Document:

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                                                                    EXHIBIT 10.3

Dear Rob,

As per our discussion, the Simmons Company will assist with your relocation to
CITY LOCATION as detailed in the guidelines below. Upon receipt of this
agreement, the Simmons Company will notify our APPROVED RELOCATION vendors who
will initiate contact with you. To ensure timely attention to your relocation,
please provide your current contact information at the end of this form. If you
have any questions regarding your relocation assistance package, please contact
the Corporate Recruiter in the Human Resources department.

Home finding: Simmons will reimburse the associate for the costs of two (2)
house-hunting trips for you and your spouse. This includes coach round-trip
travel, reasonable lodging, meals, and local transportation for up to a maximum
of eight (8) days and nine (9) nights. If a personal automobile is used, mileage
will be reimbursed at the current mileage allowance rate.

Temporary Living: You will be reimbursed for temporary living expenses for up to
a sixty (60) day maximum. If an extension is required, it will need to be
approved by your manager and the Executive VP of Human Resources. Temporary
living expenses are defined as lodging and meals not to exceed $150 per day. If
there is a necessary extended delay in family relocation, Simmons will reimburse
the cost of a round-trip, economy class airfare, or personal automobile use, for
you to return home at two-week intervals for a maximum of 3 three trips.

Movement of Household Goods: The cost of packing, crating, insuring, and
movement of household goods will be the responsibility of the Simmons Company.
The Corporate Distribution and Traffic Department will handle all arrangements
for the movement of household goods. The Corporate Recruiter will verify
authorization of your move with the traffic department. Any further
communication with regard to the movement of your household goods will be
between you and the traffic department.

Where temporary storage of household goods is necessary, Simmons will pay such
charges up to a maximum of 90 days. Local moving charges to remove household
goods from storage will be paid by Simmons if the charges occur within that
90-day period only.

Simmons will pay to transport one automobile by van and will pay mileage at the
current rate to transport a second automobile unless this is a cross-country
move, in which case Simmons will pay to transport two (2) automobiles by van.
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Simmons will not pay for the moving of aircraft, boats, house trailers, animals,
firewood, plants, shrubbery, or combustible items such as building materials,
alcoholic beverages, articles of extraordinary value (jewelry, precious stones,
stamp collections, wills, stocks, etc...), frozen food or the contents of deep
freezers requiring special refrigerated service, or any items requiring special
handling or equipment. The Executive VP of Human Resources must make any
exceptions to this provision.

Travel to New Location: Simmons will reimburse the costs of transportation,
lodging, and meals for you and your family when traveling to the new location.
You will be reimbursed at the current mileage rate for up to two (2)
automobiles. The most direct route to the new location should be used. If you
drive only one (1) automobile, a second automobile may be shipped as a part of
your household goods move.

In the case of a cross-country move, costs will be reimbursed by Simmons and are
not to exceed the cost of coach/standard airfare and the cost of the shipment of
two (2) automobiles.

Lease Cancellation and Rental Agreements: If you rent at your old place of
residence, Simmons will reimburse you for any forfeiture of deposit, penalty, or
additional rent paid as a result of breaking or terminating a lease in order to
relocate. The maximum reimbursable amount is the equivalent of two (2) months
rent.

Sale of Home in Old Location: Simmons Company will reimburse you for normal
agent's commissions and reasonable legal fees connected with sale of the present
home. Closing costs paid by you as the seller as an inducement to the purchaser
are not reimbursable.

Purchase of New Residence: If you own a home at the old location and purchase at
the new location, you will be reimbursed for the normal expenses associated with
the purchase. Reimbursement will be limited to a period of one (1) year from the
date of the assignment at the new location. Reimbursable expenses, commonly
known as closing costs, can include:

        o  Survey charge
        o  Home inspection report fee
        o  Title search and title insurance fee
        o  Legal, attorney, or escrow agent fees
        o  Transfer fees or transfer taxes
        o  Recording fees
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   Up to a total of 2% of the mortgage amount for any one of any combination of
the following:
        o  Origination Fees
        o  Application Fees
        o  Processing Fees
        o  Commitment Fees

Loss of Annual Fees: Consideration will be given for reimbursement on a pro-rata
basis for certain prepaid items such as annual memberships or tuition, which
cannot be recovered and which cannot be utilized because of the move.
Documentation and signed approval by the Hiring Manager and the Human Resources
Manager will be required for reimbursement.

Allowance for Miscellaneous Items: To assist you with miscellaneous expenses
incurred during your move, Simmons will pay a $1,500 special allowance. This
allowance is paid approximately one week before your move to the new location.
The amount is put on an expense report, signed off by the Hiring Manager, and
then sent to the Corporate Recruiter for approval and processing.

Tax Assistance (Gross-Up): A tax gross-up will be added to the portion of
relocation expense reimbursements that are taxable, but not deductible. There
will be no gross-up on those expenses, which are deductible by the associate.

Tax Regulations Applicable to Moving Expenses: IRS regulations require that all
moving expenses reimbursed or paid on behalf of the Simmons Company must be
included in your taxable income. Please contact the Simmons Tax Department in
the event that you have questions regarding taxable relocation expenses per IRS
guidelines.

Expense Report Procedures: All requests for reimbursement should be made via
expense report, which should be approved by the new manager and forwarded to the
Corporate Recruiter for final review and approval. All expenses claimed should
be supported by appropriate documentation. Please note that no expenses will be
paid until the Corporate Recruiter receives an executed copy of the Voluntary
Separation Form from the relocating associate.

Simmons Company will provide you with the Relocation Assistance Package as
indicated above to pay for your moving related expenses, reimbursable through
submitting expense reports and receipts. This is a complete agreement regarding
your relocation assistance package and supersedes all

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prior agreements, and can only be amended in writing signed by you and the
Executive VP of Human Resources.

Read and Agreed:
/s/ Rob Burch                                                 July 18, 2005

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NAME AND DATE

Street Address:

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City, State, and Zip:

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Home Phone:

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Personal Email Address:

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CORPORATE HUMAN RESOURCES

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EXHIBIT 10.1

             COMPENSATION ARRANGEMENTS FOR SPECIAL COMMITTEE MEMBERS

      On May 16, 2005, the Board of Directors of iPayment, Inc. (the "Company")
established a Special Committee of the Board of Directors (the "Special
Committee") to evaluate the non-binding proposal from a newly-formed entity,
wholly-owned by Gregory S. Daily, iPayment's Chairman and Chief Executive
Officer, to acquire all of the Company's outstanding shares for a cash price of
$38.00 per share and any alternative transactions. On June 28, 2005, the
compensation to be provided to members of the Special Committee for their
services on the Special Committee was set pursuant to a resolution of the Board
of Directors at (i) $10,000 per month and (ii) $1,000 per meeting attended by a
member in person. In addition, the Chairman of the Special Committee will
receive an additional payment of $25,000 for his time and efforts as the
Chairman of the Special Committee.

      The compensation provided to the Special Committee's members shall
continue, unless the Board of Directors decides otherwise, until a definitive
merger agreement, agreement to sell all the outstanding shares of the Company or
other agreement resulting in a Rule 13e-3 transaction has been entered into.

                                  Page 22 of 26Ex-10.1

 

Exhibit 10.1

Amendments dated May 24, 2005 and May 31, 2005

to Amended and Restated 1997 Director Stock Option Plan

Option grants for the directors re-elected at the May 24, 2005 Annual Meeting of Stockholders shall
be granted on May 31, 2005.

Section 8, definition of “Option Price,” shall be amended and restated as follows:

“Option Price. The option price for each option granted under this Plan shall be the price
described below under the definition “Period of Exercise.”

Section 8, definition of “Period of Exercise,” shall be amended and restated as follows:

“Period of Exercise. Options granted under the Plan shall become exercisable in the following five
installments:

	•	 	50% shall become exercisable on December 31 of the year in which the grant is made, at an
exercise price equal to the closing price of the Common Stock as reported on the Nasdaq
National Market (“Nasdaq”) (or the principal over the counter market or exchange on which the
Company’s Common Stock is then traded, or the current fair market value of a share of Common
Stock of the Company as determined by the Board of Directors in good faith if the Company’s
Common Stock is not traded on Nasdaq or any exchange) on the last trading date prior to the
date of grant (the “First Tranche Price”);

	•	 	16.67% shall become exercisable on the first anniversary of the date of grant, at an exercise
price equal to the First Tranche Price;

	•	 	16.67% shall become exercisable on the second anniversary of the date of grant, at an
exercise price equal to the First Tranche Price multiplied by 1.05 (the “Second Tranche
Price”); and

	•	 	16.66% shall become exercisable on the third anniversary of the date of grant, at an exercise
price equal to the Second Tranche Price multiplied by 1.05 (the “Third Tranche Price”);

in each case, if and only if the option holder is a member of the Board at the opening of business
on that day. Directors holding exercisable options under the Plan who cease to serve as members of
the Board of the Company for any reason other than death may, for a period of seven months
following the date of cessation of service, exercise the rights they had under such options at the
time they ceased being a Director. Any rights that have not yet become exercisable shall terminate
upon cessation of membership on the Board. Upon the death of a Director, those entitled to do so
under the Director’s will or the laws of descent and distribution shall have the right, at any time
within twelve months after the date of death, to exercise in whole or in part any rights which were
available to the Director at the time of his death. The rights of the option holder may be
exercised by the holder’s guardian or legal representative in the case of disability and by the
beneficiary designated by the holder in writing delivered to the Company or, if none has been
designated, by the holder’s estate or his or her transferee on death in accordance with this Plan,
in the case of death. Options granted under the Plan shall terminate, and no rights thereunder may
be exercised, after the expiration of the applicable exercise period. Notwithstanding the foregoing
provisions, no rights under any options may be exercised after the expiration of ten years from
their Date of Grant.”

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