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Share-Based Payments:
 3 Months Ended
Mar. 31, 2025
Equity:  
Share-Based Payments:
8. 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 during the three months ended March 31, 2025 and 2024 aggregated $0.02 million and $0.04 million, 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 our policy to issue new shares upon exercise of stock options. 

 

The following table sets forth information with respect to nonvested options for the three months ended March 31, 2025:

 

    Number of Shares     Weighted Average Grant-Date Fair Value  
Nonvested options – beginning of period     118,650     $ 30.02  
Nonvested options granted     —       —  
Nonvested options vested or forfeited     (4,900 )   $ 22.41  
Nonvested options – end of period     113,750     $ 30.35  

 

Share-based payment expense decreased income before income taxes by $0.56 million and $0.59 million for the three months ended March 31, 2025 and 2024 respectively, and decreased income attributable to Interparfums, Inc. by $0.36 million and $0.39 million for the three months ended March 31, 2025 and 2024 respectively.

 

The following table summarizes stock option information as of March 31, 2025:

 

    Shares     Weighted Average
Exercise Price		  
             
Outstanding at January 1, 2025     246,430     $ 103.24  
Options forfeited     (3,800 )     124.09  
Options exercised     (13,830 )     77.88  
                 
Outstanding at March 31, 2025     228,800     $ 104.43  
                 
Options exercisable     115,050     $ 82.06  
Options available for future grants     498,195          

 

As of March 31, 2025, the weighted average remaining contractual life of options outstanding is 3.2 years (1.5 years for options exercisable); the aggregate intrinsic value of options outstanding and options exercisable is $4.5 million and $4.0 million, respectively; and unrecognized compensation cost related to stock options outstanding aggregated $3.1 million.

 

Cash proceeds, tax benefits and intrinsic value related to stock options exercised during the three months ended March 31, 2025 and 2024 were as follows:

 

(In thousands)   March 31, 2025     March 31, 2024  
             
Cash proceeds from stock options exercised   $ 1,077     $ 1,326  
Tax benefits     125       220  
Intrinsic value of stock options exercised     840       1,375  

 

There were no options granted during the three months ended March 31, 2025 and March 31, 2024.

 

Expected volatility is estimated based on the historic volatility of the Company’s common stock. The expected term of the option is estimated based on historical 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 maintain its current payout ratio as a percentage of earnings.

 

In March 2022, Interparfums SA, our 72% owned French Subsidiary, approved a plan to grant an aggregate of 88,400 shares of its stock to all Interparfums SA employees and corporate officers having more than six months of employment at grant date, subject to certain corporate performance conditions. The shares, subject to adjustment for stock splits, will be distributed in June 2025.

 

The fair value of the grant had been determined based on the quoted stock price of Interparfums SA shares as reported by the Euronext on the date of grant. The estimated number of shares to be distributed of 105,395 has been determined taking into account employee turnover. The aggregate cost of the grant of approximately $4.2 million will be recognized as compensation cost on a straight-line basis over the requisite three and a quarter year service period.

In order to avoid dilution of the Company’s ownership of Interparfums SA, all shares distributed or to be distributed pursuant to these plans will be pre-existing shares of Interparfums SA, purchased in the open market by Interparfums SA. As of March 31, 2025 the Company acquired 96,371 shares at an aggregate cost of $4.1 million.

 

All share purchases and issuances have been classified as equity transactions on the accompanying balance sheet.