Document:

Exhibit

EXHIBIT 10.5

SEPARATION AGREEMENT AND GENERAL RELEASE

This Separation Agreement and General Release (hereafter, the “Agreement”) is made and entered into this 31st day of May, 2018 (hereafter referred to as the “Effective Date”), by W. R. GRACE & CO.-Conn., its parent (W. R. GRACE & CO.), and their subsidiaries and affiliates, and each of their representatives, officers, directors, shareholders, managers, supervisors, employees, agents, heirs, assigns and successors (hereafter referred to collectively as “GRACE”) and Thomas E. Blaser and all of his agents, heirs, assigns and successors (hereafter referred to collectively as “EMPLOYEE”).
On the occasion of EMPLOYEE’s separation from employment with GRACE (by mutual agreement), the parties to this Agreement desire to settle fully and finally all matters and potential differences between them arising out of the EMPLOYEE’s employment with GRACE, and the cessation of that employment.  Therefore, in order to achieve this result, GRACE and EMPLOYEE agree to the following:
1.EMPLOYEE’s last date of employment with GRACE shall be May 31, 2018.  Prior to that date, EMPLOYEE will be available to GRACE officials for advice and consultation, over the phone and, if requested, occasional meetings (as mutually convenient to EMPLOYEE and GRACE).
2.In consideration of the promises made by EMPLOYEE, subject to the paragraphs below:
(i) GRACE will pay EMPLOYEE severance pay, equal to $765,000 (i.e., one times EMPLOYEE’s annual base salary plus an amount equal to one-times EMPLOYEE’s targeted annual incentive compensation program bonus (“AICP”) for 2018), less any outstanding advances, paid in the form of a single lump-sum payment within 60 days after EMPLOYEE’s last date of employment, as specified under the Severance Plan for Leadership Team Officers of
 W. R. Grace & Co. (the “Plan”);

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(ii) EMPLOYEE will remain eligible to be considered for a pro-rated AICP bonus for 2018, as specified under the Plan.  The pro-rated amount would reflect the portion of the 2018 calendar year that EMPLOYEE is employed by GRACE (i.e., 5 months/12 months).  The amount of EMPLOYEE’s pro-rated bonus will depend on the extent that the applicable business performance goals are met (and will be subject to any applicable Grace Board approvals); and also on EMPLOYEE’s individual performance while still employed by GRACE, as determined by GRACE.  Any pro-rated bonus to which EMPLOYEE becomes entitled will be paid at the same time as such bonuses are paid to actively working eligible employees in March 2019;  
(iii) GRACE will, on May 31, 2018, vest each of the “restricted stock units” (“RSUs”) previously awarded to EMPLOYEE as part of his hire (sign-on) grant (a total of 7,656 RSUs), and those RSUs will be settled and paid to EMPLOYEE in the form of one share of GRACE common stock for each vested RSU, as soon as practical after that date;
(iv) GRACE will provide that the stock options previously awarded to EMPLOYEE as part of his hire (sign-on) grant (covering a total 7,273 shares of GRACE common stock with a “strike price” of $65.31 per share) will continue to vest and be exercisable in the normal course until May 31, 2020 (and any portion of that option that remains unexercised as of the day after that date (whether or not vested) shall be forfeited and EMPLOYEE shall receive no stock or cash related to that unexercised portion);
(v) GRACE will provide that (1) the stock options previously awarded to EMPLOYEE on February 11, 2016 that were vested prior to May 31, 2018 (covering a total of 14,546 shares of Grace with a “strike price” of $65.31), (2) the stock options previously awarded to EMPLOYEE on February 25, 2016 that were vested prior to May 31, 2018 (covering 10,406 shares of Grace common stock with a “strike price” of $68.47), and (3) the stock options previously awarded to EMPLOYEE in February 2017 that were vested prior to May 31, 2018 (covering a total of 4,814 shares of Grace common stock with a “strike price” of $71.41); will continue to be exercisable in the normal course until May 31, 2020 (and any portion of those options that remain unexercised 

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as of the day after that date shall be forfeited and EMPLOYEE shall receive no stock or cash related to those unexercised options).
(vi) EMPLOYEE shall retain a portion of the “Performance Based Units” (“PBUs”) for the 2016 to 2018 performance period (which were originally granted to him in February 2016), calculated by pro-rating the total number of PBUs granted to EMPLOYEE for that performance period, based on the number of months from the beginning of the performance period though the effective date of your cessation of employment with GRACE – that is, EMPLOYEE shall retain 4,412 PBUs for that performance period (i.e., a pro-ration of 5,477 (total PBUs granted) x 29/36); which shall be settled in GRACE stock in early 2019, at the same time and in the same manner as applicable to the PBUs for that performance period held by active GRACE employees; 
(vii) EMPLOYEE shall be entitled to continue coverage for himself and his family under GRACE’s medical, dental and vision plans, under the same terms as applicable to GRACE’s active employees at its Columbia Maryland Headquarters (provided EMPLOYEE pays all required premiums on a timely basis and complies with all other requirements to maintain coverage applicable to such employees), subject to the provisions of the next sentence, for a period of up to 24 months commencing immediately after his last date of employment, but only to the extent EMPLOYEE (and his family) were under such coverages as of his last date of employment, as provided under the Plan. EMPLOYEE (a) shall pay the full active employee share of the required monthly premiums and (b) shall also pay the full GRACE (i.e., employer) share of the required monthly premiums (the “Remaining Portion”), through monthly payments made directly to a designee of GRACE, for each month that EMPLOYEE wishes to continue such coverages. In addition, EMPLOYEE shall be paid a cash amount equal to $38,885.52, which shall be paid in a lump sum within 60 days of his last date of employment (and shall be subject to normal income and other tax withholding). Finally, for the avoidance of doubt, the 24-month period specified above shall not count against the maximum period during which 

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EMPLOYEE may continue such coverage under the applicable “COBRA” continuation provisions (which means that EMPLOYEE shall have the right to elect to continue such coverage for up to such maximum period, consistent with those provisions, beginning after such 24-month period); and
(viii) GRACE will provide EMPLOYEE with outplacement services thru Right Management (Right Choice 12).
Notwithstanding the forgoing, no payment or other benefit described in this paragraph 2 (collectively, a “payment”) shall be made to EMPLOYEE at a time that such payment would fail to comply with Internal Revenue Code section 409A, in the reasonable judgement of GRACE; and any such payment not made as a result of the provisions of this sentence shall be made to EMPLOYEE as soon as possible after such payment is deemed by GRACE to not violate that Code section. 
3.Except as specified in paragraph 2 above, EMPLOYEE agrees and understands that: (i) all other PBUs, RSUs and options for GRACE stock previously awarded to EMPLOYEE shall be forfeited as of his last day of employment (i.e., May 31, 2018), and he shall receive no stock or payment related thereto; and (ii) EMPLOYEE shall not be eligible for any other AICP bonus or incentive compensation opportunity.

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1.    In consideration of the promises of GRACE, the EMPLOYEE (on his own behalf and on the behalf of his agents, heirs, personal representatives, and assigns) hereby releases and forever discharges GRACE from any and all claims, actions, demands and causes of action in law or in equity which EMPLOYEE may have had or may now have, which are based on or are in any way related to his employment with GRACE or the termination of that employment; the EMPLOYEE’s release of claims and actions includes, but is not limited to, actions arising under the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act, the Consolidated Omnibus Budget Reconciliation Act, Article 49B of the Maryland Code; the Worker Adjustment and Retraining Notification (“WARN”) Act; and any and all other similar federal, state and local laws, statutes or constitutions; and any and all actions EMPLOYEE may have had or may now have in tort, contract, or under statutory, or the common law. 

4.EMPLOYEE further promises and agrees not to file, cause to be filed, or join in the filing in any federal, state or local court, any grievance, claim or action, as an individual or as a member of a class, relating to his employment or the termination of his employment with GRACE, and he waives any right to legal or equitable relief which might be claimed on his behalf by any class representative or government agency with respect to his employment with GRACE. Notwithstanding any other provision of this Agreement, or any provision of any other agreement between EMPLOYEE and GRACE, including (but not limited to) the confidentiality provisions of this Agreement or any such other agreement:  (a) EMPLOYEE shall not be prohibited or restricted from initiating an action against GRACE under the Older Workers Benefit Protection Act (“OWBPA”) challenging the release of his claims or his covenant not to file a claim or lawsuit under the ADEA or the right to file a charge with the Equal Employment Opportunity Commission or take part in any agency investigation (provided that, EMPLOYEE agrees, to the maximum extent permitted by law, that EMPLOYEE shall not obtain, and hereby waives any right or entitlement to obtain, any 

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financial relief or damages from such charge or claim filed with the EEOC or other agency); and (b) EMPLOYEE shall not be prohibited or restricted from reporting possible violations of securities law to a U.S. governmental agency or entity (nor from recovering a whistleblower award from such agency or entity), and EMPLOYEE shall not be required to inform GRACE if EMPLOYEE makes such a report.

5.During EMPLOYEE’s employment with GRACE, EMPLOYEE had access to confidential and proprietary information and trade secrets, including but not limited to information about GRACE’s employees, customers, business methods, programs, procedures, systems, and strategies (collectively referred to as “Confidential Information”), which information GRACE considers to be among its most valuable assets. As part of this Agreement, EMPLOYEE agrees not to disclose this Confidential Information to any person or entity, unless EMPLOYEE first obtains written authorization of an officer of GRACE.  EMPLOYEE also agrees not to use, or allow any other person or entity to use this Confidential Information, without first obtaining written authorization of an officer of GRACE.  EMPLOYEE understands and agrees that EMPLOYEE’s obligations described in this paragraph will remain in effect even after the expiration of the period that EMPLOYEE receives severance pay.
6.(i) EMPLOYEE agrees not to make any remarks, whether written or oral, including through electronic transmission such as e-mail or Internet, that may negatively reflect upon GRACE, its officers, directors, employees, customers or business, or otherwise take any action that could reasonably be anticipated to cause damage to the reputation, goodwill or business of GRACE or any of its officers, directors, or employees. 
 (ii) GRACE agrees that no member of its Board of Directors nor any of its Leadership Team officers shall make any remarks, whether written or oral, including through electronic transmission, such as e-mail or Internet, that may negatively reflect upon EMPLOYEE, or otherwise 

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take any action that could reasonably be anticipated to cause damage to the reputation of EMPLOYEE. 
(iii) EMPLOYEE and GRACE understand and agree that the obligations specified in this paragraph will remain in effect even after the expiration of the period that EMPLOYEE receives severance pay or benefits under paragraph 2.
7.EMPLOYEE and GRACE agree not to disclose the terms of this Agreement or the fact of its execution to any person, except to the extent required by applicable law. This confidentiality provision does not apply to EMPLOYEE’s immediate family, attorney or tax advisor, so long as these excepted individuals are notified of this provision and agree to not further disclose the terms of the Agreement in accordance with the terms of this provision.
8.EMPLOYEE agrees that neither this Agreement nor the negotiations in pursuance thereof shall be construed or interpreted to render EMPLOYEE a prevailing party for any reason, including but not limited to an award of attorney’s fees, expenses or costs under any statute or otherwise.  
9.EMPLOYEE acknowledges that GRACE has made no representations regarding the tax consequences of this Agreement.  EMPLOYEE understands that GRACE will deduct from the payments referenced in Paragraph 2 applicable federal and state income tax withholding and all other lawful deductions including, but not limited to, ordinary employment taxes (as well as employee-paid premiums for benefits), and will report the payments referenced in Paragraph 2 to the Internal Revenue Service on Form W-2.
10.In the event that any party to this Agreement is forced to institute legal proceedings for breach of the terms of this Agreement, it is agreed that any trial shall be without a jury, venue shall be in Maryland, this Agreement shall be interpreted in accordance with the laws of the State of Maryland, and the prevailing party in any action shall be entitled to its costs, including reasonable attorney’s fees.

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11.EMPLOYEE is hereby advised to consult with an attorney of his own choice prior to and in connection with the execution of this Agreement and EMPLOYEE acknowledges that he has been advised to consult with an attorney of his own choice prior to and in connection with the execution of this Agreement.
12.EMPLOYEE certifies that this Agreement constitutes a knowing and voluntary waiver of any and all rights or claims that exist or that he has or may claim to have under the Age Discrimination in Employment Act (“ADEA"), as amended by the Older Workers Benefit Protection Act of 1990.  This release does not govern any rights or claims that might arise under the ADEA after the date this Agreement is signed by the EMPLOYEE.  EMPLOYEE acknowledges that the consideration provided pursuant to this Agreement is in addition to any consideration that he would otherwise be entitled to receive.  EMPLOYEE agrees that he has been informed that he has the right to consider this Agreement for a period of at least twenty-one (21) days prior to entering into this Agreement.  EMPLOYEE also understands that he has the right to revoke this Agreement for a period of seven (7) days following its execution by providing written notice of revocation to:  Kerrie Wolfe, Global HR Director, W. R. Grace & Co. 7500 Grace Drive, Columbia, MD 21044.  Should EMPLOYEE revoke this Agreement, EMPLOYEE understands that he shall not be entitled to any of the benefits specified under Paragraph 2 above.
13.This Agreement shall not be construed as, or deemed to be, evidence of an admission of any liability whatsoever on the part of GRACE or any of its officers, directors, employees or agents.
14.No statements, promises or understandings of any party may alter the plain meaning of the terms of this Agreement.
15. The Parties agree that, to the extent that any provision of this Agreement is determined to be in violation of the OWBPA, it should be severed from the Agreement or modified to comply with the OWBPA, without affecting the validity or enforceability of any of the other terms or provisions of the Agreement.  

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16.Except as provided in the second sentence of this paragraph, this Agreement sets forth the entire Agreement and understanding of EMPLOYEE and GRACE concerning the subject matter of this Agreement, and supersedes all prior discussions, agreements, arrangements and understandings concerning such subject matter.  Notwithstanding any other provision of this Agreement to the contrary, this Agreement does not supersede, but is in addition to, any confidentiality agreement or understanding between EMPLOYEE and GRACE.  The rights and remedies of GRACE under this Agreement are independent of, and separate and distinct from its rights and remedies under any such other agreement or understanding, and no default or termination under any such other agreement or understanding shall in any way affect the obligations of EMPLOYEE or the rights and remedies of GRACE under this Agreement. Intending to be legally bound, the parties execute this Separation Agreement and General Release by their signatures below.
17.Further Covenants of Employee:
(i)         Noncompetition
(a)  For a period of twenty-four (24) months after EMPLOYEE is no longer employed (for any reason whatsoever) by GRACE, EMPLOYEE will not, without the prior written consent of an authorized officer of GRACE, (i) directly or indirectly engage in or (ii) assist or have any active interest in (whether as a proprietor, partner, stockholder, officer, director or any type of principal whatsoever (provided that ownership of not more than two (2) percent of the outstanding stock of a corporation traded on a national securities exchange shall not of itself be viewed as assisting or having an active interest) or (iii) enter the employment of or act as an agent, broker or distributor for or adviser or consultant to any person, firm, corporation or business entity that is (or is about to become) directly or indirectly engaged in the development, manufacture or sale of any product that competes with or is similar to any product manufactured, sold or under development by GRACE at any time while EMPLOYEE was employed by GRACE, in any area of the world in which such product is, at the time EMPLOYEE ceases to be employed, manufactured or sold by GRACE, 

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provided that this restriction shall apply only with respect to the products with whose development, manufacture, or sale EMPLOYEE was concerned or connected in any way during the twenty-four (24) month period immediately prior to EMPLOYEE’s ceasing to be an employee of GRACE.
(b)  EMPLOYEE hereby acknowledges and confirms that the business of GRACE extends throughout substantial areas of the world. During the course of EMPLOYEE’s employment with GRACE, EMPLOYEE’s involvement with the business of GRACE may vary as to products and geographic area.  It is GRACE’s practice to enforce this noncompetition covenant only to the extent necessary to protect GRACE’s legitimate interests commensurate with EMPLOYEE’s involvement with the business of GRACE during EMPLOYEE’s employment, and EMPOYEE acknowledges and confirms that GRACE may enforce this noncompetition covenant consistent with such practice.
(ii)    Nonsolicitation of Customers
EMPLOYEE agrees that during the twenty-four (24) month period immediately following cessation of EMPLOYEE’s employment with GRACE for any reason whatsoever, EMPLOYEE shall not, on EMPLOYEE’s own behalf or on behalf of any person, firm, partnership, association, corporation or business organization, entity or enterprise, without the prior written consent of an authorized officer of GRACE, solicit, contact, call upon, communicate with or attempt to communicate with any customer or prospect of GRACE, or any representative of any customer or prospect of GRACE, with a view to sell or provide any product, equipment, or service competitive or potentially competitive with any product, equipment, or service sold or provided or under development by GRACE during the twenty-four (24) months immediately preceding cessation of EMPLOYEE’s employment with GRACE; provided that the restrictions set forth in this paragraph shall apply only to customers or prospects of GRACE, or representative of customers or prospects of GRACE, with whom EMPLOYEE had contact during such 24-month period.  The actions prohibited by this section shall not be engaged in by the EMPLOYEE directly or indirectly, whether as manager, salesman, agent, sales or service representative, engineer, technician or otherwise.

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(iii)    Nonsolicitation of Employees 
EMPLOYEE agrees that during the twenty-four (24) month period immediately following cessation of EMPLOYEE’s employment with GRACE for any reason whatsoever, EMPLOYEE shall not, on EMPLOYEE’s own behalf or on behalf of any person, firm, partnership, association, corporation or business organization, entity or enterprise, without the prior written consent of an authorized officer of GRACE, recruit, solicit, or induce, or attempt to recruit, solicit, or induce, any employee of GRACE (with whom EMPLOYEE had contact or supervised during the term of EMPLOYEE’s employment with GRACE) to terminate their employment relationship with GRACE or to perform services for any other person, firm, corporation or business organization or entity. 
(iv)    Breaches
EMPLOYEE acknowledges that were EMPLOYEE to breach the provisions of any of these covenants of this paragraph 18, the injury to GRACE would be substantial, irreparable, and impossible to measure and compensate in money damages alone.  EMPLOYEE therefore agrees that, in addition to provable damages, GRACE may seek, and agrees that a court of competent jurisdiction should grant, preliminary and permanent injunctive relief prohibiting any conduct by EMPLOYEE that violates any of these covenants.
Agreed:

/s/ Thomas E. Blaser
EMPLOYEE

6/1/18
Date

W. R. GRACE & CO.-CONN.

By: /s/ Kerrie L. Wolfe

6/4/18
Date

11Exhibit

        

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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