As filed with the Securities and Exchange Commission on April 30, 1996
Registration No. 33-7190
Investment Company Act File No. 811-4750
______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 | X |
Post-Effective Amendment No. 19 | X |
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 | X |
Amendment No. 22 | X |
FENIMORE ASSET MANAGEMENT TRUST
(Exact Name of Registrant as Specified in Charter)
111 North Grand Street, P.O. Box 399, Cobleskill, N.Y. 12043
(Address of Principal Executive Offices)
Registrant's Telephone Number: (800) 453-4392
Allan S. Mostoff, Esq.
Dechert Price & Rhoads
1500 K Street, N.W.
Washington, D.C. 20005
(Name and Address of Agent for Service)
Copies to:
Thomas O. Putnam
118 North Grand Street
Cobleskill, N.Y. 12043
It is proposed that this filing will become effective on May 1, 1996
pursuant to paragraph (b) of Rule 485.
__________________
* Registrant has elected to register an indefinite number of shares of
beneficial interest under the Securities Act of 1933 pursuant to Rule 24f-2
under the Investment Company Act of 1940. Registrant filed the notice
required by Rule 24f-2 with respect to its fiscal year ended December 31, 1995
on February 26, 1996.
<PAGE>
CROSS REFERENCE SHEET
REQUIRED BY RULE 495 UNDER THE
SECURITIES ACT OF 1933
FENIMORE ASSET MANAGEMENT TRUST
This filing relates solely to FAM Value Fund, a separate investment
series of Fenimore Asset Management Trust (the "Trust") and contains the
Prospectus and Statement of Additional Information relating solely to FAM
Value Fund. The Prospectus and Statement of Additional Information relating
to the Trust's other investment series, FAM Equity Income Fund, are contained
in Post-Effective Amendment No.18 to the Trust's Registration Statement filed
on March 27, 1996.
Items Required by Form N-1A
Item Number in Part A Prospectus Caption
1. Cover Page.........................Cover Page
2. Synopsis...........................Fund Expenses
3. Condensed Financial
Information......................Selected Financial Information
4. General Description of
Registrant.......................General Information and Capital;
Investment Objective and Policies
5. Management of the Fund.............General Information and Capital;
Investment Objective and Policies;
Investment Advisor
5A. Management's Discussion of
Fund Performance.................Information is contained in the
Annual Report of the Registrant
6. Capital Stock and Other
Securities.......................How to Purchase Shares; Redemption of
Shares; Federal Income Tax Status of
Fund
7. Purchase of Securities
Being Offered....................How to Purchase Shares; Purchases
Through Selected Dealers
8. Redemption or Repurchase...........Redemption of Shares
9. Pending Legal Proceedings..........Inapplicable
10. Cover Page.........................Cover Page
11. Table of Contents..................Table of Contents
12. General Information and
History..........................Investment Objective and Policies
13. Investment Objectives and
Policies.........................Investment Objective and Policies
14. Management of the Fund.............History and Background of Investment
Advisor
15. Control Persons and Principal
Holders of Securities............Board of Trustees and Officers
16. Investment Advisory and other
Services.........................History and Background of Investment
Advisor
17. Brokerage Allocation...............Brokerage Allocations
18. Capital Stock and other
Securities.......................See Prospectus - General Information
and Capital
19. Purchase, Redemption and
Pricing of Securities
Being Offered....................Purchase of Shares; Redemption of
Shares
20. Tax Status.........................Federal Tax Status
21. Underwriters.......................Inapplicable
22. Calculations of Performance
Data.............................Performance Information
23. Financial Statements...............Financial Statements
<PAGE>
FAM VALUE FUND
111 North Grand Street, P.O. Box 399, Cobleskill, New York, 12043
Telephone Number (800) 932-3271
A NO-LOAD MUTUAL FUND
P R O S P E C T U S
May 1, 1996
FAM VALUE FUND is a diversified open end, no-load mutual fund that continuously
offers its shares for sale to the public. As a no-load fund, shares purchased
directly from the Fund are not subject to sales charges, commissions, or any
deferred sales charges, and there are no 12b-1 service or distribution fees.
The Fund is a separate investment series of Fenimore Asset Management Trust.
The Fund's investment objective is to maximize long term total return on
capital. The Fund seeks to achieve this objective through a "value approach"
to common stock selection. Under normal market conditions the Fund is expected
to be fully invested in common stocks and securities that are convertible
into common stocks. The Fund's investment manager is Fenimore Asset
Management, Inc.
This Prospectus has been designed to provide you with concise information that
an investor should know about the Fund before investing. Please read the
information carefully and retain this document for future reference.
A Statement of Additional Information for the Fund, dated this same date, has
been filed with the Securities and Exchange Commission and is incorporated
herein by reference. A copy is available without charge at the address and
telephone numbers shown above.
Shares of the Fund are not deposits or obligations of, or insured, guaranteed,
or endorsed by, any bank, the Federal Deposit Insurance Corporation, the
Federal Reserve Board, or any other agency, entity or person. The purchase of
Fund shares involves investment risks, including the possible loss of
principal.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
______________________________________________________________________________
Investment Advisor:
Fenimore Asset Management, Inc.
118 North Grand Street
Cobleskill, New York 12043
-1-
TABLE OF CONTENTS
Page
Fund Expenses . . . . . . . . . . . . . . . . . . . . . . 2
Illustration of an Assumed Investment
of $10,000 . . . . . . . . . . . . . . . . . . . . . . 3
Selected Financial Information . . . . . . . . . . . . . . 4
Investment Objective . . . . . . . . . . . . . . . . . . . 5
Investment Philosophy . . . . . . . . . . . . . . . . . . . 5
Investment Advisor . . . . . . . . . . . . . . . . . . . . 6
Investment Policies . . . . . . . . . . . . . . . . . . . . 6
Risk Factors and Special Considerations . . . .. . . . . . 7
How to Purchase Shares . . . . . . . . . . . . . . . . . . 7
Fund Purchases and Trade Date. . . . . . . . . . . . . . . 7
Account Minimums . . . . . . . . . . . . . . . . . . . . . 7
Net Asset Value.. . . . . . . . . . . . . . . . . . . . . 8
Wire Instructions . . . . . . . . . . . . . . . . . . . . 8
IRA and Retirement Accounts. . . . . . . . . . . . . . . . 8
Purchases Through Selected Dealers . . . . . . . . 9
Issuance of Share Certificates. . . . . . . . . . . . . . . 9
Redemption of Shares. . . . . . . . . . . . . . . . . . . 9
Shareholder Services . . . . . . . . . . . . . . . . . . . 10
FAMVest Automatic Investment Plan . . . . . . . . . . . . . 10
Telephone Numbers . . . . . . . . . . . . . . . . . . . . . 10
Fund Statements and Reports . . . . . . . . . . . . . . . 10
Systematic Withdrawal Plan . . . . . . . . . . . . . . . . 11
Fund Policies .. . . . .. . . . . . . . . . . . . . . . . 11
Signature Guarantees . . . . . . . . . . . . . . . . . . . 11
Address Changes . . . . . . .. . . . . . . . . . . . . . . 11
Distribution Options . . . . . . . . . . . . . . . . . . . 12
Transferring Ownership of Shares . . . . . . . . . . . . . 12
Backup Withholding Instructions . . . . . . . . . . . . . 12
Performance Information . . . . . . . . . . . . . . . . . 12
Federal Income Tax Status of Fund . . . . . . . . . . . . 13
General Information and Capital . . . . . . . . . . . . . 13
Fund Auditors . . . . . . . . . . . . . . . . . . . . . . 13
Distributor and Transfer Agent . . . . . . . . . . . . . 13
Shareholder Servicing Agent . . . . . . . . . . . . . . . 14
Broker Allocations . . . . . . . . . . . . . . . . . . . 14
FUND EXPENSES
The following table illustrates all expenses that a
shareholder of the Fund will incur.
SHAREHOLDER TRANSACTION EXPENSES
Sales Load Imposed on Purchases None
Sales Load Imposed on
Reinvestment of Dividends None
Exchange Fees None
Redemption Fees* None
Deferred Sales Load None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees 1.0%
12b-1 Fees 0.0%
Other Expenses 0.25%
Total Fund Operating Expenses 1.25%
The purpose of this table is to assist the investor in
understanding the various costs and expenses that
an investor in the Fund will bear directly or
indirectly.
* The Fund's custodian bank imposes a $8 wire
redemption fee on shareholders who request a wire
redemption from the fund.
EXAMPLE
You would pay the following expenses on a
$1,000 investment assuming (1) 5% annual return
and (2) redemption at the end of each time period.
1 Year 3 Years 5 Years 10 Years
$13 $40 $69 $151
This example should not be considered a
representation of past or future expenses or
performance. Actual expenses and performance
may be greater or lesser than those shown.
-2-
[LINE CHART APPEARS HERE]
Pursuant to Rule 304(a) of Regulation S-T, the following narrative description
replaces the line chart that appears on this page of the Prospectus.
ILLUSTRATION OF AN ASSUMED INVESTMENT OF $10,000
with income dividends reinvested and capital gains distributions accepted in
shares
This chart covers the period from January 2, 1987 (inception) to December 31,
1995. The Fund's results shown should not be considered as a representation
of the dividend income or capital gain or loss which may be realized from and
investment made in the Fund today. The investment return and principal value
of an investment will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their initial cost. The performance
information shown represents past historical performance and is not an
indication of the Fund's future performance.
The total value of the initial investment of $10,000 made on January 2, 1987
is $30,255 as of December 31,1995.
The average annual return for the one, five, and nine year (lifetime) periods
ended December 31, 1995 was 19.7%, 18.8%, and 13.1% respectively. Total
return quotations reflect the deduction of a proportional share of Fund
expenses on an annual basis and assume that all dividends and distributions
are reinvested when paid.
Value of shares acquired through reinvestment
of dividends from income ($1,987).
Value of shares initially acquired plus shares
accepted as capital gains distributions ($3,614).
Value of Shares
Accepted as Received Through
Year Capital Gains Reinvestment
Ended Initially Distributions of Dividends Total
Dec. 31 Acquired (cumulative) (cumulative) Value
- -----------------------------------------------------------------------------
1987 $ 8,164 $ 20 $ 100 $ 8,284
1988 10,812 27 387 11,226
1989 12,798 94 521 13,413
1990 12,096 110 577 12,783
1991 16,921 1,056 895 18,872
1992 20,562 1,839 1,204 23,605
1993 20,461 1,897 1,306 23,664
1994 21,103 2,682 1,484 25,269
1995 24,654 3,614 1,987 30,255
No adjustment has been made for any
income taxes payable by shareholders.
The results reflect the deduction of all
fees and expenses. The total amount of
capital gains distributions accepted in
shares was $2,776, the total amount of
dividends reinvested was $1191.
-3-
SELECTED FINANCIAL INFORMATION
The following table of selected financial information for the years ended
December 31, 1995, 1994, 1993 and 1992 have been audited by McGladrey & Pullen,
LLP, independent certified public accountants, whose report thereon, which is
incorporated by reference, appears in the Fund's Annual Report to Share-
holders. The information for periods prior to January 1, 1992, was audited
by other independent certified public accountants.
<TABLE>
Per share performance
(for a share outstanding
throughout each period)
<CAPTION>
1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset
value,
beginning
of year $21.04 $20.40 $20.50 $16.87 $12.06 $12.85 $10.78 $8.14 $9.97
Income from
investment operations:
Net investment income 0.21 0.12 0.09 0.10 0.08 0.08 0.08 0.29 0.07
Net realized and
unrealized gain(loss) 3.94 1.27 (0.05) 4.11 5.63 (0.77) 2.11 2.60 (1.78)
on investments
Total from investment
operations 4.15 1.39 0.04 4.21 5.71 (0.69) 2.19 2.89 (1.71)
Less distributions:
Dividends from net
investment income (0.21) (0.12) (0.09) (0.10) (0.08) (0.08) (0.06) (0.25) (1.10)
Distributions from
net realized gains (0.40) (0.63) (0.05) (0.48) (0.82) (0.02) (0.06) 0.00 (0.02)
Total distribution (0.61) (0.75) (0.14) (0.58) (0.90) (0.10) (0.12) (0.25) (0.12)
Change in net asset
value for the year 3.54 0.64 (0.10) 3.63 4.81 (0.79) 2.07 2.64 (1.83)
Net asset value,
end of year $24.58 $21.04 $20.40 $20.50 $16.87 $12.06 $12.85 $10.78 $8.14
Total Return 19.71% 6.82% 0.21% 25.08% 47.63% -5.36% 20.32% 35.50% -17.40%
Ratios/Supplemental data
Net Assets, end
of year(000) $267,158 $210,579 $220,138 $44,694 $13,973 $6,449 $4,665 $2,028 $1,172
Ratio of average
net assets of:
Expenses 1.25% 1.39% 1.39% 1.50% 1.49% 1.53% 1.51% 1.48% 1.54%
Net Investment
Income 0.92% 0.58% 0.57% 0.81% 0.66% 0.72% 0.56% 2.89% 1.47%
Portfolio turnover
rate 9.67% 2.15% 4.83% 9.84% 13.56% 9.19% 14.97% 12.40% 16.23%
</TABLE>
-4-
INVESTMENT OBJECTIVE
The investment objective of FAM VALUE FUND is to maximize long term total
return on capital. The Fund seeks to achieve this objective through a
"value approach" to common stock selection. Under normal market conditions,
the Fund is expected to be fully invested in common stocks and securities
that are convertible into common stocks. To achieve this objective it is
the intention of FAM to seek both appreciation as well as dividend income,
which constitute the two principal components of a common stock investment
return.
INVESTMENT PHILOSOPHY
FAM's investment philosophy is to seek out well-managed, financially sound
companies that it considers to be undervalued in the marketplace. Utilizing
basic Graham and Dodd investment principles, FAM is categorized as a
bottom-up value manager and strives to select companies that have reasonable
long term growth expectations.
FAM's investment philosophy is based upon the four following tenets:
1. GOOD BUSINESSES
FAM searches for businesses that are understandable, highly profitable,
and are part of industry groups that can be fairly evaluated.
2. FINANCIALLY STRONG COMPANIES
FAM uses many criteria to determine the true business worth of a company,
including cash flow and balance sheet analysis. Specifically, FAM will
be seeking to invest Fund assets in companies that may have some or all
of the following characteristics: high returns on capital, low debt
structures, strong working capital positions, and a high level of insider
ownership.
Although the objective is to select stocks with these characteristics,
FAM is aware that it is unrealistic to assume that each selection will
have all or even several of the above characteristics.
3. UNDERVALUED OPPORTUNITIES
FAM employs a "value approach" in making its common stock selections when
it manages the Fund's assets. This approach is based upon FAM's belief
that at any given point in time the securities of some companies sell at a
discount from their true business worth. Factors considered include the
company's current earnings and FAM's opinion as to its future earnings
potential. After identifying a company whose securities are determined
by FAM to have a favorable price-to-value relationship, FAM plans to
invest the Fund's assets in such securities and to hold them until their
instrinsic value becomes fully reflected in the market price of such
securities.
4. ABLE MANAGEMENT TEAMS
Some of the securities in which FAM invests are issued by companies which
may not be well known to the general public or have strong institutional
ownership or recognition. Before purchasing these securities FAM places
considerable emphasis upon evaluating management's ability through
personal conversations and/or meetings with corporate officers. Such
conversations and/or meetings are extensive and continue throughout FAM's
interest in the company and its securities. FAM also examines the amount
of stock owned by insiders, including members of management.
FAM's investment approach requires patience on the part of the investor due to
its investment philosophy which is long term in nature. The Fund is not an
appropriate investment for those whose goal is to capitalize on short term
market fluctuations or if short term market corrections would cause you to
sell your shares.
-5-
INVESTMENT ADVISOR
The Fund retains Fenimore Asset Management, Inc. ("FAM"), a New York
corporation majority-owned by Mr. Thomas O. Putnam, as its Investment Advisor
under an annual contract. FAM has been continuously offering investment
advisory and consulting services under contract since 1975 to individuals,
pension, profit sharing, IRA and Keogh plans, corporations, and non-profit
organizations generally located in a service area that includes the continental
United States. Mr. Putnam, FAM's principal investment professional, was born
in 1944, has been actively employed as an investment advisor since 1974, and
holds responsibilities for FAM's investment management and research activities.
Mr. Putnam is the sole shareholder of FAM Shareholder Services, Inc., the
Fund's shareholder servicing agent. Diane C. Van Buren, Fund co-manager, is
employed by FAM, the Fund's advisor, as Investment Management Associate. She
has been actively involved in investment and portfolio management, and research
activities since 1980. FAM employs a staff of experienced investment
professionals to manage assets for other corporate and individual clients.
Mr. Putnam, as principal officer of FAM, serves as President and Chairman of
the Board of Trustees of Fenimore Asset Management Trust. Under the terms of
the investment advisory contract, FAM receives a monthly fee from the Fund
equal to 1% per annum of the average daily market value of its net assets. The
rate is consistent with that being charged by FAM to manage its other client
accounts, but is higher than the fee charged by most investment companies.
The fee has also been established in recognition that the advisor has
agreed to assume certain expenses, including all distribution expenses of the
Fund.
The Fund and the Advisor have jointly adopted a Code of Ethics which places
certain express restrictions on the personal trading practices of personnel of
both the Fund and the Advisor. This Code of Ethics complies in all material
respects with the recommendations set forth in the 1994 Report of the Advisory
Group on Personal Investing of the Investment Company Institute. The Fund and
the Advisor have also developed procedures that provide for the administration
and enforcement of the Code through the continuous monitoring of personal
trading practices.
INVESTMENT POLICIES
Under normal market conditions the Fund will attempt to remain fully invested
in common stocks and securities that are convertible into common stocks, such
as convertible bonds and convertible preferred stocks. To the extent the Fund
invests in convertible securities, it will only acquire convertible issues
having an S&P rating of A or better. For temporary defensive purposes, the
Fund may also invest all of its assets in fixed-income securities. Generally,
the Fund only intends to invest in fixed-income securities when, in the opinion
of FAM, common stocks possess higher risks than are commensurate with the
potential rewards anticipated and fixed-income securities present a viable
alternative. Such fixed-income securities may include some or all of the
following:
(1) U.S. Treasury notes, bonds or bills, which carry the full faith and
credit of the U.S. government;
(2) securities issued by any of the agencies of the U.S. Government,
such as the Federal National Mortgage Association and the Federal
Home Loan Bank Board;
(3) deposits in or certificates issued by any member bank of the Federal
Reserve System; and
(4) corporate bonds or notes of issuing companies that FAM has analyzed
and believes to be financially sound, with such issues being either
high grade (i.e., ranked within the top three rating categories by
one or more of the recognized credit rating agencies), or non-rated
and issued by companies that FAM has analyzed and believes to be
equivalent.
The Fund may also invest in those regulated investment companies commonly
referred to as "money market funds," which restrict themselves to investments
in similar quality short term fixed securities, primarily U.S. Treasury and
government agency securities. Purchases of such money market funds will be
limited to 10% of Fund assets at market, with investment in any single fund
not to exceed 5% of Fund assets at any one time. As a result of the Fund
investing in such money market funds, shareholders of the Fund will bear
not only their proportionate share of the operating and investment advisory
expenses of the Fund, but they will also indirectly bear similar expenses of
the underlying money market funds during the period while the Fund is invested
in these funds.
-6-
RISK FACTORS AND SPECIAL CONSIDERATIONS
Under normal market conditions, the Fund is expected to be fully invested in
common stocks and securities that are convertible into common stocks.
Accordingly, an investment in the Fund is subject to the type of market risk
that is generally associated with equity investments. The value of the Fund's
investments may be affected by changes in the value of the overall stock market
such that the value of your investment upon redemption may be more or less than
the initial amount invested. In addition, investors should be aware that
there can be no assurance that the Fund will fulfill its investment objective.
HOW TO PURCHASE SHARES
FUND PURCHASES AND TRADE DATE
To establish your account, complete and sign the appropriate application and
mail it, along with your check made payable to FAM Value Fund, to:
P.O. Box 399, Cobleskill, NY 12043. Please be sure to provide your Social
Security or taxpayer identification number. Cash will not be accepted. Any
applications received not following the above guidelines will be returned.
The date on which your purchase is credited is your trade date. For purchases
made by check or Federal Funds wire and received by the close of regular
trading on the New York Stock Exchange (generally 4:00 p.m. Eastern time) the
trade date is the date of receipt. For purchases received after the close of
regular trading on the Exchange the trade date is the next business day.
Shares are purchased at the Net Asset Value ("NAV") determined on your trade
date.
The Fund reserves the right to reject purchase applications or to terminate the
offering of shares made by this Prospectus if, in the opinion of the Board of
Trustees, such termination and/or rejection would be in the best interest of
existing shareholders. In the event that your check does not clear, your
order(s) will be cancelled and you may be liable for losses or fees incurred,
or both. The FAM VALUE FUND has a policy of waiving the minimum initial
investment for Fund trustees, and employees and affiliated persons (including
family members) of the Advisor.
All applications to purchase Fund shares are subject to acceptance by the Fund
and are not binding until so accepted. The Fund does not accept telephone
orders for the purchase of shares, and it reserves the right to reject
applications in whole or in part.
ACCOUNT MINIMUMS
To begin an investment in the Fund the following minimum initial investments
must be met depending on account type. All subsequent investments to an
existing account require a minimum of $50.
To open a new account $2,000
To open a new retirement account
{IRA, SEP, or 403(b)(7)} $ 100
To open a Uniform Gift to Minors (UGMA) or
Uniform Transfer to Minors (UTMA) account $ 500
To open a new account with FAMVest* $ 500
*FAMVest is the Fund's Automatic Investment Plan which requires the
systematic addition of at least $50 per month, as described below. If you
discontinue the program before your account reaches $2,000, then the Fund
reserves the right to close your account. Please refer to "Redemption of
Shares" on page ___.
-7-
NET ASSET VALUE
The Net Asset Value ("NAV") is calculated each day at the close of regular
trading on the New York Stock Exchange and on such other days as there is
sufficient trading in the Funds' portfolio of securities to materially affect
its NAV per share. Securities in the Fund's portfolio will ordinarily be
valued based upon market quotes. If quotations are not available, securities
or other assets will be valued by a method which the Board of Trustees believes
most accurately reflects fair value. The NAV per share is determined at each
calculation by dividing the total market value of all assets, cash and
securities held, less liabilities, if any, by the total number of shares
outstanding that day.
WIRE INSTRUCTIONS
If you wish to wire funds to a new account with FAM VALUE FUND, please use
the following instructions. Investors establishing new accounts by wire should
first forward their completed Account Application to the Fund stating that the
account will be established by wire transfer and the expected date and amount
of the transfer. Further information regarding wire transfers is available
by calling (800) 932-3271. FAM VALUE FUND must have receipt of a wire transfer
no later than 4:00 P.M. in order for the purchase to be made that same business
day.
Key Bank of New York
ABA #021300077
For further credit to account #32531 000 6565
FAM Value Fund
Fund Investment for: (Name and/or Account Number)
If you wish to wire funds to an existing account with the FAM VALUE FUND,
please use the same instructions listed above.
IRA AND RETIREMENT ACCOUNTS
An individual having earned income and her or his spouse may each have one or
more Individual Retirement Accounts, or "IRAs", the number and amounts limited
only by the maximum allowed contribution per year. Existing IRA accounts may
be rolled over or transferred at any time into a new IRA account, which may be
invested in Fund shares. Chase Manhattan Bank, N.A., is empowered and agrees
to act as custodian of shares purchased. Monies deposited into an IRA account
may be invested in shares of the Fund upon the filing of the appropriate forms.
Forms establishing IRAs, SEP IRAs, and 403(b)(7) plans are available by calling
the Fund at (800) 932-3271. The annual maintenance fee for IRAs and other
retirement accounts is $15. Investors are urged to consult with a tax advisor
in connection with the establishment of retirement plans.
Monies or deposits into other types of retirement plans and/or Keogh accounts
may also be invested in Fund shares. However, the qualification and
certification of such plans must first be prearranged by the investor's own
tax specialists who would assist and oversee all plan compliance requirements.
Although the Fund will endeavor to provide assistance to those investors
interested in such plans, it neither offers nor possesses the necessary
professional skills or knowledge regarding the establishment or compliance
maintenance of retirement plans. Therefore, it is recommended that
professional counsel be retained by the investor before investing such monies
in shares of the Fund.
The minimum account requirement for all IRAs, SEP IRAs, and 403(b)(7) plans
is $100. No signature guarantee is required if a shareholder elects to
transfer an IRA, SEP IRA, or 403(b)(7) plan to another custodian or in the
event of a mandatory distribution.
-8-
PURCHASES THROUGH SELECTED DEALERS
Certain Selected Dealers may effect transactions of the Fund. The Fund may
accept orders from broker-dealers who have been previously approved by the
Fund. It is the responsibility of such broker-dealers to promptly forward
purchase or redemption orders to the Fund. Although there is no sales charge
levied directly by the Fund, broker-dealers may charge the investor a
transaction-based fee for their services at either the time of purchase or
the time of redemption. Such charges may vary amongst broker-dealers but in
all cases will be retained by the broker-dealer and not remitted to the Fund
or the Advisor. The Advisor may make payments to such companies out of its
own resources to compensate these companies for certain administrative services
provided in connection with the Fund. Shareholders who wish to transact
through a broker-dealer should contact the Fund at (800) 932-3271 for further
information.
REDEMPTION OF SHARES
Shareholders wishing to redeem shares may tender them to the Fund any business
day by executing a written request for redemption, in good order as described
below, and delivering the request by mail or by hand to the Fund, 111 North
Grand Street, P.O. Box 399, Cobleskill, NY 12043. The Fund does not offer
telephone redemptions.
Definition of Good Order: Good order means that the written redemption request
must include the following:
1. The Fund account number, name, and social security or tax i.d. number.
2. The amount of the transaction (specified in dollars or shares).
3. Signatures of all owners exactly as they are registered on the account.
4. Signature guarantees are required if the value of shares being redeemed
exceeds $10,000; or if payment is to be sent to an address other than
the address of record; or if payment is to be made payable to a payee
other than the shareholder; or if there has been an address change in
the last 30 days.
5. Certificates, if any are held, signed and containing a proper signature
guarantee.
6. Other supporting legal documentation that might be required, in the case
of retirement plans, corporations, trusts, estates and certain other
accounts.
Shareholders requesting redemption proceeds to be wired from the Fund will
incur a $8 wire fee charged by the Fund's custodian.
Shareholders may sell all or any portion of their shares on any such business
day that NAV is calculated. Such shares will be redeemed by the Fund at the
next such calculation after such redemption request is received and accepted
by the Fund. When a redemption occurs shortly after a recent purchase made
by check, FAM VALUE FUND may hold the redemption proceeds beyond 7 days but
only until the purchase check clears, which may take up to 15 days or more.
If you anticipate redemptions soon after you purchase your shares, you are
advised to wire funds to avoid delay.
-9-
The Fund reserves the right, however, to withhold payment up to seven (7) days
if necessary to protect the interests and assets of the Fund and its
shareholders. In the event the New York Stock Exchange is closed for any
reason other than normal weekend or holiday closing of if trading on that
exchange is restricted for any reason, or in the event of any emergency
circumstances as determined by the Securities and Exchange Commission, the
Board of Trustees shall have the authority and may suspend redemptions or
postpone payment dates accordingly.
SHAREHOLDER SERVICES
FAMVEST
AUTOMATIC INVESTMENT PLAN
The Fund offers FAMVest, an automatic investment plan whereby the Fund is
authorized and instructed to charge the regular bank checking account of a
shareholder on a regular basis to provide systematic additions to the Fund
account of the shareholder. The bank at which the shareholder checking
account is maintained must be a member of the Automated Clearing House (ACH).
While there is no charge to shareholders for this service, a charge of $10.00
may be deducted from a shareholder's Fund account in case of returned items.
NOTE: Individual Retirement Account ("IRA") contributions made through
FAMVest are assumed to be current year contributions. A shareholder's FAMVest
may be terminated at any time without charge or penalty by the shareholder
or the Fund.
TOLL-FREE TELEPHONE NUMBERS
AND AUTO-ACCESS LINE
For your convenience, FAM Value Fund offers two toll-free numbers.
Live Line (800) 932-3271
For shareholders who prefer the "human" touch, our live line is answered
personally by an associate ready to assist you with your call. Our hours of
operation are Monday through Friday 8:30 a.m. to 5:00 p.m. Eastern Standard
time.
Auto-Access Line (800) 453-4392
For shareholders who prefer the convenience of automation, our Auto-Access
line offers:
*24 - hour a day availability
*latest closing price
*automatic access to individual account balances and transactions
NOTE: FAM Value Fund does not allow telephone purchases or redemptions.
FUND STATEMENTS AND REPORTS
The Fund will mail an updated account statement anytime there is a transaction
in your account with the exception of automatic transactions. Additionally,
account statements are mailed to all shareholders on a quarterly basis.
Financial reports of the Fund are mailed to all shareholders twice a year as
of June 30 and December 31.
-10-
SYSTEMATIC WITHDRAWAL PLAN
For your convenience you may elect to have automatic periodic redemptions from
your account. Shareholders who wish to participate in the sytematic withdrawal
plan must complete the appropriate form and return to the fund 30 days prior
to the first scheduled redemption.
FUND POLICIES
SIGNATURE GUARANTEES
For our mutual protection, signature guarantees may be required on certain
written transaction requests. A signature guarantee verifies the authenticity
of your signature and may be obtained from "eligible guarantor institutions".
Eligible guarantor institutions include (1) national or state banks, savings
associations, savings and loan associations, trust companies, savings banks,
industrial loan companies and credit unions; (2) national securities exchanges,
registered securities associations and clearing agencies; (3) securities
broker-dealers which are members of a national securities exchange or a
clearing agency or which have minimum net capital of $100,000; or (4)
institutions that participate in the Securities Transfer Agent Medallion
Program ("STAMP") or other recognized signature medallion program.
A signature guarantee cannot be provided by a notary public.
Signature guarantees will be required under the following circumstances:
1. Redemption of Shares IF:
* the value of shares being redeemed exceeds $10,000
* payment is requested payable to a payee other than the shareholder
of record
* payment is to be sent to an address other than the address of record
* an address change accompanies the redemption request or there has
been a change of address on the account during the last 30 days
* the shares are represented by a negotiable stock certificate
2. Transferring of Ownership and/or Account Name Changes
ADDRESS CHANGES
You may notify FAM VALUE FUND of changes in your address of record either by
writing us or calling our Shareholder Services Line. Because your address of
record impacts every piece of information we send you, please notify us
promptly. To protect you and FAM VALUE FUND, all requests to redeem shares,
the proceeds of which are to be paid by check, made within 30 days of our
receipt of an address change (including redemption requests that are
accompanied by an address change) must be made in writing, signed by each
person in whose name the shares are owned, and all signatures must be
guaranteed.
-11-
DISTRIBUTION OPTIONS
Investors who want dividend and/or capital gains distributions sent to them
in cash rather than invested in additional shares must arrange this by making
a request to the Fund, such written request to include all necessary
documentation to the complete satisfaction of the Fund. Unless investors
request cash distributions in writing at least 7 business days prior to the
distribution, or on the Account Application, all dividends and other
distributions will be reinvested automatically in additional shares of the
Fund.
TRANSFERRING OWNERSHIP OF SHARES
You may transfer ownership of your shares to another person or organization
by written instructions to FAM VALUE FUND, signed by all owners and with
signature guaranteed. If the shares are represented by a negotiable stock
certificate, the certificate must be returned with your transfer instructions.
BACKUP WITHHOLDING INSTRUCTIONS
Shareholders are required by law to provide the Fund with their correct Social
Security or other Taxpayer Identification Number ("TIN"), regardless of whether
they file tax returns. Failure to do so may subject a shareholder to
penalties. Failure to provide a correct TIN or to check the appropriate boxes
on the Account Application and to sign the shareholder's name could result in
backup withholding by the Fund of an amount of income tax equal to 31% of
distributions, redemptions, exchanges and other payments made to a share-
holder's account. Any tax withheld may be credited against taxes owed on a
shareholder's federal income tax return.
If a shareholder does not have a TIN, the shareholder should apply for one
immediately by contacting the local office of the Social Security
Administration or the IRS. Backup withholding could apply to payments made
to a shareholder's account while awaiting receipt of a TIN. Special rules
apply for certain entities. For example, for an account established under
the Uniform Gift to Minors Act, the TIN of the minor should be furnished.
If a shareholder has been notified by the IRS that the shareholder is subject
to backup withholding because the shareholder failed to report all interest
and dividend income on his, her or its return, and the shareholder has not
been notified by the IRS that such withholding should cease, the shareholder
should complete the Account Application accordingly.
If a shareholder is exempt from backup withholding, the shareholder should
provide proof of such exemption in a form acceptable to the Fund. Exempt
recipients include: certain corporations, certain tax-exempt entities, certain
tax-exempt pension plans and IRAs, governmental agencies, financial
institutions, registered securities and commodities dealers and others.
Payments reported by FAM Value Fund that omit your Social Security or Tax
Identification Number will subject FAM Value Fund to a penalty of $50. This
$50 charge will be deducted from your account if you fail to provide the
certification by the time the report is filed. The penalty charge is not
refundable.
PERFORMANCE INFORMATION
The Fund may include its total return in advertisements or reports to share-
holders or prospective investors. Quotations of average returns will be
expressed in terms of average annual compounded rate of return on a
hypothetical investment in the Fund for the life of the Fund, and will assume
that all dividends and distributions are reinvested when paid. Total return
may be expressed in terms of the cumulative value of an investment in the
Fund at the end of a defined period of time.
-12-
FEDERAL INCOME TAX STATUS OF FUND
It is intended that the Fund will qualify for and elect the special tax
treatment afforded a "regulated investment company" under Subchapter M of
the Internal Revenue Code. To qualify the Fund generally must, among other
things: (1) distribute to its shareholders at least 90% of its investment
company taxable income at least annually; (2) invest and reinvest so that less
than 30% of its gross income is derived from sales of securities held less
than three months; and (3) invest its portfolio so that, at the end of each
fiscal quarter, certain asset diversifications tests are satisfied.
In general, when all or a portion of the Fund's income and gains are paid out
to shareholders such distributions are construed to be dividends in the hands
of shareholders, taxable in most instances as ordinary income. Such
distributions are taxable to shareholders whether received as cash or as
aditional shares. Dividends designated as capital gain dividends are taxed
to shareholders as long term capital gains, whether received as cash or as
additional shares. Certain dividends declared in October, November, or
December of a calendar year and payable to shareholders of record in such a
month are taxable to shareholders as though received on December 31st of that
year if paid to shareholders during January of the following calendar year.
The information you will require in order to correctly report the amount and
type of dividends and distributions on your tax return will be provided by
the Fund early each calendar year, sufficiently in advance of the date for
filing your tax return.
For additional infromation relating to taxes, see "Federal Tax Status" in the
Statement of Additional Information.
GENERAL INFORMATION AND CAPITAL
FAM Value Fund is a series of Fenimore Asset Management Trust, which was
organized as a Massachusetts Business Trust under the laws of the Commonwealth
of Massachusetts on June 18, 1986. The capitalization of Fenimore Asset
Management Trust consists of an unlimited number of shares of beneficial
interest. When issued, each share or fraction thereof is fully paid, non-
assessable, tranferable without restriction, and redeemable. As a
Massachusetts business trust, the Fund is not required to hold annual meetings
of shareholders. Trustees, however, will hold special meetings as required
or as deemed desirable for the election of trustees or the possible change of
fundamental policies. Under the provisions of the Fund's Declaration of Trust
all shares are of the same class, and each full share has one vote. All share-
holder inquiries should be directed to FAM VALUE FUND, at the address and
telephone number listed on the cover of this Prospectus.
FUND AUDITORS
McGladrey & Pullen, LLP, 555 Fifth Avenue, New York, NY 10017 has been
appointed as the independent certified public accountant and auditor for the
Fund.
DISTRIBUTOR AND TRANSFER AGENT
Fenimore Asset Management Trust, 111 North Grand Street, P.O. Box 399,
Cobleskill, NY 12043, telephone number (800) 932-3271, acts as distributor of
all shares issued and acts as Transfer Agent for all shares outstanding of
the Fund.
-13-
SHAREHOLDER SERVICING AGENT
FAM Shareholder Services, Inc. serves as the Fund's shareholder servicing
agent and, as such, provides various services in connection with the
establishment and maintenance of shareholder accounts. For its services,
FAM Shareholder Services, Inc. receives a monthly fee of $1.75 per shareholder
account. FAM Shareholder Services, Inc. also serves as fund accounting agent
for the Fund and provides various accounting services to the Fund at an
annual rate of 0.025% of the Fund's average daily net assets.
BROKER ALLOCATIONS
The placement of orders for the purchase and sale of portfolio securities will
be made under the control of the Advisor of the Fund, subject to the overall
supervision of the Board of Trustees. All orders are placed at the best price
and best execution obtainable, except that the Fund shall be permitted to
select brokers who provide economic, corporate and investment research services
if in the opinion of the Fund's management and Board of Trustees, such
placement serves the best interests of the Fund and its shareholders.
Commissions paid to firms supplying such research may include the cost of such
services. It is the policy of Fenimore Asset Management Trust, as approved by
the Board of Trustees, to combine orders of the Fund with those of the
Advisor's clients, where possible and in a manner designed to be equitable to
each party.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
for
FAM VALUE FUND
111 North Grand Street, P.O. Box 399, Cobleskill, NY 12043
Telephone Number (800)-932-3271
A NO-LOAD MUTUAL FUND
May 1, 1996
FAM VALUE FUND [the "Fund"], is an open-end diversified,
no-load management investment company and a series of
Fenimore Asset Management Trust, a Massachusetts Business
Trust.
This Statement of Additional Information is not a
Prospectus but rather should be read in conjunction with
the Prospectus dated the same date. A copy may be obtained
without charge from the Fund by calling or writing its
corporate offices at the address and telephone number
herein noted.
Table of Contents
Investment Objective and Policies 2
Investment Restrictions 3
History and Background of Investment
Advisor 5
Board of Trustees and Officers 7
Brokerage Allocations 8
Net Asset Value Calculation 8
Purchase of Shares 9
Redemption of Shares 10
Performance Information 11
Financial Statements 11
Federal Tax Status 12
Appendix 13
Investment Advisor:
Fenimore Asset Management, Inc.
118 North Grand Street
Cobleskill, NY 12043
-1-
INVESTMENT OBJECTIVE AND POLICIES
It is the intention of the Fund to attempt to maximize total return
for its shareholders by investing primarily in equities or
equivalents. Normally investments will be concentrated in common
stocks unless the stock market environment has risen to a point
where the advisor to the Fund, Fenimore Asset Management, Inc.,
("FAM"), can no longer find securities that have been determined by
FAM to be undervalued. During such periods investments will be
made in fixed-income investments until such time as more attractive
common stocks can be found for purchase.
It is the opinion of FAM that maximum total return is achievable
when common stocks can be purchased near to, or at, a discount from
their true business worth. Specifically, FAM will be seeking to
invest Fund assets in companies that may have some or all of the
following characteristics: (a) low price-to-earnings multiples
relative to the market as a whole, based upon current and/or
potential future earnings of the company; (b) high total returns on
capital and with low debt structures; and (c) sell at a market
price per share that is near or at a discount to the per share book
value -- an accounting measure of economic worth. Although the
objective is to select stocks with these characteristics, FAM is
aware that it is unrealistic to assume that each selection will
have all or even several of the above characteristics.
FAM believes that the success of a stock that has some of the above
characteristics is dependent upon and invariably a reflection of
the quality of management. Therefore, FAM spends time in an
attempt to assess management's ability prior to making a commitment
to its shares with Fund assets. The assessment may include an
analysis of historical financial achievements of the company,
direct discussions with management by telephone or in person,
visitations to the company, conversations with security analysts
who actively follow the company for investment brokerage firms, and
discussions with competitors, suppliers, and customers of the
company. While FAM feels this assessment technique to be clearly
instrumental to the success of the investment, it should be
recognized that judgments made by FAM are purely subjective in
nature. Therefore, there can be no assurance that FAM will be
successful in achieving the investment objectives for the Fund.
It is FAM's belief that the objective of maximizing total return to
shareholders can only be achieved consistently over a long
investment horizon. Typically, this will mean that a stock may be
held for a three-to-five year period or longer if FAM, by its own
determination, feels that the recognition of true business worth
has not yet been attained in the stock's current market quotation.
Thus, the Fund serves little purpose for investors who wish to take
advantage of short term fluctuations in its net asset value per
share.
Consistent with FAM's objective of seeking to maximize total return
for Fund shareholders, FAM from time to time may also choose to
invest some or all of its assets in fixed-income investments of the
types more fully described in the Fund's Prospectus dated this same
date. Such investments will be purchased and held during periods
when FAM is unable to find stocks that it believes have return
expectations commensurate with the risks that must be assumed by
their continued retention. (More detailed information regarding
certain types of fixed investment restrictions is contained in the
Fund's Prospectus on page 4 under the section entitled
"Investment Restrictions").
-2-
FAM recognizes that while the Fund remains small in size FAM may
have greater flexibility in achieving its objective of maximizing
total return. As the Fund grows in size, it may become more
difficult for FAM to find securities to invest in that meet the
objectives of the Fund. This may also occur during periods when
the stock market in general has been rising for a long period of
time. Therefore, the Fund has reserved unto itself the right to
limit its asset size by discontinuing sales of its shares at any
time. The Board of Trustees of the Fund may suspend sales whenever
in its collective wisdom it believes it necessary in order for the
Fund to continue to adhere to its stated objective, or that for
other reasons it would be in the best interests of Fund
shareholders to do so. While sales are suspended, existing
shareholder accounts will be able to continue to reinvest their
dividends and will be able to continue to redeem their shares.
It should be clear to investors in Fund shares that FAM believes
income is important in maximizing total return. The Fund's advisor
is aware that annual distributions of capital gains and
dividend/interest income earned on shares may result in a
shareholder paying additional federal, state and/or local income
taxes. (See Federal Tax Status on Page 15). Fund shareholders
should understand that when FAM makes investment decisions, such
tax considerations will be secondary to its objective of attempting
to maximize total return. This policy is partly based upon a belief
by FAM that such taxes and tax rates have little or no bearing on
an individual company's attractiveness as an investment. It is
also founded on FAM's belief that tax rates in general, are, or
should be, of declining importance to the investment
decision-making process, viewed in its widest sense. Tax deferred
portfolios, like IRA and pension monies, are ideally suited for
investment in shares of the Fund for these reasons.
At the present time the Fund has no authority to write, buy or sell
options or futures against its share positions and any change in
this investment approach must first be obtained from shareholders
by consent of a majority of the votes cast. It has no plans at
this time to deal in the options markets or to seek authorization
from shareholders to do so.
INVESTMENT RESTRICTIONS
The Fund has adopted certain investment restrictions which cannot
be changed or amended unless approved by the vote of a majority of
its outstanding shares as set forth in its By-laws and in
accordance with requirements under the Investment Company Act of
1940. Accordingly, the Fund will not:
(A) Invest in the purchase and sale of real estate.
(B) Invest in commodities or commodity contracts, restricted
securities, mortgages, or in oil, gas, mineral or other
exploration or development programs.
(C) Borrow money, except for temporary purposes, and then only in
amounts not to exceed in the aggregate 5% of the market value
of its total assets taken at the time of such borrowing.
(D) Invest more of its assets than is permitted under regulations
in securities of other registered investment companies, which
-3-
restricts such investments to a limit of 5% of the Fund's
assets in any one registered investment company, and 10%
overall in all registered investment companies, in no event to
exceed 3% of the outstanding shares of any single registered
investment company.
(E) Invest more than 5% of its total assets at the time of purchase
in securities of companies that have been in business or been
in continuous operation less than 3 years, including the
operations of any predecessor.
(F) Invest or deal in securities which do not have quoted markets.
(G) Own more than 10% of the outstanding voting securities of any
one issuer or company, nor will it, with at least 75% of its
total assets, invest more than 5% of its assets in any single
issue, valued at the time of purchase. This restriction shall
not be applicable for investments in U.S. government or agency
securities.
(H) Invest more than 25% of its assets valued at the time of
purchase in any one industry or similar group of companies,
except U.S. government securities.
(I) Maintain margin accounts, will not purchase its investments on
credit or margin, and will not leverage its investments, except
for normal transaction obligations during settlement periods.
(J) Make any investment for the purpose of obtaining, exercising or
for planning to exercise voting control of subject company.
(K) Sell securities short.
(L) Underwrite or deal in offerings of securities of other issuers
as a sponsor or underwriter in any way. (Note: The Fund may
be deemed an underwriter of securities when it serves as
distributor of its own shares for sale to or purchase from its
shareholders.)
(M) Make loans to others or issue senior securities. For these
purposes the purchase of publicly distributed indebtedness of
any kind is excluded and not considered to be making a loan.
In regard to the restriction marked as item (D) above, the Fund
plans to utilize computerized cash management services offered by
its custodian, which services presently include reinvesting
overnight and short term cash balances in shares of other
registered investment companies, better known as "money market
funds", whose primary objective is safety of principal and maximum
current income from holding highly liquid, short term, fixed
investments, principally U.S. government and agency issues. The
Fund will not be acquiring such shares as permanent investments but
rather will be utilizing such services solely for convenience and
efficiency as it tries to keep short term monies invested at
interest only until such time as more permanent reinvestment can
practically be made in the ordinary course of business. In any
case, the Fund shall not so invest a greater percentage of its
assets than is permitted by regulation, which is presently 5% of
its total assets in any single fund nor more than 10% of its total
assets in funds overall.
-4-
HISTORY AND BACKGROUND OF INVESTMENT ADVISOR
The investment advisor to the Fund is Fenimore Asset
Management, Inc., ("FAM"). The company is a New York
corporation presently in business and practicing as an
"Investment Advisor" and registered under the Investment
Advisors Act of 1940 with the Securities and Exchange
Commission and with the New York State Attorney General. FAM
is majority owned by Mr. Thomas O. Putnam, its principal
officer, who is also the principal officer and a trustee of the
Fund. FAM was incorporated November 20, 1974, and has been
continuously offering investment advisory services since the
date of its formation under the direction and control of Mr.
Putnam. The principal activity of FAM since 1974 has been to
provide investment advisory and consulting services under
contract to individuals, pension, profit-sharing, IRA and
Keogh retirement plans, corporations, and non-profit
organizations generally located in the service area that
includes the continental U.S.
Mr. Thomas O. Putnam, FAM's principal investment professional,
has been employed or active as an investment advisor since
1974, managing investment accounts for clients. He has held
responsibilities as President and Director of FAM's investment
management and research activities. Mr. Putnam completed his
undergraduate studies at the University of Rochester,
Rochester, NY, from which he earned a Bachelor of Arts Degree
in Economics in 1966. He completed graduate work at Tulane
University, New Orleans, Louisiana, from which he received an
MBA in 1968. Diane C. Van Buren, Fund co-manager, is employed
by FAM, the Fund's advisor, as Investment Management
Associate. She has been actively involved in investment and
portfolio management, and research activities since 1980. FAM
employs a staff of experienced investment professionals to
manage assets for other corporate and individual clients.
Since 1974, FAM, under the control and supervision of Mr.
Putnam, has utilized a value investment approach for each
client and/or each account. In the opinion of Mr. Putnam,
maximum total return from investments will result if companies
can be purchased at a significant discount from what he views
as their true business worth. In this regard a company is
researched almost as if the entire company could be purchased
at current stock market prices. Although it will never be the
intention of the Fund to purchase controlling interests in any
such company, it is Mr. Putnam's belief that this fundamental
valuation approach removes emotionality from the investment
decision-making process and minimizes the long term risk of the
investment. Fundamental to this approach is the seeking of
securities of companies that have: (1) demonstrated records
of above-average growth of sales and earnings over the past 5
to 10 year span and are selling at a price which in the view
of Mr. Putnam is at a discount from the true business worth of
the company; (2) become severely depressed in the market
because of adverse publicity and are thus selling at a deep
discount to the perceived future potential value of the
company; (3) the capability of achieving accelerated growth of
earnings and the current price understates this potential.
Future values may be 100% or more of the current price of the
stock and recognition of these values may take two to five
years or longer to be realized in the stock market.
It is the intention of Mr. Putnam to advise the Fund to
-5-
attempt to follow a similar, though not exactly identical,
approach. The primary difference is expected to be that the
Fund will be freer to sell shares of issues that have achieved
price targets and intends to do so, regardless of tax
implications. Investment portfolios for individuals tend to
be more constrained by such tax considerations under existing
tax laws, thus turnover is most often at a rate that is well
below published investment industry averages.
FAM will not invest assets of any other managed account in
shares of the Fund except as directed in writing by a person
unaffiliated to the Fund or to FAM, having authority to make
such direction. Furthermore, FAM, its officers, directors and
affiliated persons, will refrain from expressing any opinion
to any other person or persons over whose assets FAM has
investment advisory responsibilities and for which services it
receives compensation. FAM, as investment advisor to the
Fund, renders such services under contract that provides for
payment to FAM of a fee, calculated daily and paid monthly, at
the rate of 1% per annum of the Fund's assets, which rate is
consistent with that being charged by FAM to manage its other
client accounts but which is higher than the fee charged by
most other investment companies. This contract is subject to
the approval annually by the Fund's Board of Trustees and is
terminable upon 30 days written notice, one party to the
other.
The Fund is responsible for the fees of independent
accountants, brokerage fees and the cost of a surety bond, as
required by the Investment Company Act of 1940. Expenses of
"interested" trustees shall always remain the responsibility
of the investment advisor. The Fund is responsible for the
cost of its operation, including routine administrative
expenses of mailing proxies and shareholder notices/reports,
computer services and for record-keeping the shareholder
ledgers and books. All employees of the investment advisor
who perform duties for the Fund shall remain employees of the
investment advisor, who shall bear all employment costs of
such staff. If FAM ceases to operate for any reason or
assigns the contract, such contract is automatically
terminated. It is anticipated that total costs of operation
will be restricted by regulations in those states in which the
Fund anticipates it will seek to be registered. At present
this maximum fee restriction is believed to be 2 1/2% on the
first $30 million of average net assets of the company, 2% of
the next $70 million, and 1 1/2% of the remaining average net
assets of the company.
-6-
BOARD OF TRUSTEES
The names of Board of Trustees of the Fund, and their
respective duties and affiliations are as follows:
Past Five Year
Primary Occupation;
Name, Address, Business
and Age Affiliations Position with the Fund
________________________________________________________________________
Thomas O. Putnam* Chairman, Treasurer Chairman of Board
P. O. Box 310 FAM President
Cobleskill, NY 12043
Age: 51
Diane C. Van Buren* Investment Management Secretary
P. O. Box 310 Associate, FAM Trustee
Cobleskill, NY 12043
Age: 38
John W. Krueger, CLU* General Agent, Trustee
P.O. Box 389 Krueger Ross Agency:
Albany, NY 12201 Director, FAM
Age: 57
Bernard H. Zais, CLU President, Zais Group Trustee
P.O. Box 630
Colchester, VT 05446
Age: 80
Roger A. Hannay President, Trustee
2440 Airport Rd. Hannay Reels, Inc.
Westerlo, NY 12193
Age: 53
Kenneth E. Burhmaster Chairman, Trustee
201 Mohawk Ave. First National Bank
Scotia, NY 12302 of Scotia
Age: 80
*Interested persons as defined under the 1940 Act.
Officers and Trustees of the FAM Value Fund own less than 1% of
the Fund's shares outstanding.
Trustees of the Fund not affiliated with FAM receive from the Fund
a fee of $500 for each Board of Trustees meeting, $1,000 annual
retainer, $200 for each committee meeting, and are reimbursed for
all out-of-pocket expenses relating to attendance at such
meetings. Trustees who are affiliated with FAM do not receive
compensation from the Fund.
For the fiscal year ended December 31, 1995, the Trustees received
the following compensation from the Fund and from certain other
investment companies (if applicable) that have the same investment
advisor as the Fund or an investment advisor that is an affiliated
person of the Fund's investment advisor:
-7-
Name of Aggregate Pension or Est. Annual Total
Trustee Compensation Retirement Benefits upon Compensation
from the Benefits Retirement from Registrant
Fund Accrued as and Fund
Part of Fund Complex Paid to
Expenses Trustees
_____________________________________________________________________________
Thomas O.
Putnam $0 $0 $0 $0
John W.
Krueger $3,500 $0 $0 $3,500
Bernard
H. Zais $3,900 $0 $0 $3,900
Roger A.
Hannay $3,900 $0 $0 $3,900
Diane C.
Van Buren $0 $0 $0 $0
BROKERAGE ALLOCATIONS
It is the Fund's policy to allocate brokerage business to the
best advantage and benefit of its shareholders. The President
of the Fund and FAM shall be responsible for directing all
transactions through brokerage firms of its choice. Further to
that policy, all securities transactions are made so as to
obtain the most efficient execution at the lowest transaction
cost. Nothing in this policy, however, is to be construed to
prohibit the Fund or FAM from allocating transactions to firms
whose brokerage charges may include the cost of providing
investment advisory or research or other legally permitted
services which the Fund and FAM deem to be necessary and/or
valuable to the successful management of its assets. Each buy
or sell order will be placed according to the type, size and
kind of order involved and as each condition may demand, so as
to attempt to secure the best result for the Fund and its
shareholders, all factors considered. For the fiscal years
ending December 31, 1995, 1994, and 1993, respectively, aggregate
commissions paid totalled $28,512, $37,604, and $390,712.
NET ASSET VALUE CALCULATION
The net asset value per share is computed by dividing the
aggregate market value of Fund assets daily, less its
liabilities, by the number of portfolio shares outstanding.
Portfolio securities are valued and net asset value per share
is determined as of the close of business on the New York Stock
-8-
Exchange ("NYSE"), which currently is 4:00 p.m. (New York City
time), on each day the New York Stock Exchange is open and on
any other day in which there is a sufficient degree of trading
in Fund portfolio securities that the current net asset value
per share might be materially affected by changes in portfolio
securities values. NYSE trading is closed weekends and
holidays, which are listed as New Years Day, President's Day,
Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving, and Christmas.
Portfolio securities listed on an organized exchange are valued
on the basis of the last sale on the date the valuation is made.
Securities that are not traded on that day, and for which market
quotations are otherwise readily available, and over-the-counter
securities for which market quotations are readily available,
are valued on the basis of the bid price at the close of
business on that date. Securities and other assets for which
market quotations are not readily available or have not traded
are valued at fair value as determined by procedures established
by the Board of Trustees. Notwithstanding the above, bonds and
other fixed-income securities may be valued on the basis of
prices determined by procedures established by the Board of
Trustees if it is the belief of the Board of Trustees that such
price determination more fairly reflects the fair value of such
securities. Money market instruments are valued at amortized
cost which approximates market value unless the Board of
Trustees determines that such is not a fair value.
The sale of shares of the Fund will be suspended during periods
when the determination of its net asset value is suspended
pursuant to rules or orders of the Securities and Exchange
Commission, or may be suspended by the Board of Trustees
whenever in its sole judgment it believes it is in the best
interest of shareholders to do so.
PURCHASE OF SHARES
To begin an investment in the Fund the following minimum initial
investments must be met depending on account type. All
subsequent investments to an existing account require a minimum
of $50.
To open a new account $2,000
To open a new retirement account
{IRA, SEP, or 403(b)(7)} 100
To open a Uniform to Gift to Minors (UGMA) or 500
Uniform Transfer to Minors (UTMA) account
To open a new account with FAMVest* 500
To begin an investment in the Fund complete the application form
and sign it correctly, then deliver it by mail or in person to
the Fund's principal office in Cobleskill, New York. A copy of
the application form is available to prospective investors upon
request to Fenimore Asset Management Trust, which is the sole
-9-
distributor of Fund shares. The offering price of such
purchases will be at the net asset value per share next
determined after receipt by the Fund of a valid purchase order.
The date on which the application is accepted by the Fund and
the net asset value determination at the close of business on
that date shall determine the purchase price and shall normally
be the purchase date for shares. Payment for shares purchased
shall be by check or receipt of good funds by the Fund, which
reserves the right to withhold or reject requests for purchases
for any reason, including uncollectible funds. Cash will not
be accepted. In the event of a cancellation of any purchase due
to uncollectible funds, the purchaser shall be liable for all
administrative costs incurred and for all other losses or
charges for such invalid transfer and/or purchase.
Subsequent Purchases: Purchases of shares made subsequent to
an initial purchase may be made by mail to the Fund at its
current address. All subsequent purchases must be made in
amounts of no less than $50, and such amounts shall be due and
payable in good funds to the Fund on the purchase date.
Reinvestment: The Fund will automatically reinvest all dividend
distributions to shareholders in additional shares of the Fund
at net asset value as next determined as of the close of
business on the payment date of such dividend distribution,
unless otherwise instructed by the shareholder in writing prior
to the record date for such distributions.
Fractional Shares: When share purchases or redemptions are made
or when cash is requested by a shareholder, shares will be
issued or redeemed respectively, in fractions of a share,
calculated to the third decimal place. (Example: $2,000
invested in shares at a net asset value of $11.76 per share will
purchase 170.068 shares.)
REDEMPTION OF SHARES
Shareholders may sell all or a portion of their shares to the
Fund on any day that NAV is calculated and such redemptions will
be made in the manner as described in detail in the Fund's
Prospectus. All redemptions are subject to the terms and
conditions as set forth therein.
All shareholders are entitled to have share certificates issued,
if desired. Due to the additional work involved with issuing
certificates and the added costs involved, shareholders are
encouraged to have all shares held in an account maintained by
the Fund itself, as is the custom within the mutual fund
industry. If share certificates are issued, however, and are
held by a shareholder wishing to sell shares, it is required
that such share certificates first be delivered in person or by
mail to the Fund in good form for transfer, signed and
-10-
containing a proper signature guarantee by an eligible guarantor
institution, before redemption can take place and payment for
shares made to any redeeming shareholder. The Fund shall have
the right to refuse payment to any registered shareholder until
all legal documentation necessary for a complete and lawful
transfer is in the possession of the Fund or its agents, to the
complete satisfaction of the Fund and its Board of Trustees.
PERFORMANCE INFORMATION
The Fund may, from time to time, include its total return in
advertisements or reports to Shareholders or prospective
investors. Quotations of average annual total return for the
Fund will be expressed in terms of the average annual compounded
rate of return of a hypothetical investment in the Fund over
periods of one, five and ten years (up to the life of the Fund)
calculated pursuant to the following formula: P(1 + T)n = ERV
(where P = a hypothetical initial payment of $1,000, T = the
average annual total return, n = the number of years, and ERV
= the ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the period). All total return figures
reflect the deduction of a proportional share of Fund expenses
on an annual basis, and assume that all dividends and
distributions are reinvested when paid. The Fund's average
annual total return for the one-, five-, and nine-year
(lifetime) periods ended December 31, 1995 was 19.7%, 18.8%, and
13.1% respectively.
Performance information for the Fund may be compared, in reports
and promotional literature, to: (i) the Standard & Poor's 500
Stock Index, the Dow Jones Industrial Average, or other
unmanaged indices so that investors may compare the Fund's
results with those of a group of unmanaged securities widely
regarded by investors as representative of the securities market
in general; (ii) other groups of mutual funds tracked by Lipper
Analytical Services, a widely used independent research firm
which ranks mutual funds by overall performance, investment
objectives and assets, or tracked by other services, companies,
publications, or persons who rank mutual funds on overall
performance or other criteria; and (iii) the Consumer Price
Index (measure for inflation) to assess the real rate of return
from an investment in the Fund. Unmanaged indices may assume
the reinvestment of dividends but generally do not reflect
deductions for administrative and management costs and expenses.
Performance information for the Fund reflects only the
performance of a hypothetical investment in the Fund during the
particular time period on which the calculation are based.
Performance information should be considered in light of the
Fund's investment objective and policies, characteristics and
quality of the portfolio and the market conditions during the
given time period, and should not be considered as a
representation of what may be achieved in the future.
FINANCIAL STATEMENTS
The Financial Statements of the Fund included in the Fund's 1995
Annual Report to Shareholders are incorporated by reference into
this Statement of Additional Information. Copies of the Financial
-11-
Statements may be obtained upon request and without charge from
the Fund at the address and telephone provided on the cover of this
Statement of Additional Information.
FEDERAL TAX STATUS
It is intended that the Fund will qualify for and elect the
special treatment afforded a "regulated investment company"
under Subchapter M of the Internal Revenue Code. In any fiscal
year in which the Fund so qualifies, the Fund (but not its
shareholders) will be generally relieved of paying Federal
income taxes on its income and gains it pays as dividends to
shareholders. In order to avoid a 4% Federal excise tax, the
Fund intends to distribute each calendar year substantially all
of its income and gains. Dividends paid to shareholders by the
Fund are in effect distributions of income and gains. Capital
gains realized by the Fund that are distributed as dividends to
shareholders are likewise taxable to shareholders, and all
dividends received by shareholders, regardless of whether a
shareholder chooses to take them in cash or as additional
shares, are normally subject to tax. Distributions by the Fund
to its shareholders of its net capital gain (the excess of net
long-term capital gain over net short-term capital loss), if
any, that are designated as capital gains dividends are taxable
as long-term capital gains whether distributed to shareholders
in cash or whether distributed in additional shares.
From the standpoint of the shareholder who sells shares back to
the Fund as a redemption, the tax treatment will depend upon
whether or not the investment is considered a capital asset in
the hands of the shareholder. In most cases this would be true,
and in that event, a sale by a shareholder of shares will be
treated as a capital gain or loss for tax purposes. Advice from
shareholder's own tax counsel is recommended regarding the
taxability of distributions and redemptions. For tax purposes
the Fund shall endeavor to notify all shareholders near the
beginning of each calendar year of all amounts and types of
dividends and distributions paid out during the prior calendar
year.
The preceding discussion relates only to Federal income taxes.
Distributions may also be subject to additional state, local and
foreign taxes depending on each shareholder's particular
situation. Non-U.S. shareholders may be subject to U.S. tax
rules that differ significantly from those summarized above.
This discussion does not purport to deal with all of the tax
consequences applicable to the Fund or shareholders.
Shareholders are advised to consult their own tax advisers with
respect to the particular tax consequences to them of an
investment in the Fund.
-12-
APPENDIX
Bond Rating Categories as Defined by Standard & Poor's (S & P)
are quoted in part and inserted herein for the information of
potential investors in the Fund as a reference as follows:
An S&P corporate or municipal debt rating is a current
assessment of the creditworthiness of an obligor with respect
to a specific obligation. This assessment may take into
consideration obligers such as guarantors, insurers or lessees.
The debt rating is not a recommendation to purchase, sell or
hold a security inasmuch as it does not comment as to market
price or suitability for a particular investor.
The ratings are based on current information furnished by the
issuer or obtained by S&P from other sources it considers
reliable. S&P does not perform any audit in connection with any
rating and may, on occasion, rely on unaudited financial
information. The ratings may be changed, suspended or withdrawn
as a result of changes in, or availability of, such information,
or for other circumstances.
The ratings are based, in varying degrees, on the following
considerations:
I. Likelihood of default-capacity and willingness of the obligor
as to the timely payment of interest and repayment of principal
in accordance with the terms of the obligation;
II. Nature of and provisions of the obligor;
III. Protection afforded by, and relative position of, the
obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws
affecting creditors rights.
AAA - Debt rated AAA has the highest rating assigned by S&P.
Capacity to pay
interest and repay principal is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest
and repay principal and differs from the highest rated issues
only in small degree.
A - Debt rated A has a strong capacity to pay interest and
repay principal although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.
-13-
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
(1) Included in Part A:
Selected Financial Information
(2) Included in Part B:
Financial Statements as of December 31, 1995, incorporated by
reference therein from Registrant's Annual Report.
(b) Exhibits
1
(1) Declaration of Trust
1
(2) By-Laws
(3) Not Applicable
1
(4) Specimen Share Certificate
1
(5) Investment Advisory Agreement
(6) Not Applicable
(7) Not Applicable
1
(8) Custodian Agreement
1
(9) (a) Shareholder Services Agreement
(b) Fund Accounting Agreement
2
(10) Opinion and consent of Counsel
(11) Consent of Independent Auditors
(12) Not Applicable
1
(13) Subscription for Purchase of Initial Shares of the Fund
(14) Not Applicable
(15) Not Applicable
1
(16) Computation of Performance
(27) Financial Data Schedule
Item 25. Persons Controlled by or Under Common Control with Registrant
Not applicable.
Item 26. Number of Record Holders
As of April 29, 1996, the number of record holders of the
Registrant was 17,020.
Item 27. Indemnification
Reference is made to Article IV, Section 4.3, of the Registrant's
Declaration of Trust.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and
controlling persons of the Registrant by the Registrant pursuant to
the Declaration of Trust or otherwise, the Registrant is aware that
in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act
and, therefore, is unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by trustees, officers
or controlling persons of the Registrant in connection with the
successful defense of any act, suit or proceeding) is asserted by
such trustees, officers or controlling persons in connection with
the shares being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication
of such issues.
Item 28. Business and Other Connections of Investment Adviser
Fenimore Asset Management, Inc. serves as the investment adviser
for the Registrant. The business and other connections of Fenimore
Asset Management, Inc. are set forth in the Uniform Application
for Investment Adviser Registration ("Form ADV") of Fenimore Asset
Management, Inc. as currently filed with the SEC which is
incorporated by reference herein.
Item 29. Principal Underwriter
Not Applicable.
Item 30. Location of Accounts and Records
The accounts, books, and other documents required to be maintained
by Registrant pursuant to Section 31(a) of the Investment Company
Act of 1940 and rules promulgated thereunder are in the possession
of Fenimore Asset Management, Inc., 118 North Grand Street,
Cobleskill, New York 12043 and FAM Shareholder Services, Inc.,
118 North Grand Street, Cobleskill, New York 12043.
Item 31. Management Services
Not Applicable.
Item 32. Undertakings.
(a) Not Applicable.
(b) Not Applicable.
(c) Registrant undertakes to furnish each person to whom a
prospectus is delivered a copy of the Registrant's latest annual
report to shareholders, upon request and without charge, in the
event that the information called for by Item 5A of Form N-1A
has been presented in the Registrant's latest annual report to
shareholders.
(d) Registrant undertakes to call a meeting of Shareholders for the
purpose of voting upon the question of removal of a Trustee or
Trustees when requested to do so by the holders of at least 10%
of the Registrant's outstanding shares of beneficial interest
and in connection with such meeting to comply with the share-
holders communications provisions of Section 16(c) of the
Investment Company Act of 1940.
Footnotes
- ---------
1. Copies previously filed.
2. Filed with Registrant's Rule 24F-2 Notice on February 26, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
the requirements for effectiveness of this Registration Statement pursuant
to Rule 485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment No. 19 to its Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City
of Washington in the District of Columbia on the 30th day of April, 1996.
FENIMORE ASSET MANAGEMENT TRUST
By: /s/Thomas O. Putnam
Thomas O. Putnam, President*
*By: /s/Patrick W.D. Turley
Patrick W.D. Turley, as attorney-in-fact
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated:
Signature Title Date
/s/Thomas O. Putnam President and April 30, 1996
Thomas O. Putnam* Chairman of the
Board of Trustees
(Principal Executive
Officer)
/s/John W. Krueger Trustee April 30, 1996
John W. Krueger*
/s/Bernard H. Zais Trustee April 30, 1996
Bernard H. Zais*
/s/Roger A. Hannay Trustee April 30, 1996
Roger A. Hannay*
Kenneth E. Burhmaster Trustee
/s/Diane C. Van Buren Trustee and Treasurer April 30, 1996
Diane C. Van Buren* (Principal Financial
and Accounting Officer)
*By: /s/Patrick W.D. Turley
Patrick W.D. Turley
as attorney-in-fact
* Pursuant to power of attorney filed with Post-Effective Amendment No. 12
as filed on April 29, 1994.
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
FILED
WITH
POST-EFFECTIVE AMENDMENT NO. 19
TO THE
REGISTRATION STATEMENT
OF
FENIMORE ASSET MANAGEMENT TRUST
INDEX TO EXHIBITS
(for Post-Effective Amendment No. 19)
Exhibit No.
Under Part C
of Form N-1A Name of Exhibit
9(b) Fund Accounting Agreement
11 Consent of Independent Auditors
27 Financial Data Schedule
<PAGE>
EXHIBIT 9(b)
FUND ACCOUNTING AGREEMENT BETWEEN
FAM SHAREHOLDER SERVICES, INC. AND
FENIMORE ASSET MANAGEMENT TRUST
AGREEMENT dated as of January 1, 1996 between Fenimore Asset
Management Trust, a Massachusetts business trust (the "Trust"),
on behalf of its FAM Value Fund series (the "Fund") and FAM
Shareholder Services Inc., a New York corporation (the
"Company").
W I T N E S S E T H:
That for and in consideration of the mutual promises
hereinafter set forth, the Trust and the Company agree as
follows:
1. Appointment of the Company. The Trust hereby appoints
and constitutes the Company as fund accounting agent for the
Fund, and the Company accepts such appointment and agrees to
perform the duties hereinafter set forth.
2. Compensation.
(a) The Fund will compensate or cause the Company to
be compensated for the performance of its obligations hereunder
in accordance with the fees set forth in the written schedule of
fees annexed hereto as Schedule A and incorporated herein.
Schedule A does not include out-of-pocket disbursements of the
Company for which the Company shall be entitled to bill the Fund
separately. The Company will bill the Fund as soon as
practicable after the end of each calendar month, and said
billings will be detailed in accordance with Schedule B. The
Fund will promptly pay to the Company the amount of such billing.
Out-of-pocket disbursements shall include, but shall
not be limited to, the items specified in the written schedule of
out-of-pocket expenses annexed hereto as Schedule B and
incorporated herein. Schedule B may be modified by the Company
upon not less than 30 days' prior written notice to the Fund.
Unspecified out-of-pocket expenses shall be limited to those out-
of-pocket expenses reasonably incurred by the Company in the
performance of its obligations hereunder. Reimbursement by the
Fund for expenses incurred by the Company in any month shall be
made as soon as practicable after the receipt of an itemized bill
from the Company.
(b) Any compensation agreed to hereunder may be
adjusted from time to time by attaching to Schedule A of this
Agreement a revised Fee Schedule.
3. Documents. In connection with the appointment of the
Company, the Fund shall, on or before the date this Agreement
goes into effect, but in any case, within a reasonable period of
<PAGE>
time for the Company to prepare to perform its duties hereunder,
deliver or cause to be delivered to the Company the following
documents:
(a) All fund accounting records, files and other
materials necessary or appropriate for proper performance of the
functions assumed by the Company under this Agreement;
(b) All documents and papers necessary under the laws
of New York, under the Trust's Declaration of Trust, and as may
be required for the due performance of the Company's duties under
this Agreement or for the due performance of additional duties as
may from time to time be agreed upon between the Fund and the
Company.
4. Duties of the Company. The Company shall be
responsible for acting as fund accounting agent for the Fund.
The operating standards and procedures to be followed shall be
determined from time to time by agreement between the Fund and
the Company. Without limiting the generality of the foregoing,
the Company agrees to perform the specific duties listed on
Schedule C.
5. Recordkeeping and Other Information. The Company shall
create and maintain all necessary records in accordance with all
applicable laws, rules and regulations.
6. Other Duties. In addition, the Company shall perform
such other duties and functions, and shall be paid such amounts
therefor, as may from time to time be agreed upon in writing
between the Fund and the Company. Such other duties and
functions shall be reflected in a written amendment to Schedule
C, and the compensation for such other duties and functions shall
be reflected in a written amendment to Schedule A.
7. Acts of God, etc. The Company will not be liable or
responsible for delays or errors by reason of circumstances
beyond its control, including acts of civil or military
authority, national emergencies, labor difficulties, fire,
mechanical breakdown beyond its control, flood or catastrophe,
acts of God, insurrection, war, riots or failure beyond its
control of transportation, communication or power supply.
8. Duty of Care and Indemnification. The Fund will
indemnify the Company against and hold it harmless from any and
all losses, claims, damages, liabilities or expenses (including
reasonable counsel fees and expenses) resulting from any claim,
demand, action or suit not resulting from the bad faith or
negligence of the Company, and arising out of, or in connection
with, its duties hereunder. In addition, the Fund will indemnify
<PAGE>
the Company against and hold it harmless from any and all losses,
claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from any claim, demand,
action or suit as a result of: (i) any action taken in
accordance with written or oral advice reasonably believed by the
Company to have been given by counsel for the Fund or by its own
counsel; or (ii) any action taken as a result of any error or
omission in any record (including but not limited to magnetic
tapes, computer printouts, hard copies and microfilm copies)
delivered, or caused to be delivered by the Fund to the Company
in connection with this Agreement.
In any case in which the Fund may be asked to indemnify or
hold the Company harmless, the Fund shall be advised of all
pertinent facts concerning the situation in question and the
Company will use reasonable care to identify and notify the Fund
promptly concerning any situation which presents or appears
likely to present a claim for indemnification against the Fund.
The Fund shall have the option to defend the Company against any
claim which may be the subject of this indemnification, and, in
the event that the Fund so elects, such defense shall be
conducted by counsel chosen by the Fund and satisfactory to the
Company, and thereupon, the Fund shall take over complete defense
of the claim and the Company shall sustain no further legal or
other expenses in such situation for which it seeks
indemnification under this Section 8. The Company will not
confess any claim or make any compromise in any case in which the
Fund will be asked to provide indemnification, except with the
Fund's prior written consent. The obligations of the parties
hereto under this Section shall survive the termination of this
Agreement.
9. Term and Termination.
(a) This Agreement shall be effective as of the date
first written above and shall continue through December 31, 1997
and thereafter shall continue automatically for successive annual
periods ending on December 31 of each year, provided such
continuance is specifically approved at least annually by (i) the
Fund's Board of Trustees or (ii) a vote of a "majority" (as
defined in the Investment Company Act of 1940 (the "1940 Act"))
of the Fund's outstanding voting securities, provided that in
either event the continuance is also approved by a majority of
the Board of Trustees who are not "interested persons" (as
defined in the 1940 Act) of any party to this Agreement, by vote
cast in person at a meeting called for the purpose of voting such
approval.
(b) Either party hereto may terminate this Agreement
by giving to the other party a notice in writing specifying the
<PAGE>
date of such termination, which shall be not less than 60 days
after the date of receipt of such notice. In the event such
notice is given by the Fund, it shall be accompanied by a
resolution of the Board of Trustees of the Fund, certified by the
Secretary of the Fund, designating a successor. Upon such
termination and at the expense of the Fund, the Company will
deliver to such successor all relevant books, records,
correspondence, and other data established or maintained by the
Company under this Agreement in a form reasonably acceptable to
the Fund, and will cooperate in the transfer of such duties and
responsibilities, including provisions for assistance from the
Company's personnel in the establishment of books, records and
other data by such successor or successors.
10. Amendment. This Agreement may not be amended or
modified in any manner except by a written agreement executed by
both parties.
11. Subcontracting. The Fund agrees that the Company may,
in its discretion, subcontract for certain of the services
described under this Agreement or the Schedules hereto; provided
that the appointment of any such agent shall not relieve the
Company of its responsibilities hereunder.
12. Miscellaneous.
(a) Any notice or other instrument authorized or
required by this Agreement to be given in writing to the Fund or
the Company shall be sufficiently given if addressed to that
party and received by it at its office set forth below or at such
other place as it may from time to time designate in writing.
To the Fund:
FAM Value Fund
118 North Grand Street
Cobleskill, New York 12043
Attn: Diane C. Van Buren
To the Company:
FAM Shareholder Services, Inc.
111 North Grand Street
Cobleskill, New York 12043
Attn: Herbert L. Shultz, Jr.
(b) This Agreement shall extend to and shall be
binding upon the parties hereto, and their respective successors
and assigns; provided, however, that this Agreement shall not be
assignable without the written consent of the other party.
<PAGE>
(c) This Agreement shall be construed in accordance
with the laws of the State of New York.
(d) This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original;
but such counterparts shall, together, constitute only one
instrument.
(e) The captions of this Agreement are included for
convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction
or effect.
(f) It is understood and expressly stipulated that
neither the holders of shares of the Fund nor any Trustee,
officer, agent or employee of the Fund shall be personally liable
hereunder, nor shall any resort be had to other private property
for the satisfaction of any claim or obligation hereunder, as
only the Fund shall be liable.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective corporate officers
thereunder duly authorized as of the day and year first above
written.
FENIMORE ASSET MANAGEMENT TRUST,
on behalf of FAM Value Fund
BY:________________________________
Thomas O. Putnam
ATTEST:_______________________
, Secretary
FAM SHAREHOLDER SERVICES, INC.
BY:________________________________
Herbert L. Shultz, Jr.
ATTEST:________________________
, Secretary
<PAGE>
Schedule A
FEES
For fund accounting services .025% (accrued daily and
payable monthly based
upon the average daily
net assets of the Fund)
<PAGE>
Schedule B
OUT-OF-POCKET EXPENSES
The Fund shall reimburse the Company monthly for the
following out-of-pocket expenses:
* postage and mailing
* forms
* outgoing wire charges
* telephone and telecommunications costs
* courier services
* if applicable, magnetic tape and freight
* retention of records
* microfilm/microfiche
* stationery
* insurance
* if applicable, terminals, transmitting lines and any
expenses incurred in connection with such terminals and
lines
* all other miscellaneous expenses reasonably incurred by
the Company
The Fund agrees that postage and mailing expenses will be
paid on the day of or prior to mailing as agreed with the
Company. In addition, the Fund will promptly reimburse the
Company for any other expenses incurred by the Company as to
which the Fund and the Company mutually agree that such expenses
are not otherwise properly borne by the Company as part of its
duties and obligations under the Agreement.
<PAGE>
Schedule C
DUTIES
AS FUND ACCOUNTING AGENT THE COMPANY WILL:
1. Keep and maintain the following books and records
pursuant to Rule 31a-1 of the Investment Company Act of
1940 (the "Rule"):
(a) Journals containing an itemized daily record in
detail of all purchases and sales of securities,
all receipts and disbursements of cash and all
other debits and credits, as required by
subsection (b)(1) of the Rule;
(b) General and auxiliary ledgers reflecting all
asset, liability, reserve, capital, income and
expense accounts, including interest accrued and
interest received as required by subsection
(b)(2)(i) of the Rule;
(c) Separate ledger accounts required by subsections
(b)(2)(ii) and (iii) of the Rule; and
(d) A monthly trial balance of all ledger accounts
(except shareholder accounts) as required by
subsection (b)(8) of the Rule.
2. In addition to the maintenance of the books and records
specified above, the Company shall perform the
following accounting services:
(a) calculate the daily net asset value per share;
(b) calculate dividends and capital gain
distributions, if any, when and as required;
(c) calculate the yield, effective yield and total
return, as applicable, and such other measure(s)
of performance as may be agreed upon between the
parties hereto; and
(d) prepare and record, as of each time when the net
asset value is calculated, a valuation of the
assets in the Fund.
3. The Company shall provide the Trust with the following
reports:
(a) a current security position report;
(b) a summary report of transactions and pending
maturities (including the principal, cost, and
<PAGE>
accrued interest on each portfolio security in
maturity date order);
(c) a current cash position and projection report;
(d) statement of assets and liabilities;
(e) statement of operations; and
(f) statement of changes in net assets.
4. The Company shall prepare periodic reports to the
Trust's shareholders and the SEC and such other reports
as may be agreed to from time to time and provide
information typically supplied in the investment
company industry to companies that track or report the
price, performance or other information with respect to
<PAGE>
EXHIBIT 11
CONSENT OF INDEPENDENT AUDITORS
McGLADREY & PULLEN, LLP
Certified Public Accountants and Consultants
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the use of our report dated January 10,
1996 on the financial statements of FAM Value Fund referred to
therein, which appears in the 1995 Annual Report to Shareholders
and which is incorporated herein by reference, in Post-Effective
Amendment No. 19 to the Registration Statement on Form N-1A of
Fenimore Asset Management Trust as filed with the Securities and
Exchange Commission.
We also consent to the reference to our firm in the
Prospectus under the captions "Selected Financial Information" and
"Fund Auditors."
McGLADREY & PULLEN, LLP
New York, New York
April 26, 1996
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000797136
<NAME> FENIMORE ASSET MANAGEMENT TRUST
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-1-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 196,457,142
<INVESTMENTS-AT-VALUE> 248,134,693
<RECEIVABLES> 450,474
<ASSETS-OTHER> 19,084,505
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 267,669,672
<PAYABLE-FOR-SECURITIES> 110,938
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 400,798
<TOTAL-LIABILITIES> 511,736
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 215,479,628
<SHARES-COMMON-STOCK> 10,868,081
<SHARES-COMMON-PRIOR> 10,006,974
<ACCUMULATED-NII-CURRENT> 725
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 32
<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 267,157,936
<DIVIDEND-INCOME> 4,225,261
<INTEREST-INCOME> 986,691
<OTHER-INCOME> 0
<EXPENSES-NET> (3,003,105)
<NET-INVESTMENT-INCOME> 2,208,847
<REALIZED-GAINS-CURRENT> 4,211,001
<APPREC-INCREASE-CURRENT> 37,399,564
<NET-CHANGE-FROM-OPS> 43,819,412
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2,209,176)
<DISTRIBUTIONS-OF-GAINS> (4,210,980)
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<NUMBER-OF-SHARES-SOLD> 2,306,111
<NUMBER-OF-SHARES-REDEEMED> 1,696,462
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<GROSS-EXPENSE> 3,003,105
<AVERAGE-NET-ASSETS> 221,118
<PER-SHARE-NAV-BEGIN> 21.04
<PER-SHARE-NII> .21
<PER-SHARE-GAIN-APPREC> 3.94
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