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. During 2017, the 2014 Plan was amended whereby an additional 1,500,000 shares of common stock and 100,000 shares of Preferred Stock were added to the plan for future issuance. During 2018, an additional 200,000 shares of Preferred Stock was 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”). As of December 31, 2018, 547,790 shares of common stock and 182,400 shares of Preferred Stock are available for grant. Permissible awards include incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, 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 equity based RSUs contain a provision in which the units shall immediately vest and become converted into common shares at the rate of one common share per RSU, immediately after a change in control, as defined in the award agreement.

Common stock

During the third quarter of 2018, 68,000 RSUs of common stock were granted over two years equally to the four outside members of the Board of Directors with 25% of the shares vesting every six months. Also during the third quarter of 2018, a total of 308,000 RSUs of common stock were granted to certain Company executive officers and employees which vest over the next three years, at six-month intervals.

During the third quarter of 2017, a total of 200,000 RSUs of common stock were granted equally to the four outside members of the Board of Directors and a total of 300,000 RSUs of common stock were granted equally to three executive officers. The RSUs vest over the next two years, at six month intervals.

The following table summarizes the RSU and restricted stock transactions related to the common and Preferred Stock under the Incentive Plan for the years ended December 31, 2018 and 2017:

As of December 31, 2018 and 2017, there was approximately $2,456,000 and $793,000, respectively of total unrecognized compensation cost related to the common stock RSUs classified as equity that will be expensed through 2021. There was no unrecognized compensation cost related to the Preferred Stock RSUs.

Of the total outstanding and unvested common stock RSUs at December 31, 2018, 845,167 RSUs are classified as equity and 84,180 RSUs are classified as a liability. All of the Preferred Stock RSUs are classified as equity.

The following table summarizes the share activity during the years ended December 31, 2018 and 2017 and the amount of common and preferred shares available for grant at December 31, 2018:

The liability for the cash-settled awards was approximately $118,000 and $41,000 at December 31, 2018 and 2017, respectively, and is included in accrued compensation in the consolidated balance sheets. During the years ended December 31, 2018 and 2017, approximately $39,000 and $54,000, respectively, was paid in connection with the cash-settled awards.

Preferred stock

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. The expense for this bonus was recorded in 2016. In January 2017, the Board of Directors recommended that these bonuses be paid in shares of Preferred Stock, subject to shareholder approval. In April 2017, shareholder approval was obtained and 33,000 shares of Preferred Stock were issued.

In the fourth quarter of 2017, the Compensation Committee of the Board of Directors again approved the issuance of a total of 33,000 restricted shares of Preferred Stock, contingent on meeting 2017 financial objectives, to three executive officers. Subsequent to year-end, the Compensation Committee determined that the financial objectives were attained and all of the shares were issued. Additional Preferred Stock awards of 6,800 shares were also granted to two employees as performance bonuses. Stock-based compensation expense recorded during 2017 for these awards was approximately $1.0 million based on the liquidation value of $25 per share which approximated the fair value on the date of the grant.

In 2018, the Compensation Committee has again approved executive bonuses to be paid in 40,000 shares of Preferred Stock, with the final number of shares and the amount based on specified performance criteria being achieved during 2018. An additional Preferred Stock award of 4,800 shares was granted as a performance bonus to one employee. Stock-based compensation expense recorded during 2018 for these awards was approximately $1.2 million based on the liquidation value of $25 per share which approximated the fair value on the date of the grant. During February 2019, the Compensation Committee determined that the financial objectives were attained and all of the shares were issued including the performance bonus shares.

Stock-based compensation expense

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 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 weighted average grant date fair value of the common stock price in connection with the RSUs classified as equity was $4.53 and $1.73 for the years ended December 31, 2018 and 2017, respectively. The following table summarizes the components of share-based compensation expense for the years ended December 31, 2018 and 2017: