Exhibit 10.16 Ellberger Employment Saparation Agreement


    


    November
      14, 2005

    


    


    Mr.
      Larry
      Ellberger

    23
      Fawn
      Drive

    Livingston,
      NJ 07039

    


    Dear
      Larry:

    


    I
      am
      pleased to extend this offer to you as Chief Administrative Officer, Executive
      Vice President, reporting directly to me. In this new role, you will have
      responsibility for Corporate Development, Finance, Legal, and Investor
      Relations. In your capacity, you will be a key member of the management team
      and
      a highly visible presence to shareholders and prospective investors. This
      appointment will include leadership roles on the Executive Finance Committee
      and
      the Mergers and Acquisitions Committee.

    


    Enclosed
      is the PDI Confidentiality, Non-Solicitation, and Covenant not to Compete
      Agreement (the “Confidentiality Agreement”) and your Employment Separation
      Agreement (the “Separation Agreement”). Your employment with PDI is conditioned
      upon your acceptance of this offer (the “Offer Letter”) and your signing of the
      both the Confidentiality Agreement and the Separation Agreement.

    


    BASE
      COMPENSATION

    


    Your
      base
      compensation will be: $12,500.00 per semi-monthly pay period, which if
      annualized, would be equivalent to: $300,000.00.

    


    .

    LONG
      TERM INCENTIVE COMPENSATION

    


    As
      we
      discussed, given your position, the use of restricted stock is an excellent
      way
      to reward you for our results. I am authorized to offer a grant of restricted
      shares which will be provided upon your acceptance of the offer and final Board
      approval. As set forth below, the maximum number of restricted shares that
      ultimately may be issued to you pursuant to this Offer Letter is 50,000. To
      ensure alignment between current PDI practices that link compensation to
      performance, the actual number of restricted shares that may be issued to you
      pursuant to this Offer Letter will be driven by the performance of the Company’s
      share price at the end of the performance period which has been designated
      as
      August 15, 2005 through March 31, 2007. 

     

    The
      actual award will be determined as follows:

     

    
      	
              Stock
                Price Performance Targets*

            	
              Award

            
	
               

              $36.00
                plus

            	
               

              50,000
                shares

            
	
               

              $20.00
                - $35.99

            	
               

              16,750
                shares plus 20.78 shares for each cent ($.01) above $20.00 stock
                price

            
	
               

              less
                than $20.00 

            	
               

              0
                shares

            


    

    


     

    Stock
      price will be determined based on a three month average closing price ending
      the
      earliest of : (1) the public announcement of your departure from the Company;
      (2) the last day of your employment with the Company; or (3) March 31,
      2007.

    


    You
      are
      not eligible to participate in other short term or long term incentive plans.
      

    


    


    STOCK
      OPTIONS FOR BOARD MEMBERSHIP

    


    Your
      current stock option agreements covering the options previously issued to you
      as
      a result of your service on PDI’s Board of Directors will be amended to give you
      three years from termination of employment to exercise your then vested options.
      These options will be fully vested upon your termination of
      employment.

    


    


    You
      will
      be paid a pro rated 3rd
      Quarter
      fee based on the actual date which you move off of the Board of Directors.
      

    


    


    CAR
      ALLOWANCE

    


    You
      will
      be eligible for a monthly car allowance of $1,000.00, or according to PDI’s Car
      Allowance Policy, you may elect to receive a car from the current PDI selection
      at the Executive Vice President level.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    


    


    FINANCIAL
      PLANNING SERVICES

    


    You
      are
      eligible to receive financial planning assistance through AYCO Financial
      Planning Services effective upon your date of hire. These services include:
      estate planning, income tax 

    preparation
      and planning, investment planning, retirement planning, compensation &
benefit planning and insurance planning.

    


    


    HOLIDAY
      AND BANK OF DAYS

    


    Based
      on
      an August 15th
      start
      date, you will be eligible for 10 paid days during your initial period of
      service ending December 31, 2005. You are also eligible for all Company
      holidays. Effective January 1, 2006, you will be eligible for 19 paid days
      per
      calendar year in addition to Company holidays.

    


    


    I
      am
      delighted to extend this offer and believe that you will have an opportunity
      to
      make a significant impact on the continued growth of PDI. 

    


    Sincerely,

    


    


    Frank
      Ryan

    Compensation
      Committee Chair

    


    


    Enc.: PDI
      Confidentiality Agreement

    Separation
      Agreement

    


    cc: File

    


    
      	 
	
              Larry
                Ellberger

            
	
               

              I
                accept the terms of my employment with
                PDI.

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    


      
        
           

          EMPLOYMENT
            SEPARATION AGREEMENT

           

          



            PDI,
              Inc., a Delaware corporation (the “Company”), having its principal place of
              business at 


           


            1
              Route 17 South, Saddle River, New Jersey 07458, and Larry Ellberger,
              23 Fawn
              Drive, Livingston, New Jersey 07039 (the “Executive”), agree:


           

          


          1. Employment. 

           

            The
            Company hereby
            employs the Executive as Chief Administrative Officer commencing on August
            15,
            2005c and with an anticipated duration through March 31, 2007; provided,
            however, that Executive’s employment may be terminated by either party, for any
            reason, with or without notice. On or before January 1, 2007, the Company
            shall
            inform the Executive whether the Company intends to extend the Executive’s
            employment for an additional period of time to be determined by the
            Company.

          



            Executive
              understands and agrees that his employment with the Company is at will
              and can
              be terminated by either party, for any or no reason; provided, however,
              that if
              (i) the Company gives notice of termination without cause which has
              an effective
              date before March 31, 2007 or (ii) Executive gives notice of termination
              with
              Good Reason (as defined in Section 3© below) which has an effective date before
              March 31, 2007 and (iii) the price of the Company’s common stock is less than
              $20.00 per share at the time of such termination, the Company shall
              continue
              Executive’s Base Compensation following his termination until such time as the
              Executive receives the gross sum of $300,000.00, calculated from the
              last day
              worked; provided that the Executive executes and does not revoke the
              PDI
              Agreement and General Release given to him upon termination.


           


            Notwithstanding
              the foregoing, to the extent the Executive remains employed through
              March 31,
              2007, the Executive shall be paid the Base Compensation and Long Term
              Incentive
              Compensation, as these terms are described in the Executive’s July 26, 2005
              Offer Letter (the “Offer Letter”) on or before March 31, 2007, and Executive
              will not be entitled to any severance benefits.


           

          2. Termination
            Benefits. 

          



            In
              further consideration for Executive’s agreement to execute the PDI
              Confidentiality, Non-Solicitation and Covenant Not to Compete Agreement
              (the
“Confidentiality Agreement”), the Company agrees that if the Executive’s
              termination from employment is made effective before March 31, 2007:
              (i) by the
              Company without Cause; (ii) in connection with a Change of Control;
              or (iii) by the Executive for Good Reason, the Company will accelerate
              the
              vesting of all equity based compensation to which the Executive may
              be entitled
              pursuant to the Offer Letter from the Company to the Executive including,
              but
              not limited to, any stock grant, option or other form of equity compensation
              (i.e., long term incentive compensation), so that all such compensation is
              fully vested and exercisable upon separation provided that if the Company
              terminates the Executive’s employment without Cause, the Company shall provide
              Executive with at least 30 days written notice prior to such
              termination. The Company will amend any applicable agreement to effectuate
              this provision or, if legally prohibited, will pay the monetary value of
              such compensation; provided that the Executive executes and does not
              revoke the
              PDI Agreement and General Release given to him upon termination. In
              connection
              with any equity compensation where the number of shares to be granted
              to the
              Executive is based upon the price of the Company’s common stock, the relevant
              price used to determine the number of shares to be granted shall be
              the greater
              of: (A) the average closing price of the Company’s common stock on the Nasdaq
              National Market for the ninety (90) day period ending on the earliest
              of: (1)
              the public announcement of the Executive’s departure from the Company; (2) the
              last day of the Executive’s employment with the Company; or (3) March 31, 2007
              or (B) if a Change of Control has occurred (as defined below), the
              relevant
              price for the Company’s common stock paid by the buyer at the time of the Change
              of Control. The Executive shall continue to be bound by the confidentiality,
              non-solicitation, non-competition and other provisions set forth in
              the
              Confidentiality Agreement for the periods set forth
              therein. 


           

          No
            termination benefits will be paid if the Executive resigns or terminates
            his
            employment without Good Reason, or if the Company terminates the Executive’s
            employment for Cause as determined by the Chief Executive Officer or
            the Board
            of Directors (the “Board”) of the Company. 

           

          Notwithstanding
            the foregoing, if the Executive shall become Disabled, the Company may
            terminate
            the Executive’s employment; provided, however,
            that the
            Executive shall receive his Base Compensation (as that term is described
            in the
            Offer Letter) through the Executive’s date of termination and Long Term
            Incentive Compensation (as that term is described in the Offer Letter)
            as if the
            Executive had remained employed through March 31, 2007. 

           

          The
            Executive’s employment with the Company shall terminate upon his death.
            Notwithstanding the foregoing, the Company shall continue to pay the
            Executive’s
            estate all
            compensation the Executive would have been eligible for under
            the
            terms of the Offer Letter as
            if the
            Executive had remained employed through March 31, 2007. 

           

          3. Definitions.

          
            	 	
                    a.

                  	
                    Cause
                      shall mean (1) the willful
                      failure
                      or
                      refusal to perform lawful directives of the Company that has
                      a material
                      adverse impact on the Company; (2) a willful violation of
                      the Company’s policies and procedures
                      that has a material adverse impact upon the Company; (3) the
                      willful
                      failure to adhere to moral and ethical business principles
                      that has a
                      material adverse impact on the Company; (4) Executive’s conviction of a
                      felony,
                      or a misdemeanor involving fraud or dishonesty
                      that has a material adverse impact on the Company (including
                      entry of a
                      nolo contendere plea); or (5) any act of dishonesty or fraud
                      in
                      the commission of his duties
                      that has a material adverse impact upon the Company, provided,
                      however;
                      that as to items (1), (2), (3) and (5) above, the Company will
                      provide
                      thirty (30) days advance written notice and an opportunity
                      for Executive
                      to cure such alleged Cause.

                  


          

          
            	 	
                    b.

                  	
                    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
                      55% 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, directly or indirectly,
                      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)
                      and 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 25% 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 unless such acquisition as is described in this
                      part (4) is
                      expressly approved by resolution of the Board passed upon affirmative
                      vote
                      of not less than a majority of the Board and adopted at a meeting
                      of the
                      Board held not later than the date of the next regularly scheduled
                      or
                      special meeting held following the date the Company obtains
                      actual
                      knowledge of such acquisition (which approval may be limited
                      in purpose
                      and effect solely to affecting the rights of Executive under
                      this
                      Employment Separation Agreement (this “Agreement”). 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.

                  


          


            
              	 	
                      c.

                    	
                      Good
                        Reason shall mean the occurrence of any of the following
                        events: (1) an adverse change, not consented to by the Executive,
                        in the
                        nature or scope of the Executive’s responsibilities, authorities, powers,
                        functions or duties; or (2) a reduction in the Executive’s annual base
                        salary as in effect on the date hereof or as the same may
                        be increased
                        from time to time hereafter, except for across-the-board
                        salary reductions
                        similarly affecting all or substantially all management employees;
                        or (3)
                        the relocation of the Company’s offices at which the Executive is
                        principally employed immediately prior to the date of a Change
                        in
                        Control (the “Current Offices”) to any other location more than 50
                        miles from the Current Offices, or the requirement by the
                        Company for the
                        Executive to be based anywhere other than the Current Offices,
                        except for
                        required travel on the Company’s business; or (4) the failure by the
                        Company to obtain an effective agreement from any successor
                        to assume and
                        agree to perform this Agreement, as required by Section 4,
                        provided,
                        however; that as to items (1), (2), and (4) above, the Executive
                        will
                        provide thirty (30) days advance written notice and an opportunity
                        for the
                        Company to cure such alleged Good Reason. Executive agrees
                        that he will
                        not unreasonably withhold his consent to changes in the nature
                        or scope of
                        the Executive’s responsibilities, authorities, powers, functions or duties
                        which may be made or proposed by the Company. Further, Executive
                        understands and agrees that the Company contemplates the
                        hiring of a Chief
                        Financial Officer, an event which shall not constitute “Good Reason” under
                        this Agreement.

                    


            


          
            	 	
                    d.

                  	
                    Disabled
                      shall mean the inability of Executive to perform on a full-time
                      basis the
                      duties and responsibilities of his employment with the Company
                      by reason
                      of his illness or other physical or mental impairment or condition,
                      if
                      such inability continues for an uninterrupted period of 180
                      days or more
                      during any 360-day period. A period of inability shall be “uninterrupted”
                      unless and until Executive returns to full-time work for a
                      continuous
                      period of at least 30 days.

                  


          

          


          Integration;
            Amendment;
            Assignment.
            This
            Agreement and the Confidentiality Agreement constitute the entire agreement(s)
            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.
            This
            Agreement shall be binding upon the Company’s successors and assigns and
            Executive shall be able to enforce this Agreement as to the Company’s successors
            and assigns.

           

          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.

           

          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.

           

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

           

          


           

          EXECUTIVE

           

          /s/
            Larry
            Ellberger

          Dated:
            ______________________________

          


          


           

          PDI,
            INC.

           

          


          


          
 

          Dated:
            ________________________________