TXO Partners LP

General

We do not directly employ any of the persons responsible for managing our business. Our general partner’s executive officers manage our business as part of the services provided by our general partner to us under our partnership agreement. Although all of the employees that conduct our business are either employed by our general partner or its subsidiaries, we sometimes refer to these individuals in this Annual Report on Form 10-K as our employees.

All of our general partner’s executive officers and other employees necessary to operate our business are employed and compensated by either our general partner or a subsidiary of the general partner, subject to reimbursement by our general partner. The compensation for all of our executive officers will be indirectly paid by us to the extent provided for in the partnership agreement because we will reimburse our general partner for compensation it pays related to management of our business.

Our compensation committee is responsible for reviewing and making recommendations to our board of directors with respect to the compensation of our chief executive officer and determining the compensation of our other executive officers. Our predecessor historically compensated certain of its executive officers primarily with base salary and cash bonuses. However, the compensation committee may consider the compensation structures and levels that they believe will be necessary for executive recruitment and retention for us as a public company.

Emerging Growth Company Status

As an emerging growth company we are exempt from certain requirements related to executive compensation, including the requirements to hold a nonbinding advisory vote on executive compensation and to provide information relating to the ratio of total compensation of our chief executive officer to the median of the annual total compensation of all of our employees, each as required by the Investor Protection and Securities Reform Act of 2010, which is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The rules applicable to emerging growth companies require compensation disclosure for any individuals serving as our principal executive officer during the last completed fiscal year and the two most highly compensated executive officers other than our principal executive officer, as well as up to two additional individuals who would have been one of the two most highly compensated executive officers had they remained employed as of the last day of the year. We refer to these officers as our “Named Executive Officers” or “NEOs”. Our NEOs for 2024 consist of the following three individuals:

•Bob R. Simpson, our Chief Executive Officer and Chairman of the Board;

•Brent W. Clum, our President of Business Operations, Chief Financial Officer, and Director; and

•Scott T. Agosta, our Chief Accounting Officer.

2024 Summary Compensation Table

The following table sets forth compensation for our NEOs, for the years ended December 31, 2024, 2023 and 2022.

(1)Amounts reported represent the aggregate grant date fair value of common units awarded to each NEO, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation – Stock Compensation, based on the fair market value of a common unit as of the grant date and the number of common units subject to award. The assumptions used in determining the valuation of the unit awards are found in Note 12 to the Consolidated Financial Statements.

(2)The amounts disclosed in this column reflect distributions received on unvested phantom units totaling $269,733 for Mr. Clum and $155,493 for Mr. Agosta in 2024 and $75,000 for Mr. Clum and $75,000 for Mr. Agosta in 2023 and matching contributions made on behalf of employees under our 401(k) plan in 2024 ($35,281 for Mr. Clum and $34,329 for Mr. Agosta), 2023 ($20,838 for Mr. Clum and $30,930 for Mr. Agosta) and 2022.

(3)Mr. Simpson was appointed as Chief Executive Officer in July 2022. Mr. Simpson did not receive any compensation in his capacity as Chief Executive Officer or as Chairman and Director of the Board in 2022, 2023 or 2024.

Narrative to 2024 Summary Compensation Table

Annual Base Salaries

For the 2024 year, the NEOs received an annual base salary to provide a fixed component of compensation reflecting the executive’s skill set, experience, role and responsibilities. The 2024 annual base salaries for our NEOs were as set forth in the Summary Compensation Table.

2024 Annual Performance Bonus

The NEOs are eligible to receive a discretionary annual cash bonus which was determined by the board of directors. The 2024 annual performance bonuses for our NEOs were set forth in the Summary Compensation Table.

Other Elements of Compensation

Retirement Plan

We maintain a 401(k) retirement savings plan that allows employees to contribute and defer a portion of their wages. Regardless of an employees’ decision to participate in the 401(k) plan, we make a non-elective contribution equal to 3% of each employees’ wages. Additionally, we have the ability to make a discretionary annual match as determined by the general partner. Effective January 1, 2023, we began matching employee contributions up to 7% of wages, subject to annual dollar maximums established by the federal government and plan limitations. We believe that providing a vehicle for tax-deferred retirement savings through our 401(k) plan adds to the overall desirability of our executive compensation package and further incentivizes our employees, including our NEOs, in accordance with our compensation policies.

The employer matching contributions to the 401(k) retirement savings plan on behalf of our participating NEOs are set forth above in the 2024 Summary Compensation Table in the column titled “Value of All Other Compensation.”

We do not maintain, sponsor, contribute to or otherwise have any liability with respect to any single or multiemployer defined benefit pension plan or nonqualified deferred compensation plan.

Long-Term Incentive Plan

We have adopted the TXO Partners, L.P. 2023 Long-Term Incentive Plan (the “LTIP”) under which our general partner may issue long-term equity based awards to directors, officers and employees of our general partner or its affiliates, or to any consultants, affiliates of our general partner or other individuals who perform services for us. These awards will be intended to compensate the recipients thereof based on the performance of our common units and their continued service during the vesting period, as well as to align their long-term interests with those of our unitholders. We will be responsible for the cost of awards granted under the LTIP and all determinations with respect to awards to be made under the LTIP will be made by the board of directors of our general partner or any committee thereof that may be established for such purpose or by any delegate of the board of directors or such committee, subject to applicable law, which we refer to as the plan administrator. The Compensation Committee of the board of directors of our general partner has been designated as the plan administrator. The following description reflects the terms of the LTIP.

General

The LTIP provides for the grant, from time to time at the discretion of the board of directors of our general partner or any delegate thereof, subject to applicable law, of cash awards, unit awards, restricted units, phantom units, unit options, unit appreciation rights, distribution equivalent rights, profits interest units and other unit-based awards. The purpose of awards under the LTIP is to provide additional incentive compensation to individuals providing services to us, and to align the economic interests of such individuals with the interests of our unitholders. The LTIP limits the number of units that may be delivered pursuant to vested awards to common units, subject to proportionate adjustment in the event of unit splits and similar events. Common units subject to awards that are cancelled, forfeited, withheld to satisfy exercise prices or tax withholding obligations or otherwise terminated without delivery of the common units will be available for delivery pursuant to other awards.

Cash Awards

The plan administrator of the LTIP, in its discretion, may grant cash awards, either as standalone awards or in tandem with other awards. A cash award is an award denominated in cash.

Restricted Units and Phantom Units

A restricted unit is a common unit that is subject to forfeiture. Upon vesting, the forfeiture restrictions lapse and the recipient holds a common unit that is not subject to forfeiture. A phantom unit is a notional unit that entitles the grantee to receive a common unit upon the vesting of the phantom unit or on a deferred basis upon specified future dates or events or, in the discretion of the plan administrator, cash equal to the fair market value of a common unit. The plan administrator of the LTIP may make grants of restricted units and phantom units under the LTIP that contain such terms, consistent with the LTIP, as the plan administrator may determine are appropriate, including the period over which restricted units or phantom units will vest. The plan administrator of the LTIP may, in its discretion, base vesting on the grantee’s completion of a period of service or upon the achievement of specified financial objectives or other criteria or upon a change of control (as defined in the LTIP) or as otherwise described in an award agreement.

Distributions made by us with respect to awards of restricted units may be subject to the same vesting requirements as the restricted units.

Distribution Equivalent Rights

The plan administrator of the LTIP, in its discretion, may also grant distribution equivalent rights, either as standalone awards or in tandem with other awards. Distribution equivalent rights are rights to receive an amount in cash, restricted units or phantom units equal to all or a portion of the cash distributions made on units during the period an award remains outstanding.

Unit Options and Unit Appreciation Rights

The LTIP may also permit the grant of options covering common units. Unit options represent the right to purchase a number of common units at a specified exercise price. Unit appreciation rights represent the right to receive the appreciation in the value of a number of common units over a specified exercise price, either in cash or in common units. Unit options and unit appreciation rights may be granted to such eligible individuals and with such terms as the plan administrator of the LTIP may determine, consistent with the LTIP; however, a unit option or unit appreciation right must have an exercise price equal to at least the fair market value of a common unit on the date of grant.

Unit Awards

Awards covering common units may be granted under the LTIP with such terms and conditions, including restrictions on transferability, as the plan administrator of the LTIP may establish.

Profits Interest Units

Awards granted to grantees who are partners, or granted to grantees in anticipation of the grantee becoming a partner or granted as otherwise determined by the plan administrator, may consist of profits interest units. The plan administrator will determine the applicable vesting dates, conditions to vesting and restrictions on transferability and any other restrictions for profits interest awards.

Other Unit-Based Awards

The LTIP may also permit the grant of “other unit-based awards,” which are awards that, in whole or in part, are valued or based on or related to the value of a common unit. The vesting of another unit-based award may be based on a participant’s continued service, the achievement of performance criteria or other measures. On vesting or on a deferred basis upon specified future dates or events, another unit-based award may be paid in cash and/or in units (including restricted units) or any combination thereof as the plan administrator of the LTIP may determine.

Source of Common Units

Common units to be delivered with respect to awards may be newly-issued units, common units acquired by us or our general partner in the open market, common units already owned by our general partner or us, common units acquired by our general partner directly from us or any other person or any combination of the foregoing.

Equity Award Timing Policies and Practices

We do not grant equity awards in anticipation of the release of material nonpublic information and we do not time the release of material nonpublic information for the purpose of affecting the value of executive compensation. We do not currently grant unit options or option-like equity awards to our employees or directors. Accordingly, we do not currently have a formal practice or policy with respect to the grant of unit options or option-like awards. In the event we determine to grant unit options or option-like awards, the Board will evaluate the appropriate steps to take in relation to the foregoing.

Anti-Dilution Adjustments and Change in Control

If an “equity restructuring” event occurs that could result in an additional compensation expense under applicable accounting standards if adjustments to awards under the LTIP with respect to such event were discretionary, the plan administrator of the LTIP will equitably adjust the number and type of units covered by each outstanding award and the terms and conditions of such award to equitably reflect the restructuring event, and the plan administrator will adjust the number and type of units with respect to which future awards may be granted under the LTIP. With respect to other similar events, including, for example, a combination or exchange of units, a merger or consolidation or an extraordinary distribution of our assets to unitholders, that would not result in an accounting charge if adjustment to awards were discretionary, the plan administrator of the LTIP shall have discretion to adjust awards in the manner it deems appropriate and to make equitable adjustments, if any, with respect to the number of units available under the LTIP and the kind of units or other securities available for grant under the LTIP. Furthermore, upon any such event, including a change in control of us or our general partner, or a change in any law or regulation affecting the LTIP or outstanding awards or any relevant change in accounting principles, the plan administrator of the LTIP will generally have discretion to (i) accelerate the time of exercisability or vesting or payment of an award, (ii) require awards to be surrendered in exchange for a cash payment or substitute other rights or property for the award, (iii) provide for the award to be assumed by a successor or one of its affiliates, with appropriate adjustments thereto, (iv) cancel unvested awards without payment or (v) make other adjustments to awards as the plan administrator deems appropriate to reflect the applicable transaction or event.

Termination of Service

The consequences of the termination of a grantee’s membership on the board of directors of our general partner or other service arrangement will generally be determined by the plan administrator in the terms of the relevant award agreement.

Amendment or Termination of Long-Term Incentive Plan

The plan administrator of the LTIP, at its discretion, may terminate the LTIP at any time with respect to the common units for which a grant has not previously been made. The plan administrator of the LTIP also has the right to alter or amend the LTIP or any part of it from time to time or to amend any outstanding award made under the LTIP, provided that no change in any outstanding award may be made that would materially impair the vested rights of the participant without the consent of the affected participant or result in taxation to the participant under Section 409A of the Internal Revenue Code.

Grants Made in 2023 in Connection with the Initial Public Offering

In connection with the closing of our initial public offering, we made awards of 50,000 phantom units with distribution equivalent rights to each of Mr. Clum and Mr. Agosta as long-term incentive awards pursuant to the LTIP. These phantom units will vest in one-third increments on each of the first three anniversaries of the pricing date of our initial public offering for the officers and key employees and will fully vest on the one-year anniversary of the grant for the non-employee directors provided that the recipient remains employed or a member of the Board, as applicable, through the anniversary date, and will be settled in common units as soon as reasonably practicable after the vesting date. Distribution equivalents will be paid to holders of outstanding phantom units, including unvested phantom units, on the next payroll dates after the distribution is paid to holders of common units.

All outstanding and unvested phantom units will vest in the event that the officer’s employment is terminated without “cause” or by the officer for “good reason” (each as defined in the LTIP and the award agreement) within the two-year period following a “change in control” (as defined in the LTIP). Similarly, all outstanding and unvested phantom units held by a director will vest in the event of a change of control. Additionally, the Compensation Committee may determine, in its discretion, to vest unvested phantom units in the event that the officer’s employment is terminated for reasons other than “cause” or the director ceases to be a member of the Board as a result of a termination of “service” (as defined in the LTIP).

2024 Annual Grants

In January 2024, we made awards of 56,000 time-vesting phantom units with distribution equivalent rights to our NEOs as annual long-term incentive awards pursuant to the LTIP, with 40,000 time-vesting phantom units granted to Mr.

Clum and 16,000 time-vesting phantom units granted to Mr. Agosta. These phantom units will vest in one- third increments on January 31, 2025, 2026 and 2027.

In addition, in January 2024, we made awards of 56,000 performance-based phantom units with distribution equivalent rights to our NEOs as annual long-term incentive awards pursuant to the LTIP, with 40,000 performance-based phantom units granted to Mr. Clum and 16,000 performance-based phantom units granted to Mr. Agosta. Based on the Company’s performance during the 2024 calendar year according to the performance objectives set forth in the table below, final performance awards of 84,280 units were earned with 60,200 units earned by Mr. Clum and 24,080 units earned by Mr. Agosta. These units will vest in one-half increments on January 31, 2026 and January 31, 2027. Prior to determination of the achievement of the performance objectives, distribution equivalent rights were paid according to the target number of phantom unit grants; following the determination of the number of earned phantom units, distribution equivalent rights will be paid according to the number of earned phantom units.

Both the time-vesting and performance-based phantom units will be settled in common units as soon as reasonably practicable after the vesting date. Distribution equivalents will be paid to holders of outstanding phantom units, including unvested phantom units, on the next payroll dates after the distribution is paid to holders of common units.

2025 Annual Grants

In January 2025, we made awards of 73,880 time-vesting phantom units with distribution equivalent rights to our NEOs as annual long-term incentive awards pursuant to the LTIP, with 52,770 time-vesting phantom units granted to Mr. Clum and 21,110 time-vesting phantom units granted to Mr. Agosta. These phantom units will vest in one- third increments on January 31, 2026, 2027 and 2028.

In addition, in January 2025, we made awards of 73,880 performance-based phantom units with distribution equivalent rights to our NEOs as annual long-term incentive awards pursuant to the LTIP, with 52,770 performance-based phantom units granted to Mr. Clum and 21,110 performance-based phantom units granted to Mr. Agosta. These performance-based phantom units will be earned based on the Company’s performance during the 2025 calendar year according to the performance objectives set forth in the table below and will vest in one-half increments on January 31, 2027 and January 31, 2028. Prior to determination of the achievement of the performance objectives, distribution equivalent rights will be paid according to the target number of phantom units grants; following determination of the number of earned phantom units based on achievement of the performance objectives, distribution equivalent rights will be paid according to the number of earned phantom units.

Both the time-vesting and performance-based phantom units will be settled in common units as soon as reasonably practicable after the vesting date. Distribution equivalents will be paid to holders of outstanding phantom units, including unvested phantom units, on the next payroll dates after the distribution is paid to holders of common units.

Outstanding Equity Awards at 2024 Year-End

The following table shows outstanding equity awards held by the NEOs as of December 31, 2024.

(1)Consists of time-vested phantom units and earned performance-based phantom units that remain subject to time-vesting. See “2024 Annual Grants.”

Employment Contracts, Termination of Employment, Change-in-Control Arrangements

We currently do not have any employment agreements or other plans or arrangements with our executive officers that would result in payments to be made by us to an NEO upon the resignation, retirement or any other termination of an NEO’s employment or upon a change in control.

Compensation of Directors

Officers or employees of our general partner or its affiliates who also serve as directors will not receive additional compensation for their service as a director of our general partner. The non-employee director compensation program consists of annual equity-based awards granted under the LTIP. These grants totaled 3,900 to each non-employee director with an additional 1,600 units, or a total of 5,500 units, for each chair of a committee of the board of directors in 2025.

Non-employee directors will also receive reimbursement for out-of-pocket expenses they incur in connection with attending meetings of the board of directors or its committees. Each director will be indemnified for his or her actions associated with being a director to the fullest extent permitted under Delaware law.