EMPLOYMENT AGREEMENT, dated as of JANUARY 1, 2002 by and between CNA Surety Corporation a
Delaware corporation or its subsidiaries ("the Company"), and DAVID F. PAUL ("the Executive").
WHEREAS, the Company wishes to continue to employ the Executive and the Company and the Executive
desire to enter into an agreement embodying the terms of such employment (the "Agreement"); and
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the Company and the
Executive hereby agree as follows:
a. AGREEMENT TO EMPLOY. Upon the terms and subject to the conditions of this Agreement, the Company
hereby agrees to continue to employ Executive and Executive agrees to employment by the Company.
b. TERM OF EMPLOYMENT. Except as provided in Paragraph 5(a), the Company shall employ Executive for
the period commencing on January 1, 2002 (the "Commencement Date") and ending on December 31, 2003.
The period during which Executive is employed pursuant to this Agreement and any extensions set forth in
Paragraph 1(c) of this Agreement shall be referred to as the "Employment Period."
c. RENEWAL. Upon expiration of the original term of this Agreement set forth in Paragraph 1(b) of this
Agreement, this Agreement shall renew automatically for one (1) additional one (1) year term unless the
Company or the Executive provides the other ninety days written notice that the Agreement will not be renewed.
2. POSITION AND DUTIES.
a. POSITION. During the Employment Period, Executive shall serve as Senior Vice President, International
Surety of the Company or in such other position or positions in the Company and/or in any of its subsidiaries as
he and the Company shall mutually agree. In addition, Executive shall serve in such other position or positions
with the Company and its subsidiaries commensurate with his position and experience as the Board of Directors
of the Company (the "Board") shall from time to time specify.