11.	STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

See the Form 10-K 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, 2018:

	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, 2017		888,680		$	42.17		—		$	—
Granted		330,150		$	99.49		284,118		$	82.84
Vested		(206,181	)	$	41.51		(283,080	)	$	82.84
Forfeited		(53,373	)	$	51.10		(1,038	)	$	82.64
Unvested shares of restricted stock outstanding at June 30, 2018		959,276		$	61.55		—		$	—

On January 26, 2018, we issued an aggregate of 511,361 shares of restricted stock to our executive officers and certain non-executive, non-sales employees under the Paycom Software, Inc. 2014 Long-Term Incentive Plan (the “LTIP”), consisting of 284,118 shares subject to market-based vesting conditions (“Market-Based Shares”) and 227,243 shares subject to time-based vesting conditions (“Time-Based Shares”). The Market-Based Shares were scheduled to vest 50% on the first date that the Company’s total enterprise value (“TEV”) (calculated as defined in the applicable restricted stock award agreement) equaled or exceeded $5.9 billion and 50% on the first date that the Company’s TEV equaled or exceeded $6.2 billion, in each case provided that (i) such date occurred on or before the sixth anniversary of the grant date and (ii) the recipient was employed by, or providing services to, the Company or a subsidiary on the applicable vesting date. As shown in the table below, all Market-Based Shares issued on January 26, 2018 have vested.

The following table summarizes vesting activity for Market-Based Shares during the six months ended June 30, 2018, the associated compensation cost recognized in connection with each vesting event and the number of shares withheld to satisfy tax withholding obligations:

Vesting Condition	Date Vested	Number of Shares Vested		Compensation Cost Recognized Upon Vesting	Shares Withheld for Taxes¹
Market-based (TEV = $5.9 billion)	March 14, 2018		141,599	$9.7 million		54,000
Market-based (TEV = $6.2 billion)	March 23, 2018		141,481	$10.1 million		54,909

¹ All shares withheld to satisfy tax withholding obligations are held as treasury stock.

The Time-Based Shares issued to non-executive employees in January 2018 will vest 25% on a specified initial vesting date and 25% on each of the first three anniversaries of such initial vesting date, provided that the recipient is employed by, or providing services to, the Company or a subsidiary on the applicable vesting date. The Time-Based Shares issued to executive officers in January 2018 will vest in three equal annual tranches beginning on a specified initial vesting date and thereafter on the first and second anniversaries of such date, provided that the executive officer is employed by, or providing services to, the Company or a subsidiary on the applicable vesting date.

On April 23, 2018, we issued an aggregate of 92,061 Time-Based Shares under the LTIP to certain non-executive sales employees. One-third of such Time-Based Shares will vest on a specified initial vesting date, an additional one-third of such Time-Based Shares will vest on the first anniversary of the specified initial vesting date, and the remaining one-third of such Time-Based Shares will vest on the second anniversary of the specified initial vesting date, provided that the recipient is employed by, or providing services to, the Company or a subsidiary on the applicable vesting date.

On April 30, 2018, we issued an aggregate of 9,846 shares of restricted stock under the LTIP to the non-employee members of our Board of Directors. Such shares of restricted stock will cliff-vest on the seventh day following the first anniversary of the date of grant, provided that such director is providing services to the Company through the applicable vesting date.

For the three and six months ended June 30, 2018, our total compensation expense related to restricted stock was $3.5 million and $27.0 million, respectively. For the three and six months ended June 30, 2017, our total compensation expense related to restricted stock was $12.9 million and $16.3 million, respectively, as adjusted to reflect the adoption of ASU 2014-09. There was $51.4 million of unrecognized compensation cost, net of estimated forfeitures, related to unvested shares of restricted stock outstanding as of June 30, 2018. The unrecognized compensation cost for the unvested shares is expected to be recognized over a weighted average period of 1.9 years as of June 30, 2018.

We capitalized stock-based compensation costs related to software developed for internal use of $0.4 million and $2.9 million for the three and six months ended June 30, 2018, respectively. 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.