12. STOCK-BASED COMPENSATION

In April 2014, the Company adopted the Medical Transcription Billing, Corp. 2014 Equity Incentive Plan (the “2014 Plan”), reserving a total of 1,351,000 shares of common stock for grants to employees, officers, directors and consultants. As of March 31, 2017, 257,571 shares are available for grant. During April 2017, the 2014 Plan was amended whereby an additional 1,500,000 shares of common stock and 100,000 shares of Series A Preferred Stock were added to the plan for future issuance. The name of the 2014 Plan was changed to the Amended and Restated Equity Incentive Plan (the “Incentive Plan”). Permissible awards include incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance stock and cash-settled awards and other stock-based awards in the discretion of the Compensation Committee of the Board of Directors including unrestricted stock grants.

The RSUs contain a provision in which the units shall immediately vest and become converted into the right to receive a cash payment payable on the original vesting date after a change in control as defined in the award agreement.

During November 2016, 120,000 restricted shares were granted to the four outside members of the Board of Directors which vested on January 3, 2017.

In November 2016, the Compensation Committee granted cash bonuses to three executives for the successful MediGain acquisition to be paid upon the closing of additional funding, which did not occur. In January 2017, the Board recommended that these bonuses be paid in shares of Series A Preferred Stock, subject to shareholder approval. The value of these incentives is included in accrued compensation as of March 31, 2017 and December 31, 2016 in the accompanying condensed consolidated balance sheets. In April, shareholder approval was obtained for 33,000 shares and Series A Preferred Stock was issued.

The Company recognizes compensation expense on a straight-line basis over the total requisite service period for the entire award. For stock awards classified as equity, the market price of our common or preferred stock on the date of grant is used in recording the fair value of the award. For stock awards classified as a liability, the earned amount is marked to market based on the end of period common stock price. The following table summarizes the components of share-based compensation expense for the three months ended March 31, 2017 and 2016:

The following table summarizes the RSU and restricted stock transactions related to the common stock under the Incentive Plan for the three months ended March 31, 2017:

Of the total outstanding and unvested at March 31, 2017, 158,331 RSUs and restricted stock awards are classified as equity and 84,895 RSUs are classified as a liability.

The liability for the cash-settled awards was approximately $26,000 and $31,000 at March 31, 2017 and December 31, 2016, respectively, and is included in accrued compensation in the condensed consolidated balance sheets.