SEPARATION AGREEMENT AND RELEASE

This AGREEMENT AND RELEASE (“Separation Agreement” or “Agreement”) is made
between Lorenzo Childress, Jr., M.D. (“Associate”) and AMERIGROUP Corporation,
its successors, affiliates and assigns (referred to herein, collectively and
individually, as “AMERIGROUP”).

A. REASONS FOR AGREEMENT

1. Inasmuch as, AMERIGROUP and Associate have mutually agreed to end Associate’s
relationship with AMERIGROUP effective as of the close of business on April 1,
2005 (the “End Date”).

2. In order to assist Associate in regard to this separation, as consideration
for the obligations from Associate specified below, and in consideration of the
Associate’s long and dedicated service, AMERIGROUP agrees to provide the
following benefits, which are referred to as the “Special Separation Package.”

B. AGREEMENT

For and in consideration of the mutual promises and commitments specified
herein, the parties agree as follows:

1. Special Separation Package
(a) On the date on which AMERIGROUP distributes bonuses to qualified Associates,
in accordance with AMERIGROUP policy, which shall be no later than March 15,
2005, AMERIGROUP will provide Associate with a 2004 MJO Cash Bonus in the amount
of $275,000.00.

(b) Associate acknowledges that, on February 9, 2005 (the “Date of Grant”), in
accordance with AMERIGROUP policy, AMERIGROUP granted Associate a non-qualified
option to purchase 60,000 shares of AMERIGROUP stock. Twenty-five (25%) percent
of said options vested on the Date of Grant, and an additional six and
one-quarter (6.25%) percent of said options shall vest on April 1, 2005.

(c) No sooner than (i) the eighth (8th) day after Associate executes this
Agreement, or (ii) the first payroll distribution day after the End Date,
whichever occurs later, and provided that Associate has not revoked this
Agreement as provided in Section B.5(a)(iv), below, and provided that Associate
has not breached this Agreement, AMERIGROUP will provide Associate with:

  i.   a Lump Sum Payment, in the amount of $251,800.00, which includes the
estimated COBRA costs for twelve months for health, dental, life and disability
insurance at Associate’s current coverage levels.

  ii.   a Special Paid Annual Leave payout, calculated at 235 hours, as
estimated through the first quarter of 2005, in the amount of $37,700.00

(d) No sooner than (i) the eighth (8th) day after Associate executes this
Agreement, or (ii) the first payroll distribution day after the End Date,
whichever occurs later, and provided that Associate has not revoked this
Agreement as provided in Section B.5(a)(iv), below, and provided that Associate
has not breached this Agreement, AMERIGROUP shall initiate payment to Associate
of an amount equal to Associate’s base salary, to wit, $333,759.00 (the “Base
Salary Amount”), payable on the regular biweekly payroll cycle over a one
(1) year period (the “Severance Period”). The Base Salary Amount shall continue
to be paid during the Severance Period, even if Associate obtains other
employment.

(e) The Company will reimburse Associate’s reasonable and customary business
expenses for previously scheduled continuing medical education incurred prior to
the End Date.

(f) All monies paid to Associate shall have all applicable taxes deducted.

(g) Associate and AMERIGROUP further agree that Associate may file for and
AMERIGROUP will respond to the application for unemployment compensation so as
not to contest the Associate’s request for benefits as approved by State
guidelines.

(h) The benefits provided to Associate hereunder are unique to Associate’s
contribution to the company. Nothing herein shall be deemed to establish a
separation agreement or other employee benefit plan or program available to
other AMERIGROUP employees. The Parties hereto agree that AMERIGROUP has no
formal severance package, is not obligated to provide any severance benefit, and
is only obligated to pay compensation that has already accrued.

(i) AMERIGROUP shall provide a neutral reference to Associate and to any persons
who inquire of AMERIGROUP for a reference on Associate. Such neutral reference
shall state only that Associate was employed at AMERIGROUP from July 6, 1995 to
April 1, 2005.

(j) Associate understands that Associate has no obligation to sign this
Separation Agreement. If Associate chooses not to sign this Separation
Agreement, AMERIGROUP will pay Associate the compensation that Associate has
earned through the date of Associate’s termination, the aforementioned 2004 MJO
Cash Bonus, and the aforementioned accrued and unpaid PAL less applicable
payroll taxes, in accordance with AMERIGROUP Policy. Similarly, even if
Associate does not sign this Separation Agreement, Associate will be offered
benefits to which Associate is entitled under the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”), and Associate shall retain all benefits
under AMERIGROUP’s Deferred Compensation Plan and AMERIGROUP’s 401(k) Plan,
including, if applicable, AMERIGROUP’s matches on behalf of Associate for the
year 2004 and the Indemnification Agreement, dated as of April 24, 2000, shall
remain in full force and effect. In the event that Associate has not signed and
returned this Separation Agreement to AMERIGROUP on or before March 14, 2005,
this Agreement shall be deemed withdrawn

(k) The circumstances of Associate’s separation from employment do not
constitute a “for cause” termination under Section 10 of the Employee
Noncompetition, Nondisclosure and Developments Agreement, Section 4 of the
Incentive Stock Option Agreement under the 1994 Stock Plan, Section 5 of the
Incentive Stock Option Agreement under the 2000 Equity Incentive Plan, or
Section 5 of the 2003 Equity Incentive Plan. Associate is hereby released from
the restrictions of Paragraph 1(a) of the said Employee Noncompetition,
Nondisclosure and Developments Agreement,

2. General Release
Associate states and affirms that Associate has not previously filed or joined
in any complaints, charges, or lawsuits against AMERIGROUP with any governmental
agency or court of law or equity. Associate agrees, for and on behalf of
Associate and Associate’s estate, heirs, spouse, life partner, representatives,
successors and assigns, that Associate has or will be finally and permanently
separated from employment with AMERIGROUP at the close of business on the End
Date, and that Associate waives, releases and forever discharges AMERIGROUP and
all related entities, their directors, officers, employees, attorneys and
agents, from any and all claims, known or unknown, that Associate has or may
have relating to or arising out of Associate’s employment with AMERIGROUP and
the separation thereof, including but not limited to any claims of wrongful
discharge, breach of express or implied contract, fraud, misrepresentation,
defamation, liability in tort, claims of any kind that may be brought in any
court or administrative agency, any claims under Title VII of the Civil Rights
Act of 1964, as amended, Age Discrimination in Employment Act, the Fair Labor
Standards Act, the Family Medical Leave Act, the Equal Pay Act, Worker’s
Compensation laws, Employee Retirement Income Security Act, Older Workers
Benefit Protection Act, or any other Executive Orders, federal, state or local
law relating to employment, employee benefits or the termination of employment,
or any other claim arising out of or relating to Associate’s employment,
excepting only the provisions of this Separation Agreement and the regular
separation benefits. Associate also represents that Associate has not given,
sold, assigned, or transferred to any one else, any claim, or a portion of a
claim discussed in this Separation Agreement.

3. Claims and Actions
(a) Associate promises never to file a lawsuit asserting any claims that are
released in this Separation Agreement.

(b) This Separation Agreement does not waive any rights or claims that Associate
may have which arise after the date the Associate signs this Separation
Agreement.

(c) If Associate breaks Associate’s promise in Paragraph B.3(a) of this
Separation Agreement and files a lawsuit based on legal claims or a portion of
legal claims that Associate has released, or if a lawsuit is initiated based on
legal claims or a portion of legal claims that Associate has given, sold,
assigned, or transferred to any one else, and if AMERIGROUP prevails in said
lawsuit, Associate will pay for all costs incurred by AMERIGROUP, any related
companies or the directors or employees of any of them, including reasonable
attorneys’ fees, in defending against Associate’s claim.

(d) Associate agrees that at all times relative hereto, Associate was an
employee at will.

4. Confidentiality and Cooperation
(a) Associate will not divulge or give to anyone any proprietary or confidential
information concerning AMERIGROUP’s business or affairs, employees and services
obtained by Associate during Associate’s employment.

(b) Associate agrees to return to AMERIGROUP on or before February 11, 2005, all
of AMERIGROUP’s property in Associate’s possession, control or custody
including, but not limited to, Associate’s security badge, Sonitrol card, files,
member lists, mailing lists, provider lists, account information, samples,
prototypes, price lists and pricing information, passwords, codes, and all of
the tangible and intangible property belonging to AMERIGROUP and relating to
Associate’s employment with AMERIGROUP. AMERIGROUP agrees to provide Associate
with secretarial service from February 11, 2005, through and including April 1,
2005. Associate further represents and warrants that Associate has not retained
any copies, electronic or otherwise, of such property.

(c) Notwithstanding anything to the contrary herein, Associate shall continue to
comply with the terms of the Employee Noncompetition, Nondisclosure and
Developments Agreement between Associate and AMERIGROUP, other than Paragraph
1(a) from which Associate has been released, and know and understand that the
obligations contained in that agreement survive execution of this Separation
Agreement and Associate’s termination of employment. In particular, Associate
shall not disclose any confidential or proprietary information which Associate
acquired as an employee of AMERIGROUP to any other person or entity, or use such
information in any manner that is detrimental to the interest of AMERIGROUP.

(d) Associate agrees to cooperate fully with AMERIGROUP in transitioning
Associate’s work load and work projects.

(e) Recognizing Associate’s knowledge and skills, AMERIGROUP requests Associate,
and Associate agrees, to cooperate fully with AMERIGROUP in its defense of or
other participation in any administrative, judicial or other proceeding arising
from any charge, complaint or other action that has been or may be filed. In the
event that AMERIGROUP shall request that Associate so cooperate after the
Severance Period, AMERIGROUP will pay Associate a fee in an amount to be agreed
upon by the parties.

5. Special ADEA Waiver and Release Notification
(a) The General Release, paragraph 2 above, of this Separation Agreement,
includes a waiver and release of all claims under the Age Discrimination in
Employment Act (“ADEA”) and, therefore, pursuant to the requirements of the
ADEA, Associate acknowledges that Associate has been:

  (i)   advised that the waiver and release includes, but is not limited to, all
claims under the ADEA arising up to and including the date of execution of this
waiver and release;

  (ii)   advised to consult with an attorney and/or other advisor concerning
Associate’s rights and obligations under this Separation Agreement prior to
Associate’s execution of it. Associate understands that whether or not to do so
is Associate’s decision. Associate agrees, however, that AMERIGROUP shall not be
required to pay any of Associate’s attorney’s fees in this or any related matter
or lawsuit, now or later, and that the settlement monies received in
Paragraph B.1 are in full and complete settlement of all matters between
Associate and AMERIGROUP, including but not limited to, attorney’s fees and
costs;

  (iii)   advised that Associate has at least twenty-one (21) days within which
to consider this Separation Agreement; and

  (iv)   advised that Associate may revoke this Separation Agreement within
seven (7) days of Associate’s signing it. Revocation can be made by delivering a
written notice of revocation to Stanley F. Baldwin, General Counsel, AMERIGROUP
Corporation, 4425 Corporation Lane, Virginia Beach, Virginia 23462. For such
revocation to be effective, Mr. Baldwin must receive notice no later than 5:00
p.m. on the seventh (7th) calendar day after Associate signs this Separation
Agreement. If Associate revokes this Separation Agreement it shall not be
effective or enforceable and Associate will not receive the benefits described
in Paragraph B.1.

6. Confirmation of Corporate Compliance
Associate acknowledges that Associate will not be eligible to receive the
benefits described in the Special Separation Package if Associate is found to
have committed or condoned during Associate’s employment any acts of fraud
against AMERIGROUP or fraud against the government. Associate hereby confirms
that: Associate has not committed or condoned any such fraudulent activity;
Associate has complied with AMERIGROUP’s Corporate Compliance/Ethics Program
during Associates employment; Associate has not participated in or knowingly
permitted others to engage in any conduct prohibited by AMERIGROUP’s Corporate
Compliance/Ethics Program; Associate understands that Associate has a duty under
that program to notify AMERIGROUP’s designated Corporate Compliance/Ethics
Officer of any knowledge of violation of such Program; and Associate is not
aware of any such violation by Associate or anyone else employed by AMERIGROUP.
Associate confirms that Associate has complied with the duties and obligations
outlined in this paragraph and Associate acknowledges that such compliance is a
condition to Associate’s eligibility to receive the benefits described in the
Special Separation Package.

7. Nonpiracy of Employees
Associate agrees that during the period of one year following Associate’s
separation from employment with AMERIGROUP, Associate will not directly or
indirectly on behalf of Associate or any other entity or person solicit for
employment any personnel employed by AMERIGROUP or AMERIGROUP’s subsidiaries at
the time of such separation.

8. Nondisparagement
Associate and AMERIGROUP each agree to refrain from disparaging the other.
Further, both AMERIGROUP and Associate agree to project a positive image of each
other to any former or future customers, community and civic leaders or others
that might have contact with either party. Associate agrees that Associate will
not make any comments relating to AMERIGROUP or its employees which are
critical, derogatory or which may tend to injure the business of AMERIGROUP.
Nothing herein shall preclude the giving of truthful testimony in any legal
proceeding.

9. No Admission
It is understood and agreed that, prior to entering into this Separation
Agreement, AMERIGROUP has admitted no liability for the Special Separation
Package provided herein or for any benefits other than those provided by
contract or AMERIGROUP policy or the provisions of this Separation Agreement.
AMERIGROUP has entered into this Separation Agreement solely for the purposes
set forth in Paragraph A.2. and to maintain an amicable and cooperative
relationship between Associate and AMERIGROUP.

10. No Waiver or Breach or Remedy
A waiver by AMERIGROUP of the breach of any of the provisions of this Separation
Agreement by Associate shall not be deemed a waiver by AMERIGROUP or any
subsequent breach, nor shall recourse to any remedy hereunder be deemed a waiver
of any other or further relief or remedy provided for herein.

11. Severability
In the event that any provision of this Separation Agreement is determined to be
invalid by a court of competent jurisdiction, all other provisions of this
Separation Agreement shall remain in full force and effect.

12. Entire Agreement
(a) This Agreement and the agreements incorporated herein by reference,
constitute the entire understanding of the parties relating to the subject
matter hereof and, subject to the provisions of Section 4(c), herein, supersedes
and cancels all agreements, written or oral, made prior to the date hereof
between Associate and AMERIGROUP relating to employment, salary, bonus, or other
compensation of any description, equity participation, pension, post-retirement
benefits, severance or other remuneration, other than, where applicable,
Associate’s Stock Option Agreements under the 1994 Stock Plan, 2000 Equity
Incentive Plan, and 2003 Equity Incentive Plan; Associate’s Indemnification
Agreement; the Company’s 401(k) Plan; the Employee Stock Purchase Plan; and the
Executive Deferred Compensation Plan.

(b) The parties understand and agree that all terms of this Separation Agreement
are contractual and are not a mere recital, and represent and warrant that they
are competent and possess the full and complete authority to covenant and agree
as herein provided.

(c) Associate understands, agrees, and represents that the covenants made herein
and the releases herein executed may affect rights and liabilities of
substantial extent and agrees that the covenants and releases provided herein
are in Associate’s best interest. Associate represents and warrants that, in
negotiating and executing this Separation Agreement, Associate has had an
adequate opportunity to consult with competent counsel or other representatives
of Associate’s choosing concerning the meaning and effect of each term and
provision hereof, and that there are no representations, promises or agreements
other than those expressly set forth in writing herein. Associate acknowledges
that Associate received a copy of this Separation Agreement, and was offered a
reasonable period to consider it.

(d) The parties agree that this is a negotiated separation agreement and that no
term herein shall be construed against a party merely because that party or its
attorneys proposed or drafted such term.

(e) The parties have carefully read this Separation Agreement in its entirety;
fully understand and agree to its terms and provisions; intend and agree that it
is final and binding and understand that, in the event of a breach, either party
may seek relief, including damages, restitution and injunctive relief, at law or
in equity, in a court of competent jurisdiction.

(f) Each party also agrees that, without receiving further consideration, it
will sign and deliver such documents and do anything else that is necessary in
the future to make the provisions of this Separation Agreement effective.

13. Agreement Binding
This Separation Agreement shall be binding on the parties and upon their heirs,
administrators, representatives, executors, successors, and assigns and shall
inure to their benefit and to that of their heirs, administrators,
representatives, executors, successors, and assigns.

14. Violation by Associate
In the event that a Party hereto violates any of the terms of this Separation
Agreement, the other Party shall have the right to terminate any or all of its
commitments herein and to seek to recover the equivalent of any monies or other
consideration previously provided, and to pursue any other remedies available in
law or at equity.

15. Voluntary
(a) Associate agrees that Associate has read and carefully considered this
Separation Agreement, and has had the opportunity to ask questions of company
representatives. Associate agrees that Associate also had the opportunity to
discuss this Separation Agreement with an attorney. Associate agrees that
Associate is signing this agreement voluntarily and of Associate’s own free
will.

(b) Associate acknowledges that the Associate need not and should not sign this
Separation Agreement unless the statements in it are completely true and
accurate.

16. Choice of Law
This Agreement and the legal relationships among the parties hereto shall be
governed by and construed in accordance with the laws of the Commonwealth of
Virginia, without regard to conflict of laws principles. Each party hereby
irrevocably consents, in any dispute, action, litigation or other proceeding
concerning this Agreement, to the jurisdiction of the state and federal courts
having venue for the City of Virginia Beach, Virginia, and irrevocably waives,
to the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such suit, action or proceeding in such court and further
waives the right to object, with respect to such suit, action or proceeding,
that such court does not have jurisdiction over such party or that venue is
improper.

17. Section Headings
The section headings in this Agreement are intended to be for reference purposes
only and shall in no way be construed to modify or restrict any of the terms or
provisions of this Agreement.

18. No Third Party Rights
This Agreement is entered into solely between AMERIGROUP and Associate and shall
not be deemed to create any rights in any third parties or to create any
obligations of AMERIGROUP to any third party.

19. Counterparts
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original but all of which shall constitute one and the same
instrument.

IN WITNESS WHEREOF, and intending to be legally bound, the parties have executed
the foregoing Separation Agreement.

      LORENZO CHILDRESS, JR., M.D.   AMERIGROUP CORPORATION
     
Lorenzo Childress, Jr., M.D.
  By:     
Stanley F. Baldwin
 
   
 
  Executive Vice President, General
Counsel and Secretary

COMMONWEALTH OF VIRGINIA

City of Virginia Beach

Acknowledged before me by Lorenzo Childress, Jr., M.D. on the      day of
     2005.

     
Notary Public

My Commission Expires:

1

COMMONWEALTH OF VIRGINIA

City of Virginia Beach

Acknowledged before me by Stanley F. Baldwin, Executive Vice President, General
Counsel and Secretary, of AMERIGROUP Corporation, on the      day of      2005.

     
Notary Public

My Commission Expires:

2