ICT GROUP INC, 424B4, 1996-06-17

ICT GROUP INC
424B4, 1996-06-17
BUSINESS SERVICES, NEC

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LOGO ICT Group

2,500,000 SHARES

COMMON STOCK

Of the 2,500,000 shares of Common Stock offered hereby, 2,411,552 shares are
being offered by ICT Group, Inc. ("ICT" or the "Company") and 88,448 shares are
being offered by the Selling Shareholders. See "Principal and Selling
Shareholders." The Company will not receive any proceeds from the sale of shares
of Common Stock by the Selling Shareholders. Approximately 45% of the estimated
net proceeds from this offering will be used by the Company to repay
indebtedness and to make a distribution to existing shareholders of S
corporation earnings. See "Use of Proceeds." Prior to this offering, there has
been no public market for the Common Stock of the Company. See "Underwriting"
for information relating to the method of determining the initial public
offering price.

------
The Common Stock offered hereby involves a high degree of risk.
See "Risk Factors" at page 6.
------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

==============================================================================
Underwriting Proceeds to
Price to Discounts and Proceeds to Selling
Public Commissions Company(1) Shareholders
- ------------------------------------------------------------------------------
Per Share ..... $ 16.00 $1.12 $14.88 $14.88
- ------------------------------------------------------------------------------
Total(2) ..... $40,000,000 $2,800,000 $35,883,894 $1,316,106
==============================================================================

(1) Before deducting offering expenses payable by the Company, estimated at
$750,000.

(2) John J. Brennan, the Chairman, President and Chief Executive Officer of
ICT, and Donald P. Brennan, the Vice Chairman of ICT, have granted the
Underwriters a 30-day option to purchase up to 375,000 additional shares
of Common Stock owned by them, solely to cover over-allotments, if any.
If such option is exercised in full, the total Price to Public,
Underwriting Discounts and Commissions and Proceeds to Selling
Shareholders will be $46,000,000, $3,220,000 and $6,896,106, respectively.
See "Underwriting."
------
The Common Stock is offered by the Underwriters as stated herein, subject
to receipt and acceptance by them and subject to their right to reject any
order in whole or in part. It is expected that delivery of the shares will be
made through the offices of Robertson, Stephens & Company LLC ("Robertson,
Stephens & Company"), San Francisco, California, on or about June 19, 1996.

Robertson, Stephens & Company Smith Barney Inc.

The date of this Prospectus is June 14, 1996.

<PAGE>
No dealer, sales representative or any other person has been authorized to
give any information or to make any representations other than those
contained in this Prospectus, and, if given or made, such information or
representations must not be relied upon as having been authorized by the
Company, any Selling Shareholder or any Underwriter. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, any
securities other than the registered securities to which it relates or an
offer to, or solicitation of, any person in any jurisdiction where such an
offer or solicitation would be unlawful. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that there has been no change in the affairs of the Company
since the date hereof or that the information contained herein is correct as
of any time subsequent to the date hereof.

Until July 9, 1996 (25 days after the date of this Prospectus), all
dealers effecting transactions in the registered securities, whether or not
participating in this distribution, may be required to deliver a Prospectus.
This delivery requirement is in addition to the obligation of dealers to
deliver a Prospectus when acting as Underwriters and with respect to their
unsold allotments or subscriptions.

------

TABLE OF CONTENTS

Summary ................................................................................ 3
Risk Factors ........................................................................... 6
Use of Proceeds ........................................................................ 13
Prior S Corporation Status ............................................................. 13
Dividend Policy ........................................................................ 13
Capitalization ......................................................................... 14
Dilution ............................................................................... 15
Selected Consolidated Financial Data ................................................... 16
Management's Discussion and Analysis of Financial Condition and Results of Operations .. 17
Business ............................................................................... 23
Management ............................................................................. 34
Certain Transactions ................................................................... 45
Principal and Selling Shareholders ..................................................... 47
Description of Capital Stock ........................................................... 48
Shares Eligible for Future Sale ........................................................ 50
Underwriting ........................................................................... 51
Legal Matters .......................................................................... 52
Experts ................................................................................ 52
Additional Information ................................................................. 52
Index to Consolidated Financial Statements ............................................. F-1

</TABLE>

------

ICT(TM), ICT Group(TM), ICT Research Services(TM), Eurotel(TM), ICT/Canada
Marketing(TM), ICT Spantel(TM), Smartline(TM) and the ICT logo are trademarks
or service marks of the Company. All other trademarks, service marks or trade
names referred to in this Prospectus are the property of their respective
owners.

ICT was incorporated in Pennsylvania in March 1987. The Company's
principal executive offices are located at 800 Town Center Drive, Langhorne,
PA 19047, and its telephone number is (215) 757-0200.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

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SUMMARY

The following summary is qualified in its entirety by the more detailed
information, including "Risk Factors" and Financial Statements and Notes
thereto, appearing elsewhere in this Prospectus.

THE COMPANY

ICT Group, Inc. ("ICT" or the "Company") is an independent provider of call
center teleservices, which consist of outbound and inbound telemarketing and
customer support services, together with related value-added services such as
marketing, research and consulting services, to businesses domestically and
internationally. The Company's call center management experience, technological
leadership and expertise in target industries enable it to provide its clients
with high quality, cost-effective call center services. In addition to
supporting customers' teleservices programs from its own call centers, ICT is
pursuing opportunities to manage clients' call centers on a contract basis. The
Company believes there is a trend by businesses to outsource many of their
internal telephone sales, customer service and product support functions. In
order to capitalize on this trend, the Company is incurring certain startup
costs and expenses (the amount of which has not been material to date). Although
the Company has recently entered into two call center management contracts, as
of March 31, 1996, the Company had not received any revenues from the contracts.
The Company believes it was among the first teleservices firms to establish
international call centers with multilingual capabilities, which it intends to
further expand to meet the global needs of multinational clients.

In articles published by Telemarketing and Call Center Solutions magazine in
March and April 1996, the Company was recognized as the 8th largest outbound and
the 20th largest inbound independent telemarketing service agency in the
country, for the 12-month period through November 1995. With 24 domestic and
international call centers utilizing 1,648 automated workstations, ICT has grown
significantly since becoming an independent company in 1987, and its net
revenues increased by more than 50% per year in each of the last two years, from
$22.3 million in 1993 to $52.1 million in 1995. The Company's current customers
include Mass Marketing Insurance Group ("MMIG"), which represented approximately
43% of the Company's revenues in 1995, and Advanta, Alpha Software, Bertelsmann
Music Group, Citibank, Greater Atlantic Health Service, MBNA, MCI, J.C. Penney
Life Insurance Company, Providian, SmithKline Beecham, Sun Microsystems, TV
Guide and the United States Army. No customer, other than MMIG, accounted
for more than 4.5% of the Company's revenues in 1995. In general, the Company's
customers have written agreements with the Company that are typically terminable
with 30 days notice.

Direct Marketing magazine estimates that telemarketing industry
expenditures in the United States were approximately $77 billion in 1995. The
Company believes that all but a small percentage of this spending was
incurred for services performed by in-house call centers. The call center
teleservices industry is highly fragmented, consisting primarily of in-house
sales and service organizations but also including numerous independent call
center operations, many of which are technologically unsophisticated and
provide only a limited range of services. Telemarketing and other call center
services have evolved rapidly in recent years, as businesses have
increasingly turned to outside specialists that have industry-specific
expertise and utilize highly personalized and technologically sophisticated
services, to target and support consumer and business customers. At the same
time, the use of telemarketing and other call center services has expanded
and is continuing to expand to include more complex applications, new
industries and broader geographic markets.

ICT directly addresses the growing demand for cost-effective,
comprehensive teleservices by providing its clients with high quality
services, expertise in target industries, marketing, research, consulting and
other value-added services, multilingual capabilities and international
presence. The Company believes its technology leadership and focus on a
limited number of industries enable it to provide its clients with highly
effective marketing and customer service capabilities. ICT has expanded
beyond its traditional markets of insurance, financial services, publishing
and telecommunications to include the pharmaceutical, health care services
and computer software and hardware industries, which are emerging as areas of
rapid growth in the use and outsourcing of call center teleservices. The
Company believes that its focus on a limited number of target industries,
combined with its innovative technology and operations experience, has
positioned it to secure call center management relationships.

ICT has successfully completed and integrated several key acquisitions and
entered into joint ventures to broaden its range of teleservices
capabilities, including inbound teleservices, research data collection,
telebanking and international multilingual telemarketing services targeted at
non-English speaking markets in the United States, Europe, Latin America and
Canada. The Company intends to pursue continued expansion through a
combination of internal growth, strategic alliances, and acquisitions of
domestic and international businesses that provide teleservices that are
complementary to ICT's core telemarketing expertise.

3
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THE OFFERING

<S> <C>
Common Stock offered by the Company .................. 2,411,552 shares
Common Stock offered by the Selling Shareholders ..... 88,448 shares
Common Stock to be outstanding after this offering ... 11,500,000 shares(1)
Use of Proceeds ...................................... To repay indebtedness, to pay a distribution of S corporation
earnings, and for working capital and other general corporate
purposes, including possible future acquisitions.
Nasdaq National Market symbol ........................ ICTG

</TABLE>

SUMMARY FINANCIAL DATA
(In thousands, except per share data)

</TABLE>

<TABLE>
<CAPTION>
March 31, 1996
--------------------------------------------
Pro Forma
As
Actual Pro Forma(3) Adjusted(3)(4)
---------- ------------ ---------------
<S> <C> <C> <C>
Balance Sheet Data:
Working capital (deficit) ............................. $(2,484) $(5,078) $27,549
Total assets .......................................... 21,418 21,418 43,094
Long-term debt, less current maturities ............... 705 705 --
Capitalized lease obligations, less current maturities . 1,811 1,811 --
Shareholders' equity .................................. 4,294 658 35,801

</TABLE>

(1) Excludes shares of Common Stock issuable upon the exercise of outstanding
options. As of the date of this Prospectus, there were 1,121,602 shares
of Common Stock reserved for issuance upon the exercise of outstanding
options with a weighted average exercise price of $.37 per share
(excluding 88,448 shares of Common Stock underlying options to be
exercised by the Selling Shareholders in connection with this offering)
and 1,150,000 shares of Common Stock reserved for future issuance under
the Company's stock plans. See "Management -- Employee Benefit Plans."

(2) The Company has operated as an S corporation for income tax purposes
since its inception in 1987 and has terminated such status in connection
with this offering. See Note 3 of Notes to Consolidated Financial
Statements for information concerning the computation of pro forma net
income and pro forma net income per share.
(3) Reflects the S Corporation Distribution and the Deferred Tax Liability
described in "Prior S Corporation Status." See "Use of Proceeds" and Note
3 of Notes to Consolidated Financial Statements.
(4) Adjusted to give effect to the sale by the Company of 2,411,552 shares of
Common Stock offered hereby and the application of the net proceeds as set
forth in "Use of Proceeds."

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<PAGE>

RISK FACTORS

The Common Stock offered hereby involves a high degree of risk. See "Risk
Factors" at page 6.

Except as otherwise noted, all information contained in this Prospectus (i)
assumes no exercise of the Underwriters' over-allotment option, (ii) reflects a
nine-for-one stock split (in the form of a stock dividend) of the Common Stock
effected in June 1996, (iii) reflects the filing of amendments to the Company's
Articles of Incorporation to reclassify the Class A Common Stock and Class B
Common Stock as Common Stock, to authorize an aggregate of 40,000,000 shares of
Common Stock and to authorize 5,000,000 shares of undesignated Preferred Stock
and (iv) assumes no exercise of stock options other than options to purchase an
aggregate of 88,448 shares of Common Stock to be exercised in connection with
this offering (all of which shares are being offered and sold hereby). See
"Capitalization," "Principal and Selling Shareholders," "Description of Capital
Stock" and "Underwriting."

This Prospectus contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from
those anticipated in these forward-looking statements as a result of certain
factors, including those set forth under "Risk Factors" and elsewhere in this
Prospectus.

5
<PAGE>
RISK FACTORS

In addition to the other information in this Prospectus, the following
matters should be considered carefully in evaluating an investment in the
shares of Common Stock offered by this Prospectus. This Prospectus contains
forward-looking statements that involve risks and uncertainties. The
Company's actual results could differ materially from those anticipated in
these forward-looking statements as a result of certain factors, including
those set forth in the following risk factors and elsewhere in this
Prospectus.

RELIANCE ON MAJOR CLIENT RELATIONSHIP

A substantial portion of ICT's net revenues is generated from its services
to Mass Marketing Insurance Group ("MMIG"), which serves as telemarketing
manager for J.C. Penney Life Insurance Company ("J.C. Penney") with respect
to certain insurance products. In 1995, 1994 and 1993, MMIG represented 43%,
41% and 43%, respectively, of ICT's net revenues. Neither MMIG nor J.C.
Penney is contractually obligated to continue to use the Company's services,
and there can be no assurance that such use will continue at historic levels
or at all. The loss of all or a substantial portion of the business resulting
from this relationship would have a material adverse effect on the Company's
business, financial condition and results of operations. See
"Business--Clients."

DEPENDENCE ON INDUSTRIES SERVED

The Company's success is dependent in large part on continued demand for the
Company's services from businesses within the industries served by the Company.
A significant downturn in the insurance or financial services industries, which
accounted for 46% and 22% of the Company's net revenues in 1995, respectively,
or a trend in either of these industries to reduce or eliminate their use of
teleservices, could have a material adverse effect on the Company's business,
financial condition and results of operations. See "Business--Target
Industries."

TELEMARKETING INDUSTRY; NEGATIVE IMPACT OF COMPETING INDUSTRIES

Providers of telemarketing services compete for client marketing budget
dollars with other marketing activities and, in particular, other forms of
direct marketing activities, such as direct mail. In recent years, there have
been significant advances in new forms of direct marketing, such as the
development of interactive shopping and data collection through television,
the Internet and other media. Many industry experts predict that electronic
interactive commerce, such as shopping and information exchange via the
network of computers known as the World Wide Web, will proliferate
significantly in the foreseeable future. To the extent such proliferation
occurs, it could have a material adverse effect on the demand for
telemarketing services. In addition, the increased use of new telephone-based
technologies, such as voice response systems, could reduce the demand for
certain of the Company's services. As the telemarketing industry continues to
grow, the effectiveness of telemarketing as a direct marketing tool may
decrease as a result of consumer saturation and increased consumer resistance
to telemarketing generally. See "Business--Industry Overview."

CHALLENGES OF MANAGING GROWTH

ICT's operations have expanded significantly in the past several years,
which has placed demands on its administrative, operational and financial
resources. The planned continued growth of the Company's client base and
services, should it occur, could place a significant strain on the Company's
existing management and operations, ICT's future performance and
profitability will depend in part on its ability to successfully implement
improved financial and management systems and to increase personnel to
respond to changes in its business. The failure to implement such systems or
to increase personnel adequately may have a material adverse effect on ICT's
business, financial condition and results of operations. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

RISKS ASSOCIATED WITH ACQUISITIONS

ICT intends to continue to pursue strategic acquisitions that either expand
or complement its business. There can be no assurance that the Company will be
able to identify acceptable acquisition candidates on

6
<PAGE>

terms favorable to the Company or in a timely manner. In addition, there can
be no assurance that ICT will successfully integrate any such acquisition into
the Company's business or that any acquired business will be profitable. A
significant portion of the Company's capital resources, including a portion of
the net proceeds from this offering, could be used for future acquisitions.
The Company may require additional debt or equity financing for future
acquisitions, which additional financing may not be available on terms
favorable to the Company, if at all. See "Use of Proceeds" and "Business --
Strategy."

BENEFITS TO AFFILIATES

In connection with this offering, certain officers and directors and
affiliates thereof will receive substantial benefits. Certain officers of the
Company are selling shareholders in this offering, and, if the Underwriters'
over-allotment option is exercised, John J. Brennan, the Company's Chairman,
President and Chief Executive Officer, and Donald P. Brennan, the Company's Vice
Chairman, will also be selling shareholders. The selling shareholders will
receive the full proceeds from the sale of their respective shares of Common
Stock in this offering. The Company will use a portion of the net proceeds it
receives in this offering to distribute to its current shareholders, Messrs.
Brennan and their affiliates, previously taxed but undistributed S corporation
earnings through the date the Company terminates its S corporation status, which
as of March 31, 1996 was approximately $2.5 million. The Company will also use
approximately $210,000 of the net proceeds to repay certain outstanding
promissory notes to Donald P. Brennan and an affiliate of Messrs. Brennan. In
addition, the Company will use approximately $11.8 million of the net proceeds
to repay certain outstanding bank indebtedness of the Company for which Messrs.
Brennan have each issued personal, unconditional guarantees. Although the
guarantees will remain outstanding after this offering, as a result of the
repayment of the outstanding indebtedness, the obligations of Messrs. Brennan
pursuant to the guarantees will be reduced. Certain executive officers of the
Company will receive replacement options in connection with this offering which
have the effect of extending, for a period of up to five years, the
exercisability of previously granted options, the large majority of which would
expire in 1997. See "Use of Proceeds," "Prior S Corporation Status,"
"Management--Executive Compensation," "Certain Transactions," and "Principal and
Selling Shareholders".

FLUCTUATIONS IN QUARTERLY OPERATING RESULTS; SEASONALITY

ICT has experienced and expects to continue to experience significant
fluctuations in quarterly results of operations. ICT's results of operations
depend on numerous factors, including the timing of clients' telemarketing
campaigns, the commencement and expiration of contracts, the timing and
amount of new business generated by the Company, the Company's revenue mix,
the timing of additional selling, general and administrative expenses and the
competitive conditions in the telemarketing industry. Demand for the
Company's services tends to be somewhat lower in the first quarter of each
year following the increased telemarketing activities of clients in the
fourth quarter of the previous year, prior to the holiday season. Moreover,
the first quarter operating results typically are adversely affected by
increased operating expenses incurred by the Company in anticipation of
increased demand for its services in the second quarter. Demand for the
Company's services typically slows or decreases in the third quarter as the
volume of telemarketing projects decreases during the summer months. In
addition, the Company's operating expenses increase during the third quarter
in anticipation of higher demand for its services during the fourth quarter.
Due to the above- described factors, ICT believes period-to-period
comparisons of results of operations are not necessarily meaningful and
should not be relied upon as an indication of future results of operations.
The Company's planned operating expenditures are based on revenue forecasts,
and if revenues are below expectations in any given quarter, operating
results are likely to be materially adversely affected. There can be no
assurance that, in the future, ICT will experience revenue growth or be
profitable on a quarterly or annual basis or that its financial results will
be consistent with predictions by securities analysts. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

NON-RECURRING CHARGES; EXPECTED LOSS IN 1996 SECOND QUARTER AND YEAR ENDING
DECEMBER 31, 1996

The Company will incur a non-recurring, non-cash charge of approximately
$12.7 million in the second quarter of 1996. This charge relates to the
granting of options to replace certain previously granted options

7
<PAGE>

to provide for an extended option period of five years and the vesting of
certain options upon the completion of this offering. In addition, the Company
will record a significant net deferred income tax liability and corresponding
income tax expense as a result of the Company's termination of its S corporation
status. As a result of these charges, the Company expects to incur a net loss
for the second quarter of 1996 and for the year ending December 31, 1996. See
"Prior S Corporation Status," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Management--Employee Benefit Plans" and
Notes 3 and 10 of Notes to Consolidated Financial Statements.

RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS

The Company currently conducts operations internationally, and such
operations accounted for approximately 5% of the Company's net revenues in 1995.
The Company anticipates that operations outside the United States will represent
an increasing portion of its total operations in the future. Although ICT's
telemarketing services constitute generally accepted business practices in the
United States, such practices may not be accepted in certain international
markets. To the extent there is consumer, business or government resistance to
the use of telemarketing services in international markets targeted by the
Company, ICT's growth prospects could be materially adversely affected. In
addition, international operations are subject to numerous inherent challenges
and risks, including the difficulties associated with operating in multilingual
and multicultural environments, generally higher telecommunications costs,
varying and potentially burdensome regulatory requirements, fluctuations in
currency exchange rates, political and economic conditions in various
jurisdictions, tariffs and other trade barriers, longer accounts receivable
collection cycles, barriers to the repatriation of earnings and potentially
adverse tax consequences. Moreover, expansion into new geographic regions will
require considerable management and financial resources and, as a result, may
negatively impact the Company's results of operations. There can be no assurance
that factors such as those discussed above will not have a material adverse
effect on the Company's business, financial condition and results of operations.
See "Business--Strategy" and "--ICT's Services."

RISKS OF WORKING CAPITAL DEFICIENCY

At March 31, 1996, the Company had a working capital deficiency of
approximately $2.5 million ($5.1 million on a pro forma basis giving effect to
the S Corporation Distribution and Deferred Tax Liability described in "Prior S
Corporation Status.") The Company anticipates funding its ongoing working
capital needs principally through the net proceeds to the Company from this
offering and cash generated from operations. However, in the event that the
Company encounters difficulties in collecting accounts receivable or experiences
reduced contract renewal rates, any resulting deficiency in working capital
might require the Company to seek additional sources of capital. There can be no
assurance that such capital would be available on terms satisfactory to the
Company. See "Use of Proceeds" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital Resources."

RISKS ASSOCIATED WITH CALL CENTER MANAGEMENT STRATEGY

A key element of ICT's strategy is to pursue opportunities to manage new or
existing call centers for clients on an outsourced basis. The Company's
operating expenses have increased, and the Company anticipates further operating
expense increases in the future, with the addition of management and other
personnel with responsibility for the Company's call center management
activities. In addition, pursuing outsourcing opportunities will require members
of ICT's management team to devote time and attention that would otherwise be
devoted to other activities of the Company. ICT has limited experience operating
call centers for clients on an outsourced basis. ICT has recently entered into
two outsourced call center management contracts, but there can be no assurance
that ICT will be successful in entering into any additional such contracts or
that the two contracts into which it has entered or any additional contracts
into which it may enter will be profitable for the Company. If ICT is
unsuccessful in entering into a sufficient number of call center management
contracts, its future business prospects could be materially adversely affected.
See "Business--Strategy" and "--ICT's Services."

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<PAGE>

RISKS ASSOCIATED WITH LABOR FORCE

By its nature, the telemarketing industry is very labor intensive. Service
representatives, who make up the majority of the Company's workforce,
generally receive modest hourly wages, and many are part-time students or
homemakers. These personnel are characterized by a high turnover rate, which
increases the Company's recruiting and training costs. Some of the Company's
telemarketing activities, particularly insurance products sales and inbound
customer service, require highly trained employees. The Company competes for
qualified personnel with other telemarketing firms and in some instances is
required to pay premium hourly wages to attract and retain personnel. An
increase in hourly wages, costs of employee benefits or employment taxes
could materially adversely affect the Company. There can be no assurance that
the Company will be able to continue to hire and retain a sufficient number
of qualified personnel to support its planned growth. If the Company were
unable to recruit and retain a sufficient number of qualified employees, its
business, financial condition and results of operations could be materially
adversely affected. See "Business--Personnel and Training."

RELIANCE ON COMPUTER AND COMMUNICATIONS SYSTEMS; TECHNOLOGY RISKS

The Company's business is highly dependent on its computer system, including
its proprietary telemarketing software system, referred to as the Company's call
transaction management system ("CTMS"), and its telecommunications system, and
the temporary or permanent loss of all or a portion of either system, for
whatever reason, could have a material adverse effect on the Company's business,
financial condition and results of operations. In addition, ICT's ability to
compete effectively and meet its clients' needs is dependent upon its ongoing,
significant investment in sophisticated computer and telecommunications
technology, including CTMS, predictive dialers, automated call distributors and
digital switches. The Company has invested significantly in technology in the
past and anticipates that it will be necessary to continue to do so. Moreover,
the technologies upon which the Company is dependent are rapidly evolving and
characterized by short product life cycles, which require the Company to
anticipate and adapt to technological shifts. There can be no assurance that the
Company will be successful in anticipating or adapting to technological changes
or in selecting and developing new and enhanced technology on a timely basis.
See "Business--Strategy" and "--Technology."

DEPENDENCE ON TELEPHONE SERVICE

ICT's business is highly dependent upon telephone service provided by
various local and long distance telephone companies. Any significant
interruption in telephone service could adversely affect the Company.
Additionally, limitations on the ability of telephone companies to provide
ICT with increased capacity in the future could adversely affect the
Company's growth prospects. Rate increases imposed by these telephone
companies will increase the Company's operating expenses and could materially
adversely affect its business, financial condition and results of operations.
See "Management's Discussion and Analysis of Financial Condition and Results
of Operations."

COMPETITION

The telemarketing industry is intensely competitive. The Company competes
with numerous independent telemarketing firms, many of which are as large as
or larger than ICT, as well as the in-house telemarketing operations of many
of its clients or potential clients. In addition, most businesses that are
significant consumers of telemarketing services utilize more than one
telemarketing firm at a time and reallocate work among various firms from
time to time. A significant amount of such work is contracted on an
individual project basis, with the effect that the Company and other firms
seeking such business are required to compete with each other frequently as
individual projects are initiated. Furthermore, the Company believes there is
a trend among businesses with telemarketing operations toward outsourcing the
management of those operations to others and that this trend may attract new
competitors, including competitors that are substantially larger and better
capitalized than ICT, into the Company's market. There can be no assurance
that the Company will be able to compete effectively against its current
competitors or that additional competitors

9
<PAGE>

with greater resources than the Company will not enter the industry and compete
effectively against the Company. To the extent the Company is unable to compete
successfully against its existing and future competitors, its business,
financial condition and results of operations will be materially adversely
affected. See "Business -- Competition."

GOVERNMENT REGULATION

The telemarketing industry has become subject to an increasing amount of
federal and state regulation in the past five years. The Federal Telephone
Consumer Protection Act of 1991 (the "TCPA") limits the hours during which
telemarketers may call consumers and prohibits the use of automated telephone
dialing equipment to call certain telephone numbers. The TCPA creates a right
of action for both consumers and state attorneys general. A court may award
damages or impose penalties of $500 per violation, which may be trebled for
willful or knowing violations. The Federal Telemarketing and Consumer Fraud
and Abuse Prevention Act of 1994 and Federal Trade Commission ("FTC")
regulations prohibit deceptive, unfair or abusive practices in telemarketing
sales. Pursuant to its general enforcement powers, the FTC can obtain a
variety of types of equitable relief, including injunctions, refunds,
disgorgement, posting of bonds, and bars from continuing to do business, for a
violation of the acts and regulations it enforces. Both the FTC and state
attorneys general have authority to prevent telemarketing activities that
constitute "unfair or deceptive acts or practices." Under these general
enabling statutes, depending on the willfulness and severity of the violation,
penalties can include imprisonment, fines and a range of equitable remedies
such as consumer redress or the posting of bonds before continuing in
business. Additionally, some states have enacted laws and others are
considering enacting laws targeted directly at telemarketing practices. Most
of these statutes allow a private right of action for the recovery of damages
or provide for enforcement by state agencies permitting the recovery of
significant civil or criminal penalties, costs and attorneys' fees. There can
be no assurance that any such laws, if enacted, will not adversely affect or
limit the Company's current or future operations. Several of the industries
served by ICT, particularly the insurance and financial services industries,
are subject to government regulation. Although compliance with these
regulations is generally the responsibility of the Company's clients, ICT
could be subject to a variety of enforcement or private actions for its
failure or the failure of its clients to comply with such regulations. The
imposition of fines and penalties resulting from the Company's noncompliance
with these and other related laws and regulations could have an adverse effect
on the Company's business, financial condition and results of operations. The
Company and its employees who sell insurance products are required to be
licensed by various state insurance commissions for the particular type of
insurance product to be sold and participate in regular continuing education
programs, which currently are provided by the Company. The Company's provision
of such programs requires ICT to comply with certain state regulations,
changes in which could materially increase the Company's operating costs
associated with complying with such regulations. In the financial services
industry, the Company is subject to various federal regulations governing the
use of information disclosed by credit card holders. The Company's failure to
comply with these regulations could result in monetary penalties. See "Business
- -- Government Regulation."

DEPENDENCE ON KEY PERSONNEL

The Company's success is highly dependent on the efforts of its executive
officers and other key operations and technical personnel, particularly John
J. Brennan, the Company's Chairman, President and Chief Executive Officer.
The loss of the services of any of these individuals could have a material
adverse effect on the Company, and there can be no assurance that ICT will be
able to retain its existing key personnel or recruit additional key personnel
as needed. The Company maintains key-man life insurance policies on the lives
of certain officers of the Company, including John J. Brennan. In the event
of Mr. Brennan's death, the Company would receive approximately $1.25 million
in life insurance proceeds. The life insurance proceeds receivable upon the
death of other executive officers total approximately $435,000. Such proceeds
may not be sufficient to compensate the Company for the loss of such
officers' services, particularly with respect to Mr. Brennan. Although the
Company has entered into employment contracts with its executive officers,
the Company does not have non-competition agreements with its key personnel.
See "Management."

<PAGE>

CONCENTRATION OF STOCK OWNERSHIP; VOTING TRUST AGREEMENT; SHAREHOLDERS'
AGREEMENT

Immediately following the completion of this offering, the Company's
Chairman, President and Chief Executive Officer, John J. Brennan, and his
brother, the Vice Chairman of the Company, Donald P. Brennan, will
beneficially own (as defined in the regulations of the Securities and
Exchange Commission) approximately 74.4% and 72.2%, respectively, of the
Common Stock (approximately 71.4% and 68.9%, respectively, if the
Underwriters' over-allotment option is exercised in full). As a result,
Messrs. Brennan will be able to elect the entire Board of Directors and
control the outcome of all matters requiring shareholder approval. Such
voting concentration may have the effect of delaying or preventing a change
in control of the Company. In addition, Messrs. Brennan and the Company have
entered into a voting trust agreement with Messrs. Brennan as voting
trustees. Under the terms of the voting trust agreement, all acts of the
voting trustees must be by unanimous consent, although the agreement provides
that the voting trustees will be present for purposes of constituting a
quorum at any meeting of the shareholders, regardless of whether the shares
subject to the voting trust agreement are to be voted at the meeting. The
Company and Messrs. Brennan are also parties to a shareholders' agreement
which, among other things, restricts their ability to transfer shares of
Common Stock. See "Management," "Certain Transactions" and "Principal and
Selling Shareholders."

NO PRIOR PUBLIC MARKET FOR COMMON STOCK; POTENTIAL VOLATILITY OF STOCK PRICE

Prior to this offering, there has been no public market for the Common
Stock, and there can be no assurance that an active trading market will
develop or be sustained after this offering. The initial public offering
price has been determined through negotiation between the Company and the
Representatives of the Underwriters and may bear no relationship to the price
at which the Common Stock will trade after this offering. See "Underwriting"
for a discussion of the factors considered in determining the initial
public offering price. The market price of the Common Stock may be volatile
and may be significantly affected by factors such as actual or anticipated
fluctuations in the Company's operating results, announcements of new
services by the Company or its competitors, developments with respect to
conditions and trends in the telemarketing industry or in the industries
served by the Company, governmental regulation, changes in estimates by
securities analysts of the Company's or its competitors' or clients' future
financial performance, general market conditions and other factors, many of
which are beyond the Company's control. In addition, the stock market has
from time to time experienced significant price and volume fluctuations that
have adversely affected the market prices of securities of companies
irrespective of such companies' operating performances.

SHARES ELIGIBLE FOR FUTURE SALE

Sales of substantial amounts of the Company's Common Stock in the public
market following this offering could adversely affect the market price of the
Common Stock. Upon the completion of this offering, assuming no exercise of
outstanding options other than options to purchase an aggregate of 88,448
shares of Common Stock to be exercised in connection with this offering (all
of which shares are being offered and sold hereby), the Company will have
11,500,000 shares of Common Stock outstanding. Of these shares, the 2,500,000
shares of Common Stock sold in this offering will be freely tradeable without
restriction or registration under the Securities Act of 1933, as amended (the
"Securities Act"). The remaining 9,000,000 shares of Common Stock outstanding
as of the date of this Prospectus are "restricted securities" as defined by
Rule 144 under the Securities Act ("Rule 144"). Although an aggregate of
9,000,000 shares of Common Stock will be eligible for public sale upon the
completion of this offering, all of the Company's current shareholders have
agreed not to sell or otherwise dispose of any of such shares for a period of
180 days after the date of this Prospectus without the prior written consent
of Robertson, Stephens & Company.

11
<PAGE>

Stock Option Plan, Equity Incentive Plan and a stock option granted outside of
the 1987 Stock Option Plan, (excluding 88,448 shares of Common Stock underlying
options to be exercised by the Selling Shareholders in connection with this
offering) and (ii) 1,150,000 shares of Common Stock reserved for future issuance
under the Company's 1996 Equity Compensation Plan and 1996 Non-Employee
Directors Plan. The Company intends to file a Form S-8 registration statement
covering a portion of such shares of Common Stock within one year from the date
of this Prospectus. The shares registered under such registration statement will
be available for resale in the open market upon the exercise of vested options,
subject to Rule 144 volume limitations applicable to affiliates.

POSSIBLE ISSUANCES OF PREFERRED STOCK; CERTAIN PROVISIONS OF ARTICLES OF
INCORPORATION, BYLAWS AND PENNSYLVANIA LAW

The Company's Board of Directors has the authority to issue up to
5,000,000 shares of preferred stock and to determine the price, rights,
preferences and privileges of those shares without shareholder approval. The
Company's Bylaws provide for the staggered election of directors to serve for
one-, two- and three-year terms, and for successive three-year terms
thereafter, subject to removal only for cause upon the vote of a majority of
the shares of Common Stock represented at a shareholders' meeting. In
addition, the Company is subject to certain anti-takeover provisions of the
Pennsylvania Business Corporation Law of 1988, as amended (the "PBCL"). All
of these provisions may, in certain circumstances, deter or discourage
takeover attempts and other changes in control of the Company not approved by
the Company's Board of Directors. See "Description of Capital Stock."

DILUTION

The initial public offering price is substantially higher than the net
tangible book value per share of the Common Stock. Purchasers of shares of
Common Stock in this offering will, therefore, suffer immediate and
substantial dilution of $12.96 in the net tangible book value per share of
Common Stock. To the extent that currently outstanding options (many of which
have nominal exercise prices) to purchase shares of the Company's Common
Stock are exercised, investors will experience substantial further dilution.
See "Dilution."

12
<PAGE>
USE OF PROCEEDS

The net proceeds to the Company from this offering are estimated to be
$35.1 million, after deducting underwriting discounts and commissions and
estimated offering expenses payable by the Company. The Company will use a
portion of such proceeds to make the S Corporation Distribution, which would
have been approximately $2.5 million if the Termination Date had been March 31,
1996 (the actual amount will be adjusted to reflect the Company's actual taxable
income through the Termination Date less any state income tax payable by the
Company with respect to such income), as described below in "Prior S Corporation
Status." The remainder of the net proceeds will be used to repay indebtedness
estimated to be approximately $14.8 million as of June 30, 1996, with the
balance being used for working capital and general corporate purposes, including
possible future acquisitions. Although the Company plans to regularly evaluate
possible acquisition opportunities, it is not currently engaged in any
negotiations regarding any acquisition. Pending such uses, the Company intends
to invest the net proceeds to the Company from this offering in investment
grade, short-term, interest-bearing securities.

As of June 30, 1996, the Company's estimated $14.8 million of indebtedness
will include bank indebtedness consisting of $8.5 million under the Company's
line of credit (the "Revolver"), $675,000 and $439,000 under term loans,
$658,000 under an equipment loan facility (the "Equipment Line") and $1.5
million under an additional line of credit (the "Brennan Loan"), all of which
accrue interest at the bank's base rate, which was 8.25% as of April 30, 1996,
and which are due and payable in June 1997, September 1988, July 1997, April
2001 and November 1996, respectively. Borrowings under the Revolver are used
for working capital and vary depending on the Company's working capital needs.
From May 31, 1995 to May 31, 1996, the Company incurred net borrowings under
the Revolver of $2.9 million. In April 1996, the Company borrowed
approximately $669,000 under the Equipment Line to purchase telecommunications
equipment and $1.5 million under the Brennan Loan to make a loan to Messrs.
Brennan to provide them with funds to pay income tax obligations. In addition,
the Company's indebtedness includes Eurotel's total indebtedness to its local
bank, of approximately $500,000, which accrues interest at such bank's prime
rate of interest, which was 5.63% at April 30, 1996, and is due in June 1996,
the Company's capitalized lease obligations of approximately $2.3 million,
which have a weighted average interest rate of 10.0% and maturities ranging
from three to five years, and approximately $210,000 in promissory notes to
affiliates which are due on demand and have an annual interest rate of 12.0%.
See "Prior S Corporation Status," "Certain Transactions" for a description of
the indebtedness to be repaid to affiliates and Notes 6, 7 and 8 of Notes to
Consolidated Financial Statements.

PRIOR S CORPORATION STATUS

The Company has been an "S corporation" subject to taxation under
Subchapter S of the Internal Revenue Code since its inception in 1987. As a
result, the net income of the Company, for federal and certain state and
local tax purposes, has been reported by and taxed directly to the Company's
shareholders, rather than to the Company.

The Company filed a notice with the Internal Revenue Service on June 12, 1996
(the "Termination Date") terminating its S corporation status. The Company will
use a portion of the net proceeds from this offering to distribute to its
current shareholders an amount representing the Company's previously taxed but
undistributed S corporation earnings through the Termination Date (the "S
Corporation Distribution"). The amount of the S Corporation Distribution would
have been approximately $2.5 million if the Termination Date had been March 31,
1996, but the actual amount will be adjusted to reflect the Company's actual
taxable income through the Termination Date, less any state income tax payable
by the Company with respect to such income. In April 1996, the Company advanced
$1.5 million of the S Corporation Distribution to its shareholders and incurred
the Brennan Loan primarily to provide the shareholders with funds to pay their
income tax obligations. As a result, in connection with this offering, $1.5
million of the S corporation Distribution will be repaid to the bank as
described above in "Use of Proceeds" and the balance of the S Corporation
Distribution will be distributed to the shareholders.

In addition, as a result of the termination of its S corporation status,
the Company will record a net deferred income tax liability and corresponding
income tax expense (the "Deferred Tax Liability"), effective upon the
Termination Date. The amount of the Deferred Tax Liability would have been
approximately $1.2 million if the Termination Date had been March 31, 1996,
but the actual amount will be adjusted to reflect the effect of the Company's
actual operating results through the Termination Date.

DIVIDEND POLICY

The Company intends to retain its earnings to finance future operations
and expansion and does not expect to pay any dividends in the foreseeable
future. Under the terms of its bank loan agreement, the Company is prohibited
from paying cash dividends without the consent of its lender.

13
<PAGE>
CAPITALIZATION

The following table sets forth, as of March 31, 1996: (i) the actual
capitalization of the Company, (ii) the pro forma capitalization of the Company
after giving effect to the termination of the Company's S corporation status and
(iii) the pro forma capitalization of the Company as adjusted to give effect to
the sale by the Company of 2,411,552 shares of Common Stock offered hereby and
the application of the net proceeds as set forth in "Use of Proceeds." This
table should be reviewed in conjunction with the Consolidated Financial
Statements and Notes thereto appearing elsewhere in this Prospectus.

March 31, 1996
-----------------------------------------
Pro Forma
Actual Pro Forma(1) As Adjusted(1)
-------- ------------ --------------
(In thousands, except share data)
<S> <C> <C> <C>

Short-term debt:
Borrowings on lines of credit ....................... $6,853 $6,853 $ --
Current portion of long-term debt and capitalized
lease obligations ................................. 1,647 1,647 --
-------- ------------ -----------
Total short-term debt .............................. $8,500 $8,500 $ --
======== ============ ===========
Long-term debt and capitalized lease obligations, net of
current portion(2) .................................. $2,516 $2,516 $ --
-------- ------------ -----------
Shareholders' equity:
Preferred Stock, $.01 par value; 5,000,000 shares
authorized, no shares issued and outstanding ..... -- -- --
Common Stock, $.01 par value; 40,000,000 shares
authorized, 9,000,000 shares issued and
outstanding, actual and pro forma, and 11,500,000
shares issued and outstanding, pro forma as
adjusted(3) ....................................... 90(4) 90(4) 115
Additional paid-in capital .......................... 578 805 35,923
Deferred compensation ............................... (261) (261) (261)
Retained earnings ................................... 3,863 -- --
Cumulative translation adjustment ................... 24 24 24
-------- ------------ -----------
Total shareholders' equity ......................... 4,294 658 35,801
-------- ------------ -----------
Total capitalization ............................ $6,810 $3,174 $35,801
======== ============ ===========

</TABLE>

- ------
(1) Reflects the effects of the termination of the Company's S corporation
status, including the S Corporation Distribution and the Deferred Tax
Liability. See "Prior S Corporation Status" and Note 3 of Notes to
Consolidated Financial Statements.
(2) See Notes 6, 7 and 8 of Notes to Consolidated Financial Statements for
information concerning the Company's long-term debt and capitalized lease
obligations.
(3) Based upon the number of shares outstanding as of March 31, 1996.
Excludes 1,121,602 shares of Common Stock issuable upon the exercise of
stock options outstanding on that date. See "Management-- Employee
Benefit Plans" and Note 10 of Notes to Consolidated Financial Statements.

(4) Represents 4,500,000 shares of Class A Common Stock, $.01 par value,
issued and outstanding and 4,500,000 shares of Class B Common Stock, $.01
par value, issued and outstanding, all of which have converted to Common
Stock.

14
<PAGE>
DILUTION

The net tangible book value of the Company as of March 31, 1996 was
approximately $3,468,000, or $.38 per share. Net tangible book value per share
is equal to the total tangible assets of the Company less total liabilities,
divided by the number of shares of Common Stock outstanding. The pro forma net
tangible book value of the Company as of March 31, 1996, after giving effect to
the S Corporation Distribution and the Deferred Tax Liability, would have been a
deficit of approximately ($168,000), or ($.02) per share. After giving effect to
the sale by the Company of 2,411,552 shares of Common Stock offered hereby and
after deduction of underwriting discounts and commissions and estimated offering
expenses payable by the Company, the pro forma net tangible book value of the
Company as of March 31, 1996 would have been approximately $34,975,000, or $3.04
per share. This represents an immediate increase in pro forma net tangible book
value of $3.06 per share to existing shareholders and an immediate dilution in
pro forma net tangible book value of $12.96 per share to new shareholders
purchasing Common Stock in the offering. The following table illustrates this
per-share dilution.

Initial public offering price per share .................. $16.00
Pro forma net tangible book value per share before the
offering ............................................. ($ .02)
Increase in pro forma net tangible book value per share
attributable to new shareholders ..................... 3.06
--------
Pro forma net tangible book value per share after the
offering ............................................. 3.04
------
Dilution per share to new shareholders .................. $12.96
=======

The following table summarizes, on a pro forma basis as of March 31, 1996,
the number of shares of Common Stock purchased from the Company, the total
consideration paid to the Company and the average price per share paid by
existing shareholders and by purchasers of the shares offered by the Company
hereby.

<TABLE>
<CAPTION>
Shares Purchased(1) Total Consideration
------------------------- -------------------------- Average Price
Number Percent Amount Percent Per Share
------------ --------- ------------- --------- ---------------
<S> <C> <C> <C> <C> <C>
Existing shareholders(2) . 9,088,448 79.0% $ 408,996 1.0% $ .05
New shareholders ....... 2,411,552 21.0 38,584,832 99.0 16.00
------------ --------- ------------- ---------
Total ................ 11,500,000 100.0% $38,993,828 100.0%
============ ========= ============= =========

</TABLE>

- ------
(1) Sales by the Selling Shareholders in this offering will reduce the number
of shares held by existing shareholders to 9,000,000 shares, or 78.3% of
the total number of shares of Common Stock to be outstanding after this
offering, and will increase the number of shares held by new shareholders
to 2,500,000 shares, or 21.7% of the total number of shares of Common
Stock to be outstanding after this offering. See "Principal and Selling
Shareholders."
(2) Includes the exercise of options to purchase an aggregate of 88,448
shares of Common Stock which will occur prior to the completion of this
offering.

The foregoing table does not take into account the exercise of outstanding
stock options, other than options to purchase an aggregate of 88,448 shares
of Common Stock to be exercised in connection with the offering (all of which
shares are being offered and sold hereby). To the extent that any additional
options are exercised, there will be further dilution to new investors. See
"Management--Employee Benefit Plans."

15
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated financial data as of and for each of the years
ended December 31, 1993, 1994 and 1995, are derived from the audited
consolidated financial statements of the Company included elsewhere in this
Prospectus. The selected consolidated financial data as of and for each of
the years ended December 31, 1991 and 1992 are derived from the audited
financial statements of the Company not included herein. The selected
consolidated financial data for the three months ended March 31, 1995 and
1996 have been derived from the unaudited financial statements of the Company
and, in the opinion of management, include all adjustments (consisting only
of normal recurring adjustments) which are necessary to present fairly the
results of operations and financial position of the Company for those periods
in accordance with generally accepted accounting principles. The selected
consolidated financial data for the three months ended March 31, 1996 are not
necessarily indicative of the results to be expected for the full year. The
following selected consolidated financial data should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results
of Operations" and the Consolidated Financial Statements and Notes thereto
included elsewhere in this Prospectus.
<TABLE>
<CAPTION>

Three Months Ended
Year Ended December 31, March 31,
---------------------------------------------------------- ---------------------
1991 1992 1993 1994 1995 1995 1996
--------- --------- --------- --------- --------- -------- ---------
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations Data:
Net revenues ....................... 16,019 $17,502 $22,271 $34,123 $52,116 $9,294 $16,220
-------- --------- --------- --------- --------- -------- -------
Operating expenses:
Cost of services ................. 9,291 10,269 12,746 19,593 28,639 5,210 8,767
Selling, general and
administrative 6,026 6,845 8,630 13,121 21,073 3,858 6,796
-------- --------- --------- --------- --------- -------- -------
Total operating expenses ...... 15,317 17,114 21,376 32,714 49,712 9,068 15,563
-------- --------- --------- --------- --------- -------- -------
Operating income .............. 702 388 895 1,409 2,404 226 657
Interest expense .................. 366 338 326 511 834 164 233
-------- --------- --------- --------- --------- -------- -------
Net income before taxes ........... $ 336 $ 50 $ 569 $ 898 $ 1,570 $ 62 $ 424
======== ========= ========= ========= ========= ======== =======
Pro forma provision for income
taxes(1)......................... 667 170
--------- -------
Pro forma net income(1) ........... $ 903 $ 254
========= =======
Pro forma net income per share(1) .. $ .09 $ .03
========= =======
Shares used in computing pro forma
net income per share(1) ......... 9,702 9,702
========= =======
</TABLE>
<TABLE>
<CAPTION>
December 31, March 31, 1996
------------------------------------------------------- -----------------------------------------
Pro Forma
1991 1992 1993 1994 1995 Actual Pro Forma(2) Adjusted(2)(3)
--------- --------- -------- --------- ----------- ---------- ------------ --------------
(In thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Working capital (deficit) ..... $ (511) $ (398) $ (461) $ (462) $ (1,601) $(2,484) $(5,078) $27,549
Total assets .................. 5,732 6,298 7,410 12,044 18,481 21,418 21,418 43,094
Long-term debt, less current
maturities ................. 1,145 925 625 941 881 705 705 --
Capitalized lease obligations,
less current maturities ..... 174 257 512 807 1,632 1,811 1,811 --
Shareholders' equity .......... 751 801 1,371 2,270 3,843 4,294 658 35,801
</TABLE>
- ------
(1) The Company has operated as an S corporation for income tax purposes
since its inception in 1987 and has terminated such status in connection
with this offering. See Note 3 of Notes to Consolidated Financial
Statements for information concerning the computation of the pro forma
provision for income taxes, pro forma net income and pro forma net income
per share.

(2) Reflects the S Corporation Distribution and the Deferred Tax Liability.
See "Prior S Corporation Status" and Note 3 to Notes to Consolidated
Financial Statements.
(3) Adjusted to give effect to the sale by the Company of 2,411,552 shares of
Common Stock offered hereby and the application of the net proceeds as set
forth in "Use of Proceeds."
16
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In addition to historical information, the following Management's
Discussion and Analysis of Financial Condition and Results of Operations
contains forward-looking statements that involve risks and uncertainties. The
Company's actual results could differ significantly from those anticipated in
these forward-looking statements as a result of certain factors, including
those discussed in "Risk Factors" and elsewhere in this Prospectus.

OVERVIEW

ICT is an independent provider of call center teleservices, which
consist of outbound and inbound telemarketing, and value-added services,
such as marketing, research and consulting services, to businesses
domestically and internationally. In addition, the Company is pursuing
opportunities to manage clients' call centers on a contract basis. Acquired
by management from Decision Industries Corporation, a computer peripherals
and service organization, in April 1987, ICT has become a full-service
teleservices provider for businesses within its targeted industries, which
include insurance, financial services, publishing, telecommunications,
consumer and, more recently, pharmaceutical and health care services and
computer software and hardware.

The Company has broadened its market position from its original outbound
consumer telemarketing orientation to its present range of call center services
through both internal growth and a series of strategic acquisitions. In 1988,
the Company entered into the market research data collection business by
acquiring the business of Valley Forge Information Services, Inc. In 1994, the
Company strengthened its inbound consumer operations by acquiring the business
of American Tele/Response, Inc. Also in 1994, ICT initiated its international
expansion by acquiring the business of Spantel, Inc. ("Spantel"), which provides
telemarketing services to Spanish-speaking markets in the United States and
Latin America, and by forming Eurotel Marketing Limited ("Eurotel"), a joint
venture with a subsidiary of R.R. Donnelley & Sons Company ("Donnelley"), to
provide multilingual pan-European telemarketing sevices. The Company recently
entered into an agreement with Donnelley to purchase Donnelley's 40% interest in
Eurotel for an amount equal to 40% of Eurotel's net book value. The purchase
price is not expected to be material to the Company's business, financial
condition or liquidity. In May 1995, the Company expanded its value-added
services through the acquisition of the business comprising its Smartline
division, a telebanking services provider. In January 1996, the Company further
expanded its international operations through the establishment of ICT/Canada
Marketing, Inc. ("ICT Canada"). The Company provided substantially all of the
initial capitalization, has control and has the ability to receive all of the
earnings of ICT Canada. The Company's control of ICT Canada is provided for in
a shareholders' agreement, which, among other things, allows the Company,
through resolutions proposed by management of ICT Canada, which currently
consists of John J. Brennan (the Company's Chairman, President and Chief
Financial Officer) and Carl E. Smith (the Company's Senior Vice President,
Finance and Administration, Chief Financial Officer and Secretary), to elect an
additional number of directors to ensure that the Company controls a majority of
the board. In addition, the Company has an irrevocable right, which it can
exercise at any time for a nominal amount, to purchase on behalf of any person
designated by the Company the stock that it does not own in ICT Canada. As a
result, there are no matters involving ICT Canada that cannot be controlled by
the Company. The Company consolidates 100% of ICT Canada in its consolidated
financial statements.

The Company's net revenues have grown from $22.3 million in 1993 to $52.1
million in 1995. This rapid growth primarily resulted from the Company's
ability to meet increased client demands, to broaden its service offerings
and to expand internationally. Specifically, the Company's net revenues from
international services (services provided by Spantel and Eurotel) were
$700,000 and $2.4 million in 1994 and 1995, respectively. The Company
believes that its recent acquisitions and investments in technology
differentiate it in the marketplace and position it for long-term revenue
growth and improved profitability.

The Company's cost of services is directly related to providing
telemarketing services and consists principally of direct labor and
telecommunications costs. These costs have decreased as a percentage of net
revenues since 1994 as the Company has expanded its domestic telemarketing
operations to lower cost labor markets, improved its operating efficiencies
in certain telemarketing operations and negotiated more favorable
telecommunication contracts.

17
<PAGE>

Selling, general and administrative expenses are comprised principally of
all expenses that directly support the operations of the business units,
including management, facilities costs, equipment depreciation and
maintenance, sales and marketing activities and client support services, as
well as corporate management costs, including accounting and finance, human
resources, information services and other administrative costs. Selling, general
and administrative expenses have increased significantly since 1993, as the
Company has expanded its domestic operations internally and through acquisitions
and established an international presence in Europe, Latin America and Canada.

The Company has been subject to taxation under Subchapter S of the
Internal Revenue Code since its inception in 1987. As a result, the net
income of the Company, for federal and certain state and local tax purposes,
has been reported by and taxed directly to the Company's shareholders, rather
than the Company. Pro forma net income has been computed as if the Company
had been fully subject to federal and state income taxes based upon the tax
laws in effect during the respective periods.

RESULTS OF OPERATIONS

The following table sets forth statement of operations data as a
percentage of net revenues for the periods indicated:

<TABLE>
<CAPTION>
Three Months Ended
Year Ended December 31, March 31,
---------------------------------- ----------------------
1993 1994 1995 1995 1996
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net revenues .......................... 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
--------- --------- --------- --------- ---------
Operating expenses:
Cost of services .................... 57.2 57.4 55.0 56.1 54.1
Selling, general and administrative . 38.8 38.5 40.4 41.5 41.9
--------- --------- --------- --------- ---------
Total operating expenses ........... 96.0 95.9 95.4 97.6 96.0
--------- --------- --------- --------- ---------
Operating income ................... 4.0 4.1 4.6 2.4 4.0
Interest expense ...................... 1.5 1.5 1.6 1.7 1.4
--------- --------- --------- --------- ---------
Net income before taxes ............... 2.5 2.6 3.0 .7 2.6
--------- --------- --------- --------- ---------
Pro forma provision for income taxes(1) . 1.1 1.2 1.3 .4 1.0
--------- --------- --------- --------- ---------
Pro forma net income(1) ............... 1.4% 1.4% 1.7% .3% 1.6%
========= ========= ========= ========= =========
</TABLE>

- ------
(1) See Note 3 of Notes to Consolidated Financial Statements for information
concerning the computation of the pro forma provision for income taxes
and pro forma net income.

THREE MONTHS ENDED MARCH 31, 1996 AND 1995

Net Revenues. Net revenues increased 74.5% to $16.2 million for the three
months ended March 31, 1996 from $9.3 million for the comparable period in
1995. Revenues increased primarily due to continued growth in consumer
telemarketing services to the insurance and financial services industries and
revenues from telebanking operations, which were added through the Company's
acquisition of the business comprising its Smartline division in May 1995.

Cost of Services. Cost of services increased 68.3% to $8.8 million for
the three months ended March 31, 1996 from $5.2 million for the comparable
period in 1995. As a percentage of net revenues, cost of services decreased
to 54.1% for the three months ended March 31, 1996 from 56.1% for the
comparable period in 1995, primarily due to increased productivity in the
Company's inbound operations.

Selling, General and Administrative. Selling, general and administrative
expenses increased 76.2% in the first quarter of 1996 to $6.8 million from
$3.9 million in the comparable 1995 period. As a percentage of net revenues,
selling, general and administrative expenses increased to 41.9% in the 1996
period from 41.5% in the 1995 period, primarily due to costs associated with
the Company's entry into the Canadian market.

18
<PAGE>
Interest Expense. Interest expense increased to $233,000 in the 1996
period from $164,000 in the 1995 period, due to higher average outstanding
balances of bank and capitalized lease debt, which were partially offset by
lower average interest rates during the 1996 period.

Pro Forma Provision for Income Taxes. The pro forma provision for income
taxes represents the provision for federal and state income taxes at an
effective tax rate of 40.1% for the three months ended March 31, 1996 and
42.5% for the comparable period in 1995. These rates reflect combined federal
and state income taxes as if the Company had been treated as a C corporation
in both periods.

YEARS ENDED DECEMBER 31, 1995 AND 1994

Net Revenues. Net revenues increased 52.7% to $52.1 million in 1995 from
$34.1 million in 1994. The increase in net revenues was attributable
primarily to continued growth in consumer telemarketing services to the
insurance and financial services sectors, revenues from the telebanking
operations of Smartline (acquired in May 1995) and an increase in consumer
inbound and business-to-business teleservices.

Cost of Services. Cost of services increased 46.2% to $28.6 million in
1995 from $19.6 million in 1994. As a percentage of net revenues, cost of
services decreased to 55.0% in 1995 from 57.4% in 1994, primarily due to the
full year effect of lower telephone rates negotiated in 1994 with its
telecommunications providers.

Selling, General and Administrative. Selling, general and administrative
expenses increased 60.6% to $21.1 million in 1995 from $13.1 million in 1994.
As a percentage of net revenues, these expenses increased to 40.4% in 1995
from 38.5% in 1994, primarily due to additional sales and support personnel
for new target industries and international expansion.

Interest Expense. Interest expense increased to $833,000 in 1995 from
$511,000 in 1994 due to higher average outstanding balances of bank and
capitalized lease debt and higher average interest rates during 1995.

Pro Forma Provision for Income Taxes. The pro forma provision for income
taxes represents the provision for federal and state income taxes at
effective tax rates of 42.5% in 1995 and 45.2% in 1994, as if the Company had
been treated as a C corporation in both years. The decrease in the effective
tax rate was primarily due to lower state income tax rates and the lower
percentage effect of certain non-deductible expenses.

YEARS ENDED DECEMBER 31, 1994 AND 1993

Net Revenues. Net revenues increased 53.2% to $34.1 million in 1994 from
$22.3 million in 1993, primarily as a result of increased teleservices
revenues from insurance clients.

Cost of Services. Cost of services increased 53.7% to $19.6 million in
1994 from $12.7 million in 1993. As a percentage of net revenues, cost of
services was relatively stable at 57.4% in 1994 and 57.2% in 1993.

Selling, General and Administrative. Selling, general and administrative
expenses increased 52.1% to $13.1 million in 1994 from $8.6 million in 1993.
As a percentage of net revenues, these expenses were relatively stable at
38.5% in 1994 and 38.8% in 1993.

Interest Expense. Interest expense increased to $511,000 in 1994 from
$325,000 in 1993 due to higher average outstanding balances of bank and
capitalized lease debt and higher average interest rates during 1994.

Pro Forma Provision for Income Taxes. The pro forma provision for income
taxes represents the provision for federal and state income taxes at
effective tax rates of 45.2% in 1994 at 46.2% in 1993, as if the Company had
been treated as a C corporation in both years.

19
<PAGE>
QUARTERLY RESULTS AND SEASONALITY

The following table sets forth statement of operations data for each of
the four quarters of 1995 and the first quarter of 1996, as well as such data
expressed as a percentage of net revenues. This quarterly information is
unaudited but has been prepared on a basis consistent with the Company's
audited financial statements presented elsewhere in this Prospectus and, in
the Company's opinion, includes all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of the information
for the quarters presented. The results for any quarter are not necessarily
indicative of results for any future period.

<TABLE>
<CAPTION>
Quarter Ended
----------------------------------------------------------------
Mar. 31, June 30, Sept. 30, Dec. 31, Mar. 31,
1995 1995 1995 1995 1996
---------- ---------- ----------- ---------- ----------
(In thousands)
<S> <C> <C> <C> <C> <C>
Net revenues ........................ $9,294 $12,539 $14,246 $16,037 $16,220
---------- ---------- ----------- ---------- ----------
Operating expenses:
Cost of services .................. 5,210 7,090 7,856 8,483 8,767
Selling, general and administrative . 3,858 4,988 5,704 6,524 6,796
---------- ---------- ----------- ---------- ----------
Total operating expenses ......... 9,068 12,078 13,560 15,007 15,563
---------- ---------- ----------- ---------- ----------
Operating income .................. 226 461 686 1,030 657
Interest expense .................... 164 203 254 212 233
---------- ---------- ----------- ---------- ----------
Net income before taxes ............. $ 62 $ 258 $ 432 $ 818 $ 424
========== ========== =========== ========== ==========
Pro forma provision for income taxes . 26 110 184 347 170
---------- ---------- ----------- ---------- ----------
Pro forma net income ................ $ 36 $ 148 $ 248 $ 471 $ 254
========== ========== =========== ========== ==========
</TABLE>

<TABLE>
<CAPTION>
Quarter Ended
----------------------------------------------------------------
Mar. 31, June 30, Sept. 30, Dec. 31, Mar. 31,
1995 1995 1995 1995 1996
---------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net revenues ....................... 100.0% 100.0% 100.0% 100.0% 100.0%
---------- ---------- ----------- ---------- ----------
Operating expenses:
Cost of services ................. 56.1 56.5 55.2 52.9 54.1
Selling, general and administrative 41.5 39.8 40.0 40.7 41.9
---------- ---------- ----------- ---------- ----------
Total operating expenses ........ 97.6 96.3 95.2 93.6 96.0
---------- ---------- ----------- ---------- ----------
Operating income ................ 2.4 3.7 4.8 6.4 4.0
Interest expense ................... 1.7 1.6 1.8 1.3 1.4
---------- ---------- ----------- ---------- ----------
Net income before taxes ............ .7 2.1 3.0 5.1 2.6
========== ========== =========== ========== ==========
Pro forma provision for income taxes . .4 .9 1.3 2.2 1.0
---------- ---------- ----------- ---------- ----------
Pro forma net income ............... .3% 1.2% 1.7% 2.9% 1.6%
========== ========== =========== ========== ==========

</TABLE>

The Company has experienced and expects to continue to experience
significant quarterly variations in operating results, principally as a
result of the timing of clients' telemarketing campaigns, the commencement
and expiration of contracts, the timing and amount of new business generated
by the Company, the Company's revenue mix, the timing of additional selling,
general and administrative expenses to support the growth and development of
new business units and the competitive conditions in the telemarketing
industry. The Company's business tends to be strongest in the fourth quarter
due to the high level of client telemarketing activity prior to the holiday
season, particularly in the financial services and consumer industries.

In the first quarter, business generally slows as a result of reduced
telemarketing activities in the financial services industry and client
transitions to new marketing programs during the first quarter of the
calendar year. In addition, the Company typically expands its operations in
the first quarter to support anticipated business growth beginning in the
second quarter. As a result, selling, general and administrative costs
typically increase in the first quarter without a commensurate increase in
revenues, which results in decreased profitability for the first quarter
versus the previous fourth quarter. For example, in the first quarter of
1996, revenues were only 1.1% higher than those in the fourth quarter of
1995, while selling, general and admin-
20
<PAGE>
istrative expenses increased 4.2%, resulting in lower operating income and net
income than would otherwise have been the case. The Company's operating
results typically are similarly affected during the third quarter, as
marketing projects slow during the summer months while the Company invests in
additional operating capacity to support anticipated business demand in the
fourth quarter. This trend did not occur in the third quarter of 1995 due to
the Company's engagement in several major telemarketing projects during this
period.

In connection with this offering, the Company will incur a non-recurring,
non-cash compensation expense of $12.7 million in the second quarter of 1996.
The expense will result from the granting of options to replace certain
previously granted options to provide for an extended exercise period and the
vesting of certain options contingent upon the completion of this offering.
During the same quarter, the Company will record the Deferred Tax Liability.
These charges will result in a net loss for the quarter and an anticipated net
loss for the year ending December 31, 1996. See "Prior S Corporation Status" and
Notes 3 and 10 of Notes to Consolidated Financial Statements.

LIQUIDITY AND CAPITAL RESOURCES

Historically, ICT's primary sources of liquidity have been cash flow from
operations and borrowing on its bank revolving line of credit. Acquisitions
and capital expenditures have been financed through bank term loans and
capitalized lease obligations. The Company has utilized any excess cash from
operations to repay its revolving bank loan and, historically, has maintained
a minimum cash balance.

Cash provided by operating activities was $614,000 for the three months
ended March 31, 1996 compared to cash used of $25,000 for the same period in
1995, and cash provided by operating activities was $528,000, $913,000 and
$1.1 million in 1993, 1994 and 1995, respectively. The increases in each
period were due to higher net income before depreciation and amortization,
which were partially offset by the cash used for working capital. The working
capital increases were principally related to higher accounts receivable
balances resulting from the increases in net revenues in each period.

Cash provided by financing activities was $181,000 for the three months
ended March 31, 1996 compared to $828,000 for the same period in 1995, and
was $113,000, $424,000 and $2.2 million in 1993, 1994 and 1995, respectively.
The cash provided by financing activities represented borrowings under the
Company's bank line of credit and various term loans, net of any repayments.

Cash used in investing activities was $1.3 million for the three months
ended March 31, 1996 compared to $692,000 for the same period in 1995, and
was $597,000, $1.4 million and $2.8 million in 1993, 1994 and 1995,
respectively. The increases in each period were due to increasing levels of
property and equipment purchases to support the growth in the Company's
telemarketing activities. From January 1, 1993 through March 31, 1996, the
Company's capital expenditures totalled $5.4 million and its additions to
capitalized leased assets totalled $4.0 million. During that period, the
Company increased its number of workstations by approximately 700. In
addition, cash in the aggregate amount of approximately $1.0 million was used
in 1994 and 1995 to expand the Company's international and value-added
services through the acquisition of certain businesses. See Note 5 of Notes
to Consolidated Financial Statements.

In April 1996, the Company entered into a loan agreement with a bank, which
provides for a $15.0 million line of credit, a $3.5 million equipment line of
credit and a $1.5 million short-term loan. Borrowings on the line of credit are
limited to 80% of eligible accounts receivable. The line of credit bears
interest at the bank's base rate (8.25% as of March 31, 1996) and expires on
June 30, 1997. The Company's outstanding balance on the line of credit at March
31, 1996 was $6.3 million. The equipment line of credit is to be used to finance
90% of the cost of equipment purchases. Individual borrowings must be at least
$200,000 and, once drawn, become, at the option of the bank, three to five-year
term loans due in equal monthly installments. Borrowings under the equipment
line bear interest at either the bank's base rate or a fixed rate set at the
U.S. Treasuries Reference Rate plus 2.75%, at the option of the Company. If the
fixed rate option is selected, any principal prepayments could be subject to
penalties. The $1.5 million short-term loan bears interest at the bank's base
rate and is due on November 30, 1996. The proceeds from the loan were advanced
by the Company to its shareholders in April 1996 in order to allow the
shareholders to pay their 1995 and estimated 1996 income tax liabilities on the
Company's taxable income, which, due to the Company's prior S corporation
status, is taxable to the Company's shareholders. Upon the completion of this
offering, the amount advanced to the shareholders will be treated as a portion
of the of S Corporation Distribution. See "Prior S Corporation Status" and
"Certain Transactions."

<PAGE>

The Company's telemarketing activities will continue to require
significant capital expenditures. Capital expenditures, including capitalized
leases, were $1.3 million in 1993, $2.3 million in 1994 and $4.3 million in
1995. The Company expects to spend approximately $5.0 million on capital
expenditures in 1996. Equipment purchases have been financed through the
Company's equipment line of credit and through capitalized lease obligations
with various equipment vendors and lending institutions. The lease
obligations are payable in varying installments through 2000. Outstanding
obligations under capitalized leases at March 31, 1996 were $2.6 million. See
Notes 6 and 7 of Notes to Consolidated Financial Statements.

The Company believes that the funds generated from operations, together
with the net proceeds to the Company from this offering and available credit
under its line of credit and equipment line, will be sufficient to finance
its current operations and planned capital expenditures at least through
1997.

22
<PAGE>
BUSINESS

The following Business section contains forward-looking statements that
involve risks and uncertainties. The Company's actual results could differ
materially from those anticipated in these forward-looking statements as a
result of certain factors, including those set forth under "Risk Factors" and
elsewhere in this Prospectus.

The Company is an independent provider of call center teleservices, which
consist of outbound and inbound telemarketing and customer support services,
together with related value-added services such as marketing, research and
consulting services, to businesses domestically and internationally. The
Company's call center management experience, technological leadership and
expertise in target industries enable it to provide its clients with high
quality, cost-effective call center services. In addition to supporting
customers' teleservices programs from its own call centers, ICT is pursuing
additional opportunities to manage clients' call centers on a contract basis.
The Company believes there is a trend by businesses to outsource many of their
internal telephone sales, customer service and product support function. In
order to capitalize on this trend, the Company is incurring certain startup
costs and expenses (the amount of which has not been material to date). Although
the Company has recently entered into two call center management contracts, as
of March 31, 1996, the Company had not received any revenues from the contracts.
The Company believes it was the first teleservices firms to establish
international call centers with multilingual capabilities, which it intends to
further expand to meet the global needs of multinational clients.

INDUSTRY OVERVIEW

The call center services market includes traditional telemarketing
activities such as outbound and inbound telephone marketing, as well as
customer support, call center management and value-added marketing, research
and consulting services. Telemarketing and other call center services have
evolved significantly in recent years, as businesses have increasingly
focused on utilizing highly personalized services to target consumer and
business customers to create sales growth, provide customer support services
and aid customer retention. Direct Marketing magazine estimates that
telemarketing industry expenditures in the United States grew to
approximately $77 billion by 1995. The Company believes that all but a small
percentage of this spending was incurred for services performed by in-house
call centers; however, companies are increasingly outsourcing existing and
new call center operations to specialists.

In today's competitive marketplace, the Company believes that businesses are
increasingly recognizing the competitive advantages of utilizing telemarketing
and other call center services to reach and communicate with their customers.
With response rates several times higher than those associated with direct mail
activities, telemarketing provides an effective channel through which businesses
are able to contact targeted customers. As a result, call centers have become
robust channels for the marketing and sale of a wide variety of products and
services, as sophisticated telemarketers are able to market effectively and
collect valuable market and customer data. Moreover, businesses utilize call
center services for a range of other functions, including providing customer
support, generating customer leads, conducting direct sales activities, managing
customer retention programs and testing telemarketing program effectiveness.

Industries that have traditionally used teleservices for targeted
marketing include insurance, financial services, publishing and
telecommunications. As technology continues to improve the capabilities and
productivity of call center representatives, companies in these industries
are increasing their use of call centers and expanding the breadth of the
applications they employ. For example, in the financial services industry,
where telemarketing historically was used primarily for customer acquisition
in the credit card business, call center services are now being employed to
market a wide range of products and services, including consumer and business
loans and mutual funds. In addition, businesses in industries that have not
customarily utilized call center services are becoming significant users, as
illustrated by the increasing use of call centers by pharmaceutical and
health care services companies to perform direct marketing and database
management functions and by computer software and hardware companies for
marketing and customer support activities. Moreover, multinational companies
in a variety of industries, including computer hardware and software and
publishing, have begun to utilize call center services on a global basis.

23
<PAGE>
The teleservices market has changed from a largely unregulated environment
dominated by small, technologically unsophisticated companies to today's
increasingly regulated and global marketplace in which technological
sophistication is essential. At the same time, the use of telemarketing and
other call center services is expanding into new applications and industries,
and large corporations are increasingly seeking to partner with independent
teleservices specialists for the management and enhancement of the call
center aspects of their marketing, sales and customer service activities. The
Company believes these trends present attractive opportunities for large,
technologically sophisticated teleservices firms such as ICT that provide a
full range of call center services.

THE ICT APPROACH

ICT believes that it has distinguished itself in the call center services
industry by focusing on target industries and by providing its domestic and
international customers with comprehensive teleservices. With extensive
experience in telemarketing, as well as other fields such as marketing,
research and consulting, the Company's management team has emphasized call
center management experience, economies of scale, technological leadership
and expertise in target industries as a means of establishing ICT as a
consistent provider of cost-effective call center services. By focusing on a
limited number of target industries, the Company has developed significant
expertise marketing products and services for customers in those target
industries. ICT believes this approach positions it to secure call center
management relationships with businesses seeking to outsource the management
of existing or new call center operations. In addition, the Company continues
to introduce value-added services, such as industry-focused marketing,
research and consulting services, and to increase its international presence
in order to provide multilingual teleservices domestically and
internationally.

STRATEGY

With the increasing use of teleservices by businesses and the trend toward
outsourcing call center activities, ICT believes significant opportunities
exist to expand its business. The Company's growth strategy includes the
following key elements:

o Pursue Outsourced Call Center Management Opportunities. ICT believes the
current trend toward outsourcing call centers will continue, and it intends to
pursue additional opportunities to manage new or existing call center operations
on an outsourced basis, either independently or through joint bids with
strategic partners, such as staffing agencies. ICT has recently secured
two call center management contracts and is currently in contract negotiations
or discussions with other prospective clients regarding outsourced call center
management relationships.

o Increase International Presence. The Company plans to broaden its
geographic reach and further develop its expertise in telemarketing in
international markets by focusing on businesses with multinational
operations. ICT currently provides multilingual telemarketing services in the
United States, Europe, Latin America and Canada. ICT intends to expand its
operations in these areas and to explore additional international operations
in areas such as the Pacific Rim.

o Develop Strategic Alliances and Acquisitions. ICT intends to continue
pursuing strategic alliances with, and acquisitions of, domestic and
international businesses that provide complementary call center teleservices.
The Company initiated its international expansion in 1994 through the
acquisition of the business of Spantel, which provides services to
Spanish-speaking markets in the United States and Latin America, and the
establishment of Eurotel to provide multilingual teleservices to pan-European
markets. In May 1995, the Company acquired the business comprising its
Smartline division, which provides telebanking services. These three
operations represented approximately $7 million, or 14%, of ICT's revenues in
1995.

o Expand Value-Added Marketing Services. The Company will continue to
complement its core telemarketing expertise with additional value-added
services, such as marketing, research and consulting services, with the goal
of providing comprehensive teleservices to businesses in its targeted
industries. For example, through its Smartline division, ICT offers
telebanking services to its financial services clients, allowing them to
establish "virtual" branch operations with minimal infrastructure investment.

24
<PAGE>
o Maintain Industry Specialization. The Company believes it has gained a
significant competitive advantage by concentrating on servicing businesses in
a limited number of select industries and intends to maintain its industry
specialization. In addition, the Company believes that industry
specialization will enable it to attract new clients because of its valuable
industry expertise and reputation for delivering high-quality service.

o Maintain Technology Leadership. The Company intends to continue making
substantial investments in technology to maintain its technological
leadership within the teleservices industry. ICT has been an industry leader
in the implementation of innovative teleservices technologies to lower its
effective cost per call and to improve its sales and customer service. The
Company has made significant investments in information and communications
technologies and believes it was the first fully automated teleservices
company and the first to implement predictive dialing equipment that it
believes is now recognized industry-wide to be essential in handling consumer
outbound telemarketing.

o Continue Commitment to Quality Service. ICT has consistently emphasized
quality service and extensive employee training by investing in quality
assurance personnel and procedures. The Company's commitment to providing
quality service will continue, as illustrated by its strategy to achieve
compliance with ISO 9002, a quality standard that the Company plans to
implement both domestically and internationally.

ICT'S SERVICES

ICT delivers its telemarketing services through seven separate business
units, each of which provides a particular type of service with the support
of the Company-wide marketing, sales and corporate units. ICT's domestic
sales force is organized into a series of industry sectors focused on selling
the full range of the Company's services to clients in their respective
target industries. ICT believes this organizational structure allows the
Company to provide comprehensive solutions to its clients' teleservices
needs, since it enables ICT's sales and customer service personnel to develop
in-depth knowledge of the needs of businesses in their designated industries.

ICT's suite of services presently includes traditional telemarketing
services, consisting of consumer outbound telemarketing, consumer inbound
telemarketing and business-to-business telemarketing, as well as value-added
services, consisting of marketing, research and consulting services. In
addition, ICT has organized a separate division specifically to pursue
opportunities to manage third parties' call centers on an outsourced basis,
and the Company offers domestic and international multilingual telemarketing
services that provide sales and service support to non-English speaking
markets in the United States, Europe, Latin America and Canada.

TeleServices

Traditional telemarketing services are offered through the Company's
TeleServices division, which is comprised of the following units:

Consumer Outbound Telemarketing--ICT TeleDirect. ICT TeleDirect provides
consumer outbound telemarketing services, which consists primarily of direct
sales activities initiated by the Company on behalf of clients in its target
industries. ICT's call transaction management system ("CTMS") receives data
for target customers electronically from ICT's clients. The data is retained
in the Company's database management systems and is then distributed for
calling by the Company's predictive dialing systems, which schedule and
launch outbound calls. Once a live connection is established, the system
transfers the call, along with the customer data and scripting information,
to the workstation of a service representative trained for that specific
client's program. The primary industries served by ICT TeleDirect are
insurance, financial services, publishing and telecommunications. As of April
30, 1996, ICT TeleDirect utilized 920 work stations in 16 call centers
located primarily in the eastern United States.

25
<PAGE>
Consumer Inbound Telemarketing--ICT TeleResponse. The Company provides
inbound teleservices support for activities such as catalog sales, customer
inquiry support, credit card and loan application processing and customer
service through ICT TeleResponse. ICT TeleResponse was formed by combining
the consumer inbound operations of ICT with those of American Tele/Response,
Inc., which ICT acquired in April 1994. Inbound telemarketing involves the
processing of incoming calls, often placed by customers using toll- free
numbers, to a customer service representative for service, order fulfillment
or information. The Company's automated system receives an inbound call and
directs it, together with scripting, pricing data, reference databases and
any other relevant information, to an available service representative's
workstation. The information recorded during the call can be sent
electronically to ICT's clients for order processing, service fulfillment or
database management. As of April 30, 1996, ICT TeleResponse utilized 160 work
stations, serving primarily the catalog, consumer goods and services,
financial services and publishing industries. Data and voice lines link ICT
TeleResponse's dedicated call center in Drexel Hill, Pennsylvania to ICT call
centers in Langhorne, Pennsylvania and Miami, Florida for backup support.

Business-to-Business Teleservices--ICT TeleProfessional. ICT
TeleProfessional was formed in 1995 to service the emerging and increasingly
complex needs of certain clients by targeting telephone-based sales, service
and support opportunities within the professional and business-to-business
environment. ICT TeleProfessional consists of a dedicated call center
equipped with advanced computer and telecommunications software and hardware
to service both outbound and inbound client applications. Work stations have
been designed to accommodate the needs of experienced service representatives
who are trained to meet the sophisticated product and customer profiles of
specific clients, which vary from software programs to health care products
and from design technicians to medical professionals. Most projects to date
have been in the publishing, pharmaceutical, health care services and
computer software and hardware industries, although applications cut across
many industry sectors. As of April 30, 1996, ICT TeleProfessional utilized 96
outbound and inbound workstations at its dedicated call center in Langhorne,
Pennsylvania.

International TeleServices

The Company offers domestic and international multilingual telemarketing
services through ICT TeleServices International, which currently consists of
Eurotel, Spantel and ICT Canada. These business units are designed to offer
outbound and inbound services, call center management services, marketing,
research and other value-added services to clients. The growth of
multinational corporations and the increase in non- English speaking
residents in the United States has increased the demand for the multilingual
capabilities that ICT provides. ICT TeleServices International will continue
to expand its operations and explore acquisition opportunities to increase
the Company's international presence. The division currently consists of the
following units:

Eurotel. This joint venture between ICT and Donnelley, a leading supplier
of integrated order fulfillment services, commenced operations in October
1994 and provides telephone marketing and information services in Europe.
Located in Dublin, Ireland, Eurotel's call center had 80 workstations, as of
April 30, 1996, that provide pan-European multilingual services. The Company
has recently reached an agreement with Donnelley for the purchase of
Donnelley's 40% ownership interest in Eurotel, for a purchase price equal to
40% of Eurotel's net book value as of June 30, 1996. The purchase price is
not expected to be material to the Company's business, financial condition or
liquidity.

Spantel. ICT acquired the business of Spantel in February 1994 to provide
services to the rapidly growing marketplace of Spanish-speaking American and
Latin American consumers and businesses. As of April 30, 1996, Spantel's
Miami, Florida call center utilized 64 workstations.

ICT Canada. The Company opened its first Canadian call center in January
1996 with service representatives who are fluent in French and English. As of
April 30, 1996, the ICT Canada call center, located in Saint John, New
Brunswick, Canada, utilized 80 workstations.

26
<PAGE>
Value-Added Marketing, Research and Consulting Services

ICT provides businesses in its target industries with marketing, research
and consulting services thus leveraging its traditional telemarketing
services and enabling it to offer comprehensive solutions for its clients'
teleservices needs. These services presently consist of the following:

ICT Marketing and Consulting Services. As part of its growth strategy, ICT
intends to continue to provide value-added marketing and consulting services to
businesses in its target industries. For example, the Company's acquisition of
Smartline, a telebanking services provider, in May 1995 allows ICT to leverage
traditional telemarketing capabilities and relationships into a more
comprehensive client engagement, in which ICT participates in the design,
management, review and implementation of marketing programs. Through Smartline,
the Company is a leading provider of telebanking services, with clients that
include many types of financial institutions. Smartline representives' sales and
service expertise spans a wide range of financial products, including home
equity loans and lines of credit, loans by phone, checking and deposit accounts,
credit and debit cards, mortgage loans, annuity and alternative investments and
small business loans. An example of the products offered by Smartline is its
Gold Marketing Package, which provides small to mid-sized banks with direct
response plans for key products, inbound call center support, customized
advertisements and direct mail packages, and action oriented follow-up
campaigns. Smartline also offers a wide range of market research programs
through Valley Forge Information Services ("VFIS"), which ICT acquired in 1988,
to help its clients retain and strengthen their current customer relationships
and to attract new customers.

Smartline's management team consists of professionals who have client-side
banking experience in branch management and operations, marketing,
advertising, research, electronic funds transfer, home and branchless banking,
customer service and systems support. Smartline's net revenues for the first
quarter of 1996 represented approximately one-third of the increase in the
Company's net revenues from the first quarter of 1995 to the first quarter of
1996. For 1995, Smartline accounted for 8.9% of the Company's net revenues. As
of April 30, 1996, Smartline utilized 152 automated outbound and inbound
workstations at its dedicated call center in Buffalo, New York.

ICT Research Services. Through VFIS, the Company provides businesses in
its target markets with value added market research survey design, data
collection and consulting services. ICT's Research Services division makes
extensive use of advanced technology, including integrated predictive dialing
and Computer Assisted Telephone Interviewing ("CATI"), to obtain market and
customer data cost effectively. ICT Research Services teams work closely with
the client during each phase of a research study, participating with the
client in the design of the questionnaire, the collection of the data and the
editing, coding and tabulation of the results. ICT's project direction teams
monitor the progress of studies and make recommendations to clients that are
designed to improve the usefulness and integrity of the data collected by the
Company. For 1995, VFIS accounted for 5.1% of the Company's net revenues. As
of April 30, 1996, ICT Research Services utilized 96 automated interviewing
stations in two call centers.

Call Center Management Services

ICT's Call Center Management Services ("CCMS") division was established in
the first quarter of 1996 to pursue outsourcing opportunities that exist for
call center management. To date, ICT has entered into two contracts to manage
call centers, and it is currently in discussions with other prospective
clients regarding additional call center, management opportunities. CCMS
offers services such as site and system equipment selection, facility launch,
program planning and implementation, staffing, technical support and ongoing
call center management. Depending on client needs, ICT will assume sole or
shared responsibility for the management of a call center's operations.
Through CCMS, ICT can either assume the management and operations of an
in-house call center facility, with any call overflow being rerouted to
existing ICT call centers, or move in-house operations to new or existing ICT
facilities. ICT has bid on opportunities to manage new and existing call
center operations on an outsourced basis, both independently as well as
jointly with staffing agencies that have relationships with large national
corporations. For example, the Company was recently awarded a contract with
Olsten Staffing Services, Inc., with which the Company submitted a joint bid,
to establish and manage a dedicated call center for a large multinational
company.

27
<PAGE>
TELESERVICES AND VALUE-ADDED CALL CENTERS

The following table lists the Company's call center facilities by
division, the number of workstations and the specialties served as of April
30, 1996:

-------------------- ------------------------- -------------- -----------------------------
Number of
Division Location Workstations Specialty
-------------------- ------------------------- -------------- -----------------------------
<S> <C> <C> <C>
Chesapeake, VA 80 Insurance/Financial
------------------------- -------------- ----------------------------
Kearneysville, WV 80 Insurance/Financial
------------------------- -------------- ----------------------------
Norfolk, VA 80 Insurance/Financial
------------------------- -------------- ----------------------------
Louisville, KY 80 Financial
------------------------- -------------- ----------------------------
Louisville, KY 72 Insurance
------------------------- -------------- ----------------------------
Allentown, PA 56 Telecommunications
------------------------- -------------- ----------------------------
Cincinnati, OH 56 Financial
------------------------- -------------- ----------------------------
Virginia Beach, VA 56 Insurance
------------------------- -------------- ----------------------------
ICT TeleDirect Cherry Hill, NJ 48 Financial/Telecommunications
------------------------- -------------- ----------------------------
Fort Lauderdale, FL 48 Insurance
------------------------- -------------- ----------------------------
Lexington, KY 48 Financial/Publishing
------------------------- -------------- ----------------------------
Philadelphia, PA 48 Insurance
------------------------- -------------- ----------------------------
Trevose, PA 48 Financial
------------------------- -------------- ----------------------------
Christiana, DE 40 Insurance
------------------------- -------------- ----------------------------
Newark, DE 40 Insurance
------------------------- -------------- ----------------------------
Parkersburg, WV 40 Insurance/Financial
-------------------- ------------------------- -------------- ----------------------------
ICT TeleResponse Drexel Hill, PA 160 Consumer Inbound
-------------------- ------------------------- -------------- ----------------------------
ICT TeleProfessional Langhorne, PA 96 Computer/Pharmaceutical
-------------------- ------------------------- -------------- ----------------------------
Saint John, New Brunswick, 80 Bilingual
Canada English/French
International ------------------------- -------------- ----------------------------
TeleServices Dublin, Ireland 80 Multilingual Pan-European
------------------------- -------------- ----------------------------
64 Bilingual
Miami, FL English/Spanish
-------------------- ------------------------- -------------- ----------------------------
ICT Research Services Bethlehem, PA 48 Market Research
------------------------- -------------- ----------------------------
Langhorne, PA 48 Market Research
-------------------- ------------------------- -------------- ----------------------------
Smartline Buffalo, NY 152 Telebanking
-------------------- ------------------------- -------------- ----------------------------
TOTAL 1,648
-------------------- ------------------------- -------------- ----------------------------
</TABLE>

28
<PAGE>
Target Industries

ICT's domestic sales force is assigned to specific industry sectors, which
enables its sales personnel to develop in-depth industry and product
knowledge. They are supported by sales specialists resident within ICT's
business units. Many of the industries that ICT serves are undergoing
deregulation and consolidation, which provides the Company with additional
growth opportunities as businesses search for low cost solutions for their
marketing, sales and customer support needs. In 1995, business within the
insurance and financial services industries accounted for a majority of the
Company's revenues. The industries targeted by the Company and the principal
services provided are described below.

Insurance

ICT works with large consumer insurance companies and their agents,
marketing and providing customer support services for products such as life,
accident, health and property and casualty insurance. The Company's insurance
group operates in six dedicated call centers and in 1995, the Company sold
approximately 1.2 million insurance policies on behalf of its clients. ICT
employs more than 270 agents collectively holding over 4,000 state insurance
licenses. The Company has a full-service agent licensing and continuing
education department, which enables its agents to obtain licenses in 46
states and to maintain their compliance with insurance regulations. Key
clients include MMIG, J.C. Penney Life Insurance Company, Providian and Union
Fidelity Life Insurance Company.

Financial Services

ICT provides banks and other financial services clients with a wide range
of services, including cardholder acquisition, active account generation,
account balance transfer, account retention and customer service. ICT has
dedicated three call centers to these activities within its ICT TeleDirect
operations and utilizes six additional call centers as necessary. With the
Smartline acquisition in 1995, ICT began offering "virtual" banking services,
such as marketing and servicing home equity loans, lines of credit,
loan-by-phone, checking and deposit account acquisition, credit and debit
cards, mortgage loans and other traditional banking products. Smartline
provides consulting and telebanking services to financial services clients
from its dedicated inbound/outbound call center in Buffalo, New York. Among
ICT's key financial services clients are Citibank, Advanta, MBNA and Summit
Bancorp.

Publishing

ICT provides services such as subscription sales, subscription renewals,
book club membership sales and customer service to clients in the publishing
industry. ICT's program management professionals with publishing experience
also develop custom programs for clients to aid in their marketing and sales
efforts. The publishing division clients are supported in ICT's TeleDirect,
TeleResponse and TeleProfessional call centers. ICT's primary publishing
clients include TV Guide, Bertelsmann Music Group and D & B Marketplace.

Telecommunications

ICT provides telemarketing programs for major telecommunications companies
for long distance, cellular and cable products and services, as well as
regional telecommunications companies marketing advanced telephone features.
Through ICT TeleResponse, the Company is able to offer a range of services,
including customer service, sales and survey campaigns. Within the
telecommunications industry, ICT presently provides services to MCI.

Consumer Products and Services

ICT services its catalog and other consumer products and services clients
through new customer acquisition, customer service and order entry
applications, supporting inbound calls 24 hours per day and 365 days per
year. ICT has established advanced call center capabilities to capture
customers' orders and to make sales to these customers. During critical
buying seasons, ICT provides clients with added capacity and a scalable work
force on a variable cost basis. The consumer products and services clients
are supported in ICT's TeleResponse center. Clients in this category include
The Franklin Mint, Blair Corporation and the United States Army.

29
<PAGE>
Pharmaceuticals and Health Care Services

Leveraging ICT's insurance market position into the managed care industry,
the Company, through its ICT TeleProfessional division, serves pharmaceutical
manufacturers, medical advertising agencies, hospitals and other health care
related suppliers, using telemarketing services for the sale and marketing of
products to both health care professionals (hospitals, physicians,
pharmacists and nurses) and health care consumers (patients and prospective
patients). The applications consist of business-to-business,
business-to-professional and business-to-consumer, utilizing inbound and
outbound services to sell products, to conduct market research, develop
marketing databases and provide customer service. Clients in this category,
in addition to SmithKline Beecham and several other multinational
pharmaceutical companies, include Greater Atlantic Health Service.

Computer Software and Hardware

ICT provides sophisticated marketing resources for both outbound and
inbound applications on behalf of clients in the computer software and
hardware industries. Outbound applications include new customer acquisition,
customer retention and lead generation. Inbound applications include customer
service, first-level customer technical support and the sale of personal
computer-related products. ICT's clients frequently integrate outbound and
inbound call campaigns, seeking to achieve favorable compounding results. Key
computer industry clients include Sun Microsystems, Alpha Software, ON
Technology and Decision Data.

TECHNOLOGY

ICT invests heavily in system and software technologies designed to
improve call center productivity, thereby lowering the effective cost per
call made or received, and to improve sales and customer service
effectiveness by providing its sales and service representatives with
real-time access to customer and product information. Since January 1993, the
Company has invested over $7.8 million in information and communications
systems and software enabling it to be an industry leader in state of the art
call center technology. ICT believes it was the first fully automated
teleservices company and the first to implement predictive dialing equipment,
which the Company believes is now deemed essential by the teleservices
industry in handling consumer outbound telemarketing. ICT realizes
significant cost savings through the use of innovative call handling
technology, automatic call distributors ("ACD") and advanced scripting
software, all of which optimize agent utilization. A predictive dialing system
is an integrated computer and telephone switch that is used to dial a
pre-programmed list of customers. The system will detect when a customer
answers the call and will immediately transfer the call and the appropriate
data to an available agent. An ACD is a phone switch that accepts an inbound
call from the public network and routes that call to the most advantageous,
available resource to handle the call. Scripting software is used in call
centers to provide the agent with the appropriate information to use during
the call and to specify the content and sequence of the information captured
from the customer.

The Company utilizes a scalable set of UNIX processors to support its
outbound and inbound call center operations. The term scalable in the computer
industry generally means that a system or product line is configured to work
cost-effectively at both low and high volume. The Company migrated to an
open systems environment to take advantage of the diversity of software and
hardware available for use with this technology. Dedicated UNIX processors are
used at each inbound call center while predictive dialing systems, networked
to UNIX processors at the Company's corporate data center, are used at each
outbound call center. The predictive dialing systems support local call and
data management: the UNIX processors provide centralized list management, data
consolidation, report generation and interfaces with client order processing
systems.

ICT's proprietary CTMS telemarketing software is used to prepare outbound
and inbound scripts, manage, update and reference client data files, collect
statistical transaction and performance data and assist in the preparation of
internal and client reports. Service agency clients have changing needs that
require a flexible operating system, such as CTMS, which is easily
customizable and has the ability to interface with a variety of proprietary
data bases and software systems. Current CTMS enhancement projects scheduled
for completion in 1996 will expand the range of platforms upon which it runs,
streamline the creation of client telephone marketing scripts and enable the
Company to integrate telemarketing systems obtained through acquisitions and
to interface with client systems.

30
<PAGE>
ICT has recently developed advanced call blending telephone marketing
software for use on its inbound ACD switches and UNIX-based processors and
plans to test similar software currently under commercial development. The
Company intends to take advantage of the benefits of call blending
technology, which provides dynamic call-by-call allocation of both outbound
and inbound calls within the same system and enables inbound agents to
achieve the higher productivity levels normally associated with outbound call
centers using predictive dialing systems. This technology is particularly
appropriate for direct marketing programs that require integration of
outbound and inbound call handling and real-time data base updates.

QUALITY ASSURANCE

ICT emphasizes quality service and extensive employee training as a way to
compete effectively and invests heavily in quality assurance personnel and
practices. ICT's quality assurance department is responsible for the development
and enforcement of call center policies and procedures, the selection and
training of telephone service representatives, the training and professional
development of call center management personnel, monitoring of calls and
verification and editing of all sales. Through the Company's quality assurance
department, both the Company and its clients are able to perform real time
on-site and remote call monitoring to maintain quality and efficiency. Sales
confirmations are recorded (with the customer's consent) in order to verify the
accuracy and authenticity of transactions. Additionally, ICT is able to provide
to its clients immediate updates on the progress of an ongoing telemarketing
effort. Access to this data allows ICT and its clients to identify potential
campaign shortfalls and to immediately modify or enhance a telemarketing effort.
The Company's commitment to providing quality service is further illustrated by
its current effort toward compliance with ISO 9002 standards, which are
administered by the International Organization for Standardization and represent
an international consensus on the essential features of a quality system to
ensure the effective operation of a business. In 1995, the Company's systems and
operations departments examined the ISO 9002 standards and evaluated the process
required for ISO 9002 registration. The systems and operations departments are
currently in the process of reviewing and documenting the quality procedures
required for ISO 9002 certification. Upon completion of this initial process,
the Company intends to complete the manuals required for certification. The
Company plans to implement the ISO 9002 standards both domestically and
internationally.

PERSONNEL AND TRAINING

Management believes that a key driver of ICT's success is the quality of
its employees. The Company tailors its recruiting and training techniques
toward the industries it serves. All service representatives receive a
detailed review of each program in which they are to participate along with
training regarding the background, structure and philosophy of the client
that is sponsoring the program.

As is typical in the telemarketing industry, over 90% of the Company's
service representatives are part- time employees. As of March 31, 1996, ICT
employed 2,925 persons, of which more than 2,600 were service
representatives. None of ICT's employees is represented by a labor union. The
Company considers its relations with its employees to be good.

CLIENTS

The Company generally operates under month-to-month contractual
relationships with its clients. The pricing component of a contract often
comprises an initial fee, a base service charge and separate charges for
ancillary services. Service charges are usually based upon an hourly rate for
outbound calls and per-minute rates for inbound calls. On occasion, the
Company performs services for which it is paid commissions based on completed
sales under contracts terminable by the Company with 30 or fewer days notice.

ICT targets those companies which it believes have the greatest potential
to generate recurring revenues based on their ongoing direct sales and
customer service needs. Many of ICT's current clients have sizable in-house
telemarketing operations, and the Company often competes against those
in-house operations for the client's business. At March 31, 1996, ICT
provided direct sales and customer service to approximately 160 clients. The
Company's largest client in recent years has been MMIG, which accounted for
approximately 43% of the Company's net revenues in 1995. No other client
accounted for more than 5% of the Company's net revenues in 1995.

31
<PAGE>
COMPETITION

The telemarketing industry is intensely competitive and the Company's
principal competition in its primary markets comes from large telemarketing
service organizations, including MATRIXX Marketing Inc., SITEL Corporation, ITI
Marketing Services, Inc., APAC TeleServices, Inc. and West Telemarketing
Corporation. The Company competes with numerous independent telemarketing firms,
many of which are as large as or larger than ICT, as well as the in-house
telemarketing operations of many of its clients or potential clients. In
addition, most businesses that are significant consumers of telemarketing
services utilize more than one telemarketing firm at a time and reallocate work
among various firms from time to time. A significant amount of such work is
contracted on an individual project basis, with the effect that the Company and
other firms seeking such business are required to compete with each other
frequently as individual projects are initiated. Furthermore, the Company
believes there is a trend among businesses with telemarketing operations toward
outsourcing the management of those operations to others and that this trend may
attract new competitors, including competitors that are substantially larger and
better capitalized than ICT, into the Company's market.

GOVERNMENT REGULATION

Telemarketing sales practices are regulated at both the federal and state
level. The Federal Telephone Consumer Protection Act of 1991 (the "TCPA"),
enforced by the Federal Communications Commission, imposes restrictions on
unsolicited automated telephone calls to residential telephone subscribers.
Under the TCPA, it is unlawful to initiate telephone solicitations to
residential telephone subscribers before 8:00 a.m or after 9:00 p.m., local
time at the subscriber's location, or to use automated telephone dialing
systems or artificial or prerecorded voices to call certain subscribers.
Additionally, the TCPA requires telemarketing firms to develop a written
policy implementing a "do not call" list, including the training of its
telemarketing personnel to comply with these restrictions. The TCPA creates a
right of action for both consumers and state attorneys general. A court may
award damages or impose penalties of $500 per violation, which may be trebled
for willful or knowing violations. Currently, the Company trains its service
representatives to comply with the regulations of the TCPA and programs its
call management system to avoid initiating telephone calls during restricted
hours or to individuals maintained on the Company's "do not call" list.

The Federal Trade Commission (the "FTC") regulates both general sales
practices and telemarketing specifically. Under the Federal Trade Commission
Act (the "FTC Act"), the FTC has broad authority to prohibit a variety of
advertising or marketing practices that may constitute "unfair or deceptive
acts and practices." Pursuant to its general enforcement powers, the FTC can
obtain a variety of types of equitable relief, including injunctions, refunds,
disgorgement, the posting of bonds, and bars from continuing to do business
for a violation of the acts and regulations it enforces.

The FTC also administers the Federal Telemarketing and Consumer Fraud and
Abuse Prevention Act of 1994 (the "TCFAPA"). Under the TCFAPA, the FTC has
issued regulations prohibiting a variety of deceptive, unfair or abusive
practices in telemarketing sales. Generally, these rules prohibit
misrepresentations of the cost, quantity, terms, restrictions, performance or
characteristics of products or services offered by telephone solicitation or
of refund, cancellation or exchange policies. The regulations also regulate
the use of prize promotions in telemarketing to prevent deception and require
that a telemarketer identify promptly and clearly the seller on whose behalf
the telemarketer is calling, the purpose of the call, the nature of the goods
or services offered and, if applicable, that no purchase or payment is
necessary to win a prize. The regulations also require that telemarketers
maintain records on various aspects of their business. The Company believes
that it is in compliance with the TCPA and the regulations promulgated
pursuant to the TCFAPA.

Most states have enacted statutes similar to the FTC Act prohibiting unfair
or deceptive acts and practices. For example, telephone sales in certain
states are not final until a written contract is delivered to and signed by
the buyer, and such a contract often may be cancelled within three business
days. At least one state also prohibits telemarketers from requiring credit
card payment, and several other states require certain telemarketers to obtain
licenses, post bonds or submit sales scripts to the state's attorney general.
Under these general enabling statutes, depending on the willfulness and
severity of the violation, penalties can include imprisonment, fines and a
range of equitable remedies such as consumer redress or the posting of bonds

32
<PAGE>
before continuing in business. Additionally, some states have enacted laws and
others are considering enacting laws targeted directly at telemarketing
practices. Most of these statutes allow a private
right of action for the recovery of damages or provide for enforcement by state
agencies permitting the recovery of significant civil or criminal penalties,
costs and attorneys' fees. There can be no assurance that any such laws, if
enacted, will not adversely affect or limit the Company's current or future
operations.

The industries served by the Company's divisions are also subject to
government regulation, and, from time to time, bills are introduced in
Congress which, if enacted, would regulate the use of credit information. The
Company generally requires its clients to indemnify ICT against claims and
expenses arising with respect to the Company's services performed on its
clients' behalf, and the Company has never been held responsible for
regulatory noncompliance by a client. ICT and its employees who sell insurance
products are required to be licensed by various state insurance commissions
for the particular type of insurance product to be sold and to participate in
regular continuing education programs, which currently are provided by the
Company.

FACILITIES

The Company's corporate headquarters are located in Langhorne,
Pennsylvania in leased facilities consisting of approximately 29,500 square
feet of office space rented under leases that expire in December 2000. The
Company leases all of the facilities used in its call center operations, as
well as office space in Chicago, Illinois, Boston, Massachusetts and London,
England for its sales offices. With the exception of the facilities
located in Philadelphia, Pennsylvania and Kearneysville, West Virginia, which
are leased on a month-to-month basis, the leases for the Company's facilities
expire generally between May 1996 and March 2001 and typically contain
renewal options. The Company believes that its existing facilities are
suitable and adequate for its current operations, but additional facilities
will be required to support growth. The Company believes that suitable
additional or alternative space will be available as needed on commercially
reasonable terms.

LITIGATION

From time to time, the Company is involved in litigation incidental to its
business. In the opinion of management, no litigation to which the Company is
currently a party is likely to have a material adverse effect on the
Company's results of operations, financial condition or liquidity, if decided
adversely to the Company.

<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

As of May 1, 1996, the directors, nominee for director and executive
officers of the Company were:

<TABLE>
<CAPTION>
Name Age Position
------------------ ----- --------------------------------------------------------
<S> <C> <C>
John J. Brennan . 52 Chairman, President, Chief Executive Officer and Director
Donald P. Brennan 55 Vice Chairman and Director
Bernard Somers . 47 Nominee for Director
John L. Magee .. 42 Executive Vice President, Operations and President of ICT
TeleServices
John D. Campbell . 40 Senior Vice President, Sales and Marketing and President
of ICT Direct
Maurice J. Kerins 42 Senior Vice President, Systems and Technology
Robert F. Small . 44 Senior Vice President, Corporate Planning and Development
Carl E. Smith .. 48 Senior Vice President, Finance and Administration,
Chief Financial Officer, and Secretary

</TABLE>

John J. Brennan has served as the Company's Chairman, President and Chief
Executive Officer and as a director since April 1987 when he managed the
buyout of ICT's predecessor company, International Computerized
Telemarketing, Inc., from Decision Industries Corporation ("DIC"). Mr.
Brennan was employed by DIC from May 1983 to March 1987 and over that period
served as Vice President of Product Marketing, Vice President of Corporate
Planning and Business Development and President of its subsidiary,
International Computerized Telemarketing.

Donald P. Brennan has served as a Vice Chairman and director of the
Company since April 1987. He has been an Advisory Director of Morgan Stanley
& Co. Incorporated since February 1996. Prior to that time, Mr. Brennan was a
Managing Director and Head of the Merchant Banking Division of Morgan Stanley
& Co. Incorporated since 1986, and also has served as Chairman of Morgan
Stanley Capital Partners III, Inc., Chairman of Morgan Stanley Leveraged
Equity Fund II, Inc., Chairman of Morgan Stanley Venture Partners and a
director of Morgan Stanley & Co. Incorporated. Mr. Brennan currently serves
as a director of Fort Howard Corporation, Jefferson Smurfit Corporation and
SITA Telecommunications, N.V.

Bernard Somers has been nominated to become a member of the Company's
Board of Directors and will become a director upon the completion of this
offering. Since 1988, Mr. Somers has been a partner of Somers & Associates,
Chartered Accountants, located in Dublin, Ireland. Mr. Somers currently
serves as a director of Eurotel Marketing Limited, a subsidiary of the
Company, and Commerzbank Europe (Ireland) Ltd.

John L. Magee has served as the Company's Executive Vice President,
Operations since January 1994 and has been the President of ICT TeleServices
since January 1996. From November 1987 to January 1994, he served as Senior
Vice President, Operations of the Company.

John D. Campbell has served as President of ICT Direct since January 1994
and as Senior Vice President, Sales and Marketing since January 1990. ICT
Direct is a sales and marketing division of the Company that supports all ICT
TeleServices operations with respect to the insurance, financial services and
pharmaceutical and health care services industries.

Maurice J. Kerins has served as the Company's Senior Vice President,
Systems and Technology since April 1991 and as the Company's Vice President,
Systems and Technology from November 1988 to April 1994.

Robert F. Small has served as the Company's Senior Vice President,
Corporate Planning and Business Development since April 1995. From January
1993 to April 1995, he served as the Company's Vice President, Client
Services, and from January 1987 to January 1993, he served as the Company's
Vice President, Finance.

34
<PAGE>
Carl E. Smith joined the Company as Senior Vice President, Finance and
Administration and Chief Financial Officer in October 1994 and was elected
Secretary of the Company in 1995. From April 1992 to October 1994, he was
employed by DNA Plant Technology Corporation, an agricultural biotechnology
company, where he served as Vice President of Finance. From April 1990 to
April 1992, Mr. Smith was employed by Envirosafe Service, Inc., a hazardous
waste management company, where he served as Vice President of Finance and
Chief Financial Officer.

John J. Brennan and Donald P. Brennan are brothers.

DIRECTORS; COMMITTEES

The Board of Directors is divided into three classes. Each class holds
office until the third annual meeting for the election of directors following
the election of such class, except that the initial terms of the Class I,
Class II and Class III directors expire in 1997, 1998 and 1999, respectively.
John J. Brennan is a Class I director, Bernard Somers will be a Class II
director, and Donald P. Brennan is a Class III director. Although the
Company's Board of Directors intends to appoint an additional independent
director within 90 days after the completion of this offering, the Company
does not currently have a candidate to fill the position.

The Board of Directors intends to establish a Compensation Committee and
an Audit Committee. The Compensation Committee will determine salaries and
bonuses and other compensation matters for officers of the Company, determine
employee health and benefit plans, and administer the Company's stock option
plans. The Audit Committee will recommend the appointment of the Company's
independent public accountants and will review the scope and results of
audits, internal accounting controls and tax and other accounting related
matters.

Officers of the Company are elected by the Board of Directors and serve at
the discretion of the Board.

COMPENSATION OF DIRECTORS

Following the completion of this offering, the independent directors will
be paid directors' fees of $2,000 for each quarterly Board meeting attended
and $500 for each special Board meeting attended and each committee meeting
attended. In addition, directors will be reimbursed for expenses incurred in
connection with attendance at Board and committee meetings.

Under the Company's 1996 Non-Employee Directors Plan, each independent
director owning less than 10% of the outstanding capital stock of the Company
will, upon initial election to the Board, receive an option to purchase 1,000
shares of Common Stock. The options will be fully vested and immediately
exercisable, will have an exercise price equal to the fair market value of
the Common Stock on the date of grant and will expire ten years after the
date of grant. Mr. Somers, nominee for director, will receive a fully vested
option to purchase 1,000 shares of Common Stock upon the completion of this
offering. In addition, each independent director owning less than 10% of the
outstanding capital stock of the Company will be granted an option to
purchase 1,000 shares of Common Stock on the date of each annual meeting;
these options will vest in full one year after grant, will have an exercise
price equal to the fair market value of the Common Stock on the date of grant
and will expire ten years after issuance. See "Management-- Employee Benefit
Plans."

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During its current and last completed fiscal years, the Company did not
have a Compensation Committee of the Board of Directors. The compensation of
the Company's executive officers for these periods was determined by John J.
Brennan in consultation with the Board of Directors. See "Certain
Transactions" for a description of certain transactions involving John J.
Brennan and the Company. The Board of Directors intends to establish a
Compensation Committee in the near future. The Committee will approve officer
compensation matters, determine employee health and benefit plans, and
administer the Company's stock option plans.

35
<PAGE>
EXECUTIVE COMPENSATION

Summary Compensation Table. The following table sets forth individual
compensation paid to the Chief Executive Officer and the four most highly
compensated executive officers of the Company (the "Named Executive
Officers") for all services rendered in all capacities to the Company during
1995:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation Awards
------------------------ ----------------------
Securities Underlying All Other
Name and Principal Position Salary Bonus Options/SARs(#) Compensation(1)
--------------------------------- ---------- ---------- ---------------------- ---------------
<S> <C> <C> <C> <C>
John J. Brennan ................. $307,000 $216,214 -- $20,402
Chairman, President and Chief
Executive Officer
John L. Magee ................... $129,904 $ 62,191 -- $ 5,365
Executive Vice President,
Operations and President of ICT
TeleServices
John D. Campbell ................ $127,817 $113,097 22,500 $ 5,388
Senior Vice President, Sales and
Marketing and President of ICT
Direct
Maurice J. Kerins ............... $109,807 $ 61,300 22,500 $ 4,370
Senior Vice President, Systems and
Technology
Carl E. Smith ................... $100,000 $ 25,276 22,500 $ 452
Senior Vice President, Finance and
Administration, Chief Financial
Officer, and Secretary
</TABLE>

- ------
(1) Includes: (i) Company contributions of $4,620, $4,562, $4,620, and $4,064
to the Company's 401(k) tax-qualified employee savings and retirement
plan on behalf of Mr. Brennan, Mr. Magee, Mr. Campbell and Mr. Kerins,
respectively; (ii) premiums paid by the Company in the amount of $1,152,
$388, $343, $306, and $452 for group term life insurance on behalf of Mr.
Brennan, Mr. Magee, Mr. Campbell, Mr. Kerins and Mr. Smith, respectively;
and (iii) premiums paid by the Company in the amount of $14,630, $415 and
$425 for life insurance on behalf of Mr. Brennan, Mr. Magee and Mr.
Campbell, respectively.

36
<PAGE>
Option Grants. The following table sets forth certain information
regarding stock options granted during the year ended December 31, 1995 to
each of the Named Executive Officers.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
Individual Grants
---------------------------------------------------------------
Potential Realizable
Value
at Assumed Annual
Number of Percent of Rates of Stock Price
Securities Total Options Appreciation for
Underlying Granted to Option Term(3)
Options Employees in Exercise Price Expiration ----------------------
Name Granted (#)(1) Fiscal Year Per Share(2) Date(1) 5% 10%
- ----------------- -------------- --------------- -------------- ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C>
John J. Brennan . -- -- -- -- -- --
John L. Magee ... -- -- -- -- -- --
John D. Campbell . 22,500 15.4% $ 1.02 12/31/04 $14,417 $36,537
Maurice J. Kerins . 22,500 15.4% $ 1.02 12/31/04 $14,417 $36,537
Carl E. Smith ... 22,500 15.4% $ 1.02 12/31/04 $14,417 $36,537

</TABLE>

- ------

(1) These options were granted under the Company's 1987 Stock Option Plan and
have a term of ten years, subject to earlier termination in certain
events related to the termination of employment or a change in control.
The options vest in five equal annual installments commencing on the date
of grant; provided, however, that the options became fully vested upon the
initial public offering.

(2) Represents the fair market value of the underlying Common Stock as
determined by the Board of Directors on the date of grant.

(3) The potential realizable value is calculated based on the term of the option
at the time of grant. Pursuant to rules promulgated by the Securities and
Exchange Commission, stock price appreciation of 5% and 10% is based on the
exercise price per share on the date of grant, which calculated assumed
prices are less than the initial public offering price, and assumes that the
option is exercised at the exercise price and sold on the last day of its
term at the appreciated price. This table does not take into account any
appreciation in the fair market value of the Common Stock from the date of
grant to the date of this Prospectus. There can be no assurance that the
actual stock price appreciation over the ten-year option term will be at the
assumed 5% and 10% levels or at any other determined level.

In January 1996, the Company granted options to purchase approximately 49,500
shares of Common Stock to certain employees of the Company, including options to
purchase 22,500 shares of Common Stock to Carl E. Smith. These options were
granted under the Company's 1987 Stock Option Plan, have an exercise price of
$1.57 per share, have a term of ten years from the date of the grant and are
subject to earlier termination in certain events related to the termination of
employment. The options vest in five equal annual installments commencing on the
date of grant. In connection with the options granted in January 1996, the
Company recorded $268,675 of deferred compensation for the difference between
the deemed value per share for accounting purposes of $7.00 and the exercise
price per share. The difference in the January 1996 deemed value of $7.00 per
share and the initial public offering price of $16.00 per share is due,
in part, to the improved profitability for the quarter ended March 31, 1996 and
the two call center management contracts entered into in May 1996.

Year-End Values. The following table sets forth certain information
regarding options held as of December 31, 1995 by each of the Named Executive
Officers. None of the Named Executive Officers exercised options during the
year ended December 31, 1995.

<PAGE>

FISCAL YEAR-END OPTION VALUES

Number of
Securities Underlying Value of Unexercised
Unexercised Options In-The-Money Options
at Fiscal Year-End (#) at Fiscal Year-End($)(1)
-------------------------------- --------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
------------------ ------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C>
John J. Brennan .. -- -- -- --
John L. Magee .... 360,000 -- $5,744,000 --
John D. Campbell . 139,500 18,000 2,221,275 $269,660
Maurice J. Kerins . 139,500 18,000 2,221,415 269,660
Carl E. Smith .... 4,500 18,000 67,415 269,660

</TABLE>

- ------
(1) There was no public trading market for the Common Stock as of December
31, 1995. Accordingly, these values have been calculated on the basis of
the initial public offering price of $16.00 per share minus the applicable
per-share exercise price.

<PAGE>

Replacement Options. In May 1996, the Company granted non-qualified
options ("Replacement Options") to purchase an aggregate of 555,750 shares of
the Company's Common Stock to those employees of the Company who held options
to purchase stock of the Company that had been granted in 1987 and 1988 (the
"Terminated Options") in replacement of such Terminated Options. Replacement
Options have a per- share exercise price of $.04, in the case of options to
purchase an aggregate of 546,750 shares, and $.06, in the case of options to
purchase an aggregate of 9,000 shares, and expire five years from the
completion of this offering but remain in effect despite termination of
employment of an optionee (including upon death). Shares received upon the
exercise of Replacement Options become eligible to be sold in five equal
installments beginning on the first anniversary of the completion of this
offering. Succeeding installments become eligible for sale on the second,
third, fourth and fifth anniversaries. In the event of the dissolution,
liquidation or merger or consolidation of the Company with another
corporation where the Company is not the surviving corporation, the
restrictions on the transfer of Replacement Options will automatically lapse.

EMPLOYMENT AGREEMENTS

In May 1996, the Company entered into an employment agreement with John J.
Brennan as President and Chief Executive Officer. The agreement is for a
three-year term ending April 30, 1999 and renews automatically for successive
three-year periods unless either party gives written notice of termination at
least 180 days prior to the expiration date, unless earlier terminated as
provided therein. The agreement provides for a base salary of $364,000, which
shall be increased by a minimum of 5% each year but may not be decreased
below the then current level. The Board, in its sole discretion, may award
incentive bonuses in the form of cash and/or stock to Mr. Brennan, who will
be eligible each year for a minimum bonus in an amount equal to his then
current salary. If Mr. Brennan is terminated by the Company for other than
willful misconduct, or terminates his employment for "good reason," then the
Company shall maintain its obligations under the agreement through the later
of (i) the expiration of the then current term of the agreement (or the
expiration of the next renewal term if there are less than 180 days remaining
in the current term and no notice of termination was given prior thereto), or
(ii) 24 months from the date of termination. Mr. Brennan may terminate his
agreement for "good reason" upon 30 days' written notice if there has been a
reduction in his salary or benefits, a substantial change in his duties or a
change of control, defined as the decrease below 50% of the combined voting
power of the Company's common stock by John J. Brennan and Donald P. Brennan
and their children and grandchildren.

In April 1987, the Company entered into employment agreements with John L.
Magee, Maurice J. Kerins and Robert F. Small that provided for base salaries
of $70,000, $55,000 and $45,000 per year, respectively. Each employment
agreement provides that the employee's salary is to be reviewed annually by
the Board of Directors. Messrs. Magee's, Kerins's and Small's current base
salaries are $150,000, $115,000, and $95,000, respectively. Each employment
agreement has an initial term of three years, but renews automatically each
year for an additional one-year term unless either party to the agreement
terminates prior to the end of the renewal term. Each of the agreements
renewed automatically on April 1, 1996 for additional one- year terms. In
addition to base salary, each agreement allows for discretionary bonuses to
be paid by the Company. The Company may terminate the employment agreements
described immediately above at any time, with or without cause. Each of the
employment agreements contains severance provisions which, if triggered,
entitle the employees to monthly severance payments in an amount equal to the
affected employee's then-current monthly salary for a period of 12 months.
The severance payments are triggered by the occurrence of any of the
following events: termination of employment by the Company without cause,
cessation of business operations in a business in which the employee is
employed, a merger, consolidation or acquisition of the Company, the filing
by the Company of a voluntary petition in bankruptcy or the filing of an
involuntary petition in bankruptcy against the Company which is not dismissed
within 60 days. In addition, if the employee terminates his employment upon
90 days prior written notice, in certain circumstances, the Company would be
required to continue to provide the employee with his regular payments of
base salary for a period of 90 days.

In October 1987, John D. Campbell entered into an employment agreement
with the Company that provided for a base salary of $43,200 per year. Mr.
Campbell's employment agreement has an initial term of one year, but renews
automatically each year for an additional one-year term unless either party
terminates prior to the end of the renewal term. Mr. Campbell's employment
agreement renewed automatically on
38
<PAGE>

October 1, 1995 for an additional one-year term. Mr. Campbell, whose current
base salary is $130,000, is eligible for discretionary bonuses from the
Company.

In October 1994, the Company entered into an employment agreement with
Carl E. Smith that provided for a base salary of $100,000 per year. Mr.
Smith's employment agreement had a term of one year. Pursuant to an amendment
entered into by the Company and Mr. Smith as of October 1995, his employment
agreement was extended for an additional one-year period and will renew
automatically for consecutive one-year periods unless terminated within 90
days prior to the expiration of the then-current term. In addition to his
base salary, which is currently $105,000, Mr. Smith is eligible for
discretionary bonuses from the Company.

The employment agreements discussed above contain non-tampering,
non-disclosure, non-solicitation and confidentiality provisions. Although the
employment contracts restrict the employee from interfering with the
Company's current, former or potential customers, there is no provision
restricting a terminated employee's ability to work for a competitor of the
Company.

Bernard Somers, a nominee for director, has served as a director of the
Company's subsidiary, Eurotel, since September 1994. In connection with his
service to Eurotel, Mr. Somers receives IRpounds sterling 1,000, or
approximately $1,600, per meeting as compensation.

EMPLOYEE BENEFIT PLANS

401(K) PLAN

The Company maintains a 401(k) retirement savings plan (the "401(k)
Plan"). All employees of the Company are eligible to participate in the
401(k) Plan. Employees may contribute from 1% to 15% of their pre- tax gross
compensation (up to a statutorily prescribed annual limit of $9,240 in 1995)
to the 401(k) Plan. The percentage elected by certain highly compensated
participants may be required to be lower. The Company matches employee
contributions in an amount equal to 50% of the employee's pretax contribution
but subject to a maximum of 6% of the employee's eligible compensation
contributed to the 401(k) Plan. All amounts contributed by employee
participants and earnings on these contributions are fully vested at all
times. Employee participants may elect to invest their contributions in
various established funds, which include fixed income, growth and equity
funds.

1987 STOCK OPTION PLAN

The ICT Group, Inc. 1987 Stock Option Plan (the "1987 Plan") was adopted by
the Board and approved by the shareholders in April 1987. The 1987 Plan
provides for grants of options to acquire shares of the Company's common stock
("Stock Options"). No additional Stock Options will be granted under the 1987
Plan after the completion of this offering.

General. Subject to adjustment in certain circumstances as discussed
below, the 1987 Plan authorizes up to 1,800,000 shares of Common Stock for
issuance pursuant to the terms of the 1987 Plan. If and to the extent a Stock
Option under the 1987 Plan expires, lapses or is terminated for any reason,
the unexercised portion of such Stock Option may again be the subject of a
Stock Option granted pursuant to the 1987 Plan.

Administration of the 1987 Plan. The 1987 Plan is administered and
interpreted by the Board of Directors; however, the Board may designate a
committee of the Board to administer the 1987 Plan. The Committee or the
Board in its administrative capacity with respect to the 1987 Plan is
hereinafter referred to as the "Committee".

Grants. Grants under the 1987 Plan may consist of (i) Stock Options
intended to qualify as incentive stock options ("ISOs") within the meaning of
section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
and (ii) nonqualified stock options that are not intended to so qualify
("NQSOs"). No additional grants will be made after the completion of this
offering.

39
<PAGE>
Eligibility for Participation. Employees (including directors of the
Company or the Company's parent or subsidiary within the meaning of section
424(e) or (f) of the Code ("Affiliate") and non-employee members of the Board
of the Company and any Affiliate ("Non-Employee Directors") may receive
grants of Stock Options ("Optionees"); provided, however, that ISOs may only
be granted to employees. As of March 31, 1996, ten employees held Stock
Options under the 1987 Plan and no Non-Employee Directors held any NQSOs. As
of May 8, 1996, Stock Options for the purchase of 960,750 shares of Common
Stock (872,302 shares after the completion of this offering) were outstanding
under the 1987 Plan, including the Replacement Options.

Terms and Conditions of Stock Options. The exercise price of any ISO
granted under the 1987 Plan must be at least 100% of the fair market value of
the underlying shares of Common Stock on the date of grant; provided,
however, that if an ISO is granted to an Optionee who then owns, directly or
by attribution under Section 424(d) of the Code, shares posessing more than
ten percent of the total combined voting power of all classes of stock of the
Company or an Affiliate, then the exercise price must be at least 110% of the
fair market value of the underlying shares of Common Stock on the date the
Stock Option is granted. The option price of an NQSO is determined by the
Committee in its sole discretion and may be greater than, equal to or less
than the fair market value of the underlying shares of Common Stock on the
date of grant.

The Committee may determine the term of each option; provided, however,
that the exercise period for an ISO may not exceed ten years from the date of
grant or five years from the date of grant if the Optionee on the date of
grant owns directly or by attribution under Section 424(d) of the Code,
shares posessing more than ten percent of the total combined voting power of
all classes of stock of the Company or an Affiliate and the exercise period
for an NQSO may not exceed ten years and six months from the date of grant.
An Optionee may pay the exercise price in cash or by such other mode of
payment as the Committee may approve, including the delivery of shares of
Common Stock held by the Optionee for more than one year.

If an Optionee ceases to serve as employee of the Company or one of its
subsidiaries for any reason other than disability, death or termination for
cause, the Optionee's Stock Option will terminate three months following the
date on which he or she ceases to serve. If the Optionee's service ceases due
to the Optionee's death or disability, the Optionee's Stock Option will
terminate one year following the date on which he or she ceases to serve. If
the Optionee's service ceases due to termination by the Company for cause, as
determined by the Committee, the Optionee's Stock Options will terminate
immediately. However, in each case described above, the Committee may specify
a different termination date with respect to an Optionee's Stock Option, but
in no event later than the date of expiration of the option term.

Amendment and Termination of the 1987 Plan. The Board may amend the 1987
Plan at any time; provided, however, that the Board may not amend the 1987
Plan to (i) change the class of employees eligible to receive ISOs under the
1987 Plan, (ii) extend the expiration date of the 1987 Plan, (iii) decrease
the minimum option price of an ISO granted under the 1987 Plan or (iv)
increase the maximum number of shares of Common Stock for which Grants may be
made under the 1987 Plan (except as provided pursuant to the adjustment
provision), without shareholder approval. The 1987 Plan will terminate on
March 31, 1997.

Adjustment Provisions. If there is any change in the number or kind of
shares of Common Stock outstanding by reason of a stock dividend,
recapitalization, stock split or other change in the number or class of
issued and outstanding equity securities of the Company, the Committee may
make adjustments to reflect any increase or decrease in the number or kind of
issued shares of Common Stock.

Change of Control of the Company. The Committee may, in its sole
discretion, accelerate the termination and/or exercisability provisions of
any Stock Option in the event of a dissolution or liquidation of the Company
or consummation of any transaction in which the Company is not the surviving
or acquiring entity or in which the Company becomes an 80% or more owned
subsidiary of another company.

EQUITY INCENTIVE PLAN

The ICT Group, Inc. Equity Incentive Plan (the "Incentive Plan") was
adopted by the Board and approved by the shareholders in December 1995. The
Incentive Plan provides opportunities for designated key employees to acquire
or increase their proprietary interest in the Company through the issuance of
awards ("Awards") covering Equity Incentive Units ("Units") relating to the
Company's common stock. No additional Units will be granted under the
Incentive Plan after the completion of this offering.

40
<PAGE>
General. The Incentive Plan authorizes up to 270,000 Units for issuance
pursuant to the terms of the Incentive Plan. If and to the extent Units under
the Incentive Plan are forfeited under the terms of an Award, such Units will
again be available for Awards under the Incentive Plan.

Administration of the Incentive Plan. The Incentive Plan is administered
and interpreted by the Board; however the Board may designate a committee of
the Board to administer the Incentive Plan. The Committee or the Board in its
administrative capacity with respect to the Incentive Plan is hereinafter
referred to as the "Committee".

Eligibility for Participation. All designated key employees, as determined
by the Committee, in its sole discretion, are eligible to receive Awards. As
of May 8, 1996, 113 employees were eligible to receive Awards under the
Incentive Plan, and 159,300 Units were outstanding under the Incentive Plan.

Terms and Conditions of Awards. Awards to designated key employees
("Grantees") under the Incentive Plan are subject to such terms and
conditions as the Committee may determine. The number of shares of Common
Stock to which an Award pertains, the purchase price, if any, which applies
to the Award on a per unit basis and such other conditions as determined by
the Committee are specified in the Award agreement. Each Grantee is fully
vested in his or her Award; provided, however, the Units may not be exercised
or redeemed by the Grantee prior to a public offering or a change of control,
as described below. In addition, upon a finding by the Committee that the
Grantee has breached his or her service contract, or has been engaged in
disloyalty to the Company, such Grantee shall automatically forfeit all
Units.

Public Offering. Upon a public offering, each employee has the right, upon
payment of the purchase price applicable to the Award, to receive a number of
shares of Common Stock of the Company equal to the number of Units granted
pursuant to the Award. All rights to exercise the Award terminate on the
earliest to occur of (i) the 10th anniversary of the date of grant of the
Award, (ii) any earlier termination date specified in the Award agreement, or
(iii) the 90th day following the employee's termination of employment.
Transfers of Common Stock pursuant to an Award are contingent on the
Grantee's grant of an irrevocable proxy, coupled with an interest, to such
person as the Committee may, in its sole discretion, designate for the
purpose of voting any such shares.

Change of Control of the Company. In the event of a change of control that
occurs prior to the Company's initial public offering, each holder of an
Award who is also an employee will fully vest in his or her Award and, for
purposes of such Grantee's rights to exercise under the terms of the
Incentive Plan and the Award, will be considered an employee at all times
thereafter. The Company may redeem all or any portion of a Grantee's Units in
exchange for an amount equal to the excess, if any, of the per-share value of
the Common Stock at the time of such redemption (as determined by the
Committee) over the purchase price per Unit provided in such Award,
multiplied by the number of Units redeemed.

Amendment of the Incentive Plan. The Board may amend the Incentive Plan at
any time; provided that the Board may not increase the maximum number of
shares as to which Units may be granted without shareholder approval.

1996 EQUITY COMPENSATION PLAN

The ICT Group, Inc. 1996 Equity Compensation Plan (the "Equity Compensation
Plan") was adopted by the Board in May 1996, contingent upon the completion of
this offering. The Equity Compensation Plan provides for grants of (i) stock
options, (ii) restricted stock, (iii) stock appreciation rights and (iv) other
awards that are valued in whole or in part by reference to, or are otherwise
based on, the Company's Common Stock (collectively "Grants").

General. Subject to adjustment in certain circumstances as discussed
below, the Equity Compensation Plan authorizes up to 1,120,000 shares of
common stock of the Company for issuance pursuant to the terms of the Plan.
If and to the extent Grants under the Equity Compensation Plan expire or are
terminated for any reason without being exercised, or the shares of Common
Stock subject to a Grant are forfeited, the shares of Common Stock subject to
such Grants again will be available for Grants under the Equity Compensation
Plan.

41
<PAGE>
Administration of the Equity Compensation Plan. The Equity Compensation
Plan is administered and interpreted by a Committee (the "Committee") of the
Board consisting of two or more persons appointed by the Board from among its
members, each of whom must be a "disinterested person" as defined in Rule
16b-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and an "outside director" as defined by section 162(m) of the Code.

Grants. Grants to employees (including officers and directors) and
consultants of the Company ("Grantees") under the Equity Compensation Plan
may consist of (i) options intended to qualify as ISOs within the meaning of
section 422 of the Code, (ii) NQSOs, (iii) restricted stock, (iv) stock
appreciation rights ("SARs") or (v) other awards that are valued in whole or
in part by reference to, or are otherwise based on, the Company's Common
Stock.

Eligibility for Participation. Grants may be made to any full-time
employee (including officers and directors) and consultants of the Company.
As of May 8, 1996, 290 employees were eligible for Grants under the Equity
Compensation Plan. During any calendar year, no Grantee may receive Grants
for more than 570,000 shares of Common Stock. As of May 8, 1996, no Grants
had been made under the Equity Compensation Plan.

Options. The option price of any ISO granted under the Equity
Compensation Plan will not be less than the fair market value of the
underlying shares of Common Stock on the date of grant; provided, however,
that if an ISO is granted to a Grantee who then owns, directly or indirectly,
shares posessing more than ten percent of the total combined voting power of
all classes of Stock of the Company, then the option price will be at least
110% of the fair market value of the underlying shares of Common Stock on the
date of grant. The option price of an NQSO is determined by the Committee in
its sole discretion and may be greater than, equal to or less than the fair
market value of the underlying shares of Common Stock on the date of grant.

The Committee may determine the term of each option; provided, however,
that the exercise period may not exceed ten years from the date of grant or
five years from the date of grant of an ISO if the Grantee on the date of
grant owns, directly or indirectly, shares possessing more than ten percent
of the total combined voting power of all classes of Stock of the Company. A
Grantee may pay the option price (i) in cash, (ii) with the approval of the
Committee, by delivering shares of Common Stock owned by the Grantee
(including Common Stock acquired in connection with the exercise of a stock
option, subject to such restrictions as the Committee deems appropriate) and
having a fair market value on the date of exercise equal to the option price
or (iii) by a combination of the foregoing.

If a Grantee ceases to serve as an employee, director or consultant of the
Company or its subsidiaries for any reason other than disability, death or
termination for cause, the Grantee's Stock Options will terminate 90 days
following the date on which he or she ceases to serve. If the Grantee's
service ceases due to the Grantee's death or disability, the Grantee's Stock
Options will terminate one year following the date on which he or she ceases
to serve due to such death or disability. If the Grantee's service ceases due
to termination by the Company for cause, the Grantee's Stock Options will
terminate immediately. However, in each case described above, the Committee
may specify a different termination date with respect to a Grantee, but in no
event later than the date of expiration of the option term.

Restricted Stock. The Committee may make Grants of restricted stock.
Shares may be issued for cash or other consideration, as the Committee
determines. The number of shares of Common Stock granted to each Grantee
shall be determined by the Committee. Grants of restricted stock will be made
subject to such restrictions and conditions as the Committee may determine in
its sole discretion, including restrictions on transferability (the
"Restriction Period"). During the Restriction Period, if any, a Grantee will
have the right to vote the shares subject to the Grant and the right to
receive any regular cash dividends paid thereon, unless the Committee
determines otherwise. If a Grantee's employment or service for the Company
terminates, or in the event of the occurrence of certain other events
determined by the Committee, the Grant will terminate with respect to all
shares as to which the restrictions have not lapsed and those shares must be
returned to the Company.

42
<PAGE>
Stock Appreciation Rights. The Committee may grant SARs alone or in tandem
with any Stock Option. The base amount of an SAR will be the greater of (i)
the exercise price of the related stock option, if any, or (ii) the fair
market value of a share of Common Stock on the date of grant of the SAR,
unless the Committee determines otherwise. Upon exercise of an SAR, a Grantee
will receive the amount by which the fair market value of the Common Stock on
the date of exercise exceeds the base amount of the SAR. A Grantee may elect
to have such appreciation paid in cash or in shares of Common Stock of the
Company, subject to Committee approval.

Stock-Based Awards. The Committee may, subject to limitations under
applicable law, grant to any Grantee other than a non-employee director,
awards of Common Stock or cash equal to the value of shares of Common Stock
as a bonus, subject to such conditions and restrictions, if any, as the
Committee may determine in its sole discretion.

Conditions of Grants. Unless the Committee determines otherwise, all
Grants under the Equity Compensation Plan will be contingent upon the Grantee
entering a voting trust agreement with respect to any shares issued pursuant
to such Grant, in the form and manner prescribed by the Committee. No shares
of Common Stock will be issued in connection with any Grant under the Equity
Compensation Plan unless the Grantee participates in such voting trust or the
Committee determines otherwise.

Amendment and Termination of the Equity Compensation Plan. The Board may
amend or terminate the Equity Compensation Plan at any time; provided,
however, that, the Board must obtain shareholder approval of any amendments
to the Equity Compensation Plan that (i) increase the aggregate number of
shares of Common Stock for which Grants may be made hereunder, (ii) decrease
the minimum exercise price specified by the Equity Compensation Plan in
respect of ISOs, (iii) change the class of employees eligible to receive ISOs
under the Equity Compensation Plan, (iv) increase the individual limit of
shares of Common Stock for which Grants of options may be made to any single
individual under the Equity Compensation Plan or (v) make any amendment that
requires shareholder approval pursuant to Rule 16b-3 of the Exchange Act or
162(m) of the Code. If approved by the shareholders, the Equity Compensation
Plan will become effective on the date the Company's Common Stock is first
registered with the Securities and Exchange Commission pursuant to the
Exchange Act and will terminate in May 2006, unless terminated earlier by the
Board or extended by the Board with approval of the shareholders.

Adjustment Provisions. If there is any change in the number or kind of
shares of Common Stock outstanding by reason of a stock dividend,
recapitalization, stock split or combination or exchange of such shares, or
merger, reorganization or consolidation in which the Company is the surviving
corporation, or reclassification or other change in the par value of the
Common Stock or by reason of any other extraordinary or unusual event
affecting the outstanding Common Stock as a class, the Committee may make
adjustment to reflect any increase or decrease in the number or kind of
issued shares of Common Stock.

Change of Control of the Company. Upon a change of control of the Company
(i) the Company will provide each Grantee with outstanding Grants written
notice of such change of control, (ii) all outstanding stock options and SARs
will automatically accelerate and become fully exercisable and (iii) the
restrictions and conditions on all outstanding restricted stock and
stock-based awards will immediately lapse. In addition, upon a change of
control where the Company is not the surviving corporation, all outstanding
stock options and SARs must be assumed or replaced with comparable options or
rights by the surviving corporation; provided, however, that the Committee
may (i) require that Grantees surrender their outstanding stock options and
SARs in exchange for a payment by the Company, in cash or Common Stock as
determined by the Committee, in an amount equal to the amount by which the
then fair market value of the shares of Common Stock subject to the Grantee's
outstanding stock options or SARs exceeds the option purchase price of the
stock options or base amount of the SARs, as the case may be, and (ii)
terminate any or all outstanding stock options and SARs at such time as the
Committee deems appropriate.

1996 NON-EMPLOYEE DIRECTORS PLAN

The ICT Group, Inc. 1996 Non-Employee Directors Plan (the "Directors Plan")
was adopted by the Board in May 1996, contingent upon the completion of this
offering. The Directors Plan provides for formula grants of NQSOs to members
of the Board of Directors who are not employees of the Company ("Non-Employee
Directors").

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<PAGE>
General. Subject to adjustment in certain circumstances as discussed
below, the Directors Plan authorizes up to 30,000 shares of common stock of
the Company for issuance pursuant to the terms of the Plan. If and to the
extent Grants under the Directors Plan expire or are terminated for any
reason without being exercised, or the shares of Common Stock subject to a
Grant are forfeited, the shares of Common Stock subject to such Grants again
will be available for future Grants under the Directors Plan.

Eligibility for Participation. Each Non-Employee Director who owns less
than 10% of the outstanding stock of the Company is eligible to receive NQSOs
under the Directors Plan. Upon the completion of this offering, one
Non-Employee Director will be entitled to receive such options. No grants
have been made under the Directors Plan to date, but Mr. Somers will receive
a grant of an NQSO to purchase 1,000 shares of Common Stock upon the
completion of this offering.

Formula Grants. Pursuant to the Directors Plan, each Non-Employee Director
who first becomes a member of the Board after the effective date of the
Directors Plan will receive an NQSO to purchase 1,000 shares of Common Stock
on the date he or she becomes a member of the Board. Such NQSOs will be 100%
vested and immediately exercisable on the date of grant. Thereafter, on each
date that the Company holds its annual meeting of shareholders, each
Non-Employee Director in office immediately after the annual election of
directors (other than Non-Employee Directors first elected at such meeting)
will receive an NQSO to purchase 1,000 shares of Common Stock. The exercise
price of all options granted pursuant to the Directors Plan must be equal to
the fair market value of a share of Common Stock on the date of grant and the
term of each such option will be ten years. Options granted annually to
Non-Employee Directors pursuant to the Directors Plan shall become
exercisable with respect to 100% of the shares on the first anniversary of
the date of grant.

If a Non-Employee Director ceases to serve as a Non-Employee Director of
the Company or its subsidiaries for any reason other than becoming an
employee of the Company, disability, death or termination for cause, the
Non-Employee Director's NQSOs will terminate 90 days following the date on
which he or she ceases to serve. If a Non-Employee Director's service ceases
due to death or disability, the Non-Employee Director's NQSOs will terminate
one year following the date on which he or she ceases to serve due to such
death or disability. If a Non-Employee Director's service ceases due to
termination by the Company for cause, the Non-Employee Director's NQSOs will
terminate immediately.

Amendment and Termination of the Directors Plan. The Board may amend or
terminate the Directors Plan at any time provided, however, that the formula
provisions of the Directors Plan may not be amended more than once every six
months, other than to comport with changes in the Code, the Employee
Retirement Income Security Act, or the rules thereunder. If approved by the
shareholders, the Directors Plan will become effective on the date the
Company's Common Stock is first registered with the Securities and Exchange
Commission pursuant to the Exchange Act and will terminate in May 2006,
unless terminated earlier by the Board or extended by the Board with approval
of the shareholders.

Change of Control of the Company. Upon a change of control of the Company
(i) the Company will provide each Non-Employee Director with outstanding
NQSOs written notice of such change of control and (ii) all outstanding NQSOs
will automatically accelerate and become fully exercisable.

44
<PAGE>

CERTAIN TRANSACTIONS

Voting Trust Agreement. John J. Brennan, Donald P. Brennan and the Company
have entered into a Voting Trust Agreement that terminates December 3, 2080
(the "Voting Trust Agreement"), with John J. Brennan and Donald P. Brennan as
voting trustees. John J. Brennan and Donald P. Brennan contributed 4,284,000
shares and 4,018,752 shares, respectively, to the voting trust. All acts of
the voting trustees under the Voting Trust Agreement must be by unanimous
consent, although the agreement provides that the voting trustees will be
present for purposes of constituting a quorum at any meeting of the
shareholders, regardless of whether the shares subject to the Voting Trust
Agreement are to be voted at the meeting. Upon the death, incompetence or
resignation of John J. Brennan as a voting trustee, Donald P. Brennan shall
have the right to (i) be the sole voting trustee if he becomes actively
involved in the Company, which shall include, up to December 31, 1999,
becoming Chairman and appointing a President and Chief Executive Officer, and
thereafter holding the position of President and Chief Executive Officer, or
(ii) appoint a successor trustee if he does not become, or ceases to be,
actively involved in the Company. Upon the death, incompetence or resignation
of Donald P. Brennan as a voting trustee, John J. Brennan shall have the
right to be the sole voting trustee.

Shareholders' Agreement. John J. Brennan, Donald P. Brennan and the
Company have entered into a Shareholders' Agreement that covers the shares
included under the Voting Trust Agreement and any other shares that they may
own (the "Shareholders' Agreement"). The Shareholders' Agreement prohibits
the transfer of shares owned by John J. Brennan and Donald P. Brennan,
without the consent of the other, except (i) pursuant to a public offering,
(ii) to certain family members and trusts therefor who agree to be bound by
the Shareholders' Agreement, (iii) to the other party or the Company pursuant
to rights of first refusal and (iv) to a third party if the first refusal
rights have not been exercised.

Voting Agreements. Each of the Company's employee optionholders has
entered into a ten-year voting agreement (the "Voting Agreements") with the
Company and John J. Brennan, the Chairman, President and Chief Executive
Officer, pursuant to which each has agreed to vote all shares of Common Stock
received by such individuals upon the exercise of options in the manner
directed by Mr. Brennan. The Voting Agreements are binding on each of the
optionholders' successors in interest. Mr. Brennan is required to release
shares covered by the Voting Agreements if a shareholder intends to sell
shares in the public market and completes the sale within 90 days of the
release. Shares sold in the public market will thereafter not be subject to
the Voting Agreements.

Guaranties by John J. Brennan and Donald P. Brennan. In April 1996, the
Company entered into an amended and restated loan agreement (the "Amended and
Restated Loan Agreement") whereby the lender (the "Bank") (i) made available a
$15,000,000 line of credit and a $3,500,000 equipment line of credit, (ii)
advanced a $1.5 million short-term loan and (iii) revised the terms of two
term loans previously advanced in the principal amounts of $1,350,000 and
$1,000,000. John J. Brennan and Donald P. Brennan (collectively, the
"Brennans") issued personal, unconditional guaranties to the Bank under which
each jointly and severally guaranteed the repayment of the loans issued under
the Amended and Restated Loan Agreement (the "Amended and Restated
Guarantee"). The Amended and Restated Guarantee superseded and replaced
entirely a guarantee agreement entered into between the Brennans and the Bank
in connection with a loan agreement entered into between the Company and the
Bank in September 1992. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources" and
"Use of Proceeds."

Loan to the Company by Donald P. Brennan. In March 1987, Donald P. Brennan
loaned $100,000 to the Company at an interest rate of 12% per annum and was
issued a promissory note (the "Brennan Note"). Principal repayments on the
Brennan Note have been restricted by various loan agreements entered into by
the Company. Under the terms of an Amended and Restated Subordination
Agreement entered into in April 1996 in connection with the Amended and
Restated Loan Agreement, the Company may make principal payments of up to
$10,000 per month, in aggregate, on the Brennan Note and the Passage East
Partnership Note described below. As of the date of this Prospectus, the
outstanding principal balance of the Brennan Note remained $100,000. The
Company believes that the terms of this loan are no less favorable to the
Company than those which it could have received from unaffiliated parties.

<PAGE>

Loan to the Company by Passage East Partnership. In April 1987, Passage
East Partnership, a New York general partnership in which the Brennans are
the sole general partners, loaned $300,000 to the Com-
pany at an interest rate of 12% per annum. The loan to the Company is
evidenced by a promissory note executed in favor of Passage East Partnership
(the "Passage East Partnership Note"). Like the Brennan Note, principal
repayments on the Passage East Partnership Note are prohibited under the
terms of various loan documents. However, from time to time, the Company's
lenders have allowed principal repayments to Passage East Partnership. The
Company made principal repayments of $30,000 in 1991, $20,000 in 1993,
$50,000 in 1994 and $90,000 in 1996. As of the date of this Prospectus, the
outstanding principal balance of the Passage East Partnership Note was
$110,000. The Company believes that the terms of this loan are no less
favorable to the Company than those which it could have received from
unaffiliated parties.

Loan to Shareholders. In April 1996, pursuant to the Amended and Restated
Loan Agreement, the Bank advanced a line of credit to the Company in the
principal amount of $1,500,000, with interest to accrue at the Bank's base
rate of interest which was 8.25% at April 30, 1996. The Company, in turn,
loaned $1,500,000 to the Brennans to satisfy their estimated income tax
liability for the quarterly periods ending December 31, 1995, March 31, 1996
and June 30, 1996. The loan to the Brennans is evidenced by a promissory note
executed by the Brennans (the "Shareholders' Note"), which does not bear
interest, and is payable in full on or before November 30, 1996. Pursuant to
the Amended and Restated Loan Agreement, the Shareholders' Note has been
assigned to the Bank.

46
<PAGE>
PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock as of June 1, 1996, and as
adjusted to reflect the sale by the Company of 2,411,552 shares of Common
Stock offered hereby, by (i) each person known to the Company to own
beneficially more than 5% of the outstanding shares of Common Stock; (ii)
each director of the Company; (iii) each Named Executive Officer; (iv) all
executive officers, directors and director nominees of the Company as a
group; and (v) each Selling Shareholder. Unless otherwise indicated below, to
the knowledge of the Company, all persons listed below have sole voting and
investment power with respect to their shares.

<TABLE>
<CAPTION>
Shares Beneficially Shares Beneficially
Owned Number of Owned
Prior to Offering(1) Shares Offered After Offering(1)
------------------------ -------------- ------------------------
Executive Officers, Directors
and Director Nominee Number Percent Number Percent
--------------------------------- ----------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
John J. Brennan(2)(3) ........... 9,383,202 93.1% -- 9,294,754 74.4%
Donald P. Brennan(2) ............ 8,302,752 92.3 -- 8,302,752 72.2
Bernard Somers .................. -- -- -- -- --
John L. Magee(4) ................ 360,000 3.8 54,000 306,000 2.6
John D. Campbell(4) ............. 157,500 1.7 9,000 148,500 1.3
Maurice J. Kerins(4) ............ 157,500 1.7 -- 157,500 1.4
Robert F. Small(4) .............. 135,000 1.5 20,250 114,750 *
Carl E. Smith(4) ................ 27,000 * -- 27,000 *
All executive officers, directors
and director nominees as a
group (8 persons)(3) ........... 9,383,202 93.1 83,250 9,294,754 74.4
Other Selling Shareholders
Dean J. Kilpatrick .............. 23,400 * 3,375 20,025 *
Christopher J. Ungarino ......... 12,150 * 1,823 10,327 *

</TABLE>

- ------
* Less than 1%.

(1) The number of shares of Common Stock deemed outstanding prior to this
offering consists of 9,000,000 shares of Common Stock outstanding as of
June 1, 1996. In addition, shares underlying options to purchase Common
Stock that are exercisable as of June 1, 1996 or within 60 days
thereafter, are deemed outstanding and to be beneficially owned by the
persons holding such options for purposes of computing such persons'
percentage ownership, but are not treated as outstanding for the purpose
of computing the percentage ownership of any other person. The number of
shares deemed outstanding after this offering includes an additional
2,411,552 shares of Common Stock that are being offered for sale by the
Company in this offering and an additional 88,448 shares to be issued upon
the exercise by Selling Shareholders of certain options in connection with
this offering.
(2) Includes 8,302,752 shares over which John J. Brennan and Donald P.
Brennan share voting and dispositive power pursuant to the Voting Trust
Agreement, as voting trustees, and the Shareholders' Agreement, of which
John J. Brennan contributed 4,284,000 shares and Donald P. Brennan
contributed 4,018,752 shares to the voting trust. John J. Brennan and
Donald P. Brennan have granted the Underwriters a 30-day option to
purchase up to 375,000 additional shares of Common Stock owned by them
solely to cover over-allotments, if any. To the extent the Underwriters'
over-allotment option is exercised, each of John J. Brennan and Donald P.
Brennan will sell one-half of the total number of shares sold pursuant to
such over-allotment option, in which case, upon the exercise of the option
in full, the number of shares and percentage of Common Stock beneficially
owned by John J. Brennan and Donald P. Brennan will be 8,919,754 (71.4%)
and 7,927,752 (68.9%), respectively. The address of these shareholders is
800 Town Center Drive, Langhorne, PA 19047. See "Certain Transactions --
Voting Trust Agreement" and "-- Shareholders' Agreement."
(3) Includes 1,080,450 shares (992,002 after this offering) of Common Stock
issuable pursuant to exercisable stock options over which John J. Brennan
exercises voting control pursuant to the Voting Agreements and the terms
of the Equity Incentive Plan.
(4) Consists of shares of Common Stock issuable pursuant to stock options
exercisable upon the completion of this offering. Except for shares sold
by Selling Shareholders, voting control over these shares is held by John
J. Brennan pursuant to the terms of the Voting Agreements.

47
<PAGE>
DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 40,000,000 shares of
Common Stock, par value $.01 per share, and 5,000,000 shares Preferred Stock,
par value $.01 per share. The Company's capital stock upon the completion of
this offering is described below.

COMMON STOCK

The holders of Common Stock are entitled to one vote for each share held
of record on all matters submitted to a vote of shareholders. If dividends
are declared, whether payable in cash, property or securities of the Company,
all holders of Common Stock are entitled to share equally in such dividends.
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company, after payment has been made to the holders of
shares of Preferred Stock, if any, for the full amount to which they are
entitled, the holders of the shares of Common Stock are entitled to share
equally in the assets available for distribution.

All currently outstanding shares of Common Stock are, and upon issuance as
set forth herein, the shares of Common Stock being sold by the Company will
be, duly authorized, validly issued, fully paid and non- assessable.

PREFERRED STOCK

The Board of Directors is authorized, without further action by the
shareholders, to issue up to 5,000,000 shares of Preferred Stock in one or
more series and to establish the designations, preferences, qualifications,
privileges, limitations, restrictions, options, conversion rights and other
special or relative rights of any series of Preferred Stock. The issuance of
shares of Preferred Stock could adversely affect the voting power and other
rights of holders of Common Shares. Because the terms of the Preferred Stock
may be fixed by Board of Directors of the Company without shareholder action,
the Preferred Stock could be issued quickly with terms designed to defeat a
proposed takeover of the Company, or to make the removal of management of the
Company more difficult. The authority to issue Preferred Stock or rights to
purchase such stock could be used to discourage a change in control of the
Company. Management of the Company is not aware of any such threatened
transaction to obtain control of the Company, and the Board of Directors has
no current plans to designate and issue any additional shares of Preferred
Stock.

CERTAIN PROVISIONS THAT MAY HAVE AN ANTI-TAKEOVER EFFECT

Provisions of the Company's Restated Articles of Incorporation (the
"Articles") and Bylaws may have an anti-takeover effect and may delay, defer
or prevent a tender offer or takeover attempt not approved by the Board of
Directors, including those made at a premium over the prevailing market price
of the Common Stock held by shareholders.

The Articles provide for a classified Board of Directors consisting of
three classes as nearly equal in size as practicable. Each class holds office
until the third annual meeting for election of directors following the
election of such class, except that the initial terms of the three classes
expire in 1997, 1998 and 1999, respectively. Any director may be removed for
cause only upon the vote of the holders of the shares of Common Stock then
entitled to vote.

Additionally, the authority of the Board to issue Preferred
Stock and establish certain rights, preferences, privileges, limitations and
other special rights without any further vote or action by the shareholders
of the Company could have the effect of impeding or discouraging the
acquisition of control of the Company in a transaction not approved by the
Board of Directors.

48
<PAGE>
The Articles and the Bylaws further provide that (i) shareholders may act
only at an annual or special meeting, and (ii) special meetings may be called
only by the Chairman of the Board, the President or a majority of the Board
of Directors.

The Company's Bylaws establish advance notice procedures with regard to
the nomination, other than by or at the direction of the Board of Directors
or a committee thereof, of candidates for election as directors. These
procedures provide that the notice of proposed shareholder nominations of
candidates must be timely given in writing to the Secretary of the Company
prior to the meeting at which directors are to be elected.

These provisions are intended to encourage persons considering an
acquisition or takeover of the Company to negotiate with the Board of
Directors rather than pursue non-negotiated takeover attempts, even though
such takeover might be desired by a majority of the shareholders. These
provisions may also reduce the likelihood of a change in the management or
voting control of the Company without the consent of the then incumbent Board
of Directors.

Subchapter F of Chapter 25 of the PBCL, which is applicable to the
Company, may have an anti-takeover effect and may delay, defer or prevent a
tender offer or takeover attempt that a shareholder might consider in his or
her best interest, including those attempts that might result in a premium
over the market price for the shares held by shareholders. In general,
Subchapter F of Chapter 25 of the PBCL delays for five years and imposes
conditions upon "business combinations" between an "interested shareholder"
and the Company. The term "business combination" is defined broadly to
include various merger, consolidation, division, exchange or sale
transactions, including transactions utilizing the Company's assets for
purchase price amortization or refinancing purposes. An "interested
shareholder," in general, would be a beneficial owner of shares entitling
that person to cast at least 20% of the votes that all shareholders would be
entitled to cast in an election of directors of the Company. However, since
each of Messrs. Brennan was a beneficial owner of shares entitled to greater
than 20% of such votes prior to the date when the Company elected to be
governed by such subchapter, neither would be deemed an interested
shareholder.

The foregoing description does not purport to be complete.

LIMITATION OF LIABILITY; INDEMNIFICATION OF OFFICERS AND DIRECTORS

The Company's Articles provide that, pursuant to and to the extent
permitted by Pennsylvania law, the Company's directors shall not be
personally liable for monetary damages for breach of any duty owed to the
Company and its shareholders. This provision does not eliminate the duty of
care, and, in appropriate circumstances, equitable remedies such as an
injunction or other forms of non-monetary relief would remain available under
Pennsylvania law. In addition, each director will continue to be subject to
liability for breach of the director's duty of loyalty to the Company, for
acts or omissions not in good faith or involving knowing violations of law,
or for actions resulting in improper personal benefit to the director. The
provision also does not affect a director's responsibilities under any other
law, such as the federal securities laws or state or federal environmental
laws. The Company's Bylaws provide that the Company shall indemnify its
officers and directors to the fullest extent permitted by Pennsylvania law,
including some instances in which indemnification is otherwise discretionary
under Pennsylvania law.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock will be American
Stock Transfer & Trust Company.

49
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for the Common
Stock of the Company. Sales of substantial amounts of shares of the Company's
Common Stock in the public market following this offering could adversely
affect the market price of the Common Stock, making it more difficult for the
Company to sell equity securities in the future at a time and price which it
deems appropriate.

Upon the completion of this offering, assuming no exercise of outstanding
options other than options to purchase an aggregate of 88,448 shares of
Common Stock to be exercised in connection with this offering (all of which
shares are being offered and sold hereby), the Company will have outstanding
11,500,000 shares of Common Stock. Of these shares, the 2,500,000 shares of
Common Stock sold in this offering will be freely tradeable without
restriction or registration under the Securities Act. The remaining 9,000,000
shares of Common Stock outstanding as of the date of this Prospectus are
"restricted securities" as defined by Rule 144.

In general, under Rule 144 as currently in effect, a person who has
beneficially owned shares for at least two years (or one year if the SEC's
proposed amendments to Rule 144 become effective), including an "affiliate,"
as that term is defined in the Securities Act, is entitled to sell within any
three-month period a number of shares that does not exceed the greater of one
percent of the then outstanding shares of Common Stock (approximately 115,000
shares after the completion of this offering), or the average weekly trading
volume during the four calendar weeks preceding filing of notice of such
sale, subject to certain requirements concerning availability of public
information, manner of sale and notice of sale.

In addition, affiliates must comply with the restrictions and requirements
of Rule 144, other than the two-year holding period requirements, in order to
sell shares of Common Stock which are not restricted securities. Under Rule
144(k), a person who is not an affiliate and has not been an affiliate for at
least three months prior to the sale and who has beneficially owned
restricted shares for at least three years may resell such shares without
compliance with the foregoing requirements.

Although an aggregate of 9,000,000 shares of Common Stock will be eligible
for public sale upon the completion of this offering, all of the Company's
current shareholders have agreed not to sell or otherwise dispose of any such
shares for a period of 180 days after the date of this Prospectus without the
prior written consent of Robertson, Stephens & Company.

Upon the completion of this offering, there will be 872,302 and 159,300
shares of Common Stock subject to outstanding options under the 1987
Stock Option Plan and units under the Equity Incentive Plan, respectively, and
90,000 shares of Common Stock subject to a stock option granted outside of the
1987 Stock Option Plan. Substantially all of the outstanding options and units
will be exercisable upon the completion of this offering. However, pursuant to
the Underwriting Agreement, the Company has agreed not to file, at any time
prior to the date 180 days from the date of this Prospectus, a registration
statement under the Securities Act covering (i) 1,121,602 shares of Common
Stock reserved for issuance under the Company's 1987 Stock Option Plan, Equity
Incentive Plan and a stock option granted outside of the 1987 Stock Option
Plan, (excluding 88,448 shares of Common Stock underlying options to be
exercised by the Selling Shareholders in connection with this offering) and
(ii) 1,150,000 shares of Common Stock reserved for future issuance under the
Company's 1996 Equity Compensation Plan and 1996 Non-Employee Directors Plan.
The Company intends to file a Form S-8 registration statement covering a
portion of such shares of Common Stock within one year from the date of this
Prospectus. The shares registered under such registration statement will be
available for resale in the open market upon the exercise of vested options,
subject to Rule 144 volume limitations applicable to affiliates.

50
<PAGE>
UNDERWRITING

The Underwriters named below (the "Underwriters"), acting through their
representatives, Robertson, Stephens & Company LLC and Smith Barney Inc. (the
"Representatives"), have severally agreed, subject to the terms and
conditions of the Underwriting Agreement, to purchase from the Company and
the Selling Shareholders the numbers of shares of Common Stock set forth
opposite their respective names below. The Underwriters are committed to
purchase and pay for all such shares if any are purchased.

Number of
Underwriter Shares
----------- -----------
Robertson, Stephens & Company LLC ......................... 850,000
Smith Barney Inc........................................... 850,000
Robert W. Baird & Co. Incorporated ........................ 100,000
Brean Murray, Foster Securities Inc........................ 100,000
Dain Bosworth Incorporated ................................ 100,000
Furman Selz LLC ........................................... 100,000
GS2 Securities, Inc........................................ 100,000
Hoak Securities Corp....................................... 100,000
Janney Montgomery Scott Inc................................ 100,000
Pennsylvania Merchant Group Ltd ........................... 100,000
-----------
Total .................................................. 2,500,000
===========

The Representatives have advised the Company and the Selling Shareholders
that the Underwriters propose to offer the shares of Common Stock to the public
at the initial public offering price set forth on the cover page of this
Prospectus, and to certain dealers at such price less a concession not in excess
of $.64 per share. The Underwriters may allow, and such dealers may re-allow, a
concession not in excess of $.10 per share to certain other dealers. After the
initial public offering, the public offering price, concessions and reallowances
to dealers may be reduced by the Representatives. No such reduction shall change
the amount of proceeds to be received by the Company as set forth on the cover
of this Prospectus.

John J. Brennan and Donald P. Brennan have granted to the Underwriters an
option, exercisable not later than 30 days from the date of this Prospectus,
to purchase up to 375,000 additional shares of Common Stock at the initial
public offering price less the underwriting discounts and commissions set
forth on the cover page of this Prospectus. To the extent that the
Underwriters exercise such option, each of the Underwriters will have a firm
commitment to purchase approximately the same percentage thereof that the
number of shares of Common Stock to be purchased by it shown in the above
table bears to the total shares of Common Stock listed in such table, and
Messrs. Brennan will be obligated, pursuant to such option, to sell such
shares to the Underwriters. The Underwriters may exercise such option only to
cover over-allotments made in connection with the sale of Common Stock
offered hereby. If purchased, the Underwriters will offer such additional
shares on the same terms as those on which the 2,500,000 shares are being
offered.

The Company, the Selling Shareholders and, if the Underwriters'
over-allotment option is exercised, Messrs. Brennan, on the one hand, and the
Underwriters on the other hand, have agreed to indemnify each other against
certain liabilities, including liabilities under the Securities Act.

The Company, together with its directors, executive officers and all of
the Selling Shareholders, who hold in aggregate all of the Company's
presently outstanding Common Stock, have agreed not to offer, sell or
otherwise dispose of any shares of Common Stock and any securities
convertible or exchangeable for shares of Common Stock beneficially owned by
them or any such securities hereafter acquired by them for a period of 180
days after the date of this Prospectus without the prior written consent of
Robertson, Stephens & Company. See "Shares Eligible for Future Sale."

The Representatives have advised the Company and the Selling Shareholders
that the Underwriters do not intend to confirm sales to any accounts over
which they exercise discretionary authority.

Prior to this offering, there has been no public market for the Common
Stock of the Company. Consequently, the initial public offering price for the
Common Stock has been determined by negotiations between the Company and the
Representatives. Among the factors considered in such negotiations were
the prevailing market conditions, the results of operations of the Company
in recent periods, the market capitalizations and stages of development of
other companies which the Company and the Representatives believe to be
comparable to the Company, estimates of the business potential of the
Company, the present state of the Company's development and other factors
deemed relevant.

The Common Stock has been approved for quotation and trading on the Nasdaq
National Market under the symbol "ICTG."

51
<PAGE>
LEGAL MATTERS

The Common Stock being offered hereby is being passed upon for the Company
by Morgan, Lewis & Bockius LLP, Philadelphia, Pennsylvania. Certain legal
matters in connection with this offering will be passed upon for the
Underwriters by Cooley Godward Castro Huddleson & Tatum, San Francisco,
California.

EXPERTS

The financial statements of the Company as of December 31, 1994 and 1995
and for each of the three years in the period ended December 31, 1995
included in this Prospectus and in the Registration Statement have been
audited by Arthur Andersen LLP, independent public accountants, as indicated
in their report with respect thereto, and are included herein in reliance
upon the authority of said firm as experts in giving said reports.

ADDITIONAL INFORMATION

The Company has filed with the Commission in Washington, D.C., a
Registration Statement on Form S-1 under the Securities Act, with respect to
the securities offered hereby. This Prospectus, which constitutes part of the
Registration Statement, omits certain of the information contained in the
Registration Statement and the exhibits and schedules thereto on file with
the Commission pursuant to the Securities Act and the rules and the
regulations of the Commission thereunder. Statements contained in this
Prospectus as to the contents of any contract or other document referred to
are not necessarily complete and in each instance reference is made to the
copy of such contract or other document filed as an exhibit to the
Registration Statement, and each such statement is qualified in all respects
by such reference. The Registration Statement can be inspected and copied at
the public reference facilities maintained by the Commission at Judiciary
Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
following Regional Offices of the Commission: Seven World Trade Center, New
York, New York 10048; and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60621. Copies of such material can be obtained at prescribed rates.
In addition, such materials also may be inspected and copied at the offices
of the Nasdaq National Market, 1735 K Street, N.W., Washington, D.C. 20006.

52
<PAGE>
ICT GROUP, INC. AND SUBSIDIARY

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page
--------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ......... F-2

CONSOLIDATED BALANCE SHEETS ...................... F-3

CONSOLIDATED STATEMENTS OF INCOME ................ F-4

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY .. F-5

CONSOLIDATED STATEMENTS OF CASH FLOWS ............ F-6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ....... F-7

F-1
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To ICT Group, Inc.:

We have audited the accompanying consolidated balance sheets of ICT Group,
Inc. (a Pennsylvania corporation) and Subsidiary as of December 31, 1994 and
1995, and the related consolidated statements of income, shareholders' equity
and cash flows for each of the three years in the period ended December 31,
1995. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of ICT Group, Inc. and
Subsidiary as of December 31, 1994 and 1995, and the results of their
operations and their cash flows for each of the three years in the period
ended December 31, 1995, in conformity with generally accepted accounting
principles.

ARTHUR ANDERSEN LLP
Philadelphia, Pa.
March 20, 1996, (except for the recapitalization discussed
in Note 2, as to which the date is June 12, 1996)

F-2
<PAGE>
ICT GROUP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

December 31, March 31, 1996
-------------------------------- ------------------------------
Pro Forma
1994 1995 Actual (Note 3)
-------------- -------------- ------------- -------------
(unaudited)
<S> <C> <C> <C> <C>

ASSETS
CURRENT ASSETS:
Cash ..................................................... $ 10,630 $ 447,206 $ 3,398 $ 3,398
Accounts receivable, net of allowance for doubtful
accounts of $600,691, $211,773 and $252,258 ............ 6,598,519 8,980,632 10,730,177 10,730,177
Receivable from related party ............................ 185,929 132,977 -- --
Grant receivable ......................................... 449,397 537,049 647,046 647,046
Prepaid expenses and other ............................... 231,338 333,933 640,661 640,661
-------------- -------------- ------------- -------------
Total current assets ................................ 7,475,813 10,431,797 12,021,282 12,021,282
-------------- -------------- ------------- -------------
PROPERTY AND EQUIPMENT:
Communications and computer equipment .................... 7,966,175 11,265,657 12,372,074 12,372,074
Furniture and fixtures ................................... 948,048 1,751,077 2,213,803 2,213,803
Leasehold improvements ................................... 418,173 884,645 1,049,948 1,049,948
-------------- -------------- ------------- -------------
9,332,396 13,901,379 15,635,825 15,635,825
Less-Accumulated depreciation and amortization ........... (5,286,827) (7,038,754) (7,574,977) (7,574,977)
-------------- -------------- ------------- -------------
Net property and equipment .......................... 4,045,569 6,862,625 8,060,848 8,060,848
-------------- -------------- ------------- -------------
OTHER ASSETS ............................................... 522,862 1,186,321 1,335,588 1,335,588
-------------- -------------- ------------- -------------
$12,044,244 $18,480,743 $21,417,718 $21,417,718
============== ============== ============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Borrowings on lines of credit ............................ $ 3,591,157 $ 6,201,152 $ 6,853,441 $ 6,853,441
Current portion of long-term debt ........................ 405,000 705,000 705,000 705,000
Current portion of capitalized lease obligations ......... 665,158 748,366 821,624 821,624
Current portion of subordinated notes due to related
parties................................................. -- 180,000 120,000 120,000
Accounts payable ......................................... 1,889,504 1,732,505 3,137,494 3,137,494
Accrued expenses ......................................... 1,386,774 2,044,500 2,408,307 2,408,307
Payable to related party ................................. -- -- 69,278 69,278
Deferred revenues ........................................ -- 421,209 389,707 389,707
Deferred income taxes .................................... -- -- -- 144,000
S corporation distribution payable to shareholders ....... -- -- -- 2,450,000
-------------- -------------- ------------- -------------
Total current liabilities ........................... 7,937,593 12,032,732 14,504,851 17,098,851
-------------- -------------- ------------- -------------
LONG-TERM DEBT ............................................. 641,250 761,250 585,000 585,000
-------------- -------------- ------------- -------------
CAPITALIZED LEASE OBLIGATIONS .............................. 806,982 1,631,623 1,811,364 1,811,364
-------------- -------------- ------------- -------------
SUBORDINATED NOTES DUE TO RELATED PARTIES .................. 300,000 120,000 120,000 120,000
-------------- -------------- ------------- -------------
DEFERRED INCOME TAXES ...................................... -- -- -- 1,042,000
-------------- -------------- ------------- -------------
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY ............... 88,386 92,104 102,227 102,227
-------------- -------------- ------------- -------------
COMMITMENTS AND CONTINGENCIES (Note 11)
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value, 5,000,000 shares
authorized, none issued ............................... -- -- -- --
Common stock, $.01 par value, 40,000,000 shares
authorized, 9,000,000 shares issued and outstanding at
December 31, 1994 and 1995 ............................ 90,000 90,000 -- --
Class A common stock (voting), $.01 par value, 10,000,000
shares authorized, 4,500,000 shares issued and
outstanding at March 31, 1996 ......................... -- -- 45,000 45,000
Class B common stock (non-voting), $.01 par value,
10,000,000 shares authorized, 4,500,000 shares issued
and outstanding at March 31, 1996 ..................... -- -- 45,000 45,000
Additional paid-in capital ............................... 310,000 310,000 578,675 805,344
Deferred compensation .................................... -- -- (261,410) (261,410)
Retained earnings ........................................ 1,868,853 3,438,912 3,862,669 --
Cumulative translation adjustment ........................ 1,180 4,122 24,342 24,342
-------------- -------------- ------------- -------------
Total shareholders' equity .......................... 2,270,033 3,843,034 4,294,276 658,276
-------------- -------------- ------------- -------------
$12,044,244 $18,480,743 $21,417,718 $21,417,718
============== ============== ============= =============
</TABLE>

The accompanying notes are an integral part of these statements.

F-3
<PAGE>
ICT GROUP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended
Year Ended December 31, March 31,
------------------------------------------------- -----------------------------
1993 1994 1995 1995 1996
-------------- -------------- -------------- ------------ -------------
(unaudited)
<S> <C> <C> <C> <C> <C>
NET REVENUES ....................... $22,271,041 $34,123,378 $52,115,819 $9,293,555 $16,219,586
-------------- -------------- -------------- ------------ -------------
OPERATING EXPENSES:
Cost of services ................. 12,746,644 19,593,123 28,638,687 5,210,173 8,767,130
Selling, general and
administrative ................. 8,629,644 13,121,458 21,073,590 3,857,633 6,795,367
-------------- -------------- -------------- ------------ -------------
21,376,288 32,714,581 49,712,277 9,067,806 15,562,497
-------------- -------------- -------------- ------------ -------------
Operating income ............ 894,753 1,408,797 2,403,542 225,749 657,089
INTEREST EXPENSE ................... 325,319 510,586 833,483 164,198 233,332
-------------- -------------- -------------- ------------ -------------
NET INCOME ......................... $ 569,434 $ 898,211 $ 1,570,059 $ 61,551 $ 423,757
============== ============== ============== ============ =============
PRO FORMA DATA (UNAUDITED) (Note 3):
Historical net income ............ $ 569,434 $ 898,211 $ 1,570,059 $ 61,551 $ 423,757
Pro forma provision for income
taxes ......................... 263,079 405,991 667,275 26,142 170,011
-------------- -------------- -------------- ------------ -------------
Pro forma net income ............. $ 306,355 $ 492,220 $ 902,784 $ 35,409 $ 253,746
============== ============== ============== ============ =============
Pro forma net income per share ... $ .03 $ .05 $ .09 $ -- $ .03
============== ============== ============== ============ =============
Shares used in computing pro
forma net income per share ..... 9,619,985 9,619,985 9,702,010 9,702,010 9,702,010
============== ============== ============== ============ =============
Supplemental pro forma net income
per share ...................... $ .13 $ .04
============== =============
Shares used in computing
supplemental pro forma net
income per share ............... 10,543,662 10,543,662
============== =============
</TABLE>

The accompanying notes are an integral part of these statements.

F-4

<PAGE>
ICT GROUP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
Common Stock
-----------------------------------------------------------------------
No designation Class A Class B
------------------------ --------------------- ---------------------
Shares Amount Shares Amount Shares Amount
------------ -------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
BALANCE,
DECEMBER 31, 1992 ....... 9,000,000 $ 90,000 -- $ -- -- $ --
Net income ............ -- -- -- -- -- --
------------ -------- --------- -------- --------- --------
BALANCE,
DECEMBER 31, 1993 ....... 9,000,000 90,000 -- -- -- --
Currency translation
adjustment .......... -- -- -- -- -- --
Net income ............ -- -- -- -- -- --
------------ -------- --------- -------- --------- --------
BALANCE,
DECEMBER 31, 1994 ...... 9,000,000 90,000 -- -- -- --
Currency translation
adjustment .......... -- -- -- -- -- --
Net income ............ -- -- -- -- -- --
------------ -------- --------- -------- --------- --------
BALANCE,
DECEMBER 31, 1995 ...... 9,000,000 90,000 -- -- -- --
Deferred compensation
related to grants of
stock options
(unaudited) ......... -- -- -- -- -- --
Amortization of deferred
compensation
(unaudited) ......... -- -- -- -- -- --
Currency translation
adjustment
(unaudited) -- -- -- -- -- --
Issuance of Class A and
Class B common stock
in exchange for all
outstanding shares of
common stock
(unaudited) ......... (9,000,0000) (90,000) 4,500,000 45,000 4,500,000 45,000
Net income (unaudited) -- -- -- -- -- --
------------ -------- ---------- -------- --------- --------
BALANCE, MARCH 31,
1996 (unaudited) ....... -- $ -- 4,500,000 $45,000 4,500,000 $45,000
============ ======== ========== ======== ========= ========
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
Additional Deferred Cumulative Total
Paid-in Compen- Retained Translation Shareholders'
Capital sation Earnings Adjustment Equity
---------- ---------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>

BALANCE,
DECEMBER 31, 1992 ....... $310,000 $ -- $ 401,208 $ -- $ 801,208
Net income ............ -- -- 569,434 -- 569,434
---------- ---------- ---------- ----------- -------------
BALANCE,
DECEMBER 31, 1993 ....... 310,000 -- 970,642 -- 1,370,642
Currency translation
adjustment .......... -- -- -- 1,180 1,180
Net income ............ -- -- 898,211 -- 898,211
---------- ---------- ---------- ----------- -------------
BALANCE,
DECEMBER 31, 1994 ...... 310,000 -- 1,868,853 1,180 2,270,033
Currency translation
adjustment .......... -- -- -- 2,942 2,942
Net income ............ -- -- 1,570,059 -- 1,570,059
---------- ---------- ---------- ----------- -------------
BALANCE,
DECEMBER 31, 1995 ...... 310,000 -- 3,438,912 4,122 3,843,034
Deferred compensation
related to grants of
stock options
(unaudited) ......... 268,675 (268,675) -- -- --
Amortization of deferred
compensation
(unaudited) ......... -- 7,265 -- -- 7,265
Currency translation
adjustment
(unaudited) -- -- -- 20,220 20,220
Issuance of Class A and
Class B common stock
in exchange for all
outstanding shares of
common stock
(unaudited) ......... -- -- -- -- --
Net income (unaudited) -- -- 423,757 -- 423,757
---------- ---------- ---------- ----------- -------------
BALANCE, MARCH 31,
1996 (unaudited) ....... $578,675 $(261,410) $3,862,669 $24,342 $4,294,276
========== ========== ========== =========== =============
</TABLE>

The accompanying notes are an integral part of these statements.

F-5

<PAGE>
ICT GROUP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Year Ended December 31, Three Months Ended March 31,
-------------------------------------------- ----------------------------
1993 1994 1995 1995 1996
----------- ------------- ------------- ----------- -------------
(unaudited)
<S> <C> <C> <C> <C> <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income .............................. $ 569,434 $ 898,211 $ 1,570,059 $ 61,551 $ 423,757
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities-- ...............
Minority interest in subsidiary's
earnings ............................ -- 17,307 3,718 (20,105) 10,123
Depreciation and amortization ........ 798,429 1,242,951 1,877,133 354,582 556,450
(Increase) decrease in-- .............
Accounts receivable ................ (529,974) (2,482,347) (2,349,113) (771,344) (1,749,545)
Prepaid expenses and other ......... (67,719) (25,309) (135,595) (337,634) (306,728)
Receivable from related party ...... -- (185,929) 52,952 9,463 132,977
Grant receivable ................... -- (449,397) (87,652) (85,283) (109,997)
Other assets ....................... (25,008) (61,646) 33,319 (161,634) (156,494)
Increase (decrease) in-- .............
Accounts payable ................... (141,466) 1,001,254 (50,128) (127,726) 1,298,118
Accrued expenses ................... (75,413) 957,919 (246,795) 828,733 477,943
Accounts payable to related party .. -- -- -- 69,278
Deferred revenue ................... -- -- 421,209 224,242 (31,502)
----------- ------------- ------------- ----------- -------------
Net cash provided by (used in)
operating activities .......... 528,283 913,014 1,089,107 (25,155) 614,380
----------- ------------- ------------- ----------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment ..... (686,854) (960,700) (2,372,873) (692,226) (1,259,380)
Payments for business acquisitions ...... -- (486,168) (468,487) -- --
Proceeds from repayment of note
receivable from customer ............. 90,000 47,000 -- -- --
----------- ------------- ------------- ----------- -------------
Net cash used in investing
activities .................... (596,854) (1,399,868) (2,841,360) (692,226) (1,259,380)
----------- ------------- ------------- ----------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings on lines of credit ....... 775,000 616,157 2,609,995 1,175,200 652,289
Proceeds from long-term debt ............ -- 1,350,000 1,000,000 -- --
Proceeds from minority owner of joint
venture ............................... -- 71,079 -- -- --
Payments on long-term debt .............. (300,000) (928,750) (580,000) (101,250) (176,250)
Payments on capitalized lease
obligations ........................... (326,972) (598,968) (807,109) (246,233) (222,067)
Payments on subordinated notes .......... (20,000) (50,000) -- -- (60,000)
Payments of deferred financing costs .... (14,888) (35,344) (36,999) -- (13,000)
----------- ------------- ------------- ----------- -------------
Net cash provided by financing
activities .................... 113,140 424,174 2,185,887 827,717 180,972
----------- ------------- ------------- ----------- -------------
EFFECT OF FOREIGN EXCHANGE RATE CHANGES
ON CASH ................................. -- 1,180 2,942 (1,277) 20,220
----------- ------------- ------------- ----------- -------------
NET INCREASE (DECREASE) IN CASH ........... 44,569 (61,500) 436,576 109,059 (443,808)
CASH, BEGINNING OF PERIOD ................. 27,561 72,130 10,630 10,630 447,206
----------- ------------- ------------- ----------- -------------
CASH, END OF PERIOD ....................... $ 72,130 $ 10,630 $ 447,206 $ 119,689 $ 3,398
=========== ============= ============= =========== =============

</TABLE>

The accompanying notes are an integral part of these statements.

F-6
<PAGE>
ICT GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS
ENDED MARCH 31, 1995 AND 1996 IS UNAUDITED)
1. BACKGROUND:

ICT Group, Inc. was incorporated in Pennsylvania on March 20, 1987. Eurotel
Marketing Limited ("Eurotel"), a 60%-owned joint venture, was incorporated in
Dublin, Ireland in July 1994 (see Note 4). ICT/Canada Marketing, Inc. ("ICT
Canada") was incorporated in December 1995. ICT Group, Inc., Eurotel and ICT
Canada (collectively the "Company") provide multilingual marketing, management,
and information research services for selected industries, including insurance
and financial services, publishing, telecommunications, consumer products and
services, pharmaceuticals, health care services and computer software and
hardware.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

INTERIM FINANCIAL STATEMENTS

The financial statements as of March 31, 1996 and for the three months
ended March 31, 1995 and 1996 are unaudited and, in the opinion of management
of the Company, include all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of the results for those
interim periods. The results of operations for the three months ended March
31, 1996 are not necessarily indicative of the results to be expected for the
full year.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of ICT Group,
Inc., Eurotel and ICT Canada. All material intercompany balances and
transactions have been eliminated. Pursuant to Statement of Financial Accounting
Standards ("SFAS") No. 52, substantially all assets and liabilities of Eurotel
and ICT Canada are translated at the period-end currency exchange rate and
revenues and expenses are translated at an average currency exchange rate for
the period. The resulting translation adjustment is accumulated in a separate
component of shareholders' equity. While ICT Canada has certain shareholders not
related to the Company, the Company provided substantially all of the initial
capitalization, has control and has the ability to receive all of the earnings
of ICT Canada. The Company's control of ICT Canada is provided for in a
shareholders' agreement, which, among other things, effectively allows the
Company to elect an additional number of directors to ensure that the Company
controls a majority of the board. In addition, the Company has an irrevocable
right, which it can exercise at any time for a nominal amount, to purchase on
behalf of any person designated by the Company the stock it does not own in ICT
Canada. As a result, the Company consolidates 100% of ICT Canada in its
consolidated financial statements.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

REVENUE RECOGNITION

The Company recognizes revenues on programs as services are performed,
generally based on hours incurred. Amounts collected from customers prior to
the performance of services are recorded as deferred revenues.

F-7
<PAGE>

ICT GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Information as of March 31, 1996 and for the three months
ended March 31, 1995 and 1996 is unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: - (Continued)

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost. Depreciation and amortization
are provided over the estimated useful lives of the applicable assets using
the straight-line method. The lives used are as follows:

Communications and computer equipment .... 5 years
Furniture and fixtures ................... 5 - 7 years
Leasehold improvements ................... Lease term

Depreciation expense was $880,907, $1,184,683, $1,750,921, $343,082 and
$536,223 for the years ended December 31, 1993, 1994 and 1995 and the three
months ended March 31, 1995 and 1996, respectively. Repairs and maintenance
are charged to expense as incurred. Additions and betterments are
capitalized. Gains or losses on the disposition of property and equipment are
charged to operations.

Equipment under capital leases included in property and equipment is
$1,925,472 and $2,911,846, net of accumulated depreciation of $883,764 and
$1,612,348, as of December 31, 1994 and 1995, respectively.

OTHER ASSETS

<TABLE>
<CAPTION>
December 31,
---------------------------
1994 1995
----------- ------------
<S> <C> <C>
Deposits ...................................................... $287,565 $ 308,582
Goodwill, net of accumulated amortization of $36,648 and $63,463
(see Note 5) ................................................. 122,723 833,051
Other ......................................................... 112,574 44,688
----------- ------------
$522,862 $1,186,321
=========== ============
</TABLE>

Goodwill is amortized over 15 years on a straight-line basis. The Company
evaluates the realizability of goodwill based on estimates of undiscounted
future cash flows over the remaining useful life of the assets acquired. If
the amount of such estimated undiscounted future cash flows is less than the
net book value of the assets acquired, the assets are written down to the
amount of the estimated discounted cash flows.

ACCRUED EXPENSES

<TABLE>
<CAPTION>
December 31,
-------------------------------------
1994 1995
------------- ------------
<S> <C> <C>
Payroll and related benefits . $ 655,659 $ 946,640
Telecommunications expense .. 449,315 407,879
Other ....................... 281,800 689,981
------------- ------------
$1,386,774 $2,044,500
============= ============
</TABLE>

INCOME TAXES

The Company is an S Corporation for federal and certain state income tax
reporting purposes and, accordingly, income is passed through to the
shareholders and taxed at the individual level. The Company operates in
certain states that do not recognize S Corporation status and, therefore, is
subject to corporate income tax in those states. The Company reports certain
income and expense items for income tax purposes on a basis different from
that reflected in the accompanying financial statements. The principal
differences relate to the use of the cash method of accounting and
accelerated depreciation for tax purposes (see Note 3).

Pro forma income taxes are accounted for under SFAS No. 109, "Accounting
for Income Taxes," which requires an asset and liability approach for the
accounting and financial reporting of income taxes (see Note 3).

F-8
<PAGE>
ICT GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Information as of March 31, 1996 and for the three months
ended March 31, 1995 and 1996 is unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: - (Continued)

SUPPLEMENTAL CASH FLOW INFORMATION

For the years ended December 31, 1993, 1994 and 1995 and the three months
ended March 31, 1995 and 1996, the Company paid interest of $333,273,
$498,846, $848,810, $168,610 and $224,976, respectively. Capital lease
obligations of $531,498, $1,299,212 and $1,714,958 were incurred on equipment
leases entered into in 1993, 1994 and 1995, respectively, and $188,884 and
$475,066 for the three months ended March 31, 1995 and 1996, respectively.

RECAPITALIZATION

In June 1996, the Company effected a nine-for-one stock split in the form of
a stock dividend, reclassified its Class A common stock and Class B common stock
as common stock, authorized 5,000,000 shares of undesignated preferred stock and
increased its authorized common stock to 40,000,000 shares. All references in
the accompanying financial statements to the number of common shares and
per-share amounts have been retroactively restated to reflect the stock split.

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK

The Company is dependent on several large customers for a significant
portion of its net revenues. In 1993, 1994 and 1995, one customer accounted
for approximately 43%, 41% and 43% of net revenues, respectively. In 1993 and
1994, a different customer accounted for approximately 13% and 11% of net
revenues, respectively. In 1993, 1994 and 1995, net revenues from customers
within the insurance industry accounted for 58.5%, 58.1% and 46.2% of total
net revenues, respectively, and customers within the financial services
industry accounted for 18.5%, 14.1% and 22.3% of total net revenues,
respectively. The loss of one or more of the Company's major customers or a
downturn in the insurance or financial services industries could have a
material adverse effect on the Company's business.

Concentration of credit risk is limited to trade receivables and is
subject to the financial condition of certain major customers. The Company
does not require collateral from its customers.

NEW ACCOUNTING PRONOUNCEMENT

The Financial Accounting Standards Board has issued SFAS No. 123,
"Accounting for Stock-Based Compensation." The Company is required to adopt
this standard for the year ending December 31, 1996. The Company has elected
to adopt the disclosure requirement of this pronouncement. The adoption of
this pronouncement will have no impact on the Company's financial position or
results of operations.

3. PRO FORMA INFORMATION (UNAUDITED):

PRO FORMA BALANCE SHEET

The pro forma balance sheet of the Company as of March 31, 1996 reflects (1)
the net deferred income tax liability which will be recorded by the Company as a
result of the termination of its S Corporation status shortly before the
effective date of the Company's initial public offering ("Offering")
contemplated by this Prospectus (estimated at $1,186,000 as of March 31, 1996)
and (2) a distribution payable to the shareholders of the Company of all taxed
but undistributed S Corporation earnings (estimated at $2,450,000 as of March
31, 1996). The deferred income tax liability will represent the tax effect of
the cumulative differences between the financial reporting and income tax bases
of certain assets and liabilities as of the termination of S Corporation status,
and will be recorded as additional income tax expense in the quarter in which
the Offering is completed. The actual deferred income tax liability recorded
will be adjusted to reflect the effect of opera-

F-9
<PAGE>
ICT GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Information as of March 31, 1996 and for the three months
ended March 31, 1995 and 1996 is unaudited)

3. PRO FORMA INFORMATION (UNAUDITED): - (Continued)

tions of the Company for the period from April 1, 1996 through the termination
of its S Corporation status. The actual amount distributed will also be adjusted
to reflect the taxable income during that period, and any distributions made to
the shareholders during that time period.

The significant items comprising the Company's pro forma net deferred
income tax liability as of March 31, 1996 are as follows:

<TABLE>
<CAPTION>
<S> <C>
Current deferred income tax liabilities:
Accruals and reserves not currently deductible for
tax ........................................... $ 169,000
Cash basis of accounting ........................ (313,000)
-------------
(144,000)
-------------
Non-current deferred income tax liabilities:
Depreciation methods ............................ (100,000)
Cash basis of accounting ........................ (942,000)
-------------
(1,042,000)
-------------
Net deferred income tax liability .......... $(1,186,000)
=============
</TABLE>
PRO FORMA INCOME STATEMENT

Shortly before the effective date of the Offering, the Company will
terminate its status as an S Corporation and will be subject to federal and
state income taxes thereafter. Accordingly, for informational purposes, the
accompanying statements of income for the year ended December 31, 1995 and
the three months ended March 31, 1996 include an unaudited pro forma
adjustment for the income taxes which would have been recorded if the Company
had not been an S Corporation, based on the tax laws in effect during the
respective periods.

The differences between the federal statutory income tax rate and the pro
forma income tax rate for the year ended December 31, 1995 are as follows:

<TABLE>
<CAPTION>
<S> <C>
Federal statutory tax rate ................ 34.0%
State income taxes, net of federal benefit . 6.4
Expenses not deductibe for tax purposes ... 2.1
-------
42.5%
=======
</TABLE>

PRO FORMA NET INCOME PER SHARE

Pro forma net income per share was calculated by dividing pro forma net
income by the weighted average number of shares of common stock outstanding
for the respective periods, adjusted for the dilutive effect of common stock
equivalents, which consist of stock options, using the treasury stock method.
Pursuant to the requirements of the Securities and Exchange Commission,
common stock equivalents issued by the Company during the 12 months
immediately preceding the Offering have been included in the calculation of
the shares used in computing pro forma net income per share as if they were
outstanding for all periods presented (using the treasury stock method and the
Offering price of $16.00 per share).

SUPPLEMENTAL PRO FORMA NET INCOME PER SHARE

Supplemental pro forma net income per share is based on the weighted
average number of shares of common stock and common stock equivalents used in
the calculation of pro forma net income per share plus the number of shares
that would be required to be sold to fund the distribution to the
shareholders of the

F-10
<PAGE>
ICT GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Information as of March 31, 1996 and for the three months
ended March 31, 1995 and 1996 is unaudited)

3. PRO FORMA INFORMATION (UNAUDITED): - (Continued)

Company of previously taxed but undistributed earnings (estimated at $2,450,000
as of March 31, 1996) and to repay the borrowing's on the lines of credit, the
term debt due to the bank, capitalized lease obligations and the subordinated
notes due to related parties ($11,016,429 in the aggregate as of March 31,
1996). Pro forma net income is increased by $496,673 and $139,043 for the year
ended December 31, 1995 and the three months ended March 31, 1996, respectively,
for the elimination of interest expense, net of tax, on the line of credit and
term debt.

4. EUROTEL:

In July 1994, the Company entered into an agreement with a subsidiary of
R.R. Donnelley & Sons Company ("Donnelley") to form Eurotel, which provides
telephone marketing and information services in Europe. The Company invested
$106,619 for a 60% ownership interest. Eurotel had net revenues of $244,456
and $1,885,028 and net income of $43,268 and $2,342 in 1994 and 1995,
respectively. The minority interest in the earnings of Eurotel of $17,307 in
1994 and $937 in 1995 are included in selling, general and administrative
expenses on the accompanying statements of operations. As a result of billing
arrangements for certain customers, the Company has either a receivable due
from or a payable due to Donnelley.

Eurotel is reimbursed by the Irish Industrial Development Authority
("IDA") for certain capital expenditures and operating expenses. The Company
records a grant receivable for qualified expenditures made, but not yet
reimbursed. Grants for employment, training costs and rent are recorded as a
reduction in the corresponding expense and grants for capital expenditures
are recorded as a reduction in the carrying amount of the related property
and equipment. For the years ended December 31, 1994 and 1995 and the three
months ended March 31, 1995 and 1996, the Company recorded $145,170,
$260,013, $81,614 and $57,530, respectively, as expense reductions. The
Company is required to maintain certain employment levels specified under the
grants. If the Company fails to maintain these levels, a portion of the grant
would be payable to the IDA for that portion of the employment targets not
maintained.

In January 1996, the Company entered into a memorandum of understanding
for the purchase of Donnelley's 40% interest in Eurotel. The purchase price
will be equal to the book value of Donnelley's minority interest at closing,
which was $102,227 as of March 31, 1996.

5. ACQUISITIONS:

In the first quarter of 1994, the Company acquired substantially all the
fixed assets and customer lists of two telemarketing operations. Total
consideration paid in connection with these acquisitions was $486,168,
including transaction costs. Each of the acquisitions was accounted for using
the purchase method of accounting. The excess of the purchase price over the
fair value of the assets acquired (goodwill) was approximately $131,000.

On May 1, 1995, the Company acquired the fixed assets and assumed certain
liabilities of the Smartline division of Nationar for $638,207, including
transaction costs. The acquisition was accounted for using the purchase
method of accounting. The total purchase price exceeded the fair value of the
net assets acquired by $750,228, which has been recorded as goodwill. At
December 31, 1995, accrued expenses included $169,720 of the purchase price
which was paid in January 1996. If the acquisition of the Smartline division
had occurred as of January 1, 1994, the Company's net revenues in 1994 and
1995 would have been approximately $40,866,000 and $54,375,000, respectively,
and the effect on pro forma net income and pro forma net income per share
would have been immaterial.

F-11
<PAGE>

ICT GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Information as of March 31, 1996 and for the three months
ended March 31, 1995 and 1996 is unaudited)

6. DEBT:

<TABLE>
<CAPTION>
December 31,
---------------------------
1994 1995
----------- ------------
<S> <C> <C>
Term loan due to bank, interest at prime plus 0.5%, principal payments
of $25,000 per month through September 1998 ......................... $ -- $ 825,000
Term loan due to bank, interest at prime plus 0.5%, principal payments
of $33,750 per month through July 1997 .............................. 1,046,250 641,250
----------- ------------
1,046,250 1,466,250
Less- Current portion ................................................. (405,000) (705,000)
----------- ------------
$ 641,250 $ 761,250
=========== ============
Future maturities of long-term debt are as follows at December 31, 1995:
1996 ................................................................. $ 705,000
1997 ................................................................. 536,250
1998 ................................................................. 225,000
------------
$1,466,250
============
</TABLE>

As of December 31, 1995, the Company was a party to loan agreements (the
"Agreements") with a bank which provided for a line of credit and two term
loans.

The line bears interest at the bank's prime rate plus 0.5% (9.0% at
December 31, 1995) and expires on June 30, 1996. The Company incurred
interest expense of $161,624, $267,314 and $472,632 at average interest rates
of 7.0%, 8.0% and 9.3% for the years ended December 31, 1993, 1994 and 1995,
respectively. The highest outstanding borrowing during 1995 was $7,256,188.
At December 31, 1994 and 1995, the Company had borrowed $3,354,157 and
$5,581,188 under the line of credit, respectively. Borrowings under the line
of credit are limited to 80% of eligible accounts receivable, as defined, and
at December 31, 1995, there was $815,000 available under the line.

The term loans and the line of credit are cross-collateralized and
cross-defaulted. The Company may, at any time, fix the interest rate on the
term loans at the bank's current fixed rate. If the fixed rate option is
selected, any principal prepayments could be subject to penalties, as
defined.

Borrowings under the Agreements are secured by substantially all of the
Company's assets and the outstanding common stock of the Company. In
addition, the borrowings have been guaranteed by the shareholders. Under the
more restrictive covenants of the Agreement, the Company is required to
maintain certain financial ratios and a specified level of net worth, as
defined, and payments of dividends, repurchases of stock, and repayments of
the subordinated notes are limited (see Note 8).

In April 1996, the Company entered into an Amended and Restated Loan
Agreement with its bank, which provides for a $15.0 million line of credit, a
$3.5 million equipment line of credit and a $1.5 million short-term loan.
Borrowings on the line of credit are limited to 80% of eligible accounts
receivable, as defined. The line bears interest at the bank's base rate, as
defined, and expires on June 30, 1997. The equipment line of credit is to be
used to finance 90% of the cost of equipment purchases. Individual borrowings
must be at least $200,000 and, once drawn, become, at the option of the bank,
three- to five-year term loans due in equal monthly installments. Borrowings
under the equipment line bear interest at either the bank's base rate or a
fixed rate set at the U.S. Treasuries Reference Rate plus 2.75%, at the
option of the Company. If the fixed rate option is selected, any principal
prepayments could be subject to penalties, as defined. The

F-12
<PAGE>
ICT GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Information as of March 31, 1996 and for the three months
ended March 31, 1995 and 1996 is unaudited)

6. DEBT: - (Continued)

$1.5 million loan bears interest at the bank's base rate and is due on November
30, 1996. The proceeds from the loan were advanced by the Company to its
shareholders in April 1996, in order to allow the shareholders to pay their 1995
and estimated 1996 income tax liabilities on the Company's taxable income.

In 1994, Eurotel entered into loan agreements with a local bank that
provided for a term loan of IRpounds sterling 325,000 and a line of credit of
IRpounds sterling 200,000, both of which expired in September 1995. At
December 31, 1994, Eurotel had no borrowings on the term loan and had
borrowed approximately $237,000 on the line of credit. Interest on the line
of credit is based upon the bank's prime rate. In December 1995, Eurotel
entered into a new line of credit for IRpounds sterling 525,000. The Company
had borrowed $619,964 as of December 31, 1995 on the line. Bank borrowings
are guaranteed by the shareholders of Eurotel based upon their respective
ownership interests.

7. CAPITALIZED LEASE OBLIGATIONS:

The Company leases certain equipment under capitalized leases. The
Company's weighted average interest rate was 10.0% for the year ended
December 31, 1995. Future minimum lease payments as of December 31, 1995 are
as follows:

1996 ................................... $ 962,420
1997 .................................... 748,485
1998 .................................... 505,607
1999 .................................... 427,816
2000 .................................... 240,370
------------
Total minimum lease payments ............ 2,884,698
Less- Amount representing interest ...... (504,709)
------------
Present value of minimum lease payments .. 2,379,989
Less- Current portion ................... (748,366)
------------
$1,631,623
============

8. SUBORDINATED NOTES:

Two notes totaling $300,000 at December 31, 1995 are due to a shareholder
of the Company and a partnership in which the Company's two major
shareholders are partners. The notes bear interest at 12%. All repayments are
subject to bank approval (see Note 6). At December 31, 1995, the Company has
both the ability and the intent of repaying $180,000 of the notes and,
therefore, that amount has been classified as a current liability.

9. PROFIT SHARING PLAN:

The Company maintains a trusteed profit sharing plan (Section 401(k) for
all qualified employees, as defined. The Company matches six percent of the
employee's contribution, however, it may also make additional contributions
to the plan based upon profit levels and other factors. No such additional
contributions were made in 1993, 1994 or 1995. Employees are fully vested in
their contributions, while full vesting for the Company's contributions
occurs upon death, disability, retirement or completion of five years of
service. In 1993, 1994 and 1995, the Company's contribution was $71,996,
$125,966 and $174,585, respectively. The plan's trustees are the management
of the Company.

10. EQUITY PLANS:

The Company has a stock option plan and an equity incentive plan which
provide for the granting of options and the award of units to purchase Common
Stock. As of March 31, 1996, 1,800,000 shares of common stock were reserved
for issuance under these plans, of which 679,950 shares were available for
future grants.

F-13
<PAGE>
ICT GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Information as of March 31, 1996 and for the three months
ended March 31, 1995 and 1996 is unaudited)

10. EQUITY PLANS: - (Continued)

STOCK OPTION PLAN

The Company has a stock option plan that reserves up to 1,800,000 shares
of Common Stock for issuance in connection with the exercise of incentive and
nonqualified stock options. The options to be granted and the option prices
are established by the Board of Directors or a committee composed of two or
more of its members. All stock options are granted at prices not less than
fair market value as determined by the Board or the committee, and are based
on independent third party appraisals. Incentive and nonqualified stock
options are exercisable for periods not to exceed ten years and ten years and
six months, respectively, from the date of grant.

In April 1987, the Company issued outside the plan an option to purchase
90,000 shares at an exercise price of $.04 per share. This option vests upon
a change in control of the Company, as defined, or upon an initial public
offering of the Company's Common Stock. Upon the closing of the Offering
contemplated herein, the option will vest, resulting in compensation expense
of approximately $1,436,000 (based on the offering price of $16.00
per share).

Information with respect to all outstanding options is as follows:

<TABLE>
<CAPTION>
Options Outstanding
--------------------------------------------
Aggregate Price
Shares Price Per Share
----------- ----------- ---------------
<S> <C> <C> <C>
Outstanding, December 31, 1992, 1993 and 1994 . 855,000 $ 38,140 $ .04 - $.06
Granted (January 1995) ..................... 146,250 149,013 $1.02
----------- ----------- ---------------
Outstanding, December 31, 1995 ............... 1,001,250 187,153 $ .04 - $1.02
Granted (January 1996) ..................... 49,500 77,935 $1.57
----------- ----------- ---------------
Outstanding, March 31, 1996 .................. 1,050,750 $265,088 $ .04 - $1.57
=========== =========== ===============
</TABLE>

At March 31, 1996, there were outstanding presently exercisable options to
purchase an aggregate of 833,400 shares at exercise prices ranging from $.04
- - $1.57 per share, with an aggregate exercise price of $109,602.

In January 1996, the Company issued options to employees and recorded
deferred compensation for the difference between the deemed value per share
for accounting purposes and the exercise price per share. The deferred
compensation will be amortized over the vesting period.

EQUITY INCENTIVE PLAN

In December 1995, the Company adopted an Equity Incentive Plan which
provides for the issuance of up to 270,000 Equity Incentive Units ("Units").
Upon vesting, each Unit allows the holder the right to purchase one share of
Common Stock at a specified price. Units vest only upon a change in control
of the Company, as defined, or upon an initial public offering of the
Company's Common Stock. Units are exercisable for a period not to exceed ten
years from the date of grant. In December 1995, the Company awarded 159,300
Units with a purchase price of $1.02 per Unit. Upon the closing of the
Offering contemplated herein, the Units will vest, resulting in compensation
expense of approximately $2,386,000 (based on the offering price of $16.00 per
share).

EXTENSION OF OPTION TERMS; EXPECTED COMPENSATION EXPENSE

In connection with the Offering, the Company will extend the exercise
period for options to purchase an aggregate of 555,750 shares to 2001 and
2002, resulting in compensation expense of approximately $8,867,000 (based on
the offering price of $16.00 per share). In addition, as described
above, the Units and the option to purchase 90,000 shares will vest upon the
closing of this Offering. These transactions in the aggre-

F-14
<PAGE>
ICT GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Information as of March 31, 1996 and for the three months
ended March 31, 1995 and 1996 is unaudited)

10. EQUITY PLANS: - (Continued)

gate will result in approximately $12,689,000 of compensation expense which will
be recorded in the quarter in which the Offering is completed.

11. COMMITMENTS AND CONTINGENCIES:

The Company leases facilities and certain equipment under operating leases.
Rent expense was $1,229,000 in 1993, $1,744,872 in 1994, and $2,529,856 in
1995. Future minimum rentals for all operating leases are as follows:

1996 .............................................. $2,173,773
1997 .............................................. 1,648,535
1998 .............................................. 1,269,675
1999 .............................................. 1,134,668
2000 .............................................. 783,160

The Company enters into agreements with its telephone long distance
carriers ranging from one to three years, which provide for, among other
things, annual minimum purchases and termination penalties. The annual
minimum purchases under such agreements total $3,450,000 in the aggregate.

From time to time, the Company is involved in certain legal actions
arising in the ordinary course of business. In the Company's opinion, the
outcome of such actions will not have a material adverse effect on the
Company's financial position, results of operations or liquidity.

The Company has renewable employment agreements with six key executives
with terms ranging from one to three years. The agreements provide for, among
other things, severance payments ranging from six months to three years.

F-15
<PAGE>

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ICT Group