STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2012

STOCK-BASED COMPENSATION [Abstract]

STOCK-BASED COMPENSATION

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 200,000 shares, as adjusted for the reverse stock split, 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 and was amended at the 2012 Annual Shareholders' Meeting held May 30, 2012 to increase the number of shares of common stock subject to the plan by 100,000. As of June 30, 2012, the 2008 Plan had 135,041 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, 2012 and 2011, the Company granted 15,000 and 34,815 stock options, respectively.  During the six months ended June 30, 2012 and 2011, the Company granted 20,000 and 34,815 stock options, respectively.  The fair value of stock options granted during the three months ended June 30, 2012 was $3.21.  The fair value of stock options granted during the three months ended June 30, 2011 ranged from $6.45 to $9.42.  The fair value of stock options granted during the six months ended June 30, 2012 ranged from $2.64 to $3.21 per share.  The fair value of stock options granted during the six months ended June 30, 2011 ranged from $6.45 to $9.42 per share.  The Company recognized compensation expense as follows for the three and six months ended June 30 (in thousands):

	Three months						Six months
	2012			2011			2012		2011
Total gross compensation expense		$	75		$	105	$	124	$	202
Total tax benefit associated with compensation expense			19			34		30		51
Total net compensation expense		$	56		$	71	$	94	$	151

During the second quarter of 2012, 15,000 stock options were granted to three non-employee directors in connection with their re-election to the Company's Board of Directors at the 2012 Annual Shareholders' Meeting held on May 30, 2012.  One-third of these stock options were immediately vested on the date of grant, another one-third vest on the first anniversary of the date of grant, and the remaining one-third vest on the second anniversary of the date of grant.

As of June 30, 2012, the Company expects to record compensation expense in the future as follows (in thousands):

		Six months ending		Year ending December 31,
		December 31,
		2012		2013		2014
Total gross unrecognized compensation expense	$	80	$	86	$	17
Tax benefit associated with unrecognized compensation expense		14		17		3
Total net unrecognized compensation expense	$	66	$	69	$	14