EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “ Agreement ”), dated as of the 19th day of June, 2008 (the “ Effective Date ”), is made among Eagle Shipping International (USA) LLC, a Marshall Islands limited liability company (the “ Company ”), its parent Eagle Bulk Shipping Inc., a Marshall Islands corporation (the “ Parent ”) and Sophocles N. Zoullas (the “ Executive ”).

WHEREAS, the Executive has entered into an employment agreement with the Company dated March 1, 2005, and amended March 25, 2008 to extend the term of such agreement to June 1, 2008;

WHEREAS, the Board of Directors of the Parent (the “ Board ”) has determined that it is in the best interests of the Company and the Parent for the Executive to continue to serve as the Chief Executive Officer of the Company and Chairman of the Board subject to the terms and conditions set forth in this Agreement;

WHEREAS, the Executive desires to accept such continued service, subject to the terms and provisions of this Agreement.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and for other good and valuable consideration, the receipt of which is mutually acknowledged, the Company, the Parent and the Executive agree as follows:

1. Employment Term . The Company hereby agrees to employ the Executive, and the Executive hereby agrees to be employed by the Company, subject to the terms and conditions of this Agreement, for a five-year period (the “ Employment Term ”) commencing on the Effective Date and terminating on the fifth anniversary of such date or upon an earlier Date of Termination, as defined in Section 3(f) below; provided, however, that commencing on the third anniversary of the date hereof and each anniversary thereafter the Employment Term shall automatically be extended for one additional year unless, not later than 90 days prior to any such anniversary, either party hereto shall have notified the other party hereto that such extension shall not take effect.

2. Terms of Employment .

(i) During the Employment Term, the Executive shall serve as the Chief Executive Officer of the Company, with such duties and responsibilities as are commensurate with such position, and shall report to the Board. In addition, during the Employment Term, the Executive shall serve as Chairman of the Board. The Executive’s principal location of employment shall be at the Company’s offices in New York, New York; provided, however, that the Executive may be required under reasonable business circumstances to engage in business travel in connection with performing his duties under this Agreement.

(ii) During the Employment Term, the Executive shall devote substantially all of his business time and attention to the business and affairs of the Company and the Parent and use his reasonable best efforts to faithfully perform his duties and responsibilities; but notwithstanding the foregoing, nothing in this Agreement shall preclude the Executive (i) from engaging, consistent with his duties and responsibilities hereunder, in charitable, educational and community affairs, including serving on the board of directors of any charitable, educational or community organization, (ii) from managing his personal passive investments, (iii) upon approval of the Board, which approval shall not be unreasonably withheld, from serving as a director of another company and (iv) from engaging in activities approved by the Board. The Executive agrees not to take personal advantage of any business opportunities relating to general shipping which may arise during the Executive’s employment hereunder which could reasonably be expected to be business opportunities that the Company or the Parent might pursue. The Executive further agrees to disclose all such opportunities, and the material facts attendant thereto, to the Board for consideration by the Company and the Parent. If within 15 business days of the Executive disclosing such business opportunities to the Board, the Board fails to adopt a resolution (and to provide a copy of same to the Executive) that it may pursue such business opportunity, the Company and the Parent will be deemed to have declined to pursue such opportunity, in which event the Executive shall be free to pursue it.

(b) Compensation and Benefits .

(i) Base Salary . During the Employment Term, the Executive shall receive an annualized base salary (“ Annual Base Salary ”) of not less than $875,000 payable pursuant to the Company’s normal payroll practices. During the Employment Term, the current Annual Base Salary shall be reviewed for increase at such time, and in the same manner as the salaries of senior officers of the Company are reviewed generally.

(ii) Annual Bonus . For each calendar year of the Company completed during the Employment Term, the Executive shall be eligible to receive a discretionary cash bonus (“ Annual Bonus ”) as determined by the Compensation Committee of the Board (the “ Committee ”). The Annual Bonus shall be paid as soon as practicable following the determination of such bonus by the Committee and in no event later than the 15th day of the third month following the end of the taxable year (of the Company or the Executive, whichever is later) for which the bonus is payable.

(iii) Equity Compensation Plans . During the Employment Term, the Executive shall be eligible to receive equity-incentive compensation in the Parent to be awarded in the sole discretion of the Committee at levels commensurate with the benefits provided to other senior officers and with adjustments appropriate for his position as the Chief Executive Officer and Chairman of the Board. All such equity-based awards shall be subject to the terms and conditions set forth in the applicable plan and agreements, and in all cases shall be as determined by the Committee.

-2-

(iv) Initial Equity Grants . Effective as of the Effective Date, the Company shall grant Executive 833,333 restricted stock units (and related dividend equivalent rights) under the Company’s 2005 Stock Incentive Plan (the “Stock Incentive Plan”), vesting ratably over a five year period, 20% on each anniversary of the date of grant, in accordance with and subject to the terms and conditions set forth in the Stock Incentive Plan and the award agreement substantially in the form attached hereto as Exhibit B.

(v) Benefits . During the Employment Term, the Company shall provide the Executive with participation in such benefit plans and fringe benefits as it provides generally to similarly situated senior executives, all in accordance with the eligibility provisions of such plans and benefits.

(vi) Expense Reimbursement . During the Employment Term, the Executive shall, upon submission of adequate documentary evidence reasonably satisfactory to the Company, be entitled to reimbursement of reasonable and necessary out-of-pocket expenses incurred in the performance of his duties hereunder on behalf of the Company, subject to, and consistent with, the Company’s policies for expense payment and reimbursement, in effect from time to time. All expenses reimbursable pursuant to this Agreement shall be reimbursed by the end of the calendar year following the year in which the expenses were incurred.

(vii) Vacation . During the Employment Term, the Executive shall be eligible for paid vacation in accordance with the policies of the Company as may be in effect from time to time for senior officers generally; provided, however, that during each calendar year of the Employment Term, Executive shall be entitled to at least four (4) weeks of paid vacation.

(viii) Life Insurance . The Company shall continue to provide the Executive with a life insurance policy during the Employment Term of this Agreement, as determined by mutual agreement of the Company and the Executive.

3. Termination of Employment .

(a) Death or Disability . The Executive’s employment shall terminate automatically upon the Executive’s death during the Employment Term. If the Company determines in good faith that the Disability of the Executive has occurred during the Employment Term (pursuant to the definition of Disability set forth below), it may provide the Executive with a Notice of Termination. In such event, the Executive’s employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive (the “ Disability Effective Date ”); provided, that, within the 30-day period after such receipt, the Executive shall not have returned to full time performance of the Executive’s duties. For purposes of this Agreement, “ Disability ” shall mean the inability of the Executive to perform his duties with the Company on a full-time basis for 180 consecutive days or for 180 intermittent days in any one-year period as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a licensed physician selected by the Company or its insurers and reasonably acceptable to the Executive or the Executive’s legal representative. If the parties cannot agree on a licensed physician, each party shall select a licensed physician and the two physicians shall select a third who shall be the approved licensed physician for this purpose.

-3-

(b) Cause . The Company may terminate the Executive’s employment during the Employment Term either with or without Cause by providing a Notice of Termination to the Executive, provided that if such termination is with Cause, such Notice of Termination may be provided to the Executive at any time following the adoption of a written resolution by the Board (which shall require an affirmative vote of not less than a majority of the Board (not including the Executive)) that there is “Cause” for such termination. For purposes of this Agreement, “ Cause ” shall mean:

(i) the Executive’s continuing refusal to perform his duties or to follow a lawful direction of the Board;

(ii) the Executive’s intentional act or acts of dishonesty which Executive intended to result in his personal, more-than-immaterial enrichment;

(iii) the Executive’s documented willful malfeasance or willful misconduct in connection with his employment or Executive’s willful and deliberate insubordination; or

(iv) the Executive is convicted of a felony or the Executive enters a plea of nolo contendere to a felony.

(c) The Executive’s employment may be terminated by the Executive for Good Reason if (x) an event or circumstance set forth in the clauses of this Section 3(c) occurs and the Executive provides the Company with written notice within 90 days after the Executive has knowledge of the occurrence or existence of the event or circumstance (the notice must specifically identify the event or circumstance that the Executive believes constitutes Good Reason), (y) the Company fails to correct the event or circumstance within 30 days after the receipt of the notice, and (z) the Executive resigns within 60 days after the date of delivery of the notice referred to in clause (x) above. “ Good Reason ” means, in the absence of the Executive’s written consent, any of the following:

(i) a material diminution by the Company in the Executive’s Base Salary;

(ii) solely for purposes of Section 5 below, a material diminution by the Company in the Executive’s Annual Bonus as measured against the Executive’s average Annual Bonus with respect to the two immediately preceding fiscal years (“Two Year Average Bonus”);

(iii) a material diminution in the Executive’s authority, duties, or responsibilities; provided, that, if legal or regulatory requirements mandate that the Chief Executive Officer not be the Chairman of the Board, the Executive’s removal as Chairman of the Board shall not be deemed Good Reason;

-4-

(iv) a requirement that the Executive report to a corporate officer or employee instead of reporting directly to the Board;

(v) a material diminution in the budget over which the Executive retains authority;

(vi) a material change in the geographic location at which the Executive must perform the services; or

(vii) any other action or inaction that constitutes a material breach of the terms of the Executive’s Agreement.

The Executive shall provide notice of the existence of the Good Reason condition within 90 days of the date he learns of the condition, and the Company shall have a period of 30 days during which it may remedy the condition, and in case of full remedy such condition shall not be deemed to constitute Good Reason hereunder.

(d) Voluntary Termination . The Executive may voluntarily terminate his employment without Good Reason and such termination shall not be deemed to be a breach of this Agreement.

(e) Notice of Termination . Any termination by the Company for Cause, without Cause or for Disability, or by the Executive for Good Reason or without Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 12(b) of this Agreement. For purposes of this Agreement, a “ Notice of Termination ” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, where applicable, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated and (iii) sets forth the applicable Date of Termination as provided below. The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

(f) Date of Termination . “ Date of Termination ” means the date specified in the Notice of Termination.

(g) Resignation from All Positions . Notwithstanding any other provision of this Agreement, upon the termination of the Executive’s employment for any reason, the Executive shall immediately resign as of the Date of Termination from all positions that he holds or has ever held with the Company and the Parent, including, without limitation, the Board. The Executive hereby agrees to execute any and all documentation to effectuate such resignations upon request by the Company, but he shall be treated for all purposes as having so resigned upon termination of his employment, regardless of when or whether he executes any such documentation.

-5-

(h) Separation From Service Under Section 409A . Notwithstanding the foregoing, the Executive will not be entitled to the benefits provided in Sections 4 or 5 on account of a Date of Termination unless the Executive has incurred a “separation from service” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”).

4. Obligations of the Company upon Termination .

(a) Good Reason; Other Than for Cause . Subject to Section 5, if, during the Employment Term, (1) the Company shall terminate the Executive’s employment other than for Cause, death or Disability or (2) the Executive shall terminate employment for Good Reason:

(i) the Company shall pay to the Executive in a lump sum in cash within 60 days (except as specifically provided in Section 4(a)(i)(A)(3) and 4(a)(iii)) after the Date of Termination, or if later, as provided in Section 8 below, the aggregate of the following amounts:

A. the sum of (1) the Executive’s accrued but unpaid Annual Base Salary and any accrued but unused vacation pay through the Date of Termination, (2) the Executive’s business expenses that are reimbursable pursuant to Section 2(b)(vii) but have not been reimbursed by the Company as of the Date of Termination, subject to such deadline for payment set forth in such section, (3) the Executive’s Annual Bonus for the calendar year immediately preceding the calendar year in which the Date of Termination occurs if such bonus has been determined or earned but not paid as of the Date of Termination (at the time such Annual Bonus would otherwise have been paid), and (4) the product of the Executive’s Two Year Average Bonus multiplied by a fraction, the numerator of which is the number of days in the year in which the Date of Termination occurs through the Date of Termination and the denominator of which is 365 (collectively, the “ Accrued Obligations ”); and

B. the amount equal to the product of (x) two and (y) the sum of (I) the Executive’s Annual Base Salary and (II) the Executive’s Two Year Average Bonus; and

(ii) for two years after the Executive’s Date of Termination, the Company shall continue medical and life insurance benefits to the Executive (and, if applicable, to any dependents of the Executive who received such benefits under his coverage prior to the Date of Termination) at least equal to those that would have been provided to the Executive (and to any such dependent) in accordance with the plans, programs, practices and policies of the Company if the Executive’s employment had not been terminated; provided, that the Executive continues to make all required contributions; and

(iii) all equity awards in the Parent held by the Executive (“ Equity Awards ”) shall become fully vested and exercisable.

-6-

Except with respect to payments and benefits under Sections 4(a)(i)(A)(l) and 4(a)(i)(A)(2) and 4(a)(iii), all payments and benefits to be provided under this Section 4(a) shall be subject to the Executive’s delivering to the Company, and not revoking, a signed release of claims substantially in the form of Exhibit A hereto within fifty-two days following Executive’s Date of Termination.

(b) Cause; Other than for Good Reason . If the Executive’s employment shall be terminated for Cause or if the Executive terminates his employment without Good Reason during the Employment Term, this Agreement shall terminate without further obligations to the Executive other than the obligation to pay or provide to the Executive an amount equal to the amount set forth in clauses (1), (2), and (except in the event of a termination by the Company for Cause) (3) and (4) of Section 4(a)(i)(A) above.

(c) Death . If the Executive’s employment is terminated by reason of the Executive’s death during the Employment Term, this Agreement shall terminate without further obligations to the Executive’s legal representatives under this Agreement, other than: (i) the obligation to pay or provide to the Executive’s beneficiaries the Accrued Obligations, and (ii) the vesting of Equity Awards as provided in subsection (e) below.

(d) Disability . If the Executive’s employment is terminated by reason of the Executive’s Disability during the Employment Term, this Agreement shall terminate without further obligations to the Executive, other than: (i) the obligation to pay or provide to the Executive the Accrued Obligations, and (ii) the vesting of Equity Awards as provided in subsection (e) below.

(e) Vesting of Equity on Death or Disability . With respect to Executive’s Equity Awards, if the Executive’s employment is terminated by reason of death or Disability: (i) any stock options or stock appreciation rights shall become fully exercisable and shall remain exercisable for a period of 12 months after such termination (or until the earlier original expiration date of such options or stock appreciation rights) by the Executive or the Executive’s estate, and shall thereafter terminate and (ii) any restricted stock or restricted stock units shall become fully vested.

5. Change in Control Benefits . If at any time within two (2) years following a Change in Control (as defined below) the Executive’s employment is terminated other than for Cause, death or Disability or he resigns for Good Reason:

(a) the Executive is entitled to receive the following benefits payable in a lump sum within ten days following the Date of Termination:

(i) the Accrued Obligations; and

(ii) the amount equal to the product of (x) three and (y) the sum of (I) the Executive’s Annual Base Salary and (II) Executive’s Two Year Average Bonus; and

(b) for three years after the Executive’s Date of Termination, the Company shall continue medical and life insurance benefits to the Executive (and, if applicable, to any dependents of the Executive who received such benefits under his coverage prior to the Date of

-7-

Termination) at least equal to those that would have been provided to the Executive (and to any such dependent) in accordance with the plans, programs, practices and policies of the Company if the Executive’s employment had not been terminated; provided, that the Executive continues to make all required contributions; and

(c) if not previously vested in accordance with their terms, all Equity Awards shall become fully vested and exercisable.

If the Executive becomes entitled to payments under this Section 5, he will not be entitled to any payments or benefits under Section 4.

6. Definition of Change in Control. The term “ Change in Control ” as used in this Agreement shall mean the occurrence of any of the following:

(a) any “person” (as defined in Section 13(d)(3) of the 1934 Act), corporation or other entity (other than (i) the Company or Parent, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or Parent, or (iii) any company or other entity owned, directly or indirectly, by the holders of the voting stock of the Parent in substantially the same proportions as their ownership of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Parent, directly or indirectly, of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Parent;

(b) the sale of all or substantially all the Parent’s assets in one or more related transactions to a person or group of persons, other than such a sale (i) to a subsidiary which does not involve a change in the equity holdings of the Parent, or (ii) to an entity which has acquired all or substantially all the Parent’s assets (any such entity described in clause (i) or (ii), the “ Acquiring Entity ”) if, immediately following such sale, 50% or more of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Acquiring Entity (or, if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Acquiring Entity) is beneficially owned by the holders of the voting stock of the Parent, and such voting power among the persons who were holders of the voting stock of the Parent immediately prior to such sale is, immediately following such sale, held in substantially the same proportions as the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Parent immediately prior to such sale;

(c) any merger, consolidation, reorganization or similar event of the Parent or any subsidiary as a result of which the holders of the voting stock of the Parent immediately prior to such merger, consolidation, reorganization or similar event do not directly or indirectly hold 50% or more of the aggregate voting power of the capital stock of the surviving entity (or, if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the surviving entity) and such voting power among the persons who were holders of the voting stock of the Parent immediately prior to such sale is, immediately following such sale, held in substantially the same proportions as the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Parent immediately prior to such sale;

-8-

(d) the approval by the Parent’s stockholders of a plan of complete liquidation or dissolution of the Parent;

(e) during any period of 24 consecutive calendar months, individuals who were directors of the Parent on the first day of such period, or whose election or nomination for election to the Board was recommended or approved by at least a majority of the directors then still in office who were directors of the Parent on the first day of such period, or whose election or nomination for election were so approved, shall cease to constitute a majority of the Board;

provided , however , that (i) in no event shall a Change in Control be deemed to have occurred in connection with the initial public offering of common stock of the Company or the Parent, and (ii) notwithstanding the foregoing, for each award subject to Section 409A of the Code, a Change in Control shall be deemed to occur with respect to such award only if a change in the ownership or effective control of the Parent or a change in the ownership of a substantial portion of the assets of the Parent shall also be deemed to have occurred under Section 409A of the Code, provided that this clause (ii) shall apply to such award only to the extent necessary to avoid adverse tax effects under Section 409A of the Code.

7. Excise Tax Gross Up .

(a) In the event that any payment or distribution to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a “ Payment ”) is made to the Executive, and it shall be determined that the Payment, would constitute an “ excess parachute payment ” within the meaning of Section 280G of the Code, the Company shall pay the Executive an additional amount of cash (the “ Gross-Up Payment ”) such that the net amount retained by the Executive after deduction of any Excise Tax (as defined below), and any federal, state and local income tax, employment tax and Excise Tax imposed upon the Gross-Up Payment, shall be equal to the Payment. The term “ Excise Tax ” means the excise tax imposed under Section 4999 of the Code, together with any interest or penalties imposed with respect to such excise tax. For purposes of determining the amount of the Gross-Up Payment, unless the Executive specifies that other rates apply, the Executive shall be deemed to pay federal income tax and employment taxes at the highest marginal rate of federal income and employment taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive’s residence on the Executive’s Date of Termination, net of the maximum reduct