EXHIBIT 10.1
SUN HEALTHCARE GROUP, INC.
2012 CASH BONUS PLAN

1.
PURPOSE OF PLAN

The purpose of this Sun Healthcare Group, Inc. 2012 Cash Bonus Plan (this
“Plan”) of Sun Healthcare Group, Inc., a Delaware corporation (the
“Corporation”), is to promote the success of the Corporation and to increase
stockholder value by providing an additional means through the grant of cash
performance incentive bonuses to attract, motivate, retain and reward selected
executives and employees. This Plan is intended to provide cash incentive
bonuses that qualify for the performance-based compensation exemption of Section
162(m) (“Section 162(m)”) of the Internal Revenue Code of 1986, as amended (the
“Code”).
2.
ELIGIBILITY

The Administrator (as such term is defined in Section 3) may grant incentive
bonus awards under this Plan only to an officer (whether or not a director) or
key employee of the Corporation or one of its Subsidiaries (each, an “Eligible
Person”). An Eligible Person who has been granted an incentive bonus award under
this Plan is referred to as a “Participant”. As used herein, “Subsidiary” means
any corporation or other entity a majority of whose outstanding voting stock or
voting power is beneficially owned directly or indirectly by the Corporation.
3.
PLAN ADMINISTRATION

This Plan shall be administered by and all incentive bonus awards under this
Plan shall be granted by the Administrator. The “Administrator” means a
committee of the Board of Directors of the Corporation (the “Board”) consisting
solely of two or more outside directors, as this requirement is applied under
Section 162(m) of the Code. Subject to the express provisions of this Plan, the
Administrator is authorized and empowered to do all things necessary or
desirable in connection with the grant of incentive bonus awards and the
administration of this Plan. The Administrator's authority includes, without
limitation, the authority to: (1) determine the Eligible Persons and the
particular Eligible Persons who will be Participants; (2) grant incentive bonus
awards to Participants and determine the specific terms and conditions of such
awards consistent with the express provisions of this Plan; and (3) construe and
interpret this Plan and any agreements defining the rights and obligations of
the Corporation, its Subsidiaries, and Participants under this Plan, further
define the terms used in this Plan, and prescribe, amend and rescind rules and
regulations relating to the administration of this Plan or incentive bonus
awards granted under this Plan. Any action taken by, or inaction of, the
Corporation, any Subsidiary, or the Administrator relating or pursuant to this
Plan and within its authority hereunder or under applicable law shall be within
the absolute discretion of that entity or body and shall be conclusive and
binding upon all persons. Neither the Administrator nor any member thereof shall
be liable for any act, omission, interpretation, construction or determination
made in good faith in connection with this Plan, and all such persons shall be
entitled to indemnification and reimbursement by the Corporation in respect of
any claim, loss, damage or expense (including, without limitation, attorneys'
fees) arising or resulting therefrom to the fullest extent permitted by law
and/or under any directors and officers liability insurance coverage that may be
in effect from time to time.

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4.
INCENTIVE BONUS AWARDS

4.1    Awards. Incentive bonus awards may be granted under this Plan to those
Eligible Persons determined to be Participants by the Administrator. The
Administrator will determine the amount of each Participant's incentive bonus
award opportunity and the other terms and conditions of each Participant's
incentive bonus award.

4.2    Performance Period. Incentive bonus awards granted under this Plan will
become payable based on performance during a performance period designated by
the Administrator. The performance period will generally be the calendar year.
However, the Administrator may designate that the performance period will be any
period of time that is longer or shorter than one calendar year, provided that
the performance period may not be less than three months nor more than 10 years.

4.3    Performance Goals. For each performance period, the payment of any
incentive bonus awards granted under this Plan will depend on the degree of
achievement of one or more objective performance goals relative to a
pre-established targeted level or levels using one or more of the Business
Criteria set forth below (on an absolute basis or relative to the performance of
other companies or upon comparisons of any of the indicators of performance
relative to other companies) for the Corporation on a consolidated basis or for
one or more of the Corporation's Subsidiaries, segments, divisions or business
units, or any combination of the foregoing. Performance goals will be
established and approved by the Administrator during the first 90 days of the
performance period (and, in the case of performance periods of less than one
year, in no event after 25% or more of the performance period has elapsed) and
while performance relating to such goals remains substantially uncertain within
the meaning of Section 162(m) of the Code.

4.4    Business Criteria. The specific performance goals shall be, on an
absolute or relative basis, established based on one or more of the following
business criteria (“Business Criteria”) as selected by the Administrator in its
sole discretion: earnings per share; cash flow (which means cash and cash
equivalents derived from either net cash flow from operations or net cash flow
from operations, financing and investing activities); stock price; total
stockholder return; revenue; operating income (before or after taxes); net
earnings (before or after interest, taxes, depreciation and/or amortization);
return on equity or on assets or on net investment; cost containment or
reduction; net sales; market share; net operating profit; expense targets;
working capital targets relating to inventory and/or accounts receivable;
operating margin; planning accuracy (as measured by comparing planned results to
actual results); measurably improving quality of care outcomes at company
facilities; earnings before interest, taxes, depreciation, amortization
(EBITDA); normalized EBITDA; earnings before interest, taxes, depreciation,
amortization, and rents (EBITDAR); pre- or after-tax income (before or after
allocation of corporate overhead and bonus); appreciation in and/or maintenance
of the price of the Corporation's common stock or any other

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publicly-traded securities of the Corporation; gross profits; economic
value-added models or equivalent metrics; comparisons with various stock market
indices; cash flow per share (before or after dividends); return on capital
(including return on total capital or return on invested capital); return on
assets; cash flow return on investment; gross margins or cash margin; year-end
cash; debt reduction; stockholder equity; operating efficiencies; strategic
partnerships or transactions (including in-licensing and out-licensing of
intellectual property, establishing relationships with commercial entities with
respect to the marketing, distribution and sale of the Corporation's products
(including with group purchasing organizations, distributors and other vendors,
co-development, co-marketing, profit sharing, joint venture or other similar
arrangements); financial ratios, including those measuring liquidity, activity,
profitability or leverage; cost of capital or assets under management; financing
and other capital raising transactions (including sales of the Corporation's
equity or debt securities, factoring transactions, sales or licenses of the
Corporation's assets, including its intellectual property, whether in a
particular jurisdiction or territory or globally, or through partnering
transactions); implementation, completion or attainment of measurable objectives
with respect to research, development, manufacturing, commercialization,
products or projects, production volume levels, acquisitions and divestitures
and recruiting and maintaining personnel; or any combination thereof. Any
Business Criterion may also be stated as a “growth” measure (for example, and
without limitation, revenue growth instead of revenue on an absolute basis).
These terms are used, where applicable, as applied under generally accepted
accounting principles or in the financial reporting of the Corporation or of its
Subsidiaries.

4.5    Adjustments. At the time it grants any incentive bonus award under this
Plan, the Administrator may specify the manner, if any, in which performance
goals shall be adjusted to mitigate the unbudgeted impact of material, unusual
or nonrecurring gains and losses, discontinued operations, actuarial adjustments
for self insurance for general and professional liability, accounting changes or
other extraordinary events not foreseen at the time the goals were set.

4.6    Maximum Payment. The aggregate amount of compensation to be paid to any
one Participant in respect of incentive bonus awards granted under this Plan in
any one calendar year shall not exceed $3,000,000.

4.7    Continued Employment Required. Unless otherwise determined by the
Administrator (whether before or after the start of the applicable performance
period) or otherwise specifically provided in a Participant's employment or
severance agreement or any other plan or agreement covering the Participant, if
a Participant's employment is terminated for any reason prior to the end of the
applicable performance period, the Participant's rights to receive any payment
of the incentive bonus award shall immediately terminate, and the Participant
will no longer be eligible for any payment of the incentive bonus award.

    

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4.8
Reservation of Discretion. Notwithstanding the successful achievement of the
performance goals for any performance period, the Administrator will have the
discretion to reduce the amount of any incentive bonus award to any Participant
to any amount, including zero, in its sole discretion.

4.9
Certification of Payment. Before any incentive bonus award granted under this
Plan is paid, the Administrator must certify in writing that the performance
goal(s) and any other material terms of the incentive bonus award were in fact
timely satisfied.

4.10
Cash Payment. Any incentive bonus award granted under this Plan that becomes
payable shall be paid in cash no later than the 15th day of the third month
following the end of the performance period (e.g., if the performance period is
the calendar year, any bonus amount that becomes payable will be paid prior to
March 15 of the calendar year following the calendar year to which the bonus
relates).

5.CHANGE IN CONTROL

The Administrator shall have the discretion to determine the effects, if any,
that a change in control event or similar extraordinary corporate transaction
will have on outstanding incentive bonus awards granted under this Plan.
6.
DEFERRALS

The Administrator may require or permit Participants to elect to defer the
payment of incentive bonus awards granted under this Plan under such rules and
procedures as it may establish under this Plan. The Administrator may also
provide that deferred payments include the payment or crediting of interest or
other earnings on the deferral amounts, or the payment or crediting of dividend
equivalents where the deferred amounts are denominated in shares.
7.
RECOUPMENT

This Plan and all incentive bonus awards granted under this Plan are subject to
the terms of the Corporation's recoupment, clawback or similar policy as it may
be in effect from time to time, as well as any similar provisions of applicable
law, any of which could in certain circumstances require repayment or forfeiture
of any incentive bonus award under this Plan.
8.
OTHER PROVISIONS

8.1
Limitations on Transfer. Incentive bonus awards granted under this Plan are
non-transferable and shall not be subject in any manner to sale, transfer,
anticipation, alienation, assignment, pledge, encumbrance or charge, and during
the lifetime of the Participant awards shall only be paid to the Participant.

8.2
Compliance with Laws. This Plan and the granting and payment of incentive bonus
awards under this Plan are subject to compliance with all applicable federal and
state laws, rules and regulations and to such approvals by any listing,

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regulatory or governmental authority as may, in the opinion of counsel for the
Corporation, be necessary or advisable in connection therewith.

8.3
No Rights to Award. No person shall have any claim or rights to be granted an
incentive bonus award (or additional awards, as the case may be) under this
Plan, subject to any express contractual rights (set forth in a document other
than this Plan) to the contrary.

8.4
No Employment Contract. Nothing contained in this Plan (or in any other
documents under this Plan or in any incentive bonus award) shall confer upon any
Eligible Person any right to continue in the employ of the Corporation or one of
its Subsidiaries, constitute any contract or agreement of employment or affect
an employee's status as an employee at will, nor shall interfere in any way with
the right of the Corporation or one of its Subsidiaries to change a person's
compensation or other benefits, or to terminate his or her employment, with or
without cause. Nothing in this Section 8.4, however, is intended to adversely
affect any express independent right of such person under a separate employment
contract.

8.5
Plan Not Funded. Incentive bonus awards payable under this Plan shall be payable
from the general assets of the Corporation, and no special or separate reserve,
fund or deposit shall be made to assure payment of such awards. No Participant,
beneficiary or other person shall have any right, title or interest in any fund
or in any specific asset of the Corporation or one of its Subsidiaries by reason
of any incentive bonus award hereunder. Neither the provisions of this Plan (or
of any related documents), nor the creation or adoption of this Plan, nor any
action taken pursuant to the provisions of this Plan shall create, or be
construed to create, a trust of any kind or a fiduciary relationship between the
Corporation or one of its Subsidiaries and any Participant, beneficiary or other
person. To the extent that a Participant, beneficiary or other person acquires a
right to receive payment pursuant to any incentive bonus award hereunder, such
right shall be no greater than the right of any unsecured general creditor of
the Corporation.

8.6
Tax Withholding. Upon any payment of an incentive bonus award, the Corporation
or one of its Subsidiaries shall have the right at its option to: (a) require
the Participant (or the Participant's personal representative or beneficiary, as
the case may be) to pay or provide for payment of at least the minimum amount of
any taxes which the Corporation or one of its Subsidiaries may be required to
withhold with respect to such payment; or (b) deduct from the amount otherwise
payable in cash to the Participant (or the Participant's personal representative
or beneficiary, as the case may be) the minimum amount of any taxes which the
Corporation or one of its Subsidiaries may be required to withhold with respect
to such cash payment.

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8.7
Effective Date, Termination and Suspension, Amendments.

8.7.1
Effective Date. This Plan is effective as of January 1, 2012 (the “Effective
Date”). This Plan shall be submitted for and subject to stockholder approval at
the 2012 annual meeting of the Corporation's stockholders. If the Corporation's
stockholders fail to approve this Plan, this Plan shall not become effective and
no incentive bonus awards will be paid under this Plan.

8.7.2
Termination. Unless earlier terminated by the Board, this Plan shall terminate
upon the first meeting of the Corporation's stockholders that occurs in the 2017
calendar year, subject to any subsequent extension that may be approved by
stockholders. After the termination of this Plan either upon such stated
expiration date or its earlier termination by the Board, no additional incentive
bonus awards may be granted under this Plan, but previously granted incentive
bonus awards shall remain outstanding in accordance with their applicable terms
and conditions and the terms and conditions of this Plan.

8.7.3
Board Authorization. The Board may, at any time, terminate or, from time to
time, amend, modify or suspend this Plan, in whole or in part. No incentive
bonus awards may be granted during any period that the Board suspends this Plan.

8.7.4
Stockholder Approval. To the extent then required by applicable law or any
applicable listing agency or required under Section 162(m) of the Code to
preserve the intended tax consequences of this Plan, or deemed necessary or
advisable by the Board, any amendment to this Plan shall be subject to
stockholder approval.

8.8    Governing Law; Construction; Severability.

8.8.1
Choice of Law. This Plan, the incentive bonus awards, all documents evidencing
the awards and all other related documents shall be governed by, and construed
in accordance with the laws of the State of Delaware.

8.8.2
Severability. If a court of competent jurisdiction holds any provision invalid
and unenforceable, the remaining provisions of this Plan shall continue in
effect.

8.8.3
Plan Construction. This Plan is intended to provide incentive bonus awards that
qualify for the performance-based compensation exemption of Section 162(m) of
the Code. Any provision, application or interpretation of this Plan inconsistent
with this intent to satisfy the standards in Section 162(m) of the Code shall be
disregarded. This Plan is intended to provide incentive bonus awards that are
exempt from (i.e., not a deferral of compensation within the meaning of) Section
409A of the Code as short-term deferrals. Any provision, application or
interpretation of this Plan

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inconsistent with this intent with respect to Section 409A of the Code shall be
disregarded.

8.9
Captions. Captions and headings are given to the sections and subsections of
this Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of this Plan or any provision thereof.

8.10
Non-Exclusivity of Plan. Nothing in this Plan shall limit or be deemed to limit
the authority of the Board or the Administrator to grant awards or authorize any
other compensation under any other plan or authority.

8.11
Other Company Benefit and Compensation Programs. Payments received by a
Participant under an incentive bonus award made pursuant to this Plan shall not
be deemed a part of a Participant's compensation for purposes of the
determination of benefits under any other employee welfare or benefit plans or
arrangements, if any, provided by the Corporation or any Subsidiary, except
where the Administrator expressly otherwise provides or authorizes in writing.

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