Exhibit 10.4

VIVUS, INC.

2018 INDUCEMENT EQUITY INCENTIVE PLAN

NOTICE OF GRANT OF STOCK OPTION

Unless otherwise defined herein, the terms defined in the VIVUS, Inc. 2018
Inducement Equity Incentive Plan (the “Plan”) will have the same defined
meanings in this Notice of Grant of Stock Option (the “Notice of Grant”) and
Terms and Conditions of Stock Option Grant, attached hereto as Exhibit A
(together, the “Agreement”).

Participant:

Address:

Participant has been granted an Option to purchase Shares of Common Stock,
subject to the following terms and conditions of the Plan and this Agreement.  

 

Grant Number

Date of Grant

Vesting Commencement Date

Number of Shares Granted

Exercise Price per Share$

Total Exercise Price$

Type of OptionNonstatutory Stock Option

Term/Expiration Date

Vesting Schedule:

Subject to accelerated vesting as set forth below or in the Plan, this Option
will be exercisable, in whole or in part, in accordance with the following
schedule:

Twenty-five percent (25%) of the Shares subject to the Option shall vest on the
one (1) year anniversary of the Vesting Commencement Date, and one forty-eighth
(1/48th) of the Shares subject to the Option shall vest each month thereafter on
the same day of the month as the Vesting Commencement Date (and if there is no
corresponding day, on the last day of the month), subject to Participant
continuing to be a Service Provider through each such date.

vvus_EX 10-4

 

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Termination Period:

This Option will be exercisable for twelve (12) months after Participant ceases
to be a Service Provider.  If Participant ceases to be a Service Provider due to
his or her Disability or if Participant dies while holding this Option, this
Option will be exercisable for twelve (12) months after Participant ceases to be
a Service Provider.  Notwithstanding the foregoing, in no event may this Option
be exercised after the Term/Expiration Date as provided above and may be subject
to earlier termination as provided in Section 15(c) of the Plan. 

Participant and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Agreement.  Participant has
reviewed the Plan and this Agreement in their entirety, has had an opportunity
to obtain the advice of counsel prior to executing this Agreement and fully
understands all provisions of the Plan and Agreement.  Participant hereby agrees
to accept as binding, conclusive and final all decisions or interpretations of
the Administrator upon any questions relating to the Plan and
Agreement.  Participant further agrees to notify the Company upon any change in
the residence address indicated above.

Participant acknowledges and agrees that by clicking the “ACCEPT” button on the
E*TRADE on-line grant agreement response page, it will act as Participant’s
electronic signature to this Agreement and will constitute Participant’s
acceptance of and agreement with all of the terms and conditions of the Option,
as set forth in the Agreement and the Plan.

 

VIVUS, INC.

 

/s/ Mark K. Oki

 

Mark K. Oki

Chief Financial Officer

 

 

 

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EXHIBIT A

TERMS AND CONDITIONS OF STOCK OPTION GRANT

1. Grant.  The Company hereby grants to the Participant named in the Notice of
Grant (“Participant”) an option (the “Option”) to purchase the number of Shares,
as set forth in the Notice of Grant, at the exercise price per Share set forth
in the Notice of Grant (the “Exercise Price”), subject to the terms and
conditions in this Agreement and the Plan, which is incorporated herein by
reference.  Subject to Section 20(c) of the Plan, in the event of a conflict
between the terms and conditions of the Plan and the terms and conditions of
this Agreement, the terms and conditions of the Plan will prevail.

2. Vesting Schedule.  Except as provided in Section ‎3, the Option awarded by
this Agreement will vest in accordance with the vesting provisions set forth in
the Notice of Grant.  Shares scheduled to vest on a certain date or upon the
occurrence of a certain condition will not vest in Participant in accordance
with any of the provisions of this Agreement, unless Participant will have been
continuously a Service Provider from the Date of Grant until the date such
vesting occurs.

3. Administrator Discretion.  The Administrator, in its discretion, may
accelerate the vesting of the balance, or some lesser portion of the balance, of
the unvested Option at any time, subject to the terms of the Plan.  If so
accelerated, such Option will be considered as having vested as of the date
specified by the Administrator.

4. Exercise of Option.  This Option may be exercised only within the term set
out in the Notice of Grant in accordance with the Plan and the terms of this
Agreement.  This Option will be exercisable in a manner and pursuant to such
procedures as the Administrator may determine, which procedure will require
Participant to state that he/she is electing to exercise the Option, the number
of Shares in respect of which the Option is being exercised (the “Exercised
Shares”), and will require Participant to make such other representations and
agreements as may be required by the Company pursuant to the provisions of the
Plan.  This Option will be deemed to be exercised upon completion of the
exercise procedure to the Company’s satisfaction.

5. Method of Payment.  Payment of the aggregate Exercise Price will be by any of
the following, or a combination thereof, at the election of Participant:

(a) cash;

(b) check;

(c) consideration received by the Company under a formal cashless exercise
program adopted by the Company in connection with the Plan (including by way of
a net exercise); or

(d) surrender of other Shares which have a Fair Market Value on the date of
surrender equal to the aggregate Exercise Price of the Exercised Shares.

 

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6. Tax Obligations. 

(a) General.  Participant acknowledges that, regardless of any action taken by
the Company or, if different, Participant’s employer (the “Employer”) or Parent,
Subsidiary or Affiliate of the Company to which Participant is providing
services (together, the Company, Employer, Parent, Subsidiary, or Affiliate to
which the Participant is providing services, the “Company Group”), the ultimate
liability for any tax and/or social insurance liability obligations and
requirements in connection with the Option, including, without limitation, (i)
all federal, state, and local taxes (including the Participant’s Federal
Insurance Contributions Act (FICA) obligation) that are required to be withheld
by the Company Group or other payment of tax-related items related to
Participant’s participation in the Plan and legally applicable to Participant,
(ii) the Participant’s and, to the extent required by the Company Group, the
Company Group’s fringe benefit tax liability, if any, associated with the grant,
vesting, or exercise of the Option or sale of Shares, and (iii) any other
Company Group taxes the responsibility for which the Participant has, or has
agreed to bear, with respect to the Option (or exercise thereof or issuance of
Shares thereunder) (collectively, the “Tax Obligations”), is and remains
Participant’s responsibility and may exceed the amount actually withheld by the
Company Group.  Participant further acknowledges that the Company Group (A) make
no representations or undertakings regarding the treatment of any Tax
Obligations in connection with any aspect of the Option, including, but not
limited to, the grant, vesting or exercise of the Option, the subsequent sale of
Shares acquired pursuant to such exercise and the receipt of any dividends or
other distributions, and (B) do not commit to and are under no obligation to
structure the terms of the grant or any aspect of the Option to reduce or
eliminate Participant’s liability for Tax Obligations or achieve any particular
tax result.  Further, if Participant is subject to Tax Obligations in more than
one jurisdiction between the Date of Grant and the date of any relevant taxable
or tax withholding event, as applicable, Participant acknowledges that the
Company Group (or former employer, as applicable) may be required to withhold or
account for Tax Obligations in more than one jurisdiction.  If Participant fails
to make satisfactory arrangements for the payment of any required Tax
Obligations hereunder at the time of the applicable taxable event, Participant
acknowledges and agrees that the Company may refuse to issue or deliver the
Shares.

(b) Tax Withholding.  When the Option is exercised, Participant generally will
recognize immediate U.S. taxable income if Participant is a U.S.
taxpayer.  Pursuant to such procedures as the Administrator may specify from
time to time, the Company Group will withhold the amount required to be withheld
for the payment of Tax Obligations.  The Administrator, in its sole discretion
and pursuant to such procedures as it may specify from time to time, may permit
Participant to satisfy such Tax Obligations, in whole or in part (without
limitation), by (i) paying cash, (ii) electing to have the Company withhold
otherwise deliverable Shares having a fair market value equal to the minimum
amount that is necessary to meet the withholding requirement for such Tax
Obligations (or such greater amount as Participant may elect if permitted by the
Administrator, if such greater amount would not result in adverse financial
accounting consequences for the Company Group), (iii) withholding the amount of
such Tax Obligations from Participant’s wages or other cash compensation paid to
Participant by the Company Group, (iv) delivering to the Company already vested
and owned Shares having a fair market value equal to such Tax Obligations, or
(v) selling a sufficient number of such Shares otherwise deliverable to
Participant through such means as the Company may determine in its sole
discretion (whether through a broker or otherwise) equal to the minimum amount
that is necessary to meet the withholding requirement for such Tax Obligations
(or such greater amount as

 

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Participant may elect if permitted by the Administrator, if such greater amount
would not result in adverse financial accounting consequences for the Company
Group).  To the extent determined appropriate by the Company in its discretion,
it will have the right (but not the obligation) to satisfy any Tax Obligations
by reducing the number of Shares otherwise deliverable to Participant.  Further,
if Participant is subject to tax in more than one jurisdiction between the Date
of Grant and a date of any relevant taxable or tax withholding event, as
applicable, Participant acknowledges and agrees that the Company Group (and/or
former employer, as applicable) may be required to withhold or account for tax
in more than one jurisdiction.  If Participant fails to make satisfactory
arrangements for the payment of any required Tax Obligations hereunder at the
time of the Option exercise, Participant acknowledges and agrees that the
Company may refuse to honor the exercise and refuse to deliver the Shares if
such amounts are not delivered at the time of exercise.

(c) Code Section 409A.  Under Code Section 409A, an option that vests after
December 31, 2004 (or that vested on or prior to such date but which was
materially modified after October 3, 2004), that was granted with a per share
exercise price that is determined by the Internal Revenue Service (the “IRS”) to
be less than the fair market value of a share on the date of grant (a “Discount
Option”) may be considered “deferred compensation.”  A Discount Option may
result in (i) income recognition by the recipient of the option prior to the
exercise of the option, (ii) an additional twenty percent (20%) federal income
tax, and (iii) potential penalty and interest charges.  The Discount Option also
may result in additional state income, penalty and interest tax to the recipient
of the option.  Participant acknowledges that the Company cannot and has not
guaranteed that the IRS will agree that the per Share exercise price of this
Option equals or exceeds the fair market value of a Share on its date of grant
in a later examination.  Participant agrees that if the IRS determines that the
Option was granted with a per Share exercise price that was less than the fair
market value of a Share on the Option’s date of grant, Participant will be
solely responsible for Participant’s costs related to such a determination.

7. Rights as Stockholder.  Neither Participant nor any person claiming under or
through Participant will have any of the rights or privileges of a stockholder
of the Company in respect of any Shares deliverable hereunder unless and until
certificates representing such Shares (which may be in book entry form) will
have been issued, recorded on the records of the Company or its transfer agents
or registrars, and delivered to Participant (including through electronic
delivery to a brokerage account).  After such issuance, recordation and
delivery, Participant will have all the rights of a stockholder of the Company
with respect to voting such Shares and receipt of dividends and distributions on
such Shares.

8. No Guarantee of Continued Service.  PARTICIPANT ACKNOWLEDGES AND AGREES THAT
THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY
CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (OR THE PARENT,
SUBSIDIARY OR AFFILIATE OF THE COMPANY EMPLOYING OR RETAINING PARTICIPANT) AND
NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING
SHARES HEREUNDER.  PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS
AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET
FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR

 

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ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S
RIGHT OR THE RIGHT OF THE COMPANY (OR THE PARENT, SUBSIDIARY OR AFFILIATE OF THE
COMPANY EMPLOYING OR RETAINING PARTICIPANT) TO TERMINATE PARTICIPANT’S
RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

9. Address for Notices.  Any notice to be given to the Company under the terms
of this Agreement will be addressed to the Company at VIVUS, Inc., 900 E.
Hamilton Avenue, Suite 550,  Campbell, California 95008, or at such other
address as the Company may hereafter designate in writing or electronically.

10. Grant is Not Transferable.  This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution and may be
exercised during the lifetime of Participant only by Participant.

11. Successors and Assigns.  The Company may assign any of its rights under this
Agreement to single or multiple assignees, and this Agreement will be binding
upon and inure to the benefit of the successors and assigns of the
Company.  Subject to the restrictions on transfer herein set forth, this
Agreement will be binding upon Participant and his or her heirs, executors,
administrators, legatees, legal representatives, successors and assigns.  The
rights and obligations of Participant under this Agreement may be assigned only
with the written consent of the Company.

12. Additional Conditions to Issuance of Stock.  If at any time the Company will
determine, in its discretion, that the listing, registration, qualification or
rule compliance of the Shares upon any securities exchange or under any state,
federal or non‑U.S. law, the tax code and related regulations or under the
rulings or regulations of the United States Securities and Exchange Commission
or any other governmental regulatory body or the clearance, consent or approval
of the United States Securities and Exchange Commission or any other
governmental regulatory authority is necessary or desirable as a condition to
the purchase by, or issuance, of Shares to Participant (or his or her estate)
hereunder, such purchase or issuance will not occur unless and until such
listing, registration, qualification, rule compliance, clearance, consent or
approval will have been completed, effected or obtained free of any conditions
not acceptable to the Company.  Subject to the terms of the Agreement and the
Plan, the Company will not be required to issue any certificate or certificates
for Shares hereunder prior to the lapse of such reasonable period of time
following the date of exercise of the Option the Administrator may establish
from time to time for reasons of administrative convenience.  Where the Company
determines that the delivery of the payment of any Shares will violate federal
securities laws or other applicable laws, the Company will defer delivery until
the earliest date at which the Company reasonably anticipates that the delivery
of Shares will no longer cause such violation.  The Company will make all
reasonable efforts to meet the requirements of any such state or federal law or
securities exchange and to obtain any such consent, clearance or approval of any
such governmental authority.  Assuming such compliance, for income tax purposes
the Exercised Shares will be considered transferred to Participant on the date
the Option is exercised with respect to such Exercised Shares.

13. Plan Governs.  This Agreement is subject to all terms and provisions of the
Plan.  In the event of a conflict between one or more provisions of this
Agreement and one or more provisions

 

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of the Plan, the provisions of the Plan will govern.  Capitalized terms used and
not defined in this Agreement will have the meaning set forth in the Plan.

14. Administrator Authority.  The Administrator will have the power to interpret
the Plan and this Agreement and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent therewith and to
interpret or revoke any such rules (including, but not limited to, the
determination of whether or not any Shares subject to the Option have
vested).  All actions taken and all interpretations and determinations made by
the Administrator in good faith will be final and binding upon Participant, the
Company and all other interested persons.  No member of the Administrator will
be personally liable for any action, determination or interpretation made in
good faith with respect to the Plan or this Agreement.

15. Electronic Delivery and Acceptance.  The Company may, in its sole
discretion, decide to deliver any documents related to Options awarded under the
Plan by electronic means or request Participant’s consent to participate in the
Plan by electronic means.  Participant hereby consents to receive such documents
by electronic delivery and agrees to participate in the Plan through any on-line
or electronic system established and maintained by the Company or another third
party designated by the Company.

16. Captions.  Captions provided herein are for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.

17. Agreement Severable.  In the event that any provision in this Agreement will
be held invalid or unenforceable, such provision will be severable from, and
such invalidity or unenforceability will not be construed to have any effect on,
the remaining provisions of this Agreement.

18. Modifications to the Agreement.  This Agreement, together with the Plan,
constitutes the entire understanding of the parties on the subjects
covered.  Participant expressly warrants that he or she is not accepting this
Agreement in reliance on any promises, representations, or inducements other
than those contained herein.  Modifications to this Agreement can be made only
in an express written contract executed by a duly authorized officer of the
Company.  Notwithstanding anything to the contrary in the Plan or this
Agreement, the Company reserves the right to revise this Agreement as it deems
necessary or advisable, in its sole discretion and without the consent of
Participant, to comply with Code Section 409A or to otherwise avoid imposition
of any additional tax or income recognition under Code Section 409A in
connection to this Option.    

19. Amendment, Suspension or Termination of the Plan.  By accepting this Award,
Participant expressly warrants that he or she has received an Option under the
Plan, and has received, read and understood a description of the
Plan.  Participant understands that the Plan is discretionary in nature and may
be amended, suspended or terminated by the Company at any time.

20. Governing Law.  This Agreement will be governed by the laws of the State of
California, without giving effect to the conflict of law principles
thereof.  For purposes of litigating any dispute that arises under this Option
or this Agreement, the parties hereby submit to and consent to the jurisdiction
of the State of California, and agree that such litigation will be conducted in
the

 

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courts of Santa Clara County, California, or the federal courts for the United
States for the Northern District of California, and no other courts, where this
Option is made and/or to be performed.

21. No Waiver.  Either party’s failure to enforce any provision or provisions of
this Agreement shall not in any way be construed as a waiver of any such
provision or provisions, nor prevent that party from thereafter enforcing each
and every other provision of this Agreement.  The rights granted both parties
herein are cumulative and shall not constitute a waiver of either party’s right
to assert all other legal remedies available to it under the circumstances.

22. Tax Consequences.  Participant has reviewed with its own tax advisers the
U.S. federal, state, local and non-U.S. tax consequences of this investment and
the transactions contemplated by this Agreement.  With respect to such matters,
Participant relies solely on such advisers and not on any statements or
representations of the Company or any of its agents, written or
oral.  Participant understands that Participant (and not the Company Group)
shall be responsible for Participant’s own tax liability that may arise as a
result of this investment or the transactions contemplated by this Agreement.  

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