Koenig & Bauer : Description of the 2024 remuneration system

Annual General Meeting 2024

Description of the revised remuneration system for Management Board members

• Please note that this version of the revised remuneration system prepared for the

convenience of English-speaking readers is a translation of the German original. For purposes of interpretation, the German text shall be authoritative and final.

Information on agenda item 9:

Remuneration system for the members of the Management Board

1. Introduction

The previous remuneration system for the members of the Koenig & Bauer AG's Management Board (2021 remuneration system) was submitted to the Annual General Meeting and approved with 69.5% of the votes. It has been in effect since then.

In 2023, the Supervisory Board took investor feedback as an opportunity to conduct a comprehensive review of remuneration system for the members of Koenig & Bauer AG's Management Board with the support of an independent corporate governance consultant. The remuneration system for the members of the Koenig & Bauer AG's Management Board was revised and enhanced on the basis of this review and approved by the Supervisory Board at its meeting of 20 March 2024 and will be submitted to the Annual General Meeting on 26 June 2024 for approval (2024 remuneration system).

Subject to approval at the Annual General Meeting, the 2024 remuneration system is to enter into force retroactively for all current and future members of the Management Board from 1 January 2024.

The 2024 remuneration system complies with the regulatory requirements of the German Stock Corporation Act (AktG) and the recommendations of the German Corporate Governance Code (the "Code") as amended on 28 April 2022 and is explained in detail below.

2. Further development of the remuneration system

At the last vote at the Annual General Meeting, some investors expressed concerns about the remuneration system for the members of Koenig & Bauer AG's Management Board. The main criticisms related to:

1. the absence of performance targets for long-term variable remuneration (long-term incentive, LTI),

1. the absence of a cap on the amount paid under the LTI;

1. the possibility of granting special benefits including special bonusus for future extraordinary performance or success on the part of the members of the Management

Board,

1. the absence of any obligation to buy and hold shares in the company and page 1 of 22

1. insufficient transparency in the description of the remuneration system.

In the light of this criticism, the Supervisory Board reviewed the 2021 remuneration system and identified potential improvements in order to take greater account of the company's long- term and sustainable development. The main changes to the remuneration system are presented in the following table:

Closer pay-for-performance alignment

The previous long-term incentive (LTI) was structured as a restricted stock plan and not aligned to the achievement of long-term performance targets. It has now been replaced by a new, extensively revised plan. The restructured long-term incentive as a performance share plan strengthens the link between long-term variable remuneration and the company's ongoing performance. This change also addresses the criticism expressed by investors of the previous restricted stock plan. Under the new performance share plan, allocation solely takes the form of virtual performances shares, which are fully aligned to the achievement of financial performance targets (75% weighting) and ESG targets (25% weighting).

In connection with the annual bonus, greater emphasis is placed on Koenig & Bauer AG's financial performance, which is measured with an overall weighting of 75% on the basis of EBIT/EBIT margin and net working capital. In addition, non-financial performance targets, including strategy and ESG targets, are included with a weighting of 25%.

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Furtherance of Koenig & Bauer AG's sustainability strategy

With the inclusion of ESG targets in both the annual bonus and the long-term incentive, the 2024 remuneration system provides important incentives for the implementation of Koenig & Bauer AG's sustainability strategy. The Supervisory Board has the option of selecting relevant ESG targets annually on the basis of a predefined list of criteria, taking into account current priorities within the scope of Koenig & Bauer AG's business strategy. The list of criteria was derived from Koenig & Bauer AG's sustainability strategy and includes, for example, the reduction of the company's ecological footprint, greater responsibility for employees and customers and the promotion of compliance as possible goals.

Greater share orientation

In order to strengthen the share culture and to reconcile the interests of the members of Koenig & Bauer AG's Management Board with those of investors, share ownership guidelines will be introduced under the 2024 remuneration system. Under these share ownership guidelines, the members of the Management Board are required to acquire shares in Koenig & Bauer AG in an amount equalling 100% of their fixed annual salary and to hold them for the duration of their service contract. In addition, Koenig & Bauer AG's share price is factored into the long-term incentive, thus also contributing to a greater share orientation in Management Board remuneration.

Caps on Management Board remuneration

In addition to the determination of maximum remuneration in accordance with Section 87a

1. of the German Stock Corporation Act, which limits the payment of remuneration accruing in a given year, a payment cap has been included for the new long-term incentive. This limits the payments under the long-term incentive to 250% of the target amount.

Abolition of non-performance-tied remuneration

As well as this, the option of granting non-performance-tied special remuneration has been abolished in the revised remuneration system. In addition to strengthening the pay-for- performance alignment, this amendment also heightens the transparency of Management Board remuneration.

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3. Underlying principles of the remuneration system

The following principles in particular are considered in the remuneration system for members of Koenig & Bauer AG's Management Board:

4. The remuneration system at a glance

The remuneration system for the members of Koenig & Bauer AG's Management Board consists of fixed and variable remuneration elements, the aggregate of which constitutes the total remuneration for the members of the Management Board. In addition, it includes other contractual components such as malus and clawback arrangements, share ownership and a remuneration cap in accordance with Section 87a (1) Sentence 2 No.1 of the German Stock Corporation Act. The following table provides an overview of the remuneration system for the members of Koenig & Bauer AG's Management Board:

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The remuneration structure, i.e. the relative weighting of the individual fixed and variable remuneration elements in the total remuneration of the members of the Management Board , reflects both the pay-for-performance concept and the alignment of the Management Board remuneration to Koenig & Bauer's sustainable and long-term development.

The total target remuneration of the members of Koenig & Bauer AG's Management Board equals the sum total of the fixed and variable remuneration elements. The variable remuneration elements are taken into account at their annual target amounts, i.e. the amount payable for 100% target achievement.

In order to ensure that the remuneration of Koenig & Bauer AG's Management Board reflects the pay-for-performance concept, it is based on performance and success. Whereas the fixed remuneration elements (fixed remuneration and pension commitment/benefits, excluding fringe benefits) account for 45% to 53% of the total target remuneration excluding fringe benefits, the variable remuneration elements (annual bonus and the long-term incentive) constitute 47% to 55%.

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In addition, the long-term incentive has a greater weighting of 54% to 57% then the annual bonus, which accounts for 43% to 46% of the variable remuneration elements, in order to generate the incentive required under Section 87 (1) Sentence 2 of the German Stock Corporation Act to further the company's sustainable and long-term development. Thus, the remuneration based on the achievement of long-term targets clearly exceeds the remuneration based on short-term targets, without neglecting the latter. In their entirety, the variable remuneration elements provide a material basis for Koenig & Bauer AG's success and long-term development.

Fringe benefits constitute a further remuneration component. The cost of the fringe benefits is inherently subject to annual fluctuations. As a rule, they should not exceed 10% of the fixed remuneration and are disclosed in the annual remuneration report.

5. The remuneration system in detail

a. Fixed remuneration elements

Fixed remuneration

Each member of the Management Board receives a fixed annual remuneration (fixed annual salary), which is paid in 12 equal monthly instalments at the end of each month. Payment of a fixed basic salary furthers the autonomous, risk-oriented and independent management of the company. The amount of the fixed annual salary is based on the duties assigned to the

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individual member of the Management Board and is determined separately in his or her service contract.

Fringe benefits

The company provides the members of the Management Board with fringe benefits, which may taxed as a non-cash pecuniary benefit. Fringe benefits mainly comprise:

1. the provision of a company car, which may be also used for private purposes, including vehicle car and maintenance;

1. contributions for voluntary pension insurance as well as health, nursing and accident

insurance (including disability and death insurance);

1. the costs of an annual medical examination;

1. rental allowances/one-time relocation allowances; o the cost of a private telephone connection;
   o expenses and the reimbursement of costs (such as travel expenses, including trips to the home address).

In addition, the Supervisory Board reserves the right, in exceptional cases, to grant compensation to new members of the Management Board to offset a loss of remuneration under a previous employment or service contract (for example, long-term variable remuneration commitments) if they lose such entitlement by joining Koenig & Bauer AG. The scope for granting such compensation payments ensures the necessary flexibility in selecting and gaining the best possible candidates. If such compensation payment are granted, they are disclosed and explained separately in the remuneration report.

Moreover, the members of the Management Board are also included in Koenig & Bauer AG's financial liability insurance (D&O insurance) and criminal liability insurance. The agreed deductible equals the minimum deductible in accordance with Section 96 (2) Sentence 3 of the German Stock Corporation Act.

Pension commitment/contributions

Pension commitment

Members of the Management Board appointed on or after 1 January 2024 receive a fixed monetary contribution toward their own private pension-saving schemes (pension payment). Members of the Management Board who are reappointed on or after 1 January 2024 have a once-only option to switch from the defined contribution scheme in favour of receipt of a pension contribution payment.

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Defined contribution commitment

The company provides the members of the Management Board who were appointed before 1 January 2024 with a pension scheme under which contributions are paid annually into a policy held with insurance company ALTE LEIPZIGER Lebensversicherung a.G. during the term of their service contract (defined contribution pension commitment).

b. Variable remuneration elements

The variable remuneration paid to the members of the Management Board consists of short- term and long-term variable remuneration. The short-term variable remuneration is structured as a target bonus with a term of one year (annual bonus) and the long-term variable remuneration as a performance share plan with a term of four years (long-term incentive, LTI).

Annual bonus

Basic structure

Payment of the annual bonus is tied to performance in the applicable year, as measured by financial and non-financial performance targets. Koenig & Bauer AG's Supervisory Board determines the specific performance targets before the commencement of the year in question. The target amount is subject to individual agreement with each member of the Management Board. Depending on the achievement of the performance targets set for a financial year, overall target achievement can be between 0% and 150%. Payment of the annual bonus is capped at a maximum of 150% of the target amount.

The following diagram shows how the annual bonus works:

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Performance targets and weighting

In order to reflect Koenig & Bauer AG's business strategy comprehensively, both financial and non-financial performance targets are factored into the annual bonus. The financial bonus targets are based on earnings before interest and tax (EBIT) or the EBIT margin as well as net working capital. The non-financial performance targets entail ESG and strategic targets.

EBIT/EBIT margin

EBIT designates earnings before interest and taxes, while the EBIT margin designates the earnings margin before interest and taxes, which is calculated as the ratio of EBIT to total Group revenue. EBIT and the EBIT margin indicate the company's sustained earnings potential. They are calculated on the basis of Koenig & Bauer Group's audited consolidated financial statements, which have been approved by the Supervisory Board and for which an unqualified auditor's opinion has been issued. If the EBIT or the EBIT margin is measured at the segment or business unit level, the Supervisory Board may make adjustments to allow for the effects of any deviations from assumptions concerning increases in material and energy costs if they exceed or fall below a defined corridor. Any adjustments are disclosed in the remuneration report.

EBIT and the EBIT margin are included in the overall target achievement with a weighting of 50%. For members of the Management Board who do not hold responsibility for a specific segment, achievement of the EBIT or the EBIT margin targets is only measured at the Group level. However, the achievement of targets at the segment or business unit level may also be taken into account in the case of members of the Management Board who hold responsibility for individual segments. In this case, 60% of the target achievement under this performance criterion is measured at the Group level and 40% at the segment or business level. In the case of members of the Management Board for whom target achievement is not measured at the segment or business unit level, 100% of target achievement is measured at the Group level for the purposes of the performance criterion.

Prior to the commencement of the year, the Supervisory Board determines whether the EBIT or the EBIT margin is to be used as a performance for the upcoming year and whether the achievement of targets at the segment or business unit level should be taken into account for members of the Management Board with responsibility for individual segments.

Net working capital

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