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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995.
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
FOR THE TRANSITION PERIOD FROM TO .
COMMISSION FILE NUMBER 1-9750.
SOTHEBY'S HOLDINGS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MICHIGAN 38-2478409
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
500 NORTH WOODWARD AVENUE, SUITE 100
BLOOMFIELD HILLS, MICHIGAN 48304
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (810) 646-2400
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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Class A Limited Voting Common Stock, New York Stock Exchange
$0.10 Par Value London Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIODS THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS) AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES ....X... NO ........
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /
As of March 11, 1996, the aggregate market value of the 38,754,147 shares of
Class A Limited Voting Common Stock held by non-affiliates of the registrant was
$561,935,132, based upon the closing price ($14.50) on the New York Stock
Exchange composite tape on such date. (For this computation, the registrant has
excluded the market value of all shares of its Class A Limited Voting Common
Stock reported as beneficially owned by executive officers and directors of the
registrant; such exclusion shall not be deemed to constitute an admission that
any such person is an "affiliate" of the registrant.) As of March 11, 1996,
there were outstanding 38,792,335 shares of Class A Limited Voting Common Stock
(the "Class A Common Stock") and 17,278,667 shares of Class B Common Stock (the
"Class B Common Stock"), freely convertible into 17,278,667 shares of Class A
Common Stock. There is no public market for the registrant's Class B Common
Stock, which is held by affiliates and non-affiliates of the registrant.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the annual shareholders report for the year ended December 31,
1995 (the "Annual Report") are incorporated by reference into Parts I and II.
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PART I
ITEM 1. BUSINESS
GENERAL
Sotheby's Holdings, Inc. (together with its subsidiaries, unless the context
otherwise requires, the "Company") is the world's preeminent auctioneer of fine
arts, antiques and collectibles, offering property in over 70 collecting
categories, among them paintings, jewelry, decorative arts and books. The
worldwide auction business is conducted through a division known as "Sotheby's"
and consists of three principal operating units: Sotheby's North and South
America ("Sotheby's, Inc."), Sotheby's Europe and Sotheby's Asia. In addition to
auctioneering, the Company is engaged in art-related financing activities, the
marketing and brokering of luxury real estate and art education and restoration.
The Company believes it is one of the world's leaders in art-related
financing activities. The Company lends money secured by consigned art in order
to facilitate clients' bringing property to auction. In addition, a portion of
the Company's loan portfolio consists of loans to collectors, dealers and
museums secured by collections not presently intended for sale.
The Company, through its subsidiary, Sotheby's International Realty, Inc.,
is engaged in the marketing and brokering of luxury residential real estate.
The Company was incorporated in Michigan in August 1983. In October 1983,
the Company purchased Sotheby Parke Bernet Group Limited, which was then a
publicly held company listed on the International Stock Exchange of the United
Kingdom and the Republic of Ireland Limited (the "London Stock Exchange") and
which, through its predecessors, had been engaged in the auction business since
1744. In 1988, the Company sold shares of Class A Common Stock to the public.
The Class A Common Stock is listed on the New York Stock Exchange (the "NYSE")
and the London Stock Exchange.
THE AUCTION BUSINESS
Transactions in the international art market are effected through numerous
dealers, the two major auction houses and smaller auction houses and also
directly between collectors. Although dealers and smaller auction firms do not
generally report sales, the Company believes that dealers account for the
majority of the volume of transactions in the international art market.
The Company and Christies International Plc, a United Kingdom publicly held
company ("Christies"), are the two largest art auction houses in the world. The
Company conducted aggregate auction sales in 1995 of $1.67 billion
(approximately B.P.1.05 billion). Christies' aggregate auction sales in 1995
were approximately $1.47 billion (B.P.931 million reported). The auction sales
of the next largest art auction house, Phillips International Auctioneers and
Valuers, were approximately $155 million (B.P.98 million reported) for the year
ended December 31, 1995.
The Company auctions a wide variety of property, including fine arts,
jewelry, decorative arts and rare books. In an approximate breakdown of 1995
auction sales by type of property, fine arts accounted for approximately $832
million, or 50%, of auction sales; decorative arts accounted for approximately
$445 million, or 27%, of auction sales; and jewelry, rare books and other
property accounted for approximately $388 million, or 23%, of auction sales.
Most of the objects auctioned by the Company are unique items, and their
value, therefore, can only be estimated prior to sale. The Company's principal
role as an auctioneer is to identify, evaluate, appraise and authenticate works
of art through its international staff of specialists, to stimulate purchaser
interest through professional marketing techniques and to match sellers and
buyers through the auction process.
1
In its role as auctioneer, the Company generally functions as an agent
accepting property on consignment from its selling clients. The Company conducts
its auctions as agent of the consignor, billing the buyer for property
purchased, receiving payment from the buyer and remitting to the consignor the
consignor's portion of the buyer's payment. In certain situations, the Company
releases property sold at auction to buyers, primarily dealers, before the
Company receives payment. In such event, the Company will pay the seller the net
sale proceeds for that property at the time that payment, pursuant to the
consignment, is due the seller, even if the Company has not received payment
from the buyer.
In addition, on certain occasions, the Company will assure the consignor a
minimum price in connection with the sale of property. The Company must perform
under its assurances only in the event that (a) the property fails to sell at
auction and the consignor prefers to be paid the minimum price rather than
retain ownership of the unsold property, resulting in the Company's purchase of
the property at the minimum price; or (b) the property sells for less than the
minimum amount and the Company must pay the difference between the sale price at
auction and the amount of the assurance. See Note N to the Consolidated
Financial Statements in the Annual Report.
All buyers pay a premium (known as the buyer's premium) to the Company on
auction purchases. The buyer's premium in North America is 15% of the hammer
price on all items sold for $50,000 or less and if the property is sold for more
than $50,000, 15% of the first $50,000 and 10% of the remainder of the purchase
price. Generally, similar structures apply throughout most of the remainder of
Sotheby's auction operations. Beginning in 1995, as changes in value added sales
taxes were implemented throughout Europe, the Company's commissions were
adjusted to reflect such changes. The Company also charges sellers a selling
commission, which until September 1995, was frequently negotiated on a per lot
basis. As of September 1995, in most jurisdictions in which the Company
operates, the Company instituted a commission fee schedule which applies to
sales above $100,000 in most collecting categories. For sales under $100,000,
commissions continue to be charged on a per lot basis. Under the new schedule, a
seller will pay a commission equal to the lesser of (a) the fee schedule rate
applicable to a particular consignment; (b) the fee schedule rate based upon the
total amount of property sold by the seller through the Company and its
subsidiaries during the previous calendar year; and (c) the fee schedule rate
based upon the total amount of property sold to date by the seller through the
Company and its subsidiaries during the current calendar year. The applicable
rate schedule paid by a seller varies, with different rate schedules for private
parties, art dealers and museums.
The Company's operating revenues are significantly influenced by a number of
factors not within the Company's control, including: the overall strength of the
international economy and financial markets and, in particular, the economies of
the United States, the United Kingdom, and the major countries of continental
Europe and Asia (principally Japan and Hong Kong); political conditions in
various nations; the presence of export and exchange controls; taxation of sales
and donation of auctioned property; competition; and the amount of property
being consigned to art auction houses.
The Company's business is seasonal, with peak revenues and operating income
occurring in the second and fourth quarters of each year as a result of the
traditional spring and fall art auction seasons. See "Management's Discussion
and Analysis of Results of Operations and Financial Condition-- Seasonality" in
the Annual Report.
THE AUCTION MARKET
Competition in the international art market is intense. A fundamental
challenge facing any auctioneer or dealer is to obtain high quality and valuable
property for sale. The Company's primary auction competitor is Christies.
The owner of a work of art wishing to sell it has three options: sale or
consignment to, or private brokerage by, an art dealer; consignment to, or
private sale by, an auction house; or private sale to a collector or museum
without the use of an intermediary. The more valuable the property, the more
2
likely it is that the owner will consider more than one option and will solicit
proposals from more than one potential purchaser or agent, particularly if the
seller is a fiduciary representing an estate or trust.
A complex array of factors may influence the seller's decision. These
factors include: the level of expertise of the dealer or auction house with
respect to the property; the extent of the prior relationship, if any, between
the seller and the firm; the reputation and historic level of achievement by a
firm in attaining high sale prices in the property's specialized category; the
amount of cash offered by a dealer or other purchaser to purchase the property
outright compared with the estimates given by auction houses; the time that will
elapse before the seller will receive sale proceeds; the desirability of a
public auction in order to achieve the maximum possible price (a particular
concern for fiduciary sellers); the amount of commission proposed by dealers or
auction houses to sell a work on consignment; the cost, style and extent of
presale marketing and promotion to be undertaken by a firm; recommendations by
third parties consulted by the seller; personal interaction between the seller
and the firm's staff; and the availability and extent of related services, such
as a tax or insurance appraisal and short-term financing. The Company's ability
to obtain high quality and valuable property for sale depends, in part, on the
relationships that certain employees of the Company, particularly its senior art
specialists or management, have established with potential sellers.
It is not possible to measure the entire international art market or to
reach any conclusions regarding overall competition because dealers and smaller
auction firms frequently do not publicly report annual sales totals. Based on
the reported sales of the Company and Christies, the Company has been the world
leader in auction sales of art and related objects during each of the last 10
years.
Regulation
Regulation of the auction business varies from jurisdiction to jurisdiction.
In many jurisdictions, the Company is subject to laws and regulations which are
not directed solely toward the auction business, including but not limited to
import and export regulations and value added sales taxes. Such regulations do
not impose a material impediment to the worldwide business of the Company.
In February 1990, certain members of the Assembly of the State of New York,
the jurisdiction where the Company's principal U.S. auctions are held, initiated
an inquiry with respect to the business practices of auction houses, museums and
art dealers, including the Company. Each year since 1990, certain Assemblymen
have reintroduced proposed legislation which, if enacted, could substantially
alter the manner in which the Company's auction business in New York is
conducted. To date, no legislation has been enacted by the State of New York.
Occasionally, the Company acts as a principal in connection with the sale of
property. For example, the Company acts as a principal through its investment in
Acquavella Modern Art (the "Partnership" or "AMA"), a partnership consisting of
a wholly-owned subsidiary of the Company and Acquavella Contemporary Art, Inc.
("ACA"). The Company accounts for its investment in AMA under the equity method
of accounting in the Consolidated Financial Statements. The net assets of the
Partnership consist principally of inventory. The Company reflects its 50%
interest in the net assets of the Partnership as investment in partnership,
which totalled $38.8 million and $44.3 million at December 31, 1995 and 1994,
respectively. According to the terms of the Partnership agreement, each partner
has a 50% interest in the earnings of the Partnership, but all cash available
for distribution was initially distributed to the Company until the Company
received $270.3 million, together with a return equal to the prime rate (as
defined). Cash distributions now are being made on a 50-50 basis. To the extent
that the Partnership requires working capital, the Company has agreed to lend
the same to the Partnership. Any amounts loaned to the Partnership by the
Company would bear interest, compounded monthly, at the prime rate, plus 1%.
As of December 31, 1995, no such amounts were outstanding. See Note F to the
Consolidated Financial Statements in the Annual Report.
3
In 1995, a wholly-owned subsidiary of the Company acquired property, a
portion of the purchase price for which is contingent on profits from sales of
the property. Some of the property is being sold at auction by the Company. The
Company has also entered into agreements with certain European art dealers to
sell the remainder of the acquired property.
The Company provides financing secured by works of art and other personal
property owned by its clients. The Company's financing activities are conducted
through its wholly-owned direct and indirect subsidiaries.
The Company generally makes two types of secured loans: (1) advances secured
by consigned property to borrowers who are contractually committed, in the near
term, to sell the property at auction; and (2) general purpose loans to
collectors, museums or dealers secured by property not presently intended for
sale. The loans are generally made with full recourse to the borrower. In
certain instances, consignor advances are made with recourse limited to the
works of art consigned for sale and pledged as security for the loan. The
consignor advance allows a consignor to receive funds shortly after consignment
for an auction that will occur several weeks or months in the future, while
preserving for the benefit of the consignor the potential of the auction
process. The general purpose secured loans allow the Company to establish or
enhance a mutually beneficial relationship with dealers and collectors. These
loans generally have a maturity of one year. The majority of the Company's loans
are variable interest rate loans. At December 31, 1995, $101.5 million of the
total $144.2 million loan portfolio was due within one year.
The Company regularly reviews its loan portfolio. Each loan is analyzed
based on the current estimated realizable value of collateral securing the loan.
For financial statement purposes, the Company establishes reserves for certain
loans that the Company believes are under-collateralized and with respect to
which the under-collateralized amount may not be collectible from the borrower.
See Note D to the Consolidated Financial Statements in the Annual Report.
The Company funds its financing activities through internally generated
funds, through the issuance of U.S. commercial paper and through its bank credit
lines. See "Management's Discussion and Analysis of Results of Operations and
Financial Condition--Liquidity and Capital Resources" and Note H to the
Consolidated Financial Statements in the Annual Report.
A considerable number of traditional lending sources offer conventional
loans at a lower cost to borrowers than those offered by the Company. However,
the Company believes that only Christies and a few other lenders are as willing
to accept works of art as sole collateral. The Company believes that its
financing alternatives are attractive to clients who wish to obtain liquidity
from their art assets.
LUXURY REAL ESTATE ACTIVITIES
Sotheby's International Realty, Inc. ("SIR") was founded in 1976 as an
outgrowth of Sotheby's auction activities and in response to the requests of
major clients to market estates and other real property that required exposure
beyond a local market. SIR responds to the needs of its clients by (a) acting as
an exclusive marketing agent providing services to 175 licensed real estate
brokerage offices worldwide and (b) operating its own real estate brokerage
offices in Manhattan, Southampton, East Hampton, Palm Beach and Beverly Hills.
Competition
SIR's primary competitors are small, local real estate brokerage firms that
deal exclusively with luxury real estate and the "distinctive property"
divisions of large regional and national real estate firms. Competition in the
luxury real estate business takes many forms, including competition in price,
marketing expertise and the provision of personalized service to sellers and
buyers.
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Regulation
The real estate brokerage business is subject to regulation in most
jurisdictions in which SIR operates. Typically, individual real estate brokers
and brokerage firms are subject to licensing requirements. SIR is registered to
conduct business in 31 states and maintains real estate brokerage licenses in 12
states. In other jurisdictions, SIR acts as an exclusive marketing agent
providing services to licensed real estate brokers.
PERSONNEL
At December 31, 1995, the Company had 1,577 employees: 657 located in North
America; 654 in the United Kingdom and 266 in the rest of the world. The
following table provides a breakdown of employees by operational areas as of
December 31, 1995:
OPERATIONAL AREA NUMBER OF EMPLOYEES
- ------------------------------------------------------- -------------------
Auction................................................ 1,423
Other.................................................. 154
-----
Total............................................ 1,577
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The Company regards its relations with its employees as good.
ITEM 2. PROPERTIES
Sotheby's, Inc. is headquartered at 1334 York Avenue, New York, New York
(the "York Property"). The Company also leases office and warehouse space in
four other locations in the New York City area, and leases office and exhibition
space in several other major cities throughout the United States, including Los
Angeles, San Francisco, Chicago and Palm Beach.
The Company currently leases the York Property, comprising approximately
160,500 square feet, from an unaffiliated party under a 30-year lease expiring
in 2009, which contains an option to extend the term for an additional 30 years
until July 31, 2039. The lease also grants the Company a right of first refusal
with respect to the sale of the York Property.
York Avenue Development, Inc. ("York"), a wholly-owned subsidiary of
Sotheby's, Inc., has the right to purchase the fee interest in the York Property
by exercising certain options available through January 31, 1999 and during the
months of August 1999, August 2004 and July 2009.
The Company considers various alternatives for the realization of the value
of the right to purchase the fee interest in the York Property. Additionally,
the Company is studying how best to satisfy its demand for additional office and
auction space.
Under an agreement (as amended, the "Financing and Guarantee Agreement")
among Sotheby's, Inc., York and Taubman York Avenue Associates, Inc.
("Associates"), Associates has agreed that it will assist York in developing and
financing a new, mixed-use tower (the "New Tower") over the existing four-story
building on the York Property, should a decision be made to proceed with such
development. Sotheby's, Inc. has structured the transaction to isolate the
financial exposure of the Company with respect to development of the New Tower
in one subsidiary, namely, York. Associates assigned all of its assets and
liabilities to York Avenue Advisors, Inc. ("Advisors"), pursuant to an
Assignment and Assumption of Financing and Guarantee Agreement, dated as of June
1, 1995, and a Bill of Sale and Assignment and Assumption Agreement (regarding
Contracts, General Intangibles, Receivables, and other Assets and Liabilities),
dated as of June 1, 1995. The grantor trust of A. Alfred Taubman, the Company's
Chairman and largest shareholder, is the sole shareholder of Advisors and was
the sole shareholder of Associates. See Note J to the Consolidated Financial
Statements in the Annual Report.
Sotheby's, Inc. also assigned to York its rights and obligations under a
project services agreement dated November 8, 1985 (the "Project Services
Agreement") between Sotheby's, Inc. and The
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Taubman Company ("TTC"), which is an affiliate of A. Alfred Taubman. Under the
Project Services Agreement, TTC agreed to develop the New Tower on behalf of
Sotheby's, Inc. and to provide consultation and advice to Sotheby's, Inc. in
connection with the development of the New Tower, should a decision be made to
proceed with the development.
In connection with the development of the York Property, York had incurred
certain pre-development costs which had been financed in part by a demand note
payable to Associates. During the first quarter of 1995, York fully repaid this
demand note to Associates. See Note H to the Consolidated Financial Statements
in the Annual Report.
SIR leases approximately 10,900 square feet of office space at 980 Madison
Avenue, New York, New York, from unaffiliated parties under leases expiring in
2001. SIR also leases satellite office space at a number of locations, totalling
another 14,700 square feet.
The Company's U.K. operations are centered at New Bond Street, London, where
the main salesrooms and administrative offices of Sotheby's (U.K.) are located.
Additional salesrooms are located in close proximity to the New Bond Street
location. The total net usable floor area amounts to approximately 124,000
square feet. The Company owns or holds long-term leasehold interests in
approximately 75% of these properties by area, the balance being held on leases
with remaining terms of less than 20 years. In addition, warehouse space is
leased at King's House in West London. The Company also owns a salesroom in
Sussex where it conducts auctions.
The Company also leases office space in various locations throughout
continental Europe, including Amsterdam, Frankfurt, Geneva, Madrid, Milan,
Munich, Paris and Zurich; and in Asia, including Hong Kong, Seoul, Singapore,
Taipei and Tokyo; and in South America.
In management's opinion, the Company's worldwide premises are generally
adequate for the current conduct of its business. However, the Company
evaluates, on an ongoing basis, the adequacy of its premises for the
requirements of the present and future conduct of its business, with particular
focus on its major auction locations. The Company has explored different options
for new auction facilities in New York City, but there is no assurance that a
change will be made. If there is a change, the Company would use capital
resources, and the Company believes that it has adequate capital resources
available from operations, commercial paper and existing credit facilities.
ITEM 3. LEGAL PROCEEDINGS
The Company becomes involved from time to time in various claims and
lawsuits incidental to the ordinary course of its business. The Company does not
believe that the outcome of any such pending claims or proceedings will have a
material effect upon its business or financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the Company's shareholders during the
fourth quarter of 1995.
6
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
SHAREHOLDER MATTERS
Market Information
The principal U.S. market for the Company's Class A Common Stock is the New
York Stock Exchange (symbol: BID). The Class A Common Stock is also traded on
the London Stock Exchange.
The Company also has a Class B Common Stock, convertible on a share for
share basis into Class A Common Stock. There is no public market for the Class B
Common Stock. Per share cash dividends are equal for the Class A and Class B
Common Stock.
The quarterly price ranges on the New York Stock Exchange of the Class A
Common Stock and dividends per share for 1995 and 1994 are shown in the
following schedules:
1995
------------- CASH DIVIDEND
QUARTER ENDED HIGH LOW DECLARED
- ------------------------------------------------ ------------ ------------ -------------
March 31........................................ 12 5/8 10 3/8 $0.06
June 30......................................... 14 1/4 12 $0.06
September 30.................................... 14 3/4 12 1/2 $0.06
December 31..................................... 15 3/8 13 1/8 $0.06
1994
------------- CASH DIVIDEND
QUARTER ENDED HIGH LOW DECLARED
- ------------------------------------------------ ------------ ------------ -------------
March 31........................................ 19 1/2 15 3/8 $0.06
June 30......................................... 18 3/8 11 7/8 $0.06
September 30.................................... 13 1/4 12 $0.06
December 31..................................... 13 10 3/4 $0.06
The number of holders of record of the Class A Common Stock as of March 11,
1996 was 1,337. The number of holders of record of the Class B Common Stock as
of March 11, 1996 was 33.
ITEM 6. SELECTED FINANCIAL DATA
Selected Financial Data on page 19 of the Annual Report are incorporated
herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
Management's Discussion and Analysis of Results of Operations and Financial
Condition on pages 20 through 24 of the Annual Report is incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements on pages 25 through 38 of the Annual
Report are incorporated herein by reference.
The Independent Auditors' Report on page 39 of the Annual Report is
incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
7
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
All directors of the Company are elected to hold office until the next
annual meeting of shareholders and until their successors are elected and
qualified. Officers of the Company are appointed by the Board of Directors and
serve at the discretion of the Board. As of March 11, 1996, the directors and
executive officers of the Company (including certain officers of certain
principal subsidiaries and divisions) are as follows:
NAME AGE PRESENT TITLE
---- --- -------------
A. Alfred Taubman......................... 71 Chairman
Max M. Fisher............................. 87 Vice Chairman
Lord Camoys............................... 55 Deputy Chairman
Diana D. Brooks........................... 45 President and Chief Executive Officer;
Director
Viscount Blakenham........................ 58 Director
Walter J. P. Curley....................... 73 Director
The Rt. Hon. The Earl of Gowrie........... 56 Director
The Marquess of Hartington................ 51 Director
George Bailey............................. 42 Managing Director, Sotheby's Europe
Kevin A. Bousquette....................... 38 Senior Vice President and Chief Financial
Officer
Simon de Pury............................. 44 Chairman, Sotheby's Europe; Director
William F. Ruprecht....................... 40 Managing Director, Sotheby's North and
South America
R. Julian de la M. Thompson............... 54 Chairman, Sotheby's Asia; Director
Henry Wyndham............................. 42 Chairman, Sotheby's (U.K.)
Mitchell Zuckerman........................ 49 President, Sotheby's Financial Services,
Inc.
Mr. Taubman is a private investor. Since 1983, Mr. Taubman has been the
largest shareholder and Chairman of the Company. He is Chairman of Taubman
Centers, Inc., a company engaged in the regional retail shopping center
business. Mr. Taubman serves as a member of the Board of Directors of Live
Entertainment of Canada, Inc., a producer of theatrical productions. He also
serves as a Director of Hollinger International Inc., a publisher of English
language newspapers. He was the principal indirect owner of Woodward & Lothrop
Incorporated and John Wanamaker Philadelphia and, until January 1996, was a
Director of Woodward & Lothrop Incorporated and Woodward & Lothrop Holdings,
Inc., both of which filed for bankruptcy protection under Chapter 11 of the
United States Bankruptcy Code in January 1994. The plan of reorganization of
both companies was confirmed by the bankruptcy court in December 1995.
Mr. Fisher is a private investor and has been Vice Chairman of the Company
since 1986 and a director of the Company since 1983. Mr. Fisher is a director of
Comerica, Inc., a bank holding company.
Lord Camoys became a director of the Company in October 1993 and assumed the
role of Deputy Chairman of the Company effective April 1, 1994. Since 1989, he
has been Deputy Chairman of Barclays de Zoete Wedd Holdings Limited, the
international investment banking arm of Barclays Group. Lord Camoys is a
director of 3i Group plc, an investment group, and Perpetual Group plc and is
Deputy Chairman of National Provident Institution.
Ms. Brooks has been President and Chief Executive Officer of the Company
since April 1994. From March 1993 until April 1994, Ms. Brooks served as
President and Chief Executive Officer of Sotheby's, the Company's worldwide
auction business. Since prior to 1990, Ms. Brooks has served the Company in
various senior executive positions. Ms. Brooks has been a director of the
Company since 1992.
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Lord Blakenham became a director of the Company in 1987. Since 1961, he has
served in various executive positions with Pearson plc, a British media company
that serves worldwide information, education and entertainment markets and which
has a substantial interest in the three Lazard investment banking firms. He has
been Executive Chairman of Pearson plc since 1983. Lord Blakenham is a Managing
Director of Lazard Brothers & Co., Limited, an investment banking firm, and the
non-executive Chairman of MEPC, plc, a commercial real estate investment and
development company.
Mr. Curley has been a director of the Company since April 1993. From 1989 to
March 1993, Mr. Curley served as U.S. Ambassador to France. Mr. Curley is a
director of American Exploration Company, an oil and gas exploration and
development company, and The France Growth Fund, a closed end investment
company. He is also a member of the International Advisory Committee of
Compagnie Financiere de Paribas, an international bank, Chairman of the French
American Foundation, President of the Curley Land Company, a family real estate
company, and a Trustee of the Frick Collection.
Lord Gowrie has been a director of the Company since 1985 and served as
chairman of Sotheby's International from 1985 through 1987. From 1987 through
1993, Lord Gowrie served as chairman of Sotheby's Europe, which then encompassed
the United Kingdom, Europe, Asia and Australia. Lord Gowrie was appointed
Chairman of the Arts Council, effective April 1994, serves as a director of the
Ladbroke Group PLC, an entertainment and leisure company, and is a director of
Guiness Mahon Holdings, PLC, a merchant bank.
The Marquess of Hartington became a director of the Company in September
1994. He serves as a director of a number of private companies, including the
management of Chatsworth and estates in Derbyshire, Yorkshire and Sussex.
Between 1989 and July 1994, he was Senior Steward (Chairman) of the Jockey Club.
In June 1993, he was appointed Chairman of the British Horseracing Board.
Mr. Bailey was appointed Managing Director of Sotheby's Europe in January
1994. From 1992 through 1993, he served as director of business development,
Sotheby's Europe. From 1987 to 1992, Mr. Bailey was the director of operations,
Sotheby's (U.K.).
Mr. Bousquette has been Senior Vice President and Chief Financial Officer of
the Company since March 1993. From 1985 to 1992, Mr. Bousquette was an executive
at Kohlberg Kravis Roberts & Co., L.P., a merchant banking firm, and a limited
partner of KKR Associates, L.P.
Mr. de Pury was appointed Chairman of Sotheby's Europe in January 1994. He
served as Deputy Chairman of Sotheby's Europe from 1992 through 1993. From 1988
to 1991, he served as Deputy Chairman of Sotheby's (U.K.), directly responsible
for European development. Mr. de Pury joined the Company in 1975. From 1975 to
1979, he performed several functions within the Company, among them opening the
Geneva office. He rejoined the Company in 1986 as Managing Director, Sotheby's
International, Inc., responsible for all continental European offices. He has
been a director of the Company since 1995.
Mr. Ruprecht was appointed Executive Vice President and Managing Director of
Sotheby's, Inc. in February 1994. From 1992 to February 1995, Mr. Ruprecht
served as Director of Marketing for the Company worldwide and also oversaw a
number of specialist departments. From 1986 to 1992, he served as Director of
Marketing for Sotheby's, Inc.
Mr. Thompson has been a director of the Company since 1983 and Chairman of
Sotheby's Asia since 1992. From 1988 to 1991 he was Deputy Chairman of Sotheby's
(U.K.), directly responsible for development in Asia.
Mr. Wyndham became Chairman of Sotheby's (U.K.) in February 1994. Since
1988, he was a partner of the St. James Art Group, an art dealing business.
Mr. Zuckerman has been President of Sotheby's Financial Services, Inc. since
1988.
Based on the Company's review of the filings made by the Company's directors
and officers under Section 16 of the Securities and Exchange Act of 1934, all
transactions in and beneficial ownership of the Company's equity securities were
reported in a timely manner, except that Patricia Carberry was
9
S1
approximately three weeks late in filing a Form 3 to disclose her becoming the
Controller and Chief Accounting Officer of the Company.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth all compensation paid to the Chief Executive
Officer and each of the four most highly compensated executive officers
(collectively, the "Named Executive Officers") of the Company during 1995 for
each of the last three years.
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------------- ------------
SHARES
UNDERLYING
NAME AND PRINCIPAL OTHER ANNUAL OPTIONS ALL OTHER
POSITION YEAR SALARY BONUS(5) COMPENSATION (#) COMPENSATION(14)
- ----------------------- ---- -------- -------- ------------ ----------- ----------------
Diana D. Brooks........ 1995 $500,000 $351,050(6) $ 7,920(11) 200,000 $ 37,299
President and Chief 1994 500,000 276,000(6) 7,200(11) 250,000 35,150
Executive Officer 1993 400,000 233,000(6) 8,640(11) 250,000 34,250
Simon de Pury (1)...... 1995 $418,883 $179,025 $ 21,739(12) 20,000 $ 53,895
Chairman, Sotheby's 1994 322,142 160,000(7) 10,597(11) 66,000 47,480
Europe 1993 243,180 190,000(7) 0 100,000 30,469
1995 $343,000 $177,000 $ 0 20,000 $ 24,397
Kevin A. Bousquette(2) 1994 330,000 104,000 6,000(11) 0 20,450
Senior Vice President 1993 239,808 70,000 0 150,000 7,500
and Chief Financial
Officer
Henry Wyndham(3)....... 1995 $206,716 $222,900(9) $ 74,400(13) 40,000 $ 4,939
Chairman, Sotheby's 1994 183,960 137,390(9) 46,400(13) 75,000 4,404
(U.K.) 1993 0 150,000(10) 0 0 0
William F. 1995 $260,000 $177,000 $ 0 17,500 $ 19,977
Ruprecht(4).......... 1994 225,000 157,500(8) 0 8,000 17,656
Managing Director, 1993 200,000 165,000(8) 0 0 17,455
Sotheby's North and
South America
- ------------
(1) Mr. de Pury served as Deputy Chairman of Sotheby's Europe in 1993. He
assumed the position of Chairman of Sotheby's Europe on January 1, 1994.
(2) Mr. Bousquette joined the Company in March 1993.
(3) Mr. Wyndham joined the Company as Chairman, Sotheby's (U.K.), effective
January 1994.
(4) Mr. Ruprecht was appointed Executive Vice President and Managing Director
of Sotheby's North and South America in February 1994.
(5) 1995 bonus amounts include cash paid in 1996 in respect of 1995
performance.
(6) The 1995 bonus amount includes a deferred bonus of $21,050 paid for
services rendered in connection with the acquisition of Pierre Matisse
Gallery Corporation ("Matisse") and the management of AMA. The 1994 bonus
amount includes a payment of $30,000, representing the balance of a special
bonus awarded to senior officers to reflect the fact that salaries had been
frozen since January 1990 and a deferred bonus of $46,000 paid for services
rendered in connection with the acquisition of Matisse and the management
of AMA. The 1993 bonus amount includes a payment of $60,000 representing
part of such special bonus and a deferred bonus of $23,000 paid for
services rendered in connection with the acquisition of Matisse and the
management of AMA.
(Footnotes continued on following page)
10
(Footnotes continued from preceding page)
(7) The 1994 bonus amount includes a payment of $60,000, representing the
balance of a special bonus awarded to senior officers to reflect the fact
that salaries had been frozen since January 1990. The 1993 bonus amount
also includes a payment of $60,000, representing part of such special bonus
awarded.
(8) The 1994 bonus amount includes a payment of $37,500, representing the
balance of a special bonus awarded to senior officers to reflect the fact
that salaries had been frozen since January 1990. The 1993 bonus amount
also includes a payment of $75,000, representing part of such special bonus
awarded.
(9) The 1994 and 1995 bonus amounts include a supplemental payment of $45,990
to be paid each of the first three years of Mr. Wyndham's employment, in
accordance with the terms of his employment agreement.
(10) The 1993 bonus amount is a one-time signing bonus per Mr. Wyndham's
employment agreement.
(11) Car allowance.
(12) Car Leasing and Maintenance Fees.
(13) Housing and Travel allowance.
(14) The amounts disclosed in this column for 1995 include:
(a) Company contributions of the following amounts under the Retirement
Savings Plan: $7,500 on behalf of Ms. Brooks, $7,357 on behalf of Mr.
Bousquette and $7,443 on behalf of Mr. Ruprecht.
(b) Company contributions of the following amounts under benefit
equalization agreements: $29,799 on behalf of Ms. Brooks, $17,040 on
behalf of Mr. Bousquette and $12,534 on behalf of Mr. Ruprecht.
(c) a Company contribution under the Switzerland plans of $53,895 on behalf
of Mr. de Pury.
(d) a Company contribution under the U.K. pension plan of $4,939 on behalf
of Mr. Wyndham.
The following table sets forth information regarding option grants under the
Company's 1987 Stock Option Plan, including its U.K. Sub-plan ("the Plan") to
the Named Executive Officers in 1995:
OPTION GRANTS IN 1995
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
RATES OF STOCK PRICE
APPRECIATION FOR OPTION
INDIVIDUAL GRANTS TERM(4)
--------------------------------------------------- -----------------------
NUMBER OF PERCENT OF
SHARES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION
GRANTED 1995 SHARE(3) DATE 5% 10%
---------- ------------- --------- ---------- ---------- ----------
Diana D. Brooks.............. 200,000(1) 16.4% $ 10.875 2/8/05 $3,542,846 $5,641,390
Simon de Pury................ 20,000(1) 1.6% $ 10.875 2/8/05 $ 354,285 $ 564,139
Kevin A. Bousquette.......... 20,000(1) 1.6% $ 10.875 2/8/05 $ 354,285 $ 564,139
Henry Wyndham................ 40,000(2) 3.3% $ 10.875 2/8/05 $ 708,569 $1,128,278
William F. Ruprecht.......... 17,500(1) 1.4% $ 10.875 2/8/05 $ 309,999 $ 493,622
- ------------
(1) These options will vest and become exercisable to the extent of one-fifth of
the number of shares subject to the option on each of the first, second,
third, fourth and fifth anniversary of the date of grant.
(2) These options will vest and become exercisable to the extent of three-fifths
of the number of shares subject to the option on the third anniversary of
the date of grant and to the extent of an additional
(Footnotes continued on following page)
11
(Footnotes continued from preceding page)
one-fifth of the number of the shares subject to the option on each of the
fourth and fifth anniversaries of the date of grant.
(3) The exercise price of each option is the fair market value of the underlying
shares as of the date of grant. Only options to purchase shares of Class B
Common Stock may be granted under the Plan. Because Class B Common Stock is
convertible into Class A Common Stock and there is no public market for the
Class B Common Stock, the fair market value of an option is the NYSE closing
price per share of the Class A Common Stock on the last business day before
the option grant.
(4) The actual value, if any, that may be realized by each individual will
depend on the closing price of the Class A Common Stock on the NYSE on the
day preceding the exercise date. The option term for these option grants is
ten years. The appreciation rates used in the table are provided to comply
with Item 402(c) of Regulation S-K and do not necessarily reflect the views
of management as to the potential realizable value of options.
The following table provides information on option exercises in 1995 by the
Named Executive Officers and year-end option values for unexercised options held
by the Named Executive Officers:
AGGREGATED OPTION EXERCISES IN 1995 AND YEAR-END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL YEAR-END IN-THE-MONEY OPTIONS AT
SHARES FISCAL YEAR END
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------------- ----------- -------- ----------- ------------- ----------- -------------
Diana D. Brooks.................. 0 $0 228,000 550,000 $ 230,250 $ 871,875
Simon de Pury.................... 0 $0 77,867 142,133 $ 80,917 $ 129,333
Kevin A. Bousquette.............. 0 $0 60,000 110,000 $ 105,000 $ 225,000
Henry Wyndham.................... 0 $0 0 115,000 $ 0 $ 135,000
William F. Ruprecht.............. 0 $0 59,600 51,900 $ 162,250 $ 139,563
See Note K to the Consolidated Financial Statements in the Annual Report for
additional information about the Plan.
Retirement Savings Plan
The Company has a Retirement Savings Plan (the "Retirement Savings Plan")
for employees of the Company and its subsidiaries in the United States.
Employees are eligible to participate in the Retirement Savings Plan as of the
first day of the month following completion of a 90-day waiting period
commencing on the date of employment. Company contributions to the Retirement
Savings Plan made on behalf of the Named Executive Officers have been included
in the Summary Compensation Table.
U.K. Pension Plan
Sotheby's (U.K.) maintains a funded defined benefit pension plan for its
employees who are U.K. residents.
PENSION TABLE
YEARS OF SERVICE
REMUNERATION --------------------------------------------------
(B.P.) 15 20 25 30 35
- ------------ ------ ------ ------ ------ ------
40,000 10,000 13,333 16,667 20,000 23,333
60,000 15,000 20,000 25,000 30,000 35,000
80,000 19,650 26,200 32,750 39,300 45,850
12
Henry Wyndham is the only Named Executive Officer who participates in the
plan and has two credited years of service with the Company.
Pension benefits under the plan for employees contributing 4% of salary are
1/60th of the employee's final pensionable salary for every year of service up
to a maximum of 40 years. For participants contributing 2% of salary, the
benefits accrue at half of the rate indicated above. Benefits are paid monthly
commencing at retirement, which is at age 60, although the Company may elect to
continue employment of the individual after that date, and if the Company
agrees, the employee may elect to make further contributions until the age of
65. The compensation covered by the plan is the employee's pensionable earnings
(subject to the limitation described below), which includes "Salary", but
excludes "Bonus" and "Other Annual Compensation" disclosed in the Summary
Compensation Table.
The plan also provides for a death benefit in the amount of four times the
employee's base salary at the time of death plus the refund of the employee's
contributions to the plan and provides for a pension to be paid to the
employee's spouse of 33 1/3%, or proportionately less if the employee has
elected to contribute at the reduced rate, of the employee's base salary at the
date of death.
The above table sets forth the estimated annual benefits (in pounds
sterling) payable upon retirement under the plan assuming the employee
contributes at 4% of base salary. Current Inland Revenue regulations limit the
pensionable salary with respect to which pension benefits may be based to a
maximum of B.P.78,600.
Switzerland Plan
In accordance with the requirements of Swiss law, Sotheby's AG, the
Company's Swiss operating subsidiary, established in 1985 a fully insured
pension plan (the "First Swiss Plan") for its full-time employees whose salaries
exceed 23,280 Swiss francs ("SF"), up to a fixed ceiling of SF 116, 400. There
are two elements of the First Swiss Plan: a savings element (the "Savings
Plan"), and a risk element (the "Risk Plan"). Employees are eligible to join the
Savings Plan as of the January 1 following attainment of age 24 and the Risk
Plan as of the January 1 following attainment of age 17.
Under the Savings Plan, an individual retirement account is established for
each participating employee. Each year, the account is credited with a
percentage of the employee's adjusted salary, which is the employee's annual
salary excluding bonuses and other allowances reduced by SF 23,280. Longer
serving employees were made eligible for additional Company contributions in
respect of service with the Company prior to 1985. The percentage of adjusted
salary credited to the account ranges from 7% to 30%, depending on the
employee's age, sex and past service. The Company pays 70% of this total
contribution, with the remainder paid by employees. The account is also credited
with interest at a rate fixed by the Swiss government's executive branch.
At retirement age, which is age 65 for men and age 62 for women, the
employees' account is convertible, at the employee's election, to a life
annuity, with provisions for contingent widow's pension of 60% of the retiree's
benefit and immediate pensions of 20% of the retiree's benefit for certain
children of the retiree.
The Risk Plan provides disability and death benefits to employees, their
widows and certain of their children. Benefits are generally a percentage of the
amount credited to the employee's account, excluding interest. Benefits under
the Risk Plan are funded by insurance premiums, all of which are paid by the
Company.
Sotheby's A.G. has also established a second pension plan (the "Second Swiss
Plan") which is non-compulsory and only has a savings element. These benefits
are based on the amount by which an employee's total salary exceeds SF 116,400.
The Company pays approximately 74% of the total contribution, with the remainder
paid by employees.
Mr. de Pury is the only Named Executive Officer who participates in the
First Swiss Plan and the Second Swiss Plan. A total of SF 61,979 ($53,895)
contributed in 1995 by the Company on behalf of Mr. de Pury is included in the
Summary Compensation Table.
13
Bonuses
The Company's officers are eligible to receive incentive bonuses. Bonuses
are recommended by management and approved by the Audit and Compensation
Committee of the Board of Directors (the "Committee"). Actual awards are a
function of the Company's after-tax worldwide profit and the individual's
performance. Every supervisor conducts an employee review. As part of the
review, the supervisor and the employee will determine future objectives
against which the employee's performance will be measured. In addition, the
program allows the Committee the discretion to address exceptional performance
and unusual circumstances.
Benefit Equalization Agreements
The total annual contributions to the Company's Retirement Savings Plan are
subject to certain limitations under the Internal Revenue Code of 1986, as
amended, and the Employee Retirement Income Security Act of 1974, as amended,
for each participant. Officers (generally senior vice presidents and above) of
the Company and its U.S. subsidiaries who are affected by such limitations may
enter into agreements pursuant to which their salaries will be reduced, and the
Company will maintain accounts on their behalf, in the amount of the difference
between (i) the aggregate amount of contributions that would have been made to
the Retirement Savings Plan in the absence of the limitations, and (ii) the
aggregate amount of contributions actually made to the plan. Amounts deferred
are credited with the same earnings yield credited to contributions made to the
fixed income fund maintained under the Retirement Savings Plan. Benefits under
these unfunded agreements are paid to a participant one year following the
participant's termination of employment with the Company, unless the participant
elects to defer receipt of payment. Amounts deferred by the Named Executive
Officers of the Company pursuant to benefit equalization agreements in 1995 have
been included in the Summary Compensation Table.
COMPENSATION OF DIRECTORS
Each director of the Company who is not an executive officer of the Company
receives an annual retainer fee of $20,000, plus a fee of $1,000 for each Board
meeting attended by such director, and a fee of $500 for each committee meeting
($1,000 for the chairman of the committee) attended by such director, in
addition to reimbursement of expenses. Beginning in early 1996, each director
who is not an executive officer of the Company will receive additional annual
compensation of 750 shares of the Company's Class A Common Stock.
CERTAIN EMPLOYMENT ARRANGEMENTS
In October 1993, the Company entered into an agreement with Henry Wyndham
regarding his employment as Chairman of Sotheby's (U.K.), which began on
February 1, 1994. At that time, Mr. Wyndham received a bonus of B.P.100,000. Mr.
Wyndham's annual salary will be up to B.P.130,000 for the first three years, and
thereafter not less than B.P.130,000. In addition, for each of the first three
years, Mr. Wyndham will receive a non-pensionable salary supplement of
B.P.30,000 per year.
The Company has entered into an employment agreement with Lord Camoys,
pursuant to which he serves as the Company's Deputy Chairman. Under the
agreement, Lord Camoys received an initial grant under the 1987 Stock Option
Plan with respect to 50,000 shares. The rate of Lord Camoys's base salary under
the agreement during each of 1994 and 1995 was B.P.100,000, of which B.P.66,667
was paid for 1994, a proration resulting from Lord Camoys commencing employment
on April 1, 1995. Lord Camoys was not paid a bonus in 1994 or 1995. He also
receives an annual travel allowance of B.P.10,000. The agreement expires in
1998.
The Company had an employment agreement with Lord Gowrie, which expired at
the end of 1995. Under that agreement, Lord Gowrie was required to devote
one-third of his work time to providing consulting services to the Company. His
base annual salary and miscellaneous compensation was B.P.55,000. Lord Gowrie
was not paid a bonus in 1994 or 1995. Because Lord Gowrie was employed by the
Company upon expiration of the agreement, the Company is required under the
employment agreement to make a one-time additional contribution to his pension
fund of B.P.97,000. Effective as of January 1, 1996, the Company has entered
into a consulting agreement with Lord Gowrie pursuant to which his 1996 base
annual salary will be B.P.20,000.
14
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of March 11, 1996,
regarding the beneficial ownership of the Company's Class A and Class B Common
Stock by its directors, executive officers and 5% shareholders. The Company has
relied upon information supplied by its officers, directors and certain
shareholders and upon information contained in filings with the Securities and
Exchange Commission. Each share of Class B Common Stock is freely convertible
into one share of Class A Common Stock. Accordingly, under the applicable rules
of the Securities and Exchange Act of 1934, holders of Class B Common Stock are
deemed to own an equal number of shares of Class A Common Stock. For purposes of
the calculation of the percentage of each class that each Named Executive
Officer, director and 5% shareholder beneficially owns, the number of shares of
such class deemed to be outstanding is the sum of all outstanding shares of such
class, plus the number of shares that such beneficial owner has, or is deemed to
have, the right to acquire by the exercise of options and/or conversion.
CLASS A AND CLASS B COMMON STOCK OWNERSHIP OF DIRECTORS,
EXECUTIVE OFFICERS AND 5% SHAREHOLDERS
CLASS A COMMON STOCK CLASS B COMMON STOCK
------------------------ ------------------------
DIRECTORS, EXECUTIVE OFFICERS AND NUMBER OF PERCENT OF NUMBER OF PERCENT
5% SHAREHOLDERS SHARES CLASS SHARES OF CLASS
- ---------------------------------- ---------- ---------- ---------- ----------
A. Alfred Taubman................. 13,199,616(1) 25.4% 13,199,516(2) 76.4%
200 E. Long Lake Road
Bloomfield Hills, MI 48304
Max M. Fisher..................... 2,509,545(3) 6.1% 2,509,545(4) 14.5%
2700 Fisher Building
Detroit, MI 48202
Lord Camoys....................... 3,500 * *
c/o Sotheby's
34-35 New Bond Street
London W1 2AA England
Diana D. Brooks................... 431,500(5) 1.1% 431,500(6) 2.4%
c/o Sotheby's, Inc.
1334 York Avenue
New York, New York 10021
Viscount Blakenham................ 0 * 0 *
Pearson P.L.C.
Millbank Tower, Millbank
London SW1P 4QZ England
Kevin A. Bousquette............... 73,000(7) * 64,000(8) *
c/o Sotheby's, Inc.
1334 York Avenue
New York, New York 10021
Ambassador Walter J.P. Curley..... 1,000 * 0 *
450 Park Avenue
Suite 2104
New York, New York 10022
The Rt. Hon. The Earl of Gowrie... 28,000(9) * 28,000(10) *
c/o Sotheby's
34-35 New Bond Street
London W1 2AA England
The Marquess of Hartington........ 0 * 0 *
Beamsley Hall
Bolton Abbey, Skipton
North Yorkshire, BD23 6HD
England
15
CLASS A COMMON STOCK CLASS B COMMON STOCK
------------------------ ------------------------
DIRECTORS, EXECUTIVE OFFICERS AND NUMBER OF PERCENT OF NUMBER OF PERCENT
5% SHAREHOLDERS SHARES CLASS SHARES OF CLASS
- ---------------------------------- ---------- ---------- ---------- ----------
Simon de Pury..................... 119,734(11) * 119,734(12) *
c/o Sotheby's
13 Quai du Mont Blanc
CH-12-01 Geneva, Switzerland
William F. Ruprecht............... 68,700(13) * 68,700(14) *
c/o Sotheby's, Inc.
1334 York Avenue
New York, New York 10021
R. Julian de la M. Thompson....... 108,000(15) * 108,000(16) *
c/o Sotheby's
34-35 New Bond Street
London W1 2AA England
Henry Wyndham..................... 0 * 0 *
c/o Sotheby's
34-35 New Bond Street
London, W1 2AA England
FMR Corp.......................... 4,719,400(17) 12.2% 0 *
82 Devonshire Street
Boston, MA 02109
GeoCapital Corporation............ 2,517,724(18) 6.5% 0 *
767 Fifth Avenue
New York, New York 10153
Portfolio D Investors, LP and
Other Related Parties........... 2,983,600(19) 7.7% 0 *
201 Main Street, Suite 2600
Fort Worth, Texas 76102
NewSouth Capital Management,
Inc............................. 2,107,136(20) 5.4% 0 *
755 Crossover Lane, Suite 233
Memphis, TN 38117
Directors and Executive
Officers.......................... 16,698,580(21) 30.1% 16,649,892(21) 92.2%
as a Group......................
- ------------
* Represents less than 1%.
(1) Mr. Taubman owns, as trustee of his grantor trust, 100 shares of Class A
Common Stock. This figure also includes 9,730,886 shares of Class A Common
Stock that he has, or is deemed to have, the right to acquire by converting
shares of Class B Common Stock that Mr. Taubman owns as trustee of his
grantor trust and also includes 3,468,630 shares of Class A Common Stock
that he has the right to acquire by converting shares of Class B Common
Stock owned by Taubman Investments Limited Partnership, as to which he has
sole voting and dispositive control.
(2) This figure includes 9,730,886 shares of Class B Common Stock owned by Mr.
Taubman and 3,468,630 shares of Class B Common Stock owned by Taubman
Investments Limited Partnership, as to which Mr. Taubman has sole voting
and dispositive control. This figure excludes 792,830 shares owned by
Judith Taubman, his wife. Mr. Taubman disclaims beneficial ownership of all
shares of Class B Common Stock owned by Judith Taubman. Mr. Taubman and
Taubman Investments Limited Partnership have pledged all of their shares of
Class B Common Stock to a bank. If the bank were to foreclose on the
pledges, a change in control of the Company could take place under certain
circumstances. In the opinion of Mr. Taubman, the chances of a foreclosure
on the pledges are remote.
(3) This figure includes 1,840,921 shares of Class A Common Stock that Mr.
Fisher has, or is deemed to have, the right to acquire by converting shares
of Class B Common Stock. See footnote 4 below. Mr. Fisher disclaims
beneficial ownership of all shares of Class A Common Stock other than
(Footnotes continued on following page)
16
(Footnotes continued from preceding page)
1,830,161 shares relating to the shares of Class B Common Stock held by him
as trustee of his grantor trust. See footnote 4 below.
(4) This figure includes 10,760 shares of Class B Common Stock owned by various
family trusts of which Mr. Fisher is a co-trustee and 1,830,161 shares of
Class B Common Stock that Mr. Fisher holds as trustee of his grantor trust.
This figure also includes 668,624 shares owned by Martinique Hotel, Inc., a
corporation owned by Mr. Fisher's family. This figure also excludes 56,519
shares of Class B Common Stock owned by various family trusts of which Mr.
Fisher's wife is a co-trustee. Mr. Fisher disclaims beneficial ownership of
all shares other than those held by him as trustee of his grantor trust.
(5) This figure includes 88,500 shares of Class A Common Stock that Ms. Brooks
has the right to acquire by converting shares of Class B Common Stock and
343,000 shares of Class A Common Stock that she has the right to acquire by
exercising options for shares of Class B Common Stock and converting those
shares.
(6) Ms. Brooks owns 88,500 shares of Class B Common Stock. This figure also
includes 343,000 shares of Class B Common Stock that Ms. Brooks has the
right to acquire by exercising options.
(7) Mr. Bousquette owns 9,000 shares of Class A Common Stock. This figure also
includes 64,000 shares of Class A Common Stock that Mr. Bousquette has the
right to acquire by exercising options for shares of Class B Common Stock
and converting those shares.
(8) This figure includes 64,000 shares of Class B Common Stock that Mr.
Bousquette has the right to acquire by exercising options.
(9) This figure represents 28,000 shares of Class A Common Stock that Lord
Gowrie has the right to acquire by exercising options for shares of Class B
Common Stock and converting those shares.
(10) This figure represents 28,000 shares of Class B Common Stock that Lord
Gowrie has the right to acquire by exercising options.
(11) This figure represents 119,734 shares of Class A Common Stock that Mr. de
Pury has the right to acquire by exercising options for shares of Class B
Common Stock and converting those shares.
(12) This figure represents 119,734 shares of Class B Common Stock that Mr. de
Pury has the right to acquire by exercising options.
(13) This figure represents 68,700 shares of Class A Common Stock that Mr.
Ruprecht has the right to acquire by exercising options for shares of Class
B Common Stock and converting those shares.
(14) This figure includes 68,700 shares of Class B Common Stock that Mr.
Ruprecht has the right to acquire by exercising options.
(15) Mr. Thompson owns 75,000 shares of Class B Common Stock. This figure
includes 75,000 shares of Class A Common Stock that Mr. Thompson has the
right to acquire by converting shares of Class B Common Stock and also
includes 33,000 shares of Class A Common Stock that he has the right to
acquire by exercising options for shares of Class B Common Stock and
converting those shares.
(16) This figure includes 33,000 shares of Class B Common Stock that Mr.
Thompson has the right to acquire by exercising options.
(17) This information is based on a Schedule 13G, dated February 14, 1996, filed
with the Securities and Exchange Commission.
(18) This figure includes shares held in third parties' accounts over which
GeoCapital Corporation has investment discretion. This information is based
on a Form 13F, dated January 23, 1996, filed with the Securities and
Exchange Commission.
(19) This figure consists of the total number of shares of Class A Common Stock
owned by the following persons or entities: Trinity I Fund, L.P., TF
Investors, L.P., Thomas M. Taylor, Portfolio D Investors, L.P., Portfolio
Associates, Inc., Portfolio Partners, L.P., The Bass Management Trust, Sid
R. Bass, Lee M. Bass, and E.P. Bass. The foregoing information (including
the tabular data) is based on a Schedule 13D, dated January 26, 1996, filed
with the Securities and
(Footnotes continued on following page)
17
(Footnotes continued from preceding page)
Exchange Commission. The listed persons and entities making the Schedule
13D filing have stated that neither the fact of this filing nor anything
contained therein shall be deemed to be an admission by the reporting
persons that a "group" exists within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934.
(20) This figure includes shares held in third parties' accounts over which
NewSouth Capital Management, Inc. has investment discretion. This
information is based on a Schedule 13G, dated February 13, 1996, filed by
NewSouth Capital Management, Inc. with the Securities and Exchange
Commission.
(21) See above notes.
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Loan Programs
The Company maintains two U.S. bank loan programs which are available to
certain employees at the discretion of the Chief Executive Officer. The first
program allows U.S. employees to borrow from a bank on a demand note basis and
pay an interest rate equal to the prime rate. Under the second program, prior to
December 1995, the Company would directly lend money to certain employees for a
term of 15 years to purchase or refinance a residence at an interest rate of the
prime rate minus 1.0% to 2.0%. For loans under this program exceeding $400,000,
the approval of the Audit and Compensation Committee of the Board of Directors
is required. In December 1995, this program was refinanced and replaced by a
bank loan program providing comparable loan terms and interest rates to the
prior Company direct loan program. All payment obligations under both U.S. bank
loan programs are guaranteed by the Company, and all loans under both programs
are repayable when an employee leaves the Company. At March 11, 1996, Mitchell
Zuckerman, an executive officer, had guaranteed borrowings outstanding under the
first program of $12,499, and $179,999 of borrowings under the second program.
At March 11, 1996, William Ruprecht, another executive officer, had borrowings
outstanding under the second program of $833,472. In addition, in the United
Kingdom, the Company has guaranteed a portion of a bank mortgage loan to Henry
Wyndham, an executive officer. The amount of the Company's guarantee is
$276,500.
In October 1993, Sotheby's (U.K.), a subsidiary of the Company, entered into
an agreement with Henry Wyndham Fine Art Ltd. ("Fine Art"), an art dealing
business in which Henry Wyndham, who has since become Chairman of Sotheby's
(U.K.), has a substantial equity interest. Under the agreement, Sotheby's (U.K.)
agreed to purchase from Fine Art various paintings outright, as well as Fine
Art's partial interest in another painting. Under the terms of the agreement,
Sotheby's (U.K.) paid Fine Art B.P.150,000 ($225,450) as an advance for a
portion of its interest in such painting in February 1994. On February 1, 1995,
the advance began to bear interest and will continue to do so until Fine Art
exercises its right to sell its remaining interest in such painting to Sotheby's
(U.K.) for B.P.180,000 ($281,170). The original cost to Fine Art of its
ownership-interest in such painting was approximately B.P.300,000 ($450,900).
However, the fair market value of such interest is deemed by the Company to be
in excess of the purchase price. The various purchase prices were determined by
the Company with reference to recent sale prices of comparable property.
In addition to the above-described transactions, the Company has entered
into agreements with its largest shareholder and certain of his affiliates
regarding the proposed development of the York Property. See "Properties" and
Notes H and J to the Consolidated Financial Statements in the Annual Report. See
also Notes D, M and N to the Consolidated Financial Statements for additional
related party disclosures.
18
PART IV
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES
AND REPORTS ON FORM 8-K.
14(a)(1) The following consolidated financial statements of Sotheby's Holdings,
Inc. and subsidiaries, included in the annual report of the registrant
to its shareholders for the year ended December 31, 1995, are
incorporated by reference in Item 8:
Consolidated Statements of Income--Years ended December 31, 1995, 1994
and 1993
Consolidated Balance Sheets--December 31, 1995 and 1994
Consolidated Statements of Cash Flows--Years ended December 31, 1995,
1994 and 1993
Consolidated Statement of Changes in Shareholders' Equity--Years ended
December 31, 1995, 1994 and 1993
Notes to Consolidated Financial Statements--December 31, 1995
14(a)(2) The following is a list of the consolidated financial statement
schedules of Sotheby's Holdings, Inc. and subsidiaries and the
Independent Auditors' Report required by Item 14(d):
Independent Auditors' Report on Financial Statement Schedule
Schedule II--Valuation and Qualifying Accounts
14(a)(3)
3(a) Amended and Restated Articles of Incorporation of Sotheby's Holdings,
Inc., as amended, incorporated herein by reference to Exhibit 4(b) to
Registration Statement No. 33-26008.
3(b) Restated By-Laws of Sotheby's Holdings, Inc., as amended, incorporated
herein by reference to Exhibit 3(b) to the Company's Annual Report on
Form 10-K for the year ended December 31, 1988, SEC File No. 1-9750,
on file at the Washington D.C. office of the Securities and Exchange
Commission (the "1988 Form 10-K").
4 See Exhibits 3(a) and 3(b).
10(a) Issuing and Paying Agency Agreement, dated February 15, 1989, between
Sotheby's Inc. and the Chase Manhattan Bank, N.A. relating to the
issuance of short-term notes ("U.S. Notes") in the U.S. Commercial
Paper market, incorporated herein by reference to Exhibit 10(g) to
the 1988 Form 10-K, SEC File No. 1-9750, on file at the Washington,
D.C. office of the Securities and Exchange Commission.
10(b) U.S. Commercial Paper Dealer Agreement, dated February 15, 1989,
between Sotheby's, Inc. and Chase Securities, Inc. relating to the
issuance of the U.S. Notes, incorporated herein by reference to
Exhibit 10(h) to the 1988 Form 10-K, SEC File No. 1-9750, on file
at the Washington, D.C. office of the Securities and Exchange
Commission.
10(c) U.S. Commercial Paper Dealer Agreement, dated February 15, 1989,
between Sotheby's, Inc. and Merrill Lynch Money Markets, Inc. relating
to the issuance of the U.S. Notes, incorporated herein by reference to
the Exhibit 10(i) of the 1988 Form 10-K, SEC File No. 1-9750, on file at
the Washington, D.C. office of the Securities and Exchange Commission.
10(d) Lease, dated as of July 25, 1979, among The Benenson Capital Company,
Lawrence A. Benenson, Raymond E. Benenson (collectively, "Benenson")
to Sotheby Parke Bernet Inc., and amendments thereto, all relating to
1334 York Avenue, New York, New York (the "York Avenue Property"),
incorporated herein by reference to Exhibit 10(g) to Registration
Statement No. 33-17667.
10(e) Option Agreement with Form of Exchange Agreement, dated July 25, 1979,
among Benenson and 089 Nosidam Corp. (as nominee of Sotheby Parke
Bernet Inc.) assignments thereof and amendments thereto, all relating
to the York Avenue Property, incorporated herein by reference to
Exhibit 10(h) to Registration Statement No. 33-17667.
10(f) Exchange Agreement, dated October 27, 1986, among Benenson and York
Avenue Development, Inc., and Letter, dated October 27, 1986, from
Benenson to Sotheby's, Inc. and York Avenue Development, Inc.,
concerning zoning matters and security relating to the York Avenue
Property, incorporated herein by reference to Exhibit 10(i) to
Registration Statement No. 33-17667.
10(g) Guarantee, made November 6, 1986, by A. Alfred Taubman in favor of
Benenson relating to the York Avenue Property (the "Taubman
Guarantee"), incorporated herein by reference to Exhibit 10(j)
to Registration Statement No. 33-17667.
19
10(h) Letter from Sotheby's, Inc. and York Avenue Development, Inc., dated
October 27, 1986, agreeing to indemnify A. Alfred Taubman from all
liabilities, damages, losses and judgments arising under the Taubman
Guarantee, incorporated herein by reference to Exhibit 10(k) to
Registration Statement No. 33-17667.
10(i) Project Services Agreement (the "Project Agreement"), dated
November 8, 1985, between Sotheby's, Inc. and The Taubman Company,
Inc. relating to the proposed development of the York Avenue Property,
incorporated herein by reference to Exhibit 10(1) to Registration
Statement No. 33-17667.
10(j) Financing and Guarantee Agreement (with exhibits) (the "Financing and
Guarantee Agreement"), dated as of October 1, 1987, among Sotheby's
Inc., York Avenue Development, Inc., and Taubman York Avenue
Associates, Inc., relating to the proposed development of the York
Avenue Property, incorporated herein by reference to Exhibit 10(m)
to Registration Statement No. 33-17667.
10(k) Letter Agreement, from Sotheby's, Inc. to York Avenue Development, Inc.
and Taubman York Avenue Associates, Inc., dated August 18, 1988,
amending the Financing and Guarantee Agreement.
10(l) Assignment and Assumption of Financing and Guarantee Agreement, by
and between Taubman York Avenue Associates, Inc. and York Avenue
Advisors, Inc., dated as of June 1, 1995.
10(m) Bill of Sale and Assignment and Assumption Agreement (regarding
Contracts, General Intangibles, Receivables, and other Assets and
Liabilities), by and between Taubman York Avenue Associates, Inc.
and York Avenue Advisors, Inc. dated as of June 1, 1995.
10(n) Memorandum of Option Agreement, dated January 31, 1981, among Benenson
and 089 Nosidam Corp., relating to the York Avenue Property,
incorporated herein by reference to Exhibit 10(hh) to Registration
Statement No. 33-17667.
10(o) Letter Agreement, dated October 27, 1986, among Benenson and York
Avenue Development, Inc. relating to the York Avenue Property,
incorporated herein by reference to Exhibit 10(ii) to Registration
Statement No. 33-17667.
10(p) Assignment, Assumption Agreement and Release, dated as of
October 1, 1987, among Sotheby's Inc., York Avenue Development,
Inc. and the Taubman Company, Inc. relating to the assignment of
the Project Agreement, incorporated herein by reference to
Exhibit 10(jj) to Registration Statement No. 33-17667.
10(q)* Sotheby's Inc. 1988 Benefit Equalization Plan, incorporated herein
by reference to Exhibit 10(t) to Registration Statement No. 33-17667.
10(r)* Sotheby's Holdings, Inc. 1987 Stock Option Plan as amended and restated
effective June 1, 1994 incorporated herein by reference to
Exhibit 10(o) to the 1994 Form 10-K.
10(s) Agreement of Partnership of Acquavella Modern Art, dated May 29, 1990,
between Sotheby's Nevada, Inc. and Acquavella Contemporary Art, Inc.,
incorporated herein by reference to Exhibit 10(b) to the Form 8-K,
filed on June 7, 1990, SEC, File No. 1-9750, on file at the Washington,
D.C. office of the Securities and Exchange Commission.
10(t) Amendment, dated as of April 19, 1991, between The Benenson Capital
Company, Lawrence A. Benenson and Raymond E. Benenson and York Avenue
Development, Inc. to Amendment to Option Agreement and to Related
Agreements, incorporated herein by reference to Exhibit 10(kk) to the
Company's Annual Report on Form 10K, for the year ended
December 31, 1991, SEC File No. 1-9750.
10(u) Credit Agreement dated as of August 3, 1994, among Sotheby's Holdings,
Inc., Sotheby's Inc., Oatshare Limited, Sotheby's, and Chemical Bank,
incorporated herein by reference to Exhibit 4 to the Second Quarter
Form 10-Q for 1994.
10(v)* Letter Agreement, dated October 25, 1993, between Sotheby's (U.K.) and
Henry Wyndham setting forth certain terms and agreements of his
employment, incorporated herein by reference to Exhibit 10(u) to the
1994 Form 10-K.
10(w)* Letter Agreement, dated October 13, 1993, between Sotheby's (U.K.) and
Henry Wyndham Fine Art Ltd., an art dealing business, setting forth
certain terms and agreements of the purchase of inventory, incorporated
herein by reference to Exhibit 10(v) to the 1994 Form 10-K.
10(x) Guarantee Agreement, dated June 2, 1994, from Sotheby's Holdings, Inc.
to Henry Wyndham, incorporated herein by reference to Exhibit 10(w) to
the 1994 Form 10-K.
10(y) Letter, dated April 21, 1995, from Sotheby's Holdings, Inc. to Coutts
and Co., setting forth an increased guarantee by the Company on Henry
Wyndham's behalf.
20
10(z)* Letter Agreement, dated October 27, 1993, between Sotheby's Holdings,
Inc. and Lord Camoys setting forth certain terms and agreements of his
employment, incorporated herein by reference to Exhibit 10(x) to the
1994 Form 10-K.
10(aa)* Letter Agreement, dated December 21, 1993, between Sotheby's (U.K.)
and The Rt. Hon. The Earl of Gowrie setting forth certain terms and
agreements of his employment, incorporated herein by reference to
Exhibit 10(y) to the 1994 Form 10-K.
10(bb)* Letter, dated March 25, 1996, from George Bailey, Managing Director,
Sotheby's Europe, to The Rt. Hon. The Earl of Gowrie setting forth
certain terms and agreements concerning of his consulting arrangement.
(13) Annual Report to Shareholders for the year ended December 31, 1995
(21) Subsidiaries of the Registrant
(23) Consent of Deloitte & Touche LLP
(24) Powers of Attorney
(27) Financial Data Schedule
- ------------
* A compensatory agreement or plan required to be filed pursuant to Item 14(c)
of Form 10-K.
(14)(b) Current Reports on Form 8-K--None.
(14)(c) The list of exhibits filed with this report is set forth in response to
Item 14(a)(3). The required exhibit index has been filed with the
exhibits.
(14)(d) The financial statement schedules of the Company listed in response to
Item 14(a)(2) are filed pursuant to this Item 14(d).
21
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors of
SOTHEBY'S HOLDINGS, INC.:
We have audited the consolidated financial statements of Sotheby's Holdings,
Inc. and subsidiaries as of December 31, 1995 and 1994, and for each of the
three years in the period ended December 31, 1995 and have issued our report
thereon dated February 28, 1996; such consolidated financial statements and
report are included in your 1995 Annual Report to Shareholders and are
incorporated herein by reference. Our audits also included the consolidated
financial statement schedule of Sotheby's Holdings, Inc. and subsidiaries listed
in Item 14. This consolidated financial statement schedule is the responsibility
of the Company's management. Our responsibility is to express an opinion based
on our audits. In our opinion, such consolidated financial statement schedule,
when considered in relation to the basic consolidated financial statements taken
as a whole, presents fairly in all material respects the information set forth
therein.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
New York, New York
February 28, 1996
22
SCHEDULE II
SOTHEBY'S HOLDINGS, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- ----------------------------------------- ---------- ------------------------ ---------- --------
ADDITIONS
BALANCE
BALANCE AT CHARGED TO CHARGED TO AT END
BEGINNING COST AND OTHER OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS PERIOD
- ----------------------------------------- ---------- ---------- ---------- ---------- --------
(THOUSANDS OF DOLLARS)
Valuation reserve deducted in the balance
sheet from the asset to which it
applies:
Accounts and notes receivable:
1995 Allowance for doubtful
accounts........................... $ 10,165 $2,902 $ 604 $1,093 $12,578
---------- ---------- ---------- ---------- --------
---------- ---------- ---------- ---------- --------
1994 Allowance for doubtful
accounts........................... $ 10,596 $4,196 -- $4,627 $10,165
---------- ---------- ---------- ---------- --------
---------- ---------- ---------- ---------- --------
1993 Allowance for doubtful
accounts........................... $ 12,930 $5,499 -- $7,833 $10,596
---------- ---------- ---------- ---------- --------
---------- ---------- ---------- ---------- --------
Inventory:
1995 Realizable value allowance...... $ 14,995 $4,965 $2,666 $1,614 $21,012
---------- ---------- ---------- ---------- --------
---------- ---------- ---------- ---------- --------
1994 Realizable value allowance...... $ 14,334 $1,921 -- $1,260 $14,995
---------- ---------- ---------- ---------- --------
---------- ---------- ---------- ---------- --------
1993 Realizable value allowance...... $ 18,637 $4,055 -- $8,358 $14,334
---------- ---------- ---------- ---------- --------
---------- ---------- ---------- ---------- --------
23
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
SOTHEBY'S HOLDINGS, INC.
By: /s/ DIANA D. BROOKS
..................................
Diana D. Brooks
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------------------------- ----------------------------- ---------------
* Chairman of the Board March 29, 1996
...........................................
A. Alfred Taubman
* Vice Chairman of the Board March 29, 1996
...........................................
Max M. Fisher
* Deputy Chairman of the March 29, 1996
........................................... Board
Lord Camoys
/s/ DIANA D. BROOKS President, Chief Executive March 29, 1996
........................................... Officer and Director
Diana D. Brooks
/s/ KEVIN A. BOUSQUETTE Senior Vice President and March 29, 1996
........................................... Chief Financial Officer
Kevin A. Bousquette
* Director March 29, 1996
...........................................
Viscount Blakenham
* Chairman, Sotheby's Europe March 29, 1996
........................................... and Director
Simon De Pury
* Director March 29, 1996
...........................................
Walter J. P. Curley
* Director March 29, 1996
...........................................
The Rt. Hon. The Earl of Gowrie
* Director March 29, 1996
...........................................
The Marquess of Hartington
* Director March 29, 1996
...........................................
R. Julian de la M. Thompson
/s/ PATRICIA CARBERRY Vice President, Controller March 29, 1996
........................................... and Chief Accounting
Patricia Carberry Officer
*By: /s/ KEVIN A. BOUSQUETTE March 29, 1996
.......................................
Kevin A. Bousquette
As Attorney-in-Fact
24
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
3(a) Amended and Restated Articles of Incorporation of Sotheby's Holdings,
Inc., as amended, incorporated herein by reference to Exhibit 4(b) to
Registration Statement No. 33-26008.
3(b) Restated By-Laws of Sotheby's Holdings, Inc., as amended, incorporated
herein by reference to Exhibit 3(b) to the Company's Annual Report on
Form 10-K for the year ended December 31, 1988, SEC File No. 1-9750,
on file at the Washington D.C. office of the Securities and Exchange
Commission (the "1988 Form 10-K").
4 See Exhibits 3(a) and 3(b).
10(a) Issuing and Paying Agency Agreement, dated February 15, 1989, between
Sotheby's Inc. and the Chase Manhattan Bank, N.A. relating to the
issuance of short-term notes ("U.S. Notes") in the U.S. Commercial
Paper market, incorporated herein by reference to Exhibit 10(g) to
the 1988 Form 10-K, SEC File No. 1-9750, on file at the Washington,
D.C. office of the Securities and Exchange Commission.
10(b) U.S. Commercial Paper Dealer Agreement, dated February 15, 1989,
between Sotheby's, Inc. and Chase Securities, Inc. relating to the
issuance of the U.S. Notes, incorporated herein by reference to
Exhibit 10(h) to the 1988 Form 10-K, SEC File No. 1-9750, on file
at the Washington, D.C. office of the Securities and Exchange
Commission.
10(c) U.S. Commercial Paper Dealer Agreement, dated February 15, 1989,
between Sotheby's, Inc. and Merrill Lynch Money Markets, Inc. relating
to the issuance of the U.S. Notes, incorporated herein by reference to
the Exhibit 10(i) of the 1988 Form 10-K, SEC File No. 1-9750, on file at
the Washington, D.C. office of the Securities and Exchange Commission.
10(d) Lease, dated as of July 25, 1979, among The Benenson Capital Company,
Lawrence A. Benenson, Raymond E. Benenson (collectively, "Benenson")
to Sotheby Parke Bernet Inc., and amendments thereto, all relating to
1334 York Avenue, New York, New York (the "York Avenue Property"),
incorporated herein by reference to Exhibit 10(g) to Registration
Statement No. 33-17667.
10(e) Option Agreement with Form of Exchange Agreement, dated July 25, 1979,
among Benenson and 089 Nosidam Corp. (as nominee of Sotheby Parke
Bernet Inc.) assignments thereof and amendments thereto, all relating
to the York Avenue Property, incorporated herein by reference to
Exhibit 10(h) to Registration Statement No. 33-17667.
10(f) Exchange Agreement, dated October 27, 1986, among Benenson and York
Avenue Development, Inc., and Letter, dated October 27, 1986, from
Benenson to Sotheby's, Inc. and York Avenue Development, Inc.,
concerning zoning matters and security relating to the York Avenue
Property, incorporated herein by reference to Exhibit 10(i) to
Registration Statement No. 33-17667.
10(g) Guarantee, made November 6, 1986, by A. Alfred Taubman in favor of
Benenson relating to the York Avenue Property (the "Taubman
Guarantee"), incorporated herein by reference to Exhibit 10(j)
to Registration Statement No. 33-17667.
25
S2
Exhibit
Number Description
- ------- -----------
10(h) Letter from Sotheby's, Inc. and York Avenue Development, Inc., dated
October 27, 1986, agreeing to indemnify A. Alfred Taubman from all
liabilities, damages, losses and judgments arising under the Taubman
Guarantee, incorporated herein by reference to Exhibit 10(k) to
Registration Statement No. 33-17667.
10(i) Project Services Agreement (the "Project Agreement"), dated
November 8, 1985, between Sotheby's, Inc. and The Taubman Company,
Inc. relating to the proposed development of the York Avenue Property,
incorporated herein by reference to Exhibit 10(1) to Registration
Statement No. 33-17667.
10(j) Financing and Guarantee Agreement (with exhibits) (the "Financing and
Guarantee Agreement"), dated as of October 1, 1987, among Sotheby's
Inc., York Avenue Development, Inc., and Taubman York Avenue
Associates, Inc., relating to the proposed development of the York
Avenue Property, incorporated herein by reference to Exhibit 10(m)
to Registration Statement No. 33-17667.
10(k) Letter Agreement, from Sotheby's, Inc. to York Avenue Development, Inc.
and Taubman York Avenue Associates, Inc., dated August 18, 1988,
amending the Financing and Guarantee Agreement.
10(l) Assignment and Assumption of Financing and Guarantee Agreement, by
and between Taubman York Avenue Associates, Inc. and York Avenue
Advisors, Inc., dated as of June 1, 1995.
10(m) Bill of Sale and Assignment and Assumption Agreement (regarding
Contracts, General Intangibles, Receivables, and other Assets and
Liabilities), by and between Taubman York Avenue Associates, Inc.
and York Avenue Advisors, Inc. dated as of June 1, 1995.
10(n) Memorandum of Option Agreement, dated January 31, 1981, among Benenson
and 089 Nosidam Corp., relating to the York Avenue Property,
incorporated herein by reference to Exhibit 10(hh) to Registration
Statement No. 33-17667.
10(o) Letter Agreement, dated October 27, 1986, among Benenson and York
Avenue Development, Inc. relating to the York Avenue Property,
incorporated herein by reference to Exhibit 10(ii) to Registration
Statement No. 33-17667.
10(p) Assignment, Assumption Agreement and Release, dated as of
October 1, 1987, among Sotheby's Inc., York Avenue Development,
Inc. and the Taubman Company, Inc. relating to the assignment of
the Project Agreement, incorporated herein by reference to
Exhibit 10(jj) to Registration Statement No. 33-17667.
10(q)* Sotheby's Inc. 1988 Benefit Equalization Plan, incorporated herein
by reference to Exhibit 10(t) to Registration Statement No. 33-17667.
10(r)* Sotheby's Holdings, Inc. 1987 Stock Option Plan as amended and restated
effective June 1, 1994 incorporated herein by reference to
Exhibit 10(o) to the 1994 Form 10-K.
10(s) Agreement of Partnership of Acquavella Modern Art, dated May 29, 1990,
between Sotheby's Nevada, Inc. and Acquavella Contemporary Art, Inc.,
incorporated herein by reference to Exhibit 10(b) to the Form 8-K,
filed on June 7, 1990, SEC, File No. 1-9750, on file at the Washington,
D.C. office of the Securities and Exchange Commission.
10(t) Amendment, dated as of April 19, 1991, between The Benenson Capital
Company, Lawrence A. Benenson and Raymond E. Benenson and York Avenue
Development, Inc. to Amendment to Option Agreement and to Related
Agreements, incorporated herein by reference to Exhibit 10(kk) to the
Company's Annual Report on Form 10K, for the year ended
December 31, 1991, SEC File No. 1-9750.
10(u) Credit Agreement dated as of August 3, 1994, among Sotheby's Holdings,
Inc., Sotheby's Inc., Oatshare Limited, Sotheby's, and Chemical Bank,
incorporated herein by reference to Exhibit 4 to the Second Quarter
Form 10-Q for 1994.
10(v)* Letter Agreement, dated October 25, 1993, between Sotheby's (U.K.) and
Henry Wyndham setting forth certain terms and agreements of his
employment, incorporated herein by reference to Exhibit 10(u) to the
1994 Form 10-K.
10(w)* Letter Agreement, dated October 13, 1993, between Sotheby's (U.K.) and
Henry Wyndham Fine Art Ltd., an art dealing business, setting forth
certain terms and agreements of the purchase of inventory, incorporated
herein by reference to Exhibit 10(v) to the 1994 Form 10-K.
10(x) Guarantee Agreement, dated June 2, 1994, from Sotheby's Holdings, Inc.
to Henry Wyndham, incorporated herein by reference to Exhibit 10(w) to
the 1994 Form 10-K.
10(y) Letter, dated April 21, 1995, from Sotheby's Holdings, Inc. to Coutts
and Co., setting forth an increased guarantee by the Company on Henry
Wyndham's behalf.
26
Exhibit
Number Description
- ------- -----------
10(z)* Letter Agreement, dated October 27, 1993, between Sotheby's Holdings,
Inc. and Lord Camoys setting forth certain terms and agreements of his
employment, incorporated herein by reference to Exhibit 10(x) to the
1994 Form 10-K.
10(aa)* Letter Agreement, dated December 21, 1993, between Sotheby's (U.K.)
and The Rt. Hon. The Earl of Gowrie setting forth certain terms and
agreements of his employment, incorporated herein by reference to
Exhibit 10(y) to the 1994 Form 10-K.
10(bb)* Letter, dated March 25, 1996, from George Bailey, Managing Director,
Sotheby's Europe, to The Rt. Hon. The Earl of Gowrie setting forth
certain terms and agreements concerning of his consulting arrangement.
(13) Annual Report to Shareholders for the year ended December 31, 1995
(21) Subsidiaries of the Registrant
(23) Consent of Deloitte & Touche LLP
(24) Powers of Attorney
(27) Financial Data Schedule
- ------------
* A compensatory agreement or plan required to be filed pursuant to Item 14(c)
of Form 10-K.
27
S3