SEPARATION AGREEMENT AND RELEASE OF ALL CLAIMS

Exhibit 10.01

SEPARATION AGREEMENT AND RELEASE OF ALL CLAIMS

This Separation Agreement and Release of All Claims (“Agreement”) is entered into by and between David J. Parrin (“Mr. Parrin”) and MoneyGram International, Inc., a Delaware corporation, and its predecessors, successors, affiliates, subsidiaries and related companies (“MoneyGram”). This Agreement is effective as of the date on which it has been duly executed by Mr. Parrin and MoneyGram.

A. MoneyGram employs Mr. Parrin in the position of Executive Vice President and Chief Financial Officer.

B. MoneyGram and Mr. Parrin have mutually agreed that Mr. Parrin’s employment with MoneyGram will terminate effective March 24, 2009 (the “Separation Date”).

C. Mr. Parrin is a participant in the Amended and Restated MoneyGram International, Inc. Executive Severance Plan (Tier I) (the “Severance Plan”) and the MoneyGram International, Inc. Special Executive Severance Plan (Tier I) (the “Special Severance Plan”).

D. Mr. Parrin and MoneyGram Payment Systems, Inc., including its parent companies, predecessors, successors, affiliates, and subsidiaries are parties to an Employee Trade Secret, Confidential Information and Post-Employment Restriction Agreement (the “Post-Employment Restriction Agreement”).

E. Mr. Parrin and MoneyGram have agreed to amend and restate Mr. Parrin’s obligations under the Post-Employment Restriction Agreement.

F. MoneyGram and Mr. Parrin have mutually agreed upon the following payments, benefits, and other terms and conditions under which they will end their employment relationship and resolve any and all actual and potential disputes between them.

Therefore, MoneyGram and Mr. Parrin agree as follows:

1. Termination of Employment. Mr. Parrin’s employment with MoneyGram shall terminate without cause as of the Separation Date. As of the Separation Date, any other position Mr. Parrin holds with MoneyGram and/or its parent, subsidiary or affiliate companies shall also terminate without cause.

2. Release of Claims by Mr. Parrin. In consideration for the receipt of the payments and other benefits described in this Agreement, to which Mr. Parrin understands and acknowledges he may not otherwise be entitled without executing this Agreement, and subject to MoneyGram’s compliance with its obligations under this Agreement, Mr. Parrin hereby releases and forever discharges MoneyGram, its parent companies, predecessors, successors, affiliates, subsidiaries, related companies, shareholders, and their respective members, managers, partners, employees, officers, agents, and directors (individually a “Released Party” and collectively the “Released Parties”) from the following:

MoneyGram acknowledges and agrees, however, that Mr. Parrin does not release any claims that the law does not allow to be waived by private agreement or any claims that may arise after the date on which Mr. Parrin signs this Agreement. Mr. Parrin does not release any claims to indemnification or insurance coverage (including but not limited to D&O coverage) that he may have with respect to any claims made or threatened against him in his capacity as an officer, director, or employee of MoneyGram.

3. Payments and Benefits. In consideration of the terms of this Agreement, MoneyGram shall make the following payments and provide the following benefits to Mr. Parrin:

From October 1, 2010 through March 24, 2011, and provided Mr. Parrin does not have available to him group medical and dental coverage through his then-current employer, MoneyGram will use its reasonable best efforts to continue group medical and dental coverage on the same terms; provided, however, that if MoneyGram determines that such continued coverage under a group plan would jeopardize the tax-qualified status of the plan, it shall have the right to discontinue such coverage and use its reasonable best efforts to obtain for Mr. Parrin medical and dental coverage that is comparable to the group medical and dental coverage provided to Mr. Parrin from April 1, 2009 through September 30, 2010. Mr. Parrin shall be required to pay no more for such coverage than then-current rates for company-provided group medical and dental coverage charged to all MoneyGram employees.

The parties agree that these payments and benefits satisfy any and all of MoneyGram’s obligations under the Severance Plan and the Special Severance Plan. Mr. Parrin shall have no right to any additional or further payments or benefits pursuant to the Severance Plan, the Special Severance Plan or otherwise, except as expressly set forth in Section 5 below. MoneyGram acknowledges and agrees that its obligation to make the above payments shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, or recoupment rights MoneyGram may have against Mr. Parrin now or in the future. MoneyGram acknowledges and agrees that Mr. Parrin shall not be obligated to seek other employment in mitigation of the above payments, and the obtaining of any such other employment shall in no event effect any reduction of MoneyGram’s obligations to make the above payments.

In the event it should be determined that any of the payments made hereunder to Mr. Parrin would be subject to any excise tax imposed by Section 4999 of the Internal Revenue Code, then Mr. Parrin shall be entitled to receive an additional payment (the “Gross-Up Payment”) in an amount such that, after payment by Mr. Parrin of all taxes (and any interest and penalties imposed with respect thereto as a direct result of any Underpayment as determined under the Severance Plan or Special Severance Plan or any other action or inaction of MoneyGram, but not any interest and penalties imposed as a direct result of Mr. Parrin’s failure to timely remit taxes) and excise tax imposed upon the Gross-Up Payment, Mr. Parrin will retain an amount of the Gross-Up Payment equal to the excise tax that has been imposed. The parties’ rights and obligations with respect to any Gross-Up Payment shall be determined pursuant to and conditioned upon compliance with the terms of Section 7 of the Special Severance Plan.

4. Payments and Benefits for Post-Employment Restriction Obligations. Mr. Parrin and MoneyGram acknowledge and agree that a portion of the severance payable hereunder is attributable to Mr. Parrin’s amended and restated post-employment restriction obligations. Mr. Parrin and MoneyGram further acknowledge and agree that certain of the consideration to be paid under this Agreement will be allocated to the value of those post-employment restriction obligations. Mr. Parrin and MoneyGram hereby agree that Ernst will act as the Accounting Firm for the purposes of determining and allocating that value. Mr. Parrin and MoneyGram agree to cooperate fully with Ernst in its determination of that value, and to file any required tax returns or other documents reflecting the value as determined by Ernst which such cooperation includes, but is not limited to, being available to meet in person with Ernst personnel at Ernst’s and/or MoneyGram’s offices. If a tax authority determines that Mr. Parrin has any additional tax liability or other obligations arising from or relating to such determination and/or allocation of value, MoneyGram agrees to defend, utilizing counsel of MoneyGram’s choosing, and fully indemnify Mr. Parrin for and from such additional tax liability or other obligations.

5. Other Benefit Coverages after Separation Date. Mr. Parrin’s other benefit coverages not addressed in Section 3 above are affected as follows:

Mr. Parrin’s other benefits, if any, will be paid in accordance with the provisions of the governing document(s) for those benefits.

6. No Change of Control. The parties acknowledge and agree that for all purposes, there has been no change of control (or change in control) of MoneyGram. Without limiting the generality of the foregoing, the parties specifically acknowledge and agree that there has been no “Change of Control” as defined in the Severance Plan or “Change in Control” as defined the SERP, and that Mr. Parrin is not entitled to any payments or benefits under either the Severance Plan or the SERP or any other payments, benefits, or rights that would arise as a result of any change of control (or change in control) now or at any time in the future. This Section 6 is not intended to alter or affect and does not alter or affect (a) any determination as to whether any payments hereunder are subject to section 4999 of the Internal Revenue Code; (b) any Gross-Up Payment and/or (c) the parties’ rights and obligations with respect to any Gross-Up Payment.

7. Claims Involving MoneyGram. Mr. Parrin warrants that he has not instituted, filed or caused others to file or institute any charge, complaint or action against any Released Party. Mr. Parrin warrants that, to the full extent permitted by law, he will not file or institute any charge, complaint or action against any Released Party with respect to any matters arising before or on the date Mr. Parrin signs this Agreement. Mr. Parrin will not recommend or suggest to any potential claimants or employees of MoneyGram or their attorneys or agents that they initiate claims or lawsuits against any Released Party, nor will Mr. Parrin voluntarily aid, assist, or cooperate with any claimants or employees of MoneyGram or their attorneys or agents in any claims or lawsuits now pending or commenced in the future against any Released Party; provided, however, that nothing in this paragraph will be construed to prevent Mr. Parrin from giving truthful testimony in response to direct questions asked pursuant to a lawful subpoena during any future legal proceedings involving any Released Party. Further, this Agreement does not purport to limit any right Mr. Parrin may have to file a charge under any civil rights statute or to participate in an investigation or proceeding conducted by the Equal Employment Opportunity Commission or other investigative agency. This Agreement does, however, waive and release any right to recover damages or other relief under any civil rights statute.

8. Post-Employment Restrictions and Obligations. Mr. Parrin understands, acknowledges and agrees that he is bound to the post-employment restrictions and other obligations set forth in Exhibit A to this Agreement. Mr. Parrin further acknowledges and agrees that the terms of Exhibit A are fully incorporated into this Agreement and are intended to be a part of this Agreement

9. Non-Disparagement. Mr. Parrin hereby acknowledges that he is not aware of any acts or practices of any Released Party that he knows or believes to be unlawful or unethical, and MoneyGram hereby acknowledges that the members of its Board of Directors and its Senior Leadership Team do not know of any acts or practices of Mr. Parrin known or believed to be unlawful or unethical. Mr. Parrin agrees not to express any derogatory or damaging statements about any Released Party, the management of MoneyGram or MoneyGram’s business condition in any public way or to anyone who could make these statements public. Mr. Parrin understands and acknowledges that this non-disparagement provision is a material inducement to MoneyGram to the making of this Agreement and that if Mr. Parrin breaches this provision, MoneyGram will be entitled to pursue its legal and equitable remedies, including without limitation, the right to recover damages and to seek injunctive relief. MoneyGram agrees that it will direct the current members of its Board of Directors and its MoneyGram Leadership Team to not express any derogatory or damaging statements about Mr. Parrin in any public way. It is understood and acknowledged that nothing in this Section 9 will be construed to prevent any person from giving truthful testimony in response to direct questions asked pursuant to a lawful subpoena during any future legal proceedings.

10. Time to Consider Agreement. Mr. Parrin understands and acknowledges that he may take twenty-one (21) calendar days to decide whether to sign this Agreement (“Consideration Period”). Mr. Parrin represents that if he signs this Agreement before the expiration of the Consideration Period, it is because he has decided that he does not need any additional time to decide whether to sign this Agreement. Mr. Parrin further agrees that any changes, material or otherwise, made to this Agreement do not restart or affect in any manner the original Consideration Period.

11. Right to Rescind or Revoke. Mr. Parrin understands and acknowledges that he has fifteen (15) days to revoke the release of any claims under the Age Discrimination in Employment Act (“ADEA”) and/or the Minnesota Human Rights Act (“MHRA”). Mr. Parrin understands and acknowledges that if he wishes to revoke the above-referenced release of claims under the ADEA and/or the MHRA after he has signed this Agreement, the revocation must be in writing and hand-delivered or mailed to MoneyGram. If hand-delivered to MoneyGram, the revocation must be: (a) addressed and delivered to Cindy Stemper, Executive Vice President, Human Resources & Corporate Services, MoneyGram International, Inc., 1550 Utica Avenue South, Minneapolis, MN 55416, within the fifteen-day period. If mailed to MoneyGram, the revocation must be: (a) postmarked within the fifteen-day period; (b) addressed to Cindy Stemper, Executive Vice President, Human Resources & Corporate Services, MoneyGram International, Inc., 1550 Utica Avenue South, Minneapolis, MN 55416; and (c) sent by certified mail, return receipt requested. In the event that Mr. Parrin provides a timely revocation pursuant to this Section 11, MoneyGram may, in its sole discretion, (a) void this Agreement in its entirety, or (b) void the release of Mr. Parrin’s ADEA and/or MHRA claims but enforce the remainder of this Agreement according to its terms.

12. Return of Equipment. Unless otherwise noted in this Agreement, Mr. Parrin shall, prior to or on the Separation Date, diligently locate all of MoneyGram’s property within his possession and return to MoneyGram all of MoneyGram’s property and information within his possession. Such property includes, but is not limited to, credit cards, computers, copy machines, facsimile machines, lap top computers, Blackberries, pagers, entry cards, keys, building passes, computer software, manuals, journals, diaries, files, lists, codes, documents, correspondence, and methodologies particular to MoneyGram and any and all copies thereof. Moreover, Mr. Parrin is strictly prohibited from destroying, obliterating or altering any of MoneyGram’s property covered by this section, and Mr. Parrin is strictly prohibited from making copies, or directing copies to himself through e-mail or other transmission, of any of MoneyGram’s property covered by this section. After the Separation Date, Mr. Parrin agrees to promptly respond to any reasonable request by MoneyGram to return MoneyGram property in his possession and/or control, and Mr. Parrin further agrees that should he later discover any MoneyGram property in his possession and/or control, he will promptly return it to MoneyGram without a specific request by MoneyGram to do so.

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13. Reasonable Requests; Indemnification.

14. Press Release and Other Communications. The parties agree to prepare a mutually agreeable press release regarding Mr. Parrin’s separation from MoneyGram and a communications plan with respect to that subject. Mr. Parrin agrees that he will not make any verbal or written comments with respect to his separation from MoneyGram except in accordance with that communications plan.

15. Full Compensation. Mr. Parrin agrees that the payments made and other consideration provided by MoneyGram under this Agreement constitute full compensation for and extinguish all of Mr. Parrin’s actual or potential claims, including, but not limited to, all claims for attorneys’ fees, costs, and disbursements, and all claims for any type of legal or equitable relief.

16. No Admission of Wrongdoing. Mr. Parrin understands, acknowledges and agrees that this Agreement does not constitute an admission that MoneyGram has violated any local ordinance, state or federal statute, or principle of common law, or that MoneyGram has engaged in any improper or unlawful conduct or wrongdoing against Mr. Parrin. Mr. Parrin agrees that he will not characterize this Agreement or the payment of any money or other consideration in accord with this Agreement as an admission that MoneyGram has engaged in any wrongdoing.

17. Authority. Mr. Parrin represents and warrants that he has the authority to enter into this Agreement and that no causes of action, claims, or demands released pursuant to this Agreement have been assigned to any person or entity not a party to this Agreement.

18. Right to Consult with Attorney. Mr. Parrin acknowledges that, by virtue of being presented with this Agreement, Mr. Parrin has hereby been advised in writing and is fully aware of his right to consult with an attorney of his own choosing for the purpose of determining whether to sign this Agreement.

19. Knowing and Voluntary Action. Mr. Parrin acknowledges that he has had a full opportunity to consider this Agreement and to ask any questions that he may have concerning this Agreement. Mr. Parrin acknowledges that in deciding whether to sign this Agreement, he has not relied upon any statements made by MoneyGram or its agents, other than the statements made in this Agreement and any MoneyGram benefit plans in which Mr. Parrin is a participant. Mr. Parrin further acknowledges that he has not relied on any legal, tax or accounting advice from MoneyGram or its agents, except to the extent required pursuant to Section 3 of this Agreement and/or Section 7 of the Special Severance Plan.

20. Entire Agreement. Except as expressly stated to the contrary in this Agreement, this Agreement, including Exhibit A hereto, constitutes the entire agreement of the parties with respect to Mr. Parrin’s employment with MoneyGram and Mr. Parrin’s separation from employment with MoneyGram. Except as expressly stated to the contrary in this Agreement, Mr. Parrin shall have no further rights, to payments, benefits, or otherwise, under the Severance Plan, the Special Severance Plan or any other MoneyGram agreement or plan.

21. Miscellaneous Provisions.

22. Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

23. Governing Law. This Agreement will be construed in accordance with, and any dispute or controversy arising from any breach or asserted breach of this Agreement will be governed by, the internal laws, and not the law of conflicts, of the State of Delaware.

24. Notices. Any notice required or permitted to be given under this Agreement shall be sufficient if made in writing and sent via Certified Mail, Return Receipt Requested and addressed as follows:

If to Mr. Parrin:

David J. Parrin
c/o Stephen M. Cohen, Esq. and Howard Flaxman, Esq.
Fox Rothschild LLP
2000 Market Street, 10^th Floor
Philadelphia PA 19103-3291

If to MoneyGram:

MoneyGram International, Inc.
1550 Utica Avenue South
Minneapolis MN 55416
Attn: Executive Vice President, General Counsel & Secretary

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties have executed this Agreement on the dates indicated at their respective signatures below.

David J. Parrin

Date:       

MoneyGram International, Inc.

By:       

Its:       

Date:       

[THIS IS THE SIGNATURE PAGE TO THE SEPARATION AGREEMENT
AND RELEASE OF ALL CLAIMS BETWEEN THE ABOVE-REFERENCED PARTIES]

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EXHIBIT A

AMENDED AND RESTATED EMPLOYEE TRADE SECRET, CONFIDENTIAL INFORMATION AND POST-EMPLOYMENT
RESTRICTION AGREEMENT

1. MoneyGram’s Business Operations and Interests.

2. Trade Secrets, Confidential Information and Related Covenants.

3. Post-Employment Competitive Activities and Related Covenants.

3.1.1 “Conflicting Product or Service” means any product, or process, or service in existence or under development, which is the same as or similar to or improves upon or competes with or is intended to replace or serve as an alternative to, a product, process, or service rendered by MoneyGram or which is under development or the subject of a pending acquisition or license by MoneyGram or as to which MoneyGram is actively negotiating to provide services through a business alliance relationship.

3.1.2 “Conflicting Organization” means any business that is a Customer (as defined below), or any other person or organization (including one owned in whole or in part by Mr. Parrin) which is engaged in or is about to become engaged in the research on, or the development, production, marketing or sale of a Conflicting Product or Service.

3.1.3 “Customer” means any current customer or prospective or former customer of MoneyGram with which Mr. Parrin had any contact or about which Mr. Parrin had access to Confidential Information or trade secrets at any time during the twenty-four (24) months preceding the Separation Date.

3.1.4 “Specific Conflicting Organizations” shall mean The Western Union Company, Fiserv, Inc., Euronet Worldwide, Global Payments, Inc., Coinstar, Inc., and Walmart Stores, Inc.

4. Injunctive Relief. Mr. Parrin acknowledges that the damages which may arise from a breach of Sections 3.2, 3.3, 3.4 and/or 3.5 of this Agreement are irreparable and difficult to prove with certainty. If any covenant contained in Sections 3.2, 3.3, 3.4 and/or 3.5 is breached, in addition to other legal remedies which may be available (which shall include but not be limited to any actual damages suffered by MoneyGram), MoneyGram shall be entitled to an immediate injunction from a court of competent jurisdiction to end such breach, without further proof of damage. Mr. Parrin and MoneyGram agree that the venue for such action shall be Minneapolis, Minnesota and that MoneyGram shall be entitled to reimbursement from Mr. Parrin of its costs and expenses, including reasonable attorneys’ fees, incurred in enforcing the covenants contained in Sections 3.2, 3.3, 3.4 and/or 3.5 of this Agreement.

5. Discoveries, Inventions, Improvements and Works by Employee.

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