**EXHIBIT 10.42****Irwin Commercial Finance****Amended and Restated Performance Unit Plan****1. Purpose**The purpose of the Irwin Commercial Finance Performance Unit Plan is to attract, retain andmotivate key executives and to increase the long-term value of ICF by providing selected employeeswith the opportunity to share in the value of ICF through grants of performance units at a levelintended to provide median competitive long-term incentive award opportunities.**2. Effective Date**The Performance Unit Plan was presented to the Board for adoption on August 22, 2005. The Plan wasamended and restated to account for changes in the law. The initial Plan Cycle is January 1, 2005– December 31, 2007. Adoption of the restated Plan is subject to shareholder approval.**3. Definitions**a) AWARD means a payment made pursuant to the Plan at the end of a Plan Cycle. b) BOARD means the Board of Directors of Irwin Commercial Finance. c) CHAIRMAN means Chairman of the Board. d) CODE means the Internal Revenue Code of 1986, as amended. e) COMMITTEE means the committee appointed by the Board to administer the Plan, which shallconsist solely of the Chairman until such time as the Plan is amended in accordance withSection 7(a) hereof. f) COMPANY means Irwin Commercial Finance. g) COVERED OFFICER means any individual who, on the last day of the taxable year of IFC, is thechief executive officer of IFC and any other officer of the Company who is, for such taxableyear, determined to be among IFC’s four “highest compensated officers (other than the chiefexecutive officer of IFC) as defined under Code Section 162(m)(3). h) DISABILITY means the participant is unable to engage in any substantial gainful activity byreason of any medically determinable physical or mental impairment which can be expected toresult in death or can be expected to last for a continuous period of not less than 12 months,or is, by reason of any medically determinable physical or mental impairment which can beexpected to result in death or can be expected to last for a continuous period of not lessthan 12 months, receiving income replacement benefits for a period of not less than 3 monthsunder an accident and health plan covering the Company’s employees.
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i) EXCHANGE ACT means the Securities Exchange Act of 1934, as amended. j) IFC COMMITTEE means the committee appointed by the board of directors of IFC to administersuch long-term incentive plans as may be adopted by such board from time to time or, in theabsence of such a committee, the standing compensation committee of IFC’s board of directorsas constituted from time to time; provided, that any such IFC Committee shall be comprisedsolely of at least two members of the IFC board of directors who qualify as an “outsidedirector” under Code Section 162(m) and the regulations promulgated thereunder and as a“non-employee director” within the meaning of Rule 16b-3(b)(3) (or any successor rule) underthe Exchange Act. k) PERFORMANCE UNIT means a component used to represent the incremental cash value of theCompany that is awarded to participants in the Plan at the beginning of each Plan Cycle. l) PLAN means the Irwin Commercial Finance Performance Unit Plan. m) PLAN CYCLE means the three-year period in which the plan will run. n) P/E means a valuation ratio of the current unit price compared to per-share earnings. o) ROE means Return on Equity.**4. Eligibility**Executive employees, as recommended and approved by the Company President or the Board ofDirectors, and approved by the Board of Directors of ICF, are eligible to participate in the Plan.Key ICF executives (Vice President and above positions, based on market practice for grantingprogrammatic long-term incentive opportunities) who would participate in annual grants of IrwinCommercial Finance Performance Units as approved by the ICF Board.Selection of an employee for participation in the Plan does not guarantee being selected toparticipate in the Plan for any subsequent Plan Cycle. Selection of any employee to participate inthe Plan does not give the participant any right to continued employment with the Company. TheCompany reserves the right, which may be exercised at any time, to terminate a Plan participant’semployment or adjust the compensation of a Plan participant with or without cause.**5. Administration**The Board will be requested to approve each Performance Unit Plan at the beginning of the PlanCycle. The Committee will then carry out the daily administration of the Plan. To the extentrequired by Section 409A of the Internal Revenue Code, the Plan will be administered in accordancewith Section 409A of the Code.**6. Plan Specifications**a) Plan Cycles. Each Plan Cycle is three years in length with the first cycle startingJanuary 1st, 2005 and ending December 31st, 2007. All subsequent Plan Cycles will startJanuary 
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  1st and end December 31st - three years later. A new Plan Cyclewill start at the beginning of each calendar year.b) Plan Operation. Participants are awarded Performance Units at the beginning of eachPlan Cycle. Performance Units vest in accordance with Section 6(f) below. At the end of eachPlan Cycle, the vested Performance Units are cashed out based on the value of the PerformanceUnits at the end of the Plan Cycle to the extent the participant is employed by the Company atthe end of the Plan Cycle. c) Performance Units. Performance Units are components used to represent theincremental cash value of the Company. The number of units can divide the beginning value ofthe Company in order to make the beginning value for a Performance Unit in the first PlanCycle equal to $100 (or any other number). Subsequent valuations will use the calculatednumber of units in order to determine the per unit value. d) Valuation. An outside appraiser in conformity with the Uniform Standards ofProfessional Appraisal Practice will do valuations. Valuations are performed annually unlessthe Board determines that significant volatility suggests the need for more frequentvaluations. The standard value is *fair market value.*The outside appraiser will recommend avaluation approach or approaches, such as the combination of a market approach, incomeapproach and net asset approach. The valuation should be adjusted for any capitalcontributions. e) Award Opportunities. Award opportunities are based on a median competitive expectedvalue divided by the starting value of a Performance Unit for each Plan Cycle. f) Vesting. Performance Units will cliff vest based on continued employment over thePlan Cycle and average ROE performance as follows:(i) No Performance Units will be vested if average ROE over the Plan Cycle is less than orequal to the average of threshold ROEs stated in the annual Short Term Incentive Plan foreach of the years of the Plan Cycle..(ii) All of the Performance Units will vest at the end of the Plan Cycle if average ROEperformance at least equals the average of the target ROEs in the annual Short-TermIncentive Plan for each of the years of the Plan Cycle and if the participant is employedcontinuously for the entire Plan Cycle.(iii) A prorated portion of Performance Units will vest at the end of the Plan Cycle ifaverage ROE is between the average of the threshold ROEs stated in the annual Short-TermIncentive Plan for each of the years of the Plan Cycle and the average of the target ROEs inthe annual Short-Term Incentive Plan for each of the years of the Plan Cycle.The Right to receive the value of vested Performance Units shall be contingent uponemployment with the Company on the last day of the Plan Cycle.g) Rights Upon Separation from Service. In the event of separation from service,as such phrase is defined in Section 409A of the Code, for reasons other than death,Disability, 
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  retirement, transfer pursuant to Section 6(h) below, or company-initiatedSeparation from Service unrelated to job performance, the Participant forfeits allPerformance Units in effect on the date of separation. In the event of separation fromservice by reason of death, Disability (as such term is defined in Section 409A of theCode) retirement, transfer pursuant to Section 6(h) below, or Company-initiated Separationfrom Service unrelated to the participant’s job performance, a pro-rated portion of thePerformance Units for each Plan Cycle in effect will be paid at the same time as set forthin Section 6(i) based on full months completed in the Plan at the date of termination,provided that the performance goals and performance criteria were met during the applicablePlan Cycle.h) Transfers to a Non-eligible Position. If a Participant transfers to anon-Plan-eligible position during the Plan Cycle, the Participant will receive a pro-ratedportion of the Performance Units equal to the Performance Units in effect on the date ofthe transfer; provided that the performance goals and performance criteria were met duringthe applicable Plan Cycle; provided, further, that the Participant is employed by theCompany or other Irwin Financial Corporation company at the end of the Plan Cycle. Payoutwill occur at the same time as it does for other Participants in those Plan i) Payment of Awards. The value of a participant’s vested Performance Units willbe paid out in a cash lump sum payment based on the most recent valuation as soon asadministratively practicable after such valuation is approved by the Board, but no laterthan March 14th of the first year immediately following the end of the PlanCycle. If for any reason it is administratively impracticable to pay the value of thePerformance Units by that deadline, such payments shall be made as soon as administrativelypracticable in the first calendar year immediately after the Plan Cycle ends. The value ofthe award is determined by the most recent valuation based on the final year financials ofthat Plan Cycle. In order to receive the award, the Participant must be employed on thelast day of the Plan Cycle, subject to Section 6(h) above. The award is subject to allrequired tax deductions. No Award shall be payable if the participant and/or Company doesnot meet the performance goals set forth in the Plan Cycle Schedule. Awards payable toCovered Officers are subject to Section 6(l) below. j) Delay in Payment. The timing of a payment will be delayed to a date after thedesignated payment date where the Company reasonably anticipates that the Company’sdeduction with respect to such payment otherwise would be limited or eliminated by theapplication of Code Section 162(m); provided, however, that the payment shall be madeeither at the earliest date at which the Company reasonably anticipates that the deductionof the payment amount will not be limited or eliminated by application of Code Section162(m) or the calendar year in which the participant Separates from Service, as that termis defined by Code Section 409A and regulations issued thereunder. k) No Acceleration of Payment. The timing of payments under this Plan shall notbe accelerated for any reason that is not permitted by Code Section 409A and regulationsissued thereunder.
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l) Compliance with Code Section 162(m). The Company intends that Awards made toCovered Officers under the Plan shall satisfy the requirements for “performance-basedcompensation” under Code Section 162(m) and 409A and the Treasury Regulations promulgatedthereunder. Therefore, Awards to Covered Officers and interpretation of the Plan shall beguided by such provisions, as appropriate. If a provision of the Plan would cause apayment to a Covered Officer to fail to satisfy these requirements, it shall be interpretedand applied in a manner such that said payment will satisfy Code Sections 162(m) and 409A.Notwithstanding the foregoing, the Company shall request that IFC obtain IFC shareholderapproval for any amendment of the Plan as may be required under Code Section 162(m) toensure the Plan’s qualification under Code Section 162(m).For Covered Officers, within 90 days after the beginning of a Plan Cycle and before it hasbecome substantially certain that the performance level will be met (or such other time asis consistent with the requirements of Code Sections 162(m) and Section 409A of the Code),the IFC Committee, in its sole discretion, shall take the following action: 1) establish a target Award opportunity in writing for each Plan participant for thePlan Cycle, expressed in Performance Units; and  2) establish objective performance-based goals for an Award for which the outcome issubstantially uncertain at the time such goals are established and that (i) specifya threshold, a target, a maximum and any other performance levels deemed by theCommittee to be necessary or appropriate to establish an accurate and effectivepay-for-performance schedule and (ii) base performance on one or more of thefollowing financial indicators of the Company’s success: earnings per share, netearnings, net income, operating earnings, customer satisfaction, revenues, netsales, financial return ratios such as return on equity, return on assets, return oncapital, and return on investment, ratio of debt to earnings or shareholders’equity, market performance, market share, balance sheet measurements, economicprofit, cash flow, shareholder return, margins, productivity improvement,distribution expense, inventory turnover, delivery reliability, cost control oroperational efficiency measures, and working capital, any of which may be measuredin absolute terms, growth or improvement during a Performance Period or as comparedto another company or companies. Performance goals may be absolute in their termsor measured against or in relationship to other companies comparably, similarly orotherwise situated or other external or internal measure and may include or excludeextraordinary charges, losses from discontinued operations, restatements andaccounting changes and other unplanned special charges such as restructuringexpenses, acquisitions, acquisition expenses, including expenses related to goodwilland other intangible assets, stock offerings, stock repurchases and strategic loanloss provisions. Such performance goals may be particular to a line of business,subsidiary or other unit or the Company generally, and may, but need not, be basedupon a change or an increase or positive result.Notwithstanding anything in the foregoing to the contrary, in the case of a person who was aCovered Officer as of the close of the immediately preceding fiscal year, the target
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Awardopportunity, performance levels and performance criteria pertaining to such Covered Officershall also be approved by the IFC Committee within 90 days after the beginning of the PlanCycle but in no event after 25 percent of such Plan Cycle has elapsed (or such other time asis consistent with the requirements of Code Sections 162(m) and 409A). All such target andmaximum Award opportunities, performance levels and performance criteria pertaining to anyCovered Officer shall be objective and shall otherwise meet the requirements of CodeSections 162(m) and Section 409A.Upon being established by the Committee (and approved by the IFC Committee, as necessary),the target and maximum Award opportunities, performance levels and performance criteria foreach participant for a given Plan Cycle shall be set forth in writing and communicated toeach such participant (the “Plan Cycle Schedule”); provided, however, thatthe rights of a Covered Officer to receive payment pursuant to any such Award shall beexpressly conditioned on obtaining the approval of the Plan by a majority of theshareholders of the Company in the manner provided under Code Section 162(m) prior to suchpayment.After the establishment of a performance goal for a Covered Officer, the Committee shall notrevise such performance goal (unless such revision will not disqualify compensationattributable to the Award as “performance-based compensation” under Section 162(m) of theCode) or increase the amount of compensation payable with respect to such Award upon theattainment of such performance goal.As required by Treasury Regulation Section 1.162-27(e)(vi), the material terms ofperformance goals as described in this Section 6 shall be disclosed to and reapproved byIFC’s shareholders no later than the first shareholder meeting that occurs in the 5th yearfollowing the year in which IFC’s shareholders previously approved such performance goals.The maximum dollar amount for a cash Award that may be earned under the Plan with respect toany Plan Cycle shall be $2,000,000. Any amount earned with respect to a cash Award withrespect to which performance is measured over a period greater than one year shall be deemedto be earned ratably over the number of full and partial years in the Plan Cycle.For Awards payable to Covered Officers, the IFC Committee shall certify in writing prior toany such payment the extent to which the performance goal or goals (and any other materialterms) applicable to such Plan Cycle have been satisfied and the amounts to be paid, vested,or delivered as a result thereof.The Committee reserves the right to adjust the Award of any participant (other than aCovered Officer) to reflect individual performance and/or extraordinary circumstances. TheAward of any Covered Officer shall be subject to the right of the IFC Committee to reduce ina manner consistent with Code Section 162(m), but not increase, such Covered Officer’s Awardto reflect individual performance and/or extraordinary circumstances.
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**7. Miscellaneous**a) Amendment, Suspension or Termination of this Plan**.**Subject to the requirements ofCode Section 409A and Section 162(m), the Board may, at any time and from time to time, amend,suspend or terminate the Plan or any part of the Plan as it may deem proper and in the bestinterest of the Company and subject to any requirement of stockholder approval imposed byapplicable law, rule or regulation; provided, that, subject to the right of the Board toadjust Awards, no such action may cause any participant to be deprived of any Award previouslyawarded but not yet paid, or be effective in the fiscal year in which such action is taken.To the extent required by Section 409A of the Internal Revenue Code, the Plan will be amendedto comply with Section 409A of the Code. The Board reserves the right in any year not togrant any new units to any participating member. b) No Assignment**.**No portion of any Award under the Plan may be pledged, assigned ortransferred otherwise than by will or the laws of descent and distribution prior to itspayment. c) Limitation on Liabilities**.**In any matter related to the Plan, no director oremployee of Irwin Financial Corporation, or any affiliate of Irwin Financial Corporation shallbe liable for the action, or the failure to act, on the part of any other such person. d) Limitation on Vested Interest**.**Awarding a bonus is within the sole discretion of theBoard. No participant has a vested interest in an award under the Plan prior to the end ofthe Plan Cycle for which the Award is granted. e) Employment Rights. Participation in this Plan shall not be construed to grant anyemployee the right to be retained in the employ of the Company. f) Unsecured General Creditors**.**Participants shall have no right, title, or interestwhatsoever in or to any investments which the Company may make to aid it in meeting itsobligations under the Plan. Nothing contained in the Plan, and no action taken pursuant toits provisions, shall create or be construed to create a trust of any kind, or a fiduciaryrelationship between the Company and any participant, beneficiary, legal representative or anyother person. To the extent that any person acquires a right to receive payments from theCompany under the Plan, such right shall be no greater than the right of an unsecured generalcreditor of the Company. All payments to be made hereunder shall be paid from the generalfunds of the Company and no special or separate fund shall be established and no segregationof assets shall be made to assure payment of such amounts except as expressly set forth in thePlan. The Plan is not intended to be subject to the Employee Retirement Income Security Actof 1974, as amended. g) Governing Law**.**Indiana law shall determine the validity and construction of the Planand any rules relating to the Plan without reference to principles of conflict of laws, exceptas superseded by applicable federal law. This Plan is not intended to create any deferral ofincome that would be subject to Internal Revenue Code Section 409A. In the event that anydeferral of income results under this Plan, the terms of this Plan shall be interpreted tocomply with the requirements of 409A.
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