Document:

EX-10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is entered into effective as of July 17, 2007
(the “Effective Date”), by and between The Shaw Group Inc., a Louisiana corporation
(collectively with its affiliates and subsidiaries hereinafter referred to as, the
“Company”), and Brian K. Ferraioli (“Employee”). The Company and Employee shall
hereinafter be referred to collectively as the “Parties”.

WHEREAS, the Company and Employee desire to enter into an employment relationship.

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and
agreements contained herein, and for other valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Parties agree as follows:

1. Employment. The Company hereby employs Employee, and Employee hereby accepts
employment by the Company, on the terms and conditions set forth in this Agreement.

2. Term of Employment. Subject to the provisions for earlier termination provided in
this Agreement, the term of this Agreement (the “Term”) shall be two years commencing on
the Effective Date and shall be automatically renewed on each day following the Effective Date so
that on any given day the unexpired portion of the Term of this Agreement shall be two years.
Notwithstanding the foregoing provision, at any time after the Effective Date, the Company or
Employee may give written notice to the other Party that the Term shall not be further renewed from
and after a subsequent date specified in such notice (the “fixed term date”), in which
event the Term shall become fixed, and this Agreement shall terminate on the second anniversary of
such fixed term date.

3. Employee’s Duties.

(a) Commencing upon the Effective Date and continuing until the day immediately preceding the
date on which the Company files its Form 10-Q for the third quarter of the Company’s 2007 fiscal
year (the “3Q07 Filing Date”), Employee shall serve as an Executive Vice President of the
Company. Commencing on the 3Q07 Filing Date and continuing for the remainder of the Term, Employee
shall serve as Executive Vice President & Chief Financial Officer of the Company, or such other
similar position(s) as the Parties may mutually agree, with such duties and responsibilities as may
from time to time be assigned to him by the Board of Directors of the Company (the “Board”)
or the Chief Executive Officer of the Company, provided that such duties are consistent with the
customary duties of such position(s).

(b) Employee agrees to devote Employee’s full attention and time during normal business hours
to the business and affairs of the Company and to use reasonable best efforts to perform faithfully
and efficiently Employee’s duties and responsibilities. Employee shall not, either directly or
indirectly, enter into any business or employment with or for any Person (defined below) other than
the Company during the Term; provided, however, that Employee shall not be
prohibited from making financial investments in any other company or business or from serving on
the board of directors of any other company, subject in each case to the provisions set forth in
the Company’s Code of Conduct or similar guidelines. For the purposes of this Agreement, the term
“Person” shall mean any individual, corporation, limited or general partnership, limited
liability company, joint venture, association, trust or other entity or organization, whether or
not a legal entity. Employee shall at all times observe and comply with all lawful directions and
instructions of the Board.

4. Compensation.

(a) Base Compensation. For services rendered by Employee under this Agreement, the
Company shall pay to Employee a base salary (“Base Compensation”) of $585,000 per annum,
payable in accordance with the Company’s customary pay periods and subject to customary
withholdings. The amount of Base Compensation will be subject to review by the Board on an annual
basis as of the close of each fiscal year of the Company and may be increased as the Board may deem
appropriate. In the event the Board deems it appropriate to increase Employee’s annual base
salary, said increased amount shall thereafter be the Base Compensation for the purposes of this
Agreement. Employee’s Base Compensation, as increased from time to time, may not be decreased
unless agreed to by Employee. Nothing contained herein shall prevent the Board from paying
additional compensation to Employee in the form of bonuses or otherwise during the Term.

(b) Annual Bonus. During the Term, Employee will be eligible to participate in the
Company’s discretionary management incentive program as established by the Board (as the same may
be amended from time to time), with an annual performance bonus of not less than 25%, and not more
than 200%, of Employee’s bonus target (the “Bonus Target”), which Bonus Target shall
initially be an amount equal to Employee’s Base Compensation. The Bonus Target may be adjusted
annually. Annual bonus payments will be subject to customary withholdings.

(c) Signing Bonus. As additional consideration for this Agreement, the Company shall
pay to Employee a signing bonus of $450,000, payable not later than 15 days after the Effective
Date and subject to customary withholdings.

(d) Long Term Incentive Awards.

(i) Employee will be eligible to participate in the Company’s discretionary long term
incentive plan during the course of employment with the Company, subject to the terms and
conditions of the applicable plan. The overall target value of the annual combined grants
of option shares and restricted shares to Employee on the date of grant will be in the range
of 100% to 200% of Employee’s Base Compensation.

(ii) On August 1, 2007, Employee will be granted shares in the Company with an
aggregate value of $1,000,000, which will be divided equally between option shares and
restricted shares. The actual number of shares will be determined as follows:

(A) for restricted shares, $500,000 divided by the closing price on the date of
grant; and

(B) for option shares, $500,000 divided by the fair value as determined by the
Black-Scholes valuation model utilizing the closing price on the date of grant.

The grant of restricted shares will vest in annual installments of 33.33% each, with full
vesting after three years. The grant of option shares will vest in annual installments of
25% each, with full vesting after four years.

(iii) All stock-based awards are subject to shareholders’ approval of shares to be
allocated to the Company’s long term incentive plan and granted under the strict purview of
the Compensation Committee of the Board.

(iv) Future Long Term Incentive (defined below) awards will be determined utilizing the
valuation methodology used for other similarly situated executive officers of the Company.

5. Additional Benefits. In addition to the Compensation provided for in Section 4,
Employee shall be entitled to the following:

(a) Business Expenses. The Company shall, in accordance with any rules and
policies that it may establish from time to time for its executive officers, reimburse
Employee for business expenses reasonably incurred in the performance of Employee’s duties.
It is understood that Employee is authorized to incur reasonable business expenses for
promoting the business of the Company, including reasonable expenditures for travel,
lodging, meals and client or business associate entertainment. Requests for reimbursement
for such expenses must be accompanied by appropriate documentation.

(b) Point of Origin; Relocation Expenses.

(i) Employee’s point of origin (the “Point of Origin”) will be Califon, New
Jersey, and Employee’s business assignment location will be the Company’s corporate offices
in Baton Rouge, Louisiana (the “Business Location”). From the Effective Date until
the earliest to occur of (A) June 17, 2008, (B) the date of permanent relocation of Employee
to the Business Location and (C) the Date of Termination, the Company will reimburse
Employee for expenses reasonably incurred by Employee for living expenses at the Business
location and air travel between the Point of Origin and the Business Location each weekend.
Business class seating may be used by Employee in Employee’s reasonable discretion.
Employee will also have access to the Company’s aircraft on an as-available basis for the
purposes, and during the period, described in this Section 5(b)(i). Notwithstanding anything
in this Agreement to the contrary, to the extent that any amount received by Employee under
this Section 5(b)(i) in connection with the reimbursement by the Company of travel and
living expenses is determined by the Company or the Internal Revenue Service to constitute
taxable income to Employee, the Company shall fully “gross up” such amount so that Employee
is in the same “net” after tax position he would have been if such payment and gross up
payments had not constituted taxable income to Employee.

(ii) The Company will provide relocation assistance to Employee in connection with
Employee’s permanent relocation from the Point of Origin to the Business Location, including
moving expenses, home sale assistance, customary real estate fees and commissions and home
purchase assistance, in each case in accordance with the relocation policies of the Company
at the time such relocation occurs. Employee acknowledges that such relocation assistance
does not include the purchase by the Company of Employee’s residence at the Point of Origin.

(c) Vacation. Employee shall be entitled to four weeks of vacation per year,
without any loss of compensation or benefits. Employee shall be entitled to carry forward
any unused vacation time.

(d) Country Club Membership. The Company will pay, on behalf of Employee, one
country club membership initiation fee. Employee shall be responsible for monthly dues in
connection with such membership.

(e) General Benefits. Employee shall be entitled to participate in (i) the
various Employee benefit plans or programs provided to the Employees of the company in
general, including but not limited to, health (including ExecuCare), dental, disability,
401k, accident and life insurance plans, and (ii) the Flexible Perquisites Plan, which is
reserved for selected executives and provides reimbursement for a choice of certain benefits
of 4% of Employee’s Base Compensation in each calendar year. (A menu of available benefits
will be provided.) Benefits are subject to the eligibility requirements with respect to
each of such benefit plans or programs, and such other benefits or perquisites as may be
approved by the Board during the Term. Nothing in this Section 5(e) shall be deemed to
prohibit the Company from making any changes in any of the plans, programs or benefits
described in this Section 5(e), provided the change similarly affects all executive officers
of the Company that are similarly situated.

6. Confidentiality.

(a) Employee hereby acknowledges that the Company possesses certain Confidential Information
(defined below) that is peculiar to the businesses in which the Company is or may be engaged.
Employee hereby affirms that such Confidential Information is the exclusive property of the Company
and that the Company has proprietary interests in such Confidential Information. For the purposes
of this Agreement, the term “Confidential Information” shall mean any and all information
of any nature and in any form that at the time or times concerned is not generally known to Persons
(other than the Company) that are engaged in businesses similar to that conducted or contemplated
by the Company (other than by the act or acts of an employee not authorized by the Company to
disclose such information) which may include, without limitation, the Company’s existing and
contemplated products and services; the Company’s purchasing, accounting, marketing and
merchandising methods or practices; the Company’s development data, theories of application and/or
methodologies; the Company’s customer/client contact and/or supplier information files; the
Company’s existing and contemplated policies and/or business strategy; any and all samples and/or
materials submitted to Employee by the Company; and any and all directly and indirectly related
records, documents, specifications, data and other information with respect thereto. Employee
further acknowledges by signing this Agreement that the Company has expended much time, cost and
difficulty in developing and maintaining the Company’s customers.

(b) Employee shall (i) use the Confidential Information solely for the purpose of performing
Employee’s duties on behalf of the Company and for no other purpose whatsoever, (ii) not, directly
or indirectly, at any time during or after Employee’s employment by the Company, disclose
Confidential Information to any other Person (except to the Company’s officers in connection with
Employee’s duties on behalf of the Company) or use or otherwise exploit Confidential Information to
the detriment of the Company, and (iii) not lecture on or publish articles with respect to
Confidential Information. In the event of a breach or threatened breach of the provisions of this
Section 6(b), the Company shall be entitled, in addition to any other remedies available to the
Company, to an injunction restraining Employee from disclosing such Confidential Information.

(c) Upon termination of employment of Employee for whatever reason, Employee shall surrender
to the Company any and all documents, manuals, correspondence, reports, records and similar items
then or thereafter coming into the possession of Employee that contain any Confidential
Information; provided, however, that the Company will provide Employee reasonable
access to such Confidential Information to the extent required by Employee in connection with the
defense of any cause of action, dispute, proceeding or investigation made or initiated against
Employee by any Person other than the Company related to the employment of Employee by the Company
or the performance by Employee of its duties in the course of such employement.

7. Termination.

(a) This Agreement may be terminated prior to the end of the Term as set forth below:

(i) Resignation (other than for Good Reason). Employee may resign, including by
reason of retirement, Employee’s position at any time by providing written notice of
resignation to the Company. In the event of such resignation (except in the case of
resignation for Good Reason (defined below)), this Agreement shall terminate, and Employee
shall not be entitled to further compensation pursuant to this Agreement other than the
payment of any accrued and unpaid Base Compensation and other benefits (e.g., vacation,
unreimbursed business expenses, etc.) as of the date of Employee’s resignation and the
retention of Long Term Incentives (defined below) (if any) that have vested or become
exercisable on or before the date of such resignation in accordance with the plans governing
such Long Term Incentives (which Long Term Incentives remain subject to, and must thereafter
be exercised in accordance with, the plans governing such Long Term Incentives).

(ii) Death. If Employee’s employment is terminated due to Employee’s death,
any accrued and unpaid Base Compensation and other benefits (e.g., vacation, unreimbursed
business expenses, etc.) as of the date of Employee’s death and benefits payable pursuant to
the Company’s benefit plans will be paid to Employee’s surviving spouse or estate, and one
year of paid group health and dental insurance benefits shall be provided by the Company to
Employee’s surviving spouse and minor children. Employee shall also become immediately and
totally vested in any and all option shares, restricted shares or units or other similar
awards granted to Employee by the Company under any long term incentive plan duly adopted by
the Board (“Long Term Incentives”) prior to the Date of Termination (which Long Term
Incentives remain subject to, and must thereafter be exercised in accordance with, any plans
governing such Long Term Incentives). After said payments, provision of insurance benefits
and vesting of Long Term Incentives, this Agreement shall terminate, and the Company shall
have no obligations to Employee or Employee’s legal representatives with respect to this
Agreement.

(iii) Discharge.

(A) The Company may terminate Employee’s employment for any reason at any time
upon written notice delivered to Employee.

(B) In the event that Employee’s employment is terminated by the Company for
any reason other than Employee’s Misconduct or Disability (both as defined below),
the following shall occur:

(1) the Company shall pay to Employee, subject to customary
withholdings, (x) not later than 15 calendar days after the Date of
Termination, a lump sum amount, in cash, equal to the lesser of (I) $450,000
and (II) an amount (the “Termination Payment Amount”) equal to the
product of (a) the sum of (i) Employee’s Base Compensation as in effect
immediately prior to the Date of Termination, plus (ii) the most
recent annual bonus paid by the Company to Employee, multiplied by
(b) 2.0, and (y) on the first business day occurring after the date that is
six months after the Date of Termination, a lump sum amount (if greater than
zero), in cash, equal to (I) the Termination Payment Amount, minus
(II) $450,000;

(2) for the lesser of (x) 24 months and (y) the remaining portion of
the Term, the Company, at its sole cost, shall provide or arrange to provide
to Employee (and, as applicable, Employee’s dependents) dental, disability,
accident and life insurance and group health insurance benefits (including
ExecuCare) (collectively, “Welfare Benefits”) substantially similar
to those that Employee (and Employee’s dependents) were receiving
immediately prior to the Date of Termination; provided,
however, that the Welfare Benefits otherwise receivable by Employee
pursuant to this clause (2) shall be reduced to the extent comparable
Welfare Benefits are actually received by Employee (and/or Employee’s
dependents) during such period under any other employer’s welfare plan(s) or
program(s), with Employee being obligated to promptly disclose to the
Company any such comparable Welfare Benefits; and

(3) Employee shall become immediately and totally vested in any and all
Long Term Incentives granted to Employee by Company prior to the Date of
Termination (which Long Term Incentives remain subject to, and must
thereafter be exercised in accordance with, any plans governing such Long
Term Incentives).

(C) Notwithstanding anything to the contrary in this Agreement, in the event
that Employee is terminated because of Misconduct, the Company shall have no
obligations pursuant to this Agreement after the the Date of Termination other than
the payment of any unpaid Base Compensation accrued through the the Date of
Termination. For the purposes of this Agreement, the term “Misconduct”
shall mean:

(1) (A) any willful breach or habitual neglect of duty by Employee or
(B) Employee’s material and continued failure to substantially perform
Employee’s duties with the Company (other than any such failure resulting
from Employee’s incapacity due to a Disability) (i) in a professional manner
and (ii) in a manner that is reasonably expected as appropriate for the
position, in the case of either (A) or (B), which breach, neglect or failure
is not cured by Employee within 30 days from receipt by Employee of written
notice from the Company that specifies the alleged breach, neglect or
failure;

(2) the misappropriation or attempted misappropriation by Employee of a
material business opportunity of the Company, including attempting to secure
any personal profit in connection with entering into any transaction on
behalf of the Company;

(3) the intentional misappropriation or attempted misappropriation by
Employee of any of the Company’s funds or property;

(4) the violation by Employee of the Company’s Code of Corporate
Conduct or Fraud Policy; or

(5) (A) the commission by Employee of a felony offense or a misdemeanor
offense involving violent or dishonest behavior or (B) Employee engaging in
any other conduct involving fraud or dishonesty.

(D) Disability. If Employee shall have been absent from the full-time
performance of Employee’s duties with the Company for 120 consecutive calendar days
as a result of Employee’s incapacity due to a Disability, Employee’s employment may
be terminated by the Company . For the purposes of this Agreement, a
“Disability” shall exist if:

(1) Employee is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment that can
be reasonably expected to result in death or can be expected to last for a
continuous period of not less than 12 months; or

(2) Employee is, by reason of any medically determinable physical or
mental impairment that can be reasonably 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 three
months under an accident and health plan covering employees of the Company.

If Employee is terminated pursuant to this Section 7(a)(iii)(D), Employee shall not
be entitled to further compensation pursuant to this Agreement, except that Employee
shall (1) be paid monthly (but only for up to a 24 month period beginning with the
Date of Termination) the amount by which Employee’s monthly Base Compensation
exceeds the monthly benefit received by Employee pursuant to any disability
insurance covering Employee, (2) continue to receive paid Welfare Benefits for
Employee and Employee’s dependents for the 24 month period beginning with the Date
of Termination, and (3) become immediately and totally vested in any and all Long
Term Incentives granted to Employee by Company prior to the Date of Termination
(which Long Term Incentives remain subject to, and must be exercised in accordance
with, any plans governing such Long Term Incentives).

(iv) Resignation for Good Reason. Employee shall be entitled to terminate
Employee’s employment for Good Reason (as defined herein). If Employee terminates
Employee’s employment for Good Reason, Employee shall be entitled to the compensation and
Welfare Benefits provided in Section 7(a)(iii)(B). For the purposes of this Agreement, the
term “Good Reason” shall mean the occurrence of any of the following circumstances
without Employee’s express written consent unless such breach or circumstance is fully
corrected prior to the Date of Termination specified in the Notice of Termination given in
respect thereof:

(A) any material diminution of Employee’s duties or responsibilities (other
than in connection with the termination of Employee for Misconduct or Disability in
accordance with the terms of this Agreement);

(B) the failure by the Company to continue to provide Employee with benefits
substantially similar to those enjoyed by other executive officers who have entered
into similar employment agreements with Employer under any of the Company’s medical,
health, accident, life insurance and/or disability plans in which Employee was
participating immediately prior to such time;

(C) any material change in the geographic location at which Employee must
perform its services under this Agreement; or

(D) any other material breach by the Company of its obligations under this
Agreement without Employee’s express written consent, which breach is not cured by
the Company within 30 days from receipt by the Company of written notice from
Employee that specifies the alleged breach.

(v) Resignation for Corporate Change. Employee shall be entitled to terminate
Employee’s employment for a Corporate Change (as defined herein), but only if Employee gives
notice of Employee’s intent to terminate employment within 90 days following the effective
date of such Corporate Change. If Employee terminates employment for a Corporate Change,
Employee shall be entitled to the compensation and benefits provided in Section
7(a)(iii)(B). For the purposes of this Agreement, a “Corporate Change” shall occur
if:

(A) any “person” (as defined in Section 3(a)(9) of the Securities Exchange Act
of 1934 (as amended, the “Exchange Act”), and as used in Section 13(d) and 14(d)
thereof, including a “group” as defined in Section 13(d) of the Exchange Act but
excluding any 10% or larger shareholder of record of the Company as of the Effective
Date), directly or indirectly, becomes the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act) of securities of the Compay representing 50% or more
of the combined voting power of the Company’s then oustanding securities that are
entitled to vote with respect to the election of the Board; or

(B) as a result of or in connection with a contested election, the then-current
members of the Board shall cease to constitute a majority of the Board. For the
purposes of this Section, the term “contested” shall not include election by a
majority of the then-current Board.

(b) Notice of Termination. Any purported termination of Employee’s employment
by the Company under Section 7(a)(iii)(C) or (D), or by Employee under Section 7(a)(i), (iv)
or (v), shall be communicated by written Notice of Termination (defined below) to the other
Party in accordance with Section 10. For the purposes of this Agreement, the term
“Notice of Termination” shall mean a notice that (i) in the case of termination by
the Company, shall set forth in reasonable detail the reason for such termination of
Employee’s employment and the Date of Termination, or (ii) in the case of resignation by
Employee, shall specify in reasonable detail the basis for such resignation and the Date of
Termination. A Notice of Termination validly given by Employee pursuant to Section 7(a)(iv)
shall be effective even if given after the receipt by Employee of notice that the Board has
set a meeting to consider terminating Employee for Misconduct. Any purported termination
for which a Notice of Termination is required that is not effected pursuant to this Section
7(b) shall not be effective.

(c) Date of Termination, Etc. The “Date of Termination” shall mean the
date specified in the Notice of Termination, provided that the Date of Termination shall be
at least 15 calendar days following the date the Notice of Termination is given.
Notwithstanding the foregoing, in the event Employee is terminated for Misconduct, the
Company may refuse to allow Employee access to the Company’s offices (other than to allow
Employee to collect Employee’s personal belongings under the Company’s supervision) prior to
the Date of Termination.

(d) Mitigation. Employee shall not be required to mitigate the amount of any
payment provided for in this Section 7 by seeking other employment or otherwise, nor shall
the amount of any payment provided for in this Agreement be reduced by any compensation
earned by Employee as a result of employment by another employer, except as otherwise
expressly set forth herein and except that any severance amounts payable to Employee
pursuant to the Company’s severance plan or policy for employees in general shall reduce the
amount otherwise payable pursuant to Section 7(a)(iii)(B).

(e) Excess Parachute Payments. Notwithstanding anything in this
Agreement to the contrary, to the extent that any payment or benefit received or to be
received by Employee hereunder in connection with the termination of Employee’s employment
would, as determined by tax counsel selected by the Company, constitute an “Excess Parachute
Payment” (as defined in Section 280G of the Internal Revenue Code), the Company shall fully
“gross up” such payment so that Employee is in the same “net” after tax position he would
have been if such payment and gross up payments had not constituted Excess Parachute
Payments.

8. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit
Employee’s continuing or future participation in any benefit, bonus, incentive or other plan or
program provided by the Company and for which Employee may qualify, nor shall anything herein limit
or otherwise adversely affect such rights as Employee may have under any Long Term Incentives
granted by the Company.

9. Assignability. The obligations of Employee hereunder are personal and may not be
assigned or delegated by Employee or transferred in any manner whatsoever, nor are such obligations
subject to involuntary alienation, assignment or transfer. The Company shall have the right to
assign this Agreement and to delegate all rights, duties and obligations hereunder, either in whole
or in part, to any parent, affiliate, successor or subsidiary of the Company, so long as the
obligations of the Company under this Agreement remain the obligations of the Company.

10. Notice. For the purposes of this Agreement, all notices and other communications
provided for in this Agreement shall be in writing and shall be deemed to have been duly given when
delivered by Federal Express or similar courier addressed (a) to the Company, at its principal
office address, directed to the attention of the Board with a copy to the Corporate Secretary of
the Company, and (b) to Employee, at Employee’s residence address on the records of the Company, or
to such other address as either Party may have furnished to the other in writing in accordance
herewith except that notice of change of address shall be effective only upon receipt.

11. Severability. In the event that one or more of the provisions set forth in this
Agreement shall for any reason be held to be invalid, illegal, overly broad or unenforceable, the
same shall not affect the validity or enforceability of any other provision of this Agreement, but
this Agreement shall be construed as if such invalid, illegal, overly broad or unenforceable
provisions had never been contained therein; provided, however, that no provision
shall be severed if it is clearly apparent under the circumstances that the Parties would not have
entered into the Agreement without such provision.

12. Successors; Binding Agreement.

(a) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such agreement prior to the effectiveness of any such succession
shall constitute Good Reason under Section 7(a)(iv); provided that, for purposes of
implementing the foregoing, the date on which any such succession becomes effective shall be deemed
the Date of Termination. As used herein, the term “Company” shall include any successor to
its business and/or assets as aforesaid which executes and delivers the Agreement provided for in
this Section 12 or which otherwise becomes bound by all terms and provisions of this Agreement by
operation of law.

(b) This Agreement and all rights of Employee hereunder shall inure to the benefit of and be
enforceable by Employee’s personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees.

13. Miscellaneous.

(a) No provision of this Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by Employee and such officer as may be
specifically authorized by the Board.

(b) No waiver by either Party at any time of any breach by the other Party of, or in
compliance with, any condition or provision of this Agreement to be performed by such other Party
shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.

(c) This Agreement is an integration of the Parties’ agreement; no agreement or
representations, oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either Party, except those which are set forth expressly in this Agreement.
Notwithstanding the foregoing, the Parties are party to an Employee Indemnity Agreement dated July
12, 2007, which remains in full force and effect.

(d) THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF LOUISIANA.

14. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will constitute one and the same
instrument.

15. Arbitration.

(a) Employee and the Company agree that any dispute regarding the covenants herein and/or the
validity of this Agreement and its addenda, if any, shall be resolved through arbitration.
Employee and the Company hereby expressly acknowledge that Employee’s position in the Company and
the Company’s business have a substantial impact on interstate commerce and that Employee’s
development and involvement with the Company and the Company’s business have a national and
international territorial scope commercially. Any arbitration-related matter or arbitration
proceeding of a dispute regarding the covenants herein and/or the validity of this Agreement and
its addenda, shall be governed, heard, and decided under the provisions and the authority of the
Federal Arbitration Act, 9 U.S.C.A. §1, et seq., and shall be submitted for arbitration to the
office of the American Arbitration Association (“AAA”) in New Orleans, Louisiana, on demand
of either Party.

(b) Such arbitration proceedings shall be conducted in New Orleans, Louisiana, and shall be
conducted in accordance with the then-current Employment Arbitration Rules and Mediation Procedures
of the AAA. Each Party shall have the right to be represented by counsel or other designated
representatives. The Parties shall negotiate in good faith to appoint a mutually acceptable
arbitrator; provided, however, that, in the event that the Parties are unable to
agree upon an arbitrator within 30 days after the commencement of the arbitration proceedings, the
AAA shall appoint the arbitrator. The arbitrator shall have the right to award or include in his
or her award any relief that he or she deems proper under the circumstances, including, without
limitation, all types of relief that could be awarded by a court of law, such as money damages
(with interest on unpaid amounts from the date due), specific performance and injunctive relief.
The arbitrator shall issue a written opinion explaining the reasons for his or her decision and
award. The award and decision of the arbitrator shall be conclusive and binding upon both Parties,
and judgment upon the award may be entered in any court of competent jurisdiction. The Parties
acknowledge and agree that any arbitration award may be enforced against either or both of them in
a court of competent jurisdiction, and each waives any right to contest the validity or
enforceability of such award. The Parties further agree to be bound by the provisions of any
statute of limitations that would be otherwise applicable to the controversy, dispute, or claim
that is the subject of any arbitration proceeding initiated hereunder. Without limiting the
foregoing, the Parties shall be entitled in any such arbitration proceeding to the entry of an
order by a court of competent jurisdiction pursuant to a decision of the arbitrator for specific
performance of any of the requirements of this Agreement. The provisions of this Section 15 shall
survive and continue in full force and effect subsequent to and notwithstanding expiration or
termination of this Agreement for any reason. Employee and the Company acknowledge and agree that
any and all rights they may have to resolve their claims by a jury trial are hereby expressly
waived. The provisions of this Section 15 do not preclude Employee from filing a complaint with
any federal, state, or other governmental administrative agency, if applicable.

1

IN WITNESS WHEREOF, the Parties have executed this Agreement on October 9, 2007,
effective for all purposes as of the Effective Date.

THE SHAW GROUP INC.

By: /s/ Clifton S. Rankin

Clifton S. Rankin

General Counsel and Corporate Secretary

EMPLOYEE

/s/ Brian K. Ferraioli

Brian K. Ferraioli

2EX-4.18

WARRANT

THE SECURITIES EVIDENCED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY OTHER APPLICABLE SECURITIES LAWS AND HAVE
BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND SUCH OTHER SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY
BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, HYPOTHECATED OR OTHERWISE DISPOSED
OF, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
A TRANSACTION WHICH IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.

OCTOBER 15, 2007

Warrant to Purchase up to 230,000 shares of Common Stock of Cytokinetics, Incorporated (the
“Company”).

In consideration for Kingsbridge Capital Limited (the “Investor”) agreeing to enter
into that certain Common Stock Purchase Agreement, dated as of the date hereof, between the
Investor and the Company (the “Agreement”), the Company hereby agrees that the Investor or
any other Warrant Holder (as defined below) is entitled, on the terms and conditions set forth
below, to purchase from the Company at any time during the Exercise Period (as defined below) up to
230,000 fully paid and nonassessable shares of common stock, par value $0.001 per share, of the
Company (the “Common Stock”) at the Exercise Price (hereinafter defined), as the same may
be adjusted from time to time pursuant to Section 6 hereof. The resale of the shares of Common
Stock or other securities issuable upon exercise or exchange of this Warrant is subject to the
provisions of the Registration Rights Agreement. Capitalized terms used herein and not otherwise
defined shall have the meanings given them in the Agreement.

Section 1. Definitions.

“Affiliate” shall mean any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by, or is under direct or indirect common control with
any other Person. For the purposes of this definition, “control,” when used with respect
to any Person, means the power to direct the management and policies of such Person, directly or
indirectly through the ownership of voting securities, and the term “controls” and
“controlled” have meanings correlative to the foregoing.

“Closing Price” as of any particular day shall mean the closing price per share of the
Company’s Common Stock as reported by Bloomberg L.P. on such day.

“Exercise Period” shall mean that period beginning six months after the date of this
Warrant and continuing until (i) the expiration of the three-year period thereafter, or (ii) a
Funding Default, subject in each case to earlier termination in accordance with Section 6 hereof.

“Exercise Price” as of the date hereof shall mean seven dollars and ninety nine cents
($7.99), representing the greater of (i) 130% of the average Closing Price of the Common Stock
during the five (5) Trading Days immediately preceding the date of this Warrant or (ii) the Closing
Price of the Common Stock of the Company on the date of this Warrant.

“Funding Default” shall mean a failure by Investor to accept a Draw Down Notice made
by the Company and to acquire and pay for the Shares in accordance therewith within three (3)
Trading Days following the delivery of such Shares to the Investor, provided such Draw Down Notice
was made in accordance with the terms and conditions of the Agreement (including the satisfaction
or waiver of the conditions to the obligation of the Investor to accept a Draw Down set forth in
Article VII of the Agreement), provided further, that such failure was reasonably within the
control of the Investor.

“Per Share Warrant Value” shall mean the difference resulting from subtracting the
Exercise Price from the Closing Price on the Trading Day immediately preceding the Exercise Date.

“Person” shall mean an individual, a corporation, a partnership, a limited liability
company, an association, a trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.

“Principal Market” shall mean the NASDAQ Global Select Market, the NASDAQ Global
Market, the NASDAQ Capital Market, the American Stock Exchange or the New York Stock Exchange,
whichever is at the time the principal trading exchange or market for the Common Stock.

“SEC” shall mean the United States Securities and Exchange Commission.

“Trading Day” shall mean any day other than a Saturday or a Sunday on which the
Principal Market is open for trading in equity securities.

“Warrant Holder” shall mean the Investor or any permitted assignee or permitted
transferee of all or any portion of this Warrant.

“Warrant Shares” shall mean those shares of Common Stock received upon exercise of
this Warrant.

Section 2. Exercise.

(a) Method of Exercise. This Warrant may be exercised in whole or in part (but not as
to a fractional share of Common Stock), at any time and from time to time during the Exercise
Period, by the Warrant Holder by surrender of this Warrant, with the form of exercise attached
hereto as Exhibit A completed and duly executed by the Warrant Holder (the “Exercise
Notice”), to the Company at the address set forth in Section 10.4 of the Agreement, accompanied
by payment of the Exercise Price multiplied by the number of shares of Common Stock for which this
Warrant is being exercised (the “Aggregate Exercise Price”). The later of the date on
which an Exercise Notice or payment of the Exercise Price (unless this Warrant is exercised in
accordance with Section 2(c) below) is received by the Company in accordance with this clause
(a) shall be deemed an “Exercise Date.”

(b) Payment of Aggregate Exercise Price. Subject to paragraph (c) below, payment of
the Aggregate Exercise Price shall be made by wire transfer of immediately available funds to an
account designated by the Company. If the amount of the payment received by the Company is less
than the Aggregate Exercise Price, the Warrant Holder will be notified of the deficiency and shall
make payment in that amount within three (3) Trading Days. In the event the payment exceeds the
Aggregate Exercise Price, the Company will refund the excess to the Warrant Holder within five (5)
Trading Days of receipt.

(c) Cashless Exercise. In the event that the Warrant Shares to be received by the
Warrant Holder upon exercise of the Warrant may not be resold pursuant to an effective registration
statement or an exemption to the registration requirements of the Securities Act of 1933, as
amended, and applicable state laws, the Warrant Holder may, as an alternative to payment of the
Aggregate Exercise Price upon exercise in accordance with paragraph (b) above, elect to effect a
cashless exercise by so indicating on the Exercise Notice and including a calculation of the number
of shares of Common Stock to be issued upon such exercise in accordance with the terms hereof (a
“Cashless Exercise”). If a registration statement on Form S-1 under the Securities Act of
1933, as amended, or such other form as deemed appropriate by counsel to the Company for the
registration for the resale by the Warrant Holder of (x) the shares of Common Stock of the Company
that may be purchased under the Agreement, (y) the Warrant Shares, or (z) any securities issued or
issuable with respect to any of the foregoing by way of exchange, stock dividend or stock split or
in connection with a combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise, has been declared effective by the SEC and remains effective, the
Company may, in its sole discretion, permit the Warrant Holder to effect a Cashless Exercise or
require the Warrant Holder to pay the Exercise Price of the Warrant Shares being purchased by the
Warrant Holder under this Warrant. In the event of a Cashless Exercise, the Warrant Holder shall
receive that number of shares of Common Stock determined by (i) multiplying the number of Warrant
Shares for which this Warrant is being exercised by the Per Share Warrant Value and (ii) dividing
the product by the Closing Price on the Trading Day immediately preceding the Exercise Date,
rounded to the nearest whole share. The Company shall cancel the total number of Warrant Shares
equal to the excess of the number of the Warrant Shares for which this Warrant is being exercised
over the number of Warrant Shares to be received by the Warrant Holder pursuant to such Cashless
Exercise.

(d) Replacement Warrant. In the event that the Warrant is not exercised in full, the
number of Warrant Shares shall be reduced by the number of such Warrant Shares for which this
Warrant is exercised, and the Company, at its expense, shall forthwith issue and deliver to or upon
the order of the Warrant Holder a new Warrant of like tenor in the name of the Warrant Holder,
reflecting such adjusted number of Warrant Shares.

Section 3. Ten Percent Limitation. The Warrant Holder may not exercise this Warrant
such that the number of Warrant Shares to be received pursuant to such exercise aggregated with all
other shares of Common Stock then owned by the Warrant Holder beneficially or deemed beneficially
owned by the Warrant Holder would result in the Warrant Holder owning more than 9.9% of all of such
Common Stock as would be outstanding on such Exercise Date, as determined in accordance with
Section 13(d) of the Exchange Act of 1934 and the rules and regulations promulgated thereunder.

Section 4. Delivery of Warrant Shares.

(a) Subject to the terms and conditions of this Warrant, as soon as practicable after the
exercise of this Warrant in full or in part, and in any event within ten (10) Trading Days
thereafter, the Company at its expense (including, without limitation, the payment by it of any
applicable issue taxes) will cause to be issued in the name of and delivered to the Warrant Holder,
or as the Warrant Holder may lawfully direct, a certificate or certificates for, or make deposit
with the Depositary Trust Company via book-entry of, the number of validly issued, fully paid and
non-assessable Warrant Shares to which the Warrant Holder shall be entitled on such exercise,
together with any other stock or other securities or property (including cash, where applicable) to
which the Warrant Holder is entitled upon such exercise in accordance with the provisions hereof.

(b) This Warrant may not be exercised as to fractional shares of Common Stock. In the event
that the exercise of this Warrant, in full or in part, would result in the issuance of any
fractional share of Common Stock, then in such event the Warrant Holder shall receive the number of
shares rounded to the nearest whole share.

Section 5. Representations, Warranties and Covenants of the Company.

(a) The Warrant Shares, when issued in accordance with the terms hereof, will be duly
authorized and, when paid for or issued in accordance with the terms hereof, shall be validly
issued, fully paid and non-assessable.

(b) The Company shall take all commercially reasonable action and proceedings as may be
required and permitted by applicable law, rule and regulation for the legal and valid issuance of
this Warrant and the Warrant Shares to the Warrant Holder.

(c) The Company has authorized and reserved for issuance to the Warrant Holder the requisite
number of shares of Common Stock to be issued pursuant to this Warrant. The Company shall at all
times reserve and keep available, solely for issuance and delivery as Warrant Shares hereunder,
such shares of Common Stock as shall from time to time be issuable as Warrant Shares.

(d) From the date hereof through the last date on which this Warrant is exercisable, the
Company shall take all steps commercially reasonable to ensure that the Common Stock remains listed
or quoted on the Principal Market.

Section 6. Adjustment of the Exercise Price. The Exercise Price and, accordingly, the
number of Warrant Shares issuable upon exercise of the Warrant, shall be subject to adjustment from
time to time upon the happening of certain events as follows:

(a) Reclassification, Consolidation, Merger, Mandatory Share Exchange, Sale or
Transfer.

(i) Upon occurrence of any of the events specified in subsection (a)(ii) below (the
“Adjustment Events”) while this Warrant is unexpired and not exercised in full, the Warrant
Holder may in its sole discretion require the Company, or any successor or purchasing corporation,
as the case may be, without payment of any additional consideration therefor, to execute and
deliver to the Warrant Holder a new Warrant providing that the Warrant Holder shall have the right
to exercise such new Warrant (upon terms not less favorable to the Warrant Holder than those then
applicable to this Warrant) and to receive upon such exercise, in lieu of each share of Common
Stock theretofore issuable upon exercise of this Warrant, the kind and amount of shares of stock,
other securities, money or property receivable upon such Adjustment Event by the holder of one
share of Common Stock issuable upon exercise of this Warrant had this Warrant been exercised
immediately prior to such Adjustment Event. Such new Warrant shall provide for adjustments that
shall be as nearly equivalent as may be practicable to the adjustments provided for in this
Section 6.

(ii) The Adjustment Events shall be (1) any reclassification or change of Common Stock (other
than a change in par value, as a result of a subdivision or combination of Common Stock or in
connection with an Excluded Merger or Sale), (2) any consolidation, merger or mandatory share
exchange of the Company with or into another corporation (other than a merger or mandatory share
exchange with another corporation in which the Company is a continuing corporation and which does
not result in any reclassification or change other than a change in par value or as a result of a
subdivision or combination of Common Stock), other than (each of the following referred to as an
“Excluded Merger or Sale”) a transaction involving (A) sale of all or substantially all of
the assets of the Company, (B) any merger, consolidation or similar transaction where the
consideration payable to the shareholders of the Company by the acquiring Person consists
substantially of cash or publicly traded securities, or a combination thereof, or where the
acquiring Person does not agree to assume the obligations of the Company under outstanding warrants
(including this Warrant). In the event of an Excluded Merger or Sale, the Company shall deliver a
notice to the Warrant Holder at least 10 days before the consummation of such Excluded Merger or
Sale, the Warrant Holder may exercise this Warrant at any time before the consummation of such
Excluded Merger or Sale (and such exercise may be made contingent upon the consummation of such
Excluded Merger or Sale), and any portion of this Warrant that has not been exercised before
consummation of such Excluded Merger or Sale shall terminate and expire, and shall no longer be
outstanding.

(b) Subdivision or Combination of Shares. If the Company, at any time while this
Warrant is unexpired and not exercised in full, shall subdivide its Common Stock, the Exercise
Price shall be proportionately reduced as of the effective date of such subdivision, or, if the
Company shall take a record of holders of its Common Stock for the purpose of so subdividing, as of
such record date, whichever is earlier. If the Company, at any time while this Warrant is
unexpired and not exercised in full, shall combine its Common Stock, the Exercise Price shall be
proportionately increased as of the effective date of such combination, or, if the Company shall
take a record of holders of its Common Stock for the purpose of so combining, as of such record
date, whichever is earlier.

(c) Stock Dividends. If the Company, at any time while this Warrant is unexpired and
not exercised in full, shall pay a dividend or other distribution in shares of Common Stock to all
holders of Common Stock, then the Exercise Price shall be adjusted, as of the date the Company
shall take a record of the holders of its Common Stock for the purpose of receiving such dividend
or other distribution (or if no such record is taken, as at the date of such payment or other
distribution), to that price determined by multiplying the Exercise Price in effect immediately
prior to such payment or other distribution by a fraction: (i) the numerator of which shall be the
total number of shares of Common Stock outstanding immediately prior to such dividend or
distribution, and (ii) the denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution. The provisions of this subsection
(c) shall not apply under any of the circumstances for which an adjustment is provided in
subsections (a) or (b).

(d) Liquidating Dividends, Etc. If the Company, at any time while this Warrant is
unexpired and not exercised in full, makes a distribution of its assets or evidences of
indebtedness to the holders of its Common Stock as a dividend in liquidation or by way of return of
capital or other than as a dividend payable out of earnings or surplus legally available for
dividends under applicable law or any distribution to such holders made in respect of the sale of
all or substantially all of the Company’s assets (other than under the circumstances provided for
in the foregoing subsections (a) through (c)), then the Warrant Holder shall be entitled to receive
upon exercise of this Warrant in addition to the Warrant Shares receivable in connection therewith,
and without payment of any consideration other than the Exercise Price, the kind and amount of such
distribution per share of Common Stock multiplied by the number of Warrant Shares that, on the
record date for such distribution, are issuable upon such exercise of the Warrant (with no further
adjustment being made following any event which causes a subsequent adjustment in the number of
Warrant Shares issuable), and an appropriate provision therefor shall be made a part of any such
distribution. The value of a distribution that is paid in other than cash shall be determined in
good faith by the Board of Directors of the Company. Notwithstanding the foregoing, in the event
of a proposed dividend in liquidation or distribution to the shareholders made in respect of the
sale of all or substantially all of the Company’s assets, the Company shall deliver a notice to the
Warrant Holder at least 10 days before the consummation of such event, the Warrant Holder may
exercise this Warrant at any time before the consummation of such event (and such exercise may be
made contingent upon the consummation of such event), and any portion of this Warrant that has not
been exercised before consummation of such event shall terminate and expire, and shall no longer be
outstanding.

Section 7. Notice of Adjustments. Whenever the Exercise Price or number of Warrant
Shares shall be adjusted pursuant to Section 6 hereof, the Company shall promptly prepare a
certificate signed by its Chief Executive Officer or Chief Financial Officer setting forth in
reasonable detail the event requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated (including a description of the basis on which the Company’s
Board of Directors made any determination hereunder), and the Exercise Price and number of Warrant
Shares purchasable at that Exercise Price after giving effect to such adjustment, and shall
promptly cause copies of such certificate to be sent by overnight courier to the Warrant Holder.

Section 8. No Impairment. The Company will not, by amendment of its Amended and
Restated Certificate of Incorporation or By-Laws or through any reorganization, transfer of assets,
consolidation, merger, dissolution or issue or sale of securities, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Warrant Holder against impairment.
Without limiting the generality of the foregoing, the Company (a) will not increase the par value
of any Warrant Shares above the amount payable therefor on such exercise, and (b) will take all
such action as may be reasonably necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares on the exercise of this Warrant.

Section 9. Rights As Stockholder. Except as set forth in Section 6 above, prior to
exercise of this Warrant, the Warrant Holder shall not be entitled to any rights as a stockholder
of the Company with respect to the Warrant Shares, including (without limitation) the right to vote
such shares, receive dividends or other distributions thereon or be notified of stockholder
meetings.

Section 10. Replacement of Warrant. Upon receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of the Warrant and, in the case of any
such loss, theft or destruction of the Warrant, upon delivery of an indemnity agreement or security
reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation,
on surrender and cancellation of such Warrant, the Company at its expense will execute and deliver,
in lieu thereof, a new Warrant of like tenor.

Section 11. Choice of Law. This Warrant shall be construed under the laws of the
State of New York.

Section 12. Entire Agreement; Amendments. Except for any written instrument
concurrent or subsequent to the date hereof executed by the Company and the Investor, this Warrant
and the Agreement contain the entire understanding of the parties with respect to the matters
covered hereby and thereby. No provision of this Warrant may be waived or amended other than by a
written instrument signed by the party against whom enforcement of any such amendment or waiver is
sought.

Section 13. Restricted Securities.

(a) Registration or Exemption Required. This Warrant has been issued in a transaction
exempt from the registration requirements of the Securities Act of 1933, as amended, in reliance
upon the provisions of Section 4(2) thereof. This Warrant and the Warrant Shares issuable upon
exercise of this Warrant may not be resold except pursuant to an effective registration statement
or an exemption to the registration requirements of the Securities Act of 1933 and applicable state
laws.

(b) Legend. Any replacement Warrants issued pursuant to Section 2 and Section 10
hereof and, unless a registration statement has been declared effective by the SEC in accordance
with the Securities Act of 1933, as amended, with respect thereto, any Warrant Shares issued upon
exercise hereof, shall bear the following legend:

“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY OTHER APPLICABLE
SECURITIES LAWS AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS. NEITHER THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED, HYPOTHECATED OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO A TRANSACTION WHICH IS EXEMPT
FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.”

(c) No Other Legend or Stock Transfer Restrictions. No legend other than the one
specified in Section 13(b) has been or shall be placed on the share certificates representing the
Warrant Shares and no instructions or “stop transfer orders” (so called “stock transfer
restrictions”) or other restrictions have been or shall be given to the Company’s transfer
agent with respect thereto other than as expressly set forth in this Section 13.

(d) Assignment. Assuming the conditions of Section 13(a) above regarding registration
or exemption have been satisfied, the Warrant Holder may sell, transfer, assign, pledge or
otherwise dispose of this Warrant (each of the foregoing, a “Transfer”), in whole or in
part, but only to an Affiliate of the Warrant Holder. The Warrant Holder shall deliver a written
notice to Company, substantially in the form of the Assignment attached hereto as
Exhibit B, indicating the person or persons to whom the Warrant shall be Transferred and
the respective number of warrants to be Transferred to each assignee. The Company shall effect the
Transfer within ten (10) days, and shall deliver to the Transferee(s) designated by the Warrant
Holder a Warrant or Warrants of like tenor and terms for the appropriate number of shares. In
connection with and as a condition of any such proposed Transfer, the Company may request the
Warrant Holder to provide an opinion of counsel to the Warrant Holder in form and substance
reasonably satisfactory to the Company to the effect that the proposed Transfer complies with all
applicable federal and state securities laws.

(e) Investor’s Compliance. Nothing in this Section 13 shall affect in any way the
Investor’s obligations under any agreement to comply with all applicable securities laws upon
resale of the Common Stock.

Section 14. Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be given in accordance with Section 10.4 of
the Agreement.

Section 15. Miscellaneous. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. The headings in this
Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the
terms hereof. The invalidity or unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision.

Section 16. Company Call Right.

(a) If a Funding Default occurs, the Company shall have the right to demand the surrender of
this Warrant or any remaining portion thereof, Shares and/or cash from the Investor as follows (the
“Call Right”):

(i) If the Investor has not previously exercised this Warrant in full, then the Company shall
have a right to demand the surrender of this Warrant, or remaining portion thereof, from the
Investor without compensation, and the Investor shall promptly surrender this Warrant, or remaining
portion thereof. Following such demand for surrender, this Warrant shall automatically be deemed
to have been canceled and shall have no further force or effect.

(ii) If, prior to receiving a Call Right Notice, the Investor has previously exercised this
Warrant with respect to some or all of the Warrant Shares, and the Investor has not previously sold
such Warrant Shares, then Company shall have a right to purchase from the Investor that number of
shares of Common Stock equal to the number of shares of Common Stock issued in connection with the
exercise(s) of the Warrant, at a repurchase price per share equal to the price per share paid by
the Investor in connection with such exercise(s). For greater certainty, (a) if Warrant Shares
were exercised for cash, the purchase price per share under the Call Right shall be equal to the
Exercise Price, (b) if Warrant Shares were exercised on a cashless exercise basis, the purchase
price per share for such Warrant Shares under the Call Right shall be zero, and (c) if such Warrant
Shares were exercised on both a cash and cashless exercise basis, the purchase price per share
under the Call Right shall be equal to the total amount of cash paid in connection with such cash
exercise(s) divided by the total number of shares of Common Stock issued in connection with all
exercises of the Warrant (whether on a cash or cashless basis).

(iii) If, prior to receiving a Call Right Notice, the Investor has previously exercised this
Warrant with respect to some or all of the Warrant Shares, and the Investor subsequently sold such
Warrant Shares, then the Investor shall remit to the Company the excess, if any, of (x) the
proceeds received by Investor through the sale of such Warrant Shares, over (y) the aggregate
Exercise Price for such Warrant Shares. In the event that the Investor obtained such Warrant
Shares through a Cashless Exercise, then the Investor shall instead remit to the Company all
proceeds received by the Investor through the sale of such Warrant Shares. For the avoidance of
doubt, in the event that the Investor has sold some or all of the Warrant Shares prior to receiving
a Call Right Notice, then the right set forth in this paragraph (iii) shall constitute the sole
Call Right of the Company with respect to such Warrant Shares which have been sold.

(b) Company may exercise the Call Right by delivering a notice (the “Call Right
Notice”) to Investor within thirty (30) days after the occurrence of a Funding Default. On the
tenth (10th) business day following delivery of the Call Right Notice to Investor, Company shall
tender the purchase price, if any, and Investor shall tender shares of Common Stock, if any, to be
sold to Company pursuant to the Call Right Notice, immediately following which Company and Investor
shall consummate such purchase and sale. The Call Right shall survive both the assignment of the
Warrant by the Investor and the disposition of the Warrant Shares by the Investor following
exercise of the Warrant.

1

IN WITNESS WHEREOF, this Warrant was duly executed by the undersigned, thereunto duly
authorized, as of the date first set forth above.

	 	 	 
	CYTOKINETICS, INCORPORATED

	By: /s/ Robert Blum

	 

	
 
	 	Robert Blum
	
 
	 	President and Chief Executive Officer

Investor acknowledges and agrees to the terms and conditions of this Warrant.

	 	 	 
	KINGSBRIDGE CAPITAL LIMITED

	By: /s/ Maria O’Donoghue

	 

	
 
	 	Maria O’Donoghue
	
 
	 	Director

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EXHIBIT A TO THE WARRANT

EXERCISE FORM

CYTOKINETICS, INCORPORATED

The undersigned hereby irrevocably exercises the right to purchase      shares of
Common Stock of Cytokinetics, Incorporated, a Delaware corporation, evidenced by the attached
Warrant, and (CIRCLE EITHER (i) or (ii)) (i) tenders herewith payment of the Aggregate Exercise
Price with respect to such shares in full, in the amount of $     , in cash, by certified or
official bank check or by wire transfer for the account of the Company or (ii) elects, pursuant to
Section 2(c) of the Warrant, to convert such Warrant into shares of Common Stock of Cytokinetics,
Incorporated on a cashless exercise basis, all in accordance with the conditions and provisions of
said Warrant.

The undersigned requests that stock certificates for such Warrant Shares be issued, and a
Warrant representing any unexercised portion hereof be issued, pursuant to this Warrant, in the
name of the registered Warrant Holder and delivered to the undersigned at the address set forth
below.

Dated:     

	 
	Signature of Registered Holder
	Name of Registered Holder (Print)
	Address

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EXHIBIT B TO THE WARRANT

ASSIGNMENT

(To be executed by the registered Warrant Holder desiring to transfer the Warrant)

FOR VALUED RECEIVED, the undersigned Warrant Holder of the attached Warrant hereby sells,
assigns and transfers unto the persons below named the right to purchase      shares of
Common Stock of Cytokinetics, Incorporated (the “Company”) evidenced by the attached
Warrant and does hereby irrevocably constitute and appoint      attorney to transfer the
said Warrant on the books of the Company, with full power of substitution in the premises.

Dated:     

	 
	Signature

	Fill in for new Registration of Warrant:

	Name

	 

	Address

	Please print name and address of assignee (including zip code number)

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