FIRST AMENDED EXECUTIVE CHAIRMAN AGREEMENT
This FIRST AMENDED EXECUTIVE CHAIRMAN AGREEMENT (the “Agreement”) is dated as of
May 18, 2018 (the “Effective Date”), by and between PRA Group, Inc. (the
“Company”), and Steven D. Fredrickson (the “Executive”).
WITNESSETH:
WHEREAS, Executive has been employed by the Company as Executive Chairman of the
Board since June 1, 2017 and is also currently serving as a member of the Board
of Directors of the Company (the “Board”), both pursuant to that certain
Executive Chairman Agreement dated as of February 23, 2017 (the “Executive
Chairman Agreement”); and
WHEREAS, Executive and the Company desire to make certain amendments to the
Executive Chairman Agreement, including but not limited to extending the term of
the Executive Chairman Agreement.
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. Term. From the Effective Date through December 31, 2019 (the “Extended
Chairman Term”), Executive shall serve as a member of the Board and as Executive
Chairman of the Company and shall be an employee of the Company. The Extended
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 Extended 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.
2. Duties. During the Extended 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
Chief Executive Officer and/or the Board, as appropriate.
3. Commitment. During and throughout the Extended 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 4.6)
and for Disability (as defined in Section 5.3). 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 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.

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4. COMPENSATION AND BENEFITS.
4.1 Base Salary. During the Extended 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 Extended Chairman Term; provided, the Base Salary shall not be decreased
below the stated amount in this Agreement.
4.2 Bonus Compensation. Executive shall be eligible to receive an annual bonus
as set forth in the Company’s Annual Bonus Plan(as amended from time to time,
the “Annual Bonus”). For 2018, the Annual Bonus shall include a target
opportunity of $[650,000]. For 2019 (and any subsequent year in the event that
the Extended Chairman’s Term is extended by mutual written agreement pursuant to
Section 1), the Committee will review the Annual Bonus Plan to determine the
Executive’s target participation level 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.
4.3 Equity 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”). Subject to this Section 4.3, any and
all Equity Awards shall be subject to the terms of the Plan, restrictions
incorporated in the Company’s Insider Trading Policy, and 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.
4.4 Clawbacks. 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.
4.5 Executive Benefits. In addition to the compensation discussed above, and
subject to the limitations imposed herein, during the Extended 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. Executive’s benefit entitlement shall be governed

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by the terms and conditions of the plan documents and/or Company policies
applicable to each such benefit.
4.6 Paid Time Off. Executive shall be entitled to such paid time off (“PTO”)
during each calendar year of employment during the Extended 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 in any such calendar year. PTO days used by the
Executive during calendar year 2018 prior to the Effective Date shall be counted
towards Executive’s PTO allotment for calendar year 2018. 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.
Executive shall not be entitled to carry over unused PTO, and subject to Section
5 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
4.7 Business and Entertainment Expenses. During the Extended 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 8.15 below with respect to Section 409A of the
Internal Revenue Code (the “Code”).
4.8 Office Location/Support. During the Extended Chairman Term, the Company
shall provide Executive with an office and administrative support as determined
by the Chief Executive Officer in consultation with Executive.
5. TERMINATION OF EXECUTIVE.
5.1 General. The Company or Executive may terminate this Agreement and
Executive’s employment hereunder at any time and for any reason by written
notice to the other party (other than termination in the event of Executive’s
death). In connection with any such termination, within 30 days following the
termination date, the Company shall pay to Executive his Base Salary through the
date of termination, accrued but unused PTO through the date of termination, and
any earned but unpaid Annual Bonus. In addition, if Executive’s employment is
terminated by the Company without Cause (and not due to death, Disability, or a
Nonrenewal Termination) or by Executive 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 Extended Chairman Term for purposes of Sections
4.1, 4.2 and 4.5, and he shall continue to receive the payments and benefits
specified therein through the end of the Extended 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

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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 5.1
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 5.1 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 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 continue to
comply with, all surviving obligations of Executive hereunder, including,
without limitation, Executive’s obligations under Section 6 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 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 30 days after Executive knew or should have known of such action
and (ii) Executive must terminate employment within 30 days after the cure
period has ended.
5.2 Death. In the event of the death of Executive during the Extended Chairman
Term, this Agreement and 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 but
unused 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 Extended Chairman Term.
5.3 Disability. In the event Executive is unable to render the services or
perform the duties of his employment hereunder during the Extended Chairman Term
by reason of illness, injury or incapacity (whether physical, mental, emotional
or psychological), with or without any reasonable accommodation, for a period of
either (i) 90 consecutive days or (ii) a total of 180 days, whether

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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 this Agreement and 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 this Agreement and 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 but unused 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 5.3 and of the Company’s benefit
programs and plans. Any unvested Equity Awards shall vest immediately (at target
in the case of performance-based awards) upon Executive’s Disability termination
during the Extended 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.
5.4 Termination of Employment by the Company for Cause. This Agreement and
Employee’s Employment hereunder shall be terminated for Cause (as hereinafter
defined) 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. From and after the effective date
of termination for Cause, Executive shall not receive any further benefits, any
unearned Base Salary, 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 non-felony
offense that would materially affect Executive’s ability to perform his duties
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 6 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

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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.
5.5 Nonrenewal Termination. If the Executive’s employment continues until the
expiration of the Extended Chairman Term and the Executive’s employment is not
renewed or extended by the written agreement of the parties, the Company shall
have the right to terminate Executive’s employment hereunder within 30 days
following the expiration of the Extended Chairman Term. Such termination is
referred to herein as a “Nonrenewal Termination.”
6. CONFIDENTIAL INFORMATION; NONCOMPETITION AND NONSOLICITATION.
6.1 Confidential Information.
(i) Executive covenants and agrees that he will not at any time, either during
the Extended 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 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

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Confidential Information received by Executive during his Employment by the
Company is deemed Confidential Information for purposes of this Agreement.
(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.
(iii) Executive and the Company agree that the covenants in this Section 6.1
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 6.1 shall be deemed
severable. Executive agrees that any breach of any covenant contained in this
Section 6.1 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 6.1. The Company may claw back any post-employment payments paid or
payable to Executive under the third sentence of Section 5.1 in the event that
Executive breaches this Section 6.1.
(iv) Notwithstanding the foregoing, nothing in this Agreement shall prohibit or
restrict Executive from lawfully (i) initiating communications directly with,
cooperating with, providing information to, causing information to be provided
to, or otherwise assisting in an investigation by the Securities and Exchange
Commission, the Department of Justice, the Equal Employment Opportunity
Commission, the Congress, or any other governmental or regulatory agency,
entity, or official(s) or self-regulatory organization (collectively,
“Governmental Authorities”) regarding a possible violation of any law, rule, or
regulation; (ii) responding to any inquiry or legal process directed to
Executive individually (and not directed to the Company and/or its subsidiaries)
from any such Governmental Authorities; (iii) testifying, participating or
otherwise assisting in an action or proceeding by any such Governmental
Authorities relating to a possible violation of law; or (iv) making any other
disclosures that are protected under the whistleblower provisions of any
applicable law, rule, or regulation. Nor does this Agreement require Executive
to obtain prior authorization from the Company before engaging in any conduct
described in this paragraph, or to notify the Company that Executive has engaged
in any such conduct. Moreover, nothing in this Agreement prohibits Executive
from disclosing a Company trade secret (i) in confidence to a Federal, State, or
local government official, or to an attorney, solely for the purpose of
reporting or investigating a suspected violation of law or (ii) in a complaint
or other document filed in a lawsuit or other proceeding, if such filing is made
under seal. If Executive files a lawsuit for retaliation by an employer for
reporting a suspected violation of law, Executive may disclose a Company trade
secret to the Executive’s attorney and use the trade secret information in the
court proceeding if Executive files any document containing the trade secret
under seal and does not disclose the trade secret except pursuant to court
order.

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6.2 Noncompete. As additional consideration for Executive’s continued 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 6.5
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 engaged in buying or servicing
distressed consumer debt (the “Business”). Notwithstanding the foregoing,
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.
6.3 Nonsolicitation. As additional consideration for Executive’s continued
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.
6.4 Treatment of Covenants. Executive agrees that any breach of the covenants
contained in Sections 6.2 and 6.3 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 6.2 or 6.3.
The Company may claw back any post-employment payments paid or payable to
Executive under the third sentence of Section 5.1 in the event that Executive
breaches Section 6.2 or Section 6.3.
6.5 Restricted Period. The provisions of Sections 6.2 and 6.3 shall be in effect
for the duration of Executive’s employment and shall survive the termination of
Executive’s employment by either party for any reason for a period of two years
after the effective date of such termination (the “Restricted Period”).
6.6 Nondisparagement. 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

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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.
7. INDEMNIFICATION.
7.1 General. 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.
7.2 D&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 Company is not obligated to maintain any such D&O insurance policy. The
Company shall provide Executive a copy of any D&O liability insurance policy
then in effect upon request.
7.3 Scope of Indemnification. In addition to any D&O insurance coverage provided
for in Section 7.1 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.
7.4 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.

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7.5 Nonexclusivity. 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.
7.6 Survival. The indemnification rights provided for in this Section 7 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.
8. MISCELLANEOUS.
8.1 Limitation 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.
8.2 Excise 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 Code, then the amount
payable to Executive 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
8.3 Entire 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, including, but not limited to, the Executive Chairman Agreement. 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,

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without limitation, the Company’s Executive Handbook), the provisions of this
Agreement shall be controlling.
8.4 Notices. 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
P.O. Box 965
Virginia Beach, VA 23451

8.5 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.
8.6 No Assignment. Except as contemplated by Section 8.5 above, this Agreement
shall not be assignable or otherwise transferable by either party
8.7 Withholding. All payments hereunder shall be subject to any required
withholding of federal, state and local taxes pursuant to any applicable law or
regulation.
8.8 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

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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.
8.9 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.
8.10 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 or Executive’s
employment with the Company, including any claims under any statute or
regulation, shall be submitted for binding arbitration; provided that any action
by the Company to enforce Section 6 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 8.9). The decision
of the arbitrator shall be final and binding on all parties.
8.11 Governing 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.
8.12 Titles. 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.
8.13 Counterparts. 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.
8.14 Severability. 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.
8.15 Section 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

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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.
(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/ Kevin P. Stevenson
Kevin P. Stevenson
President and Chief Executive Officer

/s/ Steven D. Fredrickson
Steven D. Fredrickson
 
 

                            

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