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TABLE OF CONTENTS
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under §240.14a-12
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THOMAS GROUP, INC.
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(Name of Registrant as Specified In Its Charter)
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N/A
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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Proposed maximum aggregate value of transaction:
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
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Form, Schedule or Registration Statement No.:
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THOMAS GROUP, INC.
5221 N. O'Connor Boulevard, Suite 500
Irving, Texas 75039-3714
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 22, 2011
To our Stockholders:
The
2011 Annual Meeting of Stockholders of Thomas Group, Inc. will be held on Wednesday, June 22, 2011 at 9:00 a.m., Central Daylight Time, at our corporate offices
located at 5221 N. O'Connor Boulevard, Suite 500, Irving, Texas 75039, for the following purposes:
(1) to
elect four persons to serve as directors until the 2012 Annual Meeting of Stockholders or until their successors are duly elected and qualified;
(2) to
ratify the appointment of Hein & Associates LLP, an independent registered public accounting firm, as our independent auditors for the fiscal year
ending December 31, 2011; and
(3) to
transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.
Our
Board of Directors has set May 5, 2011 as the record date for the Annual Meeting. Only stockholders of record at the close of business on the record date are entitled to
receive notice of and to vote on matters coming before the Annual Meeting and any adjournment or postponement of that meeting.
We
are furnishing proxy materials to our stockholders primarily over the Internet. We also are providing an option for you to vote your shares over the Internet or via a
toll-free telephone number. This process expedites our stockholders' receipt of proxy materials, lowers the costs of our Annual Meeting, helps to conserve natural resources, and provides
voting convenience for our stockholders. On or about May 13, 2011, we are mailing to our stockholders a Notice of Internet Availability of Proxy Materials. That Notice of Internet Availability
contains instructions on how you can access our 2011 Proxy Statement and Annual Report on Form 10-K and how you can vote your shares over the Internet or via the
toll-free telephone number.
The
Notice of Internet Availability also provides information on how to request a paper copy of the proxy materials, including a paper proxy card, if you so choose. If you prefer not to
vote over the Internet or via telephone and you request a paper copy, you may vote in the traditional manner by signing, dating and mailing the proxy card in the envelope that will be provided upon
your request.
Stockholders
are cordially invited to attend the Annual Meeting in person; however, regardless of whether you plan to attend the meeting in person, your vote is important, and we
encourage you to cast your vote as promptly as possible. Your prompt response is necessary to ensure that your shares are represented at the meeting.
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By Order of the Board of Directors,
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MICHAEL E. McGRATH
Executive Chairman, President and
Chief Executive Officer
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Irving,
Texas
April 29, 2011
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 22, 2011:
Our Proxy Statement and Annual Report on Form 10-K are available free of charge at
www.edocumentview.com/TGIS
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THOMAS GROUP, INC.
5221 N. O'Connor Boulevard
Suite 500
Irving, Texas 75039-3714
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 22, 2011
GENERAL INFORMATION ABOUT THE MEETING
Solicitation of Proxies
Thomas Group, Inc. is furnishing you this proxy statement on behalf of its Board of Directors to solicit proxies in connection
with the Annual Meeting of Stockholders to be held on June 22, 2011 at 9:00 a.m., Central Daylight Time, at our corporate offices located at 5221 N. O'Connor Boulevard, Suite 500,
Irving, Texas 75039.
Internet Availability of Proxy Materials
We are making this proxy statement and our annual report on Form 10-K available to our stockholders primarily via
the Internet, rather than mailing paper copies of these materials to each stockholder. We believe that this process expedites our stockholders' receipt of proxy materials, lowers the costs of the
Annual Meeting and helps to conserve natural resources.
This
proxy statement and our annual report on Form 10-K are available free of charge for viewing or printing at
www.edocumentview.com/TGIS.
On
or about May 13, 2011, we are mailing to each stockholder a Notice of Internet Availability of Proxy Materials. That Notice of Internet Availability contains instructions on
how you can access and review the proxy materials, including your proxy card, on the Internet. You have the option to vote your shares over the Internet or via a toll-free telephone
number. The Notice of Internet Availability contains instructions on how you can vote your shares in either of these manners. Voting authorizations submitted over the Internet or by telephone must be
received by 11:59 p.m., Eastern Daylight Time, on June 21, 2011.
If
you receive a Notice of Internet Availability by mail, you will not receive a paper copy of the proxy materials unless you request one. The Notice of Internet Availability contains
instructions on how you can request and receive a paper copy of those documents, including a paper proxy card, free of charge. If you would like to receive a paper copy of our proxy materials, please
follow the instructions included in the Notice of Internet Availability.
If
you prefer not to vote over the Internet or via telephone and you request a paper copy of the proxy materials and proxy card, you may vote in the traditional manner by signing, dating
and mailing the proxy card in the envelope that will be provided upon your request.
If
your shares are held in "street name" by a bank or brokerage firm, your bank or brokerage firm may provide you with a Notice of Internet Availability. Follow the instructions on that
Notice of Internet Availability to access our proxy materials and vote online or to request a paper copy of our proxy materials. If you received these materials in paper form, the materials include a
voting instruction card so you can instruct your broker, bank or other holder of record how to vote your shares.
Matters to be Acted Upon at the Meeting
As stated in the notice to which this proxy statement is attached, the following matters are to be acted upon at the Annual
Meeting:
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the election to the Board of Directors of four persons to serve as directors until our 2012 Annual Meeting of Stockholders
or until their successors are duly elected and qualified;
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the ratification of the appointment of Hein & Associates LLP, an independent registered public accounting
firm, as our independent auditors for the fiscal year ending December 31, 2011; and
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the transaction of such other business as may properly come before the Annual Meeting or any adjournments or postponements
thereof.
Management
does not intend to present any business at the Annual Meeting for a vote, other than the matters in the notice, and has no information that others will do so. If other matters
requiring a vote of the stockholders are properly presented at the Annual Meeting, it is the intention of the persons named in the accompanying form of proxy to vote the shares represented by the
proxies held by them according to their judgment on those matters.
Record Date and Shares Outstanding
Our Board of Directors has established May 5, 2011 as the record date. All holders of record of shares of our common stock, par
value $.01 per share, at the close of business on that date are entitled to notice of, and to vote at, the Annual Meeting. At the close of business on April 29, 2011, we had outstanding
2,226,553 shares of common stock. Each share of common stock is entitled to one vote.
Quorum and Voting
The presence, in person or by proxy, of holders of a majority of the outstanding shares of common stock entitled to vote as of the
record date is necessary to constitute a quorum at the Annual Meeting. Abstentions and broker "non-votes" will be counted for purposes of determining the presence or absence of a quorum
for the transaction of business. Broker "non-votes" occur when a broker or other nominee does not have discretionary authority to vote the shares with respect to a particular matter and
has not received voting instructions from the beneficial holder with respect to that matter. If a quorum is not present, stockholders entitled to vote and present either in person or represented by
proxy at the Annual Meeting have the power to adjourn the meeting from time to time without notice until a quorum is present or represented. In that case, the persons named in the accompanying form of
proxy intend to vote the shares represented by the proxies held by them for an adjournment. If your shares of common stock are withheld in the election of the nominees for director, however, the proxy
holders will not use their discretion to vote your shares in favor of any adjournment or postponement of the Annual Meeting. At any adjourned meeting at which a quorum is present, any business may be
transacted that might have been transacted at the Annual Meeting as originally notified.
A
plurality of the votes of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote, provided a quorum is present, is required for the election of
directors. Accordingly, if a quorum is present at the Annual Meeting, the four persons receiving the greatest number of votes cast at the Annual Meeting will be elected to serve as directors. Thus,
abstentions and broker "non-votes" will not affect the outcome of the election of directors.
A
majority of the votes of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote, provided a quorum is present, is required to ratify the
appointment of Hein & Associates LLP, an independent registered public accounting firm, as our independent auditors for the fiscal year ending December 31, 2011. In accordance
with Delaware law, abstentions will have the same effect as a vote against the proposal. Although counted for quorum purposes, in accordance with Delaware law, broker "non-votes" will not
be treated as votes cast and will therefore not affect the outcome of the ratification of the appointment of independent registered public accountants.
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Voting by Proxy
The shares of common stock represented by each valid proxy will be voted in accordance with the instructions given on the proxy. If a
valid proxy for a registered holder is received but no instructions are indicated, the proxy will be voted as follows:
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FOR the four nominees to our Board of Directors named in this proxy statement;
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FOR the ratification of the appointment of Hein & Associates LLP, an independent registered public
accounting firm, as our independent auditors for the fiscal year ending December 31, 2011; and
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at the discretion of the persons named in the proxy on any other business that may properly come before the Annual
Meeting.
Any
stockholder has the unconditional right to revoke his or her proxy at any time before it is voted. Any proxy given may be revoked by (1) providing a written notice of
revocation duly signed and delivered to our Secretary prior to the voting of the proxy, (2) executing a later-dated proxy, or (3) voting in person at the Annual Meeting (although
attending the Annual Meeting without executing a ballot or executing a later-dated proxy will not constitute revocation of a proxy).
Expenses of Proxy Solicitation
We will pay the expenses of this proxy solicitation. In addition to the solicitation by mail, some of our officers and regular
employees may solicit proxies personally or by telephone, if deemed necessary. We will request brokers and other fiduciaries to forward proxy soliciting material to the beneficial owners of shares,
which are held of record by the brokers and fiduciaries, and we may reimburse them for reasonable out-of-pocket expenses incurred by them in connection therewith. We may elect
to hire a proxy solicitor to solicit proxies for the Annual Meeting. We estimate the fees and expenses of a proxy solicitor, if any is retained, to be approximately $5,000.
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PROPOSAL NUMBER 1ELECTION OF DIRECTORS
Our Bylaws provide that the number of directors constituting our Board of Directors shall not be less than one and shall be fixed from
time to time exclusively by the Board of Directors. Edward P. Evans, a valued director since 2005, passed away on December 31, 2010. The Board of Directors did not nominate an individual to
fill the vacancy resulting from the death of Mr. Evans, but instead reduced the size of the Board of Directors from five to four members. The remaining four directors listed below will stand
for reelection at the 2011 Annual Meeting of Stockholders for a one year term to hold office until their respective successors are duly elected and qualified or until their earlier death, resignation
or removal. Our Board of Directors has determined that three of the nominees for director, Gen. John T. Chain, Jr. and Messrs. Dorsey R. Gardner and David B. Mathis, are independent in
accordance with the rules of The NASDAQ Stock Market.
The
following table sets forth certain information as to the nominees for directors.
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Name
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Age
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Positions and Offices
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Director Since
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Michael E. McGrath
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Executive Chairman, President & CEO
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2008
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John T. Chain, Jr.
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Director
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1995
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Dorsey R. Gardner
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Director
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2005
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David B. Mathis
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Director
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1998
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The
following biographical information is furnished with respect to each person who is a nominee for election as a director at the 2011 Annual Meeting of Stockholders. Each such person
also currently serves as one of our directors.
Michael E. McGrath, 61,
has served as our President, CEO and Secretary since December 21, 2009 and has served as a member of our
Board of Directors and as Executive Chairman since February 2008. Mr. McGrath served as a member of the board of directors of i2 Technologies, Inc., a publicly traded supply chain
software company, from September 2004 through May 2008 and as its chief executive officer and president from February 2005 through July 2007. In 1976, Mr. McGrath co-founded
Pittiglio Rabin Todd & McGrath (PRTM), a leading management consulting
firm to technology-based companies. He spent 28 years leading PRTM, retiring in July 2004. In addition to the i2 Technologies board of directors, Mr. McGrath served on the board of
directors of Entrust, Inc. (ENTU) from February 2007 until the company was sold in July 2009, and as Chairman of the Board from November 2008 until July 2009. He also served on the board of
Sensable Technologies from before 2000 until March 2009. He served on the board of York Hospital from 2001 to 2010. He has served on the board of the Aidmatrix Foundation since 2006. Prior to
co-founding PRTM, Mr. McGrath worked for PricewaterhouseCoopers, Texas Instruments and McCormack & Dodge. Our Board of Directors believes that Mr. McGrath is well
qualified to serve as a director due to his position as our Executive Chairman, President and Chief Executive Officer, which provides him with intimate knowledge of our
day-to-day operations. Furthermore, Mr. McGrath brings to the Board of Directors a wealth of leadership and consulting industry expertise as a result of his prior
experience leading a management consulting company and a larger public company in a turn-around scenario.
General (Retired) John T. Chain, Jr., 76,
has served as a member of our Board of Directors since May 1995. He previously served as the
Chairman of our Board of Directors from May 1998 until February 2008. He served as an Executive Vice President of Burlington Northern Santa Fe Corporation from 1991 to 1995 and as Special Assistant to
the Chairman of Burlington Northern from November 1995 to March 1996. He served as the President of Quarterdeck Equity Partners, Inc., an investor in the aerospace industry, from June 1996 to
June 2001. General Chain has served as a member of the boards of directors of ConAgra Foods, Inc., Northrop Grumman Corporation, Reynolds American Corporation, RJR Nabisco, Inc., Nabisco
Group Holdings Corp. and Kemper Insurance. From 1986 to 1991, he served as a General (Commander-in-Chief, the Strategic Air Command) in the United States
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Air
Force. Our Board of Directors believes that Gen. Chain is well qualified to serve as a director due to his extensive and diverse leadership experiences, including senior leadership roles in the
United States Air Force and as a director of several large public companies. Furthermore, our Board of Directors believes that Gen. Chain's significant holdings of our outstanding common stock and his
long tenure as a member of our Board of Directors demonstrate his commitment to the success of our company.
Dorsey R. Gardner, 68,
has served as a member of our Board of Directors since June 2005. Mr. Gardner currently serves as President
of Kelso Management Company, Inc., an investment management company, a position he has held since 1980. Mr. Gardner was also a General Partner at Hollybank Investments, LP,
Thistle Investments, LP and Gattonside Investments, LLC (each a private investment fund) from 1994, 1999 and 2000, respectively, until 2002. Prior to 1994, Mr. Gardner spent
15 years at Fidelity Management & Research, including as a Vice-President from 1972 to 1980. Mr. Gardner previously served as a member of the board of directors of
Otologics, LLC and of Echo Nest. He has served as a member of the board of directors of Crane Company since 1989. Our Board of Directors believes Mr. Gardner is well qualified to serve
as a director due to his strong financial expertise gained from his financial leadership roles in a variety of private investment funds, his service as a director of several larger operating
businesses and his active prior involvement as the financial expert on the Audit Committee of our Board of Directors.
David B. Mathis, 73,
has served as a member of our Board of Directors since August 1998. He previously served as Chairman of the Board and
Chief Executive Officer of Kemper Insurance Companies, which has operations in commercial and personal insurance, risk management, and reinsurance, from 1990 to 2003, and currently serves as Chairman
of Lumbermans Mutual Insurance Company, a position he has held since. Mr. Mathis has had a long career with Kemper since 1960 that has included executive assignments with both Kemper Insurance
Companies and as Chief Executive Officer and Chairman of Kemper Corporation, its former publicly-owned affiliate. Mr. Mathis also serves on the board of directors of The Mosaic Company. Our
Board of Directors believes Mr. Mathis is well qualified to serve as a director due to his broad range of business skills and experiences, particularly in the areas of financial and risk
management, as well as his extensive senior executive leadership and management experiences at Kemper Insurance Companies, his service as a director of a larger operating company and his previous
service on our Board of Directors.
While
it is not anticipated that any of the nominees will be unable to serve, if any nominee should decline or become unable to serve as a director for any reason, votes will be cast
instead for a substitute nominee designated by the Board of Directors or, if none is so designated, will be cast according to the judgment of the person or persons voting the proxy.
The Board of Directors unanimously recommends that you vote FOR election of each of the four nominees. Proxies properly executed, dated and returned will be so
voted unless contrary instructions are indicated on the proxy card.
CORPORATE GOVERNANCE
Corporate Governance Materials
We are committed to good corporate governance and to effective communication with our stockholders. The roles, duties and
responsibilities of each committee of our Board of Directors are summarized below. To ensure that our stockholders have access to our governing documents, we provide copies of our Certificate of
Incorporation, Bylaws, Code of Business Conduct and Ethics and the charters of our Compensation and Corporate Governance Committee and our Audit Committee on our website or to any stockholder who
requests them by writing to our Investor Relations Department at 5221 N. O'Connor Boulevard, Suite 500, Irving, Texas 75039-3714. Please see the Corporate Governance section of the
Company Information page of our website at
www.thomasgroup.com
for
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copies
of these documents and any future updates to these documents. Information contained on our website is not incorporated into this proxy statement and does not constitute a part of this proxy
statement.
Board of Directors; Director Independence
The size of our Board of Directors is currently set at four members. Edward P. Evans passed away on December 31, 2010, resulting
in a vacancy on the Board. The Board of Directors did not appoint an individual to fill the resulting vacancy, but instead reduced the size of our Board of Directors. The remaining four members of our
Board of Directors will stand for reelection at our 2011 Annual Meeting of Stockholders. Our Board of Directors has determined that three of the four directors, John T. Chain, Jr.,
Dorsey R. Gardner and David B. Mathis, are independent in accordance with the rules of The NASDAQ Stock Market.
Board Leadership
The roles of Chairman and Chief Executive Officer have been combined beginning in December 2009. The Board has determined that for a
firm of our small size, and given
the leadership and board experience of Michael E. McGrath, it is appropriate for these roles to be combined in a single individual. Our Board of Directors has not appointed a Lead Director. Our
Board of Directors periodically reviews this structure for continued appropriateness.
Risk Oversight
The risks facing Thomas Group change rapidly and must be the attention of all members of our Board of Directors and its committees, as
well as management. For example, our Board of Directors as a whole must review enterprise risk when making decisions regarding our strategies, budgets and financial activities. The Audit Committee of
our Board of Directors also has an essential role in reviewing specific financial and operational risks and management issues. The Charter of the Audit Committee requires that the Audit Committee
discuss with management our major financial risk exposures and the steps management has taken to monitor and control such exposures, including our risk assessment and risk management policies. The
Compensation and Corporate Governance Committee of our Board of Directors must actively assess the risks associated with executive and employee compensation plans. All three of our independent
directors currently serve on both the Audit Committee and the Compensation and Corporate Governance Committee. This position provides them a broad view of the operations of the Company and enables
them to assess and oversee the risks that we face.
Each
member of our executive management team shares in the responsibility of risk assessment and management. In that role, each member of our management team has direct access to our
Board of Directors and its committees to ensure a full and complete communication of risk issues. For example, the Audit Committee routinely meets with the Chief Financial Officer. Meetings of the
Compensation and Corporate Governance Committee routinely included the Vice President of Human Resources until the position was eliminated upon Ms. Stacey's resignation and now include our
Chief Financial Officer who has assumed oversight of human resources.
Board Meetings, Annual Meeting Attendance and Executive Sessions
During 2010, our Board of Directors met five times and acted several times by unanimous written consent. Each director, except
Mr. Gardner and Mr. Evans, attended 100% of these Board of Directors' meetings and the committee meetings on which he served. Mr. Gardner attended 75% of the meetings of each
committee on which he served and 80% of the Board of Directors' meetings. Mr. Evans attended 50% of the meetings of each committee on which he served and 60% of the Board
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of
Directors' meetings. Members of our Board of Directors may attend our Annual Meeting. Last year, other than Mr. McGrath, none of the members of the Board of Directors attended our Annual
Meeting, but each participated telephonically in a Board of Directors meeting immediately following the Annual Meeting.
Each
regularly scheduled meeting of the Board of Directors includes an executive session in which the Board meets without non-members present. At the option of the
independent members of Board of Directors, the Board may meet in these executive sessions without the presence of the Executive Chairman.
Board Committees
Our Bylaws authorize the Board of Directors to appoint such committees as it deems advisable, with each committee having the authority
to perform duties determined by the Board of Directors.
Our
Board of Directors currently has two standing committees, to which it has delegated certain duties and responsibilities. The two standing committees are the Audit Committee and the
Compensation and Corporate Governance Committee.
General Chain and Messrs. Gardner and Mathis are the current members of the Audit Committee of our Board of Directors.
Mr. Mathis became a member of the Audit Committee in 1998. Mr. Gardner became a member of the Audit Committee in 2005. General Chain became a member of the Audit Committee in 2008.
Mr. Gardner serves as Chairman of the Audit Committee. The Audit Committee met four times during 2010.
The
Audit Committee monitors and makes recommendations to our Board of Directors on matters pertaining to our financial management. Among others, the Audit Committee has the following
duties and responsibilities:
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monitoring the adequacy and effectiveness of the internal and external audit functions, control systems, financial
accounting and reporting;
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appointing and monitoring the performance of our independent auditors;
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reviewing and pre
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approving audit and non-audit services
provided by our independent auditors;
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discussing with management our major financial risk exposures and the steps management has taken to monitor and control
such exposures, including our risk assessment and risk management policies;
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investigating any matters brought to its attention within the scope of its duties; and
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overseeing adherence to applicable legal, ethical and regulatory requirements.
For
more information about our Audit Committee, see the "Report of the Audit Committee of the Board of Directors" below in this proxy statement. The Audit Committee operates pursuant to
a charter that was amended and restated by our Board of Directors in March 2011. This charter is available in the Corporate Governance section of the Company Information page of our website at
www.thomasgroup.com.
Our
Board of Directors has determined that each member of the Audit Committee who served during 2010 is "independent" as defined under NASDAQ Marketplace Rule 5605(a)(2), meets
the independence requirements of Rule 10A-3(b)(1) of the Securities Exchange Act of 1934, as amended, as well as the requirements of NASDAQ Marketplace Rule 5605(c)(2),
including a determination that each member is financially literate. Our Board of Directors has determined that Mr. Gardner qualifies as a "financial expert" as defined by the rules of the
Securities and Exchange Commission.
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General Chain and Messrs. Gardner and Mathis are the current members of the Compensation and Corporate Governance Committee of
our Board of Directors. Mr. Mathis became a member of the Compensation and Corporate Governance Committee in 1998. Mr. Gardner became member of the Compensation and Corporate Governance
Committee in 2005. General Chain became a member of the Compensation and Corporate Governance Committee in 2008. General Chain serves as Chairman of the Compensation and Corporate Governance
Committee. The Compensation and Corporate Governance Committee met four times during 2010.
The
Compensation and Corporate Governance Committee functions as both our compensation committee and our nominating committee and has, among others, the following duties and
responsibilities:
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reviewing and evaluating candidates for election to our Board of Directors;
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recommending to our Board of Directors all committee assignments;
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establishing an executive compensation policy, including the determination of annual and long-term
compensation of our executive officers and certain other non-officer employees;
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granting awards pursuant to our equity incentive plans; and
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reviewing the compensation of directors and members of committees of our Board of Directors.
In
the course of fulfilling its duties regarding compensation matters, the Compensation and Corporate Governance Committee works with our Chief Executive Officer to review and make
recommendations to the Board of Directors regarding general compensation goals and guidelines for non-officer employees and the criteria by which bonuses for non-officer
employees are determined. Although the Compensation and Corporate Governance Committee may delegate to one or more officers designated by the Compensation and Corporate Governance Committee the
authority to make equity compensation grants to eligible non-officers, subject to certain restrictions and reporting obligations, currently it has not done so.
When
evaluating director nominees, the Compensation and Corporate Governance Committee generally seeks to identify individuals with diverse, yet complementary backgrounds. Although we
have no formal policy regarding diversity, the Compensation and Corporate Governance Committee considers both the personal characteristics and experience of director nominees, including each nominee's
independence, skills, expertise, time availability, and industry backgrounds. The Compensation and Corporate Governance Committee believes that director nominees should exhibit proven leadership
capabilities and experience at a high level of responsibility within their chosen fields. In addition to business expertise, the Compensation and Corporate Governance Committee requires that director
nominees have the highest personal and professional ethics, integrity and values and, above all, are committed to representing the long-term interests of our stockholders.
When
seeking candidates for director, the Compensation and Corporate Governance Committee may solicit suggestions from incumbent directors, management, stockholders and others. After
conducting an initial evaluation of a prospective candidate, the Compensation and Corporate Governance Committee
will interview that candidate if it believes the candidate might be suitable to be a director. The Compensation and Corporate Governance Committee may also ask the candidate to meet with management.
If the Compensation and Corporate Governance Committee believes a candidate would be a valuable addition to the Board of Directors, it may recommend to the Board of Directors that the candidate be
appointed or elected. The Board of Directors, upon evaluation and review of the candidates recommended by the Compensation and Corporate Governance Committee, will determine whom to recommend to the
stockholders for election at an annual meeting of stockholders.
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In
determining overall compensation for a specific officer, the Compensation and Corporate Governance Committee considers many factors, including the responsibilities and scope of the
officer's particular position, his or her experience and performance in that position, the recent compensation history of the officer (including any special or unusual compensation payments), the
period of time since his or her last increase in total compensation, the expected value of the officer's contribution to our future success and growth, the compensation levels of all employees to
ensure internal pay equity is preserved, executive compensation at certain other companies to ensure that our compensation levels are competitive and our recent overall financial and business
performance.
The
Compensation and Corporate Governance Committee operates pursuant to a charter that was amended and restated by our Board of Directors in April 2009. This charter is available in the
Corporate Governance section of the Company Information page of our website at
www.thomasgroup.com.
Our
Board of Directors has determined that all of the members of the Compensation and Corporate Governance Committee who served during 2010 are "independent" as defined under NASDAQ
Marketplace Rule 5605(a)(2). Our Board of Directors also has determined that each of Messrs. Gardner and Mathis is an "outside director," as defined pursuant to Section 162(m) of
the Internal Revenue Code of 1986, as amended.
Stockholder Nominations for Directors
Our Bylaws provide that a stockholder may nominate a person for election as a director at an annual meeting of stockholders if written
notice of the stockholder's intent to make the nomination has been given to our Secretary not less than 30 days but not more than 60 days
prior to the stockholder meeting, or, if later, the tenth day following the first public announcement of the date of the annual meeting of stockholders.
This
Bylaw provision also requires that any such notice set forth, among other things, the name and address of the stockholder giving the notice, as it appears on our books and records,
and the class and number of shares of our capital stock owned by such stockholder. The notice must also contain such other information regarding the nominee as would be required to be included in a
proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission had the nominee been nominated by the Compensation and Corporate Governance Committee of the Board of
Directors. Such notice must also be accompanied by the written consent of the proposed nominee to the naming of that person in the proxy statement for such year's annual meeting as a nominee and to
serve as a director if elected. If the chairman of the annual meeting of stockholders determines that a nomination has not been made in accordance with these procedures, the chairman will so declare
to the annual meeting of stockholders and the defective nomination will be disregarded. No stockholder has nominated a candidate for election to the Board of Directors at the annual meeting.
If
a stockholder meets the requirements and follows the procedures of the Bylaws to propose a nominee, the Compensation and Corporate Governance Committee will determine whether such
proposed nominee holds qualifications necessary to serve as a member of the Board of Directors. The Compensation and Corporate Governance Committee will evaluate nominees proposed by stockholders
using the same criteria for evaluating nominees referred by management or any other director.
The
Board of Directors, upon evaluation and review of the candidates recommended by the Compensation and Corporate Governance Committee, will determine whom to recommend to the
stockholders for election at an annual meeting of stockholders. The Board of Directors uses the same criteria for evaluating nominees recommended by stockholders as for those referred by management or
any other director. We do not pay and do not anticipate paying any fees to third parties for identifying or evaluating candidates for director.
9
Table of Contents
Stockholder Communications with Directors
Stockholders may communicate with any and all members of the Board of Directors by transmitting correspondence by mail or facsimile
addressed to one or more directors by
name (or to the Chairman, for a communication addressed to the entire Board of Directors) at the following address and fax number:
Name
of Director(s)
c/o Secretary
Thomas Group, Inc.
5221 N. O'Connor Boulevard, Suite 500
Irving, Texas 75039-3714
Fax: (972) 443-1742
The
Secretary will forward all communications to the Board of Directors or to the identified director(s) as soon as practicable, although communications that are abusive, in bad taste or
that present safety or security concerns may be handled differently. If multiple communications are received on a similar topic, the Secretary may, in his or her discretion, forward only
representative correspondence.
Code of Ethics
We have adopted a "code of ethics," as defined in Item 406(b) of Regulation S-K. Our code of ethics, known as
our Code of Business Conduct and Ethics, applies to all our officers and employees, including our principal executive officer, principal financial officer, principal accounting officer and controller,
and also applies to all members of our Board of Directors. We have posted our Code of Business Conduct and Ethics in the Corporate Governance section of the Company Information page of our website at
www.thomasgroup.com.
In addition, we intend to satisfy the disclosure requirements of Item 5.05 of Form 8-K regarding any
amendment to, or waiver from, a provision of our Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or
controller and relates to any element of the definition of code of ethics set forth in Item 406(b) of Regulation S-K by posting such information on our website,
www.thomasgroup.com.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation and Corporate Governance Committee is or has been an officer or employee of us or any of our subsidiaries
or had any relationship requiring disclosure pursuant to Item 404 of Regulation S-K. None of our executive officers served as a member of the compensation committee (or other
board committee performing similar functions
or, in the absence of any such committee, the entire board of directors) of another corporation, one of whose executive officers served on our Compensation and Corporate Governance Committee or as one
of our directors. None of our executive officers served as a director of another corporation, one of whose executive officers served on our Compensation and Corporate Governance Committee.
10
Table of Contents
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following biographical information is furnished with respect to each person who currently serves as one of our executive officers
but does not serve on our Board of Directors. The information includes present position with the company, period served as an officer, and other business experience.
Frank W. Tilley
,
65
, has served as our Chief Financial Officer, Treasurer and Vice
President since August 2010. From April 2008 until August 2010 he served as our Interim Chief Financial Officer and Vice President. In addition to this role at Thomas Group, Mr. Tilley was a
member of the executive services firm Tatum LLC, a national firm which provides financial and technology executives for other organizations on a permanent, interim or part-time
basis from 2003 through July 2010. On January 31, 2010, Tatum LLC was sold and Mr. Tilley ceased to hold any ownership interest in that firm. While Mr. Tilley was with
Tatum, he completed a number of consulting assignments as well as served as interim chief financial officer for ATI Acquisition Company and its subsidiaries, an Arlington, Texas based education
company, and as interim chief financial officer of Carreker Corporation, a public enterprise software and consulting firm in Dallas, Texas. Prior to joining Tatum, Mr. Tilley served as Director
of Finance (principal financial officer) of DiCon Fiberoptics, Inc., a Richmond, California based major manufacturer of passive fiberoptic components for the telecommunications industry. Prior
to his work at DiCon, Mr. Tilley served as Chief Financial Officer and Executive Vice President of
Sentry Group Services, Inc., a Fort Worth, Texas based funeral home and cemetery company. Previously he served as an independent consultant and held several positions with JPMorgan Chase Bank
and predecessors in Dallas, Texas.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial ownership of our common stock, par value $0.01 per share,
as of April 27, 2011, by:
-
-
each of our directors;
-
-
each executive officer named in the Summary Compensation Table on page 12; and
-
-
all of our executive officers and directors as a group.
-
-
all persons who are known by us to be beneficial owners of 5% or more of our outstanding common stock.
|
|
|
|
|
|
|
|
Name and Address of Beneficial Owner
|
|
Shares Owned(1)
|
|
Percent of Class
|
|
John T. Chain, Jr.**
|
|
|
648,586
|
|
|
29.13
|
%
|
Dorsey R. Gardner**
|
|
|
74,064
|
|
|
3.33
|
%
|
David B. Mathis**
|
|
|
3,376
|
|
|
*
|
|
Michael E. McGrath**
|
|
|
155,000
|
(2)
|
|
6.96
|
%
|
Frank W. Tilley**
|
|
|
0
|
|
|
*
|
|
All Directors and Executive Officers as a Group (5 persons)
|
|
|
881,026
|
|
|
39.57
|
%
|
Additional 5% or more Beneficial Owners
|
|
|
|
|
|
|
|
Estate of Edward P. Evans and affiliates c/o Fiduciary Trust Company International, Attn: Michael Mariani, 600 Fifth Avenue, 6th Floor,
New York, NY 10020-2302
|
|
|
780,661
|
(3)
|
|
35.06
|
%
|
-
*
-
Indicates
less than one percent (1%)
-
**
-
c/o
Thomas Group, Inc., 5221 N. O'Connor Blvd, Suite 500, Irving, TX 75039
11
Table of Contents
-
(1)
-
Except
as otherwise indicated, the persons named in the table possess sole voting and investment power with respect to all shares of common stock shown as
beneficially owned by them. Beneficial ownership as reported in the above table has been determined according to Rule 13d-3 of the Securities Exchange Act of 1934, as amended. The
percentages shown are calculated based on 2,226,553 shares of common stock outstanding on April 27, 2011. Except as otherwise noted, the numbers and percentages shown include the shares
actually owned as of April 27, 2011, and the shares that the identified person or group has the right to acquire within 60 days after that date. In calculating the percentage ownership,
all shares that the identified person or group has the right to acquire within 60 days after April 27, 2011 upon exercise of options are deemed to be outstanding for the purpose of
computing the percentage of shares owned by that person or group, but are not deemed to be outstanding for the purpose of computing the percentage of shares owned by any other person or group.
-
(2)
-
Includes
60,000 shares of restricted stock granted to Mr. McGrath on March 15, 2011, with vesting of 15,000 shares at the end of each calendar
quarter, contingent upon his being employed by the company at the end of such calendar quarter. On March 31, 2011, the first 15,000 shares vested and were issued to Mr. McGrath.
-
(3)
-
Consists
of 621,557 shares held directly by the estate of Mr. Evans as reported on Schedule 13D filed with the SEC on April 22, 2011;
85,454 shares held by the Edward P. Evans Foundation; 25,650 shares held by Fiduciary Trust Co. International, custodian for the Edward P. Evans IRA; and 48,000 shares held by the Merrick
Gillies UGMA MA. Power to vote or dispose of shares held by the Edward P. Evans Foundation, Fiduciary Trust Co. International, custodian for the Edward P. Evans IRA, and the Merrick Gillies
UGMA MA, were held by Mr. Evans prior to his death. As reported by the estate of Mr. Evans on the Schedule 13D filing, pursuant to the Last Will and Testament of Mr. Evans,
following certain pre-residuary bequests of the property of the estate, the balance of the estate (including the shares of our common stock, to the extent not sold by the estate) is to be
distributed to the Edward P. Evans Foundation (the "Foundation"). We have not been able to determine the disposition or voting authority of shares held in the Edward P. Evans IRA, the Edward P. Evans
Foundation and by the Merrick Gillies UGMA MA as of April 27, 2011.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934, as amended, requires certain officers and directors and any persons
who own more than 10% of our common stock outstanding to file forms reporting their initial beneficial ownership of shares and subsequent changes in that ownership with the Securities and Exchange
Commission. Based on our review of such forms furnished to us and written representations from reporting persons, we believe that during 2010 all of such reporting persons complied with the
Section 16(a) filing requirements applicable to them, except that one Form 4 for Michael E. McGrath's award of restricted shares in March, 2010 was filed late.
12
Table of Contents
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth compensation information with respect to the 2010, 2009 and 2008 fiscal years for (i) the one
person who served as our Chief Executive Officer during 2010 and 2009 and (ii) the two other persons who were serving as our most highly compensated executive officers at the end of the 2010
fiscal year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
(a)
|
|
Year
(b)
|
|
Salary
($)
(c)
|
|
Bonus
($)
(d)
|
|
Stock
Awards
($)(1)
(e)
|
|
Option
Awards
($)(1)
(f)
|
|
Non-
Equity
Incentive
Plan
Compensation
($)
(g)
|
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
(h)
|
|
All
Other
Compensation
($)(4)
(i)
|
|
Total
($)
(j)
|
|
Michael E. McGrath(2)(3)
|
|
|
2010
|
|
|
325,293
|
|
|
|
|
|
244,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
569,793
|
|
|
Executive Chairman,
|
|
|
2009
|
|
|
330,000
|
|
|
|
|
|
(366,929
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(36,929
|
)
|
|
President and Chief Executive Officer
|
|
|
2008
|
|
|
287,692
|
|
|
69,283
|
|
|
707,929
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,064,904
|
|
Frank W. Tilley(3)(5)
|
|
|
2010
|
|
|
236,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,974
|
|
|
240,224
|
|
|
Chief Financial Officer,
|
|
|
2009
|
|
|
294,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,194
|
|
|
299,194
|
|
|
Treasurer and Vice President
|
|
|
2008
|
|
|
203,916
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,126
|
|
|
208,042
|
|
Robin R. Stacey(3)(6)
|
|
|
2010
|
|
|
142,154
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
667
|
|
|
142,821
|
|
|
former Vice President,
|
|
|
2009
|
|
|
160,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,547
|
|
|
161,547
|
|
|
Human Resources
|
|
|
2008
|
|
|
83,077
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
586
|
|
|
83,663
|
|
-
(1)
-
The
amounts in columns (e) and (f) reflect the aggregate grant date fair value of equity-based awards pursuant to our equity compensation
plans determined in accordance with ASC 718,
Stock Compensation
. Multi-year equity incentive plan awards were made in March 2008 for the years
2008, 2009 and 2010 for Michael E. McGrath with a predetermined number of shares each year. The vesting for each year was subject to meeting or exceeding minimum performance criteria to be set by the
Board of Directors in the first quarter of each applicable year. No shares vested for Mr. McGrath. Mr. McGrath's multi-year awards were cancelled in December 31, 2009.
In 2010 Mr. McGrath received an additional stock grant award which vested quarterly during the year. Under ASC 718,
Stock Compensation
the
applicable expense is determined based on the closing price for our stock on the date (the "grant date") when the performance criteria is set by the Board of Directors for the grant.
-
(2)
-
On
December 21, 2009, Mr. McGrath, our Executive Chairman, assumed the additional roles of President and Chief Executive Officer. In
connection therewith, Mr. McGrath agreed to increase his time commitment to the company from up to onethird of his time to substantially full time at his then existing salary of
$330,000 per year. In November 2010, he was subject to the temporary partial furlough and his annual base compensation was reduced to $250,000.
-
(3)
-
Effective
November 1, 2010, we implemented temporary partial furloughs and salary reductions for members of our management team in order to reduce
expenses. Mr. McGrath, Mr. Tilley and Ms. Stacey became subject to a flexible work schedule and adjusted compensation based on job requirements, including utilization on client
engagements.
-
(4)
-
The
2010 amounts for Mr. Tilley represent a medical insurance allowance of $2,994 and 401(k) plan matching contributions of $980. The 2009 amounts
for Mr. Tilley represent a medical insurance allowance of $2,994 and 401(k) plan matching contributions of $2,200. The 2008 amounts for Mr. Tilley represent a medical insurance allowance
of $2,076 and 401(k) plan matching contributions of $2,050.
-
(5)
-
Mr. Tilley
joined Thomas Group on April 25, 2008. Through January 2010 he was a member of Tatum LLC, an executive services firm which
provides full-time, part-time, and interim executives for organizations. In connection with the hiring of Mr. Tilley, we entered into an executive services agreement
with Tatum LLC for his services. In addition to Mr. Tilley's compensation as shown above, Tatum LLC received additional fees of $110,008, $126,000 and $87,341 for
Mr. Tilley's services to Thomas Group in 2010, 2009 and 2008, respectively. His ownership interest in Tatum LLC was less than 0.082% in 2008, 2009, and January 2010. On
January 31, 2010, Tatum LLC was sold and Mr. Tilley ceased to hold any ownership interest in that firm. Effective August 2010, the contract for Mr. Tilley's services from
Tatum LLC was terminated by mutual agreement in exchange for payment of a cancellation fee and Mr. Tilley was employed as the Chief Financial
13
Table of Contents
Officer,
Treasurer and Vice President with an annual base compensation of $240,000. In November 2010, he was subject to the temporary partial furlough and his annual base compensation was reduced to
$150,000.
-
(6)
-
Ms. Stacey
joined Thomas Group on June 2, 2008. In November 2010, she was subject to the temporary partial furlough and her annual base
compensation was reduced to $96,000. Ms. Stacey resigned to join another firm effective December 2, 2010. She received an additional payment of $3,500 at that time to provide consulting
services to us through March 31, 2011.
Compensation Consultants
Neither we nor our Board of Directors has employed a compensation consultant for 2008, 2009 or 2010. The Compensation and Corporate
Governance Committee under its charter has the sole authority to retain and terminate any compensation advisory firm engaged to assist in developing compensation programs for our officers and
employees, including the sole authority to approve any compensation advisory firm's fees and other retention terms.
Outstanding Equity Awards at Fiscal Year-End 2010
The following table sets forth certain information with respect to equity awards outstanding at December 31, 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
Name
(a)
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
(b)
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
(c)
|
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
(d)
|
|
Option
Exercise
Price
($)
(e)
|
|
Option
Expiration
Date
(f)
|
|
Number of
Shares or
Units of
Stock
That Have
Not Vested
(#)
(g)
|
|
Market
Value of
Shares or
Units of
Stock
That Have
Not Vested
($)
(h)
|
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
(#)
(i)
|
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
($)
(j)
|
|
Michael E. McGrath, Executive Chairman, President, and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Frank W. Tilley, Interim Chief Financial Officer and Vice President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robin R. Stacey, former Vice President, Human Resources
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
No executive officer had any equity awards outstanding at December 31, 2010.
14
Table of Contents
Potential Payments upon Termination
On March 3, 2011, the Compensation and Corporate Governance Committee of our Board of Directors adopted a retention pay program
for certain of our officers and employees in order to help preserve the continuity of our operations and management. Under the retention pay program, each of Michael E. McGrath, our Executive
Chairman, President and Chief Executive Officer, and Frank Tilley, our Chief Financial Officer, Vice President and Treasurer, will be entitled to receive a lump sum payment equal to six months of his
then-current base salary if we terminate his employment for any reason other than Cause. "Cause" means the employee's:
-
-
repeated and willful failure to perform one or more of his essential duties and responsibilities to us in a satisfactory
manner;
-
-
repeated and willful failure to follow our lawful and reasonable directives;
-
-
material violation of any of our written policies;
-
-
commission of any act of fraud, embezzlement, dishonesty or any other willful misconduct that has caused or is reasonably
expected to result in material injury to our company;
-
-
unauthorized use or disclosure of any of our proprietary information or trade secrets; or
-
-
willful breach of any of his obligations under any written agreement or covenant with us.
The
retention pay program remains in effect through the end of 2012. At that time the program will expire and no payments under this program will be payable for any officer or employee
whose employment is terminated after that date.
DIRECTOR COMPENSATION
Directors who also are employees are not paid any fees or other compensation for service as members of the Board of Directors or any of
its committees. Mr. McGrath, our Executive Chairman of the Board, was the only director who was an employee of Thomas Group during 2010, and his compensation is included above in the Summary
Compensation Table. As of July 1, 2009, all director retainer payments were suspended. Directors also received reimbursement for out-of-pocket expenses incurred in
connection with their service on the Board of Directors.
Director Compensation Table
The following table sets forth certain information with respect to our non-employee director compensation during the fiscal
year ended December 31, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
(a)
|
|
Fees
Earned or
Paid in
Cash
($)
(b)
|
|
Stock
Awards
($)
(c)
|
|
Option
Awards
($)
(d)
|
|
Non-Equity
Incentive Plan
Compensation
($)
(e)
|
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
(f)
|
|
All Other
Compensation
($)
(g)
|
|
Total
($)
(h)
|
|
John T. Chain, Jr.
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
Edward P. Evans
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
Dorsey R. Gardner
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
David B. Mathis
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
Directors
were reimbursed for travel expenses and out of pocket expenses related to travel to meetings of the Board of Directors in accordance with our standard travel and expense
policies.
15
Table of Contents
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since the beginning of 2010, we have not been a participant in any transaction that involved more than $120,000 and in which any
executive officer, director, nominee for director, 5% stockholder or any of their immediate family members had or will have a direct or indirect material interest. The preceding statement does not
address compensation paid in connection with employment or service as a member of our Board of Directors.
We
believe that all transactions between us and our officers, directors, nominees, principal stockholders and other affiliates have been on terms no less favorable to us than could be
obtained from unaffiliated third parties.
While
we have no formal written policy regarding review of related party transactions, the Audit Committee of our Board of Directors reviews all related party transactions for potential
conflict of interest situations on an ongoing basis and approves any such transactions, including those types of transactions listed in Item 404 of Regulation S-K. Any such
transaction may be approved alternatively by another independent body of the Board of Directors in accordance with NASDAQ Marketplace Rule 5630(a).
16
Table of Contents
PROPOSAL NUMBER 2RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our Audit Committee has appointed Hein & Associates LLP to audit our annual financial statements for the year ending
December 31, 2011. Hein & Associates LLP audited our financial statements for 2010.
Representatives
of Hein & Associates LLP will be present at the annual meeting and will have the opportunity to make a statement if they desire to do so. These
representatives also will be available to respond to appropriate questions.
The
proposal to ratify the appointment of Hein & Associates LLP, independent registered public accounting firm, as our independent auditors for the fiscal year ending
December 31, 2011 will be approved if it receives the affirmative vote of a majority of the shares of common stock present in person or represented by proxy at the annual meeting and entitled
to vote on the proposal.
The Board of Directors unanimously recommends that you vote FOR ratification of the appointment of Hein & Associates LLP. Proxies properly executed,
dated and returned will be so voted unless contrary instructions are indicated on the proxy card.
PRINCIPAL ACCOUNTING FEES AND SERVICES
All of the services rendered to us by Hein & Associates LLP during 2010 were pre-approved by the Audit
Committee. Hein & Associates LLP has provided services to us in the following categories and amounts:
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2010
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2009
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Audit Fees(1)
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$
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92,522
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$
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98,099
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Audit Related Fees(2)
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5,800
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19,000
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Tax Fees(3)
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All Other Fees(4)
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1,927
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Total Fees
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$
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98,322
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$
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119,026
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(1)
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Audit Fees
These are fees for professional services performed by Hein &
Associates LLP for the audit of our annual financial statements, review of financial statements included in our Form 10-Q filings, and services that are normally provided in
connection with statutory regulatory filings or engagements.
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(2)
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Audit Related Fees
These are fees for assurance and related services performed by Hein &
Associates LLP that are reasonably related to the performance of the audit or review of our financial statements. This includes employee benefit and compensation plan audits and attestations by
Hein & Associates LLP that are not required by statute and consulting on financial accounting and reporting standards.
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(3)
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Tax Fees
There were no such fees paid in 2010 or 2009 to Hein & Associates LLP.
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(4)
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All Other Fees
These are fees for other permissible work performed by Hein &
Associates LLP that do not meet the above category descriptions. In 2009, these fees related to Audit Committee meetings and the annual meetings of stockholders.
Pre-Approval Policy
The Audit Committee's guidelines with respect to pre-approval of audit and non-audit services are summarized
below.
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Table of Contents
The Audit Committee is required to pre-approve the audit and non-audit services performed by our independent
auditor in order to assure that the provision of such services does not impair the auditor's independence. Unless a type of service to be provided by the independent auditor has received general
pre-approval, it will require specific pre-approval by the chairman of the Audit Committee. Any proposed service exceeding pre-approved cost levels requires
specific pre-approval by the Audit Committee.
The
Audit Committee may delegate pre-approval authority to one or more of its members. The member or members to whom such authority is delegated must report any
pre-approval decisions to the Audit Committee at its next scheduled meeting.
The annual audit services engagement terms and fees are subject to the specific pre-approval of the Audit Committee. The
Audit Committee approves, if necessary, any changes in terms, conditions and fees resulting from changes in audit scope, company structure or other matters. In addition to the annual audit services
engagement specifically approved by the Audit Committee, the Audit Committee may grant general pre-approval for other audit services, which are those services that only the independent
auditor reasonably can provide.
Audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of our
financial statements and that are traditionally performed by the independent auditor. The Audit Committee believes that the provision of audit-related services does not impair the independence of the
auditor.
The Audit Committee believes that the independent auditor can provide tax services to us, such as tax compliance, tax planning and tax
advice without impairing the auditor's independence. However, we currently use another firm to provide most or all of these services.
The Audit Committee may grant pre-approval to those permissible non-audit services classified as "all other
services" that it believes would not impair the independence of the auditor.
Pre-approval of fee levels for all services to be provided by the independent auditor are established periodically by the
Audit Committee. Any proposed services exceeding these levels require specific pre-approval by the Audit Committee.
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Table of Contents
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee is appointed by the Board of Directors and operates pursuant to a formal written charter that was amended and
restated by the Board of Directors in March 2011. The Audit Committee charter provides that the Audit Committee shall have at least two directors, all of whom are independent as defined by the rules
and regulations of the Securities and Exchange Commission and the rules of The NASDAQ Stock Market. The Audit Committee currently has three members. The Board of Directors has determined that each of
the members of the Audit Committee, Gen. Chain and Messrs. Gardner and Mathis, is independent. In addition, the Board of Directors has determined that Mr. Gardner is an "audit committee
financial expert" as such term is defined by the rules and regulations of the Securities and Exchange Commission.
The
Audit Committee reviews the company's financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for the financial statements,
internal controls and the quality and integrity of the reporting process. The company's independent auditors are responsible for conducting an audit, and based on that audit, expressing an opinion on
the company's consolidated financial statements.
In
this context, the Audit Committee has reviewed the audited consolidated financial statements and the quarterly condensed consolidated financial statements for 2010, and has discussed
the financial statements with management and Hein & Associates LLP, the company's independent registered public accounting firm. The Audit Committee has discussed with Hein &
Associates LLP the matters required to be discussed by
Statement on Auditing Standards No. 61
, as amended
(
Communication with Audit Committees
), as adopted by the Public Company Accounting Oversight Board. The Audit Committee has received from Hein &
Associates LLP the written disclosures and the letter required by applicable
requirements of the Public Company Accounting Oversight Board regarding the independent accountant's communications with the Audit Committee concerning independence, and has discussed with
Hein & Associates LLP its independence from the company and its management. Additionally, the Audit Committee has selected Hein & Associates LLP for the audit of the 2011
financial statements.
The
Audit Committee's responsibility is to monitor and review these processes. It is not the Audit Committee's duty or its responsibility to conduct auditing or accounting reviews or
procedures. The members of the Audit Committee are not employees of the company and may not be, and may not represent themselves to be or to serve as, accountants or auditors by profession or experts
in the fields of accounting or auditing. Therefore, the Audit Committee has relied, without independent verification, on management's representation that the financial statements have been prepared
with integrity and objectivity and in conformity with accounting principles generally accepted in the United States of America and on the representations of the company's independent auditors included
in their report on the company's financial statements. The Audit Committee's oversight does not provide it with an independent basis to determine that management has maintained appropriate accounting
and financial reporting principles or policies, or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations.
Furthermore, the Audit Committee's considerations and discussions with management and the independent auditors do not assure that the company's financial statements are presented in accordance with
generally accepted accounting principles, that the audit of the company's financial statements has been carried out in accordance with generally accepted auditing standards or that the company's
independent accountants are in fact "independent."
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Table of Contents
Based
on the Audit Committee's discussions with management and Hein & Associates LLP, the Audit Committee's review of the representations of management, and the report of
Hein & Associates LLP, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the company's Annual Report on
Form 10-K for the year ended December 31, 2010.
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Respectfully submitted,
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Audit Committee
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Dorsey R. Gardner, Chairman
John T. Chain, Jr.
David B. Mathis
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Pursuant to SEC rules, the foregoing Audit Committee Report is not deemed "filed" with the SEC and is not incorporated by reference into our Annual Report on
Form 10-K.
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Table of Contents
STOCKHOLDER PROPOSALS AND ADVANCE NOTICE PROCEDURES
In order for stockholder proposals to receive consideration for inclusion in our proxy statement for our annual meeting of stockholders
to take place in 2012, such proposals must be written, must meet the requirements set forth in the rules and regulations of the Securities and Exchange Commission, and must be received at our offices
at 5221 N. O'Connor Boulevard, Suite 500, Irving, Texas, 75039-3714, Attention: Secretary, by January 14, 2012.
Our
Bylaws establish an advance notice procedure with regard to certain matters, including stockholder proposals (other than through inclusion in the proxy statement) and nominations of
individuals for election to the Board of Directors. In general, notice of a director nomination for an annual meeting must be received by us not less than 30 but not more than 60 days before
the date of the meeting and must contain specified information and conform to certain requirements, as set forth in the Bylaws. We expect to hold our 2012 annual meeting on or about June 20,
2012. If you wish to submit a stockholder proposal at the annual meeting, other than through inclusion in the proxy statement, you must notify us prior to March 29, 2012. If you do not notify
us of your proposal by that date, we will exercise our discretionary voting power on that proposal.
In
addition, if you submit a proposal outside of Rule 14a-8 of the Securities Exchange Act of 1934 for the 2012 annual meeting, and the proposal fails to comply with
the advance notice procedure prescribed by our Bylaws, then our proxy or proxies may confer discretionary authority on the persons being appointed as proxies on behalf of management to vote on the
proposal.
OTHER MATTERS
Our Annual Report on Form 10-K for the fiscal year ended December 31, 2010, which includes financial
statements, accompanies this proxy statement and is available free of charge for viewing or printing at
www.edocumentview.com/TGIS
. The Annual Report
does not form a part of this proxy statement or the materials for the solicitation of proxies to be voted at the annual meeting.
A copy of our Annual Report on Form 10-K will be furnished at no charge to each person to whom a proxy statement is delivered upon receipt of a
written request of such person addressed to Thomas Group, Inc., 5221 N. O'Connor Boulevard, Suite 500, Irving, Texas 75039-3714, telephone (972) 869-3400.
We also will furnish our Annual Report on Form 10-K to any "beneficial owner" of such securities at no charge upon receipt of a written request, addressed to us, containing a good
faith representation that, at the record date, such person was a beneficial owner of our securities entitled to vote at the annual meeting. Copies of any exhibit to the Annual Report on
Form 10-K will be furnished upon the payment of a reasonable fee.
Our
Board of Directors is not aware of any matter, other than the matters described above, to be presented for action at the annual meeting. However, if any other proper items of
business should come before the annual meeting, it is the intention of the person or persons acting under the enclosed form of proxy to vote in accordance with their best judgment on such matters.
Information
contained in this proxy statement relating to the occupations and security holdings of our directors and officers is based upon information received from the individual
directors and officers.
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By Order of the Board of Directors,
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Michael E. McGrath
Executive Chairman, President and
Chief Executive Officer
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Irving,
Texas
April 29, 2011
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Table of Contents
PROXY AND NOTICE OF INTERNET AVAILABILITY
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Using a black
ink pen, mark your votes with an X as shown in this example. Please do not
write outside the designated areas. X 01C17B 1 U P X + Annual Meeting Proxy
Card . + Change of Address Please print new address below. 01 - John T.
Chain, Jr. 02 - Dorsey R. Gardner 03 - David B. Mathis 04 - Michael E.
McGrath Authorized Signatures This section must be completed for your vote
to be counted. Date and Sign Below C Please sign exactly as name appears
hereon. Joint owners should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. Signature
1 Please keep signature within the box. Signature 2 Please keep signature
within the box. Date (mm/dd/yyyy) Please print date below. B Non-Voting
Items A Proposals The Board of Directors recommends a vote FOR all the
nominees listed and FOR Proposal 2. 1. Proposal to elect five Directors,
Nominees: For Against Abstain 2. Proposal to ratify the appointment of Hein
& Associates LLP, independent registered public accounting firm, as the
Companys independent auditors for the fiscal year ending December 31, 2011.
01 02 03 04 Mark here to WITHHOLD vote from all nominees Mark here to vote
FOR all nominees For All EXCEPT - To withhold a vote for one or more
nominees, mark the box to the left and the corresponding numbered box(es) to
the right. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the Annual Meeting. This Proxy
will be voted at the Annual Meeting or any adjournment or postponement
thereof as specified. IMPORTANT ANNUAL MEETING INFORMATION MR A SAMPLE (THIS
AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND
MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE
AND MR A SAMPLE AND 000000000.000000 ext 000000000.000000 ext
000000000.000000 ext 000000000.000000 ext 000000000.000000 ext
000000000.000000 ext C123456789 C 1234567890 J N T 1 1 5 8 9 0 1 1234 5678
9012 345 000004 MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD
5 ADD 6 ENDORSEMENT_LINE SACKPACK IF YOU HAVE NOT VOTED VIA THE INTERNET OR
TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION
IN THE ENCLOSED ENVELOPE. Electronic Voting Instructions You can vote by
Internet or telephone! Available 24 hours a day, 7 days a week! Instead of
mailing your proxy, you may choose one of the two voting methods outlined
below to vote your proxy. VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE
BAR. Proxies submitted by the Internet or telephone must be received by 11:59
p.m., Eastern Daylight Time, on June 21, 2011. Vote by Internet Log on to the
Internet and go to www.envisionreports.com/TGIS Follow the steps outlined on
the secured website. Vote by telephone Call toll free 1-800-652-VOTE (8683)
within the USA, US territories & Canada any time on a touch tone
telephone. There is NO CHARGE to you for the call. Follow the instructions
provided by the recorded message.
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THIS PROXY IS
SOLICITED BY THE BOARD OF DIRECTORS The undersigned hereby appoints Michael
McGrath and Frank Tilley, and each of them with full power of substitution,
proxies of the undersigned, with all the powers that the undersigned would
possess if personally present to cast all votes that the undersigned would be
entitled to vote at the Annual Meeting of Stockholders of Thomas Group, Inc.
(the Company) to be held on Wednesday, June 22, 2011, at the principal
executive offices of the Company, located at 5221 N. OConnor Boulevard,
Suite 500, Irving, Texas at 9:00 A.M., Central Time, and any and all
adjournments or postponements thereof, including (without limiting the
generality of the foregoing) to vote and act as stated on the reverse side.
This Proxy hereby revokes all prior proxies given with respect to the shares
of the undersigned. YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
PROPOSALS SET FORTH ON THE REVERSE SIDE. If you vote your proxy by Internet
or by telephone, you do NOT need to mail back your proxy card. You can
access, view and download this years Annual Report on Form 10-K and Proxy
Statement at www.edocumentview.com/TGIS. Please complete, date, sign and mail
this Proxy promptly in the enclosed envelope. No postage is required for
mailing in the United States. SEE REVERSE SIDE . Proxy THOMAS GROUP, INC.
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE
PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
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www.envisionreports.com/TGIS
Step 1: Go to www.envisionreports.com/TGIS to view the materials. Step 2:
Click on Cast Your Vote or Request Materials. Step 3: Follow the instructions
on the screen to log in. 01C19B + + Important Notice Regarding the Availability
of Proxy Materials for the Thomas Group, Inc. Stockholder Meeting to be Held
on June 22, 2011 Under new Securities and Exchange Commission rules, you are
receiving this notice that the proxy materials for the annual stockholders
meeting are available on the Internet. Follow the instructions below to view
the materials and vote online or request a copy. The items to be voted on and
location of the annual meeting are on the reverse side. Your vote is
important! This communication presents only an overview of the more complete
proxy materials that are available to you on the Internet. We encourage you
to access and review all of the important information contained in the proxy
materials before voting. The proxy statement and annual report on Form 10-K are
available at: Easy Online Access A Convenient Way to View Proxy Materials
and Vote When you go online to view materials, you can also vote your shares.
Step 4: Make your selection as instructed on each screen to select delivery
preferences and vote. Obtaining a Copy of the Proxy Materials If you want
to receive a paper or e-mail copy of these documents, you must request one.
There is no charge to you for requesting a copy. Please make your request for
a copy as instructed on the reverse side on or before June 13, 2011 to
facilitate timely delivery. . Stockholder Meeting Notice IMPORTANT ANNUAL
MEETING INFORMATION 1 1 5 8 9 0 C 1234567890 1234 5678 9012 345 000004 MR A
SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6
ENDORSEMENT_LINE SACKPACK
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Heres how to
order a copy of the proxy materials and select a future delivery preference:
Paper copies: Current and future paper delivery requests can be submitted via
the telephone, Internet or email options below. Email copies: Current and future
email delivery requests must be submitted via the Internet following the
instructions below. If you request an email copy of current materials you
will receive an email with a link to the materials. PLEASE NOTE: You must use
the number in the shaded bar on the reverse side when requesting a set of
proxy materials. Internet Go to www.envisionreports.com/TGIS. Click Cast
Your Vote or Request Materials. Follow the instructions to log in and order a
paper or email copy of the current meeting materials and submit your
preference for email or paper delivery of future meeting materials. Telephone
Call us free of charge at 1-866-641-4276 using a touch-tone phone and
follow the instructions to log in and order a paper copy of the materials by
mail for the current meeting. You can also submit a preference to receive a
paper copy for future meetings. Email Send email to
investorvote@computershare.com with Proxy Materials Thomas Group, Inc. in
the subject line. Include in the message your full name and address, plus the
number located in the shaded bar on the reverse, and state in the email that
you want a paper copy of current meeting materials. You can also state your
preference to receive a paper copy for future meetings. To facilitate timely
delivery, all requests for a paper copy of the proxy materials must be
received by June 13, 2011. Stockholder Meeting Notice Thomas Group, Inc.s
Annual Meeting of Stockholders will be held on June 22, 2011 at the principal
executive offices of the Company, located at 5221 N. OConnor Boulevard,
Suite 500, Irving, Texas at 9:00 A.M. Central Time. Proposals to be voted on
at the meeting are listed below along with the Board of Directors
recommendations. The Board of Directors recommends that you vote FOR the
following proposals: 1. Proposal to elect the four persons listed in the
proxy statement to serve as directors until the 2012 Annual Meeting of
Stockholders or until their successors are duly elected and qualified. 2.
Proposal to ratify the appointment of Hein & Associates LLP, independent
registered public accounting firm, as the Companys independent auditors for
the fiscal year ending December 31, 2011. Note: At the Annual Meeting of
Stockholders, such other business as may properly come before the meeting or
any adjournments or postponements thereof will be considered. PLEASE NOTE
YOU CANNOT VOTE BY RETURNING THIS NOTICE. To vote your shares you must vote
online or request a paper copy of the proxy materials to receive a proxy
card. If you wish to attend and vote at the meeting, please bring this notice
with you. You may obtain directions to the meeting location by calling (972)
869-3400. 01C19B
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