14. 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 December 31, 2016, 237,403 shares are available for grant. 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.

In January 2016, Compensation Committee of the Board of Directors approved the issuance of a total of 225,000 restricted shares of common stock, which was contingent on meeting 2015 financial objectives, to three senior executives. The outside members of the Board of Directors were also awarded a total of 100,000 restricted shares of common stock with the same vesting. During March 2016, all of the restricted shares vested upon the achievement of specified operating results and are included in the issued and outstanding common shares as of December 31, 2016.

During November 2016, 120,000 restricted shares were granted to the four outside members of the Board of Directors at a cost of $0.82 per share 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. This will result in 33,000 shares of Series A Preferred Stock, once approved by the shareholders.

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 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 weighted average grant date fair value of the common stock price in connection with the RSUs classified as equity was $1.00 and $2.39 for the years ended December 31, 2016 and 2015, respectively. The following table summarizes the components of share-based compensation expense for the years ended December 31, 2016 and 2015:

The following table summarizes the RSU and restricted stock transactions under the 2014 Plan for the years ended December 31, 2016 and 2015:

As of December 31, 2016 and 2015, there was approximately $245,000 and $733,000 of total unrecognized compensation cost related to these RSUs and restricted stock awards.

Of the total outstanding and unvested at December 31, 2016, 294,998 RSUs and restricted stock awards are classified as equity and 111,961 RSUs are classified as a liability.

The following table summarizes the share activity during the years ended December 31, 2016 and 2015 and the amount of shares available for grant at December 31, 2016:

The liability for the cash-settled awards was approximately $31,000 and $33,000 at December 31, 2016 and 2015, respectively, and is included in accrued compensation in the consolidated balance sheets. During the year ended December 31, 2016 and 2015, approximately $58,000 and $114,000, respectively, was paid in connection with the cash-settled awards.