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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



FORM 10-K/A

(Amendment No. 1)



ý

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2013ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)For the transition period
from                to


Commission File Number 001-33389

VIVUS, INC.(Exact name of Registrant as specified in its charter)

Delaware(State or other jurisdiction of
incorporation or organization)

94-3136179(IRS employer
identification number)351 East Evelyn Avenue
Mountain View, California(Address of principal executive office)

94041(Zip Code)


Registrant's
telephone number, including area code:(650) 934-5200

Securities
registered pursuant to Section 12(b) of the Act:

Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $.001 Par Value
(Title of class)

The NASDAQ Global Select MarketPreferred Share Purchase Rights
(Title of class)


Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes ý    No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes o    No ý

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. Yes ý    No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes ý    No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) 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. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ý

Accelerated filer o

Non-accelerated filer o (Do not check if a smaller reporting company)

Smaller reporting company o


Indicate
by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the
Act). Yes o    No ý

The aggregate market value of the common equity held by non-affiliates of the Registrant as of June 30, 2013, totaled approximately $1,262,994,990 based on
the closing stock price as reported by the NASDAQ Global Market.

As
of April 21, 2014, there were 103,314,461 shares of the Registrant's common stock, $0.001 par value per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Document Description

10-K partNone.






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VIVUS, INC.        FISCAL 2013 FORM 10-K        EXPLANATORY NOTE

This Amendment No. 1. to Form 10-K, or the Amendment, amends the Annual Report on Form 10-K for the fiscal year
ended December 31, 2013 originally filed on February 28, 2014, or the Original Filing, by VIVUS, Inc., a Delaware corporation. We are filing this Amendment to present the
information required by Part III of Form 10-K as we will not file our definitive proxy statement within 120 days of the end of our fiscal year ended December 31, 2013.

Except
as described above, no other changes have been made to the Original Filing. The Original Filing continues to speak as of the date of the Original Filing, and we have not updated
the disclosures contained therein to reflect any events that occurred at a date subsequent to the filing of the Original Filing.

When
we refer to "we," "our," "us," the "Company" or "VIVUS" in this document, we mean the current Delaware corporation, or VIVUS, Inc., and its California predecessor, as well as
all of our consolidated subsidiaries.

INDEX





PART IIIItem 10:

Directors, Executive Officers and Corporate Governance


3Item 11:

Executive Compensation


10Item 12:

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters


45Item 13:

Certain Relationships and Related Transactions, and Director Independence


49Item 14:

Principal Accountant Fees and Services


50PART IVItem 15:

Exhibits and Financial Statement Schedules


52SignaturesIndex to ExhibitsCertification of Chief Executive OfficerCertification of Chief Financial Officer


In
VIVUS's filings with the Securities and Exchange Commission, or the SEC, information is sometimes "incorporated by reference." This means that we refer you to information previously
filed with the SEC that should be considered as part of the particular filing. As provided under SEC regulations, the "Compensation Committee Report" contained in this Amendment specifically is not
incorporated by reference into any other filings with the SEC and shall not be deemed to be "filed" with the SEC. In addition, this Amendment includes a website address. This website address is
intended to provide inactive, textual references only. The information on this website is not part of this Amendment.

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PART III

Item 10.Directors, Executive Officers and Corporate Governance

Our Executive Officers

The following table and the biographical information that follows it set forth information as of April 30, 2014 regarding our
executive officers:

Name

Age

PositionSeth H. Z. Fischer


58

Chief Executive Officer and DirectorSvai S. Sanford


44

Interim Chief Financial Officer and Chief Accounting OfficerJohn L. Slebir


49

Senior Vice President, Business Development and General Counsel and SecretaryWesley W. Day, Ph.D.


50

Vice President, Clinical DevelopmentGuy P. Marsh


60

Vice President, U.S. Operations and General Manager


The
biographical information of Mr. Fischer is set forth below under "Our Directors."

Svai S. Sanfordhas served as our interim Chief Financial Officer since November 2013 and as our Chief Accounting Officer since December
2013. From July 2012 until November 2013, he served as our Corporate Controller. Prior to this, Mr. Sanford was the Corporate Controller at Glam Media, Inc., a digital content provider,
from November 2010 to June 2012, and in addition to other senior management roles within the company, he was the Senior Director, Technical Accounting, Reporting and Compliance at Elan
Pharmaceuticals, Inc., a biopharmaceutical company, from March 2004 to November 2010. Mr. Sanford began his career with KPMG LLP, where he earned his license as a certified public
accountant. Mr. Sanford holds a B.S. in Accounting from Kansas State University.

John L. Slebirjoined VIVUS in September 2009. Since January 2014, Mr. Slebir has served as our Senior Vice President, Business
Development and General Counsel, and, since June 2012, he also has served as our Secretary. From June 2011 until January 2014, Mr. Slebir served as our Vice President,
Business Development and General Counsel, from January 2011 until June 2011, he served as our Vice President, General Counsel, and, from September 2009 until January 2011, he served as our General
Counsel on a part-time basis. From March 1999 to January 2011, Mr. Slebir served as an attorney at Wilson Sonsini Goodrich & Rosati, P.C., specializing in corporate securities and
corporate governance. Prior to joining Wilson Sonsini Goodrich & Rosati, P.C., Mr. Slebir was an attorney at two prominent Bay Area law firms specialized in insurance defense litigation.
Mr. Slebir holds a B.A. in Communications from San Diego State University and a J.D. from Santa Clara University School of Law.

Wesley W. Day, Ph.D.has served as our Vice President, Clinical Development since November 2005. From September 2003 until October 2005,
Dr. Day served as Senior Director, Safety and Risk Management at Pfizer Inc., a research-based global pharmaceutical company. Since 1995, Dr. Day has served as an Adjunct
Associate Professor for the School of Pharmacy at the University of Maryland at Baltimore. From 2002 until 2003, he also served as an Adjunct Assistant Professor for Temple University in Philadelphia,
Pennsylvania. Dr. Day holds a B.S. from the University of Texas Pan American and a Ph.D. in Pharmacology and Toxicology from the University of Maryland at Baltimore.

Guy P. Marshhas served as our Vice President of U.S. Operations and General Manager since July 2000. From 2001 until the sale of our MUSE
product in 2010, Mr. Marsh was responsible for U.S. Sales and Marketing of MUSE. From April 1999 to July 2000, Mr. Marsh served as our General Manager, Operations. From May 1998 to March
1999, he served as our Senior Director, U.S. Operations. From April 1994 to April 1998, Mr. Marsh served as Vice President Technical Operations

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for
Copley Pharmaceutical, Inc., a pharmaceutical company acquired by Teva Pharmaceutical Industries, Ltd. From September 1993 to April 1994, Mr. Marsh served as a liaison between
Copley Pharmaceutical, Inc. and Copley's majority stockholder, Hoechst-Celanese Corporation. From November 1987 to April 1994, Mr. Marsh served in various manufacturing, sales and
business management roles for Hoechst-Roussel Pharmaceuticals, Inc., a pharmaceutical company. Mr. Marsh holds a B.S. in Engineering from New Jersey Institute of Technology, an M.B.A.
from Seton Hall University and a New Jersey State Professional Engineering License.

Our Directors

Our board of directors, or the Board, currently consists of eleven directors.

The
following table and the biographical information that follows it set forth information as of April 30, 2014 regarding our Board:

Name of Nominee

Age

Position Held with the Company

First
Became a
DirectorMichael J. Astrue(3)


57

Chairman of the Board of Directors


2013J. Martin Carroll(1)(2)


64

Director


2013Samuel F. Colin, M.D.(2)(3)


49

Director


2013Alexander J. Denner, Ph.D.(3)


44

Director


2013Seth H. Z. Fischer.


58

Chief Executive Officer and Director


2013Johannes J.P. Kastelein, M.D., Ph.D.


60

Director


2013Mark B. Logan(1)


75

Director


1999David Y. Norton(2)(3)


62

Director


2013Jorge Plutzky, M.D.(3)


55

Director


2013Herman Rosenman(1)(2)


66

Director


2013Robert N. Wilson(2)


73

Director


2013


(1)Member
of the Audit Committee of the Board of Directors(2)Member
of the Compensation Committee of the Board of Directors(3)Member
of the Nominating and Governance Committee of the Board of Directors


Michael J. Astruehas served as a director of the Company since July 19, 2013 and was elected to be the Chairman of the Board on
July 22, 2013. From February 2007 to February 2013, when he retired from public service, Mr. Astrue served as Commissioner of Social Security and as one of the six Trustees of the
Medicare and Social Security Trust Funds. He also served as the interim Chief Executive Officer of Epix Pharmaceuticals, Inc. from 2005 to 2006, where he engineered a merger for the failing
publicly traded biotechnology company. Mr. Astrue also served as the President and Chief Executive Officer of Transkaryotic Therapies, Inc. (currently a subsidiary of Shire
Pharmaceuticals that has since been renamed) from 2003 to 2005, during which time he led a successful turnaround of the biotechnology company; from 2000 to 2003, he served as its Senior Vice
President-Administration & General Counsel. Prior to joining Transkaryotic Therapies, Mr. Astrue was Vice President and General Counsel of Biogen, Inc., one of the largest
biotechnology companies, from 1993 to 1999, and was a Partner at Mintz, Levin, Glovsky, Cohn, Ferris & Popeo P.C., a law firm, from 1992 to 1993. Mr. Astrue has also served in a number
of government positions, including as General Counsel of the United States Department of Health & Human Services from 1989 to 1992, and as Associate Counsel to former President Reagan and
former President Bush, from 1988 to 1989. He has also served as Counselor to the Commissioner of Social Security, from 1986 to 1988, and as Acting Deputy Assistant Secretary for Legislation (Human
Services), from 1985 to 1986, each at the United States Department of Health and Human Services. Mr. Astrue has served as a member of a number of boards of directors,

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including
as Vice Chairman of the Massachusetts High Technology Counsel, from 2006 to 2007, as Chairman of the Massachusetts Biotechnology Council, from 2000 to 2002, and as a director on the board of
four public companies and a number of non-profit organizations. Mr. Astrue received his J.D. from Harvard University Law School and his B.A. from Yale University.

Mr. Astrue's
qualifications as a director include his executive experience at biotechnology companies and his experience serving as a director on the boards of several public
companies.

J. Martin Carrollhas served as a director of the Company since May 2013. From August 2002 through March 2013, Mr. Carroll served
at Boehringer Ingelheim GmbH (BI), a pharmaceutical company, most recently as Head, Global Strategy and Development. After joining BI in August 2002, Mr. Carroll was appointed President
and Chief Executive Officer of Boehringer Ingelheim US in January 2003 and served through 2011. From 1985 to 2001, Mr. Carroll served in various marketing, business development, sales and
administrative positions at Merck & Co., Inc., a public pharmaceutical company. From 1984 to 1985, Mr. Carroll served as a Merck Executive on the President's Commission on
Executive Exchange at the United States Environmental Protection Agency. From 1976 to 1984, he served in various operational roles at Merck & Co., Inc. From 2004 to 2005, he
served on the board of Accredo Health Group, Inc., a public company acquired by Medco Health Solutions, Inc., which provides
specialty pharmacy and related services. Mr. Carroll holds a B.A. from Holy Cross College and an M.B.A. from Babson University.

Mr. Carroll's
prior extensive experience in operations, marketing, sales and business development at pharmaceutical companies brings essential experience to the Board of Directors
needed for strategic planning, product development and commercialization, finance and operations and executive compensation.

Samuel F. Colin, M.D.,has served as a director of the Company since July 19, 2013. Dr. Colin is currently a Senior Managing
Director at First Manhattan Co., which provides investment management services to individuals, partnerships, trusts, retirement accounts and institutional clients. He has been employed at First
Manhattan since 1994, and has served as the sole portfolio manager, since inception, of two pooled investment vehicles, beginning in 1998; the vehicles currently have assets under management of over
$500,000,000. From 1992 to 1994, Dr. Colin was an intern and resident in dermatology at Yale-New Haven Hospital. Dr. Colin earned his M.D. from the Yale School of Medicine, where he
researched molecular neuropharmacology, and his B.Sc. Human Biology from Brown University.

Dr. Colin's
qualifications as a director include his investment expertise and his medical background.

Alexander J. Denner, Ph.D.,has served as a director of the Company since July 19, 2013. Dr. Denner is a founding partner
and Chief Investment Officer of Sarissa Capital Management LP, a registered investment advisor formed in 2012. Sarissa Capital focuses on improving the strategies of companies to better provide
shareholder value. From 2006 to November 2011, Dr. Denner served as a Senior Managing Director of Icahn Capital, an entity through which Carl C. Icahn conducts his investment activities. Prior
to that, he served as a portfolio manager at Viking Global Investors, a private investment fund, and Morgan Stanley Investment Management, a global asset management firm. Dr. Denner is a
director of Biogen Idec Inc., a publicly traded biopharmaceutical company, where he has served since 2009, and ARIAD Pharmaceuticals, Inc., a publicly traded pharmaceutical company,
where he has served since 2014. During the past five years, Dr. Denner has served as a director of the following publicly traded companies: Amylin Pharmaceuticals, Inc., a publicly
traded biopharmaceutical company, from 2009 until 2012; Enzon Pharmaceuticals, Inc., a publicly traded biopharmaceutical company, from 2009 until 2013; ImClone Systems Incorporated, a publicly
traded biopharmaceutical company where he was Chairman of the Executive Committee, from 2006 until its acquisition in 2008; and Mast Therapeutics, Inc. (formerly named Adventrx
Pharmaceuticals, Inc.), a

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publicly
traded biopharmaceutical company, from 2006 until 2009. Dr. Denner received his S.B. degree from the Massachusetts Institute of Technology and his M.S., M.Phil. and Ph.D. degrees from
Yale University.

Dr. Denner
has significant experience overseeing the operations and research and development of healthcare companies and evaluating corporate governance matters. He also has
extensive experience as an investor, particularly with respect to healthcare companies, and possesses broad healthcare industry knowledge.

Seth H. Z. Fischerhas served as the Chief Executive Officer and as a director of the Company since September 3, 2013.
Mr. Fischer served in positions of increasing responsibility with Johnson & Johnson, a public healthcare company, from 1983 until his retirement in 2012. Most recently,
Mr. Fischer served as Company Group Chairman Johnson & Johnson and Worldwide Franchise Chairman, Cordis Corporation from 2008 to 2012, which included responsibility for Cordis and
Biosense Webster, and as Company Group Chairman, North America Pharmaceuticals from 2004 to 2007, which included responsibility for Ortho-McNeil Pharmaceuticals, Janssen and Scios. Prior to this
position, Mr. Fischer served as President of Ortho-McNeil Pharmaceuticals from 2000 to 2004, with his operating responsibilities encompassing the commercialization of products in multiple
therapeutic categories including Topamax® for epilepsy and migraine and products in the analgesic, anti-infective, cardiovascular, neurologic, psychiatric and women's health areas. Since
2013, Mr. Fisher has served on the board of BioSig Technologies, Inc., a medical device company, and since 2013, Mr. Fischer has served as an advisor of MedHab, LLC, a
medical device limited liability company. From April 2013 to September 2013, Mr. Fischer served on the Board of Trius Therapeutics, Inc., a public pharmaceutical company, until it was
acquired by Cubist Pharmaceuticals. Mr. Fischer holds a Bachelor of General Studies from Ohio University and served as a captain in the U.S. Air Force.

Mr. Fischer's
prior extensive executive level operational experience at Johnson & Johnson brings essential experience to the Board needed for strategic planning, product
development and commercialization and operations.

Johannes J.P. Kastelein, M.D., Ph.D.has served as a director of the Company since July 19, 2013. Since January 2003,
Dr. Kastelein has been a Professor of Medicine at the Department of Vascular Medicine at the Academic Medical Center of the University of Amsterdam, where he holds the Strategic Chair of
Genetics of Cardiovascular Disease. In 2012, Dr. Kastelein founded Dezima Pharma B.V., a pharmaceutical company that develops assets for the treatment of dyslipidemia, and currently
serves on its board of directors. Dr. Kastelein was also one of the founders of Amsterdam Molecular Therapeutics, Inc. (currently, UniQure B.V.), a gene therapy company that
achieved the first approved gene therapy worldwide, and currently serves as the major consultant for the distribution of the gene therapy in the European Union. He also is an executive consultant to
the cardiovascular and metabolic franchises of many leading biotechnology and pharmaceutical companies, including Amarin, Amgen, Bristol-Myers Squibb, Genentech, Merck, Novartis, Pfizer, Regeneron and
Sanofi-Aventis. His advisory
work has also included accompanying numerous companies to meetings with the European Medicines Agency and interacting with individual country regulatory authorities for Aegerion, CSL Behring, Eli
Lilly, Genzyme, ISIS, The Medicines Company and UniQure (formerly Amsterdam Molecular Therapeutics). Dr. Kastelein has also served on Steering Committees of many landmark cardiovascular outcome
trials including TNT (Lipitor, Pfizer), IDEAL (Lipitor, Ideal), JUPITER (Crestor, AstraZeneca), ACCELERATE (Evacetrapib, Eli Lilly) and the Sanofi PCSK9 Phase III ODYSSEY outcome programme
(Sanofi-Aventis). Dr. Kastelein also serves on the board of the Dutch Atherosclerosis Society and as Chair of the National Scientific Committee on Familial Hypercholesterolemia. He is a member
of the Royal Dutch Society for Medicine & Physics, the Council for Basic Science of the American Heart Association, the European Atherosclerosis Society and is a fellow at the European Society
of Cardiology. He has also served as a board member of the International Task Force for CHD Prevention, and as a member of the Executive Board of the

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International
Atherosclerosis Society. Dr. Kastelein has authored hundreds of publications and is a recognized world leader in the significance of lipoprotein metabolism for the development of
atherosclerotic vascular disease.

Dr. Kastelein's
qualifications as a director include his expertise in cardiovascular outcome trials, his regulatory experience in the European Union, his many professional
associations, and his position as a director on the boards of several medical associations and pharmaceutical companies.

Mark B. Loganhas served as a director of the Company since March 1999 and served as the Chairman of the Board from April 2007 through
July 2013. Since January 2014, Mr. Logan has served as President and CEO of TearSolutions, LLC, a development stage ophthalmic pharmaceutical company, which he co-founded in January
2014. From 1994 until his retirement in 2001, Mr. Logan served as Chairman and Chief Executive Officer of VISX, Inc. (now a part of Abbott Laboratories), a public ophthalmic device
company, which invented, obtained FDA approval and commercialized the procedure for correcting refractive vision errors known as LASIK. From 1992 to 1994, Mr. Logan was Chairman, President and
Chief Executive Officer of Insmed Pharmaceuticals, Inc., a development stage biopharmaceutical company, where he had served on its board since its founding in 1988. From 1990 to 1992,
Mr. Logan was a principal at McManus Associates, Inc., a research and management firm, specializing in the health care field. From 1981 to 1985, Mr. Logan served as Executive Vice
President, Chief Operating Officer, and as a member of the board of Bausch & Lomb, Inc., a company focusing on eye health products. From 1975 to 1981, he was Consumer Group President of
Becton, Dickinson and Co., a public medical technology company. From 1967 to 1974, Mr. Logan served as President and General Manager of a subsidiary of Wyeth, Inc. (formerly
American Home Products Corp., now a part of Pfizer, Inc.), a public pharmaceutical company. Since November 2010, Mr. Logan has served on the board of STAAR Surgical Company, a publicly
traded ophthalmic device company, and since January 2014, he has served as Chairman of the Board of STAAR Surgical Company. Since 2011, he has served on the board of Gencia Corporation, a private
biotechnology company. From 1997 to 2006, he served on the board of Abgenix, Inc., a public biotechnology company which was acquired by Amgen Corporation. From 2000 to 2001, he also served on
the board of Somnus Medical Technologies, a public company that designs,
develops, manufactures and markets medical devices and which was acquired by Gyrus Group PLC. From 1996 to 1997, he served on the board of Imagyn Medical, Inc., a public company that
designs and markets medical devices and which was acquired by Urohealth Systems, Inc. In addition, since 2002, Mr. Logan has served on the advisory board of The University of Virginia
Heart and Vascular Center and has been a Trustee and member of the Executive Committee of the Southern Environmental Law Center since 2002. In 1999, Mr. Logan was inducted into the
Ernst & Young Entrepreneur of the Year Hall of Fame. Mr. Logan holds a B.A. from Hiram College, was a Woodrow Wilson Fellow at New York University and completed the Program for
Management Development at Harvard Business School.

Mr. Logan's
prior extensive executive level operational experience at public pharmaceutical and medical device companies brings essential experience to the Board of Directors and
its committees needed for strategic planning, product development and commercialization, finance and operations and executive compensation. Mr. Logan's long tenure on our Board of Directors,
experience on other public boards and foundations, and previous experience as the chairman and chief executive officer of a publicly traded company bring necessary leadership and governance skills to
the Board of Directors and its committees.

David Y. Nortonhas served as a director of the Company since July 19, 2013. Until his retirement in September 2011,
Mr. Norton was Company Group Chairman, Global Pharmaceuticals for Johnson & Johnson, a multi-national company that manufactures pharmaceutical, diagnostic, therapeutic, surgical and
biotechnology products. In this position he was responsible for leading and developing the strategic growth agenda, including the strategy for licensing, acquisitions and divestments, and ensuring
alignment with its global strategic functions, research and development and commercial organizations.

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Mr. Norton
began his Johnson & Johnson career in 1979, and held a number of positions at the company, including Company Group Chairman, Worldwide Commercial and Operations for the CNS,
Internal Medicine franchise from 2006 to 2009, Company Group Chairman for the pharmaceutical businesses in Europe, the Middle East and Africa from 2004 to 2006, and Company Group Chairman for the
pharmaceutical businesses in North America from 2003 to 2004. Mr. Norton also serves as a director of Savient Pharmaceuticals Inc., a pharmaceutical company, where he has served since
September 2011 and as Chairman of the board of directors of the American Foundation for Suicide Prevention, a not-for-profit organization exclusively dedicated to understanding and preventing suicide.
Since 2012, Mr. Norton has served as Senior Advisor to Tapestry Networks, a company that creates leadership networks to promote collaboration among professional leaders. He previously served as
a member of the Board of Directors of the Alliance for Aging Research, on the board of directors of the Pharmaceutical Research and Manufacturers of America, and as a committee member of the
Australian Pharmaceutical Manufacturers Association.

Mr. Norton's
qualifications as director include his extensive global commercial experience in the pharmaceutical and biotechnology industry and his experience serving on several
boards of directors, including as Chairman of the board of a public pharmaceutical company.

Jorge Plutzky, M.D.has served as a director of the Company since May 2013. Since 1996, he has served as the Director of The Vascular
Disease Prevention Program, which includes the Lipid/Prevention Clinic, in the Cardiovascular Medicine Division at Brigham and Women's Hospital, where he is also Co-Director of Preventive Cardiology.
Since 1995, he has been on the faculty at Harvard Medical School and has directed a basic science laboratory focused on transcriptional mechanisms involved in adipogenesis, lipid metabolism, and
diabetes, and their relationship to inflammation and atherosclerosis. Throughout his career, Dr. Plutzky has also been involved in translational clinical studies investigating links between
metabolic disorders and cardiovascular disease. Dr. Plutzky has been a member of the scientific advisory boards of the Sarnoff Cardiovascular Research Foundation since 2009 and Ember
Therapeutics since 2012. Dr. Plutzky has been elected to the American Society for Clinical Investigation and is a Fellow of the American College of Cardiology. Dr. Plutzky's papers have
appeared in journals that includeScience,PNAS, Diabetes,Lancet, Annals of Internal
Medicine, andNature
Medicine. Dr. Plutzky has been involved with the U.S. Food and Drug Administration, serving both as a member of the Endocrinologic and Metabolic Drugs Advisory Committee
and in advising and presenting for new drug application sponsors. He has been involved with both the American Heart Association and the American Diabetes Association. Dr. Plutzky has been
recognized with the Eugene Braunwald Teaching Award, the University of Cologne's Klenk Lecture, Vanderbilt University's Rabin Lecture, Northwestern University's DeStevens Lecture, and Harvard Medical
School's Tucker Collins Lecture. Dr. Plutzky holds a B.A. from the University of Virginia, where he was an Echols Scholar and a member of Phi Beta Kappa, and an M.D. from the University of
North Carolina, Chapel Hill. He completed research fellowships at the National Institutes of Health and the Massachusetts Institute of Technology.

Dr. Plutzky's
clinical background, medical knowledge, and science expertise in the prevention and treatment of cardiometabolic disease brings valuable and unique insight to the
Board of Directors as evaluation, development and commercialization of our current and potential future products proceed.

Herman Rosenmanhas served as a director of the Company since July 19, 2013. Mr. Rosenman was Senior Vice President, Finance
and Chief Financial Officer of Gen-Probe, Inc. (currently, Hologic, Inc.), a molecular diagnostic company, from June 2001 to October 2012. Prior to joining Gen-Probe in 2001,
Mr. Rosenman was President and Chief Executive Officer of Ultra Acquisition Corp., a retail chain and consumer products manufacturer, from 1997 to 2000. In addition, he served as President and
Chief Executive Officer of RadNet Management, Inc., a large healthcare provider, from 1994 to 1997, and as Executive Vice President and Chief Financial Officer for Rexene Corp., a Fortune 1000
company in the petrochemicals industry. Mr. Rosenman was previously a partner at Coopers &

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Lybrand
(currently, PricewaterhouseCoopers LLP) where he served numerous Fortune 1,000 clients, principally in the pharmaceuticals and telecommunications industries. Mr. Rosenman
currently serves on the board of directors of Oxford Immunotec Global PLC, a publicly traded diagnostics company. Mr. Rosenman also served on the board of directors of Discovery Partners
International, Inc., from 2003 until its reverse-merger into Infinity Pharmaceuticals, Inc. in 2006, and thereafter Infinity Pharmaceuticals, Inc., where he served until 2007, as
well as on the boards of directors of ARYx Therapeutics, Inc., from which he resigned in 2011, and Emphasys Medical, Inc. Mr. Rosenman received a B.B.A. in finance and accounting
from Pace University and an M.B.A. in finance from the Wharton School of the University of Pennsylvania.

Mr. Rosenman's
qualifications as director include his experience in the biotechnology and pharmaceuticals industries, his extensive leadership experience as both a Chief Executive
Officer and a Chief Financial Officer, his diverse industry background in companies ranging from large multinational corporations to start-ups, and his broad base of expertise with initial public
offerings, mergers & acquisitions, turn-arounds and high growth companies.

Robert N. Wilsonhas served as a director of the Company since April 2013. From 1964 to 2003, Mr. Wilson served in various roles at
Johnson & Johnson, a public healthcare company, including the Executive Committee from 1983 through 2003 and Vice Chairman of the board from 1988 through 2003. Since 2007, Mr. Wilson has
also been Chairman of Mevion Medical Systems, Inc. (formerly Still River Systems), a medical device company. Since 2003, Mr. Wilson has served as a member of the board of Synta
Pharmaceuticals Corporation, a public biopharmaceutical company, and a member of the board of Charles Schwab Corporation, a public brokerage and banking company. Since 1996, he has been a member of
the board of Hess Corporation, a public oil and gas company. From 2004 to 2007, Mr. Wilson was also Chairman of Caxton Health Holdings, LLC, a healthcare-focused investment firm.

Mr. Wilson's
knowledge and extensive experience in the pharmaceutical industry brings essential experience to the Board of Directors. In addition, Mr. Wilson's significant
experience on other publicly traded company boards of directors and board committees provides him with an understanding of current corporate governance practices and trends and compensation matters
that provides value to our Board of Directors.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors, and persons who
own more than 10% of a registered class of our equity securities, to file certain reports of ownership with the SEC. Such officers, directors and
stockholders are also required by SEC rules to provide us with copies of all Section 16(a) forms that they file. Based solely on our review of copies of such forms received by us or on written
representations from certain reporting persons submitted to us during the year ended December 31, 2013, we believe that during the period from January 1, 2013 to December 31,
2013, all of our executive officers, directors and 10% stockholders complied with all Section 16(a) requirements except as follows: one Form 3/A for Mr. Sanford was filed on
March 17, 2014, reporting the omission of two stock option grants from Mr. Sanford's original Form 3 and one Form 4 filed after his original Form 3.

Code of Business Conduct and Ethics

The Board has adopted a Code of Business Conduct and Ethics, which is applicable to all of our employees, officers and directors. The
Code of Business Conduct and Ethics may be found on our website atwww.vivus.com. The Company will disclose any amendment to the Code of Business
Conduct and Ethics or waiver of a provision of the Code of Business Conduct and Ethics, including the name of the person to whom the waiver was granted, on our website on the Investor Relations page.
The Company intends to disclose future amendments to, or waivers from, certain provisions of its Code of Business Conduct and Ethics on the above website within five business days following the date
of such amendment or waiver.

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Material Changes to Nominee Recommendation Procedures

There are no material changes to the procedures by which stockholders may recommend nominees to the Company's Board.

Audit Committee

The Company has a separately-designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934, as amended. The Audit Committee's main function is to oversee our accounting and financial reporting processes, internal system of control, independent registered
public accounting firm relationships and the audits of our financial statements. The Audit Committee consists of directors Carroll, Logan and Rosenman, none of whom is an employee of the Company and
each of whom is independent within the meaning of the NASDAQ director independence standards and the SEC requirements, in each case as currently in effect. The Board has determined that
Mr. Rosenman is an "audit committee financial expert" as
defined in SEC rules. Mr. Rosenman serves as Chairman of the Audit Committee.

Item 11.Executive Compensation

Compensation Discussion and Analysis

This Compensation Discussion and Analysis discusses:



We
refer to the following individuals as "named executive officers" for 2013:

Name

TitleSeth H. Z. Fischer

Chief Executive OfficerSvai S. Sanford

Interim Chief Financial Officer and Chief Accounting OfficerJohn L. Slebir

Senior Vice President, Business Development and General Counsel and SecretaryWesley W. Day, Ph.D.

Vice President, Clinical DevelopmentGuy P. Marsh

Vice President, U.S. Operations and General ManagerMichael P. Miller

Former Senior Vice President and Chief Commercial OfficerTimothy E. Morris

Former Senior Vice President Finance and Global Corporate Development and Chief Financial OfficerLee B. Perry

Former Vice President and Chief Accounting OfficerPeter Y. Tam

Former PresidentLeland F. Wilson

Former Chief Executive OfficerAnthony P. Zook

Former Chief Executive Officer


General Philosophy

We compensate our named executive officers through a combination of base salary, cash bonus and equity compensation designed to be
competitive with comparable companies. Our core objective is to attract, retain, reward and motivate our named executive officers and to align our performance with the long-term interests of our
stockholders.

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Our
compensation programs are designed to:



In
determining the compensation for our named executive officers, we, in connection with consulting with our compensation consultant, Radford, Inc., or Radford, consider a number
of factors, including information regarding comparably sized companies in the biotechnology and pharmaceutical industries
in the United States. We also consider the seniority level of the employee, the geographical region in which the employee resides and the employee's overall performance and contribution to the
Company. Especially with respect to the compensation of our Chief Executive Officer, we also consider our performance and the anticipated difficulty of replacing the Chief Executive Officer with
someone of comparable experience and skills.

Executive Compensation Program Objectives



Our Compensation Committee relies on experience with other companies in our industry and, with respect to our named executive officers,
third party industry compensation surveys, including those compiled and provided to the Compensation Committee by Radford, and internally generated comparisons of the various elements of total
compensation to peer group companies, or the Peer Group, to determine base salary, performance-based cash bonuses and performance-based equity awards and the portion of total compensation each element
should comprise. We believe that a larger portion of our named executive officers' compensation should be based on performance than our lower level personnel. Consistent with our compensation
philosophy, we have structured each element of our compensation program as described below.

We
design our base pay to provide the essential reward for an employee's work. Once base pay levels are determined, increases in base pay are provided to recognize an employee's specific
performance achievements and contributions.

We
also utilize cash bonuses to compensate employees for the achievement of corporate objectives as well as an employee's outstanding results while allowing us to remain competitive with
other companies.

We
utilize equity-based compensation to ensure that we have the ability to retain employees over a longer period of time and to provide employees with a form of reward that aligns their
interests with those of our stockholders. In 2013, we primarily utilized stock options, which typically vest over a period of four years which provides a long-term incentive to our personnel as they
work on multi-year commercialization and drug development programs. Employees whose skills and results we deem to be critical to our long-term success are eligible to receive higher levels of
equity-based compensation. Beginning in 2014, our annual equity-based compensation includes a mix of stock options and restricted
stock units, due to our stock price volatility, our current share reserves under our 2010 Equity Incentive Plan and our goal to further incentivize our personnel. These annual restricted stock units
generally vest over a period of four years, providing a long-term incentive to our personnel. The special restricted stock unit grants to Messrs. Sanford, Slebir and Marsh and Dr. Day in
January 2014 vest

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pursuant
to the following 18 month schedule commencing on January 1, 2014, or the Vesting Commencement Date: 20% on the six month anniversary of the Vesting Commencement Date, 20% on the
12 month anniversary of the Vesting Commencement Date and 60% on the 18 month anniversary of the Vesting Commencement Date, subject to continued full time employment with the Company on
each such date.

Core
benefits, such as our basic health benefits, 401(k) program, disability and life insurance plans, are designed to provide support to employees and their families and to be
competitive with other companies in our industry.



In 2012, our Compensation Committee chose a group of 16 companies to include in the Peer Group based on their similarity to us in terms
of industry focus, stage of development, pharmaceutical assets, business strategy, and the geographical location of the talent pool with which we compete. The market data for the Peer Group was drawn
from publicly available documents. Additional compensation data for each named executive officer was obtained from the Radford Global Life Sciences Survey. The Compensation Committee also included in
the Peer Group companies with which we compete for talent and that more closely resemble the group of companies that we would use for measuring relative financial performance for annual incentive
bonuses. For 2013, the Peer Group remained unchanged from 2012 and consisted of the following companies, which was determined by the Compensation Committee:

Affymax, Inc.

MannKind CorporationArena Pharmaceuticals, Inc.

Medivation, Inc.Amylin Pharmaceuticals, Inc.

Onyx Pharmaceuticals, Inc.Biomarin Pharmaceutical Inc.

Orexigen Therapeutics, Inc.Dendreon Corporation

Questcor Pharmaceuticals, Inc.Exelixis, Inc.

Rigel Pharmaceuticals, Inc.ISIS Pharmaceuticals, Inc.

Seattle Genetics, Inc.Jazz Pharmaceuticals, Inc.

Theravance, Inc.


For
2014, our Compensation Committee, after consulting with Radford, chose a group of 20 companies to include in the Peer Group based on their similarity to us in terms of industry
focus, stage of development in transitioning from a development stage company to a commercial company, market capitalization size, entity size, pharmaceutical assets, business strategy, and the
geographical location of the talent pool with which we compete. The market data for the Peer Group was drawn from publicly available documents. Additional compensation data for our Chief Executive
Officer was obtained from the Radford Global Life Sciences Survey, which was provided to the Compensation Committee by Radford. For 2014, the Peer Group consisted of the following companies, which was
determined by the Compensation Committee, after consulting with Radford:

ACADIA Pharmaceuticals Inc.

Idenix Pharmaceuticals, Inc.Aegerion Pharmaceuticals, Inc.

ImmunoGen, Inc.AMAG Pharmaceuticals, Inc.

InterMune, Inc.Arena Pharmaceuticals, Inc.

MannKind CorporationAvanir Pharmaceuticals, Inc.

Nektar TherapeuticsCadence Pharmaceuticals, Inc.

Neurocrine Biosciences, Inc.Depomed, Inc.

Omeros CorporationDyax Corp.

Orexigen Therapeutics, Inc.Exelixis, Inc.

Pacira Pharmaceuticals, Inc.Horizon Pharma, Inc.

Xenoport, Inc.


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The
data on the compensation practices of the Peer Group is gathered by our searches of publicly available information. Due to the variations between companies reporting the individual
and roles for which compensation is disclosed, directly comparable information is not available from each peer company with respect to each of our named executive officers. In considering the Peer
Group compensation data, the Compensation Committee recognizes that executives at different companies can play significantly different roles, with different responsibilities and scope of work, even
though they may hold similar titles or positions. Moreover, it is not always possible to determine the respective qualitative factors that may influence compensation from the publicly reported
compensation data, such as scope of each named executive officer's responsibilities, their performance during the period under consideration or their perceived importance to their companies' business,
strategy and objectives. Accordingly, the Compensation Committee looked to information about the Peer Group as one of a number of considerations in establishing executive compensation levels (as
described in more detail below). In determining compensation for our named executive officers, the Compensation Committee reviewed both Peer Group information and the collective experience of the
members of our Compensation Committee and executive management to establish our compensation practices.



In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we held a non-binding stockholder vote in
August 2013 on our 2012 executive compensation practices. The Compensation Committee, while not bound to act on a negative vote, carefully considers the opinion of its stockholders in making
compensation decisions. The 2013 say-on-pay vote to approve our 2012 executive compensation passed with 52,044,190 votes for, 1,194,339 votes against, 246,360 abstaining, and 30,885,278 broker
non-votes. In alignment with our philosophy on stockholder say-on-pay, and with the results of the say-on-pay frequency vote held in 2011, we intend to continue to hold non-binding stockholder
say-on-pay votes annually.

Executive Compensation Components

We have structured each element of our compensation package as follows:



We determine our named executive officers' salaries based on job responsibilities and individual experience, and we benchmark the
amounts we pay against comparable competitive market compensation for similar positions within our Peer Group and industry as well as geographical area. Specifically, we utilize information obtained
from our comparison of Peer Group compensation data and the annual Radford Global Life Sciences Survey, or the Comparison Data. Our Compensation Committee reviews the salaries of our named executive
officers annually, and our Compensation Committee grants increases in salaries based on a review of the Comparison Data and of individual performance during the prior calendar year provided that any
increases are within the guidelines determined by the Compensation Committee for each position. Guidelines are adjusted and modified on an annual basis based on information obtained from our review of
the Comparison Data, as well as from our Compensation Committee's and management's experience and general employment market conditions for our industry and geographic area. Increases in base salary
are based on individual performance as merit increases and on the Comparison Data as market increases; such increases are not automatic or guaranteed.

In
January 2013, our Compensation Committee reviewed base salaries for our named executive officers. The Compensation Committee considered a number of factors in setting the 2013 base
salaries for our named executive officers, including the status of the commercial launch of Qsymia® as a treatment for obesity, establishing a partnership in the United States, the
European Union and certain
developing countries to launch STENDRA and raising adequate capital to support our business. For

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STENDRA,
we use the trade name SPEDRA in the EU and certain other territories outside the U.S.; throughout this Amendment, we refer to STENDRA and SPEDRA as STENDRA. In addition,
the Compensation Committee reviewed the Comparison Data and the individual performance of our named executive officers during the prior calendar year. Following the Compensation Committee's review,
all of our named executive officers, with the exception of Messrs. Fischer, Wilson and Zook, received merit increases to their base salaries based on individual performance, and
Messrs. Slebir and Marsh received market increases to their base salaries based on a review of the Comparison Data.

The
table below provides the base salary for each named executive officer:

Name

2013 Increase to
Base Salary

2013
Base Salary ($)Seth H. Z. Fischer(1)



%

650,000Svai S. Sanford(2)


34.3
%

350,000John L. Slebir(3)


10.5
%

398,788Wesley W. Day, Ph.D.


3.8
%

419,664Guy P. Marsh(4)


8.7
%

369,887Michael P. Miller(5)


3.5
%

407,869Timothy E. Morris(6)


5.0
%

455,241Lee B. Perry(7)


4.3
%

300,010Peter Y. Tam(8)


6.0
%

577,713Leland F. Wilson(9)



%

738,000Anthony P. Zook(10)



%

650,000


(1)Mr. Fischer
was appointed as Chief Executive Officer effective as of September 3, 2013.(2)Mr. Sanford
became our interim Chief Financial Officer on November 5, 2013 and our Chief Accounting Officer on December 16, 2013. Prior
to November 5, 2013, Mr. Sanford served as our Corporate Controller during 2013.(3)Includes
a $20,000 market adjustment increase. Actual amount of merit increase was 4.5%.(4)Includes
a $15,000 market adjustment increase. Actual amount of merit increase was 3.9%.(5)Mr. Miller's
role as Senior Vice President and Chief Commercial Officer ended on January 16, 2014, and his employment terminated with the
Company, effective February 14, 2014.(6)Mr. Morris'
role as Senior Vice President Finance and Global Corporate Development and Chief Financial Officer ended on November 4, 2013, and
his employment terminated with the Company, effective December 31, 2013.(7)Mr. Perry's
role as Vice President and Chief Accounting Officer ended on December 16, 2013, and his employment terminated with the Company,
effective December 31, 2013.(8)Mr. Tam
resigned as President, effective October 12, 2013, in connection with the Settlement Agreement. Please see "Certain Relationships and
Related Transactions, and Director IndependenceReview, Approval or Ratification of Transactions with Related Parties" for a description of the Settlement Agreement.(9)Mr. Wilson
resigned as Chief Executive Officer, effective July 19, 2013, in connection with the Settlement Agreement. Please see "Certain
Relationships and Related Transactions,


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and
Director IndependenceReview, Approval or Ratification of Transactions with Related Parties" for a description of the Settlement Agreement. (10)Mr. Zook
was appointed as Chief Executive Officer on July 22, 2013 in connection with the Settlement Agreement and resigned from the position
effective as of September 3, 2013. Please see "Certain Relationships and Related Transactions, and Director IndependenceReview, Approval or Ratification of Transactions with
Related Parties" for a description of the Settlement Agreement.




Annual Bonus Plan.We awarded cash bonuses under the Annual Bonus Plan to our named executive officers based on our overall corporate
performance and
achievement of general corporate performance objectives established by our Compensation Committee in February 2013. The cash bonuses are discretionary and are based on an end-of-year assessment by our
Compensation Committee. The corporate performance and the achievement of corporate objectives determine the percent of the eligible cash bonus to be paid to each named executive officer. Each named
executive officer's individual performance is reviewed to determine how such named executive officer's performance contributed to our overall corporate performance and achievement of corporate
performance objectives. The Compensation Committee uses this information to determine the named executive officer's cash bonus award, such that the percent of the eligible bonus to be paid to a named
executive officer may be decreased or eliminated based on the individual performance review. Cash bonuses under the Annual Bonus Plan are awarded on a discretionary basis, and the Compensation
Committee may modify, eliminate or adjust corporate objectives at any time, thereby ensuring that employees are compensated for performance.

For
2013, our corporate performance objectives as approved by our Compensation Committee in February 2013, were as follows:



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In the Compensation Committee's opinion, the Company succeeded in meeting the following corporate objectives: obtaining approval from the U.S. Food and Drug
Administration of the modification to the Qsymia Risk Evaluation and Mitigation Strategy to allow expanded dispensing through certified retail pharmacies, including the availability of Qsymia in at
least 10,000 certified retail pharmacies by August 1, 2013; raising adequate capital to support the Company's business; establishing a partnership in the United States, the European Union and
certain developing countries to launch STENDRA; and obtaining marketing approval from the European Medicines Agency for STENDRA as a treatment for erectile dysfunction. Based on the achievements in
2013, the Compensation Committee determined that bonuses under the Annual Bonus Plan equal to 60% of the eligible cash bonus potential would be paid for 2013 to our eligible employees under the plan,
including our eligible named executive officers.

The
table below provides the target bonus for each named executive officer who participated in the Annual Bonus Plan for 2013 and the executive's actual bonus amount (if any):

Name(1)

2013 Target
Bonus as a
Percentage
of
Base Salary

2013
Target
Bonus ($)

2013
Maximum
Bonus as a
Percentage
of Base
Salary

2013
Maximum
Bonus ($)

2013 Actual
Bonus as a
Percentage
of
Base Salary

2013
Actual
Bonus ($)Seth H. Z. Fischer(2)


80
%

520,000


100
%

650,000


16
%

104,000Svai S. Sanford(3)


30
%

105,000


38
%

131,250


16
%

57,000John L. Slebir


40
%

159,515


50
%

199,394


24
%

95,700Wesley W. Day, Ph.D.


40
%

167,866


50
%

209,832


24
%

100,000Guy P. Marsh


50
%

184,944


63
%

231,179


22
%

81,000Michael P. Miller


50
%

203,935


63
%

254,918



%




(1)Mr. Miller
was not eligible to receive a cash bonus payment under the Annual Bonus Plan for 2013, and Mr. Zook was not a participant under the
Annual Bonus Plan for 2013. Please see the Summary Compensation Table for 2013 under the heading "All Other Compensation" and the accompanying footnotes for the cash bonus payments under the Annual
Bonus Plan for 2013 paid to Messrs. Morris, Perry, Tam and Wilson.(2)Mr. Fischer
was appointed as Chief Executive Officer effective as of September 3, 2013 and received a pro-rated 2013 bonus. The cash bonus
payment under the Annual Bonus Plan for 2013 is on a pro rata basis for the period of time that he served as Chief Executive Officer of the Company in 2013.(3)Mr. Sanford's
2013 Actual Bonus was based on his new salary due to his appointment as interim Chief Financial Officer on November 5, 2013, but
his existing 2013 Target Bonus as a Percentage of Base Salary.


For
2014, under the Annual Bonus Plan, the Compensation Committee determined that our Chief Executive Officer, interim Chief Financial Officer, Senior Vice Presidents (or the functional
equivalent) and Vice Presidents would be eligible to receive target and maximum cash bonuses of up to 80%, 40%,

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50%
and 40% of their base salaries, respectively. The table below provides the target and maximum bonuses for each named executive officer who is participating in the Annual Bonus Plan for 2014:

Name

2014 Target
Bonus as a
Percentage of
Base Salary

2014
Target
Bonus ($)

2014
Maximum
Bonus as a
Percentage of
Base Salary

2014
Maximum
Bonus ($)Seth H. Z. Fischer


80
%

520,000


80
%

520,000Svai S. Sanford


40
%

140,000


40
%

140,000John L. Slebir


50
%

212,500


50
%

212,500Wesley W. Day, Ph.D.


40
%

172,920


40
%

172,920Guy P. Marsh


50
%

188,650


50
%

188,650




We award equity compensation to our named executive officers based on the performance of the named executive officer and guidelines
related to each named executive officer's position in the Company. We determine our stock option and restricted stock unit guidelines based on information derived from our Compensation Committee's and
management's experience. With respect to our named executive officers, we also utilize an internally generated comparison of companies and third party survey of companies in our industry, which was
developed with information provided by Radford. Specifically, we utilize the Comparison Data to modify and adjust our stock option and restricted stock unit guidelines. We typically base awards to
newly hired employees on these guidelines, and we base awards to continuing employees on these guidelines along with an employee's performance for the prior fiscal year. In determining the amount of
awards, we generally do not consider an employee's current equity ownership in the Company or the prior awards that are fully vested. Rather, we evaluate each employee's awards based on the factors
described above and competitive market factors in our industry.

Our
stock option awards typically vest over a four year period subject to the continued service of the employee to the Company. Twenty-five percent of the shares typically vest on the
first anniversary of the option award, with the remaining shares vesting monthly in equal amounts over the remainder of the vesting period. Our restricted stock unit awards typically vest over a four
year period subject to the continued service of the employee to the Company. Twenty-five percent of the shares typically vest on the annual anniversary of the restricted stock unit award. We believe
this vesting arrangement encourages our employees to continue service to the Company for a longer period of time and remain focused on our multi-year long-term drug development and commercialization
programs.

Timing of Equity Awards.Our Compensation Committee typically makes award decisions for employees at its first meeting in each fiscal
year. We
believe annual awards at this time allow the Compensation Committee to consider a number of factors related to the stock option award and restricted stock unit award decisions, including corporate
performance for the prior fiscal year, employee performance for the prior fiscal year and expectations for the upcoming fiscal year. With respect to newly hired employees, our practice is typically to
make stock option awards at the first meeting of the Compensation Committee following the employee's hire date. We do not plan or time our stock option awards in coordination with the release of
material non-public information for the purpose of affecting the value of executive compensation.

Allocation of Equity Compensation.In 2013, we granted stock options to purchase 4,166,292 shares of our Common Stock, of which stock
options to
purchase a total of 2,840,000 shares were awarded to executives, representing approximately 68% of all awards in 2013. Our Compensation Committee does not apply a formula for allocating stock options
and restricted stock units to named executive officers. Instead, our Compensation Committee considers the role and responsibilities of the

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named
executive officers, competitive factors, the non-equity compensation received by the named executive officers and the total number of options and restricted stock units to be granted in the
fiscal year.

Type of Equity Awards.Under our 2010 Equity Incentive Plan, we may award incentive stock options, within the meaning of
Section 422 of the
Internal Revenue Code of 1986, as amended, to our employees, and we may award nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and
performance shares to our employees, directors and consultants. In 2013, the primary form of equity compensation that we awarded consisted of incentive and nonstatutory stock options. In 2014, we
began awarding restricted stock units, as well as stock options.

Equity Awards in 2013.In January 2013, our Compensation Committee reviewed equity compensation for our then-serving named executive
officers. The
Compensation Committee reviewed the Comparison Data and the individual performance of such executive officers during the prior calendar year. Following the Compensation Committee's review, all of our
then-serving named executive officers received stock options as reflected in the 2013 Grants of Plan Based Awards Table below.

Retirement Savings Plan

We maintain a 401(k) retirement savings plan for the benefit of our eligible employees. Employees may elect to contribute their
compensation up to the statutorily
prescribed limit. We currently match employee contributions up to a maximum of 4% of an employee's salary per pay period. In 2013, the employer-match contribution limit was $9,800 per employee.

Employment Agreements

Seth H. Z. Fischer, our Chief Executive Officer, entered into an employment agreement with the Company on September 3, 2013,
which we refer to herein as the Employment Agreement. Mr. Fischer's Employment Agreement has an initial term of four years, renewing annually thereafter unless either party provides notice of
non-renewal. The Employment Agreement provides for:



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Under
Mr. Fischer's Employment Agreement, a "Change of Control" occurs when:



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Leland
F. Wilson, our former Chief Executive Officer, initially entered into an employment agreement with the Company on December 20, 2007. On January 25, 2013, our
Compensation Committee approved the fourth amendment to Mr. Wilson's employment agreement, extending the term until June 1, 2014. Mr. Wilson's employment agreement, as amended,
provided for:



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Under
Mr. Wilson's employment agreement, a "Change of Control" occurs when:



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Mr. Wilson
resigned as Chief Executive Officer, effective July 19, 2013, in connection with the Settlement Agreement. Please see "Executive
CompensationPotential Payments Upon Termination or Change of Control for each Named Executive Officer" for a description of the payments made to Mr. Wilson in connection with his
resignation and "Certain Relationships and Related Transactions, and Director IndependenceReview, Approval or Ratification of Transactions with Related Parties" for a description of the
Settlement Agreement.

Anthony
P. Zook, our former Chief Executive Officer, did not have an employment agreement providing for certain benefits in the event of a termination or change of control.

Change of Control Benefits

A description of the change of control benefits given to our named executed officers and a table showing potential payments upon
termination or change of control of our named executive officers are set forth herein beginning on page 32 of this Amendment.

Perquisites and Other Benefits

We annually review the perquisites that our named executive officers receive. In addition to the short-term and long-term disability
insurance plans offered to all of our employees, including all of our named executive officers, we provided an additional long-term disability insurance plan for our former Chief Executive Officer,
Leland F. Wilson. In 2013, we also offered all of our named executive officers a supplemental medical reimbursement coverage plan which allowed our named executive officers to receive reimbursement
for eligible out of pocket medical expenses. In 2014, we discontinued the use of this supplemental medical reimbursement coverage plan.

Compensation Process

The Compensation Committee reviews and approves the salaries and incentive compensation of our named executive officers and
non-employee directors and reviews and approves all new hire stock option awards to employees. In addition, the Compensation Committee approves stock option awards and restricted stock unit awards for
all employees as part of our annual performance review process. The Compensation Committee approves a pool of equity awards for employees who are not executive officers, and the Chief Executive
Officer distributes this pool in his discretion and based on the performance of each individual. The agendas for meetings of the Compensation Committee are prepared by the Compensation Committee
Chairman in consultation with management. Our Chief Executive Officer, interim Chief Financial Officer, and General Counsel typically attend the meetings of the Compensation Committee, but the Chief
Executive Officer, the interim Chief Financial Officer and the General Counsel do not participate in deliberations relating to their own compensation. In rendering its decisions, the Compensation
Committee considers the recommendations of the Chief Executive Officer, with input by the interim Chief Financial Officer and the General Counsel, the information regarding comparably sized companies
in the biotechnology and pharmaceutical industries in the United States and its collective experience with other companies. Additionally, the Compensation Committee considers data and information
provided by Radford. The Compensation Committee generally reviews the performance and compensation of the Chief Executive Officer and interim Chief Financial Officer annually.

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Our
Compensation Committee also works with our Chief Executive Officer and interim Chief Financial Officer in evaluating the financial, accounting, tax and retention implications of our
various compensation programs.

Effect of Accounting and Tax Treatment on Compensation Decisions

Section 162(m) of the Internal Revenue Code of 1986, as amended, imposes a limit on the amount of compensation that we may
deduct in any one year with respect to our Chief Executive Officer and each of our next three most highly compensated executive officers, unless certain specific criteria are satisfied. While we
consider the deductibility of compensation when making our compensation decisions, we believe that it is important to maintain the flexibility to compensate our executives in a manner we believe will
promote our corporate goals and be in the best interests of our stockholders. Our Compensation Committee therefore has not adopted a policy requiring all compensation to be deductible.

Executive Time Off

All of our full-time employees, including our named executive officers, receive up to seven weeks of vacation each year, based upon the
length of service. Mr. Wilson, our former Chief Executive Officer, was entitled to receive seven weeks of vacation each year, and Mr. Fischer, our Chief Executive Officer, is entitled to
receive four weeks of vacation each year. Unused vacation carries over to the following year and may accumulate up to three weeks at any time. Upon termination, all employees are paid their accrued
benefit that existed as of the date of such termination. Additionally, all employees receive two personal days and eight sick days each year. Personal days expire if unused as of the end of the
calendar year, but all employees are paid their accrued benefit of any unused personal days as of the date of termination. Sick days expire if unused as of the date of termination or the end of the
calendar year.

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2013 Summary Compensation Table

The following table presents information for our fiscal year ended December 31, 2013 concerning the total compensation paid to
or accrued for our Chief Executive Officer, interim Chief Financial Officer, former Chief Executive Officers and Chief Financial Officer, and each of our six other most highly compensated executive
officers. We refer to these executive officers as our "named executive officers" below.

Name and Principal Position

Year

Salary($)(1)

Option
Awards($)(2)

Non-Equity
Incentive Plan
Compensation
($)(3)

All Other
Compensation
($)(4)

Total($)Seth H. Z. Fischer(5)


2013


212,083


7,991,558


104,000


15,965


8,323,606Chief Executive Officer andDirectorSvai S. Sanford(6)


2013


274,843


124,656


57,000


10,300


466,799Interim Chief FinancialOfficer and ChiefAccounting OfficerJohn L. Slebir


2013


398,788


592,670


95,700


17,217


1,104,375Senior Vice President, Business


2012


360,750


421,724


183,081


16,810


982,365Development and General


2011


315,000


1,025,189


93,713


10,050


1,443,952Counsel and SecretaryWesley W. Day, Ph.D.


2013


419,664


423,335


100,000


21,779


964,778Vice President, Clinical


2012


404,495


421,724


205,281


17,566


1,049,066Development


2011


354,432


301,527


105,444


13,497


774,900Guy P. Marsh


2013


369,887


931,337


81,000


12,454


1,394,678Vice President, U.S.


2012


340,419


759,101


197,443


17,126


1,314,089Operations and General


2011


326,541


482,442


111,024


10,050


930,057ManagerMichael P. Miller(7)


2013


407,964


762,003





7,553


1,177,520Former Senior Vice President and


2012


394,076


759,101


228,564


7,158


1,388,899Chief Commercial Officer


2011


349,826


328,062


118,941


8,531


805,360Timothy E. Morris(8)


2013


485,006


931,337





1,684,727


3,101,070Former Senior Vice President


2012


433,563


759,101


251,466


23,297


1,467,427Finance and Global


2011


410,963


482,442


139,727


21,412


1,054,544Corporate Developmentand Chief Financial OfficerLee B. Perry(9)


2013


284,560


592,670





1,038,107


1,915,337Former Vice President andChief Accounting OfficerPeter Y. Tam(10)


2013


491,054


1,185,337





2,097,799


3,774,190Former President and Director


2012


545,012


894,053


395,134


12,189


1,846,3882011


501,012


603,052


212,930


16,261


1,333,255Leland F. Wilson(11)


2013


459,355


1,662,907





2,453,237


4,575,499Former Chief Executive Officer


2012


738,000


2,742,717


405,900


11,777


3,898,394and Director


2011


710,000


1,300,998


331,925


18,096


2,361,019Anthony P. Zook(12)


2013


111,359


8,625,680





2,958


8,739,997Former Chief Executive Officerand Director


(1)The
amounts in this column include payments in respect of accrued vacation, holidays and sick days.(2)The
amounts included in the "Option Awards" column do not reflect compensation actually received by the named executive officer but represent the grant date
fair value computed in accordance with FASB ASC Topic 718. The valuation assumptions used in determining such amounts are described in Note 14 to our


24

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Table of Contents

consolidated
financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2013. See also the 2013 Grants of Plan Based Awards table below for
information on option awards made in 2013. (3)The
amounts for fiscal year 2013 in this column consist of cash bonus payments under the Annual Bonus Plan approved by the Compensation Committee in January
2014. Please see "Compensation Discussion and Analysis" above for a description of the Annual Bonus Plan.(4)The
amounts in this column include (i) contributions made by the Company under its 401(k) Plan; (ii) premiums and contributions made by the
Company under its supplemental medical reimbursement coverage plan; (iii) a premium for the long term disability insurance plan on behalf of Mr. Wilson; (iv) severance payments
under Mr. Wilson's employment agreement with the Company and under the Amended and Restated Change of Control and Severance Agreement by and between the Company and Messrs. Morris, Perry
and Tam, effective as of July 1, 2013; (v) reimbursement for lodging expenses in Mountain View, CA; and (vi) excess medical waiver reimbursement, as provided in the table
immediately following the footnotes to the 2013 Summary Compensation Table.(5)Mr. Fischer
became our Chief Executive Officer on September 3, 2013, upon the resignation of Mr. Zook. Compensation shown was earned in
2013 and not annualized.(6)Mr. Sanford
became our interim Chief Financial Officer on November 5, 2013 and our Chief Accounting Officer on December 16, 2013. Prior
to November 5, 2013, Mr. Sanford served as our Corporate Controller during 2013. Compensation shown was earned in 2013 and not annualized.(7)Mr. Miller's
role as Senior Vice President and Chief Commercial Officer ended on January 16, 2014, and his employment terminated with the
Company, effective February 14, 2014.(8)Mr. Morris'
role as Senior Vice President Finance and Global Corporate Development and Chief Financial Officer ended on November 4, 2013, and
his employment terminated with the Company, effective December 31, 2013.(9)Mr. Perry's
role as Vice President and Chief Accounting Officer ended on December 16, 2013, and his employment terminated with the Company,
effective December 31, 2013.(10)Mr. Tam
resigned as President, effective October 12, 2013, in connection with the Settlement Agreement. Compensation shown was earned in 2013
and not annualized. Please see "Certain Relationships and Related Transactions, and Director IndependenceReview, Approval or Ratification of Transactions with Related Parties" for a
description of the Settlement Agreement.(11)Mr. Wilson
resigned as Chief Executive Officer, effective July 19, 2013, in connection with the Settlement Agreement. Compensation shown was
earned in 2013 and not annualized. Please see "Certain Relationships and Related Transactions, and Director IndependenceReview, Approval or Ratification of Transactions with Related
Parties" for a description of the Settlement Agreement.(12)Mr. Zook
was our Chief Executive Officer from July 19, 2013 through September 3, 2013. Compensation shown was earned in 2013 and not
annualized.


25

---



Table of Contents

Name

Year

401(k)
Contributions
($)

Supplemental
Medical
Reimbursement
Coverage Plan ($)

Long Term
Disability
Insurance
Plan
Premium ($)

Severance
Payments ($)

Reimbursement
for Lodging
Expenses in
Mountain View,
CA ($)

Excess Medical
Waiver
Reimbursement
($)Seth H. Z. Fischer


2013


4,333











8,507


3,125Svai S. Sanford


2013


9,800














500John L. Slebir


2013


9,800


7,417











2012


9,800


7,010











2011


9,800


250











Wesley W. Day, Ph.D.


2013


9,800


11,979











2012


9,800


7,766











2011


9,800


3,697











Guy P. Marsh


2013


9,800


2,654











2012


9,800


7,326











2011


9,800


250











Michael P. Miller


2013


7,303


250











2012


6,908


250











2011


6,766


1,765











Timothy E. Morris(a)


2013


9,800


18,297





1,656,630





2012


9,800


13,497











2011


9,800


11,612











Lee B. Perry(b)


2013


9,800


8,964





1,019,343





Peter Y. Tam(c)


2013


9,800


5,872





2,082,127





2012


9,800


2,389











2011


9,800


6,461











Leland F. Wilson(d)


2013


9,800


188


939


2,442,310





2012


9,800


1,038


939








2011


9,800


7,357


939








Anthony P. Zook


2013














2,958





(a)The
amounts in this row include severance payments triggered by the termination of employment following the change of control that occurred on
July 19, 2013, as defined under the Amended and Restated Change of Control and Severance Agreement by and between the Company and Mr. Morris, effective as of July 1, 2013, which
include (i) $910,482, representing 24 months of base salary, as in effect at the time of termination; (ii) $455,241, representing an amount equal to 1/12th of
Mr. Morris' target annual incentive cash bonus for the year in which termination occurred, multiplied by 24; (iii) $227,621, representing a lump sum cash payment equal to the prorated
amount of Mr. Morris' target annual incentive cash bonus for the year in which termination occurred; (iv) $43,286, representing the aggregate cost of premiums for 24 months of
continued group health plan coverage under COBRA; and (v) outplacement services with a total value not to exceed $20,000.(b)The
amounts in this row include severance payments triggered by the termination of employment following the change of control that occurred on
July 19, 2013, as defined under the Amended and Restated Change of Control and Severance Agreement by and between the Company and Mr. Perry, effective as of July 1, 2013, which
include (i) $600,020, representing 24 months of base salary, as in effect at the time of termination; (ii) $240,008, representing an amount equal to 1/12th of
Mr. Perry's target annual incentive cash bonus for the year in which termination occurred, multiplied by 24; (iii) $120,004, representing a lump sum cash payment equal to the prorated
amount of Mr. Perry's target annual incentive cash bonus for the year in which termination occurred; (iv) $39,311, representing the aggregate cost of premiums for 24 months of
continued group health plan coverage under COBRA; and (v) outplacement services with a total value not to exceed $20,000.(c)The
amounts in this row include severance payments triggered by the termination of employment following the change of control that occurred on
July 19, 2013, as defined under the Amended and Restated Change of Control and Severance Agreement by and between the Company and Mr. Tam, effective as of July 1, 2013, which
include (i) $1,155,426, representing 24 months of base salary, as in effect at the time of termination;


26

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Table of Contents

(ii) $635,484,
representing an amount equal to 1/12th of Mr. Tam's target annual incentive cash bonus for the year in which termination occurred, multiplied by 24;
(iii) $238,307, representing a lump sum cash payment equal to the prorated amount of Mr. Tam's target bonus; (iv) $32,910, representing the aggregate cost of premiums for
24 months of continued group health plan coverage under COBRA; and (v) outplacement services with a total value not to exceed $20,000. (d)The
amounts in this row include severance payments triggered by the termination of employment following the change of control on July 19, 2013, as
defined under the employment agreement by and between the Company and Mr. Wilson dated December 20, 2007, as amended on various dates, the most recent being the fourth amendment on
January 25, 2013, which include (i) a lump sum payment of $1,476,000 equal to 24 months of Mr. Wilson's base salary, as in effect at the time of termination; (ii) a
lump sum payment of $885,600 equal to 200% of Mr. Wilson's target annual incentive bonus for the year in which termination occurred; (iii) $60,710, representing the aggregate cost of
premiums for 24 months of continued group health plan coverage under COBRA; and (v) outplacement services with a total value not to exceed $20,000.


27

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Table of Contents

2013 Grants of Plan Based Awards

The following table provides information with regard to each grant of an award made to a named executive officer under any plan during
the fiscal year ended December 31, 2013.

Exercise
or Base
Price of
Option
Awards
($/Sh)(2)Estimated Future Payouts Under
Non-Equity Incentive Plan Awards(1)Number of
Securities
Underlying
Options(#)

Grant Date
Fair Value
of Option
Awards($)Grant
DateName

Threshold($)

Target($)

Maximum($)Seth H. Z. FischerStock Options


9/3/13











1,000,000


12.90


7,991,558Annual Bonus Plan





0


520,000


650,000








Svai S. SanfordStock Options


1/25/13











15,000


12.39


124,657Annual Bonus Plan





0


105,000


131,250








John L. SlebirStock Options


1/25/13











70,000


12.39


592,670Annual Bonus Plan





0


159,515


199,394








Wesley W. Day, Ph.D.Stock Options


1/25/13











50,000


12.39


423,335Annual Bonus Plan





0


167,866


209,832








Guy P. MarshStock Options


1/25/13











110,000


12.39


931,337Annual Bonus Plan





0


184,944


231,179








Michael P. Miller(3)Stock Options


1/25/13











90,000


12.39


762,003Annual Bonus Plan





0


203,935


254,918








Timothy E. Morris(4)Stock Options


1/25/13











110,000


12.39


931,337Annual Bonus Plan





0


227,621


284,526








Lee B. Perry(5)Stock Options


1/25/13











70,000


12.39


592,670Annual Bonus Plan





0


120,004


150,005








Peter Y. Tam(6)Stock Options


1/25/13











140,000


12.39


1,185,337Annual Bonus Plan





0


317,742


397,178








Leland F. Wilson(7)Stock Options


1/25/13











200,000


12.39


1,662,907Annual Bonus Plan





0


442,800


553,500








Anthony P. Zook(8)Stock Options


7/25/13











1,000,000


13.70


8,625,680Annual Bonus Plan























(1)The
row entitled "Annual Bonus Plan" for each respective named executive officer, with the exception of Mr. Zook, in the table above reflects the
threshold, target and maximum value of a cash bonus award to each respective named executive officer in 2013 under the Annual Bonus Plan approved by the Compensation Committee in January 2014. The
cash bonus award amounts actually paid under the Annual Bonus Plan to the named executive officers in 2013 are shown in the Summary Compensation Table for 2013 under the heading "Non-Equity Incentive
Plan Compensation" and under the heading "All Other Compensation" and the accompanying footnotes. Please see "Compensation Discussion and Analysis" above for a description of the Annual Bonus Plan.


28

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Table of Contents

(2)Stock
options are granted at an exercise price equal to the fair market value of the Company's Common Stock, as determined by reference to the closing price
reported by the NASDAQ Global Market on the date of grant.(3)Mr. Miller's
role as Senior Vice President and Chief Commercial Officer ended on January 16, 2014, and his employment terminated with the
Company, effective February 14, 2014. Mr. Miller did not receive a cash bonus award under the Annual Bonus Plan for 2013, as shown in the Summary Compensation Table for 2013 under the
heading "Non-Equity Incentive Plan Compensation."(4)Mr. Morris'
role as Senior Vice President Finance and Global Corporate Development and Chief Financial Officer ended on November 4, 2013, and
his employment terminated with the Company, effective December 31, 2013. Mr. Morris was paid 100% of his target bonus amount for fiscal year 2013 as shown in the Summary Compensation
Table for 2013 under the heading "All Other Compensation" and the accompanying footnote.(5)Mr. Perry's
role as Vice President and Chief Accounting Officer ended on December 16, 2013, and his employment terminated with the Company,
effective December 31, 2013. Mr. Perry was paid 100% of his target bonus amount for fiscal year 2013 as shown in the Summary Compensation Table for 2013 under the heading "All Other
Compensation" and the accompanying footnote.(6)Mr. Tam
resigned as President, effective October 12, 2013, in connection with the Settlement Agreement. Mr. Tam was paid a pro-rata
share representing 75% of his target bonus amount for fiscal year 2013 as shown in the Summary Compensation Table for 2013 under the heading "All Other Compensation" and the accompanying footnote.
Please see "Certain Relationships and Related Transactions, and Director IndependenceReview, Approval or Ratification of Transactions with Related Parties" for a description of the
Settlement Agreement.(7)Mr. Wilson
resigned as Chief Executive Officer, effective July 19, 2013, in connection with the Settlement Agreement. Mr. Wilson was
paid a lump sum payment equal to 200% of his target annual incentive bonus for fiscal year 2013 as shown in the Summary Compensation Table for 2013 under the heading "All Other Compensation" and the
accompanying footnote. Please see "Certain Relationships and Related Transactions, and Director IndependenceReview, Approval or Ratification of Transactions with Related Parties" for a
description of the Settlement Agreement.(8)Mr. Zook
was appointed as Chief Executive Officer on July 22, 2013 in connection with the Settlement Agreement and resigned from the position,
effective September 3, 2013. Mr. Zook was not a participant under the Annual Bonus Plan for 2013. Please see "Certain Relationships and Related Transactions, and Director
IndependenceReview, Approval or Ratification of Transactions with Related Parties" for a description of the Settlement Agreement.


29

---



Table of Contents

Outstanding Equity Awards at Fiscal Year-End

The following table presents certain information concerning the outstanding equity awards held as of December 31, 2013 by each
named executive officer.

Option AwardsNumber of Securities
Underlying Unexercised
Options(#)(1)Option
Exercise
Price($)(2)

Option
Expiration
Date(3)Name

Exercisable

UnexercisableSeth H. Z. Fischer


83,333


916,667


12.90


9/3/2020Svai S. Sanford


12,395


22,605


22.63


9/7/2022


15,000


12.39


1/25/2023John L. Slebir


3,750





6.39


9/4/2019166,250





8.74


1/21/202150,000





12.04


1/27/202270,000





12.39


1/25/2023Wesley W. Day, Ph. D.


100,000





6.05


1/25/2018100,000





4.23


1/23/201940,000





8.91


1/22/202050,000





8.74


1/21/202150,000





12.04


1/27/202250,000





12.39


1/25/2023Guy P. Marsh


15,893





6.05


1/25/201822,918





4.23


1/23/201945,000





8.91


1/22/202080,000





8.74


1/21/202190,000





12.04


1/27/2022110,000





12.39


1/25/2023Michael P. Miller(4)


325,000





10.19


4/30/202054,400





8.74


1/21/202190,000





12.04


1/27/202290,000





12.39


1/25/2023Timothy E. Morris(5)


150,000





6.05


1/25/2018139,346





4.23


1/23/201980,000





8.91


1/22/202080,000





8.74


1/21/202190,000





12.04


1/27/2022110,000





12.39


1/25/2023Lee B. Perry(6)


22,918





4.23


1/23/201919,168





8.91


1/22/202036,459





8.74


1/21/202150,000





12.04


1/27/202270,000





12.39


1/25/2023Peter Y. Tam(7)


41,256





4.25


1/29/2017150,000





6.05


1/25/2018250,000





4.23


1/23/2019200,000





7.90


10/30/2019100,000





8.91


1/22/2020100,000





8.74


1/21/2021106,000





12.04


1/27/2022140,000





12.39


1/25/2023


30

---



Table of Contents

Option AwardsNumber of Securities
Underlying Unexercised
Options(#)(1)Option
Exercise
Price($)(2)

Option
Expiration
Date(3)Name

Exercisable

UnexercisableLeland F. Wilson(8)


341,000





12.04


1/27/2022200,000





12.39


1/25/2023Anthony P. Zook(9)





1,000,000


13.70


7/25/2020


(1)The
stock options outstanding generally vest, subject to the employee's continued service to the Company, with respect to 25% of the options upon the one
year anniversary of the grant date and 1/36th of the remaining options vesting each month thereafter, with full vesting occurring on the fourth anniversary of the date of grant.
The options granted to Mr. Zook would have vested, had he not resigned from the Company, with respect to 1/3rd of the option on the one year anniversary of the grant date
and 1/24th of the remaining options vesting each month thereafter, with full vesting occurring on the third anniversary of the date of grant. Mr. Fischer's option grant
provides for monthly vesting of 1/36th of the total number of options granted, commencing after September 3, 2013, subject to his continued service to the Company.(2)Stock
options are granted at an exercise price equal to the fair market value of our Common Stock, as determined by reference to the closing price reported
by the NASDAQ Global Market on the date of grant.(3)With
the exception of the options granted to Mr. Fischer and Mr. Zook which expire seven years from the date of grant, these options generally
expire 10 years from the date of grant. These expiration dates reflect the original option expiration dates of each option, although the options granted to Messrs. Miller, Morris, Perry,
Tam, Wilson and Zook expire sooner due to the earlier termination of their respective employment with the Company.(4)Mr. Miller's
employment with the Company terminated on February 14, 2014. As a result, all of the vested and unexercised options held by
Mr. Miller expire on February 14, 2015.(5)Mr. Morris'
employment with the Company terminated on December 31, 2013. As a result, all of the vested and unexercised options held by
Mr. Morris expire on December 31, 2014.(6)Mr. Perry's
employment with the Company terminated on December 31, 2013. As a result, all of the vested and unexercised options held by
Mr. Perry expire on December 31, 2014.(7)Mr. Tam's
employment with the Company terminated on October 12, 2013. As a result, all of the vested and unexercised options held by
Mr. Tam expire on October 12, 2014.(8)Mr. Wilson's
employment with the Company terminated on July 19, 2013. As a result, all of the vested and unexercised options held by
Mr. Wilson expire on July 19, 2014.(9)Mr. Zook's
employment with the Company terminated on September 3, 2013. Mr. Zook had no vested options at the time of his resignation.


31

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Table of Contents

2013 Stock Option Exercises

The following table shows the number of shares acquired pursuant to the exercise of stock options by each named executive officer
during the fiscal year ended December 31, 2013 and the aggregate dollar amount realized by the named executive officer upon exercise of the stock option.

Name

Number of Shares
Acquired on
Exercise(#)

Value
Realized on
Exercise($)(1)Timothy E. Morris


10,654


82,217Peter Y. Tam


33,744


192,119Leland F. Wilson


2,095,315


8,990,522


(1)The
aggregate dollar amount realized upon the exercise of a stock option represents the difference between the aggregate market price of the shares of our
Common Stock underlying that stock option on the date of exercise, as determined by reference to the closing price reported by the NASDAQ Global Market on the date of exercise, and the aggregate
exercise price of the option.


Potential Payments Upon Termination or Change of Control for each Named Executive Officer

Based upon a hypothetical triggering date of December 31, 2013, the quantifiable benefits for each named executive officer upon
the occurrence of certain specified events are set forth in the table below.

Executive benefits and payments upon
termination:

Involuntary
termination
not for
cause or by
constructive
termination
not following a
change of
control($)

Benefits
following
a change
of control($)

Involuntary
termination
not for
cause or by
constructive
termination
following a
change of
control($)

Written
Notice of
Non-Renewal
of Employment
Agreement($)

Death or
Disability($)Seth H. Z. Fischer(1)Base salary


325,000





325,000


325,000


Bonus


433,333





433,333


433,333


173,333Medical continuation














Outplacement services(2)














Value of accelerated stock options(3)














Svai S. SanfordBase salary


201,923





201,923





Bonus


140,000





140,000





Medical continuation


45,000





45,000





Outplacement services(2)


10,000





10,000





Value of accelerated stock options(3)














John L. SlebirBase salary


199,394





797,576





Bonus


239,273





478,546





Medical continuation


60,000





60,000





Outplacement services(2)


20,000





20,000





Value of accelerated stock options(4)





477,021











32

---



Table of Contents

Executive benefits and payments upon
termination:

Involuntary
termination
not for
cause or by
constructive
termination
not following a
change of
control($)

Benefits
following
a change
of control($)

Involuntary
termination
not for
cause or by
constructive
termination
following a
change of
control($)

Written
Notice of
Non-Renewal
of Employment
Agreement($)

Death or
Disability($)Wesley W. Day, Ph.D.





Base salary


209,832





839,328





Bonus


251,798





503,597





Medical continuation


60,000





60,000





Outplacement services(2)


20,000





20,000





Value of accelerated stock options(4)





241,980








Guy P. MarshBase salary


184,944





739,774





Bonus


277,415





554,831





Medical continuation


60,000





60,000





Outplacement services(2)


20,000





20,000





Value of accelerated stock options(4)





433,312








Michael P. Miller(5)Base salary


203,935





815,738





Bonus


305,902





611,804





Medical continuation


60,000





60,000





Outplacement services(2)


20,000





20,000





Value of accelerated stock options(4)





606,114








Timothy E. Morris(6)Base salary








910,482





Bonus








682,862





Medical continuation








43,286





Outplacement services(2)








20,000





Value of accelerated stock options(4)





447,197








Lee B. Perry(7)Base salary








600,020





Bonus








360,012





Medical continuation








39,311





Outplacement services(2)








20,000





Value of accelerated stock options(4)





267,571








Peter Y. Tam(8)Base salary








1,155,426





Bonus








873,791





Medical continuation








32,910





Outplacement services(2)








20,000





Value of accelerated stock options(4)





651,527











33

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Table of Contents

Executive benefits and payments upon
termination:

Involuntary
termination
not for
cause or by
constructive
termination
not following a
change of
control($)

Benefits
following
a change
of control($)

Involuntary
termination
not for
cause or by
constructive
termination
following a
change of
control($)

Written
Notice of
Non-Renewal
of Employment
Agreement($)

Death or
Disability($)Leland F. Wilson(1)(9)Base salary








1,476,000





Bonus








885,600





Medical continuation








60,710





Outplacement services(2)








20,000





Value of accelerated stock options(4)





1,264,447








Anthony P. Zook(1)Base salary














Bonus














Medical continuation














Outplacement services(2)














Value of accelerated stock options(3)

















(1)Termination
and change of control benefits for Seth H. Z. Fischer and Leland F. Wilson are set forth in their respective employment agreements. Please see
"Compensation Discussion and AnalysisEmployment Agreements" for details. With respect to Mr. Fischer, if his employment is terminated at any time on or after June 3, 2014
either (i) by the Company other than for Cause, non-renewal or due to his death or Disability or (ii) voluntarily by him for Good Reason, then he will be entitled to receive severance
benefits as follows: (i) $650,000, representing monthly severance payments during the 12 month severance period equal to his monthly base salary immediately prior to employment
termination; (ii) $520,000, representing monthly severance payments during the 12 month severance period equal to 1/12th of his target bonus for the fiscal year in
which the termination occurs; (iii) a lump sum cash payment equal to the prorated amount of his target bonus for the fiscal year in which the termination occurs; and (iv) the unpaid
portion of the annual bonus, if any, relating to any year prior to the calendar year of his termination of employment. Anthony P. Zook, our former Chief Executive Officer, did not have an employment
agreement providing for certain benefits in the event of a termination or change of control.(2)Represents
the aggregate value of reimbursable services from a third party firm. Such services may include, but are not limited to, transition advice,
business coaching and career management advice.(3)Represents
the aggregate value of the acceleration of vesting of the executive's unvested stock options based on the spread between the closing price of our
Common Stock on December 31, 2013 of $9.08 and the exercise price of the stock options. Aggregate intrinsic value represents only the value for those stock options in which the exercise price
of the option is less than the market value of our stock on December 31, 2013.(4)Pursuant
to the terms of the Settlement Agreement, more than a majority of the members of the Company's Board resigned and new members were appointed. The
change in the majority of the members of the Company's Board, effective July 19, 2013, triggered certain "change of control" benefits in accordance with the Amended and Restated Change of
Control and Severance Agreements with certain of the Company's employees; specifically, all unvested stock options held by these employees automatically vested in full and became immediately
exercisable. Accordingly, for Messrs. Slebir, Marsh, Miller, Morris, Perry, Tam, Wilson and Dr. Day, the amounts shown


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represent
the aggregate value of the acceleration of vesting of the executive's unvested stock options based on the spread between the closing price of our Common Stock on July 19, 2013 of
$13.67 and the exercise price of the stock options. Therefore, the aggregate intrinsic value represents only the value for those options in which the exercise price of the option is less than the
market value of our stock on July 19, 2013. Please see "Certain Relationships and Related Transactions, and Director IndependenceReview, Approval or Ratification of Transactions
with Related Parties" for a description of the Settlement Agreement. (5)Mr. Miller's
employment terminated, effective February 14, 2014, for Good Reason within 24 months following a Change of Control under
the Amended and Restated Change of Control and Severance Agreement by and between the Company and Mr. Miller, effective as of July 1, 2013. Actual severance payments triggered by
Mr. Miller's termination include (i) $815,738, representing monthly severance payments during the period from the date of Mr. Miller's termination until the date 24 months
after the effective date of the termination (the "Severance Period") equal to the monthly salary that Mr. Miller was receiving immediately prior to the Change of Control; (ii) $203,935,
representing monthly severance payments during the Severance Period equal to 1/12th of Mr. Miller's target bonus for the fiscal year in which the termination occurred for
each month in which severance payments are made to Mr. Miller pursuant to (i) above; (iii) $43,286, representing potential amounts to be reimbursed to Mr. Miller of the
total applicable premium cost for continued group health plan coverage under for a period of up to 24 months following Mr. Miller's termination of employment; and
(iv) outplacement services with a total value not to exceed $20,000.(6)Mr. Morris'
employment terminated, effective December 31, 2013, for Good Reason within 24 months following a Change of Control under
the Amended and Restated Change of Control and Severance Agreement by and between the Company and Mr. Morris, effective as of July 1, 2013. Actual severance payments triggered by
Mr. Morris' resignation include (i) $910,482, representing monthly severance payments during the period from the date of Mr. Morris' termination until the date 24 months
after the effective date of the termination (the "Severance Period") equal to the monthly salary that Mr. Morris was receiving immediately prior to the Change of Control; (ii) $455,241,
representing monthly severance payments during the Severance Period equal to 1/12th of Mr. Morris' target bonus for the fiscal year in which the termination occurred for
each month in which severance payments are made to Mr. Morris pursuant to (i) above; (iii) $227,621, representing a lump sum cash payment equal to the prorated amount of
Mr. Morris' target bonus for the fiscal year in which the termination occurred, calculated based on the number of months during such fiscal year in which Mr. Morris was employed by the
Company; (iv) $43,286, representing potential amounts to be reimbursed to Mr. Morris of the total applicable premium cost for continued group health plan coverage under COBRA for a
period of up to 24 months following Mr. Morris' termination of employment; and (v) outplacement services with a total value not to exceed $20,000.(7)Mr. Perry's
employment terminated, effective December 31, 2013, for Good Reason within 24 months following a Change of Control under
the Amended and Restated Change of Control and Severance Agreement by and between the Company and Mr. Perry, effective as of July 1, 2013. Actual severance payments triggered by
Mr. Perry's resignation include (i) $600,020, representing monthly severance payments during the period from the date of Mr. Perry's termination until the date 24 months
after the effective date of the termination (the "Severance Period") equal to the monthly salary that Mr. Perry was receiving immediately prior to the Change of Control; (ii) $240,008,
representing monthly severance payments during the Severance Period equal to 1/12th of Mr. Perry's target bonus for the fiscal year in which the termination occurred for
each month in which severance payments are made to Mr. Perry pursuant to (i) above; (iii) $120,004, representing a lump sum cash payment equal to the prorated amount of
Mr. Perry's


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target
bonus for the fiscal year in which the termination occurred, calculated based on the number of months during such fiscal year in which Mr. Perry was employed by the Company;
(iv) $39,311, representing potential amounts to be reimbursed to Mr. Perry of the total applicable premium cost for
continued group health plan coverage under COBRA for a period of up to 24 months following Mr. Perry's termination of employment; and (v) outplacement services with a total value
not to exceed $20,000. (8)Mr. Tam
tendered his resignation, effective October 12, 2013, in connection with the Settlement Agreement and for Good Reason within
24 months following a Change of Control under the Amended and Restated Change of Control and Severance Agreement by and between the Company and Mr. Tam, effective as of July 1,
2013. Actual severance payments triggered by Mr. Tam's resignation include (i) $1,155,426, representing monthly severance payments during the period from the date of Mr. Tam's
termination until the date 24 months after the effective date of the termination (the "Severance Period") equal to the monthly salary that Mr. Tam was receiving immediately prior to the
Change of Control; (ii) $635,484, representing monthly severance payments during the Severance Period equal to 1/12th of Mr. Tam's target bonus for the fiscal year
in which the termination occurs for each month in which severance payments are made to Mr. Tam pursuant to (i) above; (iii) $238,307, representing a lump sum cash payment equal to
the prorated amount of Mr. Tam's target bonus for the fiscal year in which the termination occurs, calculated based on the number of months during such fiscal year in which Mr. Tam was
employed by the Company; (iv) $32,910, representing potential amounts to be reimbursed to Mr. Tam of the total applicable premium cost for continued group health plan coverage under
COBRA for a period of up to 24 months following Mr. Tam's termination of employment; and (v) outplacement services with a total value not to exceed $20,000. Please see "Certain
Relationships and Related Transactions, and Director IndependenceReview, Approval or Ratification of Transactions with Related Parties" for a description of the Settlement Agreement.(9)Mr. Wilson
tendered his resignation, effective July 19, 2013, in connection with the Settlement Agreement. The termination of
Mr. Wilson's employment in accordance with the Settlement Agreement was deemed, and treated in all respects as, a termination without Cause under Mr. Wilson's employment agreement.
Actual severance payments triggered by the Change of Control included (i) a lump sum payment of $1,476,000 equal to 24 months of Mr. Wilson's base salary, as in effect at the time
of termination; (ii) a lump sum payment of $885,600 equal to 200% of Mr. Wilson's target annual incentive bonus for the year in which termination occurred; (iii) $60,710,
representing potential amounts to be reimbursed to Mr. Wilson of the total applicable premium cost for continued group health plan coverage under COBRA for a period of up to 24 months
following Mr. Wilson's termination of employment; and (iv) outplacement services with a total value not to exceed $20,000. Please see "Certain Relationships and Related Transactions, and
Director IndependenceReview, Approval or Ratification of Transactions with Related Parties" for a description of the Settlement Agreement.


The
Compensation Committee believes that providing the Company's named executive officers protection against a termination of employment by the Company without cause or by a named
executive officer for good reason is consistent with competitive practices and will help retain the Company's named executive officers and maintain leadership stability.

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The Compensation Committee also believes that providing our named executive officers with benefits upon a change of control is in the best interests of our
stockholders because change of control benefits help reduce the potential reluctance of our named executive officers to pursue certain change of control transactions that create employment
uncertainty. The change of control benefits are designed to help retain the Company's named executive officers and maintain a stable work environment by automatically vesting all equity awards held by
the named executive officers immediately upon a change of control and providing certain other benefits in the event their employment is terminated without cause or within 24 months following a
change of control for the other named executive officers. Benefits upon a change of control, other than automatic vesting of all equity awards, are provided only upon a "double-trigger" basis, which
means that there must be both a change of control of the Company and a termination of the named executive officer's employment.

Because
of the so-called "parachute" tax imposed by the Internal Revenue Code Section 280G, we limit the change of control benefits of our named executive officers such that no
taxes will be imposed under Section 280G. For our named executive officers, we have agreed that their severance benefits will be either (i) delivered in full, or (ii) delivered as
to such lesser extent which would result in no portion of such severance benefits being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into
account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by the named executive officer on an after-tax basis of the
greatest amount of severance benefits, notwithstanding that all or some portion of such severance benefits may be taxable under Section 4999 of the Code.

Termination and Change of Control Benefits for our Chief Executive Officer and Former Chief Executive Officers

A description of the termination and change of control benefits for our Chief Executive Officer and former Chief Executive Officers is
set forth in the section entitled "Compensation Discussion and AnalysisEmployment Agreements."

Termination and Change in Control Benefits for our Interim Chief Financial Officer

In July 2013, we entered into Participation Agreements to the VIVUS, Inc. Change in Control Severance Plan and Summary Plan
Description, or the Change in Control Plan, with our employees, excluding employees who were also executive officers. On July 10, 2013, Svai S. Sanford entered into a Participation Agreement
with respect to the Change in Control Plan, as Mr. Sanford was not an executive officer at that time. Mr. Sanford remains eligible for termination and change in control benefits under
the Change in Control Plan.

Pursuant
to the Change in Control Plan, in the event the Company terminates Mr. Sanford's employment other than for Cause (as defined in the Change in Control Plan), or if
Mr. Sanford terminates his employment for Good Reason (as defined in the Change in Control Plan), within 12 months following a Change in Control (as defined in the Change in Control
Plan), Mr. Sanford will be entitled to the sum of (i) six months base salary, (ii) four weeks of his base salary multiplied by the numbers of years of employment with the Company
and (iii) a prorated target bonus; provided that the aggregate severance payment cannot exceed 24 months of Mr. Sanford's base salary. Mr. Sanford will also be entitled to
(i) 18 months of reimbursement for the expenses of continued COBRA coverage, (ii) outplacement assistance in an amount not to exceed $10,000 and (iii) all of the
outstanding equity awards held by Mr. Sanford will automatically vest. Additionally, in the event Mr. Sanford is terminated by the Company without Cause in the absence of a Change in
Control, Mr. Sanford will receive the benefits listed above, but in lieu of (iii) of the preceding sentence, Mr. Sanford's outstanding options will vest through his termination
date as if such awards had vested on a monthly schedule through the date of termination.

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For
purposes of the Change in Control Plan, a "Change in Control" occurs when:



Termination and Change of Control Benefits for our Other Named Executive Officers

On July 5, 2013, we entered into an Amended and Restated Change of Control and Severance Agreement, effective July 1,
2013, with each of our executive officers, other than Messrs. Fischer, Sanford, Wilson and Zook, that provide for certain benefits in the event of a termination or change of control. A
description of the termination and change of control benefits for these named executive officers, to whom we refer in this section as executive officers, is provided below.

The
Amended and Restated Change of Control and Severance Agreements provide that if an executive officer's employment with the Company is terminated without Cause or by the executive
officer for Good Reason and the termination does not occur within 24 months after a Change of Control (as such terms are defined in the Amended and Restated Change of Control and Severance
Agreements) of the Company, the executive officer will receive, subject to signing a release of claims in favor of the Company, (i) monthly severance payments during the period from the date of
the executive officer's termination until the date that is six months after the effective date of termination or, for purposes of this paragraph only, the Six Month Severance Period, equal to the
monthly salary the executive officer was receiving immediately prior to the termination date; (ii) monthly severance payments during the Six Month Severance Period equal to
1/12th of the executive officer's target bonus for the fiscal year in which the termination occurs for each month in which severance payments are made to the executive officer
pursuant to (i) above; (iii) an additional pro-rated portion of the executive officer's target bonus; (iv) up to 24 months of reimbursement for premiums paid for COBRA
coverage; (v) accelerated vesting of the executive officer's then-outstanding and unvested equity awards, to the extent that any of the then-unvested and outstanding shares of the Company's
Common Stock subject to such equity awards otherwise would have vested through the date of the executive officer's termination of employment with the Company, had each such equity award been subject
to a monthly vesting schedule; and (v) outplacement services with a total value not to exceed $20,000, to be provided during the Six Month Severance Period.

The
Amended and Restated Change of Control and Severance Agreements also provide that if an executive officer's employment with the Company is terminated by the Company without Cause or
by

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the
executive officer for Good Reason within 24 months after a Change of Control of the Company, the executive officer will receive, subject to signing a release of claims in favor of the
Company, (i) monthly severance payments during the period from the date of the executive officer's termination until the date 24 months after the effective date of the termination, or
for purposes of this paragraph only, the 24 Month Severance Period, equal to the monthly salary the executive officer was receiving immediately prior to the change of control; (ii) monthly
severance payments during the 24 Month Severance Period equal to 1/12th of the executive officer's target bonus (as such term is defined in the Amended and Restated Change of
Control and Severance Agreements) for the fiscal year in which the termination occurs for each month in which severance payments are made to the executive officer pursuant to (i) above;
(iii) an additional pro-rated portion of the executive officer's target bonus; (iv) up to 24 months of reimbursement for premiums paid for COBRA coverage; and
(v) outplacement services with a total value not to exceed $20,000. The Amended and Restated Change of Control and Severance Agreements for our executive officers also provide for the automatic
vesting in full of all outstanding stock options held by the executive officers upon the close of a Change of Control.

Under
such agreements, a "Change of Control" occurs when:



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Director Compensation

The following table sets forth the compensation paid by us during the fiscal year ended December 31, 2013 to our non-employee
directors:

Name

Year

Fees Earned
or Paid in
Cash($)(1)

Stock
Awards($)(2)(3)

Option
Awards($)(4)(5)

Total($)Michael J. Astrue(6)(7)


2013


32,500





197,628


230,128J. Martin Carroll(6)(7)


2013


50,351


260,900





311,251Samuel F. Colin, M.D.(6)(7)


2013


26,000





197,628


223,628Alexander J. Denner, Ph.D.(6)(7)


2013


20,000





197,628


217,628Johannes J.P. Kastelein, M.D., Ph.D.(6)(7)


2013


20,000





197,628


217,628Mark B. Logan(6)(7)


2013


85,039


261,739


48,092


394,870David Y. Norton(6)(7)


2013


23,750





197,628


221,378Jorge Plutzky, M.D.(6)(7)


2013


50,351


259,200





309,551Herman Rosenman(6)(7)


2013


27,500





197,628


225,128Robert N. Wilson(6)


2013


50,351


258,200





308,551Charles J. Casamento(6)(7)


2013


88,800


261,739





350,539Ernest Mario, Ph.D.(6)(7)


2013


92,550


261,739





354,289Linda M. Dairiki Shortliffe, M.D.(6)(7)


2013


76,050


261,739





337,789


(1)From
January 1, 2013 to July 18, 2013, the cash compensation arrangement for non-employee directors was as follows, with all annual retainers
paid in equal quarterly installments: (i) non-employee directors received $101,400 per annum; (ii) the Chairman of the Audit Committee received an additional $22,000 per annum; and
(iii) each of the Chairman of the Board of Directors and Chairman of the Compensation Committee received an additional $17,000 per annum. Since July 19, 2013, the cash compensation
arrangement for non-employee directors has been significantly modified as follows, with all annual retainers paid in equal quarterly installments: (i) non-employee directors receive $40,000 per
annum; (ii) the Chairman of the Board receives an additional $25,000 per annum; (iii) the Chairman of the Audit Committee receives an additional $15,000 per annum; (iii) the
Chairman of the Compensation Committee receives an additional $12,000 per annum; and (iv) the Chairman of the Nominating and Governance Committee receives an additional $7,500 per annum.(2)The
amounts included in the "Stock Awards" column do not reflect compensation actually received by the non-employee directors but represent the grant date
fair value computed in accordance with FASB ASC Topic 718. The valuation assumptions used in determining such amounts are described in Note 14 to our consolidated financial statements included
in our Annual Report on Form 10-K for the year ended December 31, 2013.(3)On
January 25, 2013, each then serving non-employee director, namely Messrs. Casamento and Logan and Drs. Mario and Shortliffe, received
21,125 restricted stock units, or RSUs. Such RSUs would have vested 100% on the one year anniversary of the date of grant had such non-employee directors continued service to the Company on such date.
Messrs. Carroll and Wilson and Dr. Plutzky each received 20,000 RSUs, effective upon their appointment to the Board. Such RSUs vest as to 1/4th of the RSUs on each
anniversary date of grant over a period of four years so long as the non-employee director continued service to the Company on such dates. On August 14, 2013, the Board approved that vesting
under all outstanding RSUs for Messrs. Carroll, Logan and Wilson and Dr. Plutzky would be accelerated on a pro rata basis from the vesting commencement dates under such grants through
July 18, 2013; any unvested RSUs under such grants were canceled effective August 14, 2013 and returned to the Company's 2010 Equity Incentive Plan. Consistent with the guidance in FASB
ASC Topic 718, the modification of the terms and


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conditions
of these equity awards were treated as an exchange of the original awards for new awards and the total compensation cost of the modified awards is at least equal to the fair value of the
original awards at the grant date, as on the date of modification the performance conditions of the original awards were expected to be satisfied. At fiscal year end, there were no RSUs outstanding
for our non-employee directors. (4)The
amounts included in the "Option Awards" column do not reflect compensation actually received by the non-employee directors but represent the grant date
fair value computed in accordance with FASB ASC Topic 718. The valuation assumptions used in determining such amounts are described in Note 14 to our consolidated financial statements included
in our Annual Report on Form 10-K for the year ended December 31, 2013.(5)On
August 14, 2013, each then serving non-employee director, namely Messrs. Astrue, Carroll, Logan, Norton, Rosenman and Wilson and Drs.
Colin, Denner, Kastelein and Plutzky, received a stock option grant to purchase 25,000 shares of Common Stock. Such stock options vest monthly over three years commencing on July 19, 2013 and
will continue to vest so long as the non-employee director continued service to the Company on such dates. The fair value of these awards for Messrs. Carroll, Logan, Wilson and
Dr. Plutzky is in the column titled "Stock Awards" as these stock option grants were actually modifications of the original RSUs granted as per footnote (3) above. In addition, the
modification of these awards resulted in an increase in fair value for Mr. Logan's original grant, which amount is included in this column. There was no resulting increase in fair value for the
modification of Messrs. Carroll, Wilson and Dr. Plutzky's original RSU grants. As of December 31, 2013, the aggregate number of stock options outstanding for each non-employee
director was as follows:


Name

Stock options
outstanding
at 12/31/13Michael J. Astrue


25,000J. Martin Carroll


25,000Samuel F. Colin, M.D.


25,000Alexander J. Denner, Ph.D.


25,000Johannes J.P. Kastelein, M.D., Ph.D.


25,000Mark B. Logan


149,000David Y. Norton


25,000Jorge Plutzky, M.D.


25,000Herman Rosenman


25,000Robert N. Wilson


25,000Charles J. Casamento


25,000Ernest Mario, Ph.D.


Linda M. Dairiki Shortliffe, M.D.


106,000


(6)Mr. Logan
has served as a director of the Company since March 1999, Mr. Wilson has served as a director of the Company since April 2013, and
Mr. Carroll and Dr. Plutzky have served as directors of the Company since May 2013. Messrs. Astrue, Norton and Rosenman and Drs. Colin, Denner and Kastelein have served as
directors of the Company since July 19, 2013. Mr. Casamento and Drs. Mario and Shortliffe served as directors of the Company from April 2008, April 2012 and June 1999, respectively, to
July 19, 2013.(7)From
January 1, 2013 to July 19, 2013, (i) the Audit Committee consisted of Mr. Casamento and Logan and Dr. Mario, with
Dr. Mario designated as the Chair of the Audit Committee; (ii) the Compensation Committee consisted of Mr. Casamento and Drs. Mario and Shortliffe, with Mr. Casamento
designated as the Chair of the Compensation Committee; and (iii) the Nominating


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and
Governance Committee consisted of Messrs. Casamento and Logan and Dr. Shortliffe, with Dr. Shortliffe designated as the Chair of the Nominating and Governance Committee. From
July 19, 2013 to July 25, 2013, Mr. Logan remained a member of the Audit Committee and the Nominating and Governance Committee. Since July 25, 2013, (i) the Audit
Committee has consisted of Messrs. Carroll, Logan and Rosenman, with Mr. Rosenman designated as the Chair of the Audit Committee; (ii) the Compensation Committee has consisted of
Dr. Colin and Messrs. Carroll, Norton, Rosenman and Wilson, with Dr. Colin designated as the Chair of the Compensation Committee; and (iii) the Nominating and Governance
Committee has consisted of Drs. Colin, Denner and Plutzky and Messrs. Astrue and Norton, with Mr. Norton designated as the Chair of the Nominating and Governance
Committee. From January 1, 2013 to July 22, 2013, Mr. Logan served as the Chairman of the Board of Directors. Mr. Astrue has served as the Chairman of the Board of
Directors since July 22, 2013.




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Compensation Committee Report



COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORSSamuel F. Colin, M.D., Chairman
J. Martin Carroll
David Y. Norton
Herman Rosenman
Robert N. Wilson


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Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters

Equity Compensation Plan Information

Information about our equity compensation plans at December 31, 2013, that were approved by our stockholders was as follows:

Plan Category

Number of Shares
to be issued Upon
Exercise of Outstanding
Options and Rights(a)

Weighted Average
Exercise Price of
Outstanding
Options

Number of Shares
Remaining
Available for
Future Issuance(c)Equity compensation plans approved by stockholders


8,581,451

$
12.14


2,474,918Equity compensation plans not approved by stockholders(b)


325,000

$
10.19


​
​
​
​
​
​
​
​
​
​
​Total


8,906,451

$
12.07


2,474,918​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


(a)Consists
of two plans: our 2001 Stock Option Plan and our 2010 Equity Incentive Plan.(b)On
April 30, 2010, the Company's Board granted an option to purchase 400,000 shares of the Company's Common Stock, or the Inducement Grant, to
Michael P. Miller, the Company's former Senior Vice President and Chief Commercial Officer. The Inducement Grant was granted outside of the Company's 2010 Equity Incentive Plan and without stockholder
approval pursuant to NASDAQ Listing Rule 5635(c)(4) and is subject to the terms and conditions of the Stand-Alone Stock Option Agreement between the Company and Mr. Miller.(c)Includes
1,976,823 shares for the 2010 Equity Incentive Plan and 498,095 shares for the 1994 Employee Stock Purchase Plan.


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information known to us with respect to beneficial ownership of our Common Stock as of
April 14, 2014 by (i) each person or entity who is known by us to own beneficially more than 5% of our Common Stock; (ii) each of our directors; (iii) each of our named
executive officers, as specified in the "Compensation Discussion and Analysis" section of this Amendment; and (iv) all directors and executive officers as a group. Unless otherwise noted, the

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address
of the persons or entities shown in the table is 351 East Evelyn Avenue, Mountain View, California, 94041.

Beneficially Owned Stock(1)Name

Number of Shares

Percent5% HoldersFirst Manhattan Co.(2)


9,953,844


9.6
%BlackRock, Inc.(3)


7,560,931


7.3
%QVT Financial LP(4)


6,517,748


6.3
%Passport Capital, LLC(5)


6,194,216


6.0
%The Vanguard Group(6)


5,509,408


5.3
%Non-Employee DirectorsMichael J. Astrue(7)


16,944


*J. Martin Carroll(8)


7,930


*Samuel F. Colin, M.D.(9)


3,255,744


3.2
%Alexander J. Denner, Ph.D.(10)


2,580,887


2.5
%Johannes J.P. Kastelein, M.D., Ph.D.(11)


6,944


*Mark B. Logan(12)


194,130


*David Y. Norton(13)


8,444


*Jorge Plutzky, M.D.(14)


7,917


*Herman Rosenman(15)


11,944


*Robert N. Wilson(16)


13,745


*Named Executive Officers(Current Executive Officers)Seth H. Z. Fischer(17)


253,079


*Svai S. Sanford(18)


25,418


*John L. Slebir(19)


297,048


*Wesley W. Day, Ph.D.(20)


391,052


*Guy P. Marsh(21)


369,043


*Named Executive Officers(Former Executive Officers)Michael P. Miller(22)


559,400


*Timothy E. Morris(23)


649,346


*Lee B. Perry(24)


198,545


*Peter Y. Tam(25)


1,068,099


1.0
%Leland F. Wilson(26)


737,235


*Anthony P. Zook





*All directors and executive officers as a group (21 persons)(27)


10,652,894


9.9
%


*Less
than 1%(1)Applicable
percentage ownership is based on 103,314,461 shares of Common Stock as of April 14, 2014. Beneficial ownership is determined in accordance
with SEC rules. In computing the number of shares beneficially owned by a person and the percentage of ownership of that person, shares of Common Stock subject to options held by that person that will
be vested and exercisable within 60 days of April 14, 2014 are deemed outstanding. Those shares, however, are not deemed outstanding for the purpose of computing the percentage ownership
of any other person. The persons named in this table have sole voting and investment power with respect to all shares of Common Stock


46

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shown
as beneficially owned by them, subject to community property laws, where applicable, and except as indicated in the other footnotes to this table. (2)First
Manhattan Co. ("First Manhattan") holds sole voting and dispositive power as to 6,830,475 shares of Common Stock, shares voting power as to
2,600,314 shares of Common Stock, and shares dispositive power as to 3,123,369 shares of Common Stock. Beneficial Ownership information is based on a Schedule 13G/A filed with the SEC on
February 12, 2014. The address of First Manhattan is 399 Park Avenue, New York, New York 10022.(3)BlackRock, Inc.
and its affiliates (together "BlackRock") have sole voting power as to 7,259,917 shares of Common Stock and sole dispositive power as
to 7,560,931 shares of Common Stock. Beneficial ownership information is based on a Schedule 13G/A filed with the SEC on January 31, 2014. The address of BlackRock is 40 East
52nd Street, New York, NY 10022.(4)Consists
of 6,517,748 shares of Common Stock as to which QVT Financial LP ("QVT Financial") and its affiliates have shared voting and dispositive
power. Beneficial ownership information is based on a Schedule 13G/A filed with the SEC on February 14, 2014. The address of QVT Financial is 1177 Avenue of the Americas,
9th Floor, New York, New York 10036.(5)Consists
of 6,194,216 shares of Common Stock as to which Passport Capital, LLC ("Passport Capital") and its affiliates have shared voting and
dispositive power. Beneficial ownership information is based on a Schedule 13G/A filed with the SEC on February 12, 2014. The address of Passport Capital is c/o Passport
Capital, LLC, One Market Street, Steuart Tower, Suite 2200, San Francisco, California 94105.(6)The
Vanguard Group and its affiliates (together "Vanguard") have sole voting power as to 145,492 shares of Common Stock, sole dispositive power as to
5,369,316 shares of Common Stock and shared dispositive power as to 140,092 shares of Common Stock. Beneficial ownership information is based on a Schedule 13G/A filed with the SEC on
February 12, 2014. The address of Vanguard is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355.(7)Consists
of (i) 10,000 shares of Common Stock and (ii) 6,944 options to purchase shares of Common Stock vested and exercisable within
60 days of April 14, 2014.(8)Consists
of (i) 986 shares of Common Stock and (ii) 6,944 options to purchase shares of Common Stock vested and exercisable within
60 days of April 14, 2014.(9)Consists
of (i) 6,944 options to purchase shares of Common Stock vested and exercisable within 60 days of April 14, 2014;
(ii) 500,000 shares of Common Stock held in Dr. Colin's personal account; (iii) 42,000 shares of Common Stock held in a trust established for the benefit of Dr. Colin's
family members; and (iv) 2,706,800 shares of Common Stock Dr. Colin is deemed to beneficially own by virtue of his status as a managing member of the sole general partner of First
Manhattan. Dr. Colin expressly disclaims beneficial ownership of such 2,706,800 shares of Common Stock.(10)Consists
of (i) 6,944 options to purchase shares of Common Stock vested and exercisable within 60 days of April 14, 2014;
(ii) 1,033,438 shares of Common Stock directly beneficially owned by Sarissa Capital Offshore Master Fund LP, a Cayman Islands limited partnership ("Sarissa Offshore"); and
(iii) 1,540,505 shares of Common Stock directly beneficially owned by Sarissa Capital Domestic Fund LP, a Delaware limited partnership ("Sarissa Domestic," and, together with Sarissa
Offshore, the "Sarissa Funds"). By virtue


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of
his status as (a) the Chief Investment Officer of Sarissa Capital Management LP, a Delaware limited partnership ("Sarissa Capital"), the investment advisor to the Sarissa Funds, and
(b) the managing member of Sarissa Capital Management GP LLC, a Delaware limited liability company, the general partner of Sarissa Capital, Dr. Denner, is deemed to
beneficially own all such shares of Common Stock owned by the Sarissa Funds. Dr. Denner disclaims beneficial ownership of such shares of Common Stock owned by the Sarissa Funds. (11)Consists
of 6,944 options to purchase shares of Common Stock vested and exercisable within 60 days of April 14, 2014.(12)Consists
of (i) 63,186 shares of Common Stock and (ii) 130,944 options to purchase shares of Common Stock vested and exercisable within
60 days of April 14, 2014.(13)Consists
of (i) 1,500 shares of Common Stock and (ii) 6,944 options to purchase shares of Common Stock vested and exercisable within
60 days of April 14, 2014.(14)Consists
of (i) 973 shares of Common Stock and (ii) 6,944 options to purchase shares of Common Stock vested and exercisable within
60 days of April 14, 2014.(15)Consists
of (i) 6,944 options to purchase shares of Common Stock vested and exercisable within 60 days of April 14, 2014 and
(ii) 5,000 shares of Common Stock Mr. Rosenman is deemed to beneficially own that are held in an Individual Retirement Account for the benefit of Mr. Rosenman.(16)Consists
of (i) 6,801 shares of Common Stock and (ii) 6,944 options to purchase shares of Common Stock vested and exercisable within
60 days of April 14, 2014.(17)Consists
of (i) 3,080 shares of Common Stock and (ii) 249,999 options to purchase shares of Common Stock vested and exercisable within
60 days of April 14, 2014.(18)Consists
of (i) 3,649 shares of Common Stock and (ii) 21,769 options to purchase shares of Common Stock vested and exercisable within
60 days of April 14, 2014.(19)Consists
of (i) 7,048 shares of Common Stock and (ii) 290,000 options to purchase shares of Common Stock vested and exercisable within
60 days of April 14, 2014.(20)Consists
of (i) 1,052 shares of Common Stock and (ii) 390,000 options to purchase shares of Common Stock vested and exercisable within
60 days of April 14, 2014.(21)Consists
of (i) 5,232 shares of Common Stock and (ii) 363,811 options to purchase shares of Common Stock vested and exercisable within
60 days of April 14, 2014.(22)Consists
of 559,400 options to purchase shares of Common Stock vested and exercisable within 60 days of April 14, 2014.(23)Consists
of 649,346 options to purchase shares of Common Stock vested and exercisable within 60 days of April 14, 2014.(24)Consists
of 198,545 options to purchase shares of Common Stock vested and exercisable within 60 days of April 14, 2014.(25)Consists
of (i) 29,099 shares of Common Stock and (ii) 1,039,000 options to purchase shares of Common Stock vested and exercisable within
60 days of April 14, 2014.(26)Consists
of (i) 196,235 shares of Common Stock and (ii) 541,000 options to purchase shares of Common Stock vested and exercisable within
60 days of April 14, 2014.(27)Consists
of 4,496,310 options to purchase shares of Common Stock vested and exercisable within 60 days of April 14, 2014.


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Item 13.Certain Relationships and Related Transactions, and Director
Independence

Change of Control Agreements with Executive Officers

Our current executive officers, excluding our Chief Executive Officer and interim Chief Financial Officer, have Amended and Restated
Change of Control and Severance Agreements that provide for certain benefits in the event of a Change of Control. In addition, our Chief Executive Officer's employment agreement (see "Compensation and
Discussion AnalysisEmployment Agreements") provides for certain benefits in the event of a Change of Control, and our interim Chief Financial Officer's Participation Agreement to the
Change of Control Plan provides for certain benefits in the event of a Change in Control (see "Executive CompensationPotential Payments Upon Change of Control for Each Named Executive
OfficerTermination and Change in Control Benefits for our Interim Chief Financial Officer). Our former executive officers, excluding our former Chief Executive Officers, entered into
Amended and Restated Change of Control and Severance Agreements, which provided for certain benefits in the event of a Change of Control (see "Potential Payments Upon Termination or Change of Control
for each Named Executive Officer"). Leland F. Wilson, our former Chief Executive Officer, had an employment agreement (see "Compensation and Discussion AnalysisEmployment Agreements"),
which provided for certain benefits in the event of a Change of Control (see "Potential Payments Upon Termination or Change of Control for each Named Executive Officer"), and Anthony P. Zook, our
former Chief Executive Officer, did not have an employment agreement providing for certain benefits in the event of a termination or change of control.

The
above referenced agreements recognized that there may be periods where another company, entity or individual considers the possibility of acquiring the Company or that a change in
our Board may otherwise occur (collectively known as a Change of Control), with or without the approval of our Board. These agreements recognized that such an event may cause a distraction to
employees, which may in turn cause employees to consider alternative employment opportunities. The Board determined that it was in the best interest of the Company to give such employees an incentive
to continue their employment during periods where the threat or occurrence of a Change of Control may exist. These agreements are discussed in more detail in the section under "Compensation and
Discussion AnalysisEmployment Agreements" on page 18 of this Amendment and "Potential Payments Upon Termination or Change of Control for each Named Executive Officer" on
page 32 of this Amendment.

Indemnification Agreements

We have entered into indemnification agreements with each of our directors and executive officers. These agreements require us to
indemnify such individuals, to the fullest extent permitted by Delaware law, for certain liabilities to which they may become subject as a result of their affiliation with us.

Review, Approval or Ratification of Transactions with Related Parties

We, or one of our subsidiaries, may occasionally enter into transactions with certain "related parties." Related parties include our
executive officers, directors, nominees for directors, or 5% or more beneficial owners of our Common Stock and immediate family members of these persons. We refer to transactions in which the related
party has a direct or indirect material interest as "related party transactions." Each related party transaction must follow the procedures set forth in the Company's Code of Business Conduct and
Ethics and be reviewed and approved by the Audit Committee prior to the entering into of such transaction.

The
Audit Committee considers all relevant factors when determining whether to approve a related party transaction including, without limitation, the
following:



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On July 18, 2013, we entered into a settlement agreement, or the Settlement Agreement, with First Manhattan Co., or First
Manhattan, terminating First Manhattan's proxy contest with respect to the election of directors at our 2013 annual meeting of stockholders (the "2013 Annual Meeting").

Pursuant
to the Settlement Agreement, we agreed, among other things, (i) to amend our Amended and Restated Bylaws to increase the size of our Board to comprise a total of eleven
members, (ii) to reconstitute the Board, with the following individuals: Michael J. Astrue, J. Martin Carroll, Samuel F. Colin, M.D., Alexander J. Denner, Ph.D.,
Johannes J.P. Kastelein, M.D, Ph.D., Mark B. Logan, David Y. Norton, Jorge Plutzky, M.D., Herman Rosenman and Robert N. Wilson, and (iii) to amend the Amended
and Restated Bylaws to authorize the Board to adjourn the 2013 Annual Meeting. In connection with the Settlement Agreement, each of Charles J. Casamento, Ernest Mario, Ph.D., Linda M.
Dairiki Shortliffe, M.D., Peter Y. Tam and Leland F. Wilson resigned from our Board, effective July 19, 2013.

Also
in connection with the Settlement Agreement, Mr. Wilson resigned as our Chief Executive Officer, effective July 19, 2013. In his place, the reconstituted Board
appointed Anthony P. Zook to serve as Chief Executive Officer and as a new director to our Board. Mr. Zook resigned from the position of Chief Executive Officer and as a director effective as
of September 3, 2013. In connection with the Settlement Agreement, we reimbursed approximately $2.9 million in expenses incurred by First Manhattan. Dr. Colin, one of our current
directors, was appointed to our Board in connection with the Settlement Agreement and is Senior Managing Director at First Manhattan.

Board Independence

As required under the applicable listing standards of the NASDAQ Global Market, a listed company's board of directors must
affirmatively determine that a majority of its directors are "independent," as defined by such listing standards. That definition includes a series of objective tests, including that the director is
not an employee of the company and has not engaged in various types of business dealings with the company. Additionally, the board of directors must make a subjective determination as to each director
that no relationship exists that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Consistent with these requirements, our Board has
determined that ten of our eleven directors each satisfy the director independence standards of the NASDAQ Global Market. Our Board has also determined that Seth H. Z. Fischer,
our Chief Executive Officer, is not independent by virtue of his employment with the Company. Mr. Fischer is not a member of the committees of our Board, and our Board committees are comprised
of only independent directors.

Item 14.Principal Accounting Fees and Services

Principal Accountant Fees and Services

The Audit Committee engaged OUM & Co. LLP, or OUM, as our independent registered public accounting firm beginning
with the fiscal year ended December 31, 2005. The following table presents fees for professional services rendered by OUM for the audit of our annual financial statements for

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fiscal
years 2013 and 2012 and fees billed for audit-related services, tax services and all other services rendered by OUM for these periods:

2013

2012Audit Fees(1)

$
391,051

$
389,937Audit Related Fees(2)





Tax Fees(3)





All Other Fees(4)


62,963


43,893​
​
​
​
​
​
​
​Total Fees

$
454,014

$
433,830​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​


(1)Audit Fees:This category consists of fees for the audit of our annual financial statements, review of the
financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the independent auditors in connection with regulatory filings or engagements, and
for attestation services related to Sarbanes-Oxley compliance for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit
or the review of interim financial statements.(2)Audit-Related Fees:There were no audit-related fees billed by OUM during these periods.(3)Tax Fees:There were no tax fees billed by OUM during these periods.(4)All Other Fees:This category consists of fees incurred for work related to the 2013 offering of our
Convertible Senior Notes due May 1, 2020 and the 2012 offering of our Common Stock.


Pre-Approval Policy and Procedures

The Audit Committee reviews and pre-approves all audit and non-audit services that may be provided by the independent registered public
accounting firm, or Independent Auditor, during a specified period without the need to obtain specific pre-approval from the Audit Committee. The Independent Auditor provides an annual engagement
letter to the Audit Committee with a reasonably detailed description of class of services proposed to be provided by the Independent Auditor during the period covered by the engagement letter and
related estimated fees, and the Audit Committee pre-approves such engagement letter as appropriate. By approval of the engagement letter, the services in that engagement letter will have specific
pre-approval. The services may include audit, audit-related, tax and all other services, and such service or class of services is subject to the pre-approved limit. Pre-approval is generally provided
for up to one year, and the Audit Committee may periodically revise the amount and/or list of services that have received class pre-approval as necessary. Once such services have been rendered by the
Independent Auditor and approved by the Audit Committee, the pre-approved limits of the annual engagement letter are re-established. If it is anticipated that the service will exceed the annual
pre-approved limits, prior to commencing the audit or other permitted non-audit service, the Audit Committee will pre-approve the particular service on a case-by-case basis. No service that is absent
from the record of class-approved services in the annual engagement letter may be commenced without specific pre-approval. The Audit Committee has delegated the authority to grant pre-approvals to the
Audit Committee Chairman when the full Audit Committee is unable to do so. Such pre-approvals are then reviewed by the full Audit Committee at its next regular meeting. The Independent Auditor and our
senior management periodically report to the Audit Committee regarding the extent of services provided by the Independent Auditor and the related fees for the services performed, as needed. In 2013,
all audit and non-audit services were pre-approved and reviewed in accordance with our policy.

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PART IV

Item 15.Exhibits and Financial Statement Schedules

The
financial statements, financial statement schedules and exhibits listed in the exhibit index of the Original Filing and the exhibits listed in the exhibit
index of this Amendment are filed with, or incorporated by reference in, this Amendment.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this
Amendment to be signed on its behalf by the undersigned, thereunto duly authorized:

VIVUS, INC.,
a Delaware CorporationBy:

/s/ SETH H. Z. FISCHER Seth H. Z. Fischer Chief Executive Officer
(Principal Executive Officer)


Date:
April 30, 2014

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VIVUS, INC.
AMENDMENT NO. 1 TO ANNUAL REPORT ON FORM 10-K FOR
THE YEAR ENDED DECEMBER 31, 2013
EXHIBIT INDEX

Exhibit
Number

Description31.3

Certification of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934, as amended31.4

Certification of Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934, as amended


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