UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-K
  ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF
 THE SECURITIES EXCHANGE ACT OF
    1934
  For the fiscal year ended December 31, 2008
  Commission file number 0-26123
  ONLINE RESOURCES
    CORPORATION
 (Exact name of registrant as
    specified in its charter)
  Delaware(State or other jurisdiction
    of
    incorporation or organization)

52-1623052(I.R.S. Employer
    Identification Number)4795 Meadow Wood Lane
    Chantilly, Virginia(Address of principal
    executive offices)

20151(Zip
    code)  (703) 653-3100
 (Registrants telephone
    number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
 None
  Securities registered pursuant to Section 12(g) of the
    Act:
  Title of Each
    Class
 Common Stock, $0.0001 par value per share
  o þ
  o þ
  12b-2 o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o       DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K: Form 10-K




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ONLINE
    RESOURCES CORPORATION
  ANNUAL
    REPORT ON
    FORM 10-K
  TABLE OF
    CONTENTS
   
 PagePART IItem 1:


Business Overview


4Item 1A:


Risk Factors


17Item 2:


Properties


28Item 3:


Legal Proceedings


28Item 4:


Submission of Matters to a Vote of Security
    Holders


28PART IIItem 5:


Market for the Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


29Item 6:


Selected Consolidated Financial Data


29Item 7:


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


31Item 7A:


Quantitative and Qualitative Disclosures About
    Market Risk


48Item 8:


Consolidated Financial Statements and
    Supplementary Data


50Index to Consolidated Financial Statements


50Item 9:


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


90Item 9A:


Controls and Procedures


90Item 9B:


Other Information


91PART IIIItem 10:


Directors and Executive Officers of the
    Company


92Item 11:


Executive Compensation


92Item 12:


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholders Matters


92Item 13:


Certain Relationships and Related Transactions


92Item 14:


Principal Accountant Fees and Services


92PART IVItem 15:


Exhibits and Financial Statement Schedules


93Signatures


96   2




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SPECIAL
    NOTE REGARDING FORWARD-LOOKING STATEMENTS
  Form 10-K 10-K.
  Form 10-K.
 3




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PART I  Item 1.
    Business
    Overview  Business
    Overview
      
    Banking Services: For banks, credit unions and other
    depository financial institutions, we provide a fully integrated
    suite of web-based account presentation, payment, relationship
    management and professional services, giving clients a single
    point of accountability, an enhanced experience for their users,
    the marketing processes to drive Internet channel adoption, and
    innovative services that help them maintain their competitive
    position. We enable business and consumer end-users to
    consolidate information from multiple accounts and make bill
    payments to multiple billers or merchants, or virtually anyone,
    via their financial institutions web site. We also offer
    our electronic bill payment services to financial institutions
    on a stand-alone basis. Many of the bill payment services we
    offer use our patented payments gateway, which leverages the
    nations real-time electronic funds transfer, also known as
    EFT, infrastructure. By debiting end-users accounts in
    real-time, we are able to improve the speed, cost and quality of
    payments, while eliminating the risk that bills will be paid
    against insufficient funds.
    e-Commerce
    Services:For billers, card issuers and credit providers, we
    provide web- and phone-based account presentation, payment,
    relationship management and professional services. We enable
    consumer and business end-users to manage their account or make
    a payment to a single card issuer, credit provider or biller.
    For billers, we provide a full suite of payment options,
    including consolidation of incoming payments made by credit
    cards, signature debit cards, ACH and PIN-less debit via
    multiple access points such as online, interactive voice
    response, or IVR, and call center customer service
    representatives. The suite also includes bill presentment,
    convenience payments, and flexible payment scheduling. We
    obtained these biller services and the industrys largest
    biller network as a result of our acquisitions of Princeton eCom
    Corporation, which we refer to as Princeton, in July 2006 and
    Internet Transaction Solutions, Inc., which we refer to as ITS,
    in August 2007. Specifically for card issuers and credit
    providers, we offer account presentation and self-service
    capabilities. In addition, we offer an award-winning web-based
    tool that improves collections of late and delinquent funds in a
    private, non-confrontational manner. In addition, for payment
    acquirers and very large online billers we provide payment
    services that enable real-time debits for a variety of
    web-originated consumer payments and fund transfers using our
    patented EFT payments gateway, which lowers transaction costs
    and increases the speed and certainty of payments.   4




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Our
    Industry
  US Online Banking: Five Year
    Forecast US EBPP
    Forecast: 2006 To 2011
    
    The Boston Consulting Group, a financial research and advisory
    firm, found in 2003 that online bill payment customers of
    depository financial institutions were up to 40 percent
    more profitable at the end of a
    12-month
    period compared to those customers who did not pay bills online,
    because the online bill payment customers:  
    generate significantly higher revenues than offline customers by
    using more banking products and services and maintaining higher
    account balances;
    cost less to serve because online users tend to utilize more
    self-service functions and therefore interact with the more
    costly retail branch and call center service channels less
    frequently than offline customers; and
    are less likely to move their accounts to other financial
    institutions than offline customers.  
    Bank of Americas 2002 control group study found that
    online bill payers were 31% more profitable for the bank than
    non-bill payers. Bank of America also concluded that online bill
    payers were less likely to move their accounts to other banks.
    Consequently, Bank of America and many other large financial
    institutions eliminated their monthly end-user fees for online
    bill payment and launched aggressive marketing campaigns to
    promote adoption of the online channel. A growing majority of
    smaller financial institutions have also eliminated online bill
    payment fees and responded with similar marketing campaigns.
    This practice has since become standard practice for financial
    intuitions, which is positive for Online Resources because the
    elimination of online bill payment fees has generated
    significant increase in end-user adoption, more than offsetting
    any volume pricing discounts we may extend to our clients.   5




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Online
    Credit Card Report
      
    managing multiple technology vendors to provide account
    presentation, payments and other services;
    reconciling multiple payment methods and sources in increasingly
    shortened timeframes;
    understanding how to evaluate and enhance channel
    profitability; and
    maximizing the value of the channel by increasing adoption and
    usage.    Our
    Solution
    Our Technology Infrastructure. one-by-one
 6




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##### 



Our Operating and Technical Expertise.
  Our Integrated Marketing Process.
  Our Professional and Support Services.
 7




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Our
    Strategy
    Continue to Grow Our Client Bases.
  Increase Adoption Rates.
    Provide Additional Products and Services to Our Installed
    Client Base.
  e-commerce
  Maintain and Leverage Technological
    Leadership.
 8




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Pursue Strategic Acquisitions.
  Leverage Growth Over Our Relatively Fixed Cost
    Base.
  Our
    Services
      
   and/or
     9




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Account Presentation Services.
  
    view transaction histories and account balances;
    review and retrieve current and past statements;
    transfer funds and balances;
    initiate or schedule either one-time or recurring payments;
    access and maintain account information; and
    perform many self-service administrative functions.  Money HQ sm person-to-person ®
  Payments Services. same-day, Money HQ sm
         10




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Relationship Management Services. e-mail
    Professional Services.
  Third-Party Services.
  
    fully integrated bill payment and account retrieval through
    Intuits
    Quicken®;
    check ordering available through Harland, Deluxe, Clarke
    American or Liberty;
    inter-institution funds transfer and account aggregation
    provided by CashEdge;
    check imaging provided by AFS and its service bureaus, Bisys,
    Fiserv, FSI/ Vsoft, Empire Corporate, Intercept, Fidelity,
    Corporate One, Eascorp, MICR Resource Management (MRM), Synergy,
    Transdata and Mid-Atlantic; and
    electronic statement through BIT Statement, COWWW, BDI
    e-statement,
    Datamail, Digital Mailer, InfoImage, Reed Data, XDI and Bankware.  Sales and
    Marketing
       11




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Our
    Technology
    
    front-end servers proprietary and commercial
    communications software and hardware providing Internet and
    private communications access to our platform for end-users;
    middleware proprietary and commercial
    software and hardware used to integrate end-user and financial
    data and to process financial transactions;
    back-end systems databases and proprietary
    software which support our account presentation and payments
    services;
    support systems proprietary and commercial
    systems supporting our end-user service and other support
    services;
    enabling technology software enabling clients
    and their end-users to easily access our platform; and
    interoperable Service Oriented Architecture, or SOA software design permitting consistent, tight
    integration of product functionality across various product
    lines.           12




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Note:
    This diagram is a representation of our gateway and does not
    include all links. Connections depicted are for illustrative
    purposes only.         13




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Proprietary
    Rights
              Competition
   14




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business-to-business
      end-to-end end-to-end
 15




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##### 




    trust and reliability;
    technical capabilities, scalability, and security;
    speed to market;
    end-user service;
    ability to interface with our clients and their
    technology; and
    operating effectiveness.  Government
    Regulation
    truth-in-lending case-by-case
   16




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##### 



Employees
    Available
    Information
  www.orcc.com. Form 10-K, Form 10-Q 8-K
  Item 1A.
    Risk
    Factors  You should carefully consider the following risks before
    investing in our common stock. These are not the only risks that
    we may face. If any of the events referred to below occur, our
    business, financial condition, liquidity and results of
    operations could suffer. In that case, the trading price of our
    common stock could decline, and you may lose all or part of your
    investment.
  Risks
    Related to Our Business
  We
    cannot be sure that we will achieve profitability in all future
    periods.
    Our
    clients are concentrated in a small number of industries,
    including the financial services industry, and changes within
    those industries could reduce demand for our products and
    services.
   17




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The
    failure to retain existing end-users or changes in their
    continued use of our services will adversely affect our
    operating results.
    Any
    failure of our clients to effectively market our services could
    have a material adverse effect on our business.
    Demand
    for low-cost or free online financial services and competition
    may place significant pressure on our pricing structure and
    revenues and may have an adverse effect on our financial
    condition.
    If we
    are unable to expand or adapt our services to support our
    clients and end-users needs, our business may be
    materially adversely affected.
   18




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If we
    lose a material client, our business may be adversely
    impacted.
    Consolidation
    of the financial services industry could negatively impact our
    business.
    Our
    failure to compete effectively in our markets would have a
    material adverse effect on our business.
        Our
    quarterly financial results are subject to fluctuations, which
    could have a material adverse effect on the price of our
    stock.
    Interest
    rate fluctuations could have a material adverse impact on our
    revenues.
   19




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Our
    limited ability to protect our proprietary technology and other
    rights may adversely affect our ability to
    compete.
    Our
    failure to properly develop, market or sell new products could
    adversely affect our business.
    If we
    are found to infringe the proprietary rights of others, we could
    be required to redesign our products, pay royalties or enter
    into license agreements with third parties.
      
    be expensive and time consuming to defend;
    cause us to cease making, licensing or using products that
    incorporate the challenged intellectual property;
    require us to redesign our products, if feasible;
    divert managements attention and resources; and
    require us to pay royalties or enter into licensing agreements
    in order to obtain the right to use necessary technologies.   20




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System
    failures could hurt our business and we could be liable for some
    types of failures the extent or amount of which cannot be
    predicted.
    Security
    breaches could have a material adverse effect on our
    business.
  state-of-the-art
      The
    potential obsolescence of our technology or the offering of new,
    more efficient means of conducting account presentation and
    payments services could negatively impact our
    business.
   21




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We
    rely on internally developed software and systems as well as
    third-party products, any of which may contain errors and
    bugs.
  and/or
  The
    failure to attract or retain our officers and skilled employees
    could have a material adverse effect on our
    business.
    We
    could be sued for contract or product liability claims and
    lawsuits may disrupt our business, divert managements
    attention or have an adverse effect on our financial
    results.
    Failure
    to comply with financial network operating rules could reduce
    the value of our services to our clients and make those services
    more costly to provide.
   22




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Government
    regulation could interfere with our business.
        If we
    cannot maintain a satisfactory rating from the federal
    depository institution regulators, we may lose existing clients
    and have difficulty attracting new clients.
    We are
    exposed to increased costs and risks associated with complying
    with increasing and new regulation of corporate governance and
    disclosure standards.
   23




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If we
    are unable to expand our financial reporting capabilities to
    accommodate our rapid growth, we could fail to prevent or detect
    material errors and have to restate our financial statements.
    Any such restatement could increase our litigation risk, limit
    our access to the capital markets and reduce investor
    confidence, which may adversely affect the market price of our
    common stock.
    Risks
    Related to Acquisitions
  We may
    face difficulties in integrating acquired
    businesses.
      
    the loss of key employees or end-users;
    the need to coordinate diverse organizations;
    difficulties in integrating administrative and other functions;
    the loss of key members of management following the
    acquisition; and
    the diversion of our managements attention from our
    day-to-day
    operations.    We may
    have limited knowledge of, or experience with, the industries
    served and products provided by our acquired
    businesses.
   24




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Our
    acquisitions increase the size of our operations and the risks
    described herein.
    We
    made our acquisitions and may make future acquisitions, on the
    basis of available information, and there may be liabilities or
    obligations that were not or will not be adequately
    disclosed.
    Acquired
    companies give us limited warranties and indemnities in
    connection with their businesses, which may give rise to claims
    by us.
    Goodwill
    recorded on our balance sheet may become impaired, which could
    have a material adverse effect on our operating
    results.
  Goodwill and Intangible Assets
  Risks
    Related to Our Capital Structure
  Our
    stock price is volatile.
    
    actual or anticipated variations in quarterly operating results;
    announcements of technological innovations;
    new products or services offered by us or our competitors;
    changes in financial estimates or ratings by securities analysts;
    conditions or trends in the Internet and online commerce
    industries; 25




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
    changes in the economic performance and/or market valuations of
    other Internet, online service industries;
    announcements by us of significant acquisitions, strategic
    partnerships, joint ventures or capital commitments;
    additions or departures of key personnel;
    future equity or debt offerings or acquisitions or our
    announcements of these transactions; and
    other events or factors, many of which are beyond our control.    We
    have a substantial number of shares of common and convertible
    preferred stock outstanding, including shares issued in
    connection with certain acquisitions and shares that may be
    issued upon exercise of grants under our equity compensation
    plans that, if sold, could affect the trading price of our
    common stock.
    We
    have a significant amount of debt and redeemable preferred stock
    which will have to be repaid and may adversely affect our
    financial performance.
    Our
    plans to operate and grow may be limited if we are unable to
    obtain sufficient financing.
   26




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Holders
    of our outstanding preferred stock have liquidation and other
    rights that are senior to the rights of the holders of our
    common stock.
  Series A-1 (Series A-1 Series A-1 Series A-1
  Holders
    of our
    Series A-1
    Preferred Stock have voting rights that may restrict our ability
    to take corporate actions.
  Series A-1 A-1
  Holders
    of our
    Series A-1
    Preferred Stock have a redemption right.
  Series A-1
  Efforts
    by the
    Series A-1
    Preferred Stockholders to alter the strategic direction of the
    Company and elect alternative nominees to our Board of Directors
    may adversely affect the Companys business and financial
    performance.
  Series A-1 Series A-1 Series A-1 Series A-1 Series A-1 Series A-1 Series A-1 Series A-1 Series A-1
 27




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Future
    offerings of debt, which would be senior to our common stock
    upon liquidation, and/or preferred equity securities which may
    be senior to our common stock for purposes of dividend
    distributions or upon liquidation, may adversely affect the
    market price of our common stock.
  Series A-1
  If we
    are unable to comply with the covenants in our credit agreement,
    a default under the terms of that agreement could arise thereby
    potentially resulting in an acceleration of the repayment of
    borrowed funds.
    Item 2.
    Properties    Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders   28




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PART II  Item 5.
    Market
    for the Registrants Common Equity, Related Stockholder
    Matters and Issuer Purchases of Equity Securities    2008


2007Fiscal Quarter Ended

High


Low


High


LowFirst Quarter

$
12.01


$
9.09


$
11.47


$
9.03Second Quarter


10.47



8.35



12.43



10.21Third Quarter


10.26



6.84



13.75



10.39Fourth Quarter


7.65



2.00



13.39



7.86   Risk Factors
      Our Stock Price is Volatile 10-K.
      Equity Compensation Plans Form 10-K.
  Number of securities



Number of securitiesto be issued upon



remaining available forexercise of

Weighted-average

future issuance underoutstanding options,

exercise price of

equity compensation planswarrants and rights

outstanding options,

(excluding securities(a)

warrants and rights

reflected in column(a))Equity compensation plans approved by security holders

1,834,666

$5.14

2,074,331Equity compensation plans not approved by security holders

1,902,863

$4.56

   Item 6.
    Selected
    Consolidated Financial Data  Consolidated Financial Statements and Supplementary Data 10-K.
 29




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Form 10-K.
  Year Ended December 31,(In thousands, except per share amounts)2008


2007


2006


2005


2004Statement of Operations Data:Revenues:Service fees

$
138,278


$
121,364


$
81,573


$
52,383


$
39,202Professional services and other


13,364



13,768



10,163



8,118



3,083Total revenues


151,642



135,132



91,736



60,501



42,285Cost of revenues


77,353



64,083



41,317



26,057



19,279Gross profit


74,289



71,049



50,419



34,444



23,006General and administrative


33,445



28,933



19,780



13,664



9,586Sales and marketing


24,207



23,446



18,009



8,680



6,263Systems and development


9,906



9,196



7,382



4,204



3,246Total expenses

$
67,558


$
61,575


$
45,171


$
26,548


$
19,095Income from operations

$
6,731


$
9,474


$
5,248


$
7,896


$
3,911Other (expense) income


(3,637
)


(11,231
)


(3,992
)


1,301



182Income (loss) before income tax provision (benefit)


3,094



(1,757
)


1,256



9,197



4,093Income tax provision (benefit)(1)


1,175



(12,703
)


935



(13,466
)


146Net income


1,919



10,946



321



22,663



3,947Preferred stock accretion


8,873



8,302



4,309







Net (loss) income available to common stockholders

$
(6,954
)

$
2,644


$
(3,988
)

$
22,663


$
3,947Net (loss) income available to common stockholders per share:Basic

$
(0.24
)

$
0.10


$
(0.16
)

$
0.97


$
0.22Diluted

$
(0.24
)

$
0.09


$
(0.16
)

$
0.88


$
0.20Shares used in calculation of net (loss) income to common
    stockholders per share:Basic


29,111



27,153



25,546



23,434



18,057Diluted


29,111



29,150



25,546



25,880



20,128   Year Ended December 31,(in thousands)2008


2007


2006


2005


2004Balance Sheet Data:Cash, cash equivalents and investments(2)

$
23,978


$
22,362


$
32,154


$
55,864


$
4,641Working capital


24,243



17,625



41,483



61,688



10,056Total assets


323,677



340,717



286,591



115,596



44,533Notes payable, less current portion


59,500



75,438



85,000







Other long-term liabilities


6,377



6,508



9,565



5,229



1,998Total liabilities


94,149



120,005



111,148



12,560



9,712Redeemable convertible preferred stock


91,415



82,542



72,108







Stockholders equity


138,113



138,170



103,335



103,036



34,771  30




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##### 



(1)
    
    Includes a $13.7 million release of valuation allowance in
    2007 related to federal net operating losses. Includes
    $0.2 million release of valuation allowance in 2008 related
    to state net operations losses.(2)
    
    Includes a $1.0 million short-term investment in the
    Columbia Strategic Cash Portfolio fund in 2008, which is
    expected to liquidate within the next twelve months. For
    additional information, see Note 5, Investments, in
    the Notes to the consolidated Financial Statements.  Item 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  CAUTIONARY
    NOTE
  Consolidated Financial Statements and
    Supplementary Data, Form 10-K. Risk Factors 10-K.
  OVERVIEW
        Increase/Period Ended December 31,


(Decrease)2008


2007


Change


%Account presentation users (000s):Banking segment


1,360



1,101



259



24
%eCommerce segment


2,493



3,066



−573



−19
%Enterprise


3,853



4,167



−314



−8
%Payment services users (000s):Banking segment


3,693



3,459



234



7
%eCommerce segment


5,905



4,890



1,015



21
%Enterprise


9,598



8,349



1,249



15
%Total users (000s):Banking segment


4,820



4,367



453



10
%eCommerce segment


8,398



7,956



442



6
%Enterprise


13,218



12,323



895



7
%  31




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set-up
    Critical
    Accounting Policies and Estimates
    Revenue Recognition Policy. No. 00-21 Revenue Arrangements with Multiple Deliverables No. 00-21). Revenue Recognition in Financial Statements
   32




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No. 00-21.
  No. 00-21, Summary of Significant Accounting Policies Form 10-K
  No. 97-2, Software Revenue Recognition (SOP 97-2) SOP No. 98-9, Software Revenue Recognition With Respect to Certain
    Transactions (SOP No. 98-9). SOP No. 97-2, SOP No. 97-2, Long-Term Construction-Type
    Contracts SOP No. 81-1, Accounting for Performance of Construction-Type and Certain
    Production-Type Contracts (SOP 81-1), percentage-of-completion percentage-of-completion
     33




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##### 



Allowance for Doubtful Accounts.
  Income Taxes. 2019-2026,
  Accounting for Income Taxes
    Cost of Internal Use Software and Computer Software to be
    Sold. SOP No. 98-1, Accounting for the Costs of Computer Software Developed or
    Obtained for Internal Use (SOP No. 98-1).
  Accounting for the Costs of Computer
    Software to be Sold, Leased or Otherwise Marketed
 34




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##### 



Impairment of Goodwill, Intangible Assets and Long-Lived
    Assets. Accounting for the Impairment or
    Disposal of Long-Lived Assets
      Theoretical Swap Derivative. Series A-1 (Series A-1 Series A-1
  Series A-1
  Derivative Instruments and Hedging
    Activities.
   35




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Statement of Cash Flows
  Stock-Based Compensation.
  Recently
    Issued Pronouncements.
  Business
    Combinations,
  Non-controlling Interests in Consolidated Financial
    Statements,
 36




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##### 



Fair Value Measurements No. 157-2
  Disclosures about Derivative Instruments and Hedging
    Activities, Accounting for
    Derivative Instruments and Hedging Activity,
  No. 142-3, No. 142-3). and Other Intangible Assets No. 142-3
  The
    Hierarchy of Generally Accepted Accounting Principles GAAP The Meaning of Present
    Fairly in Confirmation with Generally Accepted Accounting
    Principles.
  Accounting for Financial Guarantee Insurance
    Contracts  an interpretation of FASB Statement
    No. 60,
 37




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##### 



No. FAS 157-3, Determining the Fair Value of a Financial Asset When the
    Market for That Asset is Not Active No. 157-3). No. 157-3 No. 157-3
  Results
    of Operations
      Year Ended December 31,2008


2007


2006Dollars


%


Dollars


%


Dollars


%Revenues:Banking

$
94,557



62
%

$
100,119



74
%

$
77,106



84
%eCommerce


57,085



38
%


35,013



26
%


14,630



16
%Total

$
151,642



100
%

$
135,132



100
%

$
91,736



100
%   Dollars


Margin


Dollars


Margin


Dollars


MarginGross profit:Banking

$
48,561



51
%

$
57,706



58
%

$
46,045



60
%eCommerce


25,728



45
%


13,343



38
%


4,374



30
%Total

$
74,289



49
%

$
71,049



53
%

$
50,419



55
%   Dollars


%


Dollars


%


Dollars


%Operating expenses:Banking

$
27,104



40
%

$
28,096



46
%

$
26,534



59
%eCommerce


22,702



34
%


18,535



30
%


10,297



23
%Corporate(1)


17,752



26
%


14,944



24
%


8,340



18
%Total

$
67,558



100
%

$
61,575



100
%

$
45,171



100
%   Dollars


Margin


Dollars


Margin


Dollars


MarginIncome from operations:Banking

$
21,457



23
%

$
29,610



30
%

$
19,511



25
%eCommerce


3,026



5
%


(5,192
)


−14
%


(5,923
)


−40
%Corporate(1)


(17,752
)






(14,944
)






(8,340
)


Total

$
6,731



4
%

$
9,474



7
%

$
5,248



6
%   (1)
    Corporate expenses are primarily comprised of corporate general
    and administrative expenses that are not considered in the
    measure of segment profit or loss used to evaluate the segments. 38




---



##### 



Year
    Ended December 31, 2008 Compared to the Year Ended
    December 31, 2007
  Revenues
    Years Ended December 31,


Change2008


2007


Difference


%Revenues (in thousands):Account presentation services

$
7,909


$
8,998


$
(1,089
)


−12
%Payment services


122,301



104,228



18,073



17
%Relationship management services


8,068



8,138



(70
)


−1
%Professional services and other


13,364



13,768



(404
)


−3
%Total revenues

$
151,642


$
135,132


$
16,510



12
%Payment metrics (in thousands):Banking payment transactions


159,268



166,815



(7,547
)


−5
%Biller payment transactions(1)


42,690



31,896



10,794



34
%   Notes:
    Account Presentation Services.
  Payment Services.
  Relationship Management Services.
  Professional Services and Other.
 39




---



##### 



Costs and
    Expenses
  Years Ended December 31,


Change2008(1)


2007(1)


Difference(1)


%Revenues

$
151,642


$
135,132


$
16,510



12
%Costs of revenues


77,353



64,083



13,270



21
%Gross profit


74,289



71,049



3,240



5
%Gross margin


49
%


53
%


(4
%)


(8
%)Operating expensesGeneral and administrative


33,445



28,933



4,512



16
%Sales and marketing


24,207



23,446



761



3
%Systems and development


9,906



9,196



710



8
%Total operating expenses


67,558



61,575



5,983



10
%Income from operations


6,731



9,474



(2,743
)


(29
%)Other (expense) incomeInterest income


531



1,242



(711
)


(57
%)Interest and other expense


(4,168
)


(6,848
)


2,680



(39
%)Loss on extinguishment of debt






(5,625
)


5,625



100
%Total other (expense) income


(3,637
)


(11,231
)


7,594



(68
%)Income (loss) before tax (benefit) provision


3,094



(1,757
)


4,851



(276
%)Income tax provision (benefit)


1,175



(12,703
)


13,878



(109
%)Net income


1,919



10,946



(9,027
)


(82
%)Preferred stock accretion


8,873



8,302



571



7
%Net (loss) income available to common stockholders

$
(6,954
)

$
2,644


$
(9,598
)


(363
%)Net (loss) income available to common stockholders per share:Basic

$
(0.24
)

$
0.10


$
(0.34
)


(340
%)Diluted

$
(0.24
)

$
0.09


$
(0.33
)


(367
%)Shares used in calculation of net (loss) income available to
    common stockholders per share:Basic


29,111



27,153



1,953



7
%Diluted


29,111



29,150



(44
)


0
%   Notes:
    Costs of Revenues.
  Gross Profit.
 40




---



##### 



General and Administrative.
  Sales and Marketing.
  Systems and Development.
  Income from Operations.
  Interest Income.
  Interest and Other Expense. mark-to-market mark-to-market
  Income Tax (Benefit) Provision. mark-to-market Series A-1
  Preferred Stock Accretion. Series A-1 Series A-1
 41




---



##### 



Net Loss (Income) Available to Common
    Stockholders.
  Year
    Ended December 31, 2007 Compared to the Year Ended
    December 31, 2006
  Revenues
    Years Ended December 31,


Change2007


2006


Difference


%Revenues (in thousands):Account presentation services

$
8,998


$
8,051


$
947



12
%Payment services


104,228



65,501



38,728



59
%Relationship management services


8,138



8,022



116



1
%Professional services and other


13,768



10,162



3,606



35
%Total revenues

$
135,132


$
91,736


$
43,396



47
%Payment metrics:Payment services clients(1)


902



877



25



3
%Payment transactions (000s)(1)


66,766



58,151



8,615



15
%Adoption rates:Account presentation services  Banking(1)(2)


32.8
%


26.5
%


6.3
%


24
%Payment services  Banking(1)(3)


11.8
%


10.4
%


1.4
%


13
%   Notes:
    (2)
    Represents the percentage of users subscribing to our account
    presentation services out of the total number of potential users
    enabled for account presentation services.(3)
    Represents the percentage of users subscribing to our payment
    services out of the total number of potential users enabled for
    payment services.  Account Presentation Services.
  Payment Services.
 42




---



##### 



Relationship Management Services.
  Professional Services and Other.
 43




---



##### 



Costs and
    Expenses
  Years Ended December 31,


Change2007(1)


2006(1)


Difference(1)


%Revenues

$
135,132


$
91,736


$
43,396



47
%Costs of revenues


64,083



41,317



22,766



55
%Gross profit


71,049



50,419



20,630



41
%Gross margin


53
%


55
%Operating expensesGeneral and administrative


28,933



19,780



9,153



46
%Sales and marketing


23,446



18,009



5,437



30
%Systems and development


9,196



7,382



1,814



25
%Total operating expenses


61,575



45,171



16,404



36
%Income from operations


9,474



5,248



4,226



81
%Other (expense) incomeInterest income


1,242



1,961



(719
)


(37
%)Interest and other expense


(6,848
)


(5,953
)


(895
)


n/aLoss on extinguishment of debt


(5,625
)






(5,625
)


n/aTotal other (expense) income


(11,231
)


(3,992
)


(7,239
)


n/a(Loss) income before tax (benefit) provision


(1,757
)


1,256



(3,013
)


n/aIncome tax (benefit) provision


(12,703
)


935



(13,638
)


n/aNet income


10,946



321



10,625



n/aPreferred stock accretion


8,302



4,309



3,993



93
%Net income (loss) available to common stockholders

$
2,644


$
(3,988
)

$
6,632



n/aNet income (loss) available to common stockholders per share:Basic

$
0.10


$
(0.16
)

$
0.26



n/aDiluted

$
0.09


$
(0.16
)

$
0.25



n/aShares used in calculation of net income (loss) available to
    common stockholders per share:Basic


27,153



25,546



1,607



6
%Diluted


29,150



25,546



3,604



14
%   Notes:
    Costs of Revenues.
  Gross Profit.
 44




---



##### 



General and Administrative.
  Sales and Marketing.
  Systems and Development.
  Income from Operations.
  Interest Income.
  Interest and Other Expense.
  Loss on Extinguishment of Debt.
 45




---



##### 



Income Tax (Benefit) Provision.
  Preferred Stock Accretion. Series A-1 Series A-1 Series A-1
  Net Income (Loss) Available to Common
    Stockholders.
  Liquidity
    and Capital Resources
         46




---



##### 



trading-day
          For the Years EndedTotal


2009


2010


2011


2012


2013


ThereafterCapital lease obligations

$
55


$
36


$
19


$



$



$



$
Operating leases


28,869



4,680



4,640



4,611



4,247



4,013



6,678Purchase obligations


1,356



917



379



60











Notes payable(1)


75,437



15,937



17,000



32,938



9,562







Total obligations

$
105,717


$
21,570


$
22,038


$
37,609


$
13,809


$
4,013


$
6,678     (1)
    Senior secured debt (2007 Notes)   47




---



##### 



Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk           48




---



##### 



49




---



##### 



Item 8.
    Consolidated
    Financial Statements and Supplementary Data INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS   
 Reports of Independent Registered Public
    Accounting Firm


51Consolidated Balance Sheets


54Consolidated Statements of Operations


55Consolidated Statements of Stockholders
    Equity


56Consolidated Statements of Cash Flows


57Notes to Consolidated Financial Statements


59Supplementary DataFinancial Statement Schedule for each of the three years in the
    period ended December 31, 2008Schedule II  Valuation and
    Qualifying Accounts and Reserves*


95    *
    
    All other schedules prescribed under
    Regulation S-X
    are omitted because they are not applicable or not required. 50




---



##### 



Report of
    Independent Registered Public Accounting Firm on Internal
    Control over Financial Reporting    Internal Control  Integrated Framework
        Internal Control  Integrated Framework
  ,
  KPMG
    LLP
    51




---



##### 



REPORT OF
    INDEPENDENT REGISTERED
    PUBLIC ACCOUNTING FIRM
          Internal Control  Integrated Framework
  KPMG
    LLP
    52




---



##### 



Report of
    Independent Registered Public Accounting Firm
          Considering the Effects of Prior
    Year Misstatements when Quantifying Misstatements in Current
    Year Financial Statements
  
    53




---



##### 



ONLINE
    RESOURCES CORPORATION
 CONSOLIDATED
    BALANCE SHEETS
    (in thousands, except par value amounts)  December 31,2008


2007ASSETSCurrent assets:Cash and cash equivalents

$
22,969


$
13,227Restricted cash






1,535Consumer deposits receivable






8,279Short-term investments


1,009



9,135Accounts receivable (net of allowance of $84 and $84,
    respectively)


15,742



16,546Deferred implementation costs


1,669



1,459Deferred tax asset, current portion


8,782



902Prepaid expenses and other current assets:


2,344



4,601Total current assets


52,515



55,684Property and equipment, net


28,707



26,852Deferred tax asset, less current portion


25,295



32,914Deferred implementation costs, less current portion


1,555



1,628Goodwill


181,516



184,300Intangible assets


27,668



36,924Other assets


6,421



2,415Total assets

$
323,677


$
340,717LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
1,198


$
2,001Consumer deposits payable






10,555Accrued expenses


2,686



5,494Accrued compensation


932



2,019Notes payable, senior secured debt, current portion


15,937



9,562Deferred revenues, current portion


5,732



5,673Interest payable


6



72Interest rate swap liability


1,454Other current liabilities


327



2,683Total current liabilities


28,272



38,059Notes payable, senior secured debt, less current portion


59,500



75,438Deferred revenues, less current portion


3,573



3,916Other long-term liabilities


2,804



2,592Total liabilities


94,149



120,005Commitments and contingenciesRedeemable convertible preferred stock:Series A-1
    convertible preferred stock, $0.01 par value;
    75 shares authorized and issued at December 31, 2008
    and 2007 (Redeemable on July 3, 2013 at $135,815)


91,415



82,542Stockholders equity:Series B junior participating preferred stock,
    $0.01 par value; 297.5 shares authorized; none issued






Common stock, $0.0001 par value; 70,000 shares
    authorized; 29,808 issued and 29,526 outstanding at
    December 31, 2008 and 28,895 issued and 28,819 outstanding
    at December 31, 2007


3



3Additional paid-in capital


208,079



198,333Accumulated deficit


(66,698
)


(59,744
)Treasury stock, 282 shares at December 31, 2008 and
    76 shares at December 31, 2007


(2,360
)


(228
)Accumulated other comprehensive loss


(911
)


(194
)Total stockholders equity


138,113



138,170Total liabilities and stockholders equity

$
323,677


$
340,717    54




---



##### 



ONLINE
    RESOURCES CORPORATION
 CONSOLIDATED
    STATEMENTS OF OPERATIONS
    (in thousands, except per share amounts)  Year Ended December 31,2008


2007


2006Revenues:Account presentation services

$
7,909


$
8,998


$
8,051Payment services


122,301



104,228



65,500Relationship management services


8,068



8,138



8,022Professional services and other


13,364



13,768



10,163Total revenues


151,642



135,132



91,736Costs and expenses:Service costs


72,632



57,456



34,623Implementation and other costs


4,721



6,627



6,694Costs of revenues


77,353



64,083



41,317Gross profit


74,289



71,049



50,419General and administrative


33,445



28,933



19,780Sales and marketing


24,207



23,446



18,009Systems and development


9,906



9,196



7,382Total expenses


67,558



61,575



45,171Income from operations


6,731



9,474



5,248Other (expense) income:Interest income


531



1,242



1,961Interest expense


(3,612
)


(6,731
)


(5,506
)Other (expense) income


(556
)


(117
)


(447
)Loss on extinguishment of debt






(5,625
)


Total other (expense) income


(3,637
)


(11,231
)


(3,992
)Income (loss) before income taxes


3,094



(1,757
)


1,256Income tax (benefit) provision


1,175



(12,703
)


935Net income


1,919



10,946



321Preferred stock accretion


8,873



8,302



4,309Net income (loss) available to common stockholders

$
(6,954
)

$
2,644


$
(3,988
)Net income (loss) available to common stockholders per share:Basic

$
(0.24
)

$
0.10


$
(0.16
)Diluted

$
(0.24
)

$
0.09


$
(0.16
)Shares used in calculation of net income (loss) available to
    common stockholders per share:Basic


29,111



27,153



25,546Diluted


29,111



29,150



25,546    55




---



##### 



ONLINE
    RESOURCES CORPORATION
 CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY
    (in thousands)  AccumulatedAdditional








Other


TotalCommon Stock


Paid-In


Accumulated


Treasury


Comprehensive


StockholdersShares


Amount


Capital


Deficit


Stock


Income (Loss)


EquityBalance at December 31, 2005


25,213


$
3


$
160,249


$
(56,988
)

$
(228
)

$



$
103,036Adjustment under SAB No. 108














(1,412
)










(1,412
)Comprehensive loss:Net income














321











321Unrealized loss on hedging instrument






















(407
)


(407
)Comprehensive loss


























(86
)Preferred stock accretion














(4,309
)










(4,309
)Equity compensation cost










2,512















2,512Exercise of common stock options


541







3,288















3,288Issuance of common stock


35







306















306Balance at December 31, 2006


25,789



3



166,355



(62,388
)


(228
)


(407
)


103,335Comprehensive income:Net income














10,946











10,946Net unrealized gain on hedging instrument, net of taxes of $60






















213



213Comprehensive income


























11,159Preferred stock accretion














(8,302
)










(8,302
)Equity compensation cost










3,296















3,296Exercise of common stock options


771







3,767















3,767Issuance of common stock


42







202















202Issuance of common stock in connection with ITS acquisition


2,217







24,713















24,713Balance at December 31, 2007


28,819


$
3


$
198,333


$
(59,744
)

$
(228
)

$
(194
)

$
138,170Comprehensive income:Net income














1,919











1,919Net unrealized loss on hedging instrument, net of taxes of $496






















(717
)


(717
)Comprehensive income


























1,202Treasury shares purchased


















(167
)






(167
)Preferred stock accretion














(8,873
)










(8,873
)Equity compensation cost










4,874















4,874Exercise of common stock options


290







826















826Issuance of common stock


343







190















190Issuance of common stock in connection with ITS price protection


74







3,856







(1,965
)






1,891Balance at December 31, 2008


29,526


$
3


$
208,079


$
(66,698
)

$
(2,360
)

$
(911
)

$
138,113    56




---



##### 



ONLINE
    RESOURCES CORPORATION
 CONSOLIDATED
    STATEMENTS OF CASH FLOWS
    (in thousands)  Year Ended December 31,2008


2007


2006Operating activitiesNet income

$
1,919


$
10,946


$
321Adjustments to reconcile net income to net cash provided by
    operating activities:Deferred tax benefit


778



(13,380
)


(531
)Depreciation and amortization


21,270



19,811



12,772Equity compensation expense


4,696



3,198



2,512Write off and amortization of debt issuance costs


372



4,330



445Loss on disposal of assets


50



180



1Provision for losses on accounts receivable


56



(12
)


(21
)Loss on investments


556



117



Change in fair value of stock price protection


1,565



(355
)


Change in fair value of theoretical swap derivative


(3,574
)


(1,145
)


Loss on cash flow hedge derivative security


261



350



Loss on preferred stock derivative security










158Changes in operating assets and liabilities, net of acquisitions:Restricted cash


1,535



2,292



(1,699
)Consumer deposit receivable


8,279



(3,297
)


Consumer deposit payable


(10,555
)


5,285



Redemption of certificate of deposit


2,294







Accounts receivable


748



(2,169
)


(1,486
)Prepaid expenses and other assets


1,595



(1,769
)


646Deferred implementation costs


(137
)


(474
)


(1,484
)Accounts payable


(438
)


(3,245
)


58Accrued expenses and other liabilities


(3,319
)


(1,118
)


(275
)Interest payable


(65
)


(2,616
)


2,688Deferred revenues


(284
)


1,296



2,905Net cash provided by operating activities


27,602



18,225



17,010Investing activitiesPurchases of property and equipment


(13,471
)


(16,360
)


(9,823
)Purchase of short-term investments






(10,167
)


(965
)Sale of short-term investments


6,570



1,880



Acquisition of Internet Transactions Solutions, Inc., net of
    cash acquired


(110
)


(12,220
)


Acquisition of Princeton, net of cash acquired










(184,362
)Net cash used in investing activities


(7,011
)


(36,867
)


(195,150
)Financing activitiesNet proceeds from issuance of common stock


827



3,998



3,486Repurchase of shares issued related to ITS acquisition


(1,965
)






Payments for ITS price protection


(112
)Net proceeds from issuance of redeemable convertible preferred
    stock










69,912Purchase of cash flow derivative






(121
)


(455
)Sale of cash flow derivative






22



Debt issuance costs on refinancing of long-term debt






(1,479
)


Prepayment penalty on repayment of 2006 notes






(1,700
)


Proceeds from issuance of 2007 notes






85,000



Repayment of 2006 notes






(85,000
)


Net proceeds from issuance of 2006 notes










80,549Repayment of 2007 Notes


(9,563
)Repayment of capital lease obligations


(36
)


(40
)


(27
)Net cash (used in) provided by financing activities


(10,849
)


680



153,465Net (decrease) increase in cash and cash equivalents


9,742



(17,962
)


(24,675
)Cash and cash equivalents at beginning of year


13,227



31,189



55,864Cash and cash equivalents at end of year

$
22,969


$
13,227


$
31,189    57




---



##### 



ONLINE
    RESOURCES CORPORATION
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS (continued)
    (in thousands except share data)
   SUPPLEMENTAL INFORMATION TO STATEMENT OF CASH FLOWS:
  Year Ended December 31,2008


2007


2006Cash paid for interest

$
4,772


$
10,091


$
2,665Income taxes paid

$
632


$
464


$
77Net unrealized (loss) gain on hedge and investments

$
(1,759
)

$
137


$
(407
)   SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING
    ACTIVITIES:
  Year Ended December 31,2008


2007


2006Common stock issued in connection with ITS acquisition

$
3,856


$
24,713


$
Common stock issued in connection with IDS earnout and
    acquisition

$



$



$
119Issuance of equity award liabilities

$



$



$
(11
)    58




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    ORGANIZATION    2.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  Significant
    Accounting Policies
  Use of
    Estimates
    Principles
    of Consolidation
    Cash
    and Cash Equivalents
    Restricted
    Cash
    Consumer
    Deposit Receivable and Payables
   59




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Short-term
    Investments
      Fair
    Value of Financial Instruments
  Financial
    Instruments.
  Concentration
    of Credit Risk
      Revenue
    Recognition
    No. 00-21.
 60




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    No. 00-21,
    No. 00-21.
  No. 97-2, Software Revenue Recognition (SOP 97-2) SOP No. 98-9, Software Revenue Recognition With Respect to Certain
    Transactions (SOP No. 98-9). SOP No. 97-2,
  97-2, Long-Term Construction-Type
    Contracts SOP No. 81-1, Accounting for Performance of Construction-Type and Certain
    Production-Type Contracts 81-1), percentage-of-completion
 61




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  percentage-of-completion
    Deferred
    Income Taxes
  Income Taxes,
  Allowance
    for Doubtful Accounts
    Property
    and Equipment
  Property and Equipment and Capitalized Software
    Costs,
  Asset Group

Depreciable LifeCentral processing systems and terminals

3-5 yearsOffice furniture and equipment

5 yearsCentral processing systems and terminals under capital leases

shorter life of 3-5 years or lease termOffice furniture and equipment under capital leases

shorter life of 5 years or lease termLeasehold improvements

generally remaining lease term (1)     (1)
    
    If the leasehold improvements estimated life is shorter than the
    remaining lease term, the estimated life is used as the
    depreciable term. 62




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Capitalized
    Software Costs
  SOP No. 98-1, Accounting for Costs of Computer Software Developed or
    Obtained for Internal Use (SOP No. 98-1).
  Accounting for the Costs of
    Computer Software to be Sold, Leased or Otherwise Marketed
  Property and Equipment and
    Capitalized Software Costs,
  Goodwill
  Business Combinations Goodwill and Intangible Assets
      Impairment
    of Long-Lived Assets and Intangible Assets
  Accounting for
    Impairment or Disposal of Long-Lived Assets
 63




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Theoretical
    Swap Derivative
  Series A-1 (Series A-1 Series A-1
  Derivative
    Instruments
      Statement of Cash
    Flows
 64




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Staff
    Accounting Bulletin No. 108
  Considering the Effects of Prior Year Misstatements when
    Quantifying Misstatements in Current Year Financial
    Statements
  set-up
  Reclassification
    Net
    (Loss) Income Available to Common Stockholders Per
    Share
    Accumulated
    Comprehensive Income (Loss)
  Reporting Comprehensive Income
  Stock-Based
    Compensation
  Share-Based Payment Accounting for Stock-Based
    Compensation Equity Compensation Plans,
  with-and-without No. D-32, Intraperiod Tax Allocation of the Tax Effect of Pretax Income
    from Continuing Operations.
 65




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Recently
    Issued Pronouncements
  Business
    Combinations,
  Non-controlling Interests in Consolidated Financial
    Statements,
  Fair Value Measurements No. 157-2
  Disclosures about Derivative Instruments and Hedging
    Activities, Accounting for
    Derivative Instruments and Hedging Activity,
 66




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  No. 142-3, No. 142-3). and Other Intangible Assets No. 142-3
  The
    Hierarchy of Generally Accepted Accounting Principles GAAP The Meaning of Present
    Fairly in Confirmation with Generally Accepted Accounting
    Principles.
  Accounting for Financial Guarantee Insurance
    Contracts  an interpretation of FASB Statement
    No. 60,
  No. FAS 157-3, Determining the Fair Value of a Financial Asset When the
    Market for That Asset is Not Active No. 157-3). No. 157-3 No. 157-3
  3.
    ACQUISITIONS  Internet
    Transaction Solutions, Inc.
    trading-day
 67




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
                68




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Unaudited Pro forma InformationFor the Year Ended December 312007


2006Revenues

$
146,891


$
106,267Net income (loss) available to common stockholders


2,703



(4,931
)Net income (loss) available to common stockholders per share:Basic

$
0.09


$
(0.18
)Diluted

$
0.07


$
(0.18
)     At August 10, 2007Cash and cash equivalents

$
8,431Consumer deposits receivable


4,982Accounts receivable


48Other current assets


50Property and equipment


2,063Trademarks and patents


8Customer lists


21,220Goodwill


33,123Other assets


15Total assets purchased


69,940Accounts payable


7,634
(1)Consumer deposits payable


5,270Accrued expenses


1,089Deferred tax liabilities


7,808Total liabilities assumed


21,801Total net assets

$
48,139Cash

$
20,306Issuance of 2,216,552 common shares at $11.15 per share


24,713Stock price guarantee


2,783Transaction costs


337Aggregate purchase price

$
48,139     (1)
    
    Included $7.1 million of liabilities assumed related to the
    settlement of stock options which was expected to occur prior to
    closing.   69




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Princeton
    Series A-1 Series A-1
  Series A-1 Series A-1 Senior Secured Notes, Redeemable Convertible Preferred
    Stock
         70




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Unaudited Pro formaInformationFor the Year EndedDecember 312006Revenues

$
111,924Net (loss)

$
(8,640
)Net loss available to common stockholders

$
(17,267
)Net loss available to common stockholders per share:Basic

$
(0.68
)Diluted

$
(0.68
)  71




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    At July 3, 2006Current assets

$
13,697Property, plant and equipment


1,836Other assets


125Identifiable intangible assets (nine year weighted-average
    useful life):Customer list (eleven year weighted-average useful life)


18,355Purchased technology (six year weighted-average useful life)


9,36143,374Goodwill


151,406Total assets acquired


194,780Current liabilities


(3,915
)Long-term liabilities


(503
)Total liabilities assumed


(4,418
)Net assets acquired

$
190,362   4.
    REPORTABLE
    SEGMENTS       72




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Banking


eCommerce


Corporate(1)


TotalYear ended December 31, 2008:Revenues:Account presentation services

$
3,146



4,763







7,909Payment services


74,021



48,280







122,301Relationship management services


8,053



15







8,068Professional services and other


9,337



4,027







13,364Total revenues


94,557



57,085







151,642Costs of revenues


45,996



31,357







77,353Gross profit


48,561



25,728







74,289Operating expenses


27,104



22,702



17,752



67,558Income (loss) from operations

$
21,457


$
3,026


$
(17,752
)

$
6,731Year ended December 31, 2007:Revenues:Account presentation services

$
2,936


$
6,062


$



$
8,998Payment services


80,334



23,894







104,228Relationship management services


8,032



106







8,138Professional services and other


8,817



4,951







13,768Total revenues


100,119



35,013







135,132Costs of revenues


42,413



21,670







64,083Gross profit


57,706



13,343







71,049Operating expenses


28,096



18,535



14,944



61,575Income (loss) from operations

$
29,610


$
(5,192
)

$
(14,944
)

$
9,474   Banking


eCommerce


Corporate(1)


TotalYear ended December 31, 2006:Revenues:Account presentation services

$
2,751


$
5,300


$



$
8,051Payment services


59,276



6,224







65,500Relationship management services


7,988



34







8,022Professional services and other


7,091



3,072







10,163Total revenues


77,106



14,630







91,736Costs of revenues


31,061



10,256







41,317Gross profit


46,045



4,374







50,419Operating expenses


26,534



10,297



8,340



45,171Income (loss) from operations

$
19,511


$
(5,923
)

$
(8,340
)

$
5,248  73




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (1)
    
    Corporate expenses are primarily comprised of corporate general
    and administrative expenses that are not considered in the
    measure of segment profit or loss used to evaluate the segments.  5.
    INVESTMENTS        6.
    PROPERTY
    AND EQUIPMENT    December 31,2008


2007Central processing systems and terminals

$
33,024


$
30,900Office furniture and equipment


4,414



3,057Central processing systems and terminals under capital leases


1,476



1,476Office furniture and equipment under capital leases


237



237Internal use software


27,983



20,552Leasehold improvements


7,479



6,048Total


74,613



62,270Less accumulated depreciation and amortization


(30,517
)


(26,717
)Less accumulated amortization of internal use software


(13,871
)


(8,374
)Less accumulated depreciation on assets held under capital leases


(1,518
)


(327
)$
28,707


$
26,852  74




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  7.
    GOODWILL
    AND INTANGIBLE ASSETS    Banking


eCommerceSegment


Segment


TotalBalance at December 31, 2006

$
91,416


$
76,669


$
168,085Goodwill acquired (ITS acquisition)






33,123



33,123Adjustments(1)


(9,638
)


(7,270
)


(16,908
)Balance at December 31, 2007


81,778



102,522



184,300Adjustments(2)


(1,383
)


(1,401
)


(2,784
)Balance at December 31, 2008

$
80,395


$
101,121


$
181,516     (1)
    
    Primarily related to the reversal of income tax valuation
    allowance established in acquisitions.(2)
    
    Primarily related to the sale of Princetons net operating
    losses of $1.9 million, reversal of the valuation allowance
    on deferred tax assets acquired with Princeton of
    $1.7 million and a reclassification of ITS customer base
    upon receipt of the final valuation report offset by various
    acquisition related fees.    December 31,2008


2007Gross carrying amount:Purchased technology

$
11,171


$
11,171Customer lists


40,754



40,483Patents and Trademarks


236



244Non-compete agreements


33



33Total gross carrying amount


52,194



51,931Accumulated amortization:Less accumulated amortization of purchased technology


(5,386
)


(3,440
)Less accumulated amortization of customer lists


(18,943
)


(11,380
)Less accumulated amortization of patents and trademarks


(174
)


(171
)Less accumulated amortization of non-compete


(23
)


(16
)Total accumulated amortization


(24,526
)


(15,007
)Total intangible assets

$
27,668


$
36,924      75




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  8.
    COMMITMENTS &CONTINGENCIES          Operating


Capital2009

$
4,680


$
402010


4,640



202011


4,611



2012


4,247



2013


4,013



Thereafter


6,678



Total minimum lease payments

$
28,869



60Less amount representing interest






(5
)Present value of minimum lease payments






55Less current portion






(36
)Long-term portion of minimum lease payments





$
19     9.
    INCOME
    TAXES   76




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
           77




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2008


2007Deferred tax assets:Net operating loss carryforwards

$
38,607


$
48,006Deferred wages


3,223



2,552Deferred revenue


774



739Deferred rent


1,192



1,056Fixed assets


910



825Other credits


992



647Other deferred tax assets


921



186Total deferred tax assets


46,619



54,011Valuation allowance for deferred tax assets


(1,726
)


(5,883
)Deferred liabilities:Acquired intangible assets


(10,816
)


(14,312
)Total deferred tax liabilities


(10,816
)


(14,312
)Net deferred tax assets

$
34,077


$
33,816    78




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2008


2007


2006Tax expense at statutory Federal rate

$
1,052


$
(597
)

$
427Effect of:State income tax, net


190



(401
)


113Other Permanent differences


(370
)


(267
)


392Return to provision adjustment






256



Other


71(Decrease) increase in valuation allowance


232



(11,694
)


3Income tax expense (benefit)

$
1,175


$
(12,703
)

$
935Income tax expense consists of the following (in thousands):Current ExpenseFederal

$
317


$
402


$
State


80



275



3397



677



3Deferred ExpenseFederal


570



(12,497
)


761State


208



(883
)


171778



(13,380
)


932Income tax expense (benefit)

$
1,175


$
(12,703
)

$
935   Accounting for Uncertainty in
    Income Taxes Accounting for Contingencies Accounting for Income Taxes
     79




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  10.
    FINANCIAL
    INSTRUMENTS  Derivatives
    Instruments and Hedging Activities
  Cash Flow
    Hedging Strategy
      Theoretical
    Swap Derivative
  Series A-1 (Series A-1 Series A-1
  Series A-1
    Preferred Stock
  Series A-1 Redeemable Convertible
    Preferred Stock, Series A-1
 80




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  ITS Price
    Protection
  trading-day
        11.
    SENIOR
    SECURED NOTES     81




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    MaturingYear

Amounts2009

$
15,9372010

$
17,0002011

$
32,9382012

$
9,5622013

$
0   12.
    REDEEMABLE
    CONVERTIBLE PREFERRED STOCK  Series A-1
    Redeemable Convertible Preferred Stock
  Series A-1. Series A-1
  Series A-1 Series A-1 Series A-1 Series A-1 Series A-1 Series A-1
  Series A-1 Classification and
    Measurement of Redeemable Securities
  Series A-1 Series A-1
  Series A-1
 82




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Series A-1
  Series A-1 Series A-1
  Series B
    Preferred Stock
    13.
    NET
    (LOSS) INCOME AVAILABLE TO COMMON STOCKHOLDERS PER
    SHARE    Year Ended December 31,2008


2007


2006Net (loss) income available to stockholders

$
(6,954
)

$
2,644


$
(3,988
)Weighted average shares outstanding used in calculation of net
    income (loss) per share:Basic


29,111



27,153



25,546Dilutive options






1,997



Diluted


29,111



29,150



25,546Net (loss) income available to common stockholders per share:Basic

$
(0.24
)

$
0.10


$
(0.16
)Diluted

$
(0.24
)

$
0.09


$
(0.16
)     14.
    EMPLOYEE
    BENEFIT PLANS  Employee
    Savings and Retirement Plan
   83




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Employee
    Stock Purchase Plan
    15.
    EQUITY
    COMPENSATION PLANS  Share-Based Payment,
  No. 98-1, Accounting for the Costs of Computer Software Developed or
    Obtained for Internal Use Accounting for the Costs of Computer Software to Be Sold,
    Leased, or Otherwise Marketed
    Restricted
    Stock and Option Plans
     84




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Form 8-K
  Stock
    Options
    Year Ended December 31,2008


2007


2006Dividend yield










Expected volatility


51
%


56
%


65
%Risk-free interest rate


3.37
%


4.62
%


4.57
%Expected life in years


5.8



5.3



5.2   Dividend Yield.
  Expected Volatility.
  Risk-Free Interest Rate.
  Expected Life of Option Term.
  Forfeiture Rate.
 85




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Weighted-Weighted-

AverageAverage

Remaining

AggregateExercise

Contract

IntrinsicShares

Price

Term

ValueOutstanding at January 1, 2008


3,016


$
5.39Granted


395


$
10.40Exercised


(290
)

$
2.85Forfeited or expired


(169
)

$
8.43Outstanding at December 31, 2008


2,952


$
6.14



3.73


$
2,956Vested or expected to vest at December 31, 2008


2,928


$
6.12



3.74


$
2,939Exercisable at December 31, 2008


2,102


$
5.59



3.28


$
2,348         Restricted
    Stock Units
    Weighted-AverageGrant-DateShares


Fair ValueNon-vested at January 1, 2008


496


$
10.39Granted


814



9.74Vested


(319
)


6.63Forfeited


(205
)


11.08Non-vested at December 31, 2008


786



11.06    86




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      16.
    FAIR
    VALUE MEASUREMENTS  Fair Value Measurements
  No. 157-2
            Fair Value Measurements at December 31, 2008QuotedPrices inActive


SignificantMarkets for


Other


SignificantIdentical


Observable


UnobservableAssets


Inputs


Inputs(Level 1)


(Level 2)


(Level 3)


TotalFinancial assets (in thousands):Merrill Lynch Institutional Fund

$
11,030


$



$



$
11,030Investment in Strategic Cash Fund(1)










2,009



2,009Theoretical swap derivative(2)










4,562



4,562$
11,030


$



$
6,571


$
17,601Financial liabilities (in thousands):Interest Rate Swap(3)






(1,454
)






(1,454
)$



$
(1,454
)

$



$
(1,454
)  87




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (1)
    
    Includes the Companys short and long-term investment in
    the Columbia Strategic Cash Fund (the Fund) that was
    converted to a net asset value basis in December 2007 primarily
    due to liquidity issues. The $1.0 million classified as
    long-term is primarily the fair market value for the Funds
    investments in certain asset backed securities and structured
    investment vehicles that are collateralized by
    sub-prime
    mortgage securities or related to mortgage securities. The
    multiple investments included in the Fund are no longer trading
    and therefore the prices are not observable in the marketplace.
    As such, fair value of the Fund is assessed through review of
    current investment ratings, as available, and evaluation of the
    liquidation value of assets held by each investment and their
    subsequent cash redemptions. This assessment from multiple
    indicators of fair value is then discounted to reflect the
    expected timing of disposition and market risks to arrive at an
    estimated fair value of the Fund.(2)
    
    Represents the fair market value of the embedded derivative
    associated with the
    Series A-1
    Redeemable Convertible Preferred Stock issued in conjunction
    with the Princeton eCom acquisition on July 3, 2006.
    Management measures fair value of the derivative by estimating
    future cash flows related to the asset using a forecasted iMoney
    Net First Tier rate based on the one-month LIBOR rate adjusted
    for the historical spread for the estimated period in which the
    Series A-1
    Preferred Stock will be outstanding.(3)
    
    On October 17, 2008, the Company entered into an interest
    rate swap agreement, with a large commercial bank, to
    effectively swap the one-month LIBOR interest rate for a fixed
    interest rate equal to 2.9%. The fair market value of the
    interest rate swap is measured using the discounted present
    value of the forecasted one month LIBOR, an observable market
    input.    Strategic Cash


TheoreticalFund Investment


Swap DerivativeBalance as of January 1, 2008

$
9,135


$
988Realized and unrealized (loss) gain(1)


(555
)


3,574Redemptions(2)


(6,571
)


Balance as of December 31, 2008

$
2,009


$
4,562     (1)
    
    The realized and unrealized losses and gains are included as
    other (expense) income in the consolidated statements of
    operations for the nine months ended December 31, 2008.(2)
    
    Redemptions are payments received by the Company for partial
    liquidation of the Columbia Strategic Cash Fund. 88




---



##### 



ONLINE
    RESOURCES CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   17.
    SUMMARIZED
    QUARTERLY DATA (UNAUDITED)    Quarter EndedMarch 31, 2008


June 30, 2008


September 30, 2008


December 31, 2008Total revenues

$
39,196


$
37,153


$
38,133


$
37,160Gross profit

$
19,421


$
17,699


$
18,554


$
18,615Net (loss) income

$
(1,405
)

$
(974
)

$
766


$
3,532Net (loss) income available to common stockholders

$
(3,582
)

$
(3,173
)

$
(1,471
)

$
1,272Net (loss) income available to common stockholders per share:Basic

$
(0.12
)

$
(0.11
)

$
(0.05
)

$
0.04Diluted

$
(0.12
)

$
(0.11
)

$
(0.05
)

$
0.04   Quarter EndedMarch 31, 2007


June 30, 2007


September 30, 2007


December 31, 2007Total revenues

$
30,849


$
31,941


$
34,244


$
38,098Gross profit

$
15,764


$
17,264


$
18,022


$
19,999Net (loss) income

$
(7,419
)

$
970


$
3,090


$
14,305Net (loss) income available to common stockholders

$
(9,454
)

$
(1,158
)

$
1,123


$
12,133Net (loss) income available to common stockholders per share:Basic

$
(0.36
)

$
(0.04
)

$
0.04


$
0.42Diluted

$
(0.36
)

$
(0.04
)

$
0.04


$
0.40      89




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##### 



Item 9.Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure
    ITEM 9A.
    Controls
    and Procedures  (a)
    Effectiveness
    of Disclosure Controls and Procedures  Rules 13a-15(e) 15d-15(e)
  Rule 13a-15(e)
  (b)
    Changes
    in Internal Control over Financial Reporting      Ineffective Monitoring Activities.
  Lack of Effective Tax Accounting Expertise and
    Oversight.
   90




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##### 



(c) MANAGEMENTS
    REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
      Internal Control 
    Integrated Framework
    Item 9B.Other
    Information
   91




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##### 



PART III  Item 10.Directors
    and Executive Officers of the Company
    Item 11.Executive
    Compensation
    Item 12.Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters
  Market for the Registrants
    Common Equity, Related Stockholder Matters and Issuer Purchases
    of Equity Securities
  Item 13.Certain
    Relationships and Related Transactions
    Item 14.Principal
    Accountant Fees and Services
   92




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##### 



PART IV  Item 15.Exhibits
    and Financial Statement Schedules
    Consolidated Financial Statements. Form 10-K.
              Schedule II  Valuation and
    Qualifying Accounts.
    List of Exhibits.
  2
.2

Agreement and Plan of Merger dated July 26, 2007 among the
    Company, its acquisition subsidiary and Internet Transaction
    Solutions, Inc. (filed as Ex.
    99-1 to our
    Form 8-K
    filed on August 1, 2007)3
.1

Form of Amended and Restated Certificate of Incorporation of the
    Company (incorporated by reference from our registration
    statement on
    Form S-1;
    Registration
    No. 333-74777)3
.2

Form of Amended and Restated Bylaws of the Company3
.4

Certificate of Designation of shares of
    Series A-1
    Convertible Preferred Stock (filed as Exhibit 3.1 to our
    Form 8-K
    filed on July 3, 2006)3
.5

Certificate of Correction to Certificate of Designation for the
    shares of
    Series A-1
    Convertible Preferred Stock (filed as Ex. 3.2 to our
    Form 8-K
    filed on September 14, 2006)4
.1

Specimen of Common stock Certificate of the Company
    (incorporated by reference from our registration statement on
    Form S-1;
    Registration
    No. 333-74777)4
.5

Investor Rights Agreement dated July 3, 2006, by and among
    the Company and the holders of its shares of
    Series A-1
    Convertible Preferred Stock (filed as Ex. 4.3 to our
    Form S-3/A
    filed on November 14, 200610
.2

Online Resources & Communications Corporation 1989
    Stock Option Plan (incorporated by reference from our
    registration statement on
    Form S-1;
    Registration
    No. 333-74777)10
.3

1999 Stock Option Plan (incorporated by reference from our
    registration statement on
    Form S-1;
    Registration
    No. 333-40674)10
.4

Employee Stock Purchase Plan (incorporated by reference from our
    registration statement on
    Form S-8;
    Registration
    No. 333-40674)10
.5

Lease Agreement to premises at 4795 Meadow Wood Lane, Chantilly,
    Virginia (filed as an exhibit to our
    form 10-Q
    for the quarter ended September 30, 2004 filed on
    November 5, 2004)10
.6

Amended and Restated 2005 Restricted Stock and Option Plan
    (filed as Exhibit 10.9 to our
    Form 10-Q
    for the quarter ended June 30, 2008 on August 11,
    2008.)10
.7

Equity Purchase Agreement by and among the Company and the
    purchasers of its
    Series A-1
    Convertible Preferred Stock (filed as Ex. 10.1 to our
    Form 8-K
    filed on July 3, 2006)10
.8

Credit Agreement with Bank of America dated February 21,
    2007 and filed as Exhibit 99.1 to the Companys
    Form 8-K
    on February 26, 200723
.1

Consent of KPMG LLP, Independent Registered Public Accounting
    Firm 93




---



##### 



23
.2

Consent of Ernst & Young LLP, Independent Registered
    Public Accounting Firm31
.1

Certificate of Chief Executive Officer pursuant to
    Rule 13a-14(a)
    of the Securities Exchange Act, as amended31
.2

Certificate of Chief Financial Officer pursuant to
    Rule 13a-14(a)
    of the Securities Exchange Act, as amended32
.

Certificate of Chief Executive Officer and Chief Financial
    Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002  94




---



##### 



Schedule II 
    Valuation and Qualifying Accounts:
    (in thousands)  Balance atBeginning of








Balance at EndClassification

Period


Additions


Deductions


of PeriodAllowance for doubtful accounts:Year ended December 31, 2006

$
154


$
42


$
48
(1)

$
148Year ended December 31, 2007

$
148


$



$
64
(1)

$
84Year ended December 31, 2008

$
84


$
56


$
56
(1)

$
84Allowance for deferred tax asset:Year ended December 31, 2006

$
16,443


$
56,889
(2)

$
5,111


$
68,221Year ended December 31, 2007

$
68,221


$



$
62,338
(3)

$
5,883Year ended December 31, 2008

$
5,883


$
255
(4)

$
4,412
(5)

$
1,726     Notes:
  (1)
    
    Uncollectable accounts written off.  (2)
    
    2006 allowance for deferred tax asset balances have been revised
    to reflect the Companys acquisition of Princeton eCom
    Corporation (Princeton) and other items (which had
    no impact on the net deferred tax asset).(3)
    
    Reversal of $31.1 million due to electing to waive
    Princeton net operating losses that were determined not to be
    recoverable, release of $15.7 million of valuation
    allowance through goodwill related to valuation allowances
    established as a result of acquisitions, the release of
    $13.7 million through the income statement and a
    $1.9 million balance sheet reclassification.(4)
    
    The Company added a $0.3 million valuation allowance
    against certain deferred tax assets arising from capital losses
    that are not more likely than not realizable.(5)
    
    Includes release of approximately $1.9 million of valuation
    allowance related to New Jersey net operating losses that were
    determined to be recoverable and New Jersey net operating losses
    sold. Approximately $0.2 million of the valuation amount
    released resulted in an income tax benefit. 95




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##### 



SIGNATURES      By:
    /s/  MATTHEW
    P. LAWLOR    Chairman and Chief Executive Officer
    Signature

Title

Date/s/  MATTHEW
    P. LAWLORMatthew
    P. Lawlor

Chairman and Chief Executive Officer (Principal Executive
    Officer)

March 2, 2009/s/  CATHERINE
    A. GRAHAMCatherine
    A. Graham

Executive Vice President and Chief Financial Officer (Principal
    Financial Officer)

March 2, 2009/s/  DAVID
    G. MATHEWS, IIIDavid
    G.. Mathews, III

Vice President, Accounting (Principal Accounting Officer)

March 2, 2009/s/  WILLIAM
    H. WASHECKAWilliam
    H. Washecka

Director

March 2, 2009/s/  JOSEPH
    J. SPALLUTOJoseph
    J. Spalluto

Director

March 2, 2009/s/  STEPHEN
    S. COLEStephen
    S. Cole

Director

March 2, 2009/s/  ERVIN
    R. SHAMESErvin
    R. Shames

Director

March 2, 2009/s/  MICHAEL
    E. LEITNERMichael
    E. Leitner

Director

March 2, 2009/s/  BARRY
    D. WESSLERBarry
    D. Wessler

Director

March 2, 2009/s/  MICHAEL
    H. HEATHMichael
    H. Heath

Director

March 2, 2009/s/  JANEY
    A. PLACEJaney
    A. Place

Director

March 2, 2009/s/  JO
    ANN HEIDI ROIZENJo
    Ann Heidi Roizen

Director

March 2, 2009  96