497 1 hft_trusf-497.htm HENNESSY FUNDS TRUST
Filed Pursuant to Rule 497
Investment Company Act File No 811-07168
Securities Act File No. 333-218702
 

RAINIER INVESTMENT MANAGEMENT MUTUAL FUNDS
601 Union Street, Suite 3525
Seattle, Washington 98101
(800) 248-6314
www.rainierfunds.com
 
July 14, 2017
 
Dear Fellow Shareholder:
 
We are writing to let you know about an important shareholder vote coming up for Rainier Investment Management Mutual Funds (the “Rainier Trust”).  We have called a special meeting of shareholders of the Rainier Mid Cap Equity Fund, the Rainier Small/Mid Cap Equity Fund and the Rainier Large Cap Equity Fund (each a “Rainier U.S. Fund” and, together, the “Rainier U.S. Funds”) to be held on September 14, 2017, in the offices of the Rainier Trust at 601 Union Street, Suite 3525, Seattle, Washington 98101.  The purpose of the meeting is to seek shareholder approval of an Agreement and Plan of Reorganization under which (1) the Rainier Mid Cap Equity Fund and the Rainier Small/Mid Cap Equity Fund would be reorganized into the Hennessy Cornerstone Mid Cap 30 Fund and (2) the Rainier Large Cap Equity Fund would be reorganized into the Hennessy Cornerstone Large Growth Fund.  Hennessy Advisors, Inc. (“Hennessy Advisors”) is the investment advisor to the Hennessy Cornerstone Mid Cap 30 Fund and the Hennessy Cornerstone Large Growth Fund (each a “Hennessy Fund” and, together, the “Hennessy Funds”).  The enclosed package contains important information about the proposed reorganization.  For the reorganization to occur, shareholders like you must vote to approve it.
 
If the Rainier U.S. Funds’ shareholders approve the reorganization, the assets of the Rainier Mid Cap Equity Fund and the Rainier Small/Mid Cap Equity Fund will be merged into the Hennessy Cornerstone Mid Cap 30 Fund, and the assets of the Rainier Large Cap Equity Fund will be merged into the Hennessy Cornerstone Large Growth Fund.  Each of the Rainier U.S. Funds and the Hennessy Funds, as applicable, have substantially similar investment objectives.  While over 90% of the investments of the Rainier U.S. Funds are eligible investments for the applicable Hennessy Fund (meaning that over 90% of the investments of the Rainier U.S. Funds are equity securities that are subject to evaluation under the formulas utilized by the Hennessy Funds, and that the Hennessy Funds provide in their prospectus that they may hold indefinitely the portfolio securities transferred to them from another fund pursuant to an acquisition), the Rainier U.S. Funds and the Hennessy Funds do differ in investment strategies, as the Hennessy Funds employ a focused, formula-based approach to their investments.
 
We believe that the Hennessy Funds and the reorganization more generally has a number of desirable features for shareholders.  As noted above, the Hennessy Funds are advised by Hennessy Advisors.  Founded in 1989, Hennessy Advisors, with assets under management of nearly $6.55 billion as of May 31, 2017, is focused on providing high quality investment management and shareholder services for the Hennessy Funds.  As more fully described in the attached Proxy Statement/Prospectus, the Hennessy Funds have had strong past performance.
 
In addition, we understand that the proposed reorganization is not expected to have any adverse federal or state tax consequences to the Rainier U.S. Funds or their shareholders.
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The Board of Trustees of the Rainier Trust evaluated the proposed reorganization at a Board meeting held on June 1, 2017, and following careful analysis and consideration, unanimously approved the Agreement and Plan of Reorganization providing for the proposed reorganization transaction and recommends that you vote “FOR” the Agreement and Plan of Reorganization as well.  Please read the enclosed Proxy Statement/Prospectus and related materials carefully, and if you have any questions on the terms of the reorganization, please call the Rainier Trust at 800-248-6314.
 
If you are a shareholder of record as of the close of business on June 28, 2017, you are entitled to vote at the special meeting and at any postponements or adjournments thereof.  While we welcome you to join us at the special meeting, we expect that most shareholders will cast their votes by proxy.  Whether or not you are planning to attend the special meeting, we ask that you vote your shares for the reorganization as soon as possible.  Voting is easy and can be done in the following ways:
 
Simply mark, sign and date the enclosed proxy card and return it in the postage prepaid envelope;
Call the toll-free telephone number listed on the proxy card and follow the instructions to vote your shares;
Via the Internet at the website shown on the proxy card; or
In person at the special meeting of shareholders.
Thank you for your investment and confidence in Rainier U.S. Funds.
 
Sincerely,
 
/s/ Michele T. Mosca
 
Michele T. Mosca
Chief Executive Officer and President
Rainier Investment Management Mutual Funds
 
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the reorganization described in the Proxy Statement/Prospectus or the securities to be issued pursuant to the reorganization under the Proxy Statement/Prospectus or determined if the Proxy Statement/Prospectus is accurate or adequate.  Any representation to the contrary is a criminal offense.
 
________________________________
The enclosed Proxy Statement/Prospectus is dated July 14, 2017, and is
first being mailed to shareholders on or about July 21, 2017.
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RAINIER INVESTMENT MANAGEMENT MUTUAL FUNDS
601 Union Street, Suite 3525
Seattle, Washington 98101
(800) 248-6314
www.rainierfunds.com

 
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 14, 2017
 
A special meeting of shareholders of the Rainier Mid Cap Equity Fund, the Rainier Small/Mid Cap Equity Fund and the Rainier Large Cap Equity Fund, each a series (each a “Rainier U.S. Fund” and, together, the “Rainier U.S. Funds”) of Rainier Investment Management Mutual Funds (the “Rainier Trust”), a Delaware statutory trust, will be held on Thursday, September 14, 2017, at 10:00 a.m. local time, in the offices of the Rainier Trust at 601 Union Street, Suite 3525, Seattle, Washington 98101.  At the special meeting, you and the other shareholders of each Rainier U.S. Fund will be asked to consider and vote upon:
 
1.
A proposal to approve an Agreement and Plan of Reorganization (the “Plan”) pursuant to which:
a.
all of the assets of the Rainier Mid Cap Equity Fund will be transferred to the Hennessy Cornerstone Mid Cap 30 Fund, in exchange for Investor Class and Institutional Class shares of the Hennessy Cornerstone Mid Cap 30 Fund, which will be distributed pro rata by the Rainier Mid Cap Equity Fund to its Original Class and Institutional Class shareholders, respectively, and the Hennessy Cornerstone Mid Cap 30 Fund will assume the Rainier Mid Cap Equity Fund’s liabilities (other than the excluded liabilities);

b.
all of the assets of the Rainier Small/Mid Cap Equity Fund will be transferred to the Hennessy Cornerstone Mid Cap 30 Fund, in exchange for Investor Class and Institutional Class shares of the Hennessy Cornerstone Mid Cap 30 Fund, which will be distributed pro rata by the Rainier Small/Mid Cap Equity Fund to its Original Class and Institutional Class shareholders, respectively, and the Hennessy Cornerstone Mid Cap 30 Fund will assume the Rainier Small/Mid Cap Equity Fund’s liabilities (other than the excluded liabilities); and

c.
all of the assets of the Rainier Large Cap Equity Fund will be transferred to the Hennessy Cornerstone Large Growth Fund, in exchange for Investor Class and Institutional Class shares of the Hennessy Cornerstone Large Growth Fund, which will be distributed pro rata by the Rainier Large Cap Equity Fund to its Original Class and Institutional Class shareholders, respectively, and the Hennessy Cornerstone Large Growth Fund will assume the Rainier Large Cap Equity Fund’s liabilities (other than the excluded liabilities).
 
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2.
 
If necessary, a proposal to adjourn the special meeting to permit further solicitation of proxies in the event a quorum does not exist or a quorum exists but there are not sufficient votes at the time of the special meeting to approve the Plan; and
3.
To transact such other business that may properly come before the special meeting or any postponements or adjournments thereof.
Each of the Rainier U.S. Funds and the Hennessy Funds, as applicable, have substantially similar investment objectives.  While over 90% of the investments of the Rainier U.S. Funds are eligible investments for the applicable Hennessy Fund (meaning that over 90% of the investments of the Rainier U.S. Funds are equity securities that are subject to evaluation under the formulas utilized by the Hennessy Funds, and that the Hennessy Funds provide in their prospectus that they may hold indefinitely the portfolio securities transferred to them from another fund pursuant to an acquisition), the Rainier U.S. Funds and the Hennessy Funds do differ in investment strategies, as the Hennessy Funds employ a focused, formula-based approach to their investments.
 
Only shareholders of record at the close of business on June 28, 2017, the record date for the special meeting, shall be entitled to notice of, and to vote at, the special meeting or any postponements or adjournments thereof.  This proxy is being solicited on behalf of the Rainier Trust.
 
YOUR VOTE IS IMPORTANT.  PLEASE RETURN YOUR PROXY
CARD PROMPTLY OR VOTE BY USING THE TOLL-FREE
TELEPHONE OR INTERNET ADDRESS FOUND ON YOUR PROXY CARD.

 
 
Whether or not you plan to attend the meeting, we urge you to authorize proxies to cast your votes.  You can do this in one of the following three ways:  (1) by completing, signing, dating and promptly returning the enclosed proxy card in the enclosed postage prepaid envelope; (2) by calling the toll-free telephone number listed on your proxy card, or (3) via the Internet at the website shown on your proxy card.  Your prompt voting by proxy will help ensure a quorum at the special meeting.  Voting by proxy will not prevent you from voting your shares in person at the special meeting.  You may revoke your proxy before it is exercised at the special meeting, either by writing to the Corporate Secretary of the Rainier Trust at the address noted in the Proxy Statement/Prospectus or in person at the time of the special meeting.  A prior proxy can also be revoked by proxy voting again through the website or toll-free telephone number listed above.
 

RAINIER INVESTMENT MANAGEMENT MUTUAL FUNDS
 
/s/ Michele T. Mosca
 
Michele T. Mosca
Chief Executive Officer and President
July 14, 2017
 
 
 
Important Notice Regarding the Availability of Proxy Materials for this Special Meeting of Shareholders to Be Held on September 14, 2017: The Notice, Proxy Statement, most recent Annual Report of the Rainier U.S. Funds, most recent Annual and Semi-Annual Reports of the Hennessy Funds and Form of Proxy are available at www.proxyvote.com.
 
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RAINIER INVESTMENT MANAGEMENT MUTUAL FUNDS
601 Union Street, Suite 3525
Seattle, Washington 98101
(800) 248-6314
www.rainierfunds.com

 
QUESTIONS AND ANSWERS
 
YOUR VOTE IS VERY IMPORTANT!
Dated:  July 14, 2017
 
Question 1:  What is this document and why did we send it to you?
 
Answer:  This document includes a notice of special meeting of shareholders, a combined Proxy Statement/Prospectus, and a form of proxy.  The Board of Trustees of Rainier Investment Management Mutual Funds, a Delaware statutory trust (the “Rainier Trust”), on behalf of the Rainier Mid Cap Equity Fund, the Rainier Small/Mid Cap Equity Fund and the Rainier Large Cap Equity Fund, each a series of the Rainier Trust (each a “Rainier U.S. Fund” and, together, the “Rainier U.S. Funds”), has approved an Agreement and Plan of Reorganization (the “Plan”) between Hennessy Funds Trust and the Rainier Trust (the “Reorganization”) pursuant to which (i) all of the assets of the Rainier Mid Cap Equity Fund will be transferred to the Hennessy Cornerstone Mid Cap 30 Fund, in exchange for Investor Class and Institutional Class shares of the Hennessy Cornerstone Mid Cap 30 Fund, which will be distributed pro rata by the Rainier Mid Cap Equity Fund to its Original Class and Institutional Class shareholders, respectively, and the Hennessy Cornerstone Mid Cap 30 Fund will assume the Rainier Mid Cap Equity Fund’s liabilities (other than the excluded liabilities); (ii) all of the assets of the Rainier Small/Mid Cap Equity Fund will be transferred to the Hennessy Cornerstone Mid Cap 30 Fund, in exchange for Investor Class and Institutional Class shares of the Hennessy Cornerstone Mid Cap 30 Fund, which will be distributed pro rata by the Rainier Small/Mid Cap Equity Fund to its Original Class and Institutional Class shareholders, respectively, and the Hennessy Cornerstone Mid Cap 30 Fund will assume the Rainier Small/Mid Cap Equity Fund’s liabilities (other than the excluded liabilities); and (iii) all of the assets of the Rainier Large Cap Equity Fund will be transferred to the Hennessy Cornerstone Large Growth Fund, in exchange for Investor Class and Institutional Class shares of the Hennessy Cornerstone Large Growth Fund, which will be distributed pro rata by the Rainier Large Cap Equity Fund to its Original Class and Institutional Class shareholders, respectively, and the Hennessy Cornerstone Large Growth Fund will assume the Rainier Large Cap Equity Fund’s liabilities (other than the excluded liabilities).  The Hennessy Cornerstone Mid Cap 30 Fund and the Hennessy Cornerstone Large Growth Fund are referred to herein as each a “Hennessy Fund” and, together, the “Hennessy Funds.”
 
Each of the Rainier U.S. Funds and the Hennessy Funds, as applicable, have substantially similar investment objectives.  While over 90% of the investments of the Rainier U.S. Funds are eligible investments for the applicable Hennessy Fund (meaning that over 90% of the investments of the Rainier U.S. Funds are equity securities that are subject to evaluation under the formulas utilized by the Hennessy Funds, and that the Hennessy Funds provide in their prospectus that they may hold indefinitely the portfolio securities transferred to them from another fund pursuant to an acquisition), the Rainier U.S. Funds and the Hennessy Funds do
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differ in investment strategies, as the Hennessy Funds employ a focused, formula-based approach to their investments.
 
Shareholder approval of each of the Rainier U.S. Funds is needed to proceed with the Reorganization and a special meeting of shareholders of each of the Rainier U.S. Funds will be held on September 14, 2017, to consider whether to approve the Plan and implement the Reorganization.  The Rainier Trust’s Board of Trustees is sending this document to you for your use in deciding whether to approve the Plan at the special meeting.
 
Question 2: What is the reason for the Reorganization?
 
Answer:  Rainier Investment Management, LLC (“Rainier”), the investment advisor to the Rainier Trust, recently completed a strategic review of the management and operations of the Rainier U.S. Funds and determined that it would be advisable to pursue the reorganization of the Rainier U.S. Funds with another fund group.  Following this strategic review process, Rainier identified Hennessy Advisors, Inc. (“Hennessy Advisors”) as an asset management firm that it believes can successfully manage the investments of the current shareholders of the Rainier U.S. Funds following the completion of the proposed Reorganization of the Rainier U.S. Funds into the Hennessy Funds.  Rainier believes Hennessy Advisors is focused on providing high-quality investment management services and customer service to the Hennessy Funds and its shareholders and the Hennessy Funds are well suited to acquire the assets of the Rainier U.S. Funds.
 
Rainier therefore made a recommendation to the Rainier Trust’s Board of Trustees to approve the Reorganization of the Rainier U.S. Funds with and into the Hennessy Funds, and, following careful analysis and consideration, the Rainier Trust’s Board of Trustees approved the Plan providing for the proposed Reorganization transaction after concluding that the implementation of the Reorganization is advisable and in the best interests of the Rainier U.S. Funds’ shareholders.  The Rainier Trust’s Board of Trustees recommends that you vote “FOR” the Plan.
 
Question 3: How will the Rainier U.S. Funds and their shareholders be affected by the Reorganization?
 
Answer:  As a result of the Reorganization, the Rainier U.S. Funds will become part of the Hennessy Funds with Hennessy Advisors as the investment advisor.  The following is information regarding the fees and expenses of the Hennessy Funds as compared to the Rainier U.S. Funds:
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Rainier Mid Cap
Equity Fund
  (Original Class)  
Rainier Small/Mid Cap Equity Fund
  (Original Class)  
Hennessy Cornerstone
Mid Cap 30 Fund
Pro Forma
  (Investor Class)  
       
Advisory Fee
0.85%
0.85%
0.74%
       
Expense Ratio(1)
1.44%
1.39%
1.34%
       
Savings in Expense Ratio
as Compared to Hennessy
Cornerstone Mid Cap 30
Fund Pro Forma
(Investor)
0.10%
0.05%
N/A
 
(1)   The expense ratios for Original Class shares of the Rainier Mid Cap Equity Fund and the Rainier Small/Mid Cap Equity Fund shown above are the gross expense ratios from the Annual Report of the Rainier U.S. Funds dated March 31, 2017.  The pro forma expense ratio for Investor Class shares of the Hennessy Cornerstone Mid Cap 30 Fund shown above is based on the expense ratio from the Semi-Annual Report of the Hennessy Cornerstone Mid Cap 30 Fund dated April 30, 2017.  Hennessy Advisors has agreed that the fees and expenses attributable to Investor Class shares of the Hennessy Cornerstone Mid Cap 30 Fund will be capped, pursuant to the written direction of the Board of Trustees of Hennessy Funds Trust, to the extent necessary so that expenses (exclusive of all federal, state, and local taxes, interest, brokerage commissions, acquired fund fees and expenses and other costs incurred in connection with the purchase and sale of securities, and extraordinary items) do not exceed the total annual fees and expenses of Original Class shares of the Rainier Small/Mid Cap Equity Fund as reflected in the table above for a period of two years from the date of the Reorganization.

 
Rainier Mid Cap
Equity Fund
  (Institutional Class) 
Rainier Small/Mid Cap Equity Fund
  (Institutional Class) 
Hennessy Cornerstone
Mid Cap 30 Fund
Pro Forma
  (Institutional Class)  
       
Advisory Fee
0.85%
0.85%
0.74%
       
Expense Ratio(1)
1.17%
1.07%
0.97%
       
Savings in Expense Ratio
as Compared to Hennessy
Cornerstone Mid Cap 30
Fund Pro Forma
(Institutional)
0.20%
0.10%
N/A
 
(1)    The expense ratios for Institutional Class shares of the Rainier Mid Cap Equity Fund and the Rainier Small/Mid Cap Equity Fund shown above are the gross expense ratios from the Annual Report of the Rainier U.S. Funds dated March 31, 2017.  The pro forma expense ratio for Institutional Class shares of the Hennessy Cornerstone Mid Cap 30 Fund shown above is based on the expense ratio from the Semi-Annual Report of the Hennessy Cornerstone Mid Cap 30 Fund dated April 30, 2017.  Hennessy Advisors has agreed that the fees and expenses attributable to Institutional Class shares of the Hennessy Cornerstone Mid Cap 30 Fund will be capped, pursuant to the written direction of the Board of Trustees of Hennessy Funds Trust, to the extent necessary so that expenses (exclusive of all federal, state, and local taxes, interest, brokerage commissions, acquired fund fees and expenses and other costs incurred in connection with the purchase and sale of securities, and extraordinary items) do not exceed the total annual fees and expenses of Institutional Class shares of the Rainier Small/Mid Cap Equity Fund as reflected in the table above for a period of two years from the date of the Reorganization.
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Rainier Large Cap Equity Fund
  (Original Class)  
Hennessy Cornerstone Large Growth Fund
Pro Forma
  (Investor Class)  
     
Advisory Fee
0.70%
0.74%
     
Expense Ratio(1)
1.29%
1.26%
     
Savings in Expense Ratio as
Compared to Hennessy Cornerstone
Large Growth Fund Pro Forma
(Investor)
0.03%
N/A
 
(1)    The expense ratio for Original Class shares of the Rainier Large Cap Equity Fund shown above is the gross expense ratio from the Annual Report of the Rainier U.S. Funds dated March 31, 2017.   The pro forma expense ratio for Investor Class shares of the Hennessy Cornerstone Large Growth Fund shown above is based on the expense ratio from the Semi-Annual Report of the Hennessy Cornerstone Large Growth Fund dated April 30, 2017.  Hennessy Advisors has agreed that the fees and expenses attributable to Investor Class shares of the Hennessy Cornerstone Large Growth Fund will be capped, pursuant to an expense limitation agreement, to the extent necessary so that expenses (exclusive of all federal, state, and local taxes, interest, brokerage commissions, acquired fund fees and expenses and other costs incurred in connection with the purchase and sale of securities, and extraordinary items) do not exceed the total annual fees and expenses of Original Class shares of the Rainier Large Cap Equity Fund as reflected in the table above for a period of two years from the date of the Reorganization.  The net expense ratio for the Rainier Large Cap Equity Fund from the March 31, 2017, Annual Report (after fee waivers and expense subsidies) was lower than for the pro forma Hennessy Cornerstone Large Growth Fund because Rainier agreed to waive 0.07% of its advisory fee through July 31, 2017.  That waiver will expire and the advisory fee will increase to the contractual rate on August 1, 2017.

 
Rainier Large Cap Equity Fund
Pro Forma
  (Institutional Class)  
Hennessy Cornerstone Large Growth Fund
Pro Forma
  (Institutional Class)  
     
Advisory Fee
0.70%
0.74%
     
Expense Ratio(1)
0.98%
0.97%
     
Savings in Expense Ratio as
Compared to Hennessy Cornerstone
Large Growth Fund Pro Forma
(Institutional)
0.01%
N/A
 
(1)    The pro forma expense ratio shown above for Institutional Class shares of the Rainier Large Cap Equity Fund is higher than the net expense ratio shown in the Annual Report of the Rainier U.S. Funds dated March 31, 2017, to reflect the effect of reduced assets for the Rainier Large Cap Equity Fund and the Rainier Trust and to reflect the expiration after July 31, 2017, of Rainier’s waiver of 0.07% of its advisory fee.   The pro forma expense ratio for Institutional Class shares of the Hennessy Cornerstone Large Growth Fund shown above is based on the expense ratio from the Semi-Annual Report of the Hennessy Cornerstone Large Growth Fund dated April 30, 2017.  Hennessy Advisors has agreed that the fees and expenses attributable to Institutional Class shares of the Hennessy Cornerstone Large Growth Fund will be capped, pursuant to an expense limitation agreement, to the extent necessary so that expenses (exclusive of all federal, state, and local taxes, interest, brokerage commissions, acquired fund fees and expenses and other costs incurred in connection with the purchase and sale of securities, and extraordinary items) do not exceed the total annual fees and expenses of Institutional Class shares of the Rainier Large Cap Equity Fund as reflected in the table above for a period of two years from the date of the Reorganization. The net expense ratio for the Rainier Large Cap Equity Fund from the March 31, 2017, Annual Report (after fee waivers and expense subsidies) was lower than the Hennessy Cornerstone Large Growth Fund because Rainier agreed to waive 0.07% of its advisory fee through July 31, 2017.  That waiver will expire and the advisory fee will increase to the contractual rate on August 1, 2017.  In addition, the expense ratios reflected in the Rainier Large Cap Equity Fund’s March 31, 2017, Annual Report were based upon higher assets in both the Rainier Large Cap Equity Fund and the Rainier Trust.
 
The Rainier U.S. Funds will be supervised by the Board of Trustees of Hennessy Funds Trust and will be serviced by the Hennessy Funds’ services providers.  The proposed Reorganization is not expected to have any adverse federal or state tax consequences to the Rainier U.S. Funds or their shareholders.
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Question 4:  How will the Reorganization work?
 
Answer:  Pursuant to the Plan:
 
 
The Rainier Mid Cap Equity Fund and the Rainier Small/Mid Cap Equity Fund will transfer all of their assets and liabilities to the Hennessy Cornerstone Mid Cap 30 Fund in exchange for Investor Class and Institutional Class shares of the Hennessy Cornerstone Mid Cap 30 Fund, with each of the Rainier Mid Cap Equity Fund and the Rainier Small/Mid Cap Equity Fund distributing Investor Class and Institutional Class shares of the Hennessy Cornerstone Mid Cap 30 Fund pro rata to their Original Class and Institutional Class shareholders, respectively.  Original Class shareholders of each of the Rainier Mid Cap Equity Fund and the Rainier Small/Mid Cap Equity Fund will thus effectively be converted into Investor Class shareholders of the Hennessy Cornerstone Mid Cap 30 Fund, and will hold Investor Class shares of the Hennessy Cornerstone Mid Cap 30 Fund with the same net asset value as Original Class shares of the Rainier Mid Cap Equity Fund or the Rainier Small/Mid Cap Equity Fund that they held prior to the Reorganization.  Institutional Class shareholders of each of the Rainier Mid Cap Equity Fund and the Rainier Small/Mid Cap Equity Fund will thus effectively be converted into Institutional Class shareholders of the Hennessy Cornerstone Mid Cap 30 Fund, and will hold Institutional Class shares of the Hennessy Cornerstone Mid Cap 30 Fund with the same net asset value as Institutional Class shares of the Rainier Mid Cap Equity Fund or the Rainier Small/Mid Cap Equity Fund that they held prior to the Reorganization.
 
The Rainier Large Cap Equity Fund will transfer all of its assets and liabilities to the Hennessy Cornerstone Large Growth Fund in exchange for Investor Class and Institutional Class shares of the Hennessy Cornerstone Large Growth Fund, with the Rainier Large Cap Equity Fund distributing Investor Class and Institutional Class shares of the Hennessy Cornerstone Large Growth Fund pro rata to its Original Class and Institutional Class shareholders, respectively.  Original Class shareholders of the Rainier Large Cap Equity Fund will thus effectively be converted into Investor Class shareholders of the Hennessy Cornerstone Large Growth Fund, and will hold Investor Class shares of the Hennessy Cornerstone Large Growth Fund with the same net asset value as Original Class shares of the Rainier Large Cap Equity Fund that they held prior to the Reorganization.  Institutional Class shareholders of the Rainier Large Cap Equity Fund will thus effectively be converted into Institutional Class shareholders of the Hennessy Cornerstone Large Growth Fund, and will hold Institutional Class shares of the Hennessy Cornerstone Large Growth Fund with the same net asset value as Institutional Class shares of the Rainier Large Cap Equity Fund that they held prior to the Reorganization.
The investment minimums of Institutional Class shares of the Hennessy Funds will not apply to Institutional Class shareholders of the Rainier U.S. Funds who receive Institutional Class shares of the Hennessy Funds in the Reorganization, nor will the minimums that trigger conversion or mandatory redemption of Institutional Class shares of the Hennessy Cornerstone Mid Cap 30 Fund apply to Institutional Class shareholders of the Rainier U.S. Funds.  Instead, the investment minimums currently applicable to Institutional Class shares for the Rainier U.S. Funds will continue to apply following the Reorganization.
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If the Plan and Reorganization are carried out as proposed, we do not expect that the transaction will have any adverse federal or state tax consequences to the Rainier U.S. Funds or their shareholders.  Please refer to the enclosed Proxy Statement/Prospectus for a detailed explanation of the Reorganization.
 
Question 5:  What will happen if the Plan is not approved?
 
Answer:  If the Plan is not approved by the Rainier Mid Cap Equity Fund’s shareholders, the Rainier Small/Mid Cap Equity Fund’s shareholders or the Rainier Large Cap Equity Fund’s shareholders, then the Rainier U.S. Funds will continue to operate and the Rainier Trust’s Board of Trustees may take any further action it deems to be in the best interest of the Rainier U.S. Funds and their shareholders, including terminating the Rainier U.S. Funds, in all cases subject to approval by the Rainier U.S. Funds’ shareholders if required by applicable law.
 
The approval of the Plan by the Rainier Mid Cap Equity Fund’s shareholders, the Rainier Small/Mid Cap Equity Fund’s shareholders and the Rainier Large Cap Equity Fund’s shareholders is required for the consummation of the Reorganization.  If the Plan is not approved by the Rainier Mid Cap Equity Fund’s shareholders, the Rainier Small/Mid Cap Equity Fund’s shareholders or the Rainier Large Cap Equity Fund’s shareholders, the Rainier Trust may seek to adjourn the special meeting of shareholders to obtain sufficient votes to approve the Plan.  If sufficient votes are not obtained to approve the Plan by all of the Rainier U.S. Funds, the Reorganization will not be consummated.
 
Question 6:  Why do I need to vote?
 
Answer:  Your vote is needed to ensure that the Reorganization proposal can be acted upon.  Even if you are a small investor, your vote makes a difference.  If numerous shareholders just like you fail to vote, the Rainier U.S. Funds may not receive enough votes to go forward with the special meeting.  Your immediate response will help prevent the need for any further solicitations for a shareholder vote.  You may authorize proxies to cast your vote (1) by completing, signing, dating and promptly returning the enclosed proxy card in the enclosed postage prepaid envelope; (2) by calling the toll-free telephone number listed on your proxy card; or (3) via the Internet at the website shown on your proxy card.  We encourage all shareholders to participate.
 
Question 7:  How does the Board of Trustees recommend that I vote?
 
Answer:  After careful consideration, the Rainier Trust’s Board of Trustees recommends that you vote “FOR” the Plan.  If necessary, we may ask the shareholders of the Funds to vote on the proposal to adjourn the special meeting to solicit additional proxies if a quorum does not exist or a quorum exists but there are insufficient votes at the time of the adjournment to approve the Reorganization for any one of the Rainier U.S. Funds.  The Rainier Trust’s Board of Trustees recommends that you vote “FOR” adjournment.
 
Question 8:  Who is paying for expenses related to the Reorganization?
 
Answer:  Rainier and Hennessy Advisors will be responsible for paying their own professional fees, including legal and accounting fees, and other costs and expenses incurred by
6

them or any of their affiliates in connection with the Reorganization, provided that Rainier and Hennessy Advisors shall bear equally the costs associated with (i) soliciting and obtaining the proxy vote of the shareholders of the Rainier U.S. Funds, including the proxy advisory firm fees, and (ii) data conversion and transition services of U.S. Bancorp Fund Services, LLC.  Hennessy Advisors will pay all costs associated with the preparation and filing and obtaining effectiveness of the Registration Statement on Form N-14 and Proxy Statement/Prospectus other than legal and accounting fees incurred by Rainier in connection with its review of the Registration Statement and Proxy Statement/Prospectus.  The total expenses of the Reorganization are estimated to be approximately $350,000.
 
Question 9:  How do I vote?
 
Answer:  Whether or not you plan to attend the meeting, we urge you to authorize proxies to cast your votes.  You can do this in one of the following three ways:  (1) by completing, signing, dating and promptly returning the enclosed proxy card in the enclosed postage prepaid envelope; (2) by calling the toll-free telephone number listed on your proxy card; or (3) via the Internet at the website shown on your proxy card.  You may also vote in person at the special meeting.  Your prompt voting by proxy will help ensure a quorum at the special meeting.  Voting by proxy will not prevent you from voting your shares in person at the special meeting.  You may revoke your proxy before it is exercised at the special meeting, either by writing to the Corporate Secretary of the Rainier Trust at the address noted in the Proxy Statement/Prospectus or in person at the time of the special meeting.  A prior proxy can also be revoked by proxy voting again through the website or toll-free telephone number listed on your proxy card.  If you have any questions regarding the proposed Reorganization, please do not hesitate to call 1-855-928-4498.
 
Question 10:  Who do I call if I have questions?
 
Answer:  We will be happy to answer your questions about the proxy solicitation.  Please call 1-855-928-4498 during normal business hours between 8:00 a.m. and 5:00 p.m. Eastern time.
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RAINIER INVESTMENT MANAGEMENT MUTUAL FUNDS
601 Union Street, Suite 3525
Seattle, Washington 98101
(800) 248-6314
www.rainierfunds.com

 
HENNESSY FUNDS TRUST
7250 Redwood Boulevard, Suite 200
Novato, California 94945
(800) 966-4354
www.hennessyfunds.com
 

PROXY STATEMENT AND PROSPECTUS DATED JULY 14, 2017

This Proxy Statement/Prospectus is being sent to you in connection with the solicitation of proxies by Rainier Investment Management Mutual Funds, a Delaware statutory trust (the “Rainier Trust”), on behalf of the Rainier Mid Cap Equity Fund, the Rainier Small/Mid Cap Equity Fund and the Rainier Large Cap Equity Fund, each a series of the Rainier Trust (each a “Rainier U.S. Fund” and, together, the “Rainier U.S. Funds”), for use at a special meeting of shareholders of the Rainier U.S. Funds to be held in the offices of the Rainier Trust at 601 Union Street, Suite 3525, Seattle Washington 98101, on Thursday, September 14, 2017, at 10:00 a.m. local time.  At the special meeting, shareholders of the Rainier U.S. Funds will meet for the following purposes:
 
To vote on a proposal to approve the reorganization of the Rainier Mid Cap Equity Fund and the Rainier Small/Mid Cap Equity Fund into the Hennessy Cornerstone Mid Cap 30 Fund and the reorganization of the Rainier Large Cap Equity Fund into the Hennessy Cornerstone Large Growth Fund (the “Reorganization”), pursuant to the Agreement and Plan of Reorganization (the “Plan”).  The Hennessy Cornerstone Mid Cap 30 Fund and the Hennessy Cornerstone Large Growth Fund are referred to herein as each a “Hennessy Fund” and, together, the “Hennessy Funds.”  A copy of the Plan is attached hereto as Exhibit A.  Pursuant to the Plan:
all of the assets of the Rainier Mid Cap Equity Fund will be transferred to the Hennessy Cornerstone Mid Cap 30 Fund, in exchange for Investor Class and Institutional Class shares of the Hennessy Cornerstone Mid Cap 30 Fund, which will be distributed pro rata by the Rainier Mid Cap Equity Fund to its Original Class and Institutional Class shareholders, respectively, and the Hennessy Cornerstone Mid Cap 30 Fund will assume the Rainier Mid Cap Equity Fund’s liabilities (other than the excluded liabilities);
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all of the assets of the Rainier Small/Mid Cap Equity Fund will be transferred to the Hennessy Cornerstone Mid Cap 30 Fund, in exchange for Investor Class and Institutional Class shares of the Hennessy Cornerstone Mid Cap 30 Fund, which will be distributed pro rata by the Rainier Small/Mid Cap Equity Fund to its Original Class and Institutional Class shareholders, respectively, and the Hennessy Cornerstone Mid Cap 30 Fund will assume the Rainier Small/Mid Cap Equity Fund’s liabilities (other than the excluded liabilities); and
all of the assets of the Rainier Large Cap Equity Fund will be transferred to the Hennessy Cornerstone Large Growth Fund, in exchange for Investor Class and Institutional Class shares of the Hennessy Cornerstone Large Growth Fund, which will be distributed pro rata by the Rainier Large Cap Equity Fund to its Original Class and Institutional Class shareholders, respectively, and the Hennessy Cornerstone Large Growth Fund will assume the Rainier Large Cap Equity Fund’s liabilities (other than the excluded liabilities).
If necessary, to approve adjourning the special meeting to permit further solicitation of proxies in the event a quorum does not exist or a quorum exists but there are not sufficient votes at the time of the special meeting to approve the Plan; and
To transact such other business that may properly come before the special meeting or any postponements or adjournments thereof.
Shareholders who execute proxies may revoke them at any time before they are voted, either by writing to the Rainier Trust at 601 Union Street, Suite 3525, Seattle, Washington 98101, Attention: Corporate Secretary, or in person at the time of the special meeting.  A prior proxy can also be revoked by proxy voting again through the website or toll-free telephone number listed in the enclosed voting instructions.
 
Each Rainier U.S. Fund is a series of the Rainier Trust, an open-end management investment company registered with the Securities and Exchange Commission (the “SEC”) under the Investment Company Act of 1940, as amended (the “Investment Company Act”).  The Hennessy Funds are each a series of Hennessy Funds Trust, an open-end management investment company registered with the SEC under the Investment Company Act.
 
The following documents have been filed with the SEC and are incorporated by reference into this Proxy Statement/Prospectus, which means that they are legally considered to be a part of this Proxy Statement/Prospectus:
 
Prospectus of the Rainier U.S. Funds, dated July 29, 2016, as supplemented to date.
Annual Report to Shareholders for the Rainier U.S. Funds for the fiscal year ended March 31, 2017, containing audited financial statements.
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Prospectus of the Hennessy Funds, dated February 28, 2017.
 
Annual Reports to Shareholders for the Hennessy Funds, for the fiscal year ended October 31, 2016, as amended to date, containing audited financial statements.
Semi-Annual Reports to Shareholders for the Hennessy Funds, for the six months ended April 30, 2017.
Copies of the Rainier U.S. Funds’ documents are available upon request and without charge by writing to the Rainier Trust at 601 Union Street, Suite 3525, Seattle, Washington 98101, by calling 1-800-248-6314, or over the Internet at www.rainierfunds.com.  Copies of the Hennessy Funds’ documents are available upon request and without charge by writing to Hennessy Funds Trust, 7250 Redwood Blvd., Suite 200, Novato CA 94945, by calling 1800966-4354 or 1-415-899-1555, or over the Internet at hennesyfunds.com.
 
The Annual Report to Shareholders for the Rainier U.S. Funds for the fiscal year ended March 31, 2017, containing audited financial statements, has been previously mailed to shareholders of the Rainier U.S. Funds.  Copies are available by writing or calling the Rainier Trust at the address or telephone number listed above or over the Internet at www.rainierfunds.com.
 
Copies of the Annual Reports to Shareholders for the Hennessy Funds for the fiscal year ended October 31, 2016, as amended to date, containing audited financial statements, and the Semi-Annual Reports to Shareholders for the six months ended April 30, 2017, are available by writing or calling Hennessy Funds Trust at the address or telephone number listed above or over the Internet at hennessyfunds.com.
 
This Proxy Statement/Prospectus sets forth concisely the information about the Hennessy Funds that you should know before considering the Plan and resulting Reorganization and it should be retained for future reference.  Additional information contained in a statement of additional information relating to this Proxy Statement/Prospectus (the “SAI”), as required by the SEC, is on file with the SEC.  The SAI is available without charge, upon request by calling the toll free number set forth above for the Rainier Trust, by writing or calling the Rainier Trust at the address or telephone number listed above or over the Internet at www.rainierfunds.com.  The SAI, dated July 14, 2017, is incorporated by reference into this Proxy Statement/Prospectus.
 
 
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the reorganization described in this Proxy Statement/Prospectus or the securities to be issued pursuant to the reorganization under this Proxy Statement/Prospectus or determined if this Proxy Statement/Prospectus is accurate or adequate.  Any representation to the contrary is a criminal offense.
 
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PROXY STATEMENT / PROSPECTUS TABLE OF CONTENTS
Page
 
I.
SYNOPSIS
1
 
A.
Overview
1
 
B.
Reasons for the Reorganization and Board Deliberations
1
 
C.
The Proposed Plan and Resulting Reorganization
4
 
D.
Comparison of the Funds and the Hennessy Cornerstone Mid Cap 30 Fund
5
   
1.
Investment Objectives and Principal Investment Policies
5
   
2.
Investment Advisory Services
10
   
3.
Distribution Services
10
   
4.
Purchase and Redemption Procedures
10
   
5.
Exchange Procedures
12
 
E.
Other Significant Considerations and Consequences of the Proposed Reorganization
13
 
F.
Federal Tax Consequences of the Proposed Reorganization
14
     
II.
PRINCIPAL RISK FACTORS
15
     
III.
COMPARISON FEE TABLES AND EXAMPLES
18
 
A.
Fee Tables
18
 
B.
Example
21
     
IV.
THE PROPOSED PLAN AND RESULTING REORGANIZATION
22
 
A.
Summary of the Proposed Reorganization
22
 
B.
Terms of the Plan
23
 
C.
Description of the Hennessy Fund Shares
26
 
D.
Reasons for the Reorganization Considered by the Board
26
 
E.
Federal Income Tax Consequences
26
 
F.
Comparison of Shareholder Rights
28
 
G.
Capitalization
29
     
V.
INFORMATION ABOUT THE RAINIER U.S. FUNDS AND THE HENNESSY FUNDS
30
 
A.
Investment Objective and Investment Strategies
30
 
B.
Fees and Expenses
30
 
C.
Performance and Portfolio Turnover
31
 
D.
Investment Advisor and Portfolio Managers
40
 
E.
Payments to Broker-Dealers and Other Financial Intermediaries
40
 
F.
Net Asset Value
41
 
G.
Shares
42
 
H.
Taxes, Dividends and Distributions
52
 
I.
Financial Highlights
53
 
J.
Distribution Arrangements
54
 
K.
Distribution Plans
54


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VI.
VOTING INFORMATION
56
 
A.
Method and Cost of Solicitation
58
 
B.
Right of Revocation
58
 
C.
Voting Securities and Principal Holders
59
     
VII.
ADDITIONAL INFORMATION
67
     
VIII.
MISCELLANEOUS INFORMATION
67
 
A.
Other Business
67
 
B.
Next Meeting of Shareholders
67
 
C.
Legal Matters
68
 
D.
Experts
68
   
Exhibit A
A-1
   
Exhibit B
B-1
 
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I.
SYNOPSIS
A.
Overview
The following synopsis is a summary of certain information contained elsewhere in this Proxy Statement/Prospectus, including documents incorporated by reference, as well as in the Plan.  This Proxy Statement/Prospectus is qualified by reference to the more complete information contained herein as well as in the Prospectus of the Rainier U.S. Funds, dated July 29, 2016, as supplemented to date, which includes information about the Rainier U.S. Funds, and in the Plan attached hereto as Exhibit A.  Shareholders should read the entire Proxy Statement/Prospectus carefully.
 
B.
Reasons for the Reorganization and Board Deliberations
The proposed Reorganization was presented to the Rainier Trust’s Board of Trustees (the “Board”) for consideration at a meeting held on June 1, 2017.  At this meeting, representatives of Rainier Investment Management, LLC (“Rainier”), Hennessy Advisors, Inc. (“Hennessy Advisors”) and the Hennessy Funds provided, and the Board reviewed, detailed information about the proposed Reorganization in response to the Board’s request for information regarding Hennessy Advisors, the Hennessy Funds and the Reorganization.  That meeting included general details about Hennessy Advisors, the Hennessy Funds and its Board of Trustees, the investment objective and strategies, as well as information about past performance of each Hennessy Fund, and a comparison of the expense ratios of each Rainier U.S. Fund to its corresponding Hennessy Fund.  The meeting also included an analysis of the expected benefits to each Rainier U.S. Fund’s shareholders.  For the reasons discussed below, the Board, including all of the trustees who are not “interested persons” (as defined in the Investment Company Act) (the “Independent Trustees”) of the Rainier Trust, determined that the Reorganization is in the best interests of the Rainier U.S. Funds and their shareholders and unanimously voted to approve the Reorganization and to present it to shareholders for approval.
 
At the meeting held on June 1, 2017, Rainier informed the Board that it had recently completed a strategic review of the management and operations of the Rainier U.S. Funds and concluded that it would be advisable to discontinue its management of the Rainier U.S. Funds and pursue the reorganization of the Rainier U.S. Funds with another fund group.  Rainier also informed the Board that, following this strategic review process, it had reviewed possible reorganization and acquisition candidates, had identified Hennessy Advisors, and had recommended the reorganization of the Rainier U.S. Funds into the Hennessy Funds.
 
The Board also met with representatives of Hennessy Advisors and reviewed information regarding Hennessy Advisors and the Hennessy Funds that had been requested by the Board and considered additional information regarding the proposed Reorganization.  The Independent Trustees also discussed the proposed Reorganization without the participation of representatives of Rainier or Hennessy Advisors.  After reviewing and considering a number of factors relating to Hennessy Advisors and the Hennessy Funds, the Board determined that the Reorganization is in the best interests of the shareholders of each of the Rainier U.S. Funds.
 
With respect to each Rainier U.S. Fund, in determining whether to approve the Reorganization and to recommend approval to shareholders, the Board (including the Independent Trustees) considered a number of matters, including the following:
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1.
 
The reduced ability of Rainier to continue to manage and support the Rainier U.S. Funds given the declining assets and viability of the Rainier U.S. Funds, as well as Rainier’s reduced ability to continue to devote resources to maintaining competitive expense ratios for the Rainier U.S. Funds.
2.
 
The Reorganization provides a better opportunity to reduce expense ratios over time.  Rainier remains willing to waive fees and subsidize expenses for the Rainier U.S. Funds only for a temporary period in order to allow shareholders to consider the Reorganization.  In addition, the Reorganization would result in each Rainier U.S. Fund becoming part of a larger pool of assets with a greater potential for economies of scale.
3.
 
The Board noted that Hennessy Advisors has demonstrated its successful distribution capabilities for mutual funds.  These distribution capabilities may help the resulting combined Hennessy Fund to experience asset growth (or more moderate declines in adverse conditions), which may provide those Rainier U.S. Funds with opportunities to realize greater operating efficiencies as a result of the economies of scale that may be available to a larger fund, and which could lead to lower total operating expenses over time. 
4.
 
The Board noted that the Reorganization is expected to qualify as a “reorganization” within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended, and, therefore, shareholders generally will not recognize gain or loss for federal income tax purposes on the exchange of shares of a Rainier U.S. Fund for shares of the corresponding Hennessy Fund.
5.
 
The Board noted that shareholders who do not wish to become shareholders of the applicable Hennessy Fund may redeem their shares from the applicable Rainier U.S. Fund at any time before the Reorganization without the imposition of any redemption fee.
6.
 
The Board considered that if the Reorganization was not to occur, that the Rainier U.S. Funds would likely be liquidated.  The proposed Reorganization provides another alternative to shareholders who desire to maintain an investment in the applicable type of investment and strategy.
7.
 
The Board took into consideration the agreement of Hennessy Advisors and Rainier to bear all of the expenses that otherwise would be incurred by the Rainier U.S. Funds and the Hennessy Funds, other than brokerage and other transaction costs, in connection with the Reorganization, so that the shareholders will not bear these costs.  The Board was informed that no sales charge, commission, redemption fee or other transactional fee will be charged to shareholders as a result of the Reorganization.
8.
 
The action of the Board to recommend the proposed Reorganization included consideration of a number of additional factors, including (i) the nature, extent and quality of the services proposed to be provided by Hennessy Advisors, including the long-term performance of the Hennessy Funds; (ii) Hennessy Advisors’ significant prior experience with mutual fund acquisitions; (iii) operating expense ratios of the Rainier U.S. Funds and the Hennessy Funds; (iv) that the interests of shareholders of the Rainier U.S. Funds will not be diluted as a result of the Reorganization; and (v) the nature, extent and quality of the non-advisory services to be provided by various service providers to the Hennessy Funds following the closing of the Reorganization.
2

The Board was also advised that Rainier intends to rely on Section 15(f) of the Investment Company Act, which provides a non-exclusive safe harbor for an investment adviser to an investment company, and any of the investment adviser’s “affiliated persons” (as such term is defined in the Investment Company Act), to receive any amount or benefit in connection with a change in control of the investment adviser so long as two conditions are met.  First, for a period of three years after the closing of the Reorganization, at least 75% of the trustees of the acquiring funds must be persons who are not “interested persons” of the predecessor or successor advisor.  Rainier and Hennessy Advisors have indicated that they intend to take the necessary actions to comply with this 75% requirement with respect to the trustees of Hennessy Funds Trust for the three-year period following the closing of the Reorganization.  The second condition of Section 15(f) is that, for a period of two years following an acquisition of an investment advisor to mutual funds, there must not be imposed on the subject funds any “unfair burden” as a result of the acquisition or any express or implied terms, conditions or understandings related to it.  An “unfair burden” would include any arrangement whereby an investment adviser, or any interested person of the investment adviser, would receive or be entitled to receive any compensation, directly or indirectly, from each fund or its shareholders (other than fees for bona fide investment advisory or other services) or from any person in connection with the purchase or sale of securities or other property to, from or on behalf of each subject fund (other than bona fide ordinary compensation as principal underwriter for the subject funds).  In this regard, the Board was informed that Rainier and Hennessy Advisors have indicated that they intend to take the necessary actions to comply with this requirement of Section 15(f) and that, as a result, no special compensation arrangements are contemplated in connection with the Reorganization.  Specifically, Hennessy Advisors and Hennessy Funds Trust have agreed that, for the minimum time periods specified in Section 15(f) of the Investment Company Act, they will ensure that (1) at least 75% of the trustees of Hennessy Funds Trust are not “interested persons” (as that term is defined in the Investment Company Act) of Hennessy Advisors or Rainier; and (2) no “unfair burden” (as that term is defined in Section 15(f)(2)(B) of the Investment Company Act) will be imposed on the Hennessy Funds.  For purposes of determining whether any “unfair burden” would result from the Reorganization, the Independent Trustees were comfortable that a possible increase in the net expense ratio that would apply should not be regarded as an “unfair burden” given the temporary nature of Rainier’s continued willingness to waive fees and subsidize expenses for the Rainier U.S. Funds and given the current operations and expense ratios of the Hennessy Funds.
3

The Board has approved the Plan and resulting Reorganization, and recommends that you vote “FOR” the Plan and Reorganization.
 
If all of the requisite approvals are obtained and certain conditions are either met or waived, it is anticipated that the closing of the Reorganization will occur on or about September 15, 2017, or such other date as is agreed to by the parties, provided that the Hennessy Funds have obtained prior to that time an opinion of Foley & Lardner LLP, legal counsel to Hennessy Funds Trust, concerning the tax consequences of the Reorganization as set forth in the Plan.  The Plan may be terminated, and the Reorganization abandoned, whether before or after the requisite approval by the shareholders of the Rainier U.S. Funds, at any time prior to the closing, (i) by the Rainier Trust if any conditions precedent to the obligations of the Rainier U.S. Funds have not been fulfilled or waived; (ii) by Hennessy Funds Trust if any conditions precedent to the obligations of the Hennessy Funds have not been fulfilled or waived; or (iii) by mutual consent of the parties.
 
Rainier and Hennessy Advisors will be responsible for paying their own professional fees, including legal and accounting fees, and other costs and expenses incurred by them or any of their affiliates in connection with the Reorganization, provided that Rainier and Hennessy Advisors shall bear equally the costs associated with (i) soliciting and obtaining the proxy vote of the shareholders of the Rainier U.S. Funds, including the proxy advisory firm fees, and (ii) data conversion and transition services of U.S. Bancorp Fund Services, LLC.  Hennessy Advisors will pay all costs associated with the preparation and filing and obtaining effectiveness of the Registration Statement on Form N-14 and the Proxy Statement/Prospectus other than legal and accounting fees incurred by Rainier in connection with its review of the Registration Statement and Proxy Statement/Prospectus.  In addition to solicitations by mail, the officers and agents of the Rainier U.S. Funds also may solicit proxies, without special compensation, by telephone or via the Internet.  If the Plan is not approved by the Rainier Mid Cap Equity Fund’s shareholders, the Rainier Small/Mid Cap Equity Fund’s shareholders or the Rainier Large Cap Equity Fund’s shareholders, then the Rainier U.S. Funds will continue to operate and the Board may take any further action it deems to be in the best interest of the Rainier U.S. Funds and their shareholders, including terminating the Rainier U.S. Funds, in all cases subject to approval by the Rainier U.S. Funds’ shareholders if required by applicable law.
 
C.
The Proposed Plan and Resulting Reorganization
If a Fund’s shareholders approve the Plan and the Reorganization takes place, then:
 
 
the Hennessy Cornerstone Mid Cap 30 Fund will acquire substantially all of the assets and assume the liabilities (other than the excluded liabilities) of the Rainier Mid Cap Equity Fund and the Rainier Small/Mid Cap Equity Fund;
 
the Hennessy Cornerstone Mid Cap 30 Fund will issue Investor Class and Institutional Class shares to the Rainier Mid Cap Equity Fund and the Rainier Small/Mid Cap Equity Fund, which the Rainier Mid Cap Equity Fund and the Rainier Small/Mid Cap Equity Fund will distribute pro rata to their Original Class and Institutional Class shareholders, respectively;
 
the shareholders of the Rainier Mid Cap Equity Fund and the Rainier Small/Mid Cap Equity Fund will become shareholders of the Hennessy Cornerstone Mid Cap 30 Fund;
4

 
the Investor Class and Institutional Class shares of the Hennessy Cornerstone Mid Cap 30 Fund received by a shareholder of the Rainier Mid Cap Equity Fund or the Rainier Small/Mid Cap Equity Fund will have the same aggregate net asset value as such shareholder’s interest in the Rainier Mid Cap Equity Fund and the Rainier Small/Mid Cap Equity Fund, respectively, immediately prior to the Reorganization;
 
the Hennessy Cornerstone Large Growth Fund will acquire substantially all of the assets and assume the liabilities (other than the excluded liabilities) of the Rainier Large Cap Equity Fund;
 
the Hennessy Cornerstone Large Growth Fund will issue Investor Class and Institutional Class shares to the Rainier Large Cap Equity Fund, which the Rainier Large Cap Equity Fund will distribute pro rata to its Original Class and Institutional Class shareholders, respectively;
the shareholders of the Rainier Large Cap Equity Fund will become shareholders of the Hennessy Cornerstone Large Growth Fund; and
 
the Investor Class and Institutional Class shares of the Hennessy Cornerstone Large Growth Fund received by a Rainier Large Cap Equity Fund’s shareholder will have the same aggregate net asset value as such shareholder’s interest in the Rainier Large Cap Equity Fund immediately prior to the Reorganization.
No sales charges will be imposed on the shares of the Hennessy Funds issued in connection with the Reorganization.  The Reorganization has been structured with the intention that it qualify, for federal income tax purposes, as a tax-free reorganization under the Internal Revenue Code of 1986, as amended (the “Code”).  Therefore, shareholders should not recognize any gain or loss on their Rainier U.S. Fund shares for federal income tax purposes as a result of the Reorganization.
 
D.
Comparison of the Funds and the Hennessy Cornerstone Mid Cap 30 Fund
1.
Investment Objectives and Principal Investment Policies
Each of the Rainier U.S. Funds and the Hennessy Funds have substantially similar investment objectives.  While over 90% of the investments of the Rainier U.S. Funds are eligible investments for the applicable Hennessy Fund (meaning that over 90% of the investments of the Rainier U.S. Funds are equity securities that are subject to evaluation under the formulas utilized by the Hennessy Funds, and that the Hennessy Funds provide in their prospectus that they may hold indefinitely the portfolio securities transferred to them from another fund pursuant to an acquisition), the Rainier U.S. Funds and the Hennessy Funds do differ in investment strategies, as the Hennessy Funds employ a focused, formula-based approach to their investments, as described below.
 
The table below briefly highlights the differences in investment strategy of the Rainier U.S. Funds and the Hennessy Funds.  Following the table is a more detailed description of each of the Funds and their principal investment strategies.
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Principal Investment Strategies of Rainier
U.S. Fund Being Acquired
 
Principal Investment Strategies of
Hennessy Fund Acquiring Rainier U.S.
Fund
 
Rainier Mid Cap Equity Fund
 
The Rainier Mid Cap Equity Fund employs an active investment management strategy pursuant to which it normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in the common stock of mid-capitalization companies traded in the United States.  Rainier considers a mid-capitalization company as one with market capitalization, at the time of purchase, within the range of companies included in the Russell Midcap® Index.  The market capitalization of companies in which the Rainier Mid Cap Equity Fund may invest may vary with market conditions.  As of December 31, 2016, the market capitalization range of companies included in the Russell Midcap Index was $643 million to $57.5 billion.
 
Hennessy Cornerstone Mid Cap 30 Fund
 
The Hennessy Cornerstone Mid Cap 30 Fund employs a focused, formula-based approach.  Specifically, it invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in mid-cap, growth-oriented stocks by utilizing a highly disciplined, quantitative formula known as the Cornerstone Mid Cap 30 Formula®.  From a universe of stocks of mid-cap companies (defined as companies that have a market cap of between $1 billion and $10 billion), excluding American Depositary Receipts, the Mid Cap 30 Formula selects the 30 common stocks with the highest one-year price appreciation as of the date of purchase that also meet the following criteria:
 
 
    1. Price-to-sales ratio below 1.5
    2.  Annual earnings that are higher than the previous year
    3. Positive stock price appreciation, or relative strength, over the past three and six month periods
 
Rainier Small/Mid Cap Equity Fund
 
The Rainier Small/Mid Cap Equity Fund employs an active investment management strategy pursuant to which it normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in the common stock of small- and mid-capitalization companies traded in the United States.  The Rainier Small/Mid Cap Equity Fund will invest in approximately 75 to 150 companies.  Rainier defines small- and mid-cap companies as companies that are members of, or fall within, the capitalization range inclusive of the Russell 2000® Index, which was $23.6 million to $4.1 billion as of June 30, 2016, and the Russell Midcap® Index, which was $643 million to $57.5 billion as of December 31, 2016.
 
Hennessy Cornerstone Mid Cap 30 Fund
 
The Hennessy Cornerstone Mid Cap 30 Fund employs a focused, formula-based approach.  Specifically, it invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in mid-cap, growth-oriented stocks by utilizing a highly disciplined, quantitative formula known as the Cornerstone Mid Cap 30 Formula®.  From a universe of stocks of mid-cap companies (defined as companies that have a market cap of between $1 billion and $10 billion), excluding American Depositary Receipts, the Mid Cap 30 Formula selects the 30 common stocks with the highest one-year price appreciation as of the date of purchase that also meet the following criteria:
 
    1. Price-to-sales ratio below 1.5
 
6

 
    2. Annual earnings that are higher than the previous year
    3. Positive stock price appreciation, or relative strength, over the past three and six month periods
 
Rainier Large Cap Equity Fund
 
The Rainier Large Cap Equity Fund employs an active investment management strategy pursuant to which it normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in the common stock of large-capitalization companies traded in the United States.  Rainier considers large-capitalization companies to be those currently with minimum market capitalizations of $3 billion at the time of purchase.  The Rainier Large Cap Equity Fund may invest in common stock of companies of all  sizes, including small-capitalization companies. Investments in companies with market capitalizations below $3 billion will normally comprise less than 20% of the Rainier Large Cap Equity Fund. The Rainier Large Cap Equity Fund will normally be invested in approximately 50 to 150 securities.
 
Hennessy Cornerstone Large Growth Fund
 
The Hennessy Cornerstone Large Growth Fund employs a focused, formula-based approach.  Specifically, it invests in growth-oriented common stocks of larger companies, excluding American Depositary Receipts, by utilizing a highly disciplined, quantitative formula known as the Cornerstone Large Growth Formula.  The Large Growth Formula selects the 50 common stocks from a universe of stocks in the Capital IQ Database that meet the following criteria:
 
1.            Market capitalization that exceeds the Database average
2.            Price-to-cash flow ratio less than the Database median
3.            Positive total capital
4.            Highest one-year return on total capital
 
Rainier Mid Cap Equity Fund
 
The investment objective of the Rainier Mid Cap Equity Fund is to maximize long-term capital appreciation.  In pursuing its objective, the Rainier Mid Cap Equity Fund normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in the common stock of mid-capitalization companies traded in the United States.  Rainier considers a mid-capitalization company as one with market capitalization, at the time of purchase, within the range of companies included in the Russell Midcap® Index.  The market capitalization of companies in which the Rainier Mid Cap Equity Fund may invest may vary with market conditions.  As of December 31, 2016, the market capitalization range of companies included in the Russell Midcap Index was $643 million to $57.5 billion.  Investments in companies that grow above these maximum capitalization criteria may continue to be held if Rainier considers them to be particularly attractive.  The Rainier Mid Cap Equity Fund will normally invest in approximately 75 to 125 companies.  Although the Rainier Mid Cap Equity Fund does not expect to maintain significant positions in such securities on a normal basis, it may invest up to 25% of its assets in foreign securities, with limited investments in emerging markets.  These include U.S. dollar denominated securities of foreign issuers and securities of foreign issuers that are listed and traded on a domestic national securities exchange.  Currently, Rainier invests only in U.S. dollar denominated securities of foreign issuers or American Depositary Receipts (“ADRs”). 
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The Rainier Mid Cap Equity Fund may invest to a limited extent in initial public offerings (“IPOs”) and exchange-traded funds (“ETFs”).
 
Rainier Small/Mid Cap Equity Fund
 
The investment objective of the Rainier Small/Mid Cap Equity Fund is to maximize long-term capital appreciation.  In pursuing its objective, the Rainier Small/Mid Cap Equity Fund normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in the common stock of small- and mid-capitalization companies traded in the United States.  The Rainier Small/Mid Cap Equity Fund will invest in approximately 75 to 150 companies.  Rainier defines small- and mid-cap companies as companies that are members of, or fall within, the capitalization range inclusive of the Russell 2000® Index, which was $23.6 million to $4.1 billion as of June 30, 2016, and the Russell Midcap® Index, which was $643 million to $57.5 billion as of December 31, 2016.  Investments in companies that grow above these maximum capitalization criteria may continue to be held if Rainier considers them to be particularly attractive.  Although the Rainier Small/Mid Cap Equity Fund does not expect to maintain significant positions in such securities on a normal basis, it may invest up to 25% of its assets in foreign securities, with limited investments in emerging markets.  These include U.S. dollar denominated securities of foreign issuers and securities of foreign issuers that are listed and traded on a domestic national securities exchange.  Currently, Rainier invests only in U.S. dollar denominated securities of foreign issuers or ADRs.  The Rainier Small/Mid Cap Equity Fund may invest to a limited extent in IPOs and ETFs.
 
Rainier Large Cap Equity Fund
 
The investment objective of Rainier Large Cap Equity Fund is to maximize long-term capital appreciation.  In pursuing its objective, the Rainier Large Cap Equity Fund normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in the common stock of large-capitalization companies traded in the United States.  Rainier considers large-capitalization companies to be those currently with minimum market capitalizations of $3 billion at the time of purchase.  The Rainier Large Cap Equity Fund may invest in common stock of companies of all sizes, including small-capitalization companies.  Investments in companies with market capitalizations below $3 billion will normally comprise less than 20% of the Rainier Large Cap Equity Fund.  The Rainier Large Cap Equity Fund will normally be invested in approximately 50 to 150 securities.  Although the Rainier Large Cap Equity Fund does not expect to maintain significant positions in such securities on a normal basis, it may invest up to 25% of its assets in foreign securities, with limited investments in emerging markets.  Foreign securities include U.S. dollar denominated securities of foreign issuers and securities of foreign issuers that are listed and traded on a domestic national securities exchange.  Currently, Rainier invests only in U.S. dollar denominated securities of foreign issuers or ADRs.  The Rainier Large Cap Equity Fund may invest to a limited extent in IPOs and ETFs.
 
Hennessy Cornerstone Mid Cap 30 Fund
 
The Hennessy Cornerstone Mid Cap 30 Fund seeks long-term growth of capital.  In pursuing its objective, the Hennessy Cornerstone Mid Cap 30 Fund normally invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in mid-cap, growth-oriented stocks by utilizing a highly disciplined, quantitative formula known as the Cornerstone Mid Cap 30 Formula® (the “Mid Cap 30 Formula”).  From a universe of stocks of mid-cap companies (defined as companies that have a market cap of between $1 billion and $10 billion),
8

excluding ADRs, the Mid Cap 30 Formula selects the 30 common stocks with the highest one-year price appreciation as of the date of purchase that also meet the following criteria:
 
1.
Price-to-sales ratio below 1.5

This value criterion helps to uncover relative bargains.  The Mid Cap 30 Formula uses sales as its guide because sales figures are more difficult for companies to manipulate than earnings and frequently provide a clearer picture of a company’s potential value.

2.
Annual earnings that are higher than the previous year

While sales may be the best indicator of a company’s value, the Mid Cap 30 Formula considers improved earnings to be a key indicator of a company’s financial strength.

3.
Positive stock price appreciation, or relative strength, over the past three and six month periods
Relative strength is widely used by investors in attempting to predict which stocks will outperform the market.
 
The Hennessy Cornerstone Mid Cap 30 Fund purchases 30 stocks as dictated by the Mid Cap 30 Formula, weighted equally by dollar amount, with 3.33% of the portfolio’s assets invested in each.  Using the Mid Cap 30 Formula, the universe of stocks is re-screened and the portfolio is rebalanced annually, generally in the fall.  Stocks meeting the Mid Cap 30 Formula’s criteria not currently in the portfolio are purchased, and stocks that no longer meet the criteria are sold.  Holdings of all stocks in the Hennessy Cornerstone Mid Cap 30 Fund that continue to meet the criteria are appropriately increased or decreased to result in an equal 3.33% weighting.
 
Hennessy Cornerstone Large Growth Fund
 
The Hennessy Cornerstone Large Growth Fund seeks long-term growth of capital.  In pursuing its objective, the Hennessy Cornerstone Large Growth Fund invests in growth-oriented common stocks of larger companies (companies with market capitalization that exceeds the average of the Capital IQ Database (the “Database”) (formerly known as the Standard & Poor’s Compustat® Database)), excluding ADRs, by utilizing a highly disciplined, quantitative formula known as the Cornerstone Large Growth Formula (the “Large Growth Formula”).  As of June 30, 2017, the universe of stocks in the Database consists of 20,013 issuers with an average market capitalization of $6,253.72 billion and average price-to-cash flow ratio of 15.15.  The Large Growth Formula selects the 50 common stocks from a universe of stocks in the Database that meet the following criteria, in order:
 
1.
Market capitalization that exceeds the Database average

2.
Price-to-cash flow ratio less than the Database median
 
3.
Positive total capital
4.
Highest one-year return on total capital
9

The Hennessy Cornerstone Large Growth Fund purchases 50 stocks as dictated by the Large Growth Formula, weighted equally by dollar amount, with 2% of the portfolio’s assets invested in each.  Using the Large Growth Formula, the universe of stocks is re-screened and the portfolio is rebalanced annually, generally in the winter.  Stocks meeting the Large Growth Formula’s criteria not currently in the portfolio will be purchased, and stocks that no longer meet the criteria will be sold.  Holdings of all stocks in the Hennessy Cornerstone Large Growth Fund that continue to meet the criteria will be appropriately increased or decreased to result in an equal 2% weighting.
 
2.
Investment Advisory Services
Rainier is the investment advisor of the Rainier U.S. Funds.  The address of Rainier is 601 Union Street, Suite 3525, Seattle, Washington 98101.  Subject to the direction and control of the Board, Rainier formulates and implements an investment program for the Rainier U.S. Funds, which includes determining which securities should be bought and sold.  Rainier was organized as a Delaware limited liability company in 1989 and is registered with the SEC as an investment advisor.  As of May 31, 2017, Rainier managed approximately $1.23 billion of net assets on behalf of all series in the Rainier Trust.  For its services, the Rainier Mid Cap Equity Fund and the Rainier Small/Mid Cap Equity Fund pay Rainier an investment advisory fee at an annual rate of 0.85% of their average daily net assets, and the Rainier Large Cap Equity Fund pays Rainier an investment advisory fee at an annual rate of 0.70% of its average daily net assets.
 
Hennessy Advisors is the investment manager of the Hennessy Funds.  The address of Hennessy Advisors, Inc. is 7250 Redwood Blvd., Suite 200, Novato, California 94945.  Subject to the direction and control of the Board of Trustees of Hennessy Funds Trust, Hennessy Advisors formulates and implements an investment program for the Hennessy Funds, which includes determining which securities should be bought and sold.  Hennessy Advisors was organized as a California corporation in 1989 and is registered with the SEC as an investment advisor.  As of May 31, 2017, Hennessy Advisors managed approximately $6.55 billion of net assets on behalf of all series in Hennessy Funds Trust.  For its services, the Hennessy Funds each pay Hennessy Advisors an investment advisory fee at an annual rate of 0.74% of their average daily net assets.
 
3.
Distribution Services
Quasar Distributors, LLC (“Quasar”), located at 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202, currently serves as the distributor for the Rainier U.S. Funds.  As such, Quasar is responsible for all purchases, sales, redemptions and other transfers of shares.  As distributor, Quasar also provides certain administrative services.  Quasar is a registered broker-dealer and member of the Financial Industry Regulatory Authority (“FINRA”).
 
Quasar also serves as the distributor for the Hennessy Funds.  As such, Quasar is responsible for all purchases, sales, redemptions and other transfers of shares.  As distributor, Quasar also provides certain administrative services.  Shares of the Hennessy Funds are offered for sale on a continuous basis at net asset value per share.
 
4.
Purchase and Redemption Procedures
The Rainier U.S. Funds and the Hennessy Funds have similar purchase and redemption procedures.  Purchases and sales (redemptions) of shares of the Rainier U.S. Funds and the Hennessy Funds are made at the net asset value per share next determined after receipt of the
10

complete and accurate purchase or redemption order by the respective fund’s transfer agent.  Investor Class and Institutional Class shares of the Hennessy Funds do not have a load or redemption fee.
 
Original Class and Institutional Class shares of the Rainier U.S. Funds represent an interest in the same assets of the Rainier U.S. Funds, have the same rights and are identical in all material respects except that Original Class shares of the Rainier U.S. Funds are subject to shareholder servicing fees.  Investor Class and Institutional Class shares of the Hennessy Funds represent an interest in the same assets of the Hennessy Funds, have the same rights and are identical in all material respects except that (1) Investor Class shares may bear distribution fees and Institutional Class shares are not subject to such fees, and (2) Investor Class shares bear shareholder servicing fees payable to Hennessy Advisors and Institutional Class Shares are not subject to such fees.
 
Both the Rainier U.S. Funds’ transfer agent and the Hennessy Funds’ transfer agent assess a fee of $15.00 for each redemption made by wire.
 
The minimum amounts required to invest in or add to an account with the Rainier U.S. Funds and the Hennessy Funds, are indicated below:
 
   
Rainier U.S. Funds
(Original Class)
 
Rainier U.S. Funds
(Institutional Class) 
                 
Minimum Initial Investment
 
$
2,500
   
$
100,000
 
                 
Subsequent Minimum Initial Investment
 
$
250
   
$
1,000
 
                 
Automatic Investment Plan
 
$
100
   
$
100
 
 
 
   
Hennessy Funds
(Investor Class) 
 
Hennessy Funds
(Institutional Class) 
                 
Minimum Initial Investment
 
$
2,500
   
$
250,000
 
             
Subsequent Minimum Initial Investment
 
None
   
None
 
               
Individual Retirement Accounts
 
$
250
   
None
 
                 
Automatic Investment Plan
 
$
100
   
$
100
 

 
Both the Rainier U.S. Funds and the Hennessy Funds offer an automatic investment plan (“Automatic Investment Plan”), whereby an existing shareholder may authorize the Rainier U.S. Funds and the Hennessy Funds to withdraw from his or her personal bank account each month an amount that such shareholder wishes to invest.
 
Both the Rainier U.S. Funds and the Hennessy Funds may waive the investment minimums from time to time.  The investment minimums of Institutional Class shares of the Hennessy Funds will not apply to Institutional Class shareholders of the Rainier U.S. Funds who receive Institutional Class shares of the Hennessy Funds in the Reorganization, nor will the minimums that trigger conversion or mandatory redemption of Institutional Class shares of the Hennessy Cornerstone Mid Cap 30 Fund apply to Institutional Class shareholders of the Rainier
11

U.S. Funds.  Instead, the investment minimums currently applicable to Institutional Class shares for the Rainier U.S. Funds will continue to apply after the Reorganization.
 
5.
Exchange Procedures
Shareholders of the Rainier U.S. Funds may exchange shares of the Rainier U.S. Funds on any day that the New York Stock Exchange (“NYSE”) is open for regular session trading.
 
Shareholders of the Hennessy Funds may exchange shares of the Hennessy Funds for shares of any of the other series of Hennessy Funds Trust on any day that the NYSE is open for business.  Shareholders of the Hennessy Funds may also exchange shares of the Hennessy Funds for shares of the First American Retail Prime Obligations Fund, a money market mutual fund that is not affiliated with the Hennessy Funds, Hennessy Advisors or any sub-advisor to a series of Hennessy Funds Trust.
 
Each series of Hennessy Funds Trust reserves the right on notice to shareholders to limit the number of exchanges that can be made in any year to avoid excess expenses.  Each series of Hennessy Funds Trust reserves the right to reject any exchange order.  Each series of Hennessy Funds Trust may modify or terminate the exchange privilege upon written notice to shareholders.  Each series of Hennessy Funds Trust may suspend temporarily the exchange privilege in emergency situations or in cases where, in the judgment of the manager, continuation of the privilege would be detrimental to the Hennessy Funds and their shareholders.  Such temporary suspension can be without prior notification to shareholders.
12

 
E.
Other Significant Considerations and Consequences of the Proposed Reorganization
As a result of the Reorganization, the Rainier U.S. Funds will become part of the Hennessy Funds with Hennessy Advisors as the investment advisor.  The following is information regarding the fees and expenses of the Hennessy Funds as compared to the Rainier U.S. Funds:
 
 
Rainier Mid Cap
Equity Fund
  (Original Class)  
Rainier Small/Mid Cap Equity Fund
  (Original Class)  
Hennessy Cornerstone
Mid Cap 30 Fund
Pro Forma
  (Investor Class)  
       
Advisory Fee
0.85%
0.85%
0.74%
       
Expense Ratio(1)
1.44%
1.39%
1.34%
       
Savings in Expense Ratio
as Compared to Hennessy
Cornerstone Mid Cap 30
Fund Pro Forma
(Investor)
0.10%
0.05%
N/A
 
(1)   The expense ratios for Original Class shares of the Rainier Mid Cap Equity Fund and the Rainier Small/Mid Cap Equity Fund shown above are the gross expense ratios from the Annual Report of the Rainier U.S. Funds dated March 31, 2017.  The pro forma expense ratio for Investor Class shares of the Hennessy Cornerstone Mid Cap 30 Fund shown above is based on the expense ratio from the Semi-Annual Report of the Hennessy Cornerstone Mid Cap 30 Fund dated April 30, 2017.  Hennessy Advisors has agreed that the fees and expenses attributable to Investor Class shares of the Hennessy Cornerstone Mid Cap 30 Fund will be capped, pursuant to the written direction of the Board of Trustees of Hennessy Funds Trust, to the extent necessary so that expenses (exclusive of all federal, state, and local taxes, interest, brokerage commissions, acquired fund fees and expenses and other costs incurred in connection with the purchase and sale of securities, and extraordinary items) do not exceed the total annual fees and expenses of Original Class shares of the Rainier Small/Mid Cap Equity Fund as reflected in the table above for a period of two years from the date of the Reorganization.

 
Rainier Mid Cap
Equity Fund
  (Institutional Class)  
Rainier Small/Mid Cap Equity Fund
  (Institutional Class)  
Hennessy Cornerstone Mid Cap 30 Fund
Pro Forma
  (Institutional Class)  
       
Advisory Fee
0.85%
0.85%
0.74%
       
Expense Ratio(1)
1.17%
1.07%
0.97%
       
Savings in Expense Ratio
as Compared to Hennessy
Cornerstone Mid Cap 30
Fund Pro Forma
(Institutional)
0.20%
0.10%
N/A
 
(1)    The expense ratios for Institutional Class shares of the Rainier Mid Cap Equity Fund and the Rainier Small/Mid Cap Equity Fund shown above are the gross expense ratios from the Annual Report of the Rainier U.S. Funds dated March 31, 2017.  The pro forma expense ratio for Institutional Class shares of the Hennessy Cornerstone Mid Cap 30 Fund shown above is based on the expense ratio from the Semi-Annual Report of the Hennessy Cornerstone Mid Cap 30 Fund dated April 30, 2017.  Hennessy Advisors has agreed that the fees and expenses attributable to Institutional Class shares of the Hennessy Cornerstone Mid Cap 30 Fund will be capped, pursuant to the written direction of the Board of Trustees of Hennessy Funds Trust, to the extent necessary so that expenses (exclusive of all federal, state, and local taxes, interest, brokerage commissions, acquired fund fees and expenses and other costs incurred in connection with the purchase and sale of securities, and extraordinary items) do not exceed the total annual fees and expenses of Institutional Class shares of the Rainier Small/Mid Cap Equity Fund as reflected in the table above for a period of two years from the date of the Reorganization.
13

 
Rainier Large Cap Equity Fund
  (Original Class)  
Hennessy Cornerstone Large Growth Fund
Pro Forma
  (Investor Class)  
     
Advisory Fee
0.70%
0.74%
     
Expense Ratio(1)
1.29%
1.26%
     
Savings in Expense Ratio as
Compared to Hennessy Cornerstone
Large Growth Fund Pro Forma
(Investor)
0.03%
N/A
 
(1)    The expense ratio for Original Class shares of the Rainier Large Cap Equity Fund shown above is the gross expense ratio from the Annual Report of the Rainier U.S. Funds dated March 31, 2017.   The pro forma expense ratio for Investor Class shares of the Hennessy Cornerstone Large Growth Fund shown above is based on the expense ratio from the Semi-Annual Report of the Hennessy Cornerstone Large Growth Fund dated April 30, 2017.  Hennessy Advisors has agreed that the fees and expenses attributable to Investor Class shares of the Hennessy Cornerstone Large Growth Fund will be capped, pursuant to an expense limitation agreement, to the extent necessary so that expenses (exclusive of all federal, state, and local taxes, interest, brokerage commissions, acquired fund fees and expenses and other costs incurred in connection with the purchase and sale of securities, and extraordinary items) do not exceed the total annual fees and expenses of Original Class shares of the Rainier Large Cap Equity Fund as reflected in the table above for a period of two years from the date of the Reorganization.  The net expense ratio for the Rainier Large Cap Equity Fund from the March 31, 2017, Annual Report (after fee waivers and expense subsidies) was lower than for the pro forma Hennessy Cornerstone Large Growth Fund because Rainier agreed to waive 0.07% of its advisory fee through July 31, 2017.  That waiver will expire and the advisory fee will increase to the contractual rate on August 1, 2017.

 
Rainier Large Cap Equity Fund
Pro Forma
  (Institutional Class)  
Hennessy Cornerstone Large Growth Fund
Pro Forma
  (Institutional Class)  
     
Advisory Fee
0.70%
0.74%
     
Expense Ratio(1)
0.98%
0.97%
     
Savings in Expense Ratio as
Compared to Hennessy Cornerstone
Large Growth Fund Pro Forma
(Institutional)
0.01%
N/A
 
(1)    The pro forma expense ratio shown above for Institutional Class shares of the Rainier Large Cap Equity Fund is higher than the net expense ratio shown in the Annual Report of the Rainier U.S. Funds dated March 31, 2017, to reflect the effect of reduced assets for the Rainier Large Cap Equity Fund and the Rainier Trust and to reflect the expiration after July 31, 2017, of Rainier’s waiver of 0.07% of its advisory fee.   The pro forma expense ratio for Institutional Class shares of the Hennessy Cornerstone Large Growth Fund shown above is based on the expense ratio from the Semi-Annual Report of the Hennessy Cornerstone Large Growth Fund dated April 30, 2017.  Hennessy Advisors has agreed that the fees and expenses attributable to Institutional Class shares of the Hennessy Cornerstone Large Growth Fund will be capped, pursuant to an expense limitation agreement, to the extent necessary so that expenses (exclusive of all federal, state, and local taxes, interest, brokerage commissions, acquired fund fees and expenses and other costs incurred in connection with the purchase and sale of securities, and extraordinary items) do not exceed the total annual fees and expenses of Institutional Class shares of the Rainier Large Cap Equity Fund as reflected in the table above for a period of two years from the date of the Reorganization. The net expense ratio for the Rainier Large Cap Equity Fund from the March 31, 2017, Annual Report (after fee waivers and expense subsidies) was lower than the Hennessy Cornerstone Large Growth Fund because Rainier agreed to waive 0.07% of its advisory fee through July 31, 2017.  That waiver will expire and the advisory fee will increase to the contractual rate on August 1, 2017.  In addition, the expense ratios reflected in the Rainier Large Cap Equity Fund’s March 31, 2017, Annual Report were based upon higher assets in both the Rainier Large Cap Equity Fund and the Rainier Trust.
 
If the Reorganization is approved by shareholders, the Rainier U.S. Funds’ assets will be supervised by the Board of Trustees of Hennessy Funds Trust and will be serviced by the Hennessy Funds’ service providers.  The proposed Reorganization is not expected to have any adverse federal or state tax consequences to the Rainier U.S. Funds or their shareholders.
 
F.
Federal Tax Consequences of the Proposed Reorganization
The Rainier U.S. Funds will have received on the Closing Date (as defined in the Plan) an opinion of Foley & Lardner LLP, legal counsel to Hennessy Funds Trust, to the effect that the
14

proposed Reorganization will constitute a tax-free reorganization within the meaning of Section 368(a) of the Code.  Accordingly, no gain or loss will be recognized by the Rainier U.S. Funds upon the transfer of assets solely in exchange for shares of the Hennessy Funds and its assumption of liabilities (other than the excluded liabilities) or by shareholders of the Rainier U.S. Funds upon their receipt of shares of the Hennessy Funds.  The tax basis for the shares of the Hennessy Funds received by shareholders of the Rainier U.S. Funds will be the same as their tax basis for the shares of a Rainier U.S. Fund that are constructively surrendered in exchange therefore.  In addition, the holding period of the shares of the Hennessy Funds that are received in connection with the Reorganization will include the period during which the shares of a Rainier U.S. Fund to be constructively surrendered in exchange therefore were held, provided the latter shares were held as capital assets by the shareholders on the date of the exchange.
 
II.
PRINCIPAL RISK FACTORS
By investing in equity securities, the Hennessy Funds, like the Rainier U.S. Funds, may expose shareholders to certain market risks that could cause shareholders to lose money.  While the Rainier U.S. Funds and the Hennessy Funds are generally subject to the same principal risk factors, the Hennessy Funds employ a formula investment approach that subjects the Hennessy Funds to formula-investing risk (the Rainier U.S. Funds are not subject to such risk).
 
Risk Factors
Rainier Mid
Cap Equity
Fund
Rainier Small/Mid
Cap Equity
Fund
Hennessy Cornerstone
Mid Cap 30
Fund
Rainier
 Large Cap
Equity Fund
Hennessy Cornerstone Large Growth Fund
           
           
Market and Equity
Investment Risk
X
X
X
X
X
           
           
Loss of Money Risk
X
X
X
X
X
           
           
Portfolio Turnover Risk
X
X
X
   
           
           
Management Risk
X
X
 
X
 
           
           
Growth Style Risk
X
X
X
X
X
           
           
Foreign Securities Risk
X
X
 
X
 
           
           
IPO Risk
X
X
 
X
 
           
           
ETF Risk
X
X
 
X
 
           
           
Medium-Sized Company
Risk
X
     
X
           
           
Small- and Medium-Sized Companies Risk
 
X
X
   
           
 
15

 
Risk Factors
 
Rainier Mid
Cap Equity
Fund
 
Rainier Small/Mid
Cap Equity
Fund
 
Hennessy Cornerstone
Mid Cap 30
Fund
 
Rainier
Large Cap
Equity Fund
 
Hennessy Cornerstone Large Growth Fund
 
           
Market Capitalization Risk
     
X
 
           
           
Formula Investing Risk
   
X
 
X
           
           
Value Investing Risk
   
X
 
X
           
 
The Rainier U.S. Funds and the Hennessy Funds are all subject to the following principal risks:
 
Market and Equity Investment Risk: The market value of a security may move up or down, and these fluctuations may cause a security to be worth more or less than the price originally paid for it. Market risk may affect a single company, an industry, a sector of the economy or the market as a whole.  The value of equity securities will fluctuate due to many factors, including the past and predicted earnings of the issuer, the quality of the issuer’s management, general market conditions, forecasts for the issuer’s industry and the value of the issuer’s assets.
 
Loss of Money Risk: Loss of money is a risk of investing in the funds.
 
The Rainier Mid Cap Equity Fund, the Rainier Small/Mid Cap Equity Fund and the Hennessy Cornerstone Mid Cap 30 Fund are all subject to the following additional principal risks:
 
Portfolio Turnover Risk: The funds pay transaction costs, such as commissions, when they buy and sell securities, or “turn over” their portfolio.  A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when fund shares are held in a taxable account.  These costs affect the funds’ performance.  With regard to the Hennessy Cornerstone Mid Cap 30 Fund, while the Fund is rebalanced annually, the rebalancing does not always occur in the same month and thus there may be times when there are either multiple rebalances during a single fiscal year or no rebalances during a single fiscal year, and this varied timing for the rebalances may result in a higher portfolio turnover rate for a given year.
 
Growth Style Risk: A growth style of investing may subject the funds to above-average fluctuations as a result of seeking higher than average capital growth. Historically, growth stocks have performed best during later stages of economic expansion and value stocks have performed best during early periods of economic recovery. Growth stocks may perform differently from the market as a whole and may be out of favor with investors for periods of time.
16

The Rainier U.S. Funds are all subject to the following additional principal risks:
 
Management Risk: There is a risk that Rainier’s strategy for managing the Rainier U.S. Funds may not achieve the desired results or may be less effective than other strategies in a particular market environment.
 
Foreign Securities Risk: Foreign securities (including securities of issuers in emerging markets) involve additional risks, including political and economic instability, differences in financial reporting, accounting, auditing and legal standards, nationalization, expropriation or confiscatory taxation, less publicly available information, currency rate fluctuations, less or more strict regulation of securities markets and markets having less liquidity and more volatility than domestic markets.
 
IPO Risk: IPO share prices can be volatile and fluctuate considerably due to factors such as the absence of a prior public market, unseasoned trading, a limited number of shares available for trading, and limited operating history and/or information about the issuer.  The purchase of IPO shares may involve high transaction costs. IPO shares are subject to market risk and liquidity risk.
 
ETF Risk: ETFs have the risks of the investments they make and that they may not achieve their investment objectives.  In addition, ETFs may be less liquid and thus their share values more volatile than the values of the investments they hold.  Rainier U.S. Fund assets invested in ETFs and other mutual funds incur another layer of expenses, including operating costs and advisory fees that shareholders indirectly bear.
 
The Hennessy Cornerstone Large Growth Fund and the Rainier Mid Cap Equity Fund are both subject to the following additional principal risk:
 
Medium-Sized Company Risk: The funds may invest in medium-sized companies, which may have more limited liquidity and greater price volatility than larger, more established companies.
 
The Hennessy Cornerstone Mid Cap 30 Fund and the Rainier Small/Mid Cap Equity Fund are both subject to the following additional principal risk:
 
Small- and Medium-Sized Companies Risk: The funds invest in small- and medium-sized companies, which may have more limited liquidity and greater price volatility than larger, more established companies.  Small companies may have limited product lines, markets or financial resources and their management may be dependent on a limited number of key individuals.
 
The Rainier Large Cap Equity Fund is subject to the following additional principal risk:
 
Market Capitalization Risk: Investments in securities of small- and mid-cap companies may involve greater risk of loss than investing in larger, more established companies.  Small- and mid-cap companies may have limited product lines, markets or financial resources and less seasoned management teams and may trade less frequently and at a lower volume than more widely held securities.  The prices of small- and mid-cap companies’ stock tend to fluctuate in value more than those of other stocks.  Large-cap stocks may have extended cycles where they perform worse than other segments of the stock market or the stock market in general.
 
17

The Hennessy Funds are both subject to the following additional principal risks:
 
Formula Investing Risk: The Hennessy Funds will adhere to their applicable formula during the course of the year, subject to applicable SEC requirements and federal tax requirements relating to mutual funds, despite any adverse developments that may arise. This could result in substantial losses to the Hennessy Funds, if for example, the stocks selected for the Hennessy Funds for a given year are experiencing financial difficulty, or are out of favor in the market because of weak performance, a poor earnings forecast, negative publicity or general market cycles. The Hennessy Funds’ portfolios are rebalanced annually in accordance with the applicable formula, which may result in the sale of securities that have been performing well in the near term and the purchase of securities that have been performing less well in the near term.
 
Value Investing Risk: A value-oriented investment approach involves the risk that value stocks may remain undervalued, or may not appreciate in value as anticipated. Value stocks may perform differently from the market as a whole and may be out of favor with investors for periods of time.
 
III.
COMPARISON FEE TABLES AND EXAMPLES
A.
Fee Tables
For the Rainier U.S. Funds and the Hennessy Funds, you will indirectly pay various expenses because each Rainier U.S. Fund and each Hennessy Fund pays fees and expenses that reduce the return on your investment.  The following tables describe the fees and expenses that you may pay if you buy and hold shares of the Rainier U.S. Funds or the Hennessy Funds.  The Reorganization itself will not cause a shareholder to directly pay any additional fees, but there can be no assurances about the net expense ratios, which may increase depending on various factors, including changes in market valuation and redemptions.
 
Rainier Mid Cap Equity Fund(1)
 
Shareholder Fees
  Original  
  Institutional  
(fees paid directly from your investment)
None
None
 
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
 
Management Fees
0.85%
0.85%
Distribution and Service (12b1) Fees
0.25%
0.00%
Other Expenses
0.34%
0.32%
Total Annual Fund Operating Expenses
1.44%
1.17%
 
(1)  Rainier contractually agreed to reduce its fees and/or pay Rainier Mid Cap Equity Fund expenses in order to limit Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement for shares of the Rainier Mid Cap Equity Fund to 1.35% and 1.10% of the Rainier Mid Cap Equity Fund’s average net assets of its Original Class and Institutional Class Shares, respectively (the “Expense Caps”).  The Expense Caps would have expired on July 31, 2017, but in connection with the Reorganization, they were extended for up to a one-year period ending on July 31, 2018.  The table above shows expenses as they would have been absent the Expense Caps, and reflect the gross expense ratio of the Rainier Mid Cap Equity Fund shown in the March 31, 2017, Annual Report.
 
Rainier Small/Mid Cap Equity Fund
 
Shareholder Fees
  Original  
  Institutional  
(fees paid directly from your investment)
None
None
 
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
 
Management Fees
0.85%
0.85%
Distribution and Service (12b-1) Fees
0.25%
0.00%
Other Expenses
0.29%
0.22%
Total Annual Fund Operating Expenses
1.39%
1.07%
 
 
18

Rainier Large Cap Equity Fund(1)
 
Shareholder Fees
  Original  
  Institutional  
(fees paid directly from your investment)
None
None
 
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
 
Management Fees
0.70%
0.70%
Distribution and Service (12b-1) Fees
0.25%
0.00%
Other Expenses
  0.34%  
  0.28%  
Total Annual Fund Operating Expenses
  1.29%  
  0.98%  
 
(1)    Rainier contractually agreed to reduce its advisory fee by 0.07% and to otherwise reduce its fees and/or reimburse Rainier Large Cap Equity Fund expenses through July 31, 2017.  The waiver of 0.07% of the advisory fee will terminate on July 31, 2017, and it has been excluded from the table above.  Operating expense limits of 1.29% for Original Class shares and 1.04% for Institutional Class shares would have expired on July 31, 2017, but in connection with the Reorganization, they were extended for up to a one-year period ending on July 31, 2018.  In addition to the removal of the 0.07% advisory fee waiver, the expense ratio shown above for Institutional Class shares of the Rainier Large Cap Equity Fund is higher than shown in the March 31, 2017, Annual Report to reflect the effect of reduced assets in the Rainier Large Cap Equity Fund and the Rainier Trust.
 
Hennessy Cornerstone Mid Cap 30 Fund – Investor Pro Forma
 
Shareholder Fees
  Investor  
  Investor Pro Forma  
(fees paid directly from your investment)
None
None
 
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
 
Management Fees
0.74%
0.74%
Distribution and Service (12b-1) Fees
0.15%
0.15%
Other Expenses
  0.46%  
0.45%(1)
     Shareholder Servicing
       0.10%
       0.10%
     Remaining Other Expenses
       0.36%
       0.35%
Total Annual Fund Operating Expenses
  1.35%
  1.34%(2)
 
(1)    “Other Expenses” reflect the pro forma impact of the Reorganization.
(2)    Hennessy Advisors has agreed that the fees and expenses attributable to Investor Class shares of the Hennessy Cornerstone Mid Cap 30 Fund will be capped, pursuant to the written direction of the Board of Trustees of Hennessy Funds Trust, to the extent necessary so that expenses (exclusive of all federal, state, and local taxes, interest, brokerage commissions, acquired fund fees and expenses and other costs incurred in connection with the purchase and sale of securities, and extraordinary items) do not exceed the total annual fees and expenses of Original Class shares of the Rainier Small/Mid Cap Equity Fund as reflected in the table above for a period of two years from the date of the Reorganization.

Hennessy Cornerstone Mid Cap 30 Fund – Institutional Pro Forma
 
Shareholder Fees
  Institutional  
  Institutional Pro Forma  
(fees paid directly from your investment)
None
None
 
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
 
Management Fees
0.74%
0.74%
Distribution and Service (12b-1) Fees
None
None
Other Expenses
  0.23%  
  0.23%(1)
     Shareholder Servicing
     None
     None
     Remaining Other Expenses
     0.23%
     0.23%
Total Annual Fund Operating Expenses
  0.97%  
  0.97%(2)
 
(1)    “Other Expenses” reflect the pro forma impact of the Reorganization.
(2)    Hennessy Advisors has agreed that the fees and expenses attributable to Institutional Class shares of the Hennessy Cornerstone Mid Cap 30 Fund will be capped, pursuant to the written direction of the Board of Trustees of Hennessy Funds Trust, to the extent necessary so that expenses exclusive of all federal, state, and local taxes, interest, brokerage commissions, acquired fund fees and expenses and other costs
19

 
incurred in connection with the purchase and sale of securities, and extraordinary items) do not exceed the total annual fees and expenses of Institutional Class shares of the Rainier Small/Mid Cap Equity Fund as reflected in the table above for a period of two years from the date of the Reorganization.
 
Hennessy Cornerstone Large Growth Fund – Investor Pro Forma
 
Shareholder Fees
  Investor  
  Investor Pro Forma  
(fees paid directly from your investment)
None
None
 
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
 
Management Fees
0.74%
0.74%
Distribution and Service (12b-1) Fees
0.15%
0.15%
Other Expenses
  0.37%  
  0.37%(1)
     Shareholder Servicing
     0.10%
     0.10%
     Remaining Other Expenses(2)
     0.27%
     0.27%
Total Annual Fund Operating Expenses
1.26%
1.26%(3)
 
(1)    “Other Expenses” reflect the pro forma impact of the Reorganization.
(2)    Includes acquired fund fees and expenses that do not exceed 0.01% of the Hennessy Cornerstone Large Growth Fund’s average daily net assets.  Acquired fund fees and expenses are not reflected in the Hennessy Cornerstone Large Growth Fund’s financial statements, with the result that the information presented in the expense table may differ from that presented in the financial highlights.
(3)    Hennessy Advisors has agreed that the fees and expenses attributable to Investor Class shares of the Hennessy Cornerstone Large Growth Fund will be capped, pursuant to an expense limitation agreement, to the extent necessary so that expenses (exclusive of all federal, state, and local taxes, interest, brokerage commissions, acquired fund fees and expenses and other costs incurred in connection with the purchase and sale of securities, and extraordinary items) do not exceed the total annual fees and expenses of Original Class shares of the Rainier Large Cap Equity Fund as reflected in the table above for a period of two years from the date of the Reorganization.  The net expense ratio for the Rainier Large Cap Equity Fund (after fee waivers and expense subsidies) was lower than the Hennessy Cornerstone Large Growth Fund because Rainier agreed to waive 0.07% of its advisory fee through July 31, 2017.  That waiver will expire and the advisory fee will increase to the contractual rate on August 1, 2017.

Hennessy Cornerstone Large Growth Fund – Institutional Pro Forma
 
Shareholder Fees
  Institutional  
  Institutional Pro Forma  
(fees paid directly from your investment)
None
None
 
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
 
Management Fees
0.74%
0.74%
Distribution and Service (12b-1) Fees
None
None
Other Expenses
  0.28%  
  0.23%(1)
     Shareholder Servicing
     None
     None
     Remaining Other Expenses(2)
     0.28%
     0.23%
Total Annual Fund Operating Expenses
  1.02%  
  0.97%(3)
 
(1)    “Other Expenses” reflect the pro forma impact of the Reorganization.
(2)    Includes acquired fund fees and expenses that do not exceed 0.01% of the Hennessy Cornerstone Large Growth Fund’s average daily net assets.  Acquired fund fees and expenses are not reflected in the Hennessy Cornerstone Large Growth Fund’s financial statements, with the result that the information presented in the expense table may differ from that presented in the financial highlights.
(3)    Hennessy Advisors has agreed that the fees and expenses attributable to Institutional Class shares of the Hennessy Cornerstone Large Growth Fund will be capped, pursuant to an expense limitation agreement, to the extent necessary so that expenses (exclusive of all federal, state, and local taxes, interest, brokerage commissions, acquired fund fees and expenses and other costs incurred in connection with the purchase and sale of securities, and extraordinary items) do not exceed the total annual fees and expenses of Institutional Class shares of the Rainier Large Cap Equity Fund as reflected in the table above for a period of two years from the date of the Reorganization. The net expense ratio for the Rainier Large Cap Equity Fund (after fee waivers and expense subsidies) was lower than the Hennessy Cornerstone Large Growth Fund because Rainier agreed to waive 0.07% of its advisory fee through July 31, 2017. That waiver will expire and the advisory fee will increase to the contractual rate on August 1, 2017.  In addition, the expense ratios reflected in the Rainier Large Cap Equity Fund’s March 31, 2017 Annual Report were based upon higher assets in both the Rainier Large Cap Equity Fund and the Rainier Trust.
20

B.
Example
This example set forth below is intended to help you compare the cost of investing in the Rainier U.S. Funds and the Hennessy Funds with other mutual funds.
 
This example assumes that you invest $10,000 in the specified fund for the time periods indicated and then redeem all of your shares at the end of those periods.  The example also assumes that you reinvest all dividends and distributions, that your investment has a 5% return each year and that the specified fund’s operating expenses remain the same.  Although your actual costs may be higher or lower, based on the assumptions, your costs would be:
 
   
Rainier Mid Cap Equity Fund
 
       
   
One Year
   
Three Years
   
Five Years
   
Ten Years
 
                                 
Original
 
$
147
   
$
456
   
$
787
   
$
1,724
 
                                 
Institutional
 
$
119
   
$
372
   
$
644
   
$
1,420
 
 
   
Rainier Small/Mid Cap Equity Fund
 
       
   
One Year
   
Three Years
   
Five Years
   
Ten Years
 
                                 
Original
 
$
142
   
$
440
   
$
761
   
$
1,669
 
                                 
Institutional
 
$
109
   
$
340
   
$
590
   
$
1,306
 
           
   
Rainier Large Cap Equity Fund 
 
       
   
One Year
   
Three Years
   
Five Years
   
Ten Years
 
                                 
Original
 
$
131
   
$
409
   
$
708
   
$
1,556
 
                                 
Institutional
 
$
100
   
$
312
   
$
542
   
$
1,201
 
           
   
Hennessy Cornerstone Mid Cap 30 Fund
 
       
   
One Year
   
Three Years
   
Five Years
   
Ten Years
 
                                 
Investor
 
$
137
   
$
428
   
$
739
   
$
1,624
 
                                 
Investor Pro Forma
 
$
136
   
$
425
   
$
734
   
$
1,613
 
                               
Institutional
 
$
99
   
$
309
   
$
536
   
$
1,190
 
                                 
Institutional Pro Forma
 
$
99
   
$
309
   
$
536
   
$
1,190
 
                               
           
   
Hennessy Cornerstone Large Growth Fund
 
       
   
One Year
   
Three Years
   
Five Years
   
Ten Years
 
Investor
 
$
128
   
$
400
   
$
692
   
$
1,523
 
                                 
Investor Pro Forma
 
$
128
   
$
400
   
$
692
   
$
1,523
 
                                 
Institutional
 
$
104
   
$
325
   
$
563
   
$
1,248
 
                                 
Institutional Pro Forma
 
$
99
   
$
309
   
$
536
   
$
1,190
 
                               
 
21

IV.
THE PROPOSED PLAN AND RESULTING REORGANIZATION
The following is a summary of key information concerning the proposed Reorganization.  Keep in mind that more detailed information appears in the Plan, a copy of which is attached to this Proxy Statement/Prospectus as Exhibit A, and in the documents incorporated by reference into this Proxy Statement/Prospectus.
 
On May 10, 2017, Hennessy Advisors, Rainier and Rainier’s majority owner, Manning & Napier Group, LLC, entered into a Transaction Agreement (the “Agreement”) pursuant to which Hennessy Advisors agreed to purchase certain assets of Rainier relating to the Rainier U.S. Funds.  The Reorganization is a condition to the purchase contemplated by the Agreement.  Material terms of the Agreement include:
 
Purchased Assets.  On the Closing Date, Rainier will deliver to Hennessy Advisors:
 
 
all assets, rights and benefits that pertain to and are necessary or desirable for the management, administration and operation of the Rainier U.S. Funds, including files, books, records and data files (in whatever form or forms including hard copy, microfilm, microfiche, CD ROM or other electronic media) possessed by Rainier or by third parties acting on behalf of Rainier or the Rainier U.S. Funds (except to the extent that Rainier is required by applicable law to retain such materials or copies thereof in which event Rainier shall, at Rainier’s expense, provide to Hennessy Advisors such materials or copies thereof, whichever is available and complies with such applicable law); and
 
all records required to be maintained and retained under the Investment Company Act or the Investment Advisers Act of 1940, as amended, by Rainier in connection with Rainier’s provision of investment advisory services to the Rainier U.S. Funds (except to the extent that Rainier is required by applicable law to retain such materials or copies thereof in which event Rainier shall provide to Hennessy Advisors such materials or copies thereof, whichever is available and complies with such applicable law), whether or not owned by Rainier.
Purchase Price.  The Agreement includes customary representations, warranties and covenants of Hennessy Advisors and Rainier, and provides for a payment upon closing equal to 0.85% of the aggregate current net asset value of the Rainier U.S. Funds measured as of the close of business on the trading day immediately preceding the Closing Date.
 
A.
Summary of the Proposed Reorganization
Pursuant to the Plan, the Hennessy Funds will acquire all of the assets, and assume the liabilities (other than the excluded liabilities), of the applicable Rainier U.S. Fund solely in exchange for that number of shares of the applicable Hennessy Fund having an aggregate net asset value equal to the aggregate net asset value of the applicable Rainier U.S. Fund as of the close of business on the business day immediately preceding the Closing Date of the proposed Reorganization (the “Valuation Date”).  Immediately thereafter, the applicable Rainier U.S. Fund will distribute such Hennessy Fund shares to its shareholders by establishing accounts on the Hennessy Fund’s share records in the names of those shareholders representing the respective pro rata number of Hennessy Fund shares deliverable to them, in complete liquidation of the
22

applicable Rainier U.S. Fund.  Certificates evidencing the Hennessy Fund shares will not be issued to the Rainier U.S. Funds’ shareholders.
 
Until the Closing Date of the proposed Reorganization, shareholders of the Rainier U.S. Funds will continue to be able to redeem their shares at the net asset value next determined after receipt by the Rainier U.S. Funds’ transfer agent of a redemption request in proper form.  Redemption and purchase requests received by the transfer agent after the Closing Date will be treated as requests received for the redemption or purchase of shares of the Hennessy Funds received by the shareholder in connection with the Reorganization.  After the proposed Reorganization is consummated, all of the issued and outstanding shares of the Funds will be canceled on the books of the Funds and the transfer books of the Rainier U.S. Funds will be permanently closed.
 
Generally, the assets transferred by the Rainier U.S. Funds to the Hennessy Funds will include all investments of the Rainier U.S. Funds held in their portfolios as of the Valuation Date and all other assets of the Rainier U.S. Funds as of such time.  No sales charges will be imposed on the shares of the Hennessy Funds issued in connection with the proposed Reorganization.
 
Since the shares of the Hennessy Funds will be issued at net asset value in exchange for the net assets of the Rainier U.S. Funds having a value equal to the aggregate net asset value of the shares of the Rainier U.S. Funds as of the Valuation Date, the net asset value per share of the Hennessy Funds should remain virtually unchanged solely as a result of the Reorganization.  Thus, the Reorganization should not result in dilution of the net asset value of the Rainier U.S. Funds or the Hennessy Funds immediately following consummation of the Reorganization.  However, a shareholder of the Rainier U.S. Funds may end up with a different number of shares compared to what he or she originally held, but the total dollar value of shares held will remain the same.
 
If the Plan is approved by the Rainier U.S. Funds’ shareholders at the special meeting, all required regulatory approvals are obtained, and certain conditions are either met or waived, it is expected that the Reorganization will take place on or about September 15, 2017, or such other date as is agreed to by the parties.  If the Plan is not approved by the Rainier Mid Cap Equity Fund’s shareholders, the Rainier Small/Mid Cap Equity Fund’s shareholders or the Rainier Large Cap Equity Fund’s shareholders, then the Rainier U.S. Funds will continue to operate and the Board may take any further action it deems to be in the best interest of the Rainier U.S. Funds and their shareholders, including terminating the Rainier U.S. Funds, in all cases subject to approval by the Rainier U.S. Funds’ shareholders if required by applicable law.
 
B.
Terms of the Plan
The following is a summary of the significant terms of the Plan.  This summary is qualified in its entirety by reference to the Plan, which is attached hereto as Exhibit A.
 
Valuation.  The assets of the Rainier U.S. Funds will be valued as of the time at which the net asset value is calculated pursuant to the valuation procedures set forth in the Hennessy Funds’ then current Prospectus and Statement of Additional Information on the Valuation Date, or at such time on such earlier or later date as may be mutually agreed on in writing by the parties.
 
The net asset value of each share of the Hennessy Funds will be the net asset value per share computed on the Valuation Date, using the market valuation procedures set forth in the
23

Hennessy Funds’ then current Prospectus and Statement of Additional Information as of the Valuation Date.
 
Issuance and Distribution of Hennessy Fund Shares.  On the Closing Date, the Hennessy Funds will deliver to the Rainier U.S. Funds a number of shares of the Hennessy Funds, the number of which will be determined by dividing (i) the value of the Rainier U.S. Funds’ assets, net of the Rainier U.S. Funds’ liabilities, as of the Valuation Date, computed pursuant to the valuation procedures set forth in the Hennessy Funds’ then current Prospectus and Statement of Additional Information, by (ii) the net asset value of one share of the Hennessy Funds, as of the Valuation Date, computed using the market valuation procedures set forth in the Hennessy Funds’ then current Prospectus and Statement of Additional Information.  The Rainier U.S. Funds will then distribute the shares of the Hennessy Funds received pro rata to its shareholders of record as of the Valuation Date in exchange for such shareholders’ proportional interests in the Rainier U.S. Funds.  The Hennessy Funds’ shares received by a Rainier U.S. Funds’ shareholder will have the same aggregate net asset value as such shareholder’s interest in the Rainier U.S. Funds as of the Valuation Date.
 
Expenses.  Rainier and Hennessy Advisors will be responsible for paying their own professional fees, including legal and accounting fees, and other costs and expenses incurred by them or any of their affiliates in connection with the Reorganization, provided that Rainier and Hennessy Advisors shall bear equally the costs associated with (i) soliciting and obtaining the proxy vote of the shareholders of the Rainier U.S. Funds, including the proxy advisory firm fees, and (ii) data conversion and transition services of U.S. Bancorp Fund Services, LLC.  Hennessy Advisors will pay all costs associated with the preparation and filing and obtaining effectiveness of the Registration Statement on Form N-14 and the Proxy Statement/Prospectus other than legal and accounting fees incurred by Rainier in connection with its review of the Registration Statement and Proxy Statement/Prospectus.
 
Required Approvals.  The Plan will be approved as follows by shareholders of the Rainier U.S. Funds:
 
      
Rainier Mid Cap Equity Fund:  Original Class and Institutional Class shareholders of the Rainier Mid Cap Equity Fund will vote together to approve the Plan.  Assuming a quorum is present, the Plan will be approved by the affirmative “vote of a majority of the outstanding voting securities” (as such phrase is defined in the Investment Company Act) of Original Class and Institutional Class shareholders of the Rainier Mid Cap Equity Fund voting together.  The “vote of a majority of the outstanding voting securities” means with regard to Original Class and Institutional Class shares of the Rainier Mid Cap Equity Fund voting together: the affirmative vote of the lesser of (i) 67% or more of the aggregate outstanding Original Class and Institutional Class shares present at the meeting if more than 50% of the aggregate outstanding Original Class and Institutional Class shares are present in person or by proxy or (ii) more than 50% of the aggregate outstanding Original Class and Institutional Class shares.
     
Rainier Small/Mid Cap Equity Fund: Original Class and Institutional Class shareholders of the Rainier Small/Mid Cap Equity Fund will vote together to approve the Plan.  Assuming a quorum is present, the Plan will be approved by the affirmative “vote of a majority of the outstanding voting securities” (as such phrase is defined in the Investment Company Act) of Original Class and
24

 
 
Institutional Class shareholders of the Rainier Small/Mid Cap Equity Fund voting together. The “vote of a majority of the outstanding voting securities” means with regard to Original Class and Institutional Class shares of the Rainier Small/Mid Cap Equity Fund voting together: the affirmative vote of the lesser of (i) 67% or more of the aggregate outstanding Original Class and Institutional Class shares present at the meeting if more than 50% of the aggregate outstanding Original Class and Institutional Class shares are present in person or by proxy or (ii) more than 50% of the aggregate outstanding Original Class and Institutional Class shares.
  
 
Rainier Large Cap Equity Fund: Original Class and Institutional Class shareholders of the Rainier Large Cap Equity Fund will vote together to approve the Plan.  Assuming a quorum is present, the Plan will be approved by the affirmative “vote of a majority of the outstanding voting securities” (as such phrase is defined in the Investment Company Act) of Original Class and Institutional Class shareholders of the Rainier Large Cap Equity Fund voting together.  The “vote of a majority of the outstanding voting securities” means with regard to Original Class and Institutional Class shares of the Rainier Large Cap Equity Fund voting together: the affirmative vote of the lesser of (i) 67% or more of the aggregate outstanding Original Class and Institutional Class shares present at the meeting if more than 50% of the aggregate outstanding Original Class and Institutional Class shares are present in person or by proxy or (ii) more than 50% of the aggregate outstanding Original Class and Institutional Class shares.
The approval of the Plan by the Rainier Mid Cap Equity Fund’s shareholders, the Rainier Small/Mid Cap Equity Fund’s shareholders and the Rainier Large Cap Equity Fund’s shareholders is required for the consummation of the Reorganization.  If the Plan is not approved by the Rainier Mid Cap Equity Fund’s shareholders, the Rainier Small/Mid Cap Equity Fund’s shareholders or the Rainier Large Cap Equity Fund’s shareholders, then the Rainier U.S. Funds will continue to operate and the Board may take any further action it deems to be in the best interest of the Rainier U.S. Funds and their shareholders, including terminating the Rainier U.S. Funds, in all cases subject to approval by the Rainier U.S. Funds’ shareholders if required by applicable law.  If sufficient votes are not obtained to approve the Plan by all of the Rainier U.S. Funds, the Reorganization will not be consummated.
 
Amendments and Conditions.  Generally, the Plan may be amended by the mutual written consent of the parties thereto, notwithstanding approval thereof by Rainier U.S. Fund shareholders, provided that no such amendment will have a material adverse effect on the interests of such shareholders without their further approval.  The obligations of the Rainier U.S. Funds and the Hennessy Funds pursuant to the Plan are subject to various conditions, including the requisite approval of the Reorganization by the Rainier U.S. Funds’ shareholders, the receipt of a legal opinion as to tax matters, and the confirmation by the Rainier Trust, on behalf of the Rainier U.S. Funds, and Hennessy Funds Trust, on behalf of the Hennessy Funds, of the continuing accuracy of their respective representations and warranties contained in the Plan.
 
Termination.  The Plan may be terminated, and the Reorganization abandoned, whether before or after the requisite approval by the shareholders of the Rainier U.S. Funds, at any time prior to the Closing Date, (i) by the Rainier Trust if any conditions precedent to the obligations of the Rainier U.S. Funds have not been fulfilled or waived; (ii) by Hennessy Funds Trust if any
25

conditions precedent to the obligations of the Hennessy Funds have not been fulfilled or waived; or (iii) by mutual consent of the Rainier Trust and Hennessy Funds Trust.
 
Indemnification.  Hennessy Funds Trust and the Hennessy Funds have agreed to indemnify the Rainier Trust and the Rainier U.S. Funds and their trustees and officers from all liabilities that may arise in connection with, or as a result of, any breach of representation or warranty made by Hennessy Funds Trust, on behalf of the Hennessy Funds.
 
The Rainier Trust and the Rainier U.S. Funds have agreed to indemnify Hennessy Funds Trust and the Hennessy Funds and their trustees and officers from all liabilities that may arise in connection with, or as a result of, any breach of representation or warranty made by the Rainier Trust, on behalf of the Rainier U.S. Funds.
 
C.
Description of the Hennessy Fund Shares
Each Hennessy Fund share issued to a Rainier U.S. Fund shareholder in connection with the Reorganization will be duly authorized, validly issued, fully paid and nonassessable when issued, and will be transferable without restriction and will have no preemptive or conversion rights.  The Hennessy Fund shares will be sold and redeemed based upon the net asset value of the Hennessy Fund next determined after receipt of the purchase or redemption request.
 
D.
Reasons for the Reorganization Considered by the Board
The Board, including a majority of the Independent Trustees, has determined that the interests of the Rainier U.S. Funds’ shareholders will not be diluted as a result of the proposed Reorganization and that the proposed Reorganization is in the best interests of the Rainier U.S. Funds’ shareholders.
 
The reasons that the Reorganization is proposed by Rainier are described above under “Synopsis – Reasons for the Reorganization and Board Deliberations.”
 
If the Plan is not approved by the Rainier Mid Cap Equity Fund’s shareholders, the Rainier Small/Mid Cap Equity Fund’s shareholders or the Rainier Large Cap Equity Fund’s shareholders, then the Rainier U.S. Funds will continue to operate and the Board may take any further action it deems to be in the best interest of the Rainier U.S. Funds and their shareholders, including terminating the Rainier U.S. Funds, in all cases subject to approval by the Rainier U.S. Funds’ shareholders if required by applicable law.
 
E.
Federal Income Tax Consequences
As a condition of the Reorganization, the Rainier U.S. Funds and the Hennessy Funds will have received an opinion of Foley & Lardner LLP, legal counsel to Hennessy Funds Trust, to the effect that for federal income tax purposes:
 
 
the transfer by each Rainier U.S. Fund of its assets in exchange for shares of the applicable Hennessy Fund and the assumption by such Hennessy Fund of the liabilities (other than the excluded liabilities) should be treated as a “reorganization” within the meaning of Section 368(a)(1)(C) of the Code, and each such Hennessy Fund and Rainier U.S. Fund should be treated as a “party to a reorganization” within the meaning of Section 368(b) of the Code;
26

 
 
no gain or loss should be recognized by the applicable Hennessy Fund upon the receipt of the assets of the applicable Rainier U.S. Fund solely in exchange for the shares of such Hennessy Fund, as well as the assumption by such Hennessy Fund of the liabilities (other than the excluded liabilities);
 
no gain or loss should be recognized by the applicable Rainier U.S. Fund upon the transfer of its assets to the applicable Hennessy Fund in exchange for such Hennessy Fund’s shares and the assumption by such Hennessy Fund of the liabilities (other than the excluded liabilities) or upon the distribution (whether actual or constructive) of such Hennessy Fund’s shares to such Rainier U.S. Fund’s shareholders in complete liquidation of such Rainier U.S. Fund;
 
no gain or loss should be recognized by the applicable Rainier U.S. Fund’s shareholders upon the receipt of the applicable Hennessy Fund’s shares distributed in complete liquidation of such Rainier U.S. Fund;
 
the aggregate tax basis of the shares of the applicable Hennessy Fund’s shares received by the applicable Rainier U.S. Fund’s shareholders pursuant to the Reorganization should be the same as the aggregate tax basis of such Rainier U.S. Fund’s shares held by such shareholder immediately prior to the Reorganization, and the holding period of such Hennessy Fund’s shares to be received by such Rainier U.S. Fund’s shareholders should include the period during which such Rainier U.S. Fund’s shares exchanged therefor were held by such shareholder (provided such Rainier U.S. Fund’s shares were held by such shareholder as capital assets on the date of the Reorganization);
 
the tax basis of the assets of the applicable Rainier U.S. Fund acquired by the applicable Hennessy Fund should be the same as the tax basis of such assets to such Rainier U.S. Fund immediately prior to the Reorganization, and the holding period of the assets of such Rainier U.S. Fund, in the hands of such Hennessy Fund, should include the period during which those assets were held by such Rainier U.S. Fund; and
 
the applicable Hennessy Fund should succeed to and take into account, as of the date of the transfer as defined in Section 1.381(b)-1(b) of the income tax regulations issued by the United States Department of the Treasury, the items of the applicable Rainier U.S. Fund described in Section 381(c) of the Code, subject to the conditions and limitations specified in Sections 381, 382, 383 and 384 of the Code and the regulations thereunder.
Although the Rainier U.S. Funds and the Hennessy Funds are not aware of any adverse state income tax consequences, they have not made any investigation as to those consequences for their shareholders.  Additionally, the Hennessy Funds and the Rainier U.S. Funds have not sought, and will not seek, a private letter ruling form the Internal Revenue Service (“IRS”) with respect to the federal income tax consequences of the Reorganization.  The opinion of Foley & Lardner LLP with respect to the federal income tax consequences of the Reorganization is not binding on the IRS and does not preclude the IRS from adopting a contrary position.  Shareholders should consult their own advisors concerning potential tax consequences of the Reorganization to them, including any applicable foreign, state or local income tax consequences.
27

F.
Comparison of Shareholder Rights
Set forth below is a discussion of the material similarities and differences in the rights of shareholders of the Rainier U.S. Funds versus the rights of shareholders of the Hennessy Funds.
 
Governing Law.  The Rainier U.S. Funds are organized as separate series of the Rainier Trust.  The Hennessy Funds are organized as a separate series of Hennessy Funds Trust.  Both the Rainier Trust and Hennessy Funds Trust are organized as statutory trusts under Delaware law.  The Rainier U.S. Funds are authorized to issue an unlimited number of full and fractional shares of beneficial interest and to divide or combine the shares into a greater or lesser number of shares without thereby changing the proportionate beneficial interest in a fund.  The Hennessy Funds are authorized to issue an unlimited number of shares of beneficial interest, no par value.  The operations of the Rainier U.S. Funds and the Hennessy Funds are governed by their respective trust instruments, bylaws and applicable Delaware law.
 
Shareholder Rights.  Under the Rainier Trust’s organizational documents, shareholders of the Rainier U.S. Funds are not entitled to preemptive rights in connection with the Reorganization.  Furthermore, shareholders of a Delaware trust do not have dissenters’ or appraisal rights.
 
Shareholder Liability.  Under Delaware law, trustees and shareholders of a statutory trust are generally afforded by statute the same limited liability as their corporate counterparts and are permitted liberal indemnification rights.  The risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which both inadequate insurance existed and the fund or the fund’s investment advisor was unable to meet its obligations.  Both the Rainier U.S. Funds and the Hennessy Funds are required to indemnify their respective trustees and officers against liabilities and expenses incurred in connection with proceedings relating to their positions as officers or trustees, except under certain limited circumstances relating to the culpability of such officers or trustees.
 
Board of Trustees.  The Rainier U.S. Funds and the Hennessy Funds, being series of a Delaware statutory trust, have a Board of Trustees.  Each Board of Trustees is comprised of three Independent Trustees and one interested trustee, but the membership of the Board of Trustees of the Rainier U.S. Funds is different from that of the Board of Trustees of the Hennessy Funds.
 
For more information, refer to the Statement of Additional Information for the Rainier U.S. Funds, dated July 29, 2016, as supplemented to date, and the Statement of Additional Information for the Hennessy Funds, dated February 28, 2017.
28

G.
Capitalization
The following tables show the capitalization of each of the Rainier U.S. Funds and the Hennessy Funds as of, and on a pro forma basis (unaudited) as of April 30, 2017, giving effect to the proposed Reorganization.  The tables are examples of the number of Original Class and Investor Class shares of each Rainier U.S. Fund that would be exchanged for Investor Class and Institutional Class shares of the Hennessy Funds, respectively, if the Reorganization were consummated on April 30, 2017, and they do not reflect the number of shares or value of shares that would actually be received if the Reorganization occurs on the Closing Date.
 
   
Rainier Mid
Cap Equity
Fund
   
Rainier
Small/Mid Cap
Equity Fund
   
Hennessy
Cornerstone Mid
Cap 30 Fund
   
Pro Forma
Adjustments
   
Pro Forma
Combined
 
   
Original Class/Investor Class
 
 
Aggregate Net Assets
 
$
32,889,267
   
$
239,129,048
   
$
399,253,929
   
$
   
$
671,272,244
 
                                         
Shares Outstanding 
   
855,932
     
6,519,856
     
19,499,228
     
5,906,356
(1) 
   
32,781,422
 
                                         
Net Asset Value Per Share
 
$
38.43
   
$
36.68
   
$
20.48
   
$
   
$
20.48
 
   
Institutional Class
 
                                         
Aggregate Net Assets
 
$
89,346,227
   
$
95,031,867
   
$
673,191,448
   
$
   
$
857,569,542
 
                                         
Shares Outstanding 
   
2,218,123
     
2,433,513
     
32,076,103
     
4,132,456
(1) 
   
40,860,195
 
                                         
Net Asset Value Per Share
 
$
40.28
   
$
39.05
   
$
20.99
   
$
   
$
20.99
 

 
 
Rainier Large
Cap Equity Fund
   
Hennessy
Cornerstone
Large Growth
Fund
   
Pro Forma Adjustments
   
Pro Forma
Combined
 
                         
Original Class/Investor Class
                       
                                 
Aggregate Net Assets
 
$
80,938,137
   
$
92,696,199
   
$
   
$
173,634,336
 
                                 
Shares Outstanding
   
4,175,298
     
8,165,680
     
2,955,815
(1) 
   
15,296,793
 
                                 
Net Asset Value Per Share
 
$
19.38
   
$
11.35
   
$
   
$
11.35
 
                                 
Institutional Class
                               
                                 
Aggregate Net Assets
 
$
27,665,193
   
$
12,763,060
   
$
   
$
40,428,253
 
 
29

 
          Hennessy               
           Cornerstone              
     Rainier Large     Large Growth           Pro Forma  
   
Cap Equity Fund
   
Fund
   
Pro Forma Adjustments
   
Combined
 
                         
Shares Outstanding
   
1,381,577
     
1,114,743
     
1,034,597
(1) 
   
3,530,917
 
Net Asset Value Per Share
 
$
20.02
   
$
11.45
   
$
   
$
11.45
 
 
(1)
 
The adjustment to the pro forma shares outstanding number represents an increase in shares outstanding of the applicable Hennessy Fund to reflect the exchange of shares of the corresponding Rainier U.S. Fund.
VI.
INFORMATION ABOUT THE RAINIER U.S. FUNDS AND THE HENNESSY FUNDS
A.
Investment Objective and Investment Strategies
Rainier U.S. Funds
 
See the discussion under “Comparison of the Rainier U.S. Funds and the Hennessy Funds – Investment Objectives and Principal Investment Policies” and “Principal Risk Factors” for a discussion of each Rainier U.S. Fund’s investment objective, investment strategies and principal risks.  For further discussion of the Rainier U.S. Funds’ investment objective, investment strategies and risks, see the most current Prospectus of the Rainier U.S. Funds, as amended or supplemented.
 
Hennessy Funds
 
See the discussion under “Comparison of the Rainier U.S. Funds and the Hennessy Funds – Investment Objectives and Principal Investment Policies” and “Principal Risk Factors” for a discussion of each Hennessy Fund’s investment objective, investment strategies and principal risks.  In order to provide a degree of flexibility, the Hennessy Funds may change their investment objective without obtaining shareholder approval.  An investment objective is not a guarantee.
 
The Hennessy Funds may temporarily invest a portion of their total assets in cash or liquid short-term securities pending investment of such assets in securities in accordance with the Hennessy Funds’ investment strategy, or to pay expenses or meet redemption requests.  Hennessy Advisors generally will not use investments in cash and short-term securities for temporary defensive purposes.
 
B.
Fees and Expenses
Rainier U.S. Funds
 
See the discussion under “Comparison Fee Tables and Examples.”  See also the discussion of the Rainier U.S. Funds’ fees and expenses in the most current Prospectus of the Rainier U.S. Funds, as amended or supplemented.
30

Hennessy Funds
 
See the discussion under “Comparison Fee Tables and Examples.”  See also the discussion of the Hennessy Funds’ fees and expenses in the Prospectus of the Hennessy Funds, dated February 28, 2017.
 
C.
Performance and Portfolio Turnover
Rainier U.S. Funds
 
For a discussion of the Rainier U.S. Funds’ performance during the fiscal year ended March 31, 2017, and of the portfolio turnover of the Rainier U.S. Funds, see the Annual Report to Shareholders for the Rainier U.S. Funds, for the fiscal year ended March 31, 2017.  Set forth below is performance information for the Rainier U.S. Funds for the calendar year ended December 31, 2016.
 
Rainier Mid Cap Equity Fund
 
Performance Information
 
The following performance information provides some indication of the risks of investing in the Rainier Mid Cap Equity Fund.  The bar chart below illustrates how the Rainier Mid Cap Equity Fund’s total returns have varied from year to year.  The table below compares the Rainier Mid Cap Equity Fund’s average annual total returns for the 1-year, 5-year and 10-year periods with a domestic broad-based market index and with a secondary domestic growth style market index.  The Rainier Mid Cap Equity Fund’s performance before and after taxes is not necessarily an indication of how the Rainier Mid Cap Equity Fund will perform in the future.  Updated performance is available on Rainier’s website at www.rainierfunds.com.
 
RAINIER MID CAP EQUITY FUND
CALENDAR YEAR TOTAL RETURNS OF INSTITUTIONAL SHARES


 
The year-to-date total return as of June 30, 2017 for the Fund was 8.96%.
 
             
Best Quarter:
 
 
+18.38%
  
 
(third quarter, 2009)
Worst Quarter:
 
 
-30.81%
  
 
(fourth quarter, 2008)

Performance for the Rainier Mid Cap Equity Fund’s Original Class shares will differ from that of the Rainier Mid Cap Equity Fund’s Institutional Class shares as the classes have different expenses.

31


AVERAGE ANNUAL TOTAL RETURNS
(for the periods ended December 31, 2016)
 
 
One
Five
Ten
 
Year
Years
Years
Rainier Mid Cap Equity
 
 
 
Fund – Institutional Shares
 
 
 
 
 
 
 
Return before taxes
  0.73%
10.40%
6.27%
 
 
 
 
Return after taxes on distributions
-5.69%
  7.16%
4.60%
 
 
 
 
Return after taxes on distributions and sale of fund shares
  2.85%
  7.56%
4.66%
 
 
 
 
Rainier Mid Cap Equity
 
 
 
Fund - Original Shares
 
 
 
 
 
 
 
Return before taxes
  0.46%
10.10%
5.99%
 
 
 
 
Russell Midcap® Index
13.80%
14.72%
7.86%
(reflects no deduction for fees, expenses or taxes)
 
 
 
 
 
 
 
Russell Midcap® Growth Index
  7.33%
13.51%
7.83%
(reflects no deduction for fees, expenses or taxes)
     
       
 
The “Return After Taxes on Distributions” shows the effect of taxable distributions (dividends and capital gains distributions), but assumes that you still hold Fund shares at the end of the period. The “Return After Taxes on Distributions and Sale of Fund Shares” shows the effect of both taxable distributions and any taxable gain or loss that would be realized if a Fund’s shares were sold at the end of the specified period. The “Return After Taxes on Distributions and Sale of Fund Shares” is higher than other return figures when a capital loss occurs upon the redemption of Fund shares.

After-tax returns are calculated using the historically highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

Rainier Small/Mid Cap Equity Fund
 
Performance Information
 
The following performance information provides some indication of the risks of investing in the Rainier Small/Mid Cap Equity Fund.  The bar chart below illustrates how the Rainier Small/Mid Cap Equity Fund’s total returns have varied from year to year.  The table below compares the Rainier Small/Mid Cap Equity Fund’s average annual total returns for the 1-year, 5-year and 10-year periods with a domestic broad-based market index and with a secondary domestic growth style market index.  The Rainier Small/Mid Cap Equity Fund’s performance before and after taxes is not necessarily an indication of how the Rainier Small/Mid Cap Equity Fund will perform in the future.  Updated performance is available on Rainier’s website at www.rainierfunds.com.
32

RAINIER SMALL/MID CAP EQUITY FUND
CALENDAR YEAR TOTAL RETURNS OF INSTITUTIONAL SHARES
 
 
 
The year-to-date total return as of June 30, 2017 for the Fund was 9.29%.
 
Best Quarter:
 
 
+18.59%
  
 
(third quarter, 2009)
Worst Quarter:
 
 
-32.26%
  
 
(fourth quarter, 2008)

Performance for the Rainier Small/Mid Cap Equity Fund’s Original Class shares will differ from that of the Rainier Small/Mid Cap Equity Fund’s Institutional Class shares as the classes have different expenses.


AVERAGE ANNUAL TOTAL RETURNS
(for the periods ended December 31, 2016)
 
One
Five
Ten
 
Year
Years
Years
Rainier Small/Mid Cap Equity
 
 
 
Fund – Institutional Shares
 
 
 
 
 
 
 
Return before taxes
 3.55%
10.97%
5.29%
 
 
 
 
Return after taxes on distributions
 0.99%
  8.94%
4.06%
 
 
 
 
Return after taxes on distributions and sale of fund shares
 4.12%
  8.67%
4.15%
 
 
 
 
Rainier Small/Mid Cap Equity
 
 
 
Fund - Original Shares
 
 
 
 
 
 
 
Return before taxes
 3.23%
10.64%
5.00%
 
 
 
 
Russell 2500™ Index
17.59%
14.54%
7.69%
(reflects no deduction for fees, expenses or taxes)
 
 
 
 
 
 
 
Russell 2500™ Growth Index
 9.73%
13.88%
8.24%
(reflects no deduction for fees, expenses or taxes)
     
       
 
The “Return After Taxes on Distributions” shows the effect of taxable distributions (dividends and capital gains distributions), but assumes that you still hold Fund shares at the end of the period. The “Return After Taxes on Distributions and Sale of Fund Shares” shows the effect of both taxable distributions and any taxable gain or loss that would be realized if a Fund’s shares were sold at the end of the specified period. The “Return After Taxes on
33

Distributions and Sale of Fund Shares” is higher than other return figures when a capital loss occurs upon the redemption of Fund shares.

After-tax returns are calculated using the historically highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

Rainier Large Cap Equity Fund
 
Performance Information
 
The following performance information provides some indication of the risks of investing in the Rainier Large Cap Equity Fund.  The bar chart below illustrates how the Rainier Large Cap Equity Fund’s total returns have varied from year to year.  The table below compares the Rainier Large Cap Equity Fund’s average annual total returns for the 1-year, 5-year and 10-year periods with a domestic broad-based market index and with a secondary domestic growth style market index.  The Rainier Large Cap Equity Fund’s performance before and after taxes is not necessarily an indication of how the Rainier Large Cap Equity Fund will perform in the future.  Updated performance is available on Rainier’s website at www.rainierfunds.com.
 
RAINIER LARGE CAP EQUITY FUND
CALENDAR YEAR TOTAL RETURNS OF INSTITUTIONAL SHARES
 
 
 
The year-to-date total return as of June 30, 2017 for the Fund was 11.75%.
 
Best Quarter:
 
 
+14.81%
  
 
(first quarter, 2012)
Worst Quarter:
 
 
-23.64%
  
 
(fourth quarter, 2008)

Performance for the Rainier Large Cap Equity Fund’s Original Class shares will differ from that of the Rainier Large Cap Equity Fund’s Institutional Class shares as the classes have different expenses.
34

AVERAGE ANNUAL TOTAL RETURNS
(for the periods ended December 31, 2016)
 
 
One
Five
Ten
 
Year
Years
Years
Rainier Large Cap Equity
 
 
 
Fund – Institutional Shares
 
 
 
 
 
 
 
Return before taxes
 2.32%
11.38%
5.02%
 
 
 
 
Return after taxes on distributions
-0.80%
  7.14%
2.81%
 
 
 
 
Return after taxes on distributions and sale of fund shares
 3.94%
  8.51%
3.73%
 
 
 
 
Rainier Large Cap Equity
 
 
 
Fund - Original Shares
 
 
 
 
 
 
 
Return before taxes
 2.02%
11.07%
4.74%
 
 
 
 
S&P 500® Index
11.96%
14.66%
6.95%
(reflects no deduction for fees, expenses or taxes)
 
 
 
 
 
 
 
Russell 1000® Growth Index
 7.08%
14.50%
8.33%
(reflects no deduction for fees, expenses or taxes)
     
       
 
The “Return After Taxes on Distributions” shows the effect of taxable distributions (dividends and capital gains distributions), but assumes that you still hold Fund shares at the end of the period. The “Return After Taxes on Distributions and Sale of Fund Shares” shows the effect of both taxable distributions and any taxable gain or loss that would be realized if a Fund’s shares were sold at the end of the specified period. The “Return After Taxes on Distributions and Sale of Fund Shares” is higher than other return figures when a capital loss occurs upon the redemption of Fund shares.

After-tax returns are calculated using the historically highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

Hennessy Cornerstone Mid Cap 30 Fund
 
Performance Information
 
The following performance information provides some indication of the risks of investing in the Hennessy Cornerstone Mid Cap 30 Fund by showing its performance from year to year and how the Hennessy Cornerstone Mid Cap 30 Fund’s average annual returns for 1, 5, and 10 years compare with those of an index that reflects a broad measure of market performance, the S&P 500 Index, as well as an additional index that reflects the types of securities in which the Hennessy Cornerstone Mid Cap 30 Fund invests, the Russell Midcap® Index.  The Hennessy Cornerstone Mid Cap 30 Fund is the successor to the Hennessy Cornerstone Mid Cap 30 Fund, a series of Hennessy Mutual Funds, Inc. (the “Predecessor Mid Cap 30 Fund”).  The performance information provided for the periods on or prior to February 28, 2014, is historical information for the Predecessor Mid Cap 30 Fund, which was managed by the same investment advisor and had the same investment objective and investment strategy as the Hennessy Cornerstone Mid Cap 30 Fund. The Hennessy Cornerstone Mid Cap 30 Fund’s past performance (before and after taxes) is not necessarily an indication of future performance. Performance may be higher or
35

lower in the future. Updated performance information is available on the Hennessy Funds’ website (hennessyfunds.com).
 
HENNESSY CORNERSTONE MID CAP 30 FUND
CALENDAR YEAR TOTAL RETURNS OF INVESTOR SHARES

 

For the period shown in the bar chart, the Fund’s highest quarterly return was 15.10% for the quarter ended March 31, 2013, and the lowest quarterly return was -22.59% for the quarter ended September 30, 2008.

The year-to-date return of Investor Class shares of the Hennessy Cornerstone Mid Cap 30 Fund through April 30, 2017, is 5.03%.
 
Performance for the Hennessy Cornerstone Mid Cap 30 Fund’s Institutional Class shares will differ from that of the Hennessy Cornerstone Mid Cap 30 Fund’s Investor Class shares as the classes have different expenses and inception dates.
36

AVERAGE ANNUAL TOTAL RETURNS
(for the periods ended December 31, 2016)
 
 
One
Five
Ten
 
Year
Years
Years*
Hennessy Cornerstone Mid Cap 30
 
 
 
Fund - Investor Shares
 
 
 
 
 
 
 
Return before taxes
  5.82%
12.76%
7.94%
 
 
 
 
Return after taxes on distributions
  5.67%
11.94%
7.30%
 
 
 
 
Return after taxes on distributions and sale of Fund shares
  3.43%
10.15%
6.41%
 
 
 
 
Hennessy Cornerstone Mid Cap 30
 
 
 
Fund - Institutional Shares
 
 
 
 
 
 
 
Return before taxes
  6.20%
13.11%
8.27%
 
 
 
 
Russell Midcap® Index
13.80%
14.72%
7.86%
(reflects no deduction for fees, expenses or taxes)
 
 
 
 
 
 
 
S&P 500 Index
11.96%
14.66%
6.95%
(reflects no deduction for fees, expenses or taxes)
     
       

*The inception date of the Hennessy Cornerstone Mid Cap 30 Fund’s Institutional Class is March 3, 2008. Performance shown prior to the inception of Institutional Class shares reflects the performance of the Hennessy Cornerstone Mid Cap 30 Fund’s Investor Class shares and includes expenses that are not applicable to and are higher than those of Institutional Class shares.
 
The Hennessy Cornerstone Mid Cap 30 Fund uses the Russell Midcap® Index as an additional index because it compares the Hennessy Cornerstone Mid Cap Fund’s performance with the returns of an index reflecting the performance of investments similar to those of the Hennessy Cornerstone Mid Cap 30 Fund.
 
The after-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes.  Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their Hennessy Cornerstone Mid Cap 30 Fund shares through tax deferred arrangements, such as 401(k) plans or individual retirement accounts.  After-tax returns are shown for Investor Class shares only and after-tax returns for Institutional Class shares will vary.
 
Portfolio Turnover
 
The Hennessy Cornerstone Mid Cap 30 Fund pays transaction costs, such as commissions, when it buys and sells securities, or “turns over” its portfolio.  A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Hennessy Cornerstone Mid Cap 30 Fund shares are held in a taxable account.  These costs, which are not reflected in the Annual Fund Operating Expenses or in the Example set forth in the Hennessy Funds’ Prospectus dated February 28, 2017, affect the Hennessy Cornerstone Mid Cap 30 Fund’s performance. During the most recent fiscal year, the Hennessy Cornerstone Mid Cap 30 Fund had a portfolio turnover rate of 108% of the average value of its portfolio.
 
A description of the Hennessy Cornerstone Mid Cap 30 Fund’s policies and procedures regarding the disclosure of its portfolio holdings is available in the Hennessy Funds’ Statement
37

of Additional Information dated February 28, 2017, and on the website of the Hennessy Funds at hennessyfunds.com as of each calendar quarter end.
 
Hennessy Cornerstone Large Growth Fund
 
Performance Information
 
The following performance information provides some indication of the risks of investing in the Hennessy Cornerstone Large Growth Fund by showing changes in its performance from year to year and how the Hennessy Cornerstone Large Growth Fund’s average annual returns for 1 and 5 years and since inception compare with those of indices that reflect broad measures of market performance, the Russell 1000® Index and the S&P 500 Index.  The Hennessy Cornerstone Large Growth Fund’s past performance (before and after taxes) is not necessarily an indication of future performance. Performance may be higher or lower in the future. Updated performance information is available on the Hennessy Funds’ website (hennessyfunds.com).
 
HENNESSY CORNERSTONE LARGE GROWTH FUND
CALENDAR YEAR TOTAL RETURNS OF INVESTOR SHARES

 
 
For the period shown in the bar chart, the Fund’s highest quarterly return was 11.76% for the quarter ended September 30, 2010, and the lowest quarterly return was -15.98% for the quarter ended September 30, 2011.
 
The year-to-date return of Investor Class shares of the Hennessy Cornerstone Large Growth Fund through April 30, 2017, is 4.03%.
 
Performance for the Hennessy Cornerstone Large Growth Fund’s Institutional Class shares will differ from that of the Hennessy Cornerstone Large Growth Fund’s Investor Class shares as the classes have different expenses and inception dates.
38

AVERAGE ANNUAL TOTAL RETURNS  
(for the periods ended December 31, 2016)

 
 
 
 
One
Year
 
Five
Years
Since
Inception
(3/20/09)
Hennessy Cornerstone Large
Growth Fund - Investor Shares
 
 
 
 
 
 
 
 
 
 
Return before taxes
14.69%
12.96%
17.15%
 
 
 
 
Return after taxes on distributions
14.13%
10.39%
14.94%
 
 
 
 
Return after taxes on distributions and sale of Fund shares
  8.32%
10.11%
14.20%
 
 
 
 
Hennessy Cornerstone Large
Growth Fund - Institutional Shares
 
 
 
 
 
 
 
 
 
 
Return before taxes
15.05%
13.18%
17.44%
 
 
 
 
Russell 1000® Index
(reflects no deduction for
fees, expenses or taxes)
12.05%
14.69%
17.40%
 
 
 
     
 
 
 
 
S&P 500 Index
(reflects no deduction for
fees, expenses or taxes)
11.96%
14.66%
17.19%
 
 
 
     

The after-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Investor Class shares only and after-tax returns for Institutional Class shares will vary.
 
Portfolio Turnover
 
The Hennessy Cornerstone Large Growth Fund pays transaction costs, such as commissions, when it buys and sells securities or “turns over” its portfolio.  A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Hennessy Cornerstone Large Growth Fund shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example set forth in the Hennessy Funds’ Prospectus dated February 28, 2017, affect the Hennessy Cornerstone Large Growth Fund’s performance.  During the most recent fiscal year, the Hennessy Cornerstone Large Growth Fund’s portfolio turnover rate was 53% of the average value of its portfolio.
 
A description of the Hennessy Cornerstone Large Growth Fund’s policies and procedures regarding the disclosure of its portfolio holdings is available in the Hennessy Funds’ Statement of Additional Information dated February 28, 2017, and on the website of the Hennessy Funds at hennessyfunds.com as of each calendar quarter end.
39

D.
Investment Advisor and Portfolio Managers
Rainier U.S. Funds
 
For a discussion of the Rainier U.S. Funds’ investment advisor and portfolio managers, see the most current Prospectus of the Rainier U.S. Funds, as amended or supplemented.
 
A discussion regarding the basis for the Board approving the investment advisory agreement for the Rainier U.S. Funds with their investment advisor is available in the Annual Report to Shareholders for the Rainier U.S. Funds for the fiscal year ended March 31, 2016.
 
Hennessy Funds
 
A discussion regarding the basis for the Board of Trustees of Hennessy Funds Trust approving the investment advisory agreements with Hennessy Advisors for the Hennessy Funds is available in the Semi-Annual Reports to Shareholders for the Hennessy Funds for the six months ended April 30, 2017.
 
Hennessy Advisors is the investment manager of the Hennessy Funds.  The address of Hennessy Advisors, Inc. is 7250 Redwood Blvd., Suite 200, Novato, California 94945.
 
Hennessy Advisors has been providing investment advisory services since 1989.  Hennessy Advisors furnishes each series of Hennessy Funds Trust with office space and certain administrative services and provides most of the personnel needed by each series of Hennessy Funds Trust.
 
As of May 31, 2017, Hennessy Advisors managed approximately $6.55 billion of net assets on behalf of all series in Hennessy Funds Trust.  For its services, the Hennessy Funds each pay Hennessy Advisors an investment advisory fee at an annual rate of 0.74% of their average daily net assets.
 
Neil J. Hennessy, Brian E. Peery and Ryan C. Kelley are primarily responsible for the day-to-day management of the portfolio of the Hennessy Funds and for developing and executing each Hennessy Fund’s investment program.  Mr. Hennessy serves as a Portfolio Manager of the Hennessy Cornerstone Mid Cap 30 Fund, and has been the President, Chief Executive Officer and Chairman of the Board of Directors of Hennessy Advisors, a registered investment advisor, since its organization in 1989. Mr. Peery has served as a Portfolio Manager of the Hennessy Funds since October 2014 and as a Co-Portfolio Manager from February 2011 through September 2014.  He has been employed by Hennessy Advisors since 2002.  Mr. Kelley has served as a Portfolio Manager of the Hennessy Funds since February 2017, and has been employed by Hennessy Advisors since 2012.  The Statement of Additional Information for the Hennessy Funds provides additional information about the portfolio managers’ compensation, other accounts managed by the portfolio managers and the portfolio managers’ ownership of securities in the Hennessy Funds.
 
E.
Payments to Broker-Dealers and Other Financial Intermediaries
Rainier U.S. Funds
 
If you purchase shares of a Fund through a broker-dealer or other financial intermediary (such as a bank), the Rainier U.S. Fund and/or its related companies may pay the intermediary
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for shareholder services.  In addition, Rainier may pay additional compensation (at its own expense and not as an expense of a Rainier U.S. Fund) to certain brokers, dealers or other financial intermediaries in connection with the sale or retention of Rainier U.S. Fund shares.  These payments may create a conflict of interest by influencing the broker-dealer or other financial intermediary and your salesperson to recommend a Rainier U.S. Fund over another investment. Ask your financial advisor or visit your financial intermediary’s website for more information.
 
Hennessy Funds
 
If you purchase shares of the Hennessy Funds through a broker-dealer or other financial intermediary (such as a bank), the Hennessy Funds and their related companies may pay the intermediary for performing shareholder services or distribution-related services for the Hennessy Funds.  If made, these payments may create a conflict of interest by influencing the broker-dealer or other financial intermediary and your financial advisor to recommend the Hennessy Funds over another investment.  Ask your financial advisor or visit your financial intermediary’s website for more information.
 
F.
Net Asset Value
Rainier U.S. Funds
 
For a discussion of how the offering price of the Rainier U.S. Funds’ shares is determined, see the most current Prospectus of the Rainier U.S. Funds, as amended or supplemented.
 
Hennessy Funds
 
The net asset value for the shares of the Hennessy Funds normally will be determined on each day the NYSE is open for trading. The net assets of the Hennessy Funds are valued as of the close of the NYSE (normally 4:00 P.M. Eastern time/1:00 P.M. Pacific time) on each business day.
 
The net asset value per share is computed by dividing the value of the securities held by a Hennessy Fund plus any cash or other assets, less its liabilities, by the number of its outstanding shares, and adjusting the result to the nearest full cent.  Securities listed on the NYSE, NYSE Amex Equities, or other national exchanges (other than The NASDAQ Stock Market) are valued at the last sale price on the date of valuation, and securities that are traded on The NASDAQ Stock Market are valued at the Nasdaq Official Closing Price on the date of valuation.  Bonds and other fixed-income securities are valued using market quotations provided by dealers, and also may be valued on the basis of prices provided by pricing services when the Board of Trustees of Hennessy Funds Trust believes that such prices reflect the fair market value of such securities.  If there is no sale in a particular security on such day, it is valued at the mean between the bid and ask prices.  Other securities, to the extent that market quotations are readily available, are valued at market value in accordance with procedures established by the Board of Trustees of Hennessy Funds Trust.  Any other securities and other assets for which market quotations are not readily available are valued in good faith in a manner determined by the Board of Trustees of Hennessy Funds Trust to best to reflect their full value.  Short-term instruments (those with remaining maturities of 60 days or less) are valued at amortized cost, which approximates market value.
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The Hennessy Funds will process purchase and redemption orders received by U.S. Bancorp Fund Services, LLC (the “Transfer Agent”) prior to the close of regular trading on a day that the NYSE is open at the net asset value determined later that day.  It will process purchase and redemption orders received after the close of regular trading at the net asset value determined at the close of regular trading on the next day the NYSE is open.  If an investor sends a purchase or redemption request to the Hennessy Funds’ corporate address, instead of to its Transfer Agent, the Hennessy Funds will forward it as promptly as practicable to the Transfer Agent, and the effective date of the purchase or redemption request will be delayed until the purchase or redemption request is received in the offices of the Transfer Agent.
 
G.
Shares
Rainier U.S. Funds
 
For a discussion of the Rainier U.S. Funds’ shares, including how the shares may be purchased and redeemed, see the most current Prospectus of the Rainier U.S. Funds, as amended or supplemented.
 
Hennessy Funds
 
Classes of Shares.  The Hennessy Funds offer both Investor Class and Institutional Class shares.  Institutional Class shares are available only to institutional investors or to shareholders who invest directly in the Hennessy Funds, or who invest through certain broker-dealers or financial institutions that have entered into appropriate arrangements with the Hennessy Funds.  There is also a higher minimum initial investment for Institutional Class shares as described below.
 
Account Minimum Investments.  The minimum initial investment in Investor Class Shares of a Hennessy Fund is $2,500 for regular accounts and $250 for Individual Retirement Accounts (though the minimum does not apply to the Reorganization).  The minimum initial investment in Institutional Class shares of a Hennessy Fund is $250,000 (though this minimum does not apply to the Reorganization). For corporate sponsored retirement plans, there is no minimum initial investment for either Investor Class or Institutional Class shares.  There is no subsequent minimum investment requirement. A $100 minimum exists for each additional investment made through an Automatic Investment Plan.  The Hennessy Funds may waive the minimum investment requirements from time to time. Investors purchasing Hennessy Fund shares through financial intermediaries’ asset-based fee programs may have the above minimums waived by their intermediary, since the intermediary, rather than the Hennessy Funds, absorbs the increased costs of small purchases.
 
The Hennessy Funds reserve the right to waive or reduce the minimum initial investment amount for Institutional Class shares for purchases made through certain retirement, benefit and pension plans, or for certain classes of shareholders. For investors purchasing Institutional Class shares through a broker-dealer, financial institution or servicing agent, shareholder purchases may be aggregated to meet the minimum initial investment amount. Hennessy Advisors, in its discretion, may take into account the aggregate assets that a shareholder has in determining if the shareholder meets the minimum initial investment amount.
 
Market Timing Policy.  Frequent purchases and redemptions of a Hennessy Fund’s shares by a shareholder may harm other shareholders of the Hennessy Fund by interfering with efficient management of the Hennessy Fund’s portfolio, increasing brokerage and administrative costs,
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and potentially diluting the value of the Hennessy Fund’s shares.  Accordingly, the Board of Trustees of Hennessy Funds Trust discourages frequent purchases and redemptions of the Hennessy Funds’ shares by reserving the right to reject any purchase order for any reason or no reason, including purchase orders from potential investors that a Hennessy Fund believes might engage in frequent purchases and redemptions of Hennessy Fund shares.
 
The Hennessy Funds track shareholder and omnibus account subscription and redemption activity in an effort to detect any shareholders or institutions that might trade with a frequency harmful to other shareholders of the Hennessy Funds.  In this regard, pursuant to Rule 22c-2 of the Investment Company Act, the Hennessy Funds enter into shareholder information agreements with financial intermediaries that purchase Hennessy Fund shares for omnibus accounts.  These agreements require the financial intermediary to provide the Hennessy Funds with access, upon request, to information about underlying shareholder transaction activity in the omnibus account.  Any non-public personal information provided to the Hennessy Funds is subject to the Hennessy Funds’ privacy policy.
 
In considering a shareholder’s trading activity, the Hennessy Funds may consider, among other factors, the shareholder’s trading history both directly and, if known, through financial intermediaries, in any of the Hennessy Funds.  If frequent trading or market timing is detected, the Hennessy Funds, based on their assessment of the severity of the market timing, may take one or more of the following actions: (1) advise the owner of the frequently traded account that any such future activity will cause a freezing of the account’s ability to transact subscriptions; (2) freeze the account demonstrating the activity from transacting further subscriptions; or (3) close the account demonstrating frequent trading activity.
 
Although the Hennessy Funds have taken steps to discourage frequent purchases and redemptions of Hennessy Fund shares, the Hennessy Funds cannot guarantee that such trading will not occur.
 
Telephone Privileges.  Each Hennessy Fund offers shareholders the ability to redeem or exchange shares or purchase additional shares via telephone.  If you do not wish to have these telephone privileges on your account, please decline this option in the Account Application. Otherwise, the telephone privileges will be available on your account.
 
When you establish telephone privileges, you are authorizing the Hennessy Funds and the Transfer Agent to act upon the telephone instructions of the person or persons you have designated in your Account Application.  If an account has more than one owner or authorized person, a Hennessy Fund will accept telephone instructions from any one owner or authorized person.
 
Before acting on instructions received by telephone, a Hennessy Fund and the Transfer Agent will use reasonable procedures to confirm that the telephone instructions are genuine. These procedures may include recording the telephone call and asking the caller for a form of personal identification.  If a Hennessy Fund and the Transfer Agent follow these reasonable procedures, they will not be liable for any loss, expense, or cost arising out of any telephone transaction request that is reasonably believed to be genuine.  This includes any fraudulent or unauthorized request.  A Hennessy Fund may change, modify or terminate these privileges at any time upon written notice to shareholders. A Hennessy Fund may suspend temporarily the redemption privilege in emergency situations or in cases where, in the judgment of the Hennessy
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Fund, continuation of the privilege would be detrimental to the Hennessy Fund and its shareholders.  Such temporary suspension can be without prior notification to shareholders.
 
You may request telephone redemption privileges after your account is opened by writing to the Transfer Agent at one of the addresses set forth under “How Do I Purchase Shares by Check?” below.  Your written request for telephone privileges must include the Hennessy Fund name and account number and must be signed by the registered owner(s) of the account.  A signature guarantee or other acceptable form of authentication from a financial institution source may also be required.  Please contact the Transfer Agent at 1-800-261-6950 before sending your instruction.
 
Telephone trades must be received prior to the close of regular trading on the NYSE to receive same day pricing. During periods of high market activity, shareholders may encounter higher than usual call wait times. Please allow sufficient time to place your telephone transaction. Once a telephone transaction has been placed, it cannot be cancelled or modified.
 
How to Purchase Shares.  You may purchase shares of the Hennessy Funds on any day the NYSE is open for trading.  Purchase requests received prior to the close of regular trading on the NYSE (normally 4:00 P.M. Eastern time/1:00 P.M. Pacific time) will be priced and processed as of the close of business on that day.  Requests received after that time will be processed the following trading day at the following trading day’s pricing.
 
You may purchase Hennessy Fund shares by check, wire or Automated Clearing House (“ACH”) network.  The Hennessy Funds will not accept payment in cash or money orders.  All purchases must be in U.S. dollars, and all checks must be drawn on U.S. banks.  To prevent check fraud, the Hennessy Funds will not accept third party checks, Treasury checks, credit card checks, traveler’s checks or starter checks for the purchase of shares.  In addition, the Hennessy Funds cannot accept post-dated checks or any conditional order or payment.
 
The Hennessy Funds will not issue certificates evidencing shares purchased.  Instead, the Hennessy Funds will send investors a written confirmation for all share purchases.  The Hennessy Funds reserve the right to reject any purchase in whole or in part.
 
In compliance with the USA Patriot Act of 2001, please note that the Transfer Agent will verify certain information on your Account Application as part of the Hennessy Funds’ Anti-Money Laundering Compliance Program.  The Hennessy Funds might request additional information about you (which may include certain documents, such as articles of incorporation for companies) to help the Transfer Agent verify your identity.  As requested on the application, you should supply your full name, date of birth, social security number and permanent street address.  Permanent addresses containing a P.O. Box will not be accepted, although an alternate mailing address including a P.O. Box may be established.  Please contact the Hennessy Funds at 1-800-966-4354 or 1-415-899-1555 if you need additional assistance when completing your application.  If the Hennessy Funds do not have a reasonable belief of the identity of a customer, the account will be rejected or the customer will not be allowed to perform a transaction on the account until such information is received.  The Hennessy Funds reserve the right to close the account within five business days if clarifying information/documentation is not received.
 
Shares of the Hennessy Funds have not been registered for sale outside of the United States.  The Hennessy Funds do not sell shares to non-United States citizens, subject to the discretion of the Hennessy Funds.  Other than United States military personnel with an APO or FPO address, United States citizens living abroad may purchase Hennessy Fund shares only if
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they have a social security number and a physical address (not a P.O. Box) within the United States, subject to the discretion of the Hennessy Funds.  The Hennessy Funds reserve the right, in its sole discretion and to the extent permitted by applicable law, to sell shares to non-United States citizens and United States citizens living abroad with a social security number but no physical address within the United States.
 
How Do I Purchase Shares by Check?  If you are making an initial investment, simply complete the appropriate Account Application and mail it with a check, made payable to “Hennessy Funds,” to:
 
 
For regular mail delivery:
Hennessy Funds
c/o U.S. Bancorp Fund Services
P.O. Box 701
Milwaukee, WI 53201-0701
 
For overnight delivery:
Hennessy Funds
c/o U.S. Bancorp Fund Services
615 East Michigan St., 3rd Floor
Milwaukee, WI 53202-5207
 
The Hennessy Funds do not consider the U.S. Postal Service or other independent delivery services to be their agent.  Therefore, deposit in the mail or with such services or receipt at the U.S. Bancorp Fund Services, LLC post office box of purchase orders or redemption requests does not constitute receipt by the Transfer Agent.
 
Subsequent investments must be accompanied by a letter indicating the name(s) in which the account is registered and the account number or by the remittance portion of the account statement and returned to one of the above addresses.
 
The Transfer Agent will charge a $25.00 fee against a shareholder’s account in addition to any loss sustained by a Hennessy Fund for any payment, check or electronic funds transfer returned to the Transfer Agent.
 
How Do I Purchase Shares by Wire?  Prior to wiring funds, a completed Account Application must be sent to the Transfer Agent by U.S. mail or overnight courier to one of the addresses listed above.  If you are making an initial investment in the Hennessy Funds, please contact the Transfer Agent at 1-800-261-6950 between 9:00 A.M. and 8:00 P.M. Eastern time/6:00 A.M. and 5:00 P.M. Pacific time, on a day when the NYSE is open for trading to make arrangements with a service representative to submit your completed application via mail, overnight delivery or fax.  Upon receipt of your application, your account will be established and a service representative will contact you within 24 hours to provide an account number and wiring instructions to U.S. Bank, N.A.  If you are making a subsequent purchase, prior to wiring funds, please notify the Transfer Agent.  U.S. Bank, N.A. must receive wired funds prior to the close of regular trading on the NYSE (normally 4:00 P.M. Eastern time/1:00 P.M. Pacific time) to receive same day pricing.  Wired funds received after that time will be processed the following trading day with the following trading day’s pricing.  The Hennessy Funds are not responsible for the consequences of delays resulting from the banking or Federal Reserve wire system.
 
All wires should specify the name of the Hennessy Fund and class of shares, the name(s) in which the account is registered, the account number and the amount being wired.  It is essential that your bank include complete information about your account in all wire instructions.  Your bank may charge you a fee for sending a wire to a Hennessy Fund.
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To ensure prompt and accurate credit upon receipt of your wire, your bank should transmit immediately available funds by wire in your name to:
 
 
Hennessy Funds
c/o U.S. Bank, N.A.
777 E. Wisconsin Ave.
Milwaukee, WI 53202
ABA# 075000022
 
Credit:  U.S. Bancorp Fund Services LLC
Account Number:  112-952-137
Further Credit:  Mutual fund name, shareholder
name and account number
 
Can I Purchase Shares through Broker-Dealers?  You may buy, sell and exchange Hennessy Fund shares through certain brokers (and their agents) that have made arrangements with the Hennessy Funds to sell its shares.  When you place your order with such a broker or its authorized agent, your order is treated as if you had placed it directly with the Transfer Agent, and you will pay or receive the next net asset value calculated by the Hennessy Fund.  The broker (or its agent) holds your Hennessy Fund shares in the broker’s (or its agent’s) name, and the broker (or its agent) maintains your individual ownership records.  Hennessy Advisors may pay the broker (or its agent) for maintaining these records as well as providing other shareholder services.  The broker (or its agent) may charge you a fee for handling your order.  The broker (or its agent) is responsible for processing your order correctly and promptly, keeping you advised regarding the status of your individual account, confirming your transactions and ensuring that you receive copies of the applicable Hennessy Fund’s Prospectus.
 
If you decide to purchase Hennessy Fund shares through a broker, please carefully review the program materials provided to you by the broker (or its agent), because particular brokers may adopt policies or procedures that are separate from those described herein.  The broker (or its agent) is responsible for ensuring that you receive copies of the applicable Hennessy Fund’s Prospectus, Annual Report, Semi-Annual Report, and other Hennessy Fund disclosure documents.
 
To inquire about an agreement, broker-dealers should call the Hennessy Funds at 1-800-966-4354 or 1-415-899-1555.
 
How Do I Purchase Shares by Telephone?  You may not make an initial investment in the Hennessy Funds by telephone, but you may purchase additional shares of the Hennessy Funds by calling 1-800-261-6950.  Unless you have elected to decline telephone privileges on your Account Application, telephone orders will be accepted via electronic funds transfer from your bank account on record through the ACH network.  You must have banking information established on your account prior to making a purchase.  Each telephone purchase must be in the amount of $100 or more.  If an account has more than one owner or authorized person, the Hennessy Funds will accept telephone instructions from any one owner or authorized person.
 
Automatic Investment Plan.  For your convenience, each Hennessy Fund offers an Automatic Investment Plan.  This plan allows money to be moved from the shareholder’s bank account on record to the shareholder’s Hennessy Fund account on a systematic schedule (e.g., monthly, quarterly, semi-annually and annually) that the shareholder selects.  After your initial investment in a Hennessy Fund, you may authorize the Hennessy Fund to withdraw amounts of $100 or more.
 
If you wish to enroll in this plan, complete the appropriate section on the initial Account Application, or complete the Automatic Investment Plan Application.  You may call the
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Hennessy Funds at 1-800-966-4354 or 1-415-899-1555 and request an application, or the application can be found at hennessyfunds.com.  Signed applications should be received by the Transfer Agent at least 15 calendar days prior to your initial transaction.  The Transfer Agent will charge you a $25 fee if the automatic investment cannot be made due to insufficient funds, stop payment or for any other reason.  A Hennessy Fund may terminate or modify this privilege at any time.  Any request to change or terminate an Automatic Investment Plan should be submitted to the Transfer Agent by telephone at 1-800-261-6950 or in written form five calendar days prior to the effective date.
 
Retirement Plans.  You may invest in the Hennessy Funds under the following retirement plans:
 
Coverdell Education Savings Account
Traditional IRA
Roth IRA
SEP-IRA for sole proprietors, partnerships and corporations
SIMPLE-IRA
The Hennessy Funds recommend that investors consult with a financial and/or tax advisor regarding IRAs before investing in a Hennessy Fund.  The annual IRA maintenance fee is $15 (capped at $30 per social security number). The fee for a transfer, distribution (exclusive of systematic distribution plans) or recharacterization of an IRA is $25 per transaction. Complete details on fees are outlined in our Individual Retirement Account & Coverdell Educational Savings Account Disclosure Statement.
 
How To Sell Shares.  You may sell (redeem) your Hennessy Fund shares on any day the NYSE is open for trading either directly through the Hennessy Funds or through your investment representative, as applicable.  Redemption requests received prior to the close of regular trading on the NYSE (normally 4:00 P.M. Eastern time/1:00 P.M. Pacific time) will be priced and processed as of the close of business on that day.  Requests received after that time will be processed the following trading day at the following trading day’s pricing.
 
How Do I Sell Shares by Mail?  You may redeem your Hennessy Fund shares by sending a written request to the Transfer Agent.  After your request is received in “good order,” a Hennessy Fund will redeem your shares at the next net asset value calculated by the Hennessy Fund.  To be in “good order,” redemption requests must include the following: (i) the name of the Hennessy Fund account; (ii) the account number; (iii) the number of Investor Class or Institutional Class shares of the Hennessy Fund or the dollar value of Investor Class or Institutional Class shares of the Hennessy Fund to be redeemed; (iv) any signature guarantees that are required; and (v) any additional documents that might be required for redemptions by corporations, executors, administrators, trustees, guardians or other similar shareholders.  In addition, please specify whether proceeds are to be sent by mail, wire or electronic funds transfer through the ACH network to your bank account on record.  If you are redeeming from an IRA or other retirement or qualified plan, please indicate on your written request whether or not to withhold federal income tax (generally 10%).  Unless a redemption request specifies not to have federal income tax withheld, the transaction will be subject to withholding.  To add wire
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instructions to an account at the time of the redemption, a signature guarantee is required.  The letter should be signed by all shareholders whose names appear on the account registration. Corporate and institutional investors and fiduciaries should contact the Transfer Agent to ascertain what additional documentation is required.  Please see “When Are Signature Guarantees Required?” below.
 
How Do I Sell Shares by Telephone?  Unless you have declined telephone privileges on your account, you may redeem all or some of your Hennessy Fund shares, up to a maximum of $100,000, by calling the Transfer Agent at 1-800-261-6950 between 9:00 A.M. and 8:00 P.M. Eastern time/6:00 A.M. and 5:00 P.M. Pacific time, on a day when the NYSE is open for trading.  If you are redeeming from an IRA or other retirement or qualified plan, you will be asked whether you want federal income taxes (generally 10%) withheld from the distribution. Redemption proceeds will be sent by check to the address of record unless you elect to have proceeds transferred to your bank account on record.  You may have difficulties making a telephone redemption during periods of abnormal market activity because of higher than usual call wait times.  If this occurs, you may make your redemption request in writing.  If an account has more than one owner or authorized person, a Hennessy Fund will accept telephone instructions from any one owner or authorized person.
 
When Are Signature Guarantees Required?  To protect the Hennessy Funds and their shareholders, a signature guarantee from either a Medallion program member or a non-Medallion program member is required in the following situations:
 
The redemption request includes a change of address, or a change of address request was received by the Transfer Agent within the last 30 calendar days;
The redemption proceeds are to be payable or sent to any person, address or bank account not on record;
Account ownership is being changed; and
The redemption request is over $100,000 (Investor Class shares only).
In addition to the situations described above, a Hennessy Fund or the Transfer Agent may require a signature guarantee in other instances based on the circumstances relative to the particular situation.
 
Non-financial transactions, including establishing or modifying certain services on an account, may require a signature guarantee, signature verification from a Signature Validation Program member or other acceptable form of authentication from a financial institution source.
 
Signature guarantees will generally be accepted from domestic banks, brokers, dealers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations, as well as from participants in the NYSE Medallion Signature Program and the Securities Transfer Agents Medallion Program (STAMP).  A notarized signature is not an acceptable substitute for a signature guarantee.
 
The Hennessy Funds reserve the right, at their sole discretion, to waive the signature guarantee requirement for a specific redemption request.
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When Will I Receive My Redemption Proceeds?  Payment of your redemption proceeds will be made promptly, but not later than seven calendar days after the receipt of your request in proper form.  If you did not purchase your Hennessy Fund shares by wire, the Hennessy Funds may delay payment of your redemption proceeds for up to 15 calendar days from date of purchase or until your check has cleared, whichever occurs first.  In addition, the Hennessy Funds can suspend redemptions and/or postpone payments of redemption proceeds beyond seven calendar days at times when the NYSE is closed or during emergency circumstances, as determined by the SEC.
 
You may have a check sent to you at your address of record, proceeds may be wired to your bank account on record, or funds may be sent via electronic funds transfer through the ACH network to your bank account on record. The minimum amount that may be wired is $1,000. You will be charged a wire transfer fee of $15. This fee will be deducted from your redemption proceeds for a complete redemption, or deducted from your remaining account balance for a partial redemption, and paid to the Transfer Agent to cover costs associated with the transfer. In addition, your bank may charge a fee for receiving wires. There is no charge to receive redemption proceeds via the ACH network, but credit may not be available for two to three business days.
 
The Hennessy Funds have the right to pay redemption proceeds to you in whole or in part by a distribution of securities from the applicable Hennessy Fund’s portfolio.  It is not expected that the Hennessy Funds would do so except in unusual circumstances.  If a Hennessy Fund pays your redemption proceeds by a distribution of securities, you could incur brokerage or other charges in converting the securities to cash.
 
Can My Account Be Involuntarily Redeemed or Converted?  The Hennessy Funds may involuntarily redeem your shares upon certain conditions as determined by the Board of Trustees of Hennessy Funds Trust, including for example, but not limited to, (i) if you fail to provide the Hennessy Funds with identification required by law, (ii) if a Hennessy Fund is unable to verify information received from you, or (iii) to reimburse a Hennessy Fund for any loss sustained by reason of any failure by you to make full payment for shares purchased. Additionally, as discussed in more detail below, shares may be redeemed or converted in connection with the closing of small accounts.  If your shares are involuntarily redeemed, there may be a taxable gain or loss as a result, see “Taxes, Dividends and Distributions – Hennessy Funds – Tax Information” below.
 
A Hennessy Fund may redeem the shares in your Investor Class account if the value of your account is less than $2,500 for three months or longer as a result of redemptions you have made.  This does not apply to retirement plan or Uniform Gifts or Transfers to Minors Act accounts.  You will be notified that the value of your Investor Class account is less than $2,500 before a Hennessy Fund makes an involuntary redemption.  You will then have 60 calendar days in which to make an additional investment to bring the value of your account to at least $2,500 before the Hennessy Fund takes any action.  Any time shares are redeemed in a taxable account, it is considered a taxable event.  You are responsible for any tax liabilities associated with an involuntary redemption of your account.
 
If your Institutional Class shares account balance falls below $250,000 for any reason, you will be given 60 calendar days to make additional investments so that your account balance is $250,000 or more.  If you do not, a Hennessy Fund may convert your Institutional Class shares into Investor Class shares, at which time your account will be subject to the involuntary
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redemption policies and procedures for Investor Class shares.  Any such conversion will occur at the relative net asset value of the two share classes, without the imposition of any fees or other charges.  Where a retirement plan or other financial intermediary holds Institutional Class shares on behalf of its participants or clients, the above policy applies to any such participants or clients when they roll over their accounts with the retirement plan or financial intermediary into an individual retirement account and they are not otherwise eligible to purchase Institutional Class shares.  Notwithstanding the foregoing, this right of involuntary redemption will only apply to former Institutional Class shareholders of the Rainier Mid Cap Equity Fund, the Rainier Small/Mid Cap Equity Fund and the Rainier Large Cap Equity Fund who become Institutional Class shareholders of the corresponding Hennessy Fund in the event that their Institutional Class shares account balance falls below $100,000 for any reason.
 
What Happens If My Account is Inactive for an Extended Period of Time?  Your account may be transferred to your state of residence if no activity occurs within your account during the “inactivity period” specified in your state’s abandoned property laws.  The factors used to determine whether an account is inactive vary from state to state, but may include a shareholder’s failure to cash a check (no interest is accrued or paid on amounts represented by uncashed distribution or redemption checks), update the shareholder’s mailing address, or respond to Hennessy Fund inquiries within the specified time period.  For this purpose, your last known address of record with the Hennessy Funds will determine which state has jurisdiction over your account.  If the assets within your account are deemed to be abandoned in accordance with the relevant state’s laws, a Hennessy Fund may be legally obligated to transfer those assets to that state’s unclaimed property administrator.  You are responsible for ensuring that your account is not “abandoned” for purposes of these state escheatment laws, and neither a Hennessy Fund nor its agents will be liable to you or your representatives for good faith compliance with those laws.
 
How to Exchange Shares.  You may exchange shares of the Hennessy Funds for shares of any of the other series of Hennessy Funds Trust any day the NYSE is open for trading either directly through the Hennessy Funds or through your investment representative, as applicable.  Exchange requests received prior to the close of regular trading on the NYSE (normally 4:00 P.M. Eastern time/1:00 P.M. Pacific time) will be priced and processed as of the close of business on that day.  Requests received after that time will be processed the following trading day at the following trading day’s pricing.  Prior to making an exchange into any other series of Hennessy Funds Trust, you should obtain and carefully read that fund’s Prospectus, which may be obtained by calling 1-800-966-4354 or 1-415-899-1555 or visiting hennessyfunds.com.  Please keep in mind the minimum investment of $2,500 ($250 for IRAs) for Investor Class shares and $250,000 for Institutional Class shares when determining the number of shares you want to exchange.
 
You may also exchange shares of a Hennessy Fund for shares of the First American Retail Prime Obligations Fund, a money market mutual fund not affiliated with any series of Hennessy Funds Trust, Hennessy Advisors or any sub-advisor to a series of Hennessy Funds Trust.  The exchange privilege does not constitute an offering or recommendation on the part of the Hennessy Funds, Hennessy Advisors or any sub-advisor to any series of Hennessy Funds Trust of an investment in the First American Retail Prime Obligations Fund.  Prior to making an exchange into the First American Retail Prime Obligations Fund, you should obtain and carefully read that fund’s prospectus, which may be obtained by calling 1-800-966-4354 or 1-415-899-1555.
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The Hennessy Funds reserve the right on notice to shareholders to limit the number of exchanges that can be made in any year to avoid excess Hennessy Fund expenses.  The Hennessy Funds reserve the right to reject any exchange order.  The Hennessy Funds may modify or terminate the exchange privilege upon written notice to shareholders.  The Hennessy Funds may suspend temporarily the exchange privilege in emergency situations or in cases where, in their judgment, continuation of the privilege would be detrimental to it and its shareholders.  Such temporary suspension can be without prior notification to shareholders. You may have a taxable gain or loss as a result of an exchange because the Code treats an exchange as a sale of shares.
 
Exchanging Shares by Mail.  You may exchange your Hennessy Fund shares simply by sending a written request to the Transfer Agent.  You should give the name of your Hennessy Fund account, account number, the number of Hennessy Fund shares or the dollar value of Hennessy Fund shares to be exchanged, and the name of the other fund into which the exchange is being made.  If you have an existing account with the other fund, you should also give the name and account number for that fund.  The letter should be signed by all shareholders whose names appear on the account registration.
 
Exchanging Shares by Telephone.  Unless you have declined telephone privileges on your Account Application, you may also exchange Hennessy Fund shares by calling the Transfer Agent at 1-800-261-6950 before the close of regular trading on the NYSE (normally 4:00 P.M. Eastern time/1:00 P.M. Pacific time).  If you are exchanging Hennessy Fund shares by telephone, you will be subject to certain identification procedures, which are listed under “How Do I Sell Shares by Telephone?” above.  If an account has more than one owner or authorized person, a Hennessy Fund will accept telephone instructions from any one owner or authorized person.
 
Systematic Cash Withdrawal Program.  As another convenience, you may redeem your Investor Class shares of a Hennessy Fund through the Systematic Cash Withdrawal Program. The Systematic Cash Withdrawal Program is not available for redemption of Institutional Class shares.  If you elect this method of redemption, a Hennessy Fund will send you a check or you may have the proceeds sent directly to your bank account on record via electronic funds transfer through the ACH network.  The minimum payment amount is $100.  You may choose to receive monthly, quarterly or annual payments.  Your Hennessy Fund account must have a value of at least $10,000 in order to participate in this program.  The Systematic Cash Withdrawal Program may be terminated at any time by a Hennessy Fund.  You may also elect to terminate your participation in this program at any time by writing to the Transfer Agent at least five calendar days prior to the next payment.
 
A withdrawal involves a redemption of Hennessy Fund shares and may result in a gain or loss for federal income tax purposes.  In addition, if the amount withdrawn exceeds the dividends credited to your account, the account ultimately may be depleted.
 
HouseholdingTo help keep the Hennessy Funds’ costs as low as possible, Hennessy Funds Trust generally delivers a single copy of most financial reports and Prospectuses to shareholders who share an address, even if the accounts are registered under different names. This process, known as “householding,” does not apply to account statements.  You may, of course, request an individual copy of a Prospectus or financial report at any time.  If you would like to receive separate mailings, please call the Transfer Agent at 1-800-261-6950 and we will begin individual delivery within 30 calendar days of your request. If your account is held through a financial institution or other intermediary, please contact them directly to request individual delivery.
51

Electronic Delivery.  The Hennessy Funds offer shareholders the option to receive account statements, Prospectuses, tax forms and reports online.  To sign up for eDelivery, please visit hennessyfunds.com.  You may change your delivery preference at any time by visiting the Hennessy Funds’ website or contacting the Hennessy Funds at 1-800-261-6950.
 
H.
Taxes, Dividends and Distributions
Rainier U.S. Funds
 
For a discussion of the Rainier U.S. Funds’ policy with respect to dividends and distributions and the tax consequences of an investment in the Rainier U.S. Funds’ shares, see the most current Prospectus of the Rainier U.S. Funds, as amended or supplemented.
 
Hennessy Funds
 
Dividends and Distributions.  The Hennessy Funds will make distributions of dividends and capital gains, if any, annually, usually in December of each year.  The Hennessy Funds may make additional distributions if necessary to comply with the distribution requirements of the Code.
 
You have four distribution options:
 
Automatic Reinvestment Option –
Both dividend and capital gains distributions will be reinvested in additional Hennessy Fund shares.
Split Cash Reinvest Options –
Your dividends will be paid in cash and your capital gains distributions will be reinvested in additional Hennessy Fund shares; or
Your dividends will be reinvested in additional Hennessy Fund shares and your capital gains distributions will be paid in cash.
All Cash Option –
Both dividends and capital gains distributions will be paid in cash.
If you elect to receive distributions and/or capital gains paid in cash, and the U.S. Postal Service cannot deliver the check, or if a check remains outstanding for at least six months, the Hennessy Funds reserve the right to reinvest the distribution check in your account, at the current net asset value of the Hennessy Fund, and to reinvest all subsequent distributions.
 
You may make this election on the Account Application.  If you do not make an election, your distributions will be reinvested in additional Hennessy Fund shares.  You may change your election by writing to the Transfer Agent or by calling 1-800-261-6950.  Any changes should be submitted at least five calendar days prior to the record date of the distribution.
 
Tax Information.  The Hennessy Funds’ distributions, whether received in cash or additional Hennessy Fund shares, may be subject to federal and state income tax.  These
52

distributions may be taxed as ordinary income, dividend income or capital gains (which may be taxed at different rates depending on the length of time the Hennessy Fund holds the assets generating the capital gains).
 
If you exchange or sell your Hennessy Fund shares, it is considered a taxable event for you.  Depending on the purchase price and the sale price of the shares you exchange or sell, you may have a gain or a loss on the transaction.  You are responsible for any tax liabilities generated by your transaction.
 
As of January 1, 2012, federal law requires that mutual fund companies report their shareholders’ cost basis, gain/loss, and holding period to the IRS on the shareholders’ Consolidated Form 1099s when “covered” shares of the mutual funds are sold.  Covered shares are any fund and/or dividend reinvestment plan shares acquired on or after January 1, 2012.
 
Certain individuals, trusts and estates may be subject to a net investment income (“NII”) tax of 3.8%.  The NII tax is imposed on the lesser of: (i) a taxpayer’s investment income, net of deductions properly allocable to such income, or (ii) the amount by which such taxpayer’s modified adjusted gross income exceeds certain thresholds ($250,000 for married individuals filing jointly, $200,000 for unmarried individuals and $125,000 for married individuals filing separately).  Each Hennessy Fund’s distributions are includable in a shareholder’s investment income for purposes of this NII tax.  In addition, any capital gain realized by a shareholder upon a redemption of Hennessy Fund shares is includable in such shareholder’s investment income for purposes of this NII tax.
 
The Hennessy Funds have chosen average cost as their standing (default) tax lot identification method for all shareholders, which means this is the method the Hennessy Funds will use to determine which specific shares are deemed to be sold when there are multiple purchases on different dates at differing net asset values, and the entire position is not sold at one time.  You may choose a method other than the Hennessy Funds’ standing method at the time of your purchase or upon the sale of covered shares.  The cost basis method a shareholder elects may not be changed with respect to a redemption of shares after the settlement date of the redemption.  Hennessy Fund shareholders should consult with their tax advisors to determine the best IRS-accepted cost basis method for their tax situation and to obtain more information about how the new cost basis reporting rules apply to them.
 
This summary is not intended to be and should not be construed to be legal or tax advice to any current holder of Hennessy Fund shares.  Shareholders should consult their own tax advisors to determine the tax consequences of owning Hennessy Fund shares.
 
I.
Financial Highlights
Rainier U.S. Funds
 
For financial information about the Rainier U.S. Funds, see the Annual Report dated March 31, 2017.
 
Hennessy Funds
 
The financial highlights for Investor Class and Institutional Class shares of the Hennessy Funds for the past five fiscal years ended October 31, 2016, are attached hereto as Exhibit B. The accounting survivor of the Reorganization will be the Hennessy Funds.
53

J.
Distribution Arrangements
Rainier U.S. Funds
 
For a discussion of the Rainier U.S. Funds’ distribution arrangements, see the most current Prospectus of the Rainier U.S. Funds, as amended or supplemented.
 
Hennessy Funds
 
Quasar Distributors, LLC, 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202 serves as the distributor for the Hennessy Funds.  As such, Quasar is responsible for all purchases, sales, redemptions and other transfers of shares.  As distributor, Quasar also provides certain administrative services.  Quasar is a registered broker-dealer and member of FINRA.
 
K.
Distribution Plans
 
Rainier U.S. Funds
 
For a discussion of the Rainier U.S. Funds’ distribution plans, see the most current Prospectus of the Rainier U.S. Funds, as amended or supplemented.
 
Hennessy Funds
 
The Board of Trustees of Hennessy Funds Trust has adopted a separate Distribution (Rule 12b1) Plan (each, a “12b1 Plan”) on behalf of Investor Class shares of each Hennessy Fund pursuant to Rule 12b1 under the Investment Company Act.  Each 12b1 Plan was adopted in anticipation that the Hennessy Funds will benefit from the 12b1 Plans through increased sales of shares, thereby spreading each Hennessy Fund’s fixed expenses over a greater base and providing the Hennessy Advisors with an asset size that allows greater flexibility in management.  The 12b1 Plans authorize payments by the Hennessy Funds in connection with the distribution of their shares at an annual rate, as determined from time to time by the Board of Trustees of Hennessy Funds Trust, of up to 0.25% of the average daily net assets of the Hennessy Funds.  Despite the currently set rate of 0.15% for the Hennessy Funds, the Board of Trustees of Hennessy Funds Trust is authorized to set the annual rate of the Hennessy Funds at 0.25% pursuant to previous shareholder approval.  Amounts paid under a 12b1 Plan by a Hennessy Fund may be spent by the Hennessy Fund on any activities or expenses primarily intended to result in the sale of shares of the Hennessy Fund, including but not limited to, advertising, compensation for sales and marketing activities of financial institutions and others such as dealers and distributors, shareholder account servicing, the printing and mailing of prospectuses to other than current shareholders, and the printing and mailing of sales literature.  Amounts may also be spent on the cost of implementing and operating the 12b1 Plan and the payment of capital or other expenses of associated equipment, rent, salaries, bonuses, interest, and other overhead costs.  A Hennessy Fund may reimburse the Distributor for expenses it pays on behalf of such Hennessy Fund that are eligible to be paid under the applicable 12b1 Plan.  To the extent any activity is one that a Hennessy Fund may finance without a plan pursuant to Rule 12b1, the Hennessy Fund may also make payments to finance such activity outside of a 12b1 Plan and not subject to its limitations.
 
The 12b1 Plan for a particular Hennessy Fund may be terminated by such Hennessy Fund at any time by a vote of the trustees who are not interested persons of Hennessy Funds Trust and who have no direct or indirect financial interest in such 12b1 Plan or any agreement
54

related thereto (the “Rule 12b1 Trustees”) or by a vote of a majority of the outstanding shares of such Hennessy Fund.  Any change in the 12b1 Plan for a particular Hennessy Fund that would materially increase the distribution expenses of such Hennessy Fund provided for in such 12b1 Plan requires approval of the Board of Trustees of Hennessy Funds Trust, including the Rule 12b1 Trustees, and a majority of the applicable Hennessy Fund’s shareholders.
 
While the 12b1 Plans are in effect, the selection and nomination of trustees who are not interested persons of Hennessy Funds Trust will be committed to the discretion of the trustees of Hennessy Funds Trust who are not interested persons of the trust.  The Board of Trustees of Hennessy Funds Trust must review the amount and purposes of expenditures pursuant to the 12b1 Plans quarterly as reported to it by the Distributor, if any, or officers of Hennessy Funds Trust.  The 12b1 Plans will continue in effect for as long their continuance is specifically approved at least annually by the Board of Trustees of Hennessy Funds Trust, including the Rule 12b1 Trustees.
 
For the fiscal year ended October 31, 2016, the following amounts were paid by each Hennessy Fund under a 12b1 Plan with respect to Investor Class shares:
 
Fund
 
Amount Paid
     
Hennessy Cornerstone Mid Cap 30 Fund
 
$963,758
     
Hennessy Cornerstone Large Growth Fund
 
$132,283
 
For the fiscal year ended October 31, 2016, the Hennessy Funds incurred the following expenses with respect to Investor Class shares. “Other” distribution expenses identified below include administrative, legal, financial management, and sales support expenses of the Hennessy Funds.
 
 
Sales Material and Advertising
 
Printing and
Mailing
Prospectus
 
Compensation
to Sales
Personnel and
Broker Dealers
 
Other
 
Approximate
Total Amount
Spent With
Respect to Each
Fund
 
Hennessy
Cornerstone Mid
Cap 30 Fund
$  87,530
0
0
$  876,228
$  963,758
           
Hennessy
Cornerstone
Large Growth
Fund
$  40,203
0
0
$    92,080
$  132,283
 
Each of the Hennessy Funds have entered into a Servicing Agreement with Hennessy Advisors (“Servicing Agreement”) with respect to its Investor Class shares.  Pursuant to the Servicing Agreement, Hennessy Advisors provides administrative support services to the Hennessy Funds consisting of:
55

 
                   
maintaining an “800” number that current shareholders may call to ask questions about the Funds or their accounts;
assisting shareholders in processing exchange and redemption requests;
assisting shareholders in changing dividend options, account designations and addresses;
responding generally to shareholder questions; and
providing such other similar services as may be requested.
For such services, each Hennessy Fund pays an annual service fee to Hennessy Advisors equal to 0.10% of the average daily net assets of its Investor Class shares.  Institutional Class shares of the Hennessy Funds are not subject to this servicing fee.
 
During the fiscal years ended October 31, 2016, 2015, and 2014, each of the Hennessy Funds paid the following fees to Hennessy Advisors pursuant to the Servicing Agreement.
 
   
Fiscal Year Ended
October 31, 2016
   
Fiscal Year Ended
October 31, 2015
   
Fiscal Year Ended
October 31, 2014
 
                         
Hennessy Cornerstone
Mid Cap 30 Fund
 
$
642,505
   
$
445,295
   
$
194,891
 
                         
Hennessy Cornerstone
Large Growth Fund
 
$
88,189
   
$
104,668
   
$
98,700
 
 
The Servicing Agreement may be terminated with respect to each of the Hennessy Funds by either party thereto upon 60 days’ written notice to the other party, and will be terminated if its continuance is not approved with respect to such Hennessy Fund at least annually by a majority of those trustees who are not parties thereto or “interested persons” (as defined in the Investment Company Act) of any such party.
 
VII.
VOTING INFORMATION
All shares of the Rainier U.S. Funds are entitled to vote on the proposals.  Thirty-three and one-third percent of a Rainier U.S. Fund’s outstanding shares present in person or represented by proxy and entitled to vote at a shareholders’ meeting constitutes a quorum at such meeting.  The Plan will be approved as follows by shareholders of the Rainier Trust:
 
 
Rainier Mid Cap Equity Fund:  Original Class and Institutional Class shareholders of the Rainier Mid Cap Equity Fund will vote together to approve the Plan.  Assuming a quorum is present, the Plan will be approved by the affirmative “vote of a majority of the outstanding voting securities” (as such phrase is defined in the Investment Company Act) of Original Class and Institutional Class shareholders of the Rainier Mid Cap Equity Fund voting together.  The “vote of a majority of the outstanding voting securities” means with regard to Original Class and Institutional Class shares of the Rainier Mid Cap Equity Fund voting together: the affirmative vote of the lesser of (i) 67% or more of the aggregate outstanding Original Class and Institutional Class shares present at the meeting if more than
56

 
 
 
50% of the aggregate outstanding Original Class and Institutional Class shares are present in person or by proxy or (ii) more than 50% of the aggregate outstanding Original Class and Institutional Class shares.
 
Rainier Small/Mid Cap Equity Fund: Original Class and Institutional Class shareholders of the Rainier Small/Mid Cap Equity Fund will vote together to approve the Plan.  Assuming a quorum is present, the Plan will be approved by the affirmative “vote of a majority of the outstanding voting securities” (as such phrase is defined in the Investment Company Act) of Original Class and Institutional Class shareholders of the Rainier Small/Mid Cap Equity Fund voting together.  The “vote of a majority of the outstanding voting securities” means with regard to Original Class and Institutional Class shares of the Rainier Small/Mid Cap Equity Fund voting together: the affirmative vote of the lesser of (i) 67% or more of the aggregate outstanding Original Class and Institutional Class shares present at the meeting if more than 50% of the aggregate outstanding Original Class and Institutional Class shares are present in person or by proxy or (ii) more than 50% of the aggregate outstanding Original Class and Institutional Class shares.
 
Rainier Large Cap Equity Fund: Original Class and Institutional Class shareholders of the Rainier Large Cap Equity Fund will vote together to approve the Plan.  Assuming a quorum is present, the Plan will be approved by the affirmative “vote of a majority of the outstanding voting securities” (as such phrase is defined in the Investment Company Act) of Original Class and Institutional Class shareholders of the Rainier Large Cap Equity Fund voting together.  The “vote of a majority of the outstanding voting securities” means with regard to Original Class and Institutional Class shares of the Rainier Large Cap Equity Fund voting together: the affirmative vote of the lesser of (i) 67% or more of the aggregate outstanding Original Class and Institutional Class shares present at the meeting if more than 50% of the aggregate outstanding Original Class and Institutional Class shares are present in person or by proxy or (ii) more than 50% of the aggregate outstanding Original Class and Institutional Class shares.
The approval of the Plan by the Rainier Mid Cap Equity Fund’s shareholders, the Rainier Small/Mid Cap Equity Fund’s shareholders and the Rainier Large Cap Equity Fund’s shareholders is required for the consummation of the Reorganization.  If the Plan is not approved by the Rainier Mid Cap Equity Fund’s shareholders, the Rainier Small/Mid Cap Equity Fund’s shareholders or the Rainier Large Cap Equity Fund’s shareholders, then the Rainier Trust may seek to adjourn the special meeting of shareholders to obtain sufficient votes to approve the Plan.  If sufficient votes are not obtained to approve the Plan by all of the Rainier U.S. Funds, the Reorganization will not be consummated.
 
All shares represented by each properly signed proxy received before the meeting will be voted at the special meeting.  Proxies may be voted by mail, by telephone at the toll-free telephone number listed on your proxy card or via the Internet at the website shown on your proxy card.  If a shareholder specifies how the proxy is to be voted on any business properly to come before the special meeting, it will be voted in accordance with instruction given.  If no choice is indicated on the proxy, it will be voted “FOR” approval of the Reorganization.  If any other matters come before the special meeting, proxies will be voted by the persons named as proxies in accordance with their best judgment.
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All proxies voted, including abstentions and broker non-votes (where the underlying holder has not voted and the broker does not have discretionary authority to vote the shares), will be counted toward establishing a quorum.  Approval of the Plan to implement the Reorganization will occur only if a sufficient number of votes are cast “FOR” that proposal.  Abstentions and broker non-votes do not constitute a vote “FOR” and will have no effect on the outcome of the voting.
 
Shareholders are also being asked to vote on a proposal to adjourn the special meeting to solicit additional proxies if a quorum does not exist or if a quorum exists but there are insufficient votes at the time of the adjournment to approve the Plan.  Any business that might have been transacted at the special meeting may be transacted at any such adjourned session(s) at which a quorum is present.  Approval of the proposal to adjourn the special meeting to solicit additional proxies if there are insufficient votes at the time of the adjournment to approve the Plan, requires a majority of the votes represented at the special meeting, whether or not a quorum is present.  The special shareholder meeting may be held as adjourned without further notice if such time and place are announced at the special meeting at which the adjournment is taken and the adjourned meeting is held within a reasonable time after the date set for the original meeting unless a new record date of the adjourned meeting is fixed by the Board.  Notice of any such adjourned meeting will be given to each shareholder of record entitled to vote at the adjourned meeting in accordance with the Funds’ bylaws.
 
With respect to the proposal to adjourn, there will be no broker non-votes and abstentions will have no effect on the outcome of the proposal.  Unless marked to the contrary, proxies received will be voted “FOR” the proposal to adjourn.
 
A.
Method and Cost of Solicitation
This Proxy Statement/Prospectus is being sent to you in connection with the solicitation of proxies by the Board for use at the special meeting.  It is expected that the solicitation of proxies will be primarily by mail, telephone and via the Internet.  Rainier and Hennessy Advisors will bear equally the costs associated with (i) soliciting and obtaining the proxy vote of the shareholders of the Rainier U.S. Funds, including the proxy advisory firm fees, and (ii) data conversion and transition services of U.S. Bancorp Fund Services, LLC.  Hennessy Advisors will pay all costs associated with the preparation and filing and obtaining effectiveness of the Registration Statement and Proxy Statement/Prospectus other than legal and accounting fees incurred by Rainier in connection with its review of the Registration Statement on Form N-14 and the Proxy Statement/Prospectus.  The total expenses of the Reorganization are estimated to be approximately $350,000.
 
Rainier and Hennessy Advisors have retained, at their expense, Broadridge Financial Solutions, Inc. to assist in the solicitation of proxies.  The cost of solicitation for the Reorganization is currently estimated to be approximately $280,000 in the aggregate.
 
B.
Right of Revocation
Any shareholder giving a proxy may revoke it before it is exercised at the special meeting, either by providing written notice to the Rainier U.S. Funds, by submission of a later-dated, duly executed proxy or by voting in person at the special meeting.  If not so revoked, the votes will be cast at the special meeting, and any postponements or adjournments thereof.  Attendance by a shareholder at the special meeting does not, by itself, revoke a proxy.
58

 
C.
Voting Securities and Principal Holders
Shareholders of the Rainier U.S. Funds at the close of business on June 28, 2017 (the “Record Date”), will be entitled to be present and vote at the special meeting.  Each outstanding share is entitled to one vote.  As of the Record Date, with regard to Original Class shares there were:
 
740,624 Original Class shares of the Rainier Mid Cap Equity Fund outstanding and entitled to vote (including omnibus accounts representing multiple underlying beneficial owners such as those in the names of brokers), representing total net assets of approximately $29,150,603;
6,152,465 Original Class shares of the Rainier Small/Mid Cap Equity Fund outstanding and entitled to vote (including omnibus accounts representing multiple underlying beneficial owners such as those in the names of brokers), representing total net assets of approximately $232,435,243; and
4,065,754 Original Class shares of the Rainier Large Cap Equity Fund outstanding and entitled to vote (including omnibus accounts representing multiple underlying beneficial owners such as those in the names of brokers), representing total net assets of approximately $81,697,810.
As of the Record Date, with regard to Institutional Class shares there were:
 
1,450,272 Institutional Class shares of the Rainier Mid Cap Equity Fund outstanding and entitled to vote (including omnibus accounts representing multiple underlying beneficial owners such as those in the names of brokers), representing total net assets of approximately $59,859,723;
1,969,624 Institutional Class shares of the Rainier Small/Mid Cap Equity Fund outstanding and entitled to vote (including omnibus accounts representing multiple underlying beneficial owners such as those in the names of brokers), representing total net assets of approximately $79,270,801; and
1,370,356 Institutional Class shares of the Rainier Large Cap Equity Fund outstanding and entitled to vote (including omnibus accounts representing multiple underlying beneficial owners such as those in the names of brokers), representing total net assets of approximately $28,460,258.
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Principal Holders Rainier U.S. Funds
 
As of the Record Date, the Rainier U.S. Funds’ shareholders of record and/or beneficial owners (to the Rainier U.S. Funds’ knowledge) who owned five percent or more of the Rainier U.S. Funds’ Original Class or Institutional Class shares is set forth below:
 
Rainier Mid Cap Equity Fund – Original Class
Shares
Percentage
       
Charles Schwab & Co. Inc.*
Special Custody Account for the Benefit of Customers
Attn: Mutual Funds
San Francisco, CA 94105-1905
 
259,040
35.09%
       
National Financial Services LLC*
For Exclusive Benefit of our Customers
Attn: Mutual Funds Dept. 4th Floor
Jersey City, NJ 07310-2010
 
157,236
21.30%
       
Pershing LLC*
For Benefit of its Customers
Jersey City, NJ 07399-0002
 
138,374
18.74%
       
*     Owned of Record
     

 
Rainier Mid Cap Equity Fund – Institutional Class
Shares
Percentage
       
LPL Financial*
Omnibus Customer Account
San Diego, CA 92121-3091
 
778,130
53.72%
       
National Financial Services LLC*
For Exclusive Benefit of our Customers
Attn: Mutual Funds Dept. 4th Floor
Jersey City, NJ 07310-2010
 
172,426
11.90%
       
Wells Fargo Clearing Services*
For Benefit of its Clients
P.O. Box 1533
Minneapolis, MN 55480-1533
 
154,267
10.65%
       
Charles Schwab & Co. Inc.*
Special Custody Account for the Benefit of Customers
Attn: Mutual Funds
San Francisco, CA 94105-1905
 
151,136
10.43%
       
*     Owned of Record
     
 
60


Rainier Small/Mid Cap Equity Fund – Original Class
Shares
Percentage
       
Charles Schwab & Co. Inc.*
Special Custody Account for the Benefit of Customers
Attn: Mutual Funds
San Francisco, CA 94105-1905
 
2,763,531
44.94%
       
National Financial Services LLC*
For Exclusive Benefit of our Customers
Attn: Mutual Funds Dept. 4th Floor
Jersey City, NJ 07310-2010
 
2,672,304
43.46%
       
*     Owned of Record
     


Rainier Small/Mid Cap Equity Fund – Institutional Class
Shares
Percentage
       
National Financial Services LLC*
For Exclusive Benefit of our Customers
Attn: Mutual Funds Dept. 4th Floor
Jersey City, NJ 07310-2010
 
1,379,260
70.03%
       
Charles Schwab & Co. Inc.*
Special Custody Account for the Benefit of Customers
Attn: Mutual Funds
San Francisco, CA 94105-1905
 
316,714
16.08%
       
International Union of Operating Engineers #302*
General Investment Fund
Bothell, WA 98011-9514
 
100,232
5.09%
       
*     Owned of Record
     


Rainier Large Cap Equity Fund – Original Class
Shares
Percentage
       
Taynik & Co.*
C/O State Street Bank & Trust Co.
Quincy, MA 02169-0938
1,736,712
42.74%
       
Charles Schwab & Co. Inc.*
Special Custody Account for the Benefit of Customers
Attn: Mutual Funds
San Francisco, CA 94105-1905
 
1,118,951
27.53%
       
National Financial Services LLC*
For Exclusive Benefit of our Customers
Attn: Mutual Funds Dept. 4th Floor
Jersey City, NJ 07310-2010
 
770,477
18.96%
       
*     Owned of Record
     
 
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Rainier Large Cap Equity Fund – Institutional Class
Shares
Percentage
       
Capinco C/O US Bank NA*
Milwaukee, WI 53212-3958
611,461
44.62%
       
International Union of Operating Engineers #302*
General Investment Fund
Bothell, WA 98011-9514
 
255,600
18.65%
       
TD Ameritrade, Inc.*
For the Exclusive Benefit of our Clients
P.O. Box 2226
Omaha, NE 68103-2226
 
154,322
11.30%
       
Charles Schwab & Co. Inc.*
Special Custody Account for the Benefit of Customers
Attn: Mutual Funds
San Francisco, CA 94105-1905
 
138,522
10.11%
       
National Financial Services LLC*
For Exclusive Benefit of our Customers
Attn: Mutual Funds Dept. 4th Floor
Jersey City, NJ 07310-2010
 
87,883
6.41%
       
*     Owned of Record
     


As of the Record Date, the officers and trustees of the Rainier U.S. Funds, as a group, owned of record and beneficially less than 1% of the outstanding Original Class shares of each of the Rainier Mid Cap Equity Fund, Rainier Small/Mid Cap Equity Fund and the Rainier Large Cap Equity Fund.
 
As of the Record Date, the officers and trustees of the Rainier U.S. Funds, as a group, owned of record and beneficially less than 1% of the outstanding Institutional Class shares of each of the Rainier Mid Cap Equity Fund, Rainier Small/Mid Cap Equity Fund and the Rainier Large Cap Equity Fund.
 
No person is deemed to “control” any of the Rainier U.S. Funds, as that term is defined in the Investment Company Act, because no Rainier U.S. Fund knows of any person who owns beneficially or through controlled companies more than 25% of a Rainier U.S. Fund’s shares or who acknowledges the existence of control.
 
Principal Holders Hennessy Funds
 
As of the Record Date, the Hennessy Funds’ shareholders of record and/or beneficial owners (to the Hennessy Funds’ knowledge) who owned five percent or more of the Hennessy Funds’ Investor Class or Institutional Class shares is set forth below:
62

 
Hennessy Cornerstone Mid Cap 30 Fund – Investor Class
Shares
Percentage
       
Charles Schwab & Co. Inc.*
Special Custody Account for the Benefit of Customers
Attn: Mutual Funds
San Francisco, CA 94105-1905
 
6,459,387
35.95%
       
National Financial Services LLC*
For Exclusive Benefit of our Customers
Attn: Mutual Funds Dept. 4th Floor
Jersey City, NJ 07310-2010
 
5,114,976
28.47%
       
Pershing LLC*
For Benefit of its Customers
Jersey City, NJ 07399-0002
 
1,211,225
6.74%
       
TD Ameritrade, Inc.*
For the Exclusive Benefit of our Clients
P.O. Box 2226
Omaha, NE 68103-2226
 
1,191,214
6.63%

*     Owned of Record
     

 
Hennessy Cornerstone Mid Cap 30 Fund –
Institutional Class
Shares
Percentage
       
National Financial Services LLC*
For Exclusive Benefit of our Customers
Attn: Mutual Funds Dept. 4th Floor
Jersey City, NJ 07310-2010
 
9,342,238
30.59%
       
Charles Schwab &  Co. Inc.*
Special Custody Account for the Benefit of Customers
Attn: Mutual Funds
San Francisco, CA 94105-1905
 
7,051,131
23.09%
       
Wells Fargo Clearing Services*
For Benefit of its Clients
P.O. Box 1533
Minneapolis, MN 55480-1533
 
2,954,160
9.67%
       
TD Ameritrade, Inc.*
For the Exclusive Benefit of our Clients
P.O. Box 2226
Omaha, NE 68103-2226
 
2,235,305
7.32%
       
UBS WM USA*
Exclusive Benefit of Customers
1000 Harbor Blvd
Weehawken, NJ 07086-6761
 
1,816,572
5.95%

*     Owned of Record
     
 
63

 
Hennessy Cornerstone Large Growth Fund –
Investor Class
Shares
Percentage
       
Charles Schwab & Co. Inc.*
Special Custody Account for the Benefit of Customers
Attn: Mutual Funds
San Francisco, CA 94105-1905
 
596,599
7.41%
       
National Financial Services LLC*
For Exclusive Benefit of our Customers
Attn: Mutual Funds Dept. 4th Floor
Jersey City, NJ 07310-2010
 
447,228
5.56%

*     Owned of Record
     

 
Hennessy Cornerstone Large Growth Fund –
Institutional Class
Shares
Percentage
       
National Financial Services LLC*
For Exclusive Benefit of our Customers
Attn: Mutual Funds Dept. 4th Floor
Jersey City, NJ 07310-2010
 
216,620
19.76%
       
Charles Schwab & Co. Inc.*
Special Custody Account for the Benefit of Customers
Attn: Mutual Funds
San Francisco, CA 94105-1905
 
146,613
13.38%

*     Owned of Record
     

 
As of the Record Date, the officers and trustees of the Hennessy Funds owned of record and beneficially less than 1% of the outstanding Investor Class shares of the Hennessy Cornerstone Mid Cap 30 Fund and the Hennessy Cornerstone Large Growth Fund.
 
As of the Record Date, the officers and trustees of the Hennessy Funds owned of record and beneficially less than 1% of the outstanding Institutional Class shares of the Hennessy Cornerstone Mid Cap 30 Fund and 1.42% of the outstanding Institutional Class shares of the Hennessy Cornerstone Large Growth Fund.
 
No person is deemed to “control” the Hennessy Funds, as that term is defined in the Investment Company Act, because the Hennessy Funds know of no person who owns beneficially or through controlled companies more than 25% of the Hennessy Funds’ shares or who acknowledges the existence of control.
 
Pro Forma Principal Holders Hennessy Funds
 
If the Reorganization had been effected as of the Record Date, the Hennessy Funds’ Investor Class and Institutional Class shareholders of record and/or beneficial owners (to the Hennessy Funds’ knowledge) who would have owned five percent or more of the Hennessy Funds’ total outstanding Investor Class and Institutional Class shares is set forth below:
64

 
Hennessy Cornerstone Mid Cap 30 Fund –
Investor Class Pro Forma
Shares
Percentage
       
Charles Schwab & Co. Inc.*
Special Custody Account for the Benefit of Customers
Attn: Mutual Funds
San Francisco, CA 94105-1905
 
11,918,614
39.05%
       
National Financial Services LLC*
For Exclusive Benefit of our Customers
Attn: Mutual Funds Dept. 4th Floor
Jersey City, NJ 07310-2010
 
10,231,366
33.52%
       

*     Owned of Record
     

 
Hennessy Cornerstone Mid Cap 30 Fund –
Institutional Class Pro Forma
Shares
Percentage
       
National Financial Services LLC*
For Exclusive Benefit of our Customers
Attn: Mutual Funds Dept. 4th Floor
Jersey City, NJ 07310-2010
 
12,270,298
33.05%
       
Charles Schwab & Co. Inc.*
Special Custody Account for the Benefit of Customers
Attn: Mutual Funds
San Francisco, CA 94105-1905
 
7,938,699
21.38%
       
Wells Fargo Clearing Services*
For Benefit of its Clients
P.O. Box 1533
Minneapolis, MN 55480-1533
 
3,251,805
8.76%
       
TD Ameritrade, Inc.*
For the Exclusive Benefit of our Clients
P.O. Box 2226
Omaha, NE 68103-2226
 
2,235,305
6.02%

*     Owned of Record
     
 
65

 
Hennessy Cornerstone Large Growth Fund –
Investor Class Pro Forma
Shares
Percentage
       
Taynik & Co.*
C/O State Street Bank & Trust Co.
Quincy, MA 02169-0938
 
2,997,470
19.89%
       
Charles Schwab & Co. Inc.*
Special Custody Account for the Benefit of Customers
Attn: Mutual Funds
San Francisco, CA 94105-1905
 
2,527,848
16.77%
       
National Financial Services LLC*
For Exclusive Benefit of our Customers
Attn: Mutual Funds Dept. 4th Floor
Jersey City, NJ 07310-2010
 
1,777,029
11.79%

*     Owned of Record
     

 
Hennessy Cornerstone Large Growth Fund –
Institutional Class Pro Forma
Shares
Percentage
       
Capinco C/O US Bank NA*
Milwaukee, WI 53212-3958
 
1,080,855
30.72%
       
International Union of Operating Engineers #302*
General Investment Fund
Bothell, WA 98011-9514
 
451,814
12.84%
       
Charles Schwab & Co. Inc.*
Special Custody Account for the Benefit of Customers
Attn: Mutual Funds
San Francisco, CA 94105-1905
 
391,472
11.13%
       
National Financial Services LLC*
For Exclusive Benefit of our Customers
Attn: Mutual Funds Dept. 4th Floor
Jersey City, NJ 07310-2010
 
371,967
10.57%
       
TD Ameritrade, Inc.*
For the Exclusive Benefit of our Clients
P.O. Box 2226
Omaha, NE 68103-2226
 
272,789
7.75%

*     Owned of Record
     

 
If the Reorganization had been effected as of the Record Date, the officers and trustees of the Hennessy Funds’ would have owned of record and beneficially less than 1% of the outstanding Investor Class shares of the Hennessy Cornerstone Mid Cap 30 Fund and Hennessy Cornerstone Large Growth Fund.
 
If the Reorganization had been effected as of the Record Date, the officers and trustees of the Hennessy Funds’ would have owned of record and beneficially less than 1% of the outstanding Institutional Class shares of the Hennessy Cornerstone Mid Cap 30 Fund and Hennessy Cornerstone Large Growth Fund.
66

 
VIII.
ADDITIONAL INFORMATION
Documents that relate to the Rainier U.S. Funds are available, without charge, by writing to the Corporate Secretary of the Rainier Trust at 601 Union Street, Suite 3525, Seattle, Washington 98101, by calling 1-800-248-6314 or over the Internet at www.rainierfunds.com.
 
Documents that relate to the Hennessy Funds are available, without charge, by writing to Hennessy Funds Trust at 7250 Redwood Blvd., Suite 200, Novato, California 94945, by calling 1-800-966-4353 or 1-415-899-1555 or over the Internet at hennessyfunds.com.
 
The Rainier U.S. Funds and the Hennessy Funds are subject to the requirements of the Securities Exchange Act of 1934, as amended, and the Investment Company Act, and in accordance therewith, file reports, proxy materials, and other information relating to the Rainier U.S. Funds and the Hennessy Funds, respectively, with the SEC.  Reports, proxy and information statements, and other information filed by the Rainier U.S. Funds and the Hennessy Funds, can be obtained by calling or writing the funds and can also be inspected and copied by the public at the public reference facilities maintained by the SEC in Washington, DC located at 100 F Street, N.E., Washington DC 20549.  Copies of such material can be obtained at prescribed rates from the Public Reference Branch, Office of Consumer Affairs and Information Services, SEC, Washington D.C. 20549, or obtained electronically from the EDGAR database on the SEC’s website (www.sec.gov).
 
It is expected that this Proxy Statement will be mailed to shareholders on or about July 21, 2017.
 
IX.
MISCELLANEOUS INFORMATION
A.
Other Business
The Board knows of no other business to be brought before the special meeting.  If any other matters come before the special meeting, it is the Board’s intention that proxies that do not contain specific restrictions to the contrary will be voted on those matters in accordance with the judgment of the persons named in the enclosed form of proxy.
 
B.
Next Meeting of Shareholders
The Rainier U.S. Funds are not required and do not intend to hold annual or other periodic meetings of shareholders except as required by the Investment Company Act.  By observing this policy, the Rainier U.S. Funds seek to avoid the expenses customarily incurred in the preparation of proxy materials and the holding of shareholder meetings, as well as the related expenditure of staff time.  If the Reorganization is not completed, the next meeting of the shareholders of the Rainier U.S. Funds will be held at such time as the Board  may determine or at such time as may be legally required.  Any shareholder proposal intended to be presented at such meeting must be received by the Rainier U.S. Funds at their office at a reasonable time before the meeting, as determined by the Board, to be included in the Rainier U.S. Funds’ Proxy Statement and form of proxy relating to that meeting, and it must satisfy all other legal requirements.
67

 
C.
Legal Matters
The validity of the issuance of the Hennessy Funds’ shares will be passed upon by Foley & Lardner LLP, Milwaukee, Wisconsin.
 
D.
Experts
The financial statements of the Rainier U.S. Funds are incorporated by reference in the Statement of Additional Information, which is part of such Registration Statement, to the Funds’ Annual Report to Shareholders and have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, which is incorporated herein by reference. Such financial statements have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
 
The financial statements of the Hennessy Funds are incorporated by reference in the Statement of Additional Information, which is part of such Registration Statement, to the Hennessy Funds’ Annual Reports to Shareholders and have been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report, which is incorporated herein by reference. Such financial statements have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
 
By Order of the Board of Trustees of Rainier Investment Management Mutual Funds

/s/ Michele T. Mosca
 
Michele T. Mosca
Chief Executive Officer and President
July 14, 2017
68

EXHIBIT A
 
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
 
THIS AGREEMENT AND PLAN OF REORGANIZATION (this “Agreement”) is made as of this [•] day of [•], 2017, by and between Hennessy Funds Trust, a Delaware statutory trust (“Hennessy Funds Trust”), on behalf of the Hennessy Cornerstone Mid Cap 30 Fund and the Hennessy Cornerstone Large Growth Fund (each a “Surviving Fund” and, together, the “Surviving Funds”), and Rainier Investment Management Mutual Funds, a Delaware statutory trust (the “Rainier Trust”), on behalf of the Rainier Mid Cap Equity Fund, the Rainier Small/Mid Cap Equity Fund and the Rainier Large Cap Equity Fund (each a “Reorganizing Fund” and, together, the “Reorganizing Funds”). Shareholders of the Reorganizing Funds are referred to herein as “Investors.” This Agreement shall be treated as if each Reorganization (as defined herein) between a Reorganizing Fund and its corresponding Surviving Fund contemplated hereby had been the subject of a separate agreement.
 
Rainier Investment Management, LLC (“Rainier”) joins this Agreement solely for purposes of Section 9. Rainier represents and warrants that the execution, delivery and performance of this Agreement by Rainier will have been duly authorized prior to the Closing Date (as defined in Section 3.1) by all necessary action on the part of Rainier, and this Agreement will constitute a valid and binding obligation of Rainier enforceable in accordance with its terms, subject as to enforcement, to bankruptcy, insolvency, reorganization, arrangement, moratorium and other similar laws of general applicability relating to or affecting creditors’ rights, and to general equity principles. Hennessy Advisors, Inc. (“Hennessy Advisors”) joins this Agreement solely for purposes of Section 9. Hennessy Advisors represents and warrants that the execution, delivery and performance of this Agreement by Hennessy Advisors will have been duly authorized prior to the Closing Date by all necessary action on the part of Hennessy Advisors, and this Agreement will constitute a valid and binding obligation of Hennessy Advisors enforceable in accordance with its terms, subject as to enforcement, to bankruptcy, insolvency, reorganization, arrangement, moratorium and other similar laws of general applicability relating to or affecting creditors’ rights, and to general equity principles.
 
In accordance with the terms and conditions set forth in this Agreement, the parties desire that all of the assets of each Reorganizing Fund be transferred to the corresponding Surviving Fund, and that the Surviving Fund assume all liabilities, expenses, costs, charges and reserves of the corresponding Reorganizing Fund, whether absolute or contingent, known or unknown, accrued or unaccrued (other than Excluded Liabilities, as defined in that certain Transaction Agreement between Hennessy Advisors, Rainier and Rainier’s majority owner, Manning & Napier Group, LLC, dated as of May 10, 2017) (each a “Liability” and together the “Liabilities”), in exchange for Investor Class and Institutional Class shares of the corresponding Surviving Fund, as applicable (“Shares”), and that these Shares be distributed immediately after the Closing (as defined in the preamble to Section 1), by each Reorganizing Fund to its Investors in liquidation of such Reorganizing Fund as follows:
 
·
 
all of the assets of the Rainier Mid Cap Equity Fund will be transferred to the Hennessy Cornerstone Mid Cap 30 Fund, in exchange for Investor Class and Institutional Class shares of the Hennessy Cornerstone Mid Cap 30 Fund, which will be distributed pro rata
A-1

 
 
 
by the Rainier Mid Cap Equity Fund to its Original Class and Institutional Class shareholders, respectively, and the Hennessy Cornerstone Mid Cap 30 Fund will assume the Rainier Mid Cap Equity Fund’s liabilities (other than the Excluded Liabilities);
·
 
all of the assets of the Rainier Small/Mid Cap Equity Fund will be transferred to the Hennessy Cornerstone Mid Cap 30 Fund, in exchange for Investor Class and Institutional Class shares of the Hennessy Cornerstone Mid Cap 30 Fund, which will be distributed pro rata by the Rainier Small/Mid Cap Equity Fund to its Original Class and Institutional Class shareholders, respectively, and the Hennessy Cornerstone Mid Cap 30 Fund will assume the Rainier Small/Mid Cap Equity Fund’s liabilities (other than the Excluded Liabilities); and
·
 
all of the assets of the Rainier Large Cap Equity Fund will be transferred to the Hennessy Cornerstone Large Growth Fund, in exchange for Investor Class and Institutional Class shares of the Hennessy Cornerstone Large Growth Fund, which will be distributed pro rata by the Rainier Large Cap Equity Fund to its Original Class and Institutional Class shareholders, respectively, and the Hennessy Cornerstone Large Growth Fund will assume the Rainier Large Cap Equity Fund’s liabilities (other than the Excluded Liabilities).
This Agreement is intended to be and is adopted as a plan of reorganization and liquidation within the meaning of Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury Regulations promulgated thereunder.
 
In consideration of the promises and of the covenants and agreements hereinafter set forth, the parties hereto, intending to be legally bound hereby, covenant and agree as follows:
 
1.
PLAN OF REORGANIZATION
Subject to the terms and conditions herein set forth, and on the basis of the representations and warranties contained herein, each Reorganizing Fund shall assign, deliver and otherwise transfer its assets (the “Reorganizing Fund Assets”) to the applicable Surviving Fund and such Surviving Fund shall assume the Reorganizing Fund’s Liabilities. Such Surviving Fund shall, as consideration therefor, on the Closing Date, deliver to the applicable Reorganizing Fund, the Surviving Fund’s Shares, the number of which shall be determined by dividing (a) the value of said Reorganizing Fund Assets, net of the Liabilities, computed in the manner and as of the time and date set forth in Section 2.1, by (b) the net asset value of one share of the Surviving Fund Shares computed in the manner and as of the time and date set forth in Section 2.2. Such transfer, delivery and assumption shall take place as provided for in Section 3.1 (hereinafter sometimes referred to as the “Closing”). Immediately following the Closing, each of the Reorganizing Funds shall distribute the appropriate number of Shares of the applicable Surviving Fund to the Investors of both classes of such Reorganizing Fund in liquidation of the Reorganizing Fund, as provided in Section 1.4 hereof. The Agreement and transactions contemplated hereunder for each Reorganizing Fund and its corresponding Surviving Fund are hereinafter referred to as the “Reorganization.”
A-2

1.1 (a) With respect to each Reorganizing Fund, the Reorganizing Fund Assets shall consist of all property and assets of any nature whatsoever, including, without limitation, all cash, cash equivalents, securities, instruments, claims and receivables (including dividend and interest receivables) owned by such Reorganizing Fund, and any prepaid expenses shown as an asset on such Reorganizing Fund’s books on the Closing Date.
 
(b) Not less than ten calendar days before the Closing Date, each of the Reorganizing Funds will provide the applicable Surviving Fund with a schedule of its assets and its known liabilities, and such Surviving Fund will provide the Reorganizing Fund with a copy of the current investment objective and policies applicable to the Surviving Fund. Each of the Reorganizing Funds reserves the right to sell or otherwise dispose of any of the securities or other assets shown on the list of the applicable Reorganizing Fund’s assets before the Closing Date, but will not, without the prior approval of the applicable Surviving Fund, acquire any additional securities. If it is determined that the portfolios of a Reorganizing Fund and the applicable Surviving Fund, when aggregated, would contain investments exceeding certain percentage limitations to which such Surviving Fund is or will be subject with respect to such investments, the Reorganizing Fund, if requested by the Surviving Fund, will dispose of and/or reinvest a sufficient amount of such investments as may be necessary to avoid violating such limitations as of the Closing Date.
 
1.2 Each of the Reorganizing Funds will endeavor to discharge all of its known liabilities and obligations prior to the Closing Date. Each Surviving Fund will assume all of the Liabilities of the corresponding Reorganizing Fund. A Surviving Fund shall not assume any Liability for any obligation of a Reorganizing Fund to file reports with the Securities and Exchange Commission (the “SEC”), Internal Revenue Service or other regulatory or tax authority covering any reporting period ending prior to or at the Closing Date with respect to the Reorganizing Fund.
 
1.3 Immediately following the Closing, the Rainier Mid Cap Equity Fund will distribute the Investor Class and Institutional Class Shares, as applicable, of the Hennessy Cornerstone Mid Cap 30 Fund received by the Rainier Mid Cap Equity Fund pursuant to the preamble to Section 1 pro rata to its Investors of record determined as of the close of business on the Closing Date in complete liquidation of the Rainier Mid Cap Equity Fund; the Rainier Small/Mid Cap Equity Fund will distribute the Investor Class and Institutional Class Shares, as applicable, of the Hennessy Cornerstone Mid Cap 30 Fund received by the Rainier Small/Mid Cap Equity Fund pursuant to the preamble to Section 1 pro rata to its Investors of record determined as of the close of business on the Closing Date in complete liquidation of the Rainier Small/Mid Cap Equity Fund; and the Rainier Large Cap Equity Fund will distribute the Investor Class and Institutional Class and Shares, as applicable, of the Hennessy Cornerstone Large Growth Fund received by the Rainier Large Cap Equity Fund pursuant to the preamble to Section 1 pro rata to its Investors of record determined as of the close of business on the Closing Date in complete liquidation of the Rainier Large Cap Equity Fund. Holders of Original Class and Institutional Class shares of each of the Reorganizing Funds will receive Investor Class and Institutional Class Shares, respectively, of the applicable Surviving Fund. The distribution will be accomplished by an instruction, signed by an appropriate officer of Hennessy Funds Trust, to
A-3

transfer the Surviving Funds’ Shares then credited to the applicable Reorganizing Fund’s account on the books of the Surviving Funds to open accounts on the books of the Surviving Funds established and maintained by the Surviving Funds’ transfer agent in the names of record of the applicable Reorganizing Fund’s Investors and representing the number of Shares of each Surviving Fund due to each Investor of the Reorganizing Funds. All issued and outstanding shares of both classes of the Reorganizing Funds will be cancelled simultaneously therewith on the Reorganizing Funds’ books, and any outstanding share certificates representing interests in the Reorganizing Funds will represent only the right to receive such number of the applicable Surviving Fund’s Shares after the Closing as determined in accordance with the preamble to Section 1.
 
1.4 Following the transfer of assets by the Reorganizing Funds to the Surviving Funds, the assumption of the Liabilities by the Surviving Funds, and the distribution by the Reorganizing Funds of the Surviving Funds’ Shares received by them pursuant to Section 1.3, the Reorganizing Funds shall terminate their qualification, classification and registration with all appropriate federal and state agencies. Any reporting or other responsibility of the Reorganizing Funds is and shall remain the responsibility of the Reorganizing Funds up to and including the date on which the Reorganizing Funds are terminated and deregistered, subject to any reporting or other obligations described in Section 4.8.
 
2.
VALUATION
2.1 The value of the Reorganizing Fund Assets shall be the value of those assets computed as of the time at which net asset value is calculated pursuant to the valuation procedures set forth in the Surviving Funds’ then-current Prospectus and Statement of Additional Information on the business day immediately preceding the Closing Date, or at such time on such earlier or later date as may mutually be agreed upon in writing among the parties hereto (such time and date being herein called the “Valuation Date”). As of the close of business on the Valuation Date, the movement of records and materials of the Reorganizing Funds, and conversion thereof, to the fund accounting and administrative services agent of the Surviving Funds shall commence for completion prior to the Closing Date.
 
2.2 The net asset value of each share of the Surviving Funds’ Shares shall be the net asset value per share computed on the Valuation Date, using the market valuation procedures set forth in the Surviving Funds’ then-current Prospectus and Statement of Additional Information.
 
2.3 All computations of value contemplated by this Section 2 shall be made by the Surviving Funds’ administrator in accordance with its regular practice as pricing agent. The Surviving Funds shall cause their administrator to deliver a copy of their valuation report to the Reorganizing Funds at the Closing.
 
3.
CLOSING AND CLOSING DATE
3.1 The Closing for the Reorganization shall occur on [•], 2017, and/or on such other date as may be mutually agreed upon in writing by the parties hereto (each, a “Closing Date”).
A-4

All acts taking place at the Closing shall be deemed to take place simultaneously, immediately after the close of business on the Closing Date unless otherwise provided.
 
3.2 The Surviving Funds’ custodian shall deliver at the Closing evidence that: (a) the Reorganizing Fund Assets have been delivered in proper form to the Surviving Funds as of the Closing Date and (b) all necessary taxes including all applicable federal and state stock transfer stamps, if any, have been paid, or provision for payment shall have been made, by the Reorganizing Funds in conjunction with the delivery of portfolio securities.
 
3.3 Notwithstanding anything herein to the contrary, if on the Valuation Date (a) the New York Stock Exchange shall be closed to trading or trading thereon shall be restricted or (b) trading or the reporting of trading on such exchange or elsewhere shall be disrupted so that, in the judgment of the Surviving Funds, accurate appraisal of the value of the net assets of a Surviving Fund or a Reorganizing Fund is impracticable, the Valuation Date shall be postponed until the first business day after the day when trading shall have been fully resumed without restriction or disruption and reporting shall have been restored.
 
4.
COVENANTS WITH RESPECT TO THE SURVIVING FUNDS AND THE REORGANIZING FUNDS
4.1 With respect to the Reorganizing Funds, the Rainier Trust has called or will call a meeting of shareholders of the Reorganizing Funds to consider and act upon this Agreement and to take all other actions reasonably necessary to obtain the approval of the transactions contemplated herein, including approval for each of the Reorganizing Funds’ liquidating distribution of Shares of the Surviving Funds contemplated hereby, and for each of the Reorganizing Funds to terminate its qualification, classification and registration if requisite approvals are obtained with respect to the Reorganizing Funds. The Rainier Trust on behalf of the Reorganizing Funds shall assist Hennessy Funds Trust on behalf of the Surviving Funds in preparing the notice of meeting, form of proxy and proxy statement/prospectus (collectively, “Proxy Materials”) to be used in connection with that meeting and the registration statement on Form N-14 to be prepared by Hennessy Funds Trust pursuant to Section 4.6.
 
4.2 The Rainier Trust on behalf of the Reorganizing Funds covenants that the Shares of the Surviving Funds to be issued hereunder are not being acquired for the purpose of making any distribution thereof, other than in accordance with the terms of this Agreement.
 
4.3 The Rainier Trust on behalf of the Reorganizing Funds will assist the Surviving Funds in obtaining such information as the Surviving Funds reasonably request concerning the beneficial ownership of shares of the Reorganizing Funds.
 
4.4 Subject to the provisions hereof, Hennessy Funds Trust, on behalf of the Surviving Funds, and the Rainier Trust, on behalf of the Reorganizing Funds, will take, or cause to be taken, all actions, and do, or cause to be done, all things reasonably necessary, proper or advisable to consummate and make effective the transactions contemplated herein.
A-5

4.5 The Reorganizing Funds shall furnish to the Surviving Funds on the Closing Date, a final statement of the total amount of each Reorganizing Fund’s assets and liabilities as of the Closing Date.
 
4.6 Hennessy Funds Trust, on behalf of the Surviving Funds, has prepared and filed, or will prepare and file, with the SEC a registration statement on Form N-14 under the Securities Act of 1933, as amended (the “1933 Act”), relating to the Shares of the Surviving Funds (the “Registration Statement”). The Reorganizing Funds have provided or will provide the Surviving Funds with necessary or advisable information and disclosure relating to the Reorganizing Funds for inclusion in the Proxy Materials, which are part of the Registration Statement, and with such other information and documents relating to the Reorganizing Funds as are requested by the Surviving Funds and as are reasonably necessary or advisable for the preparation of the Registration Statement.
 
4.7 After the Closing, Hennessy Funds Trust shall or shall cause its agents to prepare any federal, state or local tax returns, including any Forms 1099, required to be filed by the Surviving Funds, which returns shall include the activity of the Reorganizing Funds for the period January 1, 2017, through the close of business on the Valuation Date, and shall further cause such tax returns and Forms 1099 to be duly filed with the appropriate taxing authorities.
 
4.8 Following the transfer of Reorganizing Fund Assets by the Reorganizing Funds to the Surviving Funds and the assumption of the Liabilities in exchange for Shares of the Surviving Funds as contemplated herein, the Rainier Trust on behalf of the Reorganizing Funds will file any final regulatory reports, including but not limited to any Form N-SAR and Rule 24f-2 filings with respect to the Reorganizing Funds, promptly after the Closing Date and also will take all other steps as are necessary and proper to effect the termination or declassification of the Reorganizing Funds in accordance with the laws of Delaware and other applicable requirements.
 
4.9 Hennessy Funds Trust and the Rainier Trust will provide each other and their respective representatives with such cooperation, assistance and information as either of them reasonably may request of the other in filing any tax returns, amended return or claim for refund, determining a liability for taxes or a right to a refund of taxes or participating in or conducting any audit or other proceeding in respect of taxes, or in determining the financial reporting of any tax position.
 
5.
REPRESENTATIONS AND WARRANTIES
5.1 Hennessy Funds Trust, on behalf of the Surviving Funds, represents and warrants to the Reorganizing Funds as of the date hereof and as of the Closing Date as follows:
 
(a) Hennessy Funds Trust was duly created pursuant to its Trust Instrument by its Board of Trustees for the purpose of acting as a management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”), and is validly existing under the laws of Delaware, and the Trust Instrument directs the Board of Trustees to manage the affairs of Hennessy Funds Trust and grants them all powers necessary or desirable to carry out such responsibility, including administering the Surviving Funds’ business as currently
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conducted by the Surviving Funds and as described in the current Prospectus of the Surviving Funds. Each of the Surviving Funds is a series of Hennessy Funds Trust. Hennessy Funds Trust is registered as an investment company classified as an open-end management company, under the 1940 Act, and its registration with the SEC as an investment company is in full force and effect;
 
(b) The Surviving Funds are each a legally designated, separate series of Hennessy Funds Trust duly organized and validly existing under the laws of Delaware, and for each full and partial taxable year from its inception through the Closing Date, the Surviving Funds each have qualified as a separate regulated investment company under the Code and each has taken all necessary and required actions to maintain such status;
 
(c) The Registration Statement with respect to Hennessy Funds Trust and the Surviving Funds conforms or will conform, at all times up to and including the Closing Date, in all material respects to the applicable requirements of the 1933 Act and the 1940 Act and the regulations thereunder and does not include or will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;
 
(d) The Surviving Funds are not in violation of, and the execution, delivery and performance of this Agreement by Hennessy Funds Trust for itself and on behalf of the Surviving Funds does not and will not (i) violate the Trust Instrument or Bylaws of Hennessy Funds Trust, or (ii) result in a breach or violation of, or constitute a default under, any material agreement or material instrument or other undertaking, to which Hennessy Funds Trust is a party or by which its properties or assets are bound;
 
(e) Except as previously disclosed in writing to the Reorganizing Funds, no litigation or administrative proceeding or investigation of or before any court or governmental body is presently pending or, to the best knowledge of Hennessy Funds Trust, threatened against any one of the Surviving Funds or any of its properties or assets which, if adversely determined, would materially and adversely affect the financial condition or the conduct of business, the Hennessy Funds Trust knows of no facts that might form the basis for the institution of any such proceeding or investigation, and the Surviving Funds are not a party to or subject to the provisions of any order, decree or judgment of any court or governmental body that materially and adversely affects, or is reasonably likely to materially and adversely affect, its business or its ability to consummate the transactions contemplated herein;
 
(f) The audited financial statements of the Surviving Funds as of and for the fiscal year ended October 31, 2016, as amended (copies of which have been furnished to the Reorganizing Funds), fairly present, in all material respects, the Surviving Funds’ financial condition as of such date and its results of operations for such periods in accordance with generally accepted accounting principles consistently applied, and as of each such respective date there were no liabilities of any of the Surviving Funds (contingent or otherwise) known to the Surviving Funds that were not disclosed therein but that would be required to be disclosed therein in accordance with generally accepted accounting principles;
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(g) Since the date of the most recent audited financial statements, there has not been any material adverse change with respect to any of the Surviving Funds’ financial condition, assets, liabilities or business, other than changes occurring in the ordinary course of business, or any incurrence by a Surviving Fund of indebtedness maturing more than one year from the date such indebtedness was incurred, except as otherwise disclosed in writing to and accepted by the Reorganizing Funds, prior to the Closing Date (for the purposes of this subparagraph, neither a decline in a Surviving Fund’s net asset value per share nor a decrease in a Surviving Fund’s size due to redemptions shall be deemed to constitute a material adverse change);
 
(h) The Surviving Funds have timely filed all federal and other tax returns and reports that are required by law to have been filed by the Surviving Funds, all such tax returns and reports were complete and accurate, all taxes owed by the Surviving Funds have been timely paid, and to the best of the Surviving Funds’ knowledge, no such return is currently under audit and no assessment of a tax deficiency has been made with respect to any such return;
 
(i) All issued and outstanding shares, including shares to be issued in connection with the Reorganization, of the Surviving Funds will, as of the Closing Date, be duly authorized and validly issued and outstanding, fully paid and nonassessable, Investor Class and Institutional Class shares of the Surviving Funds issued and outstanding before the Closing Date were offered and sold in compliance with the applicable registration and regulatory requirements, or exemptions therefrom, of the 1933 Act, the 1940 Act, and all applicable state securities laws, and the regulations thereunder, and none of the Surviving Funds have outstanding any options, warrants or other rights to subscribe for or purchase any of its shares, nor is there outstanding any security convertible into any of its shares;
 
(j) The execution, delivery and performance of this Agreement on behalf of the Surviving Funds will have been duly authorized prior to the Closing Date by all necessary action on the part of Hennessy Funds Trust, the trustees of the Board of Trustees of Hennessy Funds Trust and the Surviving Funds, and this Agreement will constitute a valid and binding obligation of Hennessy Funds Trust and each of the Surviving Funds enforceable in accordance with its terms, subject as to enforcement, to bankruptcy, insolvency, reorganization, arrangement, moratorium and other similar laws of general applicability relating to or affecting creditors’ rights, and to general equity principles;
 
(k) On the effective date of the Registration Statement, at the time of the meeting of the Reorganizing Funds’ shareholders and on the Closing Date, any written information furnished by Hennessy Funds Trust with respect to the Surviving Funds for use in the Proxy Materials, the Registration Statement or any other materials provided in connection with the Reorganization does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the information provided not misleading; and
 
(l) To the knowledge of Hennessy Funds Trust, no governmental consents, approvals, authorizations or filings are required under the 1933 Act, the Securities Exchange Act of 1934 (the “1934 Act”), the 1940 Act or Delaware law for the execution of this Agreement by Hennessy Funds Trust, for itself and on behalf of any of the Surviving Funds, or the performance of this Agreement by
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Hennessy Funds Trust for itself and on behalf of any of the Surviving Funds, except for such consents, approvals, authorizations and filings as have been made or received, and except for such consents, approvals, authorizations and filings as may be required after the Closing Date.