Exhibit 10.3

 

NONQUALIFIED STOCK OPTION

non-transferable

GRANT TO

DENI M. ZODDA

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(the “Participant”) on   February 22, 2007

the right to purchase (“Option”) from NovaDel Pharma Inc. (the “Company”)
598,973 shares of its common stock, par value $0.001 per share,
at the exercise price of $1.47 per share

pursuant to and subject to the provisions of the 2006 NovaDel Pharma Inc. Equity
Incentive Plan (the “Plan”) and to the terms and conditions set forth hereafter.
By accepting the Option, the Participant, shall be deemed to have agreed to the
terms and conditions set forth in this Award Agreement and the Plan.

IN WITNESS WHEREOF, NovaDel Pharma Inc. acting by and through its duly
authorized officer, has caused this Award Agreement to be executed as of the day
and year first above written.

 

 

 

 

NovaDel Pharma Inc.

 

 

 

 

By:

/s/ MICHAEL E. SPICER

 

 

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Its:

Chief Financial Officer

 

 

 

 

Accepted by the Participant:

 

 

 

 

/s/ DENI M. ZODDA

 

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Deni M. Zodda

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1.

Grant of Option. The committee (the “Committee”) appointed by the Board of
Directors of the Company to administer the 2006 NovaDel Pharma Inc. Equity
Incentive Plan (the “Plan”), hereby grants to the Participant named above, under
the Plan, a non-qualified stock option (the “Option”) to purchase from the
Company, on the terms and conditions set forth in this Award Agreement, the
number of shares (“Shares’) indicated above of the Company’s $0.001 par value
common stock (“Common Stock”), at the exercise price per share set forth above
(the “Exercise Price”). Unless otherwise indicated, any capitalized terms used
but not defined herein shall have the meaning ascribed to such term in the Plan.
By accepting the Option, the Participant is deemed to agree to comply with the
terms of the Plan, this Award Agreement and all applicable laws and regulations.

 

 

2.

Tax Matters. No part of the Option granted hereunder is intended to qualify as
an “incentive stock option” under Section 422 of the Internal Revenue Code of
1986, as amended (the “Code”).

 

 

3.

Vesting. The Option shall become exercisable as provided below, which shall be
cumulative. To the extent that the Option has become exercisable with respect to
a number of Shares as provided below, the Option may thereafter be exercised by
the Participant, in whole or in part, at any time or from time to time prior to
the expiration of the Option as provided herein and in accordance with the Plan,
including, without limitation, the filing of such written form of exercise
notice, if any, as may be required by the Committee and payment in full of the
Exercise Price multiplied by the number of Shares so exercised. Upon expiration
of the Option, the Option shall be cancelled and no longer exercisable. The
following table indicates each date upon which the Participant shall be entitled
to exercise the Option with respect to the percentage of Shares vested indicated
beside that date provided that the Participant is continuously employed at all
times until the applicable vesting date:

 

 

 

 

 

 

Vesting Date

Number of Shares Vested

 

 

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•

signing of a Board approved third party agreement for U.S. or world wide rights
of sumatriptan

200,324

 

 

 

 

 

•

signing of a Board approved third party agreement for U.S. or world wide rights
of zolpidem

199,324

 

 

 

 

 

•

approval by the Board of any third party agreement whereby the Company obtains
the right to develop a product incorporating an active pharmaceutical ingredient
(“API”) that is the subject of a then valid United States Patent (or in-process
United States Patent Application) and already approved for sale by the United
States Food and Drug Administration with sales in the U.S. of at least $100
million

199,325

 

 

 

There shall be no proportionate or partial vesting in the periods prior to each
vesting date and all vesting shall occur only on the appropriate vesting date.

 

 

4.

Option Term. The term of the Option shall be ten (10) years after the Grant
Date, subject to earlier termination in the event of the Participant’s
termination of employment or service as set forth in Section 5.

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5.

Termination.

 

 

 

          a.     For Cause. If the Participant’s employment or service is
terminated for Cause any unexercised Option shall terminate effective
immediately.

 

 

 

          b.     On Account of Death. If the Participant’s employment or service
terminates on account of death (or if the Participant dies within ninety (90)
days following termination of employment due to Disability), then any
unexercised Option, to the extent exercisable on the date of death, may be
exercised, in whole or in part, within the first one hundred eighty (180) days
(but only during the Option Term) after the death of the Participant by (A) his
or her personal representative or by the person to whom the Option is
transferred by will or the applicable laws of descent and distribution, or (B)
the Participant’s designated beneficiary and, to the extent that any such Option
was not exercisable on the date of death, it will immediately terminate.

 

 

 

          c.     On Account of Disability. If the Participant’s employment or
service terminates on account of Disability, then any unexercised Option, to the
extent exercisable on the date of such termination of employment or service due
to Disability, may be exercised in whole or in part, within the first ninety
(90) days after such termination of employment or service due to Disability (but
only during the Option Term) by the Participant, or by his or her legal guardian
or representative, and to the extent that any such Option was not exercisable on
the date of such termination of employment due to Disability, it will
immediately terminate.

 

 

 

          d.     Other. If (i) the Participant’s employment is terminated prior
to the end of the term under any employment agreement between the Company and
the Participant other than as a result of the Participant’s death or Disability
and other than for Cause or due to a Change in Control, (ii) the Participant’s
employment is terminated by the Participant other than for Good Reason, (iii)
the Participant’s employment agreement is not renewed by the Participant at the
end of its initial term, or (iv) the Company provides notice to the Participant
that his employment agreement will not be renewed, any portion of the Option
that has not vested shall expire as of the termination date or nonrenewal date,
and any unexercised portion of a vested Option shall remain exercisable for a
period of ninety (90) days after the termination date, the date of nonrenewal or
the expiration of the Option, whichever is earlier.

 

 

6.

Provisions of Plan Control. This Award Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the
amendment provisions thereof, and to such rules, regulations and interpretations
relating to the Plan as may be adopted by the Committee and as may be in effect
from time to time. The Plan is incorporated herein by reference. If and to the
extent that this Award Agreement conflicts or is inconsistent with the terms,
conditions and provisions of the Plan, the Plan shall control, and this Award
Agreement shall be deemed to be modified accordingly, provided that to the
extent the Plan provides the Committee with discretion to determine the terms of
the Option, the exercise of such discretion shall not be considered to be
inconsistent with the terms of the Plan. This Award Agreement contains the
entire understanding of the parties with respect to the subject matter hereof
and supersedes any prior agreements between the Company and the Participant with
respect to the subject matter hereof.

 

 

7.

Notices. All notices or other communications required or permitted to be given
under this Award Agreement to the Company shall be in writing and shall be
deemed to have been duly given if delivered personally or mailed, postage
pre-paid, as follows: (i) if to the Company, at its principal business address
to the attention of the Secretary; and (ii) if to the Participant, at the last
address of the Participant known to the Company at the time the notice or other
communication is sent.

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