NORTH
EUROPEAN OIL ROYALTY TRUST
43
West Front Street, Suite 19A
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”), pursuant to Article 14 of its Agreement of Trust
will be held on Tuesday, February 10, 2009, at 1:00 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:
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(1)
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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.
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(2)
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To
transact such other business as may properly come before the
meeting.
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The
transfer books of the Trust will not be closed. Only unit owners of record as of
the close of business on December 29, 2008 will be entitled to notice of and to
vote at the annual meeting.
BY ORDER
OF THE TRUSTEES:
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ROBERT
P. ADELMAN
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Managing
Trustee
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January
9, 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
43
West Front Street, Suite 19A,
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”) to be used at the
Annual Meeting of Unit Owners to be held on Tuesday, February 10, 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, 2008 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”) 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”) 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 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, 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 or 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” such election.
In the
event of a broker non-vote with respect to any issue coming before the annual
meeting, 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 a record 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 considered a “discretionary” item.
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 below 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.
Nominees
for Election as Trustees
The
following sets forth certain information about the nominees for election as
Trustees:
Robert P. Adelman, 78, is a
director or trustee of various profit and non-profit companies. Mr. Adelman has
been a Trustee since 1987.
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.
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.
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Number
of
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Shares
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Percentage
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Beneficially
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Beneficially
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Name and Position of
Beneficial Owner
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Owned
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Owned
(1)
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Robert
P. Adelman, Managing Trustee
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8,600
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*
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Samuel
M. Eisenstat, Trustee
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6,000
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*
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Lawrence
A. Kobrin, Trustee (2)
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1,700
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*
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Willard
B. Taylor, Trustee
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6,619
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*
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Rosalie
J. Wolf, Trustee
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3,000
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*
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John
R. Van Kirk, Managing Director (3)
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9,251
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*
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All
Trustees and executive officers as a group (6 persons)
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35,170
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____________________
* Less
than one percent
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(1)
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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 note (2).
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(2)
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Includes
500 units owned by Mr. Kobrin’s wife, in which units he disclaims
beneficial interest.
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(3)
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Mr.
Van Kirk, 56, has been the Managing Director of the Trust since 1990. Mr.
Van Kirk’s units are all pledged as security in a margin account he
maintains.
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Other
Unit Ownership
No person
known to the Trust owns beneficially more than 5% of the Trust’s
units.
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
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.
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Report
of the Compensation Committee of the Trustees of North European Oil
Royalty Trust
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The
Compensation Committee has reviewed and discussed the Compensation
Discussion and Analysis (which is set forth above) with management. Based
on this review and discussions, the Compensation Committee recommended to
the Trustees that the Compensation Discussion and Analysis be included in
this Proxy Statement.
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Samuel
M. Eisenstat, Chairman
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Robert
P. Adelman
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Lawrence
A. Kobrin
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Willard
B. Taylor
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Rosalie
J. Wolf
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Summary
Compensation Table
Set forth
below is a table summarizing the compensation of the Managing Director (the only
executive officer of the Trust) for fiscal 2008.
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All
Other
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Salary
($)
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Bonus
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Compen-
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Name
and Principal Position
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Year
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(1)
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($)
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sation
($)
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Total
($)
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John
R. Van Kirk - Managing Director
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2008
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$105,000
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$
7,500
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$ 3,375
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$115,875
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(1)Mr.
Van Kirk’s salary is determined on a calendar year basis and was $105,000 for
calendar 2007 and 2008.
Trustee
Compensation
Set forth
below is a table summarizing the compensation earned by the Trustees during
fiscal 2008.
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Fees
Earned or Paid in
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All
Other
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Name
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Cash
($)
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Compensation
($)
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Total
($)
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Robert
P. Adelman - Managing Trustee
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$100,984
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$
0
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$100,984
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Samuel
M. Eisenstat - Audit Committee
Chairman
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$
79,984
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$
0
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$
79,984
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Lawrence
A. Kobrin - Clerk
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$
79,984
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$
0
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$
79,984
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Willard
B. Taylor - Trustee
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$
69,484
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$
0
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$
69,484
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Rosalie
J. Wolf - Trustee
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$
69,484
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$
0
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$
69,484
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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 receives 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 $69,484 during fiscal 2008. Any compensation for additional
services provided to the Trust 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 for his service as Managing Trustee at an annual rate of $33,000 (an
increase of $3,000 over the prior rate of $30,000). Effective May 1, 2008, the
Trustees set the additional
compensation
for Mr. Eisenstat and Mr. Kobrin for their services as Audit Committee 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 and other required
services performed on behalf of the Trust. For fiscal 2008, total reimbursed
out-of-pocket expenses for all the Trustees were $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.
TRANSACTIONS
WITH RELATED PERSONS
Transactions
with Related Persons
The
following 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 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 transaction, the Policy 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 the Related
Person’s (as defined below) independence; the availability of other sources for
comparable products or services; the terms of the transaction; and the terms
available to unrelated third parties or to employees generally. The Policy
provides that the Trustees shall approve only those Related Person Transactions
that are in, or are not inconsistent with, the best interests of the Trust and
its unit owners.
For
purposes of the Policy, a “Related Person Transaction” is a transaction,
arrangement or relationship (or any series of similar transactions, arrangements
or relationships) in which the Trust was, is or will be a participant, and in
which any Related Person had, has or will have a direct or indirect material
interest.
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.
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 (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 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 SEC, the Audit
Committee has provided the following report for inclusion in this proxy
statement:
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Report
of the Audit Committee of the Trustees of North European Oil Royalty
Trust
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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, 2008, the Audit Committee reports as
follows:
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1.
The Audit Committee has reviewed and discussed the audited financial
statements for the Trust for the fiscal year ended October 31, 2008 with
the Managing Director of the Trust, constituting its ongoing
management.
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2.
The Audit Committee has discussed with representatives of Weiser LLP, the
independent registered public accounting firm of the Trust, the matters
required to be discussed by the statement on Auditing Standards No. 61, as
amended (AICPA, Professional Standards,
Vol. 1. AU section 380), as adopted by the Public Company Accounting
Oversight Board (the “PCAOB”) in Rule 3200T.
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3.
The Audit Committee has received the written disclosures and the letter
from Weiser LLP, the independent registered public accounting firm of the
Trust required by applicable requirements of the PCAOB regarding Weiser
LLP’s communications with the Audit Committee concerning independence, and
has discussed with Weiser LLP their independence.
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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, 2008 for filing with the
SEC.
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Samuel
M. Eisenstat, Chairman
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Robert
P. Adelman
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Willard
B. Taylor
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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.
Fees
Billed by Independent Auditors
Audit
Fees
For the
fiscal year ended October 31, 2008, the Trust paid $61,921 to Weiser LLP for
audit services including the review of the first three fiscal quarters, the
year-end audit and the attestation to the sufficiency of the Trust’s internal
controls. 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 Ernst
& Young LLP in fiscal 2008 and 2007, respectively.
Audit-Related
Fees
No fees
for audit related services were paid 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 year ended October 31, 2008, 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 revision of language in the Tax Letter to Unit Owners and
confirmation of the suitability of the new accounting software implemented by
the Trust’s management.
At the
Trust’s direction and as part of its monitoring process, the German affiliate of
E&Y LLP, Ernst & Young AG, reviews the basis for royalty payments and
allowable cost deductions for Mobil Erdgas Erdol GmbH and BEB Erdgas und Erdol
GmbH in Germany on a biennial basis. The Trust paid $52,287 for these services
in fiscal 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.
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 NYSE.
Committees
The
Trustees 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 without 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.
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. 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.
Compensation
Committee Interlocks and Insider Participation
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.
Section
16(a) Beneficial Ownership Reporting Compliance
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.
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 via the
Contact Form located in the Contact Section of the website.
Form
10-K
The Trust
has filed with the SEC an Annual Report on Form 10-K for the fiscal year ended
October 31, 2008. A copy of this report 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, NJ 07701. A copy of the report is also accessible
through the Trust’s website, www.neort.com.
Unit
Owner Proposals for the 2010 Annual Meeting
The 2010
Annual Meeting of Unit Owners is tentatively scheduled to be held on February
17, 2010. Any proposals of the unit owners intended to be presented at the 2010
annual meeting must be received by the Trust by September 11, 2009, whether for
inclusion in the Trust's proxy statement and form of proxy relating to that
meeting or otherwise. Such proposals should be sent to John R. Van Kirk,
Managing Director, P.O. Box 456, Red Bank, NJ 07701. If the date of the 2010
annual meeting is changed by more than 30 days from February 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
9, 2009