SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

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                  [_] Soliciting Material Under Rule
[_]  Confidential, For Use of the                        14a-12
       Commission Only (as permitted
       by Rule 14a-6(e)(2))
[x]  Definitive Proxy Statement
[_]  Definitive Additional Materials

CyberSource Corporation
------------------------------------------------------------------------------------------------------------------------------------------------------

(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[x]  No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1)  Title of each class of securities to which transaction applies:
____________________________________________________________________________________
2)  Aggregate number of securities to which transaction applies:3)  Per unit price or other underlying value of transaction computed pursuantto Exchange Act Rule 0-11 (set forth the
     amount on which the filing fee iscalculated and state how it was determined):4)  Proposed maximum aggregate value of transaction:
____________________________________________________________________________________
5)  Total fee paid:
[_] Fee paid previously with preliminary materials:[_] Check box if any part of the fee is offset as provided by Exchange Act Rule0-11(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:
____________________________________________________________________________________
      2) Form, Schedule or Registration Statement No.:
____________________________________________________________________________________
      3) Filing Party:
____________________________________________________________________________________
      4) Date Filed:

CyberSource Corporation

________________

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 14, 2008

To the Stockholders of CyberSource Corporation:

     NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the “Annual Meeting”) of CyberSource Corporation, a Delaware corporation (the “Company”), will be held at the Company’s headquarters, 1295 Charleston Road, Mountain View, California 94043, on Wednesday, May 14, 2008, at 10:00 a.m., Pacific Daylight Time, for the following purposes:

1.	To elect six directors of the Company to serve until the 2009 Annual Meeting of Stockholders.
2.	To ratify the appointment of Ernst & Young LLP as the independent registered public accounting firm for the Company for the year ending December 31, 2008.
3.	To transact such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof.

The foregoing items of business are more fully described in the Proxy Statement which is attached and made a part hereof.

     The Board of Directors has fixed the close of business on March 20, 2008 as the record date for determining the stockholders entitled to notice of and to vote at the Annual Meeting and any adjournment or postponement thereof.

     WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE SUBMIT YOUR PROXY AS SOON AS POSSIBLE SO THAT YOUR SHARES CAN BE VOTED AT THE MEETING IN ACCORDANCE WITH YOUR INSTRUCTIONS. STOCKHOLDERS OF RECORD MAY VOTE THEIR SHARES (1) BY SIGNING, DATING AND PROMPTLY RETURNING THE ENCLOSED PROXY CARD IN THE ACCOMPANYING ENVELOPE, OR (2) OVER THE INTERNET (INSTRUCTIONS FOR VOTING OVER THE INTERNET ARE SET FORTH ON THE ENCLOSED PROXY CARD). IF YOU SUBMIT YOUR PROXY AND THEN DECIDE TO ATTEND THE ANNUAL MEETING TO VOTE YOUR SHARES IN PERSON, YOU MAY STILL DO SO. YOUR PROXY IS REVOCABLE IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN THE PROXY STATEMENT.

By Order of the Board of Directors, 

Richard Scudellari 

Secretary 

Mountain View, California
April 10, 2008

TABLE OF CONTENTS

	Page
INFORMATION CONCERNING SOLICITATION AND VOTING	1
PROPOSAL NO. 1 – ELECTION OF DIRECTORS	3
BOARD AND CORPORATE GOVERNANCE MATTERS	5
PROPOSAL NO. 2 – RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM	7
MANAGEMENT	9
EXECUTIVE OFFICER AND DIRECTOR COMPENSATION	12
CERTAIN RELATED PARTY TRANSACTIONS	30
AUDIT COMMITTEE REPORT	31
SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT	32
OTHER MATTERS	34

CYBERSOURCE CORPORATION
1295 Charleston Road
Mountain View, California 94043
________________

PROXY STATEMENT

INFORMATION CONCERNING SOLICITATION AND VOTING

General Information

     This Proxy Statement is furnished to the stockholders of CyberSource Corporation, a Delaware corporation (the “Company” or “CyberSource”), in connection with the solicitation by the Board of Directors of the Company (the “Board”) of proxies in the accompanying form for use in voting at the Annual Meeting of Stockholders of the Company and any adjournment or postponement thereof (the “Annual Meeting”). The Annual Meeting is to be held on Wednesday, May 14, 2008, at 10:00 a.m., Pacific Daylight Time, at the Company’s headquarters, 1295 Charleston Road, Mountain View, California 94043. The shares represented by the proxies received, properly marked, dated, executed and not revoked will be voted at the Annual Meeting.

Revocability of Proxies

     Any proxy given pursuant to this solicitation may be revoked by the person giving it at any time before it is exercised by delivering to the Company (to the attention of the Secretary) a written notice of revocation or a duly executed proxy bearing a later date, by submitting new voting instructions via the Internet, or by attending the Annual Meeting and voting in person.

Solicitation and Voting Procedures

     This Proxy Statement and the accompanying proxy were first sent by mail to stockholders on or about April 9, 2008. The cost of managing the proxy process will be borne by the Company. In addition, the Company will reimburse brokerage firms and other persons representing beneficial owners of shares for their expenses in forwarding proxy materials to such beneficial owners. The Company may conduct further solicitations personally, by telephone or by facsimile through its officers, directors and regular employees, none of whom will receive additional compensation for assisting with the solicitation.

     The close of business on March 20, 2008 has been fixed as the record date (the “Record Date”) for determining the holders of shares of Common Stock of the Company entitled to notice of and to vote at the Annual Meeting. As of the close of business on the Record Date, the Company had approximately 68,965,613 shares of Common Stock outstanding and entitled to vote at the Annual Meeting. The presence at the Annual Meeting of a majority, or approximately 34,482,807 of these shares of Common Stock of the Company, either in person or by proxy, will constitute a quorum for the transaction of business at the Annual Meeting. Each outstanding share of Common Stock on the Record Date is entitled to one vote on all matters.

     For the election of directors in Proposal No. 1, the six candidates who receive the greatest number of votes cast at the Annual Meeting are elected, provided a quorum is present. The affirmative vote of a majority of the shares of the Company’s Common Stock present in person or represented by proxy at the Annual Meeting, and entitled to vote, shall be required to approve Proposal No. 2, provided a quorum is present. Under the General Corporation Law of the State of Delaware, an abstaining vote and a broker “non-vote” are counted as present and are, therefore, included for purposes of determining whether a quorum of shares is present at the Annual Meeting. Broker “non-votes” are not counted in the tabulation of the voting results on the election of directors or for purposes of determining the number of votes cast with respect to a particular proposal and, therefore, do not have an effect on the vote. A broker “non-vote” occurs when a broker submits a proxy card with respect to shares of common stock held in a fiduciary capacity (typically referred to as being held in “street name”), but declines to vote on a particular matter because the broker has not received voting instructions from the  

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beneficial owner. Under the rules that govern brokers who are voting with respect to shares held in street name, brokers have the discretion to vote such shares on routine matters, but not on non-routine matters. Routine matters include, among others, the election of directors and ratification of auditors (Proposal Nos. 1 and 2). For the purpose of determining whether the stockholders have approved matters other than the election of directors, abstentions are treated as shares present or represented and voting, so abstentions have the same effect as negative votes.

     All shares of Common Stock represented by valid proxies will be voted in accordance with the instructions contained therein. In the absence of instructions, proxies from holders of Common Stock will be voted FOR Proposal Nos. 1 and 2.

     Shares of Common Stock cannot be voted until (i) a signed proxy card is returned, (ii) voting instructions are submitted by using the Internet, or (iii) a stockholder attends and votes in person at the Annual Meeting. Specific instructions for stockholders of record who wish to use the Internet are set forth on the enclosed proxy card. The Internet voting procedure is designed to authenticate stockholders’ identities, to allow stockholders to provide their voting instructions, and to confirm that their instructions have been recorded properly. The Company believes the procedures which have been put in place are consistent with the requirements of applicable law.

Householding of Annual Meeting Materials

     Some brokers and other nominee record holders may be participating in the practice of “householding” proxy statements and annual reports. This means that only one copy of the proxy statement and annual report may have been sent to multiple stockholders in a stockholder’s household. The Company will promptly deliver a separate copy of either document to any stockholder who contacts the Company’s investor relations department at (650) 965-6000 requesting such copies. If a stockholder is receiving multiple copies of the proxy statement and annual report at the stockholder’s household and would like to receive a single copy of those documents for a stockholder’s household in the future, stockholders should contact their broker, other nominee record holder, or the Company’s investor relations department to request mailing of a single copy of the proxy statement and annual report.

Deadline for Receipt of Stockholder Proposals

     Requirements for Stockholder Proposals to be Brought Before an Annual Meeting. For stockholder proposals to be considered properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice therefor in writing to the Secretary of the Company. To be timely for the Company’s 2009 Annual Meeting of Stockholders, a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the Company between January 24, 2009 and February 23, 2009. A stockholder’s notice to the Secretary must set forth as to each matter the stockholder proposes to bring before the Annual Meeting (i) a brief description of the business desired to be brought before the Annual Meeting and the reasons for conducting such business at the Annual Meeting, (ii) the name and record address of the stockholder proposing such business, (iii) the class and number of shares of the Company which are beneficially owned by the stockholder, and (iv) any material interest of the stockholder in such business.

Requirements for Stockholder Proposals to be Considered for Inclusion in the Company’s Proxy Materials. Stockholder proposals submitted pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and intended to be presented at the Company’s 2009 Annual Meeting of Stockholders must be received by the Company not later than December 10, 2008 in order to be considered for inclusion in the Company’s proxy materials for that meeting.

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PROPOSAL NO. 1

ELECTION OF DIRECTORS

     Pursuant to the amended Bylaws of the Company, the authorized number of directors is set at six. The Nominating Committee has recommended, and the Board of Directors has nominated, the six nominees listed below for election as directors at the Annual Meeting, each to serve until the 2009 Annual Meeting of Stockholders, until each director’s successor is elected or appointed and qualified, or until the earlier resignation or removal of the director. All of the nominees are currently directors of the Company, and each of the nominees named below has consented, if elected as a director of the Company, to serve until his term expires. The six nominees receiving the highest number of affirmative votes will be elected as directors. Unless otherwise instructed, the proxy holders will vote the proxies they receive for the six nominees of the Board of Directors named below. In the event that any nominee of the Board is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any nominee designated by the present Board of Directors to fill the vacancy. It is not expected that any nominee will be unable or will decline to serve as a director. In the event that additional persons are nominated for election as directors, the proxy holders intend to vote all proxies received by them in such a manner as will assure the election of as many of the nominees listed below as possible, with any required selection among such nominees to be determined by the proxy holders. Directors will be elected by a plurality of votes cast.

     Set forth below are the names, ages and certain biographical information relating to the director nominees and current directors.

Name of Director	Age	Position with Company	Director Since
William S. McKiernan	51	Chairman of the Board of Directors, Chief	1997
		Executive Officer
John J. McDonnell, Jr.	70	Director	2000
Steven P. Novak	60	Director (Lead Independent Director)	1997
Kenneth R. Thornton	66	Director	2001
Richard Scudellari	51	Director and Secretary	1997
Robert E. Donahue	59	Director	2007

     William S. McKiernan founded CyberSource Corporation in 1994. CyberSource Corporation initially launched software.net, an online software store and built the payment processing capability to support software.net. In 1996, CyberSource Corporation created a second business focused on payment processing and ran two separate business units, an online software store and the payment processing business. On December 31, 1997, the two business units were split into two separate corporations resulting in software.net Corp. (later, Beyond.com Corporation) and the entity that operates today as CyberSource Corporation. Mr. McKiernan has served as the Company’s Chairman and CEO from inception. He also served as the CEO of software.net until March 1998. From 1992 to 1994, Mr. McKiernan was employed by McAfee Associates, Inc. (now known as McAfee, Inc.), a developer of computer security software, where he served as President and Chief Operating Officer. Prior to joining McAfee, Mr. McKiernan was Vice President of Princeton Venture Research, Inc., an investment banking and venture consulting firm from 1990 to 1992. Mr. McKiernan also held management positions with IBM/ROLM, a telecommunications company, and PricewaterhouseCoopers LLP. Mr. McKiernan serves on the Board of Directors of the Multiple Myeloma Research Foundation, a non-profit cancer research foundation. Mr. McKiernan holds a B.S. from Boston College and an M.B.A. from the Harvard Business School.

     John J. McDonnell, Jr. has been a director of the Company since September 2000. Mr. McDonnell served as the Chief Executive Officer and Chairman of TNS Inc., a telecommunications company which provides network services for the financial industry, from March 2001 to December 2006. Mr. McDonnell founded TNS Inc. in 1990 and served as its Chief Executive Officer, President and director from its founding until it was acquired by PSINet Inc. in November 1999. In April 2001, Mr. McDonnell and a group of investors reacquired TNS Inc. from PSINet. Mr. McDonnell previously served as Chief Executive Officer of PaylinX Corporation ("PaylinX") from January 2000, and as a director of PaylinX from February 1999, both until the Company's

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acquisition of PaylinX in September 2000. From 1987 to 1989, Mr. McDonnell served as President and Chief Executive Officer of Digital Radio Networks, Inc., a local access bypass carrier for point-of-sale transactions. Mr. McDonnell also serves on the Board of Directors of DealerTrack, Inc. Mr. McDonnell holds a BEE from Manhattan College and an MEE from Rensselaer Polytechnic University.

     Steven P. Novak has been a director of the Company since the Company’s inception in December 1997. Since July 2002, Mr. Novak has been President and Chief Executive Officer of Palladio Capital Management LLC which provides management services to Palladio Partners LP, an investment partnership. Mr. Novak also serves as a director of TICC Capital Corp., a publicly-traded business development company, and several privately-held companies. Mr. Novak holds a B.S. from Purdue University and an M.B.A. from the Harvard Business School.

     Kenneth R. Thornton has been a director of the Company since April 2001. Mr. Thornton was General Manager of International Business Machines Corporation’s (“IBM”) Global Public Sector business from 1997 until his retirement in March 2001, where his responsibilities included the government, healthcare, education and pharmaceutical industries. Prior to that, he held numerous positions at IBM including Vice President and General Manager - U.S. Mid-Atlantic Area, Industry Director of State & Local Government, Commercial Regional Manager, Director of Federal Marketing Operations and Southeast New England Sales Branch Manager. Mr. Thornton is also a director of Cogent Systems, Inc., Security Storage Corporation and Hire Networks Corporation. Mr. Thornton holds a B.S. in Business Administration from Barton College and holds certificates of study from the Harvard Business School, University of California at Berkeley School of Business and IBM’s International Executive Program.

     Richard Scudellari has been a director of the Company since the Company’s inception in December 1997. Mr. Scudellari has been a partner at Morrison & Foerster LLP, a law firm, since February 1999. Mr. Scudellari holds a B.S. and J.D. from Boston College.

     Robert E. Donahue has been a director of the Company since November 2007. Mr. Donahue joined the Board as part of the merger between the Company and Authorize.Net Holdings, Inc. Prior to joining the Company, Mr. Donahue served as the President and Chief Executive Officer of Authorize.Net Holdings, Inc., from August 2004 to November 2007 and as a member of the Board of Directors from January 2004. From November 2003 to January 2004, Mr. Donahue provided financial consulting services to KO Instruments, Inc., an electronic instruments manufacturer. Previously, Mr. Donahue was Vice President and General Manager, Americas After Market Solutions at Celestica, Inc., an electronics manufacturing services provider, from November 2002 until November 2003; and President and Chief Operating Officer of Manufacturers Services, Ltd., an electronics manufacturing services company, from October 2000 to March 2002. From January 1999 to October 2000, Mr. Donahue was President and Chief Financial Officer of Manufacturers Services, Ltd. In addition to CyberSource, Mr. Donahue serves on the Board of Directors of Sycamore Networks, Inc., a publicly-traded telecommunications company. Mr. Donahue holds a B.A. from the College of the Holy Cross and an M.B.A. from the University of Massachusetts.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
THE ELECTION OF THE NOMINEES NAMED ABOVE

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BOARD AND CORPORATE GOVERNANCE MATTERS

Meetings and Committees of the Board of Directors

     During 2007, the Board met fifteen times. No director attended fewer than 75% of all the meetings of the Board and its committees on which he served after becoming a member of the Board. The Board has four committees: the Audit Committee, the Compensation Committee, the Nominating Committee, and the Special Litigation Committee. The members of the committees during fiscal 2007 are identified in the following table:

				Special
Director	Audit	Compensation	Nominating	Litigation
John J. McDonnell, Jr.	CHAIR	X		X
Steven P. Novak	X	X	X
Kenneth R. Thornton	X	CHAIR	X	X
Richard Scudellari			CHAIR

     The Audit Committee held eight meetings in 2007. The Audit Committee oversees the accounting and financial reporting processes of the Company and audits of the Company’s financial statements. In accordance with the Amended and Restated Audit Committee Charter, the Audit Committee appoints the Company’s independent registered public accounting firm and is primarily responsible for approving the services performed by the Company’s independent registered public accounting firm and for reviewing and evaluating the Company’s accounting principles and its system of internal accounting controls. The Board has determined that all members of the Audit Committee are "independent" as that term is defined in Rule 4200 of the listing standards of the Marketplace Rules of the Nasdaq Stock Market, Inc. (“Nasdaq”) and meet the requirements of applicable Securities and Exchange Commission rules, including Rule 10A-3(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Board has further determined that John J. McDonnell Jr. is an “audit committee financial expert” as defined by Item 407(d) of Regulation S-K of the Exchange Act . The Company’s Board of Directors has adopted a written charter for the Audit Committee. A copy of the Company’s Second Amended and Restated Audit Committee Charter can be viewed at the Company’s website at www.cybersource.com.

     The Compensation Committee held six meetings in 2007. The Compensation Committee’s functions are to establish and apply the Company’s compensation policies with respect to its executive officers and certain other employees. In addition, the Compensation Committee administers the Company’s incentive compensation and benefit plans. A copy of the Company’s Amended and Restated Compensation Committee charter can be viewed at the Company’s website at www.cybersource.com.

     The Nominating Committee held one meeting in 2007. The Nominating Committee monitors the size and composition of the Company’s Board of Directors. Prior to the Company’s Annual Meeting of Stockholders, the Nominating Committee, in accordance with guidelines designed to highlight necessary qualifications, assists the existing Board in selecting the candidates who will be presented to the Company’s stockholders for election as director to serve as such until the next annual meeting. The Nominating Committee will consider and make recommendations to the Board of Directors regarding any stockholder recommendations for candidates to serve on the Board of Directors. However, it has not adopted a formal process for that consideration because it believes that the informal consideration process has been adequate given the historical absence of stockholder proposals. The Nominating Committee will review periodically whether a more formal policy should be adopted. Stockholders wishing to recommend candidates for consideration by the Nominating Committee may do so by writing to the Secretary of the Company at 1295 Charleston Road, Mountain View, California 94043 providing the candidate’s name, biographical data and qualifications, a document indicating the candidate’s willingness to act if elected, and evidence of the nominating stockholder’s ownership of the Company’s Common Stock at least 120 days prior to the next annual meeting to assure time for meaningful consideration by the Nominating Committee. There are no differences in the manner in which the Nominating Committee evaluates nominees for director based on whether the nominee is recommended by a stockholder or the Nominating Committee. The Company currently does not pay any third party to identify or assist in identifying or evaluating potential nominees.

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     The Nominating Committee operates under a written charter setting forth the functions and responsibilities of the committee. A copy of the Company’s Amended and Restated Nominating Committee Charter can be viewed at the Company’s website at www.cybersource.com.

     In reviewing potential candidates for the Board, the Nominating Committee considers the individual’s experience in the online payment processing and related industries, the general business or other experience of the candidate, the needs of the Company for an additional or replacement director, the personality of the candidate, the candidate’s interest in the business of the Company, as well as numerous other subjective criteria. Of greatest importance is the individual’s integrity, willingness to actively participate and ability to bring to the Company experience and knowledge in areas that are most beneficial to the Company. The Board intends to continue to evaluate candidates for election to the Board on the basis of the foregoing criteria.

     All members of the Nominating Committee are independent directors within the meaning of Rule 4200 of the listing standards of Nasdaq.

     The Special Litigation Committee, formed in October 2002, received updates on the status of pending litigation, but held no formal meetings in 2007. The Special Litigation Committee’s function is to review and decide upon major issues regarding litigation initiated against the Company in August 2001 in connection with the Company’s initial public offering. For more information on the litigation, please refer to the Company’s annual report on Form 10-K for the year ended December 31, 2007 filed with the Securities and Exchange Commission on March 11, 2008.

Annual Meeting of Stockholders

     The Company encourages, but does not require, its Board members to attend the Annual Meeting of Stockholders. Two of the Company’s directors attended the 2007 Annual Meeting of Stockholders.

Director Independence

     The Board has determined that a majority of the Board members, Messrs. McDonnell, Novak, Scudellari, Thornton and Donahue are “independent” as that term is defined in Rule 4200 of the listing standards of Nasdaq.

Lead Independent Director

The Board has designated Steven P. Novak as the lead independent director.

Communication between Stockholders and Directors

     The Company's Board of Directors currently does not have a formal process for stockholders to send communications to the Board of Directors. Nevertheless, it is the Board’s intention that the views of stockholders will be heard by the Board or individual directors, as applicable, and that appropriate responses are provided to stockholders on a timely basis. The Board of Directors does not recommend that formal communication procedures be adopted at this time because it believes that informal communications are sufficient to communicate questions, comments and observations that could be useful to the Board. However, stockholders wishing to formally communicate with the Board of Directors may send communications directly to William S. McKiernan, Chairman of the Board, or Steven P. Novak, Lead Independent Director, c/o CyberSource Corporation, 1295 Charleston Road, Mountain View, California 94043.

Access to Corporate Governance Policies

     The Company has adopted a Code of Business Conduct that applies to, among others, the Company’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, which is designed to qualify as a “code of ethics” within the meaning of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder. The Code of Business Conduct is available on the Company’s website at www.cybersource.com. To the extent required by law, any amendments to, or waivers from, any provision of the Code of Business Conduct will be promptly disclosed to

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the public. To the extent permitted by such legal requirements, the Company intends to make such public disclosure by posting the relevant material on its website in accordance with Securities and Exchange Commission rules.

     Copies of the Company’s committee charters, and Code of Business Conduct will be provided to any stockholder upon written request to the Company at 1295 Charleston Road, Mountain View, California 94043, attention: Investor Relations.

Compensation Committee Interlocks and Insider Participation

     None of the members of the Company’s Compensation Committee is an executive officer or employee of the Company. No interlocking relationship exists between the Company’s Board of Directors or Compensation Committee and the board of directors or compensation committee of any other company.

     During fiscal year 2007, the law firm of Morrison & Foerster LLP provided legal services to the Company, for which the Company paid approximately $1.2 million in fees. Mr. Scudellari, a director of the Company, is a partner of Morrison & Foerster LLP.

Relationships Among Directors or Executive Officers

There are no family relationships among any of the directors or executive officers of the Company.

PROPOSAL NO. 2

RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

     Ernst & Young LLP has served as the Company’s independent registered public accounting firm since 1997, and the Board of Directors, upon the recommendation of the Audit Committee, has selected Ernst & Young LLP to audit the financial statements of the Company for the fiscal year ending December 31, 2008 and recommends that the stockholders ratify such selection. Unless otherwise instructed, the proxy holders will vote the proxies they receive for the ratification of Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2008. Ratification and approval of this proposal requires the affirmative vote of a majority of the outstanding shares of the Company’s Common Stock present in person or represented by proxy and entitled to vote at the Annual Meeting. In the event that ratification of this selection of auditors is not approved by a majority of the shares of Common Stock entitled to vote and voting at the Annual Meeting, the Company will review its future selection of its independent registered public accounting firm. Representatives of Ernst & Young LLP will be present at the Annual Meeting, will have the opportunity to make a statement if they so desire and will be available to respond to appropriate questions.

Audit and Non-Audit Fees

     In connection with the audit of the 2007 financial statements, the Company entered into an engagement agreement with Ernst & Young LLP which set forth the terms by which Ernst & Young LLP will perform audit services for the Company. That agreement is subject to alternative dispute resolution procedures.

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     The following table presents fees for professional audit services rendered by Ernst & Young LLP for the audit of the Company’s annual financial statements for the years ended December 31, 2006 and December 31, 2007 and fees billed for other services rendered by Ernst & Young LLP during those periods.

	Fiscal 2006			Fiscal 2007
Audit Fees (1)		$	715,031		$	668,873
Audit-Related Fees (2)			21,300			115,572
Tax Fees (3)			115,500			57,110
All Other Fees (4)			--			1,500
Total		$	851,831		$	843,055

(1)	Audit Fees consist of fees billed for professional services rendered for the audit of the Company’s consolidated annual financial statements, internal controls under Sarbanes-Oxley Rule 404, review of the interim consolidated financial statements included in quarterly reports, and services that are normally provided by Ernst & Young LLP in connection with statutory and regulatory filings or engagements.
(2)	Audit-Related Fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements and are not reported under “Audit Fees.”
(3)	Tax Fees consist of fees billed for professional services rendered for tax compliance, tax advisor and tax planning (domestic and international). These services include assistance regarding federal, state and international tax compliance and tax planning.
(4)	All Other Fees consist of fees for products and services other than the services reported above.

     In making its recommendation to ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2008, the Audit Committee has considered whether services other than audit and audit-related services provided by Ernst & Young LLP are compatible with maintaining the independence of Ernst & Young LLP.

Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

     The Audit Committee pre-approves all audit and permissible non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. The Audit Committee has adopted a policy for the pre-approval of services provided by the independent registered public accounting firm. Under the policy, pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is subject to a specific budget. In addition, the Audit Committee may also pre-approve particular services on a case-by-case basis. For each proposed service, the independent auditor is required to provide detailed back-up documentation at the time of approval.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR RATIFICATION OF
THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY’S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
FOR THE FISCAL YEAR ENDING DECEMBER 31, 2008

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MANAGEMENT

Officers and Key Employees

     The current officers and key employees of the Company, their ages and their positions are as follows:

Name	Age	Position(s)
Executive Officers
William S. McKiernan	51	Chairman of the Board of Directors and Chief Executive Officer
Scott R. Cruickshank	45	President and Chief Operating Officer
Robert J. Ford	58	Chief Technology Officer and Executive Vice President of Product Development
Steven D. Pellizzer	38	Chief Financial Officer and Senior Vice President, Finance
Michael A. Walsh	39	Senior Vice President, Worldwide Sales
Roy A. Banks	41	President, Authorize.Net LLC
George Barby	52	Vice President, Worldwide Operations
Key Employees
Perry S. Dembner	47	Vice President, Marketing
Kirsten Fry-Sanchez	48	Vice President, Product Management
David J. Kim	40	Vice President and General Counsel
Patricia A. Martin	46	Vice President, Customer Support

     William S. McKiernan founded CyberSource Corporation in 1994. CyberSource Corporation initially launched software.net, an online software store, and built the payment processing capability to support software.net. In 1996, CyberSource Corporation created a second business focused on payment processing and ran two separate business units, an online software store and the payment processing business. On December 31, 1997, the two business units were split into two separate corporations resulting in software.net Corp. (later, Beyond.com Corporation) and the entity that operates today as CyberSource Corporation. Mr. McKiernan has served as the Company’s Chairman and CEO from inception. He also served as the CEO of software.net until March 1998. From 1992 to 1994, Mr. McKiernan was employed by McAfee Associates, Inc. (now known as McAfee, Inc.), a developer of computer security software, where he served as President and Chief Operating Officer. Prior to joining McAfee, Mr. McKiernan was Vice President of Princeton Venture Research, Inc., an investment banking and venture consulting firm from 1990 to 1992. Mr. McKiernan also held management positions with IBM/ROLM, a telecommunications company, and PricewaterhouseCoopers LLP. Mr. McKiernan serves on the Board of Directors of the Multiple Myeloma Research Foundation, a non-profit cancer research foundation. Mr. McKiernan holds a B.S. from Boston College and an M.B.A. from the Harvard Business School.

     Scott R. Cruickshank has served as President and Chief Operating Officer of the Company since April 2006. Mr. Cruickshank first joined the Company in August 2005, serving as a director until June 2007. Mr. Cruickshank is the former President and Chief Operating Officer of Qsent, Inc., a venture backed company based in Portland, Oregon engaged in the business of providing contact data services and information. Prior to Qsent, Inc., Mr. Cruickshank was the Chief Marketing Officer of Paymentech, L.P. (now Chase Paymentech Solutions, LLC) from March 2000 through March 2005, where he led the company's sales, customer care, account management, marketing and service operations functions. Mr. Cruickshank joined Paymentech subsequent to Paymentech's merger with Bank One Payment Services. Mr. Cruickshank served as Managing Partner of Bank One Payment Services and Senior Vice President of First Data Merchant Services, Inc. from October of 1996 until the merger with Paymentech in July 1999. Mr. Cruickshank has also held positions of Vice President Acquirer Relations with MasterCard International, Inc. and Director of Business Development for MCI Telecommunications, Inc. Mr. Cruickshank is also an advisor to the board of directors of AuctionPay, Inc. a venture backed company serving the payment processing needs of non-profit organizations. Mr. Cruickshank holds a B.S. in Business Administration with concentrations in finance and marketing from the University of Nebraska. 

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Robert J. Ford joined the Company in June 1999. Since July 2004, he has served as Executive Vice President of Product Development, in addition to serving as the Company’s Chief Technology Officer, a position he has held since January 2002. From October 2000 to July 2004, Mr. Ford served as the Company’s Senior Vice President of Product Development. Prior to October 2000, he served as the Company’s Vice President of Engineering. From 1997 to May 1999, Mr. Ford was Vice President of Engineering for Extensity, Inc., a vendor of web-based e-business applications. From 1995 to 1997, Mr. Ford served as Vice President of Engineering for Intrinsa Corporation, a developer of defect detection software. From 1992 to 1995, Mr. Ford was Vice President of Engineering for Objectivity, Inc., a developer of database management systems. Mr. Ford was employed by Boole & Babbage, Inc., a vendor of systems management software, from 1980 to 1992, where he was Vice President of Engineering from 1981 to 1986, Vice President of Advanced Technology from 1986 until 1989, and Vice President of Systems from 1989 to 1992. Mr. Ford received a B.S. from Witwatersrand College for Advanced Technical Education in South Africa.

     Steven D. Pellizzer joined the Company in February 1999 and has served as Senior Vice President of Finance since October 2007 and prior to that since January 2002 as Vice President of Finance and prior to that he served as the Company’s Corporate Controller and Assistant Controller. In January 2003, Mr. Pellizzer was appointed as the Company’s Chief Financial Officer. Before joining the Company, Mr. Pellizzer was a Manager at PricewaterhouseCoopers LLP, an accounting firm, from 1996 to 1999. Mr. Pellizzer received a B.S. in Commerce from Santa Clara University.

     Michael A. Walsh joined the Company in September 1998 and has served as Senior Vice President of Worldwide Sales since January 2006. From December 2004 to December 2005, Mr. Walsh served as Vice President of Worldwide Sales. From September 1998 through December 2004, Mr. Walsh held positions with increasing levels of responsibility at the Company including Senior Director, Director, and Manager. Prior to joining the Company, Mr. Walsh accumulated over eight years of technology and financial services experience at Oracle Corporation and Merrill Lynch. Mr. Walsh received a B.A. in Political Science from The University of California at Irvine.

     Roy A. Banks joined the Company in November 2007 as the President of Authorize.Net LLC. Starting in August of 2000, Mr. Banks served as the Vice President of Business Development, and was later promoted to general manager of Authorize.Net Holdings, Inc., until its acquisition by the Company. Mr. Banks currently serves on the Board of Directors for the Electronic Transactions Association and Access Data Corporation. Mr. Banks holds a B.S. in Business Management and Marketing from Utah Valley State University.

     George Barby joined the Company in July 2006 and serves as the Company’s Vice President of Worldwide Operations. Prior to this, Mr. Barby was Vice President, Network Engineering and Telecommunications at Safeway, Inc. from 2002 to 2006. Mr. Barby has many years of experience in running complex data centers, networks, and payment applications. He has served as Vice President of Network and Telecommunications at First Data Corporation and Vice President of Global Telecommunications and Network Engineering at Visa. Prior to Visa, he managed Wells Fargo's network engineering.

     Perry S. Dembner joined the Company in November 2002 as the Vice President of Marketing. Immediately before joining CyberSource, and also between January 1996 and October 1998, Mr. Dembner was an independent consultant, developing business plans and marketing programs for a variety of high technology companies. From November 1998 through June 2000, he served as Vice President, Marketing at Applicast, an enterprise application service provider. From 1994 through 1995, Mr. Dembner served as Vice President, Marketing and Business Development for Honeycomb Software, a developer of Web content management systems. Prior to joining Honeycomb Software, Mr. Dembner held positions in product management and marketing at Farallon Computing and IBM/ROLM Systems, and in corporate strategy at Strategic Planning Associates (now Mercer Management Consulting). He also serves on the Board of Directors of the Merchant Risk Council. Mr. Dembner holds a B.S. in Economics from the University of Pennsylvania's Wharton School and an M.B.A. from Stanford's Graduate School of Business.

     Kirsten Fry-Sanchez joined the Company in April 2006 and serves as the Company’s Vice President of Product Management. From January 2000 to April 2006, Ms. Fry-Sanchez held various positions at First Data Corporation, including Vice President of Global Online Services for First Data Corporation's Western Union 

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web business,and Vice President for eCommerce and Marketing. Before her tenure at First Data Corporation, Ms. Fry-Sanchez had a ten year career at Royal Caribbean Cruises where, among other duties, she oversaw the industry's first automated distribution system for trade partners and played a key role in the organization's initial entry into eCommerce. She holds a bachelor's degree in liberal arts and environmental studies from Florida International University.

     David J. Kim joined the Company in July 1998 and has served as General Counsel since October 2000, prior to which he served as the Company’s Corporate Counsel. In February 2004, Mr. Kim was appointed Vice President and General Counsel. Before joining the Company, Mr. Kim was a contracts negotiator for an integrated circuits company in Sunnyvale, California, from May 1998 to July 1998. From April 1996 through June 1998, Mr. Kim held the position of Information Technology Manager at a defense litigation law firm in San Francisco, California. Between September 1994 and April 1995, Mr. Kim served an externship at the Office of the District Attorney of New York County as a Special Assistant District Attorney. Mr. Kim received a B.A. in Political Science from the University of California at Berkeley and a J.D. from the Benjamin N. Cardozo School of Law, Yeshiva University.

     Patricia A. Martin joined the Company in October 1998 and has served as the Company’s Vice President of Customer Support since January 2001. Prior to January 2001, Ms. Martin served as Senior Director of Information Technology. From July 1997 to September 1998, Ms. Martin was Senior Manager of Business Applications at Acuson Corporation, a medical imaging company. Ms. Martin also held various management positions during her career at Silicon Graphics, Inc., a computer software and hardware manufacturer, from 1987 to 1997. Ms. Martin received a B.S. in Information Technology from Santa Clara University.

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EXECUTIVE OFFICER AND DIRECTOR COMPENSATION

Compensation Discussion and Analysis

Overview of Compensation Program

     The Compensation Committee of the Board has responsibility for reviewing and developing compensation policies applicable to the Company’s executive officers and directors in accordance with the Company’s compensation philosophy, making decisions regarding all forms of compensation to executive officers and directors, and administering the Company’s 1998 and 1999 Stock Option Plans, the 1999 Non-Qualified Stock Option Plan and the Assumed PaylinX Options (collectively, the “Plans”), under which option grants may be made to executive officers, directors and other key employees.

Compensation Philosophy and Objectives

     The Compensation Committee believes that the primary goal of the Company’s executive compensation program should be related to creating stockholder value. The executive compensation policies of the Compensation Committee are designed to provide incentives to create stockholder value by attracting, retaining and motivating executive talent that contributes to the Company’s short-term and long-term success, rewarding the achievement of the Company’s short-term and long-term strategic goals, linking executive officer compensation and stockholder interests through grants of awards under the Plans, and recognizing individual contributions to Company performance.

Role of Executive Officers in Compensation Decisions

     The Compensation Committee makes all compensation decisions for the executive officers. The Chief Executive Officer annually reviews the performance of each executive officer (other than the performance of the Chief Executive Officer whose performance is reviewed by the Compensation Committee). The conclusions and recommendations reached based on these reviews, including with respect to salary adjustments and annual award amounts, are presented to the Compensation Committee. The Compensation Committee exercises its discretion in modifying any recommended adjustments or awards to executives.

Setting Executive Compensation for 2007

     Based on the foregoing objectives, the Compensation Committee structured the Company’s 2007 short-term and long-term incentive-based cash and noncash executive compensation to motivate executives to achieve the business goals set by the Company and reward the executives for achieving such goals. In furtherance of this, the Compensation Committee used market data provided by the Radford Executive Survey, a survey of executive compensation published by Radford Surveys + Consulting, a business unit of Aon Consulting, Inc., a global human resources consulting firm. The Compensation Committee also engaged Radford Surveys + Consulting to provide information about long-term incentive practices and alternatives and to provide recommendations on how best to structure an equity incentive program that aligns the interests of the executives, the Company and its stockholders.

Base Salaries

     The Company provides named executive officers and other employees with a base salary to compensate them for services rendered during the fiscal year. Base salaries for named executive officers are determined for each executive based on his or her position and responsibility. Salary levels are typically considered annually as part of the Company’s performance review process as well as upon a promotion or other change in job responsibility. Merit based increases to salaries of the executive officers are based on the Compensation Committee’s assessment of the individual’s performance.

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During its review of 2007 base salaries for executives, the Compensation Committee primarily considered:

• Market data provided by the Company’s outside consultants;
• Internal review of the executive’s compensation, both individually and relative to other executive officers; and
• Individual performance of the executive.

     In making decisions regarding the 2007 annual base salaries of the Company’s executive officers, the Compensation Committee compared the annual base salaries of the executive officers against data from the Radford Executive Survey consisting of annual base salaries of technology companies with annual revenues ranging from $50 million to $200 million. For comparison purposes, the Company’s revenues were approximately $70 million for fiscal 2006 and approximately $117 million for fiscal 2007.

     The Compensation Committee attempted to generally set the annual base salaries for executive officers at approximately the 50^th percentile of annual base salaries paid to similarly situated executives of companies with annual revenues between $50 million and $200 million. Variations to this objective occurred as dictated by the experience level and performance of the individual and market factors. The Compensation Committee believes this approach is required in order to attract and retain a well qualified base of executive officers.

     Mr. Pellizzer was promoted from Vice President of Finance to Senior Vice President of Finance on October 16, 2007. In connection with this promotion, the Compensation Committee approved an increase in base salary of $30,000 for Mr. Pellizzer, substantially consistent with the process by which the Compensation Committee determined annual base salaries for 2007 as set forth above.

Long-Term Equity Incentive Compensation

     The Compensation Committee has considered alternative forms of equity grants, such as restricted stock. However, to date, the Compensation Committee has concluded that these alternative grant types lacked the focused incentive features of stock options and there is a lack of control over the timing of taxation with restricted stock. As a result, the Compensation Committee has concluded that it would continue to utilize stock options as its primary long-term equity incentive compensation, with limited exceptions.

The Company’s stock option program assists the Company to:

• Enhance the link between the creation of stockholder value and long-term executive incentive compensation;
• Provide an opportunity for increased equity ownership by executives; and
• Maintain competitive levels of total compensation.

     Stock option award levels are generally determined based on market data and vary among participants based on their positions within the Company. In making decisions regarding the equity compensation of the Company’s executive officers, the Compensation Committee relied on data provided by Radford Surveys + Consulting that compared the equity compensation of the executive officers and the Company’s overhang and burn-rate against those of a peer group of companies with annual revenues ranging from $10 million to $200 million (most of which ranged from $40 million to $100 million) from the following industry sectors: Network Products/Services, Software Products/Services, Internet/E-Commerce, Capital Equipment, Computer Peripherals, Medical Devices/Scientific Instruments, Other High Technology, Telecommunications Products/Services. The companies comprising this peer group are:

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• ActivIdentity Corporation 

• Advent Software, Inc. 

• Blue Coat Systems, Inc. 

• Concur Technologies, Inc. 

• Corillian Corporation   

• Digimarc Corp. 

• Entrust, Inc. 

• Macrovision Corp. 

• Netratings, Inc. 

• Packeteer, Inc.   

• Salesforce.com, Inc. 

• Selectica, Inc. 

• SoncWALL, Inc. 

• Tumbleweed Communications Corp.

• Vitira Technology, Inc. 

• Watchguard Technologies, Inc.

• Websense, Inc. 

The Compensation Committee has attempted to set its equity compensation for its executive officers at the median value of equity compensation paid to similarly situated executives of companies comprising the peer group listed above. When determining specific grants, the Compensation Committee used a guideline of sizing grants within a spread of plus or minus 35% around the target grant size. Generally, an individual who has met Company performance expectations and standards is awarded a grant between low and target levels, an individual who has demonstrated superior past performance and demonstrates potential to make significant contributions to the Company’s future success is awarded a grant between target and high levels and an individual who performs below the Company’s standards does not receive a grant until his or her performance improves.

     The annual stock options awarded in 2007 were awarded in a meeting of the Compensation Committee held in March 2007. Newly-hired executives generally receive their award on the first day of employment. Compensation Committee approval of such options took place during 2007 on or before the first day of employment of the hired executive and, in each case, the awards were effective on the first day of employment. All option awards made during 2007 had an exercise price equal to the closing price of the Company’s common stock on the Nasdaq Global Market on the date of the award (or the immediately preceding trading day, if the Nasdaq Global Market was not open on the date of the award), with the exception of the award to Mr. McKiernan which was at 110% of such closing price. Pursuant to the terms of the 1999 Stock Option Plan, awards to owners of 10% or more of the Company’s issued and outstanding stock must be priced at 110% of the closing price. When Mr. McKiernan received his grant, it was believed that he owned more than 10% of the Company’s issued and outstanding stock (he, in fact, owned slightly less than 10%).

     Generally, the options granted by the Compensation Committee in connection with the hiring of employees vest at a rate of 25% of the shares underlying the option after one year of employment with the Company and the remaining shares vest in equal portions over the following 36 months, so that all shares are vested after four years. Options granted to employees who have been employed with the Company for one year typically vest in equal portions over 48 months. The term of the options granted in 2007 were generally six years. In the event an optionee terminates employment or service with the Company for any reason, other than as a result of death or disability, the vested portion of the option may generally be exercised within 30 days after the optionee’s termination of employment or service. In the event an optionee terminates employment or service as a result of the optionee’s death or disability, the vested portion of the option may generally be exercised within one year after the date of such termination.

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Chief Operating Officer/President

     In 2006, the Company added the new position of Chief Operating Officer/President, the second most senior executive of the Company. In determining the compensation for this position during 2006, the Compensation Committee evaluated market data from Radford Surveys & Consulting for similar positions in companies with annual revenues ranging from $50 million to $200 million. In an effort to attract a highly qualified candidate, the Compensation Committee agreed to, during the course of negotiations, a base salary and equity compensation for the Chief Operating Officer/President position in excess of the 75^th percentile of the competitive marketplace for 2006. During 2007, the Compensation Committee attempted to generally set the annual base salary for the Chief Operating Officer/President between the 50^th percentile and 75^th percentile of annual base salaries paid to similarly situated executives of companies with annual revenues between $50 million and $200 million.

Performance-Based Incentive Compensation

In 2007, the Company adopted a cash bonus plan for its employees, including the executive officers, pursuant to which a bonus pool was established and included 50% of every dollar by which the Company exceeded the Company’s annual operating income plan as approved by the Board of Directors up to certain maximum amounts. In establishing the maximum bonus amounts, the total cash compensation paid to similarly situated executives of companies with annual revenues ranging from $50 million to $200 million per the Radford Executive Survey was considered, as well as the total amount of bonus pool available for payment to all employees (including executive officers) of the Company and the past performance of the particular executive officer. The executive officers were entitled to cash bonuses out of the bonus pool up to those amounts as described under the “Estimated Possible Payouts Under Non-Equity Incentive Plan Awards” in the “Grants of Plan Based Awards in 2007” table on page 18. Initially, the bonus plan provided that the Compensation Committee would assess the performance of the Company against its operating income plan following the end of the fiscal year. During the course of the year, the Company revised its full year plan to increase its investment in various aspects of its business. In addition, the Company’s full year plan was materially affected by the acquisition of Authorize.Net Holdings, Inc., which closed in November 2007. Accordingly, after the third fiscal quarter, the Compensation Committee terminated the 2007 cash bonus plan and granted discretionary cash bonuses totaling $616,000 to Company employees, including executive officers. These amounts equaled 1/4 the maximum amounts payable under the 2007 cash bonus plan, and were based on the Compensation Committee’s review of the Company’s performance during the year. During January of 2008, the Compensation Committee reviewed the 2007 results and awarded additional bonuses to the Company’s employees and executive officers. These bonus awards, together with the awards made in October, were equal to the maximum amounts payable under the 2007 cash bonus plan adopted in early 2007; this reflected the Compensation Committee's positive view of the Company's performance during 2007 and market data regarding total cash compensation paid to similarly situated executives from similarly sized companies. Awards made to the executive officers under the cash bonus plan for performance in 2007 are reflected in the column entitled “Non-Equity Incentive Plan Compensation” of the “Summary Compensation Table for 2007” on page 17.

Sales Commission Incentive Plan

The Compensation Committee implemented a sales commission incentive plan for Michael A. Walsh, the Company’s Senior Vice President, Worldwide Sales. Under this plan, upon the achievement of certain quarterly goals set forth in the Company’s most current corporate financial plan for 2007, Mr. Walsh was eligible to receive an all-or-nothing bonus of $25,000 per quarter. 75% of the bonus was tied to the achievement of gross profit targets, while the remaining 25% was tied to net income targets. In addition, upon the Company's achievement of these targets, Mr. Walsh was eligible to receive an additional bonus equal to three percent of any gross profit over-achievement by the Company. Due to his eligibility to receive compensation under this sales commission incentive plan, Mr. Walsh’s participation in the Company’s cash bonus plan was limited to a maximum of $25,000. The Compensation Committee believes that this arrangement provided Mr. Walsh with a gross profit- and net income-based component to his compensation, which is appropriate considering his responsibilities and duties with the Company’s Worldwide Sales division. Mr. Walsh earned $134,258 under the sales commission incentive plan during 2007.

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Tax and Accounting Implications

Deductibility of Executive Compensation

As part of its role, the Compensation Committee reviews and considers the deductibility of executive compensation under Section 162(m) of the Internal Revenue Code, which provides that the Company may not deduct annual compensation of more than $1,000,000 that is paid to certain individuals, unless the compensation qualifies as performance-based under Section 162(m). The Committee believes that it is important for it to retain maximum flexibility in designing compensation programs that meet its stated objectives. Accordingly, the Committee, while considering tax deductibility as a factor in determining compensation, will not necessarily limit compensation to those types of compensation that will be fully deductible. The Company believes that compensation currently paid under the management incentive plans is generally fully deductible for federal income tax purposes.

Accounting for Stock-Based Compensation

     Beginning on January 1, 2006, the Company began accounting for stock options in accordance with the requirements of FASB Statement 123(R).

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

     The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

COMPENSATION COMMITTEE OF 

THE BOARD OF DIRECTORS 

John J. McDonnell, Jr. 

Steven P. Novak 

Kenneth R. Thornton 

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Summary Compensation Table for 2007

     The following table sets forth certain information concerning compensation of each person that served as the principal executive officer or principal financial officer of the Company during the fiscal year ended December 31, 2007, and the next three most highly compensated executive officers of the Company during the fiscal year ended December 31, 2007 (collectively, the “Named Executive Officers”):

				Stock		Non-Equity
				Awards	Option	Incentive Plan	All Other
Name and		Salary	Bonus	(1)	Awards (1)	Compensation	Compensation	Total
Principal Position	Year	($)	($)	($)	($)	($)	($)	($)
William S.	2007	$340,000	—	—	$319,009	$100,000	—	$759,009
McKiernan
Chairman and	2006	$318,750	—	—	$207,649	$83,395	—	$609,794
Chief Executive
Officer
Steven D.	2007	$245,000(2)	—	—	$237,312	$63,750	—	$546,062
Pellizzer
Chief Financial
Officer and Senior	2006	$218,750	—	—	$161,272	$62,546	—	$442,568
Vice President of
Finance
Scott R.	2007	$311,250	—	$209,085	$1,263,554	$42,500	—	$1,826,389
Cruickshank(3)
President and	2006	$225,000	—	$112,480	$908,033	$63,750(6)	$1,750(4)	$1,311,013
Chief Operating
Officer
Robert J. Ford	2007	$276,250	—	—	$246,609	$75,000	—	$597,859
Chief Technology
Officer and	2006	$255,000	$30,000	—	$159,873	$62,546	$5,855(5)	$513,274
Executive Vice
President of
Product
Development
Michael A. Walsh	2007	$224,000	—	—	$287,613	$159,258(7)	—	$670,871
Senior Vice
President,	2006	$215,000	—	—	$187,066	$194,459(8)	—	$596,525
Worldwide Sales

(1)

Represents the proportionate amount of the total fair value of the stock and option awards recognized by the Company as an expense for financial accounting purposes, disregarding for this purposes the estimate of forfeitures related to service-based vesting conditions. The fair value of these awards and the amounts expensed were determined in accordance with Financial Accounting Standards Board Statement of Financial Accounting Standards No. 123 (revised 2004) Share-Based Payments (FAS123R). See Note 1 to our combined and consolidated financial statements for the year ended December 31, 2007 contained in our Annual Report on Form 10-K for the year ended December 31, 2007 for a discussion of all assumptions made in connection with the computation of these values.

(2)

Mr. Pellizzer was promoted to the position of Senior Vice President of Finance on October 16, 2007. In connection with this promotion, Mr. Pellizzer received a salary increase of $30,000. Therefore, the 2007 numbers reflected in this table for Mr. Pellizzer reflect the pro rata increase in base salary that Mr. Pellizzer received.

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(3)	Mr. Cruickshank became President and Chief Operating Officer on April 3, 2006. Therefore, the 2006 numbers reflected in this table for Mr. Cruickshank are on a pro rata basis with respect to his salary. For more information regarding Mr. Cruickshank’s compensation, see page 19 for a discussion of his executive employment agreement with the Company.
(4)	Consists of the retainer paid to Mr. Cruickshank for his service as a director between January 1, 2006 and April 3, 2006. On April 3, 2006, Mr. Cruickshank was appointed as President and Chief Operating Officer of the Company and he remained as a director of the Company at such time.
(5)	Consists of the gross-up for payment of taxes paid to Mr. Ford for his bonus of $10,000.
(6)	Pursuant to the executive employment agreement between the Company and Scott Cruickshank which is described on page 19, Mr. Cruickshank was eligible for an annual cash bonus of $85,000, which bonus was guaranteed for fiscal 2006. The bonus was paid on a pro rata basis for the period that Mr. Cruickshank served as President and Chief Operating Officer for 2006.
(7)	Consists of $25,000 earned pursuant to the Company’s cash bonus plan and $134,258 earned pursuant to the Company’s sales commission plan.
(8)	Consists of $20,848 earned pursuant to the Company’s cash bonus plan and $173,611 earned pursuant to the Company’s sales commission plan.

Grants of Plan Based Awards in 2007

     The following table sets forth certain information concerning grants of awards made to each Named Executive Officer during the fiscal year ended December 31, 2007:

								All			Grant
								Other			Date
								Stock	All Other		Fair
								Awards:	Option	Exercise	Value of
								Number	Awards:	or Base	Stock
								of Shares	Number of	Price of	and
								of Stock	Securities	Option	Option
		Estimated Possible Payouts			Estimated Possible Payouts			or Units	Underlying	Awards	Awards
		Under Non-Equity Incentive Plan Awards			Under Equity Incentive Plan Awards			(#)	Options (#)	($/Sh)	(2)
	Grant	Threshold	Target	Maximum	Threshold	Target	Maximum
Name	Date	($)	(1) ($)	($)	(#)	(#)	(#)
William S.	—	$0	$100,000	$100,000	—	—	—	—	—	—	—
McKiernan
	3/5/07	—	—	—	—	—	—	—	85,000	$13.45	$441,320
Steven D.	__	$0	$63,750	$63,750	—	—	—	__	__	__	—
Pellizzer
	3/5/07	—	—	—	—	—	—	—	65,000	$12.23	$359,983
Scott R.	__	$0	$42,500	$42,500	—	__	—	—	—	—	—
Cruickshank
Robert J.	—	$0	$75,000	$75,000	—	—	—	__	—	—	—
Ford
	3/5/07	—	—	—	—	—	—	—	65,000	$12.23	$359,983
Michael A.	__	$0	$159,258(3)	—	—	—	—	—	—	—	—
Walsh
	3/5/07	—	—	—	—	—	—	—	65,000	$12.23	$359,983

(1) Additional information regarding the cash bonus plan is available under the heading “Performance Based Incentive Compensation” in the Compensation Discussion and Analysis on page 15.

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(2)	Represents the grant date fair value of the award determined in accordance with FAS123(R). See Note 1 to our combined and consolidated financial statements for the year ended December 31, 2007 contained in our Annual Report on Form 10-K for the year ended December 31, 2007 for a discussion of all assumptions made in connection with the computation of these values.
(3)	Represents a potential payout of $25,000 under the Company’s cash bonus plan and a potential payout of $100,000 for meeting certain gross profit targets, which bonus is payable on a quarterly basis. In addition, Mr. Walsh is eligible to earn 3% of each dollar that exceeds the target gross profit.

Employment Agreements

Oral agreements with certain named executive officers

Mr. McKiernan, Mr. Ford, Mr. Pellizzer and Mr. Walsh have oral employment arrangements with the Company. In addition to the base salary listed above, each individual’s employment term is at-will, and each officer was eligible during 2007, pursuant to the initial cash bonus plan approved by the Compensation Committee, to receive a cash bonus if the Company exceeded certain corporate operating income milestones as discussed above. The initial cash bonus plan was terminated and each individual received a discretionary bonus during 2007 as described above.

Scott R. Cruickshank Employment Agreement

     The Company and Scott R. Cruickshank are parties to an executive employment agreement dated April 3, 2006 (the “Cruickshank Agreement”). Mr. Cruickshank’s annual base salary under the Cruickshank Agreement is $300,000, subject to adjustment from time to time by the Company. In addition, from the period of April 2006 to April 2007, Mr. Cruickshank was eligible to earn a performance bonus of up to $85,000, based upon achievement of milestones as determined by the Company during that period. The payment of Mr. Cruickshank’s cash performance bonus for fiscal 2006 was guaranteed. The Cruickshank Agreement provides for an option to purchase 550,000 shares of the Company’s Common Stock of which 275,000 shares shall vest on the fourth anniversary of the date of Mr. Cruickshank’s commencement of employment, and the remaining 275,000 shares shall vest on the fifth anniversary of the commencement of Mr. Cruickshank’s employment. Mr. Cruickshank further received pursuant to the Cruickshank Agreement an additional option to purchase 300,000 shares of the Company’s Common Stock which will vest in three equal installments, 18 months, 36 months and 54 months, from the commencement of Mr. Cruickshank’s employment based upon achievement of certain conditions relating to the future stock price of the Company. The Cruickshank Agreement further provides for a restricted stock award of 100,000 shares of restricted stock of which 50,000 shares shall vest on the fourth anniversary of the commencement of Mr. Cruickshank’s employment and 50,000 shares shall vest on the fifth anniversary of the commencement of Mr. Cruickshank’s employment. In the event the Cruickshank Agreement is terminated by the Company without cause (as that term is defined in the Cruickshank Agreement), Mr. Cruickshank shall receive (a) payment of severance in the amount of twelve months of his current salary, and (b) in the event such termination occurs after the first year anniversary of Mr. Cruickshank’s employment, partial acceleration of vesting of his restricted stock. In the event the Cruickshank Agreement is terminated as result of the death of Mr. Cruickshank following the one year anniversary of his employment, his beneficiaries shall receive partial acceleration of vesting of Mr. Cruickshank’s restricted stock, and in the event the Cruickshank Agreement is terminated by Mr. Cruickshank for good reason (as that term is defined in the Cruickshank Agreement), Mr. Cruickshank shall receive payment of severance in the amount of twelve months of his current salary.

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Outstanding Equity Awards at December 31, 2007

     The following table sets forth certain information concerning unexercised options, stock that has not vested and equity incentive plan awards for each Named Executive Officer outstanding as of the end of the fiscal year ended December 31, 2007:

	Option Awards					Stock Awards
									Equity
									Incentive
									Plan
								Equity	Awards:
			Equity					Incentive	Market or
			Incentive					Plan	Payout
			Plan					Awards:	Value of
			Awards:			Number	Market	Number of	Unearned
	Number of	Number of	Number of			of Shares	Value of	Unearned	Shares,
	Securities	Securities	Securities			or Units	Shares or	Shares,	Units or
	Underlying	Underlying	Underlying			of Stock	Units of	Units or	Other
	Unexercised	Unexercised	Unexercised	Option		That	Stock That	Other	Rights That
	Options	Options	Unearned	Exercise	Option	Have Not	Have Not	Rights That	Have Not
	(#)	(#)	Options	Price	Expiration	Vested	Vested	Have Not	Vested(1)
Name	Exercisable	Unexercisable	(#)	($)	Date	(#)	($)	Vested	($)
William S.
McKiernan	200,000 (2)	—	—	$1.76	02/08/2012	—	—	—	—
	75,000 (3)	—	—	$2.48	02/27/2013	—	—	—	—
	97,916 (4)	2,084	2,084	$5.46	01/19/2014	—	—	—	—
	68,750 (5)	31,250	31,250	$5.97	03/07/2015	—	—	—	—
	43,750 (6)	56,250	56,250	$9.19	03/09/2012	—	—	—	—
	15,937 (7)	69,063	69,063	$13.45	03/05/2013	—	—	—	—
Steven D.
Pellizzer	6,000 (8)	—	—	$33.25	01/27/2010	—	—	—	—
	76,000 (9)	—	—	$2.25	02/27/2013	—	—	—	—
	68,541 (10)	1,559	1,559	$4.96	01/19/2014	—	—	—	—
	12,500 (11)	2,500	2,500	$5.12	08/26/2014	—	—	—	—
	41,250 (12)	18,750	18,750	$5.43	03/07/2015	—	—	—	—
	26,250 (13)	33,750	33,750	$8.36	03/09/2012	—	—	—	—
	12,187 (14)	52,813	52,813	$12.23	03/05/2013	—	—	—	—
Scott R.
Cruickshank	—	550,000 (15)	550,000	$10.46	04/03/2013	—	—	—	—
	100,000 (16)	—	—	$10.46	04/03/2013	—	—	—	—
	—	100,000 (17)	100,000	$10.46	04/03/2009	—	—	—	—
	—	100,000 (18)	100,000	$10.46	10/03/2010	—	—	—	—
	—	—	—	—	—	—	—	100,000(19)	$1,102,000
Robert J.
Ford	121,440 (20)	—	—	$9.00	06/01/2009	—	—	—	—
	12,500 (21)	—	—	$41.25	12/29/2009	—	—	—	—
	50,000 (22)	—	—	$32.125	03/31/2010	—	—	—	—
	70,000 (23)	—	—	$2.25	02/27/2013	—	—	—	—
	4,688 (24)	1,146	1,146	$4.96	01/19/2014	—	—	—	—
	1,875 (25)	4,375	4,375	$4.73	07/19/2014	—	—	—	—
	16,609 (26)	17,188	17,188	$5.43	03/07/2015	—	—	—	—
	32,812 (27)	42,188	42,188	$8.36	03/09/2012	—	—	—	—
	12,187 (28)	52,813	52,813	$12.23	03/05/2013	—	—	—	—

20

	Option Awards					Stock Awards
									Equity
									Incentive
									Plan
								Equity	Awards:
			Equity					Incentive	Market or
			Incentive					Plan	Payout
			Plan					Awards:	Value of
			Awards:			Number	Market	Number of	Unearned
	Number of	Number of	Number of			of Shares	Value of	Unearned	Shares,
	Securities	Securities	Securities			or Units	Shares or	Shares,	Units or
	Underlying	Underlying	Underlying			of Stock	Units of	Units or	Other
	Unexercised	Unexercised	Unexercised	Option		That	Stock That	Other	Rights That
	Options	Options	Unearned	Exercise	Option	Have Not	Have Not	Rights That	Have Not
	(#)	(#)	Options	Price	Expiration	Vested	Vested	Have Not	Vested(1)
Name	Exercisable	Unexercisable	(#)	($)	Date	(#)	($)	Vested	($)
Michael A.
Walsh	1,563 (29)	—	—	$0.54	10/19/2008	—	—	—	—
	2,818 (30)	—	—	$3.62	03/29/2009	—	—	—	—
	1,500 (31)	—	—	$32.125	03/31/2010	—	—	—	—
	3,500 (32)	—	—	$16.312	04/19/2010	—	—	—	—
	750 (33)	—	—	$6.75	08/11/2010	—	—	—	—
	3,000 (34)	—	—	$1.125	04/09/2011	—	—	—	—
	9,000 (35)	—	—	$1.60	02/08/2012	—	—	—	—
	6,188 (36)	—	—	$2.25	02/27/2013	—	—	—	—
	8,958 (37)	209	209	$4.96	01/19/2014	—	—	—	—
	8,959 (38)	625	625	$4.40	03/10/2014	—	—	—	—
	150,000 (39)	50,000	50,000	$7.01	12/13/2014	—	—	—	—
	6,875 (40)	3,125	3,125	$5.43	03/07/2015	—	—	—	—
	21,875 (41)	28,125	28,125	$8.36	03/09/2012	—	—	—	—
	12,187 (42)	52,813	52,813	$12.23	03/05/2013	—	—	—	—

(1)	Reflects the value as calculated based on the closing price of the Company’s Common Stock on December 29, 2006 of $11.02 per share.
(2)	1/48th of the shares subject to the grant vested on February 1, 2002, and 1/48th of the shares subject to the grant vest each month thereafter.
(3)	1/48thof the shares subject to the grant vested on March 27, 2003, and 1/48thof the shares subject to the grant vest each month thereafter.
(4)	1/48thof the shares subject to the grant vested on February 19, 2004, and 1/48thof the shares subject to the grant vest each month thereafter.
(5)	1/48thof the shares subject to the grant vested on April 7, 2005, and 1/48thof the shares subject to the grant vest each month thereafter.
(6)	1/48thof the shares subject to the grant vested on April 9, 2006, and 1/48thof the shares subject to the grant vest each month thereafter.
(7)	1/48thof the shares subject to the grant vested on April 5, 2007, and 1/48thof the shares subject to the grant vest each month thereafter.
(8)	1/48thof the shares subject to the grant vested on February 27, 2000, and 1/48thof the shares subject to the grant vest each month thereafter.
(9)	1/48thof the shares subject to the grant vested on March 27, 2003, and 1/48thof the shares subject to the grant vest each month thereafter.

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(10)	1/48thof the shares subject to the grant vested on February 19, 2004, and 1/48thof the shares subject to the grant vest each month thereafter.
(11)	1/48thof the shares subject to the grant vested on September 1, 2004, and 1/48thof the shares subject to the grant vest each month thereafter.
(12)	1/48thof the shares subject to the grant vested on April 7, 2005, and 1/48thof the shares subject to the grant vest each month thereafter.
(13)	1/48thof the shares subject to the grant vested on April 9, 2006, and 1/48thof the shares subject to the grant vest each month thereafter.
(14)	1/48thof the shares subject to the grant vested on April 5, 2007, and 1/48thof the shares subject to the grant vest each month thereafter.
(15)	50% of the shares subject to the grant vest on April 3, 2010 and the remaining 50% vest on April 3, 2011.
(16)	100% of the shares subject to the grant vest if, at any time prior to October 3, 2007, the average stock price of the Company over a thirty-day period that includes at least twenty trading days equals or exceeds $13.00 per share.
(17)	100% of the shares subject to the grant vest if, at any time prior to April 3, 2009, the average stock price of the Company over a thirty-day period that includes at least twenty trading days equals or exceeds $18.00 per share.
(18)	100% of the shares subject to the grant vest if, at any time prior to October 3, 2010, the average stock price of the Company over a thirty-day period that includes at least twenty trading days equals or exceeds $24.18.
(19)	50% of the shares subject to the restricted stock award vest and the risk of forfeiture shall lapse as to such shares on April 3, 2010 and the remaining 50% of the shares subject to the restricted stock award will vest and be released from the risk of forfeiture on April 3, 2011.
(20)	25% of the shares subject to the grant vested on June 1, 2000 and 1/48thof the shares subject to the grant vest each month thereafter.
(21)	25% of the shares subject to the grant vested on December 29, 2000 and 1/48thof the shares subject to the grant vest each month thereafter.
(22)	2/48thof the shares subject to the grant vested on March 31, 2000, and 1/48thof the shares subject to the grant vest each month thereafter.
(23)	1/48thof the shares subject to the grant vested on March 27, 2003, and 1/48thof the shares subject to the grant vest each month thereafter.
(24)	1/48thof the shares subject to the grant vested on February 19, 2004, and 1/48thof the shares subject to the grant vest each month thereafter.
(25)	1/48thof the shares subject to the grant vested on August 1, 2004, and 1/48thof the shares subject to the grant vest each month thereafter.
(26)	1/48thof the shares subject to the grant vested on April 7, 2005, and 1/48thof the shares subject to the grant vest each month thereafter.
(27)	1/48thof the shares subject to the grant vested on April 9, 2006, and 1/48thof the shares subject to the grant vest each month thereafter.

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(28)	1/48thof the shares subject to the grant vested on April 5, 2007, and 1/48thof the shares subject to the grant vest each month thereafter.
(29)	25% of the shares subject to the grant vested on October 19, 1999 and 1/48thof the shares subject to the grant vest each month thereafter.
(30)	25% of the shares subject to the grant vested on March 29, 2000, and 1/48thof the shares subject to the grant vest each month thereafter.
(31)	2/48thof the shares subject to the grant vested on March 31 2000, and 1/48thof the shares subject to the grant vest each month thereafter.
(32)	1/48thof the shares subject to the grant vested on May 19, 2000, and 1/48thof the shares subject to the grant vest each month thereafter.
(33)	1/48thof the shares subject to the grant vested on September 11, 2000, and 1/48thof the shares subject to the grant vest each month thereafter.
(34)	1/48thof the shares subject to the grant vested on May 9, 2001, and 1/48thof the shares subject to the grant vest each month thereafter.
(35)	1/48thof the shares subject to the grant vested on February 1, 2002, and 1/48thof the shares subject to the grant vest each month thereafter.
(36)	1/48thof the shares subject to the grant vested on March 27, 2003, and 1/48thof the shares subject to the grant vest each month thereafter.
(37)	1/48thof the shares subject to the grant vested on February 19, 2004, and 1/48thof the shares subject to the grant vest each month thereafter.
(38)	1/48thof the shares subject to the grant vested on April 10, 2004, and 1/48thof the shares subject to the grant vest each month thereafter.
(39)	1/48thof the shares subject to the grant vested on January 1, 2005 and 1/48thof the shares subject to the grant vest each month thereafter.
(40)	1/48thof the shares subject to the grant vested on April 7, 2005, and 1/48thof the shares subject to the grant vest each month thereafter.
(41)	1/48thof the shares subject to the grant vested on April 9, 2006, and 1/48thof the shares subject to the grant vest each month thereafter.
(42)	1/48thof the shares subject to the grant vested on April 5, 2007, and 1/48thof the shares subject to the grant vest each month thereafter.

23

Option Exercises in 2007

     The following table sets forth certain information concerning each exercise of stock options for each Named Executive Officer during the fiscal year ended December 31, 2007:

	Option Awards
	Number of Shares Acquired	Value Realized
	on Exercise	on Exercise (1)
Name	(#)	($)
William S. McKiernan	—	—
Steven D. Pellizzer	3,500	42,787
	1,500	9,900
	7,105	54,566
	1,395	10,714
	6,000	54,480
	10,000	190,120
	14,000	135,800
Scott R. Cruickshank	—	—
Robert J. Ford	12,500	155,812
	12,500	144,812
	12,500	150,312
	12,500	143,562
	10,100	116,705
	2,400	28,644
	12,500	149,937
	12,500	143,375
	10,000	112,400
	2,500	28,250
	10,000	106,100
	10,000	106,100
	10,000	106,300
	10,000	111,700
	2,500	29,225
	15,000	176,250
	10,000	103,100
	5,000	50,200
	5,000	49,900
	5,000	51,900
	10,000	105,200
	2,500	19,350
	7,500	81,525
	10,000	75,900
	10,000	72,200

24

	Option Awards
	Number of Shares Acquired	Value Realized
	on Exercise	on Exercise (1)
Name	(#)	($)
	5,000	34,150
	2,645	18,621
	1,200	8,292
	5,000	32,750
	5,000	32,800
	5,000	33,650
	6,300	43,596
	3,700	28,564
	1,250	10,050
	1,250	10,337
	12,500	103,000
	1,571	15,616
	5,929	56,148
	14,345	149,947
	5,655	55,589
	929	10,572
	4,071	40,954
	20,000	199,400
	1,334	12,860
	20,000	183,000
	16,060	107,281
	3,940	35,184
Michael A. Walsh	—	—

(1) Reflects the difference between the market price and the exercise price of the options.

Potential Payment Upon Termination or Change-in-Control

Acceleration of Options Upon Change-in-Control and Termination

     In the event of an “involuntary termination” or “constructive termination” of any of the named executive officers within one year following a change in control of the Company, one-half of the shares subject to the named executive officer’s option which are then unvested will become fully vested and exercisable immediately upon such termination.

     An “involuntary termination” is a termination for reasons other than commission of a felony or any other crime involving moral turpitude, repeated failure to perform services in accordance with the requests of superiors within the context of the officer’s duties, or the commission of a material fraud, misappropriation, embezzlement or other act of gross dishonesty on the part of the executive which resulted in material loss, damage or injury to the Company.

     A “constructive termination” is the voluntary termination by the executive after any of the following are undertaken without the executive’s consent: (i) the assignment of the executive of any duties or responsibilities

25

or a change in the executive’s title or office, in each case which result in any material diminution or material adverse change of the executive’s position, status or circumstances as in effect immediately prior to the change in control; removal of the executive from or any failure to re-elect executive to any of his positions, except in connection with the termination of his employment for death, disability, retirement, fraud, misappropriation, embezzlement or any other voluntary termination of employment other than a constructive termination; provided, however, that no constructive termination shall be deemed to occur following a change in control of the Company by merely virtue of the Company operating as a subsidiary or division of the acquiring company if the executive continues with no material adverse change or material diminution in his title, duties or responsibilities following the change-in-control; (ii) a reduction by the Company in the executive’s annual base salary by greater than 10%; (iii) any failure by the Company to continue in effect any benefit plan or arrangement, including incentive plans or plans to receive securities of the Company in which the executive is participating at the time of the change in control of the Company or the taking of any action by the Company which would materially adversely affect executive’s participation in or reduce the executive’s benefits under any of such benefit plans or deprive the executive of any fringe benefit enjoyed by the executive at the time of a change in control of the Company; provided, however, that no constructive termination shall be deemed to occur if, following the change in control, the Company offers a range of benefit plans and programs which, taken as a whole, are comparable to the benefit plans that the Company is participating in at the time of the change in control; (iv) a relocation of executive, or the Company’s principal offices if the executive’s principal office is at such offices, to a location more than 40 miles from the location at which the executive was performing his duties prior to a change in control of the Company, except for required travel by the executive on the Company’s business to an extent substantially consistent with the executive’s business travel obligations at the time of a change in control of the Company; (v) any material breach by the Company of any provisions of the option grant; or (vi) any failure by the Company to obtain the assumption of the option grant by any successor or assign of the Company.

     The information in the table below quantifies the acceleration of the option grants described above if a change-in-control occurred on December 31, 2007, and the named executive’s employment was terminated as a result of an involuntary termination or constructive termination on December 31, 2007, based on the Company’s closing stock price on that date.

Name	Stock Options ($)
William S. McKiernan	$587,688
Steven D. Pellizzer	$303,025
Robert J. Ford	$486,701
Michael A. Walsh	$572,436

Scott R. Cruickshank Employment Agreement

     Pursuant to the Cruickshank Agreement, in the event the Cruickshank Agreement is terminated by the Company without cause (as that term is defined in the Cruickshank Agreement), Mr. Cruickshank shall receive (a) payment of severance in the amount of twelve months of his current salary, and (b) in the event such termination occurs after the first year anniversary of Mr. Cruickshank’s employment, partial acceleration of vesting of his restricted stock. In the event the Cruickshank Agreement is terminated as result of the death of Mr. Cruickshank after the first anniversary of his employment, his beneficiaries shall receive partial acceleration of vesting of Mr. Cruickshank’s restricted stock, and in the event the Cruickshank Agreement is terminated by Mr. Cruickshank for good reason (as that term is defined in the Cruickshank Agreement), Mr. Cruickshank shall receive payment of severance in the amount of twelve months of his current salary.

26

     The information in the table below quantifies the severance payments and acceleration of restricted as described above if Mr. Cruickshank was terminated on December 31, 2007, based on the Company’s closing stock price on that date.

	Termination without cause		Termination as a result of death	Termination by Mr. Cruickshank for good reason
Name	Severance	Acceleration of restricted stock	Acceleration of restricted stock	Severance
Scott Cruickshank	$311,250	$586,410	$586,410	$311,250

Director Compensation in 2007

     The following table sets forth certain information concerning the compensation of our directors for the fiscal year ended December 31, 2007:

		Option
	Fees Earned or	Awards
	Paid in Cash	(3)(4)	Total
Name (1)	($)	($)	($)
Robert Donahue (2)	$0	$35,541	$35,541
John J. McDonnell Jr.	$13,500	$88,755	$102,255
Steven P. Novak	$16,000	$88,755	$104,755
Kenneth R. Thornton	$16,000	$88,755	$104,755
Richard Scudellari	$12,500	$88,755	$101,255

(1)	Mr. McKiernan is also a Named Executive and pursuant to Rule 402, his compensation has been fully set forth above.
(2)	Mr. Donahue joined the Board of Directors in November 2007 upon the completion of the Authorize.Net acquisition.
(3)	Represents the proportionate amount of the total fair value of the stock and option awards recognized by the Company as an expense in 2007 for financial accounting purposes, disregarding for this purposes the estimate of forfeitures related to service-based vesting conditions. The fair value of these awards and the amounts expensed in 2007 were determined in accordance with FAS123R. See Note 1 to our combined and consolidated financial statements for the year ended December 31, 2007 contained in our Annual Report on Form 10-K for the year ended December 31, 2007 for a discussion of all assumptions made in connection with the computation of these values.
(4)	The aggregate grant date fair value for each of the awards granted on January 1, 2007 was $49,903 and the aggregate grant date fair value for each of the awards granted on March 5, 2007 was $38,852. The aggregate grant date fair value for Mr. Donahue’s award granted on November 1, 2007 was $35,541.

27

Agreements with Non-Employee Directors

     Each non-employee member of the Board of Directors of the Company was eligible to receive compensation, for 2007, as follows:

• For the first quarter of 2007, each non-employee member of the Board received a pro-rated annual retainer of $5,000, followed by a pro-rated annual retainer of $10,000 for the final three quarters of 2007.
   
• Each non-employee member of the Board serving on January 1, 2007 received an option to purchase 10,000 shares of Common Stock of the Company.
   
• An annual retainer of $1,000 per Board Committee for each non-employee member of a Board Committee.
   
• During the first quarter of 2007, each non-employee member of the Board received a pro-rated annual retainer of $1,000 for serving as a non-employee Chair of a Board Committee, followed by a pro-rated annual retainer of $3,000 for the final three quarters of 2007. This is in addition to the standard Board Committee retainer.
   
• No retainers were paid for serving on the Special Litigation Committee.

     The non-employee directors, with the exception of Mr. Donhue who joined the Board in November, also received a discretionary option to purchase 10,000 shares of Common Stock pursuant to the Company’s 1999 Stock Option Plan.

Equity Compensation Plan Information

     The following table gives information about the Company’s Common Stock that may be issued upon the exercise of options, warrants and rights under all of the Company’s existing equity compensation plans as of December 31, 2007 including the 1998 Stock Option Plan, the 1999 Stock Option Plan, the 1999 Non-Qualified Stock Option Plan and the 1999 Employee Stock Purchase Plan, and the option agreements assumed by the Company in connection with the acquisition of PaylinX Corporation (the “PaylinX Acquisition”).

Plan Category	(a) Number of securities to be issued upon exercise of outstanding options, warrants, and rights	(b) Weighted-average exercise price of outstanding options, warrants, and rights	(c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders (1)	6,717,166	$8.74	4,534,849
Equity compensation plans not approved by security holders (2)(3)	1,871,454	$9.67	121,711
Total	8,588,620	$8.95	4,656,560

(1) Represents shares of the Company’s Common Stock issuable pursuant to the Company’s 1998 Stock Option Plan, as amended, the 1999 Stock Option Plan, as amended and the 1999 Employee Stock Purchase Plan.

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The 1998 Stock Option Plan (the “1998 Plan”) was originally adopted by the Board of Directors in March 1998 and was approved by the stockholders in March 1998. The 1998 Plan is administered by the Compensation Committee. Options granted pursuant to the 1998 Plan generally vest as follows: (a) options granted upon hire generally vest at a rate of 25% of the shares underlying the option after one year and the remaining shares vest monthly over the following 36 months, (b) subsequent options, awarded after an employee has been employed by the Company for one year, typically vest monthly over 48 months, or (c) as otherwise determined by the Compensation Committee. Stock options expire ten years after the date of grant. Currently, no options are being granted under the 1998 Plan. As of December 31, 2007, there were options outstanding to purchase 6,590 shares of the Company’s Common Stock under the 1998 Plan at a weighted average exercise price of $0.35038 per share and 338,885 shares were available for future issuance.

The 1999 Stock Option Plan (the “1999 Plan”) was originally adopted by the Board of Directors in January 1999 and was approved by the stockholders in January 1999. Subsequent amendments to the 1999 Plan increasing the number of shares authorized for issuance under the 1999 Plan in April 2000, July 2000, May 2004 and October 2007 were approved by the Board of Directors and the stockholders. The 1999 Plan is administered by the Compensation Committee. Options granted pursuant to the 1999 Plan generally vest as follows: (a) options granted upon hire generally vest at a rate of 25% of the shares underlying the option after one year and the remaining shares vest monthly over the following 36 months, (b) subsequent options, awarded after an employee has been employed by the Company for one year, typically vest monthly over 48 months, or (c) as otherwise determined by the Compensation Committee. Stock options expire no later than ten years after the date of grant, and may expire earlier at the discretion of the Compensation Committee. As of December 31, 2007, there were options outstanding to purchase 6,610,576 shares of the Company’s Common Stock under the 1999 Plan at a weighted average exercise price of $8.75104 per share and 4,056,893 shares were available for future issuance.

The 1999 Employee Stock Purchase Plan (the “1999 ESPP”) was originally adopted by the Board and approved by the stockholders in June 1999. A subsequent amendment to the 1999 ESPP increasing the number of shares authorized for issuance under the 1999 ESPP in May 2004 was approved by the Board of Directors and the stockholders. The purpose of the 1999 ESPP is to provide employees of the Company who participate in the plan with an opportunity to purchase Common Stock of the Company through payroll deductions. The 1999 ESPP, and the right of participants to make purchases thereunder, is intended to qualify under the provisions of Sections 421 and 423 of the Internal Revenue Code of 1986, as amended. The 1999 ESPP is implemented by six-month offer periods with purchase dates within those offer periods every six-months. The Board of Directors may alter the duration of the offering periods without stockholder approval. Until August 1, 2005, the price per share at which shares were sold under the 1999 ESPP was equal to the lower of (i) 85% of the fair market value of the Common Stock on the date of commencement of the six-month offering period, or (ii) 85% of the fair market value of the Common Stock on the date of purchase. On July 19, 2005, the 1999 ESPP was amended to provide that the purchase price for shares of the Company’s Common Stock under the 1999 ESPP shall be 95% of the fair market value of the Company’s Common Stock on the applicable exercise date, effective for offer periods commencing on August 1, 2005. The fair market value of the Common Stock on a given date is determined based upon the last sale price of the Common Stock on the Nasdaq Global Market as of the last market trading day prior to the time of the determination. The purchase price of the shares is accumulated by payroll deductions during the offering period. The deductions may not exceed the lesser of (i) 10% of a participant’s eligible compensation, which is defined in the 1999 ESPP to include the regular straight time gross salary in effect at the beginning of the offering period, exclusive of any payments for overtime, shift premium, bonuses, commissions, incentive compensation, incentive payments, or other compensation, or (ii) $5,000 for each offering period. As of December 31, 2007, there were 139,071 shares available for future issuance under the 1999 ESPP.

29

(2)	Includes outstanding options to purchase 419,550 shares of the Company’s Common Stock issuable pursuant to option plans and agreements assumed pursuant to the PaylinX Acquisition. The option agreements were originally issued by PaylinX Corporation under the PaylinX Corporation 2000 Stock Option Plan (the “PaylinX Plan”), which is described below.
	Pursuant to the PaylinX Acquisition, the Company assumed the option agreements then outstanding under the PaylinX Plan (the “Assumed PaylinX Options”). Other than the Assumed PaylinX Options, no other options may be issued under the PaylinX Plan. The Assumed PaylinX Options are governed by the terms of the PaylinX Plan under which they were originally issued. Options governed by the terms of the PaylinX Plan generally are non-transferable (with the exception of non-qualified stock options, which may be assigned) and expire no later than ten years from date of grant. Options generally are exercisable immediately, upon vesting. Shares of Common Stock issuable and/or exercised under the PaylinX Plan vest based upon years of service, generally four years. The PaylinX Plan was duly approved by the stockholders of PaylinX prior to the PaylinX Acquisition.
(3)	Represents shares of the Company’s Common Stock issuable pursuant to the Company’s 1999 Non- Qualified Stock Option Plan (the “1999 Non-Qualified Plan).
	The Board of Directors adopted the 1999 Non-Qualified Plan in October 1999. The 1999 Non- Qualified Plan is administered by the Compensation Committee. Pursuant to the 1999 Non-Qualified Plan, the Compensation Committee may grant non-qualified stock options, at its discretion, to employees, independent contractors and consultants of the Company or any parent or subsidiary corporation of the Company. Only non-qualified-stock options may be issued under the 1999 Non- Qualified Plan. Stock options may not be granted to officers and directors of the Company from the 1999 Non-Qualified Plan. Stock options issued under the 1999 Non-Qualified Plan have an exercise price of no less than 85% of the fair market value of the Common Stock on the date of grant of the option. Options are generally non-transferable. The term of all options granted under the Plan shall not exceed ten years from the date of grant As of December 31, 2007, there were options outstanding to purchase 1,451,904 shares of the Company’s Common Stock under the 1999 Non-Qualified Plan at a weighted average exercise price of $10.70844 per share and 121,711 shares were available for future issuance.

CERTAIN RELATED PARTY TRANSACTIONS

Review, approval or ratification of transactions with related persons

     The Audit Committee of the Company is responsible for reviewing and approving or disapproving any transaction or arrangement that may present a material conflict of interest between a member of management or the Board and the Company as set forth in the Company’s Audit Committee charter.

Indemnification

     The Company has entered into indemnification agreements with its directors and certain of its executive officers. The indemnification agreements provide, among other things, that the Company will indemnify its directors and executive officers, under the circumstances and to the extent provided therein, for expenses, damages, judgments, fines and settlements each may be required to pay in actions or proceedings which either of them may be made a party by reason of their positions as a director, executive officer or other agent of the Company, and otherwise to the fullest extent permitted under Delaware law and the Company’s bylaws.

     Notwithstanding anything to the contrary set forth in any of the Company’s previous filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate future filings, including this Proxy Statement, in whole or in part, the Compensation Committee Report and Report of the Audit Committee shall not be deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any such filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended .

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AUDIT COMMITTEE REPORT

     In accordance with its written charter adopted by the Board of Directors of the Company (the “Board”), the Audit Committee of the Board (the “Committee”) assists the Board in fulfilling its responsibility for oversight of the quality and integrity of the accounting, auditing and financial reporting practices of the Company. Since the effective date of the Sarbanes-Oxley Act of 2002 (the “New Law”), the Committee has become responsible for the appointment, compensation and oversight of the work of the Company’s independent auditors.

     During the fiscal year 2007, the Committee met eight times and discussed the interim financial information contained in each quarterly earnings announcement with the Chief Executive Officer, Chief Financial Officer and independent auditors prior to public release.

     In discharging its oversight responsibility as to the audit process, the Committee obtained from the independent auditors a formal written statement relating to relationships between the auditors and the Company that might bear on the auditors’ independence, consistent with the Independence Standards Board Standard No. 1, “Independence Discussions with Audit Committees,” discussed with the auditors any relationships that may impact their independence and satisfied itself as to the auditors’ independence. The Committee also discussed with management and the independent auditors the quality and adequacy of the Company’s internal controls. The Committee reviewed with the independent auditors their audit plans, audit scope and identification of audit risks.

     The Committee discussed with the independent auditors their judgment as to the quality and acceptability of the Company’s accounting principles and such other matters as are required to be discussed under generally accepted auditing standards pursuant to the Statement on Auditing Standards No. 61, as amended, “Communication with Audit Committees” and, with and without management present, discussed and reviewed the results of the independent auditors’ examination of the financial statements.

     The Committee reviewed the audited financial statements of the Company as of and for the fiscal year ended December 31, 2007, with management and the independent auditors. Discussion topics included the quality and acceptability of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the financial statements. Management has the responsibility for the preparation of the Company’s financial statements and the independent auditors have the responsibility for the examination of those statements.

     Based on the above-mentioned review and discussions with management and the independent auditors, the Committee recommended to the Board that the Company’s audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007, for filing with the Securities and Exchange Commission. The Committee also recommended the reappointment of the independent auditors and the Board concurred in such recommendation.

     Each of the members of the Audit Committee is independent as defined under the listing standards of the FINRA for Nasdaq listed issuers.
 

AUDIT COMMITTEE OF

THE BOARD OF DIRECTORS

John J. McDonnell, Jr.

Steven P. Novak

Kenneth R. Thornton

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth the beneficial ownership of Common Stock as of March 20, 2008 as to (a) each director and nominee, (b) each named executive officer, (c) all directors and officers as a group, and (d) for each person known by the Company, as of December 31, 2007, to beneficially own more than 5% of the outstanding shares of its Common Stock.

     Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of Common Stock subject to options held by that person that are currently exercisable or exercisable within 60 days of March 20, 2008 are considered outstanding. Percentage of beneficial ownership is based upon 68,965,613 shares of Common Stock outstanding as of March 20, 2008. To the Company’s knowledge, except as set forth in the footnotes to this table and subject to applicable community property laws, each person named in the table has sole voting and investment power with respect to the shares set forth opposite the person’s name. Except as otherwise indicated, the address of each of the persons in this table is as follows: c/o CyberSource Corporation, 1295 Charleston Road, Mountain View, California 94043.

Name and Address of Beneficial Owner	Amount of Common Stock			Percent of Class
FMR LLC (1)		5,615,367	(1)	8%
82 Devonshire Street
Boston, MA 02109
William S. McKiernan (2)		3,713,793	(2)	5%
John J. McDonnell, Jr. (3)		617,691	(3)	*
Robert J. Ford (4)		353,695	(4)	*
Steven D. Pellizzer (5)		243,520	(5)	*
Richard Scudellari (6)		178,500	(6)	*
Kenneth R. Thornton (7)		169,000	(7)	*
Michael A. Walsh (8)		271,953	(8)	*
Steven P. Novak (9)		70,600	(9)	*
Scott R. Cruickshank (10)		100,000	(10)	*
Robert Donahue (11)		52,416	(11)	*
All current executive officers and directors as a group		5,771,168	(12)	8%
(10 persons)(12)

*	Less than 1% of the outstanding Common Stock.
(1)	Based solely on information reported on Schedule 13G/A filed with the Securities and Exchange Commission on February 14, 2008. Includes 5,030,929 shares of Common Stock held by Fidelity Management & Research Company.
(2)	Includes (a) 22,100 shares of Common Stock held by members of Mr. McKiernan’s immediate family and (b) options to purchase 533,123 shares of Common Stock exercisable within 60 days of March 20, 2008. Mr. McKiernan disclaims beneficial ownership of the shares held by his immediate family.
(3)	Includes (a) options to purchase 470,000 shares of Common Stock exercisable within 60 days of March 20, 2008 and (b) 45,341 shares held by Mr. McDonnell’s spouse. Mr. McDonnell disclaims beneficial ownership of the shares held by his spouse.
(4)	Includes options to purchase 346,695 shares of Common Stock exercisable within 60 days of March 20, 2008.

32

(5)	Includes options to purchase 235,020 shares of Common Stock exercisable within 60 days of March 20, 2008.
(6)	Includes options to purchase 163,000 shares of Common Stock exercisable within 60 days of March 20, 2008.
(7)	Includes options to purchase 169,000 shares of Common Stock exercisable within 60 days of March 20, 2008.
(8)	Includes options to purchase 271,860 shares of Common Stock exercisable within 60 days of March 20, 2008.
(9)	Includes (a) 1,600 shares of Common Stock held by members of Mr. Novak’s immediate family and (b) options to purchase 69,000 shares of Common Stock exercisable within 60 days of March 20, 2008. Mr. Novak disclaims beneficial ownership of the shares held by his immediate family.
(10)	Includes options to purchase 100,000 shares of Common Stock exercisable within 60 days of March 20, 2008.
(11)	Includes options to purchase 35,000 shares of Common Stock exercisable within 60 days of March 20, 2008.
(12)	Includes (a) 69,041 shares of Common Stock held indirectly, see footnotes 2, 3 and 9 and (b) options to purchase 2,357,698 shares of Common Stock exercisable within 60 days of March 20, 2008.

33

OTHER MATTERS

     Section 16(a) Beneficial Ownership Reporting Compliance. Section 16(a) of the Act requires the Company’s directors, executive officers and persons who own more than 10% of the Company’s Common Stock (collectively, “Reporting Persons”) to file reports of ownership and changes in ownership of the Company’s Common Stock with the Securities and Exchange Commission and the Nasdaq Stock Market. Reporting Persons are required by Securities and Exchange Commission regulations to furnish the Company with copies of all Section 16(a) reports they file.

     Based solely on its review of the copies of such reports received or written representations from certain Reporting Persons, and certain other communications with such Reporting Persons, that no other reports were required, the Company believes that, with the exception of Robert Donahue inadvertently failing to include the beneficial ownership of certain shares of common stock on his originally filed Form 3 upon joining the Company’s Board of Directors (which has been addressed through the filing of an amendment to his Form 3), all Reporting Persons complied with all applicable filing requirements during fiscal 2007.

     Other Matters. The Company knows of no other matters to be submitted to the meeting. If any other matters properly come before the meeting, it is the intention of the persons named in the enclosed form of proxy to vote the shares they represent as the Board of Directors may recommend.

FORM 10-K ANNUAL REPORT

     UPON WRITTEN REQUEST TO THE CORPORATE SECRETARY, CYBERSOURCE CORPORATION, 1295 CHARLESTON ROAD, MOUNTAIN VIEW, CALIFORNIA 94043 THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON SOLICITED A COPY OF THE ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007, INCLUDING FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES FILED THEREWITH.

By Order of the Board of Directors,

Richard Scudellari

Secretary

Dated: April 10, 2008

34

CYBERSOURCE CORPORATION
1295 CHARLESTON ROAD
MOUNTAIN VIEW, CA 94043

VOTE BY INTERNET - www.proxyvote.com

Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.

ELECTRONIC DELIVERY OF FUTURE STOCKHOLDER COMMUNICATIONS

If you would like to reduce the costs incurred by CyberSource Corporation in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access stockholder communications electronically in future years.

VOTE BY PHONE - 1-800-690-6903

Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.

VOTE BY MAIL

Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to CyberSource Corporation, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

 

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:	CYBRS1	KEEP THIS PORTION FOR YOUR RECORDS
		DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

CYBERSOURCE CORPORATION
	THE DIRECTORS RECOMMEND A VOTE "FOR" ITEMS 1 AND 2.
	Vote On Directors
	1.	To elect six directors of the company to serve until the 2009 Annual Meeting of Stockholders.
		Nominees:
		01)	Robert Donahue	04)	Steven P. Novak
		02)	John J. McDonnell, Jr.	05)	Richard Scudellari
		03)	William S. McKiernan	06)	Kenneth R. Thornton

For All	Withhold All	For All Except	To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.
o	o	o

Vote On Proposal		For	Against	Abstain
2.	To ratify the appointment of Ernst & Young LLP as the independent auditors for the company for the year ending December 31, 2008.	o	o	o
3.	To transact such other business as may properly come before the Annual Meeting and any adjournment or postponement thereafter.
The shares represented by this proxy when properly executed will be voted in the manner directed herein by the undersigned Stockholder(s). If no direction is made, this proxy will be voted FOR items 1 and 2. If any other matters properly come before the meeting, or if cumulative voting is required, the person named in this proxy will vote in their discretion.

	Yes	No
Please indicate if you plan to attend this meeting.	o	o

Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date

CYBERSOURCE CORPORATION

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

ANNUAL MEETING OF STOCKHOLDERS
May 14, 2008

The undersigned hereby appoints William S. McKiernan and Richard Scudellari, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of CyberSource Corporation that the stockholder is entitled to vote at the Annual Meeting of Stockholders to be held at 10:00 a.m. Pacific Time, on May 14, 2008, at the company's headquarters located at 1295 Charleston Rd., Mountain View, California 94043, and any adjournment or postponement thereof.

     THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE STOCKHOLDER. IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES LISTED ON THE REVERSE SIDE FOR THE BOARD OF DIRECTORS AND FOR THE PROPOSAL.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING
THE ENCLOSED REPLY ENVELOPE

CONTINUED AND TO BE SIGNED ON REVERSE SIDE