Document:

exv10w16

Exhibit 10.16

2008 RESTRICTED STOCK AGREEMENT FOR EMPLOYEES

AND CONSULTANTS

HERCULES OFFSHORE

2004 LONG-TERM INCENTIVE PLAN

          This Restricted Stock Agreement (the “Agreement”) is made and entered into by and between
Hercules Offshore, Inc., a Delaware corporation (the “Company”), and (Executive Name) (the
“Participant”) as of (Date) (the “Date of Grant”).

W I T N E S S E T H

          WHEREAS, the Company has adopted the Amended and Restated Hercules Offshore 2004 Long-Term
Incentive Plan (the “Plan”) to strengthen the ability of the Company to attract, motivate and
retain Employees, Outside Directors and Consultants who possess superior capabilities and to
encourage such persons to have a proprietary interest in the Company; and

          WHEREAS, the Compensation Committee of the Board of Directors of Hercules Offshore, Inc.
believes that the grant of Restricted Stock to the Participant as described herein is consistent
with the stated purposes for which the Plan was adopted; and

          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. Restricted Stock. In order to encourage the Participant’s contribution to the successful
performance of the Company, and in consideration of the covenants and promises of the Participant
herein contained, the Company hereby grants to the Participant as of the Date of Grant, an Award of
(No. Shares) shares of Common Stock, subject to the conditions and restrictions set forth below and
in the Plan (the “Restricted Stock”).

     2. Restrictions on Transfer Before Vesting.

	 	(a)	 	The Restricted Stock will be transferred of record to the
Participant and a certificate or certificates representing said Restricted
Stock will be issued in the name of the Participant immediately upon the
execution of this Agreement. Each of such Restricted Stock certificates will
bear a legend as provided by the Company, conspicuously referring to the terms,
conditions and restrictions as permitted under Section 6(c) of the Plan. The
Company may either deliver such Restricted Stock certificate(s) to the
Participant, retain custody of such Restricted Stock certificate(s) prior to
vesting (the “Restriction Period”) or require the Participant to enter into an
escrow arrangement under which such Restricted Stock certificate(s) will be
held by an escrow agent. The delivery of any shares of Restricted Stock
pursuant to this Agreement is subject to the provisions of Paragraph 8 below.
	 
	 	(b)	 	Absent prior written consent of the Committee, the shares of
Restricted Stock granted hereunder to the Participant may not be sold,
assigned, transferred, pledged or otherwise encumbered, whether voluntarily or
involuntarily, by operation of law or otherwise, from the Date of Grant until
said shares shall have become vested in the Participant over the three-year
period following the Date of

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	 	 	 	Grant in accordance with the following table, or as otherwise provided in
Paragraph 3:

	 	 	 	 	 
	Date	 	 	 	Aggregate Percentage of Shares of Restricted Stock Granted herein which are Vested
	                    
	 	 

	 	100%

	 	(c)	 	Consistent with the foregoing, except as contemplated by
Paragraph 5, no right or benefit under this Agreement shall be subject to
transfer, anticipation, alienation, sale, assignment, pledge, encumbrance or
charge, whether voluntary, involuntary, by operation of law or otherwise, and
any attempt to transfer, anticipate, alienate, sell, assign, pledge, encumber
or charge the same shall be void. No right or benefit hereunder shall in any
manner be liable for or subject to any debts, contracts, liabilities or torts
of the person entitled to such benefits. If the Participant or his Beneficiary
hereunder shall become bankrupt or attempt to transfer, anticipate, alienate,
assign, sell, pledge, encumber or charge any right or benefit hereunder, other
than as contemplated by Paragraph 5, or if any creditor shall attempt to
subject the same to a writ of garnishment, attachment, execution,
sequestration, or any other form of process or involuntary lien or seizure,
then such right or benefit shall cease and terminate.

     3. Effect of Termination of Employment or Services.

	 	(a)	 	The Restricted Stock granted pursuant to this Agreement shall
vest in accordance with the vesting schedule reflected in Paragraph 2(b) above,
as long as the Participant remains employed by or continues to provide services
to the Company or a Subsidiary. If, however, either:

	 	(i)	 	the Company and its Subsidiaries terminate the
Participant’s employment (or if the Participant is not an Employee,
determine that the Participant’s services are no longer needed), or
	 
	 	(ii)	 	the Participant terminates employment (or if
the Participant is not an Employee, ceases to perform services for the
Company and its Subsidiaries),

	 	 	 	then the shares of Restricted Stock that have not previously vested in
accordance with the vesting schedule reflected in Paragraph 2(b) above, as
of the date of such termination of employment (or cessation of services, as
applicable), shall be forfeited by the Participant to the Company.
	 
	 	(b)	 	Notwithstanding Paragraph 3(a) above, upon the cessation of the
Participant’s employment or services (whether voluntary or involuntary), the
Committee may, in its sole and absolute discretion, elect to accelerate the
vesting of some or all of the unvested shares of Restricted Stock.

     4. 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
restricted stock or any other Award in the future, even if restricted stock or
other Awards are granted on

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	 	 	 	a regular or repeated basis, as grants of restricted stock 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 or service of the Company or any Subsidiary, or affect the right of
the Company or any Subsidiary to terminate the employment or service of the
Participant at any time or for any reason.

     5. Prerequisites to Benefits. Neither the Participant, nor any person claiming through the
Participant, shall have any right or interest in the Restricted Stock awarded hereunder, unless and
until all the terms, conditions and provisions of this Agreement and the Plan which affect the
Participant or such other person shall have been complied with as specified herein.

     6. Rights as a Stockholder. Subject to the limitations and restrictions contained herein, the
Participant (or Beneficiary) shall have all rights as a stockholder with respect to the shares of
Restricted Stock, including the right to vote and receive dividends; provided, however, that any
dividends attributable to shares of Restricted Stock that have not otherwise vested shall be
subject to the same restrictions as the shares of Restricted Stock to which they related until such
restrictions lapse.

     7. 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.

     8. Securities Act. The Company will not be required to deliver any shares of Common Stock pursuant
to this Agreement if, in the opinion of counsel for the Company, such issuance would violate the
Securities Act of 1933, as amended (the “Securities Act”) or any other applicable federal or state
securities laws or regulations. The Committee may require that the Participant, prior to the
issuance of any such shares, sign and deliver to the Company a written statement, which shall be in
a form and contain content acceptable to the Committee, in its sole discretion (“Investment
Letter”):

	 	(a)	 	stating that the Participant is acquiring the shares for
investment and not with a view to the sale or distribution thereof;
	 
	 	(b)	 	stating that the Participant will not sell any shares of Common
Stock that the Participant may then own or thereafter acquire except either:

	 	(i)	 	through a broker on a national securities
exchange or
	 
	 	(ii)	 	with the prior written approval of the Company;
and

	 	(c)	 	containing such other terms and conditions as counsel for the
Company may reasonably require to assure compliance with the Securities Act or
other applicable federal or state securities laws and regulations.

     9. Federal and State Taxes.

	 	(a)	 	Any amount of Common Stock that is payable or transferable to
the Participant hereunder may be subject to the payment of or reduced by any
amount or

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	 	 	 	amounts which the Company is required to withhold under the then applicable
provisions of the Internal Revenue Code of 1986, as amended (the “Code”), or
its successors, or any other federal, state or local 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
the Common Stock to be issued to the Participant a number of shares
necessary to satisfy the Company’s withholding obligations. The number of shares of Common Stock to be withheld shall be based upon the Fair Market
Value of the shares on the date of withholding.
	 
	 	(b)	 	Notwithstanding Paragraph 9(a) above, if the Participant
elects, and the Committee agrees, the Company’s withholding obligations may
instead be satisfied as follows:

	 	(i)	 	the Participant may direct the Company to
withhold cash that is otherwise payable to the Participant;
	 
	 	(ii)	 	the Participant may deliver to the Company a
sufficient number of shares of Common Stock then owned by the
Participant to satisfy the Company’s withholding obligations, based on
the Fair Market Value of the shares as of the date of withholding;
	 
	 	(iii)	 	the Participant may deliver sufficient cash to
the Company to satisfy its withholding obligations; or
	 
	 	(iv)	 	any combination of the alternatives described
in Paragraphs 9(b)(i) through 9(b)(iii) above.

	 	(c)	 	Authorization of the Participant to the Company to withhold
taxes pursuant to one or more of the alternatives described in Paragraph 9(b)
above must be in a form and content acceptable to the Committee. The payment
or authorization to withhold taxes by the Participant shall be completed prior
to the delivery of any shares pursuant to this Agreement. An authorization to
withhold taxes pursuant to this provision will be irrevocable unless and until
the tax liability of the Participant has been fully paid.

     10. Governing Law. This Award Agreement shall be governed by, construed and enforced in accordance
with the laws of the State of Delaware.

     11. Definitions. All capitalized terms in this Agreement shall have the meanings ascribed to them
in the Plan unless otherwise defined in this Award Agreement.

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     IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its officers
thereunto duly authorized, and the Participant has hereunto set his hand as of the day and year
first above written.

	 	 	 	 	 
	 	HERCULES OFFSHORE, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	Senior Vice President, General Counsel,
Chief Compliance Officer and Secretary
	 	 	Date:  	____________________ 	 
	 
	 	PARTICIPANT

 	 
	 	Name:  	 	 
	 	 	Name:  	(Executive Name) 	 
	 	 	Date:  	____________________ 	 
	 

5exv10w18

Exhibit 10.18

Hercules Offshore, Inc.

Deferred Compensation Plan

Amended and Restated Effective January 1, 2007

 

 

Hercules Offshore, Inc.

Deferred Compensation Plan

Amended and Restated Effective January 1, 2007

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE I.
	 	DEFINITIONS	 	 	1	 
	ARTICLE II.
	 	SELECTION, ENROLLMENT, ELIGIBILITY	 	 	8	 
	2.1
	 	Selection by Committee	 	 	8	 
	2.2
	 	Enrollment and Eligibility Requirements; Commencement of Participation	 	 	8	 
	ARTICLE III.
	 	DEFERRAL COMMITMENTS/COMPANY CONTRIBUTION AMOUNTS/	 	 	 	 
	 
	 	COMPANY RESTORATION AMOUNTS/VESTING/CREDITING/TAXES	 	 	9	 
	3.1
	 	Maximum Deferral	 	 	9	 
	3.2
	 	Timing of Deferral Elections; Effect of Election Form	 	 	9	 
	3.3
	 	Withholding and Crediting of Annual Deferral Amounts	 	 	11	 
	3.4
	 	Company Contribution Amount	 	 	11	 
	3.5
	 	Company Restoration Amount	 	 	12	 
	3.6
	 	Vesting	 	 	12	 
	3.7
	 	Crediting/Debiting of Account Balances	 	 	13	 
	3.8
	 	FICA and Other Taxes	 	 	14	 
	ARTICLE IV.
	 	SCHEDULED DISTRIBUTION; UNFORESEEABLE EMERGENCIES	 	 	15	 
	4.1
	 	Scheduled Distributions	 	 	15	 
	4.2
	 	Postponing Scheduled Distributions	 	 	15	 
	4.3
	 	Other Benefits Take Precedence Over Scheduled Distributions	 	 	16	 
	4.4
	 	Unforeseeable Emergencies	 	 	16	 
	ARTICLE V.
	 	CHANGE IN CONTROL BENEFIT	 	 	17	 
	5.1
	 	Change in Control Benefit	 	 	17	 
	5.2
	 	Payment of Change in Control Benefit	 	 	17	 
	ARTICLE VI.
	 	RETIREMENT BENEFIT	 	 	17	 
	6.1
	 	Retirement Benefit	 	 	18	 
	6.2
	 	Payment of Retirement Benefit	 	 	18	 
	ARTICLE VII.
	 	TERMINATION BENEFIT	 	 	18	 
	7.1
	 	Termination Benefit	 	 	18	 
	7.2
	 	Payment of Termination Benefit	 	 	19	 

 

 

Hercules Offshore, Inc.

Deferred Compensation Plan

Amended and Restated Effective January 1, 2007

 

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE VIII.
	 	DISABILITY BENEFIT	 	 	19	 
	8.1
	 	Disability Benefit	 	 	19	 
	8.2
	 	Payment of Disability Benefit	 	 	19	 
	ARTICLE IX.
	 	DEATH BENEFIT	 	 	19	 
	9.1
	 	Death Benefit	 	 	19	 
	9.2
	 	Payment of Death Benefit	 	 	20	 
	ARTICLE X.
	 	BENEFICIARY DESIGNATION	 	 	20	 
	10.1
	 	Beneficiary	 	 	20	 
	10.2
	 	Beneficiary Designation; Change; Spousal Consent	 	 	20	 
	10.3
	 	Acknowledgment	 	 	20	 
	10.4
	 	No Beneficiary Designation	 	 	20	 
	10.5
	 	Doubt as to Beneficiary	 	 	20	 
	10.6
	 	Discharge of Obligations	 	 	20	 
	ARTICLE XI.
	 	LEAVE OF ABSENCE	 	 	21	 
	11.1
	 	Paid Leave of Absence	 	 	21	 
	11.2
	 	Unpaid Leave of Absence	 	 	21	 
	ARTICLE XII.
	 	TERMINATION OF PLAN, AMENDMENT OR MODIFICATION	 	 	21	 
	12.1
	 	Termination of Plan	 	 	21	 
	12.2
	 	Amendment	 	 	22	 
	12.3
	 	Plan Agreement	 	 	22	 
	12.4
	 	Effect of Payment	 	 	22	 
	ARTICLE XIII.
	 	ADMINISTRATION	 	 	22	 
	13.1
	 	Committee Duties	 	 	22	 
	13.2
	 	Administration Upon Change In Control	 	 	22	 
	13.3
	 	Agents	 	 	23	 
	13.4
	 	Binding Effect of Decisions	 	 	23	 
	13.5
	 	Indemnity of Committee	 	 	23	 
	13.6
	 	Employer Information	 	 	23	 
	ARTICLE XIV.
	 	OTHER BENEFITS AND AGREEMENTS	 	 	23	 
	14.1
	 	Coordination with Other Benefits	 	 	23	 

 

 

Hercules Offshore, Inc.

Deferred Compensation Plan

Amended and Restated Effective January 1, 2007

 

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE XV.
	 	CLAIMS PROCEDURES	 	 	23	 
	15.1
	 	Presentation of Claim	 	 	23	 
	15.2
	 	Notification of Decision	 	 	24	 
	15.3
	 	Review of a Denied Claim	 	 	24	 
	15.4
	 	Decision on Review	 	 	24	 
	15.5
	 	Legal Action	 	 	25	 
	ARTICLE XVI.
	 	TRUST	 	 	25	 
	16.1
	 	Establishment of the Trust	 	 	25	 
	16.2
	 	Interrelationship of the Plan and the Trust	 	 	25	 
	16.3
	 	Distributions From the Trust	 	 	25	 
	ARTICLE XVII.
	 	MISCELLANEOUS	 	 	26	 
	17.1
	 	Status of Plan	 	 	26	 
	17.2
	 	Unsecured General Creditor	 	 	26	 
	17.3
	 	Employer's Liability	 	 	26	 
	17.4
	 	Nonassignability	 	 	26	 
	17.5
	 	Not a Contract of Employment	 	 	26	 
	17.6
	 	Furnishing Information	 	 	26	 
	17.7
	 	Terms	 	 	27	 
	17.8
	 	Captions	 	 	27	 
	17.9
	 	Governing Law	 	 	27	 
	17.10
	 	Notice	 	 	27	 
	17.11
	 	Successors	 	 	27	 
	17.12
	 	Spouse's Interest	 	 	27	 
	17.13
	 	Validity	 	 	27	 
	17.14
	 	Incompetent	 	 	27	 
	17.15
	 	Domestic Relations Orders	 	 	28	 
	17.16
	 	Distribution in the Event of Income Inclusion Under Code Section 409A	 	 	28	 
	17.17
	 	Deduction Limitation on Benefit Payments	 	 	28	 

 

 

Hercules Offshore, Inc.

Deferred Compensation Plan

Amended and Restated Effective January 1, 2007

 

Purpose

          The purpose of this Plan is to provide specified benefits to Directors and a select group of
management or highly compensated Employees who contribute materially to the continued growth,
development and future business success of Hercules Offshore, Inc., a Delaware corporation, and its
subsidiaries, if any, that sponsor this Plan. This Plan shall be unfunded for tax purposes and for
purposes of Title I of ERISA.

          This Plan is intended to comply with all applicable law, including Code Section 409A and
related Treasury guidance and Regulations, and shall be operated and interpreted in accordance with
this intention. In order to transition to the requirements of Code Section 409A and related
Treasury Regulations, the Committee may make available to Participants certain transition relief
provided under Notice 2007-86, as described more fully in Appendix A of this Plan.

ARTICLE I.

Definitions

          For the purposes of this Plan, unless otherwise clearly apparent from the context, the
following phrases or terms shall have the following indicated meanings:

	1.1	 	“Account Balance” shall mean, with respect to a Participant, an entry on the records of the
Employer equal to the sum of the Participant’s Annual Accounts. The Account Balance shall be
a bookkeeping entry only and shall be utilized solely as a device for the measurement and
determination of the amounts to be paid to a Participant, or his or her designated
Beneficiary, pursuant to this Plan.
	 
	 	 	If a Participant is both an Employee and a Director and participates in the Plan in each
capacity, then separate Account Balances (and separate Annual Accounts, if applicable) shall
be established for such Participant as a device for the measurement and determination of the
(a) amounts deferred under the Plan that are attributable to the Participant’s status as an
Employee, and (b) amounts deferred under the Plan that are attributable to the Participant’s
status as a Director.
	 
	1.2	 	“Annual Account” shall mean, with respect to a Participant, an entry on the records of the
Employer equal to (a) the sum of the Participant’s Annual Deferral Amount, Company
Contribution Amount and Company Restoration Amount for any one Plan Year, plus (b) amounts
credited or debited to such amounts pursuant to this Plan, less (c) all distributions made to
the Participant or his or her Beneficiary pursuant to this Plan that relate to the Annual
Account for such Plan Year. The Annual Account shall be a bookkeeping entry only and shall be
utilized solely as a device for the measurement and determination of the amounts to be paid to
a Participant, or his or her designated Beneficiary, pursuant to this Plan.
	 
	1.3	 	“Annual Deferral Amount” shall mean that portion of a Participant’s Base Salary, Bonus and
Director Fees that a Participant defers in accordance with Article 3 for any one Plan Year,
without regard to whether such amounts are withheld and credited during such Plan Year.

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Hercules Offshore, Inc.

Deferred Compensation Plan

Amended and Restated Effective January 1, 2007

 

	1.4	 	“Annual Installment Method” shall mean the method used to determine the amount of each
payment due to a Participant who has elected to receive a benefit over a period of years in
accordance with the applicable provisions of the Plan. The amount of each annual payment due
to the Participant shall be calculated by multiplying the balance of the Participant’s benefit
by a fraction, the numerator of which is one and the denominator of which is the remaining
number of annual payments due to the Participant. The amount of the first annual payment
shall be calculated as of the close of business on or around the Participant’s Benefit
Distribution Date, and the amount of each subsequent annual payment shall be calculated on or
around each anniversary of such Benefit Distribution Date. For purposes of this Plan, the
right to receive a benefit payment in annual installments shall be treated as the entitlement
to a single payment.
	 
	1.5	 	“Base Salary” shall mean the annual compensation relating to services performed during any
calendar year that is payable only in cash and that is designated as base salary or
compensation in the payroll records of the Employer, and, by way of further limitation,
excluding distributions and any other form of income whether or not payable in cash from
nonqualified deferred compensation plans, bonuses (including amounts that qualify as Bonus),
commissions, overtime, fringe benefits , welfare benefits, severance pay, stock options, stock
appreciation rights, phantom shares, restricted shares, other equity-based LTIP Amounts,
compensation, relocation expenses, incentive payments, non-monetary awards, director fees and
other fees, moving expenses, reimbursements and automobile and other allowances paid to a
Participant for employment services rendered (whether or not such allowances are included in
the Employee’s gross income). Base Salary shall be calculated before reduction for
compensation voluntarily deferred or contributed by the Participant pursuant to all qualified
or nonqualified plans of any Employer and shall be calculated to include amounts not otherwise
included in the Participant’s gross income under Code Sections 125, 402(e)(3), 402(h), or
403(b) pursuant to plans established by any Employer; provided, however, that all such amounts
will be included in compensation only to the extent that had there been no such plan, the
amount would have been payable in cash to the Employee.
	 
	1.6	 	“Beneficiary” shall mean one or more persons, trusts, estates or other entities, designated
in accordance with Article 10, that are entitled to receive benefits under this Plan upon the
death of a Participant.
	 
	1.7	 	“Beneficiary Designation Form” shall mean the form established from time to time by the
Committee that a Participant completes, signs and returns to the Committee to designate one or
more Beneficiaries.
	 
	1.8	 	“Benefit Distribution Date” shall mean the date upon which all or an objectively determinable
portion of a Participant’s vested benefits will become eligible for distribution. Except as
otherwise provided in the Plan, a Participant’s Benefit Distribution Date shall be determined
based on the earliest to occur of an event or scheduled date set forth in Articles 4 through
9, as applicable.
	 
	1.9	 	“Board” shall mean the board of directors of the Company.

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Hercules Offshore, Inc.

Deferred Compensation Plan

Amended and Restated Effective January 1, 2007

 

	1.10	 	“Bonus” shall mean any compensation earned by a Participant under the Hercules Offshore
Incentive Plan, also known as “HERO Bonus.”
	 
	1.11	 	“Change in Control” shall mean the occurrence of a “change in the ownership,” a “change in
the effective control” or a “change in the ownership of a substantial portion of the assets”
of a corporation, as determined in accordance with this Section.
	 
	 	 	In order for an event described below to constitute a Change in Control with respect to a
Participant, except as otherwise provided in part (b)(ii) of this Section, the applicable
event must relate to the corporation for which the Participant is providing services, the
corporation that is liable for payment of the Participant’s Account Balance (or all
corporations liable for payment if more than one), as identified by the Committee in
accordance with Treas. Reg. §1.409A-3(i)(5)(ii)(A)(2), or such other corporation identified
by the Committee in accordance with Treas. Reg. §1.409A-3(i)(5)(ii)(A)(3).
	 
	 	 	In determining whether an event shall be considered a “change in the ownership,” a “change
in the effective control” or a “change in the ownership of a substantial portion of the
assets” of a corporation, the following provisions shall apply:

	 	(a)	 	A “change in the ownership” of the applicable corporation shall occur on the
date on which any one person, or more than one person acting as a group, acquires
ownership of stock of such corporation that, together with stock held by such person or
group, constitutes more than 50% of the total fair market value or total voting power
of the stock of such corporation, as determined in accordance with Treas. Reg.
§1.409A-3(i)(5)(v). If a person or group is considered either to own more than 50% of
the total fair market value or total voting power of the stock of such corporation, or
to have effective control of such corporation within the meaning of part (b) of this
Section, and such person or group acquires additional stock of such corporation, the
acquisition of additional stock by such person or group shall not be considered to
cause a “change in the ownership” of such corporation.
	 
	 	(b)	 	A “change in the effective control” of the applicable corporation shall occur
on either of the following dates:

	 	(i)	 	The date on which any one person, or more than one person acting
as a group, acquires (or has acquired during the 12-month period ending on the
date of the most recent acquisition by such person or persons) ownership of
stock of such corporation possessing 30% or more of the total voting power of
the stock of such corporation, as determined in accordance with Treas. Reg.
§1.409A-3(i)(5)(vi). If a person or group is considered to possess 30% or more
of the total voting power of the stock of a corporation, and such person or
group acquires additional stock of such corporation, the acquisition of
additional stock by such person or group shall not be considered to cause a
“change in the effective control” of such corporation; or

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Hercules Offshore, Inc.

Deferred Compensation Plan

Amended and Restated Effective January 1, 2007

 

	 	(ii)	 	The date on which a majority of the members of the applicable
corporation’s board of directors is replaced during any 12-month period by
directors whose appointment or election is not endorsed by a majority of the
members of such corporation’s board of directors before the date of the
appointment or election, as determined in accordance with Treas. Reg.
§1.409A-3(i)(5)(vi). In determining whether the event described in the
preceding sentence has occurred, the applicable corporation to which the event
must relate shall only include a corporation identified in accordance with
Treas. Reg. §1.409A-3(i)(5)(ii) for which no other corporation is a majority
shareholder.

	 	(c)	 	A “change in the ownership of a substantial portion of the assets” of the
applicable corporation shall occur on the date on which any one person, or more than
one person acting as a group, acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such person or persons) assets
from the corporation that have a total gross fair market value equal to or more than
40% of the total gross fair market value of all of the assets of the corporation
immediately before such acquisition or acquisitions, as determined in accordance with
Treas. Reg. §1.409A-3(i)(5)(vii). A transfer of assets shall not be treated as a
“change in the ownership of a substantial portion of the assets” when such transfer is
made to an entity that is controlled by the shareholders of the transferor corporation,
as determined in accordance with Treas. Reg. §1.409A-3(i)(5)(vii)(B).

	1.12	 	“Code” shall mean the Internal Revenue Code of 1986, as it may be amended from time to time.
	 
	1.13	 	“Committee” shall mean the committee described in Article 13.
	 
	1.14	 	“Company” shall mean Hercules Offshore, Inc., a Delaware corporation, and any successor to
all or substantially all of the Company’s assets or business.
	 
	1.15	 	“Company Contribution Amount” shall mean, for any one Plan Year, the amount determined in
accordance with Section 3.4.
	 
	1.16	 	“Company Restoration Amount” shall mean, for any one Plan Year, the amount determined in
accordance with Section 3.5.
	 
	1.17	 	“Director” shall mean any member of the board of directors of any Employer.
	 
	1.18	 	“Director Fees” shall mean the annual fees earned by a Director from any Employer, including
retainer fees and meetings fees, as compensation for serving on the board of directors.
	 
	1.19	 	“Disability” or “Disabled” shall mean that a Participant is either (a) unable to engage in
any substantial gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, or (b) by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, receiving income replacement benefits for a
period of not less than 3 months under an accident and health plan covering employees of the

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	 	 	Participant’s Employer. For purposes of this Plan, a Participant shall be deemed Disabled
if determined to be totally disabled by the Social Security Administration. A Participant
shall also be deemed Disabled if determined to be disabled in accordance with the applicable
disability insurance program of such Participant’s Employer, provided that the definition of
“disability” applied under such disability insurance program complies with the requirements
of this Section.
	 
	1.20	 	“Election Form” shall mean the form, which may be in electronic format, established from time
to time by the Committee that a Participant completes, signs and returns to the Committee to
make an election under the Plan.
	 
	1.21	 	“Employee” shall mean a person who is an employee of an Employer.
	 
	1.22	 	“Employer(s)” shall be defined as follows:

	 	(a)	 	Except as otherwise provided in part (b) of this Section, the term “Employer”
shall mean the Company and/or any of its subsidiaries (now in existence or hereafter
formed or acquired) that have been selected by the Board to participate in the Plan and
have adopted the Plan as a sponsor.
	 
	 	(b)	 	For the purpose of determining whether a Participant has experienced a
Separation from Service, the term “Employer” shall mean:

	 	(i)	 	The entity for which the Participant performs services and with
respect to which the legally binding right to compensation deferred or
contributed under this Plan arises; and
	 
	 	(ii)	 	All other entities with which the entity described above would be
aggregated and treated as a single employer under Code Section 414(b)
(controlled group of corporations) and Code Section 414(c) (a group of trades or
businesses, whether or not incorporated, under common control), as applicable.
In order to identify the group of entities described in the preceding sentence,
the Committee shall use an ownership threshold of at least 50% as a substitute
for the 80% minimum ownership threshold that appears in, and otherwise must be
used when applying, the applicable provisions of (A) Code Section 1563 for
determining a controlled group of corporations under Code Section 414(b), and
(B) Treas. Reg. §1.414(c)-2 for determining the trades or businesses that are
under common control under Code Section 414(c).

	1.23	 	“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may be amended
from time to time.
	 
	1.24	 	“401(k) Plan” shall mean, with respect to an Employer, a plan qualified under Code Section
401(a) that contains a cash or deferral arrangement described in Code Section 401(k), adopted
by the Employer, as it may be amended from time to time, or any successor thereto.
	 
	1.25	 	“LTIP Amounts” shall mean compensation under the Hercules Offshore Long-Term Incentive Plan
or any other long-term incentive plan or long-term incentive arrangement of any Employer.

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	1.26	 	“Participant” shall mean any Employee or Director (a) who is selected to participate in the
Plan, (b) whose executed Plan Agreement, Election Form and Beneficiary Designation Form are
accepted by the Committee, and (c) whose Plan Agreement has not terminated.
	 
	1.27	 	“Performance-Based Compensation” shall mean compensation the entitlement to or amount of
which is contingent on the satisfaction of pre-established organizational or individual
performance criteria relating to a performance period of at least 12 consecutive months, as
determined by the Committee in accordance with Treas. Reg. §1.409A-1(e).
	 
	1.28	 	“Plan” shall mean the Hercules Offshore, Inc. Deferred Compensation Plan, which shall be
evidenced by this instrument, as it may be amended from time to time, and by any other
documents that together with this instrument define a Participant’s rights to amounts credited
to his or her Account Balance.
	 
	1.29	 	“Plan Agreement” shall mean a written agreement in the form prescribed by or acceptable to
the Committee that evidences a Participant’s agreement to the terms of the Plan and which may
establish additional terms or conditions of Plan participation for a Participant. Unless
otherwise determined by the Committee, the most recent Plan Agreement accepted with respect to
a Participant shall supersede any prior Plan Agreements for such Participant. Plan Agreements
may vary among Participants and may provide additional benefits not set forth in the Plan or
limit the benefits otherwise provided under the Plan.
	 
	1.30	 	“Plan Year” shall mean a period beginning on January 1 of each calendar year and continuing
through December 31 of such calendar year.
	 
	1.31	 	“Retirement,” “Retire(s)” or “Retired” shall mean with respect to a Participant who is an
Employee, a Separation from Service on or after the earlier of the attainment of (a) age 65 or
(b) age 55 with 10 Years of Service, and shall mean with respect to a Participant who is a
Director, a Separation from Service. If a Participant is both an Employee and a Director and
participates in the Plan in each capacity, (a) the determination of whether the Participant
qualifies for Retirement as an Employee shall be made when the Participant experiences a
Separation from Service as an Employee and such determination shall only apply to the
applicable Account Balance established in accordance with Section 1.1 for amounts deferred
under the Plan as an Employee, and (b) the determination of whether the Participant qualifies
for Retirement as a Director shall be made at the time the Participant experiences a
Separation from Service as a Director and such determination shall only apply to the
applicable Account Balance established in accordance with Section 1.1 for amounts deferred
under the Plan as a Director.
	 
	1.32	 	“Separation from Service” shall mean a termination of services provided by a Participant to
his or her Employer, whether voluntarily or involuntarily, other than by reason of death or
Disability, as determined by the Committee in accordance with Treas. Reg. §1.409A-1(h). In
determining whether a Participant has experienced a Separation from Service, the following
provisions shall apply:

	 	(a)	 	For a Participant who provides services to an Employer as an Employee, except
as otherwise provided in part (c) of this Section, a Separation from Service shall
occur when

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	 	 	 	such Participant has experienced a termination of employment with such Employer. A
Participant shall be considered to have experienced a termination of employment when
the facts and circumstances indicate that the Participant and his or her Employer
reasonably anticipate that either (i) no further services will be performed for the
Employer after a certain date, or (ii) that the level of bona fide services the
Participant will perform for the Employer after such date (whether as an Employee or
as an independent contractor) will permanently decrease to no more than 20% of the
average level of bona fide services performed by such Participant (whether as an
Employee or an independent contractor) over the immediately preceding 36-month period
(or the full period of services to the Employer if the Participant has been providing
services to the Employer less than 36 months).
	 	 	 	If a Participant is on military leave, sick leave, or other bona fide leave of
absence, the employment relationship between the Participant and the Employer shall
be treated as continuing intact, provided that the period of such leave does not
exceed 6 months, or if longer, so long as the Participant retains a right to
reemployment with the Employer under an applicable statute or by contract. If the
period of a military leave, sick leave, or other bona fide leave of absence exceeds 6
months and the Participant does not retain a right to reemployment under an
applicable statute or by contract, the employment relationship shall be considered to
be terminated for purposes of this Plan as of the first day immediately following the
end of such six-month period. In applying the provisions of this paragraph, a leave
of absence shall be considered a bona fide leave of absence only if there is a
reasonable expectation that the Participant will return to perform services for the
Employer.
	 
	 	(b)	 	For a Participant who provides services to an Employer as an independent
contractor, except as otherwise provided in part (c) of this Section, a Separation from
Service shall occur upon the expiration of the contract (or in the case of more than
one contract, all contracts) under which services are performed for such Employer,
provided that the expiration of such contract(s) is determined by the Committee to
constitute a good-faith and complete termination of the contractual relationship
between the Participant and such Employer.
	 
	 	(c)	 	For a Participant who provides services to an Employer as both an Employee and
an independent contractor, a Separation from Service generally shall not occur until
the Participant has ceased providing services for such Employer as both as an Employee
and as an independent contractor, as determined in accordance with the provisions set
forth in parts (a) and (b) of this Section, respectively. Similarly, if a Participant
either (i) ceases providing services for an Employer as an independent contractor and
begins providing services for such Employer as an Employee, or (ii) ceases providing
services for an Employer as an Employee and begins providing services for such Employer
as an independent contractor, the Participant will not be considered to have
experienced a Separation from Service until the Participant has ceased providing
services for such Employer in both capacities, as determined in accordance with the
applicable provisions set forth in parts (a) and (b) of this Section.

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	 	 	 	Notwithstanding the foregoing provisions in this part (c), if a Participant provides
services for an Employer as both an Employee and as a Director, to the extent
permitted by Treas. Reg. §1.409A-1(h)(5) the services provided by such Participant as
a Director shall not be taken into account in determining whether the Participant has
experienced a Separation from Service as an Employee, and the services provided by
such Participant as an Employee shall not be taken into account in determining
whether the Participant has experienced a Separation from Service as a Director.

	1.33	 	“Trust” shall mean one or more trusts established by the Company in accordance with Article 16.
	 
	1.34	 	“Unforeseeable Emergency” shall mean a severe financial hardship of the Participant resulting
from (a) an illness or accident of the Participant, the Participant’s spouse, the
Participant’s Beneficiary or the Participant’s dependent (as defined in Code Section 152
without regard to paragraphs (b)(1), (b)(2) and (d)(1)(b) thereof), (b) a loss of the
Participant’s property due to casualty, or (c) such other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of the
Participant, all as determined by the Committee based on the relevant facts and circumstances.
	 
	1.35	 	“Years of Plan Participation” shall mean the total number of full Plan Years a Participant
has been a Participant in the Plan prior to his or her Separation from Service (determined
without regard to whether deferral elections have been made by the Participant for any Plan
Year). A partial year shall not be treated as a full Plan Year for purposes of this
definition.
	 
	1.36	 	“Years of Service” shall mean the total number of full years in which a Participant has been
employed by one or more Employers. For purposes of this definition, a year of employment
shall be a 365 day period (or 366 day period in the case of a leap year) that, for the first
year of employment, commences on the Employee’s date of hiring and that, for any subsequent
year, commences on an anniversary of that hiring date. A partial year of employment shall not
be treated as a Year of Service.

ARTICLE II.

Selection, Enrollment, Eligibility

	2.1	 	Selection by Committee. Participation in the Plan shall be limited to Directors and, as
determined by the Committee in its sole discretion, a select group of management or highly
compensated Employees. From that group, the Committee shall select, in its sole discretion,
those individuals who may actually participate in this Plan.
	 
	2.2	 	Enrollment and Eligibility Requirements; Commencement of Participation.

	 	(a)	 	As a condition to participation, each Director or selected Employee shall
complete, execute and return to the Committee a Plan Agreement, an Election Form and a
Beneficiary Designation Form by the deadline(s) established by the Committee in
accordance with the applicable provisions of this Plan. In addition, the Committee
shall establish from time to time such other enrollment requirements as it determines,
in its sole discretion, are necessary.

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	 	(b)	 	Each Director or selected Employee who is eligible to participate in the Plan
shall commence participation in the Plan on the date that the Committee determines that
the Director or Employee has met all enrollment requirements set forth in this Plan and
required by the Committee, including returning all required documents to the Committee
within the specified time period.
	 
	 	(c)	 	If a Director or an Employee fails to meet all requirements established by the
Committee within the period required, that Director or Employee shall not be eligible
to participate in the Plan during such Plan Year.

ARTICLE III.

Deferral Commitments/Company Contribution Amounts/

Company Restoration Amounts/Vesting/Crediting/Taxes

	3.1	 	Maximum Deferral.

	 	(a)	 	Annual Deferral Amount. For each Plan Year, a Participant may elect to
defer, as his or her Annual Deferral Amount, a percentage of his or her Base Salary,
Bonus and/or Director Fees in whole percentage increments up to the following maximum
percentages for each deferral elected:

	 	 	 	 	 
	Deferral	Maximum Percentage	 
	Base Salary
	 	 	80	%
	Bonus
	 	 	100	%
	Director Fees
	 	 	100	%

	 	(b)	 	Short Plan Year. Notwithstanding the foregoing, if a Participant first
becomes a Participant after the first day of a Plan Year, then to the extent required
by Section 3.2 and Code Section 409A and related Treasury Regulations, the maximum
amount of the Participant’s Base Salary, Bonus or Director Fees that may be deferred by
the Participant for the Plan Year shall be determined by applying the percentages set
forth in Section 3.1(a) to the portion of such compensation attributable to services
performed after the date that the Participant’s deferral election is made.

	3.2	 	Timing of Deferral Elections; Effect of Election Form.

	 	(a)	 	General Timing Rule for Deferral Elections. Except as otherwise
provided in this Section 3.2, in order for a Participant to make a valid election to
defer Base Salary, Bonus and/or Director Fees, the Participant must submit an Election
Form on or before the deadline established by the Committee, which in no event shall be
later than the December 31st preceding the Plan Year in which such compensation will be
earned.
	 
	 	 	 	For example, the General Timing Rule for Deferral Elections must be irrevocable and
submitted no later than December 31, 2008 for Base Salary earned in 2009 and Bonus
earned in 2009 (but such Bonus payable in 2010).

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	 	 	 	Any deferral election made in accordance with this Section 3.2(a) shall be
irrevocable; provided, however, that if the Committee permits or requires
Participants to make a deferral election by the deadline described above for an
amount that qualifies as Performance-Based Compensation, the Committee may permit a
Participant to subsequently change his or her deferral election for such compensation
by submitting a new Election Form in accordance with Section 3.2(d) below.
	 
	 	(b)	 	Timing of Deferral Elections for Newly Eligible Plan Participants. A
Director or selected Employee who first becomes eligible to participate in the Plan on
or after the beginning of a Plan Year, as determined in accordance with Treas. Reg.
§1.409A-2(a)(7)(ii) and the “plan aggregation” rules provided in Treas. Reg.
§1.409A-1(c)(2), may be permitted to make an election to defer the portion of Base
Salary, Bonus and/or Director Fees attributable to services to be performed after such
election, provided that the Participant submits an Election Form on or before the
deadline established by the Committee, which in no event shall be later than 30 days
after the Participant first becomes eligible to participate in the Plan.
	 
	 	 	 	If a deferral election made in accordance with this Section 3.2(b) relates to
compensation earned based upon a specified performance period, the amount eligible
for deferral shall be equal to (i) the total amount of the Base Salary, Bonus or
Directors Fees, as the case may be, for the performance period, multiplied by (ii) a
fraction, the numerator of which is the number of days remaining in the service
period after the Participant’s deferral election is made, and the denominator of
which is the total number of days in the performance period.
	 
	 	 	 	Any deferral election made in accordance with this Section 3.2(b) shall become
irrevocable no later than the 30th day after the date the Director or selected
Employee becomes eligible to participate in the Plan.
	 
	 	(c)	 	Timing of Deferral Elections for Performance-Based Compensation.
Subject to the limitations described below, the Committee may determine that an
irrevocable deferral election for an amount that qualifies as Performance-Based
Compensation may be made by submitting an Election Form on or before the deadline
established by the Committee, which in no event shall be later than 6 months before the
end of the performance period.
	 
	 	 	 	In order for a Participant to be eligible to make a deferral election for
Performance-Based Compensation in accordance with the deadline established pursuant
to this Section 3.2(c), the Participant must have performed services continuously
from the later of (i) the beginning of the performance period for such compensation,
or (ii) the date upon which the performance criteria for such compensation are
established, through the date upon which the Participant makes the deferral election
for such compensation. In no event shall a deferral election submitted under this
Section 3.2(d) be permitted to apply to any amount of Performance-Based Compensation
that has become readily ascertainable.
	 
	 	(d)	 	Timing Rule for Deferral of Compensation Subject to Risk of Forfeiture.
With respect to compensation (i) to which a Participant has a legally binding right to
payment

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	 	 	 	in a subsequent year, and (ii) that is subject to a forfeiture condition requiring
the Participant’s continued services for a period of at least 12 months from the date
the Participant obtains the legally binding right, the Committee may determine that
an irrevocable deferral election for such compensation may be made by timely
delivering an Election Form to the Committee in accordance with its rules and
procedures, no later than the 30th day after the Participant obtains the legally
binding right to the compensation, provided that the election is made at least 12
months in advance of the earliest date at which the forfeiture condition could lapse,
as determined in accordance with Treas. Reg. §1.409A-2(a)(5).
	 
	 	 	 	Any deferral election(s) made in accordance with this Section 3.2(d) shall become
irrevocable no later than the 30th day after the Participant obtains the legally
binding right to the compensation subject to such deferral election(s).

	3.3	 	Withholding and Crediting of Annual Deferral Amounts. The Base Salary, Bonus and/or
Director Fees portion of the Annual Deferral Amount for each Participant shall be determined
based on the applicable percentage under the Participant’s Election Form and withheld at the
time the Base Salary, Bonus or Director Fees are or otherwise would be paid to the
Participant, whether or not this occurs during the Plan Year itself. Annual Deferral Amounts
shall be credited to the Participant’s Annual Account for such Plan Year at the time such
amounts would otherwise have been paid to the Participant.

	3.4	 	Company Contribution Amount.

	 	(a)	 	For each Plan Year, an Employer may be required to credit amounts to a
Participant’s Annual Account in accordance with employment or other agreements entered
into between the Participant and the Employer, which amounts shall be part of the
Participant’s Company Contribution Amount for that Plan Year. Such amounts shall be
credited to the Participant’s Annual Account for the applicable Plan Year on the date
or dates prescribed by such agreements.
	 
	 	(b)	 	For each Plan Year, an Employer, in its sole discretion, may, but is not
required to, credit any amount it desires to any Participant’s Annual Account under
this Plan, which amount shall be part of the Participant’s Company Contribution Amount
for that Plan Year. The amount so credited to a Participant may be smaller or larger
than the amount credited to any other Participant, and the amount credited to any
Participant for a Plan Year may be zero, even though one or more other Participants
receive a Company Contribution Amount for that Plan Year. The Company Contribution
Amount described in this Section 3.4(b), if any, shall be credited to the Participant’s
Annual Account for the applicable Plan Year on a date or dates to be determined by the
Committee.
	 
	 	(c)	 	If not otherwise specified in the Participant’s employment or other agreement
entered into between the Participant and the Employer, the amount (or the method or
formula for determining the amount) of a Participant’s Company Contribution Amount
shall be set forth in writing in one or more documents, which shall be deemed to be
incorporated into

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	 	 	 	this Plan in accordance with Section 1.28, no later than the date on which such
Company Contribution Amount is credited to the applicable Annual Account of the
Participant.

	3.5	 	Company Restoration Amount. A Participant’s Company Restoration Amount for any Plan Year
shall be that amount, if any, determined by the Committee and designated by the Committee as a
Company Restoration Amount for such Participant for that Plan year . A Company Restoration
Amount determined and declared by the Committee may be for the purpose of making up for
certain limits applicable to the 401(k) Plan or other qualified plan for such Plan Year, as
identified by the Committee, or for such other purposes as determined by the Committee in its
sole discretion. The amount, if any, so credited to a Participant under this Plan for any
Plan Year (a) may be smaller or larger than the amount credited to any other Participant, and
(b) may differ from the amount credited to such Participant in the preceding Plan Year. The
Participant’s Company Restoration Amount, if any, shall be credited to the Participant’s
Annual Account for the applicable Plan Year on a date or dates to be determined by the
Committee. The amount (or the method or formula for determining the amount) of a
Participant’s Company Restoration Amount shall be set forth in writing in one or more
documents, which shall be deemed to be incorporated into this Plan in accordance with Section
1.28, no later than the date on which such Company Restoration Amount is credited to the
applicable Annual Account of the Participant.
	 
	3.6	 	Vesting.

	 	(a)	 	A Participant shall at all times be 100% vested in the portion of his or her
Account Balance attributable to Annual Deferral Amounts, plus amounts credited or
debited on such amounts pursuant to Section 3.7.
	 
	 	(b)	 	A Participant shall be vested in the portion of his or her Account Balance
attributable to any Company Contribution Amounts, plus amounts credited or debited on
such amounts pursuant to Section 3.7, in accordance with the vesting schedule(s) set
forth in his or her Plan Agreement, employment agreement or any other agreement entered
into between the Participant and his or her Employer. If not addressed in such
agreements, a Participant shall vest in the portion of his or her Account Balance
attributable to any Company Contribution Amounts, plus amounts credited or debited on
such amounts pursuant to Section 3.7, based on the number of Years of Plan
Participation credited to the Participant following the Plan Year to which the
contribution relates in accordance with the following schedule and a new vesting
schedule shall apply to each Company Contribution Amount.

	 	 	 	 	 
	Years of Plan Participation Credited to Participant	 
	Following the Year to which Contribution Relates	 	Vested Percentage	 
	Less than 1 year
	 	 	0	%
	1 year or more, but less than 2
	 	 	25	%
	2 years or more, but less than 3
	 	 	50	%
	3 years or more, but less than 4
	 	 	75	%
	4 years or more
	 	 	100	%

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	 	(c)	 	A Participant shall at all times be 100% vested in the portion of his or her
Account Balance attributable to any Company Restoration Amounts, plus amounts credited
or debited on such amounts pursuant to Section 3.7.
	 
	 	(d)	 	Notwithstanding anything to the contrary contained in this Section 3.6, in the
event of a Change in Control, or upon a Participant’s Disability, Separation from
Service on or after qualifying for Retirement, or death prior to Separation from
Service, any amounts that are not vested in accordance with Sections 3.6(b) or 3.6(c)
above, shall immediately become 100% vested.
	 
	 	(e)	 	Notwithstanding subsection 3.6(d) above, the vesting schedules described in
Sections 3.6(b) or 3.6(c) above shall not be accelerated upon a Change in Control to
the extent that the Committee determines that such acceleration would cause the
deduction limitations of Section 280G of the Code to become effective. In the event of
such a determination, the Participant may request independent verification of the
Committee’s calculations with respect to the application of Section 280G. In such
case, the Committee must provide to the Participant within 90 days of such a request an
opinion from a nationally recognized accounting firm selected by the Participant (the
“Accounting Firm”). The opinion shall state the Accounting Firm’s opinion that any
limitation in the vested percentage hereunder is necessary to avoid the limits of
Section 280G and contain supporting calculations. The cost of such opinion shall be
paid for by the Company.
	 
	 	(f)	 	Section 3.6(e) shall not prevent the acceleration of the vesting schedules
described in Sections 3.6(b) and 3.6(c) if such Participant is entitled to a “gross-up”
payment, to eliminate the effect of the Code section 4999 excise tax, pursuant to his
or her employment agreement or other agreement entered into between such Participant
and the Employer.

	3.7	 	Crediting/Debiting of Account Balances. In accordance with, and subject to, the rules and
procedures that are established from time to time by the Committee, in its sole discretion,
amounts shall be credited or debited to a Participant’s Account Balance in accordance with the
following rules:

	 	(a)	 	Measurement Funds. The Participant may elect one or more of the
measurement funds selected by the Committee, in its sole discretion, which are based on
certain mutual funds (the “Measurement Funds”), for the purpose of crediting or
debiting additional amounts to his or her Account Balance. As necessary, the Committee
may, in its sole discretion, discontinue, substitute or add a Measurement Fund. Each
such action will take effect as of the first day of the first calendar quarter that
begins at least 30 days after the day on which the Committee gives Participants advance
written notice of such change.
	 
	 	(b)	 	Election of Measurement Funds. A Participant, in connection with his or
her initial deferral election in accordance with Section 3.2 above, shall elect, on the
Election Form,

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	 	 	 	one or more Measurement Fund(s) (as described in Section 3.7(a) above) to be used to
determine the amounts to be credited or debited to his or her Account Balance. If a
Participant does not elect any of the Measurement Funds as described in the previous
sentence, the Participant’s Account Balance shall automatically be allocated into the
lowest-risk Measurement Fund, as determined by the Committee, in its sole discretion.
The Participant may (but is not required to) elect, by submitting an Election Form
to the Committee that is accepted by the Committee, to add or delete one or more
Measurement Fund(s) to be used to determine the amounts to be credited or debited to
his or her Account Balance, or to change the portion of his or her Account Balance
allocated to each previously or newly elected Measurement Fund. If an election is
made in accordance with the previous sentence, it shall apply as of the first
business day deemed reasonably practicable by the Committee, in its sole discretion,
and shall continue thereafter for each subsequent day in which the Participant
participates in the Plan, unless changed in accordance with the previous sentence.
Notwithstanding the foregoing, the Committee, in its sole discretion, may impose
limitations on the frequency with which one or more of the Measurement Funds elected
in accordance with this Section 3.7(b) may be added or deleted by such Participant;
furthermore, the Committee, in its sole discretion, may impose limitations on the
frequency with which the Participant may change the portion of his or her Account
Balance allocated to each previously or newly elected Measurement Fund.
	 
	 	(c)	 	Proportionate Allocation. In making any election described in Section
3.7(b) above, the Participant shall specify on the Election Form, in increments of one
percent (1%), the percentage of his or her Account Balance or Measurement Fund, as
applicable, to be allocated/reallocated.
	 
	 	(d)	 	Crediting or Debiting Method. The performance of each Measurement Fund
(either positive or negative) will be determined on a daily basis based on the manner
in which such Participant’s Account Balance has been hypothetically allocated among the
Measurement Funds by the Participant.
	 
	 	(e)	 	No Actual Investment. Notwithstanding any other provision of this Plan
that may be interpreted to the contrary, the Measurement Funds are to be used for
measurement purposes only, and a Participant’s election of any such Measurement Fund,
the allocation of his or her Account Balance thereto, the calculation of additional
amounts and the crediting or debiting of such amounts to a Participant’s Account
Balance shall not be considered or construed in any manner as an actual investment of
his or her Account Balance in any such Measurement Fund. In the event that the Company
or the Trustee (as that term is defined in the Trust), in its own discretion, decides
to invest funds in any or all of the investments on which the Measurement Funds are
based, no Participant shall have any rights in or to such investments themselves.
Without limiting the foregoing, a Participant’s Account Balance shall at all times be a
bookkeeping entry only and shall not represent any investment made on his or her behalf
by the Company or the Trust; the Participant shall at all times remain an unsecured
creditor of the Company.

	3.8	 	FICA and Other Taxes.

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	 	(a)	 	Annual Deferral Amounts. For each Plan Year in which an Annual
Deferral Amount is being withheld from a Participant, the Participant’s Employer(s)
shall withhold from that portion of the Participant’s Base Salary and/or Bonus that is
not being deferred, in a manner determined by the Employer(s), the Participant’s share
of FICA and other employment taxes on such Annual Deferral Amount. If necessary, the
Committee may reduce the Annual Deferral Amount in order to comply with this Section
3.8.
	 
	 	(b)	 	Company Restoration Amounts and Company Contribution Amounts. When a
Participant becomes vested in a portion of his or her Account Balance attributable to
any Company Restoration Amounts and/or Company Contribution Amounts, the Participant’s
Employer(s) shall withhold from that portion of the Participant’s Base Salary and/or
Bonus, that is not deferred, in a manner determined by the Employer(s), the
Participant’s share of FICA and other employment taxes on such amounts. If necessary,
the Committee may reduce the vested portion of the Participant’s Company Restoration
Amount or Company Contribution Amount, as applicable, in order to comply with this
Section 3.8.
	 
	 	(c)	 	Distributions. The Participant’s Employer(s), or the trustee of the
Trust, shall withhold from any payments made to a Participant under this Plan all
federal, state and local income, employment and other taxes required to be withheld by
the Employer(s), or the trustee of the Trust, in connection with such payments, in
amounts and in a manner to be determined in the sole discretion of the Employer(s) and
the trustee of the Trust.

ARTICLE IV.

Scheduled Distribution; Unforeseeable Emergencies

	4.1	 	Scheduled Distributions. In connection with each election to defer an Annual Deferral
Amount, a Participant may elect to receive all or a portion of such Annual Deferral Amount,
plus amounts credited or debited on that amount pursuant to Section 3.7, in the form of a lump
sum payment, calculated as of the close of business on or around the Benefit Distribution Date
designated by the Participant in accordance with this Section (a “Scheduled Distribution”).
The Benefit Distribution Date for the amount subject to a Scheduled Distribution election
shall be the first day of any Plan Year designated by the Participant, which may be no sooner
than three (3) Plan Years after the end of the Plan Year to which the Participant’s deferral
election relates, unless otherwise provided on an Election Form approved by the Committee.
	 
	 	 	Subject to the other terms and conditions of this Plan, including any required six-month
delay, each Scheduled Distribution elected shall be paid out during a 60 day period
commencing immediately after the Benefit Distribution Date. By way of example, if a
Scheduled Distribution is elected for Annual Deferral Amounts that are earned in the Plan
Year commencing January 1, 2008, the earliest Benefit Distribution Date that may be
designated by a Participant would be January 1, 2012, and the Scheduled Distribution would
be paid out during the 60 day period commencing immediately after such Benefit Distribution
Date.

	4.2	 	Postponing Scheduled Distributions. A Participant may elect to postpone a Scheduled
Distribution described in Section 4.1 above, and have such amount paid out during a 60 day

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	 	 	period commencing immediately after an allowable alternative Benefit Distribution Date
designated in accordance with this Section 4.2. In order to make such an election, the
Participant must submit an Election Form to the Committee in accordance with the following
criteria:

	 	(a)	 	The election of the new Benefit Distribution Date shall have no effect until at
least 12 months after the date on which the election is made;
	 
	 	(b)	 	The new Benefit Distribution Date selected by the Participant for such
Scheduled Distribution must be the first day of a Plan Year that is no sooner than 5
years after the previously designated Benefit Distribution Date; and
	 
	 	(c)	 	The election must be made at least 12 months prior to the Participant’s
previously designated Benefit Distribution Date for such Scheduled Distribution.

	 	 	For purposes of applying the provisions of this Section 4.2, a Participant’s election to
postpone a Scheduled Distribution shall not be considered to be made until the date on which
the election becomes irrevocable. Such an election shall become irrevocable no later than
the date that is 12 months prior to the Participant’s previously designated Benefit
Distribution Date for such Scheduled Distribution.

	4.3	 	Other Benefits Take Precedence Over Scheduled Distributions. Should an event occur prior
to any Benefit Distribution Date designated for a Scheduled Distribution that would trigger a
benefit under Articles 5 through 9, as applicable, all amounts subject to a Scheduled
Distribution election shall be paid in accordance with the other applicable provisions of the
Plan and not in accordance with this Article 4.
	 
	4.4	 	Unforeseeable Emergencies.

	 	(a)	 	If a Participant experiences an Unforeseeable Emergency prior to the occurrence
of a distribution event described in Articles 5 through 9, as applicable, the
Participant may petition the Committee to receive a partial or full payout from the
Plan. The payout, if any, from the Plan shall not exceed the lesser of (i) the
Participant’s vested Account Balance, calculated as of the close of business on or
around the Benefit Distribution Date for such payout, as determined by the Committee in
accordance with provisions set forth below, or (ii) the amount necessary to satisfy the
Unforeseeable Emergency, plus amounts necessary to pay Federal, state, or local income
taxes or penalties reasonably anticipated as a result of the distribution. A
Participant shall not be eligible to receive a payout from the Plan to the extent that
the Unforeseeable Emergency is or may be relieved (A) through reimbursement or
compensation by insurance or otherwise, (B) by liquidation of the Participant’s assets,
to the extent the liquidation of such assets would not itself cause severe financial
hardship or (C) by cessation of deferrals under this Plan.
	 
	 	 	 	If the Committee, in its sole discretion, approves a Participant’s petition for
payout from the Plan, the Participant’s Benefit Distribution Date for such payout
shall be the date on which such Committee approval occurs and such payout shall be
distributed to the Participant in a lump sum no later than 60 days after such Benefit
Distribution Date. In

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	 	 	 	addition, in the event of such approval the Participant’s outstanding deferral
elections under the Plan shall be cancelled.
	 
	 	(b)	 	A Participant’s deferral elections under this Plan shall also be cancelled to
the extent the Committee determines that such action is required for the Participant to
obtain a hardship distribution from an Employer’s 401(k) Plan pursuant to Treas. Reg.
§1.401(k)-1(d)(3).

ARTICLE V.

Change In Control Benefit

	5.1	 	Change in Control Benefit. A Participant, in connection with his or her commencement of
participation in the Plan, shall have an opportunity to irrevocably elect to receive his or
her vested Account Balance in the form of a lump sum payment in the event that a Change in
Control occurs prior to the Participant’s Separation from Service, Disability or death (the
“Change in Control Benefit”). The Benefit Distribution Date for the Change in Control
Benefit, if any, shall be the date on which the Change in Control occurs.
	 
	 	 	If a Participant elects not to receive a Change in Control Benefit, or fails to make an
election in connection with his or her commencement of participation in the Plan, the
Participant’s Account Balance shall be paid in accordance with the other applicable
provisions of the Plan.
	 
	5.2	 	Payment of Change in Control Benefit. The Change in Control Benefit, if any, shall be
calculated as of the close of business on or around the Participant’s Benefit Distribution
Date, as determined by the Committee, and paid to the Participant no later than 60 days after
the Participant’s Benefit Distribution Date.

ARTICLE VI.

Retirement Benefit

	6.1	 	Retirement Benefit. If a Participant experiences a Separation from Service that
qualifies as a Retirement, the Participant shall be eligible to receive his or her vested
Account Balance in either a lump sum or annual installment payments, as elected by the
Participant in accordance with Section 6.2 (the “Retirement Benefit”). A Participant’s
Retirement Benefit shall be calculated as of the close of business on or around the applicable
Benefit Distribution Date for such benefit, which shall be the first day after the end of the
six-month period immediately following the date on which the Participant experiences such
Separation from Service if the Participant is an Employee or has any Account Balance
attributable to his or her prior status as an Employee, and for all other Participants, the
date on which the Participant experiences a Separation from Service; provided, however, if a
Participant changes the form of distribution for one or more Annual Accounts in accordance
with Section 6.2(b), the Benefit Distribution Date for the Annual Account(s) subject to such
change shall be determined in accordance with Section 6.2(b).

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	6.2	 	Payment of Retirement Benefit.

	 	(a)	 	In connection with a Participant’s election to defer an Annual Deferral Amount,
the Participant shall elect the form in which his or her Annual Account for such Plan
Year will be paid. The Participant may elect to receive each Annual Account in the
form of a lump sum or pursuant to an Annual Installment Method of 5, 10 or 15 years.
If a Participant does not make any election with respect to the payment of an Annual
Account, then the Participant shall be deemed to have elected to receive such Annual
Account as a lump sum.

	 	(b)	 	A Participant may change the form of payment for an Annual Account by
submitting an Election Form to the Committee in accordance with the following criteria:

	 	(i)	 	The election shall not take effect until at least 12 months after
the date on which the election is made;

	 	(ii)	 	The new Benefit Distribution Date for such Annual Account shall
be 5 years after the Benefit Distribution Date that would otherwise have been
applicable to such Annual Account; and

	 	(iii)	 	The election must be made at least 12 months prior to the
Benefit Distribution Date that would otherwise have been applicable to such
Annual Account.

For
purposes of applying the provisions of this Section 6.2(b), a Participant’s election to change the form of payment for an Annual Account shall not be considered
to be made until the date on which the election becomes irrevocable. Such an election shall become irrevocable no later than the date that is 12 months prior to
the Benefit Distribution Date that would otherwise have been
applicable to such Annual Account. Subject to the requirements of this Section 6.2(b), the Election Form most recently accepted by the Committee that has become effective for an Annual
Account shall govern the form of payout of such Annual Account.

The lump sum payment shall be made, or installment payments shall commence, no later than 60
days after the applicable Benefit Distribution Date. Remaining installments, if any, shall
continue in accordance with the Participant’s election for each Annual Account and shall be
paid no later than 60 days after each anniversary of the Benefit Distribution Date.

ARTICLE VII.

Termination Benefit

	 	7.1	 	Termination Benefit. If a Participant experiences a Separation from Service that does not
qualify as a Retirement, the Participant shall receive his or her vested Account Balance in
the form of a lump sum payment (the “Termination Benefit”). A Participant’s Termination
Benefit shall be calculated as of the close of business on or around the Benefit Distribution
Date for such benefit, which shall be the first day after the end of the six-month period
immediately following the date on which the Participant experiences such Separation from
Service if the Participant is

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	 	 	an Employee or has any Account Balance attributable to his or her prior status as an
Employee, and for all other Participants, the date on which the Participant experiences a
Separation from Service.

	 
	7.2	 	Payment of Termination Benefit. The Termination Benefit shall be paid to the Participant
no later than 60 days after the Participant’s Benefit Distribution Date.

ARTICLE VIII.

Disability Benefit

	8.1	 	Disability Benefit. If a Participant becomes Disabled prior to the occurrence of a
distribution event described in Articles 5 through 7, as applicable, the Participant shall
receive his or her vested Account Balance in the form of a lump sum payment or pursuant to an
Annual Installment method of up to 10 years (the “Disability Benefit”). If a Participant does
not make any election with respect to the payment of the Disability Benefit, then the
Participant shall be deemed to have elected to receive such Disability Benefit in a lump sum.
The Disability Benefit shall be calculated as of the close of business on or around the
Participant’s Benefit Distribution Date for such benefit, which shall be the date on which the
Participant becomes Disabled.

	8.2	 	Payment of Disability Benefit.

	 	(a)	 	A Participant, in connection with his or her commencement of participation in
the Plan, shall elect on an Election Form to receive the Disability Benefit in a lump
sum or pursuant to an Annual Installment Method of up to (10) years. If a Participant
does not make any election with respect to the payment of the Disability Benefit, then
the Participant shall be deemed to have elected to receive such Disability Benefit in a
lump sum.

	 	(b)	 	A Participant may change the form of payment of the Disability Benefit by
submitting an Election Form to the Committee, provided that any such change shall not
be effective until at least twelve (12) months after the date on which the election is
submitted. For purposes of this Plan, the right to receive the Disability Benefit in
installment payments shall be treated as the entitlement to a single payment.

	 	(c)	 	The lump sum payment shall be made, or installment payments shall commence, no
later than sixty (60) days after the Participant’s Benefit Distribution Date. Remaining
installments, if any, shall be paid no later than sixty (60) days after each
anniversary of the Participant’s Benefit Distribution Date.

ARTICLE IX.

Death Benefit

	9.1	 	Death Benefit. In the event of a Participant’s death prior to the complete distribution of
his or her vested Account Balance, the Participant’s Beneficiary(ies) shall receive the
Participant’s unpaid vested Account Balance in a lump sum payment (the “Death Benefit”). The
Death Benefit shall be calculated as of the close of business on or around the Benefit
Distribution Date

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	 	 	for such benefit, which shall be the date on which the Committee is provided with proof that

is satisfactory to the Committee of the Participant’s death.
	 
	9.2	 	Payment of Death Benefit. The Death Benefit shall be paid to the Participant’s
Beneficiary(ies) no later than 60 days after the Participant’s Benefit Distribution Date.

ARTICLE X.

Beneficiary Designation

	10.1	 	Beneficiary. Each Participant shall have the right, at any time, to designate his or her
Beneficiary(ies) (both primary as well as contingent) to receive any benefits payable under
the Plan to a beneficiary upon the death of a Participant. The Beneficiary designated under
this Plan may be the same as or different from the Beneficiary designation under any other
plan of an Employer in which the Participant participates.

	10.2	 	Beneficiary Designation; Change; Spousal Consent. A Participant shall designate his or her
Beneficiary by completing and signing the Beneficiary Designation Form, and returning it to
the Committee or its designated agent. A Participant shall have the right to change a
Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary
Designation Form and the Committee’s rules and procedures, as in effect from time to time. If
the Participant names someone other than his or her spouse as a Beneficiary, the Committee
may, in its sole discretion, determine that spousal consent is required to be provided in a
form designated by the Committee, executed by such Participant’s spouse and returned to the
Committee. Upon the acceptance by the Committee of a new Beneficiary Designation Form, all
Beneficiary designations previously filed shall be canceled. The Committee shall be entitled
to rely on the last Beneficiary Designation Form filed by the Participant and accepted by the
Committee prior to his or her death.

	10.3	 	Acknowledgment. No designation or change in designation of a Beneficiary shall be
effective until received and acknowledged in writing by the Committee or its designated agent.

	10.4	 	No Beneficiary Designation. If a Participant fails to designate a Beneficiary as provided
in Sections 10.1, 10.2 and 10.3 above or, if all designated Beneficiaries predecease the
Participant or die prior to complete distribution of the Participant’s benefits, then the
Participant’s designated Beneficiary shall be deemed to be his or her surviving spouse. If
the Participant has no surviving spouse, the benefits remaining under the Plan to be paid to a
Beneficiary shall be payable to the executor or personal representative of the Participant’s
estate.

	10.5	 	Doubt as to Beneficiary. If the Committee has any doubt as to the proper Beneficiary to
receive payments pursuant to this Plan, the Committee shall have the right, exercisable in its
discretion, to cause the Participant’s Employer to withhold such payments until this matter is
resolved to the Committee’s satisfaction.

	10.6	 	Discharge of Obligations. The payment of benefits under the Plan to a Beneficiary shall
fully and completely discharge all Employers and the Committee from all further obligations
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	 	 	this Plan with respect to the Participant, and that Participant’s Plan Agreement shall
terminate upon such full payment of benefits.

ARTICLE XI.

Leave Of Absence

	11.1	 	Paid Leave of Absence. If a Participant is authorized by the Participant’s Employer to
take a paid leave of absence from the employment of the Employer, and such leave of absence
does not constitute a Separation from Service, (a) the Participant shall continue to be
considered eligible for the benefits provided under the Plan, and (b) the Annual Deferral
Amount shall continue to be withheld during such paid leave of absence in accordance with
Section 3.2.

	11.2	 	Unpaid Leave of Absence. If a Participant is authorized by the Participant’s Employer to
take an unpaid leave of absence from the employment of the Employer for any reason, and such
leave of absence does not constitute a Separation from Service, such Participant shall
continue to be eligible for the benefits provided under the Plan. During the unpaid leave of
absence, the Participant shall not be allowed to make any additional deferral elections.
However, if the Participant returns to employment, the Participant may elect to defer an
Annual Deferral Amount for the Plan Year following his or her return to employment and for
every Plan Year thereafter while a Participant in the Plan, provided such deferral elections
are otherwise allowed and an Election Form is delivered to and accepted by the Committee for
each such election in accordance with Section 3.2 above.

ARTICLE XII.

Termination Of Plan, Amendment Or Modification

	12.1	 	Termination of Plan. Although each Employer anticipates that it will continue the Plan for
an indefinite period of time, there is no guarantee that any Employer will continue the Plan
or will not terminate the Plan at any time in the future. Accordingly, each Employer reserves
the right to terminate the Plan with respect to all of its Participants. In the event of a
Plan termination no new deferral elections shall be permitted for the affected Participants
and such Participants shall no longer be eligible to receive new company contributions.
However, after the Plan termination the Account Balances of such Participants shall continue
to be credited with Annual Deferral Amounts attributable to a deferral election that was in
effect prior to the Plan termination to the extent deemed necessary to comply with Code
Section 409A and related Treasury Regulations, and additional amounts shall continue to
credited or debited to such Participants’ Account Balances pursuant to Section 3.7. The
Measurement Funds available to Participants following the termination of the Plan shall be
comparable in number and type to those Measurement Funds available to Participants in the Plan
Year preceding the Plan Year in which the Plan termination is effective. In addition,
following a Plan termination, Participant Account Balances shall remain in the Plan and shall
not be distributed until such amounts become eligible for distribution in accordance with the
other applicable provisions of the Plan. Notwithstanding the preceding sentence, to the
extent permitted by Treas. Reg. §1.409A-3(j)(4)(ix), the Employer may provide that upon
termination of the Plan, all Account Balances of the Participants shall be distributed,

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	 	 	subject to and in accordance with any rules established by such Employer deemed necessary to
comply with the applicable requirements and limitations of Treas. Reg. §1.409A-3(j)(4)(ix).

	 
	12.2	 	Amendment. Any Employer may, at any time, amend or modify the Plan in whole or in part
with respect to that Employer. Notwithstanding the foregoing, (i) no amendment or
modification shall be effective to decrease the value of a Participant’s vested Account
Balance in existence at the time the amendment or modification is made, (ii) no amendment or
modification of this Section 12.2 or Section 13.2 of the Plan shall be effective unless and
until two-thirds (2/3) of Participants with an Account Balance in the Plan as of the date of
such proposed amendment or modification provide prior written consent in a time and manner
determined by the Committee.

	12.3	 	Plan Agreement. Despite the provisions of Sections 12.1, if a Participant’s Plan Agreement
contains benefits or limitations that are not in this Plan document, the Employer may only
amend or terminate such provisions with the written consent of the Participant.

	12.4	 	Effect of Payment. The full payment of the Participant’s vested Account Balance in
accordance with the applicable provisions of the Plan shall completely discharge all
obligations to a Participant and his or her designated Beneficiaries under this Plan, and the
Participant’s Plan Agreement shall terminate.

ARTICLE XIII.

Administration

	13.1	 	Committee Duties. Except as otherwise provided in this Article 13, this Plan shall be
administered by the Company’s Benefits Committee, or such other committee as the Board shall
appoint. Members of the Committee may be Participants under this Plan. The Committee shall
also have the discretion and authority to (a) make, amend, interpret, and enforce all
appropriate rules and regulations for the administration of this Plan, and (b) decide or
resolve any and all questions, including benefit entitlement determinations and
interpretations of this Plan, as may arise in connection with the Plan. Any individual
serving on the Committee who is a Participant shall not vote or act on any matter relating
solely to himself or herself. When making a determination or calculation, the Committee shall
be entitled to rely on information furnished by a Participant or the Company.

	13.2	 	Administration Upon Change In Control. Within 120 days following a Change in Control, the
individuals who comprised the Committee immediately prior to the Change in Control (whether or
not such individuals are members of the Committee following the Change in Control) may, by
written consent of the majority of such individuals, appoint an independent third party
administrator (the “Administrator”) to perform any or all of the Committee’s duties described
in Section 13.1 above, including without limitation, the power to determine any questions
arising in connection with the administration or interpretation of the Plan, and the power to
make benefit entitlement determinations. Upon and after the effective date of such
appointment, (a) the Company must pay all reasonable administrative expenses and fees of the
Administrator, and (b) the Administrator may only be terminated with the written consent of
the majority of Participants with an Account Balance in the Plan as of the date of such
proposed termination.

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	13.3	 	Agents. In the administration of this Plan, the Committee or the Administrator, as
applicable, may, from time to time, employ agents and delegate to them such administrative
duties as it sees fit (including acting through a duly appointed representative) and may from
time to time consult with counsel.
	 
	13.4	 	Binding Effect of Decisions. The decision or action of the Committee or Administrator, as
applicable, with respect to any question arising out of or in connection with the
administration, interpretation and application of the Plan and the rules and regulations
promulgated hereunder shall be final and conclusive and binding upon all persons having any
interest in the Plan.
	 
	13.5	 	Indemnity of Committee. All Employers shall indemnify and hold harmless the members of the
Committee, any Employee to whom the duties of the Committee may be delegated, and the
Administrator against any and all claims, losses, damages, expenses or liabilities arising
from any action or failure to act with respect to this Plan, except in the case of willful
misconduct by the Committee, any of its members, any such Employee or the Administrator.
	 
	13.6	 	Employer Information. To enable the Committee and/or Administrator to perform its
functions, the Company and each Employer shall supply full and timely information to the
Committee and/or Administrator, as the case may be, on all matters relating to the Plan, the
Trust, the Participants and their Beneficiaries, the Account Balances of the Participants, the
compensation of its Participants, the date and circumstances of the Separation from Service,
Disability or death of its Participants, and such other pertinent information as the Committee
or Administrator may reasonably require.

ARTICLE XIV.

Other Benefits And Agreements

	14.1	 	Coordination with Other Benefits. The benefits provided for a Participant and
Participant’s Beneficiary under the Plan are in addition to any other benefits available to
such Participant under any other plan or program for employees of the Participant’s Employer.
The Plan shall supplement and shall not supersede, modify or amend any other such plan or
program except as may otherwise be expressly provided.

ARTICLE XV.

Claims Procedures

	15.1	 	Presentation of Claim. Any Participant or Beneficiary of a deceased Participant (such
Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the
Committee a written claim for a determination with respect to the amounts distributable to
such Claimant from the Plan. If such a claim relates to the contents of a notice received by
the Claimant, the claim must be made within 60 days after such notice was received by the
Claimant. All other claims must be made within 180 days of the date on which the event that
caused the claim to arise occurred. The claim must state with particularity the determination
desired by the Claimant.

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	15.2	 	Notification of Decision. The Committee shall consider a Claimant’s claim within a
reasonable time, but no later than 90 days after receiving the claim. If the Committee
determines that special circumstances require an extension of time for processing the claim,
written notice of the extension shall be furnished to the Claimant prior to the termination of
the initial 90 day period. In no event shall such extension exceed a period of 90 days from
the end of the initial period. The extension notice shall indicate the special circumstances
requiring an extension of time and the date by which the Committee expects to render the
benefit determination. The Committee shall notify the Claimant in writing:

	 	(a)	 	that the Claimant’s requested determination has been made, and that the claim
has been allowed in full; or
	 
	 	(b)	 	that the Committee has reached a conclusion contrary, in whole or in part, to
the Claimant’s requested determination, and such notice must set forth in a manner
calculated to be understood by the Claimant:

	 	(i)	 	the specific reason(s) for the denial of the claim, or any part
of it;
	 
	 	(ii)	 	specific reference(s) to pertinent provisions of the Plan upon
which such denial was based;
	 
	 	(iii)	 	a description of any additional material or information
necessary for the Claimant to perfect the claim, and an explanation of why such
material or information is necessary;
	 
	 	(iv)	 	an explanation of the claim review procedure set forth in Section
15.3 below; and
	 
	 	(v)	 	a statement of the Claimant’s right to bring a civil action under
ERISA Section 502(a) following an adverse benefit determination on review.

	15.3	 	Review of a Denied Claim. On or before 60 days after receiving a notice from the Committee
that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s duly
authorized representative) may file with the Committee a written request for a review of the
denial of the claim. The Claimant (or the Claimant’s duly authorized representative):

	 	(a)	 	may, upon request and free of charge, have reasonable access to, and copies of,
all documents, records and other information relevant (as defined in applicable ERISA
regulations) to the claim for benefits;
	 
	 	(b)	 	may submit written comments or other documents; and/or
	 
	 	(c)	 	may request a hearing, which the Committee, in its sole discretion, may grant.

	15.4	 	Decision on Review. The Committee shall render its decision on review promptly, and no
later than 60 days after the Committee receives the Claimant’s written request for a review of
the denial of the claim. If the Committee determines that special circumstances require an
extension of time for processing the claim, written notice of the extension shall be furnished
to the

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	 	 	Claimant prior to the termination of the initial 60 day period. In no event shall such
extension exceed a period of 60 days from the end of the initial period. The extension
notice shall indicate the special circumstances requiring an extension of time and the date
by which the Committee expects to render the benefit determination. In rendering its
decision, the Committee shall take into account all comments, documents, records and other
information submitted by the Claimant relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit determination. The decision
must be written in a manner calculated to be understood by the Claimant, and it must
contain:

	 	(a)	 	specific reasons for the decision;
	 
	 	(b)	 	specific reference(s) to the pertinent Plan provisions upon which the decision
was based;
	 
	 	(c)	 	a statement that the Claimant is entitled to receive, upon request and free of
charge, reasonable access to and copies of, all documents, records and other
information relevant (as defined in applicable ERISA regulations) to the Claimant’s
claim for benefits; and
	 
	 	(d)	 	a statement of the Claimant’s right to bring a civil action under ERISA Section
502(a).

	15.5	 	Legal Action. A Claimant’s compliance with the foregoing provisions of this Article 15 is
a mandatory prerequisite to a Claimant’s right to commence any legal action with respect to
any claim for benefits under this Plan.

ARTICLE XVI.

Trust

	16.1	 	Establishment of the Trust. In order to provide assets from which to fulfill its
obligations to the Participants and their Beneficiaries under the Plan, the Company may
establish a trust by a trust agreement with a third party, the trustee, to which each Employer
may, in its discretion, contribute cash or other property, including securities issued by the
Company, to provide for the benefit payments under the Plan (the “Trust”).
	 
	16.2	 	Interrelationship of the Plan and the Trust. The provisions of the Plan and the Plan
Agreement shall govern the rights of a Participant to receive distributions pursuant to the
Plan. The provisions of the Trust shall govern the rights of the Employers, Participants and
the creditors of the Employers to the assets transferred to the Trust. Each Employer shall at
all times remain liable to carry out its obligations under the Plan.
	 
	16.3	 	Distributions From the Trust. Each Employer’s obligations under the Plan may be satisfied
with Trust assets distributed pursuant to the terms of the Trust, and any such distribution
shall reduce the Employer’s obligations under this Plan.

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ARTICLE XVII.

Miscellaneous

	17.1	 	Status of Plan. The Plan is intended to be a plan that is not qualified within the meaning
of Code Section 401(a) and that “is unfunded and is maintained by an employer primarily for
the purpose of providing deferred compensation for a select group of management or highly
compensated employees” within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1).
The Plan shall be administered and interpreted (a) to the extent possible in a manner
consistent with the intent described in the preceding sentence, and (b) in accordance with
Code Section 409A and related Treasury guidance and Regulations.

	17.2	 	Unsecured General Creditor. Participants and their Beneficiaries, heirs, successors and
assigns shall have no legal or equitable rights, interests or claims in any property or assets
of an Employer. For purposes of the payment of benefits under this Plan, any and all of an
Employer’s assets shall be, and remain, the general, unpledged unrestricted assets of the
Employer. An Employer’s obligation under the Plan shall be merely that of an unfunded and
unsecured promise to pay money in the future.

	17.3	 	Employer’s Liability. An Employer’s liability for the payment of benefits shall be defined
only by the Plan and the Plan Agreement, as entered into between the Employer and a
Participant. An Employer shall have no obligation to a Participant under the Plan except as
expressly provided in the Plan and his or her Plan Agreement.

	17.4	 	Nonassignability. Neither a Participant nor any other person shall have any right to
commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer,
hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable
hereunder, or any part thereof, which are, and all rights to which are expressly declared to
be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual
payment, be subject to seizure, attachment, garnishment or sequestration for the payment of
any debts, judgments, alimony or separate maintenance owed by a Participant or any other
person, be transferable by operation of law in the event of a Participant’s or any other
person’s bankruptcy or insolvency or be transferable to a spouse as a result of a property
settlement or otherwise.

	17.5	 	Not a Contract of Employment. The terms and conditions of this Plan shall not be deemed to
constitute a contract of employment between any Employer and the Participant. Such employment
is hereby acknowledged to be an “at will” employment relationship that can be terminated at
any time for any reason, or no reason, with or without cause, and with or without notice,
unless expressly provided in a written employment agreement. Nothing in this Plan shall be
deemed to give a Participant the right to be retained in the service of any Employer, either
as an Employee or a Director, or to interfere with the right of any Employer to discipline or
discharge the Participant at any time.

	17.6	 	Furnishing Information. A Participant or his or her Beneficiary will cooperate with the
Committee by furnishing any and all information requested by the Committee and take such other
actions as may be requested in order to facilitate the administration of the Plan and the

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	 	  	payments of benefits hereunder, including but not limited to taking such physical
examinations as the Committee may deem necessary.

	17.7	 	Terms. Whenever any words are used herein in the masculine, they shall be construed as
though they were in the feminine in all cases where they would so apply; and whenever any
words are used herein in the singular or in the plural, they shall be construed as though they
were used in the plural or the singular, as the case may be, in all cases where they would so
apply.

	17.8	 	Captions. The captions of the articles, sections and paragraphs of this Plan are for
convenience only and shall not control or affect the meaning or construction of any of its
provisions.

	17.9	 	Governing Law. Subject to ERISA, the provisions of this Plan shall be construed and
interpreted according to the internal laws of the State of Texas without regard to its
conflicts of laws principles.

	17.10	 	Notice. Any notice or filing required or permitted to be given to the Committee under this
Plan shall be sufficient if in writing and hand-delivered, or sent by registered or certified
mail, to the address below:

Hercules Offshore, Inc.

Attn: General Counsel

9 Greenway Plaza, Suite 2200

Houston, Texas 77046

Such notice shall be deemed given as of the date of delivery or, if delivery is made by
mail, as of the date shown on the postmark on the receipt for registration or certification.

Any notice or filing required or permitted to be given to a Participant under this Plan
shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known
address of the Participant.

	17.11	 	Successors. The provisions of this Plan shall bind and inure to the benefit of the
Participant’s Employer and its successors and assigns and the Participant and the
Participant’s designated Beneficiaries.

	17.12	 	Spouse’s Interest. The interest in the benefits hereunder of a spouse of a Participant who
has predeceased the Participant shall automatically pass to the Participant and shall not be
transferable by such spouse in any manner, including but not limited to such spouse’s will,
nor shall such interest pass under the laws of intestate succession.

	17.13	 	Validity. In case any provision of this Plan shall be illegal or invalid for any reason,
said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall
be construed and enforced as if such illegal or invalid provision had never been inserted
herein.

	17.14	 	Incompetent. If the Committee determines in its discretion that a benefit under this Plan
is to be paid to a minor, a person declared incompetent or to a person incapable of handling
the disposition of that person’s property, the Committee may direct payment of such benefit to
the

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	 	 	guardian, legal representative or person having the care and custody of such minor,
incompetent or incapable person. The Committee may require proof of minority, incompetence,
incapacity or guardianship, as it may deem appropriate prior to distribution of the benefit.
Any payment of a benefit shall be a payment for the account of the Participant and the
Participant’s Beneficiary, as the case may be, and shall be a complete discharge of any
liability under the Plan for such payment amount.

	17.15	 	Domestic Relations Orders. If necessary to comply with a domestic relations order, as
defined in Code Section 414(p)(1)(B), pursuant to which a court has determined that a spouse
or former spouse of a Participant has an interest in the Participant’s benefits under the
Plan, the Committee shall have the right to immediately distribute the spouse’s or former
spouse’s interest in the Participant’s benefits under the Plan to such spouse or former
spouse.

	17.16	 	Distribution in the Event of Income Inclusion Under Code Section 409A. If any portion of a
Participant’s Account Balance under this Plan is required to be included in income by the
Participant prior to receipt due to a failure of this Plan to comply with the requirements of
Code Section 409A and related Treasury Regulations, the Committee may determine that such
Participant shall receive a distribution from the Plan in an amount equal to the lesser of (i)
the portion of his or her Account Balance required to be included in income as a result of the
failure of the Plan to comply with the requirements of Code Section 409A and related Treasury
Regulations, or (ii) the unpaid vested Account Balance.

	17.17	 	Deduction Limitation on Benefit Payments. If an Employer reasonably anticipates that the
Employer’s deduction with respect to any distribution from this Plan would be limited or
eliminated by application of Code Section 162(m), then to the extent permitted by Treas. Reg.
§1.409A-2(b)(7)(i), payment shall be delayed as deemed necessary to ensure that the entire
amount of any distribution from this Plan is deductible. Any amounts for which distribution
is delayed pursuant to this Section shall continue to be credited/debited with additional
amounts in accordance with Section 3.7. The delayed amounts (and any amounts credited
thereon) shall be distributed to the Participant (or his or her Beneficiary in the event of
the Participant’s death) at the earliest date the Employer reasonably anticipates that the
deduction of the payment of the amount will not be limited or eliminated by application of
Code Section 162(m). In the event that such date is determined to be after a Participant’s
Separation from Service and the Participant to whom the payment relates is an Employee or has
any Account Balance attributable to his or her prior status as an Employee, then to the extent
deemed necessary to comply with Treas. Reg. §1.409A-3(i)(2), the delayed payment shall be made
on the first day after the end of the six-month period following such Participant’s Separation
from Service.

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IN WITNESS WHEREOF, the Company has signed this Plan document effective as of January 1, 2007.

	 	 	 	 	 
	 	“Company”

Hercules Offshore, Inc., a Delaware corporation

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	Title: 	Senior Vice President, General Counsel, 	 
	 	 	Chief Compliance Officer and Secretary 	 

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APPENDIX A

LIMITED TRANSITION RELIEF FOR DISTRIBUTION ELECTIONS MADE AVAILABLE IN ACCORDANCE WITH NOTICE

2007-86

The capitalized terms below shall have the same meaning as provided in Article 1 of the Plan.

Opportunity to Make New (or Revise Existing) Distribution Elections. Notwithstanding the
required deadline for the submission of an initial distribution election under Articles 4, 5, 6 and
8 of the Plan, the Committee may, to the extent permitted by Notice 2007-86, provide a limited
period in which Participants may make new distribution elections, or revise existing distribution
elections, with respect to amounts subject to the terms of the Plan, by submitting an Election Form
on or before the deadline established by the Committee, which in no event shall be later than
December 31, 2008. Any distribution election(s) made by a Participant, and accepted by the
Committee, in accordance with this Appendix A shall not be treated as a change in either the form
or timing of a Participant’s benefit payment for purposes of Code Section 409A or the Plan. If any
distribution election submitted by a Participant in accordance with this Appendix A either (a)
relates to an amount that would otherwise be paid to the Participant in 2008, or (b) would cause an
amount to be paid to the Participant in 2008, such election shall not be effective.

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