<PAGE>   1

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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                                   FORM 10-Q
                                  3RD QUARTER

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

               FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999

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

                        COMMISSION FILE NUMBER 000-24769

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

                          CLARK/BARDES HOLDINGS, INC.
             (Exact Name of Registrant as Specified in its Charter)

<TABLE>
<S>                                            <C>
                   DELAWARE                                      52-2103926
            (State Incorporation)                 (I.R.S. Employer Identification Number)
    102 SOUTH WYNSTONE PARK DR., SUITE 200
       NORTH BARRINGTON, ILLINOIS 60010                        (847) 304-5800
   (Address of Principal Executive Offices)           (Registrant's Telephone Number)
</TABLE>

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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 [ ]

     The number of shares outstanding of the registrant's common stock, all of
which comprise a single class with a $0.01 par value, as of September 30, 1999,
the latest practicable date, was 9,629,999.

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<PAGE>   2

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                               PAGE
                                                               ----
<S>                                                            <C>
PART I. -- FINANCIAL INFORMATION

Item 1. Financial Statements................................     3

     Condensed Consolidated Balance Sheets at September 30,
      1999 and December 31, 1998............................     3
     Condensed Consolidated Statements of Income for the
      three months and nine months ended September 30, 1999
      and 1998..............................................     4
     Condensed Consolidated Statements of Cash Flows for the
      three months and nine months ended September 30, 1999
      and 1998..............................................     5
     Notes to Condensed Consolidated Financial Statements...     6

Item 2. Management's Discussion and Analysis of Financial
  Condition and Results
  of Operations.............................................    13

Item 3. Quantitative and Qualitative Disclosures About
  Market Risk...............................................    29

PART II. -- OTHER INFORMATION

Item 4. Exhibits and Reports on Form 8-K....................    30
SIGNATURES..................................................    36
EXHIBITS
  Index to Exhibits.........................................    37
</TABLE>

                                        2
<PAGE>   3

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                   CLARK/BARDES HOLDINGS, INC. AND SUBSIDIARY
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                   UNAUDITED
                   DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS

                                     ASSETS

<TABLE>
<CAPTION>
                                                              SEPTEMBER 30,   DECEMBER 31,
                                                                  1999            1998
                                                              -------------   ------------
<S>                                                           <C>             <C>
Current Assets
  Cash and cash equivalents.................................    $  3,405        $12,102
  Accounts and notes receivable -- net......................      10,051          8,076
  Other current assets......................................         902             59
                                                                --------        -------
                                                                  14,358         20,237
Equipment and Leasehold Improvements -- net.................       6,499          1,178
Intangible Assets -- net....................................      95,481         45,209
Deferred Tax Asset..........................................          55            607
Other Assets................................................         959            262
                                                                --------        -------
          Total Assets......................................    $117,352        $67,493
                                                                ========        =======

                           LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
  Accounts payable..........................................    $  2,893        $ 2,925
  Commissions and fees......................................       4,061          2,634
  Income taxes..............................................         726            528
  Accrued liabilities.......................................       6,417          2,651
  Current portion of long term debt.........................       7,087          4,344
                                                                --------        -------
                                                                  21,184         13,082
Long Term Debt..............................................      38,689         24,713
  Stockholders' Equity
     Preferred stock
       Authorized -- 1,000,000 shares; $.01 par value.......
       None issued..........................................
     Common stock...........................................          96             82
       Authorized -- 20,000,000 shares; $.01 par value......
       Issued and outstanding --
       8,202,535 at December 31, 1998.......................
       9,629,999 at September 30, 1999......................
Paid in capital.............................................      50,098         26,274
Retained earnings...........................................       7,285          3,342
                                                                --------        -------
          Total Stockholders' Equity........................      57,479         29,698
                                                                --------        -------
          Total Liabilities and Stockholders' Equity........    $117,352        $67,493
                                                                ========        =======
</TABLE>

            See Notes to Condensed Consolidated Financial Statements

                                        3
<PAGE>   4

                   CLARK/BARDES HOLDINGS, INC. AND SUBSIDIARY

                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   UNAUDITED
                   DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS

<TABLE>
<CAPTION>
                                                 THREE MONTHS ENDED         NINE MONTHS ENDED
                                                    SEPTEMBER 30,             SEPTEMBER 30,
                                               -----------------------   -----------------------
                                                  1999         1998         1999         1998
                                               ----------   ----------   ----------   ----------
<S>                                            <C>          <C>          <C>          <C>
Total Revenue................................  $   25,655   $   17,641   $   79,431   $   46,626
Commission and fee expense...................      10,456       11,052       37,672       29,255
                                               ----------   ----------   ----------   ----------
          Gross Profit.......................      15,199        6,589       41,759       17,371
                                               ----------   ----------   ----------   ----------
Operating Expenses
  General and administrative.................      11,332        4,613       29,789       13,022
  Amortization...............................       1,237          356        3,009          798
  Put warrants (non-recurring)...............          --         (500)          --        4,800
                                               ----------   ----------   ----------   ----------
                                                   12,569        4,469       32,798       18,620
                                               ----------   ----------   ----------   ----------
          Operating Income (Loss)............       2,630        2,120        8,961       (1,249)
Interest
  Income.....................................         133          220          291          388
  Expense....................................        (923)        (764)      (2,500)      (2,568)
                                               ----------   ----------   ----------   ----------
Income (Loss) before Income Taxes............       1,840        1,576        6,752       (3,429)
Income Taxes.................................         804         (806)       2,809         (801)
                                               ----------   ----------   ----------   ----------
          Net Income (Loss)..................  $    1,036   $    2,382   $    3,943   $   (2,628)
                                               ==========   ==========   ==========   ==========
Basic Net Income (Loss) Per Common Share
  Net Income (Loss)..........................  $     0.11   $     0.44   $     0.44   $    (0.66)
                                               ==========   ==========   ==========   ==========
  Weighted Average Shares....................   9,629,157    5,407,503    8,891,628    3,958,602
                                               ==========   ==========   ==========   ==========
Diluted Net Income (Loss) Per Common Share
  Net Income (Loss)..........................  $     0.11   $     0.39   $     0.43   $    (0.66)
                                               ==========   ==========   ==========   ==========
  Weighted Average Shares....................   9,865,535    6,156,926    9,118,669    3,958,602
                                               ==========   ==========   ==========   ==========
Dividends Per Share..........................  $       --   $     0.69   $       --   $     0.82
                                               ==========   ==========   ==========   ==========
</TABLE>

            See Notes to Condensed Consolidated Financial Statements

                                        4
<PAGE>   5

                   CLARK/BARDES HOLDINGS, INC. AND SUBSIDIARY

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   UNAUDITED
                   DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS

<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED     NINE MONTHS ENDED
                                                        SEPTEMBER 30,         SEPTEMBER 30,
                                                     -------------------   -------------------
                                                       1999       1998       1999       1998
                                                     --------   --------   --------   --------
<S>                                                  <C>        <C>        <C>        <C>
Cash From Operating Activities -- Net..............  $  2,617   $ (1,730)  $ 10,609   $  4,013
Investing Activities
  Purchases of businesses..........................   (14,795)   (14,835)   (53,289)   (16,335)
  Purchases of equipment...........................    (3,703)      (267)    (5,880)      (333)
  Other............................................       329          9       (622)        98
                                                     --------   --------   --------   --------
                                                      (18,169)   (15,093)   (59,791)   (16,570)
                                                     --------   --------   --------   --------
Financing Activities
  Proceeds from borrowings.........................    15,492      2,000     68,216      2,000
  Repayment of borrowings..........................    (7,962)    (7,478)   (51,497)    (8,928)
  Proceeds from issuance of common stock...........     1,125     34,897     23,766     35,198
  Dividends........................................        --     (3,246)        --     (3,680)
  Other............................................        --        269         --        108
                                                     --------   --------   --------   --------
                                                        8,655     26,442     40,485     24,698
                                                     --------   --------   --------   --------
Increase (Decrease) in Cash and Cash Equivalents...    (6,897)     9,619     (8,697)    12,141
Cash and Cash Equivalents, Beginning of Period.....    10,302      6,305     12,102      3,783
                                                     --------   --------   --------   --------
Cash and Cash Equivalents, End of Period...........  $  3,405   $ 15,924   $  3,405   $ 15,924
                                                     ========   ========   ========   ========
</TABLE>

            See Notes to Condensed Consolidated Financial Statements

                                        5
<PAGE>   6

                   CLARK/BARDES HOLDINGS, INC. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   UNAUDITED

1. NATURE OF OPERATIONS, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF
   PRESENTATION

     The consolidated financial statements include the accounts of Clark/Bardes
Holdings, Inc. (CBH) and its wholly-owned subsidiary, Clark/Bardes, Inc. (CBI).
Though its three operating divisions; Clark/Bardes, Bank Compensation Strategies
and HealthCare Compensation Strategies (formerly MCG HealthCare), CBI designs,
markets and administers life insurance products, compensation, and benefit
programs to U. S. corporations, banks and healthcare organizations. CBI assists
its clients in using customized life insurance products to generate capital to
finance long-term benefit liabilities and to supplement and secure benefits for
key employees. In addition, CBI provides long-term administrative services for
executive benefits and insurance and provides compensation consulting services.

     The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments, including
normal recurring accruals, considered necessary for a fair presentation have
been included. Operating results for the three and nine month periods ended
September 30, 1999, are not necessarily indicative of the results that may be
expected for the year ended December 31, 1999.

     The balance sheet at December 31, 1998 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.

     For further information, refer to the consolidated financial statements and
footnotes thereto included in the Registrant Company and Subsidiaries annual
report on Form 10-K for the year ended December 31, 1998.

2. ACQUISITION OF THE WAMBERG ORGANIZATION AND WAMBERG FINANCIAL CORPORATION

     On September 1, 1999, CBI purchased certain assets and assumed certain
liabilities of The Wamberg Organization and purchased all of the outstanding
stock of Wamberg Financial Corporation for a purchase price of $18.0 million
consisting of:

          (i) a cash payment to The Wamberg Organization of $12.0 million;

          (ii) a cash payment to W.T. Wamberg of $50,000 for his shares of
     Wamberg Financial Corporation;

          (iii) a direct payment of $1.5 million for two outstanding loans;

          (iv) assumption of approximately $4.3 million of liabilities including
     a $3.8 million note for the purchase of a corporate aircraft;

          (v) expenses of approximately $173,000.

     In addition, the asset purchase agreement provides for the payment of an
additional $11.9 million upon the attainment of certain stipulated annual
financial objectives starting with the period ended December 31, 1999 through
December 31, 2002. The $13.8 million cash portion of the purchase price came
from CBI's existing cash balances.

                                        6
<PAGE>   7
                   CLARK/BARDES HOLDINGS, INC. AND SUBSIDIARY

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The sole shareholder of The Wamberg Organization and Wamberg Financial
Corporation was W.T. Wamberg, Chairman of CBI and Clark/Bardes Holdings, Inc.
The Wamberg Organization has historically been CBI's largest single producer,
accounting for 17.5% of revenue in 1998 and 23.2% for the six month period ended
June 30, 1999. Upon consummation of the acquisitions, Mr. Wamberg became
president and chief executive officer of Clark/Bardes Holdings, Inc.

     The assets acquired include receivables, equipment, intangibles,
intellectual property, customer and supplier lists, insurance, and all rights
under existing contracts, leases, agreements and permits. Wamberg Financial
Corporation was principally engaged in leasing an airplane to The Wamberg
Organization. Because of the timing of this purchase, CBI has not definitively
determined the allocation of the purchase price.

     Because of the relationship between The Wamberg Organization, Wamberg
Financial Corporation, W.T. Wamberg and CBI, the CBH board of directors
appointed a special committee comprised of independent, non-employee directors
to negotiate and review the terms of this transaction. The special committee
received a fairness opinion with respect to the acquisition and after analyzing
the matter and considering all relevant issues, recommended that the full board
approve the transaction.

     The Wamberg Organization leases its 11,085 square feet of office space from
an entity controlled by Mr. Wamberg for an annual rental of $150,000, under a
lease expiring on February 21, 2009.

     On January 4, 1999, CBI purchased the right to receive approximately 27.5%
of the commission and fee revenue, prior to deduction of servicing costs,
related to renewal revenue of certain inforce policies existing on June 30,
1998, due under the Principal Office agreement with W. T. Wamberg and The
Wamberg Organization, for a cash payment of $7.5 million. Concurrent with the
acquisition of The Wamberg Organization, CBI purchased all of the renewal
revenue not acquired on January 4, 1999. In accordance with the asset purchase
agreement, all renewal revenue acquired as of September 1, 1999, remaining
inforce on December 31, 2018, will revert to Mr. Wamberg.

     The acquisition of The Wamberg Organization and Wamberg Financial
Corporation will be accounted for as a purchase. The unaudited pro forma
information below presents our results of operations and those of The Wamberg
Organization and Wamberg Financial Corporation as if the acquisition occurred on
January 1, 1998.

<TABLE>
<CAPTION>
                                                 THREE MONTHS ENDED    NINE MONTHS ENDED
                                                    SEPTEMBER 30,        SEPTEMBER 30,
                                                 -------------------   -----------------
                                                   1999       1998      1999      1998
                                                 --------   --------   -------   -------
                                                             (IN THOUSANDS)
<S>                                              <C>        <C>        <C>       <C>
Pro forma:
  Revenues.....................................  $27,246    $19,828    $87,058   $55,910
  Net income (loss)............................    1,059      2,442      4,514      (409)
  Diluted earnings (loss) per share............      .11        .38        .49      (.10)
</TABLE>

3. ACQUISITION OF NATIONAL INSTITUTE FOR COMMUNITY BANKING

     On May 18, 1999, CBH acquired all of the issued and outstanding capital
stock of National Institute for Community Banking (NICB) by merging it with and
into CBH. Each share of NICB common stock was converted into CBH common stock on
a ratio of 39.7 of CBH for each share of NICB for a total of 484,303 shares of
CBH common stock. By agreement, the effective date of the NICB acquisition was
January 1, 1999. The acquisition of NICB has been accounted for as a purchase.

     Of the total, 99,851 shares were issued at the closing and 384,452 shares
are issuable upon attaining stipulated revenue and income goals over the four
year period 1999 to 2002. No other consideration was given. The value of the
shares received by the selling shareholders was $1.6 million based on CBH's
closing price of

                                        7
<PAGE>   8
                   CLARK/BARDES HOLDINGS, INC. AND SUBSIDIARY

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

$16 on May 18, 1999. Any shares issued will be accounted for as additional
consideration based on their value at the time of issuance.

4. ACQUISITION OF MCG/HEALTHCARE

     On April 5, 1999, CBI purchased the assets and business and assumed certain
liabilities of Phynque, Inc., d/b/a Management Compensation Group/HealthCare, a
Minnesota corporation, for a purchase price of $35.9 million consisting of:

          (i) a cash payment of $13.8 million;

          (ii) a promissory note for $8.7 million;

          (iii) 326,363 shares of common stock, having an aggregate value of
     $5.3 million based on the closing price of the common stock on April 5,
     1999;

          (iv) the direct payment of $3.6 million thousand for certain
     outstanding loans;

          (v) the assumption of $4.2 million of liabilities and $310,000 of
     closing costs.

     The purchase price was determined by an arm's length negotiation among the
parties. The assets acquired include cash, receivables and equipment in addition
to all intangible assets, intellectual property, files pertaining to customers,
computer software and systems and related licenses. The liabilities assumed
include commissions payable, accrued employee benefits and operating expenses.
The $17.4 million cash portion of the purchase price was funded by a borrowing
under CBI's credit facility. The promissory note is payable in thirty-two equal
quarterly installments of principal and interest at 10% per annum of $430,000
commencing on April 5, 2000. The promissory note is secured by a personal
guarantee of W.T. Wamberg, Chairman of Clark/ Bardes. Closing costs and fees
connected with the transaction are estimated to be approximately $500,000.

     MCG/HealthCare is a 180 employee executive benefit consulting organization
servicing the healthcare industry. MCG/HealthCare is headquartered in
Minneapolis, Minnesota. Prior to the acquisition described above, there was no
material relationship between CBI and MCG/HealthCare.

     The acquisition of MCG/HealthCare has been accounted for as a purchase. The
unaudited pro forma information below presents the results of CBI and
MCG/HealthCare as if the acquisition had occurred on January 1, 1998:

<TABLE>
<CAPTION>
                                                 THREE MONTHS ENDED    NINE MONTHS ENDED
                                                    SEPTEMBER 30,        SEPTEMBER 30,
                                                 -------------------   -----------------
                                                   1999       1998      1999      1998
                                                 --------   --------   -------   -------
                                                             (IN THOUSANDS)
<S>                                              <C>        <C>        <C>       <C>
Pro forma:
  Revenues.....................................  $25,655    $25,098    $85,188   $67,396
  Net income (loss)............................    1,036      2,113      4,328    (3,066)
  Diluted earnings (loss) per share............      .11        .33        .47     (0.72)
</TABLE>

5. ACQUISITION OF SCHOENKE

     On September 1, 1998 CBI acquired substantially all of the assets and
business of Schoenke & Associates Corporation and Schoenke & Associates
Securities Corporation, based in Germantown, Maryland. The Schoenke companies
specialize in designing and administering benefit programs for companies. CBI
accounted for the acquisition as a purchase and has included the operating
results of the Schoenke Companies in the financial statements commencing from
the acquisition date.

                                        8
<PAGE>   9
                   CLARK/BARDES HOLDINGS, INC. AND SUBSIDIARY

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The purchase price was $17.0 million plus related expenses of approximately
$98,000. The purchase price was comprised of $15.0 million in cash and a
promissory note in the principal amount of $2.0 million. CBI allocated
approximately $768,000 of the purchase price to tangible assets acquired and the
remaining $16.2 million was allocated to the net present value of estimated
future profits embedded in the existing inforce book of business.

     The unaudited pro forma information below presents the results of CBI and
Schoenke combined as if the acquisition had occurred January 1, 1998.

<TABLE>
<CAPTION>
                                                 THREE MONTHS ENDED    NINE MONTHS ENDED
                                                    SEPTEMBER 30,        SEPTEMBER 30,
                                                 -------------------   -----------------
                                                   1999       1998      1999      1998
                                                 --------   --------   -------   -------
                                                             (IN THOUSANDS)
<S>                                              <C>        <C>        <C>       <C>
Pro forma:
  Revenues.....................................  $25,655    $18,992    $79,431   $51,510
  Net income (loss)............................    1,036      2,739      3,943    (2,476)
  Diluted earnings (loss) per share............      .11        .42        .43      (.58)
</TABLE>

6. PRIVATE PLACEMENT

     On June 7, 1999, CBH sold 1,000,000 shares of common stock to Conning
Insurance Capital Partnership V, L. P. for $17 million in a private placement
transaction. The proceeds from this sale was used for debt reduction and
acquisitions.

7. CREDIT FACILITY

     In January 1999, CBI negotiated a $65 million senior credit facility and
issued $25 million of floating rate debt fixed for the first year at 7.08%, (the
one-year London InterBank Offered Rate plus 2%) under that facility. Principal
and interest are payable quarterly beginning March 31, 1999. The $25 million
proceeds was used to retire existing long term debt. The credit facility
contains certain restrictive covenants requiring mandatory prepayments under
certain conditions, financial reporting and compliance certificates, maintenance
of financial ratios, restrictions on guarantees and additional indebtedness,
limitations on mergers and acquisitions, prohibition of cash dividends,
limitation on investments, loans, and advances, and changes in control.

     Coincident with the credit facility and floating rate agreement, CBI has
entered into two interest rate swap agreements with a bank affiliated with the
lending group to fix the interest rates. The first agreement went into effect on
July 6, 1999 and fixes the interest rate at 5.76% on $15 million of the debt.
The second agreement will go into effect on January 18, 2000 and fixes the rate
at 5.29% on $15 million of the debt.

     CBI incurred $400,000 of costs in connection with the refinancing. These
costs have been capitalized and are reflected in Other Assets in the balance
sheet at September 30, 1999 and are being amortized over the life of the credit
facility.

8. SEGMENT INFORMATION (IN THOUSANDS)

<TABLE>
<CAPTION>
                                         THREE MONTHS ENDED SEPTEMBER 30, 1999
                           -----------------------------------------------------------------
                                         BANK           CLARK/        HEALTHCARE
                           CLARK/    COMPENSATION     BARDES OF      COMPENSATION
                           BARDES     STRATEGIES    WASHINGTON, DC    STRATEGIES     TOTAL
                           -------   ------------   --------------   ------------   --------
<S>                        <C>       <C>            <C>              <C>            <C>
Revenues from External
Clients..................  $11,090     $ 7,002         $ 1,467         $ 6,096      $ 25,655
Segment Profit...........    2,197         522             118             876         3,713
Segment Assets...........   39,150      27,849          15,610          34,688       117,297
</TABLE>

                                        9
<PAGE>   10
                   CLARK/BARDES HOLDINGS, INC. AND SUBSIDIARY

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
                                         THREE MONTHS ENDED SEPTEMBER 30, 1998
                           -----------------------------------------------------------------
                                         BANK           CLARK/        HEALTHCARE
                           CLARK/    COMPENSATION     BARDES OF      COMPENSATION
                           BARDES     STRATEGIES    WASHINGTON, DC    STRATEGIES     TOTAL
                           -------   ------------   --------------   ------------   --------
<S>                        <C>       <C>            <C>              <C>            <C>
Revenues from External
Clients..................  $ 9,860     $ 7,454         $   327         $    --      $ 17,641
Segment Profit...........      653         851             115              --         1,619
Segment Assets...........   16,148      26,209          18,484              --        60,841
</TABLE>

<TABLE>
<CAPTION>
                                         NINE MONTHS ENDED SEPTEMBER 30, 1999
                           -----------------------------------------------------------------
                                         BANK           CLARK/        HEALTHCARE
                           CLARK/    COMPENSATION     BARDES OF      COMPENSATION
                           BARDES     STRATEGIES    WASHINGTON, DC    STRATEGIES     TOTAL
                           -------   ------------   --------------   ------------   --------
<S>                        <C>       <C>            <C>              <C>            <C>
Revenues from External
Clients..................  $42,967     $20,266         $ 4,200         $11,998      $ 79,431
Segment Profit...........    7,751       1,538             879           1,505        11,673
Segment Assets...........   39,150      27,849          15,610          34,688       117,297
</TABLE>

<TABLE>
<CAPTION>
                                         NINE MONTHS ENDED SEPTEMBER 30, 1998
                           -----------------------------------------------------------------
                                         BANK           CLARK/        HEALTHCARE
                           CLARK/    COMPENSATION     BARDES OF      COMPENSATION
                           BARDES     STRATEGIES    WASHINGTON, DC    STRATEGIES     TOTAL
                           -------   ------------   --------------   ------------   --------
<S>                        <C>       <C>            <C>              <C>            <C>
Revenues from External
Clients..................  $27,048     $19,251         $   327         $    --      $ 46,626
Segment Profit...........    1,261       2,175             115              --         3,551
Segment Assets...........   16,148      26,209          18,484              --        60,841
</TABLE>

     A reconciliation of total external revenues for reportable segments to
total consolidated revenues and total segment profits (loss) to consolidated
income (loss) before taxes is as follows:

<TABLE>
<CAPTION>
                                              THREE MONTHS ENDED    NINE MONTHS ENDED
                                                SEPTEMBER 30,         SEPTEMBER 30,
                                              ------------------    ------------------
                                               1999       1998       1999       1998
                                              -------    -------    -------    -------
                                                           (IN THOUSANDS)
<S>                                           <C>        <C>        <C>        <C>
REVENUES
Total external revenues for reportable
  segments..................................  $25,655    $17,641    $79,431    $46,626
                                              =======    =======    =======    =======
Total consolidated revenues.................  $25,655    $17,641    $79,431    $46,626
PROFIT (LOSS)
Total profit (loss) for reportable
  segments..................................  $ 3,713    $ 1,619    $11,673    $ 3,551
Unallocated amounts
  Corporate overhead........................   (1,083)        --     (2,712)        --
  Put warrants (non-recurring)..............       --        500         --     (4,800)
  Interest -- net...........................     (790)      (543)    (2,209)    (2,180)
                                              -------    -------    -------    -------
  Income (loss) before taxes................  $ 1,840    $ 1,579    $ 6,752    $(3,429)
                                              =======    =======    =======    =======
</TABLE>

                                       10
<PAGE>   11
                   CLARK/BARDES HOLDINGS, INC. AND SUBSIDIARY

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     A reconciliation of total assets for reportable segments with total
consolidated assets at September 30, 1999, and December 31, 1998, is as follows:

<TABLE>
<CAPTION>
                                                             SEPTEMBER 30,    DECEMBER 31,
                                                                 1999             1998
                                                             -------------    ------------
<S>                                                          <C>              <C>
Total assets...............................................    $117,297         $66,886
Deferred tax asset.........................................          55             607
                                                               --------         -------
                                                               $117,352         $67,493
                                                               ========         =======
</TABLE>

9. EARNINGS PER SHARE

     The following table is a reconciliation of the numerators and denominators
used in computing earnings per share.

<TABLE>
<CAPTION>
                                                 THREE MONTHS ENDED     NINE MONTHS ENDED
                                                 SEPTEMBER 30, 1999    SEPTEMBER 30, 1999
                                                 ------------------    -------------------
                                                  1999       1998       1999        1998
                                                 -------    -------    -------    --------
                                                              (IN THOUSANDS)
<S>                                              <C>        <C>        <C>        <C>
NUMERATOR
Net income (loss) for basic earnings per
  share........................................  $1,036     $2,382     $3,943     $(2,628)
Effect of dilutive securities:
  Interest on convertible debt (net of tax)....      --         40         --          --
                                                 ------     ------     ------     -------
Numerator for diluted earnings per share.......  $1,036     $2,422     $3,943     $(2,628)
DENOMINATOR
Denominator for basic earning per share --
  weighted average shares......................   9,629      5,408      8,892       3,959
Effect of dilutive securities:
  Stock options................................     236        221        227
  Convertible debt.............................      --        528         --          --
                                                 ------     ------     ------     -------
Denominator for diluted earnings per share --
  weighted average shares -- diluted...........   9,865      6,157      9,119       3,959
                                                 ======     ======     ======     =======
PER SHARE
Basic earnings (loss)..........................  $ 0.11     $ 0.44     $ 0.44     $ (0.66)
                                                 ======     ======     ======     =======
Diluted earnings (loss)........................  $ 0.11     $ 0.39     $ 0.43     $ (0.66)
                                                 ======     ======     ======     =======
</TABLE>

     The effects of options and convertible debt have been excluded from the
calculations of diluted earnings per share for the nine months ended September
30, 1998 as such effects would have been antidilutive.

10. SIGNIFICANT RISKS AND UNCERTAINTIES

     Federal tax laws create certain advantages for the purchase of life
insurance products by individuals and corporations; therefore the life insurance
products underlying the benefit programs marketed by the Company are vulnerable
to adverse changes in tax legislation. Amendments to the federal tax laws
enacted in 1996 and 1997 have reduced the advantages of certain purchases of
business-owned life insurance. With limited exceptions, the 1996 amendment
eliminated the ability to deduct interest on loans against the cash value of
life insurance policies. In 1997, legislation imposed an interest deduction
disallowance that applied to all business-owned life insurance except for
policies placed on employees, officers, directors and 20 percent owners.

                                       11
<PAGE>   12
                   CLARK/BARDES HOLDINGS, INC. AND SUBSIDIARY

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     In recent federal budget proposals, certain provisions have been offered to
expand the disallowance rule to policies covering employees, officers and
directors. If such proposals are enacted, it would significantly reduce the
attractiveness of business-owned life insurance to companies that traditionally
have high debt/equity ratios, such as banks. While CBI believes there is
inadequate support in Congress at this time to enact such a change, CBI is
unable to predict the outcome of any such legislative proposal by the current or
any future Congress. CBI believes, at the very least, any such proposal would
fully grandfather existing business.

     On October 19, 1999, the United States Tax Court ruled that a domestic
corporation was not entitled to deduct fees and interest on policy loans from a
leveraged corporate-owned life insurance program. Although CBI stopped marketing
leveraged COLI programs in June 1997, management is continuing to evaluate the
impact of this decision, which remains subject to appeal. Nevertheless, this
development may cause some current holders of leveraged COLI policies to elect
to surrender their policies, which would reduce the amount of commissions that
CBH would realize from the total pool of leveraged COLI policies.

     One of CBI's carriers, General American Life Insurance Company, was placed
under rehabilitation (a form of receivership) by the State of Missouri as the
result of a liquidity impairment. General American has entered into an agreement
to be acquired by Metropolitan Life Insurance Company. The acquisition by
Metlife and the reorganization plan to resolve General American's liquidity
problem await approval by Missouri regulators. During General American's
rehabilitation period, holders of General American policies may not realize the
full values of their policies and CBI may be forced to accept less favorable
renewal commission terms with another insurance carrier in order for the
insurance carrier to assume the policies. In addition, these events could cause
a slowdown in new sales of programs which are financed by policies underwritten
by other insurance companies, or CBI's persistency rate could be adversely
affected by more clients choosing to surrender their policies. Management
believes that General American's pending acquisition by Metropolitan Life is
likely to occur and that policyholders will be adequately protected throughout
the rehabilitation and acquisition. As a result, the Company believes the
General American rehabilitation and acquisition will have little, if any,
negative on the Company" current or future business.

                                       12
<PAGE>   13

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS
        (Tables shown in Dollars in Thousands, Except Per Share Amounts)

OVERVIEW

     We reported net income of $1.0 million, or $.11 per diluted share, for the
third quarter of 1999, and net income of $3.9 million, or $.43 per diluted
share, for the nine month period ended September 30, 1999. In 1998, we reported
net income of $2.4 million, or $.39 per diluted share, for the third quarter and
a loss of $2.6 million, or $.66 per diluted share for the nine month period
ended September 30, 1998.

     Our results for the nine month period ended September 30, 1998, were
adversely impacted by a non-recurring operating charge of $4.8 million to
reflect a fair value adjustment for put warrants previously issued to some of
our note holders. These warrants were redeemed in the third quarter of 1998 for
$4.8 million. Had this $4.8 million, non-tax deductible, charge not occurred,
net income for the nine months ended September 30, 1998, would have been $2.2
million, or $.55 per diluted share

ACQUISITIONS

     Our acquisition program remains unchanged since it began with the purchase
of Bank Compensation Strategies in September 1997. We seek to acquire
compatible, well managed and growing companies that will provide either an entry
into a new and expanding market, as did BCS and HealthCare Compensation
Strategies or add to existing business as did Schoenke and NICB.

     The companies we acquire are typically privately owned and structured as S
corporations where all of the income is passed on to the shareholders with very
little retained in the company itself. Accordingly, our evaluation focus is on
the quality of the management and future earnings and growth potential with the
financial asset values embedded in a strong book of renewal business that will
be realized for many years after the acquisition takes place.

  The Wamberg Organization and Wamberg Financial Corporation

     On September 1, 1999, we acquired substantially all the assets and assumed
certain liabilities of The Wamberg Organization, whose sole shareholder was W.
T. Wamberg, and purchased all of the outstanding stock of Wamberg Financial
Corporation, whose sole shareholder was W. T. Wamberg. We acquired certain
operating assets, all of the remaining renewal commission not already acquired
and some liabilities, principally accounts payable and employee benefits, of The
Wamberg Organization. In addition, we acquired all of the outstanding common
stock of Wamberg Financial Corporation which owns an airplane and related debt
of approximately $3.8 million and is engaged in leasing the airplane solely to
The Wamberg Organization. The assets acquired under the purchase agreement
include receivables; equipment; intangible assets; intellectual property;
customer and supplier lists; insurance; and all rights under existing contracts,
leases, agreements and permits. Because of the timing and complexity of the
transactions, CBI has not definitively allocated the purchase price to the
acquired asset.

     The Wamberg Organization has historically produced our largest volume of
revenue -- 17.5% of total revenue in 1998 and 23.2% to June 30, 1999. In light
of the relationship between The Wamberg Organization, Wamberg Financial
Corporation, W. T. Wamberg and us, our board appointed a special committee of
the board of directors comprised of independent, non-employee directors to
review the terms of this transaction. The special committee retained an
investment bank to issue a fairness opinion with respect to this acquisition.
After analyzing the matter and considering all relevant issues, the special
committee recommended that our board approve the transaction.

     The total cost of the acquisition was approximately $18.0 million and
provided for:

     - a cash payment to The Wamberg Organization of $12.0 million;

     - a payment to The Wamberg Organization of $11.9 million through December
       31, 2002, which may be reduced if revenue objectives set forth in the
       purchase agreement are not achieved;

                                       13
<PAGE>   14

     - a cash payment to W. T. Wamberg of $50,000 for his shares of Wamberg
       Financial Corporation; and

     - the direct payment of $1.5 million for outstanding loans of The Wamberg
       Organization;

     - the assumption of approximately $4.3 million of liabilities including a
       $3.8 million note payable for the purchase of a corporate aircraft;

     - expenses of approximately $173,000.

     The cash portion of $13.8 million was funded through our existing cash
balances.

     The Wamberg Organization leases its 11,085 square feet of office space from
an entity controlled by Mr. Wamberg for an annual rental of $150,000 under a
lease expiring on February 21, 2009.

     On January 4, 1999, we purchased the right to receive approximately 27.5%
of the commission and fee revenue, prior to deduction of servicing costs,
related to renewal revenue of certain inforce policies existing on June 30,
1998, due under the Principal Office Agreement with W. T. Wamberg and The
Wamberg Organization, for a cash payment of $7.5 million. This transaction
allows us to receive approximately $14.2 million over a ten year period.
Concurrent with the acquisition of The Wamberg Organization and Wamberg, CBI
purchased all of the renewal revenue not acquired on January 4, 1999. In
accordance with the asset purchase agreement, all renewal revenue acquired as of
September 1, 1999, remaining inforce on December 31, 2018, will revert to Mr.
Wamberg.

     For the periods prior to the acquisition, The Wamberg Organization and
Wamberg Financial Corporation had revenue and net income as follows:

<TABLE>
<CAPTION>
                                                         SIX MONTHS       YEARS ENDED
                                                            ENDED         DECEMBER 31,
                                                          JUNE 30,      ----------------
                                                            1999         1998      1997
                                                         -----------    -------   ------
                                                         (UNAUDITED)       (AUDITED)
                                                                 (IN THOUSANDS)
<S>                                                      <C>            <C>       <C>
Revenues...............................................    $6,037       $10,169   $8,830
Net income.............................................    $1,938       $ 4,005   $3,000
</TABLE>

     Both The Wamberg Organization and Wamberg Financial Corporation were S
corporations and, accordingly, did not pay federal income taxes.

     The unaudited pro forma information below, presents our results of
operations and those of The Wamberg Organization and Wamberg Financial
Corporation as if the acquisition occurred on January 1, 1998, reflecting the
purchase method of accounting.

<TABLE>
<CAPTION>
                                                 THREE MONTHS ENDED    NINE MONTHS ENDED
                                                    SEPTEMBER 30,        SEPTEMBER 30,
                                                 -------------------   -----------------
                                                   1999       1998      1999      1998
                                                 --------   --------   -------   -------
                                                             (IN THOUSANDS)
<S>                                              <C>        <C>        <C>       <C>
Pro forma:
  Revenues.....................................  $27,246    $19,828    $87,058   $55,910
  Net income (loss)............................    1,059      2,442      4,514      (409)
  Diluted earnings (loss) per share............      .11        .38        .49      (.10)
</TABLE>

  National Institute for Community Banking

     On May 18, 1999, we acquired National Institute for Community Banking
(NICB), which by agreement, was effective January 1, 1999. The acquisition was
consummated by merging NICB into us with the NICB shareholders receiving 99,851
shares of our common stock at the closing price of $16 per share for a total
value of $1.6 million. As part of the agreement, the NICB shareholders will
receive an additional 384,452 shares of our common stock as consideration if
stipulated revenue and income goals during the years 1999 through 2002 are
achieved. Acquisition expenses were approximately $77,000. NICB was acquired as
an addition to an expansion of our BCS division.

                                       14
<PAGE>   15

  Management Compensation Group/HealthCare

     On April 5, 1999, we purchased the assets and business and assumed certain
liabilities of Phynque, Inc., d/b/a Management Compensation Group/HealthCare
(MCG) for a purchase price of $35.9 million consisting of the following:

     - a cash payment of $13.8 million;

     - a promissory note for $8.7 million;

     - 326,363 shares of common stock, having an aggregate value of $5.3 million
       based on the closing price of the common stock on April 5, 1999;

     - the direct payment of $3.6 million for certain outstanding loans; and

     - the assumption of $4.2 million of liabilities and payment of
       approximately $310,000 of closing costs.

     The assets acquired include cash, receivables and equipment in addition to
all intangible assets, intellectual property, and client lists. The liabilities
assumed include commissions, accrued employee benefits and operating expenses.
The $17.4 million cash portion of the purchase price was funded by a borrowing
under our credit facility. The promissory note is payable in thirty-two equal
quarterly installments of principal and interest at 10% per annum of $430,000
starting April 5, 2000. The promissory note is secured by a personal guarantee
from W. T. Wamberg, Chairman of Clark/Bardes, Inc. MCG is a 180 employee
executive benefit consulting organization servicing the healthcare industry and
is headquartered in Minneapolis, Minnesota.

     The acquisition of MCG marked our entrance into the healthcare and
not-for-profit executive benefit and compensation plan business with the
creation of our newest major operating division, HealthCare Compensation
Strategies.

     For the periods prior to the acquisition, MCG had revenue and net income as
follows:

<TABLE>
<CAPTION>
                                                        SIX MONTHS    FISCAL YEARS ENDED
                                                           ENDED         SEPTEMBER 30,
                                                         MARCH 31,    -------------------
                                                           1999         1998       1997
                                                        -----------   --------   --------
                                                        (UNAUDITED)        (AUDITED)
                                                                 (IN THOUSANDS)
<S>                                                     <C>           <C>        <C>
Revenues..............................................    $10,986     $26,000    $21,939
Net income (loss).....................................    $(1,696)    $ 1,816    $   379
</TABLE>

     MCG was an S corporation and, accordingly, did not pay Federal income
taxes.

     The unaudited pro forma information below presents our results of
operations and that of MCG combined as if the acquisition had occurred on
January 1, 1998, reflecting the purchase method of accounting.

<TABLE>
<CAPTION>
                                                 THREE MONTHS ENDED    NINE MONTHS ENDED
                                                    SEPTEMBER 30,        SEPTEMBER 30,
                                                 -------------------   -----------------
                                                   1999       1998      1999      1998
                                                 --------   --------   -------   -------
                                                             (IN THOUSANDS)
<S>                                              <C>        <C>        <C>       <C>
Pro forma:
  Revenues.....................................  $25,655    $25,098    $85,188   $67,396
  Net income (loss)............................    1,036      2,113      4,328    (3,066)
  Diluted earnings (loss) per share............      .11        .33        .47      (.72)
</TABLE>

  Wiedemann & Johnson

     Effective November 1, 1998, we acquired substantially all the assets and
the business of Wiedemann & Johnson, based in Dallas, Texas. The total purchase
price was $6.0 million, consisting of $4.0 million in cash and 142,857 shares of
our common stock at $14 per share. Acquisition related expenses were
approximately $54,000. We allocated approximately $40,000 of the purchase price
to tangible assets and the remainder to the net present value of Wiedemann's
expected future revenue. Wiedemann is engaged in the business of the

                                       15
<PAGE>   16

design, implementation and administration of non-qualified executive benefits
programs financed through life insurance. Our primary objective in acquiring the
assets and business of Wiedemann was to expand our client and revenue base and
acquire the experienced Wiedemann support and administrative personnel.

  Schoenke & Associates

     On September 1, 1998, we purchased substantially all of the assets and
business of Schoenke & Associates Corporation and Schoenke & Associates
Securities Corporation in Germantown, Maryland. The Schoenke companies
specialize in designing and administering benefit programs for companies. The
purchase price was $17.0 million plus expenses of $98,000 and was comprised of
$15.0 million in cash and a promissory note in the principal amount of $2.0
million. CBI allocated approximately $768,000 of the purchase price to tangible
assets acquired and the remaining $16.2 million was allocated to the net present
value of estimated future profits embedded in the existing inforce book of
business.

     For the periods prior to being acquired by us, Schoenke's revenues and net
income were:

<TABLE>
<CAPTION>
                                                         EIGHT MONTHS   FISCAL YEARS ENDED
                                                            ENDED          DECEMBER 31,
                                                          AUGUST 31,    -------------------
                                                             1998         1997       1996
                                                         ------------   --------   --------
                                                         (UNAUDITED)         (AUDITED)
                                                                   (IN THOUSANDS)
<S>                                                      <C>            <C>        <C>
Revenues...............................................     $4,884       $6,465     $5,835
Net income.............................................     $  841       $  492     $  194
</TABLE>

     Schoenke was an S corporation and, accordingly, did not pay Federal income
taxes.

     The unaudited pro forma information below presents the results of CBI and
Schoenke combined as if the acquisition had occurred January 1, 1998, reflecting
the purchase method of accounting.

<TABLE>
<CAPTION>
                                                 THREE MONTHS ENDED    NINE MONTHS ENDED
                                                    SEPTEMBER 30,        SEPTEMBER 30,
                                                 -------------------   -----------------
                                                   1999       1998      1999      1998
                                                 --------   --------   -------   -------
                                                             (IN THOUSANDS)
<S>                                              <C>        <C>        <C>       <C>
Pro forma:
  Revenues.....................................  $25,655    $18,992    $79,431   $51,510
  Net income (loss)............................    1,036      2,739      3,943    (2,476)
  Diluted earnings (loss) per share............      .11        .42        .43      (.58)
</TABLE>

     The Schoenke and Wiedemann acquisitions were valuable additions to the
Clark/Bardes divisions core business.

  Bank Compensation Strategies

     Effective September 1, 1997, we acquired substantially all the assets and
the business of Bank Compensation Strategies, Inc., a Minnesota based company,
for a total purchase price of $24.0 million, plus acquisition related expenses
of $383,000. This was our first major acquisition and marked our entry into the
community bank benefit and compensation market.

PRIVATE PLACEMENT WITH CONNING

     On June 7, 1999, we completed a private placement of 1,000,000 shares of
our common stock at $17 per share to Conning Insurance Capital Limited
Partnership V, L. P. (Conning). Conning is a limited partnership managed by a
subsidiary of Conning Corporation. Conning Corporation is, in turn, an indirect
subsidiary of General American Life Insurance Company. As part of the private
placement, we granted Conning registration rights which they may use to have
their shares of our common stock registered along with any shares we may be
registering with the SEC, after December 31, 2002.

                                       16
<PAGE>   17

     We also agreed to appoint a representative of Conning to our board of
directors. Conning designated Steven F. Piaker, Senior Vice President of
Conning, to be that representative. We further agreed that, when Mr. Piaker's
term expires, we would use our best efforts to elect a Conning representative to
our board of directors. Proceeds of the $17 million sale of our common stock was
used to reduce outstanding debt and for acquisitions.

GENERAL AMERICAN LIFE INSURANCE COMPANY

     One of the insurance carriers we use is General American Life Insurance
Company which represented approximately 8.3% of our renewal revenues for the six
month period ending June 30, 1999. Following a downgrade of General American's
financial ratings by Moody's Investors Service Inc. and a downgrade of General
American's debt to non-investment grade in August 1999, investors began
exercising their rights to withdraw a total of $6.8 billion under short-term
funding agreements, commonly referred to as guaranteed investment contracts,
issued by General American. The contracts require only seven days' notice and
General American, faced with the unexpected volume of withdrawal requests, was
unable to convert the assets within the time required. As a result, General
American has been placed under administrative supervision by the Department of
Insurance of the state of Missouri. On August 26, 1999, General American
tentatively entered into a definitive agreement with Metropolitan Life Insurance
Company whereby Metlife will acquire all of the outstanding common stock of
General American's parent company. As a condition to this agreement, a Missouri
court subsequently placed General American into rehabilitation, a form of
receivership, to protect its policyholders. While the contracts held by our
clients are not the specific investment contracts that created General
American's liquidity problems, our clients are nonetheless affected because
insurance policies underwritten by General American will be restricted from
making policy surrenders or exchanges until General American's liquidity problem
is resolved. A Missouri court must still approve and authorize General
American's reorganization plan, including the sale of General American to
Metlife. If approved, the plan is intended to allow General American and its
subsidiaries' inforce and reinsurance business to continue under the control of
Metlife. Of course, we cannot assure you that the court will approve the
acquisition, nor can we assure you that the acquisition will have its intended
effect.

     We do not expect to sell programs financed by insurance policies
underwritten by General American for the foreseeable future. During General
American's rehabilitation, it is possible our clients who hold General American
policies may not realize the full values of their policies and we may be forced
to accept less favorable renewal commission terms with another insurance carrier
in order for the insurance carrier to assume the policies. In addition, these
events could cause a slowdown in new sales of programs which are financed by
policies underwritten by other insurance companies or our persistency rate could
be adversely affected by more clients choosing to surrender their policies. We
are not able to predict the effect that General American's rehabilitation or
potential acquisition will have on the persistency of policies underwritten by
other insurance carriers. General American's rehabilitation or potential
acquisition could adversely affect our renewal fees and commissions and our
persistency levels in general. No assurance can be given that similar financial
difficulties will not be experienced by other insurance companies.

ADVERSE TAX COURT DECISION REGARDING LEVERAGED CORPORATE OWNED LIFE INSURANCE

     On October 19, 1999, the U.S. Tax Court issued a decision denying the
deductibility of interest on policy loans in connection with a leveraged
corporate owned life insurance (COLI) program. Following adverse federal income
tax legislation in 1995, Clark/Bardes ceased offering leverage COLI in its
package of benefit plans. Consequently, Clark/Bardes does not expect any adverse
effects of this recent Tax Court ruling on its future new business revenue
stream.

     However, because of the varied facts and circumstances surrounding each
case, it is impossible to determine the effects, if any, of this case on a
client's decision to continue or surrender any given policy. Because of the
number of other variables, including adverse tax implications resulting from a
surrender, management does not believe this decision will have any material
adverse effects on the company.

                                       17
<PAGE>   18

REVENUE

     Our operating units derive their revenue primarily from:

     - commissions paid by the insurance companies that underwrite the policies
       underlying the various insurance programs;

     - fees paid by clients in connection with program design and administrative
       services; and

     - executive compensation program and benefit consulting fees.

     Our revenue is usually long term and recurring, is typically paid annually
and extends for a period of ten years or more after the sale. Commissions paid
by insurance companies vary by policy and by program and usually represent a
percentage of the premium or the cash surrender value of the insurance policies
underlying our program. We recognize revenue at the time the insurance premium
is paid by the client to the insurance company or the renewal premium is due to
the insurance company.

     We include first year commission revenue, renewal commission revenue and
other revenue in total revenue.

     - First Year Commission Revenue. First year revenue is recognized at the
       time the client is contractually committed to purchase the insurance
       policies and the premiums are paid by the client to the insurance
       company.

     - Renewal Commission Revenue. Renewal revenue is recognized on the date
       that the renewal premium is due to the insurance company. Renewal revenue
       in future periods, which is not recognized on our balance sheet, is
       estimated to be approximately $230 million in total revenue over the next
       five years. However, renewal revenue can be affected by policy surrenders
       or exchanges, material contract changes, asset growth and case mortality
       rates. Over the last five years, we have experienced a persistency rate
       of approximately 95% of the inforce insurance underlying our programs. We
       can give no assurances that our persistency rate will remain at this
       level.

     - Other Revenue. Other revenue consists of several miscellaneous sources of
       revenue associated with our operations including consulting and
       administrative fees.

QUARTERLY RESULTS

     The following table presents a summary of key revenue and expense
statistics for the most recent eight calendar quarters. This information is not
necessarily indicative of results for any full year or for any subsequent
period.
<TABLE>
<CAPTION>
                              DECEMBER 31,   MARCH 31,   JUNE 30,   SEPTEMBER 30,   DECEMBER 31,   MARCH 31,   JUNE 30,
                                  1997         1998        1998         1998            1998         1999        1999
                              ------------   ---------   --------   -------------   ------------   ---------   --------
<S>                           <C>            <C>         <C>        <C>             <C>            <C>         <C>
Total revenue...............    $27,162       $13,754    $15,230       $17,641        $28,141       $24,057    $29,714
Gross profit................      9,135         4,622      6,159         6,589         11,285         9,874     16,681
  Ratio.....................       33.6%         33.6%      40.4%         37.4%          40.1%         41.0%      56.1%
G & A expense...............      4,004         3,371      5,029         4,613          6,594         6,255     12,202
Amortization................        295           221        221           356            434           620      1,152
Income before interest,
  taxes and non-recurring
  expense...................      4,836         1,030        909         1,621          4,257         2,999      3,327
  % of revenue..............       17.8%          7.5%       6.0%          9.2%          15.1%         12.5%      11.2%
  % of G.P. ................       52.9%         22.3%      14.8%         24.6%          37.7%         30.4%      19.9%

<CAPTION>
                              SEPTEMBER 30,
                                  1999
                              -------------
<S>                           <C>
Total revenue...............     $25,654
Gross profit................      15,198
  Ratio.....................        59.2%
G & A expense...............      11,332
Amortization................       1,237
Income before interest,
  taxes and non-recurring
  expense...................       2,630
  % of revenue..............        10.3%
  % of G.P. ................        17.3%
</TABLE>

     Our operating results can fluctuate considerably, especially when compared
on a consecutive quarterly basis. Because many of our programs are implemented
late in the year, we see large increases in both first year

                                       18
<PAGE>   19

and renewal revenue in the fourth quarter. Operating results are also affected
by a number of other factors, including:

     - introduction of new or enhanced programs and services by us or our
       competitors;

     - client acceptance or rejection of new programs and services;

     - program development expenses;

     - timing of major sales;

     - demand for administrative services;

     - competitive, legislative and regulatory conditions in our industry; and

     - general economic conditions.

     Many of these factors are beyond our control. The sales cycles of our
Clark/Bardes Division often takes between twelve and eighteen months, with first
year revenue coming from a few large cases. Our revenue is thus difficult to
forecast, and we believe that comparing our consecutive quarterly results of
operations is not necessarily meaningful, nor does it indicate what results we
will achieve for any subsequent period. In our business, past operating results
are not a reliable indicator of future performance.

RESULTS OF OPERATIONS

     The following table sets forth the relationship between revenues and
expenses on a percentage basis.

<TABLE>
<CAPTION>
                                                                             NINE MONTHS
                                                                                ENDED
                                                 YEAR ENDED DECEMBER 31,    SEPTEMBER 30,
                                                 ------------------------   -------------
                                                  1996     1997     1998    1998    1999
                                                 ------   ------   ------   -----   -----
<S>                                              <C>      <C>      <C>      <C>     <C>
Total Revenue..................................  100.0%   100.0%   100.0%   100.0%  100.0%
Commission and fee expense.....................   63.3     65.6     61.6     62.7    47.4
                                                 -----    -----    -----    -----   -----
          Gross Profit.........................   36.7     34.4     38.4     37.3    52.6
                                                 -----    -----    -----    -----   -----
General and administrative.....................   25.9     23.3     26.3     27.9    37.5
Amortization...................................     --      0.6      1.6      1.7     3.8
Non recurring (put warrants)...................     --       --      6.4     10.3      --
                                                 -----    -----    -----    -----   -----
Operating income (loss)........................   10.9     10.5      4.1     (2.7)   11.3
Interest expense -- net........................    0.4     (1.8)    (3.4)    (4.7)   (2.7)
                                                 -----    -----    -----    -----   -----
Income (loss) before taxes.....................   11.2      8.7      0.7     (7.4)    8.5
Income taxes...................................    0.5      0.1      1.3     (1.7)    3.6
                                                 -----    -----    -----    -----   -----
          Net income...........................   10.7%     8.6%    (0.7)%    5.6%    4.9%
                                                 =====    =====    =====    =====   =====
</TABLE>

  Revenue

     Revenue growth, from existing business units, was mixed for the third
quarter and nine months ended September 30, 1999. Revenue for the quarter
increased $8.0 million or 45% and $32.8 million or 70% for the nine months to
date. Overall revenue for the periods can be summarized as follows:

<TABLE>
<CAPTION>
                                                   THREE MONTHS         NINE MONTHS
                                                 -----------------   -----------------
FOR THE PERIOD ENDED SEPTEMBER 30,                1999      1998      1999      1998
----------------------------------               -------   -------   -------   -------
<S>                                              <C>       <C>       <C>       <C>
Existing business units........................  $18,092   $17,314   $63,230   $46,299
Acquisitions...................................    7,563       327    16,201       327
                                                 -------   -------   -------   -------
          Total................................  $25,655   $17,641   $79,431   $46,626
                                                 =======   =======   =======   =======
</TABLE>

                                       19
<PAGE>   20

     For 1999, acquisitions contributed 29.5% of the third quarter and 25.6% of
the first nine months of revenue, respectively. By definition, we consider any
revenue source appearing in the first full year of operating results as being
from acquisitions. After that they become part of existing business.

<TABLE>
<CAPTION>
                                                           THREE MONTHS         NINE MONTHS
                                                         -----------------   -----------------
FOR THE PERIOD ENDED SEPTEMBER 30,                        1999      1998      1999      1998
----------------------------------                       -------   -------   -------   -------
<S>                                                      <C>       <C>       <C>       <C>
First year revenue:
  Clark/Bardes.........................................  $ 3,773   $ 2,423   $20,120   $ 6,929
  Bank Compensation Strategies.........................    4,653     5,960    14,118    15,323
  HealthCare Compensation Strategies...................    5,626        --     9,347        --
                                                         -------   -------   -------   -------
                                                          14,052     8,383    43,585    22,252
                                                         -------   -------   -------   -------
Renewal revenue:
  Clark/Bardes.........................................  $ 8,521   $ 7,764   $25,896   $20,446
  Bank Compensation Strategies.........................    2,349     1,494     6,148     3,928
  HealthCare Compensation Strategies...................      402        --     2,497        --
                                                         -------   -------   -------   -------
                                                          11,272     9,258    39,541    24,374
                                                         -------   -------   -------   -------
Other..................................................      331        --     1,305        --
                                                         -------   -------   -------   -------
          Total........................................  $25,655   $17,641   $79,431   $46,626
                                                         =======   =======   =======   =======
</TABLE>

     The Clark/Bardes Division benefitted by $1.5 million in the quarter and
$4.2 million for the nine month period ended September 30, 1999, respectively,
from the acquisition of Schoenke in September 1998.

  First Year Revenue

     Including acquisitions, CBH continues to benefit from significant growth in
first year revenue.

<TABLE>
<CAPTION>
1999 -- 1998                                                     INCREASE
------------                                                  ---------------
<S>                                                           <C>       <C>
Third quarter:
  Existing businesses.......................................  $  (201)
  Acquisitions..............................................    5,870
                                                              -------
                                                              $ 5,669   67.6%
                                                              =======   =====
Nine months:
  Existing businesses.......................................  $10,785
  Acquisitions..............................................   10,548
                                                              -------
                                                              $21,333   95.9%
                                                              =======   =====
</TABLE>

  Renewal Revenue

     As the acquired divisions continue to grow, renewal revenue will grow
accordingly, but will become a diminished factor in our overall revenue mix.

<TABLE>
<CAPTION>
1999 -- 1998                                                     INCREASE
------------                                                  ---------------
<S>                                                           <C>       <C>
Third quarter:
  Existing businesses.......................................  $   966
  Acquisitions..............................................    1,047
                                                              -------
                                                              $ 2,013   21.7%
                                                              =======   =====
Nine months:
  Existing businesses.......................................  $ 5,256
  Acquisitions..............................................    4,911
                                                              -------
                                                              $10,167   41.7%
                                                              =======   =====
</TABLE>

                                       20
<PAGE>   21

     The following table represents the gross revenue associated with our
inforce business-owned life insurance policies as of September 30, 1999. The
projected gross revenue stated below is not adjusted for mortality, lapse, or
other factors that may impair collection of revenue. We cannot assure you that
commissions under any of these policies will be received. These projected gross
revenues are based on the beliefs and assumptions of management and are not
necessarily indicative of the revenue that may actually be achieved in the
future.

                        PROJECTED GROSS RENEWAL REVENUE
                               SEPTEMBER 30, 1999

<TABLE>
<CAPTION>
                                                               BANK        HEALTHCARE
                                                 CLARK     COMPENSATION   COMPENSATION
                                                 BARDES     STRATEGIES     STRATEGIES     TOTAL
                                                --------   ------------   ------------   --------
<S>                                             <C>        <C>            <C>            <C>
2000..........................................  $ 39,701     $ 9,407        $ 6,108      $ 55,216
2001..........................................    37,140       5,324          6,090        48,554
2002..........................................    35,378       3,463          6,013        44,854
2003..........................................    32,649       3,587          5,946        42,184
2004..........................................    28,890       3,629          5,826        38,345
2005..........................................    28,477       3,671          5,584        37,732
2006..........................................    28,393       3,715          5,392        37,500
2007..........................................    26,429       3,763          5,193        35,385
2008..........................................    24,308       3,810          4,780        32,898
2009..........................................    24,506       3,860          4,232        32,598
                                                --------     -------        -------      --------
          Total...............................  $305,872     $44,229        $55,164      $405,264
                                                ========     =======        =======      ========
</TABLE>

     In our report for the quarter ended June 30, 1999, we stated that the
projected gross revenue, at that time, was $418.7 million for the ten year
period ending with the year 2009. Included in that projection was an amount
attributable to our newly acquired division, HealthCare Compensation Strategies,
of $68.1 million. HCS had never prepared such a projection before and because of
a lack of understanding overstated its projected ten year revenue by $12.9
million. During the process of updating its ten year projection in connection
with the third quarter report, HCS management detected the error and took
immediate steps to remedy the condition.

COMMISSION EXPENSE AND GROSS PROFIT

<TABLE>
<CAPTION>
                                                           THREE MONTHS         NINE MONTHS
                                                         -----------------   -----------------
          FOR THE PERIOD ENDED SEPTEMBER 30,              1999      1998      1999      1998
          ----------------------------------             -------   -------   -------   -------
<S>                                                      <C>       <C>       <C>       <C>
Commissions and fee expense............................  $10,456   $11,052   $37,672   $29,255
Gross profit...........................................  $15,199   $ 6,589   $41,759   $17,371
Revenue retained ratio.................................     59.2%     37.3%     52.6%     37.2%
</TABLE>

     While increases in commission expense and gross profit are closely
correlated with increases in gross revenue, one of our most important operating
factors is revenue retained. This is the amount of revenue we keep to pay
expenses and finance our ongoing operations.

     Our revenue retained ratio increased by 58.3% in the third quarter and
41.0% during the nine months ended September 30, 1999. Three factors have
contributed to this improvement:

     - the acquisition of MCG HealthCare;

     - a higher volume of first year revenue coming from internal sales efforts;
       and,

     - the acquisition of NICB.

                                       21
<PAGE>   22

     Gross profit for each operating unit, is as follows:

<TABLE>
<CAPTION>
                                                            THREE MONTHS        NINE MONTHS
                                                          ----------------   -----------------
FOR THE PERIOD                                             1999      1998     1999      1998
--------------                                            -------   ------   -------   -------
<S>                                                       <C>       <C>      <C>       <C>
Clark/Bardes............................................  $ 6,177   $4,112   $21,045   $10,869
Bank Compensation Strategies............................    3,618    2,478    10,154     6,502
HealthCare Compensation Strategies......................    5,404       --    10,560        --
                                                          -------   ------   -------   -------
                                                          $15,199   $6,590   $41,759   $17,371
                                                          =======   ======   =======   =======
Percent of revenue:
  Clark/Bardes..........................................     49.2     40.4      44.6      39.9
  Bank Compensation Strategies..........................     51.7     33.2      50.1      33.8
  HealthCare Compensation Strategies....................     88.6       --      88.0
          Total Company.................................     59.2     37.4      52.6      37.3
</TABLE>

  Gross Profit

<TABLE>
<CAPTION>
1999 -- 1998                                                            INCREASE
------------                                                            --------
<S>                                                           <C>       <C>
Third quarter:
  Existing businesses.......................................  $ 2,647
  Acquisitions..............................................    5,963
                                                              -------
                                                              $ 8,610    130.7%
                                                              =======    =====
Nine months:
  Existing businesses.......................................  $10,855
  Acquisitions..............................................   13,633
                                                              -------
                                                              $24,388    140.4%
                                                              =======    =====
</TABLE>

GENERAL AND ADMINISTRATIVE EXPENSES

<TABLE>
<CAPTION>
                                                            THREE MONTHS        NINE MONTHS
                                                          ----------------   -----------------
FOR THE PERIOD ENDED SEPTEMBER 30,                         1999      1998     1999      1998
----------------------------------                        -------   ------   -------   -------
<S>                                                       <C>       <C>      <C>       <C>
Clark/Bardes............................................  $ 3,351   $3,287   $11,034   $ 9,431
Bank Compensation Strategies............................    2,884    1,326     7,975     3,591
HealthCare Compensation Strategies......................    4,014       --     8,068
Corporate overhead -- note..............................    1,083       --     2,712        --
                                                          -------   ------   -------   -------
                                                          $11,332   $4,613   $29,789   $13,022
                                                          =======   ======   =======   =======
As a percentage of retained revenue:
  Clark/Bardes..........................................     54.2%    80.2%     52.4%     86.9%
  Bank Compensation Strategies..........................     79.7%    53.5%     78.5%     55.2%
  HealthCare Compensation Strategies....................     74.3%      --      76.4%
          Total.........................................     74.6%    70.1%     71.3%     75.0%
</TABLE>

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

Note -- prior to 1999, Corporate overhead was included in the Clark/Bardes
Division.

     The increase in general and administrative expenses should be reviewed in
the same context as the decrease in commission expense. Since the beginning of
the year, two significant events have impacted this relationship:

     - the acquisition of NICB -- prior to our acquiring NICB, it functioned as
       an independent producer for BCS. With the acquisition; commission
       previously paid to NICB by BCS have been replaced, in part, by salaries
       to the former owners;

                                       22
<PAGE>   23

     - the acquisition of MCG (now HCS) -- all of HCS's sales force are company
       personnel -- HCS does not rely on any independent producers thus their
       selling expense is also reflected in salaries.

     The overall increase in general and administrative expense may be analyzed
as follows:

<TABLE>
<CAPTION>
1999 -- 1998                                                            INCREASE
------------                                                            --------
<S>                                                           <C>       <C>
Third quarter:
  Existing businesses.......................................  $ 2,243
  Acquisitions..............................................    4,476
                                                              -------
                                                              $ 6,719    121.7%
                                                              =======    ======
Nine months:
  Existing businesses.......................................  $ 6,943
  Acquisitions..............................................    9,824
                                                              -------
                                                              $16,767    107.9%
                                                              =======    ======
</TABLE>

     The most important factor to consider, however, is that the rate of
increase in general and administrative expenses remains lower than the rate of
increase in gross profit. By way of comparison for the periods:

<TABLE>
<CAPTION>
1999 -- 1998                                                            INCREASE
------------                                                            --------
<S>                                                           <C>       <C>
Three months:
  Gross profit..............................................  $ 8,625    131.2%
  General and administrative expense........................    6,710    121.7
Nine months:
  Gross profit..............................................   24,405    140.6
  General and administrative expense........................   16,767    107.9
</TABLE>

OTHER EXPENSES

<TABLE>
<CAPTION>
                                                              THREE MONTHS      NINE MONTHS
                                                             --------------   ---------------
            FOR THE PERIOD ENDED SEPTEMBER 30,                1999    1998     1999     1998
            ----------------------------------               ------   -----   ------   ------
<S>                                                          <C>      <C>     <C>      <C>
Amortization of intangibles................................  $1,237   $ 356   $3,009   $  798
Nonrecurring operating expense.............................      --     500       --    4,800
Interest expense -- net....................................     790     544    2,209    2,180
Income taxes...............................................     833    (806)   2,838     (801)
</TABLE>

     Amortization: Amortization expense increased $881,000 for the three month
period and $2.2 million for the nine month period ended September 30, 1999,
reflecting a full quarter and six months of amortization for the Schoenke and
Wiedemann acquisitions in 1998, as well as the MCG and NICB acquisitions in the
second quarter of 1999.

     Nonrecurring operating expense: In 1998, we recognized the expense related
to the increased market value of certain put warrants. These warrants were
redeemed in a later period for $4.8 million and the cost was not deductible for
federal income tax purposes. Other than our employee stock option plans, we do
not have any other convertible securities outstanding.

     Interest Expense -- net: Net interest costs increased $246,000 or 45.2% in
the third quarter and $29,000 or 1.3% for the nine months ended September 30,
1999. Three factors contributed to this:

     - lower average monthly borrowings for the first six months of 1999;

     - lower interest costs resulting from the new Bank One credit facility
       starting January 1, 1999;

     - emphasizing cash flow and dedicating all excess cash to paying down
       acquisition debt.

                                       23
<PAGE>   24

With increased borrowings as a result of our acquisition program, these costs
may be expected to increase in subsequent quarters.

     Federal Income Taxes: Federal income tax expense was 43.6% of income before
taxes for the quarter ended September 30, 1999, and 41.6% for the nine months.
This compares to 40% as our normal combined federal and state income tax rate.
The rate for the six months ended June 30, 1999 was 40.8%.

     Like all corporations, we have a certain amount of expenses that are not
deductible for federal income tax purposes. They are closely controlled and do
not exceed the amounts management deems prudent for such outlays. The basic
reason for the excessive tax rate was the low level of taxable income for the
periods and the effect of losing a large amount of deductions on a low base of
earnings.

FINANCIAL CONDITION AND LIQUIDITY

     We continue to generate strong cash flow from operations. We use the net
cash from operating activities to fund capital expenditures and small
acquisitions. We expect that large future acquisitions will be financed
primarily through externally available funds. However, we can offer no assurance
that such funds will be available and, if so, on terms acceptable to us.

<TABLE>
<CAPTION>
              NINE MONTHS ENDED SEPTEMBER 30,                   1999       1998      CHANGE
              -------------------------------                 --------   --------   --------
<S>                                                           <C>        <C>        <C>
Cash flows from (used in):
  Operations................................................  $ 10,609   $  4,013   $  6,596
  Investing.................................................   (59,791)   (16,570)   (43,221)
  Financing.................................................    40,485     24,698     15,787
</TABLE>

  Cash Flows from Operating Activities

     Our cash flow from operations for the nine months ended September 30, 1999,
improved significantly over that of the comparable nine month period in 1998.
The components were:

<TABLE>
<CAPTION>
                                                            NINE MONTHS ENDED
                                                              SEPTEMBER 30,
                                                            -----------------   INCREASE/(DECREASE)
                                                             1999      1998           IN CASH
                                                            -------   -------   -------------------
<S>                                                         <C>       <C>       <C>
Net income (loss) plus non-cash expenses..................  $ 7,511   $(1,608)        $ 9,119
Changes in operating assets and liabilities...............    3,098     5,621          (2,523)
                                                            -------   -------         -------
Cash flow from operating activities.......................  $10,609   $ 4,013         $ 6,596
                                                            =======   =======         =======
</TABLE>

     In this regard, it is noted that the working capital ratio declined to .67
to one at September 30, 1999 compared with 1.54 to one at December 31, 1999. As
an acquiring company, a great deal of our acquisitions are funded through
debt -- either bank borrowings or sellers' notes. Because of this and the strong
cash generated by operations, management has determined to dedicate all excess
cash to the reduction of bank borrowings and, as a result, only cash for
reasonably foreseeable needs and expenses is retained. As an example of this,
the entire $13.8 million cash portion of the acquisition of The Wamberg
Organization and Wamberg Financial Corporation was accomplished without any
additional borrowings.

  Cash Used in Investing Activities

     Acquisitions accounted for $53.3 million of the $59.8 million used in
investing activities. The balance was comprised of $6.5 million for purchase of
equipment and various assets such as deferred debt expenses and artwork acquired
with MCG.

     Cash spending for acquisitions included:

<TABLE>
  <S>                                                            <C>
  - MCG/HealthCare............................................   $17.4 million
  - The Wamberg Corporation and Wamberg Financial Corporation
    including the $7.5 million purchase of renewal revenue in
    January 1999..............................................   $21.3 million
</TABLE>

                                       24
<PAGE>   25

     We expect acquisitions to continue for the remainder of the year and be
financed primarily from available credit lines and possible additional equity.
However, we can offer no assurances such will be the case.

  Cash Flows from Financing Activities

     In January 1999, we entered into a $65.0 million credit agreement
consisting of a $35.0 million revolving credit facility and two term loans of
$25.0 million and $5.0 million. In January 1999, we used $25.0 million of the
term loans to retire existing debt. The remaining $5.0 million is available for
working capital. The loan is at a fixed rate of 7.08% for the first year and at
a floating rate based on the London Interbank Offered Rate plus 2.25%
thereafter. The loan matures on December 31, 2004 with interest and principal
payable quarterly starting March 31, 1999. The credit agreement contains
restrictive covenants which, among other things, require mandatory prepayments
under certain conditions, financial reporting and compliance certificates,
maintenance of financial ratios, restrictions on guarantees and additional
indebtedness, limitations on mergers and acquisitions, prohibition of cash
dividends, limitation on investments, loans, and advances, and certain change in
control provisions. Since restructuring our debt, we have drawn down on the new
line for $55.1 million of which $25.0 million was used to repay the old debt
$19.0 million for acquisitions, and $11.1 million for general operating
purposes. Since then, $23.8 million of the acquisition and operating debt has
been repaid.

     In June, we sold 1,000,000 shares of common stock to Conning Insurance
Capital Limited Partnership V, L. P. for $17 million in a private placement.
Approximately $12 million was used to pay down the Bank One acquisition debt.

     In an effort to reduce interest costs, management has directed that all
cash beyond reasonably foreseeable needs be used to pay down debt. Since the
company has a $5 million stand-by working capital line and $10 million in
accounts receivable, this program has been implemented.

     We believe that our net cash flow from operations will continue to provide
sufficient funds to service our debt obligations. We estimate renewal revenue in
future periods, which is not reflected on our balance sheet, to represent
approximately $230 million over the next five years. However, renewal revenue
can be adversely affected by policy surrenders or exchanges, material contract
changes, asset growth and case mortality rates.

     As our business grows, our working capital and capital expenditures
requirements will also continue to increase. We believe that net cash flows from
operations will be sufficient to finance our debt payments, working capital and
capital expenditures for the next twelve months. There can be no assurance,
however, that the net cash flows from operations will be sufficient to meet our
anticipated requirements or that we will not require additional debt or equity
financing within this time frame. We may continue to issue stock to finance
future acquisitions.

MARKET RISK

     We are exposed to various types of market risk in the normal course of our
business, including the impact of interest rate changes and changes in corporate
tax rates. Specifically, a portion of our Bank One credit line bears interest at
the floating London Interbank Offered Rate (LIBOR). We may employ risk
management strategies, including the use of derivatives such as interest rate
swap agreements, to manage those exposures. We do not hold derivatives for
trading purposes.

     It is our policy to enter into interest rate swap transactions only to the
extent necessary to achieve our desired objectives of limiting our exposures to
the interest rate risks discussed above. We do not hedge our market risk
exposure in a manner that would completely eliminate the impact of changes in
interest rates on our net income. We do not expect that our results of
operations or liquidity will be materially affected by these risk management
strategies.

     Coincident with entering into credit facility and term loan agreements, we
have entered into two interest rate swap agreements with a bank affiliated with
the lending group to fix the interest rates. The first agreement went into
effect on July 6, 1999 and fixes the interest rate at 5.76% on $15 million of
the debt. The second agreement goes into effect on January 18, 2000 and fixes
the rate at 5.29% on $15 million of the debt.
                                       25
<PAGE>   26

INFLATION

     Inflation has not had a material effect on our results of operations.
Certain of our expenses, such as compensation, benefits and capital equipment
costs, are subject to normal inflationary pressures. However, the majority of
our service and administrative agreements with clients, which generate fee
income, have a cost of living adjustment tied to the consumer price index.
Management believes that future inflationary pressures will continue to be
offset, because as inflation increases, investment returns will also increase,
resulting in higher cash values and higher commission rates.

YEAR "2000" UPDATE

     The year 2000 issue is the result of computer programs written using two
digits rather than four digits to define "date" fields. Information systems have
time sensitive operations that, as a result of this date field limitation could
disrupt activities in the normal business cycle.

  State of Readiness

     Based on previous and ongoing internal reviews, we believe we have
identified all potential hardware and software that may not function properly
with respect to dates in the year 2000 and thereafter. We will continue our
assessment of year 2000 issues and take steps to prevent these issues from
adversely affecting our future operating results. This process includes, but is
not limited to, the following:

     - We reviewed all our software and systems to determine what was not year
       2000 compatible and we are upgrading any that are not compliant.

     - We contacted all of our major suppliers and vendors to determine if they
       had a plan in place to become Y2K compliant, and what problems we might
       expect if they would not be.

     - We contacted all our suppliers and providers in areas such as employee
       benefit plan carriers, office supplies and equipment providers, building
       facilities managers or providers of elevators and utilities for their
       plans to become Y2K compliant and to report on their progress.

     - We have reviewed all internal office machines, such as fax machines,
       copiers, the security system, the phone system, etc.

     - We have contacted all our carriers and providers of client-related
       policies and services to determine their plans to become Y2K compliant,
       and to report on their progress, so we could be assured our clients would
       receive seamless service.

This assessment and readiness process has been completed, however, we continue
to focus on specific issues.

     In our assessment of year 2000 issues, we specifically focused on our
software applications and associated software products, hardware, facilities,
communications equipment and security systems. Our proprietary financial
modeling and administrative systems that support our insurance-financed employee
benefit programs were designed to be year 2000 ready. During 1998, we upgraded
our network software to be year 2000 compliant.

     In addition;

     - We have completed upgrades to most of our hardware, with the last of our
       hardware upgrades scheduled completed at the end of September 1999.

     - We completed upgrades to our software by the end of September 1999.

     - We have completed upgrades to our telephone and security systems within
       the last year to make them compliant. We believe all office equipment is
       now 100% compliant.

     - Major suppliers, vendors and carriers have provided us written statements
       assuring us that they are or will be year 2000 compliant by the end of
       1999.

                                       26
<PAGE>   27

  Third Party Issues

     In addition to evaluating our own systems for year 2000 compliance, we have
communicated with and requested information from our important clients and
carriers to determine the extent to which interfaces with such entities are
vulnerable to year 2000 issues and the extent to which the internal systems of
such entities are vulnerable to year 2000 issues. Third parties that have
relationships with us, including insurance companies and clients, may experience
significant operational difficulties if their computer systems do not properly
recognize date sensitive information when the year changes to 2000. These
computer malfunction issues may have a material adverse effect on the operations
of such third parties, which may, in turn, have a material adverse effect on us.
We are not able to determine the extent to which such third parties, such as
insurance companies and clients, may experience year 2000 issues. Any year 2000
problem of either us or third parties that have relationships with us could have
a material adverse effect on our business, results of operations and financial
condition.

  Costs

     Our costs, as of September 30, 1999, related to the Year 2000 compliance
efforts total approximately $400,000, and we do not expect our total costs to
materially exceed this amount. We funded these costs with cash generated from
operations.

  Continuing Plan

     We believe our own systems and software, as well as all internal office
equipment will be 100% compliant before year end and we believe our vendors and
suppliers are actively working to achieve the same results. However, we cannot
make the same assertion with respect to our clients or carriers.

     In the event a problem occurs that is out of our control, we have developed
a contingency plan along the following lines:

     - MIS and Corporate Services (facilities) staff members will be working the
       weekend of December 31 to January 2 to monitor systems and facilities
       conditions immediately as of January 1, 2000.

     - To protect our systems from data loss due to any power surges, we will
       shut them down the evening of December 31, 1999. We will then power them
       back up the morning of January 1, 2000.

     - We will run one last back up on December 31, 1999 to ensure we have all
       data from the close of the last business day backed up and saved off site
       so we can recreate all systems and data if we lose our systems
       altogether.

     - We keep hard copies of all documents sent to clients and carriers, and
       our carriers have copies of most of the paperwork. Therefore, we can
       recreate our activity through that paper trail.

     - We can also use that paper trail to prove when documents, checks or other
       information was sent to carriers, clients or banks so we can provide
       proof of when a document or check should have been received and calculate
       and charge back for any impact the delay of a deposit, etc., would have
       on a client's account balance or premium value.

     - We have numerous staff members who have remote access to our systems so
       we could get at our systems and data remotely if we have any problem
       getting into our office. In addition, we store all documents that have
       already been imaged, as well as all back up tapes of our data at an
       offsite location which we could also access in the event we could not
       gain access to our office.

RECENT ACCOUNTING PRONOUNCEMENTS

     In February 1997, the FASB issued SFAS No. 128, "Earnings per Share." SFAS
No. 128 specifies the computation, presentation and disclosure requirements for
earnings per share for entities with publicly-held common stock. SFAS No. 128 is
effective for financial statements for both interim and annual periods ending

                                       27
<PAGE>   28

after December 15, 1997 and has been adopted by us and is presented in the
accompanying financial statements.

     As of January 1, 1998, we adopted SFAS No. 130 "Reporting Comprehensive
Income." SFAS No. 130 establishes new rules for the reporting and display of
comprehensive income and its components. The adoption of this statement had no
impact on our net income or shareholders' equity. We have no other comprehensive
income as defined by SFAS No. 130 as of December 31, 1997 or December 31, 1998.

     In June 1997, the FASB issued SFAS No. 131 "Disclosures About Segments of
an Enterprise and Related Information." SFAS No. 131 requires public enterprises
to report selected information about operating segments in annual and interim
reports issued to shareholders. It is effective for financial statements for
fiscal years beginning after December 15, 1997, but it is not required to be
applied to interim financial statements in the initial year of its application.
The adoption of this statement will have no impact on our financial condition or
results of operations. This statement has been adopted by us and is presented in
the accompanying financial statements.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

     This Form 10-Q and the documents incorporated by reference in this Form may
contain forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. When used in this Form 10-Q, words such as
"anticipate," "believe," "estimate," "expect," "intend," "predict," "project,"
and similar expressions, as they relate to us or our management, identify
forward-looking statements. Such forward-looking statements are based on the
beliefs and assumptions of our management as well as information currently
available to us. These forward-looking statements are subject to certain risks,
uncertainties and assumptions, including but not limited to the following:

- risks associated with changes in tax legislation

- dependence on key producers and services of key personnel

- dependence on persistency of existing business

- credit risk related to renewal revenue

- acquisition risks

- risks related to significant intangible assets
- dependence on certain insurance companies

- dependence on information processing systems and risk of error or omissions

- competitive factors and pricing pressures

- risks posed by the year 2000 date change

- changes in legal and regulatory requirements and general economic conditions

Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those anticipated, expected or projected. Such forward-looking statements
reflect our current views with respect to future events and are subject to these
and other risks, uncertainties and assumptions relating to the operations,
results of operations, growth strategy and liquidity. All subsequent written and
oral forward-looking statements attributable to us or individuals acting on our
behalf are expressly qualified in their entirety by this paragraph.

                                       28
<PAGE>   29

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     In January 1999, CBI entered into a $65 million credit agreement consisting
of a $35 million revolving credit facility and two term loans of $25 million and
$5 million. In January 1999, pursuant to the credit agreement, Clark/Bardes
obtained a term loan for $25 million at a fixed rate of 7.08% for the first year
and at a floating rate based upon the one-year London InterBank Offered Rate
plus 2% thereafter. The term loans are represented by secured promissory notes
maturing December 31, 2004. Principal and interest are payable quarterly
beginning March 31, 1999. The $25.0 million proceeds were used to retire
previously issued debt.

     Coincident with the credit facility and floating rate agreements, CBI has
entered into two interest rate swap agreements with a bank affiliated with the
lending group to fix the interest rates. The first agreement went into effect on
July 6, 1999 and fixes the interest rate at 5.76% on $15 million of the debt.
The second agreement goes into effect on January 18, 2000 and fixes the rate at
5.29% on $15 million of the debt.

                                       29
<PAGE>   30

                           PART II. OTHER INFORMATION

ITEM 4. EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits

<TABLE>
<CAPTION>
        EXHIBIT
          NO.                                    DESCRIPTION
        -------                                  -----------
<C>                      <S>
           2.1           -- Reorganization Agreement, by and among Clark/Bardes,
                            Inc., Clark/Bardes, Inc. and the Predecessor Company
                            (Incorporated herein by reference to Exhibit 2.1 of
                            Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
           2.2           -- Letter of Intent, dated May 29, 1998, from Clark/Bardes,
                            Inc. and the Schoenke Companies (Incorporated herein by
                            reference to Exhibit 2.2 of Clark/Bardes' Registration
                            Statement on Form S-1, File No. 333-56799).
           2.3           -- Asset Purchase Agreement, dated September 5, 1997, among
                            Clark/Bardes, Inc., Bank Compensation Strategies, Inc.,
                            et al. (Incorporated herein by reference to Exhibit 2.3
                            of Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
           2.4           -- Letter of Understanding, dated October 1, 1998, by and
                            between Clark/Bardes Holdings, Inc. and the Wiedemann &
                            Johnson Company (Incorporated herein by reference to
                            Exhibit 10 of Clark/Bardes' Quarterly Report on Form
                            10-Q, File No. 000-24769, filed with the SEC on November
                            16, 1998).
           2.5           -- Asset Purchase Agreement, dated September 18, 1998, with
                            Schoenke & Associates Corporation, Schoenke & Associates
                            Securities Corporation and Raymond F. Schoenke, Jr.
                            (Incorporated herein by reference to Exhibit 2.2 of
                            Clark/Bardes' Current Report on Form 8-K, File No.
                            000-24769, filed with the SEC on October 2, 1998).
           2.6           -- Asset Purchase Agreement, dated November 16, 1998, by and
                            among Clark/Bardes, Inc., Clark/Bardes, Inc., Wiedemann &
                            Johnson Company, Bruce Hlavacek and Jennie Hlavacek
                            (Incorporated herein by reference to Exhibit 2.6 of
                            Clark/Bardes' Annual Report on Form 10-K, File No.
                            000-24769, filed with the SEC on March 31, 1999).
           2.7           -- Asset Purchase Agreement, dated April 15, 1999, by and
                            among Clark/Bardes, Inc., Clark/Bardes Holdings, Inc.,
                            Phynque, Inc., and certain shareholders of Phynque, Inc.
                            (Incorporated herein by reference to Exhibit 2.1 of
                            Clark/Bardes' Current Report on Form 8-K, File No.
                            000-24769, filed with the SEC on April 20, 1999).
           2.8           -- Agreement and Plan of Reorganization, dated May 18, 1999,
                            by and among Clark/Bardes Holdings, Inc., NICB Agency,
                            Inc., and David Shuster, Lynn High, Kathy Smith, and
                            Kelly Earls (Incorporated herein by reference to Exhibit
                            2.8 of Clark/Bardes' Quarterly Report on Form 10-Q, File
                            No. 000-24769, filed with the SEC on August 16, 1999).
           2.9           -- Asset and Stock Purchase Agreement, dated September 1,
                            1999, by and among Clark/Bardes, Inc. and The Wamberg
                            Organization Inc. and W.T. Wamberg (Incorporated herein
                            by reference to Exhibit 2.1 of Clark/Bardes' Current
                            Report on Form 8-K, File No. 000-24769, filed with the
                            SEC on September 16, 1999).
           3.1           -- Certificate of Incorporation of Clark/Bardes, Inc.
                            (Incorporated herein by reference to Exhibit 3.1 of
                            Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799, filed with the SEC on July 12, 1998).
</TABLE>

                                       30
<PAGE>   31

<TABLE>
<CAPTION>
        EXHIBIT
          NO.                                    DESCRIPTION
        -------                                  -----------
<C>                      <S>
           3.2           -- Bylaws of Clark/Bardes, Inc. (Incorporated by reference
                            to Exhibit 3.2 to Clark/ Bardes' Registration Statement
                            on Form S-1, File No. 333-56799, filed with the SEC on
                            July 12, 1998).
           3.3           -- Certificate of Amendment (Incorporated herein by
                            reference to Exhibit 3.3 of Clark/Bardes' Registration
                            Statement on Form S-1, File No. 333-56799).
           3.4           -- Certificate of Designation (Incorporated herein by
                            reference to Exhibit 3.4 of Clark/Bardes' Registration
                            Statement on Form S-1, File No. 333-56799).
           3.5           -- Certificate of Merger of NICB Agency, Inc. and
                            Clark/Bardes Holdings, Inc. (Incorporated herein by
                            reference to Exhibit 3.5 of Clark/Bardes' Quarterly
                            Report on Form 10-Q, File No. 000-24769, filed with the
                            SEC on August 16, 1999).
           4.1           -- Specimen Certificate for shares of Common Stock, par
                            value $.01 per share, of Clark/Bardes Holdings, Inc.
                            (Incorporated herein by reference to Exhibit 4.1 of
                            Clark/Bardes' Amendment No. 1 to the Registration
                            Statement on Form S-1, File No. 333-56799 filed with the
                            SEC on July 27, 1998).
           4.2           -- Rights Agreement, dated as of July 10, 1998, by and
                            between Clark/Bardes, Inc. and The Bank of New York
                            (Incorporated herein by reference to Exhibit 4.4 of
                            Clark/Bardes' Quarterly Report on Form 10-Q, File No.
                            000-24769, filed with the SEC on November 16, 1998).
          10.1           -- Clark/Bardes, Inc. 1998 Stock Option Plan (Incorporated
                            herein by reference to Exhibit 10.1 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.2           -- Administration and Services Agreement, by and between
                            Clark/Bardes, Inc. and Clark/Bardes Agency of Ohio, Inc.
                            (Incorporated herein by reference to Exhibit 10.2 of
                            Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
          10.3           -- Administration and Services Agreement, by and between
                            Clark/Bardes, Inc. and Clark/Bardes Securities, Inc.
                            (Incorporated herein by reference to Exhibit 10.3 of
                            Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
          10.4           -- Administration and Services Agreement, by and between
                            Clark/Bardes, Inc. and Clark/Bardes, Inc. of Pennsylvania
                            (Incorporated herein by reference to Exhibit 10.4 of
                            Clark/Bardes Registration Statement on Form S-1, File No.
                            333-56799).
          10.5           -- Principal Office Agreement, dated July 29, 1993, by and
                            between W.T. Wamberg and Clark/Bardes, Inc. (Incorporated
                            herein by reference to Exhibit 10.5 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.6           -- Buy-Sell Agreement for Clark/Bardes Agency of Ohio, Inc.,
                            dated April 1996, by and between Clark/Bardes Securities,
                            Inc., Clark/Bardes Agency of Ohio, Inc. and Robert
                            Kelleher (Incorporated herein by reference to Exhibit
                            10.6 of Clark/Bardes' Registration Statement on Form S-1,
                            File No. 333-56799).
          10.7           -- Note and Warrant Purchase Agreement, dated September 8,
                            1997, by and between Clark/Bardes, Inc. and Great-West,
                            Life Investors and Nationwide (Incorporated herein by
                            reference to Exhibit 10.7 of Clark/Bardes' Registration
                            Statement on Form S-1, File No. 333-56799).
          10.8           -- Note Agreement, dated September 8, 1997, by and between
                            Clark/Bardes, Inc., Great-West, Life Investors and
                            Nationwide (Incorporated herein by reference to Exhibit
                            10.8 of Clark/Bardes' Registration Statement on Form S-1,
                            File No. 333-56799).
</TABLE>

                                       31
<PAGE>   32

<TABLE>
<CAPTION>
        EXHIBIT
          NO.                                    DESCRIPTION
        -------                                  -----------
<C>                      <S>
          10.9           -- Form of Common Stock Purchase Warrant, dated September 8,
                            1997 (Incorporated herein by reference to Exhibit 10.9 of
                            Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-6799).
          10.10          -- Form of 11.00% Secured Priority Senior Secured Note Due
                            August 2004 (Incorporated herein by reference to Exhibit
                            10.10 of Clark/Bardes' Registration Statement on Form
                            S-1, File No. 333-56799).
          10.11          -- Form of 10.50% Senior Secured Note Due August 2004
                            (Incorporated herein by reference to Exhibit 10.11 of
                            Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
          10.12          -- Convertible Subordinated Note, dated September 1997
                            (Incorporated herein by reference to Exhibit 10.12 of
                            Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
          10.13          -- Medium Term Note, dated September 1997 (Incorporated
                            herein by reference to Exhibit 10.13 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.14          -- Stock Purchase Agreement, dated August 22, 1997, by and
                            among Clark/Bardes, Inc., Malcolm N. Briggs, Steven J.
                            Cochlan, G.F. Pendleton, and Don R. Teasley (Incorporated
                            herein by reference to Exhibit 10.14 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.15          -- Stock Purchase Agreement, dated August 1997, by and among
                            Clark/Bardes, Inc. and Henry J. Smith (Incorporated
                            herein by reference to Exhibit 10.15 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.16          -- Lease Agreement, dated April 24, 1998, by and between
                            Northland Center Limited Partnership and Clark/Bardes,
                            Inc. (Incorporated herein by reference to Exhibit 10.16
                            of Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
          10.17          -- Lease Agreement, dated December 30, 1994, by and between
                            C-W#5, Ltd., and Clark/Bardes, Inc. (Incorporated herein
                            by reference to Exhibit 10.17 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.18          -- Letter of Agreement to Purchase Warrants, dated June 11,
                            1998, to Nationwide (Incorporated herein by reference to
                            Exhibit 10.18 of Clark/Bardes' Registration Statement on
                            Form S-1, File No. 333-56799).
          10.19          -- Letter of Agreement to Purchase Warrants, dated June 11,
                            1998 to Life Investors (Incorporated herein by reference
                            to Exhibit 10.19 of Clark/Bardes' Registration Statement
                            on Form S-1, File No. 333-56799).
          10.20          -- Letter of Agreement to Purchase Warrants, dated June 11,
                            1998, to Great-West (Incorporated herein by reference to
                            Exhibit 10.20 of Clark/Bardes' Registration Statement on
                            Form S-1, File No. 333-56799).
          10.21          -- Phantom Stock Agreement, dated September 5, 1997, by and
                            between Clark/ Bardes, Inc. and Steven J. Cochlan
                            (Incorporated herein by reference to Exhibit 10.21 of
                            Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
          10.22          -- Employment Agreement, dated November 21, 1996, by and
                            between Clark/Bardes, Inc. and Kurt J. Laning
                            (Incorporated herein by reference to Exhibit 10.22 of
                            Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
</TABLE>

                                       32
<PAGE>   33

<TABLE>
<CAPTION>
        EXHIBIT
          NO.                                    DESCRIPTION
        -------                                  -----------
<C>                      <S>
          10.23          -- Employment Agreement, dated March 28, 1995, by and
                            between Clark/Bardes, Inc. and Keith L. Staudt
                            (Incorporated herein by reference to Exhibit 10.23 of
                            Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
          10.24          -- Employment Agreement, dated August 23, 1993, by and
                            between Clark/Bardes, Inc. and Larry Sluder (Incorporated
                            herein by reference to Exhibit 10.24 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.25          -- Employment Agreement, dated March 7, 1993, by and between
                            Clark/Bardes, Inc. and Ronald A. Roth (Incorporated
                            herein by reference to Exhibit 10.25 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.26          -- Employment Agreement, dated April 15, 1991, by and
                            between Clark/Bardes, Inc. and Sue A. Leslie
                            (Incorporated herein by reference to Exhibit 10.26 of
                            Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
          10.27          -- Employment Agreement, dated June 9, 1993, by and between
                            Clark/Bardes, Inc. and William J. Gallegos (Incorporated
                            herein by reference to Exhibit 10.27 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.28          -- Tax Indemnity Agreement by and between Clark/Bardes
                            Holdings, Inc., Clark/Bardes, Inc. and certain former
                            Shareholders of the Predecessor Company (Incorporated
                            herein by reference to Exhibit 10.28 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.29          -- Form of Employee Stock Purchase Plan (Incorporated herein
                            by reference to Exhibit 10.29 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.30          -- Form of Employment Agreement, effective as of September
                            1, 1998, by and between Clark/Bardes, Inc. and Robert E.
                            Miller (Incorporated herein by reference to Exhibit 10.30
                            of Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
          10.31          -- Form of Employment Agreement, effective as of July 1,
                            1998, by and between Clark/Bardes, Inc. and Thomas M.
                            Pyra (Incorporated herein by reference to Exhibit 10.31
                            of Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
          10.32          -- Form of Employment Agreement, effective as of July 1,
                            1998, by and between Clark/Bardes Holdings, Inc. and
                            Melvin G. Todd (Incorporated herein by reference to
                            Exhibit 10.32 of Clark/Bardes' Registration Statement on
                            Form S-1, File No. 333-36799).
          10.33          -- Form of Commission Transfer Agreement by and between W.T.
                            Wamberg, The Wamberg Organization, Inc. and Clark/Bardes,
                            Inc. (Incorporated herein by reference to Exhibit 10.33
                            of Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
          10.34          -- Letter of Agreement, dated July 24, 1998, to Great-West,
                            Life Investors and Nationwide (Incorporated herein by
                            reference to Exhibit 10.34 of Clark/Bardes' Registration
                            Statement on Form S-1, File No. 333-56799).
          10.35          -- Employment Agreement, dated September 1, 1997, by and
                            between Clark/Bardes, Inc. and Richard C. Chapman
                            (Incorporated herein by reference to Exhibit 10.35 of
                            Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
</TABLE>

                                       33
<PAGE>   34

<TABLE>
<CAPTION>
        EXHIBIT
          NO.                                    DESCRIPTION
        -------                                  -----------
<C>                      <S>
          10.36          -- Put Rights Agreement, dated as of September 9, 1997, by
                            and among Clark/Bardes, Inc., Great-West, Life Investors
                            and Nationwide (Incorporated herein by reference to
                            Exhibit 10.38 of Clark/Bardes' Registration Statement on
                            Form S-1, File No. 333-56799).
          10.37          -- Participation Rights Agreement, dated as of September 9,
                            1997, by and among Clark/Bardes, Inc., Great-West, Life
                            Investors and Nationwide (Incorporated herein by
                            reference to Exhibit 10.39 of Clark/Bardes' Registration
                            Statement on Form S-1, File No. 333-56799).
          10.38          -- Registration Rights Agreement, dated as of September 9,
                            1997, by and among Clark/Bardes, Inc., Great-West, Life
                            Investors and Nationwide (Incorporated herein by
                            reference to Exhibit 10.40 of Clark/Bardes' Registration
                            Statement on Form S-1, File No. 333-56799).
          10.39          -- Form of Letter Agreement between Phoenix Home Life and
                            Clark/Bardes Holdings (Incorporated herein by reference
                            to Exhibit 10.41 of Clark/Bardes' Registration Statement
                            on Form S-1, File No. 333-56799).
          10.40          -- Letter Agreement, dated August 14, 1998, between
                            Nationwide and Clark/Bardes Holdings (Incorporated herein
                            by reference to Exhibit 10.42 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.41          -- Letter Agreement, dated August 14, 1998, between
                            Great-West and Clark/Bardes Holdings (Incorporated herein
                            by reference to Exhibit 10.43 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.42          -- Letter Agreement, dated August 17, 1998, between General
                            American and Clark/ Bardes Holdings (Incorporated herein
                            by reference to Exhibit 10.44 of Clark/ Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.43          -- 1998 Non-Employee Director Stock Option Plan
                            (Incorporated herein by reference to Exhibit 4.7 of
                            Clark/Bardes' Registration Statement on Form S-8, File
                            No. 333-68163, filed with the SEC on December 1, 1998).
          10.44          -- Credit Agreement, dated January 15, 1999, among
                            Clark/Bardes, Inc., Bank One Texas, N.A., U.S. Bank
                            National Association, certain financial institutions, and
                            Banc One Capital Markets, Inc. (Incorporated herein by
                            reference to Exhibit 10.46 of Clark/Bardes' Annual Report
                            on Form 10-K, File No. 000-24769, filed with the SEC on
                            March 31, 1999).
          10.45          -- Lease Agreement, dated December 30, 1996, by and between
                            Bellemead Development Corporation and Schoenke &
                            Associates Corporation (Incorporated herein by reference
                            to Exhibit 10.47 of Clark/Bardes' Annual Report on Form
                            10-K, File No. 000-24769, filed with the SEC on March 31,
                            1999).
          10.46          -- Lease of Office Space, dated February 20, 1990, by and
                            between T.N.C. Northstar Associates Limited Partnership
                            and Phynque, Inc., as amended (Incorporated herein by
                            reference to Exhibit 10.46 of Clark/Bardes' Quarterly
                            Report on Form 10-Q, File No. 000-24769, filed with the
                            SEC on August 16, 1999).
          10.47          -- Form of Employment Agreement, dated April 5, 1999, by and
                            between Clark/ Bardes, Inc. and Donald Wegmiller
                            (Incorporated herein by reference to Exhibit 10.47 of
                            Clark/Bardes' Quarterly Report on Form 10-Q, File No.
                            000-24769, filed with the SEC on August 16, 1999).
         *10.48          -- Employment Agreement, dated as of September 1, 1999, by
                            and between Clark/ Bardes Holdings, Inc. and W.T.
                            Wamberg.
         *10.49          -- [NORTH BARRINGTON LEASE]
</TABLE>

                                       34
<PAGE>   35

<TABLE>
<CAPTION>
        EXHIBIT
          NO.                                    DESCRIPTION
        -------                                  -----------
<C>                      <S>
          22.1           -- Definitive Proxy Statement dated March 31, 1999
                            (Incorporated herein by reference to File No. 000-24769,
                            filed with the SEC on March 31, 1999).
         *27.1           -- Financial Data Schedule for 3 months (included with SEC
                            filed copy only).
         *27.2           -- Financial Data Schedule for 9 months (included with SEC
                            filed copy only).

</TABLE>

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

* Filed herewith.

     (b) Reports on Form 8-K

     Form 8-K, File No. 000-24769, filed on September 6, 1999, as amended by
Amendment No. 1, filed on October 4, 1999.

                                       35
<PAGE>   36

                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                            CLARK/BARDES HOLDINGS, INC.

Date  11/02/99

                                                    /s/ W.T. WAMBERG
                                            ------------------------------------
                                                        W.T. Wamberg
                                               President and Chief Executive
                                                          Officer

Date  11/02/99

                                                   /s/ THOMAS M. PYRA
                                            ------------------------------------
                                                       Thomas M. Pyra
                                             Vice President and Chief Financial
                                                          Officer
                                               (Principal Financial Officer)

Date  11/02/99

                                       36
<PAGE>   37

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
        EXHIBIT
          NO.                                    DESCRIPTION
        -------                                  -----------
<C>                      <S>
           2.1           -- Reorganization Agreement, by and among Clark/Bardes,
                            Inc., Clark/Bardes, Inc. and the Predecessor Company
                            (Incorporated herein by reference to Exhibit 2.1 of
                            Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
           2.2           -- Letter of Intent, dated May 29, 1998, from Clark/Bardes,
                            Inc. and the Schoenke Companies (Incorporated herein by
                            reference to Exhibit 2.2 of Clark/Bardes' Registration
                            Statement on Form S-1, File No. 333-56799).
           2.3           -- Asset Purchase Agreement, dated September 5, 1997, among
                            Clark/Bardes, Inc., Bank Compensation Strategies, Inc.,
                            et al. (Incorporated herein by reference to Exhibit 2.3
                            of Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
           2.4           -- Letter of Understanding, dated October 1, 1998, by and
                            between Clark/Bardes Holdings, Inc. and the Wiedemann &
                            Johnson Company (Incorporated herein by reference to
                            Exhibit 10 of Clark/Bardes' Quarterly Report on Form
                            10-Q, File No. 000-24769, filed with the SEC on November
                            16, 1998).
           2.5           -- Asset Purchase Agreement, dated September 18, 1998, with
                            Schoenke & Associates Corporation, Schoenke & Associates
                            Securities Corporation and Raymond F. Schoenke, Jr.
                            (Incorporated herein by reference to Exhibit 2.2 of
                            Clark/Bardes' Current Report on Form 8-K, File No.
                            000-24769, filed with the SEC on October 2, 1998).
           2.6           -- Asset Purchase Agreement, dated November 16, 1998, by and
                            among Clark/Bardes, Inc., Clark/Bardes, Inc., Wiedemann &
                            Johnson Company, Bruce Hlavacek and Jennie Hlavacek
                            (Incorporated herein by reference to Exhibit 2.6 of
                            Clark/Bardes' Annual Report on Form 10-K, File No.
                            000-24769, filed with the SEC on March 31, 1999).
           2.7           -- Asset Purchase Agreement, dated April 15, 1999, by and
                            among Clark/Bardes, Inc., Clark/Bardes Holdings, Inc.,
                            Phynque, Inc., and certain shareholders of Phynque, Inc.
                            (Incorporated herein by reference to Exhibit 2.1 of
                            Clark/Bardes' Current Report on Form 8-K, File No.
                            000-24769, filed with the SEC on April 20, 1999).
           2.8           -- Agreement and Plan of Reorganization, dated May 18, 1999,
                            by and among Clark/Bardes Holdings, Inc., NICB Agency,
                            Inc., and David Shuster, Lynn High, Kathy Smith, and
                            Kelly Earls (Incorporated herein by reference to Exhibit
                            2.8 of Clark/Bardes' Quarterly Report on Form 10-Q, File
                            No. 000-24769, filed with the SEC on August 16, 1999).
           2.9           -- Asset and Stock Purchase Agreement, dated September 1,
                            1999, by and among Clark/Bardes, Inc. and The Wamberg
                            Organization Inc. and W.T. Wamberg (Incorporated herein
                            by reference to Exhibit 2.1 of Clark/Bardes' Current
                            Report on Form 8-K, File No. 000-24769, filed with the
                            SEC on September 16, 1999).
           3.1           -- Certificate of Incorporation of Clark/Bardes, Inc.
                            (Incorporated herein by reference to Exhibit 3.1 of
                            Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799, filed with the SEC on July 12, 1998).
           3.2           -- Bylaws of Clark/Bardes, Inc. (Incorporated by reference
                            to Exhibit 3.2 to Clark/ Bardes' Registration Statement
                            on Form S-1, File No. 333-56799, filed with the SEC on
                            July 12, 1998).
           3.3           -- Certificate of Amendment (Incorporated herein by
                            reference to Exhibit 3.3 of Clark/Bardes' Registration
                            Statement on Form S-1, File No. 333-56799).
           3.4           -- Certificate of Designation (Incorporated herein by
                            reference to Exhibit 3.4 of Clark/Bardes' Registration
                            Statement on Form S-1, File No. 333-56799).
</TABLE>
<PAGE>   38

<TABLE>
<CAPTION>
        EXHIBIT
          NO.                                    DESCRIPTION
        -------                                  -----------
<C>                      <S>
           3.5           -- Certificate of Merger of NICB Agency, Inc. and
                            Clark/Bardes Holdings, Inc. (Incorporated herein by
                            reference to Exhibit 3.5 of Clark/Bardes' Quarterly
                            Report on Form 10-Q, File No. 000-24769, filed with the
                            SEC on August 16, 1999).
           4.1           -- Specimen Certificate for shares of Common Stock, par
                            value $.01 per share, of Clark/Bardes Holdings, Inc.
                            (Incorporated herein by reference to Exhibit 4.1 of
                            Clark/Bardes' Amendment No. 1 to the Registration
                            Statement on Form S-1, File No. 333-56799 filed with the
                            SEC on July 27, 1998).
           4.2           -- Rights Agreement, dated as of July 10, 1998, by and
                            between Clark/Bardes, Inc. and The Bank of New York
                            (Incorporated herein by reference to Exhibit 4.4 of
                            Clark/Bardes' Quarterly Report on Form 10-Q, File No.
                            000-24769, filed with the SEC on November 16, 1998).
          10.1           -- Clark/Bardes, Inc. 1998 Stock Option Plan (Incorporated
                            herein by reference to Exhibit 10.1 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.2           -- Administration and Services Agreement, by and between
                            Clark/Bardes, Inc. and Clark/Bardes Agency of Ohio, Inc.
                            (Incorporated herein by reference to Exhibit 10.2 of
                            Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
          10.3           -- Administration and Services Agreement, by and between
                            Clark/Bardes, Inc. and Clark/Bardes Securities, Inc.
                            (Incorporated herein by reference to Exhibit 10.3 of
                            Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
          10.4           -- Administration and Services Agreement, by and between
                            Clark/Bardes, Inc. and Clark/Bardes, Inc. of Pennsylvania
                            (Incorporated herein by reference to Exhibit 10.4 of
                            Clark/Bardes Registration Statement on Form S-1, File No.
                            333-56799).
          10.5           -- Principal Office Agreement, dated July 29, 1993, by and
                            between W.T. Wamberg and Clark/Bardes, Inc. (Incorporated
                            herein by reference to Exhibit 10.5 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.6           -- Buy-Sell Agreement for Clark/Bardes Agency of Ohio, Inc.,
                            dated April 1996, by and between Clark/Bardes Securities,
                            Inc., Clark/Bardes Agency of Ohio, Inc. and Robert
                            Kelleher (Incorporated herein by reference to Exhibit
                            10.6 of Clark/Bardes' Registration Statement on Form S-1,
                            File No. 333-56799).
          10.7           -- Note and Warrant Purchase Agreement, dated September 8,
                            1997, by and between Clark/Bardes, Inc. and Great-West,
                            Life Investors and Nationwide (Incorporated herein by
                            reference to Exhibit 10.7 of Clark/Bardes' Registration
                            Statement on Form S-1, File No. 333-56799).
          10.8           -- Note Agreement, dated September 8, 1997, by and between
                            Clark/Bardes, Inc., Great-West, Life Investors and
                            Nationwide (Incorporated herein by reference to Exhibit
                            10.8 of Clark/Bardes' Registration Statement on Form S-1,
                            File No. 333-56799).
          10.9           -- Form of Common Stock Purchase Warrant, dated September 8,
                            1997 (Incorporated herein by reference to Exhibit 10.9 of
                            Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-6799).
          10.10          -- Form of 11.00% Secured Priority Senior Secured Note Due
                            August 2004 (Incorporated herein by reference to Exhibit
                            10.10 of Clark/Bardes' Registration Statement on Form
                            S-1, File No. 333-56799).
          10.11          -- Form of 10.50% Senior Secured Note Due August 2004
                            (Incorporated herein by reference to Exhibit 10.11 of
                            Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
          10.12          -- Convertible Subordinated Note, dated September 1997
                            (Incorporated herein by reference to Exhibit 10.12 of
                            Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
</TABLE>
<PAGE>   39

<TABLE>
<CAPTION>
        EXHIBIT
          NO.                                    DESCRIPTION
        -------                                  -----------
<C>                      <S>
          10.13          -- Medium Term Note, dated September 1997 (Incorporated
                            herein by reference to Exhibit 10.13 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.14          -- Stock Purchase Agreement, dated August 22, 1997, by and
                            among Clark/Bardes, Inc., Malcolm N. Briggs, Steven J.
                            Cochlan, G.F. Pendleton, and Don R. Teasley (Incorporated
                            herein by reference to Exhibit 10.14 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.15          -- Stock Purchase Agreement, dated August 1997, by and among
                            Clark/Bardes, Inc. and Henry J. Smith (Incorporated
                            herein by reference to Exhibit 10.15 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.16          -- Lease Agreement, dated April 24, 1998, by and between
                            Northland Center Limited Partnership and Clark/Bardes,
                            Inc. (Incorporated herein by reference to Exhibit 10.16
                            of Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
          10.17          -- Lease Agreement, dated December 30, 1994, by and between
                            C-W#5, Ltd., and Clark/Bardes, Inc. (Incorporated herein
                            by reference to Exhibit 10.17 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.18          -- Letter of Agreement to Purchase Warrants, dated June 11,
                            1998, to Nationwide (Incorporated herein by reference to
                            Exhibit 10.18 of Clark/Bardes' Registration Statement on
                            Form S-1, File No. 333-56799).
          10.19          -- Letter of Agreement to Purchase Warrants, dated June 11,
                            1998 to Life Investors (Incorporated herein by reference
                            to Exhibit 10.19 of Clark/Bardes' Registration Statement
                            on Form S-1, File No. 333-56799).
          10.20          -- Letter of Agreement to Purchase Warrants, dated June 11,
                            1998, to Great-West (Incorporated herein by reference to
                            Exhibit 10.20 of Clark/Bardes' Registration Statement on
                            Form S-1, File No. 333-56799).
          10.21          -- Phantom Stock Agreement, dated September 5, 1997, by and
                            between Clark/ Bardes, Inc. and Steven J. Cochlan
                            (Incorporated herein by reference to Exhibit 10.21 of
                            Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
          10.22          -- Employment Agreement, dated November 21, 1996, by and
                            between Clark/Bardes, Inc. and Kurt J. Laning
                            (Incorporated herein by reference to Exhibit 10.22 of
                            Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
          10.23          -- Employment Agreement, dated March 28, 1995, by and
                            between Clark/Bardes, Inc. and Keith L. Staudt
                            (Incorporated herein by reference to Exhibit 10.23 of
                            Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
          10.24          -- Employment Agreement, dated August 23, 1993, by and
                            between Clark/Bardes, Inc. and Larry Sluder (Incorporated
                            herein by reference to Exhibit 10.24 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.25          -- Employment Agreement, dated March 7, 1993, by and between
                            Clark/Bardes, Inc. and Ronald A. Roth (Incorporated
                            herein by reference to Exhibit 10.25 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.26          -- Employment Agreement, dated April 15, 1991, by and
                            between Clark/Bardes, Inc. and Sue A. Leslie
                            (Incorporated herein by reference to Exhibit 10.26 of
                            Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
          10.27          -- Employment Agreement, dated June 9, 1993, by and between
                            Clark/Bardes, Inc. and William J. Gallegos (Incorporated
                            herein by reference to Exhibit 10.27 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
</TABLE>
<PAGE>   40

<TABLE>
<CAPTION>
        EXHIBIT
          NO.                                    DESCRIPTION
        -------                                  -----------
<C>                      <S>
          10.28          -- Tax Indemnity Agreement by and between Clark/Bardes
                            Holdings, Inc., Clark/Bardes, Inc. and certain former
                            Shareholders of the Predecessor Company (Incorporated
                            herein by reference to Exhibit 10.28 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.29          -- Form of Employee Stock Purchase Plan (Incorporated herein
                            by reference to Exhibit 10.29 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.30          -- Form of Employment Agreement, effective as of September
                            1, 1998, by and between Clark/Bardes, Inc. and Robert E.
                            Miller (Incorporated herein by reference to Exhibit 10.30
                            of Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
          10.31          -- Form of Employment Agreement, effective as of July 1,
                            1998, by and between Clark/Bardes, Inc. and Thomas M.
                            Pyra (Incorporated herein by reference to Exhibit 10.31
                            of Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
          10.32          -- Form of Employment Agreement, effective as of July 1,
                            1998, by and between Clark/Bardes Holdings, Inc. and
                            Melvin G. Todd (Incorporated herein by reference to
                            Exhibit 10.32 of Clark/Bardes' Registration Statement on
                            Form S-1, File No. 333-36799).
          10.33          -- Form of Commission Transfer Agreement by and between W.T.
                            Wamberg, The Wamberg Organization, Inc. and Clark/Bardes,
                            Inc. (Incorporated herein by reference to Exhibit 10.33
                            of Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
          10.34          -- Letter of Agreement, dated July 24, 1998, to Great-West,
                            Life Investors and Nationwide (Incorporated herein by
                            reference to Exhibit 10.34 of Clark/Bardes' Registration
                            Statement on Form S-1, File No. 333-56799).
          10.35          -- Employment Agreement, dated September 1, 1997, by and
                            between Clark/Bardes, Inc. and Richard C. Chapman
                            (Incorporated herein by reference to Exhibit 10.35 of
                            Clark/Bardes' Registration Statement on Form S-1, File
                            No. 333-56799).
          10.36          -- Put Rights Agreement, dated as of September 9, 1997, by
                            and among Clark/Bardes, Inc., Great-West, Life Investors
                            and Nationwide (Incorporated herein by reference to
                            Exhibit 10.38 of Clark/Bardes' Registration Statement on
                            Form S-1, File No. 333-56799).
          10.37          -- Participation Rights Agreement, dated as of September 9,
                            1997, by and among Clark/Bardes, Inc., Great-West, Life
                            Investors and Nationwide (Incorporated herein by
                            reference to Exhibit 10.39 of Clark/Bardes' Registration
                            Statement on Form S-1, File No. 333-56799).
          10.38          -- Registration Rights Agreement, dated as of September 9,
                            1997, by and among Clark/Bardes, Inc., Great-West, Life
                            Investors and Nationwide (Incorporated herein by
                            reference to Exhibit 10.40 of Clark/Bardes' Registration
                            Statement on Form S-1, File No. 333-56799).
          10.39          -- Form of Letter Agreement between Phoenix Home Life and
                            Clark/Bardes Holdings (Incorporated herein by reference
                            to Exhibit 10.41 of Clark/Bardes' Registration Statement
                            on Form S-1, File No. 333-56799).
          10.40          -- Letter Agreement, dated August 14, 1998, between
                            Nationwide and Clark/Bardes Holdings (Incorporated herein
                            by reference to Exhibit 10.42 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.41          -- Letter Agreement, dated August 14, 1998, between
                            Great-West and Clark/Bardes Holdings (Incorporated herein
                            by reference to Exhibit 10.43 of Clark/Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
</TABLE>
<PAGE>   41

<TABLE>
<CAPTION>
        EXHIBIT
          NO.                                    DESCRIPTION
        -------                                  -----------
<C>                      <S>
          10.42          -- Letter Agreement, dated August 17, 1998, between General
                            American and Clark/ Bardes Holdings (Incorporated herein
                            by reference to Exhibit 10.44 of Clark/ Bardes'
                            Registration Statement on Form S-1, File No. 333-56799).
          10.43          -- 1998 Non-Employee Director Stock Option Plan
                            (Incorporated herein by reference to Exhibit 4.7 of
                            Clark/Bardes' Registration Statement on Form S-8, File
                            No. 333-68163, filed with the SEC on December 1, 1998).
          10.44          -- Credit Agreement, dated January 15, 1999, among
                            Clark/Bardes, Inc., Bank One Texas, N.A., U.S. Bank
                            National Association, certain financial institutions, and
                            Banc One Capital Markets, Inc. (Incorporated herein by
                            reference to Exhibit 10.46 of Clark/Bardes' Annual Report
                            on Form 10-K, File No. 000-24769, filed with the SEC on
                            March 31, 1999).
          10.45          -- Lease Agreement, dated December 30, 1996, by and between
                            Bellemead Development Corporation and Schoenke &
                            Associates Corporation (Incorporated herein by reference
                            to Exhibit 10.47 of Clark/Bardes' Annual Report on Form
                            10-K, File No. 000-24769, filed with the SEC on March 31,
                            1999).
          10.46          -- Lease of Office Space, dated February 20, 1990, by and
                            between T.N.C. Northstar Associates Limited Partnership
                            and Phynque, Inc., as amended (Incorporated herein by
                            reference to Exhibit 10.46 of Clark/Bardes' Quarterly
                            Report on Form 10-Q, File No. 000-24769, filed with the
                            SEC on August 16, 1999).
          10.47          -- Form of Employment Agreement, dated April 5, 1999, by and
                            between Clark/ Bardes, Inc. and Donald Wegmiller
                            (Incorporated herein by reference to Exhibit 10.47 of
                            Clark/Bardes' Quarterly Report on Form 10-Q, File No.
                            000-24769, filed with the SEC on August 16, 1999).
         *10.48          -- Employment Agreement, dated as of September 1, 1999, by
                            and between Clark/ Bardes Holdings, Inc. and W.T.
                            Wamberg.
         *10.49          -- [NORTH BARRINGTON LEASE]
          22.1           -- Definitive Proxy Statement dated March 31, 1999
                            (Incorporated herein by reference to File No. 000-24769,
                            filed with the SEC on March 31, 1999).
         *27.1           -- Financial Data Schedule for 3 months (included with SEC
                            filed copy only).
         *27.2           -- Financial Data Schedule for 9 months (included with SEC
                            filed copy only).
</TABLE>

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

* Filed herewith.