Document:

exv10w41

 

Exhibit 10.41

FIRST AMENDMENT

TO THE

IRWIN COMMERCIAL FINANCE

AMENDED AND RESTATED PERFORMANCE UNIT PLAN

     WHEREAS, Irwin Commercial Finance (the “Company”) maintains the Irwin Commercial Finance
Amended and Restated Performance Unit Plan (the “Plan”);

     WHEREAS, the Company has determined that it is in its best interests to immediately terminate
the participation of participants in the Plan who terminate employment with the Company due to
death, Disability (as defined in the Plan), retirement, employment transfer to an affiliate or a
Company-initiated separation from service unrelated to job performance; and

     WHEREAS, the Company may amend the Plan from time to time under Section 7(a).

     NOW THEREFORE, the Plan is hereby amended effective as of the date set forth below with
respect to Plan Cycles beginning on or after January 1, 2006:

	1.	 	Section 6(f) is hereby deleted in its entirety and replaced with the following:

	 	f)	 	Vesting. A Participant’s Performance Units will cliff vest based on
continued employment over the applicable Plan Cycle and the Company’s average ROE
performance as follows:

	 	(i)	 	Zero percent of the Performance Units will be vested if average
ROE over the applicable Plan Cycle is less than the average of threshold ROEs
stated in the Company’s annual Short Term Incentive Plan for each of the years
of such Plan Cycle.
	 
	 	(ii)	 	One hundred percent of the Performance Units will vest at the
end of the applicable Plan Cycle if average ROE performance at least equals the
average of the target ROEs in the Company’s annual Short-Term Incentive Plan
for each of the years of such Plan Cycle.
	 
	 	(iii)	 	If average ROE is between the average of the threshold ROEs
stated in the Company’s annual Short-Term Incentive Plan for each of the years
of the applicable Plan Cycle and the average of the target ROEs in the
Company’s annual Short-Term Incentive Plan for each of the years of the Plan
Cycle, the Participant’s vested percentage of each Performance Unit shall equal
1) divided by 2), where:

	 	1)	 	equals the average ROE during the applicable
Plan Cycle minus the average of the threshold ROEs, and

 

 

	 	2)	 	equals the difference between the average of
the threshold ROEs and the average of the target ROEs.

Except as provided under Section 6(g) below, a participant shall not be entitled to
receive a cash payment equal to the value of his or her vested Performance Units
under Section 6(i) below unless such Participant remains employed with the Company
through the last day of the applicable Plan Cycle.

	2.	 	Section 6(g) is hereby deleted in its entirety and replaced with the following:

	 	g)	 	Rights Upon Separation from Service.

	 	(i)	 	In the event of “separation from service,” as such term is set
forth in Section 409A(a)(2)(a)(i) of the Code, for reasons other than death,
Disability, retirement, or Company-initiated separation from service unrelated
to job performance, the participant forfeits all Performance Units in effect
immediately on separation.
	 
	 	(ii)	 	In the event of separation from service by reason of death,
Disability, retirement or Company-initiated separation from service unrelated
to job performance, the participant shall vest, if at all, in a percentage of
each Performance Unit based solely on the participant’s period of employment
and ROE performance during the applicable Plan Cycle. The vesting percentage
for each Performance Unit for a participant in such event shall equal 1)
multiplied by 2), where:

	 	1)	 	equals the participant’s number of completed
months of employment during the Plan Cycle applicable to the
Performance Unit divided by thirty-six, and
	 
	 	2)	 	equals the percentage determined in a manner
consistent with the rules set forth under paragraphs i), ii) and iii)
of Section 6(f) based solely on actual ROE performance while the
participant was employed by the Company during the applicable Plan
Cycle, determined in good faith by the Committee or, in the case of a
Covered Officer, the IFC Committee.

Such participant shall be entitled to receive a cash payment equal to the
value of the vested percentage of his or her Performance Units under Section
6(i) below. All remaining unvested Performance Units are immediately
forfeited on separation from service.

	3.	 	Section 6(h) is hereby deleted in its entirety and replaced with the following:

	 	h)	 	Transfers to a Non-eligible Position. A Participant’s transfer to a
non-eligible position under the Plan during a Plan Cycle shall be treated as a
Company-initiated separation from service under Section 6(g) above for purposes of
determining such Participant’s vested percentage of Performance Units.

 

 

	4.	 	Section 6(i) is hereby deleted in its entirety and replaced with the following:

	 	i)	 	Payment of Awards. The value of a participant’s vested Performance
Units with respect to a Plan Cycle will be paid out in a cash lump sum payment based on
the most recent valuation on or immediately prior to the Triggering Event (as defined
below) as soon as administratively practicable after such valuation is approved by the
Board, but no later than March 14th of the first calendar year immediately following
the Triggering Event; provided, however, that any such payment on account of a
participant’s transfer to an non-eligible position under Section 6(h) shall be paid as
soon as administratively practicable after the earlier of such participant’s separation
from service or the expiration of the applicable Plan Cycle, but no later than December
31st of the calendar year in which such separation or expiration, as applicable,
occurs. Payment may be delayed by the Company (and not the participant) after the
applicable payment due date described above only as permitted under Section 409A of the
Code and regulations, rulings, notices and other guidance issued thereunder. The value
of the award is determined by the most recent valuation under Section 6(d) as approved
by the Board. The award is subject to all required tax deductions. Awards payable to
Covered Officers are subject to Section 6(j) and 6(l) below. For purposes of this
Section 6(i), the “Triggering Event” shall mean (i) in the case of a payment under
Section 6(f), the last day of the applicable Plan Cycle, and (ii) in the case of a
payment under Section 6(g), the participant’s separation from service, and (iii) in the
case of a payment under Section 6(h), the participant’s transfer to an a non-eligible
position.

IN WITNESS WHEREOF, Irwin Commercial Finance has caused this First Amendment to be executed on its
behalf by its duly authorized officer this 31st day of October, 2006.

	 	 	 	 	 
	 	IRWIN COMMERCIAL FINANCE

 	 
	 	By:  	Joseph R. Laleggia
 	 
	 	 	Its:      President and CEO 	 
	 	 	 	 

	 	 	 	 	 
	 
	Attest:

 	 
	Steven R. Schultz
 	 

Date: October 31, 2006exv10w45

 

Exhibit 10.45

MEMORANDUM

	 	 	 
	 
	 	 
	DATE:

	 	January 25, 2007
	 
	 	 
	TO:

	 	Jocelyn Martin-Leano
	 
	 	 
	FROM:

	 	Tom Washburn
	 
	 	 
	SUBJECT:

	 	Supplemental Performance Unit Grant

Dear Jocelyn:

This letter sets forth the terms of the Supplemental Performance Unit Grant approved by the
Compensation Committee of Irwin Financial Corporation (the “Committee”) and granted to you in
connection with your appointment as President of Irwin Home Equity.

1. Grant Size. The number of “performance units” being granted to you under this letter is
231. This grant is effective as of July 1, 2006 and the initial valuation will be as of June 30,
2006. For purposes of this letter, the “performance periods” and number of performance units
subject to each performance period are as follows:

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	

	 	Performance Period	 	Performance Units

	 
	 	 	 	 	 	 
	 

	 	7/1/2006 — 12/31/2008
	 	15	 	 
	 
	 	 	 	 	 	 
	 

	 	1/1/2007 — 12/31/2009
	 	108	 	 
	 
	 	 	 	 	 	 
	 

	 	1/1/2008 — 12/31/2010
	 	108	 	 

Each “performance unit” represents a contractual right to receive a cash payment from Irwin Home
Equity based on its incremental cash value as described below. You will only be entitled to
payment under this agreement only to the extent you vest in your performance units as described
below. Each “performance period” represents the period of time during which Irwin Home Equity must
meet certain performance requirements described below in order for you to be eligible to earn a
vested right to performance units.

2. Vesting Requirements — In General. You will be entitled to receive a cash payment with
respect to a performance unit only if:

	 	(a)	 	you remain employed throughout a performance period as Irwin Home Equity’s
President and Irwin Home Equity meets the performance requirements as described in
paragraph 3 below,
	 
	 	(b)	 	you separate from service under certain circumstances or assume another
position with Irwin Financial Corporation or its subsidiaries prior to the end of a

 

 

	 	 	 	performance period and Irwin Home Equity meets the performance requirements as
described in paragraph 4 below, or

	 	(c)	 	there is a Change of Control of Irwin Home Equity as defined in the exhibit
while you are employed as President of Irwin Home Equity before the end of a
performance period and Irwin Home Equity meets the performance requirements as
described in paragraph 3 below.

The Committee shall determine in its sole discretion the extent to which you have earned a vested
right to receive payment for your performance units.

3. Vesting if You Remain Employed as Irwin Home Equity’s President at the End
of a Performance Period. Your performance units vest to the extent that Irwin Home
Equity meets the performance requirements for a performance period and you remain
employed as Irwin Home Equity’s President at the end of that period. The performance
requirements for vesting are based on the extent to which Irwin Home Equity attains the
performance goals under the Irwin Home Equity Short-Term Incentive Plan (“STIP”). This
will be measured based upon the actual STIP payouts during the performance period.
Your vesting percentage will be equal to the average payout as a percentage of target
over the performance period up to a maximum of 100%. For example, if the payouts were
75%, 100%, and 110%, the average would be 285%/3=95%. In the case of the 15 units with
the performance period of 7/1/06 — 12/31/08, the total of the STIP payouts will be
divided by 2.5. The vested portion can not be less than 0% nor greater than 100%.

4. Vesting if You Are Not Employed as Irwin Home Equity’s President at the End of a
Performance Period.

	 	(a)	 	In the event of your “separation from service” (as such term is defined in
Section 409A(a)(2)(a)(i) of the Code) from Irwin Home Equity prior to the end of a
performance period for reasons other than death, “disability” (as defined in the STIP)
or employment termination initiated by Irwin Home Equity for reasons unrelated to your
job performance, you will forfeit all performance units subject to that performance
period immediately upon separation. For avoidance of doubt, your separation from
service due to misconduct or engaging in criminal conduct shall be considered a reason
related to job performance.
	 
	 	(b)	 	If you separate from service by reason of death, disability or an employment
termination initiated by Irwin Home Equity unrelated to job performance, then you shall
vest, if at all, in a percentage of each performance unit based solely on your period
of employment and Irwin Home Equity’s performance during the applicable performance
period. Your vesting percentage for each performance unit in such event shall equal
(1) multiplied by (2), where:

	 	(1)	 	equals your number of completed months of employment during the
performance period applicable to the performance unit divided by the number of
months in that performance period, and

 

 

	 	(2)	 	equals the vesting percentage determined in a manner consistent
with the rules set forth under paragraph 3 above based solely on Irwin Home
Equity’s actual performance while you were employed by Irwin Home Equity as its
President during the applicable performance period, as determined in good faith
by the Committee.

	 	 	 	You shall be entitled to a cash payment under paragraph 6 below for each vested
performance unit as determined under this paragraph 4(b). All remaining unvested
performance units are immediately forfeited on separation from service.
	 
	 	(c)	 	If you accept a position with Irwin Financial Corporation or one of its direct
or indirect subsidiaries during a performance period and are no longer President of
Irwin Home Equity at the end of a performance period, your change of position shall be
treated as a separation from service initiated by Irwin Home Equity for reasons other
than job performance under paragraph 4(b) above solely for purposes of determining the
vested percentage of your performance units. You shall be entitled to a cash payment
under paragraph 6 below for each vested performance unit as determined under this
paragraph 4(c).

5. Change of Control. All of your performance units shall fully vest upon a “Change of
Control of Irwin Home Equity” (as defined in the attached Exhibit), provided that you are then
employed as Irwin Home Equity’s President. You shall be entitled to a cash payment under paragraph
6 below for all your vested performance units as determined under this paragraph 5. The Committee
has final authority to construe and interpret whether there has been a Change of Control event
under this paragraph 5 and the date of such Change of Control.

6. Payments. To the extent that you have earned a vested right with respect to a
performance unit, you will receive a cash lump-sum payment equal to the value of that unit,
determined as of the “applicable valuation date” under paragraph 7 below, as follows:

	 	(a)	 	any payment pursuant to paragraph 3 shall be made as soon as administratively
practicable after the end of the applicable performance period, but no later than March
14th;
	 
	 	(b)	 	any payment pursuant to paragraph 4(b) shall be made as soon as
administratively practicable after your separation from service, but not later than
March 14th following your separation from service;
	 
	 	(c)	 	any payment pursuant to paragraph 4(c) shall be made as soon as
administratively practicable after the earlier of your separation from service or the
expiration of the applicable performance period, but no later than December 31st of the
calendar year in which such separation or expiration, as applicable, occurs; and
	 
	 	(d)	 	any payment pursuant to paragraph 5 shall be made as a soon as administratively
practicable after the applicable Change of Control, but in no event more than 60 days
after such event.

 

 

Payment may be delayed by Irwin Home Equity (and not you) after the applicable payment due date
described above only as permitted under Section 409A of the Code and regulations, rulings, notices
and other guidance issued thereunder. In that regard, Irwin Home Equity shall delay any payment
that, if made prior to a Change of Control, would not be deductible due to Section 162(m) of the
Internal Revenue Code, and any such delayed payment will be made when deductibility will not be
limited by Section 162(m), as reasonably determined by the Committee. The maximum payment that you
may receive with respect to all performance units subject to this letter is $7,000,000.

7. Valuation of Units. The initial value of each performance unit granted to you is
$1,000. The value of each outstanding performance unit as of the applicable valuation event (as
defined below) for a performance unit will be calculated by multiplying $1,000 by a fraction, the
numerator of which is the Irwin Home Equity line of business value as of the prior quarter’s
valuation unless the applicable valuation event occurs on a quarter end date, and the denominator of
which is the Irwin Home Equity line of business value on June 30, 2006. For purposes of this
paragraph 7, the “applicable valuation event” shall be:

	 	(a)	 	the last day of the applicable performance period for any payment pursuant to
paragraph 3;
	 
	 	(b)	 	your separation from service for any payment pursuant to paragraph 4(b);
	 
	 	(c)	 	the date you accept a position with Irwin Financial Corporation or one of its
direct or indirect subsidiaries other than as President of Irwin Home Equity for any
payment pursuant to paragraph 4(c); and
	 
	 	(d)	 	the Change of Control of the Company or the Change of Control of Irwin Home
Equity, as applicable, for any payment pursuant to paragraph 5.

8. Valuation Methodology. The standard value is fair market value. Valuations may be
done by an outside appraiser in conformity with the Uniform Standards of Professional
Appraisal Practice or by the use of publicly available data such as industry price-earnings
multiples if, in the sole discretion of the Committee, it is believed that publicly available
data will reasonably approximate a valuation done by an outside appraiser. If an outside
appraiser is used the appraiser will recommend a valuation approach or approaches, such as the
combination of a market approach, income approach and net asset approach. Valuations are
performed annually unless the Committee determines that significant volatility suggests the
need for more frequent valuations. Valuations should be adjusted for any capital
contributions.

9. Tax Withholding. Irwin Home Equity may withhold from any amounts payable under
this letter or otherwise such federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.

 

 

10. Assignment. You may not pledge, assign, or transfer any of the performance units prior
to payment, except by will or the laws of descent and distribution.

11. No Rights to Future Employment. This letter shall not be construed to grant you the
right to be retained as President of Irwin Home Equity or as an employee of Irwin Home Equity or
its affiliates.

12. Unfunded Obligation. All payments to be made under this letter shall be paid from the
general funds of Irwin Home Equity and no special or separate fund shall be established and no
segregation of assets shall be made to assure payment of such amounts. You will not have a right,
title, or interest whatsoever in or to any investments which Irwin Home Equity may make to aid it
in meeting its obligations under this letter.

13. Entire Agreement: Modification. This letter contains the entire agreement between you,
Irwin Home Equity and its affiliates concerning the matters set forth herein and supersedes any
other discussions, agreements, representations or warranties of any kind with regard to these
matters. If for any reason any provision of this letter shall be held invalid, that invalidity
will not affect the remainder of this letter.

14. Acknowledgment. You acknowledge that you have had an opportunity to fully discuss and
review the terms of this letter with an attorney of your own choosing. You further acknowledge
that you have carefully read this letter, understand its contents and freely and voluntarily assent
to all of its terms and conditions, and sign your name of your own free act.

15. Governing Law. The provisions of this letter shall be governed by the laws of Indiana
(excluding conflicts of laws).

Please review this letter carefully and, if it correctly states our agreement, sign and return to
me the enclosed copy.

Best regards,

/s/ Tom Washburn

Tom Washburn, Executive Vice President

Read, accepted and agreed to this 6th day of February, 2007

	 	 	 	 	 
	 	 	 
	/s/ Jocelyn Martin-Leano
 	 
	Jocelyn Martin-Leano 	 
	 	 	 

 

 

	 	 	 	 	 

EXHIBIT

CHANGE OF CONTROL OF IRWIN HOME EQUITY

A “Change of Control of Irwin Home Equity” for purposes of this letter shall mean the occurrence of
any of the following events:

	(a)	 	Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended), other than (i) a trustee or other fiduciary holding securities under an
employee benefit plan of Irwin Financial Corporation or any of its subsidiaries, or (ii) an
entity owned directly or indirectly by the stockholders of Irwin Financial Corporation in
substantially the same proportions as their ownership of stock of Irwin Financial Corporation,
is or becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of Irwin Home Equity representing 50% or more of the total voting
power of the then outstanding shares of capital stock of Irwin Home Equity entitled to vote
generally in the election of directors (the “Voting Stock”); or
	 
	(b)	 	Irwin Home Equity shall become a party to an agreement of a reorganization, merger or
consolidation or the sale or other disposition of all or substantially all of its assets (a
“Business Combination”), in each case, unless all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Voting Stock immediately prior
to such Business Combination beneficially own, directly or indirectly, more than 50% of the
total voting power represented by the voting securities entitled to vote generally in the
election of directors of the corporation resulting from the Business Combination (including,
without limitation, a corporation which as a result of the Business Combination owns Irwin
Home Equity’s or all or substantially all of Irwin Home Equity’s assets either directly or
through one or more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to the Business Combination of the Voting Stock of the Company.

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