THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

optionsXpress Holdings, Inc. (OXPS)

4/27/2006 Proxy Information

James A. Gray has served as President of G-Bar Limited Partnership, an independent proprietary trading firm, since 1996. G-Bar Limited Partnership controls 22% of the company stick.

Stock Purchase and Recapitalization Agreement

On December 17, 2003, we entered into a stock purchase and recapitalization agreement with investment funds affiliated with Summit Partners, G-Bar Limited Partnership, JG 2002 Delta Trust, David S. Kalt, Ned W. Bennett, Delaware Charter Guarantee & Trust Company F/ B/ O Ned Bennett IRA and certain other stockholders pursuant to which, on January 15, 2004, we issued approximately 18.2 million shares of Series A preferred stock in exchange for approximately $88.4 million. In conjunction with this recapitalization, our former preferred stockholders converted their preferred stock into shares of common stock. Furthermore, we then redeemed approximately 18.2 million shares of common stock (including a portion of the shares of preferred stock converted into common stock by our former preferred stockholders) for an aggregate amount of approximately $88.4 million. In addition to the stock redemption amount, we paid dividends totaling approximately $7.0 million to our common stockholders in connection with the transactions contemplated by the stock purchase and recapitalization agreement.

Registration Agreement

On January 15, 2004, we entered into a registration agreement with Summit Partners and certain other stockholders, including G-Bar Limited Partnership, JG 2002 Delta Trust, David S. Kalt and Ned W. Bennett. Upon consummation of our initial public offering, the agreement entitled both the holders of a majority of Summit PartnersÕ and holders of a majority of the other stockholdersÕ securities to two registrations on Form S-1 or any similar long-form registration statement and an unlimited number of registrations on Form S-2 or S-3 or any similar short-form registration statement, so long as the aggregate value of the securities to be registered on any short-form is at least $5 million. The agreement prohibits us from granting other registration rights with respect to our equity securities without the prior written consent of the holders of a majority of Summit PartnersÕ securities, except that we may grant registration rights if they are subordinate to those of Summit Partners. The registration agreement grants piggyback registration rights with respect to all other registrations proposed by us (except for demand registrations or registrations on a Form S-4, S-8 or successor forms). We will pay all expenses related to demand and piggyback registrations. We have also agreed to indemnify the parties to the agreement in connection with all registrations pursuant to this agreement against liabilities under the Securities Act.

Dividends

We declared and paid dividends totaling approximately $40.9 million to our common stockholders during the year ended December 31, 2005. We have paid a quarterly dividend in each quarter since our initial public offering in 2005. We recently declared a dividend of $0.05 per share for the first quarter of 2006, a 25% increase over the $0.04 per share dividend we paid in the fourth quarter of 2005. The declaration of any other dividends and, if declared, the amount of any such dividend, will be subject to our actual future earnings, capital requirements, regulatory restrictions and to the discretion of our board of directors. Our board of directors may take into account such matters as general business conditions, our financial results, capital requirements, contractual, legal and regulatory restrictions on the payment of dividends by us to our stockholders or by our subsidiaries to us, and such other factors as our board of directors may deem relevant.