UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13
or 15(d) of
The Securities Exchange
Act of 1934
Date of Report (Date of earliest
event reported)
July 13,
2006
VIVUS, INC.
(Exact name of registrant as
specified in its charter)
Delaware
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000-23490
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94-3136179
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(State or other jurisdiction of
incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.)
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1172 CASTRO STREET
MOUNTAIN VIEW, CA 94040
(Address of principal executive offices, including zip code)
(650) 934-5200
(Registrants telephone number, including
area code)
N/A
(Former name or former address, if changed
since last report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive
Agreement
On July 12, 2006, the Board of Directors (the Board) of VIVUS, Inc.
(the Company) adopted an amendment to the VIVUS, Inc. 2001 Stock Option
Plan (the Plan) to add the ability to issue Restricted Stock Units (RSUs)
under the Plan, as described in more detail below.
Since its adoption in 2001, the Plan has permitted the Company to make
grants of restricted stock. In the case of such an award, the entire number of
shares subject to a restricted stock award would be issued at the time of grant.
Such shares could be subject to vesting provisions based on time or other
conditions specified by the Board of Directors or an authorized committee of
the Board. The Company would have the right to repurchase unvested shares
subject to a restricted stock award if the grantees service to the Company
terminated prior to full vesting of the award. Until repurchased, such unvested
shares would be considered outstanding for dividend, voting and other purposes.
In contrast to restricted stock awards, the newly-permitted RSUs would
represent an obligation of the Company to issue unrestricted shares of common
stock to the grantee only when and to the extent that the vesting criteria of
the award are satisfied. As in the case of restricted stock awards, vesting
criteria for RSUs can be based on time or other conditions specified by the
Board or an authorized committee of the Board. However, until vesting occurs,
the grantee is not entitled to any stockholder rights with respect to the
unvested shares.
In addition to approving the amendment to the Plan, the Board approved
a form of agreement pursuant to which RSUs could be granted. The Plan as
amended and the form of Notice of Grant and Restricted Stock Unit Agreement are
attached to this report as Exhibits 10.1 and 10.2, respectively.
Item
9.01. Financial Statements and Exhibits
(d)
Exhibits.
Exhibit No.
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Description
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10.1
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VIVUS, Inc. 2001
Stock Option Plan (As Amended July 12, 2006)
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10.2
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Form of Notice of Grant and Restricted Stock
Unit Agreement for the VIVUS, Inc. 2001 Stock Option Plan (As Amended
July 12, 2006)
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SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
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VIVUS, INC.
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By:
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/s/ Timothy E. Morris
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Timothy E. Morris
Vice President and Chief Financial Officer
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Date: July 13, 2006
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EXHIBIT INDEX
Exhibit No.
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Description
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10.1
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VIVUS, Inc. 2001 Stock Option Plan (As Amended
July 12, 2006)
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10.2
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Form of Notice of Grant and Restricted Stock
Unit Agreement for the VIVUS, Inc. 2001 Stock Option Plan (As Amended
July 12, 2006)
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EXHIBIT 10.1
VIVUS, INC.
2001 STOCK OPTION PLAN
(As Amended on July 12, 2006)
1. Purpose
of the Plan. The purpose of this 2001 Stock Option Plan is to:
· attract
and retain the best available personnel for positions of substantial
responsibility;
· provide
additional incentive to Employees, Directors and Consultants; and
· promote
the success of the Companys business.
Awards granted
under the Plan may be Incentive Stock Options, Nonstatutory Stock Options, Restricted
Stock, and Restricted Stock Units as determined by the Administrator at the
time of grant.
2. Definitions.
As used herein, the following definitions shall apply:
(a) Administrator means the
Board or any of its Committees as shall be administering the Plan, in
accordance with Section 4 of the Plan.
(b) Applicable Laws means the
requirements relating to the administration of equity-based awards under U.S.
state corporate laws, U.S. federal and state securities laws, the Code, any
stock exchange or quotation system on which the Common Stock is listed or
quoted and the applicable laws of any foreign country or jurisdiction where Awards
are, or will be, granted under the Plan.
(c) Award means, individually or
collectively, a grant under the Plan of Options, Restricted Stock and
Restricted Stock Units.
(d) Award Agreement means the
written or electronic agreement setting forth the terms and provisions
applicable to each Award granted under the Plan, including any Option Agreement
and Restricted Stock Purchase Agreement. The Award Agreement is subject to the
terms and conditions of the Plan.
(e) Board means the Board of
Directors of the Company.
(f) Change in Control means the
occurrence of any of the following events:
(i) Any person (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial
owner (as defined in Rule 13d-3 of the Exchange Act), directly or
indirectly, of securities of the Company representing fifty percent (50%) or
more of the total voting power represented by the Companys then outstanding
voting securities;
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(ii) The consummation of the sale or disposition
by the Company of all or substantially all of the Companys assets;
(iii) A change in the composition of the Board
occurring within a two-year period, as a result of which fewer than a majority
of the Directors are Incumbent Directors. Incumbent Directors means Directors
who either (A) are Directors as of the date hereof, or (B) are
elected, or nominated for election, to the Board with the affirmative votes of
at least a majority of the Incumbent Directors at the time of such election or
nomination (but will not include an individual whose election or nomination is
in connection with an actual or threatened proxy contest relating to the
election of Directors to the Company); or
(iv) The consummation of a merger or consolidation
of the Company with any other corporation, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity or its parent) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity or
its parent outstanding immediately after such merger or consolidation.
(g) Code means the Internal
Revenue Code of 1986, as amended.
(h) Committee means a committee
of Directors appointed by the Board in accordance with Section 4 of the
Plan.
(i) Common Stock means the
Common Stock of the Company.
(j) Company means VIVUS, Inc.,
a Delaware corporation.
(k) Consultant means any natural
person, including an advisor, engaged by the Company or a Parent or Subsidiary
to render services to such entity.
(l) Director means a member of
the Board.
(m) Disability means total and
permanent disability as defined in Section 22(e)(3) of the Code.
(n) Employee means any person,
including Officers and Directors, employed by the Company or any Parent or
Subsidiary of the Company. A Service Provider shall not cease to be an Employee
in the case of (i) any leave of absence approved by the Company, or (ii) transfers
between locations of the Company or between the Company, its Parent, any
Subsidiary, or any successor. For purposes of Incentive Stock Options, no such
leave may exceed ninety (90) days, unless reemployment upon expiration of such
leave is guaranteed by statute or contract. If reemployment upon expiration of
a leave of absence approved by the Company is not so guaranteed, then
three (3) months following the 91st day of such leave any Incentive Stock Option
held by the Optionee shall cease to be treated as an Incentive Stock Option and
shall be treated for tax purposes as a Nonstatutory Stock Option. Neither
service as a Director nor payment of a directors fee by the Company shall be
sufficient to constitute employment by the Company.
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(o) Exchange Act means the
Securities Exchange Act of 1934, as amended.
(p) Fair Market Value means, as
of any date, the value of Common Stock determined as follows:
(i) If the Common Stock is listed on any
established stock exchange or a national market system, including without
limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The
Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the
Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high bid
and low ask prices for the Common Stock on the day of determination, as
reported in The Wall Street Journal or such other
source as the Administrator deems reliable; or
(iii) In the absence of an established market for
the Common Stock, the Fair Market Value shall be determined in good faith by
the Administrator.
(q) Incentive Stock Option means
an Option intended to qualify as an incentive stock option within the meaning
of Section 422 of the Code and the regulations promulgated thereunder.
(r) Inside Director
means a Director who is an Employee.
(s) Nonstatutory Stock Option
means an Option not intended to qualify as an Incentive Stock Option.
(t) Notice of Grant means a
written or electronic notice evidencing certain terms and conditions of an
individual Award grant. The Notice of Grant is part of the Award Agreement.
(u) Officer means a person who
is an officer of the Company within the meaning of Section 16 of the
Exchange Act and the rules and regulations promulgated thereunder.
(v) Option means a stock option
granted pursuant to the Plan.
(w) Option Agreement means an agreement
between the Company and an Optionee evidencing the terms and conditions of an
individual Option grant. The Option Agreement is subject to the terms and
conditions of the Plan.
(x) Option Exchange Program
means a program whereby outstanding Options are surrendered in exchange for
Options with a lower exercise price.
(y) Optioned Stock means the
Common Stock subject to an Award.
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(z) Optionee means the holder
of an outstanding Award granted under the Plan.
(aa) Outside Director
means a Director who is not an Employee.
(bb) Parent means a parent
corporation, whether now or hereafter existing, as defined in Section 424(e) of
the Code.
(cc) Period of Restriction means
the period during which the transfer of Shares of Restricted Stock are subject
to restrictions and therefore, the Shares are subject to a substantial risk of
forfeiture. Such restrictions may be based on the passage of time, the
achievement of target levels of performance, or the occurrence of other events
as determined
by the Administrator.
(dd) Plan means this 2001 Stock
Option Plan.
(ee) Restricted Stock means Shares issued pursuant to an Award of Restricted
Stock under Section 7 of the Plan, or issued pursuant to the early exercise
of an Option.
(ff) Restricted Stock Purchase Agreement
means a written agreement between the Company and the Optionee evidencing the
terms and restrictions applying to stock purchased under a Stock Purchase Right.
The Restricted Stock Purchase Agreement is subject to the terms and conditions
of the Plan and the Notice of Grant.
(gg) Restricted Stock Unit means a bookkeeping entry representing an
amount equal to the Fair Market Value of one Share, granted pursuant to Section 8.
Each Restricted Stock Unit represents an unfunded and unsecured obligation of
the Company.
(hh) Rule 16b-3 means Rule 16b-3
of the Exchange Act or any successor to Rule 16b-3, as in effect
when discretion is being exercised with respect to the Plan.
(ii) Section 16(b) means
Section 16(b) of the Exchange Act.
(jj) Service Provider means an
Employee, Director or Consultant.
(kk) Share means a share of the
Common Stock, as adjusted in accordance with Section 11 of the Plan.
(ll) Subsidiary means a subsidiary
corporation, whether now or hereafter existing, as defined in Section 424(f) of
the Code.
3. Stock Subject to the Plan.
Subject to the provisions of Section 11 of the Plan, the maximum aggregate
number of Shares that may be optioned and sold under the Plan is One Million
(1,000,000) Shares plus (a) any
Shares that have been reserved but not issued under the Companys 1991
Incentive Stock Plan (the 1991 Plan) as of the date of stockholder approval
of this Plan; (b) any Shares returned to the 1991 Plan as a result of
termination of options or repurchase of Shares issued under the 1991 Plan; and (c) an
annual increase to be added on the first day of the Companys fiscal year
beginning in 2003, equal to the least of (i) one million (1,000,000)
shares, (ii) two and one-half percent (2.5%) of the outstanding shares on
such date, or (iii) an amount determined by the Board. The Shares may be
authorized, but unissued, or reacquired Common Stock.
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If an Award expires or becomes unexercisable without
having been exercised in full, or is surrendered pursuant to an Option Exchange
Program, or, with respect
to Restricted Stock and Restricted Stock Units, is forfeited to or repurchased
by the Company, the unpurchased Shares (or for Awards other than Options, the forfeited, repurchased or
unissued Shares) which were subject thereto shall become available for
future grant or sale under the Plan (unless the Plan has terminated); provided, however, that if unvested Shares
issued pursuant to Awards of Restricted Stock and Restricted Stock Units are
repurchased by the Company or are forfeited to the Company, such Shares will
become available for future grant under the Plan. To the extent an Award under the Plan is paid
out in cash rather than Shares, such cash payment will not result in reducing
the number of Shares available for issuance under the Plan.
4. Administration
of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. Different
Committees with respect to different groups of Service Providers may administer
the Plan.
(ii) Section 162(m). To the extent
that the Administrator determines it to be desirable to qualify Options granted
hereunder as performance-based compensation within the meaning of Section 162(m) of
the Code, the Plan shall be administered by a Committee of two or more Outside
Directors within the meaning of Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent
desirable to qualify transactions hereunder as exempt under Rule 16b-3,
the transactions contemplated hereunder shall be structured to satisfy the
requirements for exemption under Rule 16b-3.
(iv) Other Administration. Other than as
provided above, the Plan shall be administered by (A) the Board, or (B) a
Committee, which committee shall be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject
to the provisions of the Plan, and in the case of a Committee, subject to the
specific duties delegated by the Board to such Committee, the Administrator
shall have the authority, in its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Awards
may be granted hereunder;
(iii) to determine the number of shares of Common
Stock to be covered by each Award granted hereunder;
(iv) to approve forms of agreement for use under
the Plan;
(v) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Award granted hereunder. Such
terms and conditions include, but are not limited to, the exercise price, the
time or times when Awards may be exercised (which may be based on
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performance criteria), any vesting acceleration or
waiver of forfeiture restrictions, and any restriction or limitation regarding
any Award or the shares of Common Stock relating thereto, based in each case on
such factors as the Administrator, in its sole discretion, shall determine;
(vi) to reduce the exercise price of any Award to
the then current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Award shall have declined since the date the Award was granted;
(vii) to institute an Option Exchange Program;
(viii) to
construe and interpret the terms of the Plan and awards granted pursuant to the
Plan;
(ix) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating
to sub-plans established for the purpose of satisfying applicable foreign laws;
(x) to modify or amend each Award (subject to Section 14(c) of the Plan), including
the discretionary authority to extend the post-termination exercisability
period of Options longer than is otherwise provided for in the Plan;
(xi) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Award that number of Shares having a Fair Market
Value equal to the minimum amount required to be withheld. The Fair Market
Value of the Shares to be withheld shall be determined on the date that the
amount of tax to be withheld is to be determined. All elections by an Optionee
to have Shares withheld for this purpose shall be made in such form and under
such conditions as the Administrator may deem necessary or advisable;
(xii) to authorize any person to execute on behalf
of the Company any instrument required to effect the grant of an Award
previously granted by the Administrator;
(xiii) to make all other determinations deemed
necessary or advisable for administering the Plan.
(c) Effect of Administrators Decision.
The Administrators decisions, determinations and interpretations shall be
final and binding on all Optionees and any other holders of Awards.
5. Eligibility.
Nonstatutory Stock Options, Restricted Stock and Restricted Stock Units may be
granted to Service Providers. Incentive Stock Options may be granted only to
Employees.
6. Stock
Options.
(a) Limitations.
(i) Each Option shall be designated in the Award
Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such
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designation, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 6(a)(i),
Incentive Stock Options shall be taken into account in the order in which they
were granted. The Fair Market Value of the Shares shall be determined as of the
time the Option with respect to such Shares is granted.
(ii) Neither the Plan nor any Award shall confer
upon an Optionee any right with respect to continuing the Optionees
relationship as a Service Provider with the Company, nor shall they interfere
in any way with the Optionees right or the Companys right to terminate such
relationship at any time, with or without cause.
(iii) The following limitations shall apply to
grants of Options:
(A) No Service Provider shall be granted,
in any fiscal year of the Company, Options to purchase more than one million
(1,000,000) of the outstanding Shares on the date granted.
(B) In connection with his or her initial
service, a Service Provider may be granted Options to purchase additional
Shares up to an amount equal to one million (1,000,000) Shares, which shall not
count against the limit set forth in subsection (i) above.
(C) The
foregoing limitations shall be adjusted proportionately in connection with any
change in the Companys capitalization as described in Section 11.
(D) If an Option is cancelled in the same
fiscal year of the Company in which it was granted (other than in connection
with a transaction described in Section 11), the cancelled Option will be
counted against the limits set forth in subsections (i) and (ii) above.
For this purpose, if the exercise price of an Option is reduced, the
transaction will be treated as a cancellation of the Option and the grant of a
new Option.
(b) Term of Option. The term of
each Option shall be stated in the Award Agreement. In the case of an Incentive
Stock Option, the term shall be ten (10) years from the date of grant or
such shorter term as may be provided in the Award Agreement. Moreover, in the
case of an Incentive Stock Option granted to an Optionee who, at the time the
Incentive Stock Option is granted, owns stock representing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any Parent or Subsidiary, the term of the Incentive Stock Option
shall be five (5) years from the date of grant or such shorter term as may
be provided in the Award Agreement.
(c) Option Exercise Price and
Consideration.
(i) Exercise Price. The per share
exercise price for the Shares to be issued pursuant to exercise of an Option
shall be determined by the Administrator, subject to the following:
(A) In the case of an Incentive Stock
Option
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a) granted to an Employee who, at the
time the Incentive Stock Option is granted, owns stock representing more than
ten percent (10%) of the voting power of all classes of stock of the Company or
any Parent or Subsidiary, the per Share exercise price shall be no less than
110% of the Fair Market Value per Share on the date of grant.
b) granted to any Employee other than
an Employee described in paragraph (A) immediately above, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
(B) In the case of a Nonstatutory Stock
Option, the per Share exercise price shall be determined by the Administrator. In
the case of a Nonstatutory Stock Option intended to qualify as performance-based
compensation within the meaning of Section 162(m) of the Code, the
per Share exercise price shall be no less than 100% of the Fair Market Value
per Share on the date of grant.
(C) Notwithstanding the foregoing,
Options may be granted with a per Share exercise price of less than 100% of the
Fair Market Value per Share on the date of grant pursuant to a merger or other
corporate transaction.
(ii) Waiting Period and Exercise Dates. At
the time an Option is granted, the Administrator shall fix the period within
which the Option may be exercised and shall determine any conditions that must
be satisfied before the Option may be exercised.
(iii) Form of Consideration. The
Administrator shall determine the acceptable form of consideration for
exercising an Option, including the method of payment. In the case of an
Incentive Stock Option, the Administrator shall determine the acceptable form
of consideration at the time of grant. Such consideration may consist entirely
of:
(A) cash;
(B) check;
(C) promissory note;
(D) other Shares which, in the case of
Shares acquired directly or indirectly from the Company, (A) have been
owned by the Optionee for more than six (6) months on the date of
surrender, and (B) have a Fair Market Value on the date of surrender equal
to the aggregate exercise price of the Shares as to which said Option shall be
exercised;
(E) consideration received by the Company
under a cashless exercise program implemented by the Company in connection with
the Plan;
(F) a reduction in the amount of any
Company liability to the Optionee, including any liability attributable to the
Optionees participation in any Company-sponsored deferred compensation program
or arrangement;
(G) any combination of the foregoing
methods of payment; or
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(H) such other consideration and method of
payment for the issuance of Shares to the extent permitted by Applicable Laws.
(d) Exercise of Option.
(i) Procedure for Exercise; Rights as a
Stockholder. Any Option granted hereunder shall be exercisable according to
the terms of the Plan and at such times and under such conditions as determined
by the Administrator and set forth in the Award Agreement. Unless the
Administrator provides otherwise, vesting of Options granted hereunder shall be
suspended during any unpaid leave of absence. An Option may not be exercised
for a fraction of a Share.
An Option shall be deemed exercised when the Company
receives: (i) written or electronic notice of exercise (in accordance with
the Award Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised, together
with any required tax withholding. Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Award Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the Shares
are issued (as evidenced by the appropriate entry on the books of the Company
or of a duly authorized transfer agent of the Company), no right to vote or
receive dividends or any other rights as a stockholder shall exist with respect
to the Optioned Stock, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided
in Section 11 of the Plan.
Exercising an Option in any manner shall decrease the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.
(ii) Termination of Relationship as a Service
Provider. If an Optionee ceases to be a Service Provider, other than upon
the Optionees death or Disability, the Optionee may exercise his or her Option
within such period of time as is specified in the Award Agreement to the extent
that the Option is vested on the date such Optionee ceases to be a Service
Provider (but in no event later than the expiration of the term of such Option
as set forth in the Award Agreement). In the absence of a specified time in the
Award Agreement, the Option shall remain exercisable for ninety (90) days
following the date such Optionee ceases to be a Service Provider. If, on the
date such Optionee ceases to be a Service Provider, the Optionee is not vested
as to his or her entire Option, the Shares covered by the unvested portion of
the Option shall revert to the Plan. If, after Optionee ceases to be a Service
Provider, the Optionee does not exercise his or her Option within the time
specified by the Administrator, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.
(iii) Disability of Optionee. If an Optionee
ceases to be a Service Provider as a result of the Optionees Disability, the
Optionee may exercise his or her Option within such period of time as is
specified in the Award Agreement to the extent the Option is vested on the date
of termination due to such Disability (but in no event later than the
expiration of the term of such Option as set forth in the Award Agreement). In
the absence of a specified time in the Award
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Agreement, the Option shall remain exercisable for
twelve (12) months following the termination due to Optionees Disability. If,
on the date of termination, the Optionee is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option shall revert
to the Plan. If, after termination, the Optionee does not exercise his or her
Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
(iv) Death of Optionee. If an Optionee dies
while a Service Provider, the Option may be exercised following the Optionees
death within such period of time as is specified in the Award Agreement to the
extent that the Option is vested on the date of death (but in no event may the
option be exercised later than the expiration of the term of such Option as set
forth in the Award Agreement), by the Optionees designated beneficiary,
provided such beneficiary has been designated prior to Optionees death in a
form acceptable to the Administrator. If no such beneficiary has been
designated by the Optionee, then such Option may be exercised by the personal
representative of the Optionees estate or by the person(s) to whom the
Option is transferred pursuant to the Optionees Will or in accordance with the
laws of descent and distribution. In the absence of a specified time in the Award
Agreement, the Option shall remain exercisable for twelve (12) months following
Optionees death. If, at the time of death, Optionee is not vested as to his or
her entire Option, the Shares covered by the unvested portion of the Option
shall immediately revert to the Plan. If the Option is not so exercised within
the time specified herein, the Option shall terminate, and the Shares covered
by such Option shall revert to the Plan.
7. Restricted Stock.
(a) Grant of Restricted Stock. Subject
to the terms and provisions of the Plan, the Administrator, at any time and
from time to time, may grant Shares of Restricted Stock to Service Providers in
such amounts as the Administrator, in its sole discretion, will determine.
(b) Restricted Stock Agreement. Each
Award of Restricted Stock will be evidenced by an Award Agreement that will
specify the Period of Restriction, the number of Shares granted, and such other
terms and conditions as the Administrator, in its sole discretion, will
determine. Unless the Administrator determines otherwise, Shares of Restricted
Stock will be held by the Company as escrow agent until the restrictions on
such Shares have lapsed.
(c) Transferability. Except as
provided in this Section 7, Shares of Restricted Stock may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated until
the end of the applicable Period of Restriction.
(d) Other Restrictions. The
Administrator, in its sole discretion, may impose such other restrictions on
Shares of Restricted Stock as it may deem advisable or appropriate.
(e) Removal of Restrictions. Except
as otherwise provided in this Section 7, Shares of Restricted Stock
covered by each Restricted Stock grant made under the Plan will be released
from escrow as soon as practicable after the last day of the Period of
Restriction. The Administrator, in its discretion, may accelerate the time at
which any restrictions will lapse or be removed.
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(f) Voting Rights. During the
Period of Restriction, Service Providers holding Shares of Restricted Stock
granted hereunder may exercise full voting rights with respect to those Shares,
unless the Administrator determines otherwise.
(g) Dividends and Other Distributions.
During the Period of Restriction, Service Providers holding Shares of
Restricted Stock will be entitled to receive all dividends and other
distributions paid with respect to such Shares unless the Administrator
determines otherwise. If any such dividends or distributions are paid in
Shares, the Shares will be subject to the same restrictions on transferability
and forfeitability as the Shares of Restricted Stock with respect to which they
were paid.
(h) Return of Restricted Stock to
Company. On the date set forth in the Award Agreement, the Restricted Stock
for which restrictions have not lapsed will revert to the Company and again
will become available for grant under the Plan.
8. Restricted Stock Units.
(a) Grant. Restricted Stock Units may be granted at any
time and from time to time as determined by the Administrator. Each Restricted
Stock Unit grant will be evidenced by an Award Agreement that will specify such
other terms and conditions as the Administrator, in its sole discretion, will
determine, including all terms, conditions, and restrictions related to the
grant, the number of Restricted Stock Units and the form of payout, which,
subject to Section 8(d), may be left to the discretion of the
Administrator.
(b) Vesting Criteria and Other Terms. The
Administrator will set vesting criteria in its discretion, which, depending on
the extent to which the criteria are met, will determine the number of
Restricted Stock Units that will be paid out to the Participant. After the
grant of Restricted Stock Units, the Administrator, in its sole discretion, may
reduce or waive any restrictions for such Restricted Stock Units. Each Award of
Restricted Stock Units will be evidenced by an Award Agreement that will
specify the vesting criteria, and such other terms and conditions as the
Administrator, in its sole discretion, will determine.
(c) Earning Restricted Stock Units. Upon meeting the
applicable vesting criteria, the Participant will be entitled to receive a
payout as specified in the Award Agreement. Notwithstanding the foregoing, at
any time after the grant of Restricted Stock Units, the Administrator, in its
sole discretion, may reduce or waive any vesting criteria that must be met to
receive a payout.
(d) Form and Timing of Payment. Payment of earned
Restricted Stock Units will be made as soon as practicable after the date(s) set
forth in the Award Agreement. The Administrator, in its sole discretion, may
pay earned Restricted Stock Units in cash, Shares, or a combination thereof. Shares
represented by Restricted Stock Units that are fully paid in cash again will be
available for grant under the Plan.
(e) Cancellation. On the date set forth in the Award
Agreement, all unearned Restricted Stock Units will be forfeited to the
Company.
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9. Transferability
of Awards. Unless otherwise determined by the Administrator, an Award may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in
any manner other than by will or by the laws of descent or distribution and may
be exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Award transferable, such Award shall contain such
additional terms and conditions as the Administrator deems appropriate.
10. Formula Option Grants to Outside Directors. All
grants of Options to Outside Directors pursuant to this Section shall be
automatic and nondiscretionary and shall be made strictly in accordance with
the following provisions:
(a) All Options granted
pursuant to this Section shall be Nonstatutory Stock Options and, except
as otherwise provided herein, shall be subject to the other terms and
conditions of the Plan.
(b) No person shall have
any discretion to select which Outside Directors shall be granted Options under
this Section or to determine the number of Shares to be covered by such
Options.
(c) Each person who
first becomes an Outside Director following the effective date of this Plan, as
determined in accordance with Section 13 hereof, shall be automatically
granted an Option to purchase thirty two thousand (32,000) Shares (the First
Option) on the date on which such person first becomes an Outside Director,
whether through election by the stockholders of the Company or appointment by
the Board to fill a vacancy; provided, however, that an Inside Director who
ceases to be an Inside Director but who remains a Director shall not receive a
First Option.
(d) Each Outside
Director shall be automatically granted an Option to purchase eight thousand
(8,000) Shares (a Subsequent Option) on the date of the annual meeting of the
stockholders of the Company, if as of such date, he or she shall have served on
the Board for at least the preceding six (6) months.
(e) Notwithstanding the
provisions of subsections (c) and (d) hereof, any exercise of an
Option granted before the Company has obtained stockholder approval of the Plan
in accordance with Section 18 hereof shall be conditioned upon obtaining
such stockholder approval of the Plan in accordance with Section 18
hereof.
(f) The terms of each
Option granted pursuant to this Section shall be as follows:
(i) the
term of the Option shall be ten (10) years.
(ii) the
exercise price per Share shall be 100% of the Fair Market Value per Share on
the date of grant of the Option.
(iii) subject
to Section 11 hereof, the First Option shall vest and become exercisable
as to twenty five percent (25%) of the Shares subject to the First Option on
each anniversary of its date of grant, provided that the Optionee continues to
serve as a Director on such dates.
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(iv) subject
to Section 11 hereof, the Subsequent Option shall vest and become
exercisable as to twelve and one-half percent (12.5%) of the Shares subject to
the Subsequent Option on the first day of each month following its date of
grant, provided that the Optionee continues to serve as a Director on such
date.
11. Adjustments
Upon Changes in Capitalization, Merger or Change in Control.
(a) Changes in Capitalization. Subject
to any required action by the stockholders of the Company, the number of shares
of Common Stock that have been authorized for issuance under the Plan but as to
which no Awards have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Awards, the number of Shares that may be added
annually to the Plan pursuant to Section 3(i), the number of shares that
may be granted pursuant to the automatic grant provisions of Section 10,
and the number of shares of Common Stock as well as the price per share of
Common Stock covered by each such outstanding Award shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been effected without receipt of consideration. Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive. Except
as expressly provided herein, no issuance by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock subject to an Award.
(b) Dissolution or Liquidation. In
the event of the proposed dissolution or liquidation of the Company, the
Administrator shall notify each Optionee as soon as practicable prior to the
effective date of such proposed transaction. The Administrator in its
discretion may provide for an Optionee to have the right to exercise his or her
Option until ten (10) days prior to such transaction as to all of the
Optioned Stock covered thereby, including Shares as to which the Option would
not otherwise be exercisable. In addition, the Administrator may provide that
any Company repurchase option applicable to any Shares purchased upon exercise
of an Award shall lapse as to all such Shares, provided the proposed
dissolution or liquidation takes place at the time and in the manner
contemplated. To the extent it has not been previously exercised, an Award will
terminate immediately prior to the consummation of such proposed action.
(c) Merger or Change in Control. In
the event of a merger of the Company with or into another corporation, or a
Change in Control, each outstanding Award shall be assumed or an equivalent
option or right substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. With respect to Options granted to an Outside Director pursuant to Section 10
that are assumed or substituted for, if following such assumption or
substitution the Optionees status as a Director or a director of the successor
corporation, as applicable, is terminated other than upon a voluntary
resignation by the Optionee, then the Optionee shall fully vest in and have the
right to exercise the Option as to all of the Optioned Stock, including Shares
as to which it would not otherwise be vested or exercisable.
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In the event that the
successor corporation does not assume or substitute for the Award, the Optionee
will fully vest in and have the right to exercise all of his or her outstanding
Options, including Shares as to which such Options would not otherwise be
vested or exercisable, and all restrictions on Restricted Stock and Restricted
Stock Units will lapse. If an Award is not assumed or substituted in the
event of a merger or Change in Control, the Administrator shall notify the
Optionee in writing or electronically that the Option shall be fully vested and
exercisable for a period of fifteen (15) days from the date of such notice, and
the Award shall terminate upon the expiration of such period.
For the purposes
of this subsection (c), the Award shall be considered assumed if, following the
merger or Change in Control, the option or right confers the right to purchase
or receive, for each Share subject to the Award immediately prior to the merger
or Change in Control, the consideration (whether stock, cash, or other
securities or property) received in the merger or Change in Control by holders
of Common Stock for each Share held on the effective date of the transaction
(and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger or Change
in Control is not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Award,
for each Share subject to the Award, to be solely common stock of the successor
corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or Change in
Control.
12. Date
of Grant. The date of grant of an Award shall be, for all purposes, the
date on which the Administrator makes the determination granting such Award, or
such other later date as is determined by the Administrator. Notice of the
determination shall be provided to each Optionee within a reasonable time after
the date of such grant.
13. Term
of Plan. Subject to Section 18 of the Plan, the Plan shall become effective upon its
adoption by the Board. It shall continue in effect for a term of ten (10) years
unless terminated earlier under Section 14 of the Plan.
14. Amendment
and Termination of the Plan.
(a) Amendment and Termination. The
Board may at any time amend, alter, suspend or terminate the Plan.
(b) Stockholder Approval. The
Company shall obtain stockholder approval of any Plan amendment to the extent
necessary and desirable to comply with Applicable Laws.
(c) Effect of Amendment or Termination.
No amendment, alteration, suspension or termination of the Plan shall impair
the rights of any Optionee, unless mutually agreed otherwise between the
Optionee and the Administrator, which agreement must be in writing and signed
by the Optionee and the Company. Termination of the Plan shall not affect the
Administrators ability to exercise the powers granted to it hereunder with
respect to Awards granted under the Plan prior to the date of such termination.
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15. Conditions
Upon Issuance of Shares.
(a) Legal Compliance. Shares shall
not be issued pursuant to the exercise of an Award unless the exercise of such Award
and the issuance and delivery of such Shares shall comply with Applicable Laws
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.
(b) Investment Representations. As
a condition to the exercise of an Award, the Company may require the person
exercising such Award to represent and warrant at the time of any such exercise
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required.
16. Inability
to Obtain Authority. The inability of the Company to obtain authority from
any regulatory body having jurisdiction, which authority is deemed by the
Companys counsel to be necessary to the lawful issuance and sale of any Shares
hereunder, shall relieve the Company of any liability in respect of the failure
to issue or sell such Shares as to which such requisite authority shall not
have been obtained.
17. Reservation
of Shares. The Company, during the term of this Plan, will at all times
reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.
18. Stockholder
Approval. The Plan shall be subject to approval by the stockholders of the
Company within twelve (12) months after the date the Plan is adopted. Such
stockholder approval shall be obtained in the manner and to the degree required
under Applicable Laws.
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EXHIBIT 10.2
VIVUS,
INC.
2001 STOCK OPTION PLAN
NOTICE OF GRANT OF
RESTRICTED STOCK UNITS
Unless otherwise defined
herein, the terms defined in the 2001 Stock Option Plan (the Plan) will have
the same defined meanings in this Notice of Grant of Restricted Stock Units (the
Notice of Grant).
Optionee:
Address:
You
have been granted the right to receive Restricted Stock Units, subject to the
terms and conditions of the Plan, this Notice of Grant and the Restricted Stock
Unit Agreement attached hereto as Exhibit A (the Agreement) as
follows:
Grant Number
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Date of Grant
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Vesting
Commencement Date
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Total Number of
Restricted Stock Units
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Vesting
Schedule:
The Restricted Stock
Units will vest and Shares will be issued to Optionee following the Vesting
Commencement Date, subject to Optionee Continuing to be a Service Provider
through each relevant vesting date, as follows: [Insert Vesting Schedule]
In the event Optionee
ceases to be a Service Provider for any or no reason before Optionee vests in
the right to acquire the Shares to be issued pursuant to the Restricted Stock
Unit, the Restricted Stock Unit and Optionees right to acquire any Shares
hereunder will immediately terminate.
By your signature and the
signature of the Companys representative below, you and the Company agree that
this Award is granted under and governed by the terms and conditions of the
Plan and the Agreement, both of which are made a part of this document. You
further agree to execute the attached Agreement as a condition to receiving any
Restricted Stock Units under this Award.
GRANTEE:
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VIVUS, INC.
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Signature
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By
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Print Name
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Title
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EXHIBIT A
RESTRICTED STOCK UNIT AGREEMENT
1. Grant. The Company hereby
grants to Optionee under the Plan an Award of Restricted Stock Units, subject
to all of the terms and conditions in the Notice of Grant, this Agreement and
the Plan.
2. Companys Obligation to Pay.
Each Restricted Stock Unit represents the right to receive a Share on the date
it becomes vested. Unless and until the Restricted Stock Units will have vested
in the manner set forth in Sections 3 and 4, Optionee will have no right
to payment of any such Restricted Stock Units. Prior to actual payment of any
vested Restricted Stock Units, such Restricted Stock Unit will represent an
unsecured obligation of the Company, payable (if at all) only from the general
assets of the Company.
3. Vesting Schedule. Subject to
Section 4, the Restricted Stock Units awarded by this Agreement will vest
in Optionee according to the vesting schedule set forth on the attached Notice
of Grant, subject to Optionee continuing to be a Service Provider through each
such date.
4. Forfeiture upon Termination of Status
as a Service Provider. Notwithstanding any contrary provision of this Agreement,
if Optionee ceases to be a Service Provider for any or no reason, the
then-unvested Restricted Stock Units awarded by this Agreement will thereupon
be forfeited at no cost to the Company and Optionee will have no further rights
thereunder.
5. Payment after Vesting. Any Restricted
Stock Units that vest in accordance with Section 3 will be paid to Optionee
(or in the event of Optionees death, to his or her estate) in whole Shares, subject
to Optionee satisfying any applicable tax withholding obligations as set forth
in Section 7.
6. Payments after Death.
Any distribution or delivery to be made to Optionee under this Agreement will,
if Optionee is then deceased, be made to Optionees designated beneficiary, or
if no beneficiary survives Optionee, the administrator or executor of Optionees
estate. Any such transferee must furnish the Company with (a) written
notice of his or her status as transferee, and (b) evidence satisfactory
to the Company to establish the validity of the transfer and compliance with
any laws or regulations pertaining to said transfer.
7. Withholding of Taxes. Notwithstanding
any contrary provision of this Agreement, no certificate representing the Shares
will be issued to Optionee, unless and until satisfactory arrangements (as
determined by the Administrator) will have been made by Optionee with respect
to the payment of income, employment and other taxes which the Company
determines must be withheld with respect to such Shares so issuable. The Administrator,
in its sole discretion and pursuant to such procedures as it may specify from
time to time, may permit Optionee to satisfy such tax withholding obligation,
in whole or in part by one or more of the following (without limitation): (a) paying
cash, (b) electing to have the Company withhold otherwise deliverable Shares
having a Fair Market Value equal to the amount required to be withheld, (c) delivering
to the Company already vested and owned Shares having a Fair Market Value equal
to the amount required to be withheld, or (d) selling a sufficient number
of such Shares otherwise deliverable to Optionee through such means as the
Company may determine in its sole discretion (whether through a broker or
otherwise) equal to the amount required to be
withheld. If Optionee fails to make satisfactory
arrangements for the payment of any required tax withholding obligations hereunder
at the time any applicable Shares otherwise are scheduled to vest pursuant to Section 3,
Optionee will permanently forfeit such Shares and the Shares will be returned
to the Company at no cost to the Company.
9. Rights as Stockholder. Neither
Optionee nor any person claiming under or through Optionee will have any of the
rights or privileges of a stockholder of the Company in respect of any Shares
deliverable hereunder unless and until certificates representing such Shares
will have been issued, recorded on the records of the Company or its transfer
agents or registrars, and delivered to Optionee.
10. No Effect on Service. Optionee
acknowledges and agrees that the vesting of the Restricted Stock Units pursuant
to Section 3 hereof is earned only by Optionee continuing to be a Service
Provider through the applicable vesting dates (and not through the act of being
hired or acquiring Shares hereunder). Optionee further acknowledges and agrees
that this Agreement, the transactions contemplated hereunder and the vesting
schedule set forth herein do not constitute an express or implied promise of Optionee
continuing to be a Service Provider for the vesting period, for any period, or
at all, and will not interfere with the Optionees right or the right of the
Company (or the Parent or Subsidiary employing or retaining Optionee) to
terminate Optionees status as a Service Provider at any time, with or without
cause.
11. Address for Notices. Any
notice to be given to the Company under the terms of this Agreement will be
addressed to the Company, in care of Stock Administration at Vivus, Inc., 1172
Castro Street, Mountain View, CA 94040, or at such other address as the Company
may hereafter designate in writing.
12. Grant is Not Transferable. Except
to the limited extent provided in Section 6, this grant and the rights and
privileges conferred hereby will not be transferred, assigned, pledged or
hypothecated in any way (whether by operation of law or otherwise) and will not
be subject to sale under execution, attachment or similar process. Upon any
attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this
grant, or any right or privilege conferred hereby, or upon any attempted sale
under any execution, attachment or similar process, this grant and the rights
and privileges conferred hereby immediately will become null and void.
13. Binding Agreement. Subject to
the limitation on the transferability of this grant contained herein, this
Agreement will be binding upon and inure to the benefit of the heirs, legatees,
legal representatives, successors and assigns of the parties hereto.
14. Additional Conditions to Issuance
of Stock. If at any time the Company will determine, in its discretion,
that the listing, registration or qualification of the Shares upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory authority is necessary or desirable as a
condition to the issuance of shares to Optionee (or his estate), such issuance
will not occur unless and until such listing, registration, qualification,
consent or approval will have been effected or obtained free of any conditions
not acceptable to the Company. Where the Company determines that the delivery
of the payment of any Shares will violate federal securities laws or other
applicable laws, the Company will defer delivery until the earliest date at
which the Company reasonably anticipates that the delivery of Shares will no
longer cause such violation. The Company will make all
reasonable efforts to meet the requirements of any
such state or federal law or securities exchange and to obtain any such consent
or approval of any such governmental authority.
15. Plan Governs. This Agreement
is subject to all terms and provisions of the Plan. In the event of a conflict
between one or more provisions of this Agreement and one or more provisions of
the Plan, the provisions of the Plan will govern.
16. Administrator Authority. The
Administrator will have the power to interpret the Plan and this Agreement and
to adopt such rules for the administration, interpretation and application
of the Plan as are consistent therewith and to interpret or revoke any such rules (including,
but not limited to, the determination of whether or not any Restricted Stock
Units have vested). All actions taken and all interpretations and
determinations made by the Administrator in good faith will be final and
binding upon Optionee, the Company and all other interested persons. No member
of the Administrator will be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or this Agreement.
17. Electronic Delivery. The
Company may, in its sole discretion, decide to deliver any documents related to
Restricted Stock Units awarded under the Plan or future Restricted Stock Units
that may be awarded under the Plan by electronic means or request Optionees
consent to participate in the Plan by electronic means. Optionee hereby
consents to receive such documents by electronic delivery and agrees to
participate in the Plan through an on-line or electronic system established and
maintained by the Company or another third party designated by the Company.
18. Captions. Captions provided
herein are for convenience only and are not to serve as a basis for
interpretation or construction of this Agreement.
19. Agreement Severable. In the
event that any provision in this Agreement will be held invalid or
unenforceable, such provision will be severable from, and such invalidity or
unenforceability will not be construed to have any effect on, the remaining
provisions of this Agreement.
20. Governing Law. This Award
Agreement shall be governed by the laws of the State of California, without
giving effect to the conflict of law principles thereof. For purposes of
litigating any dispute that arises under this Award of Restricted Stock Units or
this Agreement, the parties hereby submit to and consent to the jurisdiction of
the State of California, and agree
that such litigation shall be conducted in the courts of Santa Clara County,
California, or the federal courts for the United
States for the Northern District of California, and no other courts, where this
Award of Restricted Stock Units is made and/or to be performed.