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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995.
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
FOR THE TRANSITION PERIOD FROM TO .
COMMISSION FILE NUMBER 1-9750.
SOTHEBY'S HOLDINGS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MICHIGAN 38-2478409
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
500 NORTH WOODWARD AVENUE, SUITE 100
BLOOMFIELD HILLS, MICHIGAN 48304
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (810) 646-2400
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- -----------------------
Class A Limited Voting Common Stock, New York Stock Exchange
$0.10 Par Value London Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIODS THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS) AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. X
YES ........ NO ........
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /
As of March 11, 1996, the aggregate market value of the 38,754,147 shares of
Class A Limited Voting Common Stock held by non-affiliates of the registrant was
$561,935,132, based upon the closing price ($14.50) on the New York Stock
Exchange composite tape on such date. (For this computation, the registrant has
excluded the market value of all shares of its Class A Limited Voting Common
Stock reported as beneficially owned by executive officers and directors of the
registrant; such exclusion shall not be deemed to constitute an admission that
any such person is an "affiliate" of the registrant.) As of March 11, 1996,
there were outstanding 38,792,335 shares of Class A Limited Voting Common Stock
(the "Class A Common Stock") and 17,278,667 shares of Class B Common Stock (the
"Class B Common Stock"), freely convertible into 17,278,667 shares of Class A
Common Stock. There is no public market for the registrant's Class B Common
Stock, which is held by affiliates and non-affiliates of the registrant.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the annual shareholders report for the year ended December 31,
1995 (the "Annual Report") are incorporated by reference into Parts I and II.
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<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth all compensation paid to the Chief Executive
Officer and each of the four most highly compensated executive officers
(collectively, the "Named Executive Officers") of the Company during 1995 for
each of the last three years.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM ALL OTHER
COMPENSATION COMPENSATION(14)
------------ ----------------
ANNUAL COMPENSATION SHARES
----------------------------------------- UNDERLYING
NAME AND PRINCIPAL OTHER ANNUAL OPTIONS
POSITION YEAR SALARY BONUS(5) COMPENSATION (#)
- ----------------------- ---- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Diana D. Brooks........ 1995 $500,000 $351,050(6) $ 7,920(11) 200,000 $ 37,299
President and Chief 1994 500,000 276,000(6) 7,200(11) 250,000 35,150
Executive Officer 1993 400,000 233,000(6)] 8,640(11) 250,000 34,250
Simon de Pury (1)...... 1995 $418,883 $179,025 $ 21,739(12) 20,000 $ 53,895
Chairman, Sotheby's 1994 322,142 160,000(7) 10,597(11) 66,000 47,480
Europe 1993 243,180 190,000(7) 0 100,000 30,469
Kevin A. 1995 $343,000 $177,000 $ 0 20,000 $ 24,397
Bousquette(2).......... 1994 330,000 104,000 6,000(11) 0 20,450
Senior Vice President 1993 239,808 70,000 0 150,000 7,500
and Chief Financial
Officer
Henry Wyndham(3)....... 1995 $206,716 $222,900(9) $ 74,400(13) 40,000 $ 4,939
Chairman, Sotheby's 1994 183,960 137,390(9) 46,400(13) 75,000 4,404
(U.K.) 1993 0 150,000(10) 0 0 0
William F. 1995 $260,000 $177,000 $ 0 17,500 $ 19,977
Ruprecht(4)............ 1994 225,000 157,500(8) 0 8,000 17,656
Managing Director, 1993 200,000 165,000(8) 0 0 17,455
Sotheby's North and
South America
</TABLE>
- ------------
(1) Mr. de Pury served as Deputy Chairman of Sotheby's Europe in 1993. He
assumed the position of Chairman of Sotheby's Europe on January 1, 1994.
(2) Mr. Bousquette joined the Company in March 1993.
(3) Mr. Wyndham joined the Company as Chairman, Sotheby's (U.K.), effective
January 1994.
(4) Mr. Ruprecht was appointed Executive Vice President and Managing Director
of Sotheby's North and South America in February 1994.
(5) 1995 bonus amounts include cash paid in 1996 in respect of 1995
performance.
(6) The 1995 bonus amount includes a deferred bonus of $21,050 paid for
services rendered in connection with the acquisition of Pierre Matisse
Gallery Corporation ("Matisse") and the management of AMA. The 1994 bonus
amount includes a payment of $30,000, representing the balance of a special
bonus awarded to senior officers to reflect the fact that salaries had been
frozen since January 1990 and a deferred bonus of $46,000 paid for services
rendered in connection with the acquisition of Matisse and the management
of AMA. The 1993 bonus amount includes a payment of $60,000 representing
part of such special bonus and a deferred bonus of $23,000 paid for
services rendered in connection with the acquisition of Matisse and the
management of AMA.
(7) The 1994 bonus amount includes a payment of $60,000, representing the
balance of a special bonus awarded to senior officers to reflect the fact
that salaries had been frozen since January 1990. The 1993 bonus amount
also includes a payment of $60,000, representing part of such special bonus
awarded.
(Footnotes continued on following page)
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(Footnotes continued from preceding page)
(8) The 1994 bonus amount includes a payment of $37,500, representing the
balance of a special bonus awarded to senior officers to reflect the fact
that salaries had been frozen since January 1990. The 1993 bonus amount
also includes a payment of $75,000, representing part of such special bonus
awarded.
(9) The 1994 and 1995 bonus amounts include a supplemental payment of $45,990
to be paid each of the first three years of Mr. Wyndham's employment, in
accordance with the terms of his employment agreement.
(10) The 1993 bonus amount is a one-time signing bonus per Mr. Wyndham's
employment agreement.
(11) Car allowance.
(12) Car Leasing and Maintenance Fees.
(13) Housing and Travel allowance.
(14) The amounts disclosed in this column for 1995 include:
(a) Company contributions of the following amounts under the Retirement
Savings Plan: $7,500 on behalf of Ms. Brooks, $7,357 on behalf of Mr.
Bousquette and $7,443 on behalf of Mr. Ruprecht.
(b) Company contributions of the following amounts under benefit
equalization agreements: $29,799 on behalf of Ms. Brooks, $17,040 on
behalf of Mr. Bousquette and $12,534 on behalf of Mr. Ruprecht.
(c) a Company contribution under the Switzerland plans of $53,895 on behalf
of Mr. de Pury.
(d) a Company contribution under the U.K. pension plan of $4,939 on behalf
of Mr. Wyndham.
The following table sets forth information regarding option grants under the
Company's 1987 Stock Option Plan, including its U.K. Sub-plan ("the Plan") to
the Named Executive Officers in 1995:
OPTION GRANTS IN 1995
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
RATES OF STOCK PRICE
APPRECIATION FOR OPTION
INDIVIDUAL GRANTS TERM(4)
--------------------------------------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
NUMBER OF PERCENT OF
SHARES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION
GRANTED 1995 SHARE(3) DATE 5% 10%
---------- ------------- --------- ---------- ---------- ----------
Diana D. Brooks.............. 200,000(1) 16.4% $ 10.875 2/8/05 $1,367,846 $3,466,390
Simon de Pury................ 20,000(1) 1.6% $ 10.875 2/8/05 $ 136,785 $ 346,639
Kevin A. Bousquette.......... 20,000(1) 1.6% $ 10.875 2/8/05 $ 136,785 $ 346,639
Henry Wyndham................ 40,000(2) 3.3% $ 10.875 2/8/05 $ 273,569 $ 693,278
William F. Ruprecht.......... 17,500(1) 1.4% $ 10.875 2/8/05 $ 119,687 $ 303,309
</TABLE>
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(1) These options will vest and become exercisable to the extent of one-fifth of
the number of shares subject to the option on each of the first, second,
third, fourth and fifth anniversary of the date of grant.
(2) These options will vest and become exercisable to the extent of three-fifths
of the number of shares subject to the option on the third anniversary of
the date of grant and to the extent of an additional one-fifth of the number
of the shares subject to the option on each of the fourth and fifth
anniversaries of the date of grant.
(3) The exercise price of each option is the fair market value of the underlying
shares as of the date of grant. Only options to purchase shares of Class B
Common Stock may be granted under the Plan.
(Footnotes continued on following page)
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<PAGE>
(Footnotes continued from preceding page)
Because Class B Common Stock is convertible into Class A Common Stock and
there is no public market for the Class B Common Stock, the fair market
value of an option is the NYSE closing price per share of the Class A Common
Stock on the last business day before the option grant.
(4) The actual value, if any, that may be realized by each individual will
depend on the closing price of the Class A Common Stock on the NYSE on the
day preceding the exercise date. The option term for these option grants is
ten years. The appreciation rates used in the table are provided to comply
with Item 402(c) of Regulation S-K and do not necessarily reflect the views
of management as to the potential realizable value of options.
The following table provides information on option exercises in 1995 by the
Named Executive Officers and year-end option values for unexercised options held
by the Named Executive Officers:
AGGREGATED OPTION EXERCISES IN 1995 AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL YEAR-END IN-THE-MONEY OPTIONS AT
SHARES FISCAL YEAR END
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Diana D. Brooks.................. 0 $0 228,000 550,000 $ 230,250 $ 871,875
Simon de Pury.................... 0 $0 77,867 142,133 $ 80,917 $ 129,333
Kevin A. Bousquette.............. 0 $0 60,000 110,000 $ 105,000 $ 225,000
Henry Wyndham.................... 0 $0 0 115,000 $ 0 $ 135,000
William F. Ruprecht.............. 0 $0 59,600 51,900 $ 162,250 $ 139,563
</TABLE>
See Note K to the Consolidated Financial Statements in the Annual Report for
additional information about the Plan.
Retirement Savings Plan
The Company has a Retirement Savings Plan (the "Retirement Savings Plan")
for employees of the Company and its subsidiaries in the United States.
Employees are eligible to participate in the Retirement Savings Plan as of the
first day of the month following completion of a 90-day waiting period
commencing on the date of employment. Company contributions to the Retirement
Savings Plan made on behalf of the Named Executive Officers have been included
in the Summary Compensation Table.
U.K. Pension Plan
Sotheby's (U.K.) maintains a funded defined benefit pension plan for its
employees who are U.K. residents.
PENSION TABLE
YEARS OF SERVICE
REMUNERATION --------------------------------------------------
(B.P.) 15 20 25 30 35
- ------------ ------ ------ ------ ------ ------
40,000 10,000 13,333 16,667 20,000 23,333
60,000 15,000 20,000 25,000 30,000 35,000
80,000 19,650 26,200 32,750 39,300 45,850
Henry Wyndham is the only Named Executive Officer who participates in the
plan and has two credited years of service with the Company.
Pension benefits under the plan for employees contributing 4% of salary are
1/60th of the employee's final pensionable salary for every year of service up
to a maximum of 40 years. For participants contributing 2% of salary, the
benefits accrue at half of the rate indicated above. Benefits
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are paid monthly commencing at retirement, which is at age 60, although the
Company may elect to continue employment of the individual after that date, and
if the Company agrees, the employee may elect to make further contributions
until the age of 65. The compensation covered by the plan is the employee's
pensionable earnings (subject to the limitation described below), which includes
"Salary", but excludes "Bonus" and "Other Annual Compensation" disclosed in the
Summary Compensation Table.
The plan also provides for a death benefit in the amount of four times the
employee's base salary at the time of death plus the refund of the employee's
contributions to the plan and provides for a pension to be paid to the
employee's spouse of 33 1/3%, or proportionately less if the employee has
elected to contribute at the reduced rate, of the employee's base salary at the
date of death.
The above table sets forth the estimated annual benefits (in pounds
sterling) payable upon retirement under the plan assuming the employee
contributes at 4% of base salary. Current Inland Revenue regulations limit the
pensionable salary with respect to which pension benefits may be based to a
maximum of B.P.78,600.
Switzerland Plan
In accordance with the requirements of Swiss law, Sotheby's AG, the
Company's Swiss operating subsidiary, established in 1985 a fully insured
pension plan (the "First Swiss Plan") for its full-time employees whose salaries
exceed 23,280 Swiss francs ("SF"), up to a fixed ceiling of SF 116, 400. There
are two elements of the First Swiss Plan: a savings element (the "Savings
Plan"), and a risk element (the "Risk Plan"). Employees are eligible to join the
Savings Plan as of the January 1 following attainment of age 24 and the Risk
Plan as of the January 1 following attainment of age 17.
Under the Savings Plan, an individual retirement account is established for
each participating employee. Each year, the account is credited with a
percentage of the employee's adjusted salary, which is the employee's annual
salary excluding bonuses and other allowances reduced by SF 23,280. Longer
serving employees were made eligible for additional Company contributions in
respect of service with the Company prior to 1985. The percentage of adjusted
salary credited to the account ranges from 7% to 30%, depending on the
employee's age, sex and past service. The Company pays 70% of this total
contribution, with the remainder paid by employees. The account is also credited
with interest at a rate fixed by the Swiss government's executive branch.
At retirement age, which is age 65 for men and age 62 for women, the
employee's account is convertible, at the employee's election, to a life
annuity, with provisions for contingent widow's pension of 60% of the retiree's
benefit and immediate pensions of 20% of the retiree's benefit for certain
children of the retiree.
The Risk Plan provides disability and death benefits to employees, their
widows and certain of their children. Benefits are generally a percentage of the
amount credited to the employee's account, excluding interest. Benefits under
the Risk Plan are funded by insurance premiums, all of which are paid by the
Company.
Sotheby's A.G. has also established a second pension plan (the "Second Swiss
Plan") which is non-compulsory and only has a savings element. These benefits
are based on the amount by which an employee's total salary exceeds SF 116,400.
The Company pays approximately 74% of the total contribution, with the remainder
paid by employees.
Mr. de Pury is the only Named Executive Officer who participates in the
First Swiss Plan and the Second Swiss Plan. A total of SF 61,979 ($53,895)
contributed in 1995 by the Company on behalf of Mr. de Pury is included in the
Summary Compensation Table.
Bonuses
The Company's officers are eligible to receive incentive bonuses. Bonuses
are recommended by management and approved by the Committee. Actual awards are a
function of the Company's after-tax worldwide profit and the individual's
performance. Every supervisor conducts ^ an employee review. As part of the
review, the supervisor and the employee will determine future objectives against
which the
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employee's performance will be measured. In addition, the program allows the
Committee the discretion to address exceptional performance and unusual
circumstances.
Benefit Equalization Agreements
The total annual contributions to the Company's Retirement Savings Plan are
subject to certain limitations under the Internal Revenue Code of 1986, as
amended, and the Employee Retirement Income Security Act of 1974, as amended,
for each participant. Officers (generally senior vice presidents and above) of
the Company and its U.S. subsidiaries who are affected by such limitations may
enter into agreements pursuant to which their salaries will be reduced, and the
Company will maintain accounts on their behalf, in the amount of the difference
between (i) the aggregate amount of contributions that would have been made to
the Retirement Savings Plan in the absence of the limitations, and (ii) the
aggregate amount of contributions actually made to the plan. Amounts deferred
are credited with the same earnings yield credited to contributions made to the
fixed income fund maintained under the Retirement Savings Plan. Benefits under
these unfunded agreements are paid to a participant one year following the
participant's termination of employment with the Company, unless the participant
elects to defer receipt of payment. Amounts deferred by the Named Executive
Officers of the Company pursuant to benefit equalization agreements in 1995 have
been included in the Summary Compensation Table.
COMPENSATION OF DIRECTORS
Each director of the Company who is not an executive officer of the Company
receives an annual retainer fee of $20,000, plus a fee of $1,000 for each Board
meeting attended by such director, and a fee of $500 for each committee meeting
($1,000 for the chairman of the committee) attended by such director, in
addition to reimbursement of expenses. Beginning in early 1996, each director
who is not an executive officer of the Company will receive additional annual
compensation of 750 shares of the Company's Class A Common Stock.
CERTAIN EMPLOYMENT ARRANGEMENTS
In October 1993, the Company entered into an agreement with Henry Wyndham
regarding his employment as Chairman of Sotheby's (U.K.), which began on
February 1, 1994. At that time, Mr. Wyndham received a bonus of B.P.100,000. Mr.
Wyndham's annual salary will be up to B.P.130,000 for the first three years, and
thereafter not less than B.P.130,000. In addition, for each of the first three
years, Mr. Wyndham will receive a non-pensionable salary supplement of
B.P.30,000 per year.
The Company has entered into an employment agreement with Lord Camoys,
pursuant to which he serves as the Company's Deputy Chairman. Under the
agreement, Lord Camoys received an initial grant under the 1987 Stock Option
Plan with respect to 50,000 shares. The rate of Lord Camoys's base salary under
the agreement during each of 1994 and 1995 was B.P.100,000, of which B.P.66,667
was paid for 1994, a proration resulting from Lord Camoys commencing employment
on April 1, 1994. Lord Camoys was not paid a bonus in 1994 or 1995. He also
receives an annual travel allowance of B.P.10,000. The agreement expires in
1998.
The Company had an employment agreement with Lord Gowrie, which expired at
the end of 1995. Under that agreement, Lord Gowrie was required to devote
one-third of his work time to providing consulting services to the Company. His
base annual salary and miscellaneous compensation was B.P.55,000. Lord Gowrie
was not paid a bonus in 1994 or 1995. Because Lord Gowrie was employed by the
Company upon expiration of the agreement, the Company is required under the
employment agreement to make a one-time additional contribution to his pension
fund of B.P.97,000. Effective as of January 1, 1996, the Company has entered
into a consulting agreement with Lord Gowrie pursuant to which his 1996 base
annual salary will be B.P.20,000.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amendment to its Annual Report on Form 10-K to
be signed on its behalf by the undersigned, thereunto duly authorized.
SOTHEBY'S HOLDINGS, INC.
By: /s/ KEVIN A. BOUSQUETTE
..................................
Kevin A. Bousquette
Senior Vice President and Chief
Financial Officer
June 12 , 1996
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