INTER PARFUMS

administration de l'entreprise

Inter Parfums adopted the form of a société anonyme, the French equivalent of a joint stock company, when it was created in 1989. It is governed by a Board of Directors and a Management Committee.

The Board of Directors’ meeting of December 22, 2008 reviewed the AFEP-MEDEF recommendations of October 6, 2008 on compensation of executive officers of listed companies. It considered these recommendations to be in line with the company’s own corporate governance policy. This opinion was rendered public in a press release dated December 24, 2008.

The Board of Directors also confirmed that the amended AFEP/MEDEF corporate governance code is applied by the company and referred to prepare the report provided for by article L.225-37 of the French Commercial Code starting with the period in progress.

Composition of the Board of Directors

In spring 2004, the company strengthened the Board of Directors that until then had four members, by appointing new board members for renewable six-year terms to benefit from their additional expertise and experience. On December 31, 2007 the Board of Directors had 10 members.

The Board of Directors’ meeting of November 22, 2008 duly noted the resignation of Mrs. Marianne Benacin and Mr. Raoul Madar as directors and proceeded to appoint, on a temporary basis, Mrs. Chantal Roos and Mr. Frédéric Garcia Pelayo to serve as directors, subject to the ratification of their appointment by the next shareholders’ meeting to be held on April 24, 2009.

The Board ensures that at least 30% of its members are independent directors. Directors are considered independent when they have no relation whatsoever with the company, group or its management that could compromise their free exercise of judgment. In line with recommendations applicable in France on corporate governance of the AFEP-MEDEF report, the board ensures the presence of independent directors subject to the following conditions:
the director is not an employee or corporate officer (mandataire social) of the company nor an employee or director of its parent company or of one of its consolidated subsidiaries, and has not been one during the previous five years;
the director is not a corporate officer of a company in which the company holds, either directly or indirectly, a directorship, or in which a directorship is held by an employee of the company designated as such or by a current or former (going back five years) corporate officer of the company;
the director is not a supplier, investment or commercial banker of the company or any company included in the scope of consolidation;
the director does not have any close family ties with a corporate officer of the company;
the director has not been an auditor of the company over the past five years:
the director has not been a director of the company for more than 12 years; and
the director does not have any legal ties with a shareholder owning directly or indirectly more than 10% of the share capital or voting rights.

On the basis of these criteria, the board includes three independent directors, Mrs. Chantal Roos, Mr. Maurice Aladhève and Mr. Michel Dyens

To date, the Board has three members with the status of employees resulting from an employment contract predating their appointment as directors.

As a general rule, members of the Board of Directors have an in-depth or multidisciplinary experience of the business world in international markets. They are subject to conduct of business rules that include notably obligations of secrecy and due diligence in the performance of their duties ensuring the effective work of the Board in a collegiate nature. Directors are provided not only with information before each meeting but also on a permanent basis concerning all strategic and financial matters necessary to perform their duties in the most effective manner.

The Board of Directors’ meeting of March 3, 2009 adopted a board charter reproduced in full below.

BOARD CHARTER

Introduction

The purpose of this Charter is to set forth the rules of procedure adopted by the Board of Directors on March 3, 2009.

Applicable to all current and future directors, this Charter is destined to supplement the provisions of the law, regulations and the company’s bylaws, in the interest of the company and its shareholders in order to:
define the composition, organization, duties and powers of the Board;
contribute to the optimal performance of meetings and proceedings;
establish the rules on corporate governance within the framework of rules requiring that the company adopt the principles of transparency, loyalty and performance vis-à-vis its shareholders.

This Board Charter under no circumstances replaces the company’s bylaws but rather translate its provisions into practice. This Charter is destined for internal use for the purpose of ensuring the effectiveness of the work of the Board. As such it cannot be considered binding on the company in respect to claims by third parties.

1. COMPOSITION OF THE BOARD OF DIRECTORS

The Board of Directors includes a maximum of 18 members with at least three selected from independent persons having no ties of interest with the company so that they are entirely free in the exercise of their judgment.

Directors are considered independent according to the criteria of the AFEP/MEDEF code of corporate governance when they have no relation whatsoever with the company, its group, or management that could compromise the free exercise of their judgment or where there exists no potential conflict of interest with the company, its management or group.

2. MISSIONS AND POWERS OF THE BOARD OF DIRECTORS

Strategic body

The mission of the Board of Directors is to determine the strategy of the company and ensure that this strategy is implemented. Subject to the powers granted to shareholders’ meetings and within the limits of the company’s corporate purpose, the Board may address any matter pertaining to the proper management of the company and settle all items of business relating thereto.

In addition to the attributes provided for by law and regulations, the Board may be called to address in particular the following matters:
assess the environment of the company and analyze opportunities for external growth through acquisitions;
review projects involving material investments or not relating to the company’s ordinary operating activities;
analyze major strategic projects presented to executive management and their impact on the economic and financial situation of the company;
approve the annual budget submitted by executive management;
implement procedures for control or verification it considers appropriate.

And in general, the Board ensures the merits of any measure adopted for the strategic development of the company and ensuring the solidity of the company’s balance sheet.

Audit committee function

On March 3, 2009 the Board of Directors decided that in light of the company’s organization and structure, an independent audit committee would not be established and that in consequence, in accordance with the provisions provided for under article L.823-20 of the French Commercial Code, it would exercise the functions of audit committee in plenary session.

In connection with a performance of the functions of audit committee, the primary task of the Board of Directors are to:
ensure the pertinence and consistent application of accounting methods adopted to prepare consolidated and statutory financial statements;
ensure that the process for producing financial information is based on internal procedures for collecting information that guarantee the quality and exhaustive nature of this information;
monitoring the performance of internal control and risk management systems;
monitoring compliance with the principles of independence and objectivity of the auditors.

To this purpose, it may review in particular:
draft versions of the statutory and consolidated interim and annual financial statements, and on these occasions submit questions to the auditors;
the scope of consolidation used to prepares financial statements;
the performance of internal control systems by evaluating the organization principles and functioning of internal audit and by verifying the process for identifying risks. It also reviews the audit missions and evaluation of the internal control system carried out by the Finance Department;
procedures carried out by the auditors in the performance of their missions;
conditions for renewing the appointments of auditors by implementing a selection process and issuing an opinion concerning the amount of fees requested for the performance of their missions.

3. PROCEDURES FOR EXERCISING GENERAL MANAGEMENT

The Chairman of the Board of Directors

The Chairman, appointed by the Board of Directors from among its members, organizes and manages the work of the Board on which he reports to the shareholders’ meeting. He ensures that management bodies of the company are effectively run and, in particular, that directors are able to perform their duties. The Chairman may request any documents or specific information to assist the Board of Directors in connection with preparing its meetings.

The Chairman actively contributes to the performance of the duties of directors by exercising a role of intermediary between the latter and the main participants in implementing the company’s strategic objectives.

General management

The Board of Directors determines the manner that General Management is exercised, under its responsibility, either by the Chairman of the Board of Directors, or by a person appointed by the latter with the title of Chief Executive Officer (Directeur Général).

The Board of Directors’ meeting of December 19, 2002 decided not to separate the functions of Chairman of the Board of Directors from those of Chief Executive Officer. In this respect, and subject to the powers granted by law to general meetings and the limitations provided for by the provisions of this Board Charter, the Chairman of the Board of Directors exercises the functions of Chief Executive Officer and is vested with the broadest powers to act in all circumstances in the name of the company with the exception of the following strategic decisions that are submitted for approval to the Board of Directors:
any financial commitment (immediate or deferred) for an amount exceeding €10 million per transaction and having a material impact on the company’s scope of consolidation, including mainly the acquisition or disposal of assets or equity investments in companies;
any decision, regardless of the amount involved, that could potentially materially affect the strategy of the company or materially modify the scope of its normal activity.

On proposals by the Chief Executive Officer, the Board of Directors may appoint one or more individuals to assist the Chief Executive Officer with the title of Executive Vice President (Directeur Général Délégué).

4. FUNCTIONING OF THE BOARD OF DIRECTORS

Calling and holding of Board meetings

Notice of meetings may be issued by any means including orally and may be transmitted by the Secretary of the Board within at least eight days before each meeting.

The Board meets as often as the interests of the company requires, and in general, at least five times the year, with three of these meetings devoted to reviewing the budget, strategy and the activity of the company. Decisions by the Board are adopted on the basis of a simple majority. In the case of split vote, the Chairman of the meeting has the casting vote.

The Board establishes for the year according to the proposal of the Chairman a schedule for its meetings, with the exception of extraordinary meetings.

Participation in meetings through videoconferencing or telecommunications media

In accordance with applicable regulations and article 14 of the company’s bylaws, directors who participate in Board meetings through videoconferencing or telecommunications technology are considered present for calculating the quorum and majority.

The Chairman ensures that videoconferencing and telecommunications technologies used guarantee the effective participation of all parties in the meetings. The proceedings must be broadcast without interruption. Measures necessary to identify each party and verify the quorum must be assured. Failing this, the Board meeting may be adjourned.

The attendance register and the minutes must indicate the names of directors having participated through videoconferencing or telecommunications means.

Remote participation using the technologies is expressly prohibited for proceedings concerning the following decisions:
the approval of the company’s statutory and consolidated financial statements;
preparing the management report to be included in the Group’s management report.

Transmission of information

All directors are provided with an agenda for each meeting documents and information required to make decisions on the items of business on an informed basis.

It is the responsibility of all directors to ensure that they possess all information they consider necessary for the effective conduct of proceedings of the Board and, when applicable, request this information when they consider that it has not been made available.

Furthermore, directors are kept regularly informed, between the meetings of all events or transactions of a material nature for the strategic priorities of the company.

5. CODE OF CONDUCT OF DIRECTORS

Obligations of discretion and secrecy

Concerning non-public information acquired in connection with their duties, directors shall be considered subject to a true obligation of professional secrecy that exceeds the obligation of discretion provided for by article L.225-37 subsection 5 of the French Commercial Code.

In general, directors shall refrain from speaking individually outside the collegial framework of the Board of Directors about matters considered therein. Outside the company, directors undertake to respect the collegial nature on any oral or written communication that they may issue.

Duties of independence

Directors have a duty to act in all circumstances in the interest of the company and all shareholders. To this purpose, they are subject to an obligation to inform the Board of any situation involving a conflict of interest, even a potential conflict of interest, and must refrain from voting in the proceedings relating thereto.

And in general, directors shall be prohibited from engaging in transactions in the shares of the company and/or the group if they possess privileged information. Each party is personally responsible for assessing the privileged nature of information in their possession, and, in consequence, to authorize or prohibit any use or transmission of such information, and to engage in any transactions in the company’s shares.

And in any case, directors undertake to comply with its obligation to refrain from any dealings in the company’s shares for a period of 15 days prior to:
the publication of the press release on annual results;
the publication of the press release on half-year results.

Obligations of the due diligence

Directors must devote to their duties the necessary time and attention. To this purpose, they will limit the appointments that they hold to a reasonable number to ensure their regular participation in the meetings of the Board.

Directors have an obligation to obtain and request within the appropriate delays from the Chairman information necessary to effectively participate in the items of business to be addressed by the Board of Directors’ meetings.

Obligation to report dealings in the company’s shares

Directors and persons with whom they have close relations must report to the AMF the purchase, sale, subscription or exchange of shares of the Company when the amount exceeds Û5,000 for the calendar year progress..

To this purpose, they will send their declaration to the AMF by electronic means within five trading days following the transactions and send at the same time a copy of the declaration to the Secretary of the Board of Directors of the company.

6. COMPENSATION

Directors’ fees

The Board of Directors freely sets the amount of fees for attendance subject to the limit allocated by the general meeting. It allocates this amount equally among each of the members in proportion to the number of Board meetings each member participated in during the prior year.

By express waiver of the Directors concerned, directors’ fees are allocated exclusively to directors selected from outside the company.

Compensation of directors for special assignments

The Board of Directors may entrust one of its members with a mission, for which it determines the conditions and terms that are subject to approval by the Board, except by the Board member designated for this mission. The Board will determine notably the duration of the mission as well as the procedures of payment of the amount and the reimbursement of expenses incurred in the performance of this mission. The Chairman is responsible for ensuring that this mission is properly carried out according to the conditions approved by the Board to whom it regularly reports thereon.

Composition of the board and profiles

As of December 31, 2008 the composition of the Board of Directors was as follows:

Philippe Benacin, Chairman and Chief Executive Officer of Inter Parfums (appointment renewed April 23, 2004, expiring at the close of the 2010 annual shareholders’ meeting).
Philippe Benacin, 50, a graduate of the ESSEC business school and cofounder of the company with his partner Jean Madar, has served as Chairman and Chief Executive Officer of Inter Parfums SA since its creation in 1989.
Other appointments: Chairman of the Board of Directors of Inter Parfums Holding, President and Vice Chairman of the Board of Inter Parfums Inc. (United States).

Jean Madar, Director (appointed April 23, 2004, expiring at the close of the 2010 annual shareholders’ meeting).
Jean Madar, 48 a graduate of the ESSEC business school, is the cofounder of the company with his partner Philippe Benacin.
Other appointments: Chief Executive Officer of Inter Parfums Holding , Chief Executive Officer and Chairman of the Board of Inter Parfums Inc. (United States).

Maurice Alhadève, Independent Director (appointed by the shareholders’ meeting of April 23, 2004, expiring at the close of the 2010 annual shareholders’ meeting).
Other appointments: none.

Patrick Choël, Director (appointed by the shareholders’ meeting of December 1, 2004, expiring at the close of the 2010 annual shareholders’ meeting).
Other appointments: Director of Inter Parfums Inc. (United States), Director of Parfums Christian Dior, Director of Guerlain, Director of Modelabs.

Michel Dyens, Independent Director (appointed by the shareholders meeting of April 23, 2004, expiring at the close of the 2010 annual shareholders’ meeting).
Other appointments: Director of Direct Panel, Chairman of Michel Dyens & Co.

Frédéric Garcia-Pelayo, Director and Executive Vice President (holder of an employment contract preceding the appointments - Appointed by co-optation by decision of the Board of Directors’ meeting of November 22, 2008 subject to ratification by the next general meeting to be held on April 24, 2009, replacing Mr. Raoul Madar, resigning, whose
appointment expires at the close of the 2010 annual shareholders’ meeting).
Frédéric Garcia Pelayo, 51, EPSCI international exchange program graduate of the ESSEC Business School, has been Vice President for Export Sales Directeur Export of Inter Parfums since 1994 and Executive Vice President since 2004.
Other appointments: none.

Jean Levy, Director (appointed by the shareholders’ meeting of April 23, 2004, expiring at the close of the 2010 annual shareholders’ meeting).
Other appointments: Director of Inter Parfums Inc. (United States), Director of Price Minister SA, Director of Axcess Groupe SA, Director of Mont Blanc SAS.

Chantal Roos, Independent Director (Appointed by co-optation by decision of the Board of Directors’ meeting of November 22, 2008 subject to ratification by the next general meeting to be held on April 24, 2009, replacing Mrs. Marianne Benacin, resigning, whose appointment expires at the close of the 2010 annual shareholders’ meeting).
Chantal Roos was Vice President for International Marketing and subsequently Executive Vice President with Yves Saint Laurent Parfums and President of Beauté Prestige International, a subsidiary of the Shiseido group she created in 1990 to launch the Issey Miyake and Jean-Paul Gaultier fragrances.
She joined the Gucci group in 2000 as President of the Yves Saint Laurent Beauté division, becoming subsequently in 2007, Strategic Adviser to the Chairman and Chief Executive Officer. In 2008, she launched her own company specialized in the creation and development of fragrance and cosmetic brands.
Other appointments: none.

Philippe Santi, Director and Executive Vice President (holder of an employment contract preceding the appointment by the shareholders’ meeting of April 23, 2004, expiring at the close of the 2010 annual shareholders’ meeting).
Philippe Santi, 47, graduate of the École Supérieur de Commerce of Reims and a public accountant has served as the Chief Financial and Administrative Officer of Inter Parfums SA since 1995 and Executive Vice President since 2004.
Other appointments: Director of the parent company Inter Parfums Inc.

Catherine Bénard-Lotz, Director (holder of an employment contract preceding the appointment by the shareholders’ meeting of April 23, 2004, expiring at the close of the 2010 annual shareholders’ meeting).
Other appointments: none.

Absence of condemnations

To the best of the Company’s knowledge, in the last five years none of the members of the Board of Directors have been:
convicted for fraud or penalties for infractions rendered by statutory or regulatory authorities;
involved in a bankruptcy, receivership or liquidation proceeding as a director or officer;
disqualified from serving as a director or officer or participating in the management of the operations of an issuer.

Absence of potential conflicts of interest

To the best of the Company’s knowledge, there exist no potential conflicts of interest between the duties towards the company and the personal interests and/or other duties of one of the members of the board.

Absence of service contracts with board members

To the best of the Company’s knowledge, none of the board members is bound by service agreements with the company or one of its subsidiaries providing for the grant of benefits under its terms.

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