Exhibit 10.8
optionsXpress, Inc.
00 Xxxxx XxXxxxx
Xxxxxxx, Xxxxxxxx 00000
January 15, 2004
Summit Ventures VI-A, L.P.
Summit Ventures VI-B, L.P.
000 Xxxxxxxx Xxxxxx - 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Re: MANAGEMENT RIGHTS
Ladies and Gentlemen:
This letter will confirm our agreement that effective upon your purchase
of shares of Series A Convertible Preferred Stock, par value $.0001 per share
(the "PREFERRED STOCK") of optionsXpress, Inc., a Delaware corporation (the
"COMPANY"), you will be entitled to the following contractual management rights,
in addition to rights to certain non-public financial information, inspection
rights and other rights that you may be entitled to pursuant to that certain
Stock Purchase and Recapitalization Agreement, dated as of the date hereof, and
the other agreements referenced therein that have been entered into on the date
hereof:
(1) You shall be permitted to consult with and offer advice to
management of the Company on significant business issues, including management's
proposed annual operating plans, and management will make itself available to
meet with you at the Company's facilities at mutually agreeable times for such
consultation and advice and to review progress in achieving said plans.
(2) You may examine the books and records of the Company and inspect
its facilities and may request information at reasonable times and intervals
concerning the general status of the Company's financial condition and
operations, provided that access to highly confidential proprietary information
and facilities need not be provided hereunder.
(3) If and for so long as you do not have a representative on the
Company's Board of Directors, the Company shall invite you to send your
representative to attend in a nonvoting observer capacity all meetings of its
Board of Directors and, in this respect, shall give your representative copies
of all notices, minutes, consents, and other material that it provides to its
Directors; PROVIDED, HOWEVER, that the Company reserves the right to exclude
your representative from access to any material or meeting or portion thereof if
the Company believes upon advice of counsel that such exclusion is reasonably
necessary to preserve the attorney-client privilege, to protect highly
confidential proprietary information or for other similar reasons.
January 15, 2004
Page 2
The rights described herein shall terminate and be of no further force or effect
upon the earliest to occur of (a) the closing of an initial public offering of
shares of the Company's capital stock pursuant to a registration statement filed
by the Company under the Securities Act of 1933 which has become effective
thereunder (other than a registration statement relating solely to employee
benefit plans or a transaction covered by Rule 145), (b) such time as the
Company becomes required to file reports with the Securities and Exchange
Commission under Sections 12(g) or 15(d) of the Securities Exchange Act of 1934,
(c) such time as you hold, in aggregate, less than 10% of the Preferred Stock
(or common stock issued upon a conversion thereof) purchased by you on the date
hereof, or (d) the date of the closing of a sale, lease, or other disposition of
all or substantially all of the Company's assets or the Company's merger into or
consolidation with any other corporation or other entity, or any other corporate
reorganization, in which the holders of the Company's outstanding voting stock
immediately prior to such transaction own, immediately after such transaction,
securities representing less than fifty percent (50%) of the voting power of the
corporation or other entity surviving such transaction, provided that this
provision shall not apply to a merger effected exclusively for the purpose of
changing the domicile of the Company.
Very truly yours,
OPTIONSXPRESS, INC.
By: /s/ XXXXX XXXX
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Title: President
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