STOCK BASED COMPENSATION

6 Months Ended

Jun. 30, 2011

Notes To Financial Statements [Abstract]

NOTE 5: STOCK-BASED COMPENSATION

The Company currently has one active stock-based compensation plan, which was approved by shareholders. The Company grants stock options to employees, consultants, and board members at the fair market value of its common stock, on the date of grant, with a term no greater than ten years. The majority of stock options vest over two or three years. Shareholders who own 10% or more of the Company’s outstanding stock are granted incentive stock options at an exercise price that may not be less than 110% of the fair market value of the Company’s common stock on the date of grant and have a term no greater than five years.

In February 2008, the Company’s Board of Directors approved the Mannatech, Incorporated 2008 Stock Incentive Plan, as amended (the “2008 Plan”), which reserves up to 1,000,000 shares of common stock for issuance of stock options and restricted stock to our employees, board members, and consultants, plus any shares reserved under the Company’s then-existing, unexpired stock plans for which options had not yet been issued, and any shares underlying outstanding options under the then-existing stock option plans that terminate without having been exercised in full. The 2008 Plan was approved by the Company’s shareholders at the 2008 Annual Shareholders’ Meeting. As of June 30, 2011, the 2008 Plan had 90,307 stock options available for grant before the plan expires on February 20, 2018.

The Company records stock-based compensation expense related to granting stock options in selling and administrative expenses. During the three months ended June 30, 2011 and 2010, the Company granted 348,158 and 169,836 stock options, respectively. During the six months ended June 30, 2011 and 2010, the Company granted 348,158 and 306,336 stock options, respectively. The fair value of stock options granted during the three months ended June 30, 2011 ranged from $0.64 to $0.94. The fair value of stock options granted during the three months ended June 30, 2010 ranged from $1.18 to $1.86. The fair value of stock options granted during the six months ended June 30, 2011 ranged from $0.64 to $0.94 per share. The fair value of stock options granted during the six months ended June 30, 2010 ranged from $1.18 to $2.03 per share. The Company recognized compensation expense as follows for the three months ended June 30 (in thousands):

	Three months					Six months
	2011		2010			2011		2010
Total gross compensation expense	$	105	$	182	$	202	$	391
Total tax benefit associated with compensation expense		34		38		51		57
Total net compensation expense	$	71	$	144	$	151	$	334

In the second quarter of 2011, 263,158 stock options were granted to two non-employee directors in connection with their re-election to the Company’s Board of Directors by shareholders at the 2011 Annual Shareholders’ Meeting held on June 9, 2011. One-third of these stock options was immediately vested on the date of grant, another one-third vests on the first anniversary of the date of grant, and the remaining one-third vests on the second anniversary of the date of grant.

As of June 30, 2011, the Company expects to record compensation expense in the future as follows (in thousands):

	Six months ending December 31, 2011		Year ending December 31,
	Six months ending December 31, 2011		2012		2013		2014
Total gross unrecognized compensation expense	$	159	$	235	$	112	$	8
Tax benefit associated with unrecognized compensation expense		27		40		16		—
Total net unrecognized compensation expense	$	132	$	195	$	96	$	8