Document:

EX-10.1

SEPARATION AGREEMENT AND RELEASE

This AGREEMENT AND RELEASE (“Separation Agreement” or “Agreement”) is made between Lorenzo
Childress, Jr., M.D. (“Associate”) and AMERIGROUP Corporation, its successors, affiliates and
assigns (referred to herein, collectively and individually, as “AMERIGROUP”).

A. REASONS FOR AGREEMENT

1. Inasmuch as, AMERIGROUP and Associate have mutually agreed to end Associate’s relationship with
AMERIGROUP effective as of the close of business on April 1, 2005 (the “End Date”).

2. In order to assist Associate in regard to this separation, as consideration for the obligations
from Associate specified below, and in consideration of the Associate’s long and dedicated service,
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 date on which AMERIGROUP distributes bonuses to qualified Associates, in accordance with
AMERIGROUP policy, which shall be no later than March 15, 2005, AMERIGROUP will provide Associate
with a 2004 MJO Cash Bonus in the amount of $275,000.00.

(b) Associate acknowledges that, on February 9, 2005 (the “Date of Grant”), in accordance with
AMERIGROUP policy, AMERIGROUP granted Associate a non-qualified option to purchase 60,000 shares of
AMERIGROUP stock. Twenty-five (25%) percent of said options vested on the Date of Grant, and an
additional six and one-quarter (6.25%) percent of said options shall vest on April 1, 2005.

(c) No sooner than (i) the eighth (8th) day after Associate executes this Agreement, or
(ii) the first payroll distribution day after the End Date, whichever occurs later, and provided
that Associate has not revoked this Agreement as provided in Section B.5(a)(iv), below, and
provided that Associate has not breached this Agreement, AMERIGROUP will provide Associate with:

	 	i.	 	a Lump Sum Payment, in the amount of $251,800.00, which includes the estimated COBRA
costs for twelve months for health, dental, life and disability insurance at Associate’s
current coverage levels.

	 	ii.	 	a Special Paid Annual Leave payout, calculated at 235 hours, as estimated through the
first quarter of 2005, in the amount of $37,700.00

(d) No sooner than (i) the eighth (8th) day after Associate executes this Agreement, or
(ii) the first payroll distribution day after the End Date, whichever occurs later, and provided
that Associate has not revoked this Agreement as provided in Section B.5(a)(iv), below, and
provided that Associate has not breached this Agreement, AMERIGROUP shall initiate payment to
Associate of an amount equal to Associate’s base salary, to wit, $333,759.00 (the “Base Salary
Amount”), payable on the regular biweekly payroll cycle over a one (1) year period (the “Severance
Period”). The Base Salary Amount shall continue to be paid during the Severance Period, even if
Associate obtains other employment.

(e) The Company will reimburse Associate’s reasonable and customary business expenses for
previously scheduled continuing medical education incurred prior to the End Date.

(f) All monies paid to Associate shall have all applicable taxes deducted.

(g) 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.

(h) The benefits provided to Associate hereunder are unique to Associate’s contribution to the
company. Nothing herein shall be deemed to establish a separation agreement or other employee
benefit plan or program available to other AMERIGROUP employees. 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.

(i) AMERIGROUP shall provide a neutral reference to Associate and to any persons who inquire of
AMERIGROUP for a reference on Associate. Such neutral reference shall state only that Associate
was employed at AMERIGROUP from July 6, 1995 to April 1, 2005.

(j) 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, the
aforementioned 2004 MJO Cash Bonus, and the aforementioned accrued and unpaid PAL less applicable
payroll taxes, in accordance with AMERIGROUP Policy. 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 benefits under AMERIGROUP’s Deferred Compensation Plan and AMERIGROUP’s 401(k) Plan, including,
if applicable, AMERIGROUP’s matches on behalf of Associate for the year 2004 and the
Indemnification Agreement, dated as of April 24, 2000, shall remain in full force and effect. In
the event that Associate has not signed and returned this Separation Agreement to AMERIGROUP on or
before March 14, 2005, this Agreement shall be deemed withdrawn

(k) The circumstances of Associate’s separation from employment do not constitute a “for cause”
termination under Section 10 of the Employee Noncompetition, Nondisclosure and Developments
Agreement, Section 4 of the Incentive Stock Option Agreement under the 1994 Stock Plan, Section 5
of the Incentive Stock Option Agreement under the 2000 Equity Incentive Plan, or Section 5 of the
2003 Equity Incentive Plan. Associate is hereby released from the restrictions of Paragraph 1(a)
of the said Employee Noncompetition, Nondisclosure and Developments Agreement,

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 has or will be 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 only 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 which
arise after the date the Associate signs this Separation Agreement.

(c) If Associate breaks Associate’s promise in Paragraph B.3(a) of this Separation Agreement and
files a lawsuit based on legal claims or a portion of legal claims that Associate has released, or
if a lawsuit is initiated based on legal claims or a portion of legal claims that Associate has
given, sold, assigned, or transferred to any one else, and if AMERIGROUP prevails in said lawsuit,
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.

(b) Associate agrees to return to AMERIGROUP on or before February 11, 2005, all of AMERIGROUP’s
property in Associate’s possession, control or custody including, but not limited to, Associate’s
security badge, Sonitrol card, 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. AMERIGROUP agrees to provide Associate with secretarial service from February 11,
2005, through and including April 1, 2005. Associate further represents and warrants that
Associate has not retained any copies, electronic or otherwise, of such property.

(c) Notwithstanding anything to the contrary herein, Associate shall continue to comply with the
terms of the Employee Noncompetition, Nondisclosure and Developments Agreement between Associate
and AMERIGROUP, other than Paragraph 1(a) from which Associate has been released, and know and
understand that the obligations contained in that agreement survive execution of this Separation
Agreement and Associate’s termination of employment. In particular, Associate shall not disclose
any confidential or proprietary information which Associate acquired as an employee of AMERIGROUP
to any other person or entity, or use such information in any manner that is detrimental to the
interest of AMERIGROUP.

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

(e) Recognizing Associate’s knowledge and skills, AMERIGROUP requests Associate, and Associate
agrees, to cooperate fully with AMERIGROUP in its defense of or other participation in any
administrative, judicial or other proceeding arising from any charge, complaint or other action
that has been or may be filed. In the event that AMERIGROUP shall request that Associate so
cooperate after the Severance Period, AMERIGROUP will pay Associate a fee in an amount to be agreed
upon by the parties.

5. Special ADEA Waiver and Release Notification

(a) The General Release, paragraph 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 AMERIGROUP shall not be required to pay any of
Associate’s attorney’s fees in this or any related matter or lawsuit, now or later, and
that the settlement monies received in Paragraph B.1 are in full and complete
settlement of all matters between Associate and AMERIGROUP, including but not limited
to, attorney’s fees and costs;

	 	(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.

6. Confirmation of Corporate Compliance

Associate acknowledges that Associate will not be eligible to receive the benefits described in the
Special Separation Package 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
complied with AMERIGROUP’s Corporate Compliance/Ethics Program during Associates employment;
Associate has not participated in or knowingly permitted others to engage in any conduct prohibited
by AMERIGROUP’s Corporate Compliance/Ethics Program; Associate understands that Associate has a
duty under that program to notify AMERIGROUP’s designated Corporate Compliance/Ethics Officer of
any knowledge of violation of such Program; 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 and Associate acknowledges that such
compliance is a condition to Associate’s eligibility to receive the benefits described in the
Special Separation Package.

7. Nonpiracy of Employees

Associate agrees that during the period of one year following Associate’s separation from
employment with AMERIGROUP, Associate will not directly or indirectly on behalf of Associate or any
other entity or person solicit for employment any personnel employed by AMERIGROUP or AMERIGROUP’s
subsidiaries at the time of such separation.

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. 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. No Waiver or Breach or Remedy

A waiver by AMERIGROUP of the breach of any of the provisions of this Separation Agreement by
Associate shall not be deemed a waiver by AMERIGROUP or 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.

11. Severability

In the event that any provision of this Separation Agreement is determined to be invalid by a court
of competent jurisdiction, all other provisions of this Separation Agreement shall remain in full
force and effect.

12. Entire Agreement

(a) This Agreement 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 Section 4(c), 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, Associate’s Stock Option Agreements under the
1994 Stock Plan, 2000 Equity Incentive Plan, and 2003 Equity Incentive Plan; 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.

13. 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.

14. Violation by Associate

In the event that a Party hereto violates any of the terms of this Separation Agreement, the other
Party shall have the right to terminate any or all of its commitments herein and to seek to recover
the equivalent of any monies or other consideration previously provided, and to pursue any other
remedies available in law or at equity.

15. 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 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.

16. Choice of Law

This 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 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.

17. Section Headings

The section headings in this 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 Agreement.

18. No Third Party Rights

This 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.

19. Counterparts

This 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.

	 	 	 
	LORENZO CHILDRESS, JR., M.D.	 	AMERIGROUP CORPORATION
	     

Lorenzo Childress, Jr., M.D.

	 	By:     

Stanley F. Baldwin
	 
	 	 
	
 
	 	Executive Vice President, General

Counsel and Secretary

COMMONWEALTH OF VIRGINIA

City of Virginia Beach

Acknowledged before me by Lorenzo Childress, Jr., M.D. on the      day of      2005.

     

Notary Public

My Commission Expires:

1

COMMONWEALTH OF VIRGINIA

City of Virginia Beach

Acknowledged before me by Stanley F. Baldwin, Executive Vice President, General Counsel and
Secretary, of AMERIGROUP Corporation, on the      day of      2005.

     

Notary Public

My Commission Expires:

2EX-10.2

AMERIGROUP Corporation

1

2005 Executive 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

1.23

1.24

1.25

	 	

Annual Deferral

Beneficiary

Code

Company

Compensation

Continuous Service

Crediting Rate

Deferral Account

Deferral Commitment

Deferral Contribution Period

Deferral Contribution Period Benefit

Deferral Election Form

Deferred Compensation Committee

Disability

Eligible Employee

Employer

ERISA

Participant

Plan

Plan Year

Retirement

Separation from Service

Termination of Employment

Unforeseeable Emergency

Valuation Date

	 	 	 
	Article 2 - Participation

	 
	 	 
	2.1

2.2

	 	Deferral Election Form

Continuation of Participation

	 	 	 
	Article 3 - Deferral Commitments

	 
	 	 
	3.1

3.2

	 	Minimum Deferral Commitment

Maximum Deferral Commitment

	 	 	 
	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

5.5

5.6

5.7

	 	Election of Time and Form of Payment

Retirement Benefits

Time and Form for Payment of Retirement Benefits

In-Service Distributions

Certain Lump Sum Payments

Small Benefit Exception

Unforeseeable Emergency Distributions

	 	 	 
	Article 6 — Death Benefits

Article 7 — Disability

	 	

	 
	 	 
	Article 8 - Conditions Related to Benefits

	 
	 	 
	8.1

8.2

8.3

8.4

	 	Nonassignability

No Right to Employer Assets

Protective Provisions

Withholding

	 	 	 
	Article 9 - Administration of the Plan

	 
	 	 
	9.1

9.2

	 	Plan Administrator

Claims Procedure

	 	 	 
	Article 10 - Beneficiary Designation

	 
	 	 
	10.1

10.2

10.3

	 	Beneficiary Designation

New Beneficiary Designation

Failure to Designate Beneficiary

	 	 	 
	Article 11 - Amendment and Termination of the Plan

	 
	 	 
	11.1

11.2

	 	Amendment of the Plan

Termination of the Plan

	 	 	 
	Article 12 - Miscellaneous

	 
	 	 
	12.1

12.2

12.3

12.4

12.5

12.6

12.7

12.8

12.9

12.10

	 	Successors of the Employer

ERISA Plan

Compliance with Code Section 409A

Employment Not Guaranteed

Gender, Singular and Plural

Captions

Validity

Waiver of Breach

Applicable Law

Notice

2

AMERIGROUP Corporation

2005 Executive Deferred Compensation Plan

AMERIGROUP Corporation, a Delaware corporation (the “Company”) hereby establishes the 2005
Executive Deferred Compensation Plan (the “Plan”), effective January 1, 2005 to enable Participants
covered under the Plan to enhance their retirement security by permitting them to enter into
agreements with their Employer to defer compensation and receive benefits at Separation from
Service, and such other times as are otherwise provided under the Plan.

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 9 of the Plan.

	 	1.3	 	Change of Control: shall mean the occurrence of both of the following events: (a) the
following individuals cease for any reason 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;
and (b) within twelve (12) months following the occurrence described in Section 1.3(a),
one-third (1/3) or more of the Participants with Deferral Commitments in effect on the date of
the occurrence described in Section 1.3(a), cease to be employed by the Employer for any
reason.

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 Participant’s salary and bonuses, before reductions pursuant to
this Plan or any other Employer-sponsored plan (such as a Code Section 401(k) or 125 plan),
for services as an Eligible Employee 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 Employer 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 9 of the Plan.

	 	1.15	 	Disability: shall mean a physical or mental condition that prevents a Participant from
performing his or her normal duties of employment. If a Participant makes application for or
is otherwise eligible for disability benefits under a short-term disability program sponsored
by his Employer and qualifies for such benefits, the Participant shall be presumed to qualify
as disabled under the Plan. In the event that a Participant is not covered by an
Employer-sponsored short-term disability program, a Participant shall be presumed to be
disabled if the Deferred Compensation Committee so determines upon review of one or more
medical opinions acceptable to the Deferred Compensation Committee.

	 	1.16	 	Eligible Employee: shall mean any of the senior management of the Employer designated by the
Deferred Compensation Committee to be eligible to participate in the Plan, (a) for the 2005
Plan Year, who are at the Associate Vice President level and above, and for Plan Years after
2005, who were Participants on January 1, 2005 with Deferral Commitments in effect for the
2005 Deferral Contribution Period or who are at the Vice President level and above; and (b) in
all cases, who have completed three (3) months of benefits-eligible Continuous Service.

	 	1.17	 	Employer: shall mean the Company and any of its subsidiaries or divisions allowed by the
Company to participate in the Plan.

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

	 	1.19	 	Participant: shall mean an Eligible Employee who is participating in the Plan as provided in
Article 2, or a former Eligible Employee for whom a Deferral Account is being maintained under
the Plan.

	 	1.20	 	Plan: shall mean this 2005 Executive 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.

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

	 	1.22	 	Retirement: shall mean the date of Separation from Service with the Employer of a Participant
who is in “good standing” under the Employer’s policies, for any reason whatsoever, whether
voluntary or involuntary, prior to the Participant’s death and after the Participant’s
completion of five (5) complete years of Continuous Service.

	 	1.23	 	Separation from Service: shall mean “separation from service” within the meaning of Code
Section 409A(a)(2)(A)(i).

	 	1.24	 	Termination of Employment: shall mean the date of Participant’s Separation from Service for
any reason whatsoever, whether voluntary or involuntary, other than as a result of the
Participant’s Retirement, death, or, to the extent provided in Article 7 of the Plan,
Disability.

	 	1.25	 	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.

	 	1.26	 	Valuation Date: shall mean (a) in the case of distributions pursuant to paragraphs 5.3 and
5.5 of the Plan, the last day of the calendar month coincident with or next following the date
that is six (6) months after a Participant’s Retirement, Termination of Employment or
Separation from Service, as applicable, except that in the case of installment payments after
the initial installment payment under paragraph 5.3(b), the Valuation Date shall be each
anniversary of the Valuation Date that is applicable to the initial installment; (b) in the
case of distributions pursuant to paragraph 5.4 of the Plan, December 31 of each Plan Year;
(c) in the case of distributions pursuant to paragraph 5.6 or 5.8 of the Plan, the last day of
each calendar month; (d) in the case of distributions pursuant to Article 6 of the Plan, the
last day of each calendar quarter; and (e) 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 Eligible Employee may elect to participate in the Plan and to
make a Deferral Commitment by submitting a Deferral Election Form to the Deferred Compensation
Committee by the deadline established by it that is (a) prior to the beginning of the 2005
Deferral Contribution Period, and (b) prior to July 1 immediately preceding any later Deferral
Contribution Period with respect to Compensation that will be both earned and payable during
the Deferral Contribution Period as base salary, and/or with respect to Compensation that will
be payable during the Deferral Contribution Period as a bonus under the Company’s annual
incentive bonus plan. 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 an Eligible Employee with respect to the Plan Year for which the
election is made.

ARTICLE 3 — Deferral Commitments

	 	3.1	 	Minimum Deferral Commitment. A Participant may not elect to defer less than $2,500 in any
one Plan Year.

	 	3.2	 	Maximum Deferral Commitment. The Deferred Compensation Committee, in its sole discretion,
may establish maximum Deferral Commitment limits for the purpose of controlling the Employer’s
financial obligations under the Plan or for any other reason deemed necessary or desirable.

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 5.5 of the Plan with
respect to certain lump sum payments, in paragraph 5.8 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.

	 	5.2	 	Retirement Benefits. A Participant may elect to be paid his Deferral Contribution Period
Benefit upon Retirement as provided in paragraph 5.3 of the Plan. Any such election shall be
irrevocable.

	 	5.3	 	Time and Form for Payment of Retirement Benefits. The available times and forms of payment
after Retirement are as follows:

	 	(a)	 	Lump Sum. A lump sum payment. The payment shall be made within sixty
(60) days after the Valuation Date coincident with or next following the date that is
six (6) months after the date of the Participant’s Retirement, or as soon as
practicable thereafter.

	 	(b)	 	Installment Payments. Annual installment payments in substantially
equal amounts over a period of 5, 10 or 15 years, as elected by the Participant. The
initial installment payment shall be made within sixty (60) days after the Valuation
Date coincident with or next following the date that is six (6) months after the date
of the Participant’s Retirement, or as soon as practicable thereafter. Each subsequent
payment shall be made on each anniversary date of the initial payment. Until all
installments are paid, the unpaid balance of the Deferral Contribution Period Benefit
shall be adjusted for investment experience according to the Crediting Rate in effect
from time to time. The Deferred Compensation Committee, in its sole discretion, may
establish rules for making payments and adjusting the unpaid Deferral Account balance
for investment experience.

	 	5.4	 	In-Service Distributions. A Participant may elect to receive a lump sum payment of his
Deferral Contribution Period Benefit, which shall be made 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. Any such election shall be
irrevocable.

	 	5.5	 	Certain Lump Sum Payments. In the event of (a) a Participant’s Termination of Employment,
(b) a Participant’s Separation from Service with the Employer prior to the date elected for an
in-service distribution pursuant to paragraph 5.4 of the Plan, and/or (c) the Separation from
Service with the Employer of a Participant who has not elected the time and form of payment
for a Deferral Contribution Period Benefit, the Employer shall pay to the Participant the
related Deferral Contribution Period Benefit(s) in the form of a lump sum payment. The
payment shall be made within sixty (60) days after the Valuation Date coincident with or next
following the date that is six (6) months after the date of the applicable event, or as soon
as practicable thereafter.

	 	5.6	 	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.

	 	5.7	 	Small Benefit Exception. Notwithstanding any of the foregoing, in the event the sum of all
benefits payable to the Participant under the Plan is less than or equal to ten thousand
dollars ($10,000), the Employer may, in its sole discretion, elect to pay such benefits in a
single lump sum payment on the date such benefits first become payable.

	 	5.8	 	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 Employer 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 5.8, 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

If a Participant dies prior to receiving payment of the entire balance of his Deferral Account, the
Employer 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 — Disability

If a Participant is determined to have a Disability, the Participant shall, effective as of the
date such Participant is no longer paid his Compensation by the Employer, cease deferrals under the
Plan. The Participant’s Deferral Account shall continue to be credited with interest at the
Crediting Rate until such time as the Participant’s benefits under the Plan are distributed in
accordance with the Participant’s election or as otherwise provided for in the Plan. If the
Participant recovers from the Disability and resumes active employment during the Deferral
Contribution Period in which the Disability occurred, the Participant’s deferrals under the Plan
shall resume in accordance with the Participant’s Deferral Commitment regarding any Compensation
which is earned or payable subsequent to the Disability.

ARTICLE 8 — Conditions Related to Benefits

	 	8.1	 	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.

	 	8.2	 	No Right to Employer Assets. The benefits paid under the Plan shall be paid from the general
funds of the Employer, and the Participant and any Beneficiary shall be no more than unsecured
general creditors of the Employer with no special or prior right to any assets of the Employer
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.

	 	8.3	 	Protective Provisions. The Participant shall cooperate with the Employer 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.

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

ARTICLE 9 — Administration of the Plan

	 	9.1	 	Plan Administrator. 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.

	 	9.2	 	Claims Procedure. No lawsuit relating to a claim for benefits under the Plan may be filed by
any Participant, Beneficiary or representative thereof, unless and until in accordance with
the following process, the claimant has duly filed a claim, has also duly filed a request for
review of the determination of the claim and has also received an adverse determination on
review. A Participant, or if applicable, his Beneficiary, or a duly authorized representative
thereof may make a claim for benefits by filing a claim with the Deferred Compensation
Committee on the form made available for that purpose. The Deferred Compensation Committee
shall make the initial determination as to any claim under the Plan and give the claimant
notice thereof within ninety (90) days after receipt of the claim; provided, however, that if
special circumstances require an extension of time for processing the claim, the time for the
initial determination may be extended up to an additional ninety (90) days by the Deferred
Compensation Committee. Written notice of any extension shall be furnished to the claimant
prior to the commencement of the extension, indicating the special circumstances requiring the
extension and the date by which the Deferred Compensation Committee expects to render the
final decision. If the Deferred Compensation Committee wholly or partially denies the claim,
the notice shall include, in a manner calculated to be understood by the claimant, the
following:

(a) The specific reason for the denial;

	 	(b)	 	Specific reference to pertinent provisions of the Plan on which the denial is
based;

	 	(c)	 	A description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why the material or information is
necessary; and

	 	(d)	 	Information as to the steps to be taken if the claimant wishes to submit his or
her claim for review, including the time limits therefor, and a statement of the
claimant’s right to bring a civil action under Section 502(a) of the Employee
Retirement Income Security Act of 1974, as amended, following an adverse benefit
determination on review.

Within sixty (60) days after notification that a claim is wholly or partially denied, the
claimant may file with the Deferred Compensation Committee a written request for review of
the decision. The Deferred Compensation Committee shall provide the claimant requesting
review reasonable access to review or, upon the claimant’s request and free of charge,
provide the claimant copies of, all documents, records and other information relevant to the
claimant’s claim for benefits, and the opportunity to submit written comments, documents and
other information relating to the claim for benefits, which need not be limited to
information submitted or considered in the initial determination. The claimant shall be
entitled to have a representative participate in all such review proceedings. The review
shall take into account all comments, documents, records and other information submitted by
the claimant relating to the claim. Within sixty (60) days after receipt of a request for
review, the Deferred Compensation Committee shall make a final determination and give notice
to the claimant of its decision, which shall include specific reasons for the decision,
written in a manner calculated to be understood by the claimant, specific references to the
pertinent provisions of the Plan on which the decision is based, and a statement that the
claimant is entitled to receive, upon request and free of charge, reasonable access to, and
copies of, all documents, records and other information relevant to the claimant’s claim for
benefits. The notice to the claimant of the decision shall also include a statement of the
claimant’s right to bring an action under Section 502(a) of ERISA. Notwithstanding the
preceding two (2) sentences, however, if special circumstances require an extension of time
for processing a request for review, the Deferred Compensation Committee shall, upon
furnishing written notice of the extension to the claimant prior to the commencement of the
extension, have the right to extend the time for rendering a final determination and
providing notice to the claimant of its decision for up to one hundred and twenty (120) days
after the receipt of a request for review. Any such extension notice shall indicate the
special circumstances requiring an extension and the date by which the Deferred Compensation
Committee expects to render the determination on review.

ARTICLE 10 — Beneficiary Designation

	 	10.1	 	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.

	 	10.2	 	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.

	 	10.3	 	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 Employer 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
Employer 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 11 — Amendment and Termination of the Plan

	 	11.1	 	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.

	 	11.2	 	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 12 — Miscellaneous

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

	 	12.2	 	ERISA Plan. The Plan is intended to be an unfunded plan maintained primarily to provide
deferred compensation benefits for “a select group of management or highly compensated
employees” within the meaning of Sections 201, 301, and 401 of ERISA and therefore to be
exempt from Parts 2, 3, and 4 of Title I of ERISA, and the Plan shall be construed and
administered in accordance with this intention.

	 	12.3	 	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.

	 	12.4	 	Employment Not Guaranteed. Nothing contained in the Plan nor any action taken hereunder
shall be construed as a contract of employment or as giving any Participant any right to
continued employment with the Employer.

	 	12.5	 	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.

	 	12.6	 	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.

	 	12.7	 	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.

	 	12.8	 	Waiver of Breach. The waiver by the Employer 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.

	 	12.9	 	Applicable Law. The Plan shall be governed and construed in accordance with the laws of the
Commonwealth of Virginia except where the laws of the Commonwealth of Virginia are preempted
by ERISA.

	 	12.10	 	Notice. Any notice or filing required or permitted to be given to the Employer 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:

3

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