EX-10.5






Exhibit 10.5




AMENDMENT NO. 1 TO

EXECUTIVE EMPLOYMENT AGREEMENT




THIS AMENDMENT TO THE EXECUTIVE EMPLOYMENT AGREEMENT (this “Amendment”) by and between
AMERIGROUP CORPORATION, a Delaware corporation (the “Company”) and James G. Carlson (“Executive”),
is made as of November 6, 2008.



WHEREAS, the Company and Executive are parties to that certain Executive Employment Agreement
dated as of January 16, 2008 (the “Agreement”);



WHEREAS, the Company and Executive wish to amend the Agreement as set forth below to comply
with Section 409A of the Internal Revenue Code; and



WHEREAS, the Company and the Executive may amend the Agreement by a signed writing;



NOW, THEREFORE, the Agreement is hereby amended as follows:




	1.	 	The first sentence of Section 4(b)(i)(A) of the Agreement is hereby deleted in its entirety
and replaced with the following sentence:





Subject to Sections 4(b)(i)(B) and 4(d) hereof, in the event that (x) the Company
terminates Executive’s employment pursuant to Section 4(a)(i) (Without Cause), or (y)
Executive terminates his employment pursuant to Section 4(a)(iv) (For Changed
Circumstances), the Company shall, on the sixtieth (60th) day following
Executive’s effective date of termination, pay Executive a cash amount equal to the sum
of (aa) all Base Salary which has accrued as of the date of Executive’s termination and
is then unpaid and any cash bonus under Section 3(c) that has been awarded by the Board
and is then unpaid, (bb) the value (based on Executive’s then-current Base Salary) of
paid annual leave which has accrued through the effective date of Executive’s
termination and is then unused, and (cc) the Special Separation Payment (defined below).




	2.	 	Section 4(b)(i)(B) is hereby deleted in its entirety and replaced with the following:





Notwithstanding the foregoing, the Company’s obligation to pay Executive any amount in
respect of the Special Separation Payment shall be contingent upon Executive’s execution
and delivery (and, if applicable, timely non-revocation) of a Severance Agreement (with
terms that are not inconsistent with the terms of this Agreement) and the Company’s
standard form of general release within fifty-two (52) days following the date of
Executive’s termination of employment.




	3.	 	Section 4(b)(ii) of the Agreement is hereby deleted in its entirety and replaced with the
following:





In the event that Executive’s employment terminates pursuant to Section 4(a)(v) (Death
or Permanent Disability), the Company shall pay Executive or his estate the same amount
that is payable pursuant to Section 4(b)(i)(A), including the limitations applicable to
termination during the Protected Period (as defined in the Company’s Change in Control
Benefit Policy), provided (x) in the case of termination related to death, such amount
shall be reduced by all amounts payable to Executive’s beneficiaries pursuant to life
insurance policies on Executive’s life (group term or otherwise) maintained by the
Company, and shall be paid within thirty (30) days of Executive’s death (but not earlier
than the effective date of the release of claims described in clause (z) below), (y) in
the case of termination related to Executive being Permanently Disabled, such amount
shall be paid in full on the first day of the first month following the month in which
such termination became effective (but not earlier than the effective date of the
release of claims described in clause (z) below), provided such amount shall be reduced
by the present value as calculated by the Company using the prime rate (as announced by
the Company’s primary lending institution as of the date of determination of the
Permanent Disability) as the discount rate for such calculation, of any monthly
disability benefit that will be payable to Executive during the first twenty-four (24)
months of disability, under any disability insurance coverage provided to Executive by
the Company (group or individual), and (z) the Company’s obligation to pay Executive or
his estate any amount pursuant to this Section 4(b)(ii) shall be contingent upon
Executive’s (or his personal representative’s), or the personal representative of
Executive’s estate, execution and delivery to the Company of a Severance Agreement (with
terms that are not inconsistent with the terms of this Agreement) and the Company’s
standard form of general release within fifty-two (52) days following the date of
Executive’s termination of employment; provided, however, that if
Executive’s termination of employment because of death or Permanent Disability, as the
case may be, occurs after October during any year, payment shall be made not earlier
than the first day of the next following year.




	4.	 	Section 4(b)(v) of the Agreement is hereby deleted in its entirety and replaced with the
following:





Upon the effective date of any termination of Executive’s employment hereunder (without
regard to whether the termination constitutes a “separation from service” within the
meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)),
Executive shall be deemed to have resigned from the Board and any and all offices and
other positions held by Executive in the Company and/or any of its affiliates and upon
the Company’s request, Executive shall confirm such resignation in writing.




	5.	 	A new Section 4(d) is hereby added to the Agreement to read in its entirety as follows:





Conditions to Payment and Acceleration; Section 409A. The intent of the parties
is that payments and benefits under this Agreement comply with Section 409A of the Code
(“Section 409A”) to the extent subject thereto, and, accordingly, to the maximum extent
permitted, this Agreement shall be interpreted and administered to be in compliance
therewith. Notwithstanding anything contained herein to the contrary (other than as
expressly provided in Section 4(b)(v)), the Executive shall not be considered to have
terminated employment with the Company for purposes of this Agreement unless the
Executive would be considered to have incurred a “separation from service” from the
Company within the meaning of Section 409A. Each amount to be paid or benefit to be
provided under this Agreement shall be construed as a separate identified payment for
purposes of Section 409A, and any payments described in Section 4 of this Agreement that
are due within the “short term deferral period” within the meaning of Section 409A shall
not be treated as deferred compensation unless applicable law requires otherwise. If
current or future regulations or guidance from the Internal Revenue Service dictates, or
the Company’s counsel determines in accordance with applicable law or regulations, that
any payments or benefits due to the Executive hereunder would cause the application of
an accelerated or additional tax under Section 409A of the Internal Revenue Code,
amounts that would otherwise be payable and benefits that would otherwise be provided
pursuant to this Agreement during the six-month period immediately following the
Executive’s termination of employment shall instead be paid on the first business day
after the date that is six months following the Executive’s termination of employment
(or upon the Executive’s death, if earlier). To the extent required to avoid an
accelerated or additional tax under Section 409A, amounts reimbursable to Executive
under this Agreement shall be paid to Executive on or before the last day of the year
following the year in which the expense was incurred and the amount of expenses eligible
for reimbursement (and in-kind benefits provided to Executive) during any one year may
not effect amounts reimbursable or provided in any subsequent year; provided,
however, that with respect to any reimbursements for any taxes which Executive
would become entitled to under the terms of the Agreement, the payment of such
reimbursements shall be made by the Company no later than the end of the calendar year
following the calendar year in which Executive remits the related taxes.




	6.	 	This Amendment shall be governed by, interpreted under and construed in accordance with the
laws of the Commonwealth of Virginia.






	7.	 	Except as modified by this Amendment, the Agreement is hereby confirmed in all respects.





[signature page follows]





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IN WITNESS WHEREOF, this Amendment has been duly executed and delivered as of the date and the
year first written above.




AMERIGROUP CORPORATION,


a Delaware corporation



	 	 	 
	/s/ Stanley F. Baldwin

	 	

	 

	 	 
	By: Stanley F. Baldwin

	 	







Title: Executive Vice President, General Counsel

and Secretary




EXECUTIVE:



/s/ James G. Carlson




	 	 	JAMES G. CARLSON






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