In close combat, a champion can attack any enemy model he is in base contact with, using his own characteristic profile, as normal. Similarly, enemy models in base contact can direct attacks against the champion if they wish. If the champion is slain then the model is replaced with a rank and file model from the back rank of the unit, if one is available. Note that any extra wounds inflicted upon a champion do not carry over onto the rest of the unit – once the champion is slain, excess wounds are lost.
Unless a champion is slain by a direct attack, then he must be the last rank and file model to be removed as a casualty. So if a unit of three models suffers 3 or more unsaved wounds, the champion is removed as one of the casualties. In essence, wounds inflicted on the unit can overflow onto the champion, but wounds inflicted on the champion cannot overflow onto the unit.