CPSI 2017 Annual Report

77 The following table details total stock-based compensation expense for the years ended December 31, 2017, 2016 and 2015, included in the consolidated statements of operations: (In thousands) 2017 2016 2015 Costs of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,750 $ 1,396 $ 1,447 Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,416 3,970 3,933 Pre-tax stock-based compensation expense. . . . . . . . . . . . . . . . . . . . . . 7,166 5,366 5,380 Less: income tax effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,795) (2,093) (2,098) Net (after tax) stock-based compensation expense . . . . . . . . . . . . . . . . $ 4,371 $ 3,273 $ 3,282 As of December 31, 2017, there was $11.4 million of unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under the Plans, which is expected to be recognized over a weighted-average period of 2.08 years. Restricted Stock The Company grants restricted stock to executive officers, certain key employees and non-employee directors under the Plans with the fair value of the awards representing the fair value of the common stock on the date the restricted stock is granted. Shares of restricted stock generally vest in equal annual installments over the applicable vesting period, which ranges from one to five years. The Company records expenses for these grants on a straight-line basis over the applicable vesting periods. A summary of restricted stock activity under the Plans during the years ended December 31, 2017, 2016 and 2015 is as follows: Shares Weighted- Average Grant-Date Fair Value Nonvested stock outstanding at January 1, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160,216 $ 59.14 Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,850 51.85 Performance share awards converted to restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . 45,844 60.28 Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (62,628) 59.30 Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,885) 58.06 Nonvested stock outstanding at December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191,397 $ 57.12 Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86,984 52.21 Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (93,496) 57.48 Nonvested stock outstanding at December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184,885 $ 54.63 Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225,954 32.79 Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (101,644) 55.58 Nonvested stock outstanding at December 31, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309,195 $ 38.36 Performance Share Awards In 2014, the Company began to grant performance share awards to executive officers and certain key employees under the 2014 Incentive Plan. The number of shares of common stock earned and issuable under the award is determined at the end of each performance period, based on the Company's achievement of performance goals predetermined by the Compensation Committee of the Board of Directors at the time of grant. If certain levels of the performance criteria are met, the award results in the issuance of shares of restricted stock corresponding to such level, which shares are then subject to time-based vesting pursuant to which the shares of restricted stock vest in equal annual installments over the applicable vesting period, which is generally three years for restricted stock issued pursuant to performance share awards.