CAL DIVE INTERNATIONAL INC, DEF 14A, 1998-04-10

CAL DIVE INTERNATIONAL INC
DEF 14A, 1998-04-10
OIL & GAS FIELD SERVICES, NEC

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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12

CAL DIVE INTERNATIONAL, INC.
(Name of Registrant as Specified in its Charter)

_____________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1. Title of each class of securities to which transaction applies:

2. Aggregate number of securities to which transaction applies:

3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:

4. Proposed maximum aggregate value of transaction:

5. Total fee paid:

[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

1. Amount Previously Paid:
2. Form, Schedule or Registration Statement No.:
3. Filing Party:
4. Date Filed:
<PAGE>
CAL DIVE INTERNATIONAL, INC.
400 N. SAM HOUSTON PARKWAY E., SUITE 400
HOUSTON, TEXAS 77060

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 12, 1998

TO THE STOCKHOLDERS OF CAL DIVE INTERNATIONAL, INC.:

NOTICE IS HEREBY GIVEN that the 1998 annual meeting of stockholders of Cal
Dive International, Inc. will be held Tuesday, May 12, 1998 at 10:00 a.m. local
time in the Toulouse Room at the Hotel Sofitel, 425 N. Sam Houston Parkway E.,
Houston, Texas 77060, for the following purposes, more fully described in the
accompanying proxy statement:

1. To elect two "Class I" Directors.

2. To approve the 1998 Employee Stock Purchase Plan.

3. To transact such other business as may properly come before the
meeting or any adjournment thereof.

Only common stockholders of record at the close of business on March 25,
1998 are entitled to notice of and to vote at the annual meeting and all
adjournments thereof.

YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. Whether
or not you plan to attend the annual meeting, please mark, date and sign the
enclosed proxy card and return it promptly in the enclosed stamped envelope.
Furnishing the enclosed proxy will not prevent you from voting in person at the
meeting should you wish to do so.

BY ORDER OF THE BOARD OF DIRECTORS

S. James Nelson, Jr.
SECRETARY

Houston, Texas
April 8, 1998
<PAGE>
CAL DIVE INTERNATIONAL, INC.
400 N. SAM HOUSTON PARKWAY E., SUITE 400
HOUSTON, TEXAS 77060
------------------------

PROXY STATEMENT

------------------------

ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 12, 1998

GENERAL

This Proxy Statement is being furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of Cal Dive International, Inc.
(the "Company" or "CDI") for use at its annual meeting of stockholders to be
held May 12, 1998 at the time and place and for the purposes set forth in the
accompanying Notice of Meeting, and at any adjournment thereof (the
"Meeting"). The date of this Proxy Statement is April 8, 1998.

The costs of soliciting proxies in the enclosed form will be borne by CDI.
In addition to soliciting proxies by mail, directors, officers, and employees of
CDI and its subsidiaries, without receiving additional compensation therefor,
may solicit proxies by telephone and in person. Arrangements will also be made
with banks, brokerage firms and other custodians, nominees and fiduciaries to
forward solicitation materials to the beneficial owners of shares of the common
stock of CDI ("Common Stock") and the Company will reimburse such persons for
reasonable out-of-pocket expenses incurred in connection therewith.

The proxies that accompany this Proxy Statement permit each holder of
record of Common Stock on March 25, 1998 to vote on all matters to come before
the Meeting. On that date CDI had outstanding 14,534,831 shares of Common Stock,
each of which is entitled to one vote. Where a stockholder specifies his choice
on the proxy with respect to a matter being voted upon, the shares represented
by the proxy will be voted in accordance with such specification. IF NO
SPECIFICATION IS MADE, THE SHARES WILL BE VOTED IN FAVOR OF THE TWO (2) PROPOSED
CLASS I NOMINEES TO THE BOARD OF DIRECTORS AND IN FAVOR OF THE 1998 PLAN AS
HEREIN DESCRIBED.

The Board of Directors of CDI is not aware of any business to be acted upon
at the Meeting other than those matters set forth in the accompanying Notice of
Meeting. If, however, other proper matters are brought before the Meeting, or
any adjournment thereof, the persons appointed as proxies will have discretion
to vote or abstain from voting thereon according to their best judgment.

A proxy may be revoked by (i) giving written notice of revocation at any
time before its exercise to Andrew C. Becher, Senior Vice President and General
Counsel, Cal Dive International, Inc., 400 N. Sam Houston Parkway, Suite 400,
Houston, Texas 77060, (ii) executing and delivering to Mr. Becher at any time
before its exercise a later dated proxy or (iii) attending the Meeting and
voting in person.

1
<PAGE>
PROPOSAL NO. 1: ELECTION OF DIRECTORS

The Company's 1997 Amended and Restated By-Laws provide for a Board of
Directors consisting of three classes, with the number of directors set at
eleven by the Company's 1997 Amended and Restated Shareholders Agreement (the
"1997 Shareholders Agreement")(with one vacancy as described in the next
paragraph). The term of office of the Class I directors will expire at the
Meeting, and the persons listed as the Class I nominees in the table below will
be nominated for the election to the Board of Directors for a term expiring in
2001. The term of office of the Class II directors will expire at the 1999
annual meeting. The term of office of the Class III directors will expire at the
2000 meeting. Proxies cannot be voted for more than two nominees and not more
than two (2) directors can be elected.

In the absence of contrary instructions, it is the intention of the persons
named in the accompanying proxy to vote the shares represented thereby for the
election of the two (2) Class I nominees listed below. Mr. Gerald Hage, a Class
I director nominee of First Reserve Corporation ("First Reserve") under the
1997 Shareholders Agreement, has decided not to stand for re-election due to his
other business responsibilities. First Reserve has notified CDI that it is not
prepared to choose an alternative nominee at this time. This Board seat will
remain vacant until First Reserve informs the Company of its alternate nominee
to fill this vacant seat. CDI will issue a press release at that time and that
nominee will be elected, as required in the 1997 Shareholders Agreement, by the
Board to serve until the next election of Class I directors.

The following table sets forth certain information as of April 3, 1998
concerning each nominee for director, each director and each executive officer
of the Company named in the Summary Compensation Table below, including the
number and percentage of shares of Common Stock beneficially owned by him,
determined in accordance with Rule 13d-3 of the Securities Exchange Commission
Act of 1934 (the "Exchange Act"). The date shown under the caption "First
Elected Director" for each nominee and director refers to the year in which he
was first elected to the Board of Directors. Unless otherwise indicated, each
person has been engaged in the principal occupation shown for the past five
years or longer and shares indicated as beneficially owned are held directly
with sole voting and investment power. In the case of directors who are also
officers of the Company, unless otherwise indicated, such persons have been
employed as an officer in one or more capacities by the Company or a subsidiary
for the past five years or longer. The address of each director and executive
officer is c/o Cal Dive International, Inc., 400 N. Sam Houston Parkway, Suite
400, Houston, Texas 77060. Except as provided in Employment Contracts described
under "Executive Compensation and Other Transactions -- Summary of Employment
Contracts and Profit Sharing Plan", all executive officers of the Company serve
at the pleasure of the Board of Directors.

2
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE TWO NOMINEES FOR CLASS I
DIRECTOR NAMED BELOW:
<TABLE>
<CAPTION>

PRINCIPAL FIRST SHARES
OCCUPATION OR ELECTED BENEFICIALLY
NAME AGE EMPLOYMENT DIRECTOR OWNED PERCENT
- ------------------------------------- --- ----------------------------------------------------- -------- ------------ -------
<S> <C> <C> <C> <C>
NOMINEES FOR ELECTION AS CLASS I DIRECTOR (FOR TERM EXPIRING IN 2001)
Owen Kratz........................... 45 President and Chief Executive Officer 1990 1,440,929 9.9**
Thomas M. Ehret...................... 46 Executive Vice President and Chief Operating Officer, 1997 --
Coflexip, Paris, France

CONTINUING CLASS II DIRECTORS (TERM EXPIRES IN 1999)
Gerald G. Reuhl...................... 47 Chairman 1990 912,731 6.3**
William E. Macaulay.................. 52 President and Chief Executive 1995 2,980,373 20.5***
Officer, First Reserve Corporation
Greenwich, Connecticut
Gordon F. Ahalt...................... 70 President, GFA, Inc. 1990 10,000 *
Morristown, New Jersey
Jean-Bernard Fay..................... 51 Corporate Vice President, 1997 -- *
Coflexip, Paris, France

CONTINUING CLASS III DIRECTORS (TERM EXPIRES IN 2000)
S. James Nelson, Jr. ................ 55 Executive Vice President and 1990 303,125 2.1
Chief Financial Officer
David H. Kennedy..................... 47 Managing Director, First 1995 -- --
Reserve Corporation
Greenwich, Connecticut
Kenneth Hulls........................ 53 Managing Director, Quantum 1995 -- --
Offshore Contractors, Ltd.

NAMED EXECUTIVE OFFICERS NOT SERVING AS DIRECTORS
Lyle K. Kuntz........................ 45 President, Energy Resource 3,110 *
Technology, Inc.
Louis T. Tapscott.................... 60 Senior Vice President-Business 1,333 *
Development
All nominees, Directors and Executive Officers as a group (14 persons)............................ 5,733,047 43.1
</TABLE>

- ------------

* Less than one percent

** Messrs. Reuhl and Kratz are parties to an option agreement pursuant to which
Mr. Kratz can purchase up to 168,350 shares of Common Stock from Mr. Reuhl.
If such option were exercised in full, Messrs. Reuhl and Kratz would own
744,381 and 1,609,279 shares of Common Stock, respectively. In addition, Mr.
Kratz has a five year option under the Company's 1995 Incentive Compensation
Plan to purchase 250,000 shares at an exercise price of $9.50 per share.

*** The 2,980,373 shares indicated as beneficially owned by Mr. Macaulay are
owned of record by First Reserve Fund VI Limited Partnership, First Reserve
Fund V, Limited Partnership, First Reserve Fund V-2 Limited Partnership and
First Reserve Energy Assets Fund, Limited Partnership, of which First
Reserve Corporation is the sole general partner and as to which it possesses
sole voting and investment power. Through his ownership of common stock of
First Reserve Corporation, Mr. Macaulay, for purposes of Rule 13d-3 of the
Exchange Act, may be deemed to share beneficial ownership of the shares
shown as beneficially owned by First Reserve Corporation. Mr. Macaulay
disclaims beneficial ownership of such shares of Common Stock.

3
<PAGE>
OWEN KRATZ has served as the Company's Chief Executive Officer since April
1997, President since 1993 and Chief Operating Officer and director since 1990.
He joined the Company in 1984 and has held various offshore positions, including
SAT diving supervisor, and has had management responsibility for client
relations, marketing and estimating.

THOMAS M. EHRET has served on the Company's Board of Directors since April
1997. Mr. Ehret has been the Senior Executive Vice President of Coflexip since
1996 and Chief Operating Officer and director since 1995. From 1989 through
1994, Mr. Ehret served as Chief Executive Officer with Stena Offshore Group
based in Aberdeen, Scotland.

GERALD G. REUHL has served as the Company's Chairman of the Board since
1990 and Chief Executive Officer from 1988 until April 1997. In April of 1997
Mr. Reuhl founded TriPoint Partners, L.L.C., a private equity merchant banking
company, and is a managing partner. Mr. Reuhl serves on the Boards of TriPoint
Incorporated, an oilfield service company specializing in Downhole services, and
Aquatica, Inc., a Gulf of Mexico diving services company, in which Cal Dive owns
a significant minority position. From 1981 to 1984 and 1985 to 1990 Mr. Reuhl
managed the Company's Domestic Diving Division. In 1985 he managed the Company's
overseas business which was wound down under his supervision. Mr. Reuhl joined
the Company as a diver in 1975 and has held numerous offshore supervisory
positions.

WILLIAM E. MACAULAY has served on the Company's Board of Directors since
January 1995. Since 1983, Mr. Macaulay has served as President and Chief
Executive Officer of First Reserve Corporation, a corporate manager of private
investments focusing on the energy and energy-related sectors. Mr. Macaulay
serves as a director of Weatherford Enterra, Inc., an oilfield service company,
Maverick Tube Corporation, a manufacturer of steel pipe and casing, Trans
Montaigne Oil Company, an oil products distribution and refining company,
National Oilwell Inc., a manufacturer and distributor of oil field equipment and
Domain Energy Corporation, an oil and gas exploration company.

GORDON F. AHALT has served on the Company's Board of Directors since July
1990 and has extensive experience in the oil and gas industry. Since 1982, Mr.
Ahalt has been the President of GFA, Inc., a petroleum industry management and
financial consulting firm. From 1977 to 1980, he was President of the
International Energy Bank, London, England. From 1980 to 1982, he served as
Senior Vice President and Chief Financial Officer of Ashland Oil Company. Prior
thereto, Mr. Ahalt spent a number of years in executive positions with Chase
Manhattan Bank. Mr. Ahalt serves as Vice President of W.H. Reaves & Co. Inc., an
asset management company, and as a director of The Houston Exploration Co., The
Harbinger Group and the Bancroft & Elsworth Convertible Funds.

JEAN-BERNARD FAY has served on the Company's Board of Directors since April
1997. Mr. Fay has been Senior Executive Vice President, Administration and
Finance of Coflexip since February of 1998, Chief Financial Officer since 1997
and from 1990 to 1996 was Group Vice President -- Finance and Administration.
From 1986 to 1990, he was a Managing Director with SCOR, a French reinsurance
group.

S. JAMES NELSON, JR., has served as Executive Vice President, Chief
Financial Officer and a director of the Company since 1990. From 1985 to 1988,
Mr. Nelson was the Senior Vice President and Chief Financial Officer of
Diversified Energies, Inc., the former parent of Cal Dive, at which time he had
corporate responsibility for the Company. From 1980 to 1985, Mr. Nelson served
as Chief Financial Officer of Apache Corporation, an oil and gas exploration and
production company. From 1966 to 1980, Mr. Nelson was employed with Arthur
Andersen & Co., and from 1976 to 1980, he was a partner serving on the firm's
worldwide oil and gas industry team. Mr. Nelson received his undergraduate
degree from Holy Cross College (B.S.) in 1964 and a masters in business
administration (M.B.A.) from Harvard University in 1966.

4
<PAGE>
DAVID H. KENNEDY has served on the Company's Board of Directors since
January 1995 and has more than 20 years of experience in the oil and gas
industry. Since 1981, Mr. Kennedy has served as Managing Director of First
Reserve Corporation. From 1971 to 1981, he was with Price Waterhouse & Co. where
his responsibilities included tax and audit services for major energy companies.
Mr. Kennedy is a director of Maverick Tube Corporation, a manufacturer of steel
pipe and casing and of Berkley Petroleum Corporation, Pursuit Resources
Corporation, Burner Exploration Ltd., and Best Pacific Resources, Ltd., four
Canadian exploration and production companies.

KENNETH HULLS has served on the Company's Board of Directors since May
1997. Mr. Hulls has served as Managing Director of Quantum Offshore Contractors,
Ltd., since February 1998, was President and Chief Executive Officer of Coflexip
Stena Offshore, Inc., the North American subsidiary of Coflexip since May 1997,
and has held various positions in the Coflexip Stena Offshore Group from 1991 to
May 1997.

COMMITTEES AND MEETINGS OF DIRECTORS

During the fiscal year ended December 31, 1997, the Board of Directors held
four meetings. During the period that he served as a director in 1997, each
director of the Company attended 75% or more of the aggregate number of meetings
of the Board of Directors and committees of which he is a member.

The CDI Board of Directors currently has two committees. The Audit
Committee, which met once in the fiscal year ended December 31, 1997, meets
periodically with representatives of the Company's independent public
accountants to obtain an assessment of the financial position and results of
operations of the Company and reports to the Board of Directors with respect
thereto. The Compensation Committee, which met two times in the fiscal year
ended December 31, 1997, reviews, analyzes and recommends compensation programs
to the Board, establishes executive compensation, evaluates the performance of
certain executive officers and is responsible for the administration and the
grant of awards under the Company's 1995 Amended Incentive Compensation Plan.
The Board of Directors does not have a standing nominating committee.

DIRECTOR COMPENSATION

The Company pays the reasonable out-of-pocket expenses incurred by each
Director in connection with attending the meetings of the Board, any Subsidiary
Board and any committee thereof. In addition, in 1997 the Company paid its two
Independent Directors (not affiliated with the Company, Coflexip or First
Reserve Corporation) Messrs. Ahalt and Hage a directors fee of $20,000 for
attending each of four regularly scheduled quarterly meetings. Furthermore, the
Independent Directors received a fee of $250 for each committee meeting
attended. Subject to necessary approvals under the 1997 Shareholders' Agreement,
the Board has approved paying fees to all non-CDI management directors and
increasing the directors fee to $24,000 and committee meeting fees to $500 per
meeting.

Pursuant to the Company's 1995 Amended Incentive Compensation Plan (the
"1995 Plan"), each director is eligible to receive options to purchase shares
of the Common Stock of the Company at an exercise price equal to the fair market
value of the Common Stock on the date of grant, which, so long as the Company's
Common Stock is quoted on the Nasdaq Stock Market, will be the final closing
sales price per share for the trading day next preceding the date of grant. As
of December 31, 1997, options for 22,000 shares were outstanding to Gordon F.
Ahalt under the 1995 Plan.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and beneficial owners of more than 10% of the
Common Stock to file certain beneficial ownership reports with the Securities
and Exchange Commission. Based upon information provided by such reporting
persons. First Reserve Corporation failed to file timely a Form 3

5
<PAGE>
reporting shares owned by several First Reserve Funds until February 1998. Mike
Middleton, Vice President of CDI failed to file a Form 4 reporting his sale of
shares until March 1998.

PROPOSAL NO. 2: APPROVAL OF THE
CAL DIVE 1998 EMPLOYEE STOCK PURCHASE PLAN

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS APPROVE
THE COMPANY'S 1998 EMPLOYEE STOCK PURCHASE PLAN (THE "1998 PLAN" OR THE
"PLAN") DESCRIBED BELOW.

REASONS FOR THE PROPOSAL

The Company's 1998 Plan was approved by the Board of Directors in November
of 1997, subject to shareholder approval. It is intended as an incentive and to
encourage stock ownership by eligible employees so that they may share in the
fortunes of the Company by acquiring or increasing their proprietary interest.
The 1998 Plan is designed to encourage eligible employees to remain in the
employ of the Company. Purchase rights issued pursuant to this Plan constitute
options issued pursuant to an "employee stock purchase plan" within the
meaning of Section 423 of the Internal Revenue Code of 1986, as amended (the
"Code").

SUMMARY OF THE PLAN

THE FOLLOWING IS A SUMMARY OF THE 1998 PLAN AS RECENTLY APPROVED BY THE
BOARD OF DIRECTORS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE COMPLETE
TEXT OF THE PLAN WHICH IS ATTACHED HERETO AS EXHIBIT A.

ELIGIBILITY

Subject to limitations under the Code, all employees of the Company (and
its subsidiaries) who were employed on January 1, 1998, and continue in
employment shall be eligible to receive purchase rights under this Plan to
purchase the Company's common stock, no par value (the "Common Stock").
Persons hired after January 1, 1998, who have been employed for six months or
more on the first day of January or July shall be eligible to participate in the
Plan as of that payment period (each such six-month period constituting a
"Payment Period"). For purposes of the 1998 Plan, the term employee does not
include an employee whose customary employment is 20 hours or less per week or
is for five months or less in any calendar year. In no event may an employee be
granted a purchase right under this Plan if that employee owns stock possessing
five percent (5%) or more of the total combined voting power or value of all
classes of stock of the Company.

STOCK SUBJECT TO PLAN

The aggregate number of shares which may be issued pursuant to the Plan is
100,000, subject to increase or decrease by reason of stock splits,
reclassifications, stock dividends, changes in par value, and similar matters
requiring adjustment. The maximum number of shares each participant is permitted
to purchase during each Payment Period is determined by dividing $12,500 by the
fair market value of the Common Stock on the first business day of each Payment
Period. No employee is permitted to purchase Common Stock under this Plan and
any similar plans of the Company or any parent or subsidiary corporations which
accrue at a rate which exceeds $25,000 of the fair market value of such Common
Stock (determined as of the date such option is granted) for each calendar year
in which an option first becomes exercisable.

PAYMENT PERIODS AND PURCHASE OPTIONS

Except as described hereinafter, twice each year on January 1 and July 1,
the Company will grant to each eligible employee an option to purchase, on the
last business day of such Payment

6
<PAGE>
Period, at the Purchase Price hereinafter provided for, such number of shares of
Common Stock reserved for the purpose of the Plan as his or her accumulated
payroll deductions on such date will pay for at such Purchase Price. The
Purchase Price shall be the lesser of (i) 85% of the fair market value of the
Common Stock on the first business day of the Payment Period; or (ii) 85% of the
fair market value of the Common Stock on the last business day of the Payment
Period. A special two-month payment period ("Special Payment Period") shall
begin May 1, 1998 and end June 30th 1998, if authorized by the Board of
Directors. The general provisions of this Plan apply to the Special Payment
Period, except the number of shares subject to the option granted on May 1,
1998, is determined by dividing $4,150 by the fair market value of the Common
Stock on such day.

MAXIMUM AMOUNT OF PAYROLL DEDUCTIONS

An employee may authorize payroll deductions in any whole percentage amount
up to but not more than 10% of his regular base pay (which excludes payments for
overtime, bonuses and other special items), provided, however, that the minimum
deduction in respect of any payroll period shall be 1% (or such lesser amount as
the Committee shall establish). An employee may not make any additional payments
into his or her account.

WITHDRAWAL FROM THE PLAN

An employee may withdraw from the Plan, in whole but not in part, at any
time prior to 10 days before the last business day of each Payment Period by
delivering a Withdrawal Notice to the Committee as defined in the 1998 Plan. In
this case, the Company will promptly refund the entire balance of his or her
payroll deductions which have not been applied to purchase Common Stock under
the Plan. An employee who withdraws from the Plan is treated as an employee who
has not participated in the Plan. To re-enter, he or she must file a new
Authorization form at least 10 days before the beginning date of the next
Payment Period.

ISSUANCE OF STOCK/UNUSED PAYROLL DEDUCTIONS

Certificates of stock will be issued to participants, as appropriate, as
soon as practicable after each Payment Period. Fractional shares will not be
issued under the Plan. Any accumulated payroll deductions which would have been
used to purchase fractional shares will be returned to the employee promptly
without interest if the employee ceased participation in the Plan, or carried
over to the next Payment Period if the employee continues in the Plan.
Certificates for Common Stock purchased under the Plan will be issued only in
the name of the employee, or if his or her Authorization Form so specifies, in
the name of the employee and another person of legal age as joint tenants with
rights of survivorship.

TRANSFER AND TERMINATION OF EMPLOYEE'S RIGHTS

An employee's rights under the Plan are his or hers alone and may not be
transferred or assigned to any other person. Any purchase right granted to an
employee may be exercised only by such employee. An employee's rights under the
Plan will terminate when he ceases to be an employee for any reason, including
retirement, resignation, lay-off, discharge or death. A Withdrawal Notice will
be considered as having been received from the employee on the day his or her
employment ceases, and all payroll deductions not used to purchase Common Stock
will be refunded.

ADMINISTRATION OF THE PLAN

The Company will bear all costs of administering the Plan. The Plan shall
be administered by a Committee appointed by the Board of Directors of the
Company (the "Committee"). The Committee will consist of three members. The
interpretation and construction by the Committee in its discretion of any
provisions of the Plan or of any options granted under it shall be final unless

7
<PAGE>
otherwise determined by the Board of Directors. No member of the Board of
Directors or the Committee shall be liable for any action or determination made
in good faith and in its sole judgment with respect to the Plan or any purchase
right granted under it. The officials of the Company charged with administering
the Plan shall have full and absolute discretion in the exercise of their
authority.

PURCHASERS NOT STOCKHOLDERS

The granting of an option to an employee and the deduction from his or her
pay shall not entitle the optionee to any rights as a stockholder with respect
to Common Stock subject to the option. Only after the shares of Common Stock
have been purchased by and issued to such employee shall the rights of a
stockholder apply.

WITHHOLDING AND INCOME TAXATION

The Company, in accordance with the Code and state tax law, if applicable,
will withhold from the wages of participating employees, in all payroll periods
following and in the same calendar year as the date on which compensation is
deemed received by the employee, additional payroll taxes in respect of the
amount that is considered compensation includable in the employee's gross
income, resulting from the sale of Common Stock acquired under the terms of this
Plan.

The 1998 Plan, and the right of participants to make purchases thereunder,
is intended to qualify under the provisions of Section 423 of the Code. Under
these provisions, no income will be taxable to a participant at the time of the
grant or exercise of the purchase right. Upon any disposition of the shares at a
gain, the participant will be subject to tax, and the character of the tax will
depend upon the participant's holding period. If the shares have been held for
more than two years after the grant date and more than one year after the
transfer of shares to him, gain on disposition will be treated as ordinary
income to the extent of the excess of the fair market value of the shares on the
grant date over the purchase price for the shares. Any additional gain generally
will be taxed as long-term capital gain, currently subject to the 12 month or 18
month rate, as applicable. If the shares are disposed of before the expiration
of the applicable holding periods, the excess of the fair market value of the
shares on the exercise date over the purchase price will be treated as ordinary
income, and any further gain or loss on such disposition will generally be taxed
as long-term or short-term capital gain or loss, depending on the holding
period.

THIS BRIEF SUMMARY OF THE FEDERAL INCOME TAX EFFECT UPON THE PARTICIPANTS
AND THE COMPANY WITH RESPECT TO THE GRANT AND EXERCISE OF PURCHASE RIGHTS UNDER
THE EMPLOYEE STOCK PURCHASE PLAN, AND THE DISPOSITION OF THE SHARES ACQUIRED
THEREBY, DOES NOT PURPORT TO BE COMPLETE, AND REFERENCE SHOULD BE MADE TO THE
APPLICABLE PROVISIONS OF THE CODE AND RELATED REGULATIONS FOR DETAILED
INFORMATION CONCERNING TAX EFFECTS OF EACH SUCH TRANSACTION. ADDITIONALLY, THIS
SUMMARY DOES NOT DISCUSS THE PROVISIONS OF THE INCOME TAX LAWS OF ANY
MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH A PARTICIPANT MAY RESIDE.

VOTE REQUIRED FOR APPROVAL OF THE PLAN

The affirmative vote of the holders of a majority of the vote actually cast
will be required for approval of the 1998 Plan.

8
<PAGE>
EXECUTIVE COMPENSATION AND OTHER TRANSACTIONS

SUMMARY OF EXECUTIVE COMPENSATION

The following table provides a summary of the compensation for each of the
fiscal year ended December 31, 1997 of (i) the chief executive officer and (ii)
each of the four most highly compensated executive officers of the Company
during 1997 other than the chief executive officer (collectively, the "Named
Executive Officers").

SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES
----------------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(#) COMPENSATION(2)
- ------------------------------------- --------- ----------- ----------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Owen Kratz........................... 1997 $ 169,728 $ 169,728 250,000 $ 4,000
President and Chief Executive
Officer (1)
Gerald G. Reuhl...................... 1997 $ 151,840 $ 151,840 -- $ 4,000
Chairman (1)
S. James Nelson...................... 1997 $ 133,432 $ 133,432 -- $ 4,000
Executive Vice President and Chief
Financial Officer
Lyle Kuntz........................... 1997 $ 106,329 $ 640,085 -- $ 4,000
President, ERT
Louis L. Tapscott.................... 1997 $ 140,000 $ 70,000 70,000 $ 3,570
Senior Vice President -- Business
Development
</TABLE>
- ------------

(1) From the Company's formation in 1990, Mr. Reuhl served as the Company's
Chairman and Chief Executive Officer. As part of the Company's succession
plan, Mr. Kratz became the Company's Chief Executive Officer in April 1997.

(2) Consists of matching contributions by the Company through the Company's
Profit Sharing Plan.

9
<PAGE>
STOCK OPTIONS

The following table sets forth information with respect to all stock
options granted in 1997 by the Company to each of the Named Executive Officers.

OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>

GRANT
INDIVIDUAL GRANTS DATE VALUE
--------------------------- ----------
(B) (C) (F)
NUMBER OF % OF TOTAL (D) GRANT
SECURITIES OPTIONS EXERCISE DATE
UNDERLYING GRANTED TO OR BASE (E) PRESENT
(A) OPTIONS EMPLOYEES IN PRICE EXPIRATION VALUE
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE ($)(2)
- ---------------------------------------- ----------- ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Owen Kratz.............................. 250,000 46% $ 9.50 4/15/02 $ 969,476
Louis L. Tapscott....................... 70,000 13% $ 9.50 4/15/02 $ 271,453
</TABLE>
- ------------
(1) The stock options granted in 1997 by the Company to the Named Executive
Officers are not immediately exercisable. One-fifth of the number of stock
options covered by each such grant will become exercisable on the first
through fifth anniversaries of the respective date of grant thereof. Such
stock options will, however, become immediately exercisable in their
entirety upon the occurrence of certain events specified in the 1995 Amended
Incentive Compensation Plan.

(2) The Black-Scholes option pricing model was used to determine the grant date
present value of the stock options granted in 1997 by the Company to the
Named Executive Officer. Under the Black-Scholes option pricing model, the
grant date present value of each stock option referred to in the table was
calculated to be $3.88. The following facts and assumptions were used in
making such calculation: (a) an unadjusted exercise price of $9.50 for each
such stock option; (ii) a fair market value of $9.50 for one share of
Company Common Stock on the date of grant; (iii) no dividend yield; (iv) a
stock option term of 5 years; (v) a stock volatility of 35.68%, based on an
analysis of weekly closing stock prices of shares of the Company's peer
group Common Stock for the three years preceding the date of grant; and (vi)
an assumed risk-free interest rate of 5.5%, which is equivalent to the yield
on a five-year treasury note on the date of grant. No other discounts or
restrictions related to vesting or the likelihood of vesting of stock
options were applied. The resulting grant date present value of $3.88 was
multiplied by the total number of stock options granted to each of the Named
Executive Officer to determine the total grant date present value of such
stock options granted to each Named Executive Officer, respectively.

(3) No stock options were exercised in 1997 by any Named Executive Officer.

SUMMARY OF EMPLOYMENT CONTRACTS AND PROFIT SHARING PLAN

Four of the Company's principal executive officers, Gerald G. Reuhl, Owen
Kratz, S. James Nelson and Louis L. Tapscott have entered into employment
agreements with the Company. Mr. Kratz's contract is described below. Each of
Messrs. Reuhl, Nelson and Tapscott's contracts have similar terms involving
salary, bonus and benefits (with amounts that vary due to their
responsibilities) but none of them have the right to cause the Company to
purchase his shares. Each of the employment agreements also provide, among other
things, that until the later of April 11, 2002 or the first or second
anniversary date of termination of the executive's employment with the Company
(depending on the event of termination), the executive shall not, directly or
indirectly either for himself or any other individual or entity, participate in
any business which engages or which proposes to engage in the business of
providing diving services in the Gulf of Mexico or any other business actively
engaged in by the Company on the date of termination of employment, so long as
the Company continues to make payments to such executive, including his base
salary and insurance benefits received by senior executives of the Company. The
Company also entered into employment agreements with six of the Company's other
senior officers substantially similar to the above agreements.

10
<PAGE>
The Company's Retirement Plan (the "Retirement Plan") is a 401(k) savings
plan. The Retirement Plan permits each employee to become a participant in the
savings plan feature on January 1, April 1, July 1, or October 1 following the
employee's completion of 90 consecutive days of employment. Under the Retirement
Plan, each active participant may elect, subject to certain limitations required
by law, to defer payment of from 1% to 15% of his or her compensation. Upon such
an election, the Company contributes such deferred amounts to the Retirement
Plan on behalf of such participant. Such contributions to the 401(k) savings
plan are invested according to the instructions of the participant in investment
funds designated by the plan administrator. Subject to reduction or elimination
based on its financial performance and needs as described in the Plan, the
Company's contributions are determined annually as 50% of each employee's
contribution (up to a maximum of 5% of the employee's annual salary). Employee
contributions to the 401(k) savings plan and earnings thereon are 100% vested at
all times. Contributions by the Company to the profit sharing feature, and
earnings thereon, vest based on the participant's years of service with the
Company, vesting 20% after two years of service, increasing to 50% with three
years of service, and becoming 100% vested following four years of service. All
contributions vest, regardless of years of service, upon termination of
employment by reason of death or disability, attainment of age 65 or the
termination or discontinuance of the Retirement Plan. After termination of
employment, an employee is entitled to receive a lump-sum distribution of his or
her entire vested interest in the Retirement Plan.

KRATZ EMPLOYMENT AGREEMENT

The Company and Mr. Kratz entered into a two-year employment agreement (the
"Agreement") effective April 11, 1997. Pursuant to the provisions of the
Agreement, Mr. Kratz's initial annual salary was $163,200 as President and Chief
Executive Officer. Mr. Kratz's salary is subject to review by the Board of
Directors annually. Mr. Kratz is also entitled to participate in all profit
sharing , incentive, bonus and other employee benefit plans made available to
the Company's executive officers. If Mr. Kratz (i) is terminated by the Company
without "Cause" or (ii) voluntarily resigns from his employment with the
Company and as a director of the Company, the Company shall be obligated to
purchase as promptly as reasonably practicable, up to a number of shares of
Common Stock owned by Mr. Kratz having an aggregate fair market value equal to
$2.3 million.

Under the Agreement, Mr. Kratz will be eligible for an annual bonus up to
100% of his base salary upon the attainment of certain Company-wide performance
goals, the amount of which is to be determined by the Company's Compensation
Committee. Pursuant to the terms of the Agreement and in consideration of
previous agreements which were canceled, Mr. Kratz was granted options to
purchase 250,000 shares of Common Stock beginning April 11, 1998 at an option
exercise price of $9.50 per share. Such options will become exercisable in
installments of 50,000 shares each year over five years.

At the end of Mr. Kratz's employment with the Company, the Company may, in
its sole discretion under the Agreement, elect to trigger a non-competition
covenant pursuant to which Mr. Kratz will be prohibited from competing with the
Company in various geographic areas for a period of up to five years. The amount
of the noncompetition payment to Mr. Kratz under the Agreement will be his base
salary plus insurance benefits.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Messrs. Kennedy, Ehret, Ahalt and Nelson serve on the Company's
Compensation Committee, with Mr. Kennedy acting as its Chairman. Mr. Nelson is
the only executive officer of the Company during the fiscal year ended December
31, 1997 serving as a member of the Compensation Committee of the Company.

11
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board of Directors reviews, analyzes and
establishes compensation packages for the Company's executive officers, reviews
and provides general guidance for the compensation packages for the Company's
officers, evaluates the performance of the Chairman, Chief Executive Officer and
Chief Financial Officer and administers the grant of stock-based awards under
the Company's 1995 Amended and Restated Incentive Compensation Plan. Messrs.
Kennedy, Ehret and Ahalt, who are three of the four members of the Compensation
Committee, are non-employee directors of the Company.

In consultation with an employee benefits consultant retained by the
Company to choose a "Comparison Group" and assess the Company's executive
compensation system, the Committee adopted an executive compensation philosophy
that seeks to (i) provide a competitive total compensation package that enables
the Company to hire, develop, reward and retain key executives, and (ii) tie
bonuses and executive compensation to the Company's annual business objectives,
strategies and stockholder value. The Company's compensation philosophy is also
intended to reward individual initiative and achievement, and to assure that the
amount and nature of executive compensation is reasonably commensurate with the
Company's financial condition, results of operations and Common Stock
performance.

These objectives are generally sought to be met with competitive base
salaries and annual incentive bonuses higher than the Comparison Group keyed
primarily to the attainment of performance targets tied to the Company's budget
and the award of stock options or other stock-based awards that focus on
increases in stock value over a longer term. Factors considered from time to
time in establishing and reviewing the Company's executive compensation program
include the Company's financial performance, management's business philosophy,
industry practices and the Company's culture and organizational structure. As to
the Chief Executive Officer's and Chief Financial Officer's compensation, the
consultant reported that their base salaries were below the Comparison Group.
The committee recommended and the Board approved increasing Mr. Kratz's annual
salary to $265,000 and Mr. Nelson's to $200,000.

In order to link a portion of executive compensation to Company
performance, the Committee determined to continue during 1998 an annual bonus
plan under which each officer and the Company's profit center managers could
earn an annual bonus of between approximately 30% to 100% of salary based on the
quality of the individual's performance and the attainment of pre-established
revenue and profit goals by the Company as a whole and by individual profit
centers. The exact amount of the bonus paid to the executive officers was
determined by the Compensation Committee.

All of the Company's profit centers surpassed the 1997 objective
performance milestones and the Company paid bonuses to the executives
responsible for those profit centers of up to 57% of the executive's salary,
totaling approximately $1,164,000 for the group.

Another element of the Committee's performance-based compensation
philosophy is the 1995 Incentive Compensation Plan. The purpose of the Plan is
to link the interests of management to the interests of stockholders and focus
on intermediate and long-term results. Stock option grants are typically made at
100% of the market value of the stock on the date of the award, are not
exercisable during the first year after the award and are exercisable thereafter
under a vesting schedule selected by the Committee that specifies the number of
the options becoming exercisable each year throughout the schedule. The size of
option grants is determined subjectively, generally in approximate proportion to
the officer's level of responsibility and experience. For those purposes, in
1997, the Company granted options to Mr. Kratz, to purchase 250,000 (as
consideration for termination of certain other agreements), Mr. Tapscott to
purchase 70,000 shares of Common Stock at $9.50 per share. No other named
executive officers received option grants in 1997.

12
<PAGE>
Under Section 162(m) of the Code, as amended, no deduction by a publicly
held corporation is allowed for compensation paid by the corporation to its most
highly compensated executive officers to the extent that the amount of such
compensation for the taxable year for any such individual exceeds $1 million.
Section 162(m) provides for the exclusion of compensation that qualifies as
performance-based from the compensation that is subject to such deduction
limitation. Incentive compensation granted through the Company's Stock Option
Plan may also qualify as performance-based compensation if additional
requirements are met. The Company anticipates that the components of individual
annual compensation for each highly compensated executive officer that do not
qualify for any exclusion from the deduction limitation of Section 162(m) will
not exceed $1 million and will therefore qualify for deductibility. SUBMITTED BY
THE COMPENSATION COMMITTEE, DAVID H. KENNEDY, THOMAS M. EHRET, GORDON F. AHALT
AND S. JAMES NELSON, JR.

13
<PAGE>
PERFORMANCE GRAPH

The following graph presents the cumulative total shareholder return on the
Company's Common Stock for the period since the Company's initial public
offering in July 1997 compared to the cumulative total shareholder return,
assuming reinvestment of dividends, for (i) all U.S. stocks quoted on the Nasdaq
Stock Market as measured by the CSRP Total Return Index for the Nasdaq Stock
Market (U.S.), (ii) all U.S. stocks quoted on the Nasdaq Stock Market that have
the same Standard Industrial Classification ("SIC") code as the Company
(oilfield services) ("Nasdaq Oilfield Services Group") and (iii) a peer group
selected by the Company ("Peer Group") consisting of the following issuers,
each of which is in the offshore construction business or the offshore oil and
gas support services business, or both businesses: Coflexip Stena Offshore,
Inc., Global Industries, Inc., J. Ray McDermott, S.A., Oceaneering
International, Inc. and Stolt Comex Seaway S.A. The Company believes that the
members of the Peer Group provide services and products more comparable to those
of the Company than those provided by the Nasdaq Oilfield Services Group. For
this reason the Company has included the Peer Group in the following performance
graph and intends to use it in future performance graphs in place of the Nasdaq
Oilfield Services Group. The Company's initial public offering was completed in
July, 1997 and, accordingly, return information for earlier periods is not
presented. These indices have been prepared for the Company by Simmons & Company
investment banker of Houston, Texas. The graph assumes $100 was invested on July
7, 1997 in Company Common Stock and in the three indices presented. The returns
of each member of the Peer Group has been weighted according to that issuer's
stock market capitalization. The Company paid no dividends during the period
presented. The cumulative total percentage returns for the period presented were
as follows: Company Common Stock, 163%; all U.S. stocks quoted on the Nasdaq
Stock Market, 109%; the Nasdaq Oilfield Services Group, 125%; and the Peer
Group, 150%.

[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]

JUN 30 97 SEPT 30 97 DEC 31 97
--------- ---------- ---------
PEER GROUP - 100% 173.784% 149.833%
NASDAQ - 100% 116.894% 108.896%
OSX - 100% 135.438% 124.94%
CDIS - 100% 248.33% 163.33%

14
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

DESCRIBED BELOW ARE CERTAIN RELATED AGREEMENTS. THE FOLLOWING DESCRIPTIONS
ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO THE COMPLETE TEXT OF THE
RELEVANT AGREEMENTS, COPIES OF WHICH ARE FILED AS EXHIBITS TO THE COMPANY'S
REGISTRATION STATEMENT ON FORM S-1 (REGISTRATION NO. 333-113 99) FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.

PURCHASE AGREEMENT

On April 11, 1997, the Company, the Selling Shareholders (Messrs. Reuhl,
Kratz and Nelson) and certain other shareholders of the Company entered into an
agreement with Coflexip pursuant to which (i) the Company sold to Coflexip
528,541 shares of Common Stock and (ii) certain shareholders of the Company,
including Messrs. Reuhl, Kratz and Nelson, sold to Coflexip 3,171,247 shares of
Common Stock, all at a purchase price of $9.46 per share for an aggregate price
of $35 million (the "Purchase Agreement"). For issuing Common Stock to
Coflexip, the Company received $5 million in consideration, consisting of two
newly constructed heavy work class construction remotely operated vehicles.
Among other terms of the Purchase Agreement, the Company was required to make a
number of specific representations, warranties and covenants about its business,
capital structure, assets and liabilities. Individual selling shareholders were
required to make separate representations. The Company and Coflexip also agreed
to indemnify each other against certain claims and liabilities arising in
connection with the transaction for a minimum of three years for up to the
amount of consideration transferred for shares, in the case of the Company, or
for the value of the assets transferred, in the case of Coflexip.

SHAREHOLDERS AGREEMENT

COMPOSITION OF THE BOARD

Pursuant to the 1997 Shareholders Agreement, the Board will consist of up
to 11 members. The Company will include, as nominees for the Board, nine
directors, three from Coflexip, three from First Reserve and three from the
Company's senior management. In addition, the Board will nominate up to two
additional directors by a majority vote of the entire Board, to serve in
separate classes. The 1997 Shareholders Agreement provides that the Company will
nominate and use its best efforts to take all necessary action to elect to the
Board the individuals required to be nominated for election as directors.

RIGHT OF FIRST OFFER

The 1997 Shareholders Agreement provides that the Company will not enter
into any agreement (i) to sell the Company (ii) to retain an advisor to sell the
Company or (iii) to pursue any acquisition in excess of 50% of the Company's
market capitalization (based on the 30-day average trading value of the Common
Stock) without first notifying Coflexip in writing and providing Coflexip with
the right to acquire the Company without first notifying Coflexip in writing and
providing Coflexip (including its affiliates) the opportunity to consummate an
acquisition on terms substantially equivalent to any proposal. If Coflexip does
not notify the Company of its intent to pursue a transaction within 15 days of
the notice the Board will have the right to pursue the transaction.

If Coflexip elects to pursue an acquisition of the Company, the Company
will take no further action with respect thereto for 120 days from the date of
Coflexip's notice. If Coflexip does not pursue an acquisition of the Company,
Coflexip has the right to acquire the Company's interest in Quantum Offshore
Contractors, Ltd. The purchase price for the joint venture shall be based on a
valuation prepared by an independent appraiser appointed by the Board. Coflexip
retains the foregoing rights to acquire the Company or the joint venture so long
as it owns at least five percent of the Company's Common Stock.

15
<PAGE>
LIMITED PREEMPTIVE RIGHTS

The 1997 Shareholders Agreement provides that, except under limited
circumstances (including issuances of securities under stock option plans or in
connection with acquisitions), the Company shall provide preemptive rights to
acquire the Company's securities to each of Coflexip, First Reserve and the
Executive Directors. In the event of any public offering and subject to certain
limitations, Coflexip and First Reserve may have the opportunity to acquire
their pro rata share unless the managing underwriters for such offering believe
it would materially and adversely affect the marketability of such offering.

LIMITATIONS ON TRANSFERS

The 1997 Shareholders Agreement contains certain customary transfer
restrictions that prohibit the parties from transferring any Common Stock,
except for certain permitted transfers.

BUSINESS COOPERATION AGREEMENT

In connection with the Purchase Agreement, the Company and Coflexip entered
into a Business Cooperation Agreement pursuant to which the parties formed
Quantum Offshore Contractors, Ltd. to pursue EPIC projects in the offshore oil
and gas industry in the Gulf and the Caribbean. Quantum is owned by Cal Dive and
Coflexip 51% and 49%, respectively and the parties are considering commitment of
one or more vessels to the venture including the CSO Constructor. Cal Dive will
consolidate financial results from the joint venture into its financial
statements. Cal Dive and Coflexip will bid each project as a subcontractor to
the venture for their respective services. In Cal Dive's case, the assets and
services can include ROV operation, diving, coiled tubing, flexible lay
operations with deck load requirements up to 600 metric tons, riser
installation, well servicing, DP DSV's and related services and four point DSV's
(when applicable). In Coflexip's case, the assets and services can include
flexible lay operations in excess of alliance vessel capabilities (including
risers), product sales, manufacture and supply of umbilicals/flex hose/flex
pipe, ROV manufacture and sale, EPIC project design and engineering and project
management, reeled hard pipe lay (including risers), installed in connection
with lay operations, excluding coiled tubing and construction vessels in excess
of Company and alliance capabilities.

REGISTRATION RIGHTS AGREEMENTS

In January 1995, the Company and certain shareholders entered into a
registration rights agreement providing for demand and "piggyback"
registration rights with respect to such shares. In connection with its initial
public offering, under the Registration Rights Agreement CDI paid the costs of
four First Reserve Funds to sell 1,100,00 shares. This registration rights
agreement was amended to provide these shareholders with the same rights as
provided in the 1997 Registration Rights Agreement with Coflexip described in
the next paragraph.

In connection with the Purchase Agreement, the Company and Coflexip entered
into a registration rights agreement providing for demand and "piggyback"
registration rights with respect to such shares (the "1997 Registration Rights
Agreement"). These registration rights agreements provide that if the Company
proposes to register any of its securities under the Securities Act, the holder
is entitled to include shares of Common Stock owned by such holder in such
offering provided, among other conditions, that the underwriters of any offering
have the right to limit the number of such shares included in such registration.
Such registration rights agreements further provide for registration upon the
request of holders of at least 5% of the shares of Common Stock subject to the
agreement. The Company pays certain expenses of a demand offering but does not
pay underwriting discounts and commissions.

16
<PAGE>
QUORUM AND VOTING OF PROXIES

The presence, in person or by proxy, of a majority of the outstanding
shares of Common Stock of the Company is necessary to constitute a quorum.
Stockholders voting, or abstaining from voting, by proxy on any issue will be
counted as present for purposes of constituting a quorum. If a quorum is
present, (i) the election of the two directors to be elected at the Meeting will
be determined by plurality vote (that is, the nominees receiving the largest
number of votes will be elected) and (ii) a majority of votes actually cast will
be required to approve the Company's 1998 Plan and will decide any other matter
properly brought before the Meeting for a vote of stockholders. Shares for which
proxy authority to vote for any nominee for election as a director is withheld
by the stockholders and shares that have not been voted by brokers who may hold
shares on behalf of the beneficial owners ("broker non-votes") will not be
counted as voted for the affected nominee. With respect to the proposal to
approve the 1998 Plan and with respect to any other matter coming before the
Meeting, shares that are not voted as a result of abstentions and broker
non-votes will not be considered as cast in determining whether or not a
majority of votes has been cast.

PRINCIPAL STOCKHOLDERS

The following table sets forth information as to the only persons (or
entities) known by the Company to have beneficial ownership, as of March 25,
1998, of more than 5% of the outstanding shares of Company Common Stock, other
than Owen Kratz, Gerald G. Reuhl and William E. Macaulay whose beneficial
ownership and address are disclosed under "Election of Directors." As of March
25, 1998, the Company had 14,534,831 shares outstanding. To the Company's
knowledge, all shares shown as beneficially owned are held with sole voting
power and sole dispositive power unless otherwise indicated. The information set
forth below has been determined in accordance with Rule 13d-3 under the Exchange
Act on the basis of the most recent information furnished to the Company by the
person listed.

SHARES
BENEFICIALLY PERCENT OF
NAME AND ADDRESS OWNED CLASS
- ------------------------------------- ------------ ----------
Coflexip............................. 3,699,788 25.5%
23 Avenue de Neuilly
75116 Paris, France
First Reserve Corporation............ 2,980,373 20.5%(1)
475 Steamboat Road
Greenwich, Connecticut 06830
Cambridge Investments, Ltd. ......... 872,346 6.0%(2)
600 Montgomery Street
43rd Floor
San Francisco, California 94111
- ------------
(1) First Reserve Corporation is the sole general partner for the record holders
of 2,980,373 shares of Common Stock: First Reserve Fund VI Limited
Partnership, First Reserve Fund V, Limited Partnership, First Reserve Fund
V-2 Limited Partnership and First Reserve Energy Assets Fund, Limited
Partnership.

(2) Cambridge Investments, Ltd. has beneficial ownership of 872,346 shares of
Common Stock with the following affiliates: Cambridge Energy Fund
International, Ltd., Cambridge Energy, L.P., Cambridge Oil & Gas, L.P.,
Cambridge Oil & Gas International, Ltd., Palamundo, LDC and Quantum
Partners, LDC.

17
<PAGE>
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS

The Company's financial statements for the year ended December 31, 1997
were audited by the firm of Arthur Andersen LLP of Houston, Texas.
Representatives of Arthur Andersen LLP are expected to be present at the
Meeting, and will be available to respond to appropriate questions.

STOCKHOLDER PROPOSALS

Eligible stockholders who desire to present a proposal qualified for
inclusion in the proxy materials relating to the Company's 1999 annual meeting
must forward such proposal to the Secretary of the Company at the address set
forth on the Notice of the Meeting in time to arrive at the Company prior to
February 12, 1999.

By Order of the Board of Directors

S. James Nelson, Jr.
SECRETARY

Houston, Texas
April 8, 1998

18
<PAGE>
EXHIBIT A

CAL DIVE INTERNATIONAL, INC.
1998 EMPLOYEE STOCK PURCHASE PLAN

1. PURPOSE

This Cal Dive International, Inc. Employee Stock Purchase Plan (the
"Plan") is intended as an incentive and to encourage stock ownership by all
eligible employees of Cal Dive International, Inc. (the "Company") (and its
subsidiaries) so that they may share in the fortunes of the Company by acquiring
or increasing their proprietary interest in the Company. This Plan is designed
to encourage eligible employees to remain in the employ of the Company. Options
issued pursuant to this Plan shall constitute options issued pursuant to an
"employee stock purchase plan" within the meaning of Section 423 of the Internal
Revenue Code of 1986, as amended (the "Code"), and the terms hereof shall be
interpreted consistent with this requirement.

2. ELIGIBILITY

All employees of the Company (or any of its subsidiaries) who were
employed by the Company (or any of its subsidiaries) on January 1, 1998, and who
have continued in employment shall be eligible to receive options under this
Plan to purchase the Company's no par common stock ("the Common Stock") (except
employees in countries whose laws make participation impractical). Persons hired
after January 1, 1998, who have been employed for six months or more on the
first day of January 1 or July 1 next following the date this Plan is approved
by the stockholders of the Company, shall be eligible to participate in the Plan
as of that payment period (each such six-month period constituting a "Payment
Period").

For purposes of this Section, the term employee shall not include an
employee whose customary employment is 20 hours or less per week or is for five
months or less in any calendar year.

In no event may an employee be granted an option under this Plan if that
employee owns stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of stock of the Company or of its parent
corporation or subsidiary corporation, as the terms "parent corporation" and
"subsidiary corporation" are defined in Section 424(e) and (f) of the Code. For
purposes of determining stock ownership under this paragraph, the rules of
Section 424(d) of the Code shall apply and Common Stock which the employee may
purchase under outstanding options shall be treated as Common Stock owned by the
employee.

3. STOCK SUBJECT TO PLAN

The stock subject to options under this Plan shall be shares of the
Company's authorized but unissued shares of Common Stock or shares of Common
Stock reacquired by the Company, including shares purchased in the open market.
The aggregate number of shares which may be issued pursuant to this Plan is
100,000, subject to increase or decrease by reason of stock splits,
reclassifications, stock dividends, changes in par value, and similar matters
requiring adjustment.

A-1
<PAGE>
4. PAYMENT PERIODS AND STOCK OPTIONS

The six-month periods, January 1 to June 30 and July 1 to December 31 are
Payment Periods during which payroll deductions will be accumulated under the
Plan. Each Payment Period includes only regular pay days falling within it.

Twice each year, on the first business day of each Payment Period, the
Company will grant to each eligible employee, who is then a participant in the
Plan, an option to purchase, on the last business day of such Payment Period, at
the Option Price hereinafter provided for, such number of shares of Common Stock
as determined in this Section 4, reserved for the purpose of the Plan as his or
her accumulated payroll deductions on such date will pay for at such Option
Price; provided and on condition that such employee remains eligible to
participate in the Plan throughout such Payment Period. The Option Price for
each Payment Period shall be the lesser of (i) 85% of the fair market value of
the Common Stock on the first business day of the Payment Period; or (ii) 85% of
the fair market value of the Common Stock on the last business day of the
Payment Period. In the event of an increase or decrease in the number of
outstanding shares of Common Stock through stock split-ups, reclassifications,
stock dividends, changes in par value and the like, an appropriate adjustment
shall be made in the number of shares and Option Price per share provided for
under the Plan, either by a proportionate increase in the number of shares and a
proportionate decrease in the Option Price per share, or by a proportionate
decrease in the number of shares and a proportionate increase in the Option
Price per share, as may be required to enable an eligible employee who is then a
participant in the plan as to whom an option is exercised on the last business
day of any then current Payment Period to acquire such number of full shares as
his accumulated payroll deductions on such date will pay for at the adjusted
Option Price.

On the first business day of each Payment Period, an employee shall be
deemed to have been granted an option to purchase the number of shares of Common
Stock determined by dividing $12,500 by the fair market value of the Common
Stock on such day.

For purposes of this Plan the term "FAIR MARKET VALUE" means on any date
the average of the high and low prices of the Common Stock on the NASDAQ
National Market System or, if the Common Stock is traded over-the-counter or on
another national securities exchange, such price or exchange as designated by
the Committee.

For purposes of this Plan the term "BUSINESS DAY" as used herein means a
day on which there is trading on the NASDAQ National Market System or such other
national securities exchange as shall be designated by the Board of Directors
pursuant to the preceding paragraph.

No employee shall be granted an option which permits his rights to
purchase Common Stock under this Plan and any similar plans of the Company or
any parent or subsidiary corporations to accrue at a rate which exceeds $25,000
of the fair market value of such Common Stock (determined as of the date such
option is granted) for each calendar year in which an option first becomes
exercisable. This limitation is required to comply with Section 423(b)(8) of the
Code.

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SPECIAL PAYMENT PERIOD

A special two-month payment period ("Special Payment Period") shall begin
May 1, 1998 and end June 30, 1998, if authorized by the Board of Directors. The
general provisions of this Plan apply to the Special Payment Period, except (a)
the number of shares subject to the option granted on May 1, 1998, is determined
by dividing $4,150 by the fair market value of the Common Stock on such day, and
(b) the term "Special Payment Period" is substituted for "Payment Period" as
necessary to effect the special two-month period.

5. EXERCISE OF OPTION

Each eligible employee who continues to be a participant in the Plan on
the last business day of a Payment Period shall be deemed to have exercised his
option on such date and shall be deemed to have purchased from the Company such
number of full shares of Common Stock reserved for the purpose of the Plan as
his accumulated payroll deductions on such date will pay for at the Option
Price. If a participant is not an employee on the last business day of a Payment
Period, he shall not be entitled to exercise his option.

6. AUTHORIZATION FOR ENTERING PLAN

An eligible employee may become a participant in the Plan by filling out,
signing and delivering to the Committee an Authorization Form provided by the
Committee:

(a) stating the percentage to be deducted regularly from his or
her regular base pay;

(b) authorizing the purchase of Common Stock for him or her in each
Payment Period in accordance with the terms of the Plan; and

Such authorization must be received by the Committee at least 10 days
before the beginning date of the next succeeding Payment Period.

Unless an employee files a new Authorization Form or withdraws from the
Plan, his or her deductions and purchases under the Authorization Form he or she
has on file under the Plan will continue in effect as long as the Plan remains
in effect.

The Company will accumulate and hold for the employee's account the
amounts deducted from his or her pay. No interest will be paid on these amounts.

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7. MAXIMUM AMOUNT OF PAYROLL DEDUCTIONS

An employee may authorize payroll deductions in any whole percentage
amount up to but not more than 10% of his REGULAR BASE PAY (which excludes
payments for overtime, bonuses and other special items), provided, however, that
the minimum deduction in respect of any payroll period shall be 1% (or such
other amount as the Committee shall establish). An employee may not make any
additional payments into his or her account.

An employee's regular base pay during the Payment Period shall be
determined by multiplying his base pay by the number of regular payroll days in
such period (or the hourly rate by 1040), provided that, in the case of an
eligible part time hourly employee, the employee's base pay during a Payment
Period shall be determined by multiplying such employee's hourly rate by the
number of regularly scheduled hours of work for such employee during such
offering period.

8. CHANGE IN PAYROLL DEDUCTIONS

Payroll deductions may be changed prior to the beginning of each Payment
Period pursuant to procedures specified by the Committee. A new Authorization
Form must be received by the Committee for any change to become effective.

9. WITHDRAWAL FROM THE PLAN

An employee who withdraws from the Plan is treated as an employee who has
not participated in the Plan. To re-enter, he or she must file a new
Authorization form at least 10 days before the beginning date of the next
Payment Period.

10. ISSUANCE OF STOCK/UNUSED PAYROLL DEDUCTIONS

Certificates for Common Stock purchased under the Plan will be issued only
in the name of the employee, or if his or her Authorization Form so specifies,
in the name of the employee and another person of legal age as joint tenants
with rights of survivorship.

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11. NO TRANSFER OR ASSIGNMENT OF EMPLOYEE'S RIGHTS

An employee's rights under the Plan are his or hers alone and may not be
transferred or assigned to any other person. Any option granted to an employee
may be exercised only by such employee.

12. TERMINATION OF EMPLOYEE'S RIGHTS

An employee's rights under the Plan will terminate when he ceases to be an
employee for any reason, including retirement, resignation, lay-off, discharge
or death. A Withdrawal Notice will be considered as having been received from
the employee on the day his or her employment ceases, and all payroll deductions
not used to purchase Common Stock will be refunded.

If an employee's payroll deductions are interrupted by any legal process,
a Withdrawal Notice will be considered as having been received from him or her
on the day the interruption occurs.

13. TERMINATION AND AMENDMENTS TO PLAN

The Plan may be terminated at any time by the Company's Board of
Directors. It will terminate in any case when all or substantially all of the
unissued shares of Common Stock reserved for the purposes of the Plan have been
purchased. If at any time shares of Common Stock reserved for the purposes of
the Plan remain available for purchase, but not in sufficient number to satisfy
all then unfilled purchase requirements, the available shares shall be
apportioned among participants in proportion to their options and the Plan shall
terminate. Upon such termination or any other termination of the Plan, all
payroll deductions not used to purchase Common Stock shall be refunded.

The Board of Directors also reserves the right to amend the Plan from time
to time, in any respect provided, however, that no amendment shall be effective
which would (a) increase the number of shares of Common Stock to be offered,
except as provided in Section 3, or (b) change the class of employees eligible
to receive options under the Plan, without prior approval of the stockholders.

14. LIMITATIONS ON SALE OF STOCK
PURCHASED UNDER THE PLAN

The Plan is intended to provide Common Stock for investment and not for
resale. The Company does not, however, intend to restrict or influence any
employee in the conduct of his or her own affairs. An employee may, therefore,
sell stock purchased under the Plan at any time he or she chooses; provided,
however, that because of certain Federal tax requirements, each employee agrees
by participating in this Plan, promptly to give the Company notice of any such
Common Stock disposed of before the later of (a) two years after the first
business day of the Payment Period during which the stock was purchased (the
grant date), and (b) one year after the transfer of the Common Stock to him or
her, in each case identifying the date acquired and the number of such shares
disposed of. The employee assumes the risk of any market fluctuations in the
price of Common Stock purchased under this Plan. See Section 21, WITHHOLDING OF
ADDITIONAL INCOME TAX.

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<PAGE>
15. COMPANY'S PAYMENT OF
EXPENSES RELATED TO PLAN

The Company will bear all costs of administering and carrying out the
Plan.

16. PARTICIPATING SUBSIDIARIES

The term "subsidiaries" shall mean each subsidiary of the Company
designated by the Board of Directors to participate in the Plan. The Board of
Directors shall have the power to make such designations before or after the
Plan is approved by the stockholders.

17. ADMINISTRATION OF THE PLAN

The Plan shall be administered by the Employee Benefits Committee, or such
other committee appointed by the Board of Directors of the Company (the
"Committee"). The Committee shall consist of not less than three members. The
Board of Directors may from time to time remove members from, or add members to
the Committee. Vacancies on the Committee, however caused, shall be filled by
the Board of Directors. The Committee shall select one of its members as
Chairman, and shall hold meetings at such times and places as it may determine.
Acts by a majority of the Committee, or acts reduced to and approved in writing
by a majority of the members of the Committee, including written approvals by
electronic means, shall be valid acts of the Committee.

The interpretation and construction by the Committee in its discretion of
any provisions of the Plan or of any options granted under it shall be final
unless otherwise determined by the Board of Directors. The Committee may from
time to time adopt such rules and regulations for carrying out the Plan as it
may deem best. No member of the Board of Directors or the Committee shall be
liable for any action or determination made in good faith and in its sole
judgment with respect to the Plan or any option granted under it.

18. THE EFFECT AND REVIEW
OF ADMINISTRATIVE RULINGS

The officials of the Company charged with administering the Plan shall
have full and absolute discretion in the exercise of their authority. All
actions taken and all rulings or decisions made by those officials in the
exercise of their powers and authorities in relation to the Plan shall be
binding on all other parties even if the official might have an actual or
potential conflict of interest in the action, ruling or decision. No action,
ruling or decision by the official shall be subject to de novo review in any
judicial proceeding. No action, ruling or decision of any official may be set
aside unless it has been held to be arbitrary or capricious by a final judgment
of a court having jurisdiction with respect to the issue.

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<PAGE>
19. OPTIONEES NOT STOCKHOLDERS

20. APPLICATION OF FUNDS

The proceeds received by the Company from the sale of Common Stock
pursuant to options granted under the Plan will be used for general corporate
purposes.

21. GOVERNMENTAL REGULATION

The Company's obligation to sell and deliver shares of Common Stock under
this Plan is subject to compliance with any governmental authority required in
connection with the authorization, sale and issuance of Common Stock.

22. WITHHOLDING OF ADDITIONAL INCOME TAX

The Company, in accordance with Section 3402(a) of the Code (and the
Regulations and Rulings promulgated thereunder) and state law, if applicable,
will withhold from the wages of participating employees, in all payroll periods
following and in the same calendar year as the date on which compensation is
deemed received by the employee, additional income taxes in respect of the
amount that is considered compensation includable in the employee's gross
income, resulting from the sale of Common Stock acquired under the terms of this
Plan.

23. INDEMNIFICATION

To the extent permitted under local law, each member of the Board of
Directors and official of the Company administering this Plan will be
indemnified by the Company for all expenses incurred by the official as a result
of the official's administration of this Plan. Expenses incurred as a result of
gross negligence and willful misconduct are excluded from this indemnification.

24. GOVERNING LAWS

The law of the State of Texas shall govern all matters relating to this
Plan except to the extent it is superseded by the laws of the United States.

25. APPROVAL OF STOCKHOLDERS

This Plan shall not be effective until approved by the Company's
stockholders within 12 months before or after the date the Plan is adopted by
the Board of Directors.

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<PAGE>
CALDIVE INTERNATIONAL, INC.
400 N. SAM HOUSTON PARKWAY, E.
SUITE 400
HOUSTON, TX 77060

The undersigned, having duly received the Notice of Annual Meeting of
Shareholders and the Proxy Statement, dated April 8, 1998 hereby appoints Owen
E. Kratz, S. James Nelson, Jr. and Andrew C. Becher as proxies (each with the
power to act alone and with the power of substitution and revocation) to
represent the undersigned and to vote, as designated below, all common shares of
CalDive International, Inc. held of record by the undersigned on March 25, 1998
at the 1998 Annual Meeting of Shareholders to be held on Tuesday, May 12, 1998
at 10:00 a.m. at the Hotel Sofitel located at 425 E. Sam Houston Parkway E.,
Houston, Texas 77060, and at any adjournments thereof.

1. To elect two directors of the Company to have a term expiring in 2001, and
until his successor shall be elected and duly qualified.

[ ] FOR the two "Class I" nominees listed below [ ] WITHHOLD AUTHORITY to
vote for the nominees
listed below

OWEN E. KRATZ
THOMAS M. EHRET

2. Proposal to adopt the Company's 1998 Employee Stock Purchase Plan

[ ] FOR [ ] AGAINST [ ] ABSTAIN

3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment thereof.

(CONTINUED AND TO BE SIGNED ON OTHER SIDE)

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED ON
THE PROXY BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1 AND 2. ABSTENTIONS WILL BE COUNTED TOWARD THE
EXISTENCE OF A QUORUM.

Please sign exactly as the name appears on this proxy. When shares are held
by joint tenants, both should sign. If signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by an authorized
person.

Dated: _____________________________
_____________________________________
_____________________________________
(Signature)____________

PLEASE MARK, SIGN, DATE AND RETURN
THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.
<PAGE>
April 8, 1998

TO: All Cal Dive International, Inc. Shareholders

Dear Shareholder:

We are very pleased to personally invite you to attend the first Annual
Shareholders' Meeting of "CDI - A New Generation Subsea Contractor" as a public
company. 1997 was an exciting and successful year for the Company as we expanded
our fleet, took advantage of opportunities in our core businesses and continued
to develop our strategy of being a leading provider to the Deepwater
developments in the Gulf of Mexico. We believe you will find the Annual Meeting
both entertaining and informative.

As indicated in the attached materials, the meeting will be held at Hotel
Sofitel. On the opposite side of this letter is a map from the airport to locate
the meeting. Please refer to the attached Annual Report, Form 10-K, Proxy
Statement and Proxy card for more detailed information.

We look forward to seeing you at the meeting. As always, if you have any
questions, please call at (281) 618-0400.

Andrew C. Becher
Senior Vice President
and General Counsel

ACB:sg
Enclosures