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Share-Based Payments:
 6 Months Ended
Jun. 30, 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 six months ended June 30, 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 six months ended June 30, 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     (7,100 )   $ 24.34  
Nonvested options – end of period     111,550     $ 30.38  

 

Share-based payment expense decresased income before income taxes by $0.39 million and $0.95 million for the three and six months ended June 30, 2025 respectively, as compared to decreases of $0.58 million and $1.17 million for the three and six months ended June 30, 2024 respectively, and decreased income attributable to Interparfums, Inc. by $0.26 million and $0.62 million for the three and six months ended June 30, 2025 respectively, as compared to $0.38 million and $0.77 million for the corresponding periods of the prior year .

 

The following table summarizes stock option information as of June 30, 2025:

 

    Shares     Weighted Average
Exercise Price		  
             
Outstanding at January 1, 2025     248,430     $ 103.00  
Options forfeited     (6,200 )     124.61  
Options exercised     (27,430 )     76.98  
                 
Outstanding at June 30, 2025     214,800     $ 105.70  
                 
Options exercisable     103,250     $ 82.55  
Options available for future grants     498,595          

 

As of June 30, 2025, the weighted average remaining contractual life of options outstanding is 3.0 years (1.3 years for options exercisable); the aggregate intrinsic value of options outstanding and options exercisable is $6.2 million and $5.2 million, respectively; and unrecognized compensation cost related to stock options outstanding aggregated $2.9 million.

 

Cash proceeds, tax benefits and intrinsic value related to stock options exercised during the six months ended June 30, 2025 and 2024 were as follows:

 

(In thousands)   June 30, 2025     June 30, 2024  
             
Cash proceeds from stock options exercised   $ 2,112     $ 1,370  
Tax benefits     205       224  
Intrinsic value of stock options exercised     1,618       1,409  

 

There were no options granted during the six months ended June 30, 2025 and June 30, 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 corporate performance conditions were met and therefore in June 2025, 106,046 shares, adjusted for stock splits, were distributed. 

 

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 aggregate cost of the grant of approximately $4.2 million was 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 pursuant to this plan were pre-existing shares of Interparfums SA, purchased in the open market by Interparfums SA. As of June 30, 2025 the Company acquired 106,046 shares at an aggregate cost of $4.5 million.

 

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