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UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549




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Form 10-K/ A

(Amendment No. 1)




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|  |  |                                                                                         
|- |  | ----------------------------------------------------------------------------------------
|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.



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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.



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##### 



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    | 



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|    |                                     
|--- | ------------------------------------
|(1) | Member of the Audit Committee       
|   
|(2) | Member of the Compensation Committee
|   
|(3) | Member of the Strategic Committee   

Albion J. Fitzgeraldco-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. Andersonjoined 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. Labiejoined 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. Forneyhas
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 McWhinneyhas 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.

1



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H. Kent Petzoldhas 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  |  |   |       |      |    

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|                            |                                 |        |      |                     |  |            |         |              |  |              |        |        |  |  |   |         |  |  |       |         |       
|--------------------------- | ------------------------------- | ------ | ---- | ------------------- |  | ---------- | ------- | ------------ |  | ------------ | ------ | ------ |  |  | - | ------- |  |  | ----- | ------- | ------
|                            |                                 |        |      |                     |  |            |         | 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)   



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|    |                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------
|(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 | 



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|    |                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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.

3



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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

4



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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

5



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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 | %

6



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##### 





---



| |   |                       
| | - | ----------------------
| | * | 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

7



---



##### 



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

8



---



##### 



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.

9



---



##### 



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)

10



---



##### 



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

11



---



##### 



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

12