Document:

EX-10.01

EXECUTION COPY

EXHIBIT 10.01

July 28, 2009

Mr. Jeffrey Woods

134 East 93rd Street

Apt #9C

New York, New York 10128

Dear Jeffrey:

We are pleased to offer you employment as Executive Vice President and Chief Financial Officer of
MoneyGram International, Inc. (the “Company”) pursuant to the terms of this offer letter.

1. Position & Duties — You will serve as Executive Vice President and Chief Financial
Officer, and in so doing you will report to the Chief Executive Officer (“CEO”) and will be
responsible for communicating with the Board of Directors of the Company (“Board”) with
respect to all matters within the scope of your position and duties. You will have supervision and
control over, and responsibility for, such management and operational functions of the Company
currently assigned to such position(s), and will have such other or different powers and duties, as
may from time to time be prescribed by the CEO. Subject to the Board’s passage of a resolution
increasing the size of the Board by one and electing you to fill such newly vacancy, you will serve
as a member of the Board, at no additional compensation. In addition, you will serve, if requested
by the Company, as an officer or director of any subsidiary or affiliate of the Company, at no
additional compensation. Your employment with the Company will begin on August 3, 2009.

2. Indemnification Agreement — In your capacity as a director and officer of the Company,
you will have the benefit of an Indemnification Agreement in the form attached hereto as
Exhibit A.

3. Salary — Your annual base salary will be $440,000, paid in accordance with the standard
payroll practices of the Company and from which will be deducted income tax withholdings, social
security and other customary employee deductions in conformity with the Company’s payroll policies
in effect from time to time. Your annual base salary will be reviewed annually by the Human
Resources and Nominating Committee of the Board.

4. Bonus — You will be eligible to participate in the Company’s Management and Line of
Business Incentive Plan (“MIP”). Your annual MIP bonus targets will be established by the
Board. Your annual MIP bonus will be (i) 60% of your annual base salary (“Base Target
Bonus”) if the annual MIP bonus base targets are achieved and (ii) 120% of your annual base
salary (“Maximum Target Bonus”) if the annual MIP bonus maximum targets are achieved. For
fiscal year 2009, you will be eligible to receive a guaranteed bonus equal to 50% of your Base
Target Bonus; provided, however, that if the annual MIP bonus maximum targets are
achieved, you will be eligible to receive 75% of your Maximum Target Bonus. Your annual MIP bonus
will be paid to you in a lump sum payable when such annual MIP bonus under the MIP is regularly
paid to other MIP participants for such year but in no event later than the 15th day of the third
month of the year following the year to which such MIP bonus relates.

5. Equity Arrangements — You will be eligible to participate in the Company’s equity
incentive compensation program and, contingent upon approval of the Human Resources and Nominating
Committee of the Board, you will be granted a non-qualified stock option to purchase 4,250,000
shares of the Company’s common stock pursuant to and subject to the terms and conditions of a
Nonqualified Stock Option Agreement substantially in the form attached hereto as Exhibit B.

6. Benefits — You will be entitled to four (4) weeks paid vacation per calendar year and
you will be eligible to participate in the Company’s benefit plans and welfare plans, on the same
basis as that generally made available to other senior executives of the Company, on such terms and
conditions as may be in effect and/or amended from time to time, in each case to the extent you are
eligible for such benefits under the terms of such plans. Enclosed to this letter is information on
the Company’s benefit plans. New employees are eligible for benefits the first day of the month
following date of hire, provided the online enrollment form is completed within the first 31-days
of employment. The next opportunity to enroll in benefits would be during open enrollment or if a
qualifying event occurs. Enrollment instructions and a password for the Company’s benefit website
are issued on the first day of employment.

7. Commuting Expenses; Relocation Expenses — The Company will reimburse you for (i) your
reasonable air travel expenses (at the coach rate only) for commuting from New York to Minneapolis
and your reasonable temporary housing expenses incurred during trips from your primary residence in
New York to Minneapolis (“Commuting Expenses”) until June 30, 2010 or such earlier time as
you move to the Minneapolis area, and (ii) your “Relocation Expenses” (as defined below) incurred
in connection with your move to the Minneapolis area; provided, that, (i) all such
expenses or reimbursements will be made within thirty (30) days following your submission of
appropriate documentation of the applicable Commuting Expenses or Relocation Expenses in accordance
with the Company’s policies and in any event no later than the last day of the taxable year
following the taxable year in which such expenses were incurred by you; (ii) no such reimbursement
or expenses eligible for reimbursement in any taxable year will in any way affect the expenses
eligible for reimbursement in any other taxable year; and (iii) the right to reimbursement or
in-kind benefits will not be subject to liquidation or exchanged for another benefit. The term
“Relocation Expenses” shall mean your reasonable expenses to move personal effects and
household furnishings from New York to the Minneapolis area (including transportation of goods,
storage, and moving services), real estate brokerage fees and up to two trips for your spouse for
house hunting in the Minneapolis area. The Company will also pay you an amount (a “Tax
Gross-Up Payment”) sufficient to cover the additional federal, state and local income and
employment taxes imposed upon you by virtue of the payments provided for in this Section 7, so that
you will be in the same economic position as if you had not been subject to such additional
federal, state and local income and employment taxes. You will agree to provide the Company or its
agents, upon written request, with sufficient information to accurately calculate the amount of the
Tax Gross-Up Payment due. Any Tax Gross-Up Payment as provided herein will be made within thirty
(30) days following your submission of appropriate documentation of your tax remittances in
accordance with the Company’s policies and in any event no later than the end of the calendar year
immediately following the calendar year in which you remit the related taxes (and any reimbursement
of expenses incurred due to a tax audit or litigation will be made within thirty (30) days
following your submission of appropriate documentation of your expenses in accordance with the
Company’s policies but in no event later than the end of the calendar year immediately following
the calendar year in which the taxes that are the subject of the audit or litigation are remitted
to the taxing authority, or, if no taxes are to be remitted, the end of the calendar year following
the calendar year in which the audit or litigation is completed).

8. Business Expenses; Legal Fees — Reasonable expenses incurred by you during the period of
your employment in the performance of your duties will be reimbursed by the Company within thirty
(30) days following your submission of appropriate documentation of such business expenses in
accordance with the Company’s policies. The Company will reimburse you up to $15,000 for
reasonable attorney’s fees incurred in connection with the negotiation of this offer letter.

9. Termination of Employment — Your employment is at-will and may be terminated by you or
the Company at any time and for any reason. In connection with your employment, you and the
Company will enter into a Severance Agreement attached hereto as Exhibit C. The Severance
Agreement will be in effect at the time your employment begins. Upon termination of your
employment for any reason, you will resign, as of the date of such termination, from all positions
with the Company.

10. Absence of Employment Restrictions — You hereby represent and warrant to the Company
that (i) neither the execution and delivery of this offer letter nor the performance of your duties
hereunder violates or will violate the provisions of any other agreement to which you are a party
or by which you are bound; and (ii) except for obligations to maintain confidentiality of certain
information relating to previous employers which will not unreasonably interfere with the
performance of your duties hereunder, there are no agreements by which you are currently bound
relating to employment or which contain any post-employment restrictions whatsoever.

11. Post-Employment Restrictions — The Company considers the protection of its confidential
information, proprietary materials and goodwill to be extremely important. Consequently, as a
condition of this offer of employment, entering into the Severance Agreement, the grant of a
non-qualified stock option pursuant to the Nonqualified Stock Option Agreement and your subsequent
employment, you will be required to sign the Employee Trade Secret, Confidential Information and
Post-Employment Restriction Agreement attached hereto as Exhibit D.

12. Pre-Employment Requirements — This offer of employment is contingent upon:

	 	•	 	A satisfactory background check that includes verification of information
recorded on your employment application and resume. To initiate your background
check, please log on to www.myvci.com/moneygraminternational and provide the
information requested.

	 	•	 	Successfully completing a screening for illegal drugs. Information on the
Company’s testing sites is enclosed. Testing must be completed within four (4)
business days of accepting employment. The enclosed Forensic Drug Testing Custody and
Control Form and picture identification must be taken to the testing site.

	 	•	 	Proving identity and employment eligibility using items from the enclosed
Acceptable Documents list.

I look forward to working with you and believe you will be a valuable addition to the Company. If
you have any questions, please feel free to give me a call.

Very truly yours,

MoneyGram International, Inc.

By: Pamela H. Patsley

Its: Executive Chairman

1

Exhibit A

Indemnification Agreement

2

EXECUTION COPY

EXHIBIT A

EMPLOYEE DIRECTOR INDEMNIFICATION AGREEMENT

This Employee Director Indemnification Agreement (“Agreement”) is made as of the      
day of      , 2009, by and between MoneyGram International, Inc. (the “Corporation”), a
Delaware corporation, and Jeffrey Woods, a director and an officer of the Corporation (the
“Employee Director”).

Recitals

A. The Employee Director has been elected to serve as a director of the Corporation and the
Corporation desires the Employee Director to continue in such capacity.

B. The Employee Director has agreed to serve as an executive officer of the Corporation, and
the Corporation desires the Employee Director to serve as an executive officer.

C. In addition to the indemnification to which the Employee Director is entitled under the
Amended and Restated Certificate of Incorporation of the Corporation (the “Articles”), the
Corporation at its sole expense maintains insurance protecting its officers and directors against
certain losses arising out of actual or threatened actions, suits or proceedings to which such
persons may be made or threatened to be made parties (“D & O Insurance”).

D. The Articles and the Delaware General Corporation Law specifically provide that they are
not exclusive, and thereby contemplate that contracts may be entered into (i) between the
Corporation and the members of its Board of Directors with respect to indemnification of such
directors, and (ii) between the Corporation and its officers with respect to indemnification of
such officers.

Agreement

In order to induce the Employee Director to continue to serve in the capacity as a director
and an executive officer, in consideration of the Employee Director’s valuable services for the
Corporation, the Corporation and the Employee Director agree as follows:

1. Continued Service. Employee Director will continue to serve as a director of the
Corporation and an executive officer, in each case, at the will of the Corporation, or in
accordance with separate contract to the extent that such a contract is in effect at the time in
question, so long as the Employee Director is duly elected and qualified in accordance with the
Articles and the Bylaws of the Corporation (“Bylaws”) or until the Employee Director
resigns in accordance with applicable law.

2. Indemnity of Employee Director. The Corporation shall hold harmless and indemnify
Employee Director to the full extent authorized or permitted by the provisions of the Delaware
General Corporation Law or by any amendment thereof or other statutory provisions authorizing or
permitting such indemnification which is adopted after the date hereof. To the extent that a
change in the Delaware General Corporation Law (or other applicable law), whether by statute or
judicial decision, permits greater indemnification or advancement of expenses than would be
afforded currently under the Articles or the Bylaws and this Agreement, it is the intent of the
parties hereto that Employee Director enjoy by this Agreement the greater benefits so afforded by
such change. No amendment, alteration or repeal of this Agreement or of any provision hereof or of
the Articles or the Bylaws or any provision thereof shall limit or restrict any right of Employee
Director under this Agreement or such other documents in respect of any action taken or omitted by
Employee Director in Employee Director’s capacity as a director or officer of the Corporation prior
to such amendment, alteration or repeal.

3. Maintenance of Insurance and Self Insurance.

a. Subject only to the provisions of Section 3(b) hereof, so long as Employee Director
shall continue to serve as a director of the Corporation (or shall continue at the request
of the Corporation to serve as a director of another corporation, partnership, joint
venture, trust or other enterprise) and/or as an executive officer of the Corporation, and
thereafter so long as Employee Director shall be subject to any possible claim or
threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative by reason of the fact that Employee Director was a director
or an officer of the Corporation or served in any of said other capacities, the Corporation
will purchase and maintain in effect for the benefit of Employee Director one or more
valid, binding and enforceable policies of D & O Insurance.

b. The Corporation shall not be required to maintain said policies of D & O Insurance
in effect if said insurance is not reasonably available or if, in the reasonable business
judgment of the then directors of the Corporation, either (i) the premium cost for such
insurance is substantially disproportionate to the amount of coverage or (ii) the coverage
provided by such insurance is so limited by exclusions that there is insufficient benefit
from such insurance.

c. In the event the Corporation does not purchase and maintain in effect said policies
of D & O Insurance pursuant to the provisions of Section 3(b) hereof, the Corporation shall
hold harmless and indemnify Employee Director to the full extent of the coverage which
would otherwise have been provided for the benefit of Employee Director pursuant to such D
& O Insurance.

4. Additional Indemnity. Subject only to the exclusions set forth in Section 5 hereof,
and without limiting any right which Employee Director may have now or in the future pursuant to
the Delaware General Corporation Law, the Articles, the Bylaws, any other agreement, any
resolution, any policy of insurance or otherwise, the Corporation hereby further agrees to hold
harmless and indemnify Employee Director against any and all expenses (including attorneys’ fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred by Employee
Director in connection with any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, whether by third parties or by or in the
right of the Corporation to which Employee Director at any time becomes a party, or is threatened
to be made a party, by reason of the fact that Employee Director is or was a director or an officer
of the Corporation, or is or was serving or at any time serves at the request of the Corporation as
a director or officer of another corporation, partnership, joint venture, trust or other
enterprise.

5. Limitations on Additional Indemnity. No indemnity pursuant to Section 4 hereof
shall be paid by the Corporation:

a. for which and to the extent that payment is actually made to Employee Director
under a valid and collectible insurance policy maintained by the Company;

b. for which and to the extent that Employee Director is indemnified by the Company or
receives a recovery from the Company otherwise than pursuant to Section 4;

c. on account of any suit in which judgment is rendered against Employee Director for
an accounting of profits made from the purchase or sale by Employee Director of securities
of the Corporation pursuant to the provisions of Section 16(b) of the Securities Exchange
Act of 1934 and amendments thereto or similar provisions of any federal, state or local
statutory law;

d. with respect to acts or omissions which are not in good faith or which constitute
intentional misconduct or a knowing violation of law;

e. with respect to authorization by Employee Director of the unlawful payment of a
dividend or other distribution on the Corporation’s capital stock or the unlawful purchase
of its capital stock;

f. with respect to any transaction from which Employee Director derived an improper
personal benefit; or

g. if a final decision by a Court having jurisdiction in the matter shall determine
that such indemnification is not lawful.

6. Notification and Defense of Claim. Promptly after receipt by Employee Director of
notice of the commencement of any action, suit or proceeding, Employee Director will, if a claim in
respect thereof is to be made against the Corporation under this Agreement, notify the Corporation
of the commencement thereof; but the omission so to notify the Corporation will not relieve it from
any liability which it may have to Employee Director otherwise than under this Agreement or from
any liability which is not directly related to the failure of Employee Director promptly to so
notify the Corporation. With respect to any such action, suit or proceeding as to which Employee
Director notifies the Corporation of the commencement thereof:

a. The Corporation will be entitled to participate therein at its own expense; and,

b. Except as otherwise provided below, to the extent that it may wish, the Corporation
jointly with any other indemnifying party similarly notified will be entitled to assume the
defense thereof, with counsel satisfactory to Employee Director. After notice from the
Corporation to Employee Director of its election so to assume the defense thereof, the
Corporation will not be liable to Employee Director under this Agreement for any legal or
other expenses subsequently incurred by Employee Director in connection with the defense
thereof other than reasonable costs of investigation or as otherwise provided below.
Employee Director shall have the right to employ the Employee Director’s counsel in such
action, suit or proceeding, but the fees and expenses of such counsel incurred after notice
from the Corporation of its assumption of the defense thereof shall be at the expense of
Employee Director unless (i) the employment of counsel by Employee Director has been
authorized by the Corporation (ii) Employee Director shall have reasonably concluded that
there may be a conflict of interest between the Corporation and Employee Director in the
conduct of the defense of such action or (iii) the Corporation shall not in fact have
employed counsel to assume the defense of such action, in each of which cases the fees and
expenses of counsel shall be at the expense of the Corporation. The Corporation shall not
be entitled to continue the defense of any action, suit or proceeding properly brought by
or on behalf of the Corporation or as to which Employee Director shall have made the
conclusion provided for in (ii) above.

c. The Corporation shall not be required to indemnify Employee Director under this
Agreement for any amounts paid in settlement of any action or claim effected without its
written consent. The Corporation shall not settle any action or claim in any manner which
would impose any penalty or limitation on Employee Director without Employee Director’s
written consent. Neither the Corporation nor Employee Director will unreasonably withhold
its consent to any proposed settlement.

7. Advance Payments.

a. Employee Director shall be entitled to receive advance payments in the amount of
all costs, charges, and expenses, including attorney and other fees and expenses, actually
and reasonably incurred or reasonably to be incurred by Employee Director in defense of any
action, suit or proceeding as described in Section 4 hereof.

b. Employee Director agrees that the Employee Director will reimburse the Corporation
for all costs, charges and reasonable expenses paid or advanced by the Corporation in
defending any civil, criminal, administrative or investigative action, suit or proceeding
against Employee Director in the event and only to the extent that it ultimately shall be
determined in a final non-appealable determination by a court of competent jurisdiction
that Employee Director is not entitled to be indemnified by the Corporation for such costs,
charges and expenses under the provisions of this Agreement.

c. The Corporation agrees that if any party with a right to nominate the Employee
Director to a position as a director or officer of the Corporation (or any affiliate
thereof other than the Corporation) pays or causes to be paid, for any reason, any amounts
otherwise indemnifiable hereunder or under any other indemnification agreement (whether
pursuant to contract, bylaws or charter) with Employee Director, then (i) such party (or
such affiliate, as the case may be) shall be fully subrogated to all rights of Employee
Director with respect to such payment and (ii) the Corporation shall reimburse such party
(or such other affiliate) for the payments actually made.

8. Indemnification Request.

(i) Advancement.

a. Employee Director shall in order to request advanced payments according to
Section 7 hereof, submit to the Board of Directors a sworn statement of request for
advancement of expenses in the form of Exhibit 1 attached hereto and made a part hereof
(the “Advancement Request”), stating that (i) the Employee Director has incurred or
will incur actual expenses in defending an action, suit, or proceeding as described in
Section 4 hereof and (ii) the Employee Director undertakes to repay such amount if it shall
ultimately be determined in a final non-appealable determination by a court of competent
jurisdiction that the Employee Director is not entitled to be indemnified by the
Corporation under this Agreement.

b. Upon receipt of the Advancement Request the Chairman of the Board, the President or
any Vice President shall authorize immediate payment of the expenses stated in the
Advancement Request within 10 calendar days,

whereupon such payments shall immediately be made by the Corporation. No security shall be required
in connection with any Advancement Request and it shall be accepted without reference to Employee
Director’s ability to make repayment.

(ii) Indemnification.

a. Employee Director, in order to request indemnification pursuant to Section 4
hereof, shall submit to the Board of Directors a sworn statement of request for
indemnification in the form of Exhibit 2 attached hereto and made a part hereof (the
“Indemnification Request”) stating that Employee Director is entitled to
indemnification under this Agreement. Such Indemnification Request shall contain a summary
of the action, suit or proceeding and an itemized list of all payments made or to be made
with respect to which indemnification is requested.

b. The Board of Directors shall be deemed to have determined that Employee Director is
entitled to such indemnification unless, within 30 days after submission of the
Indemnification Request, the Board of Directors shall have notified Employee Director in
writing that it has determined, by a majority vote of directors who were not parties to
such action, suit or proceeding based upon clear and convincing evidence, that Employee
Director is not entitled to indemnification under this Agreement. The evidence shall be
disclosed to Employee Director in such notice which shall be sworn to by all directors who
participated in the determination and voted to deny indemnification.

c. In the event that (i) a majority vote according to Section 8.2(b) cannot be
obtained or that (ii) there is a change in control of the Corporation (other than a change
in control which has been approved by members of the Board of Directors who were directors
prior to such change in control), the following procedure shall take place:

(aa) Employee Director shall choose subject to Corporation approval (which approval shall not
be unreasonably withheld) counsel who has not performed any services for the Corporation or
Employee Director within the last five years and who is in good standing (“Independent Legal
Counsel”).

(bb) Independent Legal Counsel shall then determine within (i) thirty (30) days after
submission of the Indemnification Request, or (ii) the Independent Legal Counsel’s acceptance to
act as an Independent Legal Counsel, or (iii) such reasonable time as is required under the
circumstances, whichever comes later, whether Employee Director is entitled to indemnification
under this Agreement. Indemnification may only be denied according to Section 5 hereof and only
based upon clear and convincing evidence. In the case of a denial, Independent Legal Counsel shall
submit to the Board of Directors and to Employee Director within 10 days after the decision a
written opinion disclosing the grounds and the evidence upon which such decision was based. The
decision of Independent Legal Counsel shall be final.

d. The termination of any action, suit or proceeding by judgment, order, settlement or
conviction, or upon a plea of no contest or its equivalent, shall not, of itself, create a
presumption that Employee Director’s conduct was such that indemnity is not available
pursuant to Section 5.

9. Continuation of Indemnity. All agreements and obligations of the Corporation
contained herein shall continue during the period Employee Director is a director of the
Corporation (including service at the request of the Corporation as a director of another
corporation, partnership, joint venture, trust or other enterprise) or is a an officer of the
Corporation and shall continue thereafter so long as Employee Director shall be subject to any
possible claim or threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that Employee Director was a
director or executive officer of the Corporation or serving in any other capacity referred to
herein.

10. Enforcement.

a. The Corporation expressly confirms and agrees that it has entered into this
Agreement and assumes the obligations imposed on the Corporation hereby in order to induce
Employee Director to serve or continue to serve as a director of the Corporation and
continue to serve as executive officer of the Corporation, and acknowledges that Employee
Director is relying upon this Agreement in continuing in such capacities.

b. In the event Employee Director is required to bring any action to enforce rights or
to collect moneys due under this Agreement and is successful in such action, the
Corporation shall reimburse Employee Director for all of Employee Director’s reasonable
fees and expenses in bringing and pursuing such action.

11. Severability. If any provision of this Agreement or the application of any
provision hereof to any person or circumstance is held invalid, unenforceable or otherwise illegal,
the remainder of this Agreement and the application of such provision to other persons or
circumstances shall not be affected, and the provision so held to be invalid, unenforceable or
otherwise illegal shall be reformed to the extent (and only to the extent) necessary to make it
enforceable, valid and legal.

12. Governing Law; Binding Effect; Amendment and Termination.

a. This Agreement shall be interpreted and enforced in accordance with the laws of the
State of Delaware.

b. This Agreement shall be binding upon Employee Director and upon the Corporation,
its successors and assigns, and shall inure to the benefit of Employee Director, the
Employee Director’s heirs, personal representatives and assigns and to the benefit of the
Corporation, its successors and assigns.

c. No amendment, modification, termination or cancellation of this Agreement shall be
effective unless in writing signed by both parties hereto.

3

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day
and year first above written.

MONEYGRAM INTERNATIONAL, INC.

By:       

Name:

Title:

EMPLOYEE DIRECTOR

By:      

Name: Jeffrey Woods

4

Exhibit B

Nonqualified Stock Option Agreement

5

EXECUTION COPY

EXHIBIT B

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
     , 2009 (the “Grant Date”) between MoneyGram International, Inc., a Delaware
corporation (the “Company”), and Jeffrey Woods (the “Optionee”).

WHEREAS, in connection with the Optionee’s employment with the Company, 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;

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 four million two hundred fifty
thousand (4,250,000) 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      , 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:

	 	 	 	 	 	 	 	 	 	 	 
	Time-Vesting Date	 	Aggregate Percentage Vested Time-Based Option
	1st Anniversary of Grant Date

	 	 	 	 	20	 	 	 	%	 
	 

	 	 	 	 	 	 	 	

	2nd Anniversary of Grant Date

	 	 	 	 	40	 	 	 	%	 
	 

	 	 	 	 	 	 	 	

	3rd Anniversary of Grant Date

	 	 	 	 	60	 	 	 	%	 
	 

	 	 	 	 	 	 	 	

	4th Anniversary of Grant Date

	 	 	 	 	80	 	 	 	%	 
	 

	 	 	 	 	 	 	 	

	5th Anniversary of Grant Date

	 	 	 	 	100	 	 	 	%	 
	 

	 	 	 	 	 	 	 	

There shall be no partial vesting during any period. Except as set forth in Section 5 hereof,
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 or any of its Subsidiaries 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 at the time of the Change in Control, the per share Fair Market Value of the Common
Stock 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

(b) If at the time of the Change in Control, the per share Fair Market Value of the Common
Stock 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
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 (and the unvested portion of this Option shall be forfeited);

(ii) provide for the termination of this Option in exchange for payment to the Optionee of the
excess of (x) the aggregate Fair Market Value of the Common Stock issuable pursuant to 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 (and the unvested portion of
this Option shall be forfeited); 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 409A
of the Code and Section 4(c) of the Plan.

(c) 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 or any
of its Subsidiaries without Cause (as defined in Section 5 below) or the Optionee terminates his
employment with “Good Reason” (as such term is defined below) in connection with the Change in
Control, then any portion of Time-Based Options outstanding as of the termination of employment but
not previously vested shall automatically accelerate and become vested. “Good Reason” with
respect to the Optionee shall mean: (A) any material reduction in the Optionee’s position
(including status, offices, titles or reporting requirements), authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial or inadvertent action not
taken in bad faith; (B) any reduction of the Optionee’s base salary, or annual bonus opportunity
then in effect, unless such reduction is consistent with similar reductions applied to other senior
management of the Company, or (C) requiring the Optionee to relocate to any office or location that
is more than forty (40) miles from the Company’s corporate offices in Minneapolis, other than to
any other office or location that is within (40) miles from the location of the Company’s corporate
offices, if the Company’s corporate offices are moved (or being moved) from Minneapolis to another
location; provided that none of the events described in clauses (A), (B) and (C) shall
constitute Good Reason hereunder unless (x) the Optionee shall have given written notice to the
Company of the Optionee’s intent to terminate his employment with Good Reason within ninety (90)
days following the occurrence of any such event and (y) the Company shall have failed to remedy
such event within thirty (30) days of the Company’s receipt of such notice.

(d) For purposes of this Agreement, notwithstanding the definition of Change in Control in any
other agreement or plan that may be applicable to the Optionee, “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, together with
such holders’ affiliates and related parties, 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; provided, however, that the issuance of
securities by the Company shall not, in any event, constitute a Change in Control, and for the
avoidance of doubt a sale or other transfer or series of transfers of all or any portion of the
securities of the Company held by the Investors and their affiliates and related parties shall not
constitute a Change in Control unless such sale or transfer or series of transfers results in a
entity or group (as defined in the Exchange Act) other than the Investors and their affiliates and
related parties holding more than 50% in voting power of the outstanding securities of the Company.

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), any portion of the Option that has not been exercised on the date of the
Optionee’s termination of employment, whether vested or unvested, shall be immediately forfeited;

(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 with 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 one hundred eighty (180) days after the date of the
Optionee’s termination of employment;

(c) if the Optionee resigns without Good Reason or for any reason other than death or
Disability (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;

(d) if the Optionee’s employment with the Company or any of its Subsidiaries is terminated due
to a Disability (as defined below), any portion of the Option that has not vested on the date of
Optionee’s termination of employment and that does not vest pursuant to Section 5(f) shall be
forfeited, and any portion of the Option that has vested, or that vests pursuant to Section 5(f)
below, may be exercised until the earlier of (i) the Expiration Date and (ii) the date that is
twelve (12) months after the later of the date of the Optionee’s termination due to Disability or
the date of any subsequent vesting pursuant to Section 5(f) below; and

(e) if the Optionee’s employment with the Company or any of its Subsidiaries is terminated due
to death, any portion of the Option that has not vested on the date of Optionee’s termination of
employment and that does not vest pursuant to Section 5(f) shall be forfeited, and any portion of
the Option that has vested, or that vests pursuant to Section 5(f) below, 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 later of the date of the Optionee’s death or the date of any subsequent vesting
pursuant to Section 5(f) below.

(f) if the Optionee’s employment with the Company or any of its Subsidiaries is terminated due
to a Disability (as defined below) or death, then (x) upon such termination, the portion of such
Time-Based Option that otherwise, absent such termination, would vest during the 12-month period
following the date of such termination shall vest on the date of termination, and (y) the
Performance-Based Option shall vest through any Performance-Vesting Date that occurs during the
12-month period following the date of termination. The number of Time-Based Options deemed
exercisable upon termination shall be calculated after giving effect to the acceleration of vesting
specified in this clause (f).

Notwithstanding anything to the contrary in (d) or (e) of this Section 5, if the date on which
the Optionee ceases to be an employee of the Company or any of its Subsidiaries 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 person or persons
to whom the Optionee reports or the Board that are within the Optionees’s control and consistent
with Optionee’s status with 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 Optionee 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
misdemeanor involving moral turpitude or (z) a material violation of federal or state securities
laws, (D) an indictment of Optionee for a felony under the laws of the United States or any state
thereof, (E) Optionee’s willful misconduct or gross negligence in connection with Optionee’s duties
which could reasonably be expected to be injurious in any material respect to the financial
condition or business reputation of the Company as determined in good faith by the Board, (F)
Optionee’s material breach of the Company’s Code of Ethics, Always Honest policy or any other code
of conduct in effect from time to time to the extent applicable to Optionee, and which breach could
reasonably be expected to have a material adverse effect on the Company as determined in good faith
by the Board, or (G) Optionee’s breach of the Employee Trade Secret, Confidential Information and
Post-Employment Restriction Agreement (the “Post-Employment Restriction Agreement”) which
breach has an adverse effect on the Company.

For purposes of this Agreement, “Disability” shall mean that Optionee becomes
physically or mentally incapacitated and is therefore unable for a period of six (6) consecutive
months or for an aggregate of nine (9) months in any twenty-four (24) consecutive month period to
perform his duties. Any question as to the existence of the Disability of Optionee as to which
Optionee and the Company cannot agree shall be determined in writing by a qualified independent
physician mutually acceptable to Optionee and the Company. If Optionee and the Company cannot agree
as to a qualified independent physician, each shall appoint such a physician and those two
physicians shall select a third who shall make such determination in writing. The determination of
Disability made in writing to the Company and Optionee shall be final and conclusive for all
purposes of the Agreement

	 	6.	 	Forfeiture and Repayment Provisions.

(a) This Option shall automatically terminate on the thirty-first (31st) day following the
Grant Date if the Optionee has not, prior to such date, properly and timely executed, and delivered
to the Company, this Option and each other document required to be executed by Optionee in
connection with Optionee’s receipt of this Option.

(b) The right to exercise this Option shall be conditional upon the fact that the Optionee has
read and understood the forfeiture and repayment provisions set forth in this Section 6, that the
Optionee has not engaged in any misconduct or acts contrary to the Company as described below, and
that the Optionee has no intent to leave employment with the Company or any of its Subsidiaries for
the purpose of engaging in any activity or providing any services which are contrary to the spirit
and intent of the Post-Employment Restriction Agreement.

(c) The Company is authorized to suspend or terminate this Option and any other outstanding
stock option held by the Optionee prior to or after termination of employment if the Optionee
engages in any conduct agreed to be avoided pursuant to the Post-Employment Restriction Agreement.
If, at any time during the applicable restriction period described in the Post-Employment
Restriction Agreement, the Optionee engages in any conduct agreed to be avoided pursuant to the
Post-Employment Restriction Agreement, then any gain (without regard to tax effects) realized by
the Optionee from the exercise of this Option, in whole or in part, shall be paid by the Optionee
to the Company. The Optionee consents to the deduction from any amounts the Company or any of its
Subsidiaries owes to the Optionee to the extent of the amounts the Optionee owes the Company
hereunder.

(d) Misconduct.

(i) The Company is authorized to suspend or terminate this Option and any other outstanding
stock option held by the Optionee prior to or after termination of employment if the Company
reasonably determines that during the Optionee’s employment with the Company or any of its
Subsidiaries:

(1) The Optionee knowingly participated in misconduct that causes a misstatement of the
financial statements of the Company or any of its Subsidiaries or misconduct which represents a
material violation of any code of ethics of the Company applicable to the Optionee or of the Always
Honest compliance program or similar program of the Company; or

(2) The Optionee was aware of and failed to report, as required by any code of ethics of the
Company applicable to the Optionee or by the Always Honest compliance program or similar program of
the Company, misconduct that causes a misstatement of the financial statements of the Company or
any of its Subsidiaries or misconduct which represents a material violation of any code of ethics
of the Company applicable to the Optionee or of the Always Honest compliance program or similar
program of the Company.

(ii) If, at any time after the Optionee exercises this Option, in whole or in part, the
Company reasonably determines that the provisions of Section 6(c) applies to the Optionee, then any
gain (without regard to tax effects) realized by the Optionee from such exercise shall be paid by
the Optionee to the Company. The Optionee consents to the deduction from any amounts the Company or
any of its Subsidiaries owes to the Optionee to the extent of the amounts the Optionee owes the
Company under this Section 6.

	 	7.	 	Method of Exercising Option; Payment of Option Price; Delivery of
Purchased Shares.

(a) Subject to the terms and conditions of this Agreement, the Optionee may exercise the
Option by following the procedures established by the Company from time to time. In addition, the
Optionee may exercise the Option by written notice to the Company as provided in Section 10(l) of
this Agreement that states (i) the Optionee’s election to exercise the Option, (ii) the Grant Date
of the Option, (iii) the Option Price of the shares, (iv) the number of shares as to which the
Option is being exercised, (v) the manner of payment and (vi) the manner of payment for any income
tax withholding amount. The notice shall be signed by the Optionee or the Person or Persons
exercising the Option. The notice shall be accompanied by payment in full of the Option Price for
all shares designated in the notice. To the extent that the Option is exercised after the
Optionee’s death, the notice of exercise shall also be accompanied by appropriate proof of the
right of such Person or Persons to exercise the Option.

(b) Payment of the Option Price shall be made to the Company through one or a combination of
the following methods; provided, that in each such case, such payment method is not prohibited by,
or contrary to, any loan document to which the Company is a party:

(i) cash, in United States currency (including check, draft, money order or wire transfer made
payable to the Company);

(ii) if the Committee, in its sole discretion, allows such an exercise, by reducing the number
of shares of Common Stock otherwise deliverable upon the exercise of the Option by the number of
shares of Common Stock having an aggregate Fair Market Value on the date of exercise equal to the
aggregate Option Price; or

(iii) delivery (either actual delivery or by attestation) of shares of Common Stock acquired
by the Optionee more than six (6) months prior to the date of exercise having an aggregate Fair
Market Value on the date of exercise equal to the aggregate Option Price (only full shares of
Common Stock shall be utilized for payment purposes). The Optionee shall represent and warrant in
writing that the Optionee is the owner of the shares so delivered, free and clear of all liens,
encumbrances, security interests and restrictions, and the Optionee shall duly endorse in blank all
certificates delivered to the Company.

(c) Upon any exercise of the Option, and subject to the payment of the Option Price under
Section 7(b) and of all tax obligations under Section 8, the Company shall deliver the shares
purchased in book entry form. The shares purchased shall be registered in the name of the Optionee,
the Optionee’s transferee, or if the Optionee so requests, in writing at the time of exercise,
jointly in the name of the Optionee and another person with rights of survivorship. If the Optionee
dies, the shares purchased shall be registered in the name of the person entitled to exercise the
Stock Option in accordance with the Plan.

8. Taxes; Accounting Treatment. 

(a) The Optionee acknowledges that the Optionee will consult with his personal tax adviser
regarding the income tax consequences of exercising the Option or any other matters related to this
Agreement. If the Optionee is employed by the Company or any of its Subsidiaries, in order to
comply with all applicable federal, state, local or foreign income tax laws or regulations, the
Company may take such action as it deems appropriate to ensure that all applicable federal, state,
local or foreign payroll, withholding, income or other taxes, which are the Optionee’s sole and
absolute responsibility, are withheld or collected from the Optionee.

(b) In accordance with the terms of the Plan, and such rules as may be adopted by the
Committee, the Optionee may elect to satisfy any applicable tax withholding obligations arising
from the exercise of the Option by (i) delivering cash (including check, draft, money order or wire
transfer made payable to the order of the Company), or (ii) delivering to the Company shares of
Common Stock acquired by the Optionee more than six (6) months prior to the date of exercise having
a Fair Market Value equal to the amount of such taxes (only full shares of Common Stock shall be
utilized for payment purposes) in accordance with the provisions set forth in Section 7(b)(ii);
provided, that in each such case, such method for satisfying the applicable tax withholding
obligations is not prohibited by, or contrary to, any loan document to which the Company is a
party. The Optionee’s election must be made on or before the date that the amount of tax to be
withheld is determined.

(c) The Company acknowledges and agrees that for tax and accounting purposes, the Option will
be treated the same as all other non-qualified stock options issued by the Company that contain
substantially the same performance vesting features.

9. Adjustments. 

In the event that the Company engages in a transaction such that any dividend or other
distribution (whether in the form of cash, shares of Common Stock, other securities or other
property), recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase or exchange of shares or other
securities of the Company, issuance of warrants or other rights to purchase shares or other
securities of the Company or other similar corporate transaction or event affects the shares
covered by the Option, in order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under this Agreement, the terms of this Option (including,
without limitation, the number and kind of shares subject to this Option and the Option Price)
shall be adjusted as set forth in Section 4(c) of the Plan.

Upon a Change in Control, the Committee may, in its sole discretion, adjust the terms of this
Option (including, without limitation, the number and kind of shares subject to this Option and the
Option Price) by taking any of the actions permitted under this Agreement and in accordance with
Section 4(c) of the Plan.

10. General Provisions. 

(a) Interpretations. This Agreement is subject in all respects to the terms of the
Plan. A copy of the Plan is available upon the Optionee’s request. Terms used herein which are
defined in the Plan shall have the respective meanings given to such terms in the Plan, unless
otherwise defined herein. In the event that any provision of this Agreement is inconsistent with
the terms of the Plan, the terms of the Plan shall govern. Any question of administration or
interpretation arising under this Agreement shall be determined by the Committee, and such
determination shall be final, conclusive and binding upon all parties in interest.

(b) No Rights as a Shareholder. Neither the Optionee nor the Optionee’s legal
representatives shall have any of the rights and privileges of a shareholder of the Company with
respect to the shares of Common Stock subject to the Option unless and until such shares are issued
upon exercise of the Option. Except as expressly provided by the Plan, no adjustment shall be made
for dividends or other rights for which the record date is prior to the issuance of any purchased
shares and the delivery of any certificate or certificates for such shares.

(c) No Right to Employment. Nothing in this Agreement or the Plan shall be construed
as giving the Optionee the right to be retained as an employee of the Company or any of its
Subsidiaries. In addition, the Company or any of its Subsidiaries, as applicable, may at any time
dismiss the Optionee from employment, free from any liability or any claim under this Agreement,
unless otherwise expressly provided in this Agreement.

(d) Termination of the Plan; No Right to Future Grants. By entering into this
Agreement, the Optionee acknowledges: (a) that the Plan is discretionary in nature and may be
suspended or terminated by the Company at any time; (b) that each grant of an option is a one-time
benefit which does not create any contractual or other right to receive future grants of options,
or benefits in lieu of options; (c) that all determinations with respect to any such future grants,
including, but not limited to, the times when the option shall be granted, the number of shares
subject to each option, the Option Price, and the time or times when each option shall be
exercisable, will be at the sole discretion of the Company; (d) that the Optionee’s participation
in the Plan is voluntary; (e) that the Option is not part of normal and expected compensation for
purposes of calculating any severance, resignation, bonuses, pension or retirement benefits or
similar payments; (g) that the right to purchase Common Stock ceases upon termination of employment
for any reason except as may otherwise be explicitly provided in the Plan or this Agreement; (h)
that the future value of the Option is unknown and cannot be predicted with certainty; (i) that if
the underlying shares do not increase in value, the Option will have no value; and (j) the
foregoing terms and conditions apply in full with respect to any prior option grants to the
Optionee.

(e) Option Not Transferable.

(i) Except as otherwise provided by the Plan or by the Committee, the Option shall not be
transferable other than by will or by the laws of descent and distribution and the Option shall be
exercisable during the Optionee’s lifetime only by the Optionee or, if permissible under applicable
law, by the Optionee’s guardian or legal representative. The Option may not be pledged, alienated,
attached or otherwise encumbered, and any purported pledge, alienation, attachment or encumbrance
of the Option shall be void and unenforceable against the Company or any Subsidiaries of the
Company.

(ii) None of the purchased shares acquired pursuant to the exercise of this Option shall be
assigned, transferred, pledged, hypothecated, given away or in any other manner disposed of or
encumbered, whether voluntarily or by operation of law, unless such transfer is in compliance with
all applicable securities laws (including, without limitation, the Securities Act of 1933, as
amended.

(f) Reservation of Shares. The Company shall at all times during the term of the
Option reserve and keep available such number of shares of Common Stock as will be sufficient to
satisfy the requirements of this Agreement.

(g) Securities Matters. The Company shall not be required to deliver any shares of
Common Stock until the requirements of any federal or state securities or other laws, rules or
regulations (including the rules of any securities exchange) as may be determined by the Company to
be applicable are satisfied.

(h) Assignment. Neither this Agreement nor any right, remedy, obligation or liability
arising hereunder or by reason hereof shall be assignable by the Optionee.

(i) Successors and Assigns; No Third Party Beneficiaries. This Agreement shall inure
to the benefit of and be binding upon the Company and the Optionee and their respective heirs,
successors, legal representatives and permitted assigns. Nothing in this Agreement, expressed or
implied, is intended to confer on any Person other than the Company and the Optionee, and their
respective heirs, successors, legal representatives and permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.

(j) Headings. Headings are given to the sections and subsections of this Agreement
solely as a convenience to facilitate reference. Such headings shall not be deemed in any way
material or relevant to the construction or interpretation of this Agreement or any provision
hereof.

(k) Governing Law; Arbitration. The internal law, and not the law of conflicts, of the
State of Minnesota will govern all questions concerning the validity, construction and effect of
this Agreement. Any controversy, dispute or claim arising under or in connection with this
Agreement (including, without limitation, the existence, validity, interpretation or breach hereof
and any claim based on contract, tort or statute) shall be resolved by a binding arbitration, to be
held in Minneapolis, Minnesota pursuant to the Federal Arbitration Act and in accordance with the
then-prevailing National Rules of Resolution of Employment Disputes of the American Arbitration
Association (the “AAA”). The AAA shall select a sole arbitrator. Each party shall bear its
own expenses incurred in connection with arbitration and the fees and expenses of the arbitrator
shall be shared equally by the parties involved in the dispute and advanced by them from time to
time as required. It is the mutual intention and desire of the parties that the arbitrator be
chosen as expeditiously as possible following the submission of the dispute to arbitration. Once
such arbitrator is chosen, and except as may otherwise be agreed in writing by the parties involved
in such dispute or as ordered by the arbitrator upon substantial justification shown, the hearing
for the dispute will be held within sixty (60) days of submission of the dispute to arbitration.
The arbitrator shall render his or her final award within sixty (60) days, subject to extension by
the arbitrator upon substantial justification shown of extraordinary circumstances, following
conclusion of the hearing and any required post-hearing briefing or other proceedings ordered by
the arbitrator. Any discovery in connection with arbitration hereunder shall be limited to
information directly relevant to the controversy or claim in arbitration. The arbitrator will state
the factual and legal basis for the award. The decision of the arbitrator in any such proceeding
will be final and binding and not subject to judicial review and final judgment may be entered upon
such an award in any court of competent jurisdiction, but entry of such judgment will not be
required to make such award effective. Any action against any party hereto ancillary to
arbitration, including any action for provisional or conservatory measures or action to enforce an
arbitration award or any judgment entered by any court in respect of any thereof may be brought in
any federal or state court of competent jurisdiction location within the State of Minnesota, and
the parties hereto hereby irrevocably submit to the non-exclusive jurisdiction of any federal or
state court located within the State of Minnesota over any such action. The parties hereby
irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may
now or hereafter have to the laying of venue of any such action brought in such court or any
defense of inconvenient forum for the maintenance of such action. Each of the parties hereto agrees
that a judgment in any such action may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law.

(l) Notices. The Optionee should send all written notices regarding this Agreement or
the Plan to the Company at the following address:

MoneyGram International, Inc.

EVP, General Counsel & Secretary

1550 Utica Avenue South, MS GHQ 8020

Minneapolis, MN 55416

(m) Amendments. The Company may amend this Agreement at any time; provided that,
subject to Section 9 hereof and Section 7 of the Plan, no such amendment, alteration, suspension,
discontinuation or termination shall be made without the Optionee’s consent, if such action would
materially diminish any of the Optionee’s rights under this Agreement; provided, however, the
Company may amend this Agreement in such manner as it deems necessary to comply with applicable
laws.

(n) Entire Agreement. This Agreement and the Plan and the other agreements referred to
herein and therein and any schedules, exhibits and other documents referred to herein and therein
constitute the entire agreement and understanding among the parties hereto in respect of the
subject matter hereof and thereof and supersede all prior and contemporaneous arrangements,
agreements and understandings, both oral and written, whether in term sheets, presentations or
otherwise, among the parties hereto, or between any of them, with respect to the subject matter
hereof and thereof.

(o) Severability. If any provision of this Agreement is invalid, illegal, or incapable
of being enforced by any law, all other provisions of this Agreement shall remain in full force and
effect so long as the economic and legal substance of the transactions contemplated hereby are not
affected in any manner materially adverse to any party. If any provision of this Agreement is held
to be invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the parties as closely as
possible in order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.

(p) Optionee Undertaking. The Optionee agrees to take such additional action and
execute such additional documents the Company may deem necessary or advisable to carry out or
effect one or more of the obligations or restrictions imposed either on the Optionee or upon this
Option pursuant to the provisions of this Agreement.

(q) Counterparts. For the convenience of the parties and to facilitate execution, this
Agreement may be executed in two or more counterparts, each of which shall be deemed an original,
but all of which shall constitute one and the same document.

(r) Confidentiality. The Optionee agrees to maintain the confidentiality of the
existence and terms of this Option; provided, however, that the Optionee may
disclose, on a confidential basis, the existence and terms of this Option to his spouse, accountant
and legal counsel and to the extent required by law or legal process.

* * * * * * * *

6

By signing below, the Optionee accepts this Option and the terms and conditions in this
Agreement and the Plan.

MONEYGRAM INTERNATIONAL, INC.

By:

Title:

OPTIONEE

Signature:

Print Name: Jeffrey Woods

[THIS IS THE SIGNATURE PAGE TO THE NON-QUALIFIED STOCK OPTION AGREEMENT BETWEEN THE

ABOVE-REFERENCED PARTIES]

7

Exhibit C

Severance Agreement

8

EXECUTION COPY

EXHIBIT C

SEVERANCE AGREEMENT

SEVERANCE AGREEMENT (the “Agreement”) dated as of      , 2009 by and between
MoneyGram International, Inc., a Delaware corporation (together with its direct and indirect
subsidiaries, successors and permitted assigns under this Agreement, the “Company”) and
Jeffrey Woods (“Executive”).

The Company will employ Executive as its Executive Vice President and Chief Financial Officer
effective as of the date hereof;

Executive’s employment with the Company is at-will;

The Company is willing to provide Executive with severance benefits described in this
Agreement and the benefits provided by the MoneyGram International, Inc. 2005 Omnibus Incentive
Plan Non-Qualified Stock Option Agreement (“Option Agreement”) as consideration for
Executive’s agreement to provide services to the Company and Executive’s agreement to enter into an
Employee Trade Secret, Confidential Information and Post-Employment Restriction Agreement.

In consideration of the promises and mutual covenants herein and for other good and valuable
consideration, the receipt and sufficiency of which is mutually acknowledged, the parties agree as
follows:

	 	1.	 	Definitions. 

(a) “Cause” shall mean (A) Executive’s willful refusal to carry out, in all material
respects, the reasonable and lawful directions of the person or persons to whom the Executive
reports or the Board of Directors of the Company (the “Board”) that are within Executive’s
control and consistent with Executive’s status with the Company and his duties and responsibilities
hereunder (except for a failure that is attributable to Executive’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 Executive’s duties hereunder, (C) an act or acts
on Executive’s part constituting (x) a felony under the laws of the United States or any state
thereof, (y) a misdemeanor involving moral turpitude or (z) a material violation of federal or
state securities laws, (D) an indictment of Executive for a felony under the laws of the United
States or any state thereof, (E) Executive’s willful misconduct or gross negligence in connection
with Executive’s duties which could reasonably be expected to be injurious in any material respect
to the financial condition or business reputation of the Company as determined in good faith by the
Board, (F) Executive’s material breach of the Company’s Code of Ethics, Always Honest policy or any
other code of conduct in effect from time to time to the extent applicable to Executive, and which
breach could reasonably be expected to have a material adverse effect on the Company as determined
in good faith by the Board, or (G) Executive’s breach of the Employee Trade Secret, Confidential
Information and Post-Employment Restriction Agreement which breach has an adverse effect on the
Company.

(b) “Disability” shall exist if Executive becomes physically or mentally incapacitated
and is therefore unable for a period of six (6) consecutive months or for an aggregate of nine (9)
months in any twenty-four (24) consecutive month period to perform Executive’s duties. Any question
as to the existence of the Disability of Executive as to which Executive and the Company cannot
agree shall be determined in writing by a qualified independent physician mutually acceptable to
Executive and the Company. If Executive and the Company cannot agree as to a qualified independent
physician, each shall appoint such a physician and those two physicians shall select a third who
shall make such determination in writing. The determination of Disability made in writing to the
Company and Executive shall be final and conclusive for all purposes of the Agreement.

(c) “Good Reason” shall mean: (A) any material reduction in Executive’s position
(including status, offices, titles or reporting requirements), authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial or inadvertent action not
taken in bad faith; (B) any reduction of Executive’s base salary, or annual bonus opportunity then
in effect, unless such reduction is consistent with similar reductions applied to other senior
management of the Company, or (C) requiring Executive to relocate to any office or location that is
more than forty (40) miles from the Company’s corporate offices in Minneapolis, other than to any
other office or location that is within (40) miles from the location of the Company’s corporate
offices, if the Company’s corporate offices are moved (or being moved) from Minneapolis to another
location; provided that none of the events described in clauses (A), (B) and (C) shall
constitute Good Reason hereunder unless (x) Executive shall have given written notice to the
Company of Executive’s intent to terminate his employment with Good Reason within ninety (90) days
following the occurrence of any such event and (y) the Company shall have failed to remedy such
event within thirty (30) days of the Company’s receipt of such notice.

2. At-Will Employment. Executive’s employment is at-will and may be terminated by
either Executive or Company at any time and for any reason.

3. Termination by the Company without Cause or by Executive with Good Reason. If
Executive’s employment is terminated by the Company without Cause (other than by reason of death or
Disability) or Executive terminates his employment with Good Reason, Executive shall be entitled to
receive the following payments, each of which shall at all times be made so as to satisfy the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”):

(a) Salary Severance. A sum equal to Executive’s then current monthly base salary multiplied
by twelve, which, subject to Section 5 hereof, shall be payable in equal monthly installments on
the last day of each month over the twelve (12)-month period following the date of termination of
employment and in accordance with the Company’s normal payroll practices in effect as of the date
of Executive’s termination of employment;

(b) Bonus Severance. Provided that the Company actually achieves performance goals for the
applicable performance period necessary for participants in the Company’s Management Incentive Plan
(the “MIP”) to receive cash bonuses pursuant to the MIP with respect to such performance
period and that such cash bonuses are actually paid, a sum equal to a pro rata portion (based on
the period between the beginning of the applicable performance period and the date of termination
of Executive’s employment) of Executive’s cash bonus (up to Executive’s cash bonus at target level)
under the MIP payable for the year in which the termination of employment occurs, which, subject to
Section 5 hereof, shall be paid in a lump sum payable when such cash bonus under the MIP is
regularly paid to other MIP participants for such year, and which amount shall in no event exceed a
pro rata portion of Executive’s annual target incentive opportunity for such year under the MIP;
and

(c) Health and Life Insurance. Subject to Section 5 hereof, continuation of Executive’s health
insurance coverage (including coverage for Executive’s dependents to the extent covered prior to
Executive’s termination of employment) and life insurance coverage for a period of one year
following Executive’s termination of employment.

Executive acknowledges and agrees that Executive shall not be entitled to any payment or other
benefit pursuant to this Agreement in the event Company terminates Executive’s employment for Cause
or in the event Executive resigns his employment for any reason other than Good Reason or in the
event of Executive’s death or Disability.

Executive acknowledges and agrees that as a condition precedent to receiving any payments
pursuant to this Severance Agreement, Executive shall have executed, within twenty-one (21) days,
or if required for an effective release, forty-five (45) days, following Executive’s termination of
employment, a waiver and release substantially in the form attached hereto as Exhibit A and
the applicable revocation period set forth in such release shall have expired.

4. Miscellaneous. 

(a) No Duplication. Executive acknowledges and agrees that Executive shall not be entitled to
receive any separation payments under any other Company’s severance or similar policies.

(b) Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of Minnesota, without regard to conflicts of laws principles thereof, to the
extent Minnesota laws are not preempted by the Employee Retirement Income Security Act of 1974.

(c) Severance Pay Plan Statement. Subject to Section 5 hereof, this Agreement shall be
administered and interpreted in accordance with the MoneyGram International, Inc. Severance Pay
Plan Statement.

(d) Entire Agreement/Amendments. This Agreement and the other agreements, plans and documents
referenced herein contain the entire understanding of the parties with respect to the provision of
any severance rights, payments or benefits by Company to Executive. If any provision of any
agreement, plan, program, policy, arrangement or other written document between or relating to the
Company and Executive conflicts with any provision of this Agreement, the provision of this
Agreement shall control and prevail. This Agreement may not be altered, modified, or amended except
by written instrument signed by the parties hereto.

(e) No Waiver. The failure of a party to insist upon strict adherence to any term of this
Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such
party of the right thereafter to insist upon strict adherence to that term or any other term of
this Agreement.

(f) Severability. In the event that any one or more of the provisions of this Agreement shall
be or become invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions of this Agreement shall not be affected thereby.

(g) Survivorship. The respective rights and obligations of the parties hereunder shall survive
any termination of Executive’s employment to the extent necessary to preserve such rights and
obligations.

(h) Successors; Binding Agreement. This Agreement shall inure to the benefit of and be binding
upon personal or legal representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.

(i) Notice. For the purpose of this Agreement, notices and all other communications provided
for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered
by hand or overnight courier or three days after it has been mailed by United States registered
mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth
below in this Agreement, or to such other address as either party may have furnished to the other
in writing in accordance herewith, except that notice of change of address shall be effective only
upon receipt.

If to the Company:

MoneyGram International, Inc.

1550 Utica Avenue South, Suite 100

Minneapolis, Minnesota 55416

Attention: Chairman of the Human Resources and Nominating Committee of the Board

If to Executive:

To the most recent address of Executive set forth in the personnel records of the Company.

(j) Withholding Taxes. The Company may withhold from any amounts payable under this Agreement
such Federal, state and local taxes as may be required to be withheld pursuant to any applicable
law or regulation.

(k) Counterparts. This Agreement may be signed in counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon the same
instrument.

5. Code Section 409A. 

(a) The parties agree that this Agreement shall be interpreted to comply with or be exempt
from Section 409A of the Code and the regulations and guidance promulgated thereunder to the extent
applicable (collectively “Code Section 409A”), and all provisions of this Agreement shall
be construed in a manner consistent with the requirements for avoiding taxes or penalties under
Code Section 409A. In no event whatsoever will the Company be liable for any additional tax,
interest or penalties that may be imposed on Executive under Code Section 409A or any damages for
failing to comply with Code Section 409A.

(b) A termination of employment shall not be deemed to have occurred for purposes of any
provision of this Agreement providing for the payment of any amounts or benefits subject to Code
Section 409A upon or following a termination of employment unless such termination is also a
“separation from service” within the meaning of Code Section 409A and, for purposes of any such
provision of this Agreement, references to a “termination,” “termination of employment” or like
terms shall mean “separation from service.” If Executive is deemed on the date of termination to
be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then
with regard to any payment or the provision of any benefit that is otherwise considered deferred
compensation under Code Section 409A payable on account of a “separation from service,” such
payment or benefit shall be made or provided at the date which is the earlier of (i) the expiration
of the six (6)-month period measured from the date of such “separation from service” of Executive,
and (ii) the date of Executive’s death (the “Delay Period”). Upon the expiration of the
Delay Period, all payments and benefits delayed pursuant to this Section 5(b) shall be paid
or reimbursed to Executive in a lump sum, and any remaining payments and benefits due under this
Agreement shall be paid or provided in accordance with the normal payment dates specified for them
herein.

c. Notwithstanding anything to the contrary contained in this Agreement, all reimbursements
for costs and expenses under this Agreement shall be paid in no event later than the end of the
calendar year following the calendar year in which Executive incurs such expense. With regard to
any provision herein that provides for reimbursement of costs and expenses or in-kind benefits,
except as permitted by Code Section 409A, (i) all such expenses or reimbursements shall be made in
any event on or prior to the last day of the taxable year following the taxable year in which such
expenses were incurred by Executive, (ii) the right to reimbursement or in-kind benefits shall not
be subject to liquidation or exchange for another benefit, and (iii) the amount of expenses
eligible for reimbursements or in-kind benefits provided during any taxable year shall not affect
the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable
year, provided, however, that the foregoing clause (iii) shall not be violated with regard to
expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such
expenses are subject to a limit related to the period the arrangement is in effect.

d. For purposes of Code Section 409A, Executive’s right to receive any installment payments
pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct
payments.

[SIGNATURE PAGE FOLLOWS]

9

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written.

MONEYGRAM INTERNATIONAL, INC.

By:

Title:

EXECUTIVE

Signature:

Jeffrey Woods

[SIGNATURE PAGE TO THE SEVERANCE AGREEMENT

BETWEEN THE ABOVE-REFERENCED PARTIES]

10

Exhibit A

RELEASE

This RELEASE (“Release”) is dated as of                             between
MoneyGram International, Inc., a Delaware corporation (together with its direct and indirect
subsidiaries, successors and assigns, the “Company”), and Jeffrey Woods
(“Executive”).

WHEREAS, the Company and Executive previously entered into a Severance Agreement dated July
     , 2009 (the “Severance Agreement”); and

WHEREAS, Executive’s employment with the Company (has been) (will be) terminated effective
                                ; and

WHEREAS, pursuant to the Severance Agreement, Executive is entitled to certain compensation
and benefits upon such termination, contingent upon the execution of this Release;

NOW, THEREFORE, in consideration of the premises and mutual agreements contained herein and in
the Severance Agreement, to which Executive understands and acknowledges he may not otherwise be
entitled without executing this Release, the Company and Executive agree as follows:

1. Executive, on his own behalf and on behalf of his heirs, estate and beneficiaries, hereby
releases and forever discharges the Company, 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:

	 	a.	 	All claims arising out of or relating to Executive’s employment with the
Company and/or Executive’s separation from that employment.

	 	b.	 	All claims arising out of or relating to the statements, actions, or
omissions of the Released Parties.

	 	c.	 	All claims for any alleged unlawful discrimination, harassment, retaliation
or reprisal, or other alleged unlawful practices arising under any federal, state, or
local statute, ordinance, or regulation, including without limitation, claims under
Title VII of the Civil Rights Act of 1964, as amended; the Age Discrimination in
Employment Act of 1967, as amended; the Americans with Disabilities Act of 1990, as
amended; the Family and Medical Leave Act of 1993; the Equal Pay Act of 1963; the
Worker Adjustment and Retraining Notification Act; the Employee Retirement Income
Security Act of 1974; the Fair Credit Reporting Act; the Minnesota Human Rights Act,
any other federal, state or local anti-discrimination acts, state wage payment
statutes and non-interference or non-retaliation statutes.

	 	d.	 	All claims for alleged wrongful discharge; breach of contract; breach of
implied contract; failure to keep any promise; breach of a covenant of good faith and
fair dealing; breach of fiduciary duty; promissory estoppel; Executive’s activities,
if any, as a “whistleblower”; defamation; infliction of emotional distress; fraud;
misrepresentation; negligence; harassment; retaliation or reprisal; constructive
discharge; assault; battery; false imprisonment; invasion of privacy; interference
with contractual or business relationships; any other wrongful employment practices;
and violation of any other principle of common law.

	 	e.	 	All claims for compensation of any kind, including without limitation,
commission payments, bonus payments, vacation pay, expense reimbursements,
reimbursement for health and welfare benefits, and perquisites.

	 	f.	 	All claims for back pay, front pay, reinstatement, other equitable relief,
compensatory damages, damages for alleged personal injury, liquidated damages, and
punitive damages.

	 	g.	 	All claims for attorneys’ fees, costs, and interest.

2. The Company acknowledges and agrees that Executive does not release any claims that the law
does not allow to be waived by private agreement.

3. Executive acknowledges and agrees that even though claims and facts in addition to those
now known or believed by him to exist may subsequently be discovered, it is his intention to fully
settle and release all claims he may have against the Company and the persons and entities
described above, whether known, unknown or suspected.

4. Executive relinquishes any right to future employment with the Company and the Company
shall have the right to refuse to re-employ Executive, in each case without liability of Executive
or the Company.

5. Executive reaffirms his agreement to the Employee Trade Secret, Confidential Information
and Post-Employment Restriction Agreement to which Executive is a party.

6. Executive acknowledges that he has been provided at least twenty-one (21) days to review
the Release and has been advised to review it with an attorney of his choice and at his own
expense. In the event Executive elects to sign this Release Agreement prior to this twenty-one
(21) day period, he agrees that it is a knowing and voluntary waiver of his right to wait the full
twenty-one (21) days. Executive further understands that he has fifteen (15) days after the
signing hereof to revoke it by so notifying the Company in writing, such notice to be received by
              within the fifteen (15) day period. Executive further acknowledges that he
has carefully read this Release, knows and understands its contents and its binding legal effect.
Executive acknowledges that by signing this Release, he does so of his own free will and act and
that it is his intention that he be legally bound by its terms. Executive acknowledges that in
deciding whether to sign this Release, he has not relied upon any statements made by the Company or
its agents. Executive further acknowledges that he has not relied on any legal, tax or accounting
advice from the Company or its agents in deciding whether to sign this Release.

7. This Release shall be construed and enforced in accordance with, and governed by, the laws
of the State of Minnesota, without regard to principles of conflict of laws. If any clause of this
Release should ever be determined to be unenforceable, it is agreed that this will not affect the
enforceability of any other clause or the remainder of this Release.

11

IN WITNESS WHEREOF, the parties have executed this Release on the date first above written.

MONEYGRAM INTERNATIONAL, INC.

By: 

Name:

Title:

Jeffrey Woods

12

Exhibit D

Employee Trade Secret, Confidential Information

and Post-Employment Restriction Agreement

13

EXECUTION COPY

EXHIBIT D

EMPLOYEE TRADE SECRET, CONFIDENTIAL INFORMATION

AND POST-EMPLOYMENT RESTRICTION AGREEMENT

	 
	Employee:

	Jeffrey Woods

Employer: MoneyGram International, Inc., including its direct and indirect subsidiaries,
affiliates, predecessors, successors and permitted assigns.

Effective as of the date on which Employee signs this Agreement, Employee agrees as follows:

	1.	 	Acknowledgments.

1.1 Employer is currently engaged in the following businesses:

(a) providing payment services through independent agents and Employer-owned retail locations
in the United States and internationally, which payment services include, but are not limited to,
money transfers, money orders, bill payment services, stored value cards and related products and
services;

(b) providing payment services via the Internet, kiosks, automated teller machines and other
unmanned media in the United States and internationally, which payment services include, but are
not limited to, money transfers, money orders, bill payment services, stored value cards and
related products and services;

(c) providing bill payment services in the United States and internationally to industries
that include, but are not limited to, the credit card, debit card, mortgage, automobile finance,
telecommunications, satellite television, cable television, property management and collection
industries;

(d) processing of official checks and provision of related services for financial
institutions, either directly or through trusts or other business entities; and

(e) providing banking and processing services for payments such as rebates/refunds, gift
certificates and government payments.

1.2 Employer conducts its business and is engaged in competition in a nationwide market; in
the case of its money transfer businesses, Employer’s business and competition are conducted
globally.

1.3 Employer desires to protect its legitimate proprietary interests, including but not
limited to its confidential business information and trade secrets.

	2.	 	Consideration.

Employee acknowledges that for and in consideration of the agreements and covenants made
herein, Employer has agreed to (i) award a non-qualified stock option (“Option”) to Employee
pursuant to a MoneyGram International, Inc. 2005 Omnibus Incentive Plan Non-Qualified Stock Option
Agreement (“Option Agreement”) and (ii) enter into a Severance Agreement (“Severance Agreement”)
with Employee.

Employee further acknowledges that he has had an opportunity to review this Agreement, the
Severance Agreement and the Option Agreement in their entirety and to consult with Employee’s
attorney and other advisors prior to signing this Agreement.

	3.	 	Trade Secrets and Confidential Information and Related Covenants.

3.1 During the course of Employee’s employment, he has had and will have access to and gain
knowledge of the highly confidential and proprietary information (“Confidential Information”) and
trade secrets which are the property of Employer, or which Employer is under an obligation not to
disclose, including but not necessarily limited to the following: information regarding the
Employer’s clients and prospective clients, information regarding Employer’s development of
enhanced or new payment services, the financial terms of Employer’s contracts and proposed
contracts, the expiration dates of such contracts, the key contact individuals at each client
location, the transaction volume and business features of each client and/or location, business
plans, marketing plans and financials, reports, data, figures, margins, statistics, analyses and
other related information, and any other information of whatever nature which gives Employer an
opportunity to obtain a competitive advantage over its competitors who do not know or use it. In
addition, Employer’s Confidential Information and trade secrets include the means by which Employer
provides its services including but not limited to its organizational structure, technology,
management systems, software and computer systems.

3.2 Employee agrees to use best efforts and the utmost diligence to guard and protect
Employer’s trade secrets and Confidential Information, and Employee agrees that Employee will not,
during or after the period of Employee’s employment by Employer, use or disclose, directly or
indirectly, any of Employer’s trade secrets or Confidential Information which Employee may develop,
obtain or learn about during or as a result of Employee’s employment by Employer, unless previously
authorized to do so by Employer in writing. Employee acknowledges that the Confidential Information
and trade secrets are owned and shall continue to be owned by the Employer and that misuse,
misappropriation or disclosure of this information could cause irreparable harm to Employer both
during and after the term of Employee’s employment.

	4.	 	Post-Employment Competitive Activities and Related Covenants.

4.1 Definitions: For purposes of Section 4, the following terms have the meanings
indicated:

(a) A “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
Employer or which is under development by Employer or the subject of a pending acquisition or
license by Employer or as to which Employer is actively negotiating to provide services through a
business alliance relationship, and

(i) which Employee either worked on, performed or sold during his last twenty-four (24) months
of employment by Employer; or

(ii) about which Employee acquired Confidential Information as a result of his employment by
Employer.

(b) A “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 Employee) 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.

(c) A “Specific Conflicting Organization” shall mean the businesses identified in Section 4.3.

(d) A “Customer” means any current customer or agent or any prospective or former customer or
agent of Employer with which Employee had any contact or about which Employee had access to
Confidential Information or trade secrets at any time during the twenty-four (24) months preceding
Employee’s termination of employment with Employer.

4.2 Employment with a Conflicting Organization. Employee agrees that, for a period of
twelve (12) months following Employee’s termination of employment, and in exchange for the
consideration described in Section 2 of this Agreement, he shall not accept employment or otherwise
render services as an employee, trustee, principal, agent, consultant, partner, director, officer
or substantial stockholder of any Conflicting Organization (as defined above) unless Employee first
obtains written consent to such engagement from Employer.

4.3 Employment with Specific Conflicting Organizations. In addition to the
restrictions imposed upon Employee with respect to employment with a Conflicting Organization
described in Section 4.2, Employee acknowledges that, in consideration of the particular nature and
scope of the business of The Western Union Company, Fiserv, Inc., Euronet Worldwide, Global
Payments, Inc., Coinstar, Inc. and Walmart Stores, Inc. (collectively, “Specific Conflicting
Organizations”), those businesses’ intersection with Employer’s core business and market
strategies, and Employee’s key responsibilities for Employer, Employee agrees that, for a period of
twelve (12) months following Employee’s termination of employment, in exchange for the
consideration described in Section 2 of this Agreement, Employee shall not accept employment or
otherwise render services as an employee, trustee, principal, agent, consultant, partner, director,
officer or substantial stockholder of any Specific Conflicting Organization, or any of its/their
subsidiaries, affiliates, or related companies, unless Employee first obtains written consent to
such engagement from Employer.

4.4 Interference with Existing Employment or Similar Relationships. During and for a
period of twelve (12) months after termination of his employment with Employer, Employee will not,
whether on Employee’s own behalf or on behalf of or in conjunction with any person, firm,
partnership, joint venture, association, corporation or other business organization, entity or
enterprise whatsoever, directly or indirectly hire or cause any third party to hire, recruit,
solicit or induce any employee, contractor, consultant or representative of Employer to terminate
his, her or its relationship with the Employer. Employee further agrees that, during such time, if
a person who is employed by Employer contacts Employee about prospective employment, Employee will
inform such person that Employee cannot discuss the matter without informing Employer and obtaining
permission for such discussions in writing from Employer.

4.5 Interference with Customer Relationships. During and for a period of twelve (12)
months after termination of his employment with Employer, Employee will not, whether on Employee’s
own behalf or on behalf of or in conjunction with any person, firm, partnership, joint venture,
association, corporation or other business organization, entity or enterprise whatsoever, directly
or indirectly interfere with, attempt to influence or otherwise affect Employer’s commercial
relationships with any Customer (as defined above). Employee further agrees that, during such time,
if a Customer contacts Employee about discontinuing business with Employer or otherwise changing an
existing commercial relationship with Employer, Employee will inform such Customer that Employee
cannot discuss the matter without informing Employer and obtaining permission for such discussions
in writing from Employer.

4.6 Remedies.

(a) Injunctive Relief. Employee acknowledges that the damages which may arise from a
breach of Sections 4.2, 4.3, 4.4 and/or 4.5 of this Agreement are irreparable and difficult to
prove with certainty. If any covenant contained in Sections 4.2, 4.3, 4.4 and/or 4.5 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 Employer), Employer shall be entitled to an immediate injunction
from a court of competent jurisdiction to end such breach, without further proof of damage. The
parties agree that the venue for such action shall be Minneapolis, Minnesota, and Minnesota law
shall govern this Agreement and any proceedings to enforce it. Employer shall be entitled to
reimbursement from Employee of its costs and expenses, including reasonable attorneys’ fees,
incurred in enforcing this Agreement.

(b) Forfeiture and Repayment.

(i) Pursuant to Section 6 of the Option Agreement, Employer is authorized to suspend or
terminate the Option and any other outstanding stock option held by the Employee prior to or after
termination of employment if Employee engages in any conduct agreed to be avoided pursuant to any
of the covenants contained in sections 4.2, 4.3, 4.4 and/or 4.5 of this Agreement. Further, if at
any time within twelve (12) months after the date of Employee’s termination of employment, Employee
engages in any conduct agreed to be avoided pursuant to any of the covenants contained in sections
4.2, 4.3, 4.4 and/or 4.5 of this Agreement, then any gain (without regard to any tax effects)
realized by the Employee from the exercise of the Option, in whole or in part, shall be paid by
Employee to Employer, and the Employee consents to the deduction from any amounts Employer owes to
the Employee to the extent of the amounts the Employee owes the Employer under Section 6 of the
Option Agreement and this Section. Employee agrees to make such payment within thirty (30) days of
receipt of a written demand received from Employer pursuant to this Section.

(ii) Employee agrees that Employer shall be entitled to initiate judicial proceedings seeking
the payment described in Section 4.6(b)(i) if Employee fails or otherwise refuses to make such
payment upon receiving written notice from Employer of the obligation to repay. The parties agree
that the venue for such action shall be Minneapolis, Minnesota, and Minnesota law shall govern this
Agreement and any proceedings to enforce it. Employer shall be entitled to reimbursement from
Employee of its costs and expenses, including reasonable attorneys’ fees, incurred in enforcing
Employee’s obligation under this Agreement.

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

5.1 During Employee’s employment with Employer, Employee will promptly report to Employer all
designs, developments, discoveries, inventions, improvements or works (collectively “Inventions”)
of whatsoever nature conceived or made by Employee. All such Inventions and the patent, copyright,
trade secret and other intellectual property rights therein which are applicable in any way to
Employer’s business shall be the sole and exclusive property of Employer. Whenever requested by
Employer whether during or subsequent to Employee’s employment, Employee agrees to execute any
papers Employer deems necessary for the protection of Employer’s interest in any Invention and the
patent, copyright and other intellectual property rights therein.

5.2 If Employee is or at any time becomes a resident of California, Delaware, Illinois,
Kansas, Minnesota, North Carolina, Utah or Washington, then the provisions of Section 5.1 shall not
apply to any Invention conceived or made by Employee in that state for which no equipment,
supplies, facility or trade secret information of Employer was used and which was developed
entirely on Employee’s own time, unless:

(a) the Invention relates directly to the business of Employer, or to Employer’s actual or
demonstrably anticipated research or development, or

(b) the Invention results from any work performed by Employee for Employer.

	6.	 	Non-Disparagement of Employer.

Employee will not make disparaging statements about Employer or its parent companies,
predecessors, successors, affiliates, subsidiaries, related companies, shareholders (including
their respective members, managers, and partners), officers, directors, agents, employees, products
or services.

	7.	 	Return of Documents and Other Property.

Employee shall return, prior to or on Employee’s employment termination date, all of
Employer’s property and information within Employee’s possession. Such property includes, but is
not limited to, credit cards, computers, copy machines, facsimile machines, lap top computers,
cellular telephones, pagers, entry cards, keys, building passes, computer software, manuals,
journals, diaries, files, lists, codes, documents, correspondence, and methodologies particular to
Employer and any and all copies thereof. Moreover, Employee is strictly prohibited from making
copies, or directing copies to himself through e-mail or other transmission, of any of Employer’s
property covered by this section.

	8.	 	Severability.

If any provision of this Agreement is held to be unenforceable, the remainder of the Agreement
shall not be affected thereby, but shall remain valid and enforceable, and such provision shall be
sufficiently narrowed so as to make it enforceable.

	9.	 	Entire Agreement.

This Agreement, the Severance Agreement and the Option Agreement contain the entire agreement
between Employer and Employee relating to the subject matter hereof and thereof and supersede any
prior Employee Trade Secret, Confidential Information and Post-Employment Restriction Agreement(s)
between Employee and Employer. If any provision of any agreement, plan, program, policy arrangement
or other written document between or relating to Employer and Employee conflicts with any provision
of this Agreement, the provision of this Agreement shall control and prevail.

	10.	 	Assignment.

Employee agrees and acknowledges that the rights and obligations described in this Agreement,
including the right to enforce Employee’s covenants described in Section 4, are assignable by
Employer, without notice to Employee, and without Employee’s consent or agreement.

	11.	 	No Waiver Implied.

The waiver by any party to this Agreement of a breach by the other party of any provision
shall not operate as or be construed as a waiver of any subsequent breach of this Agreement.

	12.	 	Survival.

The duties and obligations of Employee contained in this Agreement shall survive Employee’s
termination of employment with Employer.

14

I have read the above, understand its contents and agree to all conditions.

Employee:

Date:

Name: Jeffrey Woods

MONEYGRAM INTERNATIONAL, INC.

	 	 	 	 	 
	Date:
	 	By:
	 	

	 	 	 	 	 

	 	 	 	 	Name:

	 	 	 	 	Title:

[SIGNATURE PAGE TO THE EMPLOYEE TRADE SECRET, CONFIDENTIAL INFORMATION AND POST-EMPLOYMENT

RESTRICTION AGREEMENT]

15EX-10.1

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into effective as of July
29, 2009 between FEDERAL HOME LOAN BANK OF CINCINNATI, a Federally chartered corporation (the
“Bank”), and       , a director or senior officer of the Bank (“Indemnitee”).

RECITALS

A. The Bank recognizes that competent and experienced persons are increasingly reluctant to
serve or to continue to serve as directors and senior officers (as defined in Section 1) of
corporations unless they are protected by comprehensive liability insurance or indemnification, or
both, due to increased exposure to litigation costs and risks resulting from their service to such
corporations and due to the fact that the exposure to liability frequently bears no reasonable
relationship to their compensation;

B. The statutes and judicial decisions regarding the duties of directors and senior officers
are often difficult to apply, ambiguous or conflicting, and therefore fail to provide such
directors and senior officers with adequate, reliable knowledge of legal risks to which they are
exposed or information regarding the proper course of action to take;

C. The Bank recognizes that plaintiffs often seek damages in large amounts and the costs of
litigation may be so enormous (whether or not the case is meritorious) that the defense and/or
settlement of such litigation is often beyond the personal resources of directors and senior
officers;

D. It is critically important to the Bank that it be able to attract and retain the most
capable persons reasonably available to serve as directors and senior officers of the Bank;

E. Indemnitee is a director or senior officer of the Bank and Indemnitee’s willingness to
continue to serve in such capacity is predicated, in substantial part, upon the Bank’s willingness
to indemnify Indemnitee in accordance with the principles reflected above, to the fullest extent
permitted by the laws of the state of Ohio, and upon other undertakings set forth in this
Agreement;

F. The Bank, after reasonable review, believes that the interests of the Bank and its
member-stockholders are best served by a combination of liability insurance and personal
indemnification by the Bank of its directors and senior officers;

G. The Bank’s bylaws (the “Bylaws”) require the Bank to indemnify its directors and
officers. The Bylaws expressly provide that the indemnification provisions set forth therein are
not exclusive, and contemplate that contracts such as this Agreement may be entered into between
the Bank and its directors and senior officers with respect to indemnification;

H. In recognition of the need to provide Indemnitee with contractual protection against
personal liability, in order to procure Indemnitee’s continued service as a director or senior
officer of the Bank and to enhance Indemnitee’s ability to serve the Bank in an effective manner,
and in order to provide such protection pursuant to express contract rights (intended to be
enforceable irrespective of, among other things, any amendment to the Bank’s charter or Bylaws, any
change in the composition of the Bank’s Board of Directors (the “Board”) or any change in the
director’s or senior officer’s status through retirement or resignation, the Bank wishes to provide
in this Agreement for the indemnification of and the advancement of Expenses (as defined in Section
1.2) to Indemnitee as set forth in this Agreement and for the continued coverage of Indemnitee
under the Bank’s directors’ and senior officers’ liability insurance policies;

I. In light of the considerations referred to in the preceding recitals, it is the Bank’s
intention and desire that the provisions of this Agreement be construed liberally, subject to their
express terms, to maximize the protections to be provided to Indemnitee hereunder; and

J. Indemnitee is willing to continue to serve as a director and/or senior officer on the
condition that he or she is furnished the indemnity provided for herein.

NOW, THEREFORE, the parties hereto agree as follows:

1. Definitions. For purposes of this Agreement:

1.1 “Claim” means (i) any threatened, asserted, pending, or completed claim, demand, action,
suit, or proceeding, whether civil, criminal, administrative, arbitrative, investigative, or other,
and whether made pursuant to federal, state, or other law; and (ii) any threatened, pending, or
completed inquiry or investigation, whether made, instituted or conducted by the Bank or any other
person, including without limitation any federal, state, or other governmental entity, that
Indemnitee determines might lead to the institution of any such claim, demand, action, suit or
proceeding.

1.2 “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees and all other disbursements or
expenses of the types customarily incurred in connection with defending, preparing to defend,
investigating, participating, or being or preparing to be a witness in a proceeding. Expenses also
shall include expenses incurred in connection with any appeal resulting from any proceeding,
including without limitation the premium, security for, and other costs relating to any cost bond,
supersedeas bond, or other appeal bond or its equivalent. Expenses, however, shall not include
amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

1.3 “Indemnifiable Claim” means any Claim based upon, arising out of or resulting from (i) any
actual, alleged, or suspected act or failure to act by Indemnitee in his or her capacity as a
director or senior officer of the Bank, and/or (ii) any actual, alleged, or suspected act or
failure to act by Indemnitee in respect of any business, transaction, communication, filing,
disclosure or other activity of the Bank, and/or (iii) Indemnitee’s status as a current or former
director or senior officer of the Bank or any actual, alleged or suspected act or failure to act by
Indemnitee in connection with any obligation or restriction imposed upon Indemnitee by reason of
such status.

1.4 “Indemnifiable Losses” means any and all Losses relating to, arising out of, or resulting
from any Indemnifiable Claim.

1.5 “Losses” means any and all Expenses, damages, losses, liabilities, judgments, fines,
penalties (whether civil, criminal or other) and amounts paid in settlement following a final,
nonappealable judgment or conviction, including without limitation all interest, assessments and
other charges paid or payable in connection with or in respect of any of the foregoing.

1.6 A “proceeding” includes any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other
actual, threatened or completed proceeding, whether brought by or in the right of the Bank or
otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is
or will be involved as a party, by reason of the fact that Indemnitee is or was a director of the
Bank, or by reason of any action or inaction on Indemnitee’s part while acting as a director of the
Bank; in each case whether or not Indemnitee is acting or serving in any such capacity at the time
any liability or expense is incurred for which indemnification can be provided under this
Agreement.

1.7 A “senior officer” includes the President, Executive Vice President, and all Senior Vice
Presidents of the Bank.

2. Indemnification

2.1 Subject to and except as limited by Sections 7 and 8 hereof, the Bank shall indemnify,
defend, and hold harmless Indemnitee, to the fullest extent permitted by the laws of the State of
Ohio in effect on the date hereof or as such laws may from time to time hereafter be amended to
increase the scope of such permitted indemnification, against any and all Indemnifiable Losses.

2.2 If Indemnitee is entitled under any provision of this Agreement to indemnification by the
Bank for some or a portion of any Losses, but not for the entire amount thereof, the Bank shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

3. Advancement of Expenses. Indemnitee will have the right to advancement by the Bank
prior to the final disposition of any Indemnifiable Claim of any and all Expenses relating to,
arising out of or resulting from any Indemnifiable Claim paid or incurred by Indemnitee upon
receipt of undertakings by or on behalf of Indemnitee: (i) to repay such amount if it shall be
proved by clear and convincing evidence in a court of competent jurisdiction that Indemnitee’s
action or failure to act involved an act or omission undertaken with deliberate intent to cause
injury to the Bank or undertaken with reckless disregard for the best interests of the Bank and
(ii) to cooperate reasonably with the Bank concerning the action, suit or proceeding.

4. Purchase of Insurance. For the duration of Indemnitee’s service as a director or
officer of the Bank, and thereafter for so long as Indemnitee shall be subject to any pending or
possible Indemnifiable Claim, the Bank shall use commercially reasonable efforts (taking into
account the scope and amount of coverage available relative to the cost thereof) to cause to be
maintained in effect policies of directors’ and officers’ liability insurance providing coverage
for directors and/or officers of the Bank that is at least substantially comparable in scope and
amount to that provided by the Bank’s current policies of directors’ and officers’ liability
insurance. In all policies of directors’ and officers’ liability insurance obtained by the Bank,
Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights
and benefits, subject to the same limitations, as are accorded to the Bank’s directors and officers
most favorably insured by such policy. Upon written request of an Indemnitee, the Bank shall
provide Indemnitee with a copy of all directors’ and officers’ liability insurance policies, as
they may be amended and/or supplemented from time to time. Without limiting the generality or
effect of the three immediately preceding sentences, the Bank shall not discontinue or
significantly reduce the scope or amount of coverage under any such policy without the approval of
a majority of the members of the Board. The Indemnitee’s expenses (including attorneys’ fees)
incurred in connection with successfully establishing Indemnitee’s right to recovery under any such
policy of directors’ and officers’ liability insurance shall be indemnified by the Bank.

5. Non-Exclusivity

5.1 The indemnification and advancement of expenses provided by or granted pursuant to
this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may be
entitled under applicable law, the charter of the Bank, the Bylaws, any indemnity or other
agreement, a resolution of the directors, in connection with any court proceedings brought, or
otherwise, both as to action in Indemnitee’s official capacity and as to action in another capacity
while holding such office.

5.2 To the extent that a change in the law governing the Federal Home Loan Banks, whether by
statute, judicial decision, or regulatory action, permits greater indemnification than is afforded
under this Agreement without adverse impact on or materially increased cost to the Bank, then the
Bank shall indemnify Indemnitee hereunder to the fullest extent so permitted.

6. Notification and Defense of Claim.

6.1 Promptly after receipt by Indemnitee of notice of the commencement of any action, suit or
proceeding, Indemnitee shall, if a claim thereof is to be made against the Bank hereunder, notify
the Bank of the commencement thereof. The failure to promptly notify the Bank of the commencement
of the action, suit, or proceeding, or Indemnitee’s request for indemnification, will not relieve
the Bank from any liability that it may have to Indemnitee hereunder, except to the extent the Bank
is prejudiced in its defense of such action, suit or proceeding as a result of such failure.

6.2 In the event the Bank shall be obligated to pay the expenses of Indemnitee with respect to
an action, suit or proceeding, as provided in this Agreement, the Bank, if appropriate, shall be
entitled to assume the defense of such action, suit or proceeding, with counsel reasonably
acceptable to Indemnitee, upon the delivery to Indemnitee of written notice of its election to do
so. After delivery of such notice, approval of such counsel by Indemnitee and the retention of
such counsel by the Bank, the Bank will not be liable to Indemnitee under this Agreement for any
fees of counsel subsequently incurred by Indemnitee with respect to the same action, suit or
proceeding, provided that (1) Indemnitee shall have the right to employ Indemnitee’s own counsel in
such action, suit or proceeding at Indemnitee’s own expense and (2) if (i) the employment of
counsel by Indemnitee has been previously authorized in writing by the Bank, (ii) counsel to the
Bank or Indemnitee shall have reasonably concluded that there may be a conflict of interest or
position, or reasonably believes that a conflict is likely to arise, on any significant issue
between the Bank and Indemnitee in the conduct of any such defense, or (iii) the Bank shall not, in
fact, have employed counsel to assume the defense of such action, suit or proceeding, then the fees
and expenses of Indemnitee’s counsel shall be at the expense of the Bank, except as otherwise
expressly provided by this Agreement. The Bank shall not be entitled, without the consent of
Indemnitee, to assume the defense of any claim brought by or in the right of the Bank or as to
which counsel for the Bank or Indemnitee shall have reasonably made the conclusion provided for in
clause (ii) above.

6.3 Notwithstanding any other provision of this Agreement to the contrary, to the extent that
Indemnitee is, by reason of Indemnitee’s corporate status with respect to the Bank, a witness or
otherwise participates in any action, suit or proceeding at a time when Indemnitee is not a party
to the action, suit or proceeding, the Bank shall indemnify Indemnitee against all expenses
(including attorneys’ fees) actually and reasonable incurred by Indemnitee or on Indemnitee’s
behalf in connection therewith.

7. Procedure for Indemnification.

7.1 To obtain indemnification, Indemnitee shall promptly submit to the Bank a written request,
including therein or therewith such documentation and information as is reasonably available to
Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Bank shall, promptly upon receipt of such a request for
indemnification, advise the Board in writing that Indemnitee has requested indemnification.

7.2 To the extent that Indemnitee has been successful on the merits or otherwise in connection
with any Indemnifiable Claim or any portion thereof or in defense of any claim, issue or matter
therein, Indemnitee shall be indemnified against all Indemnifiable Losses relating to, arising out
of or resulting from such Indemnifiable Claim in accordance with Section 2 and no Standard of
Conduct Determination (as defined in Section 7.3) will be required. In the event that a matter as
to which there has been a dismissal without prejudice is later revived in the same or similar form,
the matter will be treated as a new Claim for all purposes of this Agreement.

7.3 To the extent that the provisions of Section 7.2 are inapplicable to an Indemnifiable
Claim that will have been finally disposed of, any determination of whether Indemnitee has
satisfied any applicable standard of conduct under Ohio law that is a legally required condition
precedent to indemnification of Indemnitee hereunder (a “Standard of Conduct Determination”) will
be made as follows: (1) by the Board by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding; or (2) if such quorum is not obtainable, or,
even if obtainable, if a quorum of disinterested directors so directs, by independent legal counsel
in a written opinion addressed to the Board, a copy of which shall be delivered to Indemnitee.
Indemnitee will cooperate with the person or persons making such Standard of Conduct Determination,
including providing to such person or persons, upon reasonable advance request, any documentation
or information which is not privileged or otherwise protected from disclosure and which is
reasonably available to Indemnitee and reasonably necessary to such determination.

7.4 The Bank shall use its reasonable best efforts to cause any Standard of Conduct
Determination required under Section 7.3 to be made as promptly as practicable. If (i) the person
or persons empowered or selected under Section 7.3 to make the Standard of Conduct Determination
shall not have made a determination within 60 days after the later of (A) receipt by the Bank of
written notice from Indemnitee advising the Bank of the final disposition of the applicable
Indemnifiable Claim (the date of such receipt being the “Notification Date”) and (B) the selection
of an independent counsel, if such determination is to be made by independent counsel that is
permitted under the provisions of Section 7.3 to make such determination, and (ii) Indemnitee shall
have fulfilled his/her obligations set forth in the last sentence of Section 7.3, then Indemnitee
shall be deemed to have satisfied the applicable standard of conduct; provided that such 60-day
period may be extended for a reasonable time, not to exceed an additional 30 days, if the person or
persons making such determination in good faith requires such additional time for the obtaining or
evaluation of documentation and/or information relating thereto.

7.5 If (i) Indemnitee shall be entitled to indemnification hereunder against any Indemnifiable
Losses pursuant to Section 7.2, or (ii) Indemnitee has been determined or deemed pursuant to
Section 7.3 or 7.4 to have satisfied any applicable standard of conduct under Ohio law that is a
legally required condition precedent to indemnification of Indemnitee hereunder, then the Bank
shall pay to Indemnitee, within 30 days after the later of (x) the Notification Date in respect of
the Indemnifiable Claim or portion thereof to which such Indemnifiable Losses resulted and (y) the
earliest date on which the applicable criterion specified in clause (i) or (ii) above shall have
been satisfied, an amount equal to the amount of such Indemnifiable Losses.

7.6 If a Standard of Conduct Determination is to be made by independent legal counsel pursuant
to Section 7.3, such counsel shall be selected by the Board and the Bank shall give written notice
to Indemnitee advising him or her of the identity of the independent legal counsel so selected.
Indemnitee may, within 5 business days after receiving the written notice of selection from the
Board, deliver to the Board a written objection to such selection; provided, however, that such
objection may be asserted only on the ground that the independent legal counsel so selected is
then, or in the five years preceding such date has been, retained to represent: (i) the Bank in any
matter material to the Bank or (ii) any other named (or, as to a threatened matter, reasonably
likely to be named) party to the Indemnifiable Claim giving rise to the claim for indemnification
hereunder. Absent a proper and timely objection, the person or firm so selected will act as
independent legal counsel. If such written objection is properly and timely made and
substantiated, (i) the independent legal counsel so selected may not serve as independent legal
counsel unless and until such objection is withdrawn or a court has determined that such objection
is without merit and (ii) the Bank may, at its option, select an alternative independent legal
counsel and give written notice to Indemnitee advising Indemnitee of the identity of the
alternative independent legal counsel, in which case the provisions of the two immediately
preceding sentences and clause (i) of this sentence shall apply to such subsequent selection and
notice. The date of the selection of independent legal counsel for purposes of clause (B) in
Section 7.4 shall be the fifth business day after the date upon which the Bank has provided notice
to Indemnitee of the Bank’s selected independent legal counsel for whom no objection is both made
and sustained by Indemnitee pursuant to this Section 7.6.

7.7 The Bank shall indemnify Indemnitee against any expenses (including attorneys’ fees)
incurred in connection with successfully establishing Indemnitee’s right to indemnification, in
whole or in part, in any proceeding or otherwise.

7.8 In making any Standard of Conduct Determination, the person or persons making such
determination shall presume that Indemnitee has satisfied the applicable standard of conduct, and
the Bank may overcome such presumption only by its adducing clear and convincing evidence to the
contrary. Any Standard of Conduct Determination that is adverse to Indemnitee may be challenged by
the Indemnitee in Federal courts in Ohio specified in Section 20 below.

8. Limitations on Indemnification. Notwithstanding any other provision herein to the
contrary, the Bank shall not be obligated pursuant to this Agreement:

8.1 To indemnify or advance expenses to Indemnitee with respect to an action, suit or
proceeding (or part thereof) initiated by Indemnitee, except with respect to an action, suit or
proceeding brought to establish or enforce a right to indemnification (which shall be governed by
the provisions of Section 8.2 of this Agreement), unless such action, suit or proceeding (or part
thereof) was authorized or consented to by the Board.

8.2 To indemnify Indemnitee for any expenses incurred by Indemnitee with respect to any
action, suit or proceeding instituted by Indemnitee to enforce or interpret this Agreement, unless
Indemnitee is successful in establishing Indemnitee’s right to indemnification in such action, suit
or proceeding, in whole or in part, or unless and to the extent that the court in such action, suit
or proceeding shall determine that, despite Indemnitee’s failure to establish Indemnitee’s right to
indemnification, Indemnitee is entitled to indemnity for such expenses; provided, however, that
nothing in this Section 8.2 is intended to limit the Bank’s obligation with respect to the
advancement of expenses to Indemnitee in connection with any such action, suit or proceeding
instituted by Indemnitee to enforce or interpret this Agreement.

9. Subrogation. In the event of payment under this Agreement, the Bank shall be subrogated
to the extent of such payment to all of the related rights of recovery of Indemnitee against other
persons or entities.

10. No Duplication of Payment. The Bank shall not be liable under this Agreement to make
any payment to Indemnitee in respect of any Indemnifiable Loss to the extent Indemnitee has
otherwise actually received payment under any insurance policy or otherwise in respect of such
Indemnifiable Loss.

11. Certain Settlement Provisions. The Bank shall have no obligation to indemnify
Indemnitee under this Agreement for amounts paid in settlement of any action, suit or proceeding
without the Bank’s prior written consent, which shall not be unreasonably withheld. The Bank shall
not settle any action, suit or proceeding in any manner that would impose any fine or other
obligation on Indemnitee without Indemnitee’s prior written consent, which shall not be
unreasonably withheld.

12. Survival of Rights; Modification and Amendment.

12.1 The Bank expressly acknowledges that the rights conferred upon Indemnitee pursuant to
this Agreement are contract rights which vested immediately upon the execution of this Agreement by
the parties hereto and, as to proceedings within the scope of this Agreement, shall survive
indefinitely Indemnitee’s termination of service as a director or officer of the Bank.

12.2 No supplement, modification, termination or amendment of this Agreement shall be binding
unless executed in writing by both of the parties hereto. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether
or not similar) nor shall such waiver constitute a continuing waiver.

13. Enforcement. The Bank agrees that its execution of this Agreement shall constitute a
stipulation by which it shall be irrevocably bound in any court of competent jurisdiction in which
a proceeding by Indemnitee for enforcement of Indemnitee’s rights hereunder shall have been
commenced, continued or appealed, that its obligations set forth in this Agreement are unique and
special, and that failure of the Bank to comply with the provisions of this Agreement will cause
irreparable and irremediable injury to Indemnitee, for which a remedy at law will be inadequate.
As a result, in addition to any other right or remedy Indemnitee may have at law or in equity with
respect to breach of this Agreement, Indemnitee shall be entitled to injunctive or mandatory relief
directing specific performance by the Bank of its obligations under this Agreement.

14. Severability. The provisions of this Agreement are intended to be severable. If any
provision of this Agreement is found by a court to be unenforceable or invalid due to conflict with
public or regulatory policy or otherwise (including, without limitation, any law permitting the
Director of the Federal Housing Finance Agency to prohibit or limit indemnification payments by the
Bank), the remaining provisions shall remain in full force and effect notwithstanding such finding.

15. Successors and Assigns. All of the terms and provisions of this Agreement shall be
binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and
their respective successors, assigns, heirs, executors, administrators and legal representatives.
The Bank shall require and cause any direct or indirect successor (whether by purchase, merger,
consolidation or otherwise) to all or substantially all of the business or assets of the Bank, by
written agreement in form and substance reasonably satisfactory to Indemnitee, expressly to assume
and agree to perform this Agreement in the same manner and to the same extent that the Bank would
be required to perform if no such succession had taken place.

16. Entire Agreement. This Agreement constitutes the entire agreement, and supersedes any
prior agreement or understanding, oral, written or implied, between the parties hereto with respect
to the subject matter hereof.

17. Notices. All notices and other communications given or made pursuant to this Agreement
shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party
to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal
business hours of the recipient, and if not so confirmed, then on the next business day, (c) five
days after having been sent by registered or certified mail, return receipt requested, postage
prepaid, or (d) one day after deposit with a nationally recognized overnight courier, specifying
next day delivery, with written verification of receipt. All communications shall be sent:

(a) To Indemnitee at the address set forth below Indemnitee’s signature hereto.

	 	(b)	 	To the Bank at:

	 	 	 
	1000 Atrium Two
	221 E. Fourth Street
	Cincinnati, OH 45202
	Attention:
	 	Andrew S. Howell

Executive Vice President

Phone: (513) 852-7526

Fax: (513) 852-5747

E-mail: howellas@fhlbcin.com

	 	 	 

or to such other address as may have been furnished to Indemnitee by the Bank or to the Bank by
Indemnitee, as the case may be.

18. Counterparts. This Agreement may be executed in two counterparts, each of which shall
be deemed an original, and which together shall constitute one and the same Agreement. This
Agreement may also be executed and delivered by facsimile signature.

19. Headings. The headings of the paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.

20. Governing Law and Consent to Jurisdiction. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Ohio, without regard to
conflict of laws rules. Each of the Bank and Indemnitee hereby irrevocably and unconditionally (i)
agrees that any action or proceeding arising out of or in connection with this Agreement shall be
brought only in the District Court of the United States for the Southern District of Ohio (the
“District Court”), and not in any other state or federal court in the United States of America or
any court in any other country, (ii) consents to submit to the exclusive jurisdiction of the
District Court for purposes of any action or proceeding arising out of or in connection with this
Agreement, (iii) waives any objection to the laying of venue of any such action or proceeding in
the District Court, and (iv) waives, and agree not to plead or to make, any claim that any such
action or proceeding brought in the District Court has been brought in an improper or inconvenient
forum.

SIGNATURE PAGE TO FOLLOW

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the date
first above written.

FEDERAL HOME LOAN BANK OF CINCINNATI

By:      

David H. Hehman

President

INDEMNITEE

Name:

Address:

SIGNATURE PAGE TO INDEMNIFICATION AGREEMENT

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