Exhibit 10.6

AMERIGROUP CORPORATION

SEVERANCE PLAN

Effective July 30, 2008

TABLE OF CONTENTS

Page

                 
INTRODUCTION
            1  
ARTICLE IDEFINITIONS
            2  
1.01.
  Administrator     2  
1.02.
  Agreement and Release     2  
1.03.
  Base Pay     2  
1.04.
  Board     2  
1.05.
  Change in Control Benefits Policy     2  
1.06.
  Code     2  
1.07.
  Committee     2  
1.08.
  Company     2  
1.09.
  Compensation Committee     2  
1.10.
  Effective Date     3  
1.11.
  Eligible Employee     3  
1.12.
  Employee     3  
1.13.
  ERISA     3  
1.14.
  Fiduciary     3  
1.15.
  Named Fiduciary     3  
1.16.
  Participant     3  
1.17.
  Plan     3  
1.18.
  Plan Year     4  
1.19.
  Separation Date     4  
1.20.
  Subsidiary     4  
1.21.
  Year of Service     4   ARTICLE IIPARTICIPATION
    4  
2.01.
  Participation Requirements     4  
2.02.
  Determination of Eligibility for Participation     5  
ARTICLE IIIBENEFITS
            5  
3.01.
  Severance Pay     5  
3.02.
  Other Benefits     6   ARTICLE IVAMENDMENT AND TERMINATION
    6  
4.01.
  Amendment     6  
4.02.
  Termination     6   ARTICLE VADMINISTRATION
    7  
5.01.
  Named Fiduciaries, Allocation of Responsibility     7  
5.02.
  Administrator Powers and Duties     7  
5.03.
  Records and Reports     8  
5.04.
  Payment of Expenses     8  
5.05.
  Limitation of Liability     8  
5.06.
  Claims     9  
5.07.
  Fiduciary Discretion     11   ARTICLE VIGENERAL PROVISIONS
    11  
6.01.
  Construction     11  
6.02.
  Governing Law     11  
6.03.
  Plan Creates No Separate Rights     11  
6.04.
  Mistake-of-Fact Contributions     12  
6.05.
  Non-Alienation of Benefits     12  
6.06.
  Action by Company     12  

INTRODUCTION

The AMERIGROUP Corporation Severance Plan (the Plan) was established, effective
July 30, 2008, by AMERIGROUP Corporation in order to assist Eligible Employees
upon termination of employment from the Company in certain circumstances. The
Plan provides severance benefits to Eligible Employees who become Participants.

The Plan is intended to be a “welfare plan,” but not a “pension plan,” as
defined in ERISA sections 3(1) and 3(2), respectively. The Plan must be
interpreted and administered in a manner that is consistent with that intent.

1

ARTICLE I

DEFINITIONS

      1.01.   Administrator
 
  Administrator means the Committee.
1.02.
  Agreement and Release
 
   

Agreement and Release means the form required by the Administrator that must be
executed by a Participant in accordance with Plan section 2.01 to be eligible
for benefits under the Plan.

1.03. Base Pay

Base Pay means a Participant’s regular base salary as in effect on his
Separation Date, excluding commissions and bonuses.

      1.04.   Board
 
  Board means the Company’s board of directors or other governing body.
1.05.
  Change in Control Benefits Policy
 
   

Change in Control Benefits Policy means the Company’s Change in Control Benefits
Policy, originally effective February 12, 2007, as amended and restated July 30,
2008 and November 6, 2008, and as subsequently amended from time to time.

      1.06.   Code
 
  Code means the Internal Revenue Code of 1986, as amended at any relevant time.
1.07.
  Committee
 
   
 
  Committee means the Company’s Benefit Appeals Committee.
1.08.
  Company
 
   

Company means AMERIGROUP Corporation, a Delaware corporation, its successor and
its Subsidiaries.

      1.09   Compensation Committee
 
  Compensation Committee means the Compensation Committee of the Board.
1.10.
  Effective Date
 
   
 
  Effective Date means July 30, 2008.
1.11.
  Eligible Employee
 
   

Eligible Employee means all full-time and part-time benefits eligible Employees
(determined in accordance with the Company’s established payroll accounting and
personnel policies), provided, however, that an Employee with an individual
employment agreement between the Employee and the Company is not an Eligible
Employee.

1.12. Employee

Employee means an individual who renders personal services to the Company and
who is subject to the control of the Company. An individual who is in an
employer-employee relationship with a Company as determined for Federal
Insurance Contribution Act purposes and Federal Employment Tax purposes,
including Code section 3401(c), automatically satisfies the preceding sentence’s
requirements for determinations of whether that individual renders personal
services and is subject to the control of a Company. Individuals designated by
the Company as independent contractors are not Employees for purposes of the
Plan.

1.13. ERISA

ERISA means the Employee Retirement Income Security Act of 1974, as amended at
any relevant time.

1.14. Fiduciary

Fiduciary means a fiduciary, as defined in ERISA section 3(21)(A).

1.15. Named Fiduciary

Named Fiduciary means a named fiduciary, as defined in ERISA section 402(a)(2).

1.16. Participant

Participant means an Eligible Employee who has satisfied the participation
requirements provided in Plan article II.

1.17. Plan

Plan means the AMERIGROUP Corporation Severance Plan as amended from time to
time.

1.18. Plan Year

Plan Year means the twelve-month period beginning each January 1 and ending each
December 31. For the period beginning July 30, 2008, Plan Year means the period
from July 30, 2008, through December 31, 2008.

1.19. Separation Date

Separation Date means the date that an Eligible Employee’s employment with the
Company terminates.

1.20. Subsidiary

Subsidiary means any corporation, partnership, limited liability company or
other entity (other than the Company) in an unbroken chain of corporations,
partnerships, limited liability companies or other entities beginning with the
Company, if each such entity (other than the last entity) in the unbroken chain
owns securities possessing 50% or more of the total combined voting power of all
classes of securities in one of the other entities in the chain.

1.21. Year of Service

Year of Service means each completed twelve consecutive month period commencing
on the Participant’s date of employment. No fractional or partial Years of
Service shall be credited under the Plan.

ARTICLE II

PARTICIPATION

2.01. Participation Requirements

(a) Subject to subsections (b), (c) and (d) below, an Eligible Employee becomes
a Participant if his or her employment with the Company is terminated after the
Effective Date for reasons other than for cause (as determined by the
Administrator in its sole and absolute discretion) or death.

(b) An Eligible Employee’s entitlement to benefits under the Plan is subject to
the execution of an Agreement and Release in the time and manner specified by
the Administrator.

(c) If an Eligible Employee’s employment is terminated during the Protected
Period (as defined below) following a Change in Control (as defined below), and
such termination would entitle the Eligible Employee to receive Severance
Payments (as defined below) under the Change in Control Benefit Policy, then the
Eligible Employee shall not be eligible to participate and receive benefits
under the Plan. For purposes of this Plan section 2.01(c), the terms “Change in
Control”, “Protected Period” and “Severance Payments” shall have meaning
ascribed to them in the Change in Control Benefits Policy.

(d) An Eligible Employee whose position with the Company was selected for
elimination prior to the Effective Date is not entitled to benefits under the
Plan, even if such Eligible Employee remained employed for a period of time
after the Effective Date or was not notified of the elimination of such Eligible
Employee’s position until after the Effective Date.

2.02. Determination of Eligibility for Participation

(a) The Administrator must determine each person’s eligibility for participation
in this Plan. All good-faith determinations by the Administrator are conclusive
and binding on all persons for the plan year in question, and there is no right
of appeal.

(b) An Eligible Employee who has been offered and accepted employment in another
position with the Company, or any of its affiliates, will become ineligible to
receive the Severance Payments described herein.

ARTICLE III

BENEFITS

3.01. Severance Pay

(a) Severance Amount. The amount of a Participant’s severance pay benefits shall
be determined by multiplying such Participant’s weekly Base Pay times the number
of weeks of severance determined pursuant to Exhibit I, attached hereto.
Severance pay benefits shall be subject to such conditions as the Administrator
shall, in its sole discretion determine; provided that no award may exceed two
times the applicable Participant’s annual compensation during the calendar year
preceding the year of the Participant’s Separation Date. A Participant shall be
entitled to benefits under this Article III to the extent that such Participant
has signed and delivered to the Administrator an Agreement and Release in the
form provided by and in the time and manner satisfactory to the Administrator.

(b) Form and Time of Payment. Severance pay provided under this Plan section
will be paid in a single sum (less any applicable federal, state, and local
income or employment taxes) within 30 days after the Participant’s proper and
timely execution of an Agreement and Release.

(c) Bonus Payment.

(i) If the Participant’s Separation Date is before the date in a calendar year
in which a bonus for the prior calendar year is paid, such Participant shall be
entitled to a bonus for such prior calendar year, payable at the Participant’s
target bonus level but only to the extent accrued for such year and in no event
to exceed Participant’s target bonus level. The Participant will not be eligible
for a bonus with respect to the calendar year that includes his Separation Date.

(ii) If the Participant’s Separation Date is after the date in a calendar year
in which a bonus for the prior calendar year has been paid, such Participant
shall be eligible for a bonus for the calendar year that includes his Separation
Date equal to one-half of the target bonus for such year.

(iii) The payment of the bonus described in (i) above shall be payable only and
to the extent of the payment of similar bonuses to active Employees for such
calendar year.

3.02. Other Benefits

(a) Paid Accumulated Leave (“PAL”). A Participant is entitled to payment on
account of any PAL that is accrued but has not been used as of the Participant’s
Separation Date. The benefits provided under this Plan section, less applicable
federal, state, and local income and employment taxes, will be paid as soon as
practicable after the Participant’s Separation Date.

(b) Outplacement. To the extent authorized by the Administrator, a Participant
may be entitled to reasonable outplacement assistance, as defined in
Section 409A of the Internal Revenue Code, based on the Company’s three-tier
management levels and in the amount determined by the Administrator.

(c) COBRA. A Participant who properly elects continuation coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) shall be
entitled to a partial subsidy equal to the subsidy provided to active Employees
under the Company’s group health plan for the number of weeks used in Exhibit I
to calculate his or her severance pay benefit or for the period he or she elects
COBRA coverage, whichever is less. The COBRA subsidy is the same subsidy the
Company provides directly to the COBRA vendor on behalf of an active Employee.

ARTICLE IV

AMENDMENT AND TERMINATION

4.01. Amendment

By action of the Compensation Committee, the Company may modify, alter, or amend
the Plan, in whole or in part. An amendment may be made retroactively if it is
necessary to make this Plan conform to applicable law.

4.02. Termination

(a) By action of the Compensation Committee, the Company may terminate the Plan
at any time or for any reason.

(b) If the Company no longer exists (by merger, consolidation, reorganization of
the Company, or otherwise), the Plan terminates unless a successor to the
Company continues it.

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ARTICLE V

ADMINISTRATION

5.01. Named Fiduciaries, Allocation of Responsibility

(a) The Company and the Administrator are Named Fiduciaries. Each is severally
liable for its responsibilities.

(b) The Administrator has only the responsibilities described in this Plan and
those delegated by the Company.

(c) All responsibilities not specifically delegated to another Named Fiduciary
remain with the Company, including designating all Named Fiduciaries not named
in this Plan. The Company’s responsibilities include drafting and designing the
Plan and the amendments to it; funding according to the Plan’s terms; and
designating all additional Fiduciaries not named in this Plan. The Company has
the power to delegate fiduciary responsibilities that the Plan does not
specifically delegate. A delegation may be made to any legal person. Each person
to whom fiduciary responsibility is delegated serves at the Company’s pleasure
and for the compensation that the Company and that person determine in advance,
except as prohibited by law. A person to whom responsibility is delegated may
resign after thirty (30) days’ notice to the Company. The Company may make
additional delegations, including delegations occasioned by resignation, death,
or other cause, and including delegations to successor Administrators.

(d) This Plan allocates to each Named Fiduciary the individual responsibilities
assigned. Named Fiduciaries do not share responsibilities unless the Plan so
provides.

(e) Whenever the Plan requires one Named Fiduciary to follow the directions of
another Named Fiduciary, the two have not been assigned to share the
responsibility. The Named Fiduciary giving directions bears the sole
responsibility for those directions, and the responsibility of the Named
Fiduciary receiving those directions is to follow directions as long as on their
face the directions are not improper under applicable law.

5.02. Administrator Powers and Duties

The Administrator must administer the Plan by its terms and has all powers
necessary to do so. The Administrator is agent for service of legal process
unless it designates another person to be agent for service of legal process.
The Administrator must interpret the Plan. The Administrator’s duties include,
but are not limited to determining the answers to all questions relating to the
Employees’ eligibility to become Participants.

A determination that the Administrator makes in good faith is conclusive and
binding on all persons. The Administrator’s decisions, however, may not take
away any rights that the Plan specifically gives to a Participant. If an
individual who is the Administrator is also a Participant, he must abstain from
any action that directly affects him as a Participant in a manner different from
other similarly situated Participants. The Plan, however, does not prevent an
individual who is the Administrator who is also a Participant or a beneficiary
from receiving any benefit to which he may be entitled, if the benefit is
computed and paid on a basis that is consistently applied to all other
Participants and beneficiaries.

The Administrator may employ and compensate from the Company’s assets according
to Plan section 5.04 such accountants, counsel, specialists, and other advisory
and clerical persons as it deems necessary or desirable in connection with the
Plan’s administration. The Administrator is entitled to rely conclusively on any
opinions from its accountant or counsel. Except to the extent prohibited by law,
the Administrator is fully protected by the Company and the Employees and the
Participants whenever it takes action based in good faith on advice from its
advisors.

5.03. Records and Reports

The Company must supply information to the Administrator sufficient to enable
the Administrator to fulfill its duties. The Administrator must keep all books
of account, records, and other data necessary for proper administration of the
Plan. The Administrator may appoint any person as agent to keep records.

5.04. Payment of Expenses

Until the Company determines otherwise, the Administrator serves without
compensation. The Company must pay the Administrator’s expenses, including any
expenses incident to the functioning of the Administrator, fees of accountants,
legal counsel, and other similar specialists, and other costs of administering
the Plan.

5.05. Limitation of Liability

If permissible by law, the Administrator serves without bond. If the law
requires bond, the Administrator must secure the minimum bond required and
obtain necessary payments according to Plan section 5.04. Unless the Plan
provides otherwise, the Administrator is not liable for another Fiduciary’s act
or omission. To the extent allowed by law and except as otherwise provided in
the Plan, the Administrator is not liable for any action or omission that is not
the result of the Administrator’s own negligence or bad faith.

As permitted by law and as limited by any agreement in writing between the
Company and the Administrator, the Company must indemnify and save the
Administrator harmless against expenses, claims, and liabilities arising out of
being the Administrator, except expenses, claims, and liabilities arising out of
the Administrator’s or member’s own negligence or bad faith. The Company may
obtain insurance against acts or omissions of the Administrator. If the Company
fails to obtain that insurance, the Administrator may obtain insurance and must
be reimbursed according to Plan section 5.04 and as permitted by law. At its own
expense, the Company may employ its own counsel to defend or maintain, either in
its own name or in the name of the Administrator, any suit or litigation arising
under the Plan concerning the Administrator.

5.06. Claims

(a) Initial Benefit Payment. It is not necessary to file a claim in order to
receive Plan benefits.

(b) Written Claims Required for Review. Subject to the Plan’s review procedures,
a request for a review of claims for benefits under this Plan generally must be
made in written or electronic form to the Administrator or to any person the
Administrator designates to receive claims. If the Administrator makes claim
forms available, those forms must be used; otherwise, a claim by a Participant
communicated in writing to the Administrator or its designated reviewer is
satisfactory.

(1) Plan’s terms and conditions. On any claim for Plan benefits, a Participant
may be required to acknowledge the existence of and the terms and conditions in
the Plan. He may also be required to acknowledge that a copy of the Plan has
been made available to him. The Administrator may require a Participant to agree
to abide by the terms and conditions of this Plan.

(2) Time limit for filing claims. Each Participant shall submit claims for Plan
benefits to the Administrator within 90 days after the end of the Plan Year. Any
claims for a Plan Year that are submitted after these deadlines will not be
paid.

(3) Plan’s response to initial claim for benefits. In general, on receipt of a
claim, the Administrator must respond in writing (or electronically, if
applicable) within 90 days. If applicable, the first written notice to the
claimant must indicate any special circumstances requiring an extension of time
for the decision. A notice of an extension of time must indicate the date by
which the Administrator expects to give a decision. An extension of time for
processing may not exceed 90 days after the end of the initial 90-day period.

(4) Content of notice of denied claims. In general, if a claim is wholly or
partially denied, the Administrator shall give written notice within the time
provided in subsection (3) above. An adverse notice shall specify

(A) the specific reason for the denial,

(B) reference to the specific provisions of the Plan on which the denial is
based;

(C) a description of any additional material or information necessary for the
Participant to perfect the claim and an explanation of why that material or
information is necessary; and

(D) a description of the Plan’s review procedures and the time limits applicable
to such procedures, including a statement of the Participant’s right to bring a
civil action under ERISA section 502(a) following an Adverse Benefit
Determination on review.

(c) General Procedures for Appeal of Adverse Benefit Determination. In general,
a Participant shall have 60 days following receipt of a notification of an
Adverse Benefit Determination within which to appeal the determination.
Participants shall have the opportunity to submit written comments, documents,
records, and other information relating to the claim for benefits. Participants
shall be provided, upon request and free of charge, reasonable access to, and
copies of, all documents, records, and other information relevant to the
Participant’s claim for benefits. Review of an Adverse Benefit Determination
shall take into account all comments, documents, records, and other information
submitted by the Participant relating to the claim, without regard to whether
the information was submitted or considered in the initial benefit
determination.

(d) Timing of Benefit Determination on Review. In general, the Administrator
shall notify a Participant of the Plan’s benefit determination on review within
60 days after receipt of the Participant’s request for review, unless the
Administrator determines that special circumstances (such as the need to hold a
hearing, if provided for by the Plan) require an extension of time for
processing the claim. If the Administrator determines that an extension of time
for processing the claim is required, written notice of the extension shall be
furnished to the Participant prior to the termination of the initial 60-day
period. In no event shall the extension exceed a period of 60 days from the end
of the initial period. The extension notice shall indicate the special
circumstances requiring an extension of time and the date by which the Plan
expects to render the determination on review.

(e) Manner and Content of Benefit Determination on Review. The Administrator
shall provide the Participant with written or electronic notification of a
Plan’s benefit determination on review. In the case of an Adverse Benefit
Determination, the notification shall set forth:

(1) the specific reason or reasons for the adverse determination;

(2) a reference to the specific Plan provision on which the benefit
determination is based;

(3) a statement that the Participant is entitled to receive, upon request and
free of charge, reasonable access to, and copies of, all documents, records, and
other information relevant to the Participant’s claim for benefits; and

(4) a statement describing any voluntary appeal procedure offered by the Plan
and the Participant’s right to obtain the information about the procedures, and
a statement of the Participant’s right to bring an action under ERISA section
502(a).

(f) Determination Final. Except for a written request for a review of an Adverse
Benefit Determination, all good-faith determinations by the Administrator or
other designated reviewer are conclusive and binding on all persons, and there
is no right of appeal. Any electronic notification shall comply with the
standards of ERISA section 2520.104b-1(c)(1)(i).

5.07. Fiduciary Discretion

In discharging the duties assigned to it under the Plan, each Fiduciary has the
discretion to interpret the Plan; adopt, amend and rescind rules and regulations
pertaining to its duties under the Plan; and to make all other determinations
necessary or advisable for the discharge of its duties under the Plan. Each
Fiduciary’s discretionary authority is absolute and exclusive if exercised in a
uniform and nondiscriminatory manner with respect to similarly situated
individuals. The express grant in the Plan of any specific power to a Fiduciary
with respect to any duty assigned to it under the Plan must not be construed as
limiting any power or authority of the Fiduciary to discharge its duties. A
Fiduciary’s decision is final and conclusive unless it is established that the
Fiduciary’s decision constituted an abuse of its discretion. Benefits under the
Plan will be paid only if the Administrator or its delegate decides in its
discretion that the applicant is entitled to them.

ARTICLE VI

GENERAL PROVISIONS

6.01. Construction

One gender includes the other, and the singular and plural include each other
when the meaning would be appropriate. The Plan’s headings and subheadings have
been inserted for convenience of reference only and must be ignored in any
construction of the provisions. If a provision of this Plan is illegal or
invalid, that illegality or invalidity does not affect other provisions. Any
term with an initial capital not expected by capitalization rules is a defined
term according to Plan article I. This Plan must be construed according to the
applicable provisions of the Code and Treasury Regulations in a manner that
assures that the Plan provides the benefits and tax consequences intended for
Participants. Any terms defined in the Code or Treasury Regulations in a manner
that assures that the Plan provides the benefits and tax consequences intended
for Participants. Any terms defined in the Code or Treasury Regulations that are
not defined terms according to Plan article I are incorporated in this Plan by
reference.

6.02. Governing Law

This Plan is construed, enforced, and administered in accordance with the laws
of the Commonwealth of Virginia (other than its choice of law rules), except to
the extent that those laws are superseded by the laws of the United States of
America.

6.03. Plan Creates No Separate Rights

The creation, continuance, or change of the Plan or any payment does not give
any person a non-statutory legal or equitable right against the Company; or any
of the Company’s officers, agents, or other persons employed by the Company. The
Plan does not modify the terms of a Participant’s employment.

6.04. Mistake-of-Fact Contributions

If the Company makes any benefit contribution because of a mistake of fact, the
portion of the benefit contribution due to the mistake of fact must be returned
to the contributor, as authorized by regulations under ERISA section 403.

6.05. Non-Alienation of Benefits

Except as permitted by law and this section, no assignment of any rights or
benefits arising under the Plan is permitted or recognized. No rights or
benefits are subject to attachment or other legal or equitable process or
subject to the jurisdiction of any bankruptcy court. If any Participant is
adjudicated bankrupt or attempts to assign any benefits, then in the Company’s
discretion, those benefits cease. If that happens, the Administrator may apply
those benefits for that Participant or his dependents as the Administrator sees
fit. The Company is not liable for or subject to the debts, contracts,
liabilities, or torts of any person entitled to benefits under this Plan.

6.06. Action by Company

Any action of the Company under this Plan may be by resolution of its Board, by
the Compensation Committee or by any officer or other person with authorization
from that Board or Compensation Committee.

3

EXHIBIT I

SEVERANCE PAYMENTS
As of July 30, 2008

                      Employee Title/Pay Grade     Associate   Manager and Above
  VP and Above   EVPs and Regional     (below Grade 21)   (including  
(including Plan   CEOs
 
 

--------------------------------------------------------------------------------

  Associates in Grade
21 and up)   CEOs and COOs)

  —

 
         
 

Minimum Severance
  2 weeks   6 weeks   16 weeks   52 weeks
 
             

Additional Severance
  Additional week per
Year of Service   Additional two
weeks per Year of
Service   Additional two
weeks per Year of
Service  

None
 
               
Maximum Severance
  26 weeks   26 weeks   39 weeks   52 weeks
 
                Long Term Incentive
Plan (“LTIP”)   N/A   N/A   N/A for VPs. SVP’s and above will receive the LTIP
installments under any existing LTIP plans for which the Compensation Committee
has approved funding as of the date of termination.              

4