Duties and Responsibilities of the Compensation and
Corporate Governance Committee of Thomas Group, Inc.

The Compensation and Corporate Governance Committee (the “Committee”) of Thomas Group, Inc. (the “Company”) shall have the following duties and responsibilities, subject to oversight and approval by the full Board of Directors (the “Board”).

The Committee shall meet at least once a year at the call of the chairman of the Committee.

Each member of the Committee shall have one vote. A quorum of the Committee shall consist of not less than three (3) members. The Committee shall be authorized to take any permitted action only by the affirmative vote of a majority of the Committee members present at any meeting at which a quorum of its members present, or by the unanimous written consent of all of the Committee members.

If practicable, as so determined by the Board of Directors, each member of the Committee shall be an “independent director” as defined by the applicable rules of the NASDAQ Stock Market and Securities and Exchange Commission.

The Committee shall maintain and submit to the Board copies of minutes of each meeting of the Committee, and each written consent to action taken without a meeting, reflecting the actions so authorized or taken by the Committee since the preceding meeting of the Board.

The Committee shall perform such other responsibilities as may be delegated to the Committee from time to time by the Board.

The Committee may contract and/or retain independent consultants and other such resources as necessary and appropriate to carry out its responsibilities.

In connection with the discharge of the Committee’s duties and responsibilities, the Committee is hereby granted authority and power to perform the following duties and responsibilities and all matters related thereto. The Committee shall function in three areas: Compensation, Corporate Governance, and Nominating and shall have the duties set forth below with respect to each function:

Compensation

  1. Establish an Executive Compensation Policy.
  2. Determine the annual and long-term compensation, including salary bonus and other benefits and perquisites, of the Company’s executive officers, based upon prevailing compensation practices and review of the financial and operating experience of the Company.
  3. Review the compensation of directors and the members of committees of the Board and make appropriate recommendations to the Board in connection therewith.
  4. Administer the Corporation’s employee and director stock option and incentive plans.
  5. When authorized by a plan, determine which individuals should receive grants of options under such plan and the terms (number of shares, exercise price, vesting schedule, etc.) thereof.
  6. Review and submit to the Board recommendations, if any, concerning new executive compensation, incentive, or stock option plans.
Corporate Governance
  1. Provide an orientation for new Board members on the business of the Company and the operations of the Board and its committees.
  2. Recommend to the Board the size and composition of the Board and the number and schedule of Board meetings.
  3. Recommend to the Board all committee assignments, including committee members and chairpersons, and meeting schedules.
  4. Review and evaluate the effectiveness of communication between management and the Board and make appropriate reports and recommendations to the Board in connection therewith.
  5. Review and evaluate corporate indemnification provisions and directors and officers insurance and make appropriate reports and recommendations to the Board in connection therewith.
  6. Review and evaluate the functioning of the Board and the fulfillment of its legal duties and make appropriate recommendations to the Board in connection therewith.
  7. Review management's recommended slate of officers for election by the Board and refer such recommendations to the Board for approval and recommend a mechanism for management succession.
Nominating
  1. Working with the Chairman of the Board and the Board, determine appropriate qualifications for membership on the Board.
  2. Review and evaluate new candidates for election to the Board and make recommendations to the Board regarding appropriate nominations for Board elections and the Committee, acting through the Committee’s chairman, shall establish a procedure for identifying potential nominees, pursuant to which suggestions for nominees as directors could be proffered by directors or officers of the Company and such other persons (including stockholders) as may be deemed appropriate.
  3. Review and evaluate the individual performance of Board members, including review of members’ attendance, involvement and contributions.
  4. Review and evaluate candidates for reelection to the Board and make recommendations to the Board regarding appropriate nominations for reelection to the Board.