Exhibit
10.4


EMPLOYMENT
AGREEMENT


This
Employment Agreement is made as of this 18th day of  July,
2008  between Nicholas F. Galluccio (the "Executive") and Teton
Advisors, Inc. (the "Company").
 
 The
Company desires to employ the Executive and the Executive desires to accept such
employment on the terms and conditions set forth herein.
 
 In
consideration of the promises and covenants set forth herein and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, each intending to be legally bound hereby,
agree as follows:
  1.
                  Employment.
 The
Company hires and employs the Executive, and the Executive agrees to work for
the Company, under the terms and conditions set forth herein.  The
Executive will begin employment with the Company on the date first set forth
above (the "Effective Date").
  2.
                  Duties.
  The Executive shall be employed as President andChief Executive Officer of the Company.  As Chief ExecutiveOfficer, Executive’s duties shall
include, but will be responsible for all duties and services required of
a chief executive of an investment manager.  The Executive shall be on
Boardof
Directors of the Company (the “Board”).
  2.2           The
Executive’s principal place of employment shall be located in Rye, New
York.  If the Executive wishes to relocate, then the new location must
be agreed to and approved by the Board.
  3.
                    Compensation.
 3.1           As
compensation for the services rendered hereunder, the Executive will be paid an
annual draw of   Two Hundred Fifty Thousand Dollars ($250,000),
less applicable payroll and withholding tax deductions, payable monthly in equal
installments and prorated for the period of actual employment, against his
incentive compensation determined in accordance with Section 3.3 below ("Annual
Draw").
  3.2           For
clarification, within each calendar year, if the amount owed to the Executive
pursuant to Section 3.3 for any month is less than the installment of his Annual
Draw for such month, such difference will be used to offset any other amounts
owed to him pursuant to such Section for
any other month which exceed the installment of his Annual Draw for such month;
provided, however, that after each calendaryear -end no debit balance will be carried forward
against his Annual Draw or other compensation for
the following years.
  3.3           In
calculating his compensation for the services rendered hereunder, the Executive
shall receive incentive compensation, less applicable payroll and withholding
tax deductions, payable monthly in equal installments, as follows:
  (a)
      For managing GAMCO Westwood
      SmallCap Equity Fund (“GWSC”) and
      any othermutual funds(the
      “Funds”), the Executive will receive incentive
      compensation equal to twenty percent (20%) of the Net Revenues (as defined
      below) received by the Companywith respect to the Funds.  Net Revenues will be
      calculated based on the investment advisory fees (and shall exclude any
      12b-1 fees) actually received by the
      Company with respect to the fund net of (i) administration,
      marketing and related expenses for the fund (which expenses will be
      charged at thirty basis points (0.30%) of the average net assets of the
      fund), (ii) any payments made by the
      Company or its affiliates to no-transaction-fee (NTF) programs with
      respect to the fund, (iii) any payments or waivers made by the Company to the Funds
      to reduce expenses and (iv) other incremental expenses related to the
      operations of the Funds (such as travel and entertainment,
      additional analyst compensation and benefits, or financial information
      services). The calculation of Net Revenues will be based upon accounting
      practices used by the Company in the normal course of its business in its
      sole discretion.
  (b)
      For attracting new separate accounts
      to the Company, the Executive will be paid a percentage of the investment
      advisory fee revenues received by the Company from such business (up to
      40% for marketing and portfolio management),  in the same manner
      and at the same standard payment rates in effect from time to time as the
      Company pays to its other staff for similar services, consistent with
      applicable laws and regulations, and subject to the discretion of the
      Board.  The Board will decide any issues or disputes concerning
      the Executive’s receipt of compensation pursuant to this
      Section.
  3.4           For the sales of those share classes of the GAMCO
Westwood Funds that carry a 12b-1 fees  and other mutual funds which
may be managed by the Company from time to
time (the “Westwood Funds”), Executive will be compensated at forty percent (40%)
of the 12b-1 fees (provided that the Executive holds appropriate securities
licenses and registrations with a distributor of the GAMCO Westwood Funds)
typically paid todistributors of the Westwood Funds for such
accounts.
  3.5  As
further incentive compensation, the Executive will receive twenty percent (20%)
ownership of the Company, on a fully diluted basis, in the form of a restricted
stock award of Class A Common Shares (the
“Galluccio Shares”) as of the date on which the Company’s securities are
distributed to GAMCO Investors, Inc. (“GAMCO”)
shareholders.  The Executive shall vest in thirty percent (30%)
of the Galluccio Shares on the third
anniversary of the Effective Date and the balance
of the Galluccio Shares on the fifth anniversary of the Effective
Date.  In the event of a change of control of the Company (as
definedbelow) however, said vesting shall
be accelerated and the Executive shall vest in all the Galluccio Shares no later
than immediately prior to the change of control being consummated1.  Accelerated vesting shallalso occur as provided in Section 4.3 of this
Agreement.    Additionalterms and conditions ofthe Galluccio Shares will be set forth in a
Restricted Stock Award Agreement between the Company and the Executive, as
approved by the Board.
  1  For purposes of this Section, Change of Control shall
b e deemed to have occurred in the event
that the Board of Directors of the Company in its sole discretion determines
that a change in control has occurred for the purposes of  the
restricted stock plan.
 1
 Any and
all rights to receive compensation payments, including incentive compensation,
shall not survive the term of the Executive's employment except as specifically
set forth in Section 4 of this Employment Agreement.
  4.
                      Term.
 The term
of this Employment Agreement commences on the Effective Date and continues
through the date that is five (5) years after the Effective Date (the
"Anniversary Date"), unless extended or terminated pursuant to this Section
4.
  This
Employment Agreement shall terminate upon the Executive's death.  If
the Executive fails, due to disability or incapacity, to perform substantially
and continuously his material and essential duties hereunder for more than
forty-five (45) days out of any twelve-month period, the Company may terminate
the Executive's employment on written notice to the extent consistent with
applicable law.  If the Executive dies or his employment is terminated
for disability or incapacity, the Executive or his estate shall be entitled to
receive all compensationset forth in Section 3 earned and accrued
through the date of his death or such termination.  Otherwise, the
Company shall have no further obligations and the Executive shall have no
further rights hereunder.
  In the
event that the Company terminates the Executive's employment on or prior to the
Anniversary Date without cause, other than due to disability or incapacity,the Executive shall be entitled to receive
through the Anniversary Date, monthly installments of his Annual Draw, if any,
as set forth in and payable in accordance with the provisions of Section
3.1and any and all incentive compensation as set
forth in Section 3.3 and 3.4 earned and accrued through the date of
termination.  The Executive shall also immediately vest in twenty
percent (20%) of theGalluccio Shares if
the termination (other than for cause) occurs prior to the third anniversary of
the Effective Date or twenty percent (20%) of the unvested portion of the
Galluccio Shares, if such termination occurs subsequent to the third anniversaryof the
Effective Date.  Otherwise, the Company shall have no further
obligations and the Executive shall have no further rights
hereunder.
 
 4.4In the
event that the Company terminates the Executive's employment for cause, the
Executive shall be entitled to receive his compensation received through the
date of such termination.  Otherwise, the Company shall have no
further obligations and the Executive shall have no further rights
hereunder, other than with respect to the
Galluccio Shares, if any.
 
 4.5           After
the Anniversary Date, unless the Executive and the Company agree in writing to
extend the term of this Employment Agreement, the Executive's employment will be
"at-will" and either the Executive or the Company may terminate such employment
for any reason, and neither party will be required to give cause for termination
to the other.  If the Company terminates the Executive's employment
after the Anniversary Date, with or without Cause, it will pay the Executive his
compensation earned and accrued through the date of his
termination.  Otherwise, the Company shall have no further obligations
and the Executive shall have no further rights hereunder.
  4.6           If
the Executive resigns, the Company shall pay the Executive his compensation
earned and accrued through the date of his termination.  Otherwise,
the Company shall have no further obligations and the Executive shall have no
further rights hereunder, other than those withrespect to the Galluccio Shares, if
any.
   
 4.8           As
used in this Section 4, "cause" means that the Executive (a) commits or enters a
plea of guilty or nolo contendere to a felony, a crime of moral turpitude,
dishonesty, breach of trust or unethical business conduct, or any crime
involving the business of the Company; (b) in the performance of his duties
hereunder or otherwise acts to the material detriment of the Company, engages in
(i) willful misconduct, (ii) willful or gross neglect, (iii) fraud, (iv)
misappropriation, (v) embezzlement, (vi) theft or (vii) a reportable violation
of the securities industry laws, rules or regulations, including the rules and
regulations of any self-regulatory organization as to which the Executive was a
significant contributor; (c) fails to perform his duties in a manner which
constitutes his willful refusal to perform, or gross neglect of, his duties
consistent with the directions of  the Board or with the policies and
practices of the Company, which refusal or neglect remains uncured for a period
of thirty (30) days following notice by the Company to the Executive; (d)
breaches this Agreement in any material respect, which breach remains uncured
(if curable) for a period of thirty (30) days following written notice by the
Company to the Executive; or (e) is adjudicated in any civil suit, or
acknowledges in writing in any agreement or stipulation, to have committed any
theft, embezzlement, fraud, or other intentional act of dishonesty involving any
other person.
  5.
                        Extent
      of Service-Restrictive Covenant.
 5.1           During
the term of this Employment Agreement, except as set forth below, the Executive
shall devote substantially all of his business time, skill, labor and attention
to the affairs of the Company, shall promptly and faithfully do and perform all
services pertaining thereto that are or may hereafter be required of his by the
Company and shall not engage in any activities involving a conflict of interest
with the business or trade relationships of the Company, other than as a wholly
passive investor in publicly traded securities or with the written consent of
the Board.
  Effective Date , or of his employment with the Company,
whichever is earlier
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 6.
                          Benefits.
 The
Executive shall be entitled to participate in all group health and insurance
programs and all other fringe benefit or retirement plans which the Company may,
in its sole and absolute discretion, elect to make available to its senior
executives generally, provided that the Executive meets the qualifications
therefore.
  7.
                          Indemnification.
 The Company agrees to indemnify the Executive in
accordance with the by laws of the Company and any applicable Company Director
and Officer insurance policy.
  8.
                            Disclosure
      of Information.
 The
Executive shall not, except as required by his employment by the Company, either
during the term of employment by the Company or at any time thereafter, publish,
disclose or make available to any person, firm, organization or corporation, or
utilize any confidential or proprietary information concerning the business or
affairs of the Company, its staff, clients, customers or investment company
shareholders, which may have been acquired by the Executive in the course of or
as an incident to such employment, including but not limited to any client,
customer or investment company shareholder list of the Company, whether for the
benefit of the Executive, or to the detriment of the Company, its staff,
clients, customers or investment company shareholders, or
otherwise.  As used in this Section 7, "confidential information"
shall mean any information except that information which is or comes into the
public domain through no fault of the Executive or which the Executive obtains
after the termination of his employment by the Company under this Employment
Agreement from a third party who has the right to disclose such
information.  As used in this Section 7, "Company" shall include Teton
Advisors, Inc., GAMCO Investors, Inc., Gabelli Funds, LLC, GAMCO Asset
Management, Inc., Gabelli Securities, Inc., Gabelli & Company, Inc., Gabelli
Fixed Income L.L.C., Darien Associates L.L.C., Gabelli Fixed Income
Distributors, Inc., Gabelli Fixed Income, Inc., GGCP, Inc. and their parents,
subsidiaries, affiliates, divisions and successors.
  9.
                              Protection
      of the Company's Business.
 While
in the employ of the Company and after the Executive leaves the employ of the
Company for any reason, the Executive agrees that he is prohibited from
knowingly soliciting any client, customer,
investment company shareholder, account, employee or representative of the
Company to become a client, customer, investment company shareholder, account,
employee or representative of any other person, firm, corporation or entity,
with respect to any services or products directly competitive with any services
or products offered, sold, delivered or provided by the Company.  This
restriction shall be in effect during the Executive's employment and for two
years subsequent to the Executive's termination of employment with the
Company.
 
 10.
                                  Remedy
      for Breach.
 Both
parties recognize and acknowledge that the services to be rendered under this
Employment Agreement by the Executive are special, unique, and of an
extraordinary character, and that any breach or violation by the Executive of
any terms and conditions of this Employment Agreement to be performed by him
including, without limitation, Sections 5, 7 and 8 hereof, will cause
irreparable injury to the Company and that money damages alone will not provide
an adequate remedy to the Company.  It is therefore agreed that,
without in any way limiting any other rights, defenses, powers or privileges
which the Company may then have, the Company shall be entitled, if it so elects,
to institute and prosecute proceedings in any court of competent jurisdiction,
either in law or in equity, to enforce the specific performance of the
provisions of this Employment Agreement by the Executive and/or to enjoin the
Executive from acting in breach of violation hereof.
  11.
                Parties
      in Interest.
 This
Employment Agreement shall be binding upon the Executive, his heirs,
administrators, executors and personal representatives and upon the Company and
its successors and assigns.
 
 12.
              Notices.
  All
notices provided for in this Employment Agreement shall be given in writing,
addressed to the parties at the addresses set forth below (or to such other
addresses as may be specified by either party in the manner provided in this
Section 11), and hand delivered, delivered by overnight courier service, or
deposited, certified mail, return receipt requested, postage prepaid, in the
United States mail:
  TO: Teton
Advisors, Inc.
 One Corporate
Center
 Rye, New York
10580
 Attention: General
Counsel
 
 TO:           
  Nicholas F. Galluccio
 [Redacted]
  Notice
shall be deemed given when received if by hand delivery, next day if delivered
by overnight courier service and after three business days if deposited
certified mail, return receipt requested, postage prepaid in the United States
mail.
  13.
                Severability.
 In
the event that any term or condition of this Employment Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other term or
condition hereof and this Employment Agreement shall be interpreted and
construed as if such terms or conditions, to the extent the same shall have been
held to be invalid, illegal or unenforceable, had never been contained
herein.
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 14.
              Entire
      Agreement; Modification.
  This
Employment Agreement contains the entire understanding between the Company and
the Executive regarding the employment relationship between them and there are
no other representations, warranties, covenants or agreements with respect to
such employment relationship which are not contained herein.  This
Employment Agreement supersedes all prior and contemporaneous agreements,
understandings, negotiations and discussions, written or oral, of the parties
hereto, relating to the matters covered by this Employment Agreement; provided,
however, that the Restricted Stock Award Agreement, as may be amended from time
to time, will govern all matters relating to the Executive’s restricted stock
award and will supersede anything contained herein.  This Employment
Agreement may not be modified or amended except by a further written instrument
duly executed by each party.
  15.
              Waiver.
  Any
waiver by either party of a breach of any provision of this Employment Agreement
shall not operate as or be construed to be a waiver of any other breach of such
provision or of any other provision of this Employment Agreement.  The
failure of a party to insist upon strict adherence to any term of this
Employment Agreement on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Employment Agreement.  Any waiver
must be in writing, signed by the party giving such waiver.
  16.
              Captions.
  The
captions hereof are for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.
 
 17.
              Arbitration.
  All
controversies arising between the Company and the Executive, including but not
limited to those involving the construction, performance or breach of this
Employment Agreement, shall be determined by arbitration, except as provided in
Section 9 of this Employment Agreement.  This agreement to arbitrate
includes but is not limited to any employment-related claims the Executive may
have or assert against the Company or its officers, directors, employees,
shareholders or agents under federal, state or local statutes, regulations or
common law including, without limitation, Title VII of the Civil Rights Act of
1964, the Civil Rights Act of 1866, the Civil Rights Act of 1991, the Age
Discrimination in Employment Act of 1967, as amended by the Older Workers
Benefit Protection Act of 1990, the Family and Medical Leave Act of 1993, the
Americans with Disabilities Act of 1990, and the New York State Human Rights
Law.  Arbitration shall be held before the arbitration facility
provided by the Financial Industry Regulatory Authority Inc. (FINRA), in
accordance with its arbitration rules then in force, if
applicable.  Otherwise, arbitration shall be before the arbitration
facility provided by the American Arbitration Association, in accordance with
its Labor Arbitration Rules.  Both parties specifically waive any
rights they have or may have to seek or be awarded punitive damages for any
reason.  Judgment upon the award of the arbitrators may be entered in
any state or federal court having jurisdiction.  As used in this
Section 16, "Company" shall include Teton Advisors, Inc., GAMCO Investors, Inc.,
Gabelli Funds, LLC, GAMCO Asset Management, Inc., Gabelli Securities, Inc.,
Gabelli & Company, Inc., Gabelli Fixed Income L.L.C., Darien Associates
L.L.C., Gabelli Fixed Income Distributors, Inc., Gabelli Fixed Income, Inc.,
GGCP, Inc. and their parents, subsidiaries, affiliates, divisions and
successors.
 
 18.
              Governing
      Law.
  This
Employment Agreement is intended to be performed primarily in the State of New
York and the laws of the State of New York will control any questions concerning
the validity or interpretation of this Employment Agreement.
 
 19.
              Representations
      and Warranties of the Executive.
  The
Executive represents and warrants to the Company that (a) the Executive is under
no contractual or other restriction or obligation which is inconsistent with the
execution of this Employment Agreement, the performance of his duties hereunder
or the other rights of the Company hereunder, and (b) the Executive is under no
disability that would hinder the performance of his duties under this Employment
Agreement.  The Executive shall indemnify and hold harmless the
Company, its directors, officers, shareholders, subsidiaries, other affiliates,
agents, employees and legal representatives from and against any and all losses,
actions, claims, damages, liabilities and expenses (including legal counsel fees
and expenses) arising out of the Executive's breach of these
representations.
 
 IN
WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as
of the day and year first above written.
 
 TETON
ADVISORS, INC.
 
 
 
 By:           _/s/_Douglas R.
Jamieson_________
 Name:
Douglas R. Jamieson
 
 
 
 
 NICHOLAS
F. GALLUCCIO
 
 
 
 _/s/ Nicholas F.
Galluccio____
 
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