Edgar Filing: ONLINE RESOURCES & COMMUNICATIONS CORP

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:

[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))

[X] Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Material Under Rule 14a-12

Online Resources Corporation
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(Name of Registrant as Specified in Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.

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2) Aggregate number of securities to which transaction applies:

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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

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[ ] Fee paid previously with preliminary materials.

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Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing:

1) Amount previously paid:

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[ONLINE RESOURCES LOGO]

ONLINE RESOURCES CORPORATION
7600 COLSHIRE DRIVE
MCLEAN, VIRGINIA 22102

MAY 8, 2001

Dear Stockholder,

You are cordially invited to attend the 2001 Annual Meeting of Stockholders
of Online Resources Corporation (the "Company") to be held at 2:00 p.m. on
Wednesday, June 6, 2001 at the Sheraton Premier, 8661 Leesburg Pike, Vienna,
Virginia 22182.

At the Annual Meeting, three persons will be elected to the Board of
Directors. The Company will ask the stockholders to approve an amendment to
increase by 528,309 shares the aggregate number of shares of Common Stock for
which stock options may be granted under the Company's 1999 Stock Option Plan
and to approve an allocation of 71,691 shares of a 500,000 share increase to the
1999 Stock Plan approved by the Board of Directors in January 2001 for issuance
to executive officers. The stockholders will also be asked to ratify the
selection of Ernst & Young LLP as the Company's independent auditors. The Board
of Directors recommends a VOTE FOR approval of each of these proposals. Such
other business will be transacted as may properly come before the Annual
Meeting.

We hope you will be able to attend the Annual Meeting. Whether you plan to
attend the Annual Meeting or not, it is important that your shares are
represented. Therefore, you are urged to complete, sign, date and return the
enclosed proxy card promptly in accordance with the instructions set forth on
the card. This will ensure your proper representation at the Annual Meeting.

Sincerely,

/s/ MATTHEW P. LAWLOR

Matthew P. Lawlor
Chairman of the Board and
Chief Executive Officer

YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY PROMPTLY.
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ONLINE RESOURCES CORPORATION

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD JUNE 6, 2001

To the Stockholders of Online Resources Corporation:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Online Resources
Corporation, a Delaware corporation (the "Company"), will be held on Wednesday,
June 6, 2001 at the Sheraton Premier, 8661 Leesburg Pike, Vienna, Virginia at
2:00 p.m. (EST) for the following purposes:

1. To elect three members to the Board of Directors to serve for a term
ending in 2004 and until their successors are duly elected and
qualified.

2. To consider and act upon a proposal to approve (i) an amendment to the
Company's 1999 Stock Option Plan to increase by 528,309 shares the
aggregate number of shares of the Company's Common Stock, $.0001 par
value per share (the "Common Stock") for which stock options may be
granted under the Company's 1999 Stock Option Plan and (ii) an
allocation of 71,691 shares for issuance to executive officers of a
500,000 share increase to the 1999 Stock Option Plan approved by the
Board of Directors in January 2001.

3. To consider and act upon a proposal to ratify the appointment of Ernst &
Young LLP as the Company's independent auditors for the fiscal year
ending December 31, 2001.

4. To transact such other business as may be properly brought before the
Annual Meeting and any adjournments thereof.

The Board of Directors has fixed the close of business on April 18, 2001 as
the record date for the determination of Stockholders entitled to notice of and
to vote at the Annual Meeting and at any adjournments thereof.

All Stockholders are cordially invited to attend the Annual Meeting.
WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING OR NOT, YOU ARE REQUESTED TO
COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS SOON AS POSSIBLE IN
ACCORDANCE WITH THE INSTRUCTIONS ON THE PROXY CARD. A PRE-ADDRESSED, POSTAGE
PREPAID RETURN ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.

By Order of the Board of Directors

/s/ CARL D. BLANDINO

Carl D. Blandino
Chief Financial Officer and
Secretary

April 30, 2001
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ONLINE RESOURCES CORPORATION
7600 COLSHIRE DRIVE
MCLEAN, VIRGINIA 22102
(703) 394-5100
-------------------------------

PROXY STATEMENT
-------------------------------

GENERAL INFORMATION

This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Online Resources Corporation (the "Company"), a
Delaware corporation, of proxies, in the accompanying form, to be used at the
Annual Meeting of Stockholders to be held at Vienna, Virginia on Wednesday, June
6, 2001 at 2:00 p.m., and any adjournments thereof (the "Meeting").

Where the Stockholder specifies a choice on the proxy as to how his or her
shares are to be voted on a particular matter, the shares will be voted
accordingly. If no choice is specified, the shares will be voted:

- FOR the election of the three nominees for director named herein,

- FOR the amendment to the Company's 1999 Stock Option Plan to increase by
528,309 shares the aggregate number of shares of the Company's Common
Stock, $.0001 par value per share (the "Common Stock") for which stock
options may be granted under the Plan and the approval of an allocation
of 71,691 shares of a 500,000 share increase approved by the Board of
Directors in January 2001 for issuance to executive officers.

- FOR the ratification of the appointment of Ernst & Young LLP as the
Company's independent auditors for the fiscal year ending December 31,
2001.

Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company a written
notice of revocation or a duly executed proxy bearing a later date. Any
Stockholder who has executed a proxy but is present at the Meeting, and who
wishes to vote in person, may do so by revoking his or her proxy as described in
the preceding sentence. Shares represented by valid proxies in the form
enclosed, received in time for use at the Meeting and not revoked at or prior to
the Meeting, will be voted at the Meeting. The presence, in person or by proxy,
of the holders of a majority of the outstanding shares of the Company's Common
Stock is necessary to constitute a quorum at the Meeting. Votes of Stockholders
of record who are present at the meeting in person or by proxy, abstentions, and
broker non-votes (as defined below) are counted as present or represented at the
meeting for purposes of determining whether a quorum exists.

Nominees for election as directors at the meeting will be elected by a
plurality of the votes of the shares of Common Stock present in person or
represented by proxy at the Meeting. Withholding authority to vote for a nominee
for director will have no effect on the outcome of the vote. For the proposal to
increase by 528,309 shares the aggregate number of shares of the Company's
Common Stock for which stock options may be granted under the Company's 1999
Stock Option Plan and to approve the allocation of 71,691 shares of the January
increase for issuance to officers and the proposal to ratify the appointment of
Ernst & Young LLP as the Company's independent auditors for the fiscal year
ending December 31, 2001, the affirmative vote of a majority of shares of Common
Stock present or represented by proxy at the Meeting and entitled to vote on the
matter is necessary for approval. Because abstentions are treated as shares
present or represented and entitled to vote, abstentions with respect to these
proposals have the same effect as a vote against the proposal.

If you hold your shares of Common Stock through a broker, bank or other
representative, generally the broker or your representative may only vote the
Common Stock that it holds for you in accordance with your instructions.
However, if it has not timely received your instructions, the broker or your
representative may vote on certain matters for which it has discretionary voting
authority. If a broker or your representative
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cannot vote on a particular matter because it does not have discretionary voting
authority, this is a "broker non-vote" on that matter. As to the election of
directors, the proposals relating to the Company's 1999 Stock Option Plan and
the ratification of independent auditors, broker non-votes are not deemed to be
present and represented and are not entitled to vote, and therefore will have no
effect on the outcome of the vote.

The close of business on April 18, 2001 has been fixed as the record date
for determining the Stockholders entitled to notice of and to vote at the
Meeting. As of the close of business on April 18, 2001, the Company had
11,680,377 shares of Common Stock outstanding and entitled to vote. Holders of
Common Stock are entitled to one vote per share on all matters to be voted on by
Stockholders.

The cost of soliciting proxies, including expenses in connection with
preparing and mailing this Proxy Statement, will be borne by the Company.
Georgeson Shareholder Communications, Inc. has been retained by the Company to
assist in the distribution of proxy materials and solicitation of votes for a
fee of $5,000, plus reimbursement of out-of-pocket expenses. In addition,
Georgeson Shareholder Communications, Inc. will reimburse brokerage firms and
other persons representing beneficial owners of Common Stock of the Company for
their expenses in forwarding proxy materials to such beneficial owners and the
Company will reimburse Georgeson Shareholder Communications, Inc. for the
expenses. Solicitation of proxies by mail may be supplemented by Internet,
telephone, telegram, telex and personal solicitation by the directors, officers
or employees of the Company. No additional compensation will be paid for such
solicitation.

This Proxy Statement and the accompanying proxy are being mailed on or
about May 10, 2001 to all Stockholders entitled to notice of and to vote at the
Meeting.

The Annual Report to Stockholders for the fiscal year ended December 31,
2000 is being mailed to the Stockholders with this Proxy Statement, but does not
constitute a part hereof.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of March 31, 2001
concerning the beneficial ownership of the Common Stock by each stockholder
known by the Company to be the beneficial owner of more than 5% of the
outstanding shares of Common Stock, each current member of the Board of
Directors, each executive officer named in the Summary Compensation Table on
page 10, and all directors and current executive officers as a group.

SHARES BENEFICIALLY
OWNED (1)
-------------------------
NAME AND ADDRESS** NUMBER PERCENT
------------------ --------- -------

Liberty Wanger Asset Management, L.P........................ 1,054,100(2) 9.0%
227 West Monroe Street, Suite 3000
Chicago, IL 60606
Wellington Management Co., L.P.............................. 667,500(3) 5.7%
75 State Street
Boston, MA 02109
Capital Group International, Inc............................ 1,182,500(4) 10.1%
11100 Santa Monica Blvd., Suite 1500
Los Angeles, CA 90025
J.P. Morgan Chase & Co...................................... 842,105(5) 7.2%
270 Park Avenue
New York, NY 10017
Bruce Bent Associates, Inc.................................. 792,300(6) 6.8%
950 Third Avenue
New York, NY 10022-2705
Matthew P. Lawlor........................................... 1,529,982(7) 12.9%
7600 Colshire Drive
McLean, VA 22102
George M. Middlemas......................................... 612,932(8) 5.2%
225 West Washington
Suite 1450
Chicago, IL 60606
Ervin R. Shames............................................. 12,500(9) *
Barry D. Wessler............................................ 11,509(10) *
David A. O'Connor........................................... 38,791(11) *
Joseph J. Spalluto.......................................... 57,793(12) *
Michael H. Heath............................................ 107,085(13) *
Thomas S. Johnson........................................... 87,963(14) *
Carl D. Blandino............................................ 52,190(15) *
Alex J. Seltzer............................................. 332,742(16) 2.8%
Raymond T. Crosier.......................................... 156,390(17) 1.3%
All directors and current executive officers as a group (11
persons).................................................. 2,999,877 23.9%

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* Represents beneficial ownership of less than 1% of the Company's
outstanding shares of Common Stock.

** Addresses are given for beneficial owners of more than 5% of the
outstanding Common Stock only.

(1) The number of shares of Common Stock issued and outstanding on March 31,
2001 was 11,680,377. The calculation of percentage ownership for each
listed beneficial owner is based upon the number of shares of Common Stock
issued and outstanding at March 31, 2001, plus shares of Common Stock
subject to options held by such person at March 31, 2001 and exercisable
within 60 days thereafter. The

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persons and entities named in the table have sole voting and investment power
with respect to all shares shown as beneficially owned by them, except as noted
below.

(2) This information is based solely on a Schedule 13G/A filed by Liberty
Wanger Asset Management, L.P. with the Securities and Exchange Commission
on February 14, 2001. The Company's shares of Common Stock have been
acquired on behalf of discretionary clients of Liberty Wanger Asset
Management, L.P., including Liberty Acorn Trust which beneficially owns
666,000 shares of Common Stock.

(3) This information is based solely on a Schedule 13G/A filed by Wellington
Management Co., L.P. with the Securities and Exchange Commission on
February 13, 2001. Clients of Wellington Management Co., L.P, own the
shares of record. Those clients have the right to receive, or the power to
direct the receipt of, dividends from, or the proceeds from the sale of,
such securities. Except for First Financial Fund, Inc., no such client is
known to have such right or power with respect to more than five percent of
the Common Stock outstanding.

(4) This information is based solely on a Schedule 13G/A filed by Capital Group
International, Inc. with the Securities and Exchange Commission on February
12, 2001. Capital Group International, Inc. is the parent holding company
of the Capital Guardian Trust Company, a bank as defined in Section 3(a)(6)
of the Securities Exchange Act of 1934. Capital Guardian Trust Company may
be deemed to be the beneficial owner of 1,182,500 shares of Common Stock
pursuant to Rule 13d-3. Capital Group International, Inc. and Capital
Guardian Trust Company disclaim beneficial ownership of 1,182,500 shares of
Common Stock pursuant to Rule 13d-4 of the Securities Exchange Act.

(5) This information is based solely on a Schedule 13G filed by J.P. Morgan
Chase & Co. with the Securities and Exchange Commission on February 8,
2001. Clients of J.P. Morgan Chase & Co. own the shares of record. Those
clients have the right to receive, or the power to direct the receipt of,
dividends from, or the proceeds from the sale of, such securities. No such
client is known to have such right or power with respect to more than five
percent of the Common Stock outstanding.

(6) This information is based solely on a Schedule 13G filed by Bruce Bent
Associates, Inc. with the Securities and Exchange Commission on January 30,
2001. Bruce Bent Associates, Inc., in its capacity as investment advisor,
may be deemed the beneficial owner of these shares, which shares are owned
by investment advisory client(s).

(7) Includes 48,750 shares of Common Stock issuable pursuant to warrants
exercisable within 60 days of March 31, 2001 and 107,071 shares of Common
Stock issuable pursuant to options exercisable within 60 days of March 31,
2001. Of the total shares, 82,684 shares are held of record by the Rosemary
K. Lawlor Irrevocable Trust for which Mr. Lawlor serves as the Trustee,
85,956 shares are held of record by the Matthew P. Lawlor Irrevocable Trust
and 8,910 shares are held of record by the Rosemary K. Lawlor, Mr. Lawlor's
wife.

(8) Includes 167,599 shares issuable pursuant to warrants exercisable within 60
days of March 31, 2001 and 22,151 shares issuable pursuant to options
exercisable within 60 days of March 31, 2001. Of the total shares 244,486
are held of record by Apex Investment Fund II, L.P. of which 85,132 are
issuable upon the exercise of warrants; 320,037 shares are held of record
by Apex Investment Fund III, L.P. of which 72,756 are issuable upon the
exercise of warrants and 26,258 shares are held of record by Apex Strategic
Partners, LLC of which 9,711 are issuable upon the exercise of warrants.
22,151 shares issuable upon the exercise of options are held by Mr.
Middlemas. Mr. Middlemas has shared voting and investment power of all the
shares which he does not hold of record.

(9) Includes 12,500 shares issuable upon the exercise of options to purchase
Common Stock that are exercisable within 60 days of March 31, 2001.

(10) Includes 7,500 shares issuable upon the exercise of options to purchase
Common Stock that are exercisable within 60 days of March 31, 2001.

(11) Includes 36,791 shares issuable upon the exercise of options to purchase
Common Stock that are exercisable within 60 days of March 31, 2001.

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(12) Includes 8,296 shares issuable upon the exercise of warrants to purchase
Common Stock and 26,792 shares issuable upon the exercise of options to
purchase Common Stock that are exercisable within 60 days of March 31,
2001. Of the total shares, 1,188 are held of record by Ellen Spalluto, Mr.
Spalluto's wife.

(13) Includes 89,914 shares issuable upon the exercise of options to purchase
Common Stock that are exercisable within 60 days of March 31, 2001.

(14) Includes 4,918 shares issuable upon the exercise of warrants to purchase
Common Stock and 26,792 shares issuable upon the exercise of options to
purchase Common Stock that are exercisable within 60 days of March 31,
2001.

(15) Includes 25,459 shares issuable upon the exercise of options to purchase
Common Stock that are exercisable within 60 days of March 31, 2001.

(16) Includes 157,772 shares issuable upon the exercise of options to purchase
Common Stock that are exercisable within 60 days of March 31, 2001.

(17) Includes 11,699 shares issuable upon the exercise of warrants to purchase
Common Stock and 111,891 shares issuable upon the exercise of options to
purchase Common Stock that are exercisable within 60 days of March 31,
2001. Of the total shares, 16,407 are held of record by Raymond T. Crosier
Grantor Retained Annuity Trust of which 8,554 are issuable upon the
exercise of warrants, and 1,000, 250 and 250 shares are held of record by
Deborah Crosier (Mr. Crosier's wife), William Crosier, II (Mr. Crosier's
son) and Jennifer Crosier (Mr. Crosier's daughter), respectively.

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MANAGEMENT

BOARD OF DIRECTORS

Under the Company's Bylaws, the number of members of the Company's Board of
Directors is fixed from time to time by the Board of Directors. The Board of
Directors currently consists of eight members, classified into three classes as
follows: George M. Middlemas, David A. O'Connor and Joseph S. Spalluto
constitute a class with a term ending in 2002 (the "Class I directors"); Michael
H. Heath and Thomas S. Johnson constitute a class with a term ending in 2003
(the "Class II directors"); and Matthew P. Lawlor, Ervin R. Shames and Barry D.
Wessler constitute a class with a term which expires at the upcoming Meeting
(the "Class III directors"). At each annual meeting of Stockholders, directors
are elected for a full term of three years to succeed those directors whose
terms are expiring.

The Board of Directors has voted to nominate Matthew P. Lawlor, Ervin R.
Shames and Barry D. Wessler for election at the Meeting for a term of three
years, to serve until the 2004 annual meeting of Stockholders, and until their
respective successors have been elected and qualified. The Class I directors
George M. Middlemas, David A. O'Connor, Joseph J. Spalluto, and the Class II
directors Michael H. Heath and Thomas S. Johnson will serve until the annual
meetings of Stockholders to be held in 2002 and 2003, respectively, and until
their respective successors have been duly elected and qualified.

If the nominees are unable or decline to serve at the time of the Meeting,
the shares represented by all valid proxies will be voted for the election of
such substitute as the Board of Directors may recommend or the Board of
Directors may decide to reduce the size of the Board of Directors to eliminate
any vacancy. At this time, we know of no reason why any nominee might be
unavailable to serve.

Set forth below are the names of the persons nominated as directors and
directors whose terms do not expire this year, their ages, their offices in the
Company, if any, their principal occupations or employment for the past five
years, the length of their tenure as directors and the names of other public
companies in which such persons hold directorships.

NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------

Matthew P. Lawlor....................... 53 Chairman of the Board and Chief Executive Officer
Ervin R. Shames (1)..................... 60 Director
Barry D. Wessler (2).................... 57 Director
George M. Middlemas (1)................. 54 Director
David A. O'Connor (1)................... 66 Director
Joseph J. Spalluto (2).................. 42 Director
Michael H. Heath (2).................... 59 Director
Thomas S. Johnson (2)................... 60 Director

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(1) Member of the Compensation Committee

(2) Member of the Audit Committee

Matthew P. Lawlor has served as Chairman and Chief Executive Officer since
March 1989. Mr. Lawlor started his career as a project engineer with RCA. After
completing his graduate business education in 1973, he joined Chemical Bank,
where he later headed its leading regional consumer branch division and its
international equity investment company. In 1980, he served as a Presidential
Exchange Executive with the White House. He formed US Multitrade in 1981, a
venture development firm noted for the seed financing of RSA Security, Inc.,
(formerly Security Dynamics Technology, Inc.) and other emerging growth
companies. He later co-founded the Company, and currently serves on the Board of
Directors of the Electronic Funds Transfer Association ("EFTA") where he chairs
its eFinancial Enablers Council, a group of senior executives whose firms supply
Internet products and services to financial institutions. Mr. Lawlor has a BS in
mechanical engineering from the University of Pennsylvania and an MBA from
Harvard University.

Michael H. Heath, a Director since March 1989, served as President of the
Company from January 1995 to October 1997. Mr. Heath has held positions both in
and outside of the financial services industry. He is the

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former President of MediaNews, which owned the Denver Post and the Houston Post;
and President of The Record, a New Jersey-based regional newspaper and broadcast
company. Mr. Heath also worked in a variety of senior management positions with
Chemical Bank, including a consumer branch division. Mr. Heath received his BA
from Williams College and an MBA from Harvard University.

Thomas S. Johnson, a Director since May 1994, has served as Chairman and
Chief Executive Officer of GreenPoint Bank and GreenPoint Financial Corp. since
August 1993. GreenPoint Bank and GreenPoint Financial Corp. is a large thrift
and specialty mortgage originator based in New York. Mr. Johnson formerly served
as President of Chemical Banking Corporation from 1983 to 1989, and as President
of Manufacturers Hanover Trust Company from 1989 to 1991. Mr. Johnson is a
director of R.R. Donnelley & Sons Company, Alleghany Corporation and GreenPoint
Financial Corp. He holds a BA from Trinity College and an MBA from Harvard
University.

George M. Middlemas, a Director since June 1997, is a Managing General
Partner of Apex Venture Partners ("Apex"), a venture partner company invests in
technology companies. He has been a venture capital investor since 1979. Prior
to joining Apex, Mr. Middlemas was a senior vice president and principal with
Inco Venture Capital Management and a vice president and member of the
investment committee of Citicorp Venture Capital. He was instrumental in the
founding of America Online and RSA Security, Inc., (formerly Security Dynamics
Technologies, Inc.) Mr. Middlemas is a director of DigitalGoods.com, Inc.,
Qorus.com, Data Critical Corporation, Tut Systems and Pure Cycle. Mr. Middlemas
holds a BA in both history and political science from Pennsylvania State
University, an MA in political science from the University of Pittsburgh, and an
MBA from Harvard University.

David A. O'Connor, a Director since April 1996, is an EFT industry
consultant. He was a Vice Chairman of Honor Technologies, one of the largest ATM
networks in the nation from 1997 to 1998. Mr. O'Connor was previously President
of CashFlow, Inc., an electronic banking subsidiary of Sovran Financial Services
(now NationsBank) and one of the first shared ATM networks. Later, Mr. O'Connor
served as President and CEO of Internet, Inc., owner of MOST, which was the
nation's fifth largest ATM network before merging with Honor Technologies. Mr.
O'Connor served on the Board of Directors of the Electronic Funds Transfer
Association and served as its chairman. He also served as President of the
Mid-Atlantic Exchange and Senior Vice President of Virginia National Bank. Mr.
O'Connor holds a BS from American University.

Ervin R. Shames, a Director since January 2000, is a visiting lecturer for
consumer marketing at the University of Virginia's Darden School of Business.
Mr. Shames formerly served as President and Chief Executive Officer of Borden,
Inc., a large consumer marketing company, from 1993 through 1995. Prior to
Borden, Mr. Shames served as President of General Foods USA and Kraft USA. He
also served as Chairman, President and Chief Executive Officer of Stride Rite
Corporation. Mr. Shames is currently serving on the Board of Directors of Select
Comfort Corporation, where he is a member of the Audit Committee. Mr. Shames
holds a BSBA from Florida University and an MBA from Harvard University.

Joseph J. Spalluto, a Director since May 1995, is a Managing Director of
Corporate Finance for Keefe Bruyette & Woods, Inc. since 1981, a national
investment banking firm specializing in the financial services industry. Keefe,
Bruyette & Woods, Inc. is an investor in the Company and has participated in
joint marketing. Mr. Spalluto received a BA from Amherst College and a JD from
the University of Connecticut School of Law.

Barry D. Wessler, a Director since May 2000, is widely known as one of the
founders of the Internet as a result of his work in the late 1960s at the
Advanced Research Projects Agency, where he directed the research for the design
and implementation of the ARPANet (the forerunner of today's Internet). Since
1995, Dr. Wessler has used his expertise as an independent consultant to
computer and communications corporations, including America Online, KDD America
and Teleglobe Communications. From 1973 to 1982, Dr. Wessler co-founded GTE
Telenet, a pioneering packet switch service company (now Sprint Data). Mr.
Wessler founded and served from 1982 to 1994 as President and Chief Operating
Officer of NetExpress, Inc., a market leader in international facsimile network
products and services. Mr. Wessler, served as Chief Executive Officer from 1994
to 1995 for Plexsys International, a cellular telephone infrastructure manufac-

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turer. Dr. Wessler received his BSEE in 1965 and MSEE in 1967 from MIT and his
Ph.D. in Computer Science from the University of Utah in 1973.

COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS

Meeting Attendance. During the fiscal year ended December 31, 2000, there
were eight meetings of the Board of Directors, and the various committees of the
Board of Directors met a total of five times. No director attended fewer than
75% of the total number of meetings of the Board and of committees of the Board
on which he served during fiscal 2000.

Audit Committee. The Audit Committee, which met four times in fiscal 2000,
has four members, Michael H. Heath (Chairman), Thomas S. Johnson, Joseph J.
Spalluto and Barry D. Wessler. The Audit Committee reviews the engagement of the
Company's independent auditors, reviews annual financial statements, considers
matters relating to accounting policy and internal controls and reviews the
scope of annual audits. Please see also the report of the Audit Committee set
forth elsewhere in this Proxy Statement.

Compensation Committee. The Compensation Committee, which met five times
during fiscal 2000, has three members, Ervin R. Shames (Chairman), George M.
Middlemas and David A. O'Connor. The Compensation Committee reviews, approves
and makes recommendations on the Company's compensation policies, practices and
procedures to ensure that legal and fiduciary responsibilities of the Board of
Directors are carried out and that such policies, practices and procedures
contribute to the success of the Company. Please see also the report of the
Compensation Committee set forth elsewhere in this Proxy Statement. The
Compensation Committee administers the Company's 1999 Stock Option Plan.

Nominating Committee. The Company does not have a standing Nominating
Committee.

Compensation Committee Interlocks and Insider Participation. The
Compensation Committee during the year ended December 31, 2000, consisted of
Ervin R. Shames, George M. Middlemas and David A. O'Connor. Each was a member of
the Board of Directors as of December 31, 2000 and none is an employee. None of
the executive officers serves as a member of the Compensation Committee or other
board committee performing equivalent functions of another corporation.

COMPENSATION OF DIRECTORS

Currently, we have not compensated our Directors with directors' fees or
retainers, however, non-employee directors are compensated through stock
options. Specifically, we grant each non-employee director an option to purchase
7,500 shares of Common Stock (with an exercise price at the fair market value of
the Common Stock at the time of grant) for each year of service. In addition, we
do reimburse Directors for related travel expenses incurred to attend meetings
of the Board of Directors. The Compensation Committee is currently reviewing
Board of Director compensation to determine whether it is comparable to the
Company's peer groups, and may recommend a change in Board of Director
compensation based on its review.

EXECUTIVE OFFICERS

The names of, and certain information regarding, executive officers of the
Company who are not also directors are set forth below. None of the executive
officers has an employment agreement with the Company and the executive officers
serve at the pleasure of the Board of Directors.

NAME AGE POSITION
---- --- --------

Raymond T. Crosier..................... 46 President, Chief Operating Officer
Carl D. Blandino....................... 50 Executive Vice President, Chief Financial Officer
Alex J. Seltzer........................ 48 Executive Vice President, Chief Information Officer

Raymond T. Crosier joined the Company in January 1996 and in January 2001
he was elected as President and Chief Operating Officer. He is responsible for
managing the Company's day to day operations.

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He has 23 years of experience with the financial services industry. Before
joining the Company, he served as Vice President of Sales and Customer Service
for TeleCheck International, a check verification and guarantee firm, from 1990
to 1996. TeleCheck was a subsidiary of First Financial International Corp.,
which later merged with First Data Corp. He served in a variety of other
management positions at TeleCheck, including its national account division from
1989 to 1990 and its regional marketing divisions from 1977 to 1989. Mr. Crosier
received a BS in Psychology from the University of Virginia.

Carl D. Blandino re-joined the Company in February 2000 as Executive Vice
President and Chief Financial Officer. He is responsible for corporate
accounting and finance, legal affairs, investor relations, administration and
human resources and recruiting. Mr. Blandino has 21 years of professional
experience in financial disciplines, including various high technology and
software companies and public accounting experience. Mr. Blandino most recently
served as Chief Financial Officer and Senior Vice President of Administration of
Segue Corporation, a publicly-held electronic commerce software provider from
1998 to 1999. In 1997, Mr. Blandino served as Chief Financial Officer for Per
Se' Technologies, an Atlanta-based health care systems integrator and software
provider. For five years prior to his position with Per Se' Technologies, he
worked for Online Resources and served as head of bill payment and call center
operations. Mr. Blandino is a CPA and worked for 12 years in public accounting
for Coopers & Lybrand and Deloitte Haskins & Sells. Mr. Blandino received a BS
in Finance & Accounting from Robert Morris College.

Alex J. Seltzer joined the Company in January 1991 and currently serves as
Executive Vice President and Chief Information Officer. He was responsible for
our information systems and technology strategy and more recently is exploring
e-commerce applications of the Company's real-time processing capabilities and
related intellectual property. Mr. Seltzer has 21 years experience in
information and computer systems. He formerly headed systems integration at
NetExpress (a large facsimile network later acquired by Canon) from 1987 to 1989
and designed and developed security solutions for United Software Security. He
also served with Telenet from 1976 to 1977, Data Resources from 1973 to 1976,
and Strategic Planning Associates from 1980 to 1989. Mr. Seltzer has a BS in
Computer Science from Massachusetts Institute of Technology and an MBA from
Stanford University.

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EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following Summary Compensation Table sets forth summary information as
to compensation earned by the Company's Chief Executive Officer and each of the
three other most highly compensated executive officers who were employed by the
Company at the end of the fiscal year ended December 31, 2000 (collectively, the
"named executive officers") for services rendered to the Company in all
capacities during the three fiscal years ended December 31, 2000. The table
includes an additional executive who would have been among the four most highly
compensated executive officers except for the fact that although he remains
employed by the Company he was not serving as an executive officer of the
Company as of the end of the fiscal year ended December 31, 2000.

LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------- ------------
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION
--------------------------- ---- -------- ------- ------------ ------------

Matthew P. Lawlor......................... 2000 $206,250 $63,000 6,500 $ 303(3)
Chief Executive Officer and 1999 150,000 50,000 129,819 303(3)
Chairman of the Board 1998 124,000 33,500 17,821 272(3)
Raymond T. Crosier........................ 2000 $179,167 $59,353 6,500 $ 303(3)
President and Chief Operating Officer 1999 148,521 35,677 64,475 303(3)
1998 117,094 52,500 31,409 303(3)
Carl D. Blandino.......................... 2000 $132,801 $33,449 81,000 $7,064(4)
Executive Vice President, Chief
Financial
Officer and Corporate Secretary(1)
Alex J. Seltzer........................... 2000 $162,917 $39,626 6,000 $ 303(3)
Executive Vice President and 1999 146,167 31,656 77,409 303(3)
Chief Information Officer 1998 116,000 24,500 3,920 303(3)
Ronald J. Bergamesca...................... 2000 $135,335 $28,536 6,000 $ 303(3)
Senior Vice President-Marketing(2) 1999 125,333 15,000 27,862 303(3)
1998 17,969 -- 26,167 --

---------------
(1) Mr. Blandino joined the Company in February 2000. Mr. Blandino's fiscal 2000
base salary was $158,000.

(2) Ronald J. Bergamesca was no longer serving as an executive officer of the
Company as of the end of the fiscal year ended December 31, 2000 but remains
Senior Vice President- Marketing of the Company.

(3) Consists of premium amount paid by the Company for group life insurance on
behalf of the named executive officer.

(4) Consists of relocation expenses paid by the Company on behalf of the named
executive officer.

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OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth information regarding each stock option
granted during fiscal year 2000 to each of the named executive officers.

INDIVIDUAL GRANTS POTENTIAL REALIZABLE
----------------------------------------------------- VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS EXERCISE PRICE APPRECIATION FOR
UNDERLYING GRANTED TO OR BASE OPTION TERM(5)
OPTIONS EMPLOYEES IN PRICE EXPIRATION -----------------------
NAME GRANTED(#)(1) FISCAL YEAR ($/SHARE) DATE 5% 10%
---- ------------- ------------ --------- ---------- ---------- ----------

Matthew P. Lawlor.......... 6,500(2) 0.8% $ 3.81 11/09/07 $ 10,090 $ 23,513
Raymond T. Crosier......... 6,500(2) 0.8% $ 3.81 11/09/07 $ 10,090 $ 23,513
Carl D. Blandino........... 40,000(3) 4.9% $17.50 2/24/07 $284,970 $664,102
35,000(4) 4.3% 17.50 2/24/10 385,198 976,167
6,000(2) 0.7% 3.81 11/09/07 9,314 21,705
Alex J. Seltzer............ 6,000(2) 0.7% $ 3.81 11/09/07 $ 9,314 $ 21,705
Ronald J. Bergamesca....... 6,000(2) 0.7% $ 3.81 11/09/07 $ 9,314 $ 21,705

---------------
(1) The options were granted pursuant to the Company's 1999 Stock Option Plan
(the "Plan").

(2) Non-qualified stock option with an exercise price equal to the fair market
value on the date of grant. The option vests in 12 months and has a term of
7 years.

(3) Incentive stock option vests 25% annually for 4 years and has a term of 7
years.

(4) Incentive stock option vests 10% annually for 10 years and has a term of 10
years.

(5) The amounts shown in this table represent hypothetical gains that could be
achieved for the respective options if exercised at the end of the option
term. These gains are based on assumed rates of stock appreciation of 5% and
10% compounded annually from the date the respective options were granted to
their expiration date. The gains shown are net of the option exercise price,
but do not include deductions for taxes or other expenses associated with
the exercise. Actual gains, if any, on stock option exercises will depend on
the future performance of the Common Stock, the optionee's continued
employment through the option period and the date on which the options are
exercised.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

The following table provides information regarding the exercises of options
by each of the named executive officers during the 2000 fiscal year. In
addition, this table includes the number of shares covered by both exercisable
and unexercisable stock options as of December 31, 2000 and the values of
"in-the-money" options, which values represent the positive spread between the
exercise price of any such option and the fiscal year-end value of the Common
Stock.

NUMBER OF SECURITIES
UNDERLYING VALUE OF THE UNEXERCISED
SHARES UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
ACQUIRED AT FISCAL YEAR-END AT FISCAL YEAR-END(2)
ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- ----------- ----------- ------------- ----------- -------------

Matthew P. Lawlor........... -- -- 84,037 107,750 -- --
Raymond T. Crosier.......... -- -- 100,997 66,219 -- --
Carl D. Blandino............ -- -- 9,282 81,000 -- --
Alex J. Seltzer............. 40,000 $257,600 141,167 66,750 $91,374 --
Ronald J. Bergamesca (3).... -- -- 19,919 40,154 -- --

---------------
(1) Amounts shown in this column do not necessarily represent actual value
realized from the sale of the shares acquired upon exercise of the option
because the shares were not sold on exercise but continue to be held by Mr.
Seltzer. The amounts shown represent the difference between the option
exercise price

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and the market price on the date of exercise, which is the amount that would
have been realized if the shares had been sold immediately upon exercise.

(2) The value of unexercised in-the-money options at fiscal year end assumes a
fair market value for the Company's Common Stock of $2.00, the closing sale
price per share of the Company's Common Stock as reported in the NASDAQ
National Market on December 31, 2000.

(3) Ronald J. Bergamesca was no longer serving as an executive officer of the
Company as of the end of the fiscal year ended December 31, 2000 but remains
Senior Vice President- Marketing of the Company.

CHANGE-IN-CONTROL ARRANGEMENTS

The 1999 Stock Option Plan provides that, upon a change in control,
unvested options issued under the plan vest and become immediately exercisable
for a period of one year after such occurrence.

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PERFORMANCE GRAPH

The following graph compares the annual percentage change in the Company's
cumulative total stockholder return on its Common Stock during a period
commencing on June 4, 1999 when the Company went public and ending on December
31, 2000 (as measured by dividing (i) the sum of (A) the cumulative amount of
dividends for the measurement period, assuming dividend reinvestment, and (B)
the difference between the Company's share price at the end and the beginning of
the measurement period; by (ii) the share price at the beginning of the
measurement period) with the cumulative total return of the Russell 2000 Index
and S&P Computer Software & Services Index during such period. The Company has
not paid any dividends on the Common Stock, and no dividends are included in the
representation of the Company's performance. The stock price performance on the
graph below is not necessarily indicative of future price performance. Prior to
June 4, 1999, the Company's Common Stock was not publicly traded. Comparative
data is provided only for the period since that date. This graph is not
"soliciting material," is not deemed filed with the Securities and Exchange
Commission and is not to be incorporated by reference in any filing of the
Company under the Securities Act of 1933 or the Securities Exchange Act of 1934
whether made before or after the date hereof and irrespective of any general
incorporation language in any such filing. Information used on the graph was
obtained from the NASDAQ Online, Frank Russell Company and Standard & Poor, a
division of The McGraw-Hill Companies, sources believed by the Company to be
reliable, but the Company is not responsible for any errors or omissions in such
information.

[LINE GRAPH]

ONLINE RESOURCES S&P COMPUTER SOFTWARE &
CORPORATION RUSSELL 2000 SERVICES INDEX
---------------- ------------ -----------------------

06/04/99 100.00 100.00 100.00
06/30/99 96.44 102.67 110.30
09/30/99 98.67 94.64 112.39
12/31/99 118.22 96.09 158.74
03/31/00 122.23 98.36 151.55
06/30/00 45.78 101.71 108.09
09/30/00 26.67 109.18 109.34
12/31/00 14.22 118.03 75.00

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REPORT OF COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION

The Compensation Committee is comprised solely of non-employee members of
the Board of Directors and consists of Ervin R. Shames, George M. Middlemas and
David A. O'Connor. The Compensation Committee makes recommendations to the Board
of Directors concerning the compensation and benefits of the Company's
directors, executive officers and key employees, and acts on such other matters
relating to their compensation as it deems appropriate. The Compensation
Committee administers the Company's 1999 Stock Option Plan, pursuant to which
incentive stock options and non-statutory stock options may be granted to
eligible employees, directors and consultants. The Compensation Committee also
administers the Company's executive and key employee incentive plan, pursuant to
which eligible employees may be granted incentive compensation for achievement
of the Company and individual performance targets.

Compensation Objectives. The Committee considers the following objectives
in setting base salary and benefits and some of the following objectives in
determining bonuses and long-term incentives for executives:

- establishing base salaries at a competitive average within our industry;

- rewarding the achievement of our annual and long-term strategic goals;

- retaining executive officers by offering competitive compensation and
benefits at a competitive level with other executives in our industry;
and

- providing additional motivation for the executive officers to enhance
stockholder value by linking a portion of the compensation package to the
performance of our Common Stock.

- rewarding achievement of individual performance targets.

Executive Compensation Program Components.

The three principal components of executive compensation are base salary,
annual incentive bonuses, and long-term incentive compensation under our 1999
Stock Option Plan. Each of these components is discussed as follows:

BASE SALARY. The Compensation Committee's recommendations regarding the
base salary of the executive officers of the Company, including the compensation
of the Chairman of the Board and Chief Executive Officer, are based on a number
of factors, including each executive officers' experience and qualifications,
the potential impact of the individual on the Company's performance, the level
of skill and responsibilities and the other factors described above. Base
salaries are reviewed annually, and the Compensation Committee seeks to set
executive officer base salaries at competitive levels in relation to the
companies with which the Company competes for executives. Base salaries for the
executive officers were increased in fiscal 2000 in order to retain key members
of the management team to pursue the Company's plans.

ANNUAL INCENTIVE BONUSES. The Company's annual incentive bonus program is
designed to provide a direct financial incentive to the Company's executive
officers, including the Chief Executive Officer, as well as other key employees,
for achievement of specific Company and individual performance goals. Consistent
with the Company's executive and key employee incentive program, at the
beginning of each fiscal year, the Compensation Committee determines:

- The employees by grade level that are eligible to participate in the plan
for the year;

- The annual corporate performance goals for the year; and

- For each eligible employee, the target bonus level as a percentage of
base compensation, the portion of the target bonus level that is based on
achievement of Company performance goals, and the portion of the target
bonus level that is based on achievement of individual performance goals.

In fiscal 2000, the Compensation Committee established incentive bonus
compensation for executive officers and other key employees based on the
Company's targeted revenue, gross profit margin, service quality

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index and operating efficiencies as measured by cost/transaction and targeted
SG&A levels. Separate targets were established for the first half and the second
half of the year.

LONG-TERM INCENTIVE COMPENSATION. The Compensation Committee believes that
stock ownership is a significant incentive in aligning the interests of the
executives and the stockholders. Consistent with industry standards, upon
hiring, executives may be granted a number of options in an amount larger than
the average grant given executives in any year and with different terms and
vesting schedules. During fiscal 2000, the Company granted stock options to all
of its executive officers under its 1999 Stock Option Plan, and such grants are
set forth in the Stock Option Grants Table under the Executive Compensation
section of this Proxy Statement. A portion of the total stock options granted to
executive officers in 2000 vest 25% each year for 4 years and expire after 7
years, performance based options vest 100% after one year and expire after 7
years and other stock options granted to executive officers vest 10% each year
(with accelerated vesting schedule, should the Company's stock outperform an
index of comparable companies) for 10 years and expire after 10 years. Stock
option grants under the 1999 Stock Option Plan were allocated by the
Compensation Committee based upon past and present performance and future
potential value of such executive officer's service to the Company. The
Compensation Committee made additional awards to certain executive officers
during the year based on compensation evaluations made during the year.

CHIEF EXECUTIVE OFFICER. The Chief Executive Officer's compensation
evaluation included consideration of his leadership qualities, experience in the
electronic commerce services industry and the results of the Company's
performance. At the recommendation of the Compensation Committee the Board of
Directors awarded the Chief Executive Officer a cash bonus of $63,000 for the
fiscal year ended December 31, 2000. The Chief Executive Officer was granted
options for 6,500 shares of Common Stock.

The goal of our compensation structure is to be certain that all executives
are compensated consistent with the above guidelines and to assure that all
reasonable and possible efforts are being exerted to maximize stockholder value.
Compensation levels will be reviewed as frequently as necessary to ensure this
result.

Members of the Online Resources
Corporation Compensation Committee

Ervin R. Shames, Chairman
George M. Middlemas
David A. O'Connor

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REPORT OF AUDIT COMMITTEE

The Audit Committee of the Board of Directors, which consists entirely of
directors who meet the independence and experience requirements of the NASDAQ
National Market System, has furnished the following report:

The Audit Committee assists the Board in overseeing and monitoring the
integrity of the Company's financial reporting process, its compliance with
legal and regulatory requirements and the quality of its internal and external
audit processes. The role and responsibilities of the Audit Committee are set
forth in a written Charter adopted by the Board, which is attached as Appendix A
to this Proxy Statement. The Audit Committee reviews and reassesses the Charter
annually and recommends any changes to the Board for approval. The Audit
Committee is responsible for overseeing the Company's overall financial
reporting process. In fulfilling its responsibilities for the financial
statements for fiscal year December 31, 2000, the Audit Committee took the
following actions:

- Reviewed and discussed the audited financial statements for the fiscal
year ended December 31, 2000 with management and Ernst & Young LLP, the
Company's independent auditors.

- Discussed with Ernst & Young LLP the matters required to be discussed by
Statement on Auditing Standards No. 61, as amended, relating to the
conduct of the audit.

- Received written disclosures and the letter from Ernst & Young LLP
regarding its independence as required by Independence Standards Board
Standard No. 1. The Audit Committee further discussed with Ernst & Young
LLP their independence. The Audit Committee also considered the status of
pending litigation, taxation matters and other areas of oversight
relating to the financial reporting and audit process that the Committee
determined appropriate.

- Reviewed and discussed quarterly financial results.

- Discussed and approved the adoption of SEC's Staff Accounting Bulletin
101 regarding revenue recognition.

- Reviewed the Privacy Policy and the Information Security Policy.

- Reviewed internal controls and SAS 70 report, a report on controls placed
in operation and tests of operating effectiveness.

Based on the Audit Committee's review of the audited financial statements
and discussions with management and Ernst & Young LLP, the Audit Committee
recommended to the Board that the audited financial statements be included in
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2000 for filing with the Securities and Exchange Commission.

Members of the Online Resources
Corporation Audit Committee

Michael H. Heath, Chairman
Thomas S. Johnson
Joseph J. Spalluto
Barry D. Wessler

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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and officers, and persons who own more than 10% of the Common Stock,
to file with the Securities and Exchange Commission initial reports of
beneficial ownership and reports of changes in beneficial ownership of the
Common Stock and other equity securities of the Company. Officers, directors and
greater than 10% beneficial owners are required by regulation to furnish the
Company with copies of all Section 16(a) forms they file.

To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 2000 all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10% beneficial owners were complied with, except that the directors
and executive officers filed their initial reports of ownership on Form 3 and
changes in ownership reports on Form 4 after the required filing date with the
Securities and Exchange Commission.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During fiscal 2000, we had a promissory note outstanding with Alex J.
Seltzer in the amount of $62,004. The promissory note was issued to Mr. Seltzer
in connection with the exercise of stock options. The promissory note carries an
interest rate of 6% per annum and is repayable.

The Company paid Keefe, Bruyette & Woods, Inc. $70,000 in connection with
certain services rendered to the Company in connection with its offering of $20
million of convertible subordinated notes. Mr. Joseph J. Spalluto, one of our
directors is a managing director of Keefe, Bruyette & Woods. These services
consisted primarily of identifying potential purchasers who would be interested
in participating in the offering.

The Company received approximately $341,000 for services rendered to
GreenPoint Bank and GreenPoint Financial Corp. during fiscal 2000. Mr. Thomas S.
Johnson, one of our directors, is Chairman and Chief Executive Officer of
GreenPoint Bank and GreenPoint Financial Group.

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ELECTION OF DIRECTORS
(NOTICE ITEM 1)

The Board of Directors has voted to nominate, Matthew P. Lawlor, Ervin R.
Shames and Barry D. Wessler as Class III directors for election at the Meeting
for a term of three years, to serve until the 2004 annual meeting of
Stockholders, and until their respective successors have been elected and
qualified. The Class I directors George M. Middlemas, David A. O'Connor, Joseph
J. Spalluto, and the Class II directors Michael H. Heath and Thomas S. Johnson
will serve until the annual meetings of Stockholders to be held in 2002 and
2003, respectively, and until their respective successors have been duly elected
and qualified.

Set forth below are the names of the persons nominated as directors, their
ages, their offices in the Company, if any, their principal occupations or
employment for the past five years, the length of their tenure as directors and
the names of other public companies in which such persons hold directorships.

MATTHEW P. LAWLOR, 53, has served as Chairman and Chief Executive Officer
since March 1989. Mr. Lawlor started his career as a project engineer with RCA.
After completing his graduate business education in 1973, he joined Chemical
Bank, where he later headed its leading regional consumer branch division and
its international equity investment company. In 1980, he served as a
Presidential Exchange Executive with the White House. He formed US Multitrade in
1981, a venture development firm noted for the seed financing of RSA Security,
Inc., (formerly Security Dynamics Technology, Inc.) and other emerging growth
companies. He later co-founded the Company, and currently serves on the Board of
Directors of the Electronic Funds Transfer Association where he chairs its
eFinancial Enablers Council, a group of senior executives whose firms supply
Internet products and services to financial institutions. Mr. Lawlor has a BS in
mechanical engineering from the University of Pennsylvania and an MBA from
Harvard University.

ERVIN R. SHAMES, 60, a Director since January 2000, is a visiting lecturer
for consumer marketing at the University of Virginia's Darden School of
Business. Mr. Shames formerly served as President and Chief Executive Officer of
Borden, Inc., a large consumer marketing company, from 1993 through 1995. Prior
to Borden, Mr. Shames served as President of General Foods USA and Kraft USA. He
also served as Chairman, President and Chief Executive Officer of Stride Rite
Corporation. Mr. Shames is currently serving on the Board of Directors of Select
Comfort Corporation, where he is a member of the Audit Committee. Mr. Shames
holds a BSBA from Florida University and an MBA from Harvard University.

BARRY D. WESSLER, 57, a director since May 2000, is widely known as one of
the founders of the Internet as a result of his work in the late 1960s at the
Advanced Research Projects Agency, where he directed the research for the design
and implementation of the ARPANet (the forerunner of today's Internet). Since
1995, Dr. Wessler has used his expertise as an independent consultant to
computer and communications corporations, including America Online, KDD America
and Teleglobe Communications. From 1973 to 1982, Dr. Wessler co-founded GTE
Telenet, a pioneering packet switch service company (now Sprint Data). Mr.
Wessler founded and served from 1982 to 1994 as President and Chief Operating
Officer of NetExpress, Inc., a market leader in international facsimile network
products and services. Mr. Wessler, served as Chief

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Executive Officer from 1994 to 1995 for Plexsys International, a cellular
telephone infrastructure manufacturer. Dr. Wessler received his BSEE in 1965 and
MSEE in 1967 from MIT and his Ph.D. in Computer Science from the University of
Utah in 1973.

Unless authority to vote for any of the nominees named above is withheld,
the shares represented by the enclosed proxy will be voted FOR the election as
directors of such nominees. In the event that any nominee shall become unable or
unwilling to serve, the shares represented by the enclosed proxy will be voted
for the election of such other person as the Board of Directors may recommend in
that nominee's place. The Board has no reason to believe that any nominee will
be unable or unwilling to serve.

A plurality of the votes of the shares present in person or represented by
proxy at the Meeting is required to elect each nominee as a director.

THE BOARD OF DIRECTORS RECOMMENDS THE ELECTION OF MATTHEW P. LAWLOR, ERVIN
R. SHAMES AND BARRY D. WESSLER AS CLASS III DIRECTORS, AND PROXIES SOLICITED BY
THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED
OTHERWISE ON THE PROXY.

1999 STOCK OPTION PLAN

(NOTICE ITEM 2)

GENERAL

On January 11, 2001, the Board of Directors adopted by resolution an
amendment to the 1999 Stock Option Plan, as amended, to increase the number of
shares reserved for issuance thereunder by 500,000 from 1,457,708 shares to
1,957,708 and on May 1, 2001, the Board of Directors adopted by resolution an
additional amendment to the 1999 Stock Option Plan, as amended, to further
increase the number of shares reserved for issuance thereunder by an additional
528,309 shares from 1,957,708 to 2,486,017. The shares approved in the January
increase were reserved for issuance to non-executive officers and directors with
the condition that if the Company determined to grant any options from such
increase to executive officers (as defined in Section 16 of the Securities
Exchange Act) or directors, the Company would seek stockholder approval of that
portion of the increase to be used for grants to officers and directors. The
Company proposes to allocate 71,691 shares of the January increase for options
to be issued to executive officers. These 71,691 shares plus the additional
528,309 increase total an aggregate of 600,000 shares for which stockholder
approval is being requested.

The Plan may be amended by the Board of Directors provided that any
amendment approved by the Board of Directors that is of a scope that requires
stockholder approval in order to ensure favorable federal income tax treatment
for any incentive stock options under Code Section 422, is subject to obtaining
such Stockholder approval. The Board believes that the increase is advisable to
provide the Company with the flexibility needed to attract, retain and motivate
employees, officers, directors and consultants. All employees, officers and
consultants of the Company and the members of the Board of Directors are
eligible to participate in the Plan.

MATERIAL FEATURES OF THE PLAN

The following summary of the terms of the 1999 Stock Option Plan is
qualified in its entirety by reference to the actual plan.

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The Company believes that employee ownership of Company Common Stock is an
essential tool in aligning the interests of our employees with the interests of
our other stockholders. Since our founding in 1989, management and other
employees have taken a substantial portion of their compensation in the form of
stock options. As the Company built its business and financial resources, the
Board of Directors progressively increased the use of cash compensation as a
proportion of total compensation. The Company nonetheless believes that the
continued use of stock options is an essential part of its ability to attract
and retain key executives and employees and to align the interests of the key
executives and employees with the interests of the stockholders. The additional
528,309 shares proposed to be added to the 1999 Stock Option Plan allows the
Board of Directors to proceed with approval of options to be granted in 2001 and
will provide the Board of Directors with the flexibility to attract and retain
key management and employees. The approval of the allocation of 71,691 shares
for issuance to executive officers of the 500,000 share increase approved by the
Board of Directors in January 2001 will allow the Board of Directors to proceed
with option grants to key executive officers under the Company's planned 2001
Management Bonus Incentive Plan, a cash and stock bonus plan designed by the
Compensation Committee to align the interests of executive officers with that of
the stockholders by rewarding the executives and other members of management for
Company performance as measured by certain objective performance targets. All
employees, and directors of the Company and its affiliates (approximately 400
people) are eligible to participate in the Plan.

The 1999 Stock Option Plan is administered by our Compensation Committee,
which is authorized, subject to the provisions of the 1999 Stock Option Plan, to
grant awards and establish rules and regulations as it deems necessary for the
proper administration of Stock Option Plan and to make whatever determinations
and interpretations it deems necessary or advisable.

Options granted under the Plan may be either (i) options intended to
qualify as "incentive stock options" under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), or (ii) non-qualified stock options.
Incentive stock options may be granted under the Plan to employees of the
Company and its affiliates. Non-qualified stock options may be granted to
consultants, directors and employees of the Company and its affiliates.

The 1999 Stock Option Plan also permits the granting of limited rights
simultaneously with the grant of any option to an employee or director. Limited
rights become exercisable in the event of a change in control of the Company.
Upon exercise, the option holder will be entitled to receive in lieu of
purchasing the Common Stock underlying the option, a lump sum cash payment equal
to the difference between the exercise price of the related option and the fair
market value of the shares of Common Stock subject to the option on the date of
exercise of the limited right.

The aggregate fair market value (determined at the time of grant) of shares
of Common Stock issuable pursuant to incentive stock options which become
exercisable in any calendar year under any incentive stock option plan of the
Company may not exceed $100,000. Incentive stock options granted under the Plan
may not be granted at a price less than the fair market value of the Common
Stock on the date of grant, or 110% of fair market value in the case of options
granted to an employee holding 10% or more of the voting stock of the Company.
Non-qualified stock options granted under the Plan may not be granted at an
exercise price less than 85% of the fair market value of the Common Stock on the
date of grant. Incentive stock options granted under the Plan expire not more
than ten years from the date of grant, or not more than five years from the date
of grant in the case of incentive stock options granted to an employee holding
10% or more of the voting capital stock of the Company. Unless otherwise
determined by the Compensation Committee, an option granted under the Plan is
exercisable, during the optionholder's lifetime, only by the optionholder and is
not transferable by him or her except by will or by the laws of interstate
succession or pursuant to a domestic relations order.

Unless otherwise determined by the Compensation Committee, upon the
termination of an optionee's employment or service for any reason other than
Disability. Termination for Cause (each as defined in the Plan) or death, the
optionee's stock options shall be exercisable only as to those shares that were
immediately exercisable by the optionee at the date of termination and only for
a period of three months following termination, except that in the event of
termination upon Retirement (as defined in the Plan), stock options

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shall be exercisable for a period of one year. In the event of a Change in
Control (as defined in the Plan) or in the event of termination of the
optionee's employment or service for Disability or death, all options held by
such optionee shall immediately vest and be exercisable for one year after such
termination of service, and , in the event of a Termination for Cause, all
rights under the optionee's option shall expire immediately upon such
Termination for Cause.

As of December 31, 2000, an aggregate of 1,579,100 shares are issuable upon
the exercise of options outstanding under the Plan. On March 31, 2001, the
closing market price per share of the Company's Common Stock was $1.75, as
reported in the NASDAQ National Market System.

FEDERAL INCOME TAX CONSIDERATIONS

The following is a description of certain U.S. federal income tax
consequences of the issuance and exercise of options under the Plan:

INCENTIVE STOCK OPTIONS. An incentive stock option does not result in
taxable income to the optionee or deduction to the Company at the time it is
granted or exercised, provided that no disposition is made by the optionee of
the shares acquired pursuant to the option within two years after the date of
grant of the option nor within one year after the date of issuance of shares to
him (the "ISO holding period"). However, the difference between the fair market
value of the shares on the date of exercise and the option price will be an item
of tax preference includable in "alternative minimum taxable income." Upon
disposition of the shares after the expiration of the ISO holding period, the
optionee will generally recognize long-term capital gain or loss based on the
difference between the disposition proceeds and the option price paid for the
shares. Such gain will be eligible for the 20 percent maximum rate if the shares
have been held for more than 12 months after option exercise. If the shares are
disposed of prior to the expiration of the ISO holding period (a "disqualifying
disposition"), the optionee generally will recognize taxable compensation, and
the Company will have a corresponding deduction, in the year of the disposition,
equal to the excess of the fair market value of the shares on the date of
exercise of the option over the option price. Any additional gain realized on
the disposition will normally constitute capital gain. If the amount realized
upon such a disqualifying disposition is less than fair market value of the
shares on the date of exercise, the amount of compensation income will be
limited to the excess of the amount realized over the optionee's adjusted basis
in the shares.

NON-QUALIFIED STOCK OPTIONS. The grant of a non-qualified option will not
result in taxable income to the optionee or deduction to the Company at the time
of grant. The optionee will recognize taxable compensation, and the Company will
have a corresponding deduction, at the time of exercise in the amount of the
excess of the then fair market value of the shares acquired over the option
price. Upon disposition of the shares, the optionee will generally realize
capital gain or loss, and his basis for determining gain or loss will be the sum
of the option price paid for the shares plus the amount of compensation income
recognized on exercise of the option.

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OPTION INFORMATION

Pursuant to the terms of the Plan, it is presently determinable that the
following options will be granted by the Company under the Plan:

NEW PLAN BENEFITS

1999 STOCK OPTION PLAN

NUMBER OF SHARES
COVERED BY
NAME AND POSITION OPTIONS TO BE GRANTED
----------------- ---------------------

Matthew P. Lawlor, Chief Executive Officer and Chairman of
the Board................................................. 23,897(1)
Raymond T. Crosier, President, Chief Operating Officer...... 23,897(1)
Carl D. Blandino, Executive Vice President, Chief Financial
Officer................................................... 23,897(1)
Alex J. Seltzer, Executive Vice President and Chief
Information Officer....................................... --
Ronald J. Bergamesca, Senior Vice President -- Marketing.... 12,745(4)
All current executive officers as a group................... 71,691
All current directors who are not executive officers as a
group..................................................... 52,500(2)(4)
All employees, including all current officers who are not
executive officers, as a group............................ 384,821(3)(4)

---------------
1. Consists of non-qualified stock options granted under the Company's
management bonus incentive plan established for 2001. Under the plan, the
options vest on the tenth anniversary of the grant date provided the optionee
continues at that time to be an employee of the Company. However, vesting of
a portion of the options may be accelerated and vest as of December 31, 2001.
The percentage of options accelerated will be tied to the Company's
performance with respect to certain pre-determined fiscal 2001 performance
criteria. If the Company does not meet a pre-established minimum performance
level, no options will receive accelerated vesting. In addition, if the
Company surpasses the pre-determined performance threshold, the named
executive officer will be granted additional options covering up to a maximum
of 8,364 additional shares. The exercise price for these options is $3.06 per
share. These options are contingent on stockholder approval of Proposal 2.

2. Consists of non-qualified stock options to purchase 7,500 shares of Common
Stock to be granted to each non-employee director during the year ending
December 31, 2001 in accordance with the Company's compensation policy for
directors. The options will vest in full in one year from the date of the
grant. Each of these options will have an exercise price equal to the fair
market value of the Common Stock as of the date of grant. The Compensation
Committee is currently evaluating the level of director compensation, however
at the present time it not determinable whether any increase in the number of
options to be granted to non-employee directors will be recommended. These
options are not dependent on the stockholders approval of Proposal 2.

3. Consists of non-qualified stock options granted under the Company's
management and non-management bonus incentive plans. The terms of options
under the management plan is described under footnote 1 above. Under the
non-management plan, the options vest on the tenth anniversary of the grant
date provided the optionee continues at that time to be an employee of the
Company. However, vesting of a portion of the options may be accelerated and
vest as of June 30, 2001. The percentage of options accelerated will be tied
to the achievement of certain pre-determined personal achievement goals for
fiscal 2001. If the optionee achieves less than 50% of his or her individual
performance goals, no options will receive accelerated vesting. The exercise
price for these options is $3.06 per share. Options for 12,745 shares granted
to Mr. Bergamesca are included in the category "all employees, including all
current officers who are not executive officers, as a group".

4. These options are not dependent on the stockholders approval of Proposal 2.

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The following table sets forth as of March 31, 2001, certain information
with respect to all options granted under the 1999 Plan to the following
individuals and groups since it was adopted.

NUMBER OF SHARES WEIGHTED AVERAGE
COVERED BY EXERCISE PRICE
NAME AND POSITION OPTIONS GRANTED PER SHARE
----------------- ---------------- ----------------

Matthew P. Lawlor, Chief Executive Officer and Chairman of
the Board................................................. 90,088 $12.19
Raymond T. Crosier, President, Chief Operating Officer...... 67,227 12.54
Carl D. Blandino, Executive Vice President, Chief Financial
Officer................................................... 83,677 16.09
Alex J. Seltzer, Executive Vice President and Chief
Information Officer....................................... 89,568 11.98
Ronald J. Bergamesca, Senior Vice President -- Marketing.... 44,465 9.53
All Current executive officers as a group................... 330,560 13.19
All current directors who are not executive officers as a
group..................................................... 130,680 10.64
All employees, including all current officers who are not
executive officers, as a group............................ 1,409,638 8.22

The affirmative vote of a majority of the votes present or represented and
entitled to vote at the Meeting is required to approve the 528,309 increase in
the aggregate number of shares of Common Stock available under the Plan and to
approve the allocation of 71,691 shares of the January increase to be used for
grants to executive officers. The Company is seeking stockholder approval of an
aggregate 600,000 shares.

THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF THE ADOPTION OF AN AMENDMENT
TO THE PLAN TO INCREASE BY 528,309 SHARES THE AGGREGATE NUMBER OF SHARES FOR
WHICH STOCK OPTIONS MAY BE GRANTED UNDER THE PLAN TO 2,486,017 SHARES AND
APPROVAL OF THE ALLOCATION OF 71,691 OF THE SHARES APPROVED BY THE BOARD IN
JANUARY FOR GRANTS TO EXECUTIVE OFFICERS, FOR AN AGGREGATE OF 600,000 SHARES TO
BE APPROVED BY STOCKHOLDERS AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN
FAVOR OF SUCH AMENDMENT AND ALLOCATION UNLESS A STOCKHOLDER HAS INDICATED
OTHERWISE ON THE PROXY.

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INDEPENDENT AUDITORS
(NOTICE ITEM 3)

The Board of Directors has appointed Ernst & Young LLP, independent
auditors, to audit the financial statements of the Company for the fiscal year
ending December 31, 2001. The Board proposes that the Stockholders ratify this
appointment. Ernst & Young LLP audited the Company's financial statements for
the fiscal year ended December 31, 2000. The Company expects that
representatives of Ernst & Young LLP will be present at the Meeting, with the
opportunity to make a statement if they so desire, and will be available to
respond to appropriate questions.

Audit Fees

The Company incurred fees from Ernst & Young LLP a total of $157,000 for
their audit of the Company's annual financial statements for the fiscal year
ended December 31, 2000 and for their quarterly reviews and the reviews of the
Company's Quarterly Reports on Form 10-Q filed during the last fiscal year.

Financial Information Systems Design and Implementation Fees

During the Company's fiscal year ended December 31, 2000, Ernst & Young LLP
did not render any information technology services to the Company.

All Other Fees

During the Company's fiscal year ended December 31, 2000, the Company
incurred fees in a total of $214,750 for the following services provided by
Ernst & Young LLP.

Audit related:

- SEC filing and private placement offering for $84,750

- Consultations with the Company on various accounting matters for $27,000

- SAS 70, Report on controls placed in operation and tests of operating
effectiveness, for $94,000

Non-audit related:

- Information technology testing for $9,000

The Audit Committee of the Board of Directors has considered whether the
provision of the services described above under the caption All Other Fees is
compatible with maintaining Ernst & Young LLP's independence.

In the event that ratification of the appointment of Ernst & Young LLP as
the independent auditors for the Company is not obtained at the Meeting, the
Board of Directors will reconsider its appointment.

The affirmative vote of a majority of the shares present or represented and
entitled to vote at the Meeting is required to ratify the appointment of the
independent auditors.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE TO APPROVE THE RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS, AND PROXIES SOLICITED
BY THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED
OTHERWISE ON THE PROXY.

OTHER MATTERS

The Board of Directors knows of no other business which will be presented
to the Meeting. If any other business is properly brought before the Meeting, it
is intended that proxies in the enclosed form will be voted in respect thereof
in accordance with the judgment of the persons voting the proxies.

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STOCKHOLDER PROPOSALS

To be considered for inclusion in our proxy statement and form of proxy
relating to the Annual Meeting of Stockholders to be held in 2001, a stockholder
proposal must be received by the Corporate Secretary at our principal executive
offices not later than January 8, 2001. Any such proposal will be subject to
Rules and Regulations under the Securities Exchange Act of 1934, as amended.

Our Bylaws provide an advance notice procedure for a stockholder to
properly bring a proposal before an annual meeting. The stockholder must give
timely written notice to the Corporate Secretary. To be timely, a stockholder
notice of the proposal must be delivered or mailed to and received at the
principal executives office of the Company not less than ninety (90) days prior
to the date of such annual meeting; provided, however, that in the event that
less than one hundred (100) days notice or prior public disclosure of the date
of the meeting is given or made to stockholders, to be timely, notice of the
proposal by the stockholder must be received not later than the close of
business on the tenth day following the date on which notice to stockholders of
such annual meeting date was mailed or such public disclosure was made.
Proposals received after such date will note be voted on at such annual meeting.
If a proposal is received before that date, the proxies that management solicits
for such annual meeting may still exercise discretionary voting authority on the
stockholder proposal under circumstances consistent with the proxy rules of the
Securities and Exchange Commission. The notice of a proposal by a stockholder
must include the stockholder's name and address, as the same appears in the
Company's record of stockholders, a brief description of the proposal, the
reason for the proposal, the number of shares of Common Stock that are
beneficially owned by the proposing stockholder and any material interest of
such stockholder in the proposed business. All stockholder proposals should be
marked for the attention of: Corporate Secretary, Online Resources Corporation,
7600 Colshire Drive, McLean, Virginia 22102.

McLean Virginia
May 8, 2001

THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER
31, 2000 (OTHER THAN EXHIBITS THERETO) FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, WHICH PROVIDES ADDITIONAL INFORMATION ABOUT THE COMPANY, IS
AVAILABLE TO BENEFICIAL OWNERS OF THE COMPANY'S COMMON STOCK WITHOUT CHARGE UPON
WRITTEN REQUEST TO: ONLINE RESOURCES CORPORATION, 7600 COLSHIRE DRIVE, MCLEAN,
VIRGINIA 22102, ATTN: INVESTOR RELATIONS.

BY ORDER OF THE BOARD OF DIRECTORS

/S/ MATTHEW P. LAWLOR

MATTHEW P. LAWLOR,
CHAIRMAN OF THE BOARD AND CHIEF
EXECUTIVE OFFICER

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APPENDIX A

CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

I. AUDIT COMMITTEE PURPOSE

The Audit Committee is appointed by the Board of Directors to assist the
Board in fulfilling its oversight responsibilities. The Audit Committee's
primary duties and responsibilities are to:

- Monitor the integrity of the Company's financial reporting process and
systems of internal controls regarding finance, accounting, and legal
compliance.

- Monitor the independence and performance of the Company's independent
auditors.

- Provide an avenue of communication among the independent auditors,
management, and the Board of Directors.

The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities and shall have direct access to
the independent auditors as well as anyone in the organization. The Audit
Committee has the ability to retain, at the Company's expense, special legal,
accounting, or other consultants or experts it deems necessary in the
performance of its duties.

II. AUDIT COMMITTEE COMPOSITION AND MEETINGS

So long as the Company is listed on the National Association of Securities
Dealers ("NASDAQ"), the Audit Committee members shall meet the requirements of
the NASDAQ. The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent non-executive
directors, free from any relationship that would interfere with the exercise of
his or her independent judgment. All members of the Committee shall have a basic
understanding of finance and accounting and be able to read and understand
fundamental financial statements, and at least one member of the Committee shall
have accounting or related financial management expertise.

Audit Committee members shall be appointed by the Board. The members of the
Committee may designate a Chair by majority vote of the Committee membership.

The Committee shall meet at least two times annually, or more frequently as
circumstances dictate. The Committee should meet privately in executive session
at least annually with management, the independent auditors and as a committee
to discuss any matters that the Committee or each of these groups believe should
be discussed.

III. AUDIT COMMITTEE RESPONSIBILITIES AND DUTIES

REVIEW PROCEDURES

1. Review and reassess the adequacy of this Charter at least annually.
Submit the charter to the Board of Directors for approval and have the
document published at least every three years in accordance with SEC
regulations.

2. Review the Company's annual audited financial statements prior to
filing or distribution. Review should include discussion with
management and independent auditors of significant issues regarding
accounting principles, practices and judgments.

3. In consultation with the management, and the independent auditors,
consider the integrity of the Company's financial reporting processes
and controls. Discuss significant financial risk exposures and the
steps management has taken to monitor, control and report such
exposures. Review significant findings prepared by the independent
auditors together with management's responses.

A-1
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INDEPENDENT AUDITORS

4. The independent auditors are ultimately accountable to the Audit
Committee and the Board of Directors. The Audit Committee shall review
the independence, including matters in the written disclosures required
by the Independence Standards Board and consideration of the
compatibility of non-audit services, and performance of the auditors
and annually recommend to the Board of Directors the appointment of the
independent auditors or approve any discharge of auditors when
circumstances warrant.

5. Review and approve requests for significant management consulting
engagements to be performed by the independent auditors firm and be
advised of any other significant study undertaken at the request of
management that is beyond the scope of the audit engagement letter.

6. On an annual basis, the Committee should review and discuss with the
independent auditors all significant relationships they have with the
Company that could impair the auditors' independence.

7. Prior to releasing the year-end earnings, discuss the results of the
audit with the independent auditors. Discuss certain matters required
to be communicated to audit committees in accordance with AICPA SAS 61.

8. Consider the independent auditors' judgments about the quality and
appropriateness of the Company's accounting principles as applied in
its financial reporting.

LEGAL COMPLIANCE

9. On at least an annual basis, review with the Company's counsel, any
legal matters that could have a significant impact on the
organization's financial statements, the Company's compliance with
applicable laws and regulations, inquiries received from regulators or
governmental agencies.

OTHER AUDIT COMMITTEE RESPONSIBILITIES

10. Annually prepare a report to shareholders as required by the Securities
and Exchange Commission. The report should be included in the Company's
annual proxy statement.

11. Perform any other activities consistent with this Charter, the
Company's By-laws and governing law, as the Committee or the Board
deems necessary or appropriate.

12. Maintain minutes of meetings and periodically report to the Board of
Directors on significant results of the foregoing activities.

A-2
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APPENDIX B

ONLINE RESOURCES CORPORATION 1999 STOCK OPTION PLAN AS AMENDED

1. DEFINITIONS.

(a) "Affiliate" means (i) a member of a controlled group of corporations of
which the Company is a member or (ii) an unincorporated trade or business which
is under common control with the Company as determined in accordance with
Section 414(c) of the Code and the regulations issued thereunder. For purposes
hereof, a "controlled group of corporations" shall mean a controlled group of
corporations as defined in Section 1563(a) of the Code determined without regard
to Section 1563(a)(4) and (e)(3)(C).

(b) "Alternate Option Payment Mechanism" refers to one of several methods
available to a Participant to fund the exercise of a stock option set out in
Section 10 hereof. These mechanisms include: broker assisted cashless exercise
and stock for stock exchange.

(c) "Award" means a grant of one or some combination of one or more
Non-statutory Stock Options, Incentive Stock Options and Limited Rights under
the provisions of this Plan.

(d) "Board of Directors" or "Board" means the board of directors of the
Company.

(e) "Change in Control" means a change in control of the Company of a
nature that; (i) would be required to be reported in response to Item 1 of the
current report on Form 8-K, as in effect on the date hereof, pursuant to Section
13 or 15(d) of the Exchange Act; or (ii) without limitation such a Change in
Control shall be deemed to have occurred at such time as (A) any "person" (as
the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 25% or more of
the Company's outstanding securities except for any securities of the Company
purchased by any tax qualified employee benefit plan of the Company; or (B)
individuals who constitute the Board of Directors of the Company on the date
hereof (the "Incumbent Board") cease for any reason to constitute at least a
majority thereof, provided that any person becoming a director subsequent to the
date hereof whose election was approved by a vote of at least three-quarters of
the directors comprising the Incumbent Board, or whose nomination for election
by the Company's stockholders was approved by a Nominating Committee serving
under an Incumbent Board, shall be, for purposes of this clause (B), considered
as though he were a member of the Incumbent Board; or (C) a plan of
reorganization, merger, consolidation, sale of all or substantially all the
assets of the Company or similar transaction occurs in which the Company is not
the resulting entity.

(f) "Code" means the Internal Revenue Code of 1986, as amended.

(g) "Committee" means a committee consisting of the entire Board of
Directors or consisting solely of two or more members of the Board of Directors
who are defined as Non-Employee Directors as such term is defined under Rule
16b-3(b)(3)(i) under the Exchange Act as promulgated by the Securities and
Exchange Commission.

(h) "Common Stock" means the Common Stock of the Company, par value, $.0001
per share or any stock exchanged for shares of Common Stock pursuant to Section
14 hereof.

(i) "Company" means Online Resources Corporation.

(j) "Date of Grant" means the effective date of an Award.

(k) "Disability" means the permanent and total inability by reason of
mental or physical infirmity, or both, of a Participant to perform the work
customarily assigned to him or, in the case of a Director, to serve on the
Board. Additionally, a medical doctor selected or approved by the Board of
Directors must advise the Committee that it is either not possible to determine
when such Disability will terminate or that it appears probable that such
Disability will be permanent during the remainder of said Participant's
lifetime.

(l) "Effective Date" means April 29, 1999, the effective date of the Plan.

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32

(m) "Employee" means any person who is currently employed by the Company or
an Affiliate, including officers, but such term shall not include Outside
Directors.

(n) "Employee Participant" means an Employee who holds an outstanding Award
under the terms of the Plan.

(o) "Exchange Act" means the Securities Exchange Act of 1934, as amended.

(p) "Exercise Price" means the purchase price per share of Common Stock
deliverable upon the exercise of each Option in order for the option to be
exchanged for shares of Common Stock.

(q) "Fair Market Value" means, when used in connection with the Common
Stock on a certain date, the last transaction price of the Common Stock quoted
for such date by the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") or the closing price reported by the New York Stock
Exchange ("NYSE") or any other stock exchange (as published by the Wall Street
Journal, if published) on such date or if the Common Stock was not traded on
such date, on the next preceding day on which the Common Stock was traded
thereon or the last previous date on which a sale is reported. If the Common
Stock is not traded on the NASDAQ, the NYSE or any other stock exchange, the
Fair Market Value of the Common Stock is the value so determined by the Board in
good faith.

(r) "Incentive Stock Option" means an Option granted by the Committee to a
Participant, which Option is designated by the Committee as an Incentive Stock
Option pursuant to Section 7 hereof and is intended to be such under Section 422
of the Code.

(s) "Limited Right" means the right to receive an amount of cash based upon
the terms set forth in Section 8 hereof.

(t) "Non-statutory Stock Option" means an Option to a Participant pursuant
to Section 6 hereof, which is not designated by the Committee as an Incentive
Stock Option or which is redesignated by the Committee as a Non-statutory Stock
Option or which is designated as an Incentive Stock Option under Section 7
hereof, but does not meet the requirements of such under Section 422 of the
Code.

(u) "Option" means the right to buy a fixed amount of Common Stock at the
Exercise Price within a limited period of time designated as the term of the
option as granted under Section 6 or 7 hereof.

(v) "Outside Director" means a member of the Board of Directors of the
Company or its Affiliates, who is not also an Employee.

(w) "Outside Director Participant" means an Outside Director who holds an
outstanding Award under the terms of the Plan.

(x) "Participant(s)" means collectively an Employee Participant and/or an
Outside Director Participant who hold(s) outstanding Awards under the terms of
the Plan.

(y) "Performance Goal" is a specific condition or goal which may be set by
the Committee as a prerequisite to the vesting of a Stock Award in accordance
with Section 9(b) hereof.

(z) "Plan" means the Online Resources Corporation 1999 Stock Option Plan,
as amended.

(aa) "Retirement" with respect to an Employee Participant means termination
of employment which constitutes retirement under any tax qualified plan
maintained by the Company. However, "Retirement" will not be deemed to have
occurred for purposes of this Plan if a Participant continues to serve as a
consultant to or on the Board of Directors of the Company or its Affiliates even
if such Participant is receiving retirement benefits under any retirement plan
of the Company or its Affiliates. With respect to an Outside Director
Participant, "Retirement" means the termination of service from the Board of
Directors of the Company or its Affiliates following written notice to the Board
as a whole of such Outside Director's intention to retire, except that an
Outside Director Participant shall not be deemed to have "retired" for purposes
of the Plan in the event he continues to serve as a consultant to the Board or
as an advisory director or director emeritus, including pursuant to any
retirement plan of the Company.

B-2
33

(bb) "Termination for Cause" shall mean, in the case of a Director, removal
from the Board of Directors, or, in the case of an Employee, termination of
employment, in both such cases as determined by the Board of Directors, because
of Participant's personal dishonesty, incompetence, willful misconduct, conduct
damaging the reputation of the Company, any breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties, willful violation
of any law, rule or regulation (other than traffic violations or similar
offenses) or in the case of an employee without a written employment agreement
with the Company, any other grounds provided for under employment policies of
the Company in effect at the Effective Date or as amended from time to time.

2. ADMINISTRATION.

(a) The Plan shall be administered by the Committee. The Committee is
authorized, subject to the provisions of the Plan, to grant awards to Employees
and establish such rules and regulations as it deems necessary for the proper
administration of the Plan and to make whatever determinations and
interpretations in connection with the Plan it deems necessary or advisable. All
determinations and interpretations made by the Committee shall be binding and
conclusive on all Employee Participants and Outside Director Participants in the
Plan and on their legal representatives and beneficiaries.

(b) Awards to Outside Directors of the Company or its Affiliates shall be
granted by the Board of Directors or the Committee, pursuant to the terms of
this Plan.

3. TYPES OF AWARDS AND RELATED RIGHTS.

The following Awards and related rights as described below in Paragraphs 6
through 8 hereof may be granted under the Plan:

(a) Non-statutory Stock Options

(b) Incentive Stock Options

4. STOCK SUBJECT TO THE PLAN.

Subject to adjustment as provided in Section 14 hereof, the maximum number
of shares of Common Stock reserved for Awards under the Plan is 2,486,017 shares
of Common Stock. These shares of Common Stock may be either authorized but
unissued shares or authorized shares previously issued and acquired or
reacquired by the Company. To the extent that Options are granted under the
Plan, the shares underlying such Awards will be unavailable for any other use
including future grants under the Plan except that, to the extent that Options
terminate, expire, or are forfeited without having vested or without having been
exercised (or in cases where a Limited Right has been granted in connection with
an option, the amount of such Limited Right received in lieu of the exercise of
such option), new Awards may be made with respect to those shares underlying
such terminated, expired or forfeited Options.

5. ELIGIBILITY.

Subject to the terms herein, all Employees and Outside Directors shall be
eligible to receive Awards under the Plan. In addition, the Committee may grant
eligibility to consultants and advisors of the Company or an Affiliate, as it
sees fit.

6. NON-STATUTORY STOCK OPTIONS.

The Committee may, subject to the limitations of the Plan and the
availability of shares reserved but unawarded under the Plan, from time to time,
grant Non-statutory Stock Options to Employees and Outside Directors, upon such
terms and conditions as the Committee may determine and grant Non-statutory
Stock Options in exchange for and upon surrender of previously granted Awards
under this Plan under such terms

B-3
34

and conditions as the Committee may determine. Non-statutory Stock Options
granted under this Plan are subject to the following terms and conditions:

(a) Exercise Price. The Exercise Price of each Non-statutory Stock Option
shall be determined by the Committee. Such Exercise Price shall not be less than
85% of the Fair Market Value of the Company's Common Stock on the Date of Grant.
Shares of Common Stock underlying a Non-statutory Stock Option may be purchased
only upon full payment of the Exercise Price or upon operation of an Alternate
Option Payment Mechanism set out in Section 10 hereof.

(b) Terms of Non-statutory Stock Options. The term during which each
Non-statutory Stock Option may be exercised shall be determined by the
Committee, but in no event shall a Non-statutory Stock Option be exercisable in
whole or in part more than 10 years from the Date of Grant. The Committee shall
determine the date on which each Non-statutory Stock Option shall become
exercisable. The shares of Common Stock underlying each Non-statutory Stock
Option installment may be purchased in whole or in part by the Participant at
any time during the term of such Non-statutory Stock Option after such
installment becomes exercisable. The Committee may, in its sole discretion,
accelerate the time at which any Non-statutory Stock Option may be exercised in
whole or in part. The acceleration of any Non-statutory Stock Option under the
authority of this paragraph shall create no right, expectation or reliance on
the part of any other Participant or that certain Participant regarding any
other unaccelerated Non-statutory Stock Options. Unless determined otherwise by
the Committee and except in the event of the Participant's death or pursuant to
a domestic relations order, a Non-statutory Stock Option is not transferable and
may be exercisable in the Participant's lifetime only by the Participant to whom
it is granted. Upon the death of a Participant, a Non-statutory Stock Option is
transferable by will or the laws of descent and distribution.

The Committee may, however, in its sole discretion, permit transferability
or assignment of a Non-statutory Stock Option if such transfer or assignment is,
in its sole determination, for valid estate planning purposes and such transfer
or assignment is permitted under the Code and Rule 16b-3 under the Exchange Act.
For purposes of this Section 6(b), a transfer for valid estate planning purposes
includes, but is not limited to: (a) a transfer to a revocable intervivos trust
as to which the Participant is both the settlor and trustee, or (b) a transfer
for no consideration to: (i) any member of the Participant's Immediate Family,
(ii) any trust solely for the benefit of members of the Participant's Immediate
Family, (iii) any partnership whose only partners are members of the
Participant's Immediate Family, and (iv) any limited liability corporation or
corporate entity whose only members or equity owners are members of the
Participant's Immediate Family. For purposes of this Section 6(b), "Immediate
Family" includes, but is not necessarily limited to, a Participant's parents,
grandparents, spouse, children, grandchildren, siblings (including half brothers
and sisters), and individuals who are family members by adoption. Nothing
contained in this Section 6(b) shall be construed to require the Committee to
give its approval to any transfer or assignment of any Non-statutory Stock
Option or portion thereof, and approval to transfer or assign any Non-statutory
Stock Option or portion thereof does not mean that such approval will be given
with respect to any other Non-statutory Stock Option or portion thereof. The
transferee or assignee of any Non-statutory Stock Option shall be subject to all
of the terms and conditions applicable to such Non-statutory Stock Option
immediately prior to the transfer or assignment and shall be subject to any
other conditions proscribed by the Committee with respect to such Non-statutory
Stock Option.

(c) NSO Agreement. The terms and conditions of any Non-statutory Stock
Option granted shall be evidenced by an agreement (the "NSO Agreement") which
shall be subject to the terms and conditions of the Plan.

(d) Termination of Employment or Service. Unless otherwise determined by
the Committee, upon the termination of a Participant's employment or service for
any reason other than Disability, death or Termination for Cause, the
Participant's Non-statutory Stock Options shall be exercisable only as to those
shares that were immediately exercisable by the Participant at the date of
termination and only for a period of three months following termination, except
that in the event of termination upon Retirement, such Non-statutory Stock
Options shall be exercisable for a period of one year. Notwithstanding any
provisions set forth herein or contained in any NSO Agreement relating to an
award of a Non-statutory Stock Option, in the event

B-4
35

of a Change in Control or in the event of termination of the Participant's
employment or service for Disability or death, all Non-statutory Stock Options
held by such Participant shall immediately vest and be exercisable for one year
after such termination of service, and, in the event of a Termination for Cause,
all rights under the Participant's Non-statutory Stock Options shall expire
immediately upon such Termination for Cause.

7. INCENTIVE STOCK OPTIONS.

The Committee may, subject to the limitations of the Plan and the
availability of shares reserved but unawarded under the Plan, from time to time,
grant Incentive Stock Options to Employees upon such terms and conditions as the
Committee may determine. Incentive Stock Options granted pursuant to the Plan
shall be subject to the following terms and conditions:

(a) Exercise Price. The Exercise Price of each Incentive Stock Option
shall be not less than 100% of the Fair Market Value of the Common Stock on the
Date of Grant. However, if at the time an Incentive Stock Option is granted to
an Employee Participant, such Employee Participant owns Common Stock
representing more than 10% of the total combined voting securities of the
Company (or, under Section 424(d) of the Code, is deemed to own Common Stock
representing more than 10% of the total combined voting power of all classes of
stock of the Company, by reason of the ownership of such classes of stock,
directly or indirectly, by or for any brother, sister, spouse, ancestor or
lineal descendent of such Employee Participant, or by or for any corporation,
partnership, estate or trust of which such Employee Participant is a
shareholder, partner or beneficiary) ("10% Owner"), the Exercise Price per share
of Common Stock deliverable upon the exercise of each Incentive Stock Option
shall not be less than 110% of the Fair Market Value of the Common Stock on the
Date of Grant. Shares may be purchased only upon payment of the full Exercise
Price or upon operation of an Alternate Option Payment Mechanism set out in
Section 10 hereof.

(b) Amounts of Incentive Stock Options. Incentive Stock Options may be
granted to any Employee in such amounts as determined by the Committee; provided
that the amount granted is consistent with the terms of Section 422 of the Code.
In the case of an Option intended to qualify as an Incentive Stock Option, the
aggregate Fair Market Value (determined as of the time the Option is granted) of
the Common Stock with respect to which Incentive Stock Options granted are
exercisable for the first time by the Employee Participant during any calendar
year (under all plans of the Employee Participant's employer corporation and its
parent and subsidiary corporations) shall not exceed $100,000. The provisions of
this Section 7(b) shall be construed and applied in accordance with Section
422(d) of the Code and the regulations, if any, promulgated thereunder. To the
extent an Award of an Incentive Stock Option under this Section 7 exceeds this
$100,000 limit, the portion of the Award in excess of such limit shall be deemed
a Non-statutory Stock Option. The Committee shall have discretion to redesignate
Options granted as Incentive Stock Options as Non-Statutory Stock Options. Such
Non-statutory Stock Options shall be subject to Section 6 hereof.

(c) Terms of Incentive Stock Options. The term during which each Incentive
Stock Option may be exercised shall be determined by the Committee, but in no
event shall an Incentive Stock Option be exercisable in whole or in part more
than 10 years from the Date of Grant. If at the time an Incentive Stock Option
is granted to an Employee Participant who is a 10% Owner, the Incentive Stock
Option granted to such Employee Participant shall not be exercisable after the
expiration of five years from the Date of Grant. No Incentive Stock Option is
transferable except by will or the laws of descent and distribution and is
exercisable in his or her lifetime only by the Employee Participant to whom it
is granted. The designation of a beneficiary does not constitute a transfer.

The Committee shall determine the date on which each Incentive Stock Option
shall become exercisable. The shares comprising each installment of the
Incentive Stock Option may be purchased in whole or in part at any time during
the term of such Option after such installment becomes exercisable. The
Committee may, in its sole discretion, accelerate the time at which any
Incentive Stock Option may be exercised in whole or in part. The acceleration of
any Incentive Stock Option under the authority of this paragraph shall not
create a right, expectation or reliance on the part of any other Participant or
that certain Participant regarding any other unaccelerated Incentive Stock
Options.

B-5
36

(d) ISO Agreement. The terms and conditions of any Incentive Stock Option
granted shall be evidenced by an agreement (the "ISO Agreement") which shall be
subject to the terms and conditions of the Plan.

(e) Termination of Employment. Unless otherwise determined by the
Committee, upon the termination of an Employee Participant's employment for any
reason other than Disability, death or Termination for Cause, the Employee
Participant's Incentive Stock Options shall be exercisable only as to those
shares that were immediately exercisable by the Participant at the date of
termination and only for a period of three months following termination, except
that in the event of termination upon Retirement, such Incentive Stock Options
shall be exercisable for a period of one year. Notwithstanding any provision set
forth herein or contained in any ISO Agreement relating to an award of an
Incentive Stock Option, in the event of a Change in Control or in the event of
termination of the Employee Participant's employment for Disability or death,
all Incentive Stock Options held by such Employee Participant shall immediately
vest and be exercisable for one year after such termination, and, in the event
of Termination for Cause, all rights under the Employee Participant's Incentive
Stock Options shall expire immediately upon termination. No Incentive Stock
Option shall be eligible for treatment as an Incentive Stock Option in the event
such Incentive Stock Option is exercised more than three months following the
date of Participant's cessation of employment. In no event shall an Incentive
Stock Option be exercisable beyond the expiration of the Incentive Stock Option
term.

(f) Compliance with Code. The Incentive Stock Options granted under this
Section 7 are intended to qualify as "incentive stock options" within the
meaning of Section 422 of the Code, but the Company makes no warranty as to the
qualification of any Option as an incentive stock option within the meaning of
Section 422 of the Code. All Options that do not so qualify shall be treated as
Non-statutory Stock Options.

8. LIMITED RIGHT.

Simultaneously with the grant of any Option to an Employee or Outside
Director, the Committee may grant a Limited Right with respect to all or some of
the shares covered by such Option. Limited Rights granted under this Plan are
subject to the following terms and conditions:

(a) Terms of Rights. In no event shall a Limited Right be exercisable in
whole or in part before the expiration of six months from the Date of Grant of
the Limited Right. A Limited Right may be exercised only in the event of a
Change in Control.

The Limited Right may be exercised only when the underlying Option is
eligible to be exercised, and only when the Fair Market Value of the underlying
shares on the day of exercise is greater than the Exercise Price of the
underlying Option.

Upon exercise of a Limited Right, the underlying Option shall cease to be
exercisable. Upon exercise or termination of an Option, any related Limited
Rights shall terminate. The Limited Rights may be for no more than 100% of the
difference between the purchase price and the Fair Market Value of the Common
Stock subject to the underlying option. The Limited Right is transferable only
when the underlying option is transferable and under the same conditions.

(b) Payment. Upon exercise of a Limited Right, the holder shall promptly
receive from the Company an amount of cash equal to the difference between the
Exercise Price of the underlying option and the Fair Market Value of the Common
Stock subject to the underlying Option on the date the Limited Right is
exercised, multiplied by the number of shares with respect to which such Limited
Right is exercised. Payments shall be less any applicable tax withholding as set
forth in Section 15 hereof.

9. PAYOUT ALTERNATIVES.

Payments due to a Participant upon the exercise of an Award, may be made
subject to the following terms and conditions:

(a) Discretion of the Committee. The Committee has the sole discretion to
determine what form of payment (whether monetary, Common Stock, a combination of
payout alternatives or otherwise) it shall use

B-6
37

in making distributions of payments for all Awards. If the Committee requests
any or all Participants to make an election as to form of distribution or
payment, it shall not be considered bound by the election.

(b) Payment in the form of Common Stock. Any shares of Common Stock
tendered in satisfaction of an obligation arising under this Plan shall be
valued at the Fair Market Value of the Common Stock on the day preceding the
date of the issuance of such stock to the Participant.

(c) Deferred Payments. The Committee, in its discretion, may permit a
Participant to elect to defer receipt of all or any part of any cash or stock
payment under the Plan, or the Committee may determine to defer receipt by some
or all Participants, of all or part of any such payment. The Committee shall
determine the terms and conditions of any such deferral, including the period of
deferral, the manner of deferral, and the method for measuring appreciation on
deferred amounts until their payout.

(d)

10. ALTERNATE OPTION PAYMENT MECHANISM.

The Committee has sole discretion to determine what form of payment it will
accept for the exercise of an Option. The Committee may indicate acceptable
forms in the ISO or NSO Agreement covering such Options or may reserve its
decision to the time of exercise. No Option is to be considered exercised until
payment in full is accepted by the Committee or its agent.

(a) Cash Payment. The exercise price may be paid in cash or by certified
check.

(b) Borrowed Funds. To the extent permitted by law, the Committee may
permit all or a portion of the exercise price of an Option to be paid through
borrowed funds.

(i) The Committee may permit payment by the tendering of previously
acquired shares of Common Stock. This includes the use of "pyramiding
transactions" whereby some number of Options are exercised; then the shares
gained through the exercise are tendered back to the Company as payment for
a greater number of Options. This transaction may be repeated as needed to
exercise all of the Options available.

(ii) Any shares of Common Stock tendered in payment of the exercise
price of an Option shall be valued at the Fair Market Value of the Common
Stock on the date prior to the date of exercise.

11. RIGHTS OF A SHAREHOLDER: NONTRANSFERABILITY.

No Participant shall have any rights as a shareholder with respect to any
shares of Common Stock covered by an Option until the date of issuance of a
stock certificate for such shares. Nothing in this Plan or in any Award granted
confers on any person any right to continue in the employ or service of the
Company or its Affiliates or interferes in any way with the right of the Company
or its Affiliates to terminate a Participant's services as an officer or other
employee at any time.

Except as permitted under the Code (with respect to Incentive Stock
Options) and the rules promulgated pursuant to Section 16(b) of the Exchange Act
or any successor statutes or rules, no Award under the Plan shall be
transferable by the Participant other than by will or the laws of intestate
succession or pursuant to a domestic relations order or unless determined
otherwise by the Committee.

12. AGREEMENT WITH GRANTEES.

Each Award will be evidenced by a written agreement(s) (whether
constituting an NSO Agreement, ISO Agreement, or any combination thereof),
executed by the Participant and the Company or its Affiliates that describes the
conditions for receiving the Awards including the date of Award, the Exercise
Price, the terms or other applicable periods, and other terms and conditions as
may be required or imposed by the Plan, the Committee, or the Board of
Directors, and may describe or specify tax law considerations or applicable
securities law considerations.
B-7
38

13. DESIGNATION OF BENEFICIARY.

A Participant may, with the consent of the Committee, designate a person or
persons to receive, in the event of death, any Award to which the Participant
would then be entitled. Such designation will be made upon forms supplied by and
delivered to the Company and may be revoked in writing. If a Participant fails
effectively to designate a beneficiary, then the Participant's estate will be
deemed to be the beneficiary.

14. DILUTION AND OTHER ADJUSTMENTS.

In the event of any change in the outstanding shares of Common Stock by
reason of any stock dividend or split, recapitalization, merger, consolidation,
spin-off, reorganization, combination or exchange of shares, or other similar
corporate change, or other increase or decrease in such shares without receipt
or payment of consideration by the Company, or in the event a capital
distribution is made, the Committee will make such adjustments to Awards to
prevent dilution, diminution or enlargement of the rights of the Participant, as
the Committee deems appropriate, including any or all of the following:

(a) adjustments in the aggregate number or kind of shares of Common Stock
or other securities that may underlie future Awards under the Plan;

(b) adjustments in the aggregate number or kind of shares of Common Stock
or other securities underlying Awards already made under the Plan;

(c) adjustments in the exercise price of outstanding Incentive and/or
Non-statutory Stock Options, or any Limited Rights attached to such
Options.

Alternatively, the Committee could provide the participant with a cash
benefit for shares underlying vested, but unexercised options, in order to
achieve the aforementioned effect. All awards under this Plan shall be binding
upon any successors or assigns of the Company.

15. TAX WITHHOLDING.

Awards under this Plan shall be subject to tax withholding to the extent
required by any governmental authority. Any withholding shall comply with Rule
16b-3 or any amendment or successive rule. Shares of Common Stock withheld to
pay for tax withholding amounts shall be valued at their Fair Market Value on
the date the Award is deemed taxable to the Participant.

16. AMENDMENT OF THE PLAN.

The Board of Directors may at any time, and from time to time, subject to
applicable rules and regulations, modify or amend the Plan, or any Award granted
under the Plan, in any respect, prospectively or retroactively; provided
however, that provisions governing grants of Incentive Stock Options, unless
permitted by the rules and regulations or staff pronouncements promulgated under
the Code shall be submitted for shareholder approval to the extent required by
such law, regulation or interpretation.

Failure to ratify or approve amendments or modifications by shareholders
shall be effective only as to the specific amendment or modification requiring
such ratification. Other provisions, sections, and subsections of this Plan will
remain in full force and effect.

No such termination, modification or amendment may adversely affect the
rights of a Participant under an outstanding Award without the written
permission of such Participant.

17. EFFECTIVE DATE OF PLAN.

The Plan shall become effective upon being presented to shareholders for
ratification for the purpose of obtaining preferential tax treatment for
Incentive Stock Options. The failure to obtain shareholder ratification for such
purposes will not affect the validity of the Plan and the Options thereunder,
provided, however, that if the Plan is not ratified, the Plan shall remain in
full force and effect, and any Incentive Stock Options granted under the Plan
shall be deemed to be Non-statutory Stock Options.

B-8
39

18. TERMINATION OF THE PLAN.

The right to grant Awards under the Plan will terminate upon the earlier
of: (i) ten (10) years after the Effective Date; (ii) the issuance of a number
of shares of Common Stock pursuant to the exercise of Options which together
with the exercise of Limited Rights is equivalent to the maximum number of
shares reserved under the Plan as set forth in Section 4. The Board of Directors
has the right to suspend or terminate the Plan at any time, provided that no
such action will, without the consent of a Participant, adversely affect a
Participant's vested rights under a previously granted Award.

19. APPLICABLE LAW.

The Plan will be administered in accordance with the laws of the State of
Delaware and applicable federal law.

20. DELEGATION OF AUTHORITY

The Committee may delegate all authority for: the determination of forms of
payment to be made by or received by the Plan; the execution of Award
agreements; the determination of Fair Market Value; and the determination of all
other aspects of administration of the Plan to the executive officer(s) of the
Company. The Committee may rely on the descriptions, representations, reports
and estimates provided to it by the management of the Company for determinations
to be made pursuant to the Plan, including the attainment of performance goals.
However, only the Committee or a portion of the Committee may certify the
attainment of a performance goal.

B-9
40
ONLINE RESOURCES CORPORATION
7600 COLSHIRE DRIVE
MCLEAN, VIRGINIA 22102

PROXY FOR
ANNUAL MEETING OF STOCKHOLDERS

JUNE 6, 2001

2:00 P.M. EASTERN STANDARD TIME

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned, revoking any previous proxies relating to these shares,
hereby acknowledges receipt of the Notice and Proxy Statement dated May 8,
2001 in connection with the Annual Meeting of Stockholders to be held on
Wednesday, June 6, 2001, at 2:00 p.m. Eastern Standard Time, at the Sheraton
Premier, 8661 Leesburg Pike, Vienna, Virginia, and hereby appoints Matthew P.
Lawlor and Carl D. Blandino, and each of them (with full power to act alone),
the attorneys and proxies of the undersigned, with power of substitution to
each, to vote all shares of the Common Stock of Online Resources Corporation
that are registered in the name provided in this Proxy and that the
undersigned is entitled to vote at the 2001 Annual Meeting of Stockholders,
and at any adjournments of the meeting, with all the powers that undersigned
would have if personally present at the meeting. Without limiting the general
authorization given by this Proxy, the proxies are, and each of them is,
instructed to vote or act as follows on the proposals set forth in this Proxy.

THIS PROXY WHEN EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE THIS PROXY WILL BE VOTED FOR PROPOSAL 1 (THE
ELECTION OF DIRECTORS) AND FOR PROPOSALS 2 AND 3.

IN THEIR DISCRETION THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH
OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENTS OF THE MEETING, INCLUDING WHETHER OR NOT TO ADJOURN THE
MEETING. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO
OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING.

(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)

------------------------------------------------------------------------------
-- FOLD AND DETACH HERE --

If you wish to vote in accordance with the Board of Directors'
recommendations, just sign on the reverse side. You need not mark any boxes.
If you do mark boxes, please mark the boxes as in this example: [X]

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE

LISTED NOMINEES AND "FOR" EACH OF THE PROPOSALS.

1. ELECTION OF DIRECTORS (or if any nominee is not available for
election, such substitute as the Board of Directors may designate):

Proposal to elect MATTHEW P. LAWLOR, ERVIN R. SHAMES AND BARRY D.
WESSLER as Directors of the Company.

MATTHEW P. LAWLOR [ ] FOR [ ] WITHHOLD VOTE

ERVIN R. SHAMES [ ] FOR [ ] WITHHOLD VOTE

BARRY D. WESSLER [ ] FOR [ ] WITHHOLD VOTE

2. Proposal to approve (i) an amendment to the Company's 1999 Stock
Option Plan to increase by 528,309 shares the aggregate number of
shares of the Company's Common Stock for which stock options may be
granted under the Company's 1999 Stock Option Plan and (ii) an
allocation of 71,691 shares for issuance to executive officers of a
500,000 share increase to the 1999 Stock Option plan approved by the
Board of Directors in January 2001.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

3. Proposal to ratify the appointment of Ernst & Young LLP as the
Company's independent auditors for the Company's fiscal year ending
December 31, 2001.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

[ ] By checking this box, I/we consent to future access and
delivery of Annual Reports and Proxy Statement electronically via the
Internet. I/We understand that the Company may no longer distribute
printed materials to me/us for any future stockholder meetings until
this consent that I/we have given is revoked. I/we understand that
I/we may revoke this consent to electronic access and delivery at any
time.

Please sign exactly as name(s) appears
hereon. Joint owners should each sign. When
signing as attorney, executor,
administrator, trustee or guardian, please
give full title as such.

Signature: Date
-------------------- -------

PLEASE CAST YOUR VOTE AS SOON AS POSSIBLE!

YOUR VOTE IS IMPORTANT!