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                   2000 ANNUAL INCENTIVE COMPENSATION PROGRAM

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                            COMPENSATION PHILOSOPHY

      CDI Incentive Compensation Plans are designed to align the interests of
      employees with those of Cal Dive shareholders to the maximum extent
      possible. Employees will share in the superior performance of the company
      recognizing that the shareholders are entitled to a threshold level of
      performance in exchange for base salaries. The threshold level is based
      on the Annual Budget established by management and approved by the Board
      of Directors. Incentives based upon performance above that threshold
      level can result in total cash compensation to CDI employees well above
      competitive levels for the industry.

The 2000 Incentive Compensation Program is a direct continuation of the program
established in 1993. It is designed to reward key team members for the
contribution made towards achieving the company's growth and profitability
targets. Potential bonuses under this program are limited only by the success
and cost effectiveness of our combined effort.

       o   THRESHOLD PERFORMANCE: Incentive compensation is earned when
           financial performance exceeds 90% of the 2000 Business Plan
           (versus 100% for 1999 and 80% for 1998).

       o   PARTICIPATION: Significantly expanded participation in the
           Operations pool.

       o   BONUS POOL: The bonus pool of the Operations pool is 25% in addition
           to a bonus pool for the Administrative Group.

       o   SG&A: Operations pool is increased or decreased by variances to
           budgeted SG&A expenses (as defined); i.e., Sales Department and
           administrative costs related to personnel in the Operations pool.

       o   DISCRETIONARY COMPONENT: 30% of the allocated incentive award is
           based upon discretion of Senior management and achievement of
           individual goals.

       o   SUPPORT STAFF: Each Group may use a portion of their bonus pool or
           incentives not awarded in the discretionary component to make bonus
           payments to support staff.

       o   STOCKOPTIONS: New for 2000 will be the use of stock options plus
           cash in payment of potential bonuses earned. The proposed plan
           is in keeping with the authorized 10% level allocated for
           employee stock options.

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                        GENERAL CONDITIONS TO ALL PLANS

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ELIGIBILITY FOR PARTICIPATION

           Participants must be on the payroll no later than June 30, 2000.
           Participants who are not on the payroll as of January 1, 2000, will
           have their OPPORTUNITY prorated by their months of service.

           Incentive compensation awards will be granted to those participants
           who have met the performance criteria set forth in this policy and
           who are on the payroll December 31, 2000, for incentive compensation
           under this plan. This plan is not to be construed in any way as a
           guarantee of employment or an employment contract.

METHOD OF PAYMENT

           Earned incentive compensation will be paid in cash by March 15.

CLARIFICATION/INTERPRETATION/MODIFICATION OF THE PLAN

           The Compensation Committee of the Cal Dive Board of Directors shall
           have the right and the sole authority at any time and without
           restriction to clarify, interpret and/or modify this plan.



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                          LIFE OF FIELD SERVICES GROUP
                     AQUATICA MANAGEMENT & OPERATIONS GROUP
                              MAJOR PROJECTS GROUP
                          SHALLOW WATER SERVICES GROUP
                            MARINE MANAGEMENT GROUP
                           BUSINESS DEVELOPMENT GROUP
                               SUPPLY CHAIN GROUP

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This program is for the benefit of certain personnel in the Groups listed
above, the Vice Presidents of these Groups and such other participants as
determined by the Group Vice Presidents and Executive Management.

Each eligible participant's incentive compensation OPPORTUNITY will be based on
the following:

         1.     Attaining 2000 "Subsea Division" (exclusive of ERT) gross
                profit of $32,080,100 (90% of budgeted plan) will result in an
                OPPORTUNITY equal to 10% of the eligible participants base
                salary.

         2.     Attaining 2000 "Subsea Division" (exclusive of ERT) gross
                profit of $35,644,600 will result in an additional OPPORTUNITY
                equal to 10% of the eligible participants base salary.

         3.     Variances to budgeted Subsea SG&A (as defined) will be added
                to (or deducted from) gross profit in determining 1 above.

         4.     A bonus pool will be established equal to 25% of all dollars
                of gross profit (as adjusted) in excess of $35,644,600.

The bonus pool will be divided into three tiers and will be available as an
incentive compensation OPPORTUNITY for each eligible participant in direct
proportion to the ratio of the eligible participant base salaries.

TIER GROUP DESIGNATIONS:

           Group 1   -  Select Division Heads or Vice Presidents

           Group 2   -  Personnel in direct control of:
                        o Significant direct authorization control
                          responsibility of costs, or
                        o Significant direct negotiation or contracting
                          responsibility of costs or receivables.

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           Group 3   -  Personnel in key roles of execution, operations with
                        impact to the bottom line.

           Group 4   -  Personnel in supporting roles with impact on cost
                        control.

Each participant's OPPORTUNITY will be awarded based as follows:

         1.     70% of the total opportunity will be awarded based on achieving
                the financial goals.

         2.     From 0 to 30% of the total opportunity will be awarded based on
                a subjective evaluation by Executive Management regarding the
                individual's efforts, contribution and success in achieving
                specific goals established by the Group Vice President and
                Martin Ferron. Any portion of the opportunity that is not
                awarded may be reallocated to other plan participants.

         3.     Discretionary bonuses may be paid to support staff from the
                bonus pool or incentives not awarded in the discretionary
                component.

Stock options will also be used to incentivise those personnel in Groups 1 to
3.

OPTION POOL:

       o   150,000 options per year shall be set aside for use in the incentive
           compensation plan and shall be granted on March 1, 2000.

       o   The options will be issued in lieu of a cash bonus for achieving 80%
           of budgeted gross profit, as in previous plans.

       o   Distribution of options: 6,000, 3,000 and 1,000 options will be
           distributed to each person in Groups 1, 2 and 3 respectively.

       o   All options awarded to vest over three (3) years.

       o   Exercise price to be the market price on March 1, 2000.

The gross profit goal reflects management's assessment of revenue producing
assets on hand or expected to be acquired at the time the Business Plan is
prepared. The goal shall NOT be adjusted should any of these assets be sold or
not acquired subsequent to the Business Plan being approved by the board of
Directors. However, if the company subsequently purchases or otherwise acquires
new assets with the expectation of increasing the gross profit of the Subsea
Division, the gross profit levels will be adjusted to allow for a reasonable
return to the company. This adjustment will be based on the economics presented
to the Board of Directors as justification for the new equipment or service
(the approved AFE) and will be prorated for months in service. In addition, the

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gross profit goal established in the approved Budget is NOT to be adjusted for
changes in accounting policy made during a fiscal year.


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                              EXECUTIVE MANAGEMENT
                 ACCOUNTING, ADMINISTRATIVE & SAFETY PERSONNEL

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This program is for the benefit of certain members of executive management and
corporate accounting and administrative personnel.

Each eligible participant's incentive compensation opportunity will be based
upon the following:

         1.     Attaining the consolidated net income of $20,162,000 as
                budgeted in the 2000 Business Plan before consideration of
                bonuses paid under the Operations Group Plan.

         2.     Attaining consolidated net income above a "threshold" level
                (80% of Budget) and up to targeted net income (110% of Budget)
                will result in an opportunity equal to a specified percentage
                of base salary.

         3.     A bonus pool will be established based upon (a) 4% of the first
                $2 million of net income in excess of targeted net income, plus
                (b) 6% of any consolidated net income in excess of targeted net
                income plus $2 million.

The bonus pool will be available for each eligible participant in direct
proportion to the ratio of eligible participant base salaries. Each
participant's opportunity will be awarded based as follows:

         1.     70% of the total opportunity will be awarded based upon
                achieving financial goals.

         2.     From 0 to 30% of the total opportunity will be awarded based
                upon a subjective evaluation by the Compensation Committee and
                Executive management regarding the individual's efforts,
                contribution and success in achieving specific goals
                established by the Group Vice President and Board of Directors.
                Any portion of the opportunity that is not awarded may be
                reallocated to other participants.

         3.     Discretionary bonuses may be paid to support staff from the
                bonus pool or incentives not awarded in the discretionary
                component.

If the company purchases or otherwise acquires new assets with the expectation
of increasing the net income of the Subsea Division, consolidated net income
will be adjusted to allow for a reasonable return to the company. This
adjustment will be based on the economics presented to the Board of Directors
for justification for the new equipment or service (the approved AFE) and will
be prorated for months in service.


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