STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2013

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 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 to increase the number of shares of common stock subject to the plan by 100,000. As of June 30, 2013, the 2008 Plan had 74,741 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, 2013 and 2012, the Company granted 5,000 and 15,000 stock options, respectively.  During the six months ended June 30, 2013 and 2012, the Company granted 80,000 and 20,000 stock options, respectively.  The fair value of stock options granted during the three months ended June 30, 2013 was $6.07.  The fair value of stock options granted during the six months ended June 30, 2013 ranged from $3.53 to $6.07 per share.  The Company recognized compensation expense as follows for the three and six months ended June 30 (in thousands):

	Three months				Six months
	2013		2012		2013		2012
Total gross compensation expense	$	59	$	75	$	96	$	124
Total tax benefit associated with compensation expense		13		19		21		30
Total net compensation expense	$	46	$	56	$	75	$	94

During the second quarter of 2013, 5,000 stock options were granted to a non-employee director in connection with his re-election to the Company’s Board of Directors at the 2013 Annual Shareholders’ Meeting held on June 5, 2013.  One-third of these stock options were 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, 2013, the Company expects to record compensation expense in the future as follows (in thousands):

							Year ending December 31,
	Six months ending December 31, 2013			2014			2015			2016
Total gross unrecognized compensation expense		$	70		$	111		$	91		$	15
Tax benefit associated with unrecognized compensation expense			12			20			15			2
Total net unrecognized compensation expense		$	58		$	91		$	76		$	13