Exhibit 10.3

 

NET PROFIT

RESTRICTED SHARE AWARD

UNDER THE
2005 OMNIBUS STOCK AND INCENTIVE PLAN
for
THOMAS GROUP, INC.

 

Effective as of December 20, 2005 (“Date of Grant”), a NET PROFIT RESTRICTED
SHARE AWARD (“Award”) is granted by Thomas Group, Inc. (the “Company”) to David
English (the “Holder”), provided, further, that this Award is in all respects
subject to the terms, definitions and provisions of the 2005 Omnibus Stock and
Incentive Plan For Thomas Group, Inc. (the “Plan”), all of which are
incorporated herein by reference, except to the extent otherwise expressly
provided in this Award.

 

WITNESSETH

 

WHEREAS, the Company desires to grant to Holder 50,000 Shares subject to certain
restrictions described herein; and

 

WHEREAS, the Company desires to grant to Holder a Cash Bonus of $50,000 subject
to the satisfaction of certain conditions described herein; and

 

WHEREAS, the purpose of this Award is to advance the interests of the Company
and increase shareholder value by providing additional incentives to attract,
retain and motivate Holder; and

 

WHEREAS, the terms of the Award, including without limitation the Restrictions
imposed on Restricted Shares and Cash Bonus, are set forth below; and

 

WHEREAS, the Plan is effective as of December 20, 2005, the date of its adoption
by the Board, subject to approval by a majority of the Company’s stockholders
and compliance with Regulation 14C under the 1934 Act; provided, however, that
if the Plan is not so approved or there has not been compliance with Regulation
14C by December 20, 2006, this Award shall terminate and be null and void ab
initio; and provided, further, that no Restricted Shares will Vest prior to such
stockholder approval and compliance with Regulation 14C.

 

NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth
and for other good and valuable consideration, the parties agree as follows:

 

1.             Definitions.  As used in this Award, the following words shall
have the following meanings:

 

“Accounting Firm” shall mean the Company’s certified public accounting firm on
the date of reference.

 

“Anniversary Date” shall mean each anniversary of the Date of Grant.

 

“Annual Profit” shall mean the net income of the Company before interest
expense, interest income, gain (loss) on sale of equipment, gain (loss) on
investment, gain on sale of land, depreciation, amortization, taxes on income,
extraordinary items, and the expense attributable to the grant of the

 

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Award, all as determined by the Accounting Firm using generally accepted
accounting principles and as reflected on the Company’s certified Financial
Statements to the extent shown or reflected on such Financial Statements.  For
this purpose, extraordinary items are those of a non-recurring and unusual
nature, or resulting from unforeseen and atypical events, as determined by the
Accounting Firm using generally accepted accounting principles and as reflected
on the Company’s certified Financial Statements as certified by the Accounting
Firm to the extent shown or reflected on such Financial Statements.

 

“Annual Profit Increase Percentage” shall mean, for each Year, the quotient of
(i) the excess (if any) of the Annual Profit for the current Year over the
greater of (x) the Annual Profit for the year 2005; and (y) the Annual Profit
for the preceding Year, divided by (ii) the greater of (x) or (y).

 

“Award Shares” shall mean all Shares subject to this Award, including, without
limitation, both Restricted Shares and Vested Shares.

 

“Award Share Distributions” shall mean any amounts of cash, or stock, paid or
distributed by the Company with respect to Award Shares.

 

“Board” shall mean the Board of Directors of the Company.

 

“Cash Bonus” shall mean the amount described in Section 4.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended.

 

“Compensation Committee” shall mean the Compensation and Corporate Governance
Committee of the Board.

 

 “Restrictions” shall mean the requirement that the Award Shares be returned to
the Company under certain circumstances described in this Award, and which
requirement shall constitute a “substantial risk of forfeiture” as defined under
Section 83(a)(1) of the Code.

 

“Restricted Period” shall mean the period during which Award Shares remain
subject to Restrictions.

 

“Restricted Shares” shall mean the Award Shares which remain subject to the
Restrictions at the time of reference.

 

“Retention Period” shall mean the period beginning with the Date of Grant, and
ending on the date of Holder’s Separation.

 

“Separation” shall mean Holder’s termination of full time employment by the
Company for any reason.

 

“Share(s)” shall mean shares of common stock, par value $.01 per share, of the
Company.

 

 “Termination Date” shall mean the date on which the Award terminates under
Section 9.

 

“Year” shall mean the fiscal year of the Company.

 

“Vest”, “Vested” “Vested Shares” and similar shall mean the Award Shares with
respect to which the Restrictions have lapsed at the time of reference.

 

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2.             Restricted Share Award.  The Company hereby transfers and
delivers to Holder an aggregate of 50,000 Restricted Shares to hold on the terms
and conditions set forth in this Award.  Holder shall not be entitled to receive
Restricted Share Distributions made prior to the date on which Restricted Shares
become Vested Shares, but Holder will be entitled to receive any Restricted
Share Distributions which are made with respect to Restricted Shares after they
become Vested Shares.

 

3.             Lapse of Restrictions (Vesting).  The Restrictions on the
Restricted Shares shall lapse, and such Restricted Shares shall become Vested
Shares, with respect to 16,666 Restricted Shares on the last day of the first
Year, and with respect to 16,667 Restricted Shares in each subsequent Year, in
which the Company achieves at least a 15% Annual Profit Increase Percentage.

 

4.             Cash Bonus.  As soon as reasonably possible following the first
Year in which the Company achieves at least a 15% Annual Profit Increase
Percentage, the Company shall pay Holder a Cash Bonus of $16,666, and as soon as
reasonably possible following the second and third Years in which the Company
achieves at least a 15% Annual Profit Increase, the Company shall pay Holder a
Cash Bonus of $16,667.

 

5.             Withholding.  On each date on which Restrictions lapse, and on
the payment of the Cash Bonus, Holder shall be required to pay to the Company,
in cash, the amount which the Company reasonably determines to be necessary in
order for the Company to comply with applicable federal or state income tax
withholding requirements and the collection of employment taxes; provided,
further, that the Company, in its sole discretion, may offset the amount it
reasonably determines as necessary to withhold from the Cash Bonus otherwise
payable to Holder.

 

6.             Status of Holder With Respect to Restricted Shares.  During the
Restricted Period, the certificates representing the Restricted Shares shall be
registered in the Holder’s name and bear a restrictive legend disclosing the
Restrictions.  Such certificates shall be deposited by the Holder with the
Company, together with stock powers or other instruments of assignment, each
endorsed in blank, which will permit the transfer to the Company of all or any
portion of the Restricted Shares which are forfeited.  Restricted Shares shall
not constitute issued and outstanding common stock for any corporate purposes
and the Holder shall have no rights, powers and privileges of a Holder of
unrestricted Shares until such Restricted Shares become Vested Shares, at which
time, with respect to Vested Shares, the Holder shall have all rights, powers
and privileges of a Holder of unrestricted Shares, including with respect to
those Vested Shares which continue to be held by the Company during the
Retention Period.

 

At each time Restricted Shares become Vested, the Company shall deliver to the
Holder 40% of the such Vested Shares, and shall continue to hold the remaining
60% percent of Vested Shares during the Retention Period, and shall, as soon as
reasonably possible after the end of such Retention Period, deliver all retained
Vested Shares to Holder.  Without limitation, the Company’s right to hold the
60% of retained Vested Shares during the Retention Period shall survive the
Termination Date.

 

All Award Share Distributions with respect to Vested Shares shall be immediately
paid to Holder, except that where such Award Share Distribution is in the form
of Shares, such Shares shall be retained until the end of the Retention Period.

 

As a condition of the grant of Restricted Shares, and the issuance of Vested
Shares, the Board may obtain such agreements or undertakings, if any, as the
Board may deem necessary or advisable to assure compliance with any law or
regulation including, but not limited to, the following:

 

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(a)           a representation, warranty or agreement by Holder to Company that
he is acquiring the Vested Shares to be issued to him for investment and not
with a view to, or for sale in connection with, the distribution of any such
Vested Shares subsequent to the Retention Period; and

 

(b)           a representation, warranty or agreement to be bound by any legends
that are, in the opinion of the Board, necessary or appropriate to comply with
the provisions of any securities law deemed by the Board to be applicable to the
issuance of the Vested Shares and are endorsed upon the Share certificates.

 

7.             Transferability of Restricted Shares.  The Vested Shares held by
the Company during the Retention Period, and this Award, shall not be
transferable by Holder.

 

8.             Section 83(b) Election.  Holder, having been granted Restricted
Shares subject to a “substantial risk of forfeiture,” may elect under
Section 83(b) of the Code to include in his gross income the fair market value
(determined without regard to the Restrictions) of such Restricted Shares as of
the Date of Grant.  If Holder makes the Section 83(b) election, Holder shall
(i) make such election in a manner that is satisfactory to the Company,
(ii) provide the Company with a copy of such election, (iii) agree to promptly
notify the Company if any Internal Revenue Service or state tax agent, on audit
or otherwise, questions the validity or correctness of such election or of the
amount of income reportable on account of such election, and (iv) agree to such
federal and state income withholding as the Company may reasonably require in
its sole and absolute discretion.

 

9.             Termination of the Award.  Without limitation, this Award shall
automatically terminate and expire on the earlier of (i) the date on which all
Restricted Shares have become Vested Shares, or (ii) the date of Holder’s
Separation, and upon the date of such termination of the Award all Restricted
Shares which have not Vested on or prior to such date will be permanently
forfeited.

 

10.          Interpretation of the Award Provisions.  The Compensation Committee
shall have the authority to the full extent provided under the terms of the Plan
to interpret all terms of the Plan and this Award, and to otherwise supervise
the implementation of such terms.

 

11.          Governing Law.  TO THE MAXIMUM EXTENT PERMITTED UNDER APPLICABLE
LAW, THIS AWARD SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF TEXAS.

 

12.          Binding Effect.  This Award shall inure to the benefit of and be
binding upon the heirs, executors, administrators, successors and assigns of the
parties hereto.

 

13.          Amendments.  This Award may only be amended by a written document
signed by the Company and Holder.

 

14.          Severability.  If any provision of this Award is declared or found
to be illegal, unenforceable or void, in whole or in part, the remainder of this
Award will not be affected by such declaration or finding and each such
provision not so affected will be enforced to the fullest extent permitted by
law.

 

15.          Counterparts.  This Award may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

 

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IN WITNESS WHEREOF, the Company has caused these presents to be executed on its
behalf and its corporate seal to be affixed hereto by its duly authorized
representative, and Holder has hereunto set his or her hand, all on the day and
year first above written.

 

 

THOMAS GROUP, INC.

 

 

 

 

 

By:

/s/ David B. Mathis

 

 

 

ACKNOWLEDGMENT

 

Holder agrees to be bound by all the terms of this Award and the Plan.

 

 

 

  /s/ David English

 

 

David English

 

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