EXHIBIT 99.2


                                November 22, 2002

Mr. Michael N. Taglich
c/o Taglich Brothers, Inc.
1370 Avenue of the Americas
31st floor
New York, NY 10019

Dear Mr. Taglich:

You have provided notice to WSI Industries, Inc. (the "Company") that you intend
to nominate five persons for election as directors at the Company's next Annual
Meeting of Shareholders. In connection with that notice, a Schedule 13D was
filed with the Securities and Exchange Commission on behalf of yourself and
other individuals named therein. This letter is to confirm the Company's
agreement with you with respect to the settlement of a threatened proxy contest
on the terms set forth below:

1.       The Company agrees to nominate you for election as a director at the
         Annual Meeting of Shareholders to be held January 9, 2003, provided
         that you consent to being named as a nominee in any proxy filed by the
         Company in this regard and furnish any required information for use in
         such proxy.

2.       In the event you are elected as a director at the 2003 Annual Meeting
         of Shareholders as described in paragraph 1 above, you shall be named
         the Chairman of the Board of the Company.

3.       You agree that until December 31, 2004 neither you nor any of your
         affiliates or associates (as defined in Section 302A.011 of the
         Minnesota Business Corporation Act) will, without the prior approval of
         the Board of Directors of the Company, directly or indirectly, (i)
         initiate, propose, make or participate in any solicitation of proxies
         to vote or seek to influence any person with respect to the voting of
         any securities of the Company; or (ii) demand or call a meeting of
         shareholders of the Company. Notwithstanding the foregoing, this
         agreement shall not apply with respect to any Annual Meeting of
         Shareholders to be held after December 31, 2004.

4.       The Company agrees to pay your legal fees in connection with the
         preparation of your notice of intent to nominate five persons and the
         filing of the Schedule 13D.

If the foregoing accurately describes our agreement to settle these matters,
please sign below where indicated, fax a copy to me, and return one original by
Fed Ex.

Sincerely,

WSI INDUSTRIES, INC.                           ACCEPTED AND AGREED


/s/  Michael J. Pudil                          /s/  Michael N. Taglich
---------------------------------              ---------------------------------
Michael J. Pudil                               Michael N. Taglich
President & CEO