Exhibit 10.7
(ONLINE RESOURCES LOGO) [w81971w8197103.gif]
June 14,2010
Joseph L. Cowan
5212 Legends Dr
Braselton, GA 30517-4012
Dear Joe,
     On behalf of Online Resources Corporation (the “Company”) and its Board of
Directors (the “Board”) I am pleased to offer you the position of President and
Chief Executive Officer of the Company, subject to the terms and conditions of
this letter agreement (the “Letter Agreement”). Upon acceptance of this offer
and satisfaction of any conditions herein, you will also be nominated to serve
as a member of the Board.
     1. Position: Duties.
     (a) Your employment with the Company will commence on June 15, 2010 (the
“Effective Date”). You will be the President and Chief Executive Officer of the
Company, reporting to the Board, and will perform such duties and
responsibilities commensurate with your position as may be determined from time
to time by the Board. Your primary office will be located at the Company’s
headquarters in Chantilly, Virginia; provided, however, that in the performance
of your duties and responsibilities you will be expected to travel as needed in
connection with the Company’s businesses. You agree to be bound by the policies
and procedures of the Company as in effect from time to time relating to the
conduct of employees.
     (b) By signing this Letter Agreement, you represent and warrant to the
Company, as of the date hereof and as of the Effective Date, that you are not
under, subject to or otherwise obligated by any contractual commitments
(including, without limitation, any non-competition, non-solicitation,
proprietary information and inventions, shareholders’, investors’ or similar
agreements) that will be inconsistent with your obligations to the Company or
that would be breached by or would prevent or interfere with your execution of
this Letter Agreement or your obligations under this Letter Agreement to the
Company.
     2. Salary. You shall be paid a salary at the annual rate of Five Hundred
Thousand and 00/100 Dollars ($500,000.00) (the “Base Salary”), payable in
accordance with the Company’s standard payroll practices for salaried employees.
The Base Salary shall be reviewed by the Management Development and Compensation
Committee of the Board (the “MD&C Committee”) based upon your performance not
less often than annually. However, your Base Salary cannot be decreased without
mutual agreement between you and the MD&C Committee.
     3. Performance Bonus. During your employment with the Company, you shall be
eligible to receive an annual performance bonus (the “Performance Bonus”) under
the Company’s Annual Incentive Plan (or a successor plan, if any) (the “Annual
Incentive Plan”), in accordance with such terms and conditions as may be in
effect from time to time, and, as applicable, consistent with the terms and
conditions applicable to other senior executives of the Company. Your
Performance Bonus shall have a
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target amount of One Hundred Percent (100%) of your Base Salary, and a maximum
amount of One Hundred Fifty Percent (150%) of your Base Salary, subject to the
achievement of certain performance goals and objectives (the “Performance
Goals”) and such other terms and conditions as may be established from time to
time by the MD&C Committee.
     Notwithstanding the foregoing, your Performance Bonus for 2010, if any,
shall be subject to the achievement of the Performance Goals for 2010 that have
previously been established by the MD&C Committee for other senior executives of
the Company and the amount of the Performance Bonus payable to you will be
pro-rated based on the period of your employment from the Effective Date through
December 31, 2010, In addition, your Performance Bonus for 2010, if any, shall
be paid to you no later than December 31, 2010, based on the interim results of
the applicable Performance Goals as of the date payment is made; provided,
however, that such payment will be subject to adjustment (either upwards or
downwards) at the time that Performance Bonuses for 2010, if any, would
generally be paid to employees under the Annual Incentive Plan based on the
final results of the Performance Goals, as certified by the MD&C Committee.

4.   Equity Awards. Upon your commencement of employment, it shall be
recommended to the Board that you be granted the following equity awards:

     (a) Equity Incentive Awards. In connection with your employment with the
Company for 2010, you shall be granted on the second business day following the
Effective Date that number of (i) options to purchase shares of common stock of
the Company (the “Common Stock”) with a value, measured as of the grant date,
equal to $750,000 (based on Black Scholes option pricing methodology) (the
“Stock Options”) and (ii) restricted shares of Common Stock with a value,
measured as of the grant date, equal to $1,000,000 (the “Restricted Stock”) on
such terms and conditions as set forth in an award agreement consistent the
terms of this Letter Agreement and the other terms generally applicable to the
senior executives of the Company. The Stock Options shall have an exercise price
equal to the closing price of a share of Common Stock on the grant date. The
Stock Options and Restricted Stock shall vest on a pro rata basis in four
substantially equal installments commencing on the first anniversary of the
Effective Date, subject to your continued employment with the Company through
each applicable vesting date. Subject to the terms and conditions of the
applicable award agreements and this Letter Agreement, in the event of the
termination of your employment or resignation, any outstanding unvested Stock
Options and Restricted Stock then held by you will be automatically forfeited
and cancelled as of the date of your termination of employment or resignation,
as the case may be, without payment to you. During your employment with the
Company after 2010, you shall be eligible to receive an annual grant of
equity-based awards under the Company’s 2005 Amended and Restated Restricted
Stock and Option Plan (or a successor plan, if any) (the “Equity Plan”), in
accordance with such terms and conditions as may be in effect from time to time,
and, as applicable, consistent with the terms and conditions applicable to other
senior executives of the Company. The amount and size of any subsequent grants
will be determined in the discretion of the MD&C Committee based on such factors
and conditions as it deems appropriate (including, without limitation, the
amount and size of prior equity-based awards made to you any and benchmark
compensation studies undertaken by the MD&C Committee).
     (b) Share Purchase. In connection with your employment with the Company, on
the second business day following the Effective Date (the “Purchase Date”), you
will purchase from the Company in a private transaction that number of shares of
Common Stock (the “Purchased Shares”) with a value, equal to $500,000 based on
the closing price of the Common Stock on Purchase Date as reported on NASDAQ
(the “Share Purchase”). In connection with the Share Purchase, you shall be
granted on the Purchase Date a number of shares of Common

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Stock equal to the number of Purchased Shares (the “Company Match Shares”). The
Company Match Shares shall folly vest on the nine-month anniversary of the
Purchase Date. In the event of the termination of your employment or
resignation, any outstanding unvested Company Match Shares then held by you will
be automatically forfeited and cancelled as of the date of your termination of
employment or resignation, as the case may be, without payment to you.
Notwithstanding the foregoing, you may not sell, transfer, pledge, assign or
otherwise dispose of the Company Match Shares and the Purchased Shares until
after your termination of employment or resignation, as the case may be, and in
any event in accordance with applicable Company policies. The terms and
conditions of the Share Purchase and the Company Match Shares will be set forth
in a share purchase agreement and in an award agreement consistent the terms of
this Letter Agreement and the other terms generally applicable to the senior
executives of the Company for similar awards.
     5. Other Benefits. During your employment with the Company, you shall be
eligible to participate in the Company employee benefit plans and arrangements
made available to senior executives of the Company, including, without
limitation, paid vacation time of no less than 20 days per calendar year (or a
proportionate number of days for any calendar year in which you are employed for
a period less than a full calendar year) plus the number of regular holidays and
sick days granted to Company employees, in accordance with the terms and
conditions applicable to other senior executives. Except as otherwise specified
in this Letter Agreement, such plans are subject to change or termination from
time to time at the discretion of the Board.
     6. General Expense Reimbursement. During your employment with the Company,
the Company shall reimburse you for all reasonable business-related expenses
that you incur on the Company’s behalf, in accordance with the standard policies
and procedures established by the Company as in effect from time to time. In
addition, the Company shall provide you with up to $36,000 per calendar year
(pro rated for the period in which you are employed in 2010) for reasonable
costs and expenses that you may incur for temporary housing and automobile
expenses, in accordance with the standard policies and procedures established by
the Company as in effect from time to time.
     7. Termination of Employment.
     (a) Employment at Will. You are being offered employment with the Company
for an unspecified period of time and this Letter Agreement will create an
at-will employment relationship that may be terminated by you or the Company at
any time and for any reason.
     (b) Termination of Employment other than for Cause or for Good Reason.
Subject to the provisions of this Letter Agreement and except in the event of
your termination on or after a Change in Control as provided in Paragraph 7(c),
if your employment with the Company (A) is terminated by the Company for any
reason other than (I) for “Cause” (as defined in Exhibit A) or (II) as a result
of your “Disability” (as defined in Exhibit A); or (B) is terminated by you for
Good Reason (as defined in Exhibit A), your severance benefits shall be as
follows:
     (i) Severance payment. On the first regular payroll date concurrent with or
following the date that is thirty (30) days after your “Date of Termination” (as
defined in Exhibit A), the Company shall make a single-sum cash payment to you
in an amount equal to the product of (A) the sum of (x) your average annual Base
Salary for the three complete fiscal years of the Company immediately preceding
the fiscal year in which the Date of Termination occurs, plus (y) your average
annual cash bonus target for the three complete fiscal years of the Company
immediately preceding the fiscal year in which the Date of Termination occurs,
times (B) the ratio, the numerator of which is the number of

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months in the “Severance Period” (as defined in Exhibit A) and the denominator
of which is 12. In the event that you are not employed by the Company for three
complete fiscal years preceding the fiscal year in which the Date of Termination
occurs, your Base Salary and annual cash bonus target for the period of your
employment will be used to determine such average amounts, provided that if you
are employed by the Company for less than one complete fiscal year, your Base
Salary and annual cash bonus target for such fiscal year will be annualized. In
addition, within 90 days after the end of the fiscal year in which the Date of
Termination occurs, the Company shall make a single-sum cash payment to you in
the amount equal to the product of (x) the cash bonus that you would have
received for the fiscal year in which the Date of Termination occurred had no
termination occurred, based upon the amount accrued for such bonus for financial
statement accounting purposes, times (y) the ratio, the numerator of which is
the number of days in the fiscal year in which the Date of Termination occurred
during which you were employed and the denominator of which is 365.
     (ii) Vesting of Equity Awards. Any outstanding stock options, restricted
stock or other equity awards (the “Equity Awards”) that have been made to you
under any equity compensation plan of the Company or otherwise that have not
already vested (but, in any event, not including the Company Match Shares, which
vest pursuant to Paragraph 4(b), hereinabove) shall continue to vest and become
non-forfeitable as if you had remained employed during the Severance Period; and
     (iii) Continued Benefit Coverage. If you timely elect to continue coverage
under the Company’s health benefit plan (including medical, dental and vision
insurance) pursuant to the continuation provisions of the Internal Revenue Code
of 1986, as amended (the “Code”) and ERISA (“COBRA”), for the duration of the
period during which you keep the COBRA continuation coverage in effect, or, if
shorter, the Severance Period, the maximum premium yqu will be required to pay
for any month of coverage will be the premium charged to active employees of the
Company for comparable coverage.
     (iv) Release of Claims. Notwithstanding the foregoing provisions of this
Paragraph 7(b), and as a condition precedent to the Company’s obligations
thereunder, not later than the payment date described in Paragraph 7(b)(i), you
shall provide the Company a valid, executed, general release of claims in the
form attached as Exhibit B, and such release shall have not been revoked and
shall have become effective in accordance with its terms.
     (c) Termination of Employment Following a Change of Control. Subject to the
provisions of this Letter Agreement, if your employment with the Company is
terminated on or after a Change in Control under the circumstances set forth
below, your entitlement to any severance benefits shall be as follows:
     (i) Severance Benefits, In the event your employment with the Company is
terminated during the period beginning on the date of a Change in Control and
ending on the twelve (12) month anniversary of the date of such Change in
Control 0) by the Company other than for “Cause” (as defined in Exhibit A) or as
a result of your “Disability” (as defined in Exhibit A) or (II) by you for “Good
Reason” (as defined in Exhibit A), the Company shall pay or provide you with the
following payments and other compensation:

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     (A) Severance Payment. Within thirty (30) days after your “Date of
Termination” (as defined in Exhibit A), the Company shall make a single-sum cash
payment to you in an amount equal to the sum of (i) 1.5 times your average
annual base salary for the three complete fiscal years of the Company
immediately preceding the fiscal year in which the Date of Termination occurs,
plus (ii) 1.5 times your average annual cash bonus target for the three complete
fiscal years of the Company immediately preceding the fiscal year in which the
Date of Termination occurs. In the event that you are not employed by the
Company for three complete fiscal years, your base salary and annual cash bonus
target for the period of your employment will be used, provided that if you are
employed by the Company for less than one complete fiscal year, your base salary
and annual cash bonus target for such fiscal year will be annualized. In
addition, within 90 days after the end of the fiscal year in which the Date of
Termination occurs, the Company shall make a single-sum cash payment to you in
the amount equal to the product of (x) the cash bonus that you would have
received for the fiscal year in which the Date of Termination occurred had no
termination occurred, based upon the amount accrued for such bonus for financial
statement accounting purposes, times (y) the ratio, the numerator of which is
the number of days in the fiscal year in which the Date of Termination occurred
during which you were employed and the denominator of which is 365.
     (B) Vesting of Equity Awards. Notwithstanding any provisions of this Letter
Agreement or any plans or other agreements to the contrary, in the event that
your Date of Termination following a Change in Control occurs on or after the
twelve (12) month anniversary of the Effective Date, any outstanding stock
options, restricted stock or other equity awards (the “Equity Awards”) that have
been made to you under any equity compensation plan of the Company (but, in any
event, not including the Company Match Shares) shall vest and become
non-forfeitable as follows: (I) if the per-share price at which the Common Stock
is sold by the Company in the transaction constituting the Change in Control
(or, if no Common Stock is sold by the Company in the such transaction, the
average of the closing prices of the Common Stock as reported on NASDAQ on the
30 trading days next preceding the date of the Change in Control) (the “Share
Price”) is equal to less than $7 per share, fifty (50%) percent of your then
outstanding unvested Equity Awards shall vest; (II) if the Share Price is equal
to or more than $9 per share, one hundred (100%) percent of your then
outstanding unvested Equity Awards shall vest; and (III) if the Share Price is
between $7.00 per share and $9.00 per share, the percentage of your then
outstanding unvested Equity Awards that shall vest will be interpolated on a
straight line basis between fifty (50%) percent and one hundred (100%) percent.
     (C) Continued Benefit Coverage. If you timely elect to continue coverage
under the Company’s health benefit plan (including medical, dental and vision
insurance) pursuant to the provisions of continuation provisions of the Internal
Revenue Code of 1986, as amended (the “Code”) and ERISA (“COBRA”), for the
duration of the period during which you keep the COBRA continuation coverage in
effect, or, if shorter, for 18 months, the maximum premium you will be required
to pay for any month of coverage will be the premium charged to active employees
of the Company for comparable coverage.

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     (ii) Section 280G of the Code.
     (A) In the event that it is determined that the severance benefit payable
to you pursuant to Paragraph 7(c)(i), when added to any other payment or benefit
to you from the Company that would be considered a “parachute payment” (a
“Parachute Payment”), within the meaning of Section 280G of the Code, would
cause you to be considered to receive an “excess parachute payment” within the
meaning of Section 280G of the Code (an “Excess Parachute Payment”), the amount
payable to you pursuant to Paragraph 7(c)(i) will be reduced to the maximum
amount that, when added to any other Parachute Payments made to you, could be
paid to you without causing you to receive an Excess Parachute Payment.
Notwithstanding the foregoing, the severance benefit payable to you pursuant to
Paragraph 7(c)(i) will not be reduced if (I) the net amount payable to you
without the reduction described in the preceding sentence, but reduced by all
Federal, state and local income and employment taxes payable by you on the
severance benefit payable pursuant to you and all other Parachute Payments dIus
the excise tax payable on the Excess Parachute Payment pursuant to Section 4999
of the Code, is greater than (II) the net amount that would be payable to you
with the reduction described in the preceding sentence and reduced by all
Federal, state and local income and employment taxes payable by you on the
severance benefit payable pursuant to Paragraph 7(c)(i) and all other Parachute
Payments.
     (B) For purposes of this clause (ii), you will be deemed to pay Federal
income tax and employment taxes at the highest marginal rate of Federal income
and employment taxation in the calendar year in which the Excess Parachute
Payment would occur and state and local income taxes at the highest marginal
rate of taxation in the state and locality of your residence in the calendar
year in which the Excess Parachute Payment would be made, net of the reduction
in Federal income taxes that you may obtain from the deduction of such state and
local income taxes. In addition, all determinations to be made under this clause
(ii) will be made by the Company’s independent public accountant (the
“Accounting Firm”) immediately before the date the severance benefit under
Paragraph 7(c)(i) is to be paid. The Accounting Firm will provide its
determinations and any supporting calculations and workpapers both to the
Company and to you within ten (10) days of such date, and any such determination
by the Accounting Firm will be binding upon the Company and you.
     (iii) Expense; Legal Fees. If you commence a legal action to enforce any of
the obligations of the Company under this Paragraph 7 and it is ultimately
determined that you are entitled to any payments or benefits under this
Paragraph 7, the Company shall pay you the amount necessary to reimburse you in
full for all reasonable expenses (including reasonable attorneys’ fees and legal
expenses) incurred by you with respect to such action.
     (d) Notice of Termination. Any purported termination of your employment
(other than by reason of death) will be communicated by a written “Notice of
Termination” (as defined in Exhibit A) from one party to another in accordance
with Paragraph 15. Notwithstanding anything to the contrary in this Paragraph 7,
no termination for Cause will be effective without (I) reasonable notice to you
setting forth the reasons for the Company’s intention to terminate, and (II) an
opportunity for you to cure or correct any such breach within twenty (20) days
after receipt

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of such notice. Notwithstanding anything to the contrary in this Paragraph 7, no
termination for Good Reason will be effective unless (l)you have delivered to
the Company a Notice of Termination in accordance with this clause (iii) within
thirty (30) days after the occurrence of the event or circumstance which
constitutes Good Reason, and (II) the Company has been afforded an opportunity
to cure or correct such event or circumstance within twenty (20) days after
receipt of such notice.
     (e) No Mitigation. Your right to the severance benefit payable pursuant to
Paragraph 7 is not subject to any requirement that you seek other employment or
otherwise attempt in any way to reduce any amounts payable to you pursuant to
Paragraph 7. Further, the amount payable to you shall not be reduced by any
compensation or income earned by you as the result of employment by another
employer or self-employment, by retirement benefits, by offset against any
amount claimed to be owed by you to the Company, or otherwise.
     (f) Effect of Termination. The termination of your employment for any
reason will constitute your resignation from (i) any director, officer or
employee position you have with the Company or any affiliate thereof and
(ii) all fiduciary positions (including as a trustee) you hold with respect to
any employee benefit plans or trusts established by the Company or any affiliate
thereof. You hereby agree that this Letter Agreement will serve as written
notice of resignation in this circumstance.
     8. Outside Activities.
     (a) Exclusive Services. During your employment with the Company, you agree
to devote substantially all of your professional time, attention and efforts to
the performance of your duties under this Letter Agreement, and will not render
services to any other business without the written consent of the Board. You may
serve on civic or charitable boards or engage in charitable activities without
remuneration therefor subject to the prior approval of the Board, which shall
not be unreasonably withheld. The Company recognizes that you serve as a member
of the board of directors of Blackboard Corporation and consents to your
continued service on that board. The Board, however, reserves the right to
require you to resign from any board or similar body on which you may serve, if
it determines in good faith that your service on such board interferes with the
effective discharge of your duties and responsibilities to the Company as
contemplated by Paragraph l(a) or that any business related to such service
contravenes the requirements of Paragraph 8(b) or the Confidentiality and
Non-Disclosure Agreement (as set forth in Paragraph 9). In addition, you will
not own, directly or indirectly, any capital stock of any company which is in
competition with any line of business conducted by the Company or its
affiliates; provided, however, that you may own, directly or indirectly, up to
one percent (1%) of the outstanding capital stock of any publicly traded
corporation.
     (b) Non-Competition. During your employment and for twelve (12) months
following your termination of employment or resignation for any reason, you will
not, directly or indirectly, engage in (whether as an employee, consultant,
agent, advisor, proprietor, principal, partner, stockholder, corporate officer,
director or otherwise), nor have any direct or indirect ownership interest in,
or directly or indirectly participate in the financing, operation, management or
control of, any person, firm, corporation or business that is engaged in
providing web- and phone-based payment services to financial institution,
biller, card issuer and creditor clients (a “Competing Business”); provided that
you may purchase and hold only for investment purposes less than one percent
(1%) of the shares of any corporation in a Competing Business whose shares are
regularly traded on a national securities exchange.

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     (c) Non-Solicitation. During your employment and for twenty-four (24)
months following your termination of employment or resignation for any reason,
you will not, directly or indirectly, induce or attempt to induce any customer,
client, supplier, licensee or other person or entity then having a business
relationship with the Company or any of its affiliates (collectively, the
“Company Group”) to cease doing business with any member of the Company Group,
or in any way knowingly interfere with the relationship between any member of
the Company Group and any customer, client, supplier, licensee or other business
relationship. As used herein, the term "indirectly" will include, without
limitation, the authorized use of your name by any competitor of the Company or
any member of the Company Group to induce or interfere with any business
relationship of the Company or any member of the Company Group.
     9. Other Covenants. In connection with your entering into this Letter
Agreement, you agree to execute and deliver to the Company the Confidentiality
and Non-Disclosure Agreement attached hereto as Annex A (the “Confidentiality
and Non-Disclosure Agreement”).
     10. Material Inducement; Certain Remedies, You acknowledge and agree that
the covenants entered into by you pursuant to Paragraphs 8 and 9 are essential
elements of the parties’ agreement as expressed in this Letter Agreement, are a
material inducement for the Company to enter into this Letter Agreement and the
breach of any of those covenants would be a material breach of this Letter
Agreement. You further acknowledge and agree that the Company’s remedies at law
for a breach or threatened breach of any of the provisions of Paragraph 8 or the
Confidentiality and Non-Disclosure Agreement would be inadequate. In recognition
of this fact, you agree that, in the event of such a breach or threatened
breach, in addition to any remedies at law, the Company will be entitled to
obtain equitable relief in the form of temporary restraining order, temporary or
permanent injunction or any other equitable remedy which may then be available,
without bond or security, restraining you from engaging in the activities
prohibited by Paragraph 8 or the Confidentiality and Non-Disclosure Agreement,
or such other relief as may be required specifically to enforce this Letter
Agreement. In addition to any other remedies that may be available to the
Company, if following your termination of employment or resignation for any
reason you breach any of the provisions of Paragraphs 8 or the Confidentiality
and Non-Disclosure Agreement, the Company may cease providing you with the
payments and benefits set forth in Paragraph 7 and any and all obligations of
the Company will cease.
     11. Withholding. All forms of compensation referred to in this Letter
Agreement are subject to reduction to reflect applicable withholding and payroll
taxes and any other legal deduction or withholding requirement.
     12. Section 409A of the Code.
     (a) This Letter Agreement is intended to meet the requirements of
Section 409A of the Code and will be interpreted and construed consistent with
that intent. For purposes of this Letter Agreement, the terms “terminate,”
“terminated” and “termination” mean a termination of your employment that
constitute a “separation from service” within the meaning of the default rules
of Section 409A of the Code.
     (b) Notwithstanding any other provision of this Letter Agreement, to the
extent that the right to any payment (including the provision of benefits)
hereunder provides for the “deferral of compensation” within the meaning of
Section 409A(d)(l) of the Code, the payment shall be paid (or provided) in
accordance with the following:
     (i) If you are a “Specified Employee” within the meaning of Section
409A(a)(2)(B)(i) of the Code on the date of your termination of employment, then
no

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such payment will be made or commence during the period beginning on the date of
termination and ending on the date that is six (6) months following the date of
termination or, if earlier, on the date of your death. The amount of any payment
that would otherwise be paid to you during this period shall instead be paid on
the fifteenth (15th) day of the first calendar month following the end of the
period.
     (ii) For the purposes of clarification, any payments that are subject to
Section 409A of the Code will not include any payments on the occurrence of an
involuntary termination of employment that would satisfy the short-term deferral
exclusions described in Section 1.409A-1(b)(4) of the Treasury Regulations or
the separation pay exception described in Section 1.409A-1(b)(9) of the Treasury
Regulations; and such payments shall be made to you immediately upon your
termination.
     (iii) Payments with respect to reimbursements of expenses shall be made on
or before the last day of the calendar year following the calendar year in which
the relevant expense is incurred. The amount of expenses eligible for
reimbursement during a calendar year may not affect the expenses eligible for
reimbursement in any other calendar year.
     (c) Notwithstanding any provision of this Letter Agreement to the contrary,
if any provision of this Letter Agreement contravenes any regulations or
guidance promulgated under Section 409A of the Code or would cause any person to
be subject to additional taxes, interest and/or penalties under Section 409A of
the Code, such provision of this Letter Agreement shall be deemed void ab initio
and the parties shall negotiate in good faith to replace the non-compliant
provisions with compliant provisions under Section 409A of the Code.
     13. Initial Grant of Equity Awards. The Stock Options, Restricted Stock and
Company Match Shares granted to you pursuant to Paragraph 4 will be granted
outside of the Equity Plan in accordance with NASDAQ Listing Rule 5635(c)(4) as
an inducement to you to enter into employment with the Company.
     14. Entire Agreement. This Letter Agreement, including the referrals herein
to other documents, plans and agreements, contain all of the terms of your
employment with the Company and supersede, as of the date hereof, any prior
understandings or agreements, whether oral or written, between you and the
Company or its affiliates.
     15. Notices. Notices and all other communications provided for in this
Letter Agreement shall be in writing and shall be addressed, if to you, to the
address on file with the Company and, if to the Company, to the address set
forth below, 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 actual receipt:
To the Company:
Online Resources Corporation
4795 Meadow Wood Lane
Chantilly,VA 20151
Attention: General Counsel

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All such notices shall be conclusively deemed to be received and shall be
effective (i) if sent by hand delivery, upon receipt or (ii) if sent by
electronic mail or facsimile, upon of receipt by the sender of such
transmission.
     16. Successors and Assigns. All covenants, promises and agreements by or on
behalf of the Company contained in this Letter Agreement will inure to the
benefit of, and be binding upon, the successors and assigns of the Company. This
Letter Agreement is personal to you and will not be assignable or delegable by
you other than by will or the laws of descent and distribution. This Letter
Agreement (including any post-termination payment obligations) will inure to the
benefit of and be enforceable by your heirs (in the event of your death) and
legal representatives. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company expressly to
assume this Letter Agreement and all obligations of the Company hereunder in the
same manner and to the same extent that the Company would be so obligated if no
such succession had taken place.
     17. Miscellaneous.
     (a) Please be advised that your offer of employment is contingent upon the
satisfactory completion of the Company’s employee on-boarding process, including
criminal and civil background checks and drug testing.
     (b) Attorneys’ Fees. The Company shall reimburse you for reasonable
attorney fees in an amount not to exceed $5,000 incurred in negotiating and
finalizing this Letter Agreement.
     18. Amendment, Governing Law, and Venue. Subject to Paragraph 12(c), this
Letter Agreement may not be amended or modified except by an express written
agreement signed by you and a duly authorized officer of the Company. The terms
of this Letter Agreement and the resolution of any disputes will be subject to
Delaware law.

10

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     Joe, we hope that you find the foregoing terms acceptable. We are very
excited to have you join the Company. You may indicate your agreement with these
terms and accept this offer by signing and dating the enclosed duplicate
original of this Letter Agreement and returning them to me.
     We look forward to having you join us.

            Very truly yours,
      By:   /s/ John Dorman       Name:   John Dorman        Title:   Chairman
of the Board     

I have read and accept this employment offer:

         
/s/ Joseph L. Cowan
  Dated:   6-15-10
 
       
Joseph L. Cowan
       

11

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Exhibit A
Definitions

    For purposes of Paragraph 7 of the Letter Agreement, the following terms
will have the following meanings:

     “Cause” means:
     (i) acts of fraud or misappropriation committed by you and intended to
result in substantial personal enrichment at the expense of the Company;
     (ii) repeated violations by you of your obligations to the Company which
are demonstrably willful and deliberate and which result in material injury to
the Company; provided that, in each case, you have received written notice of
the described activity, have been afforded a period of 20 days to cure or
correct the activity described in the notice, and have failed to cure, correct
or cease the activity, as appropriate; or
     (iii) the breach of a published Company policy that, in the opinion of
counsel, had a reasonable likelihood to expose the Company to material liability
or material regulatory noncompliance.
“Change in Control” shall mean any change in control of the Company of a nature
that would be required to be reported in response to Item l(a) of the Current
Report on Form 10-K, as in effect on the Effective Date, pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended from time to time
(the “Act”); provided that, without limitation, such a “Change in Control” shall
be deemed to have occurred if:
     (i) a third person, including a “group” as such term is used in
Section 13(d)(3) of the Act, becomes the beneficial owner, directly or
indirectly, of 50% or more of the combined voting power of the Company’s
outstanding voting securities ordinarily having the right to vote for the
election of directors of the Company, unless such acquisition of beneficial
ownership is approved by a majority of the Incumbent Board (as such term is
defined in clause (ii) below); or
     (ii) individuals who, as of the Effective Date, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board, provided that any person becoming a director subsequent to the date
hereof whose election, or nomination for election by the Company’s shareholders,
was approved by a vote of at least three-quarters of the directors comprising
the Incumbent Board (other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the Directors of the Company, as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Act)
shall be, for purposes of this provision, considered as though such person were
a member of the Incumbent Board.
“Date of Termination” means, with respect to any purported termination of your
employment (other than by reason your death or Disability), shall mean the date
specified in the Notice of Termination.
“Disability” shall mean your incapacity due to physical or mental illness to
perform your full-time duties with the Company for a continuous period of three
months or an aggregate of six months in any eighteen-month period.

A-1

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“Good Reason” shall mean, without your consent:
     (i) any changes in your duties and responsibilities which are materially
inconsistent with your duties and responsibilities within the Company
immediately prior to the Change in Control;
     (ii) any material reduction of your salary, aggregate incentive
compensation opportunities (excluding any reduction in incentive compensation
awards due to the economic performance of the Company) or aggregate benefits;
     (iii) any required relocation of your office beyond a 50 mile radius from
the location of your office immediately prior to the Change in Control; or
     (iv) any failure by the Company to obtain the assumption of this Letter
Agreement by a successor of the Company.
“Notice of Termination” shall mean a notice which will indicate the specific
nature of termination (as set forth in the first paragraph of Paragraph 7(c)(i))
and will set forth in reasonable detail the facts and circumstances claimed to
provide a basis for the termination of your employment under the provision so
indicated.
“Severance Period” shall mean either (i) the period of 12 months following the
Date of Termination, if the Date of Termination occurs on or prior to the first
anniversary of the Effective Date, or (ii) the period of 18 months, if the Date
of Termination is after such anniversary date.

A-2