Document:

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                                                                    EXHIBIT 10.1

CNH GLOBAL N.V.
EQUITY INCENTIVE PLAN

(As Amended and Restated on July 23, 2001)

         1. PURPOSE

         The purpose of the Plan is to promote the long-term success of CNH
Global N.V. (the "Company") for the benefit of the Company's shareholders by
encouraging officers and employees to have meaningful investments in the Company
so that, as shareholders themselves, those individuals will be more likely to
represent the views and interests of other shareholders and by providing
incentives to such officers and employees for continued service. The Company
believes that the possibility of participation under the Plan will provide this
group of officers and employees an incentive to perform more effectively and
will assist the Company and the CNH Companies in attracting and retaining people
of outstanding training, experience and ability.

         2. DEFINITIONS

         "Award" means an award or grant made to a Participant under Section 8.

         "Award Agreement" means the agreement provided in connection with an
Award under Section 11.

         "Award Date" means the date that an Award is made, as specified in an
Award Agreement.

         "Award Price" means the price specified in the Award Agreement with
respect to an SAR pursuant to Section 8.B.

         "CNH Company" means the Company, any stock company of which a majority
of the capital stock generally entitled to vote for directors is owned directly
or indirectly by the Company, and any other company designated as such by the
Committee, but only during the period of such ownership or designation.

         "Code" means the United States Internal Revenue Code of 1986, as
amended, or any successor legislation.

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         "Committee" means the Nominating and Compensation Committee of the
Company's Board of Directors, or any sub-committee thereof, or any successor
committee thereto.

         "Common Shares" means the Company's common shares.

         "Company" means CNH Global N.V. of Amsterdam, the Netherlands.

         "Covered Employees" shall have the meaning specified in Section
162(m)(3) of the Code.

         "Dividend Equivalent" means an amount equal to the amount of the cash
dividends that are declared and become payable with respect to Common Shares
after the Award Date for the Award to which the Dividend Equivalent relates and
on or before the Settlement Date for such Award.

         "Fair Market Value" on any date means the average of the highest and
the lowest sales prices of a Common Share on the Composite Tape for such date,
as reported by the National Quotation Bureau Incorporated; provided that, if no
sales of Common Shares are included on the Composite Tape for such date, the
Fair Market Value of a share of Common Shares on such date shall be deemed to be
the average of the highest and lowest prices of a share of Common Shares as
reported on said Composite Tape for the next preceding day on which sales of
Common Shares are included.

         "ISO" means any Stock Option designated in an Award Agreement as an
"Incentive Stock Option" within the meaning of Section 422 of the Code.

         "Non-Qualified Stock Option" means any Stock Option that is not an ISO.

         "Option Price" means the purchase price of one share of Common Shares
under a Stock Option.

         "Parent" means the Company's majority shareholder.

         "Parent Group" means the Parent and any entity that directly or
indirectly controls or is controlled by or is under common control with the
Company.

         "Participant" means an employee or officer of a CNH Company who has
been selected by the Committee to receive an Award under the Plan.

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         "Performance Unit" means an Award denominated in cash, the amount of
which may be based on performance of the Participant or of CNH Global N.V. or of
any subsidiary or division thereof.

         "Plan" means this CNH Global N.V. Equity Incentive Plan, as amended
from time to time.

         "Reload Stock Option" means a Stock Option (i) that is awarded, either
automatically in accordance with the terms of an Award Agreement in which one or
more other Awards are made or by separate Award, upon the exercise of a Stock
Option granted under this Plan or otherwise where the Option Price is paid by
the option holder by delivery of shares of Common Shares on the Settlement Date
for such exercise and (ii) that entitles such holder to purchase the number of
shares so delivered for an Option Price equal to the Fair Market Value of a
share of Common Shares on such Settlement Date.

         "Restricted Stock" means Common Shares subject to restrictions and
conditions awarded pursuant to Section 8.C.

         "Settlement Date" means, (i) with respect to any Stock Option that has
been exercised in whole or in part, the date or dates upon which shares of
Common Shares are to be delivered to the Participant and the Option Price
therefor paid, (ii) with respect to any SARs that have been exercised, the date
or dates upon which a cash payment is to be made to the Participant, or in the
case of SARs that are to be settled in shares of Common Shares, the date or
dates upon which such shares are to be delivered to the Participant, (iii) with
respect to Performance Units, the date or dates upon which cash or shares of
Common Shares are to be delivered to the Participant, (iv) with respect to
Dividend Equivalents, the date upon which payment thereof is to be made, and (v)
with respect to Stock Equivalent Units, the date upon which payment thereof is
to be made, in each case determined in accordance with the terms of the Award
Agreement under which any such Award was made.

         "Stock Appreciation Right" or "SAR" means an Award that entitles the
Participant to receive on the Settlement Date an amount equal to the excess of:

              (i)  the Fair Market Value of a share of Common Shares on the date
         of exercise of the SAR over

              (ii) the Award Price specified in the Award Agreement.

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         "Stock Equivalent Unit" means an Award that entitles the Participant to
receive on the Settlement Date an amount equal to the Fair Market Value of one
share of Common Shares on such date.

         "Stock Option" or "Option" means any right to purchase shares of Common
Shares (including a Reload Stock Option) awarded pursuant to Section 8.A.

         3. TERM

         The Plan shall be effective as of the date the Plan is approved by the
Board, and shall remain in effect until terminated in accordance with Section
12. After termination of the Plan, no further Awards may be granted other than
Reload Stock Options granted in accordance with Award Agreements existing as of
the date of termination, but outstanding Awards shall remain effective in
accordance with their terms and the terms of the Plan.

         4. PLAN ADMINISTRATION

            A. The Committee shall be responsible for administering the Plan.

               (i) Powers. The Committee shall have full and exclusive
            discretionary power to interpret the Plan and to determine
            eligibility for benefits and to adopt such rules, regulations and
            guidelines for administering the Plan as the Committee may deem
            necessary or proper. Such power shall include, but not be limited
            to, selecting Award recipients, establishing all Award terms and
            conditions, including terms and conditions relating to a change in
            control of the Company, the Parent, or any CNH Company, converting
            Awards to options to purchase Parent securities, and adopting
            modifications and amendments to the Plan or any Award Agreement,
            including without limitation, any that are necessary to comply with
            the laws of the countries in which the Company or its affiliates
            operate; provided, however, that subject to Section 7 and except as
            otherwise specifically provided in the Award Agreement, no such
            modification or amendment shall impair the rights of any
            Participant, without his consent, in any Award previously granted
            under the Plan.

               (ii) Delegation. Except to the extent prohibited by applicable
            law or the applicable rules of a stock exchange, (i) the

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            Chief Executive Officer of the Company shall have the authority to
            select Award recipients and establish the terms and conditions of
            such Awards within the limits of the Plan to officers and employees
            who are not executive officers of the Company and who do not report
            directly to either the Chief Executive Officer or the Chief
            Operating Officer of the Company, and (ii) the Committee may
            allocate all or any portion of its responsibilities and powers to
            any one or more of its members and may delegate all or any part of
            its responsibilities and powers to any person or persons selected by
            it. To the extent that the Committee has allocated or delegated any
            portion of its responsibilities or powers, references herein to the
            Committee shall include, with respect to such responsibilities or
            powers, the person or persons to whom they have been allocated or
            delegated.

            B. The Committee may employ attorneys, consultants, accountants and
         other persons, and the Committee, the Company and its officers and
         directors shall be entitled to rely upon the advice, opinions or
         valuations of any such persons. All actions taken and all
         interpretations and determinations made by the Committee in good faith
         shall be final and binding upon the Participants, the Company and all
         other interested persons. No member of the Committee shall be
         personally liable for any action, determination, or interpretation made
         in good faith with respect to the Plan or Awards, and all members of
         the Committee shall be fully protected by the Company, to the fullest
         extent permitted by applicable law, in respect of any such action,
         determination or interpretation.

         5. ELIGIBILITY

         Awards will be limited to persons who are officers or employees of the
CNH Companies. In determining the persons to whom Awards shall be made, the
Committee shall, in its discretion, take into account the nature of the person's
duties, past and potential contributions to the success of the CNH Companies and
such other factors as the Committee shall deem relevant in connection with
accomplishing the purposes of the Plan. A director of the Company or a CNH
Company who is not also an officer or employee shall not be eligible to receive
an Award. A person who has received an Award or Awards may receive an additional
Award or Awards.

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         6. SHARES SUBJECT TO PLAN

            A. Subject to adjustment pursuant to Section 7:

               (i) the maximum number of Common Shares that shall be available
            for issuance under the Plan shall be 28,000,000;

               (ii) in no event shall the aggregate number of shares of Common
            Shares underlying Options and SARs awarded to any one Participant
            during any calendar year exceed 2,000,000 shares.

            B. Common Shares that may be issued under the Plan may be either
         authorized and unissued shares or issued shares that have been
         reacquired by the Company and that are being held as treasury shares.
         No fractional shares shall be issued under the Plan; provided, however,
         that cash, in an amount equal to the Fair Market Value of a fractional
         share as of the Settlement Date of the Award, shall be paid in lieu of
         any fractional shares in the settlement of Awards payable in Common
         Shares.

         7. ADJUSTMENTS AND REORGANIZATION

         In the event of any merger, reorganization, consolidation,
recapitalization, separation, liquidation, stock dividend, extraordinary
dividend, spin-off, split-up, rights offering, share combination, or other
change in the corporate structure of the Company affecting the Common Shares,
the number and kind of shares that may be delivered under the Plan shall be
subject to such equitable adjustment as the Committee, in its sole discretion,
may deem appropriate in order to preserve the benefits or potential benefits to
be made available under the Plan, and the number and kind and price of shares
subject to outstanding Awards and any other terms of outstanding Awards shall be
subject to such equitable adjustment as the Committee, in its sole discretion,
may deem appropriate in order to prevent dilution or enlargement of outstanding
Awards.

         8. AWARDS

         The Committee shall determine the type and amount of any Award to be
made to any Participant; provided, however, that no Awards granted pursuant to
this Plan shall vest in less than six months after the date the Award is
granted. Awards may be granted singly, in combination, or in tandem. Awards

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may also be made in combination or in tandem with, in replacement of, as
alternatives to, or as the payment form for, grants or rights under any other
employee benefit or compensation plan of the CNH Companies, including any such
employee benefit or compensation plan of any acquired entity.

            A. Stock Options

               (i) Grants. The Committee may grant any Participant one or more
            ISOs, Non-Qualified Stock Options, or both, in each case with or
            without SARs or Reload Stock Options or any other form of Award.
            Stock Options granted pursuant to this Plan shall be subject to such
            additional terms, conditions, or restrictions as may be provided in
            the Award Agreement relating to such Stock Option.

               (ii) Option Price. The Option Price of a Stock Option shall be
            determined in the manner set forth by the Committee but shall not be
            less than 100% of the lesser of (a) the Fair Market Value of a
            Common Share on the Award Date or (b) the average Fair Market Value
            of a Common Share per the 30 trading days immediately preceding the
            Award Date; provided, however, that in the case of a Non-Qualified
            Stock Option granted retroactively in tandem with or as substitution
            for another Award, the Option Price shall not be less than the price
            that the Committee determines necessary to preserve the value of
            such other Award on the date of substitution; and provided further
            that, to the extent provided in a written offer of employment, the
            Option Price of a Stock Option shall not be less than 100% of the
            Fair Market Value of a Common Share on such other date specified in
            the offer letter but not earlier than the date of offer.

               (iii) ISOs. In no event shall an ISO be awarded on or after the
            tenth anniversary of the date the Plan is adopted or the date the
            Plan is approved by the Company's shareholders, whichever is
            earlier, and in no event shall the number of Common Shares which may
            be subject to ISOs exceed the number of Common Shares available
            under Section 6.A. prior to such tenth anniversary. Anything in this
            Plan to the contrary notwithstanding, no term of this Plan relating
            to ISOs shall be interpreted, amended or altered, nor shall any
            discretion or authority awarded under the Plan be exercised, so as
            to disqualify this Plan under Section 422 of the Code, or, without
            the consent of the Participants affected, to disqualify any ISO
            under Section 422 of the Code.

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               (iv) Manner of Payment of Option Price. The Option Price shall be
            paid in full at the time of the exercise of the Stock Option (except
            that, in the case of an exercise arrangement approved by the
            Committee in accordance with clause (c) below, payment may be made
            as soon as practicable after the exercise) and may be paid in any of
            the following methods or combinations thereof:

                    (a) in United States dollars in cash, check, bank draft or
               money order payable to the order of the Company;

                    (b) by the tendering, either by actual delivery or by
               attestation, Common Shares acceptable to the Committee (but
               excluding any shares acquired from the Company unless such shares
               were acquired and vested more than six months prior to the date
               tendered under this clause (b)) having an aggregate Fair Market
               Value on the date of such exercise equal to the Option Price; or

                    (c) in any other manner that the Committee shall approve,
               including without limitation, any arrangement that the Committee
               may establish to enable Participants to simultaneously exercise
               Stock Options and sell the shares of Common Shares acquired
               thereby and apply the proceeds to the payment of the Option Price
               therefor.

               (v) Reload Stock Options. The Committee may award Reload Stock
            Options to any Participant either in combination with other Awards
            or in separate Award Agreements that grant Reload Stock Options upon
            exercise of outstanding stock options granted under this Plan or
            otherwise.

            B. Stock Appreciation Rights.

               (i) Grants. The Committee may award any Participant SARs, which
            shall be subject to such additional terms, conditions, or
            restrictions as may be provided in the Award Agreement relating to
            such SAR Award, including any limits on aggregate appreciation. SARs
            may be settled in Common Shares or cash or both.

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               (ii) Award Price. The Award Price per share of Common Shares of a
            SAR shall be fixed in the Award Agreement and shall be not less than
            100% of the Fair Market Value of a share of Common Shares on the
            date of the Award; provided, however, that in the case of a SAR
            awarded retroactively in tandem with or as a substitution for
            another Award, the Award Price per share of a SAR shall be not less
            than 100% of the Fair Market Value of a share of Common Shares on
            the date of such other Award.

               (iii) Distribution of SARs. SARs shall be exercisable in
            accordance with the conditions and procedures set out in the Award
            Agreement relating to such SAR Award.

            C. Common Shares and Restricted Stock. The Committee may award
         Common Shares or Restricted Stock to any Participant. Awards of
         Restricted Stock shall be subject to such conditions and restrictions
         as are established by the Committee and set forth in the Award
         Agreement, which may include, but are not limited to, continued service
         with the Company, achievement of specific business objectives, and
         other measurements of individual or business unit or Company
         performance.

            D. Stock Equivalent Units. The Committee may award Stock Equivalent
         Units to any Participant. All or part of any Stock Equivalent Units
         Award may be subject to conditions and restrictions established by the
         Committee, and set forth in the Award Agreement, which may include, but
         are not limited to, continued service with the Company, achievement of
         specific business objectives, and other measurements of individual or
         business unit or Company performance that may include but shall not be
         limited to, earnings per share, net profits, total shareholder return,
         cash flow, return on shareholders' equity, and cumulative return on net
         assets employed.

            E. Dividends and Dividend Equivalents. An Award (including without
         limitation a Stock Option or SAR Award) may provide the Participant
         with the right to receive dividend payments or Dividend Equivalent
         payments with respect to Common Shares subject to the Award (both
         before and after the Common Shares subject to the Award are earned,
         vested, or acquired), which payments may be either made currently or
         credited to an account for the Participant, and may be settled in cash
         or Common Shares, as determined by the Committee. In lieu of awarding
         Dividend Equivalents, the Committee may provide for automatic awards of
         Stock Equivalent Units on each date that cash

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         dividends or Dividend Equivalents will be paid in an amount equal to
         (i) the amount of such dividends or Dividend Equivalents, divided by
         (ii) the Fair Market Value of the Common Shares on the dividend payment
         date.

            F. Performance Units. Performance Units shall be based on attainment
         over a specified period of individual performance targets or on other
         parameters that may include, but shall not be limited to, earnings per
         share, total shareholder return, cash flow, return on shareholders'
         equity, and cumulative return on net assets employed. Performance Units
         may be settled in Common Shares or cash or both.

         9.  DEFERRALS AND SETTLEMENTS

         Settlement of Awards may be in the form of cash, Common Shares, other
Awards, or in combinations thereof as the Committee shall determine, and with
such other restrictions as it may impose. Subject to Section 4.A.(i), the
Committee may also require or permit Participants to defer the issuance or
vesting of shares or the settlement of Awards under such rules and procedures as
it may establish under the Plan. The Committee may also provide that deferred
settlements include the payment of, or crediting of interest on, the deferral
amounts or the payment or crediting of Dividend Equivalents on deferred
settlements denominated in shares.

         10. TRANSFERABILITY

         Except as otherwise provided by an Award Agreement, no Awards under the
Plan shall be assignable, alienable, saleable or otherwise transferable other
than by will or the laws of descent and distribution.

         11. CONVERTIBILITY

         In the event the Participant is transferred and becomes an employee of
any other entity which is a member of the Parent Group, the Awards may be
converted or adjusted in any manner that the Committee, in its sole discretion,
may deem appropriate, including, without limitation, a conversion into options
to purchase Parent securities.

         12. AWARD AGREEMENTS

         Awards under the Plan shall be evidenced by Award Agreements that set
forth the details, conditions and limitations for each Award, which may include
the term of an Award, the provisions applicable in the event the Participant's

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employment terminates or the Participant is transferred to any other entity
which is a member of the Parent Group, the provisions applicable in the event
there is a change in the Company's corporate structure, and the Company's
authority to unilaterally or bilaterally amend, modify, suspend, cancel or
rescind any Award, subject to the terms of the Plan.

         13. TERMINATION

         The Committee may terminate the Plan at any time provided, however,
that no termination shall impair the rights of any Participant, without his
consent, in any Award previously granted under the Plan.

         14. TAX WITHHOLDING

         The Company shall have the right to (i) make deductions from any
settlement of an Award made under the Plan, including the delivery or vesting of
shares, or require shares or cash or both be withheld from any Award, in each
case in an amount sufficient to satisfy withholding of any applicable federal,
state or local taxes required by law, or (ii) take such other action as may be
necessary or appropriate to satisfy any such withholding obligations. The
Committee may determine the manner in which such tax withholding may be
satisfied, and may permit Common Shares (rounded up to the next whole number) to
be used to satisfy required tax withholding based on the Fair Market Value of
any such shares of Common Shares, as of the Settlement Date of the applicable
Award.

         15. OTHER COMPANY BENEFIT AND COMPENSATION PROGRAMS

         Unless otherwise specifically determined by the Committee, settlements
of Awards received by a Participant under the Plan shall not be deemed a part of
the Participant's regular, recurring compensation for purposes of calculating
payments or benefits from any Company benefit plan, severance program or
severance pay law of any country. Further, the Company may adopt other
compensation programs, plans or arrangements as it deems appropriate or
necessary.

         16. UNFUNDED PLAN

         Unless otherwise determined by the Committee, the Plan shall be
unfunded and shall not create (or be construed to create) a trust or a separate
fund or funds. The Plan shall not establish any fiduciary relationship between
the Company and any Participant or other person. To the extent any person

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holds any rights by virtue of a grant awarded under the Plan, such right (unless
otherwise determined by the Committee) shall be not greater than the right of an
unsecured general creditor of the Company.

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         17. FUTURE RIGHTS

         No person shall have any claim or right to be granted an Award under
the Plan, and no Participant shall have any right under the Plan to be retained
in the employment of the Company or its affiliates.

         18. GOVERNING LAW

         The validity, construction and effect of the Plan, and any actions
taken or relating to the Plan, shall be determined in accordance with the laws
of the State of Delaware, U.S.A.

         19. SUCCESSORS AND ASSIGNS

         The Plan shall be binding on all successors and assigns of a
Participant, including, without limitation, the estate of such Participant and
the executor, administrator or trustee of such estate, or any receiver or
trustee in bankruptcy or representative of the Participant's creditors.

         20. GENERAL RESTRICTIONS

         A. Notwithstanding any other provision of the Plan, the Company shall
have no liability to deliver any Common Shares under the Plan or make any other
distribution of benefits under the Plan unless such delivery or distribution
would comply with all applicable laws (including, without limitation, the
requirements of the United States Securities Act of 1933), and are authorized
for listing on any securities exchange on which the Common Shares of the Company
are listed.

         B. To the extent that the Plan provides for the issuance of Common
Shares, the issuance may be effected on a non-certificated basis, to the extent
not prohibited by applicable law or the applicable rules of any stock exchange
on which the Common Shares of the Company are listed.

         C. Except as otherwise provided in any Award Agreement, a Participant
shall have no rights as a shareholder of the Company until he or she becomes the
holder of record of Common Shares.

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         21. ARBITRATION

         Any and every dispute or difference arising under, or in relation to
this Plan, including any dispute or difference as to the validity, meaning or
effect hereof, shall be finally settled under the Rules of the United States
Federal Arbitration Act. The arbitration award shall be final and binding and
shall deal with the question of the costs of arbitration and all matters
relating thereto. The arbitrator is not empowered to award damages in excess of
reasonable actual damages.

Cnh Global Equity Incentive Plan
(as amended July 23, 2001)

                                       14<PAGE>
                                                                   Exhibit 10(7)

                              EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT, dated as of JANUARY 1, 2002, by and between CNA Surety
Corporation a Delaware corporation or its subsidiaries ("the Company"), and MARK
C. VONNAHME ("the Executive").

                                   WITNESSETH:

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:

1.    EMPLOYMENT.

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 President
and Chief Executive Officer 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.
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CNA Surety Corporation
Employment Agreement -
Page -2-

b.    DUTIES. During the Employment Period, Executive shall have the duties,
responsibilities, and obligations as the Board shall from time to time specify.
Executive shall devote his full time to the services required of him hereunder,
except for vacation time and reasonable periods of absence due to sickness,
personal injury or other disability, and shall use his best efforts, judgment,
skill and energy to perform such services in a manner consonant with the duties
of his position and to improve and advance the business and interests of the
Company and its subsidiaries. Nothing contained herein shall preclude Executive
from (i) serving on the board of directors of any business corporation with the
consent of the Board or (ii) serving on the Board of, or working for, any
charitable or community organization.

c.    COMPANY BOARD SERVICE. While the Executive and the Company recognize that
the right to elect directors is by law vested in the stockholders of the
Company, it is nevertheless mutually contemplated, subject to such right, that
during the term of Executive's employment under this Agreement the Executive
shall be elected and shall serve as, a member of the Boards of the Company and
its subsidiaries.

d.    LOCATION. Subject to normal business travel, Executive shall perform his
service hereunder in and shall not be required to change his place or residence
from the Chicago metropolitan area.

3.    COMPENSATION.

a.    BASE SALARY. During the Employment Period, the Company shall pay Executive
a base salary of $400,000 for the year ending December 31, 2002. The
Compensation Committee of the Board shall annually review Executive's base
salary in light of competitive practices and the performance of Executive and
the Company, and may, in its discretion, increase such base salary by an amount
they determine to be appropriate. Any such increase shall not reduce or limit
any other obligation of the Company hereunder, Executive's base salary as set
forth above or as may be increased from time to time and shall not be reduced
without the mutual written consent of the Company and the Executive. Executive's
base salary as defined in this paragraph may be referred to hereinafter as "Base
Salary."

b.    ANNUAL BONUS. For each calendar year ending during the Employment Period,
Executive may earn an annual bonus based on the achievement of target levels of
performance achieved during the calendar year. During the first quarter of each
year during the term of this Agreement, the Compensation Committee of the Board
in its sole discretion shall determine the targets and the bonus percentage
("Bonus Target") for which the Executive shall be eligible, which bonus
percentages shall range from 0% to 150%, with a target of 100% of the
Executive's Base Salary based upon the performance targets determined by the
Compensation Committee of the Board. The actual bonus, if
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CNA Surety Corporation
Employment Agreement -
Page  -3-

any, payable for any such year shall be determined solely by the Compensation
Committee of the Board based upon the performance of the Company and/or
Executive against the targets.

c.    LONG-TERM INCENTIVE COMPENSATION. During the term of the Employment
Period, Executive shall participate in all of the Company's existing and future
long-term incentive compensation programs for key executives at a level
commensurate with his position at the Company and consistent with the Company's
then current policies and practices, as determined by the Compensation Committee
of the Board. Long-term Incentive Compensation shall be targeted by the
Compensation Committee of the Board to provide to the Executive awards
equivalent to a target of 100% of the Executive's Base Salary.

d.    STOCK OPTIONS. The Executive shall be eligible for additional grants of
stock options under the terms and conditions of the Stock Option Plan dated
February 24, 1997.

4.    BENEFITS, PERQUISITES AND EXPENSES.

a.    BENEFITS. During the Employment Period, to the extent he is eligible to
participate in any welfare or retirement plans now existing or established
hereafter under their generally applicable provisions, Executive may participate
in (i) each welfare benefit plan which may be sponsored or maintained by the
Company, including, without limitation, each group life, hospitalization,
medical, dental, health, accident or disability insurance or similar plan or
program of the Company, and (ii) each retirement, profit sharing, deferred
compensation or savings plan which may be sponsored or maintained by the
Company. Nothing in this Paragraph 4(a) shall limit the Company's right to amend
or terminate any such plan. Notwithstanding any plan language to the contrary,
Executive shall be eligible for five weeks paid vacation, for the year
commencing January 1, 2002 and each subsequent year of the Employment Period.

b.    BUSINESS EXPENSES. During the Employment Period, the Company shall pay or
reimburse Executive for all reasonable expenses incurred or paid by Executive in
the performance of Executive's duties hereunder, upon presentation of expense
statements or vouchers and such other information as the Company may require and
in accordance with the generally applicable policies and procedures of the
Company as may be amended by it from time to time.

c.    ADDITIONAL BENEFITS. In addition to the foregoing, during the Employment
Period, the Executive shall be entitled to reimbursement from the Corporation
for (1) professional tax advice and services and (2) up to $5,000 per year for
financial planning advice and services.
<PAGE>
CNA Surety Corporation
Employment Agreement -
Page -4-

5.    TERMINATION OF EMPLOYMENT OR NON-RENEWAL OF AGREEMENT.

a.    EARLY TERMINATION OF THE EMPLOYMENT PERIOD. Notwithstanding Paragraph
1(b), the Employment Period shall end upon the earliest to occur of (i) a
termination of Executive's employment on account of Executive's death or
Disability, (ii) a Termination for Cause, (iii) a Termination Without Cause,
(iv) a Termination for Good Reason or (v) Termination for Change in Control.

b.    BENEFITS PAYABLE UPON TERMINATION OR NONRENEWAL. Following the early
termination of the Employment Period pursuant to Paragraph 5(a) or Nonrenewal of
this Agreement pursuant to Paragraph 1(c), Executive (or, in the event of his
death, his surviving spouse, if any, his estate, or such other beneficiary as
the Executive may designate by written notice to the Company) shall be paid
compensation in accordance with the following provisions:

      (i) Should the Executive's employment with the Company terminate for any
      reason, his Earned Salary and accrued vacation shall be paid through his
      last day of employment at the end of the Company's next regular pay period
      and Vested Benefits shall be payable in accordance with their terms. In
      addition:

      (ii) Should the Executive's employment with the Company terminate for
      Cause or should the Executive terminate this Agreement without Good
      Reason, other than the payments set forth in Paragraph 5(b)(i) above and
      any entitlement to any Vested Benefits, the Company shall have no further
      obligations to the Executive;

      (iii) Should the Executive's employment with the Company terminate Without
      Cause, for Good Reason, for Change of Control or because of the
      non-renewal of this Agreement, he shall be paid the Severance Benefit,
      Additional Benefits, Vested Benefits and Incentive Compensation.
      Notwithstanding anything to the contrary in this Agreement, no Severance
      Benefit or Incentive Compensation shall be payable if the Executive
      violates the terms and covenants of section 6 of this Agreement. Moreover,
      Executive agrees that if he violates section 6 of this Agreement he shall
      repay forthwith the Company any amount of the Severance Benefit or
      Incentive Compensation previously paid pursuant to this Paragraph 5(b)(i).
      In addition, should the Executive's employment with the Company terminate
      due to a Termination for Change in Control, any stock options Executive
      shall have received which are unvested at the time of such termination
      shall immediately accelerate and become fully vested and the exercise
      period for such options shall be extended to permit the Executive to
      exercise such options during the two year period immediately following the
      Executive's termination.

      (iv) Should the Executive's employment with Company terminate due to death
      or Disability, the Company shall pay the Executive an amount equal to a
      pro-rated
<PAGE>
CNA Surety Corporation
Employment Agreement -
Page -5-

      amount equal to the product of the Bonus Target for the year in which
      termination occurs and a fraction the numerator of which is equal to the
      number of days in the calendar year of the Executive's termination of
      employment which have elapsed as of the date of such termination and the
      denominator of which is 365; plus long-term cash incentive compensation
      awards held by the Executive at the date of his termination, which shall
      be payable, if at all, based upon actual Company performance results (but
      without regard to any individual performance criteria) for the applicable
      pro rata portion of performance period.

c.    TIMING OF PAYMENT. The payments referred to in Paragraph 5(b) shall be
made as follows: Earned Salary shall be paid in cash in a single lump sum as
soon as practicable, but in no event more than ten business days, following the
end of the Employment Period. Severance Benefits shall be paid in equal biweekly
installments during the two year period immediately following the Executive's
termination. Incentive Compensation shall be payable at the same time as similar
awards are paid to other executives still actively employed by the Company and
participating in the plans under which the awards are payable. Vested Benefits
shall be payable in accordance with the terms of the plan (including, without
limitation, the extension of the exercise period of options under any stock
option plan) under which such benefits have been awarded or accrued. Additional
Benefits shall be provided or made available at the times specified below as to
each such Additional Benefit.

d.    DEFINITIONS. For purposes of sections 5 and 6, capitalized terms have the
following meanings:

"ADDITIONAL BENEFITS" consists of the following rights and benefits:

      except as otherwise provided below, Executive (and, to the extent
      applicable, his dependents) will be entitled to continue participation in
      all of the Company's health benefit plans (the "Health Plans"), until the
      second anniversary of Executive's termination of employment (the "End
      Date"); provided that Executive's participation in the Company's Health
      Plans shall cease on any earlier date that Executive becomes eligible for
      comparable benefits from a subsequent employer. To the extent any such
      benefits cannot be provided under the terms of the applicable plan, policy
      or program, the Company shall provide a comparable benefit under another
      plan or from the Company's general assets. Executive's participation in
      the Health Plans will be on the same terms and conditions that would have
      applied had Executive continued to be employed by the Company through the
      End Date. The Company shall deduct the Executive's cost of the foregoing
      benefits from the Executive's Severance Benefit payments at the same
      intervals as they were deducted from his Base Salary during the Employment
      Period.
<PAGE>
CNA Surety Corporation
Employment Agreement -
Page -6-

"DISABILITY" means disability as defined in the Company's Long Term Disability
Plan.

"EARNED SALARY" means any Base Salary earned, but unpaid, for services rendered
to the Company on or prior to the date on which the Employment Period ends
pursuant to Paragraph 5(a) or because of the Nonrenewal of this Agreement
pursuant to Paragraph 1(c).

"INCENTIVE COMPENSATION" consists of the sum of:

      (i)   a pro-rated amount equal to the product of the average of the actual
            performance bonuses paid to the Executive by the Company during the
            two calendar years prior to the year in which termination occurs
            ("Prior Bonus") and a fraction the numerator of which is equal to
            the number of days in the calendar year of Executive's termination
            of employment which have elapsed as of the date of such termination
            and the denominator of which is 365; plus

      (ii)  an amount equal to twice the amount of the Prior Bonus; plus

      (iii) any long-term cash incentive compensation awards held by Executive
            at the date of his termination, which shall be payable, if at all,
            based upon actual Company performance results (but without regard to
            any individual performance criteria) for the applicable pro rata
            portion of performance period.

"SEVERANCE BENEFIT" means two years Base Salary based upon the Executive's Base
Salary on the date the Executive's employment terminates.

"TERMINATION FOR CHANGE IN CONTROL" means a termination of Executive's
employment by the Company for any reason other than a Termination for Cause at
the sole discretion of the Company within one year following the date upon which
(i) Continental Casualty Company and any affiliates no longer are able
collectively to elect a majority of the Board, (ii) a sale of all or
substantially all of the assets of the Company is consummated or (iii) a merger,
consolidation or other business combination involving the Company and an
unaffiliated third party is consummated in which the Company is not the
surviving corporation.

"TERMINATION FOR CAUSE" means a termination of the Executive's employment by the
Company (A) due to conduct of the Executive, which is determined by the Board,
in its sole discretion, to be to: (i) a willful and continued failure to perform
the material duties of his position, (ii) a fraud against the Company or (iii) a
material breach of any provision
<PAGE>
CNA Surety Corporation
Employment Agreement -
Page -7-

of this Agreement which has had (or is expected to have) a material adverse
effect on the business of the Company or its subsidiaries; or (B) due to the
Executive's conviction of a felony.

"TERMINATION FOR GOOD REASON" means a termination of Executive's employment by
Executive within 90 days following (i) a material diminution in Executive's
positions, duties and responsibilities from those described in Paragraph 2
hereof, (ii) the removal of Executive from, or the failure to re-elect Executive
as a member of the Board, (iii) a reduction in Executive's annual Base Salary,
(iv) a material reduction in the aggregate value of the retirement, profit
sharing and welfare benefits provided to Executive from those in effect as of
the Commencement Date (other than a reduction which is proportionate to the
reductions applicable to other senior executives pursuant to a cost-saving plan
that includes all senior executives). Notwithstanding the foregoing, a
termination shall not be treated as a Termination for Good Reason (i) if
Executive shall have consented in writing to the occurrence of the event giving
rise to the claim of Termination for Good Reason or (ii) unless Executive first
shall have delivered a written notice to the Company within 30 days of his
having actual knowledge of the occurrence of one of such events stating that he
intends to terminate his employment for Good Reason and specifying the factual
basis for such termination, and such event, if capable of being cured, shall not
have been cured within 30 days of the receipt of such notice.

"TERMINATION WITHOUT CAUSE" means any termination of Executive's employment by
the Company other than a Termination for Cause.

"VESTED BENEFITS" means amounts which are vested or which Executive is otherwise
entitled to receive under the terms of or in accordance with any plan maintained
by the Company at or subsequent to the date of his termination without regard to
the performance by Executive of further services or the resolution of a
contingency.

e.    FULL DISCHARGE OF COMPANY OBLIGATIONS. In consideration of receiving any
payments or benefits under Section 5 of this Agreement, the Executive agrees to
sign a release in the form attached to this Agreement as Exhibit A, as a
condition precedent to receiving them. The amounts payable to Executive pursuant
to this Section 5 following termination of his employment (including amounts
payable with respect to Vested Benefits) shall be in full and complete
satisfaction of Executive's rights under this Agreement and any other claims he
may have in respect of his employment by the Company or any of its subsidiaries.
Such amounts shall constitute liquidated damages with respect to any and all
such rights and claims and, upon Executive's receipt of such amounts, the
Company shall be released and discharged from any and all liability to Executive
in connection with this Agreement or otherwise in connection with Executive's
employment with the Company and its subsidiaries. Nothing in this Paragraph 5(e)
shall
<PAGE>
CNA Surety Corporation
Employment Agreement -
Page -8-

be construed to release the Company from any obligation to indemnify Executive
and hold Executive harmless from and against any claim, loss or cause of action
arising from or out of Executive's performance as an officer, director or
employee of the Company or any of its subsidiaries or in any other capacity,
including any fiduciary capacity, in which Executive served at the request of
the Company to the maximum extent permitted by applicable law and the
certificate of incorporation and by-laws of the Company.

f.    MAKE-WHOLE PAYMENTS.

      (i)   Notwithstanding any provisions to the contrary in this Agreement, if
            any payment made pursuant to this Section 5 which is in the nature
            of compensation payable to the Executive by the Company (or any
            affiliate thereof) under this Agreement or otherwise (a "Payment")
            would, if paid, constitute a "parachute payment" under Section 280G
            of the Internal Revenue Code of 1986, as amended ("the Code") or is
            subject to any tax under Section 4999 of the Code, or any similar
            federal, state, local, or other law (an "Excise Tax"), then the
            Company shall pay to the Executive and additional amount (the
            "Make-Whole Amount") which, after payment of all income, payroll,
            and excise taxes thereon is equal to the Excise Tax. For purposes of
            determining the Make-Whole Amount, the Executive shall be deemed to
            be taxed at the highest marginal rate under all applicable local,
            state, and federal income tax laws for the year in which the
            Make-Whole Amount is paid. The Make-Whole Amount payable with
            respect to an Excise Tax shall be paid by the Company coincident
            with the receipt by the Executive of the Payment with respect to
            which such Excise Tax relates.

      (ii)  All calculations under Section 5(f)(i) above shall be made initially
            by the Company and the Company shall provide prompt written notice
            thereof to the Executive to enable the Executive to timely file all
            applicable tax returns. Upon request of the Executive, the Company
            shall provide the Executive with sufficient tax and compensation
            data to enable the Executive or his tax advisor to independently
            make the calculations described in Section 5(f)(i) and the Company
            shall reimburse the Executive for reasonable fees and expenses
            incurred for any such verification. If the Executive gives written
            notice to the Company of any objection to the results of the
            Company's calculations within 60 days of the Executive's receipt of
            written notice thereof, the dispute shall be referred for
            determination to tax counsel selected by the independent auditors of
            the Company ("Tax Counsel"). The Company shall pay all fees and
            expenses of such Tax Counsel. Pending such determination by Tax
            Counsel, the Company shall pay the Executive the Make-Whole Amount
            as determined by it in good faith. The determination by Tax Counsel
            shall
<PAGE>
CNA Surety Corporation
Employment Agreement  -
Page -9-

            be conclusive and binding upon all parties unless the Internal
            Revenue Service, a court of competent jurisdiction, or such other
            duly empowered governmental body or agency (a "Tax Authority")
            determines that the Executive owes a greater or lesser amount of
            Excise Tax with respect to any Payment than the amount determined by
            Tax Counsel. At the request of the Company, the Executive shall take
            all reasonable steps to appeal any adverse determination by a Tax
            Authority with respect to any Excise Tax; provided that the Company
            advances to the Executive all reasonable legal fees, costs, and
            other expenses incurred in such appeal. Should a Tax Authority
            finally determine that an additional Excise Tax is owed, then the
            Company shall pay an additional Make-Whole Amount to the Executive
            in a manner consistent with this Section 5(f) with respect to any
            additional Excise Tax and any assessed interest, fines or penalties.
            If any Excise Tax as calculated by the Company or Tax Counsel, as
            the case may be, is finally determined by a Tax Authority to exceed
            the amount required to be paid under applicable law, then the
            Executive shall repay such excess to the Company within 30 days of
            such determination: provided that such repayment shall be reduced by
            the amount of any taxes paid by the Executive on such excess which
            is not offset by the tax benefit resulting from the reduced Excess
            Tax.

6.    NONCOMPETITION AND CONFIDENTIALITY.

By and in consideration of the salary, benefits and other consideration,
contained in this Agreement, the adequacy and receipt of which is hereby
acknowledged, the Executive agrees that:

a.    NONCOMPETITION. During the Employment Period and during the two year
period (the "Restriction Period") following any termination or Nonrenewal of the
Executive's employment, the Executive shall not whether as a principal, partner,
employee, agent, consultant, shareholder (other than as a holder, or a member of
a group which is a holder, of not in excess of 1% of the outstanding voting
shares of any publicly traded company) or in any other relationship or capacity:
(i) become associated with any entity that is actively engaged or takes any
steps to plan to be engaged in any geographic area in the surety business or in
any other business which in competition with the business in which the Company
is engaged or to the Executive's knowledge is actively considering becoming
engaged, (ii) contact, call upon, solicit business from, sell, or render
services to, any customer or licensed agent of the Company with respect to any
service or product identical or similar to any services or products provided or
sold by the Company, including but not limited to current products or those
under development, distribution strategy, development of computer software and
administrative systems for administration.
<PAGE>
CNA Surety Corporation
Employment Agreement -
Page -10-

b.    CONFIDENTIALITY. The Executive acknowledges and agrees that all records
(whether written or recorded electronically) including but not limited to agent
and client lists, files, reports, notes, internal memoranda and manuals relating
to the Company's business; business plans, business processing techniques,
systems and methods; sales processes, sales and training manuals; underwriting
procedures and manual; budgets; financial statements; compilations; or summaries
of the foregoing, by whomever prepared, and copies or reproductions of the
foregoing, relating to the Company's operations or activities, or to the
operations or activities of any of the Company's customers, agents, suppliers,
vendors, or subsidiary companies thereof, made or received by the Executive
during the course of this employment with the Company have been, are and shall
remain the sole and exclusive property of the Company and were held by the
Executive during his employment only as a trustee for the Company which, at all
times, retained ownership and control of said records.

c.    NON-SOLICITATION OF EMPLOYEES. During the Employment Period and the two
year period following any termination or Nonrenewal of Executive's employment,
Executive shall not directly or indirectly solicit, nor shall any entity with
which the Executive is associated encourage or induce any employee of the
Company or any of its subsidiaries to terminate employment with it, and shall
not directly or indirectly, either individually or as owner, agent, employee,
consultant or otherwise, employ or offer employment to any person who is or was
employed by the Company or a subsidiary thereof unless such person shall have
ceased to be employed by it for a period of at least six months.

d.    COMPANY PROPERTY. Except as expressly provided herein, promptly following
Executive's termination of employment, Executive shall return to the Company all
property of the Company, and all copies thereof in Executive's possession or
under his control.

e.    INJUNCTIVE RELIEF AND OTHER REMEDIES WITH RESPECT TO COVENANTS. Executive
acknowledges and agrees that the covenants and obligations of Executive with
respect to noncompetition, nonsolicitation, confidentiality and Company
property, relate to special, unique and extraordinary matters and that a
violation of any of the terms of such covenants and obligations will cause the
Company irreparable injury for which adequate remedies are not available at law.
Executive acknowledges and agrees that the geographic scope of his employment
with the Company is national, and that the national geographic and the two year
restrictions placed upon him in Paragraph 6 of this Agreement are reasonable and
necessary to the preservation and vitality of the Company's business,
reputation, and good will due to the nature of the Company's business, and given
his knowledge and expertise within the insurance industry and the consideration
provided in this Agreement, that he will be able to earn satisfactory livelihood
or otherwise provide for his financial security without violating such
restrictions.
<PAGE>
CNA Surety Corporation
Employment Agreement -
Page -11-

Therefore, Executive agrees that the Company shall (i) be entitled to, on both
an interim and final basis, an injunction, restraining order or such other
equitable relief (without the requirement to post bond) restraining Executive
from committing any violation of the covenants and obligations contained in this
section 6 and (ii) have no further obligation to make any payments to Executive
hereunder following any material violation of the covenants and obligations
contained in this section 6. These remedies are cumulative and are in addition
to any other rights and remedies the Company may have at law or in equity. In
connection with the foregoing provisions of this section 6, Executive represents
that his economic means and circumstances are such that such provisions will not
prevent him from providing for himself and his family on a basis satisfactory to
him.

The Executive and Company agree that section 6 of this Agreement is not subject
to the provisions of Paragraph 7(b). The Executive agrees that in the event he
violates said section 6 he will pay all costs and expenses with respect to the
prosecution or defense of any claim or suit brought by or against the Company
including, but not limited to, reasonable attorneys' fees. The Executive further
agrees that in the event he in any way violates the provisions set forth in
section 6, the Company would suffer irreparable harm for which both preliminary
and final injunctive relief would be an appropriate remedy in addition to such
other relief to which the company may also be entitled.

f.    For purposes of Section 6 of this agreement "the Company" shall include
its subsidiaries.

g.    Notwithstanding anything herein to the contrary, should the Executive
terminate the employment period without Good Reason or should the Company
terminate it for Cause, the two year period referred to at various points in
this paragraph shall be reduced to one year.

7.    MISCELLANEOUS.

a.    SURVIVAL. Paragraph 5 (relating to early termination), 6 (relating to
noncompetition, nonsolicitation and confidentiality, 7(b) (relating to
arbitration), 7(c) (relating to legal fees) and 7(m) (relating to governing law)
shall survive the termination hereof.

b.    ARBITRATION. Except for disputes arising out of or relating to the
Provisions of section 6, any dispute arising out of or relating to this
Agreement, including each and every aspect of the relationship of the Executive
and the Company, shall be resolved by binding arbitration. The arbitrator shall
be a retired federal judge. If the parties cannot agree on an acceptable
arbitrator, the dispute shall be heard by a panel of three retired judges, one
appointed by each of the parties and the third appointed by the other two
arbitrators. The arbitrator shall hear and decide the dispute not by compromise
but according to law as if sitting in court applying the rules of evidence. The
arbitrator's
<PAGE>
CNA Surety Corporation
Employment Agreement -
Page -12-

decision shall be in writing and shall set forth the facts and law supporting
such decision. The arbitration shall be held in Chicago, Illinois and except as
otherwise provided in this Paragraph, shall be conducted in accordance with the
Voluntary Labor Arbitration Rules of the American Arbitration Association then
in effect at the time of the arbitration.

c.    BINDING EFFECT. This Agreement shall be binding on, and shall inure to the
benefit of, the Company and any person or entity that succeeds to the interest
of the Company (regardless of whether such succession does or does not occur by
operation of law) by reason of the sale of all or a portion of the Company's
stock, a merger, consolidation or reorganization involving the Company or,
unless the Company otherwise elects in writing, a sale of the assets of the
business of the Company (or portion thereof) in which executive performs a
majority of his services. This Agreement shall also inure to the Benefit of
Executive's heirs, executors, administrators and legal representatives.

d.    ASSIGNMENT. Except as provided under Paragraph 7(c), neither this
Agreement nor any of the rights or obligations hereunder shall be assigned or
delegated by any party hereto without the prior written consent of the other
party.

e.    ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties hereto with respect to the matters referred to herein. No other
agreement relating to the terms of Executive's employment by the Company, oral
or otherwise, shall be binding between the parties unless it is in writing and
signed by the party against whom enforcement is sought. There are no promises,
representations, inducements, or statements between the parties other than those
that are expressly contained herein. Executive acknowledges that he is entering
into this Agreement of his own free will and accord, and with no duress, that he
has read this Agreement and that he understands it and its legal consequences.

f.    SEVERABILITY; REFORMATION. In the event that one or more of the provisions
of this Agreement shall become invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall not be affected thereby. In the event that any of the provisions of
any of Paragraphs 6(a), (b) or (c) is not enforceable in accordance with its
terms, Executive and the Company agree that such Paragraph shall be reformed to
make such Paragraph enforceable in a manner which provides the Company the
maximum rights permitted at law.

g.    WAIVER. Waiver by any party hereto of any breach or default by the other
party of any of the terms of this Agreement shall not operate as a waiver of any
other breach or default, whether similar to or different from the breach or
default waived. No waiver of any provision of this Agreement shall be implied
from any course of dealing between the parties hereto or from any failure by
either party hereto to assert its or his rights hereunder on any occasion or
series of occasions.
<PAGE>
CNA Surety Corporation
Employment Agreement -
Page -13-

h.    NOTICES. Any notice required or desired to be delivered under this
Agreement shall be in writing and shall be delivered personally, by courier
service, by registered mail, return receipt requested, or by telecopy and shall
be effective upon actual receipt by the party to which such notice shall be
directed, and shall be addressed as follows (or to such other address as the
party entitled to notice shall hereafter designate in accordance with the terms
hereof):

            If to the Company:

            CNA Surety Company
            CNA Plaza
            Chicago, Illinois 60685
            Attention: General Counsel

            If to the Executive:

            The home address of Executive noted on the records of the Company.

i.    AMENDMENTS. This Agreement may not be altered, modified or amended except
by a written instrument signed by an authorized representative of the Company
and by the Executive.

j.    HEADINGS. Headings to Paragraphs in this Agreement are for the convenience
of the parties only and are not intended to be part of or to affect the meaning
or interpretation hereof.

k.    COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.

l.    WITHHOLDING. Any payments provided for herein shall subject to withholding
pursuant to applicable Federal, State, and local law then in effect.

m.    GOVERNING LAW. This Agreement shall be governed by the laws of the State
of Delaware, without reference to principles of conflicts or choice of law under
which the law of any other jurisdiction would apply.

n.    SOURCE OF PAYMENT. The payments and benefits provided for herein other
than stock options may, at the option of the Company, be provided by one or more
of its subsidiaries, rather than the Company, itself.
<PAGE>
CNA Surety Corporation
Employment Agreement -
Page -14-

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer and the Executive has hereunto set his hand as of the
day and year first above written.

CNA SURETY CORPORATION

    By:                                      By:
       ---------------------------              ---------------------------
          Enid Tanenhaus                           John S. Heneghan
          Vice President & General Counsel         Chief Financial Officer

    By:
       ---------------------------
          Mark C. Vonnahme

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