Permian Basin Royalty Trust (PBT) Proxy Filing summary

Executive summary

• Proxy solicitation seeks Unitholder approval for judicial reformation of the Trust Indenture to allow amendments by a simple majority vote at special meetings, replacing the current super-majority requirement.

• The proposals are initiated by SoftVest, L.P. and affiliates, who collectively own 13.3% of outstanding Units.

• The Indenture Reformation Proposal is non-binding but, if approved, SoftVest intends to petition a Texas court for the change.

• The Adjournment Proposal allows the meeting to be adjourned to solicit more proxies if needed.

• The current Trust structure and voting requirements are viewed as limiting Unitholder value and flexibility, especially regarding strategic transactions and potential conversion to a corporate structure.

Voting matters and shareholder proposals

• Proposal One: Judicial reformation of the Trust Indenture to permit amendments by a simple majority of votes cast at a special meeting with quorum.

• Proposal Two: Adjournment of the Special Meeting, if necessary, to solicit additional proxies in favor of Proposal One.

• Both proposals are recommended for approval by the soliciting parties.

• No other matters are expected to be brought before the meeting.

Board of directors and corporate governance

• The Trust is managed by a Trustee, not a board of directors; all administrative functions are performed by the Trustee.

• Proposed conversion to a corporation or LLC would introduce a board of directors or governing body with modern governance principles.

• The Indenture Reformation would allow Unitholders to remove the Trustee by a simple majority vote.