Edgar Filing: SOTHEBYS HOLDINGS INC

Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
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Check the appropriate box:
[ ] Preliminary Proxy Statement
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by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12

SOTHEBY'S HOLDINGS, INC.
..................................................................
(Name of Registrant as Specified In Its Charter)

..................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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SOTHEBY'S

SOTHEBY'S HOLDINGS, INC.
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
TO BE HELD MAY 7, 2004

To the Shareholders of
SOTHEBY'S HOLDINGS, INC.

The Annual Meeting of Shareholders of SOTHEBY'S HOLDINGS, INC. (the
'Company') will be held on Friday May 7, 2004, at the office of Sotheby's, Inc.,
1334 York Avenue, New York, New York, at 10:30 a.m., local time, for the
following purposes:

1. To elect eleven (11) directors to serve until the next annual
meeting of shareholders and until their successors are elected and
qualified;

2. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditors for the year ending December 31, 2004; and

3. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.

The Board of Directors has fixed the close of business on March 26, 2004 as
the record date for determining the shareholders that are entitled to notice of,
and to vote at, the annual meeting or any adjournment or postponement thereof.

By Order of the Board of Directors
MICHAEL I. SOVERN, Chairman

Bloomfield Hills, Michigan
April 16, 2004

SHAREHOLDERS WHO DO NOT INTEND TO BE PRESENT AT THE MEETING IN PERSON ARE
REQUESTED TO SIGN AND DATE THE ENCLOSED PROXY AND TO RETURN IT IN THE
ACCOMPANYING ENVELOPE IN ORDER THAT THE NECESSARY QUORUM MAY BE ASSURED. ANY
PROXY MAY BE REVOKED IN THE MANNER DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT
AT ANY TIME BEFORE IT HAS BEEN VOTED AT THE MEETING.

SOTHEBY'S HOLDINGS, INC.
38500 WOODWARD AVENUE
SUITE 100
BLOOMFIELD HILLS, MICHIGAN 48304

PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 7, 2004

This Proxy Statement is furnished in connection with the solicitation of
proxies (each, a 'Proxy') by and on behalf of the Board of Directors of
Sotheby's Holdings, Inc. (the 'Company'), for use at the annual meeting of
shareholders and at any adjournment or adjournments thereof (the 'Meeting') to
be held, for the purposes set forth in the accompanying Notice of Annual
Meeting, on Friday, May 7, 2004, at the office of Sotheby's, Inc., 1334 York
Avenue, New York, New York, at 10:30 a.m., local time. The Company expects to
mail this Proxy Statement on or about April 16, 2004.

Valid Proxies will be voted as specified in each Proxy at the Meeting. Any
shareholder giving a Proxy in the accompanying form retains the power to revoke
the Proxy, by written notice to the Company, at any time prior to its exercise.
In addition, attendance at the Meeting will not constitute a revocation of a
Proxy unless the shareholder affirmatively indicates at the Meeting that such
shareholder intends to vote the shares in person.

ANNUAL REPORT

The Annual Report of the Company for the year ended December 31, 2003 and
the Annual Report on Form 10-K of the Company for the year ended December 31,
2003, which includes financial statements audited by Deloitte & Touche LLP,
independent auditors, and their report thereon dated March 12, 2004 are being
mailed with this Proxy Statement to each of the Company's shareholders of record
at the close of business on March 26, 2004. ALSO, A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2003, AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, WILL BE SENT TO ANY SHAREHOLDER, WITHOUT
CHARGE, UPON WRITTEN REQUEST TO INVESTOR RELATIONS, 1334 YORK AVENUE, NEW YORK,
NEW YORK 10021, WITHIN ONE (1) BUSINESS DAY OF THE RECEIPT OF SUCH REQUEST.

VOTING SECURITIES

The holders of record of shares of Class A Limited Voting Common Stock, par
value $0.10 per share (the 'Class A Common Stock'), or shares of Class B Common
Stock, par value $0.10 per share (the 'Class B Common Stock,' and together with
the Class A Common Stock, the 'Common Stock'), of the Company at the close of
business on March 26, 2004, are entitled to vote at the Meeting. On that date,
there were outstanding and entitled to vote 45,097,447 shares of Class A Common
Stock, entitled to one vote per share, and 16,681,150 shares of Class B Common
Stock, entitled to ten votes per share. At the Meeting, the holders of Class A
Common Stock, voting as a class, will elect three (3) directors, and the holders
of Class B Common Stock, voting as a class, will elect the remaining eight
(8) directors.

With respect to all matters that may properly come before the Meeting (other
than the election of directors), holders of Common Stock will vote as a single
class.

Unless contrary instructions are indicated on the Proxy, all shares of
Common Stock represented by valid Proxies received pursuant to this solicitation
(and not revoked before they are voted) will be voted:

(1) FOR the election of the nominees for directors named in the Proxy;
and

(2) FOR the ratification of the appointment of Deloitte & Touche LLP as
the Company's independent auditors.

Other than the election of directors, all matters that may properly come
before the Meeting require the affirmative vote of a majority of the votes cast
at the Meeting. Holders of Class A Common Stock

elect three (3) directors by a plurality of the votes cast by such holders at
the Meeting, and holders of Class B Common Stock elect eight (8) directors by a
plurality of the votes cast by such holders at the Meeting. Where brokers are
prohibited from exercising discretionary authority for beneficial owners who
have not provided voting instructions for a particular matter, those shares
('Non-Voting Shares') will not be included in the vote totals for that matter
since no vote is being cast on the matter but will be counted for determining
the presence of a quorum. Consequently, Non-Voting Shares will not affect the
determination of whether a matter is approved.

Shares voted to abstain regarding a particular matter ('Abstaining Shares')
will have the same effect as a vote against the matter. Accordingly, Abstaining
Shares will affect the determination of whether a matter is approved because
Abstaining Shares are not an affirmative vote for a matter.

The Company knows of no business other than that set forth above to be
transacted at the Meeting, but if other matters requiring a vote do arise, it is
the intention of the persons named in the Proxy to vote in accordance with their
judgment on such matters.

ELECTION OF DIRECTORS

Eleven (11) directors are to be elected at the Meeting to serve until the
next annual meeting and until their respective successors have been elected and
qualified. Directors are elected by a plurality of the votes cast at the
Meeting. Lord Black of Crossharbour, a current Director of the Company, is not
standing for reelection to the Board of Directors at the Meeting.

The shares of Class A Common Stock represented by the enclosed Proxy, if
given and unless otherwise specified, will be voted by the persons named as
proxies for the election of the following individuals nominated by the Board of
Directors:

YEAR FIRST ELECTED
NAME AGE A DIRECTOR
---- --- ------------------

Steven B. Dodge........................................ 60 2000
Sharon Percy Rockefeller............................... 59 1998
Donald M. Stewart...................................... 65 2003

Mr. Dodge became a director of the Company in August 2000 and is the
principal of a private real estate development company. Until February 2004, he
served as Chairman and as a Director of American Tower Corporation, an owner and
operator of broadcast and communications towers throughout the United States and
as President and Chief Executive Officer of that company until October 2003,
having served in these positions since the company's formation in July 1995. Mr.
Dodge also serves as a director of Nextel Partners, Inc., a wireless
telecommunications company, and Sensitech, Inc., a supplier of environmentally
sensitive products. Until November 2002, he served as a director of Citizens
Financial Group, Inc., a financial services holding company.

Mrs. Rockefeller became a director of the Company in April 1998. She is
President and Chief Executive Officer of WETA TV/FM public stations in
Washington, D.C., a position she has held since 1989, and has been a member of
the board of directors of WETA since 1985. Mrs. Rockefeller has served as a
director of PepsiCo, Inc. since 1986. She is a member of the board of directors
of the Public Broadcasting Service, Washington, D.C., and was a member of the
board of directors of the Corporation for Public Broadcasting from 1979 until
1992. Mrs. Rockefeller is also a member of the Trustee's Council of the National
Gallery of Art, the Kennedy Center Community and Friends Board, the Board of
Directors of The Museum of Modern Art, the Board of Trustees of The Phillips
Collection, the Colonial Williamsburg Foundation Board of Trustees, the
Collections Committee of Harvard University Art Museums, the
Protestant/Episcopal Cathedral Foundation Board, and Washington D.C.'s Economic
Club. She has served as a member of the boards of Stanford University, the
University of Chicago and George Washington University. Since January 2004, Mrs.
Rockefeller has served as a director of the Rockefeller Philanthropy Advisors.

Mr. Stewart became a director of the Company in April 2003. He has served as
the President and Chief Executive Officer of The Chicago Community Trust since
2000. From 1999 to 2000, Mr. Stewart served as Senior Program Officer and
Special Advisor to the President, Carnegie Corporation of New

York, and, from 1987 to 1999, he was the President of The College Board, the
association of high schools and colleges. He also is a director of The New York
Times Company and The Campbell Soup Company.

The shares of Class B Common Stock represented by the enclosed Proxy, if
given and unless otherwise specified, will be voted by the persons named as
proxies for the election of the following individuals nominated by the Board of
Directors:

YEAR FIRST ELECTED
NAME AGE A DIRECTOR
---- --- ------------------

Michael Blakenham...................................... 66 1987
Max M. Fisher.......................................... 95 1983
Marquess of Hartington................................. 59 1994
Jeffrey H. Miro........................................ 61 1998
William F. Ruprecht.................................... 48 2000
Michael I. Sovern...................................... 72 2000
Robert S. Taubman...................................... 50 2000
Robin G. Woodhead...................................... 52 2000

Lord Blakenham became a director of the Company in 1987. From 1972 until
1983, he served in various executive positions with Pearson plc, a British media
company that serves worldwide information, education and entertainment markets
and had a substantial interest in the three Lazard investment banking firms. He
was Executive Chairman of Pearson plc from 1983 until 1997 and served as the
non-executive Chairman of MEPC plc, a commercial real estate investment and
development company, from 1993 to 1998. He was Chairman of the Board of Trustees
of the Royal Botanic Gardens, Kew from 1997 to 2003, Chairman of Japan 2001, a
Japanese cultural festival, until 2002, and a director of the UK-Japan 21st
Century Group until the end of 2003. He is currently a director of Lafarge SA
and is the President of the British Trust for Ornithology.

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 Incorporated, a bank holding company.

The Marquess of Hartington became a director of the Company in September
1994 and assumed the role of Deputy Chairman of the Company in April 1996. He
serves as a director of a number of private companies.

Mr. Miro became a director of the Company in April 1998. Since 1981, he has
served as Chairman of the law firm of Miro Weiner & Kramer, with offices in
Bloomfield Hills, Michigan and New York, New York. In addition, Mr. Miro is an
Adjunct Professor of Law at the University of Michigan Law School. Mr. Miro
serves as a director of M/I Schottenstein Homes, a national home building
company.

Mr. Ruprecht became a director and the President and Chief Executive Officer
of the Company in February 2000 and served as Executive Vice President of the
Company and Managing Director of Sotheby's North and South America from February
1994 until February 2000. From 1992 to February 1994, he served as Director of
Marketing for the Company worldwide and also oversaw a number of specialist
departments. From 1986 to 1992, Mr. Ruprecht served as Director of Marketing for
Sotheby's, Inc.

Mr. Sovern became a director and Chairman of the Board of the Company in
February 2000 and is President Emeritus and the Chancellor Kent Professor of Law
of Columbia University. Since 1960, he has been a professor of law at Columbia
University and served as the President of Columbia University from 1980 until
1993. Mr. Sovern is a member of the Board of Directors of Comcast Corporation
and Sequa Corp. He also has served as the President of the Shubert Foundation
since 1996 and as the Chairman of the Japan Society and of the American Academy
in Rome since 1993.

Mr. Taubman became a director of the Company in August 2000. Since 1992, he
has been a director and the President and Chief Executive Officer of Taubman
Centers, Inc., a company engaged in the regional retail shopping center
business, becoming Chairman of the Board of Taubman Centers, Inc. in December
2001. Mr. Taubman is also a member of the Board of Governors of the National
Association

of Real Estate Investment Trusts, a director of Comerica Bank, a director of the
Real Estate Roundtable and a trustee of the International Council of Shopping
Centers and of the Urban Land Institute.

Mr. Woodhead became a director of the Company in February 2000. He was
appointed Executive Vice President of the Company and Chief Executive of
Sotheby's Europe in December 1998 and in 1999 also became Chief Executive of
Sotheby's Asia. He was Co-Managing Director, Sotheby's Europe from January until
December 1998. From 1992 until 1997, he was the Chief Executive of the London
Commodity Exchange.

It is not contemplated that any of the nominees will be unable or unwilling
to serve; however, if any nominee is unable or unwilling to serve, it is
intended that the shares represented by the Proxy, if given and unless otherwise
specified therein, will be voted for a substitute nominee or nominees designated
by the Board of Directors.

The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of March 26, 2004 by its directors,
nominees for director, executive officers, and 5% shareholders. In compiling the
table, the Company has relied upon information supplied by its officers,
directors, and nominees for director 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 (the 'Exchange
Act'), holders of Class B Common Stock are deemed to own an equal number of
shares of Class A Common Stock except with respect to unvested restricted stock
ownership. For purposes of the calculation of the percentage of each class that
each Named Executive Officer (as such term is defined under the caption
'Compensation of Executive Officers'), director, nominee for 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 or conversion. Under the applicable Exchange
Act rules, each Named Executive Officer is deemed to beneficially own the shares
underlying options that have vested or will vest within the sixty (60) day
period commencing March 26, 2004.

CLASS A AND CLASS B COMMON STOCK OWNERSHIP OF DIRECTORS,
EXECUTIVE OFFICERS AND 5% SHAREHOLDERS'D'

CLASS A COMMON STOCK CLASS B COMMON STOCK
--------------------------- -------------------------
DIRECTORS, EXECUTIVE OFFICERS NUMBER OF PERCENT NUMBER OF PERCENT
AND 5% SHAREHOLDERS SHARES OF CLASS SHARES OF CLASS
--------------------------------------------- ---------- ----------- ----------- --------

Ariel Capital Management, Inc. .............. 11,181,035 24.79% 0 *
200 East Randolph Drive, Suite 2900
Chicago, IL 60601

George Bailey ............................... 359,900(1) * 328,000(2) 1.93%
Sotheby's
34-35 New Bond Street
London, W1 2AA England

Lord Black of Crossharbour .................. 15,550(3) * 0 *
10 Toronto Street
Ontario, Canada N5C2B7

Michael Blakenham ........................... 16,300(4) * 0 *
1 St. Leonard's Studios
Smith Street
London SW3 4EN England

Steven B. Dodge ............................. 57,910 * 0 *
239 Summer Street
Manchester, MA 01944

Max M. Fisher ............................... 2,448,965(5) 5.15% 2,432,665(6) 14.58%
3011 West Grand Boulevard
27th Floor
Detroit, Michigan 48202

FMR Corp. ................................... 3,008,200 6.67% 0 *
82 Devonshire Street
Boston, Massachusetts 02109

Marquess of Hartington ...................... 27,000(7) * 0 *
Sotheby's
34-35 New Bond Street
London, W1 2AA England

Jeffrey H. Miro ............................. 21,045(8) * 0 *
Miro Weiner & Kramer
500 North Woodward Avenue
Suite 100
Bloomfield Hills, Michigan 48304

Sharon Percy Rockefeller .................... 15,595 * 0 *
WETA TV/26 and FM 90.9
2775 South Quincy Street
Arlington, Virginia 22206

William F. Ruprecht ......................... 667,000(9) 1.46% 742,000(10) 4.26%
Sotheby's, Inc.
1334 York Avenue
New York, New York 10021

Stuart N. Siegel** .......................... 257,800(11) * 257,800(12) 1.52%
Sotheby's International Realty, Inc.
38 East 61st Street
New York, New York 10021

Michael I. Sovern ........................... 6,400 * 0 *
Sotheby's, Inc.
1334 York Avenue
New York, New York 10021

Donald M. Stewart ........................... 2,695(13) * 0 *
Chicago Community Trust
111 E. Wacker Drive, Suite 1400
Chicago, Illinois 60601

A. Alfred Taubman ........................... 13,249,818(14) 22.71% 13,241,328(15) 79.38%
200 East Long Lake Road
Bloomfield Hills, Michigan 48304

Robert S. Taubman ........................... 3,480,540(16) 7.17% 3,468,630(17) 20.80%
200 East Long Lake Road
Bloomfield Hills, Michigan 48304

Robin G. Woodhead ........................... 385,000(18) * 385,000(19) 2.26%
Sotheby's
34-35 New Bond Street
London, W1 2AA England

Mitchell Zuckerman .......................... 341,799(20) * 341,799(21) 2%
Sotheby's, Inc.
1334 York Avenue
New York, New York 10021

Directors and Executive Officers as a 8,881,499(22) 16.50% 8,723,894(22) 44.73%
Group......................................

------------------------

'D' Subsequent to the Meeting record date, each executive officer (other than
Mr. Siegel) exchanged certain of his employee stock options for restricted
shares of Class B Common Stock pursuant to a Company exchange offer, which
transactions are not reflected in this table. Resulting changes in stock
ownership are reported in each executive officer's beneficial ownership
report on Form 4 recently filed with the Securitites and Exchange
Commission, which are available at www.sothebys.com.

* Represents less than 1%.

** Effective February 17, 2004, the Company no longer employed Mr. Siegel.

(1) This figure represents 7,500 shares of Class A Common Stock owned by Mr.
Bailey, 24,400 shares of Class A Common Stock owned by Mr. Bailey's wife
and 328,000 shares of Class B Common Stock that Mr. Bailey has the right to
acquire upon exercising options granted under the Company's 1987 Stock
Option Plan (the '1987 Plan') and the Company's 1997 Stock Option Plan, as
amended (the '1997 Plan') and converting such shares.

(2) This figure represents 328,000 shares of Class B Common Stock that Mr.
Bailey has the right to acquire upon exercising options under the 1987 and
1997 Plans.

(3) This figure represents 9,064 shares of Class A Common Stock that Lord Black
owns, as well as 6,486 Deferred Stock Units, which automatically convert to
an equal number of shares of Class A Common Stock when Lord Black
terminates service on the board. For a description of the Deferred Stock
Units, see 'Compensation of Directors.'

(4) This figure represents 3,305 shares of Class A Common Stock that Lord
Blakenham owns, as well as 12,995 Deferred Stock Units, which automatically
convert to an equal number of shares of Class A Common Stock when Lord
Blakenham terminates service on the board.

(5) In addition to 3,305 shares of Class A Common Stock and 12,995 Deferred
Stock Units, which automatically convert to an equal number of shares of
Class A Common Stock when Mr. Fisher terminates service on the board, that
Mr. Fisher owns as trustee of his grantor trust, this figure includes
2,432,665 shares of Class A Common Stock that Mr. Fisher has the right to
acquire by converting shares of Class B Common Stock. Mr. Fisher disclaims
beneficial ownership of all shares of Class A Common Stock other than the
3,305 shares of Class A Common Stock, the 12,995 Deferred Stock Units and
the 1,830,161 shares relating to the shares of Class B Common Stock held by
him as trustee of his grantor trust. See footnote (6) below.

(6) This figure includes 5,380 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 597,124 shares owned by Martinique Hotel, Inc., a
corporation owned by Mr. Fisher's family. This figure excludes 17,930
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.

(7) This figure represents 14,005 shares of Class A Common Stock that the
Marquess of Hartington owns, as well as 12,995 Deferred Stock Units, which
automatically convert to an equal number of shares of Class A Common Stock
when the Marquess of Hartington terminates service on the board.

(8) This figure represents 12,995 Deferred Stock Units owned by Mr. Miro, which
automatically convert to an equal number of shares of Class A Common Stock
when Mr. Miro terminates service on the board, as well as 8,050 shares of
Class A Common Stock owned by his wife and children.

(9) This figure consists of 642,000 shares of Class A Common Stock that Mr.
Ruprecht has the right to acquire upon exercising options granted under the
1987 Plan and the 1997 Plan for shares of Class B Common Stock and
converting such shares; 25,000 shares of Class A Common Stock that he has
the right to acquire upon exercising purchase rights granted under the
Company's Performance Share Purchase Plan (the 'Performance Plan') for
shares of Class B Common Stock and converting such shares. See Note 2 to
the 'Aggregate Option Exercises in 2003 and Year End Option Values' table
under 'Stock Options' below describing the status of the Performance Plan.

(10) This figure consists of 642,000 shares of Class B Common Stock that Mr.
Ruprecht has the right to acquire by exercising options under the 1987 and
1997 Plans, 25,000 shares of Class B Common Stock that he has the right to
acquire by exercising purchase rights granted under the Performance Plan
and 75,000 shares of Class B Common Stock issued as restricted stock under
the 2003 Restricted Stock Plan (the 'Restricted Stock Plan') for which Mr.
Ruprecht has sole voting power and, until vesting begins, no investment
power.

(11) This figure represents 257,800 shares of Class A Common Stock that Mr.
Siegel has the right to acquire upon exercising options granted under the
1987 Plan and the 1997 Plan for shares of Class B Common Stock and
converting such shares.

(12) This figure represents 257,800 shares of Class B Common Stock that Mr.
Siegel has the right to acquire by exercising options under the 1987 and
1997 Plans.

(13) This figure represents 1,695 Deferred Stock Units owned by Mr. Stewart,
which automatically convert to an equal number of shares of Class A Common
Stock when Mr. Stewart terminates service on the board, as well as 1,000
shares of Class A Common Stock owned by him.

(14) In addition to 8,490 shares of Class A Common Stock that A. Alfred Taubman
owns as trustee of The A. Alfred Taubman Restated Revocable Trust, this
figure includes 4,477,656 and 5,295,042 shares of Class A Common Stock that
he has the right to acquire by converting shares of Class B Common Stock
that he owns as trustee of The A. Alfred Taubman Restated Revocable Trust
and as trustee of the A. Alfred Taubman 2003 Grantor Retained Annuity
Trust, respectively, 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 L.L.C., over which shares he has
sole voting and dispositive control. A. Alfred Taubman has pledged certain
of these shares to a commercial bank. If the commercial bank foreclosed on
such shares, a change of control with respect to the Company would occur.

(15) This figure includes 4,477,656 shares of Class B Common Stock that A.
Alfred Taubman owns as trustee of The A. Alfred Taubman Restated Revocable
Trust, 5,295,042 shares of Class B Common Stock that he owns as trustee of
The A. Alfred Taubman 2003 Grantor Retained Annuity Trust, and 3,468,630
shares of Class B Common Stock owned by Taubman Investments L.L.C., over
which shares A. Alfred Taubman has sole voting and dispositive control.
This figure excludes 792,830 shares of Class B Common Stock owned by Judith
Taubman, his wife. A. Alfred Taubman disclaims beneficial ownership of all
shares of Class B Common Stock owned by Judith Taubman.

(16) This figure includes 7,910 Deferred Stock Units, which automatically
convert to an equal number of shares of Class A Common Stock when Robert S.
Taubman terminates service on the Board. This figure also includes
3,468,630 shares of Class A Common Stock that Taubman Investments L.L.C.
has the right to acquire by converting shares of Class B Common Stock.
Robert S. Taubman does not have voting or dispositive control over such
shares and disclaims any beneficial ownership of such shares beyond the
pecuniary interest he has in Taubman Investments L.L.C. This figure also
includes 3,000 shares of Class A Common Stock for which Robert S. Taubman
is the custodian for the benefit of his son and 1,000 shares of Class A
Common Stock, which his wife owns.

(17) This figure represents 3,468,630 shares of Class B Common Stock owned by
Taubman Investments L.L.C. Robert S. Taubman does not have voting or
dispositive control over such shares and disclaims beneficial ownership of
such shares beyond the pecuniary interest he has in Taubman Investments
L.L.C.

(18) This figure represents 385,000 shares of Class A Common Stock that Mr.
Woodhead has the right to acquire by exercising options granted under the
1997 Plan for shares of Class B Common Stock and converting such shares.

(19) This figure represents 385,000 shares of Class B Common Stock that Mr.
Woodhead has the right to acquire by exercising options under the 1997
Plan.

(20) This figure represents 341,799 shares of Class A Common Stock that Mr.
Zuckerman has the right to acquire by exercising options granted under the
1987 Plan and the 1997 Plan for shares of Class B Common Stock and
converting such shares.

(21) This figure represents 341,799 shares of Class B Common Stock that Mr.
Zuckerman has the right to acquire by exercising options under the 1987 and
the 1997 Plan.

(22) See above notes.

MANAGEMENT

EXECUTIVE OFFICERS

Officers of the Company are appointed by the Board of Directors and serve at
the discretion of the Board. The executive officers of the Company (including
certain officers of certain principal subsidiaries and divisions) are listed
below as well as biographical information for each person, unless that person
has been nominated for a director position, in which case such executive
officer's biography is contained under the caption 'Election of Directors':

NAME AGE PRESENT TITLE
---- --- --------------------------------------------------

George Bailey............................. 50 Managing Director, Sotheby's Europe

Richard C. Buckley........................ 41 Managing Director, North American Regional
Division

Donaldson C. Pillsbury.................... 63 Executive Vice President, Worldwide General
Counsel and Secretary

William S. Sheridan....................... 50 Executive Vice President and Chief Financial
Officer

Stuart N. Siegel.......................... 48 President and Chief Executive Officer, Sotheby's
International Realty

Daryl S. Wickstrom........................ 42 Managing Director, Global Auction Division

Mitchell Zuckerman........................ 57 President, Sotheby's Financial Services, Inc. and
Sotheby's Ventures, LLC

William F. Ruprecht....................... 48 President and Chief Executive Officer

Robin G. Woodhead......................... 52 Executive Vice President and Chief Executive,
Sotheby's Europe and Asia

Mr. Bailey became the Managing Director of Sotheby's Europe in 1994. Since
1979, he has served in a number of different executive positions with Sotheby's.

Mr. Buckley became the Managing Director of Sotheby's North American
regional auction business in January 2002. From 1999 to 2002, he served in
various senior executive positions, including as Managing Director of
Sothebys.com. Mr. Buckley also served as head of marketing operations for
Sotheby's North America from 1996 to 1999, having joined the Company in 1989.

Mr. Pillsbury was appointed Executive Vice President and Worldwide General
Counsel in February 2001. Mr. Pillsbury previously served as Senior Vice
President and General Counsel of the Company from January 1998 until February
2001. From 1993 until January 1998, he was Senior Counsel to the law firm Davis
Polk & Wardwell; from 1973 until 1993, he was a partner of that firm. Mr.
Pillsbury also is the Chairman of the Board of The Chamber Music Society of
Lincoln Center and a Director of Lincoln Center for the Performing Arts, Inc.

Mr. Sheridan was appointed Executive Vice President and Chief Financial
Officer of the Company in February 2001. From November 1996 until February 2001,
he served as Senior Vice President and Chief Financial Officer of the Company.
Mr. Sheridan also serves as a director of Standard Commercial Corporation.

Mr. Siegel, President and Chief Executive Officer of Sotheby's International
Realty, was appointed President and Managing Director in 1991 and has been with
Sotheby's International Realty since 1981. Effective February 17, 2004, he
ceased to be an employee of the Company when the Company sold Sotheby's
International Realty.

Mr. Wickstrom became the Managing Director of Sotheby's Global Auction
Division in January 2002. In 2001, he was appointed Director of Strategic
Projects of the Company, having previously served as a Senior Vice President and
Associate General Counsel of the Company since 1996.

Mr. Zuckerman has been President of Sotheby's Financial Services, Inc. since
1988 and Sotheby's Ventures, LLC since 1997.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Based solely upon the Company's review of the filings made by the Company's
directors and officers under Section 16 of the Exchange Act, all transactions in
and beneficial ownership of the Company's equity securities were reported in a
timely manner, except that the 2003 Form 3 filed by George Bailey inadvertently
omitted shares of Class A Common Stock owned by his wife and is being amended
accordingly.

CORPORATE GOVERNANCE

INFORMATION REGARDING THE BOARD OF DIRECTORS AND COMMITTEES

The Board of Directors of the Company met eight times during 2003. With
respect to the Annual Meeting, the Company expects all Board members to make
every effort to attend but also recognizes that unavoidable conflicts and
special individual circumstances need to be taken into account in applying this
policy. Of the ten Board members standing for reelection at last year's annual
meeting, all attended such annual meeting. The four directors who did not stand
for reelection at last year's annual meeting did not attend. In addition, The
Board of Directors has an Executive Committee, which met twice during 2003, an
Audit Committee, which met eight times during 2003, a Compensation Committee,
which met twice during 2003, and a Special Committee, which met three times in
2003. The Board of Directors formed the Special Committee in August 2000, to
provide oversight and take appropriate action with respect to the investigation
by the United States Department of Justice and other governmental authorities
regarding possible antitrust violations by the Company as well as related civil
litigation. A Section 162(m) Sub-Committee of the Compensation Committee (the
'Section 162(m) Sub-Committee') also exists and meets as is necessary to oversee
and approve certain compensation awards to senior executives in order for the
Company to be permitted to deduct such awards as an expense and to comply with
certain Securities and Exchange Commission ('SEC') rules concerning employee
benefit grants.

The Executive Committee consists of Mr. Dodge, Mr. Fisher, Mr. Ruprecht, Mr.
Taubman, and Mr. Sovern, the Audit Committee consists of Lord Black, Lord
Blakenham, Mr. Dodge and Mrs. Rockefeller, the Compensation Committee consists
of Mr. Fisher, Lord Hartington, Mr. Miro, Mr. Stewart and Mr. Taubman, the
Section 162(m) Sub-Committee consists of Mr. Fisher, Mr. Stewart and Mr.
Taubman. The Special Committee consists of Mr. Dodge, Mrs. Rockefeller and Mr.
Sovern. Except for Mr. Fisher and Lord Black, each of the directors attended at
least 75% of the meetings of the Board and the committees of the Board on which
he or she served during the applicable time period.

In accordance with SEC and New York Stock Exchange ('NYSE') rules, the
Company's Board has determined that all of the members of the Audit Committee
are independent. SEC rules also require that at least one Audit Committee member
be an 'audit committee financial expert.' The Board has determined that Steven
B. Dodge, the Chairman of the Audit Committee, meets the definition of 'audit
committee financial expert.' The Audit Committee operates under a charter that
conforms to SEC and NYSE rules.

The Company's Board of Directors does not currently have a nominating and
governance committee or a formal policy with respect to director candidates
nominated by shareholders. The process for determining nominees to be proposed
for election as Directors by the holders of the Company's Class A Common Stock
has been coordinated by Mr. Sovern, as Chairman of the Board. Mr. Sovern has
sought and received input from the principal holder from time to time of the
Company's Class A Common Stock and has consulted with other Directors,
particularly Messrs. Ruprecht and Taubman, in identifying and considering such
nominees. The Company believes that this process has been effective in assuring
that the Company's Class A Common Stock shareholders have appropriate input into
the process of determining nominees for election as Directors who will represent
the best interests of the shareholders, as evidenced by the fact that in a
number of instances the Board has nominated for election to the Board
individuals identified by the Company's principal shareholders. Nonetheless, the
Board is in the process of reviewing this situation in light of applicable NYSE
requirements and expects to complete this review on or prior to the date of the
Meeting. By that date, the Board will also adopt corporate governance guidelines
complying with the applicable NYSE requirements.

In addition, the Board has adopted a code of ethics applicable to the
Company's Chief Executive Officer, Chief Financial Officer, Chief Accounting
Officer and other senior financial officers. This code is available on the
Company's website, www.sothebys.com. In lieu of reporting amendments to or
waivers under this code under Item 10 of SEC Form 8-K, the Company will disclose
such amendments or waivers by posting information concerning any amendment or
waiver on the Company's website, the address of which is www.sothebys.com.

For many years, the Company has had Compliance Policies applicable to all
employees. These cover such issues as ethical conduct, conflicts of interest,
maintenance of confidentiality of Company and client information and compliance
with laws, including specific policies regarding observing export/import, money
laundering, data protection and antitrust laws. The Company has an international
Compliance Department led by a Worldwide Compliance Director with responsibility
for regularly training all relevant employees about the Company's Compliance
Policies, auditing compliance with the Compliance Policies and assisting the
Company and its employees in interpreting and enforcing the Compliance Policies.
The Company is in the process of refining its existing Compliance Policies to
fully encompass and satisfy NYSE requirements, and expects to complete this
process on or prior to the date of the Meeting.

Shareholders may communicate with the Board of Directors, including the
non-management directors, by sending written communication to the directors c/o
the Company's Worldwide General Counsel, 1334 York Avenue, New York, New York
10021. All such communications will be reviewed by the Worldwide General
Counsel, or his designee, to determine which communications will be forwarded to
the directors. All communications will be forwarded except those that are
solicitations or otherwise relate to improper or irrelevant topics, as
determined in the sole discretion of the Worldwide General Counsel or his
designee. The Worldwide General Counsel shall maintain copies of all such
communications received and forwarded to the Board of Directors and shall report
to the Board on the number and nature of communications that were not determined
to be forwarded.

COMPENSATION OF EXECUTIVE OFFICERS

The following table sets forth all compensation of the Chief Executive
Officer and each of the other four most highly compensated executive officers
(collectively, the 'Named Executive Officers' and, individually, a 'Named
Executive Officer') of the Company during each of the last three years.

SUMMARY COMPENSATION TABLE

LONG TERM
COMPENSATION
ANNUAL COMPENSATION -----------------------
--------------------------------------- SHARES
OTHER ANNUAL RESTRICTED UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(2) COMPENSATION(3) STOCK(4) OPTIONS(5) COMPENSATION(6)
--------------------------- ---- -------- ---------- --------------- ---------- ---------- ---------------

William F. Ruprecht...... 2003 $500,000 $ 375,000 $ 9,408 75,000 150,000 $ 46,857
President and Chief 2002 $500,000 $4,000,000 $ 9,081 0 0 $ 64,768
Executive Officer 2001 $500,000 $ 650,000 $ 9,482 0 0 $ 76,709

Robin G. Woodhead........ 2003 $428,759 $1,268,938 $ 6,537 0 40,000 $230,024
Executive Vice 2002 $380,408 $1,080,000 $ 5,800 0 0 $163,466
President and Chief 2001 $388,278 $ 130,000 $ 5,920 0 85,000 $135,514
Executive, Sotheby's
Europe and Asia

George Bailey............ 2003 $317,079 $ 846,723 $19,612 0 75,000 $ 38,616
Managing Director, 2002 $268,773 $1,201,611 $ 9,008 0 30,000 $ 21,825
Sotheby's Europe 2001 $258,032 $ 496,700 $ 0 0 50,000 $ 13,128

Stuart N. Siegel(1)...... 2003 $330,000 $ 930,000 $12,177 0 0 $ 9,829
President and 2002 $330,000 $1,141,250 $12,176 0 0 $ 21,529
Chief Executive 2001 $330,000 $ 150,000 $12,178 0 65,000 $ 49,884
Officer Sotheby's
International Realty

Mitchell Zuckerman....... 2003 $466,250 $1,672,500 $18,000 0 40,000 $ 64,594
President, Sotheby's 2002 $385,000 $1,650,000 $18,000 0 0 $ 39,571
Financial Services, Inc. 2001 $385,000 $ 870,000 $18,000 0 35,000 $ 44,142
and Sotheby's Ventures,
LLC

------------------------

(1) Effective February 17, 2004, Mr. Siegel ceased to be an employee of the
Company when the Company sold Sotheby's International Realty.

(2) Bonus amounts in each year include cash paid in the following year in
respect of the previous year's performance. The bonus amounts disclosed in
this column for 2003 consist of a combination of normal performance bonuses,
retention bonuses paid upon each officer's remaining employed by the Company
through certain dates in 2003, and special payments to certain key
employees, as follows:

NAMED EXECUTIVE OFFICER PERFORMANCE BONUS RETENTION BONUS SPECIAL PAYMENT TOTAL
----------------------- ----------------- --------------- --------------- -----

William F. Ruprecht.... $375,000 $ 0 0 $ 375,000
Robin G. Woodhead...... $250,048 $1,018,890 0 $1,268,938
George Bailey.......... $210,874 $ 611,334 $24,515 $ 846,723
Stuart N. Siegel....... $330,000 $ 600,000 0 $ 930,000
Mitchell Zuckerman..... $157,500 $1,440,000 $75,000 $1,672,500

(3) Car allowance for Messrs. Ruprecht, Woodhead, Bailey, Siegel, and Zuckerman.

(4) Mr. Ruprecht received 75,000 shares of restricted stock under the Restricted
Stock Plan on August 5, 2003, which vest in increments of 18,750 shares on
each of August 5, 2004, August 5, 2005, August 5, 2006 and August 5, 2007.
The value of such shares of restricted stock as of December 31, 2003 was
$1,024,500, based on the closing price of Class A Common Stock on that day
of $13.66 per share.

(5) The number of shares underlying options refers to option grants under the
1997 Plan.

(6) The amounts disclosed in this column for 2003 consist of:

(a) Company contributions of the following amounts under the
Company's Retirement Savings Plan, a qualified defined
contribution plan: $ 13,083 on behalf of Mr. Ruprecht;
$9,100 on behalf of Mr. Siegel and $16,000 on behalf of Mr.
Zuckerman.
(b) Company accruals of the following amounts under the
Company's Benefit Equalization Plan, a non-qualified plan:
$26,917 on behalf of Mr. Ruprecht; and $41,400 on behalf of
Mr. Zuckerman.
(c) The following Company contributions to: (i) its U.K. Pension
Plan: $35,123 on behalf of Mr. Bailey and $17,739 on behalf
of Mr. Woodhead and (ii) a supplemental pension plan:
$207,566 on behalf of Mr. Woodhead.
(d) Company payments of life insurance premiums: $1,018 on
behalf of Mr. Ruprecht; $3,750 on behalf of Mr. Woodhead;
$850 on behalf of Mr. Bailey; $729 on behalf of Mr. Siegel
and $1,571 on behalf of Mr. Zuckerman.
(e) Financial planning services in the amounts of $5,839 and
$5,623 were provided to Mr. Ruprecht and Mr. Zuckerman,
respectively.
(f) Private health care premiums of $979 and $2,643 for Mr.
Woodhead and Mr. Bailey, respectively.

U.K. Pension Plan

Sotheby's (U.K.) maintains a funded defined benefit pension plan for its
employees who are U.K. residents. Mr. Bailey and Mr. Woodhead are the only Named
Executive Officers who participate in the plan. Mr. Bailey has twenty-four
credited years of service with the Company, and Mr. Woodhead has six credited
years of service with the Company.

Standard 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 the rate indicated above. Benefits are paid monthly
commencing at retirement, which has increased from age 60 to age 65 as of April
1, 2004, although the Company may elect to continue employment of the individual
after that date. 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

of 33 1/3% of the employee's base salary at the date of death to be paid to the
employee's spouse, or proportionately less if the employee has elected to
contribute at the reduced rate.

The table below 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 `L'97,200 and `L'99,000 for U.K. tax years 2002-2003 and 2003-2004,
respectively.

PENSION TABLE

YEARS OF SERVICE
REMUNERATION ------------------------------------------
`L' 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 20,000 26,666 33,333 40,000 46,666

Bonuses

The Company's officers are eligible to receive incentive bonuses. Bonuses
are recommended by management and approved by the Compensation Committee. Actual
awards are a function of the Company's after-tax worldwide profit and each
individual's performance. Every supervisor conducts an employee review. As part
of the review, the supervisor and the employee determine future objectives
against which the employee's performance will be measured. In addition, the
program allows the Compensation Committee the discretion to address exceptional
performance and unusual circumstances.

Benefit Equalization Plan

United States. The total annual contributions by the employee and employer
to the Company's Retirement Savings Plan, which is the Company's U.S. qualified
defined contribution plan, are subject to certain limitations imposed by the
Internal Revenue Code. Officers of the rank of senior vice president 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 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.
Amounts contributed by the Company on behalf of the Named Executive Officers of
the Company pursuant to benefit equalization agreements in 2003 have been
included in the Summary Compensation Table and are accrued for in the Company's
balance sheet.

United Kingdom. The total benefits that may be provided from the Company's
U.K. qualified defined benefit Pension Plan are subject to certain limitations
under applicable law for each participant. For Mr. Woodhead, an agreement has
been entered into whereby the maximum allowable benefit under the Plan will be
supplemented so as to provide a total pension of 2.667% of his salary for each
year of service, this pension being payable from age 60. Under the Company's
agreement with Mr. Woodhead, the intention is that one-third of this benefit
will be funded by Mr. Woodhead and two-thirds will be funded by the Company.
Retirement benefits before or after age 60, and other options that apply, will
be as far as possible identical to the normal terms of the U.K. qualified
pension plan. The Company maintains a provision on its balance sheet in an
amount sufficient to account for the difference between the aggregate value of
the benefits that would have accrued in respect of Mr. Woodhead under the U.K.
qualified plan in the absence of the limitations mentioned above and the
aggregate value of the benefits actually available in respect of Mr. Woodhead
within the U.K. qualified plan.

Employment Agreements and Related Matters

A description of certain material terms of agreements with Messrs. Bailey,
Ruprecht, Siegel, Woodhead, and Zuckerman follows below.

William F. Ruprecht. The employment agreement between the Company and Mr.
Ruprecht has a three-year term that expires on June 30, 2006, subject to earlier
termination by the Company or him under certain conditions. This agreement
replaces a previous employment agreement that was scheduled to expire on
December 31, 2003. Under Mr. Ruprecht's previous employment agreement, he was
scheduled to receive a $3,000,000 retention bonus on December 31, 2003, but he
independently declined to take this payment in light of the compensation
structure for other senior executives and economic conditions at that time.
Under Mr. Ruprecht's new employment agreement, the Company pays him a minimum
annual base salary of $500,000. If the Internal Revenue Service determines that
any employment agreement payment is subject to a federal excise tax, he is
entitled to receive reimbursement for any such tax obligation on an after-tax
basis. In partial consideration for the foregoing, he has agreed to be bound by
a covenant not to compete with the Company in certain jurisdictions until the
earlier of (i) six months after the end of his employment agreement term or
(ii) twelve months after the termination of his employment with the Company.
During the applicable non-compete period, he also has agreed not to solicit
employees of the Company or certain of its clients with whom he has had
dealings.

If the Company terminates Mr. Ruprecht's employment Without Cause, as
defined in the Agreement, or he terminates his employment for Good Reason, as
defined in the Agreement, Mr. Ruprecht will be entitled to (1) accrued but
unpaid salary through the termination date, plus three times his then-current
base salary, (2) three times his annual incentive compensation, as determined
under the terms of his agreement, and (3) health benefits for him and his family
for three years. However, if Mr. Ruprecht is eligible for payments under the
Sotheby's Inc. Severance Plan, a corresponding reduction shall occur in any
payments owed to him under clauses (1) or (2) above. Good Reason includes, among
other things, the Company's failure during any year to grant Mr. Ruprecht stock
options and/or restricted stock with a value above a certain agreed minimum
level, as determined by a nationally recognized compensation consulting firm,
the failure of the Company to offer to renew his agreement not less than six
months prior to its termination and termination of his employment between six
and twelve months following a Change of Control.

Robin G. Woodhead. Mr. Woodhead and the Company entered into an employment
agreement, dated October 24, 1997, as supplemented by letters from the Company
dated May 16, 2002 and October 16, 2000, the severance plan agreement, dated
September 28, 2000 and a retention bonus agreement dated July 17, 2001. The
retention bonus agreement between the Company and Mr. Woodhead terminated on
January 30, 2003 although certain provisions survive such termination, including
that he and the Company are each required to provide the other with six months'
notice (the 'Notice Period') that his employment with the Company will
terminate. He received a retention bonus of $1,018,890 for remaining employed by
the Company on January 30, 2003. In partial consideration for the foregoing
payments, he is bound by certain covenants not to compete with the Company in
certain jurisdictions and not to solicit employees of the Company or certain of
its clients with whom he has had dealings.

George Bailey. The two-year term of the employment agreement between the
Company and Mr. Bailey expired on February 12, 2003. By the agreement's terms,
however, the minimum base salary, undertakings and non-compete provisions
described below do survive the end of the term. He and the Company are each
required to provide the other with six months' notice (the 'Notice Period') that
his employment with the Company will terminate. The Company paid him a retention
bonus of $611,334 on January 15, 2003 for remaining employed by the Company on
such date. In partial consideration for the foregoing payments, he is bound by
certain covenants not to compete with the Company in certain jurisdictions and
not to solicit employees of the Company or certain of its clients with whom he
has had dealings.

Stuart N. Siegel. The employment agreement between Sotheby's, Inc. (referred
to as the 'Company' in this paragraph) and Mr. Siegel terminated in February,
2004 as Mr. Siegel was hired at that time by the purchaser of Sotheby's
International Realty, Inc., of which he was President. Under the expired
agreement, the Company paid him a minimum annual base salary of $330,000.
Pursuant to that

agreement, he received retention bonuses of $300,000 on January 15, 2003,
$300,000 on July 15, 2003 and $400,000 on January 15, 2004. In partial
consideration for the foregoing payments, he had agreed to be bound by certain
covenants not to compete and non-solicitation covenants.

Mitchell Zuckerman. The two-year term of the employment agreement between
the Company and Mr. Zuckerman expired on February 5, 2003. By the agreement's
terms, however, the minimum base salary, undertakings and non-compete provisions
described below do survive the end of the term. He and the Company are each
required to provide the other with six months' notice (the 'Notice Period') that
his employment with the Company will terminate. The Company paid him a retention
bonus of $1,440,000 on January 15, 2003 for remaining employed by the Company on
such date. In partial consideration for the foregoing payments, he is bound by
certain covenants not to compete with the Company in certain jurisdictions and
not to solicit employees of the Company or certain of its clients with whom he
has had dealings.

STOCK OPTIONS

The following tables set forth information regarding option grants under the
Company's 1997 Plan to the Named Executive Officers with respect to 2003.

OPTION GRANTS IN 2003

INDIVIDUAL GRANTS POTENTIAL REALIZABLE
-------------------------------------------------------------------- VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF STOCK
SHARES TOTAL OPTIONS FAIR MARKET PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE VALUE OF OPTION TERM(6)
OPTIONS EMPLOYEES IN PRICE UNDERLYING EXPIRATION ----------------------------
GRANTED(1) 2003(3) PER SHARE(4) SHARES DATE(5) 0% 5% 10%
---------- ------- ------------ ------ ------- -- -- ---

William F. Ruprecht... 150,000(2) 15.96% $8.65 $8.65 8/5/13 $ 0 $715,348 $1,761,937
Robin Woodhead........ 40,000(2) 4.26% $8.65 $8.65 8/5/13 $ 0 $190,760 $ 469,850
George Bailey......... 75,000(2) 7.98% $8.65 $8.65 8/5/13 $ 0 $357,674 $ 880,969
Stuart N. Siegel...... None N.A. N.A. N.A. N.A. N.A. N.A. N.A.
Mitchell Zuckerman.... 40,000(2) 4.26% $8.65 $8.65 8/5/13 $ 0 $190,760 $ 469,850

------------------------

(1) All 2003 grants were made under the 1997 Plan.

(2) These options will vest and become exercisable to the extent of one-fourth
of the number of shares subject to the option on each of the first, second,
third, and fourth anniversaries of the date of the grant.

(3) This figure is calculated by dividing the total number of options granted to
the individual under the 1997 Plan by the total number of options granted to
all employees under that plan.

(4) The exercise price of each option under the 1997 Plan is the fair market
value of the underlying shares as of the date of grant. Only options to
purchase Class B Common Stock may be granted under the 1997 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, for purposes of the 1997
Plan, the fair market value of the stock underlying an option is the NYSE
closing price per share of the Class A Common Stock on the last business day
before the option grant.

(5) All options will vest immediately upon a 'change in control' (as defined in
the 1997 Plan). Generally, the exercise of awards made to executive officers
of the Company under the 1997 Plan in 2003 and the continued eligibility for
such awards under the 1997 Plan, are subject to such executive officer's
agreement to provide six (6) months' notice of any voluntary termination of
employment, and not to compete with the Company in the auction business for
a period of six (6) months following the date of termination. With respect
to covenants not to compete for certain of the Named Executive Officers, see
'Compensation of Executive Officers - Employment Agreements and Related
Matters' above.

(6) 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 is ten (10) years for options
granted under the 1997 Plan to the Named Executive Officers, as indicated in
the 'Expiration Date' column. 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.

AGGREGATE OPTION EXERCISES IN 2003 AND YEAR-END OPTION VALUES

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END
ACQUIRED ON VALUE ----------------------------- -----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------

William F. Ruprecht.... 0(1) $0 551,000 489,000 $ 19,495 $751,500
0(2) $0 25,000 0 $249,250 $ 0

Robin G. Woodhead...... 0(1) $0 365,000 110,000 $ 48,400 $273,000

George Bailey.......... 0(1) $0 302,200 131,800 $ 0 $375,750

Stuart N. Siegel....... 0(1) $0 250,800 16,400 $ 5,570 $ 0

Mitchell Zuckerman..... 0(1) $0 312,333 123,000 $ 19,945 $200,400

------------------------

(1) Information in this row concerns option grants under the 1987 Plan and the
1997 Plan only.

(2) Information in this row concerns option grants under the Performance Plan
only. Such options are for the purchase of Class B Common Stock, which is
freely convertible into Class A Common Stock. These Performance Plan options
have a ten (10) year term, vested as a result of the fulfillment of time
vesting and performance target criteria and have an exercise price per
option of twenty five percent (25%) of the NYSE closing price per share of
the Class A Common Stock (as there is no public market in the Class B Common
Stock) on the last business day before the option grant. The actual value
that may be realized by Mr. Ruprecht will depend on the closing price of the
Class A Common Stock on the NYSE on the day preceding the exercise date.
Since 1998, the Company has discontinued granting options under the
Performance Plan because it became apparent that most of the granted
Performance Plan options would not meet the performance criteria for
vesting. The Company does not expect to grant any further options under the
Performance Plan. Information regarding the Performance Plan is included in
the Proxy Statement to describe the terms of the vested but unexercised
25,000 Performance Plan options owned by Mr. Ruprecht.

REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee is responsible to the Board of Directors for
advising the Board with respect to compensation matters and employee benefit
plans of the Company. The Section 162(m) Sub-Committee was established for
purposes of granting options and administering performance criteria with respect
to Named Executive Officers under the 1997 Plan and the Performance Plan and
awarding restricted stock under the Restricted Stock Plan. The Compensation
Committee has authority to grant restricted stock under the Restricted Stock
Plan and options under the 1997 Plan. to all individuals other than the Named
Executive Officers. As of December 31, 2003, except for the 1998 Stock
Compensation Plan for Non-Employee Directors, none of the members of the
Compensation Committee or the Section 162(m) Sub-Committee participated in any
of the plans administered by the committee or the sub-committee.

PHILOSOPHY

The Company has a long-standing philosophy of establishing compensation
levels that are designed to both attract and retain executives with outstanding
leadership ability and experience and be competitive in the market. Compensation
for executive officers has been comprised of three major components: salary,
cash bonuses and equity-based incentives.

The Compensation Committee considers the following factors in determining an
executive officer's total compensation, including equity-based incentives:
(i) Company performance, (ii) individual performance and job responsibilities,
(iii) historical compensation levels and restricted stock and option grants by
the Company and (iv) recommendations of management.

COMPENSATION DEDUCTIBILITY

The Compensation Committee has taken into consideration Section 162(m) of
the Internal Revenue Code of 1986, as amended (the 'Code'), and related
regulations as they relate to compensation paid to the Named Executive Officers.
In order to preserve the deductibility for federal income tax purposes of
certain compensation in excess of $1 million that may be paid to a Named
Executive Officer, the applicable requirements of Section 162(m) of the Code
('Section 162(m)') have been incorporated into the Restricted Stock Plan, the
1997 Plan and the Performance Plan. With respect to the Named Executive
Officers, the Section 162(m) Sub-Committee, comprised solely of three outside
directors (as defined in Section 162(m)), establishes option grants and
otherwise takes actions relating to the Named Executive Officers under the
Restricted Stock Plan, to the extent that a restricted stock award would be
eligible for the described deductibility, the 1997 Plan and the Performance
Plan.

ANNUAL COMPENSATION

Salary

The Compensation Committee sets base salaries for executives that both
reflect the job responsibilities of each individual and are consistent with base
salaries paid for competitive positions in the market.

Annual Cash Incentives

The Company's bonus program for all bonus-eligible employees, including the
Chief Executive Officer ('CEO') and the other Named Executive Officers, is based
upon the achievement of both Company and individual objectives. Positions within
the Company have been separated into salary grades, with bonus opportunities
gradually increased through the grades. Within each grade there is a range of
bonus targets. The bonus amount is subject to the overall approval of the
Compensation Committee with respect to all participants, and to the specific
approval of the Compensation Committee with regard to senior management. Targets
are set each year by senior management. Targets and bonus opportunities are
communicated to employees each year.

The Company has an annual employee review process. As part of the review,
the supervisor and the employee will determine future objectives against which
the employee's performance will be measured. A certain percentage of an
employee's bonus target is based upon individual performance; the remaining
percentage is based on worldwide Company performance. If all objectives are met,
the employee can receive up to 100% of the bonus target amount. If performance
exceeds the established objectives, the Compensation Committee has the
discretion to address such circumstances.

Although the Company did not achieve its 2003 worldwide performance target,
certain operating units did achieve their performance targets. 2003 bonuses were
awarded to reflect unit and individual performance based upon objectives
established at the beginning of the year.

LONG-TERM COMPENSATION

Stock Options and Restricted Stock

The purpose of the Restricted Stock Plan and the 1997 Plan is to provide
employees with long-term incentives that link their interests with the interests
of shareholders. In addition, the 1997 Plan's and the Restricted Stock Plan's
vesting schedules encourage key employees to continue in the employment of the
Company. Since 1998, the Company has discontinued granting options under the
Performance Plan because it became apparent that most of the granted Performance
Plan options would not meet the performance criteria for vesting. The Company
does not expect to grant any further options under the Performance Plan.

Restricted stock and stock option and restricted stock grants to the Named
Executive Officers are based on each individual's current and expected future
contribution to the Company, as well as competitive market practice and related
factors listed above.

CEO COMPENSATION

The Section 162(m) Sub-Committee and the Compensation Committee meet,
independently of the Board, to review the CEO's performance, determine annual
and long-term compensation for the CEO, and set the CEO's bonus target.

THE COMPENSATION COMMITTEE
MAX M. FISHER, CHAIRMAN
THE MARQUESS OF HARTINGTON
JEFFREY H. MIRO
DONALD M. STEWART
ROBERT S. TAUBMAN

REPORT OF THE AUDIT COMMITTEE

The audit committee of the Board of Directors of the Company is composed of
four independent directors, each of whom meets the criteria for 'independence'
under applicable New York Stock Exchange rules, and operates under a written
charter adopted by the Board of Directors which has been revised to reflect
recent corporate governance developments. The Company's management is
responsible for its internal accounting controls and for preparing the Company's
financial statements. The Company's independent accountants, Deloitte & Touche
LLP, are responsible for performing an independent audit of the Company's
consolidated financial statements in accordance with auditing standards
generally accepted in the United States and to issue a report thereon.

The audit committee has reviewed and discussed the Company's audited
consolidated financial statements with management. In addition, the audit
committee has discussed with the Company's independent accountants the matters
required to be discussed by Statement on Auditing Standards No. 61,
'Communications with Audit Committees.' The audit committee has received the
written disclosures and the letter from the independent accountants required by
Independence Standards Board Standard No. 1, 'Independence Discussions with
Audit Committees,' and has discussed with the independent accountants their
independence and concluded that the independent accountants are independent
under such Standard.

Based on the audit committee's discussions with management and the
independent accountants and the audit committee's review of the report of the
independent accountants, the audit committee recommended to the Board of
Directors that the audited consolidated financial statements be included in the
Company's Annual Report on Form 10-K for the year ended December 31, 2003 for
filing with the SEC.

This report is respectfully submitted by the Audit Committee of the Board of
Directors.

STEVEN B. DODGE (CHAIRMAN)
LORD BLACK OF CROSSHARBOUR
MICHAEL BLAKENHAM
SHARON PERCY ROCKEFELLER

PERFORMANCE GRAPH

The following graph compares the Company's cumulative total shareholder
return on its Class A Common Stock (for the five year period from December 31,
1998 to December 31, 2003) with the cumulative return of the Standard & Poor's
MidCap 400 Stock Index ('S&P Midcap 400') and the Company's Peer Group ('Peer
Group').

The Company and Christie's International ('Christie's') are the two largest
art auction houses in the world. Based on the unique nature of the international
art auction business, Christie's was historically deemed to be the Company's
most appropriate peer for Performance Graph purposes. However, during 1998
Christie's was taken private. As a result, in 1999, the Company created a new
peer group consisting of: The Neiman-Marcus Group, Inc.; Nordstrom, Inc.; Saks
Holdings, Inc.; and Tiffany & Co. The Company believes the members of this peer
group to be purveyors of luxury goods appealing to a segment of the population
consistent with the Company's own clientele.

The graph reflects an investment of $100 in the Company's Class A Common
Stock, the S&P MidCap 400, which includes the Company, and the Company's Peer
Group, respectively, on December 31, 1998, and a reinvestment of dividends at
the average of the closing stock prices at the beginning and end of each
quarter.

[GRAPHIC]

12/31/98 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03
-------- -------- -------- -------- -------- --------

Sotheby's.............................. $100 $ 94.60 $ 73.12 $ 52.38 $ 28.38 $ 43.08
Peer Group............................. $100 $145.73 $118.32 $115.17 $101.23 $181.73
S&P MidCap 400......................... $100 $114.74 $134.81 $134.04 $114.42 $155.18

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

As of December 31, 2003, the Compensation Committee of the Company consisted
of Max M. Fisher, The Marquess of Hartington, Jeffrey H. Miro, Donald M. Stewart
and Robert S. Taubman. In 2003, the Company retained, and continues to retain in
2004, the law firm of Miro Weiner & Kramer, of which Mr. Miro is Chairman.

CERTAIN COMPENSATION ARRANGEMENTS

The Company is paying Mr. Sovern $310,000 for his fifth year of service as
Chairman of the Board and as a director of the Company. This amount is payable
in equal monthly installments, but will be paid in full in the event of a change
in control of the Company or his being terminated without cause prior to
February 21, 2005. See 'Compensation of Directors.' Mr. Sovern also received
$100,000 in February 2003 upon the third anniversary of his becoming Chairman of
the Board of the Company.

The Marquess of Hartington, the Deputy Chairman of the Company, provides
consulting services to the Company and is paid `L'65,000 per year for such
services.

The Company retains the law firm of Miro Weiner & Kramer, of which Jeffrey
H. Miro is Chairman, to provide legal services to the Company.

CERTAIN TRANSACTIONS

From time to time, officers, directors and principal shareholders of the
Company and members of their immediate families purchase or sell property
through the Company at public auction or in private transactions in the ordinary
course of business.

COMPENSATION OF DIRECTORS

During 2003, each non-employee director generally received a fee of $1,000
for each Board meeting attended by such director, and a fee of $500 ($1,000 for
each Executive Committee member) for each committee meeting ($1,000 for the
chairman of the committee) attended by such director, in addition to
reimbursement of expenses. All of the foregoing fees were paid in cash. Because
Mr. Sovern receives his director compensation under his contract, he is not paid
customary board or committee fees, except with respect to his membership on the
Special Committee. Pursuant to the Sotheby's Holdings, Inc. 1998 Stock
Compensation Plan For Non-Employee Directors, with respect to Board service
during 2003, each non-employee director (other than Mr. Sovern) received 2,260
shares of Class A Common Stock and/or deferred stock compensation units
equivalent to such shares, if so elected by a director, and will continue to
receive such stock compensation until the director terminates service on the
Company's Board. All deferred stock compensation units will accrue dividend
equivalents.

INDEPENDENT AUDITORS

Deloitte & Touche LLP has been the independent auditors for the Company
since 1983. The Audit Committee of the Board of Directors has selected Deloitte
& Touche LLP as the independent auditors for 2004. Although shareholder approval
of the appointment is not required by law and is not binding on the Audit
Committee, the Committee will take the appointment of Deloitte & Touche LLP
under advisement if such appointment is not approved by the affirmative vote of
a majority of the votes cast at the Meeting.

The Company expects that representatives of Deloitte & Touche LLP will be
present at the Meeting and will be afforded an opportunity to make a statement
if they desire to do so. The Company also expects such representatives of
Deloitte & Touche LLP to be available at that time to respond to appropriate
questions addressed to the officer presiding at the Meeting.

The following table summarizes the aggregate fees billed to Sotheby's
Holdings, Inc. by Deloitte & Touche LLP, the member firms of Deloitte Touche
Tohmatsu, and their respective affiliates (collectively, the 'Deloitte
Entities') for the years ended December 31, 2003 and 2002:

2003 2002
---- ----

Audit Fees(a)............................................... $1,624,469 $1,307,775
Audit-Related Fees(b)....................................... 439,713 159,000
Tax Fees(c)................................................. 445,298 699,620
All Other Fees.............................................. 0 0
---------- ----------
Total................................................... $2,509,480 $2,166,395
---------- ----------
---------- ----------

------------------------

(a) Fees for audit services billed in 2003 and 2002 consisted of: the audit of
the Company's annual financial statements (which included discontinued
operations for 2003), including statutory and regulatory audits; reviews of
the Company's quarterly financial statements; and consents and other
services related to SEC matters.

(b) Fees for audit-related services billed in 2003 and 2002 consisted of:
financial accounting and reporting consultations, consultation and advisory
services related to Section 404 of the Sarbanes-Oxley Act and employee
benefit plan audits.

(i) Fees for tax compliance services totaled $327,852 and $472,209 in 2003
and 2002, respectively. Tax compliance services are services rendered,
based upon facts already in existence or transactions that have already
occurred, to document and compute amounts to be included in tax filings
and consisted of: Federal, state and local income tax return assistance;
sales and use tax assistance, property and other tax return assistance;
assistance with tax return filings in certain foreign jurisdictions;
transfer pricing documentation and assistance with tax audits and
appeals.

(ii) Fees for tax planning and advice services totaled $117,446 and $227,411
in 2003 and 2002, respectively. Tax planning and advice are services
rendered with respect to proposed transactions or that alter a
transaction to obtain a particular tax result. Such services consisted
of tax advice related to: the Company's sale of Sotheby's International
Realty, the alteration of employee benefit plans and an intra-group
restructuring.

2003 2002
---- ----

Ratio of Tax Planning and Advice Fees and All Other Fees to
Audit Fees, Audit-Related Fees and Tax Compliance Fees.... 0.05:1 0.12:1

In considering the nature of the services provided by the Deloitte Entities,
the Audit Committee determined that such services are compatible with the
provision of independent audit services. The Audit Committee discussed these
services with the independent auditor and Company management to determine that
they are permitted under the rules and regulations concerning auditor
independence promulgated by the SEC to implement the Sarbanes-Oxley Act of 2002,
as well as the American Institute of Certified Public Accountants.

The Audit Committee has established a policy requiring the pre-approval of
all audit and non-audit services provided to the Company by the Deloitte
Entities. The policy provides for pre-approval of audit, audit-related and tax
services specified by the Audit Committee. The Audit Committee may delegate to
one or more of its members authority to pre-approve permitted services,
consisting of Audit Services, Audit-Related Services and Tax Services. Any
pre-approval decision made by such designated member(s) shall be reported to the
Audit Committee at its next regularly scheduled meeting.

PROPOSALS OF SECURITY HOLDERS

Any shareholder proposal intended to be presented for consideration at the
annual meeting to be held in 2005 must be received by the Company at 38500
Woodward Avenue, Suite 100, Bloomfield Hills, Michigan 48304 by the close of
business on December 18, 2004. If the date of such meeting is changed by more
than 30 days from the date such meeting is scheduled to be held, the proposal
must be received by the Company at a reasonable time before the solicitation of
proxies for such meeting is made. Proposals should be sent to the attention of
the Secretary. A person may submit only one proposal for

inclusion in the proxy materials, and under certain circumstances enumerated in
the Securities and Exchange Commission's rules relating to the solicitation of
proxies, the Company may be entitled to omit the proposal and any statement in
support thereof (which in the aggregate may not exceed 500 words in length) from
its proxy statement and form of proxy.

COSTS OF PROXY SOLICITATION

The cost of preparing, assembling and mailing the proxy material will be
borne by the Company. The Company will also request persons, firms and
corporations holding shares in their names or in the names of their nominees,
which shares are beneficially owned by others, to send the proxy material to,
and to obtain Proxies from, such beneficial owners and will reimburse such
holders for their reasonable expenses in doing so.

The Board of Directors recommends a vote FOR Proposals 1 and 2. If no direction is given, the Please [ ]
shares will be voted FOR Proposals 1 and 2. Mark Here
for Address
Such shares will be voted in the proxies' discretion upon such other business as may properly Change or
come before the meeting. Comments
SEE REVERSE SIDE

1. Election of Directors Election by Holders of Class A Limited Voting Common Stock of 01 Steven B. Dodge 02
Sharon Percy Rockefeller and 03 Donald M. Stewart as directors.

FOR all Nominees WITHHOLD
listed (except as AUTHORITY
marked to the to vote for all To withhold authority to vote for any individual nominee, write that nominee's name
contrary at right) Nominees on the space provided below
[ ] [ ]
_____________________________________________________________________________________

2. Ratification of the appointment of Deloitte & Touche LLP
as independent auditors for 2004.

FOR AGAINST ABSTAIN
[ ] [ ] [ ] Please sign exactly as name appears hereon and date. When
shares are held by joint tenants, both should sign. When
signing as attorney, executor, administrator, trustee, or
guardian, please give full title as such. If a corporation,
please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in full
partnership name by authorized person.

--------------------------------------------------------------
Signature

--------------------------------------------------------------
Signature if held jointly

Dated: , 2004
-------------------------------------------------

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
CARD PROMPTLY USING THE ENCLOSED POSTAGE-
PAID ENVELOPE.

-------------------------------------------------------------------------------------------------------------------------------

[TRIANGLE] FOLD AND DETACH HERE [TRIANGLE]

Dear Shareholders of Sotheby's Holdings, Inc.

Enclosed you will find material regarding the Company's 2004 Annual Meeting
of Shareholders. The notice of the Annual Meeting and proxy statement
describe the formal business to be transacted at the meeting, as summarized
on the attached proxy card.

Whether or not you expect to attend the Annual Meeting, please complete and
return promptly the attached proxy card in the accompanying envelope, which
requires no postage if mailed in the United States. As a shareholder,
please remember that your vote is important to us. We look forward to
hearing from you.

For Certain Sotheby's Employees Who Are Retirement Savings Plan
Participants: The attached proxy card covers all shares for which you have
the right to give voting instructions to Vanguard Fiduciary Trust Company,
Trustee of the company's Retirement Savings Plan (the "Plan"). The attached
proxy card, when properly executed, will be voted as directed as long as
the proxy card is received by Mellon Investor Services no later than May 3,
2004. If no direction is given to the Trustee by such date, the Trustee
will vote your shares held in the Plan in the same proportion as votes
received from other participants in the Plan.

SOTHEBY'S HOLDINGS, INC.
CLASS A LIMITED VOTING COMMON STOCK
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS - MAY 7, 2004

The undersigned hereby appoints each of MICHAEL I. SOVERN and WILLIAM F.
RUPRECHT, with full power of substitution, to represent the undersigned at the
annual meeting of shareholders of Sotheby's Holdings, Inc., on Friday, May 7,
2004, at the office of Sotheby's, Inc., 1334 York Avenue, New York, New York, at
10:30 a.m., local time, and at any adjournment thereof, and to vote at such
meeting the shares of Class A Limited Voting Common Stock that the undersigned
would be entitled to vote if personally present in accordance with the
following instructions and to vote in their judgment upon all other matters
which may properly come before the meeting and any adjournment thereof.

If at least one of the above named Proxies shall be present in person or by
substitution at such meeting or at any adjournment thereof, said Proxy or
Proxies, as the case may be, so present and voting, either in person or by
substitution, shall exercise all of the powers hereby given. The undersigned
hereby revokes any proxy heretofore given to vote at such meeting.

(Continued and to be SIGNED and dated on the reverse side.)

--------------------------------------------------------------------------------
Address Change/Comments (Mark the corresponding box on the reverse side)
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
[TRIANGLE] FOLD AND DETACH HERE [TRIANGLE]

The Board of Directors recommends a vote FOR Proposals 1 and 2. If no direction is given, the shares Please [ ]
will be voted FOR Proposals 1 and 2. Mark Here
for Address
Such shares will be voted in the proxies' discretion upon such other business as may properly come before Change or
the meeting. Comments
SEE REVERSE SIDE

1. Election of Directors Election by Holders of Class B Common Stock of 01 Michael Blakenham 02 Max M.
Fisher 03 The Marquess of Hartington 04 Jeffrey H. Miro 05 William F. Ruprecht 06
FOR all Nominees WITHHOLD Michael I. Sovern 07 Robert S. Taubman and 08 Robin G. Woodhead as directors.
listed (except as AUTHORITY
marked to the to vote for all To withhold authority to vote for any individual nominee, write that nominee's
contrary at right) Nominees name on the space provided below
[ ] [ ]
___________________________________________________________________________________

2. Ratification of the appointment of
Deloitte & Touche LLP as independent
auditors for 2004.

FOR AGAINST ABSTAIN Please sign exactly as name appears hereon and date. When
[ ] [ ] [ ] shares are held by joint tenants, both should sign. When
signing as attorney, executor, administrator, trustee, or
guardian, please give full title as such. If a corporation,
please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in full
partnership name by authorized person.

--------------------------------------------------------------
Signature

--------------------------------------------------------------
Signature if held jointly

Dated: , 2004
-------------------------------------------------

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED POSTAGE-PAID ENVELOPE.

-------------------------------------------------------------------------------------------------------------------------------

[TRIANGLE] FOLD AND DETACH HERE [TRIANGLE]

Dear Shareholders of Sotheby's Holdings, Inc.

Enclosed you will find material regarding the Company's 2004 Annual Meeting of
Shareholders. The notice of the Annual Meeting and proxy statement describe the
formal business to be transacted at the meeting, as summarized on the attached
proxy card.

Whether or not you expect to attend the Annual Meeting, please complete and
return promptly the attached proxy card in the accompanying envelope, which
requires no postage if mailed in the United States. As a shareholder, please
remember that your vote is important to us. We look forward to hearing from you.

SOTHEBY'S HOLDINGS, INC.
CLASS B COMMON STOCK
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS - MAY 7, 2004

The undersigned hereby appoints each of MICHAEL I. SOVERN and WILLIAM F.
RUPRECHT, with full power of substitution, to represent the undersigned at the
annual meeting of shareholders of Sotheby's Holdings, Inc., on Friday, May 7,
2004, at the office of Sotheby's, Inc., 1334 York Avenue, New York, New York, at
10:30 a.m., local time, and at any adjournment thereof, and to vote at such
meeting the shares of Class B Common Stock that the undersigned would be
entitled to vote if personally present in accordance with the following
instructions and to vote in their judgment upon all other matters which may
properly come before the meeting and any adjournment thereof.

(Continued and to be SIGNED and dated on the reverse side.)

--------------------------------------------------------------------------------
[TRIANGLE] FOLD AND DETACH HERE [TRIANGLE]

STATEMENT OF DIFFERENCES
------------------------

The British pound sterling sign shall be expressed as.................. 'L'
The dagger symbol shall be expressed as................................ 'D'