Original GBL Prospectus - Gabelli

GABELLI FUNDS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
restricted stock units, stock awards, dividend equivalents and other stock or cash based awards. A maximum of
1,500,000 shares Class A Common Stock has been reserved for issuance and the Plan provides that the terms
and conditions of each award are to be determined by a committee of the Board of Directors charged with
administering the Plan. Under the Plan, the committee may grant either incentive or nonqualiÑed stock
options with a term not to exceed ten years from the grant date and at an exercise price that the committee
may determine. Options granted under the Plan vest three years from the date of grant and expire after ten
years.
The Company has elected to account for stock options under the intrinsic value method. Under the
intrinsic value method, compensation expense is recognized only if the exercise price of the employee stock
option is less than the market price of the underlying stock on the date of grant. The estimated pro forma
compensation expense attributable to options granted to employees under the Plan is not presented as its
eÅect, if any, is expected to be immaterial.
F-15