PRE 14A

PRE 14A 1 pre14aproxy2002.htm PRELIMINAY PROXY STATEMENT PRE 14A

Proxy Statement Pursuant To Section 14(a) of the
Securities Exchange Act of 1934

X Filed by the Registrant
Filed by a Party other than the Registrant

Check the appropriate box:

X Preliminary Proxy Statement Confidential, For Use of the Commission
Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
Definitive Additional Materials
Soliciting Material Pursuant to Rule 14a-12

CLARK/BARDES, INC.
(Name of Registrant as Specified In Its Declaration of Trust)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box): No fee required.

Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

Fee paid previously with preliminary materials:

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement no.:

(3) Filing Party:

(4) Date Filed:

CLARK/BARDES, INC.
102 South Wynstone Park Drive
North Barrington, Illinois 60010

NOTICE OF THE 2002 ANNUAL MEETING OF THE STOCKHOLDERS
TO BE HELD APRIL 30, 2002

To our stockholders:

We cordially invite you to attend the 2002 annual meeting of our stockholders at The Signature Room at the 95th, John
Hancock Center, 875 North Michigan Avenue, Chicago, Illinois, on April 30, 2002, at 10:00 a.m. local time, for the following purposes:

(1) To elect two Class I directors to serve until the 2005 annual meeting of our
stockholders, and until the respective successor of each is duly elected and
qualified;

(2) To ratify the appointment of Deloitte & Touche by the Board of Directors as our independent accountants for the year
ended December 31, 2002;

(3) To approve an amendment to our Certificate of Incorporation, increasing the number of authorized shares of Common
Stock to 40,000,000 shares; and

(4) To transact such other business as may properly come before the annual meeting.

Any action may be taken on these matters at the annual meeting on the date specified above or on any later date if the
annual meeting is adjourned or postponed.

Your Board of Directors has established the close of business on March 5, 2002, as the record date for determining the
stockholders entitled to notice of and to vote at the annual meeting or any adjournment thereof. A list of stockholders entitled to
vote at the annual meeting will be available for inspection by stockholders for any purpose germane to the annual meeting at the
offices of the Company for the ten days immediately preceding the annual meeting date.

We have included, along with this notice, a proxy statement and our 2001 Form 10-K, which describes certain of our
activities during 2001 and contains our financial statements for the year ended December 31, 2001. The Form 10-K does not form any
part of the material for solicitation of proxies.

Your vote is important. We urge you, whether or not you plan to attend the annual meeting, to sign, date and mail the
enclosed proxy card in the envelope provided. If you have submitted a proxy and then attend the annual meeting in person, you may
revoke the proxy and vote in person on all matters submitted at the annual meeting.

CLARK/BARDES, INC.

W.T. Wamberg
Chairman of the Board and Chief Executive Officer

March 29, 2002
North Barrington, Illinois

CLARK/BARDES, INC.
102 South Wynstone Park Drive
North Barrington, Illinois 60010

PROXY STATEMENT

2002 ANNUAL MEETING OF THE STOCKHOLDERS
TO BE HELD APRIL 30, 2002

INTRODUCTION

Your Board of Directors hereby solicits your proxy on behalf of Clark/Bardes, Inc. for use at the 2002 annual meeting of our
stockholders and any continuation of the meeting pursuant to any adjournment thereof. The annual meeting will be held at The
Signature Room at the 95th, John Hancock Center, 875 North Michigan Avenue, Chicago, Illinois, on April 30, 2002, at 10:00 a.m. local
time.

Our principal executive office is located at 102 South Wynstone Park Drive, North Barrington, Illinois 60010. Our telephone
number is (847) 304-5800. We will mail this proxy statement and the accompanying proxy card on or about March 29, 2002. The date of
this proxy statement is March 29, 2002.

PURPOSES OF THE ANNUAL MEETING

At the annual meeting, the holders of record of shares of our Common Stock, $.01 par value per share, on March 5, 2002 will
be entitled to vote upon the following matters:

(1) The proposal to elect two Class I directors to serve until the 2005 annual
meeting of our stockholders and until the respective successor of each is duly
elected and qualified (“Proposal One”);

(2) The ratification of the appointment of Deloitte & Touche by your Board of
Directors as the Company’s independent accountants for the year ended
December 31, 2002 (“Proposal Two”);

(3) The adoption of an amendment to our Certificate of Incorporation, increasing the number of authorized shares of
Common Stock to 40,000,000 ("Proposal Three"); and

(4) The transaction of such other business as may properly come before the annual meeting.

Your Board of Directors recommends that you vote "FOR" each of Proposal One, Proposal Two and Proposal Three.

GENERAL INFORMATION

Record Date and Stockholders List

The Board of Directors has established the close of business on March 5, 2002, as the record date for determining the
stockholders entitled to notice of and to vote at the annual meeting. On this record date, we had 16,541,111 shares of our Common
Stock outstanding. We did not have any other shares of capital stock outstanding on the record date.

A list of stockholders entitled to vote at the annual meeting, which will be arranged in alphabetical order and which will
show each stockholder's address and the number of shares registered in his or her name, will be open to any stockholder to examine
for any purpose related to the annual meeting. You may examine this list during ordinary business hours commencing April 16, 2002,
and continuing through the date of the annual meeting at our principal office, at 102 South Wynstone Park Drive, North Barrington,
Illinois 60010.

Quorum, Required Vote and Voting Rights

Quorum. The presence, in person or by proxy, of stockholders holding a majority of the outstanding shares of our Common
Stock on the record date will constitute a quorum at the annual meeting. Shares that are represented at the annual meeting but
abstain from voting on any or all matters and shares that are "broker non-votes" will be counted in determining whether a quorum is
present at the annual meeting. A "broker non-vote" occurs when a broker or nominee votes on some matters on the proxy card but not on
others because he or she does not have the authority to do so. The election inspectors appointed for the annual meeting will
determine the number of shares of our Common Stock present at the meeting, determine the validity of proxies and ballots, determine
whether or not a quorum is present, and count all votes and ballots. Unless a quorum is present at the annual meeting, no action may
be taken at the meeting except an adjournment until a later time.

Required Vote. With respect to Proposal One, a plurality of all the votes cast by stockholders, in person or by proxy, will
elect each nominee for director. A majority of the votes cast, in person or by proxy, is required for Proposal Two. A majority of
all of the stockholders entitled to vote must approve Proposal Three. Abstentions are not counted as a vote cast, and will not
affect the outcome of Proposal One or Proposal Two, but will have the effect of a vote against Proposal Three. Broker non-votes will
not be entitled to vote with respect to any proposals. Therefore, broker non-votes will have no effect on the outcome of Proposal
One or Proposal Two, but will have the effect of a vote against Proposal Three.

Voting Rights. With respect to each proposal, you will be entitled to one vote per share of Common Stock held as of the
record date.

Proxies

Thomas M. Pyra and Paul J. Bennett, the persons named as proxies on the proxy card accompanying this proxy statement, were
selected by the Board of Directors to serve as proxies. Messrs. Pyra and Bennett are officers of the Company. Each executed and
returned proxy card will be voted according to the directions indicated on that proxy card. If no direction is indicated, the proxy
will be voted according to your Board of Directors' recommendations, which are contained in this proxy statement.

The Board of Directors does not intend to present, and has no information that others will present, any business at the
annual meeting that requires a vote on any other matter other than what is presented in this Proxy Statement. If any other matter
requiring a vote properly comes before the annual meeting, the proxyholders will vote the proxies that they hold in accordance with
their best judgment, including voting them to adjourn the annual meeting to another time if a quorum is not present at the annual
meeting or if they believe that an adjournment is in our best interests.

If you give a proxy, you may revoke it at any time before the shares of Common Stock it represents are voted. This
revocation is effective upon receipt, at any time before the annual meeting is called to order, by our corporate secretary of either
(i) an instrument revoking the proxy or (ii) a duly executed proxy bearing a later date than the preceding proxy. Additionally, you
may change or revoke a previously executed proxy by voting in person at the annual meeting.

Proxy Solicitation Costs

We will bear the cost of soliciting proxies, including reasonable charges and expenses of brokerage firms or other nominees
for forwarding proxy material to beneficial owners of our Common Stock. In addition to solicitation by mail, proxies may be
solicited electronically, by telephone, telegraph, or personally, by certain officers and regular employees of the Company and its
divisions without extra compensation.

PROPOSAL ONE

ELECTION OF DIRECTORS

General

The Board of Directors is divided, as nearly equal in number as possible, into three classes, denominated Class I, Class II
and Class III and currently consists of six directors. Some of these directors also serve as directors of our subsidiary,
Clark/Bardes Consulting, Inc. The Board of Directors has nominated two Class I directors, George D. Dalton and Steven F. Piaker, to
continue to serve as Class I directors for a three year term until the annual meeting of stockholders to be held in 2005 and until
the respective successor of each is duly elected and qualified. The four directors whose terms of office expire in 2003 and 2004 will
continue to serve after the annual meeting until such time as their respective terms of office expire and until their respective
successors are duly elected and qualified. See "--Other Directors" below. Your Board of Directors recommends that the stockholders
vote "FOR" the election of the nominees named in this proxy statement to continue to serve as directors of Clark/Bardes, Inc. See "--
Nominees for Election as Class I Directors" below.

Nominees for Election as Class I Directors

The Board of Directors has nominated the following persons to serve as Class I directors until the 2005 annual meeting of
our stockholders and until the respective successor of each is duly elected and qualified:

Name Age Position Director Class
George D. Dalton 73 Director Class I
Steven F. Piaker 38 Director Class I

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George D. Dalton has served as a director and a member of the Compensation Committee of our Board of Directors since October
1998 and a member of the Audit Committee of our Board of Directors since January 2000. His current term as a director expires at the
2002 annual meeting of our stockholders. Mr. Dalton has a director of Fiserv Inc., a public company engaged in data processing
outsourcing since 1984 and was its Chief Executive Officer from 1984-1999. Since August 2000, Mr. Dalton has served as the Chairman
and Chief Executive Officer of CALL-Solutions, Inc., a provider of call center services located in Waukesha, WI. He also serves as a
director of Fiduciary Management, Inc. and is Chairman of the Milwaukee School of Engineering Board of Regents as well as Chairman of
the Milwaukee Public Museum.

Steven F. Piaker has served as a director since June 1999 and a member of the Audit and Compensation Committees of our Board
of Directors since January 2000. His current term as a director expires at the 2002 annual meeting of our stockholders. Mr. Piaker
acquired his board seat in connection with our private placement of Common Stock to Conning Capital Partners V, L.P. Mr. Piaker is
a partner with Conning Capital Partners, a private equity firm specializing in financial services. He joined Conning Capital
Partners in 1994. Mr. Piaker also sits on the boards of Annuity Net, Inc., Digital Lighthouse Corporation, Intersections Inc. and
MedSpan, Inc. Prior to joining Conning Capital Partners V, L.P., Mr. Piaker was a Senior Vice President of Conseco where he was
involved in forming Conseco Capital Partners II, L.P. and completing a number of private equity investments. Prior to that, Mr.
Piaker was a Vice President in GE Capital's Corporate Finance Group, focusing on leveraged investments and acquisitions in the
insurance and financial services industries. A Chartered Financial Analyst, Mr. Piaker is a graduate of the University of Rochester
and holds an M.B.A. from Duke University's Fuqua School of Business.

Your Board of Directors recommends a vote FOR the above nominees as directors.

Other Directors

The following persons will continue to serve as directors of the Company after the annual meeting until such time as their
respective terms of office expire and until their respective successors are duly elected and qualified.

Name Age Position Director Class
L. William Seidman 80 Director Class II
William Archer 73 Director Class II
Randolph A. Pohlman 57 Director Class III
W.T. Wamberg 48 Chairman, CEO and Director Class III

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L. William Seidman has served as a director and a member of the Compensation Committee of our Board of Directors since June
1998 and a member of the Audit Committee of our Board of Directors since January 2000. Mr. Seidman's current term as a director
expires at the 2003 annual meeting of our stockholders. From September 1997 until July 1998, Mr. Seidman served as a member of our
predecessor company's advisory board. Mr. Seidman is the chief commentator on NBC cable network's CNBC and publisher of Bank Director
magazine. From 1985 to 1991, Mr. Seidman served as the Chairman of the Federal Deposit Insurance Corporation under Presidents Reagan
and Bush. He became the Chairman of the Resolution Trust Corporation in 1989 and served in that capacity until 1991. Prior to that,
Mr. Seidman served as President Reagan's co-chair of the White House Conference on Productivity, President Ford's Assistant of
Economic Affairs and a member of the Arizona Governor's Commission on Interstate Banking. A former dean of Arizona State's College of
Business, Mr. Seidman holds an A.B. from Dartmouth (Phi Beta Kappa), an LL.B. from Harvard Law School and an M.B.A. (with honors)
from the University of Michigan.

William Archer has served as director since February 2001 and his current term as director expires at the 2003 annual
meeting of our stockholders. Mr. Archer is Senior Policy Advisor to PricewaterhouseCoopers, LLP, a major accounting and consulting
firm. From January 1971 to January 2001, Mr. Archer was a member of the U.S. House of Representatives where he most recently served
as Chairman of the House Ways and Means Committee.

Randolph A. Pohlman has served as a director and a member of the Compensation Committee of our Board of Directors since June
1998 and a member of the Audit of our Board of Directors since January 2000 of which he is Chairman. Mr. Pohlman's current term as a
director expires at the 2004 annual meeting of our stockholders. From February 1996 until July 1998, Mr. Pohlman served as a member
of our predecessor company's advisory board. Since July 1995, Mr. Pohlman has served as the Dean of the School of Business and
Entrepreneurship at Nova Southeastern University in Fort Lauderdale, Florida. From April 1990 to July 1995, Mr. Pohlman served as
Director of Human Resources World Wide for Koch Industries. Mr. Pohlman graduated from Kansas State University with Bachelor of
Science and Master of Science degrees in Business Administration and, in addition, earned a Ph.D. in finance from Oklahoma State
University.

W.T. Wamberg has served as the Chairman of the Board of Directors and a director since June 1998. Mr. Wamberg's current term
as a director expires at the 2004 annual meeting of our stockholders. Mr. Wamberg became our President and Chief Executive Officer in
September 1999 in connection with our acquisition of The Wamberg Organization. Mr. Wamberg served as a director of our predecessor
company from 1988 and served as the Chairman of the Board of our predecessor company from September 1996 until July 1998. Mr.
Wamberg, who has been a consultant for us since 1976, was President and Chief Executive Officer of The Wamberg Organization, Inc., an
independently operated sales office that marketed our products, until we acquired it in September 1999. Mr. Wamberg graduated from
Baldwin-Wallace College with a Bachelor of Arts degree in finance. Mr. Wamberg was formerly President of the Association for Advanced
Life Underwriting.

Committees and Meetings of the Board of Directors

Meeting of the Board of Directors. Our business is under the general management of the Board of Directors. There are
presently six directors, including five independent directors. The Board of Directors held four regularly scheduled and five special
meetings during 2001, and each of the directors attended at least 75% of these meetings.

Committees. The Board of Directors has two standing committees, consisting of an Audit Committee and Compensation Committee.
The Audit Committee reviews the scope and approach of our annual audit, our annual financial statements and the auditors' report
thereon and the auditors' comments relative to the adequacy of our system of internal controls and accounting systems. The Audit
Committee also recommends to the Board of Directors the appointment of independent public accountants for the following year.
Members of the Audit Committee are independent directors as such term is defined in Sections 303.01(B)(2)(a) and (3) of The New York
Stock Exchange Listed Company Manual. The Audit Committee met a total of four times in fiscal year 2001. The members of the Audit
Committee are Messrs. Dalton, Pohlman, Piaker and Seidman.

The Compensation Committee reviews management compensation levels and provides recommendations to your Board of Directors
regarding salaries and other compensation for our executive officers, including bonuses and incentive plans, and administers our 1998
Stock Option Plan. The Compensation Committee met a total of five times during fiscal year 2001. The members of the Compensation
Committee are Messrs. Dalton, Pohlman, Piaker and Seidman.

The Board of Directors has no standing Nominating Committee, and the entire Board of Directors acts in this capacity.

Compensation of Directors

The members of the Board of Directors who are also employees receive no additional compensation for their services as a
director.

Upon their initial election to our Board, non-employee directors, other than Mr. Pohlman, are paid an annual stipend of
$15,000, and all non-employee directors are reimbursed all reasonable expenses incurred by them related to their services as
non-employee directors. Upon reelection to an additional term, the annual stipend is increased to $20,000. In addition, non-employee
directors, other than Mr. Pohlman, are eligible to participate in the 1998 Non-Employee Director Stock Option Plan.

OUR EXECUTIVE OFFICERS

Executive Officers

Set forth below is a table identifying our executive officers who are not identified herein as a director or nominee for
director. Many of our executive officers also hold similar offices with our subsidiary, Clark/Bardes Consulting, Inc. The Board of
Directors elects our officers. Each of the officers holds office until his successor is duly elected and qualified or until their
earlier death, disqualification, retirement, resignation or removal from office.

Name Age Position
Richard C. Chapman 46 Executive Vice President
Donald C. Wegmiller 63 Executive Vice President
Thomas M. Pyra 49 Chief Financial Officer and Chief Operations
Officer
James C. Bean 49 Senior Vice President and Chief Integration
Officer

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Richard C. Chapman became an Executive Vice President in July 1998. Since September 1997, Mr. Chapman has also served as the
President of our Banking Practice Group. Prior to joining us, Mr. Chapman was a consultant for Bank Compensation Strategies since
1985 and served as President of Bank Compensation Strategies since January 1994. Prior to joining Bank Compensation Strategies, Mr.
Chapman was an officer with First Bank System, a regional bank holding company in Minneapolis, Minnesota. Mr. Chapman graduated cum
laude from Augustana College, with a major in mathematics and business administration.

Donald C. Wegmiller became an Executive Vice President upon our acquisition of Management Compensation Group/Healthcare in
April 1999. He was also President of our Healthcare Group until February 2002. Prior to joining Management Compensation
Group/Healthcare, he served as Vice Chairman and President of HealthSpan Health Systems Corporation. Mr. Wegmiller continues to hold
policy positions in state and national health care associations. He has served on the boards of fourteen publicly held corporations
over the past 20 years, and currently serves on the board of LecTec Corporation; JLJ Medical Devices International, LLC, ALLETE, and
as Chairman of Possis Medical, Inc. From 1986 to 1988, Mr. Wegmiller served as an officer of the American Hospital Association, and
he served as the organization's Chairman in 1987. Mr. Wegmiller received a Bachelor degree magna cum laude from the University of
Minnesota and a Master of Hospital Administration Degree from the University of Minnesota. He also teaches health care administration
at the University of Minnesota, Duke University and Arizona State University.

Thomas M. Pyra became Chief Financial Officer in July 1998 and Chief Operations Officer in October 1999. Prior to joining
us, Mr. Pyra served as Vice President and Chief Financial Officer of Geodesic Systems, L.L.C. from April 1997. He also served as
Chief Financial Officer for Recompute Corporation from October 1995 until January 1997 and served as Vice President and Controller of
Intercraft Company from October 1992 until June 1995. Mr. Pyra received a Bachelor of Science degree in finance and an MBA from
DePaul University.

James C. Bean has served as a Senior Vice President and Chief Integration Officer since July 2000. From February 1998
through July 2000, he was Chief Operating Officer of the Banking Practice Group. Prior to joining us, Mr. Bean held leadership
positions at Mullin Consulting and Management Compensation Group/Healthcare and has 15 years experience in our industry. He also has
experience in sales, international marketing, product management, manufacturing management and human resources in both small private
as well as large public corporations. Mr. Bean received a B.A. from the University of Minnesota.

OWNERSHIP OF COMMON STOCK BY
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information with respect to the beneficial ownership of our Common Stock as of March 5, 2002
by:

o each person who we know beneficially owns more than 5% of our Common Stock;

o each of our directors;

o each of our "named" executive officers; and

o all directors and executive officers as a group.

The term “beneficial ownership” includes shares over which the indicated beneficial owner
exercises voting and/or investment power. The rules also deem common stock
subject to options currently exercisable, or exercisable within 60 days, to be
beneficially owned and outstanding for the purpose of computing the percentage
of beneficial ownership of the person owning such options, but they do not deem
such stock to be outstanding for purpose of computing the percentage ownership
by any person.

Except as otherwise indicated, the address for each stockholder listed is c/o Clark/Bardes, Inc., 102 South Wynstone Park
Drive, North Barrington, Illinois 60010. To our knowledge, except as otherwise interested, each of the persons listed in this table
has voting and investment power with respect to all the shares indicated. Percentage of ownership is based on 16,541,111 shares of
our Common Stock outstanding on March 5, 2002.

Shares Beneficially Owned
Name of Beneficial Owner Percent
----------------------------------------------------------------- --------------------------- ------------
----------------------------------------------------------------- --------------------------- ------------
Wellington Management Company, LLP1 1,188,060 9.31%
75 State Street
Boston, Massachusetts 02109
----------------------------------------------------------------- --------------------------- ------------
Conning Capital Partners V, L.P.2 1,100,000 8.6%
CityPlace II, 185 Asylum Street
Hartford, Connecticut 06103
----------------------------------------------------------------- --------------------------- ------------
Liberty Wanger Asset Management, LP3 930,000 7.3%
227 West Monroe Street, Suite 3000
Chicago, Illinois 60606
----------------------------------------------------------------- --------------------------- ------------
Life Investors Insurance Company of America4 1,150,839 6.8%
4333 Edgewood Road, NE
Cedar Rapids, Iowa 52499
Phoenix Home Life Mutual Insurance Company5 1,111,155 6.6%
One American Row
Hartford, Connecticut 06102
W. T. Wamberg 1,936,580 11.5%
William Archer6 6,587 *
George D. Dalton7 31,530 *
Steven F. Piaker8 20,033 *
Randolph A. Pohlman9 54,000 *
L. William Seidman10 39,263 *
James C. Bean11 25,727 *
Richard C. Chapman12 271,904 1.6%
Thomas M. Pyra13 175,590 *
Donald C. Wegmiller 121,038 *
----------------------------------------------------------------- --------------------------- ------------
*Less than 1%

1 Based solely upon information contained in Schedule 13G/A, filed with the SEC on February 12,
2002.
2 Based solely upon the information contained in the Schedule 13G/A filed
with the SEC on February 13, 2002.
3 Based solely upon information contained in Schedule 13GA filed with the SEC on February 13, 2002.
4 Based solely upon information contained in Schedule 13G filed with the SEC on February 14, 2001.
5 Based solely upon information contained in Schedule 13G filed with the SEC on February 14, 2001.
6 Includes 6,587 shares of common stock issuable upon exercise of currently exercisable options or options exercisable within 60 days.
7 Includes 24,530 shares of common stock issuable upon exercise of currently
exercisable options or options exercisable within 60 days.
8 Includes 20,033 shares of common stock issuable upon exercise of currently exercisable options or options exercisable within 60
days.
9 Includes 54,000 shares of common stock issuable upon exercise of currently exercisable options or options exercisable within 60
days.
10 Includes 34,263 shares of common stock issuable upon exercise of currently exercisable options or options exercisable within 60
days.
11 Includes 23,750 shares of common stock issuable upon exercise of currently exercisable options or options exercisable within 60
days.
12 Includes 67,750 shares of common stock issuable upon exercise of currently exercisable options or options exercisable within 60
days.
13 Includes 100,000 shares of common stock issuable upon exercise of currently exercisable options or options exercisable within 60
days.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16 of the Securities Exchange Act of 1934, as amended ("Section 16") requires that reports of beneficial ownership
of common stock and changes in such ownership be filed with the Securities and Exchange Commission by the Company's directors,
officers and persons who own more than 10% of our Common Stock. The Company is required to conduct a review and to identify in its
proxy statement each director, officer or person who owns more than 10% of our Common Stock who failed to file a required report
under Section 16 on a timely basis. Based upon that review, the Company believes that all forms were filed in a timely manner during
fiscal 2001 except for a Form 4 to be filed by each of Richard C. Chapman and W.T. Wamberg in respect of transactions in November
2001 related to our Secondary Offering. Such transactions have subsequently been reported on separate Forms 5 filed by Richard C.
Chapman and W.T. Wamberg in February 2002.

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth the annual and long-term compensation earned during the last three fiscal years with respect
to our Chief Executive Officer and our four most highly compensated executive officers in 2001 other than the Chief Executive Officer.

Annual Compensation Long Term
Compensation
Securities
Name and Underlying All Other
Principal Position Year Salary($) Bonus($)(1) Options(#) Compensation($)(
W. T. Wamberg 2001 $ 352,000 $ 440,330 100,000 $ 220,180
Chairman of the Board, Chief 2000 260,000 200,240 -- 10,528
Executive Officer and Director 1999 87,872 100,540 -- --
Thomas M. Pyra 2001 $ 330,510 $ 384,627 40,000 $ 32,758
Chief Financial Officer and 2000 220,000 206,616 -- 74,048
Chief Operations Officer 1999 219,468 220,000 50,000 83,340
Richard C. Chapman 2001 $ 330,510 $ 427,700 35,000 $ 20,100
Executive Vice President 2000 287,507 273,707 9,000 --
1999 253,212 195,000 10,000 --
Donald C. Wegmiller 2001 $ 335,010 $ -- -- $ 345,438
Executive Vice President 2000 638,846 -- -- --
1999 257,700 251,354 185,000 57,759
James C. Bean 2001 $ 230,000 $ 297,850 55,000 --
Senior Vice President 2000 192,500 81,812 25,000 --
1999 179,667 98,817 -- --
_______________
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(1) Bonuses represent incentive compensation, whether under employment agreements
entered into with the named executive officers, or otherwise. See
“Management—Employment Agreements.” Bonuses reflect amounts
earned by the named executive officers during the referenced year, even though
paid in the following year.

Option Grants in Last Fiscal Year

The following table sets forth certain information concerning the options granted to the named executive officers during
2001. The options were granted pursuant to our 1998 Stock Option Plan. No stock appreciation rights were granted during 2001. For
additional information on and certain terms of options, see "--1998 Stock Option Plan."

Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation for
Option Term ($) (1)
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees in Price Expiration
Name Granted Fiscal Year ($/Sh) Date
5% 10%
W.T. Wamberg................. 100,000 18.7 25.28 12/21/11 4,118,112 6,557,632
Thomas M. Pyra............... 40,000 7.5 25.28 12/21/11 1,647,245 2,623,053
Richard C. Chapman........... 35,000 6.5 25.28 12/21/11 1,441,339 2,295,171
Donald C. Wegmiller.......... -- -- -- -- -- --
James C. Bean................ 15,000 2.8 11.50 01/31/01 281,003 447,465
James C. Bean................ 40,000 7.5 25.28 1/30/11 1,647,245 2,623,053
__________
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(1) In accordance with the rules of the SEC, the amounts shown on this table
represent hypothetical gains that could be achieved for the respective options
if exercised at the end of the option term. These gains are based on the assumed
rates of stock appreciation of 5.0% and 10.0% compounded annually from the date
the respective options were granted to their expiration date and do not reflect
our estimates or projections of future Common Stock prices. The gains shown are
net of the option exercise price, but do not include deductions for taxes or
other expenses associated with the exercise. Actual gains, if any, on stock
option exercises will depend on the future performance of our Common Stock, the
option holder’s continued employment through the option period, and the
date on which the options are exercised.

Options Exercised in Last Fiscal Year

The following table sets forth certain information concerning all unexercised options held by the named executive officers
as of December 31, 2001. For additional information on and certain terms of such options, see "--1998 Stock Option Plan." No options
were exercised by named executive officers during 2001.

Number of Unexercised Options Value of Unexercised In-the-Money
at Fiscal Year-End(#) Options at Fiscal Year-End(1)
Name Exercisable Unexercisable Exercisable Unexercisable
W.T. Wamberg..................... 0 100,000 -- --
Thomas M. Pyra................... 100,000 40,000 1,335,500 --
Richard C. Chapman............... 65,250 53,750 980,363 281,488
Donald C. Wegmiller.............. -- 185,000 -- 1,591,000
James C. Bean.................... 23,750 81,250 345,463 471,988
_____________
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Value for “in-the-money” options represents the positive spread
between the respective exercise prices of outstanding options and the closing
price of $25.23 on December 31, 2001.

Our Stock Benefit Plans

1998 Stock Option Plan

A total of 2,000,000 shares of our Common Stock has been reserved for issuance under our 1998 Stock Option Plan. The 1998
Stock Option Plan was initially adopted by our predecessor company in March 1997. We assumed, amended and restated it in July 1998.
The 1998 Stock Option Plan is administered by the Board of Directors or the Compensation Committee, who have full authority to
determine the individuals to whom, and the time at which, the options may be granted and the number of shares covered by each option.
Both nonqualified stock options and incentive stock options (as defined in the Internal Revenue Code) may be granted under the 1998
Stock Option Plan. The option price per share is determined by the Compensation Committee but may not be less than fair market value
for incentive stock options. Options may be granted to our officers, employees (including officers who may be directors),
non-employee directors or licensed insurance producers. Incentive stock options are not transferable or assignable by an optionee
other than by will or the laws of descent and distribution. Nonqualified stock options may be transferred to certain permitted
transferees to the extent permitted in the applicable nonqualified stock option agreement granting any such nonqualified stock
options.

As of March 5, 2002, 1,761,100 options had been granted under the 1998 Stock Option Plan, of which 91,523 were exercised in
2001 and 1,581,727 of which remained outstanding. A total of 326,750 shares of our Common Stock remain available for grant as of
March 5, 2002.

1998 Non-Employee Director Stock Option Plan

The Board of Directors adopted the original plan in September 1998 and adopted the amended and restated non-employee
director plan in January 2000. The amended and restated plan was approved by our stockholders at last year's annual meeting. On
December 1, 1998, we filed with the Commission a registration statement on Form S-8 registering the shares of Common Stock underlying
the options offered under this plan. A total of 100,000 shares of our Common Stock has been reserved for issuance under our
Non-Employee Director Plan. The Non-Employee Director Plan is administered by either the Board of Directors or the Compensation
Committee. Only nonqualified options may be granted under the Non-Employee Director Plan. All of our non-employee directors, other
than Mr. Pohlman, may participate in the Non-Employee Director Plan. The Non-Employee Director Plan provides for the automatic grant
of stock options to purchase 10,000 shares of our Common Stock to each newly elected non-employee director on the first day of the
month following the election of such director. The appointment stock options vest and become exercisable over three years in
increments of 277 shares on the first day of every month beginning in the month immediately after the stock options were granted. The
Non-Employee Director Plan also provides for the automatic grant of stock options to purchase 4,000 shares of our Common Stock to
continuing non-employee directors on the first day of the month immediately following our annual stockholder meetings. The annual
grants of stock options to continuing non-employee directors vest and become exercisable in increments of 2,000 shares for each
regularly scheduled quarterly meeting of the Board of Directors that the non-employee director attends in person. The exercise price
for stock options granted under the Non-Employee Director Plan is the fair market value of our Common Stock on the date of grant.

As of March 5, 2002, 85,110 options had been granted under the Non-Employee Director Plan, and a total of 14,890shares of
our Common Stock remain available for grant.

Employee Stock Purchase Plan

In July 1998, the Board of Directors adopted the Employee Stock Purchase Plan, under which a total of 200,000 shares of our
Common Stock have been reserved for issuance. A committee of directors appointed by your Board of Directors administers the Employee
Stock Purchase Plan. Any employee who has been our employee for 90 days is eligible to participate in offerings under the Employee
Stock Purchase Plan.

The Employee Stock Purchase Plan consists of eight semi-annual offerings of our Common Stock beginning on each January 1 and
July 1 in each of the years 1999, 2000, 2001 and 2002, and terminating on June 30 and December 31 of each year. The maximum number of
shares issuable under the Plan is 50,000 per year plus the number of unissued shares from prior offerings for each year.

On the commencement date of each offering under the Employee Stock Purchase Plan, a participating employee will be deemed to
have been granted an option to purchase a maximum number of shares of Common Stock equal to: (i) the percentage of the employee's
base pay that the employee has elected to be withheld (not to exceed 10%), (ii) multiplied by the employee's base pay during the
period of the offering and (iii) divided by the lower of 85% of the closing market price of our Common Stock on the applicable
offering commencement date or 85% of the closing market price of our Common Stock on the offering termination date. Options held by a
participant may be exercised by that participant.

No employee may be granted options pursuant to the Employee Stock Purchase Plan if, as a result of a grant, an employee
would (i) own stock or hold options to purchase stock possessing 5% or more of the total combined voting power or value of all
classes of our stock or (ii) have rights to purchase stock under all our employee stock purchase plans that accrue at a rate in
excess of $25,000 in fair market value for any calendar year.

Unless a participant gives written notice to us, his or her option for the purchase of our Common Stock with payroll
deductions made during an offering will be deemed to have been exercised automatically on the offering termination date applicable to
such offering, for the purchase of the number of full shares of Common Stock that the accumulated payroll deductions at that time
will purchase at the applicable option price. A participant may withdraw payroll deductions credited to his account under the
Employee Stock Purchase Plan at any time.

In the four semi-annual offering periods to date, a total of 143,493 shares have been reserved for issuance. The average
cost of the shares is $11.79 or $1,609,395 to the participants and $13.24 or $1,889,288 to the Company.

Employment Agreements

Chairman and Chief Executive Officer

As part of our acquisition of The Wamberg Organization, we entered into an employment agreement, effective as of September
1, 1999, with W.T. Wamberg (the "Agreement"). The Agreement is for a term of five years, and provides for a base salary of $260,000
and bonuses of up to 140% of base salary, in the discretion of the Board of Directors' Compensation Committee. The Agreement contains
provisions concerning non-competition, non-solicitation and confidentiality. During the term of the Agreement, Mr. Wamberg is to be
employed as our Chief Executive Officer, and Mr. Wamberg has agreed to devote substantially all of his business time and attention to
this task. If Mr. Wamberg's duties or position differs materially from that of the Chief Executive Officer, upon termination without
Cause, or upon a Change of Control (as such terms are defined in the Agreement), Mr. Wamberg may terminate his employment and elect
to receive either 12 months salary plus accrued and unpaid benefits or no severance compensation and a waiver of the non-competition
and non-solicitation covenants. Mr. Wamberg may also voluntarily terminate the Agreement upon 30 days notice without any further
obligation.

Named Executives

James C. Bean is a party to an employment agreement with the Company dated March 1, 2001 (the "Agreement") and amended
November 5, 2001 (the "Amendment"). The term of the Agreement continues for one year and absent notice of termination, is
automatically renewed every April 1 for an additional year, such that there is always one year remaining in the term of the Agreement
on each April 1. The Agreement provides for a base salary of $230,000 per annum, including discretionary increases. In addition to
his annual base salary, Mr. Bean is eligible to receive a target bonus opportunity of up to 130% of his base salary. The Agreement
also provides for Mr. Bean's participation in the Company's incentive and benefit plans. Mr. Bean is subject to non-competition,
non-solicitation and confidentiality provisions. The Agreement may be terminated immediately by the Company for Cause or by Mr. Bean
for Constructive Termination (as such terms are defined in the Agreement). The Amendment addresses termination provisions due to a
Change in Control (as defined in the Amendment) and related compensation thereto.

Richard C. Chapman originally executed an employment agreement with the Company dated September 1, 1997 and entered into a
new agreement effective June 1, 2000 (the "Agreement"). The Agreement is for a term of three years, but is automatically renewed on
a day by day basis on the second anniversary of the Agreement, such that there is always one year remaining in the term of the
Agreement until the Company or Mr. Chapman shall have terminated such automatic extension provision. The Agreement provides for a
base salary of $325,000 per annum adjusted to the U.S. Department Bureau of Labor Statistics Consumer Price Index and is reviewed
annually by the Company's Chief Executive Officer and can be increased at his discretion. Mr. Chapman is eligible for an annual
bonus opportunity of up to 140% of his annual base salary and 9,000 fully vested stock options of the Company. The Agreement also
provides for Mr. Chapman's participation in the Company's incentive and benefit plans. Mr. Chapman is subject to non-competition,
non-solicitation and confidentiality provisions. The Agreement may be terminated immediately by the Company for Cause or by Mr.
Chapman with Good Reason (as such terms are defined in the Agreement).

Thomas M. Pyra originally executed an employment agreement with the Company dated July 1, 1998 and entered into a new
agreement effective October 30, 2001 (the "Agreement"). The term of the Agreement continues for one year and absent notice of
termination, is automatically renewed every November 1 for an additional year, such that there is always one year remaining in the
term of the Agreement. The Agreement provides for a base salary of $330,000 per annum, including discretionary increases. In
addition to this annual base salary, Mr. Pyra is eligible to receive a target bonus opportunity to up to 140% of his base salary.
The Agreement also provides for Mr. Pyra's participation in the Company's incentive and benefit plans as well as a car allowance.
Mr. Pyra is subject to non-competition, non-solicitation and confidentiality provisions. The Agreement may be terminated immediately
by the Company for Cause or by Mr. Pyra for Constructive Termination, which includes Change of Control provisions (as such terms are
defined in the Agreement).

Donald C. Wegmiller is a party to an employment agreement with the Company dated April 5, 1999 (the "Agreement"). Subject to
renewal, the Agreement ends on December 31, 2003. It calls for an annual base salary of $335,000, as well as additional commissions
and a bonus each year equal to 3% of certain revenues generated by our Healthcare Group. Mr. Wegmiller is subject to non-competition,
non-solicitation and confidentiality provisions. On the effective date of this Agreement, Mr. Wegmiller was granted an option to
purchase 185,000 shares of our Common Stock which vests and becomes exercisable in five annual installments beginning December 30,
1999. If, following a Change of Control, Mr. Wegmiller voluntarily terminates employment, his stock options granted under the
Agreement will become 100% vested and he can elect to receive either 12 months salary and other compensation or no compensation and a
waiver of the Agreement's restrictive covenants. If Mr. Wegmiller is terminated without Cause, then his stock options will become
100% vested and he will receive 12 months salary and other compensation.

Key Executive Life Insurance

We maintain and are the sole beneficiary of key man life insurance policies on the lives of Messrs. Chapman, Wamberg and
Wegmiller in the amounts of $4 million, $50 million and $8.5 million, respectively.

REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION

Executive Compensation Philosophy

The Compensation Committee provides direction to the Company's Board of Directors In maintaining a compensation program that
is consistent with the Company's overall compensation philosophy. The compensation philosophy supported by the Compensation
Committee recognizes the need to attract and retain high caliber staff to meet the Company's business requirements. In doing so,
however, the Compensation Committee is mindful of overall stockholder return and believes that incentive program design and payments
should reflect appropriately comparisons with peer company performance.

The Compensation Committee advises, recommends and approves compensation strategies, policies, and pay levels necessary to
support the business. Subject to the approval of the Board, the Compensation Committee determines the remuneration of the Chairman
and Chief Executive Officer and other corporate executives. Only directors who are not employees of the Company may serve on the
Compensation Committee. As of December 31, 2001, the Compensation Committee consisted of Messrs. Dalton, Piaker, Pohlman and
Seidman, each of whom is an independent director.

Section 162(m) of the Internal Revenue Code of 1986, as amended, generally disallows a federal income tax deduction to
public companies for compensation paid in excess of $1 million to each of a Company's Chief Executive Officer and its four other most
highly compensated executive officers, unless, in general, such compensation is performance based, is established a committee of
outside directors, is objectively determined and the plan or agreement providing for such performance-based compensation is approved
by stockholders. It is the Committee's objective to maximize deductibility under Section 162(m) with minimal sacrifices in
flexibility and corporate objectives.

Executive Compensation

Base Salary. The base salaries of executive officers are established in consideration of a range of factors, including the
individual's performance, the responsibilities of the position, competitive practice and the experience of the executive filling the
position.

As reflected in the Summary Compensation Table, Mr. Wamberg's salary was increased in 2001 by $92,000 (35.4%). In
determining Mr. Wamberg's base salary, the Committee considered the Company's financial performance, his individual performance, his
responsibilities as Chairman and Chief Executive officer, and his long-term contributions to the success of the Company. The
Committee also compared Mr. Wamberg's base salary and total compensation to the base salaries and total compensation of chief
executive officers at comparator companies.

The Committee believes the annual compensation provided to each of the Chairman and Chief Executive Officer and the
executive officers, whether pursuant to an employment agreement or otherwise, is commensurate with the responsibilities, experience
and performance of such individual.

Bonuses. Annual bonus opportunities allow the Company to communicate specific goals that are of primary importance during
the coming year and motivate executive to achieve these goals. Annual bonus awards are based on our corporate financial performance
and the contributions of the executive officers.

In 2001, Mr. Wamberg's bonus represented 125.1% of his salary and resulted in a bonus award of $440,330.

The Committee believes that the bonuses paid to the Chairman and Chief Executive Officer and the executive officers, whether
pursuant to employment agreement or otherwise, is commensurate with our performance and such individual's contribution to such
performance.

Long-Term Incentives. Long-term incentives are provided pursuant to the 1998 Stock Option Plan. The purpose of the 1998
Stock Option Plan is to encourage and enable participants under the plan to acquire and retain a proprietary interest in us by
ownership of our stock align the interests of its executive officers with those of our stockholders.

In keeping with the Company's commitment to provide a total compensation package that includes at-risk components of pay,
the Committee makes decisions regarding appropriate long-term incentive grants for each executive. When determining these awards,
the Committee considers the Company's financial performance in the prior year, executives' levels of responsibility, prior
experience, historical award data and compensation practices at comparator companies.

The Committee believes the stock options granted to the executive officers, whether pursuant to employment agreement or
otherwise, is commensurate with the executive officer's responsibilities, experience and individual performance of such executive
officer.

COMPENSATION COMMITTEE
Randolph A. Pohlman
L. William Seidman
George D. Dalton
Steven Piaker

Compensation Committee Interlocks and Insider Participation

During 2001, the Compensation Committee of the Board of Directors consisted of Messrs. Dalton, Piaker, Pohlman and Seidman,
all of whom are independent directors. Our officers who are not directors do not participate in deliberations of the Compensation
Committee or the Board of Directors regarding executive compensation.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee oversees the Company's financial reporting process on behalf of the Board of Directors pursuant to a
written Audit Committee charter. Management has the primary responsibility for the financial statements and the reporting process
including the systems of internal controls. In fulfilling its oversight responsibilities, the Committee reviewed the audited
financial statements in the Annual Report with management including a discussion of the quality, not just the acceptability, of the
accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements.

The Committee reviewed with the independent auditors, who are responsible for expressing an opinion on the conformity of
those audited financial statements with generally accepted accounting principles, their judgments as to the quality, not just the
acceptability, of the Company's accounting principles and such other matters as are required to be discussed with the Committee under
generally accepted auditing standards. In addition, the Committee has discussed with the independent auditors the auditors'
independence from management and the Company, including the matters in the written disclosures required by the Independence Standards
Board and considered the compatibility of nonaudit services with the auditors' independence. Finally, the Committee discussed with
the independent auditors the matters required to be discussed by Statement of Auditing Standards No. 61.

The Committee discussed with the Company's independent auditors the overall scope and plans for their respective audits.
The Committee meets with the independent auditors, with and without management present, to discuss the results of their examinations,
their evaluations of the Company's internal controls, and the overall quality of the Company's financial reporting. The Committee
held four meetings during fiscal year 2001.

In reliance on the reviews and discussions referred to above, the Committee recommended to the
Board of Directors (and the Board has approved) that the audited financial
statements be included in the Annual Report on Form 10-K for the year ended
December 31, 2001 for filing with the Securities and Exchange Commission. The
Committee and the Board have also recommended, subject to shareholder approval,
the selection of the Company’s independent auditors.

AUDIT COMMITTEE
Randolph A. Pohlman
L. William Seidman
George D. Dalton
Steven Piaker

The foregoing Audit Committee Report shall be deemed incorporated by reference by any general statement incorporating by
reference this Proxy Statement into any filing under the Securities Act or the Exchange Act, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise be deemed filed under such Acts.

PERFORMANCE GRAPH

The graph below compares the Company's cumulative total stockholder return from August 18, 1998 (the first trading date of
the Company's Common Stock) through December 31, 2001 with the cumulative total return of the Russell 2000 Index and the Nasdaq
Insurance Index for the same period. The performance graph assumes the investment of $100 and the reinvestment of all dividends, if
any. The performance graph is not necessarily indicative of future investment performance.

[PERFORMANCE GRAPH]

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8/19/1998 12/31/1998 6/30/1999 12/31/1999 6/30/2000 12/29/2000 6/29/2001 12/31/2001
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Clark/Bardes 100 188 211 160 183 113 248 280
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Russell 2000 100 109 144 115 104 134 139 143
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Nasdaq Insurance 100 104 113 124 127 119 126 120
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

As part of our acquisition of The Wamberg Organization, the Purchase Agreement provides for payment to The Wamberg
Organization of $11.9 million through December 31, 2002, which may be reduced if established revenue objectives are not achieved.

We lease 16,266 square feet of office space from Sunningdale Partners, an entity controlled by Mr. Wamberg for an annual
rent of approximately $260,000 under a lease expiring February 21, 2009.

Wamberg Financial Corporation, one of our subsidiaries, leases hanger space for the corporate jet from WTW Investment, an
entity controlled by Mr. Wamberg for an annual rent of approximately $27,000.

Ancillary Business Arrangements

Because of various federal and state licensing restrictions, we market products registered with the SEC and our
insurance-financed employee benefit programs in the states of Pennsylvania and Texas through a registered broker-dealer, Clark/Bardes
Financial Services, Inc., with which we have a networking agreement, and insurance agencies, for which we provide almost all services
through administration and services agreements. Each of the following insurance agencies-- Clark/Bardes, Inc. of Pennsylvania and
Clark/Bardes of Texas, Inc.-- provide the entity through which our producers sell certain products and conduct business in such
states. In exchange, each of the insurance agencies is a party to an administration and services agreement under which each insurance
agency pays us to furnish facilities, services, personnel and assistance, including the following:

o performing all bookkeeping and accounting functions;

o establishing and maintaining all records required by law and by generally accepted accounting principles;

o furnishing all stationery, forms, and supplies;

o providing all necessary clerical and professional staff to perform the above activities;

o providing all computer hardware and software capabilities and facilities;

o providing office space, furniture, fixtures, equipment and supplies;

o assisting in the preparation of reports required by governmental regulatory and supervisory authorities; and

o billing and collection of all premiums.

The charges and fees pursuant to the administration and services agreements are
equal to the costs we incur in providing the services, personnel and property,
plus an additional amount equal to a certain percentage of such cost. Each
insurance agency is solely responsible for its own activities as an insurance
producer and for its relationship with the producers or employees in the course
and scope of their activities performed on behalf of such agency.

PROPOSAL TWO

RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS

On February 27, 2002, Ernst & Young LLP ("Ernst & Young") after being notified by Clark/Bardes that Ernst & Young would not
be retained to serve as the Company's independent accountants for the 2002 fiscal year, resigned and will cease its relationship with
the Company upon completion of the annual audit for the Company's fiscal year ended December 31, 2001. Ernst & Young reported on
Clark/Bardes' financial statements for the fiscal years ended December 31, 2001 and December 31, 2000.

The report of Ernst & Young on the Company’s financial statements
for the fiscal years ended December 31, 2001 and December 31, 2000, contained no
adverse opinion or disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principles. In connection with its audits
for the fiscal years ended December 31, 2001 and December 31, 2000: (1) there
have been no disagreements with Ernst & Young on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedures, which disagreements if not resolved to the satisfaction of Ernst
& Young would have caused it to make reference thereto in its reports on the
financial statements for such periods; and (2) there has been no matter that was
the subject of a reportable event (as defined in Regulation S-K, Item
304(a)(1)(v)).

On March 14, 2002, Clark/Bardes engaged Deloitte & Touche LLP
(“Deloitte & Touche”) to serve as the Company’s independent
public accountants for the fiscal year ending December 31, 2002. The Board of
Directors of Clark/Bardes acting upon the recommendation of the Audit Committee
of the Board, approved the decision to change independent public accountants and
the engagement of Deloitte & Touche for the fiscal year ending December 31,
2002. The appointment of Deloitte & Touche is subject to ratification by the
Company’s shareholders at the 2002 annual meeting scheduled for April 30,
2002.

During Clark/Bardes’ two most recent fiscal years ended December 31,
2001 and December 31, 2000, and through the date of this Form 8-K, the Company
has not consulted with Deloitte & Touche with respect to (i) the application
of accounting principles to a specific transaction, either completed or
proposed; (ii) the type of audit opinion that might be rendered on the
Company’s consolidated financial statements, or (iii) any matter that was
the subject of a disagreement (as defined in Item 304(a) (1) (iv) of Regulation
S-K) or a reportable event (as defined in Item 304(a)(1) (v) of Regulation
S-K).

Audit Fees. During the year ended December 31, 2001, our annual audit fees with the accounting firm of Ernst & Young
amounted to $250,000.

Financial Information Systems Design and Implementation Fees. There were no fees or work performed on financial information
systems.

All Other Fees. All other fees paid to Ernst & Young during the year ended December 31, 2001 totaled $247,000 of which
$231,000 was for audit-related services. Audit-related services consist primarily of fees for services provided in connection with
our secondary offering, accounting consultations, business acquisitions, and internal audit services.

The Audit Committee has considered whether the services described under the caption "All Other Fees" performed by the
independent auditors to the Company are compatible with maintaining the auditors' independence.

The Board of Directors has determined to afford you the opportunity to express your opinions on the matter of accountants,
and, accordingly, is submitting to you at the annual meeting a proposal to ratify the appointment of Deloitte & Touche. If a
majority of the shares voted at the annual meeting, in person or by proxy, are not voted in favor of the ratification of the
appointment of Deloitte & Touche, your Board of Directors will interpret this as an instruction to seek other accountants.

Your Board of Directors recommends a vote "FOR" the ratification of the appointment of Deloitte & Touche as independent
accountants for Clark/Bardes for the year ended December 31, 2002.

Representatives of Deloitte & Touche are expected to be present at the annual meeting, will have the opportunity to make a
statement if they desire to do so and are expected to be available to respond to appropriate questions. Representatives of Ernst &
Young will not be present at the annual meeting.

PROPOSAL THREE

APPROVAL OF AN AMENDMENT TO OUR
CERTIFICATE OF INCORPORATION
INCREASING OUR COMMON STOCK TO 40,000,000

The Board of Directors has approved the amendment of our Certificate of Incorporation to increase the number of authorized
shares of the Company's Common Stock from 20,000,000 to 40,000,000 shares.

The Board of Directors believes the increase in the number of authorized shares of Common Stock will provide flexibility in
connection with future stock dividends or splits, financings, investment opportunities, equity compensation plans, acquisition of
other companies and for other corporate purposes that the Board deems advisable. The authorized but unissued Common Stock of the
Company, including the increased number of shares of Common Stock if this proposed amendment is approved by the stockholders and made
effective, may be issued from time to time as determined by the Board without further stockholder action (subject to any applicable
stock exchange rules) unless issued in transactions, such as certain mergers, which require stockholder approval. The Company does
not intent to seek stockholder approval for any such corporate acquisitions or share issuances unless required by applicable law,
stock exchange rule or other regulation. The issuance of additional shares of Common Stock may cause a dilution in the equity and
earnings of the present stockholders. No preemptive rights exist with respect to any outstanding shares of Common Stock.

Of the 20,000,000 shares currently authorized, as of March 5, 2002, 16,601,319 were issued, of which 60,208 are held in
treasury and 16,541,111 are outstanding. As of the same date, there were 3,458,889 authorized but unissued shares, 2,102,279 shares
of which were reserved for issuance upon the exercise of options under the Company's stock option plans.

If the amendment is adopted by the stockholders, the first sentence of Article IV of the Charter will be amended to read as
follows:

The aggregate number of shares of capital stock which the corporation shall have
authority to issue is 41,000,000, of which (1) 40,000,000 shares shall be common
stock, par value $0.01 per share; and (2) 1,000,000 shares shall be preferred
stock, par value $0.01 per share.

Your Board of Directors recommends that you vote "FOR" the approval of an amendment to our Certificate of Incorporation
increasing our Common Stock to 40,000,000.

STOCKHOLDER PROPOSALS FOR 2003 ANNUAL MEETING

The Board of Directors will provide for the presentation of your proposals at the 2003 Annual Meeting of Stockholders,
provided that such proposals are submitted by eligible stockholders who have complied with the relevant regulations of the Securities
and Exchange Commission regarding stockholder proposals, and our bylaws, a copy of which is available upon written request addressed
to the Secretary of the Company at the Company's principal executive offices. To be considered for inclusion in our proxy statement
for the 2003 annual meeting, stockholder proposals must be received at our principal executive office no later than December 1, 2002.

Additionally, if a proponent of a stockholder proposal at the 2003 Annual Meeting of Stockholders fails to provide notice of
the intent to make such proposal by personal delivery or mail to the Company on or before December 1, 2002 (or by an earlier or later
date, if such date is established by amendment to the Company's By-laws), then any proxy solicited by management may confer
discretionary authority to vote on such proposal.

INCORPORATION BY REFERENCE

With respect to any future filings with the Securities and Exchange Commission into which this proxy statement is
incorporated by reference, the material under the headings "Report of the Compensation Committee on Executive Compensation," "Report
of the Audit Committee" and "Performance Graph" shall not be incorporated into such future filings.

FORWARD-LOOKING STATEMENTS

This proxy statement may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. When used in this proxy statement, 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 of our management as well as assumptions made by
and information currently available to us. These forward-looking statements are subject to certain risks, uncertainties and
assumptions, including risks, uncertainties and assumptions including but not limited to difficulties associated with changes in tax
legislation, dependence on key producers and key personnel, our dependence on persistency of existing business, credit risk related
to renewal revenue, acquisition risks, risks related to significant intangible assets, competitive factors and pricing pressures,
dependence on certain insurance companies, 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 our 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.

FORM 10-K

Accompanying this proxy statement is a copy of our Form 10-K for the year ended December 31, 2001. The Form 10-K does not
form any part of the materials for the solicitation of proxies. We will mail additional copies of our annual report on Form 10-K for
the year ended December 31, 2001 to each stockholder or beneficial owner of shares of our Common Stock without charge upon such
person's request to James Radosevich, Vice President Corporate Finance & Investor Relations, at our executive offices at 102 South
Wynstone Park Drive, North Barrington, Illinois 60010.

By Order of the Board of Directors

W.T. Wamberg
Chairman of the Board and Chief Executive Officer

North Barrington, Illinois
March 29, 2002