PERFORMANCE AWARD AGREEMENT HERCULES OFFSHORE, INC. 2014 LONG-TERM INCENTIVE PLAN

This Performance Award Agreement (this “Agreement”) is made and entered into by and between Hercules Offshore, Inc., a Delaware corporation (the “Company”), and [•] (the “Participant”) as of [•], 2015 (the “Date of Grant”).

WHEREAS, the Company has adopted the Hercules Offshore, Inc. 2014 Long-Term Incentive Plan (the “Plan”); and

WHEREAS, the Compensation Committee of the Board of Directors of the Company has determined that it is in the best interests of the Company and its shareholders to grant a Performance Award to the Participant pursuant to the Plan and the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and conditions hereafter set forth and for other good and valuable consideration, the Company and the Participant agree as follows:

1.Grant of Performance Award. The Company hereby grants to the Participant, as of the Date of Grant, a Performance Award with a target value equal to $[•], subject to the conditions and restrictions set forth herein and in the Plan (the “Performance Award”). The Participant hereby acknowledges receipt of a copy of the Plan, and agrees that the Performance Award granted hereunder shall be subject to all of the terms and provisions of the Plan. In the event of any conflict between (i) the terms of this Agreement (including Exhibit A) and the Plan, the Plan shall control and (ii) the terms of this Agreement (including Exhibit A) and any written employment agreement between the Participant and the Company, such employment agreement shall control. Capitalized terms used in this Agreement that are not defined herein (or in Exhibit A) shall have the meanings given to them in the Plan.

2.Earning of Performance Award.

(a)Subject to the provisions of Section 4, with respect to each Performance Period, the portion of the Performance Award that shall become earned on the Performance Certification Date with respect to such Performance Period shall be determined as follows:

(i)If the sum of (x) the Downtime Performance Earned Percentage for such Performance Period and (y) the SPP Performance Earned Percentage for such Performance Period (such sum, the “Total Earned Percentage”) is greater than or equal to 60%, then the amount of the Performance Award that shall become earned on the Performance Certification Date for such Performance Period shall be equal to the product of (x) the Cash Earned Percentage for such Performance Period (determined in accordance with the Earned Amount Chart) and (y) the target value of the Performance Award (such product, the “Earned Cash Amount”).

(ii)If the Total Earned Percentage for such Performance Period is less than 60%, then none of the Performance Award shall become earned on the Performance Certification Date for such Performance Period.

(b)Subject to Section 4, any portion of the Performance Award that becomes earned in accordance with Section 2(a) or Section 4 shall be settled in accordance with Section 3. Any portion of any Performance Award that does not become earned in accordance with Section 2(a) or Section 4 during a Performance Period shall be forfeited on the Performance Certification Date for such Performance Period.

(c)Without limiting the foregoing and unless the Performance Award has been forfeited earlier, the Committee shall certify in writing as promptly as practicable after the close of each Performance Period, whether, and the extent to which, the applicable requirements of Section 2(a) have been satisfied and the amount of the Performance Award, if any, that becomes earned with respect to such Performance Period.

3.Payment. Within 30 days following the Performance Certification Date for the final Performance Period, so long as the Participant remains continuously employed by the Company or one of its Subsidiaries through the applicable payment date, the Company shall, with respect to any portion of the Performance Award that has become earned hereunder, pay to the Participant an amount of cash equal to the Earned Cash Amount, as applicable, less applicable tax withholding pursuant to Section 7.

4.Effect of Termination of Employment. Except as otherwise provided in any written employment agreement between the Participant and the Company in effect from time to time:

(a)If the Participant incurs a Termination of Employment prior to the payment of the Performance Award, then the Performance Award shall be immediately forfeited by the Participant as of the date of such Termination of Employment and the Company shall have no further obligations hereunder.

(b)Notwithstanding any provision of Section 3 or any of the preceding provisions of this Section 4 to the contrary, the Performance Award shall be treated as follows upon the occurrence of a Change in Control, provided that the Participant is employed by the Company or one of its Subsidiaries upon the consummation of such Change in Control:

(i)If such Change in Control occurs on or after the last day of a Performance Period (determined without regard to Section 4(b)(ii)) and before the Performance Certification Date for such Performance Period, all future Performance Certification Dates shall be deemed to be changed to the date of such Change in Control.

(ii)If such Change in Control occurs before the last day of a Performance Period (determined without regard to this Section 4(b)(ii)):

(A)All Performance Periods that have not ended as of the date of such Change in Control shall be deemed to end on the date of such Change in Control; and

(B)All future Performance Certification Dates shall be deemed to be changed to the date of such Change in Control.

5.Limitation of Rights. Nothing in this Agreement or the Plan shall be construed to (a) give the Participant any right to be awarded any further cash award or any other Award in the future, even if cash awards or other Awards are granted on a regular or repeated basis, as grants of cash awards and other Awards are completely voluntary and made solely in the discretion of the Committee; (b) give the Participant or any other Person any interest in any fund or in any specified asset or assets of the Company or any Subsidiary; or (c) confer upon the Participant the right to continue in the employment of the Company or any Subsidiary, or affect the right of the Company or any Subsidiary to terminate the employment of the Participant at any time or for any reason. Neither the Participant, nor any Person claiming through the Participant, shall have

any right or interest in the Performance Award granted hereunder, unless and until all the terms, conditions and provisions of this Agreement and the Plan that affect the Participant or such other Person shall have been complied with as specified herein.

6.Successors and Assigns. This Agreement shall bind and inure to the benefit of and be enforceable by the Participant, the Company and their respective permitted successors and assigns (including personal representatives, heirs and legatees), except that the Participant may not assign any rights or obligations under this Agreement except to the extent and in the manner expressly permitted herein.

7.Tax Withholding. All amounts payable to the Participant hereunder shall be reduced by the amount the Company is required to withhold under the applicable provisions of the Internal Revenue Code of 1986, as amended (the “Code”), or its successors, or any other federal, state, local or other tax withholding requirement. When the Company is required to withhold any amount or amounts under the applicable provisions of the Code, the Company shall withhold from each payment of the Performance Award to be paid to the Participant an amount of cash necessary to satisfy the Company’s minimum withholding obligations. The Participant acknowledges and agrees that none of the Board, the Committee, the Company or any of its Affiliates have made any representation or warranty as to the tax consequences to the Participant as a result of the receipt of the Performance Award. The Participant represents that he is in no manner relying on the Board, the Committee, the Company or any of its Affiliates or any of their respective managers, directors, officers, employees or authorized representatives (including, without limitation, attorneys, accountants, consultants, bankers, lenders, prospective lenders and financial representatives) for tax advice or an assessment of such tax consequences. The Participant represents that he has consulted with any tax consultants that the Participant deems advisable in connection with the grant of the Performance Award.

8.Entire Agreement; Amendment. This Agreement and any written employment agreement between the Participant and the Company in effect from time to time constitute the entire agreement of the parties with regard to the subject matter hereof, and contain all the covenants, promises, representations, warranties and agreements between the parties with respect to the Performance Award granted hereunder. Without limiting the scope of the preceding sentence, except as provided in this Agreement and any written employment agreement between the Participant and the Company in effect from time to time, all prior understandings and agreements, if any, among the parties hereto relating to the subject matter hereof are hereby null and void and of no further force and effect. The Committee may, in its sole discretion, amend this Agreement from time to time in any manner that is not inconsistent with the Plan; provided, however, that except as otherwise provided in the Plan or this Agreement, any such amendment that materially reduces the rights of the Participant shall be effective only if it is in writing and signed by both the Participant and an authorized officer of the Company.

9.Governing Law. This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of Delaware, without regard to conflicts of law principles thereof.

10.Headings; References; Interpretation. All Section headings in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any of the provisions hereof. The words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole, including all Exhibits attached hereto, and not to any particular provision of this Agreement. All references herein to Sections and Exhibits shall, unless the context requires a different construction, be deemed to be references to the Sections of this Agreement and the Exhibits attached hereto, and all such Exhibits attached hereto are hereby incorporated herein and made a part hereof for all purposes. The use herein of the word “including” following any general statement, term or matter shall not be construed to limit such statement, term or matter to the specific items or matters

set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation”, “but not limited to”, or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter. The word “or” as used herein is not exclusive and shall be deemed to have the meaning “and/or”. Unless the context requires otherwise, all references herein to an agreement, instrument or other document shall be deemed to refer to such agreement, instrument or other document as amended, supplemented, modified and restated from time to time to the extent permitted by the provisions thereof. Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against any party hereto, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by each of the parties hereto and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of the parties hereto.

11.Section 409A. Notwithstanding any provision of this Agreement to the contrary, all payments under this Agreement are intended to be exempt from Section 409A of the Internal Revenue Code of 1986, as amended, and the applicable Treasury regulations and administrative guidance issued thereunder and this Agreement shall be construed and administered in accordance with such intent.

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by one of its officers thereunto duly authorized and the Participant, effective for all purposes as provided above.

    

    

    

By: _________________________________

John T. Rynd

Chief Executive Officer and President

    

____________________________________

[Name of Participant]

    

    

As used in this Agreement, the following terms shall have the meanings set forth below:

If the number of members of the Peer Group decreases prior to the end of a Performance Period, the Company SPP Rank shall be determined as follows: (i) the Company’s SPP shall be ranked among the SPPs of the remaining members of the Peer Group on of the last day of such Performance Period, with the highest SPP being ranked first, (ii) the rank of the Company’s SPP among the remaining members of the Peer Group on the last day of such Performance Period shall then be multiplied by a fraction, the numerator of which is 16 and the denominator of which is the number of members of the Peer Group on the last day of such Performance Period, and (iii) the number obtained in subclause (ii) shall be the Company SPP Rank on the Peer Group SPP Chart.

between the entity’s Ending Share Price and Starting Share Price, by (ii) the entity’s Starting Share Price.