Edgar Filing: INDIVIDUAL INVESTOR GROUP INC

SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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INDIVIDUAL INVESTOR GROUP, INC.
125 Broad Street
14th Floor
New York, New York 10004
--------------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held June 18, 2002
--------------------

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Individual Investor Group, Inc. will be held at the offices of counsel to our
company, Graubard Miller, 600 Third Avenue, 32nd Floor, New York, New York, on
Tuesday, June 18, 2002, at 10:00 a.m. local time, for the following purposes:

1. To elect three directors of our company (two directors for a
term of two years and until their successors are elected and
qualified and one director for a term of three years and until
the director's successor is elected and qualified);

2. To approve an amendment to our company's certificate of
incorporation to change our company's name to "Index
Development Partners, Inc."; and

3. To transact such other business as may properly come before
the meeting, or any or all postponement(s) or adjournment(s)
thereof.

Only stockholders of record at the close of business on April 29, 2002,
will be entitled to notice of, and to vote at, the meeting and any
postponement(s) or adjournment(s) thereof.

You are urged to read the attached Proxy Statement, which contains
information relevant to the actions to be taken at the meeting. In order to
assure the presence of a quorum, whether or not you expect to attend the meeting
in person, please sign and date the accompanying Proxy Card and mail it promptly
in the enclosed addressed, postage prepaid envelope. You may revoke your proxy
if you so desire at any time before it is voted.

By Order of the Board of Directors

Gregory E. Barton
Secretary

New York, New York
May 13, 2002

INDIVIDUAL INVESTOR GROUP, INC.

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 18, 2002

This Proxy Statement and the enclosed form of proxy are furnished in
connection with solicitation of proxies by the Board of Directors of Individual
Investor Group, Inc. to be used at the Annual Meeting of Stockholders of our
company to be held on June 18, 2002, and any postponements or adjournments
thereof ("Annual Meeting"). The matters to be considered at the Annual Meeting
are set forth in the attached Notice of Annual Meeting.

The proxy will be voted (or withheld from voting) in accordance with
any specifications made. Where no specifications are indicated, the proxies will
vote "FOR" the nominees for directors as described below under Proposal 1, "FOR"
the approval of the change of our company's name (the "Name Change") as
described below under Proposal 2, and, in the discretion of the proxy holders,
on any other business properly coming before the meeting and any postponement(s)
or adjournment(s) thereof. A proxy may be revoked by giving notice to the
Secretary of our company in person, or by written notification actually received
by the Secretary, at any time prior to its being exercised.

Our company's executive offices are located at 125 Broad Street, 14th
Floor, New York, New York 10004. This Proxy Statement and the enclosed form of
proxy, together with a copy of our company's Annual Report on Form 10-KSB for
the year ended December 31, 2001, are first being sent to stockholders on or
about May 13, 2002.

VOTING SECURITIES

The Board of Directors has fixed the close of business on April 29,
2002, as the record date for the determination of stockholders entitled to
notice of, and to vote at, the Annual Meeting. Only stockholders of record at
the close of business on that date will be entitled to vote at the Annual
Meeting or any and all postponement(s) or adjournment(s) thereof. As of April
29, 2002, our company had issued and outstanding 7,894,552 shares of Common
Stock, our company's only class of voting securities outstanding. Each
stockholder of our company will be entitled to one vote for each share of Common
Stock registered in his, her or its name on the record date. The presence, in
person or by proxy, of a majority of all of the outstanding shares of Common
Stock constitutes a quorum at the Annual Meeting. Proxies that are marked
"abstain" and proxies relating to "street name" shares that are returned to our
company but marked by brokers as "not voted" will be treated as shares present
for purposes of determining the presence of a quorum on all matters but will not
be treated as shares entitled to vote on the matter as to which authority to
vote is withheld by the broker ("broker non-votes").

The election of the directors requires a plurality vote of those shares
of Common Stock voted at the Annual Meeting with respect to the election of the
directors. "Plurality" means that the individual who receives the largest number
of votes cast "FOR" is elected as a director. Consequently, any shares of Common
Stock not voted "FOR" a particular nominee (whether as a result of a direction
to withhold authority or a broker non-vote) will not be counted in such
nominee's favor.

The Name Change must be approved by the affirmative vote of a majority
of the shares of Common Stock outstanding and entitled to vote. Because of this,
abstentions from voting with respect to the Name Change and shares deemed
present at the meeting but not entitled to vote on the Name Change (because of a
broker non-vote) will have the same effect as a vote against the proposal.

All other matters to be voted on will be decided by the affirmative
vote of a majority of the shares of Common Stock present or represented at the
Annual Meeting and entitled to vote. On any such matter, an abstention will have
the same effect as a negative vote, but because shares of Common Stock held by
brokers will not be considered entitled to vote on matters as to which the
brokers withhold authority, a broker non-vote will have no effect on the vote.

The following table sets forth certain information as of April 29,
2002, with respect to the Common Stock ownership of (i) those persons or groups
known to beneficially own more than 5% of our company's voting securities, (ii)
each director and director-nominee of our company, (iii) each current executive
officer whose compensation exceeded $100,000 in the 2001 fiscal year, and (iv)
all current directors and executive officers of our company as a group.

Amount and Nature of Percent of Class
Name of Beneficial Owner Beneficial Ownership(1) of Voting Securities
----------------------------------- ----------------------- --------------------

Jonathan L. Steinberg 2,466,079(2) 25.9%

American Financial Group, Inc. 743,396(3) 8.6%

Reliance Insurance Company 666,666(4) 8.4%

Saul P. Steinberg 621,424(5) 7.9%

Gregory E. Barton 206,249(6) 2.6%

Bruce L. Sokoloff 96,000(7) 1.2%

Peter M. Ziemba 70,000(8) *

S. Christopher Meigher III 60,000(9) *

E. Drake Mosier 40,000(10) *

Howard B. Lorch 12,500(11) *

All directors and executive
officers as a group (7 persons) 2,950,828(12) 29.6%

* Less than 1%.

(1) Beneficial ownership is determined in accordance with Rule 13d-3 under
the Securities Exchange Act of 1934. The information concerning the
stockholders is based upon information furnished to our company by such
stockholders. Except as otherwise indicated, all of the shares of
Common Stock are owned of record and beneficially and the persons
identified have sole voting and investment power with respect thereto.

(2) Includes 1,621,069 shares of Common Stock issuable upon options
exercisable within the next 60 days. Does not include 2,768,222 shares
of Common Stock issuable upon exercise of options that are not
currently exercisable and that will not become exercisable within the
next 60 days. The business address of Jonathan L. Steinberg is 125
Broad Street, 14th Floor, New York, New York 10004.

(3) Represents 7,880 shares of 10% Series A Preferred Stock that is
convertible into 743,396 shares of our company's Common Stock for which
American Financial Group, Inc. shares investment power with Carl H.
Lindner, Carl H. Lindner III, S. Craig Lindner and Keith E. Lindner.
The business address of American Financial Group, Inc. is One East
Fourth Street, Cincinnati, Ohio 45202. Information is derived from a
Schedule 13G filed with the Securities and Exchange Commission on
February 6, 2002.

(4) Represents 666,666 shares of Common Stock owned by Reliance Insurance
Company. According to an Amendment to Schedule 13D filed on March 28,
2000, Reliance Financial Services Corporation ("Reliance Financial") is
the direct parent company of Reliance Insurance Company, and in turn is
a wholly-owned subsidiary of Reliance Group Holdings, Inc. ("Reliance
Group"), and Reliance Financial has sole voting and investment power
over these shares. This Amendment states that the business address of
Reliance Financial is 55 East 52nd Street, New York, New York 10055.
However, the company is aware that Reliance Insurance Company currently
is in liquidation by an agency of the Commonwealth of Pennsylvania and
it presumes that the liquidator has sole voting and investment power
over the shares held by Reliance Insurance Company.

(5) Share information is derived from an Amendment to Schedule 13D filed
with the Securities and Exchange Commission on March 28, 2000. The
business address of Saul P. Steinberg is 200 East 62nd Street, New
York, New York 10021.

(6) Represents 206,249 shares of common stock issuable upon the exercise of
options exercisable within the next 60 days. Does not include 293,751
shares of common stock issuable upon exercise of options, which are not
exercisable within the next 60 days.

(7) Includes 80,000 shares of common stock issuable upon the exercise of
options exercisable within the next 60 days. Does not include 10,000
shares of common stock issuable upon exercise of options that are not
currently exercisable and that will not become exercisable within the
next 60 days.

(8) Represents 70,000 shares of Common Stock issuable upon the exercise of
options exercisable within the next 60 days. Does not include 10,000
shares of common stock issuable upon exercise of options that are not
currently exercisable and that will not become exercisable within the
next 60 days.

(9) Represents 60,000 shares of Common Stock issuable upon the exercise of
options exercisable within the next 60 days. Does not include 10,000
shares of common stock issuable upon exercise of options that are not
currently exercisable and that will not become exercisable within the
next 60 days.

(10) Represents 40,000 shares of Common Stock issuable upon the exercise of
options exercisable within the next 60 days. Does not include 20,000
shares of Common Stock issuable upon exercise of options that are not
currently exercisable and that will not become exercisable within the
next 60 days.

(11) Represents 7,500 shares of common stock issuable upon the exercise of
options exercisable within the next 60 days and 5,000 shares of
restricted stock that shall vest within the next 60 days. Does not
include 22,500 shares of common stock issuable upon exercise of
options, which are not exercisable within the next 60 days.

(12) Includes 2,084,818 shares of common stock issuable upon the exercise of
options exercisable within the next 60 days and 5,000 shares of
restricted stock that shall vest within the next 60 days. Does not
include 3,134,473 shares of common stock issuable upon exercise of
options, which are not exercisable within the next 60 days.

PROPOSAL 1: ELECTION OF DIRECTORS

The Board of Directors is divided into three classes. The term of the
first class of directors, consisting of Jonathan L. Steinberg and E. Drake
Mosier, will expire in 2003. The term of the second class of directors,
consisting of Bruce L. Sokoloff and Peter M. Ziemba, would have expired in 2001
but, as our company did not have an annual meeting that year, the term of the
second class of directors will expire on the date of this year's Annual Meeting
and the new term will expire in 2004. The term of the third class of directors,
consisting solely of S. Christopher Meigher III, also will expire on the date of
this year's Annual Meeting and the new term will expire in 2005. In each case,
each director serves from the date of his election until the end of his term and
until his successor is elected and qualified.

Two persons will be elected at the Annual Meeting to serve as directors
for a term of two years (i.e., in the second class of directors). One person
will be elected at the Annual Meeting to serve as a director for a term of three
years (i.e., in the third class of directors). Our company has nominated Bruce
L. Sokoloff and Peter M. Ziemba as the candidates for election as directors in
the second class of directors and has nominated S. Christopher Meigher III as
the candidate for election as director in the third class of directors. Unless
authority is withheld, the proxies solicited by management will be voted "FOR"
the election of these nominees. In case any of the nominees becomes unavailable
for election to the Board of Directors, an event that is not anticipated, the
persons named as proxies, or their substitutes, shall have full discretion and
authority to vote or refrain from voting for any other candidate in accordance
with their judgment.

Information About Nominees

S. Christopher Meigher III is 55 years old and has served as a director
of our company since June 1998. Mr. Meigher has served as Chairman and Chief
Executive Officer of Quest Media, LLC, a magazine publisher, since March 2000.
From November 1992 until February 2000, Mr. Meigher served as Chairman, Chief
Executive Officer and General Partner of Meigher Communications, L.P., a
magazine publisher. Prior thereto, Mr. Meigher was employed by Time Inc. for 23
years and served in numerous senior management positions, including serving as
President of Time Inc.'s New York Magazine Division from 1990 to 1992.

Bruce L. Sokoloff is 53 years old and has served as a director of our
company since 1989. Until December 2000, Mr. Sokoloff had served as Senior Vice
President - Administration of Reliance Group Holdings, Inc., the holding company
for several insurance and financial services corporations, for more than five
years and had been employed at Reliance Group Holdings, Inc. since 1973. Since
December 2000, Mr. Sokoloff has been managing his private investments. Mr.
Sokoloff is an uncle by marriage of Jonathan L. Steinberg.

Peter M. Ziemba is 44 years old and has served as a director of our
company since June 1996. Mr. Ziemba is an attorney and has been a partner of the
law firm Graubard Miller for more than five years and has been employed there
since 1982. Graubard Miller is our outside general counsel.

Information About Other Directors

Each of the directors named in the following table will continue in
office after the Annual Meeting and until his term expires in the year indicated
and his successor is elected and qualified:

Term Served as
Name Age Expires In Director Since Principal Occupation
------------------ --- ---------- -------------- --------------------
Jonathan Steinberg 37 2004 1989 Chairman and Chief
Executive Officer,
Individual Investor
Group, Inc.

E. Drake Mosier 35 2004 1999 Vice Chairman,
mPower, Inc.

Jonathan L. Steinberg founded our company and has served as Chairman of
the Board of Directors and Chief Executive Officer of our company since October
1988. From August 1986 to August 1988, Mr. Steinberg was employed as an analyst
in the Mergers and Acquisitions Department of Bear, Stearns & Co. Inc., an
investment banking firm. Mr. Steinberg is a nephew by marriage of Bruce L.
Sokoloff, one of our company's directors.

E. Drake Mosier has served as a director of our company since December
1999. In January 1995, Mr. Mosier founded 401k Forum, Inc., the predecessor to
mPower, Inc., which provides online, institutional quality investment advice for
non-high net worth retail investors. From August 1995 until November 1999, Mr.
Mosier served as Chairman of the Board of Directors and Chief Executive Officer
and since November 1999 has served as Vice Chairman of mPower, Inc. From
November 1999 to July 2001, Mr. Mosier served as Chairman of the Board and Chief
Executive Officer of mPower Europe, Ltd. Prior to founding mPower, Mr. Mosier
worked at Salomon Smith Barney, Inc. designing and managing institutional 401(k)
plans.

Other Executive Officers

Name Age Position
----------------- --- -----------------------------------
Gregory E. Barton 40 President, Chief Financial Officer,
General Counsel and Secretary

Howard B. Lorch 50 Vice President - Controller

Gregory E. Barton has been President since June 2001, Chief Financial
Officer since October 2000, General Counsel since September 1998 and Secretary
since June 1999. From October 2000 to June 2001, he was Vice President -
Business Development, Finance and Legal Affairs; from November 1999 to October
2000 he was Vice President - Business Development and Legal Affairs; and from
September 1998 to November 1999 was Vice President - Business and Legal Affairs.
From May 1995 to August 1998, Mr. Barton was General Counsel of Alliance
Semiconductor Corporation, a manufacturer of integrated circuits in Santa Clara,
California, and from September 1996 to August 1998 Mr. Barton served as Vice
President - Corporate and Legal Affairs of Alliance. Mr. Barton is a magna cum
laude graduate of Harvard Law School and from 1986 to 1993, was an associate in
the New York office of the law firm Gibson, Dunn & Crutcher.

Howard B. Lorch, CPA, has been Vice President - Controller since
January 2001 and served as an independent consultant to our company from
September 2000 to December 2000. From May 1998 until January 2001, Mr. Lorch was
Senior Vice President of Omni Managed Health, Inc, a financial and benefits
consulting firm. From March 1997 until May 1998, Mr. Lorch was Vice President
and Chief Financial Officer of WellCare Management Group, Inc. a publicly held
health maintenance organization. From January 1975 until February 1997, Mr.
Lorch was employed by the accounting firm of Deloitte & Touche, LLP where he was
a Partner since June 1986.

Board of Directors' Meetings and Committees

During 2001, the Board of Directors met five times and acted by
unanimous consent on two occasions. Our company has standing audit and stock
option committees of the Board of Directors. Our company does not have a
standing nominating committee. All of the directors of our company attended at
least 75% of the total number of meetings of the Board of Directors and all
committees upon which they serve held during 2001, except for E. Drake Mosier.

The stock option committee of the Board of Directors is responsible for
administering our company's 1991 Stock Option Plan ("1991 Plan"), 1993 Stock
Option Plan ("1993 Plan"), 1996 Performance Equity Plan ("1996 Plan"), 2000
Performance Equity Plan ("2000 Plan"), and 2001 Performance Equity Plan ("2001
Plan"), each of which is discussed below. The stock option committee currently
consists of Jonathan L. Steinberg and Bruce L. Sokoloff. During 2001, the stock
option committee acted by unanimous written consent on three occasions.

Audit Committee Information and Report

The company's audit committee was established in June 1996 and is
currently comprised of Bruce L. Sokoloff, Peter M. Ziemba and S. Christopher
Meigher III. The audit committee met three times in the fiscal year ended
December 31, 2001.

Audit Fees

For the fiscal year ended December 31, 2001, the aggregate fees billed
for professional services rendered for the audit of the company's annual
financial statements and the reviews of its financial statements included in the
company's quarterly reports totaled approximately $51,500.

Financial Information Systems Design and Implementation Fees

For the fiscal year ended December 31, 2001, there were no fees billed
for professional services by the company's independent auditors rendered in
connection with, directly or indirectly, operating or supervising the operation
of its information system or managing its local area network.

All Other Fees

For the fiscal year ended December 31, 2001, the aggregate fees billed
for all other professional services rendered by its independent auditors totaled
approximately $16,900.

Audit Committee Report

Notwithstanding anything to the contrary set forth in any of our
company's previous filings under the Securities Act of 1933, as amended (the
"Securities Act"), or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), that might incorporate future filings, including this Proxy
Statement, in whole or in part, this section entitled "Audit Committee Report"
shall not be incorporated by reference into any such filings or into any future
filings, and shall not be deemed soliciting material or filed under the
Securities Act or Exchange Act.

Each member of the audit committee is an "independent director" and is
"financially literate" as defined under the Nasdaq listing standards. The Nasdaq
listing standards define an "independent director" generally as a person, other
than an officer of the company, who does not have a relationship with the
company that would interfere with the director's exercise of independent
judgment. The Nasdaq's listing standards define "financially literate" as being
able to read and understand fundamental financial statements (including a
company's balance sheet, income statement and cash flow statement).

Pursuant to the audit committee's written charter, which was adopted on
June 7, 2000, the audit committee's responsibilities include, among other
things:

o reviewing the annual audited financial statements with the
company's management and its independent auditors and the
adequacy of its internal accounting controls;

o reviewing analyses prepared by the company's management and
independent auditors concerning significant financial
reporting issues and judgments made in connection with the
preparation of its financial statements;

o making recommendations concerning the engagement of the
independent auditors;

o reviewing the independence of the independent auditors;

o reviewing the company's auditing and accounting principles and
practices with the independent auditors and reviewing major
changes to the company's auditing and accounting principles
and practices as suggested by the independent auditors or by
the company's management; and

o reviewing all related party transactions on an ongoing basis
for potential conflict of interest situations.

A copy of the audit committee charter is attached as Appendix A.

The company's audit committee has met and held discussions with the
company's management and its independent auditors. Management represented to the
audit committee that the company's consolidated financial statements were
prepared in accordance with generally accepted accounting principles, and the
audit committee has reviewed and discussed the consolidated financial statements
with the company's management and its independent auditors. The audit committee
discussed with the company's independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61 (Communication with Audit
Committees). The company's independent auditors also provided the audit
committee with the written disclosures required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees) and the audit
committee discussed with the independent auditors and management the auditors'
independence, including with regard to fees billed for auditing services and for
all other professional services rendered during the fiscal year by the company's
independent auditors. Based upon the audit committee's discussion with the
company's management and its independent auditors and the audit committee's
review of the representations of management and the report of the independent
auditors to the audit committee, the audit committee recommended that the Board
of Directors include the audited consolidated financial statements in its annual
report on Form 10-KSB for the fiscal year ended December 31, 2001.

S. Christopher Meigher III
Bruce L. Sokoloff
Peter M. Ziemba

Director Compensation

Directors receive no cash compensation for their services to our
company as directors, but are reimbursed for all reasonable costs incurred in
attending meetings of the Board of Directors. Pursuant to the 1996 Plan,
directors who are not employees of our company receive automatic grants of stock
options upon their election or appointment as a director and upon each
re-election as a director. Each stock option is for 30,000 shares of Common
Stock and vests at the rate of 10,000 shares of Common Stock per year after an
equal period of service, and once vested, remain exercisable until the tenth
anniversary of the date of grant unless the director ceases to be a director for
reason other than death, in which case a shorter exercise period may apply. Each
option is exercisable per share at the fair market value per share on the date
of grant. Notwithstanding the foregoing, if the director eligible for an award
of a stock option is re-elected as a director and has not yet served as a
director of our company for a term of three full years, the award of the stock
option will be modified as follows: (A) the number of shares of Common Stock
that may be acquired under the stock option will be reduced to (1) 20,000 shares
of Common Stock if the director has served as a director more than two years,
but less than three years, (2) 10,000 shares of Common Stock if the director has
served as a director more than one year, but less than two years, and (3) if the
director has served less than one year as a director, no stock option will be
awarded; and (B) the stock option will be exercisable by the director as to
10,000 shares of Common Stock on each of the second and third anniversaries of
his re-election or re-appointment as a director if the stock option represents
the right to acquire 20,000 shares of Common Stock and the stock option will be
exercisable by the director as to 10,000 shares of Common Stock on the third
anniversary of his re-election or re-appointment as a director if the stock
option represents the right to acquire 10,000 shares of Common Stock. In 1999,
the shares of Common Stock reserved under the 1996 Plan were fully utilized and
our company continued this compensation structure outside of the 1996 Plan in
connection with the appointment of E. Drake Mosier as a director.

In May 2001, the Board of Directors approved a special, one time grant
to our company's non-employee directors. Options to purchase 30,000 shares,
vesting in three equal installments of 10,000 shares on May 14 in 2001, 2002 and
2003 were granted to Messrs. Meigher, Mosier, Sokoloff and Ziemba. Additional
options to purchase 10,000 shares vesting immediately were granted to Mr.
Meigher. The exercise price of all of these options were equal to the fair
market value per share on the date of grant.

Executive Compensation

The following table sets forth the compensation for the three fiscal
years ended December 31, 2001, for our Chief Executive Officer and each other
executive officer whose compensation exceeded $100,000 for the fiscal year ended
December 31, 2001.

----------------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
--------------------------------------- ------- ----------------------------- ----------------------------------------
Name and Principal Position Year Annual Compensation Long-Term Compensation
--------------------------------------- ------- ----------------------------- ----------------------------------------
Salary ($) Bonus ($) Number of All Other
Options (#) Compensation ($)
--------------------------------------- ------- --------------- ------------- ---------------- -----------------------

Jonathan L. Steinberg 2001 230,000 - 420,000 -
Chief Executive Officer 2000 230,000 - - -
1999 230,000 - - -
--------------------------------------- ------- --------------- ------------- ---------------- -----------------------
Gregory E. Barton 2001 200,000 62,500(1) 325,000 -
President, Chief Financial Officer, 2000 200,000 62,500(1) - -
General Counsel and Secretary 1999 200,000 - 25,000 -
--------------------------------------- ------- --------------- ------------- ---------------- -----------------------
Howard B. Lorch 2001 140,000 15,764 30,000 -
Vice President - Controller
--------------------------------------- ------- --------------- ------------- ---------------- -----------------------

(1) In 2000, Mr. Barton was awarded a bonus of $125,000 for services
performed for our company and as an incentive for continued employment.
One-half of the bonus was paid in 2000 and one-half was earned and paid
in April 2001.

Compensation Arrangements for Current Executive Officers

Jonathan L. Steinberg does not have a written employment agreement and
since 1997 he has received an annual base salary of $230,000. In April 2002, our
board of directors and Mr. Steinberg agreed that between April 16, 2002 and
December 31, 2002, Mr. Steinberg would receive no cash salary and instead would
be granted a ten-year option to purchase our company's Common Stock at an
exercise price of $0.05 per share (the fair market value of the Common Stock on
the date of the grant), vesting in bimonthly installments, each installment of
which would have a Black-Scholes value (calculated on the April 2002 grant date)
equal to the amount of cash salary that Mr. Steinberg otherwise would have
received. Pursuant to that agreement, in April 2002 Mr. Steinberg was granted
such an option for an aggregate of approximately 3.6 million shares, vesting
bimonthly between April 30, 2002 and December 31, 2002, in installments of
between approximately 208,000-216,000 shares. If all options granted April 2002
were to vest, the average consideration per option our company would have
received (i.e., the amount of salary our company would have saved) by granting
the option would be slightly above $0.045. In the event that any such option is
exercised, the average consideration per share our company would have received
thus would be slightly above $0.095 (the sum of the approximately $0.045 in
saved salary, plus the $0.05 exercise price our company would receive) - an
amount that is more than 90% greater than the fair market value of the Common
Stock on the date of grant.

We employ Gregory E. Barton pursuant to a written employment agreement,
which does not have a specific term of employment, and which provides for an
annual base salary of $200,000.

We employ Howard B. Lorch pursuant to a written employment agreement,
which does not have a specific term of employment, and which provides for an
annual base salary of $140,000. In connection with the commencement of his
employment, on January 1, 2001, Mr. Lorch was granted ten-year options to
purchase 30,000 shares of common stock exercisable at $0.4062 per share (the
fair market value of the common stock on the date of the grant). The options
vest as to 7,500 shares on January 1 in each of 2002, 2003, 2004 and 2005. In
the event the company terminates Mr. Lorch's employment without cause within six
months of a change in control, any shares of the options granted that would have
vested due to the passage of time had he remained employed for an additional
twelve months from the date of termination become immediately vested.

Option Grants

The following table sets forth the stock options granted in the last
fiscal year to our company's executive officers identified in the Summary
Compensation Table above.

--------------------------------------------------------------------------------------------------
OPTIONS GRANTED IN LAST FISCAL YEAR
--------------------------------------------------------------------------------------------------
Number of Percent of Total
Securities Options Granted
Underlying to
Options Employees in Exercise Price Expiration
Name of Executive Granted (#) Fiscal Year (%) Per Share ($) Date
---------------------------- -------------- ------------------ ----------------- -----------------

Jonathan L. Steinberg 420,000(1) 41.3 0.48125 01/02/06
---------------------------- -------------- ------------------ ----------------- -----------------
Gregory E. Barton 325,000(1) 40.0 0.4375 01/02/11
---------------------------- -------------- ------------------ ----------------- -----------------
Howard B. Lorch 30,000(1) 3.0 0.40602 12/31/10
---------------------------- -------------- ------------------ ----------------- -----------------

(1) The options granted to Messrs. Steinberg and Barton become exercisable
as to 25% of the underlying shares on January 3 in each of 2002, 2003,
2004 and 2005. The options granted to Mr. Lorch become exercisable as to
25% of the underlying shares on January 1 in each of 2002, 2003, 2004
and 2005.

The following table sets forth the fiscal year end option values of
outstanding options at December 31, 2001 and the dollar value of unexercised,
in-the-money options for our executive officers identified in the Summary
Compensation table above.

-------------------------------------------------------------------------------------------------------------------------
AGGREGATED FISCAL YEAR END OPTION VALUES
-------------------------------------------------------------------------------------------------------------------------
Number of Securities Underlying Unexercised Dollar Value of Unexercised in-the-Money
Name Options at Fiscal Year End Options at Fiscal Year End(1)
-------------------------- --------------------------------------------- ------------------------------------------------
Exercisable (#) Unexercisable (#) Exercisable ($) Unexercisable ($)
-------------------------- ------------------- ------------------------- ---------------------- -------------------------

Jonathan L. Steinberg 680,000 420,000 - -
-------------------------- ------------------- ------------------------- ---------------------- -------------------------
Gregory E. Barton 125,000 375,000 - -
-------------------------- ------------------- ------------------------- ---------------------- -------------------------
Howard B. Lorch - 30,000 - -
-------------------------- ------------------- ------------------------- ---------------------- -------------------------

(1) These values are based on the difference between the closing sale price
of the common stock on December 31, 2001 ($0.07) and the exercise
prices of the options. None of the options were in-the-money at
December 31, 2001.

- 8

Stock Option Plans

1991 Stock Option Plan

In 1991, we adopted the 1991 Stock Option Plan ("1991 Plan") covering
200,000 shares of our common stock pursuant to which our officers, directors and
key employees are eligible to receive incentive or non-qualified stock options.
The 1991 Plan, which expired in October 2001 (and therefore no further options
may be granted under this plan), is administered by our stock option committee
pursuant to the powers delegated to it by our board of directors. To the extent
permitted under the express provisions of the 1991 Plan, the stock option
committee has authority to determine the selection of participants, allotment of
shares, price, and other conditions of purchase of options and administration of
the 1991 Plan in order to attract and retain persons instrumental to our
success.

1993 Stock Option Plan

In 1993, we adopted the 1993 Stock Option Plan ("1993 Plan") covering
500,000 shares of our common stock pursuant to which our officers, directors,
key employees and consultants are eligible to receive incentive or non-qualified
stock options, stock appreciation rights, restricted stock awards, deferred
stock, stock reload options and other stock based awards. The 1993 Plan will
terminate at such time as no further awards may be granted and awards granted
are no longer outstanding, provided that incentive options may only be granted
until February 16, 2003. The 1993 Plan is administered by our stock option
committee pursuant to the powers delegated to it by our board of directors. To
the extent permitted under the provisions of the 1993 Plan, the stock option
committee has authority to determine the selection of participants, allotment of
shares, price, and other conditions of purchase of awards and administration of
the 1993 Plan in order to attract and retain persons instrumental to our
success.

1996 Performance Equity Plan

In 1996, we adopted the 1996 Performance Equity Plan ("1996 Plan")
covering 1,000,000 shares of our common stock, which is similar to our 1993
Plan, except that incentive options may only be granted until March 18, 2006.
The 1996 Plan is administered by our stock option committee pursuant to the
powers delegated to it by our board of directors.

1996 Management Incentive Plan

In 1996, we adopted the 1996 Management Incentive Plan covering 500,000
shares of our common stock, pursuant to which our executives or those of our
subsidiaries are eligible to receive incentive or non-qualified stock options,
stock appreciation rights, restricted stock awards, deferred stock, stock
related options and other stock based awards. The Management Incentive Plan will
terminate at such time as no further awards may be granted and awards granted
are no longer outstanding, provided that incentive options may only be granted
until November 4, 2006. Our board of directors administers the Management
Incentive Plan.

2000 Performance Equity Plan

In 2000, we adopted the 2000 Performance Equity Plan ("2000 Plan")
covering 1,000,000 shares of our common stock, which is similar to our 1993 and
1996 Plans, except that incentive options may only be granted until June 21,
2010. The 2000 Plan is administered by our stock option committee pursuant to
the powers delegated to it by our board of directors.

2001 Performance Equity Plan

In April 2001, we adopted the 2001 Performance Equity Plan ("2001
Plan"). The 2001 Plan covers 1,000,000 shares of our common stock, and is
similar to our 1993, 1996 and 2000 Plans, except that incentive options may not
be granted since shareholder approval for the 2001 Plan will not be obtained
within one year of its adoption. The 2001 Plan is administered by our stock
option committee pursuant to the powers delegated to it by our board of
directors.

Equity Compensation Plan Information

The following table sets forth certain information at December 31, 2001
with respect to our equity compensation plans that provide for the issuance of
options, warrants or rights to purchase our securities.

-------------------------- ---------------------------- -------------------------- ------------------------------------
Number of Securities to be Weighted-Average Number of Securities Remaining
Issued upon Exercise of Exercise Price of Available for Future Issuance
Outstanding Options, Outstanding Options, under Equity Compensation Plans
Warrants and Rights Warrants and Rights (excluding securities reflected in
Plan Category the first column)
-------------------------- ---------------------------- -------------------------- ------------------------------------

Equity Compensation
Plans Approved by 1,301,501 $1.32 1,020,347
Security Holders
-------------------------- ---------------------------- -------------------------- ------------------------------------
Equity Compensation
Plans Not Approved by 1,498,650 $2.60 940,000
Security Holders (1)-(9)
-------------------------- ---------------------------- -------------------------- ------------------------------------

(1) On April 7, 1994, the company granted to its Chief Executive Officer,
in connection with his ongoing employment, 500,000 ten-year options
outside of the company's stockholder-approved equity compensation
plans, 250,000 of which had an exercise price of $4.9375 per share,
125,000 of which had an exercise price of $6.65 per share and 125,000
of which had an exercise price of $7.50 per share. The exercise price
of all of these options was amended in November 1998 to be $1.25 per
share. No portion of these options had been exercised as of December
31, 2001.

(2) On July 27, 1994, the company granted to its then-President, in
connection with his ongoing employment, ten-year options outside of the
company's stockholder-approved equity compensation plans, of which
there were outstanding at December 31, 2001 124,900 options with an
exercise price of $5.25 per share and 91,666 options with an exercise
price of $5.75 per share. As a result of subsequent agreements between
the company and the optionee, all of these options shall expire in
September 2002.

(3) On August 31, 1994, the company granted to its then-Chief Financial
Officer, in connection with his ongoing employment, ten-year options
outside of the company's stockholder-approved equity compensation
plans, of which there were outstanding at December 31, 2001 75,000
options with an exercise price of $4.25 per share and 18,750 options
with an exercise price of $6.75 per share. As a result of subsequent
agreements between the company and the optionee, the 75,000 options
with an exercise price of $4.25 per share shall expire in September
2002 and the 18,750 options with an exercise price of $6.75 per share
expired in February 2002.

(4) On June 23, 1995, the company granted to its Chief Executive Officer,
then-President and then-Chief Financial Officer, in connection with
their ongoing employment, ten-year options outside of the company's
stockholder-approved equity compensation plans, of which there were
outstanding at December 31, 2001 183,334 options with an exercise price
of $5.75 per share. As a result of subsequent agreements between the
company and the optionees, 103,334 of these options shall expire in
September 2002 and the exercise price of 80,000 of these options was
amended in November 1998 to be $1.25 per share.

(5) On December 15, 1998, the company granted to its then-financial
advisor, in connection with its provision of financial advisory
services, a five-year warrant to purchase 300,000 shares of the
company's common stock at an exercise price of $2.15625 per share. No
portion of this warrant had been exercised as of December 31, 2001.

(6) On December 23, 1998, the company granted to one of its non-employee
directors in connection with his services as a director an option
expiring in June 2005 for 30,000 shares with an exercise price of $2.00
per share, in exchange for cancellation of an existing 30,000 share
option held by such director. No portion of this option had been
exercised as of December 31, 2001.

(7) On November 29, 1999, the company granted to its then-financial
advisor, in connection with its provision of financial advisory
services, a five-year warrant to purchase 15,000 shares of the
company's common stock at an exercise price of $2.91875 per share. No
portion of this warrant had been exercised as of December 31, 2001.

(8) On December 14, 1999, the company granted to one of its non-employee
directors in connection with his services as a director a ten-year
option for 30,000 shares with an exercise price of $4.4375 per share.
No portion of this option had been exercised as of December 31, 2001.

(9) On May 14, 2001, the company granted to its non-employee directors in
connection with their services as directors ten-year options for an
aggregate of 130,000 shares (30,000 for each of three such directors
and 40,000 for one such director) with an exercise price of $0.45 per
share. No portion of either of these options had been exercised as of
December 31, 2001.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires our company's officers, directors and persons who beneficially own more
than ten percent of a registered class of our company's equity securities
("ten-percent stockholders") to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors and
ten-percent stockholders also are required to furnish our company with copies of
all Section 16(a) forms they file. Based solely on its review of the copies of
such forms furnished to it, and written representations that no other reports
were required, our company believes that during our company's fiscal year ended
December 31, 2001, all its officers, directors and ten-percent stockholders
complied with the Section 16(a) reporting requirements, except that Messrs.
Meigher, Mosier, Sokoloff and Ziemba failed to timely file a Form 5 with respect
to the May 2001 grant of options to non-employee directors.

PROPOSAL 2: TO APPROVE THE AMENDMENT TO OUR COMPANY'S
CERTIFICATE OF INCORPORATION TO CHANGE OUR
COMPANY'S NAME TO "INDEX DEVELOPMENT PARTNERS, INC."

In April 2002, the Board of Directors authorized an amendment to our
company's certificate of incorporation to change our company's name to "Index
Development Partners, Inc.," subject to stockholder approval at the Annual
Meeting. In May 1993, our company changed its name to "Individual Investor
Group, Inc.," to align our corporate name with the name of the monthly magazine
we were publishing, Individual Investor magazine. Over the past year-and-half,
our company has largely disposed of its media properties, selling
InsiderTrader.com and Ticker magazine in September 2000, selling the
subscription list of Individual Investor magazine in July 2001 and selling
assets related to individualinvestor.com in November 2001 (we currently continue
to publish Individual Investor's Special Situations Report newsletter). We
believe that the future success of our company will depend upon the results of
our efforts to license our family of stock indexes to companies interested in
creating financial products based on our indexes. We currently maintain eight
stock indexes, under our America's Fastest Growing Companies(R) brand: the
America's Fastest Growing CompaniesSM SmallCap Index; the America's Fastest
Growing CompaniesSM SmallCap Value Index; the America's Fastest Growing
CompaniesSM MidCap Index; the America's Fastest Growing CompaniesSM MidCap Value
Index; the America's Fastest Growing CompaniesSM LargeCap Index; the America's
Fastest Growing CompaniesSM LargeCap Value Index; the America's Fastest Growing
CompaniesSM Total Growth Index; and the America's Fastest Growing CompaniesSM
Total Value Index.

Since we believe our current name, "Individual Investor Group, Inc.,"
may be associated with the print and online media properties that we formerly
published, and since we expect our efforts to license the above indexes (and
other indexes that we are in the process of developing) will be the primary
focus of activities, we believe that it is appropriate to change our company's
name to "Index Development Partners, Inc.," to align our corporate name with our
mission.

If the proposal is approved by our stockholders, a Certificate of
Amendment to our certificate of incorporation will be filed as promptly as
practicable thereafter and the name change will then become effective.
Stockholders will not be required to exchange outstanding stock certificates for
new certificates.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
"FOR" APPROVAL OF THE AMENDMENT TO OUR COMPANY'S
CERTIFICATE OF INCORPORATION TO CHANGE OUR
COMPANY'S NAME TO "INDEXDEVELOPMENT PARTNERS, INC."

INDEPENDENT AUDITORS

Our company anticipates that it will select Deloitte & Touche LLP as
its independent auditors for the year ending December 31, 2002, although no
formal recommendation has been made to our company's Board of Directors by its
audit committee as of the date of this Proxy Statement. A representative of
Deloitte & Touche LLP, the auditors of our company for the year ended December
31, 2001, is expected to be present at the meeting with an opportunity to make a
statement if the representative desires to do so and is expected to be available
to respond to appropriate questions from stockholders.

SOLICITATION OF PROXIES

The solicitation of proxies in the enclosed form is made on behalf of
our company and the cost of this solicitation is being paid by our company. In
addition to the use of the mails, proxies may be solicited personally or by
telephone or telegraph using the services of directors, officers and regular
employees of our company at nominal cost. Banks, brokerage firms and other
custodians, nominees and fiduciaries will be reimbursed by our company for
expenses incurred in sending proxy material to beneficial owners of the Common
Stock.

2003 ANNUAL MEETING STOCKHOLDER PROPOSALS

In order for any stockholder proposal to be presented at the Annual
Meeting of Stockholders to be held in 2003 or to be eligible for inclusion in
our company's Proxy Statement for such meeting, it must be received by our
company at its principal executive offices in New York, New York, by January 13,
2003. Pursuant to Rule 14a-4 promulgated by the Securities and Exchange
Commission, stockholders are advised that our company's management shall be
permitted to exercise discretionary voting authority under proxies it solicits
and obtains for our company's 2003 Annual Meeting of Stockholders with respect
to any proposal presented by a stockholder at such meeting, without any
discussion of the proposal in our company's proxy statement for such meeting,
unless our company receives notice of such proposal at its principal office in
New York, New York, not later than March 28, 2003.

OTHER MATTERS

The Board of Directors knows of no matter which will be presented for
consideration at the Annual Meeting other than the matters referred to in this
Proxy Statement. Should any other matter properly come before the Annual
Meeting, it is the intention of the persons named in the accompanying proxy to
vote such proxy in accordance with their best judgment.

By Order of the Board of Directors

Gregory E. Barton
Secretary

New York, New York
May 13, 2002

APPENDIX A

Adopted
as of 6/7/00

AUDIT COMMITTEE CHARTER
OF
INDIVIDUAL INVESTOR GROUP, INC

The Audit Committee is appointed by the Board to assist the Board in
monitoring (1) the integrity of the financial statements of the company, (2) the
compliance by the company with legal and regulatory requirements and (3) the
independence and performance of the company's external auditors. The Audit
Committee shall also review all related party transactions on an ongoing basis
for potential conflict of interest situations.

The members of the Audit Committee shall meet the independence and
experience requirements of the Nasdaq Stock Market, Inc. The members of the
Audit Committee shall be appointed by the Board.

The Audit Committee shall have the authority to retain special legal,
accounting or other consultants to advise the Committee. The Audit Committee may
request any officer or employee of the company or the company's outside counsel
or independent auditor to attend a meeting of the Committee or to meet with any
members of, or consultants to, the Committee.

The Audit Committee shall make regular reports to the Board.

The Audit Committee shall:

1. Review and reassess the adequacy of this Charter annually and
recommend any proposed changes to the Board for approval.

2. Review the annual audited financial statements with management
and the independent auditors, including major issues regarding
accounting and auditing principles and practices as well as
the adequacy of internal controls that could significantly
affect the company's financial statements.

3. Review an analysis prepared by management and the independent
auditor of significant financial reporting issues and
judgments made in connection with the preparation of the
company's financial statements.

4. If required by the Audit Committee, management or the
independent auditor, review with management and the
independent auditor the company's quarterly financial
statements prior to the filing of the company's Form 10-Q.

5. Meet periodically with management to review the company's
major financial risk exposures and the steps management has
taken to monitor and control such exposures.

6. Review major changes to the company's auditing and accounting
principles and practices as suggested by the independent
auditor or management.

7. Recommend to the Board the appointment of the independent
auditor, which firm is ultimately accountable to the Audit
Committee and the Board.

8. Approve the fees to be paid to the independent auditor.

9. Receive periodic reports from the independent auditor
regarding the auditor's independence consistent with
Independence Standards Board Standard 1, discuss such reports
with the auditor, and if so determined by the Audit Committee,
take or recommend that the full Board take appropriate action
to oversee the independence of the auditor.

A-1

10. Evaluate together with the Board the performance of the
independent auditor and, if so determined by the Audit
Committee, recommend that the Board replace the independent
auditor.

11. Meet with the independent auditor prior to the audit to review
the planning and staffing of the audit.

12. Obtain from the independent auditor assurance that Section 10A
of the Securities Exchange Act of 1934 has not been
implicated.

13. Discuss with the independent auditor the matters required to
be discussed by Statement on Auditing Standards No. 61
relating to the conduct of the audit.

14. Review with the independent auditor their final report and any
problems or difficulties the auditor may have encountered and
any management letter provided by the auditor and the
company's response to that letter. Such review should include:

(a) Any difficulties encountered in the course of the
audit work, including any restrictions on the scope
of activities or access to required information.

(b) Any changes required in the planned scope of the
internal audit.

15. Prepare the report required by the rules of the Securities and
Exchange Commission to be included in the company's annual
proxy statement.

16. Review with the company's General Counsel legal matters that
may have a material impact on the financial statements and any
material reports or inquiries received from regulators or
governmental agencies.

17. Meet at least annually with the chief financial officer and
the independent auditor in separate executive sessions.

18. Review all related party transactions on an ongoing basis for
potential conflict of interest situations.

While the Audit Committee has the responsibilities and powers set forth
in this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the company's financial statements are complete and
accurate and are in accordance with generally accepted accounting principles.
This is the responsibility of management and the independent auditor. Nor is it
the duty of the Audit Committee to conduct investigations, to resolve
disagreements, if any, between management and the independent auditor or to
assure compliance with laws and regulations.

A-2

INDIVIDUAL INVESTOR GROUP, INC. - PROXY
Solicited by the Board of Directors
for Annual Meeting to be held on June 18, 2002

The undersigned Stockholder(s) of INDIVIDUAL INVESTOR GROUP, INC., a
Delaware corporation ("Company"), hereby appoints Jonathan L. Steinberg and/or
Gregory E. Barton, or either of them, with full power of substitution and to
act without the other, as the agents, attorneys and proxies of the undersigned,
to vote the shares standing in the name of the undersigned at the Annual Meeting
of Stockholders of the Company to be held on June 18, 2002 and at all
adjournments thereof. This proxy will be voted in accordance with the
instructions given below. If no instructions are given, this proxy will be voted
FOR all of the following proposals.

R 1. Election of the following Directors:

FOR all nominees listed WITHHOLD AUTHORITY to vote
O below, except as marked for all nominees listed below |_|
to the contrary below |_|

S. Christopher Meigher III, Bruce L. Sokoloff and Peter M. Ziemba
X
INSTRUCTIONS: To withhold authority to vote for any individual
nominee, write that nominee's name in thespace below.

Y
-------------------------------------

2. To approve an amendment to the Company's Certificate of Incorporation
to change the Company's name to "Index Development Partners, Inc."

FOR |_| AGAINST |_| ABSTAIN |_|

3. In their discretion, the proxies are authorized to vote upon such
other business as may come before the meeting or any adjournment
thereof.

|_| I plan to attend the Annual Meeting.

Date _____________, 2002

---------------------
Signature

---------------------
Signature if held jointly

Please sign exactly as
name appears above.
When shares are held by
joint tenants, both
should sign. When
signing as attorney,
executor, administrator,
trustee or guardian,
please give full title
as such. If a
corporation, please sign
in full corporate name
by President or other
authorized officer. If a
partnership, please sign
in partnership name by
authorized person.