Document:

exhibit10-1.htm

     

    
      

       

      SECOND
AMENDED AND RESTATED EMPLOYMENT AGREEMENT

       

      This
Second Amended and Restated Employment Agreement (the “Agreement”) is entered
into as of November 17, 2009 (the “Effective Date”) by and between Plantronics,
Inc., a Delaware corporation (the “Company”) and S. Kenneth Kannappan (the
“Executive”) and amends and restates in its entirety the Amended and Restated
Employment Agreement entered into between the Company and the Executive on
January 26, 2009.

       

      RECITALS

       

      A.           The
Executive is currently employed by the Company.

       

      B.           The
Company and the Executive desire to enter into an agreement that clarifies the
rights and obligations of the Company and the Executive in connection with
Executive’s employment with the Company and in the event that the Executive’s
employment with the Company terminates under certain circumstances.

       

      C.           The
Company believes it is in the best interest of the Company and its stockholders
to provide the Executive with an incentive to continue his employment and to
motivate the Executive to maximize the value of the Company upon a Change of
Control for the benefit of its stockholders.

       

      D.           The
Company believes that it is imperative to provide the Executive with certain
enhanced severance benefits upon the Executive’s termination of
employment following a Change of Control.  These benefits will provide
the Executive with financial security and incentive and encouragement to remain
with the Company notwithstanding the possibility of a Change of
Control.

       

      E.           This
Agreement amends and restates the Amended and Restated Employment Agreement
dated January 26, 2009 between the Company and the Executive.

       

      AGREEMENT

       

      NOW,
THEREFORE, the parties agree as follows:

       

      1. Employment and
Duties.  During the Employment Period (defined in
paragraph 2 below), the Executive will serve as President and Chief
Executive Officer of the Company and such of the Company’s other affiliates and
subsidiaries as the Board of Directors of the Company (the “Board”) may from
time to time direct.  The duties and responsibilities of the Executive
shall include the duties and responsibilities for the Executive’s corporate
offices and positions as set forth in the Company’s bylaws from time to time in
effect and such other duties and responsibilities as the Board may from time to
time reasonably assign to the Executive, in all cases to be consistent with the
Executive’s corporate offices and positions.  The Executive shall
perform faithfully the executive duties assigned to him to the best of his
ability.  The Executive also serves as a member of the Board, and
during the Employment Period agrees to serve in such capacity without additional
compensation.  If the Executive is elected or appointed as an officer
or director of any of the Company’s affiliates or subsidiaries during the
Employment Period, then he shall also serve in such capacity or capacities but
without additional compensation.

       

      2. Employment
Period.  The employment period (the “Employment Period”) shall
begin upon the Effective Date and shall continue thereafter for an initial term
of one (1) year, unless sooner terminated in accordance with paragraph 10
below.  After the initial one (1)-year Employment Period, or any
extension term, this Agreement shall be automatically extended for additional
one (1)-year terms, unless sooner terminated in accordance with
paragraph 10 below or unless either party provides written notice of
non-renewal to the other at least 90 days prior to the end of the then current
term.  Notwithstanding the foregoing, if a Change of Control occurs at
any time during the Employment Period, the term of this Agreement shall extend
automatically through the date that is twenty-four (24) months following the
effective date of the Change of Control.

       

      3. Place of
Employment.  The Executive’s services shall be performed at the
Company’s principal executive offices in Santa Cruz, California.  The
parties acknowledge, however, that the Executive may be required to travel in
connection with the performance of his duties hereunder.

       

      4. Base
Salary.  For all services to be rendered by the Executive
pursuant to this Agreement, the Company agrees to pay the Executive during the
Employment Period a base salary (the “Base Salary”) at an annual rate of not
less than $627,000.   The Base Salary shall be paid in periodic
installments in accordance with the Company’s regular payroll
practices.  The Company agrees to review the Base Salary at least
annually, and to make such increases therein as the Board may
approve.

       

      5. Incentive
Bonus.  Beginning with the Company’s current fiscal year and
for each fiscal year thereafter during the Employment Period, the Executive will
be eligible to receive Quarterly and Annual bonuses (together, the “Incentive
Bonus”) based upon certain financial criteria set by the Compensation Committee
of the Board, including revenue and profitability targets and other
organizational milestones.  The Incentive Bonus payable hereunder
shall be payable consistent with the Company’s past practices and policies, but
shall be payable no later than the fifteenth day of the third month following
the later of the end of the Executive’s taxable year or the end of the Company’s
taxable year following the date the Incentive Bonus is no longer subject to a
substantial risk of forfeiture.

       

      6. Expenses.  The
Executive shall be entitled to prompt reimbursement by the Company for all
reasonable ordinary and necessary travel, entertainment and other expenses
incurred by the Executive during the Employment Period (in accordance with the
policies and procedures established by the Company for its senior executive
officers) in the performance of his duties and responsibilities under this
Agreement, provided that the Executive shall properly account for such expenses
in accordance with Company policies and procedures.

       

      7. Other
Benefits.  During the Employment Period, the Executive shall be
entitled to all of the fringe benefit programs that the Company and its
subsidiaries make available to senior officers in accordance with the terms and
conditions of such programs.

       

      8. Vacations and
Holidays.  The Executive shall be entitled to paid vacations
and holidays in accordance with the Company’s policies in effect from time to
time for its senior executive officers.  The Executive shall be
entitled to accrue into the following year vacation unused in a given year,
provided that the total vacation balance at any time shall not be twice the
annual vacation allowance.

       

      9. Other
Activities.  The Executive shall devote substantially all of
his working time and efforts during the Company’s normal business hours to the
business and affairs of the Company and its subsidiaries and to the diligent and
faithful performance of the duties and responsibilities duly assigned to him
pursuant to this Agreement, except for vacations, holidays and
sickness.  However, the Executive may devote a reasonable amount of
his time to civic, community or charitable activities and, with the prior
written approval of the Board, to serve as director of other corporations,
provided that such activities do not materially interfere with the Executive’s
obligations hereunder (except that the Executive shall in any event be permitted
to continue serving on the board of directors of Mattson Technology,
Inc.).

       

      10. Severance
Benefits.

       

      (a) Termination for any Reason
Other than for Cause.  If the Executive’s employment terminates
for any reason (other than for Cause) on or after the Effective Date, and the
Executive signs and does not revoke a release of claims with the Company (in a
form reasonably acceptable to the Company) and provided that such release of
claims becomes effective no later than sixty (60) days following the termination
date or such earlier date required by the release agreement (such deadline, the
“Release Deadline”), then, in exchange for the consideration set forth in this
Agreement including but not limited to the Covenant
Not  to  Compete or Solicit found in paragraph 13, and
subject to this paragraph 10, Executive shall receive the following for the
period of twenty-four (24) months following the Termination Date (the “Severance
Payment Period”): (i) continued cash compensation payments equal to
seventy-five percent (75%) of the average of the cash compensation earned in the
four (4) full fiscal quarters immediately preceding the Termination Date;
provided, however, that during fiscal year 2011, the time period for calculating
seventy-five percent (75%) of the average of the cash compensation earned shall
be measured by the cash compensation earned in the eight (8) full fiscal
quarters immediately preceding the Termination Date and in fiscal year 2012 and
thereafter, the time for calculating seventy-five percent (75%) of the average
cash compensation earned shall be measured by the cash compensation earned in
the twelve (12) full fiscal quarters immediately preceding the Termination Date
and (ii) the continued provision of “Company Benefits,” including “Medical
Benefits” (as defined in paragraph 11(c)). If Executive voluntarily reduces
his compensation as a cost reduction measure, Executive’s continued cash
compensation payment shall not be calculated as outlined in subsection (i) of
this section, but instead, the continued cash compensation payment calculation
shall equal seventy-five percent (75%) of the average of the cash compensation
earned in the number of full fiscal quarters as specified in subjection (i) of
this section as if the voluntary reduction was not implemented. To remove any
ambiguity in the foregoing amount, after the foregoing payments are completed,
the Executive shall have received a total of 1.5 times the average of the cash
compensation payments earned in the number of full fiscal quarters as specified
in subjection (i) of this section (disregarding any voluntary reduction of the
Executive’s cash compensation). “Cash compensation” as used in this paragraph
shall mean Base Salary and Incentive Bonus earned in the applicable fiscal
quarters, even if the amounts are paid in subsequent periods.  The
cash compensation shall be payable at the same time(s) as payable to employees
of the Company.  Such payments and the provision of Company Benefits
shall be discontinued and the Company shall be entitled to a refund of all
compensation paid upon a breach by the Executive of his obligations under
paragraph 12 (Proprietary Information ) or paragraph 13 (Covenant Not to
Compete or Solicit) hereof.

       

      (b)  Termination for
Cause.  If the Executive is terminated for Cause, then the
Executive shall not be entitled to receive severance or other benefits under
this Agreement, but will be entitled to receive benefits (if any) as may then be
established under the Company’s then existing severance and benefits plans and
policies at the time of such termination for similar types of
terminations.

       

      (c) Termination without Cause or
Resignation for Good Reason in Connection with a Change of
Control.  If the Company terminates the Executive’s employment
with the Company without Cause or if the Executive resigns from such employment
for Good Reason, and such termination occurs on or within twenty-four (24)
months after a Change of Control, and the Executive signs and does not revoke a
release of claims with the Company (in a form reasonably acceptable to the
Company) and provided that such release of claims becomes effective no later
than the Release Deadline, then subject to this paragraph 10, Executive shall
receive the following:

       

      (i) Accrued
Compensation.  The Company shall pay the Executive all accrued
but unpaid vacation, expense reimbursements, wages, and other benefits due to
the Executive under any Company-provided plans, policies, and
arrangements.

       

      (ii) Severance
Payment.  The Executive shall receive a lump-sum payment (less
applicable withholding taxes) equal to the sum of (A) three hundred percent
(300%) of the Executive’s Base Salary as in effect immediately prior to the
Executive’s termination date or (if greater) at the level in effect immediately
prior to the Change of Control, (B) one hundred percent (100%) of the
Executive’s quarterly target Incentive Bonus, and (C) one hundred percent (100%)
of the Executive’s annual target Incentive Bonus. If Executive voluntarily
reduces his compensation as a cost reduction measure, Executive’s lump-sum
payment for purposes of this subsection shall be calculated based on Executive’s
Base Salary, quarterly target Incentive Bonus, and annual target Incentive Bonus
before a voluntary reduction was taken of Executive’s compensation.

       

      (iii) Continued Employee
Benefits.  If the Executive elects continuation coverage
pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”) or the California Continuation Benefits Replacement Act, as
amended (“Cal-COBRA”) for periods of coverage beyond that permitted by COBRA for
the Executive and the Executive’s eligible dependents, within the time period
prescribed pursuant to COBRA, or Cal-COBRA, as applicable, the Company shall
reimburse the Executive for the COBRA (or, if applicable, Cal-COBRA) premiums
for such coverage (at the coverage levels in effect immediately prior to the
Executive’s termination) until the earlier of (A) a period of thirty-six (36)
months from the last date of employment of the Executive with the Company, or
(B) the date upon which the Executive and/or the Executive’s eligible dependents
becomes covered under similar plans.  COBRA reimbursements shall be
made by the Company to the Executive consistent with the Company’s normal
expense reimbursement policy.

       

      (d) Timing of
Payments.

       

      (i) If the
release of claims does not become effective by the Release Deadline, the
Executive shall forfeit any rights to severance or benefits under
paragraph 10 of this Agreement.  In no event shall severance
payments or benefits be paid or provided pursuant to paragraph 10 until the
release of claims actually becomes effective.  In the event the
termination occurs at a time during the calendar year where the release of
claims could become effective in the calendar year following the calendar year
in which the Executive’s termination occurs (whether or not it actually becomes
effective in the following year), then any severance payments or benefits to
which the Executive becomes entitled under this Agreement that would be
considered Deferred Compensation Severance Benefits (as defined in paragraph
10(h)(i)) shall be paid on the first payroll date to occur during the calendar
year following the calendar year in which such termination occurs, or, if later,
(i) the date the release of claims actually becomes effective, (ii) such
time as required by the payment schedule applicable to each payment or benefit
as set forth in paragraph 10, or (iii) such time as required by paragraph
10(h).

       

      (ii) Unless
otherwise required by paragraph 10(h), the Company shall pay any severance
payments (as provided for in paragraph 10(c)), in a lump-sum payment payable
within thirty (30) days following the Executive’s Termination Date; provided,
however, that no severance or other benefits shall be paid or provided until the
release of claims discussed in paragraph 10 becomes effective and irrevocable,
and any severance amounts or benefits otherwise payable between the Executive’s
Termination Date and the date such release becomes effective and irrevocable
shall be paid on the date the release becomes effective and
irrevocable.  If the Executive should die before all of the severance
amounts have been paid, such unpaid amounts shall be paid in a lump-sum payment
promptly following such event to the Executive’s designated beneficiary, if
living, or otherwise to the personal representative of the Executive’s
estate.

       

      (e) Exclusivity of
Payments.  Notwithstanding anything in this Agreement to the
contrary, if the Executive receives payments or benefits pursuant to paragraph
10(a) of this Agreement, then such payments or benefits shall be in lieu of any
payments or benefits that the Executive may be entitled to pursuant to paragraph
10(c) of this Agreement.  If the Executive receives payments or
benefits pursuant to paragraph 10(c) of this Agreement, then such payments or
benefits shall be in lieu of any payments or benefits that Executive may be
entitled to pursuant to paragraph 10(a) of this Agreement.  If the
Executive is entitled to receive payments or benefits pursuant to both
paragraphs 10(a) and 10(c) of this Agreement, the Executive shall receive the
payments or benefits provided pursuant to either (but not both) paragraphs 10(a)
or 10(c), whichever of the foregoing shall provide him the greater economic
benefit.

       

      (f) Death/Disability.  In
the event the Executive’s employment with the Company terminates by reason of
the Executive’s death or Disability, the Company shall be obligated as
follows:

       

      (i) Death. The Company
will during the life of Executive and while he remains employed by the Company
pay for a term life insurance policy that will pay to the beneficiary or
beneficiaries designated by the Executive to the Company in writing or, absent
such designation, to the representative of the Executive’s estate the sum of
five million dollars ($5,000,000.) If Executive leaves the Company for any
reason, Executive shall be permitted to take the policy with him provided that
as of the date of his termination from the Company, Executive shall pay from his
own account all costs to maintain the policy.

       

      (ii) Disability.  During
the time the Executive is employed by the Company, the Company shall pay for a
disability insurance policy that will pay to Executive upon his termination from
the Company by reason of his Disability a benefit of one million five hundred
thousand dollars ($1,500,000) payable in accordance with the terms of such
policy.

       

      (g) Equity.  In
the event of a Change of Control or termination of the Executive’s employment on
or following the Change of Control, the unvested equity awards held by the
Executive shall be affected as follows:

       

      (i) Change of
Control.  In the event of a Change of Control, and subject to
the Executive’s continued employment with the Company through the effective date
of such Change of Control, all outstanding equity awards shall vest in full as
to one hundred percent (100%) of the unvested portion of the award.

       

      (ii) Involuntary Termination,
Death or Disability.  If the Executive’s employment terminates
as a result of Involuntary Termination (other than for Cause), or terminates
under circumstances described in paragraph 10(f), then that portion of any
outstanding equity awards which would vest had employment continued for the next
succeeding eighteen (18) months shall automatically be accelerated and the
Executive shall become fully vested in such common stock and/or shall have the
right to exercise all or any portion of such option to acquire common stock, in
addition to any portion of the option exercisable prior to such
termination.

       

      (iii) Voluntary Resignation after
the Effective Date.  If the Executive’s employment terminates
by reason of the Executive’s voluntary resignation on or after the Effective
Date, then that portion of any outstanding equity awards which would vest had
employment continued for the next succeeding twelve (12) months shall
automatically be accelerated and the Executive shall become fully vested in such
common stock and/or shall have the right to exercise all or any portion of such
option to acquire common stock, in addition to any portion of the option
exercisable prior to such termination.

       

      (iv) Termination for
Cause.  In the event of a termination of the Executive’s
employment for Cause, all unvested equity awards shall terminate upon the
Termination Date.

       

      (h) Section
409A.

       

      (i) Notwithstanding
anything to the contrary in this Agreement, no severance payable to the
Executive, if any, pursuant to this Agreement, when considered together with any
other severance payments or separation benefits that are considered deferred
compensation under Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”) and the final regulations and any guidance promulgated thereunder
(“Section 409A”) (together, the “Deferred Compensation Separation Benefits”)
shall be payable until the Executive has a “separation from service” within the
meaning of Section 409A.

       

      (ii) Notwithstanding
anything to the contrary in this Agreement, if the Executive is a “specified
employee” within the meaning of Section 409A at the time of the Executive’s
termination (other than due to death), then the Deferred Compensation Separation
Benefits that are payable within the first six (6) months following the
Executive’s separation from service, will become payable on the first payroll
date that occurs on or after the date six (6) months and one (1) day following
the date of the Executive’s separation from service.  All subsequent
Deferred Compensation Separation Benefits, if any, will be payable in accordance
with the payment schedule applicable to each payment or
benefit.  Notwithstanding anything herein to the contrary, if the
Executive dies following the Executive’s separation from service but prior to
the six (6) month anniversary of the separation, then any payments delayed in
accordance with this paragraph will be payable in a lump sum as soon as
administratively practicable after the date of the Executive’s death and all
other Deferred Compensation Separation Benefits will be payable in accordance
with the payment schedule applicable to each payment or benefit.  Each
payment and benefit payable under this Agreement is intended to constitute
separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury
Regulations.

       

      (iii) The
foregoing provisions are intended to comply with the requirements of Section
409A so that none of the severance payments and benefits to be provided
hereunder will be subject to the additional tax imposed under Section 409A, and
any ambiguities herein will be interpreted to so comply.  The Company
and the Executive agree to work together in good faith to consider amendments to
this Agreement and to take such reasonable actions which are necessary,
appropriate or desirable to avoid imposition of any additional tax or income
recognition prior to actual payment to the Executive under Section
409A.

       

      11. Definition of
Terms.  The following terms referred to in this Agreement shall
have the following meanings:

       

      (a) Cause.  “Cause”
shall mean the Executive’s (i) conviction of a felony, act of fraud
against, or the misappropriation of property belonging to the Company,
(ii) willful misconduct that is demonstrably and materially injurious to
the Company, or (iii) continued material violations of his obligation under
the Employee Agreement (defined in paragraph 12) or under
paragraphs 1, 9 or 13 of this Agreement after there has been delivered to
the Executive a written demand for performance from the Company that describes
such violations.

       

      (b) Change of
Control.  “Change of Control” shall mean the occurrence of any
of the following events:

       

      (i) Change in Ownership of the
Company.  A change in the ownership of the Company which occurs
on the date that any one person, or more than one person acting as a group
(“Person”), acquires ownership of the stock of the Company that, together with
the stock held by such Person, constitutes more than fifty percent (50%) of the
total voting power of the stock of the Company, except that any change in the
ownership of the stock of the Company as a result of a private financing of the
Company that is approved by the Board will not be considered a Change of
Control; or

       

      (ii) Change in Effective Control
of the Company.  A change in the effective control of the
Company which occurs on the date that a majority of members of the Board is
replaced during any twelve (12) month period by directors whose appointment or
election is not endorsed by a majority of the members of the Board prior to the
date of the appointment or election.  For purposes of this clause
(ii), if any Person is considered to be in effective control of the Company, the
acquisition of additional control of the Company by the same Person shall not be
considered a Change of Control; or

       

      (iii) Change in Ownership of a
Substantial Portion of the Company’s Assets.  A change in the
ownership of a substantial portion of the Company’s assets which occurs on the
date that any Person acquires (or has acquired during the twelve (12) month
period ending on the date of the most recent acquisition by such person or
persons) assets from the Company that have a total gross fair market value equal
to or more than fifty percent (50%) of the total gross fair market value of all
of the assets of the Company immediately prior to such acquisition or
acquisitions.  For purposes of this subsection (iii), gross fair
market value means the value of the assets of the Company, or the value of the
assets being disposed of, determined without regard to any liabilities
associated with such assets.

       

      For these
purposes, persons will be considered to be acting as a group if they are owners
of a corporation that enters into a merger, consolidation, purchase or
acquisition of stock, or similar business transaction with the
Company.

       

      Notwithstanding
the foregoing provisions of this definition, a transaction shall not be deemed a
Change of Control unless the transaction qualifies as a change in control event
within the meaning of Section 409A.

       

      (c) Company
Benefits.  “Company Benefits” shall mean the Company’s Medical
Benefits (defined below), its Automobile Expense Reimbursement Program, and its
disability, life or other group insurance benefits to the extent the Executive
is receiving such benefits immediately prior to the Termination Date, or such
comparable alternative benefits or payments as the Company may, in its
discretion, determine to be sufficient to satisfy its obligations to the
Executive under this Agreement.  “Medical Benefits” shall mean the
Group Medical/Dental Plan and the Exec-U-Care Medical Reimbursement Insurance
Program, as currently in effect (as adjusted for all then current executives),
or such comparable alternative benefits or payments as the Company may, in its
discretion, determine to be sufficient to satisfy its obligations to the
Executive under this Agreement.

       

      (d) Disability.  “Disability”
shall mean that the Executive is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months.  Termination
resulting from Disability may only be effected after at least thirty (30) days’
written notice by the Company of its intention to terminate the Executive’s
employment.  In the event that the Executive resumes the performance
of substantially all of his duties hereunder before the termination of his
employment becomes effective, the notice of intent to terminate shall
automatically be deemed to have been revoked.

       

      (e) Good
Reason.  “Good Reason” shall mean the Executive’s termination
of employment within ninety (90) days following the expiration of any cure
period (discussed below) following the occurrence of one or more of the
following, without the Executive’s consent:

       

      (i) A
material reduction in the Executive’s base compensation as in effect immediately
prior to such reduction not including a substantially similar reduction that
applies to all similarly situated executives;

       

      (ii) The
assignment to the Executive of any duties, or the reduction of
the  Executive’s duties, either of which results
in a material diminution of the Executive’s authority, duties, or
responsibilities with the Company in effect immediately prior to such
assignment, or the removal of the Executive from such position and
responsibilities; provided, however, that a reduction in duties, position or
responsibilities solely by virtue of the Company being acquired and made part of
a larger entity, whether as a subsidiary, business unit or otherwise (as, for
example, when the Chief Executive Officer of the Company remains the Chief
Executive Officer of the Company following a Change of Control where the Company
becomes a wholly owned subsidiary of the acquiror, but is not made the Chief
Executive Officer of the acquiring corporation) shall not constitute “Good
Reason;”

       

      (iii) A
material change in the geographic location at which the Executive must perform
services (in other words, the relocation of the Executive to a facility that is
more than twenty-five (25) miles from the Executive’s current location);
or

       

      (iv) the
failure of the Company to obtain the assumption of the Agreement by a successor
and/or acquirer.

       

      The
Executive shall not resign for Good Reason without first providing the Company
with written notice within ninety (90) days of the event that the Executive
believes constitutes “Good Reason” specifically identifying the acts or
omissions constituting the grounds for Good Reason and a reasonable cure period
of not less than thirty (30) days following the date of such
notice.

       

      (f) Involuntary
Termination.  “Involuntary Termination” shall mean
(i) without the Executive’s express written consent, the assignment to the
Executive of any duties or the reduction of the Executive’s duties, either of
which results in a significant diminution in the Executive’s position or
responsibilities with the Company in effect immediately prior to such
assignment, or the removal of the Executive from such position and
responsibilities; (ii) without the Executive’s express written consent, a
substantial reduction, without good business reasons, of the facilities and
perquisites (including office space and location) available to the Executive
immediately prior to such reduction; (iii) a reduction by the Company in
the Base Salary of the Executive as in effect immediately prior to such
reduction; (iv) a material reduction by the Company in the kind or level of
employee benefits to which the Executive is entitled immediately prior to such
reduction with the result that the Executive’s overall benefits package is
significantly reduced; (v) the relocation of the Executive to a facility or
a location more than 25 miles from the Executive’s then present location,
without the Executive’s express written consent; (vi) any termination of
the Executive’s employment by the Company that is not effected for death,
Disability or for Cause; (vii) the failure of the Company to obtain the
assumption of this Agreement by any successor; (viii) any material breach
by the Company of any material provision of this Agreement; (ix) any
purported termination of the Executive’s employment by the Company that is not
effected pursuant to a notice of termination satisfying the requirements of
paragraph 19 below, and for purposes of this Agreement, no such purported
termination shall be effective; or (x) provision of notice of non-renewal
or extension of the Employment Period as provided for in paragraph 2
above.

       

      (g) Termination
Date.  “Termination Date” shall mean (i) if this Agreement
is terminated by the Company for Disability, thirty (30) days after notice of
termination (pursuant to paragraph 19) is given to the Executive (provided
that the Executive shall not have returned to the performance of his duties on a
full-time basis during such thirty (30)-day period), (ii) if the
Executive’s employment is terminated by reason of the Executive’s death, the
date of death, (iii) if the Agreement is terminated by the Executive, such
date as the Executive specifies in his notice of termination (pursuant to
paragraph 19) to the Company, (iv) if the Agreement is terminated by
either the Executive or the Company in connection with a notice of non-renewal
or extension of the Employment Period as provided for in paragraph 2 above,
the expiration of such Period, or (v) if the Company terminates the
Executive’s employment, the date specified by the Company in the notice of
termination to the Executive (pursuant to paragraph 19).

       

      12. Proprietary
Information.  During the Employment Period and thereafter, the
Executive agrees to comply with the Employee Patent, Secrecy and Invention
Agreement, which the Executive executed as of February 1, 1995 (the
“Employee Agreement”), which is incorporated herein by reference.

       

      13. Covenant Not to Compete or
Solicit.

       

      (a) Non-Competition.  The
Executive agrees that for a period of thirty-six (36) months following the
Executive’s termination of employment with the Company for any reason (other
than death), the Executive will not directly or indirectly engage in (whether as
an employee, consultant, proprietor, partner, director or otherwise), or have
any ownership interest in, or participate in the financing, operation,
management or control of, any person, firm, corporation or business that engages
in or (to the Executive’s knowledge, after due inquiry) intends to engage in, a
“restricted business” (as defined below).

       

      Ownership
of (i) no more than one percent (1%) of the outstanding voting stock of a
publicly traded corporation, or (ii) any stock owned by the Executive on
the Effective Date, shall not constitute a violation of this
provision.

       

      (b) Non-Solicitation.  The
Executive agrees that for a period of thirty-six (36) months following the
Executive’s termination of employment for any reason (other than death), the
Executive shall not (i) solicit, encourage or take any other action that is
intended to induce any other employee of the Company to terminate his or her
employment with the Company, or (ii) interfere in any manner with the
contractual or employment relationship between the Company and any such employee
of the Company.

       

      The
foregoing shall not prohibit any entity with which the Executive may be
affiliated from hiring a former employee of the Company.

       

      (c) World-wide.  The
parties acknowledge that the market for the Company’s products is world-wide,
and that, in this market, products from any nation compete with products from
all other countries.  Accordingly, the parties agree that the
provisions of this paragraph 13 shall apply to each of the states and
counties of the United States, including each county in California, and to each
country world-wide.

       

      (d) Severability.  The
parties intend that the covenants contained in the preceding subparagraphs shall
be construed as a series of separate covenants, one for each county of
California, each state of the Union, and each country.  Except for
geographic coverage, each such separate covenant shall be deemed identical in
terms of the covenant contained in the preceding subparagraphs.  If,
in any judicial proceeding, a court shall refuse to enforce any of the separate
covenants (or any part thereof) deemed included in said subparagraphs, then such
unenforceable covenant (or such part) shall be deemed eliminated from this
Agreement for the purpose of those proceedings to the extent necessary to permit
the remaining separate covenants (or portions thereof) to be
enforced.  In the event the provisions of this paragraph 13
should ever be deemed to exceed the time of geographic limitations, or the scope
of this covenant, permitted by applicable law, then such provisions shall be
reformed to the maximum time or geographic limitations, as the case may be,
permitted by applicable laws.

       

      (e) Restricted
Business.  For purposes of this Agreement, “restricted
business” shall mean any business that is engaged in or (to the Executive’s
knowledge, after due inquiry) preparing to engage in the design, manufacture,
marketing, sale or distribution of communications headsets, communications
handsets, or related products, assemblies, subassemblies, components, and the
repair or refurbishment of same.

       

      14. Indemnification.  In
accordance with the Company’s current indemnification policies, the Company
shall indemnify the Executive if the Executive is or becomes a party or is
threatened to be made a party to any threatened or pending action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the Company) by reason of the fact that the
Executive is or was a director, officer, employee or agent of the Company, or
any subsidiary of the Company, by reason of any action or inaction on the part
of the Executive while an officer or director, against expenses (including
attorneys’ fees), judgments, fines and amounts paid in settlement (if such
settlement is approved in advance by the Company, which approval shall not be
unreasonably withheld) actually and reasonably incurred by the Executive in
connection with such action, suit or proceeding if the Executive acted in good
faith and in a manner the Executive reasonably believed to be in or not opposed
to the best interests of the Company, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe the Executive’s conduct was
unlawful.

       

      15. Successors.  The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place.  Failure
of the Company to obtain such assumption agreement prior to the effectiveness of
any such succession shall entitle the Executive to the benefits described in
paragraph 10(a) of this Agreement, subject to the terms and conditions
therein.

       

      16. Arbitration.

       

      (a) Agreement.  The
Company and the Executive agree that any dispute or controversy arising out of,
relating to, or in connection with this Agreement, or the interpretation,
validity, construction, performance, breach, or termination thereof shall be
settled by binding arbitration, unless otherwise required by law, to be held in
Santa Clara County, California, and administered by Judicial Arbitration &
Mediation Services, Inc. (“JAMS”), pursuant to its Employment Arbitration Rules
& Procedures (the “JAMS Rules”).  The Arbitrator shall have the
power to award any remedies available under applicable law, and the Arbitrator
shall award attorneys’ fees and costs to the prevailing party, except as
prohibited by law.  The arbitrator may grant injunctions or other
relief in such dispute or controversy.  The decision of the arbitrator
shall be final, conclusive and binding on the parties to the
arbitration.  Judgment may be entered on the arbitrator’s decision in
any court having jurisdiction.

       

      (b) Governing
Law.  The arbitrators shall apply California law to the merits
of dispute or claim, without reference to rules of conflicts of
law.  The Executive hereby expressly consents to the personal
jurisdiction of the state and federal courts located in California for any
action or proceeding arising from or relating to this Agreement or relating to
any arbitration in which the parties are participants.

       

      (c) Costs and Fees of
Arbitration.  The Executive shall pay the initial arbitration
filing (but only so much of the filing fees as the Executive would have instead
paid had he filed a complaint in a court of law), and the Company shall pay the
remaining costs and expenses of such arbitration (unless the Executive requests
that each party pay one-half of the costs and expenses of such arbitration or
unless otherwise required by law).  The Company and the Executive
shall each pay separately its counsel fees and expenses unless otherwise
required by law.

       

      (d) Equitable
Relief.  The parties may apply to any court of competent
jurisdiction for a temporary restraining order, preliminary injunction, or other
interim or conservatory relief, as necessary, without breach of this arbitration
agreement and without abridgment of the powers of the arbitrator.

       

      (e) Executive’s
Representation.  THE EXECUTIVE HAS READ AND UNDERSTANDS THIS
PARAGRAPH, WHICH DISCUSSES ARBITRATION.  THE EXECUTIVE UNDERSTANDS
THAT BY SIGNING THIS AGREEMENT, HE AGREES TO SUBMIT ANY FUTURE CLAIMS ARISING
OUT OF, RELATING TO, OR IN CONNECTION WITH THE INTERPRETATION, VALIDITY,
CONSTRUCTION, PERFORMANCE OR BREACH OF THIS AGREEMENT, TO BINDING ARBITRATION,
UNLESS OTHERWISE REQUIRED BY LAW, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A
WAIVER OF HIS RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL
DISPUTES RELATING TO THIS AGREEMENT.

       

      17. Absence of
Conflict.  The Executive represents and warrants that his
employment by the Company as described herein shall not conflict with and will
not be constrained by any prior employment or consulting agreement or
relationship.

       

      18. Assignment.  This
Agreement and all rights under this Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
personal or legal representatives, executors, administrators, heirs,
distributors, devisees, legatees, successors and assigns.  This
Agreement is personal in nature, and neither of the parties to this Agreement
shall, without the written consent of the other, assign or transfer this
Agreement or any right or obligation under this Agreement to any other person or
entity, except that the Company may assign this Agreement to any of its
affiliates or wholly-owned subsidiaries or to any successor by merger, provided
that such assignment will not relieve the Company of its obligations
hereunder.  If the Executive should die while any amounts are still
payable to him hereunder, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to the Executive’s
devisee, legatee, or other designee or, if there be no such designee, to the
Executive’s estate.

       

      19. Notices.

       

      (a) General.  For
purposes of this Agreement, notices and other communications provided for in
this Agreement shall be in writing and shall be delivered personally or sent by
United States certified mail, return receipt requested, postage prepaid,
addressed as follows:

       

      If to the
Executive:                                              
S. Kenneth Kannappan

      c/o Plantronics, Inc.

      345 Encinal Street

      Santa Cruz, CA 95060

       

      If to the
Company:                                               Plantronics,
Inc.

      345 Encinal Street

      Santa Cruz, CA 95060

      Attn: General Counsel

       

      or to
such other address or the attention of such other person as the recipient party
has previously furnished to the other party in writing in accordance with this
paragraph.  Such notices or other communications shall be effective
upon delivery or, if earlier, three days after they have been mailed as provided
above.

       

      (b) Notice of
Termination.  Any termination by the Company for Disability or
Cause, or by the Executive as a result of a voluntary resignation or an
Involuntary Termination, shall be communicated by a notice of termination to the
other party hereto given in accordance with paragraph 19(a) of this
Agreement.  Such notice shall indicate the specific termination
provision in this Agreement relied upon, shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination under the
provision so indicated, and shall specify the termination date in accordance
with paragraph 11(g).  The failure by the Executive to include in
the notice any fact or circumstance that contributes to a showing of Involuntary
Termination shall not waive any right of the Executive hereunder or preclude the
Executive from asserting such fact or circumstance in enforcing his rights
hereunder.

       

      20. Integration.  This
Agreement, the Employee Agreement dated February 1, 1995, the Executive’s
Indemnification Agreement also dated March 27, 1997, and the respective
agreements governing the Executive’s Company stock options and other equity
awards represent the entire agreement and understanding between the parties as
to the subject matter hereof and supersede all prior or contemporaneous
agreements whether written or oral.  As of the Effective Date, the
Amended and Restated Employment Agreement between the Company and the Executive
dated as of January 26, 2009 is superseded.  No waiver, alteration or
modification of any of the provisions of this Agreement shall be binding unless
in writing and signed by duly authorized representatives of the parties
hereto.

       

      21. Waiver.  Failure
or delay on the part of either party hereto to enforce any right, power or
privilege hereunder shall not be deemed to constitute a waiver
thereof.  Additionally, a waiver by either party or a breach of any
promise hereof by the other party shall not operate as or be construed to
constitute a waiver of any subsequent waiver by such other party.

       

      22. Severability.  Whenever
possible, each provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or any other jurisdiction,
but this Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision had never been contained
herein.

       

      23. Headings.  The
headings of the paragraphs contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
any provision of this Agreement.

       

      24. Applicable
Law.  This Agreement shall be governed by and construed in
accordance with the internal substantive law, and not the choice of law rules,
of the State of California.

       

      25. Counterparts.  This
Agreement may be executed in one or more counterparts, none of which need
contain the signature of more than one party hereto, and each of which shall be
deemed to be an original, and all of which together shall constitute a single
agreement.

       

      IN
WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of
the Company by its duly authorized officer, as of the day and year first above
written.

       

      PLANTRONICS,
INC.

       

      By: s/Richard R.
Pickard 

      Richard
R. Pickard

       

      Title:
Vice President – Legal, General Counsel & Secretary

       

      EXECUTIVE:

       

      By: s/S. Kenneth
Kannappan                                                                    

      S.
Kenneth KannappanExhibit 4.1

 

TRANSATLANTIC HOLDINGS, INC.

 

 

______________

Second Supplemental

 

Indenture

Dated as of November 23, 2009

 

______________

 

(Supplemental to Indenture Dated as of December 14, 2005)

 

______________

 

The Bank of New York Mellon

as Trustee

 

 

 

 

 

SECOND SUPPLEMENTAL INDENTURE, dated as of November 23, 2009, between Transatlantic Holdings, Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”), and The Bank of New York Mellon, a New York banking corporation, as Trustee (herein called “Trustee”);

R E C I T A L S:

WHEREAS, the Company has heretofore executed and delivered to the Trustee, an Indenture, dated as of December 14, 2005 (the “Basic Indenture,” as the same may be amended or supplemented from time to time, including by this Second Supplemental Indenture, the “Indenture”), providing for the issuance from time to time of the Company’s unsecured debentures, notes or other evidences of indebtedness (herein and therein called the “Securities”), to be issued in one or more series as provided in the Indenture;

WHEREAS, Sections 201, 301 and 901 of the Basic Indenture permits the Company and the Trustee to enter into an indenture supplemental to the Basic Indenture to provide for the issuance of, and establish the form and terms of, additional series of Securities;

WHEREAS, the Company has authorized the issuance of $350,000,000 in aggregate principal amount of its 8.00% Senior Notes Due 2039 (the “Notes”);

WHEREAS, the Company has duly authorized the execution and delivery of this Second Supplemental Indenture to establish the form and terms of the Notes; and

WHEREAS, all things necessary to make this Second Supplemental Indenture a valid agreement according to its terms have been done.

NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of the Notes by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Notes, as follows:

ARTICLE ONE

 

DEFINITIONS AND OTHER PROVISIONS

OF GENERAL APPLICATION

Section 1.1     Relation to Basic Indenture

This Second Supplemental Indenture constitutes a part of the Basic Indenture (the provisions of which, as modified by this Second Supplemental Indenture, shall apply to 

 

 

 

the Notes) in respect of the Notes but shall not modify, amend or otherwise affect the Basic Indenture insofar as it relates to any other series of Securities or affects in any manner the terms and conditions of the Securities of any other series.

Section 1.2     Definitions

For all purposes of this Second Supplemental Indenture, the capitalized terms used herein (i) which are defined in this Section 1.2 have the respective meanings assigned hereto in this Section 1.2, and (ii) which are defined in the Basic Indenture (and which are not defined in this Section 1.2) have the respective meanings assigned thereto in the Basic Indenture.  For all purposes of this Second Supplemental Indenture:

1.2.1
      All references herein to Articles and Sections, unless otherwise specified, refer to the corresponding Articles and Sections of this Second Supplemental Indenture;

1.2.2      
The terms “herein,” “hereof,” and “hereunder” and words of similar import refer to this Second Supplemental Indenture; and

1.2.3      
The following terms, as used herein, have the following meanings:

“Adjusted Treasury Rate” has the meaning specified in the form of Note contained in Section 2.3.

“Applicable Procedures” means, with respect to any transfer or transaction involving a Global Note or beneficial interest therein, the rules and procedures of the Depositary for such Note, Euroclear and Clearstream, in each case to the extent applicable to such transaction and as in effect at the time of such transfer or transaction.

“Clearstream” means Clearstream Banking, société anonyme, Luxembourg (or any successor securities clearing agency).

“Closing Date” means November 23, 2009.

“Comparable Treasury Issue” has the meaning specified in the form of Note contained in Section 2.3.

“Comparable Treasury Price” has the meaning specified in the form of Note contained in Section 2.3.

“Depositary” means, with respect to the Notes issuable or issued in whole or in part in the form of one or more Global Notes, DTC, for so long as it shall be a clearing agency registered under the Exchange Act, or such successor (which shall be a clearing agency registered under the Exchange Act) as the Company shall designate from time to time in an Officers’ Certificate delivered to the Trustee.

“DTC” means The Depository Trust Company.

 

 

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“Euroclear” means the Euroclear Bank S.A./N.V. (or any successor securities clearing agency), as operator of the Euroclear system.

“Global Note” means any Note bearing the legend specified in Section 2.2 evidencing all or part of the Notes, issued to the Depositary, and registered in the name of the Depositary or its nominee.  

“Notes” has the meaning stated in the third recital of this Second Supplemental Indenture.

“Primary Treasury Dealer” has the meaning specified in the form of Note contained in Section 2.3.

“Quotation Agent” has the meaning specified in the form of Note contained in Section 2.3.

“Reference Treasury Dealer” has the meaning specified in the form of Note contained in Section 2.3.

“Reference Treasury Dealer Quotations” has the meaning specified in the form of Note contained in Section 2.3.

“Securities” has the meaning specified in the first recital of this Second Supplemental Indenture.

“Successor Note” of any particular Note means every Note issued after, and evidencing all or a portion of the same debt as that evidenced by, such particular Note; and, for the purposes of this definition, any Note authenticated and delivered under Section 306 of the Basic Indenture in exchange for or in lieu of a mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Note.

ARTICLE TWO

 

GENERAL TERMS AND CONDITIONS OF THE NOTES

Section 2.1     Forms of Notes Generally

The Notes shall be in substantially the forms set forth in this Article with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by the Basic Indenture and this Second Supplemental Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange, or as may, consistent with the Basic Indenture and this Second Supplemental Indenture, be determined by the officers executing such Notes, as evidenced by their execution of such Notes.

 

 

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The Trustee’s certificate of authentication shall be in substantially the form set forth in Section 2.4.

The Notes will be issued only in registered form.  The Notes will be issued in minimum denominations of $1,000 and multiples of $1,000 in excess thereof.

Section 2.2     Form of Face of the Notes

THIS SECURITY IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY.  THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (“DTC”), A NEW YORK CORPORATION, TO TRANSATLANTIC HOLDINGS, INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CEDE & CO. (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

TRANSATLANTIC HOLDINGS, INC.

 

8.00% SENIOR NOTE DUE 2039

No. ________

            CUSIP No.:

Principal Amount:      $

Regular Record Date: With respect to each Interest Payment Date, the close of business on the preceding May 14 or November 14, as the case may be (whether or not a Business Day)

 

 

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            Original Issue Date:
 	
            November 23, 2009
 
	
            Stated Maturity:
 	
            November 30, 2039
 
	Interest Payment Dates: 	May 30 and November 30, commencing May 30, 2010
	Interest Rate:	8.00% per year

 

TRANSATLANTIC HOLDINGS, INC., a corporation duly organized and existing under the laws of Delaware (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or its registered assigns, the principal sum of  ________ dollars ($________) on November 30, 2039 and to pay interest thereon from November 23,  2009 or from the most recent Interest Payment Date (as defined below) to which interest has been paid or duly provided for, semiannually in arrears on May 30 and November 30 in each year (each such date, an “Interest Payment Date”), commencing on May 30, 2010 at the rate of 8.00% per annum, until the principal hereof is paid or made available for payment.  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in such Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on the Regular Record Date for such interest, which shall be the May 14 or November 14 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.  Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof which shall be given to Holders of Notes of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon
such notice as may be required by such exchange, all as more fully provided in said Indenture.

Interest shall be computed on the basis of a 360-day year comprised of twelve 30-day months.

In the event that an Interest Payment Date is not a Business Day, the Company shall pay interest on the next day that is a Business Day, with the same force and effect as if made on the Interest Payment Date, and without any interest or other payment with respect to the delay.  If the Stated Maturity or earlier Redemption Date falls on a day that is not a Business Day, the payment of principal, premium, if any, and interest, if any, need not be made on such date, but may be made on the next succeeding Business Day, with the same force and effect as if made on the Stated Maturity or earlier Redemption Date, provided that no interest shall accrue for the period from and after such Stated Maturity or earlier Redemption Date.

 

 

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Payment of the principal of and interest on this Note will be made at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

Dated:  November 23, 2009

TRANSATLANTIC HOLDINGS, INC.

 

By_________________________________

[SEAL]

 

Attest:

 

___________________________

 

Section 2.3     Form of Reverse of the Notes

This Note is one of a duly authorized issue of securities of the Company (herein called the “Notes”), designated as its 8.00% Senior Notes Due 2039, issued and to be issued in one or more series under an Indenture, dated as of  December 14, 2005, as supplemented by the Second Supplemental Indenture (the “Second Supplemental Indenture”), dated as of November 23, 2009 (as so supplemented, the “Indenture,” which term shall have the meaning assigned to it in such instrument), from the Company to The Bank of New York Mellon, a New York banking corporation, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. This Note is one of the series designated on the face hereof, initially limited in aggregate principal amount up to $350,000,000 provided, however, that (subject to the provisions of the Indenture) the aggregate principal amount of the Notes may be increased in the future, without the 

 

-6-

 

 

 

consent of the holders of the Notes, on the same terms and with the same CUSIP and ISIN numbers as the Notes.

The Notes of this series are subject to redemption at any time, in whole or in part, at the election of the Company, upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture, at a Redemption Price equal to the greater of (i) 100% of the principal amount, together with accrued interest to the Redemption Date, and (ii) as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest thereon (not including any portion of such payments of interest accrued as of the Redemption Date) discounted to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate plus 50 basis points, plus accrued interest to the Redemption Date.

The definitions of certain terms used in the paragraph above are listed below.

“Adjusted Treasury Rate” means, with respect to any Redemption Date, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.

“Comparable Treasury Issue” means the U.S. Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the Notes of this series to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Notes.

“Comparable Treasury Price” means, with respect to any Redemption Date, the average of the Reference Treasury Dealer Quotations for such Redemption Date.

“Quotation Agent” means the reference treasury dealer (as defined below) chosen by us to act as quotation agent.

“Reference Treasury Dealer” means (i) Goldman, Sachs & Co., one primary U.S. Government securities dealer located in The City of New York (a “Primary Treasury Dealer”) selected by Wells Fargo Securities, LLC,  and one other Primary Treasury Dealer chosen by the Company, or their respective successors; provided, however, that if any of the foregoing shall cease to be a Primary Treasury Dealer, the Company shall substitute therefor another Person to be a Primary Treasury Dealer; and (ii) any other Primary Treasury Dealer selected by the Quotation Agent after consultation with the Company.

“Reference Treasury Dealer Quotations” means with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Quotation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each 

 

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case as a percentage of its principal amount) quoted in writing to the Quotation Agent by such Reference Treasury Dealer at 5:00 p.m. on the third business day preceding such Redemption Date.

In the event of redemption of this Note in part only, a new Note or Notes of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

The Notes do not have the benefit of any sinking fund obligation.

The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Note or certain restrictive covenants and Events of Default with respect to this Note, in each case upon compliance with certain conditions set forth in the Indenture.

As set forth in, and subject to, the provisions of the Indenture, no Holder of this Note will have any right to institute any proceeding with respect to the Indenture or for any remedy thereunder, unless such Holder shall have previously given to the Trustee written notice of a continuing Event of Default, the Holders of not less than 25% in principal amount of the Outstanding Notes shall have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as trustee, and the Trustee shall not have received from the Holders of a majority in principal amount of the Outstanding Notes a direction inconsistent with such request and shall have failed to institute such proceeding within 60 days; provided, however, that such limitations do not apply to a suit instituted
by the Holder hereof for the enforcement of payment of the principal of (and premium, if any) or any interest of this Note on or after the respective due date expressed herein.

If an Event of Default with respect to Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner and with the effect provided in the Indenture.

The Notes are entitled to the benefits of the covenants of the Company set forth in Article Ten of the Indenture.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.

This Note is exchangeable in whole or from time to time in part for Notes in definitive registered form only as provided herein and in the Indenture.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place 

 

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where the principal of (and premium, if any) and interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

The Notes of this series are issuable only in fully registered form without coupons in denominations of $1,000 and any multiple of $1,000 in excess thereof.  As provided in the Indenture and subject to certain limitations therein set forth, the Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

This Note shall be governed by and construed in accordance with the internal laws of the State of New York.

All terms used in this Note which are defined in the Indenture shall have the meaning assigned to them in the Indenture.

Section 2.4     Form of Trustee’s Certificate of Authentication of the Notes

The Trustee’s certificates of authentication shall be in substantially the following form:

This is one of the Notes of the series designated therein referred to in the within-mentioned Indenture.

The Bank of New York Mellon,

as Trustee

 

By:_______________________________

	
             
 	
            Authorized Signatory
 

 

 

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Section 2.5     Title and Terms

The aggregate principal amount of the Notes that may initially be authenticated and delivered under this Second Supplemental Indenture is limited to $350,000,000, except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section 304, 305, 306 or 906 of the Basic Indenture or Article Two of this Second Supplemental Indenture; provided, however, that the aggregate principal amount of the Notes may be increased in the future, without the consent of the holders of the Notes, on the same terms and with the same CUSIP and ISIN numbers as the Notes, except for the issue price, Original Issue Date and first Interest Payment Date, provided, that no Event of Default with respect to the Notes shall have occurred and be continuing.  

The Stated Maturity shall be November 30, 2039 and the Notes shall bear interest and have such other terms as are described in the form of Note set forth in Sections 2.2 and 2.3 of this Second Supplemental Indenture.

The Company shall have no obligation to redeem or purchase the Notes pursuant to any sinking fund or analogous provision, or at the option of a Holder thereof.  The Notes shall be redeemable at the election of the Company from time to time, in whole or in part, at the times and at the prices specified in the form of Note set forth in Section 2.3 of this Second Supplemental Indenture.

The Notes shall be subject to the defeasance and discharge provisions of Section 1302 of the Basic Indenture and the defeasance of certain obligations and certain events of default provisions of Section 1303 of the Basic Indenture.

Unless the context otherwise requires, the Original Notes of each series and the Exchange Notes issued in exchange for any Original Notes of that series shall constitute one series for all purposes under the Indenture, including without limitation, amendments, waivers and redemptions.

The Notes shall be issuable only in fully registered form without coupons and only in denominations of $1,000 and multiples of $1,000 in excess thereof.

The Notes shall be executed, authenticated, delivered and dated in accordance with Section 303 of the Basic Indenture.

Section
2.6     Global Securities

The Notes will be issued in the form of one or more Global Securities registered in the name of the Depositary or its nominee. Except under the limited circumstances described below, Notes represented by Global Securities will not be exchangeable for, and will not otherwise be issuable as, Notes in definitive form. The Global Securities described above may not be transferred except by the Depositary to a nominee of the 

 

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Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or to a successor Depositary or its nominee.

Except as otherwise provided in this Second Supplemental Indenture, owners of beneficial interests in such Global Securities will not be considered the holders thereof for any purpose under the Indenture, and no Global Security representing a Note shall be exchangeable, except for another Global Security of like denomination and tenor to be registered in the name of the Depositary or its nominee or to a successor Depositary or its nominee. The rights of holders of such Global Securities shall be exercised only through the Depositary.

A Global Security shall be exchangeable for Notes registered in the names of Persons other than the Depositary or its nominee only as provided by Section 305 of the Original Indenture, subject to the procedures of the Depositary. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Notes registered in such names as the Depositary shall direct.

ARTICLE THREE

 

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Article VIII, Section 801 of the Basic Indenture shall be superseded in its entirety by this Article Three with respect to, and solely for the benefit of the Holders of, the Notes, provided that this Article Three shall not become a part of the terms of any other series of Securities.

“Section 801. Company May Consolidate, Etc., Only on Certain Terms.

The Company shall not consolidate with or merge into any other Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, unless:

 (1) in case the Company shall consolidate with or merge into another Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety shall be a corporation, partnership or trust, shall be organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia or Bermuda, the British Virgin Islands, Netherlands Antilles, Canada, Switzerland or any country which is a member of the European Union and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of
and any premium and interest on all the Securities and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed; 

 

 

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(2) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing;

(3) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with; and

(4) in the case of a consolidation with or merger into a Person organized other than under the laws of any United States jurisdiction or any state thereof by the Company or the conveyance, transfer or lease by the Company of its properties and assets substantially as an entirety to a Person organized other than under the laws of United States jurisdiction or any state thereof, the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that Holders will not recognize income, gain or loss for U.S. Federal income tax purposes as a result of such consolidation, merger, conveyance, transfer or lease and will be subject to U.S. Federal income tax on the same amounts, in the same manner and at the same time as would have been the case if such consolidation, merger, conveyance, transfer or lease had not occurred.”

 

ARTICLE FOUR

 

DEFEASANCE AND COVENANT DEFEASANCE

Article XIII, Section 1303 of the Basic Indenture shall be superseded in its entirety by this Article Four with respect to, and solely for the benefit of the Holders of, the Notes, provided that this Article Four shall not become a part of the terms of any other series of Securities.

“Section 1303. Covenant Defeasance.  

Upon the Company’s exercise of its option (if any) to have this Section applied to any Securities or any series of Securities, as the case may be, or if this Section shall otherwise apply to any Securities or any series of Securities, as the case may be, (1) the Company shall be released from its obligations under Sections 1008 and 1010 and any covenants provided pursuant to Section 301(18), 901(2) or 901(7) for the benefit of the Holders of such Securities and (2) the occurrence of any event specified in Sections 501(4) (with respect to Sections 1008 and 1010 and any such covenants provided pursuant to Section 301(18), 901(2) or 901(7)) and 501(7) shall be deemed not to be or result in an Event of Default, in each case with respect to such Securities as provided in this Section on and after the date the conditions set forth in Section 1304 are satisfied 

 

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(hereinafter called “COVENANT DEFEASANCE”). For this purpose, such Covenant Defeasance means that, with respect to such Securities, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such specified Section (to the extent so specified in the case of Section 501(4)), whether directly or indirectly by reason of any reference elsewhere herein to any such Section or by reason of any reference in any such Section to any other provision herein or in any other document, but the remainder of this Indenture and such Securities shall be unaffected thereby.”

ARTICLE FIVE

 

MISCELLANEOUS

Section 5.1     Relationship to Basic Indenture

The Second Supplemental Indenture is a supplemental indenture within the meaning of the Basic Indenture. The Basic Indenture, as supplemented and amended by this Second Supplemental Indenture, is in all respects ratified, confirmed and approved and, with respect to the Notes, the Basic Indenture, as supplemented and amended by this Second Supplemental Indenture, shall be read, taken and construed as one and the same instrument.

Section 5.2     Modification of the Basic Indenture

Except as expressly modified by this Second Supplemental Indenture, the provisions of the Basic Indenture shall govern the terms and conditions of the Notes.

Section 5.3     Governing Law

This instrument shall be governed by and construed in accordance with the internal laws of the State of New York.

Section 5.4     Counterparts

This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

Section 5.5     Trustee Makes No Representation

The recitals contained herein are made by the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof.  The Trustee makes no representation as to the validity or sufficiency of this Second Supplemental Indenture.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed all as of the day and year first above written.

TRANSATLANTIC HOLDINGS, INC.

By:  /s/  Gary A. Schwartz

Name: Gary A. Schwartz

Title: Senior Vice President and General Counsel

 

 

THE BANK OF NEW YORK MELLON, 

as Trustee

By:  /s/  Sherma Thomas

Name:  Sherma Thomas

Title:  Senior Associate

 

 

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