Exhibit 10.2


 


PERFORMANCE SHARE AWARD

UNDER THE

2008 OMNIBUS STOCK AND INCENTIVE PLAN

for

THOMAS GROUP, INC.


 


Effective as of March 10,
2008 (“Date of Grant”), a PERFORMANCE
SHARE AWARD (“Award”)
is granted by Thomas Group, Inc. (the “Company”)
to Earle Steinberg (the “Holder”),
provided that this Award is in all respects subject to the terms and provisions
of the 2008 Omnibus Stock and Incentive Plan For Thomas Group, Inc. (the “2008 Plan”),
all of which are incorporated herein by reference, except to the extent
otherwise expressly provided in this Award. 
Capitalized terms used herein without definition shall have the
respective meanings specified in the 2008 Plan.


 


WITNESSETH


 


WHEREAS, the Company desires to grant to the
Holder an award which entitles the Holder to receive up to 380,000 Shares
subject to certain conditions described herein;


 


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


 


WHEREAS, the terms of the Award, including
without limitation the conditions imposed on delivery of the Performance
Shares, are set forth below;


 


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


 


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


 


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


 


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


 


“Annual
Profit” shall
mean the net income of the Company before interest expense, interest income,
gain (loss) on sale of equipment, gain (loss) on investment, gain on sale of
land, depreciation, amortization, taxes on income, extraordinary items, and the
expense attributable to the grant of the Award, all as determined by the
Accounting Firm using generally accepted accounting principles and as reflected
on the Company’s certified financial statements to the extent shown or
reflected on such financial statements. 
For this purpose, extraordinary items are those of a non-recurring and
unusual nature, or resulting from unforeseen and atypical events, as determined
by the Accounting Firm using generally accepted accounting principles and as
reflected on the Company’s certified financial statements as prepared by the
Accounting Firm to the extent shown or reflected on such financial statements.


 


“Cause” shall mean:


 


(1)           your
conviction or plea of guilty or nolo contendere to a crime that involves
dishonesty, disloyalty, moral turpitude, sexual harassment or discrimination,
provides for a term of imprisonment or constitutes a felony;


 


(2)           the
willful and intentional failure or willful and intentional refusal to follow
reasonable and lawful instructions of the Company’s Board of Directors;


 


(3)           a
material act or omission involving intentional misconduct, malfeasance or gross
negligence in performance of duties to the Company or involving neglect of
duties in a manner that is materially damaging to the Company or an affiliate
of the Company;


 





















 


(4)           a
material breach or default in the performance of the Holder’s obligations under
the Holder’s employment agreement with the Company;


 


(5)           a
serious violation of any of the Company’s policies to which officers of the
Company are subject; or


 


(6)           an
act of misappropriation, embezzlement, fraud or similar conduct, whether or not
involving the Company.


 


“Change in Control” shall mean the first date, if any, upon
which any of the following occurs:


 


(1)           any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) (a “Person”) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 50
percent or more of the combined voting power of the Company’s then outstanding
securities; provided, however,
that the term “Person” shall not include (A) the Company, (B) any employee
benefits plan of the Company, (C) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company and acting in such
capacity, (D) a subsidiary of a corporation owned, directly or indirectly,
by the Shareholders in substantially the same proportions as their ownership of
voting securities of the Company, or (E) General John T. Chain, Jr.
or Edward P. Evans; or


 


(2)           individuals who, as of
the Date of Grant, constitute the Board (the “Incumbent Board Members”) cease
for any reason during any 12-month period to constitute more than 50 percent of
the members of the Board and the election or appointment of the members of the
Board who are not Incumbent Board Members were not endorsed by a majority of
the Incumbent Board Members; provided,
however, that any individual becoming a director subsequent to the
date hereof whose election, nomination for election or appointment was approved
by a vote of at least two-thirds of the directors then constituting Incumbent
Board Members, shall be considered as though such individual were an Incumbent
Board Member; or


 


(3)           a sale or disposition
of all or substantially all of the Company’s assets to any other corporation or
other legal person occurs.


 


“Good Reason” means the occurrence of either
of the following circumstances without the Holder’s consent:


 


(1)           a
material reduction in the Holder’s base salary; or


 


(2)           a material diminution of the Holder’s
duties, authority or responsibilities as in effect immediately prior to such
diminution.


 


“Performance
Shares” shall mean the Shares to be delivered pursuant to this Award.


 


“Performance Target” shall
mean the level of Annual Profits necessary to entitle the Holder to delivery of
Performance Shares for the applicable year.


 


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


 


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


 


2.             Performance Share Award. 
The Company hereby issues to the Holder the right to receive an
aggregate of up to 380,000 Shares upon the terms and conditions set forth in
this Award.


 


3.             Performance Targets.  The Performance Target for Year 2008 shall be
established by the Committee and communicated to the Holder no later than May 7,
2008 based upon the Annual Profit goal for 2008 set forth in the Company’s
revised internal business plan for 2008 to be developed and approved by the
Board on or before such date.  The
Committee intends that the Performance Target for each of Years 2009, 2010 and
2011 shall be 


 

















 


established
by the Committee during the month of February of the applicable Year based
upon the Annual Profit goal for such Year set forth in the Company’s internal
business plan for such Year to be developed and approved by the Board; provided, that the Committee shall establish such Performance
Targets and communicate them to the Holder not later than March 30 of the
applicable year (and under circumstances that satisfy the requirements of both
Sections 162(m) and 409A of the Code). 
If: (A) in Year 2010 the Company’s Annual Profit both (i) meets
or exceeds the Performance Target for Year 2010 and (ii) is at least $9
million and (B) in Year 2011 the Company’s Annual Profit both (i) meets
or exceeds the Performance Target for Year 2011 and (ii) is at least $11
million, then in addition to the delivery of the 100,000 share increment for
Year 2011, the Holder will be entitled to receive an additional number of
Performance Shares that would result in the Holder having received a total of
380,000 Performance Shares hereunder.  In
the event of a reorganization, business combination or other transaction that
materially alters the business or structure of the Company, the Committee and
the Holder will discuss in good faith any appropriate adjustments to the
Performance Targets applicable in the remaining Years to which this Award
applies.


 


4.             Delivery of Shares. 
The Performance Shares shall be delivered to the Holder for any Year in
which the Company’s Annual Profit meets or exceeds the Performance Target
applicable for such Year as follows:


 




	
  2008

  	
   

  	
  80,000 shares

  	
   

  
	
  2009

  	
   

  	
  100,000 shares

  	
   

  
	
  2010

  	
   

  	
  100,000 shares

  	
   

  
	
  2011

  	
   

  	
  100,000 shares

  	
   

  






 


The Company shall deliver
an earned increment of Performance Shares to the Holder on the first business
day following the day that both (i) the Accounting Firm certifies the
Company’s financial statements which reflect that the Annual Profit for that
Year meets or exceeds the applicable Performance Target and (ii) the
Committee certifies the attainment of the applicable Performance Target.


 


5.             Change in Control. 
If, within the one (1) year period following the occurrence of a
Change in Control, the Holder’s employment is terminated by the Company without
Cause or by the Holder for Good Reason and prior to the time at which all of
the Performance Shares have been delivered to the Holder, the Company shall
deliver all such undelivered Performance Shares to the Holder promptly
following such termination of employment.


 


6.             Death or Disability. 
If the Holder’s employment is terminated by the Company due to death or
Disability of the Holder and the Performance Target is ultimately satisfied for
the Year in which such termination occurred, the Company shall deliver a pro
rata portion of the Performance Shares for such Year to the Holder or his
estate, as applicable, pursuant to Section 4 (calculated based upon the
number of days in the applicable Year that the Holder was employed by the
Company prior to such termination relative to the total number of days in the
applicable calendar Year).


 


7.             Withholding. 
On each date on which Performance Shares are delivered, the Holder shall
be required to pay to the Company, in cash, the amount which the Company
reasonably determines to be necessary in order for the Company to comply with
applicable federal or state income tax withholding requirements and the
collection of employment taxes; provided that the Holder may elect to offset
the amount the Company reasonably determines as necessary to comply with
applicable tax requirements from the Performance Shares otherwise deliverable
to the Holder (valued at their Fair Market Value on the applicable date) and a
net number of Performance Shares shall thereafter be delivered to the Holder.


 


8.             Status of the Holder With
Respect to Shares.  The Holder shall have no
rights, powers or privileges with respect to the Performance Shares until such
Performance Shares are delivered to the Holder.


 


9.             Representations and Warranties. 
As a condition to the delivery of the Performance Shares, the Board may
obtain such agreements or undertakings, if any, as the Board may deem necessary
or advisable to assure compliance with any law or regulation including, but not
limited to, the following:


 

















 


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


 


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


 


10.          Termination of the Award. 
Except as set forth in Sections 5 and 6 hereof, this Award shall
automatically terminate and expire on the earlier of (i) the first date in
2012 on which either (A) all Performance Shares have been delivered or (B) the
Committee determines that the Performance Target for Year 2011 has not been
attained, or (ii) the date of the Holder’s Separation, and upon the date
of such termination of the Award all Performance Shares which have not been
delivered on or prior to such date will be permanently forfeited.


 


11.          Shareholder Approval of 2008 Plan.  This Award is subject to approval of the 2008 Plan by
a majority of the Company’s stockholders; provided, however, that if the 2008
Plan is not so approved by December 31, 2008, this Award shall terminate
and be null and void ab initio; and provided, further, that no Performance
Shares shall be delivered prior to such stockholder approval.


 


12.          Interpretation of the Award
Provisions.  The Committee shall have the authority to the
full extent provided under the terms of the 2008 Plan to interpret all terms of
the 2008 Plan and this Award, and to otherwise supervise the implementation of
such terms.


 


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


 


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


 


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


 


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


 


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


 


IN
WITNESS WHEREOF,
the Company has caused these presents to be executed on its behalf and the
Holder has hereunto set his hand, all on the day and year first above written.


 


THOMAS
GROUP, INC.


 


	
   

  	
  By:

  	
  /s/ Michael E. McGrath

  
	
   

  	
  Michael E. McGrath, Executive
  Chairman

  



 


ACKNOWLEDGMENT


 


The Holder agrees
to be bound by all the terms of this Award and the 2008 Plan.


 


	
   

  	
  /s/ Earle Steinberg

  
	
   

  	
  Earle Steinberg