Share Option Arrangement

RNS Number:1202S
Inter-Alliance Group PLC
17 November 2003

                    Inter-Alliance Group PLC ("the Company")

                              Option Arrangements

The Board announces the implementation of new proposals for share options to
reward outstanding performance. The revised and new arrangements meet the
Board's objectives of recruiting, retaining and motivating the Company's
independent financial advisers ("IFAs") and key staff.  Demanding performance
conditions are attached to all new share option arrangements that are designed
to deliver business growth and maximise shareholder value.

Historical Position

In the circular to shareholders dated 18 July 2003 the Board highlighted its
intention to bring forward proposals to ensure the Company's share option
schemes met their objective of retaining and motivating key staff and IFAs.
Having consulted the Company's major institutional shareholders, the Board has
implemented various revisions to existing share option arrangements and has
introduced some new arrangements, the details of which are set out below.

Prior to the placing announced on 18 July 2003, the Company had in place share
option arrangements that could result in the issue of 31,766,166 Ordinary Shares
(representing 21.9 per cent of the issued share capital of the Company at that
time) if all of the performance criteria were met.  Full details of the various
share option arrangements were set out in the Company's circular on 18 March
2003 (the "March Circular").

Existing Share Option Schemes (see March Circular)


        Name of Scheme               Options Granted         Replacement Options Granted on 14 
                                                                      November 2003

       CSOP (Approved)                   1,193,530           1 new option for every 10 old options

      USOS (Unapproved)                  9,690,409           1 new option for every 10 old options

       HST (Unapproved)                   947,878            1 new option for each old option

   CSOP & DSOS (Unapproved)             13,126,998           1 new option for each old option *


* excluding Business Leader's options for former Limited Company participants
that will be surrendered.

The Directors consider that the value of these options has become negligible
and, as such, they do not provide the incentive to IFAs and employees that is
intended for such schemes. The Directors believe that in a service business, the
retention and motivation of its IFAs and key employees is vital in securing
business growth and delivering shareholder value.  However, the Director's
remain committed to maintaining the share options within ABI Guidelines.  The
arrangements described below will not result in the issue of options that in
total exceed 10 per cent of the Company's issued share capital.


Revised Arrangements

The Company has written to all eligible participants in each of its share option
schemes (excluding the Company's Save as You Earn Scheme), offering them the
opportunity to surrender voluntarily their options in exchange for a re-grant of
new options. As a result, options over 15,378,803 Ordinary Shares were
surrendered.


New Arrangements

In addition, a new arrangement for IFAs called "The Business Drivers Scheme" has
been introduced.  The Business Drivers Scheme is designed to promote the highest
levels of professionalism and business growth, coupled with stretching
performance conditions to vest options. The performance criteria attached to
options granted to IFAs require in all cases in excess of 10 per cent cumulative
year on year growth in production.  At the same time the Board has launched new
arrangements for its key senior managers with validation criteria linked to
business growth.  The Sales Management Scheme relates performance to the
performance of IFAs by region, while the Support Centre Management Scheme adopts
the Board's Performance Criteria for 70 per cent of options granted, coupled
with personal performance objectives for the remaining 30 per cent.


                   Name of Scheme                            Options Granted

               Business Drivers (DSOS)                          20,265,000

              Senior Management (CSOP)                          16,016,155


On 14 November, the Company's Remuneration Committee met and recommended the
revised and new arrangements set out above to the Board, who in turn accepted
the recommendation at a Board Meeting convened later that day. The Board has
therefore re-granted or granted options at the mid-market closing share price
reported by the Financial Times on 14 November 2003 (as required by the rules of
the relevant share scheme) to all eligible option holders who surrendered their
options and to new option holders respectively.  The combination of options
re-granted and new options granted (excluding the grant of options to the Board
referred to below) results in a total grant of options over 45,266,762 Ordinary
Shares representing 4.99 per cent of the Company's current issued share capital
at a price of 2.875 pence.


Board Share Options

The Board and the Remuneration Committee believe, for the reasons stated above,
that the options currently held by Directors also need to be replaced.
Accordingly, the Directors have surrendered all of their existing options as set
out below. Keith Carby and the Company have agreed to the cancellation of the
Long Term Incentive Plan ("LTIP") dated 7 March 2002 under which the options set
out below were granted to Mr Carby. The Company's Remuneration Committee has
therefore agreed that the Board be granted the following options, for nil
consideration, over the Company's shares at an exercise price of 2.875 pence:


                         Surrendered Options                                         New Options

          Name             Date of Grant          Number         Grant Price            Number

Keith Carby                   7.03.02           4,193,654           55 p              10,000,000

Michael Achilles              28.09.01           232,558            86 p               3,000,000
                              
Michael Burne                 3.12.02            125,000            109 p              3,000,000
                              
Steven Hartley                   -                  -                 -                4,000,000

Philip
Lockyer                       1.09.02            218,009           105.5 p             4,000,000

Gerard
Moore                         1.08.02            230,000           107.5 p             3,000,000

Carey                         1.08.02            100,000          107.5 p )
Shakespeare                   31.12.02            50,000           109 p )             3,000,000


All Board options become exercisable between 1 January 2007 and 10 years
following their grant on 14 November 2003.

The exercise of all Board options is subject to stringent performance criteria
that are based upon the Company becoming cash flow positive, increasing average
IFA productivity and reducing the Company's operating overheads as a proportion
of its net retained turnover (or gross margin).  These performance conditions
will be monitored closely by the Remuneration Committee.


Total of options granted

Following the cancellation of existing options and the issue of the new options,
as set out above, the total number of shares, which could be issued if all of
the performance criteria are met are 75,266,762 Ordinary Shares, representing
8.29 per cent. of the current issued Share Capital of the Company.


Further grants pursuant to the revised and new arrangements

A small number of eligible option holders have not yet had an opportunity to
respond to the Company's offer to surrender their options.  Due to the
importance of the option arrangements for all participants in delivering growth
and shareholder value, the Board proposes to allow any such  option holder who
wishes to surrender a further opportunity to do so. If any further eligible
option holders elect to surrender their options by noon on Friday 21 November
2003 the Board proposes  to re-grant or grant options as appropriate.  Any such
grants will be in accordance with the proposals set out above and at the
mid-market share price reported by the Financial Times (as required by the
relevant share scheme rules).  An appropriate announcement will be made
immediately following any such re-grant or grant.


Enquiries:

Inter-Alliance Group plc                                 Financial Dynamics
Keith Carby, Chairman & Chief Executive                  Geoffrey Pelham-Lane
020 8971 4400                                            020 7269 7194
Michael Burne, Legal Director
01793 441 456



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