<PAGE>   1
                                                                   EXHIBIT 10.23



                               THOMAS GROUP, INC.
                           DEFERRED COMPENSATION PLAN
                     RESTATED, EFFECTIVE NOVEMBER 1, 1996)


       Thomas Group, Inc., a Delaware corporation (the "Company"), hereby
amends and restates the Thomas Group, Inc. Deferred Compensation Plan (the
"Plan") effective as of November 1, 1996 (the "Effective Date"), such Plan
being originally effective as of November 18, 1993.  The Plan, as amended and
restated, shall apply to all Participants in the Plan as of the Effective Date,
and all Eligible Employees who become Participants after the Effective Date.
In addition, the Plan as amended and restated shall apply to all Deferred
Accounts of Participants as of the Effective Date, except with respect to a
Participant who declines to accept such amendment and restatement and who,
therefore, elects to terminate his participation in the Plan, in which event
the terms of the Plan as in effect prior to the Effective Date shall continue
to apply to such Participant's Deferred Account.

                                   ARTICLE I
                                    PURPOSE

       The purpose of the Plan is to provide deferred compensation and
retirement income to a select group of key management personnel and members of
the Senior Management Team and who contribute materially to the continued
growth, development and future business success of the Company and its
Subsidiaries, and to provide a benefits package which will assist the Company
in attracting, retaining and motivating employees and members of the Senior
Management Team.

       It is the intention of the Company that the Plan meet all of the
requirements necessary to qualify as a non-qualified, unfunded, unsecured plan
of deferred compensation for a select group of management or highly compensated
employees within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1),
and all Plan provisions shall be interpreted accordingly.

                                   ARTICLE II
                                  DEFINITIONS

       2.1    "Beneficiary" shall mean the person or persons entitled to
receive benefits which are payable upon or after a Participant's death pursuant
to the terms of this Plan.

       2.2    "BIT" shall mean the Thomas Group, Inc. business improvement team
as from time to time constituted.

       2.3    "Board" shall mean the board of directors of the Company as from
time to time constituted.

       2.4    "Change of Control" means any of the following:  (i) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the
Company's common stock would be converted into cash, securities or other
property, other than a merger of the Company in which the holders of the
Company's common stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation
immediately after the merger; (ii) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all or
substantially all of the assets of the Company; (iii) the stockholders of the
Company approve any plan or proposal for the liquidation or dissolution of the
Company; (iv) any person or group (as such term is used in Rule 13d-5 under the
Securities Exchange Act of 1934, as amended) shall become the beneficial owner
(within the meant of Rule 13d-3 under that Act) of 20% or more of the Company's
outstanding common stock; (v) individuals constituting the Board on the date
the Plan is adopted by the Board (or the successors of such individuals
nominated or elected to the Board by a vote of at least two-thirds of such
individuals or such successors so nominated or elected), cease for any reason
to constitute a
<PAGE>   2
majority of the directors; or (vi) in a Title 11 bankruptcy proceeding, the
appointment of a trustee or the conversion of a case involving the Company to a
case under Chapter 7.

       2.5    "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.  References to any section of the Internal Revenue Code
shall include any successor provision thereto.

       2.6    "Committee" shall mean the person or persons appointed by the
Board to serve as the Compensation and Stock Option Committee of the Board.

       2.7    "Company" shall mean Thomas Group, Inc.

       2.8    "Compensation" shall mean the Participant's base salary or wages
for services actually rendered in the course of employment by the Company and
any performance bonuses.

       2.9    "Deferred Account" shall mean the bookkeeping account established
and maintained by the Company to reflect the Participant's interest under this
Plan, as determined pursuant to Article IV of this Plan.

       2.10   "Deferred Compensation Agreement" shall mean the agreement, in
the form attached hereto as Exhibit A and made a part hereof, executed by the
Company and the Eligible Employee, pursuant to which, among other things, the
Eligible Employee elects to become a Participant in the Plan, and agrees to be
bound by the terms and conditions thereof.

       2.11   "Disabled" or "Disability" shall mean the inability of the
Participant to perform his duties for the Company in such a manner that he or
she qualifies for disability income payments under the Company's long-term
disability benefit plan.  If a Participant is not a participant in any
long-term disability benefit plan maintained by the Company, "Disabled" or
"Disability" shall mean the Participant is entitled to a disability retirement
benefit under the Federal Social Security Act, provided the Company has been
notified in writing of such entitlement.  The determination of whether or not a
Disability exists shall be determined by the Company, and shall be
substantiated by competent medical evidence.

       2.12   "Eligible Employee" shall mean those employees and members of the
Senior Management Team of the Company or any of its Subsidiaries who are
selected by the BIT to be eligible to participate in the Plan in accordance
with Section 3.1, and  who, because of their positions and responsibilities,
contribute materially to the continued growth, development and future business
success of the Company and its Subsidiaries.

       2.13   "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.  References to any section of ERISA shall
include any successor provision thereto.

       2.14   "Participant" shall mean an Eligible Employee who becomes a
participant in the Plan pursuant to Article III below and any former Eligible
Employee who is entitled to benefits under the Plan.

       2.15   "Plan" shall mean the Thomas Group, Inc. Deferred Compensation
Plan as set forth in this document, and as hereafter amended.

       2.16   "Plan Year" shall mean the twelve (12) consecutive month period
ending on December 31.

       2.17   "Retirement" shall mean termination of employment on or after the
first day of the month following the month in which occurs the Participant's
62nd birthday.

       2.18   "Senior Management Team" means those employees designated by the
Company as being members of such team.

       2.19   "Subsidiary" means any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain owns stock possessing fifty
<PAGE>   3
percent or more of the total combined voting power of all classes of stock in
one of the other corporations in the chain, and "Subsidiaries" means more than
one of any such corporations.

       2.20   "Termination of Employment" shall mean the termination of
employment with the Company and all Subsidiaries, whether voluntarily or
involuntarily, other than by reason of a Participant's Retirement, or after
becoming Disabled, or death.

       2.21   "Unforeseeable Emergency" shall mean a severe financial hardship
to the Participant resulting from a sudden and unexpected illness or accident
of a Participant or of a dependent (as defined in Code Section 152(a)) of the
Participant, loss of the Participant's property due to casualty, or other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant (but specifically not including
the need to send a child of the Participant to college or the desire to
purchase a home).

       2.22   "Valuation Date" shall mean each business day that the New York
Stock Exchange is open for business, and the last day of the Plan Year if not
such a business day.

       2.23   Whenever a noun, or a pronoun in lieu thereof, is used in this
Plan in plural form and there be only one person, thing or institution within
the scope of the word so used, or in singular form and there be more than one
person, thing or institution within the scope of the word so used, such word,
or the pronoun used in lieu thereof, shall have a plural or singular meaning,
as the case may be.  Pronouns of the masculine gender may mean the feminine and
vice versa.

       2.24   The words "herein," "hereof," and "hereunder" shall refer to the
Plan.


                                  ARTICLE III
                         ELIGIBILITY AND PARTICIPATION

       3.1    Eligibility.  The BIT shall, from time to time, select those
employees and members of the Senior Management Team of the Company who shall be
Eligible Employees.  Any Eligible Employee shall become a Participant in the
Plan by making an election and executing a Deferred Compensation Agreement as
set forth in Section 3.3 below.

       3.2    Cessation of Eligible Employee Status.  If any Participant does
not incur a Termination of Employment but ceases to be an Eligible Employee as
defined in Section 2.11 hereof, then, during the period that such Participant
is not an Eligible Employee as defined in such Section 2.11 hereof:  (i) such
Participant's deferred compensation elections under Section 3.3 hereof shall
cease, and (ii) such Participant's Deferred Account shall continue to be
adjusted as provided in Section 4.2 hereof.

       3.3    Election.     An Eligible Employee may elect, pursuant to a
Deferred Compensation Agreement entered into with the Company, to participate
in the Plan and to make an initial election to defer the receipt of a portion
of the Compensation otherwise payable to him or her by the Company.  The
Deferred Compensation Agreement must be signed by the Participant and delivered
to the Company at such time as required by the Committee.   For each Plan Year
other than the Plan Year during which he first becomes a Participant, a
Participant must elect prior to January 1 of such Plan Year (in accordance with
procedures and rules established by the Committee) to defer receipt of, and
contribute to his Deferred Account established under this Plan, a portion of
his Compensation pursuant to an election form, or such Participant will not be
allowed to make a deferral election until the next Plan Year.  With respect to
the first Plan Year he is eligible to participate, the Participant must execute
his Deferred Compensation Agreement and make his initial  election for the
remainder of such Plan Year within 30 days after he is notified he is eligible
to participate, or such Participant will not be allowed to make a deferral
election until the next Plan Year; provided that, if a Participant's first date
of eligibility is January 1, such Participant must make his first election
prior to such January 1.  All elections made under this Section 3.3 shall be
made in writing on an election form prescribed by and filed with the Committee
and shall be irrevocable for the Plan Year for which made.
<PAGE>   4
       The percentage rate of deferred compensation, if any, which each
Participant elects must be in whole percentage points or a specific dollar
amount and shall be made on an election form provided by and filed with the
Committee.  An initial election:  (i) shall be made in accordance with this
Section 3.3; (ii) shall be effective as soon as practicable after the executed
election form is delivered to the Committee; (iii) shall not have retroactive
effect and shall be irrevocable and remain in force for the balance of the Plan
Year in which the Participant's participation begins; and (iv) shall remain in
force for subsequent Plan Years unless revoked or changed.  The Committee shall
establish and communicate to Participants uniform and nondiscriminatory
procedures for the election of deferred compensation and may change said
procedures at such times and in such manner as the Committee may determine to
be necessary or desirable.

       Prior to the beginning of each Plan Year, a Participant shall make his
deferred compensation election with respect to that Plan Year by executing and
delivering to the Committee an election form prior to the beginning of such
Plan Year.  If a Participant fails to deliver a deferred compensation election
with the Committee  prior to the beginning of a Plan Year, such Participant
shall be treated as if he elected not to participate in the Plan for that Plan
Year.  A Participant may not change a deferred compensation election for a Plan
Year once that Plan Year has begun.  A Participant may discontinue a deferred
compensation election at any time during a Plan Year, provided that any such
discontinuance shall be effective on the first day of the payroll period (or
such other time as the Committee shall permit in accordance with uniform and
nondiscriminatory rules) beginning after the notice of the discontinuance is
received by the Committee.  A Participant who desires to discontinue a deferred
compensation election must notify the Committee thereof in writing on a form
specified by the Committee.  A Participant who has discontinued the deferred
compensation election may not resume a deferred compensation election until the
Plan Year following the Plan Year with respect to which the discontinuance
occurred.  Termination of Employment by a Participant or the cessation of
participation for any reason, including death, Disability or Retirement, shall
be deemed to revoke any election then in effect, effective immediately
following the close of the pay period in which such termination or cessation
occurs.

       Notwithstanding the foregoing provisions of this Article III, if the
Company desires to establish a trust for the payment of benefits under the Plan
as provided for in Article VI hereof, before the establishment of the trust and
as a condition to its establishment, each Participant must execute a written
waiver of any priority the Participant may have under state or federal law with
respect to any claims the Participant may have against the Company under the
Plan or under the trust beyond the rights the Participant would have as a
general creditor of the Company.  After the establishment of any such trust,
any Eligible Employee who qualifies for the Plan shall not be eligible to
become a Participant in the Plan unless and until such Employee executes the
written waiver provided for herein.

       3.4    Maximum Deferral.  The Committee reserves the right to  determine
a  maximum amount which the Participant may defer in a calendar year and
reserves the right to revise such maximum at any time, and from time to time,
in the Committee's sole discretion.

                                   ARTICLE IV
                       BENEFITS AND VALUATION OF ACCOUNTS

       4.1  Establishment of Deferred Account.  The Committee will establish
and maintain a Deferred Account for each Participant who has made a deferred
compensation election hereunder.  There shall be credited to a Participant's
Deferred Account as of each date Compensation is paid to the Participant, an
amount equal to the amount of Compensation deferred in accordance with the
Participant's election and Deferred Compensation Agreement.  The Committee
shall maintain, or cause to be maintained, records which will adequately
disclose at all times the state of each separate Deferred Account hereunder and
the state of any trust created pursuant to Article V hereof.  The books, forms
and methods of accounting shall be entirely subject to the supervision of the
Committee.

       4.2    Periodic Determination of Participant's Deferred Account.

              (a)    Allocations in General.  For the purpose of making
allocations as of any Valuation Date, any net earnings and adjustments in value
to the Deferred Accounts shall be allocated pursuant to Section 4.2(b) below,
and deferred compensation shall be credited pursuant to Section 4.1 hereof.
Whenever an allocation or credit
<PAGE>   5
is required to be made hereunder, it shall be made by the Committee, or at the
Committee's direction and subject to its supervision.

              (b)    Allocation of Net Earnings and Adjustments in Value of the
Deferred Accounts.  The net earnings or losses of the Deferred Accounts under
the Plan for a particular period shall be determined on the basis of the
earnings or losses of the funds maintained under this Plan since the previous
Valuation Date.   If Participants have been given the opportunity to direct the
manner in which the amounts credited to their Deferred Accounts shall be
invested under the Plan in accordance with Section 4.3 below, net earnings and
adjustments to value shall be allocated as of the Valuation Date to those
Deferred Accounts based on their individual performance.

              (c)    Computations.  All of the computations required to be made
under the provisions of this Article IV, when made, shall be conclusive with
respect thereto and shall be binding upon all the Participants, Beneficiaries,
and all other persons ever having an interest in any trust.

       Upon final determination of the Committee's calculations for a Plan
Year, if a trust has been established to fund the benefits hereunder, the
Company shall transfer to the Trustee the amount necessary to ensure that the
trust holds assets with a value equal to the Deferred Accounts, as so
calculated.

       4.3  Investment of Deferred Amounts.  In the event the Committee shall
determine to permit the Participants to direct the manner in which the amounts
credited to their Deferred Accounts shall be invested, then the provisions of
this Section 4.3 shall apply, and during employment with the Company, a
Participant may  direct the  investment of his Deferred Account in any
investment fund that may be established by the Committee.  Neither the
Participant nor Beneficiary shall have any right, title or interest whatever in
or to, or any claim, preferred or otherwise, in or to, any of the selected
investments.

       A Participant may change such Participant's direction concerning the
manner for investment of such Participant's Deferred Account, provided (i) that
a request for the change must be made in accordance with the forms and
procedures prescribed and adopted by the Committee, and (ii) the change shall
become effective in accordance with such procedures.

       In order to comply with applicable federal or state laws, including but
in no event limited to any federal or state income tax laws, the Committee may
establish such rules with respect to the change of investment designation by
Participants as it shall deem necessary or advisable to comply with any such
laws.

       4.4  In-Service Withdrawals.  Subject to the provisions of this Section,
upon application by a Participant, the Committee may, in accordance with the
provisions of this Section, permit such Participant to withdraw all or a
portion of such Participant's Deferred Account for an Unforeseeable Emergency;
provided however, that such withdrawal shall terminate such Participant's right
to defer additional amounts during the remainder of the Plan Year following
such withdrawal.

       The following provisions shall apply with respect to withdrawals for
Unforeseeable Emergencies:

              (a)    Application for withdrawal must be made in writing on a
form approved by the Committee, and must set out in detail the circumstances
establishing that the proposed withdrawal is for an Unforeseeable Emergency.

              (b)    The Committee's determination of whether the application
meets the requirements of this Section shall be final and conclusive, and in
making such determination, the Committee shall follow uniform and
nondiscriminatory rules.

              (c)    If the Committee is satisfied that the application meets
the requirements of this Section, the application shall be granted.

              (d)    For purposes hereof, an Unforeseeable Emergency shall not
exist if the hardship is or may be relieved as follows:
<PAGE>   6
              (i)    Through reimbursement or compensation by insurance or
otherwise;

              (ii)   By liquidation of the Participant's assets, to the extent
the liquidation of such assets would not itself cause severe financial
hardship; or

              (iii)  By cessation of deferred compensation elections hereunder.

              (e)    In no event will any payment on account of an
Unforeseeable Emergency exceed the amount required to meet such emergency plus
any amounts necessary to pay any federal, state or local taxes reasonably
anticipated to result from such payment.

              (f)    All withdrawals under this Section shall be subject to
Committee approval.  When an application for withdrawal is granted under the
provisions of this Subsection, the Committee shall give such written directions
to the Trustee as shall be appropriate to effectuate the distribution of the
amount withdrawn in accordance with the terms hereof.  The date of withdrawal
payment shall be specified by the Committee.  Withdrawals shall be paid in the
form of a single cash lump sum; provided, however, that withdrawals shall be
paid pro rata from any investment funds in which amounts may then be invested
under a trust, unless the Committee determines, in its sole discretion, that a
different allocation is appropriate.

       4.5    Time of Payment.  A Participant shall be entitled to receive the
entire amount in his Deferred Account upon the earliest to occur of the
following events:

              (i)    Retirement;

              (ii)   Disability;

              (iii)  Termination of Employment; or

              (iv)   Change of Control.

       4.6    Form of Payment.  A Participant's Deferred Account shall be paid
in one of the following forms, as selected by the Participant on his or her
Deferred Compensation Agreement, after the event which entitles the Participant
to payment in accordance with Section 4.5 above.  Until complete payment of a
terminated Participant's Deferred Account, the Participant's Deferred Account
shall continue to be credited with earnings in accordance with Section 4.2
above.  The available forms of payment are:

              (i)    one lump sum payment within ninety (90) days after the
event;

              (ii)   one lump sum payment within 60 days following the calendar
year in which the event occurs; or

              (iii)  equal annual installments for a period of up to ten (10)
years, commencing within ninety (90) days after the event


                                   ARTICLE V
                                 DEATH BENEFITS

       5.1    In the event of a Participant's death, his Beneficiary shall be
entitled to the amount credited to his Deferred Account determined as of the
Valuation Date on or immediately preceding the date of such Participant's
death, payment of which amount shall commence no later than sixty (60) days
following the date of such Participant's death.  Payment under this Article V
to the Beneficiary shall be in three (3) equal annual installments commencing
within sixty (60) days after the Participant's death or, in the sole discretion
of the Committee, in one
<PAGE>   7
lump sum payment.  The unpaid Deferred Account balance shall continue to be
credited with earnings in accordance with Section 4.2 above until complete
payment of the deceased Participant's Deferred Account.

       5.2    Notwithstanding Section 5.1, if the Beneficiary is a
Participant's estate, the Company may, in its sole and absolute discretion,
make a single lump sum payment to the estate in an amount equal to the balance
in such Participant's Deferred Account.


                                   ARTICLE VI
                         SOURCE OF PAYMENT OF BENEFITS

       The Plan is a non-qualified, unfunded, deferred compensation plan.
Therefore, all benefits owing under the Plan shall be paid out of the Company's
general corporate funds, which are subject to the claims of creditors, or out
of any trust the Board shall establish or authorize, provided that all assets
paid into any such trust shall at all times before actual payment to a
Participant or Beneficiary remain subject to the claims of general creditors of
the Company.  In the absence of action by the Board, nothing herein shall be
construed to create or require the creation of a trust for the purpose of
paying benefits owing under the Plan.  Although the Plan is to be deemed
totally unfunded, in addition to the discretionary authority to establish a
trust as provided for herein, the Company may, but shall not be obligated to,
purchase one or more life insurance or annuity policies or contracts for the
purpose of providing for its obligations hereunder.  Any such policies or
contracts, if so purchased, shall name the Company or the trust as beneficiary
and sole owner, with all incidents of ownership therein, including (but not
limited to) the right to cash and loan values, dividends (if any), death
benefits, and the right of termination.  Any such policies or contracts
purchased hereunder shall remain a general restricted asset of the Company or
of the trust.  Unless otherwise provided by the Company, no policy or contract
as provided for herein shall be deemed to be held in trust for the benefit of a
Participant or any Beneficiary.  Neither the Participant nor any Beneficiary
shall have any right, title or interest whatever in or to, or any claim,
preferred or otherwise, in or to, any particular assets of the Company as a
result of participation in the Plan, any policy or contract as provided for
herein, or any trust that the Company may establish to aid in providing the
payments described in the Plan.  Nothing contained in the Plan, and no action
taken pursuant to its provisions, shall create or be construed to create a
trust or a fiduciary relationship of any kind between the Company and a
Participant or any other person.  Neither a Participant nor a Beneficiary of a
Participant shall acquire any interest greater than that of an unsecured
creditor in any assets of the Company or in any trust that the Company may
establish for the purposes of paying benefits hereunder.

                                  ARTICLE VII
                          DESIGNATION OF BENEFICIARIES

       7.1    Designation or Change of Beneficiary by a Participant.  Each
Participant may from time to time designate the person(s) or entity(ies) to
whom the benefits provided for in Article V are to be paid.  A Participant may
from time to time change such Participant's designation of Beneficiary and upon
any such change, any previously designated Beneficiary's right to receive any
benefits under the Plan shall terminate.  In order to be effective, any
designation or change of designation of a Beneficiary must be made on a form
furnished by the Committee and signed by the Participant and received by the
Committee while the Participant is alive.  If a Beneficiary of a deceased
Participant shall survive the deceased Participant but die prior to the receipt
of all benefits payable to said Beneficiary under the Plan, then such benefits
as would have been payable to said deceased Beneficiary shall be paid to such
Beneficiary's estate at the same time and in the same manner as such benefits
would have been payable to said deceased Beneficiary.

       7.2    Beneficiary Designated By The Plan.  In the event that a
Participant shall die without having designated a Beneficiary, or in the event
that a Participant shall die having revoked an earlier Beneficiary designation
without having effectively designated another Beneficiary, or in the event that
a designated Beneficiary shall fail to survive such Participant, then and in
any such event, the Participant's estate shall be his Beneficiary.
<PAGE>   8
                                  ARTICLE VIII
                                 ADMINISTRATION

       8.1  The Committee.  Subject to the provisions of this Article VIII, the
Plan shall be administered by the Committee appointed by the Board.  The
Committee shall consist of not fewer than two persons.  Any member of the
Committee may be removed at any time, with or without cause, by resolution of
the Board.  Any vacancy occurring in the membership of the Committee may be
filled by appointment by the Board.  The Committee shall select one of its
members to act as its Chairman and shall make such rules and regulations for
its operation as it deems appropriate.  A majority of the Committee shall
constitute a quorum and the act of a majority of the members of the Committee
present at a meeting at which a quorum is present shall be the act of the
Committee.

       8.2  Powers and Duties of the Committee.  The Committee shall:  (i)
determine and designate from time to time the Eligible Employees; (ii)
interpret the Plan; (iii) prescribe, amend, and rescind any rules and
regulations necessary or appropriate for the administration of the Plan; (iv)
employ agents, attorneys, accountants or other persons (who also may be
employed by or represent the Company) for such purposes as the Committee
considers necessary or desirable in connection with its duties hereunder; and
(v) make such other determinations and take such other action as it deems
necessary or advisable.  Any interpretation, determination, or other action
made or taken by the Committee shall, subject to Section 8.6, be final,
binding, and conclusive on all interested parties.  To the extent powers
described above are not delegated to a Committee, the Board shall have the
powers described in this Section.  The Committee may, in its sole discretion,
impose limitations, restrictions and conditions on the Participants' rights to
receive benefits as set forth in the Participant's Deferred Compensation
Agreement.

       8.3    Nondiscriminatory Exercise Of Authority.  Whenever, in the
administration of the Plan, any discretionary action by the Committee is
required, the Committee shall exercise its authority in a nondiscriminatory
manner so that all persons similarly situated will receive substantially the
same treatment.

       8.4    Named Fiduciaries and Allocation of Responsibility.  ERISA
requires that certain persons, who are deemed to be "fiduciaries" as defined in
Section 3(21)(A) of ERISA, be designated as "Named Fiduciaries" in the Plan.
The Committee is hereby designated the Named Fiduciary.  The Named Fiduciary
shall have only the powers, duties and responsibilities specifically allocated
to such fiduciary pursuant to the terms of this Plan or delegated by the
Company and accepted in writing by the Committee.  The Named Fiduciary may, by
written instrument, allocate some or all of such Named Fiduciary's
responsibilities to another fiduciary or designate another person to carry out
some or all of such Named Fiduciary's fiduciary responsibilities.  The
Committee and each other fiduciary to whom responsibilities are allocated by
the Committee will be furnished a copy of the Plan and their acceptance of such
responsibility will be made by agreeing in writing to act in the capacity
designated.  No Named Fiduciary shall be liable for an act or omission of any
person (who is allocated a fiduciary responsibility or who is designated to
carry out such responsibility) in carrying out a fiduciary responsibility
except to the extent that the Named Fiduciary did not act in accordance with
the standard contained in Section 404(a) of ERISA with respect to the
allocation or designation, continuation thereof, or implementation or
establishment of the allocation or designation procedures.  Any person or group
of persons may serve in more than one fiduciary capacity with respect to the
Plan.

       8.5    Participant as Committee Member.  In the event the Committee
exercises any discretionary authority under the Plan with respect to a
Participant who is a member of the Committee, such discretionary authority
shall be exercised solely and exclusively by those members of the committee
other than the Participant.  In the event the remaining members of the
Committee cannot reach a majority conclusion or if such Participant is the sole
member of the Committee, the Board of the Company shall appoint a temporary
substitute Committee member to exercise all the powers of a qualified Committee
member concerning the matter in which such Participant cannot so act or for
which there is a deadlock.

       8.6    Review Procedures Under ERISA.

              (a)    Notification.  If any benefits under the Plan are wholly
or partially denied, the Committee will notify the Participant (or the
Participant's estate or representative) of its decision in writing.  Such
notification will be written in a manner calculated to be understood by the
Participant (or the Participant's estate or representative) and will contain
(i) specific reasons for the denial, (ii) specific reference to pertinent Plan
provisions, (iii) a description of any additional material or information
necessary for the Participant (or the Participant's estate or representative)
to provide an explanation of why such material or information is necessary, and
(iv) information as to the steps to be taken if the Participant (or the
Participant's estate or representative) wishes to submit a request for
<PAGE>   9
review.  Such notification will be given within ninety (90) days after the
request for benefits is received by the Committee (or within one hundred eighty
(180) days, if special circumstances require an extension of time for
processing the claim, and if written notice of such extension and circumstances
is given to the Participant (or the Participant's estate or representative)
within the initial ninety (90) day period).  If such notification is not given
within such period, the request for benefits will be considered denied as of
the last day of such period and the Participant (or the Participant's estate or
representative) may request review under paragraph (b) below.

              (b)    Review Procedure.  Within sixty (60) days after the date
on which the Participant (or the Participant's estate or representative)
receives a written notice of a denial of benefits (or, if applicable, within
sixty (60) days after the date on which such denial is considered to have
occurred), if the Participant (or the Participant's estate or representative)
disagrees with the denial of a request for benefits, the Participant (or the
Participant's estate or representative) shall (i) file a written request with
the Committee for a review of his denied request for benefits and of pertinent
documents, and (ii) submit written issues and comments to the Committee.  The
Committee will notify the Participant (or the Participant's estate or
representative) of its decision in writing.  Such notification will be written
in a manner calculated to be understood by the Participant (or the
Participant's estate or representative) and will contain specific reasons for
the decision as well as specific references to pertinent Plan provisions.  The
decision on review will be made within sixty (60) days after the request for
review is received by the Committee (or within one hundred twenty (120) days,
if special circumstances require an extension of time for processing the
request, such as the decision by the Committee to hold a hearing, and if
written notice of such extension and circumstances is given to the Participant
(or the Participant's estate or representative) within the initial sixty (60)
day period).  Any decision by the Committee shall be made by majority vote.
The Participant (or the Participant's estate or representative) and an
authorized representative (if so desired) are entitled to be present and heard
if any hearing is held as part of the review.  If the decision on review is not
made within such period, the request for benefits will be considered denied.
No legal action can be brought to recover benefits before the claims review
process has been exhausted.


                                   ARTICLE IX
                            MISCELLANEOUS PROVISIONS

       9.1  No Right to Continue in Employment.  The adoption and maintenance
of this Plan and the execution of any Deferred Compensation Agreement shall not
be deemed to constitute an employment contract between the Company or any of
its Subsidiaries and any Eligible Employee.  Nothing herein contained shall be
deemed (i) to give to any Eligible Employee the right to be retained in the
employ of the Company or any of its Subsidiaries; (ii) to affect the right of
the Company or any of its Subsidiaries to discipline or discharge any Eligible
Employee at any time; or (iii) to affect any Eligible Employee's right to
terminate his employment at any time.

       9.2  Indemnification of Board, BIT and Committee.  No member of the
Board, the BIT, or the Committee, nor any officer or employee of the Company
acting on behalf of the Board, the BIT, or the Committee, shall be personally
liable for any action, determination, or interpretation taken or made in good
faith with respect to the Plan, and all members of the Board, BIT or the
Committee and each officer or employee of the Company acting on their behalf
shall, to the extent permitted by law, be fully indemnified and protected by
the Company in respect to any such action, determination or interpretation.

       9.3  Amendment; Termination.  The Plan and any Deferred Compensation
Agreement may be altered or amended in whole or in part, at any time and from
time to time, by the Board, in its sole discretion, upon thirty (30) days'
prior written notice delivered to each Participant affected by any such action.
The Company reserves the right to terminate this Plan at any time.

       No amendment by the Company shall reduce the accrued benefits of a
Participant.

       If the Company terminates the Plan, the Company shall distribute to each
Participant, within 60 days after the effective date of termination, such
Participant's account, valued as of the date of termination.
<PAGE>   10
       9.4  Binding Effect.  This Plan shall be binding upon and inure to the
benefit of the Company, its successors and assigns, and the Participants, and
their heirs, assigns and personal representatives.

       9.5  Construction of Plan.  The captions used in this Plan are for the
convenience only and shall not be construed in interpreting the Plan.  Whenever
the context so requires in this Plan, the masculine shall include the feminine
and neuter, and the singular shall also include the plural, and conversely.

       9.6  Integrated Plan.  This Plan constitutes the final and complete
expression of agreement among the parties hereto with respect to the subject
matter hereof.

       9.7  Controlling Law.  This Plan shall be construed and enforced
according to the laws of the State of Texas to the extent not preempted by
Federal law, which shall otherwise control.

       9.8  Title To Assets.  No Participant shall have any right to, or
interest in, any assets of the Company upon termination of his or her
employment or otherwise, except as provided from time to time under this Plan.

       9.9  Expenses.  All costs and expenses with respect to the adoption,
implementation, interpretation and administration of the Plan shall be borne by
the Participants.

       9.10  Inalienability of Benefits.  The right of any Participant or
Beneficiary to any benefit or payment under the Plan shall not be subject to
alienation or assignment, and to the fullest extent permitted by law, shall not
be subject to attachment, execution, garnishment,  sequestration or other legal
or equitable process.  In the event a Participant or Beneficiary who is
receiving or is entitled to receive benefits under the Plan attempts to assign,
transfer or dispose of such right, or if an attempt is made to subject said
right to such process, such assignment, transfer or disposition shall be null
and void.

       9.11  Payment of Benefits.  Whenever any benefit which shall be payable
under the Deferred Compensation Agreement is to be paid to or for the benefit
of any person who is then a minor or determined to be incompetent by qualified
medical advice, the Company need not require the appointment of a guardian or
custodian, but shall be authorized to cause the same to be paid over to the
person having custody of such minor or incompetent, or to cause the same to be
paid to such minor or incompetent without the intervention of a guardian or
custodian, or to cause the same to be paid to a legal guardian or custodian of
such minor or incompetent if one has been appointed or to cause the same to be
used for the benefit of such minor or incompetent.

       IN WITNESS WHEREOF, Thomas Group, Inc. has caused this Plan to be
executed by its duly authorized representative this        day of
    , 1996.



                                           THOMAS GROUP, INC.


                                           By:
                                           Title:
<PAGE>   11
AGREED AND ACCEPTED BY PARTICIPANTS


       Each of the undersigned represents that: (i) he is a Participant in the
Plan as of September 30, 1996, (ii) he has received and reviewed a copy of the
foregoing  Restated Plan, (ii) he has had a reasonable opportunity to compare
his rights and benefits under this Restated Plan with his rights and benefits
under the Plan as in effect prior to November 1, 1996, and (iv) he agrees to
the amendment of his Deferred Compensation Agreement to conform to this
Restated Plan and the application of the provisions of this Restated Plan to
his Deferred Account as of November 1, 1996.


                     , 1996



                     , 1996



                     , 1996



                     , 1996



                     , 1996



                     , 1996



                     , 1996