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                                                                    EXHIBIT 10.8

                                 IPAYMENT, INC.
                              STOCK INCENTIVE PLAN
                    AS AMENDED AND RESTATED ON APRIL __, 2003

                                    PREAMBLE

         WHEREAS, iPayment, Inc. (the "Company") previously established the
Stock Incentive Plan (the "Plan") through which the Company may award options to
purchase the Common Stock of the Company to directors, officers, employees,
consultants, advisors, agents, independent contractors, and independent sales or
service organizations that provide services to the Company and its affiliates;

         WHEREAS, the Plan provides for the granting of options that qualify as
"incentive stock options" within the meaning of section 422 of the Code, as well
as options that are not so qualified;

         WHEREAS, the Plan provides for the granting of Stock that is subject to
certain restrictions on transfer and/or a risk of forfeiture; and

         WHEREAS, the Company intends that, in the event that a common class of
equity securities of the Company becomes subject to registration under section
12 of the Exchange Act, the Awards granted hereunder will (i) qualify as
"performance-based compensation" described in section 162(m)(4)(C) of the Code,
and (ii) conform to the requirements for exemption set forth under Securities
and Exchange Commission Rule 16b-3; and

         WHEREAS, the Company desires to amend and restate the Plan.

         NOW, THEREFORE, the Company hereby amends and restates the iPayment,
Inc. Stock Incentive Plan, effective April ___, 2003, to read as follows:

                             ARTICLE I. DEFINITIONS

         1.1      Affiliate. A "parent corporation," as defined in section
424(e) of the Code, or "subsidiary corporation," as defined in section 424(f) of
the Code, of the Company.

         1.2      Agreement. A written agreement (including any amendment or
supplement thereto) between the Company or Affiliate and a Participant
specifying the terms and conditions of an Award granted to such Participant.

         1.3      Award. A right that is granted under the Plan to a Participant
by the Company, which may be in the form of Options or Restricted Stock.

         1.4      Board. The board of directors of the Company.

         1.5      Code. The Internal Revenue Code of 1986, as amended.

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         1.6      Committee. The Board or any committee of Board members that is
designated by the Board to serve as the administrator of the Plan; provided,
however, that in the event that any common class of equity securities of the
Company becomes subject to registration under section 12 of the Exchange Act,
the Committee shall be composed of at least two individuals who are members of
the Board and are not employees of the Company or an Affiliate, and who are
designated by the Board as the "compensation committee" or are otherwise
designated to administer the Plan. In the absence of a designation of a
Committee by the Board, the Board shall be the Committee.

         1.7      Company. iPayment, Inc. and its successors which adopt the
Plan.

         1.8      Date of Exercise. The date that the Company accepts tender of
the exercise price of an Option.

         1.9      Disability. The inability of a Participant to engage in
substantial gainful activity by reason of any medically determinable physical or
mental impairment that is expected to result in death or has lasted or can be
expected to last for a continuous period of twelve (12) months or more. A
determination that a person is disabled shall be made by the Committee on the
basis of such medical evidence as the Committee deems warranted under the
circumstances.

         1.10     Exchange Act. The Securities Exchange Act of 1934, as amended.

         1.11     Fair Market Value. On any given date, Fair Market Value shall
be determined as follows:

         (a)      If the Stock is traded on a trading exchange (e.g., the New
                  York Stock Exchange) or is reported on the NASDAQ National
                  Market System or another NASDAQ automated quotation system,
                  Fair Market Value shall be the closing selling price of the
                  Stock on such exchange or system with respect to the date for
                  which Fair Market Value is being determined. If there is no
                  closing selling price for the Stock on the date in question,
                  then the Fair Market Value shall be the closing selling price
                  on the last preceding date for which such quotation exists.

         (b)      If the Stock is not traded on a recognized exchange or
                  automated trading system, Fair Market Value shall be the value
                  determined in good faith by the Committee or the Board.

         1.12     Incentive Option. An Option that is intended to qualify as an
"incentive stock option" within the meaning of section 422 of the Code. An
Incentive Option, or a portion thereof, shall not be invalid for failure to
qualify under section 422 of the Code, but shall be treated as a Nonqualified
Option.

         1.13     Misconduct shall mean any act of embezzlement, fraud or
dishonesty by a Participant, nonpayment by a Participant of any obligation owed
to the Company or any Affiliate, breach of a Participant's fiduciary duty to the
Company, deliberate disregard by a Participant of Company rules or the rules of
any Affiliate resulting in loss, damage or injury to the Company or any
Affiliate, unauthorized disclosure by a Participant of any Company or any
Affiliate trade secret or confidential information, a Participant's engagement
in any unfair

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competition with the Company or any Affiliate, the breach of Participant's
non-competition agreement, inducement by a Participant of any Company or
Affiliate customer to breach a contract with the Company or any Affiliate,
inducement by a Participant of any principal for whom the Company or any
Affiliate acts as agent to terminate such agency relationship, or any other
intentional misconduct by such person adversely affecting the business or
affairs of the Company or any Affiliate in a material manner.

         1.14.    Nonqualified Option. An Option that is not an Incentive
Option.

         1.15     Option. The right that is granted hereunder to a Participant
to purchase from the Company a stated number of shares of Stock at the price set
forth in an Agreement. As used herein, an Option includes both Incentive Options
and Nonqualified Options.

         1.16     Participant. A director, officer, employee, consultant,
advisor, agent, independent contractor, or independent sales or service
organization that provides services to the Company and an Affiliate, satisfies
the requirements of Article IV and is selected by the Committee to receive an
Award.

         1.17     Plan. The iPayment, Inc. Stock Incentive Plan.

         1.18     Restricted Stock. A grant of Stock that is subject to
restrictions on transfer and/or a risk of forfeiture by and to the Participant,
as described in Section 4.6. Restricted Stock is awarded to a Participant shall
cease to be Restricted Stock at the time that such restrictions and risks of
forfeiture lapse in accordance with the terms of the Agreement or Plan.

         1.19     Stock. The common stock of the Company.

         1.20     Ten Percent Shareholder. An individual who owns more than 10%
of the total combined voting power of all classes of stock of the Company or an
Affiliate at the time he is granted an Incentive Option. For the purpose of
determining if an individual is a Ten Percent Shareholder, he shall be deemed to
own any voting stock owned (directly or indirectly) by or for his brothers and
sisters (whether by whole or half blood), spouse, ancestors or lineal
descendants and shall be considered to own proportionately any voting stock
owned (directly or indirectly) by or for a corporation, partnership, estate or
trust of which such individual is a shareholder, partner or beneficiary.

                               ARTICLE II. PURPOSE

         The purpose of this Plan is to encourage ownership of Stock of the
Company by directors, officers, employees, consultants, advisors, agents,
independent contractors, and independent sales or service organizations that
provide services to the Company and to any current or future Affiliate. This
Plan is intended to provide an incentive and bonus for maximum effort in the
successful operation of the Company and is expected to benefit the shareholders
by associating the interests of the directors, officers, employees, consultants,
advisors, agents, independent contractors, and independent sales or service
organizations that provide services to the Company and Affiliates with those of
the Company's shareholders and by enabling the Company and Affiliates to attract
and retain personnel of the best available talent through the opportunity to
share, by the proprietary interests created by this Plan, in the increased value
of

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the Company's shares to which such personnel have contributed. The benefits of
this Plan are not a substitute for compensation otherwise payable to employees
pursuant to the terms of their employment. Proceeds from the purchase of Stock
pursuant to this Plan shall be used for the general business purposes of the
Company.

                           ARTICLE III. ADMINISTRATION

         3.1      Administration of Plan. The Plan shall be administered by the
Committee. The express grant in the Plan of any specific power to the Committee
shall not be construed as limiting any power or authority of the Committee. Any
decision made or action taken by the Committee to administer the Plan shall be
final and conclusive. No member of the Committee shall be liable for any act
done in good faith with respect to this Plan or any Agreement or Award. The
Company shall bear all expenses of Plan administration. In addition to all other
authority vested with the Committee under the Plan, the Committee shall have
complete authority to:

         (a)      Interpret all provisions of this Plan;

         (b)      Prescribe the form of any Agreement and notice and manner for
                  executing or giving the same;

         (c)      Make amendments to all Agreements;

         (d)      Adopt, amend, and rescind rules for Plan administration;

         (e)      Make all determinations it deems advisable for the
                  administration of this Plan; and

         (f)      Effect, at any time and from time to time, with the consent of
                  the affected Option holders, the cancellation of any or all
                  outstanding Options under the Plan and to grant in
                  substitution therefor new Awards covering the same or
                  different number of shares of Stock but with an exercise or
                  purchase price per share based on the Fair Market Value per
                  share of Stock on the new Award grant date.

         (g)      Amend the terms of outstanding Awards and impose terms and
                  conditions on the shares issued pursuant to such Awards.
                  Either at the time the Award is granted, or by subsequent
                  action, to impose such restrictions, conditions, or
                  limitations as it determines appropriate as to the timing and
                  manner of any resales, including, but not limited to
                  restrictions under an insider trading policy, restrictions
                  designed to delay and/or coordinate the timing and manner of
                  sales by Participants, and restrictions as to the use of
                  specific brokerage firm for any resales or transfers.
                  Notwithstanding the foregoing, an amendment, restriction,
                  condition or limitation that would have a material adverse
                  effect on the rights of a Participant under an outstanding
                  Award is not valid with respect to such Award without the
                  Participant's consent.

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         (h)      Waive conditions to and/or accelerate the exercisability
                  and/or vesting of an Award, either automatically upon the
                  occurrence of specified events or otherwise in its discretion.

         3.2      Authority to Grant Awards. The Committee shall have authority
to grant Awards upon such terms the Committee deems appropriate and that are not
inconsistent with the provisions of this Plan. Such terms may include conditions
on the exercise of all or any part of an Option.

         3.3      Persons Subject to Section 16(b). Notwithstanding anything in
the Plan to the contrary, the Committee, in its absolute discretion, may
bifurcate the Plan so as to restrict, limit or condition the use of any
provision of the Plan to participants who are officers and directors subject to
section 16(b) of the Exchange Act, without so restricting, limiting or
conditioning the Plan with respect to other Participants.

                  ARTICLE IV. AWARD ELIGIBILITY AND LIMITATIONS

         4.1      Participation. The Committee may from time to time designate
directors, officers, employees, consultants, advisors, agents, independent
contractors, and independent sales or service organizations to whom Awards are
to be granted and who are eligible to become Participants. Such designation
shall specify the number of shares of Stock, if any, subject to each Award. All
Awards granted under this Plan shall be evidenced by Agreements that shall be
subject to applicable provisions of this Plan or such other provisions as the
Committee may adopt that are not inconsistent with the Plan.

         4.2      Grant of Awards. An Award shall be deemed to be granted to a
Participant at the time that the Committee designates in a writing that is
adopted by the Committee as the grant of an Award, and that makes reference to
the name of the Participant and the number of shares of Stock that are subject
to the Award. Accordingly, an Award may be deemed to be granted prior to the
approval of this Plan by the shareholders of the Company and prior to the time
that an Agreement is executed by the Participant and the Company.
Notwithstanding any language in an Agreement or other document to the contrary,
if this Plan is not approved by the shareholders of the Company in a manner that
satisfies Treasury Regulation section 1.422-5 within twelve (12) months of the
adoption of this Plan by the Board, all Options granted hereunder shall be
treated as Nonqualified Options.

         4.3      Limitations on Incentive Options. A person who is not an
employee of the Company or an Affiliate is not eligible to receive an Incentive
Option. To the extent that the aggregate Fair Market Value of Stock with respect
to which Incentive Options are exercisable for the first time by a Participant
during any calendar year (under all stock incentive plans of the Company and its
Affiliates) exceeds $100,000 (or the amount specified in section 422 of the
Code), determined as of the date an Incentive Option is granted, such Options
shall be treated as Nonqualified Options. This provision shall be applied by
taking Incentive Options into account in the order in which they were granted.

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         4.4      Repurchase Rights upon Termination. If a Participant ceases
providing services to the Company or an Affiliate in his or her capacity as a
director, officer, employee, consultant, advisor, agent, independent contractor,
or independent sales or service organization for reasons other than death,
Disability or retirement after age sixty (60), then the Company shall have the
right to purchase shares of Stock issued to the Participant pursuant to this
Plan for the Fair Market Value of the Stock on the date of such termination of
services. The Company may exercise the rights described in this Section 4.4 by
giving notice of exercise to the Participant in person or by mail within ninety
(90) days of the later of (i) the date of exercise of any Option or (ii) the
date of termination of service. A legend may be placed on all stock certificates
to reference this right. The Company may also require each Participant to
execute a separate agreement that contains these and additional terms that are
consistent with this Section 4.4. This provision shall not limit the Company's
right to repurchase any shares of Restricted Stock pursuant to the terms of a
Restricted Stock Agreement.

         Notwithstanding the foregoing, the Company's repurchase rights
described in this Section 4.4 shall not apply if the Participant's services
terminate after a common class of equity securities of the Company becomes
publicly traded on a recognized exchange or automated trading system.

         4.5      Right of First Refusal. A Participant may not sell the shares
of Stock acquired pursuant to an Award to any person other than the Company
without the prior written consent of the Company, unless the Participant has
received a bona fide offer from a person who is a shareholder of the Company
prior to making the offer and, prior to the completion of the sale, the
Participant gives reasonable notice to the Company of the terms thereof and
provides the Company a reasonable opportunity to purchase the Stock under terms
that are no less favorable to the Participant. If the Company does not purchase
the Stock within thirty (30) days after receiving notice of such intended sale,
the Participant may complete the sale to the Company shareholder, validly
identified in the notice to the Company, without further restriction hereunder.
Any transfer of Stock in violation of this provision may be voided by the
Company within thirty (30) days after the transfer. Notwithstanding the
foregoing, the Company's consent and first refusal rights described in this
Section 4.5 shall not apply if the Participant sells the Stock acquired
hereunder (i) in connection with or after a public offering of the Company's
common equity securities, or (ii) pursuant to a merger, acquisition or other
transaction in which the shareholders of the Company receive cash or equity
proceeds in exchange for Stock.

         4.6      Restricted Stock. An award of Restricted Stock to a
Participant is a grant of Stock that is subject to forfeiture and/or
restrictions on transfer that are identified in an Agreement. The Committee may
grant Restricted Stock to a Participant as part of a "deposit share,"
"performance award" or any other arrangement established by the Committee and
specified in an Agreement. A Participant who receives Restricted Stock shall be
treated as a shareholder of the Company for all purposes, except that the rights
of the Participant may be limited under the terms of the Agreement. Unless
otherwise specified in an Agreement, Participants shall be entitled to receive
dividends on and exercise voting rights with respect to shares of Restricted
Stock.

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         4.7      Additional Limitations on Grants. No person may receive
Options and shares of Restricted Stock for more than 1,000,000 shares of Stock
in the aggregate (subject to increases and adjustments as provided in Article
VIII) during any calendar year.

                        ARTICLE V. STOCK SUBJECT TO PLAN

         5.1      Source of Shares. Upon the exercise of an Option or the grant
of Restricted Stock, the Company shall deliver to the Participant authorized but
previously unissued Stock or Stock that is held by the Company as treasury
stock.

         5.2      Stock Subject to the Plan.. The maximum aggregate number of
shares of Stock that may be issued pursuant to the Plan is 4,250,000. The number
of shares of Stock that may be issued pursuant to the Plan shall automatically
increase on the first trading day of January each calendar year during the term
of the Plan, beginning with calendar year 2004, by (i) a number of shares of
Stock that, when added to the then maximum aggregate number of shares of Stock
that may be issued pursuant to the Plan, is equal to 12.5% the total number of
shares of Stock outstanding (as further defined below), on an as converted and
fully diluted basis, on the last trading day in December of the immediately
preceding calendar year or (ii) such lesser number as determined by the Board,
but in no event shall such annual increase exceed 7,500,000 shares of Stock. For
purposes of this Section, in order to determine the actual increase each year,
the Company shall take the total number of basic shares (common and preferred)
outstanding, plus all securities or debt convertible into shares of common or
preferred stock, plus all warrants and any other securities, and divide such
number by 0.875. The product shall then be multiplied by 12.5%, and then
subtracted by the total un-issued and outstanding shares reserved in the
Company's Non-Employee Directors Stock Option Plan. This final number shall then
be approved by the Board as the automatic increase to the stock subject to the
Plan.

         Should the exercise price of an Option under the Plan be paid with
shares of Stock or should shares of Stock otherwise issuable under the Plan be
withheld by the Company in satisfaction of the withholding taxes incurred in
connection with the exercise of an Option or the vesting of Restricted Stock,
then the number of shares of Stock issuable under the Plan shall be reduced by
the gross number of shares for which the Option is exercised or which vest under
the Restricted Stock grant, and not by the net number of shares of Stock issued
to the holder of such Option or Restricted Stock.

         If any Option granted hereunder expires or terminates for any reason
without having been exercised in full, or Restricted Stock is forfeited, the
shares of Stock subject thereto shall again be available for issuance of an
Award under this Plan.

               ARTICLE VI. OPTION EXERCISE AND SHAREHOLDER RIGHTS

         6.1      Exercise Price. The exercise price per share of an Incentive
Option shall not be less than 100% of the Fair Market Value of a share of Stock
on the date the Incentive Option is granted. In the case of a Ten Percent
Shareholder, however, the exercise price of an Incentive Option shall not be
less than 110% of the Fair Market Value of a share of Stock on the date the
Incentive Option is granted. The exercise price per share of a Nonqualified
Option shall be the

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price determined by the Committee at the time that such Award is granted, and
provided such price per share shall not be less than the par value of the Stock
subject to the Award.

         6.2      Right to Exercise. An Option may be exercisable on the date of
grant or on such other date(s) established by the Committee or provided for in
an Agreement.

         6.3      Maximum Exercise Period. The maximum period in which an Option
may be exercised shall be determined by the Committee on the date of grant
except that no Incentive Option shall be exercisable after the expiration of ten
(10) years, or after the expiration of five (5) years in the case of Incentive
Options granted to a Ten Percent Shareholder, from the date an Incentive Option
was granted. An Option shall terminate and cease to be outstanding upon the
termination, for any reason, of the Participant's services to the Company or an
Affiliate as a director, officer, employee, consultant, advisor, agent,
independent contractor, or independent sales or service organization, except as
follows:

         (a)      where a Participant's services to the Company or an Affiliate
                  are terminated due to the death of a Participant, the Option
                  may be exercised after a Participant's death by a
                  Participant's designated beneficiary, a Participant's heir,
                  the legal representative of a Participant's estate or by the
                  legatee of a Participant under his last will for a period of
                  twelve (12) months from the date of a Participant's death but
                  only to the extent an Option is exercisable as of the date of
                  the Participant's death and has not otherwise expired or been
                  terminated;

         (b)      where a Participant's services to the Company or an Affiliate
                  are terminated due to a Disability of a Participant, an Option
                  may be exercised after such termination of services for a
                  period of twelve (12) months from the date of such termination
                  of services but only to the extent an Option is exercisable as
                  of the date of such termination of services and has not
                  otherwise expired or been terminated; and

         (c)      where a Participant's services to the Company or an Affiliate
                  are terminated for any reason other than by reason of death,
                  Disability or Misconduct, an Option may thereafter be
                  exercised for a period of three (3) months from the date of
                  such termination of services but only to the extent an Option
                  is exercisable as of the date of such termination of services
                  and has not otherwise expired or been terminated.

         6.4      Transferability. Any Award granted under this Plan shall not
be transferable except by will or by the laws of descent and distribution, and
shall be exercisable during the lifetime of the Participant only by the
Participant; provided, however, that a Nonqualified Option or Restricted Stock
may be transferable to the extent provided in an Agreement. No right or interest
of a Participant in any Award shall be liable for, or subject to, any lien,
obligation or liability of such Participant.

         6.5      Shareholder Rights. No Participant shall have any rights as a
shareholder with respect to shares subject to Options prior to the Date of
Exercise of such Option. A Participant's

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rights as a shareholder with respect to Restricted Stock shall be determined as
provided in Section 4.6.

         6.6      Employee Status. The Committee shall determine the extent to
which a leave of absence for military or government service, illness, temporary
disability, or other reasons shall be treated as a termination or interruption
of employment for purposes of determining questions of forfeiture and exercise
of an Award after termination of employment. With respect to an Incentive
Option, such period of unemployment that is longer than three months following
termination may be treated as employment if consistent with section 422 of the
Code pursuant to a federal statute, Treasury Regulation, or a published ruling
of the Internal Revenue Service that has general application.

         6.7      Suspension and Termination of Options. If at any time the
Committee reasonably believes a Participant may have committed an act of
Misconduct, such Participant's rights to exercise his or her Option(s) may be
suspended pending a determination by the Committee that an act of Misconduct has
been committed. If the Committee in its sole discretion determines that the
Participant has committed an act of Misconduct, then all outstanding Options
held by such Participant shall terminate immediately and cease to remain
outstanding.

                         ARTICLE VII. METHOD OF EXERCISE

         7.1      Exercise. An Option granted hereunder shall be deemed to have
been exercised on the Date of Exercise. Subject to the provisions of Articles VI
and IX, an Option may be exercised in whole or in part at such times and in
compliance with such requirements as the Committee shall determine.

         7.2      Payment. Except as otherwise provided by the Agreement,
payment of the Option price shall be made (i) in cash, (ii) where the Stock is
publicly traded on a recognized exchange or automated trading system, in Stock
that was acquired at least six months prior to the exercise of the Option, or
such shorter or longer period, if any, required by the Company's accountants to
avoid a charge to the Company's earnings for financial reporting purposes, (iii)
where the Stock is publicly traded on a recognized exchange or automated trading
system, through a special sale and remittance procedure pursuant to which the
optionee shall concurrently provide irrevocable instructions to (a) a
Company-designated brokerage firm to effect the immediate sale of the purchased
shares and remit to the Company, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate exercise price payable
for the purchased shares plus all applicable income and employment taxes
required to be withheld by the Company by reason of such exercise and (b) the
Company to deliver the certificates for the purchased shares directly to such
brokerage firm in order to complete the sale, (iv) in other consideration
acceptable to the Committee, or (v) in a combination thereof.

         7.3      Withholding Tax Requirements. Upon the exercise of an Option
or the lapse of restrictions on Restricted Stock (or, if a Participant files an
election under Section 83(b) of the Code, upon the issuance of shares of
Restricted Stock), the Participant shall, upon notification of the amount due,
pay to the Company amounts necessary to satisfy applicable federal, state and
local withholding tax requirements or shall otherwise make arrangements
satisfactory to the Company for the payment of such withholding taxes.

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         7.4      Issuance and Delivery of Shares. Shares of Stock issued
pursuant to the exercise of Options hereunder shall be delivered to Participants
by the Company (or its transfer agent) as soon as administratively feasible
after a Participant exercises an Option hereunder, or is granted Restricted
Stock, and executes any applicable shareholder agreement or agreement described
in Section 9.2 that the Company requires at the time of exercise.

                 ARTICLE VIII. ADJUSTMENT UPON CORPORATE CHANGES

         8.1      Adjustments to Shares. The maximum number of shares of Stock
with respect to which Awards hereunder may be granted, the maximum number of
shares of Stock by which the share reserve is to increase automatically each
calendar year, the maximum number of Option shares and shares of Restricted
Stock that may be granted to an individual during any calendar year, the number
of shares of Stock which are the subject of outstanding Awards, and the exercise
or purchase price of outstanding Awards shall be adjusted as the Committee
determines (in its sole discretion) to be appropriate, in the event that:

         (a)      the Company or an Affiliate effects one or more Stock
                  dividends, Stock splits, reverse Stock splits, subdivisions,
                  consolidations or other similar events;

         (b)      the Company or an Affiliate engages in a transaction to which
                  section 424 of the Code applies; or

         (c)      there occurs any other event that in the judgment of the
                  Committee necessitates such action;

         provided, however, that if an event described in paragraph (a) or (b)
         occurs, the Committee shall make adjustments to the limits on Awards
         specified in Section 5.2 that are proportionate to the modifications of
         the Stock that are on account of such corporate changes.
         Notwithstanding the foregoing, the Committee may not modify the Plan or
         the terms of any Awards then outstanding or to be granted hereunder to
         provide for the issuance under the Plan of a different class of stock
         or kind of securities.

         8.2      Substitution of Awards on Merger or Acquisition. The Committee
may grant Awards in substitution for stock awards, stock options, stock
appreciation rights or similar awards held by an individual who becomes an
employee of the Company or an Affiliate in connection with a transaction to
which section 424(a) of the Code applies. The terms of such substituted Options
shall be determined by the Committee in its sole discretion, subject only to the
limitations of Article V.

         8.3      Effect of Certain Transactions. The provisions of this Section
shall apply to the extent that an Agreement does not otherwise expressly address
the matters contained herein. If the Company experiences an event which results
in a "Change in Control," as defined in Section 8.3(a), then, whether or not the
vesting requirements set forth in any Agreement have been satisfied, (i) all
shares of Restricted Stock that are outstanding at the time of the Change in
Control shall become fully vested and all restrictions shall lapse upon the
Change in Control event, and (ii) all Options that are outstanding at the time
of the Change in Control shall become fully vested and exercisable immediately
prior to the Change in Control event.

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         (a)      A Change in Control will be deemed to have occurred for
                  purposes hereof, if:

                  (1)      any "person" as such term is used in Sections 13(d)
                           and 14(d) of the Exchange Act, other than an
                           individual who is a shareholder on the date of the
                           adoption of the Plan by the Board, becomes the
                           "beneficial owner" (as defined in Rule 13d-3 under
                           said Act), directly or indirectly, of securities of
                           the Company representing more than 50% of the total
                           voting power represented by the Company's then
                           outstanding Voting Securities (as defined below), or

                  (2)      the shareholders of the Company approve a merger or
                           consolidation of the Company with any other entity,
                           other than a merger or consolidation which would
                           result in the Voting Securities of the Company
                           outstanding immediately prior thereto continuing to
                           represent (either by remaining outstanding or by
                           being converted into Voting Securities of the
                           surviving entity) more than 50% of the total voting
                           power represented by the Voting Securities of the
                           Company or such surviving entity outstanding
                           immediately after such merger or consolidation, or

                  (3)      the shareholders of the Company approve a plan of
                           complete liquidation of the Company or an agreement
                           for the sale or disposition by the Company of all or
                           substantially all of its assets.

                  For purposes of this Section 8.3(a), "Voting Securities" of an
                  entity shall mean any securities of the entity which vote
                  generally in the election of its directors.

         (b)      In the event of a Change in Control, the Committee may
                  provide, in its discretion and on such terms and conditions as
                  it deems appropriate, either by the terms of the Agreement or
                  by a resolution adopted prior to the occurrence of the Change
                  in Control, that:

                  (1)      any outstanding Option shall be assumed by the
                           surviving corporation or any successor corporation to
                           the Company, or a parent or subsidiary thereof, or
                           other corporation that is a party to the transaction
                           resulting in the Change in Control, in which event,
                           (i) the shares of Stock subject to such Option shall
                           be substituted with the number and class of
                           securities of the successor, surviving or other
                           corporation that would have been issued to the
                           Participant in exchange for shares of the Stock
                           pursuant to the Change in Control transaction had the
                           Option been exercised prior to such transaction, (ii)
                           notwithstanding Section 8.3(b)(1)(i) hereof, the
                           number of such securities of the successor, surviving
                           or other corporation that is made subject to such
                           Option shall be adjusted as necessary so that the
                           aggregate value of such securities shall be equal to
                           the aggregate value of the consideration that would
                           have been paid or issued to the Participant in
                           exchange for the shares of Stock pursuant to the
                           Change in Control transaction had the Option been
                           exercised immediately prior to such transaction, and
                           (iii) the exercise price payable per share of Stock
                           subject

<PAGE>

                           to such Option shall be appropriately adjusted
                           provided, however, that the aggregate exercise price
                           for such Option shall remain the same;

                  (2)      any outstanding Option shall be converted into a
                           right to receive cash on or following the closing
                           date or expiration date of the Change in Control
                           transaction in an amount equal to the aggregate value
                           of the consideration that would have been paid or
                           issued to the Participant in exchange for shares of
                           the Stock pursuant to the Change in Control
                           transaction had the Option been exercised immediately
                           prior to such transaction less the aggregate exercise
                           price of such Option;

                  (3)      any outstanding Option cannot be exercised after such
                           a Change in Control; or

                  (4)      any outstanding Option shall be dealt with in any
                           other manner determined in the discretion of the
                           Committee.

         (c)      Notwithstanding anything to the contrary contained herein, a
                  change in ownership that occurs as a result of a public
                  offering of the Company's equity securities that is approved
                  by the Board shall not constitute a Change in Control.

         8.4      No Adjustment upon Certain Transactions. The issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, for cash or property, or for labor or services rendered,
either upon direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company convertible
into such shares or other securities, shall not affect, and no adjustment by
reason thereof shall be made with respect to, outstanding Awards.

         8.5      Fractional Shares. Only whole shares of Stock may be acquired
through the exercise of an Option. Any amounts tendered in the exercise of an
Option remaining after the maximum number of whole shares have been purchased
will be returned to the Participant.

                     ARTICLE IX. LEGAL COMPLIANCE CONDITIONS

         9.1      General. No Award shall be exercisable, no Stock or Restricted
Stock shall be issued, no certificates for shares of Stock shall be delivered,
and no payment shall be made under this Plan except in compliance with all
federal, state and local laws and regulations including, without limitation,
withholding tax requirements, federal and state securities laws and regulations
and the rules and regulations of any government or regulatory agency or body and
in compliance with the rules of all securities exchanges or self-regulatory
organizations on which the Company's shares may be listed, which the Committee
shall, in its discretion, determine to be necessary or applicable, in all
respects. The Company shall have the right to rely on an opinion of its counsel
as to such compliance. Any certificate issued to evidence shares of Stock issued
pursuant to this Plan may bear such legends and statements as the Committee upon
advice of counsel may deem advisable to assure compliance with federal or state
laws and regulations. No Award shall be exercisable, no Stock or Restricted
Stock shall be issued, no certificate for shares shall be delivered and no
payment shall be made under this Plan until the Company has

<PAGE>

obtained such consent or approval as the Committee may deem advisable from any
regulatory bodies having jurisdiction over such matters.

         9.2      Representations by Participants. As a condition to the
exercise of an Award, the Company may require a Participant to represent and
warrant at the time of any such exercise that the shares are being purchased
only for investment and without any present intention to sell or distribute such
shares. At the option of the Company, a stop transfer order against any shares
of Stock may be placed on the official stock books and records of the Company,
and a legend indicating that the Stock may not be pledged, sold or otherwise
transferred unless an opinion of counsel was provided (concurred in by counsel
for the Company) and stating that such transfer is not in violation of any
applicable law or regulation may be stamped on the stock certificate in order to
assure exemption from registration. The Committee may also require such other
action or agreement by the Participants as may from time to time be necessary to
comply with federal or state securities laws. This provision shall not obligate
the Company or any Affiliate to undertake registration of options or stock
hereunder.

                          ARTICLE X. GENERAL PROVISIONS

         10.1     Effect on Employment. Neither the adoption of this Plan, its
operation, nor any documents describing or referring to this Plan (or any part
thereof) shall confer upon any employee any right to continue in the employ of
the Company or an Affiliate or in any way affect any right and power of the
Company or an Affiliate to terminate the employment of any employee at any time
with or without assigning a reason therefor.

         10.2     Unfunded Plan. The Plan, insofar as it provides for grants,
shall be unfunded, and the Company shall not be required to segregate any assets
that may at any time be represented by grants under this Plan. Any liability of
the Company to any person with respect to any grant under this Plan shall be
based solely upon contractual obligations that may be created hereunder. No such
obligation of the Company shall be deemed to be secured by any pledge of, or
other encumbrance on, any property of the Company.

         10.3     Rules of Construction. Headings are given to the articles and
sections of this Plan solely as a convenience to facilitate reference. The
masculine gender when used herein refers to both masculine and feminine. The
reference to any statute, regulation or other provision of law shall be
construed to refer to any amendment to or successor of such provision of law.

         10.4     Governing Law. The internal laws of the State of Delaware
(without regard to the choice of law provisions of Delaware) shall apply to all
matters arising under this Plan, to the extent that federal law does not apply.

         10.5     Compliance with Section 16 of the Exchange Act. In the event
that any common class of equity securities of the Company becomes subject to
registration under section 12 of the Exchange Act, transactions under this Plan
are intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Exchange Act. To the extent any provision of this Plan or
action by Committee fails to so comply, it shall be deemed null and void to the
extent permitted by law and deemed advisable by the Committee.

<PAGE>

         10.6     Amendment. The Board may amend or terminate this Plan at any
time; provided, however, an amendment that would have a material adverse effect
on the rights of a Participant under an outstanding Award is not valid with
respect to such Award without the Participant's consent, except as necessary for
Incentive Options to maintain qualification under the Code; and provided,
further, that the shareholders of the Company must approve the following:

         (a)      twelve (12) months before or after the date of adoption, any
                  amendment that increases the aggregate number of shares of
                  Stock that may be issued under Incentive Options or changes
                  the employees (or class of employees) eligible to receive
                  Incentive Options.

         (b)      before the effective date thereof, any amendment that
                  increases the period during which Incentive Options may be
                  granted or exercised; and

         (c)      in the event that a common class of equity securities of the
                  Company becomes traded on an exchange or through a NASDAQ
                  market system before the effective date thereof, any amendment
                  that changes the number of shares in the aggregate which may
                  be issued pursuant to Awards granted under the Plan except
                  pursuant to Article VIII.

         10.7     Duration of Incentive Options. Incentive Option awards shall
not be made with respect to the shares of Stock specified in Section 5.2 more
than ten (10) years after the earlier of the date that the Plan is adopted by
the Board or the date that the Plan is approved by shareholders. If the number
of shares specified in Section 5.2 is increased by an amendment to this Plan,
Incentive Options may be awarded with respect to such increased shares for a
period of ten (10) years after the earlier of the date that the amendment to the
Plan is adopted by the Board or the date that the amendment is approved by
shareholders in a manner that satisfies Treasury Regulation section 1.422-5.
Incentive Options granted before such dates shall remain valid in accordance
with their terms.

         10.8     Effective Date of Plan. This Plan shall be effective on the
date of its adoption by the Board, and Awards may be granted hereunder at any
time after such adoption.

         10.9     Disputes and Dispute Resolution.

         (a)      Any and all claims arising out of or relating to the Plan, or
the Committee's administration or interpretation of the Plan with respect to any
Participant, shall be resolved by binding arbitration which shall be the sole
and exclusive method of resolving such disputes or claims and shall be in lieu
of any trial before a court of jury. The Committee, in offering an Award under
this Plan, and the Participant, in accepting any Award under the Plan, expressly
waive any and all rights to a trial before a court or jury regarding any
disputes and claims which arise from or relate to the Plan, and any Award made
under the Plan.

         (b)      Arbitration shall be conducted within Davidson County,
Tennessee or, if required by state law, in the State and County where the
Participant is employed by or provides services to the Company or an Affiliate
at the time the dispute or claim arises, before a single neutral arbitrator
selected jointly by the Committee and the Participant in accordance with the
rules of the American Arbitration Association ("AAA") rules and applicable law
then in effect.

<PAGE>

However, the standard of review to be applied by the Arbitrator shall be whether
the Committee's disputed act, omission or decision with respect to the
Participant was contrary to any Plan provision or otherwise arbitrary and
capricious.

         (c)      To the extent that any of the provisions of this Section 10.7
or the AAA Rules conflicts with applicable law for the arbitration of contract
disputes, the provisions or procedures required by applicable law shall govern.

                                    EXECUTION

         IN WITNESS WHEREOF, the undersigned officer has executed this Plan on
this the [INSERT DATE].

                                      IPAYMENT, INC.

                                      By: /s/ Gregory S. Daily
                                          --------------------------------------

                                      Its: CEO