9.	STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

See the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 for a detailed description of the Company’s stock-based compensation awards, including information related to vesting terms and service and performance conditions.

The following table summarizes restricted stock awards activity for the six months ended June 30, 2017:

	Time-Based					Market-Based
	Restricted Stock Awards					Restricted Stock Awards
	Shares			Weighted Average Grant Date Fair Value		Shares			Weighted Average Grant Date Fair Value
Unvested shares of restricted stock outstanding at December 31, 2016		1,429,514		$	18.38		738,425		$	28.68
Granted		309,526		$	60.00		314,021		$	48.62
Vested		(590,029	)	$	5.29		(477,325	)	$	27.93
Forfeited		(51,111	)	$	36.24		(16,166	)	$	33.47
Unvested shares of restricted stock outstanding at June 30, 2017		1,097,900		$	36.32		558,955		$	40.39

On April 26, 2017, we issued an aggregate of 613,677 shares of restricted stock under the Paycom Software Inc. 2014 Long-Term Incentive Plan (the “LTIP”) to our executive officers and certain other employees. Certain shares of restricted stock are subject to market-based vesting conditions and certain shares of restricted stock are subject to time-based vesting conditions. Shares subject to market-based vesting conditions will vest 50% if the Company’s Total Enterprise Value (as defined in the applicable restricted stock award agreement) equals or exceeds $4.15 billion and 50% if the Company’s Total Enterprise Value equals or exceeds $4.45 billion. Shares subject to market-based vesting conditions will be forfeited if they do not vest within six years of the date of grant. Shares subject to time-based vesting conditions will vest over periods ranging from 2 to 5 years.

On May 1, 2017, we issued an aggregate of 9,870 shares of restricted stock under the LTIP to members of our board of directors. Such shares of restricted stock will cliff-vest on the seventh (7^th) day following the first (1^st) anniversary of the grant date, provided that the director is providing services to the Company through the applicable vesting date.

On May 13, 2017, the Company’s Total Enterprise Value reached $3.5 billion, triggering the vesting of 229,075 shares of restricted stock. The Company recognized $2.9 million of compensation cost in connection with the vesting of these shares. On June 20, 2017, the Company’s Total Enterprise Value reached $3.9 billion, triggering the vesting of 248,250 shares of restricted stock. The Company recognized $5.2 million of compensation cost in connection with the vesting of these shares. To satisfy tax withholding obligations with respect to the delivery of vested shares to certain employees, the Company withheld 91,274 shares that vested on May 13, 2017 and 103,907 shares that vested on June 20, 2017. The Company also withheld 29,948 of the 84,920 shares of restricted stock with time-based vesting conditions that vested on April 15, 2017. All shares withheld to satisfy tax withholding obligations are held as treasury stock.

For the three and six months ended June 30, 2017, our total compensation expense related to restricted stock was $13.8 million and $17.5 million, respectively. For the three and six months ended June 30, 2016, our total compensation expense related to restricted stock was $3.3 million and $4.6 million, respectively. There was $53.5 million of unrecognized compensation cost, net of estimated forfeitures, related to unvested shares of restricted stock outstanding as of June 30, 2017. The unrecognized compensation cost for the restricted shares is expected to be recognized over a weighted average period of 1.8 years as of June 30, 2017.

We capitalized stock-based compensation costs related to software developed for internal use of $1.0 million and $1.3 million for the three and six months ended June 30, 2017, respectively. We capitalized stock-based compensation costs related to software developed for internal use of $0.3 million and $0.4 million for the three and six months ended June 30, 2016, respectively.