Document:

EX-10.2

AMERIGROUP CORPORATION

2005 EQUITY INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AGREEMENT

This Nonqualified Stock Option Agreement (the “Option Agreement”) is made and entered into as
of      , 200     (the “Date of Grant”), by and between AMERIGROUP Corporation, a Delaware
corporation (the “Company”), and      (the “Optionee”). Capitalized terms not defined
herein shall have the meaning ascribed to them in the Company’s 2005 Equity Incentive Plan (the
“Plan”).

1. Number of Shares. The Company hereby grants to Optionee an option (this “Option”)
to purchase      Shares (the “Option Shares”) at an Exercise Price per Share of $     ,
subject to all of the terms and conditions of this Option Agreement and the Plan.

2. Option Term. The term of the Option (the “Option Term”) shall commence on the Date
of Grant set forth above and, unless the Option is previously terminated pursuant to Section 5
below, shall terminate on the [ ] anniversary thereof (the “Expiration Date”). As of the
Expiration Date, all rights of Optionee hereunder shall terminate.

3. Conditions of Exercise.

[If granted pursuant to AMERIGROUP’s Bonus Plan]

(a) Subject to Section 5 below, the Option shall become vested on the Date of Grant as to
     percent (     %) of the Option Shares, as to an additional      percent (     %) of the
Option Shares on April 1, 200     and as to an additional      percent (     %) of the Option
Shares quarterly thereafter, such that the Option shall become fully (100%) vested on
     , 200_.

[If granted other than under AMERIGROUP’s Bonus Plan]

(a) Subject to Section 5 below, the Option shall become vested as to      of the
Option Shares on the first anniversary of the Date of Grant, and as to an additional      of
the Option Shares quarterly thereafter, such that the Option shall become fully (100%) vested on
     .

(b) Prior to the Expiration Date, this Option may, subject to Section 5 below, be exercised in
whole or in part at any time, but only as to Option Shares that have vested. Without limiting
Section 5, if Optionee’s employment or service with the Company and all Subsidiaries and Affiliates
terminates, then from and after such Termination Date (as defined in Section 5 below), this Option
may be exercised only with respect to Option Shares that have vested as of the Termination Date and
only as expressly permitted pursuant to Section 5.

(c) This Option may not be exercised for a fraction of a share.

4. Method of Exercise of Option.

(a) The Option may be exercised by delivering to the Company an executed stock option exercise
agreement in the form attached hereto as Exhibit A, or in such other form as may be
approved by the Administrator from time to time (the “Exercise Agreement”), which shall set forth,
inter alia, (i) Optionee’s election to exercise the Option and (ii) the number of
vested Option Shares being purchased, and payment in full of the aggregate Exercise Price of such
Option Shares. If someone other than Optionee exercises the Option, then such person must submit
documentation reasonably acceptable to the Company verifying that such person has the legal right
to exercise the Option.

(b) The Option may not be exercised unless such exercise is in compliance with all applicable
federal and state securities law, as they are in effect on the date of exercise.

(c) Payment of the aggregate Exercise Price for Option Shares being purchased and any
applicable withholding taxes may be made (i) in cash or by check, (ii) to the extent permitted by
applicable law, by means of a cashless exercise procedure through a broker acceptable to the
Administrator, (iii) through delivery of unrestricted Shares already owned by Optionee for more
than six months on the date of surrender, to the extent the shares have an aggregate Fair Market
Value on the date of surrender equal to the aggregate Exercise Price of the Shares as to which such
Option shall be exercised, or (iv) by any other means of exercise authorized from time to time by
the Administrator.

5. Effect of Termination of Employment or Service, Change in Control and Disabling
Conduct.

(a) Termination of Employment or Service Generally.

(i) Upon the termination of Optionee’s employment or service with the Company and all
Subsidiaries and Affiliates, the Option shall immediately terminate as to any Option Shares that
have not previously vested as of the date of such termination (the “Termination Date”).

(ii) Any portion of the Option that has vested as of the Termination Date shall be exercisable
in whole or in part for a period of 90 days following the Termination Date (the “Post-Termination
Exercise Period”) unless Optionee has been terminated for Cause or engaged in Disabling Conduct
(defined below); provided, in no event may the Option be exercised after the Expiration
Date.

(iii) In the event of termination by reason of Optionee’s death or Disability, the
Post-Termination Exercise Period shall extend until the date that is six months from the
Termination Date; provided, in no event may the Option be exercised after the Expiration
Date.

(iv) Upon the expiration of the Post-Termination Exercise Period any unexercised portion of
the Option shall terminate in full (whether or not then exercisable).

(b) Termination for Cause; Disabling Conduct.

(i) The Option shall terminate in full (whether or not then exercisable) immediately upon the
termination of Optionee’s employment with the Company or any Subsidiary or Affiliate for Cause.

(ii) The Option also shall terminate in full (whether or not then exercisable) immediately if
Optionee engages in Disabling Conduct.

[At the discretion of the Administrator, either]

(c) Change in Control. For purposes of Section 5(a) above, any portion of the Option
that has not previously vested shall be deemed fully vested if Optionee’s employment or service
with the Company or any Subsidiary or Affiliate is terminated by the Company or any Subsidiary or
Affiliate or any successor entity for any reason (other than for Cause or as a result of Disabling
Conduct) within two years following a Change in Control or if Optionee terminates employment or
service with the Company or any Subsidiary or Affiliate within two years following the Change in
Control and after there is a material adverse change in the nature or status of Optionee’s duties
or responsibilities from those in effect immediately prior to the Change in Control.

[or]

(c) Change in Control. Any portion of the Option that has not previously vested shall
become fully vested upon a Change in Control.

(d) Definition of Disabling Conduct. As used herein, “Disabling Conduct” shall mean
conduct involving a breach of the covenants made in Section 6 below.

6. Covenant Not to Compete.

(a) In consideration for the grant of the Option, and as a material condition to the grant,
Optionee hereby expressly agrees as follows:

(i) Optionee will act in the best interests of the Company and its Subsidiaries and Affiliates
(each, an “AMERIGROUP Company” and collectively, the “AMERIGROUP Companies”) throughout the period
of Optionee’s employment with any of the AMERIGROUP Companies; and

(ii) at all times while employed by any AMERIGROUP Company and at all times during the Covered
Post-Employment Period (defined below), Optionee will not (A) compete with any AMERIGROUP Company
by serving a Competitor (defined below) in any managerial capacity, or in any capacity that
influences business strategy, with respect to a Covered Product or Service (defined below) that the
Competitor is offering in a Covered Area (defined below) or developing to offer in a Covered Area,
or (B) solicit for employment, interfere with the employment relationship of or endeavor to entice
away any employee of any AMERIGROUP Company.

(b) As used herein,

(i) The “Covered Post-Employment Period” means the twelve (12) month period beginning on the
first day on which Optionee is no longer employed by any AMERIGROUP Company as a result of
Optionee’s resignation or termination for Cause and ending on the first anniversary of such date.
(In the event the Company terminates Optionee without Cause, there shall not be a Covered
Post-Employment Period.)

(ii) “Competitor” means any entity or person that provides or is planning to provide a Covered
Product or Service in competition with a Covered Product or Service that an AMERIGROUP Company is
actively developing, marketing, providing or selling.

(iii) “Confidential Information” means an AMERIGROUP Company’s material non-public information
concerning its business and affairs, including, without limitation, trade secrets, strategies,
business plans, marketing and advertising plans, member and provider information, employee and
personnel information, contracts, training manuals, financial projections, budgets and non-public
financial data (including, without limitation, statements with premium revenue and/or provider
compensation terms, reports of actuaries, medical loss reports, balance sheets and income
statements).

(iv) A “Covered Product or Service” shall mean a managed health care product or service
offered or provided to any beneficiary of and/or participant in any Medicaid, Medicaid-related, or
SSI program, any government-funded children’s health insurance program or any federal and/or state
sponsored health care program that is substantially similar to any of such programs.

(v) The “Covered Area” shall consist of each city, county and other similar governmental
territory in which an AMERIGROUP Company provides or has made material efforts to develop and
provide a Covered Product or Service to its members, if in the course of Optionee’s employment with
an AMERIGROUP Company he or she (A) has provided services to an AMERIGROUP Company with respect to
the Covered Products or Services in such city, county or governmental territory, or (B) reviewed or
discussed Confidential Information of an AMERIGROUP Company with respect to the Covered Product or
Service in such city, county or governmental territory.

(c) Optionee agrees that any breach by Optionee of the covenants made in Section 6(a) above
may cause irreparable damage to one or more of the AMERIGROUP Companies and that in the event of
such breach each AMERIGROUP Company shall have, in addition to any and all remedies of law, the
right to an injunction, specific performance or other equitable relief to prevent the violation of
Optionee’s obligations hereunder. Optionee agrees that any such AMERIGROUP Company may seek and
obtain injunctive relief without posting an injunction bond. Optionee hereby acknowledges and
agrees that Optionee will have access to confidential and proprietary information and trade secrets
concerning the AMERIGROUP Companies during Optionee’s employment and that the covenants in Section
6(a) are reasonable in scope and necessary to protect the legitimate business interests of the
AMERIGROUP Companies. Optionee hereby further expressly acknowledges and agrees that each
AMERIGROUP Company is an express third party beneficiary of the terms of this Agreement. (For the
avoidance of doubt, Optionee acknowledges and agrees that the experience and/or knowledge that
Optionee acquires in the course of his or her employment with an AMERIGROUP Company may relate not
only to the Covered Products and Services of the AMERIGROUP Company with which he or she is
employed, but also those of other AMERIGROUP Companies.)

7. Adjustments. In the event of any Change in Capitalization, the Administrator shall
take such actions pursuant to Section 5 of the Plan (including the provisions thereof relating to
the cancellation of Awards in exchange for a payment in cash or other property) as it deems
appropriate.

8. Certain Changes. The Administrator may accelerate the date on which the Option
becomes exercisable, waive or amend the operation of the provisions of this Agreement respecting
exercise after termination of employment or otherwise adjust any of the terms of the Option,
provided that no action under this Section 8 shall adversely affect Optionee’s rights
hereunder without the consent of Optionee.

9. Nontransferability of Option. Except under the laws of descent and distribution,
Optionee shall not be permitted to sell, transfer, pledge or assign the Option or this Option
Agreement; provided that subject to such terms and conditions as the Administrator may
establish, Optionee shall be permitted to transfer this Option to a trust controlled by Optionee
during Optionee’s lifetime for estate planning purposes or to make a gift of this Option to an
Immediate Family Member. Unless transferred pursuant to the preceding sentence, the Option shall
be exercisable, during Optionee’s lifetime, only by Optionee. Without limiting the generality of
the foregoing, except as otherwise provided herein, the Option may not be assigned, transferred,
pledged or hypothecated in any way, shall not be assignable by operation of law, and shall not be
subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of the Option contrary to the provisions hereof, and the levy of
any execution, attachment or similar process upon the Option shall be null and void and without
effect.

10. Notices. All notices and other communications under this Agreement shall be in
writing and shall be given by facsimile or first class mail, certified or registered with return
receipt requested, and shall be deemed to have been duly given three days after mailing or 24 hours
after transmission by facsimile to the respective parties named below:

	 	 	 	 	 
	If to the Company:
	 	AMERIGROUPCorporation

	 
	 	4425 Corporation Lane
	 
	 	Virginia Beach, VA 23462

	 
	 	Facsimile: (757) 557-6743

	 
	 	Attn: Stanley F. Baldwin

	If to Optionee:
	 	 	—	 

Facsimile:

Either party hereto may change such party’s address for notices by notice duly given pursuant
hereto.

11. Tax Consequences. The tax laws and regulations applicable to the exercise of the
Option and the disposition of the Option Shares are complex and subject to change. Optionee should
consult a tax adviser before exercising the Option or disposing of the Shares.

12. Securities Laws Requirements. The Option shall not be exercisable to any extent,
and the Company shall not be obligated to transfer any Option Shares to Optionee upon exercise of
such Option, if such exercise, in the opinion of counsel for the Company, would violate the
Securities Act of 1933 (the “Securities Act”) or any other Federal or state statutes having similar
requirements as may be in effect at that time.

13. No Obligation to Register Option Shares. The Company shall be under no obligation
to register the Option Shares pursuant to the Securities Act or any other Federal or state
securities laws.

14. Investment Representation. Optionee hereby represents and warrants to the Company
that Optionee, by reason of Optionee’s business or financial experience (or the business or
financial experience of Optionee’s professional advisors who are unaffiliated with and who are not
compensated by the Company or any affiliate or selling agent of the Company, directly or
indirectly), has the capacity to protect Optionee’s own interests in connection with the
transactions contemplated under this Option Agreement.

15. Market Stand-Off. In connection with any underwritten public offering by the
Company of its equity securities pursuant to an effective registration statement filed under the
Securities Act for such period as the Company or its underwriters may request (such period not to
exceed 180 days following the date of the applicable offering), Optionee shall not, directly or
indirectly, sell, make any short sale of, loan, hypothecate, pledge, offer, grant or sell any
option or other contract for the purchase of, purchase any option or other contract for the sale
of, or otherwise dispose of or transfer, or agree to engage in any of the foregoing transactions
with respect to, any Option Shares acquired under this Option Agreement without the prior written
consent of the Company or its underwriters.

16. Protections Against Violations of Agreement. No purported sale, assignment,
mortgage, hypothecation, transfer, pledge, encumbrance, gift, transfer in trust (voting or other)
or other disposition of, or creation of a security interest in or lien on, any of the Option Shares
by any holder thereof in violation of the provisions of this Agreement or the Certificate of
Incorporation or the Bylaws of the Company, will be valid, and the Company will not transfer any of
said Option Shares on its books nor will any of said Option Shares be entitled to vote, nor will
any dividends be paid thereon, unless and until there has been full compliance with said provisions
to the satisfaction of the Company. The foregoing restrictions are in addition to and not in lieu
of any other remedies, legal or equitable, available to enforce said provisions.

17. Withholding Requirements. The Company’s obligations under this Option Agreement
shall be subject to all applicable tax and other withholding requirements, and the Company shall,
to the extent permitted by law, have the right to deduct any withholding amounts from any payment
or transfer of any kind otherwise due to Optionee.

18. Failure to Enforce Not a Waiver. The failure of the Company to enforce at any
time any provision of this Option Agreement shall in no way be construed to be a waiver of such
provision or of any other provision hereof.

19. Governing Law. With the exception of Section 6 above, this Option Agreement shall
be governed by and construed according to the laws of the State of Delaware without regard to its
principles of conflict of laws. The provisions of Section 6 above shall be governed by and
construed according to the laws of the Commonwealth of Virginia without regard to its principles of
conflict of laws.

20. Incorporation of Plan. The Plan is hereby incorporated by reference and made a
part hereof, and the Option and this Option Agreement shall be subject to all terms and conditions
of the Plan.

21. Amendments; Construction. The Administrator may amend the terms of this Option
Agreement prospectively or retroactively at any time, but no such amendment shall impair the rights
of Optionee hereunder without his or her consent. To the extent the terms of Section 6 above
conflict with any prior agreement between the parties related to such subject matter, the terms of
Section 6 shall supersede such conflicting terms and control. Headings to Sections of this Option
Agreement are intended for convenience of reference only, are not part of this Option Agreement and
shall have no affect on the interpretation hereof.

22. Rights as a Stockholder. Neither Optionee nor any of Optionee’s successors in
interest shall have any rights as a stockholder of the Company with respect to any shares of Common
Stock subject to the Option until the date of issuance of a stock certificate for such shares of
Common Stock.

23. Agreement Not a Contract for Services. Neither the Plan, the granting of the
Option, this Option Agreement nor any other action taken pursuant to the Plan shall constitute or
be evidence of any agreement or understanding, express or implied, that Optionee has a right to
continue to provide services as an officer, director, employee, consultant or advisor of the
Company or any Subsidiary or Affiliate for any period of time or at any specific rate of
compensation.

24. Authority of the Administrator. The Administrator shall have full authority to
interpret and construe the terms of the Plan and this Option Agreement. The determination of the
Administrator as to any such matter of interpretation or construction shall be final, binding and
conclusive.

25. Survival of Terms. This Option Agreement shall apply to and bind Optionee and the
Company and their respective permitted assignees and transferees, heirs, legatees, executors,
administrators and legal successors. The terms of Section 6 shall expressly survive the
termination of the Option and this Agreement.

26. Acceptance. Optionee hereby acknowledges receipt of a copy of the Plan and this
Option Agreement. Optionee has read and understand the terms and provision thereof, and accepts
the Option subject to all the terms and conditions of the Plan and this Agreement.

27. Severability. Should any provision of this Option Agreement be held by a court of
competent jurisdiction to be unenforceable, or enforceable only if modified, such holding shall not
affect the validity of the remainder of this Option Agreement, the balance of which shall continue
to be binding upon the parties hereto with any such modification (if any) to become a part hereof
and treated as though contained in this original Option Agreement. Moreover, if one or more of the
provisions contained in this Option Agreement shall for any reason be held to be excessively broad
as to scope, activity, subject or otherwise so as to be unenforceable, in lieu of severing such
unenforceable provision, such provision or provisions shall be construed by the appropriate
judicial body by limiting or reducing it or them, so as to be enforceable to the maximum extent
compatible with the applicable law as it shall then appear, and such determination by such judicial
body shall not affect the enforceability of such provisions or provisions in any other
jurisdiction.

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Option Agreement on
the day and year first above written.

AMERIGROUP Corporation

By

Stanley F. Baldwin

Executive Vice President, General Counsel

and Secretary

     

Address:

Social Security Number:

1

EXHIBIT A

AMERIGROUP CORPORATION

2005 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT

NOTICE OF EXERCISE

______________, ____

AMERIGROUP Corporation

[Address]

Attn:

On      , I was granted an option (an “Option”) by AMERIGROUP Corporation (the “Company”)
under the Company’s 2000 Equity Incentive Plan (the “Plan”) and a stock option agreement, between
me and the Company (the “Agreement”). This letter is to notify you that I wish to purchase Option
Shares under the Agreement as set forth below.

Exercise of Option

1. I wish to purchase      Option Shares at the current exercise price of $    per share for
a total cost of $     .

2. I am paying for these Option Shares as follows:

	 	 	 	     By enclosing cash and/or a certified or
cashier’s check payable to the Company in the amount of $     .

	 	 	 	     By means of a cashless exercise procedure
through the following broker:      .

	 	 	 	     By delivery of unrestricted shares of
Company stock already owned by me for more than six months on the
date of surrender, and which have an aggregate fair market value on
the date of surrender equal to the

2

 aggregate exercise price
of the Option Shares as to which the Option is being exercised, with
any fractional share amounts to be settled by cash and/or a
certified or cashier’s check.

3. I am paying the local, state and federal withholding taxes and/or all other taxes that the
Company has advised me are due as follows:

	 	 	 	     By enclosing cash and/or a certified or
cashier’s check payable to the Company in the amount of $     .

	 	 	 	     By authorizing the Company to withhold
from the number of Option Shares I would otherwise receive that
number of whole Shares having a fair market value equal to the
minimum tax withholding due, with any fractional share amounts to be
settled by cash and/or a certified or cashier’s check.

	 	 	 	     By delivery of unrestricted shares of
Company stock already owned by me for more than six months on the
date of surrender, and which have an aggregate fair market value on
the date of surrender equal to the minimum tax withholding due, with
any fractional share amounts to be settled by cash and/or a
certified or cashier’s check.

4. In exercising my Option I hereby warrant and represent to the Company that I have not
engaged in Disabling Conduct and acknowledge that the Company has no obligation to issue a
certificate evidencing any Option Shares purchasable by me until the purchase price of such Option
Shares is fully paid as set forth in the Option Agreement.

Very truly yours,

Optionee

Name and Address (please print)

	 	 	 	 	 
	Telephone Number
	 	 	(   	)
	 
	 	 	 	 
	Social Security Number
	 	 	 	 
	 
	 	 	 	 

3EX-10.3

RESTRICTED STOCK AGREEMENT

PURSUANT TO

THE AMERIGROUP CORPORATION

2005 EQUITY INCENTIVE PLAN

This Restricted Stock Agreement is made and entered into as of      (the “Date of
Grant”), by and between AMERIGROUP Corporation, a Delaware corporation (the “Company”), and
     (the “Participant”). Capitalized terms not defined herein shall have the meaning
ascribed to them in the Company’s 2005 Equity Incentive Plan (the “Plan”).

1. Number of Shares. The Company hereby grants to the Participant      shares of
Restricted Stock, subject to all of the terms and conditions of this Restricted Stock Agreement and
the Plan. Such shares of Restricted Stock shall be evidenced by a book entry statement bearing the
restrictive legends described in Section 6 hereof. The book entry transfer evidencing the shares
of Restricted Stock shall be held in the custody of the Company until the restrictions thereon
shall have lapsed, and, as a condition to the grant of the Restricted Stock, the Participant shall
deliver to the Company a stock power, endorsed in blank, relating to the Restricted Stock in such
form as the Secretary of the Company may require. Reasonably promptly after the restrictions on
transferability of a share of Restricted Stock shall lapse, the Company shall cause to be delivered
to the Participant a certificate evidencing such share, free of the legends described in Section 6
hereof.

2. Lapse of Restrictions.

(a) Subject to Section 4 hereof, the restrictions on transfer set forth in Section 2(b) hereof
shall lapse as follows, subject to the continued employment of Participant by the Company or one of
its Affiliates:

[vesting schedule]

Upon termination of the Participant’s employment with the Company (or any subsidiary of the
Company), any shares of Restricted Stock as to which the restrictions on transferability shall not
already have lapsed shall be immediately forfeited by the Participant and transferred to, and
reacquired by, the Company without consideration of any kind.

(b) Until the restrictions on transfer of the Restricted Stock lapse as provided in Section
2(a) hereof, or as otherwise provided in the Plan, no transfer of the Restricted Stock or any of
the Participant’s rights with respect to the Restricted Stock, whether voluntary or involuntary, by
operation of law or otherwise, shall be permitted. Unless the Administrator determines otherwise,
upon any attempt to transfer a share of Restricted Stock or any rights in respect of a share of
Restricted Stock before the lapse of such restrictions, such share, and all of the rights related
thereto, shall be immediately forfeited by the Participant and transferred to, and reacquired by,
the Company without consideration of any kind.

3. Adjustments. In the event of any Change in Capitalization, the Administrator shall
take such actions pursuant to Section 5 of the Plan (including the provisions thereof relating to
the cancellation of Awards in exchange for a payment in cash or other property) as it deems
appropriate.

4. Change in Control. [At the discretion of the Administrator, either]

Any shares of Restricted Stock that have not previously vested shall be deemed fully vested if the
Participant’s employment or service with the Company or any Subsidiary or Affiliate is terminated
by the Company or any Subsidiary or Affiliate or any successor entity for any reason (other than
for Cause or as a result of Disabling Conduct (defined below)) within two years following a Change
in Control or if the Participant terminates employment or service with the Company or any
Subsidiary or Affiliate within two years following the Change in Control and after there is a
material adverse change in the nature or status of the Participant’s duties or responsibilities
from those in effect immediately prior to the Change in Control. For purposes of the preceding
sentence, “Disabling Conduct” shall mean conduct involving a breach of the covenants made in
Section 5 hereof.

[or]

Any shares of Restricted Stock that have not previously vested shall become fully vested upon a
Change in Control.

5. Covenant Not to Compete.

(a) In consideration for the grant of the Restricted Stock, and as a material condition to the
grant, the Participant hereby expressly agrees as follows:

(i) The Participant will act in the best interests of the Company and its Subsidiaries
and Affiliates (each, an “AMERIGROUP Company” and collectively, the “AMERIGROUP Companies”)
throughout the period of the Participant’s employment with any of the AMERIGROUP Companies;
and

(ii) At all times while employed by any AMERIGROUP Company and at all times during the
Covered Post-Employment Period (defined below), the Participant will not (A) compete with
any AMERIGROUP Company by serving a Competitor (defined below) in any managerial capacity,
or in any capacity that influences business strategy, with respect to a Covered Product or
Service (defined below) that the Competitor is offering in a Covered Area (defined below)
or developing to offer in a Covered Area, or (B) solicit for employment, interfere with the
employment relationship of or endeavor to entice away any employee of any AMERIGROUP
Company.

(b) As used herein,

(i) The “Covered Post-Employment Period” means the twelve (12) month period beginning
on the first day on which the Participant is no longer employed by any AMERIGROUP Company
as a result of the Participant’s resignation or termination for Cause and ending on the
first anniversary of such date. (In the event the Company terminates the Participant
without Cause, there shall not be a Covered Post-Employment Period.)

(ii) “Competitor” means any entity or person that provides or is planning to provide a
Covered Product or Service in competition with a Covered Product or Service that an
AMERIGROUP Company is actively developing, marketing, providing or selling.

(iii) “Confidential Information” means an AMERIGROUP Company’s material non-public
information concerning its business and affairs, including, without limitation, trade
secrets, strategies, business plans, marketing and advertising plans, member and provider
information, employee and personnel information, contracts, training manuals, financial
projections, budgets and non-public financial data (including, without limitation,
statements with premium revenue and/or provider compensation terms, reports of actuaries,
medical loss reports, balance sheets and income statements).

(iv) A “Covered Product or Service” shall mean a managed health care product or
service offered or provided to any beneficiary of and/or participant in any Medicaid,
Medicaid-related, or SSI program, any government-funded children’s health insurance program
or any federal and/or state sponsored health care program that is substantially similar to
any of such programs.

(v) The “Covered Area” shall consist of each city, county and other similar
governmental territory in which an AMERIGROUP Company provides or has made material efforts
to develop and provide a Covered Product or Service to its members, if in the course of the
Participant’s employment with an AMERIGROUP Company he or she (A) has provided services to
an AMERIGROUP Company with respect to the Covered Products or Services in such city, county
or governmental territory, or (B) reviewed or discussed Confidential Information of an
AMERIGROUP Company with respect to the Covered Product or Service in such city, county or
governmental territory.

(c) The Participant agrees that any breach by the Participant of the covenants made in Section
5(a) may cause irreparable damage to one or more of the AMERIGROUP Companies and that in the event
of such breach each AMERIGROUP Company shall have, in addition to any and all remedies of law, the
right to an injunction, specific performance or other equitable relief to prevent the violation of
the Participant’s obligations hereunder. The Participant agrees that any such AMERIGROUP Company
may seek and obtain injunctive relief without posting an injunction bond. The Participant hereby
acknowledges and agrees that the Participant will have access to confidential and proprietary
information and trade secrets concerning the AMERIGROUP Companies during the Participant’s
employment and that the covenants in Section 5(a) are reasonable in scope and necessary to protect
the legitimate business interests of the AMERIGROUP Companies. The Participant hereby further
expressly acknowledges and agrees that each AMERIGROUP Company is an express third party
beneficiary of the terms of this Agreement. (For the avoidance of doubt, the Participant
acknowledges and agrees that the experience and/or knowledge that the Participant acquires in the
course of his or her employment with an AMERIGROUP Company may relate not only to the Covered
Products and Services of the AMERIGROUP Company with which he or she is employed, but also those of
other AMERIGROUP Companies.)

6. Legend on Certificates. The Participant agrees that any book entry statement
issued for shares of Restricted Stock prior to the lapse of any outstanding restrictions relating
thereto shall bear the following legend (in addition to any other legend or legends required under
applicable federal and state securities laws):

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS UPON
TRANSFER AND RIGHTS OF REPURCHASE (THE “RESTRICTIONS”) AS SET FORTH IN THE
AMERIGROUP CORPORATION 2005 EQUITY INCENTIVE PLAN AND A RESTRICTED STOCK AGREEMENT ENTERED
INTO BETWEEN THE REGISTERED OWNER AND AMERIGROUP CORPORATION, COPIES OF WHICH ARE ON FILE
WITH THE SECRETARY OF THE COMPANY. ANY ATTEMPT TO DISPOSE OF THESE SHARES IN CONTRAVENTION
OF THE RESTRICTIONS, INCLUDING BY WAY OF SALE, ASSIGNMENT, TRANSFER, PLEDGE, HYPOTHECATION
OR OTHERWISE, SHALL BE NULL AND VOID AND WITHOUT EFFECT.

7. Certain Changes. The Administrator may accelerate the date on which the
restrictions on transfer set forth in Section 2(b) hereof shall lapse or otherwise adjust any of
the terms of the Restricted Stock; provided that no action under this Section 7 shall adversely
affect the Participant’s rights hereunder.

8. Notices. All notices and other communications under this Agreement shall be in
writing and shall be given by facsimile or first class mail, certified or registered with return
receipt requested, and shall be deemed to have been duly given three days after mailing or 24 hours
after transmission by facsimile to the respective parties named below:

	 	 	 
	If to the Company:

	 	AMERIGROUP Corporation

4425 Corporation Lane

Virginia Beach, VA 23462

Facsimile: (757) 557-6743

Attn: Stanley F. Baldwin
	 
	 	 
	If to the Participant:

	 	

	
 
	 	 

Facsimile:

Either party hereto may change such party’s address for notices by notice duly given pursuant
hereto.

9. Securities Laws Requirements. The Company shall not be obligated to transfer any
Shares to the Participant free of the restrictive legend described in Section 6 hereof if such
transfer, in the opinion of counsel for the Company, would violate the Securities Act of 1933, as
amended (the “Securities Act”) (or any other federal or state statutes having similar requirements
as may be in effect at that time).

10. No Obligation to Register. The Company shall be under no obligation to register
the shares of Restricted Stock pursuant to the Securities Act or any other federal or state
securities laws.

11. Market Stand-Off. In connection with any underwritten public offering by the
Company of its equity securities pursuant to an effective registration statement filed under the
Securities Act for such period as the Company or its underwriters may request (such period not to
exceed 180 days following the date of the applicable offering), the Participant shall not, directly
or indirectly, sell, make any short sale of, loan, hypothecate, pledge, offer, grant or sell any
option or other contract for the purchase of, purchase any option or other contract for the sale
of, or otherwise dispose of or transfer, or agree to engage in any of the foregoing transactions
with respect to, any of the shares of Restricted Stock granted under this Restricted Stock
Agreement (whether or not vested) without the prior written consent of the Company or its
underwriters.

12. Protections Against Violations of Agreement. No purported sale, assignment,
mortgage, hypothecation, transfer, pledge, encumbrance, gift, transfer in trust (voting or other)
or other disposition of, or creation of a security interest in or lien on, any of the shares of
Restricted Stock by any holder thereof in violation of the provisions of this Restricted Stock
Agreement or the Certificate of Incorporation or the Bylaws of the Company, will be valid, and the
Company will not transfer any of said shares of Restricted Stock on its books nor will any of said
shares of Restricted Stock be entitled to vote, nor will any dividends be paid thereon, unless and
until there has been full compliance with said provisions to the satisfaction of the Company. The
foregoing restrictions are in addition to and not in lieu of any other remedies, legal or
equitable, available to enforce said provisions.

13. Taxes. The Participant shall pay to the Company promptly upon request, and in any
event at the time the Participant recognizes taxable income in respect to the shares of Restricted
Stock (or, if the Participant makes an election under Section 83(b) of the Code in connection with
such grant), an amount equal to the taxes the Company determines it is required to withhold under
applicable tax laws with respect to the shares of Restricted Stock. The Participant may satisfy
the foregoing requirement by making a payment to the Company in cash or, with the approval of the
Administrator, by delivering already owned unrestricted Shares, in each case, having a value equal
to the minimum amount of tax required to be withheld. Such Shares shall be valued at their Fair
Market Value on the date as of which the amount of tax to be withheld is determined. Fractional
share amounts shall be settled in cash. The Participant shall promptly notify the Company of any
election made pursuant to Section 83(b) of the Code. A form of such election is attached hereto as
Exhibit A.

THE PARTICIPANT ACKNOWLEDGES THAT IT IS THE PARTICIPANT’S SOLE RESPONSIBILITY AND NOT THE
COMPANY’S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b) OF THE CODE, EVEN IF THE
PARTICIPANT REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING ON THE
PARTICIPANT’S BEHALF.

The Participant acknowledges that the tax laws and regulations applicable to the Restricted Stock
and the disposition of the shares of Restricted Stock following vesting are complex and subject to
change.

14. Failure to Enforce Not a Waiver. The failure of the Company to enforce at any
time any provision of this Restricted Stock Agreement shall in no way be construed to be a waiver
of such provision or of any other provision hereof.

15. Investment Representation. The Participant hereby represents and warrants to the
Company that the Participant, by reason of the Participant’s business or financial experience (or
the business or financial experience of the Participant’s professional advisors who are
unaffiliated with and who are not compensated by the Company or any affiliate or selling agent of
the Company, directly or indirectly), has the capacity to protect the Participant’s own interests
in connection with the transactions contemplated under this Restricted Stock Agreement.

16.

1

Governing Law. With the exception of Section 5 above, this Restricted Stock Agreement
shall be governed by and construed according to the laws of the State of Delaware without regard to
its principles of conflict of laws. The provisions of Section 5 above shall be governed by and
construed according to the laws of the Commonwealth of Virginia without regard to its principles of
conflict of laws.

17. Incorporation of Plan. The Plan is hereby incorporated by reference and made a
part hereof, and the shares of Restricted Stock and this Restricted Stock Agreement shall be
subject to all terms and conditions of the Plan.

18. Amendments; Construction. The Administrator may amend the terms of this
Restricted Stock Agreement prospectively or retroactively at any time, but no such amendment shall
impair the rights of the Participant hereunder without his or her consent. To the extent the terms
of Section 5 above conflict with any prior agreement between the parties related to such subject
matter, the terms of Section 5 shall supersede such conflicting terms and control. Headings to
Sections of this Restricted Stock Agreement are intended for convenience of reference only, are not
part of this Restricted Stock Agreement and shall have no affect on the interpretation hereof.

19. Survival of Terms. This Restricted Stock Agreement shall apply to and bind the
Participant and the Company and their respective permitted assignees and transferees, heirs,
legatees, executors, administrators and legal successors. The terms of Section 5 shall expressly
survive the forfeiture of the Restricted Stock and this Agreement.

20. Rights as a Stockholder. Subject to the restrictions set forth in the Plan and
this Restricted Stock Agreement, the Participant shall possess all incidents of ownership with
respect to the shares of Restricted Stock, including the right to receive or reinvest dividends
with respect to such shares of Restricted Stock and to vote such shares of Restricted Stock.

21. Agreement Not a Contract for Services. Neither the Plan, the granting of the
shares of Restricted Stock, this Restricted Stock Agreement nor any other action taken pursuant to
the Plan shall constitute or be evidence of any agreement or understanding, express or implied,
that the Participant has a right to continue to provide services as an officer, director, employee,
consultant or advisor of the Company or any Subsidiary or Affiliate for any period of time or at
any specific rate of compensation.

22. Authority of the Administrator. The Administrator shall have full authority to
interpret and construe the terms of the Plan and this Restricted Stock Agreement. The
determination of the Administrator as to any such matter of interpretation or construction shall be
final, binding and conclusive.

23.

2

Representations. The Participant has reviewed with his own tax advisors the Federal,
state, local and foreign tax consequences of the transactions contemplated by this Restricted Stock
Agreement. The Participant is relying solely on such advisors and not on any statements or
representations of the Company or any of its agents. The Participant understands that he (and not
the Company) shall be responsible for any tax liability that may arise as a result of the
transactions contemplated by this Restricted Stock Agreement.

24. Severability. Should any provision of this Restricted Stock Agreement be held by
a court of competent jurisdiction to be unenforceable, or enforceable only if modified, such
holding shall not affect the validity of the remainder of this Restricted Stock Agreement, the
balance of which shall continue to be binding upon the parties hereto with any such modification
(if any) to become a part hereof and treated as though contained in this original Restricted Stock
Agreement. Moreover, if one or more of the provisions contained in this Restricted Stock Agreement
shall for any reason be held to be excessively broad as to scope, activity, subject or otherwise so
as to be unenforceable, in lieu of severing such unenforceable provision, such provision or
provisions shall be construed by the appropriate judicial body by limiting or reducing it or them,
so as to be enforceable to the maximum extent compatible with the applicable law as it shall then
appear, and such determination by such judicial body shall not affect the enforceability of such
provisions or provisions in any other jurisdiction.

25. Acceptance. The Participant hereby acknowledges receipt of a copy of the Plan and
this Restricted Stock Agreement. The Participant has read and understand the terms and provision
thereof, and accepts the shares of Restricted Stock subject to all the terms and conditions of the
Plan and this Restricted Stock Agreement. The Participant hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator upon any questions
arising under this Restricted Stock Agreement.

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Restricted Stock
Agreement on the day and year first above written.

AMERIGROUP CORPORATION

By

Name

Title

     

The Participant

3

EXHIBIT A

ELECTION UNDER SECTION 83(b)

OF THE INTERNAL REVENUE CODE OF 1986

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of
1986, as amended, to include in taxpayer’s gross income for the current taxable year the amount of
any compensation taxable to taxpayer in connection with taxpayer’s receipt of the property
described below:

1. The name address, taxpayer identification number and taxable year of the undersigned are as
follows:

NAME OF TAXPAYER:

NAME OF SPOUSE:

ADDRESS:

IDENTIFICATION NO. OF TAXPAYER:

IDENTIFICATION NUMBER OF SPOUSE:

TAXABLE YEAR:

2. The property with respect to which the election is made is described as follows:      
shares (the “Shares”) of AMERIGROUP Corporation (“Company”).

3. The date on which the property was transferred is:      , 20     .

4. The property is subject to the following restrictions:

The Shares may not be transferred and are subject to forfeiture under the terms of an
agreement between the taxpayer and the Company. These restrictions lapse upon the
satisfaction of certain conditions in such agreement.

5. The fair market value at the time of transfer, determined without regard to any restriction
other than a restriction which by its terms will never lapse, of such property is: $
     .

6.The amount (if any) paid for such property is: $      .

The undersigned has submitted a copy of this statement to the person for whom the services were
performed in connection with the undersigned’s receipt of the above-described property. The
transferee of such property is the person performing the services in connection with the transfer
of said property.

The undersigned understands that the foregoing election may not be revoked except with the
consent of the Commissioner.

Dated:      , 200_

Taxpayer

The undersigned spouse of taxpayer joins in this election.

Dated:      , 200_

Spouse of Taxpayer

4

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