Document:

BONUS AGREEMENT 

        THIS
BONUS AGREEMENT is made as of the 28th day of August, 2006 by and between HENNESSY
ADVISORS, INC., a California corporation (the “Company”), and TERESA M. NILSEN,
Executive Vice President and Chief Financial Officer of the Company
(“Executive”). 

Background 

        Executive
is a key contributor to the Company’s continued financial success. In consideration
of Executive’s continued employment with the Company, the Company wishes to provide
Executive with bonus compensation in the event of a change of control of the Company.
Accordingly, the parties agree as follows: 

        1.    Bonus
on Change of Control. In the event of a Change of Control, provided           that
Executive remains continuously employed by the Company through the date of           the
Change of Control, the Company shall pay Executive within 15 days after the
          Change of Control a one-time cash bonus equal to the least of:  

	 	
(a)                 $750,000;  

	 	
(b)                 The
sum of the following:  

          		           (i)       
               150% of the total base salary (before deductions for withholding taxes or
               reductions for pre-tax contributions or deferrals to any Company benefit plan)
               paid by the Company to Executive during the most recent fiscal year ended prior
               to the Change of Control; 

               

          		           (ii)       
               150% of the Prior Year’s Bonus; 

               

          		           (iii)       
               An amount equal to the Pro Rata Portion of the Prior Year’s Bonus, provided
               that at least such amount has been accrued by the Company as bonus compensation
               for Executive (without regard to this Agreement) for the fiscal year during
               which the Change of Control occurs; or 

               

	 	
(c)                 The
amount specified in Section 2.  

        2.    
Section 280G Limitation. If the bonus to be paid pursuant to Section 1,
               together with any other payments or benefits received or to be received by
               Executive from the Company or any successor thereto in the Change of
Control                transaction (whether payable upon termination of employment or
otherwise and                whether payable pursuant to the terms hereof or any other
plan, agreement or                arrangement with the Company or any successor thereto
in the Change of Control                transaction) (such payments in the aggregate
“Total Benefits”), would                constitute an “excess parachute
payment” under Section 280G of the                Code, then the amount that would
be payable to Executive under Section 1 shall                be reduced such that the
Total Benefits will be One Dollar ($1.00) less than the                maximum amount
Executive may receive without becoming subject to the tax imposed                by
Section 4999 of the Code.  

        3.    
Definitions. The following definitions shall apply for purposes of this
               Bonus Agreement:  

	 	        (a)    
               “Affiliate” means any person controlling, controlled by
or                under common control with the person in question.  

	 	        (b)    
               “Beneficial Ownership” has the meaning set forth in Rule
13d-3                promulgated under the Exchange Act. Beneficial Owner and
Beneficially Owned have                correlative meanings.  

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

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

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

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

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

2 

	 	        (e)    
               “Code” means the Internal Revenue Code of 1986, as
amended.  

	 	        (f)    
               “Continuing Director” means any member of the Board who
was a                member of the Board on August 1, 2006, and any successor of a
Continuing                Director who is recommended to succeed a Continuing Director
(or whose election                or nomination for election is approved) by at least a
majority of the Continuing                Directors then on the Board.  

	 	        (g)                   “Exchange
Act” means the Securities Exchange Act of 1934, as                amended.  

	 	        (h)    
               “Prior Year’s Bonus” means the cash bonus (before
               deductions for withholding taxes or reductions for pre-tax contributions
or                deferrals to any Company benefit plan) paid by the Company based on
               Executive’s performance for the most recent fiscal year ended prior
to the                Change of Control.  

	 	        (i)    
               “Pro Rata Portion” means the portion determined by
dividing                (x) the number of days elapsed from the beginning of the
fiscal year during                which the Change of Control occurs until and including
the date of the Change of                Control by (y) 365.  

        4.    
Withholding. The Company shall withhold from all payments to Executive
               hereunder all amounts required to be withheld under applicable local,
state or                federal income tax and payroll laws.  

        5.    
Miscellaneous. This Agreement shall be construed and enforced in
               accordance with the laws of the State of California (exclusive of conflict
of                law principles). In the event that any provision of this Agreement
shall be                invalid, illegal or unenforceable, the remainder shall not be
affected thereby.                This Agreement shall be binding upon and inure to the
benefit of Executive and                Executive’s heirs and personal
representatives and the Company and its                successors, assigns and legal
representatives. Headings herein are inserted for                convenience and shall
not affect the interpretation of any provision of this                Agreement.
References to sections of the Exchange Act or the Code, or rules or
               regulations related thereto, shall be deemed to refer to any successor
               provisions, as applicable. The Company shall require any successor
(whether                direct or indirect, by purchase, merger, consolidation, or
otherwise) to                expressly assume and agree to perform under this Agreement
in the same manner                and to the same extent that the Company would be
required to perform if no such                succession had taken place. This Agreement
may not be terminated, amended, or                modified except by a written agreement
executed by the parties hereto or their                respective successors and legal
representatives.  

[Signature page
follows] 

3 

		HENNESSY ADVISORS, INC.
		

By:   /s/ Neil J. Hennessy
		Name:   Neil J. Hennessy
		Title:   President, CEO and Chairman of the Board
		

/s/ Teresa M. Nilsen
		Teresa M. Nilsen

4BONUS AGREEMENT 

        THIS
BONUS AGREEMENT is made as of the 28th day of August, 2006 by and between HENNESSY
ADVISORS, INC., a California corporation (the “Company”), and DANIEL B. STEADMAN,
Executive Vice President of the Company
(“Executive”). 

Background 

        Executive
is a key contributor to the Company’s continued financial success. In consideration
of Executive’s continued employment with the Company, the Company wishes to provide
Executive with bonus compensation in the event of a change of control of the Company.
Accordingly, the parties agree as follows: 

        1.    Bonus
on Change of Control. In the event of a Change of Control, provided           that
Executive remains continuously employed by the Company through the date of           the
Change of Control, the Company shall pay Executive within 15 days after the
          Change of Control a one-time cash bonus equal to the least of:  

	 	
(a)                 $500,000;  

	 	
(b)                 The
sum of the following:  

          		           (i)       
               100% of the total base salary (before deductions for withholding taxes or
               reductions for pre-tax contributions or deferrals to any Company benefit plan)
               paid by the Company to Executive during the most recent fiscal year ended prior
               to the Change of Control; 

               

          		           (ii)       
               100% of the Prior Year’s Bonus; 

               

          		           (iii)       
               An amount equal to the Pro Rata Portion of the Prior Year’s Bonus, provided
               that at least such amount has been accrued by the Company as bonus compensation
               for Executive (without regard to this Agreement) for the fiscal year during
               which the Change of Control occurs; or 

               

	 	
(c)                 The
amount specified in Section 2.  

        2.    
Section 280G Limitation. If the bonus to be paid pursuant to Section 1,
               together with any other payments or benefits received or to be received by
               Executive from the Company or any successor thereto in the Change of
Control                transaction (whether payable upon termination of employment or
otherwise and                whether payable pursuant to the terms hereof or any other
plan, agreement or                arrangement with the Company or any successor thereto
in the Change of Control                transaction) (such payments in the aggregate
“Total Benefits”), would                constitute an “excess parachute
payment” under Section 280G of the                Code, then the amount that would
be payable to Executive under Section 1 shall                be reduced such that the
Total Benefits will be One Dollar ($1.00) less than the                maximum amount
Executive may receive without becoming subject to the tax imposed                by
Section 4999 of the Code.  

        3.    
Definitions. The following definitions shall apply for purposes of this
               Bonus Agreement:  

	 	        (a)    
               “Affiliate” means any person controlling, controlled by
or                under common control with the person in question.  

	 	        (b)    
               “Beneficial Ownership” has the meaning set forth in Rule
13d-3                promulgated under the Exchange Act. Beneficial Owner and
Beneficially Owned have                correlative meanings.  

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

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

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

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

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

2 

	 	        (e)    
               “Code” means the Internal Revenue Code of 1986, as
amended.  

	 	        (f)    
               “Continuing Director” means any member of the Board who
was a                member of the Board on August 1, 2006, and any successor of a
Continuing                Director who is recommended to succeed a Continuing Director
(or whose election                or nomination for election is approved) by at least a
majority of the Continuing                Directors then on the Board.  

	 	        (g)                   “Exchange
Act” means the Securities Exchange Act of 1934, as                amended.  

	 	        (h)    
               “Prior Year’s Bonus” means the cash bonus (before
               deductions for withholding taxes or reductions for pre-tax contributions
or                deferrals to any Company benefit plan) paid by the Company based on
               Executive’s performance for the most recent fiscal year ended prior
to the                Change of Control.  

	 	        (i)    
               “Pro Rata Portion” means the portion determined by
dividing                (x) the number of days elapsed from the beginning of the
fiscal year during                which the Change of Control occurs until and including
the date of the Change of                Control by (y) 365.  

        4.    
Withholding. The Company shall withhold from all payments to Executive
               hereunder all amounts required to be withheld under applicable local,
state or                federal income tax and payroll laws.  

        5.    
Miscellaneous. This Agreement shall be construed and enforced in
               accordance with the laws of the State of California (exclusive of conflict
of                law principles). In the event that any provision of this Agreement
shall be                invalid, illegal or unenforceable, the remainder shall not be
affected thereby.                This Agreement shall be binding upon and inure to the
benefit of Executive and                Executive’s heirs and personal
representatives and the Company and its                successors, assigns and legal
representatives. Headings herein are inserted for                convenience and shall
not affect the interpretation of any provision of this                Agreement.
References to sections of the Exchange Act or the Code, or rules or
               regulations related thereto, shall be deemed to refer to any successor
               provisions, as applicable. The Company shall require any successor
(whether                direct or indirect, by purchase, merger, consolidation, or
otherwise) to                expressly assume and agree to perform under this Agreement
in the same manner                and to the same extent that the Company would be
required to perform if no such                succession had taken place. This Agreement
may not be terminated, amended, or                modified except by a written agreement
executed by the parties hereto or their                respective successors and legal
representatives.  

[Signature page
follows] 

3 

		HENNESSY ADVISORS, INC.
		

By:   /s/ Neil J. Hennessy
		Name:   Neil J. Hennessy
		Title:   President, CEO and Chairman of the Board
		

/s/ Daniel B. Steadman
		Daniel B. Steadman

4

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