What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2021-03-01 compared with 2020-03-02 · 1880 added, 1844 removed, 839 unchanged (82% of the section changed)

3 unchanged sentences

Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange

Act of 1934 Rule 13a-15(e)) as of the end of the period covered by this annual report on Form 10-K (the “Evaluation Date”).

Based on their review and evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of the Evaluation

Date, our Company’s disclosure controls and procedures were effective.

Management’s Annual Report on Internal Control over

Date, our Company’s disclosure controls and procedures were effective.

Management’s Annual Report on Internal Control over

Financial Reporting

4 unchanged sentences

our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework

and criteria established in Internal Control –

Integrated Framework (2013) , issued by the Committee of Sponsoring

and criteria established in Internal Control – Integrated Framework (2013) , issued by the Committee of Sponsoring

Organizations of the Treadway Commission.

7 unchanged sentences

control over financial reporting (as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934) that occurred during the

fourth quarter of 2019 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control

over financial reporting.

fourth quarter of 2020 that has materially affected, or is reasonably likely to materially affect, the Company’s internal

control over financial reporting.

Other Information.

Directors, Executive Officers and Corporate Governance

Officers and Directors

of the date of this report, our executive officers and directors were as follows:

of the Board, Chief Executive Officer of Inter Parfums, Inc.

Executive Officers and Directors

As of the date of this report, our executive

officers and directors were as follows:

Chairman of the Board, Chief Executive Officer of Inter Parfums, Inc.

and Director General of Interparfums SA

Chairman of the Board, President of Inter Parfums, Inc.

Philippe Benacin

Vice Chairman of the Board, President of Inter Parfums, Inc.

and Chief Executive Officer of Interparfums SA

Executive Vice President and Chief Financial Officer

Executive Vice President and Chief Financial Officer, Interparfums SA

François

Garcia-Pelayo

Vice President and Chief Operating Officer of Interparfums SA

directors will serve until the next annual meeting of stockholders and thereafter until their successors shall have been elected

and qualified.

Jean Madar and Philippe Benacin have a verbal agreement or understanding to vote their shares and the shares

of their respective holding companies in a like manner.

the exception of Mr.

Benacin, the officers are elected annually by the directors and serve at the discretion of the board

of directors.

There are no family relationships between executive officers or directors of our Company.

board of directors has the responsibility for establishing broad corporate policies and for the overall performance of our Company.

Although certain directors are not involved in day-to-day operating details, members of the board of directors are kept informed

of our business by various reports and documents made available to them.

Our board of directors held 16 meetings (or executed

consents in lieu thereof), including meetings of committees of the full board of directors during 2019, and all of the directors

attended at least 75% of the meetings (or executed consents in lieu thereof) of the full board of directors and committees of

which they were a member.

Our board of directors presently consists of ten (10) directors.

have adopted a Code of Business Conduct that applies to our principal executive officer, principal financial officer, principal

accounting officer or controller, as well as other persons performing similar functions, and we agree to provide to any person

without charge, upon request, a copy of our Code of Business Conduct.

Any person who requests a copy of our Code of Business Conduct

should provide their name and address in writing to:

Inter Parfums, Inc., 551 Fifth Avenue, New York, NY 10176, Att.:

In addition, our Code of Conduct is also maintained on our website, at www.interparfumsinc.com.

2019, our board of directors had the following standing committees:

Committee –

The Audit Committee has the sole authority and is directly responsible

for, the appointment, compensation and oversight of the work of the independent accountants

employed by our company which prepare or issue audit reports for our company.

2019, this committee consisted of Messrs.

Russell Greenberg

Director, Executive Vice President and Chief Financial Officer

Philippe Santi

Director, Executive Vice President and Chief Financial Officer, Interparfums SA

François Heilbronn

Robert Bensoussan

Patrick Choël

Veronique Gabai-Pinsky

Gilbert Harrison

Frederic Garcia-Pelayo

Executive Vice President and Chief Operating Officer of Interparfums SA

Our directors will serve until the next

annual meeting of stockholders and thereafter until their successors shall have been elected and qualified.

and Philippe Benacin have a verbal agreement or understanding to vote their shares and the shares of their respective holding companies

in a like manner.

With the exception of Mr.

Benacin, the officers

are elected annually by the directors and serve at the discretion of the board of directors.

There are no family relationships

between executive officers or directors of our Company.

Board of Directors

Our board of directors has the responsibility

for establishing broad corporate policies and for the overall performance of our Company.

Although certain directors are not involved

in day-to-day operating details, members of the board of directors are kept informed of our business by various reports and documents

made available to them.

Our board of directors held 20 meetings (or executed consents in lieu thereof), including meetings of committees

of the full board of directors during 2020, and all of the directors attended at least 75% of the meetings (or executed consents

in lieu thereof) of the full board of directors and committees of which they were a member.

Our board of directors presently consists

of ten (10) directors.

We have adopted a Code of Business Conduct that applies to our

principal executive officer, principal financial officer, principal accounting officer or controller, as well as other persons

performing similar functions, and we agree to provide to any person without charge, upon request, a copy of our Code of Business

Any person who requests a copy of our Code of Business Conduct should provide their name and address in writing to:

Parfums, Inc., 551 Fifth Avenue, New York, NY 10176, Att.:

Shareholder Relations.

In addition, our Code of Conduct is also maintained

on our website, at www.interparfumsinc.com.

During 2020, our board of directors had

the following standing committees:

Audit Committee – The Audit Committee has the sole authority and is directly responsible for, the appointment, compensation and oversight of the work of the independent accountants employed by our company which prepare or issue audit reports for our company.

During 2020, this committee consisted of Messrs.

Heilbronn and Choël, and Ms.

Gabai-Pinsky.

The charter of the Audit Committee is posted on our company’s website.

Company does not have an “audit committee financial expert”

within the definition of the applicable Securities and

Exchange Commission rules.

Finding qualified nominees to serve as a director of a public company without substantial financial

resources has been challenging.

In addition, despite the applicable Securities and Exchange Commission rule which states that

being named as the audit committee financial expert does not impose any greater duty, obligation or liability, our company has

been met with resistance from both present and former directors to being named as such, primarily due to potential additional

personal liability.

However, as the result of the background, education and experience of the members of the Audit Committee,

our board of directors believes that such committee members are fully qualified to fulfill their obligations as members of the

Audit Committee.

Compensation and Stock Option Committee –

The Executive Compensation and Stock

Option Committee oversees the compensation of our company’s executives and administers

our company’s stock option plans.

The charter of the Audit Committee is posted on our company’s website.

The Company does not have an “audit

committee financial expert” within the definition of the applicable Securities and Exchange Commission rules.

Finding qualified

nominees to serve as a director of a public company without substantial financial resources has been challenging.

despite the applicable Securities and Exchange Commission rule which states that being named as the audit committee financial expert

does not impose any greater duty, obligation or liability, our company has been met with resistance from both present and former

directors to being named as such, primarily due to potential additional personal liability.

However, as the result of the background,

education and experience of the members of the Audit Committee, our board of directors believes that such committee members are

fully qualified to fulfill their obligations as members of the Audit Committee.

Executive Compensation and Stock Option Committee – The Executive Compensation and Stock Option Committee oversees the compensation of our company’s executives and administers our company’s stock option plans.

During 2020, this committee consisted of Messrs.

1 unchanged sentence

Gabai-Pinsky.

The charter of the Executive Compensation

and Stock Option Committee is posted on our company’s website.

Committee –

During 2019, this committee consisted of Messrs.

Heilbronn and Choël,

The charter of the Executive Compensation and Stock Option Committee is posted on our company’s website.

Nominating Committee – During 2020, this committee consisted of Messrs.

Heilbronn and Choël, and Ms.

Gabai-Pinsky.

The purpose of the Nominating Committee is to determine and recommend

qualified persons to the Board of Directors who will be put forth as management’s slate

of directors for vote of the Corporation’s stockholders, as well as to fill vacancies

in the Board of Directors.

The charter of the Nominating Committee is posted on our company’s

January 2018 our board of directors adopted a board diversity policy, which provides that the selection of candidates for appointment

to our board will be based on an overriding emphasis on merit, but the Nominating Committee will seek to fill board vacancies

by considering candidates that bring a diversity of background and industry or related expertise to our board.

The Nominating

Committee is to consider an appropriate level of diversity having regard for factors such as skills, business and other experience,

education, gender, age, ethnicity and geographic location.

A copy of the board diversity policy is posted on our company’s

following sets forth biographical information as to the business experience of each executive officer and director of our company

for at least the past five years.

Madar, age 59, a Director, has been the Chairman of the Board since our company’s inception, and is a co-founder of our

company with Mr.

The purpose of the Nominating Committee is to determine and recommend qualified persons to the Board of Directors who will be put forth as management’s slate of directors for vote of the Corporation’s stockholders, as well as to fill vacancies in the Board of Directors.

The charter of the Nominating Committee is posted on our company’s website.

In January 2018 our board of directors adopted

a board diversity policy, which provides that the selection of candidates for appointment to our board will be based on an overriding

emphasis on merit, but the Nominating Committee will seek to fill board vacancies by considering candidates that bring a diversity

of background and industry or related expertise to our board.

The Nominating Committee is to consider an appropriate level of diversity

having regard for factors such as skills, business and other experience, education, gender, age, ethnicity and geographic location.

A copy of the board diversity policy is posted on our company’s website.

Business Experience

The following sets forth biographical information

as to the business experience of each executive officer and director of our company for at least the past five years.

Jean Madar, age 60, a Director, has been

the Chairman of the Board since our company’s inception, and is a co-founder of our company with Mr.

Philippe Benacin.

From inception until December 1993 he was the President of our company;

in January 1994, he

became Director General of Interparfums SA, our company’s subsidiary;

and in January 1997, he became Chief Executive Officer

of our company.

Madar was previously the managing director of Interparfums SA, from September 1983 until June 1985.

subsidiary, he had the responsibility of overseeing the marketing operations of its foreign distribution, including market research

analysis and actual marketing campaigns.

Madar graduated from The French University for Economic and Commercial Sciences (ESSEC)

inception until December 1993 he was the President of our company;

in January 1994, he became Director General of Interparfums

SA, our company’s subsidiary;

and in January 1997, he became Chief Executive Officer of our company.

Madar was previously

the managing director of Interparfums SA, from September 1983 until June 1985.

At such subsidiary, he had the responsibility of

overseeing the marketing operations of its foreign distribution, including market research analysis and actual marketing campaigns.

Madar graduated from The French University for Economic and Commercial Sciences (ESSEC) in 1983.

We believe that Mr.

Madar’s skills in guiding, leading and determining the strategic direction of our company since

its inception together with Mr.

Benacin, in addition to his contacts in the fragrance and cosmetic industry, render him qualified

to serve as a member of our board of directors.

Benacin, age 61, a Director, is President of our Company and the Chief Executive Officer of Interparfums SA, has been the Vice

Chairman of the Board since September 1991, and is a co-founder of our company with Mr.

He was elected the Executive Vice

President in September 1991, Senior Vice President in April 1993, and President of the Company in January 1994.

In addition, he

has been the Chief Executive Officer of Interparfums SA for more than the past five years.

Benacin graduated from The French

University for Economic and Commercial Sciences (ESSEC) in 1983.

skills in guiding, leading and determining the strategic direction of our company since its inception together with Mr.

in addition to his contacts in the fragrance and cosmetic industry, render him qualified to serve as a member of our board of directors.

Philippe Benacin

Benacin, age 62, a Director, is President

of our Company and the Chief Executive Officer of Interparfums SA, has been the Vice Chairman of the Board since September 1991,

and is a co-founder of our company with Mr.

He was elected the Executive Vice President in September 1991, Senior Vice President

in April 1993, and President of the Company in January 1994.

In addition, he has been the Chief Executive Officer of Interparfums

SA for more than the past five years.

Benacin graduated from The French University for Economic and Commercial Sciences (ESSEC)

In June 2014 Mr.

Benacin was elected as a member of the Supervisory

Board of Vivendi, and Chairman of its Corporate Governance, Nominations and Remuneration Committee.

Benacin was elected as a member of the Supervisory Board of Vivendi, and Chairman of its Corporate Governance,

Nominations and Remuneration Committee.

We believe that Mr.

Benacin’s

skills in guiding, leading and determining the strategic direction of our company since its inception together with Mr.

in addition to his contacts in the fragrance and cosmetic industry, render him qualified to serve as a member of our board of

Greenberg, age 63, the Chief Financial Officer, was Vice-President, Finance when he joined the Company in June 1992;

became Executive

Vice President in April 1993;

and was appointed to our board of directors in February 1995.

He is a certified public accountant

licensed in the State of New York, and is a member of the American Institute of Certified Public Accountants and the New York

State Society of Certified Public Accountants.

After graduating from The Ohio State University in 1980, he was employed in public

accounting until he joined our company in June 1992.

Benacin’s skills in guiding, leading and determining the strategic

direction of our company since its inception together with Mr.

Madar, in addition to his contacts in the fragrance and cosmetic

industry, render him qualified to serve as a member of our board of directors.

Russell Greenberg

Greenberg, age 64, the Chief Financial

Officer, was Vice-President, Finance when he joined the Company in June 1992;

became Executive Vice President in April 1993;

was appointed to our board of directors in February 1995.

He is a certified public accountant licensed in the State of New York,

and is a member of the American Institute of Certified Public Accountants and the New York State Society of Certified Public Accountants.

After graduating from The Ohio State University in 1980, he was employed in public accounting until he joined our company in June

We believe that Mr.

Greenberg’s skills in accounting and tax, as well

as his knowledge of the fragrance industry and our Company’s operations, render him qualified to serve as a member of our

board of directors.

Santi, age 58 and a Director since December 1999, is the Executive Vice President and Chief Financial Officer of Interparfums

Santi, who is a Certified Accountant and Statutory Auditor in France, has been the Chief Financial Officer of Interparfums

SA since February 1995.

Prior to February 1995, Mr.

Santi was the Chief Financial Officer for Stryker France and an Audit Manager

for Ernst and Young.

Greenberg’s skills in accounting and tax, as well as his knowledge of the fragrance industry and

our Company’s operations, render him qualified to serve as a member of our board of directors.

Philippe Santi

Philippe Santi, age 59 and a Director since

December 1999, is the Executive Vice President and Chief Financial Officer of Interparfums SA.

Santi, who is a Certified Accountant

and Statutory Auditor in France, has been the Chief Financial Officer of Interparfums SA since February 1995.

Prior to February

Santi was the Chief Financial Officer for Stryker France and an Audit Manager for Ernst and Young.

We believe that Mr.

Santi’s skills in accounting and tax, as well as his knowledge of the fragrance

industry and our Company’s European operations, render him qualified to serve as a member of our board of directors.

Heilbronn, age 59 a Director since 1988, an independent director and a member of the Audit Committee, Nominating Committee and

the Executive Compensation and Stock Option Committee, is a graduate of Harvard Business School with a Master of Business Administration

degree and is currently the managing partner of the consulting firm of M.M.

Santi’s skills in accounting and tax, as well as his knowledge of the fragrance industry and our Company’s European

operations, render him qualified to serve as a member of our board of directors.

Francois Heilbronn

Heilbronn, age 60 a Director since 1988,

an independent director and a member of the Audit Committee, Nominating Committee and the Executive Compensation and Stock Option

Committee, is a graduate of Harvard Business School with a Master of Business Administration degree and is currently the managing

partner of the consulting firm of M.M.

Friedrich, Heilbronn & Fiszer.

He was formerly

employed by The Boston Consulting Group, Inc.

He was formerly employed by The Boston Consulting Group,

from 1988 through 1992 as a manager.

Heilbronn graduated from Institut d’

Politiques de Paris in June 1983.

Heilbronn graduated from Institut d’ Etudes Politiques de Paris in June 1983.

From 1984 to 1986, he worked as a financial analyst for Lazard Freres & Co.

during 2009, Mr.

Heilbronn became an Associate Professor in Business Strategy at Sciences Po, Paris, France.

As the result of

his business and financial acumen, as well as his experience as managing partner of a business consulting firm in the area of

mergers and acquisitions of large international companies in retail, consumer goods and consumer services throughout the world,

we believe Mr.

Heilbronn is qualified to serve as a member of our board of directors.

Bensoussan, age 62, has been a Director since March 1997, and is also an independent director.

Bensoussan is the founder of Sirius Equity Consultants,, a retail and branded luxury goods Investment Company.

remains as an investor in feelunique.com, Europe’s largest online beauty retailer.

C.A.R.O.L the AI driven fitness equipment,

Hapy Sweet Bee Ltd, natural health food products, Zen Car the Belgium based electric car rental Company and Eaglemoss Ltd, UK

part-works publisher.

was previously a board member of Celio International, the French retail conglomerate and Vivarte representing the GLG hedge fund.

In addition, during 2009, Mr.

Heilbronn became

an Associate Professor in Business Strategy at Sciences Po, Paris, France.

As the result of his business and financial acumen,

as well as his experience as managing partner of a business consulting firm in the area of mergers and acquisitions of large international

companies in retail, consumer goods and consumer services throughout the world, we believe Mr.

Heilbronn is qualified to serve

as a member of our board of directors.

Robert Bensoussan

Robert Bensoussan, age 63, has been a Director

since March 1997, and is also an independent director.

Bensoussan is the founder of Sirius Equity Consultants, a retail and

branded luxury goods Investment Company.

Bensoussan remains as an investor in feelunique.com, Europe’s largest

online beauty retailer.

C.A.R.O.L, the AI driven fitness equipment, Hapy Sweet Bee Ltd, natural health food products, Eaglemoss

Ltd, UK part-works publisher and Patchwork, a Parisian co-working company.

He was previously Chairman of Camaïeu,

the French retail conglomerate, a board member of Celio International, the French retail conglomerate and Vivarte representing

the GLG hedge fund.

In the latter part of 2019, Mr.

Bensoussan resigned after 6 years as the only non-North American board member of lululemon athletica

continues to remain as Chairman of feelunique.com since his appointment in December 2012.

He is also a member of the Advisory

Board of Pictet Bank Premium Brands Fund and is Chairman of Camaïeu, the French retail conglomerate.

Bensoussan was as director of, and had an indirect ownership interest J.

Choo Limited until July 2011, and CEO (from 2001

to 2007) and was a member of the Board of Jimmy Choo Ltd (from 2001 to 2011), a privately held luxury shoe wholesaler and retailer.

Bensoussan is qualified to serve as a member of our board of directors due to his business and financial acumen, as

well as his experience in the retail and branded luxury goods market.

Choël, age 76, was appointed to the board of directors in June 2006 as an independent director, and is a member of the Audit

Committee, Nominating Committee and the Executive Compensation and Stock Option Committee.

Choël is a director of our

majority-owned subsidiary, Interparfums SA, a publicly held company, and Christian Dior and Guerlain, both privately held companies.

Bensoussan resigned after 6 years as the only non-North American board member

of lululemon athletica Inc.

He continues to remain a Director of feelunique.com

since his appointment in December 2012.

He is also a member of the Advisory Board of Pictet Bank Premium Brands Fund and sits on

the board of Pronovias, the worldwide leader of wedding dresses owned by BC Partners.

Previously Mr.

Bensoussan was as director

of, and had an indirect ownership interest J.

Choo Limited until July 2011, and CEO from 2001 to 2007, and was a member of the

Board of Jimmy Choo Ltd, a privately held luxury shoe wholesaler and retailer, from 2001 to 2011.

We believe Mr.

Bensoussan is qualified to

serve as a member of our board of directors due to his business and financial acumen, as well as his experience in the retail and

branded luxury goods market.

Patrick Choël

Choël, age 77, was appointed to

the board of directors in June 2006 as an independent director, and is a member of the Audit Committee, Nominating Committee and

the Executive Compensation and Stock Option Committee.

Choël is a director of our majority-owned subsidiary, Interparfums

SA, a publicly held company, and Christian Dior and Guerlain, both privately held companies.

He is also the manager of Université

82, a business consultant and advisor.

For approximately 10 years, through March 2004,

Choël was the President and CEO of two divisions of LVMH Moet Hennessy Louis Vuitton S.A., first Parfums Christian Dior,

a leading world-wide prestige beauty/fragrances business, and later, the LVMH Perfumes and Cosmetics Division, which included

such well-known brands as Parfums Christian Dior, Guerlain, and Parfums Givenchy, among others.

Prior to such time, for approximately

30 years, he held various executive positions at Unilever, including President and CEO of Elida Fabergé

France and President

and CEO of Chesebrough Pond’s USA.

Because of this experience, especially in the prestige beauty business, we believe that

Choël is qualified to serve as a member of our board of directors.

Dyens, age 80 and an independent director, is the Founder, Chairman and Chief Executive Officer of Michel Dyens & Co., which

he founded over 25 years ago.

With headquarters in New York and Paris, Michel Dyens & Co.

is a leading independent investment

banking firm focused on mergers and acquisitions.

For approximately 10 years, through March 2004, Mr.

Choël was the President and CEO

of two divisions of LVMH Moet Hennessy Louis Vuitton S.A., first Parfums Christian Dior, a leading world-wide prestige beauty/fragrances

business, and later, the LVMH Perfumes and Cosmetics Division, which included such well-known brands as Parfums Christian Dior,

Guerlain, and Parfums Givenchy, among others.

Prior to such time, for approximately 30 years, he held various executive positions

at Unilever, including President and CEO of Elida Fabergé

France and President and CEO of Chesebrough Pond’s USA.

Because of this experience, especially in the prestige beauty business, we believe that Mr.

Choël is qualified to serve as

a member of our board of directors.

Michel Dyens, age 81 and an independent

director, is the Founder, Chairman and Chief Executive Officer of Michel Dyens & Co., which he founded over 25 years ago.

headquarters in New York and Paris, Michel Dyens & Co.

is a leading independent investment banking firm focused on mergers

and acquisitions.

Michel Dyens & Co.

has vast experience in luxury goods, beauty, spirits

and other premium branded consumer goods in which it has concluded numerous landmark deals.

has vast experience in luxury goods, beauty, spirits and other premium branded consumer

goods in which it has concluded numerous landmark deals.

Michel Dyens & Co.

in such deals as the sale of the Grey Goose ultra-premium vodka brand to Bacardi, the acquisition of the luxury Swiss watchmaker

Hublot by LVMH, the sale of the Harry Winston to Aber Diamond Corporation and Boucheron to Kering.

has advised in such deals as the sale of the Grey

Goose ultra-premium vodka brand to Bacardi, the acquisition of the luxury Swiss watchmaker Hublot by LVMH, the sale of the Harry

Winston to Aber Diamond Corporation and Boucheron to Kering.

Michel Dyens & Co.

the owners of Liaigre, the luxury furniture brand, in the sale to Symphony International and Navis Capital, and Casa Dragones,

the ultra-premium tequila, in the sale to BDT Partners (Byron Trott).

represented Mr.

represented the owners of Liaigre, the luxury

furniture brand, in the sale to Symphony International and Navis Capital, and Casa Dragones, the ultra-premium tequila, in the

sale to BDT Partners (Byron Trott).

Michel Dyens & Co.

was the exclusive

advisor to Creed in the sale of the ultra-luxury fragrance company Creed BlackRock Long Term Private Capital, and represented Mr.

ChinWook Lee, the founder and CEO of Dr.

Jart+, in the sale of Have & Be Co.

to The Estée

Lauder Companies.

Michel Dyens & Co.

also advised the owner of the ultra-luxury fragrance brand By Kilian, in the sale to

Estée Lauder.

Michel Dyens & Co.

advised the shareholders of the largest independent hair color and hair care company

in Brazil, Niely Cosmeticos in the sale of the company to L’Oréal, as well as the owner of the super-premium liqueur

St-Germain in the sale of the brand to Bacardi, the Colomer Group (American Crew and CND/Shellac brands) in its sale to Revlon,

and Sidney Frank Importing Company in the sale of the company to Jaegermeister.

Other transactions include the sale of the Essie

cosmetics business to L’Oréal, the sale of TIGI (BedHead and Catwalk brands) to Unilever, the luxury hair care brand

Christophe Robin to The Hut Group, the thinning hair brand NIOXIN Research Laboratories to Procter & Gamble, John Frieda Professional

Hair Care and Molton Brown to the Kao Corporation, the Svedka vodka brand to Constellation Brands and Chambord liqueur to Brown-Forman.

April 2004 to September 2014, Mr.

Dyens was an independent director of Interparfums SA.

to The Estée Lauder Companies.

also advised the owner of the ultra-luxury fragrance brand By Kilian, in the sale to Estée Lauder.

advised the shareholders of the largest independent hair color and hair care company in Brazil, Niely Cosmeticos

in the sale of the company to L’Oréal, as well as the owner of the super-premium liqueur St-Germain in the sale of

the brand to Bacardi, the Colomer Group (American Crew and CND/Shellac brands) in its sale to Revlon, and Sidney Frank Importing

Company in the sale of the company to Jaegermeister.

Other transactions include the sale of the Essie cosmetics business to L’Oréal,

the sale of TIGI (BedHead and Catwalk brands) to Unilever, the luxury hair care brand Christophe Robin to The Hut Group, the thinning

hair brand NIOXIN Research Laboratories to Procter & Gamble, John Frieda Professional Hair Care and Molton Brown to the Kao

Corporation, the Svedka vodka brand to Constellation Brands and Chambord liqueur to Brown-Forman.

From April 2004 to September 2014, Mr.

was an independent director of Interparfums SA.

We believe Mr.

Dyens is qualified to serve

as a member of our board of directors thanks to his knowledge of our company’s luxury business, his business and financial

acumen, as well as his experience in the luxury goods market.

Gabai-Pinsky, age 54, was elected for the first time to our board in September 2017.

She became a director of Interparfums SA

in April 2017.

She is currently operating a startup specialty fragrance business.

She was President of Vera Wang Group from January

2016 through June 2018, after a year of consulting with the company and she oversaw all product categories and markets.

to joining Vera Wang, from 2006 to December 2014 Ms.

Gabai-Pinsky was the Global President for Aramis and Designers Fragrances

as well as Beauty Bank and Idea Bank at the Estée Lauder Companies, reporting to the Chief Executive Officer of such company.

Dyens is qualified to serve as a member of our board of directors

thanks to his knowledge of our company’s luxury business, his business and financial acumen, as well as his experience in

the luxury goods market.

Veronique Gabai-Pinsky

Gabai-Pinsky, age 55, was elected for

the first time to our board in September 2017.

She became a director of Interparfums SA in April 2017.

She is currently operating

a startup specialty fragrance business.

She was President of Vera Wang Group from January 2016 through June 2018, after a year

of consulting with the company and she oversaw all product categories and markets.

Prior to joining Vera Wang, from 2006 to December

Gabai-Pinsky was the Global President for Aramis and Designers Fragrances as well as Beauty Bank and Idea Bank at the

Estée Lauder Companies, reporting to the Chief Executive Officer of such company.

During her tenure, Ms.

Gabai-Pinsky developed and ensured the growth of several beauty and skin care brands, including Lab Series

She was highly instrumental in the evolution of the fragrance category for such company, as she improved its overall

business model, globally grew brands such as Donna Karan and Michael Kors, evolved and harmonized the portfolio, divested dilutive

brands and brought in Tory Burch, Zegna and Marni under licenses.

She ultimately actively participated in the acquisitions of

Le Labo, Frederic Malle, and By Kilian and assisted in the transformation of the long-term strategic direction of such company.

the earlier years of her career, Ms.

Gabai-Pinsky served as Vice President of Marketing and Communication for Guerlain, a division

of LVMH Moet Hennessy Louis Vuitton S.A., where she led the successful re-launch of Shalimar, the introduction of Aqua Allegoria,

and contributed to the re-focus of the beauty category around its pillars, Terracotta, Meteorites and Issima, while redesigning

all communication strategies and content.

She started her career at L’Oréal, and was also Vice President of Marketing

for Giorgio Armani, where she was instrumental in the overall development of its fragrance business by developing the successful

Acqua di Gio for men and introducing the Emporio Armani franchise.

A graduate from ESSEC Business School in Paris, France, she

has received several awards, including Marketer of the Year by Women’s Wear Daily in December 2013.

Gabai-Pinksy is an independent director, and is a member of the Audit Committee, Executive Compensation and Stock Option Committee

and the Nominating Committee of our company.

Gabai-Pinsky developed

and ensured the growth of several beauty and skin care brands, including Lab Series for Men.

She was highly instrumental in the

evolution of the fragrance category for such company, as she improved its overall business model, globally grew brands such as

Donna Karan and Michael Kors, evolved and harmonized the portfolio, divested dilutive brands and brought in Tory Burch, Zegna and

Marni under licenses.

She ultimately actively participated in the acquisitions of Le Labo, Frederic Malle, and By Kilian and assisted

in the transformation of the long-term strategic direction of such company.

In the earlier years of her career, Ms.

Gabai-Pinsky served as Vice President of Marketing and Communication for Guerlain, a division of LVMH Moet Hennessy Louis Vuitton

S.A., where she led the successful re-launch of Shalimar, the introduction of Aqua Allegoria, and contributed to the re-focus of

the beauty category around its pillars, Terracotta, Meteorites and Issima, while redesigning all communication strategies and content.

She started her career at L’Oréal, and was also Vice President of Marketing for Giorgio Armani, where she was instrumental

in the overall development of its fragrance business by developing the successful Acqua di Gio for men and introducing the Emporio

Armani franchise.

A graduate from ESSEC Business School in Paris, France, she has received several awards, including Marketer of

the Year by Women’s Wear Daily in December 2013.

Gabai-Pinksy is an independent director,

and is a member of the Audit Committee, Executive Compensation and Stock Option Committee and the Nominating Committee of our company.

We believe Ms.

Gabi-Pinsky is qualified to serve as a member of our board of directors

due to her more than 25 years of experience in the luxury, fashion, beauty and fragrance fields, success as a brand builder, creative

thinker, business acumen, and a broad understanding of consumers, brands and business models.

Harrison, age 79, an independent director, was appointed to our board in April 2018.

Harrison has more than 50 years of experience

in corporate finance and strategic transactions, specializing in the consumer products space.

He began his career in 1965 practicing

corporate and securities law in New York and Philadelphia.

In 1971 he founded Financo, which he grew to become one of the leading

independent middle market transaction firms in the country.

In 1985, Financo was acquired by Lehman Brothers, where the firm’s

primary efforts were focused on increasing its expertise in retail, apparel and other merchandising transactions of all types.

Gabi-Pinsky is qualified to serve as a member of our board of directors due to her more than 25 years of experience

in the luxury, fashion, beauty and fragrance fields, success as a brand builder, creative thinker, business acumen, and a broad

understanding of consumers, brands and business models.

Gilbert Harrison

Harrison, age 80, an independent director,

was appointed to our board in April 2018.

Harrison has more than 50 years of experience in corporate finance and strategic

transactions, specializing in the consumer products space.

He began his career in 1965 practicing corporate and securities law

in New York and Philadelphia.

In 1971 he founded Financo, which he grew to become one of the leading independent middle market

transaction firms in the country.

In 1985, Financo was acquired by Lehman Brothers, where the firm’s primary efforts were

focused on increasing its expertise in retail, apparel and other merchandising transactions of all types.

At Lehman, Mr.

Harrison was Chairman of the Merchandising Group and on the firm’s Investment Banking Operating Committee

while continuing as Chairman of Financo, which was renamed the Middle Market Group of Lehman.

In 1989, he re-acquired Financo

from Lehman, re-establishing Financo as one of the leading investment banking firms handling transactions and providing strategic

advice in connection with merchandising companies.

Harrison retired as Chairman of Financo in December of 2017, after which

he formed the Harrison Group, a firm that provides consulting and financial advisory services to merchandising and products companies.

Harrison’s other activities include his membership on the Advisory Council of the World Retail Congress, Shoptalk and the Financial

Times Business of Luxury Summit.

Additionally, he has created a course on mergers and acquisitions at The Wharton School and has

published various articles and academic studies on the state of retailing and mergers and acquisitions, including a chapter in

the book entitled, “The Mergers and Acquisitions Handbook.”

Harrison lectures throughout the country, including

chairing seminars for Retail Week as well as for the International Council of Shopping Centers, the National Retail Federation,

Young President’s Center, The Wharton Aresty Institute of Executive Education and The President’s Association of the American

Management Association.

He also appears frequently on Bloomberg TV and CNBC as an expert on retail and apparel.

Harrison received a Bachelor of Science in Economics from The Wharton School of The University of Pennsylvania in 1962 and his

Juris Doctor from The University of Pennsylvania Law School in 1965.

He is also Chairman of the Fashion Division of UJA, Treasurer

and a Board member of the Southampton Hospital, Director of the Peggy Guggenheim Collection, and former Board member of the Wharton

School of the University of Pennsylvania.

We believe Mr.

Harrison is qualified to serve as a member of our board of directors

due to his tremendous depth and breadth of knowledge about the merchandising and consumer industry, and he has a long track record

of facilitating value creating transactions for companies in this sector.

Garcia-Pelayo

Garcia-Pelayo, age 59, has been with Interparfums SA for more than the past 20 years.

He is currently the Executive Vice President

and Chief Operating Officer of Interparfums SA, and was previously the Director of its Luxury and Fashion division beginning in

He was also previously the Director of Marketing and Distribution for Perfume and Cosmetics and was first named Executive

Vice President in 2004.

16(a) Beneficial Ownership Reporting Compliance

solely upon a review of Forms 3, 4 and 5 and any amendments to such forms furnished to us, and written representations from various

reporting persons furnished to us, we are not aware of any reporting person who has failed to file the reports required to be

filed under Section 16(a) of the Securities Exchange Act of 1934 on a timely basis.

was Chairman of the Merchandising Group and on the firm’s Investment Banking Operating Committee while continuing as Chairman

of Financo, which was renamed the Middle Market Group of Lehman.

In 1989, he re-acquired Financo from Lehman, re-establishing Financo

as one of the leading investment banking firms handling transactions and providing strategic advice in connection with merchandising

Harrison retired as Chairman of Financo in December of 2017, after which he formed the Harrison Group, a firm that

provides consulting and financial advisory services to merchandising and products companies.

Harrison’s other activities include

his membership on the Advisory Council of the World Retail Congress, Shoptalk and the Financial Times Business of Luxury Summit.

Additionally, he has created a course on mergers and acquisitions at The Wharton School and has published various articles and

academic studies on the state of retailing and mergers and acquisitions, including a chapter in the book entitled, “The Mergers

and Acquisitions Handbook.” Mr.

Harrison lectures throughout the country, including chairing seminars for Retail Week as

well as for the International Council of Shopping Centers, the National Retail Federation, Young President’s Center, The

Wharton Aresty Institute of Executive Education and The President’s Association of the American Management Association.

also appears frequently on Bloomberg TV and CNBC as an expert on retail and apparel.

Harrison received a Bachelor of Science

in Economics from The Wharton School of The University of Pennsylvania in 1962 and his Juris Doctor from The University of Pennsylvania

Law School in 1965.

He is also Chairman of the Fashion Division of UJA, Treasurer and a Board member of the Southampton Hospital,

Director of the Peggy Guggenheim Collection, and former Board member of the Wharton School of the University of Pennsylvania.

Harrison is qualified to serve as a member of our board of directors due to his tremendous depth and breadth of knowledge

about the merchandising and consumer industry, and he has a long track record of facilitating value creating transactions for companies

in this sector.

Frederic Garcia-Pelayo

Frederic Garcia-Pelayo, age 60, has been

with Interparfums SA for more than the past 20 years.

He is currently the Executive Vice President and Chief Operating Officer

of Interparfums SA, and was previously the Director of its Luxury and Fashion division beginning in March 2005.

He was also previously

the Director of Marketing and Distribution for Perfume and Cosmetics and was first named Executive Vice President in 2004.

Section 16(a) Beneficial Ownership Reporting Compliance

Based solely upon a review of Forms 3, 4

and 5 and any amendments to such forms furnished to us, and written representations from various reporting persons furnished to

us, we are not aware of any reporting person who has failed to file the reports required to be filed under Section 16(a) of the

Securities Exchange Act of 1934 on a timely basis.

Executive Compensation

Discussion and Analysis

executive compensation and stock option committee of our board of directors is comprised entirely of independent directors and

oversees all elements of compensation (base salary, annual bonus, long-term incentives and perquisites) of our company’s

executive officers and administers our company’s stock option plans, other than the non-employee directors stock option

plan, which is self-executing.

objectives of our compensation program are designed to strike a balance between offering sufficient compensation to either retain

existing or attract new executives on the one hand, and maintaining compensation at reasonable levels on the other hand.

not have the resources comparable to the cosmetic giants in our industry, and, accordingly, cannot afford to pay excessive executive

compensation.

In furtherance of these objectives, our executive compensation packages generally include a base salary, as well

as annual incentives tied to individual performance and long-term incentives tied to our operating performance.

Madar, the Chairman and Chief Executive Officer, takes the initiative after discussions with Mr.

Russell Greenberg, Executive

Vice President, Chief Financial Officer and a Director, and recommends executive compensation levels for executives for United

States operations.

Benacin, the Chief Executive Officer of Interparfums SA, takes the initiative after discussions with Philippe

Santi, the Chief Financial Officer of Interparfums SA, and recommends executive compensation levels for executives for European

The recommendations are presented to the compensation committee for its consideration, and the compensation committee

makes a final determination regarding salary adjustments and annual award amounts to executives, including Jean Madar and Philippe

Madar and Benacin are not present during deliberations or determination of their executive compensation by the

compensation committee.

Compensation Discussion and Analysis

The executive compensation and stock option

committee of our board of directors is comprised entirely of independent directors and oversees all elements of compensation (base

salary, annual bonus, long-term incentives and perquisites) of our company’s executive officers and administers our company’s

stock option plans, other than the non-employee directors stock option plan, which is self-executing.

The objectives of our compensation program

are designed to strike a balance between offering sufficient compensation to either retain existing or attract new executives on

the one hand, and maintaining compensation at reasonable levels on the other hand.

We do not have the resources comparable to the

cosmetic giants in our industry, and, accordingly, cannot afford to pay excessive executive compensation.

In furtherance of these

objectives, our executive compensation packages generally include a base salary, as well as annual incentives tied to individual

performance and long-term incentives tied to our operating performance.

Madar, the Chairman and Chief Executive

Officer, takes the initiative after discussions with Mr.

Russell Greenberg, Executive Vice President, Chief Financial Officer and

a Director, and recommends executive compensation levels for executives for United States operations.

Benacin, the Chief Executive

Officer of Interparfums SA, takes the initiative after discussions with Philippe Santi, the Chief Financial Officer of Interparfums

SA, and recommends executive compensation levels for executives for European operations.

The recommendations are presented to the

compensation committee for its consideration, and the compensation committee makes a final determination regarding salary adjustments

and annual award amounts to executives, including Jean Madar and Philippe Benacin.

Madar and Benacin are not present during

deliberations or determination of their executive compensation by the compensation committee.

Further, Messrs.

Madar and Benacin, in addition to being executive officers and directors, are our largest

beneficial shareholders, and therefore, their interests are aligned with our shareholder base in keeping executive compensation

at a reasonable level.

compensation committee was pleased that the most recent shareholder advisory vote on executive compensation held at our last annual

meeting of shareholders in September 2019 overwhelmingly approved the compensation policies and decisions of the compensation

The compensation committee has determined to continue its present compensation policies in order to determine similar

future decisions.

compensation committee believes that individual executive compensation is at a level comparable with executives in other companies

of similar size and stage of development that operate in the fragrance industry, and takes into account our company’s performance

as well as our own strategic goals.

Further, the compensation committee believes that its present policies to date, with its emphasis

on rewarding performance, has served to focus the efforts of our executives, which in turn has permitted our company to weather

economic and political turmoil in certain parts of the world and keep our company on track for continued profitability, which

management believes will result in enhanced shareholder value.

2019, the members of such committee consisted of Messrs.

Madar and Benacin,

in addition to being executive officers and directors, are our largest beneficial shareholders, and therefore, their interests

are aligned with our shareholder base in keeping executive compensation at a reasonable level.

The compensation committee was pleased that

the most recent shareholder advisory vote on executive compensation held at our last annual meeting of shareholders in October

2020 overwhelmingly approved the compensation policies and decisions of the compensation committee.

The compensation committee

has determined to continue its present compensation policies in order to determine similar future decisions.

Our compensation committee believes that

individual executive compensation is at a level comparable with executives in other companies of similar size and stage of development

that operate in the fragrance industry, and takes into account our company’s performance as well as our own strategic goals.

Further, the compensation committee believes that its present policies to date, with its emphasis on rewarding performance, has

served to focus the efforts of our executives, which in turn has permitted our company to weather economic and political turmoil

in certain parts of the world and keep our company on track for continued profitability, which management believes will result

in enhanced shareholder value.

During 2020, the members of such committee

consisted of Messrs.

Heilbronn and Choël, and Ms.

Gabai-Pinsky.

of Compensation

compensation of our executive officers is generally comprised of base salaries, including a fee paid to the holding companies

of each of Messrs.

Madar and Benacin, annual cash bonuses and long-term equity incentive awards.

In determining specific components

of compensation, the compensation committee considers individual performance, level of responsibility, skills and experience,

other compensation awards or arrangements and overall company performance.

The compensation committee reviews and approves all

elements of compensation for all of our executive officers taking into consideration recommendations from the Chief Executive

Officer of our company and the Chief Executive Officer of Interparfums SA, as well as information regarding compensation levels

at competitors in our industry.

named executive officers have all been with the company for more than the past ten (10) years, with Messrs.

Madar and Benacin

being founders of the company in 1985.

Madar and Greenberg for United States operations, and Benacin and Santi for

European operations, are most familiar with the individual performance, level of responsibility, skills and experience of each

executive officer in their respective operating segments, the compensation committee relies upon the information provided by such

executive officers in determining individual performance, level of responsibility, skills and experience of each executive officer.

compensation committee views the competitive market place very broadly, which would include executive officers from both public

and privately held companies in general, including fashion and beauty companies, but not limited to the peer companies contained

in the corporate performance graph contained in our annual report.

Generally, rather than tie the compensation committee’s

determination of compensation proposals to any specific peer companies, the members of our committee have used their business

experience, judgment and knowledge to review the executive compensation proposals recommended to them by Mr.

Madar for United

States operations and Mr.

Elements of Compensation

The compensation of our executive officers

is generally comprised of base salaries, including a fee paid to the holding companies of each of Messrs.

Madar and Benacin, annual

cash bonuses and long-term equity incentive awards.

In determining specific components of compensation, the compensation committee

considers individual performance, level of responsibility, skills and experience, other compensation awards or arrangements and

overall company performance.

The compensation committee reviews and approves all elements of compensation for all of our executive

officers taking into consideration recommendations from the Chief Executive Officer of our company and the Chief Executive Officer

of Interparfums SA, as well as information regarding compensation levels at competitors in our industry.

Our named executive officers have all been

with the company for more than the past ten (10) years, with Messrs.

Madar and Benacin being founders of the company in 1985.

Madar and Greenberg for United States operations, and Benacin and Santi for European operations, are most familiar with

the individual performance, level of responsibility, skills and experience of each executive officer in their respective operating

segments, the compensation committee relies upon the information provided by such executive officers in determining individual

performance, level of responsibility, skills and experience of each executive officer.

The compensation committee views the competitive

marketplace very broadly, which would include executive officers from both public and privately held companies in general, including

fashion and beauty companies, but not limited to the peer companies contained in the corporate performance graph contained in our

annual report.

Generally, rather than tie the compensation committee’s determination of compensation proposals to any specific

peer companies, the members of our committee have used their business experience, judgment and knowledge to review the executive

compensation proposals recommended to them by Mr.

Madar for United States operations and Mr.

Benacin for European operations.

As such, as a general rule the compensation committee did not determine

the need to “benchmark”

of any material item of compensation or overall compensation.

However, in connection with

the salary increase to Mr.

Madar that occurred in February 2020 surveys of both peer companies and companies with comparable market

capitalizations were used by the compensation committee as one of the factors in reaching such determination.

members of the compensation committee have extensive experience and business acumen and are well qualified in determining the

appropriateness of executive compensation levels.

Heilbronn is a managing partner of a business consulting firm in the area

of mergers and acquisitions of large international companies in retail, consumer goods and consumer services throughout the world.

Choël is presently a business consultant and advisor, who previously worked as President and Chief Executive Officer

of two divisions of LVMH Moet Hennessy Louis Vuitton S.A., which included such well-known brands as Parfums Christian Dior, Guerlain,

and Parfums Givenchy.

Choël has also been President and CEO of both Elida Fabergé

France and Chesebrough Pond’s

Gabai-Pinsky, the final committee member, has executive experience as the former President of Vera Wang Group, as well

as the Global President for Aramis and Designers Fragrances in addition to Beauty Bank and Idea Bank at the Estée Lauder

salaries for executive officers are initially determined by evaluating the responsibilities of the position held and the experience

of the individual, and by reference to the competitive market place for executive talent.

Base salaries for executive officers

are reviewed on an annual basis, and adjustments are determined by evaluating our operating performance, the performance of each

executive officer, as well as whether the nature of the responsibilities of the executive has changed.

stated above, as Messrs.

Madar and Greenberg for United States operations, and Benacin and Santi for European operations, are

most familiar with the individual performance, level of responsibility, skills and experience of each executive officer in their

respective segments, the committee relies upon the information provided by such executive officers in determining individual performance,

level of responsibility, skills and experience of each executive officer.

executive officers of United States operations, the bulk of their annual compensation is in base salary including a fee paid to

the holding company for Mr.

Madar for services rendered outside the United States.

However, for executive officers of European

operations base salary comprises a smaller percentage of overall compensation.

We have paid a lower percentage of overall compensation

in the form of base salary to executive officers of European operations for several years, principally because European operations

historically have had higher profitability than United States operations, and European operations are run differently from United

States operations by the Chief Executive Officer of European operations, Mr.

As the result of this historically higher

profitability, European operations have had the ability to pay higher bonus compensation in addition to base salary.

compensation is and has historically been discretionary, no targets were set in order to maintain flexibility.

Further, if results

of operations for European operations were not satisfactory (again, no target amounts were set to maintain flexibility), then

bonus compensation, as well as overall compensation could be lowered without otherwise affecting base salary.

Finally, by keeping

annual bonus compensation at a higher percentage of overall compensation and base salary at a lower percentage, our company benefits

because the base amount for annual salary adjustments would be smaller.

For 2019, Mr.

Benacin received a modest increase in base salary

of $13,000 to $511,000.

such, as a general rule the compensation committee did not determine the need to “benchmark” of any material item of

compensation or overall compensation.

However, in connection with the salary increase to Mr.

Madar that occurred in February 2020

surveys of both peer companies and companies with comparable market capitalizations were used by the compensation committee as

one of the factors in reaching such determination.

The members of the compensation committee

have extensive experience and business acumen and are well qualified in determining the appropriateness of executive compensation

Heilbronn is a managing partner of a business consulting firm in the area of mergers and acquisitions of large international

companies in retail, consumer goods and consumer services throughout the world.

Choël is presently a business consultant

and advisor, who previously worked as President and Chief Executive Officer of two divisions of LVMH Moet Hennessy Louis Vuitton

S.A., which included such well-known brands as Parfums Christian Dior, Guerlain, and Parfums Givenchy.

Choël has also

been President and CEO of both Elida Fabergé

France and Chesebrough Pond’s USA.

Gabai-Pinsky, the final committee

member, has executive experience as the former President of Vera Wang Group, as well as the Global President for Aramis and Designers

Fragrances in addition to Beauty Bank and Idea Bank at the Estée Lauder Companies.

Base salaries for executive officers are

initially determined by evaluating the responsibilities of the position held and the experience of the individual, and by reference

to the competitive marketplace for executive talent.

Base salaries for executive officers are reviewed on an annual basis, and

adjustments are determined by evaluating our operating performance, the performance of each executive officer, as well as whether

the nature of the responsibilities of the executive has changed.

As stated above, as Messrs.

Madar and Greenberg

for United States operations, and Benacin and Santi for European operations, are most familiar with the individual performance,

level of responsibility, skills and experience of each executive officer in their respective segments, the committee relies upon

the information provided by such executive officers in determining individual performance, level of responsibility, skills and

experience of each executive officer.

For executive officers of United States

operations, the bulk of their annual compensation is in base salary including a fee paid to the holding company for Mr.

services rendered outside the United States.

However, for executive officers of European operations base salary comprises a smaller

percentage of overall compensation.

We have paid a lower percentage of overall compensation in the form of base salary to executive

officers of European operations for several years, principally because European operations historically have had higher profitability

than United States operations, and European operations are run differently from United States operations by the Chief Executive

Officer of European operations, Mr.

As the result of this historically higher profitability, European operations have

had the ability to pay higher bonus compensation in addition to base salary.

As bonus compensation is and has historically been

discretionary, no targets were set in order to maintain flexibility.

Further, if results of operations for European operations

were not satisfactory (again, no target amounts were set to maintain flexibility), then bonus compensation, as well as overall

compensation could be lowered without otherwise affecting base salary.

Finally, by keeping annual bonus compensation at a higher

percentage of overall compensation and base salary at a lower percentage, our company benefits because the base amount for annual

salary adjustments would be smaller.

Covid-19 Impact

It is important

to note that 2020 salary increases and 2019 bonus compensation awards were determined prior to the full impact the global

Covid-19 pandemic, the imposition of worldwide governmental lockdowns, and the resultant negative impact on the

Company’s operations.

During the balance of the pandemic and related impacts through December 31, 2020, no employees

were terminated or furloughed from United States operations.

Interparfums SA did avail itself of a small French government

plan for unemployment insurance for its employees.

For 2020, there were no reductions or deferrals in salaries of any

executive officers or employees.

For 2020, Mr.

Benacin had received an increase in base salary of $28,000, after not receiving any increase

in his base salary in 2017.

Benacin’s personal holding company received the same $250,000 in 2019 that it received

in 2018 and 2017 for services rendered outside of the United States by Mr.

Benacin for the benefit of the Company’s United

States operations in his capacity as President of our company.

Payment is being made by the Company’s United States operations

Benacin’s holding company in accordance with the consulting agreement with Mr.

Benacin’s holding company, which

provides for review on an annual basis of the amount of compensation payable to such company.

compensation committee took into account the following salient factors in authorizing payment to Mr.

Benacin’s holding company—

services rendered to United States operations for several years by Mr.

Benacin in connection with licensing and distribution of

international brands, as well as future services to be performed by Mr.

Benacin internationally relating to licensing and distribution

of international brands for United States operations.

Benacin values the services of two named executive officers of Interparfums SA, Mr.

Philippe Santi, Executive Vice President

and the Chief Financial Officer, and Mr.

Frederic Garcia-Pelayo, Executive Vice President and Chief Operating Officer, equally,

their base salaries, as well as their bonus compensation discussed below, have been in lockstep.

Benacin received a modest

increase in base salary of $14,000 to $789,000, which is comparable to the modest increase in base salary of $13,000 in 2019, but

less than an increase in base salary of $28,000 in 2018.

Benacin’s base salary includes $250,000 paid by the Company’s

United States operations to Mr.

Benacin’s holding company for each of the past three years, in accordance with the consulting

agreement with Mr.

Benacin’s holding company, which provides for review on an annual basis of the amount of compensation

payable to such company.

The compensation committee considered the

following salient factors in authorizing payment to Mr.

Benacin’s holding company— services rendered to United States

operations for several years by Mr.

Benacin in connection with licensing and distribution of international brands, as well as future

services to be performed by Mr.

Benacin internationally relating to licensing and distribution of international brands for United

States operations.

Benacin values the services of two

named executive officers of Interparfums SA, Mr.

Philippe Santi, Executive Vice President and the Chief Financial Officer, and

Frederic Garcia-Pelayo, Executive Vice President and Chief Operating Officer, equally, their base salaries, as well as their

bonus compensation discussed below, have been in lockstep.

For 2020, each of Messrs.

and Garcia-Pelayo received an increase in base salary of $13,000 to $443,000.

Santi and Garcia-Pelayo received an increase

in base salary of $14,000 to $470,000.

Each of Messrs.

Santi and Garcia-Pelayo had received

an increase of $28,000 and $60,000 in 2018 and 2017, respectively.

These increases were awarded primarily to reward these two

executive officers for their contributions in European Operations achieving increases in both the sales and earnings.

The compensation

committee considered the recommendations of Mr.

Benacin, results of operations for the year, as well as the services performed

for European operations by Messrs.

Santi and Garcia-Pelayo in authorizing these salary levels.

different approach is taken for United States operations as that segment is smaller and less profitable.

A more significant base

salary is paid in order to attract and retain employees with the skills and talents needed to run the operation with a lesser

emphasis placed on bonuses.

Neither of the executive officers for United States operations have employment agreements (although

Madar’s personal holding company has a consulting agreement that provides for review on an annual basis of the amount

of compensation payable to such company), as we believe that having flexibility in structuring annual base salary is a benefit,

which permits us to act quickly to meet a changing economic environment.

each of 2019, 2018 and 2017, Mr.

Madar’s base salary, including cash compensation paid to his personal holding company,

remained steady and aggregated $630,000.

Cash compensation paid to Mr.

Madar’s personal holding company in each year was

in exchange for services rendered outside of the United States by Mr.

Santi and Garcia-Pelayo had received an increase of $13,000, $28,000 in

2019 and 2018, respectively.

These increases were awarded primarily to reward these two executive officers for their contributions

in European Operations achieving increases in both the sales and earnings.

The compensation committee considered the recommendations

Benacin, results of operations for the year, as well as the services performed for European operations by Messrs.

and Garcia-Pelayo in authorizing these salary levels.

A different approach is taken for United

States operations as that segment is smaller and less profitable.

A more significant base salary is paid in order to attract and

retain employees with the skills and talents needed to run the operation with a lesser emphasis placed on bonuses.

Neither of the

executive officers for United States operations have employment agreements (although Mr.

Madar’s personal holding company

has a consulting agreement that provides for review on an annual basis of the amount of compensation payable to such company),

as we believe that having flexibility in structuring annual base salary is a benefit, which permits us to act quickly to meet a

changing economic environment.

For each of 2019 and 2018, Mr.

base salary, including cash compensation paid to his personal holding company, remained steady and aggregated $630,000.

Cash compensation

Madar’s personal holding company in each year was in exchange for services rendered outside of the United States

Madar in his capacity as Chief Executive Officer.

as the result of Mr.

Madar spending more time outside of the United States, we changed the allocation of cash compensation paid

Madar personally and to his personal holding company, but not the aggregate amount.

For 2018, as the result of Mr.

Madar spending more time outside of the

United States, we changed the allocation of cash compensation paid to Mr.

Madar personally and to his personal holding company,

but not the aggregate amount.

The amount of salary paid to Mr.

for his services in the United States in 2018 was reduced $380,000 to $160,000, while payments to his holding company were increased

by the like amount from $250,000 to $470,000.

Therefore, through 2019 total cash compensation for Mr.

Madar to be paid to him

and his personal holding company remained unchanged at $630,000.

seven years, from 2013 until 2019, the annual aggregate base salary paid to Mr.

Madar individually and fees paid to his holding

company remained unchanged at $630,000.

members of each of the Audit Committee and the Executive Compensation and Stock Option Committee (collectively the “Committees”)

jointly reviewed two surveys of chief executive officer salaries for 2019 consisting of (i) the Inter Parfums’

peer companies

listed in the Inter Parfums’

Annual Report on Form 10-K and (ii) companies with comparable market capitalization (collectively

the “CEO Salary Surveys”).

Such surveys indicated that the annual and median average CEO salaries for peer companies

in Inter Parfums’

annual report on Form 10-K (excluding the Madar Salary) were $2,854,656 and $1,540,000, respectively,

and $2,604,346 and $1,750,000 for comparable market capitalization companies, respectively.

review of the CEO Surveys, the Committees acknowledged that Mr.

Madar’s current base salary is substantially below both

of the median and average salaries as set forth in the CEO Salary Surveys, and had not been increased since 2013.

the Committees acknowledged the efforts of Mr.

Madar and his holding company as one of the prime causes for our substantial increase

in net sales and net income, as well as market capitalization from 2014, thus substantially increasing shareholder value.

upon the foregoing, on February 4, 2020 the Committees jointly authorized the aggregate annual increase in Mr.

Madar’s base

salary by $600,000 to $1.23 million effective as of January 1, 2020.

The allocation was made as requested so that the annual base

salary to Jean Madar individually will be $285,000 and the fees to Jean Madar Holding SAS will be $945,000 effective as of January

Greenberg, the Executive Vice President and Chief Financial Officer, has received the same $30,000 increase in base salary for

2019, 2018 and 2017, and for 2019 his base salary was $690,000.

In connection with these increases in salary, the Compensation

Committee considered the following material factors in granting Mr.

Madar for his services in the United States in 2018 was reduced

$380,000 to $160,000, while payments to his holding company were increased by the like amount from $250,000 to $470,000.

through 2019 total cash compensation for Mr.

Madar to be paid to him and his personal holding company remained unchanged at $630,000.

As previously reported, from 2013 until

2019 the annual aggregate base salary paid to Mr.

Madar individually and fees paid to his holding company remained unchanged at

$630,000, which was substantially below the amounts indicated by two surveys of chief executive officer salaries for 2019 (collectively

the “CEO Salary Surveys”).

The CEO Salary Surveys indicated that the annual and median average CEO salaries for peer

companies (excluding the Madar salary) were $2,854,656 and $1,540,000, respectively, and $2,604,346 and $1,750,000 for comparable

market capitalization companies, respectively.

In recognition of the efforts of Mr.

Madar and his holding company as one of the

prime causes for our substantial increase in net sales and net income, as well as market capitalization from 2014 through 2019,

thus substantially increasing shareholder value, on February 4, 2020 the Committees jointly authorized the aggregate annual increase

Madar’s base salary by $600,000 to $1.23 million effective as of January 1, 2020.

The allocation was made as requested

so that the annual base salary for Jean Madar individually was $285,000, and the fees to Jean Madar Holding SAS were $945,000,

effective as of January 1, 2020.

Russell Greenberg, the Executive Vice President

and Chief Financial Officer, has received the same $30,000 increase in base salary for 2020, 2019 and 2018, and for 2020 his base

salary was $720,000.

In connection with these increases in salary, the Compensation Committee considered the following material

factors in granting Mr.

Greenberg his salary increases:

his individual performance,

level of responsibility, skill and experience, as well as the recommendation of the Chief Executive Officer.

Compensation/Annual Incentives

discussed above, we have paid a higher percentage of overall compensation in the form of bonus compensation to executive officers

of European operations for several years, principally because European operations historically have had higher profitability than

United States operations.

As the result of this historically higher profitability, European operations have had the ability to

pay higher bonus compensation in addition to base salary.

As bonus compensation is discretionary, no targets were set in order

to maintain flexibility.

Further, if results of operations for European operations were not satisfactory (again, no target amounts

were set to maintain flexibility), then bonus compensation, as well as overall compensation could be lowered without otherwise

affecting base salary.

Individual performance, level of responsibility, skill and experience, were the salient factors considered

by the Compensation Committee in awarding bonus compensation described below.

Benacin, the chief decision maker for European operations, proposed and the compensation committee concurred in the payment

of discretionary bonus compensation of $110,000 for Mr.

For each of 2018 and 2017, Mr.

Benacin proposed and the compensation

committee concurred in the payment of discretionary bonus compensation for Mr.

Benacin of $112,000 and $102,000, respectively.

Over the past three years, this discretionary bonus compensation for Mr.

Benacin has been approximately 21% of his base salary

in 2019, 2018 and 2017.

his individual performance, level of responsibility, skill and experience,

as well as the recommendation of the Chief Executive Officer.

Bonus Compensation/Annual Incentives

As discussed above, we have paid a higher

percentage of overall compensation in the form of bonus compensation to executive officers of European operations for several years,

principally because European operations historically have had higher profitability than United States operations.

As the result

of this historically higher profitability, European operations have had the ability to pay higher bonus compensation in addition

to base salary.

As bonus compensation is discretionary, no targets were set in order to maintain flexibility.

Further, if results

of operations for European operations were not satisfactory (again, no target amounts were set to maintain flexibility), then bonus

compensation, as well as overall compensation could be lowered without otherwise affecting base salary.

Individual performance,

level of responsibility, skill and experience, were the salient factors considered by the Compensation Committee in awarding bonus

compensation described below.

Benacin, the chief decision

maker for European operations, proposed and the compensation committee concurred in the payment of discretionary bonus compensation

For his performance in 2019 and 2018, Mr.

Benacin was paid discretionary bonus compensation of $110,000 and $112,000,

respectively.

The discretionary bonus compensation for Mr.

Benacin has been approximately 17%, of his base salary in 2020 and approximately

14% in both 2019 and 2018.

In addition, bonus compensation for Messrs.

Santi and Garcia-Pelayo have remained in lockstep, and each

was awarded a discretionary bonus of $324,000, $331,000 and $330,000, or approximately 73%, 73% and 74%, of their base salaries

in 2019, 2018 and 2017, respectively.

different approach is taken for United States operations as that segment is smaller and less profitable.

As discussed above, a

more significant base salary is paid in order to attract and retain employees with the skills and talents needed to run United

States operations with a lesser emphasis placed on bonuses.

Based upon the recommendation of the Chief Executive Officer, for

each of 2019, 2018 and 2017, Mr.

Greenberg received a discretionary cash bonus of $50,000.

The Compensation Committee considered

the following material factors in granting Mr.

was awarded a discretionary bonus of $296,000, $324,000 and $331,000 in 2020, 2019 and 2018, or approximately 63%, 73% and 73%,

of their base salaries for services performed in 2020, 2019 and 2018, respectively.

A different approach is taken for United

States operations as that segment is smaller and less profitable.

As discussed above, a more significant base salary is paid in

order to attract and retain employees with the skills and talents needed to run United States operations with a lesser emphasis

placed on bonuses.

Based upon the recommendation of the Chief Executive Officer, Mr.

Greenberg was paid a discretionary bonus of

$35,000 in 2020 and $50,000 in 2019 and 2018.

The Compensation Committee considered the following material factors in granting

Greenberg his bonuses:

his individual performance, level of responsibility, skill

and experience, as well as the recommendation of the Chief Executive Officer.

Madar, the Chief Executive Officer has not received any cash bonus in the past three years.

required by French law, Interparfums SA maintains its own profit sharing plan for all French employees who have completed three

months of service, including executive officers of our European operations other than Mr.

Benacin, the Chief Executive Officer

of Interparfums SA.

Benefits are calculated based upon a percentage of taxable income of Interparfums SA and allocated to employees

based upon salary.

The maximum amount payable per year per employee is approximately $34,000.

of the total annual benefits contribution is made according to the following formula:

of (Interparfums SA net income, less 2.5% of shareholders equity without net income for the year) times a fraction, the numerator

of which is wages, and the denominator of which is net income before tax + wages + taxes (other than income tax) + valuation allowances

+ amortization expenses + interest expenses.

to individual employees is then made pro rata based upon their individual salaries for the year.

We link long-term incentives with corporate performance through the grant of stock options.

All options are granted

with an exercise price equal to the fair market value of the underlying shares of our common stock on the date of grant, and terminate

on or shortly after severance of the executive’s relationship with us.

Unless the market price of our common stock increases,

corporate executives will have no tangible benefit.

Thus, they are provided with the additional incentive to increase individual

performance with the ultimate goal of increasing our overall performance.

We believe that enhanced executive incentives which

result in increased corporate performance tend to build company loyalty.

As a general rule, the number of options granted is determined

by several factors including individual performance, company operating results and past option grants to such executives.

executive officers of United States operations and European operations, we typically grant nonqualified stock options with a term

of 6 years that vest ratably over a 5-year period on a cumulative basis, so that the option will become fully exercisable at the

beginning of the sixth year from the date of grant.

believe that the vesting period of these options serve a dual purpose:

executives will not receive any benefit if they leave

prior to such portion of the option vesting;

having a vesting period, matches the service period with the potential benefits

of the option.

Pursuant to our stock option plan, non-qualified stock options granted to executives terminate immediately upon

the executive’s termination of association with our company.

This termination provision coupled with a vesting period reduces

benefits afforded to an executive when an executive officer leaves our employ.

the past several years, as our company has grown and the market price of our common stock has increased, Messrs.

Madar and Benacin

have realized substantial compensation as the result of the exercise of their options.

As the two executives most responsible

for continued growth and success of our company, the compensation committee believes the granting of options is an appropriate

tool to tie a substantial portion of their compensation to the success of our company and is completely warranted.

actual compensation realized as the result of the exercise of options in the past, as well as the future potential of such rewards,

are powerful incentives for increased individual performance and ultimately increased company performance.

In view of the fact

that the executive officers named above contribute significantly to our profitable operations, the compensation committee believes

the option grants are valid incentives for these executive officers and are fair to our shareholders.

Generally we grant options

to executive officers in December of each year.

each of December 2019, 2018 and 2017 in view of the contributions of both Messrs.

Madar and Benacin to the company’s increased

profitability, upon the recommendation of the company’s Chief Executive Officer, the compensation committee granted options

to purchase a total of 25,000 shares of our common stock to the personal holding companies of each of Jean Madar and Philippe

Benacin at the fair market value on the date of grant.

Option grants to the personal holding companies Messrs.

Madar and Benacin

were identical as each is the Chief Executive Officer of their respective operating segments.

in each of December 2019, 2018 and 2017, the compensation committee granted options to purchase 25,000 shares to Mr.

the Chief Financial Officer.

The Compensation Committee determined that the option grants for Mr.

Greenberg, which have remained

the same for more than the past three years, were reasonable, so based upon the recommendation of the Chief Executive Officer,

it determined to keep the option grants for such executive officer at the same level for 2019.

recommendation of both Messrs.

Madar and Benacin, option grants for Messrs.

Santi and Garcia-Pelayo remained steady at 10,000

shares each for 2019, 2018 and 2017.

The compensation committee believes that these grants were proper in view of their contribution

to our company’s results in each of 2019, 2018 and 2017.

SA Stock Compensation Plans

Plan - In September 2016, Interparfums SA approved a plan to grant an aggregate of 15,100 shares of its stock to employees

with no performance condition requirement, and an aggregate of 133,000 shares to officers and managers, subject to certain corporate

performance conditions.

The corporate performance conditions were met and therefore in September 2019, 172,851 shares, adjusted

for stock splits, were distributed and the employees were permitted to trade their shares.

Under this plan in September 2019 Mr.

Benacin received 3,993 shares of Interparfums SA stock, and Messrs.

Santi and Garcia received 9,317shares each, all with a fair

market value of €41.75 per share on the date of issuance, as adjusted for stock splits.

aggregate cost of the grant of approximately $3.9 million was recognized as compensation cost by Interparfums SA on a straightline

basis over the requisite three year service period.

Plan - As of December 31, 2018, Interparfums SA approved an additional plan to grant an aggregate of 26,600 shares of its

stock to employees with no performance condition requirement, and an aggregate of 133,000 shares to officers and managers, subject

to certain corporate performance conditions.

his individual performance, level of responsibility, skill and experience, as well as the recommendation

of the Chief Executive Officer.

Madar, the Chief Executive Officer has

not received any cash bonus in the past three years.

As required by French law, Interparfums

SA maintains its own profit sharing plan for all French employees who have completed three months of service, including executive

officers of our European operations other than Mr.

Benacin, the Chief Executive Officer of Interparfums SA.

Benefits are calculated

based upon a percentage of taxable income of Interparfums SA and allocated to employees based upon salary.

The maximum amount payable

per year per employee is approximately $38,000.

Calculation of the total annual benefits

contribution is made according to the following formula:

67% of (Interparfums SA net income,

less 2.5% of shareholders equity without net income for the year) times a fraction, the numerator of which is wages, and the denominator

of which is net income before tax + wages + taxes (other than income tax) + valuation allowances + amortization expenses + interest

Contribution to individual employees is

then made pro rata based upon their individual salaries for the year.

Long-Term Incentives

Stock Options .

We link long-term

incentives with corporate performance through the grant of stock options.

All options are granted with an exercise price equal

to the fair market value of the underlying shares of our common stock on the date of grant, and terminate on or shortly after severance

of the executive’s relationship with us.

Unless the market price of our common stock increases, corporate executives will

have no tangible benefit.

Thus, they are provided with the additional incentive to increase individual performance with the ultimate

goal of increasing our overall performance.

We believe that enhanced executive incentives which result in increased corporate performance

tend to build company loyalty.

As a general rule, the number of options granted is determined by several factors including individual

performance, company operating results and past option grants to such executives.

For executive officers of United States

operations and European operations, we typically grant nonqualified stock options in December each year with a term of 6 years

that vest ratably over a 5-year period on a cumulative basis, so that the option will become fully exercisable at the beginning

of the sixth year from the date of grant.

However, due to the global pandemic and its impact on operations, no options were granted

in 2020 to either employees of United States operations or European operations.

Interparfums SA Stock Compensation Plans

2019 Plan – In December 2018,

Interparfums SA approved a plan to grant an aggregate of 26,600 shares of its stock to employees with no performance condition

requirement, and an aggregate of 133,000 shares to officers and managers, subject to certain corporate performance conditions.

The shares, subject to adjustment for stock splits, will be distributed in June 2022.

and will follow the same guidelines as the September 2016 plan.

Under this plan in June 2022, Mr.

Benacin, Madar, Garcia Pelayo

and Santi are estimated to receive 4,000 shares each, with Mr.

Greenberg estimated to receive the equivalent of 1,000 of such

shares, all subject to adjustment for stock splits.

fair value of the grant of €29.84 per share (approximately $34.00 per share) has been determined based on the quoted stock

price of Interparfums SA shares as reported by the NYSE Euronext on the date of grant.

The estimated number of shares to be distributed

of 142,379 has been determined taking into account employee turnover.

The aggregate cost of the grant of approximately $4.4 million

will be recognized as compensation cost by Interparfums SA on a straight-line basis over the requisite 3.5 year service period.

to the September 2016 plan, in order to avoid dilution of the Company’s ownership of Interparfums SA, all shares distributed or

to be distributed pursuant to these plans will be pre-existing shares of Interparfums SA, purchased in the open market by Interparfums

During, 2019, the Company acquired 131,613 shares at an aggregate cost of $5.8 million.

Appreciation Rights.

Our stock option plans authorize us to grant stock appreciation rights, or SARs.

A SAR represents a right

to receive the appreciation in value, if any, of our common stock over the base value of the SAR.

To date, we have not granted

any SARs under our plans.

While the compensation committee currently does not plan to grant any SARs under our plans, it may choose

to do so in the future as part of a review of the executive compensation strategy.

We have not in the past, and we do not have any future plans to grant restricted stock to our executive officers.

while the compensation committee currently does not plan to authorize any restricted stock plans, the compensation committee may

choose to do so in the future as part of a review of the executive compensation strategy.

Our French operating subsidiary, Interparfums,

SA, however, has instituted its 2016 and 2019 Stock Compensation Plans as discussed above.

Benacin received an automobile allowance of $12,093, which is the same amount paid in since 2010.

Garcia-Pelayo,

Executive Vice President and Chief Operating Officer of Interparfums SA, received an automobile allowance of $8,734.

Stock Ownership Guidelines

do not require any minimum level of stock ownership by any of our executive officers.

Madar, Garcia Pelayo and Santi are estimated to receive 4,000 shares each, with Mr.

Greenberg estimated to receive the equivalent

of 1,000 of such shares, all subject to adjustment for stock splits.

In March 2020, due to the potential impact

on future net sales and operating results resulting from the COVID-19 pandemic, the estimated number of shares to be distributed,

after forfeited shares, was reduced from 142,571 to 82,162.

As the Company had already purchased shares in contemplation of the

higher anticipated distribution, shares purchased in excess of the reduced anticipated distribution were transferred to treasury

shares at the Interparfums SA level.

The fair value of the grant had been determined

based on the quoted stock price of Interparfums SA shares as reported by the NYSE Euronext on the date of grant.

The original cost

of the grant was approximately $4.4 million, and the March 2020 revaluation resulted in a reduction of the cost, to approximately

$2.5 million.

As a result, a $0.3 million reduction of cost, net, was recorded for the three months ended March 31, 2020.

In June 2020, the performance conditions

were modified effecting 96 employees.

As of December 31, 2020, the number of shares to be distributed, after forfeited shares,

increased to 132,032.

The increase in shares anticipated to be distributed were transferred from treasury shares at the Interparfums

The modification resulted in a revised cost of the grant to approximately $3.8 million.

Benacin, Madar, Garcia

Pelayo and Santi are estimated to receive 4,000 shares each,

An incentive plan was established by Interparfums

SA for certain employees of Interparfums Luxury Brands, Inc.

(“IPLB”), Interparfums Singapore (“IP Singapore”)

and Inter Parfums, Inc.

The proposed incentive plan would not provide shares but rather, would give a cash payment or bonus (“incentive”

or “award”) that mirrors the shares that Interparfums SA employees will receive.

An aggregate of 42,140 “phantom”

shares have been awarded with Mr.

Greenberg being awarded 1,000 of such “phantom” shares, all subject to adjustment

for stock splits.

Stock Appreciation Rights

Our stock option plans authorize us to grant

stock appreciation rights, or SARs.

A SAR represents a right to receive the appreciation in value, if any, of our common stock

over the base value of the SAR.

To date, we have not granted any SARs under our plans.

While the compensation committee currently

does not plan to grant any SARs under our plans, it may choose to do so in the future as part of a review of the executive compensation

Restricted Stock

We have not in the past, and we do not have

any future plans to grant restricted stock to our executive officers.

However, while the compensation committee currently does

not plan to authorize any restricted stock plans, the compensation committee may choose to do so in the future as part of a review

of the executive compensation strategy.

Our French operating subsidiary, Interparfums, SA, however, has instituted its 2019 Stock

Compensation Plans as discussed above.

Other Compensation

For 2020, Mr.

Benacin received an automobile

allowance of $12,500, which is the same amount paid in since 2010.

Garcia-Pelayo, Executive Vice President and Chief

Operating Officer of Interparfums SA, received an automobile allowance of $9,000.

No Stock Ownership Guidelines

We do not require any minimum level of stock

ownership by any of our executive officers.

As stated above, Messrs.

Madar and Benacin,

are our largest beneficial shareholders, which aligns their interests with our shareholder base in keeping executive compensation

at a reasonable level.

and Pension Plans

maintain a 401(k) plan for United States operations.

However, we do not match any contributions to such plan, as we have determined

that base compensation together with annual bonuses and stock option awards, are sufficient incentives to retain talented employees.

Our European operations maintain a pension plan for its employees as required by French law.

For each of 2019, 2018 and 2017,

each of Messrs.

Benacin, Santi and Garcia-Pelayo received an increase of $16,789, $20,646 and $16,376, respectively, in their

vale of deferred compensation earnings.

Committee Report

have reviewed and discussed with management the Compensation Discussion and Analysis provisions to be included in this Annual

Report on Form 10-K for fiscal year ended December 31, 2019 and the proxy statement for the upcoming annual meeting of shareholders.

Based on this review and discussion, we recommend to the board of directors that the Compensation Discussion and Analysis referred

to above be included in this Annual Report on Form 10-K as well as the proxy statement for the upcoming annual meeting of shareholders.

Choël and

following table sets forth a summary of all compensation awarded to, earned by or paid to our “named executive officers,”

who are our principal executive officer, our principal financial officer, and each of the three most highly compensated executive

officers of our company.

This table covers all such compensation during fiscal years ended December 31, 2019, December 31,

2018 and December 31, 2017.

For all compensation related matters disclosed in the summary compensation table, and elsewhere where

applicable, all amounts paid in euro have been converted to U.S.

Madar and Benacin, are our largest beneficial shareholders,

which aligns their interests with our shareholder base in keeping executive compensation at a reasonable level.

Retirement and Pension Plans

We maintain a 401(k) plan for United States

However, we do not match any contributions to such plan, as we have determined that base compensation together with

annual bonuses and stock option awards, are sufficient incentives to retain talented employees.

Our European operations maintain

a pension plan for its employees as required by French law.

For each of 2020.

2019 and 2018, each of Messrs.

Benacin, Santi and

Garcia-Pelayo received an increase of $17,500, $16,789 and $20,646, respectively, in their value of deferred compensation earnings.

Compensation Committee Report

We have reviewed and discussed with management

the Compensation Discussion and Analysis provisions to be included in this Annual Report on Form 10-K for fiscal year ended December

31, 2020 and the proxy statement for the upcoming annual meeting of shareholders.

Based on this review and discussion, we recommend

to the board of directors that the Compensation Discussion and Analysis referred to above be included in this Annual Report on

Form 10-K as well as the proxy statement for the upcoming annual meeting of shareholders.

Francois Heilbronn

Patrick Choël and

Veronique Gabai-Pinsky

The following table sets forth a summary

of all compensation awarded to, earned by or paid to our “named executive officers,” who are our principal executive

officer, our principal financial officer, and each of the three most highly compensated executive officers of our company.

table covers all such compensation during fiscal years ended December 31, 2020, December 31, 2019 and December 31, 2018.

compensation related matters disclosed in the summary compensation table, and elsewhere where applicable, all amounts paid in euro

have been converted to U.S.

dollars at the average rate of exchange in each year.

SUMMARY COMPENSATION TABLE

Name and Principal Position

Stock Awards ($)

Option Awards ($)(1)

Non-Equity Incentive Plan Compensation ($)(2)

Change in Pension Value and Nonqualified Deferred

Compensation Earnings ($)

All Other Compensation ($)(3)

COMPENSATION TABLE

and Principal Position

Incentive Plan Compensation

in Pension Value and Nonqualified Deferred Compensation Earnings

Other Compensation

Chief Executive Officer

Russell Greenberg,

Chief Financial Officer and

Chief Financial Officer

Executive Vice President

Philippe Benacin, President Inter

Parfums, Inc., Chief Executive

Officer of Interparfums SA

Philippe Santi, Executive Vice

President and Chief Financial

Officer, Interparfums SA

Frédéric Garcia-Pelayo,

Executive Vice President and

Chief Operating Officer Interparfums SA

Amounts reflected under Option Awards represent the grant date fair values in 2019, 2018 and 2017 based on the fair value of stock

option awards using a Black-Scholes option pricing model.

The assumptions used in this model are detailed in Footnote 12 to the

audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2019 and filed with

As required by French law, Interparfums SA maintains its own profit sharing plan for all French employees who have completed three

Philippe Benacin, President

Parfums, Inc., Chief

Officer of Interparfums

Philippe Santi, Executive

President and Chief

Officer, Interparfums

Frédéric

Garcia-Pelayo,

Executive Vice President

Chief Operating Officer

Interparfums SA

reflected under Option Awards represent the grant date fair values in 2020, 2019 and 2018 based on the fair value of stock option

awards using a Black-Scholes option pricing model.

The assumptions used in this model are detailed in Footnote 13 to the audited

consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2020 and filed with the SEC.

required by French law, Interparfums SA maintains its own profit sharing plan for all French employees who have completed three

months of service, including executive officers of our European operations other than Mr.

8 unchanged sentences

to individual employees is then made pro rata based upon their individual salaries for the year.

The following table identifies (i) perquisites and other personal benefits provided to our named executive officers in fiscal

2019, and quantifies those required by SEC rules to be quantified and (ii) all other compensation that is required by SEC rules

to be separately identified and quantified.

Name and Principal

and other Personal Benefits ($)

Automobile Expense($)

following table identifies (i) perquisites and other personal benefits provided to our named executive officers in fiscal 2020,

and quantifies those required by SEC rules to be quantified and (ii) all other compensation that is required by SEC rules to be

separately identified and quantified.

Name and Principal Position

Perquisites and other Personal Benefits

Personal Automobile Expense

Lodging Expense

Jean Madar, Chairman

13 unchanged sentences

Interparfums SA

following table sets certain information relating to each grant of an award made by our company to the executive officers of our

company listed in the Summary Compensation Table during the past fiscal year.

Grants of Plan-Based Awards

Future Payouts Under

Non-Equity Incentive Plan Awards

Future Payouts Under

Equity Incentive Plan Awards

All Other Stock Awards:

of Shares of Stock or

All Other Option Awards:

of Securities Underlying

Exercise or Base Price of Option

Russell Greenberg

Philippe Benacin*

Philippe Santi

Frédéric Garcia-Pelayo

were granted to the personal holding companies of Messrs.

Madar and Benacin, as each of Messrs.

Madar and Benacin own 99.99% of

their respective personal holding companies.

discussed above, we typically grant nonqualified stock options with a term of 6 years that vest ratably of a 5-year period on

a cumulative basis, so that the option will become fully exercisable at the beginning of the sixth year from the date of grant.

believe that the vesting period of these options serves a dual purpose:

executives will not receive any benefit if they leave

prior to such portion of the option vesting;

having a vesting period matches the service period with the potential benefits

of the option.

our company’s stock option plans, the exercise price is determined by the average of the high and low price on the date

of grant, not the closing price as reported by The Nasdaq Stock Market.

also note that the Summary Compensation Table does not include income realized by the named executive officers as the result of

the exercise of stock options, but rather reflects the dollar amount recognized for financial statement reporting purposes for

options granted in accordance with ASC topic 718-20.

However, value realized as the result of stock option exercises is set forth

in the table entitled “Option Exercises and Stock Vested”.

stock options were granted to the executive officers of our company listed in the Summary Compensation Table during the past fiscal

SA Stock Compensation Plan.

1 unchanged sentence

the past fiscal year.

SA Stock Grant Plans

Plan –

As discussed above, under this plan in September 2019 Mr.

Benacin received 3,993 shares of Interparfums SA stock,

Santi and Garcia received 9,317 shares each, all with a fair market value of €41.75 per share on the date of

issuance, as adjusted for stock splits.

similar incentive plan was established by Interparfums SA for certain employees of Interparfums Luxury Brands, Inc.

(“IPLB”),

Interparfums Singapore (“IP Singapore”) and Inter Parfums, Inc.

has been implemented.

The proposed incentive plan

would not provide shares but rather, would give a cash payment or bonus (“incentive”

or “award”) that

mirrors the shares that Interparfums SA employees will receive.

An aggregate of 47,900 “phantom”

shares have been

awarded with Mr.

Greenberg being awarded 1,500 of such “phantom”

Plan –

As discussed above, under this plan in June 2022 Messrs.

Benacin, Madar, Garcia Pelayo and Santi are estimated

to receive 4,000 shares each, with Mr.

Greenberg estimated to receive the equivalent of 1,000 of such shares, all subject to adjustment

for stock splits.

SA Profit Sharing Plan

8 unchanged sentences

listed in the Summary Compensation Table as of December 31, 2020.

EQUITY AWARDS AT FISCAL YEAR-END

Number of Securities

Underlying Unexercised Options (#) Exercisable (1)

Number of Securities

Underlying Unexercised Options (#) Unexercisable

Incentive Plan Awards:

Option Awards

Number of Securities Underlying Unexercised Options (#) Exercisable (1)

Number of Securities Underlying Unexercised Options (#) Unexercisable

Equity Incentive Plan Awards:

Number of Securities Underlying Unexercised Unearned Options (#)

Exercise Price ($)

Frédéric

Garcia-Pelayo

from table above]

options expire 6 years from the date of grant, and vest 20% each year commencing one year after the date of grant.

are held in the name of personal holding company.

Option Exercise Price ($)

Option Expiration Date

Russell Greenberg

Philippe Benacin

Philippe Santi

Frédéric Garcia-Pelayo

[ Footnotes from table above ]

All options expire

6 years from the date of grant, and vest 20% each year commencing one year after the date of grant.

Options are held

in the name of personal holding company.

following table sets certain information relating to outstanding equity awards granted by Interparfums SA, our majority-owned

2 unchanged sentences

EQUITY AWARDS AT FISCAL YEAR-END

INTERPARFUMS SA

OF INTERPARFUMS SA

of Securities Underlying Unexercised Options (#) Exercisable)

10 unchanged sentences

Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested($)

Russell Greenberg

Philippe Benacin

Philippe Santi

Frédéric

Garcia-Pelayo

from table above]

number of shares to be issued, with Mr.

Greenberg estimated to receive the equivalent of 1,000 of such shares, only to the extent

that the performance conditions have been met.

Exercises and Stock Vested

4 unchanged sentences

Option Awards

Number of Shares Acquired on Exercie

Realized on Exercise

Number of Shares Acquired on Exercise (#)

Value Realized on Exercise ($) 1

Number of Shares Acquired on Vesting (#)

Value Realized

Value Realized On Vesting ($)

Russell Greenberg

2 unchanged sentences

Frédéric Garcia-Pelayo

from table above]

value realized on exercise of options in dollars is based upon the difference between the fair market value of the common stock

on the date of exercise, and the exercise price of the option.

French law treated as a stock appreciation right and paid in US dollars in 2019.

[Footnotes from table above]

Total value realized

on exercise of options in dollars is based upon the difference between the fair market value of the common stock on the date

of exercise, and the exercise price of the option.

Interparfums SA, our majority-owned French subsidiary which has its shares traded on the Euronext, no options were exercised during

13 unchanged sentences

Inter Parfums SA Pension Plan

not include any contributions made by prior employers, or individually by the recipients as such information is confidential under

Does not include

any contributions made by prior employers, or individually by the recipients as such information is confidential under French

SA maintains a pension plan for all of its employees, including all executive officers.

1 unchanged sentence

benefits involves estimating the probable present value of projected benefit obligations.

This projected benefit obligations is

This projected benefit obligations are

then prorated to take into account seniority of the employees of Interparfums SA on the calculation date.

calculating benefits, the following assumptions were applied:

voluntary retirement at age 65;

a rate of 45% for employer payroll contributions for all employees;

a 4% average annual salary increase;

an annual rate of turnover for all employees under 55 years of age and nil above;

the TH 00-02 mortality table for men and the TF 00-02 mortality table for women;

a discount rate of 2.0%.

retirement at age 65;

rate of 45% for employer payroll contributions for all employees;

4% average annual salary increase;

annual rate of turnover for all employees under 55 years of age and nil above;

TH 00-02 mortality table for men and the TF 00-02 mortality table for women;

discount rate of 2.0%.

normal retirement age is 65 years, but employees, including Messrs.

6 unchanged sentences

annual total compensation of Mr.

Jean Madar, Chief Executive Officer (the “CEO”):

2020, our last completed fiscal year:

median employee’s compensation was $67,294

Chief Executive Officer’s total 2019 compensation was $1,121,412

● Accordingly,

our 2019 CEO to Median Employee Pay Ratio was 16.66 to 1

Our median employee’s

compensation was $69,078

Our Chief Executive

Officer’s total 2020 compensation was $1,806,246

Accordingly, our

2020 CEO to Median Employee Pay Ratio was 26.13 to 1

pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records.

4 unchanged sentences

We did not use any material estimates, assumptions, adjustments or statistical sampling to determine the worldwide median employee.

SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual

total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates

12 unchanged sentences

The agreement provides for automatic annual

renewal terms, unless either party terminates the agreement upon 120 days’

renewal terms, unless either party terminates the agreement upon 120 days’ notice.

For 2020, Mr.

5 unchanged sentences

2014, we entered into a consulting agreement with Mr.

Benacin’s holding company, Philippe Benacin Holding SAS, which provides

for review on an annual basis of the amount of compensation payable to such company.

2 unchanged sentences

The agreement

was for one year, with automatic one year renewals unless either party terminates on 120 days’

notice or Mr.

was for one year, with automatic one year renewals unless either party terminates on 120 days’ notice or Mr.

Benacin ceases

1 unchanged sentence

For 2015 through 2020 Mr.

Benacin’s personal holding company received $250,000 each

year for services rendered outside of the United States by Mr.

Benacin in his capacity as President.

This consulting agreement

was renewed at $250,000 for 2019.

In addition, in December 2017, December 2018 and December 2019, we granted options to purchase

25,000 shares for the benefit of Mr.

Benacin, and were granted to his personal holding company instead of Mr.

In addition, in December

2018 and December 2019, we granted options to purchase 25,000 shares for the benefit of Mr.

Benacin, and were granted to his personal

holding company instead of Mr.

Benacin directly.

2013, we enter into a consulting agreement with Mr.

Madar’s holding company, Jean Madar Holding SAS, which provides for

review on an annual basis of the amount of compensation payable to such company.

2 unchanged sentences

The agreement

was for one year, with automatic one year renewals unless either party terminates on 120 days’

notice or Mr.

was for one year, with automatic one year renewals unless either party terminates on 120 days’ notice or Mr.

to be the Chief Executive Officer of our company.

From 2013 through 2017, Mr.

Madar’s personal holding company received

$250,000 each year for services rendered outside of the United States by Mr.

7 unchanged sentences

Madar paid to him and his personal holding company remained unchanged

This consulting agreement was been renewed at $470,000 for 2019.

In addition, in December 2017, December 2018 and

December 2019, we granted options to purchase 25,000 shares for the benefit of Mr.

Madar, which were granted to his personal holding

company instead of Mr.

This consulting agreement was renewed at $470,000 for 2019.

As discussed above, in view of receiving substantially

less than the annual and median average CEO salaries for peer companies and companies with comparable market capitalization, in

early February 2020 the Mr.

Madar’s base salary was increased by $600,000 to $1.23 million effective as of January 1, 2020,

and allocated so that the annual base salary for Jean Madar individually was $285,000, and the fees to Jean Madar Holding SAS

were $945,000, effective as of January 1, 2020.

In addition, in December 2018 and December 2019, we granted options to purchase

25,000 shares for the benefit of Mr.

Madar, which were granted to his personal holding company instead of Mr.

Madar directly.

2 unchanged sentences

DIRECTOR COMPENSATION

Fees Earned or Paid in Cash

Option Awards

Earned or Paid in Cash

Non-Equity Incentive Plan Compensation

Change in Pension Value and Nonqualified Deferred

Compensation Earnings

Other Compensation ($) 1

Change in Pension Value and Nonqualified Deferred Compensation Earnings

All Other Compensation

Francois Heilbronn 2

4 unchanged sentences

Gilbert Harrison 7

from table above]

gain from exercise of stock options.

of the end of the last fiscal year, Mr.

[Footnotes from table above]

Represents gain

from exercise of stock options.

As of the end of

the last fiscal year, Mr.

Heilbronn held options to purchase an aggregate of 4,500 shares of our common stock.

of the end of the last fiscal year, Mr.

Bensoussan held options to purchase an aggregate

of 4,000 shares of our common stock.

of the end of the last fiscal year, Mr.

Choël held options to purchase an aggregate

of 2,750 shares of our common stock.

of the end of the last fiscal year, Mr.

As of the end of

the last fiscal year, Mr.

Bensoussan held options to purchase an aggregate of 5,500 shares of our common stock.

As of the end of

the last fiscal year, Mr.

Choël held options to purchase an aggregate of 3,750 shares of our common stock.

As of the end of

the last fiscal year, Mr.

Dyens held options to purchase an aggregate of 5,500 shares of our common stock.

of the end of the last fiscal year, Ms.

As of the end of

the last fiscal year, Ms.

Gabai-Pinsky held options to purchase an aggregate of 4,500 shares of our common stock.

of the end of the last fiscal year, Mr.

As of the end of

the last fiscal year, Mr.

Harrison held options to purchase an aggregate of 4,500 shares of our common stock.

2018, all nonemployee directors received $5,000 for each board meeting at which they participate in person, and $2,500 for each

meeting held by conference telephone.

In addition, the annual fee for each member of the audit committee is $6,000.

and compensation to all nonemployee directors as increased to $6,000 for each board meeting at which they participate in person,

and $3,000 for each meeting held by conference telephone.

In addition, effective January 1, 2020 the annual fee for each member

of the audit committee was raised to $8,000.

July 2019 and compensation to all nonemployee directors was increased to $6,000 for each board meeting at which they participate

in person, and $3,000 for each meeting held by conference telephone.

In addition, effective January 1, 2020 the annual fee for

each member of the audit committee was raised to $8,000.

maintain stock option plans for our nonemployee directors.

8 unchanged sentences

then such nonemployee director would not be eligible to receive that February 1 grant.

February 1, 2019, options to purchase 1,000 shares were granted to each of our outside directors, Francois Heilbronn, Robert Bensoussan,

Patrick Choël, Michel Dyens Veronique Gabai-Pinsky and Gilbert Harrison, all at the exercise price of $66.46 per share under

the 2016 plan.

All of such options were granted at the fair market value and vest ratably over a 4 year period.

At our annual

meeting in September 2019 our shareholders approved a proposal to amend our 2016 Stock Option Plan to increase the number of shares

issuable upon exercise of options to be granted starting February 1, 2020 from 1,000 shares to 1,500 shares solely to nonemployee

directors annually on each February 1.

of such options were granted at the fair market value and vest ratably over a 4 year period.

At our annual meeting in September

2019 our shareholders approved a proposal to amend our 2016 Stock Option Plan to increase the number of shares issuable upon exercise

of options to be granted starting February 1, 2020 from 1,000 shares to 1,500 shares solely to nonemployee directors annually

on each February 1.

On February 1, 2021, options to purchase 1,500 shares were granted to all of our nonemployee directors at

the exercise price of $62.18 per share under our 2016 Stock Option Plan.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

5 unchanged sentences

As of February 26, 2021 we had 31,635,098 shares of common stock outstanding.

and Address of Beneficial Owner

of Beneficial Ownership 1

Percent of Class

Name and Address of Beneficial Owner

Amount of Beneficial Ownership 1

Approximate Percent of Class

c/o Interparfums SA

26 unchanged sentences

75008 Paris, France

Less than 1 %

Veronique Gabai-Pinsky

New York NY 10010

Less than 1 %

Gilbert Harrison

2 unchanged sentences

New York, NY 10151

Less than 1 %

Frederic Garcia-Pelayo

2 unchanged sentences

75008, Paris France

Less than 1 %

Blackrock, Inc.

4 unchanged sentences

Malvern, PA 19355

Ameriprise Financial, Inc.

Ameriprise Financial Center

Minneapolis, MN 55474

All Directors and Officers

1 unchanged sentence

14,151,650 16

1 All shares of common stock

are directly held with sole voting power and sole power to dispose, unless otherwise stated.

Options which are exercisable within

60 days are included in beneficial ownership calculations.

Jean Madar, the Chairman of the Board and Chief Executive Officer of

the Company and Philippe Benacin, the Vice Chairman of the Board and President of the Company, have a verbal agreement or understanding

to vote the shares each beneficially owns in a like manner.

2 Consists of 10,682 shares

held directly, 7,032,341 shares held indirectly through Jean Madar Holding SAS, a personal holding company, and options to purchase

60,800 shares.

3 Consists of 6,846,064 shares

held indirectly through Philippe Benacin Holding SAS, a personal holding company, and options to purchase 60,800 shares.

4 Consists of shares of common

stock underlying options.

5 Consists of shares of common

stock underlying options.

6 Consists of 33,063 shares

held directly and options to purchase 2,500 shares.

All shares of common

stock are directly held with sole voting power and sole power to dispose, unless otherwise stated.

Options which are exercisable

within 60 days are included in beneficial ownership calculations.

Jean Madar, the Chairman of the Board and Chief Executive

Officer of the Company and Philippe Benacin, the Vice Chairman of the Board and President of the Company, have a verbal agreement

or understanding to vote the shares each beneficially owns in a like manner.

Consists of 20,112

shares held directly, 7,032,341 shares held indirectly through Jean Madar Holding SAS, a personal holding company, and options

to purchase 60,600 shares.

Consists of 6,846,064

shares held indirectly through Philippe Benacin Holding SAS, a personal holding company, and options to purchase 60,600 shares.

Consists of shares

held directly and options to purchase 2,500 shares.

7,500 shares held directly and options to purchase 75,000 shares.

Consists of options

to purchase shares.

Consists of 34,063

shares held directly and options to purchase 2,625 shares.

Consists of 6,500

shares held directly and options to purchase 2,625 shares.

Consists of 3,250

shares held directly and options to purchase 1,875 shares.

Consists of 3,000

shares held directly and options to purchase 2,625 shares.

Consists of shares

held directly and options to purchase 1,250 shares.

of common stock underlying options.

of shares of common stock underlying options.

Consists of shares

held directly and options to purchase 2,500 shares..

10 Consists of shares of common

stock underlying options.

11 Consists of shares of common

stock underlying options.

12 Consists of shares of common

stock underlying options.

13 Information based upon

Schedule 13G Amendment 4 of Blackrock, Inc.

dated February 5, 2020 as filed with the Securities and Exchange Commission.

14 Information based upon

Schedule 13G Amendment 3 of The Vanguard Group, an investment advisor, dated February 12, 2020 as filed with the Securities and

of common stock underlying options.

Information based

upon Schedule 13G Amendment 5 of Blackrock, Inc.

dated January29, 2021 as filed with the Securities and Exchange Commission.

Information based

upon Schedule 13G Amendment 4 of The Vanguard Group, an investment advisor, dated February 10, 2021 as filed with the Securities

and Exchange Commission.

Information based

upon Schedule 13G of Ameriprise Financial, Inc.

(“AFI”) dated February 12, 2021 as filed with the Securities and

Exchange Commission.

of 13,932,400 shares held directly or indirectly, and options to purchase 219,250 shares.

AFI disclaims beneficial ownership of any shares reported on this Schedule 13G.

Consists of 13,952,830

shares held directly or indirectly, and options to purchase 235,400 shares.

following table sets forth certain information as of the end of our last fiscal year regarding all equity compensation plans that

5 unchanged sentences

exercise price of

options, warrants

available for

future issuance

Equity compensation plans approved by security holders

2 unchanged sentences

with European Subsidiaries

We have guaranteed the obligations of our

majority-owned, French subsidiary, Interparfums SA under our Paul Smith license agreement.

We also provide (or had provided on

our behalf) certain financial, accounting and legal services for Interparfums SA, and during 2019, 2018 and 2017 fees for such

services were $483,675, $214,513 and $233,625, respectively.

In 2017, Inter Parfums USA, LLC, a United States subsidiary, renewed

a license agreement for five years that was initially signed in 2012 on the same terms with Interparfums Suisse (SARL), a Swiss

subsidiary of Interparfums SA, for the right to sell amenities under the Lanvin brand name to luxury hotels, cruise lines and airlines

in return for royalty payments as are customary in our industry.

have guaranteed the obligations of our majority-owned, French subsidiary, Interparfums SA under our Paul Smith license agreement.

We also provide (or had provided on our behalf) certain financial, accounting and legal services for Interparfums SA, and during

2020, 2019 and 2018 fees for such services were $450,750, $483,675 and $214,513, respectively.

In 2017, Inter Parfums USA, LLC,

a United States subsidiary, renewed a license agreement for five years that was initially signed in 2012 on the same terms with

Interparfums Suisse (SARL), a Swiss subsidiary of Interparfums SA, for the right to sell amenities under the Lanvin brand name

to luxury hotels, cruise lines and airlines in return for royalty payments as are customary in our industry.

2018, Interparfums SA, an indirect majority-owned subsidiary of the Company, loaned the Company $10 million.

3 unchanged sentences

The last payment was made on February 28, 2020.

March 2020, Interparfums Luxury Brands, Inc., an indirect majority-owned subsidiary of the Company, loaned the Company $10 million,

which was repaid in full, with interest at 2% per annum, in December 2020.

2014, we entered into a consulting agreement with Mr.

Benacin’s holding company, Philippe Benacin Holding SAS, which provides

for review on an annual basis of the amount of compensation payable to such company.

2 unchanged sentences

The agreement

was for one year, with automatic one year renewals unless either party terminates on 120 days’

notice or Mr.

was for one year, with automatic one year renewals unless either party terminates on 120 days’ notice or Mr.

Benacin ceases

1 unchanged sentence

For 2015 through 2020, Mr.

Benacin’s personal holding company received $250,000 each

year for services rendered outside of the United States by Mr.

Benacin in his capacity as President..

This consulting agreement

was renewed at $250,000 for 2019.

In addition, in December 2017, December 2018 and December 2019, we granted options to purchase

25,000 shares for the benefit of Mr.

Benacin, and were granted to his personal holding company instead of Mr.

In addition, in December

2018 and December 2019, we granted options to purchase 25,000 shares for the benefit of Mr.

Benacin, and were granted to his personal

holding company instead of Mr.

Benacin directly.

2013, we enter into a consulting agreement with Mr.

Madar’s holding company, Jean Madar Holding SAS, which provides for

review on an annual basis of the amount of compensation payable to such company.

2 unchanged sentences

The agreement

was for one year, with automatic one year renewals unless either party terminates on 120 days’

notice or Mr.

was for one year, with automatic one year renewals unless either party terminates on 120 days’ notice or Mr.

to be the Chief Executive Officer of our company.

From 2013 through 2017, Mr.

Madar’s personal holding company received

$250,000 each year for services rendered outside of the United States by Mr.

7 unchanged sentences

Madar paid to him and his personal holding company remained unchanged

This consulting agreement was been renewed at $470,000 for 2019.

In addition, in December 2017 and again in December

2018, we granted options to purchase 25,000 shares for the benefit of Mr.

Madar, and were granted to his personal holding company

instead of Mr.

This consulting agreement was renewed at $470,000 for 2019, again with no change in aggregate compensation.

above, in view of receiving substantially less than the annual and median average CEO salaries for peer companies and companies

with comparable market capitalization, in early February 2020 the Mr.

Madar’s base salary was increased by $600,000 to $1.23

million effective January 1, 2020, and allocated so that the annual base salary for Jean Madar individually was $285,000, and

the fees to Jean Madar Holding SAS were $945,000.

In addition, in December 2018 and again in December 2019, we granted options

to purchase 25,000 shares for the benefit of Mr.

Madar, which were granted to his personal holding company rather than to Mr.

Madar directly.

discussed above, the members of each of the Audit Committee and the Executive Compensation and Stock Option Committee (collectively

the “Committees”) reviewed two surveys of chief executive officer salaries for 2019.

After review of the CEO Surveys

and the efforts of Mr.

Madar and his holding company as one of the prime causes for our substantial success, in February 2020

the Committees jointly authorized the aggregate annual increase in Mr.

Madar’s base salary by $600,000 to $1.23 million

effective as of January 1, 2020.

The allocation was made as requested so that the annual base salary to Jean Madar individually

will be $285,000 and the fees to Jean Madar Holding SAS will be $945,000 effective as of January 1, 2020.

in Private Company

2019 each of our company and Interparfums SA made a $100,000 investment in a privately held start-up fragrance company controlled

by director, Veronique Gabai-Pinsky.

previously disclosed, during 2019 each of our company and Interparfums SA made a $100,000 investment in a privately held start-up

fragrance company controlled by director, Veronique Gabai-Pinsky.

for Approval of Related Person Transactions

3 unchanged sentences

Charter contains such explicit authority, as required by the applicable rules of The Nasdaq Stock Market.

following are our directors who are “independent directors”

within the applicable rules of The Nasdaq Stock Market:

following are our directors who are independent directors within the applicable rules of The Nasdaq Stock Market:

follow and comply with the independent director definitions as provided by The Nasdaq Stock Market rules in determining the independence

of our directors, which are posted on our company’s website.

In addition, such rules are also available on The Nasdaq Stock

Market’s website.

In addition, The Nasdaq Stock Market maintains more stringent rules relating to director independence

14 unchanged sentences

with this approach, as the two largest beneficial stockholders of our company are also directly responsible for the operations

of our company’s two operating segments.

Accordingly, our board of directors does not have a “Lead Director,”

of our company’s two operating segments.

Accordingly, our board of directors does not have a “Lead Director,”

a non-management director who controls the meetings of our board of directors.

board of directors manages risk by (i) review of period operating reports and discussions with management;

(ii) approval of executive

compensation incentive plans through its committee, the Executive Compensation and Stock Option Committee;

(iii) approval of related

party transactions through its committee, the Audit Committee;

and (iv) approval of material transactions not in the ordinary

course of business.

Since our inception, we have never been the subject of any material product liability claims, and we have

had no recent material property damage claims.

board of directors manages risk by (i) review of periodic operating reports and discussions with management;

(ii) approval of

executive compensation incentive plans through its committee, the Executive Compensation and Stock Option Committee;

(iii) approval

of related party transactions through its committee, the Audit Committee;

and (iv) approval of material transactions not in the

ordinary course of business.

Since our inception, we have never been the subject of any material product liability claims, and

we have had no recent material property damage claims.

we periodically enter into foreign currency forward exchange contracts to hedge exposure related to receivables denominated in

10 unchanged sentences

Principal Accountant Fees and Services

The following sets forth the fees billed to us by Mazars USA

LLP, as well as discusses the services provided for the past two fiscal years, fiscal years ended December 31, 2019 and December

following sets forth the fees billed to us by Mazars USA LLP, as well as discusses the services provided for the past two fiscal

years, fiscal years ended December 31, 2020 and December 31, 2019.

billed by Mazars USA LLP and its affiliate, Mazars S.A.

3 unchanged sentences

USA LLP did not bill us for any audit-related services during 2020 and 2019.

Mazars USA LLP billed us $41,500 and $30,000 for tax services

during 2019 and 2018, respectively.

billed us $9,000 and $8,000 for other services during

2019 or 2018.

USA LLP billed us $34,500 and $41,500 for tax services during 2020 and 2019, respectively.

billed us $3,500 and $9,000 for other services during 2020 and 2019, respectively.

Committee Pre-Approval Policies and Procedures

1 unchanged sentence

who prepare or issue an audit report for us.

the first quarter of 2019, the audit committee authorized the following non-audit services to be performed by Mazars USA LLP.

authorized the engagement of Mazars USA LLP if deemed necessary to provide tax consultation

in the ordinary course of business for fiscal year ended December 31, 2019.

authorized the engagement of Mazars USA LLP if deemed necessary to provide tax consultation

as may be required on a project by project basis that would not be considered in the

ordinary course of business, of up to a $5,000 fee limit per project, subject to an aggregate

fee limit of $25,000 for fiscal year ended December 31, 2019.

If we require further tax

services from Mazars USA LLP, then the approval of the audit committee must be obtained.

we require other services by Mazars USA LLP on an expedited basis such that obtaining

pre-approval of the audit committee is not practicable, then the Chairman of the Committee

has authority to grant the required pre-approvals for all such services.

imposed a cap of $100,000 on the fees that Mazars USA LLP can charge for services on

an expedited basis that are approved by the Chairman without obtaining full audit committee

of the non-audit services of either of the Company’s auditors had the pre-approval

requirement waived in accordance with Rule 2-01(c)(7)(i)(C) of Regulation S-X.

the second quarter of 2020, the audit committee authorized the following non-audit services to be performed by Mazars USA LLP.

We authorized the

engagement of Mazars USA LLP if deemed necessary to provide tax consultation in the ordinary course of business for fiscal

year ended December 31, 2020.

We authorized the

engagement of Mazars USA LLP if deemed necessary to provide tax consultation as may be required on a project by project basis

that would not be considered in the ordinary course of business, up to a $10,000 fee limit per project (or €10,000 in

the case of Interparfums SA), subject to an aggregate fee limit of $50,000 for fiscal year ended December 31, 2020.

require further tax services from Mazars USA LLP, then the approval of the audit committee must be obtained.

authorized the engagement of Mazars USA LLP if deemed necessary to provide attestation or other services as may be required on

a project by project basis that would not be considered in the ordinary course of business, up to a $10,000 fee limit per project

(or €10,000 in the case of Interparfums SA), subject to an aggregate fee limit of $50,000 for fiscal year ended December

If we require further tax services from Mazars USA LLP, then the approval of the audit committee must be obtained.

If we require other

services by Mazars USA LLP on an expedited basis such that obtaining pre-approval of the audit committee is not practicable,

then the Chairman of the Committee has authority to grant the required pre-approvals for all such services.

We imposed a cap

of $100,000 on the fees that Mazars USA LLP can charge for services on an expedited basis that are approved by the Chairman

without obtaining full audit committee approval.

None of the non-audit

services of either of the Company’s auditors had the pre-approval requirement waived in accordance with Rule 2-01(c)(7)(i)(C)

of Regulation S-X.

Exhibits, Financial Statement Schedules

Financial Statements annexed hereto

( a)(1) Financial

Statements annexed hereto

Report of Independent Registered Public Accounting Firm

Financial Statements:

Audited Financial

Consolidated Balance Sheets as of December 31, 2020 and 2019

1 unchanged sentence

Consolidated Statements of Comprehensive Income (Loss) for each of the years in the three-year period ended December 31, 2020

Consolidated Statements of Changes in Shareholders’

Equity for each of the years in the three-year period ended December 31, 2019

Consolidated Statements of Changes in Shareholders’ Equity for each of the years in the three-year period ended December 31, 2020

Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, 2020

Notes to Consolidated Financial Statements

Financial Statement Schedule:

Schedule II –

Valuation and Qualifying Accounts

Exhibits –

(a)(2) Financial

Statement Schedule:

Schedule II – Valuation and Qualifying Accounts

(a)(3) Exhibits

– The list of exhibits is contained in the Exhibit Index, which follows the signature page of this report.

2 unchanged sentences

AND SUBSIDIARIES

Consolidated Financial

Statements and Schedule

Financial Statements and Schedule

Report of Independent Registered Public Accounting Firm

3 unchanged sentences

Consolidated Statements of Comprehensive Income for each of the years in the three-year period ended December 31, 2020

Consolidated Statements of Changes in Shareholders’

Equity for each of the years in the three-year period ended December 31, 2019

Consolidated Statements of Changes in Shareholders’ Equity for each of the years in the three-year period ended December 31, 2020

Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, 2020

1 unchanged sentence

Financial Statement Schedule:

Schedule II –

Valuation and Qualifying Accounts

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

Schedule II – Valuation and Qualifying Accounts

REPORT OF INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM

To Shareholders and the Board of Directors

4 unchanged sentences

balance sheets of Inter Parfums, Inc.

(the “Company”) as of December 31, 2019 and 2018, and the related consolidated

(the “Company”) as of December 31, 2020 and 2019, and the related consolidated

statements of income, comprehensive income, shareholders' equity, and cash flows for each of the years in the three-year period

ended December 31, 2019, and the related notes and the schedule listed in the Index in Item 15(a)(2) (collectively referred

to as the “financial statements”).

We also have audited the Company's internal control over financial reporting as

of December 31, 2019, based on criteria established in Internal Control - Integrated Framework:

(2013) issued by the Committee

of Sponsoring Organizations of the Treadway Commission (COSO).

ended December 31, 2020, and the related notes and the schedule listed in the Index in Item 15(a)(2) (collectively referred to

as the “financial statements”).

We also have audited the Company's internal control over financial reporting as of

December 31, 2020, based on criteria established in Internal Control - Integrated Framework:

(2013) issued by the Committee of

Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial

7 unchanged sentences

Basis for Opinion

The Company’s management is responsible

for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment

of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report

on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s consolidated financial

statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We are a public

accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required

to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with

the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether

the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control

over financial reporting was maintained in all material respects.

The Company’s management is responsible

for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its

assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual

Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s consolidated

financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and

are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance

with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about

whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal

control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial

3 unchanged sentences

test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating

the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of

the consolidated financial statements.

Our audits also included

evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation

of the consolidated financial statements.

Our audit of internal control over financial reporting included obtaining an understanding

6 unchanged sentences

Control over Financial Reporting

A company’s internal control over

financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and

the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance

of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements

in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only

in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention

or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect

on the consolidated financial statements.

in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made

only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding

prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have

a material effect on the consolidated financial statements.

Because of its inherent limitations, internal

3 unchanged sentences

of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated

below are matters arising from the current period audit of the consolidated financial statements that were communicated or required

to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated

financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical

audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not,

by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts

or disclosures to which they relate.

As described in Notes 1 and 7 to the

consolidated financial statements, the Company’s consolidated indefinite and finite –

life intangible assets

balance was $202 million at December 31, 2019.

Indefinite lived intangible assets principally consist of trademarks and

finite-lived intangible assets represent fees to acquire, or enter into a license.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

As described in Notes 1 and 8 to the consolidated

financial statements, the Company’s consolidated indefinite and finite —life intangible assets balance was $214 million

at December 31, 2020.

Indefinite lived intangible assets principally consist of trademarks and finite-lived intangible assets

represent fees to acquire, or enter into a license.

Those intangible assets are tested for

impairment as follows:

- Indefinite –

life intangible assets are tested for impairment at least annually at the reporting

unit level or more frequently when events occur or circumstances change.

The evaluation requires a comparison of the estimated

fair value of the asset to the carrying value of the asset.

The fair value is estimated based upon discounted future cash flow

If the carrying value of an indefinite-lived intangible asset exceeds its fair value, an impairment charge is recorded.

- Finite –

life intangible assets are tested for impairment testing whenever events or changes

in circumstances indicate that the carrying amount of the asset may not be recoverable.

If impairment indicators exist, the undiscounted

future cash flows associated with the expected service potential of the asset are compared to the carrying value of the asset.

If the projection of undiscounted cash flows is less than the carrying value of a finite-lived intangible asset, an impairment

charge would be recorded.

- Indefinite – life intangible

assets are tested for impairment at least annually at the reporting unit level or more

frequently when events occur or circumstances change.

The evaluation requires a comparison

of the estimated fair value of the asset to the carrying value of the asset.

value is estimated based upon discounted future cash flow projections.

If the carrying

value of an indefinite-lived intangible asset exceeds its fair value, an impairment charge

- Finite – life intangible

assets are tested for impairment whenever events or changes in circumstances

indicate that the carrying amount of the asset may not be recoverable.

If impairment

indicators exist, the undiscounted future cash flows associated with the expected service

potential of the asset are compared to the carrying value of the asset.

If the projection

of undiscounted cash flows is less than the carrying value of a finite-lived intangible

asset, an impairment charge would be recorded.

The determination of the future cash flows

4 unchanged sentences

The determination of an impairment indicator

on the finite –

life intangible assets requires management judgments and involves assumptions.

on the finite – life intangible assets requires management judgments and involves assumptions.

We identified the impairment assessment

of intangible assets as a critical audit matter.

Auditing management’s judgments regarding the evaluation of impairment indicators,

forecasts of future revenue and operating margin, and the discount rate to be applied involve a high degree of subjectivity.

Auditing management’s judgments regarding the evaluation of impairment

indicators, forecasts of future revenue and operating margin, and the discount rate to be applied involve a high degree of subjectivity.

The primary procedures we performed to

address this critical audit matter included:

► Reviewing the analysis of the identification of impairment

evidence for each indefinite and finite-life asset based on three indicators (sales analysis, new products launches, payment of

minimum guarantees), and then corroborate that analysis with external information and evidence obtained in other areas of the

► Testing the effectiveness of controls relating to management’s

impairment tests, including controls over the impairment indicators and determination of the future cash flows.

► In testing management’s process for determining

the future cash flows we evaluated the reasonableness of management’s forecasts of future revenue and operating margin by

performing a retrospective review in comparing these forecasts to historical operating results and evaluating whether the assumptions

used were reasonable considering current information as well as future expectations as well as using additional evidence obtained

► Reviewing the analysis of the

identification of impairment evidence for each indefinite and finite-life asset based on three indicators (sales analysis, new

products launches, payment of minimum guarantees), and then corroborate that analysis with external information and evidence obtained

in other areas of the audit.

► Utilizing a valuation specialist to assist in auditing

the discount rate.

It includes evaluating whether the assumptions used were reasonable by comparing with third party market data.

► Testing the effectiveness of controls

relating to management’s impairment tests, including controls over the impairment indicators and determination of the future

► In testing management’s

process for determining the future cash flows we evaluated the reasonableness of management’s forecasts of future revenue

and operating margin by performing a retrospective review in comparing these forecasts to historical operating results and evaluating

whether the assumptions used were reasonable considering current information as well as future expectations as well as using additional

evidence obtained in other areas of the audit.

► Utilizing a valuation specialist

to assist in auditing the discount rate.

It includes evaluating whether the assumptions used were reasonable by comparing with

third party market data.

/s/ Mazars USA LLP

2 unchanged sentences

March 1, 2021

INTER PARFUMS, INC.

INTER PARFUMS,

AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2019 and 2018

(In thousands except share and per share

Consolidated Balance

2020 and 2019

(In thousands except

share and per share data)

Current assets:

4 unchanged sentences

Other current assets

Income taxes receivable

taxes receivable

Total current assets

Equipment and leasehold improvements, net

Equipment and leasehold improvements,

Right-of-use assets, net

Trademarks, licenses and other intangible assets, net

Trademarks, licenses and other

intangible assets, net

Deferred tax assets

Liabilities and Equity

Current liabilities:

4 unchanged sentences

Income taxes payable

Dividends payable

Total current liabilities

Long–term debt, less current portion

Lease liabilities, less current portion

Total current

debt, less current portion

Lease liabilities,

less current portion

Inter Parfums, Inc.

shareholders’

Preferred stock, $ 0.001 par value.

5 unchanged sentences

Retained earnings

Accumulated other comprehensive loss

Accumulated other comprehensive

Treasury stock, at cost, 9,864,805 common shares at December 31, 2020 and 2019

Total Inter Parfums, Inc.

shareholders’

Noncontrolling interest

Total liabilities and equity

shareholders’

Noncontrolling

Total liabilities

See accompanying notes to consolidated financial statements.

INTER PARFUMS, INC.

INTER PARFUMS,

AND SUBSIDIARIES

Consolidated Statements of Income

Consolidated Statements

Years ended December 31,

(In thousands except share and per share

Cost of sales

Selling, general, and administrative expenses

Impairment loss

2020, 2019, and 2018

(In thousands except

share and per share data)

general, and administrative expenses

Income from operations

4 unchanged sentences

Income before income taxes

Net income attributable to the noncontrolling interest

Net income attributable to Inter Parfums, Inc.

income attributable to the noncontrolling interest

attributable to Inter Parfums, Inc.

Net income attributable to Inter

Parfums, Inc.

common shareholders:

Weighted average number of shares outstanding:

Weighted average number of shares

Dividends declared per share

See accompanying notes to consolidated financial statements.

INTER PARFUMS, INC.

INTER PARFUMS,

AND SUBSIDIARIES

Consolidated Statements of Comprehensive

Consolidated Statements

of Comprehensive Income

Years ended December 31,

(In thousands except share and per share

Other comprehensive income:

Net derivative instrument income, net of tax

2020, 2019, and 2018

(In thousands except

share and per share data)

Other comprehensive

Net derivative instrument income (loss),

Transfer of OCI into earnings

Translation adjustments, net of tax

Translation adjustments,

Comprehensive

Comprehensive income

Comprehensive income attributable to noncontrolling

Net derivative instrument income (loss), net of tax

Transfer of OCI into earnings

Translation adjustments, net of tax

Comprehensive income attributable

to Inter Parfums Inc.

attributable to noncontrolling interests:

Net derivative instrument income (loss),

Translation adjustments,

Comprehensive

income attributable to Inter Parfums Inc.

See accompanying notes to consolidated financial statements.

INTER PARFUMS, INC.

INTER PARFUMS,

AND SUBSIDIARIES

Consolidated Statements of Changes in Shareholders’

Consolidated Statements

of Changes in Shareholders’ Equity

Years ended December 31,

(In thousands except share and per share

Common stock, beginning and end of year

Additional paid-in capital, beginning of year

Shares issued upon exercise of stock options

Purchase of subsidiary shares from noncontrolling interests

Stock-based compensation

Additional paid-in capital, end of year

Retained earnings, beginning of year

Stock-based compensation

Retained earnings, end of year

Accumulated other comprehensive loss, beginning of year

Foreign currency translation adjustment, net of tax

Transfer from other comprehensive income into earnings

Net derivative instrument gain, net of tax

Accumulated other comprehensive loss, end of year

Treasury stock, beginning and end of year

Noncontrolling interest, beginning of year

Foreign currency translation adjustment, net of tax

Transfer from other comprehensive income into earnings

Net derivative instrument gain (loss), net of tax

Purchase of subsidiary shares from noncontrolling interests

2020, 2019, and 2018

(In thousands except

share and per share data)

stock, beginning of year

issued upon exercise of stock options

stock, end of year

paid-in capital, beginning of year

Shares issued upon exercise of

stock options

Share-based compensation

Purchase of subsidiary shares from

noncontrolling interests

of subsidiary shares purchased

paid-in capital, end of year

Retained earnings,

beginning of year

earnings, end of year

Accumulated other

comprehensive loss, beginning of year

Foreign currency translation adjustment,

Transfer from other comprehensive

income into earnings

Net derivative

instrument gain, net of tax

other comprehensive loss, end of year

stock, beginning and end of year

Noncontrolling

interest, beginning of year

Foreign currency translation adjustment,

Net derivative instrument gain

(loss), net of tax

Purchase of subsidiary shares from

noncontrolling interests

Stock-based compensation

Noncontrolling interest, end of year

of subsidiary shares purchased

Noncontrolling

interest, end of year

See accompanying notes to consolidated financial statements.

INTER PARFUMS, INC.

INTER PARFUMS,

AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Years ended December 31, 2019, 2018,

(In thousands)

ended December 31, 2020, 2019, and 2018

Cash flows from operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net income to net

cash provided by operating activities:

Depreciation and amortization including impairment loss

1 unchanged sentence

Noncash stock compensation

Share of income of equity investment

Lease expense

Deferred tax benefit

Deferred tax expense (benefit)

Change in fair value of derivatives

2 unchanged sentences

Income taxes, net

Net cash provided by operating activities

Net cash provided by operating

Cash flows from investing activities:

3 unchanged sentences

Payment for intangible assets acquired

Proceeds from sale of trademark

Net cash provided by (used in) investing activities

Purchase of equity investment

Net cash used in investing activities

Cash flows from financing activities:

Repayment of long-term debt

Proceeds issuance of long-term debt

Proceeds from exercise of options

1 unchanged sentence

Dividends paid to noncontrolling interests

Purchase of subsidiary shares from noncontrolling interests

Purchase of subsidiary shares

from noncontrolling interests

Net cash used in financing activities

Effect of exchange rate changes on cash

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents –

Effect of exchange rate changes

Net increase (decrease) in cash

and cash equivalents

Cash and cash equivalents –

beginning of year

Cash and cash equivalents –

Supplemental disclosures of cash flow information:

Cash paid for:

See accompanying notes to consolidated financial statements.

PARFUMS, INC.

See accompanying notes

to consolidated financial statements.

INTER PARFUMS, INC.

AND SUBSIDIARIES

4 unchanged sentences

Business of the Company

Inter Parfums,

and its subsidiaries (the “Company”) are in the fragrance business and manufacture and distribute a wide array

of fragrances and fragrance related products.

Substantially

all of our prestige fragrance brands are licensed from unaffiliated third parties, and our business is dependent upon the continuation

and renewal of such licenses.

With respect to the Company’s largest brands, we own the Lanvin brand name for our class of

trade, and license the Montblanc, Jimmy Choo, Coach, and GUESS brand names.

As a percentage of net sales, product sales for the

Company’s largest brands were as follows:

Inter Parfums, Inc.

subsidiaries (the “Company”) are in the fragrance business and manufacture and distribute a wide array of fragrances

and fragrance related products.

Substantially all of our prestige

fragrance brands are licensed from unaffiliated third parties, and our business is dependent upon the continuation and renewal

of such licenses.

With respect to the Company’s largest brands, we own the Lanvin brand name for our class of trade, and

license the Montblanc, Coach, Jimmy Choo and GUESS brand names.

As a percentage of net sales, product sales for the Company’s

largest brands were as follows:

Year Ended December 31,

GUESS (license commenced April 1, 2018)

No other brand

represented 10% or more of consolidated net sales.

No other brand represented 10%

or more of consolidated net sales.

Basis of Preparation

consolidated financial statements include the accounts of the Company, including 73 % owned Interparfums SA, a subsidiary whose

stock is publicly traded in France.

In 2018, the Company formed Interstellar Brands, LLC, (“Interstellar”), a wholly

owned subsidiary in the United States.

Interstellar’s partnership with IMG Models allows for the two groups to collaborate

on exploring and developing compelling e-commerce businesses for clients of IMG Models.

All material intercompany balances and

transactions have been eliminated .

The consolidated financial statements include

the accounts of the Company, including 73 % owned Interparfums SA, a subsidiary whose stock is publicly traded in France.

intercompany balances and transactions have been eliminated .

Management Estimates

8 unchanged sentences

Foreign Currency Translation

subsidiaries with operations denominated in a foreign currency, assets and liabilities are translated to U.S.

dollars at year-end

exchange rates.

Income and expense items are translated at average rates of exchange prevailing during the year.

Gains and losses

from translation adjustments are accumulated in a separate component of shareholders’

Cash and Cash Equivalents

and Short-Term Investments

liquid investments purchased with a maturity of three months or less are considered to be cash equivalents.

From time to time,

the Company has short-term investments which consist of certificates of deposit with maturities greater than three months.

Company monitors concentrations of credit risk associated with financial institutions with which the Company conducts significant

The Company believes its credit risk is minimal, as the Company primarily conducts business with large, well-established

financial institutions.

Substantially all cash and cash equivalents are primarily held at financial institutions outside the United

States and are readily convertible into U.S.

foreign subsidiaries with operations denominated in a foreign currency, assets and liabilities are translated to U.S.

at year - end exchange rates.

Income and expense items are translated

at average rates of exchange prevailing during the year.

Gains and losses from translation adjustments are accumulated in a separate

component of shareholders ’ equity.

Cash and Cash Equivalents and Short-Term Investments

All highly liquid investments

purchased with a maturity of three months or less are considered to be cash equivalents.

From time to time, the Company has short-term

investments which consist of certificates of deposit and other contracts with maturities greater than three months.

monitors concentrations of credit risk associated with financial institutions with which the Company conducts significant business.

The Company believes its credit risk is minimal, as the Company primarily conducts business with large, well-established financial

institutions.

Substantially all cash and cash equivalents are primarily held at financial institutions outside the United States

and are readily convertible into U.S.

INTER PARFUMS, INC.

4 unchanged sentences

Accounts Receivable

Accounts receivable

represent payments due to the Company for previously recognized net sales, reduced by allowances for doubtful

accounts or balances which are estimated to be uncollectible, which aggregated $ 2.5 million and $ 2.6 million as of December 31,

2019 and 2018, respectively.

Accounts receivable balances are written-off against the allowance for doubtful accounts when they

become uncollectible.

Recoveries of accounts receivable previously recorded against the allowance are recorded in the consolidated

statement of income when received.

We generally grant credit based upon our analysis of the customer’s financial position,

as well as previously established buying patterns.

receivable represent payments due to the Company for previously recognized net sales, reduced by allowances for doubtful accounts

or balances which are estimated to be uncollectible, which aggregated $ 5.5 million and $ 2.5 million as of December 31, 2020 and

2019, respectively.

Accounts receivable balances are written-off against the allowance for doubtful accounts when they become

uncollectible.

Recoveries of accounts receivable previously recorded against the allowance are recorded in the consolidated statement

of income when received.

We generally grant credit based upon our analysis of the customer ’ s

financial position, as well as previously established buying patterns.

including promotional merchandise, only include inventory considered saleable or usable in future periods, and are stated at the

4 unchanged sentences

Promotional merchandise is charged to cost of sales at the time the merchandise

is shipped to the Company’s customers.

All derivative instruments are

recorded as either assets or liabilities and measured at fair value.

The Company uses derivative instruments to principally manage

a variety of market risks.

For derivatives designated as hedges of the exposure to changes in fair value of the recognized asset

or liability or a firm commitment (referred to as fair value hedges), the gain or loss is recognized in earnings in the period

of change together with the offsetting loss or gain on the hedged item attributable to the risk being hedged.

The effect of that

accounting is to include in earnings the extent to which the hedge is not effective in achieving offsetting changes in fair value.

For cash flow hedges, the effective portion of the derivative’s gain or loss is initially reported in equity (as a component

of accumulated other comprehensive income) and is subsequently reclassified into earnings in the same period or periods during

which the hedged forecasted transaction affects earnings.

The ineffective portion of the gain or loss of a cash flow hedge is

reported in earnings immediately.

The Company also holds certain instruments for economic purposes that are not designated for

hedge accounting treatment.

For these derivative instruments, changes in their fair value are recorded in earnings immediately.

Equipment and Leasehold

is shipped to the Company ’ s customers.

derivative instruments are recorded as either assets or liabilities and measured at fair value.

The Company uses derivative instruments

to principally manage a variety of market risks.

For derivatives designated as hedges of the exposure to changes in fair value

of the recognized asset or liability or a firm commitment (referred to as fair value hedges), the gain or loss is recognized in

earnings in the period of change together with the offsetting loss or gain on the hedged item attributable to the risk being hedged.

The effect of that accounting is to include in earnings the extent to which the hedge is not effective in achieving offsetting

changes in fair value.

For cash flow hedges, the effective portion of the derivative ’ s

gain or loss is initially reported in equity (as a component of accumulated other comprehensive income) and is subsequently reclassified

into earnings in the same period or periods during which the hedged forecasted transaction affects earnings.

The ineffective portion

of the gain or loss of a cash flow hedge is reported in earnings immediately.

The Company also holds certain instruments for economic

purposes that are not designated for hedge accounting treatment.

For these derivative instruments, changes in their fair value

are recorded in earnings immediately.

Equipment and Leasehold Improvements

and leasehold improvements are stated at cost less accumulated depreciation and amortization.

Depreciation and amortization are

provided using the straight-line method over the estimated useful lives for equipment, which range between three and ten years

and the shorter of the lease term or estimated useful asset lives for leasehold improvements.

Depreciation provided on equipment

used to produce inventory, such as tools and molds, is included in cost of sales.

INTER PARFUMS, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2019, 2018 and 2017

(In thousands except share and per share

provided using the straight - line method over the estimated useful

lives for equipment, which range between three and ten years and the shorter of the lease term or estimated useful asset

lives for leasehold improvements.

Depreciation provided on equipment used to produce inventory, such as tools and molds, is included

in cost of sales.

Long-Lived Assets

15 unchanged sentences

fair value, an impairment charge is recorded.

assets subject to amortization are evaluated for impairment testing whenever events or changes in circumstances indicate that

the carrying amount of an amortizable intangible asset may not be recoverable.

If impairment indicators exist for an amortizable

intangible asset, the undiscounted future cash flows associated with the expected service potential of the asset are compared

to the carrying value of the asset.

If our projection of undiscounted future cash flows is in excess of the carrying value of

the intangible asset, no impairment charge is recorded.

If our projection of undiscounted future cash flows is less than the carrying

value of the intangible asset, an impairment charge would be recorded to reduce the intangible asset to its fair value.

INTER PARFUMS, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020, 2019 and 2018

(In thousands except share and per share

Intangible assets subject to

amortization are evaluated for impairment testing whenever events or changes in circumstances indicate that the carrying amount

of an amortizable intangible asset may not be recoverable.

If impairment indicators exist for an amortizable intangible asset,

the undiscounted future cash flows associated with the expected service potential of the asset are compared to the carrying value

of the asset.

If our projection of undiscounted future cash flows is in excess of the carrying value of the intangible asset,

no impairment charge is recorded.

If our projection of undiscounted future cash flows is less than the carrying value of the intangible

asset, an impairment charge would be recorded to reduce the intangible asset to its fair value.

Revenue Recognition

The Company sells its products to department stores, perfumeries, specialty stores and domestic and international wholesalers and distributors.

Company sells its products to department stores, perfumeries, specialty stores and domestic and international wholesalers and

distributors.

Our revenue contracts represent single performance obligations to sell our products to customers.

Sales of such products by our domestic subsidiaries are denominated in U.S.

dollars, and sales of such products by our foreign subsidiaries are primarily denominated in either euro or U.S.

The Company recognizes revenues when contract terms are met, the price is fixed and determinable, collectability is reasonably assured and control of the assets has passed to the customer based on the agreed upon shipping terms.

Sales of such

products by our domestic subsidiaries are denominated in U.S.

dollars, and sales of such products by our foreign subsidiaries

are primarily denominated in either euro or U.S.

The Company recognizes revenues when contract terms are met, the price

is fixed and determinable, collectability is reasonably assured and control of the assets has passed to the customer based on

the agreed upon shipping terms.

Net sales are comprised of gross revenues less returns, trade discounts and allowances.

The Company does not bill its customers’

freight and handling charges.

All shipping and handling costs, which aggregated $ 7.7 million, $ 7.1 million and $ 5.9 million in 2019, 2018 and 2017, respectively, are included in selling, general and administrative expenses in the consolidated statements of income.

The Company grants credit to all qualified customers and does not believe it is exposed significantly to any undue concentration of credit risk.

No one customer represented 10 % or more of net sales in 2019, 2018 or 2017.

does not bill its customers ’ freight and handling charges.

All shipping and handling costs, which aggregated $ 5.0 million, $ 7.7 million and $ 7.1 million in 2020, 2019 and 2018, respectively,

are included in selling, general and administrative expenses in the consolidated statements of income.

The Company grants credit

to all qualified customers and does not believe it is exposed significantly to any undue concentration of credit risk.

customer represented 10 % or more of net sales in 2020, 2019 or 2018.

Sales Returns

35 unchanged sentences

Advertising and Promotion

and promotional costs are expensed as incurred and recorded as a component of cost of goods sold (in the case of free goods given

to customers) or selling, general and administrative expenses.

Advertising and promotional costs included in selling, general

and administrative expenses were $ 144.6 million, $ 139.7 million and $ 123.7 million for 2019, 2018 and 2017, respectively.

relating to purchase with purchase and gift with purchase promotions that are reflected in cost of sales aggregated $ 38.9 million,

$ 36.4 million and $ 33.8 million in 2019, 2018 and 2017, respectively.

Package Development

Package development

costs associated with new products and redesigns of existing product packaging are expensed as incurred.

Advertising and promotional

costs are expensed as incurred and recorded as a component of cost of goods sold (in the case of free goods given to customers)

or selling, general and administrative expenses.

Advertising and promotional costs included in selling, general and administrative

expenses were $ 91.7 million, $ 144.6 million and $ 139.7 million for 2020, 2019 and 2018, respectively.

Costs relating to purchase

with purchase and gift with purchase promotions that are reflected in cost of sales aggregated $ 26.4 million, $ 38.9 million and

$ 36.4 million in 2020, 2019 and 2018, respectively.

Package Development Costs

Package development costs associated

with new products and redesigns of existing product packaging are expensed as incurred.

Operating Leases

6 unchanged sentences

License Agreements

The Company’s license

agreements generally provide the Company with worldwide rights to manufacture, market and sell fragrance and fragrance related

products using the licensors’

The licenses typically have an initial term of approximately 5 to 1 5 years,

and are potentially renewable subject to the Company’s compliance with the license agreement provisions.

The remaining

terms, excluding potential renewal periods, range from approximately 1 to 14 years.

Under each license, the Company is required

to pay royalties in the range of 5 % to 10 % to the licensor, at least annually, based on net sales to third parties.

Company ’ s license agreements generally provide the Company

with worldwide rights to manufacture, market and sell fragrance and fragrance related products using the licensors ’

The licenses typically have an initial term of approximately

5 to 1 5 years, and are potentially renewable subject to the Company ’ s

compliance with the license agreement provisions.

The remaining terms, excluding potential renewal periods, range from approximately

1 to 13 years.

Under each license, the Company is required to pay royalties in the range of 6 % to 10 % to the licensor, at

least annually, based on net sales to third parties.

In certain cases, the Company

27 unchanged sentences

financial statements.

Issuance of Common

Stock by Consolidated Subsidiary

The difference

between the Company’s share of the proceeds received by the subsidiary and the carrying amount of the portion of the Company’s

Issuance of Common Stock by Consolidated Subsidiary

difference between the Company ’ s share of the proceeds received

by the subsidiary and the carrying amount of the portion of the Company ’ s

investment deemed sold, is reflected as an equity adjustment in the consolidated balance sheets.

Treasury Stock

of Directors may authorize share repurchases of the Company’s common stock (Share Repurchase Authorizations).

Share repurchases

under Share Repurchase Authorizations may be made through open market transactions, negotiated purchase or otherwise, at times

and in such amounts within the parameters authorized by the Board.

Shares repurchased under Share Repurchase Authorizations are

held in treasury for general corporate purposes, including issuances under various employee stock option plans.

Treasury shares

are accounted for under the cost method and reported as a reduction of equity.

Share Repurchase Authorizations may be suspended,

limited or terminated at any time without notice.

Board of Directors may authorize share repurchases of the Company ’ s

common stock (Share Repurchase Authorizations).

Share repurchases under Share Repurchase Authorizations may be made through open

market transactions, negotiated purchase or otherwise, at times and in such amounts within the parameters authorized by the Board.

Shares repurchased under Share Repurchase Authorizations are held in treasury for general corporate purposes, including issuances

under various employee stock option plans.

Treasury shares are accounted for under the cost method and reported as a reduction

Share Repurchase Authorizations may be suspended, limited or terminated at any time without notice.

Recent Accounting Pronouncements

In August 2017, the Financial

Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) to improve accounting

for hedging activities.

The objective of the ASU is to improve the financial reporting of hedging relationships in order to better

portray the economic results of an entity’s risk management activities in its financial statements and to make certain targeted

improvements to simplify the application of hedge accounting guidance.

This ASU is effective for annual and interim periods beginning

after December 15, 2018 and early adoption is permitted.

We have evaluated the standard and determined that there has been no

material impact on our consolidated financial statements.

In June 2016, the FASB issued

ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial

Instruments”, as updated in 2019 and 2020, which require a financial asset measured at amortized cost basis to be

presented at the net amount expected to be collected.

The new rules eliminate the probable initial recognition threshold and,

instead, reflect an entity’s current estimate of all expected credit losses.

The new rules will be effective for the

Company in the first quarter of 2020.

The Company expects the new rules to apply to its trade receivables, but does not

expect the adoption to have a material impact on our consolidated financial statements.

June 2016, the Financial Accounting Standards Board ( “ FASB ” )

issued ASU 2016-13, “ Financial Instruments - Credit Losses

Measurement of Credit Losses on Financial Instruments ” ,

as updated in 2019 and 2020, which require a financial asset measured at amortized cost basis to be presented at the net amount

expected to be collected.

The new rules eliminate the probable initial recognition threshold and, instead, reflect an entity ’ s

current estimate of all expected credit losses.

The new rules took effect for the Company in the first quarter of 2020 and there

was no material impact on our consolidated financial statements.

There are no other recent accounting

pronouncements issued but not yet adopted that would have a material effect on our consolidated financial statements.

Reclassifications

prior year ’ s amounts in the accompanying consolidated balance

sheet and statements of cash flows have been reclassified to conform to current period presentation.

INTER PARFUMS, INC.

3 unchanged sentences

(In thousands except share and per share

In February 2016, the FASB issued

an ASU which requires lessees to recognize lease assets and lease liabilities arising from operating leases on the balance sheet.

This ASU is effective for annual and interim reporting periods beginning after December 15, 2018.

The standard requires entities

to recognize a lease liability to cover lease payments and a lease asset representing its right to use the underlying asset for

the lease term.

The Company has adopted the standard on January 1, 2019 using the modified retrospective method in the year of

adoption with certain transition practical expedients with no restatement of prior period amounts.

Upon adoption, the Company

recognized right-of-use assets of $ 31.8 million and lease liabilities of $ 32.4 million and made no adjustments to retained earnings.

Adoption of the new standard did not materially impact our consolidated net income and cash flows.

There are no other recent accounting

pronouncements issued but not yet adopted that would have a material effect on our consolidated financial statements.

Reclassifications

Certain prior year’s amounts

in the accompanying consolidated balance sheet and statements of cash flows have been reclassified to conform to current period

presentation.

(2) Impact of COVID-19 Pandemic

novel strain of coronavirus ( “ COVID-19 ” )

surfaced in late 2019 and has spread around the world, including to the United States and France.

In March 2020, the World Health

Organization declared COVID-19 a pandemic.

The COVID-19 pandemic has disrupted our business operations and caused a significant

unfavorable impact on our results of operations.

In response to the COVID-19

pandemic various national, state, and local governments where we, our suppliers, and our customers operate initially issued decrees

prohibiting certain businesses from continuing to operate and certain classes of workers from reporting to work.

More recently,

those governments have set guidelines in allowing businesses to reopen and employees to return to offices.

Beginning in March

2020, we implemented travel restrictions and we have been following social distancing practices.

Our teams were set up to work

from home and carry on business as efficiently as possible.

In all jurisdictions in which we operate we have been following guidance

from authorities and health officials in allowing our teams to gradually return to our offices, including, requiring personnel

to wear masks and other protective clothing as appropriate, and implementing additional cleaning and sanitization routines at

our offices and distribution centers as the health and safety of our employees are paramount.

The effects of the COVID-19

pandemic on the beauty industry began in early March 2020.

Retail store closings, event cancellations and a shutdown of international

air travel brought our sales to a virtual standstill.

The duration and intensity of this global health emergency and its related

disruptions are uncertain.

Beginning in June 2020, retail stores in many jurisdictions around the world began reopening and business

has improved considerably.

However, international travel has remained largely curtailed globally due to both government restrictions

and consumer health concerns that continue to adversely impact consumer traffic in most travel retail locations.

We anticipate

that limited traffic in reopened stores and the virtual shutdown of international air traffic will continue to have an unfavorable

impact our business.

We faced significant challenges

in 2020 and we anticipate that these challenges will continue in 2021 due to uncertain market conditions.

Business significantly

improved during the second half of 2020, as retail stores began reopening and consumers have increased their on-line purchasing.

We expect this trend to continue, however, we do not see a resurgence anytime soon in travel retail as air traffic continues to

suffer due in part to governmental restrictions on international air travel.

In addition, the recent resurgence and introduction

of variants of COVID-19 cases in various parts of the world, including the United States, the United Kingdom and other countries

in Europe, South America and Africa, has caused temporary re-implementation of government restrictions to prevent further

spread of the virus.

These include the temporary closure of businesses deemed non-essential, travel bans and restrictions, social

distancing and quarantines.

Lastly, the COVID-19 pandemic has led to high levels of unemployment and deteriorating economic conditions

in many countries where our products are sold, forcing many consumers to limit discretionary purchases.

We believe that the impact

of the COVID-19 pandemic will continue to have a material adverse effect on our results of our operations, financial position

and cash flows through at least the end of 2021.

(3) Recent Agreements

Abercrombie & Fitch and Hollister

In November 2019, we extended

our license for both the Abercrombie & Fitch and Hollister brands until December 31, 2022, and added automatic renewals unless

terminated on 3 years’

In September 2019, the Company

entered into an exclusive, 10 -year worldwide license agreement with German luxury fashion house MCM for the creation, development

and distribution of fragrances under the MCM brand.

Our rights under such license are subject to certain minimum advertising expenditures

and royalty payments as are customary in our industry.

Oscar de la Renta

In September 2019, the Company

and Oscar de la Renta entered into an amended license agreement extending their partnership through December 31, 2031, and added

an additional five-year extension option through December 31, 2036.

The original license agreement, signed in October 2013, would

have expired on December 31, 2025.

Kate Spade New York

Anna Sui Corp.

In January 2021, we renewed

our license agreement with Anna Sui Corp.

for the creation, development and distribution of fragrance products through December 31,

2026, without any material changes in terms and conditions.

Our initial 10-year license agreement with Anna Sui Corp.

The renewal agreement also allows for an additional 5-year term through 2031 at the option of the Company.

INTER PARFUMS, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020, 2019 and 2018

(In thousands except share and per share

Acquisition – Future Headquarters in Paris

December 2020, the Company signed a purchase contract, subject to certain conditions, to acquire an office building complex for

its exclusive use as its future headquarters, located in the heart of Paris.

In order to maintain the Company ’ s

current cash position, approximately 90% of the €125 million ($153 million) purchase price, excluding taxes and related expenses,

will be financed by a bank loan.

The transaction is expected to be completed in the spring of 2021 with the move planned for the

end of 2021 or the beginning of 2022.

In December 2020, the Company paid a €6.25 million ($7.7 million) deposit upon signing

the purchase contract.

Such amount is included in equipment and leasehold improvements on the accompanying balance sheet as of

December 31, 2020.

Origines-parfums

June 2020, the Company, through its 73% owned French subsidiary, Interparfums SA, and Divabox SAS ( “ Divabox ” ),

owner of the Origines-parfums e-commerce platform for beauty products, signed a strategic agreement and equity investment pursuant

to which we acquired 25% of Divabox capital for $14.0 million, through a capital increase.

The difference between the purchase

price and the fair value of net assets acquired of approximately $8.7 million has been allocated to goodwill.

The investment is

being accounted for under the equity method and is included in other assets on the accompanying balance sheet as of December 31,

In connection with the acquisition, the Company entered into a $13.4 million term loan, which has been amended such that

the loan was repaid in full in February 2021.

Our share of the income of Divabox was $0.5 million for the year-ended December

Such amount is included in other income on the accompanying consolidated statement of income.

In June 2020, the Company entered

into an exclusive, 11 -year worldwide license agreement with Kate Spade New York for the creation, development and distribution

of fragrances under the Kate Spade brand.

This license took effect on January 1, 2020, and our rights under such license are subject

to certain minimum advertising expenditures and royalty payments as are customary in our industry.

into an exclusive, 5-year worldwide license agreement with a potential 5-year extension with Moncler for the creation, development

and distribution of fragrances under the Moncler brand.

Our rights under this license are subject to certain minimum advertising

expenditures and royalty payments as are customary in our industry.

In January 2021, we renewed

our license agreement with S.T.

Dupont for the creation, development and distribution of fragrance products through December 31,

2022, without any material changes in terms and conditions.

Our initial 11-year license agreement with S.T.

Dupont was signed

in June 1997, and had previously been extended through December 31, 2020.

(4) Inventories

6 unchanged sentences

(In thousands except share and per share

Overhead included

in inventory aggregated $ 4.3 million and $ 4.2 million as of December 31, 2019 and 2018, respectively.

Included in inventories

is an inventory reserve, which represents the difference between the cost of the inventory and its estimated realizable value,

based upon sales forecasts and the physical condition of the inventories.

In addition, and as necessary, specific reserves for

future known or anticipated events may be established.

Inventory reserves aggregated $ 4.9 million as of December 31, 2019 and

Overhead included in inventory

aggregated $ 5.4 million and $ 4.3 million as of December 31, 2020 and 2019, respectively.

Included in inventories is an inventory

reserve, which represents the difference between the cost of the inventory and its estimated realizable value, based upon sales

forecasts and the physical condition of the inventories.

In addition, and as necessary, specific reserves for future known or

anticipated events may be established.

Inventory reserves aggregated $ 9.4 million and $ 4.9 million as of December 31, 2020 and

2019, respectively.

(5) Fair Value of Financial Instruments

The following

tables present our financial assets and liabilities that are measured at fair value on a recurring basis and are categorized using

the fair value hierarchy.

The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair

Fair Value Measurements at December 31, 2019

Quoted Prices in Active Markets for

Significant Other

Short-term investments

Foreign currency forward exchange contracts accounted for using hedge accounting

Foreign currency forward exchange contracts not accounted for using hedge accounting

Interest rate swap

The following tables present

our financial assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value

The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value.

Fair Value Measurements at December 31, 2020

Quoted Prices in Active Markets for

Quoted Prices in

Significant Other

Active Markets for

Identical Assets

Short-term investments

Foreign currency forward exchange contracts accounted for using hedge accounting

Foreign currency forward exchange contracts not accounted for using hedge accounting

Interest rate swap

INTER PARFUMS, INC.

Value Measurements at December 31, 2019

currency forward exchange contracts accounted for using hedge accounting

currency forward exchange contracts not accounted for using hedge accounting

carrying amount of cash and cash equivalents including money market funds, short-term investments, accounts receivable, other

receivables, accounts payable and accrued expenses approximates fair value due to the short terms to maturity of these instruments.

The carrying amount of loans payable approximates fair value as the variable interest rates on the Company ’ s

indebtedness approximate current market rates.

PARFUMS, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2019, 2018 and 2017

(In thousands except share and per share

The carrying amount of cash and cash equivalents including money market funds, short-term investments, accounts receivable,

other receivables, accounts payable and accrued expenses approximates fair value due to the short terms to maturity of these instruments.

The carrying amount of loans payable approximates fair value as the variable interest rates on the Company’s indebtedness

approximate current market rates.

Foreign currency forward exchange contracts are valued based on quotations from financial institutions and the value of

interest rate swaps are the discounted net present value of the swaps using third party quotes from financial institutions.

(5) Derivative Financial Instruments

The Company enters into foreign currency forward exchange contracts to hedge exposure related to receivables denominated

in a foreign currency and occasionally to manage risks related to future sales expected to be denominated in a foreign currency.

Before entering into a derivative transaction for hedging purposes, it is determined that a high degree of initial effectiveness

exists between the change in value of the hedged item and the change in the value of the derivative instrument from movement in

exchange rates.

High effectiveness means that the change in the cash flows of the derivative instrument will effectively offset

the change in the cash flows of the hedged item.

The effectiveness of each hedged item is measured throughout the hedged period

and is based on the dollar offset methodology and excludes the portion of the fair value of the foreign currency forward exchange

contract attributable to the change in spot-forward difference which is reported in current period earnings.

Consolidated Financial Statements

31, 2020, 2019 and 2018

(In thousands

except share and per share data)

currency forward exchange contracts are valued based on quotations from financial institutions and the value of interest rate

swaps are the discounted net present value of the swaps using third party quotes from financial institutions.

(6) Derivative

Financial Instruments

Company enters into foreign currency forward exchange contracts to hedge exposure related to receivables denominated in a foreign

currency and occasionally to manage risks related to future sales expected to be denominated in a foreign currency.

Before entering

into a derivative transaction for hedging purposes, it is determined that a high degree of initial effectiveness exists between

the change in value of the hedged item and the change in the value of the derivative instrument from movement in exchange rates.

High effectiveness means that the change in the cash flows of the derivative instrument will effectively offset the change in

the cash flows of the hedged item.

The effectiveness of each hedged item is measured throughout the hedged period and is based

on the dollar offset methodology and excludes the portion of the fair value of the foreign currency forward exchange contract

attributable to the change in spot-forward difference which is reported in current period earnings.

Any hedge ineffectiveness

4 unchanged sentences

in other comprehensive income are reclassified to current-period earnings.

In connection with a 2015 brand acquisition, $ 108 million of the purchase price was paid in cash on the closing date and

was financed entirely through a 5 -year term loan.

As the payment at closing was due in dollars and we had planned to finance it

with debt in euro, the Company entered into foreign currency forward contracts to secure the exchange rate for the $ 108 million

purchase price at $ 1.067 per 1 euro.

connection with a 2015 brand acquisition, $ 108 million of the purchase price was paid in cash on the closing date and was financed

entirely through a 5 -year term loan.

As the payment at closing was due in dollars and we had planned to finance it with debt in

euro, the Company entered into foreign currency forward contracts to secure the exchange rate for the $ 108 million purchase price

at $ 1.067 per 1 euro.

This derivative was designated and qualified as a cash flow hedge.

Gains and losses in derivatives designated as hedges are accumulated in other comprehensive income (loss) and gains and

losses in derivatives not designated as hedges are included in (gain) loss on foreign currency on the accompanying income statements.

Such gains and losses were immaterial in each of the years in the three-year period ended December 31, 2019.

For the years ended

December 31, 2019 and 2018, interest expense includes a gain of $ 0.2 million and $ 0.3 million, respectively, relating to an interest

All derivative instruments are

reported as either assets or liabilities on the balance sheet measured at fair value.

The valuation of interest rate swaps resulted

in a liability which is included in long-term debt on the accompanying balance sheets.

The valuation of foreign currency forward

exchange contracts at December 31, 2019 and December 31, 2018, resulted in an asset and is included in other current assets on

the accompanying balance sheets.

At December 31, 2019, the

Company had foreign currency contracts in the form of forward exchange contracts with notional amounts of approximately U.S.

$ 18.5 million,

2.7 million and JPY ¥

and losses in derivatives designated as hedges are accumulated in other comprehensive income (loss) and gains and losses in derivatives

not designated as hedges are included in (gain) loss on foreign currency on the accompanying income statements.

Such gains and

losses were immaterial in each of the years in the three-year period ended December 31, 2020.

For the years ended December 31,

2020 and 2019, interest expense includes an immaterial gain and $ 0.2 million, respectively, relating to an interest rate swap.

derivative instruments are reported as either assets or liabilities on the balance sheet measured at fair value.

The valuation

of interest rate swaps resulted in a liability which is included in long-term debt on the accompanying balance sheets.

The valuation

of foreign currency forward exchange contracts at December 31, 2020 and December 31, 2019, resulted in an asset and is included

in other current assets on the accompanying balance sheets.

December 31, 2020, the Company had foreign currency contracts in the form of forward exchange contracts with notional amounts

of approximately U.S.

$ 22.4 million and GB £

1.9 million, which all have maturities of less than one year.

INTER PARFUMS, INC.

PARFUMS, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2019, 2018 and 2017

(In thousands except share and per share

(6) Equipment and Leasehold Improvements

Consolidated Financial Statements

31, 2020, 2019 and 2018

(In thousands

except share and per share data)

(7) Equipment

and Leasehold Improvements

Leasehold improvements

Less accumulated depreciation and amortization

Depreciation and amortization

expense was $ 3.7 million, $ 4.1 million and $ 3.8 million in 2019, 2018, and 2017, respectively.

(7) Trademarks, Licenses and Other Intangible Assets

and amortization expense was $ 3.8 million, $ 3.7 million and $ 4.1 million in 2020, 2019, and 2018, respectively.

(8) Trademarks,

Licenses and Other Intangible Assets

Trademarks (indefinite lives)

6 unchanged sentences

Other intangible assets (finite lives)

Amortization expense was $ 5.0

million, $ 7.0 million and $ 6.0 million in 2019, 2018 and 2017, respectively.

Amortization expense is expected to approximate $ 5.3

million in 2020 and 2021, $ 3.8 million in 2022 and 2023 and $ 3.6 million in 2024.

The weighted average amortization period for

trademarks, licenses and other intangible assets with finite lives are 18 years, 15 years and 2 years, respectively, and 14 years

INTER PARFUMS, INC.

expense was $ 5.3 million, $ 5.0 million and $ 7.0 million in 2020, 2019 and 2018, respectively.

Amortization expense is expected

to approximate $ 5.4 million in 2021, $ 3.8 million in 2022 and 2023, and $ 3.7 million in 2024 and 2025.

The weighted average amortization

period for trademarks, licenses and other intangible assets with finite lives are 18 years, 15 years and 2 years, respectively,

and 14 years on average.

PARFUMS, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2019, 2018 and 2017

(In thousands except share and per share

The Company reviews intangible

assets with indefinite lives for impairment whenever events or changes in circumstances indicate that the carrying amount may not

be recoverable.

In 2017, the Company set in motion a plan to discontinue some of its mass market product lines.

As a result, the

Company recorded an impairment loss of $ 2.1 million as of December 31, 2017.

There were no impairment charges for trademarks

with indefinite useful lives in 2019 and 2018.

The fair values used in our evaluations are estimated based upon discounted future

cash flow projections using a weighted average cost of capital of 7.94 %, 6.21 %, 6.22 % as of December 31, 2019, 2018 and 2017, respectively.

The cash flow projections are based upon a number of assumptions, including, future sales levels and future cost of goods and operating

expense levels, as well as economic conditions, changes to our business model or changes in consumer acceptance of our products

which are more subjective in nature.

The Company believes that the assumptions it has made in projecting future cash flows for

the evaluations described above are reasonable and currently no other impairment indicators exist for our indefinite-lived assets.

However, if future actual results do not meet our expectations, the Company may be required to record an impairment charge, the

amount of which could be material to our results of operations.

of trademarks, licenses and other intangible assets with finite lives is being amortized by the straight-line method over the

term of the respective license or the intangible assets estimated useful life which range from three to twenty years .

If the residual

value of a finite life intangible asset exceeds its carrying value, then the asset is not amortized.

The Company reviews intangible

assets with finite lives for impairment whenever events or changes in circumstances indicate that the carrying amount may not

be recoverable.

Trademarks (finite lives) primarily represent Lanvin brand names and trademarks and in connection with their purchase, Lanvin was granted the right to repurchase the brand names and trademarks in 2025 for the greater of €

70 million (approximately $ 79 million) or one times the average of the annual sales for the years ending December 31, 2023 and 2024 (residual value).

Because the residual value of the intangible asset exceeds its carrying value, the asset is not being amortized.

(8) Accrued Expenses

Accrued expenses consist of the

Consolidated Financial Statements

31, 2020, 2019 and 2018

(In thousands

except share and per share data)

Company reviews intangible assets with indefinite lives for impairment whenever events or changes in circumstances indicate

that the carrying amount may not be recoverable.

There were no impairment charges for trademarks with indefinite useful lives

in 2020, 2019 and 2018.

The fair values used in our evaluations are estimated based upon discounted future cash flow

projections using a weighted average cost of capital of 6.99 %, 7.94 %, and 6.21 % as of December 31, 2020, 2019 and 2018,

respectively.

The cash flow projections are based upon a number of assumptions, including, future sales levels and future

cost of goods and operating expense levels, as well as economic conditions, changes to our business model or changes in

consumer acceptance of our products which are more subjective in nature.

The Company believes that the assumptions it has

made in projecting future cash flows for the evaluations described above are reasonable and currently no other impairment

indicators exist for our indefinite-lived assets.

However, if future actual results do not meet our expectations, the Company

may be required to record an impairment charge, the amount of which could be material to our results of

cost of trademarks, licenses and other intangible assets with finite lives is being amortized by the straight - line

method over the term of the respective license or the intangible assets estimated useful life which range from three to twenty

If the residual value of a finite life intangible asset exceeds its carrying value, then the asset is not amortized.

Company reviews intangible assets with finite lives for impairment whenever events or changes in circumstances indicate that the

carrying amount may not be recoverable.

(finite lives) primarily represent Lanvin brand names and trademarks and in connection with their purchase, Lanvin was granted

the right to repurchase the brand names and trademarks in 2025 for the greater of € 70 million (approximately $ 86 million)

or one times the average of the annual sales for the years ending December 31, 2023 and 2024 (residual value).

Because the residual

value of the intangible asset exceeds its carrying value, the asset is not being amortized.

expenses consist of the following:

Advertising liabilities

3 unchanged sentences

Refund (return) liability

(9) Loans Payable –

Loans payable –

banks consist

of the following:

The Company and its domestic

subsidiaries have available a $ 20 million unsecured revolving line of credit due on demand, which bears interest at the daily one-month

LIBOR plus 2 % (the one-month LIBOR was 1.76 % as of December 31, 2019).

The line of credit which has a maturity date of December 18,

2020 is expected to be renewed on an annual basis.

Borrowings outstanding pursuant to lines of credit were zero as of December

31, 2019 and 2018.

The Company’s foreign subsidiaries

Payable – Banks

payable – banks consist of

the following:

Company and its domestic subsidiaries have available a $ 20 million unsecured revolving line of credit due on demand, which bears

interest at the daily one-month LIBOR plus 2 % (the one-month LIBOR was 0.14 % as of December 31, 2020).

The line of credit which

has a maturity date of December 18, 2021 is expected to be renewed on an annual basis.

Borrowings outstanding pursuant to

lines of credit were zero as of December 31, 2020 and 2019.

Company ’ s foreign subsidiaries

have available credit lines, including several bank overdraft facilities totaling approximately $ 31 million.

1 unchanged sentence

bear interest at EURIBOR plus between 0.5 % and 0.8 % (EURIBOR was minus 0.546 % at December 31, 2020).

Outstanding amounts were

zero as of December 31, 2019 and 2018.

As there were no borrowings outstanding

as of December 31, 2019 and 2018, there is no weighted average interest rate on short-term borrowings as of December 31, 2019 and

INTER PARFUMS,

Borrowings outstanding

pursuant to these bank overdraft facilities were zero as of December 31, 2020 and 2019.

PARFUMS, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2019, 2018 and 2017

(In thousands except share and per share

(10) Long-term Debt

Long-term debt consists of the following:

Consolidated Financial Statements

31, 2020, 2019 and 2018

(In thousands

except share and per share data)

there were no borrowings outstanding as of December 31, 2020 and 2019, there is no weighted average interest rate on short-term

borrowings as of December 31, 2020 and 2019.

(11) Long-term

Long-term debt consists

of the following:

$ 15.0 million payable in 14 equal annual installments of $ 1.1 million beginning in January 2020 including interest imputed at 4.1 % per annum

$ 13.4 million term loan amended such that the loan was repaid in February 2021 plus interest at 0.85 % per annum

$ 111.0 million 5-year term loan payable in 20 equal quarterly installments plus interest at 1.2 % per annum

Less current maturities

The $ 111.0 million 5 -year term

loan requires the maintenance of certain financial covenants, tested semi-annually, including a maximum leverage ratio and a minimum

interest coverage ratio.

The facility also contains new debt restrictions among other standard provisions.

The Company is in compliance

with all of the covenants and other restrictions of the debt agreements.

In order to reduce exposure to rising variable interest

rates, the Company entered into a swap transaction effectively exchanging the variable interest rate to a fixed rate of approximately

The swap is a derivative instrument and is therefore recorded at fair value and changes in fair value are reflected in the

accompanying consolidated statements of income.

Maturities of long-term debt subsequent to December 31, 2019 are approximately

$ 12.3 million in 2020 and $ 1.1 million per year thereafter through 2033.

June 2020, in connection with the acquisition of 25 % of Divabox ’ s

capital, the Company entered into a $ 13.4 million term loan, which has been amended such that the loan was repaid in full in February

2021, bearing interest at 0.85 %.

This loan requires the maintenance of certain financial covenants, tested annually, including

a maximum coverage ratio.

The Company is in compliance with all the covenants of the loan agreement.

Maturities of long-term debt

subsequent to December 31, 2020 are approximately $ 14.6 million in 2020 and $1.1 million per year thereafter through 2033.

(12) Commitments

The Company leases its offices

and warehouses, vehicles, and certain office equipment, substantially all of which are classified as operating leases.

Company leases its offices, warehouses and vehicles, substantially all of which are classified as operating leases.

currently has no material financing leases.

The Company determines if an arrangement is a lease at inception.

Operating lease assets

and obligations are recognized at the lease commencement date based on the present value of lease payments over the lease term.

In determining lease asset value,

the Company considers fixed or variable payment terms, prepayments, incentives, and options to extend or terminate, depending on

Renewal, termination or purchase options affect the lease term used for determining lease asset value only if the option

is reasonably certain to be exercised.

The Company generally uses its incremental borrowing rate based on information available

at the lease commencement date for the location in which the lease is held in determining the present value of lease payments.

As of December 31, 2019, the

weighted average remaining lease term was 6.6 years and the weighted average discount rate used to determine the operating lease

liability was 2.8 %.

Rental expense related to operating leases was $ 7.5 million, $ 7.0 million, and $ 6.5 million for the years ended

December 31, 2019, 2018 and 2017, respectively.

Operating lease payments included in operating cash flows totaled $ 6.0 million

and noncash additions to operating lease assets totaled $ 34.9 million.

INTER PARFUMS, INC.

Operating lease

assets and obligations are recognized at the lease commencement date based on the present value of lease payments over the lease

determining lease asset value, the Company considers fixed or variable payment terms, prepayments, incentives, and options to

extend or terminate, depending on the lease.

Renewal, termination or purchase options affect the lease term used for determining

lease asset value only if the option is reasonably certain to be exercised.

The Company generally uses its incremental borrowing

rate based on information available at the lease commencement date for the location in which the lease is held in determining

the present value of lease payments.

of December 31, 2020, the weighted average remaining lease term was 5.3 years and the weighted average discount rate used to determine

the operating lease liability was 3.0 %.

Rental expense related to operating leases was $ 6.2 million, $ 7.5 million, and $ 7.0 million

for the years ended December 31, 2020, 2019 and 2018, respectively.

Operating lease payments included in operating cash flows

totaled $ 5.6 million and noncash additions to operating lease assets totaled $ 1.1 million.

PARFUMS, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2019, 2018 and 2017

(In thousands except share and per share

Maturities of lease liabilities

subsequent to December 31, 2019 are as follows:

Consolidated Financial Statements

31, 2020, 2019 and 2018

(In thousands

Less imputed interest (based on 2.8%

weighted-average discount rate)

except share and per share data)

of lease liabilities subsequent to December 31, 2020 are as follows:

(In thousands)

imputed interest (based on 3.0% weighted-average discount rate)

License Agreements

The Company is

party to a number of license and other agreements for the use of trademarks and rights in connection with the manufacture and

sale of its products expiring at various dates through 2033.

Company is party to a number of license and other agreements for the use of trademarks and rights in connection with the manufacture

and sale of its products expiring at various dates through 2033.

In connection with certain of these license agreements, the Company

is subject to minimum annual advertising commitments, minimum annual royalties and other commitments as follows:

(In thousands)

Future advertising commitments

are estimated based on planned future sales for the license terms that were in effect at December 31, 2019, without consideration

for potential renewal periods.

The above figures do not reflect the fact that our distributors share our advertising obligations.

Royalty expense included in selling, general, and administrative expenses, aggregated $ 53.0 million, $ 48.9 million and $ 39.6 million,

in 2019, 2018 and 2017, respectively, and represented 7.4 %, 7.2 % and 6.7 % of net sales for the years ended December 31, 2019, 2018

and 2017, respectively.

INTER PARFUMS, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2019, 2018 and 2017

(In thousands except share and per share

advertising commitments are estimated based on planned future sales for the license terms that were in effect at December 31,

2020, without consideration for potential renewal periods.

The above figures do not reflect the fact that our distributors share

our advertising obligations.

Royalty expense included in selling, general, and administrative expenses, aggregated $ 41.1 million,

$ 53.0 million and $ 48.9 million, in 2020, 2019 and 2018, respectively, and represented 7.6 %, 7.4 % and 7.2 % of net sales for the

years ended December 31, 2020, 2019 and 2018, respectively.

Share-Based Payments

The Company maintains a stock option program for key employees, executives and directors.

The plans, all of which have been

approved by shareholder vote, provide for the granting of both nonqualified and incentive options.

Options granted under the plans

typically have a six-year term and vest over a four to five-year period.

The fair value of shares vested aggregated $ 1.4 million

and $ 1.1 million in 2019 and 2018, respectively.

Compensation cost, net

of estimated forfeitures, is recognized on a straight-line basis over the requisite service period for the entire award.

are estimated based on historic trends.

It is generally the Company’s policy to issue new shares upon exercise of

stock options.

The following

table sets forth information with respect to nonvested options for 2019:

Company maintains a stock option program for key employees, executives and directors.

The plans, all of which have been approved

by shareholder vote, provide for the granting of both nonqualified and incentive options.

Options granted under the plans typically

have a six-year term and vest over a four to five-year period.

The fair value of shares vested aggregated $ 1.7 million and $ 1.4

million in 2020 and 2019, respectively.

Compensation cost, net of estimated forfeitures, is recognized on a straight-line basis

over the requisite service period for the entire award.

Forfeitures are estimated based on historic trends.

It is generally the

Company ’ s policy to issue

new shares upon exercise of stock options.

PARFUMS, INC.

AND SUBSIDIARIES

Consolidated Financial Statements

31, 2020, 2019 and 2018

(In thousands

except share and per share data)

following table sets forth information with respect to nonvested options for 2020:

Number of Shares

Weighted Average Grant Date Fair Value Grant

Nonvested options –

beginning of year

Weighted Average Grant

Date Fair Value

Nonvested options – beginning of year

Nonvested options granted

Nonvested options vested or forfeited

Nonvested options –

Nonvested options – end of year

effect of share-based payment expenses decreased income statement line items as follows:

Year Ended December 31,

Income before income taxes

Net income attributable to Inter Parfums, Inc.

Diluted earnings per share attributable to Inter Parfums, Inc.

The following

table summarizes stock option activity and related information for the years ended December 31, 2019, 2018 and 2017:

Year ended December 31,

Weighted Average Exercise Price

Shares under option - beginning of year

Options granted

Options exercised

Options forfeited

Shares under option - end of year

INTER PARFUMS, INC.

Ended December 31,

Income before

Net income attributable

to Inter Parfums, Inc.

Diluted earnings per

share attributable to Inter Parfums, Inc.

following table summarizes stock option activity and related information for the years ended December 31, 2020, 2019 and 2018:

ended December 31,

under option - beginning of year

under option - end of year

December 31, 2020, options for 580,715 shares were available for future grant under the plans.

The aggregate intrinsic value of

options outstanding is $ 8.7 million as of December 31, 2020 and unrecognized compensation cost related to stock options outstanding

aggregated $ 4.4 million, which will be recognized over the next five years .

PARFUMS, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2019, 2018 and 2017

(In thousands except share and per share

31, 2019, options for 573,695 shares were available for future grant under the plans.

The aggregate intrinsic value of options

outstanding is $ 18.7 million as of December 31, 2019 and unrecognized compensation cost related to stock options outstanding aggregated

$ 6.0 million, which will be recognized over the next five years .

average fair values of options granted by Inter Parfums, Inc.

during 2019, 2018 and 2017 were $ 14.14 , $ 14.31 and $ 9.82 per share,

respectively, on the date of grant using the Black-Scholes option pricing model to calculate the fair value.

The assumptions

used in the Black-Scholes pricing model are set forth in the following table:

Year Ended December 31,

Weighted-average expected stock-price volatility

Weighted-average expected option life

Weighted-average risk-free interest rate

Weighted-average dividend yield

Expected volatility

is estimated based on historic volatility of the Company’s common stock.

The expected term of the option is estimated based

on historic data.

Consolidated Financial Statements

31, 2020, 2019 and 2018

(In thousands

except share and per share data)

weighted average fair values of options granted by Inter Parfums, Inc.

during 2020, 2019 and 2018 were $ 12.16 , $ 14.14 and $ 14.31

per share, respectively, on the date of grant using the Black-Scholes option pricing model to calculate the fair value.

assumptions used in the Black-Scholes pricing model are set forth in the following table:

Ended December 31,

Weighted-average

expected stock-price volatility

Weighted-average expected

Weighted-average risk-free

interest rate

Weighted-average dividend

volatility is estimated based on historic volatility of the Company ’ s

common stock.

The expected term of the option is estimated based on historic data.

The risk-free rate is based on the U.S.

Treasury yield curve in effect at the time of the grant of the option

and the dividend yield reflects the assumption that the dividend payout as authorized by the Board of Directors would maintain

its current payout ratio as a percentage of earnings.

yield curve in effect at the time of the grant of the option and the dividend yield reflects the assumption that the dividend

payout as authorized by the Board of Directors would maintain its current payout ratio as a percentage of earnings.

tax benefits and intrinsic value related to stock options exercised were as follows:

Year Ended December 31,

Proceeds from stock options exercised

Intrinsic value of stock options exercised

INTER PARFUMS, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2019, 2018 and 2017

(In thousands except share and per share

The following

table summarizes additional stock option information as of December 31, 2019:

Ended December 31,

from stock options exercised

Intrinsic value of stock

options exercised

following table summarizes additional stock option information as of December 31, 2020:

Options outstanding

3 unchanged sentences

$ 40.15 - $ 46.90

$ 32.83 - $ 33.95

$ 40.15 - $ 46.90

$ 65.25 -$ 66.46

As of December 31, 2019, the weighted average exercise price of options exercisable was $ 35.05 and the weighted average

remaining contractual life of options exercisable is 2.62 years.

PARFUMS, INC.

AND SUBSIDIARIES

Consolidated Financial Statements

31, 2020, 2019 and 2018

(In thousands

except share and per share data)

of December 31, 2020, the weighted average exercise price of options exercisable was $ 43.35 and the weighted average remaining

contractual life of options exercisable is 2.63 years.

The aggregate intrinsic value of options exercisable at December 31, 2020

is $ 6.9 million.

In September 2016, Interparfums

SA, our 73 % owned French subsidiary, approved a plan to grant an aggregate of 15,100 shares of its stock to employees with no performance

condition requirement, and an aggregate of 133,000 shares to officers and managers, subject to certain corporate performance conditions.

The corporate performance conditions were met and therefore in September 2019, 172,851 shares, adjusted for stock splits, were

The aggregate cost of the grant of approximately $ 3.9 million was recognized as compensation cost on a straight-line

basis over the requisite three-year service period.

In December 2018, Interparfums

SA approved an additional plan to grant an aggregate of 26,600 shares of its stock to employees with no performance condition requirement,

and an aggregate of 133,000 shares to officers and managers, subject to certain corporate performance conditions.

The shares, subject

to adjustment for stock splits, will be distributed in June 2022 and will follow the same guidelines as the September 2016 plan.

The fair value of the grant has

been determined based on the quoted stock price of Interparfums SA shares as reported by the NYSE Euronext on the date of grant.

The estimated number of shares to be distributed of 142,379 has been determined taking into account employee turnover.

The aggregate

cost of the grant of approximately $ 4.4 million will be recognized as compensation cost on a straight-line basis over the requisite

three and a half year service period.

Similar to the September 2016

plan, in order to avoid dilution of the Company’s ownership of Interparfums SA, all shares distributed or to be distributed

pursuant to these plans will be pre-existing shares of Interparfums SA, purchased in the open market by Interparfums SA.

the year ended December 31, 2019, the Company acquired 131,613 shares at an aggregate cost of $5.8 million.

All share purchases and issuances

have been classified as equity transactions on the accompanying balance sheet.

INTER PARFUMS, INC.

September 2016, Interparfums SA, our 73 % owned French subsidiary, approved a plan to grant an aggregate of 15,100 shares of its

stock to employees with no performance condition requirement, and an aggregate of 133,000 shares to officers and managers, subject

to certain corporate performance conditions.

The corporate performance conditions were met and therefore in September 2019, 172,851

shares, adjusted for stock splits, were distributed.

The aggregate cost of the grant of approximately $ 3.9 million was recognized

as compensation cost on a straight-line basis over the requisite three-year service period.

December 2018, Interparfums SA approved an additional plan to grant an aggregate of 26,600 shares of its stock to employees with

no performance condition requirement, and an aggregate of 133,000 shares to officers and managers, subject to certain corporate

performance conditions.

The shares, subject to adjustment for stock splits, will be distributed in June 2022 and will follow the

same guidelines as the September 2016 plan.

March 2020, due to the potential impact on future net sales and operating results resulting from the COVID-19 pandemic, the estimated

number of shares to be distributed, after forfeited shares, was reduced from 142,571 to 82,162.

As the Company

had already purchased shares in contemplation of the higher anticipated distribution, shares purchased in excess of the reduced

anticipated distribution were transferred to treasury shares at the Interparfums SA level.

fair value of the grant had been determined based on the quoted stock price of Interparfums SA shares as reported by the NYSE

Euronext on the date of grant.

The original cost of the grant was approximately $4.4 million, and the March 2020 revaluation

resulted in a reduction of the cost, to approximately $2.5 million.

As a result, a $ 0.3 million reduction of cost, net,

was recorded for the three months ended March 31, 2020.

June 2020, the performance conditions were modified affecting 96 employees.

As of December 31, 2020, the number of shares to be

distributed, after forfeited shares, increased to 132,032 .

The increase in shares anticipated to be distributed were transferred

from treasury shares at the Interparfums SA level.

The modification resulted in a revised cost of the grant to approximately $ 3.8 million.

order to avoid dilution of the Company ’ s

ownership of Interparfums SA, all shares distributed or to be distributed pursuant to these plans are pre-existing shares of Interparfums

SA, purchased in the open market by Interparfums SA.

share purchases and issuances have been classified as equity transactions on the accompanying balance sheet.

October 2019, our Board of Directors authorized a 20 % increase in the annual dividend to $ 1.32 per share on an annual basis.

April 2020, as a result of the uncertainties raised by the COVID-19 pandemic, the Board of Directors authorized a temporary suspension

of the annual cash dividend.

In February 2021, the Board of Directors authorized a reinstatement of an annual dividend of $ 1.00

payable quarterly.

The next quarterly cash dividend of $ 0.25 per share is payable on March 31, 2021 to shareholders of record

on March 15, 2021.

PARFUMS, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2019, 2018 and 2017

(In thousands except share and per share

In October 2019, the Board of Directors of the Company authorized a 20 % increase in the annual dividend to $ 1.32 per share.

The quarterly dividend aggregating approximately $ 10.4 million ($ 0.33 per share) declared in December 2019 was paid in January 2020.

The next quarterly dividend of $ 0.33 per share will be paid on April 15, 2020 to shareholders of record on March 31, 2020.

(13) Net Income Attributable to Inter Parfums, Inc.

Consolidated Financial Statements

31, 2020, 2019 and 2018

(In thousands

except share and per share data)

Income Attributable to Inter Parfums, Inc.

Common Shareholders

Net income attributable to Inter

Parfums, Inc.

per common share (“basic EPS”) is computed by dividing net income attributable to Inter Parfums, Inc.

income attributable to Inter Parfums, Inc.

per common share ( “ basic

EPS ” ) is computed by dividing net income attributable to

Inter Parfums, Inc.

by the weighted average number of shares outstanding.

Net income attributable to Inter Parfums, Inc.

per share assuming dilution

(“diluted EPS”), is computed using the weighted average number of shares outstanding, plus the incremental shares outstanding

assuming the exercise of dilutive stock options using the treasury stock method.

The reconciliation between the

numerators and denominators of the basic and diluted EPS computations is as follows:

per share assuming dilution ( “ diluted EPS ” ),

is computed using the weighted average number of shares outstanding, plus the incremental shares outstanding assuming the exercise

of dilutive stock options using the treasury stock method.

reconciliation between the numerators and denominators of the basic and diluted EPS computations is as follows:

Year ended December 31,

5 unchanged sentences

Earnings per share:

Net income attributable to Inter Parfums, Inc.

Net income attributable to Inter

Parfums, Inc.

common shareholders:

in the above computations is the effect of anti-dilutive potential common shares, which consist of outstanding options to purchase

183,000 , 89,000 , and 165,000 shares of common stock for 2019, 2018, and 2017, respectively.

(14) Segments and Geographic Areas

manufactures and distributes one product line, fragrances and fragrance

What changed 10-K

Item 9A. Controls and Procedures