EXHIBIT
10.5





PDI,
INC.


2004
STOCK AWARD AND INCENTIVE PLAN


STOCK
APPRECIATION RIGHTS AGREEMENT





This
Stock Appreciation Rights (“SAR”) Agreement (this "Agreement") is made as of
_____ __, 200_ (the "Date of Grant") between PDI, Inc., a Delaware corporation,
(the "Company"), and ____________ (the "Recipient"), an employee of the
Company.  This Agreement and the SARs granted hereunder are made
pursuant to the terms of the Company’s 2004 Stock Award and Incentive Plan (the
"Plan"). Capitalized terms not otherwise defined herein shall have the meaning
ascribed to them in the Plan.




Section 1. Stock Appreciation Rights
Award. The Company hereby grants to the Recipient, on the terms and
conditions hereinafter set forth, _________ Stock Appreciation Rights (the
“SARs”).  Each SAR represents the right to receive an amount payable
in shares of the Company’s Stock (the “Shares”) as provided in Section 4 below,
equal in value to the excess, if any, of the Fair Market Value of a Share on the
date of exercise of the SAR over the SAR Exercise Price .  For
purposes of this Agreement, the “SAR Exercise Price” shall mean the Fair Market
Value of a Share as of the Date of Grant ($_____).




Section 2. Vesting of SARs.
Subject to Sections 4 and 5 hereof, the SARs shall vest in three (3) equal
annual installments on each anniversary of the Date of Grant in accordance with
the vesting schedule below.




Vesting Date
            Number of SARs_______
      _, 20__
            _____________
      _, 20__
            _____________
      _, 20__
            ______





Section 3. SAR Term. Subject to
the provisions of Section 5 of this Agreement, the SARs that become vested
pursuant to Section 2 hereof may be exercised at any time for a period of five
(5) years from the Date of Grant (the “SAR Term”).  Upon the
expiration of the SAR Term, any vested and unexercised SARs shall be cancelled
and no longer exercisable, and shall be of no further force or
effect.





Section 4. SAR
Exercise.




(a)           Subject
to the provisions of Section 5 hereof, the Recipient may inform the Company of
his or her intention to exercise any portion (or all) of the vested SARs at any
time prior to the expiration of the SAR Term by submitting the appropriate SAR
exercise form to the Company.  The SAR exercise form must be provided
to the Company at least three (3) business days prior to the proposed exercise
date, and must: (i) state the number of SARs desired to be exercised; (ii) in
the event that the SARs shall be exercised by any person other than the
Recipient hereof, include appropriate proof of the right of such person to
exercise the SAR; and (iii) comply with such further requirements consistent
with the Plan as the Board or the







Committee
may from time to time prescribe. No exercise of any SARs will be effective until
the appropriate and completed SAR exercise form is received and processed in the
ordinary course by the Company.




(b)           Upon
the exercise of a SAR, the Recipient shall be entitled to receive an amount
equal to the product of (i) the excess of the Fair Market Value of one Share on
the date of exercise over the SAR Exercise Price, multiplied by (ii) the number
of Shares in respect to which the SAR has been exercised.  Except as
otherwise determined by the Committee, the payment shall be made in Shares based
upon the Fair Market Value of a Share on the date of exercise, , subject to all
applicable federal and state income tax and other appropriate
deductions.  Fractional shares shall be settled by payment in cash
based upon the Fair Market Value on such date.  Recipient is
responsible for the payment of all federal, state and local income taxes and
other appropriate deductions associated with any SAR exercise, and the Company
reserves the right to postpone the transfer of any Shares payable as a result of
a Recipient’s SAR exercise until such amounts are paid.  Subject to
the above provisions, the Shares payable upon the exercise of SARs shall be paid
as soon as practicable following the exercise date; provided, however, that the
Company may delay the issuance of such Shares to the extent necessary to comply
with applicable federal and/or state laws and securities registration/ownership
requirements.





Section 5. Termination of
Service. If Recipient's service as an employee of the Company is
terminated, the Recipient shall: (i) immediately forfeit his or her interest in
any SARs that have not yet become vested, which shall be cancelled and be of no
further force or effect, and (ii) retain the right to exercise any SARs that had
previously become vested prior to the effective date of termination of
employment with the Company until the expiration of thirty (30) days after the
effective date of such termination of employment; provided, however, that in the
event such termination of employment is as a result of the Recipient’s
Retirement or Permanent Disability, the period during which an Recipient may
exercise his or her vested SARs shall continue until the expiration of ninety
(90) days after the effective date of termination of employment.  For
purposes of this Agreement, “Retirement” shall mean the Recipient’s voluntary
termination of his or her employment with the Company at any time on or after
the date on which the following two conditions have been satisfied: (i) the
Recipient has reached age 62 and (ii) the Recipient has been continuously
employed by the Company and its affiliates for at least two (2)
years.  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 Recipient from being able to render services
to the Company.  If the Recipient’s employment with the Company
terminates as a result of his or her death, or if the Recipient should die after
terminating his or her employment with the Company but prior to the expiration
of the above referenced thirty (30) or ninety (90) day exercise period, as
appropriate, the representative of the Recipient’s estate shall have one (1)
year from the effective date of termination of employment to exercise any SARs
that had previously become vested prior to the effective date of termination of
the deceased Recipient’s employment with the Company.




Section
6.  No Rights as Stockholder or
Employee.




(a)           The
Recipient shall not be deemed to be the holder of, or to have any of the rights
of a holder with respect to, any Shares subject to the SARs until such SAR shall
have been exercised pursuant to the terms of this Agreement and the Company
shall have issued the Shares




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to the
Recipient, whereupon the Recipient shall have full voting and other ownership
rights with respect to such Shares.




(b)           Nothing
in this Agreement shall confer upon the Recipient any right to continue as an
employee of the Company or to interfere in any way with the right of the Company
to terminate the Recipient's employment at any time to the same extent as such
right may exist in the absence of this Agreement.




Section 7. Adjustments. If at
any time while any SARs are outstanding, the number of outstanding Shares is
changed by reason of any events described in the Plan, the number of SARs
granted under this Agreement, and any and all rights with regard to same, may be
adjusted in accordance with the provisions of the Plan, in the sole discretion
of the Committee.




Section 8. Restriction on Transfer of
SAR Shares. No SARs (or the option to exercise same) may be transferred,
pledged, assigned, hypothecated or otherwise disposed of in any way by the
Recipient, except to the Company upon termination of the Recipient’s employment
as provided for herein. In the event a Recipient becomes legally incapacitated
and terminates his or her employment, his or her SARs shall be exercisable by
his or her legal guardian, committee or legal representative, in accordance with
the provisions of Section 5 hereof. If the Recipient dies, the SAR shall
thereafter be exercisable by the Recipient's designated beneficiary or, absent
such a designation, by the executors or administrators of Recipient’s estate, in
accordance with Section 5 hereof.  Any attempted assignment, transfer,
pledge, hypothecation or other disposition of any SARs (or rights to exercise
same) contrary to the provisions hereof, or the levy of any execution,
attachment or similar process upon such SARs, shall be null and void and without
effect.




Section 9. Notices. Any notice
hereunder by the Recipient shall be given to the Company in writing and such
notice shall be deemed duly given only upon receipt thereof at the Company's
office at Saddle River Executive Centre, 1 State Route 17 South, Saddle River,
New Jersey 07458, Attn:  Human Resource Department, or at such other
address as the Company may designate by notice to the Recipient. Any notice
hereunder by the Company shall be given to the Recipient in writing and such
notice shall be deemed duly given only upon receipt thereof at such address as
the Recipient may have on file with the Company.




Section 10. Construction. The
construction of this Agreement is vested in the Board or the Committee, as
applicable, and their respective construction shall be final and
conclusive.




Section 11. Governing Law. This
Agreement shall be construed and enforced in accordance with the laws of the
State of Delaware, without giving effect to the choice of law principles
thereof.




Section 12. 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.




Section 13. Amendments. Except as
provided in Section 16, this Agreement may be amended or modified at any time
only by an instrument in writing signed by each of the parties
hereto.




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Section 14. Survival of
Terms.  This Agreement shall apply to and bind the Recipient
and the Company and their respective permitted assignees and transferees, heirs,
legatees, executors, administrators and legal successors.




Section 15. 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.




Section 16. Plan.  The
SARs are granted pursuant to the Plan, and the SARs 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.




Section 17. Section
409A.  This Agreement shall be interpreted and applied so that
the SARs are exempt from, and will not be subject to, Section 409A of the
Code.  In addition, this Agreement shall be interpreted and applied as
if it contained any additional provisions that is required to obtain in order
for the SARs to be exempt from Section 409A of the Code.









Grant
Date: _______ _,
20__                                                                           PDI,
Inc.




By:           ___________________________________


Name:


Title:







RECIPIENT








Signature:________________________________





Print
Name:







Employee
ID:



















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