Exhibit 10.4


 


SHARE PRICE


RESTRICTED SHARE AWARD


UNDER THE

2005 OMNIBUS STOCK AND INCENTIVE PLAN

for

THOMAS GROUP, INC.


 


Effective as of December 23, 2005 (“Date of Grant”), a SHARE PRICE 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 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 Available 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:


 


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


 


“Available Shares” shall mean those Shares which have become Available Shares based on the
Quarterly Share Price as described in Section 4.


 


“Award Shares”
shall mean all Shares subject to this Award, without distinction between
whether such Shares are Available Shares, Restricted Shares and/or 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.


 


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“Closing Price” shall mean the closing price of the Shares on
the NASDAQ (or other inter-dealer quotation system on which the Shares are
traded or quoted) as reported in any newspaper of general circulation, or in
the absence of such report, as reflected on the records of the system on which
the Shares are reported or quoted.


 


“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.


 


“Quarterly Share Price” shall mean the lowest Closing Price of the Shares on any trading day
during the Quarter of reference.


 


“Quarter”
shall mean a calendar quarter.


 


“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.


 


“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.


 


“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.


 


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


 


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


 


2.             Restricted Award Shares and
Award Share Distribution.   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 Available Shares, but Holder will be
entitled to receive any Restricted Share Distributions which are made with
respect to Award Shares on or after the date on which they first become
Available Shares, but only if such Available Shares ultimately become Vested
Shares, and if such Available Shares with respect to which Restricted Share Distributions
have been made are forfeited, such Restricted Share Distributions also will be
forfeited.


 


3.             Lapse of Restrictions
(Vesting).  The Restrictions on the Available Shares
shall lapse, and such Available Shares shall become Vested Shares, on the 5th
Anniversary of the Date of Grant unless this Award shall have terminated under Section 9
prior to that date.  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 on the date of such Separation Holder will Vest all of the Award Shares
which are Available Shares on such date of Separation and, without limitation,
will forfeit all of the Award Shares which are not Available Shares on 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
Available Shares which became Vested Shares 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 number of
Available Shares which will become Vested Shares and distributed shall be
limited to 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 number of Available Shares which will become Vested Shares.


 


4.             When Award Shares Become Available
Shares.  Award Shares will become Available Shares in
such amounts as are set forth in the Chart below opposite the highest Quarterly
Share Price which has been reached in any Quarter during the period beginning
with the Quarter which includes the Date of Grant and ending with the Quarter
ending on or prior to the date of reference; except that, if this Award
terminates on the 5th Anniversary of the Date of Grant, the
Quarterly Share Price in the Quarter in which such 5th Anniversary
occurs will be counted.


 




	
  QUARTERLY SHARE PRICE

  	
   

  	
  AWARD SHARES WHICH BECOME

  AVAILABLE SHARES

  	
   

  
	
  $6.00

  	
   

  	
  20,000

  	
   

  
	
  $7.00

  	
   

  	
  40,000

  	
   

  
	
  $8.00

  	
   

  	
  60,000

  	
   

  






 


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  QUARTERLY SHARE PRICE

  	
   

  	
  AWARD SHARES WHICH BECOME

  AVAILABLE SHARES

  	
   

  
	
  $9.00

  	
   

  	
  80,000

  	
   

  
	
  $10.00

  	
   

  	
  100,000

  	
   

  
	
  $11.00

  	
   

  	
  120,000

  	
   

  
	
  $12.00

  	
   

  	
  140,000

  	
   

  
	
  $13.00

  	
   

  	
  160,000

  	
   

  
	
  $14.00

  	
   

  	
  180,000

  	
   

  
	
  $15.00

  	
   

  	
  200,000

  	
   

  
	
  $16.00

  	
   

  	
  220,000

  	
   

  
	
  $17.00

  	
   

  	
  240,000

  	
   

  
	
  $18.00

  	
   

  	
  260,000

  	
   

  
	
  $19.00

  	
   

  	
  280,000

  	
   

  
	
  $20.00

  	
   

  	
  300,000

  	
   

  






 


5.             Withholding.  On any
date on which Restrictions lapse, 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.


 


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 Available Shares, at which time the Holder shall
have all rights, powers and privileges of a Holder of unrestricted Shares
during the Restricted Period, except that Holder shall have no right to receive
Available Shares until the date on which they become Vested Shares.


 


The
Company shall deliver all Vested Shares to the Holder as soon as reasonably
possible following the date on which they become Vested Shares.


 


All
Award Share Distributions with respect to Available Shares shall be retained
until such Available Shares become Vested Shares, and then will be delivered to
the Holder at the same time as the Available Shares which have become Vested
Shares are delivered; provided, further, and without limitation, if Available
Shares are forfeited, the Award Share Distributions with respect to such
Available Shares also will be forfeited.


 


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:


 


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(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 Award Shares held by the Company during
the period prior to their becoming Vested Shares, 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 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 of
Holder’s Separation, or (ii) the 5th Anniversary of the Date of
Grant; and upon such date all Available Shares which have not Vested on or
before such date, and all Restricted Share Distributions with respect to Available
Shares which have not Vested on or before 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.


 


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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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