CANANDAIGUA NATIONAL COLLECTIVE INVESTMENT FUND
FOR QUALIFIED TRUSTS
72 South Main Street
Canandaigua, New York 14424
NOTICE OF ANNUAL MEETING OF UNITHOLDERS
TO BE HELD MARCH 29, 1996
To the Unitholders:
The Annual Meeting of Unitholders of Canandaigua National Collective
Investment Fund for Qualified Trusts (the "Fund") will be held at the offices
of The Canandaigua National Bank and Trust Company ("Canandaigua National
Bank"), 72 South Main Street, Canandaigua, New York on March 29, 1996 at 3:00
P.M., to consider and vote on the following matters described under the
corresponding numbers in the accompanying Proxy Statement:
(1) election of a Supervisory Committee of five (5) members;
(2) approval of the investment management agreement with Canandaigua
National Bank;
(3) ratification or rejection of the selection by the Supervisory
Committee of Morga Jones & Hufsmith, P.C. as independent accountant
for 1996; and
(4) such other matters as may properly come before the meeting.
The Board of Directors has fixed the close of business on February 13,
1996 as the record date for the determination of unitholders entitled to
receive notice of and to vote at the meeting.
The proposed business cannot be conducted at the meeting unless the
holders of a majority of the units are present in person or by proxy.
THEREFORE, PLEASE MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY, WHICH IS
SOLICITED BY THE SUPERVISORY COMMITTEE. THE PROXY IS REVOCABLE, AND YOUR
SIGNING WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON.
By Order of the Supervisory Committee
Robert J. Swartout, Secretary
Canandaigua, New York
March 1, 1996
___________________________________________________________
IT IS IMPORTANT THAT YOU MARK, DATE, SIGN, AND
PROMPTLY MAIL THE ENCLOSED PROXY
G:\UKC\CANNATBK\GENCORP\SW96PROX.STM
<PAGE>
PROXY STATEMENT
The enclosed proxy is solicited by the Supervisory Committee of the
Fund in connection with the Annual Meeting of Unitholders to be held on
March 29, 1996. Every proxy returned in time to be voted at the meeting
will be voted, and, if a specification is made with respect to any
proposal, the proxy will be voted accordingly. If no directions are
indicated, the proxy will be voted for the five nominees set forth in Item
1 and for Items 2 and 3. Anyone having submitted a proxy may revoke it
prior to its exercise, either by filing with the Fund a written notice of
revocation, by delivering a duly executed proxy bearing a later date, or by
voting in person.
At the close of business on February 13, 1996, the record date fixed
by the Supervisory Committee for the determination of unitholders entitled
to notice of and to vote at the meeting, there were outstanding
674,153.9168 units of the Fund, the only authorized class of securities of
the Fund. Each unit is entitled to one vote. There is no provision for
cumulative voting. As of February 13, 1996, no unitholder owned 5% or
more of the Fund's outstanding units except Willard B. Becker, 3299 West
Lake Road, Canandaigua, New York, who owned 3,583.646 units of the Bond
Portfolio constituting 9.83% of that Portfolio, Anthony J. Brindisi, 417
Holiday Harbour, Canandaigua, New York, who owned 2,142.245 units of the
Bond Portfolio constituting 5.87% of that Portfolio, and John E. Tyo, 6
East Main Street, Shortsville, New York, who owned 1,831.8613 units of the
Bond Portfolio constituting 5.02% of that Portfolio.
This proxy statement was first mailed to unitholders on or about March
1, 1996. The Fund's Annual Report for the year ended December 31, 1995
including financial statements was mailed to each unitholder entitled to
vote at the meeting. The report is not to be regarded as proxy soliciting
material or as part of this proxy statement.
With respect to the election of members of the Supervisory Committee
(Item 1), the five nominees receiving the highest number of votes shall be
deemed to be elected. The vote required to approve Items 2 and 3 is the
affirmative vote of the lesser of (a) 50% or more of all units present and
entitled to vote at the meeting, provided the holders of more than 50% of
all units outstanding and entitled to vote are present or represented by
proxy, or (b) more than 50% of all outstanding units.
In the event that sufficient votes are not received by the meeting
date, a person named as proxy may propose one or more adjournments of the
meeting for a period or periods of not more than 30 days in the aggregate
to permit further solicitation of proxies. The persons named as proxies
will vote all proxies in favor of such adjournment. Signed but unmarked
proxies will be voted in favor of all proposals:
1. ELECTION OF SUPERVISORY COMMITTEE MEMBERS.
Five (5) members of the Supervisory Committee are to be elected at the
meeting to hold office until the next meeting of unitholders and until
their successors are elected and qualified. All of the nominees were
originally named in the Declaration of Trust for the Fund. The nominees
were nominated for reelection at a meeting of the Supervisory Committee
held February 7, 1996. Each of the nominees has agreed to serve if
reelected. If, due to presently unforeseen circumstances, any nominee
should not be available for election, the proxies will vote the signed but
unmarked proxies, and those marked for the nominees, for such other persons
as the present members of the Supervisory Committee shall recommend. The
table below sets forth certain information regarding the nominees.
<TABLE>
<CAPTION>
Memberships on
Year First Boards of Other
Current Principal Elected a Registered Investment
Name of Nominee Occupation and Principal Supervisory Companies and
(Position with Fund) Employment During Committee Publicly
AND DATE OF BIRTH PAST FIVE YEARS MEMBER HELD COMPANIES
<S> <C> <C> <C>
ROBERT J. CRAUGH Retired 1992 None
(Chairman Supervisory
Committee)
8/16/22
ROBERT N. COE President and Co-owner 1992 None
(Member Supervisory of W.W. Coe & Sons, Inc.
Committee) (Independent insurance
3/1/50 agency)
DONALD C. GREENHOUSE Since 1989, President and 1992 None
(Member Supervisory Owner of Seneca Point
Committee) Associates, Inc. (business
4/29/36 consulting firm);
prior thereto
Executive Vice President,
Voplex Corporation
*GREGORY S. MACKAY Treasurer of Canandaigua 1992 None
(Treasurer, Member National Corporation;
Supervisory Committee) Senior Vice President,
8/3/49 Canandaigua National Bank
*ROBERT J. SWARTOUT Vice President 1992 None
(Secretary, Member and Investment Officer,
Supervisory Committee) Canandaigua National Bank
6/8/61
</TABLE>
______________________________________
* Is an "interested person" as defined in Section 2(a)(19) of the
Investment Company Act of 1940, on the basis of his affiliation with
the investment adviser, The Canandaigua National Bank and Trust
Company. Mr. Craugh is not an "interested person" as defined in the
Investment Company Act of 1940, but is considered an interested person
by the Office of the United States Comptroller of the Currency, which
supervises the Investment Adviser.
None of the nominees owns any shares of the Fund.
- 2 -
There were four Supervisory Committee meetings and two Audit Committee
meetings in 1995. Each of the nominees attended at least 75% of all
meetings of the Supervisory Committee and of the committees of which he was
a member. Mr. Coe and Mr. Greenhouse serve as the Fund's Audit Committee.
The Fund has no executive officers who are not members of the
Supervisory Committee.
The Fund does not pay salaries to officers, but pays an investment
advisory fee to Canandaigua National Bank as described below. Messrs.
Craugh, Coe and Greenhouse were paid $200.00 each by the Fund for each
meeting of the Supervisory Committee attended during 1995. For this,
Messrs. Craugh and Coe received $800.00 and Mr. Greenhouse received
$600.00. No officers, directors, or employees of Canandaigua National
Bank, its parent, or its subsidiaries received any remuneration directly
from the Fund.
- 3 -
INFORMATION PERTAINING TO THE INVESTMENT ADVISER
AND THE
INVESTMENT MANAGEMENT AGREEMENT
The Fund has retained, as its investment adviser, Canandaigua National
Bank, 72 South Main Street, Canandaigua, New York 14424.
The Investment Adviser was founded in 1887 and currently serves as the
investment adviser to no investment company other than the Fund.
Canandaigua National Bank's research programs encompass economic and
statistical services.
Canandaigua National Corporation, 72 South Main Street,
Canandaigua, New York, 14424, is the parent of the Investment Adviser,
owning all of its outstanding shares of common stock. Arthur S. Hamlin, a
former director of Canandaigua National Corporation and the Investment
Adviser, is a beneficial owner of shares representing 4.65% of the voting
rights of Canandaigua National Corporation. The following Supervisory
Committee Members of the fund are stockholders of Canandaigua National
Corporation: Mr. Craugh, Mr. MacKay, and Mr. Swartout.
The Board of Directors of Canandaigua National Bank presently consists
of 11 directors, all of whom own securities of Canandaigua National
Corporation. The address and principal occupation of each of the members
is indicated below. The members are:
<TABLE>
<CAPTION>
DIRECTOR AND ADDRESS PRINCIPAL OCCUPATION
<S> <C>
Patricia Boland Executive Director,
Canandaigua, New York Granger Homestead
David Hamlin, Jr. Farmer
Bloomfield, New York
Frank H. Hamlin Retired
Naples, New York
George W. Hamlin, IV President, CEO and Trust Officer,
Canandaigua, New York Canandaigua National Bank
Stephen D. Hamlin President, Draper Development Corporation
New York, New York
Paul R. Kellogg Retired
Canandaigua, New York
Eldred M. Sale Retired
Victor, New York
- 4 -
DIRECTOR AND ADDRESS PRINCIPAL OCCUPATION
Robert G. Sheridan Senior Vice President and Cashier,
Canandaigua, New York Canandaigua National Bank
Caroline C. Shipley Educator; Area II, Director, New York
Canandaigua, New York State School Boards Association
Alan J. Stone Managing Partner, Stone Properties
Honeoye, New York Chairman of the Board, Canandaigua
National Bank
Willis F. Weeden, M.D. Retired
Canandaigua, New York
</TABLE>
Mr. MacKay and Mr. Swartout, officers of the Fund, are also officers
and employees of the Investment Adviser.
No purchases and sales of common stock of Canandaigua National
Corporation by and to any officer, director or employee of Canandaigua
National Bank or its affiliates, during the Fund's fiscal year ended
December 31, 1995 involved securities in an amount exceeding 1% of any
outstanding class of shares.
The Investment Management Agreement (the "Agreement") between the Fund
and the Investment Adviser, dated October 6, 1992 was approved by the
Fund's original unitholder and submitted to a vote and unanimously approved
at a Meeting of the Supervisory Committee held October 6, 1992.
Canandaigua National Bank has served as the Investment Adviser since that
date.
The Agreement provides that the Investment Adviser shall furnish
advice to the Fund with respect to its investments and shall, to the extent
authorized by the Supervisory Committee of the Fund, determine what
securities shall be purchased or sold by the Fund. As compensation for its
services to the Fund, the Investment Adviser receives from the Fund an
annual fee, computed daily and paid monthly, of 1% of the Equity
Portfolio's net assets and 0.50% of the Bond Portfolio's net assets.
As of December 31, 1995, the total net assets of the Fund were
$8,841,014. The Fund paid the Investment Adviser $72,404 (0.82% of average
net assets) for the year ended December 31, 1995.
The Agreement provides that the Investment Adviser will reduce the fee
payable to it by the amount by which the Fund's annual ordinary operating
expenses exceed the lower of 1.5% of the average daily value of the net
assets of the Fund, or the most restrictive expense limitation applicable
to the Fund imposed by any jurisdiction in which units of the Fund are
offered for sale. Expenses which are not subject to this limitation are
interest, taxes and extraordinary expenses. Expenditures including costs
incurred in connection with the purchase or sale of portfolio securities,
which are capitalized in accordance with generally accepted accounting
principles applicable to investment companies, are accounted for as capital
items and not as expenses.
- 5 -
The Investment Adviser, in addition to providing investment advisory
services, furnishes the services for and pays the compensation and travel
expenses of persons to perform the executive, administrative, clerical and
bookkeeping functions of the Fund, and provides suitable office space,
necessary small office equipment and utilities, and general purpose
accounting forms, supplies, and postage used at the offices of the Fund.
The Investment Adviser provides transfer agency and shareholder
accounting services for the Fund without additional compensation.
EXECUTION OF PORTFOLIO TRANSACTIONS
Orders for the Fund's portfolio securities transactions are placed by
the Investment Adviser. The Investment Adviser strives to obtain the best
available prices and executions in its portfolio transactions, taking into
account the costs and promptness of executions. There is no agreement or
commitment to place orders with any broker-dealer. In transactions
executed in the over-the-counter market, purchases and sales are transacted
directly with principal market-makers except in those circumstances where,
in the opinion of the Investment Adviser, better prices and executions are
available elsewhere.
Subject to the requirement of seeking the best available prices and
execution, the Investment Adviser may, in circumstances in which two or
more broker-dealers are in a position to offer comparable prices and
execution, give preference to broker-dealers which have provided investment
research, statistical and other related services to the Investment Adviser
for the benefit of the Fund. Such research services may be used by the
Investment Adviser in servicing all of its accounts, including trusts or
investment accounts in the Investment Adviser's trust department.
Therefore, it is possible, although unlikely, that not all such research
services may be used by the Investment Adviser in connection with the Fund.
There are occasions on which portfolio transactions for the Fund may
be executed as part of concurrent authorizations to purchase or sell the
same security for other trusts or investment accounts in the Investment
Adviser's trust department. Although such concurrent authorizations
potentially could be either advantageous or disadvantageous to the Fund,
they are effected only when the Investment Adviser believes that to do so
is in the interest of the Fund. When such concurrent authorizations occur,
the objective is to allocate the executions in an equitable manner.
Brokerage commissions paid on portfolio transactions, including dealer
concessions on underwritings, during the fiscal year ended December 31,
1995, amounted to $171,838.75 for the Equity Portfolio and $175.00 for the
Bond Portfolio; altogether representing 2.31% of average net assets of the
Fund. The portfolio turnover ratio for the fiscal year ended December 31,
1995 was 375.30% for the Equity Portfolio and 14.13 for the Bond Portfolio.
- 6 -
2. APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT
The Investment Management Agreement (the "Agreement") between the Fund
and the Investment Adviser, dated October 6, 1992, is described in part
under "INFORMATION PERTAINING TO THE INVESTMENT ADVISER AND THE INVESTMENT
MANAGEMENT AGREEMENT" above, and a copy of the Agreement is attached to
this proxy statement. Consistent with the Federal Investment Company Act
of 1940, the Agreement states that it shall remain in effect for two years
after October 6, 1992 (the date when it became effective), and from year to
year thereafter, but only so long as such continuance is approved at least
annually either by the vote of a majority of the members of the Supervisory
Committee, including specific approval by a majority of such persons who
are not parties to the Agreement or "interested persons" of any such party
as that term is used in the Investment Company Act, or by vote of a
majority of the outstanding units of each investment portfolio. Upon
registration of the Fund with the United States Securities and Exchange
Commission, the Fund undertook to present the Agreement to the unitholders
for their approval at the next meeting of unitholders held after
registration of the Fund. On January 5, 1995, the extension of the
Agreement until April 30, 1995 was unanimously approved by the members of
the Supervisory Committee, including specific approval by all members who
are not parties to the Agreement or "interested persons" of any such party
as that term is used in the Investment Company Act. On March 31, 1995, the
Agreement was approved by a majority of the units of each investment
portfolio.
THE SUPERVISORY COMMITTEE RECOMMENDS THAT YOU VOTE IN FAVOR
OF THE APPROVAL OF THE INVESTMENT MANAGEMENT AGREEMENT.
3. RATIFICATION OR REJECTION OF SELECTION BY THE SUPERVISORY COMMITTEE OF
INDEPENDENT ACCOUNTANT
Shareholders are requested to ratify the selection by the Supervisory
Committee (including a majority of members who are not "interested parties"
of the Fund as that term is defined in the Investment Company Act of 1940)
of the firm of Morga Jones & Hufsmith, P.C. (formerly Walsh, Morga &
Company, P.C.) as independent accountant for the Fund for 1996. Walsh,
Morga & Company, P.C. has served as independent accountant since January 1,
1993 when it was unanimously selected by the Supervisory Committee as the
Fund's independent accountant. No accountant's report on the financial
statements of the Fund has ever contained an adverse opinion or a
disclaimer of opinion, or been qualified or modified as to uncertainty,
audit scope or accounting principles. The Fund has not had any
disagreement with the accountant as to any matter and the accountant has
advised the Fund that it has no material direct or indirect financial
interest in the Fund or its affiliates. No representative of the firm of
Morga Jones & Hufsmith, P.C. is expected to be available to answer
questions or attend the meeting of unitholders.
- 7 -
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF
THE RATIFICATION OF THE SELECTION OF MORGA JONES & HUFSMITH, P.C.
AS INDEPENDENT ACCOUNTANT FOR 1996.
SHAREHOLDER PROPOSALS
Notice is hereby given that any shareholder proposals which may
properly be included in the proxy solicitation materials for the next
annual meeting, presently scheduled for March 31, 1997, must be received by
the Fund at its executive offices not less than 120 days in advance of the
first anniversary of the date of this proxy statement. Any such proposals
must comply with the requirements of Rule 14a-8 promulgated under the
Securities Exchange Act of 1934.
MISCELLANEOUS
The solicitation of the enclosed proxy is made by and on behalf of the
Supervisory Committee of the Fund. The cost of soliciting proxies,
consisting of printing, handling and mailing of the proxies and related
materials, will be paid this year by Canandaigua National. In addition to
solicitation by mail, certain officers and Supervisory Committee members of
the Fund, who will receive no extra compensation for their services, may
solicit by telephone, telegram or personally.
The management is not aware of any matters that will be presented for
action at the meeting other than the matters set forth herein. Should any
other matters requiring a vote of unitholders arise, the proxies in the
accompanying form will confer upon the person or persons entitled to vote
the shares represented by such proxy a discretionary authority to vote the
shares with respect to any such other matters in accordance with their best
judgement in the interests of the Fund.
By: Order of the Board of Directors,
Robert J. Swartout
Secretary
March 1, 1996
- 8 -
G:\UKC\CANNATBK\GENCORP\SW96PROX.STM
<PAGE>
CANANDAIGUA NATIONAL COLLECTIVE INVESTMENT FUND
FOR QUALIFIED TRUSTS
Proxy Solicited on Behalf of the Supervisory Committee of the
Fund for the Annual Meeting of Unitholders
to be held March 29, 1996
The undersigned hereby appoints Richard H. Hawks, Jr. and James M. Exton as
lawful agents and proxies, each with full power to appoint a substitute to
represent the undersigned at the aforesaid Annual Meeting of Unitholders to be
held at the offices of The Canandaigua National Bank and Trust Company, 72
South Main Street, Canandaigua, New York on March 29, 1996 at 3:00 P.M., on all
matters coming before said meeting.
1. ELECTION OF SUPERVISORY COMMITTEE MEMBERS
Nominees: Robert J. Craugh, Robert N. Coe, Donald C. Greenhouse,
Gregory S. MacKay and Robert J. Swartout
[ ] VOTE FOR all nominees listed above, except vote withheld
from the following nominees (if any):
_______________________________________________________
_______________________________________________________
OR
[ ] VOTE WITHHELD from all nominees.
2. APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT WITH CANANDAIGUA NATIONAL BANK
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. RATIFICATION OF SELECTION OF MORGA JONES & HUFSMITH, P.C. AS
INDEPENDENT ACCOUNTANT
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, upon other matters as may properly come before
the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED UNITHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR THE NOMINEES LISTED IN ITEM 1 AND FOR ITEMS 2 AND 3.
____________________________________________
March 1, 1996
____________________________________________
(Please sign exactly as name appears below)
SHARES HELD February 13, 1996:
_________________________
