If you hold shares of PRAA common stock at the close of business on August 1, 2013, you will receive two additional shares of PRAA common stock for each of your shares. The additional shares will be distributed on or about August 1, 2013, the payment date of the Split. Although the overall proportionate share of PRAA that your investment represents will remain the same, you will have three times as many shares as before the Split.  On August 2, 2013, shares of PRAA common stock will trade on NASDAQ at a new, split-adjusted price, reflecting this tripling of the total number of all outstanding shares.

Our Board of Directors decided to split the stock by means of a stock dividend to make shares of PRAA common stock more attractive to a broader range of potential investors and to increase liquidity in the trading of PRAA common stock, reflecting the Board's determination to build long-term stockholder value. 

On the payment date, Continental Stock & Transfer Company, PRA's stock transfer agent ("Continental"), will mail you a Statement of Account or Direct Registration ("DRS") Transaction Advice detailing the Split and the number of additional shares you will receive, if any.   Please note that the Statement of Account or DRS Transaction Advice reflects only shares held in your Registered Shareholder account or Direct Registration Service ("DRS") account (BuyDIRECT)  account with our transfer agent, Continental Stock Transfer & Trust Company.   Make sure to retain your Statement of Account or DRS Transaction Advice in a safe place, as PRA no longer issues stock certificates. If you have any questions, please contact Continental.

Generally speaking, when an issuer declares a dividend, it establishes a record date for when a record holder must be on the issuer’s books as a stockholder to receive the dividend.  The record date of July 1, 2013 is used for accounting purposes to determine an estimated number of shares that we expect will split three-for-one on our payment date of August 1, 2013.  After such record date is established, NASDAQ establishes an “ex-dividend” date (which in the case of the Split, is the first business day after the payment date (i.e., August 2, 2013)) and if a stockholder sells his/her shares before the ex-dividend date, it is also selling his/her right to the stock dividend.  Accordingly, consistent with the NASDAQ rules,  any holder of record of Common Stock on the record date (July 1, 2013) is entitled to receive shares of Common Stock issued in connection with the Split only if such holder did not sell his/her shares of Common Stock before the ex-dividend date (August 2, 2013).      

Our stock transfer agent will mail a written notice to registered stockholders indicating their split-adjusted shares. If your stock is currently held in a brokerage account, the information will be sent directly to your bank or broker.  Your broker can then have our transfer agent deliver the shares to your account.   If you hold stock certificates, you can send the notice to your broker.

If you hold PRAA common stock in a brokerage account, the additional shares will be sent directly to your broker for credit to your brokerage account. Your broker should notify you, or you may wish to contact your broker directly for an account statement reflecting the additional shares credited to your account as a result of the Split, or with any questions regarding your brokerage account.

No.  There is no cost to you in connection with the Split.

No.  This will be the first stock split (by means of a dividend or otherwise) undertaken by PRA since PRAA common stock was listed in its current form on NASDAQ in November 2002.

No. The par value of PRAA common stock will remain at $0.01 per share after the Split.

No. You will not have to pay taxes on your receipt of your additional shares. PRA's distribution of the additional shares to you pursuant to the Split is considered to be a nontaxable stock distribution for U.S. Federal income tax purposes.   Following the Split, you will need to allocate your pre-Split tax basis in each of your existing shares equally between your existing share and the two additional shares received with respect to that existing share. Consequently, 33% of the pre-Split tax basis in each of your existing shares will be allocated to those existing shares and the identical amount will be allocated to each of the two additional shares. For a stockholder who owns several blocks of PRAA common stock that were purchased at different times, this allocation may be done on a block by block basis.   As this is a non-taxable distribution of stock, your holding period for your additional shares will include the holding period for the existing share with respect to which the distribution was made.  You should consult with your own personal tax advisor if you have any questions regarding your own specific facts and circumstances.

Yes.  With respect to unvested restricted share awards (including those granted under PRA's long-term incentive program), the Split will have the effect of tripling the number of unvested shares of restricted stock underlying each such award.  Any additional shares that become subject to an outstanding stock award by reason of the Split will be subject to the same performance goals, vesting, forfeiture, exercise, settlement and other terms and conditions as the shares on which such Split were granted, and, with respect to awards subject to time vesting or the achievement of performance goals (including those granted under PRA's long-term incentive program), additional shares will be received with respect to the Split to the extent of and only in respect of the number of shares under such awards to which the holder actually becomes entitled thereunder.  For example, if you held a restricted stock award covering 100 shares, 50% of which vest on January 1, 2014 and 50% of which vest based on the total stockholder return ("TSR") of PRA during 2013, then after giving effect to the Split, your restricted stock award would relate to 300 shares and would continue to vest 50% on January 1, 2014 and 50% based on the TSR of PRA during 2013.

Direct Registration is a form of electronic registration of stock ownership that enables PRAA stockholders to be directly registered on the books of Continental, as PRA's stock transfer agent, with no need for physical stock certificates.

Direct Registration should be very convenient for you. The benefits include:

a.   Safer ownership: Saves you the administrative burden of keeping track of original stock certificates, and eliminates the worry and cost associated with replacing lost, destroyed or stolen certificates.

b.  Faster and easier transfer of shares: Shares can be moved quickly since stock certificates do not need to be mailed to Continental, as PRA's stock transfer agent.

c.   Convenient sales: DRS shares can be sold or transferred by your own broker. Please use your DRS Transaction Advice when contacting your broker. You may also contact Continental’s Transfer Department regarding DRS transactions at 1-800-509-5586.

You may elect to deposit the shares represented by your existing stock certificates into your account at Continental. To deposit stock certificates, send them via Registered Mail return-receipt requested, to Continental at the address below. Please do not sign the stock certificate(s).

You should include the bottom (detachable) section of your Statement of Account or DRS Transaction Advice with your written instructions regarding the deposit, and mail them to:

PRA
c/o Continental Stock & Transfer Company
Transfer Operations/DRS

17 Battery Place, 8th Floor
New York, NY 10004

We recommend that you insure the package for 2% of the value of the shares being mailed [ Value = Number of Shares X Current Stock Price ]. If you have any questions regarding this process contact Continental at 800-509-5586.

No.  PRA is no longer issuing physical stock certificates. Your DRS Transaction Advice will be your evidence of ownership of your shares.

Keep them - do not destroy them. The stock certificates are still valid. All your stock certificates should be kept in a safe place. However, as mentioned above, today most shares are kept in paperless fashion and stockholders with certificates have the option to conveniently convert all valid stock certificates to Direct Registration.

There is no impact. The 2014 proxy-voting season will take place after the record date of the Split. Next year, assuming your holdings are unchanged, you will be voting three times as many shares as you did in 2013, but your proportionate vote will remain the same relative to other stockholders.

This process is unchanged. You may sell shares of PRAA common stock through your broker.

Continental Stock Transfer & Trust Company
17 Battery Place – 8th Floor
New York, NY 10004

Call Toll Free: 800-509-5586
International and Local: 212-845-3224
Hours: 8:30 – 5:30 Eastern Time

Email: CSTmail@continentalstock.com

Internet: www.continentalstock.com