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Exhibit 10.18    
  

 
 

EXECUTIVE EMPLOYMENT AGREEMENT    
  

        EMPLOYMENT AGREEMENT (the "Agreement") dated as of November 25th, 2001 (the "Effective Date"), between Providian
Financial Corporation, a Delaware corporation (the "Company"), and Joseph W. Saunders (the "Executive"). 

W I T N E S S E T H  

        WHEREAS, the Company desires to employ the Executive as President and Chief Executive Officer of the Company; 

        WHEREAS, the Company and the Executive desire to enter into the Agreement as to the terms of his employment by the Company; 

        NOW THEREFORE, in consideration of the foregoing, of the mutual promises contained herein and of other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 

        1.    POSITION/DUTIES.    

        (a)  During
the Employment Term (as defined in Section 2 below), the Executive shall serve as the President and Chief Executive Officer of the Company. In this capacity the
Executive shall have such duties, authorities and responsibilities commensurate with the duties, authorities and responsibilities of persons in similar capacities in similarly sized companies and such
other duties and responsibilities as the Board of Directors of the Company (the "Board") shall designate that are consistent with the Executive's position as President and Chief Executive Officer of
the Company. The Executive shall report to the Board. 

        (b)  During
the Employment Term, the Executive shall devote substantially all of his business time (excluding periods of vacation and sick leave), energy and skill in the
performance of his duties with the Company, provided the foregoing will not prevent the Executive from (i) participating in charitable, civic, educational, professional, community or industry affairs
and (ii) managing his and his family's personal investments so long as such activities in the aggregate do not materially interfere with his duties hereunder. 

        (c)  The
Board shall take such action as may be necessary to appoint or elect the Executive as a member of the Board as of the Effective Date. Thereafter, during the
Employment Term, the Board shall nominate the Executive for re-election as a member of the Board at the expiration of the then current term. 

        2.    EMPLOYMENT TERM.    The Executive's term of employment under this Agreement shall be for a term commencing on
the Effective Date and, unless terminated earlier as provided in Section 7, ending on December 31, 2004 (the "Employment Term"). The commencement of the Employment Term and all other provisions of
this Agreement shall be subject to the prior approval of the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation. 

        3.    BASE SALARY.    The Company agrees to pay the Executive a base salary at an annual rate of not less than
$600,000, payable in accordance with the regular payroll practices of the Company, but not less frequently than monthly. The Executive's Base Salary shall be subject to annual review by the Board (or
a committee thereof) and may be increased, but not decreased, from time to time by the Board. No increase to Base Salary shall be used to offset or otherwise reduce any obligations of the Company to
the Executive hereunder of otherwise. The base salary as determined herein from time to time shall constitute "Base Salary" for purposes of this Agreement. 

        4.    BONUS.    During the Employment Term, the Executive shall be entitled to participate in the Company's bonus and
other incentive compensation plans and programs for the Company's senior executives at a level commensurate with his position. The Executive shall have a guaranteed minimum 

 

bonus equal to $900,000 for the fiscal year ending December 31, 2002 and have the opportunity to earn an annual target bonus of $900,000 (the "Target Bonus") for each fiscal year thereafter measured
against objective financial criteria to be determined by the Board (or a committee thereof) after good faith consultation with the Executive. The Executive shall also be entitled to a signing bonus of
$2,000,000 payable upon execution of this contract to make him whole for certain benefits earned but forfeited in his prior employment. 

        5.    EQUITY.    

        (a)    STOCK OPTIONS.    The Compensation Committee of the Board has awarded the Executive as of the Effective Date an
option (the "Option") to purchase 750,000 shares of the Company's common stock, par value $.001 (the "Common Stock") at an exercise price equal to the fair market value of the Common Stock on the
Effective Date as determined under the Company's 2000 Stock Incentive Plan. Subject to accelerated vesting as set forth in this Agreement, the Option shall vest as to one-third of the shares of Common
Stock subject to the Option on each anniversary of the Effective Date, so as to be 100% vested on the three year anniversary thereof, conditioned upon Executive's continued employment with the Company
as of each vesting date. The Option is for a term of ten (10) years (subject to earlier termination as provided in the Company's 2000 Stock Incentive Plan on a basis other than termination of
employment). In the case of the Executive's termination by the Company without Cause, voluntary termination by the Executive for Good Reason, death or Disability or upon a Change in Control (as
defined in Exhibit A) (collectively, "Acceleration Events"), the Option and any other Company stock option then held by the Executive shall become fully vested. 

        (b)    RESTRICTED STOCK.    The Compensation Committee of the Board has awarded the Executive as of the Effective
Date, 500,000 shares of the Company's Common Stock under the Company's 2000 Stock Incentive Plan (the "Restricted Stock"). Subject to accelerated vesting as set forth in this Agreement, the Restricted
Stock shall vest as to one-third of the Restricted Stock shares on each anniversary of the Effective Date, so as to be 100% vested on the three year anniversary thereof, conditioned upon Executive's
continued employment with the Company as of each vesting date. The Restricted Stock shares shall become fully vested and the restrictions thereon shall lapse upon the occurrence of any Acceleration
Event. Executive shall be entitled to all cash dividends paid on the Restricted Stock. The Restricted Stock shall in all respects be subject to the terms, definitions and provisions of, the Company's
2000 Stock Incentive Plan and the standard form of restricted stock agreement, a copy of which has been given to the Executive, as modified by the terms of this Agreement. 

        6.    EMPLOYEE BENEFITS.    

        (a)    BENEFITS PLAN.    The Executive shall be entitled to participate in any employee benefit plan of the Company
including, but not limited to, equity, pension, thrift, profit sharing, medical coverage, education, or other retirement or welfare benefits that the Company has adopted or may adopt, maintain or
contribute to for the benefit of its senior executives at a level commensurate with his positions. 

        (b)    VACATIONS.    The Executive shall be entitled to an annual paid vacation in accordance with the Company's
policy applicable to senior executives. 

        (c)    PERQUISITES.    The Company shall provide to the Executive, at the Company's cost, all perquisites to which
other senior executives of the Company are generally entitled to receive. 

        (d)    BUSINESS EXPENSES.    Upon presentation of appropriate documentation, the Executive shall be reimbursed in
accordance with the Company's expense reimbursement policy for all reasonable and necessary business expenses incurred in connection with the performance of his duties hereunder. 

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        (e)    RELOCATION.    The Company shall reimburse the Executive on an after-tax basis for the costs of his relocation
to the San Francisco area. In addition, the Company shall provide the Executive with appropriate accommodations in the San Francisco area for up to 12 months and shall make the Executive whole for any
imputed income realized as a result thereof. The Company shall reimburse the Executive on an after-tax basis for the cost of first-class travel between San Francisco and Philadelphia for him and his
family. The Company shall make the Executive whole on an after-tax basis on the sale of his house in Philadelphia to the extent the sales price is less than $1,500,000. 

        7.    TERMINATION.    The Executive's employment and the Employment Term shall terminate on the first of the following
to occur: 

        (a)    DISABILITY.    Upon thirty (30) days written notice by the Company to the Executive of termination due to
Disability. For purposes of this Agreement, "Disability" shall be defined as the inability of the Executive to perform his material duties hereunder due to a physical or mental injury, infirmity of
incapacity for 180 consecutive days or an aggregate period of more than 210 days in any twelve (12) consecutive month period. The existence or nonexistence of a Disability shall be determined by a
physician agreed in good faith to by the Executive and the Company. 

        (b)    DEATH.    Automatically on the date of death of the Executive. 

        (c)    CAUSE.    Immediately upon written notice by the Company to the Executive of a termination for Cause provided,
such notice is given within ninety (90) days of the discovery of the Cause event by the Chairman of the Audit Committee of the Board or Chairman of the Compensation Committee of the Board. "Cause"
shall mean (i) the willful misconduct of the Executive with regard to the Company that is materially injurious to the Company provided, however, that no act or failure to act on the Executive's part
shall be considered "willful" unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that his action or omission was in the best interests of the Company;
(ii) the conviction of the Executive of (or the pleading by the Executive of nolo contendere to) any felony (other than traffic related offenses or as a result of vicarious liability); or (iii)
continued failure by the Executive to perform his duties after notice has been given to him by the Board of such failure. 

        Notwithstanding
the foregoing, the Executive shall not be deemed to have been terminated for Cause without (i) advance written notice provided to the Executive not less than fourteen
(14) days prior to the date of termination setting forth the Company's intention to consider terminating the Executive including a statement of the date of termination and the specific detailed basis
for such consideration for Cause; (ii) an opportunity of the Executive, together with his counsel, to be heard before the Board during the fourteen (14) day period ending on the date of termination;
(iii) a duly adopted resolution of the Board stating that in accordance with the provisions of the next to the last sentence of this Section 7(c), that the actions of the Executive constituted Cause
and the basis thereof; and (iv) a written determination provided by the Board setting forth the acts and omissions that form the basis of such termination of employment. Any determination by the Board
hereunder shall be made by the affirmative vote of at least a two-thirds majority of the members of the Board (other than the Executive). Any purported termination of employment of the Executive by
the Company which does not meet each and every substantive and procedural requirement of this Section 7 shall be treated for all purposes under this Agreement as a termination of employment without
Cause. 

        (d)    WITHOUT CAUSE.    Upon written notice by the Company to the Executive of an involuntary termination without
Cause, other than for death or Disability. 

        (e)    GOOD REASON.    Upon written notice by the Executive to the Company of a termination for Good Reason. "Good
Reason" shall mean, without the express written consent of the Executive, the occurrence of any of the following events unless such events are fully corrected in all material respects by the Company
within thirty (30) days following written notification by the Executive to the 

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Company that he intends to terminate his employment hereunder for one of the reasons set forth below; 

          (i)  any
reduction or diminution (except temporarily during any period of Disability) in the Executive's titles or positions, or a material reduction or diminution in the
Executive's authorities, duties or responsibilities or reporting requirements with the Company including but not limited to a failure to elect the Executive to the Board or removal of the Executive
from the Board; 

        (ii)  a
material breach by the Company of any provisions of this Agreement, including, but not limited to, any reduction in any part of the Executive's compensation
(including Base Salary and bonus) or benefits or any failure to timely pay any part of Executive's compensation (including Base Salary and bonus) or to provide the benefits contemplated herein; 

        (iii)  the
occurrence of a Change in Control (as defined in Exhibit A); or 

        (iv)  the
failure of the Company to obtain and deliver to the Executive a satisfactory written agreement from any successor to the Company to assume and agree to perform this
Agreement. 

        (f)    WITHOUT GOOD REASON.    Upon written notice by the Executive to the Company of the Executive's voluntary
termination of employment without Good Reason (which the Company may, in its sole discretion, make effective earlier than any notice date). 

        8.    CONSEQUENCES OF TERMINATION.    

        (a)    DISABILITY.    Upon such termination, the Company shall pay or provide the Executive (i) any unpaid Base Salary
through the date of termination and any accrued vacation; (ii) any unpaid bonus accrued with respect to the fiscal year ending on or preceding the date of termination; (iii) reimbursement for any
unreimbursed expenses incurred through the date of termination; (iv) a pro-rata portion of the Executive's bonus for the fiscal year in which the Executive's termination occurs (determined by
multiplying such amount by a fraction, the numerator of which is the number of days during the fiscal year of termination that the Executive is employed by the Company and the denominator of which is
365); and (v) all other payments, benefits or fringe benefits to which the Executive may be entitled under the terms of any applicable compensation arrangement or benefit, equity or fringe benefit
plan or program or grant (collectively,"Accrued Benefits"). 

        (b)    DEATH.    In the event the Employment Term ends on account of the Executive's death, the Executive's estate
shall be entitled to any Accrued Benefits. 

        (c)    TERMINATION FOR CAUSE OR WITHOUT GOOD REASON.    If the Executive's employment should be terminated (x) by the
Company for Cause or (y) by the Executive without Good Reason or (z) upon expiration of the Term, the Company shall pay to the Executive any Accrued Benefits (other than amounts described in Section
8(a)(iv)). 

        (d)    TERMINATION WITHOUT CAUSE OR FOR GOOD REASON.    If the Executive's employment should be terminated (x) by the
Company other than for Cause, or (y) by the Executive for Good Reason, the Company shall pay or provide the Executive with (i) Accrued Benefits; and (ii) shall pay to the Executive a lump sum in cash
within 30 days of date of termination in an amount equal to the product of (A) three, and (B) the sum of (1) the Base Salary in effect immediately prior to termination and (2) the Target Bonus. 

        9.    EXCISE TAX.    In the event that the Executive becomes entitled to payments and/or benefits which would
constitute "parachute payments" within the meaning of Section 280G(b)(2) of the Code, the provisions of Exhibit B shall apply. 

        10.    NO ASSIGNMENTS.    (a) This Agreement is personal to each of the parties hereto. No party may assign or
delegate any rights or obligations hereunder without first obtaining the written consent of the other party hereto. 

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        (b)  At
the request of the Executive, the Company shall use its best efforts to require any successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the Company to expressly 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 succession had taken place. As used in this Agreement,"Company" shall mean the Company and any successor to its business and/or assets, which assumes and agrees
to perform this Agreement by operation of law, or otherwise. 

        (c)  This
Agreement shall inure to the benefit of and be enforceable by the Executive and his personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive should die while any amount would still be payable to him hereunder had he continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to his devisee, legatee or other designee or, if there is no such designee, to his estate. 

        11.    NOTICE.    For the purpose of this Agreement, notices and all other communications provided for in this
Agreement shall be in writing and shall be deemed to have been duly given (i) on the date of delivery if delivered by hand, (ii) on the date of transmission, if delivered by confirmed facsimile, (iii)
on the first business day following the date of deposit if delivered by guaranteed overnight delivery service, or (iv) on the fourth business day following the date delivered or mailed by United
States registered or certified mail, return receipt requested, postage prepaid, addressed as follows: 

If
to the Executive: 

At
the address (or to the facsimile number) shown on the records of the Company 

With
a copy to: 

If
to the Company: 

________________________________________________ 

________________________________________________ 

________________________________________________

Attention: Corporate Secretary

Facsimile: ________________________ 

or
to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 

        12.    (a)    CONFIDENTIALITY.    The Executive acknowledges
that in his employment hereunder he will occupy a position of trust and confidence. The Executive shall not, except as in good faith deemed necessary or desirable by the Executive to perform his
duties hereunder, to defend his own rights or as required by applicable law or legal process, without limitation in time or until such information shall have become public or known in the Company's
industry other than by the Executive's unauthorized disclosure, disclose to others or use, whether directly or indirectly, any Confidential Information regarding the Company. "Confidential
Information" shall mean information about the Company, its subsidiaries and affiliates, and their respective clients and customers that is not disclosed by the Company and that was learned by the
Executive in the course of his employment by the Company, including (without limitation) any proprietary knowledge, trade secrets, data, formulae, information and client and customer lists and all
papers, resumes, and records (including computer records) of the documents containing such Confidential Information. 

        (b)    NON-SOLICITATION OF EMPLOYEES; NON-COMPETE.    The Executive recognizes that he possesses and will possess
confidential information about other employees of the Company relating 

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to their education, experience, skills, abilities, compensation and benefits, and inter-personal relationships with customers of the Company. The Executive recognizes that the information he
possesses and will possess about these other employees is not generally known, is of substantial value to the Company in developing its business and in securing and retaining customers, and has been
and will be acquired by him because of his business position with the Company. The Executive agrees that, during the period that the Executive is employed by the Company hereunder and for the one-year
period thereafter (the "Restricted Period"), he will not, directly or indirectly, solicit or recruit any employee of the Company for the purpose of being employed by him or by any competitor of the
Company on whose behalf he is acting as an agent, representative or employee. The Executive also agrees that during the Restricted Period, the Executive shall not, directly or indirectly, without the
prior
written consent of the Company, provide employment, directorship, consultative or other services to any business, individual, partner, firm, corporation, or other entity engaged in the credit card
business. 

        (c)    EQUITABLE RELIEF AND OTHER REMEDIES.    The Executive acknowledges and agrees that the Company's remedies at
law for a breach or threatened breach of any of the provisions of this Section would be inadequate and, in recognition of this fact, the Executive agrees that, in the event of such a breach or
threatened breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to obtain equitable relief in the form of specific performance, temporary restraining
order, a temporary or permanent injunction or any other equitable remedy which may then be available. 

        (d)    REFORMATION.    If it is determined by a court of competent jurisdiction in any state that any restriction in
this Section 12 is excessive in duration or scope or is unreasonable or unenforceable under the laws of that state, it is the intention of the parties that such restriction may be modified or amended
by the court to render it enforceable to the maximum extent permitted by the law of that state. 

        (e)    SURVIVAL OF PROVISIONS.    The obligations contained in this Section 12 shall survive in accordance with their
terms the termination or expiration of the Executive's employment with the Company and shall be fully enforceable thereafter. 

        13.    ATTORNEY'S FEES.    (a)    In the event of any dispute arising out of or under this Agreement or the
Executive's employment with the Company, the Company shall, upon presentment of appropriate documentation, promptly, at the Executive's election, pay or reimburse the Executive for all reasonable
legal and other professional fees, costs of arbitration and other expenses incurred in connection therewith by the Executive; provided however, that the Executive shall reimburse the Company to the
extent that it is determined by a non-appealable, final order by a court or arbitrator of competent jurisdiction that the Executive's claim was, in a material manner, commenced in bad faith. 

        (b)  The
Company shall promptly pay the Executive's reasonable costs of investigating employment with the Company and entering into this Agreement, including the reasonable
fees and expenses of his counsel. 

        14.    SECTION HEADINGS.    The section headings used in this Agreement are included solely for convenience and shall
not affect, or be used in connection with, the interpretation of this Agreement. 

        15.    SEVERABILITY.    The provisions of this Agreement shall be deemed severable and the invalidity of
unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. 

        16.    COUNTERPARTS.    This Agreement may be executed in several counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the same instruments. 

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        17.    ARBITRATION.    Any dispute or controversy arising under or in connection with this Agreement, other than
injunctive relief under Section 12(d) hereof, shall be settled exclusively by arbitration, conducted before a single arbitrator in San Francisco, California (applying Delaware law) in accordance with
the National Rules for the Resolution of Employment Disputes of the American Arbitration Association then in effect. The decision of the arbitrator will be final and binding upon the parties hereto.
Judgment may be entered on the arbitrator's award in any court having jurisdiction. 

        18.    MISCELLANEOUS.    No provision of this Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by the Executive and such officer or director as may be designated by the Board. No waiver by either party hereto at any time of any breach
by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver or similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Delaware without
regard to its conflicts of law principles. 

        19.    FULL SETTLEMENT.    Except as set forth in this Agreement, the Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including without limitation, set-off, counterclaim, recoupment, defense
or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obliged to seek other employment or take any other action by way of
mitigation of the amounts payable to the Executive under any of the provisions of this Agreement, nor shall the amount of any payment thereunder be reduced by any compensation earned by the Executive
as a result of employment by another employer. 

        20.    REPRESENTATIONS.    (a)    The Company represents and warrants that it has obtained any and all
governmental approvals or concurrences necessary to enter into this Agreement and to perform its obligations under this Agreement, including the obligation to pay or provide compensation, benefits or
severance, and that there is no legal or other impediment or limitation (other than requirements set forth herein) to the Company's performance of its obligations. 

        (b)  The
Executive represents and warrants to the Company that he has the legal right to enter into this Agreement and to perform all of the obligations on his part to be
performed hereunder in accordance
with its terms and that he is not a party to any agreement or understanding, written or oral, which could prevent him from entering into this Agreement or performing all of his obligations hereunder. 

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. 

	 	 	PROVIDIAN FINANCIAL CORPORATION
	

 	
 	
By:	
 	

 
	 	 	 	 	/s/ J. David Grissom

	

 	
 	

Title:	
 	

 
	 	 	 	 	Chairman

	

 	
 	
JOSEPH W. SAUNDERS
	

 	
 	

/s/ JOSEPH W. SAUNDERS

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EXHIBIT A    
    
    Change in Control Definition    
  

        For the purpose of this Agreement, a "Change in Control" shall have the meaning ascribed to such term in Section 2(e) of the Company's 2000 Stock Incentive
Plan, except that "50%" shall be substituted for "60%" in Section 2(e)(i) thereof. 

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EXHIBIT B    
    
    Gross-Up Provisions.    
  

        (a)  Anything
in this Agreement to the contrary notwithstanding, in the event it shall be determined that the Executive shall become entitled to payments and/or benefits
provided by this Agreement or any other amounts in the "nature of compensation" (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company or any
affiliate, any person whose actions result in a change of ownership or effective control of the Company covered by Section 280G(b)(2) of the Code or any person affiliated with the Company or
such person) as a result of such change in ownership or effective control of the Company, (a "Payment") would be subject to the excise tax imposed by Section 4999 of the code or any interest or
penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"),
then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the
Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. 

        (b)  Subject
to the provisions of paragraph (c), all determinations required to be made under this Exhibit B, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by a nationally recognized accounting firm
(the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Executive that there has
been a Payment, or such earlier time as is requested by the Company. The Accounting Firm shall be jointly selected by the Company and the Executive and shall not, during the two years preceding the
date of its selection, have acted in any way on behalf of the Company or its affiliated companies. If the Company and the Executive cannot agree on the firm to serve as the Accounting Firm, then the
Company and the Executive shall each select a nationally recognized accounting firm and those two firms shall jointly select a nationally recognized accounting firm to serve as the Accounting Firm.
All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Exhibit B, shall be paid
by the Company to the Executive within five days of the receipt of the Accounting Firm's determination. If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall
furnish the Executive with a written opinion that failure to report the Excise Tax on the Executive's applicable federal income tax return would not result in the imposition of a negligence or similar
penalty. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time
of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment"),
consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to paragraph (c) hereof and the Executive thereafter is required to
make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the
benefit of the Executive. 

        (c)  The
Executive shall notify the company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of a
Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after the Executive is informed in writing of such claim and shall apprise the
Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following
the date on which he or she gives such notice to the 

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Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall: 

          (i)  give
the Company any information reasonably requested by the Company relating to such claim, 

        (ii)  take
such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably selected by the Company, 

        (iii)  cooperate
with the Company in good faith in order effectively to contest such claim, and 

        (iv)  permit
the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or
income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this
paragraph (c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and
in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided the Executive shall
not be required by the Company to agree to any extension of the statute of limitations relating to the payment of taxes for the taxable year of the Executive with respect to which such contested
amount is claimed to be due unless such extension is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any
other taxing authority. 

        (d)  If,
after the receipt by the Executive of an amount advanced by the Company pursuant to paragraph (c) hereof, the Executive becomes entitled to receive any refund
with respect to such claim, the Executive shall (subject to the Company's complying with the requirements of paragraph (c) hereof) promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to paragraph (c)
hereof, a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such
denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. 

        (e)  If,
pursuant to regulations issued under Section 280G or 4999 of the Code, the Company and the Executive were required to make a preliminary determination of the
amount of an excess parachute payment (as contemplated by Q/A of the proposed regulations under Section 280G of the Code as issued on May 4, 1989) and thereafter a redetermination of the
Excise Tax is required under the 

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applicable regulations, the parties shall request the Accounting Firm to make such redetermination. If as a result of such redetermination an additional Gross-Up Payment is required, the
amount thereof shall be paid by the Company to the Executive within five days of the receipt of the Accounting Firm's determination. If the redetermination of the Excise Tax results in a reduction of
the Excise Tax, the Executive shall take such steps as the Company may reasonably direct in order to obtain a refund of the excess Excise Tax paid. If the Company determines that any suit or
proceeding is necessary or advisable in order to obtain such refund, the provisions of paragraph (c) hereof relating to the contesting of a claim shall apply to the claim for such refund,
including, without limitation, the provisions concerning legal representation, cooperation by the Executive, participation by the Company in the proceedings and indemnification by the Company. Upon
receipt of any such refund, the Executive shall promptly pay the amount of such refund to the Company. If the amount of the income taxes otherwise payable by the Executive in respect of the year in
which the Executive makes such payment to the Company is reduced as a result of such payment, the Executive shall, no later than the filing of his income tax return in respect of such year, pay the
amount of such tax benefit to the Company. In the event there is a subsequent redetermination of the Executive's income taxes resulting in a reduction of such tax benefit, the Company shall, promptly
after receipt of notice of such
reduction, pay to the Executive the amount of such reduction. If the Company objects to the calculation or recalculation of the tax benefit, as described in the preceding two sentences, the Accounting
Firm shall make the final determination of the appropriate amount. The Executive shall not be obligated to pay to the Company the amount of any further tax benefits that may be realized by him or her
as a result of paying to the Company the amount of the initial tax benefit. 

11

QuickLinks

Exhibit 10.18

EXECUTIVE EMPLOYMENT AGREEMENT

EXHIBIT A Change in Control Definition

EXHIBIT B Gross-Up Provisions.QuickLinks
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Exhibit 10.19    
  

 
 

FORM OF RETENTION BONUS AGREEMENT    
  

January 7,
2002 

«Memoname»

«Address_1»

«Address_2»

«City», «St» «Postal» 

        Re:
Retention Bonus Agreement 

Dear
«First_Name»: 

        This
letter sets forth the Retention Bonus Agreement (this "Agreement") between you and Providian Financial Corporation (the "Company") and is effective as of the date above ("Effective
Date"). Provided you agree to the terms below by executing this letter, the following retention bonus award will be made to you in accordance with the schedule below. 

Terms 

        1.    Continued Employment:    You agree that so long as you remain with the Company as an employee you will devote
your full time, attention and skills diligently, and in the best interest of the Company, in a manner consistent with the standards applicable to persons rendering similar services. 

        2.    Retention Bonus Amount and Vesting Schedule:    You will receive your retention bonus consisting of
«M_Shares» shares of restricted stock on the Effective Date, subject to the following vesting schedule. Your vesting continues from the Effective Date so long as you remain an
active employee, in good standing through the applicable vesting dates. 

	 
	 	Vesting Schedule for Restricted Stock

	First 1/3rd	 	July 7, 2002
	Second 1/3rd	 	July 7, 2003
	Final 1/3rd	 	July 7, 2004

        3.    Termination for Cause:    In the event that the Company terminates your employment for Cause, you will forfeit
any remaining unvested portions of your retention bonus. For purposes of this Agreement only, "Cause" includes, but is not limited to the following: theft or embezzlement; disclosure of trade secrets
(including client and/or employee rosters); industrial espionage; conviction of a felony; being intoxicated or under the influence of illegal substances or alcohol on the job; possession or use of
alcoholic beverages or illegal substances while on Company premises or while on-duty; falsification of or making a material omission in records; fraud; insider trading; or acts of violence
or harassment. 

        4.    Death, Disability or Involuntary Termination Without Cause:    If your employment with the Company is
involuntarily terminated without Cause or due to death or Disability (as defined in the Company's 2000 Stock Incentive Plan) prior to the final vesting of the restricted stock making up this retention
bonus, then within a reasonable period following your termination, the Company will release to you any remaining unvested restricted stock granted to you pursuant to this Agreement, subject to the
following offset. In the event that your termination entitles you to any payments under the Company's Severance Pay Plan or pursuant to any applicable laws or statutes governing layoffs (e.g. the
federal Worker Adjustment and Retraining Notification Act), the amount owed to you under this paragraph will be offset by the value of said amounts as determined by the Company. The offset will be 

deducted from the restricted stock award (based on the value of the shares at the time of termination*). 

	*
	The
value of the restricted stock will be calculated using the closing price of the stock on the day of your termination. 

        5.    At-Will Status:    Nothing in this Agreement alters your status as an at-will employee.
By signing this Agreement, you acknowledge that you and the Company each have the right to terminate your employment with the Company at any time and for any reason. 

        6.    Terms of Restricted Stock Grant:    This restricted stock bonus is governed by this Agreement and by the Stock
Grant Agreement attached hereto as Exhibit A and incorporated by reference herein, and such documents will be administered by the Company in its sole discretion. 

        7.    Miscellaneous Provisions:    This Agreement may not be modified or amended except in writing signed by both you
and a duly authorized officer of the Company. This Agreement shall be binding upon you and the Company and the respective heirs, personal representatives, successors and assigns of you and the
Company, but neither this Agreement nor any rights hereunder shall be assignable by you without the prior written consent of the Company. If any provision of this Agreement is held to be invalid,
void, or unenforceable, the remaining provisions shall remain in full force and effect. In the event that a dispute arises concerning the interpretation or enforcement of this Agreement, or any other
related matter, you agree that any such dispute shall be submitted to binding arbitration before the San Francisco, California office of JAMS or its successor, under the rules of JAMS then in effect
for resolution of contract disputes. This Agreement shall be construed according to the laws of the State of California. 

PROVIDIAN
FINANCIAL CORPORATION 

	By:	 	 
	 	 	
 Senior Vice President

Exhibit A—Restricted
Stock Grant Agreement 

By
my signature below, I acknowledge that I have carefully reviewed and considered this Agreement; that I understand the terms of the Agreement; and that I voluntarily agree to them. 

	
 «Memoname»
	

Date:	
 	

 	
 	

, 2002
	 	 	
	 	 

 
 

EXHIBIT A
  
    PROVIDIAN FINANCIAL CORPORATION
  2000 STOCK INCENTIVE PLAN
  
    RESTRICTED STOCK GRANT AGREEMENT    
  

        Providian Financial Corporation, a Delaware corporation (the "Company"), hereby awards shares of its Common Stock ("Shares") as a stock
award to the Participant named below, subject to the terms and conditions set forth in this Restricted Stock Grant Agreement (this "Agreement"), such participant's Retention Bonus Agreement dated the
date hereof (the "Retention Bonus Agreement") and the Company's 2000 Stock Incentive Plan (as amended from time to time, the "Plan"). 

	Date of Award:	 	 	January 7, 2002
	

Name of Participant:	
 	
 	

	

Number of Shares of Stock Awarded:	
 	
 	

	

Aggregate Fair Market Value of Stock on Date of Award:	
 	
 	

	

Fair Market Value per share on Grant Date:	
 	
$	

3.375

	
The Plan and Other Agreements	
 	

The text of the Plan is incorporated in this Agreement by this reference. You agree to execute such instruments and to take such actions as may reasonably be necessary to carry out the intent of this Agreement. Unless otherwise defined in this
Agreement or the Retention Bonus Agreement, capitalized terms used in this Agreement are defined in the Plan.
	

 	
 	

The Retention Bonus Agreement, this Agreement and the Plan constitute the entire understanding between you and the Company regarding this Restricted Stock Grant award; provided, however, that in the event of any conflict between the provisions of the
Plan with those of the Retention Bonus Agreement and this Agreement, the provisions of the Retention Bonus Agreement and this Agreement shall control. Any prior agreements or understandings are superseded.
	
Vesting	
 	

As long as you render Continuous Service (which, notwithstanding the Plan, means that you are an active employee in good standing) to the Company or a Subsidiary or Affiliate, and remain in good standing through the applicable vesting dates, you will
become vested as to 1/3 of the total number of Shares of your Restricted Stock Grant award on July 7, 2002; an additional 1/3 on July 7, 2003; and the final 1/3
on July 7, 2004. In the event that your Continuous Service ceases prior to the final vesting, except in the case of death, Disability or an involuntary termination without Cause as set forth in the Retention Bonus Agreement, you will forfeit to
the Company any unvested Shares subject to your Restricted Stock Grant award.
	
Escrow	
 	

The Shares for your Restricted Stock Grant award shall be deposited in escrow and shall remain in escrow until such time as the Shares are to be released to you or otherwise forfeited as described below.
	

 	
 	

The Shares of your Restricted Stock Grant held in escrow shall be subject to the following terms and conditions relating to their release from escrow or their forfeiture to the Company:
	

 	
 	

• Upon termination of your Continuous Service due to death, Disability, or involuntary termination without Cause, any unvested Shares will become vested subject to terms contained in the Retention Bonus Agreement.
	

 	
 	

• Upon termination of your Continuous Service for Cause, any unvested Shares shall be forfeited to the Company.
	
 	
 	

 

	

 	
 	

• When your interest in the Shares vests as described above, the Shares for such vested Restricted Stock Grant award shall be released from escrow within a reasonable period following the date of vesting, net of any Shares necessary to satisfy
tax withholding requirements.
	
Voting and Other Rights	
 	

Subject to the terms of this Agreement, you shall have all the rights and privileges of a stockholder of the Company while your Restricted Stock Grant award is held in escrow, including the right to vote and to receive dividends (if any).
	
Code Section 83(b) Election	
 	

You may elect to be taxed at the time the Restricted Stock Grant award is granted rather than when such Restricted Stock Grant award ceases to be subject to forfeiture restrictions, by filing an election under Section 83(b) of the Code with the
Internal Revenue Service within 30 days after the Date of Award, and by providing a copy of such election to the Company. You should consult with your tax advisor regarding the consequences of such an election.
	
Leaves of Absence	
 	

For purposes of this Agreement, your Continuous Service does not terminate when you go on a bona fide leave of absence that was approved by the Company in writing, if the terms of the leave provide for
Continuous Service crediting. Your Continuous Service terminates in any event when the approved leave ends, unless you immediately return to active work. The Company determines in its discretion which leaves of absence are considered an interruption
of Continuous Service, and when your Continuous Service terminates, for all purposes under the Plan.
	
Withholding Taxes	
 	

The number of any Shares released to you from escrow will be reduced by that number of Shares necessary to satisfy tax withholding requirements.
	
Restrictions on Resale	
 	

You agree not to sell, transfer or otherwise dispose of any Shares subject to this Restricted Stock Grant award prior to their vesting or sell, transfer or otherwise dispose of any Shares acquired under this Restricted Stock Grant award at a time
when applicable laws, regulations or Company policies prohibit such sale, transfer or other disposition.
	
No Retention Rights	
 	

This Agreement is not an employment agreement and does not give you the right to continue to be employed by the Company (or a Subsidiary or Affiliate). The Company (and any Subsidiary or Affiliate) reserves the right to terminate your Continuous
Service at any time and for any reason.
	
Applicable Law	
 	

This Agreement will be construed under the laws of the State of California.

 
 

Schedule to Retention Bonus Agreement    
  

        The following executive officers of the Company executed a Retention Bonus Agreement substantially identical to the form of Retention Bonus Agreement set forth in
Exhibit 10.19, except that the number of restricted shares set forth in section 2 is as set forth below: 

	Officer
	 	Section 2

	Susan Gleason	 	250,000 shares
	David J. Petrini	 	250,000 shares
	Ellen Richey	 	250,000 shares
	Warren Wilcox	 	250,000 shares
	James G. Jones	 	125,000 shares
	James Rowe	 	125,000 shares

QuickLinks

Exhibit 10.19

FORM OF RETENTION BONUS AGREEMENT

EXHIBIT A PROVIDIAN FINANCIAL CORPORATION 2000 STOCK INCENTIVE PLAN RESTRICTED STOCK GRANT AGREEMENT

Schedule to Retention Bonus Agreement

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