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)

January 21, 2011

VIVUS, INC.

(Exact name of registrant as specified in its charter)

1172 CASTRO STREET

MOUNTAIN VIEW, CA 94040

(Address of principal executive offices, including zip code)

(650) 934-5200

(Registrant’s 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 5.02.  Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

(d)  Compensation Arrangements for Non-Employee Directors

On January 21, 2011, the Compensation Committee of the Board of Directors (the “Compensation Committee”) of VIVUS, Inc. (the “Company”) approved a new cash compensation arrangement for the Company’s non-employee directors, with the existing equity compensation arrangement remaining unchanged.  The new arrangement will go into effect as of January 1, 2011.  Under this arrangement, each non-employee director will receive an annual retainer of $97,500, with the lead director receiving an additional $17,000 per year, the chairman of the Compensation Committee receiving an additional $17,000 per year and the chairman of the Audit Committee of the Board of Directors receiving an additional $22,000 per year.  The annual retainers are paid in equal quarterly installments.

On January 21, 2011, the Compensation Committee also approved a stock option grant for each of Charles J. Casamento, Mark B. Logan, and Linda M. Dairiki Shortliffe exercisable for 25,000 shares of the Company’s common stock.  The shares subject to the stock options vest and become exercisable at a rate of 12.5% per month on the first day of each month following the date of grant, subject to the option holder’s continued services to the Company on such dates.  Each stock option has an exercise price of $8.74 per share, a 10 year term from the date of grant and an exercise period equal to 12 months from termination of the option holder’s services to the Company.

(e)  Cash Bonus Payments and Stock Option Awards for Named Executives

On January 21, 2011, the Compensation Committee authorized and approved cash bonus payments pursuant to a Company employee annual bonus plan for fiscal year 2010 adopted on the same date (the “Bonus Plan”) and stock option awards to certain of the Company’s employees, including named executive officers Leland F. Wilson, Chief Executive Officer, Peter Y. Tam, President, Timothy E. Morris, Senior Vice President, Finance and Chief Financial Officer, Michael P. Miller, Senior Vice President and Chief Commercial Officer and Guy P. Marsh, Vice President, U.S. Operations and General Manager.  The bonus payment and stock option award for Mr. Wilson were also authorized and approved pursuant to the terms of the employment agreement between the Company and Mr. Wilson dated December 20, 2007, as amended on January 23, 2009 (the “Employment Agreement”).  The following table sets forth the specific cash bonus payments and stock option awards authorized and approved for each of Messrs. Wilson, Tam, Morris, Miller and Marsh:

(1)          These officers include individuals who will be listed as named executive officers in the Company’s proxy statement to be filed in connection with its 2011 annual meeting of stockholders.

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(2)          The shares of common stock subject to each stock option shall vest and become exercisable over four (4) years as follows: 25% of the shares on the one (1) year anniversary of the date of grant, with one forty-eighth (1/48th) of the total number of shares subject to the option vesting and becoming exercisable at the end of each month thereafter, subject to the option holder’s continued services to the Company on such dates.  Each stock option has an exercise price of $8.74 per share, a 10 year term from the date of grant and an exercise period equal to 12 months from termination of the option holder’s services to the Company.

The Compensation Committee, in its sole discretion, authorized and approved the cash bonuses for each of the named executive officers.  Bonuses were calculated using a formula that includes: (a) the individual’s salary, (b) the individual’s target bonus, and (c) such other discretionary factors as the Compensation Committee determined appropriate given the performance of the Company, and the participant’s contribution to the Company’s overall performance, including the achievement of various corporate objectives.

Increases to Base Salary Compensation for Named Executive Officers

On January 21, 2011, the Compensation Committee conducted its annual review of the base salaries of the Company’s officers and employees, including its named executive officers.  The review of Mr. Wilson’s base salary was also conducted pursuant to the terms of the Employment Agreement. The following table sets forth the 2011 annual base salaries authorized and approved for each of Messrs. Wilson, Tam, Morris, Miller and Marsh:

(1)          These officers include individuals who will be listed as named executive officers in the Company’s proxy statement to be filed in connection with its 2011 annual meeting of stockholders.

Other Compensation and Arrangements for Chief Executive Officer and President

On January 21, 2011, the Compensation Committee approved the increase of Mr. Wilson’s eligibility to receive annual cash incentive payments for the achievement of performance goals established by the Board of Directors or the Compensation Committee from 50% to 52% of Mr. Wilson’s annual base salary.

On January 21, 2001, the Compensation Committee also approved the second amendment to Mr. Wilson’s Employment Agreement (the “Amendment”).  Pursuant to the Amendment, the Initial Term of the Employment Agreement is increased to four years commencing on June 1, 2007.  The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the Amendment, which is filed as Exhibit 10.1 hereto and incorporated by reference into this Item 5.02.

On January 21, 2011, the Compensation Committee approved the increase of Mr. Tam’s eligibility to receive annual cash incentive payments for the achievement of performance goals established by the Board of Directors or the Compensation Committee from 40% to 50% of Mr. Tam’s annual base salary.

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Item 9.01.  Financial Statements and Exhibits

(d)  Exhibits.

* Indicates a management contract or compensatory plan.

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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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EXHIBIT INDEX

* Indicates a management contract or compensatory plan.

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