Exhibit 10.4

EMPLOYMENT SEPARATION AGREEMENT

Employment Separation Agreement (the “Agreement”) effective as of January 1,
2007, by and between PDI, Inc., a Delaware corporation (the “Company”), having
its principal place of business at 1 Route 17 South, Saddle River, New Jersey
07458, and Mr. Steven K. Budd (the “Executive”), pursuant to which the parties
agree:

1. Employment. In connection with the Executive’s continued employment beyond
the scheduled expiration of that certain Amended and Restated Employment
Agreement dated May 1, 2001, by and between the Company and the Executive (the
“2001 Agreement”), a copy of which is annexed hereto as Exhibit A, and
contingent upon the Executive’s execution of the Company’s current
Confidentiality, Non-Solicitation and Covenant Not to Compete Agreement for
executives (the “Confidentiality Agreement”), annexed hereto as Exhibit B,
simultaneously with the execution of this Agreement, the Company shall continue
Executive’s employment with the Company as President, Sales Services Segment,
which employment shall terminate upon notice by either party, for any reason.
Executive understands and agrees that his employment with the Company is at will
and can be terminated at any time by either party, and for any or no reason.

The Executive and the Company acknowledge and agree that this Agreement shall
supersede the 2001 Agreement in all respects, and that upon the execution of
this Agreement, the 2001 Agreement shall be deemed to be immediately terminated
in all respects and shall be of no further force or effect. Furthermore, for the
purpose of clarity, Executive hereby waives, disclaims, renounces and foregoes
receipt of the “Termination Payment” set forth in paragraph 8(g) of the 2001
Agreement, in order to receive the Retention Benefit set forth in this paragraph
1 and the Termination Benefits set out in paragraph 2 of this Agreement in
addition to his salary and benefits due to him for so long as he continues to be
employed by the Company. Accordingly, the Company agrees that it will provide a
“Retention Benefit” to Executive in the gross amount of $553,777.00, which
equals the sum of (i) 12 times his Base Monthly Salary as of April 30, 2007,
plus (ii) the average of the incentive compensation paid to Executive for the
three (3) calendar years of 2003, 2004 and 2005 (which were approved by the
Compensation and Management Development Committee of the Company’s Board of
Directors (the “Board”) and received by Executive in calendar years 2004, 2005
and 2006).

This Retention Benefit shall be paid to Executive as follows:

a. One- half of the gross Retention Benefit will be paid to Executive in eight
(8) equal installments, paid quarterly, less applicable withholdings under
federal, state and local law or regulations, beginning in February 2007.
Regardless of the reason for such termination, in the event Executive’s
employment with the Company shall terminate before all payments required by this
paragraph 1(a) have been made, then the remaining payments shall be made
simultaneously with the payment of the remaining half of the gross Retention
Benefit, i.e., within ten business days following the Executive’s last day of
employment with the Company.

b. The remaining half of the gross Retention Benefit, less applicable
withholdings under federal, state and local law or regulations, will be paid to
Executive within ten (10) business days following his last day of employment
with the Company, regardless of the reason for the cessation of his employment.

2. Termination Benefits. 

a. In further consideration for Executive’s agreement to execute the
Confidentiality Agreement, the Company agrees that if it terminates the
Executive’s employment without Cause (as defined below) or if the Executive
terminates his employment as provided for in Section 2b hereof, and, in either
instance, the Executive executes and does not revoke the PDI Agreement and
General Release given to him upon such termination in substantially the form
annexed to this Agreement as Exhibit C, the Company will:

i. pay Executive an additional lump sum payment over and above the remaining
gross Retention Benefit equal to six (6) times his Base Monthly Salary, plus
one-half (0.5) of the average of the cash incentive compensation paid to the
Executive during the three (3) years immedi-ately preceding the termination
date (the “Severance Payment”); and,

ii. in the event the Executive properly and timely elects to continue coverage
under the Aetna Plan in accordance with the continuation requirements of COBRA,
the Company shall pay for the continuation of such family benefits under COBRA
(the “COBRA Benefit”) for up to twelve (12) months or until the Executive is
eligible to participate in the health insurance plan of any successor employer
of the Executive, whichever occurs earliest.

b. Subject to the terms and conditions set forth in Section 2a above, the
Executive shall be entitled to the Severance Payment and the COBRA Benefit if he
terminates his employment for any of the following reasons:

(i) as a result of (A) a material reduction in, or the assignment of duties to
the Executive which would be materially inconsistent with, the Executive’s
responsibilities, duties and authorities as President, Sales Services Segment,
which continues unremedied for a period of ten (10) business days after the
Executive has given written notice to the Company of same; (B) a material breach
by the Company of any of the terms or conditions of this Agreement, which
continues unremedied for a period of ten (10) business days after the Executive
has given written notice to the Company of same; or, (C) a reduction of more
than 25% in the Executive’s then current annual base salary or failure to pay
any material amount owing to or to provide a material benefit owing to the
Executive at the time such amount or benefit is due, which continues unremedied
for a period of ten (10) business days after the Executive has given written
notice to the Company of same. Or,

(ii) within two years following the occurrence of a Change in Control because
(A) the Executive suffers a material adverse change in his title or
responsibilities, (B) the Executive suffers a material reduction in his then
current annual base salary (unless such reduction is made in connection with a
pro rata reduction in the annual base salaries of all of the Company’s senior
executives); provided, however, that with respect to items (A) and (B) above,
the Company has not cured such material adverse change or reduction within
thirty (30) days of written notice by the Executive, or, (C) Executive is
required to relocate as a result of a relocation of the Company’s office
location in New Jersey more than 50 miles from its current location.

c. In the event of any termination of the Executive’s employment with the
Company, the Executive shall continue to be bound by the Confidentiality
Agreement for the periods set forth therein.

 
d. In the event of any termination of the Executive’s employment with the
Company the Company shall have no obligation to accelerate the vesting of any
equity based compensation that may be held by, or in the future given to, the
Executive, other than pursuant to the terms and conditions set forth in the
relevant grant agreements dated March 23, 2006, February 15, 2006 and March 10,
2004 (the “grant agreements”) pursuant to which such equity based compensation
was awarded to Executive. The Company will honor all terms and conditions of
such grant agreements

e. Payment of each of the Retention Benefit, the Severance Payment and the COBRA
benefit as set forth in this Agreement is conditioned upon the execution of the
PDI Agreement and General Release and shall be subject to withholding for
applicable federal, state and local income and employment related taxes.

f.  No Termination Benefit will be paid if the Executive resigns or terminates
his employment for any reason other than as set forth in Section 2b or if the
Company terminates the Executive’s employment for Cause (as defined below) as
determined by the Board or its designee(s).

3. Definitions.
 
a. Cause shall mean (1) the intentional and deliberate failure by the Executive
to comply with the reasonable instructions of the Company’s Chief Executive
Officer (“CEO”) or the Board, provided that such instructions are consistent
with the Executive’s duties and responsibilities, and which such refusal
continues unremedied for a period of ten (10) business days after the Board or
CEO has given written notice to the Executive specifying in reasonable detail
the instructions the Executive has failed to comply with; (2) a material breach
by the Executive of any of the terms and conditions of this Agreement or the
Confidentiality Agreement that continues unremedied for a period of ten (10)
business days after the CEO or the Board has given written notice to the
Executive specifying in reasonable detail the Executive’s breach of this
Agreement; (3) the failure by the Executive to adhere to the Company’s
documented policies and procedures that continues unremedied for a period of ten
(10) business days after the CEO or Board has given written notice to the
Executive specifying in reasonable detail the Executive’s breach of such
policies and/or procedures; (4) the failure of the Executive to adhere to moral
and ethical business principles consistent with the Company’s Code of Conduct as
in effect from time to time; (5) Executive's conviction of a crime (including
entry of a nolo contendere plea); or (6) any act of dishonesty or fraud by the
Executive.

b. Base Monthly Salary shall mean an amount equal to one-twelfth of the
Executive's then current annual base salary. Base Monthly Salary shall not
include incentives, bonus(es), health and welfare benefits, car allowances, long
term disability insurance or any other compensation or benefit provided to
employees of the Company at the executive level.

c. Change of Control shall mean (1) any merger by the Company into another
corporation or corporations which results in the stockholders of the Company
immediately prior to such transaction owning less than 51% of the surviving
corporation; (2) any acquisition (by purchase, lease or otherwise) of all or
substantially all of the assets of the Company by any person, corporation or
other entity or group thereof acting jointly; (3) the acquisition of beneficial
ownership of voting securities of the Company (defined as common stock of the
Company or any securities having voting rights that the Company may issue in the
future) or rights to acquire voting securities of the Company (defined as
including, without limitation, securities that are convertible into voting
securities of the Company (as defined above) and rights, options, warrants and
other agreements or arrangements to acquire such voting securities) by any
person, corporation or other entity or group thereof acting jointly, in such
amount or amounts as would permit such person, corporation or other entity or
group thereof acting jointly to elect a majority of the members of the Board, as
then constituted; or (4) the acquisition of beneficial ownership, directly or
indirectly, of voting securities and rights to acquire voting securities having
voting power equal to 51% or more of the combined voting power of the Company’s
then outstanding voting securities by any person, corporation or other entity or
group thereof acting jointly. Notwithstanding the preceding sentence, (i) any
transaction that involves a mere change in identity form or place of
organization within the meaning of Section 368(a)(1)(F) of the Internal Revenue
Code of 1986, as amended, or a transaction of similar effect, shall not
constitute a Change of Control.

4.  Integration; Amendment. This Agreement and the Confidentiality Agreement
constitute the entire agreement between the parties hereto with respect to the
matters set forth herein and supersede and render of no force and effect all
prior understandings and agreements between the parties with respect to the
matters set forth herein. No amendments or additions to this Agreement or the
Confidentiality Agreement shall be binding unless in writing and signed by both
parties.

5.  Governing Law; Headings. This Agreement and its construction, performance
and enforceability shall be governed by, and construed in accordance with, the
laws of the State of New Jersey, without regard to its conflicts of law
provisions. Headings and titles herein are included solely for convenience and
shall not affect, or be used in connection with, the interpretation of this
Agreement.

6.  Jurisdiction. Except as otherwise provided for herein, each of the parties
(a) irrevocably submits to the exclusive jurisdiction of any state court sitting
in Bergen County, New Jersey or federal court sitting in New Jersey in any
action or proceeding arising out of or relating to this Agreement; (b) agrees
that all claims in respect of the action or proceeding may be heard and
determined in any such court; (c) agrees not to bring any action or proceeding
arising out of or relating to this Agreement in any other court; and (d) waives
any right such party may have to a trial by jury with respect to any action or
proceeding arising out of or relating to this Agreement. Each of the parties
waives any defense of inconvenient forum to the maintenance of any action or
proceedings so brought and waives any bond, surety or other security that might
be required of any other party with respect thereto. Any party may make service
on another party by sending or delivering a copy of the process to the party to
be served at the address set forth above or such updated address as may be
provided to the other party. Nothing in this Section 6, however, shall affect
the right of any party to serve legal process in any other manner permitted by
law.

(Signatures appear on page 5)

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IN WITNESS WHEREOF the parties have duly executed this Employment Separation
Agreement as of the date first above written.

        

 EXECUTIVE    PDI, INC.    /s/ Steven K. Budd______________
 By:
 /s/ Michael Marquard________ 
   Steven K. Budd     Michael Marquard, Chief        Executive Officer