In 2017, Spark Networks established the 2017 VSOP for selected executives and employees of the Company and its subsidiaries. In March 2018, the Company replaced the 2017 VSOP by establishing the 2018 VSOP for selected executives and employees of the Company and its subsidiaries if and to the extent that the plan participants under the 2017 VSOP have agreed to such replacement. All plan participants agreed to the replacement. Both plans, which were established following the merger between Affinitas GmbH ("Affinitas") and Spark, Inc. in 2017, replaced plans in effect under Affinitas prior to the merger.

Under the 2018 VSOP, the Company granted participants a certain number of virtual stock options in exchange for options granted under the 2017 VSOP and/or a certain number of new virtual stock options. Awards issued under the 2018 VSOP have a contractual term of 85 months and vest over a period of four years from the grant date, whereby one fourth of each option award vests upon the first anniversary of the grant with the remaining options vesting in six-month installments. The 2017 VSOP options which were exchanged for the 2018 VSOP vest over a period of three years from the grant date, whereby one third of each option award vest on the first-year anniversary of the grant and the remaining options vesting in six month installments. The Company will not grant any additional awards under the 2018 VSOP.

Vested awards under the 2018 VSOP may be settled for either equity shares or a cash amount equal to the market price of the Company's ADS minus the share price. The method of settlement is at the discretion of the Company. As a result, awards issued under the 2018 VSOP are treated as equity settled.


	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
				(in years)
Outstanding as of December 31, 2020	326,281	$	11.56	4.15


Forfeited	(16,250)	$	12.34

Outstanding as of December 31, 2021	310,031	$	11.52	3.12
Options vested and exercisable as of December 31, 2021	307,221	$	11.50	3.12

As the options are subject to a graded vesting schedule, the grant date fair value of each tranche is expensed ratably over the related vesting period. Estimated forfeitures are revised if the number of options expected to vest differ from previous estimate, and if any differences between the actual and estimated forfeitures are accounted for in the period they occur.

In January 2020, the Administrative Board of the Company (the "Administrative Board") adopted the LTIP for applicable executives and employees of the Company and its subsidiaries as part of their remuneration for future services. The LTIP provides for the grant of virtual stock options. Each option represents the right to receive, upon exercise, a certain amount in cash determined based on the relevant American Depository Shares ("ADS") Stock Price of the option minus the strike price of such option; provided, however, that the Company may elect to settle options in ADSs or ordinary shares of Spark Networks instead of cash at its sole discretion. The LTIP provides that the strike price can be set at any amount determined by the Administrative Board, including zero. Under the LTIP, the "ADS Stock Price" is, as of the grant date, the average closing price of one ADS of Spark Networks trading on a US stock exchange for the period of five trading days prior to such date. Spark Networks classifies awards under the LTIP as equity-settled.

Options granted under the LTIP have a contractual term of 85 months and vest, subject to the employee's continued service to the Company, as follows: (i) 25.0% of the total number of options granted to a participant vest 12 months after the grant date of such option, and (ii) an additional 6.25% of such options shall vest at the end of each additional three-month period thereafter until the end of the 48th month after the relevant grant date.

In connection with the adoption of the LTIP, the Administrative Board authorized for 2020 the issuance of virtual options for up to three million ADSs, including up to one million zero-priced options. In 2021, the Administrative Board authorized an additional 500,000 ADSs that may be issued under the plan, all of which may be zero-priced options. At December 31, 2021, 197,772 virtual options, and 915,932 zero-priced options were available for future grant.

During 2020 the fair value of the virtual stock options and zero-priced options were measured using a binomial option-pricing model. The inputs used in the measurement of fair values at the date of grant for the period ended December 31, 2020 are summarized below:


	Virtual Stock	Zero-Priced
	Options	Options
Share price ($)	$2.77 - $6.09	$2.91 - $6.42
Exercise price ($)	$2.23 - $4.88	$—
Option life (months)	85	85
Volatility	40.0% - 49.0%	50.2% - 74.9%
Dividend yield	$—	$—
Risk-free rate	0.52% - 1.51%	0.17% - 1.48%

Beginning in 2021, the fair value of the virtual stock options and zero-priced options are measured using a Black-Scholes option-pricing model for the year ended December 31, 2021. The Black-Scholes option-pricing model meets the fair value measurement objective and there was no material impact as a result of the change in valuation techniques. The inputs used in the measurement of the fair values at the date of grant are summarized below:


	Virtual Stock Options				Zero-Priced Options
	Long Call		Short Call		Long Call		Short Call
	Option		Option (Cap)		Option		Option (Cap)
Stock price	$3.21 - $5.42		$3.21 - $5.42		$3.21 - $5.42		$3.21 - $5.42
Strike price	$3.13 - $5.34		$31.30 - $53.40		$—		$50.00
Term	4.65 - 4.67		4.65 - 4.67		4.65 - 4.67		4.65 - 4.67
Volatility	62.7% - 64.0%		62.7% - 64.0%		62.7% - 64.0%		62.7% - 64.0%
Dividend	—	%	—	%	—	%	—	%
Risk-free rate	0.7% - 0.9%		0.7% - 0.9%		0.7% - 0.9%		0.7% - 0.9%


	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
				(in years)
Outstanding as of December 31, 2020	1,550,000	$	4.74	6.22	$	0.90
Granted	523,400	$	4.50
Exercised	(7,250)	$	3.14
Forfeited	(263,922)	$	4.47

Outstanding as of December 31, 2021	1,802,228	$	4.71	5.62	$	0.01
Vested and exercisable at December 31, 2021	611,261	$	4.81	5.19	$	0.01


	Number of Options	Weighted Average Grant Date Fair Value

Unvested as of December 31, 2020	1,550,000	$	2.99
Granted	523,400	$	1.89
Vested	(618,511)	$	3.04
Forfeited	(263,922)	$	2.73
Unvested as of December 31, 2021	1,190,967	$	2.53


						Number of Options

Outstanding as of December 31, 2020						674,000
Granted						200,900
Exercised						(207,004)
Forfeited						(83,828)
Outstanding as of December 31, 2021						584,068
Vested and exercisable at December 31, 2021						69,698


	Number of Options	Weighted Average Grant Date Fair Value

Unvested as of December 31, 2020	674,000	$	6.13
Granted	200,900	3.85
Vested	(276,702)	6.21
Forfeited	(83,828)	5.55
Unvested as of December 31, 2021	514,370	$	5.29

The total grant date fair value of options that vested during 2021 related to awards granted under the 2020 LTIP was $3.6 million. The total intrinsic value of options exercised during 2021 was $1.0 million. No options vested or were exercised during 2020.

Prior to the 2017 merger with Affinitas, Spark, Inc. granted share-based payment awards under the 2007 Omnibus Incentive Plan (the “Spark Inc. 2007 Plan”). As of the merger date, outstanding awards under the Spark Inc. 2007 Plan ("Spark Inc. Options") consisted entirely of nonqualified stock options. As the merger was considered a change in control under Spark Inc. 2007 Plan, all outstanding unvested awards became fully vested.

In connection with the merger with Affinitas, Spark Inc. established the Chardonnay Trust, with the purpose of holding such number of shares of Spark Networks SE ADSs as necessary to settle all unexercised Spark Inc. stock options awarded under the Spark 2007 Plan. For the years ended December 31, 2021 and 2020, no stock-based compensation expense was recognized for the awards granted under the Spark Inc. 2007 Plan. As discussed in Note 11—Shareholders' Equity, the Chardonnay Trust was closed in 2021.

For the years ended December 31, 2021 and 2020, the Company recognized total stock-based compensation expense for all the plans of $2.7 million and $4.8 million, respectively, which is included as a component of Selling, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss.