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, 2021. 54 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. 55 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 21 meetings (or executed consents in lieu thereof), including meetings of committees of the full board of directors during 2021, 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. 56 During 2021, 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 2021, 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. 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 2021, 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 2021, 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. We have 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. In addition, Nasdaq has adopted a Board Diversity Rule, which will require Nasdaq listed companies to publicly disclose board-level diversity statistics using a standardized template commencing on the later of August 8, 2022 or the date the filing of a listed company’s proxy statement for its 2022 annual meeting. In addition, in the following year, we will be required to disclose whether or not we have one director that is diverse under the applicable Nasdaq rule, and if not, then why not. By the 2025 annual meeting, we will be required to disclose whether or not we have two directors that are diverse under the applicable Nasdaq rule, and if not, then why not. We do not foresee any issue in complying with Nasdaq Board Diversity Rule at this time. 57 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 61, 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 63, 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 President of our Company and 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. Russell Greenberg Mr. Greenberg, age 65, 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. 58 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 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. Following the successful sale in 2021, Mr. Bensoussan stepped down from the board of Feelunique.com one of Europe’s largest online beauty retailer’s after serving 9 years. 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, Yonderland, Europe’s largest premium outdoor retailer, SNS, a prominent aspirational streetwear and entertainment hub and Internet Fusion Group, a leading e-commerce site for niche lifestyle products. Previously Mr. Bensoussan was as director of, and had an indirect ownership interest J. Choo Limited until July 2011, and was CEO from 2001 to 2007, and was a member of the Board of Jimmy Choo Ltd, a privately held luxury shoe wholesaler and retailer, from 2001 to 2011. We believe Mr. Bensoussan is qualified to serve as a member of our board of directors due to his business and financial acumen, as well as his experience in the retail and branded luxury goods market. Patrick Choël Mr. Choël, age 78, 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. 59 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. recently represented the owners of Buly, the luxury French fragrance and beauty brand, in the sale to LVMH and the owners of Blissim, the French leader in beauty subscription e-commerce, and online beauty retail for an investment by Raise Investissement. In addition, he has just sold We11done, the Korean contemporary fashion and lifestyle brand, to Sequoia Capital. 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. In the mission-driven field, Michel Dyens & Co. recently represented ClimateCare, a prominent UK carbon-offset business, in the sale to Averna Capital and represented the founders of Caboo Paper Products a Vancouver, Canada-based tree-free household paper products brand, for an investment by sustainability-focused venture capital firm Renewal Funds. Among other recent transactions, Michel Dyens & Co. recently represented the Fairtrade and organic coffee brand Ethical Bean Coffee in the sale to Kraft Heinz, and as well as Alter Eco Americas, a leading organic chocolate brand, which we sold to NextWorld Evergreen. 60 In healthy and premium food, Michel Dyens & Co. represented the Fairtrade and organic coffee brand Ethical Bean Coffee in the sale to Kraft Heinz, and as well as Alter Eco Americas, a leading organic chocolate brand, which it sold to NextWorld Evergreen. 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 56, 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, and a director of Lifetime Brands (Nasdaq: LCUT), which is in the home goods 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. 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 81, 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. 61 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. Mr. Harrison just finished his autobiography, Deal Junky , which was published in January 2022. Frederic Garcia-Pelayo Frederic Garcia-Pelayo, age 60, has been with Interparfums SA for more than the past 20 years. He is currently the Executive Vice President and Chief Operating Officer of Interparfums SA, and was previously the Director of its Luxury and Fashion division beginning in March 2005. He was also previously the Director of Marketing and Distribution for Perfume and Cosmetics and was first named Executive Vice President in 2004. Section 16(a) Beneficial Ownership Reporting Compliance Based solely upon a review of Forms 3, 4 and 5 and any amendments to such forms furnished to us, and written representations from various reporting persons furnished to us, we are not aware of any reporting person who has failed to file the reports required to be filed under Section 16(a) of the Securities Exchange Act of 1934 on a timely basis. 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. 62 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 2021 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 the pandemic and economic and political turmoil in certain parts of the world, which resulted in the Company’s record results for 2021. During 2021, the members of such committee consisted of Messrs. Heilbronn and Choël, and Ms. Gabai-Pinsky. 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. 63 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. 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 Ponds 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. 64 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 2021, as the result of the continuing impacts of the COVID-19 pandemic, after the recommendations of Messrs. Madar and Benacin, the compensation committee determined that no executive officer would receive any increase in base salary. In addition, there were no increases in the fees paid to the respective holding companies of Messrs. Madar and Benacin. For 2021, although Mr. Benacin received the same base salary as he did in 2020, his salary was affected by foreign currency conversion rates and was $804,000 for 2021. 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. 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 2021, the base salary of each of Messrs. Santi and Garcia-Pelayo was €408,000, as no executive officer received any increase in base salary due the continuing impact of the COVID-19 pandemic. However, the base salaries of Messrs. Santi and Garcia-Pelayo in 2021 were affected by foreign currency conversion rates and were both $483,000 for 2021. 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 in 2019. Increases in prior years 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. 65 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. 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. For 2021, Mr. Madar did not receive any increase in base salary. Russell Greenberg, the Executive Vice President and Chief Financial Officer, also did not have any salary increase for 2021, and his base salary remained at $720,000. Previously, he had received the same $30,000 increase in base salary for 2020 and 2019. In connection with the previous 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. 66 In recognition of the Company’s turnaround from the effects of the COVID-19 pandemic and record results in 2021, and after the recommendations of Messrs. Madar and Benacin, the compensation committee determined that Mr. Benacin receive a bonus of $166,000. 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 Mr. Benacin was paid discretionary bonus compensation of $110,000. The discretionary bonus compensation for Mr. Benacin has been approximately 30% of his base salary in 2021, 17%, of his base salary in 2020 and approximately 14% in 2019. In addition, bonus compensation for Messrs. Santi and Garcia-Pelayo have remained in lockstep, and each was awarded a discretionary bonus of $378,000 in 2021 or 78% of their base salary. This compares to $296,000 and $324,000 in 2020 and 2019, respectively, or approximately 63% and 73% of their base salaries for services performed in 2020 and 2019, 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. In 2021, although Mr. Greenberg did not receive any increase in base salary due to the continuing impact of the COVID-19 pandemic, he did receive a discretionary bonus of $70,000 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. 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. 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 $34,940. 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 . In prior years, we have linked long-term incentives with corporate performance through the grant of stock options. However, no options were granted in 2021 or 2020 to either employees of United States operations or European operations, but the compensation committee may choose to do so in the future as part of a review of the executive compensation strategy. Interparfums SA Stock Compensation Plan 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, Messrs. Benacin, Madar, Garcia Pelayo and Santi are estimated to receive 4,000 shares each, all subject to adjustment for stock splits. 67 In June 2020, the performance conditions were modified effecting 96 employees. As of December 31, 2021, the number of shares to be distributed, after forfeited shares and adjusted for stock splits, increased to 172,343. 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 $4.6 million. In connection with the 2019 Plan referred to above, 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 2021, each of Messrs. Benacin and Garcia-Pelayo received an automobile allowance of $12,774. 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. 68 Retirement and Pension Plans We maintain a 401(k) plan for United States operations. Commencing in 2021 we started matching the first $6,000 of contribution for each employee, as we have determined that base compensation together with annual bonuses, 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 2021. 2020 and 2019, each of Messrs. Benacin, Santi and Garcia-Pelayo received an increase of $17,773, $17,500, and $16,789, respectively, in their value of deferred compensation earnings. Compensation Committee Report We have reviewed and discussed with management the Compensation Discussion and Analysis provisions to be included in this Annual Report on Form 10-K for fiscal year ended December 31, 2021 and the proxy statement for the upcoming annual meeting of shareholders. Based on this review and discussion, we recommend to the board of directors that the Compensation Discussion and Analysis referred to above be included in this Annual Report on Form 10-K as well as the proxy statement for the upcoming annual meeting of shareholders. Francois Heilbronn Patrick Choël and Veronique Gabai-Pinsky 69 The following table sets forth a summary of all compensation awarded to, earned by or paid to our “named executive officers,” who are our principal executive officer, our principal financial officer, and each of the three most highly compensated executive officers of our company. This table covers all such compensation during fiscal years ended December 31, 2021, December 31, 2020 and December 31, 2019. For all compensation related matters disclosed in the summary compensation table, and elsewhere where applicable, all amounts paid in euro have been converted to U.S. dollars at the average rate of exchange in each year. SUMMARY COMPENSATION TABLE Name and Principal Position Year Salary ($) 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, 2021 1,230,000 -0- -0- -0- -0- -0- -0- 1,230,000 Chairman and 2020 1,230,000 -0- -0- -0- -0- -0- -0- 1,230,000 Chief Executive Officer 2019 630,000 -0- 138,320 353,092 -0- -0- -0- 1,121,412 Russell Greenberg, 2021 720,000 70,000 -0- -0- -0- -0- -0- 790,000 Chief Financial Officer and 2020 720,000 35,000 -0- -0- -0- -0- -0- 755,000 Executive Vice President 2019 690,000 50,000 34,580 353,092 -0- -0- -0- 1,127,672 Philippe Benacin, President Inter 2021 803,504 165,578 -0- -0- -0- 17,733 12,774 999,589 Parfums, Inc., Chief Executive 2020 788,808 130,673 -0- -0- -0- 17,500 12,434 949,415 Officer of Interparfums SA 2019 760,583 109,731 138,320 353,092 -0- 16,789 12,093 1,390,608 Philippe Santi, Executive Vice 2021 482,542 378,464 -0- -0- -0- 17,733 -0- 878,739 President and Chief Financial 2020 469,730 295,596 -0- -0- -0- 17,500 -0- 782,826 Officer, Interparfums SA 2019 443,401 323,593 138,320 141,237 34,028 16,789 -0- 1,097,368 Frédéric Garcia-Pelayo, 2021 482,542 378,464 -0- -0- -0- 17,733 12,774 891,513 Executive Vice President and 2020 469,730 295,596 -0- -0- -0- 17,500 8,980 791,806 Chief Operating Officer Interparfums SA 2019 443,401 323,593 138,320 141,237 34,028 16,789 8,734 1,106,102 70 1 Amounts reflected under Option Awards represent the grant date fair values in 2021, 2020 and 2019 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, 2021 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 $34,940. Calculation of total annual benefits contribution is made according to the following formula: 67% of (Interparfums SA net income, less 2.5% of shareholders’ equity without net income for the year) times a fraction, the numerator of which is wages, and the denominator of which is net income before tax + wages + taxes (other than income tax) + valuation allowances + amortization expenses + interest expenses. Contribution to individual employees is then made pro rata based upon their individual salaries for the year. 3 The following table identifies (i) perquisites and other personal benefits provided to our named executive officers in fiscal 2021, and quantifies those required by SEC rules to be quantified and (ii) all other compensation that is required by SEC rules to be separately identified and quantified. Name and Principal Position Perquisites and other Personal Benefits ($) 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- 12,774 -0- 12,774 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- 12,774 -0- 12,774] 71 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 $34,940. 72 Outstanding Equity Awards at Fiscal Year-End The following table sets forth certain information relating to outstanding equity awards of our Company held by the executive officers listed in the Summary Compensation Table as of December 31, 2021. Option Awards Name Number of Securities Underlying Unexercised Options (#) Exercisable (1) Number of Securities Underlying Unexercised Options (#) Unexercisable Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) Option Exercise Price ($) Option Expiration Date Jean Madar 19,000 -0- -0- 32.825 12/30/22 20,000 (2) 5,000 (2) -0- 43.80 12/29/23 15,000 (2) 10,000 (2) -0- 65.25 12/30/24 10,000 (2) 15,000 (2) -0- 73.09 12/30/25 Russell Greenberg 25,000 -0- -0- 32.825 12/30/22 20,000 5,000 -0- 43.80 12/29/23 15,000 10,000 -0- 65.25 12/30/24 10,000 15,000 -0- 73.09 12/30/25 Philippe Benacin 19,000 -0- -0- 32.825 12/30/22 20,000 (2) 5,000 (2) -0- 43.80 12/29/23 15,000 (2) 10,000 (2) -0- 65.25 12/30/24 10,000 (2) 15,000 (2) -0- 73.09 12/30/25 Philippe Santi 1,200 -0- -0- 32.825 12/30/22 1,200 1,200 -0- 43.80 12/29/23 -0- 1,600 -0- 46.903 1/18/24 2,000 4,000 -0- 65.25 12/30/24 2,000 6,000 -0- 73.09 12/30/25 Frédéric Garcia-Pelayo 1,200 -0- -0- 32.825 12/30/22 1,200 1,200 -0- 43.80 12/29/23 -0- 1,600 -0- 46.903 1/18/24 2,000 4,000 -0- 65.25 12/30/24 2,000 6,000 -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. 73 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($) Jean Madar -0- -0- -0- -0- N/A -0- -0- -0- NA Russell Greenberg -0- -0- -0- -0- N/A -0- -0- -0- NA Philippe Benacin -0- -0- -0- -0- N/A 5,324 443,202 -0- NA Philippe Santi -0- -0- -0- -0- N/A 5,324 443,202 -0- NA Frédéric Garcia-Pelayo -0- -0- -0- -0- N/A 5,324 443,202 -0- NA 1 Estimated number of shares are to be issued only to the extent that the performance conditions have been met. 2 As of December 31, 2021, the closing price of Interparfums SA as reported by Euronext was 73.50 euros, and the exchange rate was 1.1326 U.S. dollars to 1 euro. 74 Option Exercises and Stock Vested The following table sets forth certain information relating to each option exercise affected during the past fiscal year, and each vesting of stock, including restricted stock, restricted stock units and similar instruments of our company during the past fiscal year, for the executive officers of our company listed in the Summary Compensation Table. OPTION EXERCISES AND STOCK VESTED Option Awards Stock Awards Name Number of Shares Acquired on Exercise (#) Value Realized on Exercise ($) 1 Number of Shares Acquired on Vesting (#) Value Realized On Vesting ($) Jean Madar 19,000 1,375,915 0 0 Russell Greenberg 25,000 1,460,464 0 0 Philippe Benacin 19,000 1,277,297 0 0 Philippe Santi 16,000 440,577 0 0 Frédéric Garcia-Pelayo 16,000 452,342 0 0 [Footnotes from table above] 1 Total value realized on exercise of options in dollars is based upon the difference between the fair market value of the common stock on the date of exercise, and the exercise price of the option. Regarding Interparfums SA, our majority-owned French subsidiary which has its shares traded on the Euronext, no options were exercised during the past fiscal year, and there was no vesting of stock, including restricted stock, restricted stock units and similar instruments during the past fiscal year, for the executive officers of our company listed in the Summary Compensation Table. Pension Benefits The following table sets forth certain information relating to payment of benefits in connection with retirement plans during the past fiscal year, for the executive officers of our company listed in the Summary Compensation Table. PENSION BENEFITS Name Plan Name Number of Years Credited Service (#) Present Value of Accumulated Benefit* ($) 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 315,233 17,733 Philippe Santi Inter Parfums SA Pension Plan NA 305,233 17,733 Frédéric Garcia-Pelayo Inter Parfums SA Pension Plan NA 305,233 17,733 * Does not include any contributions made by prior employers, or individually by the recipients as such information is confidential under French law. 75 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. 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 2021, our last completed fiscal year: ● Our median employee’s compensation was $69,673 ● Our Chief Executive Officer’s total 2021 compensation was $2,605,915 ● Accordingly, our 2021 CEO to Median Employee Pay Ratio was 37.4 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, 2021 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, 2021. We did not use any material estimates, assumptions, adjustments or statistical sampling to determine the worldwide median employee. 76 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 2021, Mr. Benacin received an annual salary of approximately $804,000, and automobile expenses of approximately $12,774 which are subject to increase at 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 2019 through 2021 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, which were granted to his personal holding company instead of Mr. Benacin directly. 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. 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 $945,000, effective as of January 1, 2020. For 2021, the compensation to Mr. Madar and the fees paid to Jean Madar Holding SAS were unchanged from 2020. In addition, in December 2018 and December 2019, we granted options to purchase 25,000 shares for the benefit of Mr. Madar, which were granted to his personal holding company instead of Mr. Madar directly. 77 Compensation of Directors The following table sets forth certain information relating to the compensation for each of our directors who is not an executive officer of our Company named in the Summary Compensation Table for the past fiscal year. DIRECTOR COMPENSATION Name Fees Earned or Paid in Cash ($) 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 20,000 -0- 17,020 -0- -0- 58,861 95,881 Robert Bensoussan 3 12,000 -0- 17,020 -0- -0- 36,032 65,052 Patrick Choël 4 20,000 -0- 17,020 -0- -0- 39,254 76,274 Michel Dyens 5 12,000 -0- 17,020 -0- -0- 87,095 116,115 Veronique Gabai-Pinsky 6 20,000 -0- 17,020 -0- -0- -0- 37,020 Gilbert Harrison 7 12,000 -0- 17,020 -0- -0- 120,000 149,020 [Footnotes from table above] 1. Represents gain from exercise of stock options, except for Mr. Harrison, which consists of a $120,000 payment made in 2021 to the company controlled by Mr. Harrison in connection with the acquisition of the Donna Karan license. See “Fee for Director’s Company” in Item 13, Certain Relationships and Related Transactions, and Director Independence, in this annual report on Form 10-K. 2. As of the end of the last fiscal year, Mr. Heilbronn held options to purchase an aggregate of 5,000 shares of our common stock. 3. As of the end of the last fiscal year, Mr. Bensoussan held options to purchase an aggregate of 5,000 shares of our common stock. 4. As of the end of the last fiscal year, Mr. Choël held options to purchase an aggregate of 4,500 shares of our common stock. 5. As of the end of the last fiscal year, Mr. Dyens held options to purchase an aggregate of 5,000 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 6.000 shares of our common stock. 7. As of the end of the last fiscal year, Mr. Harrison held options to purchase an aggregate of 6,000 shares of our common stock. 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. The compensation for the nonemployee directors remained the same for 2021, except for Mr. Harrison. During 2021, a company owned by Mr. Harrison received a fee equal to $300,000, in connection with the Donna Karan license agreement, which is effective on July 1, 2022. A payment of $120,000 was made in 2021 to Mr. Harrison’s company, and the balance will be paid, $120,000 one year later in 2022, and $60,000 two years later in 2023. 78 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. 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. However, our board of directors cancelled the automatic grant of options to the nonemployee directors effective with the grant that had been scheduled for February 1, 2022. 79 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. Messrs. Madar and Benacin own 99.99% of their respective personal holding companies. As of January 26, 2022, we had 31,836,545 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 7,109,341 2 22.4 % Philippe Benacin c/o Interparfums SA 4, Rond Point des Champs Elysees 75008 Paris, France 6,910,064 3 21.7 % Russell Greenberg c/o Inter Parfums, Inc. 551 Fifth Avenue New York, NY 10176 77,500 4 Less than 1 % Philippe Santi Interparfums SA 4, Rond Point des Champs Elysees 75008, Paris France 7,200 5 Less than 1 % Francois Heilbronn 60 Avenue de Breteuil 75007 Paris, France 26,438 6 Less than 1 % Robert Bensoussan c/o Sirius Equity LLP 52 Brook Street W1K 5DS London 9,875 7 Less than 1 % Patrick Choël 140 Rue de Grenelle 75007, Paris, France 6,375 8 Less than 1 % Michel Dyens Michel Dyens & Co. 17 Avenue Montaigne 75008 Paris, France 6,875 9 Less than 1 % Veronique Gabai-Pinsky 200 East End Avenue New York NY 10128 3,875 10 Less than 1 % Gilbert Harrison Harrison Group 745 Fifth Avenue, Suite 514 New York, NY 10151 3,875 11 Less than 1 % Frederic Garcia-Pelayo Interparfums SA 4, Rond Point des Champs Elysees 75008, Paris, France 6,555 12 Less than 1 % Blackrock, Inc. 55 East 52 nd Street New York, NY 10055 2,662,032 13 8.4 % The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355 1,983,427 14 6.2 % Ameriprise Financial, Inc. 145 Ameriprise Financial Center Minneapolis, MN 55474 1,744,296 15 5.4 % All Directors and Officers (As a Group 10 Persons) 14,167,793 16 44.2 % 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. 2 Consists of 13,000 shares held directly, 7,032,341 shares held indirectly through Jean Madar Holding SAS, a personal holding company, and options to purchase 64,000 shares. 3 Consists of 6,846,064 shares held indirectly through Philippe Benacin Holding SAS, a personal holding company, and options to purchase 64,000 shares. 4 Consists of shares 7,500 shares held directly and options to purchase 70,000 shares. 5 Consists of options to purchase shares. 6 Consists of 24,063 shares held directly and options to purchase 2,375 shares. 7 Consists of 7,500 shares held directly and options to purchase 2,375 shares. 8 Consists of 4,250 shares held directly and options to purchase 2,125 shares. 9 Consists of 4,000 shares held directly and options to purchase 2,875 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 6 of Blackrock, Inc. dated February 1, 2022 as filed with the Securities and Exchange Commission. 14 Information based upon Schedule 13G Amendment 5 of The Vanguard Group, an investment advisor, dated February 9, 2022 as filed with the Securities and Exchange Commission. Information based upon Schedule 13G Amendment 1 of Ameriprise Financial, Inc. (“AFI”) dated February 14, 2022 as filed with the Securities and Exchange Commission. AFI disclaims beneficial ownership of any shares reported on this Schedule 13G. 15 Consists of 13,938,718 shares held directly or indirectly, and options to purchase 229,255 shares. 80 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 650,440 $57.58 612,535 Equity compensation plans not approved by security holders -0- N/A -0- Total 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 expired Paul Smith license agreement. We also provide (or had provided on our behalf) certain financial, accounting and legal services for Interparfums SA, and during 2021, 2020 and 2019 fees for such services were $443,625, $450,750 and $483,675, respectively. During 2018, Interparfums SA, loaned the Company $10 million. This loan was repayable in ten (10) equal monthly payments of $1 million of principal plus accrued interest at 2% per annum, with the first payment made on May 31, 2019, and the last payment 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. In September 2021, Interparfums Luxury Brands, Inc., an indirect majority-owned subsidiary of the Company, loaned the Company $24 million, which is repayable in 12 equal monthly payments with interest at 2% per annum commencing on January 31, 2022. In December 2021, 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. 81 Fee for Director’s Company In connection with the acquisition of the Donna Karan license, which takes effect on July 1, 2022 as discussed above, we agreed to pay to the company controlled by Mr. Gilbert Harrison, a director, the sum of $300,000, payable over time, with $120,000 being paid in 2021, and deferred payments of $120,000 one year later and $60,000 two years later. 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 2021 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, which were granted to his personal holding company instead of Mr. Benacin directly. 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. 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. For 2021, the compensation to Mr. Madar and the fees paid to Jean Madar Holding SAS were unchanged from 2020. 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. 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. 82 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. 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. 83 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, 2021 and December 31, 2020. 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 $1.2 and $1.1 and million for 2021 and 2020, respectively. Audit-Related Fees Mazars USA LLP did not bill us for any audit-related services during 2021 and 2020. Tax Fees Mazars USA LLP billed us $49,300 and $34,500 for tax services during 2021 and 2020, respectively. All Other Fees Mazars S.A. billed us $3,000 and $3,500 for other services during 2021 and 2020, 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 2021, 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, 2021. ● 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, 2021. 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, 2021. 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. 84 ● 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. 85 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, 2021 and 2020 F-5 Consolidated Statements of Income for each of the years in the three-year period ended December 31, 2021 F-6 Consolidated Statements of Comprehensive Income (Loss) for each of the years in the three-year period ended December 31, 2021 F-7 Consolidated Statements of Changes in Shareholders’ Equity for each of the years in the three-year period ended December 31, 2021 F-8 Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, 2021 F-9 Notes to Consolidated Financial Statements F-10 (a)(2) Financial Statement Schedule: Schedule II – Valuation and Qualifying Accounts F-33 (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. 86 INTER PARFUMS, INC. AND SUBSIDIARIES Consolidated Financial Statements and Schedule Index Page Report of Independent Registered Public Accounting Firm F-2 ( Mazars USA LLP, New York, New York, PCAOB ID 339 ) Audited Financial Statements: Consolidated Balance Sheets as of December 31, 2021 and 2020 F-5 Consolidated Statements of Income for each of the years in the three-year period ended December 31, 2021 F-6 Consolidated Statements of Comprehensive Income for each of the years in the three-year period ended December 31, 2021 F-7 Consolidated Statements of Changes in Shareholders’ Equity for each of the years in the three-year period ended December 31, 2021 F-8 Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, 2021 F-9 Notes to Consolidated Financial Statements F-10 Financial Statement Schedule: Schedule II – Valuation and Qualifying Accounts F-33 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, 2021 and 2020, 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, 2021, 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, 2021, 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, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2021, 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, 2021, 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 our especially challenging, subjective, or complex judgments. The communication of critical audit matter 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, 2021. 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 testing whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If impairment indicators exist, the undiscounted future cash flows associated with the expected service potential of the asset are compared to the carrying value of the asset. If the projection of undiscounted cash flows is less than the carrying value of a finite-lived intangible asset, an impairment charge would be recorded. 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 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 and 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 corroborating 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, evaluating whether the assumptions used were reasonable considering current information as well as future expectations, and 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 to third party market data. Mazars USA LLP /s/ Mazars USA LLP We have served as the Company's auditor since 2004. New York , New York March 1, 2022 F- 4 INTER PARFUMS, INC. AND SUBSIDIARIES Consolidated Balance Sheets December 31, 2021 and 2020 (In thousands except share and per share data) Assets 2021 2020 Current assets: Cash and cash equivalents $ 159,613 $ 169,681 Short-term investments 160,014 126,627 Accounts receivable, net 159,281 124,057 Inventories 198,914 158,822 Receivables, other 10,308 1,815 Other current assets 21,375 16,912 Income taxes receivable 210 2,806 Total current assets 709,715 600,720 Property, equipment and leasehold improvements, net 149,352 19,580 Right-of-use assets, net 33,728 24,734 Trademarks, licenses and other intangible assets, net 214,047 214,108 Deferred tax assets 7,936 8,041 Other assets 30,586 22,962 Total assets $ 1,145,364 $ 890,145 Liabilities and Equity Current liabilities: Current portion of long-term debt $ 15,911 $ 14,570 Current portion of lease liabilities 6,014 5,133 Accounts payable - trade 81,980 35,576 Accrued expenses 136,677 95,629 Income taxes payable 4,328 5,297 Total current liabilities 244,910 156,205 Long–term debt, less current portion 132,902 10,136 Lease liabilities, less current portion 29,220 21,354 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, 31,830,420 and 31,608,588 shares at December 31, 2021 and 2020, respectively 32 32 Additional paid-in capital 87,132 75,708 Retained earnings 560,663 503,567 Accumulated other comprehensive loss ( 38,432 ) ( 5,997 ) Treasury stock, at cost, 9,864,805 common shares at December 31, 2021 and 2020 ( 37,475 ) ( 37,475 ) Total Inter Parfums, Inc. shareholders’ equity 571,920 535,835 Noncontrolling interest 166,412 166,615 Total equity 738,332 702,450 Total liabilities and equity $ 1,145,364 $ 890,145 See accompanying notes to consolidated financial statements. F- 5 INTER PARFUMS, INC. AND SUBSIDIARIES Consolidated Statements of Income Years ended December 31, 2021, 2020, and 2019 (In thousands except share and per share data) 2021 2020 2019 Net sales $ 879,516 $ 539,009 $ 713,514 Cost of sales 322,614 208,278 267,578 Gross margin 556,902 330,731 445,936 Selling, general, and administrative expenses 406,459 260,648 341,209 Impairment loss 2,393 — — Income from operations 148,050 70,083 104,727 Other expenses (income): Interest expense 2,825 1,970 2,146 (Gain) loss on foreign currency ( 2,338 ) 2,178 1,128 Interest and investment income ( 3,403 ) ( 2,865 ) ( 3,693 ) Other income ( 53 ) ( 549 ) — Other expenses (income) ( 2,969 ) 734 ( 419 ) Income before income taxes 151,019 69,349 105,146 Income taxes 40,992 19,381 29,076 Net income 110,027 49,968 76,070 Less: Net income attributable to the noncontrolling interest 22,616 11,749 15,821 Net income attributable to Inter Parfums, Inc. $ 87,411 $ 38,219 $ 60,249 Net income attributable to Inter Parfums, Inc. common shareholders: Basic $ 2.76 $ 1.21 $ 1.92 Diluted $ 2.75 $ 1.21 $ 1.90 Weighted average number of shares outstanding: Basic 31,676,796 31,536,659 31,451,093 Diluted 31,835,408 31,654,544 31,688,700 Dividends declared per share $ 1.00 $ 0.33 $ 1.16 See accompanying notes to consolidated financial statements. F- 6 INTER PARFUMS, INC. AND SUBSIDIARIES Consolidated Statements of Comprehensive Income Years ended December 31, 2021, 2020, and 2019 (In thousands except share and per share data) 2021 2020 2019 Net income $ 110,027 $ 49,968 $ 76,070 Other comprehensive income: Net derivative instrument income (loss), net of tax ( 1,367 ) ( 19 ) 22 Transfer of OCI into earnings — ( 52 ) ( 136 ) Translation adjustments, net of tax ( 42,967 ) 47,912 ( 8,712 ) Other Comprehensive Income (Loss), before Tax ( 44,334 ) 47,841 ( 8,826 ) Comprehensive income 65,693 97,809 67,244 Comprehensive income attributable to noncontrolling interests: Net income 22,616 11,749 15,821 Net derivative instrument loss, net of tax ( 375 ) ( 19 ) ( 30 ) Translation adjustments, net of tax ( 11,524 ) 14,004 ( 2,593 ) Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest 10,717 25,734 13,198 Comprehensive income attributable to Inter Parfums Inc. $ 54,976 $ 72,075 $ 54,046 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, 2021, 2020, and 2019 (In thousands except share and per share data) 2021 2020 2019 Common stock, beginning of year $ 32 $ 31 $ 31 Shares issued upon exercise of stock options — 1 — Common stock, end of year 32 32 31 Additional paid-in capital, beginning of year 75,708 70,664 69,970 Shares issued upon exercise of stock options 5,393 2,771 4,458 Share-based compensation 1,566 1,711 1,403 Purchase of subsidiary shares from noncontrolling interests — — ( 5,167 ) Shares issued for license acquisition 5,000 — — Transfer of subsidiary shares purchased ( 535 ) 562 — Additional paid-in capital, end of year 87,132 75,708 70,664 Retained earnings, beginning of year 503,567 474,637 448,731 Net income 87,411 38,219 60,249 Dividends ( 31,690 ) ( 10,406 ) ( 36,349 ) Share-based compensation 1,375 1,117 2,006 Retained earnings, end of year 560,663 503,567 474,637 Accumulated other comprehensive loss, beginning of year ( 5,997 ) ( 39,853 ) ( 33,650 ) Foreign currency translation adjustment, net of tax ( 31,443 ) 33,908 ( 6,119 ) Transfer from other comprehensive income into earnings — ( 52 ) ( 136 ) Net derivative instrument gain (loss), net of tax ( 992 ) — 52 Accumulated other comprehensive loss, end of year ( 38,432 ) ( 5,997 ) ( 39,853 ) Treasury stock, beginning and end of year ( 37,475 ) ( 37,475 ) ( 37,475 ) Net income - - - Treasury stock, beginning and end of year ( 37,475 ) ( 37,475 ) ( 37,475 ) Noncontrolling interest, beginning of year 166,615 140,994 138,139 Net income 22,616 11,749 15,821 Foreign currency translation adjustment, net of tax ( 11,524 ) 14,004 ( 2,593 ) Net derivative instrument loss, net of tax ( 375 ) ( 19 ) ( 30 ) Purchase of subsidiary shares from noncontrolling interests — — ( 920 ) Dividends ( 9,836 ) ( 324 ) ( 9,654 ) Share-based compensation ( 293 ) 350 231 Transfer of subsidiary shares purchased ( 791 ) ( 139 ) — Noncontrolling interest, end of year 166,412 166,615 140,994 Total equity 702,450 608,998 585,746 Net income 110,027 49,968 76,070 Total equity $ 738,332 $ 702,450 $ 608,998 See accompanying notes to consolidated financial statements. F- 8 INTER PARFUMS, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows Years ended December 31, 2021, 2020, and 2019 (In thousands) 2021 2020 2019 Cash flows from operating activities: Net income $ 110,027 $ 49,968 $ 76,070 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization including impairment loss 12,698 9,067 8,729 Provision for doubtful accounts 853 4,824 1,380 Noncash stock compensation 2,853 3,029 3,394 Share of income of equity investment ( 53 ) ( 549 ) — Lease expense 7,302 5,483 6,021 Deferred tax expense (benefit) ( 465 ) 581 ( 2,330 ) Change in fair value of derivatives 65 ( 137 ) ( 169 ) Changes in: Accounts receivable ( 45,395 ) 13,157 1,124 Inventories ( 49,815 ) 19,333 ( 5,925 ) Other assets ( 16,725 ) 1,176 ( 4,945 ) Operating lease liabilities ( 7,503 ) ( 5,421 ) ( 4,953 ) Accounts payable and accrued expenses 103,046 ( 32,239 ) ( 4,960 ) Income taxes, net 2,698 ( 3,279 ) 3,016 Net cash provided by operating activities 119,586 64,993 76,452 Cash flows from investing activities: Purchases of short-term investments ( 55,691 ) ( 7,582 ) ( 97,958 ) Proceeds from sale of short-term investments 10,644 11,513 44,814 Purchase of property, equipment and leasehold improvements ( 141,274 ) ( 11,011 ) ( 5,427 ) Payment for intangible assets acquired ( 1,545 ) ( 1,251 ) ( 6,067 ) Purchase of equity investment — ( 13,998 ) — Net cash used in investing activities ( 187,866 ) ( 22,329 ) ( 64,638 ) Cash flows from financing activities: Repayment of long-term debt ( 43,056 ) ( 13,725 ) ( 22,321 ) Proceeds from issuance of long-term debt 157,382 13,438 — Proceeds from exercise of options 5,393 2,771 4,458 Dividends paid ( 31,690 ) ( 20,805 ) ( 34,579 ) Dividends paid to noncontrolling interests ( 9,836 ) ( 324 ) ( 9,654 ) Purchase of subsidiary shares from noncontrolling interests — — ( 6,087 ) Net cash provided by (used in) financing activities 78,193 ( 18,645 ) ( 68,183 ) Effect of exchange rate changes on cash ( 11,207 ) 12,245 ( 3,350 ) Net increase (decrease) in cash and cash equivalents ( 1,294 ) 36,264 ( 59,719 ) Cash and cash equivalents – beginning of year 169,681 133,417 193,136 Cash and cash equivalents – end of year $ 168,387 $ 169,681 $ 133,417 Supplemental disclosures of cash flow information: Cash paid for: Interest $ 2,468 $ 1,105 $ 1,764 Income taxes 40,497 21,772 26,332 See accompanying notes to consolidated financial statements. F- 9 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2021, 2020 and 2019 (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 license the Montblanc, Jimmy Choo, Coach and GUESS brand names. As a percentage of net sales, product sales for the Company’s largest brands were as follows: Schedule of lanvin brand name for our class Year Ended December 31, 2021 2020 2019 Montblanc 19 % 21 % 22 % Jimmy Choo 18 % 16 % 16 % Coach 16 % 17 % 14 % GUESS 12 % 11 % 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 and its subsidiaries, 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. The Company also has short-term investments which consist of certificates of deposit and other contracts with maturities greater than three months and available for sale marketable equity securities. 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, 2021, 2020 and 2019 (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 $ 2.2 million and $ 5.5 million as of December 31, 2021 and 2020, 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. Property, Equipment and Leasehold Improvements Property, 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 has not yet begun on property recently purchased, as it has not yet been put into service. Depreciation provided on equipment used to produce inventory, such as tools and molds, is included in cost of sales. F- 11 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2021, 2020 and 2019 (In thousands except share and per share data) 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 7.47 % and 6.99 % in 2021 and 2020, 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. 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 $ 10.1 million , $ 5.0 million and $ 7.7 million in 2021, 2020 and 2019, 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 2021, 2020 or 2019. 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 $ 5.1 million and $ 3.6 million at December 31, 2021 and 2020, respectively, and the amounts recognized for the rights to recover products was $ 1.9 million and $ 1.4 million at December 31, 2021 and 2020, 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, 2021, 2020 and 2019 (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 $ 171.8 million , $ 91.7 million and $ 144.6 million for 2021, 2020 and 2019, respectively. Costs relating to purchase with purchase and gift with purchase promotions that are reflected in cost of sales aggregated $ 37.6 million , $ 26.4 million and $ 38.9 million in 2021, 2020 and 2019, 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 15 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 12 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, 2021, 2020 and 2019 (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 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, 2021, 2020 and 2019 (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. 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. In all jurisdictions in which we operate we have been following guidance from authorities and health officials. 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 and caused a significant unfavorable impact on our results of operations in 2020. Business significantly improved in the second half of 2020 and continued to improve throughout 2021, as retail stores reopened, and consumers increased online purchasing. While we expect this trend to continue, as the luxury fragrance industry has shown continued resilience, the introduction of variants of COVID-19 in various parts of the world has caused the temporary re-implementation of governmental restrictions to prevent further spread of the virus. In addition, international air travel has remained curtailed in many jurisdictions due to both governmental restrictions and consumer health concerns. While COVID-19 has significantly restricted international travel in the near-term, we continue to believe that global travel retail will once again be a growth opportunity for the long-term. Lastly, the improved economy has put significant strains on our supply chain causing disruptions affecting the procurement of components, the ability to transport goods, and related cost increases. These disruptions have come at a time when demand for our product lines has never been stronger or more sustained. We have been addressing this issue since the beginning of 2021, by ordering well in advance of need and in larger quantities. Going forward, we aim to carry more inventory overall, source the same components from multiple suppliers and when possible, manufacture products closer to where they are sold. We do not expect the supply chain bottlenecks to begin lifting until later in 2022. Therefore, despite recent business improvement, the impact of the COVID-19 pandemic may have a material adverse effect on our results of our operations, financial position and cash flows through at least the end of 2022. (3) Recent Agreements Salvatore Ferragamo In October 2021, we closed on a transaction agreement with Salvatore Ferragamo S.p.A., whereby an exclusive and worldwide license was granted for the production and distribution of Ferragamo brand perfumes. Our rights under this license are subject to certain minimum advertising expenditures and royalty payments as are customary in our industry. The license became effective in October 2021 and will last for 10 years with a 5-year optional term, subject to certain conditions. F- 15 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2021, 2020 and 2019 (In thousands except share and per share data) With respect to the management and coordination of activities related to the license agreement, the Company operates through a wholly-owned Italian subsidiary based in Florence, that was acquired from Salvatore Ferragamo on October 1, 2021. The acquisition together with the license agreement was accounted for as an asset acquisition. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed on October 1, 2021. All amounts have been translated to U.S. dollars at the October 1, 2021 exchange rate. Inventories $ 17,805 Trademarks and licenses 15,880 Other assets 3,033 Assets acquired 36,718 Liabilities assumed ( 958 ) $ 35,760 Emanuel Ungaro In October 2021, we also entered into a 10-year exclusive global licensing agreement a with a 5-year optional term subject to certain conditions, with Emanuel Ungaro Italia S.r.l, for the creation, development and distribution of fragrances and fragrance-related products, under the Emanuel Ungaro brand. Our rights under this license are subject to certain minimum advertising expenditures and royalty payments as are customary in our industry. Donna Karan and DKNY In September 2021, we entered into a long-term global licensing agreement for the creation, development and distribution of fragrances and fragrance-related products under the Donna Karan and DKNY brands. Our rights under this license are subject to certain minimum advertising expenditures and royalty payments as are customary in our industry. With this agreement, we are gaining several well-established and valuable fragrance franchises, most notably Donna Karan Cashmere Mist and DKNY Be Delicious , as well as a significant loyal consumer base around the world. In connection with the grant of license, we issued 65,342 shares of Inter Parfums, Inc. common stock valued at $5.0 million to the licensor. The exclusive license is effective July 1, 2022, and we are planning to launch new fragrances under these brands in 2023. French Tax Settlement The French authorities had considered 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. In June 2021, a global settlement agreement was reached with the French Tax Authorities, whereby Interparfums SA paid in December 2021, € 2.5 million (approximately $ 2.9 million ) effectively lowering the Lanvin brand royalty rate charged by IP Suisse for the periods from 2017 through 2020. Interparfums SA also agreed to apply the lower rate in 2021 through 2025 and to transfer the Lanvin brand from IP Suisse to Interparfums SA by December 31, 2025. Land and Building Acquisition - Future Headquarters in Paris In April 2021, Interparfums SA, completed the acquisition of its future headquarters at 10 rue de Solférino in the 7th arrondissement of Paris from the property developer. This is an office complex combining three buildings connected by two inner courtyards, and consists of approximately 40,000 total sq. ft. F- 16 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2021, 2020 and 2019 (In thousands except share and per share data) The $ 142 million purchase price includes the complete renovation of the site. As of December 31, 2021, $136.1 million of the purchase price, including approximately $ 3.1 million of acquisition costs, is included in property, equipment and leasehold improvements on the accompanying balance sheet as of December 31, 2021. Approximately $ 8.8 million of cash held in escrow is included in other assets on the accompanying balance sheet as of December 31, 2021. In addition, the Company borrowed $ 17.0 million pursuant to a short-term loan equal to the VAT credit, and in July 2021, the $ 17.0 million VAT credit was reimbursed by the French Tax Authorities and the loan was repaid. The acquisition was financed by a 10 -year € 120 million (approximately $ 136 million) bank loan which bears interest at one-month Euribor plus 0.75% . Approximately € 80 million of the variable rate debt was swapped for fixed interest rate debt with a maximum interest rate of 2%. 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 . Rochas Fashion Effective January 1, 2021, we entered into a new license agreement modifying our Rochas fashion business model. The new agreement calls for a reduction in royalties to be received. As a result, in the first quarter of 2021, we took a $ 2.4 million impairment charge on our Rochas fashion trademark. The new license also contains an option for the licensee to buy-out the Rochas fashion trademarks in June 2025 at its then fair market value. 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, 2021. (4) Inventories Schedule of inventories December 31, 2021 2020 Raw materials and component parts $ 111,312 $ 66,492 Finished goods 87,602 92,330 Inventories $ 198,914 $ 158,822 Overhead included in inventory aggregated $ 3.7 million and $ 5.4 million as of December 31, 2021 and 2020, 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 $ 15.8 million and $ 9.4 million as of December 31, 2021 and 2020, respectively. F- 17 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2021, 2020 and 2019 (In thousands except share and per share data) (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. Schedule of fair value, assets measured on recurring basis Fair Value Measurements at December 31, 2021 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 $ 160,014 $ — $ 160,014 $ — Liabilities: Foreign currency forward exchange contracts accounted for using hedge accounting $ 1,982 $ — $ 1,982 $ — Foreign currency forward exchange contracts not accounted for using hedge accounting 63 — 63 $ — Interest rate swaps ( 234 ) — ( 234 ) — $ 1,811 $ — $ 1,811 $ — 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 — Total Assets $ 126,880 $ — $ 126,880 $ — The carrying amount of cash and cash equivalents including money market funds, short-term investments including marketable equity securities, 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- 18 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2021, 2020 and 2019 (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. 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, 2021. For the year ended December 31, 2021, interest expense includes a gain of $0.2 million, resulting from 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 swap is included in long-term debt on the accompanying balance sheets. The valuation of foreign currency forward exchange contracts at December 31, 2021 and December 31, 2020, resulted in an asset and is included in other current assets on the accompanying balance sheets. At December 31, 2021, the Company had foreign currency contracts in the form of forward exchange contracts with notional amounts of approximately U.S. $ 64.5 million and GB £ 3.5 million , which all have maturities of less than one year. F- 19 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2021, 2020 and 2019 (In thousands except share and per share data) (7) Property, Equipment and Leasehold Improvements Schedule of equipment and leasehold improvements December 31, 2021 2020 Land and Building (construction in progress) $ 136,131 $ — Equipment 52,036 51,060 Leasehold improvements 2,082 1,989 190,249 53,049 Less accumulated depreciation and amortization 40,897 33,469 $ 149,352 $ 19,580 Depreciation and amortization expense was $ 4.4 million , $ 3.8 million and $ 3.7 million in 2021, 2020, and 2019, respectively. (8) Trademarks, Licenses and Other Intangible Assets Schedule of trademarks, licenses and other intangible assets 2021 Gross Accumulated Net Book Amount Amortization Value Trademarks (indefinite lives) $ 119,712 $ — $ 119,712 Trademarks (finite lives) 43,820 68 43,752 Licenses (finite lives) 109,682 62,286 47,396 Other intangible assets (finite lives) 17,775 14,588 3,187 Subtotal 171,277 76,942 94,335 Total $ 290,989 $ 76,942 $ 214,047 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 Amortization expense was $ 5.9 million , $ 5.3 million and $ 5.0 million in 2021, 2020 and 2019, respectively. Amortization expense is expected to approximate $ 5.4 million in 2022, $ 4.4 million in 2023, $ 4.2 million in 2024, 2025 and 2026. 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- 20 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2021, 2020 and 2019 (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 was an impairment charge for trademarks with indefinite useful lives of $ 2.4 million in 2021 relating to our Rochas fashion business. The fair values used in our evaluations are estimated based upon discounted future cash flow projections using a weighted average cost of capital of 7.47 %, 6.99 %, and 7.94 % as of December 31, 2021, 2020 and 2019, 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 on July 1, 2027 for €70 million (approximately $ 79 million) (residual value) in accordance with an amendment signed in 2021. 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, 2021 2020 Advertising liabilities $ 31,215 $ 12,164 Salary (including bonus and related taxes) 19,993 14,605 Royalties 19,154 16,966 Due vendors (not yet invoiced) 45,707 31,698 Retirement reserves 10,234 11,889 Refund (return) liability 5,128 3,616 Other 5,246 4,691 Accrued expenses $ 136,677 $ 95,629 (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 Secured Overnight Financing Rate (“SOFR”) plus 2 % (the SOFR was 0.05 % as of December 31, 2021). The line of credit which has a maturity date of December 16, 2022 , is expected to be renewed on an annual basis. Borrowings outstanding pursuant to lines of credit were zero as of December 31, 2021 and 2020. The Company’s foreign subsidiaries have available credit lines, including several bank overdraft facilities totaling approximately $ 28 million. These credit lines bear interest at EURIBOR plus between 0.5 % and 0.8 % (EURIBOR was minus 0.570 % at December 31, 2021). Borrowings outstanding pursuant to these bank overdraft facilities were zero as of December 31, 2021 and 2020. F- 21 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2021, 2020 and 2019 (In thousands except share and per share data) As there were no borrowings outstanding as of December 31, 2021 and 2010, there is no weighted average interest rate on short-term borrowings as of December 31, 2021 and 2020. (11) Long-Term Debt Long-term debt consists of the following: December 31, 2021 2020 $ 135.9 million payable in 120 equal monthly installments of $ 1.1 million beginning in April 2021, bearing interest at one-month Euribor plus 0.75 % $ 124,375 $ — $ 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 10,569 11,208 $ 17 million payable in 10 equal annual installments of $ 1.7 million beginning in October 2021 including interest imputed at 2.0 % per annum 13,869 — $ 13.4 million term loan amended such that the loan was repaid in February 2021 plus interest at 0.85 % per annum — 13,498 148,813 24,706 Less current maturities 15,911 14,570 Total $ 132,902 $ 10,136 In April 2021, to finance the acquisition of Interparfums SA’s future corporate headquarters, the Company entered into a $ 135.9 million (€120 million) ten-year credit agreement. Approximately $90.6 million (€80.0 million) of the variable rate debt was swapped for variable interest rate debt with maximum rate of 2% per annum. The swap is a derivative instrument and is therefore recorded at fair value and changes in fair value are reflected in the accompanying consolidated statements of income. Maturities of long-term debt subsequent to December 31, 2021 are approximately $ 15.9 million in 2022 and $ 16.4 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. F- 22 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2021, 2020 and 2019 (In thousands except share and per share data) As of December 31, 2021, the weighted average remaining lease term was 6.1 years and the weighted average discount rate used to determine the operating lease liability was 2.5 %. Rental expense related to operating leases was $ 8.2 million , $ 6.2 million , and $ 7.5 million for the years ended December 31, 2021, 2020 and 2019, respectively. Operating lease payments included in operating cash flows totaled $ 7.5 million and noncash additions to operating lease assets totaled $ 12.2 million . Maturities of lease liabilities subsequent to December 31, 2021 are as follows: (In thousands) 2022 $ 6,541 2023 6,776 2024 5,787 2025 4,704 2026 4,087 Thereafter 10,017 37,912 Less imputed interest (based on 2.5% weighted-average discount rate) ( 2,679 ) $ 35,233 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) 2022 $ 191,422 2023 206,241 2024 202,774 2025 199,770 2026 136,776 Thereafter 702,780 $ 1,639,763 Future advertising commitments are estimated based on planned future sales for the license terms that were in effect at December 31, 2021, 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 $ 69.0 million , $ 41.1 million and $ 53.0 million , in 2021, 2020 and 2019, respectively, and represented 7.8 %, 7.6 % and 7.4 % of net sales for the years ended December 31, 2021, 2020 and 2019, respectively. F- 23 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2021, 2020 and 2019 (In thousands except share and per share data) (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 $ 1.4 million , $ 1.7 million and $ 1.4 million in 2021, 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. The following table sets forth information with respect to nonvested options for 2021: Number of Shares Weighted Average Grant Date Fair Value Nonvested options – beginning of year 353,790 $ 12.96 Nonvested options granted 9,000 $ 11.35 Nonvested options vested or forfeited ( 153,280 ) $ 12.19 Nonvested options – end of year 209,510 $ 13.45 The effect of share-based payment expenses decreased income statement line items as follows: Year Ended December 31, 2021 2020 2019 Income before income taxes $ 2,850 $ 3,030 $ 3,390 Net income attributable to Inter Parfums, Inc. 1,880 2,040 2,060 Diluted earnings per share attributable to Inter Parfums, Inc. 0.06 0.06 0.07 The following table summarizes stock option activity and related information for the years ended December 31, 2021, 2020 and 2019: Year ended December 31, 2021 2020 2019 Options Weighted Average Exercise Price Options Weighted Average Exercise Price Options Weighted Average Exercise Price Shares under option - beginning of year 713,210 $ 52.74 815,800 $ 49.89 776,171 $ 41.33 Options granted 9,000 62.18 9,000 69.11 194,050 72.89 Options exercised ( 156,490 ) 34.46 ( 95,570 ) 28.99 ( 130,891 ) 34.06 Options forfeited ( 40,820 ) 62.57 ( 16,020 ) 58.38 ( 23,530 ) 45.48 Shares under option - end of year 524,900 57.58 713,210 52.74 815,800 49.89 F- 24 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2021, 2020 and 2019 (In thousands except share and per share data) At December 31, 2021, options for 612,535 shares were available for future grant under the plans. The aggregate intrinsic value of options outstanding is $ 25.9 million as of December 31, 2021 and unrecognized compensation cost related to stock options outstanding aggregated $ 2.9 million , which will be recognized over the next five years . The weighted average fair values of options granted by Inter Parfums, Inc. during 2021, 2020 and 2019 were $ 11.35 , $ 12.16 and $ 14.14 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, 2021 2020 2019 Weighted-average expected stock-price volatility 25 % 25 % 25 % Weighted-average expected option life 5.0 years 5.0 years 5.0 years Weighted-average risk-free interest rate 0.4 % 1.4 % 1.7 % Weighted-average dividend yield 1.6 % 2.5 % 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, 2021 2020 2019 Proceeds from stock options exercised $ 5,393 $ 2,771 $ 4,458 Tax benefits $ 1,300 $ 400 $ 690 Intrinsic value of stock options exercised $ 7,800 $ 2,873 $ 4,520 F- 25 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2021, 2020 and 2019 (In thousands except share and per share data) The following table summarizes additional stock option information as of December 31, 2021: Exercise prices Options outstanding Options outstanding weighted average remaining contractual life Options exercisable $ 32.83 - $ 33.95 81,190 0.99 years 81,190 $ 40.15 - $ 46.90 123,130 1.94 years 90,790 $ 65.18 - $ 69.11 164,940 3.03 years 84,790 $ 73.09 155,640 4.00 years 58,620 Totals 524,900 2.75 years 315,390 As of December 31, 2021, the weighted average exercise price of options exercisable was $52.23 and the weighted average remaining contractual life of options exercisable is 2.35 years. The aggregate intrinsic value of options exercisable at December 31, 2021 is $17.2 million. 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. 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. In June 2020, the performance conditions were modified affecting 96 employees. As of December 31, 2021, the number of shares to be distributed, after forfeited shares, increased to 172,343 . 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 $ 4.6 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. In February 2022, the Board of Directors authorized a 100% increase in the annual dividend to $ 2.00 per share. The next quarterly cash dividend of $ 0.50 per share is payable on March 31, 2022 to shareholders of record on March 15, 2022. F- 26 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2021, 2020 and 2019 (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, 2021 2020 2019 Numerator for diluted earnings per share $ 87,411 $ 38,219 $ 60,249 Denominator: Weighted average shares 31,676,796 31,536,659 31,451,093 Effect of dilutive securities: Stock options 158,612 117,885 237,607 Denominator for diluted earnings per share 31,835,408 31,654,544 31,688,700 Earnings per share: Net income attributable to Inter Parfums, Inc. common shareholders: Basic $ 2.76 $ 1.21 $ 1.92 Diluted 2.75 1.21 1.90 Not included in the above computations is the effect of anti-dilutive potential common shares, which consist of outstanding options to purchase 175,000 , 450,000 , and 183,000 shares of common stock for 2021, 2020, and 2019, 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- 27 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2021, 2020 and 2019 (In thousands except share and per share data) Information on the Company’s operations by segments is as follows: Year ended December 31, 2021 2020 2019 Net sales: United States $ 216,559 $ 117,489 $ 173,522 Europe 663,290 422,947 542,226 Eliminations of intercompany sales ( 333 ) ( 1,427 ) ( 2,234 ) $ 879,516 $ 539,009 $ 713,514 Net income attributable to Inter Parfums, Inc.: United States $ 29,359 $ 7,942 $ 19,365 Europe 57,869 30,241 40,840 Eliminations 183 36 44 $ 87,411 $ 38,219 $ 60,249 Depreciation and amortization expense including impairment loss: United States $ 3,835 $ 3,354 $ 3,088 Europe 8,863 5,713 5,641 $ 12,698 $ 9,067 $ 8,729 Interest and investment income: United States $ 3 $ 24 $ 345 Europe 3,526 2,971 3,501 Eliminations ( 126 ) ( 130 ) ( 153 ) $ 3,403 $ 2,865 $ 3,693 Interest expense: United States $ 636 $ 604 $ 673 Europe 2,315 1,496 1,626 Eliminations ( 126 ) ( 130 ) ( 153 ) $ 2,825 $ 1,970 $ 2,146 Income tax expense: United States $ 5,336 $ 1,590 $ 3,945 Europe 35,607 17,782 25,101 Eliminations 49 9 30 $ 40,992 $ 19,381 $ 29,076 December 31, 2021 2020 2019 Total assets: United States $ 247,703 $ 141,316 $ 166,180 Europe 931,735 758,812 670,657 Eliminations ( 34,074 ) ( 9,983 ) ( 8,005 ) $ 1,145,364 $ 890,145 $ 828,832 Additions to long-lived assets: United States $ 2,711 $ 1,004 $ 5,851 Europe 138,563 11,259 5,643 $ 141,274 $ 12,263 $ 11,494 Total long-lived assets: United States $ 63,094 $ 40,656 $ 44,473 Europe 334,033 217,766 196,976 $ 397,127 $ 258,422 $ 241,449 Deferred tax assets: United States $ 870 $ 886 $ 705 Europe 7,066 7,106 7,241 Eliminations — 49 58 $ 7,936 $ 8,041 $ 8,004 F- 28 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2021, 2020 and 2019 (In thousands except share and per share data) United States export sales were approximately $ 126.2 million , $ 71.5 million and $ 112.0 million in 2021, 2020 and 2019, respectively. Consolidated net sales to customers by region are as follows: Year ended December 31, 2021 2020 2019 North America $ 354,100 $ 193,500 $ 235,500 Europe 271,600 180,200 240,800 Asia 128,000 79,700 110,900 Middle East 61,000 46,800 72,600 Central and South America 56,400 32,500 46,200 Other 8,400 6,300 7,500 $ 879,500 $ 539,000 $ 713,500 Consolidated net sales to customers in major countries are as follows: Year Ended December 31, 2021 2020 2019 United States $ 351,300 $ 187,300 $ 225,300 France $ 44,000 $ 37,600 $ 43,500 Russia $ 43,400 $ 14,100 $ 36,800 United Kingdom $ 38,500 $ 24,600 $ 35,800 (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, 2021. The components of income before income taxes consist of the following: Year ended December 31, 2021 2020 2019 U.S. operations $ 34,742 $ 9,577 $ 23,384 Foreign operations 116,277 59,772 81,762 $ 151,019 $ 69,349 $ 105,146 F- 29 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2021, 2020 and 2019 (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, 2021 2020 2019 Current: Federal $ 4,825 $ 1,685 $ 3,280 State and local 518 90 713 Foreign 36,164 17,024 27,412 41,507 18,799 31,405 Deferred: Federal 4 ( 215 ) ( 3 ) State and local 11 44 ( 22 ) Foreign ( 530 ) 753 ( 2,304 ) ( 515 ) 582 ( 2,329 ) Total income tax expense $ 40,992 $ 19,381 $ 29,076 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, 2021 2020 Net deferred tax assets: Foreign net operating loss carry-forwards $ 1,292 $ 360 Inventory and accounts receivable 4,508 1,928 Profit sharing 3,787 2,936 Stock option compensation 732 718 Effect of inventory profit elimination 5,112 4,443 Other 407 910 Total gross deferred tax assets, net 15,838 11,295 Valuation allowance ( 3,582 ) ( 360 ) Net deferred tax assets 12,256 10,935 Deferred tax liabilities (long-term): Building expenses ( 1,082 ) — Trademarks and licenses ( 2,551 ) ( 2,894 ) Unrealized gain on marketable equity securities ( 436 ) — Other ( 251 ) — Total deferred tax liabilities ( 4,320 ) ( 2,894 ) Net deferred tax assets $ 7,936 $ 8,041 Valuation allowances have been provided for deferred tax assets relating to foreign net operating loss carry-forwards and reserves acquired in connection with the acquisition of Interparfums Italia srl, as future profitable operations from certain foreign subsidiaries might not be sufficient to realize the full amount of the deferred tax assets. F- 30 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2021, 2020 and 2019 (In thousands except share and per share data) 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. The Company estimated of the effect of global intangible low-taxed income (“GILTI”) and has determined that it has no tax liability related to GILTI as of December 31, 2021, 2020 and 2019. The Company also estimated the effect of foreign derived intangible income (“FDII”) and recorded a tax benefit of approximately $ 0.9 million , $ 0.3 million and $ 0.9 million as of December 31, 2021, 2020 and 2019, respectively. French Tax Settlement The French authorities had considered 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. In June 2021, a global settlement agreement was reached with the French Tax Authority whereby Interparfums SA paid in December 2021, €2.5 million (approximately $2.9 million) effectively lowering the Lanvin brand royalty rate charged by IP Suisse for the periods from 2017 through 2020. Interparfums SA also agreed to apply the lower rate in 2021 through 2025 and to transfer the Lanvin brand from IP Suisse to Interparfums, SA by December 31, 2025. The Company is no longer subject to U.S. federal, state, and local 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, 2021 2020 2019 Statutory rates 21.0 % 21.0 % 21.0 % State and local taxes, net of Federal benefit 0.3 0.2 0.6 Windfall benefit from exercise of stock options ( 0.9 ) ( 0.6 ) ( 0.7 ) Benefit of Foreign Derived Intangible Income ( 0.6 ) ( 0.4 ) ( 0.9 ) Effect of foreign taxes greater than U.S. statutory rates 7.4 7.5 7.5 Other ( 0.1 ) 0.2 0.1 Effective rates 27.1 % 27.9 % 27.6 % F- 31 INTER PARFUMS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2021, 2020 and 2019 (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, 2021 2020 2019 Net derivative instruments, beginning of year $ — $ 52 $ 136 Net derivative instrument loss, net of tax ( 992 ) ( 52 ) ( 84 ) Net derivative instruments, end of year ( 992 ) — 52 Cumulative translation adjustments, beginning of year ( 5,997 ) ( 39,905 ) ( 33,786 ) Translation adjustments ( 31,443 ) 33,908 ( 6,119 ) Cumulative translation adjustments, end of year ( 37,440 ) ( 5,997 ) ( 39,905 ) Accumulated other comprehensive loss $ ( 38,432 ) $ ( 5,997 ) $ ( 39,853 ) (18) Net Income Attributable to Inter Parfums, Inc. and Transfers from the Noncontrolling Interest Schedule of net income attributable to transfers from the noncontrolling interest Year ended December 31, 2021 2020 2019 Net income attributable to Inter Parfums, Inc. $ 87,411 $ 38,219 $ 60,249 Decrease in Inter Parfums, Inc.’s additional paid-in capital for subsidiary share transactions — — ( 5,167 ) Change from net income attributable to Inter Parfums, Inc. and transfers from noncontrolling interest $ 87,411 $ 38,219 $ 55,082 (19) Reconciliation of Cash and Cash Equivalents to the Statement of Cash Flows The following table summarizes cash and cash equivalents as of December 31, 2021: December 31, 2021 Cash and cash equivalents per balance sheet $ 159,613 Cash held in escrow included in other assets (see note 3) 8,774 Cash and cash equivalents per statement of cash flows $ 168,387 F- 32 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) Description Balance at beginning of period Charged to costs and expenses Charged to other accounts – describe Deductions describe Balance at end of period Allowance for doubtful accounts: Year ended December 31, 2021 $ 5,550 877 (843 )(d) 3,336 (a) 2,247 Year ended December 31, 2020 $ 2,452 4,824 381 (d) 2,107 (a) 5,550 Year ended December 31, 2019 $ 2,602 1,380 (41 )(d) 1,489 (a) 2,452 Allowance for sales returns, net of inventory: Year ended December 31, 2021 $ 2,242 3,042 — 2,042 (b) 3,242 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 Inventory reserve: Year ended December 31, 2021 $ 9,371 8,217 7,041 (d)(e) 8,852 (c) 15,777 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 (a) Write-off of bad debts. (b) Write-off of sales returns. (c) Disposal of inventory (d) Foreign currency translation adjustment (e) Inventory reserves acquired of $7,639 See accompanying reports of independent registered public accounting firm. F- 33 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, 2022 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, 2022 /s/ Russell Greenberg Russell Greenberg Chief Financial and Accounting Officer and Director March 1, 2022 /s/ Philippe Benacin Philippe Benacin Director February 25, 2022 /s/ Philippe Santi Philippe Santi Director February 25, 2022 /s/ François Heilbronn François Heilbronn Director February 28, 2022 /s/ Robert Bensoussan Robert Bensoussan Director February 25, 2022 /s/ Patrick Choël Patrick Choël Director February 28, 2022 /s/ Michel Dyens Michel Dyens Director February 25, 2022 /s/ Veronique Gabai-Pinsky Veronique Gabai-Pinsky Director February 28, 2022 /s/ Gilbert Harrison Gilbert Harrison Director February 25, 2022 87 Exhibit Index The following documents previously 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 The following documents previously 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 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 The following document previously 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 88 The following documents previously 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 10.172 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) 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 previously 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, 2020: Exhibit No. Description 3.1 Interparfums Singapore Pte. Ltd Memorandum and Articles of Association 3.2 Interparfums Luxury Brands, Inc. Certificate of Incorporation 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 89 The following documents previously 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 Exhibits Filed and Attached to this report: The following document previously filed with the Commission more than five years ago is incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2016: Exhibit No. Description Page No. 3.8 Articles of Association of Parfums Rochas Spain, Limited Liability Company (Spanish with English translation) 127 The following document previously filed with the Commission more than five years ago is incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2016: 4.33 2016 Stock Option Plan 158 The following documents are filed with this report: Exhibit No. Description Page Nos. 3.10 Interparfums Italia srl (formerly Parfums Italia srl) Incorporation Deed dated September 8, 2021 (Italian language) 128 3.10.1 Interparfums Italia srl (formerly Parfums Italia srl) Incorporation Deed dated September 8, 2021 (English translation) 131 3.10.2 Interparfums Italia srl (formerly Parfums Italia srl) Amendment to Certificate of Organization dated October 1, 2021 (Italian language) 134 3.10.3 Interparfums Italia srl (formerly Parfums Italia srl) Amendment to Certificate of Organization dated October 1, 2021 (English translation) 137 21 List of Subsidiaries 168 23 Consent of Mazars USA LLP 169 31.1 Certification Required by Rule 13a-14 of Chief Executive Officer 170 31.2 Certification Required by Rule 13a-14 of Chief Financial Officer 172 32.1 Certification Required by Section 906 of the Sarbanes-Oxley Act by Chief Executive Officer 174 32.2 Certification Required by Section 906 of the Sarbanes-Oxley Act by Chief Executive Officer 175 90