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                                                                  EXHIBIT 10(18)















                             CNA SURETY CORPORATION
                           DEFERRED COMPENSATION PLAN

                             EFFECTIVE APRIL 1, 2000




























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                             CNA SURETY CORPORATION
                           DEFERRED COMPENSATION PLAN

                             Effective April 1, 2000

                              Preamble and Purpose

     CNA Surety Corporation hereby establishes the CNA Surety Corporation
Deferred Compensation Plan, effective April 1, 2000. The Company intends to
establish and maintain the Plan as an unfunded, nonqualified deferred
compensation plan for a select group of management or highly compensated
employees, and intends that the Plan constitute a "top-hat" plan within the
meaning of Section 201(2) of ERISA.

     The purpose of the Plan is to permit designated employees of the Company
and participating affiliates to accumulate additional retirement income through
a nonqualified deferred compensation plan that enables them to defer
compensation to which they will become entitled in the future.

                                    ARTICLE I

                                   Definitions

     1.1 "Account" means an account established on the books of the Employer for
the purpose of recording amounts credited on behalf of a Participant under the
Plan.

     1.2 "Administrator" means Western Surety Company or such other person,
entity or committee appointed by the Company's president to administer the Plan.

     1.3 "Beneficiary" means the person or persons designated by a Participant
or otherwise entitled to receive any undistributed amount credited to the
Participant's Account upon the death of the Participant.

     1.4 "Code" means the Internal Revenue Code of 1986, as amended.

     1.5 "Company" means CNA Surety Corporation, a corporation duly organized
under the laws of the State of Delaware.

     1.6 "Compensation" means "Compensation" as that term is defined in the CNA
Surety Corporation 401(k) Plan, as amended from time to time, provided however,
that for purposes of this Plan, "Compensation" shall include a Participant's
salary reduction contributions under the CNA Surety Corporation 401(k) Plan, a
Participant's salary reduction deferrals under this Plan, and shall not be
limited by Code section 401(a)(17).

     1.7 "Deferral Agreement" means the written agreement between a Participant
and the Employer whereby the Participant elects to defer a portion of the
Participant's Compensation pursuant to the terms of the Plan.

     1.8 "Disability" means "Disability" as that term is defined in the CNA
Surety Corporation 401(k) Plan, as amended from time to time.


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     1.9 "Effective Date" means April 1, 2000.

     1.10 "Elective Contribution" means the amount credited to a Participant's
Account pursuant to a Deferral Agreement.

     1.11 "Eligible Employee" means any employee employed on or after the
Effective Date by the Employer and designated by the Employer's board of
directors as eligible for participation in the Plan. An employee's designation
as an "Eligible Employee" may be revoked by the Employer's board of directors at
any time.

     1.12 "Employer" means the Company and any Related Company that adopts the
Plan with the Company's consent as provided in Section 7.1.

     1.13 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

     1.14 "Hour of Service" means "Hour of Service" as that term is defined in
the CNA Surety Corporation 401(k) Plan, as amended from time to time.

     1.15 "Investment Funds" means the investment funds designated by the
Company which, when selected by a Participant, shall be used to measure the
investment experience credited to the Participant's Account.

     1.16 "Matching Contribution" means the amount credited to a Participant's
Account by the Employer pursuant to Section 4.2 of the Plan.

     1.17 "Participant" means an Eligible Employee who satisfies the
requirements of Section 2.1 of the Plan.

     1.18 "Plan" means the CNA Surety Corporation Deferred Compensation Plan, as
amended from time to time.

     1.19 "Plan Year" means the calendar year.

     1.20 "Profit Sharing Contribution" means the amount credited to a
Participant's Account by the Employer pursuant to Section 4.4 of the Plan.

     1.21 "Related Company" means any corporation or business organization which
is a member of a controlled group of corporations which includes the Company (as
determined under Code Section 414(b)); a corporation or business organization
which is under common control with the Company (as determined under Code Section
414(c)); any corporation or business organization which is a member of an
affiliated service group that includes the Company (as determined under Code
Section 414(m); and any other entity required to be aggregated with the Company
under Treasury regulations to be issued under Code Section 414(o).

     1.22 "Termination of Employment" means a Participant's separation from
service of the Employer by reason of resignation, retirement, discharge or
death.



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                                   ARTICLE II

                                  Participation

     2.1 Commencement of Participation.

          (a) Each employee who (i) is an Eligible Employee on the Effective
Date and (ii) has completed and executed a Deferral Agreement prior to the
Effective Date shall become a Participant on the Effective Date.

          (b) Each employee of the Employer who is not an Eligible Employee (i)
on the Effective Date, or (ii) at the time his employment with the Employer
commences, but who subsequently becomes an Eligible Employee, shall become a
Participant on the January 1 coincident with or next following the date on which
such employee becomes an Eligible Employee; provided such Eligible Employee
shall have completed and executed a Deferral Agreement.

          (c) Each employee of the Employer who (i) first commences employment
on a date subsequent to the Effective Date and (ii) is designated an Eligible
Employee as of such employment commencement date shall become a Participant as
soon as reasonably practicable following the date on which such Eligible
Employee submits a Deferral Agreement to the Administrator; provided however,
that such Eligible Employee submits a Deferral Agreement to the Administrator
within thirty (30) days of his employment commencement date.

          (d) An Eligible Employee who fails or declines to submit a Deferral
Agreement may subsequently become a Participant on the January 1 coincident with
or next following the date on which such Eligible Employee submits a Deferral
Agreement to the Administrator. An Eligible Employee's failure to submit a
Deferral Agreement prior to his first entry date shall not preclude such
Eligible Employee's future participation in the Plan.

     2.2 Resumption of Participation Following Reemployment. If a Participant
ceases to be an Eligible Employee by reason of a Termination of Employment and
thereafter returns to the employ of the Employer and is again designated as an
Eligible Employee, such individual shall be treated as a newly-hired Eligible
Employee and may again become a Participant upon satisfying the requirements of
Section 2.1.

     2.3 Cessation or Resumption of Participation Following a Change in Status.
If a Participant

          (a) continues in the employ of the Employer but ceases to be an
Eligible Employee, or

          (b) continues in the employ of the Employer as an Eligible Employee
but elects to discontinue Elective Contributions,



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such individual shall continue to be a Participant in the Plan until the entire
balance of the Participant's Account has been distributed; provided, the
individual shall not be entitled to make Election Contributions or receive an
allocation of Matching Contributions during the period that such individual is
not actively participating in the Plan.

                                   ARTICLE III

                              Participant Accounts

     3.1 Establishment of Accounts. The Employer shall maintain an Account for
each Participant employed by such Employer for the purpose of recording the
current value of Elective Contributions, Matching Contributions, Profit Sharing
Contributions, and any investment experience credited thereto. All Accounts
shall be maintained in United States currency on the books of the Employer as an
Employer liability; provided, the Employer shall be under no obligation to
segregate any assets to provide for such liabilities. The Company's obligation
under this Plan shall be an unfunded and unsecured promise to pay. Nothing
contained in this Plan shall be deemed to create a trust of any kind for the
benefit of the Participants or create any fiduciary relationship between the
Company and the Participants or their Beneficiaries. To the extent that any
person acquires a right to receive benefits under this Plan, such rights shall
be no greater than the right of any unsecured general creditor of the Company.

     3.2 Valuation of Accounts. The value of each Participant's Account shall
equal the sum of (a) the Elective Contributions credited to the Participant's
Account, (b) the Matching Contributions credited to the Participant's Account,
(c) the Profit Sharing Contributions credited to the Participant's Account, and
(d) the investment experience credited to the Participant's Account. The value
of a Participant's Account shall be further reduced by any distributions from
the Account. The Administrator shall furnish Participants with a statement of
their Accounts at least once per Plan Year.

                                   ARTICLE IV

                                  Contributions

     4.1 Elective Contributions. The Employer shall reduce the Compensation of
each Participant by the Elective Contribution specified in the Participant's
Deferral Agreement and credit such Elective Contribution to the Participant's
Account. Once executed, the Deferral Agreement shall be effective to defer
Compensation relating to all services performed by the Participant for the Plan
Year for which it is executed, and shall remain in effect until a subsequent
Deferral Agreement is executed; provided, however, that in the case of (a) the
initial Plan Year, if the effective date is later than January 1 of such Plan
Year, or (b) an employee who first commences employment as an Eligible Employee
after the Effective Date, the initial Deferral Agreement shall have prospective
application only; provided further, no Participant shall have his or her
Compensation reduced pursuant to a Deferral Agreement, or have any amount
credited to his or her Account as Elective Contributions or Matching
Contributions until such Participant has made the maximum Elective Salary
Deferral Contributions to the CNA Surety Corporation 401(k) Plan allowable for
such year, taking into consideration the application of the compensation limit
of Code section 401(a)(17), the annual pre-tax contribution limit under Code
section 402(g) and the annual amount limit under Code section 415. A
Participant's subsequent Deferral




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Agreement shall be effective as of the first day of the Plan Year next following
its date of execution. A Deferral Agreement shall be deemed to have been revoked
if the Participant who executed it ceases to be eligible to participate in the
Plan. Participants shall be fully vested in their Elective Contributions at all
times but early distributions are subject to a ten percent (10%) withdrawal
penalty, as provided in Section 5.5. No Elective Contribution shall be less than
1% of a Participant's Compensation. No Elective Contribution shall be more than
16% of a Participant's Compensation, and the amount of any Compensation that a
Participant shall be entitled to defer pursuant to the foregoing shall be
reduced by the amount of any Elective Salary Deferral Contributions credited to
the Participant's account under the CNA Surety Corporation 401(k) Plan for such
Plan Year.

     4.2 Matching Contributions. For each Plan Year, each Employer shall credit
a Matching Contribution to the Account of each Participant who has a Deferral
Agreement in effect. The amount of the Matching Contribution shall equal the sum
of (a) one hundred percent (100%) of the Participant's Elective Contributions
for such Plan Year that do not exceed three percent (3%) of the Participant's
Compensation; and (b) if the Participant's Elective Contributions exceed three
(3%) percent of such Participant's Compensation, 50% of the amount of the
Participant's Elective Contributions that exceed three percent of the
Participant's Elective Contribution, which do not exceed six percent (6%) of the
Participant's Compensation. However, the amount of any Matching Contribution to
which a Participant shall be entitled pursuant to the foregoing shall be reduced
by the amount of any Matching Contributions credited to the Participant's
account under the CNA Surety Corporation 401(k) Plan for such Plan Year.

     4.3 Vesting of Matching Contributions. Subject to the provisions of Section
4.9 hereof, Participants shall be fully vested in the Matching Contributions
credited to their Accounts but early distributions are subject to a ten percent
(10%) withdrawal penalty, as provided in Section 5.5.

     4.4 Profit Sharing Contributions. (a) For each Plan Year, a Participant's
Employer shall credit to the Account of such Participant a Profit Sharing
Contribution equal to the product of (a) the amount of the Participant's
Compensation for such Plan Year, multiplied by (b) the "Profit Sharing
Percentage" for such Plan Year; provided however, that the amount of any Profit
Sharing Contribution to which a Participant shall be entitled pursuant to the
foregoing shall be reduced by the amount of any Profit Sharing Contributions
credited to the Participant's account under the CNA Surety Corporation 401(k)
Plan for such Plan Year. "Profit Sharing Percentage" means the profit sharing
percentage (expressed as a percentage of compensation) established by the
Company's Board of Directors for the CNA Surety Corporation 401(k) Plan for such
Plan Year.

          (b) If the initial Plan Year is less than 12 months, this Section
4.4(b) shall apply. A Participant's Profit Sharing Contribution for an initial
Plan Year of less than twelve months shall be determined as provided under
Section 4.4(a) except that the Participant's Profit Sharing Percentage shall be
multiplied by the amount of the Participant's Compensation paid during the
entire calendar year that includes such Plan Year.





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     4.5 Vesting of Profit Sharing Contributions. Subject to the provisions of
Section 4.9 hereof, Participants shall be fully vested in the Profit Sharing
Contributions credited to their Accounts but early distributions are subject to
a ten percent (10%) withdrawal penalty, as provided in Section 5.5.

     4.6 Timing of Crediting. All Elective Contributions under the Plan shall be
credited to the Accounts of Participants as soon as reasonably practicable
following the payday to which such contributions relate; provided, the Employer
shall credit such contributions no later than the 15th business day of the month
following the month in which occurred the payday to which such contributions
relate. All Matching Contributions under the Plan shall be credited to the
Accounts of Participants no later than the 15th day of the third month following
the close of the Plan Year to which they relate. All Profit Sharing
Contributions under the Plan shall be credited to the Accounts of Participants
no later than the due date, including extensions, for filing the Employer's
federal income tax return for the fiscal year of the Employer to which the
Profit Sharing Contributions relate.

     4.7 Crediting of Investment Experience. A Participant may select one or
more Investment Funds by which the investment experience credited to the
Participant's Account shall be measured. A Participant may periodically
reallocate the investment of his Account among the Investment Funds. Until a
Participant's Account is completely distributed, each Participant's Account
shall be adjusted periodically, as specified by the Administrator but no less
than annually, to reflect (a) the investment experience of the Investment Fund
or Funds which the Participant has selected, and (b) any reallocation of the
Participant's Account among the Investment Funds during the period. Nothing in
this Section 4.7 shall require the Participant's Employer to actually invest
money in the Investment Funds designated by a Participant. The Administrator
shall establish such rules and procedures governing the manner, frequency and
timing of Investment Fund selections by Participants, and such rules and
procedures may change in the Administrator's sole discretion prospectively
without consent of the Participants.

     4.8 Nonalienability. The benefits provided under the Plan shall not be
subject to alienation, assignment, garnishment, attachment, execution or levy of
any kind, either voluntary or involuntary, and any attempt to cause such
benefits to be subjected shall not be recognized, except to the extent as may be
required by applicable law.

     4.9 Forfeiture on Account of Misconduct. Notwithstanding any other
provision of the Plan, the Administrator, at the direction of the board of
directors of the Company, shall direct that the portion of a Participant's
Account consisting of Matching Contributions and Profit Sharing Contributions be
forfeited to the extent of any direct financial loss to a Employer that the
board of directors of the Company determines has been caused by the
Participant's embezzlement, theft, conviction of any felony crime or other gross
misconduct.





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                                    ARTICLE V

                                  Distributions

     5.1 Manner of Distribution. The vested amount credited to a Participant's
Account shall be distributed to him (or, in the event of his death before
distribution, to his Beneficiary) in (a) a single sum, (b) in a series of five
(5) equal annual installments, or (c) in a combination of (i) a single sum
payment, and (ii) five (5) equal annual installments, as elected by the
Participant in his Deferral Agreement. A Participant may change his or her
distribution election in accordance with rules and procedures established by the
Administrator in its sole discretion; provided, however, that to be effective,
any change in a distribution election must be made at least six (6) months prior
to the Participant's Distribution Date described in Section 5.2 hereof. If the
Participant fails to make any distribution election, the vested amount credited
to the Participant's Account shall be distributed in the form of a single sum
payment.

     5.2 Distribution Date. The distribution of the Participant's Account shall
commence as soon as reasonably practicable following the earliest of (a) the
date of the Participant's Termination of Employment, and (b) the date on which
the Participant is determined to have suffered a Disability.

     5.3 Facility of Payment. If at any time any distributee is, in the sole
judgment and discretion of the Administrator, legally, physically, or mentally
incapable of receiving any distribution due to such distributee, the
distribution may be made to the guardian or legal representative of the
distributee, or, if none exists, to any other person or institution that, in the
Administrator's sole judgment and discretion, will apply the distribution in the
best interests of the intended distributee. Any payment made in accordance with
the provisions of this Section shall be a complete discharge of any liability
for the making of such payment under the provisions of the Plan.

     5.4 Designation or Change of Beneficiary. As part of completing a Deferral
Agreement, each Eligible Employee shall designate one or more Beneficiaries and
successor Beneficiaries by completing a Beneficiary designation form. A
Participant may change any Beneficiary designation in accordance with such rules
and procedures established by the Administrator in its sole discretion. The
consent of the Participant's current Beneficiary shall not be required for a
change of Beneficiary, and no Beneficiary shall have any rights under this Plan
except as provided by its terms. The rights of a Beneficiary who predeceases the
Participant shall immediately terminate upon the Beneficiary's death, unless the
Participant specified otherwise. Unless a different Beneficiary has been
designated in accordance with this Section 5.4, the Beneficiary of any
Participant who is lawfully married on the date of the Participant's death shall
be the Participant's surviving spouse. The Beneficiary of any other Participant
who dies without having designated a Beneficiary shall be the Participant's
estate.

     5.5 Early Distribution. At any time prior to the Distribution Date set
forth in Section 5.2 hereof, a Participant may elect to receive all or a portion
of such Participant's current Account balance in the form of a lump sum cash
payment. However, a Participant shall irrevocably forfeit to the Company ten
percent (10%) of each distribution made pursuant to this Section 5.5. An early
distribution of a Participant's Account shall be made as soon as reasonably
practicable following the Administrator's receipt of the Participant's written
request.




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     5.6 Unforeseeable Emergency. Notwithstanding any other provision of this
Plan to the contrary, a Participant may receive a distribution of a portion of
his or her Account in the event of an approved hardship due to an Unforeseeable
Emergency. "Unforeseeable Emergency" means a severe financial hardship to the
Participant resulting from (i) a sudden and unexpected illness or accident of
the Participant or of a dependent of the Participant (as defined in Code Section
152(a)), (ii) a loss of the Participant's property due to casualty, or (iii)
such other similar extraordinary and unforeseeable circumstances arising as a
result of events beyond the control of the Participant. The circumstances that
constitute an "Unforeseeable Emergency" shall be determined by the Administrator
on a case by case basis; provided, payment shall not be made in the event that
such hardship is or may be relieved:

     (1) Through reimbursement or compensation by insurance or otherwise;

     (2) by liquidation of the Participant's assets, to the extent that
liquidation of such assets would not itself cause severe financial hardship; or

     (3) by cessation of Elective Contributions under the Plan.

The need to send a Participant's child to college or the desire to purchase a
home shall not constitute an Unforeseeable Emergency. A Participant may request
a distribution due to Unforeseeable Emergency by submitting a written request to
the Administrator accompanied by evidence to demonstrate that the circumstances
being experienced qualify as an Unforeseeable Emergency. The Administrator shall
have the authority to require such evidence as it deems necessary to determine
if a distribution is warranted. If an application for a hardship distribution
due to an Unforeseeable Emergency is approved, the distribution shall be limited
to an amount sufficient to meet the severe financial hardship. The allowed
distribution shall not be subject to the ten percent (10%) withdrawal penalty
for early distributions, and shall be payable in a method determined by the
Administrator in its sole discretion as soon as reasonably practicable following
approval of such distribution.

     5.7 Taxes. The Plan Administrator shall make provision for the reporting
and withholding of any federal, state or local taxes that may be required to be
withheld with respect to the payment of benefits pursuant to the terms of the
Plan and shall pay amounts withheld to the appropriate taxing authorities or
determine that such amounts have been reported, withheld and paid by the
Employer.

                                   ARTICLE VI

                      Amendment and Termination of the Plan

     6.1 Company's Right to Amend or Terminate Plan. The Company may in its sole
discretion, at any time and from time to time, amend in whole or in part, any of
the provisions of this Plan or may terminate it as a whole with respect to any
Participant or group of Participants. Any such amendment shall be binding upon
all Participants and their Beneficiaries and all other parties in interest.

     6.2 Form of Amendment. Any amendment or termination of the Plan shall be
effectuated by a written resolution of the board of directors of the Company,
and shall become effective as of the date specified therein.




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     6.3 Restriction on Retroactive Amendments. No amendment may be made that
retroactively deprives a Participant of any amount credited to his Account
before the date of the amendment.

     6.4 Distribution upon Termination. Upon termination of the Plan, no further
Elective Contributions or Matching Contributions shall be made under the Plan.
Accounts of Participants shall continue to be governed by the terms of the Plan
as in effect on the date of termination, until distributed in accordance with
the terms of the Plan. Notwithstanding the foregoing, the Company in its sole
discretion may provide for the immediate distribution of all Accounts in the
form of a single lump sum payment.

                                   ARTICLE VII

                      Adoption of Plan by Related Companies

     7.1 Adoption of the Plan. A Related Company may, with the approval of the
board of directors of the Company, and by written resolution of its own board of
directors, adopt the Plan. From and after the date as of which such Related
Company shall adopt the Plan, it shall be included within the meaning of the
term "Employer" for all purposes hereunder.

     7.2 Withdrawal of a Participating Employer. A participating Employer may,
by resolution of its board of directors, withdraw from the Plan as of any date
upon ninety (90) days advance written notice to the Administrator. If an
Employer shall cease to exist, it shall automatically be withdrawn from
participation in the Plan unless a successor organization adopts the Plan in
accordance with Section 7.1. Upon the withdrawal of a participating Employer,
such Employer shall distribute each applicable Participant's vested Account as
though his employment terminated on the date of withdrawal in accordance with
Article V of the Plan.

                                  ARTICLE VIII

                               Plan Administration

     8.1 Generally. The Plan shall be administered by the Administrator. If the
president of the Company establishes an administrative committee to serve as the
Administrator, the president may terminate the administrative committee, reduce
its membership or may remove any member of the administrative committee at any
time in his sole discretion, with or without cause, and may fill any vacancy.
Any person appointed by the president to serve as a member of an administrative
committee may resign by delivering a written resignation to the president of the
Company. Any such resignation shall become effective upon its receipt by the
president or on such other date as is agreed by the president and the resigning
person. If the president of the Company appoints an administrative committee,
the administrative committee shall act by a majority of its members in office
and may take action either by vote at a meeting or by consent in writing without
a meeting. The Administrator may adopt such rules and regulations as it deems
desirable for the conduct of its affairs and the administration of the Plan.

     8.2 Powers of the Administrator. In carrying out its duties with respect to
the general administration of the Plan, the Administrator shall have, in
addition to any other powers conferred by the Plan or by applicable law, the
following powers:




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          (a) to maintain the Plan's Accounts and all records necessary for the
administration of the Plan;

          (b) to interpret and construe the provisions of the Plan and to make
and publish such rules and regulations for the administration of the Plan as are
not inconsistent with the terms thereof;

          (c) to establish and modify the method of accounting for the Plan;

          (d) to employ legal counsel, accountants and other consultants to aid
in exercising its powers and carrying out its duties hereunder; and

          (e) to perform any other acts which are necessary for the proper and
efficient administration of the Plan.

     8.3 Indemnification of Administrator. The Employer shall indemnify and hold
harmless the Administrator against any and all expenses and liabilities arising
out of the Administrator's action or failure to act in its capacity as
Administrator, excepting only expenses and liabilities arising out of the
Administrator's own willful misconduct or gross negligence. The right of
indemnification shall be in addition to any other legal rights to which the
Administrator may be entitled. The liabilities and expenses against which the
Administrator shall be indemnified hereunder by the Employer shall include,
without limitation, the amount of any settlement or judgment costs, legal
counsel fees and related charges reasonably incurred in connection with a claim
asserted or a proceeding brought against the Administrator or settlement
thereof.

     8.4 Right to Settle Claims. The Employer may, at its own expense and in its
sole discretion, settle any claim asserted or proceeding brought against the
Administrator.

     8.5 Claims Procedure. If a dispute arises between the Administrator and a
Participant or Beneficiary over the amount of benefits payable under the Plan,
such claims for benefits shall be subject to the claims procedures set forth in
the CNA Surety Corporation 401(k) Plan, as amended from time to time.

     8.6 Expenses of the Administrator. All reasonable expenses of the
Administrator incurred in connection with the administration of the Plan shall
be paid by the Employer.











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                                   ARTICLE IX

                                  Miscellaneous

     9.1 No Employment Guarantee. Neither the establishment of the Plan, any
modification thereof, the creation of any fund or account, nor the payment of
any benefits under the Plan shall be construed as giving to any Participant or
other person any legal or equitable right against the Employer or the
Administrator except as provided herein. Under no circumstances shall the
maintenance of this Plan constitute a contract of employment or shall the terms
of employment of any Participant be modified in any way affected hereby.
Accordingly, participation in the Plan shall not give any Participant a right to
be retained in the employ of the Employer or derogates from the right of the
Employer to discharge any Participant at any time without regard to the effect
of such discharge upon his rights as a Participant in the Plan.

     9.2 No Rights Under Plan Except as Set Forth Herein. Nothing in this Plan,
express or implied, is intended, or shall be construed, to confer upon or give
any person, firm, association, or corporation, other than the parties hereto and
their successors in interest, any right, remedy, or claim under or by reason of
this Plan or any covenant, condition, or stipulation hereof, and all covenants,
conditions and stipulations in this Plan, by or on behalf of any party, are for
the sole and exclusive benefit of the parties hereto.

     9.3 Governing Law. This Plan shall be interpreted and construed in
accordance with ERISA, and to the extent not preempted thereby, the laws of the
State of Illinois.

     9.4 Headings. The headings used in the Plan are for convenience only, shall
not constitute a part of the Plan, and shall not be deemed to limit,
characterize, or affect in any way any provisions of the Plan. All provisions of
the Plan shall be construed as if no captions had been used in the Plan.

     9.5 Construction. Whenever used herein, the masculine pronoun shall be
deemed to include the feminine, and the singular to include the plural, unless
the context clearly indicated otherwise.

     9.6 Severability. If any provision of this Plan is held illegal or invalid
for any reason, the remaining provisions shall remain in full force and effect
and shall be construed and enforced in accordance with the purposes of the Plan
as if the illegal or invalid provision did not exist.

         IN WITNESS WHEREOF, the Company has caused this document to be executed
by its ________________, this ____ day of __________________________, 2000.

                                    CNA SURETY CORPORATION

                                    By: ____________________________

                                    Its:  ____________________________





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