EXHIBIT
10.4

 
PDI, INC.
2004 STOCK AWARD AND INCENTIVE PLAN
RESTRICTED STOCK UNIT AGREEMENT

This RESTRICTED STOCK UNIT AGREEMENT (this “Agreement") is made and entered into
as of _____ __, 200_ (the “Grant Date”), by and between PDI, Inc. (the
“Company”) and _______________ (the “Participant”).

WHEREAS, the Company maintains the 2004 Stock Award and Incentive Plan (the
“Plan”); and

WHEREAS, the Compensation Committee of the Board of Directors of the Company has
approved the grant of restricted stock units pursuant to the Plan to the
Participant on the terms and conditions set forth herein;

NOW, THEREFORE, IT IS AGREED, by and between the Company and the Participant, as
follows:

1. Defined Terms.  Capitalized terms not otherwise defined herein shall have the
meaning ascribed to them in the Plan.
 
2. Grant of Restricted Stock Units.  The Participant is hereby granted _____
restricted stock units (the “Restricted Stock Units”) under the Plan, subject to
all of the terms and conditions of this Agreement and the Plan.  The Award
evidenced by this Agreement will constitute a Deferred Stock award for purposes
of the Plan.  No Dividend Equivalents shall be paid to the Participant with
respect to the Restricted Stock Units.
 
3. Vesting and Forfeiture of Units.  All Restricted Stock Units shall be
unvested unless and until they become vested and nonforfeitable in accordance
with this Section 3.  Except as otherwise provided below, all Restricted Stock
Units granted hereunder shall vest on the third anniversary of the Grant Date
(the “Vesting Date”), provided that the Participant is employed by the Company
or any of its affiliates on such date.  Notwithstanding the foregoing provisions
of this Section 3, all of the Restricted Stock Units that have not otherwise
vested in accordance with the foregoing provisions of this Section 3 shall
become vested and nonforfeitable in accordance with the following:
 
(a)  
Death or Permanent Disability.  The Restricted Stock Units shall become fully
vested and nonforfeitable upon the Participant’s termination of employment with
the Company and its affiliates prior to the Vesting Date if the Participant’s
employment with the Company and its affiliates terminates on account of his or
her death or Permanent Disability.  For purposes of this Agreement, “Permanent
Disability” shall mean a disability which, in the opinion of a physician
designated by the Company, permanently prevents the Participant from being able
to render services to the Company or any of its affiliates.

 

 
 

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Change in Control.  The Restricted Stock Units shall become fully vested and
nonforfeitable upon a Change in Control that occurs prior to the Vesting Date.
(b)  
Retirement.  The Restricted Stock Units shall become fully vested and
nonforfeitable upon the Participant’s Retirement prior to the Vesting Date.  For
purposes of this Agreement, “Retirement” shall mean the Participant’s voluntary
termination of his or her employment with the Company and its affiliates after
he or she satisfies the Retirement Conditions.  The “Retirement Conditions” are
that the Participant has attained age 62 and has been continuously employed by
the Company and its affiliates for at least two (2) years.

 
Any Restricted Stock Units that are not otherwise vested and nonforfeitable upon
the Participant’s termination of employment with the Company and its affiliates
shall be immediately forfeited and the Participant shall have no further rights
to, under or with respect to such Restricted Stock Units.
 
4. Settlement.  Restricted Stock Units that have become vested in accordance
with Section 3 shall be settled as of the “Settlement Date” which is the
earliest of (a) the Vesting Date, (b) the date on which a Change in Control
occurs, or (c) the date of the Participant’s termination of employment with the
Company and its affiliates pursuant to Sections 3(a) or (c) hereof; provided,
however, that if the Participant will or could satisfy the Retirement Conditions
at any time prior to the Vesting Date, settlement of the Participant’s
Restricted Stock Units shall occur on the date of the Change in Control only if
the Change in Control constitutes a change in control event within the meaning
of section 409A of the Code.  Settlement of the vested Restricted Stock Units on
the Settlement Date shall be made in the form of shares of Stock (with one share
of Stock distributed for each vested Restricted Stock Unit and cash equal in
value to any fractional Restricted Stock Unit) registered in the name of the
Participant.  The shares of Stock distributed in settlement of the Restricted
Stock Units will be evidenced by stock certificates which shall be delivered to
Participant.
 
5. Restrictions on Transfer.  The Participant may not sell, assign, pledge or
transfer, other than by the laws of descent or distribution, his or her
Restricted Stock Units or any rights under or with respect to the Restricted
Stock Units.
 
6. Rights as a Stockholder.  The Participant shall not be a stockholder of the
Company until the shares of Stock issued in settlement of the Restricted Stock
Units are registered in his or her name in accordance with the terms of this
Agreement.
 
7. Notices.  Any notice required or permitted under this Agreement shall be
deemed given when delivered personally, or when deposited in a United States
Post Office, postage prepaid, addressed, as appropriate, to the Company at its
principal offices, to the Participant at the Participant’s address as last known
by the Company or, in either case, such other address as one party may designate
in writing to the other.
 

 
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Securities Laws Requirements.  The Company may require as a condition of
distribution of any shares of Stock in settlement of the Restricted Stock Units
that the Participant furnish a written representation that he or she is holding
the shares of Stock for investment and not with a view to resale or distribution
to the public.
8. Protections Against Violations of Agreement.  No purported sale, assignment,
mortgage, hypothecation, transfer, pledge, encumbrance, gift, transfer in trust
(voting or other) or other disposition of, or creation of a security interest in
or lien on, any of the Restricted Stock Units by any holder thereof in violation
of the provisions of this Agreement shall be valid.  The Restricted Share Units
do not constitute shares of Stock unless and until the shares of Stock issued in
settlement of the Restricted Stock Units are registered in his or her name in
accordance with the terms of this Agreement and the Participant shall not, as a
result of this Agreement, be a stockholder of the Company.  The foregoing
restrictions are in addition to and not in lieu of any other remedies, legal or
equitable, available to enforce said provisions.
 
9. Taxes.  The Participant understands that he or she (and not the Company)
shall be responsible for any tax obligations that may arise as a result of the
transactions contemplated by this Agreement and shall pay to the Company the
amount determined by the Company to be such tax obligation at the time such tax
obligation arises.  If the Participant fails to make such payment, the number of
shares of Stock necessary to satisfy the tax obligations shall be withheld from
any distribution in settlement of Restricted Stock Units and shall be used to
satisfy the Participant’s tax obligations.  Without limiting the generality of
the foregoing, (a) the Company has the right to withhold any shares of Stock to
satisfy any applicable withholding taxes required by law, to the extent that the
Company determines it is required to do so by law, and (b) the Participant
agrees to pay to the Company (and hereby authorizes the Company to withhold from
other amounts that are otherwise payable to him or her from the Company if he or
she fails to make such payment) the amount of the Participant’s portion of any
required employment taxes (e.g., FICA and Medicare taxes) that are due upon the
vesting of all or any portion of the Restricted Stock Units, which payment shall
be made at such time specified by the Company in order to enable the Company to
meet its legal obligations with respect to such payments.
 
10. Failure to Enforce Not a Waiver.  The failure of the Company to enforce at
any time any provision of this Agreement shall in no way be construed to be a
waiver of such provision or of any other provision hereof.
 
11. Governing Law.  This Agreement shall be governed by and construed according
to the laws of the State of Delaware without regard to its principles of
conflict of laws.
 
12. Amendments.  Except as provided in Section 17, this Agreement may be amended
or modified at any time only by an instrument in writing signed by each of the
parties hereto.
 
13. Survival of Terms.  This Agreement shall apply to and bind the Participant
and the Company and their respective permitted assignees and transferees, heirs,
legatees, executors, administrators and legal successors.
 

 
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Agreement Not a Contract for Services.  Neither the grant of Restricted Stock
Units, this Agreement nor any other action taken pursuant to this Agreement
shall constitute or be evidence of any agreement or understanding, express or
implied, that the Participant has a right to continue to provide services as an
officer, director, employee or consultant of the Company for any period of time
or at any specific rate of compensation.
14. Severability.  If a provision of this Agreement is held invalid by a court
of competent jurisdiction, the remaining provisions will nonetheless be
enforceable according to their terms.  Further, if any provision is held to be
over broad as written, that provision shall be amended to narrow its application
to the extent necessary to make the provision enforceable according to
applicable law and enforced as amended.
 
15. Plan.  The Restricted Stock Units are granted pursuant to the Plan, and the
Restricted Stock Units and this Agreement are in all respects governed by the
Plan and subject to all of the terms and provisions thereof, whether such terms
and provisions are incorporated in this Agreement by reference or are expressly
cited.
 
16. Special Section 409A Rules.  Notwithstanding any other provision of this
Agreement to the contrary, if any payment or benefit hereunder is subject to
section 409A of the Code, and if such payment or benefit is to be paid or
provided on account of the Participant’s termination of employment (or other
separation from service):
 
(a)  
and if the Participant is a specified employee (within the meaning of section
409A(a)(2)(B) of the Code) and if any such payment or benefit is required to be
made or provided prior to the first day of the seventh month following the
Participant’s separation from service or termination of employment, such payment
or benefit shall be delayed until the first day of the seventh month following
the Participant’s separation from service; and

 
(b)  
the determination as to whether the Participant has had a termination of
employment (or separation from service) shall be made in accordance with the
provisions of section 409A of the Code and the guidance issued thereunder
without application of any alternative levels of reductions of bona fide
services permitted thereunder.

 
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement, effective as of the date first noted above.

PDI,
INC.                                                                                     PARTICIPANT

___________________________                                                                                                ___________________________
Name:                                                                                     
Name:
Title:
 
 
 
 
 
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