<PAGE>   1
                                                                   EXHIBIT 10.25


                              EMPLOYMENT AGREEMENT


       THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into effective as
of January 2, 1998, by and between Thomas Group, Inc., a Delaware corporation
(the "Company") and Philip R. Thomas, an individual residing in Dallas, Texas
("Mr. Thomas").

                                    RECITALS

WHEREAS, Mr. Thomas is currently the Chairman of the Board ("Chairman") and the
Chief Executive Officer of the Company and an integral part of its management
who participates in the decision-making process relative to short-and long-term
planning and policy for the Company; and

WHEREAS, the Company has determined that it would be in the best interests of
the Company and its stockholders to assure continuity in the management of the
Company's operations by entering into an employment agreement to retain the
services of Mr. Thomas; and

WHEREAS, the Company wishes to assure itself of the continued services of Mr.
Thomas for the period herein provided, and Mr. Thomas is willing to be employed
by the Company for such period, upon the terms and conditions set forth in this
Agreement.

NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and Mr. Thomas agree as follows:

1. Definitions. The defined terms used in this Agreement shall have the meanings
ascribed to them in this Section 1.

1.1 Affiliate. "Affiliate" shall mean any corporation over which Mr. Thomas or
the Company, as the case may be, can exercise effective management and control.

1.2 Board of Directors. "Board" or the "Board of Directors" shall mean the Board
of Directors of the Company or any committee of the Board empowered to act or
make decisions or determinations with respect to this Agreement.

1.3 Cause. "Cause" shall mean that as determined in good faith by the Board of
Directors, Mr. Thomas has engaged in any act of misconduct which is materially
injurious to the Company or its business.

1.4  Change in Control.  "Change in Control" shall mean:


                                       -1-
<PAGE>   2

(a) the acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) (a "Person" which, for purposes of this definition,
excludes Mr. Thomas or any of his Affiliates) of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of shares of
common stock or other securities of the Company resulting in the beneficial
ownership by such individual, entity or group of 40% or more of either (1) the
then-outstanding shares of common stock of the Company (the "Outstanding Company
Common Stock") or (2) the combined voting power of the then-outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); or

(b) if individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute more than 50% of the
members of the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds of the
directors then constituting the Incumbent Board, shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest subject to Rule 14a-11
of Regulation 14A promulgated under the Exchange Act or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board; or

(c) approval by the stockholders of the Company of a reorganization, merger or
consolidation unless following such reorganization, merger or consolidation (1)
more than 40% of, respectively, the then-outstanding shares of common stock of
the corporation resulting from such reorganization, merger or consolidation (the
"Outstanding Survivor Common Stock"), and the combined voting power of the
then-outstanding voting securities of such corporation entitled to vote
generally in the election of directors (the "Outstanding Survivor Voting
Securities"), is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their ownership
immediately prior to such reorganization, merger or consolidation, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be (for purposes of determining whether such percentage test is
satisfied, there shall be excluded from the number of shares of Outstanding
Survivor Common Stock and Outstanding Survivor Voting Securities owned by the
Company's stockholders, but not from the total number of shares of Outstanding
Survivor Common Stock and Outstanding Survivor Voting Securities, any shares or
voting securities received by any such stockholder in respect of any
consideration other than shares or voting securities of the Company), (2) no
Person (excluding the Company, any employee benefit plan (or related trust) of
the Company, any qualified employee benefit plan of such Surviving Corporation
and any Person beneficially owning, immediately prior to such reorganization,
merger or consolidation, directly or indirectly, 40% or more of the Outstanding
Company Common Stock or Outstanding Company Voting Securities, as the case may
be) beneficially owns, directly or indirectly, 40% or more of, respectively, the
shares of Outstanding Survivor Common Stock or Outstanding Survivor Voting
Securities, and (3) more than 50% of the members of the board of directors of
the Surviving Corporation were members of 


                                      -2-
<PAGE>   3

the Incumbent Board at the time of the execution of the initial agreement
providing for such reorganization, merger or consolidation; or

(d) (1) approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company or (2) the first to occur of (i) the sale or other
disposition (in one transaction or a series of related transactions) of all or
substantially all of the assets of the Company, or (ii) the approval by the
stockholders of the Company of any such sale or disposition, other than, in each
case, any such sale or disposition to a corporation with respect to which
immediately thereafter (x) more than 40% of, respectively, the shares of
Outstanding Survivor Common Stock and the Outstanding Survivor Voting Securities
is then beneficially owned, directly or indirectly, by all or substantially all
of the individuals and entities who were the beneficial owners, respectively, of
the Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such sale or other disposition in substantially the same
proportion as their ownership, immediately prior to such sale or other
disposition of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be (for purposes of determining whether such
percentage test is satisfied, there shall be excluded from the number of shares
of Outstanding Survivor Common Stock and Outstanding Survivor Voting Securities
owned by the Company's stockholders, but not from the total number of shares of
Outstanding Survivor Common Stock and Outstanding Survivor Voting Securities of
the surviving corporation, any shares or voting securities received by any such
stockholder in respect of any consideration other than shares or voting
securities of the Company), (y) no Person (excluding the Company and any
employee benefit plan (or related trust) of the Company, any qualified employee
benefit plan of such transferee corporation and any Person beneficially owning,
immediately prior to such sale or other disposition, directly or indirectly, 40%
or more of the Outstanding Company Common Stock or Outstanding Company Voting
Securities, as the case may be) beneficially owns, directly or indirectly, 40%
or more of, respectively, the shares of Outstanding Survivor Common Stock and
Outstanding Survivor Voting Securities and (z) more than 50% of the members of
the board of directors of the surviving corporation were members of the
Incumbent Board at the time of the execution of the initial agreement or action
of the board providing for such sale or other disposition of assets of the
Company.

1.5  Code.  "Code" shall mean the Internal Revenue Code of 1986, as amended.

1.6 Common Stock. "Common Stock" shall mean the common stock of the Company, par
value $.01 per share.

1.7 Disability. "Disability" shall mean the inability of Mr. Thomas to perform
his material managerial duties and responsibilities as contemplated under
Section 3 during the Term of Employment, as determined in accordance with
Section 6.1(e).

1.8 Good Reason. "Good Reason" shall mean Mr. Thomas' decision to terminate his
employment under this Agreement if the Company or any successor thereto commits
any material breach of this Agreement.


                                      -3-
<PAGE>   4

1.9 Term of Employment. "Term of Employment" shall mean the period of time
commencing on the effective date of this Agreement and continuing until December
31, 2005, unless terminated earlier pursuant to the terms hereof.

2. Termination of Prior Agreements. The Company and Mr. Thomas hereby
acknowledge and agree that this Agreement supersedes any prior agreements.

3. Employment. The Company employs Mr. Thomas and Mr. Thomas accepts employment
by the Company as Chairman and Chief Executive Officer for the Term of
Employment, on the terms and conditions and for the compensation hereinafter set
forth. Subject to the authority of the Board of Directors, and in his capacity
as Chief Executive Officer, Mr. Thomas shall have general management and control
of the business and affairs of the Company in the ordinary course of its
business, with all such powers with respect to such general management and
control as may be reasonably incident to his responsibilities as its Chief
Executive Officer. In his capacity as Chief Executive Officer, Mr. Thomas agrees
to devote substantially all of his time and efforts to the business of the
Company. Of his own accord or in concert with the Nominating, Corporate
Governance and Compensation Committee of the Board of Directors (the
"Committee"), Mr. Thomas may act solely in the capacity of Chairman (a
non-officer position). It is contemplated that Mr. Thomas would remain as
Chairman and Chief Executive Officer until December 31, 2000, at which time Mr.
Thomas would become Chairman. In his capacity as Chairman only, Mr. Thomas
agrees to devote one-half of his time and efforts to the business of the
Company.

4. Compensation and Benefits During the Term of Employment.

4.1 Base Compensation. In his capacity as Chairman and Chief Executive Officer,
Mr. Thomas shall receive base compensation in the amount of $600,000 annually.
In his capacity as Chairman only, Mr. Thomas shall receive base compensation in
the amount of $300,000 annually. Base compensation shall be reviewed annually by
the Committee and adjusted as appropriate. Base compensation shall be paid in
equal monthly installments by the Company to Mr. Thomas. No portion of base
compensation may be advanced to Mr. Thomas prior to the time otherwise payable.

4.2  Incentive Compensation Arrangement.

(a) In further consideration of Mr. Thomas' performance of services under
Section 3 hereof, the Company agrees to compensate Mr. Thomas under the
incentive compensation arrangement ("Incentive Compensation") set forth in
Section 4.2(b). Except as specifically provided herein, the computation of
annual incentive compensation will be based upon the audited financial results
of the Company.

(b) (1) General. Mr. Thomas' Incentive Compensation is equal to a percentage of
the dollar value derived from a formula sharing ratio of the Company's revenues.
In his capacity as Chairman and Chief Executive Officer, the percentage is 100%,
and in his capacity as Chairman only, the percentage is 50%. The sharing ratio
is based upon the Company's percentage increase in cumulative income before tax
and incentive compensation ("IBTIC") for the current fiscal year compared to the
Company's cumulative IBTIC for the prior fiscal year, and upon certain targeted



                                      -4-
<PAGE>   5

levels of the Company's IBTIC. For purposes of determining IBTIC, incentive
compensation includes the Incentive Compensation payable under this Agreement as
well as any incentive compensation paid under a plan which includes Company
officers.

(2) Incentive Compensation Calculation. The formula for determining incentive
compensation is as follows: Incentive Compensation equals the product of the
Company revenues for the applicable fiscal year multiplied by the income growth
sharing ratio expressed as a percentage ("IGSR") for the fiscal year. The ISGR
is determined with reference to the following table:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
                                                       SHARING RATIO (%)
                                                      IBTIC GROWTH RATE
--------------------------------------------------------------------------------------------------------
IBTIC AS % OF REVENUE                               STANDARD INCENTIVE
--------------------------------------------------------------------------------------------------------
<S>                         <C>            <C>              <C>              <C>               <C>      
                           <5%             5-9.99%          10-14.99%        15-24.99%         25-29.99%
--------------------------------------------------------------------------------------------------------
    4.0 - 8.99%            0.0              0.0               0.0              0.2               0.3
--------------------------------------------------------------------------------------------------------
   9.00 - 14.99%           0.3              0.4               0.5              0.6               0.7
--------------------------------------------------------------------------------------------------------
  15.00 - 19.25%           0.5              0.6               0.8              1.0               1.2
--------------------------------------------------------------------------------------------------------
    Over 19.25%            0.8              1.0               1.3              1.6               1.8
--------------------------------------------------------------------------------------------------------
</TABLE>

(3) Partial Fiscal Years. The computations set forth in Section 4.2(b)(2) above
shall be adjusted to take into account eligibility for partial fiscal years by
computing them based upon the entire fiscal year and multiplying these results
by the ratio of the number of days of such partial fiscal year to the number of
days in the complete fiscal year.

(4) Payments. The Company shall pay the Incentive Compensation to Mr. Thomas
within five business days after completion of the fiscal year-end audit of the
Company's financial statements by the Company's certified public accountants. No
portion of incentive compensation may be advanced to Mr. Thomas prior to the
time otherwise payable.

4.3 Travel Costs and Business Expenses. The Company shall reimburse Mr. Thomas
for all reasonable travel costs and other business expenses incurred by Mr.
Thomas in connection with the Company's business and the performance of Mr.
Thomas' duties under this Agreement, in keeping with past practice.

4.4 Automobile Expenses. The Company shall provide an annual automobile
allowance of $23,400 to Mr. Thomas.

4.5 Memberships. During his tenure as Chief Executive Officer, the Company shall
provide the following existing club memberships for Mr. Thomas: Petroleum Club,
Las Colinas Country Club, Park Cities Club.


                                      -5-
<PAGE>   6

4.6 Office Services. The Company shall provide administrative assistance and
secretarial services to Mr. Thomas consistent with past practices in the form of
two executive assistants. Additionally, the Company shall provide office
accommodations, at the Company's expense, in Dallas/Irving, Texas, and Ethel,
Louisiana.

4.7  Option Grants.

(a) Grant A. Concurrently with the effective date of this Agreement, the Company
has granted Mr. Thomas options to purchase 375,000 shares of Common Stock at an
exercise price of $12.125 per share ("Grant A"). Vesting of Grant A options
occurs as follows:

For fiscal 1998, the Company must achieve earnings per share ("EPS") of at least
$1.30 *, and for fiscal 1999 and 2000, the Company must achieve at least a 15%
compounded annual growth rate in EPS relative to the milestone of $1.30 * for
fiscal 1998. Following is an illustration of the time and EPS hurdles, for
vesting of Grant A.

GRANT A:  375,000 options, @ $12.125 per share, effective January 2, 1998.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
             VESTING OF 125,000 OPTIONS OCCURS UPON MEETING BOTH HURDLES:
----------------------------------------------------------------------------------------
                  TIME HURDLE                                FULL YEAR 1998 EPS HURDLE
----------------------------------------------------------------------------------------
<S>                                                                   <C>    
               December 31, 1998                                      $1.30 *
----------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
             VESTING OF 125,000 OPTIONS OCCURS UPON MEETING BOTH HURDLES:
----------------------------------------------------------------------------------------
                  TIME HURDLE                                FULL YEAR 1999 EPS HURDLE
----------------------------------------------------------------------------------------
<S>                                                                   <C>    
               December 31, 1999                                       $1.49
----------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
                  VESTING OF 125,000 OPTIONS OCCURS UPON MEETING BOTH HURDLES:
----------------------------------------------------------------------------------------
                  TIME HURDLE                                FULL YEAR 2000 EPS HURDLE
----------------------------------------------------------------------------------------
<S>                                                                   <C>    
               December 31, 2000                                       $1.71
----------------------------------------------------------------------------------------
</TABLE>

                   * [The $1.30 EPS figure has been estimated, based upon (1)
the fiscal 1998 impact of the $2,314,000 write-off of capitalized software
development costs and related goodwill in 4th quarter 1997, and (2) estimates of
shares outstanding during each of the quarters of fiscal 1998. The EPS figure
will change, to "revised plan EPS," in which event the subsequent EPS hurdles
will also change (once only), to reflect the 15% compounded annual growth rate
in EPS relative to the milestone for fiscal 1998. To calculate "revised plan
EPS," reference will be made to (a) quarterly net income in the Company's 1998
plan, as adjusted for item (1) above, as well as (b) the actual share count (per
FASB 128) for each quarter in fiscal 1998 as reported in the Company's SEC
filings.]



                                      -6-
<PAGE>   7

(b) Grants B through F. Mr. Thomas may also earn additional option grants in
subsequent years. The following describes the EPS hurdles for the grant of
Grants B through F, and the time and EPS hurdles for the vesting of Grants B
through F.

GRANT B: 125,000 options, @ then-current market price, granted upon completion
of the audit for fiscal year 2000 (no later than March 15, 2001).

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
          GRANT OF 125,000 OPTIONS OCCURS UPON MEETING ONE HURDLE:
----------------------------------------------------------------------------------------
                               FULL YEAR 2000 EPS HURDLE
----------------------------------------------------------------------------------------
<S>                                      <C>    
                                         $1.71
----------------------------------------------------------------------------------------
</TABLE>

         Grant B options vest as follows:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
             VESTING OF 125,000 OPTIONS OCCURS UPON MEETING BOTH HURDLES:
----------------------------------------------------------------------------------------
                  TIME HURDLE                                FULL YEAR 2001 EPS HURDLE
----------------------------------------------------------------------------------------
<S>                                                                   <C>    
               December 31, 2001                                       $1.96
----------------------------------------------------------------------------------------
</TABLE>

GRANT C: 125,000 options, @ then-current market price, granted upon completion
of the audit for fiscal year 2001 (no later than March 15, 2002).

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
          GRANT OF 125,000 OPTIONS OCCURS UPON MEETING ONE HURDLE:
----------------------------------------------------------------------------------------
                               FULL YEAR 2001 EPS HURDLE
----------------------------------------------------------------------------------------
<S>                                      <C>    
                                         $1.96
----------------------------------------------------------------------------------------
</TABLE>

         Grant C options vest as follows:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
             VESTING OF 125,000 OPTIONS OCCURS UPON MEETING BOTH HURDLES:
----------------------------------------------------------------------------------------
                  TIME HURDLE                                FULL YEAR 2002 EPS HURDLE
----------------------------------------------------------------------------------------
<S>                                                                   <C>    
               December 31, 2002                                       $2.25
----------------------------------------------------------------------------------------
</TABLE>

GRANT D: 125,000 options, @ then-current market price, granted upon completion
of the audit for fiscal year 2002 (no later than March 15, 2003).

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
          GRANT OF 125,000 OPTIONS OCCURS UPON MEETING ONE HURDLE:
----------------------------------------------------------------------------------------
                               FULL YEAR 2002 EPS HURDLE
----------------------------------------------------------------------------------------
<S>                                      <C>    
                                         $2.25
----------------------------------------------------------------------------------------
</TABLE>

         Grant D options vest as follows:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
             VESTING OF 125,000 OPTIONS OCCURS UPON MEETING BOTH HURDLES:
----------------------------------------------------------------------------------------
                  TIME HURDLE                                FULL YEAR 2003 EPS HURDLE
----------------------------------------------------------------------------------------
<S>                                                                   <C>    
               December 31, 2003                                       $2.58
----------------------------------------------------------------------------------------
</TABLE>



                                      -7-
<PAGE>   8

GRANT E: 125,000 options, @ then-current market price, granted upon completion
of the audit for fiscal year 2003 (no later than March 15, 2004).

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
          GRANT OF 125,000 OPTIONS OCCURS UPON MEETING ONE HURDLE:
----------------------------------------------------------------------------------------
                               FULL YEAR 2003 EPS HURDLE
----------------------------------------------------------------------------------------
<S>                                      <C>    
                                         $2.58
----------------------------------------------------------------------------------------
</TABLE>

         Grant E options vest as follows:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
             VESTING OF 125,000 OPTIONS OCCURS UPON MEETING BOTH HURDLES:
----------------------------------------------------------------------------------------
                  TIME HURDLE                                FULL YEAR 2004 EPS HURDLE
----------------------------------------------------------------------------------------
<S>                                                                   <C>    
               December 31, 2004                                       $2.96
----------------------------------------------------------------------------------------
</TABLE>

GRANT F: 125,000 options, @ then-current market price, granted upon completion
of the audit for fiscal year 2004 (no later than March 15, 2005).

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
          GRANT OF 125,000 OPTIONS OCCURS UPON MEETING ONE HURDLE:
----------------------------------------------------------------------------------------
                               FULL YEAR 2004 EPS HURDLE
----------------------------------------------------------------------------------------
<S>                                      <C>    
                                         $2.96
----------------------------------------------------------------------------------------
</TABLE>

         Grant F options vest as follows:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
             VESTING OF 125,000 OPTIONS OCCURS UPON MEETING BOTH HURDLES:
----------------------------------------------------------------------------------------
                  TIME HURDLE                                FULL YEAR 2005 EPS HURDLE
----------------------------------------------------------------------------------------
<S>                                                                   <C>    
               December 31, 2005                                       $3.40
----------------------------------------------------------------------------------------
</TABLE>

(c) Special Provisions. With respect to each of option grants A through F:

    o    Vesting occurs when both (a) the time hurdle is met and (b) the EPS
         hurdle (for the full year) is met or exceeded. The determination
         whether an EPS hurdle has been met, will be made upon completion of the
         audit for the relevant year.

    o    Options which have not vested in prior years, will vest upon
         achievement of the then-current hurdles for subsequent years. By way of
         example, if the 125,000 options which were to have vested upon (a)
         completion of the 1998 fiscal year and (b) the achievement of $1.30 EPS
         for fiscal year 1998, did not vest, then such options will vest if the
         then-current time and EPS hurdles are both met by the date on which the
         Company releases


                                      -8-
<PAGE>   9

         its earnings report for any of the fiscal years 1999 through 2005. In
         the foregoing example, if the 125,000 options which were to have vested
         upon the achievement of $1.30 EPS for fiscal year 1998, did not vest,
         then such options will vest if the $1.49 EPS hurdle is met for the full
         fiscal year 1999.

    o    In a similar manner, options which were not granted in prior years,
         will be granted upon achievement of the then-current hurdles for
         subsequent years. By way of example, if the 125,000 options which were
         to have been granted upon (a) completion of the 2000 fiscal year and
         (b) the achievement of $1.71 EPS for fiscal year 2000, were not
         granted, then such options will be granted if the time hurdle and EPS
         hurdle are both met by the date on which the Company releases its
         earnings report for any of the fiscal years 2001 through 2005. In the
         foregoing example, if the 125,000 options which were to have been
         granted upon (a) completion of the 2000 fiscal year and (b) the
         achievement of $1.71 EPS for fiscal year 2000, were not granted, then
         such options will be granted if the $1.96 EPS hurdle is met for the
         full fiscal year 2001. Such grant will vest immediately.

    o    Those options which have not vested as of the date on which the Company
         releases its earnings report for fiscal year 2005, are forfeited.

(d) Additional Discretionary Grants. In the discretion of the Board, the Company
may award additional options to Mr. Thomas for exceptional performance.

(e) Exercise Price. The exercise price of all options granted hereunder shall be
100% of the fair market value of the Common Stock on the date of grant,
determined as follows: the average of the high and low prices of the Common
Stock on the principal national securities exchange on which the Common Stock is
listed, or if not so listed, the average of the high and low prices of the
Common stock on such date on the Nasdaq National Market System, or if not so
quoted, the average of the bid and asked prices of the Common Stock on such date
in such other market in which shares of Common Stock are regularly quoted, or if
not so quoted, as established by the Board on such date.

(f) Window of Exercise. In the event Mr. Thomas' employment is terminated, by
either of Mr. Thomas or the Company, all stock options granted hereunder shall
remain exercisable for a period of three years following such termination.

4.8 401(k) Savings Plan and Insurance Benefit Plan Participation; No Other Bonus
Plan Participation. Mr. Thomas shall be entitled to participate in the Company's
401(k) savings plan, subject to the terms and conditions of such plans. The
Company also shall provide medical, disability and life insurance coverage to
Mr. Thomas on the terms and conditions of each of the plans the Company
maintains with respect thereto. Mr. Thomas shall not be entitled to participate
in any other bonus arrangement instituted from time to time by the Company,
unless approved in advance by the Board.

4.9 CEO Center Leases; Maintenance Equipment. The Company and Mr. Thomas are
parties to certain leases covering real property located in Ethel, Louisiana, on
which the CEO Center utilized by the Company is located. Such leases contemplate
that Mr. Thomas may purchase the leasehold 



                                      -9-
<PAGE>   10

improvements. The Company agrees to amend such leases, such that Mr. Thomas may
purchase the leasehold improvements at the lesser of book value or fair market
value, at the end of the lease term or in the event the Company no longer makes
use of the CEO Center for its business. Additionally, the Company agrees that
Mr. Thomas may purchase the vehicles and equipment used in maintenance of the
facility (such as trucks and mowers) at the lesser of book value or fair market
value, at the end of the real property lease term or in the event the Company no
longer makes use of the CEO Center for its business.

5. Term of the Agreement. The term of this Agreement, unless terminated sooner
pursuant to Section 6, shall be for the Term of Employment.

6.  Termination.

6.1 Basis. Mr. Thomas' employment under this Agreement may be terminated as
described in this Section 6.1. In the event that Mr. Thomas' employment is
terminated in accordance with this Section 6.1, Mr. Thomas shall be entitled to
receive the benefits described in Section 6.2 that correspond with the manner of
such termination.

(a) Termination Without Cause. The Company may terminate Mr. Thomas' employment
under this Agreement without Cause by written notice to Mr. Thomas to that
effect. Unless otherwise specified in the notice, such termination shall be
effective immediately.

(b) Termination For Cause. The Company may terminate the employment of Mr.
Thomas under this Agreement for Cause by written notice to Mr. Thomas to that
effect. Unless otherwise specified in the notice, such termination shall be
effective immediately. Additionally, if Company revenues and EPS do not exceed
the thresholds set forth in the following table for each of three consecutive
fiscal years, then the employment of Mr. Thomas under this Agreement shall be
terminated.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
YEAR             1998        1999       2000        2001        2002       2003        2004        2005
------------------------------------------------------------------------------------------------------------
<S>              <C>         <C>        <C>         <C>         <C>        <C>         <C>         <C>  
FULL YEAR EPS
HURDLE           $1.30 *     $1.49      $1.71       $1.96       $2.25      $2.58       $2.96       $3.40
------------------------------------------------------------------------------------------------------------
FULL YEAR
REVENUES
HURDLE (IN       
$MILLION)        $91.1       $104.8     $120.5      $138.6      $159.4     $183.4      $210.9      $242.5
------------------------------------------------------------------------------------------------------------
</TABLE>

     Note: for purposes of the foregoing table, the EPS and revenues hurdles for
     fiscal years 1999 through 2005 reflect a compound growth rate of 15% per
     year.


                                      -10-
<PAGE>   11

         * [The $1.30 EPS figure has been estimated, based upon (1) the fiscal
1998 impact of the $2,314,000 write-off of capitalized software development
costs and related goodwill in 4th quarter 1997, and (2) estimates of shares
outstanding during each of the quarters of fiscal 1998. The EPS figure will
change, to "revised plan EPS," in which event the subsequent EPS hurdles will
also change (once only), to reflect the 15% compounded annual growth rate in EPS
relative to the milestone for fiscal 1998. To calculate "revised plan EPS,"
reference will be made to (a) quarterly net income in the Company's 1998 plan,
as adjusted for item (1) above, as well as (b) the actual share count (per FASB
128) for each quarter in fiscal 1998 as reported in the Company's SEC filings.]

(c) Good Reason. Upon the occurrence of an event constituting Good Reason as
described in Section 1.10 hereof, Mr. Thomas may terminate his employment under
this Agreement for Good Reason within 30 days thereafter upon written notice to
the Company to that effect. If the effect of the occurrence of the event may be
cured, the Company shall have the opportunity to cure any such effect for a
period of 30 days following receipt of Mr. Thomas' termination notice. The right
of Mr. Thomas to terminate his employment for Good Reason shall not limit the
Company's ability to terminate Mr. Thomas for Cause, if Cause is determined to
exist prior to the time Mr.
Thomas delivers his written notice of termination to the Company.

(d) Without Good Reason. Mr. Thomas may voluntarily terminate his employment
under this Agreement without Good Reason, upon written notice to the Company to
that effect.

(e) Disability. Mr. Thomas or the Company may terminate Mr. Thomas' employment
by reason of Disability upon written notice to the other party to that effect.
If the parties are unable to agree as to the existence of Disability or as to
the date of commencement of Disability, each of Mr. Thomas and the Company shall
select a physician licensed to practice medicine in the United States and the
determination as to any such question shall be made by such physicians;
provided, however, that if such two physicians are unable to agree, they shall
mutually select a third physician licensed to practice medicine in the United
States and the determination as to any such question shall be made by a majority
of such physicians. Any determination made by physicians in accordance with the
provisions of the immediately foregoing sentence shall be final and binding on
the parties. Mr. Thomas agrees to submit to any and all reasonable medical
examinations or procedures and to execute and deliver any and all consents to
release of medical information and records or otherwise as shall be reasonably
required by any of the physicians selected in accordance with this Section
6.1(e). Unless otherwise specified in the notice, such termination shall be
effective immediately.

(f) Death. This Employment Agreement shall automatically terminate as of the
date of Mr. Thomas' death during the Term of Employment.

(g) Change in Control. If a Change in Control occurs during the Term of
Employment, the Company shall promptly give written notice to Mr. Thomas
thereof. Following a Change in Control, Mr. Thomas shall be required to continue
his employment under this Agreement for 90 days after the date of such Change in
Control, unless his employment is terminated sooner by the 



                                      -11-
<PAGE>   12

Company prior to the expiration of the applicable notice period. In the event
that Mr. Thomas decides to resign or otherwise voluntarily terminate his
employment following the occurrence of a Change in Control, Mr. Thomas may do so
by giving written notice to the Company to that effect on or before 180 days
after the occurrence of the Change in Control, which notice shall be effective
on the later to occur of (i) 180 days after the occurrence of the Change in
Control or (ii) 90 days after the date of such notice. If Mr. Thomas does not
give such notice to the Company, this Agreement will remain in effect; provided,
however, that the failure of Mr. Thomas to terminate this Agreement following a
Change in Control shall not be deemed a waiver of Mr. Thomas' right to terminate
his employment upon a subsequent occurrence of a Change in Control in accordance
with the terms of this subsection.

6.2  Benefits Upon Termination.

(a) General. In the event Mr. Thomas' employment is terminated, by either of Mr.
Thomas or the Company (other than by death), Mr. Thomas shall be entitled to the
retirement benefits set forth on Exhibit I.

(b) Death. In the event Mr. Thomas' employment is terminated by reason of his
death, the Company shall make payment of premiums to continue the medical and
dental insurance coverage on Mr. Thomas' spouse as in effect at and as of the
date of Mr. Thomas' death for the remainder of his spouse's life; provided,
however, that nothing contained herein shall limit or diminish any rights of Mr.
Thomas' estate or any other person to payments under any health, disability,
pension or other benefit plan provided pursuant to Section 4.7, in each case in
accordance with the terms thereof. If Mr. Thomas' employment is terminated by
reason of his death, the benefits provided under this Section 6.2 shall be paid
to the beneficiary or beneficiaries designated in writing by Mr. Thomas;
however, if no such beneficiary designation is made by Mr. Thomas during his
lifetime, the benefits under this Agreement shall be paid to his estate. By
execution of this Agreement, Mr. Thomas hereby designates his spouse, Wayne
Thomas, as the beneficiary.

(c) Termination for Cause; Termination without Good Reason. In the event the
Company terminates the employment of Mr. Thomas under this Agreement for Cause
as provided in Section 6.1(b), or in the event Mr. Thomas terminates his
employment under this Agreement without Good Reason as provided in Section
6.1(d), then in either such event any unvested options held by Mr. Thomas do not
vest.

(d) Change in Control. In the event Mr. Thomas' employment is terminated as
provided in Section 6.1(g) following the occurrence of a Change in Control, in
addition to the retirement benefits set forth on Exhibit I, Mr. Thomas shall be
entitled to the following benefit:

A one-time cash payment calculated as 3.0 times Mr. Thomas' then-current full
year base salary, less $100.00.

Additionally, in the event of a Change in Control, then all unmatured stock
options outstanding shall thereupon automatically be accelerated, fully vested,
and exercisable in full, including that portion of any option that had not yet
become exercisable.


                                      -12-
<PAGE>   13

7.1 Non-Solicitation; Dispute Resolution.

(a) Definitions. The "Term of Prohibition" means the period beginning on the
date of this Agreement and continuing for a period of three years following the
termination of Mr. Thomas's employment with the Company for any reason
whatsoever. The term "Competing Business" means any business enterprise which
provides management consulting services to improve the cycle time of business
processes of any organization.

(b) Permitted Activities; Prohibited Activities.

    (1)  During the Term of Prohibition, Mr. Thomas will neither solicit nor
         employ any Company employee to engage in a Competing Business, nor
         solicit the business of any client of the Company or prospective client
         of the Company with respect to whom the Company has conducted an
         on-site macro-assessment.

    (2)  Subject to the limitations in Section 7.1(b)(1) immediately above, Mr.
         Thomas may undertake activities in connection with the use of Total
         Cycle TimeTM methodology, including speeches on the subject of Total
         Cycle Time, for a fee or otherwise. Mr. Thomas may also serve as a
         finder for the Company per the standard form of written agreement for
         finders (a sample of which is attached as Exhibit II), and may serve as
         a TGI Licensee to personally render time-based management consulting
         services per the standard form of written agreement for such licensees
         (a sample of which is attached as Exhibit III). In the event Mr. Thomas
         is to serve as a TGI Licensee, the references in the standard form of
         written agreement to "TCT(R) programs having a potential revenue stream
         greater than $500,000 per 12-month period" shall be amended to read
         "TCT(R) programs having a potential revenue stream greater than
         $1,000,000 per 12-month period."

    (3)  Notwithstanding the foregoing, in the event the Company terminates the
         employment of Mr. Thomas under this Agreement for Cause as provided in
         Section 6.1(b), or in the event Mr. Thomas terminates his employment
         under this Agreement without Good Reason as provided in Section 6.1(d),
         then in either such event and for a period of three years following
         such termination:

         o    Mr. Thomas is prohibited from undertaking activities in connection
              with the use of Total Cycle Time methodology, and

         o    Mr. Thomas is prohibited from serving as either a finder for the
              Company or as a TGI Licensee.

(c) Certain Acknowledgments. Mr. Thomas acknowledges that the scope of
prohibited activities and the time duration of the Term of Prohibition are
reasonable in nature and are no broader than are necessary to maintain the
confidentiality and the goodwill associated with the Company's clients and
services, to protect the Confidential Information, and to protect other
legitimate business interests of the Company.



                                      -13-
<PAGE>   14

(d) Resolution of Certain Controversies. In the event of any controversy or
claim arising out of or related to the provisions concerning the use and
protection of Confidential Information, the prohibitions of Section 7.1, or the
breach thereof, the parties agree that the Company may seek equitable and other
relief. In the event of any controversy or claim arising out of or related to
the other provisions of this Agreement, the parties agree first to try in good
faith to settle the dispute by non-binding mediation administered by the
American Arbitration Association under its Commercial Mediation Rules. In the
event that mediation does not resolve the dispute, such dispute shall be settled
exclusively by arbitration in accordance with the Commercial Arbitration Rules
of the American Arbitration Association in Dallas, Texas, and judgment may be
entered in any court having jurisdiction thereof.

7.2  Right to Work Product; Confidentiality.

(a) The Company and Mr. Thomas each acknowledge that performance of this
Agreement may result in the discovery, creation or development of inventions,
combinations, methods, formulae, techniques, processes, improvements, software
designs, computer programs, strategies, specific computer-related know-how,
course materials, seminar materials, computer models, customer lists, data and
original works of authorship (collectively, the "Work Product"). Mr. Thomas
agrees to promptly and fully disclose to the Company any and all Work Product
generated, conceived, reduced to practice or learned by Mr. Thomas, either
solely or jointly with others, during the Term of Employment, which in any way
relates to the business of the Company. Mr. Thomas further agrees that neither
Mr. Thomas, nor any party claiming through Mr. Thomas will, other than in the
performance of this Agreement, make use of or disclose to others any proprietary
information relating to the Work Product.

(b) Mr. Thomas agrees that, whether or not the services performed by Mr. Thomas
under this Agreement are considered works made for hire or an employment to
invent, all Work Product discovered, created or developed under this Agreement
shall be and remain the sole property of the Company and its assigns. Except as
specifically set forth in writing and signed by both the Company and Mr. Thomas,
Mr. Thomas agrees that the Company shall have all copyright and patent rights
with respect to any Work Product discovered, created, or developed under this
Agreement, without regard to the origin of the Work Product.

(c) If and to the extent that Mr. Thomas may, under applicable law, be entitled
to claim any ownership interest in the Work Product, Mr. Thomas hereby
transfers, grants, conveys, assigns and relinquishes exclusively to the Company
any and all right, title and interest he now has or may hereafter acquire in and
to the Work Product under patent, copyright, trade secret and trademark law, in
perpetuity or for the longest period otherwise permitted by law. Mr. Thomas
further agrees to assist the Company in every reasonable way to obtain and, from
time to time, enforce patents, copyrights, trade secrets and other rights and
protection relating to the Work Product, and to that end, Mr. Thomas will
execute all documents for use in applying for and obtaining such patents,
copyrights, trade secrets and other rights and protection with respect to such
Work Product as the Company may desire, together with any assignments thereof to
the Company or persons designated by it. Mr. Thomas' obligations to assist the
Company in obtaining and enforcing patents, 



                                      -14-
<PAGE>   15

copyrights, trade secrets and other rights and protection relating to the Work
Product shall continue beyond the Term of Employment.

(d) If and to the extent that any preexisting rights of Mr. Thomas are embodied
or reflected in the Work Product, Mr. Thomas hereby grants to the Company the
irrevocable, perpetual, non-exclusive, worldwide, royalty-free right and license
to (i) use, execute, reproduce, display, perform and distribute copies of and
prepare derivative works based upon such preexisting rights and any derivative
works thereof and (ii) authorize others to do any or all of the foregoing.

(e) Mr. Thomas acknowledges that certain of the material and information related
to the products, consulting techniques or other business affairs of the Company
and its affiliates, including the business affairs of the Company's customers
and clients which have or will come into Mr. Thomas' possession or knowledge in
connection with the performance of this Agreement, consists of confidential and
proprietary data of the Company, its Affiliates and clients (collectively,
"Confidential Information"), disclosure of which to, or use by, third parties
would be damaging to the Company or its clients. Mr. Thomas agrees to hold such
Confidential Information in strictest confidence and agrees not to release such
information to any person other than Company employees, and to Company employees
only if such employees (in the judgment of Mr. Thomas) have a need for such
knowledge. Mr. Thomas further agrees not to make use of Confidential Information
for Mr. Thomas' own benefit or for the benefit of any third parties, other than
for the performance of this Agreement, and not to release or disclose the
Confidential Information to any other party either during the term of this
Agreement or after the termination of this Agreement. In the event of any breach
of this confidentiality obligation, Mr. Thomas acknowledges that the Company
would have no adequate remedy at law, since the harm caused by such a breach
would not be easily measured and compensated for in the form of damages, and
hereby waives his right to contest any equitable relief sought by the Company,
other than Mr. Thomas' right to contest the question of whether a breach has
occurred.

8. General Provisions.

8.1 Notices. All notices, requests, demands, or other communications with
respect to this Agreement shall be in writing and shall be personally delivered,
telecopied, or mailed, postage prepaid, certified or registered mail, or
delivered by a nationally recognized express courier service, charges prepaid,
to the following addresses (or such other addresses as the parties may specify
from time to time in accordance with this Section):

Mr. Thomas:            3510 Turtle Creek Boulevard
                       Dallas, TX  75219

The Company:           Thomas Group, Inc.
                       5215 North O'Connor Boulevard
                       Suite 2500
                       Irving, TX  75039



                                      -15-
<PAGE>   16

Any such notice shall, when sent in accordance with the preceding sentence, be
deemed to have been given and received (i) on the day personally delivered or
telecopied, (ii) on the third day following the date mailed, or (iii) 24 hours
after shipment by such courier service.

8.2 Entire Agreement. This Agreement, together with Exhibit I hereto, supersedes
any and all other agreements, either oral or written between the parties hereto
with respect to the employment of Mr. Thomas by the Company and contains all of
the covenants and agreements between the parties with respect to such
employment.

8.3 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

8.4 Waiver of Breach. The waiver by either party of a breach of any provision of
this Agreement by the other party shall not operate or be construed as a waiver
of any subsequent breach.

8.5 Severability. The provisions of this Agreement are severable, and if any one
or more provisions may be determined to be judicially unenforceable and/or
invalid by a court of competent jurisdiction, in whole or in part, the remaining
provisions shall nevertheless be binding, enforceable and in full force and
effect.

8.6 Titles and Headings. The titles and headings of the various sections hereof
are intended solely for convenience of reference and not intended for any
purpose whatsoever to explain, modify or place any construction upon any of the
provisions of this Agreement.

8.7 Attorneys' Fees. In the event any of the parties hereto brings suit against
the other party hereto, based upon or arising out of a breach or violation of
this Agreement, or in the event of an arbitration hearing based upon or arising
out of a breach or violation of this Agreement, each party agrees that the party
who is successful on the merits, upon final adjudication from which no further
appeal can be taken or is taken within the time allowed by law, shall be
entitled to recover his or its reasonable attorneys' fees and expenses from the
other party.

8.8 Benefit and Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns;
provided, however, that nothing contained in this Section 8.8 shall impair Mr.
Thomas' rights under Section 6.2(d), if the successor or assign of the Company
became such upon the occurrence of a Change in Control. Notwithstanding anything
herein to the contrary, Mr. Thomas shall not assign any of his rights or
obligations under this Agreement.

8.9 Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be an original, and all of which shall together constitute
one agreement.

8.10 Reliance on Authority of Person Signing Agreement. The individual signing
this Agreement on behalf of the Company warrants that such execution has been
duly authorized by the Company. The execution and performance of this Agreement
by each party has been duly authorized by all applicable laws and regulations
and (in the case of the Company) all necessary corporate action, 



                                      -16-
<PAGE>   17

and this Agreement constitutes the valid and enforceable obligation of each
party in accordance with its terms.

8.11 Amendments. Amendments to any section of this Agreement shall not be
effective unless agreed to in writing by the parties hereto. This Agreement,
including this provision against oral modification, shall not be amended,
modified or terminated except in a writing signed by each of the parties to this
Agreement, and no waiver of any provision of this Agreement shall be effective
unless in a writing duly signed by the party sought to be bound.

9. Certain Tax Provisions. Mr. Thomas acknowledges and agrees that all payments
and benefits made or provided to Mr. Thomas pursuant to the terms hereof which
are required by applicable federal, state or local laws to be subject to
withholding for income taxes, shall be so subject.



                                      -17-
<PAGE>   18

IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement
effective as of the date first above written.

MR. THOMAS

/s/ Philip R. Thomas
-------------------------------
Philip R. Thomas, individually


THOMAS GROUP, INC.


By: /s/ Alexander W. Young
   -----------------------
Name:  Alexander W. Young
Title: President and Chief Operating Officer


On Behalf of the Committee:

/s/ General John T. Chain , Jr.
-------------------------------
General John T. Chain, Jr.



                                      -18-
<PAGE>   19

                      SUPERCEDED BY THE FOLLOWING ADDENDUM

                                    EXHIBIT I
                               RETIREMENT BENEFITS

For purposes of the following table, "FAE," or final average earnings, is
defined as the average of annual cash compensation (base salary and incentive
compensation) paid to Mr. Thomas over the period of January 1, 1998 to December
31, 2005; provided, that if Mr. Thomas' employment is terminated (1) as provided
in Section 6.1(g) following the occurrence of a Change in Control or (2) as
provided in Section 6.1(b), the calculation of FAE would be made only through
the year prior to the year in which the termination occurred (as an average for
those years during which Mr. Thomas was employed hereunder).

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
  IF MR. THOMAS' EMPLOYMENT ENDS        THE RETIREMENT BENEFIT TO WHICH MR. THOMAS WOULD BE
     DURING THIS TIME FRAME:                                   ENTITLED: *
------------------------------------------------------------------------------------------------
<S>                                     <C>
 January 2, 1998 through                  A lifetime nonqualified cash payment calculated
    December 31, 1998                     in the form of a single-life annuity equal to the 
                                              greater of (a) $600,000 or (b) incentive 
                                            compensation earned by Mr. Thomas premised 
                                           upon financial performance of the Company in 
                                                              fiscal 1997.
------------------------------------------------------------------------------------------------
 January 1, 1999 through                  A lifetime nonqualified cash payment calculated 
    December 31, 1999                    in the form of a single-life annuity equal to 60% 
                                                                 of FAE.
------------------------------------------------------------------------------------------------
 January 1, 2000 through                  A lifetime nonqualified cash payment calculated 
    December 31, 2000                    in the form of a single-life annuity equal to 60% 
                                                                 of FAE.
------------------------------------------------------------------------------------------------
 January 1, 2001 through                  A lifetime nonqualified cash payment calculated 
    December 31, 2001                    in the form of a single-life annuity equal to 60%
                                                                 of FAE.
------------------------------------------------------------------------------------------------
 January 1, 2002 through                  A lifetime nonqualified cash payment calculated 
    December 31, 2002                    in the form of a single-life annuity equal to 60%
                                                                 of FAE.
------------------------------------------------------------------------------------------------
 January 1, 2003 through                  A lifetime nonqualified cash payment calculated 
    December 31, 2003                    in the form of a single-life annuity equal to 60%
                                                                 of FAE.
------------------------------------------------------------------------------------------------
 January 1, 2004 through                  A lifetime nonqualified cash payment calculated 
    December 31, 2004                    in the form of a single-life annuity equal to 60% 
                                                                 of FAE.
------------------------------------------------------------------------------------------------
</TABLE>




                                      -19-
<PAGE>   20

<TABLE>
------------------------------------------------------------------------------------------------
<S>                                       <C>
 January 1, 2004 through                  A lifetime nonqualified cash payment calculated 
    December 31, 2005                    in the form of a single-life annuity equal to 60% 
                                                                 of FAE.
------------------------------------------------------------------------------------------------
</TABLE>

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

* Prior to commencement of the benefit for any time frame, Mr. Thomas may make
an election, to choose a different form of payment in order that his spouse may
continue to receive payments after his death. Should he make such an election,
the form of payment is called a "joint and survivor annuity," and the amount of
the payment would be actuarially reduced. BY EXECUTION OF THIS AGREEMENT, MR.
THOMAS HEREBY MAKES SUCH ELECTION.


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


Additionally, the Company shall either (a) make payment of premiums to continue
the Company-provided medical and dental insurance coverage on Mr. Thomas and his
spouse as in effect as of the date of retirement, for the remainder of Mr.
Thomas' and his spouse's life, or (b) purchase policies providing substantially
the same coverage, and for the same time frames.



                                      -20-
<PAGE>   21

                        ADDENDUM TO EMPLOYMENT AGREEMENT


1.   Section 1.3 is amended to add a parenthetical following the word
     "misconduct," such that the provision now reads as follows:

     ""Cause" shall mean that as determined in good faith by the Board of
     Directors, Mr. Thomas has engaged in any act of misconduct (for the time
     frame following January 2, 1998) which is materially injurious to the
     Company or its business."

2.   Section 4.7(f) has been deleted.

3.   The third sentence of Section 6.1(b) has been amended, such that the
     sentence now reads as follows:

     "Additionally, if Company revenues and EPS do not exceed the thresholds set
     forth in the following table for each of three consecutive fiscal years,
     then at the end of the third such year, the employment of Mr. Thomas under
     this Agreement shall be terminated."

4.   Section 6.2(a) has been amended in its entirety, to read as follows:

     "In the event Mr. Thomas' employment is terminated, Mr. Thomas shall be
     entitled to the termination benefits set forth on Exhibit I."

5.   Sections 6.2(c) and (d) have been deleted.

6.   Section 7.1(b)(2) has been amended to read as follows:

     "Following the termination of Mr. Thomas's employment with the Company, Mr.
     Thomas may do the following: (a) undertake activities in connection with
     the use of Total Cycle TimeTM methodology, including speeches on the
     subject of Total Cycle Time, for a fee or otherwise, and (b) serve as a
     finder for the Company per the standard form of written agreement for
     finders (a sample of which is attached as Exhibit II), and may serve as a
     TGI Licensee to personally render time-based management consulting services
     per the standard form of written agreement for such licensees (a sample of
     which is attached as Exhibit III). In the event Mr. Thomas is to serve as a
     TGI Licensee, the references in the standard form of written agreement to
     "TCT(R) programs having a potential revenue stream greater than $500,000
     per 12-month period" shall be amended to read "TCT(R) programs having a
     potential revenue stream greater than $1,000,000 per 12-month period. The
     provisions of this paragraph are subject to the limitations in Section
     7.1(b)(1) immediately above."

7.   Exhibit I to the Employment Agreement reads in its entirety as follows:



                                      -21-
<PAGE>   22

                                    EXHIBIT I
                              TERMINATION BENEFITS


                                    ARTICLE 1


If Mr. Thomas' employment with the Company is terminated, Mr. Thomas shall be
entitled to termination benefits in accordance with the following schedule:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
TERMINATION SCENARIO         BENEFIT          TIMING OF BENEFIT    TREATMENT OF OPTIONS
                                                   PAYMENTS               VESTING
-----------------------------------------------------------------------------------------
<S>                    <C>                   <C>                    <C>
                         A one-time cash                            All options granted
 Change in Control      payment calculated                             to date under
                       as 3.0 times annual                            Section 4.7 are
                        base compensation    On the first day of       automatically
                                             the month following    accelerated, fully
                               PLUS              the date Mr.           vested, and
                                              Thomas' employment    exercisable in full
                          A cash payment     with the Company is     for the remaining
                        calculated in the         terminated       term of such options
                       form of a joint and
                         survivor annuity
                        equal to $600,000
                          (the "$600,000
                           annuity" (1)
-----------------------------------------------------------------------------------------
</TABLE>


                                      -22-
<PAGE>   23

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
TERMINATION SCENARIO         BENEFIT          TIMING OF BENEFIT    TREATMENT OF OPTIONS
                                                   PAYMENTS               VESTING
-----------------------------------------------------------------------------------------
<S>                    <C>                   <C>                   <C>
                                                                    All options granted
     Disability          A one-time cash     On the first day of       to date under
                        payment calculated   the month following      Section 4.7 are
                       as 3.0 times annual       the date Mr.          automatically
                        base compensation     Thomas' employment    accelerated, fully
                                             with the Company is        vested, and
                                                  terminated        exercisable in full
                                                                     for the remaining
                                                                   term of such options
-----------------------------------------------------------------------------------------
                                                                    All options granted
        Death            A one-time cash     On the first day of       to date under
                        payment calculated   the month following      Section 4.7 are
                       as 3.0 times annual       the date Mr.          automatically
                        base compensation     Thomas' employment    accelerated, fully
                                             with the Company is        vested, and
                                                  terminated        exercisable in full
                                                                     for the remaining
                                                                   term of such options
-----------------------------------------------------------------------------------------
</TABLE>


                                      -23-
<PAGE>   24

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
TERMINATION SCENARIO         BENEFIT          TIMING OF BENEFIT    TREATMENT OF OPTIONS
                                                   PAYMENTS               VESTING
-----------------------------------------------------------------------------------------
<S>                     <C>                  <C>                   <C>
                                             On the first day of    All options granted
 By Mr. Thomas, with     A one-time cash     the month following       to date under
     Good Reason        payment calculated       the date Mr.         Section 4.7 are
                       as 3.0 times annual    Thomas' employment       automatically
                        base compensation    with the Company is    accelerated, fully
                                                  terminated            vested, and
                                                                    exercisable in full
                                                                     for the remaining
                                                                   term of such options
-----------------------------------------------------------------------------------------
                                             On the first day of    All options granted
   By the Company,       A one-time cash     the month following       to date under
    without Cause       payment calculated       the date Mr.         Section 4.7 are
                       as 3.0 times annual    Thomas' employment       automatically
                        base compensation    with the Company is    accelerated, fully
                                                  terminated            vested, and
                                                                    exercisable in full
                                                                     for the remaining
                                                                   term of such options
-----------------------------------------------------------------------------------------
</TABLE>



                                      -24-
<PAGE>   25

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
TERMINATION SCENARIO         BENEFIT          TIMING OF BENEFIT    TREATMENT OF OPTIONS
                                                   PAYMENTS               VESTING
-----------------------------------------------------------------------------------------
<S>                          <C>               <C>                <C>
                                                                    All options (which
   By Mr. Thomas,               0                    N/A             to date have been
 without Good Reason                                                granted and vested
                                                                    under Section 4.7)
                                                                            are
                                                                       automatically
                                                                    accelerated, fully
                                                                        vested, and
                                                                    exercisable in full
                                                                     for the remaining
                                                                   term of such options
-----------------------------------------------------------------------------------------
                                                                    All options (which
 By the Company, for            0                    N/A             to date have been
        Cause                                                       granted and vested
                                                                    under Section 4.7)
                                                                            are
                                                                       automatically
                                                                    accelerated, fully
                                                                        vested, and
                                                                    exercisable in full
                                                                     for the remaining
                                                                   term of such options
-----------------------------------------------------------------------------------------
</TABLE>


(1)  The $600,000 annuity payment obligation shall not be an obligation of the
     Company, and shall only be an obligation of any successor in the event of a
     Change in Control. Reference Article 3 of this Exhibit I. Unless otherwise
     elected by Mr. Thomas, the $600,000 annuity shall be distributed to Mr.
     Thomas and his wife in the form of a joint and survivor annuity for the
     life of Mr. Thomas and his wife. Any election to change the form of
     distribution must be in writing and received by a successor entity in the
     event of a Change in Control, on or prior to the date the $600,000 annuity
     payments commence.



                                      -25-
<PAGE>   26

                                    ARTICLE 2

                           MEDICAL AND DENTAL COVERAGE

If Mr. Thomas' employment with the Company is terminated, the Company shall, for
the remainder of Mr. Thomas' life and his wife's life, either (a) continue to
make payment of premiums to continue the Company-provided medical and dental
insurance coverage on Mr. Thomas and his wife as in effect as of the date of
termination, or (b) purchase policies providing substantially the same coverage
for Mr. Thomas and his wife as existed immediately prior to the date of
termination.


                                    ARTICLE 3

                                 BINDING EFFECT

The terms of this Exhibit I shall be binding upon and inure to the benefit of
and be enforceable by the Company and Mr. Thomas and their respective
successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
or assets of the Company, spouses, heirs, and personal and legal
representatives. The Company shall require and cause any successor (whether
direct or indirect by purchase, merger, consolidation or otherwise) to all,
substantially all, or a substantial part, of the business or assets of the
Company, by written agreement in form and substance satisfactory to Mr. Thomas,
expressly to assume and agree to perform the terms of this Exhibit I in the same
manner and to the same extent that the Company would be required to perform if
no such succession had taken place.



                                      -26-
<PAGE>   27

IN WITNESS WHEREOF, the parties hereto have executed this Addendum to Employment
Agreement this 31st day of March, 1998.

MR. THOMAS


/s/ Philip R. Thomas
------------------------------
Philip R. Thomas, individually


THOMAS GROUP, INC.


By: /s/ J. Thomas Williams
   ---------------------------
Name:  J. Thomas Williams
Title:  President and Chief Operating Officer


On Behalf of the Committee:


/s/ General John T. Chain, Jr.
------------------------------
General John T. Chain, Jr.






                                      -27-