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Exhibit 10.4.2 THORNBURG MORTGAGE, INC. AMENDMENT NO. 2
TO
AMENDED AND RESTATED
2002 LONG-TERM INCENTIVE PLAN Dated as of April 20, 2004 Pursuant to Section 8.2 of the Amended and Restated 2002 Long-Term
Incentive Plan (the Plan), the Board of Directors of Thornburg Mortgage, Inc.
(the Company) hereby revises and amends the terms of the Plan as follows,
effective April 20, 2004:  1.
    
    Section 3.6.1 of the Plan shall be deleted in its entirety and replaced with
the following: A former Director or a former managing director of the
Manager, the Companys corporate secretary and such other
persons as may be designated from time to time by the
Committee shall be eligible to serve on the Advisory Board
after reaching the Minimum Combination of Years. While
serving on the Advisory Board, he or she shall not be
eligible to receive new Grants and shall be subject to
subsection 3.6.2 below with respect to all existing Grants,
until such time as the Participant enters Retirement or
otherwise terminates service for the Company or the Manager.
Upon the joint approval of the Committee and the Board, the
Minimum Combination of Years requirements (as defined in
subsection 2.23) and the participation level (as set forth
in subsection 3.6.2 below) with respect to Eligible Persons
who are joining or serving on the Advisory Board may be
waived or modified, as deemed appropriate given the facts
and circumstances of each individuals situation.  2.
    
    Section 3.6.2 of the Plan shall be deleted in its entirety and replaced with
the following: Level of Participation. While serving on the Advisory Board an
Eligible Person shall participate solely by receiving distributions,
either in cash or in PSRs, on his or her PSRs or DERs as follows: A
Minimum Combination of Years totaling 65 years at the time that an
Eligible Person joins the Advisory Board qualifies for an 80%
participation level. For each additional year of combined service
and age greater than the Minimum Combination of Years at the time
that an Eligible Person joins the Advisory Board, the participation
level increases by two percent (2%) such that a one hundred percent
(100%) participation level is attained for an Eligible Person with a
combination of years of service and age equaling or exceeding 75 at
the time of joining the Advisory Board.




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The participation level of an Eligible Person during his or her
service on the Advisory Board is fixed at the time that the Eligible
Person joins the Advisory Board, unless otherwise modified by the
Committee and the Board pursuant to subsection 3.6.1 above. For
those Eligible Persons that participate at less than a one hundred
percent (100%) level, the appropriate percentage of participation
shall be applied equally to the number of DERs and the number of
vested and unvested PSRs owned by such person on the date of joining
the Advisory Board (the Date). Any excess number of DERs and
unvested PSRs owned by the Eligible Person shall be canceled and
terminated on the Date. Any excess number of vested PSRs shall
continue to receive dividend equivalent distributions until they are
either exercised or canceled and may be exercised at any time within
three (3) months of the Date, after which time they shall be canceled
and terminated. The unvested PSRs retained by such person in
accordance with the participation level specified above shall
continue to vest and receive future dividend equivalent distributions
in accordance with the vesting schedule determined when the Grant was
awarded. The Plan, as amended herein, is in all respects ratified and affirmed on
behalf of the Company by its Board of Directors, including a majority of its
non-employee Directors. The Company has caused this Amendment No. 2 to the Plan to be executed in
the name and on behalf of the Company by an officer of the Company thereunto
duly authorized as of the date written above. THORNBURG MORTGAGE, INC.
a Maryland corporationBy:Larry A. GoldstonePresident and Chief Operating Officer