Bylaws and Board of Directors’ Internal Rules
of June 7, 2022
The Company is incorporated as a public company referred to as a “Société Anonyme” under French law. It is governed by applicable French legal and regulatory provisions and by these bylaws
The Company’s business purpose in France and other countries includes:
- As its principal activity, the purchase, sale, manufacture, import and export of all products related to perfumes and cosmetology;
- As a secondary activity, the purchase, sale, manufacture, import and export of all products relating to fashion;
- The use of license agreements;
- Providing all services related to the above-mentioned activities;
- The Company’s participation by all means, directly or indirectly, in all transactions that may relate to its business purpose through the creation of new companies, the contribution, subscription or purchase of company shares or rights, mergers or other, through the creation, acquisition, rental or lease management of all rights to conduct business or establishments, and through the acquisition, operation or disposal of all procedures and patents related to these activities;
The name of the Company is: Interparfums
The registered office is located at:
10 rue de Solférino, 75007 Paris - France
It may be transferred to any other location in France (including its overseas territories) by decision of the Board of Directors, subject to ratification of this decision by the next ordinary general Meeting.
The Company is incorporated for a period of NINETY-NINE YEARS (99) effective from its date of entry in the Trade and Companies Register (Registre du Commerce et des Sociétés), barring early liquidation or extension.
The share capital is ONE HUNDRED NINETY EIGHT MILLION SEVEN HUNDRED TEN SEVEN THOUSAND NINE HUNDRED AND NINETEEN EUROS (188 717 919 €) divided into sixty two million nine hundred five thousand nine hundred seventy three (62 905 973) shares with a par value of €3 fully paid up and subscribed.
The share capital may be increased, reduced or redeemed in accordance with the provisions provided for by current laws and regulations.
Shares issued for cash, in connection with a capital increase must be paid up when applied for by an amount equal to at least one quarter their par value plus, where applicable, the full amount of the share premium.
Payment of the balance shall be made in one or several installments pursuant to calls by the Board of Directors, within five years from the shares' effective date of issue.
All new cash shares resulting from a transaction involving payment of a portion in cash and a portion through the capitalization of reserves, earnings or premiums must be fully paid up on the date of application for the shares.
Shareholders will be informed of calls for funds one month before the payment date for each installment either by ordinary mail sent to registered shareholders or by legal notice published in a legal journal within the department of the registered office in addition to the French national publication for legal announcements (Bulletin des Annonces Légales Obligatoires or B.A.L.O.).
Payments shall be made either at the registered office or any other place designated for this purpose.
Shareholders may, at any time, pay in advance, though may not claim on the basis payments made before the date set for calls for funds, a right to any interest or initial dividend payment.
Any delay in payment of amounts owed for the unpaid portion of shares entails ipso jure the application of interest at the legal rate from the due date, without prejudice to civil suits that may be brought by the Company against the defaulting shareholder and measures for mandatory enforcement provided by law.
Shares shall be in registered or bearer form, at the choice of the shareholder.
Until fully paid up, shares must be maintained in registered form and recorded in the name of the shareholder in an account maintained by the Company.
In accordance with legal and regulatory provisions, holders’ rights shall be represented by a book entry in their name:
- With the intermediary of their choice for bearer securities,
- With the Company, and, if they so wish, with the authorized financial intermediary of their choice for registered shares.
The Company may request at any time, in accordance with applicable laws and regulations, disclosure of information regarding the identity of holders of securities issued by it, which give immediate or future rights to vote in shareholders meetings.
Subject to and in accordance with the provisions of applicable laws and regulations, any intermediary may be registered on behalf of owners of securities of the Company referred to in Article L. 228-1 subsection 7 of the French commercial code (code de commerce) (notably owners not having their domicile in France with the meaning in Article 102 of the French civil code code) provided the intermediary has declared when opening the account with the Company or the financial intermediary acting as securities account custodian, in accordance with applicable laws and regulations, its third-party status as a holder of securities on behalf of another party. The intermediary registered as a holder of securities is required, without prejudice to obligations of the actual owners of the securities, to comply with the disclosure obligations regarding the crossing of ownership thresholds, for all shares or securities of the Company it has registered in an account under penalty of punishment by law.
Shares are negotiable only after the Company's registration in the Trade and Companies Registry (Registre du Commerce et des Sociétés). New shares resulting from a rights issue are negotiable only after the capital increase has been completed.
Shares remain negotiable after the Company is wound up until the completion of the winding up procedure.
Equity securities and securities giving access to the share capital are transferable by transfer from one account to another in accordance with provisions provided for by applicable law.
Shares are freely negotiable, except where otherwise provided by applicable legal and regulatory provisions.
Each share shall entitle its holder to a portion of the corporate profits and assets and net proceeds following liquidation in proportion to the share capital it represents.
Furthermore, each share shall entitle its holder to vote and be represented in the shareholders' meetings, as well as the right to be informed of the Company operations and disclosure of selected corporate documents at such times and in accordance with conditions provided for by statutory provisions and these bylaws.
The liability of shareholders for corporate liabilities shall be limited to their contributions to the Company’s capital.
In the event of transfer, the rights and obligations remain attached to shares regardless of the owner.
Ownership of a share entails, ipso jure, adherence to the bylaws of the Company and the decisions of the shareholders' meeting.
When it is required to hold a certain amount of securities to exercise a given right, holders of securities not possessing the requisite number shall be personally responsible to regroup, purchase or sell, as the case may be, the number of securities required for this purpose.
Fully paid up registered shares recorded in the name of the same shareholder for at least three years carry a double voting right. In the event of a capital increase by the capitalization of reserves, earnings or issue premium, registered shares granted for free to a shareholder shall immediately entail double voting right when issued, if the corresponding shares already held by the shareholder also carry double voting rights. Registered shares carrying double voting rights converted to bearer shares or having their title transferred are deprived of the double voting right except in those cases provided for by law.
The Company shall be administered by a Board of Directors. The number of Directors shall not be less than three and not more than eighteen subject to exceptions provided for by statutes in the event of a merger.
During the life of the Company, Directors are appointed, reappointed or dismissed by Ordinary General Meetings. All Directors may be reappointed.
The term of office for Directors is four (4) years. This term shall cease at the end of the ordinary general Meeting called to approve the financial statements of the previous year held in the year it expires.
As an exception, and in order to permit the implementation and maintain the staggering of Directors’ terms of office, the General Meeting may appoint one or more Directors for terms of two (2) or three (3) years.
The number of Directors over EIGHTY (80) years of age may not exceed one third of members serving on Board. If this limit imposed by the bylaws is exceeded, the oldest Director serving on the Board shall be considered to have automatically resigned on the date of the Ordinary General Shareholders Meeting called to rule on the accounts for the fiscal year in which this limit was exceeded.
The Board of Directors appoints a Chairman from among its members who are individuals (natural persons) and sets his/her compensation under the conditions set out in the applicable regulations.
The term of office that is set by the Board shall not exceed his/her term of office as Director.
No person shall be appointed Chairman of the Board of Directors that is over EIGHTY (80) years of age. If the Chairman in office reaches this age, this person shall be considered to have automatically resigned.
The Chairman of the Board of Directors shall organize and direct the board’s work, which he or she shall report on to the general meeting. The Chairman shall ensure the proper functioning of the Company’s governing bodies and, ensure in particular, that the Directors are able to carry out their duties.
The Chairman can be reappointed. The Board of Directors may terminate the Chairman's appointment at any time. In the event of temporary incapacity or death of the Chairman, the Board of Directors may delegate to a Director the powers to serve as Chairman.
The Board of Directors shall meet as often as the business of the Company so requires, pursuant to notice from the Chairman or by at least one third of its members, if the Board has not met for over two months. The Chairman is bound to comply with these requests.
In cases when the Company is managed by a Chief Executive Officer (Directeur Général) the latter may ask the Chairman of the Board of Directors to call a Board meeting on a specific agenda.
Board meetings may be convened by all available means, including orally. The meeting will take place either at the registered office or at any other place indicated in the meeting notice.
Proceedings of the Board are valid only if at least half the Directors are present. Decisions are adopted by the meeting by a majority vote of members present or represented. In the event of a tie, the Chairman of the meeting shall cast the deciding vote.
The Board charter may provide that directors who attend the Board meeting through videoconferencing or telecommunications means in accordance with laws and regulations, are deemed present for determining the quorum and majority. This provision is not applicable with respect to adopting decisions concerning the closing of the annual and consolidated accounts and the preparation of the management report for the Company and/or Group.
The Board of Directors may also take decisions by written consultation of directors under the conditions provided by law.
The Board of Directors shall determine the business strategy of the Company and ensure its implementation within the limits of the corporate purpose and the powers expressly granted by law to shareholders' meetings. The Board shall take up all questions relating to the management of the Company and through its proceedings shall settle all matters of business relating thereto. The Board of Directors shall perform such controls and verifications that it judges appropriate.
The Chairman or the Chief Executive Officer of the Company is required to provide each Director with all the documents and information necessary to perform his or her mission.
In dealings with third parties, the Company shall be bound also by actions of the Board of Directors that do not fall within the scope of the corporate purpose, unless it proves that the third party knew that the action exceeded that purpose or that this could not be unknown by the third party in view of the circumstances, it being specified that the mere publication of the bylaws does not constitute such proof.
The Executive Management of the Company shall be exercised either by the Chairman of the Board of Directors or by another person who is an individual, who may or may not be a Director, appointed by the Board whose term of office it determines and who holds the title of Chief Executive Officer (Directeur Général).
The Chief Executive Officer, who must be a natural person, whether chosen from among the Directors or not, may be dismissed by the Board of Directors at any time. If the Chief Executive Officer is dismissed without cause, he or she is entitled to damages unless he or she also serves as Chairman of the Board of Directors.
The Board of Directors has the option of choosing, in accordance with applicable laws and regulations in force, between two models of corporate governance for the Company, when appointing or reappointing the Chairman of the Board of Directors or the Chief Executive Officer if the functions of the latter are not exercised by the Chairman of the Board of Directors.
Shareholders and third parties shall be informed of this choice under the conditions provided for by current law and regulations.
If the Board of Directors decides not to split up the duties of the office of Chairman of the Board of Directors, the Chairman then assumes, under his or her responsibility, the general management of the Company. In this case, the above provisions relating to the Chief Executive Officer shall apply to the Chairman except for compensation payable for unjustified dismissal from the position of the former.
If the Board of Directors chooses to separate the duties of Chairman of the Board of Directors and Chief Executive Officer and subject to powers expressly attributed by law to shareholders' meetings and to the Board of Directors and, within the limits of the corporate purpose, the Chief Executive Officer is then vested with the broadest powers to act in all circumstances on behalf of the Company.
The Executive Chief Officer represents the Company in dealings with third parties. This executive officer may delegate these powers to any agent he or she chooses, within the limits of those powers conferred upon him or her by law and these bylaws. Any limitations imposed on these powers by decision of the Board of Directors is not binding with respect to third parties.
When he is a Director, the duration of the term for performing his or her functions shall not exceed the term of the appointment on the Board.
Notwithstanding the term of office for which the Chief Executive Officer is appointed, his/her functions shall terminate automatically at the latest at the end of the first Ordinary Shareholders’ Meeting held during the year the Chief Executive Officer reaches EIGHTY (80) years of age.
The Board of Directors determines the Chief Executive Officer's compensation under the conditions set out in the applicable regulations.
The Board of Directors may, on the Chief Executive Officer's proposal appoint an individual, who may or may not be a Director, to assist the Chief Executive Officer, with the title of Executive Vice President (Deputy CEO) (Directeur Général Délégué) who may not be older than EIGHTY (80) years of age on the day of his or her appointment. In agreement with the Chief Executive Officer, or the Chairman of the Board of Directors if the latter serves as the Chief Executive Officer, the Board of Directors determines the scope and duration of the powers delegated to each Executive Vice President (Deputy CEO).
The Company will be audited by one or more Statutory Auditors who are appointed and shall perform their duties in conformity with the law.
Any agreement that is entered into, either directly or through another person, between the Company and a member of its Board of Directors, its Chief Executive Officer, one of its Deputy Chief Executive Officers or a shareholder holding a percentage of the voting power above the applicable threshold (if such shareholder is a legal entity, the company that controls it within the meaning of Article L.233-3 of the French Commercial Code) must be submitted to the prior approval of the Board of Directors.
The same procedure shall stands for agreements in which one of the persons mentioned in the preceding paragraph has an indirect interest, as well as agreements entered into between the Company and another company, if a director, the Chief Executive Officer or a Deputy Chief Executive Officer of the Company has an ownership interest in the latter; is an unlimited partner, manager or trustee; is a member of its supervisory board; or, in general, is a director and/or officer therein.
The prior authorization of the Board of Directors is motivated by giving reasons indicating the interest of the agreement for the Company, in particular, by specifying the financial conditions attached to it.
In accordance with the provisions of article L.225-39 of the French commercial code, the above provisions are not applicable to agreements concerning current operations entered into under normal conditions nor to agreements entered into between two companies, one of which holds, directly or indirectly, all of the share capital of the other, if applicable, less the minimum number of shares required to satisfy the requirements of article 1832 of the French civil code, or articles L.225-1, L.22-10-1, L.22-10-2 and L.226-1 of the French commercial code.
Agreements concluded and authorized in prior periods that remained in force in the last period are reviewed each year by the Board of Directors and reported to the statutory auditors for the purpose of producing their special report on regulated agreements.
The calling of meetings.
Shareholders' meetings are called and conduct proceedings according to the conditions set by law.
Meetings will be held at the registered office or at any other place indicated in the notice of meeting.
Collective decisions of shareholders are adopted in Ordinary, Extraordinary or Special General Meetings depending on the nature of the decisions involved.
Shareholders are called by the Board of Directors to attend General Shareholders’ Meetings or by the Statutory Auditors, or by a court-appointed trustee according to the terms and conditions provided for by law.
General shareholders' meetings are called by a notice placed in a publication for legal announcements in the department of the registered office in addition to the French national publication for legal announcements (Bulletin des Annonces Légales Obligatoires or B.A.L.O.) at least fifteen days before the date of the Meeting.
Shareholders holding registered shares for at least one month from the date of publication of the notice of meeting will also be called to attend any meeting by ordinary mail, or, upon request and at their expense by registered letter.
When the shareholders' meeting was unable to conduct proceedings due to the absence of the required quorum, the second meeting, and where applicable, the postponed second meeting, is called in accordance with procedures and timetables imposed by applicable regulations. The notice of and letters calling the second meeting shall repeat the date and the agenda of the first meeting notice.
Access to meetings - Representation
Any shareholder may attend meetings in person or by proxy, regardless of the number of shares owned, subject to proof of identity, on condition that the shares are paid up in full and have been registered in the securities account in the name of the shareholder or the intermediary, in accordance with subsection 7, article L.228-1 of the French commercial code no later than the second business day preceding the date of the shareholders meeting at midnight Paris time, either in the registered securities account maintained by the company or the bearer share account maintained by the authorized intermediary.
All shareholders may be represented at meetings in accordance with the provisions provided for by law. A shareholder may be represented by another shareholder or by his or her spouse or civil law partner. The shareholder may be represented by any other individual or legal entity of his or her choice. The designation or revocation of a proxy holder may be notified by electronic means.
Any shareholder may also, if the Board of Directors decides when calling the meeting, participate through videoconferencing or by any means of telecommunications or remote transmission including online participation through the Internet, under the conditions provided by regulations in force at that time. When applicable, this decision will be announced in a meeting notice published in the French publication for legal announcements (Bulletin des Annonces Légales Obligatoires or BALO).
Those shareholders using, within the specified time periods, the electronic voting form made available on the website by the entity assuring the general meeting services, are considered as shareholders that are present or represented. Electronic forms may be completed and signed directly in accordance with the first line of the second subsection of Article 1367 of the French civil code (code civil), notably by means of an identifier and password. The proxy or voting forms completed electronically prior to the meeting, as well as the acknowledgment of receipt that will be given in reply, will be considered as irrevocable written proof and binding on all parties. Notwithstanding the foregoing, in the event of transfer of ownership before the second business day preceding the Shareholders’ Meeting at midnight (Paris time), the Company shall invalidate or modify accordingly, as the case may be, the vote by proxy or voting form before this date and time.
Record of attendance - Committee - Minutes
An attendance sheet, duly signed by the shareholders present and the proxies to which are attached the powers given to each proxy and, where applicable, the mail voting forms, is certified as authentic by the officers of the Meeting.
Shareholders’ Meetings are chaired by the Chairman of the Board of Directors or, in his/her absence, by a Director specifically appointed for this purpose by the Board. Otherwise, the Meeting itself shall elect a Chairman.
Vote counting shall be performed by the two shareholders who are present and accept such duties, representing, either on their own behalf or as proxies, the greatest number of votes.
The officers of the Meeting shall appoint a secretary who is not required to be a shareholder.
The minutes shall be prepared, and copies or excerpts of the proceedings shall be issued and certified as required by law.
Quorum – Vote
Ordinary and Extraordinary General Shareholders Meetings issue decisions according to the conditions of quorum and majority required by the provisions which govern them respectively.
Voting rights attached to the capital shares and dividend-right (bonus) shares are proportional to the percentage of the share capital that such shares represent. Each share confers one voting rights.
Fully paid up shares registered in the name of the same shareholder for at least three years carry a double voting right.
The conditions for exercising this double voting right are defined above in Article 11.
In accordance with the provisions of article L.233-7 of the French commercial code, all shareholders, natural persons or legal entities, acting alone or in concert, who cross thresholds in either direction in respect to the number of shares owned representing more than one twentieth, one tenth, three twentieths, one fifth, one quarter, three tenths, one third, one half, two thirds, eighteen twentieths or nineteen twentieths of the capital or voting rights of the Company, must inform the Company by registered mail with return receipt of the number of shares and voting rights they hold within four trading days thereafter before the close of trading. This notification must also be sent to the AMF no later than the fifth trading day before the close of trading following the day this threshold was crossed.
The disclosure requirement referred to in the preceding paragraph is also mandatory within the same time limits whenever the percentage of capital or voting rights held falls below one of the thresholds mentioned above.
Parties subject to the disclosure obligations set forth in the first paragraph of this article shall indicate the number of shares they possess giving immediate or future access to the capital of the Company as well as the voting rights attached thereto.
This notification shall also indicate the number of shares already issued or the voting rights that may be acquired under an agreement or financial instrument, without prejudice to financial instruments able to be settled at the sole initiative of the holder of securities already issued.
In addition, shares already issued or voting rights involving any agreement or financial instrument mentioned exclusively cash-settled and with a similar economic effect to the holding of such shares shall also be reported.
Under article L. 233-7 subsection VII of the French Commercial Code, said shareholders must also disclose their intentions with regard to their holdings for the next six months whenever thresholds of more than one tenth, three twentieths, one fifth or one quarter of the capital or voting rights have been crossed. This notification must be sent to the AMF no later than the fifth trading day before the close of trading following the day this threshold was crossed.
In the event of a change in intent within six months after filing this notification, a new notification setting forth the justifications shall be drawn up and submitted under the same conditions. This new notification results in the commencement of a new six-month period.
When the Company's shares are traded on a regulated market, the Ordinary General Meeting may authorize the Board of Directors for a period not to exceed eighteen months to purchase its own shares in accordance with Articles L.22-10-62 et seq. and L.225-210 et seq. of the French commercial code (code de commerce) and under the conditions set forth in those articles.
This meeting must set the terms of the transaction and notably the maximum purchase price and minimum selling price, the maximum number of shares to be acquired and the period within which the share buyback must be carried out.
The fiscal year is a twelve-month period starting on January 1 and ending December 31.
Regular accounts shall be maintained of corporate transactions in accordance with the provisions of the law.
At the end of each period, the Board of Directors draws up an inventory of the different items comprising the assets and liabilities that exist on this date.
It also produces a balance sheet describing the assets and liabilities with a separate presentation for equity, an income statement summarizing revenue and expense items of the period and notes to the financial statements including comments on the balance sheet and income statement items.
The Board of Directors produces a management report presenting the situation of the Company for the fiscal year ended, forecasted trends and outlook, material events occurring between the closing date and the publication date of the report and finally research and development activities.
It also produces the Corporate Governance report, which includes information relating to the composition, functioning and competence of the Board, the compensation of the executive officers and Items likely to have an impact in the event of a public offer.
If the financial statements approved by the shareholders’ meeting show a distributable profit as defined by law, the shareholders’ meeting decides whether to make appropriations to one or more retained earnings or reserve accounts under its control, to carry it forward or to distribute it.
The shareholders’ meeting may grant shareholders the choice of receiving a dividend in cash or in shares for all or part of the dividend or interim dividend to be distributed, subject to the applicable legal provisions.
Following the approval of the financial statements by the General Meeting of the shareholders, any losses that may occur are carried forward to be offset against future earnings until these losses have been fully used.
If, pursuant to the recognition of losses in the accounting documents, the Company's equity falls below one half of the share capital, the Board of Directors is required within four months following the date of approval of the financial statements showing this loss, to call an extraordinary general meeting of shareholders for the purpose of deciding whether the early dissolution of the Company is warranted.
If a decision to wind up is not pronounced, the share capital must, subject to legal provisions relating to minimal share capital for French limited liability companies (sociétés anonymes), within the time frame established by law, be reduced by an amount equal to the losses that were not charged against reserves, if, within that period equity has not risen back above a level corresponding to at least half the share capital.
The Company may be transformed into another form of company if at the time of its transformation it has been in existence for at least two years and a balance sheet for these first two years has been produced and approved by the shareholders.
The decision to transform the Company into a company with another legal form is made pursuant to a report by the Statutory Auditors of the Company who must certify that the equity is at least equal to the share capital.
The transformation of the Company into a partnership requires the agreement of all the partners. In this case, the conditions provided for above are not required.
The transformation of the Company into a limited partnership (société en commandite simple) or a corporate partnership limited by shares (société en commandite par actions) is decided according to the same conditions provided for an amendment to the articles of incorporation and bylaws and subject to agreement of all partners who agree accordingly to be limited partners.
The transformation into a limited liability company is decided according to the same conditions provided for an amendment to the articles of incorporation and bylaws for companies with that form.
At the expiration of the term set by Company or in the case it is wound up before term, the General Meeting establishes the terms and conditions for winding up the Company and appoints one or more liquidators for which it determines the powers and who shall perform their duties according to the law.
Any disputes that might arise in the course of the life of the Company or its winding-up process between the Company and its shareholders or the Directors, or among the shareholders themselves relating to Company matters, shall be judged in accordance with applicable French law and referred to the courts of competent jurisdiction.
Board of Directors’ Internal Rules
Updated on January 24, 2022
The members of the Board of Directors of Interparfums wished to agree to the rules of procedure that are the internal rules of the Board of Directors. By adopting these internal rules, the Board of Directors of Interparfums refers to the intent of the MiddleNext corporate governance code through its recommendations and checkpoints.
These internal rules apply to all current and future directors and are intended to supplement the legal and regulatory rules and articles of association applicable to Interparfums to lay down the operating procedures of the Board of Directors, in the interest of Interparfums, its directors and its shareholders.
The internal rules are for internal use and do not replace the company’s articles of association but implement them from a practical standpoint. This means that they are not binding on third parties. Shareholders will be informed of their existence on the company’s website, and/or in the Chair’s report on internal control and corporate governance and/or in the registration document.
They may be amended by a resolution of the Board of Directors.
These Internal Regulations were adopted in their original version at the meeting of the Board of Directors on March 3rd, 2009. It was completely overhauled in 2017 following the adoption of the revised Middlenext Code.
The last update was made on January 24th, 2022.
The purpose of these Internal Rules is to lay down the rules and operating procedures of the Board and its committees, if any, in addition to the provisions of the law and the articles of association of Interparfums and with reference to the MiddleNext Code.
The Rules also lay down the missions and, where applicable, the limitations of powers of top management to clarify the roles of each governance body and recall the obligations of each Board member and of any committees, whether the member is a natural person or permanent representative of a legal person.
2.1 Powers of the Board
2.1.1 Representing all shareholders
The Board of Directors, as a collegial body, collectively represents all the shareholders, and imposes on each of its members the obligation to act in the corporate interest in all circumstances.
The role of the Board of Directors is based on two fundamental elements, decision-making and monitoring:
- The function of decision-making involves the development, in conjunction with the company’s management, of fundamental policies and strategic objectives, as well as the approval of certain important actions,
- The function of monitoring includes consideration of management decisions, compliance of systems and controls, and implementation of policies.
The mission of the Board of Directors is to determine the priorities of Interparfums’ activity, to choose the strategy and to monitor its implementation. The Board addresses any issue that is relevant to the smooth operation of the Company.
In particular, to:
- appoint the corporate officers
- approve the annual and interim financial statements
- convene and set the agenda for general meetings of shareholders;
- carry out the checks and audits it deems appropriate;
- discuss the major transactions contemplated by the company;
- keep abreast of any important event concerning the company.
2.1.2 Addressing strategic priorities
The Board of Directors shall vote on all decisions relating to Interparfums’ major strategic, economic, social, financial or technological priorities as prepared and presented by the Chief Executive Officer for discussion during Board meetings. The Board ensures that they are implemented by Top Management.
The Chief Executive Officer also presents a draft annual budget within the framework of the priorities that is discussed and possibly amended and approved by the Board. The Chief Executive Officer is responsible for implementing the strategic plan and annual budget priorities. It shall inform the Board of any problem or, more generally, of any fact that calls into question their implementation.
2.1.3 Examining the succession plan of the “Manager” and key persons
The Board or a specialised committee regularly includes on its working agenda, the matter of the succession of the Manager (and possibly a certain number of key persons).
2.1.4 Considering a proposed check or audit
A proposed check or audit may be submitted to the Board of Directors by the Chair or by the Audit Committee. In any event, it shall deliberate on the check or audit as soon as possible.
When the Board decides that it should be carried out, it shall precisely lay down the purpose and procedures in a resolution and shall carry it out or entrust it to a third party. When the Board resolves that the check or audit will be carried out by a third party, the mission is defined in accordance with the conditions set out in the following article.
The Chair sets the conditions for carrying out the check or audit. In particular, measures are taken to ensure that the conduct of the audit disrupts the smooth operation of the company’s business as little as possible. Interparfums staff are interviewed when necessary. The Chief Executive Officer ensures that the information useful for the check or audit is provided to the person who performs it. No matter who performs the check or audit, he/she is not permitted to interfere in business management. A report is made to the Board of Directors after the check or audit. The Board resolves what action to take based on its findings.
2.1.5 Reviewing the checkpoints of the Middlenext Code
Each year, the Board reviews the checkpoints in the Code. It reports on its review in the corporate governance report and/or in the registration document.
2.1.6 Conferring a mission on a director
When the Board of Directors resolves that one (or more) of its members should be entrusted with a mission, it shall establish the main characteristics thereof. The director concerned does not take part in the vote and the mission is governed by a regulated agreement.
2.2 Procedures for actions by the Chair and top management
2.2.1 The Chair of the Board
The Board of Directors appoints from its members a Chair who must be a natural person and who may be elected for the entire duration of his term of office as director and who may be re-elected.
The Chair chairs the meetings of the Board of Directors. If the Chair is absent, the Board meeting shall be chaired in accordance with the rules set out in the Articles of Association or, failing that, by a member of the Board appointed by a majority of the votes of the members present or represented. He/she organises and directs the work of the latter, and reports on it to the general meeting of shareholders.
He/she has the necessary material resources to ensure the proper functioning of the corporate bodies and ensures in particular that the directors are able to fulfil their mission.
2.2.2 Top management procedures
The Board determines the procedures for the exercise of top management's duties under the conditions provided for by the articles of association. In accordance with legal provisions, the top management duties are performed under his/her responsibility, either by the Chair of the Board of Directors or by another natural person appointed by the Board of Directors and bearing the title of Chief Executive Officer. Shareholders and third parties are informed of this choice under the conditions laid down by current regulations. The Board of Directors determines the duration of the option, and the Board’s decision on this matter remains, in any case, valid until otherwise decided.
Interparfums’ Board of Directors decided not to separate the offices of Chair of the Board and Chief Executive Officer.
The Chief Executive Officer may be assisted by one or more Deputy Executive Officers, appointed by the Board of Directors in accordance with the legal conditions and those in the articles of association.
The Board of Directors is constantly committed to ensuring the implementation by Top Management of the priorities it has defined.
2.2.3 Top management powers - Limitations
The Chief Executive Officer, whether this title is held by the Chair of the Board of Directors or by another person, has the broadest powers to act in all circumstances on behalf of the company. He/she shall exercise the powers within the limits of the company’s objects, in accordance with the rules set out in the company’s articles of association and subject to those expressly granted by law to general meetings of shareholders and the Board of Directors.
The following strategic decisions require Board approval:
- any financial commitment (immediate or deferred) in an amount exceeding €10 million per transaction and having a significant impact on the company's consolidation scope, i.e. acquisitions or disposals of assets or investments in companies;
- any decision, regardless of the amount, that could substantially affect the company’s strategy or significantly change the scope of its usual business.
The Chief Executive Officer represents the company in its dealings with third parties.
2.3 Third-party liability insurance of Corporate Officers (RCMS in the French acronym)
INTERPARFUMS has taken out third-party liability insurance on behalf of and for the benefit for executive directors serving as corporate officers (RCMS in the French acronym).
The composition of the Board of Directors firstly reflects the company’s desire to rely on different and complementary experiences, skills and profiles. Thus, the first quality of a Board of Directors is its composition: honest, competent directors, who understand the operation of the company, who are mindful of the interests of all shareholders and who are sufficiently involved in defining the strategy and in deliberations to effectively participate in its decisions.
3.1 Conditions for the appointment of members of the Board
The articles of association set the number of members of the Board of Directors.
Directors are appointed or reappointed by the general meeting of shareholders, except for any directors who are also employees.
In accordance with the articles of association, the term of office of director is 4 years. However, as an exception and to stagger terms of office, directors may be appointed for a term of 2 or 3 years.
The rules contained in the articles of association set the maximum age of directors at eighty (80 years) for one-third of directors in office. If the limit set forth in the articles of association is exceeded, the oldest director shall be deemed to have automatically resigned subject to the provisions of the articles of association.
3.2 Independence criteria for directors
The Board has at least two independent members. A director is deemed to be independent when he/ she has no relationship of any kind with the company, its group or its management that could compromise the exercise of his /her freedom of judgement.
Each year, the Board examines the situation of each of its members and ensures that, in accordance with the MiddleNext Governance Code, they meet the following criteria on an ongoing basis:
- He/she has not, during the last five years, been an employee or executive corporate officer of the company or a company in its group;
- He/she was not, during the last two years, and is not currently party to a significant business relationship with the company or its group (customer, supplier, competitor, service provider, creditor, banker, etc.);
- He/she has not been a key shareholder of the company or held a significant percentage of voting rights;
- He/she has not had a close family relationship with a corporate officer or a key shareholder;
- He/she has not been the company’s statutory auditor during the last six years.
In this respect, the Board may consider that a member is independent even though he/she does not meet all the independence criteria and vice versa consider that a member is not independent even though he/she fulfils all the independence criteria. The Board must then justify its position.
Upon the appointment of a new member or the renewal of the term of office of one of its members, the Board of Directors shall examine the situation of that member with regard to the criteria set out above.
Each member qualified as independent shall inform the Chair, as soon as he/she becomes aware of any change in his/her personal situation with regard to these same criteria.
4.1 Duty of loyalty and compliance with laws and articles of association
In the exercise of their appointment to said office, each director must take decisions according to the company’s corporate interest. Each director must fully realise the extent of his/her rights and obligations, be aware of and undertake to comply with the legal and regulatory provisions relating to his /her position, as well as the rules specific to the company resulting from its articles of association and the internal rules of its Board.
The members of the Board, when serving as directors may not accept more than two other directorships in listed companies, including foreign companies, outside their group.
4.2 Disclosure obligation/Conflicts of interest
In a situation in which there is or may be a conflict of interest between the corporate interest and his/her direct or indirect personal interest or the interest of the shareholder or group of shareholders that he/she represents, the director concerned must:
- inform the Board as soon as he/she becomes aware thereof,
- and draw any consequences thereof for the exercise of his/her appointment to the office of director. Depending on the case, he/she will therefore be required:
- either to abstain from voting on the corresponding resolution,
- or not to attend the meeting of the Board of Directors during which he/she is in a conflict of interest situation,
- or, resign outright as a director.
Once a year, the Board reviews known conflicts of interest. Each director shall inform the Board of any changes in his/her situation.
4.3 Directors' confidentiality obligation
The members of the Board of Directors are bound by an absolute obligation of confidentiality with regard to the content of the discussions and deliberations of the Board and, where applicable, its committees, as well as with regard to the information presented therein. In general, members of the Board, with the exception of the Chair and the Chief Executive Officer, are required to refrain from issuing any external communications in their official capacity, in particular with regard to the press.
In the event of a proven breach of the duty of confidentiality by one of the directors, the Chair of the Board, after consulting the members of the Board meeting held for this purpose, shall report to the Board on the action it intends to take on said breach.
4.4 Duty of diligence and attendance
By accepting the appointment to office conferred on him/her, each director undertakes to be fully responsible for fulfilment thereof, namely to:
- Devote all necessary time to examining the matters dealt with by the Board and, where applicable, the committee of which he/she is a member;
- Request any additional information that he/she considers useful;
- Ensure that these rules are applied;
- Freely form his/her opinion before any decision is made, with a view solely to promoting the interests of the company;
- Actively participate in all Board meetings, unless prevented from doing so;
- Attend the general meeting of shareholders;
- Make all proposals aimed at constantly improving the working conditions of the Board and its committees.
4.5 Obligation and right to information
To participate effectively in the work and deliberations of the Board, the company shall provide the Board members with all relevant documents within a reasonable period of time. Requests for this purpose are made to the Chair.
Each member of the Board is authorised to meet the company’s key executives, provided that they inform the Chair thereof beforehand.
The Board is regularly informed by the Chair of the financial position, cash flow, financial commitments and significant events for the company and the Group.
Finally, any new Board member may request training on the specificities of the company and its group, their business lines and their business sectors.
4.6 Non-competition obligation
Prioritising the company’s interests over his/her personal interests requires the director to enter into an obligation of non-competition. Throughout his/her term of office, each member of the Board shall refrain from holding any position in a company competing with the company and the companies it controls. Before any new appointment, he/she will inform the company thereof.
4.7 Obligations relating to the holding of company shares
It is recommended that each director holds 300 shares.
Each Board member undertakes to register the shares of the company, its parent company or its subsidiaries, held by him/her and his/her minor children or his/her separated spouse.
4.8 Obligation to abstain from trading in the company's securities during certain negative periods
In accordance with the Stock Exchange Code of Ethics adopted by the Company, the members of the Board must refrain from trading in the company’s securities:
- During the minimum 30 calendar days prior to the release of the interim and annual financial results
- During the minimum 15 calendar days preceding the publication of each sales revenue report (annual, six monthly or quarterly).
A schedule of these negative windows, taking into account the scheduled periodic publication dates, is provided to each director and made available on the Company's website.
It must be checked before any trading. Trading is only authorised after the publication of the information concerned, provided that the person concerned does not hold any insider information elsewhere.
4.9 Obligations relating to the possession of insider information/Prevention of insider trading and breaches
Generally speaking, and with regard to non-public information acquired in the context of his/her duties, any member of the Board must consider himself/herself bound by true professional secrecy that goes beyond the simple obligation of discretion provided for by Article L. 225-37 of the French Commercial Code. More specifically, as a result of the performance of their duties, all members of the Board regularly have precise, non-public information concerning the company or the financial instruments that it issues, which, if made public, would be likely to have a significant impact on the price of its shares.
As such, each Board member is included on the list of insiders drawn up by the company in accordance with Article 18 of European Regulation No. 596/2014 on market abuse, referred to as MAR (Market Abuse Regulation).
As soon as he/she holds such information, each Board member must abstain from:
- Carrying out or attempting to carry out insider trading, in particular by acquiring or selling, or by attempting to acquire or sell, on his/her own behalf or on behalf of a third party, either directly or indirectly, the financial instruments to which this information relates or the financial instruments to which these instruments are linked - by cancelling or modifying orders previously placed on Interparfums shares;
- Disclosing or attempting to disclose such information to another person outside the normal course of his/her work, profession or duties;
- Recommending or attempting to recommend or inducing or attempting to induce another person to acquire or dispose of, or have another person acquire or dispose of, such financial instruments.
- To make use of or communicate a recommendation or incitement made by an insider if the person knows or should know that it is based on inside information.
4.10 Reporting of securities transactions and the crossing of thresholds
Each director must be diligent in reporting his/her securities transactions and crossing of thresholds in a timely manner.
5.1 Frequency of meetings
The Board meets as often as required by the corporate interest and at least 4 times a year. The meeting schedule is set at least one year in advance.
5.2 Agenda and provision of information to the members of the Board
The Chair draws up the agenda for each meeting of the Board of Directors and communicates it by any appropriate means to its members.
The documents enabling the directors to make an informed decision on the items on the agenda shall be communicated to the directors within a reasonable period before the Board meeting, unless there is an emergency or a need to ensure complete confidentiality.
In any event, the Board of Directors may, at each of its meetings, in the event of an emergency, and on the proposal of the Chair, deliberate on matters not included in the agenda provided to its members.
Any director wishing to make a visit to an establishment to obtain the information necessary for the exercise of his/her appointment as a director shall make a written request to the Chair specifying the purpose of the visit. The Chair lays down, in conjunction with the Chief Executive Officer, the conditions of access and organises the procedures for the visit.
5.3 Meeting Venues
Meetings shall be held in any location indicated in the articles of association or, failing that, in the place indicated in the notice of meeting.
5.4 Use of videoconferencing or telecommunication resources
As far as possible, for reasons of efficiency, the Board shall meet in person.
If this is impossible, videoconferencing is preferable to a telephone call. The means of videoconferencing or telecommunication must satisfy technical characteristics ensuring effective participation in the Board of Directors meeting, the deliberations of which will be broadcast continuously and simultaneously. Thus, the Board of Directors may validly meet provided all or some of its members are linked continuously and simultaneously, at least orally, by means of a broadcast system established by web cameras connected to the Internet, or by telephone conference call.
5.5 Technical glitches
If a technical glitch occurs in the videoconferencing or telecommunication process, during a meeting of the Board of Directors, the minutes of the meeting must record it. If the glitch interrupts the continuity of the broadcast, or if it causes a deterioration of the recording to the extent that the quality of the image or sound is no longer capable of allowing effective participation in the meeting of all the directors present, the meeting will be suspended.
The meeting shall resume as soon as the technical conditions once again allow the directors to communicate and deliberate under the above conditions.
5.6 Prohibition of certain decisions by videoconferencing and telecommunications
The above provisions are not applicable to the adoption of decisions relating to the audit and checking of the annual and consolidated financial statements and, where applicable, in cases excluded by the articles of association.
5.7 Attendance registers
An attendance register shall be kept, which shall be signed by the directors who attended the Board meeting in person and which, where applicable, shall mention the names of the directors who participated in the deliberations by videoconferencing or other means of telecommunications (both the persons using said resources and those whom they represent).
5.8 Quorum and majority
For the purposes of calculating the quorum and majority, directors participating by videoconferencing or telecommunication means shall be deemed in attendance.
All directors may attend a meeting simultaneously by videoconferencing or other means of telecommunication.
5.9 Power of representation
Any director may be represented by another director at a given meeting. Powers of representation must be conferred in writing, which may include by e-mail. Each director may hold only one power to represent another at the same meeting.
The foregoing provisions apply to the permanent representative of a legal person director.
The deliberations of the Board of Directors shall only be valid if at least half of its members are in attendance, unless specifically provided otherwise by the articles of association.
Decisions are taken by a majority of the members present or represented, except in the case of a specific provision of the articles of association. A director appointed by one of his/her peers to represent him/her shall have two votes.
The Chair of the Board of Directors or, in his/her absence, the person replacing him, shall lead the discussions.
The deliberations of the Board of Directors are recorded in minutes kept in a special register drawn up in accordance with the laws and regulations in force and signed by the Chair of the meeting and at least one director. If the Chair of the meeting is unable to attend, the minutes shall be signed by at least two directors.
The minutes shall be approved at the next meeting. To this end, they are sent in advance in draft form to each director.
The minutes of the meeting indicate the names of the directors present or deemed present, excused or absent. The minutes shall record the attendance or absence of persons who were given notice of the Board meeting and the attendance of any other person who attended all or part of the meeting.
The minutes shall mention any videoconferencing system or other means of telecommunication used, the name of each director who participated in the Board meeting using such means and, if applicable, any technical glitch that disrupted the conduct of the meeting, including the interruption and resumption of remote participation.
Where applicable, the minutes shall record divergent positions expressed by directors.
Copies or excerpts of minutes are validly certified true by the Chair of the Board of Directors, the Chief Executive Officer, the director temporarily delegated to act as Chair of the meeting, the Secretary of the Board of Directors or an agent authorised for this purpose by the Board.
5.12 Role of the Secretary of the Board
In accordance with the articles of association, the Board of Directors may appoint a secretary, who does not have to be a member of the Board. The Secretary of the Board is responsible for convening meetings of the Board of Directors on the Chair’s motion and drawing up the draft minutes of meetings of the Board of Directors, which are submitted for the latter’s approval.
He/she is responsible for sending working documents to directors, and more generally makes himself/herself available to directors for any requests for information concerning their rights and obligations, the operation of the Board or the life of the company.
5.13 Assessment of the Board’s work
The Board of Directors shall assess its work once a year, in particular:
- It reviews its operating procedures, composition and organisation, as well as those of its committees, if any;
- It verifies that important matters are usefully prepared and discussed.
The Board of Directors reports on the assessment in the minutes of the meeting and informs the shareholders thereof each year in the annual report.
5.14 Meeting of directors without the attendance of the Chair
Directors - collectively or the independent directors only - meet regularly without the attendance of the Chair to discuss the performance of the Chair and Chief Executive Officer if the functions of Chair of the Board of Directors and Chief Executive Officer are combined, or if the functions of Chair and Chief Executive Officer are held by different persons.
To prepare its work, the Board of Directors may set up specialised committees composed of directors appointed by the Board and determine their remit.
Similarly, with a view to the efficiency of the Board, it can freely abolish committees that have become unnecessary.
The Committees perform their duties under the responsibility of the Board of Directors: they issue proposals, recommendations and opinions within their remit.
6.1 Audit committee
Because of the size of the company and the operating procedures of the Board of Directors, the Board has set up an independent Audit Committee.
The role of the Audit Committee is mainly to examine the process for approving the annual and six-monthly consolidated and company financial statements, as well as the process for preparing financial information.
It is responsible for relations with the Statutory Auditors; it manages the selection procedure for Statutory Auditors, ensures that they are independent, and also monitors the internal control and risk management procedures.
The Audit Committee has drawn up a charter previously approved by the Board of Directors, describing its organisation, operation, remit and powers.
6.2 Ad hoc committees
The Board of Directors may set up one or more temporary ad hoc committees at any time to resolve conflicts of interest; it is responsible for determining the composition and operating procedures of such committees.
Directors may receive directors’ fees, the amount of which is voted by the ordinary shareholders’ meeting and the allocation of which is decided by the Board of Directors according to the time they devote to their mission, in part depending on their attendance, and lastly, if applicable, depending on the performance of certain specific missions.
The Board of Directors sets the remuneration of the Chair and the Chief Executive Officer and discusses the remuneration of any director of the company.
These internal rules may be amended by a Board resolution.
Any new Board member will be asked to sign them at the same time as he/she takes office.
All or part of these internal rules will be made public and accessible on the company’s website.