Name		Number of Shares Owned				Percent of Class		Additional Information
Daniel B. Steadman			24,022			*		Includes 22,522 shares held jointly with his spouse, over which Mr. Steadman has shared voting and dispositive power.
Henry Hansel			163,012			2.09%		None.
Brian A. Hennessy			293,664			3.76%		Includes (a) 268,353 shares held jointly with his spouse, over which Mr. Hennessy has shared voting and dispositive power, and (b) 12,655 shares held solely by his spouse.
Daniel G. Libarle			70,496			*		Includes 70,496 shares held jointly with his spouse, over which Mr. Libarle has shared voting and dispositive power.
Rodger Offenbach			106,148			1.36%		Includes (a) 90,876 shares held jointly with his spouse, over which Mr. Offenbach has shared voting and dispositive power, and (b) 6,370 shares held solely by his spouse.
Susan W. Pomilia			79,594			1.02%		Includes (a) 14,250 shares held jointly with her spouse, over which Ms. Pomilia has shared voting and dispositive power, and (b) 65,344 shares held solely by her spouse.
Thomas L. Seavey			40,917			*		None.
All directors and executive officers (9 individuals)			3,243,538			41.57%		None.

We encourage you to vote your shares now regardless of whether you plan to attend the annual meeting.

PROPOSAL 1

1:
ELECTION OF DIRECTORS

The board of directors recommends a vote “FOR” the election of each nominee listed below.

At the annual meeting, nineeight directors will be elected to serve forone-year terms or until their respective successors are elected and qualified. The board of directors has nominated, uponAt the recommendation of the nominating committee, our board of directors has nominated each of our nineeight current directors to stand for reelection. Directors will be elected by a plurality of votes cast by shares entitled to vote at the meeting.

Proxies will be voted, if authority to do so is not withheld, for the election as directors of each of the board’s director nominees.

Each director nominee is presently available for election and has consented to being named in this proxy statement and to serve as a director if elected. In the unanticipated event that any director nominee becomes unavailable, the persons voting the accompanying proxy agents may, in their discretion, vote for a substitute.

Our board of directors recommends a vote “FOR” the election of each of its director nominees. Proxies solicited by the board will be so voted unless shareholders specify in their proxies a contrary choice.

The information presented below for our incumbent directors includes information that each director has given us about his or her age, all positions he or she holds, his or her principal occupation and business experience forfollowing biographies describe the past five years, and the names of other companies, some of which are publicly held, of which he or she currently serves as a director or has served as a director during the past five years.

In addition to the information presented below regarding each nominee’s specific experience, qualifications, attributes, and skills of the director nominees that led ourthe board and the nominating committee to the conclusionconclude that he or she should serve as a director,director. In addition, we also believe that all of our director nominees have a reputation for integrity, honesty, and adherence to high ethical standards. They each have demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to the company and our board.

Neil J. Hennessy (age 61)67) has served as chairman of the board president, and chief executive officer of Hennessy Advisors since 1989 and served as a directorpresident of Hennessy Advisors from 1989 to January 2018. Mr. Hennessy also serves as chairman of the board, chief market strategist, president, and portfolio manager of Hennessy Funds Trust (the trust for our mutual funds since 1996.investment funds). He previously served as the chief investment officer of Hennessy Funds Trust from 1996 until 2021. Mr. Hennessy started his financial career in 19811979 as a broker at Paine Webber. He subsequently moved to Hambrecht & Quist and later returned to Paine Webber. From 1987 to 1990, Mr. Hennessy served as a nominated member of the National Association of Securities Dealers, Inc.’s District 1 Business Conduct Committee. From January 19941993 to January 1995, Mr. Hennessy served his elected term as chairman of the District 1 Business Conduct Committee. Mr. Hennessy earned a bachelor of business administration from the University of San Diego. Mr. Hennessy has amassed considerable business acumen in his career. Since founding the company in 1989, he has successfully navigated the company through many economic cycles. His significant experience in managing the company enables him to provide the board with invaluable knowledge and guidance. Mr. Hennessy is the brother of Dr. Brian A. Hennessy.

Teresa M. Nilsen (age 51)57) has served as a director, executive vice president chief financial officer, and secretary of Hennessy Advisors since 1989 and received an additional officer designationJanuary 2018, as the chief operating officer insince October 2010.2010, and as a director and secretary since 1989. From 1989 until January 2018, Ms. Nilsen served as executive vice president and chief financial officer of Hennessy Advisors. Ms. Nilsen is also the executive vice president and treasurer of our mutualinvestment funds. Ms. Nilsen has worked in the securities industry since 1987, and she earned a bachelor of arts in economics from the University of California, Davis. Ms. Nilsen’sNilsen contributes invaluable long‑term knowledge of the Company’s business and operations. Her additional qualifications to serve on our board include her significant financial management, operational, and leadership experience gained during her extensive career in the securities industry.

Daniel B. Steadman (age 61) has served as a director and executive vice president of Hennessy Advisors since 2000 and as the chief compliance officer of Hennessy Advisors since 2010. Mr. Steadman is also the executive vice president and secretary of our mutual funds. Mr. Steadman has been in the banking and financial services industry since 1974, serving as vice president of WestAmerica Bank from 1995 through 2000, vice president of Novato National Bank from its organization in 1984 through 1995, assistant vice president and branch manager of Bank of Marin from 1980 through 1984, and banking services officer of Wells Fargo Bank from 1974 through 1980. Mr. Steadman’s substantial experience in the financial services industry, as well as his significant experience in managing the strategic development of the company, enables him to provide the board with valuable insights and advice.

Henry Hansel (age 69)75) has served as a director of Hennessy Advisors since 2001. He has been president of The Hansel Auto Group, which includes nine automobile dealerships, since 1982. Mr. Hansel served as a director of the Bank of Petaluma from its organization in 1987 until it was sold in 2002. Mr. Hansel earned a bachelor of science degree in economics from the University of Santa Clara. Mr. Hansel’s experience with running a large and economically cyclical business provides him with excellent financial statement and operational knowledge. His corporate business experience, combined with his attentive and thorough service as a director over the years, allows him to provide the board with valuable recommendations and ideas.

Brian A. Hennessy (age 64)70) has served as a director of Hennessy Advisors since 1989 and as a director of our mutualinvestment funds from 1996 to 2001. Dr. Hennessy, now retired, was aself-employed self‑employed dentist for over 20 years. Dr. Hennessy earned a bachelor of science in biology from the University of San Francisco and a D.D.S. from the University of the Pacific. Dr. Hennessy’s qualifications to serve on our board include his considerable experience as a business owner. His many years running his own practice allowed him to navigate many business-related issues, making him a valuable source of knowledge to us. This, combined with his prior service as a director of our mutualinvestment funds, has provided him with a solid understanding of the company and the industry in which it operates. Dr. Hennessy is the brother of our chairman of the board, Neil J. Hennessy.

Daniel G. LibarleLydia Knight-O’Riordan (age 76)59) has served as a director of Hennessy Advisors since 2001. Mr. Libarle is the owner and president of Lace House Linen, Inc. He2021. Ms. Knight-O’Riordan worked for Hathaway Dinwiddie Construction Co. from 1988 until her retirement in 2023. During her career, she served as a directormanager in the Cost Management and chairman of the board of directors for Bank of Petaluma from its organization in 1987 until it was sold in 2002Project Management division, as well as an Assistant Project Manager and served as a director of Greater Bay Bancorp and wasProject Accountant prior to her manager role. Ms. Knight‑O’Riordan is a member of its audit committee from 2003 until its salethe Middletown Rancheria of Pomo Indians of California and was appointed to Wells Fargothe tribe’s Economic Committee in October 2007. In January 2008, Mr. Libarle became2020 after having previously served two terms as Treasurer. She also serves as a directorboard member of the Exchange Bank, where he currently serves onSanta Venetia Swim Club. Ms. Knight‑O’Riordan’s extensive leadership and management experience has given her in‑depth knowledge of the bank’s auditbusiness world and loan committees. Mr. Libarle earned a bachelor of arts in economics fromenables her to provide the University of Oregon and San Jose State University. Mr. Libarle is an effective and knowledgeable member of our board of directors and brings with him years of essential business experience. Mr. Libarle employs his decades of experience on various boards and audit committees in the financial services industry to lead and guide our audit committee. He has extensive knowledge in reading and analyzing financial statements, and his role as a business owner also provides him with the operational knowledge to anticipate and mediate business-related issues.valuable insight.

Rodger OffenbachKiera Newton (age 66)46) has served as a director of Hennessy Advisors since 2001 and served2022. Ms. Newton has worked as a directorForensic Accountant for Gursey | Schneider LLP since January 2020. Prior to that, she was an Assurance Manager at Marcum LLP from 2013 through November 2019, where she was involved in numerous private and public company reviews and audits and supervised the work of our mutual funds from 1996 to 2001. Mr. Offenbach wasothers on the owner of Ray’s Catering and Marin-Sonoma Picnics from 1973 to 2010. Mr. Offenbachaudit team. Ms. Newton earned a bachelor of science in business administrationAccounting from California State University, Sonoma. Mr. Offenbach’s longSaint Mary’s College of California. Her extensive accounting and auditing experience as an employerenables her to lead and businessman has honed his understanding of financial statements and the complex issues that confront businesses. This, combined with his diligent and thoughtful service as a director over the years and his prior service as a director ofguide our mutual funds, has provided him with a solid understanding of the company and the industry in which it operates, enabling him to provide the board with valuable input and oversight.audit committee.

Susan W. Pomilia (age 51)57) has served as a director of Hennessy Advisors since 2014. Ms. Pomilia has worked in the mortgage industry since 1985.for over 30 years. From 1985 to 2007, Ms. Pomilia worked for Residential Mortgage Capital, d/b/a First Security Loan, where she opened thebranches in Larkspur branch. Inand Mill Valley. From 2007 to 2017, she purchasedworked with RPM Mortgage and grew her own branch of RPM mortgage and expanded locationsbusiness to include branches in Mill Valley, Napa, San Rafael, and Benicia.Petaluma. Because of her constant pursuit of better products and service, she aligned her team with Supreme Lending in November 2017. Ms. Pomilia’s experience managing dozens of employees and multiple branches provides her with excellent insight and business perception. This, combined with her exceptional service as the president of Cruisin’ with Susan, a non-profit organization, treasurer of NorthBay California Association of Mortgage Professionals, and the vice president of Pomilia Financial, Inc., givesprovides her awith tremendous understanding of business in general and the financial industry specifically.

Thomas L. Seavey (age 71)77) has served as a director of Hennessy Advisors since 2001. For the majority of Mr. Seavey’s business career he has been involved in the sales and marketing of athletic and leisure products, as well as working with professional athletes. From 1981 to 1993,During the 1980s and 1990s, Mr. Seavey worked for Nike as the vice president of sales, in the Midwest and California, and spent three years atas well as for International Management Group (IMG) as thea vice president of products. In 1980,president. During this time, he also formed his own company, Seavey Corp., now Continental SportsALPS Group, which sells sport and leisure products. Mr. Seavey left Nikeformally managed ALPS Group for over a decade. He is no longer involved in 1993the day-to-day operations of ALPS Group, but continues as an advisor and formally took over the management of Continental Sports Group, which he is still managing today.president. Mr. Seavey earned a bachelor of arts in English and history from Western Michigan University. Mr. Seavey’s experience working for a large corporation, where he led worldwide marketing campaigns, provided him vast knowledge of the business world. His experience has sharpened his financial and operational knowledge, and he brings these assets to our board of directors in a relatable, effective way. This, combined with his diligent and focused service as a director of our company over the years, has provided him with an excellent understanding of the company and the industry in which it operates, making him a valuable resource to our board.

CORPORATE GOVERNANCE

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) requires executive officers, directors, and 10% shareholders to file reports of initial ownership of our common stock (on Form 3) and changes in such ownership (on Form 4) no later than the second business day after the date on which the transaction occurred, unless certain exceptions apply. Most transactions not reported on Form 4 must be reported on Form 5 within 45 days after the end of the company’s fiscal year. Based upon a review of Forms 4 and 5 filed with the Securities and Exchange Commission (the “SEC”) and information provided to us by our directors and officers during fiscal year 2017, we believe all required reports were filed on a timely basis.

Director Attendance

Our board held fourfive regular meetings and two special meetings during fiscal year 2017.2023. All directors attended at least 75% of all meetings of the board and board committees on which they served during fiscal year 2017.2023.

We do not have a formal policy requiring directors

Directors are encouraged to attend the annual meetings of shareholders. However, because the annual meeting generally is held on the same day as a regular board meeting, we anticipate that directors will attend the annual meeting unless, for some reason, they are unable to attend the board meeting on the same date. AllSeven of our eight directors attended the 20172023 annual meeting of shareholders.

Director Independence

The board determined that all of our directorsHenry Hansel, Lydia Knight‑O’Riordan, Kiera Newton, Susan W. Pomilia, and Thomas L. Seavey are independent under NASDAQ rules, except for Neil J. Hennessy, Teresa M. Nilsen, Daniel B. Steadman, and Brian A. Hennessy.Nasdaq rules. The NASDAQNasdaq rules include several objective tests as well as aand one subjective test for determining who is an “independentindependent director.” The subjective test requires that the board affirmatively determine, after reviewing all relevant information, that a director does not have any relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The board has not established categorical standards or guidelines to make this subjective determination, but instead considers all relevant facts and circumstances.

All of our directors other than Neil J. Hennessy, Teresa M. Nilsen, Daniel B. Steadman,

Henry Hansel, Lydia Knight‑O’Riordan, Kiera Newton, Susan W. Pomilia, and Brian A. HennessyThomas L. Seavey all qualified as “independent”independent under the objective tests. The Boardboard then reviewed and discussed additional information provided by the directors and the company with regard to any transactions, relationships, or arrangements that each such director had with the company during the three years prior to the independence determination. Matters reviewed included commercial and charitable transactions, relationships, and arrangements, of which none were deemed byand the board deemed none of such matters to be material. Based on this review, the board made a subjective determination that no relationships exist that impair the independence of such directors.

Board Diversity

The following matrix details the diversity of Directors and Standingthe board of directors as of the date of this proxy statement:

Board Committees

The board of directors has established three standing committees: an audit committee, a compensation committee, and a nominating committee, each of which is described below.committee. Members of these committees are elected annually, generally in the winter. Each committee has a written charter that is approved by the board of directors and reviewed for adequacy on an annual basis. Committee charters are available on our website at www.hennessyadvisors.com.

Audit Committee. The audit committee presently is composed of Daniel G. Libarle (Chairman)comprises Kiera Newton (Chair), Henry Hansel, and Thomas L. Seavey, all of whom are considered independent under NASDAQNasdaq rules. The audit committee met four times during fiscal year 2017.2023. The principal responsibilities and functions of the audit committee include reviewing our internal controls and the integrity of our financial reporting, approving the employment and compensation of and overseeing our independent auditor, and reviewing the quarterly reviews and annual audit with the auditor.

Our board of directors has determined that Daniel G. Libarle,Kiera Newton, who has served as ChairmanChair of our audit committee since 2001,2022, is an audit committee financial expert, as defined in the rules and regulations of the Securities and Exchange Commission (the “SEC”), and is considered independent under SEC and is independent as defined by SEC and NASDAQNasdaq rules. Our board based its determination on the fact that Mr. LibarleMs. Newton has extensive experience evaluating financial statements prepared in accordance with generally accepted accounting principles and has also acquired an understanding of internal controls, procedures for financial reporting, and audit committee functions as the founding chairmana Certified Public Accountant with seven years of the board of Bank of Petalumaexperience in public accounting. Ms. Newton worked as an Audit Associate for Ernst & Young from 19852012 to 2002, a member of the audit committee of the board of directors of Greater Bay Bancorp2013 and subsequently as an Assurance Manager for Marcum LLP from 1999 to 2007, and a director of the Exchange Bank, where he continues to serve on the bank’s audit and loan committees.2013 through 2019.

Compensation Committee. TheDuring fiscal year 2023, the compensation committee presently is composed ofcomprised Thomas L. Seavey (Chairman), Daniel G. Libarle, Rodger Offenbach,(Chair) and Susan W. Pomilia, allboth of whom are considered independent under NASDAQNasdaq rules. The compensation committee met threetwo times during fiscal year 2017.2023. Effective December 6, 2023, the compensation committee comprises Thomas L. Seavey (Chair), Susan W. Pomilia, and Kiera Newton. This committee has the responsibility of approving the compensation arrangements for our executive officers, including annual equity awards, which were approved on September 30, 2017,18, 2023, with a grant date of September 18, 2023, and annual cash bonuses, which were approved on October 9, 2017.September 18, 2023. It also recommends to the board of directors adoption ofwhether to adopt any compensation plans in which our officers and directors are eligible to participate and makes grants of employee stock options and other stock awards under our incentive plan. Our executive officers do not determine their own compensation. However, the chief executive officer,president, after consultation with the company’s other two executive officers, recommends to the compensation committee (1) the amount of base salary, cash bonus, company 401(k) contribution, and equity compensation for the other twoMs. Kathryn R. Fahy, our chief financial officer, and Mr. Steadman, our executive officers, as well asvice president, (2) the amount of histhe chief executive officer’s company 401(k) contribution and equity compensation, and (3) the amount of her own company 401(k) contribution and equity compensation, in each case based on salary surveys and the experience and performance of our executive officers. The compensation committee does not have any arrangements with compensation consultants. As a small company, our compensation committee relies uponon its business judgment in making compensation decisions for our executive officers. The compensation committee is also responsible for reviewing and approving all related party transactions.

Nominating Committee.Committee.TheDuring fiscal year 2023, the nominating committee presently is composed of all directors who are considered independent under NASDAQ rules:comprised Susan W. Pomilia (Chairman)(Chair), Henry Hansel, Daniel G. Libarle, Rodger Offenbach, and Thomas L. Seavey. The nominating committee met once during fiscal year 2017.2023. Effective December 6, 2023, the nominating committee comprises Susan W. Pomilia (Chair), Henry Hansel, Lydia Knight‑O’Riordan, and Thomas L. Seavey. The principal responsibilities and functions of the nominating committee include making recommendations for director nominees to the full board of directors for the next annual meeting of shareholders.shareholders and making recommendations for committee assignments and committee chair designations.

Qualifications for consideration as a director nominee vary according to the particular areas of expertise sought to complement the existing board composition. However, in making its nominations, the nominating committee considers, among other things, an individual’s business experience, industry experience, financial background, breadth of knowledge about issues affecting Hennessy Advisors,the company, time available for meetings and consultation regarding Hennessy Advisors’company matters, and other particular skills and experience possessed by the individual.experience. In considering the diversity of a candidate, the committee considers a variety of factors including, but not limited to, age, gender, and ethnicity. We do not currently employ an executive search firm or pay a fee toretain any other third party to locate qualified candidates for director positions, although we may do so in the future retain athird-party search firm if the nominating committee deems it appropriate. Shareholders may recommend a potential director nominee by following the procedures described below in “Deadlines for Submissions of Proxy Proposals, Proposals for Director Nominations or Other Business, and Recommendations for Potential Director Nominees.”

Leadership Structure

The board currently believes it is in the best interests of the company to combine the positions of chairman and

Neil J. Hennessy serves as both our chief executive officer because this providesand chairman of the board, which the board believes is the most appropriate and effective leadership structure for the board and the company with unifiedat this time. Mr. Hennessy brings over 30 years of strategic leadership experience and direction. In addition, our current chairman and chief executive officer has anin-depth unparalleled knowledge of ourthe company’s business, thatoperations, and risks to his role as chairman. This depth of knowledge enables himMr. Hennessy to effectively set appropriate board agendas and ensure appropriate processes and relationships are established with bothbetween management and the board of directors, as our board works together to oversee our management and affairs. The board has not appointed a lead independent director. The board has determined that its leadership structure is appropriate for the company.

Board Role in Risk Oversight

The board, together with the audit committee, has oversight for our risk management framework,oversees both the investment risk and operational risk components of our risk management framework and is responsible for helping to ensure that our risks are managed in a sound manner. In this regard, theThe directors oversee an enterprise-wide approach to risk management designed to support the achievement of organizational objectives, including strategic objectives, to improve long-term organizational performance and to enhance shareholder value. AIt is a fundamental partaspect of risk management is not only understandingto understand the risks a company faces and whatthe steps management is taking to manage those risks, but also understanding whatto evaluate the appropriate risk level of risk is appropriate for the company. The involvement of the full board in setting our business strategy is a key part of the directors’ assessment of management’s appetite for risk and also a determination of what constitutes an appropriate level of risk for the company.level. The board has determined that its risk oversight is appropriate for the company.

The board has adopted a Code of Ethics for Hennessy Funds Trust and Hennessy Advisors that applies to our directors and employees, the full text of which is available at www.hennessyadvisors.com. Each of our directorsdirector and employeesemployee annually confirms in writing that he or she has reviewed and will fully comply with the Code of Ethics.

Policies and Procedures for Submitting Recommendations for Potential Director Nominees forHedging Transactions

We have not adopted any practice or policy regarding the 2019 Annual Meetingability of Shareholdersour directors or employees (including our executive officers), or any of their designees, to engage in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our common stock.

Clawback Policy

The nominating committee considers recommendations for potential director nominees

During 2023, we adopted a compensation recovery policy designed to comply with the mandatory compensation “clawback” requirements under Nasdaq rules that became effective as of October 2, 2023. Under the policy, in the event of certain accounting restatements, we will be required to recover erroneously received incentive‑based compensation from many sources, including membersour executive officers representing the excess of the board, advisors, and shareholders.amount actually received over the amount that would have been received had the financial statements been correct in the first instance. The nominatingcompensation committee uses the same processhas discretion to evaluate director nominees recommended by shareholders as it does to evaluate director nominees identified by other sources. In order to be a valid submission for recommendationmake certain exceptions to the nominating committee for a potential director nominee,clawback requirements (when permitted by Nasdaq rules) and ultimately determine whether any adjustment will be made.

Insider Trading Policy

Our Code of Ethics prohibits us and our directors, officers, and employees from trading on the formbasis of recommendation must be addressedmaterial non‑public information or communicating material non‑public information to others in violation of applicable law. The Code of Ethics also establishes quarterly quiet periods during which our directors, officers, and employees may not trade in the nominating committee, be received at our principal executive offices no later than August 17, 2018 (which is 120 calendar days prior to the anniversary of the date on which we released this proxy statement to our shareholders), and include all of the same information that our bylaws require for any director nominations proposed to be presented at the annual meeting. The specific information that must be included with a recommendation for a potential director nominee has not changed since we previously disclosed the requirements in our proxy statement for the 2017 annual meeting of shareholders. The mailing envelope should contain a clear notation indicating that the enclosed letter is a “Shareholder Recommendation for Director.” The mailing address for our principal executive offices is 7250 Redwood Boulevard, Suite 200, Novato, California 94945.company’s securities.

Related Party Transactions

Related Party Transactions Policy. Under the company’s written policy approved by the board regarding related party transactions, the compensation committee must review and approve all such transactions. A related party transaction is any transaction that is reportable by the company under paragraph (a) of Item 404 ofRegulation S-K in which the company is or will be a participant, the amount involved exceeds $120,000, and any director, nominee for director, executive officer, or person known to the company to be a beneficial owner of 5% or more of its voting securities, or an immediate family member of any of the foregoing, has or will have a direct or indirect material interest. Pursuant to the company’s related party transactions policy, each executive officer, director, and director nominee must provide written notice of any potential related party transaction to the general counsel. The general counsel, in consultation with company management, then evaluates the potential transaction to determine whether it is a related party transaction. If it is, the general counsel submits the potential transaction to the compensation committee for review. The compensation committee then reviews all material facts of the potential transaction and either approves or disapproves entry into the related party transaction, unless it is determined that approval by the entire compensation committee prior to entrance into the transaction is impracticable under the circumstances, in which case the chairman of the compensation committee is authorized to review and approve the transaction at his discretion. Among other factors it deems appropriate, the compensation committee will take into account whether the related party transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related party’s interest in the transaction in deciding whether to approve or ratify a related party transaction. If a related party transaction will be ongoing, the compensation committee may establish guidelines for company management to follow in its ongoing dealings with the related party. The compensation committee then reviews and assesses those guidelines and compliance therewith on at least an annual basis.

2017 Related Party Transactions. During fiscal year 2017,years 2023 and 2022, there have beenwere no related party transactions of more than $120,000, except as described below.

Alan J. Hennessy, son of Neil J. Hennessy, is employed by the company and serves as vice president of corporate administrationdevelopment and operations of our mutualinvestment funds. HeIn fiscal year 2023, he earned a total of $292,723 in fiscal year 2017,$291,913 from the company, consisting of base salary, cash bonus, and a grant of restricted stock units at a grant date stock price of $15.15$6.79 per share. TheIn fiscal year 2022, he earned a total of $282,250 from the company, consisting of base salary, cash bonus, and a grant of restricted stock units at a grant date stock price of $9.00 per share. All restricted stock units vest at a rate of 25% per year over four years. In addition, in both fiscal years he received other benefits on the same terms available to all other employees of the company, including eligibility for awards of restricted stock units. His compensation is commensurate with his peers’ compensation.

DIRECTOR COMPENSATION

Daniel P. Hennessy, son of Neil J. Hennessy, is employed

The following table sets forth compensation received by the company and serves as assistant vice president and associate analyst of our mutual funds. He earned a total of $154,315each non‑management director in fiscal year 2017, consisting of base salary, cash bonus,2023. Non-management directors received $12,000 per board meeting and a grant$1,500 per committee meeting, and committee chairs received $2,000 per committee meeting. In addition to the fees received for board and committee service, the compensation committee determines the amount of restricted stock units, if any, to award to each non‑management director on an annual basis.

The following table summarizes the total compensation of our executive officers for fiscal years 2017, 2016,Fiscal Years 2023 and 2015.2022 ⁽¹⁾

Grants ofPlan-Based Awards in Fiscal Year 2017

The following table sets forth information regarding grants of plan-based awards granted in fiscal year 2017 to each of our executive officers.

Outstanding Equity Awards at FiscalYear-End 2017

The following table sets forth the outstanding equity awards held by our executive officers on September 30, 2017.

Outstanding Equity Awards at Fiscal Year-End 2017

Outstanding Equity Awards at Fiscal Year End 2023

Options Exercised and Stock Vested in Fiscal Year 2017

The following table sets forth, for each of our executive officers, the number of options exercised by and amount of stock vested in fiscal year 2017.

Potential Payments upon Termination or Change of Control

Under the terms of the restricted stock unit award agreements between the company and each of our executive officers,officer, the employment agreementagreements with Neil J.Mr. Hennessy and Ms. Nilsen, and the bonus agreements with Teresa M.Ms. Nilsen and Daniel B.Mr. Steadman, our executive officers are entitled to certain compensation in the event of a termination of employment or a change of control of the company. The amountmaterial terms of compensation payable to each executive officer upon the occurrence of certain specified events is set forth in the tablessuch agreement are discussed below.

Neil J. Hennessy.HennessyThe following table sets forth potential payments upon the termination of employment of Mr. Hennessy or a change of control of the company.

Employment Agreement

At

We have had an employment agreement with Mr. Hennessy since the time of our initial public offering, we entered into anand such employment agreement with Mr. Hennessy. Most recently, on October 10, 2016, wehas been amended and amended and restated thatseveral times. The employment agreement to provideprovides for Mr. Hennessy’s continued service as the chairman of the board of directors, chief executive officer, and president of the company and chief investment officer and portfolio manager for our mutual funds through February 21, 2019, with automaticone-year one‑year renewals on each January 26 unless either party gives written notice to the other at least 60 days prior to the expiration of thethen-current then‑current term.

Under the terms of his employment agreement, Mr. Hennessy is entitled to (1) an annual base salary of $350,000, which amount may be increased in the board of directors’board’s sole discretion at the start of each calendar year, (2) certain performance-based incentive awards (as described below),Quarterly Bonuses of 6.5% of Adjusted Quarterly Pre-Tax Profit, and (3) participate in our benefit plans. In the event that (A) Mr. Hennessy’s employment is terminated by the company without cause or (B) Mr. Hennessy terminates his employment with the company for good reason, Mr. Hennessy is entitled to receive alump-sum payment within 30 days of the end of the quarterseverance payable in which the termination date occurs24 equal monthly installments (except to the extent payment is required to be delayed pursuant to Section 409A of the Code) equal to the sum of (i) (A)(x) one year’s full base salary and an average annual bonus for the three most recent fiscal years prior to the termination of employment multiplied by (B)(y) two and (ii) apro-rated pro‑rated Quarterly Bonus for the quarter in which the termination occurs. In addition, under the foregoing circumstances, Mr. Hennessy is also entitled to receive payment of any previously earned and deferred Quarterly Bonus in the reserve account following the end of the fiscal year in which his employment terminates. In the event Mr. Hennessy is terminated for cause or terminates his employment with the company without good reason, no severance will beis payable.

If the employment agreement terminates as a result of death or disability, Mr. Hennessy is entitled to all bonuses earned or accrued as of the date of his termination. Furthermore, in the case of disability, Mr. Hennessy is also entitled to continue receiving his base salary and benefits for three months or until the date he begins receiving benefits under a disability plan or policy, but in no event for longer than three months.whichever is soonest.

In the event of a sale, transfer, or other disposition of all or substantially all of our assets or business, whether by merger, consolidation, or otherwise, we may assign the employment agreement and its rights, provided that the successor assumes all of our obligations under the employment agreement.

If any payment or benefit under the employment agreement and any other agreement, plan, or arrangement would constitute an excess parachute payment under Section 280G of the Code, then Mr. Hennessy willwould receive either the full amount of such payments and benefits or a lesser amount such that no portion of the payments and benefits willwould be subject to the excise tax, whichever would result in a greaterafter-tax after‑tax benefit to Mr. Hennessy.

The employment agreement defines the terms listed below as follows:

Cause would exist

●

Cause exists if Mr. Hennessy:

●

is convicted of, or enters a plea of nolo contendere to, a felony (other than a traffic‑related offense) under any state, federal, or local law or any felony involving the company, where conviction includes any final disposition of the charge that does not result in the charges being completely dismissed or Mr. Hennessy’s being completely acquitted;

●

materially breaches (1) the employment agreement or (2) the company’s policies and procedures, which breach is not cured, if capable of being cured, after written notice within 30 days of the date notice of such breach is received by Mr. Hennessy; or

●

engages in willful or gross misconduct or willful or gross negligence in performing his duties, or fraud, misappropriation, or embezzlement.

●

Good reason means:

●

the assignment to Mr. Hennessy of duties materially inconsistent with his position, authority, duties, or responsibilities as of the date of the employment agreement; or

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is convicted of, or enters a plea of nolo contendere to, a felony (other than a traffic related offense) under any state, federal, or local law or any felony involving the company, where conviction includes any final disposition of the charge that does not result in the charges being completely dismissed or Mr. Hennessy’s being completely acquitted;

materially breaches (1) the employment agreement or (2) the company’s policies and procedures, which breach is not cured, if capable of being cured, after written notice within 30 days of the date notice of such breach is received by Mr. Hennessy; or

●

any action or omission that results in a material diminution of the position, authority, duties, or responsibilities of Mr. Hennessy as of the date of the employment agreement;

 

engages in willful or gross misconduct or willful or gross negligence in performing his duties, or fraud, misappropriation, or embezzlement.

●

a material reduction in Mr. Hennessy’s annual base salary (other than a reduction that applies generally to the Company’s senior management);

 

Good reason means:

●

the relocation, without Mr. Hennessy’s prior written consent, of his principal place of employment to a location more than 50 miles away (measured in the shortest driving distance) from his principal place of employment on the date of the employment agreement; or

 

the assignment to Mr. Hennessy of duties materially inconsistent with his position, authority, duties, or responsibilities as of October 10, 2016; or

●

the failure by the Company to have an acquirer of all or substantially all of the Company’s assets assume Mr. Hennessy’s employment agreement;

 

any action or omission that results in a material diminution of the position, authority, duties, or responsibilities of Mr. Hennessy as of October 10, 2016;

a material reduction in Mr. Hennessy’s annual base salary (other than a reduction that applies generally to the Company’s senior management);

the relocation, without Mr. Hennessy’s prior written consent, of his principal place of employment to a location more than 50 miles away (measured in the shortest driving distance) from his principal place of employment on October 10, 2016;

the failure by the Company to have an acquirer of all or substantially all of the Company’s assets assume Mr. Hennessy’s employment agreement;

provided, in any case, that Mr. Hennessy (1) provides notice to the company of the existence of the condition constituting good reason within 90 days of its initial existence and (2) allows the company 30 days to remedy the condition.

 

Disability means a physical or mental disability or infirmity that prevents Mr. Hennessy from performing substantially the duties assigned to him (based upon such competent medical evidence as shall be presented to the company by any physician or group of physicians or other competent medical experts employed by the company) for a continuous period of more than 180 days.

●

Disability means a physical or mental disability or infirmity that prevents Mr. Hennessy from performing substantially the duties assigned to him (based on such competent medical evidence as shall be presented to the company by any physician or group of physicians or other competent medical experts employed by the company) for a continuous period of more than 180 days.

Restricted Stock Unit Award Agreements

The restricted stock unit award agreements between the company and each of our executive officersofficer provide that all restricted stock units held by an executive officer will immediately vest in full (1) if the executive officer’s employment terminates as a result of death, disability, or retirement at a time when the company would not be able to terminate the executive officer for cause or (2) upon a change of control of the company.

The Amended and Restated 2013 Omnibus Incentive Plan, under which the restricted stock unit award agreements arewere issued for the awards held by our executive officers in fiscal year 2023, defines the terms listed below as follows:

 

Disability, with respect to restricted stock unit awards, is defined to mean,

●

Disability, with respect to restricted stock unit awards, means, except as otherwise determined by the compensation committee and set forth in an award agreement, the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of at least 12 months, as determined by the compensation committee.

●

Retirement means, except as otherwise determined by the compensation committee and set forth in an award agreement, termination of employment with the company and its affiliates (for other than cause) on a date the participant is then eligible to receive immediate early or normal retirement benefits under the provisions of any of the company’s or its affiliate’s defined benefit pension plans, or if the participant is not covered under any such plan, on or after attainment of age 55 and completion of 10 years of continuous service with the company and its affiliates or on or after attainment of age 65 and completion of five years of continuous service with the company and its affiliates, where “cause” means (1) if the participant is subject to an employment agreement with the company or an affiliate that contains a definition of “cause”, such definition, or (2) otherwise, except as otherwise determined by the compensation committee and set forth in an award agreement, any of the following as determined by the compensation committee: (A) violation of the provisions of any employment agreement, non‑competition agreement, confidentiality agreement, or similar agreement with the company or an affiliate, or the company’s or an affiliate’s code of ethics, as then in effect; (B) conduct rising to the level of gross negligence or willful misconduct in the course of employment with the company or an affiliate; (C) commission of an act of dishonesty or disloyalty involving the company or an affiliate; (D) violation of any federal, state or local law in connection with the participant’s employment or service; or (E) breach of any fiduciary duty to the company or an affiliate.

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Retirement means, except as otherwise determined by the compensation committee and set forth in an award agreement, termination of employment with the company and its affiliates (for other than cause) on a date the participant is then eligible to receive immediate early or normal retirement benefits under the provisions of any of the company’s or its affiliate’s defined benefit pension plans, or if the participant is not covered under any such plan, on or after attainment of age 55 and completion of 10 years of continuous service with the company and its affiliates or on or after attainment of age 65 and completion of five years of continuous service with the company and its affiliates, where “cause” means (1) if the participant is subject to an employment agreement with the company or an affiliate that contains a definition of “cause”, such definition, or (2) otherwise, except as otherwise determined by the compensation committee and set forth in an award agreement, any of the following as determined by the compensation committee: (A) violation of the provisions of any employment agreement,non-competition agreement, confidentiality agreement, or similar agreement with the company or an affiliate, or the company’s or an affiliate’s code of ethics, as then in effect; (B) conduct rising to the level of gross negligence or willful misconduct in the course of employment with the company or an affiliate; (C) commission of an act of dishonesty or disloyalty involving the company or an affiliate; (D) violation of any federal, state or local law in connection with the participant’s employment or service; or (E) breach of any fiduciary duty to the company or an affiliate.

●

A change of control is the occurrence of one or more of the following events:

 

A change of control is the occurrence of one or more of the following events:

●

an acquisition, in any one transaction or series of transactions, after which any individual, entity, or group has beneficial ownership of 50% or more of either the then‑outstanding shares of our common stock or the combined voting power of our then‑outstanding voting securities, but excluding an acquisition (1) by us or any of our employee benefit plans (or related trusts), (2) by Neil J. Hennessy or any affiliate, or (3) by any corporation which, following the acquisition, is beneficially owned, directly or indirectly, in substantially the same proportions, by the beneficial owners of the common stock and voting securities of the company immediately prior to such acquisition; or

 

an acquisition, in any one transaction or series of transactions, after which any individual, entity or group has beneficial ownership of 50% or more of either the then outstanding shares of our common stock or the combined voting power of our then outstanding voting securities, but excluding an acquisition (1) by us or any of our employee benefit plans (or related trusts), (2) by Neil J. Hennessy or any affiliate, or (3) by any corporation which, following the acquisition, is beneficially owned, directly or indirectly, in substantially the same proportions, by the beneficial owners of the common stock and voting securities of the company immediately prior to such acquisition; or

●

50% or more of the members of our board of directors (1) are not continuing directors, or (2) are nominated or elected by the same beneficial owner or are elected or appointed in connection with an acquisition of the company; or

 

50% or more of the members of our board of directors (1) are not continuing directors, or (2) are nominated or elected by the same beneficial owner or are elected or appointed in connection with an acquisition of the company; or

the (1) consummation of a reorganization, merger, share exchange, consolidation or similar transaction, with respect to which the beneficial owners of the company immediately prior to such transaction do not, following such transaction, beneficially own more than 50% of the then

●

the (1) consummation of a reorganization, merger, share exchange, consolidation, or similar transaction, with respect to which the beneficial owners of the company immediately prior to such transaction do not, following such transaction, beneficially own more than 50% of the then‑outstanding shares of common stock and voting securities of the corporation resulting from the transaction, (2) consummation of the sale or other disposition of all or substantially all of the assets of the company, or (3) approval by the shareholders of the company of a complete liquidation or dissolution of the company.

Teresa M. Nilsen

Employment Agreement

On January 26, 2018, we entered into an employment agreement with Ms. Nilsen in connection with her appointment as president of the Company. The agreement provides for automatic one‑year renewals on each January 26 unless either party gives written notice to the other at least 60 days prior to the expiration of the then‑current term.

Under the terms of her employment agreement, Ms. Nilsen is entitled to (1) an annual base salary of $325,000, which amount may be increased in the board’s sole discretion at the start of each calendar year, (2) Quarterly Bonuses of 3.5% of Adjusted Quarterly Pre-Tax Profit, and (3) participate in our benefit plans. In the event that (A) Ms. Nilsen’s employment is terminated by the company without cause or (B) Ms. Nilsen terminates her employment with the company for good reason, Ms. Nilsen is entitled to receive severance payable in 24 equal monthly installments (except to the extent payment is required to be delayed pursuant to Section 409A of the Code) equal to the sum of (i) (x) one year’s full base salary and an average annual bonus for the three most recent fiscal years prior to the termination of employment multiplied by (y) two and (ii) a pro‑rated Quarterly Bonus for the quarter in which the termination occurs. In addition, under the foregoing circumstances, Ms. Nilsen is also entitled to receive payment of any previously earned and deferred Quarterly Bonus in the reserve account following the end of the fiscal year in which her employment terminates. In the event Ms. Nilsen is terminated without cause or resigns with good reason in connection with a change of control, Ms. Nilsen’s severance payment pursuant to the employment agreement is reduced by the amount of any cash portion of the benefits paid to Ms. Nilsen upon such change of control pursuant to the bonus agreement described below or any amendment, restatement, or replacement thereof. In the event Ms. Nilsen is terminated for cause or terminates her employment with the company without good reason, no severance is payable.

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If the employment agreement terminates as a result of death or disability, Ms. Nilsen is entitled to all bonuses earned or accrued as of the date of her termination. Furthermore, in the case of disability, Ms. Nilsen is also entitled to continue receiving her base salary and benefits for three months or until the date she begins receiving benefits under a disability plan or policy, whichever is soonest.

In the event of a sale, transfer, or other disposition of all or substantially all of our assets or business, whether by merger, consolidation, or otherwise, we may assign the assetsemployment agreement and its rights, provided that the successor assumes all of our obligations under the employment agreement.

If any payment or benefit under the employment agreement and any other agreement, plan, or arrangement would constitute an excess parachute payment under Section 280G of the companyCode, then Ms. Nilsen would receive either the full amount of such payments and benefits or (3) approval by the shareholdersa lesser amount such that no portion of the company ofpayments and benefits would be subject to the excise tax, whichever would result in a complete liquidation or dissolution of the company.

Teresa M. Nilsen.The following table sets forth potential payments upon a termination of employment ofgreater after‑tax benefit to Ms. Nilsen or change of control of the company.Nilsen.

 

						Resignation by
		Resignation by				Executive				Without Cause				For Cause
		Executive for				Without Good				Termination by				Termination by												Change of
		Good Reason				Reason				the Company				the Company				Death				Disability				Control
Teresa M. Nilsen
Bonus		$	—			$	—			$	—			$	—			$	—			$	—			$	2,325,000
Restricted Stock Units (1)		$	—			$	—			$	—			$	—			$	686,115			$	686,115			$	686,115
Total		$	—			$	—			$	—			$	—			$	686,115			$	686,115			$	3,011,115	(2)

The employment agreement defines “cause” and “good reason” the same as in Mr. Hennessy’s employment agreement, which is described above under the description of payments to Mr. Hennessy.

 

(1)	The values in this row are based on the closing price of our common stock on September 30, 2017, which was $15.44.

(2)	If applicable, the total amount payable could be reduced to an amount that is $1.00 less than the amount that would constitute an “excess parachute payment” under Section 280G of the Internal Revenue Code of 1986, as amended.

Bonus Agreement

We also have a bonus agreement with Ms. Nilsen that provides for aone-time one‑time cash bonus within 15 days of a change of control of the company equal to the greater of the following:

(1) $750,000;$1,000,000; or

(2) the sum of (A) 150% of the total base salary (before deductions) paid to Ms. Nilsen for the most recent fiscal year ended prior to the change of control, (B) 150% of the prior year’s bonus, and (C) a pro rata portion of the prior year’s bonus, provided at least such amount has been accrued by us as a bonus for Ms. Nilsen in the fiscal year during which the change of control occurs.

If the bonus payable upon a change of control, together with any other payments or benefits received or to be received by Ms. Nilsen from the company or any successor thereto in the change of control transaction, would constitute an excess parachute payment under Section 280G of the Code, then Ms. Nilsen willwould receive either the full amount of such payments and benefits or a lesser amount such that no portion of the payments and benefits willwould be subject to the excise tax, whichever would result in a greaterafter-tax after‑tax benefit to Ms. Nilsen.

A change of control is defined in the bonus agreement the same as in the restricted stock award agreements, which is described above under the description of payments to Mr. Hennessy.

Restricted Stock Unit Award Agreements

The restricted stock unit award agreements, between the company and each of our executive officers provide that all restricted stock units held by an executive officer will immediately vest in full (1) if the executive officer’s employment terminates as a result of death, disability, or retirement at a time when the company would not be able to terminate the executive officer for cause or (2) upon a change of control of the company.

The definitions of change of control, disability, and retirement under the Amended and Restated 2013 Omnibus Incentive Plan, under which the restricted stock unit award agreements are issued, are described above under the description of payments to Mr. Hennessy.

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Restricted Stock Unit Award Agreements

We also have restricted stock unit award agreements with Ms. Nilsen on the same terms as the restricted stock unit award agreements with Mr. Hennessy, which are described above under the description of payments to Mr. Hennessy.

Kathryn R. Fahy

Restricted Stock Unit Award Agreements

We have restricted stock unit award agreements with Ms. Fahy on the same terms as the restricted stock unit award agreements with Mr. Hennessy, which are described above under the description of payments to Mr. Hennessy.

Daniel B. Steadman.The following table sets forth potential payments upon a termination of employment of Mr. Steadman or change of control of the company.

 

						Resignation by
		Resignation by				Executive				Without Cause				For Cause
		Executive for				Without Good				Termination by				Termination by												Change of
		Good Reason				Reason				the Company				the Company				Death				Disability				Control
Daniel B. Steadman
Bonus		$	—			$	—			$	—			$	—			$	—			$	—			$	1,075,000
Restricted Stock Units (1)		$	686,115			$	686,115			$	686,115			$	—			$	686,115			$	686,115			$	686,115
Total		$	686,115			$	686,115			$	686,115			$	—			$	686,115			$	686,115			$	1,761,115	(2)

(1)	The values in this row are based on the closing price of our common stock on September 30, 2017, which was $15.44.

(2)	If applicable, the total amount payable could be reduced to an amount that is $1.00 less than the amount that would constitute an “excess parachute payment” under Section 280G of the Internal Revenue Code of 1986, as amended.

Bonus Agreement

We have a bonus agreement with Mr. Steadman that provides for aone-time one‑time cash bonus within 15 days of a change of control of the company equal to the greater of the following:

(1) $500,000; or

(2) the sum of (A) 100% of the total base salary (before deductions) paid to Mr. Steadman for the most recent fiscal year ended prior to the change of control, (B) 100% of the prior year’s bonus, and (C) a pro rata portion of the prior year’s bonus, provided at least such amount has been accrued by us as a bonus for Mr. Steadman in the fiscal year during which the change of control occurs.

If the bonus payable upon a change of control, together with any other payments or benefits received or to be received by Mr. Steadman from the company or any successor thereto in the change of control transaction, would constitute an excess parachute payment under Section 280G

The remainder of the Code, then Mr. Steadman will receive either the full amountterms of such payments and benefits or a lesser amount such that no portion of the payments and benefits will be subject to the excise tax, whichever would result in a greaterafter-tax benefit to Mr. Steadman.

A change of control is defined in the bonus agreement with Mr. Steadman are the same as in the restricted stock award agreements,terms of the bonus agreement with Ms. Nilsen, which isare described above under the description of payments to Mr. Hennessy.Ms. Nilsen.

Restricted Stock Unit Award Agreements

The

We also have restricted stock unit award agreements betweenwith Mr. Steadman on the company and each of our executive officers provide that all restricted stock units held by an executive officer will immediately vest in full (1) if the executive officer’s employment terminatessame terms as a result of death, disability, or retirement at a time when the company would not be able to terminate the executive officer for cause or (2) upon a change of control of the company.

The definitions of change of control, disability, and retirement under the Amended and Restated 2013 Omnibus Incentive Plan, under which the restricted stock unit award agreements are issued,with Mr. Hennessy, which are described above under the description of payments to Mr. Hennessy.

Director

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PAY VERSUS PERFORMANCE

In accordance with SEC rules applicable to smaller reporting companies, the following table sets forth information with respect to how “compensation actually paid” (“CAP”) to our principal executive officer (“PEO”) and other named executive officers aligns with company performance. CAP is an SEC-defined term that does not necessarily reflect the amounts realized by our named executive officers. For information regarding the Company’s compensation philosophy and how the Company aligns executive compensation with its financial and operational performance, refer to the Compensation Discussion and Analysis section.

Fiscal Year(1)		Summary Compensation Table Total for PEO ($)				Compensation Actually Paid to PEO(2) ($)				Average Summary Compensation Table for Non-PEO Executive Officers ($)				Average Compensation Actually Paid to Non-PEO Executive Officers(2) ($)				Value of Initial Fixed $100 Investment Based on Company Total Shareholder Return(3) ($)				Net Income ($ in thousands)
2023			852,303				740,713				715,546				637,019			$	78.28			$	4,771
2022			919,240				858,129				778,168				735,353				95.01				6,190

(1)	For both fiscal years in the above table, the principal executive officer is Teresa M. Nilsen and the other named executive officers are Neil J. Hennessy, Kathryn R. Fahy, and Daniel B. Steadman.

(2)

In accordance with SEC rules, the adjustments shown in the table below were made to the Summary Compensation Table values to determine CAP. For the CAP portions that are calculated based on the fair market value of our common stock, the following prices were used: $8.67 as of September 30, 2022, $6.79 as of September 18, 2023, and $6.66 as of September 30, 2023. All amounts shown for non-PEO executive officers are averages.

Fiscal Year		Executive		Summary Compensation Table Total Compensation ($)				Minus Summary Compensation Table Stock Awards Total ($)				Plus Year-End Fair Value of Unvested Current Year Equity Awards ($)				Plus Change in Fair Value as of Year End of Unvested Prior Year Equity Awards ($)				Plus Change in Fair Value as of Vesting Date of Prior Year Equity Awards Vested in Current Year ($)				Equals Compensation Actually Paid ($)
2023		PEO			852,303				(133,763	)			131,202				(65,126	)			(43,903	)			740,713
		Non-PEO Executive Officers			715,546				(94,155	)			92,352				(45,830	)			(30,895	)			637,019
2022		PEO			919,240				(141,750	)			136,553				(32,327	)			(23,586	)			858,129
		Non-PEO Executive Officers			778,168				(99,747	)			96,090				(22,749	)			(16,409	)			735,353

(3)	Cumulative total shareholder return of the Company assuming an initial investment of $100 on September 30, 2021, and reinvestment of dividends.

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In accordance with SEC rules, the following charts show the relationship between CAP and the Company’s financial performance as measured by cumulative total shareholder return and net income.

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PROPOSAL2:
APPROVAL OF HENNESSY ADVISORS, INC. 2024 OMNIBUS INCENTIVE PLAN

The board recommends a vote “FOR” approval of the Hennessy Advisors, Inc. 2024 Omnibus Incentive Plan.

Summary of Proposal

Our board of directors is seeking shareholder approval of the Hennessy Advisors, Inc. 2024 Omnibus Incentive Plan (the “2024 Plan”). A copy of the 2024 Plan is attached to this proxy statement as Annex A. The maximum number of shares of our common stock that may be issued under the 2024 Plan if it is approved is 3,835,000 shares, all of which may be issued as incentive stock option awards (“ISOs”). Under the current Hennessy Advisors, Inc. Amended and Restated 2013 Omnibus Plan (the “Existing Plan”), the maximum number of shares that may be issued is 50% of all shares of common stock outstanding. If the 2024 Plan is approved, the Existing Plan will terminate, and no new awards will be granted under the Existing Plan.

We believe that awards under the 2024 Plan will (A) attract and retain outstanding individuals to serve as officers and other key employees, outside directors and advisory committee members, and consultants or advisors and (B) increase shareholder value. We further believe that the 2024 Plan strikes a proper balance between rewarding performance and limiting shareholder dilution.

Key Terms of the 2024Plan

Participation:	Eligible officers and other key employees, outside directors and advisory committee members, and consultants or advisors. As of December 4, 2023, approximately 25 persons were eligible to participate in the plan, including 17 employees, 6 non‑employee directors, and 2 non‑employee advisory committee members.
Shares Authorized:	The maximum number of shares that may be issued under the 2024 Plan is 3,835,000 shares.
Share Counting:	Shares authorized are depleted by number of shares granted under awards of any type, and shares used to pay exercise price of options or withholding taxes do not replenish shares authorized.
Award Types:	●   Stock options; ●   Stock appreciation rights ●   Performance shares; ●   Performance units; ●   Restricted stock; ●   Restricted stock units; ●   Cash incentive awards; and ●   Other stock-based awards.
Individual Limits:	No non‑employee director or non‑employee advisory committee member may receive awards during any fiscal year of the company with a grant date value that would exceed, together with any cash fees paid to such individual during such fiscal year, $400,000.
Key Prohibitions:	Options and stock appreciation rights cannot be backdated, repriced, or discounted.
Amendments:	Material amendments require shareholder approval.

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Administration:	Administered by the compensation committee or the board of directors.
Change of Control:	No accelerated vesting if buyer agrees to assume awards, unless the participant’s employment or service is terminated without cause or for good reason; any award not assumed is accelerated and cashed out.

Effect of Proposal on Existing Plan

The Existing Plan, under which we may grant equity awards to officers and other employees, outside directors, and advisors, had an aggregate of approximately 3,836,935 shares of common stock available for Fiscal Year 2017future equity grants as of December 4, 2023. If our shareholders approve the 2024 Plan, then the Existing Plan will terminate on the date of approval and no new awards will be granted under the Existing Plan. All awards that we granted under the Existing Plan that are outstanding as of the date that shareholders approve the 2024 Plan will remain outstanding, will continue to be governed by the Existing Plan until they are fully distributed or terminated pursuant to the terms of the Existing Plan, and will deplete the share reserve under the 2024 Plan. As of December 4, 2023, there were 349,613 shares of common stock subject to outstanding awards under the Existing Plan.

If the 2024 Plan is not approved, the Existing Plan will remain in effect in accordance with its terms.

Authorized Shares and Stock Price

Our articles of incorporation authorize the issuance of 22,500,000 shares of common stock. There were 7,673,869 shares of our common stock issued and outstanding as of December 4, 2023, and the market value of a share of our common stock as of that date was $6.58.

Summary of the Terms of the 2024Plan

The following is a summary of the material provisions of the 2024 Plan. This summary and the highlights above are qualified in their entirety by reference to the full and complete text of the 2024 Plan. Any inconsistencies between this summary or the highlights above and the text of the 2024 Plan will be governed by the text of the 2024 Plan.

Administration and Eligibility

The 2024 Plan will be administered by the compensation committee or by our full board of directors (which we refer as the “administrator”). The administrator has the authority to (1) interpret the provisions of the 2024 Plan and any award, (2) make, change, and rescind rules and regulations relating to the 2024 Plan, (3) change or reconcile any inconsistency in any award or agreement covering an award, and (4) make all other determinations necessary or advisable for the administration of the 2024 Plan. In addition, subject to any limitations imposed by law and any restrictions imposed by the compensation committee, our chief executive officer or president may act as the administrator with respect to awards granted to employees who are not officers subject to Section 16 of the Exchange Act at the time such authority or responsibility is exercised.

The administrator (to the extent of its authority) may designate any of the following as a participant under the 2024 Plan: (1) officers or other employees, (2) non‑employee directors and non‑employee advisory committee members, and (3) consultants and advisors.

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The board of directors may delegate some or all of its authority under the 2024 Plan to a committee of the board of directors or to one or more officers of the company, and the compensation committee may delegate some or all of its authority under the 2024 Plan to a sub-committee or one or more of our officers. Delegation is not permitted, however, with respect to stock-based awards made to individuals subject to Section 16 of the Exchange Act, unless the delegation is to a committee or sub‑committee of the board of directors that consists only of non-employee directors.

Types of Awards

Awards under the 2024 Plan may consist of stock options, stock appreciation rights, performance shares, performance units, restricted stock, restricted stock units, cash incentive awards, or other stock-based awards. The administrator may grant any type of award to any participant it selects, but only our employees may receive grants of incentive stock options. Awards may be granted alone or in addition to, in tandem with, or (subject to the 2024 Plan’s prohibition on repricing) in substitution for any other award (or any other award granted under another plan of ours or of any of our affiliates).

Shares Reserved under the 2024Plan

The 2024 Plan provides that the maximum number of shares that may be issued under the 2024 Plan is 3,835,000 shares of common stock.

In general, if an award granted under the 2024 Plan expires, is canceled or terminates without the issuance of shares under the award, if it is determined during or at the conclusion of the term of an award that all or some portion of the shares under the award will not be issuable on the basis that the conditions for such issuance will not be satisfied, or if shares are forfeited under an award, then such shares will again be available for issuance under the 2024 Plan in the same number as they depleted the reserve. Shares tendered in payment of the exercise price of an option, shares withheld to satisfy tax withholding obligations and shares purchased by us using proceeds from option exercises may not be recredited to the reserve.

Options

The administrator has the authority to grant stock options and to determine all terms and conditions of each stock option, including (1) the number of options granted, (2) whether an option is to be an incentive stock option or non-qualified stock option, (3) the date of grant, which is not prior to the date of the administrator’s approval of the grant, (4) a grant price that is not less than the fair market value of the common stock subject to the option on the date of grant, and (5) the terms and conditions of exercise. Fair market value is defined as the last sales price of a share of our common stock for the date in question, or if no sales of our common stock occur on such date, on the last preceding date on which there was such a sale. The administrator determines terms and conditions of exercise as well as the expiration date of each option, but the expiration date will not be later than 10 years after the grant date. If the aggregate fair market value of the shares subject to the portion of an incentive stock option that becomes exercisable during a calendar year exceeds $100,000, then the option is treated as a nonqualified stock option to the extent the $100,000 limitation is exceeded.

Each incentive stock option that the administrator grants to an eligible employee who owns more than 10% of the total combined voting power of all classes of stock then issued by our company must have an exercise price at least equal to 110% of the fair market value of the common stock on the date of grant and must terminate no later than five years after the date of grant.

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Stock Appreciation Rights

The administrator has the authority to grant stock appreciation rights. A stock appreciation right is the right of a participant to receive cash in an amount, or common stock with a fair market value, equal to the appreciation of the fair market value of a share of common stock during a specified period of time. The 2024 Plan provides that the administrator determines all terms and conditions of each stock appreciation right, including (1) the number of shares of common stock to which the stock appreciation right relates, (2) the date of grant, which is not prior to the date of the administrator’s approval of the grant, (3) a grant price that is not less than the fair market value of the common stock subject to the stock appreciation right on the date of grant, (4) the terms and conditions of exercise or maturity, (5) a term that must be no later than 10 years after the date of grant, and (6) whether the stock appreciation right will settle in cash, common stock or a combination of the two.

Performance and Stock Awards

The administrator has the authority to grant awards of restricted stock, restricted stock units, performance shares, or performance units. Restricted stock means shares of common stock that are subject to a risk of forfeiture, restrictions on transfer or both a risk of forfeiture and restrictions on transfer. Restricted stock unit means the right to receive a payment equal to the fair market value of one share of common stock. Performance share means the right to receive shares of common stock, including restricted stock, to the extent performance goals are achieved. Performance unit means the right to receive a payment valued in relation to a unit that has a designated dollar value or the value of which is equal to the fair market value of one or more shares of common stock, to the extent performance goals are achieved.

The administrator determines all terms and conditions of the awards, including (1) the number of shares of common stock or units to which such award relates, (2) whether performance goals need to be achieved for the participant to realize any portion of the benefit provided under the award, (3) the period of restriction with respect to restricted stock and the vesting or deferral period, if any, for restricted stock units, (4) the performance period for performance awards, (5) with respect to performance units, whether to measure the value of each unit in relation to a designated dollar value or the fair market value of one or more shares of common stock, and (6) with respect to performance units, whether the awards will settle in cash, in shares of common stock, or in a combination of the two.

Cash Incentive Awards

The administrator has the authority to grant cash incentive awards. Incentive awards are the right to receive a cash payment to the extent performance goals are achieved (or other requirements are met). The administrator will determine all of the terms and conditions of each incentive award, including the performance goals, the performance period, and the potential amount payable and the timing of payment.

Other Stock‑Based Awards

The administrator has the authority to grant other types of awards, which will be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, shares of common stock, either alone or in addition to or in conjunction with other awards, and payable in shares of common stock or cash. Such awards may include shares of unrestricted common stock, which may be awarded, without limitation, as a bonus, in payment of director fees, in lieu of cash compensation, in exchange for cancellation of a compensation right, or upon the attainment of performance goals or otherwise, or rights to acquire shares of our common stock from us. The administrator determines all terms and conditions of the award, including the time or times at which such award is made and the number of shares of common stock to be granted pursuant to such award or to which such award will relate. Any award that provides for purchase rights must be priced at 100% of the fair market value of our common stock on the date of the award.

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Dividend Equivalent Units

In no event may dividends or dividend equivalents be paid with respect to stock options or stock appreciation rights.

Unless the administrator determines otherwise, if we pay a cash dividend during the restriction period of an award of restricted stock, then the cash dividends will either, at the discretion of the administrator, be (1) paid in cash concurrently with the dividend payment to other shareholders, (2) automatically reinvested as additional shares of restricted stock that are subject to the same terms and conditions, including the risk of forfeiture, as the original grant of restricted stock, or (3) paid in cash at the same time and to the same extent that the shares of restricted stock vest.

The administrator may grant dividend equivalent units in tandem with restricted stock units, performance shares, performance units that are valued in relation to a share of our common stock, and any other “full-value award” that is measured as the full value of a share, rather than the increase in the value of a share. Dividend equivalent units will either, at the discretion of the administrator, be (1) paid in cash concurrently with dividends paid to shareholders, (2) accumulated and paid, in cash or shares (at the administrator’s discretion) at the same time and to the same extent that the tandem award vests or is earned, or (3) reinvested in additional units that are subject to the same terms and conditions (including vesting and forfeiture) as the tandem award. However, dividend equivalent units that relate to performance awards that are contingent on the achievement of a performance goal will also be contingent on the achievement of such performance goal and will not be paid unless and until the performance goal is achieved.

Performance Goals

For purposes of the 2024 Plan, performance goals means any objective or subjective goals the administrator establishes with respect to an award. Performance goals may include, but are not limited to, the performance of the company or any one or more of our affiliates or divisions (or any combination thereof) with respect to the following measures, which may be measured on an absolute or relative basis: (1) earnings per share, (2) total shareholder return, (3) fair market value of shares, (4) gross profit, (5) operating income, (6) net income and other earnings measures, including earnings before income taxes and earnings before income taxes, depreciation, and amortization, (7) return on investments, equity, assets, or capital, (8) economic value added, or other measure of profitability that considers the cost of capital employed, (9) cash flow metrics, (10) market share, (11) completion of integration of acquired businesses or strategic activities, (12) identification or consummation of investment opportunities or completion of specified projects in accordance with corporate business plans, (13) the value of all financial assets resulting from an extraordinary acquisition of assets, (14) the performance of one or more of the investment companies managed by the company as compared to a peer group or index or other benchmark deemed applicable by the compensation committee, (15) the volume of sales of the investment companies managed by the company, and (16) development, completion, and implementation of succession planning. Performance goals may also relate to a participant’s individual performance.

The administrator may adjust performance goals, or modify the manner of measuring or evaluating a performance goal, for any reason deemed appropriate, including but not limited to, (1) by excluding the effects of charges for reorganizing and restructuring, discontinued operations, asset write-downs, gains or losses on the disposition of a business, or mergers, acquisitions, or dispositions, and extraordinary, unusual, or non‑recurring items of gain or loss, (2) excluding the costs of litigation, claims, judgments, or settlements, (3) excluding the effects of changes in laws or regulations affecting reported results, or changes in tax or accounting principles, regulations, or law, and (4) excluding any accruals of amounts related to payments under the 2024 Plan or any other compensation arrangement maintained by the company or an affiliate.

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The inclusion in an award agreement of specific adjustments or modifications does not preclude the administrator from making other adjustments or modifications, in its discretion, as described herein, unless the award agreement explicitly provides otherwise.

Effect of Termination of Employment or Service on Awards

The administrator will have the discretion to determine, at the time an award is made to a participant or any time thereafter, the effect of the participant’s termination of employment or service with our company or our affiliates on the award.

Transferability and Restrictions on Exercise

No award (other than unrestricted shares), and no right under any such award, is assignable, alienable, saleable, or transferable by a participant except by will or by the laws of descent and distribution, unless and to the extent the administrator allows a participant to designate in writing a beneficiary to exercise the award or receive payment under an award after the participant’s death, or transfer an award.

Each award, and each right under any award, will be exercisable during the lifetime of the participant only by the participant or, if permissible under applicable law, by such individual’s guardian or legal representative.

Adjustments

If any of the following occurs:

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we are involved in a merger or other transaction in which our common stock is changed or exchanged;

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we subdivide or combine our common stock or we declare a dividend payable in our common stock, other securities or other property;

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we effect a cash dividend, the amount of which, on a per share basis, exceeds 10% of the fair market value of a share of common stock at the time the dividend is declared, or we effect any other dividend or other distribution on our common stock in the form of cash, or a repurchase of shares of common stock, that the board of directors determines is special or extraordinary in nature or that is in connection with a transaction that we characterize publicly as a recapitalization or reorganization involving our common stock; or

●

any other event occurs, which, in the judgment of the board of directors or compensation committee necessitates an adjustment to prevent an increase or decrease in the benefits or potential benefits intended to be made available under the 2024 Plan;

then the administrator will, in a manner it deems equitable to prevent an increase or decrease in the benefits or potential benefits intended to be made available under the 2024 Plan and subject to certain provisions of the Code, adjust the number and type of shares of common stock subject to the 2024 Plan and which may, after the event, be made the subject of awards, the number and type of shares of common stock subject to outstanding awards, the grant, purchase, or exercise price with respect to any award, and performance goals of an award.

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In any such case, the administrator may also provide for a cash payment to the holder of an outstanding award in exchange for the cancellation of all or a portion of the award (without the consent of the holder) in an amount and at a time determined by the administrator.

No such adjustments may be authorized in the case of incentive stock options to the extent that such authority would cause the 2024 Plan to violate Code Section 422(b).

Without limitation, if there is a reorganization, merger, consolidation, combination or other similar corporate transaction or event, whether or not constituting a change of control (other than any such transaction in which we are the continuing corporation and in which the outstanding shares are not being converted into or exchanged for different securities, cash or other property, or any combination thereof), the administrator may substitute for each share then subject to an award and the shares subject to the 2024 Plan the number and kind of shares of stock, other securities, cash or other property to which holders of commons stock will be entitled in respect of each share pursuant to the transaction.

In the case of a stock dividend (other than a stock dividend declared in lieu of an ordinary cash dividend) or subdivision or combination of the shares (including a reverse stock split), if no action is taken by the administrator, the adjustments described above will automatically be made.

In connection with any merger, consolidation, acquisition of property or stock, or reorganization, the administrator may authorize the issuance or assumption of awards under the 2024 Plan, subject to the listing requirements of any principal securities exchange or market on which the shares are then traded.

Change of Control

Unless otherwise provided in an applicable employment, retention, change of control, severance, award or similar agreement, or by the administrator prior to the event, in the event of a change of control of our company:

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If the purchaser, successor or surviving corporation (or parent thereof) (which we refer to as the “Survivor”) so agrees, some or all outstanding awards will be assumed, or replaced with the same type of award with similar terms and conditions, by the Survivor in the change of control transaction, subject to appropriate adjustments.

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To the extent the Survivor in the change of control transaction does not agree to assume the awards or issue replacement awards, then immediately prior to the date of the change of control:

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each stock option or stock appreciation right that is then held by a participant who is employed by or in the service of us or one of our affiliates will become fully vested, and, unless otherwise determined by the board of directors or the compensation committee, all stock options and stock appreciation rights will be cancelled in exchange for a cash payment to be made within 30 days of the change of control equal to the excess of the change of control price (as determined by the administrator) of the shares of common stock covered by the stock option or stock appreciation right over the purchase or grant price of such shares of common stock under the award;

●

restricted stock and restricted stock units (that are not performance awards) that are not vested will vest and restricted stock units will be cancelled in exchange for a cash payment to be made within 30 days of the change of control;

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all performance and cash incentive awards that are earned but not yet paid will be paid, and all performance and cash incentive awards for which the performance period has not expired will be cancelled on the date of the change of control in exchange for a cash payment to be made within 30 days of the change of control equal to a pro‑rated portion of the target value of the award reflecting the portion of the performance period that had elapsed prior to the change of control;

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all other awards that are not vested will vest and if an amount is payable under such vested award, then such amount will be paid in cash based on the value of the award.

With respect to any awards that are assumed or replaced by the Survivor and with respect to any awards not cancelled in connection with the change of control, if the Survivor terminates the participant’s employment or service without cause (as defined in the agreement relating to the award or, if not defined in such an agreement, as defined by the administrator) or if the participant has in effect an employment, retention, change of control, severance or similar agreement with us or any affiliate that contemplates the termination of his or her employment or service for good reason, and the participant terminates his or her employment or service for good reason (as defined in such agreement), in either case within 24 months after a change of control, then any such awards will be treated as follows, unless the terms of the award agreement or the participant’s employment, retention, change of control, severance, or similar agreement provide a more favorable result to the participant:

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all outstanding awards or replacement awards will vest automatically (assuming, for any award the vesting of which is subject to performance goals, that such goals had been met at the target level);

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stock options and stock appreciation rights will, at the election of the participant, be cancelled in exchange for a payment in cash or shares (which may include shares or other securities of the Survivor) to be made within 30 days after the date of termination equal to the excess of the fair market value of the shares on the date of such termination covered by the portion of the option or stock appreciation right that has not been exercised over the exercise or grant price of such shares under the award;

●

restricted stock or restricted stock units will be cancelled as of the date of such termination in exchange for a payment in cash or shares (which may include shares or other securities of the Survivor) to be made within 30 days after the date of termination equal to the fair market value of a share;

●

performance awards and cash incentive awards that are earned but not yet paid will be paid upon the termination of employment or service, and performance awards and cash incentive awards for which the performance period has not expired will be cancelled in exchange for a cash payment equal to a pro‑rated portion of the target value of the award reflecting the portion of the performance period that had elapsed prior to the termination; and

●

other awards will be cancelled as of the date of such termination in exchange for a payment in cash in an amount equal to the value of the award.

If the participant has a deferral election in effect with respect to any amount payable under these change of control provisions, that amount will be deferred pursuant to such election and will not be paid in a lump sum, except that, with respect to amounts payable to a participant (or the participant’s beneficiary or estate) who is entitled to a payment hereunder because the participant’s employment terminated as a result of death or disability, or payable to a participant who has met the requirements for retirement (without regard to whether the participant has terminated employment), no payment will be made unless the change of control also constitutes a change of control within the meaning of Code Section 409A.

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Except to the extent a participant has an employment or similar agreement or is subject to a policy that provides for a more favorable result to the participant upon a change of control, in the event that our legal counsel determines that any payment, benefit, or transfer by us under the 2024 Plan or any other plan, agreement, or arrangement to or for the benefit of the participant (in the aggregate, the “Total Payments”) to be subject to the tax (“Excise Tax”) imposed by Code Section 4999 but for this provision, then the Total Payments shall either be delivered in full or in an amount such that the value of the aggregate Total Payments that the participant is entitled to receive shall be $1.00 less than the maximum amount that the participant may receive without being subject to the Excise Tax, whichever results in the greatest benefit to the participant on an after‑tax basis. In the event that reducing the Total Payments results in a greater after‑tax benefit to the participant, payments or benefits included in the Total Payments shall be reduced or eliminated by applying the following principles, in order: (1) the payment or benefit with the higher ratio of the parachute payment value to present economic value (determined using reasonable actuarial assumptions) shall be reduced or eliminated before a payment or benefit with a lower ratio, (2) the payment or benefit with the later possible payment date shall be reduced or eliminated before a payment or benefit with an earlier payment date, (3) cash payments shall be reduced prior to non‑cash benefits; provided that if the foregoing order of reduction or elimination would violate Code Section 409A, then the reduction shall be made pro rata among the payments or benefits included in the Total Payments (on the basis of the relative present value of the parachute payments).

A “change of control” is generally defined by the 2024 Plan as the occurrence of one or more of the following events:

1.         an acquisition, in any one transaction or series of transactions, after which any individual, entity or group has beneficial ownership of 50% or more of either the then‑outstanding shares of our common stock or the combined voting power of our then‑outstanding voting securities, but excluding an acquisition (A) by us or any of our employee benefit plans (or related trusts), (B) by Neil J. Hennessy or any affiliate, or (C) by any corporation which, following the acquisition, is beneficially owned, directly or indirectly, in substantially the same proportions, by the beneficial owners of the common stock and voting securities of the company immediately prior to such acquisition; or

2.         50% or more of the members of our board of directors (A) are not continuing directors, or (B) are nominated or elected by the same beneficial owner or are elected or appointed in connection with an acquisition of the company; or

3.         the (A) consummation of a reorganization, merger, share exchange, consolidation or similar transaction, with respect to which the beneficial owners of the company immediately prior to such transaction do not, following such transaction, beneficially own more than 50% of the then‑outstanding shares of common stock and voting securities of the corporation resulting from the transaction, (B) consummation of the sale or other disposition of all or substantially all of the assets of the company or (C) approval by the shareholders of the company of a complete liquidation or dissolution of the company.

Term of 2024Plan

Unless earlier terminated by the board of directors, the 2024 Plan will remain in effect until all common stock reserved for issuance under the 2024 Plan has been issued. If the term of the 2024 Plan extends beyond ten years, no further incentive stock options may be granted unless the shareholders have approved an extension of the 2024 Plan for that purpose.

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Termination and Amendment

The board of directors or the compensation committee may amend, alter, suspend, discontinue, or terminate the 2024 Plan at any time, except:

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the board of directors must approve any amendment to the 2024 Plan if we determine such approval is required by prior action of the board of directors, applicable corporate law, or any other applicable law;

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shareholders must approve any amendment to the 2024 Plan if we determine that such approval is required by Section 16 of the Exchange Act, the listing requirements of any principal securities exchange or market on which our common stock is then traded, or any other applicable law; and

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shareholders must approve any amendment to the 2024 Plan that materially increases the number of shares of common stock reserved under the 2024 Plan, that materially expands the group of individuals that may become participants under the 2024 Plan, or that diminishes the provisions on repricing or backdating stock options and stock appreciation rights.

The administrator may modify, amend, or cancel any award or waive any restrictions or conditions applicable to any award or the exercise of the award. Any modification or amendment that materially diminishes the rights of the participant or any other person that may have an interest in the award, or that cancels any award, will be effective only if agreed to by that participant or other person. The administrator does not need to obtain participant or other interested party consent, however, for the adjustment or cancellation of an award pursuant to the adjustment provisions of the 2024 Plan or the modification of an award to the extent deemed necessary to comply with any applicable law or the listing requirements of any principal securities exchange or market on which our common stock is then traded, to the extent the administrator deems necessary to preserve favorable accounting or tax treatment of any award for us, or to the extent the administrator determines that the action does not materially and adversely affect the value of an award or that such action is in the best interest of the affected participant or any other person with an interest in the award.

The authority of the administrator to terminate or modify the 2024 Plan or awards will extend beyond the termination date of the 2024 Plan. In addition, termination of the 2024 Plan will not affect the rights of participants with respect to awards previously granted to them, and all unexpired awards will continue in force after termination of the 2024 Plan except as they may lapse or be terminated by their own terms and conditions.

Awards Subject to Recoupment; Compliance with Award Agreement and 2024Plan Required

Awards and any stock issued or cash paid under an award are subject to any recoupment, clawback, equity holding, stock ownership or similar policies that we adopt from time to time and any recoupment, clawback, equity holding, stock ownership or similar requirements made applicable by law, regulation or listing standards to us from time to time. Unless an award agreement specifies otherwise, the administrator may cancel any award at any time if the participant is not in compliance with all applicable provisions of the award agreement and the 2024 Plan.

Repricing Prohibited

Neither the administrator nor any other person may (1) amend the terms of outstanding stock options or stock appreciation rights to reduce the exercise price of such outstanding stock options or stock appreciation rights, (2) cancel outstanding stock options or stock appreciation rights in exchange for stock options or stock appreciation rights with an exercise price that is less than the exercise price of the original stock options or stock appreciation rights, or (3) cancel outstanding stock options or stock appreciation rights with an exercise price above the current share price in exchange for cash or other securities.

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Backdating Prohibited

The administrator may not grant a stock option or stock appreciation right with a grant date that is effective prior to the date the administrator takes action to approve such award.

Certain Federal Income Tax Consequences

The following summarizes certain federal income tax consequences relating to the 2024 Plan. The summary is based upon the laws and regulations in effect as of the date of this proxy statement and does not purport to be a complete statement of the law in this area. Furthermore, the discussion below does not address the tax consequences of the receipt or exercise of awards under foreign, state or local tax laws, and such tax laws may not correspond to the federal income tax treatment described herein. The exact federal income tax treatment of transactions under the 2024 Plan will vary depending upon the specific facts and circumstances involved and participants are advised to consult their personal tax advisors with regard to all consequences arising from the grant or exercise of awards and the disposition of any acquired shares.

Stock Options

The grant of a stock option under the 2024 Plan will create no income tax consequences to us or to the recipient. A participant who is granted a non-qualified stock option will generally recognize ordinary compensation income at the time of exercise in an amount equal to the excess of the fair market value of the common stock at such time over the exercise price. We will generally be entitled to a deduction in the same amount and at the same time as the participant recognizes ordinary income. Upon the participant’s subsequent disposition of the shares of common stock received with respect to such stock option, the participant will recognize a capital gain or loss (long-term or short-term, depending on the holding period) to the extent the amount realized from the sale differs from the tax basis (i.e., the fair market value of the common stock on the exercise date).

In general, a participant will recognize no income or gain as a result of the exercise of an incentive stock option, except that the alternative minimum tax may apply. Except as described below, the participant will recognize a long-term capital gain or loss on the disposition of the common stock acquired pursuant to the exercise of an incentive stock option and we will not be allowed a deduction. If the participant fails to hold the shares of common stock acquired pursuant to the exercise of an incentive stock option for at least two years from the grant date of the incentive stock option and one year from the exercise date, then the participant will recognize ordinary compensation income at the time of the disposition equal to the lesser of the gain realized on the disposition and the excess of the fair market value of the shares of common stock on the exercise date over the exercise price. We will generally be entitled to a deduction in the same amount and at the same time as the participant recognizes ordinary income. Any additional gain realized by the participant over the fair market value at the time of exercise will be treated as a capital gain.

Stock Appreciation Rights

The grant of a stock appreciation right under the 2024 Plan will create no income tax consequences to us or to the recipient. A participant who is granted a stock appreciation right will generally recognize ordinary compensation income at the time of exercise in an amount equal to the excess of the fair market value of the common stock at such time over the grant price. We will generally be entitled to a deduction in the same amount and at the same time as the participant recognizes ordinary income. If the stock appreciation right is settled in shares of our common stock, upon the participant’s subsequent disposition of such shares, the participant will recognize a capital gain or loss (long-term or short-term, depending on the holding period) to the extent the amount realized from the sale differs from the tax basis (i.e., the fair market value of the common stock on the exercise date).

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Restricted Stock

Generally, a participant will not recognize income and we will not be entitled to a deduction at the time an award of restricted stock is made under the 2024 Plan, unless the participant makes the election described below. A participant who has not made such an election will recognize ordinary income at the time the restrictions on the stock lapse in an amount equal to the fair market value of the restricted stock at such time. We will generally be entitled to a corresponding deduction in the same amount and at the same time as the participant recognizes income. Any otherwise taxable disposition of the restricted stock after the time the restrictions lapse will result in a capital gain or loss (long-term or short-term, depending on the holding period) to the extent the amount realized from the sale differs from the tax basis (i.e., the fair market value of the common stock on the date the restrictions lapse). Dividends paid in cash and received by a participant prior to the time the restrictions lapse will constitute ordinary income to the participant in the year paid and we will generally be entitled to a corresponding deduction for such dividends. Any dividends paid in stock will be treated as an award of additional restricted stock subject to the tax treatment described herein.

A participant may, within 30 days after the date of the award of restricted stock, elect to recognize ordinary income as of the date of the award in an amount equal to the fair market value of such restricted stock on the date of the award (less the amount, if any, the participant paid for such restricted stock). If the participant makes such an election, then we will generally be entitled to a corresponding deduction in the same amount and at the same time as the participant recognizes income. If the participant makes the election, then any cash dividends the participant receives with respect to the restricted stock will be treated as dividend income to the participant in the year of payment and will not be deductible by us. Any otherwise taxable disposition of the restricted stock (other than by forfeiture) will result in a capital gain or loss. If the participant who has made an election subsequently forfeits the restricted stock, then the participant will not be entitled to claim a credit for the tax previously paid. In addition, we would then be required to include as ordinary income the amount of any deduction we originally claimed with respect to such shares.

Restricted Stock Units

A participant will not recognize income and we will not be entitled to a deduction at the time an award of a restricted stock unit is made under the 2024 Plan. Upon the participant’s receipt of shares (or cash) at the end of the vesting period, the participant will recognize ordinary income equal to the amount of cash or the fair market value of the shares received, and we will be entitled to a corresponding deduction in the same amount and at the same time. If the restricted stock units are settled in whole or in part in shares, upon the participant’s subsequent disposition of the shares the participant will recognize a capital gain or loss (long-term or short-term, depending on the holding period) to the extent the amount realized upon disposition differs from the shares’ tax basis (i.e., the fair market value of the shares on the date the participant received the shares).

Performance Shares

The grant of performance shares will create no income tax consequences for us or the participant. Upon the participant’s receipt of shares at the end of the applicable performance period, the participant will recognize ordinary income equal to the fair market value of the shares received, except that if the participant receives shares of restricted stock in payment of performance shares, recognition of income may be deferred in accordance with the rules applicable to restricted stock as described above. We will generally be entitled to a deduction in the same amount and at the same time as the participant recognizes income. Upon the participant’s subsequent disposition of the shares, the participant will recognize a capital gain or loss (long-term or short-term depending on the holding period) to the extent the amount realized from the disposition differs from the shares’ tax basis (i.e., the fair market value of the shares on the date the participant received the shares).

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Performance Units

The grant of a performance unit will create no income tax consequences to us or the participant. Upon the participant’s receipt of cash or shares at the end of the applicable performance period, the participant will recognize ordinary income equal to the amount of cash or the fair market value of the shares received, and we will be entitled to a corresponding deduction in the same amount and at the same time. If performance units are settled in whole or in part in shares, upon the participant’s subsequent disposition of the shares the participant will recognize a capital gain or loss (long-term or short-term, depending on the holding period) to the extent the amount realized upon disposition differs from the shares’ tax basis (i.e., the fair market value of the shares on the date the participant received the shares).

Incentive Awards

A participant who is paid an incentive award will recognize ordinary income equal to the amount of cash paid, and we will generally be entitled to a corresponding income tax deduction.

Dividend Equivalent Units

A participant who is paid a dividend equivalent with respect to an award will recognize ordinary income equal to the value of cash or common stock paid, and we will be entitled to a corresponding deduction in the same amount and at the same time.

Code Section 409A

Awards under the 2024 Plan may constitute, or provide for, a deferral of compensation under Code Section 409A. If the requirements of Code Section 409A are not complied with, then holders of such awards may be taxed earlier than would otherwise be the case (e.g., at the time of vesting instead of the time of payment) and may be subject to an additional 20% penalty tax and, potentially, interest and penalties.

New Plan Benefits

The administrator has discretion to determine the individual employees or group of employees to whom awards will be granted and the terms and conditions of such awards. The company cannot currently determine the awards that may be granted under the 2024 Plan. The administrator will make such determinations from time to time.

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Equity Compensation Plan Information

The following table sets forth information regarding our equity incentive plans. All information presented is as of September 30, 2023. We do not have any equity compensation receivedplans that have not been approved by each of our directors, other than our executive officers, in fiscal year 2017. Our directors generally receive $10,500 per board meeting and $1,500 per committee meeting. Committee chairs received $2,000 per committee meeting. In addition, the compensation committee determines the amount of restricted stock units to award to each of our outside directors, if any, on an annual basis.shareholders:

 

		Fees Earned or								All Other
		Paid in Cash				Stock Awards				Compensation				Total
Name		($)				($)(1)				($)(2)				($)
Henry Hansel (3)		$	70,500			$	79,538			$	10,956			$	160,993
Brian A. Hennessy (3)		$	63,000			$	79,538			$	10,956			$	153,493
Daniel G. Libarle (3)		$	75,500			$	79,538			$	10,956			$	165,993
Rodger Offenbach (3)		$	67,500			$	79,538			$	10,956			$	157,993
Susan W. Pomilia (3)		$	68,000			$	79,538			$	10,956			$	158,493
Thomas L. Seavey (3)		$	76,500			$	79,538			$	10,956			$	166,993

		September 30, 2023
Plan Category		Number of Securities to Be Issued upon Exercise of Outstanding Options, Warrants, and Rights			Weighted-Average Exercise Price of Outstanding Options, Warrants, and Rights			Number of Securities Remaining for Issuance Under Compensation Plans (2)
Equity compensation plans approved by security holders (1)		349,613			-			1,175,032
Equity compensation plans not approved by security holders		-			-			-
Total		349,613			-			1,175,032

 

(1)

The amounts in this column include Securities to be issued pursuant to outstanding RSUs that vest over four years at a rate of 25% per year, for which the aggregate grant date fair value, computed in accordance with FASB ASC Topic 718 - Stock Compensation. The fair value of the stock award per share on the date of grantweighted average exercise price is $15.15, based on the closing price of our common stock on the date of grant of September 18, 2017.zero.

 

(2)

Excludes securities to be issued upon the vesting of outstanding RSUs. The amounts in this column include a charitable contribution made on behalfmaximum number of each director ($10,000) and miscellaneous expense related to required travel by each director’s spouse.shares of common stock that may be issued under the Omnibus Plan is 50% of our outstanding common stock, or 3,835,550 shares, as of the end of fiscal year 2023.

 

(3)	Director held 16,687.5non-vested restricted stock units as of September 30, 2017.

Vote Required

The affirmative vote of the holders of a majority of the shares of common stock present in person or by proxy and entitled to vote at the meeting is required to approve the proposal. Abstentions will have the same effect as a vote against this proposal, but broker non-votes will have no effect on the outcome of this proposal.

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PROPOSAL 2

3:
RATIFICATION OF SELECTION OF

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The board recommends a vote “FOR” the ratification of the selection of Marcum LLP as the independent registered public accounting firm for Hennessy Advisors for fiscal year 2024.

The audit committee has selected Marcum LLP to audit the company’s financial statements and internal control over financial reporting for fiscal year 20182024 and requests that the shareholders ratify such selection. If shareholders do not ratify the selection of Marcum LLP, the audit committee will reconsider the selection.

Audit services provided by Marcum LLP in fiscal year 2017 included the integrated audit of the company’s financial statements and internal control over financial reporting, reviews of interim financial statements, and consultations on matters related to accounting and financial reporting.

Marcum LLP also provided certainaudit-related services to Hennessy Advisors during fiscal year 2017, which were reviewed by the audit committee and are more fully described on page 29 of this proxy statement.

Representatives of Marcum LLP are expected to be present at the 20182024 annual meeting of shareholders and will be accorded the opportunity to make a statement, if they so desire, and to respond to appropriate questions.

Our board

The following table provides information relating to the fees that Marcum LLP has billed to the company for the past two fiscal years.

		Fiscal Year
		2023				2022
Audit Fees		$	220,420			$	211,653
Audit-Related Fees			-				-
Tax Fees			-				-
All Other Fees(1)			-				57,951
Total		$	220,420			$	269,604

(1)	The amounts included in “All Other Fees” relate to fees that Marcum LLP billed the company in connection with the company’s Registration Statement on Form S-1 ($27,051) and a comfort letter to underwriters ($30,900).

All decisions regarding selection of directors recommends a vote “FOR”independent accounting firms and approval of accounting services and fees are made by our audit committee in accordance with the ratificationSarbanes-Oxley Act of 2002. Pursuant to the audit committee charter and applicable law, the audit committee preapproves all auditing services and permitted non‑audit services to be performed for the company by Marcum LLP, subject to de minimus exceptions permitted by applicable law. The audit committee may also preapprove audit and permitted non‑audit services pursuant to preapproval policies and procedures established by the audit committee as long as such policies and procedures are detailed as to the particular service and do not include delegation of the selection of Marcum LLP asaudit committee’s responsibilities to management. In accordance with this policy, the audit committee preapproved all services provided by the company’s independent registered public accounting firm for Hennessy Advisors for fiscal year 2018. Proxies solicited by the board2023.

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Table of directors will be voted “FOR” ratification of the selection of Marcum LLP as the independent registered public accounting firm for Hennessy Advisors for fiscal year 2018 unless the shareholder has specified otherwise.

Contents

AUDIT COMMITTEE REPORT

Management is responsible for our internal controls and financial reporting process. Our independent accountants areregistered public accounting firm is responsible for performing an independent audit of our financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). It is the audit committee’s responsibility to monitor and oversee these processes.

In connection with these responsibilities, the audit committee met with management and representatives of the independent accountantsaccounting firm to review and discuss the audited financial statements for fiscal year 2017.2023. The audit committee also discussed with the independent accountantsaccounting firm the matters required by Auditing Standard No. 1301. The audit committee also received written disclosures from the independent accountantsaccounting firm mandated by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’saccounting firm’s communications with the audit committee concerning independence, and the audit committee discussed with the independent accountantsaccounting firm that firm’s independence.

Based uponon the audit committee’s discussions with management and representatives of the independent accountants,accounting firm, and the audit committee’s review of the representations of management and the independent accountants,accounting firm, the audit committee recommended that the board of directors include the audited financial statements of Hennessy Advisors, Inc. in its annual report onForm 10-K10‑K for the fiscal year ended September 30, 2017,2023, filed with the SEC.

 

Daniel G. Libarle, Chairman

Kiera Newton, Chair Henry Hansel

Thomas L. Seavey

The preceding report shall not be deemed incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent we specifically incorporate this information by reference, and shall not otherwise be deemed filed under the Securities Act of 1933 or the Securities Exchange Act of 1934.

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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

RepresentativesTable of Marcum LLP are expected to be present at the 2018 annual meeting of shareholders and will be accorded the opportunity to make a statement, if they so desire, and to respond to appropriate questions.

The following table provides information relating to the fees billed to Hennessy Advisors for fiscal years 2017 and 2016.

Contents

 

						Audit-Related
						Fees				Tax Fees
		Audit Fees				(1)				(2)				Other Fees				Total Fees
Fiscal Year 2017 - Marcum LLP		$	125,000			$	77,334			$	-			$	-			$	202,334
Fiscal Year 2016 - Marcum LLP		$	96,770			$	77,175			$	-			$	-			$	173,945

(1)	Audit-related fees are for SEC compliance reviews of Quarterly Reports on Form10-Q and Current Reports onForm 8-K.

(2)	Tax fees are for preparation of federal and state income tax returns and assistance with estimated tax payments.

All decisions regarding selection of independent accounting firms and approval of accounting services and fees are made by our audit committee in accordance with the provisions of the Sarbanes-Oxley Act of 2002. In accordance with the audit committee charter and applicable law, the audit committeepre-approves all auditing services and permittednon-audit services to be performed for the company by Marcum LLP, subject to de minimus exceptions permitted by applicable law. The audit committee may alsopre-approve audit and permittednon-audit services pursuant topre-approval policies and procedures established by the audit committee, provided such policies and procedures are detailed as to the particular service and do not include delegation of the audit committee’s responsibilities to management. In accordance with this policy, the audit committeepre-approved all services provided by the company’s independent accounting firm for fiscal year 2017.

OTHER GOVERNANCE MATTERSADDITIONAL INFORMATION

FutureRule 14a-8 ShareholderDeadlines for Submissions of Proxy Proposals, Proposals for Director Nominations or Other Business, and Recommendations for Potential Director Nominees

Proposals to Be Considered for Inclusion in the Company’s Proxy Materials (Rule14a‑8)

SEC regulations permit shareholders to submit proposals for inclusion in our proxy statement if the shareholder and the proposal meet the requirements specified inRule 14a-814a‑8 under the Exchange Act. Any such shareholder proposals for the 20192024 annual meeting of shareholders submitted in accordance withRule 14a-8 under the Exchange Act must be received at our principal executive offices no later than August 17, 2018.

22, 2024 (which is 120 calendar days prior to the anniversary of the date we released this proxy statement to our shareholders).

Future Annual Meeting Business

UnderProposals for Director Nominations or Other Business

Apart from shareholder proposals pursuant to Rule 14a‑8 under the Exchange Act, our bylaws require that any shareholder who intends to propose a director nomination or propose other business at an annual meeting other than shareholder proposals presented underRule 14a-8 under the Exchange Act for inclusion in our proxy materials, must give advance written notice that contains certain required information to our corporate secretary.

We must receive thisthe required written notice at our principal executive offices no later than 90 days, and no earlier than 120 days, before the first anniversary of the previous year’s annual meeting. Accordingly, for the 20192024 annual meeting of shareholders, written notice must be received by the corporate secretary between the close of business on September 27, 2018,October 11, 2023, and the close of business on October 27, 2018.November 10, 2024. Shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees pursuant to the universal proxy rules must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than November 10, 2024. However, as provided in theour bylaws, different deadlines would apply if the 20192024 annual meeting of shareholders iswere to be called for a date that is more than 30 days before or more than 70 days after the anniversary date of the 20182023 annual meeting of shareholders.

Such notices must comply with the procedural and content requirements of our bylaws and the bylaws.Exchange Act, as applicable. We will not entertain any proposals of director nominations or other business at the 20192024 annual meeting of shareholders that do not meet the requirements set forth in our bylaws.bylaws and the Exchange Act, as applicable. Further, if the shareholder making the proposal does not also comply with the requirements ofRule 14a-4(c)14a‑4(c)(2) under the Exchange Act, the persons namedindividuals designated as proxies will be allowed toproxy agents for such annual meeting may use their discretionary voting authority when and if the matter is raised at the annual meeting.

Shareholders should mail all notices

A copy of proposedour bylaws specifying the advance notice requirements for proposing director nominations or other business has been filed with the SEC and is available at www.sec.gov.

Recommendations for Potential Director Nominees

The nominating committee considers recommendations for potential director nominees from many sources, including members of the board, advisors, and shareholders. The nominating committee uses the same process to evaluate director nominees recommended by shareholders as it does to evaluate director nominees identified by other sources. To be a valid submission for recommendation to the nominating committee for a potential director nominee for the 2024 annual meeting of shareholders, the form of recommendation must be addressed to the nominating committee, be received at our principal executive offices no later than August 22, 2024 (which is 120 calendar days prior to the anniversary of the date on which we released this proxy statement to our shareholders), and include all of the same information that our bylaws require for any director nominations proposed to be presented at the annual meeting.

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Address for Submissions

Any submission described above must be made in writing to our corporate secretary, Teresa M. Nilsen, at Hennessy Advisors, Inc., 7250 Redwood Boulevard, Suite 200, Novato, CA 94945. You may obtainIn each case, the mailing envelope should contain a copyclear notation indicating that the enclosed letter is a “Proxy Proposal (Rule 14a‑8),” “Notice of our bylaws from our corporate secretary by written request to the same address.Nomination of Director or Other Business,” or “Shareholder Recommendation for Director.”

Communications with the Board of Directors

Shareholders who wish to communicate with the board of directors or with a particular director may send a letter to our corporate secretary, Teresa M. Nilsen, at Hennessy Advisors, Inc., 7250 Redwood Boulevard, Suite 200, Novato, California 94945. The mailing envelope should contain a clear notation indicating that the enclosed letter is a “Shareholder-Board Communication” or “Shareholder-Director Communication.” All such letters should identify the author as a shareholder and clearly state whether the intended recipients are all members of the board or just certain specified individual directors. Our corporate secretary will make copies of all such letters and circulate them to the appropriate director or directors. Commercial advertisements or other forms of solicitation will not be forwarded.

Annual Report

A copy of our annual report on Form10-K for the fiscal year ended September 30, 2017,2023, accompanies this proxy statement. The Form10-K is posted on our website at www.hennessyadvisors.com. Information regarding the assumptions made in valuing the stock awards contained in the footnotes to the financial statements in the Form10-K is incorporated by reference into this proxy statement. We will provide a copy of the Form10-K without exhibits to each person who is a record or beneficial holder of shares of common stock on the record date for the annual meeting. Wemeeting, and we will provide a copy of the exhibits without charge to eachany such person who is a record or beneficial holder of shares of common stock on the record date for the annual meeting who submits a written request for it. Requests for copies of the Form10-K or exhibits should be addressed to our corporate secretary, Teresa M. Nilsen, at Hennessy Advisors, Inc., 7250 Redwood Boulevard, Suite 200, Novato, California 94945.

Multiple Shareholders with the Same Address

Pursuant to the rules of the Exchange Act, services that deliver our communications to shareholders that hold their stock through a bank, broker or other holder of record may deliver to multiple shareholders sharing the same address a single copy of our annual report on Form10-K and proxy statement to multiple shareholders who share the same address unless contrary instructions from one or more of such shareholders have been provided.provided contrary instructions. This procedure, referred to as householding, reduces the volume of duplicate materials shareholders receive and reduces mailing expenses. You may revoke your consent to future householding mailings or may enroll in householding by contacting your bank, broker, or other holder of record.broker. If you would like to receive a separate copy of this proxy statement and our annual report onForm 10-K10‑K for the fiscal year ended September 30, 2017,2023, please submit a written request to our corporate secretary, Teresa M. Nilsen, at Hennessy Advisors, Inc., 7250 Redwood Boulevard, Suite 200, Novato, California 94945, or call(800) 966-4354, 1‑800‑966‑4354, and we will promptly deliver them to you.

Cost of Proxy Solicitation

We bear the cost of soliciting proxies. We may reimburse brokers and other persons holding stock in their names for their expenses for sending proxy material to beneficial owners and obtaining their proxies. Our directors, officers, and other employees, without additional compensation, may solicit proxies in writing, by phone, by email, or otherwise.

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Other Matters

The board of directors does not know of any other matters to come before the annual meeting. However, if any other matters properly come before the annual meeting, the persons designated as proxiesproxy agents intend to vote in accordance with their best judgment on such matters. If any other matter should come before the annual meeting, action on the matter will be approved if the number of votes cast in favor of the matter exceeds the number opposed.

Proxy Solicitation

We will bear the cost of soliciting proxies. We may reimburse brokers and other persons holding stock in their names, or in the names of director nominees, for their expenses for sending proxy material to principals and obtaining their proxies. Our directors, officers, and other employees, without additional compensation, may solicit proxies personally or in writing, by telephone,e-mail, or otherwise.

PLEASE SPECIFY YOUR CHOICES AND DATE, SIGN, AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED ENVELOPE, POSTAGE FOR WHICH POSTAGE HAS BEEN PROVIDED. YOUR PROMPT RESPONSE IS APPRECIATED.

 

By Order of the Board of Directors,

/s/ Teresa M. Nilsen

Teresa M. Nilsen, Secretary

December 15, 2017

						Electronic Voting Instructions   Available 24 hours a day, 7 days a week!
						Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy. VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. Proxies submitted by the Internet or telephone must be received by 11:00 p.m., Pacific Time, on January 24, 2018.
								Vote by Internet    • Go towww.investorvote.com/HNNA Teresa M. Nilsen President, Chief Operating Officer, and Secretary   • Or scan the QR code with your smartphone   • Follow the steps outlined on the secure website
						Vote by telephone •  Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone •  Follow the instructions provided by the recorded message
Using ablack ink pen, mark your votes with anX as shown in this example. Please do not write outside the designated areas.		☒

q  IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.  q

 

 

A		Proposals — The Board of Directors recommends a voteFOR all the nominees listed andFOR Proposal 2.

1. Election of Directors:		01 - Neil J. Hennessy		02 - Teresa M. Nilsen		03 - Daniel B. Steadman				+
		04 - Henry Hansel		05 - Brian A. Hennessy		06 - Daniel G. Libarle
		07 - Rodger Offenbach		08 - Susan W. Pomilia		09 - Thomas L. Seavey

☐		Mark here to voteFOR all nominees
☐		Mark here toWITHHOLD vote from all nominees

				01		02		03		04		05		06		07		08		09
☐		For AllEXCEPT - To withhold a vote for one or more nominees, mark the box to the left and the corresponding numbered box(es) to the right.		☐		☐		☐		☐		☐		☐		☐		☐		☐

For

Against

Abstain

2. Ratify the selection of Marcum LLP as the independent registered public accounting firm for Hennessy Advisors, Inc. for fiscal year 2018.

☐

☐

☐

December 20, 2023

 

B		Non-Voting Items

Change of Address — Please print new address below.						Comments— Please print your comments below.

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C		Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below

Note: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such.

Date (mm/dd/yyyy) — Please print date below.

Signature 1 — Please keep signature within the box.

Signature 2 — Please keep signature within the box.

/      /

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Important notice regarding the Internet availability of proxy materials for the 2018 Meeting of Shareholders.The Proxy Statement and the 2017 Annual Report to Shareholders are available at:www.hennessyadvisors.com/proxy.htm.

q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.qANNEX A

 

 

HENNESSY ADVISORS, INC.
2024 OMNIBUS INCENTIVE PLAN

 

PROXY — HENNESSY ADVISORS, INC.1.    Purpose and Effective Date.

 

(a)    Purpose. The Hennessy Advisors, Inc. 2024 Omnibus Incentive Plan has two complementary purposes: (i) to attract and retain outstanding individuals to serve as officers and employees, outside directors and advisory committee members, and consultants or advisors, and (ii) to increase shareholder value. This Plan will provide participants incentives to increase shareholder value by offering the opportunity to acquire shares of the Company’s common stock, or receive monetary payments, on the potentially favorable terms that this Plan provides.

2018

(b)    Effective Date. This Plan will become effective on the date of the Company’s 2024 Annual Meeting of Shareholders - January 25, 2018(the “Effective Date”), provided that the Company’s shareholders approve the Plan on such date. Awards may be granted under this Plan on and after the Effective Date.

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY

(c)    Prior Plan. The undersigned hereby appointsHennessy Advisors, Inc. Amended and Restated 2013 Omnibus Incentive Plan (the “Prior Plan”) will terminate, and no new awards may be granted thereunder, on the Effective Date; provided that the Prior Plan will continue to govern awards that were previously granted under the Prior Plan and that remain outstanding on the Effective Date, and such awards shall continue in force and effect until fully distributed or terminated pursuant to the Prior Plan’s terms.

2.    Definitions. Capitalized terms used in this Plan have the meanings given below. Additional defined terms are set forth in other sections of this Plan.

(a)    “10% Shareholder” means a Participant who, as of the date an ISO is granted to such individual, owns more than 10% of the total combined voting power of all classes of Stock then issued by the Company or a Subsidiary corporation.

(b)    “Administrator” means the Committee. In addition, subject to any limitations imposed by law and any restrictions imposed by the Committee, the Chief Executive Officer or President of the Company may act as the Administrator with respect to Awards granted (or to be granted) to employees who are not Section 16 Participants at the time such authority or responsibility is exercised. For the avoidance of doubt, the Board may also act as the Administrator.

(c)    “Affiliate” means, if any, any entity that, directly or through one or more intermediaries, is controlled by, controls, or is under common control with the Company within the meaning of Code Sections 414(b) or (c), provided that, in applying such provisions, the phrase “at least 50 percent” shall be used in place of “at least 80 percent” each place it appears therein.

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(d)    “Award” means a grant of Options, Stock Appreciation Rights, Performance Shares, Performance Units, Restricted Stock, Restricted Stock Units, a Cash Incentive Award, or any other type of award permitted under the Plan.

(e)    “Beneficial Ownership” (or derivatives thereof) shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.

(f)    “Board” means the Board of Directors of the Company.

(g)    “Cash Incentive Award” means the right to receive a cash payment to the extent Performance Goals are achieved (or other requirements are met).

(h)    “Cause” means (i) if the Participant is subject to an employment agreement with the Company or an Affiliate that contains a definition of “cause,” such definition, or (ii) otherwise, except as otherwise determined by the Administrator and set forth in an Award agreement, any of the following as determined by the Administrator: (A) violation of the provisions of any employment agreement, non-competition agreement, confidentiality agreement, or similar agreement with the Company or an Affiliate, or the Company’s or an Affiliate’s code of ethics, as then in effect, (B) conduct rising to the level of gross negligence or willful misconduct in the course of employment with the Company or an Affiliate, (C) commission of an act of dishonesty or disloyalty involving the Company or an Affiliate, (D) violation of any Federal, state, or local law in connection with the Participant’s employment or service, or (E) breach of any fiduciary duty to the Company or an Affiliate.

(i)    “Change of Control” means the occurrence of any one or more of the following events:

(i)    an acquisition, in any one transaction or series of transactions, after which any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act), has Beneficial Ownership of 50% or more of either the then‑outstanding Shares or the combined voting power of the then‑outstanding voting securities of the Company, but excluding, for this purpose, any such acquisition (A) by the Company or any employee benefit plan (or related trust) of the Company, (B) by Neil J. Hennessy or any Affiliate thereof, or (C) by any corporation with respect to which, following such acquisition, all of the then‑outstanding shares of common stock and Teresa M. Nilsen,voting securities of such corporation are then Beneficially Owned, directly or indirectly, in substantially the same proportions, by the Beneficial Owners of the common stock and voting securities of the Company immediately prior to such acquisition;

(ii)    50% or more of the members of the Board (A) are not Continuing Directors, or (B) whether or not they are Continuing Directors, are nominated by or elected by the same Beneficial Owner or are elected or appointed in connection with an acquisition by the Company (whether through purchase, merger, or otherwise) of all or substantially all of the operating assets or capital stock of another entity; or

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(iii)    the (A) consummation of a reorganization, merger, share exchange, consolidation, or similar transaction, in each case, with respect to which the individuals and entities who were the respective Beneficial Owners of the Shares and voting securities of the Company immediately prior to such transaction do not, following such transaction, beneficially own, directly or indirectly, more than 50% of, respectively, the then‑outstanding shares of common stock and voting securities of the corporation resulting from such reorganization, merger, or consolidation, (B) consummation of the sale or other disposition of all or substantially all of the assets of the Company or (C) approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

Notwithstanding the foregoing, for purposes of an Award (1) that provides for the payment of deferred compensation that is subject to Code Section 409A or (2) with respect to which the Company permits a deferral election, the definition of Change of Control herein shall be deemed amended to conform to the requirements of Code Section 409A to the extent necessary for the Award and deferral election to comply with Code Section 409A.

(j)    “Change of Control Price” shall mean the per Share price paid or deemed paid in the Change of Control transaction, as determined by the Administrator.

(k)    “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a specific provision of the Code includes any successor provision and the regulations promulgated under such provision.

(l)    “Committee” means the Compensation Committee of the Board (or a successor committee with the same or similar authority), or such other committee of the Board designated by the Board to administer the Plan and composed of no fewer than two directors, each of them, with power to act withoutwhom is a “non-employee director” within the other and with powermeaning of substitution, as proxies and attorneys-in-fact and hereby authorizes them to represent and vote, asRule 16b-3; provided that if no such committee shall be in existence at any time, the functions of the Committee shall be carried out by the Board.

(m)    “Company” means Hennessy Advisors, Inc., a California corporation, or any successor thereto.

(n)    “Continuing Director” means any member of the Board who was a member of the Board on the day following the Effective Date, and any successor of a Continuing Director who is recommended to succeed a Continuing Director (or whose election or nomination for election is approved) by at least a majority of the Continuing Directors then on the Board.

(o)    “Director” means a member of the Board, and “Non-Employee Director” means a Director who is not also an officer or an employee of the Company or an Affiliate.

(p)    “Disability” means, except as otherwise determined by the Administrator and set forth in an Award agreement: (i) with respect to an ISO, the meaning given in Code Section 22(e)(3), and (ii) with respect to all other side,Awards, the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of at least 12 months, as determined by the Administrator. The Administrator shall make the determination of Disability and may request such evidence of disability as it reasonably determines.

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(q)    “Dividend Equivalent Unit” means the right to receive a payment, in cash or property, equal to the cash dividends or other distributions paid with respect to a Share.

(r)    “Exchange Act” means the Securities Exchange Act of 1934, as amended. Any reference to a specific provision of the Exchange Act includes any successor provision and the regulations and rules promulgated under such provision.

(s)    “Fair Market Value” means, per Share on a particular date: (i) if the Shares are listed on a national securities exchange, the last sales price as reported for the immediately preceding date on which there was a sale of Shares on such exchange, provided that, if so determined by the Administrator, Fair Market Value may instead mean a price that is based on the opening, closing, actual, high or low sale price, or the arithmetic mean of selling prices, of a Share on the applicable exchange on the applicable date, the preceding trading day, the next succeeding trading day, or the arithmetic mean of selling prices on all trading days over a specified averaging period weighted by volume of trading on each trading day in the sharesperiod that is within 30 days before or 30 days after the applicable date, as determined by the Administrator in its discretion; provided further that, if an arithmetic mean of prices is used to set a grant price or an exercise price for an Option or Stock Appreciation Right, the commitment to grant the applicable Award based on such arithmetic mean must be irrevocable before the beginning of the specified averaging period in accordance with Treasury Regulation §1.409A-1(b)(5)(iv)(A); (ii) if the Shares are not listed on a national securities exchange, but are traded in an over-the-counter market, the last sales price (or, if there is no last sales price reported, the average of the closing bid and asked prices) for the Shares on the immediately preceding date on which there was a sale of or quotation for Shares on that market; or (iii) if the Shares are neither listed on a national securities exchange nor traded in an over-the-counter market, the price determined by the Administrator. Notwithstanding the foregoing, in the case of a sale of Shares, the actual sale price shall be the Fair Market Value of such Shares. The Administrator shall establish the Fair Market Value of any other property using any reasonable method it determines in its sole discretion.

(t)    “Incentive Stock Option” or “ISO” mean an Option that meets the requirements of Code Section 422.

(u)     “Option” means the right to purchase Shares at a stated price for a specified period of time.

(v)    “Participant” means an individual selected by the Administrator to receive an Award.

(w)    “Performance Awards” means a Performance Share and Performance Unit, and any Award of Restricted Stock or Restricted Stock Units, the payment or vesting of which is contingent on the attainment of one or more Performance Goals.

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(x)    “Performance Goals” means any objective or subjective goals the Administrator establishes with respect to an Award. Performance Goals may include, but are not limited to, the performance of the Company or any one or more of its Affiliates or its or their business units (or any combination thereof) with respect to the following measures, which may be measured on an absolute or relative basis: (i) earnings per Share; (ii) total shareholder return; (iii) Fair Market Value of Shares; (iv) gross profit; (v) operating income; (vi) net income and other earnings measures, including EBIT and EBITDA; (vii) return on investments, equity, assets, or capital; (viii) economic value added, or other measure of profitability that considers the cost of capital employed; (ix) cash flow metrics; (x) market share; (xi) completion of integration of acquired businesses or strategic activities; (xii) identification or consummation of investment opportunities or completion of specified projects in accordance with corporate business plans; (xiii) the value of all financial assets resulting from an extraordinary acquisition of assets; (xiv) the performance of one or more of the investment companies managed by the Company as compared to a peer group or index or other benchmark deemed applicable by the Administrator; (xv) the volume of sales of the investment companies managed by the Company; and (xvi) development, completion, and implementation of succession planning. Performance Goals may also relate to a Participant’s individual performance.

The Administrator reserves the right to adjust Performance Goals, or modify the manner of measuring or evaluating a Performance Goal, for any reason the Administrator determines is appropriate, including but not limited to: (A) by excluding the effects of charges for reorganizing and restructuring; discontinued operations; asset write-downs; gains or losses on the disposition of a business; or mergers, acquisitions, or dispositions; and extraordinary, unusual, or non‑recurring items of gain or loss; (B) excluding the costs of litigation, claims, judgments, or settlements; (C) excluding the effects of changes in laws or regulations affecting reported results, or changes in tax or accounting principles, regulations, or law; and (D) excluding any accruals of amounts related to payments under the Plan or any other compensation arrangement maintained by the Company or an Affiliate.

The inclusion in an Award agreement of specific adjustments or modifications shall not be deemed to preclude the Administrator from making other adjustments or modifications, in its discretion, as described herein, unless the Award agreement provides that the adjustments or modifications described in such agreement shall be the sole adjustments or modifications.

(y)    “Performance Shares” means the right to receive Shares (including Restricted Stock) to the extent Performance Goals are achieved.

(z)    “Performance Unit” means the right to receive a payment valued in relation to a unit that has a designated dollar value or the value of which is equal to the Fair Market Value of one or more Shares, to the extent Performance Goals are achieved.

(aa)    “Person” means any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act).

(bb)    “Plan” means this Hennessy Advisors, Inc. 2024 Omnibus Incentive Plan, as may be amended from time to time.

(cc)    “Restriction Period” means the length of time during which an Award of Restricted Stock is subject to a risk of forfeiture or the Participant cannot sell, assign, transfer, pledge, or otherwise encumber such Restricted Stock, and at the end of which the Participant obtains an unrestricted right to such Stock.

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(dd)    “Restricted Stock” means a Share that is subject to a Restriction Period.

(ee)    “Restricted Stock Unit” means the right to receive a Share or a cash payment equal to the Fair Market Value of one Share.

(ff)    “Retirement” means, except as otherwise determined by the Administrator and set forth in an Award agreement, termination of employment from the Company and its Affiliates (for other than Cause) on a date the Participant is then eligible to receive immediate early or normal retirement benefits under the provisions of any of the Company’s or its Affiliate’s defined benefit pension plans, or if the Participant is not covered under any such plan, on or after attainment of age 55 and completion of 10 years of continuous service with the Company and its Affiliates or on or after attainment of age 65 and completion of 5 years of continuous service with the Company and its Affiliates.

(gg)    “Rule16b-3” means Rule 16b-3 promulgated by the United States Securities and Exchange Commission under the Exchange Act, or any successor rule or regulation thereto.

(hh)    “Section16 Participants” means Participants who are subject to the provisions of Section 16 of the Exchange Act.

(ii)    “Share” means a share of Stock.

(jj)    “Stock” means the Common Stock of the Company.

(kk)    “Stock Appreciation Right” or “SAR” means the right to receive a payment equal to the appreciation of the Fair Market Value of a Share during a specified period of time.

(ll)    “Subsidiary” means, if any, any corporation, limited liability company or other limited liability entity in an unbroken chain of entities beginning with the Company if each of the entities (other than the last entity in the chain) owns the stock or equity interest possessing more than 50% of the total combined voting power of all classes of stock or other equity interests in one of the other entities in the chain.

(mm)    “Unrestricted Shares” means Shares issued under the Plan that are not subject to a Restriction Period.

3.    Administration.

(a)    Administration. The Administrator shall administer this Plan. In addition to the authority specifically granted to the Administrator in this Plan, the Administrator has full discretionary authority to administer this Plan and all Awards, including but not limited to the authority to: (i) interpret the provisions of this Plan and any Award agreement; (ii) prescribe, amend, and rescind rules and regulations relating to this Plan; (iii) correct any defect, supply any omission, or reconcile any inconsistency in this Plan, any Award, or agreement covering an Award in the manner and to the extent it deems desirable to carry this Plan or such Award into effect; and (iv) make all other determinations necessary or advisable for the administration of this Plan. All Administrator determinations shall be made in the sole discretion of the Administrator and are final and binding on all interested parties.

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(b)    Delegation to Other Committees, Subcommittees or Officers. To the extent applicable law permits, the Board may delegate to another committee of the Board or to one or more officers of the Company, or the Committee may delegate to a subcommittee or one or more officers of the Company, any or all of their respective authority and responsibility as an Administrator of the Plan; provided that no such delegation is permitted with respect to Stock-based Awards made to Section 16 Participants at the time any such delegated authority or responsibility is exercised unless the delegation is to another committee of the Board or to a subcommittee, in each case consisting entirely of directors who are “non-employee directors” within the meaning of Rule 16b-3. If the Board or the Committee has made such a delegation, then all references to the Administrator in this Plan include such other committee, subcommittee or one or more officers to the extent of such delegation.

(c)    Indemnification. The Company will indemnify and hold harmless each member of the Board and the Committee, and each officer or member of any other committee or subcommittee to whom a delegation under Section 3(b) has been made, as to any acts or omissions with respect to this Plan or any Award to the maximum extent that the law and the Company’s articles of incorporation and by-laws permit.

4.    Eligibility. The Administrator may designate any of the following as a Participant from time to time, to the extent of the Administrator’s authority: any officer or other employee of the Company or its Affiliates; any individual that the Company or an Affiliate has engaged to become an officer or employee; any Director, including a Non-Employee Director; any member of the Advisory Committee of the Board, including a member of the Advisory Committee of the Board who is not also an officer or an employee of the Company or its Affiliates; or any consultant or advisor who provides services to the Company or its Affiliates. The Administrator’s granting of an Award to a Participant will not require the Administrator to grant an Award to such individual at any future time. The Administrator’s granting of a particular type of Award to a Participant will not require the Administrator to grant any other type of Award to such individual.

5.    Types of Awards. Subject to the terms of this Plan, the Administrator may grant any type of Award to any Participant it selects, but only employees of the Company or a Subsidiary may receive grants of Incentive Stock Options. Awards may be granted alone or in addition to, in tandem with, or (subject to the prohibition on repricing set forth in Section 15(e)) in substitution for any other Award (or any other award granted under another plan of the Company or any Affiliate).

6.    Shares Reserved under this Plan.

(a)    Plan Reserve. Subject to adjustment as provided in Section 17, the maximum number of Shares that may be issued under the Plan is 3,835,000 Shares, all of which may be issued as Incentive Stock Options. The Shares reserved for issuance may be either authorized and unissued Shares or Shares reacquired at any time and now or hereafter held as treasury stock. The aggregate number of Shares reserved under this Section 6(a) shall be depleted by one Share for each Share subject to any type of an Award. Shares subject to awards that remain outstanding under the Prior Plan shall deplete the Shares available for issuance under this Plan.

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(b)    Replenishment of Shares Under this Plan. If (i) an Award lapses, expires, terminates, or is cancelled without the issuance of Shares under the Award (whether due currently or on a deferred basis), (ii) it is determined during or at the conclusion of the term of an Award that all or some portion of the Shares with respect to which the undersignedAward was granted will not be issuable on the basis that the conditions for such issuance will not be satisfied, or (iii) Shares are forfeited under an Award, then such Shares shall be recredited to the Plan’s reserve (in the same number as they depleted the reserve) and may again be used for new Awards under this Plan. Notwithstanding the foregoing, in no event shall the following Shares be recredited to the Plan’s reserve: Shares tendered in payment of the exercise price of an Option; Shares withheld to satisfy Federal, state, or local tax withholding obligations; and Shares purchased by the Company using proceeds from Option exercises.

(c)    Non-Employee Director and Advisory Committee Award Limitation. In no event shall the aggregate grant date value (determined in accordance with generally accepted accounting principles) of all Awards granted during a fiscal year to a Non-Employee Director or a member of the Advisory Committee of the Board for his or her service on the Board or Advisory Committee, as applicable, taken together with any cash fees paid during that fiscal year to the Non-Employee Director or member of the Advisory Committee for his or her service on the Board or the Advisory Committee, as applicable, exceed $400,000.

7.    Options. Subject to the terms of this Plan, the Administrator will determine all terms and conditions of each Option, including but not limited to:

(a)    Whether the Option is an Incentive Stock Option or a “nonqualified stock option” that does not meet the requirements of Code Section 422;

(b)    The number of Shares subject to the Option;

(c)    The date of grant, which may not be prior to the date of the Administrator’s approval of the grant;

(d)    The exercise price, which may not be less than the Fair Market Value of the Shares subject to the Option as determined on the date of grant; provided that an Incentive Stock Option granted to a 10% Shareholder must have an exercise price at least equal to 110% of the Fair Market Value of the Shares subject to the Option as determined on the date of grant;

(e)    The terms and conditions of exercise, including the manner and form of payment of the exercise price; providedthat if the aggregate Fair Market Value of the Shares subject to all ISOs granted to a Participant (as determined on the date of grant of each such Option) that become exercisable during a calendar year exceeds the dollar limitation set forth in Code Section 422(d), then such ISOs shall be treated as nonqualified stock options to the extent such limitation is exceeded; and

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(f)    The term; provided that each Option must terminate no later than 10 years after the date of grant and each Incentive Stock Option granted to a 10% Shareholder must terminate no later than 5 years after the date of grant.

In all other respects, the terms of any Incentive Stock Option should comply with the provisions of Code Section 422 except to the extent the Administrator determines otherwise. If an Option that is intended to be an Incentive Stock Option fails to meet the requirements thereof, the Option shall automatically be treated as a nonqualified stock option to the extent of such failure.

8.    Stock Appreciation Rights. Subject to the terms of this Plan, the Administrator will determine all terms and conditions of each SAR, including but not limited to:

(a)    The number of Shares to which the SAR relates;

(b)    The date of grant, which may not be prior to the date of the Administrator’s approval of the grant;

(c)    The grant price, provided that the grant price shall not be less than the Fair Market Value of the Shares subject to the SAR as determined on the date of grant;

(d)    The terms and conditions of exercise or maturity;

(e)    The term, provided that each SAR must terminate no later than 10 years after the date of grant; and

(f)    Whether the SAR will be settled in cash, Shares or a combination thereof.

9.    Performance and Stock Awards. Subject to the terms of this Plan, the Administrator will determine all terms and conditions of each award of Restricted Stock, Restricted Stock Units, Performance Shares, or Performance Units, including but not limited to:

(a)    The number of Shares or units to which such Award relates;

(b)    Whether, as a condition for the Participant to realize all or a portion of the benefit provided under the Award, one or more Performance Goals must be achieved during such period as the Administrator specifies;

(c)    The Restriction Period with respect to Restricted Stock and the vesting or deferral period, if any, for Restricted Stock Units;

(d)    The performance period for Performance Awards;

(e)    With respect to Performance Units, whether to measure the value of each unit in relation to a designated dollar value or the Fair Market Value of one or more Shares; and

(f)    With respect to Restricted Stock Units and Performance Units, whether to settle such Awards in cash, in Shares, or a combination thereof.

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Except as otherwise provided in the Plan, at such time as all restrictions applicable to an Award of Restricted Stock are met and the Restriction Period expires, ownership of the Stock subject to such restrictions shall be transferred to the Participant free of all restrictions except those that may be imposed by applicable law.

10.    Cash Incentive Awards. Subject to the terms of this Plan, the Administrator will determine all terms and conditions of a Cash Incentive Award, including but not limited to the Performance Goals, performance period, the potential amount payable, and the timing of payment.

11.    Other Stock-Based Awards. Subject to the terms of this Plan, the Administrator may grant to Participants other types of Awards, which shall be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, Shares, either alone or in addition to or in conjunction with other Awards, and payable in Stock or cash. Without limitation, such Award may include the issuance of Unrestricted Shares (which may be awarded in lieu of cash compensation to which a Participant is otherwise entitled, in exchange for cancellation of a compensation right, as a bonus, upon the attainment of Performance Goals or otherwise) or rights to acquire Stock from the Company. The Administrator shall determine all terms and conditions of the Award, including but not limited to, the time or times at which such Awards shall be made, and the number of Shares to be granted pursuant to such Awards or to which such Award shall relate; provided that any Award that provides for purchase rights shall be priced at 100% of Fair Market Value on the date of grant of the Award; and provided further that the date of grant cannot be prior to the date the Administrator takes action to approve the Award.

12.    Dividends and Dividend Equivalent Units.

(a)    Prohibition. In no event may dividends or Dividend Equivalent Units be paid with respect to Options or SARs.

(b)    Dividends. Unless the Administrator determines otherwise, if the Company pays a cash dividend during the Restriction Period of an Award of Restricted Stock, then such cash dividends will either, at the discretion of the Administrator, be (i) paid in cash concurrently with the dividend payment to other shareholders, (ii) automatically reinvested as additional Restricted Shares that are subject to the same terms and conditions, including the risk of forfeiture, as the original grant of Restricted Shares, or (iii) paid in cash at the same time and to the same extent that the Restricted Shares vest.

(c)    Dividend Equivalent Units. The Administrator may grant Dividend Equivalent Units in tandem with Restricted Stock Units, Performance Shares, Performance Units that are valued in relation to a Share, and any other “full-value Award” that is measured as the full value of a Share, rather than the increase in the value of a Share. Dividend Equivalent Units will either, at the discretion of the Administrator, be: (i) paid in cash concurrently with dividends paid to shareholders, (ii) accumulated and paid, in cash or Shares (at the Administrator’s discretion) at the same time and to the same extent that the tandem Award vests or is earned, or (iii) reinvested in additional units that are subject to the same terms and conditions (including vesting and forfeiture) as the tandem Award; provided, however, that Dividend Equivalent Units that relate to Performance Awards that are contingent on the achievement of a Performance Goal at the time the cash dividend or other distribution is paid with respect to a Share shall also be contingent on the achievement of such Performance Goal and shall not be paid unless and until such Performance Goal is achieved.

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13.    Effect of Termination of Employment or Service on Awards. The Administrator shall have the discretion to determine, at the time an Award is made to a Participant or any time thereafter, the effect of the Participant’s termination of employment or service with the Company and its Affiliates on the Award.

14.    Transferability.

(a)    Restrictions on Transfer. No Award (other than Unrestricted Shares), and no right under any such Award, shall be assignable, alienable, saleable, or transferable by a Participant otherwise than by will or by the laws of descent and distribution, unless and to the extent the Administrator allows a Participant to: (i) designate in writing a beneficiary to exercise the Award after the Participant’s death; or (ii) transfer an Award.

(b)    Restrictions on Exercisability. Each Option or Stock Appreciation Right, and each purchase right under any Award, shall be exercisable during the lifetime of the Participant only by such individual or, if permissible under applicable law, by such individual’s guardian or legal representative.

15.    Termination and Amendment of Plan; Amendment, Modification or Cancellation of Awards.

(a)    Term of Plan. Unless the Board or Committee earlier terminates this Plan pursuant to Section 15(b), this Plan will terminate on the date all Shares reserved for issuance have been issued. If the term of this Plan extends beyond 10 years from the Effective Date, no Incentive Stock Options may be granted after such time unless the shareholders of the Company have approved an extension of this Plan for such purpose.

(b)    Termination and Amendment. The Board or the Committee may amend, alter, suspend, discontinue, or terminate this Plan at any time, subject to the following limitations:

(i)    the Board must approve any amendment of this Plan to the extent the Company determines such approval is required by: (A) prior action of the Board, (B) applicable corporate law, or (C) any other applicable law;

(ii)    shareholders must approve any amendment of this Plan to the extent the Company determines such approval is required by: (A) Section 16 of the Exchange Act, (B) the Code, (C) the listing requirements of any principal securities exchange or market on which the Shares are then traded, or (D) any other applicable law; and

(iii)    shareholders must approve any of the following Plan amendments: (A) an amendment to materially increase any number of Shares specified in Section 6(a) (except as permitted by Section 17), (B) an amendment to materially expand the group of individuals that may become Participants, or (C) an amendment that would diminish the protections afforded by Section 15(e).

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(c)    Amendment, Modification, Cancellation and Disgorgement of Awards.

(i)    Subject to the requirements of the Plan, including the limitations of Section 3(a) and Section 15(e), the Administrator may modify, amend, or cancel any Award or waive any restrictions or conditions applicable to any Award or the exercise of the Award, providedthat any modification or amendment that materially diminishes the rights of the Participant, or the cancellation of the Award, shall be effective only if agreed to by the Participant or any other person(s) as may then have an interest in the Award, but the Administrator need not obtain Participant (or other interested party) consent for the modification, amendment, or cancellation of an Award pursuant to the provisions of Section 17 or as follows: (A) to the extent the Administrator deems such action necessary to comply with any applicable law or the listing requirements of any principal securities exchange or market on which the Shares are then traded; (B) to the extent the Administrator deems necessary to preserve favorable accounting or tax treatment of any Award for the Company; or (C) to the extent the Administrator determines that such action does not materially and adversely affect the value of an Award or that such action is in the best interest of the affected Participant or any other person(s) as may then have an interest in the Award. Notwithstanding the foregoing, unless determined otherwise by the Administrator, any such amendment shall be made in a manner that will enable an Award intended to be exempt from Code Section 409A to continue to be so exempt, or to enable an Award intended to comply with Code Section 409A to continue to so comply.

(ii)    Any Awards granted pursuant to this Plan, and any Stock issued or cash paid pursuant to an Award, shall be subject to (A) any recoupment, clawback, equity holding, stock ownership or similar policies adopted by the Company from time to time and (B) any recoupment, clawback, equity holding, stock ownership or similar requirements made applicable by law, regulation or listing standards to the Company from time to time.

(iii)    Unless the Award agreement specifies otherwise, the Administrator may cancel any Award at any time if the Participant is not in compliance with all applicable provisions of the Award agreement and the Plan.

(d)    Survival of Authority and Awards. Notwithstanding the foregoing, the authority of the Board and the Administrator under this Section 15 and to otherwise administer the Plan will extend beyond the date of this Plan’s termination. In addition, termination of this Plan will not affect the rights of Participants with respect to Awards previously granted to them, and all unexpired Awards will continue in force and effect after termination of this Plan except as they may lapse or be terminated by their own terms and conditions.

(e)    Repricing and Backdating Prohibited. Notwithstanding anything in this Plan to the contrary, and except for the adjustments provided in Section 17, neither the Administrator nor any other person may (i) amend the terms of outstanding Options or SARs to reduce the exercise price of such outstanding Options or SARs; (ii) cancel outstanding Options or SARs in exchange for Options or SARs with an exercise price that is less than the exercise price of the original Options or SARs; or (iii) cancel outstanding Options or SARs with an exercise price above the current Share price in exchange for cash or other securities. In addition, the Administrator may not make a grant of an Option or SAR with a grant date that is effective prior to the date the Administrator takes action to approve such Award.

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(f)    Foreign Participation. To assure the viability of Awards granted to Participants employed or residing in foreign countries, if any, the Administrator may provide for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Moreover, the Administrator may approve such supplements to, or amendments, restatements, or alternative versions of, this Plan as it determines is necessary or appropriate for such purposes. Any such amendment, restatement, or alternative versions that the Administrator approves for purposes of using this Plan in a foreign country will not affect the terms of this Plan for any other country. In addition, all such supplements, amendments, restatements, or alternative versions must comply with the provisions of Section 15(b).

In addition, if an Award is held by a Participant who is employed or residing in a foreign country and the amount payable or Shares issuable under such Award would be taxable to the Participant under Code Section 457A in the year such Award is no longer subject to a substantial risk of forfeiture, then the amount payable or Shares issuable under such Award shall be paid or issued to the Participant as soon as practicable after such substantial risk of forfeiture lapses (or, for Awards that are not considered nonqualified deferred compensation subject to Code Section 409A, no later than the end of the short-term deferral period permitted by Code Section 457A) notwithstanding anything in this Plan or the Award agreement to contrary.

(g)    Code Section409A. The provisions of Code Section 409A are incorporated herein by reference to the extent necessary for any Award that is subject to Code Section 409A to comply therewith.

16.    Taxes.

(a)    Withholding. In the event the Company or an Affiliate of the Company is required to withhold any Federal, state, or local taxes or other amounts in respect of any income recognized by a Participant as a result of the grant, vesting, payment, or settlement of an Award or disposition of any Shares acquired under an Award, the Company may deduct (or require an Affiliate to deduct) from any payments of any kind otherwise due the Participant cash, or with the consent of the Administrator, Shares otherwise deliverable or vesting under an Award, to satisfy such tax obligations. Alternatively, the Company may require such Participant to pay to the Company, in cash, promptly on demand, or make other arrangements satisfactory to the Company regarding the payment to the Company of the aggregate amount of any such taxes and other amounts. If Shares are deliverable upon exercise or payment of an Award, the Administrator may permit a Participant to satisfy all or a portion of the Federal, state, and local withholding tax obligations arising in connection with such Award by electing to (a) have the Company withhold Shares otherwise issuable under the Award, (b) tender back Shares received in connection with such Award or (c) deliver other previously owned Shares; provided that the amount to be withheld may not exceed the maximum statutory Federal, state, and local tax withholding obligations associated with the transaction to the extent needed for the Company to avoid an accounting charge. If an election is provided, the election must be made on or before the date as of which the amount of tax to be withheld is determined and otherwise as the Administrator requires. In any case, the Company may defer making payment or delivery under any Award if any such tax may be pending unless and until indemnified to its satisfaction.

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(b)    No Guarantee of Tax Treatment. Notwithstanding any provisions of the Plan, the Company does not guarantee to any Participant or any other Person with an interest in an Award that (i) any Award intended to be exempt from Code Section 409A shall be so exempt, (ii) any Award intended to comply with Code Section 409A or Code Section 422 shall so comply, (iii) any Award shall otherwise receive a specific tax treatment under any other applicable tax law, nor in any such case will the Company or any Affiliate indemnify, defend, or hold harmless any individual with respect to the tax consequences of any Award.

(c)    Participant Responsibilities. If a Participant shall dispose of Stock acquired through exercise of an ISO within either (i) two years after the date the Option is granted or (ii) one year after the date the Option is exercised (i.e., in a disqualifying disposition), such Participant shall notify the Company within seven days of the date of such disqualifying disposition. In addition, if a Participant elects, under Code Section 83, to be taxed at the time an Award of Restricted Stock (or other property subject to such Code section) is made, rather than at the time the Award vests, such Participant shall notify the Company within seven days of the date the Participant makes such an election.

17.    Adjustment Provisions; Change of Control.

(a)    Adjustment of Shares. If: (i) the Company shall at any time be involved in a merger or other transaction in which the Shares are changed or exchanged; (ii) the Company shall subdivide or combine the Shares or the Company shall declare a dividend payable in Shares, other securities, or other property; (iii) the Company shall effect a cash dividend the amount of which, on a per Share basis, exceeds 10% of the Fair Market Value of a Share at the time the dividend is declared, or the Company shall effect any other dividend or other distribution on the Shares in the form of cash, or a repurchase of Shares, that the Board determines by resolution is special or extraordinary in nature or that is in connection with a transaction that the Company characterizes publicly as a recapitalization or reorganization involving the Shares; or (iv) any other event shall occur, which, in the case of this clause (iv), in the judgment of the Board or Committee necessitates an adjustment to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Plan, then the Administrator shall, in such manner as it may deem equitable to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Plan, adjust as applicable: (A) the number and type of Shares subject to this Plan (including the number and type of Shares described in Section 6) and which may after the event be made the subject of Awards; (B) the number and type of Shares subject to outstanding Awards; (C) the grant, purchase, or exercise price with respect to any Award; and (D) the Performance Goals of an Award. In any such case, the Administrator may also (or in lieu of the foregoing) make provision for a cash payment to the holder of an outstanding Award in exchange for the cancellation of all or a portion of the Award (without the consent of the holder of an Award) in an amount determined by the Administrator and effective at such time as the Administrator specifies (which may be the time such transaction or event is effective). However, in each case, with respect to Awards of Incentive Stock Options, no such adjustment may be authorized to the extent that such authority would cause this Plan to violate Code Section 422(b). Further, the number of Shares subject to any Award payable or denominated in Shares must always be a whole number. In any event, previously granted Options or SARs are subject only to such adjustments as are necessary to maintain the relative proportionate interest the Options and SARs represented immediately prior to any such event and to preserve, without exceeding, the value of such Options or SARs.

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Without limitation, in the event of any reorganization, merger, consolidation, combination, or other similar corporate transaction or event, whether or not constituting a Change of Control (other than any such transaction in which the Company is the continuing corporation and in which the outstanding Stock is not being converted into or exchanged for different securities, cash or other property, or any combination thereof), the Administrator may substitute, on an equitable basis as the Administrator determines, for each Share then subject to an Award and the Shares subject to this Plan (if the Plan will continue in effect), the number and kind of shares of stock, other securities, cash or other property to which holders of Stock are or will be entitled in respect of each Share pursuant to the transaction.

Notwithstanding the foregoing, in the case of a stock dividend (other than a stock dividend declared in lieu of an ordinary cash dividend) or subdivision or combination of the Shares (including a reverse stock split), if no action is taken by the Administrator, adjustments contemplated by this subsection that are proportionate shall nevertheless automatically be made as of the date of such stock dividend or subdivision or combination of the Shares.

(b)    Issuance or Assumption. Notwithstanding any other provision of this Plan, and without affecting the number of Shares otherwise reserved or available under this Plan, in connection with any merger, consolidation, acquisition of property or stock, or reorganization, the Administrator may authorize the issuance or assumption of awards under this Plan upon such terms and conditions as it may deem appropriate, subject to the listing requirements of any principal securities exchange or market on which the Shares are then traded.

(c)    Change of Control. If the Participant has in effect an employment, retention, change of control, severance, or similar agreement with the Company or any Affiliate that discusses the effect of a Change of Control on the Participant’s Awards, then such agreement shall control. In all other cases, unless provided otherwise in an Award agreement or by the Administrator prior to the date of the Change of Control, in the event of a Change of Control:

(i)    If the purchaser, successor, or surviving corporation (or parent thereof) (the “Survivor”) so agrees, some or all outstanding Awards shall be assumed, or replaced with the same type of award with similar terms and conditions, by the Survivor in the Change of Control transaction. If applicable, each Award that is assumed by the Survivor shall be appropriately adjusted, immediately after such Change of Control, to apply to the number and class of securities that would have been issuable to the Participant upon the consummation of such Change of Control had the Award been exercised, vested, or earned immediately prior to such Change of Control, and other appropriate adjustments in the terms and conditions of the Award shall be made.

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(ii)    To the extent the Survivor in the Change of Control transaction does not agree to assume the Awards or issue replacement awards as provided in clause (i), then immediately prior to the date of the Change of Control:

(A)         Each Option or SAR that is then held by a Participant who is employed by or in the service of the Company or an Affiliate shall become immediately and fully vested, and, unless otherwise determined by the Board or Committee, all Options and SARs shall be cancelled on the date of the Change of Control in exchange for a cash payment to be made within 30 days after the Change of Control equal to the excess of the Change of Control price of the Shares covered by the Option or SAR that is so cancelled over the purchase or grant price of such Shares under the Award.

(B)         Restricted Stock and Restricted Stock Units (that are not Performance Awards) that are not then vested shall immediately vest and, with respect to Restricted Stock Units, be cancelled on the date of the Change of Control in exchange for a cash payment to be made within 30 days after the Change of Control equal to the Change of Control price of the Shares covered by the Award.

(C)         All Performance Awards and Cash Incentive Awards that are earned but not yet paid shall be paid upon the Change of Control, and all Performance Awards and Cash Incentive Awards for which the performance period has not expired shall be cancelled on the date of the Change of Control in exchange for a cash payment to be made within 30 days after the Change of Control equal to the product of (1) the target value payable to the Participant under his or her Award and (2) a fraction, the numerator of which is the number of days after the first day of the performance period on which the Change of Control occurs and the denominator of which is the number of days in the performance period. The target value for a Performance Share, Restricted Stock Unit, or other Award that represents the right to receive Shares (or a cash payment equal to the Fair Market Value of Shares) shall equal the target number of Shares that can be earned under the award multiplied by the Change of Control Price.

(D)         All other Awards that are not vested shall vest and if an amount is payable under such vested Award, such amount shall be paid in cash based on the value of the Award.

(iii)    In the event that (A) the Survivor terminates the Participant’s employment or service without Cause or (B) if the Participant has in effect an employment, retention, change of control, severance or similar agreement with the Company or any Affiliate that contemplates the termination of his or her employment or service for good reason, and the Participant terminates his or her employment or service for good reason (as defined in such agreement), in the case of either (A) or (B) within 24 months following a Change of Control, then the following provisions shall apply to any assumed Awards or replacement awards described in paragraph (i) and any Awards not cancelled in connection with the Change of Control pursuant to paragraph (ii), unless the terms of the Award agreement or the Participant’s employment, retention, change of control, severance, or similar agreement provide a more favorable result to the Participant:

(A)         Effective upon the date of the Participant’s termination of employment or service, all outstanding Awards or replacement awards automatically shall vest (assuming for any Award the vesting of which is subject to Performance Goals, that such goals had been met at the target level); and

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(B)         With respect to Options or Stock Appreciation Rights, at the election of the Participant, such Awards or replacement awards shall be cancelled as of the date of such termination in exchange for a payment in cash or Shares (which may include shares or other securities of the Survivor) to be made within 30 days after the date of termination equal to the excess of the Fair Market Value of the Shares on the date of such termination covered by the portion of the Option or Stock Appreciation Right that has not been exercised over the exercise or grant price of such Shares under the Award; and

(C)          With respect to Restricted Stock or Restricted Stock Units, such Awards or replacement awards shall be cancelled as of the date of such termination in exchange for a payment in cash or Shares (which may include shares or other securities of the Survivor) to be made within 30 days after the date of termination equal to the Fair Market Value of a Share on the date of such termination; and

(D)         With respect to Performance Awards and Cash Incentive Awards that are earned but not yet paid, such Awards or replacement awards shall be paid upon the termination of employment or service, and with respect to Performance Awards and Cash Incentive Awards for which the performance period has not expired, such Awards shall be cancelled in exchange for a cash payment to be made within 30 days after the date of termination equal to the product of (1) the target value payable to the Participant under his or her Award and (2) a fraction, the numerator of which is the number of days after the first day of the performance period on which the termination occurs and the denominator of which is the number of days in the performance period. The target value for a Performance Share, Restricted Stock Unit, or other Award that represents the right to receive Shares (or a cash payment equal to the Fair Market Value of Shares) shall equal the target number of Shares that can be earned under the award multiplied by the Fair Market Value of a Share on the date of termination; and

(E)          With respect to other Awards, such Awards or replacement awards shall be cancelled as of the date of such termination in exchange for a payment in cash in an amount equal to the value of the Award.

Notwithstanding anything to the contrary in the foregoing, if the Participant has a deferral election in effect with respect to any amount payable under this Section 17(c), such amount shall be deferred pursuant to such election and shall not be paid in a lump sum as provided herein; provided that, with respect to amounts payable to a Participant (or the Participant’s beneficiary or estate) who is entitled to vote,a payment hereunder because the Participant’s employment terminated as a result of death or Disability, or payable to a Participant who has met the requirements for Retirement (without regard to whether the Participant has terminated employment), no payment shall be made unless the Change of Control also constitutes a change of control within the meaning of Code Section 409A.

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(d)    Application of Limits on Payments. Except to the extent the Participant has in effect an employment or similar agreement with the Company or any Affiliate or is subject to a policy that provides for a more favorable result to the Participant upon a Change of Control, in the event that the Company’s legal counsel determine that any payment, benefit, or transfer by the Company under this Plan or any other plan, agreement, or arrangement to or for the benefit of the Participant (in the aggregate, the “Total Payments”) to be subject to the tax (“Excise Tax”) imposed by Code Section 4999 but for this subsection (d), then, notwithstanding any other provision of this Plan to the contrary, the Total Payments shall be delivered either (i) in full or (ii) in an amount such that the value of the aggregate Total Payments that the Participant is entitled to receive shall be $1.00 less than the maximum amount that the Participant may receive without being subject to the Excise Tax, whichever of (i) or (ii) results in the receipt by the Participant of the greatest benefit on an after-tax basis (taking into account applicable Federal, state, and local income taxes and the Excise Tax). In the event that (ii) results in their discretion,a greater after‑tax benefit to votethe Participants, payments or benefits included in the Total Payments shall be reduced or eliminated by applying the following principles, in order: (A) the payment or benefit with the higher ratio of the parachute payment value to present economic value (determined using reasonable actuarial assumptions) shall be reduced or eliminated before a payment or benefit with a lower ratio; (B) the payment or benefit with the later possible payment date shall be reduced or eliminated before a payment or benefit with an earlier payment date; and (C) cash payments shall be reduced prior to non-cash benefits; provided that if the foregoing order of reduction or elimination would violate Code Section 409A, then the reduction shall be made pro rata among the payments or benefits included in the Total Payments (on the basis of the relative present value of the parachute payments).

18.    Miscellaneous.

(a)    Other Terms and Conditions. The grant of any Award may also be subject to other provisions (whether or not applicable to the Award granted to any other Participant) as the Administrator determines appropriate, including, without limitation, provisions for:

(i)    the payment of the purchase price of Options by delivery of cash or other Shares or other securities of the Company (including by attestation) having a then Fair Market Value equal to the purchase price of such Shares, or by delivery to the Company or its designated agent of an executed irrevocable option exercise form together with irrevocable instructions to a broker-dealer to sell or margin a sufficient portion of the Shares and deliver the sale or margin loan proceeds directly to the Company to pay for the exercise price;

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(ii)     one or more means to enable Participants to defer the delivery of Shares or recognition of taxable income relating to Awards or cash payments derived from the Awards on such terms and conditions as the Administrator determines, including, by way of example, the form and manner of the deferral election, the treatment of dividends paid on the Shares during the deferral period or a means for providing a return to a Participant on amounts deferred, and the permitted distribution dates or events (provided that no such deferral means may result in an increase in the number of Shares issuable under this Plan);

(iii)    restrictions on resale or other disposition of Shares; and

(iv)    compliance with federal or state securities laws and stock exchange requirements.

(b)    Employment and Service. The issuance of an Award shall not confer upon a Participant any right with respect to continued employment or service with the Company or any Affiliate. Unless determined otherwise by the Administrator, for purposes of the Plan and all Awards, the following rules shall apply:

(i)    a Participant who transfers employment between the Company and its Affiliates, or between Affiliates, will not be considered to have terminated employment; and

(ii)    a Participant employed by an Affiliate will be considered to have terminated employment when such entity ceases to be an Affiliate.

Notwithstanding the foregoing, for purposes of an Award that is subject to Code Section 409A, if a Participant’s termination of employment or service triggers the payment of compensation under such Award, then the Participant will be deemed to have terminated employment or service upon his or her “separation from service” within the meaning of Code Section 409A. Notwithstanding any other businessprovision in this Plan or an Award to the contrary, if any Participant is a “specified employee” within the meaning of Code Section 409A as of the date of his or her “separation from service” within the meaning of Code Section 409A, then, to the extent required by Code Section 409A, any payment made to the Participant on account of such separation from service shall not be made before a date that is six months after the date of the separation from service.

(c)    No Fractional Shares. No fractional Shares or other securities may be issued or delivered pursuant to this Plan, and the Administrator may determine whether cash, other securities or other property will be paid or transferred in lieu of any fractional Shares or other securities, or whether such fractional Shares or other securities or any rights to fractional Shares or other securities will be canceled, terminated, or otherwise eliminated.

(d)    Offset. The Company shall have the right to offset, from any amount payable or stock deliverable hereunder, any amount that the Participant owes to the Company or any Affiliate without the consent of the Participant or any individual with a right to the Participant’s Award.

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(e)    Unfunded Plan. This Plan is unfunded and does not create, and should not be construed to create, a trust or separate fund with respect to this Plan’s benefits. This Plan does not establish any fiduciary relationship between the Company and any Participant or other person. To the extent any person holds any rights by virtue of an Award granted under this Plan, such rights are no greater than the rights of the Company’s general unsecured creditors. Income recognized by a Participant pursuant to an Award shall not be included in the determination of benefits under any employee pension benefit plan (as such term is defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended) or group insurance or other benefit plans applicable to the Participant that are maintained by the Company or any Affiliate, except as may properly come beforebe provided under the 2018 Annual Meetingterms of Shareholderssuch plans or determined by resolution of the companyBoard.

(f)    Requirements of Law and Securities Exchange. The granting of Awards and the issuance of Shares in connection with an Award are subject to all applicable laws, rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required. Notwithstanding any other provision of this Plan or any Award agreement, the Company has no liability to deliver any Shares under this Plan or make any payment unless such delivery or payment would comply with all applicable laws and the applicable requirements of any securities exchange or similar entity, and unless and until the Participant has taken all actions required by the Company in connection therewith. The Company may impose such restrictions on any Shares issued under the Plan as the Company determines necessary or desirable to comply with all applicable laws, rules, and regulations or the requirements of any national securities exchange.

(g)    Restrictive Legends; Representations. All Shares delivered (whether in certificated or book entry form) pursuant to any Award or the exercise thereof shall bear such legends or be subject to such stop transfer orders as the Administrator may deem advisable under the Plan or under applicable laws, rules, or regulations or the requirements of any national securities exchange. The Administrator may require each Participant or other Person who acquires Shares under the Plan by means of an Award to represent to the Company in writing that such Participant or other Person is acquiring the Shares without a view to the distribution thereof.

(h)    Governing Law. This Plan, and all agreements under this Plan, will be construed in accordance with and governed by the laws of the State of California, without reference to any conflict of law principles.

(i)    Limitations on Actions. A Participant (or any other person who believes they have an interest in an Award) must bring any legal action or proceeding with respect to this Plan, any Award or any Award agreement, within one year (365 days) after the day the party first knew or should have known of the events giving rise to the complaint.

(j)    Construction. Whenever any words are used herein in the masculine, they shall be construed as though they were used in the feminine in all cases where they would so apply; and wherever any words are used in the singular or plural, they shall be construed as though they were used in the plural or singular, as the case may be, in all cases where they would so apply. Titles of sections are for general information only, and this Plan is not to be held January 25, 2018,construed with reference to such titles. The title, label, or characterization of an Award in an Award agreement or in the Company’s public filings or other disclosures shall not be determinative as to which specific Award type is represented by the Award agreement. Instead, the Administrator may determine which specific type(s) of Award(s) is (are) represented by any Award agreement, at the time such Award is granted or at any adjournmenttime thereafter.

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(k)    Severability. If any provision of this Plan or postponement thereof, with all powers which the undersigned would possess if present at the Meeting.

THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED “FOR” THE ELECTION OF DIRECTORS AND “FOR” PROPOSAL 2. WE RECOMMEND A VOTE “FOR” THE DIRECTORS AND “FOR” PROPOSAL 2.

(Continued andany Award agreement or any Award (a) is or becomes or is deemed to be marked, datedinvalid, illegal, or unenforceable in any jurisdiction, or as to any person or Award, or (b) would disqualify this Plan, any Award agreement or any Award under any law the Administrator deems applicable, then such provision should be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Administrator, materially altering the intent of this Plan, Award agreement or Award, then such provision should be stricken as to such jurisdiction, person or Award, and signed, on the other side)remainder of this Plan, such Award agreement and such Award will remain in full force and effect.

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