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 3 rd 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 15 th 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.
Compensation
Committee Chair
Enc.:
PDI Confidentiality
Agreement
|
|
|
|
|
|
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.
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
