UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): ~~August~~February 2415, ~~2011~~2012

Thomas Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware		0-22010		72-0843540
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer 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

Not Applicable

(Former name or former address, if changed since last report)

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:

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))

Item 1.01. Entry into a Material Definitive Agreement

On August 24, 2011, the Board of Directors of Thomas Group, Inc. (the “Company”), in order to provide additional liquidity for the Company, approved the issuance of $500,000 in subordinated notes. The notes will bear interest at a rate of 10% per annum and will have a term of 10 years from date of issuance. Interest will accrue, compounded monthly, but the Company at its option may defer all or any portion of the interest payments otherwise payable. The principal and accrued interest are payable at the option of the Company at any time prior to the maturity date.

In the event of a Change of Control as defined in the notes, the notes and accrued interest are payable. In addition to the principal and interest then due on the notes, the holders in the aggregate will also be entitled to receive as an Accommodation Fee an amount equivalent to 10% of the amount the Company would receive in an all-cash sale of its assets and businesses as going concern free and clear of all liens, whether the sale is a stock sale or a sale of assets, less the unpaid principal and accrued interest as of the date of Change of Control. The Accommodation Fee will survive the prepayment of the principal of the notes.

The holders of the notes will be the members of the Board of Directors, including its newly elected member Michael N. Romeri. The amount of each promissory note as well as each holder’s respective percentage of the 10% Accommodation Fee is shown below:

			Percentage of 10%
Holder	Note Principal		Accommodation Fee
Michael E. McGrath	$	75,000	15	%
Michael N. Romeri	$	225,000	45	%
John T. Chain	$	100,000	20	%
Dorsey R. Gardner	$	50,000	10	%
David B. Mathis	$	50,000	10	%

Terms of the notes were negotiated on behalf of the Company by Frank Tilley, Chief Financial Officer and Vice President, who will not be a holder of any portion of the notes. Mr. Tilley was unable to identify any other sources of additional liquidity available to the Company at this time on more favorable terms.

On August 24, 2011, the Company entered into an agreement with Michael (Mike) N. Romeri to serve as President and Chief Executive Officer of the Company. The terms of the Company’s agreement with Romeri are described in Item 5.02 below, which is incorporated herein by reference.

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

On ~~August~~February 2415, ~~2011,~~2012 the Compensation and Corporate Governance Committee (the “Committee”) and the Board of Directors (the “Board”) of Thomas Group, Inc. (the “Company”) ~~named~~each, Mracting by Unanimous Written Consent, approved changes in compensation for Michael (“Mike”) N. Romeri, 57, asthe Company’s President and Chief Executive Officer ofand in the ~~Company.~~role ~~The~~and ~~Board~~compensation of ~~Directors~~Michael ~~also~~E. ~~increased~~McGrath, the ~~number~~Company’s offormer ~~directors~~Executive ~~from~~Chairman. These ~~four~~changes were retroactive to ~~five~~January 1, ~~and~~2012 ~~appointed~~per ~~Mr. Romeri~~mutual toagreement between the ~~Board~~Company ofand ~~Directors~~these executives.

~~Most~~Change ~~recently~~in ~~from~~Compensation ~~2009~~for ~~Mr. Romeri~~Michael ~~has been Executive Vice President, Business Development at Emptoris, Inc~~N., ~~a provider of enterprise supply and contract management software. Prior to joining Emptoris, Mr.~~ Romeri, was with PRTM, a leading management consulting firm focusing on operational strategy, supply chain transformation, and customer experience innovation, where he served for more than 20 years in multiple roles including Principal and Partner, and headed the PRTM Technology Group, a horizontal organization that provided information technology expertise to PRTM clients. Prior to that he helped launch the Telecommunications Industry Group at PRTM. He also helped pioneer PRTM’s supply chain and product development consulting practices in Europe and in the United States. Mr. Romeri also has served as Senior Vice President for Europe at Flextronics, a leading electronics manufacturing services provider. He also worked at Advanced Micro Devices. He holds a Masters of Business Administration degree from Harvard Business School. He is also a graduate of Harvard College. There is no family relationship between Mr. Romeri and ~~any~~Chief ~~other~~Executive ~~officer or director of the Company.~~Officer

~~The~~On ~~Board~~August 24, of2011, ~~Directors~~the ~~determined~~Board ~~that~~named ~~given~~ Mr. Romeri’s, ~~extensive experience in consulting~~57, ~~consulting~~as ~~firm~~President ~~leadership~~ and inChief ~~company~~Executive ~~operations~~Officer ~~that~~of hethe ~~was well qualified for these positions~~Company.

Pursuant to ~~his agreement with~~ the Company,’s ~~for~~original ~~the~~agreement ~~remainder~~with ~~of 2011,~~ Mr. Romeri ~~will~~for 2012, Romeri was to receive noannual cash compensation, ~~but~~of he$300,000 ~~will~~plus ~~receive~~shares aconstituting ~~total~~1.5% of ~~71,154~~the ~~shares~~common stock of the Company’s ~~common~~outstanding ~~stock~~as of December 31, 2011. AtAdditionally, ~~the~~upon ~~end~~approval of the ~~year~~Compensation heand isCorporate ~~eligible~~Governance Committee in early 2012 and on terms and conditions to ~~receive~~have anbeen ~~additional~~mutually 71agreed upon at that time,~~154~~ ~~shares~~he ifwould ~~certain~~have ~~specified~~been ~~goals~~eligible ~~are~~for ~~achieved~~an ~~regarding~~incentive performance bonus for 2012 up to 4.5% of the ~~Company’s~~common ~~backlog~~stock ~~for~~of the ~~first~~Company ~~quarter~~outstanding as of ~~2012~~December 31, 2011.

~~For 2012,~~ Mr. Romeri ~~will~~has ~~receive~~developed ~~annual~~and ~~cash~~will ~~compensation~~recommend ~~of $300,000 plus stock equal~~ to ~~1.5% of~~ the ~~common~~Committee ~~stock~~and ofto the ~~Company~~Board ~~outstanding~~at astheir ofmeetings ~~December 31,~~on ~~2011. Additionally, upon approval of the Compensation and Corporate Governance Committee in January~~February ~~2012~~28 and ~~on terms and conditions to be mutually agreed upon at that time~~29, he2012 ~~will~~approval beof ~~eligible~~a ~~for~~newly anhighly incentive ~~performance~~based ~~bonus~~compensation upstructure to(the ~~4.5%~~“Plan”) offor ~~the~~most ~~common~~senior ~~stock~~executives of the Company ~~outstanding~~including ~~as of December 31, 2011~~himself.

Pending approval of the Plan by the Committee and the Board, Mr. Romeri will ~~continue~~receive a base salary of $48,000 per year plus up to ~~live~~12.5% of revenue recognized from contracts which he sells or directly participates in ~~Boston~~the ~~and~~sale ~~will~~in beaccordance ~~reimbursed~~with ~~for~~the ~~travel~~terms ~~and~~of ~~other~~the ~~expenses~~proposed ~~related~~Plan. Mr. Romeri has agreed to ~~Company~~voluntarily ~~business~~implement this change retroactive to January 1, 2012 in ~~accordance~~order ~~with~~to reduce the cash outflows of the Company’s ~~existing~~prior ~~travel~~to the meetings of the Committee and ~~expense~~the ~~reimbursement~~Board. Under ~~policies~~this arrangement, Mr. Romeri is expected to receive only his base compensation of $8,000 total for his services for January and February, 2012.

InThe ~~connection~~proposed ~~with~~Plan ~~the~~also ~~appointment~~includes ofa ~~Mr. Romeri~~proposal asfor ~~President~~additional ~~and~~performance ~~Chief~~based ~~Executive~~compensation ~~Officer,~~dependent ~~Mr. Michael~~on ~~McGrath,~~ the Company’s ~~Executive~~achieving ~~Chairman,~~improved ~~President~~results ~~and~~for ~~Chief~~2012. ~~Executive~~If ~~Officer~~the ~~resigned~~Plan ~~his~~is ~~positions~~approved asby ~~President~~the Committee and ~~Chief~~the ~~Executive~~Board, ~~Officer~~Mr. He Romeri ~~will~~is ~~remain~~expected asto ~~Executive~~participate ~~Chairman.~~in ~~His~~the ~~time~~Plan ~~commitment~~retroactive ~~and~~to ~~compensation~~January 1, ~~for~~2012, ~~2011~~but ~~remains~~such ~~unchanged~~approval ~~from~~is ~~that~~not ~~previously~~expected ~~disclosed~~to change his base compensation for January and February 2012.

InChange ~~March 2011, as previously reported~~ in aCompensation ~~Form 8-K~~and ~~dated~~Role ~~March 8, 2011 the Company had adopted a retention pay program (the “Retention Plan”)~~ for ~~certain~~Michael ~~of the officers and employees of the Company in order to help preserve the continuity of the Company’s management and operations~~E. ~~Under~~ ~~the Retention Plan~~McGrath, ~~the~~former ~~named~~Executive ~~executive officers of the Company were eligible to receive potential Retention Payments in the following amounts:~~Chairman

		Potential
Named		Retention
Executive Officer	Title	Bonus Payment
Michael McGrath	Executive Chairman, President
	and Chief Executive Officer	$	125,000
Frank Tilley	Chief Financial Officer,
	Vice President and Treasurer	$	75,000

In connection with the appointment of Romeri as President and Chief Executive Officer, Mr. McGrath, at the time the Company’s Executive Chairman, President and Chief Executive Officer, resigned his positions as President and Chief Executive Officer. He remained as Executive Chairman.

In order to further reduce ~~potential~~the ~~future~~cash ~~liabilities~~outflows of the Company, ~~both~~ Mr. McGrath ~~and~~volunteered ~~Mr. Tilley~~to ~~have~~forego ~~mutually~~his ~~agreed~~salary ~~with~~compensation from the Company and to ~~cancel~~relinquish ~~their~~his ~~participation~~role inof Executive Chairman, also retroactive to January 1, 2012. He is now the ~~Retention~~Chairman ~~Plan~~of the Board, but no longer an employee of the Company. In ~~This~~this ~~cancelation~~new isrole, ~~not~~he ~~expected~~will continue to ~~have~~be ~~any~~reimbursed ~~impact~~for reasonable travel expenses on ~~the~~Company ~~continued~~business, ~~employment~~including oftravel ~~each~~to ofand ~~them~~from byDallas, ~~the~~Texas, in accordance with applicable Company policies.

~~Safe~~Item ~~Harbor~~8.01. ~~Statement~~Other ~~under the Private Securities Litigation Reform Act:~~Events.

~~Any~~The ~~statements~~Company is in ~~this~~the ~~report~~process ~~that~~of ~~are~~“going ~~not~~dark” ~~strictly~~as ~~historical~~previously ~~statements~~disclosed. On January 3, ~~including~~2012 ~~statements~~it ~~about~~filed ~~the~~Form 15 ~~Company’s~~with ~~beliefs~~the Securities and ~~expectations,~~Exchange ~~are~~Commission ~~“forward-looking~~(the ~~statements~~“SEC”) ~~within~~to ~~the~~deregister ~~meaning~~its ofcommon ~~the~~stock ~~United~~under ~~States~~Section 12(g) of ~~Private~~the Securities ~~Litigation~~Exchange ~~Reform~~ Act of ~~1995~~1934. Under These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements, including, but not limited to the ~~execution~~SEC ~~of the notes and agreements referred to herein~~rules, ~~as well as other factors detailed from time to time in~~ the Company’s ~~filings~~will ~~with~~be ~~the~~required ~~Securities~~to ~~and~~file ~~Exchange~~its ~~Commission, including the Company’s~~ Annual Report on Form 10-K for the year ended December 31, ~~2010.~~2011, ~~These~~which ~~forward-looking~~it ~~statements~~expects ~~may~~to bedo ~~identified~~ by ~~words~~approximately ~~such as “anticipate~~March 15,” “expect,” “suggests,” “plan,” “believe,” “intend,” “estimates,” “targets,” “projects,” “could,” “should,” “may,” “would,” “continue,” “forecast,” and other similar expressions2012. ~~These~~Assuming ~~forward-looking statements speak only as of~~ the ~~date~~Company ofcompletes this ~~report.~~filing ~~Except~~ as ~~required by law~~planned, ~~the~~its ~~Company~~reporting ~~expressly~~obligations ~~disclaims any obligation or undertaking~~ to ~~disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in~~ the ~~Company’s~~SEC ~~expectations~~will ~~with~~cease ~~regard~~on ~~thereto~~ or ~~any~~about ~~change in events~~April 3, ~~conditions or circumstances on which any such statement is based~~2012.

4The Company continues to struggle financially while it continues to seek new clients. While it has continued to reduce costs, including compensation to employees as outlined above, it continues to lose money. Absent significant new business in the near term or other improvements in its financial position, the Company now expects to receive a “going-concern” opinion from the Company’s independent registered public accounting firm for the year ended December 31, 2011.

~~SIGNATURES~~The Board is expected to consider a wide range of alternatives to address this current situation at its meeting on February 28-29, 2012. As previously disclosed, these may include seeking other sources of liquidity in the near term or seeking or implementing alternative strategies, which may include selling or liquidating assets, or ceasing operations or, if appropriate, filing for bankruptcy. If additional sources of liquidity are available, the Company may also consider “going private” through a reverse stock split and repurchase of resulting fractional shares. No decision is expected to be made until this February meeting of the Board.

~~Pursuant~~Safe toHarbor ~~the~~Statement ~~requirements~~under of the Private Securities ~~Exchange~~Litigation ~~Act~~Reform ~~of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.~~Act:

	THOMAS GROUP, INC.
Date: August 29, 2011	By:	/s/ Frank W. Tilley
	Frank W. Tilley
	Chief Financial Officer

Any statements in this report that are not strictly historical statements, including statements about the Company’s beliefs and expectations, are “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements, including, but not limited to the

presentation of the proposed Executive Compensation Plan referred to herein and the other matters to be considered by the Board at its upcoming meeting, as well as other factors detailed from time to time in the Company’s filings with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011. These forward-looking statements may be identified by words such as “anticipate,” “expect,” “suggests,” “plan,” “believe,” “intend,” “estimates,” “targets,” “projects,” “could,” “should,” “may,” “would,” “continue, “ “forecast,” and other similar expressions. These forward-looking statements speak only as of the date of this report. Except as required by law, the Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

SIGNATURES

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: February 21, 2012	By:	/s/ Frank W. Tilley
	Frank W. Tilley
	Chief Financial Officer

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