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<TITLE>05-19-04 Form S-8</TITLE>
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<FONT FACE="Times New Roman" SIZE=1><P ALIGN="CENTER">As filed with the Securities and Exchange Commission on May
25, 2004
<br>
&nbsp;</P>
<P align="right">&#9;Registration No. __________________</P>
</FONT><B><FONT FACE="Times New Roman" SIZE=4><P ALIGN="CENTER">UNITED STATES<br>
SECURITIES AND EXCHANGE COMMISSION<br>
</FONT><FONT FACE="Times New Roman" SIZE=2>Washington, D.C. 20549</P>
</FONT>
</B><FONT FACE="Times New Roman"><P ALIGN="CENTER">___________________</P>
</FONT><FONT FACE="Times New Roman" SIZE=4><P ALIGN="CENTER">FORM S-8<br>
</FONT><FONT FACE="Times New Roman">REGISTRATION STATEMENT<BR>
UNDER<BR>
THE SECURITIES ACT OF 1933<br>
___________________</P>
</FONT><FONT FACE="Times New Roman" SIZE=4><B><P ALIGN="CENTER">Sun Healthcare Group, Inc.<br>
</B></FONT><FONT FACE="Times New Roman" SIZE=1>(Exact Name of Registrant as Specified in Its Charter)<br>
</FONT><FONT FACE="Times New Roman">___________________</FONT></P>
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    <td width="50%" align="center"><font size="2">Delaware</font></td>
    <td width="50%" align="center"><FONT FACE="Times New Roman" SIZE=2>&nbsp; &#9;85-0410612</FONT></td>
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  <tr>
    <td width="50%" align="center"><FONT FACE="Times New Roman" SIZE=1>&nbsp;(State
    or Other Jurisdiction of<br>
    Incorporation or Organization)

</FONT></td>
    <td width="50%" align="center"><FONT FACE="Times New Roman" SIZE=1>&nbsp;(I.R.S.Employer&nbsp;<br>
Identification No.)</FONT></td>
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<FONT FACE="Times New Roman" SIZE=2><P align="center">&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<br>
18831 Von Karman, Suite 400<br>
Irvine, California 92612<BR>
</FONT><FONT FACE="Times New Roman" SIZE=1>(Address, Including Zip Code, of Principal Executive Offices)
<br>
</FONT><FONT FACE="Times New Roman">___________________</P>

<B><P ALIGN="CENTER">Sun Healthcare Group, Inc. 2004 Equity Incentive Plan<br>
Sun Healthcare Group, Inc. Amended and Restated<br>
2002 Non-Employee Director Equity Incentive Plan<br>
</B>
</FONT><FONT FACE="Times New Roman" SIZE=1>(Full Title of the Plan)<br>
</FONT><FONT FACE="Times New Roman">___________________</P>
</FONT><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER"></P>
</FONT><FONT FACE="Times New Roman" SIZE=2>
<P ALIGN="CENTER">Michael Berg, Esq.<br>
Sun Healthcare Group, Inc.<br>
101 Sun Avenue NE<br>
Albuquerque, New Mexico 87109 <br>
(505) 821-3355<br>
</FONT><FONT FACE="Times New Roman" SIZE=1>(Name, Address and Telephone Number, Including Area Code, of Agent For Service)</P>
</FONT><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER"></P>
</FONT><FONT FACE="Times New Roman" SIZE=2>
<P ALIGN="CENTER">COPY TO:<br>
J. Jay Herron, Esq.<br>
Andor D. Terner, Esq.<br>
O'Melveny &amp; Myers LLP<br>
114 Pacifica, Suite 100<br>
Irvine, California 92618-3318<br>
</FONT><FONT FACE="Times New Roman">___________________</P>
<p ALIGN="CENTER">&nbsp;</p>
<p ALIGN="CENTER"><font size="2">1</font></p>
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<P ALIGN="CENTER">CALCULATION  OF REGISTRATION  FEE</P></FONT>
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<P><br>
<br>
Title Of<br>
Securities<br>
To Be Registered</FONT></P>
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<P><br>
<br>
Amount<br>
To Be<br>
Registered</FONT></P>
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<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Times New Roman" SIZE=1><P>Proposed<br>
Maximum<br>
Offering<br>
Price<br>
Per Unit</FONT></P>
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<TD WIDTH="22%" VALIGN="TOP">
<FONT FACE="Times New Roman" SIZE=1><P>Proposed<br>
Maximum<br>
Aggregate<br>
Offering<br>
Price</FONT></P>
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<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1>
</FONT>
<FONT FACE="Times New Roman" SIZE=1>
<P><br>
<br>
Amount Of<br>
Registration<br>
Fee</FONT></P>
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<FONT FACE="Times New Roman" SIZE=2><P>Common Stock, $0.01 par value per share</FONT></TD>
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<FONT FACE="Times New Roman" SIZE=1><P>1,940,000</FONT><SUP><FONT FACE="Times New Roman" SIZE=2>(1)<br>
</FONT>
</SUP><FONT FACE="Times New Roman" SIZE=2>shares</FONT></P>
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<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Times New Roman" SIZE=2><P>$6.64<SUP>(2)</SUP></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT FACE="Times New Roman" SIZE=2><P>$12,881,600<SUP>(2)</SUP></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Times New Roman" SIZE=2><P>$1,632.10<SUP>(2)</SUP></FONT></TD>
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<FONT FACE="Times New Roman" SIZE=1><DIR>

<SUP><P>(1)</SUP>&#9;This Registration Statement covers, in addition to the number of shares of Sun Healthcare Group, Inc., a Delaware corporation (the "Company"), common stock, par value $0.01 per share (the "Common Stock"), stated above, options and other rights to purchase or acquire the shares of Common Stock covered by the Prospectus and, pursuant to Rule 416(c) under the Securities Act of 1933, as amended (the "Securities Act"), an additional indeterminate number of shares, options and rights that may be offered or issued pursuant to the Sun Healthcare Group, Inc. 2004 Equity Incentive Plan and the Sun Healthcare Group, Inc. Amended and Restated 2002 Non-Employee Director Equity Incentive Plan (the "Plans") as a result of one or more adjustments under the Plans to prevent dilution resulting from one or more stock splits, stock dividends or similar transactions.</P>
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<SUP><FONT FACE="Times New Roman" SIZE=1><P>(2)</FONT></SUP><FONT FACE="Times New Roman" SIZE=1> &#9;Pursuant to Securities Act Rule 457(h), the maximum offering price, per share and in the aggregate, and the registration fee were calculated based upon the average of the high and low prices of the Common Stock on May
18, 2004, as quoted on the Nasdaq National Market.<br>
<br>
The Exhibit Index for this registration statement is at page 10.</P>
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<p align="center"><font face="Times New Roman" size="2">2</font></p>

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</FONT><B>
<P ALIGN="CENTER"><font size="2">PART I</font></P>
</B><P ALIGN="CENTER"><font size="2">INFORMATION REQUIRED IN THE<br>
SECTION 10(a) PROSPECTUS</font></P>
<P><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The document(s) containing the information specified in Part I of Form S-8 (plan information and registrant information) will be sent or given to participants as specified by Securities Act Rule&nbsp;428(b)(1).  Such documents need not be filed with the Commission either as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Securities Act Rule&nbsp;424.  These documents, which include the statement of availability required by Item 2 of Form S-8, and the documents incorporated by reference in this Registration Statement pursuant to Item&nbsp;3 of Form S-8 (Part&nbsp;II hereof), taken together, constitute a prospectus that meets the requirements of Section&nbsp;10(a) of the Securities Act.
</font>  </P>
<p align="center"><font face="Times New Roman" size="2">3</font></p>

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<P ALIGN="CENTER"></P>
<B><P ALIGN="CENTER"><font size="2">PART II</font></P>
</B><P ALIGN="CENTER"><font size="2">INFORMATION REQUIRED IN THE<br>
REGISTRATION STATEMENT</font></P>

<B><P><font size="2">Item 3.&#9;Incorporation of Certain Documents by Reference</font></P>

</B><P><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following documents of the Company filed with the Commission are incorporated herein by reference:
</font> </P>

<P><font size="2">(a)&#9;The Company's Annual Report on Form 10-K for its fiscal year ended December 31, 2003, filed with the Commission on March 5, 2004 (Commission File No. 000-49663);</font></P>
<P><font size="2">(b)&#9;The Company's Quarterly Report on Form 10-Q for its fiscal quarter ended March 31, 2004, filed with the Commission on May 7, 2004 (Commission File No. 000-49663);</font></P>
<P><font size="2">(c)&#9;The Company's Current Reports on Form 8-K, filed with the Commission on
May 19, 2004, March 9, 2004, March 3, 2004, February 20, 2004, February 17, 2004, January 29, 2004, January 26, 2004 and January 21, 2004 (each, Commission File No.&nbsp;000-49663); and</font></P>
<P><font size="2">(d)&#9;The description of the Company's Common Stock contained in its Registration Statement on Form 8-A filed with the Commission on March 6, 2002 (Commission File No. 000-49663), and any other amendment or report filed for the purpose of updating such description.</font></P>

<P><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;All documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold shall be deemed to be incorporated by reference into this Registration Statement and to be a part hereof from the date of filing of such documents.  Any statement contained herein or in a document, all or a portion of which is incorporated or deemed to be incorporated by reference herein, shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement.  Any such statement so modified or superseded shall not be deemed, except as so modified or amended, to constitute a part of this Registration Statement.</font></P>

<B><P><font size="2">Item 4.&#9;Description of Securities</font></P>

</B><P><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company's Common Stock is registered pursuant to Section 12 of the Exchange Act.  Therefore, the description of securities is omitted.</font></P>

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<B><P><font size="2">Item 5.&#9;Interests of Named Experts and Counsel</font></P>

</B><P><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.</font></P>

<B><P><font size="2">Item 6.&#9;Indemnification of Directors and Officers</font></P>

</B><P><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As authorized by Section 102(b)(7) of the Delaware General Corporation Law (the "DGCL"), the Company's Restated Certificate of Incorporation (the "Certificate") provides that a director of the Company will not be liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption for liability or limitation thereof is not permitted under the DGCL.  The DGCL provides that the liability of a director may not be limited (i) for any breach of the director's duty of loyalty to the Company or its stockholders, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) for liability for payments of dividends of stock purchased or redemptions in violation of the DGCL or (iv) for any transaction from which the director derived an improper personal benefit.</font></P>
<P><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While the Certificate provides directors with protection from awards for monetary damages for breaches of their duty of care, it does not eliminate such duty. Accordingly, the Certificate will have no effect on the availability of equitable remedies, such as an injunction or rescission based on a director's breach of such director's duty of care.</font></P>
<P><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, the Company's Bylaws (the "Bylaws") provide that the Company shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (a "Covered Person") who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a "proceeding"), by reason of the fact that he, or a person for whom he is the legal representative, is or was a director of the Company or an officer of the Company elected by the Board of Directors or, while a director of the Company or an officer of the Company elected by the Board of Directors, is or was serving at the request of the Company as a director, officer, employee or agent of another company or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys' fees) reasonably incurred by such Covered Person.  Notwithstanding the preceding sentence, except as otherwise provided in the Bylaws, the Company shall be required to indemnify a Covered Person in connection with a proceeding (or part thereof) commenced by such Covered Person only if the commencement of such proceeding (or part thereof) by the Covered Person was authorized by the Board of Directors of the Company.</font></P>
<P><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company entered into Expense Indemnification Agreements with two of its current officers and certain former officers and directors.  The agreements require the Company to indemnify such persons against expenses actually and reasonably incurred by them under certain circumstances set forth therein.  No current directors or executive officers of the Company are covered by such agreements.</font></P>
<P><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company maintains directors' and officers' liability insurance policies insuring directors and officers of the Company for certain covered losses as defined in the policies.</font></P>

<B><P><font size="2">Item 7.&#9;Exemption from Registration Claimed</font></P>

</B><P><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.</font></P>

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<B><P><font size="2">Item 8. &#9;Exhibits</font></P>

</B><P><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See the attached Exhibit Index at page 8, which is incorporated herein by reference.</font></P>

<B><P><font size="2">Item 9.&#9;Undertakings</font></P>

</B><P><font size="2">(a)&#9;The undersigned registrant hereby undertakes:
</font> </P><P><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#9;&#9;(1)&#9;To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:</font></P>

<P align="left">&#9;&#9;&#9;<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#9;&#9;&#9;(i)&#9;To include any prospectus required by Section 10(a)(3) of the Securities Act;</font></P>
<P align="left">&#9;&#9;&#9;<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#9;&#9;&#9;(ii)&#9;To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement; and</font></P>
<P align="left">&#9;&#9;&#9;<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#9;&#9;&#9;(iii)&#9;To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement;</font></P>

<I><P><font size="2">provided, however,</font></I><font size="2"> that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by reference in this Registration Statement.</font></P>
<P>&#9;&#9;<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#9;&#9;(2)&#9;That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial <I>bona fide</I> offering thereof.</font></P>
<P>&#9;&#9;<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#9;&#9;(3)&#9;To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.</font></P>

<P><font size="2">(b)&#9;The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section&nbsp;15(d) of the Exchange Act) that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial <I>bona fide</I> offering thereof.</font></P>
<p align="center"><font face="Times New Roman" size="2">6</font></p>

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<P><font size="2">(h)&#9;Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, executive officers and controlling persons of the registrant pursuant to the provisions described in Item 6 above, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.  In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
</font> </P>
<p align="center"><font face="Times New Roman" size="2">7</font></p>

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<B><P ALIGN="CENTER"><font size="2">SIGNATURES</font></P>
</B><P><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Irvine, State of California, on May
19, 2004.</font></P>

<P ALIGN="JUSTIFY"><font size="2">By: <u>/s/ Richard K. Matros</u></font><U><font size="2">
<br>
</font>

</U><font size="2">Richard K. Matros<br>
Chairman of the Board and<br>
Chief Executive Officer</font></P>

<B><P ALIGN="CENTER"><font size="2"><br>
POWER OF ATTORNEY</font></P>
</B><P><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each person whose signature appears below constitutes and appoints Richard K. Matros and Steven A. Roseman, and each of them, acting individually and without the other, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place, and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments, exhibits thereto and other documents in connection therewith) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or either of them individually, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.</font></P>
<P><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.</font></P>

<P ALIGN="CENTER"><CENTER>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=2 WIDTH=572 style="border-collapse: collapse" bordercolor="#111111">
<TR><TD WIDTH="33%" VALIGN="TOP">
<U><P ALIGN="CENTER"><font size="2">Signature</font></U></TD>
<TD WIDTH="38%" VALIGN="TOP">
<U><P ALIGN="CENTER"><font size="2">Title</font></U></TD>
<TD WIDTH="29%" VALIGN="TOP">
<U><P ALIGN="CENTER"><font size="2">Date</font></U></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP">
<U><P> <font size="2">/s/ Richard K.&nbsp; Matros <br>
</font>
</U><font size="2">Richard K. Matros</font></P>
  </TD>
<TD WIDTH="38%" VALIGN="TOP">
<P><font size="2">Chairman and Chief Executive Officer (Principal Executive Officer)<br>
&nbsp;</font></TD>
<TD WIDTH="29%" VALIGN="TOP">
<P ALIGN="CENTER"><font size="2">May 19, 2004</font></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP">
<U><P>  <font size="2">/s/ Kevin W. Pendergest <br>
</font>
</U><font size="2">Kevin W. Pendergest</font></P>
  </TD>
<TD WIDTH="38%" VALIGN="TOP">
<P><font size="2">Executive Vice President and Chief Financial Officer (Principal Financial Officer)<br>
&nbsp;</font></TD>
<TD WIDTH="29%" VALIGN="TOP">
<P ALIGN="CENTER"><font size="2">May 19, 2004</font></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP">
<U><P><font size="2">/s/ Jennifer L. Botter <br>
</font>
</U><font size="2">Jennifer L. Botter</font></P>
  </TD>
<TD WIDTH="38%" VALIGN="TOP">
<P><font size="2">Senior Vice President and Corporate Controller<br>
(Principal Accounting Officer)<br>
&nbsp;</font></P>
  </TD>
<TD WIDTH="29%" VALIGN="TOP">
<P ALIGN="CENTER"><font size="2">May 19, 2004</font></TD>
</TR>
<TR><TD WIDTH="100%" VALIGN="TOP" colspan="3">
<p align="center">&nbsp;</p>

<p align="center"><font face="Times New Roman" size="2">8</font></p>

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<TR><TD WIDTH="33%" VALIGN="TOP">
<U><P>  <font size="2">/s/ Gregory S. Anderson<br>
</font>
</U><font size="2">Gregory S. Anderson<br>
&nbsp;</font></P>
  </TD>
<TD WIDTH="38%" VALIGN="TOP">
<P><font size="2">Director</font></TD>
<TD WIDTH="29%" VALIGN="TOP">
<P ALIGN="CENTER"><font size="2">May 19, 2004</font></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP">
<U><P><font size="2">/s/ Tony M. Astorga<br>
</font>
</U><font size="2">Tony M. Astorga<br>
&nbsp;</font></P>
  </TD>
<TD WIDTH="38%" VALIGN="TOP">
<P><font size="2">Director</font></TD>
<TD WIDTH="29%" VALIGN="TOP">
<P ALIGN="CENTER"><font size="2">May 19, 2004</font></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP">
<U><P>  <font size="2">/s/ Christian K. Bement</font></U><font size="2"><br>
Christian K. Bement <br>
&nbsp;</font></P>
  </TD>
<TD WIDTH="38%" VALIGN="TOP">
<P><font size="2">Director</font></TD>
<TD WIDTH="29%" VALIGN="TOP">
<P ALIGN="CENTER"><font size="2">May 19, 2004</font></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP">
<U><P>  <font size="2">/s/ Steven M. Looney</font></U><font size="2"><br>
Steven M. Looney<br>
&nbsp;</font></P>
  </TD>
<TD WIDTH="38%" VALIGN="TOP">
<P><font size="2">Director</font></TD>
<TD WIDTH="29%" VALIGN="TOP">
<P ALIGN="CENTER"><font size="2">May 19, 2004</font></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP">
<U><P>  <font size="2">/s/ Bruce C. Vladeck, Ph.D. <br>
</font>
</U><font size="2">Bruce C. Vladeck, Ph.D.<br>
&nbsp;</font></P>
  </TD>
<TD WIDTH="38%" VALIGN="TOP">
<P><font size="2">Director</font></TD>
<TD WIDTH="29%" VALIGN="TOP">
<P ALIGN="CENTER"><font size="2">May 19, 2004</font></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP">
<U><P><font size="2">/s/ Milton J. Walters</font></U><font size="2"><br>
Milton J. Walters</font></P>
  </TD>
<TD WIDTH="38%" VALIGN="TOP">
<P><font size="2">Director</font></TD>
<TD WIDTH="29%" VALIGN="TOP">
<P ALIGN="CENTER"><font size="2">May 19, 2004</font></TD>
</TR>
</TABLE>
</CENTER></P>


<p align="center"><font size="2">9</font></p>

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<B><P ALIGN="CENTER"><font size="2">EXHIBIT INDEX</font></P>
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<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="12%"><font size="2">Exhibit<br>
    </font>
<U><font size="2">Number</font></U><font size="2">&nbsp; </font></td>
    <td width="88%"><br>
    <U><font size="2">Description of Exhibit</font></U></td>
  </tr>
  <tr>
    <td width="12%">&nbsp;</td>
    <td width="88%">&nbsp;</td>
  </tr>
  <tr>
    <td width="12%" valign="top"><font size="2">4.1</font></td>
    <td width="88%"><font size="2">Sun Healthcare Group, Inc. 2004 Equity Incentive Plan.  (Filed as Appendix B to the Company's Proxy Statement filed with the Commission on April 8, 2004 (Commission File No. 000-49663) and incorporated herein by this reference.)</font></td>
  </tr>
  <tr>
    <td width="12%" valign="top">&nbsp;</td>
    <td width="88%">&nbsp;</td>
  </tr>
  <tr>
    <td width="12%" valign="top"><font size="2">4.2</font></td>
    <td width="88%"><font size="2">Sun Healthcare Group, Inc. Amended and Restated 2002 Non-Employee Director Equity Incentive Plan.  (Filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for its fiscal quarter ended June 30, 2002 filed with the Commission on August 16, 2002 (Commission File No. 001-12040) and incorporated herein by this reference.)</font></td>
  </tr>
  <tr>
    <td width="12%" valign="top">&nbsp;</td>
    <td width="88%">&nbsp;</td>
  </tr>
  <tr>
    <td width="12%" valign="top"><font size="2">5.</font></td>
    <td width="88%"><font size="2">Opinion of O'Melveny &amp; Meyers, LLP (opinion re legality).</font></td>
  </tr>
  <tr>
    <td width="12%" valign="top">&nbsp;</td>
    <td width="88%">&nbsp;</td>
  </tr>
  <tr>
    <td width="12%" valign="top"><font size="2">23.1</font></td>
    <td width="88%"><font size="2">Consent of Ernst &amp; Young LLP (consent of independent accountants).</font></td>
  </tr>
  <tr>
    <td width="12%" valign="top">&nbsp;</td>
    <td width="88%">&nbsp;</td>
  </tr>
  <tr>
    <td width="12%" valign="top"><font size="2">23.2</font></td>
    <td width="88%"><font size="2">Consent of O'Melveny &amp; Meyers (included in Exhibit 5).</font></td>
  </tr>
  <tr>
    <td width="12%" valign="top">&nbsp;</td>
    <td width="88%">&nbsp;</td>
  </tr>
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    <td width="12%" valign="top"><font size="2">24.</font></td>
    <td width="88%"><font size="2">Power of Attorney (included in this registration statement under "Signatures").</font></td>
  </tr>
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<p align="center"><font size="2">10</font></p>

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[{"type": "S-8", "sequence": "1", "filename": "forms8.htm", "description": "FORM S-8", "secsgml_size_bytes": 28491}]
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05-19-04 Form S-8
As filed with the Securities and Exchange Commission on May
25, 2004
Registration No. __________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________
Sun Healthcare Group, Inc.
(Exact Name of Registrant as Specified in Its Charter)
___________________
Delaware
85-0410612
(State
    or Other Jurisdiction of
Incorporation or Organization)
(I.R.S.Employer
Identification No.)
18831 Von Karman, Suite 400
Irvine, California 92612
(Address, Including Zip Code, of Principal Executive Offices)
___________________
Sun Healthcare Group, Inc. 2004 Equity Incentive Plan
Sun Healthcare Group, Inc. Amended and Restated
2002 Non-Employee Director Equity Incentive Plan
(Full Title of the Plan)
___________________
Michael Berg, Esq.
Sun Healthcare Group, Inc.
101 Sun Avenue NE
Albuquerque, New Mexico 87109
(505) 821-3355
(Name, Address and Telephone Number, Including Area Code, of Agent For Service)
COPY TO:
J. Jay Herron, Esq.
Andor D. Terner, Esq.
O'Melveny & Myers LLP
114 Pacifica, Suite 100
Irvine, California 92618-3318
___________________
1
CALCULATION  OF REGISTRATION  FEE
Title Of
Securities
To Be Registered
Amount
To Be
Registered
Proposed
Maximum
Offering
Price
Per Unit
Proposed
Maximum
Aggregate
Offering
Price
Amount Of
Registration
Fee
Common Stock, $0.01 par value per share
1,940,000
(1)
shares
$6.64
(2)
$12,881,600
(2)
$1,632.10
(2)
(1)	This Registration Statement covers, in addition to the number of shares of Sun Healthcare Group, Inc., a Delaware corporation (the "Company"), common stock, par value $0.01 per share (the "Common Stock"), stated above, options and other rights to purchase or acquire the shares of Common Stock covered by the Prospectus and, pursuant to Rule 416(c) under the Securities Act of 1933, as amended (the "Securities Act"), an additional indeterminate number of shares, options and rights that may be offered or issued pursuant to the Sun Healthcare Group, Inc. 2004 Equity Incentive Plan and the Sun Healthcare Group, Inc. Amended and Restated 2002 Non-Employee Director Equity Incentive Plan (the "Plans") as a result of one or more adjustments under the Plans to prevent dilution resulting from one or more stock splits, stock dividends or similar transactions.
(2)
Pursuant to Securities Act Rule 457(h), the maximum offering price, per share and in the aggregate, and the registration fee were calculated based upon the average of the high and low prices of the Common Stock on May
18, 2004, as quoted on the Nasdaq National Market.
The Exhibit Index for this registration statement is at page 10.
2
PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Part I of Form S-8 (plan information and registrant information) will be sent or given to participants as specified by Securities Act Rule 428(b)(1).  Such documents need not be filed with the Commission either as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Securities Act Rule 424.  These documents, which include the statement of availability required by Item 2 of Form S-8, and the documents incorporated by reference in this Registration Statement pursuant to Item 3 of Form S-8 (Part II hereof), taken together, constitute a prospectus that meets the requirements of Section 10(a) of the Securities Act.
3
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3.	Incorporation of Certain Documents by Reference
The following documents of the Company filed with the Commission are incorporated herein by reference:
(a)	The Company's Annual Report on Form 10-K for its fiscal year ended December 31, 2003, filed with the Commission on March 5, 2004 (Commission File No. 000-49663);
(b)	The Company's Quarterly Report on Form 10-Q for its fiscal quarter ended March 31, 2004, filed with the Commission on May 7, 2004 (Commission File No. 000-49663);
(c)	The Company's Current Reports on Form 8-K, filed with the Commission on
May 19, 2004, March 9, 2004, March 3, 2004, February 20, 2004, February 17, 2004, January 29, 2004, January 26, 2004 and January 21, 2004 (each, Commission File No. 000-49663); and
(d)	The description of the Company's Common Stock contained in its Registration Statement on Form 8-A filed with the Commission on March 6, 2002 (Commission File No. 000-49663), and any other amendment or report filed for the purpose of updating such description.
All documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold shall be deemed to be incorporated by reference into this Registration Statement and to be a part hereof from the date of filing of such documents.  Any statement contained herein or in a document, all or a portion of which is incorporated or deemed to be incorporated by reference herein, shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement.  Any such statement so modified or superseded shall not be deemed, except as so modified or amended, to constitute a part of this Registration Statement.
Item 4.	Description of Securities
The Company's Common Stock is registered pursuant to Section 12 of the Exchange Act.  Therefore, the description of securities is omitted.
4
Item 5.	Interests of Named Experts and Counsel
Not applicable.
Item 6.	Indemnification of Directors and Officers
As authorized by Section 102(b)(7) of the Delaware General Corporation Law (the "DGCL"), the Company's Restated Certificate of Incorporation (the "Certificate") provides that a director of the Company will not be liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption for liability or limitation thereof is not permitted under the DGCL.  The DGCL provides that the liability of a director may not be limited (i) for any breach of the director's duty of loyalty to the Company or its stockholders, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) for liability for payments of dividends of stock purchased or redemptions in violation of the DGCL or (iv) for any transaction from which the director derived an improper personal benefit.
While the Certificate provides directors with protection from awards for monetary damages for breaches of their duty of care, it does not eliminate such duty. Accordingly, the Certificate will have no effect on the availability of equitable remedies, such as an injunction or rescission based on a director's breach of such director's duty of care.
In addition, the Company's Bylaws (the "Bylaws") provide that the Company shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (a "Covered Person") who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a "proceeding"), by reason of the fact that he, or a person for whom he is the legal representative, is or was a director of the Company or an officer of the Company elected by the Board of Directors or, while a director of the Company or an officer of the Company elected by the Board of Directors, is or was serving at the request of the Company as a director, officer, employee or agent of another company or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys' fees) reasonably incurred by such Covered Person.  Notwithstanding the preceding sentence, except as otherwise provided in the Bylaws, the Company shall be required to indemnify a Covered Person in connection with a proceeding (or part thereof) commenced by such Covered Person only if the commencement of such proceeding (or part thereof) by the Covered Person was authorized by the Board of Directors of the Company.
The Company entered into Expense Indemnification Agreements with two of its current officers and certain former officers and directors.  The agreements require the Company to indemnify such persons against expenses actually and reasonably incurred by them under certain circumstances set forth therein.  No current directors or executive officers of the Company are covered by such agreements.
The Company maintains directors' and officers' liability insurance policies insuring directors and officers of the Company for certain covered losses as defined in the policies.
Item 7.	Exemption from Registration Claimed
Not applicable.
5
Item 8. 	Exhibits
See the attached Exhibit Index at page 8, which is incorporated herein by reference.
Item 9.	Undertakings
(a)	The undersigned registrant hereby undertakes:
(1)	To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(i)	To include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii)	To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement; and
(iii)	To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement;
provided, however,
that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by reference in this Registration Statement.
(2)	That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
(3)	To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(b)	The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
6
(h)	Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, executive officers and controlling persons of the registrant pursuant to the provisions described in Item 6 above, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.  In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
7
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Irvine, State of California, on May
19, 2004.
By:
/s/ Richard K. Matros
Richard K. Matros
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Richard K. Matros and Steven A. Roseman, and each of them, acting individually and without the other, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place, and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments, exhibits thereto and other documents in connection therewith) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or either of them individually, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Richard K.  Matros
Richard K. Matros
Chairman and Chief Executive Officer (Principal Executive Officer)
May 19, 2004
/s/ Kevin W. Pendergest
Kevin W. Pendergest
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
May 19, 2004
/s/ Jennifer L. Botter
Jennifer L. Botter
Senior Vice President and Corporate Controller
(Principal Accounting Officer)
May 19, 2004
8
/s/ Gregory S. Anderson
Gregory S. Anderson
Director
May 19, 2004
/s/ Tony M. Astorga
Tony M. Astorga
Director
May 19, 2004
/s/ Christian K. Bement
Christian K. Bement
Director
May 19, 2004
/s/ Steven M. Looney
Steven M. Looney
Director
May 19, 2004
/s/ Bruce C. Vladeck, Ph.D.
Bruce C. Vladeck, Ph.D.
Director
May 19, 2004
/s/ Milton J. Walters
Milton J. Walters
Director
May 19, 2004
9
EXHIBIT INDEX
Exhibit
Number
Description of Exhibit
4.1
Sun Healthcare Group, Inc. 2004 Equity Incentive Plan.  (Filed as Appendix B to the Company's Proxy Statement filed with the Commission on April 8, 2004 (Commission File No. 000-49663) and incorporated herein by this reference.)
4.2
Sun Healthcare Group, Inc. Amended and Restated 2002 Non-Employee Director Equity Incentive Plan.  (Filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for its fiscal quarter ended June 30, 2002 filed with the Commission on August 16, 2002 (Commission File No. 001-12040) and incorporated herein by this reference.)
5.
Opinion of O'Melveny & Meyers, LLP (opinion re legality).
23.1
Consent of Ernst & Young LLP (consent of independent accountants).
23.2
Consent of O'Melveny & Meyers (included in Exhibit 5).
24.
Power of Attorney (included in this registration statement under "Signatures").
10