VERBIO Vereinigte BioEnergie : Renumeration report 2022/2023

Remuneration report

2022/2023

Remuneration report	A. Remuneration of the	B. Remuneration of the	Report of the Independent Auditor
		Management Board	Supervisory Board

Remuneration report

for the financial year from July 1, 2022 to June 30, 2023

General information

VERBIO Vereinigte BioEnergie AG (hereafter also referred to as "VERBIO AG" or "the Company"), Zörbig is a stock corporation under German law. The Company is registered in the commercial register of the district court in Stendal under the number HRB 6435, and its registered office is at 06780, Zörbig, Germany. VERBIO AG shares have been listed in the prime standard segment of the Frankfurt Stock Exchange since October 16, 2006 (ISIN: DE000A0JL9W6).

This remuneration report is presented by the Management and Supervisory Boards in accordance with § 162 AktG [Aktiengesetz - German Stock Corporation Act], setting out the remuneration paid to the current and past members of the Management and Supervisory Boards of VERBIO Vereinigte BioEnergie AG. The formal requirements of the remuneration report have been audited by Grant Thornton AG Wirtschaftsprüfungsge- sellschaft. The auditor's report on the results of their audit is presented in full at the end of the remuneration report.

The remuneration report for the previous financial year 2021/2022, prepared and audited in accordance with

• 162 AktG, was endorsed by the annual general mee- ting in accordance with § 120a (4) AktG on February 3, 2023.

Composition of the Management Board in the financial year 2022/2023

• Claus Sauter, founder and Chief Executive Officer (CEO) since 2006
• Prof. Dr. Oliver Lüdtke, Deputy Chief Executive Officer and Chief Technical Officer (CTO) since 2011
• Theodor Niesmann, Chief Technical Officer (CTO) since 2011
• Olaf Tröber, Chief Financial Officer (CFO) since 2022 ("new" member of the Management Board)
• Bernd Sauter (COO), Chief Executive Officer for
  Europe­ since 2010
• Stefan Schreiber (COO), Chief Executive Officer for North America since 2020

Composition of the Supervisory Board in the financial year 2022/2023

• Alexander von Witzleben, Chairman of the
  Supervisory­Board since 2006
• Ulrike Krämer, Vice-Chair of the Supervisory Board, member of the Supervisory Board since 2010
• Dr. Klaus Niemann, member of the Supervisory Board since 2021

VERBIO Remuneration report 2022/2023  |  2

Remuneration report	A. Remuneration of the	B. Remuneration of the	Report of the Independent Auditor
		Management Board	Supervisory Board

A. Remuneration of the Management Board

1. Remuneration system for the members of the Management Board

1.1 (Legal) basis

In accordance with the German Stock Corporation Act in its current version as well as the respective rules in the Supervisory Board's rules of procedure, the full Supervisory Board is responsible for the determination of remuneration paid to individual members of the Management Board. In accordance with § 120a (1) AktG the annual general meeting of a listed company shall make a resolution to endorse the system for the remuneration of members of the Management Board whenever there is a significant change to the system, and at least every four years.

Should the annual general meeting not approve the proposed system of remuneration, an amended system of remuneration shall be proposed for approval no later than by the next ordinary annual general meeting. The appropriateness of the remuneration components will be reviewed on a regular basis by the Supervisory Board. If needed, the Supervisory Board may employ an external remuneration expert to develop and maintain the remuneration system and to assess the appropriateness of remuneration. Such experts shall be independent of VERBIO AG and its Management Board.

Due to the legal changes made on April 1, 2020 the Supervisory Board approved a new remuneration system for new Management Board employment contracts. This new system was endorsed by the annual general meeting on January 29, 2021. Under a resolution approved on

December 2, 2021 the Supervisory Board made amendments to the remuneration system with respect to the long-term components of remuneration payable to new members of the Management Board. This was endorsed by the annual general meeting on February 4, 2022 with a majority of 90.96 percent of the share capital represented at the meeting. The system of remuneration presented below applies to the "old" members of the Management Board since July 1, 2020, to Stefan Schreiber (now also an "old" member of the Management Board) from July 1, 2021, and to Olaf Tröber since July 1, 2022, and is valid until the end of their respective current Management Board employment contracts.

The Supervisory Board can, in accordance with legal requi- rements, reduce the remuneration of the members of the Management Board should there be a significant deterioration in the position of VERBIO AG. Generally, no changes can be made to the targets and target amounts during the periods set out for the achievement of those targets.

1.2 Basic principles of the VERBIO AG system of remuneration for members of the Management Board

The system of remuneration for members of the Management Board of VERBIO AG is aligned to the sustainable and long-term development of the business. Accordingly, it contributes to the Company's business strategy and to its long-term success. The Supervisory Board is responsible for the determination of the structure of the remuneration system. On the basis of the remuneration system, the Supervisory Board determines the specific remuneration payable to the individual members of the Management

Board. To the extent permitted by law, the Supervisory Board intends to remunerate the members of the Management Board in line with customary market conditions, while offering competitive remuneration that will enable VERBIO AG, currently and in future, to recruit and retain outstanding personalities. In determining the specific remuneration of the Management Board the Supervisory Board takes account of the following framework conditions:

• The remuneration paid to the members of the Manage- ment Board shall be reasonably commensurate to the tasks and performance of the respective members and to the commercial situation of VERBIO AG, and shall be consistent with customary market conditions.
• The remuneration of members of the Management Board shall not exceed customary market conditions without good reason.
• The consistency of the remuneration compared to cus- tomary market conditions will be assessed by the Super- visory Board based on a horizontal comparison of the remuneration paid by comparable businesses. For the purposes of performing the horizontal comparison, the Supervisory Board will examine the remuneration paid by companies comparable to VERBIO AG with sales re- venue of up to one billion euros and with an EBITDA mar- gin of 10-15 percent, on the basis of the system of remu- neration approved by the Supervisory Board in 2020.
• A vertical comparison of the consistency of the remu- neration compared to customary market conditions will be performed based on a review of the

VERBIO Remuneration report 2022/2023  |  3

Remuneration report	A. Remuneration of the	B. Remuneration of the	Report of the Independent Auditor
		Management Board	Supervisory Board

remuneration paid to the senior officers and employees of VERBIO AG as a whole, taking account of changes over time. For the purposes of the vertical comparison, senior officers are defined as persons holding management positions with the highest level of responsibility and decision-making powers (mana- ging directors and the highest executive officers).

• The variable remuneration, which is based on the achievement of long-term targets, shall exceed the short-term remuneration component in order to spe- cifically align the remuneration payable to members of the Management Board to the Company's long- term objectives.

2. Components of the remuneration paid to the members of the Management Board

For simplification purposes, the term "old" Management Board refers to Claus Sauter, Prof. Dr. Oliver Lüdtke, Theodor Niesmann, Bernd Sauter and Stefan Schreiber, and the term "new" Management Board refers to Olaf Tröber.

The VERBIO AG remuneration system consists of the following performance-related and non-performance-related remuneration components:

Performance-relatedNon-performance-related

remunerationremuneration

2.1.2 Other benefits

In addition to a fixed salary, members of the Management Board are provided with other benefits. These take the form of the provision of a company car that may also be used for private purposes; VERBIO AG bears all the costs of maintaining and operating company cars. In ad- dition, the Company reimburses expenses and travel costs that are incurred by members of the Management Board in connection with performing their employment obligations based on the relevant current company gui- delines. The tax burden arising on other benefits provided is borne by the respective member of the Management Board.

• The failure to achieve targets shall be reflected in an appropriate reduction of variable remuneration. Ho- wever, the structure of the remuneration system shall not provide an incentive to accept inappropriate risks.

To date, conflicts of interest have not arisen for individual members of the Supervisory Board concerning decisions made in respect of the remuneration system for members of the Management Board. Should such a conflict of interest concerning the determination, implementation and examination of the remuneration system arise, the Supervisory Board will resolve the conflict of interest using the same procedures that apply to other conflicts of interest applicable to members of the Supervisory Board, with the effect that the affected member of the Supervisory Board shall not participate in the preparation of the resolution, or, in the case of a severe conflict of interest, shall not participate in discussions on the matter and shall not have a vote on the resolution.

Should a long-term and irreconcilable conflict of interest arise, the affected member of the Supervisory Board shall resign from office.

Annual bonus (one year)	Fixed remuneration
Short Term Incentive (STI)
Other benefits
Annual bonus (one year)
Loyalty bonus
Short Term Incentive (STI)

This remuneration represents compensation for all activities performed for the Company and, unless agreed ot- herwise, for activities performed for affiliated companies of the Company in accordance with § 15 et seq., as well as for roles performed at industry associations. The acceptance of external supervisory board positions requires the approval of the Supervisory Board. As part of this procedure the Supervisory Board will decide if and the extent to which any remuneration paid shall be offset.

2.1 Non-performance-related remuneration components

2.1.1 Fixed remuneration (basic annual salary)

Each member of the Management Board receives a non- performance-related fixed remuneration which is paid in twelve equal instalments.

VERBIO has entered into a financial loss and liability insurance policy (known as D&O insurance) for the benefit of the members of the Management Board. The insurance covers the personal legal liability risk of the members of the Management Board, as well as certain other members of management, in the event that claims for financial losses are made against members in connection with their activities. In accordance with the legal requirements under § 93 (2) AktG, the excess (or deductible) to be borne by members of the Management Board is 10 percent of the damages incurred, limited to one and half times the fixed annual remuneration of the respective members of the Management Board.

In addition, the Company bears the cost of a Group accident insurance policy for the benefit of members of the Management Board.

VERBIO Remuneration report 2022/2023  |  4

Remuneration report	A. Remuneration of the	B. Remuneration of the	Report of the Independent Auditor
		Management Board	Supervisory Board

2.1.3 Loyalty bonus

In addition, Claus and Bernd Sauter, Prof. Dr. Oliver Lüdt- ke and Theodor Niesmann have been awarded a loyalty bonus in recognition of their long service to the Compa- ny, which is provided to the members of the Management Board instead of a traditional company-funded pension arrangement.

Half of the loyalty bonus is paid in the form of VERBIO AG shares. The other half can be paid in cash, if the Management Board so chooses, or also paid in shares. To

2.1.4 Summary of non-performance-related remuneration

Non-performance-related remuneration

calculate the number of shares to be issued, the loyalty bonus to be paid in shares is divided by the weighted three-month average VERBIO share price noted in the closing auction in the Xetra trading system of the Deut- sche Börse AG (Xetra share price or price quoted on an appropriate successor system). The last three months of the respective financial year (April to June) are relevant for the purposes of this calculation. The members of the Management Board may only dispose of the VERBIO AG shares after the termination of their respective employment contracts (retention period).

If a member of the Management Board's employment period ends during the year, the award is made on a pro rata basis. VERBIO AG is entitled to demand the return of all or a portion of the shares awarded under the loyalty bonus of a member of the Management Board if the member's employment contract is ended as a result of gross breach of duty. However, there is no right to demand the return of shares issued to a member of the Management Board based on the exercise of the right to payment in shares by that member.

Fixed remuneration

Remuneration			"Old"	"New"
Target	Form	Management	Management
components	Board	Board
Basic remuneration	Competitive remuneration designed to attract and retain over the long term	Annual fixed remuneration which is paid in twelve equal instalments
	the most suitable executives for the development of the Company and for the
Other benefits	Primarily consisting of benefits-in-kind in the form of non-cash benefits such
implementation of its strategic goals
		as provision of a company car and the assumption of the associated costs
		D&O insurance (excess (or deductible) of 10 percent of the damages incur-
		red in accordance with § 93 (2) AktG 10, up to a 1.5 multiple of the fixed re-
		muneration)
		Group insurance policy
Loyalty bonus	Awarded in place of a company-funded pension plan; rewards company loy-	Awarded in place of a traditional company-funded pension arrangement
	alty in line with a corporate strategy geared to long-term growth and value		With the
	creation	Loyalty bonus is released only upon expiration of employment contract (hol-
		ding period)	exception of
			S. Schreiber
		50% payment in shares
		50% payment awarded by election either in cash or in shares
		The number of shares to be issued is calculated as follows: the loyalty bonus
		to be paid in shares is divided by the weighted three-month average
		VERBIO share price (Xetra closing auction price). The last 3 months (from
		April to June) of the relevant financial year are used for the purposes of this
		calculation.

VERBIO Remuneration report 2022/2023  |  5