VIVUS (VVUS) adopts new stockholder rights plan to replace stockholder rights plan that expired

VIVUS, Inc. (Nasdaq: VVUS) (the “Company”), a biopharmaceutical company, today announced that on December 30, 2019 its board of directors adopted a new stockholder rights plan to replace the Company’s stockholder rights plan that expired in accordance with its terms on November 9, 2019.

Under the new rights plan, the terms of which are substantially similar to the terms of the Company’s prior rights plan, VIVUS will issue a dividend of one right for each share of its common stock held by stockholders of record as of the close of business on January 13, 2020.

The new rights plan is designed to protect stockholder value by mitigating the likelihood of an “ownership change” that would result in significant limitations on the Company’s ability to use its net operating losses or other tax attributes to offset future income. The new rights plan is similar to rights plans adopted by other public companies with significant net operating loss carryforwards. The new rights plan provides, subject to certain exceptions that if any person or group acquires 4.9% or more of the Company’s outstanding common stock, there would be a triggering event potentially resulting in significant dilution in the voting power and economic ownership of that person or group. Existing stockholders who hold 4.9% or more of the Company’s outstanding common stock as of the date of the new rights plan will trigger a dilutive event only if they acquire an additional 1% of the outstanding shares of VIVUS common stock.

“The stockholder rights plan protects the interests of all stockholders from the possibility of losing potential substantial value through limitations on the Company's ability to utilize its net operating loss carryforwards under Section 382 of the Internal Revenue Code of 1986, as amended,” said VIVUS Chief Executive Officer, John Amos. “The rights plan is not intended for defensive or antitakeover purposes, but to preserve stockholder value, and our Board of Directors believes it is in the best interests of VIVUS’ stockholders.”

The new rights plan will continue in effect until December 30, 2022, unless earlier terminated or the rights are earlier exchanged or redeemed by the Board of Directors. The Company expects to submit the new rights plan to a vote at the Company’s 2020 annual meeting of stockholders. If stockholders do not approve the plan at the 2020 annual meeting, it will expire at the close of business on the following day.

Additional information with respect to the new stockholder rights plan will be contained in the Current Report on Form 8-K that the Company is filing with the Securities and Exchange Commission. A copy of the Form 8-K can be obtained at the SEC’s Internet website at www.sec.gov.

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