Exhibit 10.34

THOMAS GROUP, INC.

JAMES T. TAYLOR

SECOND AMENDED EMPLOYMENT AGREEMENT

Dated January    , 2005

(Effective as of August 1, 2004)

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TABLE OF CONTENTS

|                                              |                                                         |                                        |    | Page
|--------------------------------------------- | ------------------------------------------------------- | -------------------------------------- | -- | ----
|1.                                            | Novation and Settlement of Rights                       |                                        | 1 
|                                              | 1.1                                                     | Novation                               |    | 1   
|                                              | 1.2                                                     | 1999 Incentive Plan                    |    | 1   
|2.                                            | Definitions                                             |                                        | 1 
|                                              | 2.1                                                     | Board of Directors                     |    | 1   
|                                              | 2.2                                                     | Cause                                  |    | 2   
|                                              | 2.3                                                     | Change in Control                      |    | 2   
|                                              | 2.4                                                     | Commercial Revenue                     |    | 3   
|                                              | 2.5                                                     | Common Stock                           |    | 3   
|                                              | 2.6                                                     | Disability                             |    | 3   
|                                              | 2.7                                                     | Exchange Act                           |    | 3   
|                                              | 2.8                                                     | Good Reason                            |    | 3   
|                                              | 2.9                                                     | Operating Profit                       |    | 3   
|                                              | 2.10                                                    | Term of Employment                     |    | 4   
|3.                                            | Employment                                              |                                        | 4 
|                                              | 3.1                                                     | Employment                             |    | 4   
|                                              | 3.2                                                     | Personal Services                      |    | 4   
|4.                                            | Compensation and Benefits During the Term of Employment |                                        | 4 
|                                              | 4.1                                                     | Base Compensation                      |    | 4   
|                                              | 4.2                                                     | Bonus for Prior Performance            |    | 4   
|                                              | 4.3                                                     | Incentive Compensation Arrangement     |    | 5   
|                                              | 4.4                                                     | Travel Costs                           |    | 5   
|                                              | 4.5                                                     | Automobile Expenses                    |    | 5   
|                                              | 4.6                                                     | Insurance; Benefit Plan Participation  |    | 5   
|                                              | 4.7                                                     | Stock Options                          |    | 6   
|                                              | 4.8                                                     | Stock Appreciation Rights              |    | 6   
|                                              | 4.9                                                     | Certain Tax Provisions                 |    | 6   
|5.                                            | Term of the Agreement                                   |                                        | 6 
|6.                                            | Termination; Disability; Death; Change in Control       |                                        | 6 
|                                              | 6.1                                                     | Basis                                  |    | 6   
|                                              | 6.2                                                     | Benefits Upon Termination              |    | 7   
|7.                                            | Restrictive Covenants; Work Product; Confidentiality    |                                        | 10
|                                              | 7.1                                                     | Restrictive Covenants                  |    | 10  
|                                              | 7.2                                                     | Right to Work Product; Confidentiality |    | 10  
|8.                                            | General Provisions                                      |                                        | 11
|                                              | 8.1                                                     | Notices                                |    | 11  
|                                              | 8.2                                                     | Entire Agreement                       |    | 12  
|                                              | 8.3                                                     | Governing Law and Venue                |    | 12  
|                                              | 8.4                                                     | Voluntary Agreement                    |    | 12  
|                                              | 8.5                                                     | Resolution of Certain Controversies    |    | 12  
|                                              | 8.6                                                     | Partial Invalidity                     |    | 12  
|                                              | 8.7                                                     | Reformation                            |    | 12  
|                                              | 8.8                                                     | Binding Effect                         |    | 12  
|                                              | 8.9                                                     | Amendments                             |    | 13  
|                                              | 8.10                                                    | Survival of Provisions                 |    | 13  
|                                              | 8.11                                                    | Approval                               |    | 13  
|Exhibit AJim Taylor Incentive Plan           |                                                         | 14                                    
|Exhibit BSeverance Compensation and Benefits |                                                         | 15                                    

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SECOND AMENDED EMPLOYMENT AGREEMENT

This
Second Amended Employment Agreement (this "Agreement") is entered into this    day of January, 2005 to be effective August 1, 2004, by and between Thomas Group. Inc.
("Thomas Group" or the "Company"), a Delaware corporation, and James T. Taylor ("Mr. Taylor") (the signatories to this Agreement shall be referred to jointly as the "Parties"), to amend, modify
and restate the terms and conditions of that certain First Amended Employment Agreement executed by and between Mr. Taylor and Thomas Group on or about December 21, 2002 (the "Employment
Agreement").

WHEREAS,
Mr. Taylor is presently serving as the President and Chief Executive Officer of Thomas Group, reporting to the Board of Directors, and is an integral part of its
management team who participates in the decision-making process relative to short and long-term planning and policy for Thomas Group; and

WHEREAS,
Thomas Group 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 amended employment agreement to retain the services of Mr. Taylor; and

WHEREAS,
the Parties entered into the Employment Agreement on or about December 21, 2002 and the Parties have decided to amend, modify and restate the Employment Agreement; and

WHEREAS,
Thomas Group wishes to assure itself of the continued and valuable services of Mr. Taylor, and Mr. Taylor is willing to remain employed by Thomas Group, upon the
terms and conditions set forth in this First Amended Employment Agreement.

NOW,
THEREFORE, in consideration of the premises and the obligations undertaken by the Parties herein and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Thomas Group and Mr. Taylor agree as follows:

1.Novation and Settlement of Rights.

1.1Novation. In exchange for the promises set forth herein, Mr. Taylor agrees that (a) except as otherwise
provided herein, this Agreement will replace any existing employment agreement between the Parties and, thereby, acts as a novation, (b) all Confidential Information (as defined herein) or Work
Product (as defined herein) developed by Mr. Taylor during past employment with Thomas Group and all goodwill developed with the Company's clients, customers and other business contacts by
Mr. Taylor during past employment with the Company is now the exclusive property of the Company, and (c) that all of the Confidential Information and specialized training received by
Mr. Taylor during past employment with Company will be used only for the benefit of Thomas Group as described above, whether previously so agreed or not. Mr. Taylor waives and releases
any claim or allegation that he should be able to use client and customer goodwill, specialized Company training, or Work Product, or Confidential Information, that was previously received or
developed by him while working for Thomas Group for the benefit of any competing person or entity.

1.21999 Incentive Plan. Without limiting the effect of the provisions of Section 1.1 above, it is specifically agreed
that Mr. Taylor shall not participate in (i) the Company 1999 Incentive Plan or (ii) other bonus, profit sharing or incentive plans of the Company not specifically provided for
herein.

2.Definitions. The defined terms used in this Agreement shall have the meanings ascribed to them in this Section 2.

2.1Board 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.

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2.2Cause. "Cause" shall mean that any of the following: (a) Mr. Taylor has engaged in any act of gross
misconduct that is injurious to Thomas Group or its business: (b) any act by Mr. Taylor of dishonesty, misconduct, fraud, misappropriation, embezzlement, theft, moral turpitude or the
like; (c) the refusal by Mr. Taylor to perform the duties or responsibilities properly assigned to him by the Company, or the dereliction of duty by Mr. Taylor; or (d) a
material breach of this Agreement by Mr. Taylor or a violation of any material provision of this Agreement by Mr. Taylor.

2.3Change in Control. A "Change in Control" shall occur if any of the following occurs:



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2.4Commercial Revenue. "Commercial Revenue" shall mean any revenue, as recognized under GAAP, from a source that is not part
of the United States Department of Defense.

2.5Common Stock. "Common Stock" shall mean the common stock of Thomas Group, par value $.01 per share.

2.6Disability. "Disability" shall mean the inability of Mr. Taylor to perform his material managerial duties and
responsibilities as contemplated under Section 3 during his employment with Thomas Group, with or without a reasonable accommodation, for a consecutive period of three (3) months or a
non-consecutive period of six (6) months within any twelve- (12) month period. The Company will comply with the requirements of the Americans with Disabilities Act with
respect to attempting to reach a reasonable accommodation. The existence of Disability and the date of commencement of Disability shall be determined in accordance with
Section 6.1(e).

2.7Exchange Act. The Securities Exchange Act of 1934, as amended.

2.8Good Reason. "Good Reason" shall mean Mr. Taylor's decision to terminate his employment under this Agreement if
Thomas Group or any successor commits any material breach of this Agreement, or diminishes Mr. Taylor's Base Salary (as defined herein) below $435,000, or diminishes Mr. Taylor's duties
and responsibilities below those of President and Chief Executive Officer, or at any time within one hundred and eighty (180) days following a Change of Control.

2.9Operating Profit. "Operating Profit" is determined by following formula:

As
defined by GAAP and audited annually by independent accountants:

Revenue
Less: Cost of Sales
Less: S, G&A expenses

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Excluding:
restructuring charges, foreign exchanges gains/losses, closing costs of non-US subsidiaries, cumulative translation adjustments, expenses related to termination benefits
agreements agreed to by Board prior to Mr. Taylor's employment as CEO (January 13, 2004) and any other nonrecurring or unusual income or expense to be mutually agreed upon between
Mr. Taylor and the compensation committee.

2.10Term of Employment. "Term of Employment" shall mean the period of time commencing on August 1, 2004 and
continuing until December 31, 2006;provided, however, that Mr. Taylor and Thomas Group can agree, in writing, to extend the Term of
Employment.

3.Employment.

3.1Employment. Thomas Group agrees to employ Mr. Taylor and Mr. Taylor accepts employment by Thomas Group as
President and Chief Executive Officer of Thomas Group for the Term of Employment on the terms and conditions and for the compensation set forth in this Agreement. Subject to the authority of the Board
of Directors, Mr. Taylor shall be responsible for the overall operations of Thomas Group in the ordinary course of its business with all such powers as may be reasonably incident to such
responsibilities as its President and Chief Executive Officer. Mr. Taylor shall devote his full time and effort to the discharge of his duties as Thomas Group's President and Chief Executive
Officer.

3.2Personal Services. All services to be provided by Mr. Taylor under this Agreement shall be performed by
Mr. Taylor personally. During the term of this Agreement, Mr. Taylor shall devote his entire business time, attention, energies, skills, learning and best efforts to the business
operations of the Company, and shall not (without the prior written consent of the Chairman of the Board of Directors) (i) undertake or accept any duties under which there is a conflict of
interest between Mr. Taylor's responsibilities towards the Company or Mr. Taylor's responsibilities to any customer of the Company, on the one hand, and any other interest, on the other
hand; or (ii) as a partner, officer, director, stockholder, employee or consultant of any entity, association, agency, organization or institution, engage in any other business or profession
which would necessitate the giving of any significant portion of his business time, attention, energies, skills, learning and best efforts to such activity.

4.Compensation and Benefits During the Term of Employment.

4.1Base Compensation. Mr. Taylor shall receive base compensation ("Base Salary") in the amount determined by the
Compensation Committee of the Board of Directors (the "Compensation Committee"). The amount of Mr. Taylor's Base Salary shall initially be at the annual rate of $435,000 beginning
August 1, 2004 and shall be reviewed annually by the Compensation Committee, no later than March 30 of each year. Thomas Group shall pay Base Salary to Mr. Taylor in equal monthly
installments. Mr. Taylor understands and agrees that he is an exempt employee as that term is applied for purposes of Federal or State wage and hour laws, and further understands that he shall
not be entitled to any compensatory time off or other compensation for overtime

4.2Bonus for Prior Performance. Pursuant to prior discussions Thomas Group shall pay Mr. Taylor a cash bonus in the
amount of $225,000 based on his performance prior performance as Chief Financial Officer and Chief Executive Officer, such bonus to be paid immediately.

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4.3Incentive Compensation Arrangement. Mr. Taylor shall be paid a cash incentive, calculated annually, based upon two
criteria as defined in this agreement; Commercial Revenue and Operating Profit. The starting point for the incentive calculation is 70% of Base Compensation, called the Target Incentive ("Target").
The two criteria represent the following percentages of the Target:

2004

2005*

2006*Commercial Revenue

70%

50%

0%Operating Profit

30%

50%

100%


The
incentive for each criteria begins at 20% of Target upon reaching a minimum annual threshold and is capped at 200% of Target upon reaching a maximum annual threshold. The annual thresholds and
their corresponding percentages of Target are:

|2004 Threshold |  | Commercial
Revenue |           | Operating
Profit |   | % of Target | 
|-------------- |  | ------------------ | --------- | ---------------- | - | ----------- | 
|Minimum        |  | $                  | 3,000,000 |                  | $ | 1,500,000   | 
|Target         |  | $                  | 4,000,000 |                  | $ | 1,700,000   | 
|Maximum        |  | $                  | 7,000,000 |                  | $ | 2,700,000   | 

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Attached
hereto asExhibit Ais a sample calculation of the Incentive Compensation.

The
computation of annual incentive compensation will be based upon the audited financial results of Thomas Group. Thomas Group shall pay the incentive compensation to Mr. Taylor
within fifteen (15) days following completion of an audit of Thomas Group's financial statements by the Company's certified public accountants, and no later than April 15 of each year.
Mr. Taylor must be on the Company's active payroll at the end of the year in question (December 31st ) in order to be eligible to receive an award for that
year.

4.4Travel Costs. Thomas Group shall reimburse Mr. Taylor for all reasonable travel costs incurred by
Mr. Taylor in connection with Thomas Group's business, together with all other reasonable business expenses of Mr. Taylor in performing his duties.

4.5Automobile Expenses. Thomas Group shall provide Mr. Taylor a monthly car allowance in the amount of $900, which
includes all costs including insurance. Such allowance shall be prorated for partial months.

4.6Insurance; Benefit Plan Participation. Mr. Taylor shall be entitled to participate in Thomas Group's 401(k) and
deferred compensation plans, subject to the terms and conditions of such plans. Thomas Group also shall provide medical, disability and life insurance coverage to Mr. Taylor on the terms and
conditions of each of the plans Thomas Group maintains. Thomas Group will purchase term insurance covering Mr. Taylor, payable to Mr. Taylor's designated beneficiaries (or to his estate)
in the case of death while in the employment of Thomas Group. Such term insurance will have a face value of $1 million, and Thomas Group will pay the annual premiums so long as
Mr. Taylor is employed by Thomas Group.

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4.7Stock Options. During his employment with the Company, Thomas Group has granted Mr. Taylor options to purchase
255,649 shares of Thomas Group Common Stock, as follows:

Grant Date

Plan

SharesMarch 1, 2001

1992 Stock Option Plan

30,000December 14, 2001

1992 Stock Option Plan

75,000April 16, 2002

1992 Stock Option Plan

36,554April 16, 2002

1992 Stock Option Plan

38,446November 11, 2002

1997 Stock Option Plan

75,649255,649


Mr. Taylor
shall be entitled to receive additional stock options as may be granted by the Company.

4.8Stock Appreciation Rights. During his employment with the Company, Thomas Group and Mr. Taylor entered into an
Appreciation Rights Agreement dated December 13, 2003, effective April 2, 2003 with respect to 99,351 shares of Common Stock of Thomas Group. Mr. Taylor shall be entitled to
receive additional Stock Appreciation Rights as may be granted by the Company.

4.9Certain Tax Provisions. Mr. Taylor acknowledges and agrees that all payments and benefits which are required by
applicable federal, state or local laws to be subject to withholding for income taxes, shall be so subject.

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; Disability; Death; Change in Control.

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



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6.2Benefits Upon Termination. Mr. Taylor shall receive the benefits described in this Section 6.2 that
corresponds with the manner of termination of Mr. Taylor's employment under Section 6.1.



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7.Restrictive Covenants; Work Product; Confidentiality.

7.1Restrictive Covenants.Without the prior written consent of Thomas Group, Mr. Taylor shall not:



7.2Right to Work Product; Confidentiality.



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8.General Provisions.

8.1Notices. All notices, requests, demands, or other communications with respect to this Agreement shall be in writing and
shall be personally delivered, sent via telecopy, 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):

|Taylor:       |  | James T. Taylor
5924 Beth Drive
Plano, Texas 75093                                                                       
|------------- |  | -------------------------------------------------------------------------------------------------------------------------
|Thomas Group: |  | Thomas Group, Inc.
5221 North O'Connor Boulevard
Suite 500
Irving, TX 75039
Attention: Chairman of the Board of Directors

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 sent via telecopy, (ii) on
the third day following the date mailed, or (iii) 24 hours after shipment by such courier service.

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8.2Entire 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 Mr. Taylor by Thomas Group, including the Employment Agreement, 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.

8.3Governing Law and Venue. The Parties acknowledge that the laws of the State of Texas will govern the interpretation,
validity and effect of this Agreement without regard to the place of execution or the place for performance thereof, it being stipulated by the Parties that Texas has a compelling state interest in
the subject matter of this Agreement and that Mr. Taylor has or will have regular contact with Texas in the performance of this Agreement. With respect to any dispute or claims arising out of
this Agreement or Mr. Taylor's employment relationship with the Company, the Parties agree that the state and federal courts situated in Dallas County, Texas, shall have personal jurisdiction
over the Company and Mr. Taylor to hear disputes concerning such claims, and that venue for any such disputes shall be exclusively in the state or federal courts in Dallas County, Texas.

8.4Voluntary Agreement. The Parties acknowledge that each has had an opportunity to consult with an attorney or other
counselor concerning the meaning, import, and legal significance of this Agreement, and each has read this Agreement, as signified by their respective signatures hereto, and each is voluntarily
executing the same after, if sought, advice of counsel for the purposes and consideration herein expressed.

8.5Resolution of Certain Controversies. In the event of a breach of this Agreement by Mr. Taylor, Thomas Group shall
be entitled to all appropriate equitable and legal relief, including, but not limited to: (a) injunction to enforce this Agreement or prevent conduct in violation of this Agreement;
(b) damages incurred by Thomas Group as a result of the breach; and (c) attorneys' fees and costs incurred by Thomas Group in enforcing the terms of this Agreement. Additionally, any
period or periods of breach of Section 7 of this Agreement shall not count toward the restrictive period, but shall instead be added to the restrictive period. In the event of any controversy
or claim arising out of or related to the provisions concerning the use and protection of Confidential Information or the restrictive covenants, Thomas Group shall be entitled to 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. Each party is responsible for its own attorneys' fees and costs of preparing for and presenting its case at the arbitration. However, Thomas Group shall pay the fee of the
American Arbitration Association, the arbitration panel's fee, and costs associated with the facilities for the arbitration, and the arbitration panel shall not apportion these costs.

8.6Partial Invalidity. In the event any court of competent jurisdiction holds any provision of this Agreement to be invalid,
the remaining provisions shall not be affected or invalidated and shall remain in full force and effect.

8.7Reformation. In the event any court of competent jurisdiction holds any restrictions in this Agreement to be unreasonable
and/or unenforceable as written, the court may reform the Agreement to make it enforceable, and the Agreement shall remain in full force and effect as reformed by the court.

8.8Binding Effect. This Agreement is for the sole and exclusive benefit of, and shall be binding upon Mr. Taylor, and
his legal representatives and Thomas Group and any subsidiaries, affiliated companies, successors or assigns of Thomas Group. This Agreement is not assignable by Mr. Taylor.

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8.9Amendments. Amendments to any Section of this Agreement shall not be effective unless agreed to in writing by the parties
to this Agreement. 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.

8.10Survival of Provisions. The covenants and obligations in Section 7 of this Agreement shall survive and continue
in effect following the termination of this Agreement.

8.11Approval. This Agreement shall not be effective until signed by Mr. Taylor and the Company and approved by both
the Chairman of the Board of Directors and the Chairman of the Compensation Committee.

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written to be effective August 1, 2004.

| |  | TAYLOR:                                
| |  | ---------------------------------------
| |  | James T. Taylor, individually          
| |  | THOMAS GROUP, INC.                     
| |  | By:                                    
| |  | Name: Jimmy C. Houlditch               
| |  | Title: Vice President                  
| |  | Approved by:                           
| |  | By:                                    
| |  | Name: General John T. Chain, Jr.       
| |  | Title: Chairman, Board of Directors    
| |  | By:                                    
| |  | Name: David B. Mathis                  
| |  | Title: Chairman, Compensation Committee

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EXHIBIT A

Jim Taylor Incentive PlanAssuming Base Compensation of $435,000From Dave Mathis 8/20/04 e-mail based on discussion with Chain/Taylor/Mathis

|2004                        
|----------------------------
|If Revenue is:              
|Not over $3.0m              
|Between $3.0m and $3,999,999
|Between $4.0m and $6,999,999
|Over $7.0m                  
|If Operating Profit is:     
|Not over $1.5m              
|Between $1.5m and $1,699,999
|Between $1.7m and $2,699,999
|Over $2.7m                  

*No incentive is earned below minimum threshold

|                                                                    |  | 2004
100%
Incentive |         | 2004
70%
Commercial revenue |   | 2004
30%
Operating Profit
|------------------------------------------------------------------- |  | ------------------- | ------- | --------------------------- | - | -------------------------
|Floor incentive is 20% of target if minimum threshold is reached*   |  | $                   | 60,900  |                             | $ | 42,630                   
|Target incentive is 70% of base salary of $435,000                  |  | $                   | 304,500 |                             | $ | 213,150                  
|Ceiling incentive is 200% of target if maximum threshold is reached |  | $                   | 609,000 |                             | $ | 426,300                  
|Thresholds:                                                         |  |                     |         |                             |   |                          
|Minimum                                                             |  |                     |         |                             | $ | 3,000,000                
|Target                                                              |  |                     |         |                             | $ | 4,000,000                
|Maximum                                                             |  |                     |         |                             | $ | 7,000,000                
|Incentive payout per dollar:                                        |  |                     |         |                             |   |                          
|Minimum                                                             |  |                     |         |                             | $ | 0.142                    
|Target                                                              |  |                     |         |                             | $ | 0.170520                 
|Maximum                                                             |  |                     |         |                             | $ | 0.071050                 

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EXHIBIT B    Severance Compensation and Benefits

[TerminationWithout Cause 6.2(a)]

[TerminationGood Reason 6.2(c)]

[TerminationDisability 6.2(e)]

1.     A
lump sum payment in cash, not later than twenty (20) days after the termination of Mr. Taylor's employment, in an amount equal to the total of
(a)1.5times Mr. Taylor's then-current base compensation, plus (b) eighteen (18) months of incentive
compensation at the target incentive compensation of50%of base compensation.

2.     The
unvested portion of any stock options granted to Mr. Taylor 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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