Exhibit 10.2


 


NET PROFIT


RESTRICTED SHARE AWARD


UNDER THE


2005 OMNIBUS STOCK AND INCENTIVE PLAN


for


THOMAS GROUP, INC.


 


Effective as of December 20, 2005 (“Date of Grant”), a NET PROFIT RESTRICTED
SHARE AWARD (“Award”) is granted by Thomas Group, Inc.
(the “Company”) to James T. Taylor (the “Holder”), provided, further, that this Award is in all
respects subject to the terms, definitions and provisions of the 2005 Omnibus
Stock and Incentive Plan For Thomas Group, Inc. (the “Plan”),
all of which are incorporated herein by reference, except to the extent
otherwise expressly provided in this Award.


 


WITNESSETH


 


WHEREAS, the Company desires to grant to Holder 300,000 Shares subject to
certain restrictions described herein; and


 


WHEREAS, the
Company desires to grant to Holder a Cash Bonus of $300,000 subject to the
satisfaction of certain conditions described herein; and


 


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 Holder; and


 


WHEREAS, the terms of the Award, including without limitation the Restrictions
imposed on Restricted Shares and Cash Bonus, are set forth below; and


 


WHEREAS, the Plan is effective as of December 20,
2005, the date of its adoption by the Board, subject to approval by a majority
of the Company’s stockholders and compliance with Regulation 14C under the 1934
Act; provided, however, that if the Plan is not so approved or there has not
been compliance with Regulation 14C by December 20, 2006, this Award shall
terminate and be null and void ab initio; and provided, further, that no
Restricted Shares will Vest prior to such stockholder approval and compliance
with Regulation 14C.


 


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


 


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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 certified by
the Accounting Firm to the extent shown
or reflected on such Financial Statements.


 


“Annual Profit Increase Percentage” shall mean, for each Year, the quotient of (i) the
excess (if any) of the Annual Profit for the current Year over the greater of
(x) the Annual Profit for the year 2005; and (y) the Annual Profit for the
preceding Year, divided by (ii) the greater of (x) or (y).


 


“Award Shares”
shall mean all Shares subject to this Award, including, without limitation,
both Restricted Shares and Vested Shares.


 


“Award Share Distributions” shall mean any
amounts of cash, or stock, paid or distributed by the Company with respect to
Award Shares.


 


“Board” shall mean the Board of Directors of
the Company.


 


“Cash Bonus” shall mean the amount described in Section 4.


 


“Code” shall mean the Internal Revenue Code
of 1986, as amended.


 


“Compensation Committee” shall mean the Compensation and
Corporate Governance Committee of the Board.


 


“Good Reason” shall
mean that, during the 180 day period ending on the date of Holder’s
resignation, there has occurred one or more of the following: (i) there
has been a material breach by the Company of this Award or Holder’s written employment
agreement, or (ii) the Company has reduced Holder’s base salary (or its
equivalent as determined by the Compensation Committee) below the highest level
in effect during the 180 day period ending on the date of Holder’s resignation;
or (iii) the Company has reduced Holder’s duties and responsibilities
below those of President and Chief Executive Officer.


 


“Involuntary Termination” shall mean Holder’s Separation by reason of either (i) being
discharged by the Company, or (ii) the expiration of his “Term of
Employment” (as defined in his Second Amended Employment Agreement and the
comparable term in any successor employment agreement or amendment, hereafter
Holder’s “Employment Agreement”) unless, prior to the later of (i) the
45th day following the date on which Holder delivers a written notice to the
Board of the impending expiration of his Term of Employment (which notice will
not be considered delivered if the purported delivery is made more than 60 days
prior to the date on which his Term of Employment expires), or (ii) the
date on which his Term of Employment expires, the Board has offered in writing
(x) to extend Holder’s Term of Employment for a period of at least 12 months,
(y) to appoint Holder to serve as President and Chief Executive Officer of the
Company during such extended Term of Employment, and (z) to pay Holder, during
the extended Term of Employment, a base salary at least equal to the Holder’s
Base Salary (as defined in the Employment Agreement) as in effect on the last
day of the expiring Term of Employment.


 


 “Restrictions”
shall mean the requirement that the Award Shares be returned to the Company
under certain circumstances described in this Award, and which requirement
shall constitute a “substantial risk of forfeiture” as defined under Section 83(a)(1) of
the Code.


 


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“Restricted Period” shall mean the period
during which Award Shares remain subject to Restrictions.


 


“Restricted Shares” shall mean the Award
Shares which remain subject to the Restrictions at the time of reference.


 


“Retention Period” shall mean the period beginning with the Date of Grant, and ending on
the date of Holder’s Separation.


 


“Separation”
shall mean Holder’s termination of full time employment by the Company for any
reason.


 


“Share(s)” shall mean shares of common
stock, par value $.01 per share, of the Company.


 


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


 


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


 


“Vest”, “Vested” “Vested Shares” and similar shall mean the Award
Shares with respect to which the Restrictions have lapsed at the time of
reference.


 


2.                                      Restricted Share Award.  The
Company hereby transfers and delivers to Holder an aggregate of 300,000
Restricted Shares to hold on the terms and conditions set forth in this
Award.  Holder shall not be entitled to
receive Restricted Share Distributions made prior to the date on which
Restricted Shares become Vested Shares, but Holder will be entitled to receive any
Restricted Share Distributions which are made with respect to Restricted Shares
after they become Vested Shares.


 


3.                                      Lapse of Restrictions
(Vesting).  The Restrictions on the Restricted Shares
shall lapse, and such Restricted Shares shall become Vested Shares, with
respect to 100,000 Restricted Shares on the last day of any Year in which the
Company achieves at least a 15% Annual Profit Increase Percentage.  Notwithstanding the forgoing, in the event
this Award terminates by reason of Holder’s Separation as a result of his
Involuntarily Termination without Cause, or as a result his resignation for
Good Reason within 12 months following a Change in Control, then Holder will
Vest in 100,000 Restricted Shares, and $100,000 of the Cash Bonus, on such date
of Separation and, without limitation, will forfeit all of the Award Shares
which remain Restricted Shares and the remaining unpaid Cash Bonus immediately
following such date of Separation.  Notwithstanding
any provision of this Award to the contrary, in the event that the acceleration
of the Vesting described in the preceding sentence occurs as a result of Holder’s
Separation following a Change in Control, then if the distribution of the Award
Shares which became Vested Shares and the $100,000 Cash Bonus as a result of
the acceleration of Vesting due to Holder’s Separation following the Change in
Control, when taken together with the
sum of any amounts or benefits otherwise paid or distributed to the Holder by
the Company or any affiliated company of the Company (collectively the “Covered
Payments”), would cause Holder to be subject to the tax (the “Excise Tax”)
imposed under Section 4999 of the Code or any similar tax that may
hereafter be imposed, the amount of the Cash Bonus will be reduced and,
thereafter, if necessary, the number of Restricted Shares which will become
Vested Shares and distributed shall be limited, to that amount of Cash Bonus
and that number of Shares which will cause the Covered Payments to be $1.00
less than the amount which causes such Covered Payments to be subject to the
Excise Tax; provided, further, that nothing herein shall preclude Holder from
directing the Company to adjust some or all of the other amounts or benefits
which comprise the Covered Payments so as to limit or eliminate entirely the
reduction in the Cash Bonus and the number of Restricted Shares which will
become Vested Shares.


 


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4.                                      Cash
Bonus.  As
soon as reasonably possible following any Year in which the Company achieves at least a 15% Annual Profit Increase
Percentage, the Company shall pay Holder a Cash Bonus of $100,000.


 


5.                                      Withholding.  On
each date on which Restrictions lapse, and on the payment of the Cash Bonus, 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, further, that the Company, in its
sole discretion, may offset the amount it reasonably determines as necessary to
withhold from the Cash Bonus otherwise payable to Holder.


 


6.                                      Status of Holder With
Respect to Restricted Shares.  During the Restricted Period, the
certificates representing the Restricted Shares shall be registered in the
Holder’s name and bear a restrictive legend disclosing the Restrictions.  Such certificates shall be deposited by the
Holder with the Company, together with stock powers or other instruments of
assignment, each endorsed in blank, which will permit the transfer to the
Company of all or any portion of the Restricted Shares which are
forfeited.  Restricted Shares shall not constitute
issued and outstanding common stock for any corporate purposes and the Holder
shall have no rights, powers and privileges of a Holder of unrestricted Shares until
such Restricted Shares become Vested Shares, at which time, with respect to
Vested Shares, the Holder shall have all rights, powers and privileges of a
Holder of unrestricted Shares, including with respect to those Vested Shares
which continue to be held by the Company during the Retention Period.


 


At
each time Restricted Shares become Vested, the Company shall deliver to the
Holder 40% of the such Vested Shares, and shall continue to hold the remaining
60% percent of Vested Shares during the Retention Period, and shall, as soon as
reasonably possible after the end of such Retention Period, deliver all
retained Vested Shares to Holder. 
Without limitation, the Company’s right to hold the 60% of retained
Vested Shares during the Retention Period shall survive the Termination Date.


 


All
Award Share Distributions with respect to Vested Shares shall be immediately
paid to Holder, except that where such Award Share Distribution is in the form
of Shares, such Shares shall be retained until the end of the Retention Period.


 


As
a condition of the grant of Restricted Shares, and the issuance of Vested
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
Holder to Company that he is acquiring the Vested Shares to be issued to him
for investment and not with a view to, or for sale in connection with, the
distribution of any such Vested Shares subsequent to the Retention Period; 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 Vested Shares and are endorsed
upon the Share certificates.


 


7.                                      Transferability of
Restricted Shares.  The Vested Shares held by the Company during
the Retention Period, and this Award, shall not be transferable by Holder.


 


8.                                      Section 83(b) Election. 
Holder, having been granted Restricted Shares subject to a “substantial
risk of forfeiture,” may elect under Section 83(b) of the Code to
include in his gross income the fair


 


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market
value (determined without regard to the Restrictions) of such Restricted Shares
as of the Date of Grant.  If Holder makes
the Section 83(b) election, Holder shall (i) make such election
in a manner that is satisfactory to the Company, (ii) provide the Company
with a copy of such election, (iii) agree to promptly notify the Company
if any Internal Revenue Service or state tax agent, on audit or otherwise,
questions the validity or correctness of such election or of the amount of
income reportable on account of such election, and (iv) agree to such
federal and state income withholding as the Company may reasonably require in
its sole and absolute discretion.


 


9.                                      Termination of the Award.  Without limitation, this Award shall
automatically terminate and expire on the earlier of (i) the date on which
all Restricted Shares have become Vested Shares, or (ii) the date of
Holder’s Separation, and upon the date of such termination of the Award all
Restricted Shares which have not Vested on or prior to such date will be permanently
forfeited.


 


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


 


11.                               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.


 


12.                               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.


 


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


 


14.                               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.


 


15.                               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 its corporate seal to be affixed hereto by its duly authorized
representative, and Holder has hereunto set his or her hand, all on the day and
year first above written.


 


	
   

  	
  THOMAS
  GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David B. Mathis

  	
   

  
	
   

  	
   

  
	
  ACKNOWLEDGMENT

  
	
   

  	
   

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

  
	
   

  	
   

  
	
   

  	
   

  	
    /s/
  James T. Taylor

  	
   

  
	
   

  	
   

  	
  James T. Taylor

  
					



 


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