<PAGE>

                                                             Exhibit 10(iii)(42)

 
                               THE IT GROUP, INC.
                              EXECUTIVE BONUS PLAN

================================================================================

                          Effective November 17, 1998
<PAGE>
 
                               TABLE OF CONTENTS

                                                                         Page
                                                                         ----

ARTICLE 1  INTRODUCTION....................................................1

              1.01  Purpose................................................1
              1.02  Effective Date and Term................................1
              1.03  Participation..........................................1

ARTICLE 2  DEFINITIONS.....................................................1

              2.01  Beneficiary............................................1
              2.02  Board; Board of Directors..............................2
              2.03  Bonus Payment..........................................2
              2.04  Cause..................................................2
              2.05  Change of Control......................................2
              2.06  Change of Control Bonus................................2
              2.07  Committee; Compensation Committee......................3
              2.08  Common Stock...........................................3
              2.09  Continued Service Bonus................................3
              2.10  FICA...................................................3
              2.11  Fiscal Year............................................3
              2.12  Full-Time Employee.....................................3
              2.13  Participant............................................3
              2.14  Performance Bonus......................................3
              2.15  Permanently Disabled...................................3
              2.16  Retirement Date........................................4
              2.17  Termination Date.......................................4

ARTICLE 3  ADMINISTRATION OF THE PLAN......................................4

ARTICLE 4  CONTINUED SERVICE BONUS.........................................4

              4.01  Continued Service Bonus................................4
              4.02  Separation from Service and Change of Control..........5

ARTICLE 5  PERFORMANCE BONUS...............................................6

              5.01  Performance Bonus......................................6
              5.02  Separation from Service................................6

ARTICLE 6  CHANGE OF CONTROL BONUS.........................................6




                                       i
<PAGE>
 
ARTICLE 7  GROSS-UP PAYMENT................................................7

ARTICLE 8  GENERAL PROVISIONS..............................................7

              8.01  Not an ERISA Plan......................................7
              8.02  Employment Not Guaranteed..............................7
              8.03  Applicable Law.........................................7
              8.04  Notices................................................7
              8.05  Prohibition Against Assignment.........................8
              8.06  No Transfer of Interest................................8
              8.07  Amendment or Termination of the Plan...................8
              8.08  Titles and Headings; Gender of Terms...................8
              8.09  Severability...........................................9
              8.10  Violation of any Covenant or Law.......................9
              8.11  Payments to Incapacitated Participant..................9
              8.12  Designation of Beneficiary.............................9





                                      ii
<PAGE>
 
                               THE IT GROUP, INC.
                              EXECUTIVE BONUS PLAN

================================================================================
                                        

                                   ARTICLE 1
                                  INTRODUCTION

     1.01  Purpose.

     The IT Group, Inc. Executive Bonus Plan (the "Plan"), is hereby established
by the Compensation Committee of the Board of Directors of The IT Group, Inc.
(the "Company") and its affiliates, to provide an additional incentive to
certain key executives of the Company or its affiliates (any such executive
shall be referred to hereinafter as a "Key Individual") to improve the Company's
overall profitability and value on a sustainable long term basis.  The Plan
provides for a cash bonus based on years of service by a Key Individual, the
future appreciation in the value of the Company as reflected in the value of the
common stock of the Company ("Common Stock"), and any Change of Control, as
specifically provided herein.

     1.02  Effective Date and Term.

     This Plan is adopted effective as of November 17, 1998 (the "Effective
Date"), and shall continue in effect until terminated by the Board of Directors
(the "Plan Termination Date").  As of the Effective Date, no termination date
has been established for this Plan.

     1.03  Participation.

     Participation in this Plan shall be limited to those Key Individuals who
are selected from time to time by the Committee to participate in this Plan.
The participation in this Plan by any such Key Individual, and the payment of
any Bonus Payments under this Plan to any such Key Individual, shall be governed
by the terms of this Plan.

                                   ARTICLE 2
                                  DEFINITIONS

     Capitalized terms used in this Plan shall have the meanings ascribed to
them in this Article 2, except that in the case of any capitalized term not
specifically defined in this Article 2, such term shall have the meaning
assigned to it in the text of this Plan where such term first appears.

     2.01  Beneficiary.

     "Beneficiary" shall mean, with respect to any Participant, the one or more
persons and/or entities designated as such Participant's Beneficiary pursuant to
Section 8.11 hereof.
<PAGE>
 
                               THE IT GROUP, INC.
                              EXECUTIVE BONUS PLAN

================================================================================

     2.02  Board; Board of Directors.

     "Board" and "Board of Directors" each shall mean the Board of Directors of
the Company.

     2.03  Bonus Payment.

     "Bonus Payment" shall mean the amount payable as a Continued Service Bonus,
a Performance Bonus, or a Change of Control Bonus, as defined herein.

     2.04  Cause.

     "Cause" shall mean (a) willful misconduct by Participant resulting in
material harm to the Company or an affiliate (including harm to the Company or
an affiliate's public reputation), (b) the breach by Participant of any of his
covenants contained in any agreement with the Company or an affiliate, (c)
Participant's conviction of, or Participant's entering of a guilty plea with
respect to, a felony or (d) Participant's misappropriation of corporate funds.

     2.05  Change of Control.

     "Change of Control" shall mean the first to occur of the following events:
(a) any date upon which the directors of the Company who were nominated by the
Board of Directors for election as directors and/or were elected by the holders
of the Cumulative Convertible Participating Preferred Stock cease to constitute
a majority of the directors of the Company; (b) a reorganization, merger or
consolidation of the Company, the consummation of which results in the
outstanding securities of any class being exchanged for or converted into cash,
property and/or securities not issued by the Company; (c) the acquisition of
substantially all of the property and assets of the Company by any person or
entity; (d) the dissolution or liquidation of the Company; or (e) the date of
the first public announcement that any person or entity, together with all
Affiliates and Associates (as capitalized terms are defined in Rule 12b-2
promulgated under the Securities Exchange Act of 1934) of such person or entity,
shall have become the beneficial owner (as defined in Rule 13d-3 promulgated
under the Securities Exchange Act of 1934) of voting securities of the Company
representing 35% or more of the voting power of the Company; provided, however,
that the terms "person" and "entity," as used in this clause (e), shall not
include (x) the Company, any of its subsidiaries, The Carlyle Group and its
Affiliates, (y) any employee benefit plan of the Company or any of its
subsidiaries, or (z) any entity holding voting securities of the Company for or
pursuant to the terms of any such plan.

     2.06  Change of Control Bonus.

     "Change of Control Bonus" shall mean the cash bonus payment to which a
Participant may become entitled pursuant to Article 6 and the terms of this
Plan.

                                       2
<PAGE>
 
                               THE IT GROUP, INC.
                              EXECUTIVE BONUS PLAN

================================================================================

     2.07  Committee; Compensation Committee.

     "Committee" and "Compensation Committee" each shall mean the Compensation
Committee of the Board of Directors of the Company.

     2.08  Common Stock.

     "Common Stock" shall mean the Company's common stock, $.01 par value per
share.

     2.09  Continued Service Bonus.

     "Continued Service Bonus" shall mean the cash bonus payment to which a
Participant may become entitled pursuant to Article 4 and the terms of this
Plan.

     2.10  FICA.

     "FICA" shall mean the Federal Income Contributions Act.

     2.11  Fiscal Year.

     "Fiscal Year" shall mean the Company's annual accounting period for tax and
financial accounting purposes, which annual accounting period ends on the last
Friday of each December.

     2.12  Full-Time Employee.

     "Full-Time Employee" shall mean a person who is currently employed by the
Company or an affiliate and completes at least 30 hours of employment each week.

     2.13  Participant.

     "Participant" shall mean any Key Individual who is selected from time to
time by the Board to participate in this Plan pursuant to Section 1.03 hereof
and is currently employed by the Company or an affiliate.

     2.14  Performance Bonus.

     "Performance Bonus" shall mean the cash bonus payment to which a
Participant may become entitled pursuant to Article 5 and the terms of this
Plan.

     2.15  Permanently Disabled.

     "Permanently Disabled" shall mean the inability to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period

                                       3
<PAGE>
 
                               THE IT GROUP, INC.
                              EXECUTIVE BONUS PLAN

================================================================================

of not less than twelve (12) months. A Participant shall not be deemed to be
Permanently Disabled until proof of the existence thereof shall have been
furnished to the Administrative Committee in such form and manner, and at such
times, as the Administrative Committee may require. Any determination by the
Company or an affiliate that Participant is or is not Permanently Disabled shall
be final and binding upon the Company or an affiliate and Participant.

     2.16  Retirement Date.

     "Retirement Date" shall mean the last day of a Participant's employment
with the Company or any affiliate which also constitutes his or her "Normal
Retirement Date" under the IT Corporation Retirement Plan.

     2.17  Termination Date.

     "Termination Date" shall mean the last day of a Participant's employment by
the Company or an affiliate.

                                   ARTICLE 3
                           ADMINISTRATION OF THE PLAN

     This Plan shall be administered by the Compensation Committee.  The
Committee shall have full authority and power, to be exercised in its sole
discretion, to make all determinations and/or decisions concerning the
administration, application or interpretation of any provision of this Plan, and
the Committee may adopt such rules and regulations as it may deem necessary,
appropriate or helpful to carry out the purposes of this Plan.  All
determinations, decisions, interpretations, rules, regulations and other actions
of the Committee concerning this Plan shall be final and shall be binding on all
individuals and entities interested in this Plan (and any Beneficiary or other
successor-in-interest to any such person or any such entity).

                                   ARTICLE 4
                            CONTINUED SERVICE BONUS

     4.01  Continued Service Bonus.

     A Participant shall receive a Continued Service Bonus in an amount
determined by the Committee and as set forth on a bonus agreement between the
Participant and Company ("Bonus Agreement") for each anniversary of the
Effective Date during the term of the Plan provided that such Participant is a
Full-Time Employee on such anniversary date.

                                       4
<PAGE>
 
                               THE IT GROUP, INC.
                              EXECUTIVE BONUS PLAN

================================================================================


     4.02  Separation from Service and Change of Control.

     Notwithstanding the foregoing, the occurrence of the following events will
affect the participant's eligibility for a Continued Service Bonus as follows:

          (a) Termination of Employment for Cause; Voluntary Termination.  A
              ----------------------------------------------------------    
     Participant shall not be eligible for any Continued Service Bonus under
     this Plan following a separation from service if such separation was due to
     termination by the Company or an affiliate for Cause or a voluntary
     termination by the Participant.

          (b) Termination Without Cause.  In the event that a Participant's
              -------------------------                                    
     employment with the Company or an affiliate is terminated by either without
     Cause during the consecutive twelve-month period prior to an anniversary of
     the Effective Date (or such other date specified in the Participant's Bonus
     Agreement), the Termination Date for purposes of determining the
     Participant's eligibility for a Continued Service Bonus shall be deemed to
     have occurred six (6) months following the Participant's actual Termination
     Date.

          (c) Retirement of a Participant.  In the event a Participant's
              ---------------------------                               
     employment terminates on or after his or her Retirement Date during the
     consecutive twelve-month period prior to an anniversary of the Effective
     Date (or such other date specified in the Participant's Bonus Agreement),
     such Participant shall be immediately eligible to receive any Continued
     Service Bonus for any outstanding anniversary or anniversaries of the
     Effective Date as if he or she had remained a Full-Time Employee through
     the last anniversary date on which a Continued Service Bonus is to be
     awarded.

          (d) Death or Disability of a Participant.  In the event a Participant
              ------------------------------------                             
     dies or becomes Permanently Disabled while employed by the Company or an
     affiliate during the consecutive twelve-month period prior to an
     anniversary of the Effective Date (or such other date specified in the
     Participant's Bonus Agreement), such Participant shall be immediately
     eligible to receive any Continued Service Bonus for any outstanding
     anniversary or anniversaries of the Effective Date (or such other date
     specified in the Participant's Bonus Agreement) as if he or she had
     remained a Full-Time Employee through the last anniversary date on which a
     Continued Service Bonus is to be awarded.

          (e) Change of Control.  In the event a Change of Control occurs during
              -----------------                                                 
     the term of this Plan and while the Participant is employed by the Company
     or an affiliate, a Participant shall be eligible for the balance of the
     total targeted Continued Service Bonus under the Plan as set forth in the
     Participant's Bonus Agreement.

                                       5
<PAGE>
 
                               THE IT GROUP, INC.
                              EXECUTIVE BONUS PLAN

================================================================================

                                   ARTICLE 5
                               PERFORMANCE BONUS

     5.01  Performance Bonus.

     A Participant shall receive a Performance Bonus in an amount determined by
the Committee and as set forth in the Participant's Bonus Agreement.

     5.02  Separation from Service.

     Notwithstanding the foregoing, the occurrence of the following events will
affect a Participant's eligibility for a Performance Bonus:

          (a) Termination of Employment for Cause; Voluntary Termination.  A
              ----------------------------------------------------------    
     Participant shall not be eligible for any further Performance Bonus under
     this Plan if the Participant's separation from service was due to
     termination for Cause or voluntary termination.

          (b) Termination Without Cause.  In the event that a Participant's
              -------------------------                                    
     employment with the Company or an affiliate is terminated without Cause,
     the Termination Date for the purposes of determining the Participant's
     eligibility for a Performance Bonus shall be deemed to have occurred six
     (6) months following the Participant's actual Termination Date.

          (c) Retirement of a Participant.  In the event a Participant's
              ---------------------------                               
     employment terminates on or after his or her Retirement Date, the
     Termination Date for the purposes of determining the Participant's
     eligibility for a Performance Bonus shall be deemed to have occurred twelve
     (12) months following the Participant's actual Termination Date.

          (d) Death or Disability of a Participant.  In the event a Participant
              ------------------------------------                             
     dies or becomes Permanently Disabled, the Termination Date for the purposes
     of determining the Participant's eligibility for a Performance Bonus shall
     be deemed to have occurred twelve (12) months following the Participant's
     actual Termination Date.

                                   ARTICLE 6
                            CHANGE OF CONTROL BONUS

     In the event a Change of Control occurs during the term of this Plan, a
Participant shall receive a Change of Control Bonus as set forth in his Bonus
Agreement less any Continued Service Bonuses and Performance Bonuses actually
received by the Participant prior to the Change of Control.

                                       6
<PAGE>
 
                               THE IT GROUP, INC.
                              EXECUTIVE BONUS PLAN

================================================================================

                                   ARTICLE 7
                                GROSS-UP PAYMENT

     A Participant who receives a Bonus Payment shall also receive a gross-up
payment to offset his or her federal, state, and local income tax and FICA tax
liability.  The gross-up payment shall be equal to a Bonus Payment multiplied by
a fraction, x/(1-x), where x equals the highest marginal combined effective
federal, state, and local income tax rates imposed on a Bonus Payment, and
reduced by any tax benefit associated with any interest expense deduction
claimed by the Participant in the year of the receipt of such Bonus Payment.

                                   ARTICLE 8
                               GENERAL PROVISIONS

     8.01  Not an ERISA Plan.

     This Plan is restricted to key management employees selected by the Board
of Directors and is not intended to constitute a "qualified plan" for federal
income tax purposes and is not subject to the Employee Retirement Income
Security Act of 1974, as amended.

     8.02  Employment Not Guaranteed.

     This Plan is voluntary on the part of the Company or any affiliate, and the
Plan shall not be deemed to constitute an employment contract between the
Company or any affiliate and any Participant, nor shall the adoption or
existence of the Plan or any provision contained in the Plan be deemed to be a
required condition of the employment of any Participant.  Nothing contained in
this Plan shall be deemed to give any Participant the right to continued
employment with the Company or any affiliate, and the Company or an affiliate
may terminate any Participant at any time, in which case the Participant's
rights arising under this Plan shall be only those expressly provided under the
terms of this Plan.

     8.03  Applicable Law.

     This Plan shall be governed by and construed and enforced in accordance and
with the laws of the State of Delaware, without regard to the application of the
conflicts of law provisions thereof.

     8.04  Notices.

     All notices and other communications required or permitted to be given
under the Plan shall be in writing and shall be deemed to have been duly given
if delivered personally or by inter-office mail as follows: (i) if to the
Company, The IT Group, Inc., Mosside Boulevard, Monroeville, PA 15146-2792; (ii)
if to a Participant, to the last home or business address of the Participant
known to the sender.

                                       7
<PAGE>
 
                               THE IT GROUP, INC.
                              EXECUTIVE BONUS PLAN

================================================================================

     8.05  Prohibition Against Assignment.

     Except as otherwise expressly provided in this Plan, the rights, interests
and benefits of a Participant under this Plan (a) may not be sold, assigned,
transferred, pledged, hypothecated, gifted, bequeathed or otherwise disposed of
to any other party by such Participant or any Beneficiary, executor,
administrator, heir, distributee or other person claiming under such
Participant, and (b) shall not be subject to execution, attachment or similar
process.  Any attempted sale, assignment, transfer, pledge, hypothecation, gift,
bequest or other disposition of such rights, interests or benefits contrary to
the foregoing provisions of this Section shall be null and void and without
effect.

     8.06  No Transfer of Interest.

     No provision of this Plan shall be interpreted or construed (a) as
transferring to any Participant or any other person or entity any direct or
indirect ownership or other proprietary interest whatsoever in the Company or
any affiliate or its stock or securities, or (b) as creating any partnership,
joint venture or other joint business enterprise between any such person and the
Company or any affiliate.  The Company and each affiliate shall have and possess
all title to, and beneficial interest in, any and all funds or other property
received by the Company or any affiliate in connection with the sale or other
disposition of all or any portion of the Company's or any affiliate's assets
and/or any funds or reserves maintained or held by the Company or any affiliate
on account of any obligation to pay the Bonus Payments as required under this
Plan, whether or not earmarked by the Company or any affiliate as a fund or
reserve for such purpose; any such funds, other property or reserves shall be
subject to the claims of the creditors of the Company or any affiliate, and the
provisions of this Plan are not intended to create, and shall not be interpreted
as vesting, in any Participant, Beneficiary or other person, any right to or
beneficial interest in any such funds, other properly or reserves.

     8.07  Amendment or Termination of the Plan.

     The Compensation Committee may amend this Plan from time to time in any
respect that it deems appropriate or desirable, and the Committee may terminate
this Plan at any time; provided, however, that any such amendment or termination
may not, without the written consent of a Participant, eliminate, reduce or
otherwise adversely affect the rights of such Participant to receive payments
under this Plan pursuant to Bonus Agreements entered into prior to the act of
such amendment or termination, or, if earlier, the effective date of such
amendment or termination.

     8.08  Titles and Headings; Gender of Terms.

     Article and Section headings herein are for reference purposes only and
shall not be deemed to be part of the substance of this Plan or in any way to
enlarge or limit the meaning or

                                       8
<PAGE>
 
                               THE IT GROUP, INC.
                              EXECUTIVE BONUS PLAN

================================================================================

interpretation of any provision in this Plan. Use in this Plan of the masculine,
feminine or neuter gender shall be deemed to include each of the omitted genders
if the context so requires.

     8.09  Severability.

     In the event that any provision of this Plan is found to be invalid or
otherwise unenforceable by a court or other tribunal of competent jurisdiction,
such invalidity or unenforceability shall not be construed as rendering any
other provision contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid and unenforceable provision was not contained herein.

     8.10  Violation of any Covenant or Law.

     Notwithstanding any other provision of this Plan, the Company or any
affiliate shall not be required to make a Bonus Payment to a Participant if
making such Bonus Payment would cause the Company or an affiliate to violate any
covenant or other similar provision in any indenture, loan agreement, or other
agreement, or cause the Company or an affiliate to violate any applicable
federal, state or local law.

     8.11  Payments to Incapacitated Participant.

     In the event a Participant is under mental or physical incapacity at the
time of any payment to be made to such Participant pursuant to this Plan, any
such payment may be made to the conservator or other legally appointed personal
representative having authority over and responsibility for the person or estate
of such Participant, as the case may be, and for purposes of such payment
references in this Plan to the Participant shall mean and refer to such
conservator or other personal representative, whichever is applicable.  In the
absence of any lawfully appointed conservator or other personal representative
of the person or estate of the Participant, any such payment may be made to any
person or institution that has apparent responsibility for the person and/or
estate of the Participant as determined by the Board.  Any payment made in
accordance with the provisions of this Section to a person or institution other
than the Participant shall be deemed for all purposes of this Plan as the
equivalent of a payment to such Participant, and the Company and its affiliates
shall have no further obligation or responsibility with respect to such payment.

     8.12  Designation of Beneficiary.

     A Participant shall be entitled to designate one or more persons or
entities, in any combination, as his "Beneficiary" to receive any Plan payments
to which such Participant is entitled in the event of the Participant's death
during the term of this Plan.  Any such designation shall be made in a written
instrument filed with the Board.  In the event that either (a) a Beneficiary
designation is not on file at the date of a Participant's death, (b) no
Beneficiary survives the Participant, or (c) the Beneficiary designated by a
deceased Participant is not living

                                       9
<PAGE>
 
at the time any payment becomes payable under this Plan, then, for purposes of
making any further payment of any unpaid Participation Payment (or any unpaid
installment thereof), such Participant's Beneficiary shall be deemed to be the
person or persons surviving him in the first of the following classes in which
there is a survivor, share and share alike:

          (i) The Participant's surviving spouse.

          (ii) The Participant's children, except that if any of the children
     predecease the Participant but leave issue surviving, then such issue shall
     take by right of representation the share their parent would have taken if
     living.

          (iii)  The Participant's estate.

     IN WITNESS WHEREOF, the Company has caused this Plan to be executed by its
duly authorized officer, effective as provided in Section 1.02 hereof

                              THE IT GROUP, INC.

                              a Delaware corporation

                              By: /s/ Anthony J. DeLuca
                                 ----------------------------------

                              Title:  President
                                    -------------------------------

                                       10