**EXECUTIVE SEVERANCE AGREEMENT**

**Cobalt Corporation**

**TABLE OF CONTENTS**

| ARTICLE  1  | ESTABLISHMENT,  TERM, AND PURPOSE         |   |
|-------------|-------------------------------------------|--------|
|        |                                      |   |
| ARTICLE 2   | DEFINITIONS                               |   |
|        |                                      |   |
| ARTICLE  3  | LOSS  OF ELIGIBILITY UNDER THIS AGREEMENT |   |
|        |                                      |   |
| ARTICLE 4   | SEVERANCE  BENEFITS                       |   |
|        |                                      |   |
| ARTICLE  5  | FORM  AND TIMING OF SEVERANCE BENEFITS    |   |
|        |                                      |   |
| ARTICLE  6  | EXCISE  TAX EQUALIZATION PAYMENT          |   |
|        |                                      |   |
| ARTICLE  7  | THE  COMPANY’S PAYMENT OBLIGATION    |   |
|        |                                      |   |
| ARTICLE  8  | LEGAL  REMEDIES                           |   |
|        |                                      |   |
| ARTICLE  9  | OUTPLACEMENT  ASSISTANCE                  |   |
|        |                                      |   |
| ARTICLE  10 | SUCCESSORS  AND ASSIGNMENT                |   |
|        |                                      |   |
| ARTICLE 11  | MISCELLANEOUS                             |   |

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**Cobalt CorporationExecutive Severance Agreement**

             THISAGREEMENT is made and entered into as of the ___ day of ________, 2001, by andbetween Cobalt Corporation (hereinafter referred to as the “Company”) and «FirstName»(hereinafter referred to as the “Executive”).

             WHEREAS,the Executive is a key executive of the Company;

             WHEREAS,should the possibility of a Change in Control of the Company (as defined inSection 2.6 hereof) arise, the Board believes it is imperative that the Companyand the Board should be able to rely upon the Executive to continue in his orher position, and that the Company should be able to receive and rely upon theExecutive’s advice, if requested, as to the best interests of the Companywithout concern that the Executive might be distracted by the personaluncertainties and risks created by the possibility of a Change in Control;

             WHEREAS,should the possibility of a Change in Control arise, in addition to his or herregular duties, the Executive may be called upon to assist in the assessment ofsuch possible Change in Control, advise management and the Board as to whethersuch Change in Control would be in the best interests of the Company, and totake such other actions as the Board might determine to be appropriate;

             WHEREAS,the Executive previously entered into an executive severance agreement (the“Prior Agreement”) with Blue Cross & Blue Shield United of Wisconsin(“BCBSUW”) which is substantially similar to this Agreement;

             WHEREAS,through a reorganization, BCBSUW has become a subsidiary of the Company;

             WHEREAS,the Prior Agreement would have covered a Change in Control of the Company andimposed the financial obligations of the Prior Agreement on BCBSUW which is nowa subsidiary of the Company;

             WHEREAS,the Board of Directors of the Company believes that the Executive SeveranceAgreement and the obligations thereunder should be between the Company and theExecutive now that the Company has become BCBSUW’s parent; and

             WHEREAS,the Board of Directors of the Company desires to substitute this Agreement forthe Prior Agreement.

             NOW,THEREFORE, to assure the Company that it will have the continued dedication ofthe Executive and the availability of his or her advice and counselnotwithstanding the possibility, threat, or occurrence of a Change in Controlof the Company, and to induce the Executive to remain in the employ of theCompany, and for other good and valuable consideration, the Company and theExecutive agree as follows:

**Article1  ** ESTABLISHMENT, TERM, ANDPURPOSE

             ThisAgreement will commence on the Effective Date and, subject to Article 3, shallcontinue in effect for three (3) full years. However, at the end of such three (3) year period and, if extended, atthe end of each additional year thereafter, the term of this Agreement shall beextended automatically for one (1) additional year, unless the Committeedelivers written notice six (6) months prior to the end of such term, orextended term, to the Executive, that the Agreement will not be extended.  In the latter case, the Agreement willterminate at the end of the term, or extended term, then in progress, or asprovided in Article 3.

             However,in the event a Change in Control occurs during the original or any extendedterm, this Agreement will remain in effect for the longer of:  (i) twenty-four (24) months beyond the monthin which such Change in Control occurred; or (ii) until all obligations of theCompany hereunder have been fulfilled, and until all benefits requiredhereunder have been paid to the Executive.

**Article2   **DEFINITIONS

             Wheneverused in this Agreement, the following terms shall have the meanings set forthbelow and, when the meaning is intended, the initial letter of the word iscapitalized.

**             2.1**  “BaseSalary” means the salary of record paid to an Executive by the Company, or byBlue Cross & Blue Shield United of Wisconsin or any other subsidiary of theCompany as annual salary, excluding amounts received under incentive or otherbonus plans, whether or not deferred.

**             2.2** “BeneficialOwner” shall have the meaning ascribed to such term in Rule 13d-3 of theGeneral Rules and Regulations under the Exchange Act, but excluding those whosestatus arises from the holding of proxies and including option holders on afully diluted basis.

**             2.3** “Beneficiary” means the persons or entities designated or deemeddesignated by the Executive pursuant to Section 11.2 herein.

**             2.4** “Board”means the Board of Directors of the Company.

**             2.5**  “Cause”means:  (a) the Executive’s willful andcontinued failure to substantially perform his or her duties with the Company(other than any such failure resulting from Disability or occurring afterissuance by the Executive of a Notice of Termination for Good Reason), after awritten demand for substantial performance is delivered to the Executive thatspecifically identifies the manner in which the Company believes that theExecutive has willfully failed to substantially perform his or her duties, andafter the Executive has failed to resume substantial performance of his or herduties on a continuous basis within thirty (30) calendar days of receiving suchdemand; (b) the Executive willfully engaging in conduct (other than conductcovered under (a) above) which is demonstrably and materially injurious to theCompany, monetarily or otherwise; or (c) the Executive having been convicted ofa felony (as evidenced by binding and final judgment, order or decree of acourt of competent jurisdiction, in effect after exhaustion of all rights ofappeal) which substantially impairs the Executive’s ability to perform his orher duties or responsibilities.  Forpurposes of this Section 2.5, the Executive’s actions or failures to act willbe deemed “willful” only if done or omitted in bad faith and without reasonablebelief that the action or omission was in the best interests of the Company.

**             2.6** “Change inControl” shall mean:

             (i)          Anyindividual, entity or group (within the meaning of Section 13(d)(3) of theExchange Act) (a “Person”), other than the Wisconsin United for HealthFoundation, Inc. (the “Foundation”) becoming the beneficial owner(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% ormore of the either (x) the then outstanding shares of common stock of theCompany (the “Outstanding CompanyCommon Stock”) or (y) thecombined voting power of the then outstanding voting securities of the Companyentitled to vote generally in an election of directors (the “OutstandingCompany Voting Securities”); provided, however, that for purposes of thisSection 2.6, the following acquisitions shall not constitute a Change inControl: (A) any acquisition directly from the Company, (B) any acquisition bythe Company, (C) any acquisition by any employee benefit plan (or relatedtrust) sponsored by or maintained by the Company or any corporation controlledby the Company, (D) any acquisition by any corporation controlled by theCompany, or (E) any acquisition by any corporation pursuant to a transactionthat complies with clauses (A), (B) and (C) of Section 2.6 (iii); or (F) anyacquisition where the Person owns, after the acquisition, less of the OutstandingCompany Voting Securities or Outstanding Company Common Stock than theFoundation then owns after such acquisition.

             (ii)         Individuals who, as of the date of this Agreement,constitute the Board (the “Incumbent Board”) cease for any reason to constituteat least a majority of the Board; provided, however, that any individualbecoming a director subsequent to the date hereof whose election, or nominationfor election by the Company’s shareholders, was approved by a vote of at leasta majority of the directors then comprising the Incumbent Board shall beconsidered as though such individual were a member of the Incumbent Board, butexcluding, for this purpose, any such individual whose initial assumption ofoffice occurs as a result of an actual or threatened election contest withrespect to the election or removal of directors or other actual or threatenedsolicitation of proxies or consents by or on behalf of a Person other than theBoard; or

             (iii)        Consummation of a reorganization, merger or consolidation orsale or other disposition of all or substantially all of the assets of theCompany (a “Business Combination”), in each case, unless, following suchBusiness Combination: (A) all or substantially all of the individuals andentities who were the beneficial owners, respectively, of the OutstandingCompany Common Stock and Outstanding Company Voting Securities immediatelyprior to such Business Combination beneficially own, directly or indirectly,more than 50% of, respectively, the then Outstanding shares of common stock andthe combined voting power of the then Outstanding voting Company Securitiesentitled to vote generally in the election of directors, as the case may be, ofthe corporation resulting from such Business Combination (including, withoutlimitation, a corporation that as a result of such transaction owns the Companyor all or substantially all of the Company’s assets either directly or throughone or more subsidiaries) in substantially the same proportions as theirownership, immediately prior to such Business Combination of the OutstandingCompany Common Stock and Outstanding Company Voting Securities, as the case maybe, (B) no Person (excluding any corporation resulting from such BusinessCombination or any employee benefit plan (or related trust) of the Company orsuch corporation resulting from such Business Combination) beneficially owns,directly or indirectly, 20% or more of, respectively, the then outstandingshares of common stock of the corporation resulting from such Business Combinationor the combined voting power of the then outstanding voting securities of suchcorporation except to the extent that such ownership existed prior to theBusiness Combination and (C) at least a majority of the members of the board ofdirectors of the corporation resulting from such Business Combination weremembers of the Incumbent Board at the time of the execution of the initialagreement, or of the action of the Board providing for such BusinessCombination; or

             (iv)       Approval by the shareholders of theCompany of a complete liquidation or dissolution of the Company.

**             2.7** “Code” meansthe United States Internal Revenue Code of 1986, as amended, and any successorsthereto.

**             2.8**  “Committee”means the Management Review Committee of the Board or any other committeeappointed by the Board to perform the functions of the Management ReviewCommittee or any successor committee which performs the functions of theManagement Review Committee or, in the absence of one, by the Board.

**             2.9**  “Company”means Cobalt Corporation, a Wisconsin corporation, or any successor thereto asprovided in Article 10 herein.

**             2.10** “Disability” means a complete and permanent disability as determined bythe Committee in accordance with the Company Long-Term Disability Plan, as ineffect on the Effective Date.

**             2.11** “EffectiveDate” means the date of this Agreement set forth above.

**             2.12** “EffectiveDate of Termination” means the date on which a Qualifying Termination occurs.

**             2.13**  “ExchangeAct” means the United States Securities Exchange Act of 1934, as amended.

**             2.14**  “GoodReason” shall mean, without the Executive’s express written consent, theoccurrence of any one or more of the following:

(a)         Theassignment of the Executive to duties materially inconsistent with theExecutive’s authorities, duties, responsibilities, and status (includingoffices and reporting requirements) as an employee of the Company, or areduction or alteration in the nature or status of the Executive’s authorities,duties, or responsibilities from the greater of those in effect (i) on theEffective Date; (ii) during the fiscal year immediately preceding the year ofthe Change in Control; or (iii) immediately preceding the Change in Control;

(b)        Anybreach of this Agreement by the Company, other than an isolated, insubstantialor inadvertent failure which is not taken in bad faith and which the Company orany successor remedies promptly after notice from the Executive;

(c)         TheExecutive’s principal office is moved to a location that is more than fifty(50) miles farther from the Executive’s home than the principal office locationimmediately prior to the Change in Control;

(d)        Areduction by the Company in the Executive’s Base Salary as in effect on theEffective Date or as the same shall be increased from time to time;

(e)         Amaterial reduction in the Executive’s level of participation in any of theCompany’s short- and/or long-term incentive compensation plans, or employeebenefit or retirement plans, policies, practices, or arrangements in which theExecutive participates from the greater of the levels in place on:  (i) the Effective Date; (ii) the fiscal yearimmediately preceding the Change in Control; or (iii) immediately preceding theChange in Control;

(f)         Thefailure of the Company to obtain a satisfactory agreement from any successor tothe Company to assume and agree to perform this Agreement, as contemplated inArticle 10 herein; or

(g)        Anytermination of Executive’s employment by the Company that is not effectedpursuant to a Notice of Termination.

             Theexistence of Good Reason shall not be affected by the Executive’s temporaryincapacity due to physical or mental illness not constituting aDisability.  The Executive’s continuedemployment shall not constitute a waiver of the Executive’s rights with respectto any circumstance constituting Good Reason.

**             2.15**  “Notice ofTermination” means a written notice which shall indicate the specific provisionin this Agreement governing the Executive’s termination of employment and shallset forth in reasonable detail the facts and circumstances claimed to provide abasis for termination of the Executive’s employment under the provision soindicated.

**             2.16** “Person”shall have the meaning ascribed to such term in Section 3(a)(9) of the ExchangeAct and used in Sections 13(d) and 14(d) thereof, including a “group” asprovided in Section 13(d).

**             2.17** “ProfitSharing Plan” means the Company Profit Sharing Plan.

**             2.18**  “QualifyingTermination” means termination of the Executive’s employment under one of thecircumstances described in Section 4.2 below.

**             2.19** “Retirement” shall mean termination of employment after the Executivehas attained Age 55 and completed 10 “Years of Service” (as such term isdefined in the Company’s tax-qualified defined benefit pension plan.)  “Retirement” shall be deemed to occur onlyif it is pursuant to a mandatory retirement provision in such plan or if theExecutive and the Company agree in writing that “Retirement” has occurred forpurposes of this Agreement.  (Retirementpursuant to a mandatory retirement provision added on or after a date sixmonths prior to a Change in Control will not be treated as mandatory retirementfor purposes of this Agreement.)

**             2.20**  “SeveranceBenefits” means the payment of severance compensation as provided in Section4.3 herein.

**Article 3   **LOSS OF ELIGIBILITY UNDER THIS AGREEMENT

             Inthe event Executive’s job classification is reduced, the Committee, in its solediscretion, may cancel this Agreement by written notice delivered to theExecutive.  A cancellation occurringlater than six (6) months prior to a Change in Control shall be null and void.

**Article 4   **SEVERANCE BENEFITS

**             4.1        Rightto Severance Benefits.**  The Executive shall be entitledto receive from the Company Severance Benefits, as described in Section 4.3herein, if the Executive incurs a Qualifying Termination during the six (6)month period immediately prior to a Change in Control or within twenty-four(24) calendar months following a Change in Control.

             TheExecutive shall not be entitled to receive Severance Benefits if he or she isterminated for Cause, or if his or her employment with the Company ends due todeath, Disability, or Retirement or due to termination of employment by theExecutive without Good Reason.

**             4.2  Qualifying Termination of Employment.** Upon theoccurrence of any one or more of the following events the Company shall paySeverance Benefits to the Executive under this Agreement:

                           (a)  Termination of the Executive’s employment bythe Company for reasons other than Cause.

                           (b)  Termination by the Executive for Good Reasonpursuant to a Notice of Termination delivered to the Company by the Executive.

**             4.3  Description of Severance Benefits.** In the eventthe Executive becomes entitled to receive Severance Benefits as provided inSections 4.1 and 4.2 herein, the Company shall pay to the Executive and providehim or her with the following:

(a)         Anamount equal to one and one half (1 1⁄2) times the highest rate of theExecutive’s annualized Base Salary in effect at any time up to and includingthe Effective Date of Termination.

(b)        Anamount equal to one and one half (1 1⁄2) times the Executive’s target award underthe annual bonus plan and the Profit Sharing Plan established for the plan yearin which the Executive’s Effective Date of Termination occurs, or the priorplan year if a target award has not been established for the plan year in whichthe Executive’s Effective Date of Termination occurs.

(c)         Acontinuation of the welfare benefits of health care, life and accidental deathand dismemberment, and disability insurance coverage (collectively,“Supplemental Benefits”) for one and one half (1 1⁄2) full years after theEffective Date of Termination.  Thesebenefits shall be provided at the same cost to the Executive (if any), and atthe same coverage level, as in effect as of the Executive’s Effective Date ofTermination.  However, in the event thepremium cost and/or level of coverage shall change for all management employeeswith respect to Supplemental Benefits, the cost and/or coverage level,likewise, shall change for the Executive in a corresponding manner.  COBRA-related benefits will begin as of theend of the three year period (or upon earlier discontinuance described below).

Thecontinuation of any or all of the Supplemental Benefits shall be discontinuedprior to the end of the one and one half (1 1⁄2) year period in the event theExecutive has available substantially similar benefits at a comparable costfrom a subsequent employer.

TheExecutive must supply all information reasonably requested by the Companypursuant to this subsection.

(d)        Anamount equal to the Executive’s unpaid targeted annual bonus, established forthe plan year in which the Executive’s Effective Date of Termination occurs,multiplied by a fraction, the numerator of which is the number of dayscompleted in the then-existing fiscal year through the Effective Date ofTermination, and the denominator of which is three hundred sixty-five (365).

(e)         Anamount equal to the Executive’s unpaid allocation from the Profit Sharing Plan,established for the plan year in which the Executive’s Effective Date ofTermination occurs, multiplied by a fraction, the numerator of which is thenumber of days completed in the then-existing fiscal year through the EffectiveDate of Termination, and the denominator of which is three hundred sixty-five(365).

             Incentiveawards granted under the Company Equity Incentive Plan and other incentivearrangements adopted by the Company shall be governed by the terms of theapplicable plan.

             Theaggregate benefits accrued by the Executive as of the Effective Date ofTermination under the Company Pension Plan, the UGS Pension Plan, the Company401(k) Plan, and other qualified savings and retirement plans sponsored by theCompany shall be governed by the terms of the applicable plan.  For purposes of the Company SupplementalExecutive Retirement Plan, such benefits shall be calculated under theassumption that the minimum service requirement under Section 4.1 of theCompany Supplemental Executive Retirement Plan (vesting requirement) shall bedeemed to have been satisfied as of the date of a Qualifying Termination andthe Executive’s employment continued following the Effective Date of Terminationfor one and one half (1 1⁄2) full years (i.e., one and one half (1 1⁄2) additionalyears of service credits shall be added); provided, however, that for purposesof determining “final average pay” under such program, the Executive’s actualpay history as of the Effective Date of Termination shall be used.

             Forpurposes of the Company Retiree Medical Plan, such benefits shall be calculatedunder the assumption that the Executive’s employment continued following theEffective Date of Termination of one and one-half (1 1⁄2) years (i.e., one andone-half additional years of service credits shall be added and the Executive’sage advance to correspond).

             Compensationwhich has been deferred under the Company Deferred Compensation Plan or otherplans sponsored by the Company, as applicable, together with all interest thathas been credited with respect to any such deferred compensation balances,shall be governed by the terms of the applicable plan.

**             4.4        Terminationfor Disability.** In the event the Executive’semployment is terminated due to Disability, the Executive shall not be entitledto the Severance Benefits described in Section 4.3.  The terms and conditions of the Executive’s employment rightsunder that circumstance shall be determined without regard to this Agreement.

**             4.5        Terminationfor Retirement or Death.** If the Executive’s employment isterminated by reason of his or her Retirement or death, the Executive shall notbe entitled to the Severance Benefits described in Section 4.3.  The terms and conditions of the Executive’semployment rights under those circumstances are to be determined without regardto this Agreement.

**             4.6  Termination for Cause or by the ExecutiveOther Than for Good Reason.**  If the Executive’s employment isterminated either:  (a) by the Companyfor Cause; or (b) by the Executive other than for Good Reason, the Companyshall pay the Executive the amounts specified in Section 4.8 and the Companyshall have no further obligations to the Executive under this Agreement.

**             4.7  Notice of Termination.** Anytermination of employment by the Company or by the Executive for Good Reasonshall be communicated by a Notice of Termination.  If the Executive is providing the notice, it should be deliveredto a member of the Committee.  If theCompany is providing notice, it should be delivered to the Executive.

**             4.8        Paymentof Accrued Compensation and Benefits.** In allevents, Executive shall, upon termination of employment with the Company, bepaid an amount equal to Executive’s unpaid Base Salary, accrued vacation payand any other accrued but unpaid compensation in cash or cash equivalentswithin ten (10) days of the termination except where the terms of thecompensation arrangement or plan govern instead of this Agreement andspecifically provide for later payment.

**             4.9        Coordination with Other Agreements.**  TheSeverance Benefits described in Section 4.3 shall be reduced by any severancebenefits paid pursuant to either: (i) other agreements between the Company andthe Executive or (ii) any plan adopted by the Company, unless such planor agreement expressly provides that the benefits under such plan or agreementare in addition to the benefits payable under this Agreement.

**Article 5  ** FORM ANDTIMING OF SEVERANCE BENEFITS

**             5.1        Formand Timing of Severance Benefits.** TheSeverance Benefits described in Sections 4.3(a), 4.3(b), 4.3(d), and 4.3(e)herein shall be paid in cash or cash equivalents to the Executive in a singlelump sum as soon as practicable following the Effective Date of Termination,(or, if later, the date of the Change in Control) but in no event beyond ten(10) days from such date.  TheSupplemental Benefits described in Section 4.3(c) shall be paid at the timesdue under each applicable plan.

**             5.2        Withholdingof Taxes.**  The Company shall be entitled towithhold from any amounts payable under this Agreement the minimum taxeslegally required to be withheld (including, without limitation, any UnitedStates Federal taxes and any other state, city, or local taxes).

**Article 6   **EXCISE TAX EQUALIZATION PAYMENT

**             6.1  Benefit Adjustment/Excise Tax EqualizationPayment.**  If theCommittee reasonably determines that any benefit under this Plan, alone or whenaggregated with other compensation payable to the Executive, would constitutean excess parachute payment within the meaning of Section 280G of the Code, theamount payable under this Plan will be limited to the extent necessary to avoidcreation of an excess parachute payment, unless the excess parachute paymentresults from the inability to include compensation paid by Blue Cross &Blue Shield United of Wisconsin, Inc. for purposes of determining the “baseamount” under Section 280G of the Code.

             Inthe event that the Executive becomes entitled to Severance Benefits or anyother payment or benefit under this Agreement, or under any other agreementwith or plan of the Company (in the aggregate, the “Total Payments”), if all orany part of the Total Payments will be subject to the tax (the “Excise Tax”)imposed by Section 4999 of the Code (or any similar tax that may hereafter beimposed) due to the inability to include compensation paid by Blue Cross &Blue Shield United of Wisconsin, Inc. for purposes of determining the “baseamount” under Section 280G of the Code, the Company shall pay to the Executivein cash an additional amount (the “Gross-Up Payment”) such that the net amountretained by the Executive after deduction of any Excise Tax upon the TotalPayments and any federal, state, and local income tax, penalties, interest, andExcise Tax upon the Gross-Up Payment provided for by this Section 6.1(including FICA and FUTA), shall be equal to the Total Payments or, if less,the amount Executive would have received had the compensation paid by BlueCross & Blue Shield United of Wisconsin, Inc. been included in compensationfor purposes of Section 280G of the Code. Such payment shall be made by the Company to the Executive as soon aspractical following the Effective Date of Termination, but in no event beyondthirty (30) days from such date.

**             6.2        Tax Computation.** For purposesof determining whether any of the Total Payments will be subject to the ExciseTax and the amounts of such Excise Tax:

(a)         TheSeverance Benefits and any other payments or benefits received or to bereceived by the Executive in connection with a Change in Control of the Companyor the Executive’s termination of employment (whether pursuant to the terms ofthis Agreement or any other plan, arrangement, or agreement with the Companyand subsidiaries or affiliates, or with any Person whose actions result in aChange in Control of the Company or any Person affiliated with the Company orsuch Persons) shall be treated as “parachute payments” within the meaning ofSection 280G(b)(2) of the Code, and all “excess parachute payments” within themeaning of Section 280G(b)(l) shall be treated as subject to the Excise Tax,unless in the opinion of a nationally recognized tax counsel selected by theCompany’s independent auditors and reasonably acceptable to the Executive:  (i) the Severance Benefits and such otherpayments or benefits (in whole or in part) do not constitute parachutepayments; (ii) such excess parachute payments (in whole or in part) representreasonable compensation for services actually rendered within the meaning ofSection 280G(b)(4) of the Code in excess of the base amount within the meaningof Section 280G(b)(3) of the Code; or (iii) are otherwise not subject to theExcise Tax;

(b)        Theamount of the Total Payments which shall be treated as subject to the ExciseTax shall be equal to the lesser of: (i) the total amount of the Total Payments; or (ii) the amount of excessparachute payments within the meaning of Section 280G(b)( 1) (after applying clause(a) above); and

(c)         Thevalue of any noncash benefits or any deferred payment or benefit shall bedetermined by the Company’s independent auditors in accordance with theprinciples of Sections 280G(d)(3) and (4) of the Code.

             Forpurposes of determining the amount of the Gross-Up Payment, the Executive shallbe deemed to pay federal income taxes at the highest marginal rate of federalincome taxation in the calendar year in which the Gross-Up Payment is to bemade, and state and local income taxes at the highest marginal rate of taxationin the state and locality of the Executive’s residence on the Effective Date ofTermination, net of the maximum reduction in federal income taxes which couldbe obtained from deduction of such state and local taxes.

**             6.3        SubsequentRecalculation.** In the event the Internal RevenueService adjusts the computation of the Company under Section 6.2 herein so thatthe Executive did not receive the greatest net benefit, the Company shallreimburse the Executive for the full amount necessary to make the Executive whole,plus a market rate of interest, as determined by the national tax counselreferred to above.

**             6.4        Costs of Calculations.**  The Companyagrees to bear all costs associated with, and to indemnify and hold harmless,the national tax counsel of and from any and all claims, damages, and expensesresulting from or relating to its determination pursuant to this Article 6,except for claims, damages, or expenses resulting from the gross negligence orwillful misconduct of such firm.

**Article 7   **THE COMPANY’S PAYMENT OBLIGATION

**             7.1        PaymentObligations Absolute.** The Company’s obligation to makethe payments and the arrangements provided for herein shall be absolute andunconditional, and shall not be affected by any circumstances, including, withoutlimitation, any offset, counterclaim, recoupment, defense, or other right whichthe Company may have against the Executive or anyone else.  All amounts payable by the Company hereundershall be paid without notice or demand. Subject to the provision set forth in Section 8.1 and 8.2, each andevery payment made hereunder by the Company shall be final, and the Companyshall not seek to recover all or any part of such payment from the Executive orfrom whomsoever may be entitled thereto, for any reasons whatsoever.

             TheExecutive shall not be obligated to seek other employment in mitigation of theamounts payable or arrangements made under any provision of this Agreement, andthe obtaining of any such other employment shall in no event effect anyreduction of the Company’s obligations to make the payments and arrangementsrequired to be made under this Agreement, except to the extent provided inSection 4.3(c) herein.

**             7.2        ContractualRights to Benefits.**  This Agreement establishes andvests in each Executive a contractual right to the benefits to which he or sheis entitled hereunder.  However, nothingherein contained shall require or be deemed to require, or prohibit or bedeemed to prohibit, the Company to segregate, earmark, or otherwise set asideany funds or other assets, in trust or otherwise, to provide for any paymentsto be made or required hereunder.

**Article8   **LEGALREMEDIES

**             8.1  Payment of Legal Fees.** To theextent permitted by law, the Company shall pay all legal fees, costs of litigation,prejudgment interest, and other expenses incurred in good faith by theExecutive as a result of the Company’s refusal to provide the SeveranceBenefits, the Gross-Up Payment and/or any other benefits under this Agreementto which the Executive becomes entitled under this Agreement, or as a result ofthe Company’s contesting the validity, enforceability, or interpretation ofthis Agreement, or as a result of any conflict (including conflicts related tothe calculation of parachute payments) between the parties pertaining to thisAgreement; provided, however, that the Company shall be reimbursed by theExecutive for all such fees and expenses in the event the Executive fails toprevail with respect to any one (1) material issue of dispute in connection withsuch legal action.  The Executive shallnot be liable for the Company’s fees or costs related to any such litigation.

**             8.2  Arbitration.** Executive shall have the rightand option to elect (in lieu of litigation) to have any dispute or controversyarising under or in connection with this Agreement settled by arbitration,conducted before a panel of three (3) arbitrators sitting in a locationselected by the Executive within fifty (50) miles from the location of his orher employment with the Company, in accordance with the rules of the AmericanArbitration Association then in effect.

             Judgmentmay be entered on the award of the arbitrator in any court having properjurisdiction.  All expenses of sucharbitration, including the fees and expenses of the counsel for the Executive,shall be borne by the Company; provided, however, that the Company shall bereimbursed by the Executive for all such fees and expenses in the event theExecutive fails to prevail with respect to any one (1) material issue of disputein connection with such legal action. The Executive shall not be liable for the Company’s fees or costsrelated to any such arbitration.

**Article 9   **OUTPLACEMENT ASSISTANCE

             Followinga Qualifying Termination (as described in Section 4.2 herein), the Executiveshall be reimbursed by the Company for the costs of all outplacement servicesobtained by the Executive within the two (2) year period after the EffectiveDate of Termination; provided, however, that the total reimbursement shall belimited to an amount equal to fifteen percent (15%) of the Executive’s BaseSalary as of the Effective Date of Termination.

**Article 10   **SUCCESSORS AND ASSIGNMENT

**             10.1     Successorsto the Company.**  The Company will require anysuccessor (whether direct or indirect, by purchase, merger, consolidation, orotherwise) of all or substantially all of the business and/or assets of theCompany or of any division or subsidiary thereof to expressly assume and agreeto perform the Company’s obligations under this Agreement in the same mannerand to the same extent that the Company would be required to perform them if nosuch succession had taken place. Failure of the Company to obtain such assumption and agreement prior tothe effective date of any such succession shall be a breach of this Agreementand shall entitle Executives to compensation from the Company in the sameamount and on the same terms as they would be entitled to hereunder if they hadterminated their employment with the Company voluntarily for Good Reason.  Except for the purposes of implementing theforegoing, the date on which any such succession becomes effective shall bedeemed the Effective Date of Termination.

**             10.2     Assignmentby the Executive.** This Agreement shall inure to thebenefit of and be enforceable by the Executive’s personal or legalrepresentatives, executors, administrators, successors, heirs, distributees,devisees, and legatees.  If theExecutive dies (prior to receipt of all amounts due under Sections 4.3(a), (b),(d) or (e) and 4.8, all such amounts, unless otherwise provided herein, shallbe paid in accordance with the terms of this Agreement to the Executive’sBeneficiary.  If the Executive has notnamed a Beneficiary, then such amounts shall be paid to the Executive’s devisee,legatee, or other designee, or if there is no such designee, to the Executive’sestate.

**Article 11   **MISCELLANEOUS

**             11.1     EmploymentStatus.**  Except as may be provided underany other agreement between the Executive and the Company, the employment ofthe Executive by the Company is “at will,” and may be terminated by either theExecutive or the Company at any time, subject to applicable law.

**             11.2     Beneficiaries.**  TheExecutive may designate one or more persons or entities as the primary and/orcontingent Beneficiaries of any Severance Benefits owing to the Executive underthis Agreement.  Such designation mustbe in the form of a signed writing acceptable to the Committee.  The Executive may make or change suchdesignations at any time.

**             11.3     Severability.**  In theevent any provision of this Agreement shall be held illegal or invalid for anyreason, the illegality or invalidity shall not affect the remaining parts ofthe Agreement, and the Agreement shall be construed and enforced as if the illegalor invalid provision had not been included. Further, the captions of this Agreement are not part of the provisionshereof and shall have no force and effect.

**             11.4     Modification.** No provision of this Agreement may bemodified, waived, or discharged unless such modification, waiver, or dischargeis agreed to in writing and signed by the Executive and by the Company, or bythe respective parties’ legal representatives and successors.

**             11.5     EffectOn Prior Agreement.** This Agreement shall completelysupercede the Prior Agreement between the Company and the Executive and thePrior Agreement shall have no further force or effect.  BCBSUW shall be a third party beneficiary ofthis Section 11.5.

**             11.6     ApplicableLaw.** To the extent not preempted by thelaws of the United States, the laws of the state of Wisconsin shall be thecontrolling law in all matters relating to this Agreement.

             INWITNESS WHEREOF, the parties have executed this Agreement on this _____ day of___________________, 2001.

 

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