EX-10.3EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (this “Employment Agreement”), dated as of March 1, 2006 (the “Commencement Date”), by and between Chindex International, Inc., a Delaware corporation (the “Company” or “Chindex”), and Lawrence Pemble (“Employee”).

WHEREAS, the Company desires that Employee enter into this Employment Agreement, and Employee desires to enter into this Employment Agreement, on the terms and conditions set forth herein; and

(a) The Company agrees to employ Employee, and Employee agrees to be so employed, in the position of Executive Vice President (EVP) and Chief Financial Officer (CFO) of the Company, reporting to the Chief Executive Officer (CEO) of the Company. Employee agrees to perform such duties, functions and responsibilities as are generally incident to such position, for a period commencing on March 1, 2006 and ending on December 31, 2013, unless sooner terminated in accordance with Section 4 hereof (the “Term”). Employee agrees to faithfully perform the lawful duties assigned to Employee pursuant to this Employment Agreement to the best of Employee’s abilities. Employee shall be subject to all laws, rules, regulations and policies as are from time to time applicable to employees of the Company and, in the case of rules or policies adopted by the Company, communicated to Employee in writing.

(b) Notwithstanding the foregoing, Employee may (i) serve on civic or charitable boards or not-for-profit industry related organizations, (ii) engage in charitable, civic, educational, professional, community and/or industry activities without remuneration therefor and (ii) manage personal and family investments, so long as such activities do not interfere with performance of Employee’s duties under the Employment Agreement. Employee also may serve on the board of directors or advisory committee of other for-profit enterprises subject to the consent of the Board, which shall not unreasonably be withheld; provided, however, that Employee shall not serve on more than two such boards at the same time.

(c) Employee shall devote substantially all Employee’s working time, attention, best efforts and ability during regular business hours exclusively to the service of the Company, its affiliates and its subsidiaries during the term of this Agreement.

Section 2. Compensation.

(a)  Annual Salary . As compensation for Employee’s services hereunder, the Company shall pay to Employee an initial annual salary at the rate of One Hundred Ninety Five Thousand Dollars ($195,000) per annum, payable in accordance with the Company’s standard payroll policies, and less all applicable federal, state and local withholding taxes (the “Annual Salary”). The Annual Salary shall be reviewed by the Company each December during the Term, and shall be subject to such increases (but not decreases) as the Company may determine, taking into consideration the Company’s and Employee’s performance during the preceding year as well as increases in the cost of living and other factors.

(b)  Bonus . The Company shall also pay Employee annual bonus compensation (“Bonus Compensation”) based on the success of business operations and the pre-tax profits of the Company and upon the performance of the Employee in accordance with the Company’s Executive Management Incentive Program or other then-existing bonus program.

(c)  Long-term Equity Incentive Compensation . In addition to stock options previously granted pursuant to the terms of the Chindex International, Inc. 1994 Stock Option Plan or the Chindex International, Inc. 2004 Stock Incentive Plan (the “2004 Plan”) and option agreements thereunder (collectively, the “Option Agreements”), the Company shall also grant to Employee unrestricted or restricted stock and/or stock options under any new plans adopted by the Company and/or other equity incentive compensation in such form and having such terms as the Company may determine.

Section 3. Benefits; Expense Reimbursement.

During the Term, Employee shall participate in any group life, accident, sickness and hospitalization insurance, and any other employee benefit plans of the Company in effect during the Term and generally available to the Company’s senior executive officers. Without limiting the generality of the foregoing, during the Term, the Company will provide Employee at its expense with a life insurance policy with a death benefit equal to three (3) times Employee’s Annual Salary, the beneficiary to be named by Employee. Employee shall have the right to reimbursement, upon proper accounting, of reasonable expenses and disbursements incurred by Employee in the course of Employee’s duties hereunder. In addition, during each year of the Term, Employee shall be entitled to no less than five (5) weeks of paid vacation. If Employee is requested by the Company to move to China and agrees to do so, the Company shall thenceforth reimburse Employee for round-trip economy-class air fare for Employee, Employee’s spouse and Employee’s dependent children from Beijing to Employee’s home in the United States in connection with such vacation. In addition, in each year of the Term, Employee shall be reimbursed for the tuition costs paid by Employee for Employee’s dependent children, if any, attending primary or secondary schools, provided, however, that such reimbursement shall not exceed ninety thousand dollars ($90,000) per year. Employee shall be entitled to the use of a Company-owned automobile or an allowance to reimburse Employee for Employee’s costs associated with the use of a personal automobile. Employee shall also annually be provided an allowance of five thousand dollars ($5,000) per month in connection with Employee’s maintenance of a remote office facility in the United States.

Employee acknowledges that some or all of these benefits may be deemed compensation to Employee and that the Company may withhold from any benefits payable to Employee all federal, state, local and/or other taxes and amounts as shall be required pursuant to law, rule or regulation.

Section 4. Employment Termination.

(a) At any time during the Term, and except as otherwise provided in Section 4(b) hereof, the Company shall only have the right to terminate this Employment Agreement and Employee’s employment with the Company hereunder, upon written notice to Employee, in the event Employee engages in conduct which constitutes “Cause.” For purposes of this Employment Agreement, Cause shall mean (i) Employee’s willful misconduct in the performance of Employee’s obligations under this Employment Agreement or gross negligence in the performance of Employee’s obligations under this Employment Agreement, (ii) dishonesty or misappropriation by Employee relating to the Company or any of its funds, properties, or other assets, (iii) inexcusable repeated or prolonged absence from work by Employee (other than as a result of, or in connection with, a disability), (iv) any unauthorized disclosure by Employee of confidential or proprietary information of the Company which is reasonably likely to result in material harm to the Company, (v) a conviction of Employee (including entry of a guilty or nolo contendere plea) involving fraud, dishonesty, or moral turpitude, or involving a violation of federal or state securities laws, or (vi) the failure by Employee to attempt to perform faithfully Employee’s duties hereunder, or other material breach by Employee of this Employment Agreement, and such failure or breach is not cured, to the extent cure is possible, by Employee within thirty (30) days after written notice thereof from the Company to Employee; provided , however , that no event or condition described in clauses (i), (ii), (iii), (iv) and (vi) shall constitute Cause unless (x) the Company first gives Employee written notice of its intention to terminate Employee’s employment for Cause and the grounds for such termination no fewer than twenty (20) days prior to the date of termination; and (y) Employee is provided the opportunity to appear before the Board, with or without legal representation at Employee’s election to present arguments on Employee’s own behalf; provided further, however, that notwithstanding anything to the contrary in this Agreement and subject to the other terms of this proviso, the Company may take any and all actions, including without limitation suspension (but not without pay), it deems appropriate with respect to Employee and Employee’s duties at the Company pending such appearance. No act or failure to act on Employee’s part will be considered “willful” unless done, or omitted to be done, by Employee not in good faith and without reasonable belief that Employee’s action or omission was in the best interests of the Company. If this Employment Agreement and Employee’s employment with the Company hereunder is terminated for Cause, or if Employee voluntarily resigns (which Employee may do at any time) from the Company without Good Reason during the Term, the Company shall pay Employee a lump sum amount within thirty (30) days of such termination equal to the sum of (A) all earned but unpaid portions of the Annual Salary, (B) any earned but unpaid Bonus Compensation for a previously completed fiscal year of the Company, (C) reimbursement for any unreimbursed business expenses incurred by Employee prior to the date of termination or resignation (the “Termination Date”) subject to reimbursement pursuant to Section 3, (D) payment for any unused vacation days through the Termination Date, and (E) any other amounts or benefits (other than severance, termination or similar pay) required to be paid or provided by law or under any plan, program or policy of the Company ((A)-(E) collectively, the “Accrued Amounts”), and following any such termination, Employee shall not be entitled to receive any other compensation or benefits from the Company hereunder, including, without limitation, any portion of the Annual Bonus for the year in which Employee is terminated.

(b) This Employment Agreement and Employee’s employment with the Company hereunder may also be terminated by the Company without Cause, or by Employee upon the occurrence of an event constituting Good Reason. For purposes of this Employment Agreement, “Good Reason” shall mean (i) any reduction in Employee’s authority, functions, duties, or responsibilities; or (ii) any adverse change in Employee’s positions, titles or reporting responsibility (such that Employee reports to a person other than the CEO), provided , however , that the foregoing provision shall not include a change in Employee’s positions, titles or reporting responsibility following a Change in Control (as defined in the 2004 Plan) solely by virtue of the Company being acquired and made part of a larger entity (as, for example, if Employee is not appointed as Executive Vice President (EVP) and Chief Financial Officer (CFO) of the acquiring corporation, but continues to have a substantially similar level of responsibility over the affairs of the Company following such Change in Control); or (iii) the assignment of duties to Employee that are inconsistent with Employee’s position and status as EVP and CFO; or (iv) a reduction in the Annual Salary or Employee’s bonus opportunity during the Term; or (v) the failure of the Company to cure any other material breach of this Employment Agreement; or (vi) Employee’s relocation by the Company or a successor thereto without Employee’s written consent to a location other than Sadieville, Kentucky; 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 Employee. In the event that Employee’s employment with the Company shall terminate during the Term on account of termination by the Company without Cause, or by Employee with Good Reason, then the Company shall pay or provide to Employee, as Employee’s sole and exclusive remedy hereunder: (A) the Accrued Amounts, (B) a pro-rata (based on the number of days employed in the year of termination or resignation) bonus for the fiscal year in which such termination or resignation occurs based on the greater of (1) the average of the Bonus Compensation paid to Employee for the two years immediately preceding such termination or resignation, and (2) thirty percent (30%) of the Annual Salary of Employee as of the last day of the most recently completed fiscal year (a “Pro-Rated Bonus”), (C) (1) group or individual health, sickness and hospital insurance substantially similar to that which Employee was receiving immediately prior to the notice of termination, which obligation to provide insurance shall continue until Employee qualifies for Medicare, reaches age 65, dies, or notifies the Company that such benefit should cease, whichever occurs earliest, and (2) an annuity policy in an amount which will, at the time Employee qualifies for Medicare, provide Employee with a monthly payment that Employee can use to purchase supplemental health insurance, which annuity policy shall result in a monthly payment in an amount estimated to be the cost of standard supplemental insurance, but in no event to exceed five hundred ($500) per month (collectively, the “Termination Benefits”), (D) Three hundred percent (300%) of the sum of (1) the Annual Salary to which Employee would have been entitled if Employee had continued working for the Company for an additional twelve (12) month period following the Termination Date and (2) the bonus paid to Employee for the Company’s fiscal year immediately prior to the fiscal year in which the Termination Date occurs, (E) all unvested equity incentive awards, including without limitation all unvested stock options and all unvested stock grants, granted to Employee prior to the Termination Date, shall become immediately vested and exercisable and Employee shall have a period of ninety (90) days following the Date of Termination (or such longer exercise period as may be provided in the respective option grant, but in no event past the respective expiration term of the option grant) to exercise all options granted under any of the Company’s plans then exercisable or which become exercisable pursuant to this paragraph, and (F) tuition reimbursements and the office maintenance allowance received by Employee in the fiscal year immediately prior to the Termination Date, if any, shall be continued for a period of three years to the extent that Employee continues to be eligible for such benefits as provided in Section 3, above. The payments provided for in (A), (B) and (D) above (the “Termination Payments”) shall be made to Employee in a lump sum payment within thirty (30) days following such termination or resignation; provided that the payments provided for in (D) shall be contingent upon Employee’s continued compliance with Sections 5 and 6 hereof (except that Employee shall not be deemed for purposes of this Section 4(b) not to have been in compliance with Section 6 solely as a result of an unintentional disclosure of confidential information) and Employee shall be obligated to repay all such payments upon determination by the Board that Employee has failed to comply as such with Sections 5 or 6 hereof; and provided further that the benefits continuation provided for in (C) above shall terminate upon Employee’s becoming eligible for corresponding benefits in connection with new employment.

(c) In the event that Employee becomes entitled to one or more payments (with a “payment” including, without limitation, the vesting of an option or other non-cash benefit or property, whether pursuant to the terms of this Employment Agreement or any other plan, arrangement or agreement with the Company or any affiliated company) (the “Total Payments”), which are or become subject to the tax imposed by Section 4999 of the of the Internal Revenue Code of 1986 (the “Code”) (or any similar tax that may hereafter be imposed) (the “Excise Tax”), the Company shall pay to Employee at the time specified below an additional amount (the “Gross-up Payment”) (which shall include, without limitation, reimbursement for any penalties and interest that may accrue in respect of such Excise Tax) such that the net amount retained by Employee, after reduction for any Excise Tax (including any penalties or interest thereon) on the Total Payments and any federal, state and local income or employment tax and Excise Tax on the Gross-up Payment provided for by this section 4(c), but before reduction for any federal, state or local income or employment tax on the Total Payments, shall be equal to the sum of (a) the Total Payments, and (b) an amount equal to the product of any deductions disallowed for federal, state or local income tax purposes because of the inclusion of the Gross-up Payment in Employee’s adjusted gross income multiplied by the highest applicable marginal rate of federal, state or local income taxation, respectively, for the calendar year in which the Gross-up Payment is to be made.

(d) For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax pursuant to subsection (c) above,

(i) the Total Payments shall be treated as “parachute payments” within the meaning of Section 280G(b)(2) of the Code, and all “excess parachute payments” within the meaning of Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax, unless, and except to the extent that, in the written opinion of independent compensation consultants or auditors of nationally recognized standing selected by the Company and reasonably acceptable to Employee (“Independent Auditors”), the Total Payments (in whole or in part) do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code in excess of the base amount within the meaning of Section 280G(b)(3) of the Code or are otherwise not subject to the Excise Tax,

(ii) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of Section 280G(b)(1) of the Code (after applying clause (i) above), and

(iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Company’s Independent Auditors appointed pursuant to clause (i) above in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.

(e) For purposes of determining the amount of the Gross-up Payment, Employee shall be deemed (A) to pay federal income taxes at the highest marginal rate of federal income taxation for the calendar year in which the Gross-up Payment is to be made; (B) to pay any applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes if paid in such year (determined without regard to limitations on deductions based upon the amount of Employee’s adjusted gross income); and (C) to have otherwise allowable deductions for federal, state and local income tax purposes at least equal to those disallowed because of the inclusion of the Gross-up Payment in Employee’s adjusted gross income. In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time the Gross-up Payment is made, Employee shall repay to the Company at the time that the amount of such reduction in Excise Tax is finally determined (but, if previously paid to the taxing authorities, not prior to the time the amount of such reduction is refunded to Employee or otherwise realized as a benefit by Employee) the portion of the Gross-up Payment that would not have been paid if such Excise Tax had been applied in initially calculating the Gross-up Payment, plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time the Gross-up Payment is made (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-up Payment), the Company shall make an additional Gross-up Payment in respect of such excess (plus any interest and penalties payable with respect to such excess) at the time that the amount of such excess is finally determined. The Gross-up Payment provided for above shall be paid on the thirtieth day (or such earlier date as the Excise Tax becomes due and payable to the taxing authorities) after it has been determined that the Total Payments (or any portion thereof) are subject to the Excise Tax; provided , however , that if the amount of such Gross-up Payment or portion thereof cannot be finally determined on or before such day, the Company shall pay to Employee on such day an estimate, as determined by the Company’s