Document:

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                                                                    EXHIBIT 10.2

                                                                  EXECUTION COPY

                              EMPLOYMENT AGREEMENT

         EMPLOYMENT AGREEMENT (this "Agreement") dated as of January 5, 2005
(the "Effective Date"), between ENZON PHARMACEUTICALS, INC. (the "Company"), a
Delaware corporation with offices in Bridgewater, New Jersey, and CRAIG A.
TOOMAN (the "Executive"), a resident of Texas.

                                   BACKGROUND

         A. The Company is a biopharmaceutical company engaged in developing
advanced therapeutics for life threatening diseases.

         B. The Executive has experience as an executive in the
biopharmaceutical industry.

         C. The Company wishes to employ the Executive to render services for
the Company on the terms and conditions set forth in this Agreement, and the
Executive wishes to be retained and employed by the Company on such terms and
conditions.

                                      TERMS

         In consideration of the foregoing 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. The Company hereby employs the Executive, and the
Executive accepts such employment and agrees to perform services for the
Company, for the period and upon the other terms and conditions set forth in
this Agreement.

         2. Term. The term of the Executive's employment hereunder (the "Term")
shall commence on the Effective Date, and unless terminated at an earlier date
in accordance with Section 9 hereof, and shall extend through the third
anniversary of the Effective Date, 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 ninety (90) days prior to the third
anniversary of the Effective Date (a "first term notice of non-renewal") that
such other party does not wish for the term hereof to continue beyond the third
anniversary of the Effective Date, in which event the term hereof and the
Executive's employment shall end at 5:00 PM on the third anniversary of the
Effective Date. If neither party provides a first term notice of non-renewal
prior to the third anniversary of the Effective Date, then the Term and the
Executive's employment shall extend until 5:00 PM Eastern Time on the earlier of
(a) the fifth (5th) anniversary of the Effective Date and (b) the date that is
twelve (12) months following the date on which either party hereto receives
written notice (an "extension term notice of non-renewal") from the other party
that such other party does not wish for the term hereof to continue beyond such
twelve (12) month notice period. For the purposes of this Agreement, a "first
term notice of non-renewal" and an "extension term notice of non-renewal" shall
be referred to collectively as a "notice of non-renewal."

         3. Position and Duties.

         (a) Service with Company. During the Term, 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 of Strategic
Planning and Corporate Communications of the Company. As Executive Vice
President of Strategic Planning and Corporate Communications, the Executive
shall have the authority, duties and responsibilities associated with this
position, including, without limitation, the authority and duty generally to
supervise and direct the strategic planning, investor and public relations
business of the Company as well as such additional duties consistent with his
position as assigned by the Chief Executive Officer, reporting to the Chief
Executive Officer, and 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.

                  (i) 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.

                  (ii) The Executive has provided the Company with a draft of a
         Consulting Agreement between the Executive and Genzyme Oncology
         ("Genzyme") (such draft substantially in the form as previously sent to
         the Company being the "Consulting Agreement"), which, to the best of
         the Executive's knowledge, is the only agreement that could arguably
         restrict or interfere with his employment activities subsequent to the
         termination of his employment with his former employer. Company agrees
         that the execution by the Executive of and the performance by the
         Executive of his obligations under the Consulting Agreement shall not
         constitute a breach of this Agreement, and Company specifically
         authorizes the Executive to fulfill the terms of the Consulting
         Agreement.

                  (iii) The Executive agrees that he will not use on behalf, or
         for the benefit, of the Company, or disclose to the Company, any
         confidential information of or concerning his former employer or
         Genzyme. It is the Company's intention that the Executive not breach
         any confidentiality agreement to which he is party, including, without
         limitation, any such agreement he may have with his former employer or
         Genzyme. The Executive will not render or perform services for any
         other corporation, firm, entity or person which are inconsistent with
         the provisions of this Agreement other than pursuant to the terms of
         the Consulting Agreement.

                  (iv) 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 conflict or
         interfere with the performance of his obligations under this Agreement.

         (c) The Executive's Representations and Warranties. The 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 the Executive (including, without limitation, the Consulting
Agreement). The 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 the Executive received
notice of action or threat of action of debarment. The Executive shall comply
with the Company's material policies governing the conduct of senior executives,
including, without limitation, its Substance Abuse Policy, during the Term.

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         4. Compensation.

         (a) Base Salary. The Company shall pay to the Executive, less
applicable deductions and withholdings, base salary (the "Base Salary") at an
annual rate of Three Hundred Fifteen Thousand Dollars ($315,000) 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
the Executive during each fiscal year of the Company beginning after the
Effective Date shall be established by the Board or the Compensation Committee
thereof following an annual performance review, but in no event shall the annual
rate of Base Salary for any successive year of the Term be less than the highest
annual rate of Base Salary in effect during the previous year of the Term.

         (b) Annual Bonus. The 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 objective 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 the 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. In
addition to the foregoing amounts, within five (5) days after Executive's first
day of employment, the Company shall pay to Executive a bonus in cash in the
amount of $125,000.

         (c) Participation in Benefit Plans; Indemnification. While he is
employed by the Company, the Executive shall also be eligible to participate in
any incentive and employee benefit plans or programs which may be offered by the
Company to the extent that the Executive meets the requirements for each
individual plan and in all other plans in which Company executives participate.
The Company provides no assurance as to the adoption or continuance of any
particular employee benefit plan or program, and, except as provided at Section
10 hereof, the Executive's participation in any such plan or program shall be
subject to the provisions, rules and regulations applicable thereto. During the
Executive's employment with the Company, and thereafter, the Company shall
indemnify the Executive and hold him harmless from and against any claim,
liability and expense (including, without limitation, reasonable attorney fees)
made against or incurred by him in connection with his employment by the
Company, and cover him under a policy of directors and officers liability
insurance, in a manner and to an extent that is not less favorable to the
Executive as the indemnification protection, and liability insurance coverage,
that is afforded by the Company to any other senior officer or director.

         (d) Expenses. The Company will pay or reimburse the 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.

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                  (i) The Company shall also reimburse Executive for the
         reasonable and necessary costs of relocating his household goods and
         vehicles and personal effects from San Antonio and other reasonable and
         necessary moving and interim housing expenses incurred in connection
         with the move of Executive and his family from San Antonio, Texas to
         the New Jersey area. Such reasonable and necessary moving and interim
         housing expenses shall include, but not be limited to (1) realtor
         commissions and customary closing costs in connection with the sale of
         his home in Texas and interim loan closing costs and permanent loan
         closing costs relating to the acquisition of his home in the New Jersey
         area, (2) interest payments on the mortgage loan relating to his home
         in Texas until his home in Texas shall have been sold and (3) extra or
         redundant costs (other than the principal payments on his mortgage loan
         relating to his home in Texas) associated with, or incurred in
         connection with, the continued ownership of his home in Texas pending
         its sale. In addition, the Company shall provide an additional payment
         to Executive such that after taking into account any taxes on such
         payment, Executive shall retain a sufficient amount equal to any income
         tax liability incurred by Executive in connection with the foregoing
         payments and reimbursements under this subparagraph (d)(i). If the
         Executive voluntarily terminates his employment for Good Reason
         (defined below), he shall not be obligated to repay any amount provided
         to the Executive under this Section 4(d)(i). In the event of any
         inconsistency between this Agreement and the Company's relocation
         policy, this Agreement shall control.

         (e) Stock Options. Subject to the Executive commencing his employment
hereunder as the Company's Executive Vice President of Strategic Planning and
Corporate Communications on the Effective Date, the Executive shall be granted
options to purchase shares of common stock of the Company ("Common Stock")
pursuant to the Company's 2001 Incentive Stock Plan, as amended (the "Stock
Plan") and the form of Non-Qualified Stock Option Certificate and Agreement
attached hereto as Exhibit A (the "Option Agreement"). Such options (the
"Option") will cover 125,000 (One Hundred Twenty Five Thousand) shares of Common
Stock at an exercise price per share equal to the last reported sale price of a
share of Common Stock as reported by the Nasdaq Stock Market on the Effective
Date or, if the Nasdaq Stock Market is not open on the Effective Date, on the
day next preceding the Effective Date on which the Nasdaq Stock Market is open.
The Option shall vest and be exercisable as to 31,250 shares on each of the
first four anniversaries of the Effective Date. Except as otherwise provided in
Section 10 hereof, once such options become exercisable, they shall remain
exercisable until 5:00 PM Eastern Time on the tenth (10th) anniversary of the
Effective Date. Except as otherwise provided in this Agreement, the Option
Agreement, a copy of which the Executive has received and reviewed, shall govern
the terms of the options granted hereunder. In addition, at the discretion of
the Board of Directors (or its applicable committee), the Executive shall be
entitled to receive further grants of stock options, subject to the terms of the
Option Plan.

         (f) Restricted Stock. Upon execution of this Agreement, the Executive
shall be granted 25,000 (Twenty Five Thousand) shares of restricted stock,
subject to the terms of the Restricted Stock Award Agreement attached hereto as
Exhibit B and the 2001 Incentive Stock Plan. The restricted stock shall vest
7,500 shares on each of the third and fourth anniversaries of the Effective Date
and 10,000 shares on the fifth anniversary of the Effective Date. The Executive
acknowledges that he has received and reviewed a copy of the 2001 Incentive
Stock Plan. At the discretion of the Board of Directors (or its applicable
committee), the 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 the Executive any
additional grants of options, restricted stock, other equity awards or
securities of the Company.

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

         (h) Tax and Financial Planning Services. During each year of the term
of this Agreement, Company agrees to reimburse Executive, up to $7,500 per
fiscal year, for the costs of all tax return preparation, including any United
States, state, or local returns, as well as for professional estate and
financial planning services, if any, with Executive choosing the tax and other
professionals who will provide such services. The Company will pay Executive's
professional fees incurred to negotiate and prepare this Agreement and related
agreements, in an amount not to exceed $7,500.

         (i) 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 the Term plus the
one (1) year period immediately following termination of the Executive's
employment with the Company irrespective of the reason for, or circumstances
surrounding, such termination. In consideration for the compensation payable to
the Executive pursuant to this Agreement, including without limitation the stock
options and Restricted Stock granted to the Executive hereunder, during the
Noncompete Period, the 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, marketing or
selling single-chain antigen-binding proteins or (z) any specific technology or
specific area of business in which the Company becomes involved to a significant
degree during the Term. 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
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 the Executive is employed by the Company as provided in Section
5(b) hereof. The provisions contained in this Section 5(a) shall survive the
termination of the Executive's employment pursuant to Section 9 hereof or
otherwise. In the event the 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 the Executive's compliance with the terms of this Section 5(a).

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         (b) Confidentiality.

                  (i) The 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 (collectively,
         "Confidential Information"). The Executive acknowledges that such
         Confidential Information is a valuable and unique asset of the Company
         and covenants that, both during and after the Term, he 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 5(b) 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 a specific order of a court or governmental
         agency.

                  (ii) All Confidential Information, as well as any other
         records, designs, patents, business plans, financial statements,
         manuals, memoranda, lists, research and development plans and products,
         and other property delivered to or compiled by the 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 Confidential Information, as well as any other 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 the
         Executive shall be delivered promptly to the Company without request by
         it upon termination of the Executive's employment.

         (c) Nonsolicitation of Employees. During the Noncompete Period, the
Executive shall not, directly or indirectly, personally or through others,
encourage to leave employment with the Company, 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.

         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
other than the compensation to be paid to the Executive as provided in this
Agreement.

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         7. Acknowledgment. The Executive agrees that the covenants and
agreements contained in Section 5 hereof are material to 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 the 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 the Executive of any such
covenants or agreements.

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

         (b) Limitation of Covenant. Ownership by the Executive, as a passive
investment, of less than five percent (5%) of the outstanding shares of capital
stock or equity of any corporation or other entity that is publicly traded shall
not constitute a breach of Section 5.

         (c) Blue Pencil Doctrine. The restrictions contained in Section 5 are
limited to the United States. 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. The 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. The 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 one year after the termination of the Executive's employment
with the Company.

         8. Intellectual Property and Related Matters.

         (a) Disclosure and Assignment. The 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
the Executive, either solely or in collaboration with others, during the Term,
or within six months thereafter, whether or not during regular working hours,
relating either directly or indirectly to the business, products, practices or
techniques of the Company ("Developments"). The Executive 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 the Executive's
right, title and interest in and to any and all of the Developments. At the
request of the Company, the 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 three (3) years
after the end of the Term.

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         (b) Limitation on Section 8(a). The provisions of Section 8(a) shall
not apply to any Development meeting the following conditions:

                  (i) such Development was developed entirely on the Executive's
         own time;

                  (ii) such Development was made without the use of any Company
         equipment, supplies, facility or trade secret or customer information;

                  (iii) such Development does not relate (A) directly to the
         business of the Company or (B) to the Company's actual or demonstrably
         anticipated research or product or customer development; and

                  (iv) such Development does not result from any work performed
         by the Executive for the Company.

         (c) Assistance of the Executive. Upon request and without further
compensation therefor, but at no expense to the Executive, the 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. The 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 the Company's request or the
conclusion of his employment, the Executive will promptly surrender same to the
Company.

         (e) Copyrightable Material. All right, title and interest in all
copyrightable material that the Executive shall conceive or originate, either
individually or jointly with others, and which arise out of the performance of
his duties under this Agreement or otherwise as an employee of the Company, 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 therefor, but at no expense to the
Executive, the 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 the 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 the 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.

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         9. Termination of Employment.

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

                  (i) the Executive dies,

                  (ii) the 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 the Executive's employment
         for "Cause" and notifies the Executive in writing of such election,

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

                  (v) The Executive elects to terminate his employment, without
         Good Reason and without liability, and notifies the Board in writing of
         such election.

         If the Executive's employment is terminated pursuant to clause (i),
(ii) or (iii) of this Section 9(a), such termination shall be effective
immediately. If the Executive's employment is terminated pursuant to subsection
(iv) of this Section 9(a), such termination shall be effective 30 days after
receipt of the notice of termination, and if pursuant to subsection (v) of this
Section 9(a), such termination shall be effective 15 days after receipt of such
notice.

         (b) "Cause" Defined. "Cause" shall mean (i) the willful engaging by the
Executive in illegal conduct or gross misconduct that is demonstrably and
materially injurious to the Company, (ii) the Executive's willful refusal to
perform his duties hereunder (other than any such failure resulting from illness
or incapacity) which refusal is demonstrably and materially injurious to the
Company, but only after the Executive has first received written notice of such
alleged refusal, and such refusal shall have continued for fifteen (15) days
after such notice without cure by the Executive, or (iii) the Executive's
material breach of his obligations under this Agreement which breach is
demonstrably and materially injurious to the Company, but only after the
Executive has first received written notice of such alleged breach and has
failed to cure such breach within fifteen (15) days after such notice; provided,
however, that if the breach is not one that can be reasonably cured, then the
foregoing requirement in this Clause (iii) for notice and opportunity to cure
shall not apply. For purposes of this Section 9(b), no act or failure to act on
the Executive's part shall be deemed "willful" unless done, or omitted to be
done, by the Executive not in good faith and without reasonable belief that the
Executive's action or omission was in the best interests of the Company.
Notwithstanding the foregoing, the Executive shall not be deemed to have been
terminated for Cause unless and until the Company delivers to the Executive a
copy of a resolution duly adopted by the affirmative vote of not less than a
majority of the Board (not including the Executive, if he is then on the Board)
at a meeting of the Board called and held for such purpose (after reasonable
notice to the Executive and an opportunity for the Executive, together with
counsel, to be heard before the Board) finding that, in the good faith opinion
of the Board, the Executive engaged in conduct set forth above and specifying
the particulars thereof in reasonable detail.

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

                  (i) Any material adverse change in the Executive's status or
         position, including, without limitation, any material diminution in the
         Executive's position, duties, responsibilities or authority or the
         assignment to the Executive of any duties or responsibilities that are
         inconsistent with the Executive's status or position as of the
         Effective Date; or

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

                  (iii) A reduction in the Target Bonus which could be paid to
         the Executive under the Bonus Plan below 50% of the Executive's Base
         Salary or a failure to pay when due any bonus earned for a completed
         performance period in accordance with the applicable bonus plan
         ("Earned Bonus"), provided however, that the Company's failure to
         actually award any bonus to the Executive, or the Company's actually
         awarding a bonus to the Executive which is less than the Target Bonus
         in each case in accordance with the applicable bonus plan, shall not
         constitute Good Reason; or

                  (iv) The breach by the Company of any of its material
         obligations under this Agreement;

                  (v) The relocation of the Company's principal executive
         offices to a location that increases the Executive's commuting distance
         by more than thirty-five (35) miles or the Company requiring the
         Executive to be based anywhere other than the Company's principal
         executive offices, except for required travel substantially consistent
         with the Executive's business obligations;

                  (vi) The Company provides the Executive a notice of
         non-renewal of the Term under Section 2(b) hereof; or

                  (vii) Jeffrey Buchalter ceases to be the Chief Executive
         Officer of the Company for any reason.

         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 the 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 this
         purpose, any such individual 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 or consents by or on
         behalf of a Person (as defined herein) other than the Board) nor (B)
         appointed by directors so nominated, or

                                       10
<PAGE>

                  (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 or private placement 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 or consolidation, was a
         subsidiary of the Company, shall be the surviving entity; or

                  (iv) a merger or consolidation of the Company following which
         either the Company or a corporation that, prior to the merger or
         consolidation, was a subsidiary of the Company, shall be the surviving
         entity, but a majority of the Outstanding Company Voting Securities is
         then owned by a Person or Persons who were not "beneficial owners" of a
         majority of the Outstanding Company Voting Securities immediately prior
         to such merger or consolidation; 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 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 the 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, the 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.

                                       11
<PAGE>

         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 the Executive's employment as the
Company's Executive Vice President of Strategic Planning and Corporate
Communications without Cause pursuant to Section 9(a)(iv) hereof, the Executive
terminates his employment for Good Reason pursuant to Section 9(c) hereof, or
the Company fails to renew the Term upon the expiration thereof under Section
2(a) or the Company provides a notice of non-renewal under Section 2 hereof,
then

                  (i) the Executive shall receive lump sum cash payment within
         ten (10) days after the date of termination of employment in an amount
         equal to one (1) year of his annual Base Salary at the time of such
         termination;

                  (ii) the Executive shall receive a lump sum cash payment
         within ten (10) days after the date of termination of employment in an
         amount 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;

                  (iii) if the 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 the 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 the Executive and his Family
         Members for a period of up to eighteen (18) months commencing on the
         date of such termination; provided, that the Company shall have no
         obligation to reimburse the Executive for the premium cost of COBRA
         coverage as of the date the Executive and his Family Members become
         eligible to obtain comparable benefits from a subsequent employer;

                  (iv) the Executive shall receive a lump sum cash payment
         within ten (10) days after the date of termination of employment in an
         amount equal to ("Accrued Obligations"): (1) any unpaid Base Salary
         through the date of termination, (2) any unpaid Earned Bonus for a
         performance period ending prior to the date of termination, (3) accrued
         and unpaid vacation and (4) incurred and unreimbursed business
         expenses;

                  (v) the Executive shall receive a lump sum cash payment within
         ten (10) days after the date of termination of employment in an amount
         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;

                  (vi) all options granted to the Executive pursuant to Section
         4(e) hereof that have not vested at the time of such termination shall
         vest immediately upon termination;

                                       12
<PAGE>

                  (vii) all options granted to the Executive pursuant to Section
        4(e) hereof that have vested or become vested at the time or as a result
        of such termination will remain exercisable until their expiration
        dates;

                  (viii) all shares of restricted stock granted to the Executive
        pursuant to Section 4(f) hereof that have not vested at the time of such
        termination shall vest immediately upon such termination; and

                  (ix) the Executive shall continue to be entitled to any
        deferred compensation and other unpaid amounts and benefits earned and
        vested prior to or as a result of the Executive's termination.

         (b) Termination For Cause. In the event the Company terminates the
Executive's employment as the Company's Executive Vice President of Strategic
Planning and Corporate Communications for Cause pursuant to Section 9(a)(iii)
hereof, (i) the Executive shall be entitled to receive payment of his Accrued
Obligations, (ii) the Executive shall continue to be entitled to any deferred
compensation and other unpaid amounts and benefits earned and vested prior to
the Executive's termination, (iii) all options to acquire shares in the Company
held by the Executive which have vested prior to the date of the 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 the Executive that have not vested prior to the date of
the 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 the Executive that have not vested prior to the date
of the Executive's termination of employment shall be forfeited.

         (c) Death. In the event the Executive's employment with the Company is
terminated as a result of the Executive's death, (i) the Executive's estate or
the Executive's duly designated beneficiaries shall be entitled to payment of
his Accrued Obligations; (ii) the Executive's estate or the 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 the 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 the
Executive shall fully vest; and (v) the Executive's estate or the 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
the Executive's death. If the 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 Members 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.

                                       13
<PAGE>

         (d) Disability. Upon termination of the Executive's employment as the
Company's Executive Vice President of Strategic Planning and Corporate
Communications on account of the Executive's disability pursuant to Section
9(a)(ii) hereof, (i) the Executive shall be entitled to payment of his Base
Salary through the commencement of long term disability payments to the
Executive under any plan provided or paid for by the Company and other Accrued
Obligations, (ii) the Executive 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) the Executive shall be
entitled to all compensation and benefits to which the Executive is entitled
pursuant to the Company's disability policies in effect as of the date of the
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 the Executive's
employment and (B) the end of the remaining exercise term of such options, (v)
all shares of restricted stock awarded to the Executive shall fully vest; and
(vi) the Executive shall continue to be entitled to any deferred compensation
and other unpaid amounts and benefits earned and vested prior to the Executive's
termination. If the 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 the Executive for the total applicable
premium cost for medical and dental coverage under COBRA for the 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 the 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 Without Good Reason or upon the Executive's
Notice of Non-Renewal. In the event the Executive voluntarily terminates his
employment with the Company without Good Reason, or the Executive's employment
terminates following the Executive having provided the Company with a notice of
non-renewal of the Term under Section 2 hereof, (i) the Executive shall be
entitled to receive payment of his Accrued Obligations, (ii) the Executive shall
continue to be entitled to any deferred compensation and other unpaid amounts
and benefits earned and vested prior to the 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 the Executive that
have not vested prior to the date of the Executive's termination of employment
shall be forfeited.

         (f) Termination Without Cause or For Good Reason In Connection With A
Change in Control. In the event the Company terminates Executive's employment as
the Company's Executive Vice President of Strategic Planning and Corporate
Communications without Cause pursuant to Section 9(a)(iv) hereof or Executive
terminates such employment for Good Reason pursuant to Section 9(c) 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 a lump sum cash payment within ten
         (10) days after the date of termination of employment in an amount
         equal to his Accrued Obligations 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;

                                       14
<PAGE>

                  (ii) Executive shall receive a lump sum cash payment within
         ten (10) days after the date of termination in an amount 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;

                  (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 commencing on the date of such termination and
         will continue to pay Executive an amount equal to such COBRA
         reimbursement during the six (6) 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;

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

         (g) Except as otherwise specifically provided under Section 10, all
payments made to the Executive under any of the subsections of this Section 10
that are based upon the Executive's salary or bonus shall be made at times and
in a manner that is in accordance with the Company's standard payroll practices
for senior management.

         (h) Notwithstanding anything else herein to the contrary, the 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 or
restricted stock unit vesting schedules unless the 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.

         (i) Nothing in this Agreement or in any other plan, award or agreement
of the Company applicable to the Executive shall result in the reduction or
limitation of (i) any payments under Section 10(f) and/or (ii) the accelerated
vesting of options to acquire common stock and/or (iii) shares of restricted
stock and/or restricted stock units under Section 11 or (iv) any other payments
or benefits (the "Total Payments") that may be deemed to be contingent upon a
change in ownership or control pursuant to Section 280G of the Internal Revenue
Code ("Code"), regardless of whether the Total Payments would be subject to the
excise tax imposed by Section 4999 of the Code. If the Executive does become
liable for any excise tax under Section 4999 of the Code, such liability shall
not entitle the Executive to any additional payments from the Company to
reimburse the Executive for such tax liability. The Company shall be entitled to
withhold from payments due to the Executive an amount equal to the actual amount
of any excise tax under Section 4999 of the Code to which the Executive is
subject, as determined by the Company's independent auditors.

                                       15
<PAGE>

         (j) 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 10(i) (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) of
such a plan, the Company and Executive agree to negotiate in good faith an
amendment to the provisions of Sections 10(f) or 10(i) to provide Executive with
comparable payments and benefits upon certain events of termination or otherwise
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 the
Executive.

         11. Effect of Change of Control. In the event of a Change of Control,
in addition to any other consequences provided for in this Agreement:

         (a) all shares of restricted stock and restricted stock units awarded
to the Executive shall fully vest immediately prior to the Change of Control;
and

         (b) all options to acquire shares of common stock of the Company held
by the Executive shall become fully vested immediately prior to the effective
date of the Change of Control.

         The Executive shall have a reasonable opportunity to exercise all or
any portion of such options prior to the effective date of the Change of
Control, and any options not exercised prior to the effective date of the Change
of Control shall terminate as of the effective date of the Change of Control and
will be of no further force or effect. To the extent that this Section 11 is
inconsistent with the provisions of the relevant plan and granting instruments
under which such options were issued, the Company and the Executive agree that
such inconsistent provisions are hereby superceded and the provisions of this
Section 11 shall govern.

         12. 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.

                                       16
<PAGE>

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

                           Mr. Craig Tooman
                           c/o: Enzon Pharmaceuticals, Inc.
                                Attn:  Senior Vice President of Human Resources
                           685 U.S. Highway 202/206
                           Bridgewater, NJ  08807

Address for the Company:

                           Enzon Pharmaceuticals, Inc.
                           685 Route 202/206
                           Bridgewater, New Jersey 08807
                           Attn:  Vice President & General Counsel

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

                                       17
<PAGE>

         (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 or 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 or 9(f).

         (k) 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.

         (l) Withholding Taxes. The Company may withhold from any benefits
payable under this Agreement all federal, state, city or other taxes as shall be
required pursuant to any law or governmental regulation or ruling.

         (m) Survival. The provisions of Section 4(c), 4(i) and Section 10 shall
survive the termination of the Executive's employment and the termination of the
Agreement.

         (m) Counterparts. This agreement may be executed in separate
counterparts, all of which taken together shall constitute one and the same
agreement.

                          Signatures on following page

                                       18
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed, or caused to be
executed by a duly authorized representative, this Employment Agreement as of
the Effective Date.

ENZON PHARMACEUTICALS, INC.

By: /s/ Jeffrey H. Buchalter
   ------------------------------
     Name:
     Title:

THE EXECUTIVE

   /s/ Craig A. Tooman
   ------------------------------

     CRAIG A. TOOMAN

                                       19<PAGE>

                                                                    Exhibit 10.3

                           ENZON PHARMACEUTICALS, INC.
               NON-QUALIFIED STOCK OPTION CERTIFICATE & AGREEMENT

                                                     Grant Date:

                                                        Certificate No.:

<TABLE>
<CAPTION>
         <S>                                           <C>

         -------------------------------------------------------------------------------------------------

                            SUMMARY GRANT INFORMATION
         -------------------------------------------------------------------------------------------------

         EMPLOYEE:
         --------------------------------------------- ---------------------------------------------------

         NUMBER OF SHARES:
         --------------------------------------------- ---------------------------------------------------

         EXERCISE PRICE:
         --------------------------------------------- ---------------------------------------------------

         PLAN:                                         2001 Incentive Stock Plan
         --------------------------------------------- ---------------------------------------------------

         TERMINATION DATE:                             _________ (subject to earlier termination,
                                                       as set forth below)
         --------------------------------------------- ---------------------------------------------------

         -------------------------------------------------------------------------------------------------
                               VESTING INFORMATION
         -------------------------------------------------------------------------------------------------
                                                        Number of Shares at to which the Option Becomes
                             Date                                         Exercisable
         --------------------------------------------- ---------------------------------------------------

                       January 5, 2006
         --------------------------------------------- ---------------------------------------------------

                       January 5, 2007
         --------------------------------------------- ---------------------------------------------------

                       January 5, 2008
         --------------------------------------------- ---------------------------------------------------

                       January 5, 2009
         --------------------------------------------- ---------------------------------------------------
</TABLE>

         In accordance with the terms and conditions of the Plan and the
Employment Agreement between Employee and the Company of even date herewith (the
"Employment Agreement") and the mutual promises and undertakings contained in
the attached pages, intending to be legally bound, the parties hereto agree to
the provisions set forth in the Option Terms attached hereto.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth above.

ENZON PHARMACEUTICALS, INC.                       EMPLOYEE

By:_________________________________              ______________________________
                                                            Signature

<PAGE>

                                  Option Terms

         1. Grant of Option. The Company hereby grants Employee the right and
option (the "Option") to purchase all or any part of an aggregate of the number
of shares of the Company's common stock, par value $0.01 per share (the "Common
Stock") set forth above, at the price per share set forth above (the "Exercise
Price") on the terms and conditions set forth in this Agreement, in the Plan and
in the Employment Agreement. It is understood and agreed that the Exercise Price
is the per share Fair Market Value (as defined in the Plan) of such shares on
the date of this Agreement. The Option is not intended to be an Incentive Stock
Option within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"). The Option is issued pursuant to the Plan and is
subject to its terms. A copy of the Plan has been furnished to Employee.
Employee hereby confirms he/she has received and thoroughly read the Plan. The
Company invites and encourages Employee to contact any member of the Company's
Human Resources Department with any questions he/she may have regarding the Plan
or this Agreement.

         2. Expiration. The Option shall terminate at the close of business on
the termination date set forth above or earlier as is prescribed herein.
Employee shall not have any of the rights of a shareholder with respect to the
shares subject to the Option until such shares shall be issued to Employee upon
the proper exercise of the Option.

         3. Vesting of Option Rights. Except as otherwise provided in Section 5
of this Agreement, the Option shall become exercisable in portions in accordance
with the schedule set forth above.

         4. Exercise of Option after Termination of Employment. 5. The
exercisability of this Option after termination of Employee's employment with
the Company shall be as set forth in the Employment Agreement.

         5. Acceleration of Exercisability. The acceleration of the
exercisability of this Option shall be as set forth in the Employment Agreement.

         6. Definitions. All capitalized terms used, but not defined herein, if
any, shall have the meanings given them in the Employment Agreement.

         7. Transfer and Assignment. The Option may only be transferred or
assigned in accordance with subsection 10(d) of this Agreement.

         8. Method of Exercise of Option. Subject to the foregoing and the other
terms and conditions hereof, and provided that the sale of the Company's shares
pursuant to such exercise will not violate any state or federal securities or
other laws, the Option may be exercised in whole or in part from time to time by
Employee or other proper party serving written notice of exercise on the Company
at its principal office within the period during which the Option is exercisable
as provided in this Agreement. The notice shall state the number of shares as to
which the Option is being exercised and shall be accompanied by payment in full
of the Exercise Price for all shares designated in the notice. Payment of the
Exercise Price shall be made in cash (including bank check, personal check or
money order payable to the Company), or, with the approval of the Company (which
may be given in its sole discretion), by delivering to the Company for
cancellation shares of the Company's Common Stock already owned by Employee
having a Fair Market Value equal to the full purchase price of the shares being
acquired or a combination of cash and such shares.

                                     2 of 4
<PAGE>

         9. Miscellaneous.

                  (a) In the event that any provision of this Agreement
         conflicts with or is inconsistent in any respect with the terms of the
         Plan, the terms of the Plan shall control. To the extent there is any
         conflict among the provisions of this Agreement and those of the
         Employment Agreement, the Employment Agreement shall take precedence.
         To the extent there is any conflict among the provisions of this
         Agreement and those of the Plan, this Agreement shall take precedence.

                  (b) Neither the Plan nor this Agreement shall (i) be deemed to
         give any individual a right to remain an employee of the Company, (ii)
         restrict the right of the Company to discharge any employee, with or
         without cause, or (iii) be deemed to be a written contract of
         employment.

                  (c) The exercise of all or any parts of the Option shall only
         be effective at such time that the sale of shares of Common Stock
         pursuant to such exercise will not violate any state or federal
         securities or other laws.

                  (d) The Option shall not be transferred, except by will or the
         laws of descent and distribution to the extent provided in Section
         4(c), and, except for as provided in the Plan or this Agreement, during
         the Employee's lifetime the Option is exercisable only by the Employee.
         Notwithstanding the foregoing, Employee may transfer the Option to any
         Family Member, provided, however, that (i) Employee may not receive any
         consideration for such transfer, (ii) the Family Member must agree in
         writing not to make any subsequent transfers of the Option other than
         by will or the laws of the descent and distribution and (iii) the
         Company receives prior written notice of such transfer. For purposes of
         this Section 10(d), the definition of Family Member shall be the
         definition adopted by the Committee administering the Plan as of the
         date of the attempted transfer of the Option.

                  (e) If there shall be any change in the Common Stock subject
         to the Option through merger, consolidation, reorganization,
         recapitalization, dividend or other distribution, stock split or other
         similar corporate transaction or event of the Company, appropriate
         adjustments shall be made by the Company in the number and type of
         shares (or other securities or other property) and the price per share
         of the shares subject to the Option in order to prevent dilution or
         enlargement of the Option rights granted hereunder; provided, however,
         that the number of shares subject to the Option shall always be a whole
         number.

                  (f) The Company shall at all times during the term of the
         Option reserve and keep available such number of shares of the
         Company's Common Stock as will be sufficient to satisfy the
         requirements of this agreement.

                  (g) In order to provide the Company with the opportunity to
         claim the benefit of any income tax deduction which may be available to
         it upon the exercise of the Option and in order to comply with all
         applicable federal or state income tax laws or regulations, the Company
         may take such action as it deems appropriate to insure that, if
         necessary, all applicable federal or state payroll, withholding, income
         or other taxes are withheld or collected from Employee.

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<PAGE>

(h)      The Company, in its sole and absolute discretion, may allow Employee to
         satisfy Employee's federal and state income tax withholding obligations
         upon exercise of the Option by (i) having the Company withhold a
         portion of the shares of Common Stock otherwise to be delivered upon
         exercise of the Option having a Fair Market Value equal to the amount
         of federal and state income tax required to be withheld upon such
         exercise, in accordance with such rules as the Company may from time to
         time establish, or (ii) delivering to the Company shares of its Common
         Stock other than the shares issuable upon exercise of the Option with a
         Fair Market Value equal to such taxes, in accordance with such rules.

                                     4 of 4

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