<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
</TABLE>
NORTH EUROPEAN OIL ROYALTY TRUST
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
NORTH EUROPEAN OIL ROYALTY TRUST
P.O. BOX 456
SUITE 19A, 43 WEST FRONT STREET
RED BANK, NEW JERSEY 07701
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NOTICE OF ANNUAL MEETING OF UNIT OWNERS
FEBRUARY 11, 1998
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 Wednesday, February 11, 1998, at 1:30 P.M.,
in Rooms 1 and 2, 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 as Trustees to serve until the next annual
meeting of unit owners or until their respective successors are duly
elected and qualified.
(2) To ratify the designation of Arthur Andersen LLP as auditor for the
Trust.
(3) 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 January 2, 1998 will be entitled to notice
of and to vote at the annual meeting.
BY ORDER OF THE TRUSTEES:
JOHN H. VAN KIRK
Managing Trustee
January 13, 1998
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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.
<PAGE> 3
NORTH EUROPEAN OIL ROYALTY TRUST
P.O. BOX 456
SUITE 19A, 43 WEST FRONT STREET
RED BANK, NEW JERSEY 07701
(732) 741-4008
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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 Wednesday, February 11,
1998 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 January 2, 1998 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 will be voted for the
election of the Trustees and for the ratification of Arthur Andersen LLP as
auditors. 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 which are registered
in the name of a nominee (e.g., shares 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 shares 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 13, 1998.
The Trust was formed on September 10, 1975, pursuant to the vote of the
shareholders of North European Oil Company, a predecessor corporate entity.
Certain persons may be the owners of shares of predecessor corporate entities;
such shares are entitled to be converted into units but are not considered units
entitled to vote at meetings until presented for conversion. There were
8,696,430 units of the Trust outstanding on January 2, 1998. Each unit owner is
entitled to one vote for each unit he or she holds or represents. Additional
units may be issued prior to the meeting upon presentation of evidence of
ownership or certificates of predecessor corporate entities of the Trust. 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 and to ratify the appointment of auditors.
Abstentions may be specified on all proposals, except the election of Trustees.
Abstentions will be counted as present for purposes of the item on which the
abstention is noted and, thus, will have the same effect as a vote 'against' on
such matter. With regard to the election of Trustees, votes may be cast in favor
or withheld with respect to all 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 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 of which a majority
is required for adoption.
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 of such costs will be borne by the Trust. In
addition to the use of mails, 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.
<PAGE> 4
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 shall 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.
During the fiscal year ended October 31, 1997, the Trustees met five times.
The Trustees have designated a standing Audit and Compensation Committee of
which Robert P. Adelman is the Chairman and Robert J. Castle, Samuel M.
Eisenstat and Willard B. Taylor are members. During fiscal 1997 the Audit and
Compensation Committee met formally two times and had several additional
informal meetings and communications. The function of the Audit and Compensation
Committee is to review the internal financial management procedures of the
Trust, to recommend to the Trustees independent auditors for the Trust, to
consult with the auditors, to determine the separate compensation of the
Managing Trustee and to determine the compensation of the Managing Director. The
Trustees do not have a standing nominating committee. Each of the Trustees
attended all of the meetings of the Trustees and the meetings of the Audit and
Compensation Committee (if a member thereof) either in person or by
teleconferencing during the fiscal year ended October 31, 1997.
The following table sets forth certain information, including ownership of
Trust units as of December 1, 1997, about the nominees for election as Trustees
and the Managing Director:
<TABLE>
<CAPTION>
TRUSTEE OR
DIRECTOR
OF UNITS
PREDECESSOR, BENEFICIALLY
OR OWNED AS OF PERCENT
PRINCIPAL OCCUPATION OR OFFICER, DECEMBER 1, OF
AGE EMPLOYMENT FOR PAST FIVE YEARS SINCE 1997 UNITS(1)
------------------------------------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C>
NOMINEES FOR ELECTION AS TRUSTEES
Robert P. Adelman 67 Director or Trustee of various 1987 9,000(2) 0.1%
profit and non-profit
companies
Robert J. Castle 69 President, Castle Enterprises 1965 119,800(3) 1.38%
of
Herkimer Ltd. (a holding
company)
Samuel M. Eisenstat 57 Attorney; CEO, Abjac Energy 1996 1,000 (4)
Corp.; Director, Sun America
Mutual Fund & Annuities and
Atlantic Realty Trust
Willard B. Taylor 57 Partner, Sullivan & Cromwell 1974(5) 6,619 (4)
(attorneys)
John H. Van Kirk 73 Managing Trustee 1954 77,200(6) 0.89%
MANAGING DIRECTOR
John R. Van Kirk 45 Managing Director(7) 1990 11,600(8) 0.13%
All Trustees and the Managing Director, as a group 225,219 2.59%
</TABLE>
2
<PAGE> 5
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(1) Percentage computations are based upon units actually issued and
outstanding. 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 notes (3), (6) and (8).
(2) Including all units owned by Mr. Adelman's wife.
(3) Including 7,800 units owned by Mr. Castle's wife, in which units he
disclaims beneficial interest.
(4) Less than 0.1%.
(5) Mr. Taylor also served as a director of North European Oil Company from 1970
to 1972.
(6) Including 7,200 units owned by John H. Van Kirk's wife, in which units he
disclaims beneficial interest.
(7) John R. Van Kirk, the Managing Director of the Trust, provides office space
and office services at cost to the Trust. During fiscal 1997, the Trust paid
him a total of $21,611.95 for such office space and office services.
(8) Including 4,350 units owned by John R. Van Kirk's children, in which units
he disclaims beneficial interest.
------------------------
Compliance with Section 16(a) of the Exchange Act
In accordance with the Securities Exchange Act of 1934 and rules adopted by
the Securities and Exchange Commission (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 New York Stock Exchange and the Trust.
Based solely on a review of such forms furnished to it and written
representations from certain Reporting Persons that no Form 5 reports were
required for those persons, the Trust believes that during the fiscal year ended
October 31, 1997, the Reporting Persons complied with all filing requirements
applicable to them.
3
<PAGE> 6
MANAGEMENT COMPENSATION
Report of the Audit and Compensation Committee
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. In addition, the
Managing Trustee receives additional compensation which is set by the Audit and
Compensation Committee of the Trustees. The Committee also fixes the annual
compensation of the Managing Director.
In setting the compensation amounts, the Committee takes into account the
amount of time these two executives are expected to devote to the Trust's
affairs, the nature of the Trust's affairs and its limited administrative budget
and structure, and the experience that each executive has in handling the
Trust's affairs. The Committee also takes into consideration the allocation of
administrative and management responsibilities between the Managing Trustee and
the Managing Director. The Managing Trustee is responsible for managerial
oversight of the Trust's affairs and the Managing Director handles day to day
matters of the Trust.
The Trust's financial results are determined primarily by factors not
within the control of its executives or the Trustees, including energy prices in
Europe, currency exchange rates, production and sales by others and energy
supply contracts. The Committee continues to believe that the time required and
the level of skill with which the Managing Trustee and the Managing Director
handle the administrative and financial affairs of the Trust, rather than the
Trust's financial results, are the significant factors in determining their
respective compensation.
Robert P. Adelman, Chairman
Robert J. Castle
Samuel M. Eisenstat
Willard B. Taylor
Trustee and Officer Compensation
Set forth below is a table summarizing the compensation paid to the
Managing Trustee and the Managing Director during the indicated fiscal years of
the Trust:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
NAME AND
PRINCIPAL POSITIONS YEAR COMPENSATION
------------------------------------------------ ----- ------------
<S> <C> <C>
John H. Van Kirk, 1997 $ 56,271
Managing Trustee (1) 1996 $49,118
1995 $47,852
John R. Van Kirk 1997 $ 80,000
Managing Director 1996 $79,167
1995 $74,167
</TABLE>
(1) The compensation amounts indicated for John H. Van Kirk include both
the amounts paid to him in accordance with the Trust Agreement as a Trustee and
the separately fixed compensation paid to him as Managing Trustee.
------------------------
During fiscal 1997, each Trustee was paid a fee of $26,271 pursuant to a
formula contained in the Trust Agreement. In addition, the Trustees are
reimbursed for reasonable out-of-pocket expenses incurred in connection with
travel to and accommodations for meetings of the Trustees. The Trustees do not
receive, either directly or indirectly, securities or property, insurance
benefits or personal benefits or other similar forms of compensation.
4
<PAGE> 7
Compensation Committee Interlocks and Insider Participation
During fiscal 1997, Messrs. Adelman, Castle, Eisenstat and Taylor served on
the Trust's Audit and Compensation Committee.
Comparison of Five Year Returns
The graph set forth below compares, for the last five years, the cumulative
return on Trust units, the securities in a peer group index and the S&P 500
Composite Index. Because no published peer group index exists, the Trustees have
developed a peer group consisting 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. In determining the cumulative returns on investment, it has been
assumed that on October 31, 1992, an equal dollar amount was invested in Trust
units, in the securities of the trusts in the Royalty Peer Group and in the S&P
500 Composite Index. The comparisons assume in all cases the reinvestment of all
dividends or distributions on the respective payment dates. The cumulative
returns shown for the Trust and the Royalty Peer Group do not reflect any
differences between the tax treatment of trust distributions, due to permitted
cost depletion, and dividends on securities in the S&P 500 Composite Index. As
indicated above, because the Trust's financial results are determined primarily
by factors not within the control of its executives, the Trust's financial
results are not a significant consideration in determining the compensation of
its executives.
<TABLE>
<CAPTION>
Measurement Period North European Royalty Peer
(Fiscal Year Covered) Oil Royalty Trust S&P 500 Index Group
<S> <C> <C> <C>
Oct-92 100.00 100.00 100.00
Oct-93 102.12 114.94 145.25
Oct-94 95.80 119.39 121.26
Oct-95 93.06 150.96 99.49
Oct-96 105.98 187.33 136.44
Oct-97 144.92 247.48 207.61
</TABLE>
5
<PAGE> 8
RATIFICATION OF AUDITOR DESIGNATION
Unit owners will be requested to ratify the designation of the independent
certified public accountants who serve as auditors for the Trust and whose
report is furnished to the unit owners. The firm of Arthur Andersen LLP has
served as auditors for the Trust or its predecessor corporate entity since 1966.
As recommended by the Audit and Compensation Committee, a resolution will be
presented to the meeting confirming the designation of said firm as auditors for
the Trust for the fiscal year ending October 31, 1998.
For the fiscal year ended October 31, 1997, the Trust agreed to pay $19,500
as the aggregate amount for audit services to be performed by Arthur Andersen
LLP. At the Trust's direction and as part of its monitoring process, Arthur
Andersen LLP audited Mobil Oil A.G. in Germany and billed the Trust $22,601. The
aggregate amount paid by the Trust to Arthur Andersen LLP for non-audit services
was $2,500.
Representatives of Arthur Andersen LLP are expected to be at the annual
meeting and to be available to respond to appropriate questions from unit
owners. Such representatives will also have the opportunity to make a statement
to the meeting if they choose to do so.
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.
FORM 10-K
THE TRUST WILL HAVE FILED WITH THE SEC PRIOR TO THE ANNUAL MEETING OF UNIT
OWNERS AN ANNUAL REPORT ON FORM 10-K. A COPY OF THE REPORT FOR THE PERIOD ENDED
OCTOBER 31, 1997, INCLUDING THE FINANCIAL STATEMENTS, WILL BE FURNISHED WITHOUT
CHARGE TO ANY UNIT OWNER WHO SENDS A WRITTEN REQUEST TO JOHN H. VAN KIRK,
MANAGING TRUSTEE, P.O. BOX 456, RED BANK, NEW JERSEY 07701.
UNIT OWNER PROPOSALS FOR THE 1999 ANNUAL MEETING
Any proposals of unit owners intended to be presented at the 1999 annual
meeting must be received by the Trust by September 15, 1998 for inclusion in the
Trust's proxy statement and form of proxy relating to that meeting. Such
proposals should be sent to John H. Van Kirk, Managing Trustee, P.O. Box 456,
Red Bank, New Jersey 07701.
Unit owners are urged to sign and return their proxies without delay.
BY ORDER OF THE TRUSTEES
JOHN H. VAN KIRK
Managing Trustee
January 13, 1998
6
<PAGE> 9
/X/ PLEASE MARK VOTES AS REVOCABLE PROXY
IN THIS EXAMPLE NORTH EUROPEAN OIL ROYALTY TRUST
ANNUAL MEETING OF UNIT OWNERS -- FEBRUARY 11, 1998
This Proxy is solicited on behalf of the Trustees. The undersigned
hereby appoints John H. Van Kirk, Robert P. Adelman and Lawrence A. Kobrin, and
any of them, proxies, with several power of substitution, to vote all units of
the undersigned as instructed below and in their discretion upon other matters,
including matters incident to the conduct of the meeting, which may come before
the annual meeting of unit owners of North European Oil Royalty Trust to be held
on February 11, 1998 or any adjournment thereof, hereby revoking any prior
proxy. The undersigned has received the notice of meeting and proxy statement
dated January 13, 1998.
The Trustees recommend a vote "FOR" Proposals 1 and 2.
FOR ALL WITH-
FOR EXCEPT HOLD
1. Election of Trustees / / / / / /
NOMINEES: ROBERT P. ADELMAN, ROBERT J. CASTLE, SAMUEL M. EISENSTAT, WILLARD B.
TAYLOR, JOHN H. VAN KIRK
INSTRUCTION: To withhold your vote for any nominee(s), mark "For All Except"
and write that nominee's name on the line below.
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FOR AGAINST ABSTAIN
2. Ratification of Arthur Andersen LLP as / / / / / /
auditors for the Trust.
IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED FOR ELECTION OF THE
TRUSTEES AND FOR PROPOSAL 2.
Please be sure to sign and date Date
this Proxy in the box below ------------------
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Stockholder sign above Co-holder (if any) sign above
______________________________________________________________________________
DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED.
NORTH EUROPEAN OIL ROYALTY TRUST
This proxy must be signed as name appears hereon. Executors, administrators,
trustees, etc., should give full title as such. If the signer is a
corporation, sign full corporate name by duly authorized officer.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
