-15-
to, the performance of the Account and that CIBC WM shall not be
liable for any losses in the Account”.
E. Payment of the Exercise Price and Withholding Taxes
CTI received payment in full for the exercise price and
withholding taxes due upon petitioner’s exercise of her options.
Petitioner borrowed $932,870.06 from CIBC Oppenheimer to pay the
total of the options’ exercise price ($316,382.85) and CTI’s
withholding obligation ($616,487.21). CIBC Oppenheimer wired the
$932,870.06 ($316,382.85 + $616,487.21) to CTI, and CIBC
Oppenheimer treated the wired funds as a borrowing that
petitioner had made on her margin account at CIBC Oppenheimer.
Petitioners were personally liable for the repayment of that
borrowing and any interest that accrued with respect thereto.
On July 29, 2002, petitioner repaid the principal of the
borrowing after she received margin calls from CIBC Oppenheimer.
She obtained the funds for repayment by selling stocks and bonds,
using available cash, borrowing money, and selling her house. On
July 29, 2002, the fair market value of petitioner’s CTI stock
(106,287 shares) was $3.175 per share or $337,461.23 in total.
F. CTI’s Insider Trading Policy and Trading Windows
According to CTI’s Insider Trading Policy Statement:
An Insider or Temporary Insider is permitted to
trade CTI stock only during certain specified periods
(the “Trading Window”) and only if the Insider or
Temporary Insider is not at the time in possession of
material, non-public information. CTI’s Trading Window
will be opened only upon written notification from
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Last modified: November 10, 2007