Exhibit 10.2

TRANSATLANTIC HOLDINGS, INC.

SENIOR PARTNERS PLAN

1.        PURPOSE

          The Compensation Committee of the Board of Directors (the “Committee”)
of Transatlantic Holdings, Inc. (“TRH”) has determined that certain key
employees of TRH and its subsidiaries (together, the “Employer”) contribute
substantially to the long-term growth and profitability of TRH. TRH has created
this TRH Senior Partners Plan (this “Plan”) to reward these individuals and to
provide incentives for their continued contribution to the long-term performance
of TRH.

2.        PERFORMANCE PERIODS

          This Plan will operate for successive overlapping three-year periods
(each, a “Performance Period”). The first Performance Period will be from
January 1, 2006 through December 31, 2008. The second Performance Period will be
from January 1, 2007 through December 31, 2009. Thereafter, each Performance
Period will be for successive three calendar-year periods until the Plan is
terminated by the Committee.

3.        PERFORMANCE RSUS AND PARTICIPANTS

          A. PERFORMANCE RSUS. Performance-based Restricted Stock Units awarded
pursuant to this Plan (“Performance RSUs”) will provide holders the opportunity
to earn shares of Common Stock of TRH (“Shares”) based on the growth in TRH’s
Book Value per Share during the Performance Period to which the Performance RSUs
relate.

          B. PARTICIPANTS. The Committee will, from time to time, determine (1)
the key employees of the Employer who will be awarded Performance RSUs under
this Plan (the “Participants”), (2) the number of Performance RSUs awarded to
each Participant and (3) the Performance Period to which the Performance RSUs
relate.

          C. STATUS OF PERFORMANCE RSUS. Performance RSUs awarded pursuant to
this plan are issued under the TRH 2003 Stock Incentive Plan or any successor
plan, as amended from time to time (the “SIP”). Each Performance RSU constitutes
an unfunded and unsecured promise of TRH to deliver (or cause to be delivered)
one Share at the relevant delivery date. Until such delivery, a holder of
Performance RSUs will have only the rights of a general unsecured creditor and
no rights as a shareholder of TRH. TRH may, at its option deliver cash in lieu
of Shares otherwise deliverable under earned Performance RSUs. References in
this Plan to Shares include cash in lieu thereof.

4.        PERFORMANCE TARGETS AND EARNED RSUS

          A. PERFORMANCE TARGETS. The Committee will, from time to time,
determine the “Target”, “Threshold” and “Maximum” performance targets for each
Performance Period, based on Growth in Book Value per Share over the Performance
Period or based on one or more of the other Performance Objectives as set forth
in the SIP.

          B. EARNED PERFORMANCE RSUS. At the end of each Performance Period, the
Committee will determine the number of Performance RSUs earned for the
Performance Period. Subject to the conditions of this Plan, the number of
Performance RSUs earned for a Performance Period will be determined as follows:

 

 

 

 

GROWTH IN BOOK VALUE PER SHARE
FOR THE PERFORMANCE PERIOD

 

PERCENTAGE OF
PERFORMANCE
RSUS EARNED

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Performance less than Threshold

 

0

%

Performance at least Threshold

 

25

%

Performance at Target

 

100

%

Performance at or above Maximum

 

200

%

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          The percentage of Performance RSUs earned for performance between
Threshold and Target and between Target and Maximum will be determined on a
straight-line basis.

          C. DEFINITIONS.

                         (1) “Growth in Book Value per Share” means, for any
Performance Period, the compounded annual growth rate in Book Value Per Share
measured at the end of the third year of the Performance Period over the Book
Value Per Share measured at the end of the year prior to the beginning of the
Performance Period.

                         (2) “Book Value per Share” means, for any year, Book
Value per Share of TRH common stock calculated on a consolidated basis in
accordance with U.S. Generally Accepted Accounting Principles (a) without giving
effect to (i) the effect of Statement of Financial Accounting Standards No.
(“SFAS”) 115 on investments, (ii) the cumulative effect of changes in accounting
treatment during the relevant periods, net of tax, (iii) the cumulative effect
of changes in tax laws during the relevant periods, (iv) SFAS 133 gains and
losses, excluding realized capital gains or losses, net of tax or (v)
extraordinary items related to acquisition, restructuring and related charges,
net of tax; (b) with adjustments for any stock split or stock dividend during
the relevant period and (c) with adjustments in the case of acquisitions to
equalize the effect of acquisitions for cash and acquisitions for TRH common
stock.

          D. PARTNERS PLAN CONDITION. Notwithstanding Section 4A, the Growth in
Book Value per Share of a Performance Period will be zero if the conditions are
not satisfied for the funding threshold of the TRH Partners Plan for the period
beginning with the same year as the Performance Period. The Committee will, from
time to time, designate the TRH Partners Plan and the funding threshold
condition that will apply for this Section 4D.

5.         VESTING OF EARNED PERFORMANCE RSUS

          A. GENERAL. Earned Performance RSUs will vest in two equal
installments promptly after the fourth and sixth anniversaries of the first day
of the Performance Period to which the Performance RSUs relate (each a
“Scheduled Vesting Date”). Except as provided in Sections 5B, 6 and 7A, if a
Participant’s employment with the Employer is terminated for any reason, the
Participant’s rights in respect of any Performance RSUs that would vest on a
future Scheduled Vesting Date will be forfeited and terminate.

          B. DEATH, DISABILITY OR RETIREMENT AFTER AGE 65. If a Participant
dies, becomes subject to permanent disability or retires at or after age 65, in
each case while actively employed by the Employer, any outstanding earned
Performance RSUs will vest. For this purpose “permanent disability” has the
meaning defined in the American International Group, Inc. Long-Term Insurance
Policy (applicable to TRH employees) as in effect on the relevant date (or, if
none, will be determined by the Committee in its sole discretion).

          C. DELAY OF VESTING. Participants may, in the Committee’s sole
discretion, be permitted to elect to defer vesting of Performance RSUs under a
separate TRH deferral program in accordance with Section 409A of the Internal
Revenue Code (the “Code”). In addition, the Committee may, in its sole
discretion, determine to defer vesting of Performance RSUs in accordance with
Section 409A of the Code.

6.         VESTING DURING A PERFORMANCE PERIOD

          A. GENERAL. Except as provided in Section 6B, if a Participant’s
employment with the Employer is terminated for any reason during a Performance
Period, all of the Participant’s Performance RSUs relating to the Performance
Period will be forfeited and terminate.

          B. DEATH, DISABILITY OR RETIREMENT AFTER AGE 65. If a Participant
dies, becomes subject to permanent disability or retires at or after age 65
during a Performance Period, in each case while actively employed by the
Employer, the Participant will be eligible to receive a pro-rated amount (based
upon the number of whole or partial months the Participant was employed during
the Performance Period relative to 36 months) of the Performance RSUs earned for
such Performance Period based on TRH’s performance during the entire Performance
Period.

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7.        ADMINISTRATION OF THIS PLAN

          A. GENERAL. This Plan will be administered by the Committee. Actions
of the Committee may be taken by the vote of a majority of its members. The
Committee will have power to interpret this Plan, to make regulations for
carrying out its purpose and to make all other determinations in connection with
its administration, all of which will, unless otherwise determined by the
Committee, be final, binding and conclusive. The Committee will have the power
to decrease the number of a Participants’ Performance RSUs that are earned for a
Performance Period.

          B. NON-UNIFORM DETERMINATIONS. The Committee’s determinations under
this Plan need not be uniform and may be made by it selectively among persons
who receive, or are eligible to receive, Performance RSUs under this Plan
(whether or not such persons are similarly situated). Without limiting the
generality of the foregoing, the Committee will be entitled, among other things,
to make non-uniform and selective determinations as to (1) the persons to become
Participants and (2) whether a Participant’s employment with the Employer has
been terminated for purposes of this Plan.

          C. AMENDMENTS. The Committee will have the power to amend this Plan in
any manner and at any time, including in a manner adverse to the rights of the
Participants.

          D. NO LIABILITY. No member of the Board of Directors of TRH or the
Committee or any employee of the Employer (each, a “Covered Person”) will have
any liability to any person (including any Participant) for any action taken or
omitted to be taken or any determination made in good faith with respect to this
Plan or any Participant’s participation in it. Each Covered Person will be
indemnified and held harmless by TRH against and from any loss, cost, liability,
or expense (including attorneys’ fees) that may be imposed upon or incurred by
such Covered Person in connection with or resulting from any action, suit or
proceeding to which such Covered Person may be a party or in which such Covered
Person may be involved by reason of any action taken or omitted to be taken
under this Plan and against and from any and all amounts paid by such Covered
Person, with TRH’s approval, in settlement thereof, or paid by such Covered
Person in satisfaction of any judgment in any such action, suit or proceeding
against such Covered Person, provided that TRH will have the right, at its own
expense, to assume and defend any such action, suit or proceeding and, once TRH
gives notice of its intent to assume the defense, TRH will have sole control
over such defense with counsel of TRH’s choice. The foregoing right of
indemnification will not be available to a Covered Person to the extent that a
court of competent jurisdiction in a final judgment or other final adjudication,
in either case, not subject to further appeal, determines that the acts or
omissions of such Covered Person giving rise to the indemnification claim
resulted from such Covered Person’s bad faith, fraud or willful misconduct. The
foregoing right of indemnification will not be exclusive of any other rights of
indemnification to which Covered Persons may be entitled under TRH’s Restated
Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any
other power that TRH may have to indemnify such persons or hold them harmless.

          E. ADJUSTMENTS. The Committee shall adjust equitably outstanding
and/or earned Performance RSUs to preserve the benefits or potential benefits
intended to be made available to Participants for any change in the TRH common
stock resulting from a recapitalization, combination or exchange of shares of
TRH common stock, merger, consolidation, rights offering, separation,
reorganization or liquidation, or any other change in the corporate structure or
shares of TRH. In addition, the Committee shall recompute the BVPS or other
Performance Objective in connection with any restatement of TRH’s financial
statements.

8.        GENERAL RULES

          A. SIP. All terms of the SIP shall apply to Performance RSUs.
Notwithstanding any other provision existing within this Plan, the Performance
RSUs awarded pursuant to this Plan will not exceed any per person per period
award limit under the SIP.

          B. ONLY WHOLE RSUS. Only whole Performance RSUs will be earned by
Participants. Fractional Performance RSUs that would otherwise be earned with
respect to a Performance Period will be rounded down to the nearest whole
Performance RSU, and any such fractional Performance RSUs will be forfeited.

          C. NO RIGHTS TO OTHER PAYMENTS. The provisions of this Plan provide no
right or eligibility to a Participant to any other payouts from TRH or its
subsidiaries under any other alternative plans, schemes, arrangements or
contracts TRH may have with any employees or group of employees of TRH or its
subsidiaries.

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          D. NO EFFECT ON BENEFITS. Grants and payments under this Plan will
constitute special discretionary incentive payments to the Participants and will
not be required to be taken into account in computing the amount of salary or
compensation of the Participants for the purpose of determining any
contributions to or any benefits under any pension, retirement, profit-sharing,
bonus, life insurance, severance or other benefit plan of the Employer or under
any agreement with a Participant, unless the Employer specifically provides
otherwise.

          E. SECTION 409A PAYMENT DELAY. Notwithstanding any provision to the
contrary in this Plan, to the extent any payment to be made to a Participant in
connection with the Participant’s termination of service with the Employer would
be subject to the additional tax of Section 409A of the Code, the payment will
be delayed until six months after a Participant’s termination of service with
the Employer (or earlier death or disability (within the meaning of Section 409A
of the Code)).

          F. SEVERABILITY. If any of the provisions of this Plan is finally held
to be invalid, illegal or unenforceable (whether in whole or in part), such
provision will be deemed modified to the extent, but only to the extent, of such
invalidity, illegality or unenforceability and the remaining provisions will not
be affected thereby; provided, that if any of such provisions is finally held to
be invalid, illegal, or unenforceable because it exceeds the maximum scope
determined to be acceptable to permit such provision to be enforceable, such
provision will be deemed to be modified to the minimum extent necessary to
modify such scope in order to make such provision enforceable hereunder.

          G. ENTIRE AGREEMENT. This Plan contains the entire agreement of the
parties with respect to the subject matter thereof and supersedes all prior
agreements, promises, covenants, arrangements, communications, representations
and warranties between them, whether written or oral with respect to the subject
matter thereof.

          H. WAIVER OF CLAIMS. Each Participant recognizes and agrees that prior
to being selected by the Committee to receive an award of Performance RSUs he or
she has no right to any benefits under this Plan. Accordingly, in consideration
of the Participant’s receipt of any Performance RSUs hereunder, he or she
expressly waives any right to contest the amount of any Performance RSUs, the
terms of this Plan, any determination, action or omission hereunder by the
Committee or TRH or any amendment to this Plan.

          I. NO THIRD PARTY BENEFICIARIES. Except as expressly provided therein,
this Plan will not confer on any person other than TRH and the Participant any
rights or remedies there under. The exculpation and indemnification provisions
of Section 7D will inure to the benefit of a Covered Person’s estate and
beneficiaries and legatees.

          J. TRH’S SUCCESSORS AND ASSIGNS. The terms of this Plan will be
binding upon and inure to the benefit of TRH and its successors and assigns.

          K. RIGHT OF OFFSET. TRH will have the right to offset against the
obligation to pay an amount to any Participant, any outstanding amounts
(including, without limitation, travel and entertainment or advance account
balances, loans or amounts repayable to it pursuant to tax equalization,
housing, automobile or other employee programs) such Participant then owes to
the Employer.

          L. NONASSIGNABILITY. The Performance RSUs will not be assignable,
transferable, pledged, hedged or in any manner alienated, whether by operation
of law or otherwise, except as a result of death or incapacity where such rights
are passed pursuant to a will or by operation of law. Any assignment, transfer,
pledge, or other disposition in violation of the provisions of this Section 8L
will be null and void and any Performance RSUs that are hedged in any manner
will immediately be forfeited.

          M. RIGHT TO DISCHARGE. Nothing contained in this Plan or in any award
of Performance RSUs will confer on any Participant any right to be continued in
the employ of the Employer or to be included in any future plans of a similar
nature.

          N. CONSENT. If the Committee will at any time determine that any
consent (as hereinafter defined) is necessary or desirable as a condition of, or
in connection with, the awarding, earning or vesting of any Performance RSUs,
the delivery of Shares in respect thereof or the payment of any amount under
this Plan, or the taking of any other action there under (each such action, a
“plan action”), then such plan action will not be taken, in whole or in part,
unless and until such consent will have been effected or obtained to the full
satisfaction of the Committee.

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          The term “consent” as used in this paragraph includes (1) any and all
listings, registrations or qualifications in respect thereof upon any securities
exchange or under any federal, state, or local law, or law, rule or regulation
of a jurisdiction outside the United States, (2) any other matter, which the
Committee may deem necessary or desirable to comply with the terms of any such
listing, registration or qualification or to obtain an exemption from the
requirement that any such listing, qualification or registration be made, (3)
any and all other consents, clearances and approvals in respect of a plan action
by any governmental or other regulatory body or any stock exchange or
self-regulatory agency and (4) any and all consents required by the Committee.

          O. SUBJECT TO ANY TRH SECTION 162(m) PLAN. TRH has proposed and had
approved by the TRH shareholders the SIP in accordance with Section 162(m) of
the Code and Treasury Regulation Section 1.162-27(e) (4). This Plan is a
sub-plan under the TRH Section 162(m) Plan, whereby performance compensation
amounts payable will not be subject to the deduction limitation of Section
162(m) of the Code.

          P. ADOPTION. This plan was adopted on August 15, 2006 by the
Committee.

9.       DISPUTES

          A. GOVERNING LAW. This Plan will be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflict of laws.

          B. DISPUTE RESOLUTION AND RELATED PROVISIONS. TRH agrees to the
following provisions. By the acceptance of any award of Performance RSUs, each
Participant agrees to accept the provisions of this Plan, including, without
limitations, the following:

                     (1) ARBITRATION. Subject to the provisions of this Section
9, any dispute, controversy or claim between TRH and a Participant, arising out
of or relating to or concerning this Plan or any Performance RSUs will be
finally settled by arbitration in New York City before, and in accordance with
the rules then obtaining of, the New York Stock Exchange, Inc. (the “NYSE”) or,
if the NYSE declines to arbitrate the matter (or if the matter otherwise is not
arbitrable by it), the American Arbitration Association (the “AAA”) in
accordance with the commercial arbitration rules of the AAA. Prior to
arbitration, all claims maintained by a Participant must first be submitted to
the Committee in accordance with claims procedures determined by the Committee.

                    (2) JURISDICTION. TRH and each Participant hereby
irrevocably submit to the exclusive jurisdiction of a state or federal court of
appropriate jurisdiction located in the Borough of Manhattan, the City of New
York over any suit, action or proceeding arising out of or relating to or
concerning this Plan or any Performance RSUs that are not otherwise arbitrated
or resolved according to Section 9B (1). TRH and each Participant acknowledge
that the forum designated by this section has a reasonable relation to this Plan
and to such Participant’s relationship with TRH.

                    (3) WAIVER. TRH and each Participant waive, to the fullest
extent permitted by applicable law, any objection which TRH and such Participant
now or hereafter may have to personal jurisdiction or to the laying of venue of
any such suit, action or proceeding in any court referred to in Section 9B(2).
TRH and each Participant undertake not to commence any action, suit or
proceeding arising out of or relating to or concerning this Plan or any
Performance RSUs in any forum other than a forum described in Section 9B(2).

                    (4) SERVICE OF PROCESS. Each Participant irrevocably
appoints the Secretary of TRH at 70 Pine Street, New York, New York 10270,
U.S.A. as his or her agent for service of process in connection with any action,
suit or proceeding arising out of or relating to or concerning this Plan or any
Performance RSUs that are not otherwise arbitrated or resolved according to
Section 9B (1). The Secretary will promptly advise the Participant of any such
service of process.

          C. CONFIDENTIALITY. By the acceptance of any award of Performance
RSUs, each Participant agrees to keep confidential any information concerning
any grant made under this Plan and any dispute, controversy or claim relating to
this Plan, except that a Participant may disclose information concerning a
dispute or claim to the court that is considering such dispute or to such
Participant’s legal counsel (provided that such counsel agrees not to disclose
any such information other than as necessary to the prosecution or defense of
the dispute).

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10.     TERM OF PLAN

          This Plan will continue until suspended or terminated by the Committee
in its sole discretion. Any termination of this Plan will be done in a manner
that the Committee determines complies with Section 409A of the Code.

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