MONEYGRAM INTERNATIONAL, INC. 2005 OMNIBUS INCENTIVE PLAN NON-QUALIFIED STOCK OPTION AGREEMENT

Exhibit 10.01

MONEYGRAM INTERNATIONAL, INC.
2005 OMNIBUS INCENTIVE PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

This Non-Qualified Stock Option Agreement (this “Agreement”) is made effective as of May 6, 2009 (the “Grant Date”) between MoneyGram International, Inc., a Delaware corporation (the “Company”), and Anthony P. Ryan who is an employee of the Company (the “Optionee”).

WHEREAS, in connection with the Optionee’s employment with the Company or one of its Subsidiaries, the Company desires to grant to the Optionee an option to purchase shares of the Company’s Common Stock, par value $0.01 per share (the “Common Stock”) on the date hereof pursuant to the terms and conditions of this Agreement and the Company’s 2005 Omnibus Incentive Plan (the “Plan”);

WHEREAS, the Human Resources and Nominating Committee (the “Committee”) has determined that it would be to the advantage, and in the best interest, of the Company and its shareholders to grant the option provided for herein to the Optionee as an incentive for Optionee’s increased efforts during Optionee’s employment with the Company or one of its Subsidiaries;

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.  Grant of Option .

Subject to the terms and conditions of the Plan and this Agreement, the Company hereby grants to the Optionee on the Grant Date, an option to purchase up to 8.0 million shares of Common Stock at the option price set forth in Section 2 (the “Option”).

The foregoing award is a Non-qualified Stock Option granted under the Plan, which is incorporated herein by this reference and made part of this Agreement. The Option is not an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

2.  Option Price .

The per share purchase price of the shares subject to the Option shall be the higher of $1.50 or the Fair Market Value of the Common Stock as of the Grant Date (the “Option Price”), subject to appropriate adjustment as may be determined by the Committee from time to time in accordance with Section 9.

3.  Term of Option and Exercisability .

The term of the Option shall be for a period of ten years from the Grant Date, terminating at the close of business on May 6, 2019 (the “Expiration Date”) or such shorter period as is prescribed in Sections 5 and 6 of this Agreement. Subject to the provisions of Sections 4, 5 and 6 of this Agreement, 50% of the Option shall vest and become exercisable based on a time-vesting schedule (the “Time-Based Option”) and the remaining 50% of the Option shall vest and become exercisable based on performance-based vesting criteria (the “Performance-Based Option”).

(a)  Time-Based Option : Subject to the Optionee’s continued employment with the Company or any of its Subsidiaries on the applicable “Time-Vesting Date” set forth in the table below, the Time-Based-Option shall vest as follows:

If the Optionee’s employment with the Company or any of its Subsidiaries is terminated on or prior to the fifth anniversary of the Grant Date, the unvested portion of the Time-Based Option shall be forfeited as described in Section 5 hereof.

(b)  Performance-Based Option : Subject to the Optionee’s continued employment with the Company or any of its Subsidiaries on the applicable Performance-Vesting Date (as defined below), the Performance-Based Option shall vest as follows:

(i) 50% of the Performance-Based Option (“Tranche 1 Performance-Based Option”) shall vest in full (A) so long as the Common Stock trades on a United States securities exchange or trading market (which, for the purpose of Section 3(b), shall include an over-the-counter market on the OTC Bulletin Board or Pink Sheets), on the earlier of (x) the date that the daily closing price of the Common Stock on the principal United States securities exchange or trading market on which the Common Stock is traded (the “Applicable Market”) equals or exceeds two (2) times the Option Price for any period of twenty (20) consecutive trading days during the five-year period following the Grant Date or (y) if there is a Change in Control (as defined below) during the five-year period following the Grant Date, on the date of such Change in Control, in the event the per share consideration in such Change in Control equals or exceeds two (2) times the Option Price, or (B) in the event the Common Stock does not trade on a United States securities exchange or trading market (such cessation, a “Going Private Event”), on the earlier of (x) following a Subsequent Public Offering (as defined below), the date during the five-year period following the Grant Date on which the Equity Value (as defined below) of a share of Common Stock would result in the Investors (as defined below) having value in their equity securities of the Company (assuming conversion into Common Stock of all convertible securities then held by the Investors) equal to or exceeding two (2) times the aggregate amount invested by the Investors in such securities or (y) if there is a Change in Control during the five-year period following the Grant Date, on the date of such Change in Control if the aggregate value of the cash, marketable securities and other consideration received by the Investors pursuant to such Change in Control, together with any distributions or proceeds previously received by the Investors, in each case, in connection with the equity securities of the Company held by the Investors, is equal to or exceeds two (2) times the aggregate amount invested by the Investors in securities of the Company (any of such dates, a “2X Performance Vesting Date”); and

(ii) the remaining 50% of the Performance-Based Option (“Tranche 2 Performance-Based Option”) shall vest in full (A) so long as the Common Stock trades on a United States securities exchange or trading market, on the earlier of (x) the date that the daily closing price of the Common Stock on the Applicable Market equals or exceeds three (3) times the Option Price for any period of twenty (20) consecutive trading days during the five-year period following the Grant Date or (y) if there is a Change in Control during the five-year period following the Grant Date, on the date of such Change in Control, in the event the per share consideration in such Change in Control equals or exceeds three (3) times the Option Price, or (B) in the event of a Going Private Event, on the earlier of (x) following a Subsequent Public Offering, the date during the five-year period following the Grant Date on which the Equity Value of a share of Common Stock would result in the Investors having value in their equity securities of the Company (assuming conversion into Common Stock of all convertible securities then held by the Investors) equal to or exceeding three (3) times the aggregate amount invested by the Investors in such securities or (y) if there is a Change in Control during the five-year period following the Grant Date, on the date of such Change in Control if the aggregate value of the cash, marketable securities and other consideration received by the Investors pursuant to such Change in Control, together with any distributions or proceeds previously received by the Investors, in each case, in connection with the equity securities of the Company held by the Investors, is equal to or exceeds three (3) times the aggregate amount invested by the Investors in securities of the Company (any of such dates, a “3X Performance Vesting Date”). The 2X Performance Vesting Date and the 3X Performance Vesting Date are each referred to as a “Performance-Vesting Date.”

Notwithstanding anything herein to the contrary, if the 2X Performance Vesting Date and/or the 3X Performance Vesting Date does not occur on or prior to the earlier of the fifth anniversary of the Grant Date and a Change in Control (absent a substitution of the applicable Options), the Tranche 1 Performance-Based Option and/or Tranche 2 Performance-Based Option, as applicable, shall be forfeited on such earlier date. Except as set forth in Section 5 hereof, if the Optionee’s employment with the Company is terminated prior to the 2X Performance Vesting Date and/or the 3X Performance Vesting Date, the Tranche 1 Performance-Based Option and/or Tranche 2 Performance-Based Option, as applicable, shall be forfeited, as described in Section 5 hereof.

For purposes hereof, the “Equity Value” shall mean the average daily closing price of the Common Stock over a consecutive twenty (20) day trading period.

For purposes hereof, “Subsequent Public Offering” shall mean a firm commitment underwritten public offering of shares of the Company or other event the result of which is that shares of the Company are tradable on the New York Stock Exchange, American Stock Exchange, NASDAQ National Market or similar market system, in each case, after a Going Private Event.

For purposes hereof, “Investors” shall mean the “Investors” as defined in that certain Amended and Restated Purchase Agreement, dated March 17, 2008, by and between the Company and the other parties thereto, and their respective affiliates (not including the Company).

4.  Effect of Change in Control.

Notwithstanding the vesting provisions contained in Section 3 above, but subject to the other terms and conditions contained in this Agreement, from and after a Change in Control (as defined below) the following provisions shall apply:

(a) If the Optionee is employed by the Company or any of its Subsidiaries on the date of a “Change in Control”, any portion of the Time-Based Option not previously vested shall vest immediately prior to the consummation of the Change in Control, unless the Time-Based Option or any such portion thereof shall have been previously terminated in accordance with the terms of the Plan and this Agreement.

(b) If at the time of the Change in Control, the per share Fair Market Value of an Option does not exceed the per share Option Price, then this Option, whether vested or unvested, shall immediately terminate in full and be of no further force or effect; and

(c) If at the time of the Change in Control, the per share Fair Market Value of an Option exceeds the Option Price, then the Committee, in its sole discretion, may:

(i) provide the Optionee a reasonable amount of time (such period of time to be determined by the Committee in its sole discretion) to exercise the vested and unexercised portion of this Option (including any portion that may have vested pursuant to Section 4(a)) that is outstanding at the time of the Change in Control and, if not exercised within such period, have this Option terminate in full and be of no further force or effect with respect to any unexercised portion of such Option;

(ii) provide for the termination of this Option in exchange for payment to the Optionee of the excess of (x) the Fair Market Value of the vested portion of the Option that is outstanding and unexercised at the time of the Change in Control over (y) the aggregate Option Price for such vested portion of the Option; or

(iii) if the Change in Control involves the merger or consolidation of the Company with or into another entity, provide for the substitution by the surviving entity or its direct or indirect parent of awards with substantially the same terms as this Option in accordance with Section 422 of the Code and Section 12.2 of the Plan.

(d) Notwithstanding the other provisions of this Section 4, if a Change in Control occurs, and after giving effect thereto (i) the Common Stock no longer trades on a United States securities exchange or trading market, and (ii) the Optionee’s employment is terminated by the Company without Cause (as defined in Section 5 below) or he resigns for Good Reason, then any portion of Time-Based Options not previously vested shall automatically accelerate and become vested.

(e) For purposes of this Agreement, “Change in Control” shall mean (i) a sale, transfer or other conveyance or disposition, in any single transaction or series of transactions, of all or substantially all of the Company’s assets, (ii) the transfer of more than 50% of the outstanding securities of the Company, calculated on a fully-diluted basis, to an entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the “Exchange Act”)), or (iii) the merger, consolidation reorganization, recapitalization or share exchange of the Company with another entity, in each case in clauses (ii) and (iii) above under circumstances in which the holders of the voting power of the outstanding securities of the Company, as the case may be, immediately prior to such transaction, hold less than 50% in voting power of the outstanding securities of the Company or the surviving entity or resulting entity, as the case may be, immediately following such transaction.

5.  Effect of Termination of Employment .

If the Optionee’s employment is terminated, the following shall apply:

(a) if the Optionee’s employment with the Company or any of its Subsidiaries is terminated for Cause (as defined below) or the Optionee resigns without Good Reason, (as defined below), any portion of the Option that has not vested on the date of the Optionee’s termination of employment shall be immediately forfeited, and any portion of the Option that has vested may be exercised until the earlier of (i) the Expiration Date, or (ii) the date that is thirty (30) days after the date of the Optionee’s termination of employment.

(b) if the Optionee’s employment with the Company or any of its Subsidiaries is terminated by the Company without Cause, or the Optionee terminates his employment for Good Reason, any portion of the Option that has not vested on the date of Optionee’s termination of employment shall be forfeited, and any portion of the Option that has vested may be exercised until the earlier of (i) the Expiration Date and (ii) the date that is two hundred seventy (270) days after the date of the Optionee’s termination of employment.

(c) if the Optionee’s employment with the Company or any of its Subsidiaries is terminated due to a Disability (as defined below), the Option may be exercised until the earlier of (i) the Expiration Date and (ii) the date that is twelve (12) months after the date of the Optionee’s termination due to Disability.

(c) if the Optionee’s employment with the Company or any of its Subsidiaries is terminated due to death, the Option may be exercised by the Optionee’s personal representative or the administrators of the Optionee’s estate or by any Person or Persons to whom the Option has been transferred by will or the applicable laws of descent and distribution until the earlier of (i) the Expiration Date and (ii) the date that is twelve (12) months after the date of the Optionee’s death.

Notwithstanding anything to the contrary in (b) or (c) of this Section 5, if the date on which the Optionee ceases to be an employee of the Company due to Disability or death is within six (6) months of the Grant Date of the Option, and the Optionee is an officer or director of the Company subject to Section 16(b) of the Exchange Act, this Option shall not become fully exercisable until six (6) months and one day after the Grant Date.

For purposes of this Agreement, “Cause” shall mean (A) Optionee’s willful refusal to carry out, in all material respects, the reasonable and lawful directions of the Board that are within Executive’s control and consistent with Optionee’s status as a senior executive of the Company and his duties and responsibilities hereunder (except for a failure that is attributable to Optionee’s illness, injury or Disability) for a period of 10 days following written notice by the Company to Executive of such failure; (B) fraud or material dishonesty in the performance of Optionee’s duties hereunder, (C) an act or acts on Optionee’s part constituting (x) a felony under the laws of the United States or any state thereof, (y) a m