ICT GROUP INC, S-1/A, 1996-05-14

ICT GROUP INC
S-1/A, 1996-05-14
BUSINESS SERVICES, NEC

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 14, 1996
REGISTRATION NO. 333-4150

===============================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
--------------------
Amendment No. 1
to
Form S-1
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
--------------------

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

Pennsylvania 7389 23-2458937
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification No.) Identification No.)
incorporation or
organization)

800 Town Center Drive
Langhorne, PA 19047
(215) 757-0200
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)

JOHN J. BRENNAN
Chairman, President and Chief Executive Officer
ICT Group, Inc.
800 Town Center Drive
Langhorne, PA 19047
(215) 757-0200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-------------------

Copies of all communications to:

STEPHEN M. GOODMAN KENNETH L. GUERNSEY
JAMES W. McKENZIE, JR. KARYN R. SMITH
Morgan, Lewis & Bockius LLP LAURA M. RANDALL
2000 One Logan Square Cooley Godward Castro Huddleson & Tatum
Philadelphia, PA 19103-6993 One Maritime Plaza, 20th Floor
(215) 963-5000 San Francisco, CA 94111
(415) 693-2000

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

Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement the same offering. [ ] ____________

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ___________

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

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

The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.

=============================================================================

<PAGE>
ICT GROUP, INC.
Cross-Reference Sheet
Pursuant to Item 501(b) of
Regulation S-K

<TABLE>
<CAPTION>
Item Number in Form S-1 Location in Prospectus
--------------------------------------------------- -------------------------------------------------------
<S> <C>
1. Forepart of Registration Statement and Outside
Front Cover Page of Prospectus ................ Outside Front Cover Page of Prospectus

2. Inside Front and Outside Back Cover Pages of
Prospectus .................................... Inside Front and Outside Back Cover Pages of Prospectus

3. Summary Information, Risk Factors and Ratio of
Earnings to Fixed Charges ..................... Summary; Risk Factors

4. Use of Proceeds ............................... Use of Proceeds

5. Determination of Offering Price ............... Outside Front Cover Page of Prospectus; Underwriting

6. Dilution ...................................... Risk Factors; Dilution

7. Selling Security Holders ...................... Principal and Selling Shareholders

8. Plan of Distribution .......................... Outside Front Cover Page of Prospectus; Underwriting

9. Description of Securities to be Registered ..... Outside Front Cover Page of Prospectus; Prior S
Corporation Status; Dividend Policy; Description of
Capital Stock

10. Interests of Named Experts and Counsel ........ Not Applicable

11. Information with respect to the Registrant .... Outside Front Cover Page of Prospectus; Summary; Prior
S Corporation Status; Dividend Policy; Selected
Consolidated Financial Data; Management's Discussion
and Analysis of Financial Condition and Results of
Operations; Business; Management; Certain Transactions;
Principal and Selling Shareholders; Description of
Capital Stock; Consolidated Financial Statements

12. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities.. Not Applicable

</TABLE>

<PAGE>

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.

SUBJECT TO COMPLETION, DATED MAY 14, 1996

LOGO

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. Prior to this offering, there has
been no public market for the Common Stock of the Company. It is currently
estimated that the initial public offering price will be between $12.00 and
$14.00 per share. 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.

<TABLE>
<CAPTION>
==============================================================================
Underwriting Proceeds to
Price to Discounts and Proceeds to Selling
Public Commissions Company(1) Shareholders
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------
Per Share ..... $ $ $ $
- ------------------------------------------------------------------------------
Total(2) ..... $ $ $ $
==============================================================================
</TABLE>
(1) Before deducting offering expenses payable by the Company, estimated at
$750,000.
(2) Certain shareholders of the Company have granted the Underwriters a
30-day option to purchase up to 375,000 additional shares of Common Stock
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 $ , $ and $ ,
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 , 1996.

Robertson, Stephens & Company Smith Barney Inc.

The date of this Prospectus is , 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 , 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 ........................................................................ 12
Prior S Corporation Status ............................................................. 12
Dividend Policy ........................................................................ 12
Capitalization ......................................................................... 13
Dilution ............................................................................... 14
Selected Consolidated Financial Data ................................................... 15
Management's Discussion and Analysis of Financial Condition and Results of Operations .. 16
Business ............................................................................... 22
Management ............................................................................. 33
Certain Transactions ................................................................... 44
Principal and Selling Shareholders ..................................................... 46
Description of Capital Stock ........................................................... 47
Shares Eligible for Future Sale ........................................................ 49
Underwriting ........................................................................... 50
Legal Matters .......................................................................... 51
Experts ................................................................................ 51
Additional Information ................................................................. 51
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.

2
<PAGE>

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 a leading independent provider of
call center teleservices, including 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 has
secured call center management contracts and is pursuing additional
opportunities to manage clients' call centers on a contract basis in order to
capitalize on a trend by businesses to outsource many of their internal
telephone sales, customer service and product support functions. The Company has
been 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.

The Company is recognized as one of the largest independent teleservices
organizations in the United States, 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 Advanta, Alpha
Software, Bertelsmann Music Group, Citibank, Greater Atlantic Health Service,
MBNA, MCI, Mass Marketing Insurance Group, J.C. Penney Life Insurance Company,
Providian, SmithKline Beecham, Sun Microsystems, TV Guide and the United States
Army.

Industry sources estimate that telemarketing industry expenditures in the
United States were approximately $77 billion in 1995, with all but a small
fraction of this spending being 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
<PAGE>
THE OFFERING

<TABLE>
<CAPTION>
<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.
Proposed Nasdaq National Market symbol ............. ICTG

</TABLE>

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

Three Months Ended
Year Ended December 31, March 31,
---------------------------------------------------------- -----------------------
1991 1992 1993 1994 1995 1995 1996
--------- --------- --------- --------- --------- -------- ---------
Statement of Operations
Data:
<S> <C> <C> <C> <C> <C> <C> <C>
Net revenues ........... $16,019 $17,502 $22,271 $34,123 $52,116 $9,294 $16,220
Operating income ....... 702 388 895 1,409 2,404 226 657
Net income before taxes . 336 50 569 898 1,570 62 424
Pro forma net income(2) . 903 254
Pro forma net income per
share(2) .............. $ .09 $ .03
Shares used in computing
pro forma net income
per share(2) .......... 9,697 9,697

</TABLE>

<TABLE>
<CAPTION>
March 31, 1996
--------------------------------------------
Pro Forma
Actual Pro Forma(3) As Adjusted(3)(4)
---------- ------------ ----------------
Balance Sheet Data:
<S> <C> <C> <C>
Working capital (deficit) ............................. $(2,484) $(5,078) $20,821
Total assets .......................................... 21,418 21,418 36,366
Long-term debt, less current maturities ............... 705 705 --
Capitalized lease obligations, less current maturities . 1,811 1,811 --
Shareholders' equity .................................. 4,294 658 29,073

</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 will terminate 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
<PAGE>

(4) Adjusted to give effect to the sale by the Company of 2,411,552 shares of
Common Stock offered hereby (at an assumed initial public offering price of
$13.00 per share) and the application of the net proceeds as set forth in
"Use of Proceeds."

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
to be effected prior to the completion of this offering, (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.

<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
together accounted for a majority of the Company's net revenues in 1995, 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 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

6
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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."

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
$10.3 million (based on an assumed initial public offering price of $13.00 per
share) in the quarter in which this offering is completed, expected to be the
second quarter of 1996. This charge relates to the granting of options to
replace certain previously granted options to provide for an extended option
period and the vesting of certain options upon the completion of this offering.
To the extent the initial public offering price is higher or lower than $13.00
per share, the charge will be more or less, respectively, than $10.3 million. 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 quarter in which this offering is
completed 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 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

7
<PAGE>

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 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 a
limited number of 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 any such contracts into which it has entered or 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."

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 and
telecommunications systems and the temporary or permanent loss 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 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

8
<PAGE>

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 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 limits the hours during which telemarketers may
call consumers and prohibits the use of automated telephone dialing equipment to
call certain telephone numbers. 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. Both the
FTC and state attorneys general have authority to prevent telemarketing
activities that constitute "unfair or deceptive acts or practices."
Additionally, some states have enacted laws and others are considering enacting
laws targeted directly at telemarketing practices, and there can be no assurance
that any such laws, if enacted, will not adversely affect or limit the Company's
current or future operation. 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 Company's employees who sell insurance
products are required to be licensed by various state insurance commissions 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. 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 Mr. Brennan. However, the proceeds received
from the life insurance policies would, in some cases, be split between the
Company and each such officer's estate and may not be sufficient to compensate
the Company for the loss of such officers' services, particularly with respect
to Mr. Brennan. The Company does not have non-competition agreements with its
key personnel. See "Management."

9
<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, 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 will be
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 to be 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.

10
<PAGE>

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 $10.54 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."

11
<PAGE>
USE OF PROCEEDS

The net proceeds to the Company from this offering are estimated to be $28.4
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 described below in "Prior S
Corporation Status." The remainder of the net proceeds will be used as follows:
approximately $13.3 million to repay estimated indebtedness as of June 30, 1996,
including approximately $210,000 to be repaid to affiliates, and, the balance
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 and
is not a party to any letter of intent or other agreement 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.

The Company's estimated bank indebtedness as of June 30, 1996 will consist of
facilities in the outstanding principal amounts of $8.5 million, $675,000 and
$439,000 which are due and payable in June 1997, September 1998 and July 1997,
respectively. The outstanding principal balances of these facilities accrue
interest at the bank's base rate, which was 8.25% at April 30, 1996. An
additional estimated $500,000 of the proceeds will be used by the Company to
repay Eurotel's total indebtedness to its local bank, 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. ICT will use an estimated $3.0 million of the proceeds to
repay all amounts owing on the Company's capitalized lease obligations, which
have a weighted average interest rate of 10% and maturities ranging from three
to five years. See "Certain Transactions" for a description of the indebtedness
to be repaid to affiliates. See 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 will terminate its S corporation status on a date (the
"Termination Date") immediately prior to the commencement of this offering. 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,
primarily to provide the shareholders with funds to pay their income tax
obligations.

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.

12
<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 (at
an assumed initial public offering price of $13.00 per share) 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.

<TABLE>
<CAPTION>
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 .............. 426 653 29,043
Deferred compensation ................... (109) (109) (109)
Retained earnings ....................... 3,863 -- --
Cumulative translation adjustment ....... 24 24 24
------ ------ -------
Total shareholders' equity ............. 4,294 658 29,073
------ ------ -------
Total capitalization ............... $6,810 $3,174 $29,073
====== ====== =======

</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 will convert to Common Stock
upon the completion of this offering.

13
<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 (at
an assumed initial public offering price of $13.00 per share) 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 $28,247,000, or $2.46
per share. This represents an immediate increase in pro forma net tangible book
value of $2.48 per share to existing shareholders and an immediate dilution in
pro forma net tangible book value of $10.54 per share to new shareholders
purchasing Common Stock in the offering. The following table illustrates this
per-share dilution.

<TABLE>
<CAPTION>
<S> <C> <C>
Assumed initial public offering price per share ......................... $13.00
Pro forma net tangible book value per share before the offering...... ($ .02)
Increase in pro forma net tangible book value per share attributable
to new shareholders .............................................. 2.48
-----
Pro forma net tangible book value per share after the offering....... 2.46
------
Dilution per share to new shareholders .................................. $10.54
======
</TABLE>

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 (at an assumed initial public offering price of $13.00 per share).

<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 1.3% $ .05
New shareholders ....... 2,411,552 21.0 31,350,176 98.7 13.00
------------ ----- ----------- ------
Total ................ 11,500,000 100.0% $31,759,172 100.0%
============ ===== =========== =====
</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."

14
<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)
Statement of Operations Data:
<S> <C> <C> <C> <C> <C> <C> <C>
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) ............. 9,697 9,697
======= =======
</TABLE>
<TABLE>
<CAPTION>
December 31, March 31, 1996
----------------------------------------- ---------------------------------------------
Pro Forma
1991 1992 1993 1994 1995 Actual Pro Forma(2) As Adjusted(2)(3)
------ ------ ------ ------ ------ -------- -------------- ------------------
(In thousands)
Balance Sheet Data:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Working capital (deficit) .. $ (511) $(398) $(461) $(462) $(1,601) $(2,484) $(5,078) $20,821

Total assets ............... 5,732 6,298 7,410 12,044 18,481 21,418 21,418 36,366

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 29,073
</TABLE>
- ------
(1) The Company has operated as an S corporation for income tax purposes since
its inception in 1987 and will terminate 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 (at an assumed initial public offering price of
$13.00 per share) and the application of the net proceeds as set forth in
"Use of Proceeds."

15
<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 a leading independent provider of call center teleservices, including
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, to provide
multilingual pan-European telemarketing sevices. 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"), a company that is
controlled and 49% owned by the Company and 51% owned by two Canadian nationals
otherwise unaffiliated with the Company.

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.

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.

16
<PAGE>
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.

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.

17
<PAGE>
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.

18
<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 in
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-

19
<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 $10.3 million (based on an assumed public
offering price of $13.00 per share) in the quarter in which this offering is
completed, expected to be 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. To the extent that the initial
public offering price is higher or lower than $13.00 per share, the amount of
this compensation expense will be more or less, respectively, than $10.3
million. 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
$303,000, $471,000 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
$787,000, $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

20
<PAGE>

income tax liabilities on the Company's taxable income, which, due to the
Company's 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."

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.

<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 a leading independent provider of call center teleservices,
including 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 has secured call
center management contracts and is pursuing additional opportunities to manage
clients' call centers on a contract basis in order to capitalize on a trend by
businesses to outsource many of their internal telephone sales, customer service
and product support functions. The Company has been 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.

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. Industry sources estimate that telemarketing industry expenditures in
the United States grew to approximately $77 billion by 1995. All but a small
fraction of this spending was estimated to be 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, 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.

22
<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 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 entered into 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.

23
<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 9000, 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.

24
<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.

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.

25
<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 provide value-added marketing and consulting services to businesses
in its target industries. For example, the Company's acquisition of Smartline
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 revenues for the first quarter of 1996
represented approximately one-third of the increase in the Company's revenues
from the first quarter of 1995 to the first quarter of 1996. 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 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. 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 a limited number of
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.

26
<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>

27
<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.

28
<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.

The Company utilizes a scalable set of UNIX processors to support its
outbound and inbound call center operations. 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.

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.

29
<PAGE>
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 towards compliance with ISO 9000, a quality standard which
the Company plans to implement 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.

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 ini-

30
<PAGE>

tiated. 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. 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."

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. A number of states have enacted legislation and
other states are considering enacting legislation to regulate telemarketing. 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.

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 employees who complete the sale of insurance products are required
to be licensed by various state insurance commissions 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

31
<PAGE>

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 or financial condition, if decided adversely to the
Company.

32
<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.

33
<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. The Company's Board of Directors
intends to appoint an additional independent director within 90 days after the
completion of this offering.

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.

34
<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.

<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
Number of at Assumed Annual
Securities Percent of Rates of Stock Price
Underlying Total Options Appreciation for
Options Granted to Option Term(3)
Granted Employees in Exercise Price Expiration ---------------------
Name (#)(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 in the event of an initial public
offering, the options become fully vested.

(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 assumed 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.

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.

FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
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 -- $4,664,000 --
John D. Campbell . 139,500 18,000 1,802,775 $215,660
Maurice J. Kerins . 139,500 18,000 1,802,915 215,660
Carl E. Smith .... 4,500 18,000 53,915 215,660
</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
an assumed initial public offering price of $13.00 per share minus the
applicable per-share exercise price.

36
<PAGE>

Replacement Options. In April 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
may be increased, but not decreased, by the board in its sole discretion,
participation in the Company's bonus plans at minimum levels consistent with
those of other senior executives and that Mr. Brennan be eligible to receive
options under the Company's option plans. 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

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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 of Directors of the Company (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.

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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 Stock Option
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 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.

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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 and is 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.

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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.

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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 of Directors of the Company 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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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.

<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 a loan agreement (the "Loan Agreement") whereby the lender
(the "Bank") (i) made available lines of credit in the amounts of $15,000,000
and $1,500,000, (ii) advanced a $3,500,000 equipment loan facility and (iii)
advanced loans in the 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 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.

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 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.

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 Company 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

44
<PAGE>

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.

Loan to Shareholders. In April 1996, pursuant to the 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. 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 30, 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
Loan Agreement, the Shareholders' Note has been assigned to the Bank.

45
<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 April 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 and
directors 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 Owned Number of Shares Beneficially 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
April 1, 1996. In addition, shares underlying options to purchase Common
Stock that are exercisable upon the completion of this offering, as set
forth below, 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. 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. 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.

46
<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. As of the date of this Prospectus, the Company had
4,500,000 shares of Series A Common Stock, 4,500,000 shares of Series B Common
Stock and no shares of Preferred Stock outstanding. 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 with or without cause
only upon the vote of the holders of a majority of the shares of Common Stock
then entitled to vote.

Additionally, the authority of the Company's 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.

47
<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.

48
<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.

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.

49
<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. .
Smith Barney Inc. .................

---------
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 $ per share. The Underwriters may allow, and such dealers may re-allow, a
concession not in excess of $ 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 will be determined by negotiations between the Company and the
Representatives. Among the factors to be considered in such negotiations will be
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.

50
<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.

<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>

After the common stock split and the change in the authorized number of
common shares are effected, as described in Note 2 to the Consolidated
Financial Statements, we will render the following report.

ARTHUR ANDERSEN LLP
April 26, 1996

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.

Philadelphia, Pa.,

F-2
<PAGE>
ICT GROUP, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

March 31, 1996
December 31, ------------------------------
-------------------------------- 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 ............................... 310,000 310,000 426,215 652,884
Deferred compensation .................................... -- -- (108,950) (108,950)
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 ............ $ 1,570,059 $ 423,757
Pro forma provision for income
taxes .......................... 667,275 170,011
-------------- -------------
Pro forma net income ............. $ 902,784 $ 253,746
============== =============
Pro forma net income per share ... $ .09 $ .03
============== =============
Shares used in computing pro forma
net income per share .......... 9,696,746 9,696,746
============== =============
Supplemental pro forma net income
per share ...................... $ .13 $ .04
============== =============
Shares used in computing
supplemental pro forma net income
per share ....................... 10,732,625 10,732,625
============== =============

</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>

ICT GROUP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<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) ......... 116,215 (116,215) -- -- --
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) ....... $426,215 $(108,950) $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 ..... (786,854) (960,700) (2,372,873) (692,226) (1,259,380)
Payments for business acquisitions ...... -- (486,168) (468,487) -- --
----------- ------------- ------------- ----------- -------------
Net cash used in investing
activities...................... (786,854) (1,446,868) (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 capital lease financing ... 100,000 -- -- -- --
Proceeds from repayment of note
receivable from customer ............. 90,000 47,000 -- -- --
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 .................... 303,140 471,174 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 Group, Inc.
and Eurotel (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. and Eurotel. 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 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.

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.

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.

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)

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

December 31,
-------------------------------------
1994 1995
------------ -------------
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
========== ==========

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
December 31,
-------------------------------------
1994 1995
------------- ------------
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
============= ============
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).

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

Immediately prior to or upon the effective date of the Company's initial
public offering ("Offering") contemplated by this Prospectus, the Company will
effect a nine-for-one stock split in the form of a stock dividend, reclassify
its Class A common stock and Class B common stock as common stock, authorize
5,000,000 shares of undesignated preferred stock and increase 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.

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)

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
approximately 18.5%, 14.1% and 22.3%, 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 Offering (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 operations 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:

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)
=============

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)

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:

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%
=====

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 an
estimated Offering price of $13.00 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 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.

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)

4. EUROTEL: - (Continued)

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.

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>

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: - (Continued)

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 $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.

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)

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:

<TABLE>
<CAPTION>
<S> <C>
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
============

</TABLE>

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.

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.

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)

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 $1,166,000 (based on an estimated offering price of $13.00 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 four-year 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 $1,909,000 (based on an estimated offering price of
$13.00 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 2002 and 2003,
resulting in compensation expense of approximately $7,200,000 (based on an
estimated offering price of $13.00 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 aggregate will result in approximately
$10,275,000 of compensation expense which will be recorded in the quarter in
which the Offering is completed. To the extent the offering price is higher or
lower than $13.00 per share, the amount of compensation expense will be
adjusted.

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)

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:

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.

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 or results of operations.

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>

LOGO

<PAGE>
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table shows all expenses of the issuance and distribution of
the securities offered hereby, other than underwriting discounts and
commissions:*

<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission filing fee ............ $ 12,849
National Association of Securities Dealers, Inc. filing
fee .................................................... 4,226
Nasdaq listing fee ....................................... 46,750
Transfer agent's and registrar's fees .................... 5,000
Printing expenses ........................................ 125,000
Legal fees ............................................... 200,000
Accounting fees and expenses ............................. 230,000
Blue sky filing fees and expenses (including counsel fees). 15,000
Miscellaneous expenses ................................... 111,175
---------
Total .................................................. $750,000
=========
</TABLE>

- ------
*The Securities and Exchange Commission filing fee, National Association of
Securities Dealers, Inc. filing fee and Nasdaq listing fee are exact. All other
amounts are estimates. All of the above expenses will be paid by the Company.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Underwriting Agreement, filed as Exhibit 1 hereto, provides that each of
the Underwriters will indemnify the directors and officers of the Company
against certain liabilities, including liabilities under the Securities Act of
1933, as amended (the "Act").

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

Not applicable.

II-1
<PAGE>

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits:

<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
1* Form of Underwriting Agreement.

3.1* Articles of Incorporation.

3.2* Bylaws.

5* Opinion of Morgan, Lewis & Bockius LLP regarding legality of securities being registered.

10.1+ ICT Group, Inc. 1987 Stock Option Plan.

10.2+ ICT Group, Inc. Equity Incentive Plan.

10.3* ICT Group, Inc. 1996 Equity Compensation Plan.

10.4* ICT Group, Inc. 1996 Non-Employee Directors Plan.

10.5* Employment Agreement between John J. Brennan and the Company, dated May 8, 1996.

10.6* Employment Agreement between Carl E. Smith and the Company, dated October 3, 1994, as amended.

10.7+ Employment Agreement between John L. Magee and the Company, dated April 1, 1987.

10.8+ Employment Agreement between John D. Campbell and the Company, dated October 1, 1987.

10.9+ Employment Agreement between Maurice J. Kerins and the Company, dated April 1, 1987.

10.10+ Employment Agreement between Robert F. Small and the Company, dated April 1, 1987.

10.11+ Voting Trust Agreement among John J. Brennan, Donald P. Brennan and the Company, dated
February 2, 1996.

10.12+ Shareholders Agreement among John J. Brennan, Donald P. Brennan and the Company, dated
February 2, 1996.

10.13+ Form of Voting Agreement between the Company and certain option holders.

10.14+ Amended and Restated Loan Agreement between the Company and First Valley Bank, dated
April 11, 1996.

10.15+ 12% Promissory Note issued to Donald P. Brennan, dated March 31, 1987.

10.16+ 12% Promissory Note issued Passage East Partnership, dated April 9, 1987.

10.17* Amendment No. 1 to Voting Trust Agreement among John J. Brennan, Donald P. Brennan and the
Company, dated May 9, 1996.

11.1 Net Income Per Share Calculation.

23.1 Consent of Arthur Andersen LLP.

23.2* Consent of Morgan, Lewis & Bockius LLP (included in its opinion filed as Exhibit 5 hereto).

24 Powers of Attorney (included as part of the signature page hereof).
</TABLE>

- ------
* To be filed by amendment
+ Previously filed

(b) Financial Statement Schedules:

Schedule II -- Valuation and Qualifying Accounts

II-2
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment No. 1 to Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in Langhorne,
Pennsylvania, on May 13, 1996.

ICT Group, Inc

By: /s/ Carl E. Smith
------------------------------
Carl E. Smith
Senior Vice President,
Finance and Administration,
Chief Financial Officer and Secretary

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
John J. Brennan* Chairman, President
- ----------------------- Chief Executive Officer and Director
John J. Brennan (principal executive officer)

Donald P. Brennan* Director
- -----------------------
Donald P. Brennan

/s/ Carl E. Smith Senior Vice President, Finance May 13, 1996
- ----------------------- and Administration, Chief
Carl E. Smith Financial Officer (principal
financial and accounting officer)
and Secretary

*By: /s/ Carl E. Smith May 13, 1996
-----------------
Attorney-in-fact
</TABLE>

II-3
<PAGE>

After the common stock split and the change in the authorized number of
common shares are effected, as described in Note 2 to the Consolidated Financial
Statements, we will render the following report.

ARTHUR ANDERSEN LLP
April 26, 1996

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE

To ICT Group, Inc.:

We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements of ICT Group, Inc. and Subsidiary included in
this Registration Statement and have issued our report thereon dated ------
- ------ , 1996. Our audit was made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The schedule listed in Item 15(b)
of the Registration Statement is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.

ARTHUR ANDERSEN LLP

Philadelphia, Pa.,

S-1
<PAGE>
ICT GROUP, INC. AND SUBSIDIARY

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

THREE YEARS ENDED DECEMBER 31, 1995

Balance
Beginning of Charged to Balance,
Description Year Expense Deductions End of Year
--------------------------------- -------------- ------------ -------------- -------------
<S> <C> <C> <C> <C>
Allowances for doubtful accounts:
1993 ....................... $361,776 $395,865 $(296,430) $461,211
1994 ....................... 461,211 336,621 (197,141) 600,691
1995 ....................... 600,691 547,166 (936,084)(a) 211,773
</TABLE>

- ------
(a) Includes $554,051 of write-offs related to a service no longer offered by
the Company.

S-2
<PAGE>
EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
Number Description Page No.
- ------- ----------- --------
<S> <C> <C>
1* Form of Underwriting Agreement.

3.1* Articles of Incorporation.
3.2* Bylaws.

5* Opinion of Morgan, Lewis & Bockius LLP regarding legality of securities being registered.

10.1+ ICT Group, Inc. 1987 Stock Option Plan.

10.2+ ICT Group, Inc. Equity Incentive Plan.

10.3* ICT Group, Inc. 1996 Equity Compensation Plan.

10.4* ICT Group, Inc. 1996 Non-Employee Directors Plan.

10.5* Employment Agreement between John J. Brennan and the Company, dated
May 8, 1996.

10.6* Employment Agreement between Carl E. Smith and the Company, dated October 3, 1994,
as amended.

10.7+ Employment Agreement between John L. Magee and the Company, dated April 1, 1987.

10.8+ Employment Agreement between John D. Campbell and the Company, dated October 1, 1987.

10.9+ Employment Agreement between Maurice J. Kerins and the Company, dated April 1, 1987.
10.10+ Employment Agreement between Robert F. Small and the Company, dated April 1, 1987.

10.11+ Voting Trust Agreement among John J. Brennan, Donald P. Brennan and the Company, dated
February 2, 1996.

10.12+ Shareholders Agreement among John J. Brennan, Donald P. Brennan and the Company, dated
February 2, 1996.

10.13+ Form of Voting Agreement between the Company and certain option holders.

10.14+ Amended and Restated Loan Agreement between the Company and First Valley Bank, dated
April 11, 1996.

10.15+ 12% Promissory Note issued to Donald P. Brennan, dated March 31, 1987.

10.16+ 12% Promissory Note issued Passage East Partnership, dated April 9, 1987.

10.17* Amendment No. 1 to Voting Trust Agreement among John J. Brennan, Donald P. Brennan
and the Company, dated May 9, 1996.

11.1 Net Income Per Share Calculation.

23.1 Consent of Arthur Andersen LLP.

23.2* Consent of Morgan, Lewis & Bockius LLP (included in its opinion filed as Exhibit 5
hereto).

24 Powers of Attorney (included as part of the signature page hereof).

</TABLE>

- ------
* To be filed by amendment
+ Previously filed

<PAGE>
EXHIBIT 11.1
ICT GROUP, INC. AND SUBSIDIARY
PRO FORMA AND SUPPLEMENTAL PRO FORMA
NET INCOME PER SHARE CALCULATION

<TABLE>
<CAPTION>
Year Ended Three Months Ended
December 31, 1995 March 31, 1996
----------------- ------------------
<S> <C> <C>
Pro forma net income per share
Pro forma net income ................................... $ 902,784 $ 253,746
=========== ===========
Weighted average shares outstanding .................... 9,000,000 9,000,000
Dilutive effect of outstanding options, net of
tax benefit............................................ 696,746 696,746
----------- -----------
Shares used in computing pro forma net income per share 9,696,746 9,696,746
=========== ===========
Pro forma net income per share ......................... $ .09 $ .03
=========== ===========
Supplemental pro forma net income per share
Pro forma net income ................................... 902,784 253,746
Reduction in interest expense, net of tax .............. 496,673 139,043
---------- -----------
Supplemental pro forma net income ...................... $ 1,399,457 $ 392,789
=========== ===========
Shares used in computing pro forma net income per share 9,696,746 9,696,746
Assumed payment of S Corporation distribution and
repayment of bank debt, capitalized lease obligations
and subordinated debt ................................. 1,035,879 1,035,879
----------- -----------
Shares used in computing supplemental pro forma net
income per share ...................................... 10,732,625 10,732,625
=========== ===========
Supplemental pro forma net income per share ............ $ .13 $ .04
=========== ===========

</TABLE>

<PAGE>
EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our reports
and to all references to our Firm included in or made a part of this S-1
Registration Statement.

ARTHUR ANDERSEN LLP

Philadelphia, PA
May 13, 1996

<PAGE>

<ARTICLE> 5
<CIK> 0001013149
<NAME> ICT GROUP, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS

<S> <C> <C>
<PERIOD-TYPE> YEAR 3-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1996
<PERIOD-START> JAN-01-1995 JAN-01-1996
<PERIOD-END> DEC-31-1995 MAR-31-1996
<EXCHANGE-RATE> 1 1
<CASH> 447,206 3,398
<SECURITIES> 0 0
<RECEIVABLES> 9,192,405 10,982,435
<ALLOWANCES> 211,773 252,258
<INVENTORY> 0 0
<CURRENT-ASSETS> 10,431,797 12,021,282
<PP&E> 13,901,379 15,635,825
<DEPRECIATION> 7,038,754 7,574,977
<TOTAL-ASSETS> 18,480,743 21,417,718
<CURRENT-LIABILITIES> 12,032,732 14,504,851
<BONDS> 0 0
0 0
0 0
<COMMON> 90,000 90,000
<OTHER-SE> 3,753,034 4,204,276
<TOTAL-LIABILITY-AND-EQUITY> 18,480,743 21,417,718
<SALES> 0 0
<TOTAL-REVENUES> 52,115,819 16,219,586
<CGS> 0 0
<TOTAL-COSTS> 28,638,687 8,767,130
<OTHER-EXPENSES> 20,526,424 6,754,147
<LOSS-PROVISION> 547,166 41,220
<INTEREST-EXPENSE> 833,483 233,332
<INCOME-PRETAX> 1,570,059 423,757
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 1,570,059 423,757
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 1,570,059 423,757
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0

</TABLE>