exv10w8






Exhibit 10.8




FORM OF EMIP EMPLOYEE STOCK OPTION GRANT LETTER




[DATE]




EMPLOYEE NAME 

EMPLOYEE ADDRESS 



Dear EMPLOYEE NAME:




     This letter sets forth the terms and conditions of the stock option granted to you by Chindex
International, Inc. (the “Company”) on ______ pursuant to its Executive Management Incentive
Program (“EMIP”) for the fiscal year ending March 31, ____. This stock option is granted under the
Company’s 2007 Stock Incentive Plan (the “Plan”). You have been granted an option (the “Option”)
to purchase ____ shares of the Company’s Common Stock (“Common Stock”) subject to the attainment of
the performance goals set forth in the EMIP, as described below. The Option is not
intended to be an incentive stock option within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the “Code”).



     The Option is subject to the terms and conditions set forth in the Plan, any rules and
regulations adopted by the Committee (as defined in the Plan), and this letter. Any terms used in
this letter and not defined have the meanings set forth in the Plan.



     In the event of any conflict between the terms of this grant letter and your employment
agreement with the Company or one of its subsidiaries (your “Employment Agreement”), the terms of
this grant letter will control.



1. Option Exercise Price




     The price at which you may purchase the shares of Common Stock covered by the Option (the
“exercise price”) is $____ per share which is the closing price of the Common Stock on the NASDAQ
Capital Market on the date of grant of your Option.



2. Term of Option




     Your Option expires in all events on _______. However, your Option may terminate prior to such
expiration date as provided in Sections 6 and 7 of this letter upon the occurrence of one of the
events described in those Sections. Regardless of the provisions of Sections 6 and 7, in no event
can your Option be exercised after the expiration date set forth in this Section 2.



3. Exercisability of Option




     (a) Except as provided in Sections 6 and 7, in order for your Option to become exercisable,
you must satisfy both the performance-based vesting condition set forth in Section 3(b) and the
employment condition set forth in Section 3(c).









 



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     (b) Performance-Based Vesting Condition.



          The extent to which your Option will vest (i.e., the maximum number of shares of Common Stock
as to which your Option will become exercisable) will depend on the level of achievement of the
applicable performance measure(s) for the fiscal year as a percentage of the Target amount, as set
forth below. For this Option, the performance measure is ______ and the Target amount is _____.
The extent to which your Option will vest is as follows:




	 	 	 
	 	 	Maximum Number of
	[Performance] Achieved as a %	 	Shares as to Which
	of Target	 	Option is Exercisable
	99% or less
	 	 
	100% to 110%
	 	 
	111% and above
	 	 





Any portion of your Option that does not vest under this Section 3(b) shall be forfeited upon the
Committee’s determination of the extent to which the performance criteria for the fiscal year have
been satisfied.




     (c) Employment Condition. To the extent your Option has vested by reason of satisfaction of
the Performance Condition in Section 3(b), it will become exercisable in installments as follows,
provided that you are an employee of the Company or one of its Subsidiaries on each such date:



	 	 	 
	 	 	Cumulative Percentage
	 	 	of Shares Vested under
	 	 	Section 3(b) as to Which 
	Period Beginning	 	Option is Exercisable
	 
	 	 
	 
	 	 
	 
	 	 






     (d) To the extent your Option has both vested and become exercisable, you may exercise the
Option in whole or in part at any time on or before the date the Option expires or terminates. You
may only exercise your Option with respect to a whole number of shares.



4. Exercise of Option




     You may exercise your Option by giving written notice to the Company of the number of shares
of Common Stock you desire to purchase and paying the exercise price for such shares. The notice
must be in the form provided by the Company from time to time (the “Option Exercise Form”), which
may be obtained from the Company’s Secretary. The notice must be hand delivered or mailed to the
Company at the address of its principal executive offices, Attention: Secretary, or may be provided
electronically to the extent and in the manner provided under procedures adopted by the Company.
Payment of the option price may be made in any manner provided in Section 5. The cash, Common
Stock or documentation described in the









 



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applicable provision of Section 5 must accompany the Option Exercise Form. Your Option will
be deemed exercised on the date the Option Exercise Form (and payment of the exercise price) is
hand delivered, received by electronic transmission (if permitted) or, if mailed, postmarked.



5. Satisfaction of Option Price




     (a) Payment of Cash. Your Option may be exercised by payment of the option price in cash
(including check, bank draft, money order, or wire transfer to the order of the Company).



     (b) Payment of Common Stock. You may satisfy the option price by tendering shares of Common
Stock that you own. For this purpose, the shares of Common Stock so tendered shall be valued at
the closing sales price of the Common Stock on the Nasdaq Capital Market (or such other exchange or
market determined by the Committee to be the primary market for the Common Stock) for the day
before the date of exercise or, if no such sale of Common Stock occurs on such date, the closing
sales price on the nearest trading date before such date. The certificate(s) evidencing shares
tendered in payment of the option price must be duly endorsed or accompanied by appropriate stock
powers. Only stock certificates issued solely in your name may be tendered to exercise your
Option. Fractional shares may not be tendered; any portion of the option exercise price that is in
excess of the aggregate value (as determined under this Section 5(b)) of the number of whole shares
tendered must be paid in cash. If a certificate tendered in exercise of the Option evidences more
shares than are needed to pay the exercise price, an appropriate replacement certificate will be
issued to you for the number of excess shares.



     (c) Broker-Assisted Cashless Exercise. You may satisfy the option exercise price by
delivering to the Company a copy of irrevocable instructions to a broker acceptable to the Company
to sell shares of Common Stock (or a sufficient portion of such shares) acquired upon exercise of
the Option and remit to the Company a sufficient portion of the sale proceeds to pay the total
exercise price and withholding tax obligation resulting from such exercise. The broker must agree
to deposit the entire sale proceeds into a Company-owned account pending delivery to the Company of
the exercise price and tax withholding amount. Shares issued under this method of exercise will be
issued to the designated brokerage firm for your account. The ability to use this method of
exercise is subject to the Company’s approval of the broker and of the specific mechanics of
exercise.



     (d) Net Share Exercise. You may satisfy the option exercise price by delivering to the
Company an Option Exercise Form that directs the Company to withhold a sufficient number of the
shares acquired upon exercise to satisfy the aggregate option price and tax withholding obligation
with respect to the shares as to which the Option is being exercised. For purposes of this
provision, the shares of Common Stock applied to satisfy the option price and withholding
obligation shall be valued in the same manner as provided under Section 5(b).



6. Termination of Employment




     (a) General. The following special rules apply to your Option in the event of your death,
disability, retirement, or other termination of employment. Notwithstanding any provision









 



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of this Section 6, in no event can your Option be exercised after the expiration date set
forth in Section 2.




     (i) Termination of Employment for Cause. If the Company or a Subsidiary terminates
your employment for Cause, your Option will terminate on the date of such termination of
employment. For this purpose, “Cause” means (A) your willful failure to perform the duties
of your employment, (B) your intentional engagement in dishonest conduct in connection with
the performance of services, (C) your conviction of a felony, or (D) any other event or
condition that constitutes “cause” under your Employment Agreement.




     (ii) Voluntary Termination of Employment. If you voluntarily terminate your employment
with the Company or a Subsidiary other than upon Retirement (as defined below), your Option
will terminate 90 days after such termination of employment. Following the termination of
your employment, no additional portions of your Option will become exercisable, and your
Option will be exercisable only with respect to the number of shares which you were entitled
to purchase on the date of the termination of your employment.




     (iii) Termination Without Cause or for Good Reason; Sale of Subsidiary or Division. If
the Company or a Subsidiary terminates your employment without Cause or you terminate your
employment for Good Reason (as such term is defined in Appendix A to this letter) or if the
Subsidiary or division in which you are employed is sold by the Company, (A) if such
termination or sale occurs before the Committee’s determination of the extent of
satisfaction of the performance-based vesting condition for the fiscal year ending March 31,
___, your Option shall vest and become immediately exercisable at the time of such Committee
determination to the extent provided in Section 3(b) based on the achievement of the
performance goals for such fiscal year, but further pro-rated based on the number of days
you were employed in such fiscal year (prior to such termination or sale), and your Option
shall terminate six months after the date of such Committee determination; and (B) if such
termination or sale occurs after the Committee’s determination of the extent of satisfaction
of the performance-based vesting condition for the fiscal year ending March 31, ___, the
portion of your Option which has vested under Section 3(b) will become immediately vested
and exercisable upon such termination or sale and shall terminate six months after such
termination or sale; provided, however, that the vesting and exercisability
under either clause (A) or (B) shall be subject to your having signed and delivered to the
Company no later than 45 days after such termination or sale, and not revoked within any
applicable revocation period, a written general release in the form provided by the Company.




     (iv) Death or Disability.




     [Alternative 1: For Lipson, Silverberg & Pemble]




     If your employment terminates by reason of death or if the Company or a Subsidiary
terminates your employment on account of Disability, the following rules shall apply. (A)
If such termination occurs before March 31, ___, your Option shall not









 



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vest or become exercisable to any extent, and instead you will be entitled to receive
the pro-rated bonus provided for under your Employment Agreement. (B) If such termination
occurs on or after March 31, ___ but before the Committee’s determination of the extent of
satisfaction of the performance-based vesting condition for the fiscal year ending March 31, ___,
your Option shall vest and become immediately exercisable at the time of such Committee
determination to the extent provided in Section 3(b) based on the achievement of the
performance goals for such fiscal year; provided, however that such vesting
and exercisability shall be subject to your or your legal representatives having signed and
delivered to the Company no later than 45 days after your termination of employment, and not
revoked within any applicable revocation period, a written general release in the form
provided by the Company. (C) If such termination occurs after the Committee’s determination
of the extent of satisfaction of the performance-based vesting condition for the fiscal year
ending March 31, ___, the portion of your Option which has vested under Section 3(b) will
become immediately exercisable. In either of the last two of these cases, your Option will
terminate two years following your termination of employment. For purposes of this
provision, “Disability” means physical or mental incapacity of a nature which prevents you,
in the good faith judgment of the Company’s Board of Directors, from performing your duties
to the Company and its Subsidiaries for a period of 180 consecutive days or 270 days during
any year (with each “year” for this purpose commencing on March 1).




     [Alternative 2: for all others]




     If your employment terminates by reason of death or if the Company or a Subsidiary
terminates your employment on account of Disability, the following rules shall apply. (A)
If such termination occurs before the Committee’s determination of the extent of
satisfaction of the performance-based vesting condition for the fiscal year ending March 31,
___, your Option shall vest and become immediately exercisable at the time of such Committee
determination to the extent provided in Section 3(b) based on the achievement of the
performance goals for such fiscal year, but further pro-rated based on the number of days
you were employed in such fiscal year prior to your death or Disability; provided,
however that such vesting and exercisability shall be subject to your or your legal
representatives having signed and delivered to the Company no later than 45 days after your
termination of employment, and not revoked within any applicable revocation period, a
written general release in the form provided by the Company. (B) If such termination occurs
after the Committee’s determination of the extent of satisfaction of the performance-based
vesting condition for the fiscal year ending March 31, ___, the portion of your Option
which has vested under Section 3(b) will become immediately exercisable. In either case,
your Option will terminate two years following your termination of employment. For purposes
of this provision, “Disability” means physical or mental incapacity of a nature which
prevents you, in the good faith judgment of the Company’s Board of Directors, from
performing your duties to the Company and its Subsidiaries for a period of 180 consecutive
days or 270 days during any year (with each “year” for this purpose commencing on March 1).




     (v) Retirement. Upon your Retirement from the Company, (A) if such Retirement occurs
before the Committee’s determination of the extent of satisfaction of









 



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the performance-based vesting condition for the fiscal year ending March 31,     , your
Option shall not vest or become exercisable; and (B) if such Retirement occurs after the
Committee’s determination of the extent of satisfaction of the performance-based vesting
condition for the fiscal year ending March 31,     , the portion of your Option which has
vested under Section 3(b) will become immediately exercisable in full. If you are not
serving as a director of the Company at the time of your Retirement, your Option will
terminate two years after your Retirement. If you are serving as a director of the Company
at the time of your Retirement, your Option will terminate two years after the termination
of your service as a director. For purposes of this provision, “Retirement” means
termination of your employment with the Company and its Subsidiaries after you have attained
age 60 and ten years of continuous employment with the Company and/or its Subsidiaries.



     (b) Acceleration and Adjustments of Exercise Period. The Committee may, in its discretion,
exercised before or after your termination of employment, declare all or any portion of your Option
immediately exercisable and/or permit all or any part of your Option to remain exercisable for such
period designated by it after the time when the Option would have otherwise terminated as provided
in the applicable portion of Section 6(a), but not beyond the expiration date of your Option as set
forth in Section 2 above.



     (c) Committee Determinations. The Committee shall have absolute discretion to determine the
date and circumstances of termination of your employment, and its determination shall be final,
conclusive and binding upon you.



7. Change of Control




     Notwithstanding the provisions of Section 3, upon the occurrence of a Change of Control, if
you are an employee or a director of the Company or one of its Subsidiaries at such time, your
Option, will become immediately exercisable in full. Notwithstanding the provisions of Section
6(a) (other than paragraph (i) thereof), your Option will terminate no sooner than one year after
any termination of your employment following a Change of Control (or on the expiration date set
forth in Section 2, if sooner).



8. Tax Withholding




     You must make arrangements satisfactory to the Company to satisfy any applicable federal,
state, local or other withholding tax liability. If you exercise your Option by payment of cash or
Common Stock, you may satisfy your withholding obligation either by making a cash payment to the
Company of the required amount or by having the Company retain from the Common Stock otherwise
deliverable to you upon exercise of your Option shares of Common Stock having a value equal to the
minimum amount of any required tax withholding with respect to the exercise. If you exercise your
Option using the broker-assisted cashless option exercise method, the minimum required tax
withholding will be retained by the Company from the proceeds of the sale of your shares. If you
exercise your Option using the net share exercise method, the minimum required tax withholding will
be retained by the Company from the shares acquired upon exercise. If you fail to satisfy your
withholding obligation in a time and manner









 



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satisfactory to the Company, the Company or a Subsidiary shall have the right to withhold the
required amount from your salary or other amounts payable to you.



     Any election to have shares withheld must be made on or before the date you exercise your
Option. A copy of the withholding election form may be obtained from the Company’s Secretary. The
election form does not apply to exercises under the cashless option exercise method or the net
share exercise method. The manner of withholding described in the preceding paragraph is mandatory
if you are using one of these methods of exercise.



     The amount of withholding tax retained by the Company or paid by you to the Company will be
paid to the appropriate tax authorities in satisfaction of the withholding obligations under the
tax laws. The total amount of income you recognize by reason of exercise of the Option will be
reported to the tax authorities in the year in which you recognize income with respect to the
exercise. Whether you owe additional tax will depend on your overall taxable income for the
applicable year and the total tax remitted for that year through withholding or by estimated
payments.



9. Administration of the Plan




     The Plan is administered by the Committee. The Committee has authority to interpret the Plan,
to adopt rules for administering the Plan, to decide all questions of fact arising under the Plan,
and generally to make all other determinations necessary or advisable for administration of the
Plan. All decisions and acts of the Committee are final and binding on all affected Plan
participants.



10. Non-transferability of Option




     The Option granted to you by this letter may be exercised only by you, and may not be
assigned, pledged, or otherwise transferred by you, with the exception that in the event of your
death the Option may be exercised (at any time prior to its expiration or termination as provided
in Section 2 and 6) by the executor or administrator of your estate or by a person who acquired the
right to exercise your Option by bequest or inheritance or by reason of your death.



11. Amendment and Adjustments to your Option




     The Plan authorizes the Board or the Committee to make amendments and adjustments to
outstanding awards, including the Option granted by this letter, in specified circumstances.
Details are provided in the Plan.



12. Effect on Other Benefits




     Income recognized by you as a result of exercise of the Option will not be included in the
formula for calculating benefits under the Company’s other benefit plans.



13. Regulatory Compliance




     Under the Plan, the Company is not required to deliver Common Stock upon exercise of your
Option if such delivery would violate any applicable law or regulation or stock exchange









 



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requirement. If required by any securities law or regulation, the Company may impose
restrictions on your ability to transfer shares received under the Plan.



14. Data Privacy




     By accepting this Option you expressly consent to the collection, use and transfer, in
electronic or other form, of your personal data by and among the Company, its Subsidiaries and any
broker or third party assisting the Company in administering the Plan or providing recordkeeping
services for the Plan, for the purpose of implementing, administering and managing your
participation in the Plan. By accepting this Option you waive any data privacy rights you may have
with respect to such information. You may revoke the consent and waiver described in this Section
by written notice to the Company’s Secretary; however any such revocation may adversely affect your
ability to participate in the Plan and to exercise any stock options previously granted to you by
the Company.



15. Consent to Jurisdiction




     Your Option and the Plan are governed by the laws of the State of Delaware without regard to
any conflict of law rules. Any dispute arising out of this Option or the Plan may be resolved only
in a state or federal court located within New York County, New York State, U.S.A. This Option is
issued on the condition that you accept such venue and submit to the personal jurisdiction of any
such court.



* * * * *




     If you have any questions regarding your Option or would like to obtain additional information
about the Plan or its administration, please contact the Company’s Secretary, at the Company’s
principal executive offices.



     This letter contains the formal terms and conditions of your award and accordingly should be
retained in your files for future reference.



	 	 	 	 	 
	 	Very truly yours,

 	 
	 	
 	 
	 	Lawrence Pemble 	 
	 	Executive Vice President of Operations 	 









 



 

	 	 	 	 	 




Appendix A — Definitions




Definition of “Good Reason”





     For purposes of this grant letter, “Good Reason” means (i) any reduction in your authority,
functions, duties, or responsibilities; (ii) any adverse change in your positions, titles or
reporting responsibility (as set forth in your Employment Agreement); (iii) the assignment of
duties to you that are inconsistent with your position and status as defined in your Employment
Agreement; provided, however, that the provisions in clauses (i), (ii) and (iii) of
this paragraph shall not include a change in your authority, functions, duties, responsibilities,
positions, titles or reporting responsibility following a Change in Control (as defined in the
Company’s 2007 Stock Incentive Plan) solely by virtue of the Company being acquired and made part
of a larger entity (as, for example, if you are not appointed to a position having your current
title with the acquiring corporation, but continue to have a substantially similar level of
responsibility over the affairs of the Company following such Change in Control); (iv) a reduction
in your annual salary during the term of your Employment Agreement or a material reduction in your
bonus opportunity during the term of your Employment Agreement; (v) any other material breach of
your Employment Agreement by the Company; or (vi) your relocation by the Company or a successor
thereto without your written consent to a location other than the city in which you are currently
employed; provided that in the case of (i) through (v) above, the Company has
failed to cure the event constituting Good Reason within thirty (30) days following written notice
thereof from you.