Item 5.02.         Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On January 23, 2019, the Compensation Committee of the Board of Directors, or the Compensation Committee, of VIVUS, Inc., or the Company, met to conduct its annual review of the compensation of the Company’s employees, including its executive officers, or the Annual Compensation Meeting.

Cash Bonus Payments and Stock Option Awards for Executive Officers

At the Annual Compensation Meeting, the Compensation Committee authorized and approved cash bonus payments pursuant to the Company’s employee annual discretionary performance incentive plan for fiscal year 2018 adopted on the same date, or the Annual Bonus Plan, and stock option awards under the Company’s 2018 Equity Incentive Plan to certain of the Company’s employees, including executive officers John Amos, Chief Executive Officer, Kenneth Suh, President, Mark K. Oki, Chief Financial Officer and Chief Accounting Officer, John L. Slebir, Senior Vice President, Business Development and General Counsel and Secretary, M. Scott Oehrlein, Chief Operations Officer, and Santosh T. Varghese, M.D., Chief Medical Officer. The following table sets forth the specific cash bonus payments under the Annual Bonus Plan and stock option awards authorized and approved for each of Messrs. Amos, Suh, Oki, Slebir and Oehrlein and Dr. Varghese:

(1)                 Messrs. Oki and Slebir and Dr. Varghese were listed as named executive officers in the Company’s proxy statement filed with the Securities and Exchange Commission on August 1, 2018. The Board of Directors of the Company appointed Mr. Amos to serve as Chief Executive Officer and Mr. Oehrlein to serve as Chief Operations Officer, effective April 30, 2018. In addition, the Board of Directors of the Company appointed Mr. Suh to serve as President, effective August 3, 2018. As previously disclosed, Mr. Suh previously served as President and Chief Executive Officer of Willow Biopharma Inc., a wholly owned subsidiary of the Company.

(2)                 Amounts for Messrs. Amos, Suh and Oehrlein represent a pro rata portion of their respective bonus under the Annual Bonus Plan based on the time that they each served in their respective positions with the Company in 2018.

(3)                 With the exception of Mr. Suh, the shares of common stock subject to each stock option will vest and become exercisable over four (4) years as follows: one-fourth (1/4th) of the total number of shares subject to the option will vest and become exercisable on the one (1) year anniversary of the date of grant and an additional one forty-eighth (1/48th) of the total number of shares subject to the stock option will vest and become exercisable on the last day of each month thereafter, subject to each such individual continuing to be a Service Provider (as defined in the Company’s 2018 Equity Incentive Plan) on the relevant vesting dates. For Mr. Suh, the shares of common stock subject to the stock option will vest and become exercisable pursuant to the following four (4) year schedule commencing on January 23, 2019, or the Stock Option Vesting Commencement Date: 12,560 of the total number of shares subject to the option will vest and become exercisable one (1) year from the Stock Option Vesting Commencement Date, an additional 1,040 of the total number of shares subject to the option will vest and become exercisable on the last day of each month thereafter for thirty-six months, and 35,000 of the total number of shares subject to the option will vest and become exercisable upon the Company’s acquisition of a new commercial enterprise on or before January 23, 2022, subject to Mr. Suh continuing to be a Service Provider (as defined in the Company’s 2018 Equity Incentive Plan) on the relevant vesting dates. Each stock option has an exercise price equal to the closing price reported by the NASDAQ Global Select Market on the date of grant ($4.05 per share), a 7-year term from the date of grant and an exercise period equal to 12 months from the date each such individual ceases to be a Service Provider.

The Compensation Committee, in its sole discretion, authorized and approved the cash bonuses under the Annual Bonus Plan for each of the executive officers. Bonuses were calculated using a formula that includes: (a) the individual’s base salary, (b) the individual’s target bonus, and (c) such other discretionary factors as the Compensation Committee determined appropriate given the performance of the Company and the individual’s contribution to the Company’s overall performance, including the achievement of various corporate objectives.

Increases to Base Salary Compensation for Executive Officers

At the Annual Compensation Meeting, the Compensation Committee conducted its annual review of the base salaries of the Company’s employees, including its executive officers. The following table sets forth the 2019 base salaries authorized and approved for each of Messrs. Amos, Suh, Oki, Slebir and Oehrlein and Dr. Varghese:

(1)           Messrs. Oki and Slebir and Dr. Varghese were listed as named executive officers in the Company’s proxy statement filed with the Securities and Exchange Commission on August 1, 2018. The Board of Directors of the Company appointed Mr. Amos to serve as Chief Executive Officer and Mr. Oehrlein to serve as Chief Operations Officer, effective April 30, 2018. In addition, the Board of Directors of the Company appointed Mr. Suh to serve as President, effective August 3, 2018. As previously disclosed, Mr. Suh previously served as President and Chief Executive Officer of Willow Biopharma Inc., a wholly owned subsidiary of the Company.

(2)           Messrs. Amos, Suh and Oehrlein received a pro rata portion of their respective base salary for 2018 based on the time that they each served in their respective positions with the Company in 2018.

(3)           The 2019 base salaries are effective retroactively to January 1, 2019.

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