UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K/ A

(Amendment No. 1)


þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2003

0-26156

(Commission File Number)

Novadigm, Inc.

(Exact name of registrant as specified in its charter)


Delaware		22-3160347
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

One International Blvd., Mahwah, NJ 07495

(Address of principal executive offices, including zip code)

(201) 512-1000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $.001 par value

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes o No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ [CHECK BOX IF NO LATE FILINGS REPORTED]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). o Yes þ No

The aggregate market value of the registrant’s Common Stock held by non-affiliates of the registrant as of September 30, 2002 (the last business day of the registrant’s most recently completed second fiscal quarter), based upon the closing price of the Common Stock on that date, as reported on the NASDAQ National Market, was approximately $28,302,076. Shares of Common Stock held by each executive officer and director and by each person who owns 10% or more of the outstanding Common Stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliates status is not necessarily a conclusive determination for other purposes.

On July 21, 2003, there were 19,129,604 shares of the registrant’s Common Stock outstanding.

EXPLANATORY NOTE

This Amendment No. 1 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2003 has been filed to include information required by Items 10, 11, 12 and 13 of Part III of Form 10-K, which originally was omitted in reliance on General Instruction G(3) thereto. The Company has made no further changes to its previously filed Form 10-K.

Part III


Item 10.	*Directors and Executive Officers*

The directors of Novadigm, Inc. (the “Company”) are as follows:


Name	Age		Positions with the Company	Director Since

Albion J. Fitzgerald		55	Chairman of the Board of Directors and Chief Executive Officer		February 1992
Robert B. Anderson		48	Executive Vice President, Secretary and Director		June 1992
Robert H. Forney(1)(2)(3)		61	Director		May 2001
Gerald M. Labie(3)		59	President and Chief Operating Officer		September 2001
Deborah Doyle McWhinney(1)(2)		48	Director		September 1997
H. Kent Petzold(1)(2)		56	Director		August 1992


(1)	Member of the Audit Committee

(2)	Member of the Compensation Committee

(3)	Member of the Strategic Committee

Albion J. Fitzgerald co-founded the Company in February 1992 and has served as Chairman since that time. Mr. Fitzgerald has also served as the Company’s Chief Executive Officer since 1992. Mr. Fitzgerald previously served as Chief Technology Officer. In May 1990, Mr. Fitzgerald founded Fitzgerald Associates, the Company’s predecessor, and served as the chief architect in the development of desired-state management and fractional differencing technologies that are the basis of the Company’s products, EDM and Radia. Mr. Fitzgerald’s brother-in-law, Wallace D. Ruiz, is the Company’s Chief Financial Officer, and Mr. Fitzgerald’s brother, Joseph Fitzgerald, is the Company’s Chief Technical Officer.

Robert B. Anderson joined the Company in June 1992 as Executive Vice President, Chief Financial Officer, Secretary and as a director. He currently serves as Executive Vice President, Managing Director of Europe, Middle East and Africa Operations, and Secretary and as a director.

Gerald M. Labie joined Novadigm in April 2001 as President and Chief Operating Officer. From 2000 until joining Novadigm, Mr. Labie was a partner with Core Strategies, Inc., a market development firm serving IT organizations. From 1997 to the time he joined Core Strategies, Mr. Labie was employed at Tech Data Corporation, a worldwide provider of IT products and services. Mr. Labie initially served as President and Managing Director of Tech Data’s European Operations and later as Senior Vice President of Marketing.

Robert H. Forney has been a director of the Company since May, 2001. He is a certified public accountant. Since June 2001, Mr. Forney has served as President and Chief Executive Officer of America’s Second Harvest, a charitable domestic hunger-relief organization. From 1996 to 2001, he served as President and Chief Executive Officer of the Chicago Stock Exchange.

Deborah Doyle McWhinney has been a director of the Company since September 1997. Since February 2001, she has been Executive Vice President of Charles Schwab & Co., Inc. and President of Schwab’s Services for Investment Managers Enterprise, which provides custody, trading and practice management services for independent registered investment advisors. From July 1999 to January 2001, she served as Group President of Engage Media Services Division, a premier Internet site performance measurement firm. From December 1995 to July 1999, Ms. McWhinney served as an Executive Vice President of Business Planning and Strategy for Visa International, Inc., which provided guidance for the future of Visa products and services and emerging technologies Ms. McWhinney is a director of Touch America Holdings, Inc., the Securities Investor Protection Corporation (SIPC), and the Women’s Museum of Dallas, and is Chairperson of the University of Montana Foundation’s Board of Trustees.

H. Kent Petzold has been a director of the Company since August 1992. Since May 2002, he has been a principal of AZ Ventures, LLC, a general partner of Arris Ventures, LLC, which is a private equity firm. From April 1998 to December 2001, he served as Chairman and Chief Executive Officer of Cyclone Commerce, Inc., a provider of business-to-business e-commerce solutions, and was a consultant to the software industry from June 1995 to April 1998. From August 1992 to May 1995, Mr. Petzold served as the President and Chief Executive Officer of the Company. Mr. Petzold also serves as a director of Xenos Group, Inc.

The table below identifies the executive officers who are not also directors of the Company.


Name	Age		Positions with the Company	Officer Since

Joseph J. Fitzgerald		41	Vice President, Chief Technical Officer		1997
Wallace D. Ruiz		52	Vice President, Treasurer and Chief Financial Officer		1995

Joseph J. Fitzgerald joined Novadigm in February 1992 as Director of Development and served in that capacity until April 1997 when he became Vice President of Research and Development. He became Vice President, Chief Technical Officer in September 2001. He is the brother of Albion Fitzgerald.

Wallace D. Ruiz joined Novadigm in May 1995 as Vice President, Treasurer and Chief Financial Officer. Mr. Ruiz is a certified public accountant. Mr. Ruiz is the brother-in-law of Albion Fitzgerald.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s officers, directors and persons who beneficially own more than ten percent of a registered class of the Company’s equity securities to file with the Securities and Exchange Commission reports of securities ownership on Form 3 and changes in such ownership on Forms 4 and 5. Officers, directors and more than ten percent beneficial owners also are required by rules promulgated by the Securities and Exchange Commission to furnish the Company with copies of all such Section 16(a) reports that they file. Based solely upon a review of the copies of Forms 3, 4, and 5 furnished to the Company and representations by certain executive officers and directors that no such reports were required for them, the Company believes that, during 2002, all of its directors, officers and more-than-ten-percent beneficial owners filed all such reports on a timely basis.


Item 11.	*Executive Compensation*

Summary Compensation Table

The following table shows, as to the Chief Executive Officer and each of the other four most highly compensated executive officers during the fiscal year ended March 31, 2003 (the “Named Executive Officers”), information concerning compensation awarded to, earned by or paid for services to the Company in all capacities during the fiscal years ended March 31, 2003, 2002, and 2001.


									Long-term
									Compensation

									Awards

									Number of
				Annual Compensation					Securities
		Fiscal							Underlying		All Other
Name and Principal Position		Year		Salary($)		Bonus($)			Options(#)		Compensation

Albion J. Fitzgerald			2003	$	275,000	$	—			—	$	3,240	(1)
	Chief Executive Officer		2002		275,000		56,250			—		2,800	(1)
			2001		200,000		100,000			—		—
Robert B. Anderson			2003		225,000		350,000	(2)		—		3,240	(1)
	Executive Vice President,		2002		225,000		56,250			100,000		2,800	(1)
	Europe, and Secretary		2001		190,833		150,000			66,000		—


								Long-term
								Compensation

								Awards

								Number of
				Annual Compensation				Securities
		Fiscal						Underlying		All Other
Name and Principal Position		Year		Salary($)		Bonus($)		Options(#)		Compensation

Joseph J. Fitzgerald			2003		225,000		18,750		—		—
	Vice President, Chief Technical		2002		225,000		28,125		100,000		2,800	(1)
	Officer		2001		187,000		75,000		—		—
Gerald M. Labie			2003		275,000		—		—		—
	President & Chief Operating		2002		268,830		51,563		400,000		100,000	(3)
	Officer		2001		—		—		—		—
Wallace D. Ruiz			2003		210,000		—		—		4,200	(1)(4)
	Vice President, Chief Financial		2002		200,000		28,125		75,000		4,000	(1)(4)
	Officer and Treasurer		2001		195,000		75,000		—		900	(4)


(1)	Represents tax preparation services paid by the Company.

(2)	Represents the amount of a retention bonus paid in fiscal 2003. See “Employment Agreements and Change-of-Control Arrangements” below.

(3)	Represents relocation expense paid by the Company.

(4)	Represents term life insurance premiums in the amount of $960 for 2003, $1,200 for 2002 and $900 for 2001 paid by the Company.

Option Grants in Last Fiscal Year

The Company did not grant stock options to any of the Named Executive Officers during the year ended March 31, 2003. The Company has never awarded any stock appreciation rights.

Aggregated Option Exercises in Last Fiscal Year

and Fiscal Year End Option Values

The following table shows the number of shares covered by both exercisable and non-exercisable stock options held by each of the Named Executive Officers as of March 31, 2003. Also reported are the values for “in-the-money” options, which represent the aggregate spread between the exercise prices of those existing stock options and the year-end price of the Company’s Common Stock. None of the Named Executive Officers exercised any stock options during fiscal 2003.



	Number of Securities
	Underlying				Value of Unexercised
	Unexercised Options				In-the-Money Options
	at March 31, 2003				at March 31, 2003(1)

Name	Exercisable		Unexercisable		Exercisable		Unexercisable

Albion J. Fitzgerald		—		—	$	—	$	—
Robert B. Anderson		142,707		23,293		355,925		7,575
Joseph J. Fitzgerald		47,917		52,083		174,178		189,322
Gerald M. Labie		191,670		208,330		149,503		162,497
Wallace D. Ruiz		190,938		39,062		221,509		141,990


(1)	Based on the closing price per share of the Company’s Common Stock on the NASDAQ National Market on March 31, 2003, which was $1.85, less the exercise prices of the options.

Director Compensation

Directors who are employees of the Company do not receive additional compensation for their service as directors of the Company, but they are reimbursed for out-of-pocket expenses in connection with attending board and committee meetings. Each non-employee member of the Board of Directors receives $2,000 for each Board meeting attended and $2,000 for each meeting attended of a Board committee on which such director serves. In addition, non-employee members are reimbursed for out-of-pocket expenses, are eligible for participation in the Company’s stock option plans and periodically receive stock option grants. Furthermore, Mr. Petzold is covered under the Company’s group health insurance plan at an annual premium cost to the Company of $10,890; and each of Ms. McWhinney and Mr. Petzold received tax services from the Company in the amount of $3,240.

Employment Agreements and Change-of-Control Arrangements

In April 2001, the Company entered into an employment agreement with Gerald Labie, President and Chief Operating Officer, pursuant to which Mr. Labie is entitled to receive an annual base salary of $275,000, subject to any increases as the Board of Directors shall authorize from time to time in connection with an annual review, plus additional variable compensation under the Company’s executive compensation plan. Subject to certain limitations, Mr. Labie’s employment agreement provides that, in the event of his Involuntary or Constructive Termination, during the period beginning 30 days before and ending 12 months after a Change of Control (the “Change of Control Period”), other than for Cause, or as a result of his death or disability, he shall be entitled to receive severance pay in an amount equal to 26 weeks of his base compensation. In addition, any unvested options held by him prior to any such termination shall accelerate and become exercisable in full. If Mr. Labie voluntarily resigns from the Company or if the Company terminates Mr. Labie’s employment for Cause, he shall not be entitled to receive severance or other benefits, except for those, if any, as may be established under the Company’s benefit plans as existing at the time of termination.

For the purposes of Mr. Labie’s employment agreement, a Change of Control shall mean the occurrence of any of the following: (1) any person becomes the beneficial owner, directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company’s then-outstanding voting securities or (2) a merger or consolidation of the Company with any other corporation in which securities representing 50% or more of the total voting power of the Company are exchanged with or for the surviving entity.

In November 2002, the Company agreed to pay Mr. Anderson Retention Consideration in the aggregate amount of $450,000, payable in installments. All installments had been paid as of April 1, 2003. To retain the full Retention Consideration, Mr. Anderson must be employed by Company through to and including November 8, 2005, except as discussed below. In the event that, prior to October 1, 2005, Mr. Anderson voluntarily terminates his employment for any reason or the Company terminates Mr. Anderson’s employment for Reasonable Cause (as defined below), (a) Mr. Anderson will not be entitled to any part of the Retention Consideration, and (b) Mr. Anderson must promptly repay to the Company the aggregate amount of all installments of the Retention Consideration paid to him prior to the date of his termination (without interest thereon through the date of termination). “Reasonable Cause” means (i) any act of personal dishonesty taken by Mr. Anderson in connection with his responsibilities as an employee and intended to result in his personal enrichment, (ii) Mr. Anderson’s conviction of, or plea of nolo contendere to, a felony, (iii) a willful act by Mr. Anderson which constitutes gross misconduct and which is injurious to the Company, or (iv) following delivery to Mr. Anderson of a written demand for performance from the Company which describes the basis for the Company’s belief that Mr. Anderson has not substantially performed Mr. Anderson’s duties, continued violations by him of his obligations to the Company. If Mr. Anderson’s employment terminates as a result of Involuntary or Constructive Termination other than for Reasonable Cause, he will be entitled to retain all of the Retention Consideration. If Mr. Anderson fails to repay to the Company any amounts owed by him within 20 business days of the termination of his employment, he must (a) pay to the Company interest on such amounts at a rate of 1.82% per annum, compounded annually, from and after the date of his employment termination through the date of payment of such amounts to the Company, and (b) pay all costs of collection and enforcement incurred by the Company in connection

therewith. Mr. Anderson has authorized the Company to withhold from him, and to offset against any amount repayable by him to the Company, any salary, bonus, vacation pay, commissions or any other compensation earned by him but unpaid. The Company is currently amortizing the retention bonus payment over the retention period. The unamortized balance is classified under prepaid expenses and other current assets and other long-term assets in the Company’s financial statements.

For the purposes of Mr. Labie’s and Mr. Anderson’s employment agreements, Involuntary or Constructive Termination means (1) the assignment to the executive of any duties or the significant reduction of the executive’s duties, either of which is inconsistent with the executive’s position with the Company and responsibilities in effect immediately prior to such assignment, or the removal of the executive from such position and responsibilities, in each case without the executive’s express written consent; (2) a substantial reduction of the facilities and perquisites available to the executive immediately prior to such reduction without the executive’s express written consent and without good business reasons; (3) a reduction by the Company in the base compensation of the executive as in effect immediately prior to such reduction; (4) a material reduction by the Company in the kind or level of employee benefits to which the executive is entitled immediately prior to such reduction with the result that the executive’s overall benefits package is significantly reduced; (5) any purported termination of the executive by the Company which is not effected for disability or for Cause, or any purported termination for which the grounds relied upon are not valid; (6) the failure of the Company to obtain the assumption of the employment agreement by any successors; or (7) any relocation of his job or office more than 40 miles from his then current job or office without the executive’s express written consent.

The Company has entered into an employment agreement, dated as of April 1, 2003, with Wallace D. Ruiz, Chief Financial Officer and Treasurer, pursuant to which Mr. Ruiz is entitled to receive an annual base salary of $225,000, subject to any increases as the Board of Directors shall authorize from time to time in connection with an annual review, plus additional variable compensation under the Company’s executive compensation plan. Subject to certain limitations, Mr. Ruiz’s employment agreement provides that, in the event of his Involuntary or Constructive Termination, other than for Cause, or as a result of his death or disability, he will be entitled to receive severance pay in an amount equal to a percentage of his base compensation plus a pro rata share of the bonus and commissions that he would have earned had he been employed by the Company at the end of the year in which the termination occurred and, in the case of death or disability, such other benefits, if any, as may then be established under the Company’s then-existing benefit plans. The percentage referred to in the previous sentence was initially 200% as of April 1, 2003, and will decline pro rata each day until it reaches 100% on April 1, 2004. Thereafter, the percentage will remain 100%. In addition, any unvested options held by him prior to termination shall (a) in the case of Involuntary or Constructive Termination other than for Cause, accelerate and become exercisable in full or (b) in the case of death or disability, accelerate and become exercisable as to that number of additional shares that would have vested if he had remained continuously employed for a period of six months following such termination and shall remain exercisable for the period prescribed in the stock option agreements. If Mr. Ruiz voluntarily resigns from the Company or if the Company terminates Mr. Ruiz’s employment for Cause, he shall not be entitled to receive severance or other benefits except for those, if any, as may be established under the Company’s benefit plans as existing at the time of termination.

Under Mr. Ruiz’s employment agreement, the Company also paid Mr. Ruiz a one-time retention bonus of $450,000, which vests on a pro rata basis each day beginning as of April 1, 2003 until it becomes fully vested on April 1, 2005.

For the purposes of Mr. Ruiz’s employment agreement, “Involuntary or Constructive Termination” means (1) without Mr. Ruiz’s express written consent, the assignment to Mr. Ruiz of any duties inconsistent with Mr. Ruiz’s position with the Company and responsibilities in effect immediately prior to such assignment; (2) without Mr. Ruiz’s express written consent, the removal of Mr. Ruiz from his position as Vice President, Finance, Chief Financial Officer and Treasurer of the Company; (3) without Mr. Ruiz’s express written consent, the reduction of his duties with respect to the financial, accounting and treasury functions of the Company (the “CFO Functions”); (4) the reduction of Mr. Ruiz’s duties with respect to functions other than the CFO Functions; provided, however, that if there are valid business reasons for requesting such a reduction of his duties, the Company shall have the right to request Mr. Ruiz’s express written consent, and

such consent may not be unreasonably delayed or withheld by him; (5) without Mr. Ruiz’s’s express written consent, a substantial reduction, without good business reasons, of the facilities and perquisites available to him immediately prior to such reduction; (6) a reduction by the Company in Mr. Ruiz’s base compensation as in effect immediately prior to such reduction; (7i) a material reduction by the Company in the kind or level of employee benefits to which Mr. Ruiz is entitled immediately prior to such reduction with the result that Mr. Ruiz’s overall benefits package is significantly reduced; (8i) without his express written consent, any relocation of Mr. Ruiz’s job or office more than 40 miles from his then current job or office; (9) any termination of Mr. Ruiz’s employment by the Company other than for Cause or as a result of Mr. Ruiz’s death or disability, or any purported termination for which the grounds relied upon are not valid; (10) any breach by the Company of its obligations under the employment agreement; or (11) the failure of the Company to obtain the assumption of the employment agreement by a successor of the Company.

For the purposes of Mr. Ruiz’s employment agreement, “Cause” is defined as (1) any act of personal dishonesty taken by Mr. Ruiz in connection with his responsibilities as an employee and intended to result in substantial and unlawful personal enrichment of Mr. Ruiz, (2) any act by Mr. Ruiz which constitutes gross dereliction of duty or an intentional refusal to perform the duties assigned to Mr. Ruiz, (3) Mr. Ruiz’s commission of a felony or an act of fraud against the Company or its affiliates, and (4) acts by Mr. Ruiz which constitute gross misconduct, are materially injurious to the Company and are demonstrably willful on Mr. Ruiz’s part, and which remain uncured after a reasonable amount of time after there has been delivered to Mr. Ruiz a written demand of cessation of such acts from the Company, which demand describes the basis for the Company’s belief that Mr. Ruiz engaged in or committed such acts. For purposes of this provision, no act will be considered “willful” unless it is done by Mr. Ruiz (a) deliberately and (b) in bad faith or without reasonable belief that Mr. Ruiz’s action was in the best interests of the Company. The burden will be on the Company to prove the existence of Cause in the event of a dispute between the Company and Mr. Ruiz regarding whether Mr. Ruiz’s employment has been terminated for Cause.


Item 12.	*Security Ownership Of Certain Beneficial Owners And Management And Related Stockholder Matters*

The following table sets forth certain information regarding the beneficial ownership of Common Stock of the Company as of July 16, 2003 for the following: (1) each person or entity known by the Company to own beneficially more than 5% of the outstanding shares of the Company’s Common Stock; (2) each director of the Company; (3) each of the Named Executive Officers (as defined for purposes of the Summary Compensation Table above); and (4) all directors and executive officers as a group. Except as otherwise indicated and pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by them. Unless otherwise indicated, the address for each person identified in the table is c/o Novadigm, Inc., One International Boulevard, Mahwah, New Jersey 07495. Beneficial ownership includes shares that may be acquired upon exercise of options if such options are presently exercisable or will become exercisable within 60 days after July 16, 2003. Beneficial ownership percentage is based on 19,105,978 shares outstanding as of July 16, 2003.


	Shares Beneficially		Percentage
Beneficial Owner	Owned		Beneficially Owned

Albion J. Fitzgerald(1)		2,935,273		15.4	%
Robert B. Anderson(2)		705,959		3.7	%
Joseph J. Fitzgerald(3)		1,347,434		7.1	%
Robert H. Forney(4)		28,332		*
Gerald M. Labie(5)		241,669		1.3	%
Deborah Doyle McWhinney(6)		82,000		*
H. Kent Petzold(7)		353,500		1.9	%
Wallace D. Ruiz(8)		213,477		1.1	%
All directors and executive officers as a group (8 persons)(9)		5,907,644		30.9	%


	*	Less than one percent.


(1)	Excludes 821,200 shares held by Shannon L. Ruiz, Albion J. Fitzgerald’s spouse, as to which Mr. Fitzgerald disclaims beneficial ownership.

(2)	Includes 150,000 shares of Common Stock that may be acquired upon exercise of stock options that are presently exercisable or will become exercisable within 60 days of July 16, 2003.

(3)	Includes 60,417 shares of Common Stock that may be acquired upon exercise of stock options that are presently exercisable or will become exercisable within 60 days of July 16, 2003.

(4)	Includes 23,332 shares of Common Stock that may be acquired upon exercise of stock options are presently exercisable or will become exercisable within 60 days of July 16, 2003.

(5)	Includes 241,669 shares of Common Stock that may be acquired upon exercise of stock options that are presently exercisable or will become exercisable within 60 days of July 16, 2003.

(6)	Includes 82,000 shares of Common Stock that may be acquired upon exercise of stock options that are presently exercisable or will become exercisable within 60 days of July 16, 2003.

(7)	Includes 100,000 shares of Common Stock that may be acquired upon exercise of stock options that are presently exercisable or will become exercisable within 60 days of July 16, 2003.

(8)	Includes 200,312 shares of Common Stock that may be acquired upon exercise of stock options that are presently exercisable or will become exercisable within 60 days of July 16, 2003.

(9)	Includes 857,730 shares of Common Stock that may be acquired upon exercise of stock options that are presently exercisable or will become exercisable within 60 days of July 16, 2003.

Equity Compensation Plan Information

The following table provides information as of March 31, 2003 related to the Company’s equity compensation plans in effect at that time:

Number of

Weighted-

Securities to be

Average Exercise

Number of

Issued Upon

Price of

Securities

Exercise of

Outstanding

Remaining Available

Outstanding

Options,

for Future Issuance

Options, Warrants

Warrants and

Under Equity

Plan Category

and Rights

Rights

Compensation Plans

Equity Compensation Plans approved by Security Holders

4,341,480

5.95

257,693

Equity Compensation Plans not approved by Security Holders

971,083

9.92

328,917

Total

5,312,563

6.66

586,610

Equity Compensation Plans Not Approved by Security Holders

In October 1999, the Company’s Board of Directors adopted and approved the 1999 Nonstatutory Stock Option Plan (the “1999 Plan”) and reserved 500,000 shares of Common Stock for issuance under the 1999 Plan. The Board of Directors authorized and reserved an additional 250,000 shares for issuance under the 1999 Plan in each of February 2000, June 2000 and August 2001. In November 2001, the Board of Directors authorized and reserved an additional 100,000 shares for issuance under the 1999 Plan. In April 2003, the Board of Directors authorized and reserved an additional 2,000,000 shares for issuance under the 1999 Plan (which shares are not reflected in the above table). Neither the 1999 Plan nor any of the amendments to the 1999 Plan were submitted to our stockholders for approval. The purposes of the 1999 Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to employees, new officers, directors and consultants and to promote the success of our business. Under the 1999 Plan, officers and directors are limited to grants at the time of initial service. Option terms may not exceed ten

years from the date of grant and the 1999 Plan will continue in effect until October 25, 2009 unless terminated sooner.

Stock Option Exchange

On May 29, 2003, the Company announced the commencement of a voluntary stock option exchange program, giving our non-executive employees the opportunity to exchange outstanding options for the right to receive new options at a later date. The opportunity to exchange outstanding options expires on July 31, 2003. The Board of Directors determined that, because most of the existing options have exercise prices significantly higher than the current market price per share of the Company’s Common Stock, the existing options no longer have sufficient value to motivate and retain the Company’s employees. Neither the Company’s executive officers nor its directors are eligible to participate in this option exchange program.

Employees who tender options for exchange will be granted, at their election, either: (a) new options to purchase three-fourths of the number of shares as the options tendered and accepted for exchange and that have the same vesting schedules as those of the tendered options or (b) new options to purchase the same number of shares as those tendered options and that have vesting schedules that are 18 months longer than those of the tendered options. The Company plans to grant the new options on or about the first business day that is at least six months and one day following the date of cancellation of the options accepted for exchange. The exercise price of the new options will be equal to the fair market value of one share of the Common Stock on the new option grant date. The Company currently expect the new option grant date to be on or about February 2, 2004.

Options to purchase 4,191,063 shares of Novadigm Common Stock, with a weighted average exercise price of $6.74 per share and an exercise price range of $1.70 to $24.63 per share, were held by employees eligible to participate in the stock option exchange program.

The stock option exchange program has been designed to comply with FASB Interpretation No. 44, Accounting for Certain Transactions Involving Stock Compensation. Accordingly, the Company expects there will be no compensation charges as a result of the stock option exchange program. The terms and conditions of the stock option exchange program are contained in a Tender Offer Statement on Schedule TO that the Company filed with the Securities and Exchange Commission on May 29, 2003, and amendments thereto.


Item 13.	*Certain Relationships And Related Transactions*

In July 1996, the Company loaned to Robert B. Anderson, the Company’s Executive Vice President, Secretary and a director, the aggregate amount of $226,450 for the purchase of the Company’s Common Stock. The loan was extended until July 21, 2002 with interest at the rate of 6.04% per annum, and in April, 2002 it was extended until October 21, 2002 with interest at the rate of 2.88% per annum. In January 1997, the Company loaned Mr. Anderson $38,000 to pay income taxes. That loan was extended until January 15, 2002 with interest at the rate of 5.90% per annum, and in April, 2002 the loan was extended until October 21, 2002 with interest at the rate of 2.73% per annum. In November 2002, these loans were paid in full.

In April 2000, the Company loaned $830,068 to Wallace D. Ruiz, the Chief Financial Officer and Treasurer of the Company, to permit his exercise of an expiring option to purchase 130,000 shares of the Company’s Common Stock. The full recourse promissory note, dated April 17, 2000, bore interest at a rate of 6.46% per annum, was secured by shares of the Company’s Common Stock and was originally due and payable April 17, 2001. In April 2001, The Board of Directors agreed to extend the due date of the loan until April 17, 2002 at an interest rate of 4.63% per annum. During the Company’s fiscal year ended March 31, 2002, Mr. Ruiz made payments in the amount of $313,000 against the outstanding balance. In April 2002, the Board of Directors agreed to extend the maturity date of the loan until October 21, 2002 at an interest rate of 2.88% per annum.

In October 2001, the Company loaned $197,406 to Mr. Ruiz, to permit his exercise of an expiring option to purchase 35,000 shares of the Company’s Common Stock. The full recourse promissory note, dated

October 1, 2001, bore interest at a rate of 3.58% per annum, was secured by shares of the Company’s Common Stock and was due and payable on October 1, 2002.

Mr. Ruiz subsequently repaid portions of the loans. At March 31, 2003, $835,674 in principal and accrued interest remained unpaid, all of which became due and payable in October 2002.

Under the terms of a settlement agreement dated as of May 16, 2003, Mr. Ruiz and the Company agreed to settle certain employment-related claims. These claims were related to Mr. Ruiz’s inability to exercise expiring options and sell the underlying shares of the Company’s Common Stock during certain times in 1999, 2000 and 2001 due to insider trading restrictions imposed by the Company at those times and due to certain loans made to him by the Company to allow Mr. Ruiz to exercise those options. The Company’s Board of Directors established a special independent committee which retained independent counsel, investigated Mr. Ruiz’ claims and negotiated a settlement on behalf of Novadigm, Inc. The special committee and the Board unanimously approved the terms of the settlement reached with Mr. Ruiz. Under the terms of the settlement, the Company paid Mr. Ruiz approximately $1,080,000 and Mr. Ruiz will repay to the Company all of the approximately $838,000 in outstanding principal and accrued interest on loans owed by him to Novadigm through a cash payment of approximately $542,000 and the surrender to the Company of 126,000 shares of the Company’s Common Stock pledged by Mr. Ruiz against repayment of the loans. The amounts paid under the settlement agreement were provided for in fiscal 2003. In addition, the Company entered into an amended employment agreement with Mr. Ruiz providing for, among other things, an increase in Mr. Ruiz’s base salary from $210,000 to $225,000 and the payment to Mr. Ruiz of a retention bonus of $450,000, subject to a two-year vesting schedule. The retention bonus will be recognized as compensation expense as it is earned over the two-year term of the agreement. For a description of the loans to Mr. Ruiz, see Note 10 to the Company’s Consolidated Financial Statements included herein.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on July 29, 2003.


	NOVADIGM, INC.

	By: /s/ WALLACE D. RUIZ

	Wallace D. Ruiz
	Vice President, Treasurer and
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

CERTIFICATIONS

I, Albion J. Fitzgerald, certify that:


	1. I have reviewed this annual report on Form 10-K, as amended, of Novadigm, Inc.;

	2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

	3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

	4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


	a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

	b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

	c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;


	5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):


	a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

	b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and


	6. The registrant’s other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.


	/s/ ALBION J. FITZGERALD

	Albion J. Fitzgerald
	Chairman of the Board and Chief Executive Officer

Date: July 29, 2003

I, Wallace D. Ruiz, certify that:


	1. I have reviewed this annual report on Form 10-K, as amended, of Novadigm, Inc.;

	2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

	3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

	4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


	a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

	b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

	c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;


	5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):


	a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

	b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and


	6. The registrant’s other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.


	/s/ WALLACE D. RUIZ

	Wallace D. Ruiz
	Vice President, Treasurer and Chief Financial Officer

Date: July 29, 2003

NOVADIGM INC 10-K/A