Kalkhoven signed a consultancy contract with JDSU when he retired, which compensated him $400,000 pro rata per month plus health benefits. He also signed a routine non-compete clause. He was still subject to the company trading windows, but denied that he received inside or adverse information about JDSU after he retired. He thought JDSU 'had stellar promise', but exercised $158 million in JDSU stock options between 31 July and 31 August 2000, another $198 million in September the same year, $105 million in the October and eight million in November. Just prior to the JDSU teleconference on 25 January 2001, Kalkhoven sold an additional $55 million. The figure of $558,500 million was mentioned in court as the total stock sales. The net proceeds of the stock sales were invested in and allocated to KPLJ or diverted for philanthropic work.
Kalkhoven said his financial advisors had been telling him for some time to divest in order not to keep all of his eggs in one JDSU basket. He says he chose to sell about 50 per cent of his stock as it 'sounded like a good number', albeit less than his advisors had wanted him to sell. He kept more than three million shares.
Kalkhoven held up during the lengthy session, not losing his composure and patiently and politely answering some questions more than once. At one point, he got up and drew a diagram to the jury to describe a modulator and explain why several 2.5 gig modulators could work as well as a ten gig modulator, using terms that even a layman could understand. After his testimony, he was excused and he left the courtroom.
The final witness of the day, JDSU employee Charles Neagoy, will complete his testimony on Friday, but there could be two other witnesses before each side rests. Judge Claudia Wilkins met with key attorneys from both sides after court had closed to go over jury instructions, and is looking forward to giving details to the nine jurors on Friday afternoon.
