EXECUTIVE EMPLOYMENT AGREEMENT

Exhibit 10.7

EXECUTIVE EMPLOYMENT AGREEMENT

     This EXECUTIVE EMPLOYMENT AGREEMENT (this “ Agreement ”) is entered into as of the 15th day of January, 2007 (the “ Effective Date ”) by and between HERCULES OFFSHORE, INC., a Delaware corporation (the “ Company ”) and TERRY CARR (the “ Executive ”).

     WHEREAS, the Company, after consultation with the Nominating, Governance and Compensation Committee of the Board (the “ NGC Committee ”) and the Board of Directors (the “ Board ”) has determined that it is advisable and in the best interests of the Company and its stockholders to secure the employment and dedication of the Executive, and to provide the Executive with compensation and benefit arrangements which are competitive with those of other similarly situated corporations;

     WHEREAS, the Company also believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control (hereinafter defined) and to encourage the Executive’s full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control;

     WHEREAS, the Company desires to employ the Executive, and the Executive is willing to accept such employment, all upon the terms and conditions set forth herein;

     NOW, THEREFORE, in consideration of the premises, the terms and provisions set forth herein, the mutual benefits to be gained by the performance thereof and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

     1.  Certain Definitions.

          (a) “ Affiliate ” shall have the meaning ascribed to such term under Rule 12(b)-2 under the Securities Exchange Act of 1934 (the “ Exchange Act ”).

          (b) “ Associate ” shall mean, with reference to any Person, (i) any corporation, firm, partnership, association, unincorporated organization or other entity (other than the Company or a subsidiary of the Company) of which such Person is an officer or general partner (or officer or general partner of a general partner) or is, directly or indirectly, the beneficial owner of 10% or more of any class of equity securities, (ii) any trust or other estate in which such Person has a substantial beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity and (iii) any relative or spouse of such Person, or any relative of such spouse, who has the same home as such Person.

          (c) The “ Employment Period ” shall mean the period commencing on the Effective Date and ending on February 28, 2008, unless extended pursuant to this paragraph. If neither party shall provide written notice of termination at least six months prior to the scheduled expiration of the then-current term of this Agreement (each such date by which such notice must be

provided, a “ Renewal Date ”), the Employment Period shall automatically be extended for two additional years. Upon a Change of Control the Employment Period shall be automatically extended to the third anniversary of the Change of Control.

          (d) The term “group” is used as it is defined for purposes of the Exchange Act.

          (e) “Person” means an individual, entity or group.

          (f) “Subsidiary ” shall mean (i) in the case of a corporation, any corporation of which the Company directly or indirectly owns shares representing 50% or more of the combined voting power of the shares of all classes or series of capital stock of such corporation that have the right to vote generally on matters submitted to a vote of the stockholders of such corporation and (ii) in the case of a partnership or other business entity not organized as a corporation, any such business entity of which the Company directly or indirectly owns 50% or more of the voting, capital or profits interests (whether in the form of partnership interests, membership interests or otherwise).

     2.  Change of Control. For the purpose of this Agreement, a " Change of Control ” shall mean (i) the consummation of a reorganization, merger, consolidation or other transaction, in any case, with respect to which Persons who were stockholders (or members) of the Company immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own equity interests representing at least 51% of the total combined voting power of the Company or the resulting reorganized, merged or consolidated entity, as applicable, (ii) the sale, lease, transfer or other disposition of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole (other than to one or more Subsidiaries of the Company), or (iii) the occurrence of (A) the consummation of a transaction or series of related transactions in which the Company issues, as consideration for the acquisition (through a merger, reorganization, stock purchase, asset purchase or otherwise) of the assets or capital stock of an unaffiliated third party, equity in the Company representing more than 35% of the outstanding equity of the Company calculated as of the consummation of such transaction or transactions, in conjunction with (B) a change in the composition of the Board, as a result of which fewer than 50% of the incumbent directors are directors who had been directors of the Company at the time of the approval by the Board of the issuance of such equity in the Company.

     3.  Employment Agreement. The Company hereby agrees to employ the Executive, and the Executive hereby accepts employment with the Company in accordance with the terms and conditions of this Agreement, for the Employment Period.

     4.  Terms of Employment.

          (a) Position and Duties .

               (i) During the Employment Period, (A) the Executive’s position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be (x) prior to a Change of Control, at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 90-day period immediately preceding the later of the Effective Date or the most recent Renewal Date and (y) upon and after a Change of Control, the Executive’s position shall be at least commensurate in all respects (disregarding any change or changes that are in the aggregate de minimis ) with the most significant of those held, exercised and assigned at any time during the 180-day period immediately preceding

the Applicable Date and (B) the Executive’s services shall be performed at the location where the Executive was employed immediately preceding the Applicable Date or any office which is the headquarters of the Company and is less than 50 miles from such location. For purposes of this Agreement, “ Applicable Date ” shall mean, at any time of determination, the latest to have occurred of the Effective Date, the most recent Renewal Date, or any date on which a Change of Control has occurred.

               (ii) During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote his full attention and time during normal business hours to the business and affairs of the Company. During the Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions or (C) manage personal investments, in each such case, so long as such activities do not significantly interfere with the performance of the Executive’s responsibilities as an employee of the Company in accordance with this Agreement; provided, however, the Executive may not serve on the board of a publicly traded for profit corporation or similar body of a publicly traded for profit business organized in other than corporate form without the consent of the NGC Committee. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Applicable Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Applicable Date shall not thereafter be deemed to interfere with the performance of the Executive’s responsibilities to the Company.

          (b) Compensation .

               (i)  Base Salary . During the Employment Period, the Executive shall receive an annual base salary (“ Annual Base Salary ”) in the amount of $270,000, which shall be paid on a monthly basis. During the Employment Period, the Annual Base Salary shall be reviewed at least once in any fiscal year of the Company and may be increased at any time and from time to time as shall be substantially consistent with increases in base salary generally awarded in the ordinary course of business to other executives of the Company and its affiliated companies. As used in this Agreement, the term “ affiliated companies ” shall include any company controlled by, controlling or under common control with the Company.

               (ii)  Annual Bonus . In addition to Annual Base Salary, the Executive shall be awarded for any fiscal year ending during the Employment Period, a bonus of up to 100% of Annual Base Salary (target of 50%) depending upon meeting goals agreed upon with the Board. During the Employment Period, the annual target bonus as a percentage of Annual Base Salary may be increased, but not decreased, from time to time by the Board.

               (iii)  Restricted Shares in Hercules Offshore, Inc. The Executive shall be awarded 10,000 restricted shares of Hercules Offshore, Inc. stock which shall vest over a three (3) year period. The Executive will also be eligible to receive other forms of incentive compensation in the future, such as the restricted stock as determined by the Board.

               (iv)  Hiring Bonus . On the Effective Date of this Agreement, the Executive shall receive a hiring bonus in the amount of $100,000.

               (v)  Incentive, Savings and Retirement Plans . During the Employment Period, the Executive shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs applicable generally to other executives of the Company and its affiliated companies. Such plans, practices, policies and programs shall provide the Executive with incentive opportunities (measured with respect to both regular and special incentive opportunities, to the extent, if any, that such distinction is applicable), savings opportunities and retirement benefit opportunities, in each case, equal to such plans, practices, policies and programs provided by the Company and its affiliated companies for similarly situated senior executives of the Company and its affiliated companies.

               (vi)  Welfare Benefit Plans . During the Employment Period, the Executive and/or the Executive’s dependents, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and its affiliated companies (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death and travel accident insurance plans and programs) to the extent applicable generally to similarly situated senior executives of the Company and its affiliated companies. Such plans, practices, policies and programs shall provide the Executive with benefits which are equal, in the aggregate, to such plans, practices, policies and programs provided by the Company and its affiliated companies for similarly situated senior executives of the Company and its affiliate companies.

               (vii)  Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable and documented expenses incurred by the Executive in accordance with the policies, practices and procedures of the Company and its affiliated companies in effect for similarly situated senior executives of the Company and its affiliated companies. All reimbursable expenses shall be appropriately documented in reasonable detail by the Executive upon submission of any request for reimbursement and in a format and manner consistent with the Company’s expense reporting policy.

               (viii)  Fringe Benefits . During the Employment Period, the Executive shall be entitled to fringe benefits in accordance with the plans, practices, programs and policies of the Company and its affiliated companies in effect for similarly situated senior executives of the Company and its affiliated companies.

               (ix)  Vacation . During the Employment Period, the Executive shall be entitled to four (4) weeks paid vacation per year, or such greater amount as is afforded to similarly situated senior executives of the Company or its affiliated companies.

               (x)  Equity Awards . In addition to Annual Base Salary and annual bonus, the Executive may be awarded an equity award at the discretion of the Company for any fiscal year ending during the Employment Period.

     5.  Termination of Employment.

          (a) Death or Disability . The Executive’s employment shall terminate automatically upon the Executive’s death during the Employment Period. If the Company determines in good faith that the Disability of the Executive has occurred during the Employment Period (pursuant to the definition of Disability set forth below), it may give to the Executive written

notice in accordance with Section 15(c) of this Agreement of its intention to terminate the Executive’s employment. 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 days 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 absence of the Executive from the Executive’s duties with the Company on a full-time basis for 120 consecutive calendar days, and the Executive (i) is unable to engage in any substantial gainful activity on behalf of the Company by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months or (ii) is, by reason of any medically determinable physical or mental impairment which 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 Company. All determinations to be made with respect to clauses (i) and (ii) above shall be made by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive’s legal representative (such agreement as to acceptability not to be withheld unreasonably).

          (b) Cause . The Company may terminate the Executive’s employment during the Employment Period for Cause. For purposes of this Agreement, “ Cause ” shall mean (i) a material violation by the Executive of the Executive’s obligations under Section 4(a) of this Agreement (other than as a result of incapacity due to physical or mental illness) which is either willful and deliberate on the Executive’s part or is committed in bad faith or without reasonable belief that such violation is in the best interests of the Company (ii) the Executive’s gross negligence in performance, or intentional non-performance (continuing for 10 days after receipt of written notice of need to cure from the Company), of any of the Executive’s duties and responsibilities under this Agreement, or reasonable instructions of the Board or the officer(s) of the Company to whom the Executive reports within the scope of the Executive’s employment by the Company, (iii) the Executive’s dishonesty, fraud or misconduct with respect to the business or affairs of the Company, (iv) the Executive’s violation of the Company’s drug policy or anti-harassment policy (v) the Executive’s violation of the Company’s ethics policy which is willful or deliberate on the Executive’s part or is committed in bad faith or (vi) the final and non-appealable conviction by a court of competent jurisdiction of the Executive of a felony involving moral turpitude or the entering of a guilty plea or a plea of nolo contendere to such crime by the Executive.

          (c) Good Reason; Other Terminations . The Executive’s employment may be terminated by the Executive (i) during the Employment Period for Good Reason, or (ii) during the Employment Period other than for Good Reason.

For purposes of this Agreement, “ Good Reason ” shall mean:

               (i) the assignment to the Executive of any duties inconsistent with the Executive’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 4(a) of this Agreement, or any other action by the Company which results in a diminution in such position, authority, duties or responsibilities excluding for this purpose an insubstantial or inadvertent action which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

               (ii) any failure by the Company to comply with any of the provisions of Section 4(b) of this Agreement, other than an insubstantial or inadvertent failure which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

               (iii) the Company’s requiring the Executive to be based at any office or location other than that described in Section 4(a)(i)(B) hereof;

               (iv) any purported termination by the Company of the Executive’s employment otherwise than as expressly permitted by this Agreement; or

               (v) any failure by the Company to comply with and satisfy Section 14(c) of this Agreement.

               (vi) within a 24 month period following a Change of Control, any failure to allow Executive to participate in bonus (in cash and/or property) and equity compensation programs at a level at least equal to the participation levels of similarly situated senior executives of the Company and its affiliated companies.

               Notwithstanding anything herein to the contrary, the interim assignment of Executive’s position, authority, duties, or responsibilities to any Person while Executive is absent from his duties during any of the 120 business days set forth under the definition of Disability in Section 5(a) shall not constitute a Good Reason for Executive to terminate his employment with the Company.

               An extension of the Employment Period pursuant to Section 1(c) will not, in itself, impair or render invalid or defective a Notice of Termination given in connection with termination of employment for Good Reason based on whole or in part on facts or circumstances occurring prior to the extension.

          (d) Notice of Termination . Any termination by the Company for Cause, or by the Executive for any reason (including without limitation Good Reason), shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 15(c) 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, (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) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than thirty days after the giving of such notice). 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 hereunder or preclude the Executive or the Company from asserting such fact or circumstance in enforcing the Executive’s or the Company’s right hereunder.

          (e) Date of Termination . “ Date of Termination ” means (i) if the Executive’s employment is terminated by the Company for Cause, or by the Executive for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein, as the case may be, (ii) if the Executive’s employment is terminated by the Company other than for Cause, the Date of Termination shall be the date on which the Company notifies the Executive of such termination, (iii) if the Executive’s employment is terminated by reason of death or Disability, the Date of

Termination shall be the date of death of the Executive or the Disability Effective Date, as the case may be, (iv) if the Executive’s employment is terminated by the Executive other than for Good Reason, the date of the receipt of the Notice of Termination or any later date specified therein, and (v) if the Executive’s employment is terminated on account of the death of the Executive or Executive’s Disability, the Date of Termination shall be the date of such death or the Disability Effective Date, respectively.

     6.  Obligations of the Company upon Termination and Upon Change of Control.

          (a) Prior to a Change of Control: Good Reason or Other than for Cause. If, during the Employment Period, the Company shall terminate the Executive’s employment other than for Cause, or the Executive shall terminate employment for Good Reason:

               (i) the Company shall pay to the Executive , in a lump-sum in cash within 30 days after the Date of Termination (unless other payment terms are specified in this Section 6(a)(i)), the aggregate of the following amounts:

                    A. the sum of (1) the Executive’s Annual Base Salary through the Date of Termination to the extent not theretofore paid, (2) any compensation previously deferred by the Executive, to the extent permitted by the plan under which such deferral was made (together with any accrued interest or earnings thereon), and any accrued vacation pay, in each case to the extent not theretofore paid (the sum of the amounts described in clauses (1) and (2) shall be hereinafter referred to as the “ Accrued Obligations ”); and

                    B. the amount (such amount shall be hereinafter referred to as the “ Severance Amount ”) equal to the sum of:

                         (1) one and one-half times the amount of the Executive’s Annual Base Salary, and

                   &