Exhibit 10.1
 
AGREEMENT
 
This Agreement, dated as of October 29, 2014 (this “Agreement”), is by and among
Fuel Systems Solutions, Inc., a Delaware corporation (the “Company”), Steven R.
Becker, an individual resident of Texas (“Becker”), Matthew A. Drapkin, an
individual resident of New York (“Drapkin”), BC Advisors, LLC, a Texas limited
liability company, Becker Drapkin Management, L.P., a Texas limited partnership,
Becker Drapkin Partners (QP), L.P., a Texas limited partnership, and Becker
Drapkin Partners, L.P., a Texas limited partnership (collectively, with Becker
and Drapkin, the “Shareholder Group”).
 
WHEREAS, the Company and the Shareholder Group have agreed to each take and
refrain from taking certain actions on the terms and conditions set forth in
this Agreement.
 
NOW, THEREFORE, in consideration of the foregoing premises and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and intending to be legally bound hereby, the parties hereto hereby
agree as follows:
 
1.             Definitions.  For purposes of this Agreement:
 
(a)           “Advance Notice Deadline” means, with respect to any Annual
Meeting, the last date upon which a notice to the Secretary of the Company of
nominations of persons for election to the Board at such Annual Meeting would be
considered “timely” under the Company’s Amended and Restated Certificate of
Incorporation and By-Laws.
 
(b)           The terms “Affiliate” and “Associate” have the respective meanings
set forth in Rule 12b-2 promulgated by the Securities and Exchange Commission
(the “SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and shall include persons who become Affiliates or Associates of any
person subsequent to the date of this Agreement, provided that neither
“Affiliate” nor “Associate” shall include (i) any person that is a publicly held
concern and is otherwise an Affiliate or Associate solely by reason of the fact
that a principal of any member of the Shareholder Group serves as a member of
the board of directors or similar governing body of such concern, provided that
the Shareholder Group does not control such concern, (ii) such principal in its
capacity as a member of the board of directors or other similar governing body
of such concern or (iii) any entity which is an Associate solely by reason of
clause (1) of the definition of Associate in Rule 12b-2 and is not an Affiliate.
 
(c)           “Annual Meeting” means any annual meeting of stockholders of the
Company.
 
(d)           The terms “beneficial owner” and “beneficial ownership” shall have
the respective meanings as set forth in Rule 13d-3 promulgated by the SEC under
the Exchange Act.
 
(e)           “Board” means the Board of Directors of the Company.
 
(f)           “Common Stock” means the common stock of the Company, par value
$0.001 per share.
 
 
 

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(g)           “Nominating & Corporate Governance Committee” means the Nominating
& Corporate Governance Committee of the Board.
 
(h)           “Ownership Interest” means, with respect to the Common Stock,
having beneficial ownership of the Common Stock.
 
(i)           The terms “person” or “persons” shall mean any individual,
corporation (including not-for-profit), general or limited partnership, limited
liability company, joint venture, estate, trust, association, organization or
other entity of any kind or nature, including any governmental authority.
 
(j)           “Standstill Period” means the period from the date hereof until
the earlier of:
 
(i)            thirty (30) days after the date on which Becker (or, as
applicable, any replacement director appointed pursuant to Section 5 hereof)
does not continue to serve as a member of the Board;
 
(ii)           the ninetieth (90th) day prior to the Advance Notice Deadline for
the first Annual Meeting where (A) Becker (or, as applicable, any replacement
director appointed pursuant to Section 5 hereof) is eligible for nomination to
the Board and (B) the Company has notified the Shareholder Group pursuant to
Section 4(d) hereof that the Nominating & Corporate Governance Committee has
resolved to not recommend Becker for election to the Board at such Annual
Meeting; and
 
(iii)           such date, if any, as the Company has breached in any material
respect any of its representations, warranties, commitments or obligations set
forth in Section 2, 4, 5, 13, 14, 15 or 17 of this Agreement and such breach has
not been cured within thirty (30) days following written notice of such breach,
so long as such breach is curable (with the understanding that a breach of
Section 4(d) hereof is not curable).
 
2.           Representations and Warranties of the Company.  The Company
represents and warrants as follows as of the date hereof:
 
(a)           The Company has the corporate power and authority to execute,
deliver and carry out the terms and provisions of this Agreement and to
consummate the transactions contemplated hereby.
 
(b)           This Agreement has been duly and validly authorized, executed and
delivered by the Company, constitutes a valid and binding obligation and
agreement of the Company and is enforceable against the Company in accordance
with its terms, except as enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
similar laws affecting the rights of creditors and subject to general equity
principles.
 
 
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(c)           The execution, delivery and performance of this Agreement by the
Company does not and will not (i) violate or conflict with any law, rule,
regulation, order, judgment or decree, in each case that is applicable to the
Company, or (ii) result in any material breach or material violation of, or
constitute a material default (or an event which with notice or lapse of time or
both could become a material default) under or pursuant to, or result in the
loss of a material benefit under, or give any right of termination, amendment,
acceleration or cancellation of (A) any organizational document of the Company
or (B) any agreement, contract, commitment, understanding or arrangement, in
each case to which the Company is a party or by which it is bound and which is
material to the Company’s business or operations.
 
3.           Representations and Warranties of the Shareholder Group, Etc.  Each
member of the Shareholder Group severally, and not jointly, represents and
warrants with respect to himself or itself as follows as of the date hereof:
 
(a)           Such member has the power and authority to execute, deliver and
carry out the terms and provisions of this Agreement and to consummate the
transactions contemplated hereby.  Such member, if an entity, has the corporate,
limited partnership or limited liability company power and authority, as
applicable, to execute, deliver and carry out the terms and provisions of this
Agreement and to consummate the transactions contemplated hereby.
 
(b)           This Agreement has been duly and validly authorized, executed, and
delivered by such member, constitutes a valid and binding obligation and
agreement of such member and is enforceable against such member in accordance
with its terms, except as enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
similar laws affecting the rights of creditors and subject to general equity
principles.
 
(c)           The execution, delivery and performance of this Agreement by such
member does not and will not (i) violate or conflict with any law, rule,
regulation, order, judgment or decree applicable to such member, or (ii) result
in any material breach or material violation of, or constitute a material
default (or an event which with notice or lapse of time or both could become a
material default) under or pursuant to, or result in the loss of a material
benefit under, or give any right of termination, amendment, acceleration or
cancellation of, (A) any organizational document, if an entity, or (B) any
agreement, contract, commitment, understanding or arrangement, in each case to
which such member is a party or by which such member is bound and which is
material to the Shareholder Group’s business or operations.
 
(d)           As of September 18, 2014, such member is the beneficial owner of
the number of shares of Common Stock as set forth on the applicable cover page
(including any cross-referenced information) relating to such member in the
report of beneficial ownership of Common Stock on Amendment No. 2 to Schedule
13D filed by members of the Shareholder Group with the SEC on September 18, 2014
(the “Schedule 13D”).  As of the date hereof, the members of the Shareholder
Group and their Affiliates and Associates beneficially own in the aggregate
1,894,565 shares of Common Stock.  Except for those Affiliates and Associates of
such member with respect to whom a cover page is included in the Schedule 13D,
no other Affiliate or Associate of such member beneficially owns any shares of
Common Stock.
 
 
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4.             Directors; Related Matters.
 
(a)           Provided that the Shareholder Group’s Ownership Interest is, in
the aggregate as of the Appointment Date, at least equal to 5% of the
outstanding Common Stock (based on the latest annual or quarterly report of the
Company filed with the SEC pursuant to Section 13 or 15(d) of the Exchange Act)
(the “Ownership Test”) and a Shareholder Group Breach (as defined below) has not
occurred and is not then continuing, as soon as reasonably practicable, but in
any event, no later than a meeting of the Board to be held by November 3, 2014
(the “Appointment Date”), the Board shall, in accordance with the Company’s
governance documents, adopt a resolution, effective as of the Appointment Date,
to:
 
(i)            increase the size of the Board to eight (8) directors;
 
(ii)           appoint Becker to the Board, as a director in the class of
directors whose terms shall expire at the Annual Meeting to be held in 2016 (the
“2016 Annual Meeting”);
 
(iii)           resolve that the Nominating & Corporate Governance Committee
shall have five (5) members and appoint James W. Nall as chair thereto and
Becker, Troy A. Clarke, Marco Di Toro and Joseph E. Pompeo as the other members
thereof;
 
(iv)           appoint James W. Nall to the office of Chairman of the Board,
with such duties as shall be designated by the Board; and
 
(v)            create as of the Appointment Date and maintain a Strategy
Committee, comprising Becker as Chair thereto and Troy A. Clarke, Marco Di Toro
and James W. Nall as the other members thereof.
 
(b)           Becker consents and agrees to serve as a director of the Company
as of the Appointment Date in accordance with the terms of this Agreement.
 
(c)           Provided that the Ownership Test has been met, a Shareholder Group
Breach has not occurred and is not then continuing and Becker consents to serve,
then:
 
(i)            the Board and the Nominating & Corporate Governance Committee
shall nominate Becker for election to the Board as a director at the 2016 Annual
Meeting; and
 
(ii)           the Company shall recommend that the Company’s stockholders vote,
and shall solicit proxies, in favor of the election of Becker at the 2016 Annual
Meeting and otherwise support Becker for election in a manner no less rigorous
and favorable than the manner in which the Company supports its other nominees.
 
 
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(d)           Subject to Section 4(c) hereof and provided a Shareholder Group
Breach has not occurred and is not then continuing, the Company agrees, with
respect to any Annual Meeting at which Becker is eligible for nomination as a
director, to notify the Shareholder Group, no later than ninety (90) days prior
to the Advance Notice Deadline of such Annual Meeting, in writing whether the
Nominating & Corporate Governance Committee has resolved to nominate Becker for
election at such Annual Meeting, and if the Nominating & Corporate Governance
Committee has resolved to not so nominate Becker, then the Company shall take
all appropriate action to (i) provide the Shareholder Group with at least a
ninety (90) day period from such notification to comply with the advance notice
provisions for nominations of directors at such Annual Meeting contained in the
Company’s Amended and Restated Certificate of Incorporation and By-Laws and (ii)
cause such Annual Meeting not to be held prior to 120 days following such
notification.
 
(e)           Provided that a Shareholder Group Breach has not occurred and is
not then continuing, the Company agrees that the Board shall, within 180 days of
the date hereof, take all necessary steps to appoint one (1) new director to the
Board (which such appointment, for the avoidance of doubt, may be effected by an
increase in the size of the Board to nine (9) directors), who shall be mutually
agreed upon by the Shareholder Group and the Company. In order to facilitate
this process, the Company agrees to engage, within five (5) days of the
Appointment Date, an executive search firm approved by the Shareholder Group to
identify candidates for appointment as director to the Board.
 
(f)           Provided that a Shareholder Group Breach has not occurred and is
not then continuing, the Company agrees that, until the conclusion of the
Standstill Period, (i) the Company will not change the class year of Becker as a
director unless (A) the Shareholder Group has consented to such change or (B)
such change would extend the term of Becker’s term as a director, (ii) the
Company will not increase the size of the Board except as necessary to comply
with the terms of this Agreement, unless the Shareholder Group has consented to
such increase, (iii) the Company will not remove Becker from the Nominating &
Corporate Governance Committee without the prior consent of the Shareholder
Group, so long as Becker continues to serve on the Board and meets all the
charter, legal and listing requirements for service on such committee, and (iv)
the Company will not fill any vacancy on the Board unless the Board would have
less than seven (7) directors serving by not filling such vacancy or if the
appointment is pursuant to Section 4(e) or 5 hereof.
 
(g)           Provided that a Shareholder Group Breach has not occurred and is
not then continuing, the Company agrees that, so long as Becker is a member of
the Board, Becker will be offered membership and will not be removed, if
serving, on any committee of the Board constituted to evaluate strategic
opportunities for the Company, including without limitation the Strategy
Committee.
 
5.           Replacement Directors.  So long as a Shareholder Group Breach has
not occurred and is not then continuing and the Ownership Test has been met, if,
at any time prior to the conclusion of the Standstill Period, Becker is unable
or unwilling to serve as a director of the Company, other than as a result of
Becker’s resignation pursuant to Section 6 or Section 19 hereof, the Shareholder
Group and the Board (excluding Becker) shall appoint a mutually agreeable
replacement for Becker within ninety (90) days of Becker validly tendering his
resignation from the Board (in which case all references in this Agreement to
“Becker” with respect to Becker’s rights and obligations as a director shall
refer to such replacement, as applicable), unless such right is waived by the
Shareholder Group.  Prior to such appointment, such replacement candidate shall
satisfy the Board Membership Criteria (as defined in the Company’s Nominating  &
Corporate Governance Committee Charter) and complete the process set forth in
the Company’s Nominating & Corporate Governance Committee Charter and Corporate
Governance Principles, and shall execute and deliver to the Company a
counterpart to this Agreement agreeing to be bound by the terms hereof,
including without limitation, Sections 6, 10, and 19 hereof.
 
 
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6.           Minimum Ownership.
 
(a)           Becker hereby irrevocably tenders his resignation as director
effective as of the date that (i) the Ownership Interest of the Shareholder
Group falls below 5% of the outstanding Common Stock (based on the latest annual
or quarterly report of the Company filed with the SEC pursuant to Section 13 or
15(d) of the Exchange Act) or (ii) the Shareholder Group breaches its obligation
under Section 6(b) hereof and such breach has not been cured within five (5)
days following written notice of such breach.  The Board may accept such
resignation, in its sole discretion, by a majority vote (excluding Becker).  For
the avoidance of doubt, in the event Becker resigns from the Board and a
replacement director is appointed pursuant to Section 5 hereof, this Section
6(a) shall apply to such replacement director, and the Shareholder Group and its
Affiliates and Associates shall cause such replacement director to fulfill such
obligation.
 
(b)           For purposes of this Agreement, the Ownership Interest of the
Shareholder Group shall be determined based on the latest public filing made by
the Shareholder Group with the SEC with respect to its Ownership Interest;
provided, that if at any time the Shareholder Group is no longer required to
publicly disclose its Ownership Interest through public filings made with the
SEC, the Shareholder Group shall (i) promptly (and in any event within five (5)
days) inform the Company of any change in its Ownership Interest, (ii) disclose
its Ownership Interest to the Company on a quarterly basis and (iii) at the
Company’s request, produce documentary evidence reasonably necessary to verify
that its Ownership Interest reported to the Company is accurate.
 
7.           Voting.  At all shareholder meetings where the matters described in
this Section 7 will be voted on during the Standstill Period, each member of the
Shareholder Group shall cause all shares of Common Stock owned of record or
beneficially owned by it or its respective Affiliates or Associates to be
present for quorum purposes and to be voted (a) in favor of all directors
nominated by the Board for election to the Board as a director (provided, that
such nominees were not nominated in contravention of this Agreement) and (b)
against any Sale Transaction (as defined below) that is not approved by a
majority of the Board (provided, that the members of the Shareholder Group shall
not be required to vote in favor of a Sale Transaction that was approved by the
Board).
 
8.           Standstill.  Each member of the Shareholder Group agrees that,
during the Standstill Period, he or it will not, and he or it will cause each of
such person’s respective Affiliates, Associates and agents and any other persons
acting on his or its behalf not to, directly or indirectly:
 
(a)           acquire, offer to acquire or agree to acquire, alone or in concert
with any other person, individual or entity, by purchase, tender offer, exchange
offer, agreement or business combination or any other manner, beneficial
ownership in excess of 15% of the outstanding shares of Common Stock (based on
the latest annual or quarterly report of the Company filed with the SEC pursuant
to Section 13 or 15(d) of the Exchange Act), excluding the acquisition of
equity-based compensation pursuant to Section 13 hereof and the exercise of any
options or conversion of any convertible securities comprising such equity-based
compensation;
 
 
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(b)           submit any shareholder proposal (pursuant to Rule 14a-8
promulgated by the SEC under the Exchange Act or otherwise) or any notice of
nomination or other business for consideration, or nominate any candidate for
election to the Board or oppose the directors nominated by the Board (provided,
that such nominees were not nominated in contravention of this Agreement);
 
(c)           form, join in or in any other way participate in a “partnership,
limited partnership, syndicate or other group” within the meaning of Section
13(d)(3) of the Exchange Act with respect to the Common Stock or deposit any
shares of Common Stock in a voting trust or similar arrangement or subject any
shares of Common Stock to any voting agreement or pooling arrangement, other
than solely with other members of the Shareholder Group or one or more of their
respective Affiliates (provided that any such Affiliate signs a joinder to this
Agreement) or to the extent such a group may be deemed to result with the
Company or Becker or any of their respective Affiliates as a result of this
Agreement;
 
(d)           solicit proxies or written consents of stockholders or otherwise
conduct any nonbinding referendum with respect to the Common Stock, or make, or
in any way encourage, influence or participate in, any “solicitation” of any
“proxy” within the meaning of Rule 14a-1 promulgated by the SEC under the
Exchange Act to vote, or engage in discussions with, advise, encourage or
influence any person with respect to voting or tendering, any shares of Common
Stock with respect to any matter, including, without limitation, any Sale
Transaction that is not approved by a majority of the Board, or become a
“participant” in any contested “solicitation” for the election of directors with
respect to the Company (as such terms are defined or used under the Exchange Act
and the rules promulgated by the SEC thereunder), other than a “solicitation” or
acting as a “participant” in support of all of the nominees of the Board at any
stockholder meeting;
 
(e)           call or seek to call or to request the calling of a special
meeting of the stockholders of the Company or seek to make or make a shareholder
proposal at any meeting of the stockholders of the Company or make a request for
a list of the Company’s stockholders (or otherwise induce, encourage or assist
any other person to initiate or pursue such a proposal or request) or otherwise
acting alone, or in concert with others, seek to control or influence the
governance or policies of the Company;
 
 
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(f)           effect or seek to effect (including, without limitation, by
entering into any discussions, negotiations, agreements or understandings with
any third person), offer or propose (whether publicly or otherwise) to effect,
or cause or participate in, or in any way assist, solicit, encourage or
facilitate any other person to effect or seek, offer or propose (whether
publicly or otherwise) to effect or cause or participate in (including by
tendering or selling into) (i) any acquisition of any material assets or
businesses of the Company or any of its subsidiaries, (ii) any transfer or
acquisition of shares of Common Stock or other securities of the Company or any
securities of any Affiliate of the Company if, after completion of such transfer
or acquisition or proposed transfer or acquisition, a person or group would
beneficially own, or have the right to acquire beneficial ownership of, more
than 4.9% of the outstanding shares of Common Stock (based on the latest annual
or quarterly report of the Company filed with the SEC pursuant to Section 13 or
15(d) of the Exchange Act), provided that open market sales of securities
through a broker by the Shareholder Group which are not actually known by the
Shareholder Group to result in any transferee acquiring beneficial ownership of
more than 4.9% of the outstanding shares of Common Stock shall not be included
in this clause (ii) or constitute a breach of this Section 8, (iii) any tender
offer or exchange offer, merger, change of control, acquisition or other
business combination involving the Company or any of its subsidiaries or (iv)
any recapitalization, restructuring, liquidation, dissolution or other
extraordinary transaction with respect to the Company or any of its subsidiaries
(any of the transactions or events described in (i) through (iv) above are
referred to as a “Sale Transaction”), unless such Sale Transaction has been
approved by a majority of the Board and has been announced by the Company;
provided, that this paragraph shall not require members of the Shareholder Group
or Becker to vote in favor of a Sale Transaction that was approved by the Board;
 
(g)           publicly disclose, or cause or facilitate the public disclosure
(including, without limitation, the filing of any document or report with the
SEC or any other governmental agency or any disclosure to any journalist, member
of the media or securities analyst) of, any intent, purpose, plan or proposal to
obtain any waiver, or consent under, or any amendment of, any of the provisions
of Section 7 hereof or this Section 8, or otherwise seek (in any manner that
would require public disclosure by any of the members of the Shareholder Group,
Becker or their respective Affiliates or Associates) to obtain any waiver,
consent under, or amendment of any provision of this Agreement;
 
(h)           disparage the Company or any member of the Board or management of
the Company, provided that this provision shall not apply to compelled
testimony, either by legal process, subpoena or otherwise, or to communications
that are required by an applicable legal obligation and are subject to
contractual provisions providing for confidential disclosure;
 
(i)           engage in any short sale or any purchase, sale or grant of any
option, warrant, convertible security, stock appreciation right or other similar
right (including, without limitation, any put or call option or “swap”
transaction) with respect to any security (other than a broad-based market
basket or index) that includes, relates to or derives any significant part of
its value from a decline in the market price or value of the Company’s
securities;
 
(j)           enter into any arrangements, understandings or agreements (whether
written or oral) with, or advise, finance, assist or encourage any other person
that engages, or offers or proposes to engage, in any of the foregoing; or
 
(k)           take or cause or induce or assist others to take any action
inconsistent with any of the foregoing;
 
provided, that, notwithstanding the foregoing, it is understood and agreed that
this Agreement shall not be deemed to prohibit Becker from engaging in any
lawful act in his capacity as a director of the Company that is either expressly
approved by the Board or required to comply with his fiduciary duties.
 
 
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9.           Support.  During the Standstill Period, Becker, in his capacity as
a director of the Company, will use reasonable efforts to support, at the
Company’s sole cost and expense, the Company’s slate of directors in a manner
generally consistent with the support provided by the other directors of the
Company, provided that such slate of directors is consistent with the terms and
conditions of this Agreement.
 
10.           Company Policies.
 
(a)           By the Appointment Date, Becker will have reviewed the Company’s
Corporate Governance Principles, Code of Conduct Policy, Whistleblower Policy,
Insider Trading Policy and all other Company policies concerning
confidentiality, disclosure, insider trading, window periods and material
non-public information, and the charters of the Nominating & Corporate
Governance Committee and the Strategy Committee (collectively, the “Company
Policies”), and Becker agrees to abide by the provisions of the Company
Policies, including any confidentiality policies of the Company, as they may be
amended from time to time, during his service as a director of the Company and
for such period of time thereafter as may be set forth in the Company Policies;
provided, that any provision of the Company Policies limiting the number of
other boards of public companies on which a director may serve shall not be
applicable to Becker.
 
(b)           Until the date the Company files its next annual or quarterly
report pursuant to Section 13 or 15(d) of the Exchange Act following the date on
which no member of the Shareholder Group (nor any replacement director appointed
pursuant to Section 5 hereof who is an Affiliate, Associate or employee of any
member of the Shareholder Group) continues to serve as a member of the Board,
the Shareholder Group will and will cause its Affiliates and Associates and all
related persons to abide by all Company Policies concerning confidentiality,
insider trading, window periods and material non-public information.
 
(c)           The members of the Shareholder Group acknowledge that they are
aware that United States securities law prohibits any person who has material
non-public information about a company from purchasing or selling any securities
of such company, or from communicating such information to any other person
under circumstances in which it is reasonably foreseeable that such person is
likely to purchase or sell such securities.
 
11.           [Reserved].
 
12.           Questionnaires.  By the Appointment Date, Becker shall have
accurately completed the form of questionnaire provided by the Company for its
use in connection with his appointment to the Board and preparation of the
Company’s proxy statement and other reports filed with the SEC.
 
13.           Compensation.  Becker shall be compensated for his service as a
director and shall be reimbursed for his expenses on the same basis as all other
non-employee directors of the Company and shall be eligible to be granted
equity-based compensation on the same basis as all other non-employee directors
of the Company.
 
 
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14.           Indemnification and Insurance.  Becker shall be entitled to the
same rights of indemnification and directors’ and officers’ liability insurance
coverage as the other non-employee directors of the Company as such rights may
exist from time to time.
 
15.           Non-Disparagement.  Provided that a Shareholder Group Breach has
not occurred and is not then continuing, the Company agrees, prior to the
conclusion of the Standstill Period, that it shall not publicly disparage any
member of the Shareholder Group, any member of the management of the Shareholder
Group, or Becker, and that it shall cause the Board to act the same, provided
that this provision shall not apply to compelled testimony, either by legal
process, subpoena or otherwise, or to communications that are required by an
applicable legal obligation or are subject to contractual provisions providing
for confidential disclosure.
 
16.           Schedule 13D.  The Shareholder Group shall promptly file an
amendment to the Schedule 13D reporting the entry into this agreement, amending
applicable items to conform to their obligations hereunder and appending or
incorporating by reference this Agreement as an exhibit thereto.  The
Shareholder Group shall provide the Company with a reasonable opportunity to
review and comment on such amendment in advance of filing and shall accept any
such reasonable and timely comments of the Company.
 
17.           Expenses.  Within two (2) business days of the date hereof, the
Company shall reimburse the Shareholder Group for the reasonable and documented
out-of-pocket expenses (up to a maximum of $75,000) actually incurred by the
Shareholder Group in connection with the negotiation and execution of this
Agreement.  Except as provided in the preceding sentence, all costs and expenses
incurred in connection with this Agreement and all matters related hereto shall
be paid by the party incurring such cost or expense.
 
18.           Specific Performance.  Each party hereto acknowledges and agrees,
on behalf of itself and its Affiliates, that irreparable harm would occur in the
event any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached.  It is accordingly agreed
that the parties will be entitled to specific relief hereunder, including,
without limitation, an injunction or injunctions to prevent and enjoin breaches
of the provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any state or federal court located in the State of
Delaware, in addition to any other remedy to which they may be entitled at law
or in equity.  Any requirements for the securing or posting of any bond with
such remedy are hereby waived.
 
19.           Resignation.  Becker hereby irrevocably tenders his resignation as
director effective as of the date, if any, that any member of the Shareholder
Group breaches and fails to cure in any material respect any of their
representations, warranties, commitments or obligations set forth in Sections 3,
7, 8, 9, 10, 12 and 16 hereof (which, for the avoidance of doubt, shall include
the failure of any member of the Shareholder Group to cause its respective
Affiliates and Associates to comply with and perform such representations,
warranties, commitments or obligations as if they were a party hereto and bound
thereby), and such breach has not been cured within five (5) business days, with
respect to breaches of Sections 7, 8, and 16 hereof, or thirty (30) days, with
respect to breaches of other sections, following written notice of such breach
so long as such breach is curable (any of the above or a breach of Section 6(b)
hereof, a “Shareholder Group Breach”).  The Board may accept such resignation,
in its sole discretion, by a majority vote (excluding Becker).  For the
avoidance of doubt, in the event Becker resigns from the Board, and a
replacement director is appointed pursuant to Section 5 hereof, this Section 19
shall apply to such replacement director, and the Shareholder Group and their
respective Affiliates and Associates shall cause such replacement director to
fulfill such obligation.  A Shareholder Group Breach shall be considered to be
“continuing” if it is not curable or, if curable, is not cured within the
applicable time frame set forth in this Section 19.
 
 
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20.           Jurisdiction.  Each party hereto agrees, on behalf of itself and
its Affiliates, that any actions, suits or proceedings arising out of or
relating to this Agreement or the transactions contemplated hereby will be
brought solely and exclusively in the Court of Chancery of the State of Delaware
and any state appellate court therefrom within the State of Delaware (or, if the
Court of Chancery of the State of Delaware declines to accept jurisdiction over
a particular matter, any federal court within the State of Delaware) (and the
parties agree on behalf of themselves and their respective Affiliates not to
commence any action, suit or proceeding relating thereto except in such courts),
and further agrees that service of any process, summons, notice or document by
U.S. registered mail to the respective addresses set forth in Section 24 hereof
will be effective service of process for any such action, suit or proceeding
brought against any party in any such court. Each party, on behalf of itself and
its Affiliates, agrees and consents to the personal jurisdiction of the state
and federal courts located in the State of Delaware, and irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby, in the state or federal courts located in the State of Delaware, and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding brought in any
such court has been brought in an improper or inconvenient forum.
 
21.           Applicable Law.  This Agreement shall be governed in all respects,
including validity, interpretation and effect, by the laws of the State of
Delaware applicable to contracts executed and to be performed wholly within such
state, without giving effect to the choice of law principles of such
state.  Each party hereto agrees to irrevocably waive any right to trial by
jury.
 
22.           Counterparts; Facsimile or Electronic Signatures.  This Agreement
may be executed in two or more counterparts that together shall constitute a
single agreement.  Facsimile or electronic (e.g., PDF) signatures shall be as
effective as original signatures.
 
23.           Entire Agreement; Amendment and Waiver; Successors and
Assigns.  This Agreement contains the entire understanding of the parties hereto
with respect to, and supersedes all prior agreements relating to, its subject
matter.  There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings between the parties other than those
expressly set forth herein.  This Agreement may be amended only by a written
instrument duly executed by the parties hereto or their respective successors or
assigns.  No failure on the part of any party to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of such right, power or remedy
by such party preclude any other or further exercise thereof or the exercise of
any other right, power or remedy.  All remedies hereunder are cumulative and are
not exclusive of any other remedies provided by law.  The terms and conditions
of this Agreement shall be binding upon, inure to the benefit of, and be
enforceable by the parties hereto and their respective successors, heirs,
executors, legal representatives and assigns.  No party hereto may assign or
otherwise transfer either this Agreement or any of its rights, interests or
obligations hereunder without the prior written consent of the other parties
hereto.  Any purported transfer without such consent shall be void.
 
 
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24.           Notices.  All notices, consents, requests, instructions, approvals
and other communications provided for herein and all legal process in regard
hereto shall be in writing and shall be deemed validly given, made or served (a)
if given by facsimile, when such facsimile is transmitted to the facsimile
number set forth below, or to such other facsimile number as is provided by a
party to this Agreement to the other parties pursuant to notice given in
accordance with the provisions of this Section 24, and the appropriate
confirmation is received, or (b) if given by any other means, when actually
received during normal business hours at the address specified in this Section
24, or at such other address as is provided by a party to this Agreement to the
other parties pursuant to notice given in accordance with the provisions of this
Section 24:
 
if to the Company:
 
Fuel Systems Solutions, Inc.
780 Third Avenue
Floor 25
New York, NY 10017
Facsimile: (646) 502-7171
Attention:  Lead Director
 
with a copy (which shall not constitute notice) to:
 
Latham & Watkins LLP
885 Third Avenue
New York, NY 10022-4834
Facsimile: (212) 751-4864
Attention: M. Adel Aslani-Far, Esq.
Attention: David Kurzweil, Esq.; and
 
Day Pitney LLP
7 Times Square
New York, NY 10036
Facsimile: (212) 881-9023
Attention: Ronald H. Janis, Esq.
 
if to the Shareholder Group or any member thereof:
 
Becker Drapkin Management, L.P.
500 Crescent Court
Suite 230
Dallas, Texas 75201
Facsimile: (214) 756-6019
Attention: Steven R. Becker
 
 
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with a copy (which shall not constitute notice) to:
 
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, NY 10166-0193
Facsimile: (212) 716-0830
Attention: Richard J. Birns, Esq.
 
25.           No Third-Party Beneficiaries. Nothing in this Agreement is
intended to confer on any person other than the parties hereto or their
respective successors and assigns, and their respective Affiliates to the extent
provided herein, any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
 
26.           Unenforceability. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, then the other
provisions of this Agreement shall remain in full force and effect. Any
provision of this Agreement held invalid or unenforceable only in part or degree
shall remain in full force and effect to the extent not held invalid or
unenforceable. The parties hereto further agree to replace such invalid or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the purposes of such invalid or
unenforceable provision.
 
27.           Construction. Each of the parties hereto acknowledges that it has
been represented by counsel of its choice throughout all negotiations that have
preceded the execution of this Agreement, and that it has executed this
Agreement with the advice of such counsel. Each party hereto and its counsel
cooperated and participated in the drafting and preparation of this Agreement,
and any and all drafts relating thereto exchanged among the parties shall be
deemed the work product of all of the parties and may not be construed against
any party by reason of its drafting or preparation. Accordingly, any rule of law
or any legal decision that would require interpretation of any ambiguities in
this Agreement against any party hereto that drafted or prepared it is of no
application and is hereby expressly waived by each of the parties, and any
controversy over interpretations of this Agreement shall be decided without
regard to events of drafting or preparation.
 
[Signature page follows]
 
 
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized signatories of the parties as of the date first written above.
 

 
COMPANY:
          FUEL SYSTEMS SOLUTIONS, INC.           By:     /s/ Pietro Bersani    
Name:  Pietro Bersani     Title: Chief Financial Officer  

 
 
 
 
 
[Signature Page to Agreement]
 
 

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/s/ Steven R. Becker
Steven R. Becker
/s/ Matthew A. Drapkin
Matthew A. Drapkin
           
BC ADVISORS, LLC
BECKER DRAPKIN MANAGEMENT, L.P.
 
 
By: BC Advisors, LLC, its general partner
   
By:
/s/ Steven R. Becker
/s/ Steven R. Becker
Name:
Steven R. Becker
Name:
Steven R. Becker
Title:
Managing Partner
Title:
Managing Partner

 
 
BECKER DRAPKIN PARTNERS (QP), L.P.
BECKER DRAPKIN PARTNERS, L.P.
   
By:
Becker Drapkin Management, L.P., its general partner
By:
Becker Drapkin Management, L.P., its general partner
       
By:
BC Advisors, LLC, its general partner
By:
BC Advisors, LLC, its general partner
         
By:
/s/ Steven R. Becker
 
By:
/s/ Steven R. Becker
 
Name:
Steven R. Becker
 
Name:
Steven R. Becker
 
Title:
Managing Partner
 
Title:
Managing Partner

 
 
 
 
[Signature Page to Agreement]

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