As filed with the Securities and Exchange Commission on March 27, 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. 18 | X |
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 | X |
Amendment No. 21 | 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 April 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 Equity Income Fund (the "Equity Income
Fund") a separate investment series of Fenimore Asset Management Trust (the
"Trust") and contains the Prospectus and Statement of Additional Information
relating solely to the Equity Income Fund. The Prospectus and Statement of
Additional Information relating to FAM Value Fund (the "Value Fund") are not
included in this filing.
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...........................To be included by amendment
4. General Description of
Registrant............................General Information and
Capital; Investment
Objective and
Investment Policies
5. Management of the Fund..................General Information and Capital;
Investment Objective and
Investment Policies;
Investment Advisor
5A. Management's Discussion of
Fund Performance......................Information will be included
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
<PAGE>
8. Redemption or Repurchase................Redemption of Shares
9. Pending Legal Proceedings...............Inapplicable
Item Number in Part B Statement of Additional
Information Caption
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 EQUITY INCOME FUND
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111 North Grand Street, P.O. Box 399, Cobleskill, New York 12043
Telephone Number (800) 932-3271 or (518) 234-7462
Auto-Access Line (800) 453-4392
A No-Load Mutual Fund
PROSPECTUS
The date of this prospectus is April 1, 1996
FAM EQUITY INCOME 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 investment objective of the Fund is to provide current income as well as
long term capital appreciation for its shareholders by investing primarily
(at least 65% of total assets) in income-producing equity securities. The
Fund employs a "value approach" to common stock selection and under normal
market conditions, will attempt to be fully invested in common stocks,
preferred 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
<PAGE>
TABLE OF CONTENTS
Page
Fund Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Investment Objective . . . . . . . . . . . . . . . . . . . . . . . . . .3
Investment Philosophy. . . . . . . . . . . . . . . . . . . . . . . . . .3
Investment Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Investment Policies. . . . . . . . . . . . . . . . . . . . . . . . . . .5
Risk Factors and Special Considerations. . . . . . . . . . . . . . . . .5
How to Purchase Shares . . . . . . . . . . . . . . . . . . . . . . . . .6
Account Minimums . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Fund Purchases and Trade Date. . . . . . . . . . . . . . . . . . . . . .6
Net Asset Value. . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Wire Instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . .7
IRA and Retirement Accounts. . . . . . . . . . . . . . . . . . . . . . .7
Purchases Through Selected Dealers . . . . . . . . . . . . . . . . . . .7
Exchange Privilege . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Redemption of Shares . . . . . . . . . . . . . . . . . . . . . . . . . .8
Shareholder Services . . . . . . . . . . . . . . . . . . . . . . . . . .9
FAMVest Automatic Investment Plan. . . . . . . . . . . . . . . . . . . .9
Toll-Free Telephone Numbers and Auto-Access Line . . . . . . . . . . . .9
Fund Statements and Reports. . . . . . . . . . . . . . . . . . . . . . .9
Systematic Withdrawal Plan . . . . . . . . . . . . . . . . . . . . . . .9
Fund Policies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Signature Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . 10
Address Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Dividends and Capital Gains. . . . . . . . . . . . . . . . . . . . . . 10
Distribution Options . . . . . . . . . . . . . . . . . . . . . . . . . 10
Transferring Ownership of Shares . . . . . . . . . . . . . . . . . . . 11
Backup Withholding Instructions. . . . . . . . . . . . . . . . . . . . 11
Performance Information. . . . . . . . . . . . . . . . . . . . . . . . 11
Federal Income Tax Status of Fund. . . . . . . . . . . . . . . . . . . 12
General Information and Capital. . . . . . . . . . . . . . . . . . . . 12
Fund Auditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Distributor and Transfer Agent . . . . . . . . . . . . . . . . . . . . 13
Shareholder Servicing Agent. . . . . . . . . . . . . . . . . . . . . . 13
Broker Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . 13
<PAGE>
FUND EXPENSES
SHAREHOLDER TRANSACTION EXPENSES
Sales Load Imposed on Purchases None
Sales Load Imposed on
Reinvestment of Dividends None
Exchange Fees None
1
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 None
2
Other Expenses 0.50%
3
Total Fund Operating Expenses 1.50%
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.
Footnotes
- ---------
1) The Fund's custodian bank imposes an $8 wire redemption fee on
shareholders who request a wire redemption from the Fund.
2) "Other Expenses" are based on estimated amounts for the Fund's
current fiscal year.
3) The Fund's investment advisor has voluntarily agreed to temporarily
limit the total operating expenses of the Fund to 1.50% of its average
daily net assets for its current fiscal year. After December 31, 1996,
this expense limitation may be terminated, continued, or modified by
the Advisor in its sole discretion.
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
$15 $47
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.
<PAGE>
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide current income as well as
long term capital appreciation for its shareholders by investing primarily (at
least 65% of its total assets) in income-producing equity securities. The
Fund seeks to achieve its objective through a "value approach" to common
stock selection. Under normal market conditions the Fund will attempt to be
fully invested in common stocks, preferred stocks and securities that are
convertible into common stocks that the Advisor believes have long term
growth possibilities. The Fund's investment objective is a fundamental
policy and, as such, it may not be changed without a vote of majority of the
Fund's shareholders. The Fund's investment manager is Fenimore Asset
Management, Inc.
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 five following tenets:
I. 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 intrinsic value becomes fully reflected in the market price of
such securities.
II. DIVIDEND YIELD AND STABILITY
Recognizing that current income is important to shareholders, the
Fund seeks out common stocks, preferred stocks, or other
investments convertible into common stock, that provide reasonable
income. FAM analyzes the historical dividend payout ratios of such
securities, the growth of such ratios, and future potential dividends.
Over time, dividend income has proven to be an important
component of total return. Also, dividend income tends to be a
more stable source of total return than capital appreciation. While
the price of a company's common stock can be significantly affected
by market fluctuations and other short term factors, its dividend
payments usually have greater stability. For this reason, securities
which pay a high level of dividend income are generally less volatile
in price than securities which pay a low level of dividend income.
<PAGE>
III. 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.
IV. GOOD BUSINESSES
FAM searches for businesses that are understandable, highly
profitable, and are part of industry groups that can be fairly
evaluated.
V. 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.
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'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.
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 1975, 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.
Paul C. Hogan, CFA, Fund co-manager, is employed by FAM, the Fund's
advisor, as Investment Research Analyst. He has been actively involved in
investment research activities since 1991. 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.
<PAGE>
INVESTMENT POLICIES
In seeking to carry out its investment objective, the Fund will invest
primarily (at least 65% of its total assets) in income-producing common stocks
and securities that are convertible into common stocks, such as convertible
bonds and convertible preferred stocks. Under normal market conditions, the
Fund will attempt to remain fully invested in such securities. To the extent
the Fund invests in convertible securities, it will only acquire convertible
issues having an S&P rating of A or better. The Fund may also invest up to
35% of its total assets in fixed-income securities. (For temporary defensive
purposes, the Fund may invest all of its assets in fixed-income securities).
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 investment 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 the FAM has analyzed and
believes to be financially sound.
Among the types of common stocks that the Fund may invest in are the
common stocks of real estate investment trusts. Real estate investment trusts
may include equity real estate investment trusts, which generally invest in
commercial real estate properties, and mortgage real estate investment trust,
which generally invest in real estate related loans. Equity real estate
investment trusts may be affected by changes in the value of the underlying
property owned by the trust, while mortgage real estate investment trusts
may be affected by the quality of credit extended.
The Fund may also invest in the shares of other investment companies,
including closed-end investment companies. Purchases of the shares of
other investment companies will be limited to 10% of the Fund's total assets,
with investment in any single fund not to exceed 5% of the Fund assets at
any one time. As a result of the Fund investing in other investment
companies, 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 investment
companies during the period while the Fund is invested in such investment
companies.
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.
<PAGE>
HOW TO PURCHASE SHARES
ACCOUNT MINIMUMS
The initial minimum investment in the Fund is $10,000. The Fund offers
regular investment accounts, Individual Retirement Accounts, SEP-IRAs,
403(b)(7) accounts, and Uniform Gift/Transfer to Minors accounts. For
subsequent investments in the Fund the minimum is $50.
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 EQUITY INCOME
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. To establish an account through a wire transfer please see "Wire
Instructions". Any applications received not following the specific
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 canceled and you may be liable for losses or fees incurred,
or both. The FAM EQUITY INCOME 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. The Fund cannot be held responsible
for having acted on instructions it believed were being made in good faith
and will not cancel any trade (purchase or redemption) received in writing
which is believed to be authentic.
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 Fund's 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.
<PAGE>
WIRE INSTRUCTIONS
If you wish to wire funds to a new account with FAM EQUITY INCOME
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 EQUITY
INCOME 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 EQUITY INCOME FUND
Fund Investment for: (Name and/or Account Number)
If you wish to wire funds to an existing account with the FAM
EQUITY INCOME 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.
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.
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.
<PAGE>
EXCHANGE PRIVILEGE
You may exchange all or a portion of your shares into any other available
FAM Fund. An exchange is treated as a redemption and a purchase;
therefore, you could realize a taxable gain or loss on the transaction. There
are no fees charged in connection with such an exchange. Exchange requests
are required to be made in writing and are accepted only if the registrations
and the tax identification numbers of the two accounts are identical.
Minimum investment requirements must be met when opening a new
account by exchange. If the shares you are exchanging are held in certificate
form, you must return the certificate to your Fund prior to making any
exchanges. Be sure that you read the prospectus for the Fund into which you
are exchanging prior to making any exchanges. Please call FAM
Shareholder Services to request a Fund prospectus.
The exchange privilege is not designed to afford shareholders a way to
play short term swings in the market. FAM Funds are not suitable for
that purpose.
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 a change
of address within 30 days of the request for redemption.
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 may sell all or any portion of their shares on any such business
day that the 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 EQUITY INCOME 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.
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.
Redemption of shares may result in the shareholder realizing a taxable
capital gain or loss. A $10 wire fee is charged to shareholders who wish to
have the proceeds of their redemption wired to them.
<PAGE>
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. There is a minimum of $50 a month required to
participate in FAMVEST. In addition, 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 EQUITY INCOME 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 EQUITY INCOME 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. 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.
SYSTEMATIC WITHDRAWAL PLAN
For your convenience you may elect to have automatic periodic redemptions
from your account. Shareholders who wish to participate in the systematic
withdrawal plan must complete the appropriate form and return to the Fund
30 days prior to the first scheduled redemption.
<PAGE>
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 EQUITY INCOME 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 EQUITY
INCOME 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.
DIVIDENDS AND CAPITAL GAINS
Net income dividends will be distributed on a quarterly basis normally in
March, June, September, and December. Capital gains dividends are
distributed in December.
DISTRIBUTION OPTIONS
For the convenience of our shareholders, all distributions will be
automatically invested in additional shares unless indicated otherwise.
Investors who want dividend and/or capital gains distributions sent to them
in cash rather than reinvested must request so either on the account
application at the time of the original purchase or in writing at least 7
business days prior to distribution. The written request must include the
account number, name, social security or tax i.d. number, and the signature
of all owners exactly as they are registered on the account.
<PAGE>
TRANSFERRING OWNERSHIP OF SHARES
You may transfer ownership of your shares to another person or organization
by written instructions to FAM EQUITY INCOME 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 shareholder'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 EQUITY INCOME FUND that omit your Social
Security or Tax Identification Number will subject FAM EQUITY INCOME
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 yield and total return in advertisements or reports
to shareholders 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 over periods of one, five, and ten years
(up to 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. Quotations of yield for the Fund will be based on the
investment income per share during a particular 30-day (or one month)
period (including dividends and interest), less expenses accrued during the
period ("net investment income"), and will be computed by dividing net
investment income by the maximum public offering price per share on the
last day of the period.
<PAGE>
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
additional shares. Dividends designated as capital gain dividends are taxed
to shareholders as long term capital gains, weather 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 shareholder 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 information relating to taxes, see "Federal Tax Status" in the
Statement of Additional Information.
GENERAL INFORMATION AND CAPITAL
The FAM EQUITY INCOME 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, transferable 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 shareholder inquiries should be
directed to FAM EQUITY INCOME 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.
<PAGE>
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.
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.
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>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
such State.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
for
FAM EQUITY INCOME FUND
111 North Grand Street, P.O. Box 399, Cobleskill, NY 12043
Telephone Number (800) 932-3271.
A NO-LOAD MUTUAL FUND
April 1, 1996
FAM EQUITY INCOME [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 10
Financial Statements 10
Federal Tax Status 11
Appendix 12
Custodian:
Chase Manhattan, N.A.
New York, NY
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
It is the intention of the Fund to attempt to provide current income as
well as long term capital appreciation for its shareholders by investing
primarily (at least 65% of total assets) in income-producing equities or
equivalents. Normally investments will be concentrated in common
stocks, preferred stocks, and securities that are convertible into 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 investments can be found for purchase.
It is the opinion of FAM that reasonable current income and long term
capital appreciation is achievable when common stocks, preferred stocks,
and securities that are convertible into 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 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 reasonable current income and
long term capital appreciation for its 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 providing current income as well
as long term capital appreciation for Fund shareholders, FAM, from time
to time, may also choose to invest up to 35% 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
<PAGE>
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").
FAM recognizes that while the Fund remains small in size FAM may
have greater flexibility in achieving its objective of providing reasonable
current income as well as long term capital appreciation. 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. During such
times as previously described, existing shareholders will not be
prohibited from redeeming their shares or purchasing additional shares
by exercising their right to reinvest any dividends which may be
distributed by the Fund.
It should be clear to investors in Fund shares that FAM believes income
is important in achieving its investment objective. 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. 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
Under the terms of the By-laws of the Fund on file in its Registration
Statement under the Investment Company Act of 1940, 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 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.
<PAGE>
(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, purchase its investments on credit or
margin, or 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 may
invest in registered investment companies, including those organized as
closed-end investment companies, and the Fund also 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. As a result of the Fund investing
in other investment companies, 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 investment companies during the period while the Fund is invested
in such investment companies.
<PAGE>
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. Paul C. Hogan, CFA, Fund co-manager, is employed by FAM,
the Fund's advisor, as Investment Research Analyst. Mr. Hogan has a
B.B.A. from St. Bonaventure University and an M.B.A. from SUNY
Binghamton. He has been actively involved in investment research
activities since 1991. 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, reasonable current income and long term
capital appreciation 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.
<PAGE>
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
three to five years or longer to be realized in the stock market.
It is the intention of Mr. Putnam to advise the Fund to 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.
<PAGE>
BOARD OF TRUSTEES
The names of Board of Trustees of the Fund, and their respective duties
and affiliations are as follows:
Primary Occupation;
Name, Address, and Age Business 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
PO Box 630
Colchester, VT 05446
Age: 80
Roger A. Hannay President, Trustee
2440 Airport Road Hannay Reels, Inc.
Westerlo, NY 12193
Age: 53
Kenneth E. Burhmaster Chairman, Trustee
201 Mohawk Avenue 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:
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 $0 $0 $0 $3,500
Bernard
H. Zais $0 $0 $0 $3,900
Roger A.
Hannay $0 $0 $0 $3,900
Diane C.
Van Buren $0 $0 $0 $0
*The Fund did not commence operations until April 1, 1996.
<PAGE>
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
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 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.
<PAGE>
PURCHASE OF SHARES
The initial minimum investment in the Fund is $10,000. The Fund offers regular
investment accounts, Individual Retirement Accounts, SEP-IRAs, 403(b)(7)
accounts, and Uniform Gift/Transfer to Minors accounts.
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 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. Pursuant to the Prospectus, net
income dividends will be distributed on a quarterly basis normally in March,
June, September, and December. Capital gains dividends are distributed in
December.
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.)
Issuance of Share Certificates: Because of the added costs involved the
Fund does not issue share certificates to shareholders. All shares are
held in an account maintained by the Fund itself, as is the custom within
the mutual fund industry.
<PAGE>
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.
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.
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 is 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
Copies of any and all Financial 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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
(1) Part A:
Selected Financial Information: to be filed by
amendment
(2) Part B:
Financial Statements: to be filed by amendment
(b) Exhibits
(1) Declaration of Trust
1
(2) By-Laws
(3) Not Applicable
1
(4) Specimen Share Certificate
(5) Investment Advisory Agreement
(6) Not Applicable
(7) Not Applicable
1
(8) Custodian Agreement
(9) (a) Shareholder Services Agreement
(b) Fund Accounting Agreement
2
(10) Opinion and consent of Counsel
- -------------
1. Copies previously filed.
2. To be filed by amendment.
<PAGE>
2
(11) Consent of Independent Auditors
(12) Not Applicable
(13) Not Applicable
(14) Not Applicable
(15) Not Applicable
2
(16) Computation of Performance
2
(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 the date of this Registration Statement, there are no
shareholders of record of the Fund's shares.
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.
<PAGE>
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., 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) Registrant undertakes to file a post-effective amendment,
using financial statements which need not be certified,
within four to six months from the effective date of
Registrant's Registration Statement under the Securities Act
of 1933 or the date on which Registrant first sells its shares.
(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 shareholders communications provisions of Section 16(c)
of the Investment Company Act of 1940.
<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 of
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. 18 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 25th day of March, 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 March 25, 1996
Thomas O. Putnam* Chairman of the
Board of Trustees
(Principal Executive
Officer)
/s/John W. Krueger Trustee March 25, 1996
John W. Krueger*
/s/Bernard H. Zais Trustee March 25, 1996
Bernard H. Zais*
<PAGE>
/s/Roger A. Hannay Trustee March 25, 1996
Roger A. Hannay*
Kenneth E. Burhmaster Trustee
/s/Diane C. Van Buren Trustee and Treasurer March 25, 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. 18
TO THE
REGISTRATION STATEMENT
OF
FENIMORE ASSET MANAGEMENT TRUST
<PAGE>
INDEX TO EXHIBITS
(for Post-Effective Amendment No. 18)
Exhibit No.
Under Part C
of Form N-1A Name of Exhibit
- ------------ ---------------
5 Investment Advisory Agreement
9(a) Shareholder Services Agreement
9(b) Fund Accounting Agreement
<PAGE>
EXHIBIT 5
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, made by and between Fenimore Asset
Management Trust (the "Trust"), a Massachusetts business trust,
and Fenimore Asset Management, Inc. ("FAM"), a New York
corporation:
WITNESSETH:
WHEREAS, the Trust engages in the business of investing and
reinvesting its assets and property in various stocks and
securities, and
WHEREAS, FAM engages in the business of providing investment
advisory services and is registered and licensed to engage in
such business;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, each of the parties hereto intending to be
legally bound, it is agreed as follows:
FIRST, the Trust hereby employs FAM for the period and on
the terms as set forth in this Agreement, to render investment
advisory services to its series fund known as "FAM EQUITY INCOME
FUND" (the "Fund"), subject to the supervision and direction of
the Board of Trustees of the Trust. FAM hereby accepts such
employment and agrees, during such period, to render the services
and assume the obligations and be paid compensation, as set forth
and agreed herein. FAM, its directors, officers, employees and
agents shall, for all purposes herein, be deemed to be providing
services as an independent contractor, and shall, unless
otherwise expressly provided and authorized, have no authority to
act for, represent, or in any way be deemed an agent of the
Trust.
SECOND, as compensation for services to be rendered by FAM
under the provisions of this Agreement, the Fund shall pay to FAM
an annual fee, calculated daily and payable monthly, based on the
average daily net assets the Fund, of 1.00%.
THIRD, it is expressly understood and agreed that the
services to be rendered by FAM under the provisions of this
Agreement are not to be deemed to be exclusive, and that FAM
shall be free to render similar or different investment services
to others so long as its ability to render the services provided
for in this Agreement shall not be impaired thereby.
FOURTH, it is understood and agreed that trustees,
directors, officers, employees, agents, and shareholders of the
Trust may be interested in FAM as trustees, directors, officers,
employees, agents and/or as shareholders, and that trustees,
directors, officers, employees, agents and shareholders of FAM
may be interested in the Trust in the same way, and that FAM
<PAGE>
itself as an entity may be interested in one or more fund series
of the Trust as a shareholder. Specifically, it is understood
and agreed that trustees, directors, officers, employees, agents
and shareholders of FAM may continue as trustees, directors,
officers, employees, agents and shareholders of the Trust; that
FAM, its trustees, directors, officers, employees, agents and
shareholders may engage in other businesses, may render
investment advisory services to other investment companies, or to
any other corporations, associations, firms or individuals, and
that FAM may render other services of any kind to any other
investment company, corporation, association, firm, individual,
or to any other fund series of the Trust or of any other
registered investment company.
FIFTH, FAM or any of its affiliated businesses or companies
shall be permitted hereunder to charge the Trust fees for
services such as but not limited to: the cost of maintaining the
Fund's books, records and procedures; dealing with the Fund's
shareholders; the payment of Fund dividends; transfers of Fund
shares; reports or notices mailed to Fund shareholders; expenses
of Fund stockholders meetings; Fund custodian fees; and all Fund
regulatory and registration fees; Fund taxes; Fund legal fees;
Fund officer remuneration; Fund office expenses and postage;
PROVIDED, that in no event shall remuneration or payments of any
kind in respect to the operation and maintenance of Fund to FAM,
its affiliated companies or businesses or its interested
trustees, directors, employees, officers or agents in one
calendar year, be in an amount in excess of 2% of the average
daily market value of the assets of the Fund. Trustees,
officers, directors, employees and agents of FAM who are, or may
in the future be, trustees, directors, officers, employees,
agents or advisory board members of the Fund shall receive no
compensation from the Trust for acting in such capacities for the
Fund or for any other series of the Trust. In the conduct of the
respective businesses of the parties hereto and in the
performance of this Agreement, the Trust and FAM may share common
facilities and personnel common to each other and it is agreed
hereunder that costs, as and when applicable and subject to the
limitations herein provided, for shared facilities are to be
shared fairly and equitably.
SIXTH, it is agreed hereunder that FAM shall give the Trust
the benefit of its best judgment and efforts in rendering these
services, and the Trust agrees as an inducement to undertake
these services that FAM shall not be held liable hereunder for
any mistake in judgment or any event whatsoever, provided that
nothing herein shall be construed to remove legal remedies or to
protect FAM against any liability to the Trust or to any Fund
shareholders for FAM's willful misfeasance, bad faith or gross
<PAGE>
negligence in the performance of its duties hereunder, or by
reason of reckless disregard of its obligations hereunder.
SEVENTH, it is mutually agreed by the parties hereto that
this Agreement shall have an initial term of two years from the
date below written, and it shall then continue in force and
effect until and so long as the Board of Trustees and
shareholders of the Trust vote to keep it in force, it being
understood and agreed that this Agreement or any other similar
Agreement as amended, must be approved as required by law and by
the provisions of the Investment Company Act of 1940. Such
approval by the Board of Trustees shall be by a majority of those
holding office as a trustee of the Fund at the time or in the
event of a vote by shareholders, by a vote of those representing
a majority of the voting shares of the Fund outstanding.
EIGHTH, it shall be agreed that this Agreement may be
terminated at any time upon 30 days written notice, without
payment of any penalty, by a unanimous vote of the Fund's Board
of Trustees or by a vote of a majority of the outstanding voting
shares of the Fund. This contract will automatically terminate
in the event of its assignment (within the meaning of the
Investment Company Act of 1940), which shall be deemed to include
a transfer of control of FAM. Upon the termination of this
Agreement, the obligations of the parties hereto shall cease and
terminate as of the date of such termination, except for any
obligation to respond for a breach of this Agreement committed
prior to such termination and except for the obligation of the
Trust to pay to FAM the fee provided herein, prorated to the date
of termination.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be attested and their presence to be signed by their
duly authorized trustees/officers this 1st day of April, 1996.
FENIMORE ASSET MANAGEMENT
TRUST, on behalf of
FAM EQUITY INCOME FUND
Attest:_______________________ By:___________________________
FENIMORE ASSET MANAGEMENT,
INC.
Attest:_______________________ By:___________________________
<PAGE>
EXHIBIT 9(a)
SHAREHOLDER SERVICES AGREEMENT BETWEEN
FAM SHAREHOLDER SERVICES, INC. AND
FENIMORE ASSET MANAGEMENT TRUST
AGREEMENT dated as of April 1, 1996 between Fenimore Asset
Management Trust, a Massachusetts business trust (the "Trust"),
on behalf of its FAM Equity Income 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. Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise
requires, shall have the following meanings:
(a) "Authorized Person" shall be deemed to include any
person, whether or not such person is an officer or employee of
the Fund, duly authorized to give Oral Instructions or Written
Instructions on behalf of the Fund as indicated in a certificate
furnished to the Company pursuant to Section 4(b) hereof as may
be received by the Company from time to time;
(b) "Custodian" refers to the custodian and any sub-custodian of
all securities and other property which the Fund may
from time to time deposit, or cause to be deposited or held under
the name or account of such custodian pursuant to the Custody
Agreement;
(c) "Declaration of Trust" shall mean the Declaration
of Trust of the Trust as the same may be amended from time to
time;
(d) "Oral Instructions" shall mean instructions, other
than written instructions, actually received by the Company from
a person reasonably believed by the Company to be an Authorized
Person;
(e) "Shares" refers to shares of beneficial interest,
par value $.001 per share, of the Fund; and
(f) "Written Instructions" shall mean a written
communication signed by a person reasonably believed by the
Company to be an Authorized Person and actually received by the
Company.
<PAGE>
2. Appointment of the Company. The Trust hereby appoints
and constitutes the Company as shareholder servicing agent for
the Fund, and the Company accepts such appointment and agrees to
perform the duties hereinafter set forth.
3. 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.
4. 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
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 account application forms and other documents
relating to Shareholder accounts or to any plan, program or
service offered by the Fund;
(b) A certificate identifying the Authorized Persons
and specimen signatures of Authorized Persons who will sign
Written Instructions; and
<PAGE>
(c) All documents and papers necessary under the laws
of New York, under the 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.
5. Distributions Payable in Shares. In the event that the
Board of Trustees of the Fund shall declare a distribution
payable in Shares, the Fund shall deliver or cause to be
delivered to the Company written notice of such declaration
signed on behalf of the Fund by an officer thereof, upon which
the Company shall be entitled to rely for all purposes,
certifying (i) the number of Shares involved, and (ii) that all
appropriate action has been taken.
6. Duties of the Company. The Company shall be
responsible for acting as service agent in connection with
dividend and distribution functions and for performing
shareholder account and administrative agent functions in
connection with the Fund's Shares. 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.
7. Recordkeeping and Other Information. The Company shall
create and maintain all necessary records in accordance with all
applicable laws, rules and regulations.
8. 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.
9. Reliance by the Company; Instructions.
(a) The Company will be protected in acting upon
Written or Oral Instructions reasonably believed to have been
executed or orally communicated by an Authorized Person and will
not be held to have any notice of any change of authority of any
person until receipt of a Written Instruction thereof from an
officer of the Fund.
(b) At any time the Company may apply to any
Authorized Person of the Fund for Written Instructions and may
seek advice at the Fund's expense from legal counsel for the Fund
<PAGE>
or from its own legal counsel, with respect to any matter arising
in connection with this Agreement, and it shall not be liable for
any action taken or not taken or suffered by it in good faith in
accordance with such Written Instructions or in accordance with
the opinion of counsel for the Fund or for the Company. Written
Instructions requested by the Company will be provided by the
Fund within a reasonable period of time. In addition, the
Company, or its officers, agents or employees, shall accept Oral
Instructions or Written Instructions given to them by any person
representing or acting on behalf of the Fund only if said
representative is known by the Company, or its officers, agents
or employees, to be an Authorized Person.
10. 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.
11. 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
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 Instructions, or any other
instructions reasonably believed by the Company to be genuine and
to be signed, countersigned or executed, or orally communicated
by an Authorized Person; (ii) 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
(iii) 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
<PAGE>
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 11. 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.
12. 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
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.
13. Amendment. This Agreement may not be amended or
modified in any manner except by a written agreement executed by
both parties.
<PAGE>
14. 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.
15. 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 Equity Income 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.
(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
<PAGE>
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 Equity Income Fund
BY:________________________________
Thomas O. Putnam
ATTEST:_______________________
, Secretary
FAM SHAREHOLDER SERVICES, INC.
BY:________________________________
Herbert L. Shultz, Jr.
ATTEST:________________________
, Secretary
<PAGE>
Schedule A
FEES
Shareholder account
maintenance (per annum,
prorated payable monthly) $18.00
<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
* Federal Reserve charges for check clearance
* 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 SHAREHOLDER SERVICE AGENT FOR INVESTORS IN THE FUND, THE
COMPANY WILL:
* Receive from the Fund or from a Shareholder, on a form
acceptable to the Company, information necessary to
record sales and redemptions and to generate sale
and/or redemption confirmations;
* Mail sale and/or redemption confirmations using
standard forms;
* Accept and process cash payments from investors, and
clear checks which represent payments for the purchase
of Shares;
* Produce periodic reports reflecting the accounts
receivable and the paid pending (free stock) items;
* Open, maintain and close Shareholder accounts;
* Establish registration of ownership of Shares in
accordance with generally accepted form;
* Maintain monthly records of (i) issued Shares and (ii)
number of Shareholders and their aggregate
Shareholdings classified according to their residence
in each State of the United States or foreign country;
* Maintain and safeguard records for each Shareholder
showing name(s), address, number of any certificates
issued, and number of Shares registered in such
name(s), together with continuous proof of the
outstanding Shares, and reflecting all current changes;
and provide all accounts with year-to-date and year-end
historical confirmation statements;
* Redeem Shares and prepare and mail liquidation checks;
* Pass upon the adequacy of documents submitted by a
Shareholder or his legal representative to substantiate
the transfer of ownership of Shares from the registered
owner to transferees;
* Certify outstanding Shares to auditors;
* In connection with any meeting of Shareholders, upon
receiving appropriate detailed instructions and written
materials prepared by the Fund and proxy proofs checked
by the Fund, print proxy cards; deliver to Shareholders
all reports, prospectuses, proxy cards and related
proxy materials of suitable design for enclosing;
<PAGE>
receive and tabulate executed proxies; and furnish a
list of Shareholders for the meeting;
* Answer routine correspondence and telephone inquiries
about individual accounts; prepare monthly reports for
correspondence volume and correspondence data necessary
for the Fund's Semi-Annual Report on Form N-SAR;
* Maintain and furnish the Fund and its Shareholders with
such information as the Fund may reasonably request for
the purpose of compliance by the Fund with the
applicable tax and securities laws of applicable
jurisdictions;
* Mail confirmations of transactions to investors and
dealers in a timely fashion;
* Pay or reinvest income dividends and/or capital gains
distributions to Shareholders of record, in accordance
with the Fund's and/or Shareholder's instructions,
provided that:
(a) The Fund shall notify the Company in writing
promptly upon declaration of any such
dividend and/or distribution, and in any
event at least forty-eight (48) hours before
the record date;
(b) Such notification shall include the
declaration date, the record date, the
payable date, the rate, and, if applicable,
the reinvestment date and the reinvestment
price to be used; and
(c) Prior to the payable date, the Fund shall
furnish the Company with sufficient fully and
finally collected funds to make such
distribution.
* Prepare and file annual United States information
returns of dividends and capital gains distributions
(Form 1099) and mail payee copies to Shareholders;
report and pay United States income taxes withheld from
distributions made to nonresidents of the United
States; and prepare and mail to Shareholders the notice
required by the U.S. Internal Revenue Code as to
realized capital gains distributed and/or retained, and
their proportionate share of any foreign taxes paid by
the Fund;
<PAGE>
* Set up wire order trades on file;
* Receive payment for trades and update the trade file;
* Produce delinquency and other trade file reports;
* Sort and print Shareholder information by state, social
code, price break, etc.; and
* Mail promptly the Statement of Additional Information
of the Fund to each Shareholder who requests it, at no
cost to the Shareholder.
<PAGE>
EXHIBIT 9(d)
FUND ACCOUNTING AGREEMENT BETWEEN
FAM SHAREHOLDER SERVICES, INC. AND
FENIMORE ASSET MANAGEMENT TRUST
AGREEMENT dated as of April 1, 1996 between Fenimore Asset
Management Trust, a Massachusetts business trust (the "Trust"),
on behalf of its FAM Equity Income 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.
<PAGE>
(b) Either party hereto may terminate this Agreement
by giving to the other party a notice in writing specifying the
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 Equity Income 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 Equity Income 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
accrued interest on each portfolio security in
maturity date order);
<PAGE>
(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
investment companies.
<PAGE>
DECHERT PRICE & RHOADS
1500 K Street, N.W.
Washington, D.C. 20005
(202) 626-3300
March 27, 1996
VIA ELECTRONIC TRANSMISSION
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: Fenimore Asset Management Trust (File No. 33-7190)
Dear Sir or Madam:
Attached for filing on behalf of Fenimore Asset Management Trust (the
"Trust"), pursuant to Rule 485(b) under the Securities Act of 1933, in
electronic format, is one copy of Post-Effective Amendment No. 18 to the
Registration Statement on Form N-1A for the Trust. This filing relates to
the Trust's new series, FAM Equity Income Fund. No filing fee is required
in connection with this filing.
The Trust has specified on the cover of this filing that it is to become
effective on April 1, 1996 pursuant to Rule 485(b). We have reviewed this
Post-Effective Amendment and represent that it does not contain disclosure
which would render it ineligible to become effective pursuant to Rule 485(b).
If you have any questions or comments concerning this filing, please call
the undersigned at (202) 626-3364 or Allan S. Mostoff at (202) 626-3310.
Very truly yours,
Patrick W.D. Turley
<PAGE>
