EXECUTIVE CHAIRMAN AGREEMENT
This Executive Chairman Agreement EXECUTIVE CHAIRMAN AGREEMENT (the “Agreement”)
is dated as of February 23, 2017, by and between PRA Group, Inc. (the
“Company”), and Steven D. Fredrickson (the “Executive”).
WITNESSETH:
WHEREAS, Executive has been employed by the Company as its Chief Executive
Officer (“CEO”) pursuant to that certain Employment Agreement dated as of
December 19, 2014 (the “Employment Agreement”);
WHEREAS, Executive is also currently serving as a member of the Board of
Directors of the Company (the “Board”);
WHEREAS, Executive wishes to retire from the role of CEO of the Company
effective as of June 1, 2017 (the “Chairman Date”) and to become Executive
Chairman of the Board as of such date; and
WHEREAS, from and after the Chairman Date, Executive shall no longer serve as
the CEO of the Company, but shall serve as a member of the Board and Executive
Chairman of the Board pursuant to the terms and conditions set forth herein; and
NOW THEREFORE, in consideration of the promises and mutual covenants herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Executive and the Company agree as follows:
1.Resignation as CEO. Effective as of the Chairman Date, Executive hereby
resigns from his role as CEO of the Company. From the date hereof through the
Chairman Date, the terms and conditions of Executive’s employment shall continue
to be governed by the Employment Agreement. Executive acknowledges and agrees
that as of the Chairman Date, he shall not be entitled to any payments or
benefits pursuant to Section 9 of the Employment Agreement or to any other
severance-type benefits in connection with such resignation (however,
Executive’s entitlements pursuant to Section 9 of the Employment Agreement
remain in effect until the Chairman Date).
2.Term. From the Chairman Date through the day of the Company’s 2018 annual
meeting of shareholders (the “Chairman Term”), in addition to serving as a
member of the Board, Executive shall serve as Executive Chairman of the Company
and shall remain an employee of the Company. The Chairman Term may not be
extended other than pursuant to a written agreement between the Company and
Executive, entered into not less than thirty (30) days prior to the expiration
of the Chairman Term. For the avoidance of doubt, nothing in this Agreement
requires the Company to continue to employ Executive as Executive Chairman or
restricts the Board from removing Executive from the Board to the extent
permitted by the Company’s governing documents and applicable law and subject to
the terms of this Agreement.
3. Duties. During the Chairman Term, Executive shall serve as Executive Chairman
of the Company, and shall, in a manner consistent with applicable legal and
corporate governance standards perform such duties requested of him by the CEO
and/or the Board, as appropriate.
4. Commitment. During and throughout the Chairman Term, Executive shall devote
substantially all of his business time and attention to the business and affairs
of the Company, except as permitted for PTO (as defined in Section 5.6). Subject
to Board approval, Executive may serve on the boards of directors of other
companies, engage in charitable and community affairs, or give attention to his
passive

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investments, provided that such activities do not interfere with the regular
performance of his duties and responsibilities under this Agreement or violate
any other provision of this Agreement.
5. COMPENSATION AND BENEFITS.
5.1Base Salary. During the Chairman Term, Executive shall be paid a base salary
(together with any increases, the “Base Salary”) at the annual rate of $600,000,
payable at such intervals as the other executive officers of the Company are
paid, but in any event at least on a monthly basis. The Compensation Committee
of the Board (the “Committee”) may increase the Base Salary throughout the
Chairman Term; provided, the Base Salary shall not be decreased below the stated
amount in this Agreement.
5.2Bonus Compensation. Executive shall be eligible to receive an annual bonus as
set forth in the Company’s Annual Bonus Plan (“Annual Bonus”). The Annual Bonus
for 2017 shall be determined pursuant to the terms of the Annual Bonus Plan as
approved by the Committee. For 2017, the Annual Bonus shall include a target
opportunity of $800,000 (this is adjusted to reflect 5 months in the CEO role
and 7 months in the Executive Chairman of the Board of Directors role). For
2018, the annual target opportunity will be $650,000. In the event that the
Chairman’s Term is extended by mutual agreement, pursuant to the Annual Bonus
Plan for subsequent years, the Committee will review the plan to determine
target participation levels and establish goals and subsequent payout levels
against those goals. Executive shall be treated on the same basis as other
senior executives of the Company for the purposes of bonus calculation relative
to target levels and administration of the Annual Bonus Plan.
5.3Equity Awards. Executive shall continue to be eligible to receive equity
awards (“Equity Awards”) as permitted by the Company’s Omnibus Incentive Plan
(as amended from time to time, the “Plan”), which is incorporated herein by
reference. Subject to this Section 5.3, any and all Equity Awards shall be
subject to the terms of the Plan, restrictions incorporated in the Company's
Insider Trading Policy, as well as any Equity Award agreements between Executive
and the Company. All Equity Awards shall vest as provided in the Plan and the
Equity Award agreements between Executive and the Company and, for the avoidance
of doubt, continued service on the Board shall count as continued service for
purposes of vesting in such Equity Awards, Executive is eligible for
“retirement” treatment (which includes pro rata vesting upon termination of
service), and Executive is entitled to “double-trigger” vesting protection in
connection with a “change in control” of the Company as provided in the Plan and
his Equity Award agreements; provided, however, that if the Board does not
nominate Executive for reelection to the Board at the Company’s 2018 annual
meeting of shareholders and Executive’s employment hereunder is not terminated
for Cause, Executive shall continue to be credited through December 31, 2018
with service credit for purposes of vesting in the Equity Awards.
5.4Clawbacks. Any compensation paid to Executive pursuant to this Agreement is
subject to any current or future claw-back policy instituted by the Company to
comply with any rules promulgated in the future, if any, pursuant to any law,
government regulation or stock exchange listing requirement. Any such clawback
policy shall be applied uniformly to all of the Company’s senior executives.
5.5Executive Benefits. In addition to the compensation discussed above, and
subject to the limitations imposed herein, during the Chairman Term Executive
shall continue to be eligible to (i) receive any employee benefits provided by
the Company to its employees generally from time-to-time, including, but not
limited to, life insurance, hospitalization, surgical, major medical and
disability insurance and sick leave, (ii) receive such employee benefit programs
as may be offered by the Company to other executives and (iii) be a full
participant in all of the Company’s other benefit plans, retirement plans and
profit-sharing plans which may be in effect from time to time or may hereafter
be adopted by the Company.

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5.6Paid Time Off During the Chairman Term. Executive shall be entitled to such
paid time off (“PTO”) during each calendar year of employment during the
Chairman Term consistent with the Company’s PTO policies then in effect and his
position as an executive of the Company, but in no event shall Executive be
entitled to fewer than twenty-five (25) PTO days (prorated for 2018) in any such
calendar year. Such time off shall be used for both vacation and sick leave, and
may be used for such purposes, in Executive’s discretion, upon prior notice to
the Board, at any time or times as are not inconsistent with the reasonable
business needs of the Company. At the end of 2017, Executive shall be entitled
to carry over up to ten (10) days of unused PTO into 2018, but, subject to
Section 6 with respect to payment of accrued PTO in certain termination
situations, Executive shall not be entitled to any additional compensation in
the event that Executive, for whatever reason, fails to use the entire amount of
any such PTO to which he is entitled during any calendar year of his employment
hereunder. Executive shall also be entitled to all paid holidays given by the
Company to its employees
5.7 Business and Entertainment Expenses. During the Chairman Term, the Company
shall reimburse Executive, upon presentation of appropriate vouchers or receipts
in accordance with the Company’s expense reimbursement policies, for all
reasonable out-of-pocket business travel and entertainment expenses incurred or
expended by Executive in connection with the performance of his duties under
this Agreement in accordance with the Company’s expense reimbursement policies,
in each case subject to the applicable terms, conditions, covenants and
stipulations set forth in Section 9.16 below with respect to Section 409A of the
Internal Revenue Code.
5.8 Legal Fees. Within fifteen (15) days following delivery of an invoice to the
Company, the Company shall pay to Outten & Golden LLP the reasonable legal fees
actually incurred by Executive in connection with the review and negotiation of
this Agreement, subject to a maximum payment of $15,000.
5.9Office Location/Support. During the Chairman Term, the Company shall provide
Executive with an office and administrative support as determined by the Chief
Executive Officer in consultation with Executive.
6. TERMINATION OF EXECUTIVE.
6.1 General. The Company or Executive may terminate Executive’s employment
hereunder at any time and for any reason by written notice to other party (other
than termination in the event of Executive’s death). In connection with any such
termination, the Company shall pay to Executive his Base Salary, accrued PTO
through the date of termination and any earned but unpaid Annual Bonus within 30
days following the termination date. In addition, if Executive’s employment is
terminated by the Company without Cause (and not due to death or Disability) or
due to a Constructive Termination, the Company shall continue to treat Executive
as if he remained employed by the Company through the end of the Chairman Term
for purposes of Sections 5.1, 5.2 and 5.5, and he shall continue to receive the
payments and benefits specified therein through the end of the Chairman Term,
(it being understood that any Annual Bonus payments, shall be based upon actual
Company performance and prorated for the days of employment in the calendar year
of termination and shall be paid in a single lump sum no later than March 15 of
the year following the year of termination). Except as provided in the Plan or
the applicable award agreement with respect to Equity Awards, Executive shall
have no further rights following his termination of employment with respect to
his service as Executive Chairman hereunder. The payments in the third sentence
of this Section 6.1 constitute liquidated damages for any claim by Executive of
breach of contract or any other matters related to the termination of
Executive's employment by the Company hereunder. In order to receive any of the
applicable payments set forth in the third sentence of this Section 6.1 upon the
termination of his employment, and as an express condition to the Company's
obligation to make such payments, (a) within 30 days following Executive’s
termination date, (i) Executive shall execute and agree to be bound by an
agreement providing for the waiver

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and general release of any and all claims arising out of or relating to
Executive’s employment and termination of employment (the “Release”), in the
form as the Company's Office of General Counsel may require, and (ii) to the
extent the Release includes a statutory revocation/rescission period, such
period shall have expired without Executive having revoked the Release;
provided, in the event such period spans two calendar years, any such payments
will be made in the second calendar year; and (b) Executive shall agree to
continue to be bound by, and shall continue to comply with, all surviving
obligations of Executive hereunder, including, without limitation, Executive's
obligations under Section 7 hereof.
Definition of Constructive Termination. The term “Constructive Termination” as
used herein shall mean any material breach by the Company of this Agreement
(without Executive’s consent), including but not limited to Executive being
removed from the Board, any change or reduction in Executive’s compensation and
benefits described in Section 5 of this Agreement or Executive being required to
provide the services hereunder at a location more than 75 miles from Norfolk,
Virginia. Notwithstanding the foregoing, in order to be eligible for any
Constructive Termination payment or benefit described in this Agreement: (i) the
Company shall have 30 days to cure any action perceived to be a Constructive
Termination, upon notice in writing from the Executive, which notice must be
provided within 90 days after Executive knew or should have known of such action
and (ii) Executive must terminate employment within 60 days after the cure
period has ended.
6.2Death. In the event of the death of Executive during the Chairman Term,
Executive’s employment hereunder shall automatically terminate as of the date of
death, and Executive’s designated beneficiary or, in the absence of such
designation, the estate or other legal representative of Executive
(collectively, the “Estate”), shall be entitled to receive (i) the Base Salary
through the end of the month in which the death occurs, accrued PTO as of the
date of death, and any earned but unpaid Annual Bonus paid in a single lump sum
within 30 days following the date of death, and (ii) a pro-rata Annual Bonus
(based upon target bonus, and prorated by the days of employment in the calendar
year of termination), to be paid in a single lump sum within 30 days following
the date of death. The Estate shall be entitled to any other applicable death
benefits in accordance with the terms of the Company's benefit programs and
plans. In addition, any unvested Equity Awards shall vest immediately (at target
in the case of performance-based awards) upon Executive's death during the
Chairman Term.
6.3Disability. In the event Executive is unable to render the services or
perform the duties of his employment hereunder during the Chairman Term by
reason of illness, injury or incapacity (whether physical, mental, emotional or
psychological) for a period of either (i) 90 consecutive days or (ii) a total of
180 days, whether or not consecutive, within the preceding 365-day period (any
of the foregoing, as determined in accordance with the following sentence, shall
be referred to herein as a “Disability”), the Company shall have the right (but
not the obligation) to terminate Executive’s employment hereunder by providing
Executive with 30 days' prior written notice. Any determination of Disability
shall be made in good faith by a physician, specializing in the disability in
question, selected jointly by Executive and the Company (or if Executive and the
Company cannot agree, by two physicians, one selected by the Company and one
selected by Executive). If Executive’s employment hereunder is so terminated by
reason of Disability, Executive shall be entitled to receive (i) the Base Salary
through the end of the month in which the Disability termination occurs, accrued
PTO through the date of Disability termination and any earned but unpaid Annual
Bonus, paid in a single lump sum within 30 days following the date of
termination, and (ii) a pro-rata Annual Bonus (based upon target bonus and the
days of employment in the calendar year of termination), to be paid in a single
lump sum within 30 days following the termination date, less (iii) the aggregate
amounts (if any) payable under any disability insurance policy provided by the
Company that is then in effect. Executive shall be entitled to receive all
applicable disability benefits in accordance with the terms of this Section 6.3
and of the Company's benefit programs and plans. Any unvested Equity Awards
shall vest immediately (at target

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in the case of performance-based awards) upon Executive's Disability termination
during the Chairman Term. Notwithstanding any other provision contained herein,
all leaves, accommodations and payments made in connection with Executive’s
Disability shall be provided in a manner consistent with applicable federal and
state law.
6.4 Termination of Employment by the Company for Cause. Nothing herein shall
prevent the Company from terminating the Executive’s employment, and the Company
has and shall have the right (exercisable immediately on notice to Executive,
subject to any right of Executive as may be specified herein, if any, to cure
any action, inaction, event or other circumstance that otherwise constitutes
Cause) to terminate Executive’s employment, for Cause (as hereinafter defined).
From and after the effective date of termination for Cause, Executive shall not
receive any further benefits, any unearned Base Pay, and shall not be entitled
to receive any further Annual Bonuses or Equity Awards, regardless of the
performance of the Company. Any rights and benefits which Executive may have in
respect of any other compensation or any employee benefit plans or programs of
the Company shall be determined in accordance with the terms of such
compensation arrangements or plans or programs or otherwise pursuant to
applicable law. Any unvested Equity Awards shall be forfeited upon Executive’s
termination for Cause.
Definition of Cause. The term “Cause,” as used herein, shall mean any of the
following: (A) Executive’s conviction of, or plea of guilty or nolo contendere
to, any felony, including a felony traffic related offense or other offense that
would materially affect Executive’s ability to perform or the reputation of the
Company; (B) Executive’s engaging in illegal or willful misconduct, or engaging
in misconduct that is having or may have an adverse effect on the financial
performance, financial condition and/or reputation of the Company or any
subsidiaries or affiliates thereof, including, but not limited to, a willful
violation of Section 7 of this Agreement; (C) Executive’s embezzlement of funds
or misappropriation of other material property of the Company or any subsidiary
or affiliate thereof; (D) Executive breaching this Agreement in a material
manner, (E) Executive engaging in a material (critical or continuous) violation
of the Company’s written policies and procedures as outlined in the Company’s
Executive Handbook (or a successor Company’s handbook) and applicable broadly to
all employees; or (F) Executive’s fraudulent conduct as regards the Company,
which results either in personal enrichment to Executive or injury to the
Company or its subsidiaries or affiliates. No Cause shall exist unless the
Company has given Executive written notice describing the particular action(s)
or inaction(s) giving rise to the termination for Cause. No action(s) or
inaction(s) will constitute Cause unless (i) a resolution finding that Cause
exists has been approved by a majority of all of the members of the Board at a
meeting at which Executive is allowed to appear with his legal counsel and (ii)
where remedial action is feasible if the grounds for “Cause” are (D) or (E)
hereof, Executive fails to remedy the action(s) or inaction(s) within fifteen
(15) days after receiving the notice. If Executive so effects a cure with
respect to (D) or (E) to the satisfaction of the Board, the notice of Cause
shall be deemed rescinded and of no force or effect.
7. CONFIDENTIAL INFORMATION; NONCOMPETITION AND NONSOLICITATION.
7.1 Confidential Information.
(i) Executive covenants and agrees that he will not at any time, either during
the Chairman Term or thereafter, use, disclose or make accessible or available
to any other person, firm, partnership, corporation or any other entity any
Confidential Information (as defined below) pertaining to the business of the
Company or any of its subsidiaries or affiliates, except (i) while employed by
the Company, in the business of and for the benefit of the Company, or (ii) when
required to do so by a subpoena, by any court of competent jurisdiction, by any
governmental agency having supervisory authority over the business of the
Company, or by any administrative body or legislative body (including a
committee thereof) with

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jurisdiction to order the Company to divulge, disclose or make accessible such
information. For purposes of this agreement, “Confidential Information” shall
mean non-public information concerning the Company’s or any of its subsidiaries’
or affiliates’ financial data, statistical data, strategic business plans,
product development (or other proprietary product data), customer and supplier
lists, customer and supplier information, information relating to practices,
processes, methods, trade secrets, marketing plans and other non-public,
proprietary and confidential information of the Company or any of its
subsidiaries or affiliates; provided, however, that Confidential Information
shall not include any information which (x) is known generally to the public
other than as a result of unauthorized disclosure by Executive, (y) becomes
available to Executive on a non-confidential basis from a source other than the
Company or any of its subsidiaries or affiliates that lawfully obtained such
information or (z) was available to Executive on a non-confidential basis prior
to its disclosure to Executive by the Company or any of its subsidiaries or
affiliates. In addition to and not in limitation of anything in the foregoing,
it is specifically understood and agreed by Executive that any and all
Confidential Information received by Executive during his Employment by the
Company is deemed Confidential Information for purposes of this Agreement.
Notwithstanding anything in this Section 7.1, Section 7.6 or in any other
agreement to the contrary, Executive shall not be held liable under this
Agreement or any other agreement or any federal or state trade secret law for
making any confidential disclosure of a Company trade secret or other
confidential information to a government official or an attorney for purposes of
reporting a suspected violation of law or regulation, or in a court filing under
seal.
(ii) In the event Executive’s Employment is terminated hereunder for any reason,
he immediately shall return to the Company all tangible Confidential Information
(including any and all copies thereof) in his possession. Executive and the
Company agree that the covenants in this Section 7.1 regarding Confidential
Information are reasonable covenants under the circumstances and further agree
that if, in the opinion of any court of competent jurisdiction, any such
covenant is not reasonable or is unenforceable in any respect, such court shall
have the right, power and authority to excise or modify such provision or
provisions of such covenants as appear to the court not reasonable or
unenforceable and to enforce the remainder of the covenant as so amended, and to
that end the provisions of this Section 7.1 shall be deemed severable. Executive
agrees that any breach of any covenant contained in this Section 7.1 would
irreparably injure the Company. Accordingly, Executive agrees that the Company,
in addition to pursuing any other remedies it may have in law or in equity, may
obtain an injunction against Executive from any court having jurisdiction over
the matter restraining any breach or threatened breach of this Section 7.1. The
Company may claw back any post-employment payments paid or payable to Executive
under the second sentence of Section 6.1 in the event that Executive breaches
this Section 7.1.
7.2Noncompete. As additional consideration for Executive’s employment with the
Company, the compensation paid and payable to Executive hereunder and to induce
the Company to execute and deliver to Executive this Agreement, Executive agrees
that during the Restricted Period (as defined in Section 7.5 below), without the
prior written consent of the Board, Executive shall not be, nor shall he assist
or enable any person or entity to become, a principal, manager, officer,
director, agent, consultant or executive or management employee of, or directly
or indirectly own more than 1% of any class or series of equity securities in,
any entity or business which at such time has material operations that are
engaged in any business activity competitive (directly or indirectly) with the
Business of buying or servicing distressed consumer debt (the “Business”).
Notwithstanding the foregoing, an entity will not be deemed to be competitive
with the Business, and Executive will not be deemed to be engaged in the
Business in violation of the terms of this Section 7.2, if (A) Executive is
employed by an entity that is meaningfully engaged in one or more enterprises
whose principal business is other than the Business (the “Non-Competing
Businesses”), (B) such entity’s relationship with Executive relates solely to
the Non-Competing Businesses, and (C) if requested by the Company, such entity
and Executive provide the Company with reasonable assurances that Executive will
have no direct or indirect involvement in the Business on behalf of such entity.

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7.3Nonsolicitation. As additional consideration for Executive’s employment with
the Company, the compensation paid and payable to Executive hereunder and to
induce the Company to execute and deliver to Executive this Agreement, Executive
agrees that during the Restricted Period, without the prior written consent of
the Company, Executive shall not, on his own behalf or on behalf of any person
or entity (other than on behalf of the Company), directly or indirectly, (i)
solicit the clients, employees, customers or suppliers of the Company or any of
its affiliates or subsidiaries to terminate their relationship or modify such
relationship in a manner that is adverse to the interests of the Company and its
affiliates and subsidiaries or (ii) engage, hire or solicit the employment of,
whether on a full-time, part-time, consulting, advising, or any other basis, any
employee who was employed by the Company or its affiliates or subsidiaries on
the effective date of Executive’s termination or at any time during the six (6)
months preceding such termination date. This provision does not prohibit the
solicitation of employees by means of a general advertisement.
7.4 Treatment of Covenants. Executive agrees that the covenants of
non-competition and non-solicitation in Sections 7.2 and 7.3 are reasonable
covenants under the circumstances and further agrees that if, in the opinion of
any court of competent jurisdiction, any such covenants are not reasonable or
are unenforceable in any respect, such court shall have the right, power and
authority to excise or modify such provision or provisions of these covenants as
appear to the court not reasonable or unenforceable and to enforce the remainder
of these covenants as so amended, and to that end the provisions of Sections 7.2
and 7.3 shall be deemed severable. Executive agrees that any breach of the
covenants contained in Sections 7.2 and 7.3 would irreparably injure the Company
and its subsidiaries and affiliates. Accordingly, Executive agrees that the
Company, in addition to pursuing any other remedies it may have in law or in
equity, may obtain an injunction against Executive from any court having
jurisdiction over the matter restraining any breach or threatened breach of
Section 7.2 or 7.3. The Company may claw back any post-employment payments paid
or payable to Executive under the second sentence of Section 6.1 in the event
that Executive breaches Section 7.2 or Section 7.3.
7.5Restricted Period. The provisions of Sections 7.2 through 7.4 shall be in
effect for the duration of Executive’s employment and shall survive the
termination for any reason of Executive’s Employment with the Company for a
period of two years after the effective date of such termination (the
“Restricted Period”).
7.6Nondisparagement. Executive agrees that he shall not disparage the Company
(or any affiliate) or any director or officer of the Company in any way that
materially and adversely affects the goodwill, reputation or business
relationships of the Company or the affiliate or the director or officer with
the public generally, or with any of the Company’s or any of its affiliates’
customers, vendors or employees. The Company shall instruct the members of the
Board and its executive officers not to disparage Executive in any way that
materially and adversely affects him or his reputation or business relationships
8. INDEMNIFICATION .
Executive shall be entitled at all times to the benefit of the maximum
indemnification and advancement of expenses available from time to time under
the laws of the State of Delaware, and such benefit shall not be less than that
available to any other officer or director entitled to indemnification by the
Company. Without limiting the foregoing, Executive shall also be entitled to the
benefit of the following provisions:
8.1D&O Insurance. Executive shall be covered under any directors’ and officers’
(“D&O”) liability insurance policy then in effect for the directors and/or
officers of the Company and/or any of its subsidiaries or affiliates; provided,
the failure to have a D&O insurance policy in effect at all times shall not,
alone, allow Executive to assert a claim for breach of this Agreement by the
Company. The Company shall provide Executive a copy of any D&O liability
insurance policy then in effect upon request

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8.2Scope of Indemnification. In addition to any D&O insurance coverage provided
for in Section 8.1 above, the Company and any of the Company’s affiliates as to
which Executive has at any time served as a director, officer, employee, agent
or fiduciary (collectively, the “Indemnitors”) shall jointly and severally hold
harmless and indemnify Executive (and his heirs, executors and administrators)
to the fullest extent permitted under applicable law against all reasonable
expenses and liabilities incurred by him in connection with or arising out of
any action, suit or proceeding (each, a “Claim”) in which he may be involved by
reason of him having served as a director, officer, employee, agent or fiduciary
of any Indemnitor (whether or not he continues to serve as a director, officer,
employee, agent or fiduciary thereof at the time such expenses or liabilities
are uncured), or by reason of any such action or inaction on Executive’s part
while serving in any such capacity, such expenses and liabilities to include,
but not necessarily be limited to, losses, damages, judgments, investigation
costs, court costs, costs related to acting as a witness and attorneys’ fees and
the cost of settlements approved in advance by the Company.
8.3 Selection of Counsel. In the event the Indemnitors shall be obligated
hereunder to provide Executive with any legal defense with respect to a Claim,
the Indemnitors shall be entitled to assume the defense of such Claim with
counsel of the Indemnitors’ choosing, upon the delivery to Executive of written
notice of their election to do so. After delivery of such notice and the
retention of such counsel by the Indemnitors, the Indemnitors shall not be
liable to Executive under this Agreement for any fees of counsel (or related
costs and expenses) subsequently incurred by Executive with respect to the same
Claim; provided that (i) Executive shall have the right to employ counsel in any
such Claim at his sole expense; and (ii) if (A) the employment of counsel by
Executive has been previously authorized in writing by the Indemnitors, (B)
counsel for Executive shall have provided the Indemnitors with a written opinion
that there is a conflict of interest between the Indemnitors and Executive in
the conduct of any such defense or (C) the Indemnitors shall fail to retain (or
discontinue the retention of) such counsel to defend such Claim, then the fees
and expenses of Executive’s counsel shall be at the expense of the Indemnitors.
8.4Nonexclusivity. The indemnity rights set forth in this Section 8 shall be in
addition to and not in limitation of any rights to which Executive may be
entitled under any of the Indemnitors’ charter documents, bylaws or agreements,
any vote of stockholders or disinterested directors, and/or the laws of the
various Indemnitors’ jurisdictions of formation or incorporation.
8.5 Survival. The indemnification rights provided for in this Section 8 shall
(i) remain in full force and effect after any termination of Executive’s
Employment and without regard to any investigation made by or on behalf of
Executive or any agent or representative of Executive, and (ii) continue as to
Executive for any action or inaction of Executive while serving as a director,
officer, employee agent or fiduciary of any Indemnitor even though Executive may
have ceased to serve in such capacity.
9. MISCELLANEOUS.
9.1Limitation of Liability and Indemnity. The limitation of liability and
indemnity provisions of Section 8 of that certain Amended and Restated By-Laws
of the Company and Article 9 of that certain Amended and Restated Certificate of
Incorporation of the Company are a contractual benefit to Executive and are a
material consideration for Executive’s employment.
9.2Excise Tax. In the event that Executive becomes entitled to any payments or
benefits under this Agreement and any portion of such payments or benefits, when
combined with any other payments or benefits provided to Executive (including,
without limiting the generality of the foregoing, by reason of the exercise or
vesting of any stock options or the receipt or vesting of any shares of stock of
the Company), which in the absence of this Section 9(g) would be subject to the
tax (the “Excise Tax”) imposed by Section 4999 of the Internal Revenue Code of
1986, as amended (the “Code”), then the amount payable to Executive

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under this Agreement shall, either (i) be reduced to the largest amount or
greatest right such that none of the amounts payable to Executive under this
Agreement and any other payments or benefits received or to be received by
Executive as a result of, or in connection with, an event constituting a change
in the ownership or effective control of the Company or in the ownership of a
substantial portion of the assets of the Company (within the meaning of Section
280G(b)(2)(A) of the Code) or the termination of employment shall be treated as
“parachute payments” within the meaning of Section 280G(b)(2) of the Code or
(ii) be made in full, with Executive bearing full responsibility for any Excise
Tax liability, whichever of (i) or (ii) provides Executive with a larger net
after-tax amount. The Company shall cooperate in good faith with Executive in
making such determination, including but not limited providing Executive with an
estimate of any parachute payments as soon as reasonably practicable prior to an
event constituting a change in the ownership or effective control of the Company
or in the ownership of a substantial portion of the assets of the Company
(within the meaning of Section 280G(b)(2)(A) of the Code). Any reduction
pursuant to the immediately-preceding sentence shall be made in a manner
compliant with Section 409A of the Internal Revenue Code
9.3Entire Agreement. This Agreement contains the entire agreement between the
parties hereto with respect to the matters contemplated herein and supersedes
all prior agreements or understandings among the parties related to such
matters. In case of any conflict between the provisions hereof and the
provisions of any other agreement or understanding between the parties with
respect to such matters (including, without limitation, the Company’s Executive
Handbook), the provisions of this Agreement shall be controlling.
9.4Notices. All notices and other communications hereunder shall be in writing
and shall be deemed to have been given if delivered personally or sent by
facsimile transmission, overnight courier, or certified, registered or express
mail, postage prepaid. Any such notice shall be deemed given when so delivered
personally or sent by facsimile transmission (provided that a confirmation copy
is sent by overnight courier), one day after deposit with an overnight courier
or, if mailed, five days after the date of deposit in the United States mails,
as follows (or to another address specified in writing by the recipient prior to
the sending of such notice or communication
To the Company:
PRA Group, Inc.
150 Corporate Boulevard
Norfolk, VA 23502
Attn: General Counsel
Fax: (757) 321-2518

To Executive:
Steven D. Fredrickson

with copy to:

Katherine Blostein
Outten & Golden LLP
685 Third Avenue
New York, NY 10017

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9.5 Successors; Binding Effect. Except as otherwise provided herein, this
Agreement shall be binding upon, and inure to the benefit of, the Company and
its successors and assigns and Executive. “Successors and assigns” shall mean,
in the case of the Company, any parent, subsidiary or affiliate of the Company
or any successor to the Company pursuant to a merger, consolidation, sale or
other transfer of all or substantially all of the assets or equity of the
Company, provided that, should the Company assign or transfer this Agreement,
the Company will require any successor to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such assignment or transfer had taken place.
9.6 No Assignment. Except as contemplated by Section 9.5 above, this agreement
shall not be assignable or otherwise transferable by either party
9.7Withholding. All payments hereunder shall be subject to any required
withholding of federal, state and local taxes pursuant to any applicable law or
regulation.
9.8 Amendment or Modification; Waiver. No provision of this Agreement may be
amended or waived unless such amendment or waiver is authorized by the Board of
Directors of the Company and is agreed to in writing, signed by Executive and by
a duly authorized officer of the Company (other than Executive). Except as
otherwise specifically provided in this Agreement, no waiver by either party
hereto of any breach by the other party hereto of any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of a
similar or dissimilar provision or condition at the same or at any prior or
subsequent time.
9.9 Fees and Expenses. Either party may institute an action or proceeding to
enforce the rights the party may have under this Agreement, to obtain a
declaration of a party’s rights or obligations hereunder, to set aside any
provision hereof, for damages by reason of any alleged breach of any provision
of this Agreement, or for any other judicial remedy. The court or arbitrator (if
applicable) shall have the authority to require the losing party in any such
action or proceeding to reimburse the prevailing party for of all of its
reasonable costs and expenses incurred in connection therewith, including, but
not limited to, reasonable attorneys’ fees and disbursements.
9.10 Arbitration. In the event of any dispute arising out of or relating to this
Agreement or Executive’s employment with the Company, the parties agree first to
engage in prompt and serious good faith discussions to resolve the dispute. If
such discussions fail to resolve the dispute within 30 days, the parties shall
try to resolve the dispute through mediation. If such mediation fails to resolve
the dispute, Executive and the Company agree that any and all disputes, claims
or controversies arising out of or related to this Agreement, including any
claims under any statute or regulation (“Disputes”), shall be submitted for
binding arbitration; provided that any action by the Company to enforce Section
7 may be brought in a court of appropriate jurisdiction. Unless the parties
agree otherwise, any mediation and/or arbitration shall take place in Norfolk,
Virginia, and shall be administered by, and pursuant to the rules of, the
American Arbitration Association. The Company agrees to pay any costs of the
mediation and arbitration including the fees of the mediator and arbitrator(s)
(but not, for the avoidance of doubt, any other expenses except as provided in
the last sentence of Section 9.9).
9.11Governing Law. The validity, interpretation, construction, performance and
enforcement of this Agreement shall be governed by the laws of the Commonwealth
of Virginia, without regard to its conflicts of law rules.

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9.12Employment Agreements. As of the Chairman Date, the Employment Agreement
shall be null and void and neither Executive nor the Company shall have any
rights or obligations thereunder other than pursuant to sections 5 and 13
thereof with respect to events occurring prior to the Chairman Date.
9.13Titles. Titles to the Sections in this Agreement are intended solely for
convenience and no provision of this Agreement is to be construed by reference
to the title of any Section.
9.14Counterparts. This Agreement may be executed in one or more counterparts,
which together shall constitute one agreement. It shall not be necessary for
each party to sign each counterpart so long as each party has signed at least
one counterpart.
9.15Severability. Any term or provision of this Agreement that is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms and provisions of
this Agreement in any other jurisdiction.
9.16Section 409A. Any benefit, payment or other right provided for under this
Agreement shall be provided or made in such manner, at such time, in such form
and subject to such election procedures (if any) as complies with the applicable
requirements of Section 409A of the Code and the regulations and other authority
promulgated pursuant to Section 409A of the Code to avoid a failure described in
Code Section 409A(a)(1), including, without limitation, deferring payment until
the occurrence of a specified payment event described in Code Section
409A(a)(2). Accordingly, notwithstanding any other provision hereof or document
pertaining hereto, (x) this Agreement shall be so construed and interpreted to
meet all applicable requirements of Code Section 409A, and (y) without limiting
the generality of the foregoing, but more specifically:
(i) All references to a termination of employment and separation from service
shall mean and be administered to comply with the definition of “separation from
service” in Code Section 409A.
(ii) If Executive is a “specified employee” (as defined under Code Section 409A)
at the time of separation from service, then to the extent that any amount
payable under this Agreement constitutes “deferred compensation” under Code
Section 409A (and is not otherwise excepted from Code Section 409A coverage,
whether by virtue of being considered “separation pay” or a “short term
deferral” or otherwise) and is payable to Executive based upon a separation from
service (other than death or “disability” as defined under Code Section 409A),
such amount shall not be paid until the first to occur of (i) the first day
following the six-month anniversary of Executive’s separation from service, or
(ii) Executive’s death; except (A) to the extent of amounts that do not
constitute a deferral of compensation within the meaning of Treasury regulation
Section 1.409A-1(b) (including without limitation by reason of the safe harbor
set forth in Treasury regulation Section 1.409A-1(b)(9)(iii), as determined by
the Company in its reasonable good faith discretion); (B) benefits which qualify
as excepted welfare benefits pursuant to Treasury regulation Section
1.409A-1(a)(5); or (C) other amounts or benefits that are not subject to the
requirements of Code Section 409A.
(iii) All expense reimbursements provided for under this Agreement shall comply
with Code Section 409A and shall be subject to the following requirements: (i)
the amount of expenses eligible for reimbursement during Executive’s taxable
year may not affect the expenses eligible for reimbursement to be provided in
another taxable year; (ii) the reimbursement of any eligible expense must be
effected by December 31 following the taxable year in which the expense was
incurred; and (iii) the right to reimbursement is not subject to liquidation or
exchange for another benefit.

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(iv) Any right to a series of installment payments shall be treated as a right
to a series of separate payments for purposes of Code Section 409A.

[Signature page follows.]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first set forth above.

PRA GROUP, INC.

/s/ Christopher D. Lagow
Name: Christopher D. Lagow
Title: SVP, General Counsel and Assistant Secretary

/s/ Steven D. Fredrickson
Steven D. Fredrickson