Separation and General Release Agreement

Date Executive First Received this Agreement: April 24, 2008

      This Separation and General Release Agreement (the “ Agreement ”) is made as of this 9th day of May, 2008 by and among Fuel Systems Solutions, Inc. (referred to throughout this Agreement as the “ Company ”) and Thomas M. Costales (“ Executive ,” and together with the Company, the “ Parties ”).

      WHEREAS, Executive has been employed by the Company as an “at will” employee under terms set forth in that certain “Employment Offer Letter” dated May 12, 2005 (the “ Executive Employment Letter ”); and

      WHEREAS, Executive’s employment with the Company has ended by agreement of the Parties (the “ Separation ”) effective as of May 9, 2008 (the “ Separation Date ”); and

      WHEREAS, the Parties’ rights and obligations with respect to Executive’s equity interests in the Company are set forth in the Fuel Systems Solutions, Inc. Restricted Stock Agreement referenced in Exhibit A (the “ Equity Plans ”); and

      WHEREAS, the Parties’ rights and obligations with respect to certain amounts contributed under the Company’s 401(k) Plan are referenced on Exhibit A (the “ 401(k) Plan ”); and

      WHEREAS, the Parties’ rights and obligations with respect to certain amounts of deferred compensation of the Executive are set forth in the Nonqualified Deferred Compensation Plan Basic Plan Document and Adoption Agreement referenced in Exhibit A (the “ Deferred Compensation Plan ” and together with the 401(k) Plan and the Equity Plans, the “ Plans ”); and

      WHEREAS, the Parties desire to enter into this Agreement in order to set forth the definitive rights and obligations of the Parties in connection with the Separation.

      NOW, THEREFORE, in consideration of the mutual covenants, commitments and agreements contained herein, and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the Parties intending to be legally bound hereby agree as follows:

      1. Acknowledgment of Separation . The Parties acknowledge and agree that the Separation is effective as of May 9, 2008.

      2. Resignation of Office . Effective as of the Separation Date, Executive voluntarily resigns his position as Chief Financial Officer of the Company, and from any and all other offices or board positions which he holds at the Company or any of its subsidiaries.

      3. Executive’s Acknowledgment of Consideration . Executive specifically acknowledges and agrees that certain of the obligations created and payments made to him by

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the Company under this Agreement are promises and payments to which he is not otherwise entitled under any law or contract.

required by law, Executive shall receive a lump sum payment of all then-outstanding final wages and accrued unused vacation, minus applicable federal, state and local tax withholdings, for services performed for the Company through and including the Separation Date.

      (b) Severance Benefits . Upon the effectuation of this Agreement as required by Section 15 hereof, Executive (his heirs or assigns) shall become entitled to receive the severance benefits described below in Sections 4(b)(i) through 4(b)(iv) (the “ Severance Benefits ”). The payment or provision of such benefits by the Company shall not represent any admission or concession by the Company that such benefits are owed to Executive under any agreement or obligation that might be asserted by or on behalf of Executive:

      (i) Severance Pay. Upon the effectuation of this Agreement as required by Section 15 hereof, the Company shall pay severance to the Executive in the lump sum total $335,000 , subject to all applicable tax and other withholdings.

      (ii) COBRA and COBRA Premium Payments . Effective as of the Separation Date, as required by the continuation coverage provisions of Section 4980B of the U. S. Internal Revenue Code of 1986, as amended (the “ Code ”), Executive shall be offered the opportunity to elect continuation coverage under the group medical plan(s) of the Company

(“ COBRA coverage ”). The Company shall provide Executive with the appropriate COBRA coverage notice and election form for this purpose. If he elects COBRA coverage, the Company shall pay 100% of Executive’s (and his permitted dependents’) health insurance premiums under COBRA plus any administrative fee, for up to six months following the Separation Date; provided, however , that Executive shall notify the Company within two weeks of any change in his circumstances that would warrant discontinuation of his COBRA coverage and benefits (including but not limited to Executive’s receipt of group medical benefits from any other employer). The existence and duration of Executive’s rights and/or the COBRA rights of any of Executive’s eligible dependents shall be determined in accordance with Section 4980B of the Code.

      (iii) Acceleration of Benefits . Executive shall be entitled to the acceleration of his benefits under the Equity Plans, in each case as set forth on Exhibit A .

      (iv) Legal Fees . The Company shall reimburse Executive for legal fees actually incurred and documented in connection with the negotiation of this Agreement, up to a maximum of $10,000 .

information, observations and data obtained by him concerning the business and affairs of the Company during the course of his employment with the Company, or that may be obtained in

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connection with his assistance and cooperation with the Company as set forth in Section 11 of this Agreement, is the property of the Company. For purposes of this Agreement, “ Confidential Information ” is defined to mean any and all information, in any form or medium, written or oral, concerning or relating to the Company and any of its direct or indirect subsidiaries or joint ventures (whether prepared by the Company or otherwise, and irrespective of the form or means of communication and whether it is labeled or otherwise identified as confidential), including without limitation all oral and written information relating to financial statements, projections, evaluations, plans, programs, customers, suppliers, facilities, equipment and other assets, products, processes, manufacturing, marketing, research and development, market data, trade secrets, know-how, patent applications that have not been published, technology and other confidential information and intellectual property of the Company or any direct or indirect subsidiaries or joint ventures. Executive agrees that he will not, directly, willfully or negligently disclose to any unauthorized person or use for his own account any Confidential Information without the Company’s written consent, unless, and to the extent, that (i) the aforementioned matters become generally known to and available for use by the public other than as a result of the Executive’s acts or omissions to act, or (ii) he is required to do so by order of a court of competent jurisdiction (by subpoena or similar process), in which event Executive shall reasonably cooperate with the Company in connection with any action by the Company to limit or suppress such disclosure. Executive represents, warrants and covenants that at no time prior to or contemporaneous with his execution of this Agreement has he, directly, willfully or negligently disclosed Confidential Information to any unauthorized person or used such Confidential Information for his own purposes or benefit. Executive acknowledges his understanding of his Employee Invention and Confidential Information Agreement executed January 16, 2006 and of the Company's No Harassment/Discrimination Policy confirmed January 16, 2006.

      (b) Non-Solicitation . Executive acknowledges that the employees of the Company and its subsidiaries are a key component to the success of the Company and that the preservation of the employee base of the Company and its subsidiaries is critical to, among other things, the prospects of the Company. Consequently, Executive has agreed to the following non-solicitation and non-hire provisions. Executive agrees that, for a period of two years from the date hereof, he shall not (A) solicit any individual who is an employee of the Company or any of its subsidiaries (as of the date hereof or at any time hereafter) to leave his or her employment with the Company or any of its subsidiaries or (B) hire or otherwise engage any individual who is an employee of the Company or any of its subsidiaries (as of the date hereof or at any time hereafter).

and each of his heirs, executors, administrators, personal representatives, successors and assigns, to the maximum extent permitted by law, hereby acknowledges full and complete satisfaction of and fully and forever releases, acquits and discharges the Company, together with its subsidiaries and affiliates, and each of their respective past and present direct and indirect stockholders, directors, members, partners, officers, employees, attorneys, agents and representatives, and their heirs, executors, administrators, personal representatives, successors and assigns (collectively, the “ Releasees ”), from any and all claims, demands, suits, causes of action, liabilities,

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obligations, judgments, orders, debts, liens, contracts, agreements, covenants and causes of action of every kind and nature, whether known or unknown, suspected or unsuspected, concealed or hidden, vested or contingent, in law or equity, existing by statute, common law, contract or otherwise, which have existed, may exist or do exist, that relate in any way to his employment with the Company, through and including the execution and delivery by Executive of this Agreement (but not including the Company’s performance under this Agreement), including, without limitation, any of the foregoing arising out of or in any way related to or based upon:

      (i) Executive’s application for and employment with the Company, his being an officer or employee of the Company, or the Separation;

      (ii) any and all claims in tort or contract, and any and all claims alleging breach of an express or implied, or oral or written, contract, policy manual or employee handbook;

      (iii) any alleged misrepresentation, defamation, interference with contract, intentional or negligent infliction of emotional distress, sexual harassment, negligence or wrongful discharge; or

      (iv) any federal, state or local statute, ordinance or regulation, including but not limited to the Age Discrimination in Employment Act of 1987, as amended.

      (v) Limitation on Waiver . Notwithstanding the foregoing, the Company acknowledges and agrees that Executive is not waiving his right to file for unemployment (which the Company will not contest), seek indemnification from the Company pursuant to Section 8 hereunder, or file any claim based on events or circumstances occurring after his execution of this Agreement.

      (vi) Mutuality . The Company, for and on behalf of itself and each of its Releasees, to the maximum extent permitted by law, hereby fully and forever releases, acquits and discharges Executive from any and all claims, demands, suits, causes of action, liabilities, obligations, judgments, orders, debts, liens, contracts, agreements, covenants and causes of action of every kind and nature, whether known or unknown, suspected or unsuspected, concealed or hidden, vested or contingent, in law or equity, existing by statute, common law, contract or otherwise, which have existed, may exist or do exist, that relate in any way to his employment with the Company, through and including the execution and delivery by Executive of this Agreement (but not including Executive’s performance under this Agreement), including, without limitation, any of the foregoing arising out of or in any way related to or based upon: (A) the Separation; (B) any and all claims in tort or contract, and any and all claims alleging breach of an express or implied, or oral or written, contract; (C) any alleged misrepresentation, defamation or interference with contract; or, (D) any federal, state or local statute, ordinance or regulation.

      (b) Acknowledgment of Waiver; Disclaimer of Benefits . Executive acknowledges and agrees that he is waiving all rights to sue or obtain equitable, remedial or punitive relief from any or all Releasees of any kind whatsoever, including, without limitation,

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reinstatement, back pay, front pay, attorneys’ fees and any form of injunctive relief.

Notwithstanding the foregoing, Executive further acknowledges that he is not waiving and is not being required to waive any right that cannot be waived by law, including the right to file a charge or participate in an administrative investigation or proceeding; provided, however , that Executive disclaims and waives any right to share or participate in any monetary award resulting from the prosecution of any such charge or investigation.

      (c) Effect of Release and Waiver . Each of the Parties understands and intends that this Section 6 constitutes a general release of all claims except as otherwise provided in Section 6(a) and (b) above, and that no reference therein to a specific form of claim, statute or type of relief is intended to limit the scope of such general release and waiver.

      (d) Waiver of Unknown Claims . Each Party expressly waives all rights afforded by any statute which limits the effect of a release with respect to unknown claims. Each Party understands the significance of his or its release of unknown claims and his or its waiver of statutory protection against a release of unknown claims and accordingly, each Party expressly waives any and all rights and benefits under Section 1542 of the California Civil Code, which states:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

7. Executive’s Representations and Covenants Regarding Actions .

Executive represents, warrants and covenants to each of the Releasees that at no time prior to or contemporaneous with his execution of this Agreement has he knowingly engaged in any wrongful conduct against, on behalf of or as the representative or agent of the Company. Executive further represents, warrants and covenants to each of the Releasees that at no time prior to or contemporaneous with his execution of this Agreement has he filed or caused or knowingly permitted the filing or maintenance, in any state, federal or foreign court, or before any local, state, federal or foreign administrative agency or other tribunal, any charge, claim or action of any kind, nature and character whatsoever (“ Claim ”), known or unknown, suspected or unsuspected, which he may now have or has ever had against the Releasees which is based in whole or in part on any matter referred to in Section 6(a) above; and, subject to the Company’s performance under this Agreement, to the maximum extent permitted by law Executive is prohibited from filing or maintaining, or causing or knowingly permitting the filing or maintaining, of any such Claim in any such forum. Executive hereby grants the Company