Verde Clean Fuels, Inc.

We are currently considered a “smaller reporting company” and an “emerging growth company” within the meaning of the Securities Act of 1933 for purposes of the SEC’s executive compensation disclosure rules. Accordingly, we are required to provide a Summary Compensation Table and an Outstanding Equity Awards at Fiscal Year End Table, as well as limited narrative disclosures regarding executive compensation. Further, our reporting obligations extend only to “named executive officers,” which are the individuals who served as principal executive officer and the next two most highly compensated executive officers at the end of the fiscal year 2024. Our “named executive officers” for purposes of the disclosure herein (“Named Executive Officers” or “NEOs”) are:

Executive Summary and Compensation Philosophy

The Company believes it is in our stockholders’ best interests to attract, motivate and retain highly qualified individuals in critical positions by providing competitive compensation opportunities. Our guiding compensation principles endeavor to align executive compensation with our strategic objectives. Most importantly, we believe that our executive compensation programs appropriately link pay to performance and are well aligned with the long-term interests of our stockholders. We further believe that our executive compensation principles are competitive with similarly situated companies in our industry. Our Compensation Committee is responsible for establishing, implementing and maintaining the compensation program for our NEOs.

Use of Compensation Consultants and Peer Group Data

The Compensation Committee did not consult with any compensation consultant (“Compensation Consultant”) in conjunction with its executive compensation determinations during the fiscal year ending December 31, 2024.

Role of Executives in Establishing Compensation

Our Chief Executive Officer, Ernest Miller, does not play a role in recommending compensation for NEOs (including base salary and performance-based annual and long-term cash and equity compensation), although he participates in Compensation Committee meetings to provide background information on our business and financial and operational objectives and reviews the performance of each NEO’s contributions to achieving the Company’s business, financial and operational objectives. Compensation Committee members develop their own opinions regarding the annual performance of our NEOs based on interactions with them. As required by the Nasdaq Listing Rules, our Chief Executive Officer does not participate in deliberations concerning, or vote on, the compensation arrangements for himself. The Compensation Committee approves the compensation for all NEOs.

Material Elements of Executive Compensation

The key elements of our executive compensation program include base salary, discretionary bonus eligibility, annual cash incentive bonus opportunities, and long-term incentives pursuant to equity and benefit programs.

Base Salary and Discretionary Bonus. We pay a base salary to each of our NEOs, the objective of which is to provide a fixed component of cash compensation that reflects the level of responsibility associated with the executive’s position and is competitive with the base compensation the executive could earn in a similar position at comparable companies. Base salary for our NEOs is subject to annual review by the Board in light of market compensation, tenure, individual performance, Company performance and other subjective considerations. From time to time, the Company awards discretionary bonuses to NEOs, the purpose of which is to better align executive compensation with Company performance, market value and long-term objectives. Discretionary bonus arrangements vary among NEOs and are dictated based on qualitative and quantitative performance criteria determined on a case-by-case basis. No discretionary bonuses were paid to our NEOs during 2024.

Annual Cash Incentive Bonus Opportunities. Pursuant to the terms of their respective employment agreements, each of Messrs. Miller, Burdette and Doyle are eligible to receive an annual cash incentive bonus (an “Annual Cash Bonus”) in amounts up to 75%, 50% and 50%, respectively, of their then-applicable base salary, based upon the achievement of certain performance objectives established by the Board at its sole discretion, which goals may extend over multiple years. Performance objectives include the achievement of milestones with respect to development projects (final investment decision and achievement of commercial operations) and the execution of licensing arrangements. No amounts were paid out to any NEO under the Annual Cash Bonus in 2024.

Long-Term Incentives. Under the Plan, which was approved by shareholders in January 2023 and became effective in February 2023, the Compensation Committee may grant awards to participants in the form of options, stock appreciation rights, restricted shares, restricted stock units, performance-based awards, other stock-based awards, other cash-based awards or any combination of the foregoing to NEOs and other officers, consultants and employees. Equity awards granted under the Plan may be based on recommendations from the Chief Executive Officer (other than for himself), the participant’s level of responsibility and the participant’s total compensation.

In May 2024, Messrs. Miller and Doyle were granted options under the Plan to purchase 460,776 and 310,985 shares of Class A Common Stock, respectively, at an exercise price of $5.99 per-share that time-vest ratably on an annual basis over a four-year period and have a term of seven years (such award with respect to Mr. Miller, the “2024 Miller Option Award”, and such award with respect to Mr. Doyle, the “2024 Doyle Option Award”).

In October 2024, Mr. Burdette was granted an option under the Plan to purchase 310,985 shares of Class A Common Stock at an exercise price of $5.99 per-share that time-vest 25% on May 29, 2025 and 25% on each of the first, second and third anniversaries of May 29, 2025, and has a term expiring on May 29, 2031 (the “2024 Burdette Option Award”).

Executive Employment Agreements. In April 2023, we entered into an executive employment agreement with each of Mr. Miller, Chief Executive Officer, and Mr. Doyle, Chief Technology Officer (respectively, the “Miller Agreement” and the “Doyle Agreement”). In September 2024, we entered into an executive employment agreement with Mr. Burdette, Chief Financial Officer (“Burdette Agreement”), effective as of October 2024. The Miller Agreement and Doyle Agreement each provide for an initial four-year term ending on February 15, 2027, and the Burdette Agreement provides for an initial four-year term ending on October 1, 2028 (each, the “Initial Term”).

The Miller Agreement provides for, among other things, (i) an annualized base salary of $508,000, (ii) eligibility to receive an Annual Cash Bonus and (iii) participation in the Company’s employee benefit and welfare plans. Pursuant to the Miller Agreement, if Mr. Miller’s employment is terminated by the Company during the Initial Term without “cause” (and other than as a result of his death or disability) or if Mr. Miller resigns for “good reason” (each as defined in the Miller Agreement), Mr. Miller will receive, subject to his execution and non-revocation of a release of claims against the Company and his continued compliance with restrictive covenants: (i) a cash severance payment equal to 1.5 times his then-current base salary, payable in substantially equal installments over a period of 18 months; and (ii) a cash severance payment equal to 2.625 times his then-current base salary, payable in a lump sum within 60 days following the termination date, if such qualifying termination occurs within 24 months following a change in control (as defined in the Plan).

The Doyle Agreement provides for, among other things, (i) an annualized base salary of $400,000, (ii) eligibility to receive an Annual Cash Bonus and (iii) participation in the Company’s employee benefit and welfare plans. Pursuant to the Doyle Agreement, if Mr. Doyle’s employment is terminated by the Company during the Initial Term without “cause” (and other than as a result of his death or disability) or if Mr. Doyle resigns for “good reason” (each as defined in the Doyle Agreement), Mr. Doyle will receive, subject to his execution and non-revocation of a release of claims against the Company and his continued compliance with restrictive covenants: (i) a cash severance payment equal to 1.5 times his then-current base salary, payable in substantially equal installments over a period of 18 months; and (ii) a cash severance payment equal to 2.25 times his then-current base salary, payable in a lump sum within 60 days following the termination date, if such qualifying termination occurs within 24 months following a change in control (as defined in the Plan).

The Burdette Agreement provides for, among other things, (i) an annualized base salary of $400,000, (ii) eligibility to receive an Annual Cash Bonus, (iii) participation in the Company’s employee benefit and welfare plans, and (iv) the 2024 Burdette Option Award. Pursuant to the Burdette Agreement, if Mr. Burdette’s employment is terminated by the Company during the Initial Term without “cause” (and other than as a result of his death or disability) or if Mr. Burdette resigns for “good reason” (each as defined in the Burdette Agreement), Mr. Burdette will receive, subject to his execution and non-revocation of a release of claims against the Company and his continued compliance with restrictive covenants: (i) a cash severance payment equal to 1.5 times his then-current base salary, payable in substantially equal installments over a period of 18 months; and (ii) a cash severance payment equal to 2.25 times his then-current base salary, payable in a lump sum within 60 days following the termination date, if such qualifying termination occurs within 24 months following a change in control (as defined in the Plan).

Following the expiration of the Initial Term, the employment relationship will continue on an “at-will” basis, and the Company will have no obligation to provide the severance benefits described above upon any termination of employment. Additionally, the Agreements contain certain restrictive covenants regarding confidential information, non-competition, non-solicitation, and non-disparagement.

Incentive Compensation Awarded by Holdings. In 2020, Messrs. Miller and Doyle received compensation from Holdings prior to the Business Combination (as defined below) with the Company which was restructured as part of the closing of the Business Combination and is described in the section entitled “Certain Relationships and Related Party Transactions – Compensation Payable by Holdings to Two of Our Named Executive Officers” below.

Employee and Retirement Benefits. We currently provide broad-based health and welfare benefits that are available to our full-time employees, including our NEOs, including health, life, vision and dental insurance. In addition, we currently make available a retirement plan intended to provide benefits under Section 401(k) of the Code, pursuant to which employees (including our NEOs) may elect to defer a portion of their compensation on a pre-tax basis and have it contributed to the plan. Pre-tax contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participants’ directions. Our 401(k) plan does not provide for any employer contributions. All contributions under our 401(k) plan are subject to certain annual dollar limitations in accordance with applicable laws, which are periodically adjusted for changes in the cost of living. Other than the 401(k) plan, we do not provide any qualified or non-qualified retirement or deferred compensation benefits to our employees, including our NEOs.

Termination and Change in Control Payments. Each of Messrs. Miller, Doyle and Burdette have post-termination benefits under the Miller Agreement, the Doyle Agreement and Burdette Agreement, as applicable, which are described above.

All options held by Messrs. Miller, Doyle and Burdette fully vest upon a change in control (as defined in the Plan). With respect to options granted in 2023, upon the respective termination of Mr. Miller’s or Mr. Doyle’s employment or services to the Company and its affiliates by the Company without cause (as defined in the Plan) or due to their respective death or disability (as defined in the Plan), in each case, a prorated portion of the options that remains unvested as of such date will become vested with respect to a number of shares equal to (x) 25% of the shares underlying the option award, times (y) a fraction equal to (A) the number of days as of the date of such termination of service that have elapsed since the immediately preceding vesting date or, if none, the grant date, divided by (B) 365.

With respect to options granted in 2024, upon the respective termination of Mr. Miller’s, Mr. Doyle’s or Mr. Burdette’s employment or services to the Company and its affiliates other than for cause by the Company (or a voluntary termination after an occurrence of an event that would be grounds for termination for cause by the Company), in each case, a prorated portion of the options that remains unvested as of such date will become vested with respect to a number of shares equal to (x) 25% of the shares underlying the option award, times (y) a fraction equal to (A) the number of days as of the date of such termination of service that have elapsed since the immediately preceding vesting date or, if none, the grant date, divided by (B) 365.

Perquisites. We may provide customary incidental perquisites to our NEOs including business expense reimbursements. There were no perquisites provided to our NEOs during 2024 requiring disclosure in the Summary Compensation Table.

Tax Implications

The Compensation Committee awards compensation to our NEOs as it deems appropriate to meet our overall compensation objectives, even though it may not be fully deductible for the purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). In general, Section 162(m) of the Code prevents publicly held corporations from deducting, for federal income tax purposes, compensation paid in excess of $1,000,000 to certain executives. Historically, however, this deduction limitation did not apply to compensation that constitutes “qualified performance-based compensation” within the meaning of Section 162(m) of the Code and the regulations promulgated thereunder. In certain situations, the Compensation Committee may have approved, and may approve in the future, compensation that does not meet the requirements of Section 162(m) of the Code in order to ensure competitive levels of total compensation for our executive officers.

Compensation Policies and Practices as they Relate to Risk Management

The Company’s management has reviewed its compensation policies and practices in conjunction with the Compensation Committee to determine if these policies and practices create risks that are reasonably likely to have a material adverse effect on the Company. The Company’s basic compensation structure, as described above, includes base salaries, discretionary bonuses and incentive equity compensation. In light of this review of the compensation structure and its mix of both fixed and variable compensation, the Company concluded that there are no risks arising from our compensation policies and practices that are reasonably likely to have a material adverse effect on the Company.

Policies and Practices Related to the Grant of Options Close in Time to the Release of Material Nonpublic Information

The Company grants awards of stock options. The Board does not maintain a written policy regarding the timing of awards of stock options in relation to the disclosure of material non-public information. Neither the Board nor the Compensation Committee takes material nonpublic information into account when determining the timing and terms of equity-based awards, including stock options, and, during 2024, the Company did not time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. During 2024, we granted stock options to Mr. Burdette in connection with his hiring one business day after the filing of our current report on Form 8-K disclosing Mr. Burdette’s appointment and related compensation. The following table provides information regarding each instance in 2024 when the Company awarded a stock option to a named executive officer in the period beginning four business days before the filing of a periodic report on Form 10-Q or Form 10-K, or the filing or furnishing of a current report on Form 8-K, and ending one business day after the filing or furnishing of such report in accordance with SEC rules: