NORTH EUROPEAN OIL ROYALTY TRUST
Red Bank, New Jersey 07701
(732) 741-4008
NOTICE OF ANNUAL MEETING OF UNIT OWNERS
February 10, 2009
To the Unit Owners of
NORTH EUROPEAN OIL ROYALTY TRUST:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Unit Owners of NORTH EUROPEAN OIL ROYALTY TRUST (the "Trust"“Trust”), pursuant to Article 14 of its Agreement of Trust will be held on Monday,Tuesday, February 12, 2007,10, 2009, at 1:3000 P.M., in Rooms 3 and 4, Ninth Floor, at The University Club, 1 West 54th Street, New York, New York 10019 (corner of Fifth Avenue; entrance on 54th Street) for the following purposes:
| (1) | To elect five persons named in the accompanying proxy statement as Trustees to serve until the next annual meeting of unit owners or until their respective successors are duly elected and qualified. |
| (2) | To transact such other business as may properly come before the meeting. |
The transfer books of the Trust will not be closed. Only unit owners of record as of the close of business on December 29, 20062008 will be entitled to notice of and to vote at the annual meeting.
BY ORDER OF THE TRUSTEES:
| ROBERT P. ADELMAN | |
| Managing Trustee |
January 10, 20079, 2009
If you plan to attend the meeting, please note that The University Club has a dress code. Gentlemen are required to wear a jacket and tie, and ladies are required to wear business attire. The University Club does not make exceptions. To obtain directions to attend the meeting and vote in person, contact the Trust at (732) 741-4008 or neort@neort.com. To make arrangements for handicap access, contact the University Club at (212) 247-2100.
If you do not expect to be present in person, you are urged to sign and return the enclosed proxy in the enclosed postage-paid envelope as soon as possible.
NORTH EUROPEAN OIL ROYALTY TRUST
Red Bank, New Jersey 07701
(732) 741-4008
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation of proxies by the Trustees of NORTH EUROPEAN OIL ROYALTY TRUST (the "Trust"“Trust”) to be used at the Annual Meeting of Unit Owners to be held on Monday,Tuesday, February 12, 200710, 2009 and any adjournment or adjournments thereof for the purposes set forth in the accompanying notice of annual meeting. Only unit owners of record at the close of business on December 29, 20062008 will be entitled to vote at such meeting. Proxies properly executed and received in time to be presented at the meeting will be voted as specified in such proxies. If no instructions are specified in such proxies, units of beneficial interest in the Trust ("units"(“units”) will be voted for the election of the Trustees. The Trustees do not know of any matters, other than as described in the Notice of Annual Meeting of Unit Owners, which are to come before the annual meeting. If any other matters are properly presented at the annual meeting for action, the persons named in the enclosed form of proxy and acting thereunder will have the discretion to vote on such matters in accordance with their best judgment.
Any proxy may be revoked at any time prior to its being exercised by filing with the Managing Trustee, at the address of the Trust above, written notice of such revocation or a duly executed proxy bearing a later date, or by attending and voting in person at the annual meeting. Owners of units registered in the name of a nominee (e.g. units held by brokers in "street name"“street name”) who wish to vote in person at the annual meeting should contact the nominee to obtain appropriate authority to vote such units at the annual meeting. Attendance at the annual meeting will not in and of itself constitute revocation of a proxy. This proxy statement and the proxy included herewith are being mailed to unit owners on or about January 10, 2007.9, 2009.
The Trust was formed on September 10, 1975, pursuant to a vote of the shareholders of North European Oil Company, a predecessor corporate entity. There were 9,190,590 units of the Trust outstanding on December 29, 2006.2008. This number of units represents all authorized units. Each unit owner is entitled to one vote for each unit he or she holds or represents. Any number of units represented in person or by proxy will constitute a quorum for all purposes at the annual meeting.
The affirmative vote of a majority of units represented in person or by proxy at the annual meeting is required to elect any person a Trustee of the Trust. With regard to the election of Trustees, votes may be cast in favor or withheld with respect to all nominees; votesor certain nominees. Votes that are withheld will be counted as present for purposes of the election of Trustees and, thus, will have the same effect as a vote "against"“against” such election.
In the event of a broker non-vote with respect to any issue coming before the annual meeting, arising from the absence of authorization by the beneficial owner to vote as to that issue, such non-voting units will not be deemed present and entitled to vote as to that issue for purposes of determining the total number of units represented in person or by proxy. A “broker non-vote” occurs if a broker or other nominee who is entitled to vote units on behalf of which a majorityrecord owner has not received instructions with respect to a particular item to be voted on, and the broker or nominee does not otherwise have discretionary authority to vote on that matter. Under the rules of the New York Stock Exchange (the “NYSE”), brokers may vote a client’s proxy in their own discretion on certain items even without instructions from the beneficial owner, but may not vote a client’s proxy without voting instructions on “non-discretionary” items. The election of Trustees is required for adoption.considered a “discretionary” item.
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The Trustees do not expect that the cost of soliciting proxies will exceed the amount normally expended for a proxy solicitation for an election of directors or trustees and all such costs will be borne by the Trust. In addition to the use of the mail, some proxies may be solicited personally by the Trustees without additional compensation. The Trustees may reimburse persons holding units in their names or in the names of their nominees for their expenses in sending the soliciting materials to their principals.
ELECTION OF TRUSTEES
The persons named in the accompanying proxy intend to vote for the election of the five individuals named on the following pagebelow to serve until the next annual meeting of unit owners, or until their successors have been duly elected and qualified. All of the nominees are presently serving as Trustees. The Trustees are informed that all nominees are willing to serve, but if any such person shall decline or shall become unable to serve as a Trustee for any reason, votes will be cast instead for a substitute nominee, if any, designated by the present Trustees, or, if none is so designated prior to election, said votes will be cast according to the judgment of the person or persons voting the proxy.
The following table sets forth certain information including ownership of Trust units as of December 1, 2006, about the nominees for election as Trustees, the Managing Director and the former Managing Trustee:Trustees:
| Trustee or | Units | ||||||||
| Director of | Beneficially | Percent | |||||||
| Principal Occupation or | Predecessor | Owned as of | of | ||||||
| Employment | Or Officer, | December 1, | Units | ||||||
| Age | for Past Five Years | Since | 2006 | (1) | |||||
Nominees for Election as Trustees | |||||||||
| Robert P. Adelman | 76 | Director, Trustee of various | 1987 | 7,000 | (2) | ||||
| profit and non-profit | |||||||||
| companies | |||||||||
| Samuel M. Eisenstat | 66 | Attorney; CEO, Abjac | 1996 | 5,000 | (2) | ||||
| Energy Corp.; Director or | |||||||||
| Trustee of a number of open | |||||||||
| and closed end funds | |||||||||
| managed by AIG | |||||||||
| SunAmerica Asset | |||||||||
| Management Corp. | |||||||||
| Lawrence A. Kobrin | 73 | Partner, Cahill Gordon & | 2006(3) | 600(4) | (2) | ||||
| Reindel LLP | |||||||||
| Willard B. Taylor | 66 | Partner, Sullivan & | 1974(5) | 6,619 | (2) | ||||
| Cromwell, LLP | |||||||||
| Rosalie J. Wolf | 65 | Managing Member, Botanica | 2001 | 2,000 | (2) | ||||
| Capital Partners LLC; | |||||||||
| formerly Senior Advisor and | |||||||||
| Managing Director, | |||||||||
| Offit Hall Capital | |||||||||
| Management LLC | |||||||||
| (and predecessor entity); | |||||||||
| formerly Chief Investment | |||||||||
| Officer of The Rockefeller | |||||||||
| Foundation | |||||||||
Managing Director | |||||||||
| John R. Van Kirk | 54 | Managing Director (6) | 1990 | 7,551 | (2) | ||||
Former Managing | |||||||||
Trustee | |||||||||
| John H. Van Kirk | 82 | Managing Trustee (7) | 1954 | 78,000(8) | 0.85% | ||||
All Trustees, the Managing Director and the | |||||||||
Former Managing Trustee, as a group | 106,770 | 1.16% | |||||||
Samuel M. Eisenstat, 68, an attorney, currently serves as the Chief Executive Officer of Abjac Energy Corp. Mr. Eisenstat serves as a director or trustee of a number of open and closed end funds managed by AIG SunAmerica Asset Management Corp. Mr. Eisenstat has been a Trustee since 1996.
Lawrence A. Kobrin, 75, is senior counsel with the law firm of Cahill Gordon & Reindel LLP, a position he has held since January 1, 2007. Prior to such time, Mr. Kobrin was a partner at Cahill Gordon & Reindel LLP, a position he held since 1984. Cahill Gordon & Reindel LLP serves as counsel to the Trust. Mr. Kobrin has been a Trustee since 2006.
Willard B. Taylor, 68, is of counsel to the law firm of Sullivan and Cromwell LLP, and was a partner in that firm from 1972 through 2007. Mr. Taylor has been a Trustee since 1975 and also served as a director of North European Oil Company from 1970 to 1972.
Rosalie J. Wolf, 67, is a Managing Partner of Botanica Capital Partners LLC, a position she has held since 2004. She is also a Member of Brock Capital Group LLC. From 2001-2003, Ms. Wolf was a managing director and senior advisor of Offit Hall Capital Management LLC (and predecessor entity). From 1994-2000, Ms. Wolf was the Treasurer and Chief Investment Officer of The Rockefeller Foundation. Ms. Wolf has been a Trustee since 2001.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Unit Ownership of Trustees and Executive Officers
The following table sets forth the number of units beneficially owned as of December 4, 2008 by each Trustee and nominee for Trustee, the individual named in the summary compensation table set forth below under “Executive Compensation,” and all Trustees and executive officers as a group.
| Number of | |||
| Shares | Percentage | ||
| Beneficially | Beneficially | ||
| Name and Position of Beneficial Owner | Owned | Owned (1) | |
| Robert P. Adelman, Managing Trustee | 8,600 | * | |
| Samuel M. Eisenstat, Trustee | 6,000 | * | |
| Lawrence A. Kobrin, Trustee (2) | 1,700 | * | |
| Willard B. Taylor, Trustee | 6,619 | * | |
| Rosalie J. Wolf, Trustee | 3,000 | * | |
| John R. Van Kirk, Managing Director (3) | 9,251 | * | |
| All Trustees and executive officers as a group (6 persons) | 35,170 | * |
____________________
* Less than one percent
| (1) | Percentage computations are based upon all outstanding units. Percentage computations for each Trustee and the Managing Director include units deemed to be owned indirectly even when beneficial ownership has been disclaimed as set forth in |
| (2) |
| Mr. |
No person known to the Trust owns beneficially more than 5% of the Trust’s units.
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
There is only one executive officer of the Trust, its Managing Director. The Compensation Committee of the Trustees of North European Oil Royalty Trust (the “Compensation Committee”) is responsible for recommending to the Trustees for approval all aspects of the compensation of the Managing Director.
The Trust is a passive fixed investment trust which holds overriding royalty rights, receives income under those rights from certain operating companies, pays its expenses and distributes the remaining net funds to its unit owners. The Trust does not engage in any business or extractive operations of any kind in the areas over which it holds royalty rights and is precluded from engaging in such activities by the Trust Agreement. As a result, the Trust’s financial results are determined primarily by factors not within the control of its executive or the Trustees, including energy prices in Europe, currency exchange rates, energy supply contracts and the operating companies’ production and sales levels. Given the nature of the Trust and the inability of management to affect royalty income, the Compensation Committee believes that the time required and the level of skill with which the Managing Director handles the administrative and financial affairs of the Trust, rather than the Trust’s financial results, are the significant factors in determining his compensation. In setting the annual compensation of the Managing Director, the Compensation Committee considers the historic level of compensation paid to the Managing Director and the time required and the level of skill with which he handles the Trust’s administrative and financial affairs. In addition, in the case of the current Managing Director (who has served in this role since 1990), the Compensation Committee takes into account the value of his continued performance and knowledge of the Trust, which he has gained over many years.
Historically, the compensation package for the Managing Director has consisted of a base salary and, on occasion, a cash bonus. No long-term incentive compensation has been paid and, as a result of the format of the Trust, no equity-based compensation can be made available. Lacking a traditional 401-K or its equivalent, in 2007, the Trust established a savings incentive match plan for employees (SIMPLE IRA) that is available to both employees of the Trust, one of whom is the Managing Director. The Trustees have authorized the making of contributions by the Trust to the accounts of employees, on a matching basis, of up to 3% of cash compensation paid to each such employee.
For calendar 2008, the Managing Director’s annual base compensation remained fixed at $105,000. He also received a bonus of $7,500 and $3,375 as the Trust’s matching contribution to his SIMPLE IRA. For calendar 2009, the Managing Director’s annual base compensation, bonus and the Trust’s matching contribution will remain the same.
The Trust does not maintain any severance or change of control plans or any employment contracts. As a result, the Managing Director is not entitled to receive any severance or other benefits in the case of a termination event or a change of control. The Trust does have any formal unit ownership requirements or guidelines.
Although the Trust does not engage in any formal benchmarking, as a means of testing its judgment, the Compensation Committee has, from time to time, explored the costs of alternate or substitute performance of the management functions by a corporate service firm or similar entity and found that the fees to be charged by such entities to perform these functions would be more costly to the Trust and the unit owners.
The compensation of the Trustees is primarily set by the Trust Agreement, but the Compensation Committee is responsible for recommending to the Trustees for approval any additional compensation to Trustees for serving in roles such as the Managing Trustee (a non-executive position), a committee chair
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or the clerk of the Trustees. For these additional roles, the experience gained both during the length of their service with the Trust and their roles and experience outside the Trust as well as the time and responsibility involved in these added roles are considered in setting the additional compensation. See “Trustee Compensation” below. The Compensation Committee has not historically retained any compensation consultants to assist it in this process and has not done so currently.
Report of the Compensation Committee of the Trustees of North European Oil Royalty Trust | ||
| The Compensation Committee this Proxy Statement. | ||
| Samuel M. Eisenstat, Chairman | Robert P. Adelman | Lawrence A. Kobrin |
| Willard B. Taylor | Rosalie J. Wolf | |
Set forth below is a table summarizing the compensation paid to the Managing Trustee andof the Managing Director during the indicated fiscal years(the only executive officer of the Trust.
| Name and | ||||
| Principal Positions | Year | Compensation | ||
| John H. Van Kirk | 2006 | $ 92,208 | ||
| Managing Trustee (1) | 2005 | $ 66,165 | ||
| 2004 | $ 68,265 | |||
| John R. Van Kirk | 2006 | $105,000 | ||
| Managing Director | 2005 | $103,000 | ||
| 2004 | $ 99,167 |
| All Other | |||||
| Salary ($) | Bonus | Compen- | |||
| Name and Principal Position | Year | (1) | ($) | sation ($) | Total ($) |
| John R. Van Kirk - Managing Director | 2008 | $105,000 | $ 7,500 | $ 3,375 | $115,875 |
(1)John H.Mr. Van Kirk retired as Managing TrusteeKirk’s salary is determined on a calendar year basis and chief executive officer effective October 31, 2006. The compensation amounts indicatedwas $105,000 for John H. Van Kirk include both the amounts paid to him in accordance with the Trust Agreement as a Trusteecalendar 2007 and the separately fixed compensation paid to him as Managing Trustee and chief executive officer.2008.
Set forth below is a table summarizing the compensation earned by the Trustees during fiscal 2006,2008.
| Fees Earned or Paid in | All Other | ||
| Name | Cash ($) | Compensation ($) | Total ($) |
| Robert P. Adelman - Managing Trustee | $100,984 | $ 0 | $100,984 |
| Samuel M. Eisenstat - Audit Committee Chairman | $ 79,984 | $ 0 | $ 79,984 |
| Lawrence A. Kobrin - Clerk | $ 79,984 | $ 0 | $ 79,984 |
| Willard B. Taylor - Trustee | $ 69,484 | $ 0 | $ 69,484 |
| Rosalie J. Wolf - Trustee | $ 69,484 | $ 0 | $ 69,484 |
Under the provisions of the Trust Agreement approved by the Delaware Court of Chancery and the shareholders of the Trust’s predecessor at the formation of the Trust, each Trustee was paidreceives a yearly fee equal to 0.2% of the gross royalties and interest received during the year by the Trust. Based upon this formula, each Trustee earned a fee of $56,207.74 pursuant$69,484 during fiscal 2008. Any compensation for additional services provided to a formula contained in the Trust Agreement. Robert P.is recommended by the Compensation Committee for approval by the Trustees with the respective individual not participating. Effective May 1, 2008, the Trustees set the additional compensation for Mr. Adelman received additional compensationfor his service as Managing Trustee at an annual rate of $10,000$33,000 (an increase of $3,000 over the prior rate of $30,000). Effective May 1, 2008, the Trustees set the additional
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compensation for servingMr. Eisenstat and Mr. Kobrin for their services as Audit Committee Chairman. In addition,Chairman and Clerk of the Trustees, respectively, at an annual rate of $11,000 (an increase of $1,000 over the prior rate of $10,000). The Trustees are also reimbursed for reasonable out-of-pocket expenses incurred in connection with travel and accommodations for meetings of the Trustees.Trustees and other required services performed on behalf of the Trust. For fiscal 2006,2008, total reimbursed out-of-pocket expenses for all the Trustees were $3,343.05.$6,348. The Trustees do not receive, either directly or indirectly, securities or property, retirement or insurance benefits or personal benefits or other similar forms of compensation.
The graphfollowing transactions, although not necessarily required to be reported in this proxy statement, occurred during fiscal 2008.
John R. Van Kirk, the Managing Director of the Trust, provides office space and office services to the Trust at cost. During fiscal 2008, the Trust reimbursed him a total of $28,939 for such office space and office services and an additional $122 for travel expenses. As of January 1, 2007, Lawrence A. Kobrin, a Trustee of the Trust, was named Senior Counsel at Cahill Gordon & Reindel LLP which serves as counsel to the Trust. Prior to such time, Mr. Kobrin was a partner at Cahill Gordon & Reindel LLP. For fiscal 2008, the Trust paid Cahill Gordon & Reindel LLP $122,218 for legal services. During fiscal 2008, John H. Van Kirk, the father of John R. Van Kirk, received $10,000 for his service as Founding Trustee Emeritus. In this role, he remains available for periodic consultation by the Trustees and Managing Director.
Review, Approval or Ratification of Transactions with Related Persons
The Trustees have adopted a written policy with respect to transactions with related persons (the “Policy”). The Policy is set forth below compares,in the Trust’s Code of Conduct and Business Ethics and is available on the Trust’s website at www.neort.com/ethics.html. The Policy provides that any proposed Related Person Transaction (as defined below) be submitted to the Trustees for consideration. In determining whether or not to approve the last five years,transaction, the cumulative returnPolicy provides that the Trustees shall consider all of the relevant facts and circumstances available to the Trustees, including (if applicable): the benefits to the Trust; the impact on Trust Units, the securities in a peer group index,Related Person’s (as defined below) independence; the availability of other sources for comparable products or services; the terms of the transaction; and the S&P 500 Composite Index. Because no published peer group index exists,terms available to unrelated third parties or to employees generally. The Policy provides that the Trustees have developed a peer group consistingshall approve only those Related Person Transactions that are in, or are not inconsistent with, the best interests of the following three domestic oil royalty trusts: Mesa Royalty Trust, Sabine Royalty Trust and San Juan Basin Royalty Trust (the "Royalty Peer Group"). The composition of the Royalty Peer Group has been the same since the Trust's proxy statement for its 1993 Annual Meeting of Unit Owners.
For purposes of the Policy, a “Related Person” means (1) any person who is, or at any time since the beginning of the Trust’s last fiscal year was, a Trustee or executive officer of the Trust or a nominee to become a Trustee of the Trust; (2) any person who is known to be the beneficial owner of more than 5% of Trust’s units; and (3) any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the Trustee, executive officer, nominee or more than 5% beneficial owner, and any person (other than a tenant or employee) sharing the household of such Trustee, executive officer, nominee or more than 5% beneficial owner.
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AUDIT COMMITTEE
All of the Trustees, with the exception of Lawrence A. Kobrin, constitute the Audit Committee of the Trustees of North European Oil Royalty Trust.Trust (the “Audit Committee”). The Audit Committee meets the definition of an audit committee set forth in Section 3(a)(58)(A) of the Exchange Act. All of the members of the Audit Committee are “independent” as that term is defined in the rules of the Securities &and Exchange Commission (the “SEC”) and the applicable listing standards of New York Stock Exchange.the NYSE. The Trustees have determined that both Robert P. Adelman and Rosalie J. Wolf are audit committee financial experts, as the term is defined in the Commission rules. The Audit Committee is chaired by Samuel M. Eisenstat. The Trustees of North European Oil Royalty Trust have adopted a written Charter outlining the duties and responsibilities of the Audit Committee. Mr. Eisenstat serves on the audit committees of several funds managed by AIG Sun America Asset Management Corp. The Trustees have determined that such service by Mr. Eisenstat does not impair his ability to effectively serve on the Trust’s Audit Committee.
Pursuant to the Audit Committee Charter and the requirements of the Securities and Exchange Commission,SEC, the Audit Committee has provided the following report for inclusion in this proxy statement:
Report of the Audit Committee of the Trustees of North European Oil Royalty Trust | |
| The undersigned constitute the members of the Audit Committee. In connection with the proxy statement in which this report appears and the distribution to unit owners of the financial reports for the Trust’s fiscal year ended October 31, | |
| 1. The Audit Committee has reviewed and discussed the audited financial statements for the Trust for the fiscal year ended October 31, | |
2. The Audit Committee has discussed with representatives of Weiser LLP, | |
| 3. The Audit Committee has received the written disclosures and the letter from Weiser LLP, the independent | |
| 4. Based on the review and discussions described in this report, the Audit Committee recommended to the Trustees that the audited financial statements be included in the Trust’s Annual Report on Form 10-K for the fiscal year ended October 31, SEC. | |
| Samuel M. Eisenstat, Chairman | |
| Robert P. Adelman | |
| Willard B. Taylor | |
| Rosalie J. Wolf | |
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AUDITOR MATTERS
A representative of Weiser LLP is expected to attend the annual meeting and to be available to respond to appropriate questions from unit owners. The representative from Weiser LLP will also have the opportunity to make a statement at the meeting if he/she chooses to do so.meeting.
Fees Billed by Independent Auditors
Audit Fees
For the fiscal year ended October 31, 2005,2008, the Trust agreedpaid $61,921 to pay $47,800 as the aggregate amountWeiser LLP for audit services to E&Y. For the fiscal year ended October 31, 2006, E&Y proposed a significantly higher audit fee of $75,000-$80,000. Following subsequent discussions, E&Y agreed to bill the trust at the prior year’s rate pending the retention of a new auditor. At the time of the replacement of E&Y prior to the third quarter review, the Trust had already paid $23,900 to E&Y. With respect to fiscal 2006, the Trust agreed to pay Weiser $49,000 forincluding the review of the first three fiscal quarters, the year-end audit and the attestation to the sufficiency of the Trust’s internal control over financialcontrols. For the fiscal year ended October 31, 2007, the Trust paid $51,539 to Weiser LLP for audit services. In addition, expenses related to the transition from the Trust’s previous auditor, Ernst & Young LLP and subsequent reporting requirements in the amounts of $3,500 and $8,500 were paid to be performed by Weiser.Ernst & Young LLP in fiscal 2008 and 2007, respectively.
Audit-Related Fees and Tax Fees
No fees for audit related services were billed duringpaid in either fiscal 2008 or 2007.
Tax Fees
No fees for tax related services were paid in either fiscal 2008 or 2007.
All Other Fees
For the fiscal years endingyear ended October 31, 20052008, the Trust paid $1,390 to Weiser LLP for research into withholding requirements for foreign individuals. For the fiscal year ended October 31, 2007, the Trust paid Weiser LLP $6,734 for non-audit related services related to the establishment of a SIMPLE IRA for the Trust’s employees, review and 2006 for services renderedrevision of language in the Tax Letter to Unit Owners and confirmation of the suitability of the new accounting software implemented by the Trust’s independent accountants for audit-related fees or tax fees.
At the Trust’s direction and as part of its monitoring process, the German affiliate of E&Y LLP, Ernst & Young AG, reviewedreviews the basis for royalty payments and allowable cost deductions for Mobil Erdgas Erdol GmbH and BEB Erdgas und UrdolErdol GmbH in Germany on a biennial basis. The Trust paid $52,287 for the period 2003-04 and has been paid $8,041.72 by the Trustthese services in fiscal 2006.2008. No fees for these services were paid during fiscal 2007.
Pre-Approval Policies
It is the policy of the Audit Committee that all audit and non-audit services provided to the Trust must be pre-approved by the Audit Committee. All of the audit and non-audit services described above were pre-approved by the Audit Committee.
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GOVERNANCE AND NOMINATIONS
Trustee Independence
With the exception of the Lawrence A. Kobrin, none of the Trustees have a financial relationship with the Trust other than as Trustees under the terms of the Trust Agreement. Until December 31, 2006, Mr. Kobrin was a partner of the law firm of Cahill Gordon & Reindel LLP in New York, New York, a position he has held since 1984. Cahill Gordon & Reindel LLP has provided legal services to the Trust since that time. Mr. Kobrin is currently senior counsel to Cahill Gordon & Reindel LLP. The Trustees have determined that all the current Trustees are considered independent according to the rules of the New York Stock Exchange. Prior to his retirement as Managing Trustee effective October 31, 2006, John H. Van Kirk was not considered independent. NYSE.
Committees
The independentTrustees have designated a standing Audit Committee of the Trustees of North European Oil Royalty Trust and a standing Compensation Committee of the Trustees of North European Oil Royalty Trust. Samuel M. Eisenstat serves as the Chairman of both committees and Robert P. Adelman, Willard B. Taylor and Rosalie J. Wolf serve as members of both committees. Lawrence A. Kobrin is a member of the Compensation Committee. The Audit Committee has a charter, but the Compensation Committee does not.
The functions of the Audit Committee include reviewing the internal financial management and control procedures of the Trust, appointing and removing independent auditors for the Trust, and consulting with the auditors. See “Audit Committee.” The functions of the Compensation Committee include recommending to the Trustees for approval the compensation of the Managing Director, the compensation of Trustees not covered by the Trust Agreement (i.e. additional compensation to Trustees for serving in roles such as the Managing Trustee, a committee chair or the clerk of the Trustees) and any separate compensation for additional services as the committee deems necessary. See “Executive Compensation.”
The Trustees have not created and do not intend to create a Governance Committee or a Nominating Committee. It is the opinion of the Trustees that no such committees are necessary since the Trust Agreement and orders of the Delaware Court of Chancery provide the framework for governance of the Trust. A copy of the Trust Agreement, as amended, is on file with the SEC and is available at the Trust’s website, www.neort.com.
Meetings and Attendance
During fiscal 2008, the Trustees met eight times. The Trustees, presided over by the Managing Trustee, met in executive session twice during fiscal 2006without management and had additional communications as needed during fiscal 2008. During fiscal 2008 the Audit Committee and the Compensation Committee met formally three times and one time, respectively, and each had additional informal meetings and communications. All of the Trustees attended 100% of all of the meetings of the Trustees and the meetings of the Audit Committee and the Compensation Committee (if a member thereof) during fiscal 2008. It is the expectation of the Trustees that all of the Trustees attend each Annual Meeting of Unit Owners in person. All of the Trustees attended last year’s Annual Meeting.
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Code of Conduct and other Documents
The Trustees have created a Code of Conduct and Business Ethics. All the Trustees and the Managing Director have signed the Code of Conduct and Business Ethics. The Code of Conduct and Business Ethics, the Trustees’ Regulations and the Trust’s Audit Committee Charter are available on the Trust’s website, www.neort.com.www.neort.com. A copy of any of these documents will be furnished without charge to any unit owner who sends a written request to John R. Van Kirk, P.O. Box 456, Red Bank, NJ 07701.
Nominations
The Trustees have not created and do not intend to create a separate Nominating Committee. The ongoing supervision of the Trust requires continuity of experience and familiarity with its unique structure. The Trust is precluded from business activities and would not benefit from the rotation of its member Trustees. Rotation of the Trustees would, in the opinion of the Trustees, substantially increase costs and be counter to the best interests of the unit owners. Accordingly, absent the retirement, resignation, incapacity or death of any Trustee, the Trustees have customarily been re-nominated every year.
At such time as a vacancy occurs in the Trustees by reason of retirement, resignation or death of any Trustee, all of the remaining Trustees serve the function of a nominating committee and do so pursuant to the provisions of the Trust Agreement and the orders of the Delaware Court of Chancery.
Any unit owner may at any time communicate in writing with either the Managing Trustee, or the senior Trustee then serving, to make a nomination and such nominee will be considered by the Trustees without differentiation as to the source of the suggestion. In the event of a vacancy among the Trustees, nominees would be sought who had the background, experience and competence in those areas where the former
Trustee was proficient. They would include business experience in the extractive industries, experience with royalty trust management and general business and accounting experience.
None.
OTHER MATTERS
The Trustees are not aware of any other matter to be presented for action at the annual meeting. If any other matter is brought before the meeting, it is the intention of the persons named in the proxy to vote in accordance with their discretion pursuant to the terms of the proxy.
In accordance with the Securities Exchange Act of 1934 and rules adopted by the SEC, the Trustees, the Managing Director and persons owning more than 10% of the Trust's units (the “Reporting Persons”) are required to file reports of ownership of, and changes in ownership of, Trust units with the SEC, the NYSE and the Trust.
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Based solely on a review of such forms furnished to it and written representations from certain Reporting Persons the Trust believes that during the fiscal year ended October 31, 2008, all filing requirements applicable to the Reporting Persons have been complied with.
Communications
Any unit owner may communicate with an individual Trustee, or the Trustees as a group, or with the Audit Committee Chairman in writing. All such communications will be treated in confidence and an appropriate response or action will be taken. Communications to an individual Trustee or the Trustees as a group may be sent to the office of the Trust at P.O. Box 456, Red Bank, NJ 07701 and will be forwarded to them. Communications to the Audit Committee Chairman may also be sent by mail to the office of the Trust, marked “confidential.” The Managing Director and Audit Committee Chairman can also be reached directly through the Trust’s website, www.neort.com.www.neort.com via the Contact Form located in the Contact Section of the website.
Form 10-K
The Trust will havehas filed with the SEC prior to the Annual Meeting of Unit Owners an Annual Report on Form 10-K.10-K for the fiscal year ended October 31, 2008. A copy of thethis report for the period ended October 31, 2006, including the financial statements, will be furnished without charge to any unit owner who sends a written request to John R. Van Kirk, Managing Director, P.O. Box 456, Red Bank, New JerseyNJ 07701. A copy of the report is also accessible through the Trust’s website, www.neort.com.www.neort.com.
Unit Owner Proposals for the 20082010 Annual Meeting
The 20082010 Annual Meeting of Unit Owners is tentatively scheduled to be held on February 13, 2008.17, 2010. Any proposals of the unit owners intended to be presented at the 20082010 annual meeting must be received by the Trust by September 12, 200711, 2009, whether for inclusion in the Trust's proxy statement and form of proxy relating to that meeting. Any proposals of the unit owners intended to be presented at the 2008 annual meeting that are not to be included in the Trust’s proxy statement and form or proxy relating to that meeting must be received by the Trust by November 26, 2007.otherwise. Such proposals should be sent to John R. Van Kirk, Managing Director, P.O. Box 456, Red Bank, New JerseyNJ 07701. If the date of the 20082010 annual meeting is changed by more than 30 days from February 13, 2008,17, 2010, unit owners will be advised of such change and of the new dates for submission of proposals.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Unit Owners to be Held on February 10, 2009.
The Trust’s Proxy Statement for the 2009 Annual Meeting of Unit Owners and the Annual Report to Unit Owners for the fiscal year ended October 31, 2008 are available at: http://www.cfpproxy.com/1249.
Unit owners are urged to sign and return their proxies without delay.
BY ORDER OF THE TRUSTEES:
ROBERT P. ADELMAN Managing Trustee |
January 10, 20079, 2009