EXHIBIT 10.1

Severance Agreement

As of January 22, 2007

Mr. Bruno Vinciguerra

Dear Bruno:

     We are pleased that you are joining Sotheby’s as Executive Vice President,
Global Director of New Initiatives, on the terms set forth in our offer letter
dated January 9, 2007 (the “Offer Letter”). This letter sets forth our
understanding and agreement (the "Agreement") with respect to your rights and
obligations in the event of the termination of your employment with Sotheby’s
(together with all of its subsidiaries and related entities, “Sotheby’s” or the
“Company”). This Agreement is being provided to you because you are a key
employee at the Company and perform highly specialized and unique duties for the
Company. Consequently, Sotheby’s is offering you the following terms and
financial enhancements and those set forth in the Offer Letter to ensure your
continued loyalty to the Company, and so that you will focus fully and
exclusively on your job duties at Sotheby’s. Defined terms used herein are used
with the meanings given to them in Exhibit A.

(1)      Severance Arrangements.           a)      If at any time from the date
hereof through December 31, 2008 (the “Applicable Period”), your employment by
the Company is terminated by you for Good Reason or by the Company without
Cause, the Company shall pay or provide you with the following:             (i)
The sum of your base salary through the date of termination to the extent not
theretofore paid, any declared and earned but unpaid bonus amount for the prior
calendar year and reimbursement for any unreimbursed expenses incurred through
the date of termination (“Accrued Obligations”); and             (ii)
$1,000,000, which amount shall be in lieu of any other payment to

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    which you might otherwise be entitled under the Company’s Severance Plan.  
      b)      If during the Applicable Period your employment by the Company is
terminated by the Company for Cause, this Agreement shall terminate without
further obligation to you, except that the Company shall pay or provide you with
the sum of your base salary through the date of termination to the extent not
theretofore paid. You will not be eligible for any bonus for any period prior to
or after the date of termination of your employment.     c)      Any payments
payable pursuant to this Paragraph 1 beyond Accrued Obligations shall only be
payable if you deliver to the Company a release, as similarly required under the
Sotheby’s, Inc. Severance Plan, of any and all your claims (except with regard
to claims for payments or benefits specifically payable or providable hereunder
which are not yet paid as of the effective date of the release, claims for
vested accrued benefits, claims under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”), or claims relating to any
rights of indemnification under the Company’s certificate of incorporation or
by-laws or claims under any directors and officers liability insurance policy)
occurring up to the release date with regard to the Company and its respective
past or present officers, directors and employees in such form as may be
reasonably requested by the Company.   (2)    Certain Agreements. In
consideration of the undertakings by the Company in Paragraph (1) and in the
Offer Letter, you agree to be bound by the covenants and agreements set forth in
Exhibit B.   (3) Miscellaneous. You may not assign your rights or delegate your
obligations under this Agreement. Sotheby’s shall be entitled to withhold from
any payments or deemed payments under this Agreement any amount of withholding
required by law. This Agreement constitutes the entire agreement between you and
Sotheby’s concerning the subject matter of your employment, with the exception
of letters and documents specifically referenced herein. Any waiver or amendment
of any provision of this Agreement must be done in writing and signed by both
parties.   (4) Legal and Equitable Remedies. Sotheby’s shall be entitled to
enjoin a violation by you of any provision hereof. Moreover, the parties hereto
acknowledge that the damages suffered by Sotheby’s as a result of any violation
of this Agreement may be difficult to ascertain. Accordingly, the parties agree
that in the event of a breach of this Agreement by you, Sotheby’s shall be
entitled to specific enforcement by injunctive relief of your obligations to
Sotheby’s. The remedies referred to above shall not be deemed to be exclusive of
any other remedies available to Sotheby’s, including to enforce the performance
or observation of the covenants and agreements contained in this Agreement.  

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(5)      Arbitration. Any dispute, controversy or claim arising out of or
relating to this agreement, or breach thereof (other than an action or
proceeding for an injunction or other equitable relief pursuant to Paragraph 4
hereof), shall be settled by arbitration in New York City in accordance with the
National Rules for the Resolution of Employment Disputes of the American
Arbitration Association by a single arbitrator. The arbitrator’s award shall be
final and binding upon both parties, and judgment upon the award may be entered
in any court of competent jurisdiction in any state of the United States or
country or application may be made to such court for a judicial acceptance of
the award and such enforcement as the law of such jurisdiction may require or
allow.   (6)      Severability. If at any time there is a judicial determination
by any court of competent jurisdiction that any provision of this Agreement is
unenforceable against you, the other provisions of this Agreement shall not be
rendered void but shall be deemed amended to apply as to such maximum extent as
the court may judicially determine or indicate to be enforceable under New York
law.   (7)      Choice of Law/Choice of Forum. This Agreement shall be governed
by, construed and enforced in accordance with the laws of the State of New York
irrespective of the principles of conflicts of law, and you consent to the
jurisdiction of the state and federal courts situated in New York City for the
purpose of adjudicating any dispute relating to this Agreement.   (8)     
Binding on Successor Company. This Agreement shall remain in effect and be
binding upon any successor or assign of Sotheby’s including any entity that
(whether directly or indirectly, by purchase, merger, reorganization,
consolidation, acquisition of property or stock, liquidation or otherwise) is
the survivor of the Company or that acquires the Company and/or substantially
all the assets of the Company, and such successor entity shall be deemed the
“Company” for purposes of this Agreement.   (9)      Notices. For the purpose of
this Agreement, notices and all other communications provided for in this
Agreement shall be in writing and shall be delivered personally or mailed by
United States certified or registered mail, return receipt requested, postage
prepaid, addressed to you at the address set forth on the initial page of this
Agreement and to the Company at Sotheby’s, 1334 York Avenue, New York, New York
10021, Attention: General Counsel, or to such other address as either party may
have furnished to the other in writing in accordance herewith. Any such notice
shall be deemed given when so delivered personally, or, if mailed, five (5) days
after the date of deposit in the United States mail, except that notice of
change of address shall be effective only upon receipt.  

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Please review this Agreement carefully and, if it correctly states our
agreement, sign and return to me the enclosed copy.

 

Very truly yours,

SOTHEBY’S
 

    By: /s/Susan Alexander
Susan Alexander
Executive Vice President and
Worldwide Head of Human Resources

Read, accepted and agreed to this
25th day of January, 2007

/s/ Bruno Viniciguerra
Bruno Vinciquerra

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EXHIBIT A

DEFINITIONS

“Cause” shall mean and be limited to:

  a)      conviction of a felony crime,     b)      fraud, willful malfeasance,
gross negligence, or any other act in connection with performance of your duties
which is materially injurious to the Company.  

“Good Reason” shall mean the occurrence of any of the following events:

  a)      failure by the Company to pay you a base salary of not less than
$450,000, reduction of your annual incentive bonus target below $300,000 or
discontinuance of your participation in Sotheby’s Executive Bonus Plan or a
comparable plan which pays out based on the Company’s meeting certain financial
performance goals determined annually by the Compensation Committee;     b)     
your being required to relocate to a principal place of business more than fifty
(50) miles outside New York, New York without your express consent;     c)     
any action by the Company that results in a material diminution in your position
without your express consent (except in connection with the termination of your
employment for Cause or as a result of your death or Permanent Disability or
temporarily as a result of your illness or other absence); and     d)     
failure of the Company to maintain directors and officers liability insurance
for your benefit on a basis no less favorable than the basis on which it
generally maintains such insurance for the benefit of other senior executives of
the Company.         provided, however, that the Company shall have thirty (30)
days following the receipt of notice from you of the existence of circumstances
constituting Good Reason to correct such circumstances.

“Permanent Disability” shall mean, and be limited to, any physical or mental
illness, disability or impairment that has prevented you from continuing the
performance of your normal duties and responsibilities hereunder for a period in
excess of six (6) consecutive months.

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EXHIBIT B

CERTAIN AGREEMENTS

Notice, Non-Compete and Non-Solicitation Agreement.

You agree to give the Company not less than six months notice prior to
termination of your employment without Good Reason.

Because of the importance of confidentiality, and because you will have
specialized, unique confidential knowledge vital to the Company, you agree that
during the Restricted Period (defined below), you will not, without the consent
of the Company, directly or indirectly, in New York, Paris, London or Hong Kong
engage directly or indirectly in the live or on-line Art Auction Business or in
any other business in which the Company is engaged or is actively seeking to be
engaged as of the time that your employment terminates, whether such engagement
by you is as an officer, director, proprietor, employee, partner, owner,
consultant, advisor, agent, sales representative or other participation. For
purposes of this Agreement, the Art Auction Business involves auctions of the
property in the collecting categories that the Company offers for sale in its
core business at the time of termination. For purposes of this Agreement, the
“Restricted Period” is during the course of your employment and the earlier of
(i) six months after the end of the Applicable Period or (ii) twelve (12) months
after the termination of your employment.

In addition to the foregoing, during the Restricted Period, you agree that you
will not, either alone or in concert with others, and will not cause another to,
in any such case directly or indirectly, hire, recruit, solicit or induce any
Sotheby’s employees to terminate their employment with Sotheby’s.

If at any time there is a judicial determination by any court of competent
jurisdiction that the time period, geographical scope, or any other restriction
contained in this Agreement is unenforceable against you, the provisions of this
Agreement shall not be deemed void but shall be deemed amended to apply as to
such maximum time period, geographical scope and to such other maximum extent as
the court may judicially determine or indicate to be enforceable.

Confidentiality Agreement.

As a condition to your continued employment by the Company, you shall be bound
by the Company’s Confidentiality Agreement and Compliance Policies, including
its Auction Rules, Code of Business Conduct and Ethics, Conflicts of Interest
Policy and House Rules (collectively, the “Rules and Policies”).

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