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2000 ANNUAL INCENTIVE COMPENSATION PROGRAM
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COMPENSATION PHILOSOPHY
CDI Incentive Compensation Plans are designed to align the interests of
employees with those of Cal Dive shareholders to the maximum extent
possible. Employees will share in the superior performance of the company
recognizing that the shareholders are entitled to a threshold level of
performance in exchange for base salaries. The threshold level is based on
the Annual Budget established by management and approved by the Board of
Directors. Incentives based upon performance above that threshold level can
result in total cash compensation to CDI employees well above competitive
levels for the industry.
The 2000 Incentive Compensation Program is a direct continuation of the program
established in 1993. It is designed to reward key team members for the
contribution made towards achieving the company's growth and profitability
targets. Potential bonuses under this program are limited only by the success
and cost effectiveness of our combined effort.
o THRESHOLD PERFORMANCE: Incentive compensation is earned when
financial performance exceeds 90% of the 2000 Business Plan
(versus 100% for 1999 and 80% for 1998).
o PARTICIPATION: Significantly expanded participation in the
Operations pool.
o BONUS POOL: The bonus pool of the Operations pool is 25% in
addition to a bonus pool for the Administrative Group.
o SG&A: Operations pool is increased or decreased by variances to
budgeted SG&A expenses (as defined); i.e., Sales Department and
administrative costs related to personnel in the Operations pool.
o DISCRETIONARY COMPONENT: 30% of the allocated incentive award is
based upon discretion of Senior management and achievement of
individual goals.
o SUPPORT STAFF: Each Group may use a portion of their bonus pool
or incentives not awarded in the discretionary component to make
bonus payments to support staff.
o STOCK OPTIONS: New for 2000 will be the use of stock options plus
cash in payment of potential bonuses earned. The proposed plan is
in keeping with the authorized 10% level allocated for employee
stock options.
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GENERAL CONDITIONS TO ALL PLANS
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ELIGIBILITY FOR PARTICIPATION
Participants must be on the payroll no later than June 30, 2000.
Participants who are not on the payroll as of January 1, 2000, will
have their OPPORTUNITY prorated by their months of service.
Incentive compensation awards will be granted to those participants who
have met the performance criteria set forth in this policy and who are
on the payroll December 31, 2000, for incentive compensation under this
plan. This plan is not to be construed in any way as a guarantee of
employment or an employment contract.
METHOD OF PAYMENT
Earned incentive compensation will be paid in cash by March 15.
CLARIFICATION/INTERPRETATION/MODIFICATION OF THE PLAN
The Compensation Committee of the Cal Dive Board of Directors shall
have the right and the sole authority at any time and without
restriction to clarify, interpret and/or modify this plan.
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LIFE OF FIELD SERVICES GROUP
AQUATICA MANAGEMENT & OPERATIONS GROUP
MAJOR PROJECTS GROUP
SHALLOW WATER SERVICES GROUP
MARINE MANAGEMENT GROUP
BUSINESS DEVELOPMENT GROUP
SUPPLY CHAIN GROUP
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This program is for the benefit of certain personnel in the Groups listed above,
the Vice Presidents of these Groups and such other participants as determined by
the Group Vice Presidents and Executive Management.
Each eligible participant's incentive compensation OPPORTUNITY will be based on
the following:
1. Attaining 2000 "Subsea Division" (exclusive of ERT) gross profit
of $32,080,100 (90% of budgeted plan) will result in an
OPPORTUNITY equal to 10% of the eligible participants base
salary.
2. Attaining 2000 "Subsea Division" (exclusive of ERT) gross profit
of $35,644,600 will result in an additional OPPORTUNITY equal to
10% of the eligible participants base salary.
3. Variances to budgeted Subsea SG&A (as defined) will be added to
(or deducted from) gross profit in determining 1 above.
4. A bonus pool will be established equal to 25% of all dollars of
gross profit (as adjusted) in excess of $35,644,600.
The bonus pool will be divided into three tiers and will be available as an
incentive compensation OPPORTUNITY for each eligible participant in direct
proportion to the ratio of the eligible participant base salaries.
TIER GROUP DESIGNATIONS:
Group 1 - Select Division Heads or Vice Presidents
Group 2 - Personnel in direct control of:
o Significant direct authorization control responsibility
of costs, or
o Significant direct negotiation or contracting
responsibility of costs or receivables.
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Group 3 - Personnel in key roles of execution, operations with impact
to the bottom line.
Group 4 - Personnel in supporting roles with impact on cost control.
Each participant's OPPORTUNITY will be awarded based as follows:
1. 70% of the total opportunity will be awarded based on achieving
the financial goals.
2. From 0 to 30% of the total opportunity will be awarded based on a
subjective evaluation by Executive Management regarding the
individual's efforts, contribution and success in achieving
specific goals established by the Group Vice President and Martin
Ferron. Any portion of the opportunity that is not awarded may be
reallocated to other plan participants.
3. Discretionary bonuses may be paid to support staff from the bonus
pool or incentives not awarded in the discretionary component.
Stock options will also be used to incentivise those personnel in Groups 1 to 3.
OPTION POOL:
o 150,000 options per year shall be set aside for use in the
incentive compensation plan and shall be granted on March 1,
2000.
o The options will be issued in lieu of a cash bonus for achieving
80% of budgeted gross profit, as in previous plans.
o Distribution of options: 6,000 , 3,000 and 1,000 options will be
distributed to each person in Groups 1, 2 and 3 respectively.
o All options awarded to vest over three (3) years.
o Exercise price to be the market price on March 1, 2000.
The gross profit goal reflects management's assessment of revenue producing
assets on hand or expected to be acquired at the time the Business Plan is
prepared. The goal shall NOT be adjusted should any of these assets be sold or
not acquired subsequent to the Business Plan being approved by the board of
Directors. However, if the company subsequently purchases or otherwise acquires
new assets with the expectation of increasing the gross profit of the Subsea
Division, the gross profit levels will be adjusted to allow for a reasonable
return to the company. This adjustment will be based on the economics presented
to the Board of Directors as justification for the new equipment or service (the
approved AFE) and will be prorated for months in service. In addition, the
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gross profit goal established in the approved Budget is NOT to be adjusted for
changes in accounting policy made during a fiscal year.
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EXECUTIVE MANAGEMENT
ACCOUNTING, ADMINISTRATIVE & SAFETY PERSONNEL
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This program is for the benefit of certain members of executive management and
corporate accounting and administrative personnel.
Each eligible participant's incentive compensation opportunity will be based
upon the following:
1. Attaining the consolidated net income of $20,162,000 as budgeted
in the 2000 Business Plan before consideration of bonuses paid
under the Operations Group Plan.
2. Attaining consolidated net income above a "threshold" level (80%
of Budget) and up to targeted net income (110% of Budget) will
result in an opportunity equal to a specified percentage of base
salary.
3. A bonus pool will be established based upon (a) 4% of the first
$2 million of net income in excess of targeted net income, plus
(b) 6% of any consolidated net income in excess of targeted net
income plus $2 million.
The bonus pool will be available for each eligible participant in direct
proportion to the ratio of eligible participant base salaries. Each
participant's opportunity will be awarded based as follows:
1. 70% of the total opportunity will be awarded based upon achieving
financial goals.
2. From 0 to 30% of the total opportunity will be awarded based upon
a subjective evaluation by the Compensation Committee and
Executive management regarding the individual's efforts,
contribution and success in achieving specific goals established
by the Group Vice President and Board of Directors. Any portion
of the opportunity that is not awarded may be reallocated to
other participants.
3. Discretionary bonuses may be paid to support staff from the bonus
pool or incentives not awarded in the discretionary component.
If the company purchases or otherwise acquires new assets with the expectation
of increasing the net income of the Subsea Division, consolidated net income
will be adjusted to allow for a reasonable return to the company. This
adjustment will be based on the economics presented to the Board of Directors
for justification for the new equipment or service (the approved AFE) and will
be prorated for months in service.
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OPERATIONS BONUS POOL
PARTICIPANTS: 2000 INCENTIVE COMPENSATION PROGRAM
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GROUP PARTICIPANTS
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VICE PRESIDENT GROUP Mike Ambrose
(Group 1) Mark Bridger
Jon Buck
Steve Brazda
Wayne Bywater
Ken Duell
Sonny Freeman
TBD
Mark McWatters
Scott Naughton
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PROJECT MANAGER GROUP Sharon Adams Chris Landry
(Group 2) John Bolin Jack Lounsbury
Everett Burton Jim Macklin
Rick Bucher John Mooney
Paul Byington Joe Musacchia
Joe Campbell Jimmy Nichols
Ian Collie Robert Newkirk
Shane Diffley John Odusch
Dick Elliott Scott Robinson
Mike Ferguson John Sokol
Chris Hale Skipper Strong
Stan Kellogg James Wagner
Jim Kiesler Paul Warriner
TBD *3 Ernie Weber
Aquatica *2 Jeremy Woulds
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OPERATIONS BONUS POOL
PARTICIPANTS: 2000 INCENTIVE COMPENSATION PROGRAM
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GROUP PARTICIPANTS
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SUPPORT GROUP I Aquatica *1
(Group 3) Cleve Ammons
Mike Ehlers
Keith Freeman
C. J. Kirwer
Dennis Katzillierakis
James Nelson
Brad Partain
John Stanfa
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SUPPORT GROUP II Aquatica *4
(Group 4) William Bratkowski
Chris Charpentier
Scott Coker
Scott Croft
Ed Klein
Pat Laughlin
Jerry Lowrimore
Patrice McIntosh
Lynn Mondo
Pete Orlando
Chris Stevens
Carol Sturdevant
Carl Thornton
Beverly Verret
J. D. Wilson
Charlie Youngblood
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EXECUTIVE MANAGEMENT & ACCOUNTING PERSONNEL
PARTICIPANTS: 2000 INCENTIVE COMPENSATION PROGRAM
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PARTICIPANTS BASE SALARY TARGET
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Owen Kratz 100%
Martin Ferron 100%
Jim Nelson 100%
Lou Tapscott 50%
Andy Becher 50%
Wade Pursell 32%
Sherry Daniel 20%
Gena Quintanilla 10%
Lynn Smith 8%
Anna Foreman 8%
Jody Polito 10%
Irea Sosa 6%
Trennice jackson 20%
Katia Arroyo 10%
Cameron Sanders 15%
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MERIT BONUSES FOR 1999
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PARTICIPANTS OPTIONS "THANK YOU" CASH
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Sharon Adams 8,440 / Total 15,000 5,000
John Sokol 5,470 / Total 15,000 10,000
Wayne Bywater 11,340 / Total 20,000 10,000
Mark Bridger Total 15,000 20,000
Mark McWatters 20,000
Paul Byington 3,460 / Total 15,000
Wade Pursell 6,000
TOTALS 34,710 $65,000
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