<PAGE>   1
                                                                   EXHIBIT 10.21



                              EMPLOYMENT AGREEMENT


      This EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of July
15, 1997, by and between THOMAS GROUP, INC., a Delaware corporation ("Thomas
Group") and JAMES E. DYKES, an individual residing in Florida ("Employee").

                                    RECITALS

WHEREAS, Employee is the Executive Vice President Corporate Development of
Thomas Group and an integral part of its management who participates in the
decision-making process relative to short and long-term planning and policy for
Thomas Group; and

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

WHEREAS, Thomas Group wishes to assure itself of the continued services of
Employee for the period hereinafter provided, and Employee is willing to be
employed by Thomas Group for said period, upon the terms and conditions set
forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and the obligations undertaken
by the parties pursuant hereto and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Thomas Group and
Employee 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
Employee or Thomas Group, 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 Thomas Group 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, Employee has engaged in any act of gross misconduct
which is materially injurious to Thomas Group or its business.

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

              (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 Employee or any of his Affiliates) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 


<PAGE>   2

shares of common stock or other securities of Thomas Group 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 Thomas Group (the
"Outstanding Thomas Group Common Stock") or (2) the combined voting power of
the then-outstanding voting securities of Thomas Group entitled to vote
generally in the election of directors (the "Outstanding Thomas Group 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
fifty percent 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 Thomas Group'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 Thomas Group 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
Thomas Group Common Stock and Outstanding Thomas Group 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 Thomas Group Common
Stock and Outstanding Thomas Group 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 Thomas Group'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 Thomas Group), (2) no Person (excluding Thomas
Group, any employee benefit plan (or related trust) of Thomas Group, 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 Thomas
Group Common Stock or Outstanding Thomas Group 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 the
Outstanding Survivor Voting Securities, and (3) 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 providing
for such reorganization, merger or consolidation; or


                                     -2-


<PAGE>   3


              (d)    (1) approval by the stockholders of Thomas Group of a
complete liquidation or dissolution of Thomas Group 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 Thomas Group, or
(ii) the approval by the stockholders of Thomas Group 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 Thomas Group
Common Stock and Outstanding Thomas Group 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 Thomas Group Common Stock and Outstanding Thomas Group 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 Thomas Group'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 Thomas Group), (y) no Person (excluding Thomas Group and any
employee benefit plan (or related trust) of Thomas Group, 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 Thomas Group Common
Stock or Outstanding Thomas Group 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 the 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 Thomas Group.


      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
Thomas Group, par value $.01 per share.

      1.7     Disability.  "Disability" shall mean the inability of Employee 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      Term of Employment.  "Term of Employment" shall mean the period
of time commencing on the effective date of this Agreement and continuing until
the third anniversary date of this Agreement; provided, however, that Employee
and Thomas Group can agree, in writing, to extend the Term of Employment for an
additional five years, unless terminated earlier pursuant to the terms hereof.


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<PAGE>   4


      2.       Termination of Prior Agreements.  Thomas Group and Employee
hereby acknowledge and agree that this Agreement supersedes any prior
agreements.

      3.               Employment.  Thomas Group employs Employee and Employee
accepts employment by Thomas Group as Executive Vice President Corporate
Development of Thomas Group 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, Employee shall be responsible for
Corporate Development management of the business and affairs of Thomas Group in
the ordinary course of its business with all such powers with respect to such
Corporate Development management and control as may be reasonably incident to
such responsibilities as its Executive Vice President Corporate Development,
with all of the rights, powers and decision-making discretion appertaining
thereto.  Employee shall devote his full time and effort to the discharge of
his duties as Thomas Group's Executive Vice President Corporate Development.

      4.       Compensation and Benefits During the Term of Employment.

               4.1     Base Compensation.  Employee shall receive base
compensation ("Base Compensation") in the amount determined by the Compensation
and Stock Option Committee of the Board of Directors (the "Compensation
Committee").  The amount of Employee's Base Compensation shall initially be
$330,000.00 annually and shall be reviewed and adjusted as appropriate at least
annually by the Compensation Committee.  Base Compensation shall be paid in
equal monthly installments by Thomas Group to Employee.

               4.2     Incentive Compensation Arrangement.

                       (a)     In further consideration of Employee's
performance of services under Section 3 hereof, Thomas Group agrees to
compensate Employee 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 Thomas Group.

                       (b)     (1)         General.  Employee's Incentive
Compensation is initially based upon 16.5% (the "Entitled Percent") of the
dollar value derived from a formula sharing ratio of Thomas Group's revenues.
The sharing ratio is based upon Thomas Group's percentage increase in
cumulative income before tax and incentive compensation ("IBTIC") for the
current fiscal year compared to Thomas Group's cumulative IBTIC for the prior
fiscal year, and upon certain targeted levels of Thomas Group's IBTIC.  For
purposes of determining IBTIC, Incentive Compensation includes CEO Incentive
Compensation.  The Compensation Committee may review the percent stated above
from time to time and make appropriate changes.

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


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<PAGE>   5


                          INCOME GROWTH SHARING RATIO

<TABLE>
<CAPTION>
   Income Before Tax and
   Incentive Compensation           Less
     as a % of Revenues           than 5%*              5%-9.99%*   10%-14.99%*       15%-24.99%*    Over 25%*
   -----------------------        --------              ---------   -----------       -----------    ---------
      <S>                           <C>                   <C>          <C>               <C>           <C>
         0 - 8.99%                    0                     0            0                .2%           .3%
       9.00% - 14.99%                .3%                   .4%          .5%               .6%           .7%

      15.00% - 19.25%                .5%                   .6%          .8%              1.0%          1.2%
        Over 19.25%                  .8%                   1.0%        1.3%              1.6%          1.8%
</TABLE>

*IBTIC Growth Rate

ISGR is determined by first determining the IBTIC as a percent of revenue for
the current fiscal year and then entering the table along that line until the
appropriate IBTIC Growth Rate is reached; the ISGR is shown at that
intersection in the table.

For purposes of this table, IBTIC Growth Rate for each applicable fiscal year
is derived from the following formula:


                          IBTIC [Current Fiscal Year]
                          ---------------------------   minus 1 x 100
                          IBTIC [Prior Fiscal Year]


         In the event that either the IBTIC Growth Rate or the IBTIC, as
computed above, is zero or negative for a particular fiscal year, it shall be
treated as zero for purposes of the foregoing  computation for such year.

                               (3)         If Incentive Compensation, as
calculated in accordance with Section 4.2(b) hereof, exceeds 55 percent of Base
Compensation in a fiscal year, the excess of Incentive Compensation, as
calculated, over 55 percent of Base Compensation will not be paid to Employee
but will be used to calculate the award of a stock option to Employee.  The
number of shares to be awarded under such option is determined using the
following formula:


                         Excess Incentive Compensation
                  N =    -------------------------------
                                        P

Where:
N = Number of shares subject to such option
P = Market price of the Company's stock on the date of award
Excess Incentive Compensation = Excess of Incentive Compensation as calculated
minus 55 percent of base compensation in a fiscal year.





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<PAGE>   6



         Options granted hereunder shall be granted pursuant to the
Corporation's 1992 Stock Option Plan and shall be subject to all limitations of
such plan, including the aggregate number of options which may be granted.
Options granted pursuant to this Section 4.2(b)(3) shall contain an option
price equal to the market price (average of the day's high and low prices) on
the date of award, shall be fully vested, and shall expire 10 years following
date of grant.  This stock option award shall not preclude the Board of
Directors from granting additional options to Employee as it deems appropriate.
Options granted pursuant to this Agreement shall be administered by the
Compensation Committee.

                                  (4)      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.

                                  (5)   (i)     Payments.  Thomas Group
shall pay the Incentive Compensation  to Employee on or before the fifteen (15)
days after the completion of the audit of Thomas Group's financial statements
by Thomas Group's certified public accountants.

                                        (ii)    Eligibility Under Other Plans.
Employee's eligibility for bonuses or incentive compensation payments under
plans in effect prior to effectiveness of this Agreement shall terminate upon
the effectiveness of this Agreement.

                 4.3      Travel Costs.  Thomas Group shall reimburse Employee
for all travel costs incurred by Employee in connection with Thomas Group's
business, together with all other business expenses of Employee in performing
his duties hereunder, consistent with Thomas Group's past practices.

                 4.4      Automobile Expenses.  Thomas Group shall provide
automobile transportation to employee for Employee's use in connection with
Thomas Group's business, consistent with Thomas Group's past practices.

                 4.5      Pension and Insurance Benefit Plan Participation; No
Other Bonus Plan Participation.  Employee shall be entitled to participate in
Thomas Group's 401(k) plan, subject to the terms and conditions of such plans.
Thomas Group also shall provide medical, disability and life insurance coverage
to Employee on the terms and conditions of each of the plans Thomas Group
maintains with respect thereto.  In addition, Thomas Group shall continue to
pay premiums on all insurance policies on Employee's life which name either
Thomas Group or Thomas Group's creditors as beneficiary. Employee shall not be
entitled to participate in any other bonus arrangement instituted from time to
time by Thomas Group, unless approved in advance by the Board.

                 4.6      First Year Living Allowance.  Actual expenses, not to
exceed $100,000 will be paid by Thomas Group to Employee to live within a short
distance of the Las Colinas office.


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<PAGE>   7



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

          6.     Termination; Disability; Death, Change in Control.

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

                          (a)     Termination Without Cause.  Thomas Group may
terminate Employee's employment hereunder without Cause, as determined in the
good faith judgment of the Board of Directors, by written notice to Employee to
that effect.  Unless otherwise specified in the notice, such termination shall
be effective immediately.

                          (b)     Termination With Cause.  Thomas Group may
terminate the employment of Employee hereunder for Cause by written notice to
Employee to that effect.  Unless otherwise specified in the notice, such
termination shall be effective immediately.

                          (c)     Left Blank Intentionally

                          (d)     Without Good Reason.  Employee may
voluntarily terminate his employment hereunder without Good Reason upon 360
days written notice to Thomas Group to that effect.

                          (e)     Disability.  Employee or Thomas Group may
terminate Employee's employment by reason of Disability upon written notice to
the other party to that effect.  If the parties hereto are unable to agree as
to the existence of Disability or as to the date of commencement of Disability,
each of Employee and Thomas Group 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
hereto.  Employee 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 Employee's death during the Term of
Employment.

                          (g)     Change in Control.  If a Change in Control
occurs during the Term of Employment, Thomas Group shall promptly give written
notice to Employee thereof.  Following 



                                     -7-

<PAGE>   8


a Change in Control, Employee shall be employment is terminated sooner by Thomas
Group as set forth in Section 6.1(h). In the event that Employee decides to
resign or otherwise voluntarily terminate his employment following the
occurrence of a Change in Control, Employee may do so by giving written notice
to Thomas Group 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 Employee does not give such notice to Thomas Group,
this Agreement will remain in effect; provided, however, that the failure of
Employee to terminate this Agreement following the occurrence of a Change in
Control shall not be deemed a waiver of Employee's right to terminate his
employment upon a subsequent occurrence of a Change in Control in accordance
with the terms of this subsection.

                          (h)     Notwithstanding that Employee has given
notice of termination pursuant to subsections (d) or (g) of this Section 6.1,
Thomas Group may, in its sole discretion, thereafter require Employee to
terminate his employment prior to the expiration of the applicable notice
period.

                  6.2     Benefits Upon Termination.  Employee shall receive
the benefits described in the subsection below that corresponds with the manner
of termination of Employee's employment under Section 6.1.

                          (a)     Without Cause.  In the event Thomas Group
terminates Employee's employment hereunder without Cause during the Term of
Employment, Employee shall be entitled to the payments and benefits set forth
on Exhibit I.

                          (b)     With Cause.  In the event Employee's
employment is terminated with Cause, no further payments or benefits shall be
paid or provided by Thomas Group to Employee hereunder except for reimbursement
for expenses incurred prior to the date of termination, or the payment of
Incentive Compensation that has become due and payable to Employee on or before
the date of such termination under Section 4.2 hereof.  In addition, Employee
shall be entitled to exercise any vested but unexercised stock options for a
period of 90 days following the effective date of the termination of Employee
for Cause, and if any such options remain unexercised upon the expiration of
such 90-day period, they shall be determined forfeited by Employee and have no
further force and effect.

                          (c)     Good Reason.  In the event Employee
terminates his employment for Good Reason during the Term of Employment,
Employee shall be entitled to the payments and benefits set forth on Exhibit I.

                          (d)     Without Good Reason.  In the event Employee
terminates his employment without Good Reason pursuant to Section 6.1(d)
hereof, Employee shall be entitled to the benefits or payments provided for in
Section 6.2(b) hereof.


                                     -8-


<PAGE>   9



                          (e)     Disability.  In the event that Employee's
employment is terminated by reason of Disability, Employee shall be entitled to
the payments and benefits set forth on Exhibit I.

                          (f)     Death.  In the event Employee's employment is
terminated by reason of his death, Thomas Group shall not be required to make
any payments or provide any benefits hereunder, except for (a) reimbursement
for expenses incurred prior to such termination date, (b) payment of Incentive
Compensation through such termination date as provided in Section 4.2, (c) the
use by Thomas Group of its best efforts to remove any guaranties by Employee of
indebtedness of Thomas Group, and (d) payment of premiums to continue the
medical and dental insurance coverage on Employee's spouse as in effect at and
as of the date of Employee's death for the remainder of spouse's life, if
available; provided, however, that nothing contained herein shall limit or
diminish any rights of Employee's estate or any other person to payments under
any life insurance policy maintained by Thomas Group for the benefit of
Employee or his beneficiaries or any health, disability, pension or other
benefit plan provided pursuant to Section 4.7, in each case in accordance with
the terms thereof.  If Employee's employment is terminated by reason of his
death, the benefits provided under this Section 6.2(f) shall be paid to the
beneficiary or beneficiaries designated in writing by Employee and delivered
during Employee's lifetime to an officer of Thomas Group; however, if no such
beneficiary designation is made by Employee during his lifetime, the benefits
hereunder shall be paid to his estate.  In addition, Employee's estate shall be
entitled to exercise any vested but unexercised stock options for a period of
180 days following the date of Employee's death, and if any such options remain
unexercised upon the expiration of such 180-day period, they shall be
determined forfeited by Employee's estate and have no further force and effect.

                          (g)     Change in Control.  In the event Employee
terminates his employment as provided in Section 6.1(g) following the
occurrence of a Change in Control, Employee shall be entitled to the payments
and benefits provided in Exhibit I.

          7.     Non-Competition, Non-Solicitation, and Confidentiality
                 Covenants.

                 7.1      Non-competition Covenant.

                          (a)     In consideration for the execution of this
Agreement by Thomas Group and the payments for services to be rendered by
Employee hereunder, Employee agrees that during the Term of Employment and, in
the case of a termination Without Good Reason or for Cause, for a period of
three years after the date of such termination, Employee shall not engage in
competition with Thomas Group in any manner or capacity (e.g., as an advisor,
principal, agent, partner, officer, director, shareholder, employee, member of
any association or otherwise) that materially adversely affects Thomas Group,
including without limitation, rendering time based management counseling
services, soliciting customers of Thomas Group for any competitor of Thomas
Group, or soliciting any employee of Thomas Group to leave the employ of Thomas
Group to work for or on behalf of any competitor of Thomas Group (the
"Prohibited Activities").  Employee further agrees that, during the Term of
Employment, and, in the case of a termination 



                                     -9-

<PAGE>   10

Without Good Reason or for Cause, for a period of three years after the date of
such termination, Employee will not assist or encourage any other person in
carrying out any activity that would be one of the Prohibited Activities if such
activity were carried out by Employee and, in particular, Employee agrees that
he will not induce any employee of Thomas Group to carry out any such activity.

                          (b)     The obligations of Employee under this
Section 7.1 shall apply to any geographic area in which Thomas Group is
operating.  In addition to the exclusion from Prohibited Activities set forth
in Section 7.1(a) hereof, ownership by Employee, as a passive investment, of
less than 5% of the outstanding shares of capital stock of any corporation
listed on a national securities exchange or publicly traded in the
over-the-counter market shall not constitute a breach of this Section 7.1.

         7.2     Right to Work Product and Confidentiality.

                          (a)     Thomas Group and Employee 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").  Employee agrees that Employee will
promptly and fully disclose to Thomas Group any and all Work Product generated,
conceived, reduced to practice or learned by Employee, either solely or jointly
with others, during the Term of Employment, which in any way relates to the
business of Thomas Group.  Employee further agrees that neither Employee, nor
any party claiming through Employee 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)     Employee agrees that, whether or not the
services performed by Employee hereunder 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 Thomas Group and
its assigns.  Except as specifically set forth in writing and signed by both
Thomas Group and Employee, Employee agrees that Thomas Group 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 Employee may, under
applicable law, be entitled to claim any ownership interest in the Work
Product, Employee hereby transfers, grants, conveys, assigns and relinquishes
exclusively to Thomas Group any and all right, title and interest it 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.  Employee further agrees, as to the Work Product, to assist
Thomas Group in every reasonable way to obtain and, from time to time, enforce
patents, copyrights, trade secrets and other rights and protection relating to
said Work Product, and to that end, Employee 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 Thomas Group may
desire, together with any assignments 



                                     -10-


<PAGE>   11



thereof to Thomas Group or persons designated by it.  Employee's obligations to
assist Thomas Group in obtaining and enforcing patents, 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 Employee are embodied or reflected in the Work Product, Employee
hereby grants to Thomas Group 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)     Employee acknowledges that much, if not all,
of the material and information related to the products, consulting techniques,
or other business affairs of Thomas Group and its Affiliates, including,
without limitation, any and all Work Product discovered or created pursuant to
this Agreement, and the business affairs of Thomas Group's clients and
customers which have or will come into Employee's possession or knowledge in
connection with the performance of this Agreement, consists of confidential and
proprietary data of Thomas Group and its Affiliates (collectively,
"Confidential Information"), disclosure of which to, or use by, third parties
would be damaging to Thomas Group or its clients.  Employee agrees to hold such
Confidential Information in strictest confidence and agrees not to release such
information to any other Thomas Group employee unless such employee has a need
for such knowledge.  Employee further agrees not to make use of Confidential
Information for Employee's 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 or after the Term
of Employment.  In the event of any breach of this confidentiality obligation,
Employee acknowledges that Thomas Group 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 its right to contest
any equitable relief sought by Thomas Group, though not Employee's right to
contest the question of whether a breach has occurred, and Employee waives the
requirement of any bond being posted as security for such equitable relief.

          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
8.1):

                          Employee:        James E. Dykes
                                           5215 North O'Connor Boulevard
                                           Suite 2500
                                           Irving, TX  75039

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



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<PAGE>   12

         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 the
exhibits hereto, supersedes any and all other agreements, either oral or
written between the parties hereto with respect to the employment of Employee
by Thomas Group and contains all of the covenants and agreements between the
parties with respect to such employment.  Any modification of this Agreement
will be effective only if it is in writing signed by each of the parties
hereto.

                  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     Attorney's Fees.  In the event any one or more of the
parties hereto bring suit against any other part hereto, based upon or arising
out of a breach or violation of this Agreement, each party hereto agrees that
each 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 party or parties which is or are (as the case may be) not successful.

                  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 Employee's rights under Section 6.2(g), if the
successor or assign of Thomas Group became such upon the occurrence of a Change
in Control. Notwithstanding anything herein to the contrary, Employee shall not
assign any of his rights or obligations under this Agreement.


                                     -12-


<PAGE>   13


                  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.
Each individual signing this Agreement on behalf of a corporation warrants that
such execution has been duly authorized by the corporation for which he or she
is signing.  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
a corporation) all necessary corporate action, 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.

                  8.12    Waiver.  No waiver of any provision of this Agreement
shall be deemed to operate as waiver of any past or future right.

          9.      Renewal Discussions.  Unless Employee's employment hereunder
has been earlier terminated, the parties hereto agree that they will use their
reasonable best efforts to enter into discussions six months prior to the fifth
anniversary of the effective date of this Agreement with respect to whether and
on what terms Employee's employment after such date, and the terms thereof,
this Agreement shall automatically terminate on such fifth anniversary.

         10.      Certain Tax Provisions.  Employee acknowledges and agrees
that all payments and benefits made or provided to Employee 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.

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


                                              EMPLOYEE:

                                              
                                             
                                              ----------------------------------
                                              JAMES E. DYKES

                                              THOMAS GROUP, INC.

                                              By:
                                                 -------------------------------
                                              Name:   PHILIP R. THOMAS
                                              Title:  Chairman and Chief 
                                                      Executive Officer



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<PAGE>   14

                                                                                

                                   EXHIBIT I

                           SEVERANCE BENEFIT PAYMENTS

         1.      A lump sum payment in cash, not later than 20 days after the
termination of Employee's employment, in an amount equal to six (6) months at
Employee's average "Annualized Includible Compensation".  (Annualized
Includible Compensation is defined as the total cash paid in Base Compensation,
salary and Incentive compensation to James E. Dykes during the period
consisting of the preceding full taxable year, plus the year in which
termination occurred [on an annualized basis], all after date of this
Agreement).

         2.      The unvested portion of stock options granted to Employee
shall become fully vested and immediately exercisable on the effective date of
such termination and shall be exercisable for the maximum period specified in
such options.








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