Document:

Exhibit 10.30

                              EMPLOYMENT AGREEMENT

      EMPLOYMENT AGREEMENT (this "Agreement") dated as of June 14, 2004 (the
"Effective Date"), between Enzon Pharmaceuticals, Inc. (the "Company"), a
Delaware corporation with offices in Bridgewater, New Jersey, and Kenneth J.
Zuerblis (the "Executive").

      WHEREAS, the Company is a biopharmaceutical company engaged in developing
advanced therapeutics for life threatening diseases; and

      WHEREAS, Executive has been employed by the Company since 1992 in various
capacities, currently as it's Vice President, Finance and Chief Financial
Officer;

      WHEREAS, the Company wishes the Executive to continue to render services
for the Company, on the terms and conditions set forth in this Agreement, and
the Executive wishes to continue to be employed by the Company on such terms and
conditions;

      WHEREAS, the Company and Executive are parties to a Change of Control
Agreement dated as of January 20, 1995 (the "Original Agreement"), which the
parties intend to be superseded by this Agreement;

      NOW, THEREFORE, in consideration of the premises, the mutual agreements
set forth below and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:

      1. Employment; Effective Date of Agreement.

            The Company agrees to continue to employ the Executive, and the
Executive accepts such continued employment and agrees to perform services for
the Company, for the period and upon the other terms and conditions set forth in
this Agreement. The provisions of this Agreement are effective as of the
Effective Date. This Agreement supercedes any prior understandings, agreements,
or representations, written or oral, relating to the subject matter hereof,
including, but not limited to, the Original Agreement, which is hereby
terminated.

      2. Term.

            Unless terminated at an earlier date in accordance with Section 9
hereof, the term of the Executive's employment pursuant to this Agreement shall
be from the Effective Date and shall extend through March 31, 2005, subject to
automatic renewal for an additional twenty-four (24) months, unless either party
hereto receives written notice from the other party no later than January 31,
2005 (a "notice of non-renewal") that such other party does not wish for the
term hereof to continue beyond March 31, 2005, in which event the term hereof
shall end on March 31, 2005 (the period during which the Executive is employed
by the Company pursuant to this Section 2 being the "Term").

      3. Position and Duties.

      (a) Service with Company. During the term of the Executive's employment,
the Executive agrees to perform such employment duties for the Company in an
executive and managerial capacity commensurate with the position of Executive
Vice President and Chief Financial Officer of the Company. As Executive Vice
President and Chief Financial Officer, Executive shall have the authority and
duty generally to supervise and direct the financial and accounting activities
of the Company, subject to the control and direction of the Chief Executive
Officer of the Company, the Board of Directors of the Company (the "Board"), or
any duly authorized Committee of the Board

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      (b) Performance of Duties. The Executive agrees to serve the Company
faithfully and to the best of his ability and to devote his full time, attention
and efforts to the business and affairs of the Company during his employment by
the Company. Executive will not render or perform services for any other
corporation, firm, entity or person which are inconsistent with the provisions
of this Agreement. While he remains employed by the Company, the Executive may
participate in reasonable charitable activities and personal investment
activities so long as such activities do not materially conflict or interfere
with the performance of his obligations under this Agreement. Notwithstanding
the foregoing, Executive shall be permitted to serve on up to two corporate
boards of directors, provided such service does not materially impair the
fulfillment of his responsibilities and duties as Executive Vice President and
Chief Financial Officer of the Company.

      (c) Executive Representations and Warranties. Executive represents and
warrants to the Company that his entering into and performing this Agreement
will not constitute a breach of any employment, consulting, non-competition or
other agreement to which he is a party or any other obligation of Executive.
Executive represents and warrants to the Company that he has not been debarred
under the Generic Drug Enforcement Act of 1992 (Sections 306-308 of the Federal
Food, Drug and Cosmetic Act) nor has Executive received notice of action or
threat of action of debarment. Executive shall comply with the Company's
Substance Abuse Policy during the term of this Agreement.

      4. Compensation.

      (a) Base Salary. As compensation in full for all services to be rendered
by the Executive under this Agreement, the Company shall pay to the Executive,
less applicable deductions and withholdings, a ratable base salary (the "Base
Salary") of Three Hundred Twenty Thousand Dollars ($320,000) per year, which
Base Salary shall be paid in accordance with the Company's normal payroll
procedures and policies for its senior management. The compensation payable to
Executive during each year after the first year of the Executive's employment
shall be established by the Board or the Compensation Committee thereof
following an annual performance review by the Board, but in no event shall the
Base Salary for any successive year of the Term be less than the Base Salary in
effect during the previous year of the Term.

      (b) Annual Bonus. Executive shall be entitled to participate in the
Company's bonus plan for management and any successor bonus plan covering
management with respect to each fiscal year of the Company ending during the
Term (the "Bonus Plan"). Under the Bonus Plan, the Executive shall be eligible
to receive a performance-based cash bonus for each fiscal year ending during the
Term in an amount, and based on individual and/or corporate objectives, targets
and factors (and evaluation as to the extent of achievement thereof), to be
established and determined by the Board in its discretion following consultation
between the Chief Executive Officer and Executive prior to, or within sixty (60)
days after the commencement of, each fiscal year. Under the Bonus Plan for the
Executive, (i) the minimum cash bonus shall be zero (0), (ii) the target cash
bonus shall equal 50% of the Base Salary (the "Target Bonus"), and (iii) the
maximum cash bonus shall equal 82.5% of Base Salary.

      (c) Participation in Benefit Plans. While he is employed by the Company,
Executive shall also be eligible to participate in any employee benefit plans or
programs which may be offered by the Company to the extent that Executive meets
the requirements for each individual plan and in all other plans in which
Company executives participate. Notwithstanding the foregoing and subject to
Section 10(h), the Company and Executive acknowledge and agree that, although
the Company intends to adopt a severance plan or plans for senior executives in
the near future, it is not intended that Executive participate in such severance
plan(s), it being understood that severance benefits payable to Executive will
be governed solely by this Agreement. Further, it is understood that the Company
may enter into individual contractual arrangements with other executives for
benefits, and that nothing herein shall require the Company to provide the same
benefits or level of benefits to Employee. The Company provides no assurance as
to the adoption or continuance of any particular employee benefit plan or
program, and Executive's participation in any such plan or program shall be
subject to the provisions, rules and regulations applicable thereto.

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      (d) Expenses. The Company will pay or reimburse Executive for all
reasonable and necessary out-of-pocket expenses incurred by him in the
performance of his duties under this Agreement, subject to the Company's normal
policies for expense verification. The Company will also bear the cost of a
corporate country club membership for use by Executive during the Term.

      (e) Issuance of Options. Upon execution of this Agreement, Executive shall
be granted a non-qualified option to purchase Twenty-Five Thousand (25,000)
shares of common stock, subject to the terms of a customary option grant
agreement and the 2001 Stock Incentive Plan, with such changes as the
Compensation Committee of the Board of Directors has approved. Executive
acknowledges that he has received and reviewed a copy of the 2001 Stock
Incentive Plan. At the discretion of the Board of Directors (or its applicable
committee), Executive shall be entitled to receive further grants of stock
options, subject to the terms of the Company's Non-Qualified Stock Option Plan,
as amended (the "Option Plan"), or the Company's 2001 Incentive Stock Plan
("2001 Incentive Stock Plan") or such other equity compensation plans that may
be adopted by the Company from time to time. Nothing contained herein shall be
deemed to guarantee Executive any additional grants of options, restricted
stock, other equity awards or securities of the Company.

      (f) Restricted Stock. Upon execution of this Agreement, Executive shall be
granted Twenty-Seven Thousand Five Hundred (27,500) shares of restricted stock,
subject to the terms of the Restricted Stock Award Agreement attached hereto as
Exhibit A and the 2001 Stock Incentive Plan. Executive acknowledges that he has
received and reviewed a copy of the 2001 Stock Incentive Plan. At the discretion
of the Board of Directors (or its applicable committee), Executive shall be
entitled to receive additional grants of restricted stock, subject to the terms
of the 2001 Incentive Stock Plan or such other equity compensation plans that
may be adopted by the Company from time to time. Nothing contained herein shall
be deemed to guarantee Executive any additional grants of options, restricted
stock, other equity awards or securities of the Company.

      (g) Vacation. Executive shall be entitled to vacations in accordance with
the compensated time off policy of the Company with respect to its senior
management, in effect from time to time.

      (h) Certain Legal Expenses. In the event of any legal proceedings,
including without limitation arbitration, between the Company and Executive with
respect to any dispute hereunder in which Executive prevails over the Company,
the Company shall pay Executive's reasonable legal fees and expenses incurred in
connection with such proceedings.

      5. Noncompetition and Confidentiality Covenant.

      (a) Noncompetition. The "Noncompete Period" shall be:

            (i) the Term of this Agreement plus the term of any consulting
agreement between Executive and the Company entered into upon, or in connection
with, the termination of his employment, and

            (ii) (A) with respect to any activity covered by clause (y) or (z)
below, the one (1) year period immediately following termination of Executive's
post-employment consultancy, or if no consulting agreement is entered into,
termination of his employment with the Company and (B) with respect to any
activity covered by clause (x) below, the two (2) year period immediately
following termination of Executive's post-employment consultancy, or if no
consulting agreement is entered into, termination of his employment with the
Company (whether any such termination covered by clause (A) or (B) is with or
without Cause or with or without Good Reason, or whether such termination is
occasioned by the Employee or the Company, or whether such termination occurs as
a result of the expiration or nonrenewal of the Term).

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      In consideration for the compensation payable to Executive pursuant to
this Agreement, including without limitation the restricted stock granted to
Executive hereunder, during the Noncompete Period, Executive will not directly,
or indirectly, whether as an officer, director, stockholder, partner,
proprietor, associate, employee, consultant, representative or otherwise,
become, or be interested in or associated with any other person, corporation,
firm, partnership or entity, engaged to a significant degree in (x) developing,
manufacturing, marketing or selling enzymes, protein-based biopharmaceuticals or
other pharmaceuticals that are modified using polyethylene glycol ("PEG"), (y)
developing, manufacturing, marketing or selling single-chain antigen-binding
proteins or (z) any activity which is in competition with or resembles any
proprietary technology, process, product or area of business in which the
Company is engaged or with Executive's participation has been actively planning
to be engaged from time to time during the term of this Agreement. For purposes
of the preceding sentence, to determine whether any entity is engaged in such
activities to a "significant degree", comparison will be made to the Company's
operations at that time. In other words, an entity will be deemed to be engaged
in an activity to a significant degree if the number of employees and/or amount
of funds devoted by such entity to such activity would be material to the
Company's operations at that time. The provisions contained in this Section 5(a)
shall survive the termination of Executive's employment pursuant to Section 9
hereof or otherwise. In the event Executive breaches any of the covenants set
forth in this Section 5(a), the running of the period of restriction set forth
herein shall be tolled for the period during which the breach exists and
recommence upon Executive's compliance with the terms of this Section 5(a).

      (b) Confidentiality.

            (i) Executive acknowledges that, by reason of his employment by the
      Company, he will have access to confidential information of the Company,
      including, but not limited to, information and knowledge pertaining to
      products, inventions, discoveries, improvements, innovations, designs,
      ideas, trade secrets, proprietary information, manufacturing, packaging,
      advertising, marketing, distribution and sales methods, sales and profit
      figures, customer and vendor lists and relationships between the Company
      and dealers, distributors, sales representatives, wholesalers, customers,
      suppliers and others who have business dealings with them ("Confidential
      Information"). The Employee acknowledges that such Confidential
      Information is a valuable and unique asset of the Company and covenants
      that, both during and after the Term, he/she will not disclose any
      Confidential Information to any person or entity, nor use the Confidential
      Information for any purpose, except as his duties as an employee of the
      Company may require, without the prior written authorization of the Board.
      The obligation of confidentiality imposed by this Section shall not apply
      to Confidential Information that otherwise becomes generally known to the
      public through no act of the Employee in breach of this Agreement or any
      other party in violation of an existing confidentiality agreement with the
      Company or which is required to be disclosed by court order or applicable
      law.

            (ii) All records, designs, patents, business plans, financial
      statements, manuals, memoranda, lists, research and development plans and
      products, and other property delivered to or compiled by Executive for or
      on behalf of the Company or its vendors or customers that pertain to the
      business of the Company shall be and remain the property of the Company,
      and be subject at all times to its discretion and control. Likewise, all
      formulae, correspondence, reports, records, charts, advertising materials
      and other similar data pertaining to the business, activities or future
      plans of the Company (and all copies thereof) that are collected by
      Executive shall be delivered promptly to the Company without request by it
      upon termination of Executive's employment.

      (c) Proprietary Information. Executive is hereby prohibited from ever
using any of the Company's proprietary information or trade secrets to conduct
any business, except for the Company's business while Executive is employed by
the Company.

      (d) Survival of Covenants. The provisions contained in Section 5(b) and
(c) shall survive the

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termination of Executive's employment pursuant to Section 9 hereof or otherwise.

      (e) Nonsolicitation of Employees. During the Noncompete Period (utilizing
the period of time reflected in Sections 5(a)(i) and 5(a)(ii)(B) hereof),
Executive shall not, directly or indirectly, personally or through others,
encourage to leave employment with the Company, employ or solicit for
employment, or advise or recommend to any other person, firm, business, or
entity that they employ or solicit for employment, any employee of the Company
or of any parent, subsidiary, or affiliate of the Company. The provisions of
this Section 5(e) shall survive the termination of Executive's employment.

      6. Ventures.

      If, during the term of his employment, the Executive is engaged in or
associated with the planning or implementing of any project, program, venture or
relationship involving the Company and a third party or parties, all rights in
such project, program, venture or relationship shall belong to the Company.
Except as approved by the Board, the Executive shall not be entitled to any
interest in such project, program, venture or relationship or to any commission,
finder's fee or other compensation in connection therewith.

      7. Acknowledgment.

      Executive agrees that the covenants and agreements contained in Section 5
hereof are the essence of this Agreement; that each of such covenants is
reasonable and necessary to protect and preserve the Company's interests,
properties and business; that irreparable loss and damage will be suffered by
the Company should Executive breach any of such covenants and agreements; that
each of such covenants and agreements is separate, distinct and severable not
only from the other of such covenants and agreements but also from the other and
remaining provisions of this Agreement; that the unenforceability or breach of
any such covenants or agreement shall not affect the validity or enforceability
of any other such covenant or agreement or any other provision of this
Agreement; and that, in addition to other remedies available to it, the Company
shall be entitled to both temporary and permanent injunctions and any other
rights or remedies it may have, at law or in equity, to end or prevent a breach
or contemplated breach by Executive of any such covenants or agreements.

      (a) Geographic Extent of Executive's Obligations Concerning Section 5.
Given the nature of the Company's business, the restrictions contained in
Section 5 cannot be limited to any particular geographic region. Therefore, the
obligations of Executive under Section 5 shall apply to any geographic area in
which the Company (i) has engaged in business during the Term through its
investment or trading activities or otherwise, or (ii) has otherwise established
its goodwill, business reputation or any customer or vendor relations.

      (b) Limitation of Covenant. Ownership by Executive, as a passive
investment, of less than one percent of the outstanding shares of capital stock
of any corporation listed on a national securities exchange or publicly traded
on Nasdaq shall not constitute a breach of Section 5.

      (c) Blue Pencil Doctrine. If the duration or geographical extent of, or
business activities covered by, Section 5 are in excess of what is valid and
enforceable under applicable law, then such provision shall be construed to
cover only that duration, geographical extent or activities that are valid and
enforceable. Executive acknowledges the uncertainty of the law in this respect
and expressly stipulates that this Agreement be given the construction which
renders its provisions valid and enforceable to the maximum extent (not
exceeding its express terms) possible under applicable law.

      (d) Disclosure. Executive shall disclose to any prospective employer,
prior to accepting or continuing employment, the existence of Section 5 of this
Agreement and shall provide such prospective employer with a copy of Section 5
of this Agreement. The obligation imposed by this subsection 7(d) shall
terminate two years after the end of the Term.

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      8. Intellectual Property and Related Matters.

      (a) Disclosure and Assignment. Executive will promptly disclose in writing
to the Company complete information concerning each and every product,
invention, discovery, practice, process or method, whether patentable or not,
made, developed, perfected, devised, conceived or first reduced to practice by
Executive, either solely or in collaboration with others, during the Term, or
six months thereafter, whether or not during regular working hours, relating
either directly or indirectly to, or useful in, any aspect of the business,
products, practices or techniques of the Company ("Developments"). Executive, to
the extent that he has the legal right to do so, hereby acknowledges that any
and all of the Developments are the property of the Company and hereby assigns
and agrees to assign to the Company any and all of Executive's right, title and
interest in and to any and all of the Developments. At the request of the
Company, Executive will confer with the Company and its representatives for the
purpose of disclosing all Developments to the Company as the Company shall
reasonably request during the period ending one year after the Term.

      (b) Limitation on Section 8(a). The provisions of Section 8(a) shall not
apply to any Development, for which no equipment, supplies, facility or trade
secret information of the Company was used and which was developed entirely on
Executive's own time, unless (a) the invention relates (i) directly to the
business of the Company, or (ii) to the Company's actual or demonstrably
anticipated research or development, or (b) the invention results from any work
performed by Executive for the Company.

      (c) Assistance of Executive. Upon request by the Company and without
further compensation therefore, but at no expense to Executive, Executive will
do all lawful acts, including but not limited to, the execution of papers and
lawful oaths and the giving of testimony, that in the opinion of the Company,
may be necessary or desirable in enforcing the Company's intellectual property
and trade secret rights, and for perfecting, affirming and recording the
Company's complete ownership and title thereto.

      (d) Records. Executive will keep complete, accurate and authentic
accounts, notes, data and records of the Developments in the manner and form
requested by the Company. Such accounts, notes, data and records shall be the
property of the Company, and, upon the earlier of its request or the conclusion
of his employment, Executive will promptly surrender same to it.

      (e) Copyrightable Material. All right, title and interest in all
copyrightable material that Executive shall conceive or originate, either
individually or jointly with others, and which arise out of the performance of
this Agreement, will be the property of the Company and are by this Agreement
assigned to the Company along with ownership of any and all copyrights in the
copyrightable material. Upon request and without further compensation therefore,
but at no expense to Executive, Executive shall execute all papers and perform
all other acts necessary to assist the Company to obtain and register copyrights
on such materials in any and all countries. Where applicable, works of
authorship created by Executive for the Company in performing his
responsibilities under this Agreement shall be considered "works made for hire,"
as defined in the U.S. Copyright Act.

      (f) Know-How and Trade Secrets. All know-how and trade secret information
conceived or originated by Executive that arises out of the performance of his
obligations or responsibilities under this Agreement or any related material or
information shall be the property of the Company, and all rights therein are by
this Agreement assigned to the Company.

      (g) Survival. The obligations imposed by this Section 8 on Executive shall
survive termination of this Agreement pursuant to Section 9 or otherwise.

      9. Termination of Employment.

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      (a) Grounds for Termination. Executive's employment pursuant to this
Agreement shall terminate prior to the expiration of the Term in the event that
at any time:

            (i) Executive dies,

            (ii) Executive becomes disabled (as defined below), so that he
      cannot perform the essential functions of his position with or without
      reasonable accommodation,

            (iii) The Board elects to terminate Executive's employment for
      "Cause" and notifies Executive in writing of such election, or

            (iv) The Board elects to terminate Executive's employment without
      "Cause" and notifies Executive in writing of such election.

      If Executive's employment is terminated pursuant to clause (i), (ii) or
(iii) of this Section 9(a), such termination shall be effective immediately. If
Executive's employment is terminated pursuant to subsection (iv) of this Section
9(a), such termination shall be effective 30 days after delivery of the notice
of termination; provided, however, that the Company may elect to make such
termination effective immediately, in which case Executive's employment shall
terminate immediately upon delivery of the notice of termination, but the
Company shall continue to pay him his salary during such 30-day period and the
last day of such 30-day period shall be deemed to be the date of termination of
his employment for purposes of any pro rata calculations and determination of
post-termination periods under this agreement.

      (b) "Cause" Defined. "Cause" shall mean (i) the willful engaging by
Executive in illegal conduct or gross misconduct which is demonstrably and
materially injurious to the Company, (ii) Executive's refusal to perform his
obligations to the Company hereunder (other than any such failure resulting from
illness or incapacity), which refusal is demonstrably and materially injurious
to the Company and is not halted and cured to the reasonable satisfaction of the
Company within 30 days after notice thereof by the Company to Executive, or
(iii) Executive's breach of his obligations under this Agreement, which breach
is demonstrably and materially injurious to the Company and is not halted and
cured to the reasonable satisfaction of the Company within 30 days after notice
thereof by the Company to Executive. For purposes of this Section 9(b), no act
or failure to act on Executive's part shall be deemed "willful" unless done, or
omitted to be done, by Executive not in good faith and without reasonable belief
that Executive's action of omission was in the best interest of the Company.
Notwithstanding the foregoing, with respect to the definitions of Cause set
forth in clauses (i), (ii) and (iii) above, Executive shall not be deemed to
have been terminated for Cause unless and until the Company delivers to
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the Board (not including
Executive if he shall then serve as a director) at a meeting of the Board called
and held for such purpose (after reasonable notice to Executive and an
opportunity for Executive, together with counsel, to be heard before the Board)
finding that, in the good faith opinion of the Board, Executive engaged in
conduct set forth above and specifying the particulars thereof in reasonable
detail.

      (c) Termination by Executive for Good Reason. Executive's employment
pursuant to this Agreement may terminate prior to the expiration of the Term in
the event Executive has a "Good Reason" to terminate his employment, which shall
mean the following:

            (i) Any material adverse change in Executive's status or position as
      an officer of the Company, including, without limitation, any material
      adverse change in Executive's status or position as a result of a
      diminution in Executive's duties, responsibilities or authority as of the
      Effective Date (or any status or position to which Executive may be
      promoted after the Effective Date) or the assignment to Executive of any
      duties or responsibilities which are inconsistent with Executive's status
      or position, or any removal of Executive from or any failure to reappoint
      or reelect Executive to such position; provided, however, that none of the
      foregoing shall be deemed

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      to have occurred as long as Executive remains, in actual practice, the
      Company's most senior finance and investor relations executive; or

            (ii) The material breach by the Company of its obligations under
      this Agreement; or

            (iii) A reduction in Executive's annual Base Salary as the same may
      be increased from time to time; or

            (iv) The relocation of the Company's principal executive offices to
      a location more than thirty-five (35) miles from the location of such
      offices (other than a relocation that results in the location of the
      offices in closer proximity to Executive's residence) or the Company
      requiring Executive to be based anywhere other than the Company's
      principal executive offices, except for required travel substantially
      consistent with Executive's business obligations.

      Prior to the Executive being permitted to terminate his employment for
Good Reason, the Company shall have sixty (60) days to cure any such alleged
breach, assignment, reduction or requirement, after Executive provides the
Company written notice of the actions or omissions constituting such breach,
assignment, reduction or requirement.

      (d) "Change of Control" Defined. "Change of Control" means the following:

            (i) "Board Change" which, for purposes of this Agreement, shall have
occurred if, over any twenty-four month period, a majority of the seats (other
than vacant seats) on the Company's Board were to be occupied by individuals who
were neither (A) nominated by at least one-half (1/2) of the directors then in
office (but excluding, for purposes of determining directors then in office, any
director whose initial assumption of office occurs as a result of either an
actual or threatened election contest, or other actual or threatened
solicitation of proxies by or on behalf of a Person other than the Company or
its Board of Directors) nor (B) appointed by directors so nominated, or

            (ii) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934
(the "Exchange Act"), (a "Person") of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of a majority of the then
outstanding voting securities of the Company (the "Outstanding Company Voting
Securities"); provided, however, that the following acquisitions shall not
constitute a Change of Control: (A) any acquisition by the Company, or (B) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or (C)
any public offering by the Company of its voting securities; or

      (iii) a consolidation of the Company with another entity, or a merger of
the Company with another entity in which neither the Company nor a corporation
that, prior to the merger, was a subsidiary of the Company shall be the
surviving entity; or

      (iv) a merger of the Company following which either the Company or a
corporation that, prior to the merger, was a subsidiary of the Company, shall be
the surviving entity and a majority of the Outstanding Company Voting Securities
is owned by a Person or Persons who were not "beneficial owners," as defined in
Rule 13d-3 of the Exchange Act, of a majority of the Outstanding Company Voting
Securities immediately prior to such merger; or

      (v) a voluntary or involuntary liquidation of the Company; or

      (vi) a sale or disposition by the Company of at least 80% of its assets in
a single transaction or a series of transactions (other than a sale or
disposition of assets to a subsidiary of the Company in a transaction not
involving a Change of Control or a change in control of such subsidiary).
Transactions in

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which the Executive is part of the acquiring group do not constitute a Change of
Control.

      (e) "Disabled" Defined. As used in this Agreement, the term "disabled"
means any mental or physical condition that renders Executive unable to perform
the essential functions of his position, with or without reasonable
accommodation, for a period in excess of 180 days.

      (f) Surrender of Records and Property. Upon termination of his employment
with the Company, Executive shall deliver promptly to the Company all records,
manuals, books, lists, blank forms, documents, letters, memoranda, notes,
notebooks, reports, data, tables, calculations or copies thereof that relate in
any way to the business, products, practices or techniques of the Company, and
all other property, trade secrets and confidential information of the Company,
including, but not limited to, all documents that in whole or in part contain
any trade secrets or confidential information of the Company, which in any of
these cases are in his possession or under his control.

      10. Effect of Termination.

      (a) Termination Without Cause or for Good Reason or Upon the Company's
Notice of Non-Renewal.

            In the event the Company terminates Executive's employment as the
Company's Executive Vice President and Chief Financial Officer without Cause
pursuant to Section 9(a)(iv) hereof, Executive terminates his employment for
Good Reason pursuant to Section 9(c) hereof, or the Company provides a notice of
non-renewal of the Term under Section 2 hereof,

            (i) Executive shall receive cash payments equal to his annual Base
Salary at the time of such termination and such payments shall be made in a lump
sum within 10 days after the date of termination; and

            (ii) Executive shall receive a cash payment equal to the Target
Bonus (based on the Base Salary at the time of such termination) which would
have been payable for the fiscal year which commences immediately following the
date of termination and such payment shall be made in a lump sum within 10 days
after the date of termination; and

            (iii) if Executive, and any spouse and/or dependents ("Family
Members") has medical and dental coverage on the date of such termination under
a group health plan sponsored by the Company, the Company will reimburse
Executive for the total applicable premium cost for medical and dental coverage
under the Consolidated Omnibus Budget Reconciliation Act of 1986, 29 U.S.C.
Sections 1161-1168; 26 U.S.C. Section 4980B(f), as amended, and all applicable
regulations (referred to collectively as "COBRA") for Executive and his Family
Members for a period of up to eighteen (18) months commencing on the date of
such termination and will continue to pay Executive an amount equal to such
COBRA reimbursement during the eighteen (18) month period following such initial
eighteen (18) month period after such termination; provided, that the Company
shall have no obligation to reimburse Executive for the premium cost of COBRA
coverage as of the date Executive and his Family Members become eligible to
obtain comparable benefits from a subsequent employer; and

            (iv) Executive shall receive cash payments equal to any unpaid Base
Salary through the date of termination and such payments shall be made in a lump
sum within 10 days after the date of termination; and

            (v) Executive shall receive a cash payment equal to a pro rata
amount of the Target Bonus (based on the Base Salary at the time of such
termination) for the fiscal year during which termination occurs, which shall be
paid in a lump sum within 10 days after the date of termination; and

                                      E-11
<PAGE>

            (vi) all options to acquire shares in the Company held by the
Executive which have not vested at the time of such termination of employment,
will terminate as of the date of such termination of employment and will be of
no further force or effect; provided however that a pro rated portion (based on
that portion of the year between the prior vesting date or the award date and
the next vesting date during which the Executive is employed by the Company) of
those options scheduled to vest on the next vesting date shall vest; and all of
the options which are exercisable at the date of termination of employment shall
remain exercisable after such termination in accordance with the terms of the
relevant plans and granting instruments (to the extent any provision of this
agreement conflicts with any provision of any stock option plan or agreement
between the Company and Exective, the provision hereof shall take precedence);
and

      (vii) Executive shall continue to be entitled to any deferred compensation
and other unpaid amounts and benefits earned and vested prior to Executive's
termination; and

      (viii) in the event Executive is terminated under this Section 10(a)
within six months after the first date of employment by the Company of a new CEO
and prior to December 31, 2005, then the option granted to executive under
Section 4(e) and all shares of restricted stock awarded to Executive under
Section 4(f) shall fully vest upon the date of his termination.

      (b) Termination for Cause. In the event the Company terminates Executive's
employment as the Company's Executive Vice President and Chief Financial Officer
for Cause pursuant to Section 9(a)(iii) hereof, (i) Executive shall be entitled
to receive payment of his Base Salary through the date of termination, (ii)
Executive shall continue to be entitled to any deferred compensation and other
unpaid amounts and benefits earned and vested prior to Executive's termination,
(iii) all options to acquire shares in the Company held by the Executive which
have vested prior to the date of Executive's termination of employment shall
remain exercisable after such termination in accordance with the terms of the
relevant plans and granting instruments, (iv) all options granted to Executive
that have not vested prior to the date of Executive's termination of employment
will terminate as of the date of such termination and will be of no further
force and effect; and (v) all shares of restricted stock awarded to Executive
that have not vested prior to the date of Executive's termination of employment
shall be forfeited.

      (c) Death. In the event Executive's employment with the Company is
terminated as a result of Executive's death, (i) Executive's estate or
Executive's duly designated beneficiaries shall be entitled to payment of his
Base Salary through the date of Executive's death; (ii) Executive's estate or
Executive's duly designated beneficiaries shall be entitled to a pro rata amount
of the Target Bonus (based on the Base Salary at the time of death) for the
fiscal year in which he dies; (iii) all options to acquire shares in the Company
held by the Executive which have not vested at the time of Executive's death
will continue to vest in accordance with their terms and shall remain
exercisable (together with any options which had previously vested), until the
earlier of (A) one year from the date of death and (B) the end of the remaining
exercise term of such options; (iv) all shares of restricted stock awarded to
Executive shall fully vest; and (v) Executive's estate or Executive's duly
designated beneficiaries shall continue to be entitled to any deferred
compensation and other unpaid amounts and benefits earned and vested prior to
Executive's death. If Executive's Family Members have medical and dental
coverage on the date of such termination under a group health plan sponsored by
the Company, the Company will reimburse such Family Member for the total
applicable premium cost for medical and dental coverage under COBRA for such
Family Members for a period of up to twenty-four (24) months commencing on the
date of such termination; provided the Company shall have no obligation to
reimburse such Family Members for the premium cost of COBRA coverage as of the
date they become eligible to obtain comparable benefits from another employer.

      (d) Disability. Upon termination of Executive's employment as the
Company's Executive Vice President and Chief Financial Officer on account of
Executive's disability pursuant to Section 9(a)(ii) hereof, (i) Executive shall
be entitled to payment of his Base Salary through the commencement of long term
disability payments to Executive under any plan provided or paid for by the
Company, (ii) Executive

                                      E-12
<PAGE>

shall be entitled to a pro rata amount of the Target Bonus (based on the Base
Salary at the time of such termination) for the fiscal year in which his
employment is terminated, (iii) Executive shall be entitled to all compensation
and benefits to which Executive is entitled pursuant to the Company's disability
policies in effect as of the date of Executive's termination, (iv) all options
to acquire shares of the Company held by the Executive which have not vested at
the date of termination of employment will continue to vest in accordance with
their terms, and shall remain exercisable (together with any options which had
previously vested), until the earlier of (A) one year from the date of such
termination of Executive's employment and (B) the end of the remaining exercise
term of such options, (v) all shares of restricted stock awarded to Executive
shall fully vest; and (vi) Executive shall continue to be entitled to any
deferred compensation and other unpaid amounts and benefits earned and vested
prior to Executive's termination. If Executive and his Family Members have
medical and dental coverage on the date of such termination under a group health
plan sponsored by the Company, the Company will reimburse Executive for the
total applicable premium cost for medical and dental coverage under COBRA for
Executive and his Family Members for a period of up to eighteen (18) months
commencing on the date of such termination; provided the Company shall have no
obligation to reimburse Executive and his Family Members for the premium cost of
COBRA coverage as of the date they become eligible to obtain comparable benefits
from another employer.

      (e) Voluntary Resignation or upon Executive's Notice of Non-Renewal. In
the event Executive voluntarily terminates his employment with the Company, or
the Executive's employment terminates following Executive having provided the
Company with a notice of non-renewal of the Term under Section 2 hereof, (i)
Executive shall be entitled to receive payment of his Base Salary through the
date of termination, (ii) Executive shall continue to be entitled to any
deferred compensation and other unpaid amounts and benefits earned and vested
prior to Executive's termination, (iii) all options to acquire shares of the
Company held by the Executive which have vested prior to the date of such
termination shall remain exercisable after such termination in accordance with
the terms of the relevant plans and granting instruments, (iv) all options to
acquire shares of the Company held by the Executive which have not vested prior
to the date of such termination will terminate as of the date of such
termination and will be of no further force and effect, and (v) all shares of
restricted stock awarded to Executive that have not vested prior to the date of
Executive's termination of employment shall be forfeited.

      (f) Termination without Cause or for Good Reason or Upon the Company's
Notice of Non-Renewal in Connection with a Change in Control. In the event the
Company terminates Executive's employment as the Company's Executive Vice
President and Chief Financial Officer without Cause pursuant to Section 9(a)(iv)
hereof or Executive terminates such employment for Good Reason pursuant to
Section 9(c) hereof, or the Company provides a notice of non-renewal of the Term
under Section 2 hereof, within the period which commences ninety (90) days
before and ends one (1) year following a Change in Control, in lieu of the
provisions of Section 10(a) or 10(e) above,

            (i) Executive shall receive cash payments equal to any unpaid Base
      Salary through the date of termination, plus an amount equal to the pro
      rated portion of the Target Bonus (based on the Base Salary at the time of
      such termination) which would have been payable to Executive for the
      fiscal year during which such termination occurs, which payments shall be
      made in a lump sum within 10 days after the date of termination; and

            (ii) Executive shall receive, in a lump sum within 10 days after the
      date of termination, cash payments equal to two (2) times the sum of the
      following: (1) his Base Salary at the time of such termination and (2) the
      Target Bonus (based on the Base Salary at the time of such termination)
      for the fiscal year in which such termination occurs; and

            (iii)if Executive and his Family Members have medical and dental
      coverage on the date of such termination under a group health plan
      sponsored by the Company, the Company will reimburse Executive for the
      total applicable premium cost for medical and dental coverage under COBRA
      for Executive and his Family Members for a period of up to eighteen (18)
      months

                                      E-13
<PAGE>

      commencing on the date of such termination and will continue to pay
      Executive an amount equal to such COBRA reimbursement during the eighteen
      (18) month period following such initial eighteen (18) month period after
      such termination; provided, that the Company shall have no obligation to
      reimburse Executive for the premium cost of COBRA coverage as of the date
      Executive and his Family Members become eligible to obtain comparable
      benefits from a subsequent employer; and

            (iv) all options to acquire shares of the Company held by the
      Executive shall become fully vested immediately prior to the effective
      date of the Change in Control. Executive shall have a reasonable
      opportunity to exercise all or any portion of such options prior to the
      effective date of the Change in Control, and any options not exercised
      prior to the effective date of the Change in Control shall terminate as of
      the effective date of the Change in Control and will be of no further
      force or effect; and

            (v) Executive shall continue to be entitled to any deferred
      compensation and other unpaid amounts and benefits earned and vested prior
      to Executive's termination; and

            (vi) all shares of restricted stock awarded to the Executive shall
      fully vest immediately prior to the Change in Control or, if later, upon
      Executive's termination of employment; and

            (vii) in addition to (but not as a condition of the Company's
      obligations with respect to any of) the foregoing, at Executive's option,
      exercisable within 30 days after the date of termination, the Company and
      Executive shall enter into a consulting agreement in the form of Exhibit B
      attached hereto.

      In the event the Executive becomes entitled to payments under this Section
10(f), the Company shall cause its independent auditors promptly to review, at
the Company's expense, the applicability of Section 4999 of the Internal Revenue
Code (the "Code") to such payments. If such auditors shall determine that any
payment or distribution of any type by the Company to Executive, whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise (the "Total Payments"), would subject Executive to the excise tax
imposed by Section 4999 of the Code, or any interest or penalties with respect
to such excise tax (such excise tax, together with any such interest and
penalties, are collectively referred to as the "Excise Tax"), then Executive
shall be entitled to receive an additional cash payment (a "Gross Up Payment")
within 30 days of such determination equal to an amount such that after payment
by Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including any Excise Tax, imposed upon the Gross Up
Payment, Executive would retain an amount of the Gross Up Payment equal to the
Excise Tax imposed upon the Total Payments. For purposes of the foregoing
determination, Executive's tax rate shall be deemed to be the highest statutory
marginal state and Federal tax rate (on a combined basis) (including his share
of F.I.C.A. and Medicare taxes) then in effect. If no determination by the
Company's auditors is made prior to the time a tax return reflecting the Total
Payments is required to be filed by Executive, Executive will be entitled to
receive a Gross Up Payment calculated on the basis of the Total Payments
reported by Executive in such tax return, within 30 days of the filing of such
tax return. In all events, if any tax authority determines that a greater Excise
Tax should be imposed upon the Total Payments than is determined by the
Company's independent auditors or reflected in Executive's tax return pursuant
to this Section 10(g), the Executive shall be entitled to receive the full Gross
Up Payment calculated on the basis of the amount of Excise Tax determined to be
payable by such tax authority from the Company within 30 days of such
determination.

      (g) If and when during the Term, the Company shall adopt (or amend) a
severance plan generally applicable to its executive officers (other than the
Chief Executive Officer), which provides for payments and benefits upon certain
events of termination of employment in connection with a change in control of
the Company at levels that are greater than those provided herein under Section
10(f) (or provide in connection with a change in control of the Company, for
lump sum or otherwise more accelerated payments than those provided for under
Section 10(f)), then promptly following adoption (or amendment)

                                      E-14
<PAGE>

of such a plan, the Company and Executive agree to negotiate in good faith an
amendment to the provisions of Sections 10(f) to provide Executive with
comparable payments and benefits upon certain events of termination in
connection with a change of control of the Company to those provided to other
senior executive officers covered by such plan with the same line of reporting
to the Chief Executive Officer as Executive. Notwithstanding the foregoing, it
is understood that the Company may enter into individual contractual
arrangements with other executives for benefits, and nothing herein shall
require the Company to provide the same benefits or level of benefits to
Employee.

      (h) Notwithstanding anything else herein to the contrary, Executive shall
not be entitled to realize or receive any termination related benefits provided
for in this Section 10, including, without limitation, all post-termination
payments and the acceleration of option or restricted stock vesting schedules,
unless Executive shall have executed and delivered to the Company a full release
(reasonably satisfactory to the Company's counsel) of all claims against the
Company and its affiliates, successors and assigns, except claims arising under
this agreement (e.g., enforcement of vested options).

      11. Miscellaneous.

      (a) Entire Agreement. This Agreement (including the exhibits, schedules
and other documents referred to herein) contains the entire understanding
between the parties hereto with respect to the subject matter hereof and
supersedes any prior understandings, agreements or representations, written or
oral, relating to the subject matter hereof.

      (b) Counterparts. This Agreement may be executed in separate counterparts,
each of which will be an original and all of which taken together shall
constitute one and the same agreement, and any party hereto may execute this
Agreement by signing any such counterpart.

      (c) Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law but if any provision of this Agreement is held to be invalid,
illegal or unenforceable under any applicable law or rule, the validity,
legality and enforceability of the other provision of this Agreement will not be
affected or impaired thereby.

      (d) Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, personal
representatives and, to the extent permitted by subsection (e), successors and
assigns. The Company will require its successors to expressly assume its
obligations under this Agreement.

      (e) Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable (including by operation of law) by either party without the prior
written consent of the other party to this Agreement, except that the Company
may, without the consent of the Executive, assign its rights and obligations
under this Agreement to any corporation, firm or other business entity with or
into which the Company may merge or consolidate, or to which the Company may
sell or transfer all or substantially all of its assets, or of which 50% or more
of the equity investment and of the voting control is owned, directly or
indirectly, by, or is under common ownership with, the Company. After any such
assignment by the Company, and provided that such assignment arises by operation
of law or involves an express written assumption by the assignee, the Company
shall be immediately released and discharged from all further liability
hereunder and such assignee shall thereafter be deemed to be the Company for the
purposes of all provisions of this Agreement.

      (f) Modification, Amendment, Waiver or Termination. No provision of this
Agreement may be modified, amended, waived or terminated except by an instrument
in writing signed by the parties to this Agreement. No course of dealing between
the parties will modify, amend, waive or terminate any provision of this
Agreement or any rights or obligations of any party under or by reason of this
Agreement. No delay on the part of the Company in exercising any right hereunder
shall operate as a waiver of such

                                      E-15
<PAGE>

right. No waiver, express or implied, by the Company of any right or any breach
by Executive shall constitute a waiver of any other right or breach by
Executive.

      (g) Notices. All notices, consents, requests, instructions, approvals or
other communications provided for herein shall be in writing and delivered by
personal delivery, overnight courier, mail, electronic facsimile or e-mail
addressed to the receiving party at the address set forth herein. All such
communications shall be effective when received.

                      Address for the Executive:
                      Kenneth J. Zuerblis
                      c/o Enzon Pharmaceuticals, Inc.
                      685 Route 202/206
                      Bridgewater, New Jersey 08807

                      Address for the Company:
                      Enzon Pharmaceuticals, Inc.
                      685 Route 202/206
                      Bridgewater, New Jersey 08807
                      Attn: Vice President, Human Resources

Any party may change the address set forth above by notice to each other party
given as provided herein.

      (h) Headings. The headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.

      (i) Governing Law. ALL MATTERS RELATING TO THE INTERPRETATION,
CONSTRUCTION, VALIDITY AND ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF NEW JERSEY, WITHOUT GIVING EFFECT TO ANY
CHOICE OF LAW PROVISIONS THEREOF.

      (j) Resolution of Certain Claims - Injunctive Relief. The Executive
acknowledges that it would be difficult to fully compensate the Company for
damages resulting from any breach by him of the provisions of this Agreement.
Accordingly, the Executive agrees that, in addition to, but not to the exclusion
of any other available remedy, the Company shall have the right to enforce the
provisions of Sections 5 through 8 and 9(f) by applying for and obtaining
temporary and permanent restraining orders or injunctions from a court of
competent jurisdiction without the necessity of filing a bond therefor, and
without the necessity of proving actual damages, and the Company shall be
entitled to recover from the Executive its reasonable attorneys' fees and costs
in enforcing the provisions of Sections 5 through 8 and 9(f).

      (k) Arbitration. Except as otherwise specifically provided for hereunder,
any claim or controversy arising out of or relating to this Agreement or the
breach hereof shall be settled by arbitration in accordance with the laws of the
State of New Jersey. Such arbitration shall be conducted in the State of New
Jersey in accordance with the rules then existing of the American Arbitration
Association. Judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction thereof.

      (l) Third-Party Benefit. Nothing in this Agreement, express or implied, is
intended to confer upon any other person any rights, remedies, obligations or
liabilities of any nature whatsoever.

      (m) Withholding Taxes. The Company may withhold from any benefits payable
under this Agreement or any other agreement all federal, state, city or other
taxes as shall be required pursuant to any law or governmental regulation or
ruling. Executive hereby agrees to indemnify and hold harmless the Company
should the Company fail to withhold tax from any such payment from which tax is
required to be withheld.

                                      E-16
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the Effective Date.

ENZON PHARMACEUTICALS, INC.

By:
      Arthur J. Higgins
      Chairman

      Kenneth J. Zuerblis

                                      E-17
<PAGE>

                                                                       Exhibit A

                        RESTRICTED STOCK AWARD AGREEMENT

            THIS AGREEMENT, made as of this 14th day of June, 2004, by and
between Enzon Pharmaceuticals, Inc., a Delaware corporation (the "Company"), and
Kenneth Zuerblis ("Executive").

            WITNESSETH, THAT:

            WHEREAS, The Company wishes to grant a restricted stock award to
Executive;

            NOW, THEREFORE, In consideration of the premises and mutual
covenants herein contained, the parties hereto hereby agree as follows:

            1. Award

            The Company, effective as of the date of this Agreement, hereby
grants to Executive a restricted stock award of 27,500 shares (the "Shares") of
common stock of the Company (the "Common Stock") subject to the terms and
conditions set forth herein and to the terms of the Employment Agreement between
the Company and Executive, dated as of MONTH DAY, 2004, (the "Employment
Agreement") which are specifically referenced herein. Capitalized terms used but
not defined herein shall have the meanings ascribed to such terms in the
Employment Agreement.

            2. Vesting

            Subject to the terms and conditions of this Agreement, the
Executive's Shares shall vest according to the following schedule:

                     Date             Number of Shares that Vest on such Date
                     ----             ---------------------------------------

            June 14, 2007                             7,500

            June 14, 2008                             7,500

            June 14, 2009                            12,500

            3. Restriction on Transfer

            Until any group of Shares vests pursuant to Sections 2 or 4 hereof,
none of such Shares may be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of or encumbered, and no attempt to transfer such Shares,
whether voluntary or involuntary, by operation of law or otherwise, shall vest
the transferee with any interest or right in or with respect to such Shares.

            4. Early Vesting; Forfeiture

            (a) In the event the Company terminates Executive's employment as
the Company's Chief Financial Officer without Cause pursuant to Section 9(a)(iv)
of the Employment Agreement or Executive terminates such employment for Good
Reason pursuant to Section 9(c) of the Employment Agreement, or the Company
provides a notice of non-renewal of the Term of the Employment Agreement under
Section 2 thereof, all of the Shares granted to Executive pursuant to Section 1
hereof shall vest immediately upon termination;

            (b) In the event the Company terminates Executive's employment as
the Company's Chief Financial Officer for Cause pursuant to Section 9(a)(iii) of
the Employment Agreement, Executive will forfeit all unvested Shares granted to
Executive pursuant to Section 1 hereof.

                                      E-18
<PAGE>

            (c) In the event Executive's employment as the Company's Chief
Financial Officer is terminated as a result of Executive's death, all unvested
Shares granted to Executive pursuant to Section 1 hereof shall vest immediately
upon Executive's death.

            (d) Upon termination of Executive's employment as the Company's
Chief Financial Officer on account of Executive's disability pursuant to Section
9(a)(ii) of the Employment Agreement, all unvested Shares granted to Executive
pursuant to Section 1 hereof shall vest immediately upon such termination.

            (e) In the event Executive voluntarily terminates his employment as
the Company's Chief Financial Officer, other than for Good Reason pursuant to
Section 9(c) of the Employment Agreement, Executive will forfeit all unvested
Shares granted to Executive pursuant to Section 1 hereof.

            (f) Notwithstanding anything to the contrary in this Agreement or
the Employment Agreement, the Compensation Committee of the Board of Directors
of the Company (the "Committee") or the Board of Directors of the Company (the
"Board"), in its sole discretion, may waive any of the forfeiture requirements
in this Section 4 or may accelerate the vesting of all or a portion of the
Shares as the Committee or the Board so determines.

            5. Issuance and Custody of Certificate

            (a) The Company shall cause to be issued one or more stock
certificates, registered in the name of Executive, evidencing the Shares. Each
such certificate shall bear the following legends:

                "The shares of common stock represented by this certificate are
subject to forfeiture, and the transferability of this certificate and the
shares of stock represented hereby are subject to the restrictions, terms and
conditions (including restrictions against transfer) contained in a Restricted
Stock Award Agreement entered into between Enzon Pharmaceuticals, Inc. (formerly
known as Enzon, Inc.) and the registered owner of such shares dated _________,
2004. A Copy of the Restricted Stock Award Agreement is on file in the office of
Enzon Pharmaceuticals, Inc."

            (b) Contemporaneous with the execution hereof, Executive shall cause
stock powers relating to the Shares executed by Executive to be delivered to the
Company.

            (c) Each certificate issued pursuant to Section 5(a) hereof,
together with the stock powers relating to the Shares, shall be deposited by the
Company with the Secretary of the Company or a custodian designated by the
Secretary. The Secretary or such custodian shall issue a receipt to Executive
evidencing the certificate or certificates held which are registered in the name
of Executive.

            (d) After any Shares subject to this Agreement vest pursuant to
Sections 2 or 4(b) hereof, the Company shall promptly cause a certificate or
certificates evidencing such vested Shares without the legal legend called for
in Section 5(a) (together with the stock powers relating to the Shares) to be
released and delivered to Executive or Executive's legal representatives,
beneficiaries or heirs.

            (e) Prior to issuance of the Shares, the Company shall have caused
such issuance to be registered under the Securities Act of 1933, as amended.

            6. Distributions and Adjustments

            (a) In the event of a merger, consolidation, reorganization,
recapitalization, stock dividend or other event, including a Change in Control
as defined in the Employment Agreement, the number and character of the Shares
shall be adjusted at the same time and to the same extent as other shares of
Common Stock are adjusted as a result of any such event. If all or any portion
of the

                                      E-19
<PAGE>

Shares vest in Executive subsequent to any such change in the number or
character of the shares of Common Stock, Executive shall then receive upon such
vesting the number and type of securities or other consideration which
Participant would have received if the Shares had vested prior to the event
changing the number or character of outstanding shares of Common Stock.

            (b) Any additional shares of Common Stock, any other securities of
the Company and any other property (except for cash dividends) distributed with
respect to the Shares prior to the date the Shares vest shall be subject to the
same restrictions, terms and conditions as the Shares. Any cash dividends
payable with respect to the Shares shall be distributed to Executive at the same
time cash dividends are distributed to stockholders of the Company generally.

            (c) Any additional shares of Common Stock, any securities and any
other property (except for cash dividends) distributed with respect to the
Shares prior to the date such Shares vest shall be promptly deposited with the
Secretary or the custodian designated by the Secretary to be held in custody in
accordance with Section 5(c) hereof for Executive's benefit and shall be
distributed to Executive as provided in Section 6(b) when the Shares vest.

            7. Taxes

            (a) The issuance of the Shares to Executive pursuant to this
Agreement involves complex and substantial tax considerations, including,
without limitation, consideration of the advisability of Executive making an
election under Section 83(b) of the Internal Revenue Code. The Executive is
urged to consult his own tax advisor with respect to the transactions described
in this Agreement. The Company makes no warranties or representations whatsoever
to the Executive regarding the tax consequences of the grant to the Executive of
the Shares or this Agreement. Executive acknowledges that the making of any
Section 83(b) election shall be his personal responsibility.

            (b) In order to provide the Company with the opportunity to claim
the benefit of any income tax deduction which may be available to it in
connection with this restricted stock award, and in order to comply with all
applicable federal or state tax laws or regulations, the Company may take such
action as it deems appropriate to insure that, if necessary, all applicable
federal or state income and social security taxes, which are the sole and
absolute responsibility of Executive, are withheld or collected from Executive.

            (c) Executive may elect to satisfy his federal and state income tax
withholding obligations arising from the receipt of, or the lapse of
restrictions relating to, the Shares by (i) delivering cash, check (bank check,
certified check or personal check) or money order payable to the order of the
Company, (ii) having the Company withhold a portion of the Shares otherwise to
be delivered having a fair market value based on the last reported sale price of
a share of Common Stock on the Nasdaq Stock Market (or if the Shares no longer
trade on the Nasdaq Stock Market, the closing or last reported price on the
principal exchange or system on which they trade) (the "Fair Market Value")
equal to the amount of such taxes, or (iii) delivering to the Company Common
Stock having a Fair Market Value equal to the amount of such taxes. The Company
will not deliver any fractional Share but will pay, in lieu thereof, the Fair
Market Value of such fractional Share. The Participant's election must be made
on or before the date that the amount of tax to be withheld is determined.
Otherwise, the Company shall be entitled to withhold taxes due in such manner as
the Company determines in its discretion.

            8. Miscellaneous

            (a) Executive shall be entitled at all times to all of the rights of
a stockholder with respect to the Shares, including without limitation the right
to vote and tender such Shares and to receive dividends and other distributions
as provided in and subject to the provisions of Section 6.

                                      E-20
<PAGE>

            (b) Executive hereby acknowledges receipt of a copy of the
Employment Agreement. The Employment Agreement is also available for inspection
during business hours at the principal office of the Company.

            (c) This Agreement shall not confer on Executive any right with
respect to continuance of employment by the Company.

            (d) This Agreement shall inure to the benefit of, and be binding
upon, the Company, its successors and assigns, and upon Executive, his
administrator, executor, personal representative, successors and heirs.

            (e) Except as provided in Section 4(f), no change to or modification
of this Agreement shall be valid unless it is in writing and signed by the
Company and Executive. .

            IN WITNESS WHEREOF, The parties hereto have caused this Agreement to
be executed on the day and year first above written.

                                                  ENZON PHARMACEUTICALS, INC.

                                                  By:
                                                     ------------------------
                                                      Arthur Higgins
                                                      Chairman

                                                      -----------------------
                                                      Kenneth Zuerblis

                                      E-21
<PAGE>

                                                                       Exhibit B

                              CONSULTING AGREEMENT

Dated:_________________

      THIS IS A CONSULTING AGREEMENT (this "Agreement") between:

      ENZON PHARMACEUTICALS, INC. ("Enzon"), a Delaware corporation; and

      KENNETH J. ZUERBLIS ("Consultant").

BACKGROUND

      A. Consultant has expertise in finance and operations, has been associated
with Enzon as a senior executive for a substantial period of time and has
architected or otherwise been substantially involved in all of its material
developments for at least ten years.

      B. Enzon desires to engage Consultant to provide expert consulting
services to assist Enzon with respect to the transition of a new management team
and ___________________________________________________________________________.

TERMS

      NOW, THEREFORE, intending to be legally bound, the parties hereto agree as
follows:

            1. Term. The initial term of this Agreement will commence on the
date hereof and expire one day before the first anniversary of the date hereof.
This Agreement may be earlier terminated by either party upon a material breach
hereof if the non-breaching party gives notice of the breach to the breaching
party and the breaching party fails to cure such breach to the reasonable
satisfaction of the non-breaching party within thirty (30) days after such
notice.

            2. Consulting Services.

                  (a) During the term hereof, Consultant will provide to Enzon
the following consulting services within the competence and expertise of
Consultant or Consultant's staff:_______________________________________
(hereinafter, the "Consulting Services"). The Consulting Services will be
subject to the additional specifications, standards, goals or requirements (if
any) as are set forth in Part I of Schedule A attached hereto.

                  (b) Consultant shall provide the Consulting Services in
accordance with the amount and/or time parameters specified in Part II of
Schedule A attached hereto.

            3. Compensation. As full remuneration for the Consulting Services,
Enzon will pay Consultant a consulting fee as specified in Part III of Schedule
A hereto. Payments will be made hereunder only for periods in which Consultant
actually performs the Consulting Services.

            4. Performance Standard. Consultant represents and warrants that he
has expertise in the field or specialty specified in Paragraph B under
"Background" at the top of this Agreement as necessary and sufficient to provide
the consulting Services, and that such services as provided will conform to and
satisfy the specifications, standards and requirements set forth in Part I of
Schedule A attached hereto.

                                      E-22
<PAGE>

            5. Conflicts. Consultant represents that no existing or prior
engagement by it for another party creates a present, or a material prospect for
a future, conflict of interest for Consultant that would interfere materially
with Consultant's performance of its/her/his undertakings hereunder.

            6. Confidentiality; Proprietary Information; Intellectual Property.

                  (a) During the term of this Agreement and for five (5) years
after expiration or termination of this Agreement, Consultant shall use
Confidential Information solely for the purpose of performing the Services;
provided, however, Consultant shall have no liability to Company with respect to
use or disclosure of information to third parties to the extent that Consultant
can establish by written documentation that such information has been:

                        (i) part of the public domain prior to disclosure by
                  Company of such information to the Consultant;

                        (ii) part of the public domain, without fault on the
                  part of Consultant, subsequent to disclosure by Company of
                  such information to Consultant;

                        (iii) received by Consultant at any time from a source
                  other than Company lawfully having possession of and the right
                  to disclose such information;

                        (iv) otherwise known by Consultant prior to disclosure
                  by Company of such information to Consultant; or

                        (v) independently developed by or for Consultant without
                  use of, reliance upon or reference to Confidential Information
                  received hereunder.

                  (b) "Confidential Information" shall mean Company's technical,
business and financial information, including, where appropriate and without
limitation, any information, business and financial data, patent disclosures,
patent applications, trade secrets, structures, computer files, models,
techniques, processes, compositions, compounds and apparatus disclosed by
Company to Consultant.

                  (c) Notwithstanding the provisions of Section 6(a) & (b), this
Section 6 shall not prohibit Consultant from disclosing Confidential Information
pursuant to any order of any court or governmental agency, provided that
Consultant notifies the Company of such order as far in advance of such
disclosure as reasonably possible (and in any event, within 48 hours after
receiving such order) and cooperates reasonably with the Company's efforts to
obtain a protective order or relief from such court or agency.

                  (d) Consultant agrees that Consultant will not improperly use
or disclose any proprietary or confidential information or trade secrets of any
person or entity with whom Consultant has an agreement or duty to keep such
information or secrets confidential.

                  (e) Consultant recognizes that Company has received and in the
future will receive from third parties their confidential or proprietary
information subject to a duty on Company's part to maintain the confidentiality
of such information and to use it only for certain limited purposes. Consultant
agrees at all times during the term of this Agreement and thereafter, to hold in
strictest confidence, and not to use, except in connection with Consultant's
performance of the Services, and not to disclose to any person or entity, or to
use it except as necessary in performing the Services, consistent with Company's
agreement with such third party.

                                      E-23
<PAGE>

                  (f) Executive is hereby prohibited from ever using any of the
Company's proprietary information or trade secrets to conduct any business,
except for the Company's business while Executive is employed by the Company.

                  (g) Company shall own all right, title and interest in and to
any intellectual property produced by Consultant in the performance of the
Consulting Services or which result, to any extent, from use of Company's
premises or property. Upon request and at the expense of Company, Consultant
shall execute and deliver any and all instruments and documents and take such
other actions as may be necessary or desirable to assign and transfer such
intellectual property to Company.

                  (h) This Section 6 shall not be construed as limiting or
replacing any other obligations Consultant has to the Company respecting
confidentiality, proprietary information and/or intellectual property. To the
extent any such other obligations are more restrictive on Consultant than those
contained in this Section 6, such other obligations shall take precedence.

            7. Covenant Not to Compete. In consideration for the compensation
payable to Executive pursuant to this Agreement, during the term hereof,
Consultant will not directly, or indirectly, whether as an officer, director,
stockholder, partner, proprietor, associate, employee, consultant,
representative or otherwise, become, or be interested in or associated with any
other person, corporation, firm, partnership or entity, engaged to a significant
degree in (x) developing, manufacturing, marketing or selling enzymes,
protein-based biopharmaceuticals or other pharmaceuticals that are modified
using polyethylene glycol ("PEG"), (y) developing, manufacturing, marketing or
selling single-chain antigen-binding proteins or (z) any activity which is in
competition with or resembles any proprietary technology, process, product or
area of business in which the Company is engaged or with Consultant's
participation has been actively planning to be engaged from time to time during
the term of this Agreement. For purposes of the preceding sentence, to determine
whether any entity is engaged in such activities to a "significant degree",
comparison will be made to the Company's operations at that time. In other
words, an entity will be deemed to be engaged in an activity to a significant
degree if the number of employees and/or amount of funds devoted by such entity
to such activity would be material to the Company's operations at that time.

            8. Relationship of the Parties.

                  (a) The relationship of Consultant to Enzon hereunder is that
of independent contractor. Nothing herein shall be deemed to appoint Consultant
as the agent of Enzon for any purpose or create any partnership, association or
joint venture between the parties.

                  (b) Consultant is retained by Enzon solely for the purposes
set forth herein. Neither party shall have the power to act as the other party's
agent or bind the other party with respect to third parties, nor shall either
party or any of its employees or agents make any representation to the contrary.

                  (c) Neither Consultant nor any of Consultant's employees,
representatives or agents (if any) shall be construed for any purpose to be an
employee subject to the control and direction of Enzon. Consultant acknowledges
and agrees that it/she/he will be solely responsible for paying all salaries,
wages, benefits and other compensation that Consultant's employees,
representative or agents may be entitled to receive in connection with
performing the Consulting Services.

                  (d) The compensation to be paid to Consultant under this
Agreement includes, and Consultant shall be liable for, all taxes, excises,
assessments and other charges levied by any government agency on, or because of,
the Consulting Services performed hereunder and any materials, equipment,
services or supplies furnished or used in the performance of the Consulting
Services.

                                      E-24
<PAGE>

                  (e) Consultant shall maintain workers' compensation/employer's
liability insurance, disability insurance, errors and omissions insurance and
comprehensive general liability insurance to the extent, and in amounts which
are, customary in the industry in which Consultant is engaged.

            9. Indemnification.

                  (a) Consultant shall indemnify and defend Enzon against, and
hold it harmless from, any and all claims, liabilities, demands, causes of
action, damages, losses and expenses, including, without limitation, reasonable
attorneys' fees and costs of suit, arising out of or in connection with:

                        (i) any actual or alleged negligent or reckless act or
                  omission of Consultant or any of Consultant's employees,
                  representatives or agents;

                        (ii) any actual or alleged violation by Consultant or
                  any of its employees, representatives or agents of any law or
                  regulation; and

                        (iii) any determination or allegation that Consultant or
                  any of Consultant's employees, representatives or agents is an
                  employee of Enzon.

                  (b) Enzon shall indemnify and defend Consultant against, and
hold it harmless from, any and all claims, liabilities, demands, causes of
action, damages, losses and expenses, including without limitation, reasonable
attorneys' fees and costs of suit, arising out of or in connection with:

                        (i) any actual or alleged negligent or reckless act or
                  omission of Enzon or any of its employees; and

                        (ii) any actual or alleged violation by Enzon or any of
                  its employees of any law or regulation.

            10. Assignment.

                  (a) No party may assign or delegate any of its rights or
obligations hereunder without the prior written consent of the other party,
except as otherwise provided in this Agreement.

                  (b) Enzon may assign this Agreement and any or all of its
rights and obligations hereunder to any person or entity controlled by Enzon or
which shall succeed (by merger, joint venture or the purchase or lease of assets
or otherwise) to the business of Enzon; provided that any such assignee shall
have expressly assumed in a writing delivered to Consultant the obligations of
Enzon hereunder. To the extent provided in such assignment, any such assignee
shall succeed to all the rights and benefits of Enzon hereunder as if such
assignee had been named initially a party hereto in the place of Enzon.

                  (c) No assignment or delegation by Consultant of this
Agreement and any or all of its rights or obligations hereunder shall release it
from its obligations under Section 6 hereof.

            11. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given upon receipt if (i)
mailed certified mail, return receipt requested, with postage prepaid, (ii) sent
by a reputable overnight courier service or (iii) hand delivered to

                                      E-25
<PAGE>

a party at the address specified therefore at the top of this Agreement or to
such other address as such party may hereafter specify by notice in accordance
with this Section 10.

            12. Parties in Interest. This Agreement shall be binding upon and
inure to the benefit only of the parties hereto and their respective successors
and permitted assigns, and there are no so-called third party beneficiaries
hereof, whether express or implied.

            13. Amendment and Modification. No amendment or modification of or
supplement to this Agreement will be effective unless it is in writing and duly
executed by the parties hereto.

            14. Entire Agreement. Except as otherwise set forth herein, this
Agreement contains the entire agreement between the parties hereto with respect
to the subject matter hereof and supersedes any prior agreements or
understandings between them relating thereto.

            15. Headings and Titles. The headings and titles of sections,
paragraphs and the like in this Agreement are inserted for convenience of
reference only, form no part of this Agreement and shall not be considered for
the purpose of interpreting or construing the provisions hereof.

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

            17. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New Jersey without giving effect to
the conflicts of laws rules thereof.

      IN WITNESS WHEREOF the parties have executed this Agreement as of the date
first above written.

____________________________________                ENZON PHARMACEUTICALS, INC.
Kenneth J. Zuerblis

                                                    By:_________________________

                                      E-26
<PAGE>

SCHEDULE A

                                       to
                              Consulting Agreement
                                     between
                           Enzon Pharmaceuticals, Inc.
                                       and
                               Kenneth J. Zuerblis

Part I:   Additional specifications, standards, goals, requirements, etc.
          applicable to the Consulting Services:

Part II:  Time Parameters: [Specify the time Consultant (or its staff) will be
          required to devote and any other details relevant to volume and
          frequency of services.]

          Minimum of 40 hours per month.

Part III: Consulting Fee:

          On an annualized basis, Consultant's cash compensation shall be
          equal to his base salary effective during the last year of his
          employment with Enzon plus 100% of his target bonus based on such
          base salary. This compensation will be paid on a monthly basis in
          arrears against invoices submitted by Consultant.

                                      E-27Exhibit 10.31

                           Enzon Pharmaceuticals, Inc.
                      Executive Deferred Compensation Plan

1.    Statement of Purpose

      The purpose of the Enzon Pharmaceuticals, Inc. Executive Deferred
      Compensation Plan (the "Plan") is to aid Enzon Pharmaceuticals, Inc. (the
      "Company") and its subsidiaries in attracting and retaining key employees
      by providing a non-qualified compensation deferral vehicle.

2.    Definitions

      2.01  Annual Incentive Compensation - "Annual Incentive Compensation"
            means the amount paid annually to the Participant under the Enzon
            Pharmaceuticals Management Incentive Plan before reductions for
            deferrals under this Plan or the Enzon Inc. Savings and Investment
            Plan.

      2.02  Average Treasury Rate - "Average Treasury Rate" means the interest
            crediting rate used to determine the amount of interest credited to
            a Participant's Deferred Compensation Account under Section 6.02 and
            6.03. The rate for a Calendar Quarter shall be determined by
            averaging the Monthly Rates for 10-year Treasury bonds during the
            Calendar Quarter. The Monthly Rate for each month shall be the yield
            on 10-year Treasury bonds as calculated by Bloomberg Business News
            on the first business day of each month. If it becomes necessary to
            determine the value of that portion of a Participant's Deferred
            Compensation Account during a Calendar Quarter, but before the
            Average Treasury Rate for the Calendar Quarter can be determined,
            the Average Treasury Rate for the portion of the Calendar Quarter
            for the Participant's Deferred Compensation Account shall equal the
            average of the available Monthly Rates for the Calendar Quarter up
            to the Distribution Date.

      2.03  Base Salary - "Base Salary" means the Participant's annual basic
            rate of pay from the Company excluding Annual Incentive Compensation
            and other non-regular forms of compensation before reductions for
            deferrals under this Plan or the Enzon Pharmaceuticals, Inc. Savings
            and Investment Plan.

December 2003

                                      E-28
<PAGE>

      2.04  Beneficiary - "Beneficiary" means the person or persons designated
            as such in accordance with Section 8.

      2.05  Board of Directors - "Board of Directors" means the Board of
            Directors of the Company.

      2.06  Calendar Quarter - "Calendar Quarter" means any of the four calendar
            quarters in a full calendar year (e.g. January, February & March
            comprise the first calendar quarter).

      2.07  Committee - "Committee" means the Vice President, Human Resources,
            Chief Financial Officer and Chief Executive Officer.

      2.08  Cycle - "Cycle" means the twelve-month pay-in period for each
            deferral. The first Cycle shall begin on January 1, 2004 and end on
            December 31, 2004. The following Cycles shall begin on January 1 of
            each year and end on December 31 each year.

      2.09  Deferral Amount - "Deferral Amount" means the total amount of
            Elective Deferred Compensation and/or Non-Elective Deferred
            Compensation actually deferred by the Participant.

      2.10  Deferred Compensation Account - "Deferred Compensation Account"
            means the account maintained on the books of account of the Company
            for a Participant pursuant to Section 6.

      2.11  Disability - "Disability" means the Participant is eligible to
            receive benefits under a long term disability plan maintained by the
            Company.

      2.12  Distribution Date - "Distribution Date" means the date on which the
            Company makes distributions from the Participant's Deferred
            Compensation Account(s).

      2.13  Effective Date - "Effective Date" means the date on which this Plan
            is effective, November 1, 2003.

      2.14  Election Form - "Election Form" means the form or forms attached to
            this Plan and filed with the Company by the Participant in order to
            participate in the Plan. The terms and conditions specified in the
            Election Form(s) are incorporated by reference herein and form a
            part of the Plan.

December 2003

                                      E-29
<PAGE>

      2.15  Elective Deferred Compensation - "Elective Deferred Compensation"
            means the total amount elected to be deferred by an Eligible
            Employee on his/her Election Form.

      2.16  Eligible Employee - "Eligible Employee" means any employee of the
            Company who is a Vice-President or higher, or such other key
            executives of the Company as may be designated by the Committee.

      2.17  Non-Elective Deferred Compensation - "Non-Elective Deferred
            Compensation" means the amount awarded to a Participant by the Board
            of Directors of the Company pursuant to Section 4.

      2.18  Participant - "Participant" means an Eligible Employee participating
            in the Plan in accordance with the provisions of Section 4.

      2.19  Plan Year - "Plan Year" means the twelve month period beginning on
            the first day of the first Cycle in which the Eligible Employee
            elects to participate in the Plan. The initial Plan Year will
            commence on the January 1, 2004 and end on December 31, 2004. Each
            later Plan year will begin on January 1 and end on December 31.

      2.20  Related Employment - "Related Employment" means the employment of a
            Participant by an employer that is not the Company, provided (i)
            such employment is undertaken by the Participant at the request of
            the Company; (ii) immediately prior to undertaking such employment,
            the Participant was an employee of the Company, or was engaged in
            Related Employment as herein defined; and (iii) such employment is
            recognized by the Committee, in its sole discretion, as Related
            Employment.

      2.21  Substantially Equal Installments - "Substantially Equal
            Installments" means a series of annual payments, such that equal
            payments over the remaining payment period would exactly amortize
            the Participant's Deferred Compensation Account balance as of the
            Distribution Date if the investment return remained constant at the
            return credited as of the Valuation Date immediately preceding the
            Distribution Date for the remainder of the payment period.

December 2003

                                      E-30
<PAGE>

      2.22  Termination of Employment - "Termination of Employment" means the
            end of a Participant's employment with the Company for any reason
            other than Disability, Related Employment, or the termination of a
            Participant's Related Employment if the Participant returns to the
            Company.

      2.23  Valuation Date - "Valuation Date" means the date on which the value
            of a Participant's Deferred Compensation Account is determined for
            each Calendar Quarter as provided in Section 6 hereof. Unless and
            until changed by the Committee, the Valuation Dates within each
            Cycle shall be the last day of each of the four Calendar Quarters of
            the calendar year.

      2.24  Years of Service - "Years of Service" means the cumulative years of
            continuous full-time employment with the Company beginning on the
            date the Participant first began service and each anniversary
            thereof.

3.    Administration of the Plan

      3.01  Plan Administration. The Committee shall be the sole administrator
            of the Plan, and will administer the Plan. The Committee shall have
            the power to formulate additional details and regulations for
            carrying out this Plan. The Committee also shall be empowered to
            make any and all determinations not authorized specifically herein
            that may be necessary or desirable for the effective administration
            of the Plan. Any decision or interpretation of any provision of this
            Plan adopted by the Committee shall be final and conclusive.

      3.02  Delegation of Duties. The Committee may delegate any or all of its
            duties as to the administration of this Plan to other individuals or
            groups of individuals within the Company, as it deems appropriate.

4.    Participation

      4.01  Elective Participation.

            a.    Any Eligible Employee may elect to participate in the Plan for
                  a given Cycle by filing a completed Election Form for the
                  Cycle with the Company. With regard to an election to
                  participate:

December 2003

                                      E-31
<PAGE>

                  i.    The Election Form must be filed with the Company prior
                        to the commencement of the Cycle to which the Election
                        Form pertains, or at such earlier time as determined by
                        the Company.

                  ii.   The minimum deferral for a Cycle shall be $5,000.

                  iii.  The maximum deferral shall be fifty percent (50%) of the
                        Participant's Base Salary (as defined in Section 2.03)
                        and one hundred percent (100%) of Participant's Annual
                        Incentive Compensation (as defined in Section 2.01).
                        Provided, however, that no election will be effective to
                        reduce amounts paid by the Company to an Eligible
                        Employee to an amount which is less than the sum of the
                        amount the Company is required to withhold for a Cycle
                        for purposes of federal, state, and local income taxes,
                        including FICA tax withholding and the amount the
                        Company is required to withhold for contributions to any
                        employee benefit plan (other than this Plan).

                  iv.   A Participant may elect to receive payment of amounts
                        deferred during a Cycle upon Termination of Employment,
                        or in a specified year which shall be no earlier than in
                        the third cycle following the Cycle in which such
                        amounts are deferred. Further, a Participant may elect
                        to receive payment in a lump-sum or in up to fifteen
                        (15) annual installments.

            b.    A Participant's election to defer future Compensation is
                  irrevocable upon the filing of his/her Election Form with the
                  Company, provided, however, that the election may be
                  terminated with respect to Compensation not yet earned by
                  mutual agreement in writing between the Participant and the
                  Company.

4.02  Non-Elective Participation. The Committee can, in its sole discretion,
      award to an Eligible Employee Non-Elective Deferred Compensation. Unless
      otherwise specified by the Committee, the Participant shall determine,
      subject to Section 4.01a(iv), the timing and form of payment of any
      Non-Elective Deferred Compensation at the time it is awarded.

December 2003

                                      E-32
<PAGE>

5.    Vesting of Deferred Compensation Account

      A Participant's interest in his/her Deferred Compensation Account shall
      vest immediately.

6.    Accounts and Valuations

      6.01  Deferred Compensation Accounts. The Committee shall establish and
            maintain a separate Deferred Compensation Account for each
            Participant for each Cycle. Deferred amounts will be credited to a
            Participant's account on the first day of the month following the
            time at which the amount would otherwise have been paid. Any
            Non-Elective Deferred Compensation awarded to a Participant shall be
            credited to the Participant's Deferred Compensation Account on such
            date as specified by the Committee.

      6.02  Interest Rate Credited. The Participant's Deferred Compensation
            Account shall be credited with interest quarterly at a rate equal to
            the Average Treasury Rate plus three percentage points (3%). The
            Committee shall review the interest rate on an annual basis and may
            increase or decrease the interest rate credited on a prospective
            basis. Any such change in the interest rate credited shall be made
            60 days before the end of the Plan Year preceding the year in which
            the interest crediting rate changes. Written notice of any such
            change in interest rate shall be given to each Participant in the
            Plan.

      6.03  Timing of Crediting of Interest. The Participant's Deferred
            Compensation Account shall be revalued and credited with interest as
            of each Valuation Date. As of each Valuation Date, the value of the
            Participant's Deferred Compensation Account shall consist of the
            balance as of the immediately preceding Valuation Date, plus the
            amount of any Elective and Non-Elective Deferred Compensation
            credited since the preceding Valuation Date, minus the amount of all
            distributions, if any, made from such Deferred Compensation Account
            since the preceding Valuation Date. As of each Valuation Date,
            interest shall be credited on the value of the Participant's
            Deferred Compensation Account as of such date.

      6.04  Excess 401(K) Matching Credit. At the end of each Plan Year, a
            Participant's Deferred Compensation Account will be credited with an
            Excess 401(K) Matching Credit as follows:

December 2003

                                      E-33
<PAGE>

            a.    Matchable Annual Deferral. The Matchable Annual Deferral shall
                  be that portion of a Participant's Deferral Amount for each
                  Cycle which is less than or equal to: (i) six percent (6%) of
                  the total Base Salary plus Annual Incentive Compensation for a
                  Cycle minus (ii) the amount of Elective Contribution to the
                  Enzon Pharmaceuticals, Inc. 401(K) Savings and Investment Plan
                  made by the Participant for which the Participant received an
                  Employer Matching Contribution under the Enzon
                  Pharmaceuticals, Inc. 401(K) Savings and Investment Plan for
                  the same Cycle. However, if the Participant does not make the
                  maximum allowable deferral to the Enzon Pharmaceuticals, Inc.
                  401(K) Savings and Investment Plan for any Cycle, the
                  Matchable Annual Deferral for such Cycle shall be zero.

            b.    Excess 401(K) Matching Credit. The Excess 401(K) Matching
                  Credit shall be 50% of the value of the Matchable Annual
                  Deferral for the Cycle.

            c.    Vesting. The Participant's right to receive the Excess 401(K)
                  Matching Credits credited to the Participant's Deferred
                  Compensation Account in the event of Termination of Employment
                  prior to reaching age 55 shall vest in accordance with the
                  following schedule:

                   Completed Years of Service   Vested Percentage
                   --------------------------   -----------------
                               0-1                        0%
                               1-2                       20%
                               2-3                       40%
                               3-4                       60%
                               4-5                       80%
                                5+                       100%

      6.05  Distributions. For the purpose of crediting interest pursuant to
            Sections 6.02 and 6.03, any distributions made during a Calendar
            Quarter shall be deemed to have been made on the first day of such
            quarter.

      6.06  Nature of Account Entries. The establishment and maintenance of
            Participants' Deferred Compensation Accounts and the crediting of
            gains and losses pursuant to this Section 6 shall be merely
            bookkeeping entries and shall

December 2003

                                      E-34
<PAGE>

            not be construed as giving any person any interest in any specific
            assets of the Company or of any subsidiary of the Company or any
            trust created by the Company, including any investments owned by the
            Company or any such subsidiary or trust. The hypothetical investment
            of the Participant's Deferred Compensation Accounts shall be for
            bookkeeping purposes only, and shall not require the establishment
            of actual corresponding funds or investments by the Committee or the
            Company. Benefits accrued under this Plan shall constitute an
            unsecured general obligation of the Company.

7.    Benefits

      7.01  Normal Benefit

            a.    A Participant's Deferred Compensation Account shall be paid to
                  the Participant in accordance with the terms of the
                  Participant's Election Form, subject to the terms and
                  conditions specified in the Election Form. If a Participant
                  elects to receive payment of his/her Deferred Compensation
                  Account in installments, subject to a maximum of fifteen (15)
                  installments, payments shall be made in Substantially Equal
                  Installments. Unless the Committee determines otherwise, and
                  subject to the provisions of Section 7.04 as to when payments
                  shall commence, installments shall be paid on the 15th day of
                  February of each year.

            b.    Notwithstanding the provisions of Section 7.01a, and
                  notwithstanding any contrary election made by the Participant
                  on his/her Election Form, if a Participant has a Termination
                  of Employment, and if the Participant at the time of his/her
                  Termination of Employment, is less than 50 years of age and
                  has not completed three (3) Years of Service, the
                  Participant's Deferred Compensation Account balance will be
                  paid to the Participant in a lump-sum in the year following
                  the Participant's Termination of Employment. However, upon the
                  written request of the Participant, the Committee, in its sole
                  discretion, may allow payments to be made to the Participant
                  in up to fifteen (15) annual installments.

            c.    In the event of a Participant's death before a complete
                  distribution of his or her account, the Participant's
                  designated Beneficiary will receive an amount equal to the
                  Participant's Deferred Compensation Account, and

December 2003

                                      E-35
<PAGE>

                  such amount shall be paid in a single sum or annual
                  installments (not to exceed 10) in accordance with the
                  Participant's election. However, the Committee may, in its
                  sole discretion, pay the Participant's remaining account
                  balance in a single sum if so requested by the Participant's
                  Beneficiary.

      7.02  Hardship Benefit. In the event that the Committee, upon written
            petition of the Participant, determines in its sole discretion, that
            the Participant has suffered an unforeseeable financial emergency,
            the Company may pay to the Participant, as soon as is practicable
            following such determination, an amount necessary to meet the
            emergency, not in excess of the Deferred Compensation Account
            credited to the Participant. The Deferred Compensation Account of
            the Participant thereafter shall be reduced to reflect the payment
            of a Hardship Benefit.

      7.03  Taxes; Withholding. To the extent required by law, the Company shall
            withhold from payments made hereunder an amount equal to at least
            the minimum taxes required to be withheld by the federal, or any
            state or local, government.

      7.04  Date of Payments. Except as otherwise provided in this Plan,
            payments under this Plan shall begin on or before the 15th day of
            February of the calendar year following receipt of notice by the
            Committee of an event that entitles a Participant (or Beneficiary)
            to payments under the Plan, or at such earlier date as may be
            determined by the Committee.

8.    Beneficiary Designation

      At any time prior to complete distribution of the benefits due to a
      Participant under the Plan, he/she shall have the right to designate,
      change, and/or cancel, any person(s) or entity as his/her Beneficiary
      (either primary or contingent) to whom payment under this Plan shall be
      made in the event of his/her death. Each beneficiary designation shall
      become effective only when filed in writing with the Company during the
      Participant's lifetime on a form provided by the Company. The filing of a
      new beneficiary designation form will cancel all previously filed
      beneficiary designations. Further, any finalized divorce of a Participant
      subsequent to the date of filing of a beneficiary designation form in
      favor of Participant's spouse shall revoke such designation.

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      Additionally, the spouse of a Participant domiciled in a community
      property jurisdiction shall join in any designation of Beneficiary other
      than the spouse.

      If a Participant fails to designate a Beneficiary as provided above, or if
      his/her beneficiary designation is revoked by divorce or otherwise without
      execution of a new designation, or if all designated Beneficiaries
      predecease the Participant, then the distribution of such benefits shall
      be made to the Participant's estate. If a Beneficiary survives the
      Participant but dies before receiving a complete distribution of benefits,
      any remaining amount shall be paid to the estate of such Beneficiary in a
      lump-sum.

9.    Amendment and Termination of Plan

      9.01  Amendment. The Committee may amend the Plan at any time in whole or
            in part, provided, however, that, except as provided in Section 9.02
            and Section 6.02, no amendment shall be effective to decrease the
            benefits under the Plan payable to any Participant or Beneficiary
            with respect to any Elective or Non-Elective Deferred Compensation
            deferred prior to the date of the amendment. Written notice of any
            amendments (other than amendments that are administrative in nature)
            shall be given to each Participant in the Plan.

      9.02  Termination of Plan

            a.    Company's Right to Terminate. The Committee may terminate the
                  Plan at any time.

            b.    Payments Upon Termination. Upon any termination of the Plan
                  under this section, Compensation shall cease to be deferred
                  prospectively, and, with respect to Compensation deferred
                  previously, the Company will pay to the Participant (or the
                  Participant's Beneficiary, if after the Participant's death),
                  in a lump-sum, the value of his/her Deferred Compensation
                  Account.

10.   Miscellaneous

      10.01 Unsecured General Creditor. Participants and their beneficiaries,
            heirs, successors and assignees shall have no legal or equitable
            rights, interests, or other claims in any property or assets of the
            Company, nor shall they be beneficiaries of, or have any rights,
            claims, or interests in any life insurance

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                                      E-37
<PAGE>

            policies, annuity contracts, or the policies therefrom owned or that
            may be acquired by the Company ("policies"). Such policies or other
            assets of the Company shall not be held in any way as collateral
            security for the fulfilling of the obligations of the Company under
            this Plan. Any and all of the Company's assets and policies shall be
            and will remain general, unpledged, unrestricted assets of the
            Company. The Company's obligation under the Plan shall be that of an
            unfunded and unsecured promise of the Company to pay money in the
            future.

      10.02 Grantor Trust. Although the Company is responsible for the payment
            of all benefits under the Plan, the Company, in its sole discretion,
            may contribute funds as it deems appropriate to a grantor trust for
            the purpose of paying benefits under this Plan. Such trust may be
            irrevocable, but assets of the trust shall be subject to the claims
            of creditors of the Company. To the extent any benefits provided
            under the Plan actually are paid from the trust, the Company shall
            have no further obligation with respect thereto, but to the extent
            not so paid, such benefits shall remain the obligation of, and shall
            be paid by, the Company. Participants shall have the status of
            unsecured creditors on any legal claim for benefits under the Plan,
            and shall have no security interest in any such grantor trust.

      10.03 Successors and Mergers, Consolidations or Change in Control. The
            terms and conditions of this Plan shall inure to the benefit of the
            Participants and shall bind the Company, its successors, assignees,
            and personal representatives. If substantially all of the stock or
            assets of the Company are acquired by another entity, or if the
            Company is merged into, or consolidated with, another entity, then
            the obligations created hereunder shall be obligations of the
            acquirer or successor entity.

      10.04 Non-Assignability. Neither a Participant, nor any other person,
            shall have any right to commute, sell, assign, transfer, pledge,
            anticipate, mortgage or otherwise encumber, transfer, hypothecate,
            or convey in advance of the actual receipt, any amounts payable
            hereunder, or any part thereof. All rights to payments expressly are
            declared to be unassignable and nontransferable. No part of the
            amounts payable, prior to actual payment, shall be subject to
            seizure or sequestration for the payment of any debts, judgments,
            alimony or separate maintenance owed by a Participant, or any other
            person, nor shall they be

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                                      E-38
<PAGE>

            transferable by operation of law in the event of a Participant's, or
            any other person's, bankruptcy or insolvency.

      10.05 Employment or Future Eligibility to Participate Not Guaranteed.
            Nothing contained in this Plan, nor any action taken hereunder,
            shall be construed as a contract of employment, or as giving any
            Eligible Employee any right to be retained in the employ of the
            Company. Designation as an Eligible Employee may be revoked at any
            time by the Committee with respect to any Compensation not yet
            deferred.

      10.06 Protective Provisions. A Participant will cooperate with the Company
            by furnishing any and all information reasonably requested by the
            Company in order to facilitate the payment of benefits hereunder,
            including, but not limited to, taking such physical examinations as
            the Company reasonably may deem necessary (if the Company purchases
            life insurance to informally fund the Plan) and taking such other
            relevant action as may be reasonably requested by the Company. If a
            Participant refuses to cooperate, the Company shall have no further
            obligation to the Participant under the Plan, except for the
            distribution to Participant of his or her Deferral Amount.

      10.07 Gender, Singular and Plural. All pronouns, and any variations
            thereof, shall be deemed to refer to the masculine, feminine, or
            neuter, as the identity of the person(s) or entity(s) may require.
            As the context may require, the singular may be read as the plural
            and the plural as the singular.

      10.08 Captions. The captions to the articles, sections, and paragraphs of
            this Plan are for convenience only and shall not control or affect
            the meaning or construction of any of its provisions.

      10.09 Applicable Law. This Plan shall be governed and construed in
            accordance with the laws of the State of New Jersey.

      10.10 Validity. In the event any provision of this Plan is found to be
            invalid, void, or unenforceable, the same shall not affect, in any
            respect whatsoever, the validity of any other provision of this
            Plan.

      10.11 Notice. Any notice or filing required or permitted to be given to
            the Company or the Committee shall be sufficient if in writing and
            hand delivered, or sent by

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                                      E-39
<PAGE>

            registered or certified mail, to the principal office of the Company
            at 685 North Route 202/206, Bridgewater, NJ 08807, directed to the
            attention of the Vice President, Human Resources. Such notice shall
            be deemed given as of the date of delivery or, if delivery is made
            by mail, as of the date shown on the postmark on the receipt for
            registration or certification. Any notice to the Participant shall
            be addressed to the Participant at the Participant's residence
            address as maintained in the Company's records. Any party may change
            the address for such party here set forth by giving notice of such
            change to the other parties pursuant to this Section.

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                                      E-40

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