exhibit10-1.htm


    EMPLOYMENT SEPARATION
AGREEMENT

    


    This
Employment Separation Agreement (this “Agreement”) is effective as of November 12, 2008, 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 Nancy Lurker, residing
at                            (the
“Executive”), pursuant to which the aforementioned parties agree:

    


    
      	
              1.

            	
              Employment.

            	
              In
      connection with Executive’s acceptance of that certain offer of employment
      letter dated October 24, 2008 (the “Offer Letter”) and contingent upon
      Executive’s successful completion of any pre-employment screening
      requirements set forth in the Offer Letter and execution of the Company’s
      Confidentiality, Non-Solicitation and Covenant Not to Compete Agreement,
      the Company shall employ the Executive as Chief Executive Officer of the
      Company, which employment shall terminate upon notice by either party, for
      any reason.  Executive
      understands and agrees that Executive’s employment with the Company is at
      will and can be terminated at any time by either party, and for any or no
      reason.

            


    

    


    
      	
              2.

            	
              Compensation
      and Benefits Payable Upon Involuntary Termination without Cause or
      Resignation for Good Reason or Change of Control.

            


    

    


    
      	
               
      

            	
              a.

            	
              Triggering
      Event.  In further consideration for Executive’s
      employment, Executive will receive the compensation and benefits set forth
      in Section 2(b) if the requirements set forth in Subsections (i or ii) and
      Subsection iii (hereinafter referred to as the “Triggering Event”) are
      met:

            


    

    


    
      	 	
              i.  

            	
              Executive’s
      employment is terminated involuntarily by the Company at any time for
      reasons other than death, Total Disability or Cause, or Executive resigns
      from employment for Good Reason; or

            


    

    


    
      	 	
              ii.  

            	
              Executive’s
      employment is terminated in connection with a Change of Control (as
      defined in Section 6(c); and

            


    

    


    
      	
               
      

            	
              iii.

            	
              As
      of the 30th day following her termination date, Executive has executed the
      Agreement and General Release in substantially the form attached to this
      Agreement or in such form as may be provided by the Company (the
      “Release”), provided that Release does not release Executive’s rights and
      benefits as vested under ERISA or wage and hour laws of New Jersey, any
      applicable revocation period has expired and Executive has not revoked the
      Release during such revocation
period.

            


    

    


    
      	
               
      

            	
              b.

            	
              Compensation
      and Benefits.  Following the occurrence of a Triggering
      Event, the Company will provide the following compensation and benefits to
      Executive:

            


    

    


    
      	 	
              i.  

            	
              The
      Company will pay Executive a lump sum payment equal to the product of: (a)
      eighteen (18) times Executive’s Base Monthly Salary (excluding incentives,
      bonuses, and other compensation), plus the actual amount paid to Executive
      under any cash-based incentive or bonus plan in which Executive
      participates with respect to the last full fiscal year of Executive’s
      participation in such plan prior to the date of termination of Executive’s
      employment with the Company if the Triggering Event occurs on or before
      November 18, 2010; or (b)
      twenty-four (24) times Executive’s Base Monthly Salary (excluding
      incentives, bonuses, and other compensation) , plus the average of the
      annual amounts paid to Executive under any cash-based incentive or bonus
      plan in which Executive participates with respect to the last three (3)
      full

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	
               

            	
              fiscal
      years of Executive’s participation in such plan prior to the date of
      termination of Executive’s employment with the Company (or, if Executive’s
      number of full fiscal years of participation in any such plan prior to the
      date of termination of Executive’s employment is less than three (3), the
      average of the annual amounts paid to Executive over the number of full
      fiscal years of Executive’s participation in such plan prior the date of
      termination of Executive’s employment) if the Triggering Event occurs
      after November 18, 2010.

            


    

    


    
      	
               
      

            	
              ii.

            	
              The
      Company will reimburse Executive for the cost of the premiums for COBRA
      group health continuation coverage under the Company’s group health plan
      paid by Executive for coverage during the period beginning following
      Executive’s termination date and ending on the earlier of
      either:  (A) eighteen (18) months if the Triggering Event occurs
      on or before November 18, 2010 or twenty-four
      (24) months if the Triggering Event occurs after November 18, 2010; or (B)
      the date on which Executive becomes eligible for other group health
      coverage, provided that no reimbursement shall be paid unless and until
      Executive submits proof of payment acceptable to the Company within 90
      days after Executive incurs such expense.  Any reimbursements of
      the COBRA premium that are taxable to the Executive shall be made on or
      before the last day of the year following the year in which the COBRA
      premium was incurred, the amount of the COBRA premium eligible for
      reimbursement during one year shall not affect the amount of COBRA premium
      eligible for reimbursement in any other year, and the right to
      reimbursement shall not be subject to liquidation or exchange for another
      benefit.

            


    

    


    
      	
               
      

            	
              c.

            	
              Delay
      of Payment to Comply with Code Section
      409A.  Notwithstanding anything herein to the contrary,
      if at the time of Executive’s termination of employment with the Company,
      Executive is a “specified employee” within the meaning of Code Section
      409A and the regulations promulgated thereunder, then the Company shall
      delay the commencement of such payments (without any reduction) by a
      period of six (6) months after Executive’s termination of
      employment.  Any payments that would have been paid during such
      six (6) month period but for the provisions of the preceding sentence
      shall be paid in a lump sum to Executive six (6) months and one (1) day
      after Executive’s termination of employment.  The 6-month
      payment delay requirement of this Section 2(c) shall apply only to the
      extent that the payments under this Section 2 are otherwise subject to
      Code Section 409A.  With respect to payments or benefits under
      this Agreement that are subject to Code Section 409A, whether Executive
      has had a termination of employment shall be determined in accordance with
      Code Section 409A and applicable guidance issued
    thereunder.

            


    

    


    3.           Other
Compensation and Benefits.

    


    
      	
               
      

            	
              a.

            	
              Except
      as may be provided under this Agreement, any benefits to which Executive
      may be entitled pursuant to the plans, policies and arrangements of the
      Company shall be determined and paid in accordance with the terms of such
      plans, policies and arrangements, and Executive shall have no right to
      receive any other compensation or benefits, or to participate in any other
      plan or arrangement, following the termination of Executive’s employment
      by either party for any reason.

            


    

    


    
      	
               
      

            	
              b.

            	
              Notwithstanding
      any provision contained herein to the contrary, in the event of any
      termination of employment, the Company shall pay Executive her earned, but
      unpaid, base salary within ten (10) days of Executive’s termination date
      and shall reimburse Executive for any accrued, but unpaid, reasonable
      business expenses, in each case, earned or accrued as
  of

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	
               
      

            	
              the
      date of termination.  Executive shall submit documentation of
      any business expenses within ninety (90) days of her termination date and
      any reimbursements of such expenses that are taxable to the Executive
      shall be made on or before the last day of the year following the year in
      which the expense was incurred, the amount of the expense eligible for
      reimbursement during one year shall not affect the amount of reimbursement
      in any other year, and the right to reimbursement shall not be subject to
      liquidation or exchange for another
benefit.

            


    

    


    
      	
              4.

            	
              Withholding.  All
      amounts otherwise payable under this Agreement shall be subject to
      customary withholding and other employment taxes, and shall be subject to
      such other withholding as may be required in accordance with the terms of
      this Agreement or applicable law.

            


    

    


    
      	
              5.

            	
              Confidentiality,
      Non-Solicitation and Covenant Not to Compete
      Agreement.  In the event Executive’s employment with the
      Company is terminated by either party for any reason, Executive shall
      continue to be bound by the Company’s Confidentiality, Non-Solicitation
      and Covenant Not to Compete Agreement for the periods set forth therein (a
      copy of which is attached to this
Agreement).

            


    

    


    6.           Definitions.

    


    
      	
               
      

            	
              a.

            	
              Cause
      shall mean: (i) the failure of Executive to use Executive’s best efforts
      in accordance with Executive’s position, skill and abilities to achieve
      Executive’s goals as periodically set by the Company; (ii) the failure by
      Executive to comply with the reasonable instructions of the Company’s
      Board of Directors (the “Board”); (iii) a material breach by Executive of
      any of the terms or conditions of this Agreement or the Confidentiality,
      Non-Solicitation and Covenant Not To Compete Agreement; (iv) the failure
      by Executive to adhere to the Company’s documented policies and
      procedures; (v) the failure of Executive to adhere to moral and ethical
      business principles consistent with the Company’s Code of Business Conduct
      and Guidelines on Corporate Governance as in effect from time to time;
      (vi) Executive's conviction of a criminal offense (including the entry of
      a nolo contendere plea); (vii) any documented act of material dishonesty
      or fraud by the Executive in the commission of her duties; or (viii)
      Executive engages in an act or series of acts constituting misconduct
      resulting in a misstatement of the Company’s financial statements due to
      material non-compliance with any financial reporting requirement within
      the meaning of Section 304 of The Sarbanes-Oxley Act of
    2002.

            


    

    


    
      	
               
      

            	
              b.

            	
              Base
      Monthly Salary shall mean an amount equal to one-twelfth of
      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 executive employees of the
      Company.

            


    

    


    
      	
               
      

            	
              c.

            	
              Change
      of Control shall mean: (i) 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; (ii) 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; (iii)
      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 (iv) 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, 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 Code, or a transaction of similar effect,
      shall not constitute a Change of
Control.

            


    

    


    
      	
               
      

            	
              d.

            	
              Good
      Reason.  Executive’s termination of employment with the
      Company shall be for Good Reason if (i) Executive  notifies the
      Company in writing that one of the Good Reason Events (as defined below)
      has occurred, which notice shall be provided within ninety (90) days after
      she first becomes aware of the occurrence of such Good Reason Event, (ii)
      the Company fails to cure such Good Reason Event within thirty (30) days
      after receipt of the written notice from Executive (the “Cure Period”),
      and (iii) Executive resigns employment within thirty (30) days following
      expiration of the Cure Period.  For purposes of this Agreement,
      a “Good Reason Event” shall mean any of the following which occur without
      Executive’s consent:

            


    

    


    
      	
               
      

            	
              A.

            	
              The
      failure by the Company to pay Executive any material amount of her current
      salary, or any bonus which Executive has earned and to which Executive has
      become entitled, or any material amount of her compensation deferred under
      any plan, agreement or arrangement of or with the Company that is
      currently due and payable;

            


    

    


    
      	
               
      

            	
              B.

            	
              A
      material reduction in Executive’s annual base salary; provided that a
      reduction consistent with reductions made to the annual base salaries for
      similarly situated senior executives of no more than 15% shall not
      constitute a Good Reason Event;

            


    

    


    
      	
               
      

            	
              C.

            	
              The
      relocation of Executive’s principal place of employment to a location more
      than fifty (50) miles from Executive’s current principal place of
      employment;

            


    

    


    
      	
               
      

            	
              D.

            	
              A
      material adverse alteration of Executive’s duties and
      responsibilities;

            


    

    


    
      	
               
      

            	
              E.

            	
              An
      intentional, material reduction by the Company of Executive’s aggregate
      target incentive awards under any short-term and/or long-term incentive
      plans; or

            


    

    


    
      	
               
      

            	
              F.

            	
              In
      connection with a Change of Control, the material failure of the Company
      to maintain Executive’s relative level of coverage under its material
      employee benefit, retirement, or fringe benefit plans, policies,
      practices, or arrangements in which Executive participates, both in terms
      of the amount of benefits provided and the relative level of Executive’s
      participation as in effect immediately before a Change of Control and with
      all improvements therein subsequent thereto (other than those plans or
      improvements that have expired thereafter in accordance with their
      original terms), or the taking of any action which would materially reduce
      Executive’s benefits under such plans or deprive her of any material
      fringe benefit enjoyed by her immediately before a Change of
      Control.  For this purpose, the Company may eliminate and/or
      modify existing employee benefit plans and
  coverage

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	
               
      

            	
              levels
      on a consistent and non-discriminatory basis applicable to all such
      executives; provided, however, that Executive’s level of coverage under
      all such programs must be at least as great as is such coverage provided
      to employees who have the same or lesser levels of reporting
      responsibilities within the
organization.

            


    

    


    
      	
               
      

            	
              e.

            	
              Code
      shall mean the Internal Revenue Code of 1986, as
  amended.

            


    

    


    
      	 	
              f.

            	
              Total
      Disability shall mean physical or mental impairments that preclude
      the Executive from performing the duties of the job as determined by
      medical experts and the Board of
Directors.

            


    

    


    
      	
              7.

            	
              Integration;
      Amendment.  This Agreement, the Company’s
      Confidentiality, Non-Solicitation and Covenant Not to Compete Agreement,
      and the Executive’s Individual Stock Agreement (if any) (a copy of which
      are attached to this 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 such agreements shall be
      binding unless in writing and signed by both parties, provided, however,
      that this Agreement may be unilaterally amended by the Company where
      necessary to ensure any benefits payable hereunder are either excepted
      from Code Section 409A or otherwise comply with Code Section
      409A.

            


    

    


    
      	
              8.

            	
              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.

            


    

    


    
      	
              9.

            	
              Jurisdiction.  Except
      as otherwise provided for herein, each of the parties: (a) irrevocably
      submits to the exclusive jurisdiction of any state court sitting in 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 9, however, shall affect the right of
      any party to serve legal process in any other manner permitted by
      law.

            


    

    


    


    
      	
               
      

            	
              [Signature
      page follows]

            


    

    


    


    


    


    


    


    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	
               
      

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

            


    

    


    


    EXECUTIVE

    


    


    By: __/s/ Nancy Lurker______________________________

    Nancy
Lurker

    


    


    PDI, INC.

    


    


    By: __/s/ Frank
Ryan________________________________

            Name:  Frank
Ryan

                         Title:  Director,
Chairman of the Compensation

           and
Management Development Committee