SPR INC, S-1/A, 1997-01-08

SPR INC
S-1/A, 1997-01-08
COMPUTER PROGRAMMING, DATA PROCESSING, ETC.

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<PAGE> 1

As filed with the Securities and Exchange Commission on January 8, 1997

Registration No. 333-16421

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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1

FORM S-1
REGISTRATION STATEMENT

under
THE SECURITIES ACT OF 1933
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SPR INC.
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C> <C>
DELAWARE 7370 36-3932665
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification
incorporation or organization) Classification Code No.) No.)
</TABLE>

2015 SPRING ROAD, SUITE 750, OAK BROOK, ILLINOIS 60521 (630) 990-2040
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(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)

ROBERT M. FIGLIULO
PRESIDENT
SPR INC.
2015 SPRING ROAD, SUITE 750, OAK BROOK, ILLINOIS 60521 (630) 990-2040
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(Name, address, including zip code, and telephone number, including area code,
of agent for service)

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Copies to:

<TABLE>
<S> <C>
DONALD E. FIGLIULO CHARLES EVANS GERBER
JOHN E. MCGOVERN, JR. WILLIAM M. HOLZMAN
WILDMAN, HARROLD, ALLEN & DIXON NEAL, GERBER & EISENBERG
225 WEST WACKER DRIVE TWO NORTH LASALLE STREET
CHICAGO, ILLINOIS 60606-1229 CHICAGO, ILLINOIS 60602
(312) 201-2000 (312) 269-8000
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE OF THE SECURITIES TO
THE PUBLIC: As soon as practicable after this Registration Statement becomes
effective.

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, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for 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 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. [ ]

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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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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- --------------------------------------------------------------------------------
<PAGE> 2

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 JANUARY 8, 1997

PROSPECTUS

2,700,000 SHARES

SPR LOGO
SPR INC.

COMMON STOCK
------------------

Of the 2,700,000 shares of common stock, par value $.01 per share (the
"Common Stock"), offered hereby (the "Offering"), 1,666,666 shares are being
offered by SPR Inc. ("SPR" or the "Company") and 1,033,334 shares are being
offered by certain stockholders (the "Selling Stockholders"). See "Principal and
Selling Stockholders." The Company will not receive any of the proceeds from the
sale of shares of Common Stock by the Selling Stockholders.

Prior to the 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 $14.00 and $16.00 per share. See "Underwriting" for information
relating to the factors to be considered in determining the initial public
offering price. Application has been made to have the Common Stock listed on the
Nasdaq National Market under the symbol "SPRI."
------------------

SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE 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>
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- --------------------------------------------------------------------------------------------------

UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND PROCEEDS TO SELLING
PUBLIC COMMISSIONS(1) COMPANY(2) STOCKHOLDERS
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<S> <C> <C> <C> <C>
Per Share $ $ $ $
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Total(3) $ $ $ $
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</TABLE>

(1) For information regarding indemnification of the Underwriters, see
"Underwriting."
(2) Before deducting expenses estimated at $700,000, all of which are payable by
the Company.
(3) Certain Selling Stockholders have granted the Underwriters a 30-day option
to purchase up to 405,000 additional shares of Common Stock solely to cover
over-allotments, if any. See "Underwriting." If such option is exercised in
full, the total Price to Public, Underwriting Discounts and Commissions,
Proceeds to Company and Proceeds to Selling Stockholders will be $ ,
$ , $ and $ , respectively. See "Underwriting" and "Principal
and Selling Stockholders."
------------------

The shares of Common Stock are being offered by the several Underwriters
named herein, subject to prior sale, when, as and if accepted by them and
subject to certain conditions. It is expected that certificates for the shares
of Common Stock offered hereby will be available for delivery on or about
February , 1997 at the office of Smith Barney Inc., 333 West 34th Street, New
York, New York 10001.

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SMITH BARNEY INC. ROBERT W. BAIRD & CO.
INCORPORATED
, 1997
<PAGE> 3

INSIDE FRONT COVER OF PROSPECTUS

The inside front cover is a multicolor graphic and text layout. The following
text appears above the graphics:

"SPR SERVICES

SPR blends three levels of consulting support into five service offerings to
provide a comprehensive solution for maintaining, improving, and transitioning
existing systems. This blend of consulting support enables SPR to design a
customized solution, tailored to meet each client's individual needs."

[Graphics consist of a flow diagram depicting SPR's blend of three levels of
consulting support into five service offerings.]

The following text appears below the graphics:

"SPR delivers these customized solutions through a combination of experienced
people, using proprietary and commercially available tools, following an
established methodology. When applied with their service offerings, this
formula enables SPR to deliver high quality, innovative solutions designed to
help companies derive maximum value from their existing systems."

[The SPR logo inside a triangle containing the words "People," "Tools" and
"Methodology" appears in the lower left corner below a page curl.]

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

<PAGE> 4

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and the financial statements
and related notes thereto appearing elsewhere in this Prospectus. SPR Inc.
("SPR" or the "Company") is a Delaware corporation recently organized in
connection with the mergers into it of SPR Chicago Inc., an Illinois corporation
("SPR Chicago"), Systems & Programming Resources of Tulsa, Inc., an Oklahoma
corporation ("SPR Tulsa"), SPR-Wisconsin, Inc., a Wisconsin corporation ("SPR
Wisconsin"), Systems and Programming Resources, Inc., an Illinois corporation
("Systems Inc."), and Consulting Acquisition, Inc., an Illinois corporation
("Data Flex"). Such mergers are each individually referred to in this Prospectus
as a "Merger" and collectively as the "Mergers." Unless indicated otherwise, the
information contained in this Prospectus: (i) gives retroactive effect to the
Mergers and (ii) assumes that the Underwriters' over-allotment option is not
exercised. Unless otherwise indicated, all references to "SPR" or the "Company"
refer to SPR Inc. after the Mergers or to the constituent corporations in the
Mergers or their respective predecessors, as appropriate. See "Certain
Transactions."

THE COMPANY

SPR has over 23 years of experience in providing information technology
("IT") services to clients in a variety of industries, including financial
services, healthcare, insurance, manufacturing, oil and gas, transportation and
utilities. The Company focuses its marketing efforts on Fortune 1000 companies
and other large organizations which have complex IT operations and significant
IT budgets. Over the past several years, the Company has shifted its focus from
contract programming to strategic planning and project management engagements.
SPR currently provides the following service offerings: (i) General Consulting,
(ii) Systems Re-engineering, (iii) Century Date Compliance, (iv) Systems
Maintenance and Support and (v) Information Delivery Services ("IDS"). Within
each of these service offerings, the Company provides three levels of consulting
support which are distinguished by the degree of responsibility the Company
assumes: strategic planning, project management and implementation. The Company
believes that this breadth of service and support fosters long-term client
relationships, promotes cross-selling opportunities and minimizes the Company's
dependence upon any particular service offering or client.

The Company's proprietary service methodologies, Renovation(SM) and
Renovation2000(SM), and its software analysis tool, CodeVu(SM), provide SPR with
a disciplined approach to fulfill its engagements. Renovation(SM) and
Renovation2000(SM) enable the Company to deliver its service offerings through a
tested and repeatable format. CodeVu(SM) quickly and accurately provides
information concerning client software portfolios. These service methodologies
coupled with this software analysis tool facilitate the development of
well-defined tasks and timetables for each phase of an engagement from strategic
planning through implementation.

Due to the complex nature of information technology, the rapidly changing
technological environment and the year 2000 problem (the software glitch that
will prevent computers from properly recognizing dates after the year 1999),
many organizations are outsourcing their IT needs. The Company believes this
outsourcing trend will continue to grow because: (i) organizations desire to
focus their energies on their core business functions; (ii) organizations must
address and resolve the year 2000 problem; (iii) IT solutions are becoming
increasingly complex; and (iv) organizations often lack the IT skills necessary
to address their IT needs.

Total expenditures for professional IT services in the United States are
estimated to be $54.1 billion in 1996. The professional IT services market,
consisting of consulting and education, systems integration and development and
systems management services, is expected to grow at a compound annual growth
rate of approximately 14% over the next three years, reaching $79.6 billion by
1999. Large organizations, which make up the Company's primary target market,
are expected to constitute approximately 46% of total expenditures in this
market in 1996. The estimated cost in the United States to correct the year 2000
problem associated with software and databases is expected to be approximately
$130 billion.

3
<PAGE> 5

The Company's objective is to become the leading IT service provider to
both new and existing clients. To achieve this objective, the Company has
pursued, and intends to continue to pursue, the following business and growth
strategies:

- Focus on Project Management. The Company will continue to focus on
increasing its mix of project management and strategic planning
engagements. The Company believes that by providing these value-added
services, it gains a competitive advantage in assessing its clients' needs
and anticipating opportunities to provide additional IT services.

- Attract, Develop and Retain Qualified Technical Consultants. The Company
has implemented a comprehensive entry-level training program for college
graduates to address the industry-wide shortage of qualified technical
consultants. In addition, the Company is developing several other training
programs to further enhance its consultants' careers and improve their
technical skills. SPR believes that these training programs and its
recently established stock option and stock purchase plans will help it to
attract, develop and retain consultants.

- Capitalize on Century Date Compliance Expertise. SPR was an early entrant
in the year 2000 segment of the market, completing its first Century Date
Compliance engagement in 1993. The Company believes that its expertise in
addressing the year 2000 problem will not only result in additional
engagements, but that such engagements also will provide SPR with insight
into its clients' IT environments, resulting in a competitive advantage in
cross-selling additional IT services.

- Deliver Unbiased Service Offerings. The Company uses Renovation(SM),
Renovation2000(SM) and CodeVu(SM) in conjunction with the best available
third-party application software and productivity tools without regard to
specific third-party vendor relationships. The ability to assess client
systems objectively enables the Company to provide its clients with
technologies that are best suited to their individual needs.

- Focus on Leading Technologies. The Company maintains and continues to
build expertise not only in mainframe applications but also in other high
demand technologies, such as Internet/intranet applications, open
computing systems, object oriented solutions and relational database
management systems. The Company's expertise in these areas, together with
its relationships with software product developers and research
institutions, allow SPR to remain on the leading edge of technological
development.

- Leverage Existing Client Base and Expand Client Services. The Company
intends to continue building long-term client relationships by developing
and expanding the services it provides to existing clients in response to
its clients changing IT service needs. For example, in 1995 the Company
began the development of its IDS service offering and in 1996 established
its first Virtual Insourcing Center, which enables the Company to provide
the full range of its service offerings in a Company facility rather than
at its clients' facilities.

SPR's growth strategies have allowed it to capitalize on the growing demand
for IT services. The Company's revenues have increased at a compound annual
growth rate of approximately 36% from 1992 through 1995. For the ten months
ended October 31, 1996, the Company's revenues increased 44% compared with the
same period in the prior year. More than 71% of the Company's revenues for the
ten months ended October 31, 1996 were attributable to 37 companies which have
been clients for three consecutive years or longer. During 1996, the Company has
made significant infrastructure investments, which adversely affected the
Company's gross profit and operating income, in order to satisfy anticipated
future demand for the Company's service offerings. These investments included
(i) the development and implementation of the Company's entry-level training
program, (ii) the hiring of 235 IT consultants, 20 project managers, seven
recruiters, a Chief Financial Officer and a General Manager for the Company's
Texas branch office, (iii) the establishment of, and initial staffing to
support, the IDS service offering, (iv) the leasing of new office space in
Chicago and Wisconsin and (v) the enhancement of the Company's proprietary
methodologies and software analysis tool.

4
<PAGE> 6

THE OFFERING

<TABLE>
<S> <C>
Common Stock Offered Hereby by:
The Company............................. 1,666,666 shares
The Selling Stockholders................ 1,033,334 shares
Common Stock to Be Outstanding After the
Offering................................ 8,000,000 shares(1)
Use of Proceeds........................... Pay dividends to enable the existing
stockholders to pay income taxes due on S
corporation income through the closing date of
the Offering, pay certain indebtedness, fund
build-out and equipping of an additional Virtual
Insourcing Center, open a Texas branch office,
expand the Company's entry-level recruiting and
training program and for general corporate
purposes. See "Use of Proceeds."
Proposed Nasdaq National Market Symbol.... SPRI
</TABLE>

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(1) Excludes (i) 800,000 shares of Common Stock reserved for issuance upon
exercise of options granted and to be granted pursuant to the Company's
Combined Incentive and Non-statutory Stock Option Plan (of which options to
purchase 442,000 shares of Common Stock are outstanding at an exercise price
of $14.00 per share); and (ii) 500,000 shares reserved for issuance under
the Company's Employee Stock Purchase Plan. See "Management -- Stock Plans,"
"Description of Capital Stock" and Note 11 of Notes to Financial Statements.

5
<PAGE> 7

SUMMARY FINANCIAL DATA

<TABLE>
<CAPTION>
TEN MONTHS ENDED
YEARS ENDED DECEMBER 31, OCTOBER 31,
------------------------------------------------- ----------------------
1991 1992 1993 1994 1995 1995 1996
------ ------ ------- ------- -------- -------- --------
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA(1):
Revenues...................... $7,914 $9,122 $11,731 $14,797 $ 22,908 $ 18,478 $ 26,575
Gross profit.................. 2,079 2,218 3,393 4,373 7,383 6,110 7,839
Selling expenses............ 607 743 1,012 1,165 2,141 1,668 2,447
Recruiting expenses......... 234 290 341 410 777 613 1,090
Stock-based compensation.... -- -- -- 6,510(2) 27,987(2) 23,322(2) 15,885(2)
General and administrative
expenses.................. 1,157 1,015 1,230 1,334 1,642 1,170 2,798
------ ------ ------- ------- -------- -------- --------
Total costs and expenses...... 1,998 2,048 2,583 9,419 32,547 26,773 22,220
------ ------ ------- ------- -------- -------- --------
Operating income (loss)....... 81 170 810 (5,046)(2) (25,164)(2) (20,663)(2) (14,381)(2)
Other income (expense)........ (162) 27 6 (57) (109) (89) (52)
------ ------ ------- ------- -------- -------- --------
Income (loss) before income
taxes....................... (81) 197 816 (5,103)(2) (25,273)(2) (20,752)(2) (14,433)(2)
Provision for income taxes.... -- 15 4 75 21 -- --
------ ------ ------- ------- -------- -------- --------
Net income (loss), as
reported(3)................. $ (81) $ 182 $ 812 $(5,178)(2) (25,294)(2) $(20,752)(2) (14,433)(2)
====== ====== ======= ======= ========
Pro forma provision for income
taxes(3).................... 1,065 581
-------- --------
Pro forma net (loss)(3)....... $(26,359) $(15,014)
======== ========
Pro forma net (loss) per
share(3)(4)................. $ (4.05) $ (2.31)
======== ========
Weighted average common shares
outstanding(4).............. 6,512,545 6,512,545
</TABLE>

<TABLE>
<CAPTION>
OCTOBER 31,
1996
-----------
<S> <C>
BALANCE SHEET DATA(1):
Cash.................................................................................... $ 633
Working capital......................................................................... 1,743
Total assets............................................................................ 6,787
Long-term debt, less current portion.................................................... 189
Total stockholders' equity.............................................................. 2,926(2)
</TABLE>

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(1) In October 1996, Systems Inc., SPR Chicago, SPR Tulsa, SPR Wisconsin and
Data Flex merged into SPR and, in connection therewith, the stockholders of
such companies received an aggregate of 6,333,134 shares of Common Stock of
SPR. The financial data above has been restated to include the financial
position and results of operations of the respective companies for all
periods presented.

(2) In 1994, Systems Inc. transferred certain assets and liabilities to SPR
Chicago and SPR Wisconsin. Inasmuch as such 1994 transactions were among
family members within a control group, such transactions have been recorded
in the Company's financial statements as if the stockholders of SPR Chicago
and SPR Wisconsin received non-cash, stock-based compensation during 1994,
1995 and 1996 in an amount equal to the increase in the estimated value of
such companies since 1994. This expense is non-recurring subsequent to
October 31, 1996. Such compensation expense is recorded as stock-based
compensation with the corresponding credit included in additional paid-in
capital. Upon conversion of the Company to a C corporation upon closing of
the Offering, the retained deficit of the Company, which includes the
aggregate stock-based compensation expense, will be reclassified and netted
against additional paid-in capital. Excluding such compensation expense, net
income for 1995 and the ten months ended October 31, 1995 and 1996 on a pro
forma basis would have been $1.6 million, $1.5 million and $0.9 million,
respectively. See "-- Summary Unaudited Pro Forma Financial Data" and Note
10 of Notes to Financial Statements.

(3) Prior to the Offering, the Company was an S corporation and was not subject
to Federal and certain state corporate income taxes. The Statement of
Operations Data reflects a pro forma provision for income taxes as if the
Company had been subject to Federal and state corporate income taxes for
1995 and the first ten months of 1996. The pro forma provision for income
taxes represents a combined Federal and state effective tax rate of 40%. The
pro forma provision for income taxes is computed by multiplying the
effective tax rate times the (loss) before income taxes adjusted to
eliminate the stock-based compensation expense and subtracting income taxes
previously recorded.

(4) Pro forma net (loss) per share information assumes that 179,211 of the
shares of Common Stock being offered by the Company hereby were outstanding
during the periods presented. This represents the approximate number of
shares of Common Stock which are being offered by the Company (assuming an
initial public offering price of $15 per share and after deducting estimated
underwriting discounts and commissions) to fund the payment of a dividend to
enable the stockholders of record prior to the Offering to pay income taxes
related to S corporation income through the closing date of the Offering
(the "Dividend"). The Company currently estimates (based in part on the
Company's estimate of its 1996 earnings) that the Dividend will be $2.5
million.

6
<PAGE> 8

SUMMARY UNAUDITED PRO FORMA FINANCIAL DATA

The Summary Unaudited Pro Forma Financial Data are based on the historical
financial statements of the Company, giving effect to the Offering and to the
pro forma adjustments described in the accompanying notes as if the Offering
occurred as of January 1, 1995 in the case of the Statement of Operations Data
and October 31, 1996 in the case of the Balance Sheet Data. The Unaudited Pro
Forma Financial Data are not necessarily indicative of the results of operations
which would have been achieved had the Offering occurred on January 1, 1995 nor
are they necessarily indicative of the results of future operations. The
Unaudited Pro Forma Financial Data should be read in conjunction with the
financial statements of the Company included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
PRO FORMA
---------------------------------------------------------
YEAR ENDED TEN MONTHS ENDED TEN MONTHS ENDED
DECEMBER 31, 1995 OCTOBER 31, 1995 OCTOBER 31, 1996
----------------- ---------------- ----------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues..................................... $22,908 $18,478 $26,575
Operating income............................. 2,823(1) 2,659(1) 1,504(1)
Net income................................... 1,628(2) 1,542(2) 871(2)
Earnings per share........................... 0.20 0.19 0.11
Weighted average number of shares
outstanding................................ 8,000 8,000 8,000
</TABLE>

<TABLE>
<CAPTION>
OCTOBER 31, 1996
--------------------------
ACTUAL AS ADJUSTED(3)
------ --------------
<S> <C> <C>
BALANCE SHEET DATA:
Cash.............................................................. $ 633(4) $ 19,056(4)
Working capital................................................... 1,743(4) 21,328(4)
Total assets...................................................... 6,787 25,210
Long-term debt, less current portion.............................. 189 6
Total stockholders' equity........................................ 2,926(4)(5) 22,376(4)(5)
</TABLE>

- -------------------------
(1) In 1994, Systems Inc. transferred certain assets and liabilities to SPR
Chicago and SPR Wisconsin. Inasmuch as such transactions were among family
members within a control group, such transactions have been recorded in the
Company's financial statements as if the stockholders of SPR Chicago and SPR
Wisconsin received non-cash, stock-based compensation during 1994, 1995 and
1996, in an amount equal to the increase in the estimated value of such
companies since 1994. This expense is non-recurring subsequent to October
31, 1996. The Summary Unaudited Pro Forma Financial Data eliminates such
expense from operating income for the year ended December 31, 1995 and for
the ten months ended October 31, 1995 and October 31, 1996; accordingly,
operating income for such periods was increased by $28.0 million, $23.3
million and $15.9 million, respectively. See Note 10 of Notes to Financial
Statements.

(2) Prior to the Offering, the Company was an S corporation and was not subject
to Federal and certain state corporate income taxes. The Statement of
Operations Data reflects a pro forma provision for income taxes as if the
Company had been subject to Federal and state corporate income taxes for all
periods. The pro forma provision for income taxes represents a combined
Federal and state effective tax rate of 40%.

(3) Adjusted to reflect the application of the estimated net proceeds from the
Offering, estimated to be $22.6 million (assuming an initial public offering
price of $15 per share). The proceeds from the Offering will be used to pay
the Dividend (see note 4), pay a stockholder note, borrowings under a line
of credit and a term note and for general corporate purposes.

(4) Immediately prior to consummation of the Offering, the Company intends to
declare the Dividend. The Company currently estimates (based in part on the
Company's estimate of its 1996 earnings) that the Dividend will be $2.5
million.

(5) Upon conversion of the Company to a C corporation at the closing of the
Offering, the Company will record $0.6 million in estimated deferred income
tax liabilities which will reduce retained earnings and increase
liabilities. Retained deficit of the Company (including the stock-based
compensation expense), after recording the estimated Dividend and deferred
income taxes, will be reclassified and netted against additional paid-in
capital.

7
<PAGE> 9

RISK FACTORS

Prospective purchasers of the Common Stock offered hereby should consider
carefully the risks associated with investing in the Common Stock, including the
principal risk factors set forth below, as well as other information set forth
in this Prospectus.

NEED TO ATTRACT AND RETAIN QUALIFIED TECHNICAL CONSULTANTS

The Company's business involves the delivery of professional services and
is very labor-intensive. The Company's success depends in large part upon its
ability to attract, develop, motivate and retain qualified technical
consultants, particularly project managers and other senior technical personnel.
Qualified technical consultants are in great demand and are likely to remain a
limited resource for the foreseeable future. This demand may enable qualified
technical consultants to command significantly greater compensation than is
currently paid by the Company. There can be no assurance that the Company will
be able to continue to attract and retain a sufficient number of qualified
technical consultants in the future. Historically, the Company has experienced
turnover rates which it believes are consistent with industry norms. As
competition for qualified technical consultants increases, there can be no
assurance that the turnover rate experienced by the Company will not increase.
The Company's inability to hire sufficient qualified technical consultants, or a
significant increase in the Company's consultant turnover rate, could have a
material adverse effect on the Company's business, financial condition and
results of operations. See "Business -- Business Strategies."

MANAGEMENT OF GROWTH

The Company's rapid revenue and employee growth has placed, and could
continue to place, significant demands upon its management and other resources.
To manage its growth effectively, the Company will be required to continue to
develop and improve its operational, financial and other internal systems, as
well as its business development capabilities. In addition, the Company's future
success will depend in large part upon its ability to maintain high rates of
consultant utilization and maintain the quality of its services. Moreover, none
of the Company's senior management has any experience managing a public company.
The Company's inability to manage its growth and engagements effectively could
have a material adverse effect on the Company's business, financial condition
and results of operations. See "-- Need to Attract and Retain Qualified
Technical Consultants" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

RELIANCE ON CENTURY DATE COMPLIANCE ENGAGEMENTS

Over the next few years, the Company expects to derive a majority of its
revenues from Century Date Compliance engagements. Revenues derived by the
Company from Century Date Compliance engagements were approximately $0.6 million
and $6.9 million for 1995 and the first ten months of 1996, respectively.
However, market demand for Century Date Compliance services will likely decrease
substantially, and eventually cease, during and after the year 2000. In
addition, the Company's growth strategy is substantially dependent upon
leveraging its Century Date Compliance experience to obtain other consulting
engagements from its Century Date Compliance clients. The Company's inability to
consistently complete Century Date Compliance engagements to its clients'
satisfaction or to procure additional consulting engagements from such clients
could have a material adverse effect on the Company's business, financial
condition and results of operations.

While several software programs have been developed to assist IT service
professionals in making existing systems year 2000-compliant, there is presently
no fully-automated solution (a "silver bullet") to the year 2000 problem. There
can be no assurance that a silver bullet will not be developed. Moreover,
certain companies may elect to replace their existing systems with year
2000-compliant hardware and software, rather than incur substantial cost in
making their existing systems year 2000-compliant. The development of a silver
bullet or decisions by a significant number of companies to replace their
existing systems with year 2000-compliant hardware and software could have a
material adverse effect on the Company's business, financial condition and
results of operations.

8
<PAGE> 10

COMPETITION

The highly competitive market for IT services includes a large number of
competitors and is subject to rapid change. The Company believes its primary
competitors include "Big Six" accounting firms, systems consulting and
implementation firms, application software firms, service groups of computer
equipment companies, general management consulting firms and programming
companies. Many of these competitors have significantly greater financial,
technical and marketing resources and greater name recognition than the Company.
In addition, the Company competes with its clients' internal IT personnel who
typically represent a fixed cost to the client. Such competition may impose
additional pricing pressures on the Company. There can be no assurance that the
Company can compete successfully with its existing competitors or with any new
competitors. See "Business -- Competition."

ENGAGEMENT AND CONTRACT RISKS

Many of the Company's engagements involve projects that are critical to the
operations of its clients' businesses. The Company's failure or inability to
complete engagements to its clients' satisfaction could have a material adverse
effect on its clients' operations and could consequently subject the Company to
litigation or damage the Company's reputation, which could have a material
adverse effect on the Company's business, financial condition and results of
operations.

Substantially all of the Company's contracts are terminable by the client
on relatively short notice, with or without cause and without penalty. The
unexpected termination by a client of a significant contract could have a
material adverse effect on the Company's consultant utilization rate which, in
turn, could have a material adverse effect on the Company's business, financial
condition and results of operations. The Company principally bills for its
services on a "time and materials basis;" however, some of the Company's
contracts contain a cap on the amount of fees the Company can charge. In
addition, the Company currently is performing services for several of its
significant clients pursuant to oral agreements or written contracts that are no
longer in effect. In the event of a dispute, the absence of a written and
binding agreement limiting the Company's liability to the client could have a
material adverse effect on the Company's business, financial condition and
results of operations. Some of the Company's contracts give its clients the
right in certain circumstances to hire consultants employed or retained by the
Company, and several clients have, in fact, hired Company consultants in the
past. The loss of one or more project managers or a significant number of
qualified technical consultants to the Company's clients could have a material
adverse effect on the Company's business, financial condition and results of
operations. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

CUSTOMER CONCENTRATION

The Company has derived, and believes that it will continue to derive, a
significant portion of its revenues from a limited number of large clients. In
1995 and for the ten months ended October 31, 1996, the Company's largest client
accounted for approximately 11% and 16% of its revenues, respectively, and its
ten largest clients accounted for approximately 51% and 52% of its revenues,
respectively. The volume of work performed for specific clients varies from year
to year. There can be no assurance that a large client in one year will continue
to use the Company's services in a subsequent year. Furthermore, the Company
rarely is the exclusive provider of IT consulting services to its clients. The
loss of any large client could have a material adverse effect on the Company's
business, financial condition and results of operations.

RISKS OF BRANCH EXPANSION

The Company anticipates future growth through branch expansion, which is
dependent upon a number of factors, including, but not limited to: (i) the
ability to cultivate additional business from existing clients and obtain new
clients; (ii) the ability to identify and hire qualified IT consultants within
both new and existing markets; and (iii) the continued identification and
training of corporate personnel to open and staff additional branch offices. The
Company has not opened a new branch office since 1979; however, the Company has
hired a general manager for the Texas region and is planning to open a branch
office in Texas in early 1997. There

9
<PAGE> 11

can be no assurance that new branch offices will be profitable. See "-- Need to
Attract and Retain Qualified Technical Consultants."

INTELLECTUAL PROPERTY RIGHTS

Software developed by SPR in connection with a client engagement typically
becomes the exclusive property of the client. Although the Company believes that
its services and the software it develops for its clients do not infringe upon
the intellectual property rights of others and that it has all rights necessary
to utilize the intellectual property employed in its business, the Company is
subject to the risk of litigation alleging infringement of third-party
intellectual property rights. The Company typically agrees to indemnify its
clients against such claims. Any such claims could require the Company to spend
significant sums in litigation, pay damages, develop non-infringing intellectual
property or acquire licenses to the intellectual property which is the subject
of asserted infringement.

The Company relies upon a combination of nondisclosure and other
contractual arrangements and trade secret, copyright and trademark laws to
protect its rights, the rights of third parties from whom the Company licenses
intellectual property and the proprietary rights of its clients. The Company
requires all consultants to sign confidentiality agreements and limits
distribution of proprietary information. There can be no assurance, however,
that the steps taken by the Company will be adequate to deter misappropriation
of proprietary information or that the Company will be able to detect
unauthorized use and take appropriate steps to enforce its intellectual property
rights. See "Business -- Intellectual Property Rights."

RELIANCE UPON EXECUTIVE OFFICERS AND KEY EMPLOYEES

The success of the Company is highly dependent upon the efforts and
abilities of its executive officers, particularly Mr. Robert Figliulo, the
Company's President. Although all of its executive officers and certain key
employees have entered into employment agreements with the Company which contain
noncompetition, nondisclosure and nonsolicitation covenants, such agreements do
not guarantee that these individuals will continue their employment with the
Company. The loss of the services of any of these executive officers or key
employees for any reason could have a material adverse effect upon the Company's
business, financial condition and results of operations. See "Management --
Employment Agreements."

CONTROL BY PRINCIPAL STOCKHOLDERS

After giving effect to the Offering, members of the Figliulo family, in the
aggregate, Michael Fletcher and Rene Potter will beneficially own approximately
50.5%, 8.1% and 7.7%, respectively, of the outstanding shares of Common Stock.
As a result, such persons collectively will be able to control the outcome of
matters requiring a stockholder vote, including the election of directors. Such
control could preclude any unsolicited acquisition of the Company and,
consequently, adversely affect the market price of the Common Stock. See
"Principal and Selling Stockholders" and "Description of Capital Stock --
Delaware Law and Certain Certificate of Incorporation and By-law Provisions;
Antitakeover Effects."

VARIABILITY OF QUARTERLY OPERATING RESULTS

The Company's revenues and earnings have fluctuated and, in the future, may
fluctuate from quarter to quarter based on such factors as the number, size and
scope of projects in which the Company is engaged, the contractual terms and
degree of completion of such engagements, any delays incurred in connection with
an engagement, employee utilization rates, the adequacy of provisions for
losses, the accuracy of estimates of resources required to complete ongoing
engagements, and general economic conditions. Unanticipated variations in the
number, or progress toward completion, of the Company's engagements or in
consultant utilization rates may cause significant variations in operating
results in any particular quarter and could result in losses for such quarter.
An unanticipated termination of a major engagement, a client's decision not to
proceed to the stage of the engagement anticipated by the Company or the
completion during a quarter of several major client engagements, could leave the
Company with underutilized consultants which could have a

10
<PAGE> 12

material adverse effect on the Company's business, financial condition and
results of operations. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

EMPLOYMENT LIABILITY RISKS

The Company generally places its consultants in the workplaces of other
businesses. Risks of such placement include possible claims of errors and
omissions, misuse of client proprietary information, misappropriation of funds,
discrimination and harassment, theft of client property, other criminal activity
or torts and other claims. Although historically the Company has not experienced
any material claims of these types, there can be no assurance that the Company
will not experience such claims in the future. To reduce its exposure, the
Company maintains insurance covering general liability, workers' compensation
claims, errors and omissions and employer practices liability. There can be no
assurance, however, that the Company's insurance will cover all such claims, or
that such insurance coverage will continue to be available economically in
amounts adequate to cover any such liability or that such coverage will
adequately compensate the Company for such liabilities.

RISKS OF LICENSING CENTURY DATE COMPLIANCE METHODOLOGY

The Company has entered into a non-exclusive agreement to license its
Century Date Compliance methodology, Renovation2000(SM), and its software
analysis tool, CodeVu(SM), to an unaffiliated technical services company
operating in New York and other markets where the Company is not currently doing
business. The Company may in the future enter into similar licensing agreements
with other third parties in specific geographic regions in which it does not
presently conduct business. There can be no assurance that such licensees will
properly utilize the Company's methodology or software analysis tool. The
failure by licensees to adhere strictly to SPR's standards in utilizing the
Renovation2000(SM) methodology or CodeVu(SM) in Century Date Compliance
engagements could subject SPR to litigation and harm SPR's reputation thereby
resulting in a material adverse effect on the Company's business, financial
condition and results of operations.

ABSENCE OF PRIOR PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to the Offering, there has not been a public market for the Common
Stock and there can be no assurance that an active trading market will develop
or be sustained after the Offering. The initial public offering price for the
Common Stock offered hereby will be determined by negotiations between the
Company and the representatives of the Underwriters, and may not be indicative
of the market price for the Common Stock after the Offering. See "Underwriting"
for a discussion of factors to be considered in determining the initial public
offering price. There can be no assurance that the market price of the Common
Stock will not decline below the initial public offering price. The Company
believes that variations in the Company's results of operations and other
factors, including general economic conditions, may cause the market price of
the Common Stock to fluctuate significantly. The market price for the Common
Stock may also be affected by the Company's ability to meet analysts'
expectations, and any failure to meet such expectations, even if minor, could
have a material adverse effect on the market price of the Common Stock. In
addition, from time to time in recent years, the securities markets have
experienced significant price and volume fluctuations that have often been
unrelated or disproportionate to the operating performance of particular
companies. Following the Offering, sales or the expectation of sales of
substantial amounts of Common Stock in the public market by the Company or its
stockholders also could adversely affect the prevailing market prices for the
Common Stock. See "Underwriting."

IMMEDIATE AND SUBSTANTIAL DILUTION

The assumed initial public offering price is substantially higher than the
pro forma net tangible book value per share of Common Stock. Investors
purchasing shares of Common Stock in the Offering will therefore incur immediate
and substantial dilution of $12.20 per share of Common Stock based on an assumed
initial public offering price of $15.00 per share. To the extent outstanding
options to purchase Common Stock are exercised, there will be further dilution.
See "Dilution."

11
<PAGE> 13

SIGNIFICANT UNALLOCATED NET PROCEEDS

The only specific allocations of the Company's anticipated net proceeds
from the Offering is the payment to existing stockholders of the Dividend,
repayment of certain indebtedness, including a note payable to Eugene Figliulo,
the founder of the Company's predecessor, and bank loans, funding of additional
consultant training and costs associated with the development and expansion of
off-site service centers (the "Virtual Insourcing Centers"). See "Business --
Growth Strategies -- Further Develop Virtual Insourcing Centers." Accordingly, a
substantial majority of the Company's anticipated net proceeds of the Offering
has not been designated for specific uses. The Board of Directors of the Company
will have broad discretion with respect to the use of such unallocated net
proceeds. See "Use of Proceeds."

ANTI-TAKEOVER PROVISIONS

The Company's Certificate of Incorporation and By-laws and the Delaware
General Corporation Law contain certain provisions that could have the effect of
discouraging or making more difficult the acquisition of the Company by means of
a tender offer, a proxy contest or otherwise, even though such an acquisition
might be economically beneficial to the Company's stockholders. These include
provisions under which (i) only the Chairman of the Board or the President may
call meetings of stockholders, and (ii) stockholders must comply with certain
advance notice procedures to nominate candidates for election as directors of
the Company and to submit proposals for consideration at stockholders' meetings.
The ability of the Board of Directors to issue up to 3,000,000 shares of
preferred stock, in one or more classes or series, and with such powers,
designations, preferences and relative, participating, optional or special
rights, qualifications, limitations or restrictions as may be determined by the
Board of Directors of the Company, also could make an acquisition of the Company
more difficult. In addition, these provisions may make the removal of management
more difficult, even in cases where such removal would be favorable to the
interests of the Company's stockholders. See "-- Control by Principal
Stockholders," "Management -- Directors and Executive Officers" and "Description
of Capital Stock -- Delaware Law and Certain Certificate of Incorporation and
By-law Provisions; Anti-Takeover Effects."

BENEFITS TO EXISTING STOCKHOLDERS

The existing stockholders of the Company will realize substantial benefits
from the Offering, including the creation of a public market for the Company's
Common Stock and an immediate increase in the net tangible book value of their
shares of Common Stock. Moreover, a portion of the Company's net proceeds from
the Offering will be paid to: (i) Eugene Figliulo to pay the outstanding balance
due on an outstanding stock redemption note; and (ii) the existing stockholders
to enable such stockholders to pay income taxes related to S corporation income
through the closing date of the Offering. In addition, all of the existing
stockholders of the Company (except for Robert Figliulo, David Figliulo and
Michael Fletcher) intend to sell an aggregate of 1,033,334 shares of Common
Stock in the Offering (1,438,334 shares if the underwriters' over-allotment
option is exercised in full). The proceeds of such proposed sales (net of
estimated underwriting discounts and commissions) based upon an assumed initial
public offering price of $15.00 per share will significantly exceed the amount
paid for such shares by the Selling Stockholders. Finally, the Company has
granted Robert Figliulo, David Figliulo, John Figliulo and Michael Fletcher an
unlimited number of demand and piggyback registration rights covering an
aggregate of 532,184 shares of Common Stock. See "Use of Proceeds," "Dilution,"
"Certain Transactions" and "Principal and Selling Stockholders."

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have 8,000,000 shares of
Common Stock outstanding, of which the 2,700,000 shares sold pursuant to the
Offering will be freely transferable without restriction or further registration
under the Securities Act of 1933, as amended (the "Securities Act") (other than
by an "affiliate" of the Company, as defined in the Securities Act), and the
remaining 5,300,000 shares will be "restricted securities" under Rule 144 ("Rule
144") promulgated under the Securities Act. Holders of the restricted shares
will be eligible to sell such shares pursuant to Rule 144 at prescribed times
and subject to the manner of sale, volume, notice and information restrictions
of Rule 144. The Company has granted

12
<PAGE> 14

Messrs. Robert Figliulo, David Figliulo, John Figliulo and Michael Fletcher an
unlimited number of demand and piggyback registration rights covering an
aggregate of 532,184 shares of Common Stock. In addition, 800,000 shares of
Common Stock are reserved for issuance under the Company's Combined Incentive
and Non-statutory Stock Option Plan (the "Option Plan") and 500,000 shares of
Common Stock are reserved for issuance under the Company's Employee Stock
Purchase Plan. The Company intends to register under the Securities Act all of
the shares covered by the Option Plan and the Employee Stock Purchase Plan,
which shares upon issuance would become freely tradeable without restriction.
Each of (i) the Company, (ii) all of the Company's executive officers and
directors, and (iii) all stockholders of the Company owning Common Stock
immediately prior to the Offering have agreed not to offer, sell, contract to
sell or otherwise dispose of, any shares of Common Stock or any securities
convertible into or exchangeable or exercisable for Common Stock, or grant any
options or warrants to purchase Common Stock, except in certain circumstances,
for 180 days after the date of this Prospectus without the prior consent of
Smith Barney Inc., which agreements may be waived by Smith Barney Inc. in its
discretion. None of the 5,300,000 shares of Common Stock which are restricted
securities will be eligible for sale after the expiration of such lock-up
agreements until the applicable holding period under Rule 144 (currently two
years) has expired. Thereafter, all 5,300,000 shares of Common Stock which are
restricted securities will be eligible for sale subject to the provisions of
Rule 144. Following the Offering, sales or the expectation of sales of
substantial amounts of Common Stock in the public market could adversely affect
the prevailing market price for the Common Stock and the Company's ability to
raise additional capital at a price favorable to the Company. See "Shares
Eligible for Future Sale" and "Underwriting."

THE COMPANY

The Company's business was founded in 1973 by Eugene Figliulo as Systems
Inc. During 1994, Systems Inc. transferred certain assets and liabilities to SPR
Chicago, SPR Tulsa, and SPR Wisconsin, respectively. These entities were
organized as S corporations and owned by the executives primarily responsible
for the operations in each of these locations. SPR Chicago, SPR Tulsa, SPR
Wisconsin, Systems Inc. and Data Flex (an affiliated IT services company in a
complementary business) were merged into the Company upon the Company's
formation in October 1996. See "Certain Transactions."

The Company maintains its principal executive offices at 2015 Spring Road,
Oak Brook, Illinois 60521. Its telephone number is (630) 990-2040. The Company's
World Wide Web address is www.sprinc.com.

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 1,666,666 shares of
Common Stock offered by it hereby (after deducting estimated underwriting
discounts and commissions and estimated offering expenses) are estimated to be
approximately $22.6 million, based upon an assumed initial public offering price
of $15.00 per share of Common Stock.

The principal purposes of the Offering are to increase the Company's equity
capital and financial flexibility, create a public market for the Common Stock,
facilitate future access by the Company to the public equity markets, enhance
the Company's ability to use Common Stock as a means of attracting and retaining
key employees and technical staff, and provide working capital to fund the
Company's growth strategies. See "Business -- Growth Strategies" and "Business
- -- Recruiting and Training."

The Company intends to use a portion of its net proceeds from the Offering
to pay existing stockholders of the Company the Dividend in an aggregate amount
of $2.5 million to enable such stockholders to pay Federal and state income
taxes due on S corporation taxable income through the closing date of the
Offering. See "Certain Transactions." In addition, the Company intends to use
approximately $0.8 million of its net proceeds to pay outstanding indebtedness
to Eugene Figliulo and approximately $0.8 million of such proceeds to pay
outstanding indebtedness under a line of credit and term note. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources" for information regarding interest rates,
maturities and use of proceeds of indebtedness.

13
<PAGE> 15

Approximately $1.4 million of the net proceeds will be used to build-out
and equip an additional Virtual Insourcing Center and open a Texas branch
office. See "Business -- Growth Strategies -- Further Develop Virtual Insourcing
Centers" and "Business -- Growth Strategies -- Expand Geographic Presence." As
of October 31, 1996, the Company had not incurred, or made any commitments to
incur, significant capital expenditures with respect to either the additional
Virtual Insourcing Center or the Texas branch office.

The Company intends to use the remaining net proceeds for general corporate
purposes, including the expansion of its entry-level recruiting and training
program. Pending any of the foregoing uses, the Company intends to invest the
net proceeds in short-term, investment grade securities, certificates of deposit
or direct or guaranteed obligations of the United States government. The Company
will not receive any proceeds from shares of Common Stock sold by the Selling
Stockholders.

DIVIDEND POLICY

Except for distributions to stockholders to fund their payments of taxes
due on prior year S corporation income, the Company has not declared or paid any
cash dividends on the Common Stock. After the Offering, except for the Dividend,
the Company expects to retain any future earnings to finance the operation and
expansion of its business and does not anticipate paying any cash dividends on
its Common Stock in the foreseeable future. Any future determination as to the
payment of dividends will depend upon the results of operations, financial
condition, capital expenditure plans and other obligations of the Company and
will be at the sole discretion of the Company's Board of Directors.

14
<PAGE> 16

CAPITALIZATION

The following table sets forth the Company's long-term indebtedness and
capitalization as of October 31, 1996 and as adjusted to give effect to the sale
of 1,666,666 shares of Common Stock offered by the Company (at an assumed
initial public offering price of $15.00 per share) and the application of the
estimated net proceeds therefrom. The information set forth below should be read
in conjunction with the Financial Statements and related Notes thereto and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" contained elsewhere in this Prospectus.

<TABLE>
<CAPTION>
AS OF OCTOBER 31, 1996
----------------------------
ACTUAL AS ADJUSTED
-------- -----------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C>
Current debt...................................................... $ 1,508 $ 62
======== =======
Long-term debt, less current maturities........................... 189 6
Stockholders' equity:
Preferred Stock, $.01 par value; 3,000,000 shares authorized; no
shares issued and outstanding................................ -- --
Common Stock, $.01 par value; 13,000,000 shares authorized;
6,333,334 shares issued and outstanding actual; 8,000,000
shares issued and outstanding as adjusted.................... 63(1) 80(1)
Additional paid-in capital........................................ 50,390(2) 22,296(2)
-------- -------
Retained deficit.................................................. (47,527)(2) --(2)
-------- -------
Total stockholders' equity........................................ 2,926 22,376
-------- -------
Total capitalization............................................ $ 3,115 $22,382
======== =======
</TABLE>

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

(1) Excludes 800,000 shares of Common Stock reserved for issuance upon exercise
of options granted or to be granted pursuant to the Option Plan and 500,000
shares of Common Stock reserved for issuance pursuant to the Employee Stock
Purchase Plan. See "Management -- Stock Plans," "Description of Capital
Stock" and Note 11 of Notes to Financial Statements.

(2) Immediately prior to closing of the Offering, the Company intends to declare
the Dividend. The Company currently estimates (based in part on the
Company's estimate of its 1996 earnings) that the Dividend will be $2.5
million. Upon conversion of the Company to a C corporation at the closing of
the Offering, the Company will record approximately $0.6 million in deferred
income taxes which will reduce retained earnings and increase liabilities.
Retained deficit of the Company (including the stock-based compensation
expense), after recording the estimated Dividend and deferred income tax
liabilities, will be reclassified and netted against additional paid-in
capital in connection with the termination of the Company's S corporation
election.

15
<PAGE> 17

DILUTION

As of October 31, 1996, the Company's net tangible book value was
$2,925,800 or $.46 per share of Common Stock. Net tangible book value per share
represents the Company's total net tangible assets less total liabilities
divided by the number of shares of Common Stock outstanding. Without taking into
account any other changes in net tangible book value after October 31, 1996,
other than to give effect to the Company's receipt of its portion of the
estimated net proceeds of the Offering, at an assumed initial public offering
price of $15.00 per share, the payment of the Dividend and the recording of
deferred taxes of approximately $600,000, the pro forma net tangible book value
of the Company on October 31, 1996 would have been $22,375,790 or $2.80 per
share. This represents an immediate increase in net tangible book value to the
existing stockholders of approximately $2.83 per share and an immediate dilution
to purchasers of shares of Common Stock in the Offering of $12.20 per share, as
illustrated by the following:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share.............................. $15.00
Net tangible book value per share as of October 31, 1996................... $ .46
Decrease per share attributable to the Dividend and deferred taxes(1)...... (.49)
Increase per share attributable to new investors........................... 2.83
Pro forma net tangible book value per share after the Offering(2)............ 2.80
Net tangible book value per share dilution to new investors.................. $12.20
</TABLE>

- -------------------------
(1) Includes the Dividend of $2.5 million and deferred taxes of $600,000, to be
recorded upon conversion of the Company from an S corporation to a C
corporation.

(2) Does not reflect 800,000 shares of Common Stock reserved for issuance upon
exercise of options granted or to be granted in the future pursuant to the
Option Plan (of which options to purchase 442,000 shares of Common Stock are
currently outstanding at an exercise price of $14.00 per share).

The following table sets forth, at October 31, 1996, after giving effect to
the Offering, the differences between existing stockholders and new investors
who purchase Common Stock in the Offering at the assumed initial public offering
price of $15.00 per share, with respect to the number of shares purchased from
the Company, the total consideration paid and the average price per share paid:

<TABLE>
<CAPTION>
SHARES PURCHASED(1)(2) TOTAL CONSIDERATION
---------------------- ---------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------- ------- ----------- ------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders.............. 6,333,334 79.2% $50,452,915(3) 66.9% $ 7.97
New investors...................... 1,666,666 20.8 24,999,990 33.1 15.00
---------- ----- ------------ -----
Total......................... 8,000,000 100.0% $75,452,905 100%
========== ===== ============ =====
</TABLE>

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

(1) Excludes 800,000 shares of Common Stock reserved for issuance upon exercise
of options granted or to be granted pursuant to the Option Plan (of which
options to purchase 442,000 shares of Common Stock are currently outstanding
at an exercise price of $14.00 per share). To the extent such options are
exercised, there will be further dilution to new investors.

(2) The above table is based on ownership as of October 31, 1996. Sales by
Selling Stockholders in the Offering will reduce the number of shares held
by existing stockholders to 5,300,000 shares or 66.3% of the total number of
shares of Common Stock outstanding after the Offering (61.2% if the
Underwriters' over-allotment option is exercised in full), and will increase
the number of shares held by new investors to 2,700,000 shares or 33.7% of
the total number of shares of Common Stock outstanding after the Offering
(38.8% if the Underwriters' over-allotment option is exercised in full). See
"Principal and Selling Stockholders."

(3) Represents the sum of stated capital and additional paid-in capital, which
includes an aggregate of $50.4 million of non-cash, stock-based compensation
for 1994, 1995 and 1996.

16
<PAGE> 18

SELECTED FINANCIAL DATA

The following selected financial data should be read in conjunction with
the Financial Statements of the Company and notes thereto. The Statement of
Operations Data and Balance Sheet Data for, and as of, the end of each of the
years in the three year period ended December 31, 1995 are derived from the
audited Financial Statements of the Company. The Statement of Operations Data
and Balance Sheet Data for, and as of, the years ending December 31, 1991 and
December 31, 1992, and for, and as of, the end of each of the ten months ended
October 31, 1995 and October 31, 1996, have been derived from the unaudited
financial statements of the Company and in the opinion of management include all
adjustments (consisting of normal and recurring adjustments) which are necessary
to present fairly the results of operations and financial position of the
Company for the periods and at the dates presented. The selected financial data
for the ten months ended October 31, 1996 are not necessarily indicative of the
results expected for the full year.

<TABLE>
<CAPTION>
TEN MONTHS ENDED
YEARS ENDED DECEMBER 31, OCTOBER 31,
----------------------------------------------------- -----------------------
1991 1992 1993 1994 1995 1995 1996
------ ------ ------- ------- -------- -------- --------
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:(1)
Revenues.................... $7,914 $9,122 $11,731 $14,797 $ 22,908 $ 18,478 $ 26,575
Cost of services............ 5,835 6,904 8,338 10,424 15,525 12,368 18,736
------ ------ ------- ------- -------- -------- --------
Gross profit................ 2,079 2,218 3,393 4,373 7,383 6,110 7,839
Costs and expenses:
Selling................... 607 743 1,012 1,165 2,141 1,668 2,447
Recruiting................ 234 290 341 410 777 613 1,090
Stock-based
compensation............ -- -- -- 6,510(2) 27,987(2) 23,322(2) 15,885(2)
General and
administrative.......... 1,157 1,015 1,230 1,334 1,642 1,170 2,798
------ ------ ------- ------- -------- -------- --------
Total costs and expenses.... 1,998 2,048 2,583 9,419 32,547 26,773 22,220
------ ------ ------- ------- -------- -------- --------
Operating income (loss)..... 81 170 810 (5,046)(2) (25,164)(2) (20,663)(2) (14,381)(2)
Other income (expense)...... (162) 27 6 (57) (109) (89) (52)
------ ------ ------- ------- -------- -------- --------
Income (loss) before income
taxes..................... (81) 197 816 (5,103)(2) (25,273)(2) (20,752)(2) (14,433)(2)
Provision for income
taxes..................... -- 15 4 75 21 -- --
------ ------ ------- ------- -------- -------- --------
Net income (loss), as
reported(3)............... $ (81) $ 182 $ 812 $(5,178)(2) (25,294)(2) $(20,752)(2) (14,433)(2)
====== ====== ======= ======= ========
Pro forma provision for
income taxes(3)........... 1,065 581
-------- --------
Pro forma net (loss)(3)..... $(26,359) $(15,014)
======== ========
Pro forma net (loss) per
share(3)(4)............... $ (4.05) $ (2.31)
======== ========
Weighted average common
shares outstanding(4)..... 6,512,545 6,512,545
BALANCE SHEET DATA (AT END OF
PERIOD)(1):
Cash........................ $ 151 $ 298 $ 289 $ 1,083 $ 1,109 $ 1,388 $ 633
Working capital............. 852 1,098 1,771 1,674 2,370 2,670 1,743
Total assets................ 1,785 1,670 2,418 3,573 5,584 5,258 6,787
Long-term debt, less current
portion................... -- -- -- 1,841 704 801 189
Total stockholders'
equity.................... 957 1,149 1,954 326 2,275 2,151 2,926(2)
</TABLE>

- ---------------
(1) In October 1996, Systems Inc., SPR Chicago, SPR Tulsa, SPR Wisconsin and
Data Flex merged into SPR and, in connection therewith, the stockholders of
such companies received an aggregate of 6,333,134 shares of Common Stock of
SPR. The financial data above has been restated to include the financial
position and results of operations of the respective companies for all
periods presented.

17
<PAGE> 19

(2) In 1994, Systems Inc. transferred certain assets and liabilities to SPR
Chicago and SPR Wisconsin. Inasmuch as such 1994 transactions were among
family members within a control group, such transactions have been recorded
in the Company's financial statements as if the stockholders of SPR Chicago
and SPR Wisconsin received non-cash, stock-based compensation during 1994,
1995 and 1996 in an amount equal to the increase in the estimated value of
such companies since 1994. This expense is non-recurring subsequent to
October 31, 1996. Such compensation expense is recorded as stock-based
compensation with the corresponding credit included in additional paid-in
capital. Upon conversion of the Company to a C corporation upon closing of
the Offering, the retained deficit of the Company, which includes the
aggregate stock-based compensation expense, will be reclassified and netted
against additional paid-in capital. Excluding such compensation expense, net
income for 1995 and the ten months ended October 31, 1995 and 1996 on a pro
forma basis would have been $1.6 million, $1.5 million and $0.9 million,
respectively. See "Prospectus Summary -- Summary Unaudited Pro Forma
Financial Data" and Note 10 of Notes to Financial Statements.

(4) Pro forma net (loss) per share information assumes that 179,211 of the
shares of Common Stock being offered by the Company hereby were outstanding
during the periods indicated. This represents the approximate number of
shares of Common Stock which are being offered by the Company (assuming an
initial public offering price of $15 per share and after deducting estimated
underwriting discounts and commissions) to fund the payment of the Dividend.
The Company currently estimates (based in part on the Company's estimate of
its 1996 earnings) that the Dividend will be $2.5 million.

18
<PAGE> 20

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION

The following section of the Prospectus, Management's Discussion and
Analysis of Financial Condition and Results of Operations, contains certain
forward-looking statements that involve substantial risks and uncertainties.
"Expect" and similar expressions, as they relate to the Company or its
management, are intended to identify such forward-looking statements. The
Company's actual results, performance or achievements could differ materially
from the results, performance or achievements expressed in, or implied by, these
forward-looking statements. Factors that could cause or contribute to such
differences include those discussed in "Risk Factors."

COMPANY OVERVIEW

The Company was founded in 1973 and derives its revenues from providing IT
consulting services. SPR principally bills its clients on a "time and materials
basis" and revenues are recognized as services are provided. Typically, the
Company bills for its services on a biweekly basis to monitor client
satisfaction and to manage its outstanding accounts receivable balances. The
Company's cost of services consists primarily of consultant compensation and
related expenses. Accordingly, the Company's financial performance is
substantially affected by billing margins (billable hourly rate less consultant
hourly cost) and consultant utilization rates (the ratio of hours billed to
total available hours).

Historically, SPR has maintained its billing margins by increasing its
hourly rates to offset increases in its consulting staff costs. The Company
manages its billing margins by establishing a target billing rate for each
consultant; however, actual billing rates may be higher or lower than the target
billing rates depending upon competitive pressures and market conditions. Hourly
billing rate increases are generally implemented by the Company based upon
market conditions, consultant skill levels and the terms of its engagements.

To date, the Company believes that it has effectively managed its
consultant utilization rates. Fluctuations in consultant utilization rates
result from variations in the amount of unassigned time, which historically has
consisted of training, vacation, sick and holiday time and time spent on
administrative support activities while between engagements. In order to reduce
unassigned time, the Company actively manages the terms of its engagements and
matches available consultants based upon client requirements. In addition, the
number of new consultant training programs and the amount of time it takes to
assign the newly trained consultants vary, thereby affecting the Company's
consultant utilization rates from period to period.

The Company believes that its business and growth strategies are primarily
dependent upon the availability of qualified technical consultants. To address
the shortage of qualified technical consultants, the Company has developed a
three-year training program targeted at college graduates with degrees other
than computer science. This program begins with a six- to eight-week entry-level
course specifically geared to Century Date Compliance. Advanced course modules
are under development and will concentrate on the Company's other service
offerings. The individuals enrolled in the training program are paid a salary
commensurate with computer science graduates. Since the commencement of the
entry-level training program on February 15, 1996, 46 individuals have entered
and successfully completed entry-level training. The Company has incurred
approximately $969,000 in expenses attributable to such training program through
October 31, 1996, all of which have been expensed as incurred. These expenses,
which have adversely affected gross profit and operating income for the ten
months ended October 31, 1996, include approximately $223,000 of salaries and
benefits attributable to trainees during the period in which they were enrolled
in the training program, $365,000 of salaries and benefits attributable to these
individuals pending their assignment to billable engagements, $321,000 of other
training related expenses and $60,000 of recruiting expenses. As of October 31,
1996, 33 entry-level trainees have been assigned to client engagements, seven
will commence assignments prior to December 31, 1996 and six are expected to be
assigned in the near future. On November 4, 1996 the Company began an additional
entry-level training class of 14 individuals, and it intends to conduct
additional training classes on a regular basis in 1997. Since the costs of those
consultants completing the entry-level training program in 1996 have been fully
expensed in 1996, the Company believes

19
<PAGE> 21

its operating profit should improve, in part, as a result of this investment.
The delay between the time consultants complete the entry-level training course
and the time they are assigned to billable engagements is expected to
significantly decrease as the demand for Century Date Compliance services and
the acceptance of entry-level consultants by the Company's clients grow.

In 1994, Systems Inc. transferred certain assets and liabilities to SPR
Chicago and SPR Wisconsin. Inasmuch as such 1994 transactions were among family
members within a control group, such transactions have been recorded in the
Company's financial statements as if the stockholders of SPR Chicago and SPR
Wisconsin received noncash, stock-based compensation during 1994, 1995 and 1996.
This compensation expense was allocated to each such period based upon the
increase in the estimated fair market value of SPR Chicago and SPR Wisconsin
during the respective periods. This expense is non-recurring subsequent to
October 31, 1996. The pro forma financial data eliminates such expense from
operating income for 1995 and for the ten months ended October 31, 1995 and
October 31, 1996; accordingly, pro forma operating income reflects additional
income of $28.0 million and $23.3 million and $15.9 million, respectively. Upon
the conversion of the Company to a C corporation at closing of the Offering, the
retained deficit of the Company, which includes the aggregate stock-based
compensation expense, will be reclassified and netted against additional paid-in
capital.

RESULTS OF OPERATIONS

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

<TABLE>
<CAPTION>
TEN MONTHS ENDED
YEAR ENDED DECEMBER 31, OCTOBER 31,
------------------------------ -----------------
1993 1994 1995 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Revenues................................ 100% 100 % 100% 100% 100 %
Cost of services........................ 71 70 68 67 71
--- --- ---- ---- ---
Gross profit....................... 29 30 32 33 29
Costs and expenses:
Selling............................... 9 8 9 9 9
Recruiting............................ 3 3 3 3 4
Stock-based compensation.............. -- 44 (1) 122(1) 126(1) 60 (1)
General and administrative............ 10 9 7 6 11
--- --- ---- ---- ---
Total costs and expenses........... 22 64 141 144 84
--- --- ---- ---- ---
Operating income (loss)................. 7 (34) (1) (109)(1) (111)(1) (55) (1)
Provision for income taxes.............. -- 1 -- -- --
--- --- ---- ---- ---
Net income (loss)....................... 7% (35) %(1) (109)%(1) (111)%(1) (55) %(1)
=== === ==== ==== ===
</TABLE>

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

(1) In 1994, Systems Inc. transferred certain assets and liabilities to SPR
Chicago and SPR Wisconsin. Inasmuch as such transactions were among family
members within a control group, such transactions have been recorded in the
Company's financial statements as if the stockholders of SPR Chicago and SPR
Wisconsin received non-cash, stock-based compensation during 1994, 1995 and
1996, in an amount equal to the increase in the estimated value of such
companies since 1994. This expense is non-recurring subsequent to October
31, 1996. The Summary Unaudited Pro Forma Financial Data eliminates such
expense from operating income for the year ended December 31, 1995 and for
the ten months ended October 31, 1995 and October 31, 1996; accordingly,
operating income for such periods was increased by $28.0 million, $23.3
million and $15.9 million, respectively. See Note 10 of Notes to Financial
Statements.

TEN MONTHS ENDED OCTOBER 31, 1996 COMPARED TO TEN MONTHS ENDED OCTOBER 31, 1995

Revenues. Revenues increased 44% to $26.6 million in the first ten months
of 1996 from $18.5 million in the comparable 1995 period. This increase was
primarily the result of an increased number of engagements for

20
<PAGE> 22

both new and existing clients. A higher proportion of these engagements were for
strategic planning and assessment for Century Date Compliance engagements, which
yield higher billing rates. Revenues from Century Date Compliance engagements
increased 2300% to $6.9 million in the first ten months of 1996 from $0.3
million in the comparable 1995 period.

Gross Profit. Gross profit consists of revenues less cost of services,
which includes consultant salaries, benefits and travel expenses. Gross profit
increased 28% to $7.8 million in the first ten months of 1996 from $6.1 million
in the comparable 1995 period. Gross profit as a percentage of revenues
decreased to 29% in the first ten months of 1996 from 33% in the comparable 1995
period. The decrease in gross margin was primarily attributable to costs
relating to trainees enrolled in the entry-level training program, and the
subsequent delay in the assignment of these individuals to billable engagements.
This resulted in an increase in expenses of approximately $0.6 million without
any increase in revenues. In addition, the Company hired 20 project managers (an
increase of 200% from the comparable 1995 period) to satisfy anticipated demand
for the Company's services. The Company's operating income for the ten months
ended October 31, 1996 was adversely affected by the large number of project
managers hired during such period and the amount of time these project managers
devoted to enhancing the Company's proprietary methodologies and performing
marketing and administrative activities. The Company believes that operating
income should improve as these project managers devote more time to billable
engagements.

Selling Expenses. Selling expenses include the salaries, benefits,
commissions, bonuses, travel, entertainment and other direct costs associated
with the Company's direct sales force. Selling expenses increased 47% to $2.4
million in the first ten months of 1996 from $1.7 million in the comparable 1995
period. This increase was primarily the result of increased commissions
attributable to the 44% increase in sales over the comparable period. The
Company also had three more salespeople on October 31, 1996 than it had on
October 31, 1995. The Company's selling expenses, as a percentage of revenues,
were 9% in the first ten months of 1996 and 1995.

Recruiting Expenses. Recruiting expenses consist of costs related to hiring
new personnel, which include the salaries, benefits, bonuses and other direct
costs of the in-house recruiters, consultant relocation fees, recruiters' travel
expenses and advertising costs. The Company hired 255 consultants during the
first ten months of 1996 compared to 232 in the first ten months of 1995.
Recruiting expenses increased 78% to $1.1 million in the first ten months of
1996 from $0.6 million in the comparable 1995 period. This increase was the
result of hiring seven additional recruiters to manage the expanded hiring
activity. As a result of such additions, total recruiting costs per hire
increased to approximately $4,300 in the first ten months of 1996 from
approximately $2,600 in the comparable 1995 period.

Stock-based Compensation Expense. Stock-based compensation expense consists
of non-cash expense resulting from the financial statement treatment of the 1994
transfers by Systems Inc. of certain of its assets and liabilities to SPR
Chicago and SPR Wisconsin. The stock-based compensation expense was allocated to
each period based upon the increase in the estimated fair market value of SPR
Chicago and SPR Wisconsin. The increase in the estimated fair market value of
SPR Chicago and SPR Wisconsin for the periods presented was based upon SPR
Chicago's and SPR Wisconsin's revenue growth over such periods. The expense is
non-recurring subsequent to October 31, 1996. Stock-based compensation expense
decreased 32% from $23.3 million in the first ten months of 1995 to $15.9
million in the comparable 1996 period.

General and Administrative Expenses. General and administrative expenses
include salaries and benefits of management and support staff, leased facilities
costs, training, travel expenses related to general and administrative matters,
outside professional fees, depreciation and all other corporate costs. General
and administrative expenses increased 139% to $2.8 million in the first ten
months of 1996 from $1.2 million in the comparable 1995 period. This increase
was primarily attributable to hiring six additional employees, including a Chief
Financial Officer, a General Manager for the Company's Texas branch office, a
Director of Human Resources, increased rent relating to new office space in
Chicago and Wisconsin, increased depreciation, training costs associated
primarily with outside instructors, and initial staffing of the IDS business
unit,

21
<PAGE> 23

including the reclassification of certain employee salaries from cost of
services and selling expenses to reflect the change in responsibilities of these
employees.

1995 COMPARED TO 1994

Revenues. Revenues increased 55% to $22.9 million in 1995 from $14.8
million in 1994. The increase was primarily the result of an increased demand
for the Company's services from both new and existing clients and a continuing
shift from contract programming to project management engagements yielding
higher billing rates. Revenues from Century Date Compliance engagements
increased to $0.6 million in 1995 from an immaterial amount in 1994.

Gross Profit. Gross profit increased 69% to $7.4 million in 1995 from $4.4
million in 1994. Gross profit as a percentage of revenues increased to 32% of
revenues in 1995 from 30% in 1994, resulting primarily from higher billing rates
without commensurate increases in consultant hourly costs resulting from the
shift from contract programming to project management and the completion of two
out-of-town engagements in 1994 in which per diem expenses were paid to
consultants but not passed through to clients. Out-of-town expenses, such as
travel expenses, generally are passed through to the Company's clients; however,
in the case of these two engagements, the Company agreed to bear such expenses.

Selling Expenses. Selling expenses increased 84% to $2.1 million in 1995
from $1.2 million in 1994. This increase was primarily the result of increased
commissions due to a 55% increase in sales in 1995 over 1994. In addition, the
Company hired four additional salespersons in 1995.

Recruiting Expenses. Recruiting expenses increased 89% to $0.8 million in
1995 from $0.4 million in 1994. This increase was the result of hiring seven
additional recruiters to expand hiring activity required by the increased demand
for the Company's service offerings. The Company hired 254 consultants in 1995
compared to 168 in 1994. As a result of hiring the additional recruiters, total
recruiting costs per hire increased to approximately $3,100 in 1995 from
approximately $2,400 in 1994.

Stock-based Compensation Expense. Stock-based compensation expense
increased 330% to $28.0 million in 1995 compared to $6.5 million in 1994.

General and Administrative Expenses. General and administrative expenses
increased 23% to $1.6 million in 1995 from $1.3 million in 1994. This increase
was primarily due to management salary and bonus increases, the hiring of a
Director of Human Resources, four general office staff employees and an increase
in depreciation. General and administrative expenses as a percentage of revenues
decreased to 7% in 1995 from 9% in 1994 as a result of the rapid growth in
revenues.

1994 COMPARED TO 1993

Revenues. Revenues increased 26% to $14.8 million in 1994 from $11.7
million in 1993. The increase was primarily the result of an increased number of
engagements for both new and existing clients and a shift from contract
programming to project management engagements yielding higher billing rates.

Gross Profit. Gross profit increased 29% to $4.4 million in 1994 from $3.4
million in 1993. Gross profit as a percentage of revenues increased to 30% of
revenues in 1994 from 29% in 1993. This percentage of revenues increase in 1994
over 1993 was attributable to higher billing rates without commensurate
increases in consultant hourly costs resulting from the shift from contract
programming to project management.

Selling Expenses. Selling expenses increased 15% in 1994 to $1.2 million
from $1.0 million in 1993. This increase was primarily the result of increased
commissions due to the 26% increase in sales in 1994 over 1993. In addition, the
Company also hired a salesperson in 1994.

Recruiting Expenses. Recruiting expenses increased 20% to $0.4 million in
1994 from $0.3 million in 1993. The Company hired 168 consultants in 1994
compared to 145 in 1993. Total recruiting costs per hire stayed approximately
the same at $2,400 in both periods.

22
<PAGE> 24

Stock-based Compensation Expense. Stock-based compensation expense in the
amount of $6.5 million was recorded in connection with the 1994 transfers of
certain assets and liabilities of Systems Inc. to SPR Chicago and SPR Wisconsin.

General and Administrative Expenses. General and administrative expenses
increased 9% to $1.3 million in 1994 from $1.2 million in 1993. This increase is
primarily due to increases in management bonuses resulting from increased sales.
General and administrative expenses as a percentage of revenues decreased to 9%
in 1994 from 10% in 1993, attributable to leveraging the rapid growth in
revenues.

UNAUDITED QUARTERLY RESULTS

The following tables set forth certain unaudited quarterly data for the
periods shown:

<TABLE>
<CAPTION>
1994 QUARTER ENDED 1995 QUARTER ENDED 1996 QUARTER ENDED
------------------------------------- ------------------------------------- -----------------------------
MAR. 31 JUNE 30 SEP. 30 DEC. 31 MAR. 31 JUNE 30 SEP. 30 DEC. 31 MAR. 31 JUNE 30 SEP. 30
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues......... $3,513 $3,733 $3,828 $3,723 $4,474 $5,341 $6,302 $6,791 $7,443 $7,644 $8,360
Gross profit..... 990 1,090 1,225 1,068 1,390 1,678 2,104 2,211 2,273 2,159 2,603
</TABLE>

Operating results fluctuate based upon the timing of service offering
expansion activities, the hiring and training of consultants, the initiation and
completion of engagements, the timing of corporate expenditures and the number
of billable days in a quarter.

LIQUIDITY AND CAPITAL RESOURCES

The Company has financed its growth principally through cash flows from
operations. The Company's primary source of liquidity is the collection of its
accounts receivable. Accounts receivable have grown as the Company's operations
have grown. Receivables increased to 42 days of revenues at October 31, 1996
from 40 days of revenues at October 31, 1995. The Company's ability to reduce
significantly the aging of its outstanding receivables is limited because of a
continuing general trend by clients to slow their payment of invoices.
Specifically, one significant client has slowed its payments from approximately
10 days during 1995 to over 40 days in September, 1996. The Company has
established a revised payment plan with this client, effective January 1997,
providing for payment within 10 days of the invoice date. The Company continues
to work with other clients to attempt to shorten receivable cycles on a
case-by-case basis.

Cash flow provided by operating activities, primarily to fund the growth in
accounts receivable, totaled $1.3 million and $1.6 million for the ten months
ended October 31, 1996 and 1995, respectively and $1.6 million, $1.3 million and
$0.6 million for the years ended December 31, 1995, 1994, and 1993,
respectively. Cash provided by (used in) the Company's investing activities,
primarily to fund capital expenditures, totaled ($0.7) million and $0.1 million
for the ten months ended October 31, 1996 and 1995, respectively, and ($0.1
million), ($0.2 million) and ($0.5 million) for the years ended December 31,
1995, 1994, and 1993, respectively. Net cash (used in) financing activities
consisted primarily of payments on a note payable to Eugene Figliulo and
dividend distributions totaled ($1.1 million) for the ten months ended October
31, 1996 and ($1.5 million) for the ten months ended October 31, 1995 and ($1.5
million), ($0.4 million) and ($0.1 million) for the years ended December 31,
1995, 1994 and 1993, respectively.

The Company has supplemented cash generated by operations periodically with
short-term borrowings under lines of credit and a term loan. The proceeds from
the Company's $0.3 million term loan funded furniture and equipment purchases
for the Company's Chicago facility. The note matures on December 31, 2000, bears
interest at 9% per annum, with principal and interest payable monthly, and is
secured by certain accounts receivable and other assets. As of October 31, 1996,
the term note had an outstanding balance of $0.2 million. The Company intends to
pay the term note with part of the net proceeds from the Offering.

23
<PAGE> 25

Due to the significant growth the Company has experienced, two lines of
credit were established in 1996. These lines of credit provide for maximum
borrowings of $2.5 million and are limited based upon a percentage of eligible
accounts receivable. On October 31, 1996 there was $0.6 million outstanding on
the lines. Interest rates on the lines of credit are at each of the respective
bank's prime rate and are collateralized by certain assets including accounts
receivable. One agreement, which provides for maximum borrowings of $2.0
million, expires in May 1997. The other agreement, which provides for maximum
borrowings of $0.5 million, has no expiration date.

The Company believes that cash flow from operations, the net proceeds of
the Offering and available borrowings will be sufficient to meet its operating
needs and capital expenditures for the foreseeable future.

24
<PAGE> 26

BUSINESS

COMPANY OVERVIEW

SPR has over 23 years of experience in providing IT services to clients in
a variety of industries, including financial services, healthcare, insurance,
manufacturing, oil and gas, transportation and utilities. The Company focuses
its marketing efforts on Fortune 1000 companies and other large organizations
which have complex IT operations and significant IT budgets. SPR's objective is
to become the leading IT services provider to both new and existing clients.
Over the past several years, the Company has shifted its focus from contract
programming to strategic planning and project management engagements. SPR
currently provides the following service offerings: (i) General Consulting, (ii)
Systems Re-engineering, (iii) Century Date Compliance, (iv) Systems Maintenance
and Support and (v) Information Delivery Services. Within each of these service
offerings, the Company provides three levels of consulting support which are
distinguished by the degree of responsibility the Company assumes: strategic
planning, project management and implementation. The Company believes that this
breadth of service and support fosters long-term client relationships, promotes
cross-selling opportunities and minimizes the Company's dependence upon any
particular service offering or client.

The Company currently has three branch offices located in Chicago,
Milwaukee and Tulsa and approximately 400 IT consulting professionals, including
30 project managers and 36 independent contractors. The number of consultants
employed or retained by the Company as of October 31, 1996 was 35% greater than
at the end of 1995. The Company has made, and intends to continue to make,
significant investments in its systems infrastructure, recruiting organization,
training programs and marketing initiatives in an effort to sustain growth. SPR
intends to leverage these investments, as well as its operating expertise, by
opening additional branch offices. The Company recently hired a General Manager
to work with clients in Texas, where it plans to open a branch office in early
1997.

SPR has capitalized on the growing demand for IT services. The Company's
revenues have increased at a compound annual growth rate of approximately 36%
from 1992 through 1995. For the ten months ended October 31, 1996, the Company's
revenues increased 44% compared with the same period in the prior year. More
than 71% of the Company's revenues for the ten months ended October 31, 1996
were attributable to 37 companies which have been clients for three consecutive
years or longer.

INDUSTRY OVERVIEW

Dataquest Incorporated estimates total expenditures for professional IT
services in the United States to be $54.1 billion in 1996. The professional IT
services market, consisting of consulting and education, systems integration and
development and systems management services, is expected to grow at a compound
annual growth rate of approximately 14% over the next three years, reaching
$79.6 billion by 1999. According to International Data Corporation, large
organizations, which make up the Company's primary target market, are expected
to account for approximately 46% of total expenditures in this market in 1996.

The Company's experience is that many of these organizations are finding it
increasingly difficult and costly to internally maintain their existing systems.
Management believes that over 75% of existing mainframe and mid-range systems
will still be in operation seven to ten years from now as businesses will
continue to require massive data storage capabilities and tremendous processing
power, which are most efficiently provided by mainframe technology. As providers
of IT services focus more on the client/server segment of the market, however,
fewer professionals possess the skills necessary to support and maintain
existing mainframe and mid-range systems. The Company believes these factors
provide it with a substantial growth opportunity within the IT services
industry.

In addition, the Company believes that clients will continue to maintain
and improve their existing systems because: (i) existing systems represent an
enormous investment which may prove too risky and expensive to completely
replace; (ii) mainframe computing is increasingly being utilized in new ways as
Internet/intranet technologies develop; (iii) existing systems are critical to
the functioning of clients' businesses as they contain vital business knowledge
needed to build replacement systems; and (iv) regardless

25
<PAGE> 27

of which front-end computing platform is utilized, clients still need to access
data resident in mainframe computers.

The Company also is capitalizing on the substantial growth opportunity
created by the year 2000 problem, the software glitch that will prevent
computers from properly recognizing dates after the year 1999. Coding 19YY as YY
eliminates two characters from each date reference thereby preserving
substantial amounts of disk storage and memory. A date shown as YY/MM/DD
provides many calculation options within a system, such as age, interest
computations, inventory, materials planning, shelf life, shipping dates and
billing. The problem with this programming format is that in the year 2000, when
YY=00, none of the calculations can work properly. If corrections are not made
prior to January 1, 2000, computer systems may fail which could cause businesses
to stop functioning properly. This abbreviated date-coding format is prevalent
in core, mission-critical systems, which comprise millions of lines of computer
code in existing systems. The data used and generated by these systems are
heavily integrated into multiple files and databases. This data integration
typically results in thousands of interfaces, each of which must be analyzed,
changed and tested to correct the problem, while minimizing the impact on
ongoing operations. Capers Jones estimates the cost in the United States to
correct the year 2000 problem associated with software and databases to be $130
billion. In addition, Gartner Group, Inc. projects that by the end of 1997 only
20% of all systems in the world will be year 2000 compliant, and only 50% of
such systems will be year 2000 compliant by the end of 1999.

BUSINESS STRATEGIES

FOCUS ON PROJECT MANAGEMENT TO DELIVER VALUE-ADDED IT SOLUTIONS. In recent
years, the Company has shifted its focus from contract programming to project
management and strategic planning engagements, such as Century Date Compliance,
Systems Re-engineering and IDS. The Company believes that by providing such
value-added services it develops in-depth knowledge of its clients' existing
systems and gains a competitive advantage in assessing its clients' needs with
respect to emerging technologies and providing additional IT services.

ATTRACT, DEVELOP AND RETAIN QUALIFIED TECHNICAL CONSULTANTS. The Company
currently employs 14 full-time recruiters: six in Chicago, four in Tulsa and
four in Milwaukee. In addition, the Company employs one recruiting manager in
each location. Over the past 23 years, the Company has developed and refined an
internal recruiting database which facilitates rapid identification of
consultant candidates based upon skill and geographic location. To address the
shortage of qualified technical consultants, the Company is developing a
three-year training program. This program, targeted at college graduates with
degrees other than computer science, begins with a six- to eight-week
entry-level course specifically geared to Century Data Compliance. In addition,
the Company is developing several other training programs to enable its
consultants to enhance their careers and to improve their technical skills. See
"-- Recruiting and Training." To help retain experienced consultants, the
Company has established comprehensive employee welfare plans, and recently
implemented the Option Plan and the Employee Stock Purchase Plan. See
"Management -- Stock Plans."

DELIVER UNBIASED SERVICE OFFERINGS UTILIZING DISCIPLINED METHODOLOGIES. The
Company works closely with its clients' IT personnel from the strategic planning
phase through the completion of an engagement. To increase productivity and
efficiency, the Company has developed specific proprietary service
methodologies, Renovation(SM) and Renovation2000(SM), and a software analysis
tool, CodeVu(SM). See "-- Proprietary Service Methodologies." In implementing
its methodologies, the Company utilizes the best available third-party
application software and productivity tools without regard to specific
third-party vendor relationships, thereby avoiding the bias resulting from
promoting third-party products. The Company is capable, therefore, of offering
its clients an objective assessment of the advantages and disadvantages of the
latest packaged software applications, platforms, operating systems and
productivity tools.

FOCUS ON LEADING TECHNOLOGIES. The Company maintains and continues to build
expertise not only in mainframe applications but also in other high demand
technologies, such as Internet/intranet applications,

26
<PAGE> 28

open computing systems, object oriented solutions and relational database
management systems. SPR has developed, and intends to continue developing,
relationships with software product developers and research institutions to
remain on the leading edge of technological development and to provide its
clients with technologies that are best suited to their individual needs.

GROWTH STRATEGIES

Historically, the Company has grown by developing new service offerings and
expanding its client base. The Company may also pursue growth through selected
geographic branch expansion and strategic acquisitions. Management believes that
its strategies have positioned the Company to achieve continued growth in
revenues and earnings. Key elements of the Company's growth strategies include
the following:

CAPITALIZE ON CENTURY DATE COMPLIANCE EXPERTISE. SPR was an early entrant
into the year 2000 segment of the market, completing its first Century Date
Compliance engagement in 1993. The Company has either completed or is in the
process of completing 25 Century Date Compliance assessments. Based upon such
assessments, the Company has been retained to implement 15 of its proposed
Century Data Compliance solutions and has successfully completed implementation
of five such solutions. The Company expects that its expertise in this industry
segment will result in additional Century Date Compliance engagements as the
year 2000 approaches. To date, the Company has found that many of its clients
request the Company not only to evaluate their Century Date Compliance needs,
but also to assess functional and technical quality in their application
portfolios and develop strategies for improvement. As a result of its Century
Date Compliance engagements, SPR expects to be strategically positioned to
provide additional IT services to clients who have already entrusted their core,
mission-critical systems to SPR.

LEVERAGE EXISTING CLIENT BASE. The Company intends to continue building
long-term client relationships. Its record of customer satisfaction and expanded
service offerings have contributed to the Company's ability to increase the
revenues generated from existing clients. For the ten month's ended October 31,
1996, the Company derived more than 71% of its revenues from 37 clients to which
it had provided IT services in the prior three consecutive years. The Company
intends to further penetrate its existing client base by providing additional
service offerings.

DEVELOP AND EXPAND CLIENT SERVICES. The Company believes there are
substantial opportunities for increasing revenues by developing and expanding
services offered to existing and prospective clients. In response to client
needs, SPR implemented its IDS service offering in the third quarter of 1995 and
established its first Virtual Insourcing Center in the third quarter of 1996.
IDS was introduced to provide end-users access to data locked within existing
systems. By incorporating technologies such as data warehousing, on-line
analytical processing ("OLAP"), data mining and the Internet/intranet, IDS helps
bridge the gap between modern technologies and existing systems. The Company's
Virtual Insourcing Centers augment its Systems Maintenance and Support service
offering and are logical extensions of the Company's Systems Re-engineering,
Century Date Compliance and General Consulting service offerings. See "-- Growth
Strategies -- Further Develop Virtual Insourcing Centers" and "-- Service
Offerings."

EXPAND GEOGRAPHIC PRESENCE. Geographic expansion will be driven primarily
by the growing need to service existing clients' divisions or affiliates in new
geographic locations, such as Texas. The Company has hired a General Manager for
the Texas region and anticipates opening a Texas branch in early 1997. The
Company also may pursue strategic acquisitions either to expand its geographic
presence or to complement its existing service offerings.

FURTHER DEVELOP VIRTUAL INSOURCING CENTERS. In order to capitalize on the
corporate trend towards outsourcing, the Company intends to continue developing
Virtual Insourcing Centers. Equipped with a variety of computer hardware,
software and networking technologies and systems, these centers enable the
Company to provide the full range of its service offerings in a Company facility
rather than at its clients' facilities. The Virtual Insourcing Centers also
enable the Company to assume off-site project management responsibilities and to
complete Century Date Compliance and Systems Re-engineering and Systems
Maintenance and Support engagements without interrupting its clients'
businesses. In addition, Virtual Insourcing Centers allow

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<PAGE> 29

the Company to implement the testing phases of its Renovation(SM) and
Renovation2000(SM) methodologies seven days a week, rather than only on weekends
when clients are not utilizing their systems.

SERVICE OFFERINGS

Since its inception, the Company has provided technical personnel to
augment its clients' internal IT departments. Over the past several years,
however, the Company has focused its efforts on providing higher-end service
offerings. The Company's current service offerings include: (i) General
Consulting; (ii) Systems Re-engineering; (iii) Century Date Compliance; (iv)
Systems Maintenance and Support; and (v) IDS. The Company offers each of its
five service offerings either independently or as part of a comprehensive
solution and performs these services on a "time and materials" basis. Within
each of its service offerings, the Company provides three levels of consulting
support which are distinguished by the degree of responsibility the Company
assumes: strategic planning, project management and implementation. The amount
of responsibility assumed by the Company generally depends upon a client's
in-house capabilities and desire to outsource IT functions. Based upon client
needs, SPR can provide strategic planning, project management or implementation
either at its clients' facilities or off-site at SPR's Virtual Insourcing
Centers. See "-- Growth Strategies -- Further Develop Virtual Insourcing
Centers." SPR employs proven proprietary service methodologies and software
analysis tools to deliver these services. See "-- Proprietary Service
Methodologies."

[GRAPHICS REGARDING THE COMPANY'S SERVICE OFFERINGS]

<TABLE>
<CAPTION>
<S><C>
STRATEGIC PROJECT
PLANNING MANAGEMENT IMPLEMENTATION
| | |
| | |
|___ __________________________SERVICE OFFERINGS______________________ _____|
| | | | |
| | | | |
| | | | |
Systems Information
General Systems Century Date Maintenance Delivery
Consulting Re-engineering Compliance and Support Services
</TABLE>

GENERAL CONSULTING. General Consulting consists of providing technical
personnel with expertise across numerous computing platforms to augment clients'
internal IT departments. These services are provided on an as-needed basis and
cover a broad range of assignments including contract programming,
client-managed software development and maintenance engagements.

SYSTEMS RE-ENGINEERING. Systems Re-engineering consists of software
portfolio analysis and assessment, code stabilization, code modularization,
language upgrades or conversions, business specification extraction and system
documentation. The Company re-engineers existing systems to create more
manageable and functional applications and transitions existing systems to
distributed client/server and networking systems. This service offering allows
the Company's clients to leverage their investments in existing systems through
analysis, improvement, redesign and reuse of applications.

CENTURY DATE COMPLIANCE. Century Date Compliance consists of retrofitting
existing systems to address the date change coding problem that will be caused
by the year 2000. Century Date Compliance services

28
<PAGE> 30

include high-level organizational assessment of a client's software portfolio
and organizational readiness, engagement planning and management and
implementation. See "-- Industry Overview."

SYSTEMS MAINTENANCE AND SUPPORT. Systems Maintenance and Support consists
of providing the management, systems maintenance and support of all or part of
clients' existing IT applications. Using proprietary service methodologies and
tools, the Company provides transition planning, engagement management, program
maintenance and testing, production support and system improvements.

INFORMATION DELIVERY SERVICES. IDS consists of accessing, analyzing and
managing data which currently resides in existing systems. The Company uses its
expertise with existing systems and emerging technologies to provide its clients
with the ability to retrieve and utilize data resident in existing systems which
would otherwise be inaccessible. Services provided within IDS include
information harvesting, information analysis and information publishing, which
incorporate technologies such as OLAP and the Internet/intranet.

PROPRIETARY SERVICE METHODOLOGIES

The Company's proprietary service methodologies, Renovation(SM) and
Renovation2000(SM), and its software analysis tool, CodeVu(SM), provide SPR with
a disciplined approach to fulfill its engagements. Renovation(SM) and
Renovation2000(SM) enable the Company to deliver its service offerings through a
tested and repeatable format. CodeVu(SM) quickly and accurately provides
information concerning client software portfolios. These service methodologies
coupled with the software analysis tool facilitate the development of
well-defined tasks and timetables for each phase of an engagement from strategic
planning through implementation.

RENOVATION(SM). Renovation(SM) was first used by the Company in 1988 for
Systems Re-engineering engagements. The methodology employs a four phase
approach: assessment, improvement, transformation and preservation. In the
assessment phase, the system is analyzed for architectural deficiencies and a
strategy is developed for correcting these deficiencies and transforming the
existing architecture. In the improvement phase, commercially available tools
and internally developed techniques are applied to implement the strategy
developed in the assessment phase. In the transformation phase, the newly
re-engineered system is transformed into a new architectural paradigm. In the
preservation phase, quality assurance procedures are developed. These procedures
are designed to help prevent the degradation of the system after the Systems Re-
engineering process is complete, thereby protecting the client's investment in
its existing systems.

RENOVATION2000(SM). Renovation2000(SM) is SPR's methodology for Century
Date Compliance engagements. This methodology employs a repeatable process
which, in conjunction with the best available third-party application software
and productivity tools, analyzes, locates and retrofits all programs and data
affected by the absence of a century date field to permit processing of dates
after 1999. This methodology enables the Company to capture information allowing
the refinement of the process and the preparation of estimates and schedules
throughout the engagement.

CODEVU(SM). CodeVu(SM), which runs on mainframe and personal computing
platforms, analyzes source code and provides quantitative information at the
program and system level. CodeVu(SM) provides insight regarding the technical
quality of the source code, identifies programs that are the most costly to
maintain and represent the highest risk and identifies and locates potential
problems hidden within the code. This tool has been used successfully by the
Company in a large number of engagements, including Systems Re-engineering,
Century Date Compliance and Systems Maintenance and Support. CodeVu(SM) is often
integrated into client environments to assist with the maintenance and
preservation of source code.

MARKETING AND SALES

SPR marketing representatives are assigned to a limited number of accounts
in order to develop an in-depth understanding of each client's individual needs
and to build long-term client relationships. These representatives are
responsible for providing highly responsive service and ensuring that the
Company's service offerings achieve client objectives. In many instances, a
portion of SPR's marketing activity is carried out by senior Company executives.

29
<PAGE> 31

The Company employs a variety of business development and marketing
techniques to communicate directly with current and prospective clients,
including (i) various print and direct mail advertisements, (ii) participation
in print and live interviews, roundtable discussions and seminars, and (iii) a
World Wide Web site (www.sprinc.com). In addition, the Company believes that its
President and Chairman is recognized as an expert concerning the year 2000
problem. He has participated, often with other service providers, research
organizations and productivity tool and hardware companies, in print, television
and live interviews and seminars concerning this problem. The Company believes
these activities promote greater client awareness and enhance the SPR brand
name.

CLIENT BASE

The Company serves clients in a diverse range of industries thereby
mitigating cyclical effects of any one industry or market. The Company derives
an additional level of diversification from certain of its clients. Different
operating divisions of a given client may utilize any one or several services
offered by SPR, which helps mitigate the risk of customer concentration. During
1995, SPR's ten largest clients accounted for approximately 51% of the Company's
revenues and Allstate Insurance Company accounted for approximately 11% of its
revenues.

The following table shows selected clients, categorized by industry group,
for which the Company provided services in the ten months ended October 31,
1996. Revenues derived from any particular client engagement vary from year to
year. The Company derived an aggregate of approximately $12.2 million of
revenues for the ten months ended October 31, 1996 from the clients listed
below, representing approximately 46% of the Company's total revenues for that
period and 40% and 35% for the years ended December 31, 1995 and December 31,
1994, respectively.

FINANCIAL SERVICES
Comdisco, Inc.
First Data Corporation Oil Card Services
Firstar Information Services Corporation
Stein Roe & Farnham Incorporated
Trans Union
INSURANCE
Allstate Insurance Company

Blue Cross Blue Shield of the Rochester Area

CUNA Mutual Group

Kemper National Insurance
The Lincoln National Life Insurance Company

Viking Insurance Company of Wisconsin

Wausau Insurance
OIL & GAS
Chevron Information Technology Company
Citgo Petroleum Corporation

MAPCO

Oxy USA Inc.
HEALTHCARE
Baxter Healthcare Corporation
G E Medical Systems

G.D. Searle & Co.

MANUFACTURING
Case Corporation
Dowell Schlumberger Company
Nalco Chemical Company
Navistar International Transportation Corp.
The Williams Companies
Cessna Aircraft Company
TRANSPORTATION
Chicago Transit Authority
General Electric Railcar Services Corporation

Sabre Group Holdings, Inc.

OTHER INDUSTRIES
Kraft Foods

Land's End

Manpower International Incorporated
The Peoples Gas, Light and Coke Company
Sears, Roebuck and Co.
Spiegel, Inc.
State of Wisconsin
Sun Company Inc.
United Video, Inc.

WorldCom

30
<PAGE> 32

EMPLOYEES

As of October 31, 1996, the Company had approximately 400 IT consulting
professionals, of which 361 were employees and 36 were independent contractors.
Of these IT consulting professionals, 30 were project managers. As of such date,
the Company had 412 employees: 203, 127 and 82 in Chicago, Tulsa and Milwaukee,
respectively.

The Company has three categories of IT consultants: salaried employees,
associate employees and independent contractors. Salaried employees are
full-time employees of the Company and are eligible for all benefits offered by
the Company. Associate employees are eligible for the same benefits offered to
salaried employees but are paid on an hourly basis and, as such, are not
entitled to paid time off in the form of sick days, personal days or vacation.
Approximately 76% of the Company's IT consultants are salaried employees and 15%
are associate employees. Independent contractors are not employees of the
Company, but are paid on an hourly basis and are not entitled to any benefits
offered to Company employees. Approximately 9% of the Company's IT consultants
are independent contractors.

The Company is not a party to any collective bargaining agreements and
considers its relationships with its employees to be good.

RECRUITING AND TRAINING

The Company employs 14 full time recruiters and 3 recruiting managers who
are responsible for recruiting and establishing relationships with qualified
technical personnel. Technical personnel meeting the Company's standards are
added to a computerized database. Recruiting managers maintain regular contact
with technical personnel, monitor their availability and changes in skill levels
and update the database, which has been maintained for over 23 years. See "Risk
Factors -- Need to Attract and Retain Qualified Technical Consultants."

In the first quarter of 1996, the Company implemented an entry-level
training program to address the current shortage of available technical
consultants for its Century Date Compliance engagements. The Company actively
recruits college graduates with degrees other than computer science, such as
music, mathematics and philosophy. Based upon its recent experience with the
training program, the Company believes such individuals have the aptitude to
develop the requisite systems and programming skills. The Company enrolls these
individuals in an intensive six- to eight-week entry-level training course. Upon
completion of training, the Company places these individuals on Century Date
Compliance engagements, where they work under the supervision of experienced
consultants. The Company enters into employment agreements with these
individuals, whereby the consultants agree to reimburse the Company for some or
all of the cost of their training if they leave the Company within four years.
Since the commencement of this entry-level training program on February 15,
1996, 46 individuals have entered and successfully completed training. The
Company is currently conducting an additional entry-level training class for 14
individuals and intends to conduct additional training classes on a regular
basis in 1997. Advanced course modules are under development and will
concentrate on the Company's other service offerings, such as Systems
Re-engineering and IDS.

COMPETITION

The market for IT professional services is intensely competitive on local
and national level, and the Company competes frequently with a variety of
companies for both the same clients and qualified technical consultants. These
companies include: "Big Six" accounting firms, systems consulting and
implementation firms, application software firms, service groups of computer
equipment companies, general management consulting firms and programming
companies. The Company considers large organizations with complex IT needs to be
among its primary clients. Within a given market, there are a limited number of
such potential clients, some of which have designated only certain IT
professional services companies as approved providers of IT professional
services. Primary competitive factors for obtaining and retaining clients
include: price, quality of services, technical expertise and responsiveness to
client needs. The primary competitive factors in

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<PAGE> 33

attracting and retaining qualified candidates as consultants are competitive
compensation arrangements and consistent exposure to high quality and varied
engagements.

Several of the Company's competitors are substantially larger than the
Company and have greater financial and other resources. Many of such competitors
have also been in business longer than the Company and have significantly
greater name recognition throughout the United States, including the geographic
areas in which the Company operates and into which it may expand. In addition,
such companies are able to meet a broader range of a client's IT consulting
needs and serve a broader geographic range than the Company, which permits such
companies to better serve national accounts. Although the Company believes that
it competes, and will continue to compete, favorably with existing and future
competitors, there can be no assurance that the Company will continue to do so.
See "Risk Factors -- Competition" and "Risk Factors -- Need to Attract and
Retain Qualified Technical Consultants."

INTELLECTUAL PROPERTY RIGHTS

Software developed by SPR in connection with a client engagement typically
becomes the exclusive property of the client. The Company relies upon a
combination of nondisclosure and other contractual arrangements and trade
secret, copyright and trademark laws to protect its proprietary rights, the
rights of third parties from whom the Company licenses intellectual property and
the proprietary rights of its clients. The Company enters into confidentiality
agreements with its consultants in an effort to prevent the distribution of
proprietary information. See "Risk Factors -- Intellectual Property Rights."

SPR(SM), Renovation(SM), Renovation2000(SM), CodeVu(SM) and the SPR logo
are service marks of the Company. The Company holds no patents or registered
copyrights, and has no present intention of registering any copyright or filing
any patent applications. See "-- Propriety Methodologies."

PROPERTY

SPR leases its principal executive offices, which are located at 2015
Spring Road, Oak Brook, Illinois 60521, and also leases facilities in Tulsa,
Oklahoma and Milwaukee, Wisconsin. These leases expire on January 21, 2002,
December 31, 2000 and May 31, 2001, respectively. The Company's principal
executive offices contain a Virtual Insourcing Center. The Company has recently
leased space in Oak Brook, Illinois to house an additional Virtual Insourcing
Center. The Company believes it has adequate space to conduct its current
business. The Company anticipates, however, that additional space will be
required as business expands but believes that it will be able to obtain
suitable space as needed. See Note 5 of Notes to Financial Statements.

LEGAL PROCEEDINGS

The Company is not involved in any material legal proceedings.

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<PAGE> 34

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The directors, executive officers and managers of the Company, and their
ages and positions as of November 1, 1996, are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------ --- ------------------------------------------
<S> <C> <C>
Executive Officers and
Directors
Robert M. Figliulo............ 42 President and Chairman of the Board of
Directors
Michael J. Fletcher........... 41 Executive Vice President, General Manager
-- Tulsa and Director
David A. Figliulo............. 35 Executive Vice President and Director
Stephen T. Gambill............ 46 Chief Financial Officer
Ronald L. Taylor(1)........... 53 Director
Sydnor W. Thrift, Jr.(2)...... 67 Director
David P. Yeager(1)(2)......... 43 Director
Managers
Rene M. Potter................ 40 Marketing Manager
Patrick D. Sloan.............. 36 General Manager -- Milwaukee
Vincent Chapa III............. 40 General Manager -- Texas
</TABLE>

- -------------------------
(1) Member of the Audit Committee of the Board of Directors.

(2) Member of the Compensation Committee of the Board of Directors.

Directors hold office for one year and until their successors are elected
and qualified. Executive officers of the Company are appointed by, and serve at
the direction of, the Board of Directors. The directors, executive officers and
managers listed below have held their positions with SPR listed in the above
table since October 31, 1996 and have held the positions described below with
the Company's predecessors for the periods indicated.

Robert M. Figliulo served as President of SPR Chicago since January 1994.
Since joining the Company in May 1976, Mr. Figliulo has held numerous positions,
including Programmer, Analyst, Account Manager, General Manager of both the
Tulsa and Chicago offices and Vice President of Marketing. Mr. Figliulo received
a Masters in Business Administration from the University of Chicago in 1987. Mr.
Figliulo is the brother of David Figliulo and the son of Eugene Figliulo.

Michael J. Fletcher served as President of SPR Tulsa since September 1994.
Mr. Fletcher joined SPR in 1986 as a Recruiter in the Chicago office and since
that time has held a variety of positions in both the Tulsa and Chicago offices
including Branch Manager of the Tulsa office, Field Support Representative and
Technical Manager. Prior to joining SPR, Mr. Fletcher worked in the staffing
support and personnel recruiting industry.

David A. Figliulo served as Vice President of SPR Chicago since January
1994. Since joining the Company in July 1989, Mr. Figliulo has served as an
Account Manager and as the Vice President of Sales in the Company's Chicago
office. Prior to joining the Company, Mr. Figliulo worked as an Account Manager
for Baxter Healthcare, an international pharmaceutical company, in the Oxygen
Systems Division and was recognized as the division's top salesman in the United
States in 1987, 1988 and 1989. Mr. Figliulo is the brother of Robert Figliulo
and the son of Eugene Figliulo.

Stephen T. Gambill served as Chief Financial Officer of SPR Chicago since
July 1996. From 1982 through July 1996, Mr. Gambill, a certified public
accountant, held various financial management positions within Natural Gas
Pipeline Company of America, a large natural gas pipeline, and most recently
served as its Director of Accounting. Prior to 1982, Mr. Gambill held various
auditing positions with the public accounting

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<PAGE> 35

firms of Coopers and Lybrand and Deloitte, Haskins & Sells. Mr. Gambill received
a Masters in Business Administration degree from the University of Chicago in
1987.

Ronald L. Taylor has served since 1987 as a director, President and Chief
Operating Officer of DeVry, Inc., one of the largest publicly-owned,
degree-granting, higher education companies in North America. Mr. Taylor
co-founded Keller Graduate School of Management and was, from 1973 to 1987, its
President and Chief Operating Officer. Mr. Taylor received a Masters in Business
Administration degree from Stanford University in 1971.

Sydnor W. Thrift, Jr. has served as Director of Player Development for the
Baltimore Orioles professional baseball team since November 1994. From November
1991 through October 1994, Mr. Thrift served as the Assistant General Manager
for the Chicago Cubs professional baseball team. From January 1991 through
October 1991, Mr. Thrift served as a consultant to three professional baseball
teams: the San Francisco Giants, the Los Angeles Dodgers and the New York Mets.

David P. Yeager has served as Vice Chairman of the Board of Directors of
Hub Group, Inc., the largest intermodal marketing company in the United States,
since January 1992. Mr. Yeager has also served as Chief Executive Officer of Hub
Group, Inc. since March 1995 and was President of Hub Group, Inc. from October
1985 through December 1991. Mr. Yeager received a Masters in Business
Administration degree from the University of Chicago in 1987.

Rene M. Potter served as Vice President of SPR Tulsa since September 1994.
Since joining the Company in June 1985, Ms. Potter has held numerous positions,
including Recruiter, Marketing Manager and Account Manager in the Company's
Tulsa office. Prior to joining the Company, Ms. Potter worked as a Senior
Recruiter for Computer Dynamics, a technical recruiting company, and as a Senior
Technical Recruiter for Management Recruiters, a technical and management
recruiting company, and managed her own contingency search firm in Houston,
Texas.

Patrick D. Sloan served as General Manager of SPR Wisconsin since November
1996. Since joining the Company in February 1986, Mr. Sloan has held numerous
positions in both the Chicago and Milwaukee offices, including Field Support
Representative, Account Manager, Manager of Central Resources, Manager of
Technology Services and Director of Technical Resources. Prior to joining SPR,
Mr. Sloan served as Assistant Branch Manager for TEC, a Chicago-based data
processing placement firm.

Vincent Chapa III was hired in September 1996 to serve as the General
Manager of the Texas branch office, which the Company plans to open in early
1997. From January 1995 through July 1996, Mr. Chapa served as Vice President of
Sales for Sterling Software, an international software development company. From
October 1992 through January 1995, Mr. Chapa served as Manager of Latin American
Sales for Uniface Corporation, a software development company. From February
1990 through October 1992, Mr. Chapa served as Regional Manager for Legent
Corporation, an international software development company.

BOARD COMMITTEES

In October 1996, the Board of Directors established a Compensation
Committee consisting of Messrs. Thrift and Yeager and an Audit Committee
consisting of Messrs. Taylor and Yeager. The Compensation Committee makes
recommendations to the Board of Directors concerning compensation of the
Company's directors, officers and employees. The Compensation Committee also
oversees and administers the Employee Stock Purchase Plan and the Option Plan.
The Audit Committee reviews the results and scope of audits and other services
provided by the Company's independent auditors and monitors and reviews the
Company's financial policies and internal control procedures.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Prior to the Mergers, none of SPR Chicago, SPR Tulsa or SPR Wisconsin had a
compensation committee or any other committee of their respective boards of
directors performing similar functions. Decisions concerning compensation of
executive officers were made by the boards of directors of each of the
respective companies, subject to certain limitations, such as maximum
compensation thresholds, imposed by

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<PAGE> 36

Systems Inc. See "Certain Transactions." Mr. Robert Figliulo and Mr. David
Figliulo, former executive officers and directors of SPR Chicago, determined
their 1995 compensation. Mr. Fletcher and Ms. Potter, former executive officers
and directors of SPR Tulsa, determined their 1995 compensation. Mr. John
Figliulo, the sole officer and director of SPR Wisconsin, determined his 1995
compensation.

DIRECTOR COMPENSATION

Directors who are not employees of the Company receive $1,000 for each
board meeting attended and $500 for each committee meeting attended on a date
other than a date on which the board meets and are reimbursed for their
reasonable out-of-pocket expenses incurred in attending board and committee
meetings. These directors are also entitled to receive stock options under the
Option Plan for serving on the Board of Directors. See "Management -- Stock
Plans." Employee directors do not receive additional compensation for serving on
the Board of Directors.

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth certain information with respect to the
annual and long-term compensation of the Company's President and the other two
executive officers who earned in excess of $100,000 in salary and bonus for the
year ended December 31, 1995 (the "Named Executive Officers").

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------- ALL OTHER
NAME AND PRINCIPAL POSITION SALARY BONUS COMPENSATION(1)
- --------------------------------------------------------- -------- -------- ---------------
<S> <C> <C> <C>
Robert M. Figliulo....................................... $137,800 $102,318 $ 250
President and Chairman of the Board
of Directors
Michael J. Fletcher...................................... 110,300 84,775 $ 250
Executive Vice President, General Manager-Tulsa and
Director
David A. Figliulo........................................ 92,800 71,555 $ 250
Executive Vice President and Director
</TABLE>

- -------------------------
(1) Represents matching payments under the Company's 401(k) Plan.

Option Grants

There were no options or stock appreciation rights granted and no
restricted stock was issued during fiscal 1995 by the Company. The Company has
granted stock options to purchase 442,000 shares of Common Stock to certain
employees (other than the Named Executive Officers) and outside directors at an
exercise price of $14.00 per share.

EMPLOYMENT AGREEMENTS

The Company intends to enter into substantially identical employment
contracts with Robert Figliulo, David Figliulo, Michael Fletcher, Rene Potter,
Stephen Gambill, Pat Sloan and Vincent Chapa. These agreements provide that upon
termination of employment by the Company, other than for Cause (as defined in
the agreements) or retirement, the Company shall pay the executive an amount
equal to the executive's annual base compensation in effect at the time of
termination. The agreements also provide that in the event of a Change in
Control (as defined in the agreements) and the occurrence of certain events, and
to the extent deductible under then applicable tax laws, the Company shall pay
the executive a payment equal to the sum of (i) the executive's most recent base
annual compensation in effect at the date of the Change in Control, plus (ii)
the cash value of the insurance protection (including dependent coverage) then
in effect with respect to the Company's health insurance plan, based upon the
cost of such insurance to the Company for a 12-month period following the Change
in Control date. Each of these executives is subject to a covenant not to
compete, a nonsolicitation covenant and a nondisclosure covenant.

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<PAGE> 37

STOCK PLANS

Employee Stock Purchase Plan. The Company has reserved an aggregate of
500,000 shares of Common Stock for issuance under the Company's Employee Stock
Purchase Plan (the "Purchase Plan"). The Purchase Plan is intended to qualify
under Section 423 of the Internal Revenue Code of 1986, as amended (the "Code"),
and will permit eligible employees of the Company to purchase Common Stock
through payroll deductions of up to 20% of their total cash compensation;
provided that employees may be prohibited from purchasing more than $25,000
worth of stock in any calendar year. The Purchase Plan has two six-month
offering periods, beginning on January 1 and July 1 of each year, with the first
offering period commencing on the date of this Prospectus. The purchase price of
Common Stock purchased under the Purchase Plan shall be the lesser of (i) 85% of
the fair market value of the Common Stock (as calculated pursuant to the
Purchase Plan) on the first day of an offering period or (ii) 85% of the fair
market value of the Common Stock on the last day of an offering period. The
Purchase Plan is administered by the Compensation Committee of the Board of
Directors. The Board of Directors is authorized to amend or terminate the
Purchase Plan at any time. However, the Board of Directors may not, without
stockholder approval, modify the Purchase Plan if stockholder approval of the
amendment is required for the Purchase Plan to continue to comply with the
requirements of Rule 16b-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or Section 423 of the Code.

Combined Incentive and Non-statutory Stock Option Plan. The Company has
reserved an aggregate of 800,000 shares of Common Stock for issuance under the
Option Plan, which may be granted to employees, officers and directors of the
Company. The Option Plan is administered by the Compensation Committee of the
Board of Directors. The Compensation Committee provides for awards of
Non-statutory Stock Options ("NQSOs") and Incentive Stock Options ("ISOs") to
purchase shares of Common Stock and stock appreciation rights ("SARs"), provided
that any director who is not an employee of the Company may not be awarded an
ISO. The Option Plan limits the aggregate fair market value of the shares of
Common Stock with respect to which ISOs are exercisable for the first time in
any calendar year to $100,000. No such annual limitation applies to NQSO grants
under the Option Plan.

The exercise price for options and SARs may be paid: (i) in cash; (ii) by
surrendering shares already owned by the optionee; or (iii) if the Compensation
Committee so determines by instructing a broker to sell enough of the optionee's
exercised shares to deliver to the Company sufficient sales proceeds to pay the
exercise price. The exercise price per share of Common Stock may not be less
than 85% (100% in the case of an ISO) of the fair market value of the Common
Stock (as calculated pursuant to the Option Plan) on the date the stock option
is granted. The base value of an SAR will equal not less than 85% of the market
value of a share of Common Stock on the grant date. Option agreements covering
options and SARs to be granted under the Option Plan will generally provide that
such options and SARs will be exercisable within fifteen years from the date of
grant (ten years in the case of ISOs) and will generally vest in annual
installments as determined by the Compensation Committee. In the case of any
eligible employee who owns or is deemed to own stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company, the
exercise price of any ISOs granted under the Option Plan may not be less than
110% of the fair market value of the Common Stock on the date of grant and the
exercise period may not exceed five years from the date of grant.

The Board of Directors can terminate or amend the Option Plan at any time,
except that no such action generally will be able to adversely affect any right
or obligation regarding any awards previously made under the Option Plan without
the consent of the recipient. In addition, no amendment may be effective without
the prior approval of stockholders, if such approval is required for the Option
Plan to continue to comply with applicable regulations of the Code and the
Securities and Exchange Commission (the "Commission"). In the event of any
changes in the capital structure of the Company, such as a stock dividend or
stock split, the Board of Directors must make equitable adjustments to
outstanding unexercised awards and to the provisions of the Option Plan to
reflect any increase or decrease in the number of issued shares of Common Stock.
If the Company becomes a party to a merger, reorganization, liquidation or
similar transaction, the Board of Directors may make such arrangements it deems
advisable regarding outstanding awards, such as substituting new awards for
outstanding awards, assuming outstanding awards or terminating or paying for
outstanding awards.

Options to purchase 442,000 shares of Common Stock at an exercise price of
$14.00 per share have been granted under the Option Plan.

36
<PAGE> 38

CERTAIN TRANSACTIONS

The Company's business was started in 1973 by Systems Inc., which was
founded by Eugene Figliulo. By 1993, all the stock of Systems Inc. was owned by
Eugene Figliulo, his eight children and a nephew of Eugene Figliulo.

During 1993, 1994 and 1995, the Company made distributions of $80,955,
$744,559 and $800,663, respectively, to its stockholders to enable them to pay
income taxes attributable to S corporation income of the Company for such
periods.

In 1992 and 1993, Systems Inc. and Data Flex made loans to Eugene Figliulo
in the original principal amounts of $589,770 and $100,000, respectively. Such
loans are evidenced by separate unsecured promissory notes and bear interest at
6% per annum. As of October 31, 1996, the Systems Inc. note was paid in full and
the entire unpaid principal balance plus accrued interest due on the Data Flex
note was outstanding. The Data Flex note plus accrued interest is expected to be
paid with a portion of the proceeds of this Offering payable to Mr. Figliulo.

In 1994, SPR Chicago made an unsecured loan to Robert Figliulo in the
principal amount of $91,000. This loan is evidenced by a promissory note and
bears interest at 7% per annum. As of October 31, 1996, $46,479 plus accrued
interest was outstanding on this note.

During 1994, Systems Inc. transferred certain of its assets and liabilities
in Chicago, Tulsa and Milwaukee to three S corporations organized by the
respective executives primarily responsible for operations in each of those
locations. SPR Chicago, all of whose stock was owned by Robert Figliulo and
David Figliulo, acquired the Chicago operations. SPR Tulsa, all of whose stock
was owned by Michael Fletcher and Rene Potter (neither of whom is related to the
Figliulo family), acquired the Tulsa operations. SPR Wisconsin, all of whose
stock was owned by John Figliulo, acquired the Milwaukee operations. Systems
Inc. retained the trademark "SPR" and licensed it to each of these new
corporations for use in their respective geographic areas. Also in 1994, Systems
Inc. redeemed all of Eugene Figliulo's stock for an installment note in the
principal amount of $2,881,266, bearing interest at a rate of 6.75% per annum (
the "Redemption Note"). As of October 31, 1996, $801,266 was outstanding under
the Redemption Note, all of which is expected to be paid with a portion of the
net proceeds of the Offering received by the Company.

In connection with the transfers of assets and liabilities, SPR Chicago,
SPR Tulsa and SPR Wisconsin delivered to Systems Inc. notes in the principal
amounts of $1,350,133, $1,613,045 and $1,239,765, respectively. Each such note
was payable in monthly installments of principal and interest. In addition, each
corporation agreed to make an additional contingent payment to Systems Inc. in
the event certain "capital events" occurred prior to the one year anniversary
after the final payment is made on its respective note. The loan agreements
restricted borrowings, capital expenditures, amounts of compensation payable to
directors, officers and key employees, sales of assets, mergers, and certain
other business transactions; and the notes were collateralized by the stock of
the respective company and substantially all its assets.

SPR Chicago was reincorporated as a Delaware corporation upon the formation
of SPR and the Merger of SPR Chicago into SPR in October 1996. In the Merger,
Robert Figliulo and David Figliulo each received 1,476,914 shares of Common
Stock. Also in October 1996: (i) SPR Tulsa was merged into SPR and Michael
Fletcher and Rene Potter each received 647,571 shares of Common Stock in the
Merger; (ii) SPR Wisconsin was merged into SPR and John Figliulo received
462,197 shares of Common Stock in the Merger; and (iii) Systems Inc. and Data
Flex were merged into SPR. Each stockholder of Systems Inc. and Data Flex

37
<PAGE> 39

received in the Mergers the aggregate number of shares of Common Stock set forth
opposite their respective names below:

<TABLE>
<CAPTION>
NAME SHARES
------------------------------------------------------------------- ---------
<S> <C>
Eugene Figliulo.................................................... 71,685
Robert Figliulo.................................................... 182,386
David Figliulo..................................................... 182,386
John Figliulo...................................................... 182,386
Stephen Figliulo................................................... 182,386
Donald Figliulo.................................................... 182,386
Mark Figliulo...................................................... 182,386
James Figliulo..................................................... 182,386
Jeanne Young....................................................... 182,386
Michael Cymbala.................................................... 91,194
---------
Total......................................................... 1,621,967
=========
</TABLE>

The following stockholders of the Company will receive cash from the
proceeds of the Offering as follows: Eugene Figliulo will receive $801,266 in
full payment of the Redemption Note. Each of the Company's present stockholders
will receive distributions to pay their Federal and state income taxes
attributable to taxable S Corporation income prior to the closing of the
Offering. Such distributions are estimated to be as follows:

<TABLE>
<CAPTION>
NAME AMOUNT
------------------------------------------------------------------ ----------
<S> <C>
Eugene Figliulo................................................... $ 309,230
Robert Figliulo................................................... 541,521
David Figliulo.................................................... 541,521
John Figliulo..................................................... 308,389
Stephen Figliulo.................................................. 80,655
Donald Figliulo................................................... 80,655
James Figliulo.................................................... 80,655
Mark Figliulo..................................................... 80,655
Jeanne Young...................................................... 80,655
Michael Cymbala................................................... 39,076
Michael Fletcher.................................................. 178,494
Rene Potter....................................................... 178,494
----------
Total........................................................ $2,500,000
==========
</TABLE>

The Company intends to enter into a Registration Rights Agreement with
Robert Figliulo, David Figliulo, John Figliulo and Michael Fletcher covering an
aggregate of 532,184 shares of Common Stock. Such Registration Rights Agreement
provides these individuals with demand and piggyback registration rights which
become exercisable one year after the closing of the Offering and continue until
all such shares have been sold. See "Description of Capital
Stock -- Registration Rights."

The Company intends to enter into a tax indemnity agreement with each of
its current stockholders which provides, among other things, that the Company
will indemnify such stockholders against additional income taxes resulting from
adjustments made (as a result of a final determination made by a competent tax
authority) to the taxable income reported by the Company as an S corporation for
periods prior to the Offering, but only to the extent those adjustments result
in a decrease in income taxes otherwise payable by the Company as a C
corporation for periods after the Offering.

The Company intends to enter into a noncompetition, nonsolicitation and
confidentiality agreement with John Figliulo precluding Mr. Figliulo from
competing with the Company during his employment with the Company and for a
period of one year thereafter.

38
<PAGE> 40

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of October 31, 1996, as adjusted to reflect the
sale of the shares offered hereby, by (i) each person known by the Company to
own beneficially more than 5% of the Common Stock, (ii) each of the Company's
Directors, (iii) each of the Named Executive Officers, (iv) each of the Selling
Stockholders, and (v) all Directors and Executive Officers of the Company as a
group. Each person or entity named below has an address in care of the Company's
principal executive offices. The Company believes that the beneficial owners of
the Common Stock listed below, based on information furnished by such owners,
have sole voting and investment power with respect to such shares.

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO OFFERING NUMBER OF AFTER OFFERING(1)
-------------------- SHARES OFFERED --------------------
NAME SHARES PERCENT HEREBY SHARES PERCENT
- -------------------------------------------- --------- ------- -------------- --------- -------
<S> <C> <C> <C> <C> <C>
Robert M. Figliulo.......................... 1,659,400 26.2% 0 1,659,400 20.7%
David A. Figliulo........................... 1,659,400 26.2 0 1,659,400 20.7
Michael J. Fletcher......................... 647,571 10.2 0 647,571 8.1
Stephen T. Gambill.......................... 0 * 0 0 *
Ronald L. Taylor(2)......................... 10,000 * 0 10,000 *
Sydnor W. Thrift, Jr.(2).................... 10,000 * 0 10,000 *
David P. Yeager(2).......................... 10,000 * 0 10,000 *
John Figliulo(3)............................ 644,583 10.2 412,399 232,184 2.9
Rene M. Potter.............................. 647,571 10.2 35,000 612,571 7.7
James Figliulo.............................. 182,386 2.9 93,500 88,886 1.1
Stephen Figliulo............................ 182,386 2.9 93,500 88,886 1.1
Donald Figliulo............................. 182,386 2.9 93,500 88,886 1.1
Mark Figliulo............................... 182,386 2.9 93,500 88,886 1.1
Jeanne Young................................ 182,386 2.9 93,500 88,886 1.1
Michael Cymbala............................. 91,194 1.4 46,750 44,444 *
Eugene Figliulo............................. 71,685 1.1 71,685 0 *
All Directors and Executive Officers as a
Group (7 persons)(4)...................... 3,996,371 62.8 0 3,996,371 49.8
</TABLE>

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

(1) If the Underwriters' over-allotment option is exercised in full, the
following stockholders will sell pursuant to such option the number of
shares of Common Stock following their names and, after the Offering, will
beneficially own the number and percentage of shares of Common Stock
following their names:

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
AFTER OFFERING
---------------------
SHARES TO NUMBER OF
NAME BE SOLD SHARES PERCENT
- ----------------------------------------------------------------- --------- ---------- -------
<S> <C> <C> <C>
Rene M. Potter................................................... 260,834 351,737 4.4%
James Figliulo................................................... 26,212 62,674 *
Stephen Figliulo................................................. 26,212 62,674 *
Donald Figliulo.................................................. 26,212 62,674 *
Mark Figliulo.................................................... 26,212 62,674 *
Jeanne Young..................................................... 26,212 62,674 *
Michael Cymbala.................................................. 13,106 31,338 *
</TABLE>

(2) Consists of shares subject to an option granted under the Option Plan that
are exercisable within 60 days.

(3) Mr. Figliulo was the President, sole stockholder and sole director of SPR
Wisconsin prior to the Mergers.

(4) Includes 30,000 shares subject to options granted under the Option Plan that
are exercisable within 60 days.

39
<PAGE> 41

DESCRIPTION OF CAPITAL STOCK

GENERAL

The following brief description of the Company's capital stock does not
purport to be complete and is subject in all respects to applicable Delaware law
and to the provision of the Certificate of Incorporation and By-laws, copies of
which have been filed as exhibits to the Registration Statement on Form S-1 of
which this Prospectus is a part and to which exhibits reference is hereby made.

The authorized capital stock of the Company consists of 13,000,000 shares
of Common Stock, $.01 par value per share, and 3,000,000 shares of Preferred
Stock, $.01 par value per share. Immediately following consummation of the
Offering, there will be 8,000,000 shares of Common Stock outstanding, no shares
of Preferred Stock outstanding and 442,000 shares of Common Stock will be
issuable upon exercise of outstanding options (30,000 of which will be then
exercisable).

COMMON STOCK

Holders of Common Stock are entitled to one vote per share on all matters
to be voted upon by stockholders, including the election of directors. There are
no cumulative voting rights for the election of directors.

Holders of Common Stock are entitled to receive such dividends as may be
declared from time to time by the Board of Directors out of funds legally
available therefor after payment of dividends required to be paid on outstanding
Preferred Stock, if any. See "Dividend Policy." Holders of Common Stock are
entitled to share ratably in the net assets of the Company upon liquidation
after payment or provision for all liabilities and any preferential liquidation
rights of any preferred stock then outstanding.

Holders of Common Stock have no preemptive rights to purchase shares of
capital stock of the Company. Shares of Common Stock are not subject to any
redemption provisions and are not convertible into any other securities of the
Company. All outstanding shares of Common Stock are, and the shares of Common
Stock to be issued pursuant to the Offering will be, upon payment therefor, duly
authorized, validly issued, fully paid and non-assessable.

Prior to the Offering, there has been no public market for the Common
Stock. The Company has applied for listing of the Common Stock for quotation on
the Nasdaq National Market under the symbol "SPRI."

PREFERRED STOCK

The Board of Directors is authorized without stockholder action to adopt
resolutions to issue up to 3,000,000 shares of Preferred Stock, in one or more
series, with such powers, designations, preferences and relative, participating,
optional or other special rights, qualifications, limitations or restrictions as
will be set forth in such resolutions. The holders of Preferred Stock will have
no preemptive rights (unless otherwise provided in the applicable certificate of
designation). Such Preferred Stock may have voting or other rights which could
adversely affect the rights of holders of the Common Stock. In addition, the
issuance of Preferred Stock, while providing flexibility in connection with
possible acquisitions and other corporate purposes, could, under certain
circumstances, make it more difficult for a third-party to gain control of the
Company, discourage bids for the Common Stock at a premium, or otherwise
adversely affect the market price of the Common Stock. The Company has no
current plans to issue any shares of Preferred Stock.

DELAWARE LAW AND CERTAIN CERTIFICATE OF INCORPORATION AND BY-LAW PROVISIONS;
ANTI-TAKEOVER EFFECTS

The Company will be subject to the provisions of Section 203 of the
Delaware General Corporation Law (the "DGCL") upon consummation of this
Offering. Subject to certain exceptions, Section 203 prohibits a publicly held
Delaware corporation from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the date of the
transaction in which the person became an interested stockholder, unless the
interested stockholder attained such status with the approval of the Board of
Directors or the business combination is approved in a prescribed manner, or
certain other conditions are satisfied. A

40
<PAGE> 42

"business combination" includes mergers, asset sales and other transactions
resulting in a financial benefit to the interested stockholder. Subject to
certain exceptions, an "interested stockholder" is a person who, together with
affiliates and associates, owns, or within three years did own, 15% or more of
the corporation's voting stock.

The Company's By-laws provide that for nominations for the Board of
Directors or for other business to be properly brought by a stockholder before
an annual meeting of stockholders, the stockholder must first have given timely
notice thereof in writing to the Secretary of the Company. To be timely, a
notice must be delivered not less than 60 days nor more than 90 days prior to
the first anniversary of the preceding year's annual meeting. The notice must
contain, among other things, certain information about the stockholder
delivering the notice and, as applicable, background information about each
nominee or a description of the proposed business to be brought before the
meeting. The Company's By-laws provide that any director may be removed only for
cause upon the affirmative vote of at least 66% of the shares entitled to vote
for the election of directors.

The Company's By-laws provide that special meetings of stockholders may be
called only by the Chairman of the Board of Directors or the President of the
Company. These provisions could have the effect of delaying until the next
annual stockholders meeting stockholder actions which are favored by the holders
of a majority of the outstanding voting securities of the Company.

The existence of unissued Preferred Stock enables the Board of Directors to
render more difficult or to discourage an attempt to obtain control of the
Company by means of a tender offer, proxy contest, merger or otherwise, thereby
protecting the continuity of the Company's management. The issuance of Preferred
Stock pursuant to the Board of Directors' authority described above may
adversely affect the rights of the holders of Common Stock. For example,
Preferred Stock issued by the Company may rank prior to the Common Stock as to
dividend rights, liquidation preference or both, may have full or limited voting
rights and may be convertible into shares of Common Stock. Accordingly, the
issuance of Preferred Stock may discourage bids for the Common Stock or may
otherwise adversely affect the market price of the Common Stock.

The foregoing provisions could have the effect of making it more difficult
for a third-party to acquire, or of discouraging a third-party from acquiring
control of the Company.

LIMITATION OF LIABILITY AND INDEMNIFICATION

The Company's Certificate of Incorporation contains certain provisions
permitted under the DGCL, relating to the liability of directors. These
provisions eliminate a director's personal liability for monetary damages
resulting from a breach of fiduciary duty, except in certain circumstances
involving certain wrongful acts, such as: (i) for any breach of the director's
duty of loyalty to the Company or its stockholders; (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law; (iii) under Section 174 of the DGCL; or (iv) for any transaction from
which the director derives an improper personal benefit. These provisions do not
limit or eliminate the rights of the Company or any stockholder to seek
non-monetary relief, such as an injunction or rescission, in the event of a
breach of a director's fiduciary duty. These provisions will not alter a
director's liability under federal securities laws. The Company's Certificate of
Incorporation and By-laws also contain provisions indemnifying the directors and
officers of the Company to the fullest extent permitted by the DGCL. The Company
believes that these provisions will assist the Company in attracting and
retaining qualified individuals to serve as directors and officers.

REGISTRATION RIGHTS

Under the terms of a Registration Rights Agreement to be executed
immediately prior to the consummation of the Offering (the "Registration
Agreement"), Robert Figliulo, David Figliulo, John Figliulo and Michael Fletcher
will be granted certain demand and piggyback registration rights covering an
aggregate of 532,184 shares of Common Stock (the "Registrable Securities"). The
Registration Agreement will provide the holders of the Registrable Securities
with the right to require the Company to register any or all of the Registrable
Securities, subject to the conditions and limitations contained in the
Registration Agreement. Such registration rights become exercisable one year
subsequent to the closing of the Offering and continue

41
<PAGE> 43

until all shares of Registrable Securities are sold. In addition, if the Company
proposes to register under the Securities Act any of its securities for its own
account, such stockholders may require the Company to include in such
registration all or a part of such Registrable Securities. Pursuant to the
Registration Agreement and the conditions and limitations set forth therein, the
Company is required to: (i) pay all associated Registration Expenses (as defined
therein) in connection with certain registrations; (ii) use its best efforts to
effect such registrations; and (iii) indemnify Robert Figliulo, David Figliulo,
John Figliulo and Michael Fletcher and certain of their affiliates against
certain liabilities, including liabilities under the Securities Act, in
connection with the registration of their shares.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is ChaseMellon
Shareholder Services, L.L.C.

42
<PAGE> 44

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have 8,000,000 shares of
Common Stock outstanding, assuming no exercise of options expected to be
outstanding and exercisable. The shares sold in the Offering will be freely
tradeable without restriction or limitation under the Securities Act, except for
any such shares acquired by "affiliates" of the Company, as such term is defined
under the Securities Act ("Affiliates"), which shares may generally only be sold
in compliance with the limitations of Rule 144 described below.

The remaining 5,300,000 shares of Common Stock (the "Restricted Shares")
constitute restricted securities under Rule 144 and were issued or sold by the
Company in private transactions and may be publicly sold only if registered
under the Securities Act or sold in accordance with an applicable exemption from
registration, such as Rule 144. The Company and all executive officers,
directors and stockholders of the Company have agreed with the Representatives
not to offer, sell contract to sell or otherwise dispose, or contract to
dispose, of any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or grant any options or warrants
to purchase Common Stock, except in certain circumstances, for a period of 180
days after the date of this Prospectus (the "Lock-up Period") without the prior
written consent of Smith Barney Inc. Upon the expiration of the Lock-up Period
(or earlier with the consent of Smith Barney Inc.), all of the Restricted Shares
will become eligible for sale subject to the restrictions of Rule 144.

In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned Restricted Shares for at
least two years, including a person who may be deemed an Affiliate of the
Company, is entitled to sell within any three-month period a number of shares of
Common Stock that does not exceed the greater of 1% of the then outstanding
shares of Common Stock (approximately 80,000 shares after giving effect to the
Offering) and the average weekly reported trading volume of the Common Stock as
reported through the Nasdaq National Market during the four calendar weeks
preceding the sale. Sales under Rule 144 are subject to certain restrictions
relating to manner of sale, notice and the availability of current public
information about the Company. In addition, under Rule 144(k), a person who has
not been an Affiliate of the Company at any time 90 days preceding a sale, and
who has beneficially owned shares for at least three years, would be entitled to
sell such shares immediately following the Offering without regard to the volume
limitations, manner of sale provisions or notice or other requirements of Rule
144.

Options to purchase a total of 442,000 shares of Common Stock at an
exercise price of $14.00 per share are presently outstanding, of which 30,000
are presently exercisable. An additional 358,000 shares of Common Stock will be
available for future options grants under the Option Plan. An additional 500,000
shares of Common Stock will be available for issuance under the Employee Stock
Purchase Plan. See "Management -- Stock Plans." Rule 701 under the Securities
Act provides that shares of Common Stock acquired on the exercise of outstanding
options may be resold by persons other than Affiliates, beginning 90 days after
the date of this Prospectus, subject only to the manner of sale provisions of
Rule 144, and by Affiliates, beginning 90 days after the date of this
Prospectus, subject to all provisions of Rule 144, except its two-year minimum
holding period. The Company intends to register on a registration statement or
statements on Form S-8 the shares of Common Stock to be issued under the Option
Plan and the Purchase Plan.

The Company intends to grant Robert Figliulo, David Figliulo, John Figliulo
and Michael Fletcher demand and piggyback registration rights covering an
aggregate of 532,184 shares of Common Stock. These registration rights will
become exercisable one year subsequent to the closing of the Offering and
continue until all shares of Registrable Securities are sold. To the extent
these rights are exercised, additional shares of Common Stock will become
available for sale upon the effectiveness of a registration statement filed
pursuant to exercise of such rights. See "Description of Capital Stock --
Registration Rights."

Prior to the Offering there has been no public market for the Common Stock
and any sale of substantial amounts of Common Stock in the open market may
adversely affect the market price of the Common Stock offered hereby.

43
<PAGE> 45

UNDERWRITING

Upon the terms and subject to the conditions contained in the Underwriting
Agreement dated the date hereof, each of the underwriters named below (the
"Underwriters"), for whom Smith Barney Inc. and Robert W. Baird & Co.
Incorporated are acting as representatives (the "Representatives"), has
severally agreed to purchase, and the Company and the Selling Stockholders have
agreed to sell to each such Underwriter, the number of Shares of Common Stock
set forth opposite the name of such Underwriter.

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
------------------------------------------------------------------- ---------
<S> <C>
Smith Barney Inc. .................................................
Robert W. Baird & Co. Incorporated.................................
---------
Total............................................................ 2,700,000
========
</TABLE>

The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the shares are subject to
approval of certain legal matters by counsel and to certain other conditions.
The Underwriters are obligated to take and pay for all shares of Common Stock
offered hereby (other than those covered by the over-allotment option described
below) if any such shares are taken.

The Underwriters initially propose to offer a portion of the shares
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus and a portion of the shares to certain dealers at
a price which represents a concession not in excess of $ per share below the
public offering price. The Underwriters may allow, and such dealers may reallow,
a concession not in excess of $ per Share to certain other dealers. After
the initial public offering of the shares to the public, the public offering
price and such concessions may be changed by the Underwriters. The
Representatives of the Underwriters have advised the Company that the
Underwriters do not intend to confirm the sale of any shares to any accounts
over which they exercise discretionary authority.

Certain of the Selling Stockholders have granted the Underwriters an
option, exercisable for 30 calendar days from the date of this Prospectus, to
purchase up to 405,000 additional shares of Common Stock at the initial offering
price set forth on the cover page of this Prospectus, less the underwriting
discounts and commissions. The Underwriters may exercise such option solely for
the purpose of covering over-allotments, if any, in connection with the
Offering. To the extent such option is exercised, each Underwriter will be
obligated, subject to certain conditions, to purchase approximately the same
percentage of such additional shares as the number of shares set forth opposite
each Underwriter's name above bears to the total number of shares listed above.

The Underwriters have reserved up to 135,000 shares of the Common Stock
offered hereby for sale at the initial public offering price to certain
employees, consultants and other persons associated with the Company. The number
of shares of Common Stock available for sale to the general public will be
reduced to the extent such persons purchase such reserved shares. Any reserved
shares not so purchased will be offered by the Underwriters to the general
public on the same basis as the other shares offered hereby.

The Company and all of its directors, executive officers and stockholders
have agreed not to offer, sell, contract to sell or otherwise dispose, or
contract to dispose, of any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock, or grant any options or
warrants to purchase Common Stock, except in certain circumstances, for a period
of 180 days after the date of this Prospectus without the prior written consent
of Smith Barney Inc.

Prior to the Offering, there has been no public market for the Common
Stock. The initial public offering price of the shares will be negotiated among
the Company, the Selling Stockholders and the Representatives. Among the factors
expected to be considered in determining the initial public offering price are
the history of and prospects for the Company's business and the industry in
which it competes, an assessment of the Company's management and the present
state of the Company's development, the Company's past and present revenues and
earnings, the prospects for growth of the Company's revenues and earnings, the
current state of the U.S. economy and the current level of economic activity in
the industry in which the Company

44
<PAGE> 46

competes and in related or comparable industries, and currently prevailing
conditions in the securities markets, including current valuations of publicly
traded companies which are considered comparable to the Company.

The Company, the Selling Stockholders and the Underwriters have agreed to
indemnify each other against certain liabilities, including liabilities under
the Securities Act of 1933.

LEGAL MATTERS

The validity of the issuance of the shares of Common Stock offered hereby
will be passed upon for the Company by Wildman, Harrold, Allen & Dixon, Chicago,
Illinois. Mr. Donald E. Figliulo, a partner of Wildman, Harrold, Allen & Dixon,
is the brother of Robert, David and John Figliulo, the owner of shares of Common
Stock and a Selling Stockholder. Certain legal matters will be passed upon for
the Underwriters by Neal, Gerber & Eisenberg, Chicago, Illinois.

EXPERTS

The Financial Statements and Schedule of the Company as of December 31,
1995 and 1994, and for each of the years in the three-year period ended December
31, 1995 included herein and elsewhere in the Registration Statement, have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their report thereto, and are included in reliance upon the authority of said
firm as experts in accounting and auditing.

CHANGE IN ACCOUNTANTS

Prior to September 9, 1996 Arthur Andersen LLP served as independent public
accountants for SPR Wisconsin, SPR Tulsa, Data Flex and Systems Inc. and Ernst &
Young LLP served as independent public accountants for SPR Chicago. In
connection with the Offering, the Board of Directors of the Company on September
9, 1996 dismissed Ernst & Young LLP and selected Arthur Andersen LLP to serve as
independent public accountants for the Company and to render an opinion on the
financial statements included in this Prospectus, including the financial
statements of SPR Chicago. The Company informed Ernst & Young LLP of its
dismissal on September 9, 1996. The former auditors' report on SPR Chicago's
financial statements for the period from January 14, 1994 to December 31, 1994
and for the year ended December 31, 1995 is not included in this Prospectus.
During the period from January 14, 1994 to December 31, 1994 and for the year
ended December 31, 1995, Ernst & Young LLP's report on the financial statements
of SPR Chicago did not contain an adverse opinion, disclaimer of opinion,
qualification or modification as to uncertainty, audit scope or accounting
principles. There were no disagreements with Ernst & Young LLP on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures from January 14, 1994 through September 9, 1996 or with
respect to SPR Chicago's financial statements.

The Company has requested Ernst & Young LLP to furnish it a letter
addressed to the Commission stating whether it agrees with the above comments. A
copy of that letter dated January 7, 1997 is filed as an exhibit to the
Registration Statement of which this Prospectus is a part.

The Company consulted Arthur Andersen LLP and did not consult Ernst & Young
LLP regarding the application of the Commission's accounting principles to the
transactions described under "The Company" and the type of audit opinion that
would be rendered on the Company's financial statements included in this
Prospectus, which consultations were the subject of written and oral advice.

ADDITIONAL INFORMATION

The Company has filed with the Commission a Registration Statement on Form
S-1 under the Securities Act with respect to the Common Stock offered hereby.
This Prospectus, which is part of the Registration Statement, does not contain
all of the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information

45
<PAGE> 47

with respect to the Company and the Common Stock, reference is hereby made to
the Registration Statement, including the exhibits and schedules thereto.
Statements contained in this Prospectus as to the contents of any contract,
agreement or any other document referred to are not necessarily complete, and in
each instance reference is made to the copy of such contract, agreement or other
document filed as an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference. The Registration Statement,
including the exhibits and schedules thereto, may be inspected without charge at
the Commission's principal office at 450 Fifth Street, N.W., Washington, D.C.
20549, and at the Commission's Regional Offices at Seven World Trade Center,
Suite 1300, New York, New York 10048 and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such materials may be obtained from the
public reference section of the Commission at its Washington address upon
payment of the prescribed fee. In addition, the Commission maintains a World
Wide Web site on the Internet at www.sec.gov that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission.

The Company intends to furnish its stockholders with annual reports
containing audited financial statements and an opinion thereon expressed by
independent auditors and may furnish its shareholders with quarterly reports for
the first three quarters of each year containing unaudited summary financial
information.

46
<PAGE> 48

SPR INC.
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Public Accountants.............................................. F-2
Balance Sheets as of December 31, 1994 and 1995 and October 31, 1996 (unaudited) and
October 31, 1996 (unaudited pro forma).............................................. F-3
Statements of Operations for the years ended December 31, 1993, 1994 and 1995 and for
the ten months ended October 31, 1995 and 1996 (unaudited).......................... F-4
Statements of Stockholders' Equity for the years ended December 31, 1993, 1994 and
1995 and for the ten months ended October 31, 1996 (unaudited)...................... F-5
Statements of Cash Flows for the years ended December 31, 1993, 1994 and 1995 and for
the ten months ended October 31, 1995 and 1996 (unaudited).......................... F-6
Notes to Financial Statements......................................................... F-7
</TABLE>

F-1
<PAGE> 49

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of SPR Inc.:

We have audited the accompanying balance sheets of SPR INC. (a Delaware
corporation) as of December 31, 1994 and 1995, and the related statements of
operations, stockholders' 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 SPR Inc. as of December 31,
1994 and 1995, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 1995, in conformity with
generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Chicago, Illinois
October 28, 1996

F-2
<PAGE> 50

SPR INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
PRO FORMA
DECEMBER 31, OCTOBER 31,
--------------------------- OCTOBER 31, 1996
1994 1995 1996 (NOTE 12)
----------- ------------ ------------ -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash............................................... $ 1,083,028 $ 1,108,506 $ 633,229 $ 633,229
Accounts receivable, net of allowance for doubtful
accounts of $89,153, $31,900 and $73,900 at
December 31, 1994, 1995, and October 31, 1996,
respectively..................................... 1,472,387 3,096,220 4,243,541 4,243,541
Notes receivable -- related parties, current
portion.......................................... 380,910 325,981 182,979 182,979
Notes receivable -- other.......................... -- 75,000 -- --
Prepaid expenses and other......................... 143,384 369,024 355,620 355,620
----------- ------------ ------------ ------------
Total current assets........................... 3,079,709 4,974,731 5,415,369 5,415,369
----------- ------------ ------------ ------------
Property and equipment:
Leasehold improvements............................. -- 8,278 98,999 98,999
Computer equipment and software.................... 60,084 391,204 911,653 911,653
Office furniture and equipment..................... 42,306 153,188 605,560 605,560
----------- ------------ ------------ ------------
102,390 552,670 1,616,212 1,616,212
Less -- accumulated depreciation and
amortization................................... (8,559) (59,818) (244,331) (244,331)
----------- ------------ ------------ ------------
Property and equipment, net.................... 93,831 492,852 1,371,881 1,371,881
----------- ------------ ------------ ------------
Notes receivable -- related parties, net of current
portion.......................................... 399,790 115,946 -- --
----------- ------------ ------------ ------------
Total assets................................... $ 3,573,330 $ 5,583,529 $ 6,787,250 $ 6,787,250
=========== ============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit..................................... $ -- $ -- $ 600,000 $ 600,000
Current portion of term note....................... -- -- 43,804 43,804
Current portion of note payable -- related party... 720,000 1,200,000 801,266 801,266
Current portion of capital lease obligations....... -- 45,683 62,450 62,450
Accounts payable................................... 102,089 402,626 411,924 411,924
Dividends payable.................................. -- -- -- 2,500,000
Accrued expenses:
Salaries, commissions, and withholding taxes..... 281,472 554,796 1,303,310 1,303,310
Other............................................ 302,159 401,882 450,009 450,009
Deferred income taxes.............................. -- -- -- 282,500
----------- ------------ ------------ ------------
Total current liabilities...................... 1,405,720 2,604,987 3,672,763 6,455,263
----------- ------------ ------------ ------------
Long-term liabilities:
Term note, net of current portion.................. -- -- 182,586 182,586
Note payable -- related party, net of current
portion.......................................... 1,841,266 641,266 -- --
Capital lease obligations, net of current
portion.......................................... -- 62,693 6,101 6,101
Deferred income taxes.............................. -- -- -- 317,500
----------- ------------ ------------ ------------
Total long-term liabilities.................... 1,841,266 703,959 188,687 506,187
----------- ------------ ------------ ------------
Stockholders' equity:
Common stock, $.01 par, 13,000,000 shares
authorized, 6,333,334 shares issued and
outstanding...................................... 63,333 63,333 63,333 63,333
Preferred stock, $.01 par, 3,000,000 shares
authorized, no shares issued and outstanding..... -- -- -- --
Additional paid-in capital......................... 6,518,437 34,505,118 50,389,582 (237,533)
Retained deficit................................... (6,255,426) (32,293,868) (47,527,115) --
----------- ------------ ------------ ------------
Total stockholders' equity..................... 326,344 2,274,583 2,925,800 (174,200)
----------- ------------ ------------ ------------
Total liabilities and stockholders' equity..... $ 3,573,330 $ 5,583,529 $ 6,787,250 $ 6,787,250
=========== ============ ============ ============
</TABLE>

The accompanying notes to financial statements are an integral part of these
balance sheets.

F-3
<PAGE> 51

SPR INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
TEN MONTHS ENDED
YEARS ENDED DECEMBER 31, OCTOBER 31,
------------------------------------------ ----------------------------
1993 1994 1995 1995 1996
----------- ----------- ------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues.................... $11,731,429 $14,797,259 $ 22,907,928 $ 18,478,249 $ 26,575,453
Cost of services............ 8,338,583 10,424,690 15,525,198 12,368,199 18,736,180
----------- ----------- ------------ ------------ ------------
Gross profit................ 3,392,846 4,372,569 7,382,730 6,110,050 7,839,273
Costs and expenses:
Selling................... 1,012,255 1,165,141 2,141,374 1,667,961 2,447,430
Recruiting................ 341,010 409,938 776,651 613,049 1,089,674
Stock-based
compensation........... -- 6,509,750 27,986,681 23,322,234 15,884,464
General and administrative
expenses............... 1,229,599 1,334,175 1,642,112 1,170,085 2,798,452
----------- ----------- ------------ ------------ ------------
Total costs and
expenses............. 2,582,864 9,419,004 32,546,818 26,773,329 22,220,020
----------- ----------- ------------ ------------ ------------
Operating income (loss)..... 809,982 (5,046,435) (25,164,088) (20,663,279) (14,380,747)
Other income (expense):
Interest expense.......... (5,145) (88,065) (160,484) (137,314) (98,109)
Interest income........... 12,017 55,520 51,477 48,041 32,547
Other, net................ (1,283) (24,136) -- -- 13,725
----------- ----------- ------------ ------------ ------------
Total other income
(expense)............ 5,589 (56,681) (109,007) (89,273) (51,837)
----------- ----------- ------------ ------------ ------------
Income (loss) before income
taxes..................... 815,571 (5,103,116) (25,273,095) (20,752,552) (14,432,584)
Income taxes................ 4,000 75,123 20,788 -- --
----------- ----------- ------------ ------------ ------------
Net income (loss)........... $ 811,571 $(5,178,239) (25,293,883) $(20,752,552) (14,432,584)
=========== =========== ============
Pro forma income data
(unaudited):
Net (loss) as reported.... $(25,293,883) $(14,432,584)
Pro forma adjustment to
recognize "C"
Corporation provision
for income taxes....... 1,065,000 581,000
------------ ------------
Pro forma net (loss)...... $(26,358,883) $(15,013,584)
============ ============
Pro forma net (loss) per
share.................. $ (4.05) $ (2.31)
============ ============
Pro forma weighted average
number of shares
outstanding............ 6,512,545 6,512,545
============ ============
</TABLE>

The accompanying notes to financial statements are an integral part of these
statements.

F-4
<PAGE> 52

SPR INC.

STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL RETAINED TOTAL
------------------- PAID-IN EARNINGS STOCKHOLDERS'
SHARES AMOUNT CAPITAL (DEFICIT) EQUITY
--------- ------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1993.............. 6,733,334 $67,333 $ 41,917 $ 1,042,721 $ 1,151,971
Net income............................ -- -- -- 811,571 811,571
Distributions......................... -- -- -- (6,488) (6,488)
--------- ------- ----------- ------------ ------------
Balance at December 31, 1993............ 6,733,334 67,333 41,917 1,847,804 1,957,054
Net loss.............................. -- -- -- (5,178,239) (5,178,239)
Distributions......................... -- -- -- (80,955) (80,955)
Stock purchased and cancelled......... (400,000) (4,000) (33,230) (2,844,036) (2,881,266)
Stock-based compensation.............. -- -- 6,509,750 -- 6,509,750
--------- ------- ----------- ------------ ------------
Balance at December 31, 1994............ 6,333,334 63,333 6,518,437 (6,255,426) 326,344
Net loss.............................. -- -- -- (25,293,883) (25,293,883)
Distributions......................... -- -- -- (744,559) (744,559)
Stock-based compensation.............. -- -- 27,986,681 -- 27,986,681
--------- ------- ----------- ------------ ------------
Balance at December 31, 1995............ 6,333,334 63,333 34,505,118 (32,293,868) 2,274,583
Net loss.............................. -- -- -- (14,432,584) (14,432,584)
Distributions......................... -- -- -- (800,663) (800,663)
Stock-based compensation.............. -- -- 15,884,464 -- 15,884,464
--------- ------- ----------- ------------ ------------
Balance at October 31, 1996
(unaudited)........................... 6,333,334 $63,333 $50,389,582 $(47,527,115) $ 2,925,800
========= ======= =========== ============ ============
</TABLE>

The accompanying notes to financial statements are an integral part of these
statements.

F-5
<PAGE> 53

SPR INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, TEN MONTHS ENDED OCTOBER 31,
---------------------------------------- ----------------------------
1993 1994 1995 1995 1996
--------- ----------- ------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) for the period.... $ 811,571 $(5,178,239) $(25,293,883) $(20,752,552) $(14,432,584)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization..... 23,861 20,810 51,259 21,686 188,501
Stock-based compensation.......... -- 6,509,750 27,986,681 23,322,234 15,884,464
Loss on sale of property and
equipment....................... -- 27,409 -- -- 2,349
Increase in accounts receivable... (322,122) (106,315) (1,623,833) (1,454,838) (1,147,321)
Increase in prepaid expenses and
other........................... (22,945) (69,429) (225,640) (36,409) (33,075)
Increase (decrease) in accounts
payable......................... (66,443) 5,022 300,537 34,319 9,298
Increase in accrued expenses...... 138,463 137,729 373,047 504,664 796,641
--------- ----------- ------------ ------------ ------------
Net cash provided by operating
activities........................ 562,385 1,346,737 1,568,168 1,639,104 1,268,273
--------- ----------- ------------ ------------ ------------
Cash flows from investing activities:
Purchases of property and
equipment......................... (49,614) (62,467) (332,721) (191,519) (1,069,878)
(Increase) decrease in notes
receivable -- related parties..... (691,665) (89,035) 338,773 325,655 305,427
(Increase) decrease in notes
receivable -- other............... 225,000 -- (75,000) -- 75,000
--------- ----------- ------------ ------------ ------------
Net cash provided by (used in)
investing activities.............. (516,279) (151,502) (68,948) 134,136 (689,451)
--------- ----------- ------------ ------------ ------------
Cash flows from financing activities:
Payments on note payable -- related
party............................. (48,436) (320,000) (720,000) (720,000) (1,040,000)
Distributions....................... (6,488) (80,955) (744,559) (744,559) (800,663)
Payments on capital lease
obligations....................... -- -- (9,183) (3,980) (39,825)
Borrowings on term note payable..... -- -- -- -- 250,000
Payments on term note payable....... -- -- -- -- (23,611)
Borrowings on line of credit........ -- -- -- -- 600,000
--------- ----------- ------------ ------------ ------------
Net cash used in financing
activities........................ (54,924) (400,955) (1,473,742) (1,468,539) (1,054,099)
--------- ----------- ------------ ------------ ------------
Net increase (decrease) in cash..... (8,818) 794,280 25,478 304,701 (475,277)
Cash, beginning of period............. 297,566 288,748 1,083,028 1,083,028 1,108,506
--------- ----------- ------------ ------------ ------------
Cash, end of period................... $ 288,748 $ 1,083,028 $ 1,108,506 $ 1,387,729 $ 633,229
========= =========== ============ ============ ============
Supplemental disclosure of cash
payments made for:
Interest............................ $ 4,605 $ 68,677 $ 143,148 $ 123,724 $ 107,383
Income taxes........................ 1,233 964 72,087 71,058 13,912
========= =========== ============ ============ ============
Supplemental disclosure of noncash
investing and financing activities:
Investment in equipment through
issuance of capitalized lease
obligations....................... -- -- $ 117,559 $ 44,541 --
Stock purchased through issuance of
note payable...................... -- 2,881,266 -- -- --
========= =========== ============ ============ ============
</TABLE>

The accompanying notes to financial statements are an integral part of these
statements.

F-6
<PAGE> 54

SPR INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 1 -- BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

(a) Business -- SPR Inc. (the Company) provides information technology
services to clients in a variety of industry groups including financial
services, healthcare, insurance, manufacturing, oil and gas, transportation and
utilities. The Company currently provides the following service offerings: (i)
general consulting, (ii) systems reengineering, (iii) century date compliance,
(iv) systems maintenance and support and (v) information delivery services.
Within each of these service offerings, the Company provides three levels of
consulting support which are distinguished by the degree of responsibility the
Company assumes: strategic planning, project management and implementation.

(b) Interim Financial Information -- The unaudited balance sheet as of
October 31, 1996, the unaudited statement of stockholders' equity for the ten
months ended October 31, 1996, and the unaudited statements of operations and
cash flows for the ten months ended October 31, 1995 and 1996, include, in the
opinion of management, all adjustments (consisting of normal recurring
adjustments) necessary to present fairly the Company's financial position,
results of operations and cash flows. Operating results for the ten months ended
October 31, 1996, are not necessarily indicative of the results that may be
expected for the year ending December 31, 1996. The information included in
these notes relating to the ten months ended October 31, 1995 and 1996, is
unaudited.

(c) Basis of Presentation -- SPR Inc. was formed on October 29, 1996.
During October, 1996, Systems and Programming Resources, Inc., Systems &
Programming Resources of Tulsa, Inc., SPR-Wisconsin, Inc., SPR Chicago Inc., and
Consulting Acquisition, Inc. (d.b.a. Data Flex) merged into SPR Inc. at which
time the stockholders of such companies received an aggregate of 6,333,134
shares of common stock of SPR Inc. Systems and Programming Resources, Inc.,
SPR-Wisconsin, Inc., SPR Chicago Inc., Consulting Acquisition, Inc. and SPR Inc.
are under common ownership and control and are accounted for at historical cost
as a reorganization of entities under common control (similar to the pooling of
interests method of accounting). The merger of Systems & Programing Resources of
Tulsa, Inc. into SPR Inc. was accounted for using the pooling of interests
method of accounting. All intercompany transactions and balances have been
eliminated. The accompanying financial statements of the Company have been
prepared to give retroactive effect to the merger.

(d) Revenue Recognition -- Revenues are recognized as the related services
are performed. Clients are generally billed on a time and materials basis.

(e) Property and Equipment -- Property and equipment are stated at cost.
Expenditures for repair and maintenance are charged to expense as incurred.
Depreciation and amortization are computed using the straight-line method. The
estimated useful lives used in computing depreciation and amortization for
financial statement purposes are as follows:

<TABLE>
<CAPTION>
ASSET DESCRIPTION ASSET LIFE
---------------------------------------------- -----------------------------------
<S> <C>
Leasehold improvements........................ Shorter of lease term or estimated
useful life of the asset
Computer equipment and software............... 5 years
Office furniture and equipment................ 5 to 7 years
</TABLE>

(f) Distributions -- Distributions are recorded when declared by the Board
of Directors.

(g) 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.

F-7
<PAGE> 55

SPR INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(h) Income Taxes -- The Company elected to be taxed as an S corporation for
Federal and certain state income tax purposes. By this election, income of the
Company is taxable to the stockholders.

Upon completion of the Initial Public Offering (the Offering) and effective
termination of the S corporation election, deferred income tax liabilities and
income tax expense will be recorded for taxable temporary differences existing
at the time of change in tax status. Income for Federal income tax purposes was
recognized on the cash basis of accounting and, upon consummation of the
Offering, the Company will change to the accrual basis of accounting. If the
effective date of the Offering had been October 31, 1996, deferred income tax
liabilities and income tax expenses of approximately $600,000 would have been
recorded. Deferred income taxes will be recorded under the asset and liability
method of accounting for income taxes which requires the recognition of deferred
income taxes based upon the tax consequences of "temporary differences" by
applying enacted statutory tax rates applicable to future years to differences
between the financial statements carrying amounts and the tax basis of existing
assets and liabilities. As of October 31, 1996, deferred income tax liabilities
would have consisted of the following:

<TABLE>
<S> <C>
Change in tax accounting methods (cash to accrual)................. $565,000
Fixed Assets....................................................... 35,000
--------
Total deferred income tax liabilities......................... $600,000
========
</TABLE>

Additional paid-in capital and retained earnings (deficit) will be adjusted
to reflect the capitalization of retained earnings (deficit) to additional
paid-in capital upon the conversion of the Company to a C corporation.

(i) Pro forma net (loss) per share -- Pro forma net (loss) per share is
computed based upon the weighted average number of shares and common share
equivalents outstanding during each period. Pro forma per share information
assumes that 179,211 of the shares of Common Stock being offered by the Company
were outstanding during the periods indicated. This represents the approximate
number of shares of Common Stock which are being offered by the Company
(assuming an initial public offering price of $15 per share and after deducting
estimated underwriting discounts and commissions) to fund the payment of the
dividend to enable the stockholders of record prior to the Offering to pay
income taxes related to S corporation income through the closing date of the
Offering. The Company currently estimates (based in part on the Company's
estimate of its 1996 earnings) that the dividend will be $2.5 million.

NOTE 2 -- CONCENTRATION OF CREDIT RISK

The Company's financial instruments that are exposed to concentrations of
credit risk consist of accounts receivable.

The Company's customers are predominantly in the Midwest, with the majority
of customers located in Chicago, Tulsa and Milwaukee. One customer in the retail
industry accounted for approximately 17% of revenues in 1993 and one customer in
the insurance industry accounted for approximately 11% of revenues in 1995. For
the ten months ended October 31, 1996, a customer in the insurance industry
accounted for approximately 16% of revenues. The Company reviews a customer's
credit history before extending credit. In addition, the Company routinely
assesses the financial strength of its customers and, as a consequence, believes
that its accounts receivable credit risk is limited. The Company has no off
balance sheet credit risk.

F-8
<PAGE> 56

SPR INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE 3 -- NOTES RECEIVABLE FROM RELATED PARTIES

Notes receivable consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31 OCTOBER 31,
---------------------- ------------
1994 1995 1996
-------- -------- ------------
(UNAUDITED)
<S> <C> <C> <C>
Stockholder notes receivable, unsecured, payable on
demand, interest at 7%................................ $ 91,000 $ 42,233 $ 46,479
Stockholder notes receivable, unsecured, payable on
demand, interest at 6%................................ 689,700 399,694 100,000
Stockholder note receivable, unsecured, payable on
demand, interest at prime plus 1%..................... -- -- 36,500
-------- -------- --------
Total notes receivable from related parties............. 780,700 441,927 182,979
Less--current portion................................... 380,910 325,981 182,979
-------- -------- --------
$399,790 $115,946 $ --
======== ======== ========
</TABLE>

NOTE 4 -- LINES OF CREDIT AND LONG-TERM DEBT

The Company has line of credit agreements that allow for maximum borrowings
of $2,500,000 and are limited based upon a percentage of eligible accounts
receivable, as defined. Interest is at the applicable bank's prime rate.
Borrowings are collateralized by certain assets including accounts receivable.
One agreement provides for maximum borrowings of $2,000,000 and expires in May,
1997. Another line of credit agreement which provides for maximum borrowings of
$500,000 has no expiration date. There were no borrowings outstanding as of
December 31, 1994 and 1995. At October 31, 1996, borrowings were $600,000.

Fair value of debt approximates book value at the balance sheet dates.

Long-term and related party debt consists of the following:

<TABLE>
<CAPTION> OCTOBER
DECEMBER 31, 31,
------------------------ ----------
1994 1995 1996
---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C>
Note payable to stockholder, unsecured, due August, 1997,
payable in monthly installments of $80,000 plus
interest at 6.75%...................................... $2,561,266 $1,841,266 $ 801,266
Term note payable, due December 31, 2000, payable in
monthly installments of $5,190, including interest at
9%, collateralized by certain accounts receivable and
other assets........................................... -- -- 226,390
Capital lease obligations, collateralized by certain
equipment, personally guaranteed by a stockholder,
interest rates ranging from 7.75% to 8%................ -- 108,376 68,551
---------- ---------- ----------
Total long-term debt..................................... 2,561,266 1,949,642 1,096,207
Less--current maturities................................. 720,000 1,245,683 907,520
---------- ---------- ----------
$1,841,266 $ 703,959 $ 188,687
========== ========== ==========
</TABLE>

F-9
<PAGE> 57

SPR INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The aggregate maturities for long-term and related party debt are as
follows:

<TABLE>
<S> <C>
Remainder of 1996................................................. $ 172,990
1997.............................................................. 735,009
1998.............................................................. 57,936
1999.............................................................. 56,907
2000.............................................................. 73,365
----------
Total long term-debt.............................................. $1,096,207
==========
</TABLE>

NOTE 5 -- LEASE AGREEMENTS

The Company leases its office facilities under operating lease agreements
which expire at various times through 2002. In addition, the Company leases
certain equipment under operating lease agreements.

In addition to the minimum future rental payments, the Company is obligated
to pay certain operating expenses relating to leased properties which are
included in rent expense. Total rent expense under operating leases was
approximately $129,390, $89,594, $135,167, $104,398 and $301,213 for the years
ended December 31, 1993, 1994 and 1995, and the ten months ended October 31,
1995 and 1996, respectively.

The following is a schedule of minimum future rental payments required
under the operating leases:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
------------------------------------------------------------------
<S> <C>
1996....................................................... $ 54,339
1997....................................................... 342,819
1998....................................................... 374,123
1999....................................................... 377,305
2000....................................................... 341,930
2001....................................................... 285,299
2002....................................................... 13,460
----------
Total minimum payments required................................... $1,789,275
==========
</TABLE>

NOTE 6 -- 401(K) PROFIT-SHARING PLAN

The Company has a contributory 401(k) profit-sharing plan (the Plan)
covering substantially all full-time employees with a service period greater
than 90 days. The Plan allows participants to contribute up to 15% of their
total compensation on a pretax basis, up to a specified amount. The Company is
required to contribute annually one-fourth of the first $2,000 of the
participants' contribution, up to a maximum of $500 per participant. The total
Company contribution was approximately $11,525, $21,375, $27,202, $25,432 and
$56,181 for the years ended December 31, 1993, 1994, 1995, and the ten months
ended October 31, 1995 and 1996, respectively.

NOTE 7 -- LICENSE AGREEMENT

In October, 1995, the Company entered into a nonexclusive agreement with an
unaffiliated technical services company operating in New York and other markets
where the Company is not currently doing business, whereby the Company licenses
its Century Date Compliance methodology, Renovation 2000(SM), and its software
analysis tool, Code Vu(SM). In contracts involving Century Date Compliance in
which the unaffiliated company is the prime contractor and the engagement is not
handled as a joint venture the unaffiliated company is obligated to pay SPR Inc.
a license fee ranging from 4% to 9% of revenues. For the ten months ended
October 31, 1996, the Company has been paid approximately $18,000.

F-10
<PAGE> 58

SPR INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE 8 -- COMMITMENTS AND CONTINGENCIES

Letter of Credit -- The Company has a letter of credit of $119,500 at
October 31, 1996 which is security for a lease agreement. The letter of credit
is renewable each year.

NOTE 9 -- BUSINESS COMBINATION

During October, 1996, SPR Inc. acquired by merger all the common stock of
Systems & Programming Resources of Tulsa, Inc. in exchange for 1,295,142 shares
of SPR Inc's common stock. These companies provide information technology
services to clients in a variety of industry groups. The transaction was
accounted for as a pooling of interests, and accordingly, the financial
statements for all periods presented have been restated to include the accounts
of these companies. Revenues and net income, net of intercompany eliminations of
the separate companies for the periods preceding the acquisition were:

<TABLE>
<CAPTION>
SPR INC. INCLUDING
SYSTEMS AND PROGRAMMING
RESOURCES, INC., SPR-WISCONSIN, INC., SYSTEMS & PROGRAMMING
SPR CHICAGO INC. AND DATA FLEX RESOURCES OF TULSA, INC.
------------------------------------- ------------------------
<S> <C> <C>
Ten months ended October 31, 1996 (unaudited)
Revenues.................................... $ 18,447,117 $ 18,128,336
Net income (loss), net of intercompany
eliminations............................. (14,918,563) 541,651
Year ended December 31, 1995
Revenues.................................... 16,097,512 6,810,416
Net income (loss), net of intercompany
eliminations............................. (26,042,094) 748,211
Year ended December 31, 1994
Revenues.................................... 13,878,339 918,920
Net loss, net of intercompany
eliminations............................. (5,166,141) (12,098)
Year ended December 31, 1993
Revenues.................................... 11,731,429 --
Net income, net of intercompany
eliminations............................. 811,571 --
</TABLE>

NOTE 10 -- STOCK-BASED COMPENSATION

Systems and Programming Resources, Inc. entered into a series of
transactions with stockholders/ employees from January, 1994 through October,
1996. Certain assets and certain liabilities were transferred to SPR Chicago
Inc. and SPR-Wisconsin, Inc. during 1994 that were subsequently transferred to
SPR Inc. in 1996. Because the transactions were among family members within a
control group, the stockholders of SPR Chicago Inc. and SPR-Wisconsin, Inc. were
effectively granted a variable compensation arrangement that is measured by the
increase in the estimated value of these companies (as determined by management)
since 1994. The estimated increase in value of SPR-Wisconsin, Inc. from 1994 to
1995 was 73.75% and from 1995 to 1996 was 26.25%. The estimated increase in
value of SPR Chicago Inc. during 1994 was 14.69%, from 1994 to 1995 was 52.55%
and from 1995 to 1996 was 32.76%. The final measurement occurred when the
relative ownership interests in SPR Inc. were determined in October, 1996. The
ownership interests of the former stockholders of SPR Chicago Inc. and
SPR-Wisconsin, Inc. is collectively 62.6% of the Company. Compensation expense
relating to this arrangement is recorded in the accompanying statements of
operations as stock-based compensation with the corresponding credit included in
additional paid-in-capital.

F-11
<PAGE> 59

SPR INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE 11 -- STOCK PLANS -- SUBSEQUENT EVENT (UNAUDITED)

In November, 1996, the Company adopted an Employee Stock Purchase Plan and
a Combined Incentive and Non-statutory Stock Option Plan. 500,000 shares of
common stock are reserved for issuance under the Employee Stock Purchase Plan
and 800,000 shares of common stock are reserved for issuance under the Combined
Incentive and Non-statutory Stock Option Plan. On December 31, 1996, options to
purchase an aggregate of 442,000 shares of common stock were granted at an
exercise price of $14.00 per share. Of these outstanding options, 30,000 are
non-statutory stock options which are presently exercisable and 412,000 are
incentive stock options which vest over a five year period at the rate of 20%
per year. The Employee Stock Purchase Plan will permit eligible employees who
have completed five full calendar months of service to purchase common stock
through payroll deductions of up to 20% of their total cash compensation
provided that no employee may purchase more than $25,000 worth of stock in any
calendar year. The purchase price shall be the lesser of 85% of the market value
of the common stock on the first or last day of the offering period, as defined.

The Combined Incentive and Non-statutory Stock Option Plan provides that
awards may be granted to employees, officers and directors of the Company.
Awards may consist of non-statutory stock options and incentive stock options
(ISOs) to purchase shares of common stock and stock appreciation rights (SARs).
The exercise price per share of common stock is 100% of the fair market value of
the common stock on the date the option is granted. Options and SARs granted
under the option plan must be exercised within fifteen years from the date of
grant (ten years in the case of ISOs). In the case of any eligible employee who
owns stock possessing more than 10% of the voting power of stock, the exercise
price of any ISOs granted may not be less than 110% of the fair market value of
the common stock on the date of grant and the exercise period may not exceed
five years from the date of grant.

NOTE 12 -- SUBSEQUENT EVENTS AND PRO FORMA FINANCIAL DATA (UNAUDITED)

The Company will convert to a C corporation in connection with the
completion of the Offering resulting in the recording of approximately $600,000
in deferred income tax liabilities, as discussed in Note 1h. Prior to
consummation of the Offering, the Company intends to declare a dividend (the
"Dividend"). The Company currently estimates (based in part on the Company's
estimate of its 1996 earnings) that the Dividend will equal approximately
$2,500,000. Retained earnings (deficit) of the Company (which includes the
aggregate stock-based compensation expense), after recording the estimated
Dividend and deferred income taxes, will be reclassified to additional paid-in
capital in connection with the termination of the Company's S corporation
election. The unaudited pro forma Balance Sheet gives effect to these items. No
other contemplated transactions in connection with the Offering are included in
the unaudited pro forma Balance Sheet information.

F-12
<PAGE> 60

INSIDE BACK COVER OF PROSPECTUS

The inside back cover is a multicolor graphic and text layout. The following
text appears above the graphics:

"SPR OFFICES

SPR services the Midwest with offices located in:

Chicago, Illinois
Milwaukee, Wisconsin
Tulsa, Oklahoma

SPR plans to open an additional office in Dallas, Texas in early 1997."

[Graphics consist of map of the United States with spotlights emanating from
Chicago, Milwaukee and Tulsa, the three cities in which SPR offices are
currently located, and from Dallas, where a new SPR office is planned to open
in early 1997.]

The following text appears below the graphics:

"To view SPR online,
visit the SPR web site.
[Graphics depicting an excerpt from the SPR home page.]
www.sprinc.com"

[The Company's logo appears in the lower right corner of the page below a page
curl.]

<PAGE> 61

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

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED HEREIN, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, ANY OF THE SELLING STOCKHOLDERS OR ANY OF THE
UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES
OTHER THAN THOSE TO WHICH IT RELATES OR AN OFFER TO SELL, OR A SOLICITATION OF
AN OFFER TO BUY, THOSE TO WHICH IT RELATES IN ANY STATE TO ANY PERSON TO WHOM IT
IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH STATE. THE DELIVERY OF THIS PROSPECTUS
AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 8
The Company........................... 13
Use of Proceeds....................... 13
Dividend Policy....................... 14
Capitalization........................ 15
Dilution.............................. 16
Selected Financial Data............... 17
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 19
Business.............................. 25
Management............................ 33
Certain Transactions.................. 37
Principal and Selling Stockholders.... 39
Description of Capital Stock.......... 40
Shares Eligible for Future Sale....... 43
Underwriting.......................... 44
Legal Matters......................... 45
Experts............................... 45
Change in Accountants................. 45
Additional Information................ 45
Index to Financial Statements......... F-1
</TABLE>

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

UNTIL , 1997 (25 DAYS AFTER THE COMMENCEMENT OF THE OFFERING), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING
IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS 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.
- ------------------------------------------------------
- ------------------------------------------------------

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

2,700,000 SHARES

SPR LOGO

SPR INC.

COMMON STOCK

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

PROSPECTUS

, 1997
------------------

SMITH BARNEY INC.

ROBERT W. BAIRD & CO.
INCORPORATED

- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 62

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

Set forth below is an estimate of the approximate amount of fees and
expenses (other than underwriting commissions and discounts) payable by the
Company in connection with the issuance and distribution of the Common Stock
pursuant to the Prospectus contained in this Registration Statement.

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee................ $ 15,055
Legal fees and expenses............................................ 225,000
Accountants' fees and expenses..................................... 200,000
Printing expenses.................................................. 130,000
Nasdaq National Market listing fee................................. 37,500
Transfer Agent and Registrar fees and expenses..................... 15,000
NASD filing fee.................................................... 5,468
Blue Sky fees and expenses......................................... 5,000
Miscellaneous expenses............................................. 66,977
--------
Total......................................................... $700,000
========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Registrant, being incorporated under the General Corporation Law of the
State of Delaware (the "DGCL"), is empowered by Section 145 of the DGCL, subject
to the procedures and limitations stated therein, to indemnify any person
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him or her in connection with
any threatened, pending or completed action, suit or proceeding to which such
person is made a party or threatened to be made a party by reason of the fact
that he or she is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise. Section 145 provides that indemnification
pursuant to its provisions is not exclusive of other rights of indemnification
to which a person may be entitled under any By-Law, agreement, vote of
stockholders or disinterested directors or otherwise.

The Company's Certificate of Incorporation and By-laws contain provisions
that require the Company to indemnify its Directors and officers to the fullest
extent permitted by Delaware law.

Article Ninth of the Registrant's Certificate of Incorporation eliminates,
to the fullest extent permitted by paragraph (7) of subsection (b) of Section
102 of the DGCL, as the same may be amended or supplemented, or any
corresponding provision of the DGCL, the personal liability of directors. That
paragraph allows corporations incorporated under the DGCL to eliminate the
personal liability of a director to the corporation or its stockholders for
monetary damages for a breach of fiduciary duty as a director. However, that
paragraph does not allow corporations to limit the liability of a director: (i)
for any breach of his or her duty of loyalty to the corporation or its
stockholders, (ii) for acts or omission not in good faith or which involve
intentional misconduct or a knowing violations of law, (iii) for unlawful
payment of a dividend or unlawful stock purchase or redemption or (iv) for any
transaction for which the director derived an improper personal benefit.

The Company is in the process of procuring liability insurance for its
directors and officers.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

Set forth below is information as to securities of the Registrant and its
predecessors issued or sold by the Registrant and its predecessors since October
31, 1993 that were not registered under the Securities Act of 1933, as amended
(the "Securities Act"). No underwriters were involved, and there were no
underwriting discounts or commissions.

II-1
<PAGE> 63

On January 14, 1994, 500 shares of common stock of SPR Chicago Inc. ("SPR
Chicago") were issued to each of Robert Figliulo and David Figliulo in
connection with the incorporation of SPR Chicago, to which the Chicago
operations of Systems and Programming Resources, Inc. ("Systems Inc.") were
transferred. In connection with this transfer, SPR Chicago delivered to Systems
Inc. a $1.5 million promissory note. These issuances were made pursuant to the
exemption from registration provided by Section 4(2) of the Securities Act.

On August 15, 1994, 1,000 shares of common stock of SPR-Wisconsin, Inc.
("SPR Wisconsin") were issued to John Figliulo in connection with the
incorporation of SPR Wisconsin, to which the Wisconsin operations of Systems
Inc. were transferred. In connection with this transfer, SPR Wisconsin delivered
to Systems Inc. a $1.3 million promissory note. These issuances were made
pursuant to the exemption from registration provided by Section 4(2) of the
Securities Act.

On September 8, 1994, 500 shares of common stock of Systems and Programming
Resources of Tulsa, Inc. ("SPR Tulsa") were issued to each of Michael Fletcher
and Rene Potter in connection with the incorporation of SPR Tulsa, to which the
Tulsa operations of Systems Inc. were transferred. In connection with this
transfer, SPR Tulsa delivered to Systems Inc. a $1.6 million promissory note.
These issuances were made pursuant to the exemption from registration provided
by Section 4(2) of the Securities Act.

Upon the Registrant's formation on October 29, 1996, each of Robert
Figliulo and David Figliulo received 100 shares of the Registrant's Common Stock
for nominal consideration. These issuances were pursuant to the exemption from
registration provided by Section 4(2) of the Securities Act.

On October 30, 1996, in connection with the Merger of SPR Chicago into the
Registrant as described in the Registration Statement, 1,476,914 shares of
Common Stock of the Registrant were issued to each of Robert Figliulo and David
Figliulo in exchange for all their shares of SPR Chicago common stock. On
October 31, 1996, in connection with the Mergers of Systems Inc., Consulting
Acquisition, Inc., SPR Wisconsin and SPR Tulsa as described in the Registration
Statement, 3,379,306 shares of Common Stock of the Registrant were issued to
nine members of the Figliulo family, Michael Cymbala, Michael Fletcher and Rene
Potter in exchange for all their shares of common stock of each of the merged
entities. All of these issuances were pursuant to the exemption from
registration provided by Section 4(2) of the Securities Act.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

(a) Exhibits

II-2
<PAGE> 64

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -------------------------------------------------------------------------------------
<C> <S>
10.6 Lease for 2015 Spring Road, Oak Brook, Illinois.*
10.7 Lease for 400 Mid-Continent Tower, Tulsa, Oklahoma.*
10.8 Lease for 100 East Wisconsin Avenue, Milwaukee, Wisconsin.*
10.9 Sublease for 815 Commerce Drive, Oak Brook, Illinois.*
10.10 Form of Registration Rights Agreement.
10.11 Form of Tax Indemnity Agreement.
16.1 Revised letter of Ernst & Young LLP.
23.1 Consent of Arthur Andersen LLP.*
23.2 Consent of Wildman, Harrold, Allen & Dixon (contained in its opinion filed as Exhibit
5.1 hereto).*
24.1 Powers of Attorney.*
27.1 Financial Data Schedule.*
</TABLE>

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

* Previously filed.

+ To be filed by Amendment.

(b) Financial Statement Schedule:
Report of Independent Auditors
Schedule II: Valuation and Qualifying Accounts

All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and therefore have
been omitted.

ITEM 17. UNDERTAKINGS.

The Registrant hereby undertakes:

(1) To provide to the Underwriters at the closing specified in the
Underwriting Agreement, certificates in such denominations and registered
in such names as required by the Underwriters to permit prompt delivery to
each purchaser.

(2) That, insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of
its counsel the matter had been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

(3) That, for purposes of determining any liability under the Act, the
information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) of
497(h) under the Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.

(4) That, for the purpose of determining any liability under the Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-3
<PAGE> 65
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 Chicago, Illinois on
January 7, 1997.

SPR INC.

By: /s/ ROBERT M. FIGLIULO
----------------------------------
Robert M. Figliulo
President

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Registration Statement has been duly signed by the following persons in
the capacities indicated on January 7, 1997.

<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------- -----------------------------------------------------
<C> <S>
/s/ ROBERT M. FIGLIULO President and Chairman of the Board of Directors
- ------------------------------------- (Principal Executive Officer)
Robert M. Figliulo

/s/ STEPHEN T. GAMBILL Chief Financial Officer
- ------------------------------------- (Principal Financial and Accounting Officer)
Stephen T. Gambill

* Executive Vice President, General Manager -- Tulsa
- ------------------------------------- and Director
Michael J. Fletcher

/s/ DAVID A. FIGLIULO Executive Vice President and Director
- -------------------------------------
David A. Figliulo

* Director
- -------------------------------------
Ronald L. Taylor

* Director
- -------------------------------------
Sydnor W. Thrift, Jr.

* Director
- -------------------------------------
David P. Yeager

*By: /s/ STEPHEN T. GAMBILL
- -------------------------------------
Stephen T. Gambill
Attorney-in-fact
</TABLE>

II-4
<PAGE> 66

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SUPPLEMENTAL SCHEDULE

To the Stockholders of SPR Inc.:

We have audited in accordance with generally accepted auditing standards,
the financial statements of SPR Inc. included in this registration statement and
have issued our report thereon dated October 28, 1996. Our audits were made for
the purpose of forming an opinion on the basic financial statements taken as a
whole. The schedule listed in the index in Item 16(b) is the responsibility of
the Company's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. The 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

Chicago, Illinois
October 28, 1996

S-1
<PAGE> 67

SCHEDULE II

SPR INC.

VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995

<TABLE>
<CAPTION>
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND END OF
DESCRIPTION(1) OF YEAR EXPENSES DEDUCTIONS(1) YEAR
- -------------------------------------------------- ---------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
For the year ended December 31, 1993:
Allowance for doubtful accounts................. $ 49,577 $ 25,576 -- $ 75,153
For the year ended December 31, 1994:
Allowance for doubtful accounts................. $ 75,153 $ 20,000 $ 6,000 $ 89,153
For the year ended December 31, 1995:
Allowance for doubtful accounts................. $ 89,153 $(28,753) $28,500 $ 31,900
</TABLE>

- -------------------------
(1) Bad debts written off.

S-2
<PAGE> 68

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -------------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement.*
2.1 Agreement of Merger dated October 30, 1996 between the Registrant and SPR Chicago
Inc.*
2.2 Agreement of Merger dated October 31, 1996 among the Registrant, Consulting
Acquisition, Inc. and Systems and Programming Resources, Inc.*
2.3 Agreement of Merger dated October 31, 1996 between the Registrant and Systems and
Programming Resources of Tulsa, Inc.*
2.4 Agreement of Merger dated October 31, 1996 between the Registrant and SPR-Wisconsin,
Inc.*
3.1 Certificate of Incorporation of the Registrant.*
3.2 By-laws of the Registrant.*
4.1 Description of specimen stock certificate representing Common Stock.+
5.1 Opinion of Wildman, Harrold, Allen & Dixon.*
10.1 Form of Employment Agreement (Executive).+
10.2 Form of Employment Agreement (Manager).+
10.3 Form of Employment Agreement (Consultant).+
10.4 Form of Combined Incentive and Non-statutory Stock Option Plan.*
10.5 Revised form of Employee Stock Purchase Plan.
10.6 Lease for 2015 Spring Road, Oak Brook, Illinois.*
10.7 Lease for 400 Mid-Continent Tower, Tulsa, Oklahoma.*
10.8 Lease for 100 East Wisconsin Avenue, Milwaukee, Wisconsin.*
10.9 Sublease for 815 Commerce Drive, Oak Brook, Illinois.*
10.10 Form of Registration Rights Agreement.
10.11 Form of Tax Indemnity Agreement.
16.1 Revised letter of Ernst & Young LLP.
23.1 Consent of Arthur Andersen LLP.*
23.2 Consent of Wildman, Harrold, Allen & Dixon (contained in its opinion filed as Exhibit
5.1 hereto).*
24.1 Powers of Attorney.*
27.1 Financial Data Schedule.*
</TABLE>

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

* Previously filed.

+ To be filed by Amendment.

(b) Financial Statement Schedule:

Report of Independent Auditors

Schedule II: Valuation and Qualifying Accounts

<PAGE> 1
EXHIBIT 10.5

SPR INC.

EMPLOYEE STOCK PURCHASE PLAN

1. PURPOSE. SPR INC. (the "Company") hereby establishes the SPR
Inc. Employee Stock Purchase Plan (the "Plan") to provide employees of the
Company and its subsidiaries an opportunity to purchase Common Stock of the
Company through accumulated payroll deductions. It is the intention of the
Company to have the Plan qualify as an "Employee Stock Purchase Plan" under
Section 423 of the Internal Revenue Code of 1986, as amended. The provisions
of the Plan shall, accordingly, be construed in a manner consistent with the
requirements of that section of the Code.

2. DEFINITIONS.

(a) "BOARD" shall mean the Board of Directors of the
Company.

(b) "CODE" shall mean the Internal Revenue Code of 1986,
as amended.

(d) "COMMON STOCK" shall mean the Common Stock of the
Company.

(e) "COMPANY" shall mean SPR Inc., a Delaware
Corporation.

(f) "COMPENSATION" shall mean all gross earnings,
including earnings from commissions, bonuses and overtime.

(g) "CONTINUOUS STATUS AS AN EMPLOYEE" shall mean
continued employment without any interruption or termination of service as an
Employee. Continuous Status as an Employee shall not be considered interrupted
in the case of a leave of absence agreed to in writing by the Company, provided
that such leave is for a period not exceeding 90 days, or reemployment upon the
expiration of such leave is guaranteed by contract or statute.

(h) "EMPLOYEE" shall mean any person, including an
officer, whose customary employment with the Company or any subsidiary is at
least twenty (20) hours per week and more than five (5) months in any calendar
year.

(i) "ENROLLMENT DATE" shall mean the first day of each
Offering Period.

(j) "EXERCISE DATE" shall mean the last working day of
the Exercise Period.

(k) "EXERCISE PERIOD" shall mean each six month period
commencing January 1 and July 1.
<PAGE> 2
(l) "FAIR MARKET VALUE" shall mean an amount equal to the
fair market value of the Common Stock as determined by the Board in its
judgment, or, if there is at sometime hereafter a public market for the Common
Stock, the mean of the closing bid and asked quotations for a share of Common
Stock in the over-the-counter market as of the date for which such value is
being determined, as reported by the National Association of Securities
Dealers, Inc. or, in the event that the Common Stock is listed on The Nasdaq
National Market or any exchange, the closing price on such exchange on that
date or, if there were no sales on that date, the mean of the bid and asked
prices for Common Stock on that exchange at the close of business on that date.

(m) "OFFERING PERIOD" shall mean a period of six (6)
months during which Options are granted pursuant to the Plan.

(n) "OPTION" shall mean an option granted under the Plan
which entitles an Employee to purchase shares of Common Stock.

(o) "PARTICIPANT" shall mean an Employee who elects to
participate in the Plan.

(p) "PLAN" shall mean this Employee Stock Purchase Plan.

(q) "SUBSIDIARY" shall mean a corporation, domestic or
foreign, of which not less than 80% of the voting shares are held by the
Company or a Subsidiary, whether or not such corporation now exists or is
hereafter organized or acquired by the Company or a Subsidiary.

3. ELIGIBILITY.

(a) Any Employee who is employed by the Company or a
Subsidiary on a given Enrollment Date shall be eligible to participate in the
Plan.

(b) Any provisions of the Plan to the contrary
notwithstanding, no Employee shall be granted an Option under the Plan (i) if,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 424(d) of the Code)
would own stock and/or hold outstanding options to purchase stock possessing
five percent (5%) or more of the total combined voting power or value of all
classes of stock of the Company or any Subsidiary, or (ii) which permits his or
her rights to purchase stock under all employee stock purchase plans of the
Company and its subsidiaries to accrue at a rate which exceeds Twenty-Five
Thousand Dollars ($25,000) worth of stock (determined at the fair market value
of the shares at the time such option is granted) for each calendar year in
which such option is outstanding at any time.

4. OFFERING PERIODS. Except as provided in the second sentence
of this Section 4 the Plan shall be implemented by consecutive Offering Periods
with a new Offering Period

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<PAGE> 3

commencing on the first working day on or after each January 1 and July 1 and
ending on the last working day of such Offering Period. The first Offering
Period hereunder shall commence on the first date of the offering to the public
of shares of Common Stock under the Company's First Registration Statement on
Form S-1 under the Securities Act of 1933, as amended (the "S-1 Registration
Statement") and shall end on the last day of June 1997. Subject to the
stockholder approval requirements of Section 22, the Committee shall have the
power to change the duration of Offering Periods with respect to future
offerings without stockholder approval if such change is announced at least
fifteen (15) days prior to the scheduled beginning of the first Offering Period
to be affected.

5. PARTICIPATION.

(a) An eligible Employee may become a Participant in the
Plan by completing an enrollment form and, if the Participant's contributions
to the Plan are made by payroll deductions, a payroll deduction authorization
form and filing such forms with the Company at least five (5) business days
prior to the applicable Enrollment Date, unless a later time for filing the
forms is set by the Committee for all eligible Employees with respect to a
given Offering Period.

(b) Payroll deductions for a Participant who elect to
contribute by payroll deduction shall commence on the first payroll following
the Enrollment Date and shall end on the last payroll in the Offering Period to
which such authorization is applicable, unless sooner terminated as provided in
Section 11. Lump sum cash contributions made by a Participant must be made by
the last payroll date in the Offering Period for which the payment is made.

6. PARTICIPANT CONTRIBUTIONS. Participant contributions may be
made by payroll deductions or by a lump sum cash payment.

(a) At the time a Participant files his or her payroll
deduction authorization form, the Participant shall elect to have payroll
deductions made on each payday during the Offering Period. All Participant
payroll deduction contributions and lump sum cash contributions are subject to
such dollar or percentage limitations during an Offering Period as the Company
shall determine prior to such Offering Period provided, however, that the
aggregate of such Participant contributions during the Offering Period shall
not exceed twenty percent (20%) of the Participant's aggregate Compensation
during said Offering Period and not be less than Fifty Dollars ($50.00) per
payroll period or, in the case of lump sum cash payments, One Thousand Dollars
($1,000.00) for the Offering Period.

(b) All payroll deductions made for a Participant and all
lump sum cash contributions made by a Participant shall be credited to his or
her payroll deduction account under the Plan (the "Payroll Deduction Account").
No interest shall accrue on a Participant's contributions deposited in the
Participant's Payroll Deduction Account.

(c) A Participant may discontinue participation in the
Plan as provided in Section 10 but may not decrease or increase the rate or
amount of his or her payroll deductions during an Offering Period. A
Participant may change the rate or amount of his or her payroll deductions
before the Enrollment Date for any Offering Period by completing or filing with
the Company a payroll authorization form changing the rate or amount of payroll
deductions. The change in rate or amount shall be effective with the first
full payroll period to occur during such Offering Period. Subject to the
limitations of Section 6(a), a Participant's payroll authorization form shall
remain in effect for successive Offering Periods unless revised as provided
herein or terminated as provided in Section 11.

-3-
<PAGE> 4

(d) Notwithstanding the foregoing, to the extent
necessary to comply with Section 423(b)(3) of the Code and Section 3(b) herein,
a Participant's contributions may be decreased or ended, during any
calendar year in which the total of accumulated contributions equal Twenty-Five
Thousand Dollars ($25,000). Payroll deductions shall recommence at the rate
provided in such Participant's payroll deduction authorization form at the
beginning of the first Offering Period which is scheduled to end in the
following calendar year, unless terminated by the Participant as provided in
Section 11.

7. GRANT OF OPTION. On the Enrollment Date of each Offering
Period, each eligible Employee participating in such Offering Period shall be
granted an Option to purchase on each Exercise Date during such Offering Period
up to a number of shares of Common Stock determined by dividing such
Participant's contributions accumulated prior to such Exercise Date and
retained in the Participant's Payroll Deduction Account as of the Exercise Date
by a price equal to the lesser of (i) eighty-five percent (85%) of
the Fair Market Value of a share of Common Stock on the Enrollment Date and
(ii) eighty-five percent (85%) of the Fair Market Value of a share of Common
Stock on the Exercise Date; provided, however, that for the purpose of the
first Offering Period the purchase price shall be an amount equal to the lesser
of (i) eighty-five percent (85%) of the offering price per share of Common
Stock to the public pursuant to the S-1 Registration Statement and (ii)
eighty-five percent (85%) of the Fair Market Value of a share of Common stock
on the Exercise Date; provided further that in no event shall an Employee be
permitted to purchase during each Offering Period more than a number of shares
determined by dividing $25,000 by the fair market value of a share of the
Common Stock on the Enrollment Date, and provided further that such purchase
shall be subject to the limitations set forth in Sections 3(b) and 12 hereof.
Exercise of the Option shall occur as provided in Section 8, unless the
Participant has withdrawn pursuant to Section 11, and shall expire on the last
day of the Offering Period.

8. EXERCISE OF OPTION. The Company will give each Participant
notice of each Exercise Date thirty (30) days prior to such Exercise Date.
Unless a Participant withdraws from the Plan as provided in Section 11 his or
her Option for the purchase of shares will be exercised automatically on the
last working day of the Offering Period, and the maximum number of full shares
subject to Option shall be purchased for such Participant at the applicable
Option price with the accumulated contributions in his or her Payroll Deduction
Account. Any amount remaining in the Participant's Payroll Deduction Account
after an Exercise Date shall be held in the account until the next Exercise
Date of the Offering Period, unless the Offering Period has been oversubscribed
or has terminated with such Exercise Date, in which case such amount shall be
refunded to the Participant. During a Participant's lifetime, a Participant's
Option to purchase shares hereunder is exercisable only by him or her.

9. BROKERAGE ACCOUNTS OR PLAN SHARE ACCOUNTS. By enrolling in
the Plan, each Participant shall be deemed to have authorized the establishment
of a brokerage account on his or her behalf at a securities brokerage firm
selected by the Committee. Alternatively, the Committee may provide for Plan
share accounts for each Participant to be established by the Company or by an
outside entity selected by the Committee which is not a brokerage firm. Shares
purchased by a Participant pursuant to the Plan shall be held in the
Participant's brokerage or Plan share account (the "Plan Share Account") in his
or her name, or if the Participant so indicates on his or her payroll deduction
authorization form, in the Participant's name jointly with a member of the
Participant's family, with right of survivorship. A Participant who is a
resident of a jurisdiction which does not recognize such a joint tenancy may
request that such shares of Common Stock be held in his or her name as tenant
in common with a member of the Participant's family, without right of
survivorship.

10. CERTIFICATES. Certificates for shares of Common Stock
purchased under the Plan will not be issued automatically. However,
certificates for whole shares of Common Stock shall be issued as soon as
practicable following a Participant's written request. The Company may make a
reasonable charge for the issuance of such certificates. Fractional interests
in shares of Common Stock shall be carried forward in a Participant's Plan
Share Account until they equal one whole share of Common Stock or until the
termination of the Participant's participation in the Plan, in which event an
amount equal to the value of such fractional interest shall be paid to the
Participant in cash.

-4-
<PAGE> 5

11. WITHDRAWAL; TERMINATION OF EMPLOYMENT

(a) A Participant may withdraw all but not less than all
the contributions credited to his or her Payroll Deduction Account and not yet
used to exercise his or her Option under the Plan at any time by giving written
notice to the Company. All of the Participant's contributions credited to his
or her Payroll Deduction Account will be paid to such Participant promptly
after receipt of notice of withdrawal and such Participant's Option for the
Offering Period will be automatically terminated, and no further contributions
for the purchase of shares may be made during the Offering Period. If a
Participant withdraws from an Offering Period, payroll deductions will not
resume at the beginning of the succeeding Offering Period unless the
Participant delivers to the Company a new payroll deduction authorization form.

(b) Upon termination of the Participant's Continuous
Status as an Employee prior to the Exercise Date for any reason, including
retirement or death, the contributions credited to such Participant's Payroll
Deduction Account during the Offering Period but not yet used to exercise the
Option will be returned to such Participant or, in the case of his or her
death, to the person or persons entitled thereto under Section 14, and such
Participant's Option will be automatically terminated, provided however, that,
in the event of the Participant's death, the Option may be exercised by his or
her beneficiary designated under Section 14.

(c) In the event an Employee fails to remain in
Continuous Status as Employee of the Company for at least twenty (20) hours per
week during an Offering Period in which the Employee is a Participant, he or
she will be deemed to have elected to withdraw from the Plan and the
contributions credited to his or her Payroll Deduction Account will be returned
to such Participant and such Participant's Option terminated.

(d) A Participant's withdrawal from an Offering Period
will not have any effect upon his or her eligibility to participate in any
similar plan which may hereafter be adopted by the Company or in succeeding
Offering Periods which commence after the termination of the Offering Period
from which the Participant withdraws.

12. STOCK.

(a) The maximum number of shares of the Company's Common
Stock which shall be made available for sale under the Plan shall be Five
Hundred Thousand (500,000) shares, subject to adjustment upon changes in
capitalization of the Company as provided in Section 18. If on a given
Exercise Date the number of shares with respect to which Options are to be
exercised exceeds the number of shares then available under the Plan, the
Company shall make a pro rata allocation of the shares remaining available for
purchase in as uniform a manner as shall be practicable and as it shall
determine to be equitable.

(b) The Participant will have no interest or voting right
in shares of Common Stock covered by his or her Option until such Option has
been exercised and payment for such shares has been completed on the Exercise
Date. A Participant shall have no right to vote any fractional interest in a
share of Common Stock credited to his or her Plan Share Account.

-5-
<PAGE> 6

13. ADMINISTRATION. The Plan shall be administered by the
Committee. The administration, interpretation or application of the Committee
shall be final, conclusive and binding upon all Participants. Notwithstanding
the provisions of the immediately preceding sentence, in the event that Rule
16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or any successor provision ("Rule 16b-3"), provides
specific requirements for the Administrators of plans of this type, the Plan
shall only be administered by such body and in such a manner shall comply with
the applicable requirements of Rule 16b-3. Unless permitted by Rule 16b-3, no
discretion concerning decisions regarding the Plan sahll be afforded to any
person other than a "Non-Employee Director" as that term is defined in Rule
16b-3.

14. DESIGNATION OF BENEFICIARY.

(a) A Participant may file a written designation of a
beneficiary who is to receive any shares and cash, if any, from the
Participant's Payroll Deduction Account and Plan Share Account if such
Participant dies after an Exercise Date on which the Option is exercised but
before receiving his or her Common Stoch and cash. In addition, a
Participant's Payroll Deduction Account or exercise the Option on behalf of the
Participant in the event of such Participant's death prior to exercise of the
Option.

(b) Such designation of beneficiary may be changed by the
Participant at any time by written notice. In the event of the death of a
Participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such Participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the Participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents or
relatives of the Participant, or if no spouse, dependent or relative is known
to the Company, then to such other persons as the Company may designate.

15. TRANSFERABILITY. Neither payroll deductions credited to a
Participant's Payroll Deduction Account, nor any rights regarding an Option
under the Plan may be assigned, transferred, pledged or otherwise disposed of
in any way (other than by will, the laws of descent and distribution or as
provided in Section 14 hereof) by the Participant. Any such attempt at
assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds
from an Offering Period in accordance with Section 11. An Option may be
exercised only by the Participant during his or her lifetime, or, in the event
of the Participant's death, by his or her estate or the person who acquires the
right to exercise such Option by bequest or inheritance, pursuant to Sections
11(b) and 14.

16. USE OF FUNDS. All Participant contributions received or held
by the Company under the Plan may be used by the Company for any corporate
purpose, and the Company shall be not be obligated to segregate such
contributions.

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<PAGE> 7

17. REPORTS. Individual Payroll Deduction Accounts and Plan
Share Accounts will be maintained for each Participant in the Plan. Statements
of such accounts will be given to Participants as soon as practical following
each Exercise Date, which statements will set forth the amounts of the
Participant's contributions, per share purchase price, the number of shares of
Common Stock purchased and the remaining cash balance, if any.

18. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. The aggregate
number of shares of Common Stock with respect to which Options may be granted,
the aggregate number of shares of Common Stock subject to each outstanding
Option, and the Option Price per share of each Option may be appropriately
adjusted as the Committee may determine for any increase or decrease in the
number of shares of issued Common Stock resulting from a subdivision or
consolidation of shares, whether through reorganization, recapitalization,
stock split-up, stock distribution or combination of shares, or the payment of
a share dividend or other increase or decrease in the number of such shares
outstanding effected without receipt of consideration by the Company.
Adjustments under this Section 18 shall be made according to the sole
discretion of the Committee, and its decision shall be binding and conclusive.

19. DISSOLUTION, MERGER AND CONSOLIDATION. Upon the dissolution
or liquidation of the Company, or upon a merger or consolidation of the Company
in which the Company is not the surviving corporation, each Option granted
hereunder shall expire as of the effective date of such transaction; provided,
however, that the Committee shall give at least 30 days' prior written notice
of such event to each Participant during which time he or she shall have a
right to exercise his or her wholly or partially unexercised Option and,
subject to prior expiration pursuant to Section 6(b) or (c), each Option shall
be exercisable after receipt of such written notice and prior to the effective
date of such transaction.

20. AMENDMENT OR TERMINATION. The Board may at any time and for
any reason terminate or amend the Plan. Except as provided in Section 18, no
such termination can affect Options previously granted, provided that an
Offering Period may be terminated by the Board on any Exercise Date if the
Board determines that the termination of the Plan is in the best interests of
the Company and its stockholders. Except as provided in Section 18, no
amendment or termination shall be made which would impair the rights of any
Participant under any outstanding Option, without his or her consent. In
addition to the extent necessary to comply with Rule 16b-3 or under Section 423
of the Code (or any other successor rule or provision or any other applicable
law or regulation), the Company shall obtain stockholder approval of any Plan
amendment in such a manner and to such a degree as required.

21. NOTICES. Every direction, revocation or notice authorized or
required by the Plan shall be deemed delivered (a) to the Company on the date
it is personally delivered to the Secretary of the Company at its principal
executive offices or three business days after it is sent by registered or
certified mail, postage prepaid, addressed to the Secretary at such offices;
and (b) to an optionee on the date it is personally delivered to him or her or
three business days after it is sent by registered or certified mail, postage
prepaid, addressed to him or her at the last address shown for him or her on
the records of the Company or of any Subsidiary.

-7-
<PAGE> 8
22. STOCKHOLDER APPROVAL. The Plan shall be subject to approval
by the stockholders of the Company. Such stockholder approval shall be
obtained in the degree and manner required under the Delaware General
Corporation Law.

23. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be
issued with respect to an Option unless the exercise of such Option and the
issuance and delivery of such shares complies with all applicable provisions of
law, domestic or foreign, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the shares
may then be listed, and shall be further subject to the approval of counsel for
the Company with respect to such compliance.

As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.

24. TERM OF PLAN. The Plan shall become effective upon its
approval by the stockholders of the Company as described in Section 22. It
shall continue in effect for a term of ten (10) years unless sooner terminated
under Section 20.

25. MISCELLANEOUS.

(a) Legal and Other Requirements. The obligations of the
Company to sell and deliver Common Stock under the Plan shall be subject to all
applicable laws, regulations, rules and approvals, including, but not by way of
limitation, the effectiveness of a registration statement under the Securities
Act of 1933. Certificates for shares of Common Stock issued hereunder may be
legended as the Committee shall deem appropriate.

(b) Withholding Taxes. Upon the exercise of any Option
under the Plan, the Company shall have the right to require the Participant to
remit to the Company an amount sufficient to satisfy all federal, state and
local withholding tax requirements prior to crediting such Participant's Plan
Share Account with the shares of Common stock purchased upon the exercise of
such Option or the delivery of any certificate or certificates for such shares
of Common Stock.

(c) Right to Terminate Employment. Nothing in the Plan
or any agreement entered into pursuant to the Plan shall confer upon any
employee the right to continue in the employment of the Company or any
Subsidiary or affect any right which the Company or any Subsidiary may have to
terminate the employment of such employee.

(d) Applicable Law. All questions pertaining to the
validity, construction and administration of the Plan and Options granted
hereunder shall be determined in conformity with the laws of the State of
Delaware, to the extent not inconsistent with Section 423 of the Code and
regulations thereunder.

-8-

<PAGE> 1
EXHIBIT 10.10

REGISTRATION RIGHTS AGREEMENT
BY AND AMONG
SPR INC.,
DAVID A. FIGLIULO,
JOHN FIGLIULO,
ROBERT M. FIGLIULO,
AND
MICHAEL J. FLETCHER

<PAGE> 2

TABLE OF CONTENTS

PAGE

1. DEFINITIONS ............................................. -1-

2. DEMAND REGISTRATIONS .................................... -2-

3. PIGGYBACK REGISTRATIONS ................................. -4-

4. HOLDBACK AGREEMENTS ..................................... -5-

5. REGISTRATION PROCEDURES ................................. -6-

6. REGISTRATION EXPENSES ................................... -9-

7. INDEMNIFICATION ......................................... -10-

8. COMPLIANCE WITH RULE 144 AND RULE 144A .................. -11-

9. UNDERWRITTEN REGISTRATIONS .............................. -11-

10. ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES ............ -11-

11. REMEDIES ................................................ -11-

12. AMENDMENTS AND WAIVERS .................................. -12-

13. SUCCESSORS AND ASSIGNS .................................. -12-

14. FINAL AGREEMENT ......................................... -12-

15. SEVERABILITY ............................................ -12-

16. DESCRIPTIVE HEADINGS .................................... -12-

17. NOTICES.................................................. -12-

18. GOVERNING LAW ........................................... -13-

19. COUNTERPARTS ............................................ -13-

<PAGE> 3

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of
[__________ __, ____], is entered into by and among SPR Inc., a Delaware
corporation (the "CORPORATION"), David A. Figliulo, an individual residing at
[__________] ("D. FIGLIULO"), John Figliulo, an individual residing at
[__________] ("J. FIGLIULO"), Robert M. Figliulo, an individual residing at
[__________] ("R. FIGLIULO"), and Michael J. Fletcher, an individual residing
at [__________] ("M. FLETCHER"). D. Figliulo, J. Figliulo, R. Figliulo and M.
Fletcher are sometimes referred to herein collectively as the "INVESTORS" and
individually as an "INVESTOR".

RECITALS

WHEREAS, the Corporation desires to grant certain securities registration
rights in the stock of the Corporation to the Investors, in accordance with the
terms and provisions of this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:

AGREEMENTS

1. DEFINITIONS. In addition to the capitalized terms defined elsewhere in
this Agreement, the following capitalized terms shall have the following
meanings when used in this Agreement:

"COMMISSION" means the Securities and Exchange Commission.

"COMMON STOCK" means the Common Stock of the Corporation, $.01 par
value per share.

"D. FIGLIULO REGISTRABLE SECURITIES" means (i) 100,000 shares of the
Common Stock held as of the date hereof by D. Figliulo, and (ii) any Common
Stock issued or issuable with respect to the securities referred to in clause
(i) by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization.

"HOLDERS" means the holders of Registrable Securities who are parties
to this Agreement or successors or assigns or subsequent holders contemplated by
Section 13 hereof.

"J. FIGLIULO REGISTRABLE SECURITIES" means (i) [232,184] shares of the
Common Stock held as of the date hereof by J. Figliulo, and (ii) any Common
Stock issued or issuable with respect to the securities referred to in clause
(i) by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization.

<PAGE> 4

"M. FLETCHER REGISTRABLE SECURITIES" means (i) 100,000 shares of the
Common Stock held as of the date hereof by M. Fletcher, and (ii) any Common
Stock issued or issuable with respect to the securities referred to in clause
(i) by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization.

"PERSON" means a natural person, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or other entity, or a governmental
entity or any department, agency or political subdivision thereof.

"REGISTRABLE SECURITIES" means D. Figliulo Registrable Securities, J.
Figliulo Registrable Securities, R. Figliulo Registrable Securities and M.
Fletcher Registrable Securities. As to any particular Registrable Securities,
such securities shall cease to be D. Figliulo, J. Figliulo, R. Figliulo or M.
Fletcher Registrable Securities when they have been sold to the public either
pursuant to a registration statement declared effective by the Commission
pursuant to the Securities Act or pursuant to Rule 144 promulgated by the
Commission under the Securities Act (or any similar rule then in force). For
purposes of this Agreement, a Person will be deemed to be a Holder of
Registrable Securities whenever such Person has the right to acquire such
Registrable Securities (by conversion, exercise or otherwise), whether or not
such acquisition has actually been effected.

"REGISTRATION EXPENSES" has the meaning ascribed to it in Section 6 of
this Agreement.

"R. FIGLIULO REGISTRABLE SECURITIES" means (i) 100,000 shares of the
Common Stock held as of the date hereof by R. Figliulo, and (ii) any Common
Stock issued or issuable with respect to the securities referred to in clause
(i) by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization.

"SECURITIES ACT" means the Securities Act of 1933, as amended.

"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

"SUBSIDIARY" means any Person of which securities or other ownership
interests representing fifty percent (50%) or more of the ordinary voting power
are, at the time as of which any determination is being made, owned or
controlled by the Corporation or one or more Subsidiaries of the Corporation or
by the Corporation and one or more Subsidiaries of the Corporation.

2. DEMAND REGISTRATIONS.

(A) REQUESTS FOR REGISTRATION. At any time after the first anniversary
of the date hereof, the Holder or Holders of any Registrable Securities may
request at any time (except as otherwise provided herein and subject to Section
2(b)) registration under the Securities Act of

-2-

<PAGE> 5

all or part of such Holder's Registrable Securities on Form S-3 or any similar
short-form registration ("SHORT-FORM REGISTRATION"), if such Short-Form
Registration is then available to the Corporation. All registrations requested
pursuant to this Section 2(a) are referred to herein as "DEMAND REGISTRATIONS".
Each request for a Demand Registration shall specify the approximate number of
Registrable Securities requested to be registered and the anticipated per share
price range for such offering. Within ten days after receipt of any request
pursuant to this Section 2(a), the Corporation will give written notice of such
request to all other holders of Registrable Securities and will include in such
registration all Registrable Securities with respect to which the Corporation
has received written requests for inclusion therein within 21 days after the
Corporation's notice has been given.

(B) SHORT-FORM REGISTRATIONS. Any Holder of Registrable Securities
will be entitled to request a Short-Form Registration (subject to Section 2(a)),
provided, however, the Corporation shall not be required to effect more than
one Demand Registration for the Holders of the D. Figliulo Registrable
Securities, one Demand Registration for the Holders of the J. Figliulo
Registrable Securities, one Demand Registration for the Holders of the R.
Figliulo Registrable Securities and one Demand Registration for the Holders of
the M. Fletcher Registrable Securities. The Corporation will pay the
Registration Expenses of each such Demand Registration. Once the Corporation
has become subject to the reporting requirements of the Securities Exchange
Act, the Corporation will use its best efforts to make Short-Form Registrations
available for the sale of Registrable Securities. If the Short-Form
Registration is to be an underwritten public offering, and if the underwriter
for marketing or other reasons requests the inclusion in the registration
statement of information which is not required under the Securities Act to be
included in a registration statement on the applicable form for the Short-Form
Registration, the Corporation will provide such information as may be
reasonably requested for inclusion by the underwriter in the Short-Form
Registration.

(C) PRIORITY ON DEMAND REGISTRATIONS. If a Demand Registration is
an underwritten public offering and the managing underwriters advise the
Corporation in writing that in their opinion the inclusion of the number of
shares of Registrable Securities and other securities requested to be included
in such offering creates a substantial risk that the price per share of Common
Stock will be reduced, the Corporation will include in such registration the
number of shares of securities of the Corporation which in the opinion of such
underwriters can be sold in such offering without creating such a risk,
allocated in the following manner:

(i) first, the Registrable Securities requested to be included
in such offering, pro rata among the respective Holders of Registrable
Securities on the basis of the number of shares of Registrable Securities owned
or deemed to be owned by such Holders, with further successive pro rata
allocations among the Holders of Registrable Securities if any such Holder of
Registrable Securities has requested the registration of less than all such
Registrable Securities such Holder is entitled to register; and

(ii) second, other securities of the Corporation requested to
be included in such offering.

Notwithstanding the above, if a Demand Registration is not an underwritten
public offering, the Corporation will not include in any such Demand
Registration any securities which are not Registrable Securities without the
written consent of the Holder or Holders of a majority of the

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<PAGE> 6

Registrable Securities to be included in such registration.

(D) RESTRICTIONS ON REGISTRATIONS. The Corporation may postpone
for a reasonable period not to exceed 180 days the filing or the effectiveness
of registration statement for a Demand Registration if the Board of Directors of
the Corporation determines reasonably and in good faith that such filing would
require a disclosure of a material fact that would have a material adverse
effect on the Corporation or interfere with any plan by the Corporation or any
of its Subsidiaries to engage in any acquisition of assets (other than in the
ordinary course of business) or any financing, acquisition, reorganization,
merger, consolidation, tender offer or other significant transaction; provided
that in such event, the holders of Registrable Securities initially requesting
such Demand Registration shall be entitled to withdraw such request and, if
such request is withdrawn, such Demand Registration shall not count as one of
the permitted Demand Registrations hereunder and the Corporation shall pay all
Registration Expenses in connection with such registration. The Corporation
may delay a Demand Registration hereunder only once in any twelve-month period.

(E) RESTRICTIONS ON PUBLIC SALE BY HOLDER OF REGISTRABLE
SECURITIES. Each Holder of Registrable Securities agrees, if requested by (i)
the managing underwriters in an underwritten offering or (ii) the Holders of a
majority of the Registrable Securities included in a Demand Registration
not being underwritten, not to effect any public sale or distribution of
securities of the Corporation the same as or similar to those being registered,
or any securities convertible into or exchangeable or exercisable for such
securities, in such Registration Statement, including a sale pursuant to Rule
144 under the Securities Act, or any similar rule then in force (except as part
of such underwritten registration), during the 14-day period prior to, and
during the 90-day period (or, with respect to a Piggyback Registration, such
longer period of up to 180 days as may be required by such underwriter)
beginning on, the effective date of any Registration Statement in which Holders
of Registrable Securities are participating (except as part of such
registration) or the commencement of the public distribution of securities, all
to the extent timely notified in writing by the Corporation or the managing
underwriters (or the Holders, as the case may be).

3. PIGGYBACK REGISTRATIONS.

(A) RIGHT TO PIGGYBACK. Whenever securities of the Corporation are
to be registered under the Securities Act (other than pursuant to a Demand
Registration and other than pursuant to a registration statement on Form S-4 or
Form S-8, or any successor form) and the registration form to be used may be
used for the registration of Registrable Securities (a "PIGGYBACK
REGISTRATION"), the Corporation will give prompt written notice (and in any
event within three business days after its receipt of notice of any exercise of
demand registration rights by holders of the Corporation's securities other
than the Registrable Securities) to all Holders of Registrable Securities of
its intention to effect such a registration and will include in such
registration all Registrable Securities with respect to which the Corporation
has received written requests for inclusion therein within 20 days after the
Corporation's notice has been given.

(B) PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback Registration
is an underwritten primary registration on behalf of the Corporation, and the
managing underwriters advise the Corporation that in their opinion the number
of securities requested to be included in such registration creates a
substantial risk that the price per share of Common Stock will be

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<PAGE> 7

reduced, the Corporation will include in such registration (i) first, the
securities the Corporation proposes to sell; (ii) second, the Registrable
Securities requested to be included in such registration, pro rata among the
respective Holders of Registrable Securities on the basis of the number of
shares of Registrable Securities owned or deemed to be owned by such Holders,
with further successive pro rata allocations among the Holders of Registrable
Securities if any such Holder of Registrable Securities has requested the
registration of less than all such Registrable Securities such Holder is
entitled to register; and (iii) third, other securities requested to be
included in such registration.

(C) PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
the Corporation's securities, and the managing underwriters advise the
Corporation that in their opinion the inclusion of the number of securities
requested to included in such offering creates a substantial risk that the
price per share of Common Stock will be reduced, the Corporation will include
in such registration (i) first, the securities requested to be included therein
by the holders requesting such registration; (ii) second, the Registrable
Securities requested to be included in such registration, pro rata among the
respective Holders of Registrable Securities on the basis of the number of
shares of Registrable Securities owned or deemed to be owned by such Holders,
with further successive pro rata allocations among the Holders of Registrable
Securities if any such Holder of Registrable Securities has requested the
registration of less than all such Registrable Securities such Holder is
entitled to register; and (iii) third, other securities requested to be
included in such registration.

(D) OTHER REGISTRATIONS. If the Corporation has previously filed a
registration statement which includes Registrable Securities pursuant to
Section 2 or pursuant to this Section 3, and if such previous registration has
not been withdrawn or abandoned, the Corporation will not file or cause to be
effected any other registration of any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity securities under
the Securities Act (except on Form S-4 or Form S-8 or any successor form),
whether on its own behalf or at the request of any holder or holders of such
securities, until period of 180 days has elapsed from the effective date of
such previous registration.

(E) LIMITATIONS ON REGISTRATIONS. The Corporation shall not
register any of its securities for sale for its own account (other than
securities issued to employees of the Corporation under an employee benefit
plan or securities issued to effect a business combination pursuant to Rule 145
promulgated under the Securities Act and other than a registration on Form S-3)
except as a firm commitment underwriting.

4. HOLDBACK AGREEMENTS.

(A) Each of the Holders of Registrable Securities agrees not to
effect any public sale (including pursuant to Rule 144 promulgated under the
Securities Act, or any similar rule then in force) of equity securities of the
Corporation, or any securities convertible into or exchangeable or exercisable
for such securities, during the fourteen days prior to and the 90-day period
beginning on the effective date of any underwritten Demand Registration (or
such longer period, not to exceed 180 days, if requested by the managing
underwriters) (except as part of such underwritten registration), unless the
underwriters managing the registered public offering otherwise agree or
pursuant to registrations on Form S-4 or Form S-8 (or any successor form).

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<PAGE> 8

(B) The Corporation agrees (i) not to effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and during the 90-day period beginning on the effective date of any
underwritten Demand Registration or any underwritten Piggyback Registration
(except as part of such underwritten registration or pursuant to a registration
on Form S-4 or Form S-8 or any successor form), unless the underwriters
managing the registered public offering otherwise agree, (ii) to cause each
holder of at least 5% (on a fully-diluted basis) of its equity securities, or
any securities convertible into or exchangeable or exercisable for such
securities, purchased from the Corporation at any time after the date of this
Agreement (other than in a registered public offering) to agree not to effect
any public sale of any such securities during such period (except as part of
such underwritten registration, if otherwise permitted), unless the
underwriters managing the registered public offering otherwise agree, and (iii)
if requested by the underwriters managing the registered public offering, to
use it best efforts to cause each other holder of its equity securities, or any
securities convertible into or exchangeable or exercisable for such securities,
purchased from the Corporation at any time (other than in a registered public
offering) to agree not to effect any public sale of any such securities during
such period (except as part of such underwritten registration, if otherwise
permitted), unless the underwriters managing the registered public offering
otherwise agree.

(C) Nothing herein shall prevent a Holder that is a partnership from
making a distribution of Registrable Securities to its partners, a Holder that
is a trust from making a distribution of Registrable Securities to its
beneficiaries or a Holder that is a corporation from making a distribution of
Registrable Securities to its shareholders, provided that the transferees of
such Registrable Securities agree to be bound by the provisions of this
Agreement to the extent the transferor would be so bound.

5. REGISTRATION PROCEDURES.

(A) Whenever the Holders of Registrable Securities have requested that
any Registrable Securities be registered pursuant to the terms of this
Agreement, the Corporation will use its best efforts to effect the registration
and the sale of such Registrable Securities in accordance with the intended
method of disposition thereof, and pursuant thereto the Corporation will as
expeditiously as possible:

(i) prepare and file with the Commission a registration
statement on the appropriate form with respect to such Registrable Securities
and use its best efforts to cause such registration statement to become
effective as soon as practicable after such filing;

(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective and to comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such registration statement
until such time as the Registrable Securities registered thereunder have been
disposed of in accordance with the intended methods of disposition by the
sellers thereof set forth in such registration statement, but in no event for a
period in excess of nine months;

(iii) furnish to each seller of such Registrable Securities and
the underwriters of the securities being registered such number of copies of
such registration

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<PAGE> 9

statement, each amendment and supplement thereto, the prospectus included in
such registration statement (including each preliminary prospectus) and such
other documents as such seller or underwriters may reasonably request in order
to facilitate the disposition of the Registrable Securities owned by such
seller or the sale of such securities by such underwriters;

(iv) use its best efforts to register or qualify such
Registrable Securities under such other securities laws of such
jurisdictions as any seller reasonably requests and do any and all other acts
and things which may be necessary or desirable to enable such seller to
consummate the public sale or other disposition in such jurisdictions of the
Registrable Securities own by such seller (provided, however, that the
Corporation will not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
subsection or (B) consent to general service of process in any such
jurisdiction);

(v) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued the Corporation are
then listed, or if no similar securities issued by the Corporation are then
listed on a securities exchange, either a securities exchange or NASDAQ-NMS, as
selected by the Corporation;

(vi) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;

(vii) enter into such customary agreements (including
underwriting agreements) and take all such other actions as the Holder or
Holders of a majority of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities (including, but not limited to,
effecting a stock split or a combination of shares);

(viii) make available for inspection by each seller of such
Registrable Securities, any underwriter participating in any disposition
pursuant to such registration statement, and any attorney, accountant or other
agent designated by any such seller or underwriter, all financial and other
records, pertinent corporate documents and properties of the Corporation, and
cause the Corporation's officers, directors, employees and independent
accountants to supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such registration
statement;

(ix) notify each seller of such Registrable Securities,
promptly after it shall receive notice thereof, of the time when such
registration statement has become effective or a supplement to any prospectus
forming a part of such registration statement has been filed;

(x) notify each seller of such Registrable Securities of any
request by the Commission for the amending or supplementing of such
registration statement or prospectus or for additional information;

(xi) prepare and file with the Commission, promptly upon the
request of any seller of such Registrable Securities, any amendments or
supplements to such registration statement or prospectus which, in the opinion
of counsel selected by the Holder or Holders of a majority of the Registrable
Securities being registered, is required under the Securities Act or the rules
and regulations thereunder in connection with the distribution of Registrable
Securities by

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<PAGE> 10
such seller;

(xii) prepare and promptly file with the Commission and
promptly notify each seller of such Registrable Securities of the filing of
such amendment or supplement to such registration statement or prospectus as
may be necessary to correct any statements or omissions if, at the time when a
prospectus relating to such securities is required to be delivered under the
Securities Act, any event shall have occurred as the result of which any such
prospectus or any other prospectus as then in effect would include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances in which they
were made, not misleading:

(xiii) advise each seller of such Registrable Securities,
promptly after it shall receive notice or obtain knowledge thereof, of the
issuance of any stop order by the Commission suspending the effectiveness of
such registration statement or the initiation or threatening of any proceeding
for such purpose and promptly use all reasonable efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such stop order
should be issued;

(xiv) in case of a Demand Registration, at least forty-eight
hours, and with respect to any other registration, as soon as reasonably
practicable, prior to the filing of any registration statement or prospectus or
any amendment or supplement to such registration statement or prospectus,
furnish a copy thereof to each seller of such Registrable Securities and
refrain from filing any such registration statement, prospectus, amendment
or supplement to which counsel selected by the Holders of a majority of the
Registrable Securities being registered shall have reasonably objected on the
grounds that such amendment or supplement does not comply in all material
respects with the requirements of the Securities Act or the rules and
regulations thereunder, unless, in the case of an amendment or supplement, in
the opinion of counsel for the Corporation the filing of such amendment or
supplement is reasonably necessary to protect the Corporation from any material
liabilities under any applicable federal or state law and such filing will not
violate applicable laws; and

(xv) at the request of any seller of such Registrable
Securities in connection with an underwritten offering, furnish on the date
or dates provided for in the underwriting agreement: (A) an opinion of
counsel, addressed to the underwriters and the sellers of Registrable
Securities, covering such matters as such underwriters and sellers may
reasonably request, including, but not limited to, opinions to the effect that
(1) such registration statement has become effective under the Securities Act;
(2) to the best of such counsels' knowledge no stop order suspending the
effectiveness thereof has been issued and no proceedings for that purpose have
been instituted or are pending or contemplated under the Securities Act; (3)
the registration statement, the prospectus, and each amendment or supplement
thereto comply as to form in all material respects with the requirements of the
Securities Act and the applicable rules and regulations of the Commission
thereunder (except that such counsel need express no opinion as to financial
statements or other financial or statistical data contained therein); (4) while
such counsel has not verified the accuracy, completeness, or fairness of the
statements contained in any registration statement or prospectus, as either may
be amended or supplemented, such counsel has no reason to believe that the
registration statement, the prospectus, or any amendment or supplement thereto
contains any untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading (except that such counsel need express no opinion as to
financial statements or other

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<PAGE> 11

financial or statistical data contained therein); (5) subject to customary
materiality and knowledge limitations, the descriptions in the registration
statement, the prospectus, or any amendment or supplement thereto of all legal
and governmental proceedings and all contracts and other legal documents or
instruments are accurate in all material respects; and (6) while such counsel
has not verified the accuracy, completeness, or fairness of the statements
contained in any registration statement or prospectus, as either may be amended
or supplemented, such counsel does not know of any legal or governmental
proceedings, pending or threatened, required to be described in the
registration statement, the prospectus, or any amendment or supplement thereto
which are not described as required nor (to the best knowledge of such counsel)
of any contracts or documents or instruments of the character required to be
described in the registration statement, the prospectus, or any amendment or
supplement thereto or to be filed as described or filed as required; and (B) a
letter or letters from the independent certified public accountants of the
Corporation addressed to the underwriters and the sellers of such Registrable
Securities, covering such matters as such underwriters and sellers may
reasonably request, in which letters such accountants shall state, without
limiting the generality of the foregoing, that they are independent certified
public accountants within the meaning of the Securities Act and that in the
opinion of such accountants the financial statements and other financial data
of the Corporation included in the registration statement, the prospectus, or
any amendment or supplement thereto comply in all material respects with the
applicable accounting requirements of the Securities Act.

(B) The Corporation may require each seller of Registrable
Securities as to which any registration is being effected to furnish to the
Corporation such information regarding the distribution of such securities and
such other information relating to such Holder and its ownership of Registrable
Securities as the Corporation may from time to time reasonably request in
writing. Each Holder of Registrable Securities agrees to furnish such
information to the Corporation and to cooperate with the Corporation as
reasonably necessary to enable the Corporation to comply with the provisions of
this Agreement.

6. REGISTRATION EXPENSES.

(A) Except as provided in Section 2(b) hereof, all expenses
incident to the Corporation's performance of or compliance with this
Agreement, including, but not limited to, all registration and filing fees,
fees and expenses of compliance with federal, state and foreign securities
laws, printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Corporation and its independent certified
public accountants, underwriters (excluding discounts and commissions
attributable to the Registrable Securities included in such registration) and
other Persons retained by the Corporation (all such expenses being herein
called "REGISTRATION EXPENSES") will be borne by the Corporation. In addition,
the Corporation will pay its internal expenses (including, but not limited to,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit or quarterly review, the
expense of any liability insurance obtained by the Corporation and the expenses
and fees for listing the securities to be registered on each securities
exchange.

(B) Except as provided in Section 2(b) hereof, in connection with
any registration statement in which Registrable Securities are included, the
Corporation will reimburse the Holders of Registrable Securities covered by
such registration for the reasonable cost and expenses incurred by such holders
in connection with such registration, including, but not limited to, reasonable
fees and disbursements (not to exceed $15,000) of one counsel chosen

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by the Holders of a majority of such Registrable Securities.

7. INDEMNIFICATION.

(A) The Corporation agrees to indemnify, to the fullest extent
permitted by law, each seller of Registrable Securities, and his or its
partners, officers, directors, representatives and heirs and each Person
who controls such seller (within the meaning of the Securities Act or the
Securities Exchange Act) against all losses, claims, damages, liabilities and
expenses (including, but not limited to, attorneys' fees except as limited by
Section 7(c)) caused by any untrue or alleged untrue statement of a material
fact contained in any registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, except insofar as the same are
caused by or contained in any information furnished in writing to the
Corporation by such seller expressly for use therein or by such seller's
failure to deliver a copy of the prospectus or any amendments or supplements
thereto after the Corporation has furnished such seller with a sufficient
number of copies of the same. In connection with an underwritten offering, the
Corporation will indemnify such underwriters, their officers and directors and
each Person who controls such underwriters (within the meaning of the
Securities Act or the Securities Exchange Act) to the same extent as provided
above with respect to the indemnification of the sellers of Registrable
Securities. The reimbursements required by this Section 7(a) will be made by
periodic payments during the course of the investigation or defense, as and
when bills are received or expenses incurred.

(B) In connection with any registration statement in which a seller
of Registrable Securities is participating, each such seller will furnish to the
Corporation in writing such information and affidavits as the Corporation
reasonably requests for use in connection with any such registration statement
or prospectus and, to the fullest extent permitted by law, will indemnify the
Corporation, its directors and officers and each Person who controls the
Corporation (within the meaning of the Securities Act or the Securities
Exchange Act) against any losses, claims, damages, liabilities and expenses
(including, but not limited to, attorneys' fees except as limited by Section
7(c)) resulting from any untrue statement of a material fact contained in the
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
only to the extent that such untrue statement or omission is contained in any
information or affidavit so furnished in writing by such seller; provided that
the obligation to indemnify will be several, not joint and several, among such
sellers of Registrable Securities, and the liability of each such seller of
Registrable Securities will be in proportion to, and provided further that such
liability will be limited to, in any event, the net amount received by such
seller from the sale of Registrable Securities pursuant to such registration
statement.

(C) Any Person entitled to indemnification hereunder will i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification and ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent

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<PAGE> 13

(but such consent will not be unreasonably withheld). An indemnifying party
who is not entitled to, or elects not to, assume the defense of a claim will
not be obligated to pay the fees and expenses of more than one counsel for all
parties indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim.

(D) The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made by
or on behalf of the indemnified party or any officer, director or controlling
Person of such indemnified party and will survive the transfer of securities.
The Corporation also agrees to make such provisions as are reasonably requested
by any indemnified party for contribution to such party in the event the
Corporation's indemnification is unavailable for any reason.

8. COMPLIANCE WITH RULE 144 AND RULE 144A. At any time and from time to
time after (a) the Corporation registers a class of securities under Section 12
of the Securities Exchange Act, or (b) the expiration of 90 days following the
close of business on the earlier of such date as the Corporation commences to
file reports under Section 13 or Section 15(d) of the Securities Exchange Act,
then at the request of any holder who proposes to sell securities in compliance
with Rule 144 promulgated by the Commission (or any similar rule then in
force), the Corporation will (i) forthwith furnish to such holder a written
statement of compliance with the filing requirements of the Commission as set
forth in Rule 144 as such rule may be amended from time to time and (ii) make
available to the public and such holders such information as will enable the
Holders to make sales pursuant to Rule 144. Unless the Corporation is subject
to Section 13 or Section 15(d) of the Securities Exchange Act, the Corporation
will provide to any Holder of Registrable Securities and to any prospective
purchaser of Registrable Securities under Rule 144A promulgated by the
Commission (or any similar rule then in force), the information described in
Rule 144A(d)(4) promulgated by the Commission (or any similar rule then in
force).

9. UNDERWRITTEN REGISTRATIONS. No Person may participate in any
registration hereunder which is underwritten unless such Person (a) agrees to
sell such Person's securities on the basis provided in any underwriting
arrangements approved by the Person or Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements. The Holders of a majority
of the Registrable Securities requested to be registered will have the right to
select the managing underwriters to administer any offering of the
Corporation's securities in which the Corporation does not participate, subject
to the prior approval of the Corporation, which approval shall not be
unreasonably withheld, and the Corporation will have such right in any offering
in which it participates.

10. ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. The Corporation will
not take any action, or permit any change to occur, with respect to its
securities which would adversely affect the ability of the Holders of
Registrable Securities to include such Registrable Securities in a registration
undertaken pursuant to this Agreement or which would adversely affect the
marketability of such Registrable Securities in any such registration.

11. REMEDIES. Any Person having rights under any provision of this
Agreement will

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be entitled to enforce such rights specifically, to recover damages caused by
reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law.

12. AMENDMENTS AND WAIVERS. Except as otherwise expressly provided
herein, the provisions of this Agreement may be amended or waived at any time
only by the written agreement of the Corporation, the Holders of a majority of
the D. Figliulo Registrable Securities, the Holders of a majority of the J.
Figliulo Registrable Securities, the Holders of a majority of the R. Figliulo
Registrable Securities and the Holders of a majority of the M. Fletcher
Registrable Securities. Any waiver, permit, consent or approval of any kind or
character on the part of any such holders of any provision or condition of this
Agreement must be made in writing and shall be effective only to the extent
specifically set forth in writing. Any amendment or waiver effected in
accordance with this Section 12 shall be binding upon each Holder of
Registrable Securities and the Corporation. Each Holder acknowledges that by
operation of this Section 12 the Holders of a majority of the D. Figliulo
Registrable Securities, the Holders of a majority of the J. Figliulo
Registrable Securities, the Holders of a majority of the R. Figliulo
Registrable Securities and the Holders of a majority of the M. Fletcher
Registrable Securities, acting in conjunction with the Corporation, will have
the right and power to diminish or eliminate all rights pursuant to this
Agreement.

13. SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto, whether so expressed
or not. In addition and whether or not any express assignment has been made,
the provisions of this Agreement which are for the benefit of purchasers or
holders of Registrable Securities are also for the benefit of, and enforceable
by, any subsequent holder of Registrable Securities who consents in writing to
be bound by this Agreement.

14. FINAL AGREEMENT. This Agreement constitutes the final agreement of
the parties concerning the matters referred to herein, and supersedes all prior
agreements and understandings.

15. SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the
remainder of this Agreement.

16. DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement are
inserted for convenience of reference only and do not constitute a part of and
shall not be utilized in interpreting this Agreement.

17. NOTICES. Any notices required or permitted to be sent hereunder shall
be delivered personally or mailed, certified mail, return receipt requested, or
delivered by overnight courier service to the following addresses, or such
other addresses as shall be given by notice delivered hereunder, and shall be
deemed to have been given upon delivery, if delivered personally, three
business days after mailing, if mailed, or one business day after delivery to
the courier, if delivered by overnight courier service:

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If to the initial Holders of the Registrable Securities, to the addresses
set forth on Schedule 1 hereto.

If to the Holders of Registrable Securities other than the initial Holders
of the Registrable Securities, to the addresses set forth on the stock record
books of the Corporation.

If to the Corporation, to:

SPR Inc.
2015 Spring Road
Suite 750
Oak Brook, Illinois 60521
Attention: Robert M. Figliulo

18. GOVERNING LAW. The validity, meaning and effect of this Agreement
shall be determined in accordance with the laws of the State of Illinois
applicable to contracts made and to be performed in that state.

19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute one instrument. Each
party shall receive a duplicate original of the counterpart copy or copies
executed by it and the Corporation.

* * * * *

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IN WITNESS WHEREOF, the undersigned parties have executed this
Registration Rights Agreement as of the date first written above.

SPR INC.

By:
----------------------------------
Its:
----------------------------------

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DAVID A. FIGLIULO

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JOHN FIGLIULO

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ROBERT M. FIGLIULO

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MICHAEL J. FLETCHER

-14-
<PAGE> 17

SCHEDULE 1

David A. Figliulo
c/o SPR Inc.
2015 Spring Road
Suite 750
Oak Brook, Illinois 60521

John Figliulo
c/o SPR Inc.
2015 Spring Road
Suite 750
Oak Brook, Illinois 60521

Robert M. Figliulo
c/o SPR Inc.
2015 Spring Road
Suite 750
Oak Brook, Illinois 60521

Michael J. Fletcher
c/o SPR Inc.
2015 Spring Road
Suite 750
Oak Brook, Illinois 60521

-15-

<PAGE> 1

EXHIBIT 10.11

TAX INDEMNITY AGREEMENT

AGREEMENT made as of November ___, 1996 between SPR Inc., a Delaware
corporation (the "Company"), and Robert Figliulo, David Figliulo, Mike Fletcher,
Rene Potter, John Figliulo, James Figliulo, Stephen Figliulo, Jeanne Marie
Young, Donald Figliulo, Mark Figliulo, Michael Cymbala and Eugene Figliulo
(collectively, the "Shareholders).

WHEREAS, the Company and its predecessors, SPR Chicago Inc. ("SPR
Chicago"), Systems & Programming Resources of Tulsa, Inc. ("SPR Tulsa"),
SPR-Wisconsin, Inc. ("SPR Wisconsin"), Systems and Programming Resources, Inc.
("Systems Inc.") and Consulting Acquisition, Inc. ("Data Flex") have previously
elected to be treated as an S Corporation (as defined in Section 1361 of the
Internal Revenue Code of 1986, as amended ("the Code");

WHEREAS, the Shareholders and the Company acknowledge that such S
Corporation election will terminate (the "Termination") upon completion of a
public offering of the Company's stock (the "Initial Public Offering") by reason
of the company ceasing to be a Small Business Corporation (as defined in Section
1361 of the Code);

NOW THEREFORE, the parties hereto agree as follows:

1. Payment of Taxes.

(a) Each Shareholder agrees to pay all federal, state and local income
taxes (other than those taxes described in Section 1(b) below) payable with
respect to the income of the Company or any predecessor of which he or she
was or is a Shareholder to the extent of his or her pro rata interest as a
Shareholder, for all taxable years ending with or prior to the Termination;
provided, however, that if, and to the extent, an adjustment is made (as a
result of a final determination made by a competent tax authority) to the
taxable income of the Company or any predecessor for any taxable period
ending with or prior to the Termination which results in (i) an increase in
income taxes payable by the respective Shareholders for any period for
which such Shareholders are required to report income of the Company or any
predecessor for a period of the Company or any predecessor ending with or
prior to the Termination, and (ii) a tax credit or a decrease in taxable
income of the Company or any other item which would reduce the income

<PAGE> 2
taxes otherwise payable by the Company for any period following the
Termination, then the Company shall promptly make a payment (the "Company
Payment") to the respective Shareholders in an amount equal to the present
value of the sum (the "Tax Benefits") of (x) such decrease in taxable
income multiplied by the then applicable corporate tax rate, plus (y) the
amount of such tax credits, plus (z) the amount of any tax savings which
would be caused by any such other item, which will be realized by the
Company, calculated by discounting the Tax Benefits utilizing a discount
rate equal to the Applicable Federal Rate ("AFR") (as defined in Section
1274(d) of the Code) which corresponds to the period over which the Tax
Benefits will be realized, provided, however, that if, and to the extent,
such Tax Benefit is not actually realized by the Company during the period
in which such Tax Benefit or portion thereof, was assumed to be realized
for purposes of calculating the Company Payment, then the respective
Shareholders shall promptly make a payment (the "Shareholder Payment") to
the Company equal to the portion of the Tax Benefit which is not actually
realized by the Company, together with interest thereon, at the AFR in
effect as of the Assumed Tax Benefit Date (as defined below), for the
period from the date as of which such Tax Benefit, or portion thereof, was
assumed to be realized for purposes of calculating the Company Payment (the
"Assumed Tax Benefit Date") to the date of such Shareholder Payment.

(b) The Company acknowledges that it shall be solely responsible for
any federal, state and local taxes (including interest and penalties, if
any): (i) directly imposed on the Company, or (ii) computed without regard
to the Shareholders' distributive share of the Company's income, including
but not limited to the Built-In Gains Tax imposed by Section 1374 of the
Code, the Tax on Excess Passive Investment Income imposed by Section 1375
of the Code, and the Illinois Personal Property Replacement Tax.

2. Pro Rata Allocation of S Corporation Items. The Shareholders and
the Company acknowledge that the Company's items of income, loss,
deduction, or credit described in Section 1366(a)(1)(A) of the Code, and
the amount of the Company's non-separately computed income or loss for the
taxable year in which the S Corporation election is terminated shall be
allocated between the "short S year" and the "short C year" (as those terms
are defined in Section 1362(e)(1) of the Code) pursuant to Section
1362(e)(2) of the Code. The Shareholders and the Company further agree not
to make the election provided for under Section 1362(e)(3) of the Code.

2
<PAGE> 3
SPR INC.

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

SHAREHOLDERS

- ----------------------------- -----------------------------
Robert Figliulo Stephen Figliulo

- ----------------------------- -----------------------------
David Figliulo Jeanne Marie Young

- ----------------------------- -----------------------------
Mike Fletcher Donald Figliulo

- ----------------------------- -----------------------------
Rene Potter Mark Figliulo

- ----------------------------- -----------------------------
John Figliulo Michael Cymbala

- ----------------------------- -----------------------------
James Figliulo Eugene Figliulo

<PAGE> 1
EXHIBIT 16.1

[ERNST & YOUNG LLP LETTERHEAD]

January 7, 1997

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Gentlemen:

This is to inform you that we have read the "Change in Accountants" section on
page 45 of Amendment No. 1 to Registration Statement on Form S-1 (Registration
No. 333-16421) of SPR Inc. and are in agreement with the statements contained
therein insofar as they relate to Ernst & Young LLP. We have no basis to
agree or disagree with other statements of the registrant contained therein.

Ernst & Young LLP