[Form of Deferred Compensation Agreement with Outside Directors]




[Date]

[Name]
[Address]

Dear [Name]:

You have indicated your election to [continue to] defer receipt of certain
amounts which will otherwise become payable to you by The Estee Lauder Companies
Inc. (the "Company") in connection with your service on the Board of Directors
of the Company and certain Committees of that Board[, if any]. This letter sets
forth the terms of the deferral facility.

1.   This agreement shall cover all amounts otherwise payable to you in cash by
     the Company in connection with your service as a member of the Board of
     Directors of the Company, and meeting and chairmanship fees otherwise
     payable in connection with your service on the Company's Board and any
     Committees of that Board (the "Deferred Payments"). Deferred Payments shall
     not include the in-kind shares of Class A Common Stock equal in value to
     one-fourth the annual retainer fee and the one-time grant of shares paid to
     you under the applicable stock plans, nor reimbursement for expenses
     incurred in connection with your Company activities.

2.   The Company [has established] [shall establish] a Deferred Payment Account
     in your name, and shall credit to such Account an amount equal to
     one-fourth of the then applicable annual retainer as of the day of the
     Board Meeting in February, May and August (and if there shall be no meeting
     in such month, then as of the fifteenth day of such month). Additionally,
     the Company shall credit to the Deferred Payment Account the amount of any
     annual chairmanship fee as of the date you are first appointed chairman of
     a committee and at each annual meeting at which such appointment is renewed
     and additional amounts representing the per meeting fee for each Board or
     Committee meeting as of the date of such meeting.

3.   (a)     Amounts accrued from time to time in the Deferred Payment Account
     shall additionally be credited with interest, compounded annually each
     December 31 after the date hereof until all Deferred Payments and accrued
     interest credited to the Deferred Payment Account shall have been paid in
     accordance with the terms of this letter agreement. Appropriate pro-ration
     shall be made for part year interest credits.

     (b)     The rate of interest credited from time to time pursuant to this
     paragraph shall be the Citibank base rate in effect as of the date of such
     credit, not to exceed nine percent (9%).

4.   Subject to the terms of paragraph 5, below, the amounts credited to the
     Deferred Payment Account shall be paid in a lump sum, as of the first
     January 1st after the last date of your service as a member of the Board of
     Directors of the Company.

5.   In the event of your death prior to the payment to you of all amounts then
     credited to the Deferred Payment Account, amounts then unpaid, including
     interest as set out at paragraph 3,





     above, from the preceding December 31 to the date of payment, shall be paid
     to your executor or administrator within ninety days after the date that
     such person shall be duly qualified in such capacity.

6.   This agreement shall continue in full force and effect unless it shall be
     terminated, by you or by the Company, by either party giving written notice
     of such termination. If such notice is given, termination shall be
     effective as of the first January 1 that occurs more than ninety (90) days
     after the date of such notice. Notwithstanding the giving of such notice,
     amounts deferred prior to the effective date of termination shall be paid
     at the time and in the manner set forth in paragraph 4 or 5, above.

7.   Nothing in this letter agreement shall be deemed to create a trust or
     segregated asset account of any nature, and no money or other thing of
     value shall be separately held by the Company in connection with its
     obligation to make Deferred Payments hereunder. The attempt by any person
     to anticipate, hypothecate or otherwise receive value in respect of such
     obligation prior to the date scheduled for the payment of Deferred Payments
     under the terms of this letter agreement shall be null and void and of no
     force or effect.

Please indicate your acknowledgement of and agreement to all of the foregoing by
signing the enclosed copy of this letter and returning it to the undersigned
prior to the end of the calendar year.

                                            Very truly yours,

                                            THE ESTEE LAUDER COMPANIES INC.



                                            By:
                                               ---------------------------------
                                                     [Name]
                                                     [Title]


ACKNOWLEDGED AND AGREED TO:



--------------------------------
[Name]
Date: