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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Check the appropriate box:
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RULE 14a-6(e)(2)).
[X] Definitive Proxy Statement.
[ ] Definitive Additional Materials.
[ ] Soliciting Material Pursuant to Section 240.14a-12
Cal Dive International, Inc.
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(Name of Registrant as Specified In Its Charter)
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SEC 1913 (02-02)
[CAL DIVE LOGO]
CAL DIVE INTERNATIONAL, INC.
400 N. SAM HOUSTON PARKWAY E., SUITE 400
HOUSTON, TEXAS 77060
TELEPHONE: 281-618-0400
April 16, 2003
Dear Shareholder:
You are cordially invited to join us for our Annual Meeting of Shareholders
to be held this year on Wednesday, May 14, 2003 at 11:00 a.m. in Salon No. 1 at
the Wyndham Hotel, 12400 Greenspoint Drive, Houston, Texas 77060. Beginning at
10:30 a.m., employees and officers will be available to provide information
about 2002 developments.
The Notice of Annual Meeting of Shareholders and the Proxy Statement that
follow describe the business to be conducted at the meeting. We will also report
on industry matters of current interest to our shareholders.
YOUR VOTE IS IMPORTANT. Whether you own a few or many shares of stock, it
is important that your shares be represented. If you cannot attend the Annual
Meeting in person, please complete and sign the enclosed proxy card and promptly
return it in the envelope provided.
We look forward to seeing you at the Annual Meeting.
Sincerely,
/s/ JAMES LEWIS CONNOR, III
James Lewis Connor, III
Corporate Secretary
VOTING METHOD
If you are a shareholder of record, or hold shares through a Cal Dive stock
plan, you may vote your shares by mail. You may also revoke your proxy any time
before the Annual Meeting. Due to the small number of our record Shareholders
(non "street-name"), we have elected to forgo the high cost of internet and
telephone voting. To vote by mail:
- Mark your selections on the proxy card.
- Date and sign your name exactly as it appears on your proxy card.
- Mail the proxy card in the enclosed postage-paid envelope provided.
IF YOUR SHARES ARE HELD IN "STREET NAME" THROUGH A BROKER, BANK OR OTHER
THIRD PARTY, YOU WILL RECEIVE INSTRUCTIONS FROM THAT THIRD PARTY (WHO IS THE
HOLDER OF RECORD) WHICH YOU MUST FOLLOW IN ORDER FOR YOUR SHARES TO BE VOTED.
YOUR OPINION IS IMPORTANT. THANK YOU FOR VOTING.
INTERNET AVAILABILITY OF ANNUAL MEETING MATERIALS
We are pleased to offer shareholders the ability to review Form 10-Ks and proxy
materials electronically over the internet at the Cal Dive web site
(www.caldive.com) by clicking Investor Relations then SEC Filings then Click
here to continue on to view SEC Filings. These filings may also be viewed
through the Securities and Exchange Commission website at www.sec.gov. Our
Annual Reports may also be viewed over the internet at the Cal Dive web site by
clicking Investor Relations then Financial Reports.
CAL DIVE INTERNATIONAL, INC.
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
TIME:............................... 11:00 a.m. (CDT) on Wednesday, May 14,
2003
PLACE:.............................. Wyndham Hotel
Salon No. 1
12400 Greenspoint Drive
Houston, Texas 77060
ITEMS OF BUSINESS:.................. 1. To elect two (2) Class II Directors.
2. To approve amendments to the 1998
Employee Stock Purchase Plan.
3. To take action on any other business
that may properly be considered at the
Annual Meeting or any adjournment
thereof.
RECORD DATE:........................ You may vote at the Annual Meeting if
you are a shareholder of record at the
close of business on March 17, 2003.
VOTING BY PROXY:.................... If you cannot attend the Annual
Meeting, you may vote your shares by
completing and promptly returning the
enclosed proxy card in the envelope
provided.
ANNUAL REPORTS:..................... Cal Dive's 2002 Annual Report and Form
10-K/A, which are not part of the proxy
soliciting material, are enclosed.
By Order of the Board of Directors,
/s/ JAMES LEWIS CONNOR, III
James Lewis Connor, III
Corporate Secretary
This Notice of Annual Meeting, Proxy Statement and accompanying proxy card
are being distributed on or about April 16, 2003.
i
TABLE OF CONTENTS
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS.................... i
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING..... 1
PROPOSAL 1: ELECTION OF DIRECTORS........................... 3
COMMITTEES OF THE BOARD AND MEETINGS........................ 6
DIRECTOR COMPENSATION....................................... 7
CERTAIN TRANSACTIONS........................................ 8
INDEPENDENT PUBLIC ACCOUNTANTS.............................. 8
AUDIT FEES, AUDIT-RELATED FEES AND ALL OTHER FEES........... 9
REPORT OF THE AUDIT COMMITTEE............................... 9
SHARE OWNERSHIP INFORMATION................................. 10
Five Percent Owners....................................... 10
Management Shareholdings.................................. 11
Section 16(a) Beneficial Ownership Reporting Compliance... 12
SHAREHOLDER RETURN PERFORMANCE GRAPH........................ 13
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION............................................. 14
REPORT OF THE COMPENSATION COMMITTEE ON FISCAL 2002
EXECUTIVE COMPENSATION.................................... 14
EXECUTIVE COMPENSATION...................................... 17
Summary Compensation Table................................ 17
Option Grants in Last Fiscal Year......................... 18
Aggregated Option Exercises in Last Fiscal Year and Fiscal
Year-End Option Values................................. 18
Summary of Employment Contracts........................... 19
Omnibus Budget Reconciliation Act of 1994................. 19
PROPOSAL 2: AMENDMENTS TO THE 1998 EMPLOYEE STOCK PURCHASE
PLAN...................................................... 19
EQUITY COMPENSATION PLAN INFORMATION........................ 23
OTHER INFORMATION........................................... 23
YOUR VOTE IS IMPORTANT
If you are a shareholder of record, please complete, date and sign your
proxy card and return it as soon as possible in the enclosed envelope. If not,
please respond promptly when you receive Proxy materials from your broker.
ii
[CAL DIVE LOGO]
CAL DIVE INTERNATIONAL, INC.
400 N. SAM HOUSTON PARKWAY E., SUITE 400
HOUSTON, TEXAS 77060
TELEPHONE: 281-618-0400
---------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 14, 2003
---------------------
We are providing these proxy materials in connection with the solicitation
by the Board of Directors of Cal Dive International, Inc. of proxies to be voted
at Cal Dive's Annual Meeting of Shareholders to be held on May 14, 2003, and at
any adjournment of the Annual Meeting.
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
WHO MAY VOTE AT THE ANNUAL MEETING?
The Board has set March 17, 2003 as the record date for the Annual Meeting.
If you were the owner of Cal Dive Common Stock at the close of business on March
17, 2003, you may vote at the Annual Meeting. You are entitled to one vote for
each share of Common Stock you held on the record date, including shares:
- Held directly in your name with our transfer agent, Wells Fargo Bank
Minnesota, N.A., as "shareholder of record".
- Held for you in an account with a broker, bank or other nominee (shares
held in "street name").
- Credited to your account in the Company's Employees Retirement Savings
Plan or Employee Stock Purchase Plan.
Each share of our Common Stock has one vote on each matter to be voted on.
HOW MANY SHARES MUST BE PRESENT TO HOLD THE ANNUAL MEETING?
A majority of Cal Dive's outstanding common shares as of the record date
must be present at the Annual Meeting in order to hold the meeting and conduct
business. This is called a quorum. On the record date, there were 37,632,058
shares of Cal Dive Common Stock outstanding held by approximately 8,467 owners
of record. Shares are counted as present at the Annual Meeting if you:
- are present and vote in person at the Annual Meeting; or
- have properly submitted a proxy card.
WHAT PROPOSALS WILL BE VOTED ON AT THE ANNUAL MEETING?
There are only two matters currently scheduled to be voted on at the Annual
Meeting: PROPOSAL 1 -- the election of two "Class II" Directors; PROPOSAL
2 -- Amendments to the 1998 Employee Stock Purchase Plan.
HOW MANY VOTES ARE REQUIRED TO APPROVE EACH PROPOSAL?
The election of each Director nominee requires the affirmative "FOR" vote
of a majority of the shares present in person or by proxy at the Annual Meeting
and entitled to vote on the election of Directors. The Amendments described in
PROPOSAL 2 requires approval by the affirmative "FOR" vote of a majority of the
shares present in person or by proxy at the meeting and entitled to vote on that
proposal. Any other proposal being voted on requires the affirmative "FOR" vote
of a majority of the shares present in person or by proxy at the meeting and
entitled to vote on that proposal.
HOW ARE VOTES COUNTED?
You may either vote "FOR" or "WITHHOLD AUTHORITY" to vote for each nominee
for the Board of Directors. You may vote "FOR," "AGAINST" or "ABSTAIN" on
PROPOSAL 2 and any other proposals. If you vote to "WITHHOLD" authority to vote
on the election of Directors, your shares will not be considered entitled to
vote on the election of Directors. If you "ABSTAIN" from voting on the other
proposals, it has the same effect as a vote against those proposals. IF YOU JUST
SIGN AND SUBMIT YOUR PROXY CARD WITHOUT VOTING INSTRUCTIONS, YOUR SHARES WILL BE
VOTED "FOR" EACH DIRECTOR NOMINEE, "FOR" THE AMENDMENTS TO THE EMPLOYEE STOCK
PURCHASE PLAN AND "FOR" EACH OF THE OTHER PROPOSALS.
If you hold your shares in street name and do not provide voting
instructions to your broker, your shares will not be voted on any proposal on
which your broker does not have discretionary authority to vote. In this
situation, a "broker non-vote" occurs. Shares that constitute broker non-votes
are not considered as entitled to vote on the proposal in question, thus
effectively reducing the number of shares needed to approve the proposal to
elect Directors. With regard to the amendments to the Employee Stock Purchase
Plan, a broker non-vote has the same effect as a vote against the proposal.
HOW DOES THE BOARD RECOMMEND THAT I VOTE?
Cal Dive's Board recommends that you vote your shares "FOR" each of the
Director nominees in PROPOSAL 1 and "FOR" the Amendments to the Employee Stock
Purchase Plan in PROPOSAL 2.
HOW DO I VOTE MY SHARES WITHOUT ATTENDING THE MEETING?
Whether you hold shares directly, in a Cal Dive stock plan or in street
name, you may direct your vote without attending the Annual Meeting. If you are
a shareholder of record or hold shares through a Cal Dive stock plan, you may
vote by granting a proxy. For shares held in street name, you may vote by
submitting voting instructions to your broker or nominee. If you are a
shareholder of record or hold stock through a Cal Dive stock plan, you may vote
by mail by signing and dating your proxy card and mailing it in the envelope
provided. You should sign your name exactly as it appears on the proxy card. If
you are signing in a representative capacity (for example as guardian, executor,
trustee, custodian, attorney or officer of a corporation), you should indicate
your name and such title or capacity.
For shares held in street name, you should follow the voting directions
provided by your broker or nominee. You may complete and mail a voting
instruction card to your broker or nominee or, in most cases, submit voting
instructions by telephone or the internet. If you provide specific voting
instructions by mail, telephone or the internet, your shares will be voted by
your broker or nominee as you have directed.
2
HOW DO I VOTE MY SHARES IN PERSON AT THE MEETING?
If you are a shareholder of record, to vote your shares at the meeting you
should bring the enclosed proxy card and proof of identification. You may vote
shares held in street name at the meeting only if you obtain a signed proxy from
the record holder (broker or other nominee) giving you the right to vote the
shares.
Even if you plan to attend the meeting, we encourage you to vote by proxy
card, telephone or internet so your vote will be counted even if you later
decide not to attend the Annual Meeting.
WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?
It means you hold shares registered in more than one account. To ensure
that all your shares are voted, sign and return each proxy card.
MAY I CHANGE MY VOTE?
Yes. You may change your vote and revoke your proxy by:
- Sending a written statement to that effect to the Corporate Secretary of
Cal Dive;
- Submitting a properly signed proxy card with a later date; or
- Voting in person at the Annual Meeting.
PROPOSAL 1: ELECTION OF DIRECTORS
The Board of Directors is divided into three classes of similar size. The
members of each class are elected to serve a three-year term with the term of
office of each class ending in successive years. S. James Nelson, Jr. and
William L. Transier are the Directors whose terms expire at this Annual Meeting
and who have been nominated for re-election to the Board to serve until the 2006
Annual Meeting or until their successors are elected and qualified. Both of
these nominees are currently Directors and were elected to the Board of
Directors by the shareholders. The Board consists of eight members.
All of the nominees have indicated a willingness to serve if elected.
However, if any nominee becomes unable to serve before the election, the shares
represented by proxies may be voted for a substitute designated by the Board,
unless a contrary instruction is indicated on the proxy.
THE BOARD RECOMMENDS A VOTE FOR THESE TWO NOMINEES.
NOMINEES FOR DIRECTOR FOR THREE YEAR TERM ENDING IN 2006 (CLASS II):
[S. JAMES NELSON, JR. S. James Nelson, Jr. Director since 1990
PHOTO] Vice Chairman, age 60
Cal Dive International, Inc.
Mr. Nelson is Vice Chairman and has been a Director of the Company since
1990. He was named Vice Chairman in October 2000 and prior thereto he was
Executive Vice President and Chief Financial Officer from 1990 to 2000. 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 L.L.P. and from 1976 to 1980, he
was a partner serving on the firm's worldwide oil and gas industry team. He
received his Bachelor of Science degree from Holy Cross College in 1964 and
a MBA from Harvard University in 1966.
3
William L. Transier Director since 2000
[WILLIAM L. TRANSIER Executive Vice President and Chief Financial Officer, age 48
PHOTO] Ocean Energy, Inc.
Mr. Transier has served on our Board of Directors since October 2000. He is
Executive Vice President and Chief Financial Officer for Ocean Energy, Inc.,
an oil and gas exploration company where he oversees financial,
administrative, accounting, human resources, and marketing and trading
activities. He began his current position in 1999 following the merger
between Ocean Energy, Inc. and Seagull Energy Corporation. He served as
Executive Vice President and Chief Financial Officer of Seagull beginning in
1998. Mr. Transier began his career in the audit department of KPMG LLP
where he held a number of executive positions including partner and national
director of the firm's Energy Practice. He graduated from the University of
Texas and has a MBA from Regis University. He is also a director of Reliant
Resources, Inc.
DIRECTORS CONTINUING IN OFFICE UNTIL 2004 (CLASS I):
[OWEN KRATZ PHOTO] Owen Kratz Director since 1990
Chairman of the Board and Chief Executive Officer age 48
Cal Dive International, Inc.
Mr. Kratz is Chairman and Chief Executive Officer of Cal Dive International,
Inc. He was appointed Chairman in May 1998 and has served as the Company's
Chief Executive Officer since April 1997. Mr. Kratz served as President from
1993 until February 1999, and a Director since 1990. He served as Chief
Operating Officer from 1990 through 1997. Mr. Kratz joined the Company in
1984 and has held various offshore positions, including saturation (SAT)
diving supervisor, and has had management responsibility for client
relations, marketing and estimating. From 1982 to 1983, he was the owner of
an independent marine construction company operating in the Bay of Campeche.
Prior to 1982, he was a superintendent for Santa Fe and various
international diving companies and a saturation diver in the North Sea.
Bernard J. Duroc-Danner Director since 1999
[BERNARD J. Chairman of the Board and age 49
DUROC-DANNER PHOTO] Chief Executive Officer, and President,
Weatherford International, Inc.
Mr. Duroc-Danner has served on the Company's Board of Directors since
February 1999. He is the Chairman of the Board, CEO and President of
Weatherford International, Inc. Prior to its merger with Weatherford
Enterra, Inc., Mr. Duroc-Danner was President and Chief Executive Officer of
EVI, Inc., where he was directly responsible for the company's 1987 start up
in the oilfield service and equipment business. Mr. Duroc-Danner also serves
as Chairman of the Board of Grant Prideco, a provider of drill pipe and
other drill stem products to the oil and gas industry, and as a director of
Parker Drilling Company, a provider of contract drilling and drilling
services, Dresser, Inc., a provider of highly engineered equipment and
services, primarily for the energy industry, Peabody Energy Corp., a coal
production, transportation and trading company, and Universal Compression, a
provider of rental, sales, operations, maintenance and fabrication services
and products to the domestic and international natural gas industry. Mr.
Duroc-Danner holds a Ph.D. in economics from The Wharton School of the
University of Pennsylvania.
4
[JOHN V. LOVOI PHOTO] John V. Lovoi Director since 2003
Principal age 42
JVL Partners
Mr. Lovoi has served as a Director since February 2003. He is a founder of JVL Partners, a
private oil and gas investment partnership. Mr. Lovoi served as head of Morgan Stanley's
global oil and gas investment banking practice from 2000 to 2002, and was a leading oilfield
services and equipment research analyst for Morgan Stanley from 1995 -- 2000. Prior to
joining Morgan Stanley in 1995, he spent two years as a senior financial executive at Baker
Hughes and four years as an energy investment banker with Credit Suisse First Boston. Mr.
Lovoi graduated from Texas A&M University with a bachelor of science degree in chemical
engineering and received a MBA from the University of Texas.
DIRECTORS CONTINUING IN OFFICE UNTIL 2005 (CLASS III):
[MARTIN FERRON PHOTO] Martin Ferron Director since 1998
President and Chief Operating Officer, age 46
Cal Dive International, Inc.
Mr. Ferron has served on the Company's Board of Directors since September
1998. He became President in February 1999 and has served as Chief Operating
Officer since January 1998. Mr. Ferron has more than twenty-two years of
worldwide experience in the oilfield industry, seven of which were in senior
management positions with McDermott Marine Construction and Oceaneering
International Services Limited immediately prior to his joining the Company.
Mr. Ferron has a Civil Engineering degree from City University, London; a
Masters Degree in Marine Technology from the University of Strathclyde,
Glasgow; and a MBA from the University of Aberdeen. He is also a Chartered
Civil Engineer.
[GORDON F. AHALT Gordon F. Ahalt Director since 1990
PHOTO] Retired Consultant age 75
Mr. 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, he spent a number of years in executive positions with Chase
Manhattan Bank. Mr. Ahalt serves as a director of The Houston Exploration
Company, Bancroft & Elsworth Convertible Funds and other private investment
funds. Mr. Ahalt received a Bachelor of Science degree in Petroleum
Engineering from the University of Pittsburgh.
Anthony Tripodo Director since 2003
[ANTHONY TRIPODO Executive Vice President age 50
PHOTO] Veritas DGC, Inc.
Mr. Tripodo has served on our Board of Directors since February 2003. He is
an Executive Vice President of Veritas DGC, Inc., an international oilfield
service company specializing in geophysical services. Previously, he was
President of Veritas DGC's North and South American Group, which consists of
four operating divisions: marine acquisition, processing, exploration
services and multi-client data library. From 1997 to 2001, he was Executive
Vice President, Chief Financial Officer and Treasurer of Veritas.
Previously, Mr. Tripodo served 16 years in various executive capacities with
Baker Hughes, including serving as Chief Financial Officer of both the Baker
Performance Chemicals and the Baker Oil Tools divisions. He graduated summa
cum laude with a bachelor of arts degree from St. Thomas University.
5
COMMITTEES OF THE BOARD AND MEETINGS
Below is a summary of the function of the Board established committees:
AUDIT COMMITTEE
The Audit Committee is appointed by the Board of Directors to assist the
Board in fulfilling their oversight responsibility to the shareholders,
potential shareholders, the investment community and others relating to: (1) the
integrity of the financial statements of the Company, (2) the compliance by the
Company with legal and regulatory requirements, (3) the performance of the
Company's internal audit function and independent auditors and (4) the
independent auditor's qualifications and independence. Among the duties of the
Audit Committee, all of which are more specifically described in the Audit
Committee Charter, the Audit Committee:
- Reviews and recommends selection of independent auditors.
- Reviews the adequacy of accounting and audit principles and practices and
of compliance assurance procedures and internal controls.
- Reviews non-audit services performed by auditors to maintain auditors'
independence.
- Reviews scope of annual audit.
- Reviews Cal Dive's annual and quarterly financial statements.
- Meets independently with management and independent auditors.
- Reviews corporate compliance and disclosure systems.
COMPENSATION COMMITTEE
- Reviews compensation philosophy and major compensation and benefits
programs for employees.
- Oversees the 1995 Long Term Incentive Compensation Plan, as amended, and
the Employee Stock Purchase Plan.
- Reviews executive officer and key employee compensation and bonuses.
EXECUTIVE COMMITTEE
- Evaluates and approves, on behalf of the full Board of Directors,
proposed acquisitions by the Company's wholly owned subsidiary, Energy
Resource Technology, Inc., that are: (i) in excess of $3,000,000; or (ii)
outside of the approved capital expenditures budget subject to Board
approval.
- Performs such other duties as may be assigned by the Board from time to
time.
NOMINATING COMMITTEE
- Evaluates qualifications and candidates for positions on the Board.
- Considers and recommends to the full Board criteria for selecting new
Directors, nominees for Board membership and whether a Director should be
invited to stand for re-election.
Shareholders may nominate persons for election to the Board of Directors in
accordance with the procedure set forth on page 23 of this Proxy Statement.
6
The following table summarizes the membership of the Board Committees, as
well as the number of times each Committee met, during the year ending December
31, 2002:
BOARD AUDIT COMPENSATION EXECUTIVE NOMINATING
------ ------ ------------ --------- ----------
Mr. Kratz............................. Chair -- -- Chair Member
Mr. Ferron............................ Member -- -- -- --
Mr. Nelson............................ Member -- -- -- --
Mr. Ahalt............................. Member Member Member Member --
Mr. Duroc-Danner...................... Member Member Chair Member Chair
Mr. Transier.......................... Member Chair Member Member Member
Number of Meetings in 2002
Regular............................. 4 7 1 1 1
Special............................. 4 1 0 0 0
Each Director (other than Mr. Duroc-Danner) attended 75% or more of the
total meetings of the Board and Board Committees on which such Director served
(held during the period he served as a Director).
The following table summarizes the current membership of the Board and each
of its Committees. Members were elected to these committees in April 2003 by a
vote of the Board of Directors.
BOARD AUDIT COMPENSATION EXECUTIVE NOMINATING
------ ------ ------------ --------- ----------
Mr. Kratz............................. Chair -- -- Chair Member
Mr. Ferron............................ Member -- -- -- --
Mr. Nelson............................ Member -- -- -- --
Mr. Ahalt............................. Member Member Member Member --
Mr. Duroc-Danner...................... Member -- Member Member Chair
Mr. Lovoi(1).......................... Member -- Member Member Member
Mr. Transier.......................... Member Chair Chair Member Member
Mr. Tripodo(1)........................ Member Member Member Member --
---------------
(1) Messrs. Lovoi and Tripodo joined the Board in February 2003.
DIRECTOR COMPENSATION
The Cal Dive International, Inc. non-employee director compensation plan
has three components: director fees, expenses and stock options. The Company
pays the reasonable out-of-pocket expenses incurred by each Director in
connection with attending the meetings of the Board of Directors, and any
committee thereof, and of meetings of the Board of a subsidiary. In addition,
the Directors (other than Messrs. Kratz, Nelson and Ferron, who are employed by
the Company) receive an annual director's fee of $30,000 and $1,000 per Board
Meeting for attending each of four regularly scheduled quarterly meetings.
Furthermore, each of the outside Directors receives an annual Committee retainer
fee of $5,000 and a fee of $2,000 ($3,000 for the Chair) for each committee
meeting attended. During the year ended December 31, 2002, Directors (other than
Company employees) received an aggregate of $176,657.
Pursuant to the Company's 1995 Long Term Incentive Compensation Plan, as
amended (the "1995 Plan"), each non-employee Director receives at the time they
join the Board options to purchase 44,000 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. As with other Company options, these vest equally over
five years and expire on their tenth anniversary. As of March 17, 2003, options
for 44,000 shares were outstanding to each of Gordon F. Ahalt, John V. Lovoi,
William L. Transier and Anthony Tripodo, and options for 14,256 shares were
outstanding to Bernard J. Duroc-Danner.
7
CERTAIN TRANSACTIONS
In April 2000, ERT acquired a 20% working interest in Gunnison, a Deepwater
Gulf of Mexico prospect operated by Kerr-McGee Oil & Gas Corporation. Consistent
with CDI's philosophy of avoiding exploratory risk, financing for the
exploratory costs was provided by an investment partnership (OKCD Investments,
Ltd.), the investors of which are CDI senior management, in exchange for an
overriding royalty interest of 25% of CDI's 20% working interest. CDI provided
no guarantees to the investment partnership.
At that time, the Board of Directors established three criteria to
determine a commercial discovery and the commitment of Cal Dive funds: 75
million barrels (gross) of reserves, total development costs of $500 million
consistent with 75 MBOE, and a CDI estimated shareholder return of no less than
12%. Kerr-McGee, the operator, drilled several exploration wells and sidetracks
in 3,200 feet of water at Garden Banks 667, 668 and 669 (the Gunnison prospect)
and encountered significant potential reserves resulting in the three criteria
being achieved during 2001. With the sanctioning of a commercial discovery, the
Company is funding ongoing development and production costs. Cal Dive's share of
such project development costs is estimated in a range of $100 million to $110
million ($63.3 million of which had been incurred by December 31, 2002) with
over half of that for construction of the spar. Mr. Kratz, as General Partner of
OKCD personally owns 55.9329% as CEO of the Company, has awarded OKCD interests
aggregating 39% to key CDI employees as a bonus incentive to continue employment
at Cal Dive.
As part of the process of obtaining funding for the exploratory costs of
such projects, several outside third parties will be solicited. Management
believes that the fund structure of current (and all future, if any)
transactions will be both consistent with the Guidelines and at least as
favorable to the Company and ERT as could have been obtained from the third
parties.
INDEPENDENT PUBLIC ACCOUNTANTS
On June 13, 2002, the Company's Board of Directors, upon the recommendation
of its Audit Committee, dismissed Arthur Andersen LLP and appointed Ernst &
Young LLP to serve as the Company's independent auditors for fiscal year 2002.
The decision to change principal accountants was recommended by the Audit
Committee and was approved by the Board of Directors.
Arthur Andersen's reports on Cal Dive's consolidated financial statements
for the two fiscal years ended December 31, 2000 and December 31, 2001 did not
contain an adverse opinion or disclaimer of opinion, nor were they qualified or
modified as to uncertainty, audit scope or accounting principles. Additionally,
during the two fiscal years ended December 31, 2000 and December 31, 2001
through the date of Arthur Andersen's dismissal, there were no disagreements
with Arthur Andersen on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure which, if not
resolved to Arthur Andersen's satisfaction, would have caused Arthur Andersen to
make reference to the subject matter in connection with its reports on the
Company's consolidated financial statements for such years; and there were no
reportable events, as listed in Item 304(a)(1)(v) of Regulation S-K. The Company
provided Arthur Andersen a copy of the foregoing disclosures and Arthur Andersen
advised the Company by letter dated June 18, 2002, that it has found no basis
for disagreement with such statements.
During the fiscal years ended December 31, 2000 and December 31, 2001
through the date of engagement of Ernst & Young, the Company did not consult
with Ernst & Young with respect to the application of accounting principles to a
specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on the Company's consolidated financial
statements, or any other matters or reportable events as set forth in Items
304(a)(2)(i) and (ii) of Regulation S-K.
Ernst & Young LLP has served as the Company's independent public
accountants providing auditing and financial services since their engagement in
fiscal 2002, and will continue to provide such services during fiscal 2003. We
expect that representatives of Ernst & Young LLP will be present at the Annual
Meeting and will have the opportunity to make a statement if they desire to do
so. They will also be available to respond to appropriate questions.
8
AUDIT FEES, AUDIT-RELATED FEES AND ALL OTHER FEES
Audit Fees(1)............................................... $275,000
Financial Information Systems Design and Implementation
Fees...................................................... -0-
All Other Fees(2)........................................... 79,000
--------
Total....................................................... $354,000
---------------
(1) Fees related to the audit of the Company's 2002 consolidated financial
statements and the review of the Company's interim financial statements
included in its quarterly reports on Form 10-Q.
(2) These fees primarily relate to business acquisitions, accounting
consultations, international tax compliance and auditing statutory accounts
of certain non-U.S. operations, which were not directly related to the audit
of the 2002 consolidated financial statements.
The Audit Committee concluded that the foregoing non-audit services did not
adversely affect the independence of Ernst & Young, LLP.
REPORT OF THE AUDIT COMMITTEE
Management is responsible for the Company's internal controls, financial
reporting process and compliance with laws, regulations and ethical business
standards. The independent auditors are responsible for performing an
independent audit of the Company's financial statements in accordance with
generally accepted auditing standards and issuing a report thereon. The primary
purpose of the Audit Committee is to assist the Board in fulfilling their
oversight responsibility to the shareholders, potential shareholders, the
investment community, and others relating to: (1) the integrity of the financial
statements of the Company, (2) the compliance by the Company with legal and
regulatory requirements, (3) the performance of the Company's internal audit
function and independent auditors, and (4) the independent auditor's
qualifications and independence. Its duties are more specifically described in
the Audit Committee Charter and generally include those described on page 9
hereof.
The Audit Committee is the principal liaison between the Board of Directors
and the independent auditors for the Company. The functions of the Audit
Committee are not intended to duplicate or to certify the activities of
management and the independent auditors and are in no way designed to supersede
or alter the traditional responsibilities of the Company's management and
independent auditors. The Audit Committee's role does not provide any special
assurances with regard to the Company's financial statements, nor does it
involve a professional evaluation of the quality of the audits performed by the
independent auditors. In 2002, the Audit Committee was composed of three
non-employee Directors: Mr. Transier (Chairman), Mr. Ahalt and Mr. Duroc-Danner.
All members of the Company's Audit Committee are independent (as independence is
defined in Rule 4200(a)(15) of the NASD listing standards, as may be modified
from time to time). The Board of Directors has adopted an amended written
charter for the Audit Committee, a copy of which is attached to this Proxy
Statement as Exhibit "A". During the fiscal year ended December 31, 2002, the
Audit Committee conducted eight meetings.
In connection with the December 31, 2002 financial statements, the Audit
Committee: (1) reviewed and discussed the audited financial statements with
management and the auditors; (2) discussed with the auditors the matters
required to be discussed by Statement on Auditing Standards No. 61, as may be
modified or supplemented; (3) received written disclosures and the letter from
the auditors required by Independence Standards Board Statement No. 1 and has
discussed with the auditors their independence; and (4) has discussed with the
independent auditors (in Executive session outside of the presence of
management) the audited financial statements and the independent auditor's
independence. Based upon these reviews and discussions, the Audit Committee
recommended to the Board of Directors that the audited financial
9
statements be included in the Company's Annual Report on Form 10-K/A for the
fiscal year ended December 31, 2002.
AUDIT COMMITTEE
William L. Transier (Chairman)
Gordon F. Ahalt
Bernard J. Duroc-Danner
SHARE OWNERSHIP INFORMATION
FIVE PERCENT OWNERS. The following table sets forth information as to the
only persons (or entities) known by us to have beneficial ownership, as of
December 31, 2002, of more than 5% of the outstanding shares of Company Common
Stock, other than Owen Kratz whose beneficial ownership is disclosed below under
"Management Shareholdings." As of March 17, 2003, we had 37,632,058 shares
outstanding. To our knowledge, except as otherwise indicated below, all shares
shown as beneficially owned are held with sole voting power and sole dispositive
power unless. 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 filed with the Securities and Exchange Commission and furnished to
us by the person listed.
SHARES PERCENT OF
BENEFICIALLY COMMON
NAME AND ADDRESS OWNED SHARES
---------------- ------------ ----------
Neuberger Berman, LLC(1).................................... 2,524,540 6.760%
605 Third Avenue
New York, New York 10158
FMR Corp(2)................................................. 2,150,588 5.762%
82 Devonshire Street
Boston, Massachusetts 02109
---------------
(1) Based on a Schedule 13G filed on February 13, 2003, Neuberger Berman, LLC
has shared voting power with respect to 1,669,600 of these shares and shared
dispositive power with respect to all of these shares. Neuberger Berman, LLC
is deemed to be a beneficial owner for purpose of Rule 13(d) since it has
shared power to make decisions whether to retain or dispose, and in some
cases the sole power to vote, the securities of many unrelated clients.
Neuberger Berman, LLC does not, however, have any economic interest in the
securities of those clients. The clients are the actual owners of the
securities and have the sole right to receive and the power to direct the
receipt of dividends from or proceeds from the sale of such securities.
(2) Based on a Schedule 13G filed on February 13, 2003, FMR Corp. only has sole
power to vote 1,294,478 of these shares. Fidelity Management & Research
Company ("Fidelity"), a wholly owned subsidiary of FMR Corp. and an
investment adviser registered under Section 203 of the Investment Advisers
Act of 1940, is the beneficial owner of 856,110 shares or 2.294% of the
Common Stock of the Company. Edward C. Johnson 3d, FMR Corp., through its
control of Fidelity, and the funds each has sole power to dispose of the
856,110 shares owned by the Funds, but neither FMR Corp. nor Edward C.
Johnson 3d, Chairman of FMR Corp., has the sole power to vote or direct the
voting of the shares owned directly by the Fidelity Funds, which power
resides with the Funds' Boards of Trustees. Fidelity Management Trust
Company, a wholly owned subsidiary of FMR Corp. and a bank as defined in
Section 3(a)(6) of the Securities Exchange Act of 1934, is the beneficial
owner of 853,100 shares or 2.286% of the Common Stock outstanding of the
Company as a result of its serving as investment manager of the
institutional account(s). Edward C. Johnson 3d and FMR Corp., through its
control of Fidelity Management Trust Company, each has sole dispositive
power over 853,100 shares and sole power to vote or to direct the voting of
853,100 shares of Common Stock owned by the institutional account(s). Geode
Capital Management, LLC is the beneficial owner of 178 shares or 0.000% of
the outstanding common stock of
10
the Company. Geode LLC is wholly-owned by Fidelity Investors III Limited
Partnership and is an investment adviser registered under Section 203 of the
Investment Advisers Act of 1940.
Management Shareholdings. The following table shows the number of shares
of our Common Stock beneficially owned as of March 17, 2003 by our Directors and
five highest paid executive officers identified in the Summary Compensation
Table below ("Named Executive Officers"), and all Directors and executive
officers as a group.
OF SHARES BENEFICIALLY
OWNED, AMOUNT THAT MAY
AMOUNT AND NATURE OF BE ACQUIRED WITHIN 60 DAYS
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1)(2) BY OPTION EXERCISE
------------------------ -------------------------- --------------------------
Owen Kratz(3)(4)................................ 2,909,218 400,000
Martin R. Ferron(5)............................. 77,661 16,000
S. James Nelson................................. 91,608 -0-
A. Wade Pursell(6).............................. 43,590 25,867
Johnny Edwards.................................. 3,600 -0-
Gordon F. Ahalt................................. 43,600 17,600
Bernard Duroc-Danner............................ 8,963 8,963
John V. Lovoi................................... 1,750 -0-
William L. Transier............................. 10,800 8,800
Anthony Tripodo................................. -0- -0-
---------------
(1) Only one Director or executive officer, Owen Kratz, beneficially owns more
than 1% of the shares outstanding. Mr. Kratz owns approximately 6.67% of the
outstanding shares. Our Directors and executive officers as a group
beneficially own 3,200,442 shares, which represents approximately 8.40% of
the shares outstanding.
(2) Amounts include the shares shown in the last column, which are not currently
outstanding but are deemed beneficially owned because of the right to
acquire them pursuant to options exercisable within 60 days (on or before
June 11, 2003).
(3) In March of 2002, Mr. Kratz entered into a five-year Maximum Monetization
and Asset Protection (MMAP) Agreement with UBS Warburg LLC using 500,000
shares of his Cal Dive Common Stock. He entered into this transaction to
exercise 500,000 CDI stock options that would have otherwise expired on
April 1, 2002. In November 2002, Mr. Kratz entered into a Variable Prepaid
Forward Agreement with Credit Suisse First Boston for up to 300,000 shares
of Cal Dive Common Stock (although only 250,000 shares were made subject to
the agreement). He entered into both transactions to create liquidity for
living expenses since in 2000-2002, Mr. Kratz was not paid a salary or bonus
in cash, but instead was compensated solely through grants of non-qualified
options on Cal Dive Common Stock. While these transactions are required to
be reported as forward sales under Rule 144, they are essentially mechanisms
that allow Mr. Kratz to borrow against the future value of the stock. The
terms of each of these forward sales is five years, with an upper strike
price of 150% and 195%, respectively, of the initial share price. Mr. Kratz
has received an advance equal to a significant percentage of the initial
share price. It is Mr. Kratz's current intention to cash settle these
transactions prior to maturity, thereby continuing to retain beneficial
ownership of the 750,000 shares, although he retains the right to settle the
transactions by delivery of the shares.
(4) Mr. Kratz disclaims beneficial ownership of 500,000 shares, and options to
acquire another 60,000 shares, included in the above table, which are held
by Joss Investments Limited Partnership, an entity of which he is a General
Partner.
(5) Mr. Ferron disclaims beneficial ownership of 61,394 shares included in the
above table, which are held by the Uncle John Limited Partnership, an entity
of which he is a General Partner.
(6) Mr. Pursell disclaims beneficial ownership of 12,500 shares included in the
above table, which are held by WT Kona Redbird Limited Partnership, an
entity of which he is a General Partner.
11
Section 16(a) Beneficial Ownership Reporting Compliance. Section 16(a) of
the Securities Exchange Act of 1934 requires the Company's Directors and
executive officers and persons who own more than ten percent of a registered
class of the Company's equity securities to file with the SEC and the Nasdaq
National Market reports of ownership and changes in ownership of the Company's
common stock. Directors, executive officers and greater than ten percent
stockholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file. Based solely on a review of the copies of
these reports furnished to the Company, all reports required to be filed
pursuant to Section 16(a) of the Exchange Act were filed on a timely basis
except one filing on Form 3 for each of Messrs. Duroc-Danner and Transier, one
filing on Form 5 by Mr. Duroc-Danner and one filing on Form 4 for Mr. Kratz. A
review of the records could not conclusively establish that Messrs. Duroc-Danner
and Transier had filed a Form 3 upon joining the Board of Directors. According,
Messrs. Duroc-Danner and Transier filed a Form 3 on February 3, 2003 and
September 7, 2002, respectively. Mr. Duroc-Danner also filed the Form 5 on
February 3, 2003. Mr. Kratz inadvertently failed to file a Form 4 following the
sale of 250,000 shares as part of an underwritten public offering in 2000 or to
report options granted in 2000-2002. Accordingly, a Form 5 is in the process of
being prepared for filing with the SEC.
12
SHAREHOLDER RETURN PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on our
Common Stock for the period since December 31, 1997 to the cumulative total
shareholder return for (i) all U.S. stocks quoted on the NASDAQ Stock Market as
measured by the NASDAQ Composite Index ("NASDAQ"), assuming the reinvestment of
dividends; (ii) the Philadelphia Oil Service Sector index ("OSX"), a
price-weighted index of leading oil service companies, assuming the reinvestment
of dividends; and (iii) a peer group selected by us (the "Peer Group")
consisting of the following companies, each of which is in the offshore
construction business or the offshore oil and gas subsea support service
business, or both businesses: Technip-Coflexip, Global Industries, Ltd., Horizon
Offshore, Inc., Oceaneering International, Inc., Stolt Offshore S.A., McDermott
International, Inc. and Torch Offshore Inc. The returns of each member of the
Peer Group have been weighted according to each individual company's equity
market capitalization as of December 31, 2002 and have been adjusted for the
reinvestment of any dividends. We believe that the members of the Peer Group
provide services and products more comparable to us than those companies
included in the OSX. The graph assumes $100 was invested on December 31, 1997 in
the Company's Common Stock at the closing price on that date price and on
December 31, 1997 in the three indices presented. The Company paid no dividends
during the period presented. The cumulative total percentage returns for the
period presented were as follows: Company Common Stock -- 91.8%; the NASDAQ
Composite Index, -- (13.6%); the OSX -- (22.0%); and the Peer Group -- (28.8%).
These results are not necessarily indicative of future performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG CAL DIVE, NASDAQ, PEER
GROUP AND OSX
[PERFORMANCE GRAPH]
------------------------------------------------------------------------------------------------------------------------------
12/31/1997 12/31/1998 12/31/1999 12/31/2000 12/31/2001 12/31/2002
------------------------------------------------------------------------------------------------------------------------------
Cal Dive $100.0 $ 84.7 $135.2 $217.3 $201.5 $191.8
Peer Group Index 100.0 71.8 85.1 130.1 123.3 71.2
Oil Service Index 100.0 45.4 76.3 111.1 78.0 78.0
NASDAQ 100.0 140.2 260.9 158.7 125.7 86.4
Source: Bloomberg
13
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee of the Board of Directors of the
Company was, during fiscal 2002, an officer or employee of the Company or any of
its subsidiaries, or was formerly an officer of the Company or any of its
subsidiaries, or had any relationships requiring disclosure by the Company under
Item 404 of Regulation S-K.
During fiscal 2002, no executive officer of the Company served as (i) a
member of the compensation committee (or other board committee performing
equivalent functions) of another entity, one of whose executive officers served
on the Compensation Committee of the Board of Directors, (ii) a director of
another entity, one of whose executive officers served on the Compensation
Committee, or (iii) a member of the compensation committee (or other board
committee performing equivalent functions) of another entity, one of whose
executive officers served as a director of the Company.
REPORT OF THE COMPENSATION COMMITTEE ON
FISCAL 2002 EXECUTIVE COMPENSATION
OVERVIEW
In 2002, the Compensation Committee of the Board of Directors (the
"Committee") was composed of Messrs. Duroc-Danner (Chairman), Ahalt and
Transier. The Committee is responsible for establishing the compensation
policies and administering the compensation programs for Cal Dive's executive
officers and other key employees and administers the grant of stock-based awards
under the Company's 1995 Long Term Incentive Compensation Plan. The Committee
periodically reviews peer group compensation and engages independent
compensation consultants to assist them in this process. In carrying out its
duties, the Committee intends to make all reasonable attempts to comply with the
requirements to exempt executive compensation from the $1 million deduction
limitation under Section 162(m) of the Internal Revenue Code, unless the
Committee determines that such compliance in given circumstances would not be in
the best interests of Cal Dive and its shareholders.
COMPENSATION PHILOSOPHY
The compensation program for executive officers is designed to:
- provide a competitive total compensation package that enables the Company
to hire, develop, reward and retain key executives.
- 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.
Base Salary. The Committee annually reviews and approves the base salaries
of executive officers and other officers and employees, taking into
consideration management's recommendations regarding individual performance,
retention, the level of responsibility, the scope and complexity of the position
and competitive practice.
Annual Incentive Bonus. Executive officers are eligible for annual
incentives under the shareholder approved Management Incentive Plan. In order to
link a portion of executive compensation to Company performance, the Committee
determined to continue during 2002 an annual bonus plan under which each
officer, the Company's profit center managers and other key employees could earn
an annual bonus of between 30% to 100% or more 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 is determined by the
Compensation Committee.
14
The ERT core management group has a contractual bonus program based on a
percentage of pre-tax net income for the year. Non-management administrative
personnel are also paid discretionary bonuses from this pool.
Long Term Incentive. 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.
Compensation of Chief Executive Officer. The CEO's compensation consists
of base salary, annual incentive and long-term incentives. Pay levels and
opportunity are established by the Committee in the same manner as for other
executive officers described above. The Company and Mr. Kratz entered into a
multi-year employment agreement (the "Kratz Employment Agreement") effective
February 28, 1999. Pursuant to the provisions of the Kratz Employment Agreement,
Mr. Kratz's annual base salary is $280,000 as Chairman 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, but does not have the right to cause the Company
to purchase his shares. The Kratz Employment Agreement contains the same "Good
Cause" and "Change of Control" provisions as described under "Executive
Compensation -- Summary of Employment Contracts".
Under the Kratz Employment Agreement, Mr. Kratz is eligible for an annual
bonus up to 100% of his base salary upon the attainment of certain Company-wide
performance goals (where exceeding those goals can cause the bonus to exceed
100%), the amount of which is to be determined by the Compensation Committee.
Pursuant to the terms of the Kratz Employment Agreement, and in consideration of
previous agreements that were canceled, Mr. Kratz was granted options to
purchase 500,000 shares of Common Stock beginning April 11, 1998 at an option
exercise price of $4.75 per share. All 500,000 of such options were exercised by
Mr. Kratz in 2002.
During 2000, the Board of Directors approved a "Stock Option in Lieu of
Salary Program" for Mr. Kratz. Under the terms of the program, Mr. Kratz may
annually elect to receive non-qualified stock options (with an exercise price
equal to the closing stock price on the date of grant) in lieu of cash
compensation with respect to his base salary and any bonus earned under the
annual incentive compensation program. The number of shares granted is
determined utilizing the Black Scholes valuation model as of the date of grant
with a risk premium included. Mr. Kratz made such election for 2001 and 2002
resulting in a total of 180,000 shares being granted during 2001 (100,000 of
which related to a bonus earned under the Annual Incentive Compensation Program)
at an option exercise price of $26.75 per share for the salary and $21.38 per
share for the bonus and a total of 105,000 shares granted during 2002 (none of
which related to a bonus caused under the Annual Incentive Compensation program)
at an option exercise price of $21.83 per share. For 2003, Mr. Kratz has elected
to take his salary and bonus (if any) in cash, rather than receiving
non-qualified stock options.
At the end of Mr. Kratz's employment with the Company, the Company may, in
its sole discretion under the Kratz Employment 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 non-competition payment to Mr. Kratz under the
Kratz Employment Agreement will be his then base salary plus insurance benefits
for the non-competition period.
15
CONCLUSION
Consistent with its compensation philosophy, the Committee believes the
executive officer compensation program provides incentive to attain strong
financial performance and is strongly aligned with shareholder interests. The
Committee believes that Cal Dive's compensation program directs the efforts of
Cal Dive's executive officers toward the continued achievement of growth and
profitability for the benefit of the Company's shareholders.
COMPENSATION COMMITTEE:
Bernard J. Duroc-Danner (Chairman)
Gordon F. Ahalt
William L. Transier
16
EXECUTIVE COMPENSATION
The following table provides a summary of the cash and non-cash
compensation for each of the last three years ended December 31, 2002 for each
of (i) the chief executive officer and (ii) each of the four most highly
compensated executive officers of the Company during 2002 other than the chief
executive officer.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
SECURITIES
ANNUAL COMPENSATION UNDERLYING
------------------------------ OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(2)(3) (NUMBER) COMPENSATION(1)
--------------------------- ---- -------- ----------- ------------ ---------------
Owen Kratz....................... 2002 $ --(4) $ --(4) 105,000(4) $ --
Chairman and Chief 2001 --(4) --(4) 180,000(4) --
Executive Officer 2000 35,000 -- 115,000 875
Martin R. Ferron................. 2002 189,583 -- -- 5,000
President and Chief 2001 168,750 186,262 -- 4,250
Operating Officer 2000 160,000 169,162 40,000 4,000
S. James Nelson.................. 2002 200,000 -- -- 5,000
Vice Chairman 2001 200,000 193,519 -- 4,250
2000 200,000 211,453 -- 4,250
Johnny Edwards................... 2002 98,206 663,516 -- 5,000
President, ERT 2001 97,078 761,387 -- --
2000 93,632 893,257 -- --
A. Wade Pursell.................. 2002 161,667 -- -- 5,000
Senior Vice President 2001 131,500 94,340 10,000 4,250
and Chief Financial Officer 2000 105,600 39,839 54,000 4,250
---------------
(1) Consists of matching contributions by the Company through its 401(k) Plan.
The Company's Retirement Plan is a 401(k) savings plan under which the
Company currently matches 50% of employees' pre-tax contributions up to 5%
of salary (including bonus) subject to contribution limits.
(2) The Bonus reflected in a fiscal year is based on that year's performance.
(3) In 2002, Named Executive Officers (other than Mr. Edwards) were eligible for
annual incentives under the shareholder approved Management Incentive Plan.
An annual bonus of between 30% to 100% or more of salary is payable based on
individual performance and the attainment of pre-established revenue and
profit goals by the Company.
Mr. Edwards and the rest of the ERT Core Management Group have a
contractual bonus program based on a percentage of pre-tax net income for
the year. Personnel other than the Core Management Group, including
administrative personnel, are also paid discretionary bonuses from this
pool. For fiscal year 2002, we paid bonuses aggregating approximately $2.1
million.
(4) In 2001 and 2002, Mr. Kratz elected to receive non-qualified stock options
(with an exercise price equal to the closing stock price on the date of
grant) in lieu of his base salary and bonus earned under our "Stock Option
in Lieu of Salary Program." Mr. Kratz's election for 2001 resulted in a
total of 180,000 shares being granted during 2001 (100,000 of which related
to a bonus earned under the 2001 annual incentive compensation program). Mr.
Kratz's election for 2002, resulted in a total of 105,000 shares being
granted during 2002 (none of which related to bonus earned under the 2002
annual incentive compensation program).
For 2003, Mr. Kratz has elected to take his salary and bonus (if any) in
cash, rather than receiving non-qualified stock options.
17
STOCK OPTIONS
The following table sets forth information with respect to all stock
options granted in 2002 by the Company to each of the Named Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS EXERCISE GRANT DATE
OPTIONS GRANTED TO OR BASE PRESENT
GRANTED EMPLOYEES IN PRICE EXPIRATION VALUE(2)
NAME (NUMBER) FISCAL YEAR ($/SHARE) DATE (DOLLARS)
---- ---------- ------------ --------- ---------- ----------
Owen Kratz(1).......................... 105,000 14% $21.83 2/20/08 1,342,320
Martin Ferron.......................... -0- 0% -- N/A --
S. James Nelson........................ -0- 0% -- N/A --
Johnny Edwards......................... -0- 0% -- N/A --
A. Wade Pursell........................ -0- 0% -- N/A --
---------------
(1) The six-year stock options granted in 2002 by the Company to Mr. Kratz were
in lieu of salary (see Report of the Compensation Committee) and vest
ratably over one year following the date of grant. Such stock options will,
however, become immediately exercisable in their entirety upon the
occurrence of certain events specified in the 1995 Long Term 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 2002 by the Company to Mr.
Kratz. Under the Black-Scholes option pricing model, the grant date present
value of the stock option referred to in the table was calculated to be
$12.784. The following facts and assumptions were used in making such
calculation: (a) an unadjusted exercise price of $21.83; (ii) a fair market
value of $21.83 for one share of Company Common Stock on the date of grant;
(iii) no dividend yield; (iv) a stock option term of six years; (v) a stock
volatility of 59%, based on an analysis of weekly closing stock prices of
shares the Company since going public in July, 1997 and of the Company's
peer group Common Stock for the three years preceding the date of grant; and
(vi) an assumed risk-free interest rate of 4.0%, which approximates to the
yield on a five-year treasury note on the date of grant. No other discounts
or restrictions related to vesting or the likelihood of vesting of stock
options were applied. The resulting grant date present value was multiplied
by the total number of stock options granted to Mr. Kratz to determine the
total grant date present value of such stock options granted to Mr. Kratz.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
NUMBER OF SECURITIES
UNDERLYING
UNEXERCISED OPTIONS VALUE OF UNEXERCISED
FY-END(#) IN-THE-MONEY OPTIONS AT
SHARES ACQUIRED VALUE EXERCISABLE/ FY-END ($) EXERCISABLE/
NAME ON EXERCISE(#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
---- --------------- ------------ --------------------- -----------------------
Owen Kratz................. 500,000(1) $10,075,000 385,387/14,613 $902,171/24,404
Martin R. Ferron........... -- -- 38,000/54,000 490,750/554,750
S. James Nelson............ -- -- --/-- --/--
Johnny Edwards............. -- -- --/-- --/--
A. Wade Pursell............ 25,500(2) 227,125 20,133/ 35,867 78,017/141,734
---------------
(1) Includes exercisable options to purchase an aggregate of 500,000 shares
transferred to the Joss Investments Limited Partnership, an entity of which
he is a General Partner. Mr. Kratz disclaims beneficial ownership of such
options.
(2) Includes exercisable options to purchase an aggregate of 17,500 shares
transferred to the WT Kona Redbird Limited Partnership, an entity of which
he is a General Partner. Mr. Pursell disclaims beneficial ownership of such
options.
18
SUMMARY OF EMPLOYMENT CONTRACTS
All of our Named Executive Officers have entered into employment agreements
with the Company. Each of Messrs. Ferron, Nelson and Pursell's employment
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. Mr. Kratz's contract is described
under "Report of the Compensation Committee for Fiscal Year 2002 Executive
Compensation." Mr. Edwards' contract as President of ERT is different than other
CDI contracts as it runs year-to-year and covers only salary, benefits and a
profit sharing bonus program based upon ERT's financial performance. His bonus
is based on a sliding scale percentage of up to 4% of ERT's pre-tax net income.
Each of the executive employment agreements provide, among other things,
that if we pay specific amounts, then until the later of February 28, 2005 or
the first or second anniversary date of termination of the executive's
employment with us (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 us on the date of termination of employment, so
long as we continue to make payments to such executive, including his base
salary and insurance benefits received by senior executives of the Company. We
also entered into employment agreements with the remainder of our other senior
officers substantially similar to the above agreements.
If a Named Executive Officer terminates his employment for "Good Cause" or
is terminated without cause during the two year period following a "Change of
Control," we would (a) make a lump sum payment to him of two times the sum of
the annual base salary and annual bonus paid to the officer with respect to the
most recently completed fiscal year, (b) all options held by such officer under
the CDI 1995 Long Term Incentive Plan would vest, and (c) he would continue to
receive welfare plan and other benefits for a period of two years or as long as
such plan or benefits allow. For the purposes of the employment agreements,
"Good Cause" includes both that (a) the CEO or COO shall cease employment with
us and (b) one of the following: (I) a material change in the officer's
position, authority, duties or responsibilities, (ii) changes in the office or
location at which he is based without his consent (such consent not to be
unreasonably withheld), (iii) certain breaches of the agreement. Each agreement
also provides for payments to officers as part of any "Change of Control." A
"Change of Control" for purposes of the agreements would occur if a person or
group becomes the beneficial owner, directly or indirectly, of securities of the
Company representing forty-five percent (45%) or more of the combined voting
power of the Company's then outstanding securities. The agreements provided that
if any payment to one of the covered officers will be subject to any excise tax
under Code Section 4999, a "gross-up" payment would be made to place the officer
in the same net after-tax position as would have been the case if no excise tax
had been payable.
OMNIBUS BUDGET RECONCILIATION ACT OF 1993
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.
PROPOSAL 2: AMENDMENTS TO THE 1998 EMPLOYEE STOCK PURCHASE PLAN
The Board of Directors has unanimously approved and recommends that the
shareholders approve the proposed amendments to the 1998 Employee Stock Purchase
Plan (the "Plan").
19
REASONS FOR THE PROPOSAL
The Plan was approved by the Board of Directors in November 1997, and by
the shareholders at the May 1998 Annual Meeting. 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 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").
The proposed amendments are as follows: (1) to increase the number of authorized
shares from 200,000 shares (as adjusted for stock splits) to 500,000 shares and
(2) to make conforming changes to the Plan to permit earlier participation by
new employees and to comply with applicable regulatory requirements.
SUMMARY OF THE PLAN
THE FOLLOWING IS A SUMMARY OF THE 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 "B".
ELIGIBILITY
Subject to limitations under the Code, all employees of the Company (and
its subsidiaries) shall be eligible to receive purchase rights to purchase
shares of the Company's Common Stock. Employees shall be eligible on the first
day of the immediately following January or July, as applicable, to participate
in the Plan as of that payment period (each such six-month period constituting a
"Payment Period"). For purposes of the 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 the 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.
Mr. Kratz is not eligible to participate in the Plan as he owns more than
five percent of the Company's Common Stock. Those executive officers who elect
to participate in the Plan participate on the same basis as all other employees.
Non-employee directors are not eligible to participate in the Plan.
STOCK SUBJECT TO PLAN
The aggregate number of shares that may be issued pursuant to the Plan,
subject to shareholder approval, is 500,000 shares, subject to increase or
decrease by reason of stock splits, reclassifications, stock dividends, changes
in par value, and similar matters requiring adjustment. The 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 that 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 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. 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.
20
ELECTION TO PARTICIPATE IN THE PLAN
An eligible employee may become a participant in the Plan by filling out,
signing and delivering to the Benefits Department an authorization form
("Authorization Form") provided by the Benefits Department stating the
percentage to be deducted regularly from his or her pay and authorizing the
purchase of Common Stock for him or her in each Payment Period in accordance
with the terms of the Plan. Such Authorization Form must be received by the
Benefits Department at least ten (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 for that Payment Period as
long as the Plan remains in effect. A new Authorization Form is required to be
submitted at least ten (10) days before the beginning date of the next
succeeding Payment Period, even if no changes are being made. If a new
Authorization Form is not timely received by the Benefits Department, the
employee will not participate in the next succeeding Payment Period.
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.
MAXIMUM AMOUNT OF PAYROLL DEDUCTIONS
An employee may authorize payroll deductions in any whole percentage up to
but not more than 10% of his or her regular base pay (which excludes payments
for severance pay, bonus and other special items, but includes overtime),
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 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
Upon written request by the employee to the Plan Administrator,
certificates of stock will be issued to participants, as appropriate, as soon as
practicable. Fractional shares will not be issued under the Plan. Any
accumulated payroll deductions that would have been used to purchase fractional
shares will be returned to the employee promptly without interest if the
employee ceases participation in the Plan, or carried over to the next Payment
Period if the employee continues in the Plan.
TRANSFER AND TERMINATION OF EMPLOYEE'S RIGHTS
An employee's rights under the Plan are solely for the employee and may not
be transferred or assigned to any other person. Any option granted to an
employee may be exercised only by such employee. An employee's rights under the
Plan will terminate when he or she ceases to be an employee for any reason,
including retirement, resignation, lay-off, discharge or death. A Withdrawal
Notice will be deemed to have 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 deemed to have been received from
him or her on the day the interruption occurs.
21
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") and be administered by a third party broker appointed
by the Committee (the "Plan Administrator"). The Committee will consist of not
less than three members. The interpretation and construction by the Committee in
its discretion of any provisions of the Plan or of any purchase right granted
under it shall be final unless 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 FEDERAL 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 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 a participant, gain on disposition will be treated as ordinary income
to the extent of the lesser of: (i) 15% of the fair market value of the shares
on the first day of the grant date or (ii) the excess of the fair market value
of the shares on the sale or disposition 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.
The Company is not entitled to a deduction for amounts taxed as ordinary
income or capital gain to a participant except to the extent ordinary income is
recognized by participants upon a sale or disposition of shares prior to the
expiration of the holding periods described above.
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.
22
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 Plan. Unless otherwise instructed or unless
authority to vote is withheld, the enclosed proxy will be voted FOR this
PROPOSAL 2.
EQUITY COMPENSATION PLAN INFORMATION
The table below provides information relating to the Company's equity
compensation plans as of December 31, 2002:
NUMBER OF SECURITIES
REMAINING AVAILABLE
NUMBER OF SECURITIES FOR FUTURE ISSUANCE
TO BE ISSUED UPON WEIGHTED-AVERAGE UNDER COMPENSATION
EXERCISE OF EXERCISE PRICE OF PLANS (EXCLUDING
OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, SECURITIES REFLECTED
PLAN CATEGORY WARRANTS AND RIGHTS WARRANTS AND RIGHTS IN THE FIRST COLUMN)
------------- -------------------- -------------------- --------------------
Equity compensation plans approved by
security holders....................... 2,014,133 $19.57 1,795,833
Equity compensation plans not approved by
security holders....................... -0- N/A N/A
Total.................................... 2,014,133 $19.57 1,795,833
OTHER INFORMATION
EXPENSES OF SOLICITATION
We will bear the costs of soliciting proxies, including the reimbursement
to record holders of their expenses in forwarding proxy materials to beneficial
owners. Our Directors, officers and regular employees, without extra
compensation, may solicit proxies personally or by mail, telephone, fax, telex,
telegraph or special letter.
PROPOSALS AND DIRECTOR NOMINATIONS FOR 2004 SHAREHOLDER'S MEETING
In order for a Shareholder Proposal to be considered for inclusion in our
Proxy Statement for the 2004 Annual Meeting, the written proposal must be
received by the Corporate Secretary, at our offices no later than December 18,
2003. The proposal must comply with Securities and Exchange Commission
regulations regarding the inclusion of shareholder proposals in
Company-sponsored proxy materials.
In accordance with the Company's Amended and Restated By-Laws, shareholders
entitled to vote for the election of Directors at an annual meeting of
Shareholders may nominate persons for election to the Board of Directors of the
Company if made pursuant to timely notice in writing to the Secretary of the
Company. To be timely, a Shareholder's notice shall be delivered to or mailed
and received at the principal executive offices of the Company (i) with respect
to an election to be held at the annual meeting of the Shareholders of the
Company, not less than ninety (90) days prior to the anniversary date of the
immediately preceding annual meeting of Shareholders of the Company; and (ii)
with respect to an election to be held at a special meeting of Shareholders of
the Company, not later than the close of business on the tenth (10th) day
following the date on which notice of the date of the special meeting was mailed
to Shareholders or public disclosure of the date of the special meeting was
made, whichever occurs first. Such Shareholder's notice to the Secretary shall
set forth (i) as to each person whom the Shareholder proposes to nominate for
election or re-election as a Director, all information relating to such person
that is required to be disclosed in solicitations of proxies for election of
Directors, or is otherwise required, pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (including such person's written
consent to being named in the Proxy Statement as a nominee and to serve as a
Director if elected); and (ii) as to the Shareholder giving the notice (a) the
name
23
and address, as they appear on the Company's books, of such Shareholder and (b)
the class and number of shares of voting stock of the Company which are
beneficially owned by such Shareholder.
All submissions to, or requests from, the Corporate Secretary should be
made to our principal offices at 400 N. Sam Houston Parkway, E., Suite 400,
Houston Texas 77060.
OTHER
Our 2002 Annual Report on Form 10-K/A, including financial statements, is
being sent to shareholders of record as of March 17, 2003, together with this
Proxy Statement.
Only one Proxy Statement and the accompanying Form 10-K/A are being
delivered to multiple Shareholders sharing an address unless the Company has
received contrary instructions from one or more of the Shareholders at each
address. Upon written or oral request, the Company will deliver a separate copy
of the Proxy Statement or Form 10-K/A to a Shareholder at a shared address to
which a single copy of the documents was delivered. In addition, a Shareholder
may notify the Company that such Shareholder wishes to receive a separate Annual
Report or Proxy Statement in the future and Shareholders sharing an address can
request delivery of a single copy of the Annual Report and Proxy Statement if
they are receiving multiple copies of such documents. All such requests should
be directed to the Company at 400 N. Sam Houston Parkway E., Suite 400, Houston,
Texas, 77060, Attention: Corporate Secretary (telephone number: (281) 618-0400).
THE COMPANY WILL FURNISH TO SHAREHOLDERS WITHOUT CHARGE A COPY OF ITS ANNUAL
REPORT ON FORM 10-K/A FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002, AS FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION, UPON RECEIPT OF WRITTEN REQUEST
ADDRESSED TO: CORPORATE SECRETARY, CAL DIVE INTERNATIONAL, INC., 400 N. SAM
HOUSTON PARKWAY, E. SUITE 400, HOUSTON TEXAS 77060.
The Board of Directors knows of no other matters to be presented at the
Annual Meeting. If any other business properly comes before the Annual Meeting
or any adjournment thereof, the proxies will vote on that business in accordance
with their best judgment.
By Order of the Board of Directors,
/s/ JAMES LEWIS CONNOR, III
------------------------------------
James Lewis Connor, III
Corporate Secretary
Cal Dive International, Inc.
24
EXHIBIT "A" TO PROXY STATEMENT
CAL DIVE INTERNATIONAL, INC.
AUDIT COMMITTEE CHARTER
ADOPTED BY THE BOARD OF DIRECTORS ON
FEBRUARY 17, 2003
ORGANIZATION
This charter governs the operations of the Audit Committee of Cal Dive
International, Inc. (the "Company"). The committee shall review and reassess the
charter at least annually and obtain the approval of the Board of Directors. The
committee shall be members of, and appointed by, the Board of Directors and
shall comprise at least three directors, each of whom are independent of
management and the Company. Members of the committee shall be considered
independent as long as they do not accept any consulting, advisory, or other
compensatory fee from the Company and are not an affiliated person of the
Company or its subsidiaries, and meet the independence requirements of the
NASDAQ listing standards. All committee members shall be financially literate,
and at least one member shall be a "financial expert", as defined by SEC
regulations.
PURPOSE
The Audit Committee is appointed by the Board to assist the Board in
fulfilling their oversight responsibility to the shareholders, potential
shareholders, the investment community, and others relating to (1) the integrity
of the financial statements of the Company, (2) the compliance by the Company
with legal and regulatory requirements, (3) the performance of the Company's
internal audit function and independent auditors, and (4) the independent
auditor's qualifications and independence.
The Audit Committee shall prepare the report required by the rules of the
Securities and Exchange Commission (the "Commission") to be included in the
Company's annual proxy statement.
MEETINGS
The Audit Committee shall meet as often as it determines, but not less
frequently than quarterly. The Audit Committee shall meet periodically with
management, the internal auditors and the independent auditor including meetings
with the independent auditor in separate executive sessions. The Audit Committee
may request any officer or employee of the Company; or the Company's outside
counsel or independent auditor; to attend a meeting of the Committee or to meet
with any members of, or consultants to, the Committee.
COMMITTEE AUTHORITY AND RESPONSIBILITIES
The Audit Committee shall have the sole authority to appoint or replace the
independent auditor (subject, if applicable, to shareholder ratification). The
Audit Committee shall be directly responsible for the compensation and oversight
of the work of the independent auditor (including resolution of disagreements
between management and the independent auditor regarding financial reporting)
for the purpose of preparing or issuing an audit report or related work. The
independent auditor shall report directly to the Audit Committee.
The Audit Committee shall preapprove all auditing services and permitted
non-audit services (including the fees and terms thereof) to be performed for
the Company by its independent auditor (pre-approval of up to 15% of the amount
of the revenue paid by the Company to the independent auditor during the fiscal
year in which the audit services are provided may be waived if the Company did
not realize the services constituted non-audit services and such services were
promptly reported to the Audit Committee before the end of the audit and were
approved by the Audit Committee or its designated subcommittee). The Audit
Committee may form and delegate authority to subcommittees consisting of one or
more members when appropriate, including the authority to grant pre-approvals of
audit and permitted non-audit services, provided that decisions of such
subcommittee to grant preapprovals shall be presented to the full Audit
Committee at its
25
next scheduled meeting. The Audit Committee shall not engage the independent
auditors to perform the specific non-audit services proscribed by law or
regulation. The Audit Committee shall have the authority, to the extent it deems
necessary or appropriate, to retain independent legal, accounting or other
advisors. The Company shall provide for appropriate funding, as determined by
the Audit Committee, for payment of compensation to the independent auditor for
the purpose of rendering or issuing an audit report and to any advisors employed
by the Audit Committee.
The Audit Committee shall make regular reports to the Board of Directors.
The Audit Committee shall review and reassess the adequacy of this Charter
annually and recommend any proposed changes to the Board for approval. The Audit
Committee shall annually review the Audit Committee's own performance.
The Audit Committee, to the extent it deems necessary or appropriate,
shall:
FINANCIAL STATEMENT AND DISCLOSURE MATTERS
1. Review and discuss with management and the independent auditor the
annual audited financial statements, including disclosures made in management's
discussion and analysis, and recommend to the Board whether the audited
financial statements should be included in the Company's Form 10-K.
2. Review and discuss with management and the independent auditor the
Company's quarterly financial statements, including disclosures made in
management's discussion and analysis, prior to the filing of its Form 10-Q,
including the results of the independent auditor's review of the quarterly
financial statements.
3. Discuss with management and the independent auditor significant
financial reporting issues and judgments made in connection with the preparation
of the Company's financial statements, including any significant changes in the
Company's selection or application of accounting principles, any major issues as
to the adequacy of the Company's internal controls and any special steps adopted
in light of material control deficiencies.
4. Review and discuss quarterly reports from the independent auditors on:
a. All critical accounting policies and practices to be used.
b. All alternative treatments of financial information within
generally accepted accounting principles that have been discussed with
management, ramifications of the use of such alternative disclosures and
treatments, and the treatment preferred by the independent auditor.
c. Other material written communications between the independent
auditor and management, such as any management letter or schedule of
unadjusted differences.
d. The independent auditor's judgment about the quality, not just the
acceptability, of accounting principles, the reasonableness of significant
judgments, and the clarity of disclosures in the financial statements.
5. Review and discuss with management the Company's earnings press
releases, as well as financial information and earnings guidance provided to
analysts and rating agencies. Such discussion may be done generally (consisting
of discussing the types of information to be disclosed and the types of
presentations to be made).
6. Discuss with management and the independent auditor the effect of
regulatory and accounting initiatives as well as off-balance sheet structures on
the Company's financial statements.
7. Discuss with management the Company's major financial risk exposures
and the steps management has taken to monitor and control such exposures,
including the Company's risk assessment and risk management policies.
8. Discuss with the independent auditor the matters required to be
discussed by Statement on Auditing Standards No. 61 relating to the conduct of
the audit, including any difficulties encountered in the course of the audit
work, any restrictions on the scope of activities or access to requested
information, and any significant disagreements with management.
26
9. Review disclosures made to the Audit Committee by the Company's CEO and
CFO during their certification process for the Form 10-K and Form 10-Q about any
significant deficiencies in the design or operation of internal controls or
material weaknesses therein and any fraud involving management or other
employees who have a significant role in the Company's internal controls.
OVERSIGHT OF THE COMPANY'S RELATIONSHIP WITH THE INDEPENDENT AUDITOR
10. Review and evaluate the lead partner of the independent auditor team.
11. Obtain and review a report from the independent auditor at least
annually regarding (a) the independent auditor's internal quality-control
procedures, (b) any material issues raised by the most recent internal
quality-control review, or peer review, of the firm, or by any inquiry or
investigation by governmental or professional authorities within the preceding
five years respecting one or more independent audits carried out by the firm,
(c) any steps taken to deal with any such issues, and (d) all relationships
between the independent auditor and the Company. Evaluate the qualifications,
performance and independence of the independent auditor, including considering
whether the auditor's quality controls are adequate and the provision of
permitted non-audit services is compatible with maintaining the auditor's
independence, and taking into account the opinions of management and internal
auditors. The Audit Committee shall present its conclusions with respect to the
independent auditor to the Board.
12. Ensure the rotation of the lead (or coordinating) audit partner having
primary responsibility for the audit and the audit partner responsible for
reviewing the audit as required by law.
13. Recommend to the Board policies for the Company's hiring of employees
or former employees of the independent auditor who participated in any capacity
in the audit of the Company.
14. Meet with the independent auditor prior to the audit to discuss the
planning and staffing of the audit.
OVERSIGHT OF THE COMPANY'S INTERNAL CONTROLS AND INTERNAL AUDIT FUNCTION
15. Review the appointment and replacement of the senior internal auditing
executive.
16. Review the significant reports to management prepared by the internal
auditing department and management's responses.
17. Discuss with the independent auditor and management of the internal
audit department responsibilities, budget and staffing and any recommended
changes in the planned scope of the internal audit.
18. Review management's assertion on its assessment of the effectiveness
of internal controls as of the end of the most recent fiscal year and the
independent auditors' report on management's assertion.
COMPLIANCE OVERSIGHT RESPONSIBILITIES
19. Obtain from the independent auditor assurance that Section 10A(b) of
the Exchange Act (which requires the independent auditor to report any evidence
which it uncovers of an illegal act to management and the Board of Directors,
and, in some instances, to the Securities and Exchange Commission) has not been
implicated.
20. Obtain reports from management and the Company's senior internal
auditing executive confirming that the Company and its subsidiary/foreign
affiliated entities are in conformity with applicable legal requirements and the
Company's Code of Business Conduct and Ethics. Review reports and disclosures of
insider and affiliated party transactions. Advise the Board with respect to the
Company's policies and procedures regarding compliance with applicable laws and
regulations and with the Company's Code of Business Conduct and Ethics.
21. Establish procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal accounting
controls or auditing matters, and the confidential, anonymous submission by
employees of concerns regarding questionable accounting or auditing matters.
27
22. Discuss with management and the independent auditor any correspondence
with regulators or governmental agencies and any published reports which raise
material issues regarding the Company's financial statements or accounting
policies.
23. Discuss with the Company's General Counsel legal matters that may have
a material impact on the financial statements or the Company's compliance
policies.
24. Receive corporate attorneys' reports of evidence of a material
violation of securities laws or breaches of fiduciary duty.
25. Review with management and approve all related-party transactions.
LIMITATION OF AUDIT COMMITTEE'S ROLE
While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements and disclosures
are complete and accurate and are in accordance with generally accepted
accounting principles and applicable rules and regulations. Management is
responsible for the preparation, presentation, and integrity of the Company's
financial statements and for the appropriateness of the accounting principles
and reporting policies that are used by the Company. The independent auditors
are responsible for auditing the Company's financial statements and for
reviewing the Company's unaudited interim financial statements.
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EXHIBIT "B" TO PROXY STATEMENT
CAL DIVE INTERNATIONAL, INC.
1998 EMPLOYEE STOCK PURCHASE PLAN
(AS AMENDED AND RESTATED EFFECTIVE JULY 1, 2003)
1. PURPOSE AND ADMINISTRATION
The 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. The Plan is administered by a third party
broker (the "Plan Administrator"). The local corporate benefits department
("Benefits Department") can provide contact information for the current Plan
Administrator.
2. ELIGIBILITY
All employees of the Company (or any of its designated Subsidiaries),
except employees in countries whose laws make such participation impractical,
shall be eligible to receive options under this Plan to purchase the Company's
no par common stock (the "Common Stock"). Effective as of January 1, 2002, an
employee shall be eligible on the first day of the immediately following January
or July, as applicable, to participate in the Plan for the applicable Payment
Period (each such six-month period constituting a "Payment Period"). For
purposes of this Plan, the term "employee" shall not include an employee whose
customary employment is twenty (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 that 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 Common Stock reacquired by the Company, including shares purchased in
the open market. The aggregate number of shares that may be issued pursuant to
this Plan is 500,000 shares, subject to increase or decrease by reason of stock
splits, reclassifications, stock dividends, changes in par value, and similar
matters requiring adjustment.
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
29
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 or her 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 during regular trading hours 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 or her rights to
purchase Common Stock under this Plan and any similar plans of the Company or
any parent or subsidiary corporation 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.
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 or
her 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 or her 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 or her option.
6. AUTHORIZATION FOR ENTERING PLAN
An eligible employee may become a participant in the Plan by filling out,
signing and delivering to the Benefits Department an authorization form
("Authorization Form") provided by the Benefits Department:
(a) stating the percentage to be deducted regularly from his or her
Regular Base Pay; and
(b) authorizing the purchase of Common Stock for him or her in each
Payment Period in accordance with the terms of the Plan.
Such Authorization Form must be received by the Benefits Department at
least ten (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 for that Payment Period as
long as the Plan remains in effect. A new Authorization Form is required to be
submitted at least ten (10) days before the beginning date of the next
succeeding Payment Period, even if no changes are being made. If a new
Authorization Form is not timely received by the Benefits Department, the
employee will not participate in the next succeeding Payment
30
Period. 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.
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 or her Regular Base Pay); 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. "Regular Base Pay"
includes base pay and overtime, but excludes payments for bonuses, other special
items and severance.
8. CHANGE IN PAYROLL DEDUCTIONS
Payroll deductions may be changed prior to the beginning of each Payment
Period by submitting a new Authorization Form to the Benefits Department.
9. WITHDRAWAL FROM THE PLAN
An employee may withdraw from the Plan, in whole but not in part, at any
time prior to ten (10) days before the last Business Day of each Payment Period
by delivering a "Withdrawal Notice" to the Benefits Department. The Company will
promptly refund the entire balance of such employee's payroll deductions that
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 ten
(10) days before the beginning date of the next Payment Period.
10. ISSUANCE OF STOCK/UNUSED PAYROLL DEDUCTIONS
Upon written request by the employee to the Plan Administrator,
certificates of stock will be issued to participants, as appropriate, as soon as
practicable. Fractional shares will not be issued under the Plan. Any
accumulated payroll deductions that would have been used to purchase fractional
shares will be returned to the employee promptly without interest if the
employee ceases participation in the Plan, or carried over to the next Payment
Period if the employee continues in the Plan.
11. NO TRANSFER OR ASSIGNMENT OF EMPLOYEE'S RIGHTS
An employee's rights under the Plan are solely for the employee 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 or she ceases to
be an employee for any reason, including retirement, resignation, lay-off,
discharge or death. A Withdrawal Notice will be deemed to have 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 deemed to have 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,
31
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, to give the Company prompt notice of any such
disposition of Common Stock that occurs 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.
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 governed by the Employee Benefits Committee appointed by
the Board of Directors of the Company (the "Committee") and administered by the
Plan Administrator appointed by 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, for
whatever reason, 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 purchase right 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
32
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.
19. OPTIONEES 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.
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 employees of the Company administering this Plan will be
indemnified by the Company for all expenses incurred by the director or employee
as a result of such director's or employee's administration of this Plan.
Expenses incurred as a result of gross negligence and willful misconduct are
excluded from this indemnification.
24. GOVERNING LAWS
Except to the extent superseded by the federal laws of the United States,
the laws of the State of Texas, without regard to principles of conflicts of
law, 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 amended and restated Plan shall not be effective unless approved by
the Company's stockholders within twelve (12) months before or after the date
the amendment and restatement of the Plan is adopted by the Board of Directors.
33
[CAL DIVE LOGO]
400 N. SAM HOUSTON PARKWAY E. SUITE 400
HOUSTON, TEXAS 77060-3500
PHONE: (281) 618-0400
[HOUSTON MAP]
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NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
MAY 14, 2003
AND PROXY STATEMENT
[CAL DIVE LOGO]
400 N. SAM HOUSTON PARKWAY E., SUITE 400
HOUSTON, TEXAS 77060
[Recycled Symbol] Printed on recycled paper.
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PROXY FOR COMMON STOCK
CAL DIVE INTERNATIONAL, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, having duly received the Notice of Annual Meeting of
Shareholders and the Proxy Statement, dated April 16, 2003, hereby appoints Owen
E. Kratz and James Lewis Connor, III 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 Cal Dive
International, Inc. held of record by the undersigned on March 17, 2003 at the
2003 Annual Meeting of Shareholders to be held on May 14, 2003 at 11:00 a.m. at
the Wyndham Hotel located at 12400 Greenspoint Drive, Houston, Texas 77060, and
any adjournments thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1:
1. To elect two directors of the Company to have a term expiring in 2006 and
until his successor shall be elected and duly qualified.
S. JAMES NELSON, JR. WILLIAM L. TRANSIER
You may vote on the Proposal by marking one of the following boxes.
FOR the two "Class II" nominees [ ] WITHHOLD AUTHORITY [ ]
(except as indicated below) to vote for all nominees
INSTRUCTION: To WITHHOLD AUTHORITY to vote for any individual nominee, write
that person's name in the space provided below.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 2:
2. To approve amendments to the 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.
(Please See Reverse 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 THE CLASS III DIRECTORS INDICATED IN PROPOSAL 1 AND FOR PROPOSAL 2.
ABSTENTIONS WILL BE COUNTED TOWARD THE EXISTENCE OF A QUORUM.
DATED:
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SIGNATURE
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SIGNATURE (IF HELD JOINTLY)
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TITLE
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
CORPORATION NAME BY PRESIDENT OR OTHER
AUTHORIZED OFFICER. IF A PARTNERSHIP,
PLEASE SIGN IN PARTNERSHIP NAME BY AN
AUTHORIZED PERSON.