Document:

Exhibit 10(b)

                              EMPLOYMENT AGREEMENT

            AGREEMENT (the "Agreement") dated as of July 10, 2001, by and
between Sotheby's Holdings, Inc. (the "Company" or "Sotheby's") and William F.
Ruprecht (the "Executive").

                              W I T N E S S E T H :

            WHEREAS, the Company desires to continue to employ the Executive
under the terms and conditions specified herein, and the Executive desires to be
so employed by the Company.

            NOW, THEREFORE, in consideration of the mutual promises and
conditions herein set forth, the parties hereto agree as follows:

            1. TERM. The term of this Agreement (the "Term") shall commence on
January 1, 2001 and shall continue, unless terminated in accordance with
Paragraph 4 herein or as otherwise provided in this Agreement, until December
31, 2003.

            2. DUTIES AND AUTHORITY. During the Term, the Executive agrees to
continue to serve the Company, and the Company agrees to continue to employ the
Executive, as Chief Executive Officer and President and to continue to nominate
him as a member of the Board of Directors of the Company and support, in good
faith, his election as a member of the Board of Directors of the Company. In
serving in the aforementioned positions, the Executive shall have such authority
and responsibility as are customarily attendant to such positions and as may be
specified from time to time by the Board of Directors of the Company. The
Executive shall report directly to the Board of Directors of the Company. Except
as otherwise permitted by the Company, the Executive shall devote substantially
all of his business time (excluding periods of vacation and sick leave) and
efforts to the performance of his functions and responsibilities for the Company
and its affiliates.

            3. COMPENSATION AND BENEFITS. In full consideration for all services
rendered by the Executive during the Term, the Executive will receive the
following compensation and benefits:

                  (a) BASE SALARY. The Executive shall receive an annual base
salary of not less than five hundred thousand dollars ($500,000) (the "Base
Salary") payable in accordance with the customary payroll practices of the
Company. During the Term, the Executive's Base Salary will be reviewed by the
Compensation Committee of the Board of Directors of the Company and may be
adjusted upward (but not downward) to reflect the Executive's performance and
responsibilities.

                  (b) ANNUAL INCENTIVE COMPENSATION. During the Term, the
Executive shall be eligible to receive annual incentive compensation ("Annual
Incentive Compensation"). The Executive's annual incentive target shall be one
hundred percent (100%) of the Executive's

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Base Salary during the year in which the compensation is accrued, payable at
such times as such Annual Incentive Compensation is paid to other executives of
the Company as determined by the Compensation Committee in its sole discretion.

                  (c) RETENTION BONUS. The Executive shall receive a one-time
retention bonus ("Retention Bonus") in the amount of one million dollars
($1,000,000) payable as follows: (i) five hundred thousand dollars ($500,000) on
February 1, 2002 and (ii) five hundred thousand dollars ($500,000) on September
1, 2002, provided, however, that Executive remains continuously employed by the
Company at the date such payments are to be made. This bonus shall not be
subject to renewal after the Term nor shall it be included in any calculation
pursuant to Subparagraph 3(k) or Paragraph 5.

                  (d) STOCK OPTIONS. For 2002 and 2003, the Executive shall be
granted options pursuant to the Company's Stock Option Plan (the "Stock Option
Plan") in accordance with the Company's annual practice. If a Change of Control
occurs before the Executive's 250,000 options issued in February 2001 or the
stock options granted during 2002 or 2003 (if any) have become exercisable under
the Stock Option Plan, then the Executive shall be paid in cash the difference
between the exercise price of any such options and the price per share for
Sotheby's shares in the Change of Control transaction.

                  (e) EXPENSE REIMBURSEMENT. The Company will reimburse the
Executive for ordinary and necessary business and travel expenses incurred in
the performance of the Executive's duties in accordance with the Company's
standard procedures in effect for the senior most executives of the Company.

                  (f) BENEFITS. The Executive shall be eligible to continue to
participate in all benefit plans now or hereafter maintained by or on behalf of
the Company for its most senior executives or in which such senior executives
participate and shall receive all fringe benefits and vacations, for which the
Executive's level of employment makes him eligible in accordance with the
Company's policies and the terms of such plans. Such benefits shall not be
reduced, unless they are reduced in the same manner for all other senior
executives of the Company.

                  (g) SPECIAL PAYMENT. The Executive shall be eligible to
continue to receive the special payment made to him on September 1, 2000 if it
is determined by the Company, in its sole discretion, to continue it and for as
long thereafter as the Company decides is appropriate.

                  (h) BUSINESS DEVELOPMENT ALLOWANCE. The Executive will be
eligible for a business development allowance of at least $25,000 for each
calendar year during the Term.

                  (i) CAR ALLOWANCE. During the Term, the Company will pay for
the Executive's use of a car and driver for business purposes.

                  (j) CONFIDENTIALITY AGREEMENT; SOTHEBY'S RULES AND POLICIES.
As a condition to the Executive's continued employment by the Company, he shall
continue to be bound by the Company's Confidentiality Agreement, Auction Rules,
Compliance Policy, and the

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Conflict of Interest Policy and House Rules (collectively, the "Rules and
Policies"). The Executive acknowledges that he has read, understood and signed
each of the foregoing. Nevertheless, if any provision of the Rules or Policies
expressly contradicts any provision in this Agreement, the provisions of this
Agreement shall govern.

                  (k) SOTHEBY'S, INC. SEVERANCE PLAN. In the event that the
Executive is terminated under such conditions that make him eligible for
benefits under the Sotheby's, Inc. Severance Plan, such benefits shall be paid
under the terms of that plan in effect on the execution date of this Agreement
regardless of whether that plan is modified during the Term of this Agreement
unless the modification results in an enhanced benefit to the Executive, in
which case he would receive the enhanced benefit.

                  (l) MISCELLANEOUS. All bonus payments set forth in
Subparagraphs 3(c), 3(g), 3(h), and 3(k) and all termination payments made
pursuant to Paragraph 5 shall not be included for benefit contribution purposes
under any qualified or non-qualified retirement plan including but not limited
to the 401(k) plan or Benefit Equalization Plan. These bonus and termination
payments are also not part of the bonus calculation in the event the Executive
is entitled to benefits under the Sotheby's, Inc. Severance Plan.

            4. TERMINATION OF THE EXECUTIVE'S EMPLOYMENT.

                  (a) DEATH. Executive's employment shall terminate immediately
upon his death.

                  (b) DISABILITY. Executive's employment shall terminate upon
Executive's "Disability." For purposes of this Agreement, "Disability" means a
determination by the Company in accordance with applicable law that, as a result
of a physical or mental illness, the Executive is unable to perform the
essential functions of his job with or without reasonable accommodation that
does not present an undue burden on the Company.

                  (c) BY THE COMPANY. The Board of Directors of the Company may
terminate the Executive's employment at any time during the Term, with or
without "Cause" (as defined below), upon written notice by the Company to the
Executive, and the Executive's employment will terminate on the date notice is
given or, if specified in the notice, within sixty days after the date notice is
given.

                  For purposes of this Agreement, "Cause" means:

                        (1)   the Executive's fraud, willful malfeasance or
                              gross negligence in the performance of his duties
                              which is materially injurious to the Company; or

                        (2)   the Executive's conviction of felony crime;

      The Executive shall have thirty (30) days following the receipt of notice
from the Company of the existence of circumstances constituting Cause to correct
such circumstances.

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Any notice of termination for Cause must be given within sixty (60) days
following the Chairman of the Board of Directors learning of circumstances
constituting Cause.

                  (d) BY THE EXECUTIVE. The Executive may terminate his
employment with the Company at any time during the Term, with or without "Good
Reason" (as defined below), upon thirty (30) days prior written notice to the
Company. For purposes of this Agreement, "Good Reason" means:

                        (1)   a material breach of this Agreement by the
                              Company;

                        (2)   the Company's assignment of duties to the
                              Executive which are a material diminution of his
                              duties;

                        (3)   the Company's removal of the Executive from his
                              positions of Chief Executive Officer and/or
                              President and/or the Company's removal of the
                              Executive or failure to nominate the Executive,
                              and support in good faith the Executive's
                              election, as a member of the Board of Directors of
                              the Company;

                        (4)   the Company's requirement that the Executive
                              relocate the Executive's office or perform more
                              than one third of his duties during any calendar
                              year more than thirty-five (35) miles outside of
                              New York, New York without the Executive's prior
                              written consent;

                        (5)   the Company's failure to provide timely the
                              Executive with compensation and the benefits at
                              the levels required herein; or

                        (6)   termination of the Executive's employment within
                              twelve (12) months of a Change of Control (as
                              defined in the Stock Option Plan) but not earlier
                              than six (6) months after the Change of Control.

provided, however, that the Company shall have thirty (30) days following the
receipt of notice from the Executive of the existence of circumstances
constituting Good Reason to correct such circumstances. Any notice of
termination for Good Reason must be given within thirty (30) days following the
Executive learning of circumstances constituting Good Reason.

            5. SEVERANCE PAYMENT.

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                  (a) WITHOUT CAUSE AND GOOD REASON TERMINATION. If during the
Term the Company terminates the Executive's employment without Cause or the
Executive terminates his employment for Good Reason, all compensation payable to
the Executive under Paragraph 3 hereof will cease as of the effective date of
notice of such termination (the "Termination Date") and the Executive will be
entitled to the following:

                        (1)   All accrued but unpaid Base Salary through the
                              Termination Date plus the Executive's then current
                              Base Salary through the Term, payable in a lump
                              sum;

                        (2)   Annual Incentive Compensation payable in a lump
                              sum, as if the Executive remained employed through
                              the end of the Term, in an annualized amount equal
                              to his annual incentive target as most recently
                              determined pursuant to Subparagraph 3(a) prior to
                              the Termination Date;

                        (3)   All previously earned and accrued (but unpaid)
                              entitlements and benefits from the Company,
                              including any such entitlements and benefits as an
                              Executive under this Agreement or under the
                              Company's pension, disability and life insurance
                              plans, policies and programs, if any;

                        (4)   Full benefit coverage for the Executive, his
                              spouse and other eligible dependents under all of
                              the Company's life insurance, disability,
                              accidental death and dismemberment and other
                              Executive welfare programs, plans and policies
                              (including, but not limited to, health and dental
                              insurance plans and policies but excluding the
                              benefits provided pursuant to Subparagraphs 3(h)
                              and (i)) for the remainder of the Term provided
                              that if the Company Health and Welfare Programs do
                              not permit continuation of coverage for the
                              remainder of the Term, the Company will reimburse
                              the Executive, on an after tax basis, for the cost
                              of obtaining comparable coverage;

                        (5)   Immediate vesting of all outstanding unvested
                              stock options. To the extent the Executive is
                              prohibited from exercising the stock options
                              granted in February 2001 or during 2002 and 2003
                              (if any) under the Stock Option Plan, he shall be
                              paid cash in lieu of exercising such options; and

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                        (6)   On, or within fifteen (15) days following the
                              Termination Date, payment of any portion of the
                              Retention Bonus described in Paragraph 3(c) not
                              paid as of the Termination Date.

            The amounts set forth in Paragraph 5(a)(1)-(4) above are in addition
to any payments to which the Executive may be entitled pursuant to the Company's
Severance Plan, if applicable.

                  (b) TERMINATION FOR CAUSE OR TERMINATION BY THE EXECUTIVE
WITHOUT GOOD REASON. If the Executive's employment is terminated by the Company
for Cause or by Executive without Good Reason, Executive shall receive Base
Salary through the date of termination to the extent not theretofore paid, all
benefits accrued to the date of termination that are not forfeited under the
terms of the plans, and (i) if the Executive terminates his employment without
Good Reason, unpaid Annual Incentive Compensation accrued during the calendar
year prior to the calendar year in which the termination is effective or (ii) if
the Executive's employment is terminated by the Company for Cause and the
actions(s) or occurrence(s) constituting Cause took place in the year in which
the termination is effective, unpaid Annual Incentive Compensation accrued
during the calendar year prior to the calendar year in which the termination is
effective.

                  (c) TERMINATION DUE TO DEATH OR DISABILITY. In the event of
the Executive's death or Disability during the Term, Executive's employment will
terminate as of the date of the Executive's death or Disability and he (or his
Estate or beneficiaries as applicable) will receive (i) the sums set forth in
paragraphs 5(a)(3) and (5) and (ii) all compensation and benefits that the
Executive would have been paid, or to which he would have been entitled, had he
remained employed for one (1) year after the Termination Date, regardless of
whether the Term ends during that one (1) year period.

                  (d) EXPIRATION OF THE TERM. If the Company does not offer to
renew this Agreement at least six (6) months prior to the expiration of the Term
on terms at least as favorable as those in the final year of the Executive's
employment except that its Term need be no longer than two (2) years and such
agreement need not include the retention bonus in Paragraph 3(c). The Executive
shall, upon the expiration of the Term, be entitled to receive benefits under
the Company's Severance Plan as if he were entitled to receive such benefits
under the terms of the Plan.

                  (e) CHANGE OF CONTROL. If a "Change of Control" (as defined in
the Stock Option Plan) occurs and the Executive terminates his employment no
earlier than six (6) months following the Change of Control and no later than
twelve (12) months following the Change of Control, the Executive shall receive
compensation and benefits as if his employment was terminated by him for Good
Reason.

                  (f) RELEASE. Any payments payable pursuant to this Paragraph 5
other than unpaid compensation shall only be payable if the Executive delivers
to the Company a release, as required under the Sotheby's, Inc. Severance Plan,
of all his claims (except with

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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 Paragraph 8(e)), 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 reasonably requested by the Company.

            6. NON-COMPETE AND NON-SOLICITATION AGREEMENT.

                  (a) Because of the importance of stability and confidentiality
during this time of uncertainty for the Company, and because the Executive has
specialized, unique confidential knowledge vital to the Company, the Executive
agrees that, during the Restricted Period (defined below), he will not, without
the consent of the Company, in New York, California, England, France or
Switzerland engage directly or indirectly in the live or on-line Art Auction
Business or in any other business in which the Company is actively engaged or is
actively seeking to become engaged as of the time the Executive's employment
terminates (a "Competing Business"), whether such engagement by the Executive 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 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 the Executive's employment and the earlier of (i) six
(6) months after the end of the Term or (ii) twelve (12) months after the
termination of the Executive's employment.

                  (b) In addition to the foregoing, during the Restricted
Period, the Executive agrees that he will not, either alone or in concert with
others, and will not cause another to in any such case directly or indirectly,

                        (1)   recruit, solicit or induce any Sotheby's employees
                              to terminate their employment with Sotheby's;

                        (2)   solicit the business of, do business with, or seek
                              to do business with, any Client of the Company (as
                              defined herein);

                        (3)   encourage or assist any Competing Business to
                              solicit or service any Client of the Company; or

                        (4)   otherwise induce any Client of the Company to
                              cease doing business with, or lessen its business
                              with, the Company.

                  (c) The term "Client" shall not include clients of Sotheby's
with whom the Executive had no dealings on behalf of Sotheby's, or clients he
developed and maintained without any support or assistance, whether financial or
otherwise, from Sotheby's, but shall include any person who has or has had
business with the Company with whom the Executive did

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have dealings as well as, insofar as property that was at any time owned by such
person is concerned, that person's estate, heirs and/or immediate family.

                  (d) 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 Paragraph 6 is unenforceable against the
Executive, the provisions of this Paragraph 6 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.

            7. LEGAL AND EQUITABLE REMEDIES. Sotheby's shall be entitled to
enjoin a violation by the Executive 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 the Executive,
Sotheby's shall be entitled to specific enforcement by injunctive relief of the
Executive's 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.

            8. MISCELLANEOUS.

                  (a) NOTICE. Whenever notice is required hereunder, it shall be
given in writing and addressed to the Company at the main business office, and
to the Executive at the address reflected in the payroll records of the Company.

                  (b) ENTIRE AGREEMENT. This Agreement supersedes any and all
existing agreements between the Executive and the Company relating to the terms
and conditions of the Executive's employment.

                  (c) AMENDMENTS AND WAIVERS. No provisions of this Agreement
may be amended, modified, waived or discharged except as agreed to in writing by
the Executive and the Company. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion will not be considered a
waiver thereof or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.

                  (d) SUCCESSORS. This Agreement shall be binding upon and inure
to the benefit of the Executive and the Company and its successors and permitted
assigns. Neither this Agreement nor any of the rights of the parties hereunder
may be assigned by either party hereto except that the Company may assign its
rights and obligations hereunder to a corporation or other entity that acquires
substantially all of its assets. Any assignment or transfer of this Agreement in
violation of the foregoing provisions will be void.

                  (e) INDEMNIFICATION. The Executive shall be indemnified and
held harmless by the Company, or its successors or assigns, from and against any
losses, claims, damages, liabilities or actions, to the fullest extent permitted
by law.

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                  (f) GOVERNING LAW. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and/or to be performed in that State, without regard to any
choice of law provisions thereof.

                  (g) 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 7
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 an enforcement as the law of such jurisdiction may require or
allow. The losing party in such arbitration shall be liable for any costs,
including attorneys' fees. If there is a dispute as to which party lost, costs
and fees shall be allocated by the arbitrator.

                  (h) TAX GROSS-UP. Notwithstanding anything herein to the
contrary, if it is determined by the Company on or prior to the date the
applicable payments and/or benefits are paid or thereafter by the Internal
Revenue Service (the "IRS") pursuant to an IRS audit of the Executive's federal
income tax return(s) (an "Audit"), that any payment or benefit provided to the
Executive under this Agreement would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended, or any interest
or penalties with respect to such excise tax (such excise tax, together with any
interest or penalties thereon, is herein referred to as the "Excise Tax"), then
the Company shall pay (either directly to the IRS as tax withholdings or to the
Executive as a reimbursement of any amount of taxes, interest and penalties paid
by the Executive to the IRS) both the Excise Tax and an additional cash payment
(a "Gross-Up Payment") in an amount that will place the Executive in the same
after-tax economic position that the Executive would have enjoyed if the payment
or benefit had not been subject to the Excise Tax. The amount of the Gross-Up
Payment shall be calculated by the Company's regular independent auditors based
on the amount of the Excise Tax paid by the Company as determined by the Company
or the IRS. If the amount of the Excise Tax determined by the IRS is greater
than an amount previously determined by the Company, the Company's auditors
shall recalculate the amount of the Gross-Up Payment. The Executive shall
promptly notify the Company of any IRS assertion during an Audit that an Excise
Tax is due with respect to any payment or benefit, but the Executive shall be
under no obligation to defend against such claim by the IRS unless the Company
requests, in writing, that the Executive undertake the defense of such IRS claim
on behalf of the Company and at the Company's sole expense. In such event, the
Company may elect to control the conduct to a final determination through
counsel of it own choosing and at its sole expense, of any audit, administrative
or judicial proceeding involving an asserted liability relating to the Excise
Tax, and the Executive shall not settle, compromise or concede such asserted
Excise Tax and the Executive shall cooperate with the Company in each phase of
any contest.

                  (i) MITIGATION. The Executive shall have no duty to mitigate
any amounts payable or benefits provided under this Agreement.

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                  (j) WITHHOLDINGS. The Company is authorized to withhold from
any benefit provided or payment due hereunder the amount of withholding taxes
due any federal, state, or local authority in respect of such benefit or payment
and to take such other action as may be necessary in the opinion of the Company
to satisfy all obligations for the payment of such withholding taxes.

                  (k) SEVERABILITY. If any provision of this Agreement is
invalid or unenforceable, the balance of this Agreement will remain in effect,
and if such provision is inapplicable to any person or circumstance, it will
nevertheless remain applicable to all other persons and circumstances.

                  (l) ATTORNEYS' FEES. At the request of the Executive, the
Company shall pay the Executive's reasonable attorneys' fees incurred by the
Executive in connection with preparation, execution and delivery of this
Agreement.

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            IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.

                                         /s/ William F. Ruprecht
                                         ---------------------------------------
                                         WILLIAM F. RUPRECHT

                                         SOTHEBY'S HOLDINGS, INC.

                                         By: /s/ Max M. Fisher
                                            ------------------------------------
                                         Name:  Max M. Fisher
                                         Title: Vice Chairman of the BoardExhibit 10(c)

                              EMPLOYMENT AGREEMENT

BY HAND
William S. Sheridan
Sotheby's Holdings, Inc.
1334 York Avenue
New York, NY 10021

Dear Bill:

      This letter sets forth our understanding and agreement with respect to
your employment by Sotheby's Holdings, Inc. 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, perform
highly specialized and unique duties for the Company, and could do substantial
harm to the Company if you left its employment, particularly during this present
period of uncertainty for the Company. Consequently, Sotheby's is offering you
the following terms and financial enhancements to ensure your continued
employment with and loyalty to the Company, and so that you will focus fully and
exclusively on your job duties at Sotheby's during this period.

(1)   TERM OF EMPLOYMENT.

      a)    You agree to continue as a full-time employee of Sotheby's and
            Sotheby's agrees to continue to employ you full-time, subject to the
            terms and conditions set forth herein (the "Agreement"), for the
            period beginning as of January 1, 2001 and ending thirty-six (36)
            months after that date or December 31, 2003, unless extended in
            writing by both the Company and you or as otherwise provided in this
            Agreement.

      b)    This Agreement may be terminated:

            i)    upon mutual written agreement of the Company and you;

            ii)   upon thirty (30) days' prior written notice by the Company for
                  Cause (as hereinafter defined) given within thirty (30) days
                  of the Chief Executive Officer of the Company becoming aware
                  of circumstances constituting cause, or without Cause;

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            iii)  upon thirty (30) days' prior written notice by you for Good
                  Reason (as hereinafter defined) given within thirty (30) days
                  of your becoming aware of circumstances constituting Good
                  Reason;

            iv)   at the option of the Company in the event of your Permanent
                  Disability (as hereinafter defined); or

            v)    automatically upon your death.

      c)    As used herein, the term "Cause" shall mean and be limited to your:

            i)    conviction of a felony crime, or

            ii)   fraud, willful malfeasance or gross negligence in performance
                  of your duties which is materially injurious to the Company.

            You shall have thirty (30) days following the receipt of notice from
            the Company of the existence of circumstances constituting Cause to
            correct such circumstances. Any notice of termination of Cause must
            be given within sixty (60) days following the Chief Executive
            Officer or the Board of Directors learning of circumstances
            constituting Cause.

      d)    As used herein, the term "Good Reason" shall mean the occurrence of
            any of the following events:

            i)    any material breaches of this Agreement by the Company without
                  your express consent;

            ii)   your being required to relocate to a principal place of
                  business more than thirty-five (35) miles outside New York,
                  New York without your express consent;

            iii)  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);

            iv)   the failure of the Company's successor to assume this
                  Agreement in accordance with Paragraph 20 without your express
                  consent; or

            v)    termination of your employment within twelve (12) months of a
                  Change of Control (as defined in the Stock Option Plan) but
                  not earlier than six (6) months after the Change of Control;

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                  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.

      e)    As used herein, the term "Permanent Disability" shall mean a
            determination by the Company in accordance with applicable law that,
            as a result of a physical or mental illness, you have been unable to
            perform the essential functions of the job with or without
            reasonable accommodation that does not present an undue burden on
            the Company for a period in excess of six (6) consecutive months.

(2)   TITLE; RESPONSIBILITIES. You shall continue to serve as Chief Financial
      Officer of Sotheby's. In addition to the foregoing, you agree to perform
      such other functions and responsibilities as may be reasonably requested
      by Sotheby's from time to time. During your employment with the Company,
      you shall devote substantially all of your business time (excluding
      periods of vacation and sick leave) and efforts to the performance of your
      functions and responsibilities hereunder.

(3)   COMPENSATION. In consideration for the services to be rendered by you to
      Sotheby's, you shall receive during the 36-month period of employment by
      Sotheby's after your execution of this Agreement, the following:

      a)    An annual base salary of $350,000, which shall be payable in
            appropriate installments to conform with the regular payroll dates
            for salaried personnel of Sotheby's. Your base salary shall be
            reviewed thereafter on an annual basis and shall be subject to such
            adjustment as the Chief Executive Officer shall determine upward but
            not downward to reflect your performance and responsibilities; and

      b)    In addition to the annual base salary, you will be eligible for:

            i)    An annual bonus composed of a 25% worldwide corporate
                  financial performance target and a 75% individual performance
                  target. Your 2001 total bonus target is $200,000. Your annual
                  bonus target may be subject to such adjustment as the Chief
                  Executive Officer shall determine upward but not downward to
                  reflect your performance and responsibilities.

            ii)   A special cash bonus of $200,000 payable February 28, 2002 and
                  a leadership incentive bonus in the amount of $350,000 payable
                  on February 28, 2002 and $350,000 payable on September 30,
                  2002, as set forth in my letters to you of May 10, 2000 and
                  October 16, 2000 subject to the terms and conditions set forth
                  in those letters except that the Notice and Non-Compete
                  Agreement shall be superseded by Paragraph 13.

(4)   ADDITIONAL COMPENSATION IN CONSIDERATION FOR SPECIAL UNDERTAKINGS DURING
      THE 36-MONTH EMPLOYMENT PERIOD. In order to preserve stability and to
      assure your continued employment during this period of uncertainty for the
      Company, and because it is essential

                                       3
<Page>

            that during this period you focus fully and exclusively on your job
            duties for the Company, you agree to the following undertakings
            during the 36-month period of employment by Sotheby's, in exchange
            for the Special Additional Consideration set forth in Subparagraph
            4(b) below.

      a)    Employee Undertakings

            i)    You agree to reaffirm and abide by your acknowledged fiduciary
                  obligation to cooperate with the Company in the event of and
                  in connection with matters relating to the Company including,
                  without limitation, a restructuring (any business or capital
                  restructuring), refinancing or sale of the Company or a
                  significant interest therein (including, but not limited to,
                  an actual or potential change of control) including, but not
                  limited to, your obligations to:

                  (a)   not disparage the Company or its assets to any third
                        party;

                  (b)   maintain your loyalty to the Company in all respects,
                        including, without limitation, compliance with Paragraph
                        13;

                  (c)   provide full and complete active cooperation and other
                        assistance in promoting the Company; and

                  (d)   fully assist with any transition with respect to any
                        business or capital restructuring, refinancing or sale
                        of the Company or a significant interest therein.

            ii)   During the 36-month term of this Agreement or until the
                  termination of this Agreement if earlier than December 31,
                  2003 (for purposes of this Subparagraph 4(a)(ii), the "Term"),
                  you agree to refrain from any substantive discussions,
                  meetings or communications of any kind whatsoever with any
                  other potential employer, including, but not limited to, an
                  art auction house, art dealer or any other company,
                  organization or entity in which you would perform similar
                  duties and responsibilities to those you have performed at
                  Sotheby's, regarding prospective employment for yourself
                  during the Term. By entering into this Agreement, and agreeing
                  to the special undertakings set forth herein, you agree that
                  for this Term you are knowingly and voluntarily foregoing the
                  right to engage in such conduct in exchange for the
                  consideration set forth herein, and you acknowledge the vital
                  importance of these undertakings to the Company during the
                  Term.

      b)    Special Additional Consideration

                                       4
<Page>

            In consideration of the foregoing undertakings by you, the Company
            shall (except as stated in Subparagraph 11(c)) provide the following
            special additional consideration provided you do not breach this
            Agreement:

            i)    You will receive a "retention bonus" in the amount of
                  $1,000,000, provided you do not breach this Agreement. This
                  payment will be made on December 31, 2002.

            ii)   Pursuant to the Sotheby's 1997 Stock Option Plan, an option to
                  purchase 150,000 shares will be provided to you upon your
                  execution of this Agreement.

      c)    Payments set forth in Subparagraphs 3(b)(ii) and 4(b) shall not be
            included for benefit contribution purposes under any qualified or
            non-qualified retirement plan including but not limited to the
            401(k) plan or Benefit Equalization Plan. These special payments are
            also not part of the bonus calculation in the event you are entitled
            to benefits under the Sotheby's, Inc. Severance Plan.

      d)    If, at any time during the 36-month employment period, you breach
            any of the undertakings set forth herein, you will return to the
            Company all of the "Special Additional Consideration" you may have
            received pursuant to Subparagraph 4(b) above, and will not
            thereafter be entitled to any further "Special Additional
            Consideration." In addition, payment of the "Special Additional
            Consideration" pursuant to Subparagraph 4(b) will not be made if,
            for any reason, you are not employed by the Company on the date such
            payment would otherwise be made, except as otherwise provided in
            Subparagraphs 11(a) or 11(b).

(5)   STOCK OPTIONS. Your options will continue to vest pursuant to the
      Sotheby's 1997 Stock Option Plan, and you will continue to be eligible for
      further grants. The benefits provided in this Agreement are in addition to
      any stock options you have already received.

(6)   BENEFITS. You shall continue to be entitled, to the extent that your
      position, title, tenure, salary, age, health and other qualifications make
      you eligible, to participate in all employee benefit plans or programs now
      in effect or hereafter adopted by Sotheby's, including the Sotheby's, Inc.
      Severance Plan, medical, dental, disability, life insurance, stock options
      and pension benefits. Your participation in such plans or programs shall
      continue to be subject to the provisions, rules and regulations applicable
      thereto. Any benefits that you may become eligible for under the
      Sotheby's, Inc. Severance Plan shall be in addition to the other benefits
      specified in this Agreement. In the event you are entitled to benefits
      under the Sotheby's, Inc. Severance Plan, such benefits shall be paid
      under the terms of that plan in effect on the execution date of this
      Agreement regardless of whether that plan is modified during the term of
      this Agreement unless the modification results in an enhanced benefit to
      you in which case you would receive the enhanced benefit except if the
      Severance Plan applies pursuant to the conditions stated in Paragraph 12
      below.

                                       5
<Page>

(7)   VACATION. You shall continue to be entitled to annual vacation time, with
      full pay, in accordance with the established policies of Sotheby's now or
      hereafter in effect for similarly situated employees but in no event less
      than the number of days to which you are presently entitled.

(8)   EXPENSES. You shall be authorized to incur reasonable and necessary
      expenses incurred in connection with Sotheby's business, including
      expenses for entertainment, travel and similar items in accordance with
      Sotheby's travel and entertainment policy. Sotheby's will reimburse you
      for all such expenses upon presentation by you monthly of an itemized
      account of such expenditures. Such expenditures, however, shall be subject
      at all times to the approval of Sotheby's in accordance with Sotheby's
      expense reimbursement policy.

(9)   BUSINESS DEVELOPMENT ALLOWANCE. You will be eligible to continue your
      current annual business development allowance of $25,000 for 2001, 2002,
      and 2003.

(10)  CONFIDENTIALITY AGREEMENT; SOTHEBY'S RULES AND POLICIES. As a condition to
      your continued employment by the Company, you shall continue to be bound
      by the Company's Confidentiality Agreement, Auction Rules, Compliance
      Policy, and the Conflict of Interest Policy and House Rules (collectively,
      the "Rules and Policies"). You acknowledge that you have read, understood
      and signed each of the foregoing.

(11)  COMPENSATION UPON TERMINATION DURING THE 36-MONTH EMPLOYMENT PERIOD.

      a)    If during the 36-month employment period your employment by the
            Company is terminated by you for Good Reason in accordance with
            Subparagraph 1(b)(iii) hereof or by the Company without Cause in
            accordance with Subparagraph 1(b)(ii), 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 in accordance with Paragraph 8
                  ("Accrued Obligations");

            ii)   Continued payment of your base salary on a semi-monthly basis
                  from the date of termination through the end of the 36-month
                  employment period;

            iii)  On, or within fifteen (15) days following the date of
                  termination, a pro-rated bonus equal to the product of (x) the
                  bonus payments set forth in Subparagraphs 3(b)(i) paid or
                  earned and payable for the most recently completed fiscal year
                  of the Company and (y) a fraction, the numerator of which is
                  the number of days in the current fiscal year through the date
                  of termination, and the denominator of which is 365 (the
                  "Pro-Rated Bonus"); and

                                       6
<Page>

            (iv)  On, or within fifteen (15) days following the date of
                  termination, payment of any portion of the "retention bonus"
                  described in Subparagraph 4(b)(i) not paid as of the date of
                  termination; provided that, if such termination shall be for
                  the reasons set forth in Subparagraph 1(d)(v) at any time
                  prior to December 31, 2002, you shall only be entitled to be
                  paid a fraction of such "retention bonus" the numerator of
                  which is the number of full months from January 1, 2001
                  through the date of such termination and the denominator of
                  which is 36.

            In addition, you will not be obligated to return to the Company any
            portion of the "Special Additional Consideration" you may have
            received pursuant to Subparagraph 4(b) above. Notwithstanding the
            foregoing, if during the 36-month employment period your employment
            by the Company is terminated and as a result of such termination you
            become eligible to receive payments and/or benefits under the
            Sotheby's, Inc. Severance Plan, then you shall not be entitled to
            receive the Pro-Rated Bonus in accordance with the provisions of
            Subparagraph 11(a)(iii).

            Except as provided in Subparagraph 11(e), you will not be entitled
            to receive benefits under the Sotheby's, Inc. Severance Plan if your
            employment terminates pursuant to Subparagraph 11(a).

      b)    If during the 36-month employment period your employment by the
            Company is terminated on account of your Permanent Disability or
            your death, the Company shall pay or provide you (or, in the event
            of your death, your estate) with the following:

            i)    Accrued Obligations;

            ii)   On, or within fifteen (15) days following the date of
                  termination, a Pro-Rated Bonus; and

            iii)  On, or within fifteen (15) days following the date of
                  termination, payment of any portion of the "retention bonus"
                  described in Subparagraph 4(b) not paid as of the date of
                  termination.

            In addition, you (or, in the event of your death, your estate) will
            not be obligated to return to the Company any portion of the
            "Special Additional Consideration" you may have received pursuant to
            Subparagraph 4(b) above.

      c)    If during the 36-month employment 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 or special payments including those in
            Subparagraphs 3(b) and 4(b) after the date of termination of

                                       7
<Page>

            your employment.

      d)    If during the 36-month employment period your employment by the
            Company is terminated in accordance with Subparagraphs 1(b)(i)
            hereof, the Company shall pay or provide you with the amounts
            mutually agreed on by the Company and you.

      e)    If during the 36-month employment period your employment by the
            Company is terminated by the Company without Cause within twelve
            (12) months of a Change in Control (as defined in the Stock Option
            Plan), the amounts set forth in Subparagraphs 11(a)(i)-(iv) shall be
            paid to you as well as the benefits you would receive under the
            Sotheby's, Inc. Severance Plan as if you were entitled to receive
            such benefits under the terms of the Plan.

      f)    Any payments payable pursuant to this Paragraph 11 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 of 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
            Paragraph 14) 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 reasonably requested by the Company.

(12)  EMPLOYMENT AFTER EXPIRATION OF THE 36-MONTH EMPLOYMENT PERIOD. If the
      Company does not offer to renew this Agreement at least six (6) months
      prior to the expiration of the 36-month employment period on terms at
      least as favorable as those in the final year of your employment except
      that its term need by no longer than one (1) year and such agreement need
      not include the retention bonus in Paragraph 4(b). You shall, upon the
      expiration of the 36-month employment period, be entitled to receive
      benefits under the Company's Severance Plan as if you were entitled to
      receive such benefits under the terms of the plan in effect at that time.

(13)  NON-COMPETE AND NON-SOLICITATION AGREEMENT

      a)    Because of the importance of stability and confidentiality during
            this time of uncertainty for the Company, and because you 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, California, England, France or Switzerland engage directly
            or indirectly in the live or on-line "Art Auction Business" (defined
            below) 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,

                                       8
<Page>

            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 36-month employment period under this Agreement or (ii) twelve
            (12) months after the termination of your employment.

      b)    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,
            recruit, solicit or induce any Sotheby's employees to terminate
            their employment with Sotheby's.

      c)    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 Paragraph 13 is
            unenforceable against you, the provisions of this Paragraph 13 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.

(14)  INDEMNIFICATION. The Company shall maintain for your benefit director and
      officer liability insurance in the same amount and to the same extent as
      the Company covers similarly situated employees. In addition, to the
      extent not covered by director and officer liability insurance, you shall
      be indemnified by the Company against liability as an officer or director
      of the Company to the maximum extent permitted by applicable law. Your
      rights under this Paragraph 14 shall continue so long as you may be
      subject to such liability, whether or not this Agreement may have
      terminated prior thereto

(15)  MISCELLANEOUS.

      a)    MISCELLANEOUS. ASSIGNMENTS. You may not assign your rights or
            delegate your obligations under this Agreement.

      b)    WITHHOLDINGS. Sotheby's shall be entitled to withhold from any
            payments or deemed payments under this Agreement any amount of
            withholding required by law.

      c)    ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
            between you and Sotheby's concerning the subject mater of your
            employment, with the exception of letters and documents specifically
            referenced herein, and it supersedes all prior agreements including,
            but not limited to, any prior Notice and Non-Compete Agreements,
            written or oral, discussions, and negations on that

                                       9
<Page>

            subject (other than the letters and documents specifically
            referenced herein).

      d)    AMENDMENTS AND WAIVERS. Any waiver or amendment of any provision of
            this Agreement must be done in writing and signed by both parties.

      e)    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 17 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 an enforcement as the law of such
            jurisdiction may require or allow.

      f)    ATTORNEYS' FEES. At your request, the Company shall pay your
            reasonable attorney's fees incurred by you in connection with
            preparation, execution and delivery of this Agreement.

(16)  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.

(17)  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.

(18)  CONFIDENTIALITY. You shall not disclose this Agreement or the contents
      thereof to anyone other than (i) your legal or financial advisor, provided
      that you give to each such person to whom disclosure is made notice of the
      confidentiality provisions of this Agreement and each agrees to keep the
      existence, terms and conditions of this Agreement fully confidential or
      (ii) except as required by law or with the prior written approval of
      Sotheby's.

                                       10
<Page>

(19)  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.

(20)  BINDING ON SUCCESSOR COMPANY. This Agreement shall remain in effect and
      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 in accordance with the
      operation of law, and such successor entity shall be deemed the "Company"
      for purposes of this Agreement. In the situations set forth in this
      Paragraph 20, if this Agreement is not assumed as a matter of law, the
      Company will require its assumption by the successor entity.

(21)  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 Holdings, Inc., 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.

(22)  REPRESENTATION BY COUNSEL. The parties have each been represented by
      counsel of their own choosing in negotiation this Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       11
<Page>

      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 HOLDINGS, INC.

                                           By: /s/ William F. Ruprecht
                                               ---------------------------------
                                               William F. Ruprecht
                                               Chief Executive Officer

Read, accepted and agreed to this
28th day of September, 2001

/s/ William S. Sheridan
---------------------------------
William S. Sheridan

                                       12

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