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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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Texas Pacific Land Trust
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(Name of the Registrant as Specified In Its Charter) |
KINETICS ASSET MANAGEMENT LLC
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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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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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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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.
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(1)
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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Filing Party:
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Date Filed:
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Q1: |
In the quarterly and annual reports of AMEN Properties, LLC (“AMEN”), you are
described as serving on the board of the “First National Bank of Midland.” We have been unable to confirm that any such bank exists. A shareholder of AMEN pointed this out to you in a letter as early as 2012 (the letter is
attached hereto as Exhibit A) and asked you to explain also several other contradictions in your resume. Please provide an explanation of these discrepancies.
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FirstCapital Bank of Texas, National Association was formerly known as First National Bank of Midland and changed its name to FirstCapital Bank of Texas, National
Association in July 2010.
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SoftSearch Investments, Inc. reorganized into SoftSearch Investments, LP. I served as President of the SoftSearch Investments, Inc. and I am the
managing member of the General Partner of SoftSearch Investments, LP.
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I served on the Board of Directors of Love and Care Ministries, an inner city homeless initiative, from 1999 until 2016.
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Q2: |
According to your video released on April 16, 2019, former General Agent and Chief
Executive Officer Roy Thomas entrusted you over ten years ago with confidential surface maps of the Trust. Please address whether you have used that confidential information to acquire any assets, trade any securities (or
options), or pursue any commercial or financial ventures, whether personally or through any entity under your direction.
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A: |
As noted in my April 16, 2019 video, Roy Thomas provided me certain maps over ten years ago that show the surface and non-participating royalty interest (NPRI) acreage
of Trust properties. But I did not say in the video that the information was “confidential,” as your question incorrectly states. In fact, all of the information on the maps is public information and filed in each county where the
properties reside. The Trust has also previously included a map depicting the Trust’s surface acreage in its annual reports. Furthermore, there is also a link on the Trust’s website under the heading “Maps” showing the same.
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Q3: |
In its governing documents, AMEN committed to donate 10% of its earnings to Christian
charitable organizations. It appears that beginning as early as 2015, AMEN stopped making these donations and instead began paying a “tithing” dividend to its shareholders with no obligation to make a donation. Based on AMEN’s
public disclosures, it appears that you and your family members are among the largest shareholders of AMEN and that there was no shareholder vote to change the governing documents of AMEN. Please provide an explanation of the
apparent discrepancy with respect to the AMEN governing documents as well as an explanation of this apparent conflict of interest.
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This issue has already been publicly disclosed by AMEN in press releases going
back to 2015, which your advisors and/or private investigators seem to have missed.
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https://www.businesswire.com/news/home/20150313005730/en/Amen-Properties-Reports-Results-Fourth-Quarter-2014
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Q4: |
Santa Monica Partners, a 0.2% shareholder of the Trust, acquired its shares
immediately after you launched the proxy contest and issued a Schedule 13D (required only by shareholders owning 5% or more) in support of your candidacy. As described in our investor presentation dated April 25, 2019, Santa
Monica has a longstanding relationship with Horizon Kinetics and its co-founder Murray Stahl. As a consequence, it appears that Santa Monica may be an undisclosed member of your group and a hidden participant in your proxy
solicitation, in violation of Regulation 13D and Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended. Please provide an explanation of this relationship and why the relationship with Santa Monica was
not disclosed.
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Per your request, I have inquired on the subject, and have been advised that Santa Monica Partners has owned shares of the Trust since 2005, not “immediately after [we]
launched the proxy contest” as you claim. The 112 Trust shares purchased that Santa Monica Partners disclosed in their Schedule 13D, of course, reflects only transactions made within the last 60 days of the filing; total ownership
by Santa Monica Partners was listed as 17,892 shares. Nonetheless, I have been further advised that Mr. Stahl and other professionals certainly know Santa Monica Partners, and dozens of other funds in New York City and around the
country who own the Trust. I see no basis for having to disclose the relationship in the context of this proxy contest, as we neither formed a group for Regulation 13D purposes, nor did they become “participants” in the
solicitation for Regulation 14A purposes. If you have any specific information that leads you and your advisors to a different legal conclusion, you are certainly free to share the facts and conclusions with me, the Investor Group
and other TPL shareholders.
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Universal Guaranty Life Insurance Company (“UGLIC”), a holder of 39,000 shares of the
Trust, issued a press release in “enthusiastic support” of you. As described in our investor presentation dated April 25, 2019, UGLIC has a longstanding relationship with you. We also learned that you were an 8.2% shareholder of
UGLIC as recently as 2016. As a consequence, we have reason to believe that UGLIC is an undisclosed member of your group and a hidden participant in your proxy solicitation, in violation of Regulation 13D and Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended. Please provide an explanation of this relationship and why the relationship with UGLIC was not disclosed.
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We are not part of any Regulation 13D “group” with UGLIC, and have so confirmed with counsel. I have also reviewed the definition of “participant” with our counsel,
and can confirm that UGLIC is not a participant of SoftVest’s solicitation for Regulation 14A purposes.
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During your tenure as AMEN’s Chair and CEO, your investment firm SoftVest provided
AMEN a preferred promissory note that financed a royalty acquisition in late 2007. Please explain what efforts were taken to ensure that this related party transaction was negotiated on an arms-length basis such that it did not
constitute unlawful self-dealing.
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With respect to this financing provided by SoftVest to AMEN almost 12 years ago, I recall recusing myself from AMEN Board meetings regarding such financing and taking other steps suggested by counsel at that time. All information related to the transaction, including copies of
the relevant agreement, were fully disclosed at the time in accordance with federal securities law requirements.
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Q7: |
We have reason to believe that your group has engaged in undisclosed proxy
solicitation using various online sources, including forums, paid investment discussion websites and blogs. Please explain whether your group, or others at your group’s direction or in consultation with it, have engaged in such
undisclosed proxy solicitation in connection with your candidacy.
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I respectfully submit that your question makes no sense. As you know, both sides are actively engaged in solicitation of proxies. Both sides have filing obligations
with the SEC, and the Investor Group has certainly completed all required filings. I can very much confirm that.
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Q8. |
We have reason to believe that your group and your affiliates and associates,
directly and indirectly, own a significant number of oil and gas interests, at least some of which are located in the Permian Basin through various entities, including AMEN, SoftVest and affiliated entities. Please describe those
interests and explain whether they do business with or compete with the Trust, or are in a position to profit from the activities of the Trust.
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We have reason to believe that your family members, including your brother and sons,
own a significant number of oil and gas interests, at least some of which are located in the Permian Basin through various entities. Please describe those interests and explain whether they do business with or compete with the
Trust, or are in a position to profit from the activities of the Trust.
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A8&9: |
Myself, plus my affiliates and family members, own just under 4,000 net acres of surface. Based on the information the Trust has made available, less than 100 of those
net acres are within nine miles of TPL acreage.
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I am not aware of any conflicts of interest between myself, affiliates and direct family members, on one hand, and TPL, on the other hand. If any were to arise in the future (or if facts exist that have not been disclosed
currently by TPL), then I will of course recuse myself of any relevant discussion as is proper governance practice.
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Sincerely, |
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Eric Oliver |