EXHIBIT 10.4
NOVATION COMPANIES, INC.
RESTRICTED STOCK AWARD AGREEMENT
NOVATION COMPANIES, Inc. EMPLOYEES

This Restricted Stock Award Agreement (the “Agreement”) is by and between
Novation Companies, Inc., a Maryland corporation (the “Corporation”), and
[EMPLOYEE] (“Employee”), and is effective as of [___________ ___, ____] (the
“Date of Grant”).

WHEREAS, the Employee serves as [TITLE] of the Corporation; and

WHEREAS, pursuant to Section 7.A. of the Novation Companies, Inc. 2015 Incentive
Stock Plan (the “Plan”), the Compensation Committee of the Corporation’s Board
of Directors (the “Committee”) has determined to grant the Employee a restricted
stock award of shares of the Corporation’s common stock, par value $0.01 per
share (the “Common Stock”), on the terms and conditions set forth herein, and
the Committee hereby grants such award.

NOW, THEREFORE, in consideration of the mutual covenants and representations set
forth herein, the Corporation and Employee agree as follows:

1.Grant of Stock. Subject to the terms and conditions of this Agreement, and
pursuant to the Plan, the Committee hereby grants to Employee [________]
([________]) shares of Common Stock (the “Stock”), subject to vesting pursuant
to Section 2 below.

2.Vesting Restrictions; Acceleration. The Stock shall be subject to vesting as
set forth in this Section 2:

(a)The Stock shall vest as follows: [_____________], subject to Employee’s
continuous employment with the Corporation from the Date of Grant through the
vesting date, other than as set forth below.

(b)The rights of Employee upon a Change of Control of the Corporation shall be
determined in accordance with Section 15 of the Plan. Employee expressly
consents to such Section 15, to the definition of “Change of Control” in Section
2.G. of the Plan and the other terms and conditions of the Plan.

3.Tax Matters.

(a)Upon the vesting of any Stock, Employee will be required to pay to the
Corporation any applicable federal, state, local or foreign withholding tax due
as a result of such vesting. The Corporation’s obligation to deliver any Stock
will be subject to such payment. The Corporation will, to the extent permitted
by law, have the right to deduct from any payment of any kind otherwise due to
Employee any federal, state, local or foreign withholding taxes due with respect
to such vesting.
(b)With respect to any withholding required upon the lapse of restrictions on
any Stock, Employee may elect, subject to the approval of the Committee in its
sole discretion, to satisfy the withholding obligation, in whole or in part
(without limitation), pursuant to Section 12.B. of the Plan.
(c)Employee acknowledges that it is Employee’s sole responsibility, and not the
Corporation’s, to file timely and properly the election under Section 83(b) of
the Code, and any corresponding provisions of state tax laws if Employee elects
to make such election, and Employee agrees to timely provide the Corporation
with a copy of any such election.

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(d)Notwithstanding anything herein to the contrary, the Stock is intended to be
exempt from the applicable requirements of Section 409A of the Code, and shall
be limited, construed and interpreted in accordance with such intent as is
reasonable under the circumstances.
4.Corporate Transactions. In the event of changes in the outstanding Stock by
reason of stock dividends, recapitalization, mergers, consolidations, split-ups,
combinations or exchanges of shares and the like, the number of shares of
non-vested Stock shall be adjusted accordingly to preserve the benefits or
potential benefits of the awards in a manner consistent with the Plan. In such
event, any and all new, substituted or additional securities or other property
to which Employee is entitled by reason of his ownership of non-vested Stock
shall be immediately subject to this Agreement and be subject to all
restrictions as the Stock with the same force and effect under this Agreement. 
Any and all such new, substituted, or additional securities or other property to
which Employee is entitled by reason of his ownership of the shares of Stock
subject to this Agreement shall become vested, released from all restrictions
and otherwise released and paid to the Employee on the date that the
restrictions lapse with respect to the underlying Stock to which it relates.

5.Restriction on Transfer. Employee shall not sell, transfer, pledge,
hypothecate or otherwise dispose of any shares of the non-vested Stock.
Notwithstanding the foregoing, the Employee may transfer all or any portion of
the Stock to a trust or trusts for the exclusive benefit of the Employee and his
spouse, qualified domestic partner, children or grandchildren or any other
persons related to the Employee as may be approved by the Administrator.
    
The Corporation shall not be required (i) to transfer on its books any shares of
Stock which shall have been sold or transferred in violation of any of the
provisions set forth in this Agreement, or (ii) to treat as owner of such shares
of Stock or to accord the right to vote as such owner or to pay dividends to any
transferee to whom such shares shall have been so transferred.

6.Legend. All certificates representing any of the shares of Stock subject to
the provisions of this Agreement shall have endorsed thereon the following
legend:

“The transferability of this certificate and the shares of stock represented
hereby are subject to the terms and conditions of the Novation Companies, Inc.
2015 Incentive Stock Plan and a Restricted Stock Award Agreement entered into
and between the registered owner and Novation Companies, Inc. Copies of the plan
and agreement are on file in the offices of Novation Companies, Inc.”

7.Limitations on Disposition. The Employee shall in no event make any
disposition of all or any portion of the Stock unless and until:

(a)The shares of Stock proposed to be transferred are vested; and

(b)If Employee is, or is likely deemed to be, an affiliate of the Corporation,
the disposition is made (i) pursuant to an effective registration statement
filed and effective with the Securities and Exchange Commission (or successor
agency), (ii) pursuant to the applicable provisions of Rule 144 promulgated
under the Securities Act of 1933, as amended (or successor statute or
regulation), or (iii) in a manner that is otherwise exempt from applicable
registration requirements in the opinion of counsel acceptable to the
Corporation.

8.Compliance with Law. The Corporation will make reasonable efforts to comply
with all applicable federal and state securities laws and with all applicable
requirements of any stock exchange on which the Common Stock may be listed;
provided, however, notwithstanding any other provision of this Agreement, the
Corporation will not be obligated to issue any securities pursuant to this

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Agreement if the issuance thereof would result in a violation of any such law or
stock exchange requirement.

9.Escrow. As security for the faithful performance of the terms of this
Agreement and to ensure the availability for delivery of the Employee’s Stock
free of legends upon lapse of the restrictions herein provided for, the Employee
agrees to deposit with the Secretary of the Corporation, or such other person
designated by the Corporation, as escrow agent in this transaction (the “Escrow
Agent”), the Stock, to be held by the Escrow Agent and delivered by said Escrow
Agent pursuant to the Joint Escrow Instructions of the Corporation and the
Employee set forth in Exhibit A attached hereto and incorporated by this
reference, which instructions shall also be delivered to the Escrow Agent at the
closing hereunder.

10.Miscellaneous.

(a)Subject to the provisions and limitations hereof, Employee may, during the
term of this Agreement, exercise all rights and privileges of a stockholder of
the Corporation with respect to the Stock, including, but not limited to, voting
and dividend rights. In the event of a stock dividend, any and all new
securities to which Employee is entitled by reason of his ownership of
non-vested Stock shall be immediately subject to this Agreement and be subject
to all restrictions as the Stock with the same force and effect under this
Agreement.  Any and all such new securities to which Employee is entitled by
reason of his ownership of the shares of Stock subject to this Agreement shall
become vested, released from all restrictions and otherwise released and paid to
the Employee on the date that the restrictions lapse with respect to the
underlying Stock to which it relates.

(b)The parties agree to execute such further instruments and to take such
further action as may reasonably be necessary to carry out the intent of this
Agreement.

(c)In the event that one or more of the provisions of this Agreement is
invalidated for any reason by a court of competent jurisdiction, any provision
so invalidated will be deemed to be separable from the other provisions hereof,
and the remaining provisions hereof will continue to be valid and fully
enforceable.

(d)Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given and received when personally delivered, or one
business day after being sent by nationally recognized overnight courier. Any
such notice shall be addressed to Employee or the Corporation and shall use the
address set forth on the signature page of this Agreement or such other address
as such party may designate by two (2) days’ advance written notice to the other
party hereto in accordance with this paragraph.

(e)The Corporation may assign its rights and delegate its duties under this
Agreement. If any such assignment or delegation requires consent of any state
securities authorities, the parties agree to cooperate in requesting such
consent. This Agreement shall be binding upon and inure to the benefit of the
successors and assigns of the Corporation and, subject to the restrictions on
transfer herein set forth, the Employee’s heirs, legatees, executors and
administrators.

(f)Nothing in this Agreement shall affect in any manner whatsoever the right or
power of the Corporation to terminate Employee’s employment, for any reason,
with or without cause.

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(g)The failure of the Corporation to enforce at any time any provision on this
Agreement shall in no way be construed to be a waiver of such provision or of
any other provision hereof.

(h)This Agreement shall be governed by and construed according to the laws of
the State of Maryland without regard to its principles of conflict of laws.

(i)The Plan is hereby incorporated by reference and made a part hereof, and this
Agreement is subject to all terms and conditions of the Plan.

(j)Any capitalized term used but not defined herein shall have the meaning set
forth in the Plan.

(k)All questions of interpretation concerning this Agreement will be determined
by the Committee in its sole discretion. All determinations by the Committee
will be final and binding upon all persons having an interest in this Agreement.
The Committee may at any time amend, alter, suspend or terminate this Agreement;
provided, however, that no such amendment, alteration, suspension or termination
may adversely affect the rights of the Employee under this Agreement without the
written consent of the Employee, except as required under the tax laws. Any
amendment to the Plan will be deemed to be an amendment to this Agreement to the
extent that the amendment is applicable hereto.
 
(l)This Agreement may be executed in multiple counterparts, each of which shall
be deemed an original but all of which together will constitute one and the same
instrument.

[Remainder of page intentionally left blank; signature page follows.]
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year
first above written.

NOVATION COMPANIES, INC.
By:        
Name:
Title:
Notice Address:        

Novation Companies, Inc.
500 Grand Boulevard, Suite 201B
Kansas City, MO 64106
Attention: Secretary

EMPLOYEE:
    
[EMPLOYEE]

Notice Address:

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A-4

EXHIBIT A
JOINT ESCROW INSTRUCTIONS
[DATE]
[ESCROW AGENT]
c/o Novation Companies, Inc.
500 Grand Boulevard, Suite 201B
Kansas City, MO 64106
Dear [ESCROW AGENT]:
As Escrow Agent for the undersigned parties, Novation Companies, Inc., a
Maryland corporation (the “Corporation”), and [EMPLOYEE] (“Employee”), you are
hereby authorized and directed to hold the Stock deposited with you pursuant to
the terms of that certain Restricted Stock Award Agreement (the “Agreement”)
between the Corporation and the Employee, to which a copy of these Joint Escrow
Instructions is attached as Exhibit A, in accordance with the following
instructions (capitalized terms used herein shall have the meanings set forth in
the Agreement):
1.The Employee irrevocably authorizes the Corporation to deposit with you the
shares of Stock to be held by you hereunder and any additions and substitutions
to said shares as defined in the Agreement. The Employee does hereby irrevocably
constitute and appoint you as his attorney-in-fact and agent for the term of
this escrow to execute with respect to such securities all documents necessary
or appropriate to make such securities negotiable and to complete any
transaction herein contemplated. Subject to the provisions of the Agreement, the
Employee shall have all rights and privileges of a shareholder of the
Corporation while the Stock is held by you.
2.Upon written request of the Employee or the Employee’s personal
representative, the Corporation will confirm to you in writing the number of
shares of Stock that are no longer subject to the vesting restrictions. Promptly
after your receipt of such confirmation, you will deliver to the Employee or the
Employee’s personal representative such number of shares of Stock as are not
then subject to the vesting restrictions and have not been previously delivered
to the Employee or the Employee’s personal representative.
3.Upon the vesting of any Stock, Employee will be required to pay to the
Corporation any applicable federal, state, local or foreign withholding tax due
as a result of such vesting. The Corporation’s obligation to deliver any Stock
will be subject to such payment. The Corporation will, to the extent permitted
by law, have the right to deduct from any payment of any kind otherwise due to
Employee any federal, state, local or foreign withholding taxes due with respect
to such vesting.
4.With respect to any withholding required upon the lapse of restrictions on any
Stock, Employee may elect, subject to the approval of the Committee in its sole
discretion, to satisfy the withholding obligation, in whole or in part (without
limitation), pursuant to Section 12.B. of the Plan.
5.If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to the
Employee, you shall deliver all of same to the Employee and shall be discharged
of all further obligations hereunder.
6.Your duties hereunder may be altered, amended, modified or revoked only by a
writing signed by all of the parties hereto.
7.You shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed

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by you to be genuine and to have been signed or presented by the proper party or
parties. You shall not be personally liable for any act you may do or omit to do
hereunder as Escrow Agent or as attorney-in-fact for the Employee while acting
in good faith, and any act done or omitted by you pursuant to the advice of your
own attorneys shall be conclusive evidence of such good faith. The Corporation
shall indemnify and hold the Escrow Agent harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, attorney fees or disbursements of any kind or nature whatsoever
that may be imposed on, incurred by, or asserted against it or them hereunder
and under the Agreement, except for any of the foregoing incurred in connection
with, or arising out of, the Escrow Agent’s willful misfeasance, bad faith or
negligence in the performance of its duties hereunder or by reason of its
reckless disregard for its obligations and duties hereunder.
8.You are hereby expressly authorized to disregard any and all warnings given by
any of the parties hereto or by any other person or corporation, excepting only
orders or process of courts of law and you are hereby expressly authorized to
comply with and obey orders, judgments or decrees of any court. In case you obey
or comply with any such order, judgment or decree, you shall not be liable to
any of the parties hereto or to any other person, firm or corporation by reason
of such compliance, notwithstanding any such order, judgment or decree being
subsequently reversed, modified, annulled, set aside, vacated or found to have
been entered without jurisdiction.
9.You shall not be liable in any respect on account of the identity, authorities
or rights of the parties executing or delivering or purporting to execute or
deliver the Agreement or any documents or papers deposited or called for
hereunder.
10.You shall not be liable for relinquishing of any rights under the statute of
limitations with respect to these Joint Escrow Instructions or any documents
deposited with you.
11.You shall be entitled to employ such legal counsel and other experts as you
may deem necessary properly to advise you in connection with your obligations
hereunder, and you may rely upon the advice of such counsel. Such counsel’s
reasonable compensation shall be paid by the Corporation.
12.Your responsibilities as Escrow Agent hereunder shall terminate if you shall
cease to be Secretary of the Corporation or if you shall resign by written
notice to each party. In the event of any such termination, the Corporation
shall appoint a successor Escrow Agent.
13.You are authorized to employ as agents banks, brokerage firms or other
financial institutions to hold in safekeeping any certificates, instruments or
other documents delivered to you hereunder and to perform other services such as
sale of securities, recordkeeping and other administrative services as you may
deem appropriate. Any or all of the shares of Stock being deposited with you may
be held in book entry form at the Corporation’s custodian, properly marked to
indicate your interest therein. All fees and expenses of such agents shall be
paid by the Corporation. If you reasonably require other or further instruments
in connection with these Joint Escrow Instructions or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.
14.It is understood and agreed that should any dispute arise with respect to the
delivery and/or ownership or right of possession of the securities held by you
hereunder, you are authorized and directed to retain in your possession without
liability to anyone all or any part of said securities until such disputes shall
have been settled either by mutual written agreement of the parties concerned or
by a final order, decree or judgment of a court of competent jurisdiction after
the time for appeal has expired and no appeal has been perfected, but you shall
be under no duty whatsoever to institute or defend any such proceedings.
15.Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery or upon deposit in the
United States Post Office, by registered or certified mail with postage and fees
prepaid, addressed to each of the other parties thereunto entitled at the
following addresses, or at such other addresses as a party may designate by 10
days’ advance written notice to each of the other parties hereto.

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CORPORATION:
Novation Companies, Inc.
500 Grand Boulevard, Suite 201B
Kansas City, MO 64106
Attention: Secretary
EMPLOYEE:
___________________
___________________
ESCROW AGENT:
[ESCROW AGENT]
c/o Novation Companies, Inc.
500 Grand Boulevard, Suite 201B
Kansas City, MO 64106
16.By signing these Joint Escrow Instructions, you become a party hereto only
for the purpose of said Joint Escrow Instructions; you do not become a party to
the Agreement.
17.Your duties under these Joint Escrow Instructions shall terminate upon the
expiration of the vesting restrictions as to all shares of Stock covered thereby
and the delivery of the certificates evidencing the Stock to the party entitled
thereto.
18.This instrument shall be binding upon and inure to the benefit of the parties
hereto, and their respective successors and permitted assigns.
Very truly yours,
NOVATION COMPANIES, INC.
By:        
Name:
Title:
EMPLOYEE:
    
[EMPLOYEE]
ESCROW AGENT:
    
[ESCROW AGENT]