DIRECTOR'S SERVICE AGREEMENT

(1)

ACAMBIS plc a company incorporated in England and Wales (registered no. 2863682), whose registered office is at Peterhouse Technology Park, 100 Fulbourn Road, Cambridge, Cambs. CB1 9PT (the “ Company ”); and

1

DEFINITIONS AND INTERPRETATION

1.1

In this Agreement:

“ affiliate ” means, at any time, any person, company or legal entity directly or indirectly controlled by, controlling or under common control with the Company; and “ control ” means for this purpose ownership either of record or beneficially of 50% (fifty per cent.) or more of the shares of any such person, company or legal entity or the ability to appoint a majority of the board of directors of any such person, company or legal entity or the ability to direct or cause the direction of the management and policies of such person, company or legal entity;

“ associated company ” means a company which is not a subsidiary of another but more than twenty (20) per cent of the equity share capital of which is owned by that other;

“ Board ” means the board of directors of the Company for the time being and includes where the context so permits any committee of the board of directors including without limitation the Nominations Committee, the Remuneration Committee and the Audit Committee;

“ Copyright Work ” and ‘ Design Right Work ” mean respectively any copyright work or design right work originated, conceived, written or made by the Director alone or

with others which relates or may relate to any product, service, process, equipment, system or activity of the Company;

“ Effective Date ” means a business day in August 2004 to be agreed between the parties in writing, or otherwise 31 August 2004;

“ equity share capital ” has the meaning given to it in Section 744 of the Companies Act 1985;

“ Group ” means:

(i)

the Company;

(ii)

any holding company of the Company;

(iii)

any subsidiary of the Company or its holding company or any associated company of any of them;

(iv)

any subsidiary undertaking of the Company or its holding company or any associated company of any of them;

(v)

any associated company of the Company or its holding company or any subsidiary of any of them; and

(vi)

any affiliate of the Company or its holding company;

“ Group Company ” means the Company and any other member of the Group for the time being;

“ holding company ” has the meaning given in Section 736 Companies Act 1985;

“ incapacity ” means any sickness, injury, or other like cause incapacitating the Director from performing his duties under this Agreement and “incapacitated” shall be construed accordingly;

“ Inventions ” means any invention, discovery or improvement including, without prejudice to the generality of the above, any know-how, design process, drawing,

formula, computer program or specification which relates or may relate to any product, service, process, equipment, system or activity of the Company;

“ recognised investment exchange ” has the meaning given in Section 285 of the Financial Services and Markets Act 2000;

“ subsidiary ” has the meaning given in Section 736 Companies Act 1985;

“ subsidiary undertaking ” has the meaning given in Section 258 of the Companies Act 1985; and

“ United Kingdom Listing Authority ” means the Financial Services Authority acting in its capacity as the competent authority for the purposes of Part VI of the Financial Services and Markets Act 2000 including, where the context so permits, any committee, employee, officer or servant to whom any function of the United Kingdom Listing Authority may for the time being be delegated.

1.2

Any reference to a statute or statutory provision shall be deemed to include a reference to any statutory modification or re-enactment of it or any enactment replacing it and any instrument order or regulation made under such statute or statutory provision.

1.3

References to Clauses and Schedules are to clauses of and the schedules to this Agreement.

1.4

The headings in this Agreement are for convenience only and shall not affect its construction or interpretation.

2

APPOINTMENT AND TERM OF EMPLOYMENT

2.1

The Director shall serve the Company as Chief Financial Officer of the Company.

2.2

This agreement and the Directors continuous period of employment shall be deemed to have commenced on the Effective Date. In the event that the Director does not or cannot (for whatever reason) commence his employment on the Effective Date, this Agreement shall terminate and cease to be of further effect, unless agreed otherwise by both parties, and each party shall release the other party from any obligations due

to it hereunder and shall waive any and all rights or claims it may have against the other party in respect of any antecedent breach of this Agreement.min

2.3

The employment of the Director under this Agreement shall (subject to termination as provided in Clause(s) 14 and 15) continue until terminated by either party giving to the other not less than 12 months’ notice in writing.

2.4

Notwithstanding any other terms in this Agreement, the Director shall retire at the Company’s normal retirement age, which is at present 65 (the “ Retirement Age ”) whereupon this Agreement shall terminate. The Company may in its absolute discretion continue to employ the Director after the Retirement Age upon such terms as the parties to this Agreement shall agree. Should the Retirement Age conflict with any statutory or regulatory provision applicable to the Company, the Retirement Age shall be varied to conform with such provision.

3

DUTIES

3.1

The Director shall during his employment under this Agreement:-

3.1.1

exercise the powers and perform the duties normally required of a person holding the post occupied by the Director and appropriate to his status, qualifications and experience including but without prejudice to the generality of the foregoing the duties set out in Schedule 2 and such other duties as the Board may from time to time properly and reasonably assign to him either in his capacity as Director or in connection with the business of the Company or the business of any one or more Group Companies (including serving on the board of or any other executive body or any committee of such Group Companies);

3.1.2

use all proper and reasonable endeavours to promote, develop and extend the business of the Company and the Group Companies; and

3.1.3

at all times and in all respects conform to and comply with the proper and reasonable directions and regulations of the Board and shall, except during holidays and periods of absence due to ill health or other incapacity, devote

his full time and attention to the performance of his duties under this Agreement.

3.2

The Director’s normal place of work shall be anywhere in the United Kingdom or any other location which the Board may require for the proper performance and exercise of his duties and powers and provided he may be required by the Company to travel (whether within or outside the United Kingdom) on the business of the Company or any Group Company.

3.3

If the Company requires the Director to work permanently at a place which necessitates a move from his present address the Company will reimburse the Director for all expenses directly and reasonably incurred as a result of the Company’s requirement as agreed between the Company and the Director.

3.4

The Director shall keep the Board properly informed (in writing if so required by the Board) of his conduct of all business on behalf of the Company and any Group Company and shall give to the Board all such information as to the affairs of the Company and the Group as it shall properly and reasonably require.

3.5

The Director shall not during the term of this Agreement without the written consent of the Board make or seek to make on behalf of himself or (otherwise than properly in the performance of his duties to the Company) on behalf of any other person, firm or company any contract or other arrangement of a commercial nature with any actual or prospective customer, contractor or supplier of the Company or any Group Company.

3.6

The Director shall not during the term of this Agreement without the consent of the Board seek or accept from any actual or prospective customer, contractor or supplier of the Company or any Group Company any gift, gratuity or benefit of more than a trivial value or any hospitality otherwise than properly in the performance of his duties to the Company or any Group Company of a kind and value not lavish, extravagant or inappropriate.

3.7

The Company may during any period of notice to terminate the employment of the Director under this Agreement or for the purpose of investigating a complaint against

the Director or otherwise where in the opinion of the Board the interests of the Company so require suspend or exclude the Director for any period not exceeding six months from the performance of his duties on full salary and with full entitlements to other benefits and require the Director to stay away from any premises of the Company or any Group Company and to have no contact with all or any officers, employees, agents, customers, clients, suppliers or other parties involved, engaged or interested in the operation of the business of the Company or any Group Company or any part of them or any joint venture in which they may be engaged or interested and during the whole or any part of any period of suspension to undertake such work as the Board may reasonably require and the parties agree and declare that there is no obligation on the part of the Company to provide the Director with work to do.

4

OFFICE OF DIRECTOR

During his employment under this Agreement the Director shall not (without prejudice to the Director’s rights and remedies under this Agreement and at common law in circumstances constituting constructive dismissal) do anything that would cause him to be disqualified from continuing to act as a director of the Company.

5

REMUNERATION

5.1

Salary

The Director shall be paid by way of remuneration for his services under this Agreement a salary of £175,000 per annum (or such greater amount as the Board may in its discretion from time to time decide or award pursuant to the Company’s annual salary review that currently takes place on 1 July) inclusive of any directors’ fees payable to him under the articles of association of the Company and any Group Companies. The salary shall accrue from day to day and be paid by equal monthly instalments in arrear on or about the 25th day (excluding weekends and public holidays) of every month or otherwise in accordance with the Company’s policy from time to time. The Company reserves the right to deduct or withhold from the Director’s salary any amounts owing to the Company by the Director.

5.2

Car Allowance

The Director shall during the term of this Agreement be paid a car allowance of £10,000 per annum (or such greater amount as the Board may in its discretion from time to time decide or award) to contribute towards the capital cost of a motor vehicle, such allowance to be paid monthly at the same time as salary.

5.3

Schemes

5.3.1

The Director shall be entitled to participate as from the date of this Agreement in The Acambis 1995 Savings-Related Share Option Scheme, The Acambis 1996 Approved Share Option Scheme, the Acambis 1999 Share Option Plan and the Acambis Share Incentive Plan (together the “ Schemes ”) for the time being in force subject to the rules applicable to the Schemes as amended or varied from time to time at the Board’s discretion and subject always in the case of any Scheme where applicable to the exercise by the Board of its discretion to grant options or rights under that Scheme.

5.3.2

If the Director’s employment is terminated for any reason whatsoever, and whether lawfully or unlawfully, the Director agrees that he shall not be entitled by way of damages for breach of contract, dismissal or compensation for loss of office or otherwise to any sum, shares or other benefits to compensate him for the loss or diminution in value of any actual or prospective rights, benefits or expectations under or in relation to any Scheme (or any other employee benefit scheme or arrangement introduced from time to time and in respect of which the Director becomes entitled to participate).

5.4

Pension Scheme

Subject to applicable Inland Revenue limits and requirements concerning employer contributions during the employment of the Director under this Agreement, pay as a contribution into an Executive Pension Plan an amount per annum equal to 18 per

cent. of the Director’s basic salary. Payment of contributions will be made on a monthly basis, to be paid monthly at the same time as salary.

6

EXPENSES AND COMMUNICATIONS

6.1

The Company shall by way of reimbursement pay or procure to be paid to the Director all reasonable travelling, hotel, entertainment and other expenses (including payment of business mileage at the Company’s rate applying from time to time) properly incurred by him in or about the performance of his duties under this Agreement provided that the Director supplies such evidence as to such expenses as the Board may reasonably require.

6.2

The Company shall provide the Director with a telephone and facsimile in his private residence and also a mobile telephone and shall pay all rental and call charges properly incurred in respect thereof provided always that the Director if required by the Company provides evidence reasonably satisfactory to the Chairman of the rental and call charges incurred.

7

LIFE ASSURANCE

The Company shall during the term of this Agreement provide the Director with life assurance cover which in the event of the Director’s death while employed under this Agreement shall pay to the Director’s chosen dependants a sum equal to four times his basic annual salary, subject to any limits, terms and conditions imposed by statute or the relevant insurance company including the requirement for a medical examination.

8

MEDICAL EXPENSES INSURANCE, PHI AND CRITICAL ILLNESS COVER

8.1

The Company shall during the term of this Agreement cover the cost of membership for the Director and the Director’s spouse (and dependants up to the age of 24) of an appropriate private patients medical plan with “BUPA” or such other reputable medical expenses insurance scheme as the Company shall decide from time to time, subject to the rules of the scheme and the approval of his application for membership by the relevant insurer.

8.2

The Company shall effect permanent health insurance (“PHI”) for the benefit of the Director upon such terms as shall provide for the payment to the Director throughout the period of his ill-health or disability with the exception of the first 26 consecutive weeks thereof of sums at a rate per annum equal to 75 per cent. of pensionable salary on the date such absence commences less the amount of a single person’s state sickness benefits. If the provider of any benefit under this Clause 8 or under Clause 7 shall refuse to provide cover to the Director, the Company shall notify the Director in writ