Xero : Notification of Allotment of Securities

6 January 2017

XERO LIMITED (XRO) NOTIFICATION OF ALLOTMENT OF SECURITIES

For the purpose of Listing Rule 7.12.1 and 7.12.9 of the NZX Listing Rules, Xero Limited advises the following securities have been issued:

Class of Securities Ordinary Shares

ISIN NZXROE0001S2

Number of securities issued 74,815 Ordinary Shares

Issue price 74,815 Ordinary Shares were issued upon vesting of 100,567 Restricted Stock Units (RSUs) granted under the Xero Limited Restricted Stock Unit and Option Plan (AU) (AU Plan) and the Xero Limited (USA) Equity Incentive Scheme (US Scheme) as part of the remuneration package of two key employees based in Australia and the United States, respectively. 25,752 RSUs granted under the US Scheme were cancelled in connection with income tax withholding for the key employee based in the United States upon vesting of those RSUs. No cash consideration was required to be paid for these RSUs to vest

Payment in cash No cash consideration was required to be paid for these RSUs to vest

Any amount paid up (if not in full) Fully paid

Percentage of total class issued (excluding treasury stock)

0.054% (as a percentage of Ordinary Shares on issue after this issue, to 3 d.p.)

Reasons for the issue 74,815 Ordinary Shares were issued upon vesting of 100,567 RSUs granted under the AU Plan and US Scheme as part of the remuneration package of two key employees based in Australia and the Unites States, respectively

Specific authority for the issue Resolution of directors upon granting of RSUs

Terms or details of the issue 74,815 Ordinary Shares were issued upon vesting of 100,567 RSUs granted under the AU Plan and the US Scheme as part of the remuneration package of two key employees based in Australia and the United States, respectively. The RSUs vested subject to the terms of the AU Plan and the US Scheme, as applicable

Total number of securities of the class in existence after the issue (excluding treasury stock)

137,619,980 Ordinary Shares on issue

552,509 RSUs (a conditional contractual right to be issued up to 552,509 Ordinary Shares) outstanding, taking into account all forfeited RSUs to date, and the 100,567 RSUs that have vested as set out in this notification of allotment

Note that there are also 2,330,348 unlisted options (convertible into Ordinary Shares on a 1:1 basis) outstanding, taking into account all forfeited options to date

Date of issue 6 January 2017

Number of Securities Converted 100,567 RSUs granted to two key employees based in Australia and the United States under the AU Plan and the US Scheme, respectively

Number and Class of Securities into which they have been Converted

74,815 Ordinary Shares (25,752 RSUs granted under the US Scheme were cancelled in connection with income tax withholding for the key employee based in the United States upon vesting of RSUs)

Details of any interest or dividend conditions attaching to Securities Converted, and allotted upon Conversion

None

Number of Securities of the same class that remain to be Converted

552,509 RSUs (taking into account all forfeited RSUs to date, and the RSUs that have vested as set out in this notification of allotment)

Chaman Sidhu Company Secretary

Email: [e-mail]