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option, petitioner paid an exercise price of $9,467.75 to
purchase (at $2.906 per share) 3,258 shares of CTI common stock
with a total fair market value of $75,553.02. Upon exercise of
that option, she also paid $18,801.26 to CTI so CTI could
withhold and pay Federal income, Social Security, and Medicare
taxes associated with the exercise. As to another option,
petitioner paid an exercise price of $95,094.10 to purchase (at
$2.969 per share) 32,029 shares of CTI common stock with a total
fair market value of $742,752.51. Upon exercise of that option,
she also paid $184,258.82 to CTI so CTI could withhold and pay
Federal income, Social Security, and Medicare taxes associated
with the exercise. As to another option, petitioner paid an
exercise price of $107,205 to purchase (at $3.063 per share)
35,000 shares of CTI common stock with a total fair market value
of $811,650. Upon exercise of that option, she also paid
$200,414.60 to CTI so CTI could withhold and pay Federal income,
Social Security, and Medicare taxes associated with the
exercise.3
After exercising her options, petitioner had legal title to,
was the beneficial owner of, had the right to receive dividends
on, and had the right to vote her purchased stock. At no time
3 In full, petitioner paid $316,382.85 to purchase 106,287
shares with a total fair market value of $2,464,795.53.
Petitioner also paid CTI $616,487.21 with respect to the
withholding taxes.
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Last modified: November 10, 2007