ex1032.htm


    Exhibit
10.3.2

    


    Stock
Unit Grant

    


    Sun
Healthcare Group, Inc.

    2004
Equity Incentive Plan

    


    


    
      
        
          
            
              
                
                  	
                          Name
      of Grantee:

                        	
                          [______]

                        
	 
      	 
      
	
                          Number
      of Stock Units:

                        	
                          [______]

                        
	 
      	 
      
	
                          Date
      of Grant:

                        	
                          [______]

                        
	
                          Vesting:

                        	
                          The
      units shall become vested as follows if you are employed by Sun Healthcare
      Group, Inc. or its subsidiaries on the applicable vesting
      date:  (i) 25% of the units shall vest on each of the following
      anniversaries of the Date of Grant: 13 months, 24 months, 36 months, and
      48 months, subject in each case to the Terms; and (ii) the units shall
      become vested in full upon the date of your
      death or Disability (as defined in the Plan) or a Change in Control
      (as defined in the Plan).
      

                        


                

              

            

          

        

      

    

     

    By
signing your name below, you accept this stock unit award and acknowledge and
agree that the units are granted under and governed by the terms and conditions
(collectively, the “Terms”) of the Sun Healthcare Group, Inc. 2004 Equity
Incentive Plan (the “Plan”) and the Stock
Unit Agreement, both of which are hereby made a part of this
document.

    


    
      	
              “GRANTEE”

               

               

              _________________________________

              Signature

               

               

            	
              SUN
      HEALTHCARE GROUP, INC.,

              a
      Delaware corporation

               

              _________________________________

              By:  Richard
      Matros

              Its:  Chief
      Executive Officer

            


    

    



    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    Stock
Unit Agreement

    


    


    Sun
Healthcare Group, Inc.

    2004
Equity Incentive Plan

    


     

    1. Stock
Units.  As used herein, a “Stock Unit” is a non-voting
unit of measurement which is deemed for bookkeeping purposes to be equivalent in
value to one outstanding share of Common Stock of the
Corporation.  The Stock Units shall be used solely as a device for the
determination of any payment to eventually be made to the Grantee if and when
such Stock Units vest pursuant to Section 2.

     

    
      The Stock
Units create no fiduciary duty to the Grantee and shall create only a
contractual obligation on the part of the Corporation to make payments, subject
to vesting and the other terms and conditions hereof, as provided in Sections 4
and 6 below.  The Stock Units shall not be treated as property or as a
trust fund of any kind.  No assets have been secured or set aside by
the Corporation with respect to the Award and, if amounts become payable to the
Grantee pursuant to this Award Agreement, the Grantee’s rights with respect to
such amounts shall be no greater than the rights of any general unsecured
creditor of the Corporation.

    

     

    2. Vesting.  As
set forth on the cover page of this Award Agreement, the Award shall vest in
percentage installments, subject to earlier termination or acceleration and
subject to adjustment as provided herein and in the Plan.

     

    3. Continuance
of Employment.  The vesting schedule requires continued
employment or service through each applicable vesting date as a condition to the
vesting of the applicable installment of the Award and the rights and benefits
under this Award Agreement.  Employment or service for only a portion
of the vesting period, even if a substantial portion, will not entitle the
Grantee to any proportionate vesting or avoid or mitigate a termination of
rights and benefits upon or following a termination of employment or services as
provided in Section 7 below or under the Plan.

     

    Nothing
contained in this Award Agreement or the Plan constitutes an employment or
service commitment by the Corporation or any Subsidiary, affects the Grantee’s
status as an employee at will who is subject to termination without cause,
confers upon the Grantee any right to remain employed by or in service to the
Corporation or any Subsidiary, interferes in any way with the right of the
Corporation or any Subsidiary at any time to terminate such employment or
services, or affects the right of the Corporation or any Subsidiary to increase
or decrease the Grantee’s other compensation or benefits.  Nothing in
this paragraph, however, is intended to adversely affect any independent
contractual right of the Grantee under any written employment agreement with the
Corporation.

     

    4. Dividend
and Voting Rights.

     

    (a)           Limitations
on Rights Associated with Units.  The Grantee shall
have no rights as a stockholder of the Corporation, no dividend rights (except
as expressly provided in Section 4(b) hereof with respect to Dividend
Equivalents) and no voting rights with respect to the Stock Units or any shares
of Common Stock issuable in respect of such Stock Units, until shares of Common
Stock are actually issued to and held of record by the Grantee.  No
adjustments will be

    
      
        
        

      

      
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      made for
dividends or other rights of a holder for which the record date is prior to the
date of issuance of the stock certificate evidencing the
shares.

    

     

    (b)           Dividend
Equivalent Distributions.  No later than
sixty (60) days following each date that the Corporation pays an ordinary cash
dividend on its outstanding Common Stock (if any ordinary cash dividends are
paid), for which the related record date occurs after the Award Date and prior
to the fourth anniversary of the Award Date, the Corporation shall make a cash
payment to the Participant equal to, subject to the tax withholding provisions
of Section 9 hereof and Section 17 of the Plan, the amount of the ordinary cash
dividend paid by the Corporation on a single share of Common Stock multiplied by
the number of Stock Units subject to this Award Agreement outstanding and unpaid
as of such record date (“Dividend
Equivalents”).

     

    5. Restrictions
on Transfer.  Prior to the time the Stock Units are vested and
paid, neither the Stock Units comprising the Award nor any interest therein or
amount payable in respect thereof may be sold, assigned, transferred, pledged or
otherwise disposed of, alienated or encumbered, either voluntarily or
involuntarily, other than by will or the laws of descent and
distribution.

     

    6. Timing
and Manner of Payment of Stock Units.  Stock Units subject to
this Award Agreement shall be paid in an equivalent number of shares of Common
Stock promptly after the vesting of such Stock Units (and in all events not later than the first March 15
following the year in which such Stock Units became vested) in accordance
with the terms hereof; provided, however, that the Committee may provide for all
or a portion of such vested Stock Units to be paid in cash.  Such
payment shall be subject to the tax withholding provisions of Section 9 hereof
and Section 17 of the Plan and subject to adjustment as provided in Section 12
of the Plan and shall be in complete satisfaction of such vested Stock
Units.  The Grantee or any other person entitled under the Plan to
receive a payment of shares of Common Stock shall deliver to the Corporation any
representations or other documents or assurances required pursuant to Section 18
of the Plan.

     

    Notwithstanding
the foregoing paragraph, the Grantee may elect (a
“Distribution Election”) on the Award Date or at such other time as may be
provided by the Committee (and in all cases at a time that complies with the
initial deferral election requirements of Section 409A of the Code) and
in accordance with rules prescribed the Committee, not to receive payment upon
the vesting of such Stock Unit and instead have the Corporation continue to
maintain such Stock Unit on its books of account.  Distribution Elections may only be made by delivering a
written election to the Corporation on a deferral election form provided by the
Corporation. Subject to approval by the
Committee, the distribution of such
deferred Stock Units shall be payable as
elected by the Grantee on the deferral election form.  

     

    7. Effect of
Termination of Employment or Services.  The Grantee’s
Stock Units shall be forfeited to the extent such units have not become vested
upon the first date the Grantee is no longer employed by or providing services
to the Corporation or one of its Subsidiaries, regardless of the reason for the
termination of such employment or services, whether with or without cause,
voluntarily or involuntarily; provided, however,
that if the Grantee’s termination of employment or service is the result of the
Grantee’s death or Disability, any then-outstanding and otherwise unvested Stock
Units subject to this Award shall thereupon fully vest.  If the
Grantee is employed by a Subsidiary and that entity ceases to be a Subsidiary,
such event shall be deemed to be a termination of employment of the Grantee for
purposes of this Award Agreement, unless the Grantee otherwise continues to be
employed by the Corporation or another of its Subsidiaries following such
event.  If the Grantee is not an employee or director of the


    
      
        
        

      

      
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      Corporation
or a Subsidiary, the Committee shall be the sole judge for purposes of this
Award Agreement whether the Grantee continues to render services to the
Corporation or a Subsidiary and the date, if any, upon which such services shall
be deemed to have terminated.

    

     

    8. Adjustments
Upon Specified Events.  Upon the occurrence of certain events
relating to the Corporation’s stock contemplated by Section 12 of the Plan, the
Committee will make adjustments if appropriate in the number of Stock Units
contemplated hereby and the number and kind of securities that may be issued in
respect of the Award.

     

    9. Tax
Withholding.  The Corporation shall reasonably determine the
amount of any federal, state, local or other income, employment, or other taxes
which the Corporation or any of its affiliates may reasonably be obligated to
withhold with respect to the grant, vesting, or other event with respect to the
Stock Units.  The Corporation may, in its sole discretion, withhold a
sufficient number of shares of Common Stock in connection with the vesting of
the Stock Units at the then Fair Market Value of the Common Stock (determined
either as of the date of such withholding or as of the immediately preceding
trading day, as determined by the Corporation in its discretion) to satisfy the
amount of any such withholding obligations that arise with respect to the
vesting of such Stock Units.  The Corporation may take such action(s)
without notice to the Grantee and shall remit to the Grantee the balance of any
proceeds from withholding such shares in excess of the amount reasonably
determined to be necessary to satisfy such withholding
obligations.  The Grantee shall have no discretion as to the
satisfaction of tax withholding obligations in such manner.  If,
however, any withholding event occurs with respect to the Stock Units other than
the vesting of such units, or if the Corporation for any reason does not satisfy
the withholding obligations with respect to the vesting of the Stock Units as
provided above in this Section 9, the Corporation shall be entitled to require a
cash payment by or on behalf of the Grantee and/or to deduct from other
compensation payable to the Grantee the amount of any such withholding
obligations.

     

    10. Notices.  Any
notice to be given under the terms of this Award Agreement shall be in writing
and addressed to the Corporation at its principal office to the attention of the
Secretary, and to the Grantee at the Grantee’s last address reflected on the
Corporation’s records, or at such other address as either party may hereafter
designate in writing to the other.  Any such notice shall be given
only when received, but if the Grantee is no longer an employee of the
Corporation or one of its Subsidiaries, shall be deemed to have been duly given
by the Corporation when enclosed in a properly sealed envelope addressed as
aforesaid, registered or certified, and deposited (postage and registry or
certification fee prepaid) in a post office or branch post office regularly
maintained by the United States Government.

     

    11. Plan.  The
Award and all rights of the Grantee under this Award Agreement are subject to,
and the Grantee agrees to be bound by, all of the terms and conditions of the
provisions of the Plan, incorporated herein by this reference.  In the
event of a conflict or inconsistency between the terms and conditions of this
Award Agreement and of the Plan, the terms and conditions of the Plan shall
govern.  The Grantee agrees to be bound by the terms of the Plan and
of this Award Agreement.  The Grantee acknowledges reading and
understanding the Plan, the Prospectus for the Plan, and this Award
Agreement.  Unless otherwise expressly provided in other sections of
this Award Agreement, provisions of the Plan that confer discretionary authority
on the Corporation’s Board of Directors (the “Board”) or the Committee do
not (and shall not be deemed to) create any rights in the Grantee unless such
rights are expressly set forth herein or are otherwise in the sole discretion of
the Board or the Committee so conferred by appropriate action of the Board or
the Committee under the Plan after the date
hereof.

    
      
        
        

      

      
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    12. Entire
Agreement.  This Award Agreement and the Plan together
constitute the entire agreement and supersede all prior understandings and
agreements, written or oral, of the parties hereto with respect to the subject
matter hereof.  The Plan and this Award Agreement may be amended
pursuant to Section 22 of the Plan.  Such amendment must be in writing
and signed by the Corporation.  The Corporation may, however,
unilaterally waive any provision hereof in writing to the extent such waiver
does not adversely affect the interests of the Grantee hereunder, but no such
waiver shall operate as or be construed to be a subsequent waiver of the same
provision or a waiver of any other provision hereof.

     

    13. Counterparts.  This
Award Agreement may be executed simultaneously in any number of counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.

     

    14. Section
Headings.  The section headings of this Award Agreement are for
convenience of reference only and shall not be deemed to alter or affect any
provision hereof.

     

    15. Governing
Law.  This Award Agreement and the rights of the parties
hereunder with respect to the Award shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without regard to
conflict of law principles thereunder.

     

    16. Construction.  It is
intended that the terms of the Award will not result in the imposition of any
tax liability pursuant to Section 409A of the Code.  This Agreement
shall be construed and interpreted consistent with that
intent.

     

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