BID Sothebys

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed by the Registrant  ☒                            

Filed by a Party other than the Registrant  ☐

Check the appropriate box:  

SOTHEBY’S

(Name of Registrant as Specified in Its Charter)

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

Payment of Filing Fee (Check the appropriate box):

August 7, 2019

Dear Fellow Stockholder:

On behalf of the board of directors of Sotheby’s (the “Board”), we are pleased to invite you to attend a Special Meeting of Stockholders (the “special meeting”). The special meeting will be held at our offices located at 1334 York Avenue, New York 10021, on Thursday, September 5, 2019, at 9:00 a.m., Eastern Daylight Saving Time.

On June 16, 2019, Sotheby’s entered into an Agreement and Plan of Merger, as it may be amended from time to time (the “merger agreement”), with BidFair USA LLC, a Delaware limited liability company (“Parent”), and BidFair MergeRight Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”). Pursuant to the merger agreement, Merger Sub will be merged with and into Sotheby’s (the “merger”), with Sotheby’s continuing as the surviving corporation and a wholly owned subsidiary of Parent. At the special meeting you will be asked to consider and vote upon (i) a proposal to adopt the merger agreement and (ii) a proposal to approve, by non-binding, advisory vote, certain compensation arrangements for Sotheby’s named executive officers in connection with the merger.

If the merger is completed, you will be entitled to receive $57.00 in cash, without interest, for each share of Sotheby’s common stock owned by you, which represents a premium of approximately 61% to the closing price of Sotheby’s common stock as of June 14, 2019, the last trading day prior to the public announcement of the execution of the merger agreement.

The Board has (i) determined that (a) the merger agreement, (b) the equity commitment letter, dated June 16, 2019, from Next Alt S.à r.l. to Parent, (c) the guaranty of Next Luxembourg S.C.Sp., dated June 16, 2019, and (d) the voting and support agreement, dated June 16, 2019, by and among Parent, Merger Sub and certain stockholders of Sotheby’s (we refer to (b), (c) and (d), collectively, as the “ancillary documents”), the merger and the other transactions contemplated by the merger agreement and the ancillary documents are advisable to, and in the best interests of, Sotheby’s and its stockholders; (ii) approved and declared advisable the merger agreement and the execution, delivery, and performance by Sotheby’s of the merger agreement and the consummation of the merger and the other transactions contemplated by the merger agreement; (iii) approved the ancillary documents and the execution, delivery and performance of the ancillary documents by their respective parties and the consummation of the transactions contemplated by the ancillary documents; (iv) directed that the merger agreement be submitted to Sotheby’s stockholders for adoption at the special meeting; and (v) recommended that Sotheby’s stockholders vote to adopt the merger agreement and to approve and/or adopt such other matters that are submitted to the stockholders at the special meeting in connection with the merger agreement. Our Board made its determination after consultation with its legal and financial advisors and consideration of a number of factors.

Approval of the proposal to adopt the merger agreement requires the affirmative vote of the holders of a majority of the shares of Sotheby’s common stock outstanding as of the close of business on the record date for the special meeting. Our Board recommends that you vote “FOR” approval of the proposal to adopt the merger agreement.

The proposal to approve, by non-binding, advisory vote, certain compensation arrangements for Sotheby’s named executive officers in connection with the merger requires the affirmative vote of the holders of a majority of the shares of Sotheby’s common stock that are present in person or by proxy at the special meeting and entitled to vote on such proposal. Our Board recommends that you vote “FOR” the proposal to approve, by non-binding, advisory vote, certain compensation arrangements for Sotheby’s named executive officers in connection with the merger.

Your vote is very important. The merger cannot be completed unless the merger agreement is adopted by the affirmative vote of the holders of a majority of the outstanding shares of Sotheby’s common stock entitled to vote on the proposal to adopt the merger agreement. Whether or not you plan to attend the special meeting, please complete, date, sign and return, as promptly as possible, the enclosed proxy card in the accompanying prepaid reply envelope, or submit your proxy by telephone or the Internet. If you attend the special meeting and vote in person, your vote by

ballot will revoke any proxy previously submitted. The failure to return your proxy or vote at the special meeting in person will have the same effect as a vote “AGAINST” approval of the proposal to adopt the merger agreement.

If your shares of common stock are held in “street name” by your bank, brokerage firm or other nominee, your bank, brokerage firm or other nominee will be unable to vote your shares of common stock without instructions from you. You should instruct your bank, brokerage firm or other nominee to vote your shares of common stock in accordance with the procedures provided by your bank, brokerage firm or other nominee. The failure to instruct your bank, brokerage firm or other nominee to vote your shares of common stock “FOR” approval of the proposal to adopt the merger agreement will have the same effect as voting “AGAINST” approval of the proposal to adopt the merger agreement.

The accompanying proxy statement provides you with detailed information about the special meeting and the merger agreement. A copy of the merger agreement is attached as Annex A to the proxy statement, and is incorporated by reference therein. We encourage you to read the entire proxy statement and its annexes, including the merger agreement, carefully. You may also obtain additional information about Sotheby’s from documents we have filed with the Securities and Exchange Commission.

Your vote is very important to us. Regardless of the number of shares you own and whether or not you attend the meeting, please vote. You may vote by toll-free telephone, via the Internet or, if you request that the proxy materials be mailed to you, by completing, dating and signing the proxy card and returning it in the envelope provided. No postage is required if the proxy card is mailed in the United States. If present at the meeting, you may revoke your proxy and vote in person.

Attendance at the meeting will be limited to stockholders as of August 6, 2019, the record date for the special meeting, or their authorized representatives, and our guests.

If you have any questions or need assistance voting your shares of Sotheby’s common stock, please contact Innisfree M&A Incorporated, our proxy solicitor, by calling toll-free at (888) 750-5834. Banks and brokers should call at (212) 750-5833. We look forward to seeing you at the meeting.

Cordially,

Domenico De Sole

Chairman of the Board of Directors

Thomas S. Smith, Jr.

President and Chief Executive Officer

The proxy statement is dated August 7, 2019, and is first being mailed on or about August 7, 2019 to our stockholders who owned shares of Sotheby’s common stock as of the close of business on August 6, 2019.

August 7, 2019

arrangements for the Company’s named executive officers in connection with the merger requires the affirmative vote of the holders of a majority of the shares of the Company’s common stock that are present in person or by proxy at the special meeting and entitled to vote on such proposal.

The Board recommends that you vote “FOR” approval of the proposal to adopt the merger agreement and “FOR” approval of the proposal to approve, by non-binding, advisory vote, certain compensation arrangements for the Company’s named executive officers in connection with the merger.

Your vote is very important, regardless of the number of shares of our common stock you own. Because stockholders cannot take any action at the meeting unless a majority of our common stock issued and outstanding and entitled to vote thereat is represented, it is important that you attend the meeting in person or are represented by proxy at the meeting. The merger cannot be completed unless the merger agreement is adopted by the affirmative vote of the holders of a majority of the shares of our outstanding common stock entitled to vote thereon. Whether or not you plan to attend the special meeting, please complete, date, sign and return, as promptly as possible, the enclosed proxy card in the accompanying postage-paid reply envelope, or submit your proxy by telephone or the Internet. If your shares of our common stock are held in “street name” by your bank, brokerage firm or other nominee, your bank, brokerage firm or other nominee will be unable to vote your shares of our common stock without instructions from you. You should instruct your bank, brokerage firm or other nominee to vote your shares of our common stock in accordance with the procedures provided by your bank, brokerage firm or other nominee. If you fail to return your proxy card, submit your proxy by telephone or the Internet or vote in person, or if your shares are held in “street name” by your bank, brokerage firm or other nominee and you fail to instruct your bank, brokerage firm or other nominee to vote your shares of common stock, your shares of our common stock will not be counted for purposes of determining whether a quorum is present at the special meeting and will have the same effect as a vote “AGAINST” approval of the proposal to adopt the merger agreement.

Stockholders who do not vote in favor of the proposal to approve the merger agreement, and who object in writing to the merger prior to the special meeting and comply with all of the applicable requirements of Delaware law, which are summarized in the section entitled “Appraisal Rights” in the accompanying proxy statement and reproduced in its entirety as Annex D to this proxy statement, will be entitled to rights of appraisal to obtain the fair value of their shares of common stock of the Company.

You may revoke your proxy before the special meeting, by voting over the Internet or by telephone (only your latest Internet or telephone vote is counted) or by signing a new proxy and mailing it, in each case, in accordance with the instructions on the enclosed proxy card. In addition, you may revoke your proxy by attending the special meeting, requesting that your proxy be revoked and voting in person; however, attending the special meeting will not revoke your Internet vote, telephone vote or proxy, as the case may be, unless you specifically request it.

The Board has fixed the close of business on August 6, 2019 as the record date for determination of stockholders entitled to receive notice of, and to vote at, the special meeting and any adjournments or postponements thereof. Only stockholders of record as of the close of business on the record date are entitled to receive notice of, and to vote at (in person or by proxy), the special meeting and at any adjournment or postponement thereof. You will be entitled to one vote for each share of the Company’s common stock that you owned on the record date. A complete list of our stockholders of record entitled to vote at the special meeting will be available for inspection at our principal executive offices at 1334 York Avenue, New York 10021 at least ten (10) days prior to the date of the special meeting and continuing through the special meeting for any purpose germane to the meeting. The list will also be available at the meeting for inspection by any stockholder present at the meeting.

Only stockholders of record (including “street name” stockholders who can show that they beneficially owned our common stock on the record date), their duly appointed proxy holders and our guests may attend the special meeting. If you hold your shares through a bank, brokerage firm or other nominee, you will not be admitted to the special meeting unless you bring a legal proxy or a copy of a statement (such as a brokerage statement) from your bank, brokerage firm or other nominee reflecting your stock ownership as of the record date. Additionally, in order to be admitted to the special meeting, you must bring a driver’s license, passport or other form of government-issued identification to verify your identity. If you are the representative of a corporate or institutional stockholder, you must present valid photo identification along with proof that you are the representative of such stockholder.

WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN, AS PROMPTLY AS POSSIBLE, THE ENCLOSED PROXY CARD IN THE ACCOMPANYING POSTAGE PAID REPLY ENVELOPE, OR SUBMIT YOUR PROXY BY TELEPHONE OR THE INTERNET. IF YOU ATTEND THE SPECIAL MEETING AND VOTE IN PERSON, YOUR VOTE BY BALLOT WILL REVOKE ANY PROXY PREVIOUSLY SUBMITTED.

By Order of the Board of Directors

David G. Schwartz

Senior Vice President, Chief Securities Counsel

and Corporate Secretary

1334 York Avenue

New York, New York 10021

PROXY STATEMENT

Special Meeting of Stockholders

Introduction

This proxy statement is being furnished to the stockholders of Sotheby’s, a Delaware corporation (the “Company” or “Sotheby’s”) in connection with the solicitation of proxies by our board of directors (the “Board”), for use at a special meeting of stockholders and at any adjournments thereof (the “special meeting”). Stockholders will be asked:

A copy of the merger agreement is attached as Annex A to the accompanying proxy statement. Pursuant to the merger agreement, Merger Sub will be merged with and into the Company (the “merger”), with the Company continuing as the surviving corporation and a wholly owned subsidiary of Parent.

SUMMARY

The following summary highlights selected information in this proxy statement and may not contain all the information that may be important to you. Accordingly, we encourage you to read carefully this entire proxy statement, its annexes and the documents referred to in this proxy statement. Each item in this summary includes a page reference directing you to a more complete description of that topic. You may obtain the information incorporated by reference in this proxy statement without charge by following the instructions under “Where You Can Find More Information” beginning on page 125 of this proxy statement.

Parties to the Merger (Page 24)

Sotheby’s

The Company, a Delaware corporation, with headquarters in New York, New York, has been uniting collectors with world-class works of art since 1744. The Company presents auctions in ten different salesrooms, including New York, London, Hong Kong and Paris, and Sotheby’s BidNow program allows visitors to view all auctions live online and place bids from anywhere in the world.

The Company has a global network of 80 offices in 40 countries and is the oldest company listed on the New York Stock Exchange, under the symbol “BID.”

BidFair USA LLC

BidFair USA LLC, a Delaware limited liability company, is a special purpose vehicle formed for purposes of effectuating the merger.

BidFair MergeRight Inc.

BidFair MergeRight Inc., a Delaware corporation, is a special purpose vehicle formed for purposes of effectuating the merger. BidFair MergeRight Inc. is one hundred percent (100%) owned by BidFair USA LLC.

The Special Meeting (Page 25)

Time, Place and Purpose of the Special Meeting (Page 25)

This proxy statement is being furnished to our stockholders as part of the solicitation of proxies by the Board for use at the special meeting to be held at the Company’s offices, 1334 York Avenue, New York, NY 10021, on Thursday, September 5, 2019, at 9:00 a.m., Eastern Daylight Saving Time.

At the special meeting, holders of our Common Stock, par value $0.01 per share (our “common stock,” and the holders of which, our “stockholders”), will be asked to approve the merger proposal and the compensation proposal.

Record Date and Quorum (Page 25)

You are entitled to receive notice of, and to vote at, the special meeting if you owned shares of our common stock at the close of business on August 6, 2019, which the Board has set as the record date for the special meeting. As of the close of business on the record date, there were 46,613,735 shares of common stock outstanding. Each holder of our common stock is entitled to cast one vote per share. The

Summary

presence at the special meeting, in person or represented by proxy, of the holders of a majority of the shares of the Company’s common stock outstanding as of the close of business on the record date constitutes a quorum. Abstentions (as described in the section entitled “The Special Meeting—Vote Required” starting on page 26) are counted as present for the purpose of determining whether a quorum is present.

Vote Required (Page 26)

Approval of the merger proposal requires the affirmative vote of the holders of a majority of the shares of our common stock outstanding as of the close of business on the record date.

Approval of the compensation proposal requires the affirmative vote of the holders of a majority of the shares of our common stock that are present in person or by proxy at the special meeting and entitled to vote on such proposal.

As of the record date, the current directors and executive officers of the Company beneficially owned and were entitled to vote, in the aggregate, 7,179,122 shares of our common stock (not including any shares of our common stock deliverable upon exercise of or underlying any Company DSUs, Company PSUs or Company RSUs (as defined below)), representing approximately 15.40% of the outstanding voting power of our common stock.

Proxies and Revocation (Page 29)

Any stockholder of record entitled to vote at the special meeting may vote in person by appearing at the special meeting, or by submitting a proxy via the Internet, by telephone, or by mail using the enclosed postage-paid envelope. If you are a beneficial owner of our common stock and your shares are held in “street name,” you should instruct your bank, brokerage firm or other nominee on how to vote your shares of our common stock using the instructions provided by your bank, brokerage firm or other nominee. If you fail to submit a proxy or to vote in person at the special meeting, or you do not provide your bank, brokerage firm or other nominee with instructions, as applicable, your shares of our common stock will not be voted on the merger proposal, which will have the same effect as a vote “AGAINST” approval of the merger proposal.

You have the right to revoke a proxy. You may revoke your proxy before the special meeting, by voting over the Internet or by telephone (only your latest Internet or telephone vote is counted) or by signing a new proxy and mailing it, in each case, in accordance with the instructions on the enclosed proxy card. In addition, you may revoke your proxy by attending the special meeting, requesting that your proxy be revoked and voting in person; however, attending the special meeting will not revoke your Internet vote, telephone vote or proxy, as the case may be, unless you specifically request it.

The Merger (Page 32)

The merger agreement provides that Merger Sub will merge with and into the Company. The Company will be the surviving corporation following the merger. We refer to the time when the merger becomes effective as the effective time. As a result of the merger, the Company will cease to be a publicly traded company and will become a wholly owned subsidiary of Parent. You will not own any shares of the capital stock of the surviving corporation. Unless the merger is terminated in accordance with the merger agreement, the closing of the merger (the “closing”), will take place on the fifth (5 ^th ) business day after

Summary

certain conditions set forth in the merger agreement have been satisfied or waived by the party entitled to the benefit of such condition (the “closing date”).

The Merger Consideration (Page 32)

In the merger, each outstanding share of our common stock will automatically be converted into the right to receive an amount of cash equal to $57.00 (the “per share merger consideration”), without interest, other than shares of our common stock that are (i) held in the treasury of the Company or owned by any subsidiary of the Company or owned by Parent, Merger Sub or any other subsidiary or affiliate of Parent (collectively, the “excluded shares”); and (ii) owned by stockholders who have neither voted in favor of the merger nor consented thereto in writing and properly exercised and perfected their statutory rights of appraisal in accordance with Section 262 of the DGCL (the “dissenting shares”).

Reasons for the Merger; Recommendation of the Board (Page 46)

After careful consideration of various factors as described in the section entitled “The Merger—Reasons for the Merger; Recommendation of the Company’s Board of Directors” beginning on page 46, the Board has determined that (i) the merger agreement, (ii) the equity commitment letter, dated June 16, 2019, from Next Alt S.à r.l. (“NEXT”) to Parent, (iii) the guaranty of Next Luxembourg S.C.Sp., dated June 16, 2019 (the “guaranty”), and (iv) the voting and support agreement, dated June 16, 2019, by and among Parent, Merger Sub and certain stockholders of Sotheby’s (we refer to (ii), (iii) and (iv) collectively as the “ancillary documents”), the merger and the other transactions contemplated by the merger agreement and the ancillary documents, are advisable to, and in the best interests of, the Company and the Company’s stockholders and approved and declared advisable the merger agreement and the execution, delivery and performance by the Company of the merger agreement and the consummation of the merger and the other transactions contemplated by the merger agreement. The Board approved the ancillary documents and the execution, delivery and performance of the ancillary documents by their respective parties and the consummation of the transactions contemplated by the ancillary documents. The Board has also resolved that the merger agreement be submitted for consideration by the stockholders of the Company at the special meeting and recommended that the stockholders of the Company vote to adopt the merger agreement and to approve and/or adopt such other matters that are submitted to the stockholders at the special meeting in connection with the merger agreement. Our Board made its determination after consultation with its legal and financial advisors and consideration of a number of factors.

In considering the recommendation of the Board with respect to the merger proposal, you should be aware that our directors and executive officers may have interests in the merger that are different from, or in addition to, yours. The Board was aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement and the merger, and in recommending that the merger agreement be adopted by the stockholders of the Company. See “The Merger—Interests of Certain Persons in the Merger” beginning on page 67.

Our Board recommends that you vote “FOR” approval of the merger proposal and “FOR” approval of the compensation proposal.

Summary

Opinion of Financial Advisor (Page 51)

On June 16, 2019, at a meeting of the Board, LionTree Advisors LLC (“LionTree”) rendered an oral opinion to the Board (which was subsequently confirmed in writing by delivery of LionTree’s written opinion dated June 16, 2019) as to the fairness, from a financial point of view, as of such date, of the per share merger consideration to the holders of Sotheby’s common stock, other than excluded shares and dissenting shares, based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken, and other matters considered by LionTree in preparing its opinion.

LionTree’s opinion was provided to, and for the benefit of, the Board in connection with its evaluation of the merger and only addressed the fairness, from a financial point of view, of the per share merger consideration to be received by the holders of Sotheby’s common stock (other than excluded shares and dissenting shares) in the merger pursuant to the merger agreement (without giving any effect to any impact of the merger and other transactions contemplated by the merger agreement on any particular stockholder of Sotheby’s other than in its capacity as a holder of Sotheby’s common stock). The summary of LionTree’s opinion in this proxy statement is qualified in its entirety by reference to the full text of its written opinion, which is included as Annex C to this proxy statement and incorporated herein by reference, and sets forth the procedures followed, assumptions made, qualifications and limitations on the review undertaken, and other matters considered by LionTree in preparing its opinion. However, neither LionTree’s opinion nor the summary of its opinion and the related analyses set forth in this proxy statement constitutes a recommendation to any holder of Sotheby’s common stock as to how such stockholder should vote or act on any matter relating to the merger and other transactions contemplated by the merger agreement or any other matter.

Financing of the Merger (Page 64)

The merger agreement does not contain any condition to the obligations of Parent or Merger Sub relating to the receipt of financing. Parent and Merger Sub have secured committed financing, consisting of a combination of equity financing to be provided by NEXT and debt financing from BNP Paribas Securities Corp. and BNP Paribas, the aggregate proceeds of which, together with cash or cash equivalents held by Parent as of the effective time, Parent and Merger Sub have represented will be sufficient for Parent and Merger Sub to pay all amounts required to be paid by Parent and Merger Sub in cash in connection with the merger and the other transactions contemplated by the merger agreement, including the aggregate per share merger consideration and other fees and expenses under the merger agreement.

For further information with respect to the financing of the merger, see the section titled “The Merger—Financing of the Merger” beginning on page 64.

Interests of Certain Persons in the Merger (Page 67)

In considering the recommendation of the Board that you vote to adopt the merger agreement, you should be aware that aside from their interests as Company stockholders, the Company’s directors and executive officers have interests in the merger that are different from, or in addition to, those of Company stockholders generally. These interests include, among others:

Summary

Members of the Board were aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement and the merger, and in recommending to the Company’s stockholders that the merger agreement be adopted. For more information, see the sections entitled “The Merger—Background of the Merger” beginning on page 32 and “The Merger—Reasons for the Merger; Recommendation of the Company’s Board of Directors” beginning on page 46. These interests are described in more detail below, and certain of them are quantified in the narrative and in

Summary

the section entitled “Non-Binding, Advisory Vote on Merger-Related Compensation for the Company’s Named Executive Officers—Golden Parachute Compensation” beginning on page 108.

Material U.S. Federal Income Tax Consequences of the Merger (Page 73)

If you are a U.S. holder (as defined under “The Merger—Material U.S. Federal Income Tax Consequences of the Merger”), the receipt of cash in exchange for shares of common stock pursuant to the merger will generally be a taxable transaction for U.S. federal income tax purposes. You should consult your own tax advisor regarding the particular tax consequences to you of the exchange of shares of common stock for cash pursuant to the merger in light of your particular circumstances (including the application and effect of any state, local or foreign income and other tax laws). You should read “The Merger—Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 73 for a more detailed discussion of the U.S. Federal income tax consequences of the merger. You should also consult your tax advisor for a complete analysis of the effect of the merger on your federal, state and local and/or foreign taxes.

Regulatory Approvals (Page 75)

The Company, Parent and Merger Sub have agreed to cooperate with each other and use commercially reasonable efforts to promptly take all actions, and to do, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate, in the most expeditious manner practicable, the merger and the other transactions contemplated by the merger agreement, including preparing and filing all forms, registrations and notices required to be filed and taking such actions as are reasonably necessary to obtain any requisite approvals, consents, orders, exemptions or waivers by any governmental authority or other third party. These filings and actions include (i) those required pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), (ii) the filing of a joint voluntary notice to the Committee on Foreign Investment in the United States (“CFIUS”), and (iii) filings required by certain other non-U.S. governmental authorities relating to antitrust and competition matters. You should read “The Merger—Regulatory Approvals” beginning on page 75 for a more detailed discussion of the parties’ obligations with respect to obtaining regulatory and other third-party approvals in connection with the merger.

On July 5, 2019, the Company and Parent submitted a draft joint voluntary notice with CFIUS. On July 22, 2019, the Company and Parent filed the final joint voluntary notice with CFIUS. On July 29, 2019, CFIUS accepted the final joint voluntary notice. In accordance with the letter of acceptance from CFIUS, the 45-day initial review period commenced on July 29, 2019 and will conclude no later than September 11, 2019.

On July 10, 2019, the Federal Trade Commission (the “FTC”) granted early termination of the waiting period under the HSR Act.

Litigation Related to the Merger (Page 77)

On July 17, July 19, July 23 and August 1, 2019, purported stockholders of the Company filed actions in the United States District Court for the Southern District of New York and in the United States District Court for the District of Delaware, captioned Stein v. Sotheby’s, et al. , Case No. 1:19-cv-06669 (S.D.N.Y.),

Summary

Goffmna v. Sotheby’s, et al. , Case No. 1:19-cv-06733 (S.D.N.Y.), Kent v. Sotheby’s, et al. , Case No. 1:19-cv-01374-UNA (D. Del.) and Stevens v. Sotheby’s, et al. , Case No. 1:19-cv-7198 (S.D.N.Y), respectively, alleging that a preliminary version of this proxy statement was inaccurate or incomplete. The actions name the Company and the members of the Board as defendants. The Company believes the allegations in these actions are without merit.

For additional information regarding the pending litigation, please see the section entitled “The Merger—Litigation Related to the Merger” beginning on page 76.

The Merger Agreement (Page 78)

Treatment of Common Stock, Stock-Based Awards and Performance Awards (Page 79)

Summary

Summary

No Solicitation of Alternative Transaction Proposals; Board Recommendation Changes (Page 89)

The merger agreement provides that we are not permitted to solicit, initiate, propose or knowingly facilitate, induce or encourage any inquiries or the making of any proposal or offer that constitutes or would reasonably be expected to lead to an alternative transaction proposal (as defined in the section entitled “The Merger Agreement—No Solicitation of Alternative Transaction Proposals; Board Recommendation Changes” beginning on page 89). The merger agreement also provides that we may not enter into, continue or otherwise participate or engage in any discussions or negotiations regarding, or furnish to any person any information with respect to, or cooperate in any way that would otherwise reasonably be expected to lead to, any alternative transaction proposal.

Notwithstanding these restrictions, under certain circumstances, we may, prior to the time the merger agreement is adopted by our stockholders, and subject to certain obligations to provide Parent with advance written notice, (x) make a Company adverse recommendation change (as defined in the section entitled “The Merger Agreement—No Solicitation of Alternative Transaction Proposals; Board Recommendation Changes—Non-Solicitation Exceptions” beginning on page 91) (A)(1) in response to a superior proposal (as defined in the section entitled “The Merger Agreement—No Solicitation of Alternative Transaction Proposals; Board Recommendation Changes” beginning on page 89) that is made and not withdrawn (and that continues to be a superior proposal) or (2) if an intervening event (as defined in the section entitled “The Merger Agreement—No Solicitation of Alternative Transaction Proposals; Board Recommendation Changes—Non-Solicitation Exceptions” beginning on page 91) has occurred and (B) the Board determines in good faith (after consultation with its outside legal counsel and financial advisor) that failure to take such action in response to such superior proposal or intervening event, as applicable, would violate the directors’ fiduciary duties under applicable law, or (y) subject to certain obligations to negotiate with Parent in good faith prior to termination and the payment of the Company termination fee (as defined in the section entitled “Summary—The Merger Agreement—Termination” beginning on page 10), authorize the Company to terminate the merger agreement in order to enter into a definitive written agreement with respect to such superior proposal (a “superior proposal agreement”) if the Board determines in good faith (after consultation with its outside legal counsel and independent financial advisor) that, in light of such superior proposal, the failure to terminate the merger agreement and enter into a superior proposal agreement with respect to such superior proposal would violate the directors’ fiduciary duties under applicable law.

Conditions to the Merger (Page 98)

The respective obligations of the Company, Parent and Merger Sub to consummate the merger are subject to the satisfaction or waiver of certain customary conditions, including the adoption of the merger agreement by our stockholders, receipt of certain regulatory approvals, the absence of any legal prohibitions to the consummation of the merger, the accuracy of the representations and warranties of the parties and compliance by the parties with their respective obligations under the merger agreement. See “The Merger Agreement—Conditions to the Merger” beginning on page 98.

Termination (Page 100)

We and Parent may, by mutual written consent, terminate the merger agreement and abandon the merger at any time prior to the effective time.

Summary

The merger agreement may also be terminated and the merger abandoned at any time prior to the effective time as follows:

Summary

Termination Fee (Page 101)

The Company termination fee and the Parent expense reimbursement would be payable by us if:

Summary

Parent Termination Fee (Page 101)

Parent will be required to pay the Company a termination fee equal to $221,710,000 (the “Parent termination fee”), if:

and in any such case, the sole reason Parent was unable to consummate the merger was due to its failure to obtain all or any portion of its debt financing (as described in the section entitled “The Merger—Financing of the Merger” beginning on page 64).

Remedies (Page 103)

No termination of the merger agreement will relieve or release any party to the merger agreement from any liabilities or damages arising out of its willful breach of any provision of the merger agreement.

The Company’s right to receive the Parent termination fee will be the sole and exclusive remedy of the Company for any loss suffered due to the failure of the closing to occur under circumstances that require the payment of the Parent termination fee.

Prior to termination of the merger agreement, each party is entitled to enforce specifically the terms and provisions of the merger agreement and to obtain an injunction to prevent breaches of the merger agreement.

Market Price of Common Stock (Page 112)

The closing price of our common stock on the New York Stock Exchange (the “NYSE”) on June 14, 2019, the last trading day prior to the public announcement of the execution of the merger agreement, was $35.39 per share of our common stock. If the merger is completed, you will be entitled to receive $57.00 in cash, without interest, for each share of our common stock owned by you (unless you have properly exercised, and not lost, your appraisal rights with respect to such shares), which represents a premium of 61% to Company’s closing price on June 14, 2019, and a 56.3% premium to the Company’s 30 trading-day volume weighted average share price on June 14, 2019.

Summary

On August 6, 2019, the most recent practicable date before this proxy statement was mailed to our stockholders, the closing price for our common stock on the NYSE was $57.94 per share of common stock. You are encouraged to obtain current market quotations for our common stock in connection with voting your shares of common stock.

Appraisal Rights (Page 116)

If the merger is completed, the Company’s stockholders who do not vote in favor of the adoption of the merger agreement are entitled to appraisal rights under Section 262 of the General Corporation Law of the State of Delaware (the “DGCL”), but only if they fully comply with all of the applicable legal requirements of Section 262 of the DGCL, which are summarized in this proxy statement in the section entitled “Appraisal Rights” beginning on page 116 and set forth in their entirety in Section 262 of the DGCL (attached to this proxy statement as Annex D). This means that you may be entitled to have the fair value of your shares of our common stock determined by the Delaware Court of Chancery and to receive payment based on that valuation in lieu of the per share merger consideration if you follow exactly the procedures set forth in Section 262 of the DGCL. The ultimate amount you may receive in an appraisal proceeding may be less than, equal to or more than the amount you would have received under the merger agreement.

To exercise your appraisal rights, you must, among other things, submit a written demand for appraisal to the Company before the vote is taken on the adoption of the merger agreement (and must not fail to perfect or effectively withdraw your demand or otherwise waive or lose your right to appraisal) and you must not vote (either in person or by proxy) in favor of the adoption of the merger agreement. If you fail to follow exactly the procedures set forth in Section 262 of the DGCL, you will lose your appraisal rights. The requirements for exercising appraisal rights are further described in the section entitled “Appraisal Rights” beginning on page 116 and the text of the DGCL appraisal rights statute reproduced in its entirety as Annex D to this proxy statement. We encourage you to read these provisions carefully and in their entirety. If you hold your shares of our common stock through a bank, brokerage firm or other nominee and you wish to exercise your appraisal rights, you should consult with your bank, brokerage firm or other nominee to determine the appropriate procedures for the making of a demand for appraisal by your bank, brokerage firm or other nominee. In view of the complexity of the DGCL relating to appraisal rights, stockholders who may wish to pursue appraisal rights should consult their legal and financial advisors promptly. The discussion of appraisal rights in this proxy statement is not a full summary of the law pertaining to appraisal rights under the DGCL and is qualified in its entirety by the full text of Section 262 of the DGCL, a copy of which is attached to this proxy statement as Annex D.

Delisting and Deregistration of Common Stock (Page 122)

If the merger is completed, our common stock will be delisted from the NYSE and deregistered under the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder (the “Exchange Act”) and we will no longer file periodic reports with the Securities and Exchange Commission (the “SEC”) on account of our common stock.

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

The following questions and answers are intended to briefly address some commonly asked questions regarding the merger, the merger agreement, and the special meeting. These questions and answers may not address all questions that may be important to you as a Company stockholder. Please refer to the “Summary” beginning on page 2 and the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to in this proxy statement, which you should read carefully and in their entirety.

Questions and Answers About the Special Meeting and the Merger

Additionally, if the merger is not completed, the merger agreement will be terminated. Depending on the circumstances surrounding the termination, it is possible that the Company will be required to pay Parent a termination fee of $110,860,000. It is also possible, if Parent or the Company terminates the agreement under certain circumstances relating to Parent’s failure to obtain financing for the merger, that Parent would be required to pay the Company a fee of $221,710,000.

Questions and Answers About the Special Meeting and the Merger

Because the affirmative vote required to approve the merger proposal is based upon the total number of outstanding shares of our common stock, if you fail to submit a proxy or vote in person at the special meeting, or abstain, or you do not provide your bank, brokerage firm or other nominee with instructions, as applicable, this will have the same effect as a vote “AGAINST” approval of the merger proposal. If your shares of our common stock are held in “street name” by your bank, brokerage firm or other nominee and you do not instruct the nominee how to vote your shares, the failure to instruct your nominee will have the same effect as a vote “AGAINST” the merger proposal.

Questions and Answers About the Special Meeting and the Merger

If your shares of our common stock are held by a bank, broker, trustee or nominee, you are considered the beneficial owner of shares held in “street name,” and your bank, broker, trustee or nominee, or their intermediary, is considered the stockholder of record with respect to those shares. Your bank, broker, trustee or nominee should send you, as the beneficial owner, a package describing the procedure for voting your shares of our common stock. You should follow the instructions provided by them to vote your shares of our common stock. You are invited to attend the special meeting; however, you may not vote these shares of our common stock in person at the special meeting unless you obtain a “legal proxy” from your bank, broker, trustee or nominee that holds your shares of our common stock, giving you the right to vote the shares of our common stock at the special meeting.

Questions and Answers About the Special Meeting and the Merger

Questions and Answers About the Special Meeting and the Merger

Beneficial Owner . If you are a beneficial owner, please refer to the instructions provided by your bank, brokerage firm or other nominee to see which of the above choices are available to you. Please note that if you are a beneficial owner and wish to vote in person at the special meeting, you must provide a legal proxy from your bank, brokerage firm or other nominee at the special meeting. To attend the special meeting in person (regardless of whether you intend to vote your shares in person at the special meeting), you must bring with you to the special meeting a valid photo identification and proof of your beneficial ownership. For more information, see the instructions under “The Special Meeting—Attendance” beginning on page 26 of this proxy statement.

IT IS IMPORTANT THAT YOU PROMPTLY VOTE YOUR SHARES OF OUR COMMON STOCK. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING. PLEASE COMPLETE, DATE, SIGN AND RETURN, AS PROMPTLY AS POSSIBLE, THE ENCLOSED PROXY CARD IN THE ACCOMPANYING PREPAID REPLY ENVELOPE, OR SUBMIT YOUR PROXY BY TELEPHONE OR THE INTERNET. STOCKHOLDERS WHO ATTEND THE SPECIAL MEETING MAY REVOKE THEIR PROXIES BY VOTING IN PERSON.

If you hold shares in street name, you should contact the intermediary for instructions on how to change your vote.

Questions and Answers About the Special Meeting and the Merger

If you own shares that are registered in your own name and return a signed proxy card or grant a proxy via the Internet or by telephone, but do not indicate how you wish your shares to be voted, the shares represented by your properly signed proxy will be voted “FOR” approval of the merger proposal and “FOR” approval of the compensation proposal.

Questions and Answers About the Special Meeting and the Merger

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this communication may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Exchange Act and the Private Securities Litigation Reform Act of 1995, each as amended. Forward-looking statements provide current expectations of future events and include any statement that does not directly relate to any historical or current fact. Words such as “anticipates,” “believes,” “expects,” “intends,” “plans,” “projects,” or other similar expressions may identify such forward-looking statements.

Actual results may differ materially from those discussed in forward-looking statements as a result of factors, risks and uncertainties over which we have no control. These factors, risks and uncertainties include, but are not limited to, the following: (i) conditions to the completion of the proposed acquisition, including stockholder approval of the proposed acquisition, may not be satisfied or the regulatory approvals required for the proposed acquisition may not be obtained on the terms expected or on the anticipated schedule; (ii) the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement between the parties to the proposed acquisition; (iii) the effect of the announcement or pendency of the proposed acquisition on the Company’s business relationships, operating results, and business generally; (iv) risks that the proposed acquisition disrupts the Company’s current plans and operations and potential difficulties in the Company’s employee retention as a result of the proposed acquisition; (v) risks related to diverting management’s attention from our ongoing business operations; (vi) potential litigation that may be instituted against the Company or its directors or officers related to the proposed acquisition or the merger agreement between the parties to the proposed acquisition; (vii) the amount of the costs, fees, expenses and other charges related to the proposed acquisition; and (ix) such other factors as are set forth in the Company’s periodic public filings with the SEC, including, but not limited to, those described under the headings “Risk Factors” and “Forward Looking Statements” in its Form 10-K for the fiscal year ended December 31, 2018 and in its other filings made with the SEC from time to time, which are available via the SEC’s website at www.sec.gov.

Forward-looking statements reflect the views and assumptions of management as of the date of this communication with respect to future events. The Company does not undertake, and hereby disclaims, any obligation, unless required to do so by applicable securities laws, to update any forward-looking statements as a result of new information, future events or other factors. The inclusion of any statement in this communication does not constitute an admission by the Company or any other person that the events or circumstances described in such statement are material.

PARTIES TO THE MERGER

The Company

Sotheby’s

1334 York Avenue

New York, New York 10021

Telephone: (212) 894-1210

Sotheby’s, a Delaware corporation, with headquarters in New York, New York, has been uniting collectors with world-class works of art since 1744. Sotheby’s presents auctions in ten different salesrooms, including New York, London, Hong Kong and Paris, and Sotheby’s BidNow program allows visitors to view all auctions live online and place bids from anywhere in the world.

Sotheby’s has a global network of 80 offices in 40 countries and is the oldest company listed on the NYSE, under the symbol “BID.”

Parent

BidFair USA LLC

c/o Hughes Hubbard and Reed LLP,

One Battery Park Plaza, 12th floor

New York, New York 10004

BidFair USA LLC, a Delaware limited liability company, is a special purpose vehicle formed for purposes of effectuating the merger.

Merger Sub

BidFair MergeRight Inc.

c/o Hughes Hubbard and Reed LLP

One Battery Park Plaza, 12th floor

New York, New York 10004

BidFair MergeRight Inc., a Delaware corporation, is a special purpose vehicle formed for purposes of effectuating the merger. BidFair MergeRight Inc. is one hundred percent (100%) owned by BidFair USA LLC.

THE SPECIAL MEETING

Date, Time and Place of the Special Meeting

This proxy statement is being furnished to our stockholders as part of the solicitation of proxies by the Board for use at the special meeting to be held at our offices located at 1334 York Avenue, New York, New York 10021 on September 5, 2019 at 9:00 a.m., Eastern Daylight Saving Time, or at any adjournment or postponement thereof.

Purpose of the Special Meeting

At the special meeting, holders of our common stock will be asked to consider and vote on the following:

THE BOARD RECOMMENDS THAT YOU VOTE “FOR” EACH OF THE ABOVE PROPOSALS.

The Company’s stockholders must approve the merger proposal in order for the merger to occur. If the Company’s stockholders fail to approve the merger proposal, the merger will not occur. A copy of the merger agreement is attached as Annex A to this proxy statement, which we encourage you to read carefully and in its entirety.

The vote on the compensation proposal is a vote separate and apart from the vote on the merger proposal. Accordingly, a stockholder may vote to approve the compensation proposal and vote not to adopt the merger proposal, and vice versa. Because the vote on the compensation proposal is advisory in nature only, it will not be binding on the Company, Parent or the surviving corporation in the merger. Accordingly, if the merger agreement is adopted by the Company’s stockholders and the merger is completed, the merger-related compensation may be paid to the Company’s named executive officers to the extent payable in accordance with the terms of their compensation agreements and arrangements even if the stockholders do not approve the compensation proposal.

Record Date and Quorum

The Board has fixed the close of business on August 6, 2019 as the record date for the determination of stockholders entitled to receive notice of, and to vote at, the special meeting, and any adjournments or postponements thereof. Only holders of record of our common stock as of the close of business on the record date are entitled to receive notice of, and to vote at (in person or by proxy), the special meeting and at any adjournment or postponement thereof.

As of the close of business on the record date, there were 46,613,735 shares of common stock outstanding. Each holder of our common stock is entitled to cast one vote per such share on each matter properly brought before the special meeting for each share of our common stock that such holder owned as of the record date.

The presence at the special meeting, in person or represented by proxy, of the holders of a majority of the shares of our common stock issued and outstanding as of the close of business on the record date

The Special Meeting

constitutes a quorum for the transaction of business at the special meeting. Once a share is represented at the special meeting, it will be counted for the purpose of determining a quorum at the special meeting. Shares of our common stock represented at the special meeting but not voted, including shares of our common stock for which proxies have been received but for which stockholders have abstained, will be treated as present at the special meeting for purposes of determining the presence or absence of a quorum for the transaction of all business. Because brokers do not have discretionary authority to vote on any of the proposals at the special meeting, broker non-votes are not counted for the purpose of determining the presence of a quorum. Your vote is very important, regardless of the number of shares of our common stock you own. Because stockholders cannot take any action at the meeting unless a majority of our common stock issued and outstanding and entitled to vote thereat is represented, it is important that you attend the meeting in person or are represented by proxy at the meeting.

In the event that a quorum is not present at the special meeting, we expect to adjourn or postpone the special meeting until we solicit enough proxies to obtain a quorum. The Company may also adjourn or postpone the special meeting (i) to the extent necessary to ensure that the stockholders are given sufficient time to evaluate any necessary supplement or amendment to the proxy statement in advance of the special meeting, and (ii) if required by applicable law, a governmental authority or a request from the SEC. The Company is required, upon Parent’s request, to adjourn or postpone the special meeting up to two (2) times for a period of up to twenty (20) calendar days each, if, in the reasonable judgment of Parent, there will be an insufficient number of votes of our common stock represented (either in person or by proxy) to achieve the stockholder approval and if such action would not be a violation of the directors’ fiduciary duties under applicable law.

Attendance

Only stockholders who owned shares as of the record date, or their duly appointed proxies, and our guests may attend the special meeting. If you hold your shares through a broker, bank or other record owner, you will not be admitted to the special meeting unless you bring a legal proxy or a copy of a statement (such as a brokerage statement) from your broker, bank or other record owner reflecting your stock ownership as of the record date. Additionally, in order to be admitted to the special meeting, you must bring a driver’s license, passport or other form of government-issued identification to verify your identity. If you are the representative of a corporate or institutional stockholder, you must present valid photo identification along with proof that you are the representative of such stockholder. Please note that cameras, recording devices and other electronic devices will not be permitted at the special meeting.

Vote Required

Approval of the merger proposal requires the affirmative vote of the holders of a majority of the shares of our common stock outstanding as of the close of business on the record date. For the merger proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” Abstentions will not be counted as votes cast in favor of the merger proposal, but will count for the purpose of determining whether a quorum is present. Your vote is very important, regardless of the number of shares of our common stock you own. Because stockholders cannot take any action at the meeting unless a majority of our common stock issued and outstanding and entitled to vote thereat is represented, it is important that you attend the meeting in person or are represented by proxy at the meeting. If you fail to return your proxy card, submit your

The Special Meeting

proxy by telephone or the Internet or vote in person, or if your shares are held in “street name” by your bank, brokerage firm or other nominee and you fail to instruct your bank, brokerage firm or other nominee to vote your shares of common stock, your shares will have the same effect as a vote “AGAINST” approval of the merger proposal.

If your shares of our common stock are registered directly in your name with our transfer agent, Computershare, you are considered, with respect to those shares of our common stock, the stockholder of record. This proxy statement and proxy card have been sent directly to you by the Company. As the stockholder of record, you have the right to vote in person at the meeting or to grant your voting rights directly to the Company or to a third party by a proxy duly executed or transmitted in a manner in accordance with applicable law.

If your shares of our common stock are held in “street name” through a bank, brokerage firm or other nominee, you are considered the beneficial owner of those shares. In that case, this proxy statement has been forwarded to you by your bank, brokerage firm or other nominee who is considered, with respect to those shares of our common stock, the stockholder of record. As the beneficial owner, you have the right to direct your bank, brokerage firm or other nominee how to vote your shares by following their instructions for voting. Your bank, brokerage firm or other nominee should send you, as the beneficial owner, a package describing the procedure for voting your shares.

Banks, brokerage firms or other nominees who hold shares in “street name” for customers generally have the authority to vote on “routine” proposals when they have not received instructions from beneficial owners. However, banks, brokerage firms and other nominees are precluded from exercising their voting discretion with respect to approving non-routine matters, such as the merger proposal and the compensation proposal, and, as a result, absent specific instructions from the beneficial owner of such shares of our common stock, banks, brokerage firms or other nominees are not empowered to vote those shares of our common stock on non-routine matters.

For the purposes of the merger proposal, if you attend the special meeting and abstain on this proposal, or if you have given a proxy and have abstained on this proposal, this will have the same effect as if you voted “AGAINST” approval of the merger proposal. If you do not instruct your bank, brokerage firm or other nominee to vote your shares of our common stock, your shares of our common stock will not be voted, and as broker non-votes, the effect will be the same as a vote “AGAINST” approval of the merger proposal.

Approval of the compensation proposal requires the affirmative vote of the holders of a majority of the shares of our common stock that are present in person or by proxy at the special meeting and entitled to vote on such proposal. For this proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” For purposes of the compensation proposal, if you attend the special meeting and abstain on the compensation proposal, or if you have given a proxy and abstained on the compensation proposal, your shares will not be voted “FOR” or “AGAINST” such proposal, but will have the same effect as a vote “AGAINST” such proposal. If you fail to submit a proxy or vote in person at the special meeting or if your shares of our common stock are held through a bank, brokerage firm or other nominee and you do not instruct your bank, brokerage firm or other nominee to vote your shares of our common stock, your shares of our common stock will not be voted, but this will not have an effect on the proposal to approve the merger-related executive compensation proposal.

The Special Meeting

Voting

If you are a stockholder of record and your shares are registered directly in your name, you may have your shares of our common stock voted on matters presented at the special meeting in any of the following ways:

If you are a beneficial owner of our common stock and your shares are held in “street name,” you should receive instructions from your bank, brokerage firm or other nominee that you must follow in order to have your shares of our common stock voted. Those instructions will identify which of the above choices are available to you in order to have your shares voted. Please note that if you are a beneficial owner and wish to vote in person at the special meeting, you must provide a “legal proxy” from your bank, brokerage firm or other nominee that is the stockholder of record for your shares of our common stock giving you the right to vote the shares at the special meeting. A legal proxy is not the form of proxy enclosed with this proxy statement. You will not be able to vote shares you hold in “street name” through a bank, broker or other nominee in person at the special meeting unless you have a legal proxy from that bank, broker or other nominee issued in your name giving you the right to vote your shares.

If you vote by proxy, regardless of the method you choose to vote, the individuals named on the enclosed proxy card, and each of them, with full power of substitution, will vote your shares of our common stock in the way that you indicate. When completing the Internet or telephone processes or the proxy card, you may specify whether your shares of our common stock should be voted “FOR” or “AGAINST” or to “ABSTAIN” from voting on all, some or none of the specific items of business to come before the special meeting.

If you are a holder of record and you properly sign your proxy card but do not mark the boxes showing how your shares of our common stock should be voted on a matter, the shares of our common stock represented by your properly signed proxy will be voted “FOR” approval of the merger proposal and “FOR” approval of the compensation proposal.

If you have any questions or need assistance voting your shares, please contact Innisfree M&A Incorporated, our proxy solicitor, by calling toll-free at (888) 750-5834. Banks and brokers should call at (212) 750-5833.

YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES OF OUR COMMON STOCK YOU OWN. BECAUSE STOCKHOLDERS CANNOT TAKE ANY ACTION AT THE MEETING UNLESS A

The Special Meeting

MAJORITY OF OUR COMMON STOCK ISSUED AND OUTSTANDING AND ENTITLED TO VOTE THEREAT IS REPRESENTED, IT IS IMPORTANT THAT YOU ATTEND THE MEETING IN PERSON OR ARE REPRESENTED BY PROXY AT THE MEETING. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN, AS PROMPTLY AS POSSIBLE, THE ENCLOSED PROXY CARD IN THE ACCOMPANYING POSTAGE PAID REPLY ENVELOPE, OR SUBMIT YOUR PROXY BY TELEPHONE OR THE INTERNET. IF YOU WILL ATTEND THE SPECIAL MEETING AND VOTE IN PERSON, YOUR VOTE BY BALLOT WILL REVOKE ANY PROXY PREVIOUSLY SUBMITTED.

Voting by the Company’s Directors and Executive Officers

As of the record date, the current directors and executive officers of the Company beneficially owned and were entitled to vote, in the aggregate, 7,179,122 shares of our common stock (not including any shares of our common stock deliverable upon exercise of or underlying any Company DSUs, Company PSUs or Company RSUs), representing approximately 15.40% of the outstanding voting power of our common stock.

Proxies and Revocation

Any stockholder of record entitled to vote at the special meeting may submit a proxy via the Internet, by telephone or by returning the enclosed proxy card in the accompanying postage-paid reply envelope, or may vote in person by appearing at the special meeting. If your shares of our common stock are held in “street name” through a bank, brokerage firm or other nominee, you should instruct your bank, brokerage firm or other nominee on how to vote your shares of our common stock using the instructions provided by your bank, brokerage firm or other nominee. If you are a beneficial owner and wish to vote in person at the special meeting, you must provide a “legal proxy” from the bank, brokerage firm or other nominee that is the stockholder of record for your shares of our common stock giving you the right to vote the shares at the special meeting. If you fail to vote in person at the special meeting or fail to return your proxy card or fail to submit your proxy via the Internet or by telephone, or if your shares are held in “street name” by your bank, brokerage firm or other nominee and you fail to instruct your bank, brokerage firm or other nominee to vote, your shares of our common stock will not be counted for purposes of determining whether a quorum is present at the special meeting and will have the same effect as a vote “AGAINST” approval of the merger proposal. If you fail to vote in person at the special meeting or fail to return your proxy card or fail to submit your proxy by telephone or the Internet, your shares of our common stock will not have an effect on the compensation proposal.

You have the right to revoke a proxy. If your shares are registered directly in your name, you may revoke your proxy or change your vote before the special meeting. To do so, you must do one of the following:

The Special Meeting

If you hold shares in “street name” through a bank, brokerage firm or other nominee, you may submit a new, later-dated voting instruction form or contact your bank, broker or other nominee. You may also vote in person at the special meeting if you obtain a legal proxy.

Anticipated Date of Completion of the Merger

We are working towards completing the merger as soon as possible. Assuming timely receipt of required regulatory approvals and satisfaction of other closing conditions, including the approval by our stockholders of the merger proposal, we anticipate that the merger will be completed during the fourth quarter of 2019. If our stockholders vote to approve the merger proposal, the merger will become effective as promptly as practicable following the satisfaction or waiver of the other conditions to the merger, subject to the terms of the merger agreement. See “The Merger Agreement—Closing and Effective Time” beginning on page 79.

Rights of Stockholders Who Seek Appraisal

If the merger is completed, the Company’s stockholders who do not vote in favor of the adoption of the merger agreement are entitled to appraisal rights under Section 262 of the DGCL in connection with the merger, but only if they fully comply with all the applicable legal requirements for Section 262 of the DGCL, which are summarized in this proxy statement in the section entitled “Appraisal Rights” beginning on page 116 and set forth in their entirety in Section 262 of the DGCL (attached to this proxy statement as Annex D). This means you may be entitled to have the fair value of your shares of our common stock determined by the Delaware Court of Chancery and to receive payment based on that valuation in lieu of the per share merger consideration if you follow exactly the procedures set forth in Section 262 of the DGCL. The ultimate amount you may receive in an appraisal proceeding may be less than, equal to or more than the amount you would have received under the merger agreement.

To exercise your appraisal rights, you must, among other things, submit a written demand for appraisal to the Company before the vote is taken on the adoption of the merger agreement (and must not fail to perfect or effectively withdraw your demand or otherwise waive or lose your rights to appraisal) and you must not vote (either in person or by proxy) in favor of the merger proposal. If you fail to follow exactly the procedures set forth in Section 262 of the DGCL, you will lose your appraisal rights. The requirements for exercising appraisal rights are further described in the section entitled “Appraisal Rights” beginning on page 116 and the text of the DGCL appraisal rights statute reproduced in its entirety as Annex D to this proxy statement. We encourage you to read these provisions carefully and in their entirety. If you hold your shares of our common stock through a bank, brokerage firm or other nominee and you wish to exercise your appraisal rights, you should consult with your bank, brokerage firm or other nominee to determine the appropriate procedures for the making of a demand for appraisal by your bank, brokerage firm or other nominee. In view of the complexity of the DGCL, stockholders who may wish to pursue appraisal rights should consult their legal and financial advisors promptly.

The Special Meeting

Adjournments

Although it is not currently expected, the special meeting may be adjourned or postponed. The Company retains full authority to the extent set forth in its by-laws and/or permitted under Delaware law to adjourn the special meeting for any purpose, or to postpone the special meeting before it is convened, without the consent of any stockholder of the Company, provided that the merger agreement includes certain limitations on the Company’s ability to postpone or adjourn the meeting.

If the special meeting is adjourned, we are not required to give notice of the time and place of the adjourned meeting if announced at the meeting at which the adjournment is taken, unless the adjournment is for more than thirty (30) days or the Board fixes a new record date for the special meeting. At any adjourned meeting, any business may be transacted which might have been transacted at the original meeting. All proxies will be voted in the same manner as they would have been voted at the original convening of the special meeting, except for any proxies that have been effectively revoked or withdrawn prior to the time the proxy is voted at the reconvened meeting.

Solicitation of Proxies; Payment of Solicitation Expenses

We will bear the costs of solicitation of proxies for the special meeting. In addition to solicitation by mail, directors, officers and our regular employees may solicit proxies from stockholders by telephone, personal interview or otherwise. These directors, officers and employees will not receive additional compensation, but may be reimbursed for out-of-pocket expenses in connection with this solicitation. In addition to solicitation by our directors, officers and employees, we have engaged Innisfree to assist in the solicitation of proxies and provide related advice and informational support, for a fee of $25,000 and telephone charges. The Company has agreed to reimburse Innisfree for certain out-of-pocket fees and expenses and will also indemnify Innisfree, its subsidiaries and their respective directors, officers, employees and agents against certain claims, liabilities, losses, damages and expenses. The Company may advance monies to Innisfree to pay on the Company’s behalf charges rendered by banks, brokers or their agents for their expenses in forwarding proxy materials to beneficial owners of our common stock.

Questions and Additional Information

If you have more questions about the merger or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please contact Innisfree, our proxy solicitor, by calling toll-free at (888) 750-5834. Banks and brokers should call at (212) 750-5833.

THE MERGER

This discussion of the merger is qualified in its entirety by reference to the merger agreement, which is attached to this proxy statement as Annex A. You should read the entire merger agreement carefully and in its entirety as it is the legal document that governs the merger.

The merger agreement provides that Merger Sub will merge with and into the Company. The Company will be the surviving corporation following the merger. As a result of the merger, the Company will cease to be a publicly traded company and will become a wholly owned subsidiary of Parent. You will not own any shares of the capital stock of the surviving corporation.

Per Share Merger Consideration

In the merger, each outstanding share of our common stock will automatically be converted into the right to receive an amount of cash equal to $57.00, without interest, other than excluded shares and dissenting shares.

Background of the Merger

The Board has regularly reviewed and evaluated, with the Company’s senior management, the Company’s business strategies, opportunities and challenges as part of its consideration and evaluation of the Company’s prospects and stockholder value. As part of this process, the Board and management have considered and regularly reviewed the Company’s strategic direction and business objectives, including strategic opportunities that might be available to the Company, such as possible acquisitions, divestitures and business combination transactions. From time to time in the preceding four years, the Company’s senior management has had discussions with parties about the possibility of investing in the Company. Until May 2019, these discussions did not proceed to the point of entering into a confidentiality agreement (other than as discussed below with respect to one potential investor) or sharing non-public information with any such party.

Mr. Patrick Drahi is a client of the Company. From time to time, Mr. Drahi has met with employees of the Company regarding potential transactions in art in the ordinary course of the Company’s business.

In November 2018, a representative of a private equity fund (“Party A”) informed Mr. Michael Goss, the Chief Financial Officer of the Company, that Party A would be interested in investing in the Company alongside a private investment firm unaffiliated with any members of the Board (“Party B”). Mr. Goss offered to arrange a meeting for Party A and Party B (the “Party AB Group”) to discuss the potential investment with Mr. Tad Smith, Chief Executive Officer of the Company, and Mr. Goss. Mr. Goss informed Mr. Smith, of this conversation, and Mr. Smith then promptly informed Mr. Domenico De Sole, Chairman of the Board of the Company and Chair of the Nominating and Corporate Governance Committee of the Board.

On December 13, 2018, a representative of LionTree Advisors LLC (“LionTree”) informed Mr. Smith that Mr. Drahi, together with two other investors (“Party C” and “Party D”), none of whom was represented by LionTree, had an interest in acquiring the Company. Mr. Smith promptly informed Mr. De Sole of this conversation.

The Merger

Following the discussion with Mr. Goss in November 2018, the representative of Party A did not pursue a meeting with Mr. Smith and Mr. Goss, but called Mr. De Sole on December 16, 2018 and informed him that the Party AB Group had an interest in jointly acquiring the Company. The representative of Party A requested a meeting with Mr. De Sole to discuss a potential transaction. Following discussions with certain other members of the Board in the following days, Mr. De Sole informed Party A that, although the Company was not actively pursuing a sale of the Company at that time, if there was a proposal that the Party AB Group would like to make to the Company, Mr. De Sole would be willing to arrange a meeting to discuss.

In mid-December 2018, a representative of Mr. Drahi, contacted Mr. Smith to arrange a meeting with Mr. Drahi. Mr. Smith, Mr. Drahi and Mr. Drahi’s representative met on December 18, 2018 at the Company’s New York headquarters and discussed the global art market in general and general, publicly available information about the Company’s business, and also toured the Company’s New York headquarters. This meeting was the first time Mr. Smith had ever met or spoken with Mr. Drahi. Mr. Drahi, Mr. Drahi’s representative, and Mr. Smith did not discuss Mr. Drahi’s potential interest in acquiring the Company at this meeting, but Mr. Smith promptly informed Mr. De Sole of the meeting.

In January 2019, representatives of the Party AB Group called Mr. De Sole to request a meeting, which Mr. De Sole subsequently scheduled for February 5, 2019, to follow up on their discussions from December.

On February 5, 2019, Mr. De Sole and Mr. Harry Wilson, a director of the Company and the chair of the Board’s Business Strategy Committee, met with representatives of the Party AB Group, who made a presentation regarding their background research on the Company based on publicly available information and interviews with former and current employees of the Company (which interviews had not been authorized by the Company, Mr. Smith or any other member of the Board). The representatives of the Party AB Group stated that their preliminary financial analysis resulted in a valuation for the Company of approximately $50 per share of common stock, which they noted remained subject to upward or downward adjustment following due diligence. The closing market price of the Company’s common stock on that date was $40.57 per share. Mr. De Sole and Mr. Wilson thanked the representatives of the Party AB Group for their interest and stated they would then discuss the matter with the Board and respond to the Party AB Group following those discussions with the Board. Following this meeting, Mr. De Sole informed the other members of the Board (including Mr. Smith) of the Party AB Group’s proposal and provided them with a copy of the Party AB Group’s written presentation.

At a regularly scheduled in-person meeting of the Board on February 27, 2019, a portion of which was attended by representatives from the Company’s outside legal counsel, Sullivan & Cromwell LLP (“Sullivan & Cromwell”), Mr. Goss presented to the Board, at the Board’s request, a projection of the Company’s 2023 EBITDA reflecting potential growth in the core business and the projected results of the Company’s investments in its digital initiatives and other key initiatives. Following Mr. Goss’s presentation, the Board and management discussed the materials and particularly the meaningful execution risk to be considered in connection with the growth assumptions in the projections. The Board then instructed Mr. Goss to work with the Company’s senior management team to develop a full set of five-year financial projections for the Company for presentation to the Business Strategy Committee of the Board on April 3, 2019 (see the section entitled “The Merger—Certain Company Forecasts” beginning

The Merger

on page 61). In addition, the Board discussed the Party AB Group’s proposal, Mr. Drahi’s previous expression of interest and other strategic alternatives available to the Company, including the possibility of facilitating transactions that would result in a holder of a significant number of shares of the Company’s common stock transferring its stake to a potential investor. Mr. Daniel Loeb, a director of the Company and the founder of Third Point LLC, affiliates of which hold approximately 14.3% of the Company’s outstanding common stock, provided the directors with a financial analysis of a hypothetical private equity buyout of the Company that his firm had prepared following the receipt of the Party AB Group’s proposal. Mr. Loeb made clear that neither he nor Third Point LLC was interested in proposing such a potential buyout and that the analysis was intended to be illustrative only. During this discussion, Mr. Smith informed the other directors that, in his capacity as a stockholder of the Company and based on his knowledge of the Company as its Chief Executive Officer, he would be willing to vote in favor of a sale of the Company at a price between $55 and $60 per share. The closing market price of the Company’s common stock on that date was $40.85 per share. There was consensus among the directors, based upon their familiarity with the Company’s financial position, market valuation and available strategic alternatives, that the Party AB Group’s proposal was inadequate but that the Company was open to having further discussions with the Party AB Group about a potential proposal at a higher valuation. The Board authorized Mr. De Sole and Mr. Wilson to reject the Party AB Group’s proposal and to take the lead in evaluating the Company’s strategies when responding to the Party AB Group’s proposal. The Board also discussed potential financial advisors that could provide the Company with strategic advisory services and instructed Mr. Smith, in consultation with Mr. De Sole, to explore the engagement of LionTree as a financial advisor to provide the Company with strategic advisory services and LionTree’s perspective on valuation of the Company in light of the Company’s business plans. LionTree was selected due to its substantial experience in and reputation for providing such services, and its familiarity with representatives of several of the parties that had expressed, or the Board considered could express, interest in a transaction with the Company (including representatives of the Party AB Group and Mr. Drahi, none of whom had a contractual relationship with LionTree or would otherwise present a conflict in LionTree’s representation of the Company), as well as the fact that both Mr. Smith and Mr. Goss and certain members of the Board were familiar with representatives of LionTree from their prior work experiences at other companies.

On February 28, 2019, the Company entered into a non-disclosure agreement with LionTree pursuant to which LionTree agreed to keep confidential certain non-public information about the Company.

Also at the end of February 2019, Mr. De Sole and Mr. Wilson called representatives of the Party AB Group to inform them that the Board had reviewed the Party AB Group’s preliminary proposal and did not believe that further discussions at the Party AB Group’s valuation for the Company of approximately $50 per share of common stock would be in the best interests of the Company and its stockholders because the Board saw upside potential in the Company’s businesses. Mr. De Sole and Mr. Wilson noted that the Company was open to having further discussions with the Party AB Group about a potential proposal at a higher valuation, and invited the Party AB Group to meet with management to obtain additional due diligence information that might assist them to raise their bid. The representatives of the Party AB Group accepted the invitation to meet with Mr. Smith and Mr. Goss, which Mr. De Sole subsequently discussed with other members of the Board and agreed to arrange. The Party AB Group’s meeting with Mr. Smith and Mr. Goss was subsequently scheduled for April 10, 2019.

The Merger

In early March 2019, Mr. Smith attended an event sponsored by LionTree. At this event, Mr. Smith spoke privately with Party C, who was also in attendance, regarding Party C’s potential interest in acquiring the Company with Party D and Mr. Drahi. Party C informed Mr. Smith that Party D was no longer interested due to the potential that an acquisition of the Company would result in conflicts of interest with respect to Party D’s other activities. Mr. Smith promptly informed Mr. De Sole about this conversation. Mr. Loeb, who was also in attendance at this event, separately discussed his perspectives on an acquisition of the Company with a representative of LionTree.

On March 22, 2019, Mr. Goss and Mr. Jonathan Olsoff, the General Counsel of the Company, met in-person with representatives of the Party AB Group (in advance of the Party AB Group’s upcoming April 10 meeting with Mr. Smith and Mr. Goss) and discussed general, publicly available information about the Company’s business. Prior to this meeting, Mr. Smith sent the representatives of the Party AB Group an e-mail with suggested discussion topics for their upcoming April 10 meeting based on general, publicly available information about the Company’s business and the Party AB Group’s written presentation from February regarding their background research on the Company. Mr. Goss and Mr. Olsoff promptly updated Mr. Smith regarding their meeting with the Party AB Group, and Mr. Smith subsequently sent an additional e-mail to the representatives of the Party AB Group to follow-up on certain discussions they had with Mr. Goss and Mr. Olsoff at their meeting. Mr. Smith promptly informed Mr. De Sole about the meeting and the related communications.

In late March, Mr. Drahi’s representative approached Mr. Smith to arrange another meeting in the first week of April 2019. Mr. Smith promptly informed Mr. De Sole of a request by Mr. Drahi’s representative for a meeting, and Mr. De Sole confirmed that Mr. Smith should proceed with such meeting. At the meeting, on April 3, 2019, Mr. Drahi’s representative stated to Mr. Smith that Mr. Drahi was very serious about a potential acquisition of the Company. Mr. Smith promptly updated Mr. De Sole regarding the meeting.

In early April 2019, Mr. Drahi’s representative called Mr. Smith and requested permission to speak with the Company’s two largest stockholders, Third Point and Taikang Life Insurance Co. Ltd. (“Taikang”). Mr. Smith promptly informed Mr. De Sole of the request by Mr. Drahi’s representative for permission to speak with Third Point and Taikang, which Mr. De Sole agreed to provide and which Mr. Smith communicated back to Mr. Drahi’s representative.

On April 3, 2019, the Business Strategy Committee held a telephonic meeting, which was attended by all of the Company’s directors, LionTree, Mr. Goss and Mr. Olsoff. In that meeting, Mr. Goss presented a set of five-year financial projections for the Company (see the section entitled “The Merger—Certain Company Forecasts” beginning on page 61), prepared for the Business Strategy Committee at the instruction of the Board, and noted among other things that such projections could be overly optimistic as they entailed significant execution risk. After discussion, the Business Strategy Committee instructed Mr. Goss to work with the Company’s senior management to supplement the set of five-year financial projections to take into account various economic and commercial scenarios for the upcoming Board meeting on May 8 and May 9, 2019. In addition, LionTree reviewed with the Business Strategy Committee historical trends and current dynamics in the global art marketplace, the Company’s positioning within the global art marketplace, the Company’s five-year financial projections and an analysis of their sensitivity to key drivers of performance, and a comparison of the Company’s status quo opportunities to

The Merger

an inorganic expansion plan or sale of the Company. At this meeting, Mr. Smith discussed with the members of the Business Strategy Committee his discussions with Mr. Drahi and his representative, and he reminded the Board that a U.S. private equity fund (“Party E”), which had previously executed a confidentiality agreement (which did not include a standstill) with the Company in November 2017 while considering a potential investment in the Company’s digital businesses, had previously expressed an interest in considering a transaction involving the whole Company in the future. The Business Strategy Committee authorized Mr. Smith to engage in preliminary discussions with Party E to gauge its interest in an acquisition of the Company. LionTree also reviewed with the Business Strategy Committee, in a meeting attended by all members of the Board, a list of potential counterparties that could have an interest in acquiring the Company, including private equity sponsors, sovereign wealth funds, family offices of high net worth individuals, and strategic counterparties. The Business Strategy Committee discussed the likelihood that any such potential counterparties would be interested in acquiring the Company at an attractive price, their ability to pay and potential regulatory impediments to acquisitions by certain of them. The Business Strategy Committee also considered the pros and cons of soliciting indications of interest from potentially interested parties or engaging in a public auction process, including the risk that a leak about the Company’s solicitation efforts could disrupt the Company’s relationships with its employees and damage its business activities with its clients. As the Company’s business is highly reliant on a steady and rolling process of securing substantial consignments with multi-month time horizons, the Board considered that many clients would be reluctant to consign to the Company in the presence of substantial uncertainty around its ownership, management and key employees. Based on these considerations, the Board determined it would not initiate a broad solicitation of indications of interest at such time.

On April 8, 2019, the Company executed an engagement letter with LionTree pursuant to which LionTree agreed to assist the Company in conducting a review of the Company and an evaluation of different strategic alternatives. The engagement letter had an initial term of six months and required the Company to consider in good faith engaging LionTree as its financial advisor if the Company should pursue a buy-side or other strategic transaction prior to April 8, 2020.

On April 10, 2019, Mr. Smith and Mr. Goss met in-person with representatives of the Party AB Group, with Mr. De Sole attending the meeting via telephone, and discussed general, publicly available information about the Company’s business. After this meeting, Mr. De Sole determined that in order for further discussions to take place with the Party AB Group, the Party AB Group would need to provide a specific proposal to the Company in writing. Mr. De Sole called a representative of Party A shortly thereafter to relay this message.

In mid-April 2019, Mr. Smith contacted a representative of Party E to discuss Party E’s potential interest in an acquisition of the Company. Also in mid-April 2019, Mr. Smith was approached by the founder of a non-U.S. private equity fund (“Party F”), who indicated that his fund may have an interest in a potential acquisition of the Company. The founder of Party F informed Mr. Smith that he believed Party F would be able to pay a price of approximately $49 or $50 per share in cash to acquire the Company. During this time period, the market price of the Company’s common stock was between $40 to $45 per share. Mr. Smith requested that Party F submit a proposal in writing to the Company and promptly updated Mr. De Sole regarding this discussion.

The Merger

On May 6, 2019, the Party AB Group sent Mr. De Sole a letter outlining the terms of a preliminary, non-binding proposal to acquire the Company in a take-private transaction at a value of $52.50 per share of common stock, in cash. The closing market price of the Company’s common stock on that date was $40.30 per share. The letter indicated that the Party AB Group would require third party debt financing and outlined the key areas of due diligence on the Company that the Party AB Group would require, including a review of the Company’s historical and forecast revenue and profitability trends, including its business segment and geographic performance; a review of the Company’s organizational structure, both at the departmental and geographic level, including personnel and other allocated resources; a review of the current functionality, feature set, and technical capabilities of the Company’s existing platforms, as well as the Company’s forward-looking technology roadmap; and customary accounting and tax, legal, environmental and functional reviews. The letter also indicated that the Party AB Group’s offer would require final approval from Party A’s investment committee and Party B’s investment officers following completion of diligence.

Also in early May 2019, Mr. Drahi’s representative informed Mr. Smith that Mr. Drahi continued to have an interest in acquiring the Company, and that Mr. Drahi planned to submit a formal proposal to the Company after he secured his financing arrangements for the acquisition. In the course of the discussion, Mr. Drahi’s representative remarked that Mr. Drahi would have an interest in Mr. Smith remaining as Chief Executive Officer of the Company under Mr. Drahi’s ownership. Mr. Smith advised Mr. Drahi’s representative that if Mr. Drahi wanted to make a proposal, he should direct it to the Board in writing and that Mr. Smith would not discuss potential employment arrangements in relation to any such proposal unless and until authorized to do so by the Board. Mr. Drahi’s representative agreed that this was appropriate. Mr. Smith promptly informed Mr. De Sole and Mr. Wilson of this discussion. Mr. Smith has informed the Company that as of the date of filing of this definitive proxy statement, Mr. Smith had neither sought nor received any offer of employment from Mr. Drahi or his representatives nor made any determination concerning whether he would accept any such offer.

On May 8 and 9, 2019, at a regularly scheduled meeting of the Board, Mr. Goss presented the Company’s five-year financial projections that were prepared at the instruction of the Business Strategy Committee to show a “high case,” “middle case” and “low case” with respect to the Company’s financial projections for the upcoming five-year period assuming the Company remains a public company (the “draft five-year projections”) (see the section entitled “The Merger—Certain Company Forecasts” beginning on page 61). The cases were sensitized to include adjustments for the risks associated with macroeconomic conditions and the global art marketplace’s acceptance of the Company’s new initiatives. The directors (including Mr. Michael Wolf, who joined the Board on May 9, 2019 as a director of the Company designated by Third Point) discussed the draft five-year projections, including the fact that they entailed significant execution risks. Also at this meeting, representatives of LionTree reviewed with the Board certain preliminary financial analyses of the Company. The Board discussed the Party AB Group’s preliminary non-binding proposal (including the contingencies contained therein), as well as Mr. Smith’s conversation with Mr. Drahi’s representative. The Board also discussed the individual directors’ views on an appropriate price for an acquisition of the Company (with respect to which the Board did not come to a consensus but which included, in the case of Mr. Linus Cheung, an independent director of the Company designated by Taikang, independent of Taikang and approved by the Board, a price close to $100 per share, which was a price significantly higher than any price discussed by any other director), and strategies for testing the prices that each of the Party AB Group and Mr. Drahi might be willing to offer to

The Merger

acquire the Company, and authorized the Company’s senior management and LionTree to consult with Mr. De Sole and Mr. Wilson to refine those strategies as discussions with each of the Party AB Group and Mr. Drahi unfolded. The Board also discussed the merits and downsides of conducting a public auction process (which downsides included the risk that a public auction process could disrupt the Company’s relationships with its employees and damage its business activities with its clients (including the Company’s ability to secure new consignments from its clients)), the types of other potential counterparties that could have an interest in acquiring the Company, including private equity sponsors, sovereign wealth funds, family offices of high net worth individuals, and strategic counterparties, and the likelihood any such potential counterparties would be interested in acquiring, and their ability to acquire, the Company at an attractive price. Following this discussion, the Board authorized the Company’s senior management and LionTree to offer each of the Party AB Group and Mr. Drahi the opportunity to participate in a meeting with Mr. De Sole, Mr. Smith and Mr. Goss at which Mr. Goss would present the Company’s draft five-year projections, subject to entering into appropriate confidentiality agreements.

On May 9, 2019, representatives of LionTree contacted representatives of the Party AB Group to invite them to participate in a meeting to receive a presentation regarding the Company’s draft five-year projections. Representatives of the Party AB Group thereafter sent the Company a written list of due diligence requests, but, at the direction of the Board, representatives of LionTree informed representatives of the Party AB Group that a price of $52.50 per share of common stock was unacceptable for the Company to proceed with the Party AB Group’s due diligence requests, but that the Company was willing to provide a presentation regarding the Company’s draft five-year projections, subject to execution of a mutually acceptable confidentiality agreement, which might assist the Party AB Group with raising their bid. Representatives of the Party AB Group then accepted the proposed meeting to receive a presentation regarding the Company’s draft five-year projections.

Also on May 9, 2019, after consultation with Mr. De Sole, Mr. Smith (with Mr. Dennis Weibling, a director of the Company and the chair of both the Board’s Audit and Finance Committees, listening in on the discussion) contacted Mr. Drahi’s representative to invite Mr. Drahi’s advisors to participate in a meeting to receive the same presentation regarding the Company’s draft five-year projections as was offered to the Party AB Group, subject to execution of a mutually acceptable confidentiality agreement. Mr. Drahi’s representative informed Mr. Smith that such a meeting was not necessary at that time, as Mr. Drahi was nearly finished with securing his financing arrangements for the potential acquisition of the Company.

On May 15, 2019, representatives of LionTree scheduled a meeting between Mr. De Sole, Mr. Smith and Mr. Goss, on the one hand, and representatives of the Party AB Group, on the other hand, to take place on June 6, 2019.

On May 17, 2019, representatives of the Party AB Group contacted representatives of LionTree to request approval to add two new private investment funds to the Party AB Group (“Party G” and “Party H”). After discussing the Party AB Group’s request with representatives of LionTree, Mr. De Sole and members of the Company’s senior management concluded that neither of Party G nor Party H was likely to be interested in acquiring the Company by itself and that their inclusion in the Party AB group could potentially strengthen the Party AB group’s bid, so they agreed to allow Party G and Party H to join the Party AB Group.

The Merger

Between May 17, 2019 and June 3, 2019, the Company, together with representatives of Sullivan & Cromwell, negotiated and executed confidentiality agreements with each member of the Party AB Group. Each of the confidentiality agreements included a standstill provision and a customary “don’t ask, don’t waive” provision that terminated upon the announcement by the Company of a change of control transaction with a third party.

On May 23, 2019, Mr. Smith met with a representative of a party (“Party I”) that expressed an interest in pursuing the formation of a fund with the Company to invest jointly in art, jewelry and other collectibles. Also on that day, Mr. Smith was contacted by a representative of Party E who informed Mr. Smith that Party E did not consider an acquisition of the Company to be a transaction that Party E wished to undertake.

On May 28, 2019, Mr. Smith and Mr. Goss were contacted by a representative of Party F with a request to discuss a list of diligence questions compiled by Party F based on its review of the Company’s public filings. The Party F representative noted that Party F was interested in leading a consortium that would include a strategic non-U.S. entity and another private investor potentially to acquire the Company. Mr. Smith consulted with Mr. De Sole regarding the appropriate response to Party F and subsequently informed a representative of Party F that the Company would not provide Party F with due diligence access prior to receiving a proposed price from Party F. However, Mr. Smith agreed to arrange a meeting with Party F for mid-June 2019 to discuss general, publicly available information about the Company’s business, which meeting was cancelled promptly after the execution of the merger agreement.

On May 28, 2019, after discussions with Mr. De Sole and Mr. Wilson, representatives of LionTree contacted Mr. Drahi’s representative to inquire about the status of Mr. Drahi’s interest in acquiring the Company and informed Mr. Drahi’s representative that the Board would be open to negotiating a transaction for a sale of the Company, noting that certain directors supported a price of $65 per share of common stock. Mr. Drahi’s representative stated that Mr. Drahi would not be amenable to a transaction at that price.

On May 30, 2019, after further discussions with Mr. De Sole and Mr. Wilson, representatives of LionTree contacted Mr. Drahi’s representative to let him know that he should make his best proposal and get as close as he could to a price per share of common stock in the $60s. Mr. Drahi’s representative stated that Mr. Drahi would revert to LionTree with an indicative proposal in the next few days.

On June 2, 2019, Mr. Smith was contacted by another representative of Party I regarding Party I’s interest in having exploratory discussions with the Company regarding a potential minority investment in the Company, coupled with a right to designate a director to the Board. Thereafter on June 2, 2019, Mr. Smith consulted with Mr. De Sole regarding the communication and Mr. Smith subsequently communicated to Party I that the Company was open to having further discussions regarding Party I’s interest in making an investment in the Company.

On June 3, 2019, a letter outlining the terms of an offer was sent to the Company by BidFair Ltd. (together with its subsidiaries, “BidFair”), an entity indirectly wholly-owned by Mr. Drahi, to acquire the Company at a price of $52.25 per share of common stock in cash. The closing market price of the Company’s common stock on that date was $32.38 per share. The letter stated that BidFair would not require any due diligence with respect to the Company, that BidFair was already in possession of a debt

The Merger

commitment letter from BNP to provide debt financing with respect to the transaction and that BidFair would be able to negotiate definitive transaction documents within one week.

Around June 4, 2019, Mr. Drahi’s representative informed a representative of LionTree that he had contacted a representative of Taikang to ask about whether Taikang would be likely to support a potential sale of the Company to Mr. Drahi. Mr. Drahi’s representative indicated that the representative of Taikang did not state a clear position but noted that Sotheby’s was a strategic investment for Taikang. The representative of LionTree promptly informed Mr. De Sole and Mr. Smith of this conversation. Mr. Smith informed the representative of LionTree that Mr. Loeb had previously authorized Mr. Smith to tell Mr. Drahi’s representative that Third Point would be open to a sale of the Company at the right price and would not seek to roll over its shares in connection with an acquisition of the Company.

On June 5, 2019, Mr. De Sole, together with the other chairs of the committees of the Board (Mr. Wilson, Mr. Weibling, and Ms. Jessica Bibliowicz, the chair of the Board’s Compensation Committee), as well as Mr. Smith and Mr. Loeb, met telephonically with representatives of LionTree and Sullivan & Cromwell to discuss BidFair’s June 3 proposal and potential strategies for getting BidFair to increase its proposed offer price. The directors present at this meeting also discussed the advisability of contacting Taikang to inquire about its interest in making an offer to acquire the Company, but determined not to do so after concluding that the several weeks it would take to explore the possibility of a deal with Taikang would put the no-diligence, fully-financed deal currently proposed by Mr. Drahi at-risk. At the conclusion of the discussions regarding strategies, there was consensus among the directors in attendance to recommend to the Board that the Company revert to Mr. Drahi’s representative to propose a price of $57.50 per share of common stock in cash. The directors in attendance also discussed strategies with respect to the Party AB Group as well as whether the Company should reach out to any other potentially interested parties at that time. At the direction of such directors following the telephonic meeting, representatives of LionTree subsequently contacted Mr. Drahi’s representative to inform him that BidFair’s proposed price of $52.25 per share of common stock was too low but that a price of $57.50 per share of common stock was at a level that the subset of the directors who had the opportunity to consider BidFair’s proposal to date believed would form the basis for a transaction that could be recommended to the Board. The closing market price of the Company’s common stock on that date was $33.67 per share. Shortly after that discussion, Mr. Drahi’s representative contacted representatives of LionTree to inform them that BidFair would be willing to raise its proposed price to $57.00 per share of common stock in cash, but nothing higher, and believed that it could complete a definitive transaction agreement in approximately seven to ten calendar days without any due diligence apart from a meeting with Company management to address a few discrete topics. However, Mr. Drahi’s representative stated that BidFair’s offer was subject to the definitive transaction agreement including a termination fee of five percent because BidFair was offering a greater than 60% premium to the Company’s market price and believed that it should be compensated for helping to deliver such a high premium to the Company’s stockholders in the event a third party ultimately made a superior proposal.

On June 6, 2019, BidFair sent Mr. De Sole a letter confirming its offer to acquire the Company for $57.00 per share of common stock in cash. Subsequently on June 6, 2019, Mr. De Sole, Mr. Smith and other members of the Company’s senior management team discussed BidFair’s revised proposal with representatives of LionTree and Sullivan & Cromwell.

The Merger

Also on June 6, 2019, Mr. De Sole, members of the Company’s senior management and representatives of LionTree met with representatives of the Party AB Group and presented the Company’s draft five-year projections to them.

On the evening of June 6, 2019, and the morning of June 7, 2019, Mr. De Sole contacted each member of the Board individually to apprise them of the contents of the letter from BidFair and to confirm their availability to join a telephonic Board meeting on June 7, 2019.

On June 7, 2019, LionTree provided a letter to the Board stating that as of June 7, 2019, LionTree had reviewed its internal records regarding investment banking engagements with Altice USA, Inc. a telecommunications and media company controlled by Mr. Drahi (“Altice”) and Mr. Drahi in the preceding two years, and reported that LionTree had not performed any investment banking services for which it had received compensation from Altice or Mr. Drahi during such time.

On June 7, 2019, Mr. De Sole met with Mr. Drahi’s representative to discuss the status of the potential transaction and Mr. Drahi’s vision for the future of the Company.

Also on June 7, 2019, at a special telephonic meeting of the Board attended by representatives of LionTree and Sullivan & Cromwell, the Board discussed BidFair’s proposal to acquire the Company for $57.00 per share of common stock. Representatives of Sullivan & Cromwell discussed BidFair’s request for a five percent termination fee and the range of potential deal protections that BidFair might seek to include in a definitive agreement with respect to the transaction. Mr. Goss made a presentation to the Board regarding the Company’s senior management’s ongoing work to derive a single base case set of five-year projections for the Company from the “high case,” “middle case” and “low case” projections set forth in the draft five-year projections that would reflect management’s best estimate of the most likely outcome over the next five years assuming the Company remains a public company and factoring in the substantial execution risks going forward. Representatives of LionTree reviewed with the Board certain preliminary financial analyses related to BidFair’s proposal. Mr. Cheung stated that he believed BidFair’s proposal was inadequate and that the Company’s value was close to $100 per share of common stock. Mr. Cheung indicated he might abstain from any vote to approve a transaction at the price proposed by BidFair. Mr. Cheung also stated his belief that Taikang might have an interest in acquiring the Company and there followed a discussion concerning the fiduciary obligations of the directors and the options potentially available to the Company if it received a superior proposal after having executed a merger agreement with a bidder. After discussion, the Board authorized the Company’s senior management, LionTree and Sullivan & Cromwell to engage in negotiations with BidFair concerning its proposal. The Board also discussed strategies with respect to the Party AB Group, and whether there were any other potential bidders whom the Company should contact at that time, taking into consideration the antitrust and competition law and foreign investment regulatory considerations (including CFIUS) associated with such other potential bidders (including as compared to BidFair and the Party AB Group) and the need to take measures to try to avoid a leak about the potential transaction, which could disrupt the Company’s relationships with its employees and damage its business activities with clients. The Board also discussed the advisability of contacting Taikang to inquire about its interest in making an offer to acquire the Company, but determined not to do so after considering the potential regulatory considerations in connection with such a transaction and the Board’s belief that the several weeks it would take to explore the possibility of a deal with Taikang would put the no-diligence, fully-financed deal proposed by BidFair at-risk. After excusing LionTree from the meeting, the Board also discussed engaging LionTree as the

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Company’s financial advisor with respect to a potential change in control transaction. The Board approved the engagement of LionTree and authorized Mr. Goss and Mr. De Sole to determine the financial and other terms of LionTree’s engagement.

On June 8 and 9, 2019, the Company, together with representatives of Sullivan & Cromwell, negotiated with BidFair and representatives of BidFair’s outside counsel, Hughes, Hubbard & Reed LLP (“Hughes Hubbard”) and executed a confidentiality agreement between the Company and BidFair Limited. Mr. Drahi’s representative had previously communicated that he would not be willing to sign a standstill agreement, and the confidentiality agreement did not include a standstill.

On June 10, 2019, members of the Company’s senior management, Mr. De Sole and representatives of LionTree and Sullivan & Cromwell met with Mr. Drahi and other representatives of BidFair, including representatives of Morgan Stanley Securities LLC and BNP, BidFair’s financial advisors for the transaction, and Hughes Hubbard. Certain of the attendees joined the meeting telephonically or by video conference. At the meeting, the representatives of the Company provided Mr. Drahi and his representatives with a presentation concerning the Company’s businesses, including certain historical financial information and a discussion of the Company’s digital business initiatives. Mr. Drahi, BidFair and their representatives did not request, and the Company did not provide, the Company’s draft five-year projections.

Also on June 10, 2019, a representative of the Party AB Group contacted a representative of LionTree and stated that the Party AB Group would follow up in the next day or two with respect to the Party AB Group’s interest in acquiring the Company.

Also on June 10, 2019, representatives of Hughes Hubbard sent representatives of Sullivan & Cromwell a draft merger agreement with respect to the transaction which proposed, among other things, that the Company would pay a termination fee equal to five percent of the Company’s equity value should the Board change its recommendation of the transaction to accept a superior proposal. Hughes Hubbard also provided a draft voting and support agreement that BidFair requested be signed by Third Point, Taikang, each of the Company’s directors and such number of members of the Company’s executive management team that would bring the number of executed voting and support agreements to ten, equal to approximately 32% of the shares then eligible to vote on any such transaction.

From June 10, 2019 until the execution of the merger agreement by the Company and BidFair on June 16, 2019, representatives of BidFair, Hughes Hubbard, Ropes & Gray International LLP (“Ropes & Gray”), who represented BidFair with respect to certain financing-related matters, members of the Company’s senior management (in consultation with Mr. De Sole), Sullivan & Cromwell and LionTree met telephonically and in person multiple times and exchanged multiple drafts of the merger agreement, equity commitment letter and guaranty. During this period, Third Point also negotiated the terms of the voting and support agreement with Hughes Hubbard and from time to time representatives of Sullivan & Cromwell consulted with a representative of Third Point regarding the terms and conditions of the merger agreement and strategies with respect to the negotiations. The Company refused BidFair’s request to ask Taikang to sign a voting and support agreement. The parties discussed Mr. Drahi’s request for a five percent termination fee on multiple occasions, and on numerous occasions the Company and its advisors sought to reduce the size of the proposed termination fee in connection with a potential go-shop period, by having a lower termination fee applicable to Taikang or other specified parties, or by having a lower overall termination fee. In addition to the termination fee and other deal protections, key subjects

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of the negotiations of the merger agreement and related transaction documentation included, among other things, the potential inclusion of a reverse termination fee associated with a potential failure of BidFair’s debt financing to be available when the transaction was otherwise ready to be consummated, the inclusion of a guaranty of BidFair’s obligations from a creditworthy entity and the treatment of employee equity awards and other employee benefits. At the Company’s request, BidFair provided the Company with certain financial information concerning the entities that BidFair proposed would be providing an equity commitment and a guaranty with respect to the transaction, together with copies of and information concerning BidFair’s debt commitment arrangements. BidFair also provided information concerning Mr. Drahi’s investments to assist the Company with evaluating the need for and risks associated with securing regulatory approvals for a transaction between the Company and BidFair.

On June 11, 2019, a representative of Party I contacted Mr. Smith to inquire whether Mr. Smith had any updates in response to Party I’s expression of interest in a potential minority investment in the Company. Mr. Smith told Party I that he would be in touch in the following week, and Mr. Smith promptly informed Mr. De Sole of this communication.

In addition, on June 11, 2019, a representative of the Party AB Group contacted Mr. Loeb and observed that the Company’s market price had declined since the Party AB Group submitted its written proposal to acquire the Company at a price of $52.50 per share in case. The closing market price of the Company’s common stock on that date was $35.46 per share. The representative of the Party AB Group subsequently spoke with a representative of LionTree and communicated a similar message regarding the decline in the Company’s market price, and stated that the Party AB Group would submit a revised proposal to acquire the Company that took into account the management presentation previously provided by the Company to the Party AB Group. During that conversation, the representative of the Party AB Group indicated that the Party AB Group’s proposed price of $52.50 per share was unchanged but that it could change upward or downward after the Party AB Group was provided with additional due diligence, which the Party AB Group would be prepared to undertake only if the Company granted the Party AB Group exclusivity. Later in the day on June 11, 2019, the Party AB Group submitted a non-binding offer letter to the Company reaffirming the Party AB Group’s interest in pursuing an acquisition of the Company at the same price of $52.50 per share it had previously offered (subject to final investment committee and officer approvals following completion of due diligence), restating the need to obtain third party debt financing, and requesting that the parties negotiate exclusively (noting that the Party AB Group would be open to having a go-shop period following the signing of a deal) and three weeks of due diligence.

On June 12, 2019, Mr. De Sole met with Mr. Drahi to discuss the status of the potential transaction and Mr. Drahi’s vision for the future of the Company.

On June 13, 2019, the Company and LionTree entered into an engagement letter pursuant to which LionTree would act as the Company’s financial advisor in connection with a potential change of control transaction.

On June 14, 2019, the Board met telephonically with certain members of the Company’s senior management and representatives of LionTree and Sullivan & Cromwell to discuss the status of the Company’s negotiations with BidFair and to discuss next steps. At the request of the Board, Mr. Goss presented a base case set of five-year financial projections for the Company (the “base case projections”),

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which was derived from the “high case,” “middle case” and “low case” projections set forth in the draft five-year projections to reflect management’s best estimate of the most likely outcome over the next five years assuming the Company remains a public company, taking execution risks into account (see the section entitled “The Merger—Certain Company Forecasts” beginning on page 61). After discussion, the directors voted unanimously to approve the base case projections for use by LionTree in connection with its financial analysis of the BidFair proposal, and LionTree subsequently reviewed with the Board certain preliminary financial analyses related to the BidFair proposal at that meeting. Representatives of Sullivan & Cromwell provided an overview of the key terms of the merger agreement and the voting and support agreement, including the material issues that the parties were still negotiating, such as the size of the Company’s termination fee, the inclusion and size of any reverse termination fee, the marketing period for BidFair’s debt financing, the treatment of equity interests held by employees, the continuation of the Company’s existing employee benefit arrangements and certain obligations with respect to antitrust, competition and other regulatory filings and approvals. Representatives of LionTree also provided, in advance of the meeting and orally at the meeting, disclosure concerning an estimated $625,000 non-voting and non-controlling investment held by LionTree and certain of its members in a third party investor in Altice USA. The Board considered this disclosure and concluded that the investment was immaterial, that such investment would not impair the ability of LionTree to render impartial advice to the Board, and that the Board remained satisfied with LionTree’s independence. At the conclusion of the meeting, the Board met in executive session without Mr. Smith or any other members of management present and discussed certain considerations related to the treatment of equity interests held by employees in the proposed transaction and the extent to which the Company’s existing employee benefit arrangements would continue after the consummation of the proposed transaction.

On June 16, 2019, Mr. De Sole, Mr. Smith and other members of the Company’s senior management, along with representatives of LionTree and Sullivan & Cromwell, participated in multiple telephonic meetings among themselves and with Mr. Drahi’s representative and representatives of Hughes Hubbard and Ropes & Gray to resolve the remaining outstanding issues in the merger agreement, including the size of the Company’s termination fee. Mr. De Sole reviewed and approved the material positions taken by senior management during these negotiations. Mr. Drahi’s representative communicated to representatives of LionTree that Mr. Drahi’s position was that he would agree to a reverse termination fee that would be double the Company’s termination fee, but that he would do so only with respect to a termination fee of four percent and a reverse termination fee of eight percent, or a termination fee of up to five percent and a reverse termination fee correspondingly double the Company termination fee, of up to ten percent. After further discussion and consultation with the Company’s financial and legal advisors as well as Mr. De Sole and Mr. Smith, representatives of LionTree communicated to Mr. Drahi’s representative that Mr. De Sole and management would recommend that the Board accept Mr. Drahi’s proposal for a four percent termination fee and an eight percent reverse termination fee.

Later in the day on June 16, 2019, the Board met telephonically with certain members of the Company’s senior management and representatives of LionTree and Sullivan & Cromwell. Representatives of Sullivan & Cromwell and LionTree reviewed the latest developments in negotiations and discussions with BidFair. A representative of Sullivan & Cromwell reviewed the key terms of the merger agreement, the current version of which was distributed in advance of the meeting, and the

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proposed resolutions that the Board would be adopting if it determined that the transaction was in the best interests of the Company and the Company’s stockholders and to enter into the transaction. The Board asked questions of management and the representatives of LionTree and Sullivan & Cromwell. Representatives of LionTree reviewed certain financial analyses that they had performed with respect to the final proposal from BidFair as set forth in a presentation distributed in advance of the meeting. At the Board’s request, representatives of LionTree rendered LionTree’s oral opinion, which was subsequently confirmed in writing by delivery of LionTree’s written opinion dated June 16, 2019, that, as of the date of such opinion and based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken as set forth in its written opinion, the per share merger consideration to be received by the holders of the Company’s common stock (other than the excluded shares and dissenting shares) pursuant to the merger agreement is fair, from a financial point of view, to such holders. For a detailed discussion of LionTree’s opinion, see the section entitled “The Merger—Opinion of the Company’s Financial Advisor” beginning on page 51. Sullivan & Cromwell then led a discussion of the support agreement, dated November 4, 2016, entered into between Taikang Insurance Group and the Company (the “Taikang support agreement”) in connection with its investment in the Company. The Board discussed that, while the Taikang support agreement would permit Taikang to make a superior proposal to acquire the Company following the announcement of a transaction with BidFair, it was desirable to ensure that there would be no technical obstacles under the standstill provisions of the Taikang support agreement to Taikang making such a proposal. The Board unanimously adopted a resolution effectively removing any such obstacles to such a proposal under the Taikang support agreement. Following further discussion, the Board thereafter (i) determined that the merger agreement, the voting and support agreement, the equity commitment letter and the guaranty and the merger and the other transactions contemplated by the merger agreement and such other transaction documents, are advisable to, and in the best interests of, the Company and its stockholders, (ii) approved and declared advisable the merger agreement and the execution, delivery and performance by the Company of the merger agreement and the consummation of merger and the other transactions contemplated by the merger agreement, (iii) approved the other transaction documents, including the voting and support agreement, and the execution, delivery and performance of such documents by their respective parties and the consummation of the transactions contemplated by such documents; (iv) directed that the merger agreement be submitted to the Company’s stockholders for adoption at a special meeting of the Company’s stockholders; and (v) resolved to recommend that the Company’s stockholders vote in favor of adoption of the merger agreement and such other matters submitted for the stockholders’ approval and/or adoption in connection with the merger agreement. The Board also amended and restated the Executive Severance Plan to cover each of the Company’s current executive officers (other than Mr. Smith) and provide for “good reason” severance protection (as described further in the section entitled “The Merger—Interests of Certain Persons in the Merger” beginning on page 67). All of the Company’s directors voted in favor of these resolutions with the exception of Mr. Cheung, who abstained after restating his belief that the value of the Company exceeded the proposed purchase price but who indicated his willingness to allow the Company’s stockholders to vote on the transaction nonetheless.

On the evening of June 16, 2019, the Company, Parent and Merger Sub executed the merger agreement.

On July 23, 2019, representatives of Taikang sent a letter to Mr. De Sole requesting that the Company provide either a copy of the board resolutions adopted at the board meeting on July 16, 2019

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related to the Taikang support agreement or an explanation of how the Board removed obstacles to Taikang’s ability to engage in corporate takeover actions under the Taikang support agreement.

On July 24, 2019, at the direction of the Company, Sullivan & Cromwell sent a letter to Taikang’s representatives providing the pertinent text of the board resolutions, dated July 16, 2019, relating to the Taikang support agreement, which provide in relevant part as follows: “[T]he Board determines that the submission of an unsolicited proposal that would be an Alternative Transaction Proposal (as defined in the Merger Agreement) by or on behalf of a party to the Taikang Support Agreement and the consummation of a transaction with any such party that is a Superior Proposal (as defined in the Merger Agreement) shall not be deemed to be restricted for purposes of the Taikang Support Agreement.”

Reasons for the Merger; Recommendation of the Company’s Board of Directors

The Board (i) determined that the merger agreement, the voting and support agreement, the equity commitment letter and the guaranty, the merger and the other transactions contemplated by the merger agreement and such other transaction documents are advisable to, and in the best interests of, the Company and the stockholders; (ii) approved and declared advisable the merger agreement and the execution, delivery, and performance by the Company of the merger agreement and the consummation of the merger and the other transactions contemplated by the merger agreement; (iii) approved the ancillary documents and the execution, delivery and performance of the ancillary documents by their respective parties and the consummation of the transactions contemplated by the ancillary documents; (iv) directed that the merger agreement be submitted to the stockholders for adoption at the special meeting; and (v) recommended that the stockholders vote to adopt the merger agreement and to approve and/or adopt such other matters that are submitted to the stockholders at the special meeting in connection with the merger agreement. Approval of the proposal to adopt the merger agreement requires the affirmative vote of holders of a majority of the shares of common stock outstanding as of the close of business on the record date.

Our Board recommends that you vote “FOR” approval of the merger proposal and “FOR” approval of the compensation proposal.

In the course of reaching its determination and recommendation, the Board consulted with and received the advice and assistance of its legal and financial advisors. In recommending that stockholders vote in favor of adoption of the merger agreement, the Board considered a number of factors, including the following (which factors are not necessarily presented in order of relative importance):

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In the course of reaching its recommendation, the Board also considered a variety of risks and potentially negative factors concerning the merger and the merger agreement, including the following:

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The above discussion of the information and factors considered by the Board is not intended to be exhaustive, but indicates the material matters considered. In reaching its determination and recommendation, the Board did not quantify, rank or assign any relative or specific weight to any of the foregoing factors, and individual members of the Board may have considered various factors differently. The Board did not undertake to make any specific determination as to whether any specific factor, or any particular aspect of any factor, supported or did not support its ultimate recommendation. Moreover, in considering the information and factors described above, individual members of the Board each applied his or her own personal business judgment to the process and may have given differing weights to differing factors. The Board based its recommendation on the totality of the information presented. The explanation of the factors and reasoning set forth above contain forward-looking statements that should be read in conjunction with the section of this proxy statement entitled “Cautionary Statements Regarding Forward-Looking Information.”

Opinion of the Company’s Financial Advisor

On June 16, 2019, at a meeting of the Board, LionTree rendered an oral opinion to the Board (which was subsequently confirmed in writing by delivery of LionTree’s written opinion dated June 16, 2019) to the effect that, as of such date, the per share merger consideration to be received by the holders of

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Sotheby’s common stock (other than excluded shares and dissenting shares) in the merger pursuant to the merger agreement was fair from a financial point of view, based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken, and other matters considered by LionTree in preparing its opinion.

LionTree’s opinion was provided to, and for the benefit of, the Board in connection with its evaluation of the merger and only addressed the fairness, from a financial point of view, of the per share merger consideration to be received by the holders of Sotheby’s common stock (other than excluded shares and dissenting shares) in the merger pursuant to the merger agreement (without giving any effect to any impact of the merger and other transactions contemplated by the merger agreement on any particular stockholder of Sotheby’s other than in its capacity as a holder of Sotheby’s common stock). The summary of LionTree’s opinion in this proxy statement is qualified in its entirety by reference to the full text of its written opinion, which is included as Annex C to this proxy statement and incorporated herein by reference, and sets forth the procedures followed, assumptions made, qualifications and limitations on the review undertaken, and other matters considered by LionTree in preparing its opinion. However, neither LionTree’s opinion nor the summary of its opinion and the related analyses set forth in this proxy statement constitutes a recommendation to any holder of Sotheby’s common stock as to how such stockholder should vote or act on any matter relating to the merger and other transactions contemplated by the merger agreement or any other matter.

In arriving at its opinion, LionTree, among other things:

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In connection with LionTree’s review, with Sotheby’s consent, LionTree assumed and relied upon, without independent verification, the accuracy and completeness of the information provided to, discussed with, or reviewed by LionTree for the purpose of its opinion. In addition, with Sotheby’s consent, LionTree did not make any independent evaluation or appraisal of any of the assets or liabilities (contingent or otherwise) of Sotheby’s, or any of its subsidiaries, nor was LionTree furnished with any such evaluation or appraisal. With respect to the financial forecasts and estimates referred to above (which forecasts and estimates are summarized in the section entitled “The Merger—Certain Company Forecasts” and which we refer to collectively as the “forecasts”). LionTree assumed, with Sotheby’s consent (and based on advice of the management of Sotheby’s), that the forecasts have been reasonably prepared in good faith on a basis reflecting the best currently available estimates and judgments of the management of Sotheby’s as to the future financial performance of Sotheby’s and its subsidiaries. LionTree expressed no opinion with respect to such forecasts. LionTree’s opinion did not address any legal, regulatory, taxation, or accounting matters, as to which LionTree understood that Sotheby’s had obtained such advice as it deemed necessary from qualified professionals, and LionTree assumed the accuracy and veracity of all assessments made by such advisors with respect to such matters. LionTree’s opinion is necessarily based on economic, monetary, market, and other conditions as in effect on, and the information available to LionTree as of, the date of its opinion and LionTree’s opinion speaks only as of the date thereof.

LionTree’s opinion did not address Sotheby’s underlying business decision to engage in the merger and other transactions contemplated by the merger agreement or any related transaction, the relative merits of the merger and other transactions contemplated by the merger agreement or any related transaction as compared to other business strategies or transactions that might be available to Sotheby’s, or whether the consideration to be received by the stockholders of Sotheby’s pursuant to the merger agreement represented the best price obtainable. Other than responding to certain inbound inquiries received by Sotheby’s, in connection with its engagement, LionTree was not requested to, and did not, solicit interest from other parties prior to the date of its opinion with respect to an acquisition of, or other business combination with, Sotheby’s or any other alternative transaction. LionTree also expressed no view as to, and its opinion did not address, the solvency of Sotheby’s or any other entity under any state, federal, or other laws relating to bankruptcy, insolvency, or similar matters. LionTree’s opinion addressed only the fairness, from a financial point of view, to the holders of Sotheby’s common stock (other than excluded shares and dissenting shares), as of the date of its opinion, of the per share merger consideration to be received by such stockholders pursuant to the merger agreement. LionTree was not asked to, nor did it, offer any opinion as to the terms, other than the per share merger consideration to the extent expressly specified in its opinion, of the merger agreement or any related documents or the form of the merger and other transactions contemplated by the merger agreement or any related transaction (including any agreement or transaction between Sotheby’s, on the one hand, and Parent, Merger Sub or any other subsidiary or affiliate of Parent, on the other, or between Parent and any of its subsidiaries or other affiliates), including the fairness of the merger and other transactions contemplated under the merger agreement to, or any consideration received in connection therewith by, the holders of any other class of securities, creditors, or other constituencies of Sotheby’s, Parent, or any of their respective affiliates. In addition, LionTree expressed no opinion as to the fairness of the amount or nature of any compensation to

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be received by any officers, directors, or employees of any parties to the merger and other transactions contemplated by the merger agreement, any of Parent, Merger Sub or any other subsidiary or affiliate of Parent, or any class of such persons, whether relative to the per share merger consideration or otherwise. LionTree’s opinion should not be construed as creating any fiduciary duty on the part of LionTree (or any of its affiliates) to any party. LionTree expressed no opinion as to the prices at which Sotheby’s common stock will trade at any time. In rendering its opinion, LionTree assumed, with Sotheby’s consent, that except as would not be in any way meaningful to its analysis: (i) the final executed form of the merger agreement would not differ from the draft that LionTree reviewed, (ii) the representations and warranties of the parties to the merger agreement, and the related transaction documents, were true and correct, (iii) the parties to the merger agreement, and the related transaction documents, would comply with and perform all covenants and agreements required to be complied with or performed by such parties under the merger agreement and the related transaction documents, and (iv) the merger and the other transactions contemplated by the merger agreement would be consummated in accordance with the terms of the merger agreement and related transaction documents, without any waiver or amendment of any term or condition thereof. LionTree also assumed, with Sotheby’s consent, that all governmental, regulatory, or other third-party consents and approvals necessary for the consummation of the merger or the other transactions contemplated by the merger agreement would be obtained without any adverse effect on Sotheby’s or on the expected benefits of the merger and other transactions contemplated by the merger agreement in any way meaningful to its analysis.

LionTree’s opinion was provided for the benefit of the Board (in its capacity as such) in connection with, and for the purpose of, its evaluation of the merger and the other transactions contemplated by the merger agreement, and does not constitute a recommendation to any holder of Sotheby’s common stock as to how such stockholder should vote or act with respect to the merger or the other transactions contemplated by the merger agreement or any other matter.

In rendering its opinion to the Board, LionTree performed a variety of analyses, including those described below. The summary of LionTree’s analyses is not a complete description of the analyses underlying LionTree’s opinion. The preparation of a fairness opinion involves various quantitative and qualitative judgments and determinations with respect to the financial, comparative and other analytical methods employed and the adaptation and application of these methods to the unique facts and circumstances presented. Consequently, neither a fairness opinion nor its underlying analyses is readily susceptible to summary description. LionTree arrived at its opinion based on the results of all analyses undertaken by it, assessed as a whole, and did not draw, in isolation, conclusions from or with regard to any individual analysis, methodology or factor. Accordingly, LionTree believes that its analyses and the following summary must be considered as a whole and that selecting portions of its analyses, methodologies and factors or focusing on information presented in tabular format, without considering all analyses, methodologies and factors or the narrative description of the analyses, could create a misleading or incomplete view of the process underlying LionTree’s analyses and opinion. Each analytical technique has inherent strengths and weaknesses, and the nature of the available information may further affect the value of particular techniques.

In performing its analyses, LionTree considered general business, economic, industry, regulatory and market conditions, financial and otherwise, and other matters as they existed on, and could be evaluated as of, the date of its opinion. LionTree’s analyses involved judgments and assumptions with regard to

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general business, economic, industry, regulatory and market conditions, financial and otherwise, and other matters, many of which are beyond the control of the parties to the merger agreement, such as the impact of competition on the business of the parties and on the industry generally, industry growth and the absence of any material change in the financial condition and prospects of Sotheby’s or the proposed merger or other transactions contemplated by the merger agreement, and an evaluation of the results of those analyses is not entirely mathematical. LionTree believes that mathematical derivations (such as determining mean and median) of financial data are not by themselves meaningful and should be considered together with qualities, judgments, and informed assumptions. The estimates contained in the forecasts and the implied reference range values indicated by LionTree’s analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by the analyses. Additionally, any analyses relating to the value of assets, businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold, which may depend on a variety of factors, many of which are beyond the control of the parties. Much of the information used in, and accordingly the results of, LionTree’s analyses are inherently subject to substantial uncertainty.

LionTree’s opinion was provided to the Board in connection with its evaluation of the merger and the other transactions contemplated by the merger agreement and was only one of many factors considered by the Board in evaluating the merger and the other transactions contemplated by the merger agreement. The consideration payable in the merger and the other transactions contemplated by the merger agreement was determined through negotiation between Sotheby’s and Parent and the decision to enter into the merger agreement was solely that of the Board. LionTree did not recommend any specific type or amount of consideration to Sotheby’s or the Board, nor did it recommend that any specific type or amount of consideration constituted the only appropriate consideration for the merger and the other transactions contemplated by the merger agreement.

The following is a summary of the material analyses performed by LionTree in connection with LionTree’s presentation to the Board and opinion rendered on June 16, 2019. The order of the analyses does not represent relative importance or weight given to those analyses by LionTree. The analyses summarized below include information presented in tabular format. The tables alone do not constitute a complete description of the analyses. Considering the data in the tables below without considering the full narrative description of the analyses, as well as the methodologies underlying, and the assumptions, qualifications and limitations affecting, each analysis, could create a misleading or incomplete view of LionTree’s analyses.

For purposes of its analyses, LionTree reviewed a number of financial and operating metrics, including:

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Unless the context indicates otherwise, EVs and equity values derived from the selected companies analyses described below were calculated using the closing price of Sotheby’s common stock and the common equity of the selected publicly traded companies listed below as of market close on June 14, 2019. Accordingly, this information may not reflect current or future market conditions.

In addition, unless the context indicates otherwise, per share amounts for Sotheby’s common stock were calculated on a fully diluted basis using the treasury stock method, assuming the conversion of all outstanding Company DSUs, outstanding Company PCUs, outstanding Company PSUs, outstanding Company RSUs and outstanding Company RCUs.

Financial Analyses

Selected Publicly Traded Companies Analysis . Using publicly available information, LionTree compared selected financial data of Sotheby’s to corresponding financial data for the following publicly traded companies in the luxury retail industry:

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Although none of the selected companies is directly comparable to Sotheby’s, the companies included were chosen because they are publicly traded companies with operations that for purposes of this analysis were considered by LionTree in its judgment to be similar, in certain respects, to certain operations of Sotheby’s. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the companies differently than they would affect Sotheby’s.

Using publicly available information, for each of the selected companies, LionTree calculated valuation multiples, including (a) EV as a multiple of estimated EBITDA for calendar year (CY) 2019 (based on consensus equity research analyst estimates), and (b) share price as a multiple of estimated 2019 earnings per share (“EPS”) (based on consensus equity research analyst estimates).

The multiples of the selected companies were compared to the corresponding multiples of Sotheby’s derived from the Sotheby’s forecasts.

The multiples for each selected company, the low, mean, median and high multiples for the selected companies, and the multiples for Sotheby’s (at its closing price as of June 14, 2019) are set forth below:

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Based on the multiples calculated as described above, LionTree’s analyses of the various selected publicly traded companies and on professional judgments made by LionTree, LionTree applied a range of multiples of 11.0x to 13.0x to Sotheby’s management’s estimate of CY 2019 EBITDA of Sotheby’s based upon the forecasts to derive a range of estimated implied values of approximately $35.31 to $45.34 per share of Sotheby’s common stock. Further, LionTree applied a range of multiples of 15.0x to 23.0x to Sotheby’s management’s estimate of CY 2019 EPS of Sotheby’s based upon the forecasts to derive a range of estimated implied values of approximately $36.38 to $55.78. LionTree compared the foregoing implied value ranges to the per share merger consideration of $57.00 to be received pursuant to the proposed merger and the other transactions contemplated by the merger agreement.

Selected Transactions Analysis . LionTree reviewed and analyzed the financial terms of selected transactions in the luxury retail industry it deemed relevant. Although none of the selected transactions is directly comparable to the merger and the other transactions contemplated by the merger agreement, the selected transactions were chosen because, in LionTree’s judgment, they are merger and acquisition transactions that for purposes of this analysis may, in certain respects, be considered similar to the merger and the other transactions contemplated by the merger agreement. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the transactions and companies involved and other factors that may differ from the merger and the other transactions contemplated by the merger agreement.

Using publicly available information, LionTree calculated, for each selected transaction, the implied enterprise value in the transaction as a multiple of EBITDA over the last twelve months (LTM) publicly reported prior to the announcement of the transaction. The following table summarizes the results of this analysis:

Although LionTree included the Versace/Michael Kors transaction in its analysis because it is a recent acquisition of a publicly traded luxury retail company, LionTree considered that the EV/LTM EBITDA multiple paid in that transaction was an outlier that fell outside the normal range of EV/LTM EBITDA

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multiples for acquisitions of publicly traded luxury retail companies. Consequently, LionTree presented data for the precedent transactions both including and excluding the Versace/Michael Kors transaction.

Based on the results of this analysis and its professional judgment and experience, LionTree selected and applied a multiple range of 10.0x to 16.0x to Sotheby’s LTM EBITDA, as of March 31, 2019. From this analysis, LionTree derived an implied value per share range for Sotheby’s common stock of approximately $25.54 to $52.76 per share. LionTree compared the foregoing implied value range to the per share merger consideration of $57.00 to be received pursuant to the proposed merger and the other transactions contemplated by the merger agreement.

Discounted Cash Flow Analysis . LionTree performed a discounted cash flow (“DCF”) analysis of Sotheby’s by calculating the estimated net present value of the unlevered, after-tax free cash flows that Sotheby’s was forecasted to generate for the last nine months of 2019 and the four (4) calendar years ending December 31, 2023 (“CY 2023”) based upon the forecasts.

For the DCF analysis, LionTree calculated terminal values for Sotheby’s by applying a range of terminal value multiples of 11.0x to 13.0x to Sotheby’s estimated EBITDA for CY 2023 based upon the forecasts. These terminal value multiple estimates were derived by LionTree utilizing its professional judgment and experience, taking into account, among other things, estimated operational metrics for Sotheby’s and the operational metrics and EBITDA multiples for selected publicly traded companies. The present values of the cash flows and terminal values were then calculated using discount rates ranging from 9.0% to 10.0%, reflecting estimates of Sotheby’s weighted average cost of capital. LionTree derived these discount rates by application of the capital asset pricing model, which requires certain company-specific inputs, including the company’s target capital structure weightings, the cost of long-term debt, future applicable marginal cash tax rate and a beta for the company, as well as certain financial metrics for the United States financial markets generally. LionTree then subtracted from the range of implied enterprise values Sotheby’s net debt of approximately $964 million to derive a range of implied equity values for Sotheby’s as of March 31, 2019. The resulting range of implied equity values was then brought forward to June 14, 2019 using a rate of 13.0%, reflecting LionTree’s estimate of Sotheby’s cost of equity. LionTree divided the range of implied equity values it derived by the number of fully diluted outstanding shares of Sotheby’s common stock as of June 14, 2019, or approximately 48.6 million shares. The DCF analysis indicated an implied per share equity value reference range of $39.11 to $50.43 for the Sotheby’s common stock. LionTree compared the foregoing implied value range to the per share merger consideration of $57.00 to be received pursuant to the proposed merger and the other transactions contemplated by the merger agreement.

Analyst Price Target Analysis . For reference purposes only, LionTree reviewed one year forward share price targets for shares of Sotheby’s common stock prepared and published by 4 equity research analysts and known to LionTree as of June 14, 2019. The equity research analysts and their respective one year forward share price targets for Sotheby’s common stock were as follows: Berenberg Capital Markets - $39.00; Cowen & Company - $44.00; Consumer Edge Research - $49.00; and Sidoti & Company LLC - $50.00. The average one year forward share price target for Sotheby’s common stock was $45.50 per share compared to the closing price per share of Sotheby’s common stock of $35.39 on June 14, 2019. LionTree performed a present value analysis of the equity research analyst share price targets by discounting these share price targets to present value at June 14, 2019 using a discount rate of 13.0%,

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reflecting LionTree’s estimate of Sotheby’s cost of equity. This analysis indicated an implied per share equity value reference range of $34.86 to $44.87 for the Sotheby’s common stock. LionTree compared the foregoing implied value range to the per share merger consideration of $57.00 to be received pursuant to the proposed merger and the other transactions contemplated by the merger agreement.

Premiums Paid Analysis . For reference purposes only, using publicly available data, LionTree reviewed the premiums paid in selected all cash acquisitions of North American publicly traded companies with transaction values between $1.0 billion and $10.0 billion for the ten (10)-year period ended June 14, 2019 (excluding transactions involving real estate investment trusts, investment trusts/mutual funds and major banks), or a total of 465 transactions. This analysis indicated that the median premium in the selected transactions relative to the closing price of the acquired company on the trading day prior to the announcement of the transaction was 22.6% and the median premium in the selected transactions relative to the closing price of the acquired company thirty (30) trading days prior to the announcement of the transaction was 33.4%. LionTree applied these median premiums to the closing price of Sotheby’s common stock on June 14, 2019 and to the closing price of Sotheby’s common stock on the thirtieth trading day prior to and including June 14, 2019. This analysis indicated an implied per share equity value reference range of $43.37 to $54.27 for the Sotheby’s common stock. LionTree compared the foregoing implied value range to the per share merger consideration of $57.00 to be received pursuant to the proposed merger and the other transactions contemplated by the merger agreement.

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described in the section entitled “The Merger—Background of the Merger” beginning on page 32. In the ordinary course of business, certain of LionTree’s employees and affiliates may hold or trade, for their own accounts and the accounts of their investors, securities of Sotheby’s and affiliates of Parent and, accordingly, may at any time hold a long or short position in such securities.

Certain Company Forecasts

The Company does not, as a matter of course, publicly disclose long-term projections as to future revenues, earnings or other results due to, among other reasons, the uncertainty, unpredictability and subjectivity of the underlying assumptions and estimates. However, in the Spring of 2019, at the request of the Board, the Company prepared certain financial forecasts (the “Company projections”) to assist the Board with forming a view about the stand-alone valuation of the Company. The Company subsequently provided these forecasts to the Board and LionTree. These forecasts were not prepared for public disclosure.

A summary of certain of the Company projections is not being included in this document to influence the decision of our stockholders whether to vote for or against the merger proposal, but is being included because the Company projections were made available to the Board and LionTree. The inclusion of this information should not be regarded as an indication that the Board, its advisors or any other person considered, or now considers, the Company projections to be material or to be a reliable prediction of actual future results, and the Company projections should not be relied upon as such. The Company projections are subjective in many respects. There can be no assurance that the Company projections will be realized or that actual results will not be significantly higher or lower than forecasted. Certain of the Company projections cover multiple years and/or relate to the year 2023 and such information by its nature becomes subject to greater uncertainty with each successive year. As a result, the inclusion of the Company projections in this proxy statement should not be relied on as necessarily predictive of actual future events.

In addition, the Company projections were not prepared with a view toward public disclosure or toward complying with generally accepted accounting principles (“GAAP”), the published guidelines of the SEC regarding projections and the use of non-GAAP measures or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Neither the Company’s independent registered public accounting firm nor any other independent accountants have compiled, examined or performed any procedures with respect to the Company projections contained in this proxy statement, nor have they expressed any opinion or any other form of assurance on such information or its achievability. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by the Company may not be comparable to similarly titled amounts used by other companies. The non-GAAP financial measures used in the forecasts were relied upon by LionTree for purposes of its financial analyses and opinion and by the Board in connection with its consideration of the merger. Financial measures provided to a financial advisor are excluded from the definition of non-GAAP financial measures and, therefore, are not subject to SEC rules regarding disclosures of non-GAAP financial measures, which would otherwise require a reconciliation of a non-GAAP financial measure to a GAAP financial measure.

Additionally, although the Company projections presented below are presented with numerical specificity, they are not facts. The Company projections were based on numerous variables and

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assumptions that were deemed to be reasonable as of the respective dates when such Company projections were finalized. Such assumptions are inherently uncertain and may be beyond the control of the Company. Important factors that may affect actual results and cause the Company projections not to be achieved include, but are not limited to, risks and uncertainties relating to the Company’s business (including its ability to achieve strategic goals, objectives and targets and its ability to retain customers and key employees), industry performance, the legal and regulatory environment, global political conditions, the financial markets, the art market, general business and economic conditions and other factors described or referenced under “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 23. In addition, the Company projections reflect assumptions that are subject to change and do not reflect revised prospects for the Company’s business, changes in general business or economic conditions, or any other transaction or event that has occurred or that may occur and that was not anticipated as the Company projections were prepared. The Company has not prepared revised forecasts to take into account other variables that have changed since the dates on which the Company projections were finalized. There can be no assurance that the Company projections will be realized or that the Company’s future financial results will not materially vary from the Company projections.

Projected 2023 EBITDA (1)

In February 2019, the Company prepared and presented to the Board a projection of the Company’s 2023 EBITDA reflecting the projected results of the Company’s investments in its digital initiatives.

Initial Five-Year Projections (1)(2)

At the instruction of the Board, the Company developed a full set of five-year financial projections for the Company (the “initial five-year projections”) for presentation to the Business Strategy Committee of the Board in April 2019.

Draft Five-Year Projections

At the instruction of the Business Strategy Committee, the Company supplemented, for presentation to the Board in May 2019, the initial five-year projections to take into account various economic and commercial scenarios and prepared the draft five-year projections. The “high case,” “middle case” and “low case” projections in the draft five-year projections were sensitized to address risks associated with macroeconomic conditions and the global art marketplace’s acceptance of the Company’s new initiatives.

The Merger