Exhibit 10.1
 
Execution Version
 
MARIANO COSTAMAGNA
 
RETIREMENT AGREEMENT
 
This Retirement Agreement (this “Agreement”) is entered into between Fuel
Systems Solutions, Inc., a Delaware corporation (the “Company”), MTM S.r.L.
(“MTM”, a subsidiary of the Company), and Mariano Costamagna, a resident of the
Republic of Italy (“Mr. Costamagna”), as of April 24, 2015 (the “Effective
Date”).
 
The parties hereto agree as follows:
 

 
1.
Retirement.  Effective December 31, 2015, the (“Retirement Date”) Mr. Costamagna
hereby resigns as the Company’s Chief Executive Officer and, relinquishes all
executive authority with regard to MTM, and resigns from all positions as a
director, officer, executive, or employee of all subsidiaries of the
Company.  Notwithstanding the foregoing, Mr. Costamagna shall continue as a
director of  MTM (without any executive authority) and a director of the
Company.

 

 
2.
Executive Position and Succession Planning.  From the Effective Date through the
Retirement Date, Mr. Costamagna’s responsibilities and duties as Chief Executive
Officer of the Company shall continue.  Mr. Costamagna agrees that the Board of
Directors of the Company shall commence a search for his successor as Chief
Executive Officer of the Company and commence a process to determine who shall
succeed him as Chief Executive Officer of MTM with full executive
authority.  Mr. Costamagna agrees to support and mentor the person or persons
who will assume his duties as Chief Executive Officer of each of the Company and
MTM, and shall cooperate in communicating all necessary information to such
person or persons in connection with the transition of duties.  Mr. Costamagna
also understands and agrees that in the meanwhile the Board of Directors of the
Company intends to appoint a Chief Operating Officer for the Company and who
will also fill an equivalent role at MTM.  The Chief Operating Officer will
oversee the operations of the Company, MTM,  other members of the Company Group
(as defined below), as well as taking a leadership role in implementing the
restructuring plan adopted by the Board of Directors of the Company.  Mr.
Costamagna agrees to work with and support the Chief Operating Officer.

 

 
3.
Continued Directorships.  Following the Retirement Date, Mr. Costamagna shall
remain a member of the Board of Directors of the Company and MTM and so long as
he serves in these positions, Mr. Costamagna will be compensated by the Company
as a non-management director of the Company and will receive from MTM
compensation, if any, equal to the compensation of other Company directors who
also serve on the MTM Board of Directors.

 

 
4.
Compensation. Until the Retirement Date, Mr. Costamagna will continue to be paid
his current annual base salary and remain eligible for consideration for a
bonus, as well as any other compensation or benefits to which he may be entitled
as Chief Executive Officer (CEO) of the Company.

 
 
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5.
Retirement Benefit.  In addition to his compensation, (i) the Company shall
award Mr. Costamagna promptly following the execution of this Agreement 100,000
shares of Company restricted stock or restricted stock units, which will vest,
subject to compliance with the provisions of Sections 6, 7 and 8 below, on
December 31, 2016 and (ii) MTM will pay Mr. Costamagna a lump sum cash amount of
€450,000 on December 31, 2015 (collectively the “Retirement Benefit”), in each
case less any applicable US and Italian tax withholdings.  As long as Mr.
Costamagna remains a director of the Company or MTM, he shall continue to have
the use of the Company car, cell phone and computer under the same arrangements
as currently exist. .

 

 
6.
Confidential Information.  It is understood and agreed that during Mr.
Costamagna’s employment by the Company and thereafter, Mr. Costamagna shall keep
secret and retain in strictest confidence, and, except to the extent required to
be disclosed by applicable law or court order, shall not, without the prior
written consent of the Company, furnish, make available or disclose to any third
party or use for the benefit of himself or any third party, any confidential
information, including trade secrets and intellectual property, of the Company,
its lead entities MTM and IMPCO Technologies, Inc. and any of their subsidiaries
(collectively, the “Company Group”).

 

 
7.
Non-Solicitation.  During the Restricted Period (as defined below), Mr.
Costamagna agrees that he shall not, directly or indirectly, on behalf of
himself, any entity he controls in whole or in part, or any other person or
entity, (a) solicit for employment or hire any employee of the Company Group or
(b) interfere with the relationship between any member of the Company Group and
any of their customers, distributors, vendors, or suppliers.  An employee, shall
be covered by this Section while so employed and for a period of six (6) months
thereafter.  Notwithstanding the foregoing, the provisions of this Section shall
not be violated by general advertising or solicitation not specifically targeted
at any member of the Company Group. For purposes of this Agreement, the
Restricted Period means the period (i) during which Mr. Costamagna continues as
the Company’s CEO and/or continues to serve as a director of the Company or MTM
and continuing thereafter (ii) for the longer of (x) 12 months after his ceasing
to be CEO of the Company and (y) 6 months after his ceasing to be a director of
both the Company and MTM.

 

 
8.
Non-Competition.

 
Mr. Costamagna acknowledges that during his employment and service as a director
with the Company and MTM, (a) Mr. Costamagna has had and will continue to have
access to trade secrets and other confidential information of the Company Group
and their businesses, suppliers, distributors and customers, which, if
disclosed, would unfairly and inappropriately assist in competition against the
Company Group; (b) in the event of Mr. Costamagna’s employment by or association
with a competitor during the Restricted Period, Mr. Costamagna would inevitably
use or disclose such trade secrets and confidential information; (c) the members
of the Company Group have substantial relationships with their distributors and
customers and Mr. Costamagna has had and will continue to have access to these
distributors and customers; and (d) Mr. Costamagna has generated and will
continue to generate goodwill for the Company Group in the course of Mr.
Costamagna’s employment with the Company.
 
 
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Mr. Costamagna agrees that the following restrictions on Mr. Costamagna’s
activities during and after his employment and service as a director are
necessary, appropriate and reasonable to protect the goodwill, confidential
information and other legitimate interests of the Company Group from unfair and
inappropriate competition:
 
(i)           During the Restricted Period, Mr. Costamagna will not, directly or
indirectly, engage or participate, as an employee, officer, consultant or
stockholder, or render any direct or indirect service or assistance, to any
person or entity, whether with or without compensation, engaged in any business
that the Company Group conducts or is developing, as of the date Mr. Costamagna
ceases to be the Chief Executive Officer of the Company, and if later, a
director of the Company and MTM (the “Competing Business”), and which is located
in or selling into the geographic area consisting of Europe, North America,
South America, Turkey and India, locations in which the Company Group currently
conducts business (the “Non-Competition Area”), and Mr. Costamagna will not
permit his name to be used by any enterprise engaging in or participating in any
Competing Business business in the Non-Competition Area; provided, however, that
ownership of less than 5% of the outstanding stock of any publicly traded
company shall not by itself be deemed to be a violation of this provision and
the ownership of less than 25% of the stock in a private company shall not by
itself be deemed a violation of this provision; provided further, that after the
later of (i) the Retirement Date or (ii) 6 months after Mr. Costamagna ceases to
be a director of the Company and MTM, the Non-Competition Area shall be Italy
and any country which shares a border with Italy. Provided further, that the
maximum period of five years provided by Italian law for non-competition
covenants shall not be exceeded.
 
(ii)           In signing this Agreement, Mr. Costamagna gives the Company
assurance that he has carefully read and considered all the terms and conditions
of this Agreement, including the restraints imposed on him under Sections 6, 7
and 8. Mr. Costamagna agrees that the restraints contained in this Agreement,
including the restraints in this Section, are necessary for the reasonable and
proper protection of the Company Group and their trade secrets and confidential
information and that each and every one of the restraints is reasonable in
respect to subject matter, length of time and geographic area, and that these
restraints, individually or in the aggregate, will not prevent Mr. Costamagna
from obtaining other suitable employment during the period in which he is bound
by the restraints.  Mr. Costamagna acknowledges (i) that each of these covenants
has a unique, very substantial and immeasurable value to the Company Group (ii)
that Mr. Costamagna has sufficient assets and skills to provide a livelihood
while such covenants remain in force, and (iii) that, as a result of the
foregoing, in the event that Mr. Costamagna breaches such covenants, monetary
damages would be an insufficient remedy for the Company Group and equitable
enforcement of the covenant would be proper.  Mr. Costamagna therefore agrees
that the Company, and MTM, in addition to any other remedies available to them,
will be entitled to preliminary and permanent injunctive relief against any
breach by Mr. Costamagna of any of those covenants, without the necessity of
showing actual monetary damages or the posting of a bond or other security.  Mr.
Costamagna, the Company and MTM further agree that, in the event that any
provision of this Section, or Section 6 or 7 is determined by any court of
competent jurisdiction to be unenforceable by reason of its being extended over
too great a time, too large a geographic area or too great a range of
activities, that provision will be deemed to be modified to permit its
enforcement to the maximum extent permitted by law.  Mr. Costamagna further
covenants that he will not challenge the reasonableness or enforceability of any
of the covenants set forth in this Section or Sections 6 and 7.  It is also
agreed that the Company and MTM will have the right to enforce all of the
obligations under this Agreement, including without limitation pursuant to this
Section, to the extent such enforcement is permitted by law.
 
 
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(iii)           As consideration for the non-competition and non-solicitation
covenants contained in this Agreement, Mr. Costamagna is awarded 100,000 shares
of restricted stock or restricted stock units, that has been included in the
Retirement Benefit specified in Section 5 above and the value of 100,000 shares
of stock in the Company as of the date of this Agreement, is €1,020,000 and such
amount is the liquidated damages that the parties have agreed to in case of
breach by Mr. Costamagna of any such non-competition and/or non-solicitation
covenants hereunder, without prejudice to any other remedies available to the
Company and MTM.
 
 
9.
Reservation of Authority.  Notwithstanding anything to the contrary in this
Agreement, the Board of Directors of the Company, in its discretion, retains the
right to appoint and terminate officers of the Company and directors and
officers of its subsidiaries, including without limitation, MTM.

 
 
10.
Other Events.  Prior to the Retirement Date, Mr. Costamagna’s position as the
Company’s CEO, as well as a director or officer of MTM and any other member of
the Company Group shall be terminated upon the occurrence of the following
events (each a “Termination Event”):

 
(i)              Immediately upon the death of Mr. Costamagna;
 
(ii)              If Mr. Costamagna shall have been incapacitated from illness,
accident or other disability and unable to perform his normal duties hereunder
for a consecutive period of three (3) months, upon the Board of Directors of the
Company or MTM giving Mr. Costamagna not less than thirty (30) days’ written
notice (“Disability”);
 
(iii)              Mr. Costamagna’s resignation as Chief Executive Officer of
the Company prior to the Retirement Date; provided that in such case Mr.
Costamagna shall remain a director of MTM but he shall by the resignation also
relinquish all executive authority with regard to MTM;
 
 
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(iv)              By the Company for “Cause,” which shall mean (a) grossly
negligent or wrongful conduct by Mr. Costamagna, which, in the reasonable and
good faith judgment of the Board of Directors of the Company (by a vote
of  two-thirds or more of all Company directors) adversely affects the material
interests of the Company or MTM; or (b) any act or omission of Mr. Costamagna
which is a material breach of this Agreement and is not remedied within ten (10)
business days after written notice from the Board of Directors of the Company or
MTM stating that failure to remedy such conduct will result in termination for
Cause.
 
If a Termination Event shall occur, the Company and the Company Group shall not
be obligated to continue Mr. Costamagna’s compensation under Section 4.  If the
Termination Event shall occur for “Cause,” the Company and MTM shall not be
required to pay the Retirement Benefit under Section 5, except as may be
necessary to enforce the restrictions under Section 7 or 8.
 
 
11.
Miscellaneous.  This Agreement is the joint and several obligation of the
Company and MTM.  The terms of this Agreement shall be governed by, and
interpreted and construed in accordance with the provisions of, the laws of New
York insofar as the provisions  are obligations and benefit the Company and the
laws of Italy insofar as the provisions are obligations of and benefit MTM.  The
amendment, modification, or termination of this Agreement may be made only in a
writing executed by all of the parties hereto, and no amendment, modification,
or termination of this Agreement shall be effective unless and until made in
such a writing.  This Agreement shall be binding upon the Company and MTM and
the successor to the Company or MTM by merger or consolidation and shall inure
to the benefit of any and all successor(s) to the Company, MTM and their
subsidiaries (whether the succession occurs by merger or consolidation or the
purchase of a material portion of the assets of either the Company or
MTM).  This Agreement is personal to Mr. Costamagna and Mr. Costamagna may not
assign any of his rights or duties hereunder.  This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, and it
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart.

 
[Signature Page Follows]
 
 
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IN WITNESS WHEREOF, this Retirement Agreement has been duly executed by
authorized representatives of the Company and MTM and by Mr. Costamagna as of
the date first written above.
 

ACKNOWLEDGED:   FUEL SYSTEMS SOLUTIONS, INC.                     By:
 /s/ Ronald H. Janis
  By:
/s/ Troy A. Clarke
Name: Ronald H. Janis   Name: Troy A. Clarke Title: Acting Secretary  
Title: Chairman, Compensation Committee

 
 

ACKNOWLEDGED:  
MTM S.R.L.
                    By:
/s/ Colin Johnston
  By: /s/ Aldo Zanvercelli  Name: Colin Johnston   Name: Aldo Zanvercelli Title:
Director, Fuel Systems Solutions, Inc.   Title: Director

 
 

ACKNOWLEDGED:  
MARIANO COSTAMAGNA
                    By:
/s/ Marco Di Toro 
  /s/ Mariano Costamagna Name: Marco Di Toro   Mariano Costamagna (Signature)
Title: Director, Fuel Systems Solutions, Inc.    
 

 
 
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