Document:

Exhibit10.4

Exhibit 10.4

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

This RESTRICTED STOCK UNIT INDUCEMENT AGREEMENT (this “Agreement") is made and entered into as of October 20, 2014(the “Grant Date”), by and between PDI, Inc. (the “Company”) and Graham Miao(the “Participant”).  

WHEREAS, to induce the Participant to join the Company and to align the Participant’s financial interests with those of the Company’s stockholders, the Board has approved this grant of restricted stock units, subject to the restrictions and on the terms and conditions contained in this Agreement; and

WHEREAS, this grant is intended to constitute a non-plan based “inducement grant,” as described in the NASDAQ Listing Rule 5635(c)(4).

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

1.Grant of Restricted Stock Units.  The Participant is hereby granted 41,899 restricted stock units (the “Restricted Stock Units”), subject to all of the terms and conditions of this Agreement.  The Company maintains the PDI, Inc. 2004 Stock Award and Incentive Plan (the “Plan”).  This award is not awarded pursuant to the Plan, but rather is intended to constitute a non-plan based “inducement grant.”  Nonetheless, the terms and provisions of the Plan are hereby incorporated into this Agreement by this reference, as though fully set forth herein, as if this award was granted pursuant to the Plan.  Unless the context herein otherwise requires, the terms defined in the Plan shall have the same meanings herein.No Dividend Equivalents shall be paid to the Participant with respect to the Restricted Stock Units.

2.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 2.  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 2, all of the Restricted Stock Units that have not otherwise vested in accordance with the foregoing provisions of this Section 2 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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	(b)
	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, provided that the Participant remains continuously employed by the Company through the date of such Change in Control.

		
	(c)
	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. 
3.Settlement.  Restricted Stock Units that have become vested in accordance with Section 2shall 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 2(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.  

4.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.

5.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.

6.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.

7.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, 

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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 16, 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.

14.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.

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.

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 

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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.

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

PDI, INC.                        PARTICIPANT

        
___________________________            ___________________________
Jennifer Leonard                    Graham Miao
SVP, HR& IT

5Exhibit10.5

Exhibit 10.5

FORM OF
PDI, INC.
STOCK APPRECIATION RIGHTS  (“SARs”) 
INDUCEMENT AGREEMENT FOR
Graham Miao
October 20, 2014

This Stock Appreciation Rights (“SAR”) Inducement Agreement (the "Agreement") is made as of October 20, 2014 (the "Date of Grant") between PDI, Inc., a New Jersey corporation, (the "Company"), and Graham Miao (the "Recipient"), an employee of the Company.  
In order to induce the Recipient to join the Company and to align the Recipient’s financial interests with those of the Company’s stockholders, the Board has approved this SAR award, subject to the restrictions and on the terms and conditions contained in this Agreement.  This grant is intended to constitute a non-plan based “inducement grant,” as described in the NASDAQ Listing Rule 5635(c)(4).
The Company maintains the PDI, Inc. 2004 Stock Award and Incentive Plan (the “Plan”).  This award is not awarded pursuant to the Plan, but rather is intended to constitute a non-plan based “inducement grant.”  Nonetheless, the terms and provisions of the Plan are hereby incorporated into this Agreement by this reference, as though fully set forth herein, as if this award was granted pursuant to the Plan.  Unless the context herein otherwise requires, the terms defined in the Plan shall have the same meanings herein.
Section 1. Stock Appreciation Rights Award. The Company grants to the Recipient, on the terms and conditions hereinafter set forth, the right to receive the Appreciation in Value of 117,187 shares of the Company's Common Stock (the "SAR Shares").  For purposes of this Agreement, “Appreciation in Value” shall mean the difference between the Fair Market Value of each SAR share as of the Date of Grant ($1.79) and the Fair Market Value of each SAR share on the date the Recipient exercises such SAR.  
 Section 2. Vesting of SARs. Subject to Sections 4 and 5 hereof, the SARs shall vest in three (3) equal annual installments commencing as of the Date of Grant in accordance with the vesting schedule below.
	
		
	Vesting Date
	Number of SARs

	October 20, 2015
	39,062

	October 20, 2016
	39,062

	October 20, 2017
	39,063

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 during the SAR Term.  For purposes of this Agreement, the SAR Term expires on the date which is five (5) years after the Date of Grant, or October 20, 2019.  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.  Subject to the provisions of Section 5 hereof, you may inform the Company of your intention to exercise any portion (or all) of your 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.  

Upon exercise, you will receive the Appreciation in Value in your exercised SAR Shares, determined as of the Exercise Date, in the appropriate number of unrestricted shares of Company common stock, subject to all applicable federal and state income tax and other appropriate deductions. You are 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 common stock shares payable as a result of your SAR exercise until such amounts are paid.  Nothing in this Agreement shall permit a participant to receive payment in any form other than shares of Company common stock, including cash.  Subject to the above provisions, the Company common stock shares payable upon the exercise of SAR Shares shall be paid as soon as practicable following the exercise date; provided, however, that the Company may delay the issuance of such common stock 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 prior to any applicable vesting date as provided in Section 2 hereof for any reason, the Recipient shall: (i) immediately forfeit his 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 have previously become vested until the expiration of thirty (30) days after the effective date of such termination of service; provided, however, that in the event such termination of service is as a result of the Recipient’s Retirement or total and permanent disability (in accordance with the provisions of the Plan), the period during which an Recipient may exercise his or her vested SARs shall continue until the expiration of ninety (90) days after the date of employment termination.  If the participant’s employment terminates as a result of his or her death, (or if the participant should die after terminating his or her employment but prior to the expiration of the above referenced thirty (30) or ninety (90) day exercise period, as appropriate) the representative of the participant’s estate shall have one (1) year from the employment termination date to exercise the participant’s vested SARs. 
Section 6.  No Rights as Stockholder or Employee.
(a) The Recipient shall not have any rights and privileges of a stockholder of the Company with respect to any SARs, nor shall the Company have any obligation to issue any dividends or otherwise afford any rights to which shares of Common Stock are entitled with respect to any such SARs.
(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 of Common Stock is changed by reason of any events described in the Plan, the number of SAR Shares 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 Company or its duly authorized designee.
Section 8. Restriction on Transfer of SAR Shares. No SAR Shares (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 in the Plan. In the event a Recipient becomes legally incapacitated and terminates his or her employment, his 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 SAR Shares (or rights to exercise same) contrary to the provisions hereof, or the levy of any execution, attachment or similar process upon such SAR Shares, 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 Morris Corporate Center 1, Building A, 300 Interpace Parkway, Parsippany, NJ 07054, 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 New Jersey, without giving effect to the choice of law principles thereof.
Grant Date: October 20, 2014            PDI, Inc.
By:                
Name:    _____Jennifer Leonard            

RECIPIENT

Signature:                

Print Name:    Graham Miao

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