Hennessy Mutual Funds, Inc.
(the "Company")
Hennessy Cornerstone Value Fund
Hennessy Cornerstone Growth Fund
(each a "Fund," collectively the "Funds")
September 22, 2000
Supplement to the Statement of Additional
Information Dated January 28, 2000 (as
supplemented June 30, 2000)
Change in Administrator
On September 1, 2000, Firstar Mutual Fund Services, LLC, replaced
Investment Company Administration, LLC, as the Company's administrator.
Accordingly, the paragraph entitled "THE ADMINISTRATOR" on page B-18 is revised
as follows:
Hennessy Mutual Funds, on behalf of the Funds, has retained Firstar
Mutual Fund Services, LLC, 615 East Michigan Street, Milwaukee, WI 53202 (the
"Administrator") to provide administration services to each Fund pursuant to a
Fund Administration Servicing Agreement between Hennessy Mutual Funds and the
Administrator (the "Administration Agreement"). The Administration Agreement
provides that the Administrator will furnish the Funds with various
administrative services including, among others: the preparation and
coordination of reports to the Board of Directors; preparation and filing of
securities and other regulatory filings (including state securities filings),
marketing materials, tax returns and shareholder reports; review and payment of
fund expenses; monitoring and oversight of the activities of the Funds' other
servicing agents (i.e. transfer agent, custodian, accountants, etc.);
maintaining books and records of the Funds; and administering shareholder
accounts. In addition, the Administrator may provide personnel to serve as
officers of Hennessy Mutual Funds. The salaries and other expenses of providing
such personnel are borne by the Administrator.
The Administrator is entitled to receive a fee from each Fund for its
administrative services, computed daily and payable monthly, at the annual rate
of 0.08% of each Fund's first $200 million of average daily net assets, 0.07% on
the next $500 million of such assets, and 0.05% of each Fund's average daily net
assets in excess of $700 million.
On October 11, 1996, and until September 1, 2000, Investment Company
Administration, LLC, ("ICA") served as administrator to the Funds. For the
fiscal year ended September 30, 1999, ICA received a total of $205,483 in
administration fees from the Funds but waived $31,892 of those fees. For the
fiscal year ended September 30, 1998, ICA received a total of $126,059 in
administration fees from the Funds and waived an additional $68,044. During the
fiscal year ended September 30, 1997, ICA received a total of $64,377 in
administration fees from the Funds.
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Change in Distributor
On September 1, 2000, Quasar Distributors, LLC, replaced First Fund
Distributors, Inc. as the Company's distributor. Accordingly, the paragraph
entitled "THE DISTRIBUTOR" on page B-19 is revised as follows:
Hennessy Mutual Funds, on behalf of the Funds, has retained Quasar
Distributors, LLC, 615 East Michigan Street, Suite 200, Milwaukee, WI 53202 (the
"Distributor") to provide distribution-related services to each Fund in
connection with the continuous offering of the Fund's shares. The Distributor
may distribute the shares of the Funds through other broker-dealers with which
it has entered into selected dealer agreements. The Administrator and the
Distributor are affiliates of each other.
On October 11, 1996 and until September 1, 2000, First Fund
Distributors, Inc., ("First Fund") served as distributor to the Funds. For the
fiscal years ended September 30, 1999, 1998 and 1997, First Fund provided
distribution services to the Funds at no cost to the Funds.
