ITEM 5: FEES AND COMPENSATION
Fenimore’s advisory fees are described generally below and are detailed in relevant investment
advisory agreements for separately managed accounts, the Governing Documents for the Private
Fund, and the Registration Statement for the Registered Funds. However, Fenimore reserves the
right, in its sole discretion, to charge different fees or waive fees for certain accounts based on the
SMA Client’s particular needs as well as overall financial condition, goals, risk tolerance, and
other factors. Additionally, Fenimore retains the right to waive or reduce fees charged to any
Investor in its sole and absolute discretion. Fenimore may waive or reduce fees for SMA Clients
or Investors who are associated with Fenimore. Fees for certain SMA Clients may also differ based
on account inception dates. Fenimore does not currently charge performance-based fees.
SMA Clients of Fenimore, as well as indirectly, Shareholders in the Registered Funds and
Investors in the Private Fund, bear certain other fees, expenses, and costs (in addition to Fenimore’s
advisory fees) which are incidental or related to the maintenance of an account or the buying,
selling, and holding of investments including, but not necessarily limited to: (1) custodial charges;
(2) brokerage fees, commissions, and other related transaction costs and expenses;
(3) governmental charges, taxes, and duties; (4) transfer fees, registration fees, and other expenses
associated with buying, selling, or holding investments; (5) withholding taxes payable and required
to be withheld by issuers or their agents; and (6) other fees and expenses authorized by or otherwise
disclosed in the relevant investment advisory agreements for separately managed accounts, the
Governing Documents for the Private Fund, and the Registration Statement for the Registered
Funds (e.g., legal, accounting, offering and printing, regulatory, or tax compliance expenses,
operational expenses, audit expenses, and administrative expenses). For additional information
about brokerage practices, please refer to the section entitled “Brokerage Practices.”
Except as otherwise provided herein, or in the relevant advisory agreements or Governing
Documents, fee payments are divided into quarterly installments and due at the beginning of each
quarter for the preceding quarter. Initial fees are calculated based on the number of days in the
quarterly period that the account was under Fenimore’s management. All subsequent quarters are
billed for the full quarter. Generally, Fenimore’s investment advisory agreements are mutually
revocable at any time without penalty and continue in effect until written notice of termination is
given by either party. There is no requirement for prepayment of fees, and in the event of
termination, any outstanding fees are prorated for the number of days prior to termination.
Fenimore currently does not accept prepayment of more than either, $1,200 in fees per client, or
six months in advance.
In addition, in connection with providing Model Portfolio services, we are entitled to receive a fee
from the Sponsor.
Registered Fund Advisory Fees and Other Non-Advisory Fees
Investment advisory services are provided to the Registered Funds at the annual rate of .90% of
net assets computed and paid monthly. In advising the Registered Funds, Fenimore is subject to
the supervision and direction of the Trust’s Board of Trustees. The advisory contract between
Fenimore and a Registered Fund can be terminated without penalty by the Registered Fund,
generally upon 30 days’ notice, and terminates automatically upon assignment as defined in the
1940 Act.
Fenimore also receives certain non-advisory fees for services that it provides to the Registered
Funds, including a business management fee for providing certain types of non-advisory business
management services. These services include the oversight of service providers to the Registered
Funds. Fenimore also receives certain fund accounting and shareholder administrative servicing
fees from the Registered Funds for providing or procuring fund accounting and shareholder
administrative servicing for the Registered Funds. In addition, Fenimore receives fees from the
Registered Funds for providing or procuring certain shareholder account services to the Registered
Funds.
Private Fund Advisory Fees
Fenimore serves as managing member of the Private Fund. Services provided to the Private Fund
by Fenimore, as managing member, include, in addition to investment advice: (1) organizing and
managing their business affairs; (2) executing and reconciling trades; (3) preparing financial
statements and providing audit support; (4) preparing tax related schedules; and (5) drafting,
printing, and distributing correspondence to Investors.
Fees paid by Investors with respect to the Private Fund are outlined in the offering documents.
Fenimore may waive or reduce fees payable by certain Investors in its discretion. Expenses paid
by the Private Fund may vary depending on the nature of the services provided. For advisory
services provided, the Private Fund pays Fenimore an asset-based management fee monthly, in
arrears, in an amount equal to 1%, per annum, of the net asset value of each Investor’s capital
account (subject to any fee waivers or reductions granted to a particular Investor), adjusted, pro
rata, for any capital contributions, withdrawals, or distributions during a calendar month. The
Private Fund also bears certain other expenses, as described above and in more detail in the relevant
Governing Documents.
Following the first anniversary of an Investor’s initial investment in the Private Fund, the Investor
may withdraw all or a portion of its capital account quarterly, as of the last business day of the
calendar quarter, upon 30 days’ prior written notice to Fenimore. The Private Fund has authority
to impose minimum withdrawal amounts and, except in the case of a full liquidation by an Investor,
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