EX-10.3






AMERIGROUP Corporation




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2005 Non-Employee Directors Deferred Compensation PlanTable of Contents




Page




	 	 	 
	Article 1 — Definitions

1.1

1.2

1.3

1.4

1.5

1.6

1.7

1.8

1.9

1.10

1.11

1.12

1.13

1.14

1.15

1.16

1.17

1.18

1.19

1.20

1.21

1.22

	 	

Annual Deferral

Beneficiary

Change of Control

Code

Company

Compensation

Continuous Service

Crediting Rate

Deferral Account

Deferral Commitment

Deferral Contribution Period

Deferral Contribution Period Benefit

Deferral Election Form

Deferred Compensation Committee

Director

ERISA

Participant

Plan

Plan Year

Separation from Service

Unforeseeable Emergency

Valuation Date







	 	 	 
	Article 2 - Participation

	 
	 	 
	2.1

2.2

	 	Deferral Election Form

Continuation of Participation







	 	 	 
	Article 3 - Deferral Commitments

	 
	 	 
	Article 4 - Deferral Accounts

	 
	 	 
	4.1

4.2

4.3

4.4

	 	Deferral Accounts

Statements of Account

Vesting of Deferral Accounts

Determining Balance of Deferral Account for Article 5 Payments







	 	 	 
	Article 5 - Payment of Benefits

	 
	 	 
	5.1

5.2

5.3

5.4

	 	Election of Time and Form of Payment

Separation from Service Payments

Change of Control

Unforeseeable Emergency Distributions







	 	 	 
	Article 6 — Death Benefits

	 	

	 
	 	 
	Article 7 - Conditions Related to Benefits

	 
	 	 
	7.1

7.2

7.3

7.4

	 	Nonassignability

No Right to Company Assets

Protective Provisions

Withholding







	 	 	 
	Article 8 - Administration of the Plan

	 
	 	 
	Article 9 - Beneficiary Designation

	 
	 	 
	9.1

9.2

9.3

	 	Beneficiary Designation

New Beneficiary Designation

Failure to Designate Beneficiary







	 	 	 
	Article 10 - Amendment and Termination of the Plan

	 
	 	 
	10.1

10.2

	 	Amendment of the Plan

Termination of the Plan







	 	 	 
	Article 11 - Miscellaneous

	 
	 	 
	11.1

11.2

11.3

11.4

11.5

11.6

11.7

11.8

	 	Successors of the Company

Compliance with Code Section 409A

Gender, Singular and Plural

Captions

Validity

Waiver of Breach

Applicable Law

Notice







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AMERIGROUP Corporation

2005 Non-Employee Directors Deferred Compensation Plan




AMERIGROUP Corporation, a Delaware corporation (the “Company”) hereby establishes the 2005
Non-Employee Directors Deferred Compensation Plan (the “Plan”), effective January 1, 2005 to
provide non-employee Directors of the Company with flexibility in timing the receipt of Board of
Directors service fees and to assist the Company in attracting and retaining qualified individuals
to serve as Directors.



ARTICLE 1 — Definitions





	 	1.1	 	Annual Deferral: shall mean the amount of Compensation which the Participant elects to defer
under the Deferral Commitment pursuant to Article 3 of the Plan.






	 	1.2	 	Beneficiary: shall mean the person or persons or entity designated as such in accordance with
Article 8 of the Plan.






	 	1.3	 	Change of Control: shall mean the cessation for any reason of the following individuals to
constitute a majority of the number of directors then serving: individuals who, on January 1,
2005 constitute the Board of Directors of the Company and any new director (other than a
director whose initial assumption of office is in connection with an actual or threatened
election contest, including but not limited to a consent solicitation, relating to the
election of directors of the Company) whose appointment or election by the Board of Directors
of the Company or nomination for election by the Company’s stockholders was approved or
recommended by a vote of at least two-thirds (2/3) of the directors then still in office who
either were directors on January 1, 2005 or whose appointment, election or nomination for
election was previously so approved or recommended.





1.4 Code: shall mean the Internal Revenue Code of 1986, as amended.



1.5 Company: shall mean AMERIGROUP Corporation and any successor(s) in interest.




	 	1.6	 	Compensation: shall mean a Director’s retainer fee for services as a Director during a
Deferral Computation Period.






	 	1.7	 	Continuous Service: shall mean the uninterrupted continuous employment of a Participant with
the Employer during the period from the Participant’s last date of hire by the Employer.






	 	1.8	 	Crediting Rate: shall mean certain investment alternatives designated by the Deferred
Compensation Committee from time to time for determining adjustments of amounts credited to
the Deferral Accounts of Participants. The Deferred Compensation Committee, in its sole
discretion, will establish administrative rules for applying the Crediting Rate.






	 	1.9	 	Deferral Account: shall mean the bookkeeping device used by the Company to measure and
determine the amounts to be paid to a Participant under the Plan.






	 	1.10	 	Deferral Commitment: shall mean a commitment made by a Participant to defer compensation
during a Deferral Contribution Period pursuant to Articles 2 and 3 of the Plan for which a
Deferral Election Form has been submitted by the Participant.






	 	1.11	 	Deferral Contribution Period: shall mean the period of one (1) Plan Year over which the
Participant has elected to defer Compensation pursuant to Article 3 of the Plan.






	 	1.12	 	Deferral Contribution Period Benefit: shall mean the portion of a Participant’s Deferral
Account attributable to his Annual Deferrals during a Deferral Contribution Period.






	 	1.13	 	Deferral Election Form: shall mean a written agreement between the Company and the
Participant, entered into pursuant to paragraph 2.1 of the Plan, by which the Participant
elects to participate in the Plan and make a Deferral Commitment.






	 	1.14	 	Deferred Compensation Committee: shall mean Management’s Benefits and Compensation Committee,
appointed by the Company to administer the Plan pursuant to Article 8 of the Plan.





1.15 Director: shall mean a non-employee Director of the Company.



1.16 ERISA: shall mean the Employee Retirement Income Security Act of 1974, as amended.




	 	1.17	 	Participant: shall mean a Director who is participating in the Plan as provided in Article 2
or for whom a Deferral Account is otherwise being maintained under the Plan.






	 	1.18	 	Plan: shall mean this 2005 Non-Employee Directors Deferred Compensation Plan as set forth in
this document and as the same may be amended, supplemented and/or restated from time to time
and any successor plan.





1.19 Plan Year: shall mean the 12-month period from January 1 through December 31.



1.20 Separation from Service: shall mean a Participant’s ceasing to be a Director.




	 	1.21	 	Unforeseeable Emergency: shall mean an unforeseeable emergency (within the meaning of Code
Section 409(A)(a)(2)(B)(ii)(I)), that is a severe financial hardship to the Participant
resulting from an illness or accident of the Participant, the Participant’s spouse, or a
dependent of the Participant (as defined in Code Section 152(a)); loss of the Participant’s
property due to casualty; or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of Participant.






	 	1.22	 	Valuation Date: shall mean (a) in the case of distributions pursuant to paragraph 5.3 of the
Plan, the last day of each calendar month; (b) in the case of all other distributions pursuant
to Plan, the last day of each Plan year calendar quarter, and (c) such other dates as the
Deferred Compensation Committee may determine in its discretion for the valuation of a
Participant’s Deferral Account.





ARTICLE 2 — Participation





	 	2.1	 	Deferral Election Form. Any Director may elect to participate in the Plan and to make a
Deferral Commitment by submitting a Deferral Election Form to the Deferred Compensation
Committee prior to the beginning of the Deferral Contribution Period. Except as otherwise
provided in this Plan, the Participant’s Deferral Commitment shall be irrevocable.






	 	2.2	 	Continuation of Participation. A Participant who has elected to participate in the Plan by
making a Deferral Commitment shall continue as a Participant in the Plan for purposes of such
Deferral Commitment until the balance of the Participant’s Deferral Account is paid to him
pursuant to the Plan. A Participant shall not be eligible to make a new Deferral Commitment
unless the Participant is a Director with respect to the Plan Year for which the election is
made.





ARTICLE 3 — Deferral Commitments




	 	 	 
	A Participant may elect to defer up to 100% of his Compensation.

	 
	 	 
	ARTICLE 4

	 	- Deferral Accounts








	 	4.1	 	Deferral Accounts. A Deferral Account shall be established for each Participant. The
Deferral Account shall be credited with the applicable portion of the Annual Deferral as of
the approximate date such amounts would otherwise have been paid to the Participant. Deferral
Accounts shall, except as otherwise provided in the Plan, be adjusted for investment
experience according to the Crediting Rate, as in effect from time to time, until all benefits
attributable to the Participant’s Deferral Account have been paid. Notwithstanding anything
in this paragraph to the contrary, the Deferred Compensation Committee may, in its sole
discretion, establish administrative rules for the purpose of crediting and adjusting Deferral
Accounts.






	 	4.2	 	Statements of Account. The Deferred Compensation Committee shall provide periodically (but
no less frequently than annually) to each Participant a statement setting forth the balance of
the Deferral Account maintained for such Participant.






	 	4.3	 	Vesting of Deferral Accounts. Each Participant shall be one hundred percent (100%) vested at
all times in the adjusted balance of the Participant’s Deferral Account.






	 	4.4	 	Determining Balance of Deferral Account for Article 5 Payments. For purposes of the payment
of benefits attributable to a Participant’s Deferral Account pursuant to Article 5, the
balance of the Participant’s Deferral Account shall be determined as of the Valuation Date
immediately preceding the date of payment.





ARTICLE 5 — Payment of Benefits





	 	5.1	 	Election of Time and Form of Payment. Except as provided in paragraph 5.2 of the Plan with
respect to certain Separation from Service payments, in paragraph 5.4 of the Plan with respect
to Unforeseeable Emergency distributions, and in Article 6 of the Plan with respect to death
benefits, a Participant’s Deferral Contribution Period Benefit shall be paid to the
Participant as specified in the Participant’s Deferral Election Form relating to the
applicable Deferral Contribution Period. A Participant may elect to receive a lump sum
payment of his Deferral Contribution Period Benefit, which shall be made either (a) during
(and not earlier than) January of a chosen year that is at least five (5) years after the end
of the Deferral Contribution Period in which the contribution was made; or (b) within ninety
(90) days after the end of the calendar quarter in which the Participant’s Separation from
Service occurs. Any such election shall be irrevocable






	 	5.2	 	Separation from Service Payments. In the event of a Participant’s Separation from Service
with the Company prior to a date elected pursuant to paragraph 5.1(a) of the Plan, the Company
shall pay to the Participant the related Deferral Contribution Period Benefit(s) in the form
of a lump sum payment, which shall be made within ninety days (90) days after the end of the
calendar quarter in which the Participant’s Separation from Service occurs.






	 	5.3	 	Change of Control. In the event a Change of Control occurs, the Employer shall pay to all
Participants with Deferral Accounts under the Plan the related Deferral Contribution Period
Benefit(s) in the form of a lump sum payment. The payment shall be made as soon as
practicable after the Valuation Date coincident with or next following the date on which the
Change of Control occurs.






	 	5.4	 	Unforeseeable Emergency Distributions. At the sole discretion of the Deferred Compensation
Committee, in the case of a Participant who incurs an Unforeseeable Emergency, the Deferred
Compensation Committee may direct the Company to pay all or a portion of the Participant’s
benefits attributable to his Deferral Account to or on behalf of the Participant to alleviate
the Unforeseeable Emergency. In no event, however, shall the amount of the payment exceed the
amounts necessary to satisfy the Unforeseeable Emergency plus amounts necessary to pay taxes
reasonably anticipated as a result of the payment, after taking into account the extent to
which the hardship is or may be relieved through reimbursement or compensation by insurance or
otherwise or by liquidation of the Participant’s assets (to the extent the liquidation of the
assets would not itself cause severe financial hardship). In the event that a payment is made
to a Participant on account of Unforeseeable Emergency pursuant to this paragraph 5.4, the
Participant’s Annual Deferrals under the Plan shall be suspended for the remainder of the
Deferral Contribution Period in which the Participant received the payment on account of
Unforeseeable Emergency.





ARTICLE 6 — Death Benefits




Lump Sum Death Benefit. If a Participant dies prior to Separation from Service or after Separation
from Service but before the balance of the Participant’s Deferral Account has been paid, the
Company shall pay the balance of the Participant’s Deferral Account to the Participant’s
Beneficiary in a lump sum within ninety (90) days after the end of the calendar quarter in which
the death of the Participant occurs.



ARTICLE 7 — Conditions Related to Benefits





	 	7.1	 	Nonassignability. The benefits provided under the Plan may not be alienated, assigned,
transferred, pledged or hypothecated by or to any person or entity, at any time or in any
manner whatsoever. No Participant or Beneficiary may borrow from or against the Participant’s
Deferral Account. These benefits shall be exempt from the claims of creditors or other
claimants of any Participant or Beneficiary and from all orders, decrees, levies, garnishment
or executions against any Participant or Beneficiary to the fullest extent allowed by law.






	 	7.2	 	No Right to Company Assets. The benefits paid under the Plan shall be paid from the general
funds of the Company, and the Participant and any Beneficiary shall be no more than unsecured
general creditors of the Company with no special or prior right to any assets of the Company
for payment of any obligations hereunder. A Participant’s Annual Deferrals, as adjusted
pursuant to the Crediting Rates, shall remain solely the property of the Company, subject to
the claims of the Company’s general creditors, until distributed to the Participant or the
Participant’s Beneficiary in accordance with the terms of the Plan.






	 	7.3	 	Protective Provisions. The Participant shall cooperate with the Company by furnishing any
and all information requested by the Deferred Compensation Committee in order to facilitate
the payment of benefits hereunder and by taking such physical examinations and other actions
as the Deferred Compensation Committee may deem necessary and request in connection with the
administration of the Plan. If the Participant refuses to cooperate or makes any material
misstatement or nondisclosure of information, then no benefits will be payable hereunder to
such Participant or his Beneficiary.






	 	7.4	 	Withholding. The Participant or the Beneficiary shall make appropriate arrangements with the
Company for satisfaction of any federal, state or local tax withholding requirements
applicable to the payment of benefits under the Plan. If no such arrangements are made, the
Company may provide, at its discretion, for such withholding and tax payments as may be
required.





ARTICLE 8 — Administration of the Plan




The Deferred Compensation Committee shall administer the Plan and interpret, construe and apply its
provisions in accordance with its terms. The Deferred Compensation Committee shall determine in
its sole discretion those who are eligible to participate in the Plan and shall have the right to
set guidelines for participation under the Plan including, but not limited to, the type, manner and
level of Deferral Commitments. The Deferred Compensation Committee shall further establish, adopt
or revise such other rules and regulations as it may deem necessary or advisable for the
administration of the Plan. All decisions of the Deferred Compensation Committee shall be final
and binding. The individuals serving on the Deferred Compensation Committee shall, except as
prohibited by law, be indemnified and held harmless by the Company from any and all liabilities,
costs, and expenses (including legal fees), to the extent not covered by liability insurance,
arising out of any action taken by any member of the Deferred Compensation Committee with respect
to the Plan, unless such liability arises from the individual’s own gross negligence or willful
misconduct.



ARTICLE 9 — Beneficiary Designation





	 	9.1	 	Beneficiary Designation. The Participant shall have the right, at any time, to designate any
person or persons as a Beneficiary (both primary and contingent) to whom payment under the
Plan shall be made in the event of the Participant’s death. The Beneficiary designation shall
be effective when it is submitted in writing and delivered to the Deferred Compensation
Committee during the Participant’s lifetime on a form prescribed by the Deferred Compensation
Committee.






	 	9.2	 	New Beneficiary Designation. The Participant shall have the right to change or revoke any
such designation from time to time by filing a new designation or notice of revocation with
the Company, and no notice to any Beneficiary nor consent by any Beneficiary shall be required
to effect any such change or revocation.






	 	9.3	 	Failure to Designate Beneficiary. If a Participant fails to designate a Beneficiary before
his death, or if no designated Beneficiary survives the Participant, the Deferred Compensation
Committee shall direct the Company to pay the balance of the Participant’s Deferral Account in
a lump sum to the Participant’s surviving spouse, if any, or if there is no surviving spouse,
then to the estate of the Participant; provided, however, in the event payment is to be made
to the Participant’s estate, if no executor or administrator shall have been appointed, and
actual notice of the death was given to the Deferred Compensation Committee within sixty (60)
days after the Participant’s death, and if his Account balance does not exceed ten thousand
dollars ($10,000), the Deferred Compensation Committee may direct the Company to pay the
Deferral Account balance to such person or persons as the Deferred Compensation Committee
determines may be entitled to it, and the Deferred Compensation Committee may require such
proof of right and/or identity of such person or persons as the Deferred Compensation
Committee may deem appropriate and necessary.





ARTICLE 10 — Amendment and Termination of the Plan





	 	10.1	 	Amendment of the Plan. The Company may at any time amend the Plan in whole or in part,
prospectively or retroactively; provided however, that such amendment (i) shall not decrease
the vested balance of any Participant’s Deferral Account at the time of such amendment and
(ii) shall not retroactively change the applicable Crediting Rates of the Plan that were in
effect prior to the time of such amendment. The Company or Deferred Compensation Committee
may amend the Crediting Rates of the Plan prospectively and in that event shall notify the
Participants of such amendment in writing within thirty (30) days of such amendment.






	 	10.2	 	Termination of the Plan. The Company may at any time terminate the Plan as to all or any
group of Participants provided, however, that no payments under the Plan shall be made to the
Participants after any such termination unless and until payment is permissible under Code
Section 409A.





ARTICLE 11 — Miscellaneous





	 	11.1	 	Successors of the Company. The rights and obligations of the Company under the Plan shall
inure to the benefit of, and shall be binding upon, the successors and assigns of the Company.






	 	11.2	 	Compliance with Code Section 409A. The Plan is intended to comply with the provisions of
Code Section 409A so as to defer taxation of the amounts deferred hereunder until the time of
payment, and the Plan shall be construed and administered in accordance with this intention.






	 	11.3	 	Gender, Singular and Plural. All pronouns and variations thereof shall be deemed to refer to
the masculine or feminine, as the identity of the person or persons may require. As the
context may require, the singular may be read as the plural and the plural as the singular.






	 	11.4	 	Captions. The captions of the articles and paragraphs of the Plan are for convenience only
and shall not control or affect the meaning or construction of any of its provisions.






	 	11.5	 	Validity. In the event any provision of the Plan is held invalid, void or unenforceable, the
same shall not affect, in any respect whatsoever, the validity of any other provisions of the
Plan.






	 	11.6	 	Waiver of Breach. The waiver by the Company of any breach of any provision of the Plan by
the Participant shall not operate or be construed as a waiver of any subsequent breach by the
Participant.






	 	11.7	 	Applicable Law. The Plan shall be governed and construed in accordance with the laws of the
Commonwealth of Virginia.






	 	11.8	 	Notice. Any notice or filing required or permitted to be given to the Company under the Plan
shall be sufficient if in writing or hand-delivered, or sent by registered or certified mail,
return receipt requested, to the principal office of the Company, directed to the attention of
the Deferred Compensation Committee. Such notice shall be deemed given as of the date of
delivery, or if delivery is made by mail, as of the date shown on the postmark on the receipt
for registration or certification.





IN WITNESS WHEREOF, the Company has caused this Plan to be executed effective as of the 1st day of
January, 2005.




AMERIGROUP Corporation




By:



Title:




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