EX-10.1






SEPARATION AGREEMENT AND GENERAL RELEASE




This SEPARATION AGREEMENT AND GENERAL RELEASE (“Separation Agreement”) is made between E. Paul
Dunn, Jr. (“Associate”) and AMERIGROUP Corporation, its subsidiaries, successors, affiliates and
assigns (referred to herein, collectively and individually, as “AMERIGROUP”).



A. REASONS FOR AGREEMENT




1. Inasmuch as AMERIGROUP and Associate have agreed to mutual termination of Associate’s
employment with AMERIGROUP effective as of the close of business on November 10, 2005 (the “End
Date”).



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



B. AGREEMENT




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



1. Special Separation Package


(a) On the first payroll date following the eighth (8th) day after Associate executes
this Agreement, and provided that Associate has not revoked this Agreement as provided in Paragraph
B.5.(a)(iv), below, and provided that Associate has not breached this Agreement, AMERIGROUP will
(i) provide Associate with a Lump Sum Payment in the amount of $120,000, (ii) payment of all
accrued and unpaid Paid Annual Leave in accordance with AMERIGROUP’s policy, and (iii) shall
initiate payment to Associate of an amount equal to Associate’s base annual salary, to wit,
$329,600.00, payable on the regular biweekly payroll cycle (the “Severance Payments”) for the
period beginning on the End Date, and ending at the close of business on November 9, 2006 (the
“Severance Period”).



(b) All amounts payable in Paragraph B.1.(a) above shall be less all applicable statutory
withholding taxes.



(c) AMERIGROUP will pay the reasonable legal fees incurred by Associate with respect to the
negotiation of this Separation Agreement and legal fees incurred with respect to the separate
representation of Associate relating to matters that arose during Associate’s employment with
AMERIGROUP, in an amount not to exceed $55,000 in the aggregate, upon receipt by AMERIGROUP of
proper documentation thereof.



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



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



(f) Associate acknowledges that Associate’s employment with AMERIGROUP ceased effective as of the
close of business on the End Date.



(g) Associate understands that Associate has no obligation to sign this Separation Agreement. If
Associate chooses not to sign this Separation Agreement, AMERIGROUP will pay Associate the
compensation that Associate has earned through the date of Associate’s termination, and the
aforementioned accrued and unpaid Paid Annual Leave, less applicable statutory withholding taxes.
Similarly, even if Associate does not sign this Separation Agreement, Associate will be offered
benefits to which Associate is entitled under the Consolidated Omnibus Budget Reconciliation Act of
1985 (“COBRA”), and Associate shall retain all vested benefits under AMERIGROUP’s 401(k) Plan, and
all other applicable benefit plans that former AMERIGROUP associates would normally retain after
termination of their employment.



(h) As of the End Date, options shall cease to vest under any applicable Stock Option Agreements.



2. General Release


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



3. Claims and Actions


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



(b) This Separation Agreement does not waive any rights or claims that Associate may have as to
any of (i) Associate’s rights or claims which arise after the date the Associate signs this
Separation Agreement, (ii) Associate’s right’s or claims to indemnification under Associate’s
Indemnification Agreement with AMERIGROUP, dated November 19, 2004 (the “Indemnification
Agreement”), AMERIGROUP’s By-Laws, AMERIGROUP’s Amended and Restated Certificate of Incorporation,
and applicable law, or (iii) Associate’s rights and claims as an insured under any applicable
AMERIGROUP director’s and officer’s liability insurance policy.



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



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



4. Confidentiality and Cooperation


(a) Associate will not divulge or give to anyone any proprietary or confidential information
concerning AMERIGROUP’s business or affairs, employees and services obtained by Associate during
Associate’s employment, nor will Associate use such proprietary or confidential information in any
manner that is detrimental to the interest of AMERIGROUP.



(b) The circumstances of Associate’s separation from employment shall be deemed a termination
without cause and not a “for cause” termination under Section 10 of the Employee Noncompetition,
Nondisclosure and Developments Agreement, dated November 18, 2004, (the “ Nondisclosure Agreement”)
or Section 5 of either the Incentive Stock Option Agreement between AMERIGROUP and Associate dated
November 9, 2004, or the Nonqualified Stock Option Agreement between AMERIGROUP and Associate,
dated February 9, 2005, issued pursuant to the 2003 Equity Incentive Plan. Accordingly, Associate
is released from the restrictions contained in Paragraph 1. of the Nondisclosure Agreement.
Notwithstanding the foregoing, Associate shall continue to comply with all other terms of the
Nondisclosure Agreement, the above-referenced Incentive and Nonqualified Stock Option Agreements,
and agrees and understands that the other restrictions contained in those agreements survive
execution of this Separation Agreement and Associate’s termination of employment.



(c) Associate affirms that he has returned all of AMERIGROUP’s property in Associate’s possession,
control or custody including, but not limited to, Associate’s security badge, keys, files, member
lists, mailing lists, provider lists, account information, samples, prototypes, price lists and
pricing information, passwords, codes, and all of the tangible and intangible property belonging to
AMERIGROUP and relating to Associate’s employment with AMERIGROUP. Associate further represents
and warrants that Associate has not retained any copies, electronic or otherwise, of such property.



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



(e) Associate agrees not to enter AMERIGROUP’s premises after the End Date, without the prior
express approval of an authorized officer.



(f) Following the End Date, Associate shall make himself available to AMERIGROUP and its counsel
to assist AMERIGROUP and its counsel at mutually convenient times and places with respect to
pending and future litigations, arbitrations, governmental investigations or other dispute
resolutions relating to matters that arose during Associate’s employment with AMERIGROUP, including
without limitation, the actions captioned Nieves v. AMERIGROUP Corp., Civil Action No: 2:05 cv 578
(E.D. Va.), Pearson v. AMERIGROUP Corp., Civil Action No. 2:05 cv 591 (E.D. Va.), Murphey v.
AMERIGROUP Corp., Civil Action No. 2:05 cv 600 (E.D. Va.) and Kling v. AMERIGROUP Corp., Civil
Action No. 2:05 cv 601 (E.D. Va.). Such assistance includes without limitation the execution of
affidavits, declarations and documents, the provision of information requested by AMERIGROUP or its
counsel and, if necessary, the provision of testimony at deposition or trial, all of which shall be
truthful to the best of Associate’s knowledge. Reasonable out-of-pocket expenses related to such
assistance will be reimbursed or advanced by AMERIGROUP, in accordance with the provisions of the
Indemnification Agreement. To the extent that any provision of this Separation Agreement is
inconsistent with any term of the Indemnification Agreement, the terms of Indemnification Agreement
shall control..



5. Special ADEA Waiver and Release Notification


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




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






	 	(ii)	 	advised to consult with an attorney and/or other advisor concerning Associate’s
rights and obligations under this Separation Agreement prior to Associate’s execution
of it. Associate understands that whether or not to do so is Associate’s decision.
Associate agrees, however, that except as provided in B.1.(c), AMERIGROUP shall not be
required to pay any of Associate’s attorney’s fees related to this matter; and






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






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





6. Confirmation of Corporate Compliance


Associate acknowledges that Associate will not be eligible to receive the benefits described in the
Special Separation Package Paragraph B.1.(a) if Associate is found to have committed or condoned
during Associate’s employment any acts of fraud against AMERIGROUP or fraud against the government.
Associate hereby confirms that: Associate has not committed or condoned any such fraudulent
activity; Associate has, to the best of his knowledge, complied with AMERIGROUP’s Code of Business
Conduct and Ethics (the “Code of Ethics”) during Associate’s employment; Associate has not
participated in or knowingly permitted others to engage in any conduct prohibited by the Code of
Ethics; Associate understands that Associate has a duty under the Code of Ethics to notify
AMERIGROUP’s designated Compliance Officer of any knowledge of violation of such Code of Ethics;
and Associate is not aware of any such violation by Associate or anyone else employed by
AMERIGROUP. Associate confirms that Associate has complied with the duties and obligations
outlined in this Paragraph B.6.and Associate acknowledges that such compliance is a condition to
Associate’s eligibility to receive the benefits described in the Special Separation Package.



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7. Nonpiracy of Employees


Associate agrees that during for the 12-month period starting on the End Date, Associate will not
directly or knowingly indirectly, on behalf of Associate or any other entity or person, solicit,
try to hire, hire, refer for hire, or assist in hiring any personnel employed on the End Date by
AMERIGROUP or AMERIGROUP’s subsidiaries.



8. Nondisparagement


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



9. No Admission


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



10. Non-Disclosure


Until such time as this Separation Agreement is made public by AMERIGROUP, Associate agrees to keep
the terms, amount and fact of this Separation Agreement completely confidential, and that Associate
will not disclose any information concerning this Separation Agreement to anyone other than
Associate’s immediate family and lawyer(s) and/or other professional advisors, who will be informed
of and bound by this confidentiality clause.



11. No Waiver of Breach or Remedy


A waiver by either party of the breach of any of the provisions of this Separation Agreement by
either party shall not be deemed a waiver by the other party of any subsequent breach, nor shall
recourse to any remedy hereunder be deemed a waiver of any other or further relief or remedy
provided for herein.




	 	12.	 	Severability





Except as otherwise specified below, should any portion of this Separation Agreement be found void
or unenforceable for any reason by a court of competent jurisdiction, the court should attempt to
limit or otherwise modify such provision so as to make it enforceable, and if such portion cannot
be modified to be enforceable, the unenforceable portion shall be deemed severed from the remaining
portions of this Separation Agreement, which shall otherwise remain in full force and effect. If
any portion of this Separation Agreement is so found to be void or unenforceable for any reason in
regard to any one or more persons, entities, or subject matters, such portion shall remain in full
force and effect with respect to all other persons, entities, and subject matters. This Paragraph
B.12. shall not operate, however, to sever Associate’s obligation to provide a full and binding
release of claims to AMERIGROUP from Associate’s entitlement to the payments pursuant to Paragraph
B.1.(a), which shall be recoverable from Associate in the event such release of claims is found to
be void or unenforceable in any material respect. In the event Associate should in the future
contend that the release of claims contained in Paragraph B.2. and B.5. of this Separation
Agreement is for any reason void, imperfect or incomplete, Associate may not pursue any claim
against AMERIGROUP to establish the invalidity of the releases, or premised (in whole or in part)
on the invalidity of the releases, before or without the repayment of all amounts paid to Associate
pursuant to Paragraph B.1.(a) of this Separation Agreement, and applicable statutes of limitations
shall be deemed to run in regard to Associate’s claims without regard to the parties’ entry into
this Separation Agreement. The preceding sentence shall not operate to limit the scope or effect
of Associate’s promise not to sue.



13. Entire Agreement


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



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



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



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



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



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



14. Agreement Binding


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



15. Violation by Associate


In the event that Associate violates any material term of this Separation Agreement, ( it being
understood that a violation of Paragraphs B.2. B.3.(a) B.3.(c), B.4.(a), B.4.(c), B.4.(e),
B.4.(f),, B.6.,B.7, or B. 8 shall be deemed to be “material”), AMERIGROUP shall have the right to
terminate any or all of its commitments herein and to recover any monies or other considerations
previously provided to Associate and to pursue any other remedies available to AMERIGROUP. It
being understood that an unintentional or inadvertent de minimus violation of Paragraph B.4.(c)
shall not be deemed to be a violation of a material term of this Separation Agreement.



16. Voluntary


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



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



17. Choice of Law


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



18. Section Headings


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



19. No Third Party Rights


This Separation Agreement is entered into solely between AMERIGROUP and Associate and shall not be
deemed to create any rights in any third parties or to create any obligations of AMERIGROUP to any
third party.



20. Non-Parties


The officers, directors, employees, shareholders and representatives of AMERIGROUP are not parties
to this Separation Agreement and shall have no obligation or liability relating to this Separation
Agreement.



21. Counterparts


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



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



E. Paul Dunn, Jr. AMERIGROUP Corporation



(SEAL)     By:     



E. Paul Dunn, Jr. Catherine S. Callahan



Executive Vice President, Associate Services



WITNESS: WITNESS:



     




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