SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
| | Preliminary Proxy Statement | | Confidential, For Use of the Commission
|X| Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
| | Definitive Additional Materials
| | Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
INDIVIDUAL INVESTOR GROUP, INC.
______________________________________________________________________________
(Name of Registrant as Specified in Its Charter)
______________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
_______________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
_______________________________________________________________________
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:*
_______________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
_______________________________________________________________________
(5) Total fee paid:
_______________________________________________________________________
|_| Fee paid previously with preliminary materials:
|_| Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or
schedule and the date of its filing.
(1) Amount previously paid:
_______________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
_______________________________________________________________________
(3) Filing Party:
_______________________________________________________________________
(4) Date Filed:
- -----------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
INDIVIDUAL INVESTOR GROUP, INC.
1633 Broadway
38th Floor
New York, New York 10019
--------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held June 17, 1998
--------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
INDIVIDUAL INVESTOR GROUP, INC. ("Company") will be held at the offices of
counsel to the Company, Graubard Mollen & Miller, 600 Third Avenue, 32nd Floor,
New York, New York, on Wednesday, June 17, 1998, at 10:00 a.m. local time, for
the following purposes:
1. To elect two directors of the Company for a term of three years
and until their successors are elected and qualified; and
2. To transact such other business as may properly come before the
meeting, or any or all postponement(s) or adjournment(s) thereof.
Only stockholders of record at the close of business on April 23, 1998,
will be entitled to notice of, and to vote at, the meeting and any
postponement(s) or adjournment(s) thereof.
YOU ARE URGED TO READ THE ATTACHED PROXY STATEMENT, WHICH CONTAINS
INFORMATION RELEVANT TO THE ACTIONS TO BE TAKEN AT THE MEETING. IN ORDER TO
ASSURE THE PRESENCE OF A QUORUM, WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING
IN PERSON, PLEASE SIGN AND DATE THE ACCOMPANYING PROXY CARD AND MAIL IT PROMPTLY
IN THE ENCLOSED ADDRESSED, POSTAGE PREPAID ENVELOPE. YOU MAY REVOKE YOUR PROXY
IF YOU SO DESIRE AT ANY TIME BEFORE IT IS VOTED.
By Order of the Board of Directors
Scot A. Rosenblum
Secretary
New York, New York
May 6, 1998
INDIVIDUAL INVESTOR GROUP, INC.
___________________
PROXY STATEMENT
___________________
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 17, 1998
This Proxy Statement and the enclosed form of proxy are furnished in
connection with solicitation of proxies by the Board of Directors of Individual
Investor Group, Inc. ("Company") to be used at the Annual Meeting of
Stockholders of the Company to be held on June 17, 1998, and any postponements
or adjournments thereof ("Annual Meeting"). The matters to be considered at the
Annual Meeting are set forth in the attached Notice of Annual Meeting.
The proxy will be voted (or withheld from voting) in accordance with
any specifications made. Where no specifications are indicated, the proxies will
vote "FOR" the nominees for director, as described below under Proposal 1, and,
in the discretion of the proxy holders, on any other business properly coming
before the meeting and any postponement(s) or adjournment(s) thereof. A proxy
may be revoked by giving notice to the Secretary of the Company in person, or by
written notification actually received by the Secretary, at any time prior to
its being exercised.
The Company's executive offices are located at 1633 Broadway, 38th
Floor, New York, New York 10019. This Proxy Statement and the enclosed form of
proxy are first being sent to stockholders on or about May 6, 1998.
VOTING SECURITIES
The Board of Directors has fixed the close of business on April 23,
1998, as the record date for the determination of stockholders entitled to
notice of, and to vote at, the Annual Meeting. Only stockholders of record at
the close of business on that date will be entitled to vote at the Annual
Meeting or any and all postponement(s) or adjournment(s) thereof. As of April
23, 1998, the Company had issued and outstanding 7,231,007 shares of Common
Stock, the Company's only class of voting securities outstanding. Each
stockholder of the Company will be entitled to one vote for each share of Common
Stock registered in his name on the record date. The presence, in person or by
proxy, of a majority of all of the outstanding shares of Common Stock
constitutes a quorum at the Annual Meeting. Proxies relating to "street name"
shares that are returned to the Company but marked by brokers as "not voted"
will be treated as shares present for purposes of determining the presence of a
quorum on all matters but will not be treated as shares entitled to vote on the
matter as to which authority to vote is withheld by the broker ("broker
non-votes").
The election of directors requires a plurality vote of those shares of
Common Stock voted at the Annual Meeting with respect to the election of
directors. "Plurality" means that the individuals who receive the largest number
of votes cast "FOR" are elected as directors. Consequently, any shares of Common
Stock not voted "FOR" a particular nominee (whether as a result of a direction
to withhold authority or a broker non-vote) will not be counted in such
nominee's favor.
All other matters to be voted on will be decided by the affirmative
vote of a majority of the shares of Common Stock present or represented at the
Annual Meeting and entitled to vote. On any such matter, an abstention will have
the same effect as a negative vote, but because shares of Common Stock held by
brokers will not be considered entitled to vote on matters as to which the
brokers withhold authority, a broker non-vote will have no effect on the vote.
The following table sets forth certain information as of April 23,
1998, with respect to the Common Stock ownership of (i) those persons or groups
known to beneficially own more than 5% of the Company's voting securities, (ii)
each director and director-nominee of the Company, (iii) each executive officer
whose compensation exceeded $100,000 in the 1997 fiscal year, and (iv) all
directors and executive officers of the Company as a group.
2
Amount and Nature of Percent of Class
Name of Beneficial Owner Beneficial Ownership(1) of Voting Securities
- ------------------------ -------------------- --------------------
Saul P. Steinberg 1,288,090(2) 17.8%
Jonathan L. Steinberg 1,913,634(3) 24.7%
Reliance Financial Services Corporation 666,666(4) 9.2%
Wise Partners, L.P. 521,291(5) 7.2%
Robert H. Schmidt 541,001(6) 7.0%
Scot A. Rosenblum 375,413(7) 4.9%
Bruce L. Sokoloff 46,000(8) *
Peter M. Ziemba 20,000(9) *
All directors and executive 2,910,381(10) 33.5%
officers as a group (6 persons)
_____________________________
* Less than 1%.
(1) Beneficial ownership is determined in accordance with Rule 13d-3 under
the Securities Exchange Act of 1934. The information concerning the
stockholders is based upon information furnished to the Company by such
stockholders. Except as otherwise indicated, all of the shares of
Common Stock are owned of record and beneficially and the persons
identified have sole voting and investment power with respect thereto.
(2) Includes 666,666 shares of Common Stock owned by Reliance Insurance
Company, an indirect wholly owned subsidiary of Reliance Group
Holdings, Inc. ("Reliance Group"). (See Note 4.) Approximately 44% of
the common stock of Reliance Group is beneficially owned by Mr. Saul P.
Steinberg, members of his family and affiliated trusts. As a result of
his stockholdings in Reliance Group, Mr. Saul P. Steinberg may be
deemed to control Reliance Group and to beneficially own the shares of
Common Stock owned by Reliance Insurance Company. Mr. Saul P. Steinberg
is the father of Mr. Jonathan Steinberg and brother-in-law of Mr. Bruce
L. Sokoloff. Excludes the 521,291 shares of Common Stock owned by Wise
Partners, L.P., of which Mr. Saul P. Steinberg is a limited partner.
(3) Includes 521,291 shares of Common Stock owned by Wise Partners, L.P.,
of which Mr. Jonathan L. Steinberg is the general partner. Includes
488,333 shares of Common Stock issuable upon currently exercisable
options and options exercisable within the next 60 days. Does not
include 191,667 shares of Common Stock issuable upon exercise of
options which are not currently exercisable and which will not become
exercisable within the next 60 days.
(4) Includes 666,666 shares of Common Stock owned by Reliance Insurance
Company. Reliance Financial Services Corporation is the direct parent
company of Reliance Insurance Company. Reliance Insurance Company has
sole voting power and sole investment power over the shares of Common
Stock listed. (See Note 2 above.)
(5) Wise Partners, L.P., a New York limited partnership, of which Mr.
Jonathan L. Steinberg is the general partner and Mr. Saul P. Steinberg
is a limited partner. (See Notes 2 and 3 above).
3
(6) Includes 525,001 shares of Common Stock issuable upon the exercise of
currently exercisable options and options exercisable within the next
60 days. Does not include 114,999 shares of Common Stock issuable upon
exercise of options which are not currently exercisable and which will
not become exercisable within the next 60 days.
(7) Includes 374,413 shares of Common Stock issuable upon the exercise of
currently exercisable options and options exercisable within the next
60 days. Does not include 96,250 shares of Common Stock issuable upon
exercise of options which are not currently exercisable, and which will
not become exercisable within the next 60 days.
(8) Includes 30,000 shares of Common Stock issuable upon the exercise of
presently exercisable options and options exercisable within the next
60 days.
(9) Includes 20,000 shares of Common Stock issuable upon the exercise of
presently exercisable options within the next 60 days. Does not include
10,000 shares of Common Stock issuable upon exercise of options which
are not currently exercisable and which will not become exercisable
within 60 days.
(10) Includes 1,449,080 shares of Common Stock issuable upon the exercise of
currently exercisable options and options exercisable within the next
60 days. Does not include 441,583 shares of Common Stock issuable upon
exercise of options which are not currently exercisable and which will
not become exercisable within the next 60 days. Includes 521,291 shares
of Common Stock owned by Wise Partners, L.P. of which Mr. Jonathan L.
Steinberg is the general partner
PROPOSAL 1: ELECTION OF DIRECTORS
The Board of Directors is divided into three classes, each of which
serves for a term of three years, with only one class of directors being elected
in each year. The term of the second class of directors, consisting of Mr. Bruce
L. Sokoloff and Mr. Peter M. Ziemba will expire on the date of this year's
Annual Meeting. The term of office of the third class of directors, consisting
of Mr. Robert H. Schmidt, will expire in 1999 and the term of the first class of
directors, consisting of Mr. Jonathan L. Steinberg and Mr. Scot A. Rosenblum
will expire in 2000. In each case, each director serves from the date of his
election until the end of his term and until his successor is elected and
qualified.
4
Two persons will be elected at the Annual Meeting to serve as directors
for a term of three years. The Company has nominated Mr. Bruce L. Sokoloff and
Mr. Peter M. Ziemba as the candidates for election. Unless authority is
withheld, the proxies solicited by management will be voted "FOR" the election
of these nominees. In case either of the nominees becomes unavailable for
election to the Board of Directors, an event which is not anticipated, the
persons named as proxies, or their substitutes, shall have full discretion and
authority to vote or refrain from voting for any other candidate in accordance
with their judgment.
Information About Nominees
Bruce L. Sokoloff has served as a director since 1989. Mr. Sokoloff has
served as Senior Vice President - Administration of Reliance Group Holdings,
Inc., the holding company for several insurance and financial services
corporations, for more than five years and has been employed at Reliance Group
Holdings, Inc. since 1973. Mr. Sokoloff is an uncle by marriage of Mr. Jonathan
L. Steinberg. Mr. Sokoloff is 48 years of age.
Peter M. Ziemba has served as a director since 1996. Mr. Ziemba is an
attorney and has been a partner of the law of firm Graubard Mollen & Miller for
more than five years. Graubard Mollen & Miller is outside general counsel to the
Company. Mr. Ziemba is 40 years of age.
Information About Other Directors
Each of the directors named in the following table will continue in office
after the Annual Meeting and until his term expires in the year indicated and
his successor is elected and qualified:
Term Served as
Name Age Expires In Director Since Principal Occupation
- ----------------- ---- ---------- -------------- -----------------------------
Robert H. Schmidt 61 1999 1994 President and Chief Operating
Officer
Jonathan L. 33 2000 1998 Chairman of the Board and Chief
Steinberg Executive Officer
Scot A. Rosenblum 33 2000 1988 Executive Vice President, Chief
Financial Officer, Treasurer and
Secretary
Robert Schmidt has served as a director, President and Chief Operating
Officer of the Company since July 1994. From January 1991 to June 1994, Mr.
Schmidt was President and Chief Executive Officer of Dreyfus Service
Corporation, a marketing and mutual fund distribution subsidiary of Dreyfus
Corporation. From 1966 to December 1990, Mr. Schmidt served in various executive
capacities with Levine, Huntley, Schmidt & Beaver, an advertising agency which
he co-founded, including Chairman and Chief Executive Officer from 1985 to
December 1990.
Jonathan L. Steinberg founded the Company and has served as Chairman of
the Board of Directors of the Company since October 1988. Mr. Steinberg also
served as President from October 1988 to July 1994 and Treasurer of the Company
from October 1988 to June 1996. In addition, Mr. Steinberg is the
Editor-in-Chief of each of the Company's publications. From August 1986 to
August 1988, Mr. Steinberg was employed as an analyst in the Mergers
4
and Acquisitions Department of Bear, Stearns & Co. Inc., an investment banking
firm. Mr. Steinberg is a nephew by marriage of Bruce L. Sokoloff, a director of
the Company.
Scot A. Rosenblum has served as a director, Executive Vice President,
Chief Financial Officer and Secretary of the Company since October 1988 and
Treasurer of the Company since June 1996. In addition, Mr. Rosenblum served as
the Publisher of each of the Company's publications until March 1996. From
August 1986 to August 1988, Mr. Rosenblum was employed as an analyst in the
Corporate Finance Department of Bear, Stearns & Co. Inc.
Executive Officers, Board of Directors' Meetings and Committees
Mr. Henry G. Clark (age 53) has been Controller and Principal
Accounting Officer since November 1995. Prior to that, he was Chief Financial
Officer/Controller of Seventh Generation, Inc. from July 1990 to March 1992 and
then again from May 1993 to December 1994. Mr. Clark is a Certified Public
Accountant.
During 1997, the Board of Directors met three times and acted by
unanimous consent on four occasions. The Company has standing audit and stock
option committees of the Board of Directors.
The audit committee was established in June 1996 and is currently
comprised of Mr. Bruce L. Sokoloff and Mr. Peter M. Ziemba. The function of the
audit committee is to recommend annually to the Board of Directors the
appointment of the independent auditors of the Company; review with the
independent auditors the scope of the annual audit and review their report
relating thereto; review with the independent auditors the accounting practices
and policies of the Company; review with the internal accountants and
independent auditors the overall accounting and financial controls of the
Company; be available to the independent auditors during the year for
consultation; and review related party transactions by the Company on an ongoing
basis and review potential conflicts of interest situations where appropriate.
The audit committee had two meetings in 1997.
The stock option committee of the Board of Directors is responsible for
administering the Company's 1991 Stock Option Plan ("1991 Plan"), the 1993 Stock
Option Plan ("1993 Plan") and 1996 Performance Equity Plan ("1996 Plan"), each
of which is discussed below. The stock option committee currently consists of
Mr. Jonathan L. Steinberg and Mr. Bruce L. Sokoloff. During 1997, the stock
option committee did not meet, but acted by unanimous written consent on
numerous occasions.
Executive Compensation
The following table sets forth the compensation for the past three
fiscal years ended December 31, 1997, for the Company's Chief Executive Officer
and each other executive officer whose compensation exceeded $100,000 for the
fiscal year ended December 31, 1997.
5
SUMMARY COMPENSATION TABLE
Annual Long-Term
Compensation Compensation
---------------- -------------------
Number All Other
of Compen-
Name and Principal Position Year Salary Bonus Options sation
- ---------------------------------------- ----- ------- --------- ------- ---------
1997 $230,000 -- -- --
Jonathan L. Steinberg, 1996 $160,000 -- 100,000 --
Chief Executive Officer 1995 $110,000 $200,000 80,000 --
1997 $222,927 -- 80,000 --
Robert H. Schmidt, 1996 $210,427 -- 80,000 --
President and Chief Operating Officer(1) 1995 $150,000 $150,000 80,000 --
Scot A. Rosenblum, 1997 $200,000 -- 75,000 --
Executive Vice President, Chief Financial 1996 $150,000 -- 60,000 --
Officer, Treasurer and Secretary 1995 $ 99,990 $100,000 50,000 --
Michael Kaplan, Esq. 1997 $170,000 -- 125,000 --
Vice President and General Counsel(1) 1996 $ 34,134 -- 25,000 --
- --------------------------
(1) Mr. Kaplan commenced employment in September 1996 as the General Counsel to
the Company. In May 1997, Mr. Kaplan was appointed a Vice President. Mr.
Kaplan and the Company agreed to end Mr. Kaplan's employment as of May 15,
1998 pursuant to a Severance Agreement ("Severance Agreement") under which
Mr. Kaplan will be paid $120,000 and permitted to exercise from August 15,
1998 through May 14, 1999, the options to purchase an aggregate of 50,000
shares of Common Stock that were previously granted and vested through May
9, 1998.
The Company employs Mr. Robert H. Schmidt pursuant to an employment
agreement expiring July 27, 1998, renewable for successive one-year periods
automatically, unless terminated under the notice provisions set forth in the
agreement. Mr. Schmidt's current annual base compensation is a total of
$212,500. The Company is obligated to pay for life insurance benefits for Mr.
Schmidt up to an annual premium amount of $10,000. The agreement requires Mr.
Schmidt to devote his full business time to the Company and contains a
non-competition provision for a period of one year following termination of
employment.
Mr. Jonathan L. Steinberg and Mr. Scot A. Rosenblum do not have written
employment agreements; for fiscal year 1998 they are compensated with an annual
base salary of $230,000 and $200,000, respectively.
Option Grants
The following table sets forth the stock options granted in the last
fiscal year to the Company's executive officers identified in the Summary
Compensation table above.
OPTIONS GRANTED IN LAST FISCAL YEAR
Number of % of Total Exercise
Options Options Granted Price Expiration
Name of Executive Granted to All Employees Per Share Date
- ---------------------- --------- ---------------- --------- -----------
Robert H. Schmidt(1) 80,000 15.08% $5.88 5/9/2007
Scot A. Rosenblum(2) 75,000 14.13% $5.88 5/9/2007
Michael Kaplan(3) 25,000/100,000 23.56% $7.25/$5.88 1/1/2007-
5/9/2007
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(1) The options become exercisable as to 26,667 shares of Common Stock on May
9, 1998 and 26,666 shares of Common Stock on May 4 in each of 1999 and
2000.
(2) The options become exercisable as to 25,000 shares of Common Stock on May 9
in each of 1998, 1999 and 2000.
(3) Pursuant to the Severance Agreement between Mr. Kaplan and the Company, the
options to purchase 50,000 shares of Common Stock that vested through May
9, 1998 are exercisable from August 15, 1998 through May 15, 1999. All
other options of Mr. Kaplan will terminate on May 15, 1998.
The following table sets forth the fiscal year end option values of
outstanding options at December 31, 1997 and the dollar value of unexercised,
in-the-money options for the Company's executive officers identified in the
Summary Compensation table above.
AGGREGATED FISCAL YEAR END OPTION VALUES
-----------------------------------------
Number of Securities Underlying Dollar Value of Unexercised
Unexercised Options at Fiscal Year in-the-Money Options at Year
End: End(1)
------------------------------------- -----------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---------------------- ----------- ------------- ----------- ---------------
Jonathan L. Steinberg 336,667 343,333 $354,972 $13,333
Robert H. Schmidt 421,668 218,332 $347,501 $72,099
Scot A. Rosenblum 374,413 96,250 $904,848 $36,083
Michael Kaplan(2) 25,000 125,000 $ 6,167 $30,833
========================== ======================== ======================= ===================== =====================
(1) The value of a share of Common Stock on December 31, 1997 as reported by
The Nasdaq Stock Market was $6.25.
(2) Pursuant to the Severance Agreement between Mr. Kaplan and the Company, the
options to purchase 50,000 shares of Common Stock that vested through May
9, 1998 are exercisable from August 15, 1998 through May 15, 1999. All
other options of Mr. Kaplan will terminate on May 15, 1998.
Director Compensation
Directors receive no cash compensation for their services to the
Company as directors, but are reimbursed for all reasonable costs incurred in
attending meetings of the Board of Directors. Pursuant to the 1996 Plan,
directors who are not employees of the Company receive automatic grants of stock
options upon their election or appointment as a director and upon each
re-election as a director. Each stock option is for 30,000 shares of Common
Stock and vests at the rate of 10,000 shares of Common Stock per year after an
equal period of service, and once vested, remain exercisable until the tenth
anniversary of the date of grant. Each option is exercisable per share at the
market price per share on the date of grant. Notwithstanding the foregoing, if
the director eligible for an award of a stock option is re-elected as a director
and has not yet served as a director of the Company for a term of three full
years, the award of the stock option will be modified as follows: (A) the number
of shares of Common Stock that may be acquired under the stock option will be
reduced to (1) 20,000 shares of Common Stock if the director has served as a
director more than two years, but less than three years, (2) 10,000 shares of
Common Stock if the director has served as a director more than one year, but
less than two years, and (3) if the director has served less than one year as a
director, no stock option will be awarded; and (B) the stock option will be
exercisable by the director as to 10,000 shares of Common Stock on each of the
second and third anniversaries of his re-election or re-appointment as a
director if the stock option represents the right to acquire 20,000 shares of
Common Stock and the stock option will be exercisable by the director as to
10,000 shares of Common
6
Stock on the third anniversary of his re-election or re-appointment as a
director if the stock option represents the right to acquire 10,000 shares of
Common Stock.
Mr. Peter M. Ziemba was granted an option during 1996 to acquire 30,000
shares of Common Stock at $10.50 per share, vesting at the rate of 10,000 shares
of Common Stock on June 19, 1997, 1998 and 1999, exercisable until June 19,
2006. If re-elected as a director at the Annual Meeting, Mr. Ziemba will be
granted an option to purchase up to 20,000 shares of Common Stock at the closing
sale price of the Common Stock on June 16, 1998, exercisable at the rate of
10,000 shares of Common Stock on each of June 17, 2000 and 2001.
If re-elected as a director at the Annual Meeting, Mr. Bruce L. Sokoloff
will be granted an option to purchase up to 30,000 shares of Common Stock at the
closing price of the Common Stock on June 16, 1998, exerciseable at the rate of
10,000 shares of Common Stock on each of June 17, 1999, 2000 and 2001.
Certain Transactions
WIT Capital Corporation ("WIT") advertises in the Company's publications
and on-line services and paid the Company $100,000 in fees and 250,000 shares of
the Series A Preferred Stock of WIT, at $1.00 par value per share. Mr. Robert
Schmidt is a director of WIT. As a director, Mr. Schmidt was granted an option
to acquire 30,000 shares of the capital stock of WIT, representing a beneficial
ownership interest of less than one (1%) percent.
The Company engaged Chatsworth Capital Corporation ("Chatsworth") to assist
it in developing products and revenues related to the INDI 500 index. Mr. Robert
Schmidt has an agreement with Chatsworth to receive 25% of the revenues
Chatsworth derives from referrals made by Mr. Schmidt. The Company's engagement
of Chatsworth resulted from a referral by Mr. Schmidt. Mr. Schmidt has agreed to
remit to the Company any referral fees he receives from Chatsworth as a result
of the Company's engagement of Chatsworth as long as Mr. Schmidt is employed by
the Company.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers, directors and persons who beneficially own more than ten
percent of a registered class of the Company's equity securities ("ten- percent
stockholders") to file reports of ownership and changes in ownership with the
Securities and Exchange Commission. Officers, directors and ten-percent
stockholders also are required to furnish the Company with copies of all Section
16(a) forms they file. Based solely on its review of the copies of such forms
furnished to it, and written representations that no other reports were
required, the Company believes that during the Company's fiscal year ended
December 31, 1996, all its officers, directors and ten-percent stockholders
complied with the Section 16(a) reporting requirements, except that in February
1998 Mr. Robert Schmidt filed an amendment to the December 1996 Form 4 to report
a purchase of Common Stock by his IRA in December 1996.
Stock Option Plans
1991 Plan
In September 1991, the Company adopted the 1991 Plan covering 200,000
shares of the Company's Common Stock pursuant to which officers, directors, and
key employees of the Company are eligible to receive incentive or non-qualified
stock options. The 1991 Plan, which expires in October 2001, is administered by
the Stock Option Committee of the Board of Directors pursuant to the powers
delegated to it by the Board of Directors. To the extent permitted under the
express provisions of the 1991 Plan, the Stock Option Committee has authority to
determine the selection of participants, allotment of shares, price, and other
conditions of purchase of options and administration of the 1991 Plan in order
to attract and retain persons instrumental to the success of the Company. There
are options outstanding under the 1991 Plan for 180,000 shares of Common Stock,
and options for 11,000 shares of Common Stock have been exercised.
7
1993 Plan
In February 1993, the Company adopted the 1993 Plan covering 500,000 shares
of the Company's Common Stock pursuant to which officers, directors, key
employees and consultants of the Company are eligible to receive incentive or
non-qualified stock options, stock appreciation rights, restricted stock awards,
deferred stock, stock reload options and other stock based awards. The 1993 Plan
will terminate at such time no further awards may be granted and awards granted
are no longer outstanding, provided that incentive options may only be granted
until February 16, 2003. The 1993 Plan is administered by the Stock Option
Committee pursuant to the powers delegated to it by the Board of Directors. To
the extent permitted under the provisions of the 1993 Plan, the Stock Option
Committee has authority to determine the selection of participants, allotment of
shares, price, and other conditions of purchase of awards and administration of
the 1993 Plan in order to attract and retain persons instrumental to the success
of the Company. There are options outstanding under the 1993 Plan for 280,351
shares of Common Stock, and options for 121,543 shares have been exercised.
1996 Plan
In 1996, the Company adopted the 1996 Plan covering 1,000,000 shares of the
Company's Common Stock pursuant to which officers, directors, key employees and
consultants of the Company are eligible to receive incentive or non-qualified
stock options, stock appreciation rights, restricted stock awards, deferred
stock, stock reload options and other stock based awards. The 1996 Plan will
terminate at such time no further awards may be granted and awards granted are
no longer outstanding, provided that incentive options may only be granted until
March 18, 2006. The 1996 Plan is administered by the Stock Option Committee
pursuant to the powers delegated to it by the Board of Directors. To the extent
permitted under the provisions of the 1996 Plan, the Stock Option Committee has
authority to determine the selection of participants, allotment of shares,
price, and other conditions of purchase of awards and administration of the 1996
Plan in order to attract and retain persons instrumental to the success of the
Company. There are options outstanding under the 1996 Plan for 517,700 shares of
Common Stock and options for 2,000 shares have been exercised.
Management Plan
In November 1996, the Company adopted the 1996 Management Incentive Plan
("Management Incentive Plan") covering 500,000 shares of the Company's Common
Stock, pursuant to which executives of the Company or its subsidiaries are
eligible to receive incentive or non-qualified stock options, stock appreciation
rights, restricted stock awards, deferred stock, stock related options and other
stock based awards. The Management Incentive Plan will terminate at such time no
further awards may be granted and awards granted are no longer outstanding,
provided that incentive options may only be granted until November 4, 2006. The
Management Incentive Plan is administered by the Board of Directors. Pursuant to
the Management Incentive Plan, the Board of Directors has authority to determine
the selection of participants, allotment of shares, price and other conditions
of purchase of awards and administration of the Management Incentive Plan. There
are options outstanding under the Management Incentive Plan for 495,000 shares
of Common Stock.
INDEPENDENT AUDITORS
The Company has selected Deloitte & Touche LLP as its independent
auditors for the year ending December 31, 1998. A representative of Deloitte &
Touche LLP is expected to be present at the meeting with an opportunity to make
a statement if the representative desires to do so and is expected to be
available to respond to appropriate questions from stockholders.
SOLICITATION OF PROXIES
The solicitation of proxies in the enclosed form is made on behalf of the
Company and the cost of this solicitation is being paid by the Company. In
addition to the use of the mails, proxies may be solicited personally or by
telephone or telegraph using the services of directors, officers and regular
8
employees of the Company at nominal cost. Banks, brokerage firms and other
custodians, nominees and fiduciaries will be reimbursed by the Company for
expenses incurred in sending proxy material to beneficial owners of the Common
Stock.
1999 STOCKHOLDER PROPOSALS
In order for any Stockholder Proposal for the 1999 Annual Meeting of
Stockholders to be eligible for inclusion in the Company's Proxy Statement, it
must be received by the Company at its principal executive offices by January 6,
1999.
OTHER MATTERS
The Board of Directors knows of no matter which will be presented for
consideration at the Annual Meeting other than the matters referred to in this
Proxy Statement. Should any other matter properly come before the Annual
Meeting, it is the intention of the persons named in the accompanying proxy to
vote such proxy in accordance with their best judgment.
By Order of the Board of Directors
Scot A. Rosenblum
Secretary
New York, New York
May 6, 1998
9
INDIVIDUAL INVESTOR GROUP, INC. - PROXY
Solicited by the Board of Directors
for Annual Meeting to be held on June 17, 1998
P The undersigned Stockholder(s) of INDIVIDUAL INVESTOR GROUP, INC., a
Delaware corporation ("Company"), hereby appoints Jonathan L. Steinberg and
Scot A. Rosenblum, or either of them, with full power of substitution and
to act without the other, as the agents, attorneys and proxies of the
R undersigned, to vote the shares standing in the name of the undersigned at
the Annual Meeting of Stockholders of the Company to be held on June 17,
1998 and at all adjournments thereof. This proxy will be voted in
accordance with the instructions given below. If no instructions are given,
O this proxy will be voted FOR all of the following proposals.
1. Election of the following Directors:
X
FOR all nominees listed below, except WITHHOLD AUTHORITY to vote
as marked to the contrary below |_| for all nominees listed below
Y |_|
Bruce L. Sokoloff and Peter M. Ziemba
INSTRUCTIONS: To withhold authority to vote for any individual nominee,
write that nominee's name in the space below.
-------------------------------------
2. In their discretion, the proxies are authorized to vote upon
such other business as may come before the meeting or any
adjournment thereof.
|_| I plan to attend the Annual Meeting.
Date _______________________, 1998
__________________________________
Signature
__________________________________
Signature if held jointly
Please sign exactly as name appears above. When shares are
held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name
by authorized person.