Proposed issue of shares under the Macquarie employee retained equity plan

Macquarie Group Limited (Macquarie) (ASX:MQG; ADR:MQBKY) announces that it will issue the ordinary fully paid Macquarie shares required for the initial allocation under the Macquarie Group Employee Retained Equity Plan (MEREP).

As announced by Macquarie on 17 December 2009, the establishment and operation of the MEREP has been approved by Macquarie shareholders, along with other approvals sought for the implementation of changes to Macquarie's remuneration arrangements. As announced on 11 December 2009, the changes involve, among other things, approximately $350 million, largely comprised of the retained profit share of its senior staff, being applied to the acquisition of fully paid ordinary Macquarie shares for the initial allocation under the MEREP. The balance of the share issue detailed below represents MEREP awards to be made to staff employed or promoted since mid-2009 consistent with Macquarie's policy of aligning staff interests with the interests of shareholders. Macquarie currently expects that the shares will be issued in late February 2010.

The following additional information is provided for the purpose of Australian Securities Exchange (ASX) Listing Rule 3.10.3:

• the Macquarie shares issued will be ordinary fully paid Macquarie shares;
• Macquarie estimates that the maximum number of Macquarie shares that may be issued is 9.5 million, based on the $350 million initial allocation to the MEREP noted above, and a conversion price for the large majority of awards of $36.36 per share. The conversion price for these awards was announced on 1 May 2009 to be the volume weighted average price of Macquarie shares traded from 4 May 2009 to 29 July 2009. For other awards to staff employed or promoted since mid-2009, a fixed number of MEREP awards will be allocated;
• the shares will be issued under the terms and conditions of the MEREP, which are detailed in Macquarie's Notice of General Meeting and Explanatory Memorandum dated 16 November 2009 (Notice of Meeting);
• the shares required for allocation of the MEREP awards will be issued to the trustee for the MEREP (Trustee) at a price per share equal to the closing price of MQG shares traded on ASX on the trading day prior to the allocation date for the award. As indicated in the Notice of Meeting, Macquarie will fund this share issue by a loan to the Trustee;
• the purpose of the issue is for allocation of MEREP awards under the terms and conditions of the MEREP, which are detailed in the Notice of Meeting;
• Macquarie obtained shareholder approval for the issue of Macquarie shares under an exception to ASX Listing Rule 7.1 on 17 December 2009. No further shareholder approval is required for the issue of the shares; and
• the issue of Macquarie shares will be to Macquarie staff in accordance with the terms and conditions of the MEREP.

As required by ASX Listing Rule 3.10.5, an Appendix 3B will be given to ASX when the shares are issued.