8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 12, 2006

THOMAS GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware	0-22010	72-0843540
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of incorporation)		Identification No.)

5221 N. O’Connor Blvd., Suite 500
Irving, Texas	75039
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (972) 869-3400

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Explanatory Note

This current report on Form 8-K/A amends our current report on Form 8-K filed with the Securities and Exchange Commission on December 27, 2005 (the “Original Report”).  The purpose of this amendment on Form 8-K/A is to amend the Original Report to revise disclosure of stockholder approval of the 2005 Omnibus Stock and Incentive Plan for Thomas Group, Inc. and disclosure regarding certain awards made thereunder.

ITEM 5.02.            Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

In December 2005, the Board of Directors of Thomas Group, Inc. (the “Company”) adopted the 2005 Omnibus Stock and Incentive Plan for Thomas Group, Inc. (the “2005 Plan”).  The 2005 Plan provides a means for the Company to grant awards to officers, employees or consultants in the form of options, restricted shares, performance awards and stock appreciation rights.  The Compensation and Corporate Governance Committee of the Company’s Board of Directors (the “Committee”) has the sole authority to interpret the 2005 Plan and to make rules and regulations relating to the 2005 Plan, to select participants, to establish the terms and conditions of awards and to grant awards.

On December 20, 2005, December 23, 2005 and April 27, 2006, the Committee, with General John T. Chain, Jr. abstaining, authorized the grant of restricted share awards to James T. Taylor, the Company’s President and Chief Executive Officer, David English, the Company’s Chief Financial Officer and Terry D. Stinson, the Company’s newly appointed President-Commercial Operations.  The December 20, 2005 awards to Mr. Taylor and Mr. English as well as the April 27, 2006 award to Mr. Stinson consist of both restricted stock and cash and will vest annually if the Company’s annual net profit exceeds certain pre-established baselines.  If such awards fully vest, Mr. Taylor would receive 300,000 shares of restricted stock and a cash award in the amount of $300,000; Mr. English and Mr. Stinson would each receive 50,000 shares of restricted stock and a cash award in the amount of $50,000.  Vesting of a portion of Mr. Taylor’s and Mr. Stinson’s awards will be accelerated if Mr. Taylor or Mr. Stinson, respectively, terminates employment by reason of involuntary termination without cause or resignation for good reason within 12 months following a change in control of the Company.  The December 23, 2005 award to Mr. Taylor consists only of restricted stock and vests quarterly depending on the lowest closing price per share of the Company’s common stock as quoted on the Nasdaq Stock Market during each fiscal quarter; provided, that such vested shares remain subject to forfeiture if Mr. Taylor’s employment with us terminates prior to December 23, 2010 for reasons other than involuntary termination without cause or resignation for good reason within 12 months following a change in control of the Company.  If this award fully vests, Mr. Taylor would receive a further 300,000 shares of restricted stock.

Each of the above described awards expressly requires approval by the Company’s stockholders of the 2005 Plan on or before December 20, 2006, otherwise, these awards terminate and become null and void.

On December 20, 2005, stockholders who collectively own approximately 67% of the Company’s outstanding common stock provided their written approval and adoption of the 2005 Plan.  At that time, such stockholders further agreed to perform such further acts and to execute any documents requested by the Company in order to more fully evidence their adoption and approval of the 2005 Plan.  The Company’s certificate of incorporation requires that formal approval of the 2005 Plan be obtained at a meeting of stockholders.  Therefore, for this reason and in order to comply with the requirements of Section 162(m) of the Internal Revenue Code and certain other legal and regulatory requirements, on December 12, 2006, a special meeting of stockholders was held for the purpose of approving and ratifying the 2005 Plan and the above described awards made thereunder.  At the special meeting, the stockholders of the Company approved and ratified the 2005 Plan and the above described awards made thereunder.

The above descriptions of the 2005 Plan and the awards granted thereunder are summaries and are qualified in their entirety by the 2005 Plan and the respective award agreements.  Copies of the 2005 Plan, the December 20, 2005 awards to Mr. Taylor and Mr. English and the December 23, 2005 award to Mr. Taylor were filed as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, to the Company’s Current Report on Form 8-K filed December 27, 2005, and are incorporated herein by reference.  A copy of the April 27, 2006 award to Mr. Stinson is filed herewith as Exhibit 10.5.

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ITEM 9.01.            Financial Statements and Exhibits.

Exhibit Number	Description
10.1	2005 Omnibus Stock and Incentive Plan for Thomas Group, Inc. dated December 20, 2005 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 27, 2005 and incorporated herein by reference).
10.2	Net Profit Restricted Share Award Agreement for James T. Taylor dated December 20, 2005 (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed December 27, 2005 and incorporated herein by reference).
10.3	Net Profit Restricted Share Award Agreement for David English dated December 20, 2005 (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed December 27, 2005 and incorporated herein by reference).
10.4	Share Price Restricted Share Award Agreement for James T. Taylor dated December 23, 2005 (filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K filed December 27, 2005 and incorporated herein by reference).
10.5	Net Profit Restricted Share Award Agreement for Terry D. Stinson dated April 27, 2006.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	THOMAS GROUP, INC.
Date: December 15, 2006	By:	/s/ David English
		David English
		Chief Financial Officer

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EXHIBIT INDEX

Exhibit Number	Description
10.1	2005 Omnibus Stock and Incentive Plan for Thomas Group, Inc. dated December 20, 2005 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 27, 2005 and incorporated herein by reference).
10.2	Net Profit Restricted Share Award Agreement for James T. Taylor dated December 20, 2005 (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed December 27, 2005 and incorporated herein by reference).
10.3	Net Profit Restricted Share Award Agreement for David English dated December 20, 2005 (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed December 27, 2005 and incorporated herein by reference).
10.4	Share Price Restricted Share Award Agreement for James T. Taylor dated December 23, 2005 (filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K filed December 27, 2005 and incorporated herein by reference).
10.5	Net Profit Restricted Share Award Agreement for Terry D. Stinson dated April 27, 2006.

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EX-10.5

Exhibit 10.5

NET PROFIT
RESTRICTED SHARE AWARD
UNDER THE
2005 OMNIBUS STOCK AND INCENTIVE PLAN
for
THOMAS GROUP, INC.

Effective as of April 27, 2006 (“Date of Grant”), a NET PROFIT RESTRICTED SHARE AWARD (“Award”) is granted by Thomas Group, Inc. (the “Company”) to Terry D. Stinson (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 50,000 Shares subject to certain restrictions described herein; and

WHEREAS, the Company desires to grant to Holder a Cash Bonus of $50,000 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 prepared 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.

“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.

“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.

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“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 50,000 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 16,667 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 16,667 Restricted Shares, and $16,667 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 $16,667 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.

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 $16,667.

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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 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,

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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:

ACKNOWLEDGMENT

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

Terry D. Stinson

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