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SCHEDULE 14A
(RULE 14a-101)14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
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[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
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GABELLI ASSET MANAGEMENT INC.
- 6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Gabelli Asset Management Inc.
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One Corporate Center
Rye, NY 10580-1434
Tel. (914) 921-3900 [GABELLI ASSET MANAGEMENT INC. LOGO]
Fax (914) 921-5099
www.gabelli.com2
Gabelli Asset Management Letterhead
FROM THE CHAIRMAN
April 21, 200019, 2001
Dear Shareholders:
I cordially invite you to attend our firstsecond Annual Meeting of Shareholders on
Tuesday, May 16, 2000,15, 2001, at the Hyatt RegencyCole Auditorium, Greenwich 1800 EastPublic Library, 101
West Putnam Avenue, Old Greenwich, CT 06870,06830, at 4:30 p.m.10:00 a.m. Our proxy statement,
proxy card and 19992000 Annual Report are enclosed.
At the meeting, we will review our 19992000 financial results and outlook for the
future, and then we will conduct the formal business (the election of
directors). I will be available to answer your questions.
I look forward to seeing you on May 16.15.
Sincerely,
/s/ MARIO J. GABELLIMario Gabelli
Mario J. Gabelli
Chairman of the Board
and Chief Executive Officer
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GABELLI ASSET MANAGEMENT INC.
One Corporate Center
Rye, New YorkONE CORPORATE CENTER
RYE, NEW YORK 10580
------------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be Held on May 16, 2000
------------------------------------------------------------TO BE HELD ON MAY 15, 2001
------------------------
We will hold the Annual Meeting of Shareholders of Gabelli Asset Management
Inc. at the Hyatt RegencyCole Auditorium, Greenwich 1800 EastPublic Library, 101 West Putnam Avenue,
Old
Greenwich, CT 06870,06830, on Tuesday, May 16, 2000,15, 2001, at 4:30 p.m.10:00 a.m. At the meeting, we
will ask shareholders to:
1. Elect a Board of fivesix directors; and
2. Vote on any other business which properly comes before the meeting.
Shareholders of record at the close of business on March 27, 2000,30, 2001, are
entitled to vote at the meeting or any adjournments. Please read the attached
proxy statement carefully and vote your shares promptly whether or not you are
able to attend the meeting.
We encourage all shareholders to attend the meeting.
By Order of the Board of Directors
JAMES E. MCKEE
Vice President, General Counsel
and Secretary
April 21, 200019, 2001
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GABELLI ASSET MANAGEMENT INC.
----------------------------------
PROXY STATEMENT
----------------------------------
ANNUAL MEETING OF SHAREHOLDERS
----------------------------------
MAY 16, 2000
----------15, 2001
------------------------
INTRODUCTION; PROXY VOTING INFORMATION
We are sending you this proxy statement and the accompanying proxy card in
connection with the solicitation of proxies by the Board of Directors of Gabelli
Asset Management Inc. ("Gabelli" or the "Company") for use at our 20002001 Annual
Meeting of Shareholders and at any adjournments. The purpose of the meeting is
to elect fivesix directors and act upon any other matters properly brought to the
meeting. We sent you this proxy statement, the proxy card, and our 19992000 Annual
Report to Shareholders (containing Gabelli's financial statements and other
financial information for the year ended December 31, 1999)2000) on or about April
21, 2000.19, 2001. The Annual Report, however, is not part of the proxy solicitation
materials.
Shareholders of record at the close of business on March 27, 2000,30, 2001, the
record date, are entitled to vote at the annual meeting. On this record date,
Gabelli had outstanding 5,589,2005,489,300 shares of Class A Common Stock, par value
$.001 per share ("Class A Stock"), and 24,000,000 shares of Class B Common
Stock, par value $.001 per share ("Class B Stock").
The presence, in person or by proxy, of a majority of the aggregate voting
power of the shares of Class A Stock and Class B Stock outstanding on March 27, 200030,
2001 shall constitute a quorum for the transaction of business at the annual
meeting. The Class A Stock and Class B Stock vote together as a single class on
all matters. Each share of Class A Stock is entitled to one vote per share and
each share of Class B Stock is entitled to ten votes per share. Directors who
receive a plurality of the votes present or represented at the meeting are
elected to serve until the 20012002 annual meeting or until their successors are
elected and qualify. Any matter other than the election of directors will be
determined by a majority of the votes present or represented at the meeting.
Abstentions and broker non-votes will count for purposes of establishing a
quorum, but will not count as votes cast for the election of directors or on any
other matter and accordingly will have no effect.
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Gabelli will pay for the costs of soliciting proxies and preparing the
meeting materials. We ask securities brokers, custodians, nominees, and
fiduciaries to forward meeting materials to our beneficial shareholders as of
the record date, and we will reimburse them for the reasonable out-of-pocket
expenses they incur. Directors, officers and employees of Gabelli and ourits
subsidiaries may solicit proxies personally or by telephone or telegram, but
will not receive additional compensation.
The Board of Directors has selected Mario J. Gabelli, Robert S. Zuccaro and
James E. McKee to act as proxies. When you sign and return your proxy card, you
appoint Messrs. Gabelli, Zuccaro and McKee as your representatives at the
meeting. If you wish to change your vote before the meeting, deliver a letter
revoking the proxy to Gabelli's Secretary (James E. McKee, c/o Gabelli Asset
Management Inc., One Corporate Center, Rye, NY 10580) or properly submit another
proxy bearing a later date. Even if you vote your proxy before the 5
meeting, you may still attend the meeting, file a notice of revocation for the
previously submitted proxy, and then vote again in person. The last proxy
properly submitted by you is the one that will be counted.
Brokerage firms have the authority under New York Stock Exchange rules to
vote their clients' unvoted shares on certain routine matters, one of which is
the election of directors. If you do not vote your proxy, your brokerage firm
may choose to vote for you or leave your shares unvoted. We urge you to respond
to your brokerage firm to ensure that your proxy voting instructions are
followed.
ELECTION OF DIRECTORS
FiveSix directors serve on our Board of Directors. The Board has renominated
all directors to hold office until the next annual meeting of shareholders and
until their respective successors are elected and qualify.
All properly executed proxies received in time to be tabulated for the
meeting will be voted FOR the election of the nominees named in the following
table, unless otherwise specifically instructed. If any nominee becomes unable
or unwilling to serve between now and the meeting, your proxies will be voted
FOR the election of a replacement designated by the Board of Directors.
THE NOMINEES
The following are brief biographical sketches of the fivesix nominees. Unless
otherwise noted, they have been officers of the organizations named below or of
affiliated organizations as their principal occupations for more than five
years.
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The Board of Directors recommends that you vote FOR all of the following
nominees:
MARIO J. GABELLI, age 57,58, has served as Chairman, Chief Executive Officer,
Chief Investment Officer and a director of the Company and its predecessors
since November 1976. In connection with those responsibilities, he serves as
director or trustee and/or an officer of registered investment companies managed
by the Company and its affiliates ("Gabelli Funds"). Mr. Gabelli serves as
Chairman of Lynch Corporation, a public company engaged in manufacturing;
Chairman and Chief Executive Officer of Lynch Interactive Corporation, a public
company engaged in multimedia and other services; and a director and member of the Office of the Chairman of Spinnaker
Industries, Inc., a public company engaged in manufacturing. In addition, Mr.
Gabelli is the Chairman and Chief Executive Officer of Gabelli Group Capital
Partners, Inc., a private company which owns all of the Class B Stock and makes
investments for its own account; and the Chairman of MJG Associates, Inc., which
acts as a general partner or investment manager of various investment funds and
other accounts. Mr. Gabelli also serves as a Governor of the American Stock
Exchange; Overseer of Columbia University Graduate School of Business; Trustee
of Fairfield University, Roger Williams University, Bruce Museum, Winston
Churchill Foundation and E.L. Wiegand Foundation; Director of the National
Italian American Foundation and the American-Italian Cancer Foundation; and
Chairman, Patron's Committee of Immaculate Conception School.
In addition, Mr. Gabelli is
the Chairman of MJG Associates, Inc., which acts as a general partner or
investment manager of various investment funds and other accounts.
RAYMOND C. AVANSINO, JR., age 57,58, has been a director of the Company since
February 2000. Mr. Avansino has been the Chairman of the Board and Chief
Executive Officer of the E.L. Wiegand Foundation of Reno, Nevada, a Nevada
private charitable trust, since 1982. He is of Counsel to the Nevada law firm of
Avansino, Melarkey and Knobel, a firm he founded in 1973. He served as President
and Chief Operating Officer of Hilton Hotels Corporation from 1993 to 1996, and
was a member of the Nevada Gaming Commission from 1981 to 1984.
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JOHN C. FERRARA, age 49, has been a director of the Company since December
1999. Mr. Ferrara has been the President and Chief FinancialOperating Officer of
Space.com,SPACE.com, an internet
start-up company which offers content, news, entertainment,
information and education about space, since 1999.January 2001, and Chief Financial
Officer of SPACE.com since November 2000. From 1998 to January 1999,2000, he was the
Executive Vice President and Chief Financial Officer for Golden Books Family
Entertainment, Inc., a public company which publishes, licenses and markets
entertainment products and subsequently filed for protection from its creditors
in late February 1999.products. From 1989 to 1997, Mr. Ferrara was the Vice President
and Chief Financial Officer of Renaissance Communications Corporation, a public
company which owned and operated television stations. From 1973 to 1989, he held
various positions at American Express Company, National Broadcasting Company
(NBC) and Deloitte & Touche. Mr. Ferrara is a director of Lynch Interactive
Corporation.
PAUL B. GUENTHER, age 60, has been a director of the Company since August
2000. Mr. Guenther has been Chairman of the New York Philharmonic since 1996 and
Chairman of Fordham University since 1998. From 1988 to 1995, he served as
President of PaineWebber Incorporated. From 1994 until 1995, he also served as
President of PaineWebber Group, Inc., the parent company of PaineWebber
Incorporated. From 1966 until 1988, Mr. Guenther held a variety of other
positions at PaineWebber Incorporated.
EAMON M. KELLY, age 63,64, has been a director of the Company and its
predecessors since 1992. Dr. Kelly is currently serving as a Professor at the
Payson Center for International Development and Technology Transfer as well as
in other departments at Tulane University, New Orleans. From 1982 through July
1998, he served as President and Chief Executive Officer of Tulane University.
From 1974 to 1979, Dr. Kelly served in numerous positions, including
Officer-in-Charge of Program Related Investments at the Ford Foundation, a
philanthropic
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8 organization with initiatives in community and housing
development, communications and public television, resources and environment,
higher and public education, the arts and minority enterprises. Dr. Kelly's
career includes numerous appointments, and most recently, the appointments by
President Clinton in 1995 to the National Science Board (the governing board of
the National Science Foundation) for which he currently serves as Chairman and
in 1994 to the National Security Education Board. Dr. Kelly is a director of
Gabelli Group Capital Partners, Inc.
KARL OTTO POHL, age 70,71, has been a director of the Company since 1998. Mr.
Pohl is a member of the Shareholder Committee of SalSal. Oppenheim Jr.,jr. & Cie., a
private investment bank. Mr. Pohl is a director or trustee of all but one of the
Gabelli Funds and serves as a board member of Zurich Versicherungs-Gesellshaft
(Insurance).Funds. Mr. Pohl is a former President of the Deutsche Bundesbank,
Germany's Central Bank, and was Chairman of its Central Bank Council from 1980
to 1991. He also served as German Governor of the International Monetary Fund
from 1980 to 1991 and as a Board Member to the Bank for International
Settlements. Mr. Pohl also served as Chairman to the European Economic Community
Central Bank Governors from 1990 to 1991. Mr. Pohl served as a director of
Unilever from 1992 to 1998, Royal Dutch Shell from 1992 to 1997, and TrizecHahn
Corp. from 1992 to 2000 and Zurich Versicherungs-Gesellshaft (Insurance) from
1992 to 2000.
THE BOARD OF DIRECTORS AND COMMITTEES
During 1999,2000, there were fivefour meetings of the Board of Directors. The Board
of Directors of Gabelli has an Audit Committee, Compensation Committee and a
Nominating Committee.
The Audit Committee regularly meets with Gabelli's independent accountants
to review whetherensure that satisfactory accounting procedures are being followed and whetherthat
internal accounting controls are adequate, review fees charged by the
independent accountants and recommend the selection of independent accountants
to the
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Board of Directors. Messrs. Avansino, Ferrara and Kelly, each of whom is an
independent director, are the members of the Audit Committee. The Audit
Committee comprised
solely of independent directors, met three timestwice during 1999.2000.
As will be further described in the Report of the Compensation Committee,
this committee establishes the compensation for the chief executive officer and
generally reviews benefits and compensation for executive officers. It also
administers our Stock Award and Incentive Plan and the Annual Performance
Incentive Plan. Messrs. Avansino, Ferrara and Kelly, each of whom is an
independent director, are the members of the Compensation Committee. The
Compensation Committee comprised solely of
independent directors, met three timestwice during 1999.2000.
The Nominating Committee advises the Board of Directors on the selection
and nomination of individuals to serve as directors of Gabelli. Nominations for
director(s) submitted to the committee by shareholders are evaluated according
to our needs and the nominee's knowledge, experience and background. Messrs.
Gabelli and Pohl are the members of the Nominating Committee. The Nominating
Committee met oncetwice in 1999.
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During 1999, each2000.
Each director attended all of the meetings of the Board and the Board
committees of which he was a member (during the period that he served as a
director or committee member).
COMPENSATION OF DIRECTORS
Directors who are also officers or employees of Gabelli receive no
compensation for serving as a director of Gabelli. Directors who are not
officers or employees of Gabelli receive annual cash retainers and meeting fees
as follows:
Board Member ............................................. $20,000
Committee Chair .......................................... $5,000
Attendance in person at Board or Committee Meeting ....... $1,000
Attendance by telephone at Board or Committee Meeting .... $500
Board Member................................................ $20,000
Committee................................................... $ 5,000
Attendance in person at Board or Committee Meeting.......... $ 1,000
Attendance by telephone at Board or Committee Meeting....... $ 500
Directors are also eligible to receive stock options. In February 1999, Mr.
Pohl was granted an option to purchase 10,000 shares of Class A Stock at an
exercise price of $16.275 per share. In February 2000, Messrs. Avansino and
Ferrara were each granted an option to purchase 10,000 shares of Class A Stock
at an exercise price of $16.00 per share. In August 2000, Mr. Guenther was
granted an option to purchase 10,000 shares of Class A Stock at an exercise
price of $23.0625 per share. All of the directors' stock options were granted at
100% of fair market value on the date of grant and have a ten-year term and
become exercisable with respect to 75% of the shares after three years from the
date of grant and with respect to 100% of the shares after four years from the
date of the grant.
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INFORMATION REGARDING EXECUTIVE OFFICERS
Biographical information for Mr. Gabelli appears above. Brief biographical
sketches of the other executive officers of the Company are set forth below.
BRUCE N. ALPERT, age 48,49, has served as Executive Vice President and Chief
Operating Officer of Gabelli Funds, LLC or its predecessor since June 1988. Mr.
Alpert is an officer of all of the Gabelli Funds. Mr. Alpert is also a director
of Gabelli Advisers, Inc. From 1986 until June 1988, he worked at the
InterCapital Division of Dean Witter as Vice President and Treasurer of the
Mutual Fundsmutual funds sponsored by Dean Witter. From 1983 through 1986, he worked at
Smith Barney Harris Upham & Co. as Vice President in the Financial Services
Division and as Vice President and Treasurer of Mutual Fundsthe mutual funds sponsored by
Smith Barney. Mr. Alpert also was an Audit Manager and Specialist at Price
Waterhouse in the Investment Company Industry Services Group from 1975 through
1983. Mr. Alpert is a Certified Public Accountant.
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STEPHEN G. BONDI, age 42, joined the Company in 1982 and has served as
President of Gabelli Securities, Inc. since 1999. From 1997 until 2000, he
served as Executive Vice President - Finance and Administration of the Company
and from 1982 to 1997 as a financial officer in various capacities. Mr. Bondi
also serves as Vice President of certain of the Company's subsidiaries and is a
director of Gabelli & Company. Prior to joining the Company, Mr. Bondi was an
accountant with the accounting firm of Spicer & Oppenheim. He is a Certified
Public Accountant.
DOUGLAS R. JAMIESON, age 45,46, has served as Executive Vice President and
Chief Operating Officer of GAMCO Investors, Inc. (a wholly owned subsidiary of
the Company) since 1986 and as a director of GAMCO Investors, Inc. since 1991.
Mr. Jamieson was an investment analyst with the Gabelli & Company, Inc. from
1981 to 1986.
JAMES E. MCKEE, age 36,37, has served as Vice President, General Counsel and
Secretary of the Company or its predecessor since August 1995 and as Vice
President, General Counsel and Secretary of GAMCO Investors, Inc. since December
1993. Mr. McKee also serves as Secretary of the Company's subsidiaries and most
of the Gabelli Funds. Prior to joining the Company, he was with the Securities
and Exchange Commission in New York as a Branch Chief from 1992 to 1993 and as a
Staff Attorney from 1989 through 1992, where he worked on matters involving
registered investment advisers and investment companies.
ROBERT S. ZUCCARO, age 43,44, has served as Vice President and Chief Financial
Officer of the Company since June 1998. Mr. Zuccaro also serves as a director of
Gabelli & Company, Inc. Prior to joining the Company, he was Vice President and
Treasurer of Cybex International, Inc., an international, publicly held
manufacturer of medical, rehabilitative and fitness products, from 1992 to 1997,
and served as its Corporate Controller from 1984 to 1997. Mr. Zuccaro was
previously with Shearson Lehman Bros. fromFrom 1983 to 1984 and with Ernst & Young
LLC from 1979 to 1983. Mr. Zuccaro is a Certified Public Accountant.
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COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation Table.SUMMARY COMPENSATION TABLE. The following table summarizes the
compensation of certain of our executive officers who received the highest compensation
during 1999:2000:
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
---------------------------------------------------------------------------- ---------------------------------
ALL OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING LTIP
SALARY BONUS COMPENSATION AWARDS OPTIONS PAYOUTS
NAMES AND PRINCIPAL POSITIONS YEAR ($) ($) ($) ($) (#) ($)
- ----------------------------- ---- --- --- --- --- --- ---------- ------- ------------ ---------- ---------- -------
Mario J. Gabelli................................ 1999 Gabelli................... 2000 --(a) - 41,798,552(a)--(b) 45,499,198(c) -- -- --
Chairman of the Board, 1999 --(a) --(b) 41,798,552(c) -- -- --
Chief Executive 1998 (a) - 42,352,271(a)
Officer and 1998 --(a) --(b) 42,352,271(c) -- -- --
Chief Investment Officer
Bruce N. Alpert................................. 1999Alpert.................... 2000 300,000 450,000 18,358(b) - 30,000600,000(d) 11,185(e) -- -- --
Executive Vice President and 1999 300,000 450,000 18,358(e) -- 30,000 --
Chief Operating Officer of 1998 300,000 600,000 63,457(b) - -
Operating Officer of63,457(e) -- -- --
Gabelli Funds, LLC
Stephen G. Bondi................................ 1999 300,000 110,000 1,900(c) - 21,000 -
President of Gabelli Securities, Inc. 1998 300,000 75,000 7,130(c) - - -
Douglas R. Jamieson............................. 1999Jamieson................ 2000 300,000 300,000(d) 1,181,251(e) - 30,000 -300,000(f) 1,889,030(h) -- 3,000 --
Executive Vice President and 1999 300,000 300,000(g) 1,181,251(h) -- 30,000 --
Chief Operating Officer of 1998 300,000 75,000 1,031,420(e) - - -
Operating Officer of1,031,420(h) -- -- --
GAMCO Investors, Inc.
James E. McKee..................... 2000 300,000 300,000(f) 532(i) -- -- --
Vice President, General Counsel 1999 300,000 100,000 703(i) -- 25,000 --
and Secretary 1998 300,000 120,000 7,130(i) -- -- --
Robert S. Zuccaro(f)............................Zuccaro(j)............... 2000 287,500 300,000(f) 532(k) -- -- --
Vice President and 1999 212,500 275,000 703(g) -703(k) -- 50,000 -
Vice President and--
Chief Financial Officer 1998 87,500 75,000 - - --- -- -- --
- ---------------
(a) Mr. Gabelli received no fixed salary. Refer to footnote (c).
(b) Mr. Gabelli received no bonus.
(c) For 2000, represents: (i) $15,720,450 for acting as portfolio manager of
several of the open-end Gabelli Funds; (ii) $5,786,995 for acting as
portfolio manager of the closed-end Gabelli Funds; (iii) $11,610,310 for
acting as portfolio manager and/or attracting and providing client service
to a large number of the Company's separate accounts; (iv) $1,085,214 for
providing other services, including acting as portfolio manager of
partnerships and as a broker; (v) $11,295,697 representing the
incentive-based management fee (which was 10% of the Company's pre-tax
profits in 2000); and (vi) $532 representing a contribution made under the
Company's profit-sharing plan. For 1999, represents (i) $12,976,718 for
acting as portfolio manager of several of the open-end Gabelli Funds; (ii)
$6,223,090 for acting as portfolio manager of several of the closed-end Gabelli Funds;
(iii) $10,035,033 for acting as portfolio manager and/or attracting and
providing client service to a large number of the Company's separate
accounts; (iv) $2,409,943 for providing other services, including acting as
portfolio manager of partnerships and as a broker; (v) $10,153,065
representing the incentive-based management fee (which was 20% of the
Company's pre-tax profits prior to the Company's initial public offering in
February 1999 (the "Offering") and 10% after the Offering); and (vi) $703
representing a contribution made under the Company's profit-sharing plan.
For 1998, represents (i) $10,681,952 for acting as portfolio manager of
several of the open-end Gabelli Funds; (ii) $5,078,132 for acting as
portfolio manager of several of the closed-end Gabelli Funds; (iii) $9,280,798 for
acting as portfolio manager and/or attracting and providing client service
to a large number of the Company's separate accounts; (iv) $3,912,242
representing a special one-time investment banking fee payout; (v)
$1,152,315 for providing other services, including acting as portfolio
manager of partnerships and as a broker; (vi) $12,245,877 representing the
incentive-based management fee (which was 20% of the Company's pre-tax
profits in 1998); and (vii) $955 representing a contribution made under the
Company's profit-sharing plan.
(b)(d) $150,000 of this amount vests on December 31, 2002 and is payable on
January 15, 2003 if Mr. Alpert remains employed by the Company at that
time.
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(e) For 1999,2000, represents incentive-based variable compensation for attracting
and/or providing client service to separate accounts, shareholders of the
Gabelli Funds or investors in other products sponsored by the Company
("Variable Compensation")in the amount of $10,653, and a contribution made
by the Company under its profit-sharing plan of $532. For 1999, represents
Variable Compensation in the amount of $17,655, and a contribution made by
the Company under its profit-sharing plan in the amount of $703. For 1998,
represents Variable Compensation in the amount of $8,471, a contribution
made by the Company under its profit-sharing plan of $955, and the fair
value of a subsidiary stock award worth $54,031.
(c) For 1999, represents Variable Compensation in(f) $100,000 of this amount vests on December 31, 2002 and is payable on
January 15, 2003 if the amount of $1,197, and a
contribution madeindividual remains employed by the Company under its profit-sharing plan in the amountat that
time.
(g) $250,000 of
$703. For 1998, represents a contribution made by the Company under its
profit-sharing plan of $955, and the fair value of a subsidiary stock award
worth $6,175.
(d) Of this amount $250,000 vests on December 31, 2001 and is payable on
January 15, 2002 if Mr. Jamieson remains employed by the Company at that
time. In lieu of interest, Mr. Jamieson will be paid an amount equal to the
appreciation in the market value of $250,000 of the Class A Stock from
January 1, 2000 through December 31, 2000, and money market rates
thereafter until December 31, 2001.
(e)(h) For 2000, represents Variable Compensation in the amount of $1,627,923,
interest on deferred compensation equal to the appreciation in the market
value of $250,000 of the Class A Stock during 2000 in the amount of
$260,575, and a contribution made by the Company under its profit-sharing
plan of $532. For 1999, represents Variable Compensation in the amount of
$1,180,548, and a contribution made by the Company under its profit-sharing
plan in the amount of $703. For 1998, represents Variable Compensation in
the amount of $1,030,465, and a contribution made by the Company under its
profit-sharing plan in the amount of $955.
(f) Mr. Zuccaro joined Gabelli in June 1998.
(g) Represents(i) For 1999 and 2000, represents contributions by the Company under its
profit-sharing plan. For 1998, represents a contribution made by the
Company under its profit-sharing plan of $955, and the fair value of a
subsidiary stock award worth $6,175.
(j) Mr. Zuccaro joined Gabelli in June 1998.
(k) Represents contributions made by the Company under its profit-sharing plan.
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Option Grants Table.OPTION GRANTS TABLE. The following table shows the number of stock options
granted in 19992000 to the executive officers named in the Summary Compensation
Table and other information regarding their grants. Stock options are granted at
100% of fair market value on the date of grant and are generally exercisable
with respect to 75% of the shares on the third anniversary of the grant and with
respect to 100% of the shares on the fourth anniversary of the grant date.
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
NUMBER OF PERCENT OF POTENTIAL REALIZABLE VALUE ATSTOCK PRICE
SECURITIES TOTAL OPTIONS ASSUMED ANNUAL RATES OF STOCK PRICEAPPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE APPRECIATION FOR OPTION TERM
OPTIONOPTIONS EMPLOYEES IN PRICE EXPIRATION -------------------------------------------------
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
- ---- ----------- ------------------------ -------- ---- ------ ----------------- -------- ---------
Mario J. GabelliGabelli........... None --- --- --- --- ----- -- -- -- --
Bruce N. Alpert 30,000 2.64 16.275 2/11/09 366,975 873,600
Stephen G. Bondi 21,000 1.85 16.275 2/11/09 256,883 611,520Alpert............ None -- -- -- -- --
Douglas R. Jamieson 30,000 2.64 16.275Jamieson........ 3,000 1.75 16.00 2/11/09 366,975 873,60015/10 30,192 76,512
James E. McKee............. None -- -- -- -- --
Robert S. Zuccaro 50,000 4.41 16.275 2/11/09 611,625 1,456,000Zuccaro.......... None -- -- -- -- --
Fiscal Year-End Options Table.7
11
FISCAL YEAR-END OPTIONS TABLE. The following table shows the number of
unexercised options for those executive officers named in the Summary
Compensation Table. No options were exercised in 1999 and there were no
"in-the-money" options on December 31, 1999.2000. An "in-the-money" option
would have
beenwas an option for which the option price of the underlying stock was less than
$16.25,$33.19, the closing market price of Gabelli's common stockthe Class A Stock on December 31, 1999.29, 2000.
FISCAL YEAR-END OPTIONS
NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1999
----------------------------------------2000 DECEMBER 31, 2000 ($)
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
Mario J. Gabelli -Gabelli........................... -- None -- --
Bruce N. Alpert -Alpert............................ -- 30,000 Stephen G. Bondi - 21,000-- 507,375
Douglas R. Jamieson - 30,000Jamieson........................ -- 33,000 -- 558,938
James E. McKee............................. -- 25,000 -- 422,813
Robert S. Zuccaro -Zuccaro.......................... -- 50,000 -- 845,625
REPORT OF THE COMPENSATION COMMITTEE
Messrs. Avansino, Ferrara and Kelly, each of whom is an independent
director, are all of the members of the Compensation Committee, but only Mr. Kelly was a member during 1999.Committee. In this report, the
term "we" refers to members of the Committee during 1999 or
currently, depending on the context. We are also all of Gabelli's independent
directors.Compensation Committee. Our report on
executive compensation for 19992000 follows:
We are responsible to the Board of Directors, and ultimately to the
shareholders of Gabelli, for:
- Determining the compensation of the chief executive officer;
- Administering the 1999 Stock Incentive Plan and the Annual Performance
Incentive Plan; and
- Reviewing and approving the compensation policies and general
compensation levels for Gabelli's executive officers.
8
13
We recognize that the investment management and securities industries are
highly competitive and that experienced professionals have significant career
mobility. We believe that the ability to attract, retain and provide appropriate
incentives for the highest quality professional personnel is essential to
maintain Gabelli's competitive position in the investment management and
securities industries, as well as to provide for the long-term success of
Gabelli.
We believe that Gabelli must pay competitive levels of cash compensation
and offer appropriate equity and other incentive programs. These programs must
always be consistent with stockholder interests. We think these programs are
necessary to motivate and retain Gabelli's professional personnel. These
compensation programs are keyed to achieve performance goals that our Committee
and the Board determine.
Executive Officer CompensationEXECUTIVE OFFICER COMPENSATION
The compensation for Gabelli's executive officers (other than for Mario J.
Gabelli ("Mr. Gabelli") whose compensation is described separately below) is
composed of base salary, annual bonus compensation, stock option awards and
incentive-based variable compensation.
Base Salary and Annual Bonus8
12
BASE SALARY AND ANNUAL BONUS
Mr. Gabelli recommends to the Committee the amounts of the base salaries
and annual bonuses for the Company's executive officers, which amounts are
subject to our review and approval. We reviewed the base salaries proposed by
Mr. Gabelli for the executive officers for 2000 in light of the responsibilities
associated with the position held, the individual's overall level of experience,
competitive practices and other subjective factors. The base salaries for all of
the executive officers (other than Mr. Gabelli who receives no base salary) were
set at $300,000 for 2000.2001.
We also reviewed the annual bonuses proposed by Mr. Gabelli for the
executive officers for their services in 19992000 in light of their individual and
business unit performance and other subjective factors. We approved the annual
bonuses reflected in the Summary Compensation Table.
Stock OptionsSTOCK OPTIONS
Gabelli's executive compensation programs also include stock option awards,
which we intended to provide additional incentives to increase shareholder value
and retain qualified individuals. All 19992000 stock option awards were granted with
an exercise price equal to the public offeringmarket price of the Class A Stock netat the time of
the discount payable to the underwritersgrant and become exercisable with respect to 75% of the shares after three
years and with respect to 100% of the shares after four years. Individual award
levels are based upon a subjective evaluation of each individual's overall past
and expected future contribution. There is no specific formula used to determine
option awards for any individual.
Variable CompensationVARIABLE COMPENSATION
To the extent that they have the proper regulatory registrations, all of
Gabelli's staff are eligible to receive incentive-based variable compensation
for attracting and/or providing client service to separate accounts,
shareholders of the Gabelli Funds or investors in other products sponsored by
the Company. Mr. Jamieson, who provides client service to a significant number
of separate accounts managed by Gabelli, received the majority of his total 19992000
compensation from variable compensation payments.
We believe that these variable
compensation payments are not subject to the $1.0 million deductibility limit of
Section 162(m) of the Internal Revenue Code.
9
14
Chief Executive Officer CompensationCHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Gabelli received no base salary and no annual bonus in 1999,2000, and he has
not been awarded any stock options. All of the compensation paid to Mr. Gabelli
in 19992000 was incentive-based variable compensation that was paid in accordance
with Mr. Gabelli's Employment Agreement.
In February 1999, the Company entered into an Employment Agreement with Mr.
Gabelli relating to his service as Chairman of the Board, Chief Executive
Officer, Chief Investment Officer of the Company, and executive for certain
subsidiaries and Portfolio Manager for certain mutual funds and separate
accounts. Under the Employment Agreement, Mr. Gabelli receives, as compensation
for managing or overseeing the management of investment companies and
partnerships, attracting mutual fund accounts, attracting or managing separate
accounts, providing investment banking services, acting as a broker or otherwise
generating revenues for the Company, a percentage of revenues or net profits
relating to or generated by such activities (which revenues or net profits are
substantially derived from assets under management). Such payments are made in a
manner and at rates as agreed to from time to time by Mr. Gabelli and the
Company, which rates have been and generally will be the same as those received
by other professionals in the Company performing similar
9
13
services. With respect to the Company's institutional and retail asset
management, mutual fund advisory and brokerage business, the Company generally
pays out up to 40% of the revenues or net profits to the portfolio managers,
brokers and marketing staff who introduce, service or generate such business,
with payments involving the separate accounts being typically based on revenues
and payments involving the mutual funds being typically based on net profits.
Pursuant to the Employment Agreement, in addition to his revenue or net
profit-based compensation, Mr. Gabelli receives an incentive-based management
fee in the amount of 10% of the aggregate pre-tax profits, if any, of the
Company as computed for financial reporting purposes in accordance with
generally accepted accounting principles (before consideration of this fee or
the $50 million deferred payment described below or any employment taxes
thereon) so long as he is an executive of the Company and devoting the
substantial majority of his working time to its business. This incentive-based
management fee is subject to our review at least annually for compliance with
the terms thereof. Mr. Gabelli has agreed that while he is employed by the
Company or for five years from the consummation of the Offering, whichever is
longer, he will not provide investment management services outside of the
Company, except for certain permitted accounts. Pursuant to the Employment
Agreement, an assignee of Mr. Gabelli will also receive a deferred payment of
$50 million on January 2, 2002, plus interest payable quarterly at an annual
rate of 6%. Because these compensation arrangements were in existence before the
completion of the Offering, the $1.0 million deductibility limit of Section
162(m) is generally not expected to apply to the payments until the first
meeting of the Company's shareholders at which directors will be elected after
December 31, 2002.2003. Thereafter, while no assurance can be given, the Company
believes that it will be able to take steps to allow for the continued
deductibility of these payments pursuant to the Employment Agreement. The
Employment Agreement may not be amended without the approval of this Committee.
COMPENSATION COMMITTEE
Raymond C. Avansino, Jr. (Chairman)
John C. Ferrara
Eamon M. Kelly
10
1514
STOCK PERFORMANCE CHART
We are required by the Securities and Exchange Commission to provide you
with a comparison of the cumulative total return on our Class A Stock as of
December 31, 1999,2000 with that of a broad equity market index and either a
published industry index or a peer group index selected by us. The following
chart compares the return on the Class A Stock with the return on the Russell
2000 Index and an index comprised of public companies with the Standard
Industrial Classification (SIC) Code 6282, Investment Advice. The comparison
assumes that $100 was invested in the Class A Stock at the OfferingCompany's initial
public offering on February 11, 1999 (the "Offering") and in each of the named
indices, which include the reinvestment of dividends, on February 11, 1999.
[COMPARISON OF CUMULATIVE TOTAL RETURN CHART]
GAMI Russell 2000 Index Peer Group Index
2/11/99 $100 $100 $100
3/31/99 $89 $93 $97
6/30/99 $90 $107 $115
9/30/99 $88 $100 $95
12/31/99 $93 $118 $114GRAPH]
Feb. 11, 1999 MarchDec. 31, 1999 June 30, 1999 Sept. 30, 1999 Dec. 31, 19992000
------------- -------------- ------------- -------------- -------------
Gabelli Asset Management Inc. $100 $88.93 $90.36 $88.21 $92.86$ 92.86 $189.65
Russell 2000 Index $100 $93.07 $107.19 $100.07 $118.10 $113.00
Peer Group Index $100 $96.75 $114.75 $95.31 $113.62 $183.37
11
15
CERTAIN OWNERSHIP OF GABELLI'S STOCK
The following table sets forth, as of March 15, 2000,2001, certain information
with respect to all persons known to Gabelli who beneficially own more than 5%
of the Class A Stock or Class B Stock. The table also sets forth information
with respect to stock ownership of the directors, each of the executive officers
named in the Summary Compensation Table, and all directors and executive
officers as a group. The number of shares
11
16 beneficially owned is determined under
rules of the Securities and Exchange Commission, and the information is not
necessarily indicative of beneficial ownership for any other purpose. Under such
rules, beneficial ownership includes any shares over which a person has the sole
or shared voting or investment power and any shares which the person can acquire
within 60 days (e.g., through the exercise of stock options). Except as
otherwise indicated, the shareholders listed in the table have sole voting and
investment power with respect to the shares set forth in the table.
AMOUNT AND
NATURE OF
TITLE OF BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER * TITLE OFOWNER* CLASS OF BENEFICIAL OWNERSHIP PERCENT OF CLASS
- --------------------------- -------------- ----------------------- ----------------------------------------- -------- ---------- ----------
Baron Capital Group, Inc. .................................. Class A 746,500(1) 13.4%
J.P. Morgan & Co. Incorporated Class A 667,250(2) 11.9%770,500(1) 14.0%
Roger Engemann & Associates, Inc. .......................... Class A 450,496(3) 8.1%529,924(2) 9.6%
Mario J. GabelliGabelli............................................ Class A 98,265 1.8%113,265 2.1%
Class B 24,000,000(4) 100.0%24,000,000(3) 100%
Bruce N. AlpertAlpert............................................. Class A 6,000 **
Stephen G. Bondi Class A 1,500 **
Douglas R. JamiesonJamieson......................................... Class A 2,000 **
James E. McKee.............................................. Class A 1,000 **
Robert S. ZuccaroZuccaro........................................... Class A 1,000 **
Raymond C. Avansino, Jr. ................................... Class A 24,000 **84,000(4) 1.5%
John C. FerraraFerrara............................................. Class A 10,000 **
Paul B. Guenther............................................ Class A 10,000 **
Eamon M. KellyKelly.............................................. Class A 1,0004,650 **
Karl Otto Pohl --- --- ---Pohl.............................................. -- -- --
All Directors and Executive Officers as a GroupGroup............. Class A 144,765 2.6%231,915 4.2%
Class B 24,000,000 100.0%100%
*- ---------------
(*) The address of each beneficial owner of more than 5% of the Class A Stock
or Class B Stock is as follows: Baron Capital Group, Inc., 767 Fifth
Avenue, New York, NY 10153; J.P. Morgan & Co. Incorporated, 60 Wall Street, New York, NY
10260; Roger Engemann & Associates, Inc., 600 North
Rosemead Blvd., Pasadena, CA 91107; and Mario J. Gabelli, One Corporate
Center, Rye, NY 10580.
**(**) Represents beneficial ownership of less than 1%.
(1)As reported in an amendment to Schedule 13G, dated February 14, 2000.2001.
According to this filing, Baron Capital Group, Inc. and Ronald Baron
beneficially own 746,500770,500 shares, BAMCO, Inc. beneficially owns 608,000612,000
shares, Baron Capital Management, Inc. beneficially owns 135,500158,500 shares, and
Baron Growth Fund and Baron Small Cap Fund each beneficially own 299,000
shares, and each of the reporting persons has shared voting and dispositive
power with respect to these shares.shares, except that Ronald Baron, Baron Capital
Group, Inc. and Baron Capital Management, Inc. do not have any voting power
over 20,000 shares reported as beneficially owned by them. These reporting
persons disclaim beneficial ownership to the extent these shares are held by
their investment advisory clients and not directly by the reporting persons.
(2)As reported in an amendment to Schedule 13G, dated February 10, 2000.
According to this filing, J.P. Morgan & Co. Incorporated has sole voting power
over 518,600 shares and sole dispositive power over 667,250 shares.
(3)As reported in a Schedule 13G, dated February 9, 2000.January 23, 2001. According to this
filing, Roger Engemann & Associates, Inc. and Pasadena Capital Corporation
have shared voting and dispositive power with respect to these shares.
(4)(3) Owned by Gabelli Group Capital Partners, Inc. ("GGCP") and two of its
subsidiaries. Mr. Gabelli disclaims beneficial ownership of these shares in
excess of his approximately two-thirds ownership interest in GGCP.
(4) 60,000 shares are owned by entities for which Mr. Avansino serves as a
director and officer. Mr. Avansino disclaims beneficial ownership of these
60,000 shares.
12
1716
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
We believe that our directors and executive officers and other shareholders
who may own 10% or more of Gabelli's common stock have complied with the
requirements of Section 16(a) the Securities Exchange Act of 1934 to report
ownership, and transactions which change ownership, on time.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company is a holding company that was newly formed in connection withGabelli Group Capital Partners, Inc. ("GGCP"), formerly known as Gabelli
Funds, Inc. ("GFI"), owns all of the Offering. Prior to the Offering, the Company issued 24 million shares of its Class B Stock representing allapproximately
98% of its then issuedthe combined voting power and outstanding81% of the shares of Common Stock, to Gabelli Funds, Inc. ("GFI") and two of its subsidiaries for
substantially all of the operating assets and liabilities of GFI relating to its
institutional and retail asset management, mutual fund advisory, underwriting
and brokerage business. As a result, GFI, which is approximately two-thirds
owned by Mr. Gabelli, and its subsidiaries owned all of theGabelli's outstanding
common
stock of the Company prior to the consummation of the Offering. Following the
Offering, GFI and its subsidiaries have owned all of the outstanding shares of
the Company's Class B Stock. In June 1999, GFI was renamed "Gabelli Group
Capital Partners, Inc."
Prior to the Offering, the Company and Mr. Gabelli entered into an
Employment Agreement which provides that Mr. Gabelli will receive an
incentive-based management fee of 10% of the aggregate pre-tax profits of the
Company as computed for financial reporting purposes in accordance with
generally accepted accounting principles before consideration of this fee so
long as he is an executive of the Company and devoting the substantial majority
of his working time to the business of the Company. The Employment Agreement
further provides that Mr. Gabelli or his assignee will receive a deferred
payment of $50 million on January 2, 2002, plus interest payable quarterly at an
annual rate of 6%. Historically, up until the Offering, the Company's
predecessor, GFI, was required to pay Mr. Gabelli as part of his total
compensation a management fee equal to 20% of the pre-tax profits of each of the
Company's operating units before consideration of this management fee. The total
management fee paid to Mr. Gabelli by GFI prior to the Offering and by the
Company after the Offering for 1999 was approximately $10,153,065. Mr. Gabelli
or his assignee received interest on the deferred payment in the amount of
$2,652,740 in 1999.stock.
Prior to the Offering, the Company and GFI entered into a Management
Services Agreement, with a one year term and renewable annually, under which the
Company will provide certain services for GFI, including furnishing office space
and equipment, providing insurance coverage, overseeing the administration of
its business and providing personnel to perform certain administrative services.
The Management Services Agreement was renewed in May 2000. Pursuant to the
Management Services Agreement, GGCP paid the Company $177,078$200,000 in 1999.
Effective with the Offering, the Company entered into an agreement with
GFI (the "Tax Indemnification Agreement") to indemnify GFI and the shareholders
of GFI (the "Tax Indemnitees") against certain taxes due and payable by the Tax
Indemnitees on or after the Offering that relate to activities of GFI or certain
of its affiliates in
13
18
respect of periods prior to the Offering ("Taxes"). Generally, when a
corporation owns assets and conducts a business prior to a public offering of
its stock, such corporation continues to be liable for any unpaid taxes relating
to its business operations prior to such offering. However, since the operations
of the Company were conducted by GFI and not the Company prior to the Offering,
the Company is not automatically liable for any unpaid taxes relating to such
operations prior to the Offering. Consequently, the Tax Indemnification
Agreement was agreed to by the Company and GFI to require the Company, and not
GFI or the shareholders of GFI, to bear the cost of Taxes relating to the assets
and operations of the Company prior to the Offering. The Company is required to
make additional payments to offset any taxes payable by a Tax Indemnitee in
respect of payments made pursuant to the Tax Indemnification Agreement. Any
payment of Taxes by the Company will be offset by any tax benefit received by
the Tax Indemnitee. The Tax Indemnification Agreement includes provisions that
permit the Company to control any tax proceeding or contest which might result
in the Company being required to make a payment under the Tax Indemnification
Agreement.
Prior to the Offering, the Company entered into an agreement with Mr.
Gabelli which provided that Mr. Gabelli assign and transfer to the Company,
effective as of the Offering, any and all right, title and interest he has in
the "Gabelli" name as a trademark, service mark or corporate or trade name for
use in connection with investment management services, mutual funds and
securities brokerage services. However, under the agreement, Mr. Gabelli retains
any and all right, title and interest he has or may have in the "Gabelli" name
for use in connection with (i) charitable foundations controlled by Mr. Gabelli
or members of his family or (ii) entities engaged in private investment
activities for Mr. Gabelli or members of his family. In addition, the funds
managed by Mr. Gabelli outside the Company entered into a license agreement with
the Company, effective as of the Offering, permitting them to continue limited
use of the "Gabelli" name under specified circumstances.2000.
As of December 5, 1997, GFI entered into a master lease agreement with
M4E,M(4)E, LLC, which is owned by the childrensons and daughter of Mr. Gabelli, for a 60,000
square foot building, of which approximately 40,000 square feet are currently
subleased to other tenants. The master lease for the building and property,
which is located at 401 Theodore Fremd Avenue, Rye, New York (the "Building"),
expires on April 30, 2013. From December 5, 1997 through December 31, 2002, GFI
has agreed to pay rent equal to $720,000 per year. From January 1, 2003 through
December 31, 2003, the rent will increase to $756,000 per year. From January 1,
2004 through April 30, 2013, the rent will be a minimum of $756,000 per year,
adjusted for inflation. GFI agreed to be responsible under the master lease for
all operating expenses, costs of electricity and other utilities and taxes. As
of February 9, 1999, GFI assigned all of its rights and obligations under the
master lease to the Company.
As of December 5, 1997, GFI subleased to Lynch Corporation, an entity for
which Mario J. Gabelli serves as Chairman and Chief Executive Officer and is an approximately 28%
stockholder, approximately 5,000 square feet in the Building. The sublease has a
five-year term. With the assignment of the master lease, the Company became the
successor as landlord to GFI under this sublease. Lynch Corporation pays rent to
the Company at the rate of $18 per square foot, subject to adjustment for
increases in taxes and other operating 14
19
expenses, plus a minimum payment of $2.50
per square foot for electricity. Lynch Corporation assigned all of its rights
and obligations under the sublease to Lynch Interactive Corporation as of
September 1, 1999.
As of March 1, 2000, the Company entered into a sublease with Lynch
Corporation for approximately 1,152 square feet in the Building. The sublease
iswas for a one-year term.term and was extended on a month-to-month basis. Lynch
Corporation pays rent to the Company at the rate of $25 per square foot, subject
to adjustment for increases in taxes and other operating expenses, plus a
minimum payment of $2.50 per square foot for electricity.
13
17
GAMCO Investors, Inc. ("GAMCO"), a wholly owned subsidiary of the Company,
has entered into agreements to provide advisory and administrative services to
MJG Associates, Inc., which is wholly owned by Mr. Gabelli, and to Gabelli
Securities, Inc. ("GSI"), a majority owned subsidiary of the Company, with
respect to the private investment funds managed by each of them. Pursuant to
such agreements, GSI and MJG Associates, Inc. each paid GAMCO $50,000 and $10,000, respectively,(excluding
reimbursement of expenses) in 1999.2000.
Gabelli Securities International Limited ("Gabelli Securities
International") was formed in 1994 to provide management and investment advisory
services to offshore funds. Marc J. Gabelli, a portfolio manager of a subsidiary of the Company
and the son of Mr. Gabelli, owns 55% of Gabelli Securities International and GSI
owns the remaining 45%.
In 1994, Gabelli International Gold Fund Limited ("GIGFL"), an offshore
investment company investing primarily in securities of issuers with
gold-related activities, was formed and Gabelli Securities International entered
into an agreement to provide management services to GIGFL. GSI in turn entered
into an agreement with Gabelli Securities International to provide investment
advisory services to GIGFL in return for receiving all investment management
fees paid by GIGFL. Pursuant to such agreement, GSI received investment
management fees of $5,930$8,095 in 1999.2000.
In April 1999, Gabelli Global Partners, Ltd., an offshore investment fund,
was incorporated. Gabelli Securities International and Gemini Capital
Management, LLC ("Gemini"), an entity owned by Marc J. Gabelli, were engaged by
the fund as investment advisors as of July 1, 1999. Gabelli Securities
International and Gemini each received half of the incentive allocationfee, approximately
$44,810, paid by the fund to the investment advisors which totaled $333,159 in 1999.2000. The fund paid approximately $23,550 inhalf
of the management fees in 19992000, approximately $105,485, to Gabelli Securities
International which it in turn paid such fees to GSI.
In April 1999, GSI formed Gabelli Global Partners, L.P., an investment
limited partnership for which GSI and Gemini are the general partners. Gemini
received half of the incentive allocationand management fees paid by the partnership to
the general partners in the amount of $295,999$121,200 in 1999.
15
202000.
In December 1999, Gabelli European Partners, Ltd., an offshore investment
fund, was incorporated. Gabelli Securities International was engaged as an
investment advisor by the fund as of January 1, 2000. For services rendered by
GSI, Gabelli Securities International paid GSI all of the incentive and
management fees it received in 2000 from the fund in the amount of $67,291.
Effective January 1, 1999, Gabelli Funds, LLC, a subsidiary of the Company,
entered into an agreement to provide advisory and administration services to
Gemini with respect to the funds it manages. Pursuant to this agreement, Gemini
paid Gabelli Funds, LLC $44,600$5,000 in 1999.2000.
In May 1999, Gabelli & Company, Inc., a subsidiary of the Company, was
retained on a non-exclusive basis by East/West Communications, Inc.
("East/West"), an entity for which Mr. Gabelli served as a director and was a
non-controlling shareholder, to act as a finder to assist East/West in the
realization of the value of its wireless communications licenses. Gabelli &
Company, Inc. introduced East/West to several potential buyers, including
Omnipoint Corporation ("Omnipoint"). In February 2000, East/West merged with
Omnipoint which immediately thereafter concluded a transaction with VoiceStream
Wireless Holding Corporation ("VoiceStream"). As a result, Gabelli & Company,
Inc. received 25,000 shares of Omnipoint stock which shares were immediately
converted into $200,000 in cash and 20,625 shares of VoiceStream stock, which
the Company sold in the first quarter of 2000 for $2,791,456.
14
18
In June 1999, Lynch Telephone Corporation IX, a subsidiary of Lynch
Corporation, agreed to pay Gabelli Securities, Inc.GSI a finder's fee of $100,000 in connection with the
acquisition of a telephone company. This fee is to bewas paid by transferring to GSI in
December 2000 all of the stock of Lynch Capital Corporation, a registered
broker-dealer, which at the time of transfer will have at leasthad $40,000 in cash or cash equivalents.securities.
In 1999,2000, the Company reimbursed GGCP in the amount of $123,566$112,829 for the
GGCP's incremental costs (but not the fixed costs) relating to the Company's use
of an airplane in which GGCP owns a fractional interest.
Prior to the Offering, the Company and Mr. Gabelli entered into an
Employment Agreement which provides, among other things, that Mr. Gabelli or his
asignee will receive a deferred payment of $50 million on January 2, 2002, plus
interest payable quarterly at an annual rate of 6%. Mr. Gabelli or his assignee
received interest on the deferred payment in the amount of $3 million in 2000.
In connection with the acquisition of a limited partnership interest in a
private fund managed by the Company, Mr. Jamieson executed a demand note with
respect to a loan of $350,000, which accrues interest at an annual rate of 7%.
In connection with the purchase of shares of GSI, Mr. Zuccaro and Matthew R.
Gabelli, a Vice President - Trading of the Company and the son of Mr. Gabelli,
executed demand notes with respect to loans of $72,420 and $66,409,
respectively, each of which accrue interest at the rate of 7%.
The Company has an agreement with Mr. Karl Otto Pohl to pay him an annual
retainer fee equal to the difference between $250,000 and the amounts received
by Mr. Pohl directly from the Mutual Funds for his service on the boards of
directors of the Mutual Funds. The Mutual Funds paiddid not pay Mr. Pohl $7,042 in 1999 and
are not expected to pay him any amount
in 2000.
As required by the Company's Code of Ethics, the Company's staff members
are required to maintain their brokerage accounts at Gabelli & Company unless
they receive permission to maintain an outside account. Gabelli & Company offers
all of its staff the opportunity to engage in brokerage transactions at
discounted rates. Accordingly, many of the Company's staff members, including
senior management, have brokerage accounts at Gabelli & Company and have engaged
in securities transactions through it at discounted rates.
REPORT OF THE AUDIT COMMITTEE
Messrs. Avansino, Ferrara and Kelly, each of whom is an independent
director, are the members of the Audit Committee. In this report, the term "we"
refers to the members of the Audit Committee.
The Board of Directors has adopted a written charter for the Audit
Committee. A copy of that charter is included as Appendix A to this proxy
statement. Our job is one of oversight as set forth in our charter. Gabelli's
management is responsible for preparing Gabelli's financial statements and for
maintaining internal controls. The independent auditors are responsible for
auditing the financial statements and expressing an opinion as to whether those
audited financial statements fairly represent the financial position, results of
operations and cash flows of Gabelli in conformity with generally accepted
accounting principles.
We have reviewed and discussed Gabelli's audited 2000 financial statements
with management and with Ernst & Young LLP, Gabelli's independent auditors.
We have discussed with Ernst & Young LLP the matters required by Statement
on Auditing Standards No. 61, Communication with Audit Committees.
15
19
We have received from Ernst & Young LLP the written statements required by
Independence Standards Board Standard No. 1, Independence Discussions with Audit
Committees, and have discussed with Ernst & Young LLP its independence.
Based on the review and discussions referred to above, we have recommended
to the Board of Directors that the audited financial statements be included in
Gabelli's Annual Report on Form 10-K for the year ended December 31, 2000 for
filing with the Securities and Exchange Commission.
AUDIT COMMITTEE
Eamon M. Kelly (Chairman)
Raymond C. Avansino, Jr.
John C. Ferrara
16
2120
INDEPENDENT ACCOUNTANTS
SELECTION OF INDEPENDENT ACCOUNTANTSERNST & YOUNG LLP
In November 1999,2000, the Audit Committee considered and recommended, and
Gabelli's Board of Directors approved, the selection of Ernst & Young LLP to be
our independent accountants for the year ending December 31, 1999.2000. Gabelli has
not selected auditors for the current year, since its normal practice is for the
Audit Committee and the Board to make the selection later in the year. Ernst &
Young LLP has been Gabelli's independent auditors since its inception in 1998.
Representatives of this firm will be present at the meeting. They will have the
opportunity to make a statement and respond to appropriate questions from
shareholders.
ERNST & YOUNG LLP FEES FOR 2000
Audit Fees. Fees billed to Gabelli by Ernst & Young LLP with respect to
the audit of the 2000 financial statements and interim reviews of quarterly
financial statements for 2000 were $274,000.
Financial Information Systems Design and Implementation Fees. No services
were performed and no fees were billed to Gabelli by Ernst & Young LLP in
connection with financial information systems design and implementation projects
for 2000.
All Other Fees. All other fees billed to Gabelli by Ernst & Young LLP with
respect to 2000 were $90,000, which fees were for tax consulting and tax return
preparation.
The Audit Committee considered whether the provision of services described
above under "All Other Fees" is compatible with maintaining Ernst & Young's
independence.
SHAREHOLDER PROPOSALS FOR THE 20012002 ANNUAL MEETING
Qualified shareholders who want to have proposals presented at our 20012002
annual meeting must deliver them to Gabelli by December 22, 2000,20, 2001, in order to be
considered for inclusion in next year's proxy statement and proxy.
OTHER MATTERS
We know of no other matters to be presented to you at the meeting other
than the election of directors. IfAs stated in an earlier section, if other
matters are considered at the meeting, the proxies will vote on these matters in
accordance with their judgment of the best interests of Gabelli.
We will provide a free copy of Gabelli's Annual Report on Form 10-K for the
year ended December 31, 2000. Requests should be in writing and addressed to
Gabelli's Chief Financial Officer (Robert S. Zuccaro Gabelli Asset Management
Inc., One Corporate Center, Rye, NY 10580).
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APPENDIX A
GABELLI ASSET MANAGEMENT INC.
AUDIT COMMITTEE OF BOARD OF DIRECTORS
AUDIT CHARTER
ORGANIZATION
The Board annually will appoint not less than three Directors as members of
the Committee, all of which shall be independent of management and the Company.
Members of the audit committee shall be considered independent if they have no
relationships which may interfere with the exercise of their independence from
management and the Company. Each member of the Committee shall be financially
literate with at least one member having accounting or related financial
management expertise, as such qualifications are interpreted by the Company's
Board of Directors in its business judgement.
STATEMENT OF POLICY
The audit committee shall provide assistance to the directors in fulfilling
their responsibility to the shareholders, potential shareholders, and investment
community relating to corporate accounting, reporting practices of the company,
and the quality and integrity of financial reports of the company. In so doing,
it is the responsibility of the audit committee to maintain free and open
communication between the directors, the independent auditors, the internal
auditors, and the financial management of the company.
RESPONSIBILITIES
In carrying out its responsibilities, the audit committee believes its
policies and procedures should remain flexible, in order to best react to
changing conditions and to ensure to the directors and shareholders that the
corporate accounting and reporting practices of the company are in accordance
with all requirements and are of the highest quality.
In carrying out these responsibilities, the audit committee will:
- Obtain the full board of directors' approval of this Charter and review
and reassess this Charter as conditions dictate (at least annually).
- Review and recommend to the directors the independent auditors to be
selected to audit the financial statements of the company and its
divisions and subsidiaries. The Committee will also review all consulting
services provided by the independent auditors on behalf of management or
the board of directors.
- Review all issues related to any change of the independent auditors and
ensure adequate steps for an orderly transition.
- Review factors that might impair or be perceived to impair the
independence of the independent auditors.
- Have a clear understanding with the independent auditors that they are
ultimately accountable to the board of directors and the audit committee,
as the shareholders' representatives, who have the ultimate authority in
deciding to engage, evaluate, and if appropriate, terminate their
services.
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- Review and concur with management's appointment, termination, or
replacement of any manager of internal audit.
- Meet with the independent auditors and financial management of the
Company to review the scope of the proposed audit and timely quarterly
reviews for the current year and the procedures to be utilized, the
adequacy of the independent auditors' compensation, and at the conclusion
thereof review such audit or review, including any comments or
recommendations of the independent auditors.
- Review with the independent auditors, the company's internal auditor if
any, and financial and accounting management, the adequacy and
effectiveness of the accounting and financial controls of the company,
and elicit any recommendations for the improvement of such internal
controls or particular areas where new or more detailed controls or
procedures are desirable. Particular emphasis should be given to the
adequacy of internal controls to expose any payments, transactions, or
procedures that might be deemed illegal or otherwise improper. Further,
the committee periodically should review company policy statements to
determine their adherence to the code of conduct.
- Review reports received from regulators and other legal and regulatory
matters that may have a material effect on the financial statements or
related company compliance policies.
- Review the internal audit function of the company, if any, including the
independence and authority of its reporting obligations, the proposed
audit plans for the coming year, and the coordination of such plans with
the independent auditors.
- Inquire of management, the internal auditor, if any, and the independent
auditors about significant risks or exposures and assess the steps
management has taken to minimize such risks to the Company.
- Review the quarterly financial statements with financial management and
the independent auditors prior to the filing of the Form 10-Q (or prior
to the press release of results, if possible) to determine that the
independent auditors do not take exception to the disclosure and content
of the financial statements, and discuss any other matters required to be
communicated to the committee by the auditors. The chair of the
committee, or his nominee, may represent the entire committee for
purposes of this review.
- Review the financial statements contained in the annual report to
shareholders with management and the independent auditors to ascertain if
the independent auditors are satisfied with the disclosure and content of
the financial statements to be presented to the shareholders. Review with
financial management and the independent auditors the results of their
timely analysis of significant financial reporting issues and practices,
including changes in, or adoptions of, accounting principles and
disclosure practices, and discuss any other matters required to be
communicated to the committee by the auditors. Also review with financial
management and the independent auditors their judgments about the
quality, not just acceptability, of accounting principles and the clarity
of the financial disclosure practices used or proposed to be used, and
particularly, the degree of aggressiveness or conservatism of the
organization's accounting principles and underlying estimates, and other
significant decisions made in preparing the financial statements.
- Provide sufficient opportunity for the internal auditor, if any, and the
independent auditors to meet separately with the members of the audit
committee without members of management present. Among the items to be
discussed in these meetings are the independent auditors' evaluation of
the company's
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financial, accounting, and auditing personnel, and the cooperation that
the independent auditors received during the course of audit.
- Review accounting and financial human resources and succession planning
within the Company.
- Report the results of the annual audit to the board of directors. If
requested by the board, invite the independent auditors to attend the
full board of directors meeting to assist in reporting the results of the
annual audit or to answer other directors' questions (alternatively, the
other directors, particularly the other independent directors, may be
invited to attend the audit committee meeting during which the results of
the annual audit are reviewed).
- On an annual basis, obtain from the independent auditors a written
communication delineating all their relationships and professional
services as required by Independence Standards Board Standard No. 1,
Independence Discussions with Audit Committees. In addition, review with
the independent auditors the nature and scope of any disclosed
relationships or professional services and take, or recommend that the
board of directors take, appropriate action to ensure the continuing
independence of the auditors.
- Review the report of the audit committee in the annual report to
shareholders and the Annual Report on Form 10-K disclosing whether or not
the committee had reviewed and discussed with management and the
independent auditors, as well as discussed within the committee (without
management or the independent auditors present), the financial statements
and the quality of accounting principles and significant judgments
affecting the financial statements. In addition, disclose the committee's
conclusion on the fairness of presentation of the financial statements in
conformity with GAAP based on those discussions; recommend to the Board
that the audited financial statements be included in the Company's Annual
Report on Form 10-K.
- Submit the minutes of all meetings of the audit committee to, or discuss
the matters discussed at each committee meeting with, the board of
directors.
- Investigate any matter brought to its attention within the scope of its
duties, with the power to retain outside counsel for this purpose if, in
its judgment, that is appropriate.
- Review the Company's disclosure in the proxy statement for its annual
meeting of shareholders that describes that the Committee has satisfied
its responsibilities under this Charter for the prior year. State whether
the committee has (i) reviewed and discussed the audited financial
statements with management; (ii) discussed with the independent auditors
the matters required to be discussed by Statement on Auditing Standards
No. 61, (iii) received from the auditors disclosures regarding the
auditors' independence and discussed with the auditors the auditors'
independence and (iv) recommended to the Board that the audited financial
statements be included in the Company's Annual Report on Form 10-K. In
addition, include a copy of this Charter in the annual report to
shareholders or the proxy statement at least triennially or the year
after any significant amendment to the Charter.
CHAIRPERSON
The Board will appoint a member as Chair of the Committee. In the event of
the Chairperson's absence, the Committee may select another member as
Chairperson.
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MEETINGS
The Committee will determine the date, time and place for its meetings. The
Committee may meet on written or verbal notice from the Chairperson or upon
notice from the independent auditor. Any member of the Board may also call a
special meeting of the Committee by written request and invite other Board
members to attend. The Committee may establish those procedures for the conduct
of its business it deems appropriate, such procedures to be in keeping with
those adopted by the Board. All decisions will be by majority vote. In the event
of a tie, the Chairperson will have the casting vote.
QUORUM
A majority, but not fewer than two, members of the Committee constitute a
quorum for the transaction of business.
DECISIONS
The Committee will report its recommendations and decisions to the Board at
the Board's next regular meeting.
SECRETARY AND MINUTES
The Chairperson of the Committee will appoint a person to act as Secretary
of the Committee. The minutes of the Committee meeting will be in writing and
duly entered in the books of the Corporation.
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PROXY
GABELLI ASSET MANAGEMENT INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS, MAY 16, 2000
(SEE PROXY STATEMENT FOR DISCUSSION OF ITEMS)Proxy Solicited by the Board of Directors
for the Annual Meeting of Shareholders, May 15, 2001
(see Proxy Statement for discussion of items)
The undersigned hereby appoints Mario J. Gabelli, James E. McKee and Robert
S. Zuccaro, and each of them, jointly and severally, as proxies, with power of
substitution, to vote all shares of Gabelli Asset Management Inc. Class A Common
Stock which the undersigned is entitled to vote on all matters which may
properly come before the 20002001 Annual Meeting of Shareholders of Gabelli Asset
Management Inc., or any adjournment thereof.
- ------------------ ---------------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ------------------ ---------------
23
[ X ] PLEASE MARK
VOTES AS IN
THIS EXAMPLE
Please mark
X votes as in this
example
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1.
1. Election of six directors, each for a one-year term.
Nominees: (01) Raymond C. Avansino, Jr., (2) John C. Ferrara, (03) Mario J.
Gabelli, (04) Paul B. Guenther, (05) Eamon M. Kelly and (06) Karl Otto Pohl
- -----------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR ITEM 1.
- -----------------------------------------------------------------------------------------------------
1. Election of five directors, each for a one-year term.
Nominees: (01) Raymond C. Avansino, (02) John C. Ferrara,
(03) Mario J. Gabelli, (04) Eamon M. Kelly and
(05) Karl Otto Pohl
FOR [ ] WITHHOLD [ ] The shares represented by this Proxy Card
ALL FROM ALL
will be voted as specified above, but if no
NOMINEES NOMINEES specification is made they will be voted FOR
Item 1 and at the discretion of the proxies on
any other matter that may properly come before the
meeting.
[ ]
----------------------------------------
For all nominees except as noted above MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE
CHANGES AT LEFT [ ]
NOTE: Please sign exactly as name appears hereon. Joint owners
should each sign. When signing as attorney, executor,
administrator, trustee or guardian, give full name and title as
such.
Please sign, date and return promptly in the accompanying
envelope.
Signature: Date: Signature: Date:
------------------- ------------------ ------------------- ------------------NOMINEES
----------------------------------------------------------
For all nominees except as noted above
Signature:
- ------------------------------------- Date:
- ---------
The shares represented by this Proxy Card will be voted as specified above, but
if no specification is made they will be voted FOR Item 1 and at the discretion
of the proxies on any other matter that may properly come before the meeting.
MARK HERE IF YOU PLAN TO ATTEND THE MEETING
MARK HERE FOR ADDRESS CHANGE AND NOTE CHANGES AT LEFT
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
give full name and title as such.
Please sign, date and return promptly in the accompanying envelope.
Signature:
------------------------------------- Date:
------------