Document:

<PAGE>

                                 EXHIBIT 10 (27)

                           CNA SURETY CORPORATION 2005

                           DEFERRED COMPENSATION PLAN

<PAGE>

                           CNA SURETY CORPORATION 2005
                           DEFERRED COMPENSATION PLAN

                                   ARTICLE I.
                                  INTRODUCTION

     1.1. The Plan. CNA Surety Corporation hereby establishes the CNA Surety
Corporation 2005 Deferred Compensation Plan (the "Plan"), effective January 1,
2005 to replace the CNA Surety Corporation Deferred Compensation Plan
established effective April 1, 2000 (the "Prior Plan") and to apply with respect
to amounts deferred after December 31, 2004. The Prior Plan was amended in
response to the enactment of Section 409A of the Internal Revenue Code of 1986,
as amended (the "Code") to suspend deferrals into that plan for years after
2004, including Performance Contributions for 2004, which will be deferred under
this Plan and not under the Prior Plan. The Performance Contributions for 2004
are subject to the requirements of Code Section 409A because the Company had not
incurred any legally binding obligation prior to January 1, 2005 to credit such
contributions to Participants' Accounts.

     1.2. Purposes. 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. 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.

     1.3. Compliance with Section 409A. The Company intends for the Plan to
comply with the requirements of Section 409A of the Code and regulations,
rulings and other guidance issued thereunder (collectively, "Section 409A"), and
shall be interpreted and administered accordingly. Notwithstanding any other
provision of this Plan, no acceleration of payment of Accounts that is not
permitted by Section 409A shall be permitted, and no action, amendment or
termination of the Plan shall be effective to the extent that it would cause the
Plan to violate requirements of Section 409A.

                                   ARTICLE II.
                                   DEFINITIONS

     2.1. "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.

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

     2.3. "Aggregate Deferrals" for a Plan Year means the sum of a Participant's
Elective Contributions under this Plan and the Participant's elective salary
deferral contributions under the 401(k) Plan for such Plan Year.

<PAGE>

     2.4. "Basic Contribution" means the amount credited to a Participant's
Account by the Employer pursuant to Section 5.4 of the Plan.

     2.5. "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.

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

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

     2.8. "Compensation" means (a) for purposes of Elective Contributions and
Matching Contributions, "Compensation" as that term is defined in the 401(k)
Plan for purposes of elective salary deferral contributions and employer
matching contributions, and (b) for purposes of Basic Contributions and
Performance Contributions "Compensation" as that term is defined in the 401(k)
Plan for purposes of determining the amount of employer basic contributions and
employer performance contributions; provided however, Compensation for purposes
of this Plan shall not be limited by Code Section 401(a)(17) and shall include a
Participant's Elective Contributions under this Plan.

     2.9. "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.

     2.10. "Effective Date" means January 1, 2005; provided, however, that
solely for purposes of Performance Contributions credited to Participants'
Accounts pursuant to Section 5.3, the Effective Date shall be January 1, 2004.

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

     2.12. "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
effective as of the first day of the next following Plan Year.

     2.13. "Employer" means the Company and any Related Company that adopts the
Plan with the Company's consent as provided in Section 8.1.

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

     2.15. "401(k) Plan" means the CNA Surety Corporation 401(k) Plan, as
amended from time to time.

     2.16. "Hour of Service" means "Hour of Service" as that term is defined in
the 401(k) Plan.

                                      -2-
<PAGE>

     2.17. "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.

     2.18. "Matching Contribution" means the amount credited to a Participant's
Account by the Employer pursuant to Section 5.2 of the Plan.

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

     2.20. "Performance Contribution" means the amount credited to a
Participant's Account by the Employer pursuant to Section 5.3 of the Plan.

     2.21. "Plan" means the CNA Surety Corporation 2005 Deferred Compensation
Plan, as amended from time to time.

     2.22. "Plan Year" means the calendar year.

     2.23. "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).

     2.24. "Termination of Employment" means a Participant's separation from
service of the Employer by reason of resignation, retirement, disability,
discharge or death. The transfer of a Participant from employment by an Employer
or a Related Company to employment by another Employer or Related Company shall
not constitute a Termination of Employment.

                                  ARTICLE III.
                                  PARTICIPATION

     3.1. Commencement of Participation.

          (a) Each employee who is an Eligible Employee becomes a Participant on
     the later of the Effective Date or the date such employee becomes an
     Eligible Employee.

          (b) Solely for purposes of Performance Contributions credited pursuant
     to Section 5.3, an employee who was a participant under the Prior Plan as
     of January 1, 2004 will become a Participant effective January 1, 2004.

     3.2. 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 become a Participant on the January 1
next following the date on which such employee becomes an Eligible Employee;
provided such Eligible Employee shall have returned a Deferral Agreement to the
Administrator prior to such January 1.

                                      -3-
<PAGE>

     3.3. Cessation or Resumption of Participation Following a Change in Status.

          (a) If a Participant continues in the employ of the Employer but
ceases to be an Eligible Employee, such individual shall not be entitled to make
Elective Contributions or receive an allocation of Matching Contributions, Basic
Contributions or Performance Contributions with respect to Compensation for the
period of time during which the individual is not an Eligible Employee.

          (b) If a Participant continues in the employ of the Employer as an
Eligible Employee but elects to discontinue Elective Contributions for any
period beginning on the January 1 next following such election, the individual
shall not be entitled to make Elective Contributions or receive an allocation of
Matching Contributions with respect to Compensation for the Plan Year beginning
on such January 1, but the individual shall be entitled to receive Basic
Contributions and Performance Contributions during such Plan Year in accordance
with the terms of the Plan.

          (c) Subject to the foregoing provisions of this Section 3.3, an
individual shall continue to be a Participant in the Plan until the entire
vested balance of the Participant's Account has been distributed.

                                   ARTICLE IV.
                              PARTICIPANT ACCOUNTS

     4.1. 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, Basic
Contributions and Performance Contributions, and any investment experience
credited thereto. All Accounts shall be maintained in United States currency on
the books of the applicable Employer as an Employer liability; provided, the
Employer shall be under no obligation to segregate any assets to provide for
such liabilities. Each Employer'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 Employers 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 applicable Employer.

     4.2. 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 Performance Contributions credited to the Participant's Account, (d) the
Basic Contributions credited to the Participant's Account, and (e) 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.

                                      -4-
<PAGE>

                                   ARTICLE V.
                                  CONTRIBUTIONS

     5.1. Elective Contributions.

          (a) Elective Contributions shall be made pursuant to a Participant's
Deferral Agreement. Except as provided in (b) or (c) below, a Participant's
Deferral Agreement for any Plan Year must be executed before the first day of
the Plan Year. Once executed, a 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 for future Plan Years
until a subsequent Deferral Agreement is executed. A Participant's subsequent
Deferral Agreement shall be effective as of the first day of the Plan Year next
following the date it is returned to the Administrator.

          (b) If an employee of the Employer (i) first commences employment with
the Company or any Related Company after March 11, 2005 and (ii) is designated
an Eligible Employee as of such employment commencement date, such employee
shall be eligible to enter into a Deferral Agreement for the Plan Year in which
the employee becomes a Participant, provided however, that the Participant
returns a Deferral Agreement to the Administrator within thirty (30) days of his
or her employment commencement date and the Deferral Agreement will apply solely
to Compensation for services performed after the Deferral Agreement is returned
to the Administrator.

          (c) Notwithstanding the foregoing, each Participant who is an Eligible
Employee on March 11, 2005 shall be permitted to execute a Deferral Agreement at
any time on or before March 11, 2005; provided, however, that such Deferral
Agreement shall apply solely to Compensation for services performed after March
14, 2005.

          (d) 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.

          (e) 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. The amount of
Elective Contributions specified in a Participant's Deferral Agreement may not
be less than 1% of the Participant's Compensation nor more than 20% of the
Participant's Compensation (in whole percentages).

          (f) A Participant shall be fully vested in the Elective Contributions
and investment experience thereon credited to his or her Account at all times.

     5.2. Matching Contributions.

          (a) For each Plan Year, the Employers shall credit a Matching
Contribution to the Account of each Participant who has a Deferral Agreement in
effect for such Plan Year. The amount of the Matching Contribution shall equal:

                                      -5-
<PAGE>

               (i)  the sum of:

                    (1)  one hundred percent (100%) of the sum of the
                         Participant's Aggregate Deferrals for such Plan Year
                         that do not exceed three percent (3%) of the
                         Participant's Compensation for such Plan Year, plus

                    (2)  fifty percent (50%) of the amount of the Participant's
                         Aggregate Deferrals that exceeds three percent (3%) of
                         the Participant's Compensation for such Plan Year but
                         does not exceed six percent (6%) of the Participant's
                         Compensation for such Plan Year, minus

               (ii) the amount of matching contributions contributed to the
                    Participant's account under the 401(k) Plan for such Plan
                    Year.

          (b) Subject to the provisions of Section 5.8 hereof, a Participant
shall be fully vested in the Matching Contributions and investment experience
thereon credited to his or her Account .

     5.3. Performance Contributions.

          (a) For each Plan Year beginning on or after January 1, 2004, a
Participant's Employer shall credit to the Account of such Participant a
Performance Contribution equal to the product of (i) the amount of the
Participant's Compensation for such Plan Year, multiplied by (ii) the
Performance Contribution Percentage for such Plan Year; provided, however, that
the amount of any Performance Contribution to which a Participant shall be
entitled pursuant to the foregoing shall be reduced by the amount of any
employer performance contributions credited to the Participant's account under
the 401(k) Plan for such Plan Year; and provided further that the Participant
shall not be credited with a Performance Contribution for a Plan Year unless the
Participant satisfies the criteria for receiving an allocation of employer
performance contributions to his or her account under the 401(k) Plan for such
Plan Year. "Performance Contribution Percentage" means the performance
contribution percentage (expressed as a percentage of Compensation) established
by the Company's Board of Directors for the 401(k) Plan for such Plan Year.

          (b) Subject to the provisions of Section 5.8 hereof, a Participant
shall be fully vested in the Performance Contributions and investment experience
thereon credited to his or her Account .

     5.4. Basic Contributions.

          (a) For each Plan Year beginning on or after January 1, 2005 a
Participant's Employer shall credit to the Account of such Participant a Basic
Contribution equal to the product of (i) the amount of the Participant's
Compensation for such Plan Year, multiplied by (ii) three percent (3%);
provided, however, in determining the amount of a Participant's Basic
Contribution for a Plan Year five percent (5%) shall be substituted for three
percent (3%) with respect to Compensation payable on or after the date on which
the Participant attains the age of

                                      -6-
<PAGE>

45; and further provided that the amount of any Basic Contribution to which a
Participant shall be entitled pursuant to the foregoing shall be reduced by the
amount of any employer basic contributions credited to the Participant's account
under the 401(k) Plan for such Plan Year.

          (b) Subject to the provisions of Section 5.8 hereof, a Participant
shall be vested in the Basic Contributions and investment experience thereon
credited to his or her Account if and to the extent the Participant is vested in
his or her employer basic contribution account under the 401(k) Plan.

     5.5. 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 earlier of (i) the 15th day of the
third month following the close of the Plan Year to which they relate or (ii)
the date on which the Participant receives a distribution pursuant to Section
6.2. All Performance Contributions and Basic Contributions under the Plan for a
year shall be credited to the Accounts of Participants no later than the earlier
of (i) March 31 of the following year or (ii) the date on which the Participant
receives a distribution pursuant to Section 6.2; provided, however, that
Performance Contributions under the Plan for a year which are allocated to a
Participant on account of the Participant's death, disability, or termination of
employment after age 65 shall be credited to the Account of such Participant no
later than March 31 of the following year.

     5.6. 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 5.6 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.

     5.7. 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.

     5.8. 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 attributable to Matching Contributions, Performance Contributions and
Basic Contributions be forfeited to the extent of any direct financial loss to
an 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.

                                      -7-
<PAGE>

                                   ARTICLE VI.
                                  DISTRIBUTIONS

     6.1. 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 single sum.

     6.2. Distribution Date. The distribution of the Participant's Account shall
be made as soon as reasonably practicable following the date that is six months
after the Participant's "separation from service" within the meaning of Section
409A. In the event the Participant is entitled to a Performance Contribution for
a year which has not been allocated to the Participant's Account prior to the
distribution described in the preceding sentence, the balance of the Account
attributable to such Performance Contribution shall be distributed to the
Participant as soon as practicable after it has been credited to the
Participant's Account.

     6.3. 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.

     6.4. 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 6.4, 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.

     6.5. 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 (excluding the portion of the Account balance attributable to
Basic Contributions and investment experience thereon) 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, the Participant's spouse,
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 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

                                      -8-
<PAGE>

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 plus taxes reasonably anticipated as a result of
the distribution after taking into account the extent to which such hardship is
or may be relieved:

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

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

The allowed distribution shall be payable in a single sum as soon as reasonably
practicable following approval of such distribution.

     6.6. Taxes. The 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 VII.
                      AMENDMENT AND TERMINATION OF THE PLAN

     7.1. 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; provided that no such amendment or
termination shall result in any acceleration of the payment of any Account
except to the extent permitted by Section 409A. Any such amendment shall be
binding upon all Participants and their Beneficiaries and all other parties in
interest. The Company may amend, modify or terminate any Deferral Agreement made
hereunder to the extent necessary or advisable to comply with the requirements
of Section 409A.

     7.2. 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.

     7.3. 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 except to the extent required to comply with
Section 409A.

     7.4. Distribution upon Termination. Upon termination of the Plan, no
further Elective Contributions, Matching Contributions, Performance
Contributions or Basic 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
to the extent permitted by Section 409A (including, on account of a change of
control of one or more

                                      -9-
<PAGE>

Employers within the meaning of Section 409A), provide for the immediate
distribution of all Accounts in the form of a single lump sum payment.

                                  ARTICLE VIII.
                      ADOPTION OF PLAN BY RELATED COMPANIES

     8.1. 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.

     8.2. 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 8.1. Upon the withdrawal of a participating Employer,
such Employer shall distribute, to the extent permitted by Section 409A, each
applicable Participant's vested Account as though his employment terminated on
the date of withdrawal in accordance with Article VI of the Plan.

                                   ARTICLE IX.
                               PLAN ADMINISTRATION

     9.1. 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.

     9.2. 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:

          (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;

                                      -10-
<PAGE>

          (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.

     9.3. Indemnification of Administrator. Each 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 Employers 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.

     9.4. 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.

     9.5. 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 401(k) Plan, as amended from time to time.

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

                                   ARTICLE X.
                                  MISCELLANEOUS

     10.1. 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 or 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.

     10.2. 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.

                                      -11-
<PAGE>

     10.3. 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.

     10.4. 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.

     10.5. 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 indicates otherwise.

     10.6. 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         , 2005.

                               CNA SURETY CORPORATION

                               By:____________________________________________

                               Its:___________________________________________

                                      -12-<PAGE>

                                 EXHIBIT 10 (28)

                           CNA SURETY CORPORATION 2005
                        DEFERRED COMPENSATION PLAN TRUST

<PAGE>

                           CNA SURETY CORPORATION 2005
                        DEFERRED COMPENSATION PLAN TRUST

     THIS AGREEMENT, made this       day of         by and between CNA Surety
Corporation (the "Company") and First National Bank in Sioux Falls (the
"Trustee").

     WHEREAS, the Company has established the CNA Surety Corporation 2005
Deferred Compensation Plan, effective January 1, 2005 (the "Plan");

     WHEREAS, in addition to the Company, certain Related Companies (as defined
in the Plan) have adopted the Plan (the Company and the participating Related
Companies are collectively referred to hereunder as the "Employer");

     WHEREAS, the Company wishes to establish the CNA Surety Corporation 2005
Deferred Compensation Plan Trust (hereinafter the "Trust") and to contribute to
the Trust assets that shall be held therein, subject to the claims of creditors
in the event of Insolvency, as herein defined, until paid to Plan participants
and their beneficiaries in such manner and at such times as specified in the
Plan;

     WHEREAS, the parties intend that this Trust shall constitute an unfunded
arrangement and shall not affect the status of the Plan as an unfunded plan
maintained for the purpose of providing deferred compensation for a select group
of management or highly compensated employees for purposes of Title I of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"); and

     WHEREAS, the Employer intends to make contributions to the Trust to provide
itself with a source of funds to assist it in the meeting of its liabilities
under the Plan.

     NOW, THEREFORE, the parties do hereby establish the Trust and agree that
the Trust shall be comprised, held and disposed of as follows:

Section 1. ESTABLISHMENT OF TRUST

(a)  The Employer hereby deposits with the Trustee in trust $               ,
     which shall become the principal of the Trust to be held, administered and
     disposed of by the Trustee as provided in this Trust,

(b)  The Trust hereby established shall be irrevocable,

(c)  The Trust is intended to be a grantor trust, of which the Company is the
     grantor, within the meaning of subpart E, part I, subchapter J, chapter 1,
     subtitle A of the Internal Revenue Code of 1986, as amended (the "Code"),
     and shall be construed accordingly.

(d)  The principal of the Trust, and any earnings thereon shall be held separate
     and apart from other funds of the Employer and shall be used exclusively
     for the uses and purposes of Plan participants and general creditors as
     herein set forth. Plan participants and their beneficiaries shall have no
     preferred claim on, or any beneficial ownership interest in, any assets of
     the Trust. Any rights created under the Plan and this Trust shall be mere
     unsecured contractual rights of Plan participants and their beneficiaries
     against their

<PAGE>

     particular Employer. Any assets attributable to an Employer held by the
     Trust will be subject to the claims of the general creditors of such
     Employer under federal and state law in the event of Insolvency, as defined
     in Section 3(a) herein.

(e)  The Employer, in its sole discretion, may at any time, or from time to
     time, make additional deposits of cash or other property in trust with the
     Trustee to augment the principal to be held, administered and disposed of
     by the Trustee as provided in this Trust. Neither the Trustee nor any Plan
     participant or beneficiary shall have the right to compel such additional
     deposits,

Section 2. PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES.

(a)  The Employer shall deliver to the Trustee a schedule (the "Payment
     Schedule") that indicates the amounts payable with respect to each Plan
     participant employed by the applicable Employer (and his or her
     beneficiaries), that provides a formula or other instructions acceptable to
     the Trustee for determining the amounts so payable, the form in which such
     amount is to be paid (as provided for or available under the Plan), and the
     time of commencement for payment of such amounts. Except as otherwise
     provided herein, the Trustee shall make payments to the Plan participants
     and their beneficiaries in accordance with such Payment Schedule. The
     Trustee 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.

(b)  The entitlement of a Plan participant or his or her beneficiaries to
     benefits under the Plan shall be determined by the Employer or such party
     as it shall designate under the Plan, and any claim for such benefits shall
     be considered and reviewed under the procedures set out in the Plan.

(c)  The Employer may make payment of benefits directly to Plan participants or
     their beneficiaries as they become due under the terms of the Plan. The
     Employer shall notify the Trustee of its decision to make payment of
     benefits directly prior to the time amounts are payable to participants or
     their beneficiaries. In addition, if the principal of the Trust, and any
     earnings thereon, are not sufficient to make payments of benefits in
     accordance with the terms of the Plan, the Employer shall make the balance
     of each such payment as it falls due. The Trustee shall notify the Employer
     where principal and earnings are insufficient.

Section 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY WHEN
           EMPLOYER IS INSOLVENT.

(a)  If an Employer is Insolvent, the Trustee shall cease payment of benefits to
     the Plan participants and their beneficiaries attributable to such
     Employer. An Employer shall be considered "Insolvent" for purposes of this
     Trust if (i) the Employer is unable to pay its debts as they become due, or
     (ii) the Employer is subject to a pending proceeding as a debtor under the
     United States Bankruptcy Code.

                                       2

<PAGE>

(b)  At all times during the continuance of this Trust, as provided in Section
     1(d) hereof, the principal and income of the Trust attributable to each
     Employer shall be subject to claims of general creditors of such Employer
     under federal and state law as set forth below.

     (1)  The Board of Directors and the President of the Company shall have the
          duty to inform the Trustee in writing of the Insolvency of any
          Employer. If a person claiming to be a creditor of an Employer alleges
          in writing to the Trustee that such Employer has become Insolvent, the
          Trustee shall determine whether the Employer is Insolvent and, pending
          such determination, the Trustee shall discontinue payment of benefits
          to Plan' participants or their beneficiaries attributable to such
          Employer.

     (2)  Unless the Trustee has actual knowledge of an Insolvency, or has
          received notice from the Company or a person claiming to be a creditor
          alleging that an Employer is Insolvent, the Trustee shall have no duty
          to inquire whether any Employer is Insolvent. The Trustee may in all
          events rely on such evidence concerning the Employer's solvency as may
          be furnished to the Trustee and that provides the Trustee with a
          reasonable basis for making a determination concerning each Employer's
          solvency.

     (3)  If at any time the Trustee has determined that an Employer is
          Insolvent, the Trustee shall discontinue payments to Plan participants
          or their beneficiaries attributable to such Employer and shall hold
          the applicable assets of the Trust for the benefit of such Employer's
          general creditors. Nothing in this Trust shall in any way diminish any
          rights of Plan participants or their beneficiaries to pursue their
          rights as general creditors of an Insolvent Employer with respect to
          benefits due under the Plan or otherwise.

     (4)  The Trustee shall resume the payment of benefits to Plan participants
          or their beneficiaries in accordance with Section 2 of this Trust only
          after the Trustee has determined that an Employer is not Insolvent (or
          is no longer Insolvent).

(c)  Provided that there are sufficient assets, if the Trustee discontinues the
     payment of benefits from the Trust pursuant to Section 3(b) hereof and
     subsequently resumes such payments, the first payment following such
     discontinuance shall include the aggregate amount of all payments due to
     Plan participants or their beneficiaries under the terms of the Plan for
     the period of such discontinuance, less the aggregate amount of any
     payments made to Plan participants or their beneficiaries by the Employer
     in lieu of the payments provided for hereunder during any such period of
     discontinuance.

Section 4. NO PAYMENTS TO THE EMPLOYER.

Except as provided in Section 3 hereof, the Employer shall have no right or
power to direct the Trustee to return to the Employer ,or to divert to others
any of the Trust assets before all payment of benefits have been made to Plan
participants and their beneficiaries pursuant to the terms of the Plan.

                                       3
<PAGE>

Section 5. INVESTMENT AUTHORITY.

(a)  In no event may the Trustee invest in securities (including stock or rights
     to acquire stock) or obligations issued by the Employer, other than a de
     minimis amount held in common investment vehicles in which the Trustee
     invests. All rights associated with assets of the Trust shall be exercised
     by the Trustee or the person designated by the Trustee, and shall in no
     event be exercisable by or rest with Plan participants.

(b)  The Employer shall have the right, at anytime, and from time to time, in
     its sole discretion, to substitute assets of equal fair market value for
     any assets held by the Trust.

(c)  The Employer or the administrator of the Plan may, but shall not be
     required to, direct the Trustee in accordance with procedures mutually
     agreeable by the parties to invest the assets of the Trust to correspond to
     the investment preferences expressed by participants under the Plan. Any
     investment direction received from the Employer or the administrator of the
     Plan shall remain in effect until a new investment direction is received by
     the Trustee, Any investment direction received by the Trustee shall be
     implemented as soon as administratively practicable following the date the
     investment direction is received by the Trustee,

(d)  The Trustee shall have no responsibility for the selection of investment
     options under the Plan and shall not render investment advice to any
     person. Furthermore, the Trustee shall not be considered a fiduciary with
     investment discretion.

Section 6. DISPOSITION OF INCOME.

During the term of this Trust, all income received by the Trust, net of expenses
and taxes, shall be accumulated and reinvested.

Section 7. ACCOUNTING BY TRUSTEE.

The Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between the
Company and the Trustee. Within 90 days following the close of each calendar
year and within 90 days after the removal or resignation of the Trustee, the
Trustee shall deliver to the Company a written account of its administration of
the Trust during such year or during the period from the close of the last
preceding year to the date of such removal or resignation, setting forth all
investments, receipts, disbursements and other transactions effected by it,
including a description of all securities and investments purchased and sold
with the cost or net proceeds of such purchases or sales (accrued interest paid
or received being shown separately), and showing all cash, securities and other
property held in the Trust at the end of such year or as of the date of such
removal or resignation, as the case may be.

Section 8. RESPONSIBILITY OF TRUSTEE.

(a)  The Trustee shall act with the care, skill, prudence and diligence under
     the circumstances then prevailing that a prudent person acting in like
     capacity and familiar with such matters would use in the conduct of an
     enterprise of a like character and with like aims; provided, the Trustee
     shall incur no liability to any person for any action taken pursuant

                                       4
<PAGE>

     to a direction, request or approval given by the Company which is
     contemplated by, and in conformity with, the terms of the Plan or this
     Trust and is given by the Company in accordance with procedures mutually
     agreed upon by the parties. In the event of a dispute between the Employer
     and a party, the Trustee may apply to a court of competent jurisdiction to
     resolve the dispute.

(b)  If the Trustee undertakes or defends any litigation arising in connection
     with this Trust, the Company agrees to indemnify the Trustee against the
     Trustee's costs, expenses and liabilities (including, without limitation,
     attorney's fees and expenses) relating thereto and to be primarily liable
     for such payments. If the Company does not pay such costs, expenses and
     liabilities in a reasonably timely manner, the Trustee may obtain payment
     from the Trust.

(c)  The Trustee, with the consent of the Company, may consult with legal
     counsel (who may also be counsel for the Company generally) with respect to
     any of its duties or obligations hereunder.

(d)  The Trustee, in consultation with the Company, may hire agents,
     accountants, actuaries, investment advisors, financial consultants or other
     professionals to assist it in performing any of its duties or obligations
     hereunder.

(e)  The Trustee shall have, without exclusion, all powers conferred on trustees
     by applicable law, unless expressly provided otherwise herein; provided, if
     an insurance policy is held as an asset of the Trust, the Trustee shall
     have no power to name a beneficiary of the policy other than the Trust, to
     assign the policy (as distinct from conversion of the policy to a different
     form) other than to a successor Trustee, or to loan to any person the
     proceeds of any borrowing against such policy.

(f)  Notwithstanding any powers granted to the Trustee pursuant to this Trust or
     to applicable law, the Trustee shall not have any power that could give
     this Trust the objective of carrying on a business and dividing the gains
     therefrom, within the meaning of Section 301.7701-2 of the Procedure and
     Administrative Regulations promulgated pursuant to the Code.

Section 9. COMPENSATION AND EXPENSES OF TRUSTEE.

The Company shall pay the Trustee's fees and all administrative expenses
associated with this Trust. If not so paid, the fees and expenses shall be paid
from the Trust.

Section 10. RESIGNATION AND REMOVAL, OF TRUSTEE.

(a)  The Trustee may resign at any time by written notice to the Company, which
     shall be effective 30 days after receipt of such notice unless the Company
     and the Trustee agree otherwise.

(b)  The Trustee may be removed by the Company on 30 days written notice or upon
     shorter notice accepted by the Trustee.

                                       5
<PAGE>

(c)  Upon resignation or removal of the Trustee and appointment of a successor
     Trustee, all assets shall subsequently be transferred to the successor
     Trustee. The transfer shall be completed within 30 days after receipt of
     notice of resignation, removal or transfer, unless the Company extends the
     time limit.

(d)  If the Trustee resigns or is removed, a successor shall be appointed, in
     accordance with Section 11 hereof, by the effective date of resignation or
     removal under paragraphs (a) or (b) of this section. If no such appointment
     has been made, the Trustee may apply to a court of competent jurisdiction
     for appointment of a successor or for instructions. All expenses of the
     Trustee in connection with the proceeding shall be allowed as
     administrative expenses of the Trust.

Section 11. APPOINTMENT OF SUCCESSOR.

(a)  If the Trustee resigns (or is removed) in accordance with section 10(a) or
     (b) hereof, the Company may appoint any third party, such as a bank trust
     department or other party that may be granted corporate trustee powers
     under state law, as a successor to replace the Trustee upon resignation or
     removal. The appointment shall be effective upon acceptance in writing by
     the Trustee, who shall have all the rights and powers of the former the
     Trustee, including ownership rights in the Trust assets. The former Trustee
     shall execute any instrument necessary or reasonably requested by the
     Company or the successor Trustee to evidence the transfer.

(b)  The successor Trustee need not examine the records and acts of any prior
     Trustee and may retain or dispose of existing Trust assets, subject to
     sections 7 and 8 hereof. The successor Trustee shall not be responsible for
     and the Company shall indemnify and defend the successor Trustee from any
     claim or liability resulting from any action or inaction of any prior
     Trustee or from any other past event, or any condition existing at the time
     it becomes the successor Trustee.

Section 12. AMENDMENT OR TERMINATION.

(a)  This Trust may be amended by a written instrument executed by the Trustee
     and the Company. Notwithstanding the foregoing, no such amendment shall
     conflict with the terms of the Plan or shall make the Trust revocable after
     it has become irrevocable in accordance with Section 1(b) hereof.

(b)  The Trust shall not terminate until the date on which Plan participants and
     their beneficiaries are no longer entitled to benefits pursuant to the
     terms of the Plan. Upon termination of the Trust, any assets remaining in
     the Trust shall be returned to the Employer.

(c)  Upon written approval of participants or beneficiaries entitled to payment
     of benefits pursuant to the terms of the Plan, the Company may terminate
     this Trust prior to the time all benefit payments under the Plan have been
     made. All assets in the Trust at termination shall be returned to the
     Company.

                                       6

<PAGE>

Section 13. MISCELLANEOUS.

(a)  Any provision of this Trust prohibited by law shall be ineffective to the
     extent of any such prohibition, without invalidating the remaining
     provisions hereof.

(b)  Benefits payable to Plan participants and their beneficiaries under this
     Trust may not be anticipated, assigned (either at law or in equity),
     alienated, pledged, encumbered or subjected to attachment, garnishment,
     levy, execution or other legal or equitable process.

(c)  The Company may assess each participating Related Company a proportionate
     share of the fees and administrative expenses associated with this Trust,
     based on assets held by the Trust, including amounts paid to the Trustee in
     indemnification of the Trustee's costs. By making contributions to the
     Trust, a Related Company shall be deemed to have agreed to any such
     assessments.

(d)  This Trust shall be governed by and construed in accordance with the laws
     of Illinois.

Section 14. EFFECTIVE DATE,

The effective date of this Trust Agreement shall be January 1, 2005.

                                   * * * * * *

     IN WITNESS WHEREOF, the parties have caused this document to be executed
this            day of             2005.

                                CNA SURETY CORPORATION

                                By:__________________________________________

                                Its:_________________________________________

                                FIRST NATIONAL BANK IN SIOUX FALLS

                                By:__________________________________________

                                Its:_________________________________________

                                       7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}]]