a Second Amendment to Employment Agreement and a Second Amendment to Employment Change in Control Agreement with Michael J. Pudil, its Chief Executive Officer. On December 29, 2008, the Company also entered into a Second Amendment to Employment Change in Control Agreement with Paul D. Sheely, its Chief Financial Officer. Each of these amendments was approved by the Compensation Committee of the Board of Directors of the Company and are attached hereto as Exhibits 10.1 through 10.3. These amendments to the employment and employment change in control agreements reflect several technical changes that are designed to make these agreements comply with the requirements of Section 409A of the Internal Revenue Code of 1986.
Item 9.01 Financial Statements And Exhibits.
     
Exhibit No.   Description
10.1
  Second Amendment to Employment Agreement dated December 29, 2008 by and between WSI Industries, Inc. and Michael J. Pudil.
 
   
10.2
  Second Amendment to Employment Change in Control Agreement dated December 29, 2008 by and between WSI Industries, Inc. and Michael J. Pudil.
 
   
10.3
  Second Amendment to Employment Change in Control Agreement dated December 29, 2008 by and between WSI Industries, Inc. and Paul D. Sheely.
SIGNATURE
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
         
  WSI INDUSTRIES, INC.
  		 
  By:   /s/ Michael Pudil    
    Michael Pudil   
    President and Chief Executive Officer   
 
Date: December 30, 2008

 

EXHIBIT 10.1
SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
     The Employment Agreement (the “Agreement”) dated October 22, 1993 between WSI Industries, Inc. (formerly Washington Scientific Industries, Inc.) (“WSI”) and Michael J. Pudil (“Pudil”), as amended January 9, 1997, shall be further amended as of December 29, 2008 as set forth below. All other provisions of the Agreement shall remain unchanged.
1.   It is the intention of the parties that this Agreement shall be exempt from the requirements of Code §409A as a separation pay plan. Consistent with that intent, the third sentence of paragraph 8 is amended in its entirely to read as follows:
 
    Pudil may also terminate his employment with WSI at any time for Good Reason, effective immediately upon written notice to the Board, provided, however, that prior to such notice, Pudil had provided written notice to the Board of Directors of WSI within 90 days of the occurrence of an event constituting Good Reason, and WSI had failed to cure any breach (if capable of cure) within a reasonable period of time, not to exceed 10 days from the date of the initial notice.
 
2.   For all purposes of this Agreement, the phrase “terminate employment” or “termination of employment” shall be interpreted to mean a “separation from service” as defined in Treas. Reg. §1.404-1(h).
 
3.   The references in paragraph 9 of the Agreement to the “Change in Control Agreement” shall mean the Employment Change in Control Agreement dated as of January 11, 2001, as amended from time to time.
     IN WITNESS WHEREOF, the parties have executed this Second Amendment to the Employment Agreement as of the day and year first set forth above.
                 
WSI INDUSTRIES, INC.        
 
               
By
  /s/ Paul D. Sheely       /s/ Michael J. Pudil    
 
               
 
  Chief Financial Officer       Michael J. Pudil    

 

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    

 

Exhibit 10.3
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 Paul D. Sheely (“Sheely”).
RECITALS
      WHEREAS , WSI and Sheely 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/ Michael J. Pudil       /s/ Paul D. Sheely    
 
               
 
  Chief Executive Officer       Paul D. Sheely