Macquarie Group Limited — Governance Information 2007

Nov 1, 2007

MACOUARIE GROUP LIMITED

A.C.N. 122 169 279

RULES OF THE SOUTH AFRICA SUBPLAN OF THE MACQUARIE GROUP EMPLOYEE SHARE OPTION PLAN

INTERPRETATION AND OBJECT $\mathbf{1}$

$1.1$ Definitions

$\overline{a}$

In the South Africa Subplan, unless the context otherwise requires or otherwise as set out below, terms defined in the Plan Rules have the same meaning in this South Africa Subplan, and:

The definition of a "Controlled Company" in the Plan Rules does not apply to the South Africa Subplan;

The definition of "Grantee" in the Plan Rules is replaced by the following definition:

"Grantee" means the Participant.

The definition of "Non-Disposal Period" in the Plan Rules is replaced by the following definition:

"Non-Disposal Period" means, in respect of a Share held by a Grantee subject to Restrictions, the period of 12 months from the date on which those Shares are issued to that Grantee under Plan Rule 5.4 or such longer period as is specified in the invitation to the Relevant Participant under Plan Rule 3.1.

The definition of "Permitted Trustee" in the Plan Rules does not apply to the South Africa Subplan.

The definition of "Plan" in the Plan Rules shall be replaced by the following definition:

"Plan" means the Macquarie Group Employee Share Option Plan (including the South Africa Subplan of the Plan) established in accordance with the Plan Rules.

"Plan Rules" means the rules of the Plan adopted by the Board on 30 August 2007, as amended from time to time.

The definition of "Relevant Participant" is replaced by the following definition:

"Relevant Participant" means the Grantee.

"South Africa Subplan" has the meaning given in South Africa Subplan Rule 1.4.

"South Africa Subplan Rules" means these rules of the South Africa Subplan.

• General Plan Rule 1.2 applies to the South Africa Subplan. $1.2$
• $1.3$ Headings - Plan Rule 1.3 applies to the South Africa Subplan.

$1.4$ Object of the South Africa Subplan

In addition to the object of the Plan as described in Plan Rule 1.4, the purpose of the South Africa Subplan is to offer Options to Employees in South Africa.

The Committee has established the South Africa Subplan in accordance with Plan Rule 8.1(b). The South Africa Subplan is separate to the Plan however, except as specifically provided in these South Africa Subplan Rules, all of the Plan Rules are incorporated in the South Africa Subplan.

In respect of Options granted under the South Africa Subplan, the South Africa Subplan prevails in the event of any conflict between the Plan Rules and the South Africa Subplan Rules.

Where any Plan Rule refers to a clause in the Plan (unless otherwise indicated) that Plan Rule (or clause) must be read and construed as if it also refers to the South Africa Subplan Rules.

ADMINISTRATION $\overline{2}$

• Committee's authority Plan Rule 2.1 applies to the South Africa Subplan. $2.1$
• Total number of Shares Plan Rule 2.2 applies to the South Africa Subplan. $2.2$
• Determination of eligibility Plan Rule 2.3 applies to the South Africa Subplan. $2.3$
• Determination of price Plan Rule 2.4 applies to the South Africa Subplan. $2.4$
• Disputes Plan Rule 2.5 applies to the South Africa Subplan. $2.5$
• Directions from Board Plan Rule 2.6 applies to the South Africa Subplan. 2.6
• Set-off Plan Rule 2.7 applies to the South Africa Subplan. $2.7$
• Modification of Vesting Period, Exercise Period and Exercise Condition Plan Rule $2.8$ 2.8 is replaced by this South Africa Subplan Rule 2.8:
• "If the Relevant Participant of the Grantee of an Option dies, or if another event $(a)$ (other than cessation of employment) specified in the invitation under Plan Rule 3.1 in relation to an Option for the purpose of this Plan Rule 2.8 occurs, the Committee may in its absolute discretion (on any conditions which it thinks fit) (which must include a condition that any Share issued on exercise of the Option remains subject to the same limitation on disposal as if the Grantee remained an Employee) decide that an Option does not lapse under Plan Rule 5.6(c) but lapses at the time and subject to the conditions it may specify by notice to the Grantee, which may include one or more of the following:
  • the Vesting Period of the Option is reduced to a period shorter than that $(i)$ specified in the invitation made in relation to that Option under Plan Rule $3.1;$
  • the Exercise Period of that Option is extended for a specified period $(ii)$ following the date that the Relevant Participant dies; and
  • any Exercise Condition of the Option be waived. $(iii)$

In making a decision under this Plan Rule, the Committee may consider any relevant matter."

Where the Grantee ceases, or gives notice that he intends to cease, to be an $(b)$ employee of a Group company before the end of the Vesting Period, the Option shall lapse to the extent it has not vested on the date of cessation of employment in accordance with South Africa Subplan Rule 5.6(c)(ii)."

METHOD OF INVITATION $\overline{\mathbf{3}}$

• Invitations Plan Rule 3.1 applies to the South Africa Subplan. $3.1$
• Directors Plan Rule 3.2 applies to the South Africa Subplan. $3.2$
• Grantee may apply Plan Rule 3.3 is replaced by this South Africa Subplan Rule 3.3: $3.3$

"Where a Participant receives an invitation under Plan Rule 3.1, the Participant may apply for the Options specified in the invitation."

APPLICATION FOR OPTIONS $\overline{4}$

• Invitation Plan Rule 4.1 applies to the South Africa Subplan. $4.1$
• Grant Plan Rule 4.2 applies to the South Africa Subplan. $4.2$
• Register Plan Rule 4.3 applies to the South Africa Subplan. 4.3
• Confirmation of grant Plan Rule 4.4 applies to the South Africa Subplan. $4.4$

OPTION TO SUBSCRIBE $\overline{5}$

Exercise - Plan Rule 5.1 is replaced by this South African Subplan Rule 5.1: $5.1$

The Grantee may exercise any Option granted to the Grantee under Plan Rule 4.2 only:

• during an Exercise Period for the Option; $(a)$
• if all Exercise Conditions applying to that Option at the time of Exercise have $(b)$ been met;
• by giving a notice and doing all the other things required by Plan Rule 5.2 during $(c)$ that time; and
• if the Grantee at the same time either: $(d)$
• exercises a number of Options so that the Company will issue a minimum $(i)$ of a number of Shares or multiple of a number of Shares that the Committee determines; or
• exercises all the Options granted or transferred to the Grantee which the $(ii)$ Grantee is then entitled to exercise.

The exercise of an Option does not prevent the exercise of any other Option.

• Notice Plan Rule 5.2 applies to the South Africa Subplan. $5.2$
• 5.3 Payment - Plan Rule 5.3 applies to the South Africa Subplan.
• Allotment Plan Rule 5.4 applies to the South Africa Subplan. $5.4$
• Share allotted upon exercise of Option Plan Rule 5.5 applies to the South Africa $5.5$ Subplan.
• Lapse Plan Rule 5.6 is replaced by this South African Subplan Rule 5.6: 5.6

"Each Option lapses on the earlier of the following times:

• on exercise of the Option under Plan Rule 5.1; $(a)$
• if the Option is not exercised under Plan Rule 5.1 during the Option Period, at the $(b)$ end of the Option Period;
• subject to any determination of the Committee being made under Plan Rule 2.8 $(c)$ before or at any time after the Relevant Participant of the Grantee dies or any relevant event specified in the invitations under Plan Rule 3.1 occurs, if the Relevant Participant of the Grantee dies or any relevant event specified in the invitations under Plan Rule 3.1 occurs:
• $(i)$ during the Vesting Period, or
• after the Vesting Period and the Option is not exercised within three $(ii)$ months after that happens;
• if the Committee becomes aware of circumstances which, in the reasonable $(d)$ opinion of the Committee indicate that the Relevant Participant has acted fraudulently, dishonestly or in a manner which is in breach of his or her obligations to the Company or any Associated Company and the Committee (in its absolute discretion) determines that the Option lapses; or
• if the Company commences to be wound up." $(e)$
• Proportionate lapse Plan Rule 5.7 applies to the South Africa Subplan. $5.7$
• Listing on ASX Plan Rule 5.8 applies to the South Africa Subplan. 5.8
• No additional rights Plan Rule 5.9 applies to the South Africa Subplan. 5.9
• ADJUSTMENTS 6
• Plan Rules 6.1 to 6.12 apply to the South Africa Subplan. $6.1$

DURATION OF THE SOUTH AFRICA SUBPLAN $\overline{7}$

Discretionary - Plan Rule 7.1 shall be replaced by this South Africa Subplan Rule 7.1: $7.1$

"The South Africa Subplan shall continue in operation until the Committee decides to terminate or discontinue it."

• Suspension Plan Rule 7.2 applies to the South Africa Subplan. $7.2$
• No prejudice Plan Rule 7.3 applies to the South Africa Subplan. $7.3$

AMENDMENT OF THE SOUTH AFRICA SUBPLAN 8

• By the Committee Plan Rule 8.1 applies to the South Africa Subplan. 8.1
• Listing Rules Plan Rule 8.2 applies to the South Africa Subplan. 8.2

NOTICES AND CORRESPONDENCE $\overline{9}$

Plan Rules 9.1 and 9.2 apply to the South African Subplan. $9.1$

TRANSFER OF THE OPTION 10

$\frac{1}{2}$ , $\frac{1}{2}$

No transfer - Plan Rule 10.1 shall be replaced by this South Africa Subplan Rule 10.1: $10.1$

"Each Option is personal to the Grantee and is not transferable, transmissible, assignable or chargeable."

Death - Plan Rule 10.2 shall not apply to the South Africa Subplan. $10.2$

RESTRICTIONS ON SHARES ISSUED ON EXERCISE OF THE OPTION 11

Restrictions on transfer of Shares - Plan Rule 11.1 shall be replaced by this South $11.1$ Africa Subplan Rule 11.1:

"Shares issued to a Grantee on exercise of an Option must be held by the Grantee subject to the Restrictions and the Non-Disposal Period, which may not be waived in any circumstances."

Plan Rules 11.2 to 11.21 apply to the South Africa Subplan. 11.2

SCHEDULE 1 - SCHEDULE 1 APPLIES TO THE SOUTH AFRICA SUBPLAN

SCHEDULE 2 - SCHEDULE 2 APPLIES TO THE SOUTH AFRICA SUBPLAN