You need to bump your target sdk. (Previous revisions of this Answer incorrectly said "you need to bump your min sdk, but that is incorrect as evidenced by the pasted ABS documentation below).
Even though it is intended to work on older versions of the Android platform, you must still compile ActionBarSherlock against 4.0 (or newer) release of the Android SDK.
Check here:
http://actionbarsherlock.com/usage.html
Requirements
Due to its use of the native action bar and its related classes on Ice
Cream Sandwich, the library requires that both it and your project are
compiled with Android 4.0 or newer. The project also requires that you
are compiling with JDK 1.6 in both your editor and any build systems
that you may be using.
Since the library is an extension of the official support library you
must also have the android-support-v4.jar referenced by your project.
Also here:
http://actionbarsherlock.com/faq.html
The library itself must be built against Android 4.0 (API level 14).
Your project should be built using the latest version of the SDK as
possible as long as it is 4.0 or newer.
Targetting API level 11 or newer is required as it will cause Android
to automatically add the native action bar when run on newer devices.
Since you will be compiling against new APIs but your app will likely
be run on devices with older versions of Android extra care must be
taken to either avoid using or properly check and call any methods
that were introduced after your minimum SDK version.