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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, 2015ORo

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 o

Accelerated filer ý

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, 2015, totaled approximately $238,937,273 based on
the closing stock price as reported by the NASDAQ Global Select Market.

As
of April 15, 2016, there were 104,089,388 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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EXPLANATORY NOTE

This Amendment No. 1 to Form 10-K, or this Amendment, amends the Annual Report on Form 10-K for the fiscal year
ended December 31, 2015 originally filed on March 9, 2016, or the Original Filing, by VIVUS, Inc., a Delaware corporation. We are filing this Amendment to present the information
required by Items 10, 11, 12, 13 and 14 of Part III of Form 10-K because a definitive proxy statement containing such information will not be filed within 120 days after
the end of our fiscal year covered by the Original Filing.

This
Amendment amends and restates in its entirety Items 10, 11, 12, 13 and 14 of Part III and amends Part IV of the Original Filing. Except as expressly set forth
herein, this Amendment does not reflect events occurring after the date of the Original Filing or modify or update any of the other disclosures contained therein in any way other than as required to
reflect the amendments discussed above. Accordingly, this Amendment should be read in conjunction with the Original Filing and our other filings with the Securities and Exchange Commission, or SEC.

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.

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INDEX



PART IIIItem 10:

Directors, Executive Officers and Corporate Governance

4Item 11:

Executive Compensation

9Item 12:

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

38Item 13:

Certain Relationships and Related Transactions, and Director Independence

41Item 14:

Principal Accountant Fees and Services

42PART IVItem 15:

Exhibits and Financial Statement Schedules

44


In
VIVUS's filings with 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 15, 2016 regarding our
executive officers:

Name

Age

PositionSeth H. Z. Fischer


59

Chief Executive Officer and DirectorMark K. Oki


47

Chief Financial Officer and Chief Accounting OfficerJohn L. Slebir


50

Senior Vice President, Business Development and General Counsel and SecretarySantosh T. Varghese, M.D.


45

Chief Medical Officer


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

Mark K. Okihas served as our Chief Financial Officer and Chief Accounting Officer since October 2015. Prior to this, Mr. Oki held
the following positions at Alexza Pharmaceuticals, Inc., a publicly traded pharmaceutical company: Senior Vice President, Finance and Chief Financial Officer from July 2012 until October 2015,
Principal Accounting Officer from May 2010 until October 2015, Principal Financial Officer and Secretary from December 2011 until October 2015, Vice President, Finance and Controller from February
2010 until July 2012 and Controller from April 2006 until February 2010. From June 2001 until April 2006, he served as the Controller of Pharmacyclics, Inc., a publicly traded development stage
pharmaceutical company. From 1998 until 2001, Mr. Oki held several positions at
Incyte Genomics, Inc., now Incyte Corporation, a publicly traded company, including most recently as Assistant Controller. From 1992 until 1997, he held several positions at Deloitte &
Touche LLP, a public accounting firm. Mr. Oki holds a B.S. in Business Administration with a concentration in Accounting from San Jose State University.

John L. Slebirhas served as our Senior Vice President, Business Development and General Counsel since January 2014, 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 until 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 and sporting equipment 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.

Santosh T. Varghese, M.D.has served as our Chief Medical Officer since January 2016. Dr. Varghese served as our Vice President,
Medical & Regulatory Affairs, Pharmacovigilance, and QA from October 2013 until December 2015, as our Vice President, Head of Medical Affairs, Pharmacovigilance, and Regulatory Compliance from
July 2013 until October 2013, as our Head of Medical Affairs and Pharmacovigilance from April 2012 until July 2013, and as our Vice President, Head of Medical Affairs from March 2012 until April 2012.
Prior to this, Dr. Varghese was Senior Vice President, Medical Affairs at Elan Pharmaceuticals, a biopharmaceutical company, from January 2011 until March 2012. From April 2010 until January
2011, Dr. Varghese served as an executive consultant in the pharmaceutical industry for medical education and pharmaceutical companies. From June 2008 until April 2010, he was Vice President
Primary Care & Cardiovascular in Global Medical Affairs at Schering-Plough Corporation (now Merck & Co.), a pharmaceutical company, in addition to other

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senior
roles at Schering-Plough Corporation from May 2006 until June 2008. From November 2000 until May 2006, he held senior roles at Aventis and Sanofi-Aventis (now Sanofi SA), a
pharmaceutical company. Dr. Varghese previously served on the board of directors of the American Lung AssociationNew York, and was an Adjunct Associate Professor at Touro
University College of Medicine (now New York Medical College). Dr. Varghese is the co-author of abstracts and journal publications in multiple therapeutic areas. Dr. Varghese holds a
B.S. in Biology from Pennsylvania State University and an M.D. from St. George's University School of Medicine. He completed his medical training in the Caribbean, United States, and United
Kingdom.

Our Directors

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

The
following table and the biographical information that follows it set forth information as of April 15, 2016 regarding our Board:

Name

Age

Position Held with the Company

First
Became a
DirectorSeth H. Z. Fischer


59

Chief Executive Officer and Director


2013David Y. Norton(1)(3)


64

Chairman of the Board of Directors and Director


2013Jorge Plutzky, M.D.


57

Director


2013Eric W. Roberts(2)(3)


52

Director


2015Herman Rosenman(1)(2)


68

Director


2013Allan L. Shaw(1)(2)


52

Director


2015Mayuran Sriskandarajah(3)


36

Director


2015


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


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. Fischer has served on the board of BioSig Technologies, Inc., a public 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.

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David Y. Nortonhas served as a director of the Company since July 19, 2013. From February 2012 until July 2012, Mr. Norton
served as Interim CEO of Savient Pharmaceuticals Inc., a pharmaceutical company that filed for Chapter 11 bankruptcy in October 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. 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 INC Research Holdings Inc., a global contract research organization, a director of the Global Alliance for TB Drug Development, a non-profit organization dedicated
to the discovery and development of new, faster-acting and affordable tuberculosis medicines, and a member and previous Chairman of the board of directors of the American Foundation for Suicide
Prevention, a non-profit organization exclusively dedicated to understanding and preventing suicide. He previously served as a director of Savient Pharmaceuticals Inc. from October 2011 until
December 2013, a Senior Advisor to Tapestry Networks, 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 is a graduate of Control Data Institute, Australia and the College of Distributive
Trades, United Kingdom.

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 9, 2013. Since 1996, Dr. Plutzky 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 has served on the board of directors of Aegerion Pharmaceuticals, Inc., a publicly traded biopharmaceutical company, since April 2015.
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.

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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 as evaluation, development and commercialization of our current and potential future products proceed.

Eric W. Robertshas served as a director of the Company since September 15, 2015. Since January 2012, Mr. Roberts has been a
founding Managing Director of Valence Life Sciences, LLC, a life sciences venture capital firm. From 2004 to 2012, Mr. Roberts was a founding Managing Director of Caxton Advantage
Venture Partners, an investment firm. From 1986 to 2004, Mr. Roberts served in a variety of roles as an investment banker, including as Managing Director, Partner and Founder of the Life
Sciences Department at Dillon, Read & Co. Inc., an investment bank which merged to become UBS AG, and Managing Director and Co-Head of the Global Healthcare Investment Banking
Group at Lehman Brothers, a former global services financial firm. Mr. Roberts currently serves on the board of directors of Invuity, Inc., a publicly traded medical technology company,
and Chinook Pharmaceuticals, a pharmaceutical company. He also served on the board of directors of Gemin X Pharmaceuticals, Inc., a biotechnology company, from 2007 through its sale to
Cephalon, Inc. (now Teva Pharmaceutical Industries Ltd.) in 2011. Mr. Roberts holds a B.S. in economics from the Wharton School of the University of Pennsylvania.

Mr. Roberts'
qualifications as a director include his extensive experience as an investment banker and venture capitalist in the healthcare industry and his broad healthcare
industry knowledge.

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 & 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, and Oxford Immunotec, Ltd., a 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, Emphasys Medical, Inc. and Medistem, Inc. (acquired by Intrexon Corp.). 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.

Allan L. Shawhas served as a director of the Company since September 15, 2015. Since January 2016, Mr. Shaw has been the
Chief Financial Officer, Treasurer and Secretary of Syndax Pharmaceuticals, Inc., a publicly listed clinical stage biopharmaceutical company. Mr. Shaw was Managing Director of
Alvarez & Marsal LLC, a global professional services firm, and led their biopharmaceutical consulting practice, from December 2011 to March 2015, and supported the firm on an ad hoc
basis from March 2015 to October 2015. From 2009 to 2011, he served as the Chief Financial Officer of NewLead Holdings LTD., a publicly traded global shipping company. From 2005 to 2009, he was
the founder and

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Senior
Managing Director of Shaw Strategic Capital LLC, an international financial advisory firm, focused on providing strategic financial counsel on a wide variety of issues such as general
corporate finance, mergers and acquisitions, capital structuring, licensing and capital markets. From 2002 to 2004, Mr. Shaw was the Chief Financial Officer of Serono S.A., a publicly
traded global biotechnology company, and from 1994 to 2001, he was the Chief Financial Officer of Viatel, Inc., a publicly traded international communications company. Mr. Shaw serves on
the board of directors of Akari Therapeutics, Plc., a publicly traded biopharmaceutical company, and Edith & Carl Marks JCH of Bensonhurst, a non-profit organization. He also served on
the board of directors of the Central New York Biotech Accelerator (formerly Central New YorkBiotech Research Center) from 2009 to 2013, NewLead Holdings LTD. from 2009 to 2011,
Navios Maritime Holdings, Inc. from 2005 to 2010, Serono S.A. as an Executive Management Board Member from 2002 to 2004 and Viatel Inc. from 1996 to 2002. He has contributed to
several corporate governance books and is a member of the American Institute of Certified Public Accountants, New York Society of Certified Public Accountants and Corporate Directors Group.
Mr. Shaw received a B.S. from the State University of New York (Oswego College) and is a certified public accountant in the State of New York.

Mr. Shaw's
qualifications as a director include his extensive leadership experience as a Chief Financial Officer, his diverse industry background in companies of ranging sizes,
and his broad base of expertise with capital markets and operational expertise with a view toward corporate governance, risk management and leadership.

Mayuran Sriskandarajahhas served as a director of the Company since September 15, 2015. Mr. Sriskandarajah is a founding
partner and Managing Director 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 2005 to 2010, Mr. Sriskandarajah served as an Investment Analyst at Icahn Capital, an entity through which Carl C. Icahn conducts his investment activities, and
in 2011, he served as a consultant at Icahn Capital. Prior to Icahn Capital, he served as a consultant at Bain & Company, a management consulting firm, from 2002 to 2005. Prior to this,
Mr. Sriskandarajah served as an investment banker at Wasserstein Perella & Company, an investment bank. Mr. Sriskandarajah served on the board of directors of Emmaus Life
Sciences, Inc., a privately-held pharmaceutical company, from 2014 to 2015. He also served on the board of directors of Viskase Companies, Inc., a publicly-traded provider of casings and
various plastic products for food processors, from 2006 to 2010. He received an A.B. degree from Brown University.

Mr. Sriskandarajah's
qualifications as a director include his significant experience in finance, investing and overseeing company operations, particularly within the healthcare
industry.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, 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
reporting persons that no other reports were required during the fiscal year ended December 31, 2015, we believe that during 2015, all of our executive officers, directors and 10% stockholders
timely complied with all Section 16(a) filing requirements except as follows: (i) on April 20, 2016, John L. Slebir, Senior Vice President, Business Development and General
Counsel and Secretary, filed one late Form 4 reporting the sale of shares to satisfy tax liability due upon the vesting of restricted stock units; (ii) on April 20, 2016, Wesley W. Day,
Ph.D., former Vice President, Clinical Development, and Guy P. Marsh, former Vice President, U.S. Operations and General Manager, each filed a late amendment to a prior Form 4 in lieu of filing
a late Form 4 to report the sale of shares to satisfy tax liability due upon the vesting of restricted stock units; and (iii) on April 11, 2016, Santosh T.

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Varghese,
M.D., Chief Medical Officer, filed one late Form 4 reporting the sale of shares to satisfy tax liability due upon the vesting of restricted stock units.

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. We 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 within four
business days following the date of such amendment or waiver.

Material Changes to Nominee Recommendation Procedures

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

Audit Committee

We have a separately-designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act.
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 Norton, Rosenman and Shaw, none of whom is an employee of the Company and each of whom is independent within the meaning
of Rule 5605 of the NASDAQ listing rules and the independence requirements of Rule 10A-3 of the Exchange Act, in each case as currently in effect. The Board has determined that
Mr. Rosenman is an "audit committee financial expert" as
defined in Item 407(d)(5) of Regulation S-K. 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 our "named executive officers" for 2015:

Name

TitleSeth H. Z. Fischer

Chief Executive OfficerMark K. Oki

Chief Financial Officer and Chief Accounting OfficerJohn L. Slebir

Senior Vice President, Business Development and General Counsel and SecretarySantosh T. Varghese, M.D.

Chief Medical OfficerWesley W. Day, Ph.D.

Former Vice President, Clinical DevelopmentJohann Noor Mohamed

Former Interim Chief Financial Officer and Interim Chief Accounting OfficerSvai S. Sanford

Former Chief Financial Officer and Chief Accounting Officer


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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. We evaluate our compensation based on a number of factors, including corporate and individual performance. While challenges remain within the obesity pharmacotherapy market, in
particular with respect to the tendency on the part of healthcare providers to treat symptoms of obesity rather than the disease itself, a narrow focus on certain patient types for treatment,
historically low third party insurance coverage, and the continued exclusion of anti-obesity medications from Medicare Part D, in 2015, we were able to make progress on a number of areas,
including financial resultsgrowth in total prescriptions and net revenue for Qsymia, while reducing our selling, general and administrative, or SG&A, expenses. Qsymia total prescription
volume grew approximately 6% in 2015, compared to 2014, and Qsymia net revenue grew over 21% in the same period. Total Qsymia and STENDRA product and
supply revenue was $81.3 million in 2015, compared to $71.8 million in 2014. For the same period, total SG&A expense was $79.4 million in 2015, compared to $111.5 million
in 2014, a decrease of 29%.

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, an Aon Company, 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, 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. In addition, we have experienced changes in our management team recently.

Executive Compensation Program Objectives



Our Compensation Committee relies on experience with other companies in our industry and third-party industry compensation surveys,
including those compiled and periodically provided to the Compensation Committee by Radford, executive compensation data as reported in peer company proxies, 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 that of our lower-level employees.
Consistent with our compensation philosophy, we have structured each element of our compensation program as described below.

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We
design our base pay to provide the essential reward for an employee's work. Once base pay levels are determined, annual increases in base pay are provided to recognize an employee's
expanded role and capabilities, specific performance achievements and contributions. Adjustments may also be made for changes in comparable peer company compensation levels.

We
also utilize annual 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. 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. In
2015, our annual
equity-based compensation included 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 of
further incentivizing our employees. The annual equity awards typically vest over a period of four years, providing a long-term incentive to our employees as they work on multi-year commercialization
and drug development programs. The restricted stock unit grants to Messrs. Fischer, Slebir, Noor Mohamed and Sanford and Dr. Varghese in August 2015, which were part of an employee
retention plan, vest pursuant to the following 18-month schedule commencing on July 31, 2015: 50% on July 31, 2016 and 50% on December 31, 2016, subject to each such individual
continuing to be a Service Provider (as defined in the Company's 2010 Equity Incentive Plan) 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.



For determining 2015 compensation levels, 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, revenues, financial position, 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 2015, the Peer Group, which was determined by the Compensation Committee after consulting with Radford, consisted of the following companies:

ACADIA Pharmaceuticals Inc.

Idenix Pharmaceuticals, Inc. (acquired byAegerion Pharmaceuticals, Inc.

Novartis)AMAG Pharmaceuticals, Inc.

ImmunoGen, Inc.Arena Pharmaceuticals, Inc.

InterMune, Inc. (acquired by Roche)Avanir Pharmaceuticals, Inc. (acquired by Otsuka

MannKind CorporationPharmaceuticals)

Nektar TherapeuticsCadence Pharmaceuticals, Inc. (acquired by

Neurocrine Biosciences, Inc.Mallinckrodt Pharmaceuticals)

Omeros CorporationDepomed, Inc.

Orexigen Therapeutics, Inc.Dyax Corp.

Pacira Pharmaceuticals, Inc.Exelixis, Inc.

Xenoport, Inc.Horizon Pharma, Inc.


11

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Table of Contents

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 at our
2015 Annual Meeting of Stockholders, or the 2015 Annual Meeting, on our 2014 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 stockholders voted to approve, on an advisory basis, our 2014 executive compensation at the 2015 Annual Meeting. In
light of such approval and after careful consideration, the Compensation Committee did not make any material changes to the Company's executive compensation practices. 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. 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 2015, our Compensation Committee reviewed base salaries for our named executive officers. The Compensation Committee considered a number of factors in setting the 2015 base
salaries for our named executive officers, including the status of the commercial launch of Qsymia® as a treatment for obesity in the United States and the status of the commercial launch
of STENDRA® and SPEDRA in the United States and the European Union. For STENDRA, we use the trade name

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SPEDRA
in the European Union and certain other territories outside the United States; 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, Messrs. Slebir, Noor
Mohamed and Sanford and Drs. Varghese and Day received merit increases to their base salaries based on individual performance, Mr. Fischer received a merit increase to his base salary based on
individual performance and a market increase to his base salary based on a review of the Comparison Data, and Mr. Oki joined the Company in 2015 and therefore did not receive any increase to
his base salary.

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

Name

2015
Increase
to Base
Salary

2015 Base
Salary ($)Seth H. Z. Fischer(1)


3.8
%

675,000Mark K. Oki(2)



%

350,000John L. Slebir


3.2
%

438,800Santosh T. Varghese, M.D.


2.6
%

395,000Wesley W. Day, Ph.D.(3)


1.9
%

440,600Johann Noor Mohamed(4)


3.2
%

221,900Svai S. Sanford(5)


3.5
%

362,300


(1)Includes
a $3,900 market adjustment increase. Actual amount of merit increase was 3.2%.(2)Mr. Oki
was appointed as the Company's Chief Financial Officer and Chief Accounting Officer effective as of October 19, 2015.(3)Dr. Day
served as the Company's Vice President, Clinical Development from November 2005 until December 31, 2015.(4)In
June 2015, Mr. Noor Mohamed's base salary was increased to $250,000. Mr. Noor Mohamed served as the Company's interim Chief Financial
Officer and interim Chief Accounting Officer from October 1, 2015 until October 19, 2015. Mr. Noor Mohamed resigned from the position of interim Chief Financial Officer and
interim Chief Accounting Officer and resumed his service as the Company's Vice President and Corporate Controller on October 19, 2015, and his employment later terminated with the Company on
October 30, 2015.(5)Mr. Sanford
served as the Company's Chief Financial Officer and Chief Accounting Officer until September 30, 2015. His service as the
Company's Chief Financial Officer began in January 2015, and his service as the Company's Chief Accounting Officer began in December 2013. From November 2013 until January 2015, Mr. Sanford
served as the Company's interim Chief Financial Officer.




Annual Bonus Plan.We awarded cash bonuses under the Annual Bonus Plan to our named executive officers based on our overall corporate
performance,
achievement of general corporate performance objectives established by our Board of Directors in June 2015 and individual performance. The cash bonuses 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

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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 increased, 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.

On
August 3, 2015, our Compensation Committee determined that the Annual Bonus Plan for 2015 would be funded at a minimum of 80% of the eligible cash bonus potential. The actual
cash bonus payouts in January 2016 under the Annual Bonus Plan for each eligible employee were based on the eligible employee's individual performance and contribution to the Company's overall
corporate performance. The Compensation Committee determined each eligible employee's cash bonus award based on the eligible employee's individual performance review, such that the percent of the
eligible bonus awarded to each eligible employee could be increased, decreased or eliminated entirely based on that review. The funding of the Annual Bonus Plan above the 80% minimum approved on
August 3, 2015 was subject to the Company's overall corporate performance and the achievement of general corporate performance objectives established by the Board.

For
2015, our corporate performance objectives as approved by our Board in June 2015, were as follows:



In
the Compensation Committee's opinion, the Company succeeded in meeting the following corporate objectives:



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Further,
in the Compensation Committee's opinion, the Company succeeded, in part, in meeting the following corporate objective:



Based
on the achievements in 2015, the Compensation Committee determined that bonuses under the Annual Bonus Plan equaling 87.5% of the eligible cash bonus potential would be paid for 2015 to our
eligible employees under the plan, including our named executive officers.

The
table below provides the target bonus for each named executive officer who participated in the Annual Bonus Plan for 2015 and the executive's actual bonus amount:

Name

2015 Target
Bonus as a
Percentage of
Base Salary

2015
Target
Bonus ($)

2015
Maximum
Bonus as a
Percentage of
Base Salary

2015
Maximum
Bonus ($)(1)

2015 Actual
Bonus as a
Percentage of
Base Salary

2015
Actual
Bonus ($)Seth H. Z. Fischer


80
%

540,000


80
%

540,000


70
%

472,500Mark K. Oki(2)


40
%

28,000


40
%

28,000


6
%

20,825John L. Slebir


50
%

219,400


50
%

219,400


44
%

191,975Santosh T. Varghese, M.D.


40
%

158,000


40
%

158,000


35
%

138,250Wesley W. Day, Ph.D.(3)


40
%

176,240


40
%

176,240



%

Johann Noor Mohamed(4)


38
%

83,334


38
%

83,334



%

Svai S. Sanford(5)


40
%

144,920


40
%

144,920



%




(1)If
all of the Company's corporate performance objectives are achieved including that the specified net Qsymia revenue goal is exceeded by a certain amount,
the Compensation Committee may in its discretion for purposes of calculating a named executive officer's bonus deem the named executive officer's base salary to be 105% of the named executive
officer's actual base salary, or the Deemed Base Salary; the named executive officer's bonus would then be based on the named executive officer's applicable bonus percentage (as indicated in the
table) of the Deemed Base Salary. In addition, the Compensation Committee may award up to 10% of additional bonus to each named executive officer based on individual performance.(2)Mr. Oki
was appointed as the Company's Chief Financial Officer and Chief Accounting Officer effective as of October 19, 2015. The 2015 target
bonus and the 2015 maximum bonus are on a pro rata basis for the period of time that he served as Chief Financial Officer and Chief Accounting Officer of the Company in 2015. In addition, the cash
bonus payment under the Annual Bonus Plan for 2015 is on a pro rata basis for the period of time that he served as Chief Financial Officer and Chief Accounting Officer of the Company in 2015.(3)Dr. Day
was not eligible to receive a cash bonus payment under the Annual Bonus Plan for 2015. Please see the Summary Compensation Table for 2015
under the heading "All Other Compensation" and the accompanying footnote for the cash payment paid to Dr. Day in connection with the termination of his employment with the Company.(4)Mr. Noor
Mohamed was not eligible to receive a cash bonus payment under the Annual Bonus Plan for 2015. Please see the Summary Compensation Table for
2015 under the heading "All Other Compensation" and the accompanying footnote for the cash payment paid to Mr. Noor Mohamed in connection with the termination of his employment with the
Company.(5)Mr. Sanford
was not eligible to receive a cash bonus payment under the Annual Bonus Plan for 2015. Please see the Summary Compensation Table for 2015
under the heading "All Other Compensation" and the accompanying footnote for the cash payment paid to Mr. Sanford in connection with the termination of his employment with the Company.


For
2016, under the Annual Bonus Plan, the Compensation Committee determined that our Chief Executive Officer, Chief Financial Officer, Senior Vice Presidents (or equivalent pay grade)
and Vice

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Presidents
(or equivalent pay grade) would be eligible to receive target and maximum cash bonuses of up to 80%, 40%, 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 2016:

Name

2016 Target
Bonus as a
Percentage of
Base Salary

2016
Target
Bonus ($)

2016
Maximum
Bonus as a
Percentage of
Base Salary

2016
Maximum
Bonus ($)Seth H. Z. Fischer


80
%

557,280


80
%

557,280Mark K. Oki


40
%

140,000


40
%

140,000John L. Slebir


50
%

226,421


50
%

226,421Santosh T. Varghese, M.D.


40
%

163,056


40
%

163,056




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 equity award 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 equity award 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 each annual anniversary of the restricted stock unit award. Unless
our employees (including our named executive officers) elect otherwise, upon the vesting of the restricted stock units shares of Common Stock are sold to satisfy the tax liability due upon such
vesting. We believe these vesting arrangements encourage 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 2015, we granted stock options to purchase 3,499,200 shares of our Common Stock, of which stock
options to
purchase a total of 2,143,800 shares were awarded to
executives (including our named executive officers), representing approximately 61% of all stock option awards in 2015. Also, in 2015, we granted 1,954,000 restricted stock units, of which 723,200

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restricted
stock units were awarded to executives (including our named executive officers), representing 37% of all restricted stock unit awards in 2015. 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 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 2015, we awarded a mix of stock options and restricted stock units.

Equity Awards in 2015.In January 2015, 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 named executive officers during the prior calendar year. Following the Compensation Committee's review, all
of our then-serving named executive officers received stock options and restricted stock units as reflected in the 2015 Grants of Plan-Based Awards Table below. Mr. Noor Mohamed and
Dr. Varghese, who were not named executive officers in January 2015, also received stock options and restricted stock units as reflected in the 2015 Grants of Plan-Based Awards Table below. In
August 2015, each of our then-serving named executive officers, other than Dr. Day, received restricted stock units in conjunction with an employee retention plan, as reflected in the 2015
Grants of Plan-Based Awards Table below. Mr. Noor Mohamed also received restricted stock units in conjunction with an employee retention plan, as reflected in the 2015 Grants of Plan-Based
Awards Table below. Upon joining the Company in October 2015, Mr. Oki received stock options as reflected in the 2015 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 2015, the employer-match contribution
limit was $10,600 per employee.

Employment Agreement

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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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 below under the section entitled "Potential Payments Upon Termination or Change of Control for each Named Executive
Officer."

Perquisites and Other Benefits

We annually review the perquisites that our named executive officers receive. We offer short-term and long-term disability insurance
plans to all of our employees, including all of our named executive officers. Historically, we have 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 equity 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, Chief Financial Officer, and General Counsel typically attend the meetings of the Compensation Committee, but the Chief Executive Officer, the 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 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 reviews the performance and
compensation of the Chief Executive Officer and Chief Financial Officer annually.

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Our Compensation Committee also works with our Chief Executive Officer and 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, or the Code, 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 (other than the Chief Financial Officer), 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. 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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Table of Contents

2015 Summary Compensation Table

The following table presents information for our fiscal year ended December 31, 2015 concerning the total compensation paid to
or accrued for our Chief Executive Officer, Chief Financial Officer, former interim Chief Financial Officer, former Chief Financial Officer, and each of our three 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)

Bonus
($)(2)

Stock
Awards
($)(3)

Option
Awards
($)(3)

Non-Equity
Incentive Plan
Compensation
($)(4)

All Other
Compensation
($)(5)

Total($)Seth H. Z. Fischer(6)


2015


675,000





357,510


1,105,267


472,500


41,359


2,651,636Chief Executive Officer and Director


2014


650,000











416,000


36,909


1,102,9092013


212,083








7,991,558


104,000


15,965


8,323,606Mark K. Oki(7)


2015


71,794


30,000





146,520


20,825





269,139Chief Financial Officer andChief Accounting OfficerJohn L. Slebir


2015


438,800





185,726


433,245


191,975


10,600


1,260,346Senior Vice President, Business


2014


425,000





336,350


254,940


170,000


10,400


1,196,690Development and General


2013


398,788








592,670


95,700


17,617


1,104,775Counsel and SecretarySantosh T. Varghese, M.D.(8)


2015


395,000





143,562


227,571


138,250


10,600


914,983Chief Medical Officer


2014


385,000





279,775


167,010


123,200


10,400


965,385Wesley W. Day, Ph.D.(9)


2015


440,600





67,130


409,508





800,872


1,718,110Former Vice President, Clinical


2014


432,300





283,650


191,455


138,300


10,400


1,056,105Development


2013


419,664








423,335


100,000


22,179


965,178Johann Noor Mohamed(10)


2015


212,971





79,631


43,006





76,769


412,377Former Interim Chief Financial Officerand Interim Chief Accounting OfficerSvai S. Sanford(11)


2015


295,413





164,150


422,519





120,855


1,002,937Former Chief Financial Officer and


2014


350,000





283,650


191,455


112,000


12,800


949,905Chief Accounting Officer


2013


274,843








124,656


57,000


10,700


467,199


(1)The
amounts in this column include payments in respect of accrued vacation, holidays and sick days earned for the fiscal years presented, whether or not
actually paid during such year.(2)The
amount in this column for Mr. Oki represents a sign on bonus in connection with his employment with the Company. Please see footnote 7 below.(3)The
amounts included in this 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 15 to our consolidated financial statements included in the
Original Filing. See also the 2015 Grants of Plan-Based Awards table below for information on restricted stock unit awards and option awards made in 2015.(4)The
amounts for fiscal year 2015 in this column consist of cash bonus payments under the Annual Bonus Plan approved by the Compensation Committee in January
2016. Please see "Compensation Discussion and Analysis" above for a description of the Annual Bonus Plan.


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(5)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) reimbursement for auto expenses and lodging expenses in Mountain View or Sunnyvale, CA; (iv) excess medical
waiver reimbursement; and (v) severance payments under letter agreements with the Company and each of Dr. Day and Messrs. Noor Mohamed and Sanford, as provided in the following
table:


Name

Year

401(k)
Contributions
($)

Supplemental
Medical
Reimbursement
Coverage Plan
($)

Reimbursement
for Auto
Expenses and
Lodging
Expenses in
Mountain
View or
Sunnyvale, CA
($)

Excess
Medical
Waiver
Reimbursement
($)

Severance
Payments
($)Seth H. Z. Fischer


2015


10,600





15,759


15,000


2014


4,333





17,576


15,000


2013


4,333





8,507


3,125


Mark K. Oki


2015














John L. Slebir


2015


10,600











2014


10,400











2013


10,200


7,417








Santosh T. Varghese, M.D.


2015


10,600











2014


10,400











Wesley W. Day, Ph.D.


2015


10,600











790,2722014


10,400











2013


10,200


11,979








Johann Noor Mohamed


2015


8,102








2,000


66,667Svai S. Sanford


2015


10,365








1,800


108,6902014


10,400








2,400


2013


10,200








500





(6)Mr. Fischer
became our Chief Executive Officer on September 3, 2013, upon the resignation of Anthony P. Zook, our former Chief Executive
Officer. For 2013, compensation shown was earned in 2013 and not annualized.(7)Mr. Oki
was appointed as our Chief Financial Officer and Chief Accounting Officer effective as of October 19, 2015. For 2015, compensation
shown was earned in 2015 and not annualized.(8)Dr. Varghese
was not a named executive officer in 2013.(9)Dr. Day
served as our Vice President, Clinical Development from November 2005 until December 31, 2015.(10)Mr. Noor
Mohamed served as our interim Chief Financial Officer and interim Chief Accounting Officer from October 1, 2015 until
October 19, 2015. Mr. Noor Mohamed resigned from the position of interim Chief Financial Officer and interim Chief Accounting Officer and resumed his service as our Vice President and
Corporate Controller on October 19, 2015, and his employment later terminated with the Company on October 30, 2015. For 2015, compensation shown was earned in 2015 and not annualized.(11)Mr. Sanford
served as our Chief Financial Officer and Chief Accounting Officer until September 30, 2015. His service as our Chief Financial
Officer began in January 2015, and his service as our Chief Accounting Officer began in December 2013. From November 2013 until January 2015, Mr. Sanford served as our interim Chief Financial
Officer. For 2013, compensation shown was earned in 2013 and not annualized. Also, for 2015, compensation shown was earned in 2015 and not annualized.


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2015 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, 2015.

All Other
Stock
Awards:
Number of
Shares of
Stock or
Units(#)

All Other
Option
Awards:
Number of
Securities
Underlying
Options(#)

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

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

Threshold($)

Target($)

Maximum($)Seth H. Z. FischerStock Options

1/23/2015














628,600


2.74


1,105,267Restricted Stock Unit Award

1/23/2015











66,000








180,8408/3/2015











117,000








176,670Annual Bonus Plan







540,000


540,000











Mark K. Oki(3)Stock Options

10/30/2015














225,000


1.26


146,520Restricted Stock Unit Award






















Annual Bonus Plan







28,000


28,000











John L. SlebirStock Options

1/23/2015














246,400


2.74


433,245Restricted Stock Unit Award

1/23/2015











25,900








70,9668/3/2015











76,000








114,760Annual Bonus Plan







219,400


219,400











Santosh T. Varghese, M.D.Stock Options

1/23/2015














139,700


2.74


227,571Restricted Stock Unit Award

1/23/2015











14,700








40,2788/3/2015











68,400








103,284Annual Bonus Plan







158,000


158,000











Wesley W. Day, Ph.D.(4)Stock Options

1/23/2015














232,900


2.74


409,508Restricted Stock Unit Award

1/23/2015











24,500








67,130Annual Bonus Plan







176,240


176,240











Johann Noor Mohamed(5)Stock Options

1/23/2015














26,400


2.74


43,006Restricted Stock Unit Award

1/23/2015











5,200








14,2488/3/2015











43,300








65,383Annual Bonus Plan







83,334


83,334











Svai S. Sanford(6)Stock Options

1/23/2015














240,300


2.74


422,519Restricted Stock Unit Award

1/23/2015











25,300








69,3228/3/2015











62,800








94,828Annual Bonus Plan







144,920


144,920














(1)The
row entitled "Annual Bonus Plan" for each respective named executive officer in the table above reflects the threshold, target and maximum value of a
cash bonus award to each respective named executive officer for 2015 under the Annual Bonus Plan approved by the Compensation Committee in January 2016. Please see "Compensation Discussion and
Analysis" above for further detail on the maximum value of a cash bonus award to each respective named executive officer. The cash bonus award amounts actually paid under the Annual Bonus Plan to the
named executive officers in 2015 are shown in the Summary Compensation Table for 2015 under the heading "Non-Equity Incentive Plan Compensation." Please see "Compensation Discussion and Analysis"
above for a description of the Annual Bonus Plan.(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 Select Market on the date of grant.(3)Mr. Oki
was appointed as our Chief Financial Officer and Chief Accounting Officer effective as of October 19, 2015. The 2015 target bonus and
the 2015 maximum bonus are on a pro rata basis for the period of time that he served as Chief Financial Officer and Chief Accounting Officer of the Company in 2015. In addition, the cash bonus payment
under the Annual Bonus Plan for 2015 is on a pro rata basis for the period of time that he served as Chief Financial Officer and Chief Accounting Officer of the Company in 2015.(4)Dr. Day
was not eligible to receive a cash bonus payment under the Annual Bonus Plan for 2015. Please see the Summary Compensation Table for 2015
under the heading "All Other Compensation" and the accompanying footnote for the cash payment paid to Dr. Day in connection with the termination of his employment with the Company.


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(5)Mr. Noor
Mohamed was not eligible to receive a cash bonus payment under the Annual Bonus Plan for 2015. Please see the Summary Compensation Table for
2015 under the heading "All Other Compensation" and the accompanying footnote for the cash payment paid to Mr. Noor Mohamed in connection with the termination of his employment with the
Company.(6)Mr. Sanford
was not eligible to receive a cash bonus payment under the Annual Bonus Plan for 2015. Please see the Summary Compensation Table for 2015
under the heading "All Other Compensation" and the accompanying footnote for the cash payment paid to Mr. Sanford in connection with the termination of his employment with the Company.


Outstanding Equity Awards at Fiscal Year-End

The following table presents certain information concerning the outstanding equity awards held as of December 31, 2015 by each
named executive officer.

Option Awards

Stock AwardsName

Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable(1)

Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable(1)

Option
Exercise
Price
($)(2)

Option
Expiration
Date(3)

Number of
Shares or Units
of Stock That
Have Not
Vested(#)(4)

Market Value of
Shares or Units
of Stock That
Have Not
Vested
($)(5)Seth H. Z. Fischer


750,000


250,000


12.90


9/3/2020


66,000


67,320


628,600


2.74


1/23/2022


117,000


119,340Mark K. Oki





225,000


1.26


10/30/2022John L. Slebir


3,750





6.39


9/4/2019


4,200


4,284166,250





8.74


1/21/2021


25,900


26,41850,000





12.04


1/27/2022


76,000


77,52070,000





12.39


1/25/202324,437


26,563


7.75


1/28/2021


246,400


2.74


1/23/2022Santosh T. Varghese, M.D.


200,000





24.23


4/25/2022


2,775


2,83152,500





12.39


1/25/2023


14,700


14,99416,291


17,709


7.75


1/28/2021


68,400


69,768


139,700


2.74


1/23/2022Wesley W. Day, Ph.D.(6)


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


1/25/202318,352


19,948


7.75


1/28/2021Johann Noor Mohamed(7)


11,250





18.71


10/24/20221,718





12.39


1/25/20234,766





7.75


1/28/2021Svai S. Sanford(8)


15,425





7.75


1/28/2021


(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.
Mr. Fischer's option grant on September 3, 2013 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 Select Market on the date of grant.(3)Options
granted in January 2013 or prior thereto generally expire 10 years from the date of grant, and options granted after January 2013 generally
expire seven years from the date of grant. These expiration


24

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Table of Contents

dates
reflect the original option expiration dates of each option, although the options granted to Dr. Day and Messrs. Noor Mohamed and Sanford expired or will expire in 2016 due to the
earlier termination of their respective employment with the Company. (4)Subject
to the employee's continued service to the Company, the restricted stock unit awards outstanding vest (i) over a four year period with 25%
vesting annually on each anniversary of the vesting commencement date, (ii) over an 18-month schedule with 50% vesting on July 31, 2016 and 50% vesting on December 31, 2016, or
(iii) over a four year period with 25% vesting on January 1, 2016 and an additional 1/16th vesting at the end of each calendar quarter thereafter
(i.e. March 31st, June 30th, September 30th and December 31st).(5)The
market value of unvested restricted stock units is based on the closing price of our Common Stock on the NASDAQ Global Select Market of $1.02 per share
on December 31, 2015.(6)Dr. Day's
employment with the Company terminated on December 31, 2015. As a result, all of the vested and unexercised options held by
Dr. Day expire on December 31, 2016, with the exception of the options referenced in the table above with an option exercise price of $7.75 which expire on June 30, 2016.(7)Mr. Noor
Mohamed's employment with the Company terminated on October 30, 2015. As a result, all of the vested and unexercised options held by
Mr. Noor Mohamed expired on January 30, 2016.(8)Mr. Sanford's
employment with the Company terminated on September 30, 2015. As a result, all of the vested and unexercised options held by
Mr. Sanford expired on March 30, 2016.


2015 Option Exercises and Stock Vested

The following table shows the number of shares acquired pursuant to the vesting of restricted stock units by each named executive
officer during the fiscal year ended December 31, 2015 and the aggregate dollar amount realized by the named executive officer upon vesting of the restricted stock units.

Stock AwardsName

Number of Shares
Acquired on
Vesting(#)

Value Realized
on
Vesting($)(1)Seth H. Z. Fischer





Mark K. Oki





John L. Slebir


29,400


72,576Santosh T. Varghese, M.D.


24,925


61,482Wesley W. Day, Ph.D.


25,050


61,812Johann Noor Mohamed


6,575


16,278Svai S. Sanford


25,050


61,812


(1)The
aggregate dollar amount realized upon vesting is based on the closing price of our Common Stock on the NASDAQ Global Select Market on the vesting dates.


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Table of Contents

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

Based upon a hypothetical triggering date of December 31, 2015, 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 in connection
with a change of
control($)

Benefits in
connection
with a change
of control($)

Involuntary
termination
not for cause
or by
constructive
termination
in connection
with a change
of control($)

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

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


675,000





675,000


337,500


Bonus


1,080,000





1,080,000


810,000


540,000Medical continuation














Outplacement services














Value of accelerated stock options(2)














Value of accelerated restricted stock units(3)














Mark K. OkiBase salary


262,500





525,000





Bonus


105,000





210,000





Medical continuation


23,628





47,257





Outplacement services














Value of accelerated stock options(2)














Value of accelerated restricted stock units(3)














John L. SlebirBase salary


329,100





658,200





Bonus


318,124





482,674





Medical continuation


23,628





47,257





Outplacement services














Value of accelerated stock options(2)














Value of accelerated restricted stock units(3)


54,111





108,222





Santosh T. Varghese, M.D.Base salary


296,250





592,500





Bonus


238,580





357,080





Medical continuation


23,628





47,257





Outplacement services














Value of accelerated stock options(2)














Value of accelerated restricted stock units(3)


43,796





87,593





Wesley W. Day, Ph.D.(4)Base salary


440,000





440,000





Bonus


325,600





325,600





Medical continuation


24,672





24,672





Outplacement services














Value of accelerated stock options














Value of accelerated restricted stock units

















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Table of Contents

Executive benefits and payments
upon termination:

Involuntary
termination
not for cause
or by
constructive
termination
not in connection
with a change of
control($)

Benefits in
connection
with a change
of control($)

Involuntary
termination
not for cause
or by
constructive
termination
in connection
with a change
of control($)

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

Death or
Disability($)Johann Noor Mohamed(5)Base salary














Bonus


66,667





66,667





Medical continuation














Outplacement services














Value of accelerated stock options














Value of accelerated restricted stock units














Svai S. Sanford(6)Base salary














Bonus


108,690





108,690





Medical continuation














Outplacement services














Value of accelerated stock options














Value of accelerated restricted stock units

















(1)Termination
and change of control benefits for Seth H. Z. Fischer are set forth in his employment agreement. Please see "Compensation Discussion and
AnalysisEmployment Agreement" for details. If Mr. Fischer's 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) $675,000,
representing monthly severance payments during the 12-month severance period equal to his monthly base salary immediately prior to employment termination; (ii) $540,000, 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.(2)Represents
the aggregate value of the acceleration of vesting of the named executive officer's unvested stock options based on the product of (i) the
spread between the closing price of our Common Stock on December 31, 2015 of $1.02 and the exercise price of the stock options, and (ii) the number of shares of our Common Stock
underlying unvested 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, 2015.(3)Represents
the aggregate value of the acceleration of vesting of the named executive officer's unvested restricted stock units based on the product of
(i) $1.02, which is the closing price of our Common Stock on December 31, 2015, and (ii) the number of shares of our Common Stock underlying unvested restricted stock units.(4)Termination
benefits for Wesley W. Day, Ph.D. are set forth in his letter agreement regarding retention benefits with the Company dated July 20,
2015. Please see below for details. Dr. Day served as our Vice President, Clinical Development from November 2005 until December 31, 2015. Dr. Day's employment with the Company
terminated on December 31, 2015.(5)Termination
benefits for Johann Noor Mohamed are set forth in his letter agreement regarding retention benefits with the Company dated October 20,
2015. Please see below for details. Mr. Noor Mohamed served as our interim Chief Financial Officer and interim Chief Accounting Officer from October 1, 2015 until October 19,
2015. Mr. Noor Mohamed resigned from the position of interim Chief Financial Officer and interim Chief Accounting Officer and resumed his service as our Vice President and Corporate Controller
on October 19, 2015, and his employment later terminated with the Company on October 30, 2015.


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Table of Contents

(6)Termination
benefits for Svai S. Sanford are set forth in his letter agreement regarding retention agreement with the Company dated August 17, 2015.
Please see below for details. Mr. Sanford served as our Chief Financial Officer and Chief Accounting Officer until September 30, 2015. His service as our Chief Financial Officer began in
January 2015, and his service as our Chief Accounting Officer began in December 2013. From November 2013 until January 2015, Mr. Sanford served as our interim Chief Financial Officer.
Mr. Sanford's employment with the Company terminated on September 30, 2015.


The
Compensation Committee believes that providing our 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 our named executive officers and maintain leadership stability. 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.

Because
of the so-called "parachute" tax imposed by Section 280G of the Code, 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

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

Termination and Change of Control Benefits for our Former Chief Financial Officer, Former
Interim Chief Financial Officer and 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 remained eligible for termination and change in control benefits under
the Change in Control Plan until his Participation Agreement with respect to the Change in Control Plan was superseded and replaced as described below.

Pursuant
to the Change in Control Plan, in the event the Company terminated Mr. Sanford's employment other than for Cause (as defined in the Change in Control Plan), or if
Mr. Sanford terminated 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 would 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 could not exceed 24 months of Mr. Sanford's base salary. Mr. Sanford was also 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 would automatically vest. Additionally, in the event Mr. Sanford was terminated by the Company without Cause in the absence of a Change in Control,

28

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Table of Contents

Mr. Sanford
would receive the benefits listed above, but in lieu of (iii) of the preceding sentence, Mr. Sanford's outstanding equity awards would vest through his termination
date as if such awards had vested on a monthly schedule through the date of termination.

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



In
June 2015, we entered into a Second Amended and Restated Change of Control and Severance Agreement, or the Amended Agreement, with Mr. Sanford effective as of June 19,
2015, which superseded and replaced the Participation Agreement entered into with the Company on July 10, 2013 with respect to the Change in Control Plan. The Amended Agreement between the
Company and Mr. Sanford is null and void as further described below.

The
Amended Agreement provided that if Mr. Sanford's employment with the Company was terminated without Cause or by Mr. Sanford for Good Reason and the termination did not
occur within three months before a Change of Control or 18 months after a Change of Control (as such terms are defined in the Amended Agreement) of the Company, Mr. Sanford would
receive, subject to signing a release of claims in favor of the Company, (i) monthly severance payments equal to the monthly salary Mr. Sanford was receiving immediately prior to the
termination date for nine months, (ii) monthly severance payments equal to 1/12th of Mr. Sanford's target bonus for the fiscal year in which the termination occurred
for nine months, (iii) an additional pro rata portion of Mr. Sanford's target bonus for the fiscal year in which the termination occurred calculated based on the number of months during
such fiscal year Mr. Sanford was employed by the Company (and a prior fiscal year to the extent the bonus for such prior fiscal year had not yet been declared and paid by the Company)
multiplied by the average of the actual bonus percentage payouts in the two most recent years prior to the year of termination, (iv) up to nine months of reimbursement for premiums paid for
COBRA coverage, and (vi) any then-outstanding and unvested equity awards held by Mr. Sanford were subject to 50% accelerated vesting.

The
Amended Agreement also provided that if Mr. Sanford's employment with the Company was terminated by the Company without Cause or by Mr. Sanford for Good Reason within
three months before a Change of Control or 18 months after a Change of Control, Mr. Sanford would receive, subject to signing a release of claims in favor of the Company,
(i) monthly severance payments equal to the monthly salary Mr. Sanford was receiving immediately prior to the Change of Control for

29

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Table of Contents

18 months,
(ii) monthly severance payments equal to 1/12th of Mr. Sanford's target bonus for the fiscal year in which the termination occurred for
18 months, (iii) an additional pro rata portion of Mr. Sanford's target bonus for the fiscal year in which the termination occurred calculated based on the number of
months during such fiscal year Mr. Sanford was employed by the Company (and a prior fiscal year to the extent the bonus for such prior fiscal year had not yet been declared and paid by the
Company) multiplied by the average of the actual bonus percentage payouts in the two most recent years prior to the year of termination, and (iv) up to 18 months of reimbursement for
premiums paid for COBRA coverage. The Amended Agreement also provided that if Mr. Sanford's employment is terminated without Cause or for Good Reason within three months before a Change of
Control or 18 months after a Change of Control, the vesting and exercisability of all equity awards granted to Mr. Sanford by the Company would automatically vest in full and become
immediately exercisable.

For
purposes of the Amended Agreement, a "Change of Control" occurred when:



On
August 17, 2015, the Company and Mr. Sanford entered into a letter agreement, or the Sanford Letter Agreement, in connection with Mr. Sanford's voluntary
termination of his employment with the Company and the Company's desire to retain Mr. Sanford until September 30, 2015. Under the Sanford Letter Agreement, the Company and
Mr. Sanford agreed that Mr. Sanford's employment as Chief Financial Officer and Chief Accounting Officer of the Company would terminate on September 30, 2015. The Company and
Mr. Sanford also agreed that, subject to certain conditions, including the execution of a separation and release of claims agreement, (i) if Mr. Sanford remained an employee of
the Company from the date of the Sanford Letter Agreement through September 30, 2015 or (ii) if prior to September 30, 2015 Mr. Sanford's employment with the Company was
terminated by the Company for any reason other than due to Cause (as defined below) and such termination was not as a result of his death or disability, then Mr. Sanford would receive a lump
sum retention bonus in an amount equal to $108,690 (which is equal to the pro rata amount of his annual cash bonus target for fiscal year 2015 through September 30, 2015). This period allowed
the Company to proceed to search for a replacement and transition as appropriate. The Sanford Letter Agreement superseded any agreement concerning similar subject matter dated prior to the date of the
Sanford Letter Agreement, including but not limited to the Amended Agreement between the Company and Mr. Sanford, and by execution of the Sanford Letter Agreement the Company and
Mr. Sanford agreed that the Amended Agreement between the Company and Mr. Sanford would be deemed null and void. For purposes of

30

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Table of Contents

the
Sanford Letter Agreement, Cause means (i) gross negligence or willful misconduct in the performance of Mr. Sanford's duties to the Company where such gross negligence or willful
misconduct has resulted or is likely to result in substantial and material damage to the Company or its subsidiaries, (ii) repeated unexcused absences from the Company, (iii) commission
of any act of fraud with respect to the Company, or (iv) conviction of a felony or a crime involving moral turpitude and causing material harm to the standing and reputation of the Company, in
each case as determined by the Company's Board of Directors. Mr. Sanford's employment with the Company terminated on September 30, 2015.

On
July 20, 2015, we entered into an Amended Agreement with Johann Noor Mohamed, on substantially the same terms as the Amended Agreement previously entered into with
Mr. Sanford. The Amended Agreement between the Company and Mr. Noor Mohamed is null and void as further described below.

On
October 20, 2015, the Company and Mr. Noor Mohamed entered into a letter agreement, or the Noor Mohamed Letter Agreement, in connection with Mr. Noor Mohamed's
voluntary termination of his employment with the Company and the Company's desire to retain Mr. Noor Mohamed until October 30, 2015. Under the Noor Mohamed Letter Agreement, the Company
and Mr. Noor Mohamed agreed that Mr. Noor Mohamed's employment as Vice President and Corporate Controller of the Company would terminate on October 30, 2015. The Company and
Mr. Noor Mohamed also agreed that, subject to certain conditions, including the execution of a separation and release of claims agreement, (i) if Mr. Noor Mohamed remained an
employee of the Company from the date of the Noor Mohamed Letter Agreement through October 30, 2015 or (ii) if prior to October 30, 2015 Mr. Noor
Mohamed's employment with the Company was terminated by the Company for any reason other than due to Cause (as defined below) and such termination was not as a result of his death or disability, then
Mr. Noor Mohamed would receive a lump sum retention bonus in an amount equal to $66,667 (which is equal to the pro rata amount of his annual cash bonus target for fiscal year 2015 through
October 30, 2015). This period allowed the Company to proceed to search for a replacement and transition as appropriate. The Noor Mohamed Letter Agreement superseded any agreement concerning
similar subject matter dated prior to the date of the Noor Mohamed Letter Agreement, including but not limited to the Amended Agreement between the Company and Mr. Noor Mohamed, and by
execution of the Noor Mohamed Letter Agreement the Company and Mr. Noor Mohamed agreed that the Amended Agreement between the Company and Mr. Noor Mohamed would be deemed null and void.
For purposes of the Noor Mohamed Letter Agreement, Cause means (i) gross negligence or willful misconduct in the performance of Mr. Noor Mohamed's duties to the Company where such gross
negligence or willful misconduct has resulted or is likely to result in substantial and material damage to the Company or its subsidiaries, (ii) repeated unexcused absences from the Company,
(iii) commission of any act of fraud with respect to the Company, or (iv) conviction of a felony or a crime involving moral turpitude and causing material harm to the standing and
reputation of the Company, in each case as determined by the Company's Board of Directors. Mr. Noor Mohamed's employment with the Company terminated on October 30, 2015.

On
October 19, 2015, we entered into an Amended Agreement with Mark K. Oki, on substantially the same terms as the Amended Agreement previously entered into with
Mr. Sanford.

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 named executive officers, other than Messrs. Fischer, Noor Mohamed, Oki and Sanford, that provided 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 is provided below.

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The
Amended and Restated Change of Control and Severance Agreements provided that if a named executive officer's employment with the Company was terminated without Cause or by the named
executive officer for Good Reason and the termination did 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 named executive officer would 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
named 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 named 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 named executive officer's target bonus for the fiscal year in which the termination occurred for each month in which severance payments were made to the named
executive officer pursuant to (i) above; (iii) an additional pro-rated portion of the named executive officer's target bonus; (iv) up to 24 months of reimbursement for
premiums paid for COBRA coverage; (v) accelerated vesting of the named 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 named 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 provided that if a named executive officer's employment with the Company was terminated by the Company without
Cause or by the named executive officer for Good Reason within 24 months after a Change of Control of the Company, the named executive officer would 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 named 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 named 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 named 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 occurred for each month in which severance payments were made to the named executive
officer pursuant to (i) above; (iii) an additional pro-rated portion of the named 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 named executive officers
also provided for the automatic vesting in full of all outstanding equity awards held by the named executive officers upon the close of a Change of Control.

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



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On
July 20, 2015, we entered into an Amended Agreement, on substantially the same terms as the Amended Agreement previously entered into with Mr. Sanford, with each of our
named executive officers other than Messrs. Fischer, Oki and Sanford and Dr. Day, effective as of July 20, 2015. The Amended Agreements with such named executive officers amended,
restated and replaced the Amended and Restated Change of Control and Severance Agreements previously entered into and described above. Dr. Day previously entered into an Amended and Restated
Change of Control and Severance Agreement, which is null and void as further described below.

The
Amended Agreement provides that if the named executive officer's employment with the Company is terminated without Cause or by the named executive officer for Good Reason and the
termination does not occur within three months before a Change of Control or 18 months after a Change of Control (as such terms are defined in the Amended Agreement) of the Company, the named
executive officer will receive, subject to signing a release of claims in favor of the Company, (i) monthly severance payments equal to the monthly salary the named executive officer was
receiving immediately prior to the termination date for nine months, (ii) monthly severance payments equal to 1/12th of the named executive officer's target bonus for the
fiscal year in which the termination occurs for nine months, (iii) an additional pro rata portion of the named executive officer's target bonus for the fiscal year in which the termination
occurs calculated based on the number of months during such fiscal year the
named executive officer was employed by the Company (and a prior fiscal year to the extent the bonus for such prior fiscal year has not yet been declared and paid by the Company) multiplied by the
average of the actual bonus percentage payouts in the two most recent years prior to the year of termination, (iv) up to nine months of reimbursement for premiums paid for COBRA coverage, and
(vi) any then-outstanding and unvested equity awards held by the named executive officer are subject to 50% accelerated vesting.

The
Amended Agreement also provides that if the named executive officer's employment with the Company is terminated by the Company without Cause or by the named executive officer for
Good Reason within three months before a Change of Control or 18 months after a Change of Control, the named executive officer will receive, subject to signing a release of claims in favor of
the Company, (i) monthly severance payments equal to the monthly salary the named executive officer was receiving immediately prior to the Change of Control for 18 months,
(ii) monthly severance payments equal to 1/12th of the named executive officer's target bonus for the fiscal year in which the termination occurs for 18 months,
(iii) an additional pro rata portion of the named executive officer's target bonus for the fiscal year in which the termination occurs calculated based on the number of months during such
fiscal year the named executive officer was employed by the Company (and a prior fiscal year to the extent the bonus for such prior fiscal year has not yet been declared and paid by the Company)
multiplied by the average of the actual bonus percentage payouts in the two most recent years prior to the year of termination, and (iv) up to 18 months of reimbursement for premiums
paid for COBRA coverage. The Amended Agreement also provides that if the named executive officer's employment is terminated without Cause or for Good Reason within three months before a Change of
Control or 18 months after a Change of Control, the vesting and exercisability of all equity awards granted to the named executive officer by the Company shall automatically vest in full and
become immediately exercisable.

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For purposes of the Amended Agreement, a "Change of Control" occurs when:



On
July 20, 2015, the Company entered into a letter agreement regarding retention benefits, or the Day Letter Agreement, with Dr. Day. Under the Day Letter Agreement and
subject to certain conditions, including the execution of a separation and release of claims agreement, (i) if Dr. Day remained an employee of the Company from the date of the Day Letter
Agreement through December 31, 2015 or (ii) if prior to December 31, 2015 Dr. Day's employment with the Company was terminated for any reason other than due to Cause (as
defined below) and such termination was not as a result of his death or disability, then Dr. Day would receive the following: (i) a lump sum cash payment in an amount equal to $616,000
(which is equal to one year of his base salary and one year of his target bonus); (ii) a lump sum cash bonus for calendar year 2015 that will be a minimum of $119,150 and a maximum of $149,600
based upon the achievement of certain milestones; and (iii) up to 12 months of reimbursement for premiums paid for COBRA coverage (or a taxable lump sum payment in an amount equal to the
monthly premiums paid for COBRA in the event the Company cannot provide reimbursement benefits without potentially violating applicable laws). In addition, under the Day Letter Agreement, the Company
and Dr. Day agreed that his employment would terminate on December 31, 2015. The Day Letter Agreement superseded any agreement concerning similar subject matter dated prior to the date
of the Day Letter Agreement, including but not limited to the Amended and Restated Change of Control and Severance Agreement dated July 1, 2013 between the Company and Dr. Day, or the
Day Severance Agreement, and by execution of the Day Letter Agreement the Company and Dr. Day agreed that the Day Severance Agreement would be deemed null and void. For purposes of the Day
Letter Agreement, Cause means (i) gross negligence or willful misconduct in the performance of Dr. Day's duties to the Company where such gross negligence or willful misconduct has
resulted or is likely to result in substantial and material damage to the Company or its subsidiaries, (ii) repeated unexcused absences from the Company, (iii) commission of any act of
fraud with respect to the Company, or (iv) conviction of a felony or a crime involving moral turpitude and causing material harm to the standing and reputation of the Company, in each case as
determined by the Company's Board of Directors. Dr. Day's employment with the Company terminated on December 31, 2015.

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Director Compensation

The following table sets forth the compensation paid by us during the fiscal year ended December 31, 2015 to our non-employee
directors:

Name

Year

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

Stock
Awards($)(2)

Option
Awards($)(3)

Total($)Samuel F. Colin, M.D.(4)


2015


3,178








3,178Alexander J. Denner, Ph.D.(4)(5)


2015


43,105





42,843


85,948Johannes J.P. Kastelein, M.D., Ph.D.(4)


2015


6,889








6,889David Y. Norton(4)(5)


2015


71,216





42,843


114,059Jorge Plutzky, M.D.(4)(5)


2015


40,000





42,843


82,843Eric W. Roberts(4)(5)


2015


11,753





13,563


25,316Herman Rosenman(4)(5)


2015


55,000





42,843


97,843Allan L. Shaw(4)(5)


2015


13,808





13,563


27,371Mayuran Sriskandarajah(4)(5)


2015


13,037





13,563


26,600


(1)For
fiscal year 2015, the cash compensation arrangement for non-employee directors was as follows, with all annual retainers paid in equal quarterly
installments: (i) non-employee directors will receive $40,000 per annum; (ii) the Chairman of the Board of Directors will receive an additional $25,000 per annum; (iii) the
Chairman of the Audit Committee will receive an additional $15,000 per annum; (iii) the Chairman of the Compensation Committee will receive an additional $12,000 per annum; and (iv) the
Chairman of the Nominating and Governance Committee will receive an additional $7,500 per annum.(2)As
of December 31, 2015, there were no restricted stock units outstanding for any of our non-employee directors.(3)As
of December 31, 2015, the aggregate number of stock options outstanding for each non-employee director was as follows:


Name

Stock options
outstanding
at 12/31/15Samuel F. Colin, M.D.


Alexander J. Denner, Ph.D.


44,444Johannes J.P. Kastelein, M.D., Ph.D.


David Y. Norton


75,000Jorge Plutzky, M.D.


75,000Eric W. Roberts


25,000Herman Rosenman


75,000Allan L. Shaw


25,000Mayuran Sriskandarajah


25,000


(4)Messrs. Roberts,
Shaw and Sriskandarajah have served as directors of the Company since September 2015, Messrs. Norton and Rosenman have served
as directors of the Company since July 2013, and Dr. Plutzky has served as a director of the Company since May 2013. Dr. Colin served as a director of the Company from July 2013 to
January 2015. Dr. Denner served as a director of the Company from July 2013 to November 2015. Dr. Kastelein served as a director of the Company from July 2013 to March 2015.(5)From
January 2015 to October 2015, (i) the Audit Committee consisted of Dr. Denner and Messrs. Norton and Rosenman, with
Mr. Rosenman designated as the Chairman of the Audit


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Committee;
and (ii) the Nominating and Governance Committee consisted of Drs. Denner and Plutzky and Mr. Norton, with Mr. Norton designated as the Chairman of the Nominating and
Governance Committee. Since October 2015, (i) the Audit Committee has consisted of Messrs. Norton, Rosenman and Shaw, with Mr. Rosenman designated as the Chairman of the Audit
Committee; and (ii) the Nominating and Governance Committee has consisted of Messrs. Norton, Roberts and Sriskandarajah, with Mr. Sriskandarajah designated as the Chairman of the
Nominating and Governance Committee. From January 2015 to March 2015, the Compensation Committee consisted of Messrs. Norton and Rosenman, with Mr. Norton designated as the Chairman of
the Compensation Committee. From March 2015 to October 2015, the Compensation Committee consisted of Dr. Denner and Messrs. Norton and Rosenman, with Dr. Denner designated as the
Chairman of the Compensation Committee. Since October 2015, the Compensation Committee has consisted of Messrs. Roberts, Rosenman and Shaw, with Mr. Shaw designated as the Chairman of
the Compensation Committee. Mr. Norton has served as the Chairman of the Board of Directors since September 2014.


The
cash and equity compensation arrangement for our non-employee directors was approved by the Board on August 14, 2013, and was effective as of July 19, 2013.

Under
the cash compensation arrangement, each non-employee director will receive an annual retainer of $40,000, with the Chairman of the Board of Directors receiving an additional
$25,000 per year, the Chairman of the Audit Committee receiving an additional $15,000 per year, the Chairman of the Compensation Committee receiving an additional $12,000 per year and the Chairman of
the Nominating and Governance Committee receiving an additional $7,500 per year. The annual retainers are paid in equal quarterly installments.

Under
the equity compensation arrangement, following the initial appointment or election to the Board, each non-employee director will be granted a non-qualified stock option to purchase
25,000 shares of Common Stock with an exercise price equal to the fair market value of the Company's Common Stock as of the date of grant, or the Initial Option. Initial Options (i) vest
monthly over three years on each monthly anniversary date commencing on the date service as a non-employee director began and will continue to vest so long as the non-employee director continued
service to the Company on such dates; (ii) have a seven-year term; and (iii) have a six-month post-termination exercise period.

Thereafter,
provided that the non-employee director is re-elected to the Board and has served as a director for at least six months as of such election date, each such non-employee
director will be granted on the date of the Annual Meeting of Stockholders a non-qualified stock option to purchase a number of shares of Common Stock to be determined by the Board with an exercise
price equal to the fair market value of the Company's Common Stock as of the date of grant, or the Subsequent Option. Subsequent Options (i) vest monthly over one year following the date of
grant so long as the non-employee director continued service to the Company on such dates; (ii) have a seven year term; and (iii) have a six month post-termination exercise period.

As
previously disclosed, in 2014, the Board did not issue any options to our non-employee directors; however, on May 27, 2015, the Compensation Committee of the Board granted each
non-employee director Subsequent Options to purchase 25,000 shares of the Company's Common Stock. Further, in accordance with the equity compensation arrangement, on October 30, 2015, the
Compensation Committee of the Board granted Messrs. Roberts, Shaw and Sriskandarajah Initial Options to purchase 25,000 shares of the Company's Common Stock and also granted
Messrs. Norton and Rosenman and Drs. Denner and Plutzky Subsequent Options to purchase 25,000 shares of the Company's Common Stock.

Effective
as of July 19, 2013, options granted under the 2010 Equity Incentive Plan to non-employee directors have a term of seven years unless terminated sooner upon termination
of status as a director or otherwise pursuant to the 2010 Equity Incentive Plan. Such options are transferable by

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the
non-employee director only in certain limited circumstances, and each option is exercisable during the lifetime of the non-employee director only by such non-employee director or a permitted
transferee.

Compensation Committee Interlocks and Insider Participation

None of our directors who served on our Compensation Committee during 2015 is currently or has been, at any time since our formation,
one of our officers or employees. During 2015, no executive officer served as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving
on our Board or our Compensation Committee. The Compensation Committee currently consists of directors Roberts, Rosenman and Shaw. None of the members of our Compensation Committee during 2015
currently has or has had any relationship or transaction with a related person requiring disclosure pursuant to Item 404 of Regulation S-K.

Compensation Committee Report

The information contained in this report shall not be deemed to be "soliciting material" or "filed" with the
SEC or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates it by reference into a
document filed under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

The
Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on this review and discussion, the Compensation Committee
recommended to
the Board of Directors that the Compensation Discussion and Analysis be included in this Amendment No. 1 to Annual Report on Form 10-K for the year ended December 31, 2015.

COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORSEric W. Roberts
Herman Rosenman
Allan L. Shaw


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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, 2015, that were approved by our stockholders was as follows:

Plan Category

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

Weighted
Average
Exercise
Price of
Outstanding
Options

Number of
Shares
Remaining
Available
for Future
Issuance(3)Equity compensation plans approved by stockholders(1)


7,162,536

$
6.38


8,569,091Equity compensation plans not approved by stockholders(2)




$
N/A


325,000​
​
​
​
​
​
​
​
​
​
​Total


7,162,536

$
6.38


8,894,091​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


(1)Consists
of three plans: our 1994 Employee Stock Purchase Plan, our 2001 Stock Option Plan and our 2010 Equity Incentive Plan.(2)On
April 30, 2010, our Board granted an option to purchase 400,000 shares of our Common Stock, or the Inducement Grant, to Michael P. Miller, our
former Senior Vice President and Chief Commercial Officer. The Inducement Grant was granted outside of the 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.(3)Includes
8,585,900 shares for the 2010 Equity Incentive Plan and 308,191 shares for the 1994 Employee Stock Purchase Plan.


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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 15, 2016 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
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% HoldersNorth Tide Capital, LLC(2)


13,587,460


13.1
%BlackRock, Inc.(3)


6,332,644


6.1
%Aspen Investment Fund LLC(4)


9,967,245


9.6
%Van Herk Investments B.V.(5)


5,470,799


5.3
%Non-Employee DirectorsDavid Y. Norton(6)


64,694


*Jorge Plutzky, M.D.(7)


64,167


*Eric W. Roberts(8)


26,155


*Herman Rosenman(9)


68,194


*Allan L. Shaw(10)


5,555


*Mayuran Sriskandarajah(11)


5,555


*Named Executive Officers(Current Executive Officers)Seth H. Z. Fischer(12)


1,149,903


1.1
%Mark K. Oki





*John L. Slebir(13)


448,479


*Santosh T. Varghese, M.D.(14)


346,861


*Named Executive Officers(Former Executive Officers)Wesley W. Day, Ph.D.(15)


426,657


*Johann Noor Mohamed(16)


1,371


*Svai S. Sanford(17)


37,581


*All directors and executive officers as a group (13 persons)(18)


2,645,172


2.5
%


*Less
than 1%(1)Applicable
percentage ownership is based on 104,089,388 shares of Common Stock outstanding as of April 15, 2016. 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 and restricted
stock units held by that person that will be exercisable/vested within 60 days of April 15, 2016 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 shown as beneficially owned
by them, subject to community property laws, where applicable, and except as indicated in the other footnotes to this table.


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(2)Consists
of 13,587,460 shares of Common Stock as to which North Tide Capital, LLC and its affiliates (together "North Tide Capital") have shared
voting and dispositive power. Beneficial ownership information is based on a Form 4 filed with the SEC on April 5, 2016. The address of North Tide Capital is 500 Boylston Street,
Suite 1860, Boston, Massachusetts 02116.(3)BlackRock, Inc.
and its affiliates (together "BlackRock") have sole voting power as to 6,180,683 shares of Common Stock and sole dispositive power as
to 6,332,644 shares of Common Stock. Beneficial ownership information is based on a Schedule 13G/A filed with the SEC on January 27, 2016. The address of BlackRock is 55 East
52nd Street, New York, New York 10055.(4)Consists
of 9,967,245 shares of Common Stock as to which Aspen Investment Fund LLC and its affiliates (together "Aspen Investment") have shared
voting and dispositive power. Beneficial ownership information is based on a Schedule 13D filed with the SEC on May 28, 2014. The address of Aspen Investment is 16192 Coastal Highway,
Lewes, Delaware 19958.(5)Van
Herk Investments B.V. and its affiliates (together "Van Herk Investments B.V.") have shared voting and dispositive power as to 5,470,799
shares of Common Stock. Beneficial ownership information is based on a Schedule 13G filed with the SEC on August 24, 2015. The address of Van Herk Investments B.V. is
Lichtenauerlaan 30, 3062 ME Rotterdam, The Netherlands.(6)Consists
of (i) 1,500 shares of Common Stock and (ii) 63,194 options to purchase shares of Common Stock exercisable within 60 days of
April 15, 2016.(7)Consists
of (i) 973 shares of Common Stock and (ii) 63,194 options to purchase shares of Common Stock exercisable within 60 days of
April 15, 2016.(8)Consists
of (i) 20,600 shares of Common Stock and (ii) 5,555 options to purchase shares of Common Stock exercisable within 60 days of
April 15, 2016.(9)Consists
of (i) 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 and (ii) 63,194 options to purchase shares of Common Stock exercisable within 60 days of April 15, 2016.(10)Consists
of 5,555 options to purchase shares of Common Stock exercisable within 60 days of April 15, 2016.(11)Consists
of 5,555 options to purchase shares of Common Stock exercisable within 60 days of April 15, 2016.(12)Consists
of (i) 3,080 shares of Common Stock, (ii) 20,625 restricted stock units vested within 60 days of April 15, 2016, and
(iii) 1,126,198 options to purchase shares of Common Stock exercisable within 60 days of April 15, 2016.(13)Consists
of (i) 37,105 shares of Common Stock, (ii) 9,493 restricted stock units vested within 60 days of April 15, 2016, and
(iii) 401,881 options to purchase shares of Common Stock exercisable within 60 days of April 15, 2016.(14)Consists
of (i) 26,114 shares of Common Stock, (ii) 925 restricted stock units vested within 60 days of April 15, 2016, and
(iii) 319,822 options to purchase shares of Common Stock exercisable within 60 days of April 15, 2016.


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(15)Consists
of (i) 18,305 shares of Common Stock and (ii) 408,352 options to purchase shares of Common Stock exercisable within 60 days
of April 15, 2016.(16)Consists
of 1,371 shares of Common Stock.(17)Consists
of 37,581 shares of Common Stock.(18)Includes
(i) 31,043 restricted stock units vested within 60 days of April 15, 2016 and (ii) 2,462,500 options to purchase
shares of Common Stock exercisable within 60 days of April 15, 2016.


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, have Second 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 Agreement") provides for certain benefits in the event of a Change of Control. The above referenced agreements recognize 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 recognize 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 when the threat or occurrence of a Change of Control may
exist. These agreements are discussed in more detail in the sections entitled "Compensation and Discussion AnalysisEmployment Agreement" and "Potential Payments Upon Termination or Change
of Control for each Named Executive Officer" found elsewhere in 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, or 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 former
directors, was appointed to our Board in connection with the Settlement Agreement and is Senior Managing Director at First Manhattan. Dr. Colin served as a director of the Company from
July 19, 2013 to January 22, 2015.

Board Independence

As required under the applicable listing standards of the NASDAQ Stock 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
six of our seven directors each satisfy the director independence standards of the NASDAQ Stock 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 any of the committees of our Board, each of which is composed 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 2015 and 2014 and fees billed for audit-related services, tax services and all other services rendered by OUM for these periods:

2015

2014Audit Fees(1)

$
496,519

$
471,565Audit-Related Fees(2)





Tax Fees(3)





All Other Fees(4)





​
​
​
​
​
​
​
​Total Fees

$
496,519

$
471,565​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​


(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: There were no other fees billed by OUM during these periods.


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 2015, 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 22, 2016

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VIVUS, INC.  AMENDMENT NO. 1 TO ANNUAL REPORT ON FORM 10-K FOR  THE YEAR ENDED DECEMBER 31, 2015  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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