<PAGE>   1
 
                                  SCHEDULE 14A
                                 (RULE 14A-101)
 
                    INFORMATION REQUIRED IN PROXY STATEMENT
 
                            SCHEDULE 14A INFORMATION
          PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
                    EXCHANGE ACT OF 1934 (AMENDMENT NO.   )
 
Filed by the Registrant [X]
 
Filed by a Party other than the Registrant [ ]
 
Check the appropriate box:
 

<TABLE>
<S>                                             <C>
[ ]  Preliminary Proxy Statement                [ ]  Confidential, for Use of the Commission
                                                     Only (as permitted by Rule 14a-6(e)(2))
[X]  Definitive Proxy Statement
[ ]  Definitive Additional Materials
[ ]  Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>

                                  Vivus, Inc.
--------------------------------------------------------------------------------
                (Name of Registrant as Specified In Its Charter)
 
--------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)
 
Payment of Filing Fee (Check the appropriate box):
 
[X]  No fee required.
 
[ ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
     (1)  Title of each class of securities to which transaction applies:
 
     (2)  Aggregate number of securities to which transaction applies:
 
     (3)  Per unit price or other underlying value of transaction computed
          pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
          filing fee is calculated and state how it was determined):
 
     (4)  Proposed maximum aggregate value of transaction:
 
     (5)  Total fee paid:
 
[ ]  Fee paid previously with preliminary materials:
 
[ ]  Check box if any part of the fee is offset as provided by Exchange Act Rule
     0-11(a)(2) and identify the filing for which the offsetting fee was paid
     previously. Identify the previous filing by registration statement number,
     or the Form or Schedule and the date of its filing.
 
     (1)  Amount Previously Paid:
 
     (2)  Form, Schedule or Registration Statement No.:
 
     (3)  Filing Party:
 
     (4)  Date Filed:

<PAGE>   2
 
                                  VIVUS, INC.
 
                            ------------------------
 

                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                          TO BE HELD ON JUNE 14, 2001
 
TO THE STOCKHOLDERS:
 
     NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of VIVUS,
Inc., a Delaware corporation (the "Company"), will be held on Thursday, June 14,
2001, at 10:00 a.m. at VIVUS's headquarters located at 1172 Castro Street,
Mountain View, CA 94040 for the following purposes:
 
          1. To elect six directors to serve until the next Annual Meeting of
     Stockholders and until their successors are duly elected and qualified.
 
          2. To confirm the appointment of Arthur Andersen LLP as independent
     public accountants for the fiscal year ending December 31, 2001.
 
          3. To transact such other business as may properly come before the
     meeting or any adjournment thereof.
 
     These items of business are more fully described in the Proxy Statement
accompanying this notice.
 
     Only stockholders of record at the close of business on April 16, 2001 are
entitled to notice of and to vote at the meeting.
 
     All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to sign and
return the enclosed Proxy as promptly as possible in the postage-prepaid
envelope enclosed for that purpose. Any stockholder attending the meeting may
vote in person even if the stockholder has returned a proxy.
 
                                          By order of the Board of Directors
 
                                          Leland F. Wilson
                                          President and Chief Executive Officer
 
Mountain View, California
A
pril 25, 2001
 
IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE AND
PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED.

<PAGE>   3
 
                                  VIVUS, INC.
                            ------------------------
 
                          PROXY STATEMENT FOR THE 2001
                         ANNUAL MEETING OF STOCKHOLDERS
 
                            ------------------------
 
                 INFORMATION CONCERNING SOLICITATION AND VOTING
 
GENERAL
 
     The enclosed Proxy is solicited on behalf of the Board of Directors (the
"Board") of VIVUS, Inc., a Delaware corporation (the "Company" or "VIVUS"), for
use at the Annual Meeting of Stockholders to be held on Thursday, June 14, 2001,
at 10:00 a.m. local time, or at any adjournment thereof, for the purposes set
forth in this Proxy Statement and in the accompanying Notice of Annual Meeting
of Stockholders. The Annual Meeting will be held at 1172 Castro Street, Mountain
View, CA 94040.
 
     These proxy solicitation materials were mailed on or about April 25, 2001
to all stockholders entitled to vote at the meeting.
 
RECORD DATE AND SHARE OWNERSHIP
 
     The Company's Stockholders of record at the close of business on April 16,
2001 are entitled to notice of the Annual Meeting of Stockholders and to vote at
the meeting. At the record date, 32,479,846 shares of the Company's Common Stock
were issued and outstanding and held of record by approximately 716
stockholders.
 
     The following table sets forth certain information known to the Company
with respect to beneficial ownership of the Company's Common Stock as of April
1, 2001 by (i) each stockholder known by the Company to be the beneficial owner
of more than 5% of the Company's Common Stock; (ii) each director; (iii) the
Company's Chief Executive Officer and the Company's four other most highly
compensated executive officers serving in that capacity as of December 31, 2000;
and (iv) all directors and executive officers as a group.
 

<TABLE>
<CAPTION>
          FIVE PERCENT STOCKHOLDERS,             BENEFICIALLY OWNED STOCK(1)
       DIRECTORS AND EXECUTIVE OFFICERS               NUMBER OF SHARES          ACQUIRABLE(2)    PERCENT
       --------------------------------          ---------------------------    -------------    -------
<S>                                              <C>                            <C>              <C>
Virgil A. Place, M.D.(3).......................             708,395                  33,124       2.28%
Leland F. Wilson(4)............................             424,062               1,028,206       4.33%
Mark B. Logan..................................                  --                  24,000          *
Mario M. Rosati................................               5,891                  24,000          *
Linda M. Shortliffe, M.D. .....................                  --                  16,000          *
Joseph E. Smith................................                  --                  66,666          *
Graham Strachan................................                  --                      --          *
Terry M. Nida..................................              28,870                 245,807          *
Carol D. Karp..................................               4,499                 100,424          *
Guy P. Marsh...................................                  --                  21,458          *
Richard Walliser...............................              28,594                  69,645          *
                                                          ---------               ---------
All directors and executive officers as a group
  (11 persons).................................           1,200,311               1,629,330       8.30%
</TABLE>

 
---------------
 *  Less than 1%
 
(1) Applicable percentage ownership based on 32,479,846 shares of Common Stock
    as of April 1, 2001. Beneficial ownership is determined in accordance with
    the rules of the Securities and Exchange Commission.

<PAGE>   4
 
(2) Shares of Common Stock subject to options currently exercisable or
    exercisable within 60 days after April 1, 2001 are deemed outstanding for
    computing the percentage ownership of the person holding such options, but
    are not deemed outstanding for computing the percentage of any other person.
 
(3) Includes 29,100 shares held by Dr. Place as Custodian for V. Aristophanes
    Kamehameha A.H. Place under the Hawaii Uniform Transfers to Minors Act, and
    70,000 shares held by "The Virgil A. Place Arboretum & Botanical Garden,
    Inc.," of which Dr. Place is the beneficial owner.
 
(4) Includes 25,000 shares held by the Leland F. Wilson Living Trust.
 
REVOCABILITY OF PROXIES
 
     Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Secretary of the
Company a written notice of revocation or a duly executed proxy bearing a later
date or by attending the meeting and voting in person.
 
VOTING AND SOLICITATION
 
     Each share of Common Stock outstanding on the record date is entitled to
one vote.
 
     The cost of soliciting proxies will be borne by the Company. The Company
may elect to retain the services of an outside company to solicit proxies, for
which the Company estimates that it would pay a fee not to exceed $5,000. The
Company expects to reimburse brokerage firms and other persons representing
beneficial owners of shares for their expenses in forwarding solicitation
materials to such beneficial owners. Proxies may be solicited by certain of the
Company's directors, officers and regular employees, without additional
compensation, in person or by telephone or facsimile.
 
RECORD DATE; QUORUM; REQUIRED VOTE
 
     The holders of Common Stock of record at the close of business on April 16,
2001 are entitled to vote at the Annual Meeting. As of April 16, 2001,
32,479,846 shares of Common Stock were issued and outstanding. Each share of
Common Stock is entitled to one vote. Stockholders will not be entitled to
cumulate their votes in the election of directors.
 
     The presence, in person or by proxy, of stockholders entitled to vote at
least a majority of the shares of Common Stock issued and outstanding as of
April 16, 2001 constitutes a quorum for adopting the proposals at the Annual
Meeting. A plurality of the shares present, in person or represented by proxy,
at the Annual Meeting and entitled to vote on the election of directors is
required for the election of directors. In the other proposals, the affirmative
vote of the majority of the shares present, in person or represented by proxy,
at the Annual Meeting and entitled to vote on the proposals is required for
approval.
 
     Under the Delaware General Corporation Law, abstentions and broker
"non-votes" are treated as shares that are entitled to vote and are, therefore,
included for purposes of determining whether a quorum of shares is present at
the Annual Meeting. A broker "non-vote" occurs when a nominee holding shares for
a beneficial owner does not vote on a particular proposal because the nominee
does not have discretionary voting power with respect to that proposal or has
not received voting instructions from the beneficial owner. Abstentions are
treated as shares that are present at the Annual Meeting, but not as an
affirmative vote on any matter submitted to the stockholders for a vote. Thus,
abstentions are included in the tabulation of the voting results on election of
directors and on the proposals requiring an affirmative vote of a majority of
the shares present at the Annual Meeting and, therefore, have the effect of
votes in opposition. On the contrary, broker "non-votes" are not treated as
shares that are present at the Annual Meeting. Thus, broker "non-votes" are not
included in the tabulation of the voting results on election of directors and on
the proposals requiring an affirmative vote of a majority of the shares present
at the Annual Meeting and, therefore, do not have the effect of votes in
opposition in such tabulations.
 
     Any proxy that is returned using the form of proxy enclosed and that is not
marked as to a particular item will be voted FOR the election of directors, FOR
the ratification of the appointment of Arthur Andersen LLP
 
                                        2

<PAGE>   5
 
as the designated independent accountants and, as the proxy holders deem
advisable, on other matters that may come before the meeting.
 
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
 
     Stockholders who intend to present a proposal for inclusion in the
Company's proxy materials for the 2002 Annual Meeting of Stockholders must
submit the proposal to the Company no later than December 31, 2001. Stockholders
who intend to present a proposal at the 2002 Annual Meeting of Stockholders
without inclusion of such proposal in the Company's proxy materials for the 2002
Annual Meeting are required to provide notice of such proposal to the Company no
later than thirty-five (35) days nor more than sixty (60) days prior to the 2002
Annual Meeting of Stockholders. The Company reserves the right to reject, rule
out of order, or take other appropriate action with respect to any proposal that
does not comply with these and other applicable requirements.
 

                                 PROPOSAL ONE:
 
                             ELECTION OF DIRECTORS
 
NOMINEES
 
     A board of six directors is to be elected at the Annual Meeting of
Stockholders. The Company's Bylaws authorize a board of six directors. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for the Company's nominees named below. In the event that any nominee of the
Company is unable or declines to serve as a director at the time of the Annual
Meeting of Stockholders, the proxies will be voted for any nominee who shall be
designated by the present Board to fill the vacancy. It is not expected that any
nominee will be unable or will decline to serve as a director. In the event that
additional persons are nominated for election as directors, the proxy holders
intend to vote all proxies received by them in such a manner as will assure the
election of as many of the nominees listed below as possible.
 
     The nominees, and certain information about them as of April 1, 2001, are
set forth below.
 

<TABLE>
<CAPTION>
                                                                                              DIRECTOR
            NAME OF NOMINEE              AGE                     POSITION                      SINCE
            ---------------              ---                     --------                     --------
<S>                                      <C>    <C>                                           <C>
Virgil A. Place, M.D. .................  76     Chairman of the Board, Chief Scientific         1991
                                                Officer and Director
Leland F. Wilson.......................  56     President, Chief Executive Officer and          1991
                                                Director
Mark B. Logan(1)(2)....................  62     Director                                        1999
Mario M. Rosati(2).....................  54     Secretary and Director                          1999
Linda M. Shortliffe, M.D.(1)(2)........  52     Director                                        1999
Graham Strachan........................  63     None                                             N/A
</TABLE>

 
---------------
(1) Member of Audit Committee
 
(2) Member of Compensation Committee
 
     All directors hold office until the next Annual Meeting of Stockholders or
until their successors have been elected and qualified. Officers serve at the
discretion of the Board. There are no family relationships between any of the
directors or executive officers of the Company.
 
     VIRGIL A. PLACE, M.D. is the founder of VIVUS and has been its Chief
Scientific Officer and Chairman of the Board since the Company was formed in
April 1991. Before joining VIVUS, Dr. Place was Principal Scientist and held a
variety of executive positions including Vice President of Medical and
Regulatory Affairs at ALZA Corporation ("Alza") from 1969 to 1993. In addition,
Dr. Place served nine years on the Alza Board of Directors. He received a B.A.
in Chemistry from Indiana University and an M.D. from Johns Hopkins University.
He is Board Certified in Internal Medicine, with specialty training at the Mayo
Clinic.
 
                                        3

<PAGE>   6
 
     LELAND F. WILSON has been President and a director of VIVUS since April
1991 and Chief Executive Officer since November 1991. Prior to joining VIVUS,
Mr. Wilson was Vice President of Marketing and Corporate Development of Genelabs
Technologies, Inc. from 1989 to 1991. Mr. Wilson was Group Product Director,
later promoted to Director of Marketing, at LifeScan, a Johnson & Johnson
company, from 1986 to 1989. From 1973 to 1986, Mr. Wilson served in several
research, marketing and sales positions for Syntex Research and Syntex
Laboratories, Inc. Mr. Wilson received a B.S. and an M.S. from Pennsylvania
State University.
 
     MARK B. LOGAN has been a director of VIVUS since March 1999. Since August
1997, Mr. Logan has served as a director of Abgenix, Inc., a biopharmaceutical
company. Mr. Logan has also served as the Chairman of the Board, President and
Chief Executive Officer of VISX Incorporated, a medical device company, since
1994. From January 1992 to October 1994, he was Chairman of the Board and Chief
Executive Officer of INSMED Pharmaceuticals, Inc., a pharmaceutical company.
Previously, Mr. Logan held several senior management positions at Baush & Lomb,
Inc., a medical products company, including Senior Vice President, Healthcare
and Consumer Group, and also served as member of its Board of Directors. Mr.
Logan received a B.A. from Hiram College and a P.M.D. from Harvard Business
School.
 
     MARIO M. ROSATI has served as one of our directors since March 1999. Mr.
Rosati has been with the Palo Alto, California law firm of Wilson Sonsini
Goodrich & Rosati, Professional Corporation, since 1971, first as an associate
and then as a member since 1975. Mr. Rosati also serves as a director of Aehr
Test Systems, Genus, Inc., MyPoints.com, Inc., Sanmina Corporation, Symyx and
The Management Network Group. Mr. Rosati holds a B.A. from the University of
California, Los Angeles and a J.D. from the University of California, Berkeley,
Boalt Hall School of Law.
 
     LINDA M. DAIRIKI SHORTLIFFE, M.D. has been a director of VIVUS since June
1999. Dr. Shortliffe has been Professor of Urology at Stanford University School
of Medicine since 1993 and Chair of the Department of Urology since 1995. She
has also been Chief of Pediatric Urology of Lucile Salter Packard Children's
Hospital at Stanford since 1991. She is a Fellow of the American College of
Surgeons and the American Academy of Pediatrics. Dr. Shortliffe has also served
as a member of the Special Grants Chartered Review Committee for the National
Institute of Diabetes, Digestive, and Kidney Diseases of the National Institute
of Health and several other national committees. She has authored numerous
publications and her works appear in prominent medical journals and books. Dr.
Shortliffe received an A.B. from Radcliffe/Harvard College and an M.D. from
Stanford University.
 
     GRAHAM STRACHAN is a nominee for the Board of Directors of VIVUS. From 1987
to 1999, he was President and CEO of Allelix Biopharmaceuticals Inc., now NPS
Allelix Pharmaceuticals Inc., engaged in the discovery and development of novel,
small molecule drugs and recombinant therapeutic proteins. Between 1982 and
1986, Mr. Strachan held other executive level positions within Allelix, of which
he was a co-founder in 1981. He has also been active in community service,
particularly in life science organizations, and is currently chair of the
Ontario Mental Health Research Foundation and the Canadian Biotechnology Human
Resource Council. Mr. Strachan holds a B.Sc. Honours Chemistry degree from the
University of Glasgow, is a Qualified Patent Agent in Canada and the United
States, and he completed an Advanced Management Program at the University of
Western Ontario in 1972.
 
REQUIRED VOTE
 
     The six nominees receiving the highest number of the affirmative votes of
the Votes Cast will be elected as directors.
 
 
    THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
ELECTION OF THE NOMINEES.
 
BOARD MEETINGS, COMMITTEES AND DIRECTOR COMPENSATION
 
     The Board of Directors met five times and acted by unanimous written
consent three times during fiscal 2000. The Board of Directors has an Audit
Committee that met four times and a Compensation Committee
 
                                        4

<PAGE>   7
 
that met three times during the year. Director Rosati attended three meetings of
the Board of Directors and all meetings of the Compensation Committee during
fiscal 2000. All other directors attended 75% or more of the meetings of the
Board of Directors and any committees on which such director served during
fiscal 2000.
 
     The Audit Committee of the Board of Directors is composed of three
directors who are not employees of the Company ("Outside Directors") and
currently include Directors Smith, Logan and Shortliffe. The Audit Committee
makes recommendations to the Board of Directors regarding the selection of
independent auditors, reviews the independence of such auditors, approves the
scope of the annual audit activities of the independent auditors and reviews
such audit results.
 
     The Compensation Committee of the Board of Directors is composed of three
Outside Directors and currently includes Directors Rosati, Logan and Shortliffe.
The Compensation Committee recommends to our Board of Directors the compensation
of our directors and officers, oversees the administration of our stock option
plans and performs other duties regarding compensation for employees and
consultants as our Board of Directors may delegate from time to time.
 
     Outside Directors will be paid an annual retainer of $10,000 and a fee of
$1,000 per quarter for attending board meetings.
 
     The Company's 1994 Director Option Plan provides that each new Outside
Director that joins the Board will automatically be granted an option at fair
market value to purchase 32,000 shares of Common Stock upon the date on which
such person first becomes an Outside Director. These options vest at a rate of
25% per year following the date of grant so long as the optionee remains a
director of the Company. It also provides for the grant of options to Outside
Directors pursuant to a nondiscretionary, automatic grant mechanism, whereby
each Outside Director is granted an option at fair market value to purchase
8,000 shares on the date of each Annual Meeting of Stockholders, provided such
director is re-elected. These shares vest at the rate of 12.5% per month
following the date of grant so long as the optionee remains a director of the
Company.
 
                                        5

<PAGE>   8
 
EXECUTIVE OFFICERS
 
     The executive officers of the Company and certain information about them as
of April 1, 2001, are listed below:
 

<TABLE>
<CAPTION>
                NAME                   AGE                           POSITION
                ----                   ---                           --------
<S>                                    <C>    <C>
Virgil A. Place, M.D. ...............  76     Chairman of the Board, Chief Scientific Officer and
                                              Director
Leland F. Wilson.....................  56     President, Chief Executive Officer and Director
John Dietrich, Ph.D. ................  54     Vice President, Research and Development
Neil Gesundheit, M.D. ...............  48     Vice President, Clinical Research
Carol D. Karp........................  48     Vice President, Regulatory Affairs
Guy P. Marsh.........................  47     Vice President, U.S. Operations
Terry M. Nida........................  52     Vice President, Corporate Development and
                                              International Marketing
Richard Walliser.....................  57     Vice President, Finance and Chief Financial Officer
</TABLE>

 
     The backgrounds of MR. WILSON and DR. PLACE are summarized previously under
"Election of Directors."
 
     JOHN DIETRICH, PH.D. has been Vice President of Research and Development at
VIVUS since October 2000. Prior to that time he held a similar position at
Cellegy Pharmaceuticals, located in South San Francisco. From 1991 until 1999
Dr. Dietrich was Vice President of R&D at Allelix Biopharmaceuticals in Toronto,
Canada. At Allelix he was responsible for all preclinical and clinical
departments and managed a staff of 125 people. Dr. Dietrich received his Ph.D.
in Pharmacology from the University of North Carolina and was an Assistant
Professor at the University of Illinois School of Medicine. In 1980 he joined
the pharmaceutical industry as Director of Endocrinology at Revlon Health Care,
and was also Vice President of Research at Chemex Pharmaceuticals in Denver,
Colorado.
 
     NEIL GESUNDHEIT, M.D., M.P.H. has been Vice President, Clinical Research
since January 1994. In August 1999, Dr. Gesundheit transitioned to part-time
status to assume the position of Associate Dean for Medical Education at the
Stanford University School of Medicine. Dr. Gesundheit previously served VIVUS
as Vice President, Clinical and Regulatory Affairs from January 1994 to
September 1997 and as Chief Medical Officer from August 1998 to August 1999.
From 1989 to 1993 Dr. Gesundheit was Associate Director of Clinical Research at
Genentech, Inc. He holds an A.B. degree from Harvard College, an M.D. from the
University of California, San Francisco, and an M.P.H. from the University of
California, Berkeley. Dr. Gesundheit is board certified in internal medicine and
in the subspecialty of endocrinology and metabolism.
 
     CAROL D. KARP has been Vice President, Regulatory Affairs for VIVUS since
September 1997. Prior to joining VIVUS, Ms. Karp served as Executive Director,
Regulatory Affairs for Cygnus, Inc. from June 1994 to August 1997. From February
1993 to June 1994, Ms. Karp served as Director, Regulatory Affairs for Cygnus
Therapeutic Systems. Ms. Karp held various positions in regulatory affairs at
Janssen Pharmaceutica, a Johnson & Johnson company, from 1979 to 1989. She
received a B.A. in Biology from the University of Rochester and has completed
postgraduate studies in Biochemistry at New York University.
 
     GUY P. MARSH has been Vice President of U.S. Operations for VIVUS since
July 2000. Mr. Marsh joined VIVUS in May 1998 in the position of Sr. Director,
U.S. Operations and assumed the responsibilities of General Manager, Operations
in April 1999. Prior to VIVUS, Mr. Marsh served as Vice President Technical
Operations for Copley Pharmaceutical, Inc. from April 1994 to April 1998. Also,
during this period, Mr. Marsh served as a liaison between Copley Pharmaceutical
and Copley's majority stockholder, Hoechst-Celanese Corporation. From November
1987 to April 1994, Mr. Marsh served in various manufacturing, sales and
business management roles for Hoechst-Roussel Pharmaceuticals, Inc. Mr. Marsh
received a B.S. in Engineering from New Jersey Institute of Technology, holds a
New Jersey State Professional Engineering License, and received an MBA from
Seton Hall University.
 
     TERRY M. NIDA has been Vice President, Corporate Development and
International Marketing for VIVUS since August 1998. From November 1995 to
August 1998, Mr. Nida was Vice President, Europe and
 
                                        6

<PAGE>   9
 
effective March 28, 1996 was appointed an executive officer. Prior to joining
VIVUS, Mr. Nida was Vice President, Sales, Marketing and Business Development at
Carrington Laboratories, with responsibility for all sales, marketing and
business development activities. Mr. Nida was Senior Director, Worldwide Sales,
Marketing and Business Development for Centocor, Inc. from 1993 to 1994, and
Director of Sales and Marketing in Europe for Centocor, Inc. from 1990 to 1993.
He received a B.A and M.A. from Wichita State University.
 
     RICHARD WALLISER has been Vice President, Finance and Chief Financial
Officer for VIVUS since December 1998. Prior to joining VIVUS, Mr. Walliser
served as a consultant for The Brenner Group, a consulting firm specializing in
providing Interim Chief Financial Officers, and as the Chief Financial Officer
at Gyration, Inc, a high technological gyroscope design company for consumer
applications. From 1989 to 1999, Mr. Walliser also consulted to several high
technology companies including Federal Technology, Microdyne, Productivity
Training, and Advance Micro Devices. From 1982 to 1989, Mr. Walliser was the
Vice President of Finance and Administration for Novell. He received a B.S.
degree in Management from Arizona State University and a Masters in Business
Administration from the University of Southern California.
 
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
     In October 1999, the Company and ZZVAX, LLC, a Delaware limited liability
company ("ZZVAX"), entered into an Assignment Agreement (the "Assignment
Agreement") whereby the Company assigned all right, title and interest to
certain intellectual property to ZZVAX in exchange for a ten percent (10%)
membership interest in ZZVAX and the right to receive two percent (2%) of the
net sales of any ZZVAX products that utilize this intellectual property. Virgil
A. Place, M.D., the Company's Chairman of the Board and Chief Scientific
Officer, is the inventor of this intellectual property and the President and
Managing Member of ZZVAX. The Company did not seek to utilize the intellectual
property that was assigned to ZZVAX for commercial purposes. The outside
directors of the Company's Board of Directors approved the Assignment Agreement,
and the terms of the Assignment Agreement are no less favorable to the Company
than the terms that would have been negotiated with any other third party. The
Company's initial ten percent (10%) ownership interest in ZZVAX is subject to
dilution.
 
     In July 1998, the Board of Directors approved a form of Change of Control
Agreement for all senior executives. The Change of Control Agreement recognizes
that there may be periods where another company or another entity considers the
possibility of acquiring the Company or that a change in the management of the
Company may otherwise occur (collectively, "a Change of Control"), with or
without the approval of the Company's Board of Directors. The Change of Control
Agreement recognizes that such an event may cause a distraction to employees,
which may in turn cause employees to consider alternative employment
opportunities. The Board determined that it was in the best interest of the
Company to give such employees an incentive to continue their employment during
periods where the threat or occurrence of a Change of Control may exist. The
Change of Control Agreements are discussed in more detail subsequently under
"Executive Compensation."
 
     The Company's founding scientist, Chairman of the Board and Chief
Scientific Officer, Virgil A. Place, M.D., invented the Company's transurethral
system for erection (MUSE) while serving as Alza's Executive Director of Medical
and Regulatory Affairs. Dr. Place formed VIVUS in April 1991 to further develop
the MUSE technology. In August 1991, Dr. Place entered into a letter agreement
with Alza covering the MUSE technology. This was superseded by an assignment
agreement between Alza and the Company that was executed on December 31, 1993.
The assignment agreement provides for the assignment by Alza of patent
applications related to the MUSE technology. In consideration of the rights
granted to the Company under the assignment agreement, the Company issued shares
of Common Stock to Alza and is required to pay certain royalties on the sale of
any products for the transurethral treatment of erectile dysfunction. To
maintain exclusive rights beyond December 31, 1999, the Company issued an
additional 200,000 shares of Common Stock to Alza in May 1996.
 
                                        7

<PAGE>   10
 

OTHER TRANSACTIONS
 
     Mario M. Rosati, a Director and the Secretary, is also a member of Wilson
Sonsini Goodrich & Rosati, a Professional Corporation, which serves as outside
corporate counsel for the Company.
 
F
ILING OF REPORTS BY DIRECTORS AND OFFICERS
 
     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than ten percent
(10%) of a registered class of the Company's equity securities, to file certain
reports of ownership with the SEC. Such officers, directors and stockholders are
also required by SEC rules to provide the Company with copies of all Section
16(a) forms that they file. Based solely on its review of copies of such forms
received by the Company, or on written representations from certain reporting
persons, the Company believes that during the period from January 1, 2000 to
December 31, 2000, its executive officers, directors and ten percent (10%)
stockholders filed all required Section 16(a) reports on a timely basis.
 
                                        8

<PAGE>   11
 

                             EXECUTIVE COMPENSATION
 
COMPENSATION TABLES
 
     Summary Compensation Table. The following table sets forth the compensation
paid by the Company during the fiscal years ended December 31, 2000, 1999, and
1998 to the Chief Executive Officer and its four other most highly compensated
executive officers:
 
                           SUMMARY COMPENSATION TABLE
 

<TABLE>
<CAPTION>
                                                                               LONG-TERM
                                                                              COMPENSATION
                                                     ANNUAL COMPENSATION       SECURITIES     ALL OTHER
                                          FISCAL   -----------------------     UNDERLYING    COMPENSATION
      NAME AND PRINCIPAL POSITION          YEAR    SALARY($)(1)   BONUS($)     OPTIONS(#)        ($)
      ---------------------------         ------   ------------   --------    ------------   ------------
<S>                                       <C>      <C>            <C>         <C>            <C>
Leland F. Wilson........................   2000      367,500       10,500        70,000             --
  President and Chief Executive Officer    1999      350,005      116,667(2)         --             --
                                           1998      319,032      139,500(3)    829,998(4)          --
Terry M. Nida...........................   2000      202,587        5,788        35,000             --
  Vice President, Corporate Development    1999      191,459       63,313(2)         --             --
  and International Marketing              1998      192,938       46,000(3)    258,750(5)      33,120(6)
Carol D. Karp...........................   2000      179,962        5,142        35,000             --
  Vice President, Regulatory Affairs       1999      171,904       54,933(2)         --             --
                                           1998      164,764       23,200(3)    115,625(7)          --
Guy P. Marsh............................   2000      177,254(8)     8,250        47,500             --
  Vice President, U.S. Operations          1999      117,408           --        30,000         99,083(9)
                                           1998      100,877       25,000(10)    75,000(11)         --
Richard Walliser........................   2000      166,400        4,800        28,000             --
  Vice President of Finance and            1999      159,994           --            --             --
  Chief Financial Officer                  1998        9,230(12)       --        90,000             --
</TABLE>

 
---------------
 (1) As of January 1, 2001, the annual base salaries of Mr. Wilson, Mr. Nida,
     Ms. Karp, Mr. Marsh and Mr. Walliser were increased to $396,900, $218,792,
     $188,960, $194,400 and $175,552, respectively.
 
 (2) This is the "Retention Incentive Bonus" offered to all employees as a
     result of the restructuring in 1998 and paid on April 15, 1999.
 
 (3) Consists of performance bonuses earned in fiscal 1997 and paid in February
     1998.
 
 (4) Consists of 150,000 shares underlying an option granted in December 1998
     and 679,998 shares underlying options granted prior to 1998 that were
     cancelled and re-granted in connection with the repricing -- see "Report of
     the Compensation Committee -- stock option repricing."
 
 (5) Consists of 52,500 shares underlying an option granted in December 1998 and
     206,250 shares underlying options granted prior to 1998 that were cancelled
     and re-granted in connection with the repricing -- see "Report of the
     Compensation Committee -- stock option repricing."
 
 (6) Amounts received for housing and automobile allowance.
 
 (7) Consists of 52,500 shares underlying an option granted in December 1998 and
     63,125 shares underlying options granted prior to 1998 that were cancelled
     and re-granted in connection with the repricing -- see "Report of the
     Compensation Committee -- stock option repricing."
 
 (8) Mr. Marsh joined the Company in May 1998 and resigned in December 1998 for
     personal reasons. He was rehired in April 1999 as General Manager for the
     manufacturing facility in Lakewood, New Jersey. In July 2000, Mr. Marsh was
     promoted to his current position of Vice President, Operations.
 
 (9) Consists of amounts received for relocation (grossed up for tax purposes).
 
(10) Consists of a sign-on bonus paid.
 
(11) Consists of 50,000 shares underlying an option granted in October 1998 and
     25,000 shares underlying an option granted in May 1998. These options were
     cancelled in December 1998 when Mr. Marsh resigned his position with the
     Company.
 
(12) Richard Walliser commenced employment with VIVUS, Inc. on December 8, 1998.
                                        9

<PAGE>   12
 
     Employment Agreements. There are no employment agreements between the
Company and any of its executive officers, except that Leland F. Wilson is
entitled to severance pay of four months' salary in the event of termination of
employment without cause.
 
  Change of Control Agreements.
 
     On July 8, 1998, the Company entered into Change of Control Agreements with
Leland F. Wilson, Neil Gesundheit, M.D., M.P.H., Terry M. Nida and Carol D.
Karp. On January 8, 1999, the Company entered into a Change of Control Agreement
with Richard Walliser. On April 19, 1999, the Company entered into a Change of
Control Agreement with Guy P. Marsh, and on October 2, 2000, the Company entered
into a Change of Control Agreement with John W. Dietrich, Ph.D. (collectively,
the "Executive Officers") containing the same terms and conditions. On May 12,
2000, the Company amended the Change of Control Agreements to provide
accelerated vesting and exercisability of options granted upon the closing of a
Change of Control. Upon the involuntary termination of an Executive Officer's
employment without cause in connection with a Change of Control, the Executive
Officer is entitled to receive the following benefits:
 
          (1) Monthly severance payments for twenty-four (24) months following
     the effective date of termination equal to the monthly salary that the
     Executive Officer was receiving immediately prior to the change of control;
 
          (2) Monthly severance payments equal to one-twelfth ( 1/12) of the
     Executive Officer's target bonus for the fiscal year in which the
     termination occurs;
 
          (3) Pro-rated amount of the 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 that the Company employed the Executive
     Officer;
 
          (4) Continuation of benefits through the end of the severance period
     that are identical to those the Executive Officer was entitled to
     immediately prior to the Change of Control;
 
          (5) Outplacement services not to exceed Twenty Thousand Dollars
     ($20,000.00); and
 
          (6) All unvested stock options granted and outstanding will
     automatically accelerate in full and become immediately vested and
     exercisable upon the closing of a Change of Control event.
 
STOCK OPTION INFORMATION
 
     Option Grants in Last Fiscal Year. The following table sets forth certain
information for the year ended December 31, 2000, with respect to each grant of
stock options to the individuals named in the Summary Compensation Table:
 
                             OPTION GRANTS IN 2000
 

<TABLE>
<CAPTION>
                                                INDIVIDUAL GRANTS
                                --------------------------------------------------
                                             % OF TOTAL                               POTENTIAL REALIZABLE VALUE
                                              OPTIONS                                 AT ASSUMED ANNUAL RATES OF
                                NUMBER OF    GRANTED TO                              STOCK PRICE APPRECIATION FOR
                                UNDERLYING   EMPLOYEES     EXERCISE                         OPTION TERM(4)
                                 OPTIONS     IN FISCAL     PRICE PER    EXPIRATION   -----------------------------
             NAME               GRANTED(1)    YEAR(2)     SHARE($)(3)      DATE           5%              10%
             ----               ----------   ----------   -----------   ----------   -------------   -------------
<S>                             <C>          <C>          <C>           <C>          <C>             <C>
Leland F. Wilson..............    70,000       12.08%       4.8438       01/19/10     213,236.79      540,383.88
Terry M. Nida.................    35,000        6.04%       4.8438       01/19/10     106,618.39      270,191.94
Carol D. Karp.................    35,000        6.04%       4.8438       01/19/10     106,618.39      270,191.94
Guy P. Marsh..................    17,500        3.02%       4.8438       01/19/10      53,309.20      135,095.97
                                  30,000        5.17%       6.6880       07/17/10     126,181.42      319,768.49
                                  ------       -----                                  ----------      ----------
                                  47,500        8.19%                                 179,490.62      454,864.46
Richard Walliser..............    28,000        4.83%       4.8438       01/19/10      85,294.71      216,153.55
</TABLE>

 
                                        10

<PAGE>   13
 
---------------
(1) The stock options granted in 2000 are generally exercisable starting one
    year after the date of grant, with 25% of the shares covered thereby
    becoming exercisable at that time and with an additional 1/48 of the total
    number of option shares becoming exercisable at the end of each month
    thereafter, with full vesting occurring on the fourth anniversary of the
    date of grant.
 
(2) Based on an aggregate of 579,660 options granted in 2000, including options
    granted to the individuals named in the Summary Compensation Table above.
 
(3) Options are granted at an exercise price equal to the closing market per
    share price on the date of grant.
 
(4) In accordance with the rules of the SEC, shown are the gains or "option
    spreads" that would exist for the respective options granted. These gains
    are based on the assumed rates of annual compound stock price appreciation
    of 5% and 10% from the date the option was granted over the full option
    term. These assumed annual compound rates of stock price appreciation are
    mandated by the rules of the SEC and do not represent the Company's estimate
    or projection of future Common Stock prices.
 
     Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End
Values. The following table sets forth certain information concerning the stock
options exercised by the Executive Officers named in the Summary Compensation
Table during the year ended December 31, 2000 and the value of unexercised stock
options held by such individuals at the end of the year.
 
          AGGREGATE OPTION EXERCISES IN 2000 AND 2000 YEAR-END VALUES
 

<TABLE>
<CAPTION>
                                                            NUMBER OF SECURITIES
                                                           UNDERLYING UNEXERCISED         VALUE OF UNEXERCISED
                              NUMBER OF       VALUE              OPTIONS AT              IN-THE-MONEY OPTIONS AT
                               SHARES       REALIZED        DECEMBER 31, 2000(#)         DECEMBER 31, 2000($)(1)
                              ACQUIRED        UPON       ---------------------------   ---------------------------
           NAME              ON EXERCISE   EXERCISE($)   EXERCISABLE   UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE
           ----              -----------   -----------   -----------   -------------   -----------   -------------
<S>                          <C>           <C>           <C>           <C>             <C>           <C>
Leland F. Wilson...........        --           --        1,595,477       660,000      382,993.98         -0-
Virgil A. Place, M.D. .....        --           --           23,125        37,500             -0-         -0-
Terry M. Nida..............        --           --          225,940        67,810             -0-         -0-
Carol D. Karp..............        --           --           76,718        73,907             -0-         -0-
Richard Walliser...........        --           --           52,500        65,500             -0-         -0-
Guy P. Marsh...............        --           --           12,500        65,000             -0-         -0-
</TABLE>

 
---------------
(1) Based upon a fair market value of $2.1567 per share as of December 31, 2000
    less the exercise price per share.
 
A
UDIT COMMITTEE REPORT
 
     In fulfilling its written charter adopted by the Board in May 2000, the
Audit Committee assists the Board in fulfilling its responsibility for oversight
of the quality and integrity of the accounting, auditing and financial reporting
practices of the Company. During fiscal year 2000, the Audit Committee met four
times, and the Audit Committee chair, as representative of the Audit Committee,
discussed the interim financial information contained in each quarterly earnings
announcement with senior management of the Company and independent auditors
prior to public release. A copy of the Audit Committee Charter is attached
hereto as Exhibit A.
 
     In discharging its oversight responsibility as to the audit process, the
Audit Committee obtained from the independent auditors a formal written
statement describing all relationships between the auditors and the Company that
might bear on the auditors' independence consistent with Independence Standards
Board Standard No. 1, "Independent Discussions with Audit Committees," discussed
with the auditors any relationships that may impact their objectivity and
independence and satisfied itself as to the auditors' independence. The Audit
Committee also discussed with management and the independent auditors the
quality and adequacy of the Company's internal controls. The Audit Committee
reviewed the independent auditors' audit plans, audit scope, and identification
of audit risks.
 
     The Audit Committee discussed and reviewed with the independent auditors
all communications required by generally accepted auditing standards, including
those described in Statement on Auditing
 
                                        11

<PAGE>   14
 
Standards No. 61, as amended, "Communication with Audit Committees" and, with
and without management present, discussed and reviewed the results of the
independent auditors' examination of the financial statements.
 
     The Audit Committee reviewed the audited financial statements of the
Company as of and for the fiscal year ended December 31, 2000, with management
and the independent auditors. Management has the responsibility for the
preparation of the Company's financial statements and the independent auditors
have the responsibility for the examination of those statements.
 
     Based on the above-mentioned review and discussions with management and the
independent auditors, the Audit Committee recommended to the Board that the
Company's audited financial statements be included in its Annual Report on Form
10-K for the fiscal year ended December 31, 2000, for filing with the Securities
and Exchange Commission. The Audit Committee also recommended the reappointment,
subject to shareholder ratification, of Arthur Andersen LLP as the independent
auditors and the Board concurred in such recommendation.
 
     This Audit Committee report shall not be deemed incorporated by reference
by any general statement incorporating by reference this Proxy Statement into
any filing under the Securities Act of 1933 or under the Securities Exchange Act
of 1934, except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts, and such information shall be entitled to the benefits provided in Item
306(c) and (d) of Regulation S-K and Item 7(e)(3)(v) of Schedule 14A.
 
                                          Joseph E. Smith
                                          Chairman
 
                                          Mark B. Logan
                                          Linda M. Shortliffe, M.D.
                                          Members
 
                         COMPENSATION COMMITTEE REPORT
 
     The members of the Compensation Committee of the Board of Directors provide
the following report to stockholders.
 
GENERAL
 
     Since VIVUS' initial public offering in April 1994, the Compensation
Committee (the "Committee") of the Board has administered the Company's
management compensation policies and plans. The Committee is a standing
committee comprised of outside Directors. The Committee determines the annual
base salary for each executive officer, including the Chief Executive Officer
("CEO"), and the criteria under which cash incentive bonuses, if any, may be
paid. The Committee also exercises the authority to grant options under the
Company's 1991 Incentive Stock Plan and other equity incentive plans.
 
COMPENSATION VEHICLES
 
     During fiscal 2000, the Company's cash and equity-based compensation
program was successful in focusing and retaining key employees necessary to
accomplish critical product development work, optimal operating efficiencies and
positive cash to enable further development opportunities. The Company focused
on cash and equity-based compensation programs designed to ensure that the
organization's cash and equity structure was equitable and competitive with
other companies with similar business focus and structure.
 
     Cash Compensation. Before determining the compensation with respect to
executive officers, the Committee's policy is to review base salaries proposed
by the CEO and evaluate each executive officer's experience and proposed
responsibilities and the salaries of similarly situated executives, including a
 
                                        12

<PAGE>   15
 
comparison to base salaries for comparable positions at other companies. In
determining its recommendations for adjustments to executive officers' base
salaries, the Committee's policy is to focus primarily on the executive
officers' contributions towards the Company's success in moving toward its
long-term goals during the fiscal year and the quality of the services rendered
by the executive officers. In recommending the CEO's fiscal 2001 salary, the
Committee used the same criteria it applies to other executive officers. Based
on the overall achievements of the Company during fiscal 2000, the Committee
granted a salary increase and stock option grants in the first quarter of 2001.
Additionally, bonuses were paid in the first quarter of 2001 to all employees in
recognition of attaining certain Company goals in 2000, which were driven toward
the overall achievements and success of the Company.
 
     Stock Option Program. The Committee grants options as an incentive to
employees who are expected to contribute to the Company's future success. The
Committee believes stock options encourage the achievement of superior results
over time and align employee and stockholder interests. The option program
incorporates a four-year vesting period to encourage employees to continue in
the Company's employ. In fiscal 2000, the Company continued its policy of
granting stock options to all new employees in conjunction with employee
performance.
 
POLICY ON DEDUCTIBILITY OF COMPENSATION
 
     Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), limits the tax deduction to $1 million for compensation paid to its
five most highly compensated executive officers, unless certain requirements are
met. One requirement is that the Committee consist entirely of outside Directors
as defined in the Code, and VIVUS' Committee meets this requirement. Another
requirement is that compensation over $1 million must be based upon Company
attainment of pre-established, objective performance goals. VIVUS believes that
all compensation paid to its five most highly compensated executive officers in
fiscal 2000 is fully deductible. The Committee's present intention is to comply
with the requirements of Section 162(m) unless and until the Committee
determines that compliance would not be in the best interest of VIVUS and its
stockholders.
 
STOCK OPTION REPRICING
 
     On October 5, 1998, the Board of Directors offered all employees (except
the named officers below) and certain consultants holding options to purchase
Common Stock of the Company at exercise prices greater than $4.00 per share the
opportunity to reprice their options to the fair market value of the Company's
Common Stock as of the closing of the stock market on October 19, 1998
($2.9375). On October 5, 1998, the Board of Directors offered Leland F. Wilson,
Neil Gesundheit, M.D., M.P.H., Terry M. Nida and Carol D. Karp the option to
reprice (i) one-half of the options to purchase Common Stock of the Company at
exercise prices greater than $4.00 per share to the fair market value of the
Company's Common Stock as of the closing of the stock market on October 19, 1998
($2.9375), and (ii) one-half of the options to purchase Common Stock of the
Company at exercise prices greater than $4.00 per share to one hundred fifty
percent of the fair market value of the Company's Common Stock as of the closing
of the stock market on October 19, 1998 ($4.4063). The stock option repricing
was an acknowledgment of the importance to the Company of its employees and of
the incentive to employees represented by stock options, especially in
considering alternative opportunities. The Board considered such factors as the
competitive environment for obtaining and retaining qualified employees and the
overall benefit to the stockholders from a highly motivated group of employees.
 
                                        13

<PAGE>   16
 
     The following table sets forth, as to all executive officers of the
Company, certain information concerning the repricing of all such officers'
options since the Company's inception.
 

<TABLE>
<CAPTION>
                                                                                                    LENGTH OF
                                                                                                     ORIGINAL
                                  NUMBER OF                                                        OPTION TERM
                                  SECURITIES                 MARKET       EXERCISE        NEW      REMAINING AT
                                  UNDERLYING    ORIGINAL    PRICE AT    PRICE AT TIME   EXERCISE     DATE OF
  NAME AND PRINCIPAL POSITION      OPTIONS     GRANT DATE   REPRICING   OF REPRICING     PRICE      REPRICING
  ---------------------------     ----------   ----------   ---------   -------------   --------   ------------
<S>                               <C>          <C>          <C>         <C>             <C>        <C>
Leland F. Wilson................   125,000      10/13/94     $2.9375      $ 6.5625      $2.9375     5.98 Yrs.
  President, Chief Executive
  Officer                          125,000      10/13/94     $2.9375      $ 6.5625      $4.4063     5.98 Yrs.
  and Director                      60,000       1/17/95     $2.9375      $ 6.7500      $2.9375     6.24 Yrs.
                                    60,000       1/17/95     $2.9375      $ 6.7500      $4.4063     6.24 Yrs.
                                    60,000        1/2/96     $2.9375      $15.0000      $2.9375     7.20 Yrs.
                                    60,000        1/2/96     $2.9375      $15.0000      $4.4063     7.20 Yrs.
                                    44,999      12/11/96     $2.9375      $16.7500      $2.9375     8.15 Yrs.
                                    44,999      12/11/96     $2.9375      $16.7500      $4.4063     8.15 Yrs.
                                    50,000       12/8/97     $2.9375      $21.6250      $2.9375     9.14 Yrs.
                                    50,000       12/8/97     $2.9375      $21.6250      $4.4063     9.14 Yrs.
                                   -------
                                   679,998
Neil Gesundheit, M.D. ..........    20,718       1/17/95     $2.9375      $ 6.7500      $2.9375     6.24 Yrs.
  Vice President, Clinical
  Research                          20,718       1/17/95     $2.9375      $ 6.7500      $4.4063     6.24 Yrs.
                                    25,000        1/2/96     $2.9375      $15.0000      $2.9375     7.20 Yrs.
                                    25,000        1/2/96     $2.9375      $15.0000      $4.4063     7.20 Yrs.
                                    20,000      12/11/96     $2.9375      $16.7500      $2.9375     8.15 Yrs.
                                    20,000      12/11/96     $2.9375      $16.7500      $4.4063     8.15 Yrs.
                                    17,500       12/8/97     $2.9375      $21.6250      $2.9375     9.14 Yrs.
                                    17,500       12/8/97     $2.9375      $21.6250      $4.4063     9.14 Yrs.
                                   -------
                                   166,436
Terry M. Nida...................    46,875       12/1/95     $2.9375      $11.8750      $2.9375     7.12 Yrs.
  Vice President, Corporate        103,125       12/1/95     $2.9375      $11.8750      $4.4063     7.12 Yrs.
  Development and International     30,000      12/11/96     $2.9375      $16.7500      $2.9375     8.15 Yrs.
  Marketing                         26,250       12/8/97     $2.9375      $21.6250      $2.9375     9.14 Yrs.
                                   -------
                                   206,250
Carol D. Karp...................    25,000        9/2/97     $2.9375      $28.2500      $2.9375     8.87 Yrs.
  Vice President, Regulatory
  Affairs                           25,000        9/2/97     $2.9375      $28.2500      $4.4063     8.87 Yrs.
                                     6,562       12/8/97     $2.9375      $21.6250      $2.9375     9.14 Yrs.
                                     6,563       12/8/97     $2.9375      $21.6250      $4.4063     9.14 Yrs.
                                   -------
                                    63,125
</TABLE>

 
SUMMARY
 
     The Committee believes that the Company's compensation policy as practiced
to date by the Committee and the Board has been successful in attracting and
retaining qualified employees and in tying compensation directly to corporate
performance relative to corporate goals. The Company's compensation policy will
continue to evolve over time as the Company matures while continuing its focus
on building long-term stockholder value.
 
     This Compensation Committee report shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts, and such information shall be entitled to the
benefits provided in Item 306(c) and (d) of Regulation S-K and Item 7(e)(3)(v)
of Schedule 14A.
 
                                  Respectfully submitted by the Compensation
                                  Committee of the Board of Directors:
 
                                  Mario M. Rosati, Mark B. Logan and Linda M.
                                  Shortliffe, M.D.
 
                                        14

<PAGE>   17
 
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
     The Committee is responsible for determining salaries, incentives and other
forms of compensation for directors, officers and other employees of the
Company. The Committee also administers various incentive compensation and
benefit plans. Mr. Wilson, President and Chief Executive Officer, and Richard
Walliser, Vice President of Finance and Chief Financial Officer, generally
participate in discussions and decisions regarding salaries and incentive
compensation for all employees and consultants to the Company, except that Mr.
Wilson and Mr. Walliser are excluded from discussions regarding their respective
salaries and incentive compensation.
 
                                        15

<PAGE>   18
 
CORPORATE PERFORMANCE GRAPH
 
     The following graph shows a comparison of total stockholder return for
holders of the Company's Common Stock from April 7, 1994, the date of the
Company's initial public offering, through December 31, 2000 compared with The
NASDAQ Stock Market and NASDAQ Pharmaceutical Stocks. This graph is presented
pursuant to SEC rules. The Company believes that while total stockholder return
can be an important indicator of corporate performance, the stock prices of
medical technology stocks like VIVUS are subject to a number of market-related
factors other than company performance, such as competitive announcements,
mergers and acquisitions in the industry, the general state of the economy, and
the performance of other medical technology stocks.
                              [PERFORMANCE GRAPH]
 

<TABLE>
<CAPTION>
                                                                             THE NASDAQ STOCK MARKET      NASDAQ PHARMACEUTICAL
                                                       VIVUS, INC.                    -U.S.              STOCKS - U.S. & FOREIGN
                                                       -----------           -----------------------     -----------------------
<S>                                             <C>                         <C>                         <C>
4/7/94                                                   100.000                     100.000                     100.000
4/29/94                                                  103.390                      97.122                      95.950
5/31/94                                                   94.915                      97.360                      94.652
6/30/94                                                   94.915                      93.804                      87.260
7/29/94                                                   93.220                      95.730                      89.899
8/31/94                                                   93.220                     101.829                      99.654
9/30/94                                                   88.136                     101.571                      98.279
10/31/94                                                  89.831                     103.552                      94.921
11/30/94                                                  89.831                     100.120                      95.339
12/30/94                                                 103.390                     100.431                      92.250
1/31/95                                                   89.831                     100.959                      97.636
2/28/95                                                  101.695                     106.266                     101.325
3/31/95                                                  116.949                     109.423                      99.876
4/28/95                                                   88.136                     112.871                     102.701
5/31/95                                                   77.153                     115.788                     104.004
6/30/95                                                  101.695                     125.165                     116.190
7/31/95                                                  103.390                     134.353                     126.194
8/31/95                                                  162.712                     137.079                     141.119
9/29/95                                                  139.837                     140.237                     145.180
10/31/95                                                 137.288                     139.429                     139.693
11/30/95                                                 176.271                     142.696                     146.708
12/29/95                                                 211.864                     141.941                     169.243
1/31/96                                                  191.105                     142.652                     184.048
2/29/96                                                  170.346                     148.092                     180.495
3/29/96                                                  210.169                     148.588                     176.099
4/30/96                                                  205.085                     160.898                     185.202
5/31/96                                                  200.854                     168.277                     191.494
6/28/96                                                  222.034                     160.689                     170.938
7/31/96                                                  247.458                     146.386                     152.500
8/30/96                                                  237.288                     154.611                     163.645
9/30/96                                                  257.627                     166.434                     174.999
10/31/96                                                 227.119                     164.584                     167.268
11/29/96                                                 233.058                     174.787                     164.752
12/31/96                                                 245.763                     174.639                     169.761
1/31/97                                                  413.559                     187.030                     184.064
2/28/97                                                  374.576                     176.678                     185.103
3/31/97                                                  271.186                     165.157                     161.066
4/30/97                                                  250.427                     170.306                     151.644
5/30/97                                                  277.125                     189.594                     174.529
6/30/97                                                  322.888                     195.423                     173.971
7/31/97                                                  405.085                     216.012                     178.795
8/29/97                                                  362.712                     215.689                     176.606
9/30/97                                                  508.475                     228.471                     195.240
10/31/97                                                 357.627                     216.568                     185.394
11/28/97                                                 303.390                     217.712                     179.672
12/31/97                                                 144.068                     213.895                     175.430
1/31/98                                                  200.854                     220.669                     173.757
2/28/98                                                  157.627                     241.405                     179.467
3/31/98                                                  159.322                     250.327                     192.608
4/30/98                                                  144.068                     254.559                     187.897
5/31/98                                                  125.424                     240.415                     181.272
6/30/98                                                   81.776                     257.236                     178.045
7/31/98                                                   89.831                     254.235                     179.602
8/31/98                                                   40.678                     203.840                     137.707
9/30/98                                                   47.037                     232.120                     168.121
10/31/98                                                  38.563                     242.318                     179.396
11/30/98                                                  41.098                     266.956                     188.265
12/31/98                                                  35.173                     301.638                     223.318
1/31/99                                                   35.173                     345.420                     244.564
2/28/99                                                   35.173                     314.488                     228.479
3/31/99                                                   54.237                     338.284                     244.921
4/30/99                                                   64.407                     349.182                     226.067
5/31/99                                                   58.047                     339.511                     240.548
6/30/99                                                   35.593                     370.059                     249.493
7/31/99                                                   44.068                     363.385                     279.931
8/31/99                                                   44.068                     378.784                     303.513
9/30/99                                                   40.678                     379.272                     287.016
10/31/99                                                  31.783                     409.669                     290.819
11/30/99                                                  30.508                     459.512                     327.553
12/31/99                                                  42.793                     560.556                     419.743
1/31/00                                                   61.871                     539.760                     481.854
2/29/00                                                   77.966                     642.317                     676.803
3/31/00                                                  112.285                     629.119                     515.163
4/28/00                                                   67.797                     529.152                     452.803
5/31/00                                                   78.820                     465.319                     442.520
6/30/00                                                   94.075                     546.970                     571.858
7/31/00                                                   65.261                     517.336                     532.495
8/31/00                                                   70.346                     578.461                     637.458
9/29/00                                                   57.627                     503.284                     629.011
10/31/00                                                  44.068                     461.761                     568.110
11/30/00                                                  27.539                     356.017                     501.739
12/29/00                                                  29.234                     337.278                     522.094
</TABLE>

 

                                 PROPOSAL TWO:
 
                         CONFIRMATION OF APPOINTMENT OF
                         INDEPENDENT PUBLIC ACCOUNTANTS
 
P
ROPOSAL
 
     The Board has selected Arthur Andersen LLP to audit the consolidated
financial statements of the Company for the year ending December 31, 2001 and
recommends that the stockholders confirm the selection. Arthur Andersen LLP has
audited the Company's financial statements since June 8, 1994. In the event of a
negative vote, the Board will reconsider its selection. Representatives of
Arthur Andersen LLP are expected to be present at the meeting, will have the
opportunity to make a statement if they so desire, and are expected to be
available to respond to appropriate questions.
 
FEES BILLED TO THE COMPANY BY ARTHUR ANDERSEN LLP DURING FISCAL 2000 CONSIST OF:
 
     Audit fees billed to the Company by Arthur Andersen LLP for audit services
in connection with the audit of the Company's annual financial statements for
fiscal 2000 included in the Company's annual report on
 
                                        16

<PAGE>   19
 
Form 10-K and the review of the financial statements included in the Company's
quarterly reports on Form 10-Q totaled $147 thousand.
 
     Other fees billed to the Company by Arthur Andersen LLP for all non-audit
services rendered, which consisted primarily of tax related services, totaled
$78 thousand.
 
REQUIRED VOTE; RECOMMENDATION OF THE BOARD OF DIRECTORS
 
     Confirmation of the appointment of Arthur Andersen LLP as the Company's
independent public accountants requires the affirmative vote of a majority of
the Votes Cast.
 
 
    THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS
PROPOSAL. THE EFFECT OF AN ABSTENTION IS THE SAME AS THAT OF A VOTE AGAINST THE
PROPOSAL.
 
                                 OTHER MATTERS
 
     The Company knows of no other matters to be submitted to the meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the enclosed proxy card to vote the shares they represent as
the Board may recommend.
 
     It is important that your stock be represented at the meeting, regardless
of the number of shares that you hold. You are, therefore, urged to execute and
return the accompanying proxy in the enclosed envelope at your earliest
convenience.
 
                                        17

<PAGE>   20
 
                                                                       EXHIBIT A
 
                                  VIVUS, INC.
 
                   AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
 
                                    CHARTER
 
I. PURPOSE
 
     The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities by reviewing: the
financial reports and other financial information provided by the Corporation to
any governmental body or the public; the Corporation's Systems of internal
controls regarding finance, accounting, legal compliance and ethics that
management and the Board have established; and the Corporation's auditing,
accounting and financial reporting processes generally. Consistent with this
function, the Audit Committee should encourage continuous improvement of, and
should foster adherence to, the company's policies, procedures and practices at
all levels. The Audit Committee's primary duties and responsibilities are to:
 
          1. Serve as an independent and objective party to monitor the
     Corporation's financial reporting process and internal control system.
 
          2. Review and appraise the audit efforts of the Corporation's
     independent accountants.
 
          3. Provide an open avenue of communication among the independent
     accountants, financial and senior management, and the Board of Directors.
 
     The Audit Committee will primarily fulfill these responsibilities by
carrying out the activities enumerated in Section IV of this Charter.
 
II. COMPOSITION
 
     The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent directors, and free
from any relationship that, in the opinion of the Board, would interfere with
the exercise of his or her independent judgment as a member of the Committee.
All members of the Committee shall have a working familiarity with basic finance
and accounting practices, and at least one member of the Committee shall have
accounting or related financial management expertise. Committee members may
enhance their familiarity with finance and accounting by participating in
educational programs conducted by the Corporation or an outside consultant.
 
     The members of the Committee shall be elected by the Board at the annual
organizational meeting of the Board or until their successors shall be duly
elected and qualified. Unless a Chair is elected by the full Board, the members
of the Committee may designate a Chair by majority vote of the full Committee
membership.
 
III. MEETINGS
 
     The Committee shall meet at least four times annually, or more frequently
as circumstances dictate. As part of its job to foster open communication, the
Committee should meet at least annually with management and the independent
accountants in separate executive sessions to discuss any matters that the
Committee or each of these groups believe should be discussed privately. In
addition, the Committee or at least its Chair should meet with the independent
accountants and management quarterly to review the Corporation's financials
consistent with 1c. below.
 
                                       A-1

<PAGE>   21
 
IV. RESPONSIBILITIES AND DUTIES
 
     To fulfill its responsibilities and duties, the Audit Committee shall:
 
  1. Documents/Reports Review
 
          a. Review and update this Charter periodically, at least annually, as
     conditions dictate.
 
          b. Review the organization's annual financial statements and any
     reports or other financial information submitted to any governmental body,
     or the public, including any certification, report, opinion, or review
     rendered by the independent accountants.
 
          c. Review with financial management and the independent accountants
     the quarterly financial results prior to the release of earnings. The Chair
     of the Committee may represent the entire Committee for purposes of this
     review.
 
  2. Independent Accountants
 
          a. Recommend to the Board of Directors the selection of the
     independent accountants, considering independence and effectiveness, and
     approve the fees and other compensation to be paid to the independent
     accountants. On an annual basis, the Committee should review and discuss
     with the accountants all significant relationships the accountants have
     with the Corporation to determine the accountants' independence.
 
          b. Review the performance of the independent accountants and approve
     any proposed discharge of the independent accountants when circumstances
     warrant.
 
          c. Periodically consult with the independent accountants out of the
     presence of management about internal controls and the fullness and
     accuracy of the organization's financial statements.
 
  3. Financial Reporting Processes
 
          a. In consultation with the independent accountants, review the
     integrity of the organization's financial reporting processes, both
     internal and external.
 
          b. Consider the independent accountants' judgments about the quality
     and appropriateness of the Corporation's accounting principles as applied
     in its financial reporting.
 
          d. Consider and approve, if appropriate, major changes to the
     Corporation's auditing and accounting principles and practice as suggested
     by the independent accountants, or management.
 
  4. Process Improvement
 
          a. Establish regular systems of reporting to the Audit Committee by
     management and the independent accountants regarding any significant
     judgments made in management's preparation of the financial statements and
     the view of each as to appropriateness of such judgments.
 
          b. Following completion of the annual audit, review with management
     and the independent accountants any significant difficulties encountered
     during the course of the audit, including any restrictions on the scope of
     work or access to required information.
 
          c. Review any significant disagreement among management and the
     independent accountants in connection with the preparation of the financial
     statements.
 
          d. Review with the independent accountants and management the extent
     to which changes or improvements in financial or accounting practices, as
     approved by the Audit Committee, have been implemented. (This review should
     be conducted at an appropriate time subsequent to implementation of changes
     or improvements, as decided by the Committee.)
 
                                       A-2

<PAGE>   22
 
  5. Ethical Legal Compliance
 
          a. Review with management the company's practices and policies to
     ensure that the Corporation's financial statements, reports and other
     financial information disseminated to governmental organizations and to the
     public satisfy legal requirements and ethical standards.
 
          b. Review, with the organization's counsel, legal compliance matters
     including corporate securities trading policies, as appropriate.
 
          c. Review with the organization's counsel, as appropriate, any legal
     matter that could have a significant impact on the organization's financial
     statements.
 
          d. Perform any other activities consistent with this Charter, the
     Corporation's By-Laws and governing law, as the Committee or the Board
     deems necessary or appropriate.
 
                                       A-3

<PAGE>   23
                                  VIVUS, INC.
     PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]


<TABLE>
<S>                                          <C>  <C>       <C>       <C>                                     <C>  <C>     <C>
1. ELECTION OF DIRECTORS--                   For  Withhold  For All   2. Proposal to ratify the appointment  For  Against Abstain
   Nominees: 01-Virgil A. Place, M.D.;       All    All     Except       of Arthur Andersen LLP as the        [ ]    [ ]    [ ]
   02-Leland F. Wilson; 03-Mark B. Logan;    [ ]    [ ]      [ ]         independent Public Accountants of the
   04-Linda M. Shortliffe M.D.; 05-Mario M.                              Company for fiscal 2001.
   Rosati; and 06-Graham Strachan.
                                                                      To transact such other business, in their discretion, as
   -----------------------------------------                          may properly come before the Meeting or any adjournments
   (Except Nominee(s) written above)                                  thereof.
</TABLE>



<TABLE>
<S>                                                                   <C>
                                                                      Either of such attorneys or substitutes shall have and may
                                                                      exercise all of the powers of said attorneys-in-fact
                                                                      hereunder.

                                                                                                  Dated:                  , 2001
                                                                                                        ------------------
                                                                      Signature(s)
                                                                                  ----------------------------------------------

                                                                      ----------------------------------------------------------
                                                                      This Proxy should be marked, dated and signed by the
                                                                      stockholder(s) exactly as his, her or its name appears
                                                                      hereon, and returned promptly in the enclosed envelope.
                                                                      Persons signing in a fiduciary capacity should so indicate.
                                                                      If shares are held by joint tenants or as community
                                                                      property, both should sign.
</TABLE>


                           *  FOLD AND DETACH HERE  *

                            YOUR VOTE IS IMPORTANT!

          PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
                          USING THE ENCLOSED ENVELOPE.

<PAGE>   24
PROXY                                                                      PROXY

                                  VIVUS, INC.

          THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
              2001 ANNUAL MEETING OF STOCKHOLDERS -- JUNE 14, 2001

         The undersigned stockholder of VIVUS, Inc., a Delaware corporation,
hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and
Proxy Statement, each dated April 25, 2001, and the 2000 Annual Report to
Stockholders, and hereby appoints Leland F. Wilson and Richard Walliser, and
each of them, proxies and attorneys-in-fact, with full power to each of
substitution, on behalf and in the name of the undersigned, to represent the
undersigned at the 2001 Annual Meeting of Stockholders of VIVUS, Inc. to be held
on June 14, 2001, at 10:00 a.m. local time, at VIVUS's headquarters, 1172 Castro
Street, Mountain View, CA 94040 and at any adjournments thereof, and to vote all
shares of Common Stock that the undersigned would be entitled to vote if then
and there personally present, on the matters set forth below.

         THIS PROXY WILL BE VOTED, AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE ELECTION OF DIRECTORS, FOR THE RATIFICATION OF
THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT PUBLIC ACCOUNTANTS, AND AS
SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING.

          PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
                          USING THE ENCLOSED ENVELOPE.

                  (Continued and to be signed on reverse side)