U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                    Form 10-Q

 X       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the quarterly period ended September 30, 1998  

__       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the transition period from      to       

         Commission file number  1-10932 


                         INDIVIDUAL INVESTOR GROUP, INC.
             (Exact name of registrant as specified in its charter)

                 Delaware                              13-3487784
        (State or other jurisdiction of               (IRS Employer
        incorporation or organization)              Identification No.)

               1633 Broadway, 38th Floor, New York, New York 10019
                    (Address of principal executive offices)

                                 (212) 843-2777
                         (Registrant's telephone number)


Check  whether  the  registrant  (1) filed all  reports  required to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days. Yes X No .

State the number of shares  outstanding of each of the  registrant's  classes of
common  equity,  as of the latest  practicable  date:  As of October  26,  1998,
registrant had outstanding  8,490,851 shares of Common Stock, $.01 par value per
share.




                INDIVIDUAL INVESTOR GROUP, INC. AND SUBSIDIARIES

                                      INDEX



Part 1.   Financial Information
                                                                        Page 

      Item 1. Financial Statements

         Consolidated Condensed Balance Sheets (Unaudited)
         as of September 30, 1998 and December 31, 1997                   3

         Consolidated Condensed Statements
         of Operations (Unaudited) for the three and nine
         months ended September 30, 1998 and 1997                         4

         Consolidated Condensed Statements
         of Cash Flows (Unaudited) for the nine months
         ended September 30, 1998 and 1997                                5

         Notes to Consolidated Condensed
         Financial Statements (Unaudited)                               6-8

      Item 2. Management's Discussion and Analysis of Financial
      Condition and Results of Operations                              9-15

Part 2. Other Information

      Item 2. Sales of Unregistered Securities                           16

      Item 5. Other Information                                          16

      Item 6. Exhibits and Reports on Form 8-K                           17

Signatures                                                               18

                                       2


INDIVIDUAL INVESTOR GROUP, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) September 30, December 31, ASSETS 1998 1997 --------------- ---------------- Current assets: Cash and cash equivalents $4,657,987 $3,533,622 Marketable securities (Note 6) 518,392 - Accounts receivable (net of allowances of $336,964 in 2,511,571 2,993,299 1998 and $533,693 in 1997) Investment in discontinued operations (Note 2) 816,580 4,037,432 Prepaid expenses and other current assets 223,832 224,801 --------------- ---------------- Total current assets 8,728,362 10,789,154 Deferred subscription expense 623,180 426,826 Property and equipment - net 419,529 556,070 Other assets 385,727 384,917 =============== ================ Total assets $10,156,798 $12,156,967 =============== ================ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $2,256,689 $2,093,987 Accrued expenses 778,230 803,502 Deferred revenue 167,034 343,250 --------------- ---------------- Total current liabilities 3,201,953 3,240,739 Deferred subscription revenue 2,248,562 2,661,129 --------------- ---------------- Total liabilities 5,450,515 5,901,868 --------------- ---------------- Stockholders' Equity: Preferred stock, $.01 par value, authorized 2,000,000 shares - - Common stock, $.01 par value; authorized 18,000,000 shares; issued and outstanding 8,490,851 84,908 71,461 shares in 1998 and 7,146,071 shares in 1997 Additional paid-in capital 24,899,068 19,514,363 Accumulated deficit (19,946,257) (13,330,725) Accumulated other comprehensive loss (Note 6) (331,436) - --------------- ---------------- Total stockholders' equity 4,706,283 6,255,099 =============== ================ Total liabilities and stockholders' equity $10,156,798 $12,156,967 =============== ================
See Notes to Consolidated Condensed Financial Statements 3
INDIVIDUAL INVESTOR GROUP, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended Sept 30, Nine Months Ended Sept 30, --------------------------------------------------------------- 1998 1997 1998 1997 -------------- ------------- -------------- ------------- Revenues: Advertising $2,915,518 $2,416,561 $8,107,316 $6,778,303 Circulation 835,715 893,165 2,605,576 3,012,876 List rental and other 296,478 369,738 950,322 953,175 -------------- ------------- -------------- ------------- Total revenues 4,047,711 3,679,464 11,663,214 10,744,354 -------------- ------------- -------------- ------------- Operating expenses Editorial, production and distribution 2,818,854 2,483,837 8,687,742 6,808,713 Promotion and selling 1,609,155 1,516,473 4,857,883 4,358,746 General and administrative 932,156 1,110,066 3,825,309 3,253,191 Depreciation and amortization 80,888 103,055 232,467 235,652 -------------- ------------- -------------- ------------ Total operating expenses 5,441,053 5,213,431 17,603,401 14,656,302 -------------- ------------- -------------- ------------ Operating loss from continuing operations (1,393,342) (1,533,967) (5,940,187) (3,911,948) Interest income 62,362 26,236 106,025 57,425 -------------- ------------- -------------- ------------- Loss from continuing operations (1,330,980) (1,507,731) (5,834,162) (3,854,523) -------------- ------------- -------------- ------------- Discontinued operations (Note 2) Income (loss) from discontinued operations - 1,473,224 (189,629) 85,328 Loss on disposal of discontinued operations (145,291) - (591,741) - -------------- ------------- -------------- ------------- (Loss) income from discontinued operations (145,291) 1,473,224 (781,370) 85,328 -------------- ------------- -------------- ------------- Net loss ($1,476,271) ($34,507) ($6,615,532) ($3,769,195) ============== ============= ============== ============= Basic and dilutive (loss) income per common share: Continuing operations ($0.16) ($0.23) ($0.76) ($0.60) Discontinued operations ($0.02) $0.22 ($0.10) $0.01 ============== ============= ============== ============= Net loss ($0.17) ($0.01) ($0.86) ($0.59) ============== ============= ============== ============= Average number of common shares used in computing basic and dilutive loss per common share 8,490,851 6,638,148 7,669,479 6,400,435
See Notes to Consolidated Condensed Financial Statements 4
INDIVIDUAL INVESTOR GROUP, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) Nine Months Ended September 30, -------------------------------------------- 1998 1997 -------------------- ------------------- Cash flows from operating activities: Net loss ($6,615,532) ($3,769,195) Less: (Loss) income from discontinued operations (781,370) 85,328 -------------------- ------------------- Loss from continuing operations (5,834,162) (3,854,523) Reconciliation of net loss to net cash used in operating activities: Depreciation and amortization 232,467 235,652 Loss on sale of equipment 2,634 - Changes in operating assets and liabilities: Decrease (increase) in: Accounts receivable 481,728 86,931 Prepaid expenses and other current assets 969 (110,820) Other assets (810) - Deferred subscription expense (196,354) 350,087 Increase (decrease) in: Accounts payable and accrued expenses 137,430 (21,271) Deferred subscription revenue (412,567) (688,848) Deferred revenue (176,216) 412,000 -------------------- ------------------- Net cash used in operating activities (5,764,881) (3,590,792) -------------------- ------------------- Cash flows from investing activities: Purchase of property and equipment (102,011) (128,983) Proceeds from sale of equipment 3,451 - Net cash provided by discontinued operations 1,589,654 1,144,611 -------------------- ------------------- Net cash provided by investing activities 1,491,094 1,015,628 -------------------- ------------------- Cash flows from financing activities: Proceeds from exercise of stock options (Note 3) 398,152 736,786 Proceeds from issuance of common stock (Note 5) 5,000,000 2,250,000 -------------------- ------------------- Net cash provided by financing activities 5,398,152 2,986,786 -------------------- ------------------- Net increase in cash and cash equivalents 1,124,365 411,622 Cash and cash equivalents, beginning of period 3,533,622 1,544,451 ==================== =================== Cash and cash equivalents, end of period $4,657,987 $1,956,073 ==================== ===================
See Notes to Consolidated Condensed Financial Statements 5 INDIVIDUAL INVESTOR GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED) 1. BASIS OF PRESENTATION The consolidated condensed financial statements include the accounts of Individual Investor Group, Inc. and its subsidiaries (the "Company"). Such financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes as required by generally accepted accounting principles for annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 1998 are not necessarily indicative of the results that may be expected for the year ending December 31, 1998. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report for the year ended December 31, 1997 on Form 10-KSB. 2. DISCONTINUED OPERATIONS On April 30, 1998 the Company's Board of Directors decided to discontinue the Company's investment management services business. A wholly owned subsidiary of the Company, WisdomTree Capital Management, Inc. ("WTCM"), serves as general partner of (and is an investor in) a domestic private investment fund. The Company is also a limited partner in the fund. As a result of the Board's decision, WTCM is dissolving the domestic investment fund, liquidating its investments and distributing the net assets to all investors as promptly as possible. In July 1998 the fund distributed $19,682,415 to its partners in cash and securities. In October 1998 the fund distributed additional funds totaling approximately $4,500,000 in cash to its partners. The remainder of the net assets will be distributed as soon as the investments held by the fund are liquidated. The operating results relating to investment management services have been segregated from continuing operations and reported as a separate line item on the statement of operations. As a result the Company has restated its financial statements for the corresponding periods of the prior year. Operating results from discontinued operations are as follows:
Three Months Ended Nine Months Ended September 30, September 30, 1998 1997 1998 1997 Investment management services revenues - $141,999 $137,183 $439,191 Net (depreciation) appreciation in fund - 1,371,887 (276,497) (159,283) Operating expenses - (40,662) (50,315) (194,580) =========== ============ ============= ============ (Loss) income from discontinued operations - $1,473,224 $(189,629) $85,328 =========== ============ ============= ============
6 Loss on disposal of discontinued operations totaled $145,291 and $591,741 for the three and nine months ended September 30, 1998, respectively. Under generally accepted accounting principles, loss on disposal of discontinued operations includes actual losses from the date the Board resolved to discontinue the investment management services operations plus a provision for additional losses based on management's best estimate of the amount to be realized on dissolution of the fund, including applicable severance and legal fees. Additional losses were incurred in the third quarter as a result of changes in the market value of the fund's investments. The fair market value of the Company's investment in the discontinued operations decreased from $4,037,432 at December 31, 1997 to $816,580 at September 30, 1998. The net depreciation in the Company's investment for the three and nine months ended September 30, 1998 was $168,799 and $927,054, respectively. In July 1998 the Company received $2,293,799 of its investment, including cash of $1,443,997 and securities of $849,822 (valued as of June 30, 1998). In October 1998 the Company received an additional $524,432 in cash from the fund. No assurance can be given that the Company will realize any further amount with respect to its investment in the domestic fund. Moreover, the securities received by the Company in July 1998 suffered a material decline in value between June 30, 1998 and September 30, 1998, and subsequently through the date of this Report. There can be no assurance that such securities will not suffer further material declines in value. Selected unaudited financial information for the fund as of September 30, 1998 and December 31, 1997 is as follows: September 30, December 31, 1998 1997 Assets (at fair value) $ 7,195,281 $71,245,441 Liabilities 188,459 32,104,302 Partners' capital 7,006,822 39,141,139 The net losses for the fund for the three and nine months ended September 30, 1998 totaled $1,448,415 and $7,954,776, respectively, as compared to a net gain of $16,544,302 and $3,242,622 for the corresponding periods in 1997. The Company, through WTCM, also provides investment management services to an offshore private investment fund. On May 21, 1998 the sole voting shareholder of the offshore fund, in consultation with WTCM, resolved to wind up the fund and appointed a liquidator to distribute the assets of the fund to its investors in accordance with Cayman Islands law. In July 1998 approximately 55% of the net assets of the offshore fund were distributed in cash to its investors. The remainder of the net assets will be distributed promptly following the liquidation of the investments held by the fund. The Company has no investment in the offshore fund. WTCM is also entitled to receive a special allocation equal to 20% of the net income, if any, of each of the funds (not including income earned on its own investment with respect to the domestic fund), subject to certain limitations, calculated at each funds' year-end, which is December 31st for the domestic fund and June 30th for the offshore fund. The amount of the special allocation for the offshore fund for the year ended June 30, 1998 was $109,319. The Company does not expect to receive a special allocation during 1998 from the domestic fund based on the negative performance of that fund to date. 7 3. STOCK OPTIONS During the three and nine months ended September 30, 1998, the Company granted 563,000 and 751,000 options, respectively, to purchase the Company's Common Stock; 84,938 options were exercised year to date providing proceeds of $398,152 (none were exercised in the third quarter); and 112,500 and 534,310 options were canceled, respectively. Of the total options granted in the third quarter, 250,500 were under the Company's stock option plans and 312,500 were outside the Company's plans, all of which expire at various dates through September 2008. 4. LOSS PER COMMON SHARE Net loss per basic and dilutive common share for the three and nine month periods ended September 30, 1998 and 1997, respectively, were computed using the weighted average number of common shares outstanding during each period. The exercise of stock options and warrants were not assumed in the computation of loss per common share, as the effect would have been antidilutive. Previously reported net loss per share amounts are the same as required by the adoption of Statement of Financial Accounting Standard ("SFAS") No. 128, "Earnings Per Share," which became effective in the fourth quarter of 1997. 5. SALE OF COMMON STOCK On June 26, 1998 the Company entered into a Stock Purchase Agreement with Wise Partners, L.P. providing for the sale of 1,259,842 shares of Common Stock for an aggregate purchase price of $5,000,000, which was based on the closing "ask" price of the common stock on June 25, 1998. Wise Partners; L.P. is a limited partnership of which the Chief Executive Officer of the Company, Jonathan L. Steinberg, is the General Partner. 6. OTHER COMPREHENSIVE INCOME During the year, the Company adopted SFAS No. 130, "Reporting Comprehensive Income". SFAS No. 130 requires the disclosure of comprehensive income, defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income. Comprehensive loss for the three and nine months ended September 30, 1998 and 1997, respectively, is presented in the following table:
Three Months Ended Nine Months Ended September 30, September 30, 1998 1997 1998 1997 Net loss $(1,476,271) $(34,507) $(6,615,532) $(3,769,195) Accumulated other comprehensive loss: Unrealized loss on securities (331,436) - (331,436) - ================ ============== ================= ================= Total comprehensive loss $(1,807,707) $(34,507) $(6,946,968) $(3,769,195) ================ ============== ================= =================
8 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Forward-Looking Statements When used in this Report and in future filings by the Company with the Securities and Exchange Commission, the words or phrases "will likely result," "expects," "will continue," "estimates," "believes," "anticipates," or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on any such forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the results projected in such forward-looking statements. These risks and uncertainties include those set forth in Item 2 (entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations") of this Report, and in Item 1 (entitled "Business") of Part I and in Item 6 (entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations") of Part II of the Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1997, filed with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of this Report. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or to reflect any change in events, conditions or circumstances on which any such forward-looking statement is based, in whole or in part. Three and Nine Months Ended September 30, 1998 as Compared to the Three and Nine Months Ended September 30, 1997 Loss from Continuing Operations The Company's loss from continuing operations was $1,330,980 and $5,834,162 for the three and nine months ended September 30, 1998, respectively, a 12% decrease and 51% increase from the corresponding periods of the previous fiscal year. The decrease in the loss from continuing operations for the third quarter of 1998 as compared to the third quarter of 1997 is due primarily to the improved operating performance for Individual Investor and Ticker magazines as well as lower general and administrative ("G&A") costs. The increase in the year to date operating loss for 1998 as compared to the corresponding period of 1997 relates primarily to three factors: the continued investment in the development of the Company's online service, the decrease in advertising pages and revenues for Individual Investor magazine, and high levels of severance and hiring expenses incurred relating to changes in senior management and key advertising sales personnel. The decrease in the loss from continuing operations for the third quarter of 1998 as compared to the corresponding period of 1997 is due to revenues growing 10% for the period while expenses grew by only 4%. For the three months ended September 30, 1998, total revenues were $4,047,711 as compared to $3,679,464 for the same period in 1997. For the three months ended September 30, 1998, total expenses were $5,441,053 as compared to $5,213,431 for the same period in 1997. Individual Investor magazine made a positive contribution (before deducting G&A expenses) of $43,785 for the third quarter of 1998 as compared to a negative contribution (before deducting G&A expenses) of $34,823 in the corresponding period of 1997. This is primarily attributable to a 36% 9 decrease in subscription promotion expenses for the magazine. Ticker magazine made a negative contribution (before deducting G&A expenses) of $1,047 for the third quarter of 1998 as compared to a negative contribution (before deducting G&A expenses) of $107,535 in the corresponding period of 1997, resulting from a 70% increase in revenues, offset in part by a 34% increase in operating expenses. The Company's online service, Individual Investor Online (www.iionline.com), made a negative contribution (before deducting G&A expenses) of $437,329 for the third quarter of 1998 as compared to a negative contribution (before deducting G&A expenses) of $256,261 in the corresponding period of 1997. This is due to higher levels of expenses incurred for the development and redesign of the service, offset in part by an increase in revenues. In addition, G&A expenses decreased by 16% for the third quarter of 1998 as compared to the corresponding period of 1997. The loss from continuing operations for the nine months ended September 30, 1998 includes a negative contribution (before deducting G&A expenses) of $1,442,324 from the Company's online service, Individual Investor Online (www.iionline.com), as compared to a negative contribution (before deducting G&A expenses) of $590,629 in the corresponding period of 1997. This increase is due to higher levels of expenses incurred for the development and redesign of the service, offset in part by higher revenues. Individual Investor magazine incurred a negative contribution (before deducting G&A expenses) of $312,746 for the nine months ended September 30, 1998, as compared to a positive contribution (before deducting G&A expenses) of $286,423 in the corresponding period of 1997. This change is primarily due to a 5% decrease in advertising revenues in the 1998 period compared to the corresponding period of 1997, and an increase in operating expenses related to a larger subscriber base. Ticker magazine incurred a negative contribution (before deducting G&A expenses) of $165,577 for the nine months ended September 30, 1998, as compared to a negative contribution (before deducting G&A expenses) of $458,373 in the corresponding period of 1997. This improvement for Ticker results primarily from a 90% increase in revenues offset in part by a 38% increase in operating expenses. G&A expenses increased for the year by 18% as compared to 1997. Revenues Revenues from continuing operations for the three and nine months ended September 30, 1998 were $4,047,711 and $11,663,214, respectively, a 10% and 9% increase from the corresponding periods of the previous fiscal year. Advertising revenues for the three and nine months ended September 30, 1998 were $2,915,518 and $8,107,316, respectively, a 21% and 20% increase over the corresponding periods of 1997. Of this increase, the Company's online service, Individual Investor Online (www.iionline.com), generated $307,204 and $888,011 for the three and nine months ended September 30, 1998, respectively, compared to $32,246 and $37,246 for the same periods in 1997. Ticker advertising revenues for the three and nine months ended September 30, 1998 were $651,748 and $1,638,653, respectively, a 72% and 90% increase from the corresponding periods in 1997. This increase relates primarily to nine issues published in 1998 compared to seven in 1997, together with 20% circulation and rate increases effected in February 1998. Individual Investor advertising revenues for the three and nine months ended September 30, 1998 were $1,957,121 and $5,581,206, respectively, a 2% and 5% decrease from the corresponding period of 1997. As a result of the increase in paid circulation of Individual Investor, effective November 1997 the Company increased its advertising rates by 18%. However, total advertising pages for Individual Investor decreased by 41 and 90 total pages for the three and nine months ended September 30, 1998, respectively, reflecting the 10 fact that the sales department was in a period of transition. The Company went without a Publisher from July 1997 until April 1998 and also terminated its West Coast representative in May 1998 and replaced it with two in house representatives located in Los Angeles and San Francisco, respectively, in July 1998. Circulation revenues for the three and nine months ended September 30, 1998 were $835,715 and $2,605,576, respectively, a 6% and 14% decrease when compared to the corresponding periods of the previous fiscal year. Individual Investor subscription revenues for the three and nine months ended September 30, 1998, were $564,744 and $1,788,910, respectively, a 1% increase and 3% decrease from the corresponding periods of 1997. Special Situations Report subscription revenues for the three and nine months ended September 30, 1998 were $104,581 and $301,979, respectively, a 41% and 55% decrease when compared to the corresponding periods of 1997. The decline in Special Situations Report subscription revenues results from a decrease in paid subscribers to 4,500 as of September 30, 1998, as compared to 9,100 as of September 30, 1997. The Company distributes Ticker free of charge by controlled distribution to financial service professionals, and does not currently impose a charge for use of its online service. List rental and other revenues for the three and nine months ended September 30, 1998 were $296,478 and $950,322, respectively, a 20% and 1% decrease from the corresponding periods of the previous fiscal year. List rental revenues for the three and nine months ended September 30, 1998 was $210,996 and $600,521, respectively, a 23% and 18% decrease when compared to the corresponding periods of the previous fiscal year. The decrease in list rental revenue is primarily attributable to reduced demand and the decrease in the number of subscribers to Special Situations Report. Other revenues for the three and nine months ended September 30, 1998 were $85,482 and $349,801, respectively, a 10% decrease and 60% increase from the corresponding periods of the previous fiscal year. The year to date increase in other revenues is due primarily to an increase in the sale of reprints from Individual Investor and Ticker magazines and increased revenues generated from an affinity credit card agreement. Operating Expenses Total operating expenses from continuing operations for the three and nine months ended September 30, 1998 were $5,441,053 and $17,603,401 respectively, a 4% and 20% increase from the corresponding periods of the previous fiscal year. Editorial, production and distribution expenses for the three and nine months ended September 30, 1998 were $2,818,854 and $8,687,742, respectively, a 13% and 28% increase from the same periods of the previous fiscal year. The increase in such expenses is primarily related to the continuing development, redesign, and ongoing maintenance of the Company's online service Individual Investor Online (www.iionline.com). The Company incurred online editorial and production costs totaling $496,139 and $1,566,805 for the three and nine months ended September 30, 1998, respectively, compared to $278,158 and $617,526 for the corresponding periods of the previous fiscal year. Production and distribution expenses relating to all three print publications for the three and nine months ended September 30, 1998 were $1,506,614 and $4,651,003, respectively, a 1% and 12% increase from the corresponding periods of 1997, primarily due to additional copies printed for a larger subscriber base in both Individual Investor and Ticker. Editorial costs for the three and nine months ended September 30, 1998 were $572,202 and $1,761,924, respectively, a 10% and 19% increase from the corresponding periods of the previous fiscal year. This was due mostly to an increase in staffing levels to aid the growth in the Company's print publications and its online service. 11 Promotion and selling expenses for the three and nine months ended September 30, 1998 were $1,609,155 and $4,857,883, respectively, a 6% and 11% increase from the corresponding periods of the previous fiscal year. This increase primarily is due to online advertising expenses of $248,394 and $763,529 for the three and nine months ended September 30, 1998, respectively, compared to $10,348 of online advertising costs for the three and nine months ended September 30, 1997. Subscription promotion expenses for the three and nine months ended September 30, 1998 were $479,207 and $1,596,293, respectively, a 26% and 18% decrease from the corresponding periods of 1997. Advertising salaries, commissions and other related costs for the Company's three publications, for the three and nine months ended September 30, 1998, were $802,755 and $2,282,728, respectively, as compared to $783,112 and $2,211,135 for the same periods in 1997. General and administrative expenses for the three and nine months ended September 30, 1998 were $932,156 and $3,825,309, respectively, as compared to $1,110,066 and $3,253,191 for the same periods in 1997. The decrease of 16% for the third quarter of 1998 as compared to the third quarter of 1997 relates primarily to less salaries paid (the Company's President and General Counsel were hired in September) and lower bad debt expenses compared to the corresponding periods of 1997. Substantially all of the year to date increase as compared to the prior year resulted from incremental expenses (severance, legal fees and executive search fees) incurred in the second quarter totaling approximately $560,000 relating to changes in senior management personnel and key advertising sales personnel. Depreciation and amortization expense for the three and nine months ended September 30, 1998, were $80,888 and $232,467 respectively, as compared to $103,055 and $235,652 for the same periods in 1997. Interest and other income for the three and nine months ended September 30, 1998 were $62,362 and $106,025, respectively, compared to $26,236 and $57,426 for the same periods in 1997. These changes are primarily due to varying levels of cash invested by the Company. Discontinued Operations On April 30, 1998 the Company's Board of Directors decided to discontinue the Company's investment management services business. Accordingly, the operating results relating to investment management services have been segregated from continuing operations and reported as a separate line item on the statement of operations. Net loss from discontinued operations for the three and nine months ended September 30, 1998 were $145,291 and $781,370 respectively, as compared to net income of $1,473,224 and $85,328 for the same periods in 1997. Loss on disposal of discontinued operations was $145,291 and $591,741 for the three and nine months ended September 30, 1998. Under generally accepted accounting principles, loss on disposal of discontinued operations includes actual losses from the date the Board resolved to discontinue the investment management services business, plus a provision for additional losses based on management's best estimate of the amount to be realized on dissolution of the fund. Net loss from discontinued operations includes revenues from investment management services and net appreciation (depreciation) in fund. Investment management services are a combination of management fees, being 1 to 1-1/2 percent of assets under management, and a special profit allocation, being 20% of defined performance. Net appreciation (depreciation) in fund relates to the 12 realized and unrealized earnings of the amount invested by the Company in the domestic fund's portfolio which, because of the nature of the investments, will vary significantly from period to period and may result in losses as well as income. As of September 30, 1998 the value of the Company's investment in the domestic fund was $816,580. As a result of the Board's decision, WTCM is dissolving the domestic and offshore investment funds, liquidating fund investments and distributing the net assets to all investors as promptly as possible. In July 1998 the Company received $2,293,799 of its investment, including cash of $1,443,997 and securities of $849,822 (valued as of June 30, 1998). In October 1998 the Company received an additional $524,432 in cash from the fund. No assurance can be given that the Company will realize any further amounts with respect to its investment the domestic fund. Net Loss The Company's net loss for the three and nine months ended September 30, 1998 was $1,476,271 and $6,615,532, respectively, as compared to a net loss of $34,507 and $3,769,195 for the corresponding periods in 1997. No income taxes were provided in 1998 or 1997 due to the net loss. The basic and dilutive net loss per weighted average common share for the three and nine months ended September 30, 1998 were ($0.17) and ($0.86), respectively, as compared to ($0.01) and ($0.59) for the corresponding periods in 1997. Liquidity and Capital Resources As of September 30, 1998, the Company had working capital of $5,526,409 including cash and cash equivalents totaling $4,657,987. As of September 30, 1998 the fair market value of the Company's investment in the discontinued operations was $816,580, which may be available, subject to market fluctuations and liquidity, to fund the Company's operations as the domestic fund is liquidated and its assets are distributed to its partners. In July 1998 the Company received $2,293,799 of its investment, including cash of $1,443,997 and securities of $849,822 (valued as of June 30, 1998). In October 1998 the Company received an additional $524,432 in cash from the fund. No assurance can be given that the Company will realize any further amount with respect to its investment upon final liquidation of the fund. Moreover, the securities received by the Company in July 1998 suffered a material decline in value between June 30, 1998 and September 30, 1998, and subsequently through the date of this Report. There can be no assurance that such securities will not suffer further material declines in value that may have a material adverse affect on the Company's financial performance. On June 26, 1998 the Company entered into a Stock Purchase Agreement with Wise Partners, L.P. providing for the sale of 1,259,842 shares of Common Stock for an aggregate purchase price of $5,000,000, which was based on the closing "ask" price of the common stock on June 25, 1998. Wise Partners, L.P. is a limited partnership of which the Chief Executive Officer of the Company, Jonathan L. Steinberg, is the General Partner. In addition, during the first nine months of 1998 the Company received $398,152 from exercises of stock options. Management expects revenues to grow for the remainder of 1998 and in 1999 as the Company begins to implement changes made by a new management team, including a new President hired in September 1998 and a new Publisher hired in April 1998. Advertising sales are expected to increase for Individual Investor and Ticker magazines due to the addition of new key sales personnel and the effect of the increased awareness in the marketplace for both magazines begins to take effect. Additionally, the Company expects to realize higher revenues from operations of its online service Individual Investor Online (www.iionline.com). There can be no assurance, however, that such growth will be realized. 13 The Company incurred a net loss of $1,476,271 and $6,615,532 for the three and nine months ended September 30, 1998, respectively. The Company's current levels of revenues are not sufficient to cover its expenses. Under its current business plan, during the remainder of 1998 and for the year 1999, the Company intends to control and reduce several of its expenses while continuing to invest in its existing products. The Company anticipates losses to continue through 1999. Profitability may be achieved in future periods only if the Company can substantially increase its revenues while controlling increases in expenses. There can be no assurance that revenues will be substantially increased, or that the increases in expenses can be controlled adequately to enable the Company to attain profitability. The Company plans to continue investing in its online service Individual Investor Online (www.iionline.com), because it believes that this line of business offers the greatest opportunity for generating substantial revenues over the longer term. There can be no assurance, however, that the online business in fact will generate substantial revenues, as the Company faces many competitors in the business. No assurance can be given that advertising revenues for Individual Investor and Ticker will increase because higher advertising rates may not be accepted by advertisers, advertising pages may continue to decline for Individual Investor, circulation may drop at either or both Individual Investor and Ticker, and the advertising mix may change. Although the Company has recently added key advertising sales personnel and has hired a new publisher, no assurance can be given that these changes will result in advertising revenue increases. The Company also believes that a further stock market correction or "beaR" market would affect its ability to sell advertising to the financial advertiser categories. The Company expects that the lease expenses it will incur in connection with its anticipated relocation to new space in early 1999 will be at a significantly higher rate per square foot and that the Company will incur significant costs related to the relocation. Based on the Company's business plan, the Company believes that its working capital and its investments will be sufficient to fund its operations and capital requirements through 1998. Thereafter, if revenues have not been significantly increased above current and expected levels, the Company will need to raise additional capital in order to sustain operations. The Company is currently exploring its ability to obtain additional financing. No assurance can be given as to the availability of additional financing or, if available, the terms upon which it may be obtained. Any such additional financing may result in dilution of an investor's equity investment in the Company. Failure to obtain additional financing on favorable terms, or at all, will have a substantial In August 1997 the Company retained the investment banking firm of Bear, Stearns & Co. Inc. ("Bear Stearns") to assist the Company in exploring strategic initiatives to enhance shareholder value, the process for which is continuing. With the assistance of Bear Stearns since the time of such retention, the Company has focused on various alternatives including identifying, evaluating, and approaching potential strategic partners seeking investment positions in the Company's financial information services business. Year 2000 The Company has evaluated the potential impact of the situation commonly referred to as the "Year 2000 Issue". The Year 2000 Issue concerns the inability of information systems, whether due to computer hardware or software, to properly recognize and process date sensitive information relating to the year 2000 and beyond. Many of the world's computer systems currently record years in 14 a two-digit format. Such computer systems may be unable to properly interpret dates beyond the year 1999, which could lead to business disruptions in the U.S. and internationally. The potential costs and uncertainties associated with the Year 2000 Issue will depend on a number of factors, including software, hardware and the nature of the industry in which a company operates. The Year 2000 Issue could have a material adverse effect on the Company's results of operations and ability to conduct business. To attempt to ensure that the Company's computer systems (including computer hardware and computer software) are "Year 2000 Ready" (that is, are not disrupted by the Year 2000 Issue), the Company developed a plan to assess, and remediate where necessary, any Year 2000 Issue with respect to the Company's computer systems, and appointed certain employees to administer such plan. The plan contains four phases: first, identifying all computer hardware and software being used by the Company; second, determining whether such hardware and software is Year 2000 Ready; third, remediating any Year 2000 Issue with respect to any particular piece of hardware or software; and fourth, performing a final audit and test. The Company has made significant progress toward completing the first two phases, and currently expects to complete these phases before January 1999. The Company has made significant progress toward completing phase three with respect to software issues, and currently expects to complete phase three, with respect to both software and hardware, before April 1999. The Company intends to commence phase four upon the completion of the first three phases, and currently expects to complete phase four before October 1999. The Company currently believes that additional direct costs associated with making the Company's systems Year 2000 Ready should not exceed $30,000 and that such costs, together with any lost revenue associated with making the Company's systems Year 2000 Ready, should not have a material adverse effect on the Company's operating results or financial condition. The Company does not believe that the diversion of employee resources required to address the Year 2000 Issue would have a material effect on the Company's operating results or financial condition. The Company does not currently have in place a contingency plan of action in the event that it is not able to make its computer systems Year 2000 Ready, but will consider on an ongoing basis whether such a contingency plan should be developed. The dates on which the Company believes it will complete its Year 2000 readiness phases, and the costs associated with such efforts, are based on the Company's current best estimates. However, there can be no guarantee that these estimates will be achieved, or that there will not be a delay in, or increased costs associated with, making the Company's systems Year 2000 Ready. Specific factors that might cause differences between the estimates and actual results include, but are not limited to, the availability and cost of personnel trained in these areas, the ability to locate and correct all relevant computer code and hardware devices (such as microcontrollers), timely responses to and corrections by third-parties and suppliers, the ability to implement interfaces between the new systems and the systems not being replaced, and similar uncertainties. Due to the general uncertainty inherent in the Year 2000 problem, resulting in part from the uncertainty of the Year 2000 readiness of third-parties and the interconnection of global businesses, the Company cannot ensure its ability to timely and cost-effectively resolve problems associated with the Year 2000 Issue, and a failure to do so could materially adversely affect the Company's operations and business, and expose it to third-party liability. The Company also faces risks and uncertainties to the extent that the third party suppliers of products, services and systems on which the Company relies do not have business systems or products that are Year 2000 Ready. The Company has initiated communications with all of its significant suppliers and 15 customers to determine the extent to which the Company's systems and products are vulnerable to those third parties' failure to remediate their own systems' Year 2000 Issues. There is no guarantee that the systems or products of other companies on which the Company relies will be timely, if at all, made Year 2000 Ready, and such a failure by such other companies could have a material adverse effect on the Company's systems and products. The Company is in the process of identifying what actions may be needed to mitigate vulnerability to problems related to enterprises with which the Company interacts, but does not currently have in place a contingency plan of action in the event that the failure by one or more third parties to make their computer systems Year 2000 Ready causes adverse effects to be suffered by the Company. The Conpany will consider on an ongoing basis whether such a contingency plan should be developed.
INDIVIDUAL INVESTOR GROUP, INC. AND SUBSIDIARIES PART II- OTHER INFORMATION ITEM 2 - Sales of Unregistered Securities - ------------- ------------------ ------------ ------------------------------ --------------- ------------------------------ Date of sale Title of security Number Sold Consideration received and Exemption from If option, warrant or description of underwriting registration convertible security, terms or other discounts to market claimed of exercise or conversion price afforded to purchasers - ------------- ------------------ ------------ ------------------------------ --------------- ------------------------------ 7/98 -9/98 Options to purchase 563,000 options granted - no Section 4(2) vesting over a period of common stock granted consideration received by three to five years from to employees, Company until exercise date of grant, subject to directors and certain conditions of consultants continued service; exercisable for a period lasting ten years from date of grant at an exercise prices ranging from $1.1875 to $3.50
ITEM 5 - Other Information As previously reported, in July 1997 certain former limited partners of WisdomTree Associates, L.P. (the "Fund"), the domestic private investment fund managed by a subsidiary of the Company (which fund is treated as a discontinued operation as described elsewhere in this Report), initiated an action in the Supreme Court of the State of New York, County of New York, captioned Richard Tarlow and Sandra Tarlow v. WisdomTree Associates, L.P., Bob Schmidt and Jonathan Steinberg, Index No. 113819/97. Defendants moved to dismiss the action based on plaintiffs' failure to file a complaint, and the action was dismissed without prejudice in October 1997. In October 1998, plaintiffs served notice of motion to vacate the default judgment. Plaintiffs allege that defendants did not timely process plaintiffs request for redemption of their interest in the Fund, which delay allegedly caused plaintiffs to suffer approximately $470,000 in damages. The Company is currently evaluating this matter, and intends to take vigorous action to defend itself. Due to the inherent uncertainty of litigation, the Company is not able to reasonably estimate the potential losses, if any, that may be incurred in relation to this litigation. 16
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibit Description Method of Filing 3.1 Amended and Restated Certificate of Filed herewith Incorporation of Registrant dated August 19, 1991 3.2 Certificate of Amendment of Amended and Restated Filed herewith Certificate of Incorporation of Registrant dated May 26, 1993 3.3 Certificate of Amendment of Amended and Restated Incorporated by reference to Certificate of Incorporation of Registrant Registrant's Form 10-QSB dated June 18, 1997 for the quarter ended June 30, 1997. 3.4 Amended and Restated Certificate of Incorporation of Filed herewith Registrant, as amended through June 18, 1997 3.5 Bylaws of Registrant Incorporated by reference to Exhibit 3.2 to the Registrant's Registration Statement on Form S-18 (File No. 33-43551-NY) (the form "S-18") 4.1 Specimen Certificate for Common Stock of Registrant Incorporated by reference to Exhibit 4.1 to the Form S-18 10.1 Employment Agreement between Registrant and Brette Popper Filed herewith dated September 14, 1998 10.2 Stock Option Agreement between Registrant and Brette Filed herewith Popper dated September 14, 1998 10.3 Employment Agreement between Registrant and Gregory Filed herewith Barton dated July 21, 1998 10.4 Stock Option Agreement between Registrant and Gregory Filed herewith Barton dated September 14, 1998 10.5 Indemnification Agreement between Registrant and Brette Filed herewith Popper dated September 14, 1998 10.6 Indemnification Agreement between Registrant and Gregory Filed herewith Barton dated September 14, 1998 27 Financial Data Schedule September 30, 1998 Filed only with the electronic submission of Form 10-Q in accordance with the EDGAR requirement
(b) The Company did not file any reports on Form 8-K for the Quarter Ended September 30, 1998 17 SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DATE: November 12, 1998 INDIVIDUAL INVESTOR GROUP, INC. (Registrant) By: /s/ Jonathan L. Steinberg Jonathan Steinberg, Chief Executive Officer By: /s/ Henry G. Clark Henry G. Clark, Vice President Finance (Principal Financial and Accounting Officer) 18
EXHIBIT INDEX Exhibit No. Description Page 3.1 Amended and Restated Certificate of Incorporation of Registrant 20 - 27 dated August 19, 1991 3.2 Certificate of Amendment of Amended and Restated 28 - 29 Certificate of Incorporation of Registrant dated May 26, 1993 3.4 Amended and Restated Certificate of Incorporation of Registrant, 30 - 36 as amended through June 18, 1997 10.1 Employment Agreement with Brette Popper dated September 11, 1998 37 - 47 10.2 Stock Option Agreement with Brette Popper dated September 14, 1998 48 - 59 10.3 Employment Agreement with Gregory Barton dated July 21, 1998 60 - 61 10.4 Stock Option Agreement with Gregory Barton dated September 14, 1998 62 - 70 10.5 Indemnification Agreement with Brette Popper dated September 14, 1998 71 - 80 10.6 Indemnification Agreement with Gregory Barton dated September 14, 1998 81 - 90 27 Financial Data Schedule September 30, 1998 91
19

                              AMENDED AND RESTATED

                          CERTIFICATE OF INCORPORATION

                                       OF

                          FINANCIAL DATA SYSTEMS, INC.



     FINANCIAL  DATA SYSTEMS,  INC.  (the  "Corporation"),  a corporation  whose
Certificate of Incorporation originally was filed with the Secretary of State on
September  19, 1985 and which is organized  and existing  under and by virtue of
the General Corporation Law of the State of Delaware, does hereby certify:

     FIRST: That this Amended and Restated Certificate of Incorporation restates
and further amends the provisions of the  Certificate  of  Incorporation  of the
Corporation,  as heretofore  amended or  supplemented,  in  accordance  with the
applicable  provisions of Sections 242 and 245 of the General Corporation Law of
Delaware.

     SECOND:  That the  Board of  Directors  of the  Corporation,  by  Unanimous
Written  Consent  dated  August 19,  1991,  in  accordance  with the  applicable
provisions of Sections  141(f),  242, and 245 of the General  Corporation Law of
Delaware,  and the holder of a majority  of the  issued and  outstanding  Common
Stock,  par value $.10 per share, of the  Corporation,  by Written Consent dated
August 19, 1991, in accordance  with the applicable  provisions of Sections 228,
242,  and  245  of  the  General  Corporation  Law  of  Delaware,  duly  adopted
resolutions  restating and further  amending the Certificate of Incorporation of
the Corporation as set forth below.

     THIRD: That this restatement and amendment shall be effective upon filing.

     FOURTH:   That  the  text  of  the  Certificate  of  Incorporation  of  the
Corporation,  as  heretofore  amended or  supplemented,  is hereby  restated and
further amended to read in its entirety as follows:

                                       20


                                   ARTICLE I

     The name of the Corporation is Financial Data Systems, Inc.

                                   ARTICLE II

     The address of the Corporation's registered office in the State of Delaware
is The Corporation Trust Company, 1209 Orange Street, in the City of Wilmington,
County of New Castle.  The name of its  registered  agent at such address is The
Corporation Trust Company.

                                   ARTICLE III

     The purpose of the  Corporation  is to engage in any lawful act or activity
for which  corporations  may be organized  under the General  Corporation Law of
Delaware.

                                   ARTICLE IV

     The total  number of shares of all  classes of stock  that the  Corporation
shall have authority to issue is twelve million  (12,000,000)  shares,  of which
ten million  (10,000,000)  shares  shall be shares of Common  Stock,  with a par
value of one cent ($.01) per share, and two million  (2,000,000) shares shall be
shares of Preferred Stock, with a par value of one cent ($.01) per share.

     The Board of  Directors  of the  Corporation  hereby  expressly  is granted
authority  to  authorize,  in  accordance  with  Section  151(a) of the  General
Corporation Law of the State of Delaware,  from time to time the issuance of one
or more series of Preferred  Stock and with respect to any such series to fix by
resolution or resolutions the numbers, powers,  designations,  preferences,  and
relative,  participating,  optional, or other special rights of such series, and
the qualifications,  limitations, or restrictions thereof, including but without
limiting the generality of the foregoing, the following:

                                       21


          (1) entitling the holders  thereof to cumulative,  non-cumulative,  or
     partially cumulative dividends, or to no dividends;

          (2) entitling the holders  thereof to receive  dividends  payable on a
     parity with,  junior to, or in preference to, the dividends  payable on any
     other class or series of capital stock of the Corporation;

          (3) entitling the holders  thereof to rights upon the  liquidation of,
     or upon any  distribution  of the assets of, the  Corporation,  on a parity
     with,  junior to, or in  preference  to,  the rights of any other  class or
     series of capital stock of the Corporation;

          (4)  providing for the  conversion,  at the option of the holder or of
     the  Corporation  or both, of the shares of Preferred  Stock into shares of
     any other  class or  classes  of capital  stock of the  Corporation  or any
     series of the same or any other  class or classes or into  property  of the
     Corporation or into the  securities or properties of any other  corporation
     or person, or providing for no conversion;

          (5) providing for the redemption, as a whole or in part, of the shares
     of Preferred  Stock at the option of the  Corporation,  in cash,  bonds, or
     other property, at such price or prices, within such period or periods, and
     under such conditions as the Board of Directors shall so provide, including
     provision for the creation of a sinking fund for the redemption thereof, or
     providing for no redemption; and

          (6) providing  for the lack of voting rights or limited  voting rights
     or enjoying general, special, or multiple voting rights.

                                   ARTICLE V

     The following  provisions  are inserted for the  management of the business
and the conduct of the affairs of the  Corporation  and for further  definition,
limitation, and regulation of the powers of the Corporation and of its directors
and stockholders:
                                       22



          (1) The business and affairs of the Corporation shall be managed by or
     under the direction of the Board of Directors;

          (2) The directors shall have concurrent power with the stockholders to
     make,  alter,  amend,   change,  add  to,  or  repeal  the  Bylaws  of  the
     Corporation;

          (3) The number of directors of the  Corporation  shall be as from time
     to time fixed by the Bylaws of the Corporation;

          (4) In addition to the powers and authority  expressly  conferred upon
     them herein or by statute,  the directors  hereby are empowered to exercise
     all such powers and do all such acts and things as may be exercised or done
     by the Corporation, subject, nevertheless, to the provisions of the General
     Corporation  Law of  Delaware,  this Amended and  Restated  Certificate  of
     Incorporation,  and  any  Bylaws  adopted  by the  stockholders;  provided,
     however,  that  no  Bylaws  hereafter  adopted  by the  stockholders  shall
     invalidate  any prior act of the  directors  which would have been valid if
     such Bylaws had not been adopted.

                                   ARTICLE VI

     The number of directors to constitute the whole Board of Directors shall be
such  number as shall be set forth in the Bylaws and as shall be fixed from time
to time by  resolution of the Board of Directors or by the  stockholders  of the
Corporation.  The Board of  Directors  shall be divided  into  three  classes as
nearly equal in number as may be, with the term of office of one class  expiring
each  year.  At each  annual  meeting  of the  stockholders,  successors  to the
directors  whose  terms  shall then  expire  shall be elected to hold office for
terms expiring at the third succeeding  annual meeting of stockholders.  In case
of any  vacancies,  by reason of an  increase  in the  number  of  directors  or
otherwise,  each  additional  director  may be elected by the Board of Directors
until the end of the term he is elected to fill and until his successor shall be

                                       23


elected and  qualified  in the class to which such  director is assigned and for
the term or remainder  of the term of such class.  Directors  shall  continue in
office until others are chosen and qualified in their stead.  When the number of
directors  is  changed,  any newly  created  directorships  or any  decrease  in
directorships  shall be so  assigned  among the  classes  by a  majority  of the
directors then in office,  though less than a quorum,  as to make all classes as
nearly  equal in  number  as may be  feasible.  No  decrease  in the  number  of
directors shall shorten the term of any incumbent director.

     Notwithstanding  the  foregoing,  whenever  the  holders of any one or more
series of Preferred Stock issued by the Corporation shall have the right, voting
separately  by class or  series,  to elect  directors  at an annual  or  special
meeting of stockholders, the election, term of office, filling of vacancies, and
other  features  of such  directorships  shall be  governed by the terms of this
Certificate of Incorporation  applicable  thereto,  and such directors  selected
shall not be divided into classes  pursuant to this Article VI unless  expressly
provided by such terms.

                                   ARTICLE VII

     No  director  shall  be  personally   liable  to  the  Corporation  or  its
stockholders  for  monetary  damages  for any breach of  fiduciary  duty by such
director  as a  director,  pursuant  to  Section  102  (b)  (7) of  the  General
Corporation Law of Delaware.  Notwithstanding the foregoing sentence, a director
shall be liable to the extent  provided by applicable  law (1) for any breach of
the director's duty of loyalty to the Corporation or its  stockholders,  (2) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (3) pursuant to Section 174 of the General Corporation
Law of Delaware,  or (4) for any transaction  from which the director derived an
improper personal  benefit.  No amendment to or repeal of this Article VII shall
apply to or have  any  effect  on the  liability  or  alleged  liability  of any
director of the Corporation for or with respect to any acts or omissions of such
director occurring prior to such amendment.

                                       24



                                  ARTICLE VIII

     The  Corporation,  to the fullest  extent  permitted  by Section 145 of the
general Corporation Law of Delaware, as the same may be amended and supplemented
from time to time,  or by any  successor  thereto,  shall  indemnify any and all
persons  whom it shall  have power to  indemnify  under  such  Section  from and
against any and all of the expenses,  liabilities, and other matters referred to
in or covered by such  Section,  and, to the fullest  extent  permitted  by such
Section,  shall advance expenses  incurred by such persons in defending civil or
criminal actions, suits, and proceedings. The indemnification and advancement of
expenses  provided for herein shall not be deemed  exclusive of any other rights
to which  those  seeking  indemnification  or  advancement  of  expenses  may be
entitled  under any bylaw,  agreement,  vote of  stockholders  or  disinterested
directors, or otherwise.  Such indemnification and advancement of expenses shall
continue as to a person who has ceased to be a director,  officer,  employee, or
agent and shall inure to the benefit of the heirs, executors, and administrators
of such a person.

                                   ARTICLE IX

     Meetings  of  stockholders  may be held  within  or  without  the  State of
Delaware,  as the Bylaws may provide.  The books of the  Corporation may be kept
(subject to any provision  contained in the General Corporation Law of Delaware)
outside the State of Delaware at such place or places as may be designated  from
time to time by the Board of Directors or in the Bylaws of the Corporation.

                                    ARTICLE X

     Whenever a compromise or arrangement is proposed  between this  Corporation
and its creditors or any class of them and/or between this  Corporation  and its
stockholders  or any class of them, any court of equitable  jurisdiction  within
the  State  of  Delaware  may,  on the  application  in a  summary  way of  this
Corporation or of any creditor or stockholder  thereof or on the  application of
any receiver or receivers appointed for this Corporation under the provisions of
Section 291 of the General  Corporation Law of Delaware or on the application of
trustees in  dissolution  or of any  receiver or  receivers  appointed  for this
Corporation  under the  provisions of the General  Corporation  Law of Delaware,
order  a  meeting  of  the  creditors  or  class  of  creditors,  and/or  of the
stockholders or class of stockholders of this  Corporation,  as the case may be,

                                       25



to be summoned in such manner as the said court directs. If a majority in number
representing  three-fourths  in value of the  creditors  or class of  creditors,
and/or of the stockholders or class of stockholders of this Corporation,  as the
case may be, agree to any compromise or arrangement and to any reorganization of
this  Corporation as a consequence of such compromise or  arrangement,  the said
compromise or arrangement  and the said  reorganization  shall, if sanctioned by
the court to which the said  application  has been  made,  be binding on all the
creditors  or class of  creditors,  and/or on all the  stockholders  or class of
stockholders  of  this  Corporation,  as the  case  may  be,  and  also  on this
Corporation.

                                   ARTICLE XI

     The Corporation  reserves the right to amend, alter,  change, or repeal any
provision  contained in this Certificate of Incorporation,  in the manner now or
hereafter  prescribed by statute,  and all rights  conferred  upon  stockholders
herein are granted subject to this reservation.

                                   ARTICLE XII

     The  amount  of the  authorized  stock of the  Corporation  of any class or
classes may be increased or decreased by the affirmative  vote of the holders of
a majority of the stock of the Corporation entitled to vote.

                                  ARTICLE XIII

     Elections  of  directors  need not be by ballot  unless  the  Bylaws of the
Corporation shall so provide.

                                       26




     IN WITNESS  WHEREOF,  the  Corporation has caused this Amended and Restated
Certificate of  Incorporation  to be signed by its President and attested by its
Secretary this 19th day of August, 1991.



                                            /s/ Jonathan Steinberg
                                            By:  Jonathan Steinberg
                                            Title:   President

Attest:
/s/ Scot Rosenblum
By:  Scot Rosenblum
Title:   Secretary

                                       27




                            CERTIFICATE OF AMENDMENT

                                     OF THE

                              AMENDED AND RESTATED

                          CERTIFICATE OF INCORPORATION

                                       OF

                          FINANCIAL DATA SYSTEMS, INC.

- -------------------------------------------------------------------------------

         Adopted in accordance with the provisions of Section 242 of the
                General Corporation Law of the State of Delaware

- -------------------------------------------------------------------------------


     The  undersigned,  being the  President  and  Secretary,  respectively,  of
Financial Data Systems, Inc., a Delaware Corporation ("Corporation"),  do hereby
certify as follows:

     FIRST,  that the Amended and Restated  Certificate of  Incorporation of the
Corporation  has been amended by striking out Article FIRST an  substituting  in
lieu thereof the following:

          FIRST. The name of the Corporation is
                "INDIVIDUAL INVESTOR GROUP, INC."

     SECOND,  that such  amendment  to the Amended and Restated  Certificate  of
Incorporation  was duly adopted in accordance with the provisions of Section 242
of the General  Corporation Law of the State of Delaware by the affirmative vote
of the  holders  of a  majority  of the  outstanding  shares of the  Corporation
entitled to vote thereon at a meeting of stockholders.

     THIRD,  that such  amendment  shall  take  effect on the first day of June,
1993.

                                       28



     IN WITNESS  WHEREOF,  the  Corporation  has caused this  certificate  to be
signed by  Jonathan  L.  Steinberg,  its  President  and  attested to by Scot A.
Rosenblum, its Secretary, this 26th day of May, 1993.




                                            FINANCIAL DATA SYSTEMS, INC.


                                            By:       /s/ Jonathan Steinberg
                                                     Jonathan L. Steinberg,
                                                          President, Treasurer
                                                          and Chairman




ATTEST:


/s/ Scot Rosenblum
Scot A. Rosenblum,
   Secretary

                                       29


                              AMENDED AND RESTATED
                          CERTIFICATE OF INCORPORATION
                                       OF
                         INDIVIDUAL INVESTOR GROUP, INC.
                       (as amended through June 18, 1997)


                                    ARTICLE I
        The name of the Corporation is "INDIVIDUAL INVESTOR GROUP, INC."

                                   ARTICLE II

     The address of the Corporation's registered office in the State of Delaware
is The Corporation Trust Company, 1209 Orange Street, in the City of Wilmington,
County of New Castle.  The name of its  registered  agent at such address is The
Corporation Trust Company.

                                   ARTICLE II

     The purpose of the  Corporation  is to engage in any lawful act or activity
for which  corporations  may be organized  under the General  Corporation Law of
Delaware.

                                   ARTICLE IV

     The total  number of shares of all  classes of stock  that the  Corporation
shall have authority to issue is twenty million  (20,000,000)  shares,  of which
eighteen million (18,000,000) shares shall be shares of Common Stock, with a par
value of one ce t ($.01) per share, and two million  (2,000,000) shares shall be
shares of Preferred Stock, with a par value of one cent ($.01) per share.

     The Board of  Directors  of the  Corporation  hereby  expressly  is granted
authority  to  authorize,  in  accordance  with  Section  151(a) of the  General
Corporation Law of the State of Delaware,  from time to time the issuance of one
or more series of Preferred  Stock and with respect to any such series to fix by

                                       30


resolution or resolutions the numbers, powers,  designations,  preferences,  and
relative,  participating,  optional, or other special rights of such series, and
the qualifications,  limitations, or restrictions thereof, including but without
limiting the generality of the foregoing, the following:

          (1) entitling the holders  thereof to cumulative,  non-cumulative,  or
     partially cumulative dividends, or to no dividends;

          (2) entitling the holders  thereof to receive  dividends  payable on a
     parity with,  junior to, or in preference to, the dividends  payable on any
     other class or series of capital stock of the Corporation;

          (3) entitling the holders  thereof to rights upon the  liquidation of,
     or upon any  distribution  of the assets of, the  Corporation,  on a parity
     with,  junior to, or in  preference  to,  the rights of any other  class or
     series of capital stock of the Corporation;

          (4)  providing for the  conversion,  at the option of the holder or of
     the  Corporation  or both, of the shares of Preferred  Stock into shares of
     any other  class or  classes  of capital  stock of the  Corporation  or any
     series of the same or any other  class or classes or into  property  of the
     Corporation or into the  securities or properties of any other  corporation
     or person, or providing for no conversion;

          (5) providing for the redemption, as a whole or in part, of the shares
     of Preferred  Stock at the option of the  Corporation,  in cash,  bonds, or
     other property, at such price or prices, within such period or periods, and
     under such conditions as the Board of Directors shall so provide, including
     provision for the creation of a sinking fund for the redemption thereof, or
     providing for no redemption; and

          (6) providing  for the lack of voting rights or limited  voting rights
     or enjoying general, special, or multiple voting rights.

                                       31


                                    ARTICLE V

     The following  provisions  are inserted for the  management of the business
and the conduct of the affairs of the  Corporation  and for further  definition,
limitation, and regulation of the powers of the Corporation and of its directors
and stockholders:

          (1) The business and affairs of the Corporation shall be managed by or
     under the direction of the Board of Directors;

          (2) The directors shall have concurrent power with the stockholders to
     make,  alter,  amend,   change,  add  to,  or  repeal  the  Bylaws  of  the
     Corporation;

          (3) The number of directors of the  Corporation  shall be as from time
     to time fixed by the Bylaws of the Corporation;

          (4) In addition to the powers and authority  expressly  conferred upon
     them herein or by statute,  the directors  hereby are empowered to exercise
     all such powers and do all such acts and things as may be exercised or done
     by the Corporation, subject, nevertheless, to the provisions of the General
     Corporation  Law of  Delaware,  this Amended and  Restated  Certificate  of
     Incorporation,  and  any  Bylaws  adopted  by the  stockholders;  provided,
     however,  that  no  Bylaws  hereafter  adopted  by the  stockholders  shall
     invalidate  any prior act of the  directors  which would have been valid if
     such Bylaws had not been adopted.

                                   ARTICLE VI

     The number of directors to constitute the whole Board of Directors shall be
such  number as shall be set forth in the Bylaws and as shall be fixed from time
to time by  resolution of the Board of Directors or by the  stockholders  of the
Corporation.  The Board of  Directors  shall be divided  into  three  classes as
nearly equal in number as may be, with the term of office of one class  expiring
each  year.  At each  annual  meeting  of the  stockholders,  successors  to the
directors  whose  terms  shall then  expire  shall be elected to hold office for
terms expiring at the third succeeding  annual meeting of stockholders.  In case

                                       32


of any  vacancies,  by reason of an  increase  in the  number  of  directors  or
otherwise,  each  additional  director  may be elected by the Board of Directors
until the end of the term he is elected to fill and until his successor shall be
elected and  qualified  in the class to which such  director is assigned and for
the term or remainder  of the term of such class.  Directors  shall  continue in
office until others are chosen and qualified in their stead.  When the number of
directors  is  changed,  any newly  created  directorships  or any  decrease  in
directorships  shall be so  assigned  among the  classes  by a  majority  of the
directors then in office,  though less than a quorum,  as to make all classes as
nearly  equal in  number  as may be  feasible.  No  decrease  in the  number  of
directors shall shorten the term of any incumbent director.

     Notwithstanding  the  foregoing,  whenever  the  holders of any one or more
series of Preferred Stock issued by the Corporation shall have the right, voting
separately  by class or  series,  to elect  directors  at an annual  or  special
meeting of stockholders, the election, term of office, filling of vacancies, and
other  features  of such  directorships  shall be  governed by the terms of this
Certificate of Incorporation  applicable  thereto,  and such directors  selected
shall not be divided into classes  pursuant to this Article VI unless  expressly
provided by such terms.

                                   ARTICLE VII

     No  director  shall  be  personally   liable  to  the  Corporation  or  its
stockholders  for  monetary  damages  for any breach of  fiduciary  duty by such
director  as a  director,  pursuant  to  Section  102  (b)  (7) of  the  General
Corporation Law of Delaware.  Notwithstanding the foregoing sentence, a director
shall be liable to the extent  provided by applicable  law (1) for any breach of
the director's duty of loyalty to the Corporation or its  stockholders,  (2) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (3) pursuant to Section 174 of the General Corporation
Law of Delaware,  or (4) for any transaction  from which the director derived an

                                       33


improper personal  benefit.  No amendment to or repeal of this Article VII shall
apply to or have  any  effect  on the  liability  or  alleged  liability  of any
director of the Corporation for or with respect to any acts or omissions of such
director occurring prior to such amendment.

                                  ARTICLE VIII

     The  Corporation,  to the fullest  extent  permitted  by Section 145 of the
general Corporation Law of Delaware, as the same may be amended and supplemented
from time to time,  or by any  successor  thereto,  shall  indemnify any and all
persons  whom it shall  have power to  indemnify  under  such  Section  from and
against any and all of the expenses,  liabilities, and other matters referred to
in or covered by such  Section,  and, to the fullest  extent  permitted  by such
Section,  shall advance expenses  incurred by such persons in defending civil or
criminal actions, suits, and proceedings. The indemnification and advancement of
expenses  provided for herein shall not be deemed  exclusive of any other rights
to which  those  seeking  indemnification  or  advancement  of  expenses  may be
entitled  under any bylaw,  agreement,  vote of  stockholders  or  disinterested
directors, or otherwise.  Such indemnification and advancement of expenses shall
continue as to a person who has ceased to be a director,  officer,  employee, or
agent and shall inure to the benefit of the heirs, executors, and administrators
of such a person.

                                   ARTICLE IX

     Meetings  of  stockholders  may be held  within  or  without  the  State of
Delaware,  as the Bylaws may provide.  The books of the  Corporation may be kept
(subject to any provision  contained in the General Corporation Law of Delaware)
outside the State of Delaware at such place or places as may be designated  from
time to time by the Board of Directors or in the Bylaws of the Corporation.

                                       34


                                    ARTICLE X

     Whenever a compromise or arrangement is proposed  between this  Corporation
and its creditors or any class of them and/or between this  Corporation  and its
stockholders  or any class of them, any court of equitable  jurisdiction  within
the  State  of  Delaware  may,  on the  application  in a  summary  way of  this
Corporation or of any creditor or stockholder  thereof or on the  application of
any receiver or receivers appointed for this Corporation under the provisions of
Section 291 of the General  Corporation Law of Delaware or on the application of
trustees in  dissolution  or of any  receiver or  receivers  appointed  for this
Corporation  under the  provisions of the General  Corporation  Law of Delaware,
order  a  meeting  of  the  creditors  or  class  of  creditors,  and/or  of the
stockholders or class of stockholders of this  Corporation,  as the case may be,
to be summoned in such manner as the said court directs. If a majority in number
representing  three-fourths  in value of the  creditors  or class of  creditors,
and/or of the stockholders or class of stockholders of this Corporation,  as the
case may be, agree to any compromise or arrangement and to any reorganization of
this  Corporation as a consequence of such compromise or  arrangement,  the said
compromise or arrangement  and the said  reorganization  shall, if sanctioned by
the court to which the said  application  has been  made,  be binding on all the
creditors  or class of  creditors,  and/or on all the  stockholders  or class of
stockholders  of  this  Corporation,  as the  case  may  be,  and  also  on this
Corporation.

                                   ARTICLE XI

     The Corporation  reserves the right to amend, alter,  change, or repeal any
provision  contained in this Certificate of Incorporation,  in the manner now or
hereafter  prescribed by statute,  and all rights  conferred  upon  stockholders
herein are granted subject to this reservation.

                                       35



                                   ARTICLE XII

     The  amount  of the  authorized  stock of the  Corporation  of any class or
classes may be increased or decreased by the affirmative  vote of the holders of
a majority of the stock of the Corporation entitled to vote.

                                  ARTICLE XIII

     Elections  of  directors  need not be by ballot  unless  the  Bylaws of the
Corporation shall so provide.

                                       36



                              EMPLOYMENT AGREEMENT

     EMPLOYMENT  AGREEMENT  dated as of September  11, 1998  between  Individual
Investor Group, Inc., a Delaware corporation with offices at 1633 Broadway,  New
York, New York 10019  ("Company"),  and Brette Popper,  residing at 522 West End
Avenue, Apartment 15A, New York, New York 10024 ("Executive").

                              W I T N E S S E T H:

     WHEREAS,  Company desires to employ the Executive and Executive  desires to
be employed by Company upon the terms and conditions hereinafter set forth;

     NOW, THEREFORE,  in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:

     1. Employment and Duties. (a) Company hereby agrees to employ Executive and
Executive  hereby  agrees  to be  employed  by the  Company  and to serve as the
President and Chief  Operating  Officer of the Company.  The  Executive's  shall
supervise the day-to-day operation of the Company's business and shall have such
other executive  duties and  responsibilities  consistent with that position and
assigned to Executive by the Chairman and Chief Executive Officer of the Company
from time to time. Executive shall be subordinate to the Chief Executive Officer
of the Company and shall report to the Chief Executive Officer.  Executive shall
use Executive's  best efforts to promote the interests of the Company and devote
Executive's full business time,  attention and skill to the business and affairs
of the Company.

          (b) The Chief Executive Officer of the Company will assess Executive's
     performance and contribution to achieving the business goals of the Company
     as established from time to time by the Board of Directors and, as a result
     of such assessment,  after completion of one year of employment  hereunder,
     will  consider and  recommend to the Board of Directors  whether  Executive
     should be nominated to become a member thereof.

                                       37


     2.  Term of  Employment.  The  term  of  Executive's  employment  hereunder
("Term") shall commence on September 14, 1998 (the  "Effective  Date") and shall
continue  until  December  31, 1999  unless  terminated  earlier as  hereinafter
provided  in this  Agreement,  or unless  extended  by mutual  agreement  of the
Company and Executive.  Pending any  negotiations  for renewal of this Agreement
beyond the Term,  if  Executive  continues  to be employed by the  Company,  her
compensation hereunder shall be continued while she remains employed.

     3. Compensation.

          (a) Salary.  In  consideration  for all the  services to be  performed
     under this  Agreement,  the Company shall pay  Executive a base salary,  in
     equal  installments no less frequently  than  semi-monthly,  at the rate of
     $225,000 per year during the Term.

          (b)  Bonuses.  The  Company  will  pay  Executive  a  bonus  equal  to
     Executive's base salary in respect of the first fiscal year during the Term
     of this  Agreement for which the Company  reports a pre-tax income of $1.00
     or greater,  after  deduction for the bonuses  payable to employees  (other
     than the Chairman and Chief Executive  Officer) with respect to such fiscal
     year,  including the bonus to Executive  provided herein. The bonus will be
     determined by reference to the audited,  consolidated  financial statements
     of the Company,  prepared in accordance with generally accepted  accounting
     principles, consistently applied. The bonus will be paid not later than the
     filing  date of the Form  10-K for the  fiscal  year in which  the bonus is
     earned.  The bonus will be deemed  earned and payable as of the last day of
     the fiscal year  provided  Executive  is employed by the Company as of such
     date, even if Executive is not employed by the Company after that date. The
     Executive and the Company shall  mutually  determine the amounts of bonuses
     to be paid to Executive  in  subsequent  fiscal  years and the  performance
     targets upon which such bonuses will be paid.

          (c) Expenses. The Company shall reimburse Executive for all reasonable
     and  necessary  expenses  incurred in the execution of  Executive's  duties
     hereunder upon Executive's submission to the Company of invoices,  receipts
     and other  documentation  evidencing  such expenses in accordance  with the
     Company's policies and procedures.

                                       38


          (d)  Vacation.  Executive  shall  be  entitled  to four  weeks of paid
     vacation per annum during the Term. Such vacation may be taken by Executive
     at such  times as  generally  do not  interfere  with the  business  of the
     Company and as approved by the Company's  Chief Executive  Officer.  Annual
     vacation time shall not cumulate from year to year.

          (e)  Other  Executive   Benefits.   Executive  shall  be  entitled  to
     participate,  on the same basis and subject to the same  qualifications  as
     other  employees of the Company,  in any medical or  disability  insurance,
     sick leave,  holiday,  pension-401(K)  and other related  benefit plans and
     policies in effect with respect to senior management personnel of Company.

          (f) Stock Options. On the Effective Date the Company will enter into a
     stock option  agreement  in the form of the  agreement  attached  hereto as
     Exhibit A pursuant to which Executive will have the right to purchase up to
     250,000  shares of Common  Stock  exercisable  at a price equal to the last
     sale  price  of a share of  Common  Stock on the  trading  day  immediately
     preceding the Effective Date.

     4. Travel.  Executive  shall  undertake all reasonable  travel  required by
Company in connection with the performance of Executive's duties hereunder.

     5. Non-Competition;  Protection of Confidential  Information;  Intellectual
Property; and Corporate Opportunities .

          (a)  Executive  agrees that  Executive's  services  hereunder are of a
     special, unique and extraordinary  character, and that Executive's position
     with  the  Company  places  her in a  position  of  confidence  and  trust.
     Executive further  acknowledges that in the course of rendering services to
     the Company,  Executive will obtain  knowledge of confidential  information
     and trade secrets of the Company. Accordingly, Executive agrees that during
     the Term and for a one (1) year  period  thereafter,  Executive  shall  not
     directly or indirectly:

                                       39


               (i) in any geographic area where the Company  conducts  business,
          engage or  participate  in,  directly  or  indirectly  (whether  as an
          officer, director, employee, partner, consultant,  holder of an equity
          or debt investment,  lender, or in any other manner or capacity),  any
          publishing business which is, or as a result of Executive's engagement
          or  participation   would  become,   competitive  with  the  financial
          publishing business in which the Company is engaged at that time,

               (ii)  deal,  directly  or  indirectly,  in any  manner  with  any
          customers  doing business with the Company  (except in connection with
          the performance of the duties and obligations of Executive  during the
          Term  of  Employment)  in  soliciting  business  for an  entity  which
          publishes any publication  substantially  similar to the  publications
          published by the Company,

               (iii)  solicit,  directly or indirectly,  any officer,  director,
          employee,  or agent of the  Company  to become an  officer,  director,
          employee, or agent of Employee or anyone else,

               (iv)  engage or  participate  in,  directly  or  indirectly,  any
          business conducted under any name that shall be the same as or similar
          to the name of the Company or any trade name used by it, o

               (v) disparage the reputation of the Company or its publications.

     Ownership,  in the aggregate,  of less than 1% of the outstanding shares of
capital stock of any corporation with revenues in excess of $100,000,000 and one
or more classes of its capital stock listed on a national securities exchange or
publicly-traded in the over-the-counter  market shall not constitute a violation
of the foregoing  provision.  In addition,  the Company agrees that  Executive's
role as a shareholder,  officer and/or  director of Swaps Monitor  Publications,
Inc. (a publisher of financial  information  whose focus is other than providing
investment information tailored to the individual investor) is not and shall not
be considered to be in violation of any provision of this Section 5(a).

                                       40


          (b) Executive  also agrees that either during the Term or at any other
     time thereafter,  Executive shall not divulge,  furnish, or make accessible
     to anyone (other than in the regular course of business of the Company) any
     knowledge or information with respect to confidential or secret  processes,
     inventions, discoveries,  improvements, formulae, plans, material, devices,
     ideas,  or other  know-how,  whether  intellectual  property  or not,  with
     respect to any confidential or secret engineering, development, or research
     work or with  respect to any other  confidential  or secret  aspects of the
     Company's  business   (including,   without  limitation,   customer  lists,
     subscription   lists,   supplier  lists,  and  pricing   arrangements  with
     customers, subscribers, advertisers or suppliers). Executive further agrees
     that during the Term or at any other time  thereafter,  Executive shall not
     make use of,  nor permit to be used,  any  confidential  notes,  memoranda,
     specifications,  programs,  data,  information  or other  materials  of any
     nature  whether oral or written  relating to any matter within the scope of
     the  business of the Company or  concerning  any of its dealings or affairs
     otherwise than for the benefit of the Company,  it being agreed that any of
     the foregoing  shall be and remain the sole and  exclusive  property of the
     Company  and  that   immediately   upon  the   termination  of  Executive's
     employment,  Executive  shall deliver any or all copies of the foregoing to
     the Company.

          (c) During the Term,  Executive  shall  disclose  to the  Company  all
     ideas,  marketing concepts,  slogans,  advertising  campaigns,  characters,
     proposals  and plans  invented  or  developed  by  Executive  which  relate
     directly  or  indirectly  to the  business  of the  Company or arise out of
     Executive's  employment  with  the  Company  or the  use  of the  Company's
     property or resources including,  without limitation,  any ideas, proposals
     and plans which may be  copyrighted,  trademarked,  patented  or  otherwise
     protected (collectively,  "Intellectual  Property").  Executive agrees that
     all such Intellectual Property are and will be the property of the Company.
     Executive  expressly  understands and agrees that any and all  Intellectual
     Property  constitute a "work for hire" under the U.S. Copyright Law. In the

                                       41


     event any  Intellectual  Property  is not  regarded  as a "work for  hire,"
     Executive  hereby  assigns to the Company the sole and  exclusive  right to
     Intellectual  Property.  Executive  agrees  that  Executive  will  promptly
     disclose to the Company any and all Intellectual  Property,  and that, upon
     request of the  Company,  Executive  will  execute  and deliver any and all
     documents or instruments  and take any other action which the Company shall
     deem necessary to assign to and vest completely in the Company,  to perfect
     trademark, copyright and patent protection with respect to, or to otherwise
     protect  the  Company's  trade  secrets  and  proprietary  interest  in the
     Intellectual Property.  Upon disclosure of any Intellectual Property to the
     Company, during the Term and at any time thereafter, Executive will, at the
     request and expense of the  Company,  sign,  execute,  make and do all such
     deeds,  documents,  acts and things as the Company and its duly  authorized
     agents may  reasonably  require:  (i) to apply for,  obtain and vest in the
     name  of  the  Company  alone  (unless  the  Company   otherwise   directs)
     trademarks,  copyrights  or  other  analogous  protection  in  any  country
     throughout  the world and when so  obtained  or vested to renew and restore
     the same; and (ii) to defend any opposition  proceedings in respect of such
     applications  and any opposition  proceedings or petitions or  applications
     for revocation of such trademarks,  copyrights,  patents or other analogous
     protection.  In the  event the  Company  does  not,  within  five (5) days,
     execute and deliver  such  documents  reasonably  necessary  to vest in the
     Company  all  right,  title and  interest  in such  Intellectual  Property,
     Executive  hereby  irrevocably  designates and appoints the Company and its
     duly   authorized   officers   and   agents   as   Executive's   agent  and
     attorney-in-fact, to act for and in Executive's behalf and stead to execute
     and file any such  application or applications and to do all other lawfully
     permitted  acts to further the  prosecution  and  issuance  of  trademarks,
     copyright or this  analogous  protection  thereon with the same legal force
     and effect as if executed by Employee. The obligations of this Section 5(c)
     shall continue after the termination of Executive's employment with respect
     to such Intellectual  Property conceived of or developed by Executive while
     employed by the Company.  The Company  agrees to pay any and all copyright,
     trademark and patent fees and expenses or this costs  incurred by Executive
     for any assistance rendered to the Company pursuant to this paragraph.

          (d) If Executive commits a breach, or threatens to commit a breach, of
     any of the  provisions of Sections 5(a), (b) or (c), the Company shall have
     the right and remedy:

                                       42


               (i)  to  have  the  provisions  of  this  Agreement  specifically
          enforced  by  any  court   having   equity   jurisdiction,   it  being
          acknowledged  and agreed by Executive that the services being rendered
          hereunder to the Company are of a special,  unique,  and extraordinary
          character  and that any such  breach or  threatened  breach will cause
          irreparable  injury to the  Company  and that money  damages  will not
          provide an adequate remedy to the Company; and

               (ii) to  require  Executive  to  account  for and pay over to the
          Company all compensation,  profits, monies, accruals,  increments,  or
          this  benefits  (collectively   "Benefits")  derived  or  received  by
          Executive as the result of any  transactions  constituting a breach of
          any of the  provisions  of  Sections  5(a),  (b) or (c) and  Executive
          hereby  agrees  to  account  for and pay  over  such  Benefits  to the
          Company.

     Each of the rights and  remedies  enumerated  in this Section 5(d) shall be
independent of the other,  and shall be severally  enforceable,  and such rights
and  remedies  shall be in addition to, and not in lieu of, any other rights and
remedies  available  to the Company  under law or equity.  If any  provision  of
Sections  5(a),  (b) or (c) is held to be  unenforceable  because  of the scope,
duration,  or area of its applicability,  the tribunal making such determination
shall have the power to modify such scope,  duration,  or area,  or all of them,
and such provision or provisions shall then be applicable in such modified form.

     6. Executive's Representations. Executive represents and warrants that:

               (a) Executive  has the right to enter into this  Agreement and is
          not subject to any contract,  commitment,  agreement,  arrangement  or
          restriction of any kind which would prevent  Executive from performing
          Executive's duties and obligations hereunder; and

               (b)  Executive  is  currently  in good  health and to the best of
          Executive's  knowledge,  Executive  is not subject to any  undisclosed
          medical  condition  which might have a material  effect on Executive's
          ability to perform satisfactorily Executive's services hereunder.

                                       43


     7. Death of Executive.  In the event of Executive's  death during the Term,
this Agreement shall terminate as of the date of death, and the Company shall no
longer  be under  any  obligation  to  Executive  or her  legal  representatives
pursuant to this  Agreement  except for (i) any base salary  accrued and unpaid,
(ii)  any  earned  but  unpaid  bonus  and  (iii) any   expenses   incurred  but
unreimbursed under Section 3(c) hereof, to the date of death.

     8.  Disability.  If, during the Term,  Executive shall be unable to perform
the duties  required of her pursuant to this  Agreement due to any  "disability"
(as  hereinafter  defined),  the  Company  shall  have the  right  to  terminate
Executive's  employment hereunder by giving not less than 14 days' prior written
notice to Employee,  at the end of which 14-day  period  Executive's  employment
hereunder  shall be  terminated  and the  Company  shall no  longer be under any
obligation  to the  Executive  or her  legal  representatives  pursuant  to this
Agreement except for (i) any base salary accrued and unpaid, (ii) any earned but
unpaid bonus and (iii) any expenses incurred but unreimbursed under Section 3(c)
hereof,  to the  date  of  termination.  As used in  this  Agreement,  the  term
"disability"  shall mean the earlier to occur of either of the following events:
(i) the  determination by a physician selected by the Company,  duly licensed in
New York with a medical  specialty  appropriate  for such  determination  (which
determination  shall be binding and  conclusive  for the purpose of this Section
8), that the Executive is either physically or mentally, permanently disabled or
incapacitated or otherwise so disabled or incapacitated  that she will be unable
to perform  her  obligations  to, or duties for,  the  Company  pursuant to this
Agreement for ninety (90)  consecutive days or a period in excess of one hundred
fifty  (150) days out of any period of three  hundred  sixty  (360)  consecutive
days,  or  (ii) the  Employee,  because  of  physical  or mental  disability  or
incapacity, was unable to perform her obligations to, or duties for, the Company
pursuant to this Agreement on a full-time basis for ninety (90) consecutive days
or a period in excess of one hundred fifty (150) days out of any period of three
hundred sixty (360)  consecutive days. The failure of the Executive to submit to
an examination of a physician under this Section 8 shall automatically result in
a determination of disability hereunder.

                                       44


     9. Termination.

          (a) In  addition to  Sections 7 and 8 herein,  Executive's  employment
     hereunder  may be  terminated at any time by the Company upon the happening
     of any one or more of the following occurrences (hereinafter referred to as
     "termination for cause"):

               (i) The willful or continued  failure of Executive to perform her
          obligations under this Agreement,  or the material breach of any other
          provision of this Agreement by Executive, after her receipt of written
          notice from the Company of such failure and a  reasonable  opportunity
          to cure (not to exceed 10 days) has been given to the Executive;

               (ii) The indictment of Executive for any crime which  constitutes
          a felony in the jurisdiction involved or any conviction of, or plea of
          guilty or nolo  contendere to, any crime  involving moral turpitude or
          which tends to bring to the Company into disrepute;

               (iii)    Executive's    commission   of   any   act   of   fraud,
          misappropriation,   embezzlement  or  similar  willful  and  malicious
          conduct against the Company; or

               (iv)  Executive's  commission  of an act or  failure  to act that
          involves  willful  misconduct,   bad  faith  or  gross  negligence  of
          Employee.

          (b) Upon the  termination of the  Executive's  employment  pursuant to
     Section  9(a),  the  Company  shall  have  no  further  obligations  to the
     Executive hereunder.

          (c) If the Company shall terminate  Executive's  employment other than
     pursuant to Sections 7, 8 or 9 (a), the Company shall pay Executive, within
     thirty (30) days of  termination,  severance pay equal to the lesser of six
     month's  base salary or the salary  remaining to be paid through the end of
     the Term (as if there had been no termination),  and the Company shall have
     no further  obligations  to Executive  hereunder  except for (i) any salary
     accrued and unpaid, (ii) any earned but unpaid bonus and (iii) any expenses
     incurred  but  unreimbursed  under  Section  3(c)  thereof,  to the date of
     termination.

                                       45



     10. Policy on Insider Trading. Executive agrees to abide by the compliance
policies of the Company relating to buying and selling securities of the Company
and of companies which are the subject of articles in the Company's publications
or of the Company's investment-related products, as such policy exists from time
to  time.  Executive  shall  sign  all such  acknowledgments  of the  compliance
policies  as may be  requested  from time to time and  cooperate  fully with the
Company and its agents in the implementation of the compliance policies.

     11. Assignment. This Agreement is a personal contract and Executive may not
sell, transfer or assign her rights,  interests and obligations  hereunder.  Any
assignment by the Executive contrary to this paragraph shall be null and void of
no force and effect.  The rights and  obligations of Company  hereunder shall be
binding upon and run in favor of the successors and assigns of Company.

     12. Entire  Understanding;  Governing  Law.  This  Agreement and the Option
Agreement  referred  to in Section  3(f)  represents  the entire  agreement  and
understanding between the parties with respect to the subject matter thereof and
supersedes all prior  agreements  and  understandings.  This Agreement  shall be
governed by, and  construed in  accordance  with,  the internal laws of New York
without regard to principles of conflicts of law.

     13.  Modification;  Waiver. This Agreement may not be amended,  modified or
amended,  nor may any term or  provision  be waived  unless  such  modification,
amendment  or  waiver  is in  writing  and  signed  by the  party  against  whom
enforcement of any such modification, amendment or waiver is sought.

     14.  Headings.  Section  headings  contained  in  this  Agreement  are  for
convenience  of  reference  only  and  shall  not be  considered  a part of this
Agreement.

     15. Severability.  If any provision or if any part of any provision of this
Agreement is found to be unenforceable,  illegal or contrary to public policy by
a court of competent  jurisdiction,  the parties agree that this Agreement shall

                                       46


remain in full force and effect  except for such  provision  or part of any such
provision held to be unenforceable.

     16.  Notices.  Any notices or other  communications  required or  permitted
hereunder  shall be in  writing  and  shall be deemed  given  upon  delivery  if
delivered in person or by overnight courier (e.g.  Federal  Express),  or on the
third  business day  following  deposit in the United  States  mail,  if sent by
registered or certified mail, return receipt requested, addressed to the address
of the party to receive  notice set forth  herein,  or to such this address as a
party shall designate by notice in writing given to the this party in accordance
with the terms hereof, except that notices regarding changes in address shall be
effective only upon receipt.

     IN WITNESS  WHEREOF,  Company and Executive has signed this Agreement as of
the day and year first above written.

                                        INDIVIDUAL INVESTOR GROUP, INC.



                                        By:/s/Jonathan Steinberg
                                        Jonathan L. Steinberg
                                        Chairman and Chief Executive Officer


                                        /s/Brette Popper
                                        Brette Popper

                                       47



                             STOCK OPTION AGREEMENT


     AGREEMENT  dated  as of  the  14 day of  September,  1998,  by and  between
Individual Investor Group, Inc., a Delaware corporation ("Company"),  and Brette
Popper ("Employee").

     WHEREAS, the Company and Employee have entered into an Employment Agreement
dated  September  11, 1998  pursuant to which  Employee  will be employed by the
Company ("Employment Agreement");

     WHEREAS,  on September 14, 1998 ("Grant Date"),  the Stock Option Committee
of the Board of Directors of the Company authorized the grant to the Employee of
an  option  ("Option")  to  purchase  an  aggregate  of  250,000  shares  of the
authorized  but unissued  Common Stock of the Company,  $.01 par value  ("Common
Stock"),  conditioned upon the Employee's  acceptance thereof upon the terms and
conditions  set  forth  in  this  Agreement  and  the  terms  of the  Employment
Agreement; and

     WHEREAS,  the  Employee  desires  to  acquire  the  Option on the terms and
conditions set forth in this Agreement;

     IT IS AGREED:

     1. Grant of Stock Option. The Company hereby grants the Employee the Option
to purchase all or any part of an  aggregate  of 250,000  shares of Common Stock
("Option  Shares") on the terms and  conditions  set forth herein and subject to
the provisions of the Employment Agreement.

     2.  Non-Incentive  Stock  Option.  The  Option  represented  hereby  is not
intended to be an Option which  qualifies as an  "Incentive  Stock Option" under
Section 422 of the Internal Revenue Code of 1986, as amended.

                                       48


     3. Exercise  Price.  The exercise price of the Option is $1.1875 per share,
subject to adjustment as hereinafter provided.

     4.  Exercisability.  This Option is  exercisable,  subject to the terms and
conditions of this  Agreement,  as follows:  (i) the right to purchase 62,500 of
the Option Shares shall be exercisable on or after September 14, 1999,  (ii) the
right to purchase an additional 62,500 of the Option Shares shall be exercisable
on and after September 14, 2000 (iii) the right to purchase an additional 62,500
of the Option Shares shall be  exercisable  on and after  September 14, 2001 and
(iv) the right to purchase an  additional  62,500 of the Option  Shares shall be
exercisable  on or after  September  14,  2002.  After a portion  of the  Option
becomes exercisable,  it shall remain exercisable,  except as otherwise provided
herein, until the close of business on September 14, 2008 ("Exercise Period").

     5. Effect of Termination of Employment.

          5.1. Termination Due to Death. If Employee's employment by the Company
     terminates by reason of death, the portion of the Option,  if any, that was
     exercisable  as of the date of death may  thereafter  be  exercised  by the
     legal  representative of the estate or by the legatee of the Employee under
     the will of the  Employee,  for a period  of one year from the date of such
     death or until the expiration of the Exercise  Period,  whichever period is
     shorter.  The portion of the Option, if any, that was not exercisable as of
     the date of death shall immediately terminate upon death.

          5.2.  Termination Due to Disability.  If Employee's  employment by the
     Company  terminates by reason of Disability (as such term is defined in the
     Employment  Agreement),  the  portion  of the  Option,  if  any,  that  was
     exercisable  as of the date of  termination of employment may thereafter be
     exercised  by the  Employee  for a period  of one year from the date of the
     termination of employment or until the  expiration of the Exercise  Period,
     whichever  period is shorter.  The portion of the Option,  if any, that was
     not  exercisable  as of the date of the  termination  of  employment  shall
     immediately terminate upon the termination of employment.

                                       49


          5.3. Other Termination.

               5.3.1. If Employee's  employment is terminated by the Company for
          cause (as defined in Section 9(a) of the Employment  Agreement),  this
          Option, whether or not exercisable, shall immediately expire.

               5.3.2.  If  Employee's  employment  is  terminated by the Company
          without   cause  (as  defined  in  Section  9(a)  of  the   Employment
          Agreement), the portion of the Option, if any, that was exercisable as
          of the date of  termination  of employment may thereafter be exercised
          by the  Employee  for a  period  of one  year  from  the  date  of the
          termination  of  employment  or until the  expiration  of the Exercise
          Period,  whichever  period is shorter.  The portion of the Option,  if
          any, that was not  exercisable  as of the date of the  termination  of
          employment  shall  immediately   terminate  upon  the  termination  of
          employment.

               5.3.3.  If Employee  terminates her employment  with the Company,
          this Option, whether or not exercisable, shall immediately expire.

     6.  Withholding  Tax.  Not later than the date as of which an amount  first
becomes  includible  in the gross income of the Employee for Federal  income tax
purposes  with respect to the Option,  the Employee  shall notify the Company of
the amount and, to the extent required, pay to the Company, or make arrangements
satisfactory to the Board regarding the payment of, any Federal, state and local
taxes of any kind  required by law to be  withheld or paid with  respect to such
amount.  The  obligations  of the Company  pursuant to this  Agreement  shall be
conditional  upon such payment or arrangements  with the Company and the Company
shall,  to the extent  permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to the Employee from the Company.

                                       50


     7. Adjustments. In the event of any recapitalization,  dividend (other than
cash  dividend),  stock split,  reverse stock split,  or other change in capital
structure of the Company  affecting the number of issued shares of Common Stock,
the Company shall proportionally adjust the number and kind of Option Shares and
the exercise price of the Option in order to prevent the dilution or enlargement
of the Employee's  proportionate  interest in the Company and Employee's  rights
hereunder   immediately   prior   to   the   reorganization,   recapitalization,
consolidation,  dividend,  stock  split,  reverse  stock split or other  change,
provided that the number of Option Shares shall always be a whole number.

     8.  Acceleration  of  Vesting  on Change of  Control.  Notwithstanding  the
provisions  of  Sections  4, in the event of a "change of  control"  (as defined
below) while the Employee is employed by the Company, the vesting of this Option
shall  accelerate  and all the Option  Shares shall be  purchasable  by Employee
simultaneous with such change of control. For the purposes of this Agreement,  a
change of control shall mean (i) the  acquisition by any "person" (as defined in
Section  3(a)(9) and 13(d) of the  Securities  Exchange Act of 1934,  as amended
("Exchange Act")),  other than a stockholder of the Company that, as of the date
of this Agreement, is the beneficial owner (as defined in Rule 13d-3 promulgated
under the Exchange Act) of 10% or more of the outstanding  voting  securities of
the  Company,  of  more  than  50% of the  combined  voting  power  of the  then
outstanding  voting securities of the Company or (ii) the sale by the Company of
all,  or  substantially  all,  of the  assets  of  the  Company  to one or  more
purchasers, in one or a series of related transactions, where the transaction or
transactions  require  approval  pursuant to Delaware law by the stockholders of
the Company.

     9. Method of Exercise.

          9.1. Notice to the Company.  The Option shall be exercised in whole or
     in part by written  notice in  substantially  the form  attached  hereto as
     Exhibit A  directed  to the  Company  at its  principal  place of  business
     accompanied by full payment as  hereinafter  provided of the exercise price
     for the number of Option Shares specified in the notice.

          9.2.   Delivery  of  Option  Shares.   The  Company  shall  deliver  a
     certificate  for the Option  Shares to the Employee as soon as  practicable
     after payment therefor.

          9.3.  Payment of Purchase  Price.  The Employee shall make payments by
     wire transfer,  certified or bank check,  in each case payable to the order
     of  the  Company.   Alternatively,   the  Employee  may  make  arrangements
     satisfactory  to the Company with a bank or a broker who is a member of the
     National  Association of Securities  Dealers,  Inc. to sell on the exercise

                                       51


     date a sufficient  number of the Option Shares being  purchased so that the
     net proceeds of the sale transaction will at least equal the Exercise Price
     multiplied by the number of Option Shares being purchased  pursuant to such
     exercise,  plus the amount of any applicable withholding taxes and pursuant
     to which the bank or broker  undertakes to deliver the full Exercise  Price
     multiplied by the number of Option Shares being purchased  pursuant to such
     exercise,  plus  the  amount  of any  applicable  withholding  taxes to the
     Company on a date  satisfactory to the Company,  but no later than the date
     on which  the sale  transaction  would  settle  in the  ordinary  course of
     business.

     10.  Nonassignability.  The Option shall not be assignable or  transferable
except by will or by the laws of descent  and  distribution  in the event of the
death of the  Employee.  No transfer of the Option by the Employee by will or by
the laws of descent  and  distribution  shall be  effective  to bind the Company
unless the Company shall have been  furnished  with written notice thereof and a
copy of the will and such other  evidence as the Company may deem  necessary  to
establish the validity of the transfer and the  acceptance by the  transferee or
transferees of the terms and conditions of the Option.

     11. Company Representations.  The Company hereby represents and warrants to
the Employee that:

          (a) the  Company,  by  appropriate  and all required  action,  is duly
     authorized  to  enter  into  this  Agreement  and  consummate  all  of  the
     transactions contemplated hereunder; and

          (b) the Option Shares, when issued and delivered by the Company to the
     Employee in accordance with the terms and conditions  hereof,  will be duly
     and validly issued and fully paid and non-assessable.

     12. Employee  Representations.  The Employee hereby represents and warrants
to the Company that:

          (a) she is acquiring  the Option and shall  acquire the Option  Shares
     for her own account and not with a view towards the distribution thereof;

                                       52


          (b) she has received a copy of all reports and  documents  required to
     be filed by the Company  with the  Commission  pursuant to the Exchange Act
     within  the last 24 months  and all  reports  issued by the  Company to its
     stockholders;

          (c) she  understands  that she  must  bear  the  economic  risk of the
     investment  in the Option  Shares,  which cannot be sold by her unless they
     are  registered  under  the  Securities  Act of  1933  ("1933  Act")  or an
     exemption therefrom is available thereunder;

          (d) she has had both the  opportunity  to ask  questions  and  receive
     answers  from the  officers  and  directors  of the Company and all persons
     acting on its behalf  concerning the terms and conditions of the offer made
     hereunder  and to obtain  any  additional  information  to the  extent  the
     Company possesses or may possess such information or can acquire it without
     unreasonable  effort or expense  necessary  to verify the  accuracy  of the
     information obtained pursuant to clause (b) above;

          (e) she is aware that the  Company  shall place stop  transfer  orders
     with its transfer  agent  against the transfer of the Option  Shares in the
     absence of  registration  under the 1933 Act or an  exemption  therefrom as
     provided herein; and

          (i) The  certificates  evidencing  the  Option  Shares  may  bear  the
     following legends:

          "The shares  represented  by this  certificate  have been acquired for
          investment  and have not been  registered  under the Securities Act of
          1933. The shares may not be sold or transferred in the absence of such
          registration or an exemption therefrom under said Act."

          "The  shares  represented  by  this  certificate  have  been  acquired
          pursuant to a Stock Option Agreement,  dated as of September 14, 1998,
          a  copy  of  which  is on  file  with  the  Company,  and  may  not be
          transferred,  pledged or  disposed  of except in  accordance  with the
          terms and conditions thereof."

                                       53


     13.  Restriction on Transfer of Option and Option Shares.  Anything in this
Agreement to the contrary  notwithstanding  and in addition to the provisions of
Section 10  of this  Agreement,  the Employee  hereby  agrees that she shall not
sell,  transfer by any means or otherwise  dispose of the Option Shares acquired
by her  without  registration  under the 1933 Act, or in the event that they are
not so  registered,  unless  (i) an  exemption  from the  1933 Act  registration
requirements is available  thereunder,  and (ii) the  Employee has furnished the
Company with notice of such proposed  transfer and the Company's  legal counsel,
in its reasonable opinion, shall deem such proposed transfer to be so exempt.

     14. Registration Right. The Company agrees to file a registration statement
("Registration  Statement")  on Form S-8 (or  successor  form) to  register  the
Option Shares for issuance to Employee on or prior to the date the Option or any
portion  thereof first becomes  exercisable.  The Company will bear all expenses
and pay all fees  incurred in  connection  with the filing and  modification  or
amendment of the Registration  Statement,  exclusive of underwriting  discounts,
and  commissions  payable in  respect  of the sale of the  Common  Stock and any
counsel for the  Employee.  Moreover,  if the  Company  fails to comply with the
provisions  of this  Section  14, the  Company  shall,  in addition to any other
equitable or other relief  available to the Employee,  be liable for any and all
incidental, special and consequential damages and damages due to loss of profits
sustained by the Employee.

     15. Miscellaneous.

               15.1. Notices.  Any notices or other  communications  required or
          permitted hereunder shall be in writing and shall be deemed given upon
          delivery if delivered in person or by overnight courier (e.g.  Federal
          Express), or on the third business day following deposit in the United
          States mail, if sent by registered or certified  mail,  return receipt
          requested, addressed to the address of the party to receive notice set
          forth  herein,  or to such this address as a party shall  designate by
          notice in writing given to the this party in accordance with the terms
          hereof,  except that  notices  regarding  changes in address  shall be
          effective only upon receipt.

               15.2.  Stockholder Rights. The Employee shall not have any of the
          rights of a  stockholder  with respect to the Option Shares until such
          shares have been issued after the due exercise of the Option.  Nothing

                                       54


          contained in this  Agreement  shall be deemed to confer upon  Employee
          any right to continued  employment  with the Company or any subsidiary
          thereof,  nor  shall it  interfere  in any way  with the  right of the
          Company  to  terminate  Employee  in  accordance  with the  provisions
          regarding  such   termination  set  forth  in  Employee's   Employment
          Agreement with the Company,  or if there exists no such agreement,  to
          terminate Employee at will.

               15.3.  Waiver.  The waiver by any party hereto of a breach of any
          provision  of this  Agreement  shall not operate or be  construed as a
          waiver of any other or subsequent breach.

               15.4.  Entire  Agreement.   This  Agreement  and  the  Employment
          Agreement  constitutes the entire  agreement  between the parties with
          respect  to the  subject  matter  hereof.  This  Agreement  may not be
          amended except by writing executed by the party to be charged.

                                       55


               15.5. Binding Effect;  Successors.  This Agreement shall inure to
          the  benefit of and be binding  upon the  parties  hereto  and, to the
          extent not prohibited  herein,  their  respective  heirs,  successors,
          assigns and representatives.  Nothing in this Agreement,  expressed or
          implied,  is intended  to confer on any person  other than the parties
          hereto and as provided  above,  their  respective  heirs,  successors,
          assigns and  representatives  any  rights,  remedies,  obligations  or
          liabilities.

               15.6.  Governing  Law.  This  Agreement  shall be governed by and
          construed in  accordance  with the  Internal  laws of the State of New
          York without regard to principles of conflicts of law.

               15.7.Headings.  The  headings  contained  herein are for the sole
          purpose of convenience of reference, and shall not in any way limit or
          affect the meaning or interpretation of any of the terms or provisions
          of this Agreement.

                                       56



     IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
day and year first above written.


INDIVIDUAL INVESTOR GROUP, INC.             Address:

                                            1633 Broadway, 38th Floor
                                            New York, New York  10019



By:/s/Jonathan Steinberg
    Jonathan L. Steinberg
    Chairman and Chief Executive Officer


EMPLOYEE:                                   Address:

                                            522 West End Avenue
                                            Apartment 15A
                                            New York, New York  10024
/s/Brette Popper
Brette Popper

                                       57



EXHIBIT A
                      FORM OF NOTICE OF EXERCISE OF OPTION



                  DATE

Individual Investor Group, Inc.
1633 Broadway, 38th Floor
New York, New York  10019

Attention: Board of Directors

     Re: Purchase of Option Shares

Gentlemen:

     In accordance with my Stock Option Agreement dated as of September 14, 1998
("Agreement")  with  Individual  Investor  Group,  Inc.  ("Company"),  I  hereby
irrevocably  elect to  exercise  the right to purchase  _________  shares of the
Company's  common stock,  par value $.01 per share ("Common  Stock"),  which are
being purchased for investment and not for resale.

     As  payment  for my shares,  enclosed  is (check  and  complete  applicable
box[es]):

+--+ a [personal check] [certified check] [bank check] payable to the order
+--+ "Individual Investor Group, Inc." in the sum of $_________; and/or

+--+ confirmation of wire transfer in the amount of $_____________.
+--+

     I hereby represent, warrant to, and agree with, the Company that:

          (i) I have acquired the Option and shall acquire the Option Shares for
     my own account and not with a view towards the distribution thereof;

          (ii) I have received a copy of all reports and  documents  required to
     be filed by the Company  with the  Commission  pursuant to the Exchange Act
     within  the last 24 months  and all  reports  issued by the  Company to its
     stockholders;

          (iii)  I  understand  that  I  must  bear  the  economic  risk  of the
     investment in the Option Shares, which cannot be sold by me unless they are
     registered  under the  Securities  Act of 1933 ("1933 Act") or an exemption
     therefrom is available thereunder;

          (iv) I have had both the  opportunity  to ask  questions  and  receive
     answers  from the  officers  and  directors  of the Company and all persons
     acting on its behalf  concerning the terms and conditions of the offer made
     hereunder  and to obtain  any  additional  information  to the  extent  the
     Company possesses or may possess such information or can acquire it without
     unreasonable  effort or expense  necessary  to verify the  accuracy  of the
     information obtained pursuant to clause (ii) above;

                                       58


          (v) I am aware that the Company shall place stop transfer  orders with
     its transfer agent against the transfer of the Option Shares in the absence
     of  registration  under the 1933 Act or an exemption  therefrom as provided
     herein;

          (vi) my  rights  with  respect  to the  Option  Shares  shall,  in all
     respects,  be subject to the terms and conditions of this Agreement and the
     Employment Agreement; and

          (vii) the  certificates  evidencing  the  Option  Shares  may bear the
     following legends:

               "The shares  represented by this  certificate  have been acquired
          for investment and have not been  registered  under the Securities Act
          of 1933.  The shares may not be sold or  transferred in the absence of
          such registration or an exemption therefrom under said Act."

               "The shares  represented by this  certificate  have been acquired
          pursuant to a Stock Option Agreement,  dated as of September 14, 1998,
          a  copy  of  which  is on  file  with  the  Company,  and  may  not be
          transferred,  pledged or  disposed  of except in  accordance  with the
          terms and conditions thereof."

     Kindly forward to me my certificate at your earliest convenience.


Very truly yours,



(Signature)                           (Address)


(Print Name)                          (Address)


                                      (Social Security Number)


Mr. Jonathan L. Steinberg
November 4, 1998

                                       59



                                GREGORY E. BARTON
                             461 Burgess Drive # 11
                          Menlo Park, California 94025
                                 (650) 329-9489

                                  July 21, 1998

VIA TELECOPY ONLY (212-843-2791)

Mr. Jonathan L. Steinberg
Chief Executive Officer
Individual Investor Group, Inc.
1633 Broadway, 38th Floor
New York, New York  10019

Dear Jono,

     I am pleased  and excited to have the  opportunity  to work with you taking
Individual  Investor Group,  Inc.  ("INDI") to its next level of success.  As we
discussed,  this letter sets forth the primary  terms of the offer of employment
that has been extended to me by INDI, and I agree to accept employment with INDI
in accordance with these terms:

     Position: I will be appointed Vice President of Business and Legal Affairs,
          and General Counsel, of INDI.

     Salary: My starting  base salary will be $200,000 per annum,  which will be
          paid in accordance with INDI's normal payroll  policies in effect from
          time to time.

     Sign-on  Bonus:  I will be paid a  one-time  sign-on  bonus of $5,000 on my
          first day of work.

     StockOption:  I will  promptly  be  granted  an option  (the  "Option")  to
          purchase 150,000 shares of INDI common stock pursuant to one of INDI's
          Stock Option Plans for which a Form S-8 registration is in effect (the
          "Plan").  The per share exercise price of the Option shall be the fair
          market value of INDI common  stock on the date of grant as  determined
          in accordance  with the Plan.  The Option shall be an incentive  stock
          option to the maximum  extent  permitted  by law.  The Option shall be
          exercisable   as  to  37,500   shares  on  each  of  the  first   four
          anniversaries  of my employment start date (thus a total of four years
          is required before all shares subject to the Option may be exercised),
          and shall  expire 10 years  after  grant.  In the event of a change in
          control of INDI,  all shares  subject to the Option shall  immediately
          become exercisable.

     Severance: In the event that,  within the first year of employment,  either
          (a) I am terminated  without cause or (b) my job  responsibilities  or
          title  are  materially  diminished  and I  resign,  I shall  be paid a
          severance equal to six months'  salary,  in addition to any other sums
          or benefits to which I may be entitled.

                                       60


     Miscellaneous:  I will be covered by INDI's  employee group insurance plan,
          summaries  of which  will be  provided  to me. I will be  entitled  to
          participate  in INDI's  401(k) plan. I will receive four weeks of paid
          vacation  each year. I will commence work on a date to be agreed upon,
          which date shall be on or before September 15, 1998.

     This letter sets forth the entire  agreement of the parties with respect to
the subject matter hereof, and supersedes all other discussions, whether written
or oral.  The terms of this letter may not be  modified  or amended  except in a
writing signed by each of the parties hereto. A signature received via facsimile
shall be deemed an original for all purposes.

     If you agree with the above,  please  sign this letter and fax it to me (at
408-383-4944).  I look forward to receiving your signature, and working with you
closely creating INDI's exciting future!

                                                     Sincerely,


                                                     /s/ Gregory Barton
                                                     Gregory E. Barton

AGREED AND ACCEPTED

Individual Investor Group, Inc.


By:      /s/ Jonathan Steinberg
         Jonathan L. Steinberg
         Chief Executive Officer

Date:    7/21/98

                                       61




                        INCENTIVE STOCK OPTION AGREEMENT


     AGREEMENT  made as of the  14th  day of  September,  1998,  by and  between
INDIVIDUAL  INVESTOR  GROUP,  INC.,  a  Delaware  corporation  ("Company"),  and
Gregory E. Barton ("Employee").

     WHEREAS,  on September 14, 1998 ("Grant  Date"),  pursuant to the terms and
conditions of the Company's 1996 Performance Equity Plan ("Plan"),  the Board of
Directors of the Company  ("Board")  authorized  the grant to the Employee of an
option  ("Option") to purchase an aggregate of 150,000  shares of the authorized
but  unissued  Common  Stock of the Company,  $.01 par value  ("Common  Stock"),
conditioned upon the Employee's acceptance thereof upon the terms and conditions
set forth in this Agreement and subject to the terms of the Plan; and

     WHEREAS,  the  Employee  desires  to  acquire  the  Option on the terms and
conditions set forth in this Agreement;

     IT IS AGREED:
     1. Grant of Stock Option. The Company hereby grants the Employee the Option
to purchase all or any part of an  aggregate  of 150,000  shares of Common Stock
("Option  Shares") on the terms and  conditions  set forth herein and subject to
the provisions of the Plan.

     2. Incentive Stock Option.  The Option represented hereby is intended to be
an Option which  qualifies as an "Incentive  Stock Option" under  Section 422 of
the Internal Revenue Code of 1986, as amended.

     3. Exercise  Price.  The exercise price of the Option is $1.1875 per share,
subject to adjustment as hereinafter provided.

     4.  Exercisability.  This Option is  exercisable,  subject to the terms and
conditions  of the Plan,  as follows:  (i) the  right to purchase  37,500 of the
Option  Shares shall be  exercisable  on September 14, 1999,  (ii) the  right to
purchase an additional  37,500 of the Option Shares shall be  exercisable on and
after  September 14, 2000,  (iii) the right to purchase an additional  37,500 of
the Option Shares shall be exercisable on and after  September 14, 2001 and (iv)
the right to  purchase  the  remaining  37,500 of the  Options  Shares  shall be
exercisable  on and after  September  14,  2002.  After a portion  of the Option
becomes exercisable,  it shall remain exercisable,  except as otherwise provided
herein, until the close of business on September 14, 2008, ("Exercise Period").

                                       62


     5. Effect of Termination of Employment.

          5.1. Termination Due to Death. If Employee's employment by the Company
     terminates by reason of death, the portion of the Option,  if any, that was
     exercisable  as of the date of death may  thereafter  be  exercised  by the
     legal  representative of the estate or by the legatee of the Employee under
     the will of the  Employee,  for a period  of one year from the date of such
     death or until the expiration of the Exercise  Period,  whichever period is
     shorter.  The portion of the Option, if any, that was not exercisable as of
     the date of death shall immediately terminate upon death.

          5.2.  Termination Due to Disability.  If Employee's  employment by the
     Company  terminates by reason of Disability (as such term is defined in the
     Plan),  the portion of the Option,  if any, that was  exercisable as of the
     date of  termination  of  employment  may  thereafter  be  exercised by the
     Employee  for a period  of one year  from  the date of the  termination  of
     employment or until the expiration of the Exercise Period, whichever period
     is shorter.  The portion of the Option, if any, that was not exercisable as
     of the date of the termination of employment  shall  immediately  terminate
     upon the termination of employment.

          5.3. Other Termination.

               5.3.1.  If Employee's  employment is terminated by the Company or
          the Employee for any reason other than (i) death,  (ii)  Disability or
          (iii) or as set forth in Section  5.3.2,  the  Option,  whether or not
          then exercisable shall immediately expire on the date of termination.

               5.3.2.  If  Employee's  employment  is  terminated by the Company
          without cause or for Normal Retirement (as such term is defined in the
          Plan),  the portion of the Option,  if any, that was exercisable as of
          the date of  termination  of employment may thereafter be exercised by
          the  Employee  for a  period  of  three  months  from  the date of the
          termination  of  employment  or until the  expiration  of the Exercise
          Period,  whichever  period is shorter.  The portion of the Option,  if
          any, that was not  exercisable  as of the date of the  termination  of
          employment  shall  immediately   terminate  upon  the  termination  of
          employment.

               5.3.3.  If Employee  terminates his employment  with the Company,
          this Option, whether or not exercisable, shall immediately expire.

                                       63


     6.  Withholding  Tax.  Not later than the date as of which an amount  first
becomes  includible  in the gross income of the Employee for Federal  income tax
purposes with respect to the Option,  the Employee shall pay to the Company,  or
make  arrangements  satisfactory  to the Company  regarding  the payment of, any
Federal,  state and local  taxes of any kind  required  by law to be withheld or
paid with respect to such amount.  The obligations of the Company under the Plan
and  pursuant  to this  Agreement  shall be  conditional  upon such  payment  or
arrangements  with the Company and the Company shall, to the extent permitted by
law,  have the right to  deduct  any such  taxes  from any  payment  of any kind
otherwise due to the Employee from the Company.

     7. Adjustments. In the event of any merger, reorganization,  consolidation,
recapitalization,  consolidation,  recapitalization,  dividend  (other than cash
dividend),  stock  split,  reverse  stock  split,  or other  change in corporate
structure  affecting the number of issued  shares of Common  Stock,  the Company
shall  proportionally  adjust  the  number  and kind of  Option  Shares  and the
exercise  price of the Option in order to prevent the dilution or enlargement of
the  Employee's  proportionate  interest in the Company  and  Employee's  rights
hereunder,  provided  that the number of Option  Shares  shall always be a whole
number.

     8.  Acceleration  of  Vesting  on Change of  Control.  Notwithstanding  the
provisions  of  Section  4, in the event of a "change of  control"  (as  defined
below) while the Employee is employed by the Company, the vesting of this Option
shall  accelerate  and all the Option  Shares shall be  purchasable  by Employee
simultaneous with such change of control. For the purposes of this Agreement,  a
change of control shall mean (i) the  acquisition by any "person" (as defined in
Section  3(a)(9) and 13(d) of the  Securities  Exchange Act of 1934,  as amended
("Exchange Act")),  other than a stockholder of the Company that, as of the date
of this Agreement, is the beneficial owner (as defined in Rule 13d-3 promulgated
under the Exchange Act) of 10% or more of the outstanding  voting  securities of
the  Company,  of  more  than  50% of the  combined  voting  power  of the  then
outstanding  voting securities of the Company or (ii) the sale by the Company of
all,  or  substantially  all,  of the  assets  of  the  Company  to one or  more
purchasers, in one or a series of related transactions, where the transaction or
transactions  require  approval  pursuant to Delaware law by the stockholders of
the Company.

                                       64



     9. Method of Exercise.

               9.1.  Notice to the  Company.  The Option  shall be  exercised in
          whole or in part by written notice in substantially  the form attached
          hereto as Exhibit A directed to the Company at its principal place of

          business  accompanied by full payment as  hereinafter  provided of the
          exercise  price  for the  number  of Option  Shares  specified  in the
          notice.

               9.2.  Delivery  of Option  Shares.  The Company  shall  deliver a
          certificate  for  the  Option  Shares  to  the  Employee  as  soon  as
          practicable after payment therefor.

               9.3.  Payment of Purchase Price. The Employee shall make payments
          by wire transfer, certified or bank check, in each case payable to the
          order  of  the   Company.   Alternatively,   the   Employee  may  make
          arrangements  satisfactory  to the Company with a bank or a broker who
          is a member of the National Association of Securities Dealers, Inc. to
          sell on the  exercise  date a sufficient  number of the Option  Shares
          being purchased so that the net proceeds of the sale  transaction will
          at least equal the Exercise  Price  multiplied by the number of Option
          Shares being purchased  pursuant to such exercise,  plus the amount of
          any  applicable  withholding  taxes and  pursuant to which the bank or
          broker undertakes to deliver the full Exercise Price multiplied by the
          number of Option  Shares being  purchased  pursuant to such  exercise,
          plus the amount of any applicable  withholding taxes to the Company on
          a date  satisfactory  to the  Company,  but no later  than the date on
          which the sale  transaction  would  settle in the  ordinary  course of
          business.

     10.  Nonassignability.  The Option shall not be assignable or  transferable
except by will or by the laws of descent  and  distribution  in the event of the
death of the  Employee.  No transfer of the Option by the Employee by will or by
the laws of descent  and  distribution  shall be  effective  to bind the Company
unless the Company shall have been  furnished  with written notice thereof and a
copy of the will and such other  evidence as the Company may deem  necessary  to
establish the validity of the transfer and the  acceptance by the  transferee or
transferees of the terms and conditions of the Option.

     11. Company Representations.  The Company hereby represents and warrants to
the Employee that:

          (a) the  Company,  by  appropriate  and all required  action,  is duly
     authorized  to  enter  into  this  Agreement  and  consummate  all  of  the
     transactions contemplated hereunder; and

          (b) the Option Shares, when issued and delivered by the Company to the
     Employee in accordance with the terms and conditions  hereof,  will be duly
     and validly issued and fully paid and non-assessable.

                                       65



     12. Employee  Representations.  The Employee hereby represents and warrants
to the Company that:

          (a) he is acquiring the Option and shall acquire the Option Shares for
     his or her  own  account  and  not  with a view  towards  the  distribution
     thereof;

          (b) he has received a copy of all reports and documents required to be
     filed by the  Company  with the  Commission  pursuant to the  Exchange  Act
     within  the last 24 months  and all  reports  issued by the  Company to its
     stockholders  and a copy  of the  Plan  in  effect  as of the  date of this
     Agreement;

          (c) he  understands  that  he  must  bear  the  economic  risk  of the
     investment  in the Option  Shares,  which cannot be sold by his unless they
     are  registered  under  the  Securities  Act of  1933  ("1933  Act")  or an
     exemption therefrom is available thereunder;

          (d) he has had both  the  opportunity  to ask  questions  and  receive
     answers  from the  officers  and  directors  of the Company and all persons
     acting on its behalf  concerning the terms and conditions of the offer made
     hereunder  and to obtain  any  additional  information  to the  extent  the
     Company possesses or may possess such information or can acquire it without
     unreasonable  effort or expense  necessary  to verify the  accuracy  of the
     information obtained pursuant to clause (b) above;

          (e) he is aware that the Company shall place stop transfer orders with
     its transfer agent against the transfer of the Option Shares in the absence
     of  registration  under the 1933 Act or an exemption  therefrom as provided
     herein; and

          (i)  In  the  absence  of   registration   under  the  1993  Act,  the
     certificates evidencing the Option Shares shall bear the following legends:

               "The shares  represented by this  certificate  have been acquired
               for investment and have not been registered  under the Securities
               Act of 1933.  The  shares may not be sold or  transferred  in the
               absence of such registration or an exemption therefrom under said
               Act."

               "The shares  represented by this  certificate  have been acquired
               pursuant to a Stock Option  Agreement,  dated as of September 14,
               1998, a copy of which is on file with the Company, and may not be
               transferred, pledged or disposed of except in accordance with the
               terms and conditions thereof."

                                       66


     13.  Restriction  on Transfer of Stock Option  Agreement and Option Shares.
Anything in this  Agreement to the contrary  notwithstanding  and in addition to
the provisions of Section 12 of this Agreement,  the Employee hereby agrees that
he shall not sell,  transfer  by any means or  otherwise  dispose  of the Option
Shares acquired by him without  registration under the 1933 Act, or in the event
that  they are not so  registered,  unless  (i) an  exemption  from the 1933 Act
registration  requirements is available  thereunder,  and (ii) the  Employee has
furnished  the Company with notice of such  proposed  transfer and the Company's
legal counsel, in its reasonable  opinion,  shall deem such proposed transfer to
be so exempt.

     14.  Miscellaneous.  

          14.1. Notices. All notices,  requests,  deliveries,  payments, demands
     and other  communications which are required or permitted to be given under
     this Agreement shall be in writing and shall be either delivered personally
     or sent by registered  or certified  mail,  or by private  courier,  return
     receipt  requested,  postage  prepaid to the  parties  at their  respective
     addresses set forth  herein,  or to such other address as either shall have
     specified  by notice in writing to the other.  Notice  shall be deemed duly
     given hereunder when delivered or mailed as provided herein.

          14.2.  Plan  Paramount;  Conflicts  with Plan.  This Agreement and the
     Option shall,  in all respects,  be subject to the terms and  conditions of
     the Plan,  whether or not stated herein. In the event of a conflict between
     the  provisions  of the  Plan and the  provisions  of this  Agreement,  the
     provisions of the Plan shall in all respects be controlling.

          14.3.  Stockholder  Rights.  The  Employee  shall  not have any of the
     rights of a stockholder with respect to the Option Shares until such shares
     have been issued after the due exercise of the Option. Nothing contained in
     this  Agreement  shall be  deemed  to  confer  upon  Employee  any right to
     continued  employment with the Company or any subsidiary thereof, nor shall
     it interfere in any way with the right of the Company to terminate Employee
     in accordance with the provisions  regarding such  termination set forth in
     Employee's  written agreement with the Company,  or if there exists no such
     agreement, to terminate Employee at will.

          14.4.  Waiver.  The  waiver  by any  party  hereto  of a breach of any
     provision of this Agreement  shall not operate or be construed as a waiver
     of any other or subsequent breach.

                                       67


          14.5.  Entire  Agreement.   This  Agreement   constitutes  the  entire
     agreement  between the parties with respect to the subject  matter  hereof.
     This Agreement may not be amended  except by writing  executed by the party
     to be charged.

          14.6.  Binding Effect;  Successors.  This Agreement shall inure to the
     benefit of and be binding  upon the  parties  hereto and, to the extent not
     prohibited  herein,  their  respective  heirs,   successors,   assigns  and
     representatives.  Nothing  in this  Agreement,  expressed  or  implied,  is
     intended  to confer on any  person  other  than the  parties  hereto and as
     provided  above,   their   respective   heirs,   successors,   assigns  and
     representatives any rights, remedies, obligations or liabilities.

          14.7. Governing Law. This Agreement shall be governed by and construed
     in  accordance  with the laws of the State of New York  (without  regard to
     choice of law provisions).

          14.8. Headings. The headings contained herein are for the sole purpose
     of convenience  of reference,  and shall not in any way limit or affect the
     meaning  or  interpretation  of any of the  terms  or  provisions  of  this
     Agreement.

     IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
day and year first above written.


INDIVIDUAL INVESTOR GROUP, INC.             Address:
                                            1633 Broadway, 38th Floor
                                            New York, New York  10019

By: /s/ Jonathan Steinberg


EMPLOYEE:                                   Address:
                                            22 East 36th Street, Apartment 3D
                                            New York, New York 10016
/s/ Gregory Barton
Gregory E. Barton

                                       68




                                                                 EXHIBIT A

                      FORM OF NOTICE OF EXERCISE OF OPTION



                  DATE

Individual Investor Group, Inc.
1633 Broadway, 38th Floor
New York, New York  10019

Attention:  Stock Option Committee of
            the Board of Directors

            Re:      Purchase of Option Shares

Gentlemen:

     In accordance with my Stock Option Agreement dated as of September 14, 1998
("Agreement")  with  Individual  Investor  Group,  Inc.  ("Company"),  I  hereby
irrevocably  elect to  exercise  the right to purchase  _________  shares of the
Company's  common stock,  par value $.01 per share ("Common  Stock"),  which are
being purchased for investment and not for resale.

     As  payment  for my shares,  enclosed  is (check  and  complete  applicable
box[es]):

     a [personal  check]  [certified  check]  [bank check  payable to the order 
     of "Individual Investor Group, Inc." in the sum of $_________ and/or;

     confirmation of wire transfer in the amount of $_____________.

     I hereby represent, warrant to, and agree with, the Company that:

          (i) I have acquired the Option and shall acquire the Option Shares for
     my own account and not with a view towards the distribution thereof;

          (ii) I have received a copy of all reports and  documents  required to
     be filed by the Company  with the  Commission  pursuant to the Exchange Act
     within  the last 24 months  and all  reports  issued by the  Company to its
     stockholders;

          (iii)  I  understand  that  I  must  bear  the  economic  risk  of the
     investment in the Option Shares, which cannot be sold by me unless they are
     registered  under the  Securities  Act of 1933 ("1933 Act") or an exemption
     therefrom  is  available  thereunder  and  that  the  Company  is  under no
     obligation to register the Option Shares for sale under the 1933 Act;

          (iv) I have had both the  opportunity  to ask  questions  and  receive
     answers  from the  officers  and  directors  of the Company and all persons
     acting on its behalf  concerning the terms and conditions of the offer made
     hereunder  and to obtain  any  additional  information  to the  extent  the
     Company possesses or may possess such information or can acquire it without
     unreasonable  effort or expense  necessary  to verify the  accuracy  of the
     information obtained pursuant to clause (ii) above;

                                       69




          (v) I am aware that the Company shall place stop transfer  orders with
     its transfer agent against the transfer of the Option Shares in the absence
     of  registration  under the 1933 Act or an exemption  therefrom as provided
     herein;

          (vi) my  rights  with  respect  to the  Option  Shares  shall,  in all
     respects,  be subject to the terms and  conditions of this  Company's  1996
     Stock Option Plan and this Agreement; and

          (vii) the  certificates  evidencing  the Option  Shares shall bear the
     following legends:

               "The shares  represented by this  certificate  have been acquired
               for investment and have not been registered  under the Securities
               Act of 1933.  The  shares may not be sold or  transferred  in the
               absence of such registration or an exemption therefrom under said
               Act."

               "The shares  represented by this  certificate  have been acquired
               pursuant to a Stock Option  Agreement,  dated as of September 14,
               1998, a copy of which is on file with the Company, and may not be
               transferred, pledged or disposed of except in accordance with the
               terms and conditions thereof."

     Kindly forward to me my certificate at your earliest convenience.

Very truly yours,



(Signature)                                     (Address)


(Print Name)                                    (Address)


                                                (Social Security Number)

                                       70


                           INDEMNIFICATION AGREEMENT


     This Agreement,  made and entered into as of the14th day of September, 1998
("Agreement"),  by and  between  Individual  Investor  Group,  Inc.,  a Delaware
corporation ("Corporation"), and Brette Popper ("Indemnitee"):

     WHEREAS,  highly  competent  persons recently have become more reluctant to
serve publicly-held corporations as directors, officers, or in other capacities,
unless  they are  provided  with better  protection  from the risk of claims and
actions against them arising out of their service to and activities on behalf of
such corporation; and

     WHEREAS,  the current  impracticability of obtaining adequate insurance and
the uncertainties  related to  indemnification  have increased the difficulty of
attracting and retaining such persons; and

     WHEREAS, the Board of Directors of the Corporation ("Board") has determined
that the inability to attract and retain such persons is detrimental to the best
interests of the  Corporation's  stockholders  and that such  persons  should be
assured that they will have better protection in the future; and

     WHEREAS,  it is  reasonable,  prudent and necessary for the  Corporation to
obligate  itself  contractually  to indemnify such persons to the fullest extent
permitted by applicable law so that such persons will serve or continue to serve
the  Corporation  free from  undue  concern  that  they  will not be  adequately
indemnified; and

     WHEREAS,  this  Agreement is a supplement to and in  furtherance of Article
VIII of the  By-laws of the  Corporation,  and  Article  VIII of the Amended and
Restated  Certificate of  Incorporation  of the  Corporation and any resolutions
adopted pursuant thereto and shall neither be deemed to be a substitute therefor
nor to diminish or abrogate any rights of Indemnitee thereunder; and

     WHEREAS,  Indemnitee is willing to serve and to take on additional  service
for or on behalf of the  Corporation  on the  condition  that he be  indemnified
according to the terms of this Agreement;

     NOW,  THEREFORE,  in  consideration  of  the  premises  and  the  covenants
contained herein, the Corporation and Indemnitee do hereby covenant and agree as
follows:

     1 Definitions.

     For purposes of this Agreement:

          1.1 "Change in Control"  means a change in control of the  Corporation
     occurring  after the date  hereof of a nature  that would be required to be
     reported in response to Item 6(e) of Schedule 14A of Regulation  14A (or in
     response to any similar item on any similar  schedule or form)  promulgated
     under the Securities  Exchange Act of 1934, as amended ("Act"),  whether or

                                       71


     not the Corporation is then subject to such reporting requirement provided,
     however, that, without limitation, such a Change in Control shall be deemed
     to have occurred if after the date hereof (i) any "person" (as such term is
     used in  Sections  13(d)  and 14(d) of the Act) is or  becomes  "beneficial
     owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of
     securities  of the  Corporation  representing  20% or more of the  combined
     voting power of the then outstanding  securities of the Corporation without
     the prior  approval of at least  two-thirds  of the members of the Board in
     office immediately prior to such person attaining such percentage interest;
     (ii) the Corporation is a party to a merger, consolidation,  sale of assets
     or other  reorganization,  or a proxy  contest,  as a consequence  of which
     members of the Board in office  immediately  prior to such  transaction  or
     event  constitute  less than a majority of the Board  thereafter;  or (iii)
     during  any  period  of  two  consecutive  years,  individuals  who  at the
     beginning of such period  constituted the Board (including for this purpose
     any  new  director  whose  election  or  nomination  for  election  by  the
     Corporation's stockholders was approved by a vote of at least two-thirds of
     the directors  then still in office who were  directors at the beginning of
     such period)  cease for any reason to constitute at least a majority of the
     Board.

          1.2  "Corporate  Status"  means the status of a person who is or was a
     director,  officer,  employee,  agent or fiduciary of the Corporation or of
     any other corporation,  partnership, joint venture, trust, employee benefit
     plan or other enterprise which such person is or was serving at the request
     of the Corporation.

          1.3  "Disinterested  Director" means a director of the Corporation who
     is not  and  was  not a  party  to  the  Proceeding  in  respect  of  which
     indemnification is sought by Indemnitee.

          1.4 "Expenses" means all reasonable attorneys' fees, retainers,  court
     costs,  transcript costs,  fees of experts,  witness fees, travel expenses,
     duplicating costs, printing and binding costs, telephone charges,  postage,
     delivery service fees, and all other disbursements or expenses of the types
     customarily incurred in connection with prosecuting,  defending,  preparing
     to  prosecute  or  defend,  investigating,  or being or  preparing  to be a
     witness in a Proceeding.

          1.5 "Independent Counsel" means a law firm, or a member of a law firm,
     that is experienced in matters of corporation law and neither presently is,
     nor in the past  five  years  has  been,  retained  to  represent:  (i) the
     Corporation  or  Indemnitee  in any other  matter  material  to either such
     party, or (ii) any other party to the Proceeding giving rise to a claim for
     indemnification   hereunder.   Notwithstanding  the  foregoing,   the  term
     "Independent   Counsel"  shall  not  include  any  person  who,  under  the
     applicable standards of professional conduct then prevailing,  would have a
     conflict of interest in  representing  either the Corporation or Indemnitee
     in an action to determine Indemnitee's rights under this Agreement.

          1.6  "Proceeding"  means  any  action,  suit,  arbitration,  alternate
     dispute resolution mechanism, investigation,  administrative hearing or any
     other proceeding, whether civil, criminal, administrative or investigative,
     except  one  initiated  by an  Indemnitee  pursuant  to  Section 11 of this
     Agreement to enforce his rights under this Agreement.

     2 Services by Indemnitee.

     Indemnitee  agrees to serve as President and Chief Operating Officer of the
Corporation.  Indemnitee  may at any time and for any  reason  resign  from such
position (subject to any other contractual  obligation or any obligation imposed
by operation of law).

                                       72


     3 Indemnification - General.

     The Corporation  shall indemnify,  and advance  Expenses to,  Indemnitee as
provided in this Agreement to the fullest extent  permitted by applicable law in
effect on the date  hereof  and to such  greater  extent as  applicable  law may
thereafter from time to time permit. The rights of Indemnitee provided under the
preceding  sentence shall  include,  but shall not be limited to, the rights set
forth in the other Sections of this Agreement.

     4 Proceedings Other Than Proceedings by or in the Right of the Corporation.

     Indemnitee shall be entitled to the rights of  indemnification  provided in
this Section if, by reason of his Corporate  Status,  he is, or is threatened to
be made, a party to any threatened,  pending or completed Proceeding, other than
a Proceeding  by or in the right of the  Corporation.  Pursuant to this Section,
Indemnitee shall be indemnified against Expenses,  judgments,  penalties,  fines
and amounts paid in settlement actually and reasonably incurred by him or on his
behalf in  connection  with any such  Proceeding  or any claim,  issue or matter
therein,  if he acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the Corporation, and, with respect to
any  criminal  Proceeding,  had no  reasonable  cause to believe his conduct was
unlawful.

     5 Proceedings by or in the Right of the Corporation.

     Indemnitee shall be entitled to the rights of  indemnification  provided in
this Section if, by reason of his Corporate  Status,  he is, or is threatened to
be made, a party to any threatened,  pending or completed  Proceeding brought by
or in the right of the Corporation to procure a judgment in its favor.  Pursuant
to this Section,  Indemnitee shall be indemnified  against Expenses actually and
reasonably  incurred  by  him or on his  behalf  in  connection  with  any  such
Proceeding if he acted in good faith and in a manner he  reasonably  believed to
be in or not opposed to the best interests of the  Corporation.  Notwithstanding
the foregoing, no indemnification against such Expenses shall be made in respect
of any  claim,  issue or matter in any such  proceeding  as to which  Indemnitee
shall have been  adjudged  to be liable to the  Corporation  if  applicable  law
prohibits  such  indemnification  unless the Court of  Chancery  of the State of
Delaware,  or the court in which such  Proceeding  shall have been brought or is
pending, shall determine that indemnification  against Expenses may nevertheless
be made by the Corporation.

     6 Indemnification for Expenses of Party Who is Wholly or Partly Successful.

     Notwithstanding  any other provision of this Agreement,  to the extent that
Indemnitee is, by reason of his Corporate  Status, a party to and is successful,
on the merits or otherwise,  in any Proceeding,  he shall be indemnified against
all  Expenses  actually  and  reasonably  incurred  by him or on his  behalf  in
connection therewith.  If Indemnitee is not wholly successful in such Proceeding
but is successful,  on the merits or otherwise,  as to one or more but less than
all  claims,  issues  or  matters  in such  Proceeding,  the  Corporation  shall
indemnify  Indemnitee  against all Expenses actually and reasonably  incurred by
him or on his behalf in connection with each successfully  resolved claim, issue
or matter.  For the purposes of this Section and without limiting the foregoing,

                                       73


the  termination  of any  claim,  issue  or  matter  in any such  Proceeding  by
dismissal, with or without prejudice,  shall be deemed to be a successful result
as to such claim, issue or matter.

     7 Indemnification for Expenses as a Witness.

     Notwithstanding  any other provision of this Agreement,  to the extent that
Indemnitee is, by reason of his Corporate  Status,  a witness in any Proceeding,
he shall be indemnified against all Expenses actually and reasonably incurred by
him or on his behalf in connection therewith.

     8 Advancement of Expenses.

     The  Corporation  shall  advance all  Expenses  incurred by or on behalf of
Indemnitee  in  connection  with any  Proceeding  within  twenty  days after the
receipt  by  the  Corporation  of a  statement  or  statements  from  Indemnitee
requesting such advance or advances from time to time, whether prior to or after
final  disposition  of such  Proceeding.  Such  statement  or  statements  shall
reasonably  evidence the Expenses incurred by Indemnitee and shall include or be
preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay
any Expenses  advanced if it shall  ultimately be determined  that Indemnitee is
not entitled to be indemnified against such Expenses.

     9 Procedure for Determination of Entitlement to Indemnification.

          9.1 To obtain  indemnification under this Agreement in connection with
     any Proceeding,  and for the duration  thereof,  Indemnitee shall submit to
     the  Corporation a written  request,  including  therein or therewith  such
     documentation and information as is reasonably  available to Indemnitee and
     is reasonably  necessary to determine whether and to what extent Indemnitee
     is entitled to  indemnification.  The Secretary of the  Corporation  shall,
     promptly upon receipt of any such request for  indemnification,  advise the
     Board in writing that Indemnitee has requested indemnification.

          9.2 Upon written request by Indemnitee for indemnification pursuant to
     Section 9.1 hereof,  a  determination,  if required by applicable law, with
     respect to Indemnitee's entitlement thereto shall be made in such case: (i)
     if a Change in Control shall have occurred,  by Independent Counsel (unless
     Indemnitee  shall request that such  determination  be made by the Board or
     the stockholders,  in which case in the manner provided for in clauses (ii)
     or (iii) of this Section 9.2) in a written  opinion to the Board, a copy of
     which shall be delivered to Indemnitee);  (ii) if a Change of Control shall
     not  have  occurred,  (A) by the  Board  by a  majority  vote  of a  quorum
     consisting  of  Disinterested  Directors,  or (B) if a quorum  of the Board
     consisting of  Disinterested  Directors is not obtainable,  or even if such
     quorum is obtainable, if such quorum of Disinterested Directors so directs,
     either (x) by Independent Counsel in a written opinion to the Board, a copy
     of which shall be delivered to Indemnitee,  or (y) by the  stockholders  of
     the Corporation,  as determined by such quorum of Disinterested  Directors,
     or a quorum  of the  Board,  as the case may be;  or (iii) as  provided  in
     Section 10.2 of this  Agreement.  If it is so determined that Indemnitee is
     entitled to indemnification, payment to Indemnitee shall be made within ten
     (10) days after such  determination.  Indemnitee  shall  cooperate with the
     person,  persons  or entity  making  such  determination  with  respect  to
     Indemnitee's  entitlement to  indemnification,  including providing to such
     person, persons or entity upon reasonable advance request any documentation
     or  information  which  is  not  privileged  or  otherwise  protected  from

                                       74


     disclosure  and which is reasonably  available to Indemnitee and reasonably
     necessary  to  such   determination.   Any  costs  or  expenses  (including
     attorneys' fees and disbursements) incurred by Indemnitee in so cooperating
     with the person, persons or entity making such determination shall be borne
     by the Corporation  (irrespective  of the  determination as to Indemnitee's
     entitlement to indemnification)  and the Corporation hereby indemnifies and
     agrees to hold Indemnitee harmless therefrom.

          9.3 If required, Independent Counsel shall be selected as follows: (i)
     if a Change of Control shall not have occurred,  Independent  Counsel shall
     be selected by the Board, and the Corporation  shall give written notice to
     Indemnitee  advising him of the identity of Independent Counsel so selected
     or (ii) if a Change of Control  shall have  occurred,  Independent  Counsel
     shall be selected by Indemnitee  (unless Indemnitee shall request that such
     selection  be made by the  Board,  in which  event  (i) shall  apply),  and
     Indemnitee shall give written notice to the Corporation  advising it of the
     identity of Independent Counsel so selected. In either event, Indemnitee or
     the  Corporation,  as the case may be,  may,  within  seven days after such
     written  notice  of  selection  shall  have  been  given,  deliver  to  the
     Corporation  or to Indemnitee,  as the case may be, a written  objection to
     such  selection.  Such  objection  may be asserted  only on the ground that
     Independent   Counsel  so  selected  does  not  meet  the  requirements  of
     "Independent  Counsel" as defined in Section 1 of this  Agreement,  and the
     objection  shall set forth with  particularity  the  factual  basis of such
     assertion.  If such  written  objection  is made,  Independent  Counsel  so
     selected may not serve as Independent  Counsel unless and until a court has
     determined  that such objection is without merit.  If, within 20 days after
     submission by Indemnitee of a written request for indemnification  pursuant
     to Section 9.1 hereof, no Independent  Counsel shall have been selected and
     not objected to,  either the  Corporation  or  Indemnitee  may petition the
     Court of Chancery  of the State of  Delaware,  or other court of  competent
     jurisdiction, for resolution of any objection which shall have been made by
     the  Corporation  or  Indemnitee  to the other's  selection of  Independent
     Counsel  and/or  for the  appointment  as  Independent  Counsel of a person
     selected  by such  court  or by such  other  person  as  such  court  shall
     designate,  and the person with respect to whom an objection is so resolved
     or the person so appointed  shall act as Independent  Counsel under Section
     9.2  hereof.  The  Corporation  shall pay any and all  reasonable  fees and
     expenses of Independent  Counsel  incurred by such  Independent  Counsel in
     connection with its actions pursuant to this Agreement, and the Corporation
     shall pay all  reasonable  fees and expenses  incident to the procedures of
     this  Section  9.3,  regardless  of the  manner in which  such  Independent
     Counsel was selected or appointed.  Upon the due  commencement  date of any
     judicial  proceeding or arbitration  pursuant to Section  11.1(iii) of this
     Agreement,  Independent  Counsel  shall be  discharged  and relieved of any
     further   responsibility  in  such  capacity  (subject  to  the  applicable
     standards of professional conduct then prevailing).

     10 Presumptions and Effects of Certain Proceedings.

          10.1  If a  Change  of  Control  shall  have  occurred,  in  making  a
     determination with respect to entitlement to indemnification hereunder, the
     person or persons or entity  making such  determination  shall presume that
     Indemnitee  is  entitled  to   indemnification   under  this  Agreement  if
     Indemnitee has submitted a request for  indemnification  in accordance with

                                       75


     Section 9.1 of this Agreement, and the Corporation shall have the burden of
     proof to overcome that  presumption  in  connection  with the making by any
     person,   persons  or  entity  of  any   determination   contrary  to  that
     presumption.

          10.2 If the person,  persons or entity  empowered  or  selected  under
     Section 9 of this Agreement to determine whether  Indemnitee is entitled to
     indemnification  shall not have made a  determination  within 60 days after
     receipt  by  the  Corporation  of  the  request  therefor,   the  requisite
     determination  of  entitlement to  indemnification  shall be deemed to have
     been made and Indemnitee shall be entitled to such indemnification,  absent
     (i) a  misstatement  by Indemnitee of a material  fact, or an omission of a
     material  fact  necessary to make  Indemnitee's  statement  not  materially
     misleading,  in connection  with the request for  indemnification,  or (ii)
     prohibition of such indemnification under applicable law provided, however,
     that such  60-day  period may be extended  for a  reasonable  time,  not to
     exceed an additional  30 days, if the person,  persons or entity making the
     determination  with respect to entitlement to indemnification in good faith
     require(s)  such  additional  time  for  the  obtaining  or  evaluating  of
     documentation  and/or information  relating thereto and provided,  further,
     that the  foregoing  provisions of this Section 10.2 shall not apply (i) if
     the  determination of entitlement to  indemnification  is to be made by the
     stockholders pursuant to Section 9.2 of this Agreement and if (A) within 15
     days after receipt by the Corporation of the request for such determination
     the Board has resolved to submit such determination to the stockholders for
     their  consideration at an annual meeting thereof to be held within 75 days
     after such receipt and such determination is made thereat, or (B) a special
     meeting of stockholders is called within 15 days after such receipt for the
     purpose of making such determination, such meeting is held for such purpose
     within 60 days after having been so called and such  determination  is made
     thereat,  or (ii) if the determination of entitlement to indemnification is
     to be  made  by  Independent  Counsel  pursuant  to  Section  9.2  of  this
     Agreement.

          10.3 The  termination  of any  Proceeding  or of any  claim,  issue or
     matter therein,  by judgment,  order,  settlement or conviction,  or upon a
     plea of nolo contendere or its  equivalent,  shall not (except as otherwise
     expressly  provided in this Agreement) of itself adversely affect the right
     of Indemnitee to  indemnification  or create a presumption  that Indemnitee
     did not act in good faith and in a manner which he  reasonably  believed to
     be in or not  opposed to the best  interests  of the  Corporation  or, with
     respect to any criminal Proceeding, that Indemnitee had reasonable cause to
     believe that his conduct was unlawful.

     11 Remedies of Indemnitee.

          11.1 In the event that (i) a determination is made pursuant to Section
     9 of this  Agreement  that  Indemnitee  is not entitled to  indemnification
     under this  Agreement,  (ii)  advancement  of  Expenses  is not timely made
     pursuant  to  Section 8  of this  Agreement,  (iii)  the  determination  of
     indemnification  is to be made by Independent  Counsel  pursuant to Section
     9.2 of this Agreement and such  determination  shall not have been made and
     delivered  in a  written  opinion  within  90  days  after  receipt  by the
     Corporation   of  the  request  for   indemnification,   (iv)   payment  of
     indemnification  is not made pursuant to Section 7 of this Agreement within
     ten days after receipt by the Corporation of a written request therefor, or
     (v)  payment  of  indemnification  is not  made  within  ten  days  after a
     determination has been made that Indemnitee is entitled to  indemnification

                                       76


     or such  determination is deemed to have been made pursuant to Section 9 or
     10 of this Agreement, Indemnitee shall be entitled to an adjudication in an
     appropriate  court  of the  State of  Delaware,  or in any  other  court of
     competent  jurisdiction,  of his  entitlement  to such  indemnification  or
     advancement of Expenses.  Alternatively, the Indemnitee, at his option, may
     seek an  award  in  arbitration  to be  conducted  by a  single  arbitrator
     pursuant to the rules of the American Arbitration  Association.  Indemnitee
     shall  commence  such  proceeding  seeking an  adjudication  or an award in
     arbitration  within 180 days following the date on which  Indemnitee  first
     has the right to commence  such  proceeding  pursuant to this Section 11.1.
     The  Corporation  shall  not  oppose  Indemnitee's  right  to seek any such
     adjudication or award in arbitration.

          11.2 In the event that a  determination  shall have been made pursuant
     to  Section  9 of  this  Agreement  that  Indemnitee  is  not  entitled  to
     indemnification,  any judicial proceeding or arbitration commenced pursuant
     to this  Section  shall be  conducted in all respects as a de novo trial or
     arbitration on the merits and Indemnitee  shall not be prejudiced by reason
     of that adverse determination.

          11.3 If a  determination  shall  have been made or deemed to have been
     made  pursuant  to Section 9 or 10 of this  Agreement  that  Indemnitee  is
     entitled  to  indemnification,  the  Corporation  shall  be  bound  by such
     determination in any judicial proceeding or arbitration  commenced pursuant
     to this  Section,  absent (i) a  misstatement  by  Indemnitee of a material
     fact,  or an omission of a material  fact  necessary  to make  Indemnitee's
     statement not  materially  misleading,  in connection  with the request for
     indemnification,   or  (ii)  prohibition  of  such  indemnification   under
     applicable law.

          11.4 The Corporation shall be precluded from asserting in any judicial
     proceeding  or  arbitration  commenced  pursuant to this  Section  that the
     procedures and  presumptions  of this Agreement are not valid,  binding and
     enforceable  and  shall  stipulate  in any such  court or  before  any such
     arbitrator  that the  Corporation  is bound by all the  provisions  of this
     Agreement.

          11.5 In the event that Indemnitee,  pursuant to this Section,  seeks a
     judicial adjudication of, or an award in arbitration to enforce, his rights
     under,  or to recover  damages  for breach of, this  Agreement,  Indemnitee
     shall be entitled to recover from the Corporation, and shall be indemnified
     by the Corporation against, any and all expenses (of the kinds described in
     the definition of Expenses) actually and reasonably incurred by him in such
     judicial  adjudication or arbitration,  but only if he prevails therein. If
     it shall be determined in such judicial  adjudication  or arbitration  that
     Indemnitee   is  entitled  to  receive  some  but  less  than  all  of  the
     indemnification or advancement of expenses sought, the expenses incurred by
     Indemnitee in connection  with such judicial  adjudication  or  arbitration
     shall be appropriately prorated.

     12 Non-Exclusivity; Survival of Rights; Insurance; Subrogation.

          12.1 The  rights of  indemnification  and to  receive  advancement  of
     Expenses as provided by this Agreement shall not be deemed exclusive of any
     other  rights  to  which  Indemnitee  may at any  time  be  entitled  under
     applicable  law,  the  certificate  of  incorporation  or  by-laws  of  the
     Corporation,  any  agreement,  a vote of  stockholders  or a resolution  of
     directors,  or  otherwise.  No  amendment,  alteration  or  repeal  of this
     Agreement or any provision  hereof shall be effective as to any  Indemnitee
     with  respect to any action  taken or  omitted  by such  Indemnitee  in his
     Corporate Status prior to such amendment, alteration or repeal.

                                       77



          12.2 To the extent that the Corporation  maintains an insurance policy
     or  policies  providing  liability   insurance  for  directors,   officers,
     employees,  agents  or  fiduciaries  of the  Corporation  or of  any  other
     corporation,  partnership,  joint venture,  trust, employee benefit plan or
     other   enterprise   which  such  person  serves  at  the  request  of  the
     Corporation,  Indemnitee  shall be covered by such  policy or  policies  in
     accordance  with its or their terms to the maximum  extent of the  coverage
     available  for any such  director,  officer,  employee,  agent or fiduciary
     under such policy or policies.

          12.3 In the event of any payment under this Agreement, the Corporation
     shall be  subrogated  to the extent of such payment to all of the rights of
     recovery of Indemnitee,  who shall execute all papers required and take all
     action  necessary  to  secure  such  rights,  including  execution  of such
     documents  as are  necessary  to enable  the  Corporation  to bring suit to
     enforce such rights.

          12.4 The Corporation  shall not be liable under this Agreement to make
     any  payment of amounts  otherwise  indemnifiable  hereunder  if and to the
     extent that Indemnitee has otherwise  actually  received such payment under
     any insurance policy, contract, agreement or otherwise.

     13 Duration of Agreement.

     This  Agreement  shall  continue until and terminate upon the later of: (a)
ten years  after  the date  that  Indemnitee  shall  have  ceased to serve as an
officer  of the  Corporation,  or  (b)  the  final  termination  of all  pending
Proceedings in respect of which Indemnitee is granted rights of  indemnification
or  advancement  of  Expenses  hereunder  and or  any  proceeding  commenced  by
Indemnitee  pursuant to Section 11 of this  Agreement.  This Agreement  shall be
binding upon the  Corporation  and its successors and assigns and shall inure to
the benefit of Indemnitee and his heirs, executors and administrators.

     14 Severability.

     If any  provision  or  provisions  of this  Agreement  shall  be held to be
invalid,  illegal or unenforceable for any reason whatsoever:  (a) the validity,
legality  and  enforceability  of the  remaining  provisions  of this  Agreement
(including,  without  limitation,  each portion of any Section of this Agreement
containing any such provision held to be invalid, illegal or unenforceable, that
is not  itself  invalid,  illegal  or  unenforceable)  shall  not in any  way be
affected  or  impaired  thereby;  and (b) to the fullest  extent  possible,  the
provisions of this Agreement (including, without limitation, each portion of any
Section of this  Agreement  containing  any such  provision  held to be invalid,
illegal or unenforceable,  that is not itself invalid, illegal or unenforceable)
shall  be  construed  so as to  give  effect  to the  intent  manifested  by the
provision held invalid, illegal or unenforceable.

     15 Exception to Right of Indemnification or Advancement of Expenses.

     Except as provided  in Section  11.5,  Indemnitee  shall not be entitled to
indemnification  or advancement of Expenses under this Agreement with respect to
any  Proceeding,  or any  claim  therein,  brought  or made by him  against  the
Corporation.

                                       78


     16 Identical Counterparts.

     This Agreement may be executed in one or more  counterparts,  each of which
shall for all  purposes  be deemed to be an original  but all of which  together
shall constitute one and the same Agreement.

     17 Headings.

     The  headings  of  the  paragraphs  of  this  Agreement  are  inserted  for
convenience only and shall not be deemed to constitute part of this Agreement or
to affect the construction thereof.

     18 Modification and Waiver.

     No supplement, modification or amendment of this Agreement shall be binding
unless  executed in writing by both of the parties  hereto.  No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other  provisions  hereof  (whether  or not  similar)  nor shall such waiver
constitute a continuing waiver.

     19 Notice by Indemnitee.

     Indemnitee  agrees promptly to notify the Corporation in writing upon being
served with any summons, citation, subpoena, complaint, indictment,  information
or other  document  relating  any  Proceeding  or matter which may be subject to
indemnification or advancement of Expenses covered hereunder.

     20 Notices.

     All notices,  requests, demands and other communications hereunder shall be
in writing and shall be deemed to have been duly given if (i)  delivered by hand
and receipted for by the party to whom such notice or other  communication shall
have been directed,  or (ii) mailed by certified or registered mail with postage
prepaid, on the third business day after the date on which it is so mailed:

         If to Indemnitee, to:

                  Brette Popper
                  522 West End Avenue, Apartment 15A
                  New York, New York 10024

         If to the Corporation, to:

                  Individual Investor Group, Inc.
                  1633 Broadway, 38th Floor
                  New York, New York 10019

                                       79


     or to such  other  address  or  such  other  person  as  Indemnitee  or the
Corporation  shall designate in writing in accordance with this Section,  except
that notices regarding changes in notices shall be effective only upon receipt.

     21 Governing Law.

     The parties agree that this  Agreement  shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware.

     22 Miscellaneous.

     Use of the  masculine  pronoun  shall be  deemed  to  include  usage of the
feminine pronoun where appropriate.


     IN WITNESS WHEREOF,  the parties hereto have executed this Agreement on the
day and year first above
written.


                                           INDIVIDUAL INVESTOR GROUP, INC.



                                           By: /s/ Jonathan Steinberg
                                           Jonathan L. Steinberg
                                           Chief Executive Officer


                                           INDEMNITEE



                                           /s/ Brette Popper
                                           Brette Popper

                                       80


                           INDEMNIFICATION AGREEMENT


     This Agreement, made and entered into as of the 14th day of September, 1998
("Agreement"),  by and  between  Individual  Investor  Group,  Inc.,  a Delaware
corporation ("Corporation"), and Gregory E. Barton ("Indemnitee"):

     WHEREAS,  highly  competent  persons recently have become more reluctant to
serve publicly-held corporations as directors, officers, or in other capacities,
unless  they are  provided  with better  protection  from the risk of claims and
actions against them arising out of their service to and activities on behalf of
such corporation; and

     WHEREAS,  the current  impracticability of obtaining adequate insurance and
the uncertainties  related to  indemnification  have increased the difficulty of
attracting and retaining such persons; and

     WHEREAS, the Board of Directors of the Corporation ("Board") has determined
that the inability to attract and retain such persons is detrimental to the best
interests of the  Corporation's  stockholders  and that such  persons  should be
assured that they will have better protection in the future; and

     WHEREAS,  it is  reasonable,  prudent and necessary for the  Corporation to
obligate  itself  contractually  to indemnify such persons to the fullest extent
permitted by applicable law so that such persons will serve or continue to serve
the  Corporation  free from  undue  concern  that  they  will not be  adequately
indemnified; and

     WHEREAS,  this  Agreement is a supplement to and in  furtherance of Article
VIII of the  By-laws of the  Corporation,  and  Article  VIII of the Amended and
Restated  Certificate of  Incorporation  of the  Corporation and any resolutions
adopted pursuant thereto and shall neither be deemed to be a substitute therefor
nor to diminish or abrogate any rights of Indemnitee thereunder; and

     WHEREAS,  Indemnitee is willing to serve and to take on additional  service
for or on behalf of the  Corporation  on the  condition  that he be  indemnified
according to the terms of this Agreement;

     NOW,  THEREFORE,  in  consideration  of  the  premises  and  the  covenants
contained herein, the Corporation and Indemnitee do hereby covenant and agree as
follows:

     1 Definitions.

          For purposes of this Agreement:

          1.1 "Change in Control"  means a change in control of the  Corporation
     occurring  after the date  hereof of a nature  that would be required to be
     reported in response to Item 6(e) of Schedule 14A of Regulation  14A (or in
     response to any similar item on any similar  schedule or form)  promulgated
     under the Securities  Exchange Act of 1934, as amended ("Act"),  whether or
     not the Corporation is then subject to such reporting requirement provided,

                                       81


     however, that, without limitation, such a Change in Control shall be deemed
     to have occurred if after the date hereof (i) any "person" (as such term is
     used in  Sections  13(d)  and 14(d) of the Act) is or  becomes  "beneficial
     owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of
     securities  of the  Corporation  representing  20% or more of the  combined
     voting power of the then outstanding  securities of the Corporation without
     the prior  approval of at least  two-thirds  of the members of the Board in
     office immediately prior to such person attaining such percentage interest;
     (ii) the Corporation is a party to a merger, consolidation,  sale of assets
     or other  reorganization,  or a proxy  contest,  as a consequence  of which
     members of the Board in office  immediately  prior to such  transaction  or
     event  constitute  less than a majority of the Board  thereafter;  or (iii)
     during  any  period  of  two  consecutive  years,  individuals  who  at the
     beginning of such period  constituted the Board (including for this purpose
     any  new  director  whose  election  or  nomination  for  election  by  the
     Corporation's stockholders was approved by a vote of at least two-thirds of
     the directors  then still in office who were  directors at the beginning of
     such period)  cease for any reason to constitute at least a majority of the
     Board.

          1.2  "Corporate  Status"  means the status of a person who is or was a
     director,  officer,  employee,  agent or fiduciary of the Corporation or of
     any other corporation,  partnership, joint venture, trust, employee benefit
     plan or other enterprise which such person is or was serving at the request
     of the Corporation.

          1.3  "Disinterested  Director" means a director of the Corporation who
     is not  and  was  not a  party  to  the  Proceeding  in  respect  of  which
     indemnification is sought by Indemnitee.

          1.4 "Expenses" means all reasonable attorneys' fees, retainers,  court
     costs,  transcript costs,  fees of experts,  witness fees, travel expenses,
     duplicating costs, printing and binding costs, telephone charges,  postage,
     delivery service fees, and all other disbursements or expenses of the types
     customarily incurred in connection with prosecuting,  defending,  preparing
     to  prosecute  or  defend,  investigating,  or being or  preparing  to be a
     witness in a Proceeding.

          1.5 "Independent Counsel" means a law firm, or a member of a law firm,
     that is experienced in matters of corporation law and neither presently is,
     nor in the past  five  years  has  been,  retained  to  represent:  (i) the
     Corporation  or  Indemnitee  in any other  matter  material  to either such
     party, or (ii) any other party to the Proceeding giving rise to a claim for
     indemnification   hereunder.   Notwithstanding  the  foregoing,   the  term
     "Independent   Counsel"  shall  not  include  any  person  who,  under  the
     applicable standards of professional conduct then prevailing,  would have a
     conflict of interest in  representing  either the Corporation or Indemnitee
     in an action to determine Indemnitee's rights under this Agreement.

          1.6  "Proceeding"  means  any  action,  suit,  arbitration,  alternate
     dispute resolution mechanism, investigation,  administrative hearing or any
     other proceeding, whether civil, criminal, administrative or investigative,
     except  one  initiated  by an  Indemnitee  pursuant  to  Section 11 of this
     Agreement to enforce his rights under this Agreement.

     2 Services by Indemnitee.

     Indemnitee  agrees to serve as Vice President of Business and Legal Affairs
and General Counsel of the  Corporation.  Indemnitee may at any time and for any
reason resign from such position (subject to any other contractual obligation or
any obligation imposed by operation of law).

                                       82


     3 Indemnification - General.

     The Corporation  shall indemnify,  and advance  Expenses to,  Indemnitee as
provided in this Agreement to the fullest extent  permitted by applicable law in
effect on the date  hereof  and to such  greater  extent as  applicable  law may
thereafter from time to time permit. The rights of Indemnitee provided under the
preceding  sentence shall  include,  but shall not be limited to, the rights set
forth in the other Sections of this Agreement.

     4 Proceedings Other Than Proceedings by or in the Right of the Corporation.

     Indemnitee shall be entitled to the rights of  indemnification  provided in
this Section if, by reason of his Corporate  Status,  he is, or is threatened to
be made, a party to any threatened,  pending or completed Proceeding, other than
a Proceeding  by or in the right of the  Corporation.  Pursuant to this Section,
Indemnitee shall be indemnified against Expenses,  judgments,  penalties,  fines
and amounts paid in settlement actually and reasonably incurred by him or on his
behalf in  connection  with any such  Proceeding  or any claim,  issue or matter
therein,  if he acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the Corporation, and, with respect to
any  criminal  Proceeding,  had no  reasonable  cause to believe his conduct was
unlawful.

     5 Proceedings by or in the Right of the Corporation.

     Indemnitee shall be entitled to the rights of  indemnification  provided in
this Section if, by reason of his Corporate  Status,  he is, or is threatened to
be made, a party to any threatened,  pending or completed  Proceeding brought by
or in the right of the Corporation to procure a judgment in its favor.  Pursuant
to this Section,  Indemnitee shall be indemnified  against Expenses actually and
reasonably  incurred  by  him or on his  behalf  in  connection  with  any  such
Proceeding if he acted in good faith and in a manner he  reasonably  believed to
be in or not opposed to the best interests of the  Corporation.  Notwithstanding
the foregoing, no indemnification against such Expenses shall be made in respect
of any  claim,  issue or matter in any such  proceeding  as to which  Indemnitee
shall have been  adjudged  to be liable to the  Corporation  if  applicable  law
prohibits  such  indemnification  unless the Court of  Chancery  of the State of
Delaware,  or the court in which such  Proceeding  shall have been brought or is
pending, shall determine that indemnification  against Expenses may nevertheless
be made by the Corporation.

     6 Indemnification for Expenses of Party Who is Wholly or Partly Successful.

     Notwithstanding  any other provision of this Agreement,  to the extent that
Indemnitee is, by reason of his Corporate  Status, a party to and is successful,
on the merits or otherwise,  in any Proceeding,  he shall be indemnified against
all  Expenses  actually  and  reasonably  incurred  by him or on his  behalf  in
connection therewith.  If Indemnitee is not wholly successful in such Proceeding
but is successful,  on the merits or otherwise,  as to one or more but less than
all  claims,  issues  or  matters  in such  Proceeding,  the  Corporation  shall
indemnify  Indemnitee  against all Expenses actually and reasonably  incurred by
him or on his behalf in connection with each successfully  resolved claim, issue
or matter.  For the purposes of this Section and without limiting the foregoing,

                                       83


the  termination  of any  claim,  issue  or  matter  in any such  Proceeding  by
dismissal, with or without prejudice,  shall be deemed to be a successful result
as to such claim, issue or matter.

     7 Indemnification for Expenses as a Witness.

     Notwithstanding  any other provision of this Agreement,  to the extent that
Indemnitee is, by reason of his Corporate  Status,  a witness in any Proceeding,
he shall be indemnified against all Expenses actually and reasonably incurred by
him or on his behalf in connection therewith.

     8 Advancement of Expenses.

     The  Corporation  shall  advance all  Expenses  incurred by or on behalf of
Indemnitee  in  connection  with any  Proceeding  within  twenty  days after the
receipt  by  the  Corporation  of a  statement  or  statements  from  Indemnitee
requesting such advance or advances from time to time, whether prior to or after
final  disposition  of such  Proceeding.  Such  statement  or  statements  shall
reasonably  evidence the Expenses incurred by Indemnitee and shall include or be
preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay
any Expenses  advanced if it shall  ultimately be determined  that Indemnitee is
not entitled to be indemnified against such Expenses.

     9 Procedure for Determination of Entitlement to Indemnification.

          9.1 To obtain  indemnification under this Agreement in connection with
     any Proceeding,  and for the duration  thereof,  Indemnitee shall submit to
     the  Corporation a written  request,  including  therein or therewith  such
     documentation and information as is reasonably  available to Indemnitee and
     is reasonably  necessary to determine whether and to what extent Indemnitee
     is entitled to  indemnification.  The Secretary of the  Corporation  shall,
     promptly upon receipt of any such request for  indemnification,  advise the
     Board in writing that Indemnitee has requested indemnification.

          9.2 Upon written request by Indemnitee for indemnification pursuant to
     Section 9.1 hereof,  a  determination,  if required by applicable law, with
     respect to Indemnitee's entitlement thereto shall be made in such case: (i)
     if a Change in Control shall have occurred,  by Independent Counsel (unless
     Indemnitee  shall request that such  determination  be made by the Board or
     the stockholders,  in which case in the manner provided for in clauses (ii)
     or (iii) of this Section 9.2) in a written  opinion to the Board, a copy of
     which shall be delivered to Indemnitee);  (ii) if a Change of Control shall
     not  have  occurred,  (A) by the  Board  by a  majority  vote  of a  quorum
     consisting  of  Disinterested  Directors,  or (B) if a quorum  of the Board
     consisting of  Disinterested  Directors is not obtainable,  or even if such
     quorum is obtainable, if such quorum of Disinterested Directors so directs,
     either (x) by Independent Counsel in a written opinion to the Board, a copy
     of which shall be delivered to Indemnitee,  or (y) by the  stockholders  of
     the Corporation,  as determined by such quorum of Disinterested  Directors,
     or a quorum  of the  Board,  as the case may be;  or (iii) as  provided  in
     Section 10.2 of this  Agreement.  If it is so determined that Indemnitee is
     entitled to indemnification, payment to Indemnitee shall be made within ten
     (10) days after such  determination.  Indemnitee  shall  cooperate with the
     person,  persons  or entity  making  such  determination  with  respect  to
     Indemnitee's  entitlement to  indemnification,  including providing to such
     person, persons or entity upon reasonable advance request any documentation
     or  information  which  is  not  privileged  or  otherwise  protected  from

                                       84


     disclosure  and which is reasonably  available to Indemnitee and reasonably
     necessary  to  such   determination.   Any  costs  or  expenses  (including
     attorneys' fees and disbursements) incurred by Indemnitee in so cooperating
     with the person, persons or entity making such determination shall be borne
     by the Corporation  (irrespective  of the  determination as to Indemnitee's
     entitlement to indemnification)  and the Corporation hereby indemnifies and
     agrees to hold Indemnitee harmless therefrom.

          9.3 If required, Independent Counsel shall be selected as follows: (i)
     if a Change of Control shall not have occurred,  Independent  Counsel shall
     be selected by the Board, and the Corporation  shall give written notice to
     Indemnitee  advising him of the identity of Independent Counsel so selected
     or (ii) if a Change of Control  shall have  occurred,  Independent  Counsel
     shall be selected by Indemnitee  (unless Indemnitee shall request that such
     selection  be made by the  Board,  in which  event  (i) shall  apply),  and
     Indemnitee shall give written notice to the Corporation  advising it of the
     identity of Independent Counsel so selected. In either event, Indemnitee or
     the  Corporation,  as the case may be,  may,  within  seven days after such
     written  notice  of  selection  shall  have  been  given,  deliver  to  the
     Corporation  or to Indemnitee,  as the case may be, a written  objection to
     such  selection.  Such  objection  may be asserted  only on the ground that
     Independent   Counsel  so  selected  does  not  meet  the  requirements  of
     "Independent  Counsel" as defined in Section 1 of this  Agreement,  and the
     objection  shall set forth with  particularity  the  factual  basis of such
     assertion.  If such  written  objection  is made,  Independent  Counsel  so
     selected may not serve as Independent  Counsel unless and until a court has
     determined  that such objection is without merit.  If, within 20 days after
     submission by Indemnitee of a written request for indemnification  pursuant
     to Section 9.1 hereof, no Independent  Counsel shall have been selected and
     not objected to,  either the  Corporation  or  Indemnitee  may petition the
     Court of Chancery  of the State of  Delaware,  or other court of  competent
     jurisdiction, for resolution of any objection which shall have been made by
     the  Corporation  or  Indemnitee  to the other's  selection of  Independent
     Counsel  and/or  for the  appointment  as  Independent  Counsel of a person
     selected  by such  court  or by such  other  person  as  such  court  shall
     designate,  and the person with respect to whom an objection is so resolved
     or the person so appointed  shall act as Independent  Counsel under Section
     9.2  hereof.  The  Corporation  shall pay any and all  reasonable  fees and
     expenses of Independent  Counsel  incurred by such  Independent  Counsel in
     connection with its actions pursuant to this Agreement, and the Corporation
     shall pay all  reasonable  fees and expenses  incident to the procedures of
     this  Section  9.3,  regardless  of the  manner in which  such  Independent
     Counsel was selected or appointed.  Upon the due  commencement  date of any
     judicial  proceeding or arbitration  pursuant to Section  11.1(iii) of this
     Agreement,  Independent  Counsel  shall be  discharged  and relieved of any
     further   responsibility  in  such  capacity  (subject  to  the  applicable
     standards of professional conduct then prevailing).

     10 Presumptions and Effects of Certain Proceedings.

          10.1  If a  Change  of  Control  shall  have  occurred,  in  making  a
     determination with respect to entitlement to indemnification hereunder, the
     person or persons or entity  making such  determination  shall presume that
     Indemnitee  is  entitled  to   indemnification   under  this  Agreement  if
     Indemnitee has submitted a request for  indemnification  in accordance with
     Section 9.1 of this Agreement, and the Corporation shall have the burden of
     proof to overcome that  presumption  in  connection  with the making by any

                                       85


     person,   persons  or  entity  of  any   determination   contrary  to  that
     presumption.

          10.2 If the person,  persons or entity  empowered  or  selected  under
     Section 9 of this Agreement to determine whether  Indemnitee is entitled to
     indemnification  shall not have made a  determination  within 60 days after
     receipt  by  the  Corporation  of  the  request  therefor,   the  requisite
     determination  of  entitlement to  indemnification  shall be deemed to have
     been made and Indemnitee shall be entitled to such indemnification,  absent
     (i) a  misstatement  by Indemnitee of a material  fact, or an omission of a
     material  fact  necessary to make  Indemnitee's  statement  not  materially
     misleading,  in connection  with the request for  indemnification,  or (ii)
     prohibition of such indemnification under applicable law provided, however,
     that such  60-day  period may be extended  for a  reasonable  time,  not to
     exceed an additional  30 days, if the person,  persons or entity making the
     determination  with respect to entitlement to indemnification in good faith
     require(s)  such  additional  time  for  the  obtaining  or  evaluating  of
     documentation  and/or information  relating thereto and provided,  further,
     that the  foregoing  provisions of this Section 10.2 shall not apply (i) if
     the  determination of entitlement to  indemnification  is to be made by the
     stockholders pursuant to Section 9.2 of this Agreement and if (A) within 15
     days after receipt by the Corporation of the request for such determination
     the Board has resolved to submit such determination to the stockholders for
     their  consideration at an annual meeting thereof to be held within 75 days
     after such receipt and such determination is made thereat, or (B) a special
     meeting of stockholders is called within 15 days after such receipt for the
     purpose of making such determination, such meeting is held for such purpose
     within 60 days after having been so called and such  determination  is made
     thereat,  or (ii) if the determination of entitlement to indemnification is
     to be  made  by  Independent  Counsel  pursuant  to  Section  9.2  of  this
     Agreement.

          10.3 The  termination  of any  Proceeding  or of any  claim,  issue or
     matter therein,  by judgment,  order,  settlement or conviction,  or upon a
     plea of nolo contendere or its  equivalent,  shall not (except as otherwise
     expressly  provided in this Agreement) of itself adversely affect the right
     of Indemnitee to  indemnification  or create a presumption  that Indemnitee
     did not act in good faith and in a manner which he  reasonably  believed to
     be in or not  opposed to the best  interests  of the  Corporation  or, with
     respect to any criminal Proceeding, that Indemnitee had reasonable cause to
     believe that his conduct was unlawful.

     11 Remedies of Indemnitee.

          11.1 In the event that (i) a determination is made pursuant to Section
     9 of this  Agreement  that  Indemnitee  is not entitled to  indemnification
     under this  Agreement,  (ii)  advancement  of  Expenses  is not timely made
     pursuant  to  Section 8  of this  Agreement,  (iii)  the  determination  of
     indemnification  is to be made by Independent  Counsel  pursuant to Section
     9.2 of this Agreement and such  determination  shall not have been made and
     delivered  in a  written  opinion  within  90  days  after  receipt  by the
     Corporation   of  the  request  for   indemnification,   (iv)   payment  of
     indemnification  is not made pursuant to Section 7 of this Agreement within
     ten days after receipt by the Corporation of a written request therefor, or
     (v)  payment  of  indemnification  is not  made  within  ten  days  after a

                                       86


     determination has been made that Indemnitee is entitled to  indemnification
     or such  determination is deemed to have been made pursuant to Section 9 or
     10 of this Agreement, Indemnitee shall be entitled to an adjudication in an
     appropriate  court  of the  State of  Delaware,  or in any  other  court of
     competent  jurisdiction,  of his  entitlement  to such  indemnification  or
     advancement of Expenses.  Alternatively, the Indemnitee, at his option, may
     seek an  award  in  arbitration  to be  conducted  by a  single  arbitrator
     pursuant to the rules of the American Arbitration  Association.  Indemnitee
     shall  commence  such  proceeding  seeking an  adjudication  or an award in
     arbitration  within 180 days following the date on which  Indemnitee  first
     has the right to commence  such  proceeding  pursuant to this Section 11.1.
     The  Corporation  shall  not  oppose  Indemnitee's  right  to seek any such
     adjudication or award in arbitration.


          11.2 In the event that a  determination  shall have been made pursuant
     to  Section  9 of  this  Agreement  that  Indemnitee  is  not  entitled  to
     indemnification,  any judicial proceeding or arbitration commenced pursuant
     to this  Section  shall be  conducted in all respects as a de novo trial or
     arbitration on the merits and Indemnitee  shall not be prejudiced by reason
     of that adverse determination.

          11.3 If a  determination  shall  have been made or deemed to have been
     made  pursuant  to Section 9 or 10 of this  Agreement  that  Indemnitee  is
     entitled  to  indemnification,  the  Corporation  shall  be  bound  by such
     determination in any judicial proceeding or arbitration  commenced pursuant
     to this  Section,  absent (i) a  misstatement  by  Indemnitee of a material
     fact,  or an omission of a material  fact  necessary  to make  Indemnitee's
     statement not  materially  misleading,  in connection  with the request for
     indemnification,   or  (ii)  prohibition  of  such  indemnification   under
     applicable law.

          11.4 The Corporation shall be precluded from asserting in any judicial
     proceeding  or  arbitration  commenced  pursuant to this  Section  that the
     procedures and  presumptions  of this Agreement are not valid,  binding and
     enforceable  and  shall  stipulate  in any such  court or  before  any such
     arbitrator  that the  Corporation  is bound by all the  provisions  of this
     Agreement.

          11.5 In the event that Indemnitee,  pursuant to this Section,  seeks a
     judicial adjudication of, or an award in arbitration to enforce, his rights
     under,  or to recover  damages  for breach of, this  Agreement,  Indemnitee
     shall be entitled to recover from the Corporation, and shall be indemnified
     by the Corporation against, any and all expenses (of the kinds described in
     the definition of Expenses) actually and reasonably incurred by him in such
     judicial  adjudication or arbitration,  but only if he prevails therein. If
     it shall be determined in such judicial  adjudication  or arbitration  that
     Indemnitee   is  entitled  to  receive  some  but  less  than  all  of  the
     indemnification or advancement of expenses sought, the expenses incurred by
     Indemnitee in connection  with such judicial  adjudication  or  arbitration
     shall be appropriately prorated.

     12 Non-Exclusivity; Survival of Rights; Insurance; Subrogation.

          12.1 The  rights of  indemnification  and to  receive  advancement  of
     Expenses as provided by this Agreement shall not be deemed exclusive of any
     other  rights  to  which  Indemnitee  may at any  time  be  entitled  under
     applicable  law,  the  certificate  of  incorporation  or  by-laws  of  the
     Corporation,  any  agreement,  a vote of  stockholders  or a resolution  of
     directors,  or  otherwise.  No  amendment,  alteration  or  repeal  of this
     Agreement or any provision  hereof shall be effective as to any  Indemnitee
     with  respect to any action  taken or  omitted  by such  Indemnitee  in his
     Corporate Status prior to such amendment, alteration or repeal.

                                       87


          12.2 To the extent that the Corporation  maintains an insurance policy
     or  policies  providing  liability   insurance  for  directors,   officers,
     employees,  agents  or  fiduciaries  of the  Corporation  or of  any  other
     corporation,  partnership,  joint venture,  trust, employee benefit plan or
     other   enterprise   which  such  person  serves  at  the  request  of  the
     Corporation,  Indemnitee  shall be covered by such  policy or  policies  in
     accordance  with its or their terms to the maximum  extent of the  coverage
     available  for any such  director,  officer,  employee,  agent or fiduciary
     under such policy or policies.

          12.3 In the event of any payment under this Agreement, the Corporation
     shall be  subrogated  to the extent of such payment to all of the rights of
     recovery of Indemnitee,  who shall execute all papers required and take all
     action  necessary  to  secure  such  rights,  including  execution  of such
     documents  as are  necessary  to enable  the  Corporation  to bring suit to
     enforce such rights.

          12.4 The Corporation  shall not be liable under this Agreement to make
     any  payment of amounts  otherwise  indemnifiable  hereunder  if and to the
     extent that Indemnitee has otherwise  actually  received such payment under
     any insurance policy, contract, agreement or otherwise.

     13 Duration of Agreement.

     This  Agreement  shall  continue until and terminate upon the later of: (a)
ten years  after  the date  that  Indemnitee  shall  have  ceased to serve as an
officer  of the  Corporation,  or  (b)  the  final  termination  of all  pending
Proceedings in respect of which Indemnitee is granted rights of  indemnification
or  advancement  of  Expenses  hereunder  and or  any  proceeding  commenced  by
Indemnitee  pursuant to Section 11 of this  Agreement.  This Agreement  shall be
binding upon the  Corporation  and its successors and assigns and shall inure to
the benefit of Indemnitee and his heirs, executors and administrators.

     14 Severability.

     If any  provision  or  provisions  of this  Agreement  shall  be held to be
invalid,  illegal or unenforceable for any reason whatsoever:  (a) the validity,
legality  and  enforceability  of the  remaining  provisions  of this  Agreement
(including,  without  limitation,  each portion of any Section of this Agreement
containing any such provision held to be invalid, illegal or unenforceable, that
is not  itself  invalid,  illegal  or  unenforceable)  shall  not in any  way be
affected  or  impaired  thereby;  and (b) to the fullest  extent  possible,  the
provisions of this Agreement (including, without limitation, each portion of any
Section of this  Agreement  containing  any such  provision  held to be invalid,
illegal or unenforceable,  that is not itself invalid, illegal or unenforceable)
shall  be  construed  so as to  give  effect  to the  intent  manifested  by the
provision held invalid, illegal or unenforceable.

     15 Exception to Right of Indemnification or Advancement of Expenses.

     Except as provided  in Section  11.5,  Indemnitee  shall not be entitled to
indemnification  or advancement of Expenses under this Agreement with respect to
any  Proceeding,  or any  claim  therein,  brought  or made by him  against  the
Corporation.

                                       88


     16 Identical Counterparts.

     This Agreement may be executed in one or more  counterparts,  each of which
shall for all  purposes  be deemed to be an original  but all of which  together
shall constitute one and the same Agreement.

     17 Headings.

     The  headings  of  the  paragraphs  of  this  Agreement  are  inserted  for
convenience only and shall not be deemed to constitute part of this Agreement or
to affect the construction thereof.

     18 Modification and Waiver.

     No supplement, modification or amendment of this Agreement shall be binding
unless  executed in writing by both of the parties  hereto.  No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other  provisions  hereof  (whether  or not  similar)  nor shall such waiver
constitute a continuing waiver.

     19 Notice by Indemnitee.

     Indemnitee  agrees promptly to notify the Corporation in writing upon being
served with any summons, citation, subpoena, complaint, indictment,  information
or other  document  relating  any  Proceeding  or matter which may be subject to
indemnification or advancement of Expenses covered hereunder.

     20 Notices.

     All notices,  requests, demands and other communications hereunder shall be
in writing and shall be deemed to have been duly given if (i)  delivered by hand
and receipted for by the party to whom such notice or other  communication shall
have been directed,  or (ii) mailed by certified or registered mail with postage
prepaid, on the third business day after the date on which it is so mailed:

         If to Indemnitee, to:

                  Gregory E. Barton
                  22 East 36th Street, Apartment 3D
                  New York, New York 10016

         If to the Corporation, to:

                  Individual Investor Group, Inc.
                  1633 Broadway, 38th Floor
                  New York, New York 10019

                                       89



     or to such  other  address  or  such  other  person  as  Indemnitee  or the
Corporation  shall designate in writing in accordance with this Section,  except
that notices regarding changes in notices shall be effective only upon receipt.

     21 Governing Law.

     The parties agree that this  Agreement  shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware.

     22 Miscellaneous.

     Use of the  masculine  pronoun  shall be  deemed  to  include  usage of the
feminine pronoun where appropriate.


     IN WITNESS WHEREOF,  the parties hereto have executed this Agreement on the
day and year first above written.


                                              INDIVIDUAL INVESTOR GROUP, INC.



                                              By: /s/ Jonathan Steinberg
                                              Jonathan L. Steinberg
                                              Chief Executive Officer


                                              INDEMNITEE


                                              /s/ Gregory Barton
                                              Gregory E. Barton

                                       90

 


5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS FOUND ON PAGES 3 AND 4 OF THE CONPANY'S FORM 10-Q FOR THE YEAR-TO-DATE, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000880631 INDIVIDUAL INVESTOR GROUP, INC. 9-MOS DEC-31-1998 JAN-01-1998 SEP-30-1998 4,657,987 518,392 2,848,535 336,964 0 8,728,362 1,288,802 869,273 10,156,798 3,201,953 0 0 0 84,908 4,621,375 10,156,798 11,663,214 11,663,214 8,687,742 17,603,401 0 0 0 (5,834,162) 0 (5,834,162) (781,370) 0 0 (6,615,532) (0.86) (0.86)