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                                                                  Exhibit 10.26

                              EMPLOYMENT AGREEMENT


         AGREEMENT  (the  "AGREEMENT"),  dated as of  December  3, 2002,  by and
between NOVADEL PHARMA,  INC., a Delaware  corporation with principal  executive
offices at 31 State Highway 12,  Flemington,  New Jersey 08822 (the  "COMPANY"),
and GARY SHANGOLD, residing at 14 Laurel Mountain Way, Califon, New Jersey 07830
(the "EXECUTIVE").

                              W I T N E S S E T H:

         WHEREAS,  the Company  desires to employ the Executive as President and
Chief Executive  Officer of the Company,  and the Executive desires to serve the
Company  in those  capacities,  upon the terms  and  subject  to the  conditions
contained in this Agreement;

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

         1. Employment.

         The Company agrees to employ the Executive, and the Executive agrees to
be employed by the Company, upon the terms and subject to the conditions of this
Agreement.

         2. Term.

         The employment of the Executive by the Company as provided in Section 1
shall be for a period of three (3) years  commencing on the date hereof,  unless
sooner  terminated  in  accordance  with the  provisions of Section 9 below (the
"TERM");  provided,  however, that the Term shall be extended  automatically for
additional  one-year  periods unless one party shall advise the other in writing

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at least 90 days before the  initial  expiration  of the Term or an  anniversary
date thereof that this Agreement shall no longer be so extended.

         3. Duties; Best Efforts; Place of Performance.

         (a) The Executive shall serve as President and Chief Executive  Officer
of the  Company  and shall  perform,  subject to the  direction  of the Board of
Directors  of the  Company,  such  duties as are  customarily  performed  by the
President and Chief Executive Officer.  The Executive shall also have such other
powers  and  duties  as may be from  time to time  prescribed  by the  Board  of
Directors of the Company, provided that the nature of the Executive's powers and
duties so prescribed shall not be inconsistent with the Executive's position and
duties hereunder.

         (b) The Executive shall devote  substantially all of his business time,
attention  and energies to the business and affairs of the Company and shall use
his best  efforts to advance  the best  interests  of the  Company and shall not
during the Term be actively engaged in any other business  activity,  whether or
not such  business  activity  is  pursued  for gain,  profit or other  pecuniary
advantage,  that will  interfere  with the  performance  by the Executive of his
duties hereunder or the Executive's  availability to perform such duties or that
will adversely affect, or negatively reflect upon, the Company.

         (c) The duties to be  performed  by the  Executive  hereunder  shall be
performed  primarily  at the office of the  Company in  Flemington,  New Jersey,
subject to reasonable travel requirements on behalf of the Company.

         4.  Directorship.  The Company  shall use its best efforts to cause the
Executive  to be elected as a member of its Board of  Directors  throughout  the
Term and shall include him in the management slate for election as a director at

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every  stockholders'  meeting  during  the Term at which his term as a  director
would otherwise  expire.  The Executive agrees to accept election,  and to serve
during the Term, as director of the Company,  without any compensation  therefor
other than as specified in this Agreement.

         5.  Compensation.  As  full  compensation  for the  performance  by the
Executive  of his  duties  under  this  Agreement,  the  Company  shall  pay the
Executive as follows:

         (a) Base Salary. The Company shall pay the Executive a base salary (the
"BASE  SALARY") at a rate of $350,000 per annum,  payable in equal  semi-monthly
installments  during  the Term.  The Board of  Directors  of the  Company  shall
annually  review the Base Salary to determine  whether an increase in the amount
thereof is warranted.

         (b) Guaranteed  Bonus. The Company shall pay the Executive a bonus (the
"GUARANTEED BONUS") of $150,000 within 30 days following each anniversary of the
date of this Agreement during the Term,  provided that the Executive is employed
hereunder on such anniversary  date. The Board of Directors of the Company shall
annually  review the  Guaranteed  Bonus to determine  whether an increase in the
amount thereof is warranted.

         (c)  Discretionary  Bonus.  At the  sole  discretion  of the  Board  of
Directors of the Company, the Executive shall receive an additional annual bonus
(the "DISCRETIONARY  BONUS") in an amount equal to up to 75% of his Base Salary,
based upon his  performance  on behalf of the Company during the prior year. The
Discretionary  Bonus  shall  be  payable  either  as a  lump-sum  payment  or in
installments  as determined by the Board of Directors of the Company in its sole
discretion.


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         (d)  Investment  and Fee Bonus.  The Company shall pay the Executive an
additional  bonus (the "INVESTMENT AND FEE BONUS") equal to 5% of all amounts up
to an aggregate of $7,500,000  invested in, or earned by, the Company during the
Term.  Such bonus shall be paid to the  Executive  within 30 days  following the
date such  amounts are invested  in, or actually  received by, the Company.  The
Company  agrees  that it will pay the  Executive  at least  $200,000  under this
Section 5(d) on or before June 30, 2003, whether or not any amounts are invested
in, or received by, the Company  during the Term.  The  Investment and Fee Bonus
shall  be  reduced  by the Net  Proceeds  (as  defined  below)  received  by the
Executive  from (a) the  Johnson  &  Johnson  stock  options  in the name of the
Executive (the  "Options") that are due to vest on or about December 3, 2002 and
(b) the Johnson & Johnson  Certificates of Extra Compensation in the name of the
Executive (the  "Certificates")  that vest on or about  December 15, 2002.  "Net
Proceeds"  shall mean (a) with respect to the  Options,  the last trade price of
the common stock of Johnson & Johnson on the date that the Options are exercised
minus  the  exercise  price  of  such  Option,  and  (b)  with  respect  to  the
Certificates  the net present value of such  Certificates,  as determined by the
relevant  compensation  publication  of Johnson & Johnson.  The Executive  shall
furnish  copies of the Options  and  Certificates.  The  Guaranteed  Bonus,  the
Discretionary  Bonus and the Investment and Fee Bonus are collectively  referred
to in this Agreement as the "BONUS").

         (e)  Withholding.  The Company shall withhold all  applicable  federal,
state and local  taxes and  social  security  and such  other  amounts as may be
required by law from all amounts payable to the Executive under this Section 5.

         (f) Stock Options.  Promptly  after the date hereof,  and as additional
compensation  for the services to be rendered by the Executive  pursuant to this
Agreement, the Company shall grant the Executive stock options ("STOCK OPTIONS")

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to purchase  1,000,000  shares of Common  Stock of the  Company  pursuant to the
Company's  Stock Option Plan (the "STOCK OPTION PLAN").  The Stock Options shall
qualify as incentive  stock options  under  Section 422 of the Internal  Revenue
Code of 1986, as amended,  to the extent  permitted under the Stock Option Plan.
The stock  options  shall vest ratably over a  three-year  period  ending on the
third  anniversary of the date of this Agreement,  so that 333,333 shares of the
Company's  Common  Stock will vest on each of December  3, 2003 and  December 3,
2004, and 333,334 shares of the Company's  Common Stock will vest on December 3,
2005,  subject,  in each  case,  to the  provisions  of  Section  10  below.  In
connection  with such  grant,  the  Executive  shall  enter  into the  Company's
standard stock option  agreement which will  incorporate  the foregoing  vesting
schedule and the Stock Option related provisions  contained in Section 10 below.
The Board of Directors of the Company shall annually  review the number of Stock
Options granted to the Executive to determine  whether an increase in the number
thereof is warranted.

         (g) Expenses. The Company shall reimburse the Executive for all normal,
usual and necessary  expenses  incurred by the Executive in  furtherance  of the
business  and  affairs  of  the  Company,   including   reasonable   travel  and
entertainment,  upon timely  receipt by the Company of  appropriate  vouchers or
other proof of the Executive's expenditures and otherwise in accordance with any
expense reimbursement policy as may from time to time be adopted by the Company.

         (h) Other  Benefits.  The Executive shall be entitled to all rights and
benefits  for  which he shall be  eligible  under  any  benefit  or other  plans
(including,  without  limitation,  dental,  medical,  medical  reimbursement and
hospital plans,  pension plans,  employee stock purchase  plans,  profit sharing

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plans,  bonus plans and other so-called  "fringe" benefits) as the Company shall
make available to its senior executives from time to time.

         (i) Vacation.  The Executive  shall,  during the Term, be entitled to a
vacation of four (4) weeks per annum,  in  addition to holidays  observed by the
Company.  The Executive  shall not be entitled to carry any vacation  forward to
the next year of employment  and shall not receive any  compensation  for unused
vacation days.

         6. Confidential Information and Inventions.

         (a) The Executive recognizes and acknowledges that in the course of his
duties he is likely to receive confidential or proprietary  information owned by
the Company,  its  affiliates or third parties with whom the Company or any such
affiliates has an obligation of confidentiality.  Accordingly,  during and after
the Term,  the Executive  agrees to keep  confidential  and not disclose or make
accessible  to any  other  person  or use for any other  purpose  other  than in
connection  with  the  fulfillment  of his  duties  under  this  Agreement,  any
Confidential  and  Proprietary  Information  (as  defined  below)  owned  by, or
received by or on behalf of, the Company or any of its affiliates. "Confidential
and  Proprietary  Information"  shall  include,  but  shall not be  limited  to,
confidential or proprietary scientific or technical information,  data, formulas
and  related  concepts,  business  plans (both  current and under  development),
client lists,  promotion and marketing  programs,  trade  secrets,  or any other
confidential  or  proprietary   business  information  relating  to  development
programs, costs, revenues, marketing, investments, sales activities, promotions,
credit and financial data, manufacturing processes,  financing methods, plans or
the  business  and affairs of the Company or of any  affiliate  or client of the
Company.  The Executive  expressly  acknowledges  the trade secret status of the
Confidential   and  Proprietary   Information  and  that  the  Confidential  and
Proprietary  Information  constitutes  a  protectable  business  interest of the

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Company.  The  Executive  agrees:  (i)  not to use  any  such  Confidential  and
Proprietary  Information for himself or others; and (ii) not to take any Company
material   or   reproductions   (including   but  not   limited   to   writings,
correspondence,   notes,  drafts,  records,  invoices,  technical  and  business
policies,  computer programs or disks) thereof from the Company's offices at any
time during his  employment by the Company,  except as required in the execution
of the  Executive's  duties  to the  Company.  The  Executive  agrees  to return
immediately all Company material and  reproductions  (including but not limited,
to writings,  correspondence,  notes, drafts, records,  invoices,  technical and
business policies,  computer programs or disks) thereof in his possession to the
Company  upon  request  and  in  any  event   immediately  upon  termination  of
employment.

         (b)  Except  with  prior  written  authorization  by the  Company,  the
Executive  agrees  not to  disclose  or  publish  any of  the  Confidential  and
Proprietary Information, or any confidential,  scientific, technical or business
information of any other party to whom the Company or any of its affiliates owes
an obligation of confidence, at any time during or after his employment with the
Company.

         (c) The Executive agrees that all inventions, discoveries, improvements
and patentable or copyrightable  works  ("INVENTIONS")  initiated,  conceived or
made by him, either alone or in conjunction with others,  during the Term, other
than those Inventions listed on Schedule 6(c) attached hereto, shall be the sole
property of the Company to the maximum  extent  permitted by applicable law and,
to the extent  permitted by law,  shall be "works made for hire" as that term is
defined in the United  States  Copyright Act (17  U.S.C.A.,  Section  101).  The
Company shall be the sole owner of all patents, copyrights, trade secret rights,
and other  intellectual  property or other rights in connection  therewith.  The
Executive  hereby  assigns to the Company all right,  title and  interest he may

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have or acquire in all such  Inventions;  provided,  however,  that the Board of
Directors of the Company may in its sole discretion agree to waive the Company's
rights  pursuant to this Section 6(c) with respect to any Invention  that is not
directly or indirectly related to the Company's business.  The Executive further
agrees to assist the Company in every proper way (but at the Company's  expense)
to obtain and from time to time enforce  patents,  copyrights or other rights on
such  Inventions in any and all  countries,  and to that end the Executive  will
execute all documents  necessary:

                  (i) to apply for,  obtain and vest in the name of the  Company
alone (unless the Company otherwise directs) letters patent, copyrights or other
analogous protection in any country throughout the world and when so obtained or
vested to renew and restore the same; and

                  (ii) to defend any  opposition  proceedings in respect of such
applications  and any opposition  proceedings or petitions or  applications  for
revocation of such letters patent, copyright or other analogous protection.

         (d) The Executive acknowledges that while performing the services under
this Agreement the Executive may locate,  identify and/or  evaluate  patented or
patentable  inventions  having  commercial  potential in the fields of pharmacy,
pharmaceutical, biotechnology, healthcare, technology and other fields which may
be of  potential  interest to the Company or one of its  affiliates  (the "THIRD
PARTY INVENTIONS"). The Executive understands,  acknowledges and agrees that all
rights to, interests in or opportunities  regarding,  all Third-Party Inventions
identified  by the Company,  any of its  affiliates  or either of the  foregoing

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persons' officers,  directors,  employees  (including the Executive),  agents or
consultants  during  the  Employment  Term  shall  be and  remain  the  sole and
exclusive property of the Company or such affiliate and the Executive shall have
no rights  whatsoever  to such  Third-Party  Inventions  and will not pursue for
himself or for others any  transaction  relating to the  Third-Party  Inventions
which is not on behalf of the Company.

         (e) The  provisions of this Section 6 shall survive any  termination of
this Agreement.

         7. Non-Competition, Non-Solicitation and Non-Disparagement.

         (a) The Executive  understands  and recognizes that his services to the
Company  are  special  and  unique  and that in the  course of  performing  such
services the  Executive  will have access to and knowledge of  Confidential  and
Proprietary Information (as defined in Section 6) and the Executive agrees that,
during the Term and for a period of eighteen  (18) months  thereafter,  he shall
not in any manner,  directly or indirectly,  on behalf of himself or any person,
firm,  partnership,   joint  venture,   corporation  or  other  business  entity
("PERSON"),  enter  into or  engage  in any  business  which is  engaged  in any
business [directly]  competitive with the business of the Company,  either as an
individual  for  his  own  account,  or as a  partner,  joint  venturer,  owner,
executive,  employee,  independent  contractor,  principal,  agent,  consultant,
salesperson,  officer,  director  or  shareholder  of a  Person  in  a  business
competitive  with  the  Company  within  the  geographic  area of the  Company's
business,  which is deemed by the parties hereto to be worldwide.  The Executive
acknowledges that, due to the unique nature of the Company's business,  the loss
of any of its clients or business  flow or the improper use of its  Confidential
and  Proprietary  Information  could create  significant  instability  and cause
substantial  damage to the Company and its  affiliates and therefore the Company
has a strong  legitimate  business  interest in protecting the continuity of its
business  interests  and  the  restriction  herein  agreed  to by the  Executive
narrowly and fairly serves such an important and critical  business  interest of
the Company.  For purposes of this Agreement,  the Company shall be deemed to be

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actively engaged on the date hereof in the development of novel application drug
delivery systems for presently marketed prescription and over-the-counter  drugs
and providing consulting services in connection therewith,  and in the future in
any other business in which it actually devotes substantive  resources to study,
develop or pursue.  Notwithstanding  the  foregoing,  nothing  contained in this
Section 7(a) shall be deemed to prohibit  the  Executive  from (i)  acquiring or
holding,  solely for investment,  publicly traded securities of any corporation,
some or all of the activities of which are competitive  with the business of the
Company so long as such  securities do not, in the  aggregate,  constitute  more
than five percent (5%) of any class or series of outstanding  securities of such
corporation.

         (b) During the Term and for 18 months  thereafter,  the Executive shall
not, directly or indirectly, without the prior written consent of the Company:

                  (i)  solicit or induce any  employee  of the Company or any of
its affiliates to leave the employ of the Company or any such affiliate; or hire
for any purpose any employee of the Company or any affiliate or any employee who
has left the  employment of the Company or any affiliate  within one year of the
termination of such employee's employment with the Company or any such affiliate
or at any time in violation of such  employee's  non-competition  agreement with
the Company or any such affiliate; or

                  (ii) solicit or accept employment or be retained by any Person
who,  at any time  during the term of this  Agreement,  was an agent,  client or
customer  of the Company or any of its  affiliates  where his  position  will be
related to the business of the Company or any such  affiliate;  or

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                  (iii)  solicit or accept the business of any agent,  client or
customer  of the  Company or any of its  affiliates  with  respect to  products,
services or investments  similar to those provided or supplied by the Company or
any of its affiliates.

         (c) The  Executive  agrees  that both  during the Term and at all times
thereafter, he shall not directly or indirectly disparage,  whether or not true,
the name or  reputation of the Company or any of its  affiliates,  including but
not limited to, any officer, director, employee or shareholder of the Company or
any of its affiliates.

         (d) In the event that the Executive  breaches any provisions of Section
6 or this Section 7 or there is a threatened  breach,  then,  in addition to any
other  rights  which the Company may have,  the Company  shall (i) be  entitled,
without the posting of a bond or other security, to injunctive relief to enforce
the  restrictions  contained in such Sections and (ii) have the right to require
the  Executive  to account  for and pay over to the  Company  all  compensation,
profits,   monies,   accruals,   increments  and  other  benefits  (collectively
"BENEFITS")  derived or received by the Executive as a result of any transaction
constituting  a  breach  of any of the  provisions  of  Sections  6 or 7 and the
Executive  hereby  agrees  to  account  for and pay over  such  Benefits  to the
Company.

         (e) Each of the rights and remedies enumerated in Section 7(d) shall be
independent  of the  others and shall be in  addition  to and not in lieu of any
other rights and remedies  available to the Company at law or in equity.  If any
of the  covenants  contained in this  Section 7, or any part of any of them,  is
hereafter  construed or  adjudicated  to be invalid or  unenforceable,  the same
shall not  affect  the  remainder  of the  covenant  or  covenants  or rights or
remedies  which  shall  be given  full  effect  without  regard  to the  invalid
portions.  If any of the  covenants  contained  in this  Section 7 is held to be

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invalid or  unenforceable  because of the duration of such provision or the area
covered  thereby,  the parties  agree that the court  making such  determination
shall have the power to reduce the duration and/or area of such provision and in
its reduced form such provision  shall then be  enforceable.  No such holding of
invalidity  or  unenforceability  in one  jurisdiction  shall  bar or in any way
affect the Company's right to the relief provided in this Section 7 or otherwise
in the courts of any other state or jurisdiction  within the geographical  scope
of such  covenants  as to breaches of such  covenants  in such other  respective
states or jurisdictions,  such covenants being, for this purpose, severable into
diverse and independent covenants.

         (f) In the event  that an actual  proceeding  is  brought  in equity to
enforce the  provisions of Section 6 or this Section 7, the Executive  shall not
urge as a defense that there is an adequate  remedy at law nor shall the Company
be  prevented  from  seeking  any other  remedies  which may be  available.  The
Executive  agrees that he shall not raise in any  proceeding  brought to enforce
the  provisions of Section 6 or this Section 7 that the  covenants  contained in
such Sections limit his ability to earn a living.

         (g) The  provisions of this Section 7 shall survive any  termination of
this Agreement.

         8. Representations and Warranties by the Executive.

         The Executive hereby represents and warrants to the Company as follows:

                  (i) Neither the  execution or delivery of this  Agreement  nor
the performance by the Executive of his duties and other  obligations  hereunder
violate or will violate any statute,  law,  determination  or award, or conflict
with or  constitute  a default or breach of any  covenant  or  obligation  under
(whether  immediately,  upon the  giving of notice or lapse of time or both) any

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prior employment agreement, contract, or other instrument to which the Executive
is a party or by which he is bound.

                  (ii)  The  Executive  has the  full  right,  power  and  legal
capacity to enter and deliver this Agreement and to perform his duties and other
obligations  hereunder.  This Agreement constitutes the legal, valid and binding
obligation  of the  Executive  enforceable  against him in  accordance  with its
terms.  No approvals or consents of any persons or entities are required for the
Executive to execute and deliver this  Agreement or perform his duties and other
obligations hereunder.

         9.  Termination.   The  Executive's   employment   hereunder  shall  be
terminated upon the Executive's death and may be terminated as follows:

         (a) The Executive's employment hereunder may be terminated by the Board
of  Directors  of the Company  for Cause.  Any of the  following  actions by the
Executive shall constitute "CAUSE":

                  (i) The willful failure, disregard or refusal by the Executive
to perform his duties hereunder;

                  (ii) Any willful,  intentional or grossly negligent act by the
Executive having the effect of injuring, in a material way (whether financial or
otherwise  and as  determined  in  good-faith  by a  majority  of the  Board  of
Directors of the  Company),  the business or reputation of the Company or any of
its affiliates,  including but not limited to, any officer, director,  executive
or shareholder of the Company or any of its affiliates;

                  (iii)  Willful  misconduct  by the Executive in respect of the
duties or obligations of the Executive under this Agreement,  including, without
limitation,  insubordination  with respect to  reasonable  and legal  directions

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received by the Executive from the Board of Directors of the Company;

                  (iv) The Executive's indictment of any felony or a misdemeanor
involving moral turpitude (including entry of a nolo contendere plea);

                  (v) The  determination by the Company,  after a reasonable and
good-faith  investigation  by the  Company  following  a written  allegation  by
another  employee of the  Company,  that the  Executive  engaged in some form of
harassment  prohibited by law (including,  without limitation,  age, sex or race
discrimination),  unless the Executive's  actions were specifically  directed by
the Board of Directors of the Company;

                  (vi) Any  misappropriation  or embezzlement of the property of
the Company or its affiliates (whether or not a misdemeanor or felony);

                  (vii)  Breach by the  Executive  of any of the  provisions  of
Sections 6, 7 or 8 of this Agreement; and

                  (viii)  Breach  by the  Executive  of any  provision  of  this
Agreement other than those contained in Sections 6, 7 or 8 which is not cured by
the  Executive  within  thirty  (30) days after  notice  thereof is given to the
Executive by the Company.

         (b) The Executive's employment hereunder may be terminated by the Board
of Directors of the Company due to the Executive's  Disability.  For purposes of
this Agreement, a termination for "DISABILITY" shall occur (i) when the Board of
Directors  of the  Company  has  provided  a written  termination  notice to the
Executive  supported  by  a  written  statement  from  a  reputable  independent
physician to the effect that the  Executive  shall have become so  physically or
mentally incapacitated as to be unable to resume, within the ensuing twelve (12)

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months,  his  employment  hereunder  by reason of physical or mental  illness or
injury, or (ii) upon rendering of a written  termination  notice by the Board of
Directors of the Company after the  Executive  has been unable to  substantially
perform his duties hereunder for 90 or more  consecutive  days, or more than 120
days in any consecutive twelve month period, by reason of any physical or mental
illness or injury.  For purposes of this Section 9(b),  the Executive  agrees to
make  himself  available  and to cooperate in any  reasonable  examination  by a
reputable independent physician retained by the Company.

         (c) The  Executive's  employment  hereunder  may be  terminated  by the
Executive for Good Reason.  For purposes of this Agreement,  "GOOD REASON" means
(i) a breach by the Company of its material  obligations under Section 5 of this
Agreement  (a  "MATERIAL  BREACH"),  (ii) a material  reduction  by the Board of
Directors of the Company of the Executive's  duties or authority provided for in
this Agreement (a "MATERIAL  CHANGE"),  or (iii) the relocation of the principal
executive  office of the  Company in excess of fifty (50) miles from its present
location not consented to by the Executive;  provided,  however, that a Material
Breach or a Material  Change shall  constitute Good Reason only if the Executive
has notified  the Board of Directors of the Company in writing of the  existence
and  particulars  of such  Material  Breach or Material  Change and the Board of
Directors  has failed to remedy such Material  Change or Material  Breach within
thirty (30) days of such notice.

         (d) The Executive's employment hereunder may be terminated by the Board
of Directors of the Company (or its  successor)  upon the occurrence of a Change
of Control.  For purposes of this  Agreement,  "CHANGE OF CONTROL" means (i) the
acquisition, directly or indirectly, following the date hereof by any person (as
such term is defined in Section  13(d) and 14(d)(2) of the  Securities  Exchange
Act  of  1934,  as  amended),   in  one  transaction  or  a  series  of  related
transactions,  of  securities  of the  Company  representing  in excess of fifty

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percent  (50%)  or more of the  combined  voting  power  of the  Company's  then
outstanding  securities if such person or his or its  affiliate(s) do not own in
excess of 50% of such voting  power on the date of this  Agreement,  or (ii) the
future disposition by the Company (whether direct or indirect, by sale of assets
or stock, merger, consolidation or otherwise) of all or substantially all of its
business  and/or  assets in one  transaction  or series of related  transactions
(other  than a merger  effected  exclusively  for the  purpose of  changing  the
domicile of the Company).

         10. Compensation upon Termination.

         (a) If the  Executive's  employment  is  terminated  as a result of his
death or  Disability,  the  Company  shall  (i) pay to the  Executive  or to the
Executive's  estate,  as  applicable,  (x) his Base  Salary and any  accrued and
unpaid Bonus and expense  reimbursement amounts through the date of his death or
Disability  and (y) the pro rata  portion  of the  Guaranteed  Bonus  and  Stock
Options  earned by the  Executive  during  the year of his  death or  Disability
(which,  for this purpose,  shall be prorated in  accordance  with the number of
full months in such year during which the Executive was employed hereunder), and
(ii) for the shorter of twelve (12) months  following his death or Disability or
the  balance  of the  Term (as if such  termination  had not  occurred)  provide
continuation  coverage to the members of the Executive's family and, in the case
of termination for  Disability,  the Executive under all major medical and other
health,  accident,  life or other  disability  plans and  programs in which such
family members and, in the case of  termination  for  Disability,  the Executive
participated  immediately  prior to his death or  Disability.  All Stock Options
that  are  scheduled  to vest  by the end of the  calendar  year in  which  such
termination  occurs  shall be  accelerated  and deemed to have  vested as of the
termination  date.  All Stock  Options  that  have not  vested  (or been  deemed
pursuant to the immediately preceding sentence to have vested) as of the date of
termination  shall be deemed to have expired as of such date.  Any Stock Options
that  have  vested  as of  the  date  of the  Executive's  death  or  Disability
(including the Options  described in the immediately  preceding  sentence) shall

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remain  exercisable  for a period  of 90 days  after  the  date of his  death or
Disability.

         (b) If the  Executive's  employment  is  terminated  by  the  Board  of
Directors  of the  Company  for Cause or by the  Executive  other  than for Good
Reason,  the Company shall pay to the Executive his Base Salary through the date
of his termination  and the Executive  shall have no further  entitlement to any
other compensation or benefits from the Company. All Stock Options that have not
vested as of the date of any such termination shall be deemed to have expired as
of such date and, in  addition,  the  Executive's  right to exercise  any vested
Stock Options shall terminate as of such date.

         (c) If the Executive's  employment is terminated by the Company (or its
successor)  upon the  occurrence  of a Change of  Control,  the  Company (or its
successor,  as  applicable)  shall (i) continue to pay to the Executive his Base
Salary for a period of one year  following  such  termination,  and (ii) pay the
Executive any Bonus that would have  otherwise  been due to the Executive by the
end of the calendar end of the year in which such termination  occurs as well as
any expense  reimbursement  amounts  owed through the date of  termination.  The
Company's  obligation  under  clause  (i) in the  preceding  sentence  shall  be
reduced,  however,  by any amounts  otherwise  actually  earned by the Executive
during the one year period  following the  termination  of his  employment.  All
Stock Options that have not vested as of the date of such  termination  shall be
accelerated and deemed to have vested as of such date.

         (d) If (i) the  Executive's  employment  is  terminated  by the Company
other than as a result of the Executive's death or Disability and other than for

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reasons  specified in Sections 10(b) or (c), or (ii) the Executive's  employment
is terminated  by the Executive for Good Reason,  the Company shall (i) continue
to pay to the Executive his Base Salary for a period of one year  following such
termination, (ii) pay the Executive the Bonus that would have otherwise been due
to the Executive in the calendar year in which such termination occurs and (iii)
pay the  Executive  any expense  reimbursement  amounts owed through the date of
termination.  The  Company's  obligation  under  clauses  (i)  and  (ii)  in the
preceding sentence shall be reduced,  however, by any amounts otherwise actually
earned by the Executive  during the one year period following the termination of
his  employment.  All Stock Options that are scheduled to vest by the end of the
calendar year in which such  termination  occurs shall be accelerated and deemed
to have  vested as of the  termination  date.  All Stock  Options  that have not
vested (or been deemed  pursuant to the immediately  preceding  sentence to have
vested) as of the date of termination shall be deemed to have expired as of such
date.

         (e) The continuation coverage under any major medical and other health,
accident,  life or other  disability plans and programs for the periods provided
in Section 10(a) shall be provided (i) at the expense of the Company and (ii) in
satisfaction  of the  Company's  obligation  under Section 4980B of the Internal
Revenue  Code of 1986 (and any similar  state law) with respect to the period of
time such  benefits are  continued  hereunder.  Notwithstanding  anything to the
contrary contained herein, the Company's obligation to provide such continuation
coverage under such Sections shall cease  immediately  upon the date any covered
individual  becomes eligible for similar benefits under the plans or policies of
another employer.

         (f) This Section 10 sets forth the only obligations of the Company with
respect to the termination of the Executive's  employment with the Company,  and
the Executive  acknowledges  that, upon the  termination of his  employment,  he

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shall not be entitled  to any  payments  or  benefits  which are not  explicitly
provided in Section 10.

         (g) Upon  termination of the Executive's  employment  hereunder for any
reason,  the  Executive  shall be deemed to have  resigned  as  director  of the
Company, effective as of the date of such termination.

         (h) The provisions of this Section 10 shall survive any  termination of
this Agreement.

         11. Miscellaneous.

         (a) This Agreement  shall be governed by, and construed and interpreted
in accordance with, the laws of the State of New York,  without giving effect to
its principles of conflicts of laws.

         (b) Any dispute  arising out of, or relating to, this  Agreement or the
breach  thereof  (other  than  Sections  6  or  7  hereof),   or  regarding  the
interpretation thereof, shall be finally settled by arbitration conducted in New
York City in accordance with the rules of the American  Arbitration  Association
then in effect  before a single  arbitrator  appointed in  accordance  with such
rules.  Judgment upon any award rendered  therein may be entered and enforcement
obtained  thereon in any court having  jurisdiction.  The arbitrator  shall have
authority to grant any form of appropriate relief, whether legal or equitable in
nature,  including  specific  performance.  For  the  purpose  of  any  judicial
proceeding to enforce such award or incidental to such  arbitration or to compel
arbitration  and for  purposes  of Sections 6 and 7 hereof,  the parties  hereby
submit to the  non-exclusive  jurisdiction  of the Supreme Court of the State of
New York, New York County,  or the United States District Court for the Southern
District of New York,  and agree that service of process in such  arbitration or

                                       19
<PAGE>

court  proceedings  shall be  satisfactorily  made upon it if sent by registered
mail  addressed  to it at the address  referred to in paragraph  (g) below.  The
costs of such arbitration  shall be borne  proportionate to the finding of fault
as  determined  by the  arbitrator.  Judgment  on the  arbitration  award may be
entered by any court of competent jurisdiction.

         (c) This  Agreement  shall be binding  upon and inure to the benefit of
the  parties  hereto,  and  their  respective  heirs,   legal   representatives,
successors and assigns.

         (d)  This  Agreement,   and  the  Executive's  rights  and  obligations
hereunder,  may not be  assigned  by the  Executive.  The Company may assign its
rights,  together with its  obligations,  hereunder in connection with any sale,
transfer or other  disposition  of all or  substantially  all of its business or
assets.

         (e) This  Agreement  cannot  be  amended  orally,  or by any  course of
conduct  or  dealing,  but only by a written  agreement  signed  by the  parties
hereto.

         (f) The failure of either  party to insist upon the strict  performance
of any of the terms,  conditions and  provisions of this Agreement  shall not be
construed as a waiver or relinquishment of future compliance therewith, and such
terms,  conditions  and  provisions  shall  remain in full force and effect.  No
waiver of any term or  condition  of this  Agreement on the part of either party
shall be effective for any purpose  whatsoever  unless such waiver is in writing
and signed by such party.

         (g) All notices, requests, consents and other communications,  required
or permitted to be given  hereunder,  shall be in writing and shall be delivered
personally or by an overnight courier service or sent by registered or certified
mail, postage prepaid, return receipt requested, to the parties at the addresses

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<PAGE>

set forth on the first page of this Agreement, and shall be deemed given when so
delivered personally or by overnight courier, or, if mailed, five days after the
date of deposit in the United States mails.  Either party may designate  another
address, for receipt of notices hereunder by giving notice to the other party in
accordance with this paragraph (g).

         (h) This Agreement sets forth the entire agreement and understanding of
the parties  relating to the subject  matter  hereof,  and  supersedes all prior
agreements,  arrangements and  understandings,  written or oral, relating to the
subject matter hereof. No representation, promise or inducement has been made by
either party that is not embodied in this Agreement,  and neither party shall be
bound by or liable for any alleged representation,  promise or inducement not so
set forth.

         (i) As used in this Agreement,  "affiliate" of a specified Person shall
mean and include any Person  controlling,  controlled by or under common control
with the specified Person.

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

         (k) This Agreement may be executed in any number of counterparts,  each
of  which  shall  constitute  an  original,  but  all of  which  together  shall
constitute one and the same instrument.

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<PAGE>

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

                                                 NOVADEL PHARMA, INC.



                                                 By:  /s/ John H. Klein
                                                    --------------------------
                                                 Name: John H. Klein
                                                 Title:    Chairman


                                                  EXECUTIVE



                                                 By: /s/ Gary A. Shangold, M.D.
                                                   ----------------------------
                                                 Name: Gary Shangold



                                       22
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                                  SCHEDULE 6(C)


Future revenues which may be earned from distribution, or assignment (licensure)
of  rights,   of  currently   patented   `device  for  housing  and   dispensing
pre-moistened bathroom tissues', or from any improvements made thereto.

















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