INTERPARFUMS INC 10-K

Item 9A. Controls and Procedures. Evaluation of Disclosure Controls and Procedures Our Chief Executive Officer and Chief Financial 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 Financial Reporting The management of Inter Parfums, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13(a)-15(f) under the Securities Exchange Act of 1934. With the participation of the Chief Executive Officer and the Chief Financial Officer, 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 Organizations of the Treadway Commission. Based on this evaluation, our management has concluded that our internal control over financial reporting was effective as of December 31, 2019. Our independent auditor, Mazars USA LLP, a registered public accounting firm, has issued its report on its audit of our internal control over financial reporting. This report appears on page F-2. Changes in Internal Control Over Financial Reporting There has been no change in our internal 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 2020 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. Item 9B. Other Information. None. 42 PART III Item 10. Directors, Executive Officers and Corporate Governance Executive Officers and Directors As of the date of this report, our executive officers and directors were as follows: Name Position Jean Madar Chairman of the Board, Chief Executive Officer of Inter Parfums, Inc. and Director General of Interparfums SA Philippe Benacin Vice Chairman of the Board, President of Inter Parfums, Inc. and Chief Executive Officer of Interparfums SA Russell Greenberg Director, Executive Vice President and Chief Financial Officer Philippe Santi Director, Executive Vice President and Chief Financial Officer, Interparfums SA François Heilbronn Director Robert Bensoussan Director Patrick Choël Director Michel Dyens Director Veronique Gabai-Pinsky Director Gilbert Harrison Director 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. Messrs. 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. 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 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.: 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. 43 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. 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. ● 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. Heilbronn and Choël, and Ms. Gabai-Pinsky. 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 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 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. Mr. 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. Mr. 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. Philippe Benacin Mr. 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. Madar. 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. Mr. Benacin graduated from The French University for Economic and Commercial Sciences (ESSEC) in 1983. 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. We believe that Mr. 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. 44 Russell Greenberg Mr. 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; 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. 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. Philippe Santi Philippe Santi, age 59 and a Director since December 1999, is the Executive Vice President and Chief Financial Officer of Interparfums SA. Mr. 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. 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. Francois Heilbronn Mr. 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. from 1988 through 1992 as a manager. Mr. 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. 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. Mr. Bensoussan is the founder of Sirius Equity Consultants, a retail and branded luxury goods Investment Company. To date, Mr. 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 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. 45 Patrick Choël Mr. 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. Mr. 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, 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 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. With 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. Michel Dyens & Co. 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. 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. Ltd. 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. From April 2004 to September 2014, Mr. Dyens 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. Veronique Gabai-Pinsky Ms. 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 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. During her tenure, Ms. 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. 46 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. Ms. 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. Gilbert Harrison Mr. Harrison, age 80, an independent director, was appointed to our board in April 2018. Mr. 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. Mr. 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. Mr. 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. He also appears frequently on Bloomberg TV and CNBC as an expert on retail and apparel. Mr. 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. 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. 47 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. Item 11. Executive Compensation Compensation Discussion and Analysis General 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. Mr. 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. Mr. 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. Messrs. 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. 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. 48 Elements of Compensation General 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. 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 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. The members of the compensation committee have extensive experience and business acumen and are well qualified in determining the appropriateness of executive compensation levels. Mr. 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. Mr. 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. Mr. Choël has also been President and CEO of both Elida Fabergé France and Chesebrough Pond’s USA. Ms. 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 Salary 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. 49 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. 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. Benacin. 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 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. Mr. 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. As Mr. 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. For 2020, each of Messrs. 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 $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 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. 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. 50 For each of 2019 and 2018, 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. Madar in his capacity as Chief Executive Officer. 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. 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. Therefore, 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 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 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. 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. For 2020 Mr. Benacin, the chief decision maker for European operations, proposed and the compensation committee concurred in the payment of discretionary bonus compensation of $131,000. 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 $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 Mr. Greenberg his bonuses: his individual performance, level of responsibility, skill and experience, as well as the recommendation of the Chief Executive Officer. 51 Mr. 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 expenses. 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. 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. 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. 52 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 SA level. The modification resulted in a revised cost of the grant to approximately $3.8 million. Messrs. 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 strategy. 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. For 2019 Mr. 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. Retirement and Pension Plans We 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 2020. 2019 and 2018, each of Messrs. Benacin, Santi and Garcia-Pelayo received an increase of $17,500, $16,789 and $20,646, respectively, in their value of deferred compensation earnings. 53 Compensation Committee Report We have reviewed and discussed with management the Compensation Discussion and Analysis provisions to be included in this Annual Report on Form 10-K for fiscal year ended December 31, 2020 and the proxy statement for the upcoming annual meeting of shareholders. Based on this review and discussion, we recommend to the board of directors that the Compensation Discussion and Analysis referred to above be included in this Annual Report on Form 10-K as well as the proxy statement for the upcoming annual meeting of shareholders. Francois Heilbronn Patrick Choël and Veronique Gabai-Pinsky The following table sets forth a summary of all compensation awarded to, earned by or paid to our “named executive officers,” who are our principal executive officer, our principal financial officer, and each of the three most highly compensated executive officers of our company. This table covers all such compensation during fiscal years ended December 31, 2020, December 31, 2019 and December 31, 2018. For all compensation related matters disclosed in the summary compensation table, and elsewhere where applicable, all amounts paid in euro have been converted to U.S. dollars at the average rate of exchange in each year. SUMMARY COMPENSATION TABLE Name and Principal Position Year Salary ($) Bonus ($) Stock Awards ($) Option Awards ($)(1) Non-Equity Incentive Plan Compensation ($)(2) Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) All Other Compensation ($)(3) Total ($) Jean Madar, 2020 1,230,000 -0- -0- -0- -0- -0- -0- 1,230,000 Chairman and 2019 630,000 -0- 138,320 353,092 -0- -0- -0- 1,121,412 Chief Executive Officer 2018 630,000 -0- -0- 364,638 -0- -0- -0- 994,638 Russell Greenberg, 2020 720,000 35,000 -0- -0- -0- -0- -0- 755,000 Chief Financial Officer and 2019 690,000 50,000 34,580 353,092 -0- -0- -0- 1,127,672 Executive Vice President 2018 660,000 50,000 -0- 364,638 -0- -0- -0- 1,074,638 Philippe Benacin, President Inter 2020 788,808 130,673 -0- -0- -0- 17,500 12,434 949,415 Parfums, Inc., Chief Executive 2019 760,583 109,731 138,320 353,092 -0- 16,789 12,093 1,390,608 Officer of Interparfums SA 2018 774,408 112,205 -0- 364,638 -0- 20,646 12,756 1,284,653 Philippe Santi, Executive Vice 2020 469,730 295,596 -0- -0- -0- 17,500 -0- 782,826 President and Chief Financial 2019 443,401 323,593 138,320 141,237 34,028 16,789 -0- 1,097,368 Officer, Interparfums SA 2018 453,542 330,708 -0- 189,082 33,130 20,646 -0- 1,027,108 Frédéric Garcia-Pelayo, 2020 469,730 295,596 -0- -0- -0- 17,500 8,980 791,806 Executive Vice President and 2019 443,401 323,593 138,320 141,237 34,028 16,789 8,734 1,106,102 Chief Operating Officer Interparfums SA 2018 453,542 330,708 -0- 189,082 33,130 20,646 9,213 1,036,321 1 Amounts 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. 2 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 are allocated to employees based upon salary. The maximum amount payable per year is approximately $38,000. 54 Calculation of total annual benefits contribution is made according to the following formula: 67% of (Interparfums SA net income, less 2.5% of shareholders equity without net income for the year) times a fraction, the numerator of which is wages, and the denominator of which is net income before tax + wages + taxes (other than income tax) + valuation allowances + amortization expenses + interest expenses. Contribution to individual employees is then made pro rata based upon their individual salaries for the year. 3 The following table identifies (i) perquisites and other personal benefits provided to our named executive officers in fiscal 2020, and quantifies those required by SEC rules to be quantified and (ii) all other compensation that is required by SEC rules to be separately identified and quantified. Name and Principal Position Perquisites and other Personal Benefits ($) Personal Automobile Expense ($) Lodging Expense ($) Total ($) Jean Madar, Chairman Chief Executive Officer -0- -0- -0- -0- Russell Greenberg, Chief Financial Officer and Executive Vice President -0- -0- -0- -0- Philippe Benacin, President of Inter Parfums, Inc. and Chief Executive Officer of Interparfums SA -0- 12,434 -0- 12,434 Philippe Santi, Executive Vice President and Chief Financial Officer, Interparfums SA -0- -0- -0- -0- Frédéric Garcia-Pelayo, Executive Vice President and Chief Operating Officer, Interparfums SA -0- 8,980 -0- 8,980 Plan Based Awards No stock options were granted to the executive officers of our company listed in the Summary Compensation Table during the past fiscal year. Interparfums SA Stock Compensation Plan. No options were granted by Interparfums SA to the executive officers of our company listed in the Summary Compensation Table during the past fiscal year. Interparfums SA Profit Sharing Plan Also as discussed above and required by French law, Inter Parfums, 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 Inter Parfums, 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 $38,000. 55 Outstanding Equity Awards at Fiscal Year-End The following table sets forth certain information relating to outstanding equity awards of our Company held by the executive officers listed in the Summary Compensation Table as of December 31, 2020. Option Awards Name Number of Securities Underlying Unexercised Options (#) Exercisable (1) Number of Securities Underlying Unexercised Options (#) Unexercisable Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) Option Exercise Price ($) Option Expiration Date Jean Madar 19,000 -0- -0- 23.605 12/30/21 15,200 3,800 -0- 32.825 12/30/22 15,000 (2) 10,000 (2) -0- 43.80 12/29/23 10,000 (2) 15,000 (2) -0- 65.25 12/30/24 5,000 (2) 20,000 (2) -0- 73.09 12/30/25 Russell Greenberg 25,000 -0- -0- 23.605 12/30/21 20,000 5,000 -0- 32.825 12/30/22 15,000 10,000 -0- 43.80 12/29/23 10,000 15,000 -0- 65.25 12/30/24 5,000 20,000 -0- 73.09 12/30/25 Philippe Benacin 19,000 -0- -0- 23.605 12/30/21 15,200 3,800 -0- 32.825 12/30/22 15,000 (2) 10,000 (2) -0- 43.80 12/29/23 10,000 (2) 15,000 (2) -0- 65.25 12/30/24 5,000 (2) 20,000 (2) -0- 73.09 12/30/25 Philippe Santi 400 -0- -0- 25.821 1/27/2021 2,400 -0- -0- 23.605 12/30/21 2,400 1,200 -0- 32.825 12/30/22 2,400 2,400 -0- 43.80 12/29/23 1,600 2,400 -0- 46.903 1/18/24 4,000 6,000 -0- 65.25 12/30/24 2,000 8,000 -0- 73.09 12/30/25 Frédéric Garcia-Pelayo 400 -0- -0- 25.821 1/27/2021 2,400 -0- -0- 23.605 12/30/21 2,400 1,200 -0- 32.825 12/30/22 2,400 2,400 -0- 43.80 12/29/23 1,600 2,400 -0- 46.903 1/18/24 4,000 6,000 -0- 65.25 12/30/24 2,000 8,000 -0- 73.09 12/30/25 [ Footnotes from table above ] 1 All options expire 6 years from the date of grant, and vest 20% each year commencing one year after the date of grant. 2 Options are held in the name of personal holding company. 56 The following table sets certain information relating to outstanding equity awards granted by Interparfums SA, our majority-owned French subsidiary which has its shares traded on the NYSE Euronext, held by the executive officers of our company listed in the Summary Compensation Table as of the end of the past fiscal year. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END OF INTERPARFUMS SA Option Awards Stock Awards Name Number of Securities Underlying Unexercised Options (#) Exercisable) Number of Securities Underlying Unexercised Options (#) Unexercisable Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) Option Exercise Price ($) Option Expiration Date Number of Shares or Units of Stock that Have Not Vested (#)(1) Market Value of Shares or Units of Stock that Have Not Vested ($) Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#) Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested($) Jean Madar -0- -0- -0- -0- N/A -0- -0- -0- NA Russell Greenberg -0- -0- -0- -0- N/A -0- -0- -0- NA Philippe Benacin -0- -0- -0- -0- N/A 4,840 255,087 -0- NA Philippe Santi -0- -0- -0- -0- N/A 4,840 255,087 -0- NA Frédéric Garcia-Pelayo -0- -0- -0- -0- N/A 4,840 255,087 -0- NA 57 Option Exercises and Stock Vested The following table sets forth certain information relating to each option exercise affected during the past fiscal year, and each vesting of stock, including restricted stock, restricted stock units and similar instruments of our company during the past fiscal year, for the executive officers of our company listed in the Summary Compensation Table. OPTION EXERCISES AND STOCK VESTED Option Awards Stock Awards Name Number of Shares Acquired on Exercise (#) Value Realized on Exercise ($) 1 Number of Shares Acquired on Vesting (#) Value Realized On Vesting ($) Jean Madar 19,000 575,246 0 0 Russell Greenberg 25,000 712,333 0 0 Philippe Benacin 19,000 545,251 0 0 Philippe Santi 1,000 31,308 0 0 Frédéric Garcia-Pelayo 1,000 30,858 0 0 [Footnotes from table above] 1 Total value realized on exercise of options in dollars is based upon the difference between the fair market value of the common stock on the date of exercise, and the exercise price of the option. Regarding Interparfums SA, our majority-owned French subsidiary which has its shares traded on the Euronext, no options were exercised during the past fiscal year, and there was no vesting of stock, including restricted stock, restricted stock units and similar instruments during the past fiscal year, for the executive officers of our company listed in the Summary Compensation Table. 58 Pension Benefits The following table sets forth certain information relating to payment of benefits in connection with retirement plans during the past fiscal year, for the executive officers of our company listed in the Summary Compensation Table. PENSION BENEFITS Name Plan Name Number of Years Credited Service (#) Present Value of Accumulated Benefit* ($) Payments During Last Fiscal Year ($) Jean Madar NA NA -0- -0- Russell Greenberg NA NA -0- -0- Philippe Benacin Inter Parfums SA Pension Plan NA 297,500 17,500 Philippe Santi Inter Parfums SA Pension Plan NA 287,500 17,500 Frédéric Garcia-Pelayo Inter Parfums SA Pension Plan NA 287,500 17,500 * Does not include any contributions made by prior employers, or individually by the recipients as such information is confidential under French law. Interparfums SA maintains a pension plan for all of its employees, including all executive officers. The calculation of commitments for severance benefits involves estimating the probable present value of projected benefit obligations. This projected benefit obligations are then prorated to take into account seniority of the employees of Interparfums SA on the calculation date. In 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%. The normal retirement age is 65 years, but employees, including Messrs. Benacin, Santi and Garcia-Pelayo, can collect reduced benefits if they retire at age 62. 59 Nonqualified Deferred Compensation We do not maintain any nonqualified deferred compensation plans. CEO Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our mean employee and the annual total compensation of Mr. Jean Madar, Chief Executive Officer (the “CEO”): For 2020, our last completed fiscal year: ● 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 This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records. We identified our median employee using our total employee population as of December 31, 2020 by applying a consistently applied compensation measure across our global employee population. For our consistently applied compensation measure, we used all compensation, including actual base salary, bonuses, commissions, and any overtime paid during the 12-month period ending December 31, 2020. We did not use any material estimates, assumptions, adjustments or statistical sampling to determine the worldwide median employee. The 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 and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. Employment and Consulting Agreements As part of our acquisition in 1991 of the controlling interest in Interparfums SA, now a subsidiary, we entered into an employment agreement with Philippe Benacin. The agreement provides that Mr. Benacin will be employed as Vice Chairman of the Board and President and Chief Executive Officer of Inter Parfums Holdings and its subsidiary, Interparfums SA. The initial term expired on September 2, 1992, and has subsequently been automatically renewed for additional annual periods. The agreement provides for automatic annual renewal terms, unless either party terminates the agreement upon 120 days’ notice. For 2020, Mr. Benacin received an annual salary of approximately $539,000, and automobile expenses of approximately $12,500 which are subject to increase in the discretion of the board of directors. The agreement also provides for indemnification and a covenant not to compete for one year after termination of employment. In 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. The agreement also provides for indemnification for Mr. Benacin and his holding company and a covenant not to compete for one year after termination of the agreement. The agreement was for one year, with automatic one year renewals unless either party terminates on 120 days’ notice or Mr. Benacin ceases to be the President of our company. 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. 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. 60 In 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. The agreement also provides for indemnification for Mr. Madar and his holding company and a covenant not to compete for one year after termination of the agreement. The agreement was for one year, with automatic one year renewals unless either party terminates on 120 days’ notice or Mr. Madar ceases 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. Madar in his capacity as Chief Executive Officer. 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 holding company, but not the aggregate amount. The amount of salary paid to Mr. Madar in 2018 was reduced from $380,000 to $160,000, while payments to his holding company were increased by the like amount from $250,000 to $470,000. Therefore, for 2018 total cash compensation for Mr. Madar paid to him and his personal holding company remained unchanged at $630,000. 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 $945,000, effective as of January 1, 2020. In addition, in December 2018 and December 2019, we granted options to purchase 25,000 shares for the benefit of Mr. Madar, which were granted to his personal holding company instead of Mr. Madar directly. Compensation of Directors The following table sets forth certain information relating to the compensation for each of our directors who is not an executive officer of our Company named in the Summary Compensation Table for the past fiscal year. DIRECTOR COMPENSATION Name Fees Earned or Paid in Cash ($) Stock Awards ($) Option Awards ($) Non-Equity Incentive Plan Compensation ($) Change in Pension Value and Nonqualified Deferred Compensation Earnings All Other Compensation ($) 1 Total ($) Francois Heilbronn 2 29,000 -0- 18,237 -0- -0- 33,732 80,969 Robert Bensoussan 3 21,000 -0- 18,237 -0- -0- -0- 39,237 Patrick Choël 4 29,000 -0- 18,237 -0- -0- 5,244 52,481 Michel Dyens 5 21,000 -0- 18,237 -0- -0- -0- 39,237 Veronique Gabai-Pinsky 6 29,000 -0- 18,237 -0- -0- -0- 47,237 Gilbert Harrison 7 71,000 -0- 18,237 -0- -0- -0- 89,237 [Footnotes from table above] 1. Represents gain from exercise of stock options. 2. 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. 3. 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. 4. 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. 5. 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. 6. 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. 7. 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. 61 In 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. We maintain stock option plans for our nonemployee directors. The purpose of these plans is to assist us in attracting and retaining key directors who are responsible for continuing the growth and success of our company. Under such plans, options to purchase 1,500 shares are granted on each February 1st to all nonemployee directors for as long as each is a nonemployee director on such date. However, if a nonemployee director does not attend certain of the board meetings, then such option grants are reduced according to a schedule. In addition, options to purchase 2,000 shares are granted to each nonemployee director upon his or her initial election or appointment to our board, but if such option is granted within six months of the next February 1 automatic grant, then such nonemployee director would not be eligible to receive that February 1 grant. 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. 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. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The following table sets forth information with respect to the beneficial ownership of our common stock by (a) each person we know to be the beneficial owner of more than 5% of our outstanding common stock, (b) our executive officers and directors and (c) all of our directors and officers as a group. Each of Messrs. Madar and Benacin own 99.99% of their respective personal holding companies. As of February 26, 2021 we had 31,635,098 shares of common stock outstanding. Name and Address of Beneficial Owner Amount of Beneficial Ownership 1 Approximate Percent of Class Jean Madar c/o Interparfums SA 4, Rond Point des Champs Elysees 75008 Paris, France 7,113,053 2 22.4 % Philippe Benacin c/o Interparfums SA 4, Rond Point des Champs Elysees 75008 Paris, France 6,906,664 3 22.0 % Russell Greenberg c/o Inter Parfums, Inc. 551 Fifth Avenue New York, NY 10176 75,200 4 Less than 1 % Philippe Santi Interparfums SA 4, Rond Point des Champs Elysees 75008, Paris France 10,800 5 Less than 1 % Francois Heilbronn 60 Avenue de Breteuil 75007 Paris, France 36,688 6 Less than 1 % Robert Bensoussan c/o Sirius Equity LLP 52 Brook Street W1K 5DS London 9,125 7 Less than 1 % 62 Patrick Choël 140 Rue de Grenelle 75007, Paris, France 5,125 8 Less than 1 % Michel Dyens Michel Dyens & Co. 17 Avenue Montaigne 75008 Paris, France 5,625 9 Less than 1 % Veronique Gabai-Pinsky Vera Wang 15 E. 26 th Street New York NY 10010 2,375 10 Less than 1 % Gilbert Harrison Harrison Group 745 Fifth Avenue, Suite 514 New York, NY 10151 1,875 11 Less than 1 % Frederic Garcia-Pelayo Interparfums SA 4, Rond Point des Champs Elysees 75008, Paris France 10,800 12 Less than 1 % Blackrock, Inc. 55 East 52 nd Street New York, NY 10055 2,682,141 13 8.4 % The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355 1,919,970 14 6.1 % Ameriprise Financial, Inc. 145 Ameriprise Financial Center Minneapolis, MN 55474 1,891,241 15 6.0 % All Directors and Officers (As a Group 10 Persons) 14,151,650 16 44.7 % 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 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. 3 Consists of 6,846,064 shares held indirectly through Philippe Benacin Holding SAS, a personal holding company, and options to purchase 60,600 shares. 4 Consists of shares 7,500 shares held directly and options to purchase 75,000 shares. 5 Consists of options to purchase shares. 6 Consists of 34,063 shares held directly and options to purchase 2,625 shares. 7 Consists of 6,500 shares held directly and options to purchase 2,625 shares. 8 Consists of 3,250 shares held directly and options to purchase 1,875 shares. 9 Consists of 3,000 shares held directly and options to purchase 2,625 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 5 of Blackrock, Inc. dated January29, 2021 as filed with the Securities and Exchange Commission. 14 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. AFI disclaims beneficial ownership of any shares reported on this Schedule 13G. 15 Consists of 13,952,830 shares held directly or indirectly, and options to purchase 235,400 shares. 63 The following table sets forth certain information as of the end of our last fiscal year regarding all equity compensation plans that provide for the award of equity securities or the grant of options, warrants or rights to purchase our equity securities. Equity Compensation Plan Information Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted-average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) Equity compensation plans approved by security holders 713,210 $ 52.74 580,715 Equity compensation plans not approved by security holders -0- N/A -0- Total 713,210 $ 52.74 580,715 Item 13. Certain Relationships and Related Transactions, and Director Independence Transactions 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 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. During 2018, Interparfums SA, an indirect majority-owned subsidiary of the Company, loaned the Company $10 million. This loan was repayable in ten (10) equal monthly payments of $1,000,000 of principal plus accrued interest at 2% per annum, with the first payment due on May 31, 2019. The last payment was made on February 28, 2020. In 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. Consulting Agreements In 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. The agreement also provides for indemnification for Mr. Benacin and his holding company and a covenant not to compete for one year after termination of the agreement. The agreement was for one year, with automatic one year renewals unless either party terminates on 120 days’ notice or Mr. Benacin ceases to be the President of our company. 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.. 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. 64 In 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. The agreement also provides for indemnification for Mr. Madar and his holding company and a covenant not to compete for one year after termination of the agreement. The agreement was for one year, with automatic one year renewals unless either party terminates on 120 days’ notice or Mr. Madar ceases 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. Madar in his capacity as Chief Executive Officer. 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 holding company, but not the aggregate amount. The amount of salary paid to Mr. Madar in 2018 was reduced from $380,000 to $160,000, while payments to his holding company were increased by the like amount from $250,000 to $470,000. Therefore, for 2018 total cash compensation for Mr. Madar paid to him and his personal holding company remained unchanged at $630,000. This consulting agreement was renewed at $470,000 for 2019, again with no change in aggregate compensation. 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 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. Investment in Private Company As 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. Procedures for Approval of Related Person Transactions Transactions between related persons, such as between an executive officer or director and our company, or any company or person controlled by such officer or director, are required to be approved by our Audit Committee of our board of directors. Our Audit Committee Charter contains such explicit authority, as required by the applicable rules of The Nasdaq Stock Market. Director Independence The following are our directors who are independent directors within the applicable rules of The Nasdaq Stock Market: Francois Heilbronn Robert Bensoussan Patrick Choël Michel Dyens Veronique Gabai-Pinsky Gilbert Harrison We 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 for the members of our Audit Committee, and the members of our Audit Committee, Messrs. Heilbronn and Choël, as well as Ms. Gabai-Pinsky, are independent within the meaning of those rules. 65 Board Leadership Structure and Risk Management For more than the past ten (10) years, Jean Madar has held the positions of Chairman of the Board of Directors and Chief Executive Officer of our company. Almost since inception, Mr. Madar has been allocated the responsibility of overseeing our United States operations and the operation of Inter Parfums, Inc., as a public company. Philippe Benacin, as Chief Executive Officer of Interparfums SA, has been allocated the responsibility of overseeing our European operations and its operation as a public company in France. In addition, Mr. Benacin is also the Vice Chairman of the Board of Directors of our company. Our board of directors is comfortable 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,” a non-management director who controls the meetings of our board of directors. Our 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. Further, we periodically enter into foreign currency forward exchange contracts to hedge exposure related to receivables denominated in a foreign currency and to manage risks related to future sales expected to be denominated in a foreign currency. We enter into these exchange contracts for periods consistent with our identified exposures. The purpose of the hedging activities is to minimize the effect of foreign exchange rate movements on the receivables and cash flows of Interparfums SA, our French subsidiary, whose functional currency is the Euro. All foreign currency contracts are denominated in currencies of major industrial countries and are with large financial institutions, which are rated as strong investment grade . In addition, we mitigate interest rate risk by continually monitoring interest rates, and then determining whether fixed interest rates should be swapped for floating rate debt, or if floating rate debt should be swapped for fixed rate debt. Item 14. Principal Accountant Fees and Services Fees 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, 2020 and December 31, 2019. Audit Fees Fees billed by Mazars USA LLP and its affiliate, Mazars S.A. for audit services and review of the financial statements contained in our Quarterly Reports on Form 10-Q were $1.1 and $1.2 million for 2020 and 2019, respectively. Audit-Related Fees Mazars USA LLP did not bill us for any audit-related services during 2020 and 2019. Tax Fees Mazars USA LLP billed us $34,500 and $41,500 for tax services during 2020 and 2019, respectively. 66 All Other Fees Mazars S.A. billed us $3,500 and $9,000 for other services during 2020 and 2019, respectively. Audit Committee Pre-Approval Policies and Procedures The Audit Committee has the sole authority for the appointment, compensation and oversight of the work of our independent accountants, who prepare or issue an audit report for us. During 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. If we require further tax services from Mazars USA LLP, then the approval of the audit committee must be obtained. ● We 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 31, 2020. 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. 67 PART IV Item 15. Exhibits, Financial Statement Schedules Page ( a)(1) Financial Statements annexed hereto Report of Independent Registered Public Accounting Firm F-2 Audited Financial Statements: Consolidated Balance Sheets as of December 31, 2020 and 2019 F-5 Consolidated Statements of Income for each of the years in the three-year period ended December 31, 2020 F-6 Consolidated Statements of Comprehensive Income (Loss) for each of the years in the three-year period ended December 31, 2020 F-7 Consolidated Statements of Changes in Shareholders’ Equity for each of the years in the three-year period ended December 31, 2020 F-8 Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, 2020 F-9 Notes to Consolidated Financial Statements F-10 (a)(2) Financial Statement Schedule: Schedule II – Valuation and Qualifying Accounts F-32 (a)(3) Exhibits – The list of exhibits is contained in the Exhibit Index, which follows the signature page of this report. Item 16. Form 10-K Summary None. 68 INTER PARFUMS, INC. AND SUBSIDIARIES Consolidated Financial Statements and Schedule Index Page Report of Independent Registered Public Accounting Firm F-2 Audited Financial Statements: Consolidated Balance Sheets as of December 31, 2020 and 2019 F-5 Consolidated Statements of Income for each of the years in the three-year period ended December 31, 2020 F-6 Consolidated Statements of Comprehensive Income for each of the years in the three-year period ended December 31, 2020 F-7 Consolidated Statements of Changes in Shareholders’ Equity for each of the years in the three-year period ended December 31, 2020 F-8 Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, 2020 F-9 Notes to Consolidated Financial Statements F-10 Financial Statement Schedule: Schedule II – Valuation and Qualifying Accounts F-32 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To Shareholders and the Board of Directors of Inter Parfums, Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Inter Parfums, Inc. (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, 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 statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework: (2013) issued by COSO. 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. F- 2 Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a 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 audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal 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. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 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 projections. If the carrying value of an indefinite-lived intangible asset exceeds its fair value, an impairment charge is recorded. F- 3 - 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 of the intangible assets requires management to make significant estimates and assumptions related to forecasts of future revenues, operating margins and discount rates. As disclosed by management, changes in these assumptions could have a significant impact on either the future cash flows and therefore, on the amount of any impairment charge. The determination of an impairment indicator 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. 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 audit. ► 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 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 We have served as the Company's auditor since 2004. New York, New York March 1, 2021 F- 4 INTER PARFUMS, INC. AND SUBSIDIARIES Consolidated Balance Sheets December 31, 2020 and 2019 (In thousands except share and per share data) Assets 2020 2019 Current assets: Cash and cash equivalents $ 169,681 $ 133,417 Short-term investments 126,627 119,714 Accounts receivable, net 124,057 133,010 Inventories 158,822 167,809 Receivables, other 1,815 2,054 Other current assets 16,912 17,123 Income taxes receivable 2,806 169 Total current assets 600,720 573,296 Equipment and leasehold improvements, net 19,580 11,107 Right-of-use assets, net 24,734 28,359 Trademarks, licenses and other intangible assets, net 214,108 201,983 Deferred tax assets 8,041 8,004 Other assets 22,962 6,083 Total assets $ 890,145 $ 828,832 Liabilities and Equity Current liabilities: Current portion of long-term debt $ 14,570 $ 12,326 Current portion of lease liabilities 5,133 5,356 Accounts payable - trade 35,576 54,098 Accrued expenses 95,629 96,421 Income taxes payable 5,297 5,865 Dividends payable -- 10,399 Total current liabilities 156,205 184,465 Long–term debt, less current portion 10,136 10,734 Lease liabilities, less current portion 21,354 24,635 Equity: Inter Parfums, Inc. shareholders’ equity: Preferred stock, $ 0.001 par value. Authorized 1,000,000 shares; none issued -- -- Common stock, $ 0.001 par value. Authorized 100,000,000 shares; outstanding, 31,608,588 and 31,513,018 shares at December 31, 2020 and 2019, respectively 32 31 Additional paid-in capital 75,708 70,664 Retained earnings 503,567 474,637 Accumulated other comprehensive loss ( 5,997 ) ( 39,853 ) Treasury stock, at cost, 9,864,805 common shares at December 31, 2020 and 2019 ( 37,475 ) ( 37,475 ) Total Inter Parfums, Inc. shareholders’ equity 535,835 468,004 Noncontrolling interest 166,615 140,994 Total equity 702,450 608,998 Total liabilities and equity $ 890,145 $ 828,832 See accompanying notes to consolidated financial statements. F- 5 INTER PARFUMS, INC. AND SUBSIDIARIES Consolidated Statements of Income Years ended December 31, 2020, 2019, and 2018 (In thousands except share and per share data) 2020 2019 2018 Net sales $ 539,009 $ 713,514 $ 675,574 Cost of sales 208,278 267,578 248,012 Gross margin 330,731 445,936 427,562 Selling, general, and administrative expenses 260,648 341,209 332,831 Income from operations 70,083 104,727 94,731 Other expenses (income): Interest expense 1,970 2,146 2,578 Loss on foreign currency 2,178 1,128 251 Interest income ( 2,865 ) ( 3,693 ) ( 3,957 ) Other income ( 549 ) -- -- 734 ( 419 ) ( 1,128 ) Income before income taxes 69,349 105,146 95,859 Income taxes 19,381 29,076 26,144 Net income 49,968 76,070 69,715 Less: Net income attributable to the noncontrolling interest 11,749 15,821 15,922 Net income attributable to Inter Parfums, Inc. $ 38,219 $ 60,249 $ 53,793 Net income attributable to Inter Parfums, Inc. common shareholders: Basic $ 1.21 $ 1.92 $ 1.72 Diluted $ 1.21 $ 1.90 $ 1.71 Weighted average number of shares outstanding: Basic 31,536,659 31,451,093 31,307,991 Diluted 31,654,544 31,688,700 31,522,371 Dividends declared per share $ 0.33 $ 1.16 $ 0.91 See accompanying notes to consolidated financial statements. F- 6 INTER PARFUMS, INC. AND SUBSIDIARIES Consolidated Statements of Comprehensive Income Years ended December 31, 2020, 2019, and 2018 (In thousands except share and per share data) 2020 2019 2018 Net income $ 49,968 $ 76,070 $ 69,715 Other comprehensive income: Net derivative instrument income (loss), net of tax ( 19 ) 22 175 Transfer of OCI into earnings ( 52 ) ( 136 ) ( 37 ) Translation adjustments, net of tax 47,912 ( 8,712 ) ( 22,555 ) 47,841 ( 8,826 ) ( 22,417 ) Comprehensive income 97,809 67,244 47,298 Comprehensive income attributable to noncontrolling interests: Net income 11,749 15,821 15,922 Net derivative instrument income (loss), net of tax ( 19 ) ( 30 ) 39 Translation adjustments, net of tax 14,004 ( 2,593 ) ( 6,638 ) 25,734 13,198 9,323 Comprehensive income attributable to Inter Parfums Inc. $ 72,075 $ 54,046 $ 37,975 See accompanying notes to consolidated financial statements. F- 7 INTER PARFUMS, INC. AND SUBSIDIARIES Consolidated Statements of Changes in Shareholders’ Equity Years ended December 31, 2020, 2019, and 2018 (In thousands except share and per share data) 2020 2019 2018 Common stock, beginning of year $ 31 $ 31 $ 31 Shares issued upon exercise of stock options 1 -- -- Common stock, end of year 32 31 31 Additional paid-in capital, beginning of year 70,664 69,970 66,004 Shares issued upon exercise of stock options 2,771 4,458 3,406 Share-based compensation 1,711 1,403 1,132 Purchase of subsidiary shares from noncontrolling interests -- ( 5,167 ) ( 572 ) Transfer of subsidiary shares purchased 562 -- -- Additional paid-in capital, end of year 75,708 70,664 69,970 Retained earnings, beginning of year 474,637 448,731 422,570 Net income 38,219 60,249 53,793 Dividends ( 10,406 ) ( 36,349 ) ( 28,356 ) Share-based compensation 1,117 2,006 724 Retained earnings, end of year 503,567 474,637 448,731 Accumulated other comprehensive loss, beginning of year ( 39,853 ) ( 33,650 ) ( 17,832 ) Foreign currency translation adjustment, net of tax 33,908 ( 6,119 ) ( 15,917 ) Transfer from other comprehensive income into earnings ( 52 ) ( 136 ) ( 37 ) Net derivative instrument gain, net of tax -- 52 136 Accumulated other comprehensive loss, end of year ( 5,997 ) ( 39,853 ) ( 33,650 ) Treasury stock, beginning and end of year ( 37,475 ) ( 37,475 ) ( 37,475 ) Noncontrolling interest, beginning of year 140,994 138,139 137,339 Net income 11,749 15,821 15,922 Foreign currency translation adjustment, net of tax 14,004 ( 2,593 ) ( 6,638 ) Net derivative instrument gain (loss), net of tax ( 19 ) ( 30 ) 39 Purchase of subsidiary shares from noncontrolling interests -- ( 920 ) ( 236 ) Dividends ( 324 ) ( 9,654 ) ( 8,706 ) Stock-based compensation 350 231 419 Transfer of subsidiary shares purchased ( 139 ) -- -- Noncontrolling interest, end of year 166,615 140,994 138,139 Total equity $ 702,450 $ 608,998 $ 585,746 See accompanying notes to consolidated financial statements. F- 8 INTER PARFUMS, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows Years ended December 31, 2020, 2019, and 2018 (In thousands) 2020 2019 2018 Cash flows from operating activities: Net income $ 49,968 $ 76,070 $ 69,715 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization including impairment loss 9,067 8,729 11,031 Provision for doubtful accounts 4,824 1,380 1,442 Noncash stock compensation 3,029 3,394 2,205 Share of income of equity investment ( 549 ) -- -- Lease expense 62 1,068 -- Deferred tax expense (benefit) 581 ( 2,330 ) ( 158 ) Change in fair value of derivatives ( 137 ) ( 169 ) ( 302 ) Changes in: Accounts receivable 13,157 1,124 ( 21,532 ) Inventories 19,333 ( 5,925 ) ( 29,341 ) Other assets 1,176 ( 4,945 ) ( 1,016 ) Accounts payable and accrued expenses ( 32,239 ) ( 4,960 ) 25,592 Income taxes, net ( 3,279 ) 3,016 5,405 Net cash provided by operating activities 64,993 76,452 63,041 Cash flows from investing activities: Purchases of short-term investments ( 7,582 ) ( 97,958 ) ( 10,030 ) Proceeds from sale of short-term investments 11,513 44,814 8,859 Purchase of equipment and leasehold improvements ( 11,011 ) ( 5,427 ) ( 3,956 ) Payment for intangible assets acquired ( 1,251 ) ( 6,067 ) ( 8,509 ) Purchase of equity investment ( 13,998 ) -- -- Net cash used in investing activities ( 22,329 ) ( 64,638 ) ( 13,636 ) Cash flows from financing activities: Repayment of long-term debt ( 13,725 ) ( 22,321 ) ( 23,487 ) Proceeds issuance of long-term debt 13,438 -- -- Proceeds from exercise of options 2,771 4,458 3,406 Dividends paid ( 20,805 ) ( 34,579 ) ( 26,287 ) Dividends paid to noncontrolling interests ( 324 ) ( 9,654 ) ( 8,706 ) Purchase of subsidiary shares from noncontrolling interests -- ( 6,087 ) ( 808 ) Net cash used in financing activities ( 18,645 ) ( 68,183 ) ( 55,882 ) Effect of exchange rate changes on cash 12,245 ( 3,350 ) ( 8,730 ) Net increase (decrease) in cash and cash equivalents 36,264 ( 59,719 ) ( 15,207 ) Cash and cash equivalents – beginning of year 133,417 193,136 208,343 Cash and cash equivalents – end of year $ 169,681 $ 133,417 $ 193,136 Supplemental disclosures of cash flow information: Cash paid for: Interest $ 1,105 $ 1,764 $ 1,754 Income taxes 21,772 26,332 24,995 See accompanying notes to consolidated financial statements. F- 9 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2020, 2019 and 2018 (In thousands except share and per share data) (1) The Company and its Significant Accounting Policies Business of the Company Inter Parfums, Inc. 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, 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, 2020 2019 2018 Montblanc 21 % 22 % 19 % Coach 17 % 14 % 15 % Jimmy Choo 16 % 16 % 17 % GUESS (license commenced April 1, 2018) 11 % 10 % n/a Lanvin 7 % 8 % 10 % No other brand represented 10% or more of consolidated net sales. Basis of Preparation The consolidated financial statements include the accounts of the Company, including 73 % owned Interparfums SA, a subsidiary whose stock is publicly traded in France. All material intercompany balances and transactions have been eliminated . Management Estimates Management makes assumptions and estimates to prepare financial statements in conformity with accounting principles generally accepted in the United States of America. Those assumptions and estimates directly affect the amounts reported and disclosures included in the consolidated financial statements. Actual results could differ from those assumptions and estimates. Significant estimates for which changes in the near term are considered reasonably possible and that may have a material impact on the financial statements are disclosed in these notes to the consolidated financial statements. Foreign Currency Translation For foreign 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 ’ 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. The Company 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. dollars. F- 10 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2020, 2019 and 2018 (In thousands except share and per share data) 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 $ 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. Inventories Inventories, including promotional merchandise, only include inventory considered saleable or usable in future periods, and are stated at the lower of cost and net realizable value, with cost being determined on the first-in, first-out method. Cost components include raw materials, direct labor and overhead (e.g., indirect labor, utilities, depreciation, purchasing, receiving, inspection and warehousing) as well as inbound freight. Promotional merchandise is charged to cost of sales at the time the merchandise is shipped to the Company ’ s customers. Derivatives 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 Improvements Equipment 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. Long-Lived Assets Indefinite-lived intangible assets principally consist of trademarks which are not amortized. The Company evaluates indefinite-lived intangible assets for impairment at least annually during the fourth quarter, or more frequently when events occur or circumstances change, such as an unexpected decline in sales, that would more-likely-than-not indicate that the carrying value of an indefinite-lived intangible asset may not be recoverable. When testing indefinite-lived intangible assets for impairment, the evaluation requires a comparison of the estimated fair value of the asset to the carrying value of the asset. 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 % and 7.94 % in 2020 and 2019, respectively. The cash flow projections are based upon a number of assumptions, including future sales levels, 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. If the carrying value of an indefinite-lived intangible asset exceeds its fair value, an impairment charge is recorded. F- 11 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2020, 2019 and 2018 (In thousands except share and per share data) 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. 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. dollars. 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 $ 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. No one customer represented 10 % or more of net sales in 2020, 2019 or 2018. Sales Returns Generally, the Company does not permit customers to return their unsold products. However, for U.S. based customers, we allow returns if properly requested, authorized and approved. The Company regularly reviews and revises, as deemed necessary, its estimate of reserves for future sales returns based primarily upon historic trends and relevant current data including information provided by retailers regarding their inventory levels. In addition, as necessary, specific accruals may be established for significant future known or anticipated events. The types of known or anticipated events that we consider include, but are not limited to, the financial condition of our customers, store closings by retailers, changes in the retail environment and our decision to continue to support new and existing products. The Company records its estimate of potential sales returns as a reduction of sales and cost of sales with corresponding entries to accrued expenses, to record the refund liability, and inventory, for the right to recover goods from the customer. The refund liability associated with estimated returns was $ 3.6 million and $ 4.1 million at December 31, 2020 and 2019, respectively, and the amounts recognized for the rights to recover products was $ 1.4 million and $ 1.6 million at December 31, 2020 and 2019, respectively. The physical condition and marketability of returned products are the major factors we consider in estimating realizable value. Actual returns, as well as estimated realizable values of returned products, may differ significantly, either favorably or unfavorably, from our estimates, if factors such as economic conditions, inventory levels or competitive conditions differ from our expectations. F- 12 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2020, 2019 and 2018 (In thousands except share and per share data) Payments to Customers The Company records revenues generated from purchase with purchase and gift with purchase promotions as sales and the costs of its purchase with purchase and gift with purchase promotions as cost of sales. Certain other incentive arrangements require the payment of a fee to customers based on their attainment of pre-established sales levels. These fees have been recorded as a reduction of net sales. Advertising and Promotion 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 The Company leases its offices and warehouses, vehicles, and certain office equipment, substantially all of which are classified as operating leases. The Company 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. 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 ’ trademarks. 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 may pay an entry fee to acquire, or enter into, a license where the licensor or another licensee was operating a pre-existing fragrance business. In those cases, the entry fee is capitalized as an intangible asset and amortized over its useful life. Most license agreements require minimum royalty payments, incremental royalties based on net sales levels and minimum spending on advertising and promotional activities. Royalty expenses are accrued in the period in which net sales are recognized while advertising and promotional expenses are accrued at the time these costs are incurred. F- 13 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2020, 2019 and 2018 (In thousands except share and per share data) In addition, the Company is exposed to certain concentration risk. Most of our prestige fragrance brands are licensed from unaffiliated third parties, and our business is dependent upon the continuation and renewal of such licenses. Income Taxes The Company accounts for income taxes using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in its financial statements or tax returns. The net deferred tax assets assume sufficient future earnings for their realization, as well as the continued application of currently enacted tax rates. Included in net deferred tax assets is a valuation allowance for deferred tax assets, where management believes it is more-likely-than-not that the deferred tax assets will not be realized in the relevant jurisdiction. If the Company determines that a deferred tax asset will not be realizable, an adjustment to the deferred tax asset will result in a reduction of net earnings at that time. Accrued interest and penalties are included within the related tax asset or liability in the accompanying 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 investment deemed sold, is reflected as an equity adjustment in the consolidated balance sheets. Treasury Stock The 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 of equity. Share Repurchase Authorizations may be suspended, limited or terminated at any time without notice. Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board ( “ 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 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 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. F- 14 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2020, 2019 and 2018 (In thousands except share and per share data) (2) Impact of COVID-19 Pandemic A 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 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. was signed in 2011. The renewal agreement also allows for an additional 5-year term through 2031 at the option of the Company. F- 15 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2020, 2019 and 2018 (In thousands except share and per share data) Building Acquisition – Future Headquarters in Paris In 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 In 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, 2020. 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 31, 2020. Such amount is included in other income on the accompanying consolidated statement of income. Moncler In June 2020, the Company entered 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. S.T. Dupont 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 December 31, 2020 2019 Raw materials and component parts $ 66,492 $ 71,895 Finished goods 92,330 95,914 $ 158,822 $ 167,809 F- 16 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2020, 2019 and 2018 (In thousands except share and per share data) 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 value. Fair Value Measurements at December 31, 2020 Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Assets: Short-term investments $ 126,627 $ — $ 126,627 $ — Foreign currency forward exchange contracts not accounted for using hedge accounting 253 — 253 — $ 126,880 $ — $ 126,880 $ — Fair Value Measurements at December 31, 2019 Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Assets: Short-term investments $ 119,714 $ — $ 119,714 $ — Foreign currency forward exchange contracts accounted for using hedge accounting 16 16 Foreign currency forward exchange contracts not accounted for using hedge accounting 112 112 $ 119,842 $ — $ 119,842 $ — Liabilities: Interest rate swap $ 30 $ — $ 30 $ — 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. F- 17 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2020, 2019 and 2018 (In thousands except share and per share data) 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. (6) 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. Any hedge ineffectiveness is also recognized as a gain or loss on foreign currency in the income statement. For hedge contracts that are no longer deemed highly effective, hedge accounting is discontinued and gains and losses accumulated in other comprehensive income are reclassified to earnings. If it is probable that the forecasted transaction will no longer occur, then any gains or losses accumulated 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. 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, 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. 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, 2020 and December 31, 2019, resulted in an asset and is included in other current assets on the accompanying balance sheets. At 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. F- 18 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2020, 2019 and 2018 (In thousands except share and per share data) (7) Equipment and Leasehold Improvements December 31, 2020 2019 Equipment $ 51,060 $ 37,743 Leasehold improvements 1,989 1,760 53,049 39,503 Less accumulated depreciation and amortization 33,469 28,396 $ 19,580 $ 11,107 Depreciation 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 2020 Gross Accumulated Net Book Amount Amortization Value Trademarks (indefinite lives) $ 131,962 $ — $ 131,962 Trademarks (finite lives) 47,477 74 47,403 Licenses (finite lives) 93,248 62,262 30,986 Other intangible assets (finite lives) 18,194 14,437 3,757 Subtotal 158,919 76,773 82,146 Total $ 290,881 $ 76,773 $ 214,108 2019 Gross Accumulated Net Book Amount Amortization Value Trademarks (indefinite lives) $ 121,001 $ — $ 121,001 Trademarks (finite lives) 43,464 67 43,397 Licenses (finite lives) 88,008 53,714 34,294 Other intangible assets (finite lives) 15,436 12,145 3,291 Subtotal 146,908 65,926 80,982 Total $ 267,909 $ 65,926 $ 201,983 Amortization 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. F- 19 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2020, 2019 and 2018 (In thousands except share and per share data) 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. 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 operations. The 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 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 $ 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. (9) Accrued Expenses Accrued expenses consist of the following: December 31, 2020 2019 Advertising liabilities $ 12,164 $ 25,713 Salary (including bonus and related taxes) 14,605 16,173 Royalties 16,966 16,646 Due vendors (not yet invoiced) 31,698 19,196 Retirement reserves 11,889 9,907 Refund (return) liability 3,616 4,131 Other 4,691 4,655 $ 95,629 $ 96,421 (10) Loans Payable – Banks 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 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. The Company ’ s foreign subsidiaries have available credit lines, including several bank overdraft facilities totaling approximately $ 31 million. These credit lines bear interest at EURIBOR plus between 0.5 % and 0.8 % (EURIBOR was minus 0.546 % at December 31, 2020). Borrowings outstanding pursuant to these bank overdraft facilities were zero as of December 31, 2020 and 2019. F- 20 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2020, 2019 and 2018 (In thousands except share and per share data) As 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 Debt Long-term debt consists of the following: December 31, 2020 2019 $ 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 $ 11,208 $ 11,806 $ 13.4 million term loan amended such that the loan was repaid in February 2021 plus interest at 0.85 % per annum 13,498 — $ 111.0 million 5-year term loan payable in 20 equal quarterly installments plus interest at 1.2 % per annum — 11,254 24,706 23,060 Less current maturities 14,570 12,326 Total $ 10,136 $ 10,734 In 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 Leases The Company leases its offices, warehouses and vehicles, substantially all of which are classified as operating leases. The Company 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 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. As 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. F- 21 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2020, 2019 and 2018 (In thousands except share and per share data) Maturities of lease liabilities subsequent to December 31, 2020 are as follows: (In thousands) 2021 $ 5,568 2022 4,958 2023 4,228 2024 3,999 2025 2,857 Thereafter 7,324 28,934 Less imputed interest (based on 3.0% weighted-average discount rate) ( 2,447 ) $ 26,487 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. 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) 2021 $ 165,506 2022 164,341 2023 166,508 2024 159,974 2025 156,293 Thereafter 586,342 $ 1,398,964 Future 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. (13) Equity 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 $ 1.7 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. F- 22 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2020, 2019 and 2018 (In thousands except share and per share data) The following table sets forth information with respect to nonvested options for 2020: Number of Shares Weighted Average Grant Date Fair Value Nonvested options – beginning of year 514,210 $ 12.36 Nonvested options granted 9,000 $ 12.16 Nonvested options vested or forfeited ( 169,420 ) $ 11.09 Nonvested options – end of year 353,790 $ 12.96 The effect of share-based payment expenses decreased income statement line items as follows: Year Ended December 31, 2020 2019 2018 Income before income taxes $ 3,030 $ 3,390 $ 2,200 Net income attributable to Inter Parfums, Inc. 2,040 2,060 1,390 Diluted earnings per share attributable to Inter Parfums, Inc. 0.06 0.07 0.04 The following table summarizes stock option activity and related information for the years ended December 31, 2020, 2019 and 2018: Year ended December 31, 2020 2019 2018 Options Weighted Average Exercise Price Options Weighted Average Exercise Price Options Weighted Average Exercise Price Shares under option - beginning of year 815,800 $ 49.89 776,171 $ 41.33 730,980 $ 31.92 Options granted 9,000 69.11 194,050 72.89 196,350 63.91 Options exercised ( 95,570 ) 28.99 ( 130,891 ) 34.06 ( 140,579 ) 24.21 Options forfeited ( 16,020 ) 58.38 ( 23,530 ) 45.48 ( 10,580 ) 37.64 Shares under option - end of year 713,210 52.74 815,800 49.89 776,171 41.33 At 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 . F- 23 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2020, 2019 and 2018 (In thousands except share and per share data) The 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. The assumptions used in the Black-Scholes pricing model are set forth in the following table: Year Ended December 31, 2020 2019 2018 Weighted-average expected stock-price volatility 25 % 25 % 27 % Weighted-average expected option life 5.0 years 5.0 years 5.0 years Weighted-average risk-free interest rate 1.4 % 1.7 % 2.5 % Weighted-average dividend yield 2.5 % 2.0 % 2.0 % 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. 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. Proceeds, tax benefits and intrinsic value related to stock options exercised were as follows: Year Ended December 31, 2020 2019 2018 Proceeds from stock options exercised $ 2,771 $ 4,458 $ 3,406 Tax benefits $ 400 $ 690 $ 807 Intrinsic value of stock options exercised $ 2,873 $ 4,520 $ 4,310 The following table summarizes additional stock option information as of December 31, 2020: Options outstanding Options weighted average remaining Options Exercise prices outstanding contractual life exercisable $ 23.61 - $ 26.40 93,220 0.95 years 93,220 $ 32.83 - $ 33.95 102,250 1.97 years 77,340 $ 40.15 - $ 46.90 151,040 2.95 years 83,540 $ 65.25 - $ 69.11 184,800 3.97 years 68,940 $ 73.09 181,900 5.00 years 36,380 Totals 713,210 3.34 years 359,420 F- 24 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2020, 2019 and 2018 (In thousands except share and per share data) As 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 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. 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. 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 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. In 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. All share purchases and issuances have been classified as equity transactions on the accompanying balance sheet. Dividends In October 2019, our Board of Directors authorized a 20 % increase in the annual dividend to $ 1.32 per share on an annual basis. In 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. F- 25 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2020, 2019 and 2018 (In thousands except share and per share data) (14) Net 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. 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: Year ended December 31, 2020 2019 2018 Numerator for diluted earnings per share $ 38,219 $ 60,249 $ 53,793 Denominator: Weighted average shares 31,536,659 31,451,093 31,307,991 Effect of dilutive securities: Stock options 117,885 237,607 214,380 Denominator for diluted earnings per share 31,654,544 31,688,700 31,522,371 Earnings per share: Net income attributable to Inter Parfums, Inc. common shareholders: Basic $ 1.21 $ 1.92 $ 1.72 Diluted 1.21 1.90 1.71 Not included in the above computations is the effect of anti - dilutive potential common shares, which consist of outstanding options to purchase 450,000 , 183,000 , and 89,000 shares of common stock for 2020, 2019, and 2018, respectively. (15) Segments and Geographic Areas The Company manufactures and distributes one product line, fragrances and fragrance related products. The Company manages its business in two segments, European based operations and United States based operations. The European assets are located, and operations are primarily conducted, in France. Both European and United States operations primarily represent the sale of prestige brand name fragrances. F- 26 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2020, 2019 and 2018 (In thousands except share and per share data) Information on the Company ’ s operations by segments is as follows: Year ended December 31, 2020 2019 2018 Net sales: United States $ 117,489 $ 173,522 $ 140,768 Europe 422,947 542,226 537,805 Eliminations of intercompany sales ( 1,427 ) ( 2,234 ) ( 2,999 ) $ 539,009 $ 713,514 $ 675,574 Net income attributable to Inter Parfums, Inc.: United States $ 7,942 $ 19,365 $ 13,071 Europe 30,241 40,840 40,877 Eliminations 36 44 ( 155 ) $ 38,219 $ 60,249 $ 53,793 Depreciation and amortization expense including impairment loss: United States $ 3,354 $ 3,088 $ 2,711 Europe 5,713 5,641 8,320 $ 9,067 $ 8,729 $ 11,031 Interest income: United States $ 24 $ 345 $ 137 Europe 2,971 3,501 3,820 Eliminations ( 130 ) ( 153 ) -- $ 2,865 $ 3,693 $ 3,957 Interest expense: United States $ 604 $ 673 $ 419 Europe 1,496 1,626 2,159 Eliminations ( 130 ) ( 153 ) -- $ 1,970 $ 2,146 $ 2,578 Income tax expense: United States $ 1,590 $ 3,945 $ 2,264 Europe 17,782 25,101 23,898 Eliminations 9 30 ( 18 ) $ 19,381 $ 29,076 $ 26,144 December 31, 2020 2019 2018 Total assets: United States $ 141,316 $ 166,180 $ 133,706 Europe 758,812 670,657 684,485 Eliminations ( 9,983 ) ( 8,005 ) ( 20,362 ) $ 890,145 $ 828,832 $ 797,829 Additions to long-lived assets: United States $ 1,004 $ 5,851 $ 19,181 Europe 11,259 5,643 4,188 $ 12,263 $ 11,494 $ 23,369 Total long-lived assets: United States $ 40,656 $ 44,473 $ 25,753 Europe 217,766 196,976 188,411 $ 258,422 $ 241,449 $ 214,164 Deferred tax assets: United States $ 886 $ 705 $ 650 Europe 7,106 7,241 5,023 Eliminations 49 58 88 $ 8,041 $ 8,004 $ 5,761 F- 27 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2020, 2019 and 2018 (In thousands except share and per share data) United States export sales were approximately $ 71.5 million, $ 112.0 million and $ 95.1 million in 2020, 2019 and 2018, respectively. Consolidated net sales to customers by region are as follows: Year ended December 31, 2020 2019 2018 North America $ 193,500 $ 235,500 $ 210,600 Europe 180,200 240,800 233,600 Asia 79,700 110,900 113,400 Middle East 46,800 72,600 59,300 Central and South America 32,500 46,200 51,700 Other 6,300 7,500 7,000 $ 539,000 $ 713,500 $ 675,600 Consolidated net sales to customers in major countries are as follows: Year Ended December 31, 2020 2019 2018 United States $ 187,300 $ 225,300 $ 205,000 France $ 37,600 $ 43,500 $ 44,000 Russia $ 14,100 $ 36,800 $ 35,000 United Kingdom $ 24,600 $ 35,800 $ 36,000 (16) Income Taxes The Company and its subsidiaries file income tax returns in the U.S. federal, and various states and foreign jurisdictions. The Company assessed its uncertain tax positions and determined that it has no material uncertain tax position at December 31, 2020. The components of income before income taxes consist of the following: Year ended December 31, 2020 2019 2018 U.S. operations $ 9,577 $ 23,384 $ 15,162 Foreign operations 59,772 81,762 80,697 $ 69,349 $ 105,146 $ 95,859 F- 28 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2020, 2019 and 2018 (In thousands except share and per share data) The provision for current and deferred income tax expense (benefit) consists of the following: Year ended December 31, 2020 2019 2018 Current: Federal $ 1,685 $ 3,280 $ 1,629 State and local 90 713 497 Foreign 17,024 27,412 24,175 18,799 31,405 26,301 Deferred: Federal ( 215 ) ( 3 ) 113 State and local 44 ( 22 ) — Foreign 753 ( 2,304 ) ( 270 ) 582 ( 2,329 ) ( 157 ) Total income tax expense $ 19,381 $ 29,076 $ 26,144 The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows: December 31, 2020 2019 Net deferred tax assets: Foreign net operating loss carry-forwards $ 360 $ 362 Inventory and accounts receivable 1,928 1,231 Profit sharing 2,936 4,812 Stock option compensation 718 588 Effect of inventory profit elimination 4,443 4,630 Other 910 214 Total gross deferred tax assets, net 11,295 11,837 Valuation allowance ( 360 ) ( 361 ) Net deferred tax assets 10,935 11,476 Deferred tax liabilities (long-term): Trademarks and licenses ( 2,894 ) ( 3,472 ) Net deferred tax assets $ 8,041 $ 8,004 Valuation allowances are provided for foreign net operating loss carry-forwards, as future profitable operations from certain foreign subsidiaries might not be sufficient to realize the full amount of net operating loss carry-forwards. No other valuation allowances have been provided as management believes that it is more likely than not that the asset will be realized in the reduction of future taxable income. F- 29 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2020, 2019 and 2018 (In thousands except share and per share data) Tax Cuts and Jobs Act In December 2017, the U.S. government passed the Tax Cuts and Jobs Act (“the Tax Act”). The Tax Act made broad and complex changes to the U.S. tax code, including, but not limited to reducing the U.S. federal corporate tax rate from 35 % to 21 % beginning in 2018, and requiring companies to pay a one-time transition tax on certain unremitted earnings of foreign subsidiaries. The Tax Act also established new tax laws that took effect in 2018, including, but not limited to: (i) the reduction of the U.S. federal corporate tax rate discussed above; (ii) a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries; (iii) a provision designed to tax global intangible low-taxed income (“GILTI”); and (iv) a provision that allows a domestic corporation an immediate deduction for a portion of its foreign derived intangible income (“FDII”). The Company estimated of the effect of GILTI and has determined that it has no tax liability related to GILTI as of December 31, 2020, 2019 and 2018. The Company also estimated the effect of FDII and recorded a tax benefit of approximately $ 0.3 million, $ 0.9 million and $ 0.6 million as of December 31, 2020, 2019 and 2018, respectively. Other Tax Matters The French authorities are considering that the existence of IP Suisse, a wholly-owned subsidiary of Interparfums SA, does not, in and of itself, constitute a permanent establishment and therefore Interparfums, SA should pay French taxes on all or part of the profits of that entity. The French Tax Authority notified the Company that IP Suisse will be the subject of a tax audit covering the period January 1, 2010 through December 31, 2018. No claim or assessment for any taxes or penalties has been made at this time. The Company disagrees and is prepared to vigorously defend its position. Consequently, no provision has been made in the accompanying financial statements as we believe it is more-likely-than-not that our position will be sustained based on its technical merits. Although we believe that we have sufficient arguments to support our position, there exists a risk that the French authorities may prevail. The Company ’ s exposure in connection with this matter is approximately $ 5.8 million, net of recovery taxes already paid to the Swiss authorities, and excluding interest. The Company is no longer subject to U.S. federal, state, and local or non-U.S. income tax examinations by tax authorities for years before 2017. Differences between the United States federal statutory income tax rate and the effective income tax rate were as follows: Year ended December 31, 2020 2019 2018 Statutory rates 21.0 % 21.0 % 21.0 % State and local taxes, net of Federal benefit 0.2 0.6 0.4 Benefit of Foreign Derived Intangible Income ( 0.4 ) ( 0.9 ) ( 0.6 ) Effect of foreign taxes greater than U.S. statutory rates 7.5 7.5 7.3 Other ( 0.4 ) ( 0.6 ) ( 0.8 ) Effective rates 27.9 % 27.6 % 27.3 % F- 30 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2020, 2019 and 2018 (In thousands except share and per share data) (17) Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss consist of the following: Year ended December 31, 2020 2019 2018 Net derivative instruments, beginning of year $ 52 $ 136 $ 37 Net derivative instrument gain (loss), net of tax ( 52 ) ( 84 ) 99 Net derivative instruments, end of year — 52 136 Cumulative translation adjustments, beginning of year ( 39,905 ) ( 33,786 ) ( 17,869 ) Translation adjustments 33,908 ( 6,119 ) ( 15,917 ) Cumulative translation adjustments, end of year ( 5,997 ) ( 39,905 ) ( 33,786 ) Accumulated other comprehensive loss $ ( 5,997 ) $ ( 39,853 ) $ ( 33,650 ) (18) Net Income Attributable to Inter Parfums, Inc. and Transfers from the Noncontrolling Interest Year ended December 31, 2020 2019 2018 Net income attributable to Inter Parfums, Inc. $ 38,219 $ 60,249 $ 53,793 Decrease in Inter Parfums, Inc.'s additional paid-in capital for subsidiary share transactions — ( 5,167 ) ( 572 ) Change from net income attributable to Inter Parfums, Inc. and transfers from noncontrolling interest $ 38,219 $ 55,082 $ 53,221 F- 31 Schedule II INTER PARFUMS, INC. AND SUBSIDIARIES Valuation and Qualifying Accounts (In thousands) Column A Column B Column C Column D Column E Additions (1) (2) Charged to Balance at Charged to other beginning of costs and accounts – Deductions – Balance at Description period expenses describe describe end of period Allowance for doubtful accounts: Year ended December 31, 2020 $ 2,452 4,824 381 (d) 1,968 (a) 5,550 Year ended December 31, 2019 $ 2,602 1,380 ( 41 )(d) 1,489 (a) 2,452 Year ended December 31, 2018 $ 1,821 1,441 ( 91 )(d) 569 (a) 2,602 Allowance for sales returns, net of inventory: Year ended December 31, 2020 $ 2,587 1,978 - 2,323 (b) 2,242 Year ended December 31, 2019 $ 1,379 2,387 - 1,179 (b) 2,587 Year ended December 31, 2018 $ 3,310 1,329 - 3,260 (b) 1,379 Inventory reserve: Year ended December 31, 2020 $ 4,909 7,212 616 (d) 3,366 (c) 9,371 Year ended December 31, 2019 $ 4,854 5,321 ( 70 )(d) 5,196 (c) 4,909 Year ended December 31, 2018 $ 5,349 4,694 ( 183 )(d) 5,006 (c) 4,854 (a) Write-off of bad debts. (b) Write-off of sales returns. (c) Disposal of inventory (d) Foreign currency translation adjustment See accompanying reports of independent registered public accounting firm. F- 32 SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Inter Parfums, Inc. By: /s/ Jean Madar Jean Madar, Chief Executive Officer Date: March 1, 2021 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: Signature Title Date /s/ Jean Madar Chairman of the Board of Directors Jean Madar and Chief Executive Officer March 1, 2021 /s/ Russell Greenberg Russell Greenberg Chief Financial and Accounting Officer and Director March 1, 2021 /s/ Philippe Benacin Philippe Benacin Director February 26, 2021 /s/ Philippe Santi Philippe Santi Director February 26, 2021 /s/ François Heilbronn François Heilbronn Director February 26, 2021 /s/ Robert Bensoussan Robert Bensoussan Director February 26, 2021 /s/ Patrick Choël Patrick Choël Director February 26, 2021 /s/ Michel Dyens Michel Dyens Director February 26, 2021 /s/ Veronique Gabai-Pinsky Veronique Gabai-Pinsky Director February 26, 2021 /s/ Gilbert Harrison Gilbert Harrison Director February 26, 2021 69 Exhibit Index The following document heretofore filed with the Commission is incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2016: Exhibit No. Description 3.8 Articles of Association of Parfums Rochas Spain, Limited Liability Company (Spanish with English translation) The following document heretofore filed with the Commission is incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2016: Exhibit No. Description 4.33 2016 Stock Option Plan The following documents heretofore filed with the Commission are incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016: Exhibit No. Description 3.6 Organizational Document of Inter Parfums (Suisse) Sarl (French original) 3.6.1 Organizational Document of Inter Parfums (Suisse) Sarl (English translation) 3.9 Amended and Restated By-laws (correction to name only) 10.165 Form of Option Agreement for Options Granted to Executive Officers on December 31, 2016 with Schedule of Option Holders and Options Granted The following documents heretofore filed with the Commission are incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017: Exhibit No. Description 10.166 Form of Option Agreement for Options Granted to Executive Officers on December 29, 2017 with Schedule of Option Holders and Options Granted 10.167 Form of Option Agreement for Options Granted to Executive Officers on January 19, 2018 with Schedule of Option Holders and Options Granted 70 The following documents heretofore filed with the Commission are incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018: Exhibit No. Description 4.21 2004 Nonemployee Director Stock Option Plan as amended 4.22 2004 Stock Option Plan as amended 10.156 Consulting Agreement with Jean Madar Holding SAS 10.168 Eighth Modification of Lease for portions of 551 5 th Avenue, New York, NY 10.168.1 Exhibits to Eighth Modification of Lease for portions of 551 5 th Avenue, New York, NY 10.169 Fourth Amendment to Lease for 60 Stults Road, South Brunswick, NJ 10.171 Form of Option Agreement for Options Granted to Executive Officers on December 31, 2018 with Schedule of Option Holders and Options Granted 21 List of Subsidiaries 23 Consent of Mazars USA LLP 31.1 Certification Required by Rule 13a-14 of Chief Executive Officer 31.2 Certification Required by Rule 13a-14 of Chief Financial Officer 32.1 Certification Required by Section 906 of the Sarbanes-Oxley Act by Chief Executive Officer 32.2 Certification Required by Section 906 of the Sarbanes-Oxley Act by Chief Executive Officer 101 Interactive data files The following document heretofore filed with the Commission is incorporated by reference to the Company’s Current Report on Form 8-K as filed on February 7, 2020: Exhibit No. Description 10.171 Form of Amendment to Consulting Agreement for Jean Madar Holding SAS 71 The following documents heretofore filed with the Commission are incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019: Exhibit No. Description 10.160 Consulting Agreement with Philippe Benacin Holding SAS 3.1.1 Restated Certificate of Incorporation dated September 3, 1987 3.1.2 Amendment to Restated Certificate of Incorporation dated July 31, 1992 3.1.3 Amendment to Restated Certificate of Incorporation dated July 9, 1993 3.1.4 Amendment to Restated Certificate of Incorporation, as amended, dated July 13, 1999 3.1.5 Amendment to Restated Certificate of Incorporation, as amended, dated July 12, 2000 3.1.6 Amendment to Restated Certificate of Incorporation dated August 6, 2004 3.3 Articles of Incorporation of Inter Parfums Holdings, S.A. 3.3.1 Articles of Incorporation of Inter Parfums Holdings, S.A. (English translation) 3.4 Articles of Incorporation of Interparfums SA 3.4.1 Articles of Incorporation of Interparfums SA (English translation) 10.25 Employment Agreement between the Company and Philippe Benacin dated July 29, 1991 10.26 Lease for portion of 15th Floor, 551 Fifth Avenue, New York, New York 10.61 Lease for 60 Stults Road, South Brunswick, NJ between Forsgate Industrial Complex, LP, and Jean Philippe Fragrances, Inc. dated July 10, 1995 10.61.1 Third Amendment to Lease for 60 Stults Road, South Brunswick, NJ 10.161 Form of Option Agreement for Options Granted to Executive Officers on December 31, 2014 with Schedule of Option Holders and Options Granted 10.162 Form of Option Agreement for Options Granted to Executive Officers on January 28, 2015 with Schedule of Option Holders and Options Granted 10.172 Form of Option Agreement for Options Granted to Executive Officers on December 31, 2019 with Schedule of Option Holders and Options Granted 10.173 Lease for Interparfums SA Distribution Center (confidential information in this exhibit was omitted) 72 Exhibit No. Description 21 List of Subsidiaries 23 Consent of Mazars USA LLP 31.1 Certification Required by Rule 13a-14 of Chief Executive Officer 31.2 Certification Required by Rule 13a-14 of Chief Financial Officer 32.1 Certification Required by Section 906 of the Sarbanes-Oxley Act by Chief Executive Officer 32.2 Certification Required by Section 906 of the Sarbanes-Oxley Act by Chief Executive Officer 101 Interactive data files The following documents heretofore filed with the Commission more than five (5) years ago are hereby filed again as exhibits to this Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 2020: Exhibit No. Description Page Nos. 3.1 Interparfums Singapore Pte. Ltd Memorandum and Articles of Association 3.2 Interparfums Luxury Brands, Inc. Certificate of Incorporation 10.163 Form of Option Agreement for Options Granted to Executive Officers on December 31, 2015 with Schedule of Option Holders and Options Granted The following documents are filed with this report: Exhibit No. Description Page Nos. 21 List of Subsidiaries 23 Consent of Mazars USA LLP 31.1 Certification Required by Rule 13a-14 of Chief Executive Officer 31.2 Certification Required by Rule 13a-14 of Chief Financial Officer 32.1 Certification Required by Section 906 of the Sarbanes-Oxley Act by Chief Executive Officer 32.2 Certification Required by Section 906 of the Sarbanes-Oxley Act by Chief Executive Officer 73