Document:

Exhibit 4.01

 

CUSIP
NO. 52517P7E5

ISIN NO. US52517P7E55

 

	
  REGISTERED

  	
   

  	
  PRINCIPAL AMOUNT:
  $2,000,000

  
	
  No. R-1

  	
   

  	
   

  

 

LEHMAN BROTHERS HOLDINGS
INC.

 

MEDIUM-TERM NOTE, SERIES
I

 

FX
BASKET-LINKED NOTE
 DUE OCTOBER 28, 2009

 

THIS
NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY OR A NOMINEE OF THE
DEPOSITORY.  UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55
WATER STREET, NEW YORK, NEW YORK) TO THE COMPANY (AS DEFINED BELOW) OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM (A “CERTIFICATED NOTE”), THIS GLOBAL SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY
OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY
OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.

 

 

LEHMAN BROTHERS HOLDINGS INC., a corporation duly organized and
existing under the laws of the State of Delaware (herein called the “Company,”
which term includes any successor corporation under the Indenture referred to
on the reverse hereof), for value received, hereby promises to pay to CEDE &
Co., or registered assigns, on the Maturity Date, an amount equal to the Redemption Amount.

 

The “Maturity Date” is October 28, 2009,
or if such day is not a Business Day, on the next following Business Day.

 

The “Redemption
Amount” is the amount equal to the sum of the principal amount of the Notes
plus the Additional Amount, if any.

 

The “Additional
Amount” is a single U.S. dollar amount equal to the principal amount of the
notes multiplied by the product of the Participation Rate times the Basket
Return, if the Basket Return is greater than zero; provided that the minimum
Additional Amount payable on the notes shall be zero.

 

The “Participation
Rate” is 105%.

 

The “Reference
Currencies” are the Euro (EUR), British Pound (GBP), Canadian Dollar (CAD) and
Swiss Franc (CHF).

 

The “Basket Return” equals
the sum of the Weighted Currency Returns for each Reference Currency.

 

The “Weighted
Currency Return” is, for EUR and GBP, the product of the Weighting for each of
EUR and GBP times a quotient, the numerator of which is the difference of the
Initial Reference Currency Rate for such Reference Currency minus the
Settlement Rate for such Reference Currency and the denominator of which is the
Settlement Rate for such Reference Currency. 
The Weighted Currency Return is, for CAD and CHF, the product of the
Weighting for each of CAD and CHF times a quotient, the numerator of which is
the difference of the Settlement Rate for such Reference Currency minus the
Initial Reference Currency Rate for such Reference Currency and the denominator
of which is the Initial Reference Currency Rate for such Reference Currency.

 

The “Weighting”
and “Initial Reference Currency Rate” for each Reference Currency are as
follows:

 

	
  Reference Currency

  	
   

  	
  Weighting

  	
   

  	
  Initial Reference

  Currency Rate

  	
   

  
	
  EUR

  	
   

  	
  25

  	
  %

  	
  1.5943

  	
   

  
	
  GBP

  	
   

  	
  25

  	
  %

  	
  1.9825

  	
   

  
	
  CAD

  	
   

  	
  25

  	
  %

  	
  1.0198

  	
   

  
	
  CHF

  	
   

  	
  25

  	
  %

  	
  1.0093

  	
   

  

 

The “Settlement
Rate” for each Reference Currency is the Reference Exchange Rate on the
Valuation Date, determined by the Calculation Agent in accordance with the
applicable Settlement Rate Option (subject to the occurrence of a Disruption
Event).

 

2

 

The “Reference
Exchange Rates” are, for EUR and GBP,
the spot exchange rates for each of EUR and GBP quoted against the U.S. dollar,
expressed as the number of USD per unit of the Reference Currency. The Reference
Exchange Rates for CAD and CHF are the spot exchange rate for each of CAD and
CHF quoted against the U.S. dollar, expressed as the number of units of the
Reference Currency per one USD.

 

The “Valuation
Date” is October 23, 2009; provided that, upon the occurrence of a
Disruption Event with respect to a Reference Currency, the Valuation Date for
the affected Reference Currency may be postponed (as described in “Disruption
Events” below).

 

The “Issue
Date” is April 28, 2008.

 

If the
Calculation Agent determines that a Disruption Event relating to one or more of
the Reference Currencies is in effect on the scheduled Valuation Date, the
Calculation Agent will determine the Basket Return using:

 

·                                          for each Reference
Currency that did not suffer a Disruption Event on the scheduled Valuation
Date, the Settlement Rate on the scheduled Valuation Date, and

 

·                                          for each Reference
Currency that did suffer a Disruption Event on the scheduled Valuation Date,
the Settlement Rate on the immediately succeeding scheduled Valuation Business
Day for such Reference Currency on which no Disruption Event occurs or is
continuing with respect to such Reference Currency;

 

provided, however, that if a
Disruption Event has occurred or is continuing with respect to a Reference
Currency on each of the three scheduled Valuation Business Days following the
scheduled Valuation Date, then (a) such third scheduled Valuation Business
Day shall be deemed the Valuation Date for the affected Reference Currency; and
(b) the Calculation Agent will determine the Settlement Rate for the
affected Reference Currency on such day in accordance with Fallback Rate
Observation Methodology.

 

For
purposes of the above, “scheduled Valuation Business Day” means a day that is
or, in the judgment of the Calculation Agent, should have been, a Valuation
Business Day for the affected Reference Currency.

 

A “Disruption
Event” means any of the
following events as determined in good faith by the Calculation Agent:

 

(A)                              the occurrence and/or existence of an event on any day that has the
effect of preventing or making impossible (x) the conversion of the
Reference Currency into USD through customary legal channels; or (y) for
any Reference Currency other than EUR, the delivery of USD from accounts inside
the Reference Currency Jurisdiction with respect to such Reference Currency to
accounts outside that Reference Currency Jurisdiction;

 

3

 

	
   

  	
  (B)

  	
  the
  occurrence of any event causing the Reference Exchange Rate for the Reference
  Currency to be split into dual or multiple currency exchange rates; or

  
	
   

  	
   

  	
   

  
	
   

  	
  (C)

  	
  the Settlement Rate being
  unavailable for the Reference Currency, or the occurrence of an event
  (i) for any Reference Currency other than EUR, in the Reference Currency
  Jurisdiction for that Reference Currency that materially disrupts the market
  for the Reference Currency or (ii) that generally makes it impossible to
  obtain the Settlement Rate for the Reference Currency, on the Valuation Date.

  

 

A “Valuation Business Day” means,
with respect to each Reference Currency, any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which commercial banks are
authorized or required by law, regulation or executive order to close
(including for dealings in foreign exchange in accordance with the practice of
the foreign exchange market) in the city or jurisdiction indicated in the table
below:

 

	
  Reference Currency

  	
   

  	
  Screen Reference*

  	
   

  	
  Valuation Business Day

  
	
  EUR

  	
   

  	
  Reuters page EURUSDFIXM=WM (as substitute for 1FED)

  	
   

  	
  London

  
	
  GBP

  	
   

  	
  Reuters page GBPUSDFIXM=WM (as substitute for 1FED)

  	
   

  	
  London

  
	
  CAD

  	
   

  	
  Reuters page USDCADFIXM=WM (as substitute for 1FED)

  	
   

  	
  London

  
	
  CHF

  	
   

  	
  Reuters page USDCHFFIXM=WM (as substitute for 1FED)

  	
   

  	
  London

  

 

*
In each case, as observed at approximately 4:00 p.m. London time.

 

The “Settlement Rate Option” for the EUR is the U.S.
Dollar/Euro official fixing rate, expressed as the amount of U.S. Dollars per
one Euro, for settlement in two Business Days reported by the Federal Reserve
Bank of New York which appears on Reuters Screen 1FED to the right of the
caption “EUR” at approximately 10.00 a.m., New York time, on the relevant
Valuation Date.  The Settlement Rate
Option for the GBP is the U.S. Dollar/Sterling official fixing rate, expressed
as the amount of U.S. Dollars per one Sterling, for settlement in two Business
Days reported by the Federal Reserve Bank of New York which appears on Reuters
Screen 1FED to the right of the caption “GBP” at approximately 10.00 a.m.,
New York time, on the relevant Valuation Date. 
The Settlement Rate Option for the CAD is the Canadian Dollar/U.S.
Dollar official fixing rate, expressed as the amount of Canadian Dollars per
one U.S. Dollar, for settlement in one Business Day reported by the Federal
Reserve Bank of New York which appears on Reuters Screen 1FED to the right of
the caption “CAD” at approximately 10.00 a.m. New York time, on the
relevant Valuation Date.  The Settlement
Rate Option for the CHF is the Swiss Franc/U.S. Dollar official fixing rate,
expressed as the amount of Swiss Francs per one U.S. Dollar, for settlement in
two Business Days reported by the Federal Reserve Bank of New York which
appears on Reuters Screen 1FED to the right of the caption “CHF” at
approximately 10.00 a.m., New York time, on the relevant Valuation
Date.  The term “business day” solely as used in any
Settlement Rate Option described above shall mean any day, other 

 

4

 

than a Saturday or Sunday,
that is neither a legal holiday nor a day on which commercial banks are
authorized or required by law, regulation or executive order to close
(including for dealings in foreign exchange in accordance with the practice of
the foreign exchange market) in the Principal Financial Center for both (a) the
Basket Currency and (b) the currency against which the Basket Currency is
quoted (the “base currency”) in accordance with the Reference Exchange Rate
specified in the applicable pricing supplement, in each case as specified for
the applicable Basket Currency or base currency in the table above.

 

The screen or time of observation
indicated in relation to any Settlement Rate Option above shall be deemed to
refer to such screen or time of observation as modified or amended from time to
time, or to any substitute screen thereto.

 

The “Fallback
Rate Observation Methodology” means
that the reference exchange rate, Settlement Rate or other rate, as specified
in the applicable pricing supplement, in respect of a reference currency will
equal the noon buying rate in New York for cable transfers in foreign
currencies as announced by the Federal Reserve Bank of New York for customs
purposes (the “Noon Buying Rate”) on the relevant Valuation Date or such other
date specified in the applicable pricing supplement. If the Noon Buying Rate is
not announced on that date, the Reference Exchange Rate, Settlement Rate or
other rate for such Reference Currency will be calculated on the basis of the
arithmetic mean of the applicable spot quotations received by the Calculation Agent
at approximately 10:00 a.m., New York City time, on the Valuation Business
Day next succeeding the Valuation Date or such other date specified in the
applicable pricing supplement, for the purchase or sale for deposits in the
reference currency by the New York offices of three leading banks engaged in
the interbank market (selected in the sole discretion of the Calculation Agent)
(the “Reference Banks”). If fewer than three Reference Banks provide spot
quotations, then the Reference Exchange Rate, Settlement Rate or other rate, as
applicable, will be calculated on the basis of the arithmetic mean of the
applicable spot quotations received by the Calculation Agent at approximately
10:00 a.m., New York City time, on the relevant date from two Reference
Banks (selected in the sole discretion of the Calculation Agent), for the
purchase or sale for deposits in the Reference Currency. If these spot
quotations are available from only one Reference Bank, then the Calculation
Agent, in its sole discretion, will determine whether that quotation is
reasonable to be used. If no spot quotation is available, then the Reference
Exchange Rate, Settlement Rate or other rate, as applicable, for such Reference
Currency will be determined by the Calculation Agent in good faith and in a
commercially reasonable manner.

 

A “Business Day”, notwithstanding any
provision in the Indenture, is any day that is not is not a Saturday or Sunday
and that is not a day on which banking institutions in New York City generally
are authorized or obligated by law or executive order to be closed.

 

The “Calculation Agent” means Lehman Brothers
Inc.

 

Except as provided below, the Redemption Amount may, at the option of
the Company, be made by check mailed to the person entitled thereto at such
person’s address as it appears on the registry books of the Company.

 

Payment of the Redemption Amount will be made in immediately available
funds in accordance with the normal procedures of the Trustee (or any duly
appointed Paying Agent).

 

5

 

The Company will pay any administrative costs imposed by banks
in making payments in immediately available funds, but any tax, assessment or
governmental charge imposed upon payments hereunder, including, without
limitation, any withholding tax, will be borne by the Holder hereof.

 

References herein
to “U.S. dollars” or “U.S.$” or “$” or “USD” are to the coin or currency of the
United States as at the time of payment is legal tender for the payment of
public and private debts.

 

REFERENCE IS
HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE
HEREOF.  SUCH FURTHER PROVISIONS SHALL
FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.

 

This Note shall
not be valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been signed by the Trustee under the
Indenture.

 

6

 

IN WITNESS
WHEREOF, Lehman Brothers Holdings Inc. has caused this instrument to be signed
by its Chairman of the Board, its President, its Vice Chairman, its Chief
Financial Officer, one of its Vice Presidents or its Treasurer, by manual or
facsimile signature under its corporate seal, attested by its Secretary or one
of its Assistant Secretaries by manual or facsimile signature.

 

Dated:  April 28, 2008

 

	
  [SEAL]

  	
   

  	
  LEHMAN BROTHERS
  HOLDINGS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name: 

  	
  Andrew Yeung

  
	
   

  	
   

  	
   

  	
  Title:  

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attest:

  	
   

  
	
   

  	
   

  	
   

  	
  Name: 

  	
  Cindy Buckholz

  
	
   

  	
   

  	
   

  	
  Title:  

  	
  Assistant Secretary

  
						

 

TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

 

This is one of the
Securities of the series designated herein referred to in the within-mentioned
Indenture.

 

	
  CITIBANK, N.A.

  
	
  as Trustee

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized
  Officer

  	
   

  

 

7

 

[REVERSE
OF NOTE]

 

LEHMAN BROTHERS
HOLDINGS INC.

MEDIUM-TERM NOTES,
SERIES I

FX BASKET-LINKED NOTE
 DUE OCTOBER 28, 2009

 

Section 1.  General.  This Note is one of a duly authorized series
of Notes of the Company designated as the Medium-Term Notes, Series I, FX Basket-Linked Note (herein called
the “Notes”).  The Notes are one of an indefinite
number of series of debt securities of the Company (collectively, the “Securities”)
issued or issuable under and pursuant to an indenture dated as of September 1,
1987, as amended and supplemented (the “Indenture”), duly executed and
delivered by the Company and Citibank, N.A., as Trustee (herein called the “Trustee”),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Company and the holders of
the Securities.  The separate series of
Securities may be issued in various aggregate principal amounts, may mature at
different times, may bear interest (if any) at different rates, may be subject
to different redemption provisions or repurchase rights (if any), may be
subject to different sinking, purchase or analogous funds (if any), may be
subject to different covenants and Events of Default and may otherwise vary as
in the Indenture provided.

 

Section 2.  Principal Amount for Indenture Purposes.  For the purpose of determining whether
Holders of the requisite amount of Notes of this series outstanding under the
Indenture have made a demand, given a notice or waiver or taken any other
action, the principal amount of this Note will be deemed to be the principal
amount of this Note then outstanding.

 

Section 3.  Modification and Waivers.  The Indenture contains provisions permitting
the Company and the Trustee, with the consent of the Holders of not less than
66-2/3% in aggregate principal amount of each series of the Securities at the
time Outstanding to be affected, evidenced as in the Indenture provided, to
execute supplemental indentures adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the rights of the holders of
the Securities of all such series; provided, however, that no such supplemental
indenture shall, among other things, (i) change the fixed maturity of any
Security, or reduce the Additional Amount or the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon or reduce any
premium or other amount payable on redemption, or make the Additional Amount or
the principal amount thereof, premium or other amount payable, if any, or
interest thereon payable in any coin or currency other than that herein above
provided, without the consent of the Holder of each Security so affected, or (ii) change
the place of payment on any Security, or impair the right to institute suit for
payment on any Security, or reduce the aforesaid percentage of Securities, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of each Security so affected.  It is also provided in the Indenture that,
prior to any declaration accelerating the maturity of any series of Securities,
the holders of a majority in aggregate principal amount of the Securities of
such series 

 

 

Outstanding may on behalf
of the holders of all the Securities of such series waive any past default or
Event of Default under the Indenture with respect to such series and its
consequences, except a default in the payment of interest, if any, on the
Additional Amount or the principal amount, or premium, if any, on any of the
Securities of such series, or in the payment of any sinking fund installment or
analogous obligation with respect to Securities of such series.  Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
holders and owners of this Note and any Notes of this series which may be
issued in exchange or substitution herefor, irrespective of whether or not any
notation thereof is made upon this Note or such other Notes of this series.

 

Section 4.  Obligations Unconditional.  No reference herein to the Indenture and no
provisions of this Note or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
Additional Amount or the principal amount on this Note at the place, at the
respective times, at the rate, and in the coin or currency herein prescribed.

 

Section 5.  Defeasance.  The Indenture contains provisions for the
discharge of the Indenture and defeasance at any time of the indebtedness on
this Note upon compliance by the Company with certain conditions set forth
therein, which provisions apply to this Note.

 

Section 6.  Authorized Form and Denominations.  The Notes of this series are issuable in
registered form, without coupons.  Each
Note will be issued initially as either a Global Security or a Certificated
Note, at the option of the Company, in denominations of $1,000 or whole
multiples of $1,000, either at the office or agency to be designated and
maintained by the Company for such purpose in the Borough of Manhattan, New
York City, pursuant to the provisions of the Indenture or at any of such other
offices or agencies as may be designated and maintained by the Company for such
purpose pursuant to the provisions of the Indenture, and in the manner and
subject to the limitations provided in the Indenture, but without the payment of
any service charge, except for any tax or other governmental charges imposed in
connection therewith.  Notes of this
series are exchangeable for a like aggregate principal amount of Notes of this
series of a different authorized denomination, except that Global Securities
will not be exchangeable for Certificated Notes of this series.

 

Section 7.  Registration of Transfer.  As provided in the Indenture and subject to
certain limitations as therein set forth, the transfer of this Note is
registrable in the Security Register, upon surrender of this Note for
registration of transfer, at the Corporate Trust Office or agency in a Place of
Payment for this Note, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar
requiring such written instrument of transfer duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more
new Notes of this series, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.

 

If at any time the
Depository notifies the Company that it is unwilling or unable to continue as
Depository or if at any time the Depository shall no longer be eligible under
the Indenture, the Company shall appoint a successor Depository.  If a successor Depository for the Notes of
this series is not appointed by the Company within 90 days after the Company
receives 

 

 

such notice or becomes
aware of such ineligibility, the Company will issue, and the Trustee will
authenticate and deliver, Notes of this series in definitive form in an
aggregate principal amount equal to the principal amount of this Note.

 

No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith.

 

Prior to due presentment of this Note for registration
of transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the person in whose name this Note is registered as the owner
hereof for all purposes, and neither the Company nor the Trustee nor any agent
of the Company or of the Trustee shall be affected by any notice to the
contrary.

 

Section 8. 
Events of Default.  If an
Event of Default with respect to Notes of this series shall occur and be
continuing, the amount that may be declared due and payable upon any
acceleration of the notes will be determined by the Calculation Agent for the
period from and including the Issue Date to but excluding the date of early
repayment and will equal, for each note, the Redemption Amount, calculated as
the date of early repayment were the Maturity Date. If a bankruptcy proceeding
is commenced in respect of Lehman Brothers Holdings, the claim of the
beneficial owner of a note for the period from and including the Issue Date to
but excluding the date of early repayment will be capped at the Redemption
Amount, calculated as though the date of the commencement of the proceeding
were the Maturity Date.

 

Section 9. 
No Recourse Against Certain Persons.  No recourse for the payment of the Additional
Amount or for any claim based hereon or otherwise in respect hereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
the Indenture or any Indenture supplemental thereto or in any Note, or because
of the creation of any indebtedness represented thereby, shall be had against
any incorporator, stockholder, officer or director, as such, past, present or
future, of the Company or of any successor corporation, either directly or
through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.

 

Section 10.  Defined Terms.  All terms used but not defined in this Note
are used herein as defined in the Indenture.

 

Section 11. 
GOVERNING LAW.  THIS NOTE
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.Exhibit 10.1

 

AMENDMENT NO. 1

to

PERFORMANCE SHARE AWARD

UNDER THE

2008 OMNIBUS STOCK AND INCENTIVE PLAN

for

THOMAS GROUP, INC.

 

THIS
AMENDMENT NO. 1 TO PERFORMANCE
SHARE AWARD, dated as of April 30, 2008 (this
“Amendment”), is entered into by and between Thomas Group, Inc., a
Delaware corporation (the “Company”),
and Michael E. McGrath (the “Holder”).

 

WITNESSETH

 

WHEREAS,  effective as
of March 1, 2008,  a Performance Share Award  (“Award”)
for up to 350,000 shares of common stock, par value $.01 per share, of the
Company was granted by the Company to the Holder, subject to the terms and
provisions of the 2008 Omnibus Stock and Incentive Plan For Thomas Group, Inc.
(the “Plan”);

 

WHEREAS, Section 14(e) of the Plan
provides that the Compensation and Corporate Governance Committee of the Board
of Directors of the Company (the “Committee”) has
the authority to amend the tems and conditions of any Award granted under the
Plan;

 

WHEREAS, Section 14 of the Award provides
that the Award may be amended only by a written document signed by the Company
and the Holder;

 

WHEREAS, the Committee has authorized the
amendment of certain terms of the Award pertaining to “catch-up” vesting in
Year 2010 and the Company and the Holder desire to enter into this Amendment to
effect such amendment; and

 

WHEREAS, capitalized terms used herein without
definition shall have the respective meanings specified in the Plan;

 

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

 

1.                                      Amendment of Section 3
of the Award.  The third sentence of Section 3 of the
Award is hereby amended to read in its entirety as follows:

 

If in Year 2010 the
Company’s Annual Profit both (i) meets or exceeds the Performance Target
for Year 2010 and (ii) is at least $6 million, then in addition to the
delivery of the 121,334 share increment for such Year, the Holder will be
entitled to receive an additional number of Performance Shares that would
result in the Holder having received a total of 350,000 Performance Shares
hereunder.

 

2.                                      No Other Amendments;
Continued Effectiveness.  Except as
expressly provided in Section 1 of this Amendment, the terms of the Award
remain in full force and effect without any change or amendment hereby.

 

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

 

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

 

 

5.                                      Severability. 
If any provision of this Amendment is declared or found to be illegal,
unenforceable or void, in whole or in part, the remainder of this Amendment
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.

 

6.                                      Counterparts. 
This Amendment 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 parties hereto have executed this Amendment as of the date first above
written.

 

	
   

  	
  THOMAS
  GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edward P. Evans

  
	
   

  	
   

  	
  Edward P. Evans,

  
	
   

  	
   

  	
  Director and Chairman
  of the Compensation and Corporate Governance Committee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HOLDER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /S/ Michael E. McGrath

  
	
   

  	
   

  	
  Michael E. McGrath

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}]]