STOCK-BASED COMPENSATION

9 Months Ended

Sep. 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 September 30, 2012, the 2008 Plan had 140,008 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 as selling and administrative expenses. During the three months ended September 30, 2012 there were no options granted, and during the three months ended September 30, 2011, the Company granted 2,500 stock options.  During the nine months ended September 30, 2012 and 2011, the Company granted 20,000 and 37,316 stock options, respectively.    The fair value of stock options granted during the three months ended September 30, 2011 was $3.29.  The fair value of stock options granted during the nine months ended September 30, 2012 ranged from $2.64 to $3.21 per share.  The fair value of stock options granted during the nine months ended September 30, 2011 ranged from $3.29 to $9.42 per share.  The Company recognized compensation expense as follows for the three and nine months ended September 30 (in thousands):

	Three months						Nine months
	2012			2011			2012		2011
Total gross compensation expense		$	43		$	78	$	167	$	280
Total tax benefit associated with compensation expense			7			15		37		66
Total net compensation expense		$	36		$	63	$	130	$	214

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

		Three months		Year ending December 31,
		ending
		December 31,
		2012		2013		2014
Total gross unrecognized compensation expense	$	38	$	83	$	17
Tax benefit associated with unrecognized compensation expense		7		16		3
Total net unrecognized compensation expense	$	31	$	67	$	14